98
}
EMPLOYEES' PROVIDENT FUND ORGANISATIONNEW DELHI
ji1
69th Meeting of the
FINANCE AND INVESTMENT COMMI'I"I'EE[CENTRAL BOARD OF TRUSTEES, EMPLOYEES' PROVIDENT FUND]
-,)
on
17TH OCTOBER, 2002 at 2.80 P.M.
VENUE:Conference RoomC.S.I.R. BuildingRafiMargNew Delhi -110001
.--------""'"-----~,-.- --- --- ..... - .' --. ..
g;eeoocccO ~CcccccC'rC()
() <-L;
LC
LCG(.,
L:(.,
L
L
LL
f -.EMPLOYEES' PROVIDENT FUND ORGANISATIO
(Ministry of Labour, Govt. of India)Head Office
Bhavishya Nidhi Bhawan, 14, Bhikaiji Cama Place,New Delhi - 110 066
No. Invest.I11(69th)/02IMeeting!
To,
Dated: 11-10-2002
All the Members,Finance & Investment Committee,Employees' Provident Fund Organization
Subject:- Holding of 69th meeting of the Finance and Investment Committee, Employees' Provident.Fund Organization - Regarding.
Sir,
Kindly refer to this office letter of even no. dated 7.10.2002 on the captioned subject. As informedearlier the 69th meeting of the Finance & Investment Committee, Employees' Provident Fund Organizationwill be held on Thursday the 17th October, 2002 at 2.30 p.m. in the Conference Room ofCSIR Building,Rafi Marg, New Delhi - 11000 1. .
Agenda of the meeting alongwith the memorandum is enclosed.
You are requested kindly to make it convenient to attend the meeting.
Yours faithfully,
(K. A)Regional Provident Fund Commissioner (INVEST.)
CoPy forwarded to:
1.
2.3.4.S.
6.7.8.
l.
PS to Secretary (Labour), Govt. oflndia, Ministry of Labour, New DelhiPS to FA (Labour), Govt. oflndia, Ministry of Labour, New DelhiPS to Director (Finance), Govt. oflndia, Ministry of Labour, New DelhiPS to Central Provident Fund CommissionerShri A. Viswanathan, Addl. CPFC (pension) & IS with request to present the Item NO.6related to BPRRPFC (Conference}RPFC (Finance & Accounts)Shri Hemant Contractor, General Manager, (PM & CS), State Bank of India, MadameCama Raod, Mumbai - 400 021.
(K.L. T~,;__Regional Provident Fund Commissioner NVEST.)
-'4••000ocC (,
CCCCCI
C0C)C:
c0 (
cCL'CCCcLLL
(,
LLC
L
l
l
6 'I '''' i\lLfl Fi-~ ciC t r-lCol !Lu:J s.CONTENTS _ .
Item No. Description Page No.
1. Confirmation of the Minutes of the 68th Meeting of the Finance 2-13
and Investment Committee held at New Delhi.
2. Statement showing the action taken on the recommendations of 14-51
the committee
3. Review of Investments 52-64
4. Status Report on 16% HMT Bonds, Face Value of Rs. 25 crore - 65-69
Non payment of outstanding interest and principal
-the I5. Appointment of Portfolio Auditor regarding Audit of 70-74
Investment Portfolio managed by the State Bank of India, II
Mumbai for the financial year 2002-03. Ii ,i:
6. Cost Benefit Analysis of Implementation of proposed Business I 75-91
Process Re-engineering under the Project aRE-INVENTING IEPFINDIN I
i7. Any other item with the permission of the Chair I
II
.1_
t
•· .'
• Item No.1: Confirmation of the minutes of the 68th meeting of the Finance &
• Investment Committee held at New Delhi.
eooc:orcrr('
(
CcCC,( ..
The draft minutes of the se" meeting of Finance & Investment Committee held at New Delhi
on 16.8.2002 were circulated to all members of the Committee vide letter No.
Invst.1I1(67th)02lMeeting/7539-48 dated 21-08-2002. (Copy of ,the minutes of 68th meeting is
enclos.ed)
No comments have been received so far.
The committee may, therefore, confirm the minutes of the 68th meeting.
(
llCCL'
C
L·C
l
L
L
l.
L
l
••••eooccr('
(
(
(I
(
(
(
(
(!
(
(
(
(
(
(
(
tC
l(
(
lt
DRAFT MINUTES OF THE 68th MEETING OF THE FINANCE AND INVESTMENTCOMMITTEE, CENTRAL BOARD OF TRUSTEES. EMPLOYEES' PROVIDENT FUND
HELD ON 16.08.2002 AT NEW DELHI
The 68th meeting of the Finance and Investment Committee, Central Board
of Trustees, Employees' Provident Fund was held on 16th Auqust 2002 in New
Delhi at 11.00 a.m. The meeting was chaired by the Joint Secretary and Financial
Adviser (Labour).
The following were present:
Shri W.R. Varada Rajan, MemberShrl Alampalli Venkatram, MemberShri Suresh M. Deora, MemberShri Anirudh Rai, Convenor
Shri Lal Rawna Sailo and Shri, J.P. Choudhury, could not attend themeeting and sought leave of absence.
Shri Ajai Singh, Central Provident Fund Commlsstoner, Shri A.
Viswanathan, Addl. CPFC (Pension) and Mohd. Bashar, Assistant General Manager,
State Bank of India, Central Office, Mumbai were also present in the meeting as
special invitees.
At the outset, the Chairperson welcomed the members and special invitees. The
Committee expressed its appreciation of the commendable services of Sh Gaurav Dave and
also welcomed Sh Anirudh Rai to the Committee. Thereafter, agenda items were taken up for
discussion.
Item No.1: Confirmation of the minutes of 6Th meeting of the Financeand Investment Committee held on 10-04-2002.
The Committee approved the minutes as drculated.
Item No.2: Statement showing the actionrecommendations of the Committee
taken on the
Item No. 2 (1): Liberalizationof Investment Guidelines:
The Committee was informed about the tetestcommunicetion-trom-
Ministry of Labour dated 09-08-2002 on the subject informing that
the matter stands referred to Ministry of Finance. The Committee ' .
was also informed by the FA & CAO that Ministry' of Finance was
contacted for expediting the process and that a preliminary meeting
will be held either on lc;th or 20th August 2002 for expedltlntFthe
matter,
P""~1nf" r.·\FlNINVMFT\~~1 ~~tinnfiR-1MII •••'M'\n •..•••ft' ""in..; foR,"'" tf(V"
.,• I
•e00ccc: I)
('
cc('
('I
C(
(
(
( ,
Item No. 2(2): Outstanding ;Interest and Maturity proceeds
(
(
(
<--
(
(
<-l
LLl(
l
l
L
(
~
~The Committee observed that a major part of outstandings
pertained to the IFCI. The FA& CAD informed the Committee that a
meeting was held with IFCI representatives on 14-08-2002 on the
issue. IFCI has proposed to pay the outstanding interest which
became due upto 31-03-2002 amounting to Rs. 74 crores. IFCI has
made the proposal subject to the condition that the outstanding
maturity proceeds and interest amounting to about Rs. 136 crores
. due from 01-04-2002 to 31-03-2003 will be rolled over. The
Committee rejected the roll-over proposal as the proposed
instrument for roll-over does not qualify for investment as per
extant guidelines prescribed by Central Board of Trustees,
Employees' Provident Fund. The Committee further decided that the
IFCI may be allowed a temporary moratorium on. payment of
interest and maturity proceeds and be. granted installment facility
for payment of outstandings with the following conditions:-
~ IFCI should give an undertaking that all future interest and
maturity payments due to Central Boar.d of Trustees,
Employees' Provident Fund shall be remitted in full and in
due time.
~ Proposal regarding roll over of interest and maturity amount
be considered only if fresh bonds in lieu of existing ones are
fully and unconditionally guaranteed by Government of India.
The Committee also decided that a calibrated strategy as
indicated below be adopted to recover outstanding dues from IFCI:-
.:. The Central PF Commissioner may write to Secretary
(Banking) Ministry of Rnance through Ministry of
Labour detailing the outstanding dues from IFCI and
response Of IFa thereto.
.:. If the matter is not resolved, the possibility of making
a reference to Committee of Secretaries, Government
of India be explored for resolving the issue.
.:. Should the matter still remain unresolved steps may
be taken to explore the possibility of filing a petition
regarding winding up of IFCI Ltd. for recovery of
outstanding dues.
..••••eeoc("
cccrc'c(
c(
c'(, ~'
(
.)
Item No. 2(3): Idle Funds
The Committee desired that in future the State Bank of India should
furnish the idle funds statement every fortnight regularly and EPFOshould
take requisite action on it. Status of the action taken may be placed before
the Committee.
Item No. 2(4): Extracts of Audit Reports to be furnished by State Bank ofIndia
The Committee noted the contents.
Item No.2(5): Exit option to the Portfolio Manager
The Committee was informed about the latest communication
from Mini,stry of Labour dated 09-08-2002 on the subject
informing that the matter stands referred to IFD Branch of
Ministry of labour. The Committee noted the contents and desired
to take up the matter with Ministry of finance.
Item 1140.2(6): Implications of reverse merger of ICICI ltd. With ICICIBank.
The Committee noted the contents.
(
<-(
(
<-
l<-
C(
l
'-l
Item No.2(7): Portfolio management charges payable to the State Bank of
India for the year 2002-03:
As desired by the Finance and Investment Committee, SBI has
opted to reduce the·transaction fee from Rs. 0.04 per Rs; 100 to Rs.
0.03 per Rs. 100 on face value of investment, hence it may be
accepted.
Item NO.2(8) : Investments of Central Board of Trustees, Employees'
Provident Fund in IFCI.
The observations of the Committee are recorded against item
2(2) above.
Item No.2(9) Investments of Central Board of Trustees, Employees'
Provident Fund in bonds issued by PSIDC.
The Committee was informed that outstanding interest in part
l: amounting Rs. 49 lacs has been received on 7/8/2002 and the
matter has been taken up with the PSIDC and they have
promised that the outstanding interest will be,paid within one
l
•••eoccccrc[
ccr(
(
(
(
(
l(
(
(
(
l(
Cl
l
lllt
month. The Committee desired that the pressure be kept up on
PSIDC to ensure recovery of Interest as well as outstanding
maturity proceeds.
Ite~ No.2(10) : Declaration of rate of inter.est for EPFsubscribers for the
year 2002-03.
The Committee noted the contents.
Item No.3: Review of InvestmentThe Committee noted the contents.
Item No.4: Status paper on 16% HMTBonds.
The committee noted the contents and observed as under:-
» The proposal forwarded by Mis HMT Ltd. vide their letter
dated sth August 2002 is not acceptable.
» S8I, the portfolio manager be advised to file a petition in the
Karnataka High Court seeking a direction from the Hon'ble
Court directing the City Civil Court to hear and dispose off the
pending injunction petition within seven days. If required aSenior Advocate may be engaged for doing the needful in the
Hon'ble High Court Latest advertisement by HMT for selling off
its properties and hiving off its Watch Division may also be
incorporated in the petition. The RPFCKarnataka may also be
assodated.
» RPFC Karnataka be advised to attach the properties of Mis
HMT Ltd. for recovering the outstanding Provident Fund dues
to the PF trust of Mis HMT Ltd.
Item No 5: Audit Report (1.10.2000 to 31.03.2001) of investment
portfolio of CBT,EPFby SRB&. Associates.
The Committee desired that the matter be first discussed in the
Pension Implementation Committee.
It~m No.6: Cost Benefit Analysis ot Implementation of proposed
Business Process Re-engineering under the Project "RE-
INVENTING EPFINDIA"
The Additional Central PF Commissioner (IS) made a detailed
presentation on the topic. It was informed that the issue was.
considered by the IT sub-Committee in its meeting held on 12th
.0. ,••••eec:cccr(
(
(
\'c(
c(
(
(
(
(
l(
(
(
l
l
l
(
l
l
l
{
August 2002 minutes of which wllf be forwarded to all the members
of the Finance & Investment Committee also. The Finance &
Investment Committee authorized its Chairperson to peruse the
minutes of the IT sub-committee on its behalf and record the
decision of the Finance & Investment Committee on the issue.
The cost benefit analysis of the proposed Business Process
Re-englneering was considered in depth by the Committee and
consensus emerged on the following:-
~ Existing business processes have run through their life cycle
and are increasingly proving to be inadequate to handle the
existing business. About three crore stake holders are
increasingly dissatisfied with the present service delivery
system based on single entry system of accounting. This
single entry system of accounting as well as the existing
software is highly susceptible to frauds. It need hardly be
empahasized that it is a serious cause of concern, given the
huge financial stakes involved.
~ Geometric growth in the membership of the Employee' PF
organisation can be envisaged only in the fully networked
computerized redesigned business processes based on double
entry system of accounting.
~ The proposed redesigned business process be accepted as 3
whole as piece meal acceptance and implementation will not
be possible.
The Committee after going through the cost projections,
benefits and principles of the proposed Business Process Re-
engineering for improving the work processes was of the view that
the Reinventing EPF India project was finanCially viable as its
Financial Internal Rate of Return was between 20% to 30%. The
Committee unanimously recommended that the BPR should be
implemented as a whole for making the EPFO a world class
organisation delivering best possible services to its members.
The meeting ended with a vote of thanks to the Chair.
(
( -(
(
(
c(
(,
(
(,
()(I (,
<-(
(
ll<-(.
l
l
l (.
l
ll,'-
Minutes ·of 9th MeetinQ of the Sub~Committee· forhnplementation of Information Technology Reforms
Subject: 9th Meeting of the Sub-Committee for Implemenlation of InformationTechnology Reforms.
Date: 12.08.2002
Time: 11.00 a.m.
Venue: 3rd Floor, Conference Hall,EPFO Head Quarters,New Delhi.
Present: Shri Ajai Singh, Central Provident Fund CommissionerShri A. Venkatram, MemberShri Sharad Patil, Special Invitee :Shri J.P. Chaudhry, Special InviteeShri W.R. Vardarajan, Special InviteeDr. Gutshan Rai, MemberShri A. Viswanathan, ConvenorShri Gaurav Dave, Member .Shri S.K. Khanna, Special InviteeShri Anirudh Rai, Member
Shri A.S. Kasliwal, Member, Dr. N. Ramani, Member and Shri G. Sanjeeva Reddy,Special Invitee could not attend due to prior engagements.
The following officers of the Department were also present:
Shri Suresh Kumar, Director (IS-I)Shri C. Chakraborty, Dy. Director(IS)Shri Ravi Kant, APFC (IS)
Central Provident Fund Commissioner welcomed all members of the IT Sub-Committee and briefly outlined the agenda for consideration of the IT Sub-Committee. He stated that this meeting had been convened to consider issuesrelated to tho irnplomonlalion of tho nnmodlalo short torm goal of issuing SocialSecurity Number (SSN) for members at the pilot offices and also to consider theoverall cost implications of the entire Business Process Re-engineering (BPR)project. A review of the "Re-inventing EPF, India" Project status was also scheduledwith the presentation by Siemens Information Systems Ltd. (SISL). Thereafter, heinvited the Sub-Committee to take up agenda items for discussion. It was decidedto take up the agenda item 1 - presentation by SISL after other items.
• .1',.' I
••eec:rrc r
{'
(
(
cc(
(
(
(
(
( f(
(
(
(
(
(
(
l.
l
l
tL
l
Agenda No. 2-·· .Engaging Venders fer the Data. couedtiori ...exercise .forallotment of Social Security Nurribers(SSN) .; Inftlatlonoffresh bid process with relaxed pre-qualifying norms
Central Provident Fund Commissioner presented the agenda for consideration of theSub-Committee and explained that the present effort of identifying vendor for SSNData collection was essentially a one time exercise for collection of bulk datapertaining to existing members. Eventually the activity in respect of new membersjoining the fund would be carried out by the department. This would entail that thedepartment does not have to bear the cost of additional hardware required for thebulk data capturing activity. In course of time the capturing of data for membersjoining the fund on a regular course would be online and the department has only tobear the cost of hardware for this activity.
\
The present exercise of calling expressions of interest for the data entry work hadelicited 20 responses. However, none of the bidders could qualify the pre-qualifying requirements stipulated. He informed the members that the pre-qualifyingrequirements were framed with the intention of getting responses from wellestablished capable parties with impeccable antecedents. Central Provident FundCommissioner pointed out that the experience of the department with earlier datacapturing outsourcing activities for Pension Scheme Form 2 was extremely un-satisfactory. In these instances-the qualifyinq criteria were very loose with the resultthat small time operators had bid unrealistically low prices to get the contract andcould not execute them later.
Additional Central Commissioner(IS) explained to the Sub-Committee the proposedpre-qualifying criteria with relax norms for the fresh bid process.. He also explainedthe recommendations of the Technical Committee which was made in its 2nd meetingheld on 08.08.2002. The Technical Committee had recommended that the relaxedpre-qualifying criteria should be such that it would be possible to identify vendorswho had sufficient financial and technical strength to undertake the task and provideclean error free and accurate data with pre-determined tolerance levels. It had alsorecommended that options should be kept for double data entry as an alternative tothe use of ICR Technology so that an appropriate Techno-Commercial and costbenefit analysis could be made between the options. The Technical Committee alsofelt that a pre-bid conference should be held and the fresh expressions of interestshould be called with a fee of Rs.10,0001-. It had also approved the annulment ofthe present bid process and return of the key at Rs.SOOOI- to the respective bidders.The Technical Committee had empowered the Central Provident FundCommissioner to suitably modify the pre-qualifying criteria in consultation withFA&CAO and ACC(IS) and issue the fresh notice invi~ingexpressions of interest.
The Sub-Committee for implementation of Information Technology Reformsapproved the agenda along with the recommendations made by the TechnicalCommittee.
l
2
·.~:,.;:-.
• <y::
•eeocrccc('
Cc:c\cC'C(
(I I..
C(
<-(
(
(
<-l
l
L
l
l
l
l
'-Establishing the Technical Architecture for implementation.'of. Social Security Number (SSN) '- Pre-Qualification ofBidders In respect of Tender for Procurement of Hardware,Software, Network, Oracle Relational Database for HeadQuarters and Pilot Sites.
The Central Provident Fund Commissioner introduced the agenda to the Sub-Committee and explained that the exercise was meant to install the TechnicalArchitecture for implementation of SSN at the pilot centres and Head ·Quarters~ Theopen tender floated by the department had elicited nine responses out of which sixhad pre-qualified on the basis of criteria specified. The Technical Committee in its2nd meeting held on 08.08.2002 had considered. the matter and observed that out ofthe three bidders who did not qualify, MIs. eMS Computers Ltd. did not have theexperience in the supply and installation of a SAN solution whereas the other two didnot have the requisite turnover. The Technical Committee felt that MIs. CMSComputers Ltd. should be asked to clarify their experience with regard to supply andinstallation of SAN Solution and a decision in their regard be made on the basis ofthe information furnished.
Agenda No-.3- .
Shri Shared PaUl wish to know whether the bid process contemplated execution ofthe work through multiple vendors provided the prices are same. It was explainedthat the' job was essentially a system integration work involving diverse products,technologies and software and would be best aehieved by a Single vendor.
I
The Sub-Committee for implementation of IT Reforms approved the agenda alongwith the recommendations of the Technical Committee.
Agenda No. 4- Biometric Solution for Social Security Number (SSN) - Pre-Qualification of bidders in respect of Tender for Purchaseof Biometric Software, Fingerprint Readers and BiometricServer
The Central Provident Fund Commissioner presented the agenda for considerationof the Sub-Committee and explained that the exercise was meant to identify andprocure the Biometric Solution for implementation of SSN at the pilot centres andHead Quarters. The open tender floated by the department had elicited 11responses out of which only one had submitted entire details and documentaryevidence and qualified on the basis of criteria specified. Another three bidders hadsubmitted details of, 10 reference sites but had not supplemented these withdocumentary evidence. Clarifications had been called for from all the bidders tosupport their contentions with documentary evidence. The responses received wereplaced for consideration of the Technical Committee in its 2nd meeting held on08.08.2002. The Technical Committee noted that details with documentaryevidence. was available in the case of four bidders namely MIs. CMC Ltd., MIs.National Ship Design and Research Centre, MIs. Tele Post Pvt. Ltd. and Mis. S.S.T.Kernel. However, a few documents in respect of MIs. National Ship Design andResearch Centre were lacking and the Technical Committee had recommended that
J
• s•••e0ccc C';
ccC'('i
0CC',
C(,
(
( cC(
<-LLLcLL
l (
lLrl.
~
they may be considered subjoct to submission of the requisite copies of orders andcertificates. .
Tho Sub,CUllllllitll)!: h.1IilllplolllUlllullUl I ul II Relonns approved the agenda itemwith the above recommendations.
Agenda No. 5- Local Area Network (LAN) for Employees' Provident Fund,Head Quarters Office - proposal for laying of cables andpassive components
The Central Provident Fund Commissioner explained to the Sub-Committee that theproposal, was .basically meant to put in place the LAN cabling and passivecomponents for Head Quarters LAN in view of the on going interior furnishing workat Head Quarters. This item of work needs 'to be undertaken immediately as it wouldbe extremely difficult at a later stage to put in place the cabling in the modularfurniture. The matter had been considered by the Technical Committee in its 2nd
meeting held on 08.08.2002 and it had felt that it would be desirable to have a LANso that the existing nodes In Head Quarters can be supported and suggested thatapart from the cabling and passive components proposed in the present agenda, therequired number of un-managed switches along with the Mail & Proxy Server for theexisting nodes may also be installed to have the basic LAN functioning in Head.Quarters. The Technical Committee also observed that this basic active equipmentLe. the un-managed switches are inexpensive and can even be disposed at a laterdate when the overall architecture and requirements necessitate replacing theswitches with higher end equipments. The Central provident Fund Commissionerpointed out to the members of the Sub-Committee that this recommendation of theTechnical Committee would entail certain additional costs over and above thosementioned in the agenda for the un-managed switches and servers for the basicLAN, which however, would not be substantial.
The Sub-Committee for implementation of IT Reforms approved the agenda alongwith the recommendations of the Technical Committee.
Agenda No.6 Software requirements for "Re-inventinq EPF, India"Project
The Central Provident Fund Commissioner explained that as part of the SoftwareDevelopment Task for the overall project, the consultants have presentedrequirements for some building block software which are critical and central. to theoverall software n-tier architecture proposed. The consultants have stated that outof the above software requirements the web & application server as well as theworkflow software are immediately required for them to commence work on thesoftware development for the whole project. They had carried out an independentevaluation of available options in these categories of products and have identifiedand recommended SEA Web Logic Suite for the web and application server andStaffware for the workflow software.
Central Provident Fund Commissioner further elaborated that the "Re-inventinq EPF,India" Project had set certain goals with far reaching implications for the
\\ 4
e:...,•e••00cc ()
ccccC'CC'CCC'C' (
CcC
CC(
(
LLL ClLL
L
<,
effectIveness,' efficIency and competitive' edge 'of .th~ Orga'nlsat,'on'In' the .po~treforms economy. To achieve the objectives set for /tserf the Organisation needs toimplement the reforms initiative with a Technical Architecture that has the best inbreed technology products that allows flexibility and scalability and' convenience ofuse. The Organisation should build a system which ensures that most of theorganisation's time is spent in running the business i.e. on contribution collection,record keeping, benefit delivery and membership growth and not on themanagement of technology. I
The essence of the hour is to go online with the project in at least the pilot sites atthe earliest. As it is some valuable time has been lost due to unavoidable slippagesin the BPR stage of the project. The two items of software under consideration beingcritical to the software development work would. mean that any delay in itsprocurement would add the same amount of time in the eventual projectimplementation. It would therefore be necessary to consider and arrive at alternativeprocurement procedure to shorten the time period that is normally associated with anopen tender process. In the present instance it needs to be seen whether it wouldbe possible to have an alternate mechanism by which products are selected andvendors identified and prices negotiated with two clear objectives. The first, toselect the best of breed technology that most suits the approved business designand goals as well as the approved hardwarel network environment. The second, tomeet acceptable cost benefit criteria.
The matter was also considered in the 2nd meeting of the Technical Committee heldon 08.08.2002. The Technical Committee decided that it would be prudent to haveinformal meetings in relation to workflow software to 'fully understand the suitability ofthe product and the possible advantages that these might bring to the Organisationin terms of efficiency and work management. With regard to SEA Web Logic Suite,it was noted that in the proposed Web enabled technology, the requirement is valid.
The Sub-Committee for implementation of IT Reforms, after detailed deliberations,agreed with the decisions taken by the Technical Committee and also recommendedconstitution of an independent High Powered Committee that would evaluate andrecommend the suitability of the required building block tools like Web Server,Application Server and Workflow Software under consideration and also negotiatethe prices with the vendors. The proposed High Powered Committee would consistof members from the IT Sub-Committee, Technical Committee and may also haveindependent members from the Industry and Government with establishedcredentials and expertise in the field such as Shri Narayana Murthy, CMD, InfosysLtd., Shri. N. Vittal, CVC., etc.
SupplementaryAgenda No.1
Note on cost benefit analysis of implementation ofproposed Business Process Re-engineering under the"Re-inventing EPF,India" Project
The note on the cost benefit analysis for the implementation of the Re-engineeredprocess as presented was discussed. The consultants to the project have estimatedthe hardware and software infrastructure in the project to cost of RS.174.35 crores.This estimation is however, on list prices of items and taking a very conservative25% discount on the list prices the cost of the project would be Rs. 130.77 crores in
•• 1.'.r-..• "',j
••eeocccc(
cc'(
(
(
(
(
( (tC(
(
(
lC
L
L
l
ll
t,, '
real terms. The estimates, however, do not include the civil costs and the Wide AreaConnectivity costs which, in' any case, are normally subsumed 'in capital costs forcivil works and revenue expenditure for connectivity and office furniture ln regularongoing expenditures. The note presented prolected that the cost of the projectwould be realized within 3 years. The Committee while discussing the paybacks fromthe project implementation felt that the project potentially offered enormousimprovements in efficiency in most of the critical functional areas and the savings incost in various spheres of activity on account of the re-engineered processes viz.savings in interest due to the funds float with the bankers, savings due to the timelydetection of default and costs in securing compliance and the costs savings possiblein normal communications between offices, etc. should be elaborated in greaterdetail and the position presented for views of the Finance and Investment Committeeof the Soard before taking it to the Executive Committee, CST, EPF for approval.
\3 6
••••oec~
ccc(
crcc(
(
(
Cl(
(
(
(
ttl.
l
l
lL
L
,\., Item no. 2: Statement showing the action taken on ~he recommendatlons of
the Committee.
81.
No
1.
Should the matter still remain unresolved
Action Taken
(
Recommendations
Liberalisation of Investment Guidelines.
2. Outstanding interest and maturityproceeds.
3. Idle FundsIn accordance with the minutes of themeeting with the representatives of theCentral Board of Trustees, EPF and S81 inMumbai on 30.5.2001 a signed fortnightlyreport in respect of Idle Funds will befurnished in the agreed format by the S81and the same would be placed before theFinance & Investment Committee.
4 Exit option to Portfolio Manager
C8T, EPF in its meeting held on24.09.2001 modified' the investmentguidelines and the portfolio manager wasgranted switching. option to exit from anexisting investment, before maturity, withthe caveat that switching option may beexercised only when there is capital gaininvolved in the transaction.
Views of Government of India are to beascertained as to whether Central Board ofTrustees, Employees' Provident Fund hasthe jurisdiction to decide about granting theexit option.
5 Reverse merger of ICICI Ltd. with ICICIBank.C8T, EPF may approach the Govt. of Indiafor ascertaining .the safety of C8T, EPFinvestments and to make provisions in theinvestment pattern and guidelines regardingexit option from existing investmentsenabling C8T, EPF to deal with all suchcontin...aencieswhich may arise in future.
6 Investments of CBT, EPF in IFC!.The Central PF Commissioner may write toSecretary (Banking) Ministry of Financethrough Ministry of Labour detailing theoutstanding dues from IFCI and response ofIFCI thereto.
If the matter is not resolved, the possibilityof making a reference to Committee ofSecretaries, Government of India beexplored for resolving the issue.
The matter was referred to Government of India videletter no. Inv.I/Cel7ltral Board of Trustees, Employees'Provident Fund /1742 dated 23-01-2001. The mostrecent correspondence to Government of India isdated 7th'" Oct.2002. .Details of outstanding interest and maturity proceedsare placed in Annexure 'A'.
The requisite details of idle funds for the months ofAugust-Sept.2002 were sent by S81 on 1.10.02 andare being placed in Annexure 'B'. Idle funds aremainly on account of non-availability of Public SectorUndertakings scrips in adequate quantity resulting innegative deviation in Public Sector UndertakingsiPSFIcategory. Quantum of idle fund has shot up in themonth of September in the Pension Account. S81 hasrequested vide letter dated 1.10.2002 formodifications in the investment pattern. (Copyenclosed).
Matter was referred to Government of India forseeking clarification on the subject vide letter no.Inv.I/Action Taken F&I 20oolPt.112218 dated13.12.2001. The most recent correspondence toGovernment of India is dated 7ththOct.2oo2.
The matter was referred to Government of India videletter dated 23-10-2001. The most recentcorrespondence to Government of India is dated 09thOctober 2002.
Central Provident Fund Commissioner requestedSecretary, Ministry of Labour vide letter no. Invest.1I1(Action Taken)/F&1I02IPt.1II1624 dated 10.9.2002 fortaking up the matter with Secretary (8anking)regarding recovery of dues from IFC/. Response isawaited, however a reminder has been given on10.10.2002.Central Board of Trustees, Employees' ProvidentFund constituted under the Act 1952 is neither a Govt.deptt. nor a Public Sector Undertaking. It may berecalled that incase of MIs HMT the arbitrationthrough Committee of Secretaries did not find favour.Law Deptt. of State 8ank of India is of the view that
.1.
•••(It
er:c:cccc(
ccc(
(
(
(
( t:<-
(
t(
(
(
tl
ll
Ll.
l
steps may .be taken to explore thepossibility of filing. a petition regardingwinding up of IFel Ud. for recovery ofoutstanding dues.
instead of filing ~f winding off petition, it is advisable tofile summary suits forrecovery of outstanding dues.SBl's letter datef118.9.2002 on this aspect is enclosedfor ready reference.However~IFc/ has submitted a proposal regardingrepayment o~ Central Board of Trustees,Employees' Prt;>vldent Fund dues vide Its letterdated 16.09.02 ;..t 20.9.2002 (copies enclosed alongwith a brief givfm by IFCI reg. their future businesspian.). Commer,ts of the S81on the said proposaldated 16.9.2~ were received vide SBI letterdated 28.09.02,' copy of which is enclosed. Theproposal may b'econsidered.
7 Investment of Central Board of Trustees,Employees' Provident Fund in bondsissued by PSIDC.
The matter has been taken up with S81and PSIDC forrecovery of outstanding dues. PSIDC has submittedpayment liabiliti~ vide its letter-dated 23.8.2002.Further, S81 has confirmed to have received Rupeesone crores towards maturity during August 2002 videits letter dated 1$.9.2002. The matter has been furthertaken up for full recovery of overdue amount.
Recommendation of Central Board of Trustees,Employees' ProVident Fund to declare the rate ofinterest @ 9.5% for the year 2002-03 for creditinginterest in the' accounts of EPF members wasforwarded to th~ Govt. vide letter dated 16-4-2002.Most recent correspondence is dated 10.10.2002.Decision of the Government is awaited.
~.,------------------------------~-----------~'----------~----------~
8 Declaration of rate of interest to EPFsubscribers for the year 2002-03.
\5
r- r": r- r": ,,- r r- r r
1'/- <t ..'f' Fo~ r r r r - ~ ~ ~ ~ ~ ~ .~ ~ ~ ~ ~ ~) ~ 0 0 • • •
,... /
A~\NEX~
. .0' .
.~ -..rJ STATE BANK OF INDIA
OUTSTANDING ·INTEREST& MATURITY OF NON-SGL SECURITY AS ON 31/08/2002
~3. li~.ULT PARTICULARS OF EPr AlC ~~CE' VALUE OF A!.jOUNTOF INT. DUE DATE REMAR!< II
• <'oJ· :--10 . SECURITIES ECURITIES DUE/ACCRUEDJ INTBRESl' !
1 5/65 12.50% rrcr 2004 A/CNO.8 5,000,000."00 625,000.00 30/11/01 L~GAL NOTICE SERVED I,
2 5AI10 12.50% rrcr 2004 MAIN A/C 100,000,000.00 " 12,500,000.00 30/11/01 LEGAL NOTICE SERVEDi
3 5A/91 12.50% IrCI 2004 A/CNO.25 40,000,000.00" 5,000,000.00 fSO/11/Ol LEGAL NOTICE SERVED
4 7/82 12.50% IrC! 2004 A/C NO.1 500,000,000.00 " 62,500,000.00 ~0/11/01 LEGAL NOTICE SERVEDI
5 5A/11 12.15% IrCI 2004 MAIN A/C 100,000,000, .00" 12,150,000.00 ~0/11/01 LEGAL NOTICE SERVED
6 7/83 12.75% IFCI 2004 A/CNO.l1 500,000,000.00 •..63,750,000.00. 30/11/01 LEGAL NOTICE SERVED
0 7;../43 i~.20% Ircr 2005 A/CNO.ll 250,000,000.00. 35,500,000.00 ~0/1l/01 LEGAL NOTrCE SERV~D .II ~ 8/22 1••.20\ rfcr 2005 MAIN A/C 50,000,000.00 . 7,100,000.00 30/11/01 LEGAL NOTICE SERVED
9 8/88 14.20% rrcr 2005 A/CNO.25 25,000,000.00 3,550,000.00 ,30/11/01 LEGAL NOTICE SERVED
~j 'iA/ S 1 1••.25% rrCl 2005 A/CNO.ll 100,000,000.00 ' 14,250,000.00, 1'91/12101 LEGAL NOTrCE SERVED
.. 8/28 14.25% IrCI 2005 MAIN A/C 100,000,000.00 ~ 14,250,000.00 31/12/01 LEGAL NOTICE SERVED-- -_._-- -- ------ - --- --
:2 7/B!' B. 5-1)-\---IFCl' 2005 - AtCNO;l1 "SUO, oco.nco: 00 ~ 67,!mo,ooo.OO 25/01/2002 LEGAL NOTICE SERVED
:3 58/2 14.25% IrCI 2006 MAIN A/C 100,000,000.00 ~ 14,250,000.00, 31/01/2002 LEGAL NOTICE SERVED
- ~ 7;"/'S7 1~.25% IrCI 2006 A/CNO.n 100,000,000.00 •..14,250,000.0ei.31/01/2002 LEGAL NOTICE SERVED
~5 7A/60 H .25% IrCI 2006 A/CNO.l1 200.,000,000.00 28,500,000.00·-31/01/2002 LEGAL NOTICE SERVED
0~~ \~
('/ --L-~2L+5-
.~'j
r r r (" r r- r r-:r:~lE>;, . __ .
r: r- r-. r- --- r- r- {' r'\ -.,-." ~ ~ '""" """"" ~ ~ ~ ~ ). I:,,' r- r- ..:'1
,', • _,.41:" ••••
2o-sa VAULT l?ARTICOLARS OF EPF MC FACE VALUE OF AMOUNT OF INT. DUE DATE REMARKNO. NO. SECURITIES SECURITIES DUE/ACCRUED~6 711/74 14% IrCI 2004 AlCNO.l1 200,000,000.00 28,000,000.00 01/3/2002 LEGAL NOTICE SERVED Re.m~l)eA.« ~rJ on "I~lo'l-17 2/25 11.50% IFCI 2010 MAIN A/C 134,363,000.00 7,725,872.50 24/03/2002 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,
29/6, 1/7, 20/7, 3/08/200218 6/53 11.50% IrCI 2010 MAIN A/C 450,000.00 25,875.00 24/03/2002 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,
29/6, 1/7, 20/7, 3/08/200219 2/31 '13.50% Ire! 2003 MAIN A/C 175,440,000.00 11,842,200.00 24/03/2002 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,
29/6, 1/7, 20/7, 3/08/200220 8/7 14.50% IFCI 2005 MAIN A/C 200,000,000.00 29,000,000.00 25/03/2002 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,
29/6, 1/7, 20/7, 3/08/200221 8/9 14.75% IrCI 2003 MAIN Ale 100,000,000.00 14,750,000.00 25/03/2002 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,
29/6, 1/7, 20/7,_ 3/08/200222 8/64 14.75% IFeI 2003 A/CNO.ll 200,000,000.00 29,SOO,OOO.00 25/03/2002 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,
29/6, 1/7, 20/7, 3/08/200223 5A/19 15% IFCI 2003 MAIN A/C 50,000,000.00 7,500,000.00 25/03/2002 REMINDER (FAX)..SENT 16/2,26/4,8/6,17/6,
29/6, 1/7, 20/7, 3/08/2002 .24 8/65 1~.90\ IFCI 2003 A/CNO.ll 2S0,000,000.00 37,250,000.00 25/03/2002 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,
29/6, 1/7, 20/7, 3/08/200225 SB/19 14.10% IrCI 2006 MAIN A/C 150,000,000.00 21,150,000.00 31/03/2002 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,
29/6, 1/7, 20/7, 3/08/200226 5B/20 14.10% IrCI 2006 MAIN A/C 110,000,000.00 15,510,000.00 31/03/2002 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,
29/6, 1/7, 20/7, 3/08/2002I
;'7 5B/21 :~.10% rrel ze06 HAIN A./C 50,000,000.00 7,050,000.00 31/03/2002 R~MINDER iFAXi SENT 16/2,26/4,8/6,17/6,29/6, 1/7, 20/7, 3108/2002
28 5B/24 14.10% IFCI 2006 MAIN A/C 27,500,000.00 3,877,500.00 31/03/2002 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,- -- -- 2_9L6, 1/7, '1.QI7L-3/08J1,OQ2. - - - - - - -- - ----
29 7A/82 14 .10% IFCI 2006 A/CNO.l1 250,000,000.00 35,250,000.00 31/03/2002 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,29/6, 1/7, 20/7, 3/08/2002
30 7A/8'4 14.10% Irel 2006 A/CNO.l1 100,000,000,00 14,100,000.00 31/03/20'02 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,29/6, 1/7, 20/7, 3/08/2002
3~ 711/8S 14.10\ IFCI 2006 A/CNO.l1 27,SOO,000.00 3,B77,500.00 31/03/2002 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,29/6, 1/7, 20/7" 3/0B/2002
32 8A/B 14.10\ IFCI 2006 AlC NO.2" 8,500,000.00 1,19B,500.00 31/03/2002 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,29/6, 1/7, 20/7, 3/08/2002
33 8A/9 14.10% IFCI 2006 AlC NO.2 2,500,000.00 352,500.00 31/03/2002 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,29/6, 1/7, 20/7, 3/08/2002
.~ d'
"") o C?~.c-.-,-••I" '.r"
,c ,rrr r: rrr-·r,'-'r-r-(""\,-.r-r-.r-.t""'\I""'\~~~~",""I"'\~~'j10 •• _ ••
I~r: 3 -. :,..S·!'. VA'f:l PARTICULARS OF EPr A/C FACE VALUE or AMOUNT or INT. DUE DATE REMARKNO. NO. SECURITIES SECUR~TIES DUE/ACCRUED34 8/97 14 .10% IrCI 2006 Alc NO. 6,000,000.CO 846,000.00 ~1/03/2002 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,29/6,
1/7, 20/7, 3/0B/200235 7A/I81 I~.IO\ IrCI 2006 A/CNO.ll 250,000,000.00 / 35,250,000.00 31/03/2002 REMINDER (FAX) SENT 16/2,26/4,B/6,17/6,29/6,
1/7, 20/7, 3/0B/200236 AP/33 13.40% IFCI 2003 MAIN A/C 200,000.00/ 26,BOO.00 ~5/03/2002 REMINDER (FAX) SENT 16/2,26/4,B/6,17/6,29/6,
117. 2017, 3/0B/200237 5/2B 16% IFCI 2002 XII 97 MAIN A/C 5CO, 000, 000.00 V BO,OOO,OOO.OO. 15/2/2002 REMINDER (FAX) SENT 16/2,26/4,B/6,17/6,29/6,
1/7, 20/7, 3/0B/200238 AP/21 16% IFCI 2002 XII 97 MAIN A/C 1,200,000.00i; 192,000.00 fi5/2/2002 REMINDER (FAX) SENT 16/2,26/4,B/6,17/6,29/6,
1/7, 20/7, 3/08/200239 5A/B 13% IrCI 2004 MAIN A/C 200,000,000. 00 ~ 13,000,000.00 b.S/4/2002 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,29/6,
1/7, 20/7, 3/0B/200240 7/74 13% IrCI 2004 A/CNO.ll 500,000,000.00 ~ 32,500,000.00 15/4/2002 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,29/6,
1/7, 20/7, 3/08/200241 5A1BB 13% Ircr 2004 A/C NO 2' 30,000,000.00 v 1,950,000.00· 15/4/2002 REMINDER (FAX) SENT 16/2,26/4,B/6,17/6,29/6,
1/7, 20/7, 3/0B/200242 6138 11% IrCI 2002 MAIN A/C 30,000.00 1,650.00 '24/05/2002 REMINDER (FAX) SENT 16/2,26/4,B/6,17/6,29/6,
1/1, LU/I, :J/UO/LUUL .I
43 6/40 IH IrCI 2002 MAIN AlC 30,OOO.OC I-- 1,650.00 24/05/2002 REMINDER (FAX) SENT 16/2,26/4,B/6,11/6,29/6,.LII, 'VI I, :J/VO,LUVL
44 6/48 11% IrCI 2002 MAIN A/c 600,000.001--- 33,000.00 ..27/05/2002 REMINDER (FAX) SENT 16/2,20/4,B/6,11/6,29/6,J./ I, ~UII, ~/VOILVV~
45 6/37 11% IrCI 2002 MAIN A/C 13,000.00 Ir 715.00 .[27/05/2002 REMINDER (FAX) SENT 16/2,25/4,8/6,17/6,29/6,
~27/05/20021/7, 20/7, 3/08/2002 .
46 3/45 11% rrCI 2002 MAIN A/C 200,000.00 . 22,000.00 REMINDER (FAX) SENT 16/2,26/4,8/6,17/6,29/6,117, 20/7, 3/0B/2002
47 6/97 11.50\ IrCI 2009 MAIN AlC 500,000.00 ..,- 2B,750.00 "30/05/2002 REMINDER (FAX) SENT 16/2,26/4,9/6,17/6,29/6,1/7, 20/7, 3/08/2002
49 6C/2 16\ IFCI 2003 MAIN A/C 300,000.00 ' 24,000.00 ~1/05/2002 REMINDER (FAX) SENT 16/2,26/4,B/6,17/6L2!1l6,- - - -- i/7 ,io/7, 3i08/2002 . - -- --
- .. -
49 4A/3 13.25% IfCI 2009 A/C NO. 3,500,000.00' 463,750.00 "07/06/2002 FAX SENT ON 14/6, 23/6, 117, 1:>/7, 3/8/02
50 8A/22. 13.25% IrCI 2009 A/CNO.25 14,500,000.00" 1,921,250.00 "C7/06/2002 rAX SENT ON 14/6, 23/6, 1/7, 15/7, 3/8/0223. 24
~l 78113- 13 ..25\ IrCI 2009 AlCNO.11 595,000,000.00 " 78,837,500.00 -{)7/06/2002 FAX SENT ON 14/6, 23/6, 1/7, 15/7, 3/8/0216
52 58142- 13.25\ IrCI 2009 ~1AIN A/C 490,000,000.00 ~ '67/06/2002 rAX SENT ON 14/6, 23/6, 1/7, 15/7 , 3/8/0264,925,000.0045
- - ~------ - -
\C3.,
..-.~':~, '''.~~~\
10 .. :; ',~.~
'.1. 0-,;; j),'l"i" , __.•••c. *. ' ....•..•.../ ~
.,.,,114\)'"·
..
l~
r- r: r r r r r r ~ ~ ~ r ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ .~~ ~ ~ ~ ~ ~ ~ 0 ••• •----_ .•... ,.. ..r-
4 -I ..•...f •
SR VAtJLT PARTICULARS OF EPF A/C FACE VALUE or AMOUNT OF INT. DUE DATe REMARKNO. NO. SECURITIES SECURITIES DUE/ACCRUED
.53 58/41 12.75~ Ire! 2004 •...lAIN Ale 70, ~OO, 0:>0.00·- 8,925,00\).00 ~7/06/2002 fAX SENT ON 14/6,23/6,1/7,15/7,3/8/02
54 78/12 12.75% rrcr 2004 A/CNO.l1 70,000,000.00 V 8,925,000.00 07/06/2002 FAX SENT ON i4/6,23/6,1/7,15/7,3/8/02
55 68/59 11.50% IFC! 2008 51 SLF MAIN AlC 70,000.00 '" 4,025.00 -i3/06/2002 FAX SENT ON 14/6,23/6,1/7,1517,3/8/02
56 3/64 11.50% IFCI 2008 51 SLF MAIN AlC 100,000.00 V 5,750.00 r.t3/06/2002 FAX SENT ON 14/6,23/6,1/7,15/7,3/8/02
57 6/50 11% IFCI 2008 51 SLR MAIN AlC 1,350,000.00 ,/ 77,625.00 113/06/2002 FAX SENT ON 14/6,23/6,1/7,15/7,3/8/02
58 3/66 11.50% IrCI 2008 50 SLF MAIN A/C 75,000.00 :... 4,312.50 14/06/2002 FAX SENT ON 14/6,23/6,1/7,15/7,3/8/02
59 3/66 11.50% IrCI 2008 50 SLF MAIN A/C 200,000.00 •.. 11,500.00 '14/06/2002 FAX SENT ON 14/6,23/6,1/7,15/7,3/8/02
60 6151 11.50% IrCI 2009 (55 SI MAIN A/C 500,000.oo-v 28,750.00 ~6/06/2002 FAX seNT ON 14/6,23/6,1/7, ).517,3/8/02.61 3/86 11.50% IrCI 2009 (55 S1 MAIN AIC 300,000.001- 17,250.00 "26/06/2002 FAX SENT ON 1/7,15/7,20/7,3/08/02
62 6C/8€ l1.50~ Ire! 2009 (55 S1 :-'.AINA/C 100,000.00 .. 5,750.00 .26/06/2002 FAX SENT ON 1/7,1517,20/7, .,iC6/02
63 6/52 11.50% IrCI 2009 (55 SI MAIN A/C 525,000.00 30,187.50 [26/06/2002 FAX SENT ON 1/7,15/7,20/7,3/08/02
64 8/:4 H% :rCI 2005 MAIN AIC 250,000,0:>0.00 ~ 35,000,000.00 30/06/2002 FAX SENT ON 1/7,15/7,20/7, )/08/02
65 B/72 14'1 IFCI 2005 AlCNO.ll 250,000,000.00 35,000,000.00 1'0/06/2002 FAX SENT ON 1/7,15/7,20/7,3/08/02
~~ ~/~9- :tct--eG - I FeI--2fH 2 -------- lmtN-Atc - - -- -g5~UUO-. 011 --- -- 5-,1.00:0'0-- 13T0772 002 REMINDER oN-i577~--iAX -ON-3/S/02 ------ -- --- -
.,61 6/29 12% CG IrCI 2012 MAIN A/C 4,000.00. - :l40.00 1'3/07/2002
jREMINDER ON 15/7, FAX ON 3.18/02
68 AG/29 12\ CG IrCI 2012 MAIN AIC 15,000.00 . 900.00 i3/07/2002 REMINDER ON 15/7, FAX ON. 3/8/02
69 5A/37 H .25% IrCI 2005 MAIN A/C 90,OOO,OOO.0Q. ....12,825,000.00· ~0/O7/2002 FAX ON 3/8/02
\9"
" ~ ~'.\ ..•• ".
~ ~ ~ ~ r r ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 0 0 • • • •I)
,.- r
r- - .~o
5
S~ VAULT PARTICULARS OF EPF A/C FACE VALUE-OF AMOUNT Of INT. O(;e:DAre: ::\E~IARK!-lO.NO. SECURITIES SECURITIES DUE/ACCRUED
70 5A/38 14.25% IrCI 2005 MAIN A/e 50,000,000.00 71,250,000.00 ,.20/07/2002 FAX ON 3/8/02
71 8/6 14.25% IFeI 2005 MAIN A/e 150,OOO,000.~0 21,375,000.00 -l0/07/2002 FAX ON 3/8/02
72 5A/99 14.2S% IreI 200S A/C 25 70,OOO,000.()0 " 9,975,000.00 '1.0/07/2002 FAX ON 3/8/02
73 7A113 14 .2S% IreI 2005 A/CNO.ll 10-0,000,000. CO 14,250, 000. 00 "to/07/2002 FAX ON 3/8/02
74 7A/14 14.2S% IFeI 2005 A/CNO.ll 50,000,000.00 7,125,000.00 "20/07/2002 FAX ON 3/8/02
75 8/"1S 14.2S% IFCI 2005 A/CNO.l1 250,000,000.00 35,625,000.00. -20/07/2002 FAX ON 3/8/02
76 6/27 13% IFCI 2008 t-l.AINAle 31,000.00 2,015.00 ~8/07/2002 FAX ON 3/8/02
77 SA/39 14.4S% IrC! 2005 MAIN A/C 2S0,OOOiOOO.00~ 36,125,000.00 '31/07/2002 FAX ON 3/8/02
'8 5A/41 14.4S\ IrCI 200S MAIN A/C 250,000,000.00 36,125,000.00 1"31/07/2002 FAX ON 3/8/02
79 7;,;lS 1~.45\ Ircr 2005 A/CNO. II ~ 1/07/2002I
2S0,OOO,OOO.00 36,12S,000.00 FAX ON 3/8/02
80 7AIl7 14.4S% IFCI 200S A/CNO.l1 250,000,000.00" 36,125,000.00 31/07/2002 FAX ON 3/8/02
81 1/74 11\ IFCI 2003 49 SLR MAIN Ale 70,200,000.001-- 3,861,000.00 fi7/08/2002 ~ ~ Illvc;(1f'-
----- -- - --- --- ------ --- - -- --- -- -.----- - ----- --- - - - ----------- -- - -------
-- ------ e----- -- - ----- ----- ----82 1/74 11% IFeI 2003 49 SLR MAIN Ale 100,000.00 I-- 5,500.00 f'!7/08/2002 -~\ - ,
83 6/96 11.50\ IFeI 20:1 S9 SLF MAIl'<Ale 500, 000.00 _ 28,7S0.00 fi9/0S/2002 _II -I
- - -- - ---- -- ---- ----
~o
.'
"----.r_!__('....r- r: ...t":....~C)
r. (""I f""'I ,-.. f"""\ r-. I"',
~I~
-"'-
I"', ~ "" ~ ~,..,
~ ,...,("') ~ ~ O()" •••If,.
~o \ 1..-,.\.
SR VAULT PARTICULARS OF EPF Alc FACE VALUE OF AMOUNT OF INT. DUE DATE REMARKNO. NO. SECURITIES SECURITlli:S DUE/ACCRUED
84 78/96 12.50% RICHARD & CRUD A/CNO.l1 40,000,000.00 2,500,000.00 31/03/2002 REMINDER 1/04, FAX 2/5, 15/5, 20/6,1/7, 20/7, 3/B/02, PHONED ON 20/7, 11/9
85 6/30 11.50% UPSEB 2010 II 34,000.00 1,955.00 26/06/2002 REMINDER ON 1/7, TELEX ON 11/7,20/7,3/8
;: :5 SG/15 13% VIDC 2007 MAIN A/C 20,000,000.00 2,600,000.00 15/08/2002 RECEIVED ON 13/09/2002
R7 lG/12 13% VIDC 2007 A/CNO.l1 80,000,000.00 10,400,000.00 15/08/2002 RECEIVED ON 13/09/2002r·
~~FOR STATE BANK OF INDIA
~HIEF M>IftY(/ r/ :e;;1.~ro.....•
?-\
--,
,-- r __r,.
(" (",.J
r: r- ,.... r ,..., ~n ,~;,},::)::
MA'rtJJU'l'Y
("\ ,..., ('. ("")n(j(jt")(",)~""f1(jOOOOO
~ ~
REMARK
.... "..i:'O
o ••
S~ IVAULT IPARTICULARS OFNO.INO. SECURITIES
EPF A/C IFACE VALUE OFSECURITIES
OUTSTANDINGAMOUNT
DUE DATE
1 12/81 1.13.00% PSIDC
~ 17BI1:)0112.25% PSI;)C
3 15C11 5~ 12 . 15~ PI':DC 2002
4 lien 7;:1:;:.:5~ PK::X: 2002
MAIN AIC
A/CNO.ll
MAIN AlC
A/CNO.ll
250,000,000.00
50,000,000.00
25,000,000.00
15,000,000.00
15,000,00o.0013010S/2002IRECEIVED RS. 50 LAKHS PART PAYMENT ON 16/8/2002REMAINING ,AMOUNT. IS EXPECTED SHORTLYMATTER IS BEING FOLLOWED UP
lO,OCO,OC:).0013010S/2002IRECEIVED RS. 50 LAKHS PART P;'.YMENTON 19/8/2002REMAINING AMOUNT IS EXPECTED SMORTLYMATTER ,IS BEING FOLLOWED UP
3/11/01 I~ REINVESTED IN 11.40% PSIDC. ALLOTMENT~ETTER RECEIVED ON 5/8/02. THIS ENTRY
WILL BE REVERSED AFTER .RECEIVING D.T.FROM CORPORATE CENTRE
30/03/2002IREQUESTED FOR INVESTMENT IN NEWSECURITY.REMINDED OVER PHONE ON31/5, 516, 1/7, 20/7/2002, FAX SENT ON 3/8CONTACTED SHRI NARAYNAN ED ON 20/7
22--
••\\
r r: r r { ,.... r r ('",-,r ('\I"" (""\ ("'" r" rj ~ !""'I !"'"'\ .""" ~ "'" t} ~nnt"oc) •••••.. • fo::...••. r: ~<)
HA'l'OJU1Y\
SR VAULT PARTICULARS OF EPF AIC FACE VALUE OF OUTSTANDING DUE DATE REMARKNO. NO. SECURITIES, SECURITIES INTEREST
1 2/86 16% HMT BONDS 1999 MAIN AIC 250,000,000.00 20,000,000.00 1/7/99 INTEREST OUTSTANDING FROM JAN 96RS.. 16,00,00,000/- OUT OF WHICH RS. ,2,25,00,000/- RECD & TOTAL OUTSTANDINGAND TOTAL OUTSTANDING INTERF':;TIS RS. 13,75,00,000/-
----- -
23
s;
~ ~ ~ ~ ~ ~ ~ ~ ~ 1 ~ 0 0 • • • •I). t5L--
[' r "....r r r r r ".... ~ ~ ~ ".... - ".....~ ~
, . - ~
('J 2
MATURITY
~~ W,vL'J' ?j,i{'j'I(;ULi\i{S OF Err Ale FACE VALUE or DUE DATE REMARKt-IO. NO. SECURITIES seCURITIES
1 5/28 16% Ircr 2002 XII 97 MAIN Ale 500,000,000,00 15/2/2002 LEGAL NOTICE SERVED
2 AP/21 16\ Ircr 2002 XII 9~ MAIN A/e 1,200,000.00 15/212002 REMINDER (FAX) SENT 8/6,14/6,29/6,15/7, 3/8/02
3 6/48 11% Ircr 2002 47 SLR MAIN A/C 600,000.00 27/5/2002 REMINDER (FAX) SENT 8/6,14/6,29/6,15/7, 3/8/02
4 6/37 11% Ircr 2002 47 SLR MAIN 'A/C 13,000.00 27/5/2002 REMINDER (FAX) SENT 8/6,14/6,29/6,15/7, 3/8/02
5 3/45 11% IrCI 2002 47 SLR MAIN Ale 200,000.00 27/5/2002 REMINDER (FAX) SENT 8/6,14/6,29/6,15/7, 3/8/02- - - ._--- -~~,----..- -----
!
FO~ 0" INDI.
CHIEF MANAGZR E?j'
~"-\
•••eeo('
('"
('
{;
c~(
(
(
(
(
(
(
(
(
(
(
(
(.(
(
ll
l
t
<-
lt.
62/81/2661 69:39 PAGE 612818746 SB! PMS
~ '8~ f'If'Wf. ~ ~. 1r,T ~ Y. 12.
/ ~-.oo02'. iTr••• vty Oepa~."'. Corporat. C.,..'•.PoSI Box No. 12. IMumblHOO 021.~u : 2045H8I 2Q26rn 12Hf220mvr.14tgtlItII : ....rEX
cq I(11=4 ~ cfq;-
State Bank of India
THE REGIONAL PROVIDENT FUND COMMISSIONEf- ( INVST )EMPLOYEES PROVIDENT FUND ORGANISATION IBHAVISHYA NIDHI BHAVAN, 14, BHIKAJI CAMA~LACE,Niili'" DELID - 110066
fl:';rt;I; I Oal. :<no ~ I No.
PMS 1.10.02
IDLE FUNDS STATEMENTS- FOItTNI <""11-1 1 .FOR THE MONTHS OF AUGUST AND SEPTEMBEr 2002
I
I
We forward herewith the abovementioned statements for your kindinformation . :
The delay in submission of the statements is regretted.
Yours faithfu~
••eecccrc(
(
(
(
(
(
(
(
(
(
( (
(
(
(
(
(
l
l
l
l
t
62/61/2661 69:39 2818746 SBI PMS PAGE 62f;"FO- PENSION FUND _ t(>c...e .p.u "'!l.S STirie; "1€N 1 - III/ot 10 Ist.JIIOl. ..
'-\)DATE OIB INVESTMENTS MADE C/B REASONS FOR ON-INV
SECURITY AMT. VAL.DATE
01·Aug-GZ 53.89 8.05% NTPC BONDS ~.OO 01-Aug SO.II11NU$ NOT VET ~EAATIONALISro02-Aug-02 138.5 138.5 OFAI s OUTSID NOS NOT AUOWI!O03-Aug·02 148.57 10.18% OS26 32.21 O:l-Aug I
10.17%0$20 39.30 03-Aug I
I10.18% GS26 32.23 05-Aug
I103.7-4 -44.8JO~AuG-02 81.64 10.18% GS26 32.23 05-Aug
I10.18% GS28 25.74 05-Aug
I10.18% GS26 23.17 O>Aug I
81.14 0.5 L''''' ~,It- L..+rJ cC06-Aug-02 2.147.83% SOL MAH12 2.03 06-Aug 0.11
(" 07-Aug-G2 0.45 0.4501l-Aug-02 43.94 10.18% GS26 43.53 08-Aug 0.-4109-Aug·02 4.85 4.8510-Aug.02 12.84 12.8412-Aug-02 14.11 10.18% OS26 12.83 12-Aug 1.2813-Aug-02 3.17 12.25% MAH SOL 200$ 2.55 13-Aug 0.6214-Aug·02 3.12 12'YoRAJSOL 2010 3.11 14-Aug 0.01
(
l\.
• . 82/81/2881 69:39 2818746 SB! PMS PAGE 63
• ",V•0 EPF PENSION Ale
IDLE FUNDS STATEMENT FOR THE PERIO, 16/8102 TO 31.8.02
0 IDATE OPEPoIING INVESTMENTS MADE AMT( CR) vr- OATECLOS. BA!BAlANCe ( R'.in cror8a )
C 16-Aug 1.54 1.5417·Aug 1.74 10.18% GS 2026 1.66 17-Aug 0.08c 19-Aug 6.68 10.18% GS 2026 5.9 19-Aug10.18% GS2026 0.44 19-Aug(" 6.34 0.34
(1 20-Aug 4.41 10.18% GS2026 3.86 20-Aug 0.55r 21-Aug 62.28 8.63%PGC06 5.18 22-Aug8.63 % PGC 07 5.19 22-Aug
C 8.4% JRFC07 5.26 22-Aug15.63 46.6522-Aug 65.45 8.63%PGC06 5.18 ,22-Aug('
8.63%PGC07 5.19 i22-Aug6.4"0 JRFC07 5.26 i22-Aug( 10.18% GS 2026 45.08
,
&I
60.71 I4.74Ic 23-Aug 24.85 10.18% GS 2026 24.44 i23-Aug 0.4124-Aug 15.85 I 15.85I26-Aug 23.77 ,
i 23.77C 27-Aug 41.7 I
41.7I
r 28·Aug 46.6 10.18% GS2026 25.92 ~8-Aug10.18% GS 2026 19.43 ~8-Aug
45.35 I 1.25I( 29-Aug 14.74 11.85% AP SOL 2009 1.27 ~9-Aug12.25% GUJ SOL 2009 1.27 29-Aug
( 10.91 *9-Aug13.45 I
C 30·Aug 37.26 10.25%GS 2021 6.38 lO-Au910.25% GS 2021 12.77 ,O-Aug
( 9.40% MA~~SOL 2011 5.54 ~0'AU98.35% GS ~022 10.92 O-Aug
35.61 ! 1.65( c 31·Aug 22.57 10.25% SOL KAR 2010 11.97 ~1-Aug 10.6
(~~N
~7WI'I. - ~~- Nr-v n» Svr':',.,.
t(
(
<-(
ll
L
L\,. ~T
l_
l
l
~-
62/61/2661 69:39 PAGE 64•••eo("i
c("
cccccc('
(
(
(
(
(
(
(
(
(
l(
<-L
ll
l
L
~
22818746 SBI PMS
I
I
I
IDLE FUNDS STATEM~~~~:~~~~~RJOD 1.9.02 TO 15.9.02 !
OPENING INVESTMENTS MADE AMT( CR) V"," DATE CLOS. BAIBAlANCE ( Rs.in c:rorea )
02-Sep 32.98 10.52% SOL MAH 201010.18% GS 202610.18% GS 2026
DATE
03-Sep04-SepOS-Sep
41.7395.61102.8(
OS-Sep 48.5907-8ep 39.4509-Sep 31.2311·Sep 64.24
12·Sep 97.09
13-Sep14-Sep
44.6557.53
c:
L
l
03·SapD4-SepOS-SapOS-Sep05-Sep'IOS-Sepi°S-Sap105-SeplOS-Sap105-Seplos-sep,,
I
ps.sepP7-Sep~1·Sep~1-Sep~2-SeP
b-sep12-Sep12·Sep,
4.25 12-Sep52.49
II
I
II
NIf'tV ~~.:.~11y 1- PSV
~~.~ ~.lr.~~. ~Nr~ oU.";~r: '",'PSV/prfl ~1'
'~
,"'" $.,\ I' ~- '
~ ~""';""c"
I-~ ••..••c..•.I
I,
!II
7.6% NHAI BONDS7.83% SOL MAH 20127.8%SOL TN 20127.8% SOL KAR 20127.8% SOL MAH 20127.8% ,SOLAP 20127.8% SOL MAH 20129.45% SDL AP 20119.45% SOL GUJ 20117.83% SOL MAH 20127.80% SOL TN 2012
11.976.486.48
24.9350
10.223.012.673.235.045.0411.511.57.336.08
9.38%SOl TN 201110.25% GS 20217.65% IRFC 20077.65% IRFC 20078.05% IOFC 2007
55.411.0512.7610.1210.1210.3520.4710.3518.7319.16
02·Sep02-Sep02-Sep
8.05o
85.39
47.437.5426.6921.11
43.77
44.644.6557.53
•••eGcr:CCCcCCCC
(
(
(
(
(
(
(
<-(
(
(
<-L
l
l
a2/a1/2aa1 a9:39 2818746 SBr PMS PAGE as
EPF PENSION AleIDLE FUNDS STATEMENT FOR THE PERIOD 1619/02 TO 30.9.02
DATI'! OPENING INVESTMENTS MADE AMT( CR) *'- DATe CLOS. SA!BALANCE (R •• in cror•• ) ,
16-Sep 59.85 10.18% GS 2026 12.46 'I 16-Sep7.80% SOL KAR 2012 10.1 : 16-Sep
22.56 I 37.2917-Sep 66.09 8.05% NTPC 2006 5.08 l8-Sep
8.05% IRFC 2007 10.2 1a-Sep15.28 50.81
r~ 18-Sep 71.75 8.05% NTPC 2006 5.08 18·Sep8.05% IRFC 2007 10.2 18-Sep
15.28 I 56.4719-5ap 83.84 ,
83.8420-Sep 91.09 91.0921-Sep 101.99 8.30% SOL J&K 2012 1.05 :21-Sep
11.85% SOL AP 2009 12.3 :21-Sep13.35 88.64
23-Sep 87.07 10.25% GS 2021 12.79 :23-Sep,
10.25% GS 2021 12.79 ',23-Sap7.60% NHAI BONOS 50 24-Sep
75.58 11.4924-Sep 108.33 7.60% NHAI BONDS 50 :24-Sep
14% KERALA SOL 2005 3.64 ~4-Sep14% SOL PUNJAB 2005 4.85 '24-Sep
58.49 49.842S·Sep 51.96 8% SOL RAJ 2012 5.1 25-Sep 46.86~~~~·26-Sep 85.29 85.29 ".••• ~.27-Sep 85.29 7.80", SOL KAR 2012 6.63 ~7-Sep
7.80% SOL TN 2012 5.14 ~7·Sap11.77
~8-Sap73.52
28-Sep 107.42 7.80% SOL AP 2012 10.147.80% SOL AP 2012 19;19 ~8-Sep
29.33 78.09REASONS FOR NON INVESTMENT - Very few PSU scrips in the market'. Only IRFC, PFC and
( HUDCO. We have no avaiaole limits.Towards the end of the month. very little trading in PSU scrips. and very short supply .
•••·8eCCC
CCCCCC(
(
(
(
(
( t.(
(
<-
(
cc<.l
l
l,.
~2lali2ddl e~:39
DATE 0/8
01-Aug-QZ02-Aug-0203-Aug.o205-Aug-02
05-Au9-0207-Aug-Q208-Aug-0209-Aug-QZ1Q.Aug-0212-Aug'()2
. 13-Aug-0214-Aug'()2
2818746 S8r PMSII>'-C -AI '" ,)J .IT /t'7&M. Errl r.PF MAIN ACCOUNT
INVESTMENTS MADESECURITY AMT.
Cl8VA1..DATE
REASONS FOR NON-INVI
20.444.08
24.52
i15.74 NOS NOT VeT OPEAAnONAUsEO23.GB DEAlS NOT AifOWED OUTSIDE NOS24.73 001
15.7423.6624.7325.06 7.60% SOL TN
7.80% SOL MAH
82/81/2881 89:39
0.921.3oooooo
PAGE 66
0.21 LOW BAlANCE 'I
0.92 LOW BAlANCE1.30 "0.00 S:uNbJ c...M.LC) uP ~'I 6 P+.>.0.00 I
0.000.000.000.00
2818746 SRT PM~ _.
2 ellPAGE 67•••••o
cc:ccccccc(
(,
(
(
( t.(
(
l(
(
CLl
EPF MAIN Ale ! •
IDLE FUNDS STATEMENT FOR THE PERIOD ~6/8/02 TO'J1.B.02
DATE OPENING INVESTMENTS MADE AMT( CR) VAL DATEClOs. BA'-.BALANCE ( Rs.in crores )
I, t~t.~~I
16-AuQ 0 'o1-1-Aug 0 019-Aug 8.54 10.18%GS2026 8.53 ~9-AUg 0.0120-Aug 0.01 , 0.0121"Aug 49.9 7.60% NHAI BONDS 25 22-Aug 24.9
r. 22-Aug 27.55 8.4% IRFC 07 BONDS 5.25 ~3-Aug 22.323-Aug 27.55 8.4% IRFC 07 BONOS 5.25 23-Aug
10.18% GS 2026 14.15 ~3-Aug 8.1524-Aug 8.6 12.25% MAli SOL 2009 7.66 ~4-Aug 0.9426-Aug 0.93 0.9327-Aug 6.46 6.4628-Aug 6,48 12.25% GUJ SOl2009 6.38 2,8-Aug 0.129-Aug 0.31 0.3130-Aug 5.46 5,4631-Aug 6.66 8.35% GS 2022 6.54 311-Aug 0.12
,
, !
31
• eo•••••occccc(
cccc(
c(
( i.
t ~
62/61/2661 69:39 2818746 SBI PMS PAGE 68
EPFMAIN AlCIDLE FUNDS STATEMENT FOR THE PERIOD O~.09.02TO H.9.ot
DATE OPENING INVESTMENTS MADE AMT( CR) VALJ DATE CLOS. BAL.BAlANCE C RsJn erores} . (A.l.~~
02-Sep 2.67 12% AP SOL 2010 2.61 02-Sep 0.2603-Sep 26.88 10.18% GS 2026 12.97 03-Sep
10.25% GS 2021 12.75 OS-Sep28.33 0
04-Sep 7.43 7.43I. 05-Sep 7.77 7.77
06-Sep 1.46 1.4607-Sep 1.~6 1.4609-Sep 1.46 1.4611-Sep 25.65 25.6512-Sep 33.55 8.35% GS 2022 16.4 12-Sep 17.1513-Sep 17.14 1035% SOL KAR 2011 12.01 l3-Sep 5.1314-Sep 7.95 7.95
(
l(
<-<-<-
l
l
l
l
•••eeoc:cccc('
cc(
ccc
.•...uJ.v, •.•O ::,tHQ PAGE 16...._ ....._. _ •... _-
Ibl..£ -MINDs J'[ 'r Te "1 e-rJ T ')bf;Pfo Itlc. No' 4~"'-- -y
DATE 018 INVESTMENTS MADE elB REASONS FOR NON·/NVSECURITY AMT. VAl.DATE
01-Aug-02 1.04 1.04 LOW BAlANce
]?02-Aug·02 4.00 .c.00 NOS NOT OPERATIONAlISED03-Aug-02 4.57 4.57 OIW-S OUTSIDE NOS NOT AlLOWI!O05-Aug-02 4.88 7.8%SDL MAH12 1.02 05-Aug..0210.18%G526 2.57 05-Aug·02
3.59 1.29()6.Aug-02 1.36 1.3607-Aug-02 . 1.36 1.36 /?, Itt..Ir.,.J c13 .OB-Aug-02 2.92 10.18%OS26 2.90 08-Aug-02 0.02/.,.a...,
09-Aug-02 0.07 0.07I: 10-~-O2 0..c3 0.4312-Aug..02 0.69 0.6913-Aug·02 0.89 0.8914-Aug.02 0.96 12% RJU SOL 2010 0.78 14-Aug-02 0.18
.- ------- _._ -.-(
( (<-(
<-(
C(.
C
l
\
••••eeoc'ccccCCi
CCC(
(
( ((
(
(
(
CLll
02/01/2001 09:39 2818746 SBI PMS PAGE 69~.f
DATE
EPF MAlNNCIDLE FUNDS STATEMENT FOR THE PERIOD 1619/02 TO 30.9.02
OPENING INVESTMENTS MADE AMT( CR) vAl.. DATE CLOS. BAL •BALANCE ( Rs-in crores ) , c..I.,. ~ w~
16-Sep 7.93 7.9317-Sep 22.04 10.18%GS 2026 12.47 17-Sep
10.25%GS 2021 8.93 17-Sep21.4
18-Sep 0.64
I: i9-Sep 2.6320-Sep 55.0921-Sep 56.7523.Sep 25.5124-Sep 29.7625-Sep 29.7626-Sep 42.1427-Sep 42.1428-Sep 53.64
10.25 GS 2021 19.18 23-Sep
0.640.642.63
55.0956.756.33
29.7629.7642.1442.1422.3810.18% GS2026 31.26 28-Sep
~ry'~ -to ~_~r~.
\
•••eeo
. ('1;
CCC
C
CCCC(
CCC
C(
(
(
cc(
C.
ll
82/81/2861 69:39 2818746 SBI PMS PAGE 11
EPF AlC NO.25IDLE FUNDS STATEMENT FOR THE PERIOD 16/8/02 TO 31.8.02
DATE OPENING INV~STMENTS MADE AMT( CR) VAL DATE ~LOS. BA!BAlANCE ( Rs.in crores )
16-Aug 0.240.2417-Aug 0.32 10.18% GS 2026 0.25 F-Aug 0.0719-Aug 0.1 10.18% GS 2026 0.1 19-Aug 020-Aug 0.29 0.29"21-Aug 2.5 2.522-Aug 2.93 2.93lj 23-Aug 3.45 3.4524-Aug 4.334.3326-Aug 4.42 4.4227-Aug 4.744.7428-Aug 4.93 9.45% GUJ SDL 2011 2.79 28-Aug 2.1429-Aug 2.51 2.5130-Aug 3.37 3.3731-Aug 4.36 8.35% GS 2022 4.36 31-Aug 0
~<N.~ ~- ~r~- ~ f!,~lt.
(
35..
••••oecr:ccc(
cc(
(
( ~
(
(
( f(
(
(
(
(
lll
":)D..L 4"1-'LCJ.1CJ'''O
EPF Ale NO.2SIDLE FUNDS STATEMENT FOR THE PERIOD 01.09.02 TO 15.~.0~
DATE OPENING INVESTMENTSMADE AMT{ CR) VAl DAtE CLOS. BA!BALANCE ( Rs.ln croros )
02-Sep 0.9 12% AP SOL 2010 0.82 02-Sep 0.0603-Sep 2.26 2.2604-Sep 3.61 3.6105-Sep 3.76 7.80%SDLAP 2012 3.53 0.2306-Ssp 0.36 0.3607-Sep 0.57 0.5709-Sap 0.85 0.8511-Sep 1.86 1.8612-Sep 2.86 2.8613-Sep 2.89 2.8914-Sep 3.62 3.62
02/01/2001 09:39
••• ,
•0e00C t
Cc($
c.cccC(:
(I
(; fo<-(
cC(
C'lrI.-
•••v ••.vt~U . PAGE 13
EPF Ale N0.25ID~·JilJ~M~tU mR nl~PSRlQD.16cgr02 "[Q,3.Cb9..02
~ '. OPEiUHC IN¥EGTMENTGMADE-AMT{-GR)-YAl-eATECLOS. BAIBAl:AJIIC:~lW=e'bf&SFf
-,o=Sep ~:12tl-SeJT 4:OL 10.25%GS 202118-Sep 0.319-5ep 0.4320-Sep 0.6921-Sep 1.3923-Sep 1.6124-Sep 2.782S·Sep 2.9426-Sep 3.4427-Sep 3.4428-Sep 4.89
3.n3.82 0.2
0.30.430.691.391.612.782.943.443.444.89
••••.,oc'cccccc'c(
(
(
(
(
(
<-
c
I
I .
L~.~
Dear Sir,
cql{illll m~State Bank of India
~ fci'IT'T. ~ R. 1r>!' "tft ~. 12.'IjiIl-400 021.Treasury Department. Corporate Centre.Post Box No. 12. Mumb.i.,ifOO021.~IIX : 2045-468 , 2028n9 , 2868220
wroreiegram : APEX
The Financial Advisor & Chief Accounts Officer,Emp!oyet'.~ro"'ident Fund Organisation.14. BlUkaj)~a:lia Placc,New DelhI 11{)066.
'No ' ~ IOaI8:'7RJ rms] 12q f)
1 October. 02
PORTFOUO M.--\~~:)'GEMENT SERVICESINVESTMENT NPS{ ~B()\rnS
As you are aware. we are guided hy the Investment Pattern stipulated by the Ministry ofFinance, Govt, of India in 199&, in the investment offunds of Central Board of Trustees,Employees Provident fund. in terms of the Pattern, 40°0 of accretions have to be investedin Bonds issued by Public Financial Institutions and PSUs, while interest.received in thiscategory has to be reinvested back in the same category.
Other stipulations zovernina investments in PSU Bonds relate to Ratings, where aminimum of A•.\ isrequired, and exposure ceilings.which have been retained at 25% ofthe Net W0I1h of the issuer. Besides, the track record of the issuer in servicing pastinvestments, and its performance and profitability ot operations also has to be kept inmind while considering investments in this category.
2. We have brought to your notice Oil a number of occasions in the recent past about thedifficulties faced by us ill finding PSU Bonds in adequate quantity to meet the stipulationof the Investment Pattern. The difficulties faced hy us are as under:
( 1.
(
( ~~~.
l~~l u.
L ~)~~
•...
Exposure ceilings set for investment in PSU securities have been reached for anumber of borrowers e.g, ff'CDCO,IRFC,PFC, EXL'\l Bank and REC. Inseveral other rases. balance investment that can be carried out before theceiling is reached is very small. Thus, barring investment in bonds issued bysome PSUs, such as banks and some manufacturing concerns which do notfrequent the market often, avenues for investment in PSU category arc verylimited.
TIle number of new issues made by eligible issuers is at a low level. As perdata obtained by us from Debt on Net during the past 12 months, issuances byeligible PSUs was Rs. 1140 cr. Some of the major issuers are shown below:
IRFC
i IssueriIbm-----
i 1075 i! 2700----------l
! Amount Raised (Rs.cr.) i-----r1':- --"- -------.---,---,------,11000 '
rnJDC'ONTe i 200
,70REC : 100}.TLC
f--,..,::------.-------
SBH~----------.
! 400; 150
•••eecrccc:(
(
(,
(
(
(
(
(
(
(
(
(
<-
<-(
.. 2..
As can he seen from the above, hulk of new iSSUll!1CeS are from TDBI, HUDCO and ffiFCin which we cannot make further investments. The issues of the other eligible borrowersare small in value, and do not therefore provide adequate opportunities fpr meeting theinvestment stipulation. .
111. A number of PSUs are in the process of disievestmente, which will make themineligible for investment in future e.g. MTNL, NALCO etc. This will furthernarrow the scope of investments in this category.
iv. PSU securities are being purchased by us from the secondary market, inaddition to SUbscriptionsin the primary market. Here too, the quantum oftrades are few. and that too. ill. a select number of scrips. The: quantum ofcorporate debt paper traded on XSE is less than 0.5% of the quantum of GovtSecurities traded. as the following data: which has been obtained from RBI,will illustrate:
._--.--.----.--.-- ..". - .-.-. - .-. --------r--- --..--...-------r----.-----.-.-------- -------;! 1002 fi_ s;:c:, tradc~..LR". Cr.) ~_S_0rpor3tc D;;h\ tradcd (lh.er.) !
L.!~~~J:__ : 134842 ; 215: February .... - ·--~lB5.778·----··-----··---- 05:4-----'·---··----·-
i March 133625 ... .. _ . . L~.?.?. ..__._,. ,__,__.. ..J1~A.pril---··-·· : IR0655 i 667~i~~1~av~--..----~;~)~3-7~27~4~-- -----·--~i~86~3~----------------~! June i 116&65------------·-·--·---·· I iSG_____ ·--··-··-·-·----i'-------_.......... ._-------'
u
v, Large amounts invested in AIFIs such as ICICI and IDBI are being redeemed on theirmaturities. These funds cannot be reinvested in AIFls because of reasons which are wellknown. In the aggregate investment ofRs.15100 Cr in PSU category as'on 30 July, 02,investments in ICIer, IDBl and IFCI amount 10 Rs.7391 cr (including Rs. 60 cr. ofSLRbonds). TIle investments in AWls therefore account for just under 50°'-0MPSlJinvestments, and our inability to invest h. AIr-Is restricts investment opportunities h. thiscategory.
3. In view of what is stated above, it is becoming difficult to adhere to tho! -l-O%investment requirement set tor PSus. As you may have observed, there has heen anegative deviation in the PSV category for the past few months, which may be difficult tobridge jf the current paucirv in availability of P::;U securities continues. We wouldtherefore request that the modificarious to the Irrvestrnent Pattern which .have beensuggested earlier, namely, reduction ofPSU allocation, inclusion of Bank Fixed Deposits,inclusion of Small Savings instruments ctc may please be approved at the earliest, so asto avoid having to facing a situation of non compliance with the Investment Pattern.
llL
Yours faithfully,
L
(.
•• l.. --------cconcoccccccc.ccccccc(
(
c(
c[
cql(ffill ~ ~State Bank of India
1IiPr flNm. ~ <A. "1151"~ 1i. 12.
'$rf-~ 021. ITreuury Deparbnent.,Corporate Centre.Post Box No. 12. Mu*1o<IOO 021.
~ax : 2045468/~877t 12868220
1Inrrelagram : APEX I,r The Regional Provident Fund Commissioner (Invest)The Employees' Provident Fund OrganisationHeadOfflceBhavishya Nidhi Bhawan
. 14, Bhikaji Cama PlaceNew Delhi 110066
LPMSlI1~ .3-;no ~ INo.·
Dear Sir,
Action taken report on the decision/recommendations in the Finance &Investment Committee in its 6S11t Meeting held on 161812002
We refer to your letter No. Invst.Ifl(Action Taken)F&I102lPt.I1302178 dated:26da Allgust, 2002
and advise seriatim as under:- •
Our Comment to Point 1We referred the matter to our Law Department to examine the feasibility of infiating winding up
process.
Our Law Deoarbnent views are as follows:
"1. IFCI Ltd. is a company within the meaning of the Companies Act;, 1956. Hence, a,
winding up petition can be filed against IFCI.on the ground that it is unable tb pay its debts, in
terms of clause (e) of section 433 of the Act. It is also possible to file a $ding up petition
against IFCI under clause(f) of Section 433 of the Act on the ground that it is ju$t and equrtable to
wind up IFCt Since IFCI is a going concern and an erstwhile statutory corporation and which is
still a "Public Financial Institution" within the meaning of Section 4A of the Act, it is doubtful
whether it would be possible for CSTEPF to conclusively establish before the court that it is justand equitable to wind up IFCI.
2. Though winding up petition can be filed in accordance with the provisions of the Act,
Supreme Court has consistently held that a winding up petition is not an alte~tive for recovery
of debts and should not be resorted to build pressure for recovery of the amounts due and that
commercial insolvency has to be established. Further, once a winding up petition is filed. all the
DV creditors of IFCI, secured and unsecured would be involved and the ri~fe of the lengthy
Ii ~ r~~rocedure of insolvency proceedings, including questions of priority between securedlunsecured
]v\J..... \U I creditors, ratable distribution, which is time consuming, will have to be n~IY followed. As
observed earlier even in a petition under clause(e) of Section 433 of the Act the !,courtmay take a
\ _view that the petition has been filed as a camouflage but the real intent is to recover the amounts
( /. due from IFCI. Such a possibility cannot be ruled out in entirely. .
[\,~C,/P-vl3. 1" tho light of th e aforesa 'd. OW" Law Department ore of the view that instead of filing of
~~. winding up petition it is advisable to file suit(s), preferably summary suits, fo~ recovery of the
amounts due in respect of the investments which have not been serviced by WCI. Whether a
combined suit can be filed in respect of all the investments which have matured will have to be ~, tL--I'-----------. ..
...,-.-'-~--'---oe(I)
eoooccccccc(
[
cc(
(
(
(
(
cC
lc:C
'.,
decided based upon the nature, maturity dates etc. The suit can be filed at any place where IFCI
is carrying on business or at the place where registered office oflFCI is situated.
4. In the suit(s) to be filed IFCI may raise pleas that the suit is not maintainable because (a)
permission of the High Power Committee has not been obtained and (b) the dispqre needs to besettled through Arbitration Route as .per Govt. of India guidelines. If such pleas are raised by
,
IFCI those will have to be countered by contending that CBTEPF though constit¥ted under the
Employees' Provident Fund Act, 1952, it is neither a Govt. department nor an ~dertaking and
hence permission of High Power Committee is not necessary, Further, even if it i~to be treated
as a Govt. Dept or Public Sector Undertaking. for the sake of argument only, ther~ is no dispute,
and in fact there cannot be any, as regards the amounts payable by IFCI and henge question of
obtaining permission of High Power Committee or having recourse to Arbitration ~oute does not
arise and as such CBTEPF is entitled to prosecute the suit.
5. Lastly, it appears that IFCI is a Public Sector Undertaking or Enterprise. However, this
aspect has to be verified from the ministry concemed as the same has .a bearing on the issues
discussed in paragraph above".
Our Comment to Point 2
Idle fund statement will be submitted each fortnight, instead of monthly, as at present. -
Our Comment to Point 3I
Matter has been followed up vigorously. We have further received Rs. I cr towards maturity
during August 2002. Matter was also discussed with the Executive Director, Mr. Narayan for
expediting early repayment by PNIDClPSIDC. EPFO is also requested to take up the matter
further.
Our Comment to Point 4We have advised our Securities Services Branch, Mumbai to arrange for filing the ~on in the
Kamataka High Court. They took up the matter with the Advocate, Shri Tarakaram.: Copy of the
fax from Mr. V. Tarakaram is enclosed herewith for your reference.
Our Comment to Point 5
Fees are being recovered at revised rate. Necessary adjustment/refund effected on'the basis of
revised rate.
Yours faithfully,
-IIi
~Ii\\______ - ~.~. o< •• _. --.- -.-.-
l..... .' .•.. !... ....-eeeooooe:cccc
y.N.• 'Js-W~ '!
cql{ffill m ~State Bank of India
15\1J ~, CfiR1lfu ~. ~ 1ltt •• 12,
'$rf-400021. 'Treuury Department. ~ Centre,Post Box No. 12. Mumbel-4O(l 021.~ax : 20454681 202877G 12868220
,
l\T{fTelegram : APEX
rThe Regional Provident fund Commissioner (Invest)Employees Provident Fund Organisation,Central Office,Bhavishya Nidhi Bhavan,HUDCO VISHALA.,~!hikaji Cama Place,- Delhi 110066. mtcf; 10at,:-arr. ~ I No ..
PMSj 10?5'J 28.09.02 "
Dear Sirs,
c . ~4-EPFO'S INVESTMENT~tN-.!fCI BONDS
~ REPAYMF-NT OF OI)TSTAN!)ING DIJf:S
C \j~!b. 'life refer to your ·Ietter no. Invest.I/2(16)OliAiCS dated 20.09.02.C\o..\J .C ~U'
c \0 'z ~-( ,./').,'\:~ ~(/.-..•.' .
s:( X;.
2. In this connection we observe as fellows:The prooosal is for reschedulinq of princifX!' and interest fallen/falling due lip
to 30/03/03 .. Hence no repayment obligatioli by IFCI for any dues up to30.03.03. 'Repayment of above dues in 5 years in quarterly installments of Rs.20 crores(approx), commencloq from 20th April'03. Exact amount to be specified.Interest for overdue period @ 9.SQ';' to be calculated and paid ~nnually. Thefirst such installment would be worked out from respective due dates till 1~April,03 which would be paid to EPFO on 20th Aprii 2003. .There is no mention about the payments for the amounts beco~ing due after30/03/03.
( IFCI does not propose any payment now.q~ - There is no guarantee for repayment.
~ ~~ 2. Various news items apP".,;ng ;n the newspapers indicate that Jll:I Is seekingGovt. assistance to turnaround. It has posted hioher losses in last. fiscal. Theirconsultants have advised them to restructure the debts and to split their portfoiio so
{ that average cost of funds comes down to 9%. All these reports have" appeared in( the press and we do net have any concrete information on IFCI's intent. I
cCC
C
l r.I"
~(~
"",
3. It is not dear to us how IFCI propose to turnaround so as to service theirliabilities. We are of the view that unless the basis of their future prOjections areclearly' spelt out and srcutinised, it wili not be possible to c?mm~ on ~eir proposal,You may therefore advise IFCI to ,submtt tijelr .deta II plans for revival: and fer therepayment of existing liabiHties. .":>'.:,,~.;c. r.'.' : . __ , .. ..
"f~'i'~fJ \.~:;-j. ·i"-~";,.~:;i;":i ;;1••1 ~·i'H (
1 Bhavi.hY:l N:ahi Bnawan Ii 14, Bhiklaji ClITIa Place\ d l;mh(N~'j( C"i,hH1C 066, \ .
! ;::-~ OcT 1001 I! I\ "r.ro nIIt ••••H ••• _-_._-_._.··\
1~()iMY NOa .
Yours faithfully,
ot)
eo'0oc:c:c·CcGC'
c'cccccC(,
<-<-(
cc(
(
Ll
l
L
..
~~Regd. Office
1. ••••••
FCILIMITED
~ ~ "d\'ant ~fqhNo. Res.SLRI2002· dated : ?'h October, 2002
II
Employees Provident Fund OrganisationBhavishya Nidhi Bhawan,14, Bhikhaji Kama Palace,New Delhi -110066(Fax: 617-2666)
Dear Sir,
,
Kind Attn: Shri K:.L.Taneja, Regional RF Commissioner
Re : EPFO's investment in IFCI Bon9s -Repayment of outstanding d~es.
In continuation of our letter No. Res. SLRI2002 dated the 16th September,
2002 and the discussions we had with you on the 1ifh September, 2002, on the
subject. As desired during the above said discussions, we enclose herewith a
note on our Future Business Plan along with a copy ~f our Annual Report for the
year 2001-2002 for your perusal.
2. We hope you would be satisfied with IFCI future business plan and
consider our proposal as submitted vide aforesaid letter favourably.
Thanking you and looking forward to your concurrence at earliest on our
proposal.
Yours faithfully,
-b.~(A.K.Choudhary .General Manage
Encl : as above
3lT{.~.lft.ant -em/IFClTower.61. -.m. ~/NehruPlace. ~ ~ ./P.B.No. 4499.~ ~/NewDelhl·"00'9. ~/Phone : 648 7444, 648 7622 ~ ~/Volce Mr" : 648 8301-08 I I ()
~<m/Fax: 011-6230201,648 8471 ~<m/TelelCl: 31-71382 '1..:>E-mail: [email protected] Website: www.iJclltd.com
I
('\
('I
('I
("'1
ccrC:
C'C(
C
C
C(
C(
(
(
(
(
(
(
(
(
(
C
l
l
l
\!
IFel : Future Business Pl,n
IFel's performance, during the current year as also':preceding year, has been
adversely affected on account of reduced income from lo~s and debentures, which,
was mainly due to recessionary conditions of the industrie~. Despite that IFel on its
part had been meeting its debt obligations till 2001 end. Thereatter, due to bunching,
of rupee and foreign currency repayment obligations, IFel had not been able to meet
its debt obligation on time.
The factors leading to the current difficulties are assets-habllity mismatches onI
account of differences in maturity profile of assets and Ii~ilities, aggressive growth,
pursued in mid-1990s following economic liberalisation, prpgressive tight regulatory
. norms on assets classification, income recognition and provisioning, and the
industrial slow-down in recent years. These coupled with the downward revision in
credit rating adversely affected IFel's ability to raise fresh funds from the market or
from Banks I institutions at competitive rates. A signifiCSf1'ltpart of IFel's portfoliO
continued to comprise of projects that are under implemen~tion, which are presently
not generating cash inflows.
,(
On the asset side, major initiatives taken by IFel include entering into
aggressive negotiated settlements, timely restructuring of impaired assets, obtaining
recovery certificates for disposal of mortgaged assets and sale and securitization of
assets for improving overall liqwdity position. In respect of the liabilities, continuous
efforts are being made to seek reinvestment at current coupon rates and extending
the maturity profile of liabilities. Efforts are also being ma~ for the injection of long
term funds through securitization of assets and Contributions from the major
shareholders.
,
IFel's management is pursing an ongoing dialogue..yith various stakeholders
and the regulatory authorities for securing liquidity support and recapitalisation. IFel
has also been in discussions with a number of international ~gencies and investment
banks on financing issues, in particular on the capitalisation needs of IFel, and theI •
Asset Reconstruction Company (ARC) promoted by it.
,
IFel is taking various steps for improving its performance, including intensive,
monitoring of large accounts, aggressive drive for recoveries from non-performing
--l..._~__ .. ~ __
\1(":
(1
r-cc:c:\'('
c:cccrcc(
(
(
(
(
(
l(.
(
l
l
L
2
I
.assets by way of negotiated settlements through Debt Recovery Tribunals I Courts,
grant of need-based reliefs I concessions etc.
IFCI had also appointed McKinsey & Co., an internationally reputed
.consultancy firm, to evolve a long term strategy an~ business plan, including
developing a detailed strategic blue print and implementation plan on the future role. '
of IFC!. FolloWing a thorough review of IFCI and its prospects, McKinsey & Co has
recommended adoption of a four pronged strategy for restruduring of IFCI, as
detailed hereunder:
i). Segregation and transfer of non-performing and *tressed assets to an Asset
Reconstruction Company (ARC) for dedicated and fpcussed attention (Assets
Reconstruction Strategy),
,
ii). Addressing the gap in IFCI's balance sheet by ~restruduring liabiJities and
soliciting a suitable recapitalisation package. One of the steps suggested to improve
the profitability and long term viability I sustainability of IFel, entails upon resetting of
interest rate on all debts @ 9% p.a. and shifting of maturity dates at least by five
years (Balance Sheet Restruduring Strategy),
t iii). Developing the balance (good) assets and restructured liabiUties into a Good
Bank which could either be merged with a potential Univel!SBlBank or become a Mid-
Corporate Service Provider (Good Bank Strategy), and
iv). Ensuring a successful transformation through lntroduction of appropriate
changes in organisational culture and set up (Transfonnati~n Strategy).
Based on the above recommendations, which: have been submitted to
Govemment of India, a detailed action plan is under preparation and steps would beI
initiated for implementation of these· plans in .a time bound manner. The
transformation strategy that has been suggested is also Well under implementation
and the actions already taken include the following :-
(a). In order that the 'good assets' in IFel's books remain good, a cell called
"Large Asset Management Cell" has been created to constantly monitor the health of
nc-(1
r:
oc:c:noccC(
CC
\(
(
C(
l
ll
(
(
l
l
l
C
l
ll
l
r
I
I
large assets (with outstanding of Rs. 250 million and a9ove) and take appropriate
corrective measures to prevent their slippage. ' I
I
!I
(b). A Credit Risk Management Department has alst been formed to identify,
measure and manage risks in credit proposals, pin pOi1t early warning signais in
existing performing assets as well as suggest risk mitigati0r measures.II
3
(c). Liability and Business Practices Teams have also] been organized which willI
report regularly to Management on efforts and successful I implementation to roll overI
and refinance loans pertaininqto good assets and to develop new business.IIIII
(d). IFCI has consciously taken steps to develop its Corporate Advisory ServicesI
Department to lay stress on developing in-house expertise on areas like Syndication,I
Advisory for Merger & Amalgamation, Project Evaluatioh, Business Restructuring,I
Investment Banking, etc. I,
!I
I
It is expected that there will be a major turnaround in IFCl's financial positionII
in the months ahead ~s a result of the various strateqies discussed above with
respect to Restructuring and the Good Bank. It is also txpected that there will be
substantial progress with the work on management of nonr'performing assets through
the recently established Asset Reconstruction Company. I
I
!
It is hoped that with above proposal coupled! with the support of theI
institutional investors, IFCI would turnaround and service the restructured debt
obligations as per revised schedule.
*******
~<
.'- .'
~IFCILIMITED
aut~~ ~ ~~lgConfidential
\
I
I
I
\
Date1: 16thSeptember, 2002
iII
I
No. Res.SLR!2002-
Employees Provident Fund Organisation,Shavishya Nidhi Shawan,14, Shikhaji Kama Palace,New Delhi -110066(Fax: 617-2666)
KindAttn: Shri K.L.Taneja, Regiopal PF Commissioner.,,,,
Re : EPFO's investment in IFCI Bonds 1,-Repayment of outstanding duel
,
Please refer to your letter No. Inv.1/2(16)/2001/-o/cNO.5130886dated the 29th
,
August, 2002, on the.subject. i
Dear Sir,
,I
II
2. We are thankful to EPFO for the valuable suppprt extended in our resource,
mobilisation from time to time. As already informed to EjPFO,IFCI is currently facing
liquidity constraint on account of bunching of repayment of foreign currency and
rupee borrowings. Various factors, like recessiona~ conditions in the Indian
Economy and competition from imports have affect~d operations of number ofI
manufacturing concerns impairing their capacity to s&rvi~ institutional term loans. As
a result thereof, recoveries of instalments of prinCipala~d interest from our assisted
concerns have not been adequate to meet our repayment requirements., I
II
3. Looking to the IFCl's contribution in the count~s industrial development, a
capital infusion package had been approved by the Govtll of India. While releasing itscash neutral share of Rs. 400 crores, the Govt. had, iriter alia, stipulated that IFe.
should seek roll-overl refinancing of the investments from the existing,,
investors. The current position of IFel is well appreciat4d at all forum including RBI
and Govt. of India and it is agreed by the various playerS in the financial fraternity,
that IFCI need to be supported at this juncture through\ roll over/ reinvestments of
their dues. Accordingly, we had earlier requested for r~-investment of the maturity
proceeds due in our current issue of Bonds.
;t,<{
3lT{.~.~.3lT{. OO/IFClTower, 61, ~ tffif/Nehru Place, .tit. iff. ~/r.B. No. 4499,~ ~/New Delhi·110019~/PhOM: 6481444, 6481622 $ l)(;{/VoifeMail: 648 8301-08
tt<m/Fax: 011-623 0201, 648 8471 ~<'\<m/telex: 31-71382E-mail: [email protected]:~.ww.ifciltd.com
I
I \.
I
II
I
21' September, 2002
I •, ' .
'. 'I"; . . . v,~ ~~:'!II <j,j . :·C 1~'l= ~'.J ....~.~...._~.~-.~.
OICl1 i{,;.. j \--~~ '. I' -:.... .~....~, -' .----.I
Re : Your investment in IFCI SLR ,onds,,
~ I
We are extremely thankful for your Provident Fu~d's support in our fund
mobilization effort from time to time. On our part we had\ been meeting. our debt
obligations to your Bank. However, from Decemb4r 2001, bunching of
repayments of foreign currency and rupee borrowinqs retlted In mis-matches of
our assets and liabilities. As you are kindly awar" various factors like
recessionary conditions in the Indian economy and cqmpetition from imports
have affected the operations of a number of manufactu1ing concerns impairing
their capacity to service institutional term loans. As a res1t thereof, recoveries of
installments of principal and interest from our assisted c ncerns have not been
adequate to meet our requirements, resulting in liquidity onstraints. The above
position alongwith tightening of NPA norms by RBI has I I to ratings downgrade
of IFCI by the rating agencies. I
. ~ _ /. IFCI, being India's first Development Financiallns.ttution, has invi!6nsely
~ ~ contributed to the nation's. industrial development oVfr the last 54 years.
AppreCiating IFCl's importance in the country's finanfial system, a capital
infusion package of RS.1000 crores had been approved bf the Government of, .
I
I
~ ~ ~.1/'Ii.~.~. tm/IFCITower. 61. om. ~/Nehru Place. t& ••••a/p.B.~.4499. ~ ~/New Delhl·110019
~/Phone : 648 7444. 648 7622 cntfl ~/Volce Mj" : 648 8301-08 L~cm/Fax:011-623 0201, 648 8471 ~cm/Telex: 31-71382 I IE~.iI''''pdNk.iI''~iI._••••••••,-T'Id.=m . It:'
II
cc:r:r:C('"
crcc(
(
CC·
CC.cCCC(
(
(
(
(
C(
C(
~\
~\ \ ~\ ~.IFClIReS.lSLRI2002..Q3 .....qs&,9
{~ ~~cV, \ ~~'1fN"ThlJCentral Provident Fund Commissioner,~r\ ,\' SBI EPFO~ ; Bhavishya Niti Bhavan,. 14, Bhikaji Gama Palace,
New Delhi-11 0 066
. ........: .
Dear Sir,
f!t .r)1? '
ll
l
l
Regd. Office
'\... L. _
,II
"
III
c("
(';
cccccccccccCCCCr( (L
- ..•
lC
C(
llLLCC
LL
(-----
L ••••
2
i
India in October, 2001. While releasing its share of ~s.400 crores, the
Government had, inter alia, stipulated that IFCI would seek ro,1over' refinancingI
from lenders. The current position of IFCI is well appreciated at all forums,I
including Government of India, and it has been felt that various players in theI,
financial fraternity would have to support IFCI at this juncture through roll-overII
'reinvestment of their dues.
,
3. With a view to apprise PSU Banks of the initiatives taken by us and theI
future plans, a joint meeting was convened at our Head Office I on 22ndApril, 2002II
which was attended by senior executives of PSU Banks. The representatives of,
I
Government of India and Reserve Bank of India also attende~the meeting. Fully
appreciating the present problem of IFCI and the steps ta en to manage the
liquidity, the Banks were agreeable to extend the required br ad based support.I
Both Government of India and RBI have also been supportihg in its efforts forII
overcoming the liquidity crunch. As an interim support, t~e Government of
India have, vide letter dated the 3rd August, 2002, ~Iready conveyed
approval to extend Government Guarantee for extension 10f the repayment
period in respect of our SLRoverdues' dues upto 31st Oc~ober, 2002 to the,
extent of Rs. 300 crores (including Principal and lnterest). As such, the
reinvestment' roll-over of the overdues of Banks in IFel SLR Bonds would
continue to have the benefit of Government Guarantee Ifor the extended
period. Our request for further support from Government is under their activeIIIII
I
4. We are also taking various steps for improving our pertormance, including
intensive monitoring of ~arge accounts, aggressive drive for reboveries from non-
performing assets by way of negotiated settlements throuqh Debt Recovery
Tribunals' Courts, grant of need-based reliefs' concessions ih deserving cases,
consideration.
\ \ I...--
("
r-c-cccccccccccccccc(
cc(
(
(
c(
L
L
l
lLl
(',
l------
3
II
I d .etc., besides giving more emphasis to fee based and npn funded a VISOry
services. I
III .
5. In the backdrop of foregoing, we request you to ~indly convey your
Provident Fund's concurrence for reinvestment of interes, overdues/dues as
above and extensioii of the repayment period of the already matured SLR BO~SI
for a further period of 10 years at a rate of interest of 8 % per annum, payableI
annually. We shall be extremely grateful for your conti~uing support. The
particulars of the amount of investmenUextension of redemption period in respect
of your Provident Fund as per our records, are fumish~d in the enclosed
statement, which may kindly be reconciled at your end and discrepancies, if any,
may please be advised to facilitate reconciliation thereof.• I
. I
IThank you, I
Encl: As above
,
"Yours faithfully,
(R.M. Malia)~xecutive Director
(' r' r r r ~ r ~ ~ r ~ ~ ~ ~ n n 0 n n n ~ n ~ n ~ ~ , ~) ~ } ~i
"'w ,/,,) ~
, j
r:j
..-. (")
r)1... Amount Falling due as on 31.10.2002 against 5BI. EPFO's Investment inIFel SLR Bonds
(Amt in Rs)
I
TDS '{:p by us for NetAmt. Of r-Gross Int due/due Overdue which ank to give ... reinvestm ant! exten
Centre Series Investment Due Date uptp 31.10.02 Redmption Amt. credit to IFCI Net Interest Due slonMUMBAI 47 600,000 27-May-02 33,000 600,000 - 33,000 633000MUMBAI 47 100,000 27-May-02 5,500 100000 - 5,500 ( 105,500MUMBAI 47 100,000 27-May-02 5,500 100,000 - 5,500 105,500MUMBAI 49 70,000,000 17-Aug-02 3,850,000 - - 3,850,000 3,850,000 tMUMBAI 49 200,000 17-Aug-02 11,000 - - 11,000 11,000DELHI 49 100,000 17-Aug-02 5,500 - 5,500 5,500
MUMBAI 50 50,000 14-Jun-02 2875 - 2,875 2,875
1MUMBAI 50 25,000 14-Jun-02 1,438 - 1,438 1,438MUMBAI 50 200,000 14-Jun-02 11,500 - - 11,500 11,500MUMBAI 51 70,000 13-Jun-02 4,025 - 4,025 4,025MUMBAI 51 100,000 13-Jun-02 5,750 - 5,750 5,750MUMBAI 51 1,000,000 13-Jun-02 57,500 - 57,500 57,500MUMBAI 51 300,000 13-Jun-02 17,250 - 17,250 17,250MUMBAI 51 50,000 13-Jun-02 2,875 - 2,875 2,875 •MUMBAI 53 500,000 30-May-02 28,750 - 28,750 28,750MUMBAI 55 300,000 26•.Jun-02 17,250 17,250 17,250
I-MUMBAI 55 500,000 26-Jun-02 28}50 - 28,750 28,750MUMBAI 55 100,000 26-Jun-02 5,750 - 5,750 5,750MUMBAI 57 134,363,000 24-Mar-02 7,725,873 - 7,725,873 7,725,873 IMUMBAI 57 450,000 24-Mar-02 25,875 - 25,875 25875 ,
MUMBAI 58 I\?I\ nnn ?A_.Il1n.n2. ~n .•00 30188 30,188-01", 'v., -MUMBAI 59 500,000 19-Aug-02 28,750 - - 28,750 .2a,750MUMBAI 60 104,000 13-Jul-02 6,240 - 6,240 6,240MUMBAI 62 200000 14-Mar-02 13,000 - 13,000 13,000MUMBAI 62 40,000 14-Sel>:02 2,600 - 2,600 2,600MUMBAI 62 200,000 14-Sep-02 13,000 - 13,000 13,000MUMBAI 64 25,000 28-Jul-02 1,625 - - 1,625 1,625MUMBAI 64 5,000 28-Jul-02 325 - - 325 325MUMBAI 64 1,000 28-Jul-02 65 - - 65 65MUMBAI 65 150,000,000 24-Mar-02 10,125,000 - 10,125,000 10,125,000MUMBAI 65 25,440,000 24-Mar-02 1,717,200 - 1,717,200 1.717.200 :
TOTAL 23,783,953 800,000 23,783,953 24,583,953 .
lAC\
.o.~o/\~<t1Ol-- ;1
~. - I
~'?~~ 'f:/Y~~;IIX.\,i\,. vPt -: <tl:~ I
j Telephones: EPABX: 702881,721660 Fax: 91-172-704145 Gram: 'tUNCORP'E-mail: psioo@[email protected]
• I
I
c:("
()
nccc:ccCCCCCCC
CC(
(
C(
(
CCl(
LL
l
l.
crl
IpSIDCI
PUNJAB STATE INDUSTRIALDEVELOPMENT CORPORATION LT .(A STATE GOVT. UNDERTAKING)
Regd. Office: Udyog Bhawan, 18 Himalaya Marg, Sector 17, P. Box No.8, CHANDIGARH -160 017 (INDIA)
NOIPSIDC:ACCTS: 5:5~SAugU~t23, 1001
IIIIIIIII
Sh.K.L.Taneja,Regional Provident Fund Commissioner,'EmployeesProvident Fund Organisation,Ministry of Labour, Govt. or-India,BhavishyaNidhi Bhawan,14,BhikajiGamaPlace,New Delhi-II 0066
Re: Payment of overdue interest and maturity proceeds.
Dear Sir,
Please refer to your letter No. vest. lit Action Taken Fin. &Inv.02lpt.II126875dated 12.8.2002on the above mentionedsubj
In this connection, it is to inform you that investment in 13~ PSIDCbonds 200~ due for redemption on 3.1' .2001 has been rOllf! over to11.74% bonds of Rs.I09.00 crores - 2001 1st series amqunting toRs.25.00 crores in the name of Central Board of Trustees F.. ~interest a enr of I 1.1 .2001 to-28.2.2002 f01:151 da 'de C ue 0.335878dated 6.3.2002:"drawnon HDFC Bank. The date of allotment f the saidbonds is 1.3:2002, for which allotment letter has been is~ed. Theinterest on your investment of Rs.25 crores will be paid on 30'1-2002, asper the terms of the offer document. i
The investment of'Rsj,QQ, crores in 12.25% p.a, bonds-IVthI Series -1999,whichwas due for redemptionon 30:3.2002,the samewil~be madealongwithover due interest within the end of this month out of ~e fundsbeing received against the new bonas issue ofRs.l00.00 crores.
\
/
cccC'
CCC('
CCCCCCCC(
(
(
( (.
(
l(
(
cl<-lll
-2- ,
The investment of Rs.4.30 erores in the name of Central Bo d ofTrustees Ale No.8 Employees Provident Fund payment of Ale in 1 .15%-p.a, bonds 2000 1st Series of Rs.13.61 erores was due for redemtpi non31.S.2002. the Corporation has made the part payment of Rs.1.30. roresand the balance amount will be paid alongwith delayed period in erestshortly.
Kindly bear with us for the time being,
Thanking you;-
¥:ours faithfully,
t5/
....rr:cr:Ccrcccc(
cccc(
c(
(
l(
l(
(
<-l
lC
l
l
ll.
"-
L
Item No.3: Review of Investments
The current yields on investments made by SBI on behalf of pBT. EPF have registered a fallI
and the current yields available in the market are below the committed liability of CBT. EPF towardsI
payment of interest to its subscribers I
• I
With the consistent fall in the yields on current investment. the committee may consider
broadening the investment options as well as suitable modifications ip investment guidelines. Here it
may be pertinent to inform that the CBT. ~PF has recommended for modifications in the pattern of
investment. The response of the Government is still awaited. With ~ view to ensure optimum yieldI
with maximum security on its investments, issue regarding strategy fqr investment of funds belongingI
to Central Board of Trustees, Employees'Provident Fund was taken ~p with SB!. The S.BI has givenI
a detailed response vide their letter dated 28-09-2002 which s placed as Annexure for
consideration.
c
rr:r:r:crccc (:
c(
ccc(
rr(
(
( (
(
(
(
<-(
l
l
C
l
tl
l
C
L
\.
I
ItemNo.3A: Reviewof Investmentsin respectof ProvidentFund!
The details of fund inflow and investments made by S81 acccrrding to the prescribed pattern
are as follows: - !
,,
(Fjgures in Rupees)
PROVIDENT FUND (APR-Aug 2002)
INFLOWSource AmountOpening Bal~nce 42,26,09823.15Fresh Accretions 202,72,00000.00MATURITIES 440,71,39875.00Treasurv Billsothers 440,71,39875.00INTERESTCentral Govt. 207,01,09316.14State Govt.lGuaranteed 29,61,96957.00State Develop. Loans 142,72,21371.61PSU/PSFI 213,59,83115.65 1592,95,10760.40SOS Withdrawal ,
Refund of Income Tax , 11,07,75857.00Incentives : 1,10643.00Refund of Appl. Money i
Refund of Bank Charges , 175,586.00other receipts , 1069Total: 1289,75,23613.55
:
1OUTFLOW
Category , Amount,
INVESTMENTS MADE !
Central Govt. 327,99,70450.00State GovtlGuaranteed :
State Develop. Loans 286,77,76541.90 ,
PSU/PSFI 406,40,43272.50 1021,17,90264.40Current Account , 2,87.40021.75Treasurv Bills I
,
Accrued Interest , 25,64,65183.40Transfer to Main Sr. 235,00,00000.00SDS Deposit I
Income Tax Deducted I 4,68,74846.00BANK CHARGES ,
Transaction Fees 21 ,73065.00,,
Income Collection 12,48220.00 I!
Service Tax 1,71075.00 ,
Misc. Charges 60938.00 34,82223.00TOTAL " 1289,75,23613.55
(x) Service Tax levied w.e.f. 16.7.2001 @ 5% on the portfolio m~nagement charges being paidto State Bank of India). . I
I
.< .
53
cccr('
cccc (~
c(
c(
c(
c(
(
(
( <<-(
<-<-(
lll
l
C
l
lC
lI'-
..•... '--~
}> The cumulative picture of holding of CST EPF is indicated beltw-
(Figures in Rupees)
J1.0J.00 31.03.01 31.03.02 31.08.2002
1 Central Govt. Securities 2747.01 3801.46 4374.12 4566.75
2(a) State Govt. 1738.12 2068.86 2456.65 2682.16
(b) Govt. Guaranteed 627.40 847.79 730.46 729.68Securities
3~ Special Deposit Scheme 38773.06 43145.65 47441.14 47478.64
4 Public Sector Financial 3820.46 4540.90 ! 4986.07 5045.61Institutions
Total 4n06.13 54404.66 59988.44 60502.84
}> Details above investments made in various scripts pertaining to each category i.e. Central1
Govt. Securities, State Govt. Securities and PSU I PSFI durin$ •.•.. Aug. 2002 are enclosed
as Annexure. C
I-I
I
4.,
---j---
/'- r r r r r r r r ~ ~ ~ ~ ~ ~ ~...~ ~ ~ .'l 'l ~ -- -. ~ j 'jj -, J ") /") J -.,
.-- /"-1 A~\;K\) p-G,. C
~~~~()
DETAILS OF INVESTMENTS MADE DURING AUGUST 2002 (PRQVIDENT FUND)
Date Cat Coupon Particulars Maturity Face Value Rate Cost Price Accrd.lnterest Bank Charge Yield
05-08-2002 SOL 7.8 TN SOL 2012 23/04/2012 20,00,00000 100 20,00,00000.00 4,420,000.00 20000 7.80SOL 7.8 MH SOL 2012 23/04/2012 4,00,00000 100 4,00,00000.00 884,000.00 12000 7.80
~Total: 24,00,00000 24,00,00000.00 5,304,000.00 32000
I19-08-2002 CTG 10.18 LOAN 2026 11/09/2026 6,65,00000 123.85 8,23,60250.00 2,9?1,146.11 19950 7.94
~21-08-2002 PSU 7.6 NHAI BOND 2007 OPIII 31/08/2007 25,00,00000 100 25,00,00000.00 20000 7.60
23-08-2002 CTG 10.18 LOAN 2026 11/09/2026 11,00,00000 124.1 13,65,10000.00 5,039,100.00 20000 7.92
PSU 8.4 IRFCI2007 14/05/2007 5,0000000 102.7786 5,13,89300.00 1,162191.78 15000 7.83
•24-08-2002 SOL 12.25 MH SOL 2009 21/04/2009 600,00000 123.61 7,41,66000.00 2,511,250.00 18000 7.65
f28-08-2002 SOL 12.25 GJ SOL 2009 21/04/2009 5,0000000 123.28 6,16,40000.00 2,160,763.89 15000 7.70
31-08-2002 CTG 8.35 LOAN 2022 14/05/2022 60000000 106.55 6,39,30000.00 1,475,166.67 18000 7.70(
- -~ f-- [ClG: 265.42 nnnnn -32h99,7~.OO --9,1-1-,08904.r:;r:; S27-.56CPSU: 387,12,00000 406 40 43272.50 11,10,60591.23 909100STG:SOL: 2556662000 286,77,76541.90 5,42,95687.62 636,405
Total: 908,20,62000 1021,17,90264.40 25,64,65183.40 2,173,065r"
55 ~ ..
rccrccccc ('<
(
(
(
(
c(
c(
(
(
( (''.(
{
(
(
(
(
(
(
<-
l
l
tl
l
\
_ L__L
Item No. 38: Review of Investments in respect of ension Fund
The details of funds inflow and investmentsmade by SBI are as follows:
(Flaures in Rupees)
PENSION FUND (APR-Aua. 2002) i
INFLOW I
Source AmountOpening Balance 69,~:'-3,89527.19Fresh Accretions 1106 3760000.00MATURITIES 598,08,90000.00Treasury Bills I
Others 598,bs,90000.00INTERESTCentral Govt. 334,37,42523.50StateGovt./Guaranteed 28,56,07588.00State Develop.Loans 139,53,73401.35PSU/PSFI 355,42,65819.63 857,~9,89332.48Refund of Income 1Tax 4,~2,95797 .00Incentives ' 165,000.00Refund of Bank I
Charges i 296,705.00Total: . 2636 57,86361.67
.-OUTFLOW I
Category ARJountINVESTMENTS I
I
MADEII
ICentral Govt. 1062,04,37580.00 ,
State Govt I !
Guaranteed i
State Develop. ,
Loans 455,52,39178.30PSU/PSFI 1008,40,25097.50 2525-:J7,01855.80Current Account 32,98,40198.01Treasury Bills I
Accrued Interest 69,68,.62076.86Transfer to Main Br. I
SDS Deposit II
Income Tax ,
Deducted 7,~7,92152.00BANK CHARGES I
I
Transaction Fees 43,65574.00 !Income Collection 19,10689.00 ~2,76263.00Service Tax I 3,13816.00Misc. Charges ITOTAL 2636,~7;86361.67
-.-
5h
-ccc:cccrcc /:
ccrcrr('
cc(
C (,
(
(
(
(
(
(
lL
L
l lC
l
l,-,\
> The cumulative picture of holding of CST EPF is Indicated below. jPENSION FUND- INVESTMENT ACCO~NT
(Fjigures in Rupees Crores)
As On--7 31.03.00 31.03.01 31.0 3.02 31.08.2002,1. Central Government 3223.72 4753.45 6386.14 7202.20
Securities II
2(a) State Govt. 1449.07 1887.68 I 2503.71 2900.84
(b) Government Guaranteed 346.50 551.36I
622.98 615.48Securities I
I
3. Special Deposit Scheme 1003.65 1117.09 I 1227.34 1227.34I
4 Public Sector Financial 6226.84 7842.62 I 9290.26 9705.72Institutions I
I
5 Public Account 15160.35 17064.19 :19019.38 19019.38
Total 27410.13 33216.39 :39049.81 40670.96I
II
II
~ Details about investments made in various scripts pertaining to eachI
category i.e. Central Govt. Securities, State Govt. ~ecurities and PSUII
PSFIduring ~Aug. 2002 are enclosedasAnnex¥re "3)I
...
r: r rJ""~
r r r r r r- ("'.r-, r" ("'. ("'. r-, r-, t) t) ,~ t) ~ .~ ~ ~ t""') (') 'j .., I"') () ...,
:D".... P\ ~'\~ t=P< " ~~,1..~~ 'b ~
DETAILS OF INVESTMENTS MADE DURING AUGUST 2002 (PENSION FUND)
Date Cat Code Coupon Particulars Maturity Face Value Rate Cost Price Accrd.lnterest Bank Charge Yield r'
01-08-2002 PSU 821114 8.05 NTPC 2007 SR XIV 02108/2007 30000000 100 300,00000.00 9000 8.05i,
03-08-2002 CTG 110108 10.18 LOAN 2026 11/0912026 250000000 124.85 31 21 25000.00 1,0038611.11 20000 7.86 I
CTG 110090 10.7 LOAN 2020 22/0412020 300000000 128 38 40,00000.00 9005,833.33 20000 7.76
Total: 550000000 69 61 25000.00 1 90 44444.44 40000
•05-08-2002 CTG 110108 10.18 LOAN 2026 11/09/2026 250000000 124.84 31 21 00000.00 1 01 80000.00 20000 7.86CTG 110108 10.18 LOAN 2026 11/0912026 200000000 124.65 24 93 00000.00 8144000.00 20000 7.88CTG 110108 10.18 LOAN 2026 11/09/2026 1800,00000 124.65 224370000.00 7 329,600.00 20000 7.88
Total: 630000000 78 57 70000.00 25653600.00 60000 t06-08-2002 SOL 120458 7,83 MH SOL 2012 28/06/2012 20000000 100.6 2 01 20000.00 165300.00 6000 7.74
08-08-2002 CTG 110108 10.18 LOAN 2026 11/09/2026 337500000 124.83 42 13,01250.00 1 4029312.50 20000 7.87
12-08-2002 eTG 110108 10.18 LOAN 2026 11/09/2026 10,00,00000 123.99 12,39,90000.00 4,269,944.44 20000 7.93
13-08-2002 SOL 120247 12.25 MH SOL 2(109 21/0412009 20000000 123.71 24742000.00 762,222.22 6000 7.65 4
t14-08-2002 SOL 120354 12 RJ SOL 2010 26/0912010 24000000 124.79 299 49600.00 1104000.00 7200 7.81
17-08-2002 CTG 110108 10.18 LOAN 2026 11/0912026 13000000 123.95 1 61 13500.00 573473.33 3900 7.93r
19-08-2002 CTG 110108 10.18 LOAN 2026 11/0912026 3500000 123.85 4334750.00 156376.11 1050 7.94~CTG 110108 10.18 LOAN 2026 11/0912026 46000000 123.85 56971000.00 2055228.89 13800 7.94
Total: 49500000 613 05750.00 2,211,605.00 14850
20-08-2002 CTG 110108 10.18 LOAN 2026 11/09/2026 30000000 124.3 37290000.00 1 348850.00 9000 7.91
22-08-2002 eTG 110108 10.18 LOAN 2026 11/0912026 350000000 124.27 434945000.00 1 59,34527.78 20000 7.91
PSU 820043 8.63 POWER GRID CORP 2006 31/0712006 50000000 103.1917 . 515,95850.00 260,082.19 15000 7.65PSU 820044 8.63 POWER GRID CORP 2007 31/07J20Q7 50000000 103.4639 517,31950.00 260082.19 15000 7.75PSU 821115 8.4 IRFCI2007 14/05/2006 5000COOO 103.0863 5 15 43150.00 1 150,684.93 15000 7.75
Total: 150000000 15,48,70950.00 1,670849.31 45000
66
-- r: t'""' r r r rrrrrrrrrnrnnnnnnnnnnnnnn~~"r- - -")
DETAILS OF INVESTMENTS MADE DURING AUGUST 2002 (PENSION FUND) rDate Cat Code eoupon Particulars Maturity Face Value Rate Cost Price Accrd. interest Bank Charge Yield
23-06·2002 erG 110108 10.18 LOAN 2026 11/0912026 190000000 124.1 23,57 90000.00 8703900.00 20000 7.92
26·08·2002 erG 110108 10.18 LOAN 2026 11/0912026 150000000 124.875 1873 12500.00 7083583.33 20000 7.86erG 110108 10.18 LOAN 2026 11/0912026 200000000 124.91 249820000.00 9444777.78 20000 7.86
•Total: 350000000 4371 32500.00 16528361.11 40000
29-08-2002 erG 110110 8.35 LOAN 2022 14/0512022 100000000 106.7 106700000.00 2,435416.67 20000 7.68
ISOL 120290 11.85 AP SDL2009 08/0912009 10000000 122.2 1 22 20000.00 562875.00 3000 7.70SOL 120244 12.25 GJ SOL 2009 21/0412009 tOO 00000 123.28 1 23 28000.00 435555.56 3000 7.70 r'
Total: 20000000 24548000.00 998430.56 6000
30-08-2002 erG 110106 10.25 LOAN 2021 30/05/20~1 5,00,00000 125.16 625,80000.00 1281250.00 15000 7.69erG 110106 10.25 LOAN 2021 30/0512021 100000000 125.16 1251,60000.00 2562500.00 20000 7.69erG 110110 8.35 LOAN 2022 . 14/0512022 100000000 106.75 10,67,50000.00 2458,611.11 20000 7.68
Total: 250000000 2944 90000.00 6302361.11 55000 ISDL 120398 9.4 MH SOL 2011 29/0812011 50000000 110.8 55400000.00 13055.56 15000 7.72
12431-08-20 SDL 120317 10.52 KN SOL 2010 25/0412010 100000000 116.06 11 6060000.00 3652777.78 20000 7.70
eTG: 8560600000 106204,37580:00 -30-aO~'f8;16r
f--
PSU: 966 04 00000 10084025097.50 296928106.38 2009190STG:SOL: 3971359000 4555239178.30 9,2910492.38 1 102,474
I
Total: 2 219,23,59000 252597,01855.60 69,58,62076.86 4,365,574
5l,
II
..,-- -- ..•.-crrrcc:cc:cccccccccccc (
Item No.3C:
FundReview of Investments in respect of EDLI
Thedetailsof fund inflow & investmentsmadeby SBI in respe of InsuranceFundare as
follows:- (Figuresii" RupeesCrores)I '
EDLI FUND fAPR-Au·a. 2oo2J\
INFLOWSource A ."ount
Opening Balance I 3,376,286.93Fresh Accretions 47,26,05000.00
,
9,00,00000.00MATURITIES I
Treasury Bills Iothers I 9,00,00000.00INTEREST I
I
central Govt. 9,03,06821.25 I
State I
Govt.lGuaranteed 1,26,16541.00 I,
State Develop. II
Loans 3,59,12587.30 ,,
PSu/P8FI 10,98,28785.00 I 24,86,64734.558DS Withdrawal \
-Refund of Income II
Tax I 10,44665.00Incentives I 7200Refund of App/. I
IMon~ I
Refund of BankICharges I 26981
Other receipts ITotal: \81,57,24867.48
(
CC(
C(
<-L
Ll
C
l<-
C
OUTFLOW I
.Category Amount
INVESTMENTS MADE I
Central Govt. .31,90,75140.00 I
State GovtlGuaranteedState Develop. Loans 17,14,37271.60 I
PSU/PSFI 29,70,28818.90 78,75,41230.50Current Account 90,08285.82Treasury BillsAccrued Interest 1,63,89040.16Transfer to Main Br. I
SDS Deposit I
Income Tax Deducted I 24,72665.00I
BANK CHARGES I
Transaction Fees 2,37842.00 II
Income Collection 60861.00 ,
Service Tax 14943.00 2,98703.00Misc. Charges ,
TOTAL ~1,57,24861.48
t
\.
cCr'('
CC'('
C
CCC
GCCCCCCCC ccccCccccclLLL
l
~~
'- . _._-_. ""...--- ~ - L - -- - IL
EDLI FJ.,!N~-INVE~TMENT A"OJ.,!NTIFiau es in Ruoees Croresl
As On-7 31.03.2000 31.03.2001 31.03 02 31.08.2002
1. Central Government 68.80 116.76 F1.53 198.04Securities ,
I
2(a) state Govt. 33.21 48.90 '69.18 84.35
(b) Govemment Guaranteee· 12.75 20.86 23.04 23.04Securities
3. Special Deposit Scheme 1.85 2.08 : 2.29 2.29
4 Public Sector Financial 143.85 197.20 ~57.84 277.45Institutions I
I
5 Public AccountI
2600.922205.42 2397.16 zsoo.szTotal 2465.88 2782.96 31~4.80 3186.09
,,
Details above investments made in various scripts pertaining to each category i.e. Central Govt., ,
Securities, State Govt. Securities and PSU I PSFI during __ - Aug. 2002 are enctosed as Annexure £It"
.- r r r r - r r ~ ~ ~ ~ r ~ ~ ~ ~ ~ ~ ~ ~ ~.~.~ ~ ~ ~ ~ ~ 0 a ~ ~ n~ .r- r- ~ ttl. '"" ~J( ~ '- i? - ,;-
~~ 3 c.I)
DETAILS OF INVESTMENTS MADE DURING AUGUST 2002 ( EDLI FUND )
Date Cat Coupon Particulars Maturity Face Value Rate Cost Price Accrd.lnterest Bank Charge Yield r
i
05·08·2002 CTG 10.18 LOAN 2026 11/09/2026 2,00,00000 124.65 2,49,30000.00 814,400.00 6000 7.88~
SOL 7.8 MH SOL 2012 23/04/2012 1,00,00000 100 1,00,00000.00 221,000.00 3000 7.80
08·08·2002 CTG 10.18 LOAN 2026 11/09/2026 2,25,00000 124.83 2,80,86750.00 935,287.50 6750 7.87 . •14·08-2002 SOL 12 RJ SOL 2010 26/09/2010 6,000,000 124.79 7,487,400.00 276,000.00 1800 7.81
17·08·2002 CTG 10.18 LOAN 2026 11/09/2026 2,000,000 123.95 2,479,000.00 88226.67 600 7.93r'
19·08·2002 CTG 10.18 LOAN 2026 11/09/2026 800,000 123.85 990,800.00 35743.11 240 7.94 I
28·08·2002 SOL 9.45 GJ SOL 2011 10/10/2011 2,44,56000 110.5 2,70,23880.00 885,918.60 7337 7.82 t.,31·08·2002 CTG 8.35 LOAN 2022 14/05/2022 4,00,00000 106.55 4,26,20000.00 983,444.44 12000 7.70
I[CTG: 26,51,00000 31,90,75140.00 8,089,191.60 88030I[PSU: 28,61,00000 29,70,28818.90 . 5,123,242.17 97840I[SlG: jI[SOL: 15,16,69000 17,14,37271.60 3L176,§06.39 ~1S12
~- -- <, ---
Total: 70,28,69000 78,75,41230.50 1,63,89040.16 237,842 r·
~2-
e-
oo0'nooooc:CGoCccccccc
C
L
l;!i
t ",-~ _
\
L - i..
o ~fq;~.
ifiIIIT 'JU'If.
- 400 021.: 202 0347: 2023487
STATE BANK OF INDIAdorporate Centre.
~
ame Cama Road,rnbai - 400 021.
1i 2020347: 202 3487
D.O. No.Tr ury/PMS//25::r
September 2~, 2002.I,
"
IIII
I am in receipt of your letter No. D.O.No. Invst-I/l/MON/DI/2002-03/8602 ofi18'" September02, and would like to reply to the points raised in your letter as under. I
IIIII,
It is always our endeavour to invest funds in the best available securities, within the:,investmentpattern and guidelines laid down. In this regard. you may recall that we have earlie~explained in themeetings at your office with the Actuary, that a number of quotes for various securities are obtainedfrom several counterparties/brokers before an investment decisions is made. Since ~e deals done byus on behalf of EPFO are regularly advised to your office, the same may be compared with rates
'\ mearing on the Wholesale Debt Market segment ofNSE in the financial dailies. *will be\/a~tratively inconvenient for us to appraise your office of options considered'thile entering
into each trade. I
"
~~~~~
Cffifi~~}P. K. SINHA
Chief General Manager(Accounts & Compliance)
Dear Shri Rai,
2. Loss of Opportunities :
II,
While we note your concern about generating higher returns on investments in SDl/psu/PSFIsecurities, the following points have to be kept in mind : I
iI
SOLs of acceptable States, usually fetch a return of 0.40-0.45% better than ¢entral Govtsecurities of similar maturity. This is unlikely to change radically in the near future.As advised on earlier occasions, our investment in PSU/PSFIs is now at ortar theexposure ceilings set for most of these organisations. Moreover, some of th PSUs are slatedfor disinvestment, which will reduce the number of eligible issuers further. erefore,finding acceptable investment in this category is becoming increasingly difficjult.Theposition is expected to ease somewhat after 2003, however, when redemptioris start tllk:ingplace. I
Investment in State Guaranteed paper, though yielding better returns, is notladvisable, inview of the risk attached to these papers. ~ I
The suggestions made by us last year and accepted by EPFO, to extend the maturityjceilings for TierII Bonds and SOLs have helped to a certain extent to improve the yields. Our otherlsuggestions topermit switching of securities and investing in NSCs have not yet been approved by IEPFO. Adecision on the same may be taken at the earliest. I
I,
\.. 4. We have confirmed earlier that the statement of idle funds will be submitted at fo~hdy~ intervals henceforth. Ik,'Q 5. NOD Performing assets: !
~ As you are aware, officials from our Securities Services Branch, Mumbai , together ~th officials~ " from your Bangalore office attend the hearings in the suits filed against HMT Ltd., and the lawyersJs Q.: have been advised to expedite the suits. and file a Petition in the High Court at Bangp.1.oreto restrain
sr HMT from disposing of their assets. Your office is being regularly advised of these bVelopments.r::;<'s No efforts are spared to see that the legal matters proceed in an expeditious manner.
In the case of IFCI, as you are aware, a legal notice was served on them to repay the ount{110 overdue, following which their management approached your office to discuss resch dulement of.urJ the I\tnount in default. We understand that a written offer has been received by your rffice, which is-li'~ currently under examination. ': 63
,,
3. Regarding strategy for investment of funds :
i.cii.
ill.
rrr:c:cc('
('
ccc(
(
(
c(
(
(
(
(
(
(
<-
(
(
<-
(
ccC
l
l
l
l;
\\
We had advised you, vide our letter No. Tr/TRN of 10 August. 01 and Tr/ TRNi/285 of 16October, 01 about the relentless fall in interest rates over the past two years. There has been noabatement in the fall in interest rates, as can be seen from the figures below: I
IIIIIIIII
6.Expectation of a minimum yield of!r'1o p.a. on investments :
Category Yields (OJ. p.a.)31.3.01 31.7.01 30.3.02 5.8.02 19.9.02
GOI Securities10 year14 year19 year
7.37.567.73
7.167.467.73
10.4410.8210.67
9.329.81
10.12
7.367.597.99
SOL10 year 10.54 9.5 7.69 7.79 7.7
PSU/PSFI bondAAA5year 10.85 9.36 8.4 7.9 7.37AA+5year 11 10 9.85 7.46 7.7
-
III
As can be seen from the above, all acceptable securities are currently yielding well below 9% p.a.The interest outlook is that the easy liquidity in the markets will ensure that there, no rise ininterest rates in the near term. considering which it appears very unlikely that we ~ be able toinvest in securities yielding 9% p.a. This is a stark reality which bas to be faced. Hfwever, as statedabove, it bas always been our effort to invest the funds in the best available securi s within thegiven parameters, and these efforts will continue.
With best wishes,
Yours sincerely,
fZ~(P.K.Sinha)
Shri Anirudh R.ai,Financial Advlsor & CAO,EPFO,New Delhi.
.~.
,------~-·t
I
-C'.
r:cr('
ccc
.('
c "
c(:
(
cccC\.(
(
( (.
(
(
(
(
c(
lLl-
l (
l
c.~
~
'.
Item No.4: Status Paper on 16%HMTBonds, Face v"ue of Rs. 25 crores Non
Paymentof outstanding interest and prin~ipal.i
Initially a civil suit against MIs. HMT Ltd for recovery of ~o third of the .outstanding dues
along with interest was filed in the court of City Civil Judge at Bang410re. The defendant company's
civil revision petition before Hon'ble High Court of Karnataka against ~heabove civil suit was rejected
and regular hearing was under process. Subsequently a second civillsuit for recovery of balance one
third amount along with over due interest was filed on 23.10.2000. ~oth the above mentioned suits
have been clubbed together.I
IIII
It was decided in the 63'd meetina of Finance and Investm~nt Committee that SBI shouldI
immediately file the petition for getting the injunction order from the court against sale of properties byI
Mis. HMT Limited without making repayment of dues to Central Boardlof Trustees, EPF. As informedI
earlier petition to get the desired injunction order has been filed in the courtII
On 24.6.2002. the advocate of HMT sought adjournment ~ eight weeks on the ground ofI
proposed meeting between Ministry of Heavy Industry & Ministry of ~abour for the HMT case. Our
advocate opposed the plea. the case was ,adjourned to 10-07-2002. IM/s. HMT Ud. again sought an
adjournment on the same grounds. The case was adjourned to 22.7.2,b02. MIs. HMT Ltd once again
pleaded for adjournment, which was opposed by our counsel. Our Jounsel requested the court for
early hearing of all the Injunction Applications. Thereafter the caJ was adjourned to 30.7.2002,6.8.2002, 17.9.2002 and was scheduled for 09.10.2002 along with the Irforesaid petitions for recovery
of outstanding dues. •
I
It was decided in the 68th meeting of the Finance & Jnvestm~nt Committee that S81 should
immediately file the petition in the Karnataka High Court seeking a direction from the Hon'ble Court
directing the city Civil Court to hear and dispose off the pending injunction petition within seven days.I
If required a Senior Advocate may be engaged for doing the needful in itheHon'ble High Court. RPFC
Karnataka and SBI were advised accordingly vide this office letters d~ted 20.9.02. S81 has obtained
legal opinion according to which the best course would be to explain .0 the court the urgency of theI
matter. Copy of Communication from S81 dated 05.10.2002 is enclo~.III
The ma r is accordi" I laced before the Committee for consideration.
c('
('
cc:("
ccccccccc(
c(
(
(
(
(
(
(
(
(
ll
mt 00 mw (sw ~ ~ ~ mil lfiR.!tilt ~ 'I'Pf.5<It - 4~~mil(~·~~'I'Pf.~-Securities SOMc:es Branch. (2nd I. Mumbai Main Branch Bldg ..Mumbal Samadlar Marg. Mumb i- 400 001.OR I Tetegram -SECSER B -. MUmIlai.q;);J I Phone : 2665800. 2661 S EXTN. ;)16
q;ffl I Fax: 2611924. 266103
tlRdl4\lRdlllState Bank of India
I Shri K.L. Taneja,Regional Provident Fund Commissioner,Employees' Provident Fund Organisation,Local Head Office,Bhavishya Nidhi Bhawan,14, Bhikaji Cama Place,NEW DELHI 110 066. I
~/Date :1O~tob'er 5, 2002
tL;;rr. Sfiq-iq; / No.
SSBIAGMI
Dear Sir,
SUIT FILED - HMT LTD.,
We refer to your letter No. Invest.I/3(3)951HMTNol.IlI/37974 dated he 19th September2002.
(
2. The advisability of filing a petition in the Hon'ble High Cou of Karnataka wastaken up with Shri V. -Tarakaram, our Senior Counsel in Bangalore as desired by you.However, Shri Tarakaram, has, after examining the matter advi against filing anypetition in the High Court at this stage on the ground that as the suit i already before theTrial Court, no fresh suit can be filed, much less before the High ourt, which, in hisopinion does not have any such original jurisdiction. A copy of the pinion furnished byhim in this regard is enclosed for your perusal. l'3. The opinion furnished by Shri Tarakaram was referred to 0 General Manager(Law), Corporate Centre, for his views. He is also of the opinion at no relief can beobtained at Hon'ble High Court, Karnataka. He has expressed the vi that no order hasbeen passed by the Court against which appeal can be filed in the igh Court. He hasfurther stated that Revision Jurisdiction of the High Court under icle 227 even if invogue, there is remote chance of High Court interfering in the matter. He has opined thatsuch a course of action could rather delay the progress in the matt as the High CourtwiJIgive notice to the other side and they would pray time to file cou ter and there is noknowing when the said matter will be listed for hearing. He has, the~fore, stressed thatthe best course would be to explain to the Court the urgency of the matter having regardto the fact that the claim is not made by SBI but it is the claim of th~ poor employees toprotect their PF dues which was invested with HMT ltd. I
I
C'ntd ..•.•.. 2/- I,;I,
II
I
I
crr:c:c:cc('
ccccccccccc(
(
c(
cC
ll
._ L
2
4. The suit came up for hearing on 27/0912002. But since t e Court was underdirections of the High Court to dispose of pending matters of 1995-1999, the case is nowadjourned to 09/1012002. Considering all the above aspects, we ave requested ShriTarakaram, Senior Advocate and Shri Suryaprakash, Advocate t impress upon theHon'ble Judge, City Civil Court, where the suit is being heard, to i mediately grant theinjunction restraining HMT Ltd., from selling the asset. Despite our advocates taking upthe matter strongly, wt"lenever calling takes place, the Hon'ble Judge has not so far takenup the full hearing, on the ground that he has to dispose of old oases as directed byHon'ble High Court. We shall, however, continue to press the HOJ1ourableCourt for aninjunction order against HMT disposing off their assets in the inte~est of the employeesubscribers of EPFO.
6. We note to keep you advised of developments.
Yours faithfully,
. \IIvtJ I.·
DY. GENf,.~L MANAGER..•..
\New5SB\AGM~SI89-70
(
c:co~
cc:ccocoC:
C'CCCCCCCCCC
Cooc
\ .:
(
"....,; rr
-V. TARAKARAMSenior Advocate.
.Phone: 226353~' • ~~k(STO'Code No. (80) :
o. 4; Railway Parallel Road .'umara Park East· Extension
Bangalore-S60 001 ...
(' ... .
I. I
. " '," 'r ,'ro .,. ··,,.··'tr·\' ~:n ,
!:1'II;rf. ~I(I/.! ~~~O:,;'fI::"<'~:\1:'~f~~:';:~!~~~~~?02...,I/O.l,:I:::J,,·j:.L·'JiJl • .1.'.1 ; f... ~
• • • ..' -' ',: . ! • '{'o',fl'vO'L C';J ,. VI /;-.:' (,! .. .!. ,,' •.... 1. • ' ••')( .' 0 .' .' ..•... ...... . , , .. ,
MR. N -. [email protected]<.f\~.;j.\"I'1Q;!'J'~j ;1'1;)(;,) fJ."'U.ADVOCATE,. !
KlU SiNAROAD, v IBANGAtO.RE~•.l:·ll!t) J i
II . Dear Sir, . i . . ~.;.. ~ .,
I ....J,J-...t. :'" ·~.:>;Re.:\Q.S•.4974/9'9 & 0.!S.7657/00 .: :::' ,<.'" '.';.: " cec ,-\Bangalore. I "'''./
.. -, .Centr'at 'Bo:ard 0.1': Trustees-EPF . ')
.....i . bY P.A.Holders "1.; .••Va. I
, .,. H.M.T. ~_.'--.
You have re.1'erred to je the _SUggeatien/request by pa Ity - EPF/SSIas to .1'easibility 0.1' mov~g the .HighCOl.ll,,·t;o I
As you have. already S~d, SUch courseis not Possible - by :filUlg any originalPe~ition or ot~er procee4ng since thema'tter i a Pending bei'ore 1rial Court(City Civil Cou~t -)as o:f Inow .1'or
consi~erat1on o:f a:6 apPlibations':.lii·cluding ;".Plainti1',f'J S application :fOr'appropri.:clteinterim di~ection.
,
Since SUit is already tiled noItresh suit· can be :filed on: the srune caUSeI
0:£ action, muchless bei'o~e ithe High Coul't' i
. :'i..,
.. j
P.t.ib
• 'I.
n('
o('
coccOccc-Occc(
(
(
(
c(
(
(
CllLL
. :
~\0~t-:· ': .: ;- !. .:
.', .
:
.,.i.fi~~j:·:,. ,"'
I
1 ' .e • '.:'
------..w--
" ': ,'.: : ~: !".: ~ t ( I' ::! '0: 1J!f.V1A~AAI\T ,v
r
I"
'.,: ' ..
. . .,.f ... :.
ri>;~jt:.I.' . :..:•.
.:',
I' : ".f •i1,
I,i .'!
i'I
I'
:>. . '.~ ,
•• ,0 ••••.
r : to:: I • : i {I!h'~") t J I .•
·':·,'Ji r·~h'i····( ...{I:".· •• i••::i.t. \~!·I." ';,"",;'(:.1 i..I .• ·: ·!lIir.r ,,"al'":'~In:} n;'~~:"·c':',!:,H/f
2
IJ •,.11'-..1i
. . .', ~"
I '.: ..i~.
s ", •.:. .','" .~.': .
.:
.~
\
'~d:1 (WI oJ'r,':-' \ .;.•'~i -.. ; .•. .t•••• , I•.
t :~~·.U-l~!!ij
I'
,(.
':,:I.l ~~)fi.h~ln':.b!'1 ~"! "O'I'! '!,.•l!j () ''10 11' l.J J.:t!:lj:J'lJ..!I.)~ .[nj:l'l' r.T)'.\.!:lf ~}N.UJ/1'lq n.t 'lOjj'-GflI .
'j()".1'.'10fl ',te ;:::J- ~r'JI.'O~) .U'd.'· 'lJl~), .., '.' ,..;.;: ".,', ,':J .. ,' . r", . r r , . ", , s . / ,.,. ~ j" . ••... ,I.I·I/ __.,}CI.~ .,.1.1 .... J» • .I.... 1 JI. " ..... ', .. rro.i: "I!) '.<./.IC,=>
" . • .' . I' .,.!JJ)'J.!tF'·I.I~q/.~ '10.1. 1/(I.!.:I .•.::·J.J.q:V :J,.IJ:l.1:'fjJ.t;lq
....:, .J'io".:;~·'·lJ.b w··,··.dICt.
on k),U:.I:.\.\:bil:J'lJ ..~·;i~.i. :J j.l':--' (J~)!1\';;~,:,,:1/':::- ~W'J~0:f r'l1:1 (:\i 1'0:"11.1:1. '':'1.1 ruo j ,ilJ~: rk~~'11;:'jtJ("'~1 1!.'l.1I! Drlj ~no'J.~;': :'.~'·,Jd~.I/l/;1,1101" on 10
o . .i.q \ .
III
\
....
zroo(098~WO 1>'17:00:00 lZ:11 j7T-(~;'ISI
S!iS{JUi1II!O u()!1I!lIl(J r &rrIT mTI(f
1U'15 10 )10".
5\TXI s.):'Illd
,"
PUil19ZZw,
.U')!IH.)!J !IU"PI
LL: 1I ZO-P L·d~SPS'8£l.ll080
OH'L tH.lO'IVDNVH U~Ol.lUJ lJod~lI dO'1X~d
.J;)~dO;)/XP-~_iP!UOS.I<'IdOOS-XV!! dB
j
.,!
""
rc.....,
Lll
l"
C
c{
- jjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjj
J
Item No.5: .Appointment of Portfolio Auditor regarding Au it of the
Investment Portfolio managed by the State Bank of In ia, Mumbal
for the financial year 2002-03.
All monies belonging to the Fund shall be deposited in the Reserve Bank Of I dia or the State
Bank of India or in such other Scheduled Banks as may be approved by the Central tovernment from
time to time or shall be invested, subject to such directions as the Central Governme t may from time
to time give, in the securities mentioned or referred to in clauses (a) to (d) of sectio 20 of the Indian
:rusts Act,1882 (11 of 1882), provided that such securities are payable both in res~ct of capital and
In respect of interest in India.· II
IThe work relating to investment of EPF money which was being handle1 by the RBI up to
31.03.95, was entrusted to State Bank of India, Mumbai w.eJ. 01.04.1995. The irvestment of funds
belonging to EPF, Pension fund and EDLI Fund, SPF and, EPF staff pension and/gratuity is done byI
the SBI, Central Office, MumbailSecurities Service Branch, Mumbai. II
The investment made by the SBI on behalf of CBT, EPF are audited by the inspectton and
audit Wing of the SBI periodically and also by its concurrent auditor on day to 1ay basis. Apart from
this statutory audit by the authorized Chartered Accountant Firm is also conduct d periodically.
In spite of the internal control and audit mechanism of the SBI it has en noticed that there
have been cases of delay in collection of interest and maturity proceeds an other dues from the
issuers. The consultant Actuary also pointed out several cases of deficiencies i the functioning of the
investment manager. Finance & Investment Committee in its 50111 meeting ecided to appoint an
independent portfolio auditor for the audit of investment portfolio manag by the SSBof S81
Mumbai. Accordingly MIs. Bhadra & Co. Chartered Accountants were appoin as portfolfo auditors
whose term has expired on 31.3.02. The appointment of the portfolio Audit r, MIs. Bhadra & Co.
was ratified by the C8T,EPF in its 154111 meeting. MIs. Bhadra & Co. place A dit Fee amounting Rs,
1,00,0001- plus other expenses on account of TNDA and out of pocket ex nses was being paid to
MIs. Bhadra & Co. Audit reports of MIs Bhadra & Co. were placed Finance & InvestmentCommittee.
\
I
For appointing Portfolio Auditor for the year 2002-2003 the comptr~lIer & Auditor General of
India was requested to send the names of reputed empanelled Chartered tccountants firms vide this
office letter dated 16.04.2002. In response to this letter, the C & AGs dffice forwarded the namesI
of 12 Chartered Accountants firms based in Mumbai. Vide this office lettrr dated 15.07.2002, these
Chartered Accountants firms were requested to send their expressi01 of interest detailing their
technical qualification and experience in the audit of the investment! portfolios. EPFO received
expression of interest from 9 Chartered Accountant firms (list enclosed). These expression of interest
were opened and processed by a Committee consisting of RPFC (F A) RPFC (Investment) and
Assistant. Provident Fund Commissioner (Balance Sheet). On evalu tion of the 9 expression of
interest received, the Committee has found that MIs. Batliboi and Purohit has fulfilled all the
conditions laid down in this office letter dated 15.07.02.amd the ame has been approved by
authorities MIs. Batliboi & Purohit has quoted the audit fee@ R . 2,49,r5001- which includes
RS.22,OOO/- for the audit of the Calcutta High Court account. It is to mentioned here that Calcutta
II
I
!!
\
c:c:("
rrrcc(
i(
(
(
C r
{.
High Court account is going to be closed and the balance is going to e transferred to account no. 5
very shortly. As such there will be no need to audit Calcutta High Co rt account separately for .this
year. Mis. Satliboi & Purohit may be asked to reduce Rs. 22,Ooo/-fro their quoted audit fee. Thus
the annual audit fee payable toM/s. Batliboi & Purohit will be Rs. 2,2 ,500/- inclusive of service tax
and out of pocket expenses incurred in Mumbai. However, if auditors are required to travel outside
Mumbai for audit work, out of pocket expenses will have to be reimburi in addition to the audit fee.
The proposal for appointing Portfolio Auditor for the year 2~2-2003 is placed before the
Finance and Investment Committee for consideration. The recommendation of the Finance andI
Investment Committee will be placed before the Executive committel' of CST, EPF for ratification
and financial sanction.
I'
r
l
l(1...
l- :\"--J.1NINVI\1I·-'· •...\,.·, ~I •.~••" •• 10'1 I ~ Ifll}-"" •..•" "').1••
t>
0
nnnno()
tJ',
cC
GIsC('
CC
C()
()(I C
(
(
(
C(
L
l
'---
"
Re ort of Tender Processin CommitteeAuditors
For Evaluation Of
Tender processing Committee (TPC) consid red nine tenders regardingExpression of Interest received from prospective portfo io auditors out of which threetenders of MMNissim & Co., Vyas & Vyas, and M/s Har Bhakti & Co. were reportedlyopened in the secretariat of FA & CAO inadvertently ~ut were kept in safe custodyalongwith other six tenders. TPC op.ened six tenderS\and considered all the ninetenders after signing on each page. -
II
Although bidders have specified the experiencer concerning various types ofaudits, TPCconsidered it fit to give weightage to experience related with Investmentsaudit. In statutory audits, categorical pinpointed audit Iof investment transactions isnot done, rather main emphasis remains on final accounts i.e. Profit & Loss accountsand BalanceSheet of the establishments. It is obse ed that while inviting thetender, it was specifically required in the letter tha prospective auditors shouldfurnish documentary evidence to substantiate their exp rience about audit of portfoliomanagers handling yearly investments in Govt. Securi res/debts of above Rs.. 1,000Crores. As evident from the enclosed comparative cart, Khandelwal Jain & Co.quoted the lowest fee amounting to Rs. 189000 out of bids but did not furnish thedesired documentary evidence of related experience.
Only two firms, namely, Karnavat & Co. and !:atliboi & Purhohit furnisheddocumentary evidence in support of their claim regarding experience of investmentaudit. After going through all the Expressions of I terest, TPC considered thatexperience is of utmost importance and bids of all th
ffirms of C.A.s who COUldn't
furnish the documentary evidence as desired in is office letter No. Invst.1/1(34)99/Audit/Vol. 11/22646-657 dated 11.7.2002 calli g the bids, may be rejected.
Accordingly, bids of Karnavat & Co. and Bat iboi & Purohit were furtherevaluated wherein audit fee of Rs. 2,95,000/- + service tax of Rs. 14,750/- and Rs.2,4Q,500/- respectively has been Quoted. Lowest btddar out of these two bids isBatliboy & Purohit who has quoted separately in respect of EPF,EPSand EDLI, StaffPF, Pension-cum-Gratuity fund and Calcutta High COU~'Account. For calcutta. HighCourt Account, TPC was informed that this account i going to be closed. Hence,matter may be taken up with them for not charging fe of Rs.22000/- as quoted inthe bid on account of Calcutta High Court Account. I M/S Batliboi & Purohit wasestablished in 1907 as per their bid and has furnished the documentary proofregarding experience related to investment work. It is recommended that M/S Batliboi& Purohit may be the prospective portfolio auditors. :
I,
~~-\~ -,o'f"WOC!
K .'--:-: aneja IMember I
I
I
\
A.~9hM!~r Rajesh BansalMember
r . ~ ~ n n ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
"- ,- \
, COMPARATIVE CHART AS PER EXPRESSION OF INTEREST'.'
~.Year of ICAI Regn. No. of Whetf1er Experience claimed regarding portfolio audit in Audit Service Local Travel51 Name
No. inception No. partners documentary respect of clients ~aving portfolio of more than Rs. fee (Rs.) tax conveyance outsideevidence to 1000 r.:rores(Complete list of experience is enclosed extra, if Mumbal
FCAs ACAs substantiate with bids) anyexperience is (Presentfurnished rate of
which is5%)
1 M.M. 1.10.1946 107122W 7 Nil No i) Indian Bank 2,50,000 125000 - OnNissim & ii) Dena Bank actual.Co. iii) UTI Bank (concurrence audit of treasury basis
operation from April 99-2002)•
2 Vyas & 1972 590C 7 Nil No i) Statutory audit of treasury department of SBr 4,00,000 Consolidated aU inclusiveVyas ii) Central Statutory audit of New India Assurance
co. Ltd. and State Bank of Maharashtra. StateBank of Blkaner & Jaipur
iii) Statutory audit of DICGC - a unit of RBI
,
3 Hari Bhakti 1954 062937/FRN 9 2 No i) Statutory audit of LIC 5,00,000 25000 Nil Nil& Co. 103523 Ii) Concurrent audit of Corporation Bank's Treasury
operationsiii) Vijay Bank & Bank of Baroda's concurrent audit
of treasury operationsiv) NABARD's treasury operations
-------~- - --- -------------- ---- ---'
f------ --------- --- - ----------- 1------
4 Karnavat & 1972 FRN 8 1 Yes (reg. Dena Dena Bank Investment department 2,95,000 14750 Nil NilCO. 10486300 Bank) Statutory audit of State bank of Saurashtra & New
India Assurance Co. Ltd.--- --- -- -- - - -- ------ -- - -1~ ~.
~
.. ...••
r' " r >; r>. r---. "'"" r""\ '1 '1 '1 r""\ '1 '1 1 1 1 )).) ') ) ')
,- . '\.
,r Khandelwal 1.7.1967 105049WIRC 9 - No i) Central Statutory Audit of Bank of Baroda, SBI, 11,80,000 9000 Nil Nil,Jain & Co. Central Bank of India and Dena Bank. ICICI,
NSE, ID3I, SIDBI, SICOM, UC, New IndiaAssurance Co.
iI) Audit of Portfolio Management Services of IndusInd. Bank Ltd. but claimed without anydocumentary evidence.
6 Chhajaed 1.9,64 101794W 6 4 No i) Central Statutory Audit of Bank of India, RBI- Not -& Dashi Calcutta, Bombay main Byculla, Ahemdabad; specified
Central Bank Of India, State Bank of Saurashtra.ii) Mutual funds of UTI, Morgan Stanley, BOl and
'SB1. Size of funds of Morgan Stanley & BOl were910 crores and 772 crores respectively.
7 Shah 1.3.76 109574 8 - No Central statutory audit of Bank of Baroda, Bombay 2,25,000 11250 Nil NilGupta & Mercantile Bank Main co-op. Bank, Central Bank ofCo. India & Bank of Maharashtra.
8 Batlibo;& 1907 - 5 - Yes (only Reg. SBI i) Central statutory audit of SBI including an 2,49,500 Including fee of Rs. 22000/- for,-? Purohit Gilts and BOB assignment about Its treasury & Investment Calcutta High Court accountMutual fund which department, RBI, Bank of India, Bank of which is now being merged withis apparently Maharashtra, Central bank of India. Miraj State Provident Fund Account.related with Bank Ltd. And Bank of Baroda.investment audit ii) 88 schemes of UTIexperience)
9 NB Shetty 1976 110100 7 - No Statutory audit of Discount & finance House of 2,50,000+ out o.f pocket expenses on&CO, India, UC and PNB. actuals
.--- ~----
~- --------------
~~J:~~h K.L.II
i
~jlI{c\,
. 4
~
(
~'-~.A
Rajesh Bansal
Member" or;.:::M<~
I '-i~
- ...----(\
c:c:c('
c:cccc(
cC(
C
C(
C
Item No. '= Business Process Re-engineering - Cost B nefit Analysis
(,-
The Finance & Investment Committee, Central Board of Trustees, EPF in the 68th
meeting held on 16.08.2002 had considered a note on the COFt Benefit Analysis of the
Business Process Re-engineering Report submitted by'the consiltants to the "Re-inventing
EPF, Indian Project viz. MIs. Siemens Information Systems Ltd. <fISL). The Committee had
in its deliberations also considered the recommendations 0 the Sub-Committee on
Information Technology Reforms in this matter. The Finance & I vestment Committee after
going through the cost projections, benefits and princlples ofthe p~oposed Business Process
Re-engineering for improving the work processes was of the vieJ that the Reinventing EPF
India project was finanCially viable as its Financial Internal Rate ot Return was between 20%
to 30%. The Committee unanimously recommended that the BAR should be implementedII
as a whole for making the EPFO a world-class organization delivering best possible servicesI
~~m~~~ I
I
2. . The observations of Finance & Investment Committee a1d the note on cost benefit
analysis were placed in the 40th meeting of Executive commlttee heJd on 21108/02. TheI
Chairman, Executive Committee, CBT desired that the note bf examined by the broad
based IT Sub-Committee for its approval. Accordingly, the note w s placed before the broad
based Sub-Committee on Information Technology Reforms in its 10th Meeting held on
04.10.2002. The IT Sub-Committee after deliberating on all aspe s of the Business Process
Re-engineering (BPR) Report and its ramifications on all aspects f the Business processesI
with the consequent improvements and benefits that would acc~e in the form of scientific,
secure and accountable processes and methods, was of the junequivocal opinion that
accepting and implementing the BPR Report in its entirety was th~ only logical step forwardI
for the Organization to realize the goals mandated for it I
3. In the light of the foregoing turn of events it has been felt necessary that before
placing the matter before the Central Board of Trustees, EPF th+ note on the Cost Benefit
Analysis of the Business Process Re-engineering report bel placed again for a re-
examination and qdditional comments and recommendations. if ahy.I
4. The Finance & Investment Committee may consider and approve
l' I 1,r.;Y\1Fi"'.F.\" I I\'rrlll ••·"q , .. "lIr","'''rt.w: .~,.
ccCrC
c(
((
c(
(
(
(
(
(
(
(
(
cCr~
'-
(1 )
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11 )
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21 )
- - _ ..
COST BENEFIT ANALYSIS OF IMPLEMENTATION OF ROPOSED BUSINESSPROCESS RE-ENGINEERINGUNDERTHE PROJECT
"RE-INVENTING EPF INDIA"
Payback period will be 5 years.
Financial Internal Rate of Return will be 20%;
Benefit delivery within 2 t03 days in respect o~ all the claims,' which are
complete.
Reduction of infructuous withdrawal of about 300 crores.I
Savings to the extent of 25 crores by reducing the !Inumberof returned cases.• I
Identification of loss under Section 14(B) in tlme.and collection, which can be
estimated to be Rs. 40 crores. 11
Levy of 7Q interest in time leading to improved evenue income by Rs. 25II
crores.
Increase of 400% efficiency grading in customer s tisfaction level.
Efficient fund flow management and savings of I ss on account of pipeline
money and withholding money.
Reliable data security and minimum frauds.
Any time anywhere access.
Updation of members account on real time basis.
Highly effective grievance settlement machinery.
Transparency and provide public confidence if the institutions of the
Government. ' .
Information driven coverage of all coverable establIshments.I
Real time default detection and follow up action th1reon.
Long-term savings on telephonelfax.
Enhancement of handling capacity manifold. \
We can think of giving more benefits to the member and also reach the new
areas. !
Prevent any contingent liability to the Government. I!
Better equipped to provide reliable database in !Iformulating
making decisions for the national labour market. I
policies and
.'- /~..J 1--./ v..
- ., . -- .~
(
('
t:
('
r:c:c:cc:crccc(
(
c(
(
(
l(
C
r
COST BENEFIT ANALYSIS OF IMPLEMENTATION OF ROPOSED BUSINESSPROCESS RE-ENGINEERING UNDER THE ROJECT
RE-INVENTING EPF INDIA
BACKDROP
(
I
I
I
1. The process of computerization was ushered j. the Employees' ProvidentFund Organization in 1989 at Regional Office, Maharashtra b ta.king the task of accountspreparation on computer. The thought process to bring change to improve the service areawas initiated in 1990 by addressing the issue of protecting he interest of migrant andperipatetic workers. The matter was discussed as supplem ntary item no. 1S of 12Sthmeeting of CBT, EPF held on 07.12.1990. The Chairman, C1deSired that some systemshould be devised by which our subscribers specially those no belong to un-organisedsector like migrant labourers, brick-kiln workers, building indust workers, home workers inBidi industry develop confidence for keeping money in t~e Provident Fund for thewelfare of their families. The CBT in its 12Sthmeeting apprO!d introduction of passbookfor this category of subscriber in consonance with the directions f Supreme Court of India inview of Civil Writ Petition filed by Construction Workers' U ion of India. Though, thepassbook was introduced vide amendment to para 47 of the ~PF Scheme, the passbooksystem has not taken off due to operational reasons. I
I
2. After partial computerization of accounts pre aration work, other majoractivities of the Organisation viz. Cash Receipts and Pay nts got computerized bydevelopment of Application Software Packages like CAPS I AMPS, CPAS, CRAS andPGHS. In respect of Employees' Pension Scheme introduced i 1995, a part of the processhas also been taken on computer. Over the years, the compu r systems were installed inthe field offices. Head Office and National Training Academy of Ithe Organisation.
3. The past computerization efforts did not lead td .leveraging benefits of thecomputerization because the work was done on batch pr~ess mode. No relationaldatabase was created. None of the software program talked tq each other. There was nosecurity to data. as the data can be manipulated by anyone in thl EDP Cell without any audittrail. Most important shortcoming was that the initial combinat on of Unix 2.0 version andFox base was never upgraded, a combination. which is not sup orted now. In a way EPFOmissed the PC revolution of the 90's and did not undertake a te hnology upgradation and isa prisoner of an old archaic technology.
I
4. Realizing the evolving needs of the organisatio~and the desirability of theintroduction of computerization in all the functional areas of the rganisation, the ExecutiveCommittee, CBT, EPF in its 24thmeeting held on 22.10.1997 pro osed to undertake a "Totaland Comprehensive Computerization- project. This was en isaged as a turnkey projectto be implemented by a reputed Information Technology Agen~t In the first phase, it wasdecided to implement the project in five regions viz. Delhi, Ma~arashtra, Andhra Pradesh,Tamil Nadu and West Bengal. I
II
S. In the so" meeting of Executive Committee, csr, EPF held on OS.03.1999,the concept paper on Permanent EPF Number of the EPF members was placed before thecommittee and agenda item was recommended to be placed fo~'consideration of CST, EPF.After deliberations in the 1S0thmeeting of CBT, EPF held on 06. 3.1999, it was decided that,as recommended by Executive Committee, CBT, EPF on OS. 3.1999, a permanent EPFnumber to EPF members may be issued along with Photo Identity Card.
!I
6. The Executive Committee of EPF set up a Multi DiSCiPlinfry Expert Committee in thearea of information technology and business process re-engine ring. This Committee wasassisted by cross-functional experts in Pension compliance, PF lairns, Finance & Accounts.
~. "'l"l.:~Y\lFI'F.1<1 \I~ •.I""·"" " \.., " •." •.", f.-.I .1•••- _ .. " ..' ...- .~ ..~ '-r ';
- •('
rc:C'C('
CCCCCCCCCCCCCCCCC
C
..•.
The Committee was to lay a road map for implementation of T reforms in EPFO to realizethe goals set by CST and Executive Committee. The Multi isciplinary Expert Committeeset out clearly measurable business goals under the project ~ r IT reforms. This report andimplementation road map was accepted and approved by th Executive Committee in its33rd meeting held on 14.03.2000. As per the recornmendat ons of the Multi DisciplinaryExpert Committee and by following extant instructions in this regard. tenders were invitedand the contract was awarded to M/s. Siemen Information Sy ems Ltd. as a Consultant tothe project named "Re-inventing EPF India". The identified po icy goals or the project are asfollows: -
• To establish a turn around time of 2-3 days between the receipt of claim and theissue of a cheques.
• To provide the facility of preferring claim anywhere.• To provide Unique Social Security Number to every me~ber.• To establish information led system of responsible enfolcement. This will focus on
I
Improving voluntary compliance and checkin~ non-reporting and underreporting of employment strength; and I
ii. Reducing compliance/representation costs for thr employer.
• To establish an adequate Information System bench arked against best globalpractices for Bookkeeping and Accounting.
I
The above goals are to be realized by comprehensive computerization of the re-engineered business process. J7. MIs SISL completed an important phase of th project "Re-inventing EPFIndia" with the submission of SPR Report. The SPR Repot has een accepted "in principle"by the CST in its meeting held on 8.7.2002. It was further ecided that cost and otheraspects of implementation of BPR with reference to hardware b brought out before Finance& Investment Committee and Executive Committee.
i.
8. It may be recalled that the CST in its 125th mee ing held on 7.12.1990 hadcalled for developing confidence for keeping money in EPFO specially by the workers ofunorganized sector. The Executive Committee in its 24th me ting held on 22.10.97 hadgiven the mandate for 'total and comprehensive computenzanori'.
I
WEAKNESS Of THE CURRENT SYST M
9. Notwithstandingthe periodical reviews and increment' changes/improvements,theeXisting work processes in EPFO have admittedly outlived their rpose and are found to betoo cumbersome and inadequate to drastically lift the service lev I standard of the EPFO. Asagainst this, the fast changi'19 external environment demands tha the service/benefit deliverystandardsof EPFO be drastical,y enhanced. The major pain areasof e existingwork processesinEPFO.
•
The benefit delivery mandate of 30 days is not aC1ieved in respect of a greatnumber of claims.
The Updation of member accounts takes place wit a lag of one year; furtherthere is considerable backlog in respect of this act vity.
• The coverage process is very subjective and n t driven by any scientificinformation.
•
("
c:c:c:cccccc(
cccc(
cc.(
c(
(
(
Cr
r,~.
-• The process of default detection and follow up ctions thereon have become
too ineffective in the result that a significant nu ber of defaults go unnoticedfor a considerable period of time.
• The grievance redressal process does not inspir any confidence.
The existing technology application is not hollst tc in its approach and moresignificantly not preceded by any re-engineering of the existing process.
The loss on account of pipeline money from colle tion points (Base branches)to link branches and withholding money in link br Aches awaiting cheques forclearance was estimated to be above Rs. 50 croJes a year.
The conflicts in each work area have cascadin effect in bringing down theefficiency of the organization. '
I
II
10. . Therefore, there is no option but to change ihe current inefficient workprocess to an environment, which addresses building confiden e among low wage earnersand unorganized sector workers, and to have total and com lehensive computerization.The above objectives can be realized only by implementation 0' BPR report.
I
I
•
•
•
OPTIONS
dures with marginal and
11. Now the EPFO has two options before it:
• To continue with the existing workperiodical improvements; or
• To accept the BPR and go ahead with th project, full stream.
12. As far as the first option is concerned i.e. to conti ue with the existing systemthe immediate requirement is additional manpower because wit the increase in workload itis very difficult to achieve a turnaround time of benefit delivery even the current mandateof 30 days.
, I13. Another aspect is that EPFO is subject to consurers, Protection Act. whichcalls for timely settlement and services. As of now there are ab .ut 1500 cases pending invarious consumer courts on account of service deficiency.
14. Additional manpower and' consequent pay a d allowances, pension.overheads like office space, consumables etc. have been factor d and it is estimated to beRs. 49.53 crores a year.
15. Even after creation of staff there is scope only for marginal improvements inthe existing work processes. Empirical evidence shows that any amount of influx oftechnology without re-engineering would be futile. Any kind of ma ginal improvements in theexisting work processes would not bring down the turnaround tirn of benefit delivery below30 days even with the additional manpower. It would be extrem Iy difficult for the EPFO tooffer any new products to the working class with the existing work processes and technologyapplications. Updation of members account, real time acces to the members to theiraccounts and efficient grievance handling will never be possible. he external environment.specially the growing awareness and consumer conscious ess and the enhancedexpectations of the working class, would not be met.
()
c:r:t:c:oGoCccccccccccccr.c.CCC
••
14. In the event of the EPFO opting for the firSt ch Ice i.e. not to implement theBPR through ITenablement, the following would be the impJi tions:-
15. The other option available is to accept the BPR a d go ahead with the projectby converting BPR to full production environment. The cost of i plementation with regard tohardware requirement has been evolved by MIs. SISL (Annex re B). The budgetary costhas been broadly classified as cost of setting up a National C mputer Centre for SSN aswelt as for other applications, cost of setting up six pilot center , cost of going live with thepilot centers as well as EPFO, full blown with all ROs and SRO going alive and a full blowdisaster recovery center. By pilot centres, it is meant that impl entation in these centreswill be executed by SISL as a part of this project. The implem ntation in other offices is aresponsibility of EPFO. Unless all the offices are fully network d, the potentials of projectwill not be fully realized. It is ctarified here that there is a concept of piloUpartialimplementation of BPR. \
, I
COST OF IMPLEMENTA TION OF BP1
I
16. The hardware cost has been estimated to be at ;'S.17 4.35 crores by SISL.However, SISL has pointed out that these prices are listed price The industry standard inhardware marketing is that the prices are discounted by 25 to 3 %. Assuming that we areable to secure only 25% discount, the estimated cost of the hard are is Rs.130. 77 crores.
,-,
r.~
:>
:>
:>
t:;
Additional staff sanction to handle the curre t workload amounts to anadditional burden of Rs.SOcroresper year 0 account of pay, allowancesand other overhead costs.As there is hardly any scope for. drastic improvements in the existing workprocess the turnaround time for benefits deliver~d cannot be brought down tobelow 30 days. \The EPFO may not be able to penetrate into the unorganized sector and hasto resort to previous form of compliance secunnq which stipulates street levelinspection through inspectors. \
It would be extremely difficult for EPFO to offe new products like multiplebenefit schemes to the working class in the pres nt setup.
As there is no added value to unique identity number in the absence ofcentralized database, the program has to be scr pped.
Under the existing work process, there is scope only for marginal growth inthe subscriber base. Geometrical growth is not a hievable.
The FoxBASE application, which is used curren Iy has no data security andintegrity thus leaving enough scope for manipul tions. The computer basedaccounts and cheque-writing procedures are enti ely unprotected and porousand open to any manipulation. This exposes he Organisation to seriousfrauds and scams with no safety checks. Furthe the latest version of UNIXoperating system does not provide support for F BASE. Also, the FoxBASEversion currently used is neither serviced norava table.
17. SISL has made it very clear that the above cost auld be exclusive of civilwork. VPN cost, the link between primary site and disaster ecovery site etc. Theseassumptions can also be seen at Annexure B. It is not out of p ace to mention that thesecosts normally form a capital cost in terms of civil work, reven e expenditure in terms, ofconnectivity, office furniture cost etc. which are normal ongoing e penditures.
••c:c:r:r:ccccrcc(
cccccc(
(
(
(
(
<-(
(
<-
l
9ENEFITS OF BPR
18. In the event of EPFO opting for the BPR exe ise, the following will be thetangible benefits: -
D Information driven coverage of all the coverable Establishments.
D Real time default detection and follow up action hereon.
D Benefit delivery within 2 to 3 days in respect of all the claims, which arecomplete.
D Scientific accounting of the monies based on the established accountingstandards.
D Updation of Members account on real time asis and real time accessconvenience to the membersto their accounts.
D Efficient fund flow management duly taking adva tage oftechnology availableand saving of loss to bank on the 'float'. '
D Long-term savings on telephone/fax. This wou d reduce the impact on themiscellaneous expenditure. I
D The settlement of claims, which includes 80% eSignation cases, would bereduced substantially with the introduction of 5.5. . This would reduce the infructuous withdrawal of about 3090 crores,
D Highly effective grievance settlement machi ery. With the reduction ofnumber of claims, the number of grievanceswill c me down.
Q Savings on the cost of returning claims to the t ne of Rs.2Scrores.I
[Assumptions: a) Two thirds of 9.62 lalchclaims af< returned due to inadequate" information.
b) The cumulative cost to th Organisation in returning aclaim is Rs. 4001-per case.]
Q Efficiency increase by 900% with target ti e of 3 days for claimsettlement.
[Assumption: All the cases are now being settled in
D
lJ Increase of 400% in efficiency grading in term of customer satisfactionlevel.[Assumption: The customer satisfaction le-velofth Employees' Provident FundOrganization can be graded as 2 on the scale of O. It is expected to rise to 8on the same scale with the substantial improveme ts in the service delivery inthe proposed Re-engineered Business Process.]
o The statistics/data presently available can be reIed upon to a small extent,which can be graded as 1-1.5 on the scale of O. With accurate databaseproposed in the Re-engineered Business rocess, the reliability ofstatistics/data is expected to rise to 9 on the same scale. In such scenario, weshall be able to sustain the scheme using sci ntific approach and takecorrective measures as and when the prob ems surface. This wouldprevent any incorrect actuarial evaluation due to i accurate statistics/data andconsequent contingent liability to Government. If een in the light of recentUTI episode, any such eventuality, apart from ost to government, leadsto loss of faith in governance, which cannot b quantified. This has verygreat value.
\~) 1
I
" ..,,,1'\\ '\fvrl·.\·III.t •••.••••••••••••I ~ h' .\~ I••.••• "'J.I.""
rcrrcrc:(
(
(
(
(
(
(
c(
c(
(
(
(
(
(
(
(
(
<-
l
-.a Anytime anywhere services will reduce the cost to the subscribers, as they
need not visit the office where they are registered and the records are kept.
o Since the subscribers can have access to his acc unt anytime, this would leadto transparency and provide public confiden e in the institutions of thegovernment.
a Enhancement of handling capacity manifold.
o Labour market movement, gender, occupation/industry wise labour data, joband wage profiles etc. will get created as a by product for strategicmanagement and for policy evaluation, formula ion and for research.
o Same exponential growth in manpower and attendant costs.I
I
19: The intangible benefits, which cannot be quantified.in financial terms, would bythemselves justify the option to go for the BPR The cost b nefit analysis of the existingsystem vis-a-vis BPR can be summarized as below: I
I
INTANGIBLE IMPLICATIONS I:
ON CONTINUATION OF THE ON A[ OPTION OFEXISTINGBUSINESSPROCESS REENGINEERID BUSINESS
PROCESS.-------.------" -- .---;-:----:----:-:-:--:-:,...-l- By increasing work force man - We can mana; e the workload with themanagement and IR problems will existing staff stre ngth.continue.- We cannot continue to run thebusiness in the old manner andsimultaneously reach the unorganizedsector.
- We can think 01giving more benefits tothe members ar d also reach the newareas.
r - With the increase in workload, the - The MIS rej orts and data can bemanagement of record will be a problem electronically stc red, reliable and freearea in the near future specially in the from manipulation.Pension related areas.- The inadequate statistical informationwould affect actuarial evaluation andmay lead to contingent liability toGovernment.- As there is hardly any scope fordrastic improvement in the existing work
" process the turn around time for benefitdelivered cannot be brought down tobelow 30 days. We will not be able tomeet the aspirations of the members/beneficiaries.
- With accurate ala we shall be able tosustain the sc eme using scientificapproach and ta e correctivemeasuresas and when the problems surface.- Benefit delivEry within two to threedays in respect ~f all claims, which arecomplete.
- The present database we have is of - We can have reliable data securityno security to data and highly and frauds could be minimized.susceptible to change and fraud. In viewof growing white collared crime etc. it isessential to provide adequate securitylevels to the database and also to put inposition audit trail, which can pin pointthe changes if any, authority level etc.For this purpose we have to migrate to asafer environment, which will be with acost.
I
"' III
./L ...
(1
("
r:r:c:('
crc.'cC
cccccr(
(
(
(
(
(
(
(
C
l
.,--
- Members are required to interface - Member.: can have any timewith the Office in which they are anywhere servtce. This would reduceregistered and their accounts are kept. the cost to the Sl bscribers as they need
not visit the cffice where they areregistered and the records are kept.
- The updation of members accounttakes place with a lag of one year furtherthere is a considerable backlog inrespect of this activity.
- Updation of m mbers account on realtime basis an~ real time accessconvenience to the members to theiraccount.
- Grievance Redressal Process does notinspire any confidence.
- Highly effective grievance settlementmachinery. With the reduction ofnumber of cia ms, the number ofgrievances will come down. Also sincethe subscribers (an have access to hisaccount anytime, this would lead totransparency and provide publicconfidence in tI e institutions of thegovernment.
1
- The process of default detection withfollow up actions there on have becomeI too ineffective in the result that
; significant number if defaults goi unnoticed for a considerable period of; time.
- Real time defa ~Itdetection and followup action there o~.
\
i-The coverage process is very - Information dri'fen coverage of all the,i subjective and not driven by any coverable establi hments.i scientific information. •
FINANCIAL IMPLICATIONS
ON CONTINUATION OF THE ON ADOPTION0;.; RE-ENGINEERED.EXISTINGBUSINESSPROCESS BUSINESSPROCESS
r'---
(
• Capital Cost - Rs.22.41 crores • Capital Cost ~s.130.05 crores
• Running Cost - Rs.49.23 crores· Running Cos (AMC) Rs.17 croresapproximately.
The cost of civil works is roughlyestimated to be R s. 60 crores.
The cost 0 SSN card is notfactored. But CET, EPF has alreadygiven the manus te to EPFO to Issuecards to its subscribers.
The cost of VoJAN is to be taken asrevenue expenditure but the actual costis roughly estirr ated to be Rs. 20crores.
• On connectiv ity, this would lead tolong-term savings on telephone/fax.This would partly reduce the impact onthe mlecellaneous expenditure.
• The implied s~vings resulting fromthe implementati :>0 of BPR can bededucted from the cost after thecompletion of second year, as follows-a) The saving of Rs. 50 crores on
pipeline money & withholdingmoney.
• Conversion from UNIX and FOX •base to an alternative systemwould cost approx. Rs. 15 crores •
•
(~'";J',_,.)__S
crr:cccrr:ccc(
(
ccccc(
(
c(
<-(
(
<.
- - -
••
b) The savin~s of Rs. 25 crores onreturning c ~ims.
c} The identi cation of loss under14(8) and collection of approx.Rs. 40 crores.
CUMULATIVE EXPENDITU ~E
PERIOD EXISTING RE-ENGINEEREDBUSINESSPROCESS
After 1SI year 86.64 crores 140.51 crores*
After 2no year 135.87 crores 231.68 crores*"
After 3rd year 185.10 crores 13 is.68 crores
•• In 1st year, only the cost of going live with Si~Pilot offices and NationalComputer Centre and cost of civil work and WAN has be .n taken into conslderatlon.Also there will not be any AMC in 1styear as it is covere by warranty.•••• In 2nd year, the cost of going live with all ROs and S OS and AMC in respect ofsix pilot offices and National Computer Centre has been aken into consideration.
PAYBACK
20. It is observed that the payback period will be bout 3 years. However.assuming un-expected cost overruns as well as VPN cost, at the maximum the full paybackwill be five years.
FINANCIAL INTERNAL RATE OF RETURN (FIRR) 0 THE PROJECT
21. The FIRR of the project can determined from abo as between 20% to 30%.
CONCLUSION
22. From the foregoing it is clear that implementation of re-en~ineered business processis financially viable and advantageous in short, medium and long term basis.
23. EPFO has adequate reserves to deploy funds for its mod rnization. It is seen that inthe long-term consideration the recruitment and deployment of st ff at current norm will leadto unmanageable staff cost and pension costs and future pay mmission increase apartfrom industrial relation problem.24. A modernized system will improve the collection of co tribution, identification ofdefault. Early and effective identification of default will lead to improved flow of penaltyunder section 148 of the Act. The penalty amount itself over a pecified period would payfor modernisation. EPFO has earmarked adequate residual alances for building andconstruction as well as for building maintenance, which will meet he civil work needs.
25. The Committee may like to consider the options.
r r ' r: r: r-, r-. 1'"\ I"" r-- r- (', tl tj r') r') ,...,(') ~ ') 1"')'1 I") ') }j ...,''') ") ')
t; ANNEX~E"A"Cost Implication of creation of posts to be created in clerical cadre based on the computer verified figures.
(1) Expenditure on salary and other allowances
Salary, Allowances, Pension! Gratuity Cost for staff to be created on existing norms: Rs. 408,293,092
(II) Over Heads
(1) Cost of office space, record space moving space average 60 Sq feet (per individual) @ RS 1200 * 60=Rs 72,000CAPITAL EXPENDITURERs 72,000 * 3112=RS 224,064,000Deployment cost @ 10% Rs 224,064,000 *1O%=Rs 22,406,400
(2) Electricity ,water charges ,stationaries ,futniture and fixture, office equipment etc 15% of the total costRs 408,293,092+22,406,4~0=430,699,592* 15%= Rs 64,604,938
Total (a) Salary and other Allowance Rs 408,293,092Oppturnity cost (b) Deployment cost Rs 22,406,400
(c) Overheads Rs 64,604,938Total cost Rs 495,304,403 t
o. -'U·~
{ , (, (.~G () 0 0 () (' n 0 n o f) !J n i~ o (J1j tj o o ~ o 1''') C") '1 Q t') ,...,
Budgetary Cost Figures.. ..... ..'Investment Summary
s. DeSCription Unit CoSt (ftS.) Quantity Amount (ftS.) AMC AMCAmount Total COst (Rs.,No. Charges, If (Rs.)
anvl%1
1 Co$1of settlne UP National ComplJll!r Centre (or SSN 98 261 OOC 1 98.2610002 Cost of setting UP National. Computer Centre (or Main ApDlicatlon 136.315000 1 136.315.0003 Co$t of Settlne UP the Recommeh(fed confiau"tlon lor HJghAvallablillY 116200000 1 116200 0004 CoIIt of setting up the EPFO HQ at Bhlkalli Cama Plaee during SSN 3761500 1 37615005 Cost of Central Printing sollJlion 9775000 1 9775.000
ft<.r.:, . ...., , ' .
I I I7 Cost of settlne UP 6 pilot o/Iices (RO I SRO) 1 8104430 6L 486265801 I
..~I I I
91Cost of setting up a Disaster Recoverv Centre onlv OS rep'icatlon) 127200.0001 1 127200 0001 I 1 1...
11 CoIIt of Upgrades reQuired for future Rrowth 61JiOQ.OOO 1 61500 00012 Cost for connecting all ofIIces (RO I SRO) 8104430 101 818547430
,1 1 .L L I 1
14 Cost (additional) of setting up a Disaster Recovery Centre (full DR) I 21.000.0001 11 21000000 II I I J I I I
.~.;:~~.. s ,
16 Cost of Settine UP of CRM system 2390 000 1 239000017 Cost of DeSktODPCs 60000 5000 300000000
I, . ~. .. .... "
Assumptions1 Cost of civil works have not been coneidered In any of the above.2 For WAN. only Indicative bandwidth costa have been taken. The VPNcoat. Including 'ast mile
connectivity has not been takan einee details lire not avellable,3 Cost of 2 MBPS link betWeen primary site IInd DR site is not taken Into consideration as Its coat
'4 The overall WAN design for EPFO. covering all EPFO ollices, can only be considered afterevaluating various servica providers.
5 Wherever Flat Bad scanners have been provided. lOR software shall also be reqUired, I·fEPFOdecides on BOO for those resources. then the coating llbove 18 OK, Else the cost of the ICRsoftware and manDOWel'resources lelther own or outsourcedl.
6 All hardware and software prices givan above are list prices. taken from published literature, andare therefore bUdgetary In nature. It has been experienced that in a competitive situation, thelorices come down bv about 25 to 30 % . M from the list Drices.
-
" {~\ ", . ..-.()
ANNEXURE· BInvestment Summary Page 1 of 1 IlNestment Summary
(' " r ( r0~~~~0~n~~~~~n~nnn~~~0~~~~~rf· """ Budgetary Cost Figures J1.
Investment relatad to SSN
S. Description Broad SPeclncet/ons Unit Cost (Rs.) Quantity Amount (Rs.) AMC AMCAmount Total Cost (Rs.)No. Charges, If (Rs.)
anv-I"!.I
-"_.A National Computer Centre
1 Dalabase Server RISC Server 2 CPU @750 upgrade to 3.500,000 1 3,500,000 10% 350,000 . . ,._, ". -3,85ii~OOOFour 4GB RAM uPCllIdeableto 16GB
2 Test & Dev Server RISC Server Single CPU upgradeable to 2,000,000 1 2,000,000 10% 200,000 2,200,000Two 2GBRAM
3 Biometric Server Intel Based Server 4 CPUupgradeable to 8 2,500,000 1 2,500,000 10% 250,000 2,750,000CPUs4GB RAM
4 SAN with softwares Storace with 19.5TB Raw Capacity 80000000 1 80,000,000 10% 8600.000 '86000-6005 Laser Printen; Laser Printen; at HO • 25ppm, Duplex Kit 150,000 1 1!!O,ooo 10% 15,000 165,000
6 Router (HO + 6 pilors~es) Router at HQ with cables· 8 Aaync pOrts& 700,000 1 700.000 10% 70,000 770,0004 ISDN PQr!.•!
7 Leased Line Modem Pair (HO Q703 & V.35 modems for leased lines (8+ 38,000 12 456,000 10% 45,600 501.600+ 6) 6 ) for 64 ~bps connectlVit"t
8 Softwares Oracle 91 Database Server· 40 user llcens 40000 40 1600 000 15% 240000 1640000Oracle 91C!!!ve~r suite· 10 user license 245000 10 2450000 15% 367500 2,817,500
---- Visual studio· 5 users 60.000 5 300.000 15% 45000 345000~rvstal Rebort • 5 users 25000 5 125.000 15% 18.7!!O 143750Antivirus SOIIwIIrefor servers 10000 2 20000 15% 3000 23000Antivirus Software for clients 3.000 30 90.000 15% 13500 103 500Help Generatlon~re 60000 1 60000 15% 9000 69000Data Compression software 50000 1 50000 15% 7500 57500
9 CO Writer Drive co Writer 10,QQC! 1 10000 10% 1000 1100010 UPS·2OKVA Two UPS In para"eI redUndl!lntmode 1.000.000 2 2.000.000 10% 200000 220000011 Generator !!OKVA 1..!1QQ.000 2 2,QIlOJX!!2 _10% 200000 220000012 LAN cabling for 30 nodea 250.000 1 250000 10% .25000 275000
tI :
B EPFO HQ at Bhavlshy.Nldhl Bhaven
1 Domain Server p. III Xeon Single CPU upgrade to Two 800,000 1 800,000 10% 80,000 880,000_. ,- CPUs WIN2K Server
f-- .-:'-.flI\.2. Desktops" Desktop PCs· P4 617 (;H2.c~2'56]"B~~1 -..... ..~- -..•. "'-' ... -~~.~ ~1-, 151),00(; 1980000
j 1t-Ia[oea scenner eleR sOftWareA4 size scanner 1200dpi 9,O<lO 1 9,000 900 9,900shall also be required) ,
4 Laser Printers Laser Printen; at HO • 25ppm, Duplex Kit 150,000 1 150,000 10% 15,000 165,000
5 Ethernet Switches 124DOrtswitch & 2 Gilla DOrts t5OJ)!lO 3 450.000 10% 45000 4950006 LAN cabling Structured cablinll at HQ 206 500 1 206.500 10% 20650 227150
-- 7 Consumables --- FIooDV.LTO COR 111LOQQ 1 111000 0 111000- 8 CO Writer Drive . CD Writer 10000 1 10.000 10% 1000 11000
9 UPS 500 VA For DesktODS 7500 30 225.000 10% 22500 247500
~~::?:~!:;:::- .. : . ..'Mf..f-':' :o::~~*:~z!:-' ••~ O! ~, . .' •• :!,. il : .~;,:;:::8;~~::::~:Z;::::,." ..~m~ : '**i* ~m:~z:.:::::s::::. : .'. " •.X"~:?&':Z::*" .'"
Pilot Sites (per Site)...... .... ..~-.. ,.~ .. ... ".". ....... -' .. ......_-- '_ ........ _ ... -._ ..._-.
C1 Dalabase Server P • III Xeon Single CPUupgrade to Two 1,200,000 2 2,400,000 10% 240,000 2.640,000
CPUs WIN2K Advanced Server:1 'EXternalStoraac-iCslTriiated; Dual Hosted external RAID BoxWith 360 GI 600.000 1 600.000 10% (,0.000 660.000will vary siteWise) .
----600.0003 Desktoos DeSktODPCs, P4 61.7 GHz. 256 MB RAN 00:000 10 10% 60000 660.000ANNEXURE - BSSN Related Investment Page 1 or2 r: , tl SSN Related Investment
r r r: ,"-" ~ ~ ~ ~ ~ .~ ~ ~ ~ ~ ~ ~ ~ ~ ) ) ),,-.. ,,-.. ~ ,,-..rI
"', ?"Budgetary Cost Figures
Investment related to SSN
S. Description Broad Speclftcltlons Unit Cost (RS.) QuanUIy Amount (Rs.) AMC AMCAmount Total Cost (Rs.)No. Charges, If (Rs.)
anvl%l4 DomainController p. III Xeon SingleCPU upgradeto Two 800,000 1 800,000 10% 80,000 880.000
CPUsWIN2K Server5 Laser Printer Laser Printer (01 at each site I 80.000 1 80000 10% 6000 680006 Line MatrixPrinter Ine Matrix orinter• 1000 10m 400000 1 400000 10% 40000 4400007 FlatbedScanner A4 size scanner 120Qdpi 9000 1 9000 10% 900 99006 Router Routerwith 1 ~Async DOr!& 1 ISON __250 000 1 250000 10% 25000 2750009 EthernetSWitch 24 POI1 switch 150000 1 150.000 10% 15000 16500010 Lease Line modems LeasedUne modem( 1 pair at each s~e I 70000 1 70.000 10% 7000 77000
I~ LANca~ Structured cablinawith Rack _______ J_2..Q~ ----- ......,4. .-----.!~,~ ..___...1~~___ ..J.b.@ ....____ .... _ 132,~.§Q12 Softwares Oracle91DatabaseSe.rver- 20 users iiCeO' 40000 20 800 000 15% 120000 920000
Oracle 9i Real Aoollcationcl ster· 20 use 20000 20 400.000 15% 60000 460000Antivirus software lent 10.000 3 30000 15% 4500 34500AntMOtasoftwareServer 3000 1 ~OOO 15% 4500 34500
13 Inkiet Printers Inkietprinter ( Olat each ane I 20.930 1 20930 10% 2093 23023Consumables FIODPY.TO COR 107.000 1 107.000 10% 10700 117700co Writer co Writer 12.000 1 12000 10% 1200 13200WIW connectivity LeasedUne 64 Kbos 150 000 150000 10% 15000 165,000UPS-10KVA Two nos. of UPSin oarallel mode 500000 2 1000000 10% 100000 1100000UPS· 500 VA UPSfor desktoos 10 Nos. at each 8lte) 7500 10 75000 10% 7500 62500DieselGenerator Generator at eachPIlotane 1
D Biometrics Components1SCK 210 00 6 128000c 15% 169000 14490002 Finge(Jlfintscanner . 7000 50 350000 10% 35000 385000
, .:: .'..I .1 I I
E Data CollectionCost Cost of collectingSSN related data lor 15 25 1,500,000 37,500,000 0 37,500.000Lacs subscribers
I I'.
) } ') '} )
ANNEXURE- BSSNRelated Investment
( .., c;·. ,J
Page 2 of2 SSN Related Investment
ANNEXURE· 8Overall Investment
t : r r> r- n r-, r- r-. n () r, (') () n () n ,-, C") n n (') I") .:) () !"') '} } -, )
r r-: ..•..., ~
Budgetary Cost Figure.
Inyestment related to oYerall archItecture -s, DescrIption Broad Spactncatlons unit Cost IRs.) QuantIty Amount (Rs.) AMC AMC Amount per . Total Cost IRs.)No. Charges,lf annum IRs.)
anv(%)1 Print Server P • III @1.2 GHz, Single CPU 512 MB 275,000 1 275,000 10% 27,500 302.500
RAM, 2 x18 GB HOD, Redundant PS,WIN2K Server Standard edition
2 Printina SYStem Automatic In·line Mailing SyStem 9500000 1 9500,000 10% 950000 10450 000
,'"
F CRM Solution1 IVRSystem Server Grade Intel Server lCPU 450,000 1 450,000 ·10% 45,000 495,000
upgradable to dual
... " . ••• -. ,,-+.- ..••.•. ---- •.••....• "_ •• _----~~~r~.:~~s,-._._. ____ ._._ .. _ _ . .3.QQ.9.Q9 .- -.---~--.-~ __ 1.0% 90000 990000WIN2KSeNer 40000 1 40000 15% '. 6000 46000VR Software 1000000 1 1000000 15% 150 000 1150000
~
Q Future QroWth1 WebSeNer RISC SeNer • 2 CPUs upgrade to 4, 8GB 4,500.000 1 4,500,000 10% 450,000 4,950,000
RAM uDDrade to 16 GB2 AppSe~r RtSC SeNer • 2 CPUs upgrade to 4, 8GB 4,500,000 1 4,500,000 10% 450,000 4,950,000
[sAM IIllQrade to 16G~3 Software Web Server &ApJ) SeNer~ra 2.500,000 1 2,500,000 15% 375000 28750004 SAN Upgrade Upgrade Hard Disk in exJstlng SAN with 50,000,000 1 50,000,000 10% 5,000,000 55,000,000
HBA for new servers and SAN SwItches
...... , ,f.~, ,
H SSN Data ceueeuen for •remaining members1 Data Collection Cost Cost of collecting SSN related data for 25 24,500,000 612,500,000 0% 0 612,500,000
remaining subscribers (UD to 2.6 erorea)Cost of collecting SSN for prospectlw 25 24,000,000 800,000,000 0% 0 600,000,000subscribers (up to 5 crorea)
,._..-other RequlremeiiiS ----~.. --._.---- ..... - ._---.._- - .---_._". -.--- ---- -- I
L I I . I1 Information KIosks Standard kiosks 800.000 I I I2iOkkloDPCs 60.000 - _J I I
,. :~I;.
Page 3 or 3 Overall Investment
-Minutes of 10th Meetin of :the Sub-Committee for1m lementation of Information Technol 'Reforms
Subject: 10th Meeting of the Sub-Committee for. 1 plernentation of InformationTechnology Reforms.
Date: 04.10.2002
Time: 02.30 p.m..I
Venue: 3rd Floor, Conference Hall,EPFO Head Quarters,New Delhi.
Present: Shri Ajai Singh, Central Provident Fund Com issionerShri A. Venkatram, MemberShri J.P. Chowdhary, MemberShri W.R. Varda Rajan, MemberShri Anirudh Rai, MemberShri A. Viswanathan, Convener
Dr. N. Ramani, Member, Shri Sharad S. Patil, Me ber and Shri Gaurav Dave,Member could not attend due to prior engagements. hri A.S. Kasliwal, Memberwas seriously ill. Dr. Gulshan Rai, Member had sent h s views on SupplementaryAgenda 1, by letter which was circulated to members.
The foUowing officers of the Department were also prese t:
srm Suresh Kumar, Director (IS-I)Shri C. Chakraborty, Dy. Director (IS)Shri Ravi Kant, APFC (IS)
Additional Central Commissioner (IS) welcomed II members of the Broadbased IT Sub-Committee which had been Broad based on the basis of decisiontaken in the special meeting of the Central Board of Trust es held on 09.07.2002 toenable a larger participation from the members of the 80 rd. He thereafter invitedthe members to take up the items on the agenda.
Agenda No. 1- Business Process Re-engineeri 9 - Taking forward
Additional Central Commissioner (IS) gave a brief b ckground on the agendaunder consideration. He informed that the note on cost enefit analysis had beenearlier placed before the IT Sub-Committee in its 9th meeti g held on 12.08.2002 inwhich special invitees were called, pending Broad basing f the IT Sub-Committee.
- .- ....,
The IT Sub-Committee had recommended the appro al of the proposed model ofBPR for future business of EPFO. The note on Cost Benefit Analysis and therocornfllencJulio/l~'; of lho II" Suu-Cotruuntno wos c msidorod by tho Financo &Investment Cornrntttee. Central Board of Trustees, E F in the 68th meeting held on16.08.2002. The Finance & Investment Committe after going through the costprojections, benefits and principles of the prop sed Business Process Re-engineering for improving the work processes was of the view that the ReinventingEPF India project was financially viable as its Financi I Internal Rate of Return was
r between 20% to 30%. The Committee unanimous I recommended that the SPRshould be implemented as a whole for m~king the EP 0 a world-class organizationdelivering best possible services to its members.
The observations of Finance & Investment Co mittee and the note on costbenefit analysis were placed in the 40th meeting. of xecutive Committee held on21/08/02. The Chairman, Executive Committee, C T desired that the note beexamined by the broad based IT Sub-Committee for i s approval. Accordingly thisagenda has been placed for the consideration of the C mmittee.
Central Provident Fund Commissioner inform d the members that a hardcopy of the presentation on the "Re-inventinq EPF, In ia" project was placed on thetable for the reference of the members. He further ex lained that the objective wasto examine whether it was worthwhile to spend mone in the implementation of theproject. The financial figures presented in the agen a item had factored the costreductions that would be available on account of th implementation of the BPR.recommendations and had also taken into account re uction in cost due to changesin technology.
It was a fact that the existing systems and processes prevalent in theOrganisation desired a lot of changes. One notabl instance that had come tonotice recently involved a situation where an emp oyer was complying with aparticular office for the previous 5-6 years and ubmitting returns regularly.However, the concerned employee of that employer w s misappropriating the fundsand not remitting them to PF accounts. The Organ sation was not able to reactduring the entire period and the matter was reveal d only when bulk settlementcases came up for the establishment. The case in poi t reveals that present systemallowed matters to continue without adequate reconcil ation of accounts. It clearlyshows that there is an urgent and immediate need for i stituting a better system.
For the CST to discharge its fiduciary resp nsibility as custodians andtrustees of the funds of the members, the Organisati n is not in a position to giveassurances on a scientific maintenance of the acco nts. Even statutory auditsconducted regularly did not offer a solution as 100% a dit is never carried out. Thesituation is further aggravated by its single entry syste of accounting being followedin the Organisation. All this points towards a nee to completely overhaul thesystem and processes.
CPFC also invited the members to differentiate etween the BPR activity andcomputerization which are normally confused. It wa possible for the BPR to betaken up as a separate activity from the implementati n and computerization work.However, In order to avoid conflicts between lr,e tlerlV8~tl.l."liu~ill';H'1JI"'~
2
- -,.
implementation agencies, the Organisation had tak n a conscious decision toappoint a single agency for both the activities. The B R activity creates the designand framework of the processes to achieve the desired goals and the costing of theimplementation can only be worked out subsequently. At present the BPR designpm them boon cOlllpll}lnd rind 111odo:;i~JII ";-18 1)00/ I ound to bo ucccptubto andreasible by a cross-section of the officers and staff 0 the organization and it nowrequires that the cost of the implementation be approve so that further progress canbe achieved. He also reminded the members' that proj ct is lagging behind by fourmonths and decisions needed to be taken quickly.
During discussions Shri A. Venkatram desired t know whether frauds of thetype mentioned earlier could be prevented under the n w design. CPFC said thatthe design of the new system is such that it will ensure t e reconciliation of accountsis carried out on a regular basis and the situation und r reference would not arise.Shri W.R. Varda Rajan strongly recommended that t ere is a strong case to goahead with the implementation of the BPR recommenda ions and there could be nohalf measures in it. However, Shri A. Venkatr m observed that till theimplementation of the BPR offices with outstanding p rformances like Mangaloreand Siliguri which settle claims and account in time hould be encouraged andcommended.
Shri J.P. Chowdhary wanted to know th details of the connectivitybetween offices and the cost associated with it. CPF informed that a number ofoptions are available like Leased Line from DOTI TNL, VSAT, VPN throughprivate ISP, etc. and a decision would be taken on the basis of the needs and thecost involved. Shri Chowdhary was of the view that the costs can be brought downif the reliability factor was not insisted upon. CPFC sai that under the centralizedarchitecture proposed for the project, there is a need f ensuring up time of theconnections between offices above 98%. However, decision on the kind ofconnectivity would be taken after evaluation of t e alternatives available.Furthermore, the cost of connectivity are declining over ime whereas the quality ofthe connections are also going up.
Shri Chowdhary also wanted to know whether th civil works in the projectwould met from the regular budget. He was informed t at the expenditure on civilwork would be met out of the normal revenue expen iture budget head of theOrganisation.
The IT Sub-Committee after deliberating on all aspects of the BusinessProcess Re-engineering (BPR) Report and its ramificati ns on all aspects of theBusiness processes with the consequent improvement and benefits that wouldaccrue in the form of scientific, secure and accountabl processes and methods,was of the unequivocal opinion that accepting and imple enting the BPR Report inits entirety. was the only logical step forward tor-the Organ zation to realize the goals
{. mandated for it.
3
-£-
. '. ". "
Supplementary Software requirements for II e-inventing EPF, India"
Agenda No.1 Project.
The Sub-committee noted the views of Dr. Gulshan Rai communicatedthrough his letter dated 04.10.2002. The Sub-Committ e approved the agenda andrecommended constitution of an Empowered Co mittee with the followingconstitution:
(a) Shri. N. Vittal, Former CVC ,& Secreta y,Department of Electronics (Now Mil)
(b) Dr. Gulshan Rai, Sr. Director, MIT &Member IT Sub-Committee and Technic ICommittee
: Chairman
: Member
(c) Two acknowledged IT leaders in t ecountry to be appointed by the SecretaLabour I Chairman, Executive Committe ,C8T, EPF upon recommendations of thChairman
: Members
Supplementary
Agenda No.2
Presentation on Orqantzatlon I Restructuring.
In order to study and analyze and, recommend t e organizational structurenecessary for the successful implementation of the "Re-in enting EPF, India" Projecta team of officers had been constituted. A presentati n on the 'OrganizationalStructure' for the Re-engineered and Re-structured Or anization comprising thepreliminary findings and recommendations of this tea was made to the Sub-Committee. The Sub-Committee noted the contents of the resentation made.
4
