EMPLOYEES'PROVIDENT Ftf~iDORGANISATION · 2015-12-17 · 11. Reviewof Investment Pattern...

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EMPLOYEES' PROVIDENT Ftf~"iDORGANISATIONt~f;';_'

NEWDELIII.

78th ·Meetipl.fJ'f_;,;",' 'J',-,'" "_."

FINANCE. AND£~~"'8_~tltJi.GF ...;.....·-··-··..;........•...•......~I ¥~

) 29TH JUNE, 2004 at t 1.00.1\.•••

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EMPLOYEES' PROVIDENT FUND ORGANISATION(~1.rnlstryof tabour; Govt. of tndra)

Head 'OfficeBhavishya Nidhi Bhawsn, 14, BhikaijiCama Place,

New Delhi - .110066 -

No.lnvest.I11{78th )f&I Meeting/2004' 'Dated· 22.6.2004

To

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All Members',Finance & Investment Committee,Employees' Provident fund.

Agenda Papers for the 78th meeting of the finance and InvestmentCommittee to be held on 29-06-2004 at 11.00 A.M. in the ConferenceRoom, Bhavfshya Nldhl Bhawan;14-Bhlkalji Cama PJac€ New oernr-110066. . .

Sir,

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Incontlnuatlon of this office Jetter of even ncdated lS.Q6.2004 on

the captioned subject, it is informed that the said Meeting of the 78th meeti ng

of the finance & Investment Committee, to be held on 29-06-2004 at 11.00

A.M. in the Conference Room, Bhavishya Ni~hi Bhawan,14-Bhikaiji Carna Place

New Defhi-110066.

Agenda~ldet for the said meeting is enclosed herewith.

You are requested kindly to make it convenient to attend the rneetlnq.

Yours faithful!y,

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~EJA)REGIONAL P.F. COMMISSIONER (INVEST.)

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7 b'~ IV\ (f P1c d.~;,11161 i.e- l1CONTENTS

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Pag.e No.Description

.Confirmation of the Minutes of the 77thMeetings of the Finance and Investment ~~ - C)Committee held, on 19-4-2004 at N~w Delhirespecttvelv, '

2. \;.. - "r~'\.,) .•...••IStatement showing the action taken. on therecommendations of the committee.

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3..: •...•••. :1"-u.,;:

:-~~~.Review of Investment in r-espect of ProvidentFund, Pension Fund, EOU fund. Staff Provident

. fund and. Staff Pension-cu{l1-Gratuity Fund.

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Portfo lio management of EPF money-chargespayable to 5.B.I. for the year 20U4-0~.

Permission to Exempted Provident Fund Trustsfor opening D-Mat Account with StOCK Holding \()"1 .. \13Corporation of India ltd. (SHCIl).

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6. Screen based trading of Government Securitiesat National Stock Exchange (N5E)

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Amendment in Para 60 of EPf Scheme, 1952to.avoid harassment to EPFMembers in case of '\ ~ b· 'l ~bnon-declaration of rate of interest in time. ./., I

IDeclaration of rate of interest for the year2004-05 for crediting interest in the accountsof PFmembers.

TO beplaced on

table

Portfolio Audit Report for the year 200z-'{)3 .

Any other item WIth the permission orthe! Chair '-. .:I

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:.." , ;.. ;;.~ ,~\: (~RA()a Jt~."~·l-~t":~:-~ 1~<~f J ft.-ii\tf"-~ -~ : ~~.~!-: '. . .. ~lIItem-No~<1r;-,;,Conflfniation oftheMinutes-ofthe;77thMeetings'~"of the ", Finance and Investment Committee held on 5-04-

2004 and 19-4-2004 at New Delhi respectively.

,:Mfnutes of rr: meeting of Finance & Investment Committee

were circulated vide fetter no. Invest.I/l(7~)/F' ~ I Meeting

/2004/991-1003 dated~19-04,.2004 and Invest.I/1(7Sth»)F & I Meeting

/2004/5576-5627 dated 1~-OS-2004 respectlvetv. Copies of minutes

are enclosed (Annexure-A).

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The committee may-confirm the minutes of tne 77th meetfng held

on 05.04.04 and 19.04.04.

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. ~·.~/N&.X\l~ ..c;--· Ii/ ('DRAFT MINUTES OF THE 77th MEETING OF ~THE fINANCE AND nINVESTMENT (F&I) COMMITTEE, '.'CENTRAL BOARD OF TRUSTEES. -r:;EMPLOYEES'PROVlDENT FUND:>,H~ELI)-IN':THE;\COMMiTTEE "-ROOM, . .E.P.P.O. HEA!>OFFICE,NE)N.D.ELH~_ ON QS.04.2004. . '. r

The 77th me-eting of the Finance and Investment Committee, CentralBoard of Trustees, Employees' Provident Fund was held on 5th April, 2004 inDelhi at 12.30 a.m. The meeting was chaired by Shri Baleshwar- Ral,Additional Secretary (Labour), Govt~of India.

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The foHowing were present:"-

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(a) Members of the F&I CommitteeShri J.P. Chowdhary, MemberMr. Sanjiva Reddy, MemberShri A. Venkatram, Member.Smt. Rama Murali, JS & FA (Labour), MemberShri D.S.Poonia, Joint Secretary (55), Ministry of LabourShri Anirudh Rai, FA & CAD Convenor

{b) Special Invitee

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Shri Ajai Singh, CPFC

At .the outset, the Chairman welcomed the members and specialinvitee to the meeting.

The Committee deliberated only on Item No. 7 regarding approvalof financial·bids for Study regarding investment management.

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The Committee considered the comparative chart of Financial Bidsprepared by the Tender Processing Committee in respect of following biddersshort listed by it earlier: -

1. Mis. Deloite Touche Tohmatsu .India Private limited.(Rs.73,80,OOO/- inclusive of service tax of Rs.5,78,157/-)M/s. Watson Wyatt India Pvt. Ltd.(Rs.1,17,56,250/- excluding disbursements and service taxapplicable at the time of billing)Mis. Mercer Human Resource Consulting (Rs.33,54,156/- inclusive'of service tax of Rs.2,48,456/-)

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The Gommittee recommended to award the contract to toe lowest-bidder viz. Mis. Mercer Human Resource Consulting to- conduct studyregarding investment management subject to sanction by competentauthority.

The Committee further decided to adjourn the meeting to19.04.2004 at 11.00 A.M. at the same place..

The meeting ended with a vote of thanks to the chair.3

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DRAFT MINUTES OF THE 77th~MEEftNG'~O~i'THE FINANCE ANDINVE,STMENT (F&I) COMMrrTEEi, CENtRALBOARD, OF '

TRUSTEES, EMPLOYEES' PROVIDENT FUND, HELD AT 11.00 A.M.ON 19.04. 2004 IN THE CONFERENCE ROOM, EPFO, HEAD

OFFICE, NEW PELHI~

The 77th _meeting of ,the', Finance~nd Investment C-ommittee,Central Board of Trustees, '"Employees' Provident 'Fund was held on 19th April,2004 in the conference room,EPFO HeacfOfflce,' New Delhi at 11.00 a.m. ,Themeeting was chaired by Shri Bafeshwar Rai, Additional Secret-gry (Labour),Govt. of India. ' ,

The following were present:, (a) Members of the F8tICommittee

Smt. Rama Murali, JS & FA (Labour), Member .Shri D.S.Poonia, Joint Secretary ('SS), MoL, MemberShri J.P. -Chowdhary, MemberShri Sanjeeva Reddy, Member.Shri A. Venkatram, MemberShri Anirudh Rai, FA & CAO,Convenor

(b) SpeCialInviteesShri Ajai Singh, CPFCShri A Vishwaoathan, Add/. CPFC{Pension), EPFO{HQ}Shri K. Srinivasan, RPFC(Conference) ,Shri C.M.Pillai, DGM, SBI Corporate <:eoter, Mumbai

At the outset,' the Chairman welcomed the members and-specie!invltees to the meeting ; , ,

Confirmation of the Minut.esof the 7Sth&76th Meetings ofthe Finance and Investment' Committee held on06.0~.2004 at Mumbaiand on 03.03.2004 at New Delhirespectively.

The committ-ee confirmed the minutes of the 75th &76th Meetingsof the Finance and Investment Committee held on 06.02.2004 and03.03;2004.n~spectively. Further Committee noted the observatlons of Smt.Rama,-Murali, JS~FA (Labour) received vide letters dated 08.12.2003 and12.02..2004 which were placed alongwith draft minutes.

Item No.1:

Item No.2: Statement - showing the action taken on-therecommendations ofthecommlttee,

1. Outstanding interest and maturity proceeds,

The committee noted the contents.

2. Extract of Concurrent Audit Reports furnished by State Bankof India.

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The committee noted tne contents.C' ,_ ~" ~,.,: i'i}:':~iF': ~i .,./riii3;;jr~i.'\;;;;"" . 'j 1:-::. ~ ".",.<c.ldle,fundS: ,'~'31'ir"/;'1'C:'"" : ; -." ~ "';

. The committee noted the' contents, DGM, SBr explained that advanceplanning for investment of funds of CBT, EPFIs made so as to minimize theamount of Idle Funds. In case of receipt offresh accretions after the businesshours, funds are bound to .remain idle. Further funds are not to be invested ina rash manner just to avoid Idlefund as it may cause more losses to the CBT,EPF. After planning' the Investments with reference to cash inflows andforthcornlnq investment oppcrtunltles, some times funds have to be kept idlefor availing good Investmentavenues. Many a times treasury bills are notavailable. Term Deposits receipts are available in the market only for 7 daysperiod or more. ~.. . .

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581 needs to .improve its service to enable immediate electronic transfer offunds to avoid over' holding of funds at field offices of EPFO. Crediting offunds takes many days' in the pipeline before being credited into EPFO'saccounts with SB!. Shri C.M. Pillai, DGM, SB!' expJained that SBI is adoptingtechnological improvements in providing core banking solutions to itsesteemed clients. After the proposed. Business Process Reengineering fundflow from base branches to the link branches of SB! will be avoidedaltogether. .Technical team of SBI. is in touch with Siemens Information

. Systems (India) ltd. for better coordination and proper handshake of data ...(

Committee decided that SBI should explore thepo$sibility of gettingthe .approval from RBI to permit Central Board of Trustees,Employees· Provident Fund as lender in Interbank Call money marketfor overnight parking of funds to minimize the Idle Funds amount.

4. Declaration of rate of Interest to be credited to EPFmember'saccounts for the year 2003-2004.

The committee noted the contents ..

5. Declaration of rate of Interest aft:erthe close of financial yearon actual interest Income. \,

-The committee noted thecontents.

6. Actuarial Valuation of staff pension cum gratuity fu~ ..


7. Restructuring of debts payable by IFCI~

The committee noted the contents and desired that the matter may bereferred to the competent authority again to get approval of the minutes ofthe meeting held with IFer on 23.02.2004. .

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8. Study regarding fund flows. "

The commtttee noted:thecor1t~nts.

9. Special audit report for the period 1.10.2000 to 31.3.2001 and for the.year 2001-2002 on investment portfolio of Employees' Provident Fund-Organisation managed by the State Bank of India.

The committee noted the contents." "

10. Screen based trading of Government Securities/Bonds at NationalStock Exchange

Thecommit:tee noted the contents and agreed in principle that screenbased trading of government securities /bonds at NSE is the need ofthe hour. Matter should be followed up with NSEand S6I to asc-ertaincosts and benefits from the proposed screen based trading system atNSE. It was-expfained that SBI isaJr-eady using Negotiat-ed DealingSystem .(NDS) developed by .RBI f-or purchese of Gov.ernmentsecurities which gives better facilities "about"trading settl-ements vlz.T+0 as compared to T+2 system in vogue at NSC. It was furtherinformed that for own investments.of 581, it is -uslng NOS. HoweverSB! may also aseertain as to Whether other institutions-sUch asBanks,LIe and UTI are using Screen Based Trading Syst~m of NSE forinvestment of their funds in government securities.

Committee "decided that detailed proposal indicating pros and cons ofscreen based trading of government securities on NSE be put up f·orCOnsideration during a special meeting t-obe convened after 15th May,2004. Experts from Ministry of Finance may also be requested toattend the meeting. State Bank of Ind~abe advised to take necessarysteps for using the system of NSE regarding screen based trading ofGovt. Securities w.e.f. 1st June, 2004, if so decided by the Committeeafter considering detailed agenda items in its next meeting.

11. Review of Investment Pattern and guidelines.


Item No.3: Review of Investment in respect of ProvidentFund/Pension Fundand EDLIFund.

The committee noted the details of the funds inflow and investments made byS8! during the financial year 2003-2004 and the investment corpus in regardto Provident Fund, Pension fund and cOLI' fund. Committee -deslred that afootnote be given indicating the major. it.ems included in themiscellane.ousreceipts and miscellaneous payments shown in the statistics relatinq to cashinflows and outflows.

Further Committee also indicated that the details of main items of inflows andoutflows be given in separate columns to have better clarity and presentation.

Item No.4: Appo.intment of 'portfoUoauditorregal"ding audit of the. Investm~ntportfolio managed by :the .··Stateaank ofIndia, Mumbai for finandaly.e·ar200a •.04. .'

The committee recommendedthe continuatlonor MIs BatHboi and Purohit asportfolio auditor as proposed "for audit of the Investment portfolio managed bythe State Bank of Indla, Mumbai. for the financial year 2003-04 on the existingterms and conditions.

Item No.5 Portfolio management of EPFmoney-charges payableto S.B.I. for the year 2003 .•04 and 2004-05.

Regarding portfolio maneqement of funds of CBT, EPF during the financialyear 2003-04, the committee approved the schedule of fees equivalent to theBank charges paid during the year 2002-03. However, Term DepositReceipts, Repo and CBlO be treated at par with treasury bills being avenuesfor short term parking of funds. Committee approved the following scheduleof bank charges payable to S8I for the year 2003-04 and desired to pla-ce itbefore CBT, EPFfor information and ratification.

Sl. Nature of Fees SBI bank charges applicable in 2003-04No.1. jrransaction Fees Rs 0.03 per Rs 100 on Face value of every

investment other than in Special Deposit IScheme. In addition a cap of Rs. 20,000/- will Ibe placed on the transaction fee recovered onindividual face value of investment (Deal ticketwise) irrespective of the amount invested ,under this deal ticket. I

2. Income Collection Fees -Income collected on SGL 5ecurities- No!charge i

I -Income collected on Non-SGL securities- Rs ]0.05 per Rs. 100/-on income collected on Non- ISGL securities including overdue interest, if I,any.

3. lCustodial Fees: Waived other than for charges payable to! Depositories for DEMATtransactions4, IAcceptance and withdrawal of No charges

securities on behalf of CBT EPF5. trreasury Bills, Term Deposit No charges

Receipts, Repo and CBLO

. Committee further approved continuation of 581 as the Portfolio manager forthe year 2004-05. However, the Committee deferred the issue regardingbank charges for the year 2004-05.

Item No.6: Exclusion of TORof less than one year with public sectorBanks while computing exposure limits.

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The committee did not approve ·exclusionof TORs with public sector.banks (being short-term primary. debt instruments) from the currentexposure limit of .300/0 hi ·PSU/PSFI/BbdY.·corporatedebt instruments. The·committee decided that the present exposure limits which have been decidedby CST on 23.2.2004 should continue till the report of the 'InvestmentConsultant being hlred to conduct -study regarding investment managementof funds of CST, EPFis made available to the committee.

Item No. 7: Stl!dy regarding Investment Management- Approval ofFinancial Sids.

The item was approved in the first phase of 77th meeting held on05.D4.2004 and its minutes were circulated vide letter dated 15.04.2004 ..

Item No.8: Amendment in P~ra 60 ofEPF Scheme,1952 to avoidharassment toEPF Members in case of non declarationof ..•.ate of interest in time.

The Committee decided to defer dtscussions on the matter til1 theGeneral Elections 2004 conclude in the second week of May 2004. Committeefurther decided that in respect of interest payable tattle outgOing memberson the claims settled on or after 2S.{)4.2004, -claims'be settled without brokenperiod interest from April, 2004 onwards as happened du-ringlast year ti~1theissue is decided by the CST, €Pf . and the Cent-raI-Government regardingdedaration of rate of interest for the year 2004-05.

Item No.9: Status Note about dues recoverable from HMT

The decisions of Committee on Disputes were appre-eiatedby the members.The Committee, after discussion, endorsed the decisions of COD andr-ecommended that the same may be placed before the CBT,EPf for approval.

Item No.l0: Portfolio Audit for the year 2002-03 .

The matter was deferred for the next meeting of the Finance andInvestment Committee.

The meeting ended with a vote of thanks to the Chair.

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Item No. 2: Statement showing the action taker'lon the .re~ommendationsof the Comnlittee.·· .. . '. .. -_.... ."

st. RecommendationsNo

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Action Taken

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The State Bank of In.dia.have been advisedto ensure prompt collection' of receivabJes,if required by taking appropriate legalaction vide letter no, Inv.l/ActionTaken/F&I/02 dated 12-9- 2003.Details of the outstanding interest andmaturity proceeds up to 31-05-2004 are i

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placed as Annexure B' Ilist of cases from March 2004 to May 2004 Iin which interest and maturity proceedswere received belatedly is enclosed asAnnexure C. S8I has been advised to takeup the matter with Jssuersfor claiming overdue interest and to furnish up to datedetails of outstanding interest and maturity Iproceeds. Interest may also be received Ibelatedty on account of postal delay in lreceipt of cheque, clearing time, particularly'for outstation cheque, acceptance ofsecurities belated transfer in the name ofCBT/EPF. i

1. Outstanding interest andmaturity proceeds.

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Extract of Concurrent AuditReports furnished by StateBank of India

The SBI has furnished the relevant!extracts of concurrent audit report for the !period from Jan 2004 to March 2004Annexure D. S6! has been advised videletter dated 21-6-2004 to furnish the:Concurrent Audit Reports for Nov & Dec :2003, April 2004 & May 2004.

Idle funds The requisite details of idle funds for theIn accordance with the period from 16-03-2004 to 15-6-2004 areminutes of the meeting with placed as Annexure 'E'the representatives of theCentral Board of Trustees,EPF and S6I in Mumbai on30.5.2001 a signedfortnightly report in respectof Idle Funds will befurnished in the agreedformat by the SB! and thesame would be placed

I before the Finance &I Investment Committee.

I Further SB! should explore SB! has taken up the matter reqarding i<)

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Separate item is being placed before the iF&I Committee.

parking of.funds In RBI Repo: SBI has beenadvised to take _permlsslon -from RBI aslender in Call & Money market also.

the possibility of getting theapproval f-rom RBI to permit

-: Central·- Board of TtVStees,-Employees' Provident . Fundas lender in Interbank Callmoney market for overnightparking of funds to -minimizethe Idle Funds amount

Actuarial Vatuatlcn of staffpension cum gratuity fund :Committee was informedthat only three .Actuariesgave the bids. Shri BhudevChatterjee gave the lowestquote amountingRs.25,OOO/- only forActuarial valuation of StaffPension -cum -Gratuity Fund.The matter be processedfurther as per the rules.

Incompliance of the decision' taken by theFinance Investment Committee in its 73rd

meeting the appointment letter was givento ShriBhudev Chatterjee,Actuary vide thisoffice Jetter No.Invest. 1/' 1(76)/2003/SPF&GF/ N-C 09/4457-4505 dated16.04.2004.SampJe Data received from 16field offices has been send to Actuary andthe balance data is now being collectedfrom rest of the field offices

s. Regarding restructuring ofdebts payable by IFCi it wasdecided that the matter beplaced before Central Boardof Trustees, Employees'Provident fund forratification of the decision ofthe committee espectany-constieeted for negotiationwith IFCI.

IFCI was informed vide fetter no. IInvest.I/2(16)IFCI/ 2001/ VoLII 12672-73 Idated 01.06.04 about the t-erms and I'Conditions f-or restrucrurt ng of debts ipayable by lFCI. SBJ in its capacity as iportfolio Manager of funds of C8T,€Pf hasl'been advised to recover dues from IFCt In _ac-cordance with terms and-conditions idecided by committee and to complete all Irequisite formaHttes. In accordanc-ewith theabove decisionsof the .cornrnlttee IFCI paidRs.92,U4,75,4941-. However IFeI hasfurther requested for condontnq of payment :of interest for detaye-d period. IFCI vide:letter No. I-FCI/Res/2004 dated 14--6-2004.

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Since matter was decided by ac--ommitteeespecially constituted for negotiation withIfCI, a status note is being placed beforethe CBT ON 3-0-6-2004 (copy enclosed asAnnexure "F").

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Screen based trading .ofGovernmentISecurities/Bonds at NationalStock Exchange

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7. Review of Investment Central - Board of Trustees, Employees'Pattern and guidelines.' - Provid~rit fund in its - meeting -.held -on

-. - '23.02.2004 approved the changes in theInvestment Pattern and guidelil'!es asrecommended by Finance and InvestmentCommittee. Accordingly matter. has beentaken up with Govt. of India, Ministry of ILabour vide letter No. IInvest.lIl( 18)/96/Pattern/Vol. VII/1451 Iedated 16-6-2004 and with S8! vide letter Idated 22-6-2004. I

8. Study regarding fund flows. Details are being collected to complete I

requisite system study. Status note is ienclosed as Annexure -'G'. . !

,,9. Appointment of portfolio Matter is being placed before the Executive I

auditors for the year 2003- Committee scheduled for 29-6-2004, for!2004. getting financial sanction.

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10. Portfolio management Response is awaited from S8I regarding Icharges payable to S8! for treatment of TORs, CBLOand Repo at par'the year 2003-2004. The with Treasury Bills. !committee decided that nocharges be paid to S6! onTDRs, CBlO and Repo asthese instruments are to beutilized as short term ,~..parking of funds.

Study regarding Investment Matter is being placed before the CBTManagement. scheduled for 30-6-2004 for getting

I financial sanction.

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Dues recoverable from MIs.HMTltd.

Mis. HMT Ltd. was advised to take actionsin -accordance with the decisions of HighPowerCommittee on Disputes (COD) dated4-3-2004. Response of HMT dated 14-6-2004 is enclosed asAnnexure "H'I

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Qutstanding Mafiyitic:s, ~tatemen~14 13kpv,'sl.-{"I IVI'~"'; ~I.."j)ve-""

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As gn O;atJ : 31:M!y.2004

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s.c:utity Code s.c:urtty Description MaturttyDt Payinent Date Redemption Amount Rellllrt;

Res'emptipn Amgunt Qat Res;elYedHIlT HINOLISTANMACHINES & TOOLS

820004 16.00% H MT 1999

820061 16%HMT2003

IFCI INDUSTRIAL RN. CORP. OF INDIA

300018 16% IFC,I2002 XII 97

300004 12.50% IFcr 2002 XV

30007'7 12.50% IFCr2002 RIB 97·98

300008 15% IFCI2003 Rr XXI

300045 14.90% IFCr2003 RIB XXI

300007 14.75% IFCI2003 RI XXI

300073 13.40% IFCI2003 XXVII

300064 16.00% IFCI 2003 XI

300072 14,00% IFCI 2004 XXIV

300046 14% IFel 2004 XXV!

01107/1999 0110711999 250.000,000.00 -4 t<tgJ tJ~ iee, & rt~ 0••••9..eb.l 0 \I,10Q,OOO.OO~t.<1"\·loJ.(",..st.,J "'I, 1.,.;(~t,O~.)~'~41~/fJ~3111012003 3111012003

locar Redemption Amount: 2.0S~100.0eO.:):

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1510212002 15t/212002 501.200,000.00 ",

30lO9l2OO2 3OI09I2tlO2 528.500,000.00

3011112002 3CVI112OO2 600,000.00j?c.~ f\c.l<1S SO t I"} ~ on.

25fOJliOO3 25.CJ12OO3 SO.OOO,OOO.oo\ 'l.-I ~ I0-\ t~ }SI04 At l"jj~251031'2003 251'0312003 250.000,000.00. I ,

f:2510312003 2515312003 300.000,000.00 ",

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31JOJliOOJ 31103.'2003 200,Obo,00

3011112003 0111212003 300,000.00

20101120(),¢ 2010112004 200.000.00

0110312004 011030'2004 200,000,000.00Total Redemption Amount : :'::. ~OL).C::,~~

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Fe' l:1le::-,al Use Only \~--~ ~------.-.. - - ...

Outstanding Maturities Statement,As on Date i 31-May-2004

Security Code SKurtty Description Maturity Dt Plryment Date Redemption Amount

Short Redemption Not Receive<f

IFCI INDUSTRIAL RH. CORP. OF INDIA

300003 16.2'% 'Fel 2003 FAMILY 80S

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EMPLOYEES' PROVIDENT FOND ,ORGANISATION,, (HEAD OFFICE)

BHAVISHYA NIDHI BRAWAN,14, BHIKAJI CAMA PLACE,

NEW DELHI-II0066.

No. Invest. I/l(2)/99-Misc./General/ --< I~ '17/To

The Assistant General.Manager,State Bank of India,Securities Services Brancb,(2nd floor), Mumbai Mail1 Branch, Building,Humbai Samachar Marg,Mumbai-4~l0023•

Sir,Please· refeL" to daily statement of Lrrves t.Lr- -:-

funds in respect of Account No. oS: dated MAY. ~60~

On scrutiny of ,the said statement (s) , it is fOulid-- th .,there is delayed receipt/l.ess, receipt ,:>f interestper the enclosed statement. You are requested to 10_ ,.,:into th-e' matter and .ensure that '. the interest amou.dl.le to the CST, EPF is credit,ed to the r.esfo.E!ctive acxrown tof CB'l','EPF alongwith penal interest for c!elayed receiptless receipt of interest.

An early action in the matter is s-olic:d:f-:d.

Assist.ant P.F. Commissioner{Investment.

euss OF..!l.f1BYED.f3Ell!f~!ill;j RECEIPT OF11flliill:

MAY-2004Account No.5~~~~r:Ode - I~:te - fPorticua r - -I Due"n : Reed.ON -1-fiiceiiaIUe -Tinteres. -r~~~:remarkS-,-'-

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DETAILS-OF -.DEL4.YEDPFC.F'PT f:I£SSR~OEfPT OFINTERST' _April, 2004 -, . -i~". - . I -Ne No. 05

i•..•o01 <1 c:n I' U.•....•.. 2007

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iAccount No. es]

iReceivedlI on I Face Value tnterest iNo. of days/

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51. cate '.Code .' Rate % Particulars.No •.gotY.

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Account No. 11 .Face Value Interest· No. of dayS' ~ :

. . . Received . delay1 STG. 58101612.25 HP RIOC.

20071.4.Q4 5.4.~ 5()()()OQOQ 3062500.0Q 4'

IAPriI, 20()451.Cate 'Ir~ Rate OL Partie I

-"". No.Jgory i"-"'W" '/0 U ars:' 1 rsTG 581016. 12.25 HPRIOC

2007

Due on Recelved Face Valueon

5.4.041.4.04 500000O

Account No. 25J~terest. '. No. of daysReceived delay306250.00 4

.-. '"'." .:..

EMPLOy.EES I' PROVIDENT. FONO~,ORGANISATION ;"- .. - (HEAD -OFFICE) -

l3HAV,ISHYA'NIDHl BHAWAN, -14'iBHIKAJICJ\MA' PLACE,

NEW DELHI-II0066.- ,

~o.Invest.I/l(2)/99-Misc./Genera~/ l·~-

D·.ited :

t (£'S -APR 2004._To

The Assistant General Manager;State Bank of India,Securities services Branch,(2nd floor), Mumbai Main Branch, Building,Mumbai Samachar Marg,Mumbai-4-00023.

Sir,

Please "refer to daily statement of Lnveer.Lr-; :funds in respect of Account No.OS;o~eJI}/~Udate,jM A-~c..~ ,..:--~"-tOn scrutiny, of the said statement (s), it is found t:h .•.there is delayed receipt/less receipt af interestper the enclosed statement. You are regl.lested to 10. ,:into the matter and ensure that the interest a;nou,due to the CST, EPF is credited to the respect:ive aCCCH.1ni:of CB'l', EPF alongwith penal interest for C'elayedrecEipt,less receipt of interest.

An earLy action in the matter is solic:it_ed.

Y::mrs faithful r,

(RI ~~~~L<A~~Assistant P.F. Commissioner(Investmen::

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March. 2004, " ~-.~:; " .... AleNo.OS51. Cate Received , . Interest No.ofday~Code Rate % Particulars, Oueon ·-Face Vallie. No. ,lgory, . ' :. on ReceIved ·delay~1 eTG 11()()35. 13.85. LOAN20Q6 26.2.04 3.3.04 "750000 51937.50 .,62 ?SU 350245 11.25, ICICI,2005 27.2~04 3.3~04 200000 22500.00 . 5

3 STG 510048 11.58 HPSEB 15.2.04, 4.3.04 25OQOOOO144Z5QO.00 '2008 18

4PSU '350247 11.50 ICICI2006 "'28.2.04 12.3.04 10000 1150.00 12.

5 STG 820052 13.00 N>TRANSC 1.3.04 12.3.04 1000000 65000.00RP2007 11

6 PSU 400006 13.95 PNB 2005 10.3.04 15.3.04 5691()()()()O79389450.005

7 ?SU 400025 10.00 PNB2008 10.3.04 15.3.04 333 33300000.00 5

8 STG 821030 14.50 MHVlOC 15.3.04 19.3.04 50000000 3625000.00:2004 4

9 STG 300033 11.50 CGtFCI 19.3.04 23.3.04 357000: 20528.002009 4.

Mareh,2oo4 Account No. 0851. .cate

Code Rate % Particulars Due onReceived Face Value Inter.est No. of days

No. loorv on Received • delay1 PSU 4()()()()6 13.95 PNB2005 10.3.04 15.3,04 7 976500.00 52 • PSU 40002~ 10.00 PN82008 10.3.04 .15.3.04 2()()()()()O 200000.00 5

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March,2004 I Account No. 69SI. Cate

fcode Rate % Particulars Due onReceived

Face Value Interest No. of daysNo. ge>ry on Received delay1 PSU 400006 13.95 PN82005 10.3.04 15.3.04 10000000 1395000.00 5

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J ! iMarch,2oo4

.._;-Account No. 11

SI. Cate Code Rate % Particulars Due onReceived Face Value Interest No. of days

. No. [gory on Received - delaySTG 516048 11.58 HPSEB 15.2.04 - 4.3.04 25000000 1447500.00 181

.2008

2 P5U 400055 6.9 ~81BON05 7.3.04 11.3.04 '805000000 41745000.00 '"2010, ! I I. , ; I-.- --: - .-.-- -t----- ._------'-; I

i t!-_.-.- :- . ---_..--: .--.--~-...---~-..._& _______ l_______·

, , iMarcti:2o~' I Account No. 2551. Cate

Code Rate % Particulars Due onReceived Face Value Interest No. of days

No.. Lgory . on Received delay

1 PSU 400006 13.95 AS SOL 10.3.04 15.3.04 57500000 8021250.00 52004

2 PSU 400025 1() AS SOL 10.3.04 15.3.Q4 11000000 1100000.00 5·2007

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The Regional Provident Fund Commissioner (lnvestment),Employees Provident Fund Organisation.14. Bhikaiji Cama Place.~Oelhi 110066~. lfi1rlc5/No. 7 L/ /J'Y)s!3b"ODear Sir,

CONCURRENT AUDIT REPORTS

We enclose the concurrent audit reports for the months of January 2004,February 2004 and March 2004 for your perusal and necessary action.

Yours faithfully,

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PORTFOI.,IQ l'4ANAGEl'4~Nr - lYIAl.l.CH2004

~ruFICATION OF DEAL TICKETS FROM 2004000246 TO 2004000398OBSERVATIONS

PMSREPLY

1. PEAl,eTIgQ1TS:(a) Mid-Officeauthorised signatory should also sign on the following Deal Tickets at the

bottom:2004000246 dated 01-03-20042004000247 dated 01-03-20042003000248 dated 01-03-20042003000249 dated 01-03-20042004000288 dated 11-03-20042004000344 dated 24-03-2004

(b) Dealer should also sigh on the following Deal Tickets at the bottom:2004000277 dated 06-03-20042004000278. dated 06-03-2004 '2004000329 dated 23-03-2004

(c)There are no Deal Tickets numbered 2004000284 dated 10-03-2004 and 2004000332 dated23-03-2004 on record at the appropriate place.All deal ticket numbers should be accountedfor to prevent mis-use. .

2.DJ<ALCONFIRMATIONS. OF PM§:(a) Name of'counterparty not mentioned above address in copy ofPMS Deal Confirmation

in~~~~~q~Th~ ,2004000288 dated 11-03-2004

(b)The filed copy of the PMS deal confirmation should also be authenticated by the authorisedsignatory ofIllid-office in the case of the following Deal Tickets:2004000247 dated 01-03-20042004000249 dated 01-03-20042004000251 dated 01-03-20042004000252 dated 01-03-20042004000254 dated 03-03-20042004000255 dated 03-03-20042004000256 dated 03-03-20042004000375 dated 26-03-2004. 2004000378 dated 26-03-2004

. Since signed

Since signed

Since traced and filed.

Since corrected

Since signed

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C-MAR 04 (1/3)-: .", '. I

-'. 'CQUNTERPARTY DEAL CONFIRMATIONS:,Deal Confirmations from the following counterparties have still to be received and filed atthe appropriate places: ' '

NAME OF,COUNTERPARTYCanaraBank,Canara BankUCOBankUCOBankDSP Merrill Lynch Trustee Company Pvt. Ltd.Sundaram Mutual FundDeutsche Mutual FundDeutsche Mutual Fund

, Canara BankCanaraBankThe Kamataka Bank Ltd.The Kamataka Bank Ltd.The Karnataka Bank Ltd.The Kamataka Bank Ltd.UCOBankUCOBankUCOBankUCOBankUCOBankAllahabad BankAllahabad BankAllahabad BankAllahabad bankAllahabad BankAllahabad BankUCOBankUCOBankUC01;lankUCOBankUCOBankAllahabad BankState Bank Of'Patiala

DEAL TICKET NUMBER20040002752004000276200400027720040002782004000285200400028820040002912004000292200400029620040002972004000299200400030020040003012004000302200400031520040003162004000317200400031820040003192004000320200400032120040003222004000323200400032620040003272004000328200400032920040003302004000331200400034420040003452004000346

DATE05-03-200405-03-200406-03-200406-03-200411-03-200411-03-200411-03-200411-03-200412-03-200412-03-200415-03-200415-03-200415-03-200415-03-200418-03-200419-03-2004,19-03-200419-03-200420-03-200420-03-200420-03-200420-03-200420-03-200422-03-200422-03-200423-03-200423-03-200423-03-200423-03-200424-03-2004

, 24-03-2004,;,.24-03-2004("if

All the confirmationshave been receivedexcept those from DSPMeryl Lynch Trustee Co,Pvt, Ltd., and SundaramMutual Fund.

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~, 'COUNTElU'ARTY ..State Bank Of PatialaState Bank Of PatialaState Bank OfPatialaUCOBankState Bank OfPatialaAllahabad BankAllahabad BankUCOBankAllahabad BankAllahabad BankAllahabad BankAll~adBankAllahabad Bank

C-MAlt 04 (2/3)DEAL TICKET NUMBER:' DATE

2004000347 24-03-20042004000348 24-03-20042004000349 24-03-20042004000373 2S-03-2()042004000374 25-03·..:20042004000375 26-03-20042004000376 26-03-20042004000378 26-03-20042004000379 26-03-20042004000381 31-03-20042004000382 31-03;'2004200400038331-(}3-20042004000384 31-03-2004

Annual review will besubmitted to the boardby 07-06-2004.

Necessary follow-up needs to be done with the above mentioned countetparties so that alldeal confinnations are received expeditiously.

4.SVBMlSSIQN OF,mOBTS/MEMQRANDA:Yearly review for 2002-2003had been submitted to BCeSon August 22,2003.Half-yearly review for the half-year ended 30-09-2003was submitted to the BCCB on22-11-2003.Yearly review for 2003-2004is under process.

C-MAR 04 (3/3)

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--'AN'l"IEXURECPORTFOLIO MANAGEMENT - FEBRUARY 2004

PMSREPLY.

2.DEAL CQNFIRMATIONS OF PMS:,(a) Name of counterparty not mentioned above address in copy of PMS Deal Confirmation I Since corrected

in case of the following Deal Ticket:2004000181 dated 17-02-2004

(b)The filed copy of the PMS deal confirmation should also be authenticated by the authorisedsignatory of mid-office in the case of the following Deal Tickets: I Since signed2004000203 dated 25-02-20042004000204 dated 25-02-20042004000205 dated 25-02-2004

VERIFICATION OF DEAL TICKETS FROM 2004000158 TO 2004000218OBSERVATIONS

I. DEAL TICKETS:, ,(a) Mid-Office authorised signatory to also sign on the following Deal Ticket at the bottom:

2003000180 dated 16-02-2004

(b)1b.ere are' noDeal Tickets numbered 2004000179 dated 16-02-2004,2004000210 dated27-02-2004 and 2004000212 dated 27-02-2004 on record at the appropriate place.All deal ticket numbers should be accounted for to prevent mis-use.

3. INVESTMENT NOTES:Investment Note Number 2004000145 dated 17-02-2004 for purchase of 6.25% KonkanRailway Corporation Bonds 2014 maturing on 17-02-2014 needs to be filed at the appropriateplace for perusal and record.

4. COUNTERPARTY DEAL CONFIRMATIONS:Deal Confirmations from the following counterparties have still to be received and filed atthe appropriate places:

NAME OF COUNTERPARTYState Bank OfPatialaState Bank OfPatiala


DATE03-02-200403-02-2004

C-FEB 04 (1/3)j,'; ~ s.,

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Since signed

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Since filed

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Since filed

ReceivedReceived

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r DATt ReceivedState Bank QfPatiala 2004000160 03-02-2004 ReceivedAncihraBank 2004000161 04-02-2004 O·State Bank Of India 2004000162 07-02-2004 O·State Bank Of India 2004000163 07-02-2004 8:State Bank Of India 2004000164 07-02-2004State Bank Of India 2004000165 09-02-2004 0*O·State Bank Of India , 2004000166 09-02-2004 8:State Bank Of India 2004000167 09-02-2004Allahabad Bank 2004000168 11-02-2004 Receivedstate Bank Of India 2004000169 12-02-2004 0*Prudential ICleI Mutual Fund 2004000170 13-02-2004 ReceivedPrudential ICICI Mutual Fund 2004000171 13-02-2004 lteceivedPrudential ICIeI Mutual Fund 2004000172 13-02-2004 :ReceivedPrudential ICICI Mutual Fund 2004000173 13-<>2-2004 ReceivedPrudential ICICI Mutrual Fund 2004000174 16-02-2004 ReceivedUTI Bank Ltd. 2004000117 16-02-2004 Received

lteceivedHDFC Mutual Fund 2004000118 16-02-2004 RetnlndedThe Catholic. Syrian Bank Ltd. 2004000179 17-62-2004 ltecel,vedState Bank Of'Patiala 2004000183 11-02-2004 ReceivedUCOBank 2004000184 17-02-2004 ReceivedKonkan Railway Corporation Ltd. 2004000185 17-02-2004 p.,.imary Market Invt.

:ReceivedUCOBank 2004000186 20.l()2-2004 ReceivedState Bank Of India 2004000187 20-02-2004 8:State Bank Of India 2004000193 21-02-2004State Bank of India 2004000194 21-02-2004 0*State Bank Oflrtdia 2004000195 21-02-2004 0*State ad Of India 2004000196 21-02-2004 0*O·. State Bank Of India 2004000197 21-02-2004 Q*

, State:Sank Of India 2004000198 21-02-2004 O·I

State Bank Of'Patiala 2004000199 23-02-2004 Received!l State Bank OfPatiala 2004000200 23-02-2004 Received!,

State Bank Of India 2004000208 26-02-2004i 0*I State Bank Of India 2004000209 26-02-2004 0*\

State Bank Of India 2004000214 27-02,..2004 0*State Bank Of India 2004000215 27-02-2004 0*

C-FEB 04 2/3

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, <;OUNTERPARTY. State Bank Of IndiaState Bank Of IndiaState Bank Of India


DATE27-02-2004 O.27-02-20041 O·27-02-2004 O·

Necessary follow-up needs to be done with the above mentioned counterparties so that alldeal confinnations are received expeditiously.

s.sWMlSSIQN 'Of REPQRTSIMEMORANDA:Yearly review for 2002-2003 had been submitted to EeeB on August 22,2003.Half-yearly review for the half-year ended 30-09-2003 was submitted to the EeeS on22-11-2003

o·Investments in SBIare short term and areeffected by transfer offunds from Current. Account to TDR.Hence, we are notInsisting onconfirmations.

c-,~04 (3/3)_. ~ ,

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ANNEXVlUC. ~;\ pOR;rFoqQ MANAOEMEl'!t ~ JANYAJ!Y 290iC'..;/--.-'-'""'"---.....~_ .••.......•..._ ......•..• --4

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VERIFICATION OF DEAL TICKETS FROM 2003002246 TO 2003002256 AND FROM 1()04000001 TO 2004000157OBSEaVATIONS

. .Pl\1S REPLY

2.DEAL C9NFUWATIQNS OFPM~:(a) Name of counterparty not mentioned above address in copy of PMS Deal Confirmation I SINCE RECTIFEl>

in case of the following Deal Tickets:2004000020 dated 03-01-2004 (complete address to be stated also)2004000021 dated 03-01-2004 (complete address to be stated also)2004000055 dated 14-0r·20042004000056 dated 14-01-20042004000107 dated 23-01-2004 '

(b)The filed copy of the PMS deal confirmation should also be authenticated by the. authorisedsignatory of mid-office in the case of the following Deal tickets: I SINCE SIGNEI)2004000005 dated 01-01-2004 '2004000021 dated 03-01-2004'2004000069 dated 16-01-20042004000073 dated 19-01-20042004000136 dated 28-01-20042004000137 dated 29-01-20042004000138 dated 29-01-2004

2004QOPl~~9~t"e~42~-Q1:2004

1. DEALllCKElS:(a)Front Office authorised signatory to also sign on the following Deal Tickets at the bottom:

2004000107 dated 23-01-20042004000153 dated 30-01-2004

(b)Mid-Office authorised signatory to also sign on the following Deal Tickets at the bottom:2003002255 dated 31-12-20032004000005 dated 01-01-20042004000139 dated 29-01-20042004000156 dated 31-01-2004

(c)There are no Deal Tickets numbered 2004000001,2004000033,2004000071,2004000108on record at the appropriate place.AIl deal ticket nwnbers should be accounted for to prevent mis-use.

c- JAN 04.(1/3)

SINCE RECTIFIED

SINCE SIGNED

SINCE 'l'RACED AND FILED

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2004000142 dated 29-01-20042004000143 dated 29"01-20042004000144, dated 29-01-2004 '

(c)The filed copy ofPMS deal confirmation in respect of Deal Ticket Number 2004000107 IThe deal confirmation wasdated 23-01-2004 was generated on 17-02-2004.Care should be taken to promptly generate. regenerated on 17-02-04 •.and send all PMSconfinnations soon after the deal is finalised. .

3. INVESTMENT NOTES:(a) Investment Note Number 2004000058 dated 16-01-2004 for investment ofRs. 16 crores with I Since filed

Syndicate Bank for 364 days at 5.70% quarterly compounded should be filed at theappropriate place for perusal and record(Deal Ticket number 2004000070 dated 16-01-2004)

(b) The PMS recommending functionary should also sign with designation below the quotes ofbrokers and above the vetting by the Investment Committee of PMS Cell on the Investment. I Since signedNoteNumber 2004000103 dated 28-01-2004.

4. COUNTERPARTY DEAL CONFIRMATIONS:Deal Confirmations from the following counterparties have still to be received and filed atthe appropriate places:

NAME OF COUNTERPARTYSBI Gilts LimitedSBI Gilts LimitedlOBI Capital Market Services LimitedAllahabad BankAllahabad BankIndustrial Development Bank Of IndiaMah. Krishna Valley Development CorporationICICI LimitedICICI LimitedICICI LimitedICICI LimitedHousing Development Finance CorporationlOBI Capital Market Services LimitedAllahabad BanklOBI Capital Market Services Limited


DATE14-01-200414-01-200421-01-200421-01-200422-01-200408-01-200408-01-200408-01-200408-01-200408-01-200408-01-200420-01-200427-01-200427-01-200427-01-2004

ReceivedReceivedReceived

ReceivedReceived

c- JAN 04 (2/3)

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Odeal tickets 2004000120 to02004000126 are acceptanceOcases and hence they will noto have any deal confirmations.o8ReceivedReceivedReceived

Received

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," ,.,. NAM£ OF COUNT~,lU'ARTY DEAL TICKET NUMB~, Indian Bank' 2004000130

!DB! Capital Market Services Limited 2004000137IDBI Capital Market Services Limited 2004000138Allahabad Bank 2004000140IDBI Capital Market Services Limited 2004000141Prudential ICIeI Mutual Fund 2004000143IDBI Capital Market Services Limited 2004000144PNB Gilts Limited 2004000145Indian Bank 2004000146Indian Bank 2004000147Indian Bank 2004000148Dena Bank 2004000149Allahabad Bank 2004000150PNa Oilts Limited 2004000151IDSl Capital Market Services Limited 2004000152Allahabad Bank 2004000153Imllun Bunk 20040001 S4Tbe Fcdcrul13unk Limited 2004000155Indian Dunk 2004000156

DATE 1"''':;('I..:"

27-01-200429-01-2004 Received.29-01-2004 Received29-01-2004 Received

I 429-01-2004 Reminded29-01.,2004 Received

29-01-2004 ReceivedReceived

30-01-2004 Received30-01-2004 Received30-01-2004 Received

130-01-2004 Received

30-01-2004 Receivedl'teminded

30-01-2004 necelvcd30-01-2004 Received30-01-2004 Received30-01-2004 ~ccelvccJ31-01-2004 Received

Received31-01-2004 Received31-01-2004 Reminded

Received 'Necessary follow-up needs to be done with the above mentioned counterparties so that alldeal confirmations are received expeditiously.

5.SUBMIS§IQN OFREPORTSlMEMOMNDA:Yearly review for 2002-2003 had been submitted to BeeS on August 22,2003.Half-yearly review for the half-year ended 30-09-2003 was submitted to the BeeB on22-11-2003

C-JAN 04(3/3)

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Treasury Department. Corporate Centt"e ..State-Bank of India PostBox No. 12. Mumba·f-400 021.~/Fax:2204 5468/2202 8779 12286 8220m/Telegram : APEX

ITHE REGIONAL PROVIDENT FUND COMMISSIONER ( INVST)EMPLOYEES PROVIDENT FUND ORGANISATIONBHA VISHY A NIDHI BHA VAN , 14 , BHIKAJI CAMA PLACE,NEW DELHI - 110066

L~. ~./No. ~/Date: 17.06.2004Tr.l PMS/.s<\~

Dear Sir,

IDLE FUNDS STATEMENT FOR THE PERIOD:01.06.2(}04 TO 15.il6.2004

We forward herewith the abovementioned statement for your kindinformation. The average idle funds for the period were Rs. 22.45 crore, inspiteof the fact that we had set funds aside for the auction ( re-issue) of6:01 % G.S.2028{)11 03/06/04.

Yours. faithfully,

fur ~neral Manager(PMS&CS)

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IDLE FUNDS STATEMENT FOR THE PERIOD 01.06.04 TO 15.06.04'"

.-}, •... r:DATE OPENING INVESTMENTS MADE YTM AMOUNT VAlUE CLOSING-

BAlANCE'" .DATE .BAlANCE ('RS.CRORE ( % ) RS.CR. RS.CRORE r:

01-06-04 30.39 7.85% PGC BONDS 2007 5.7172 22;52 02-06-048.63% PGC BONDS 2007 5.7178 11.54 02-06-04 (6.10% PGC BONDS 2007 5.7159 5.32 02-06-04 -8.99

TOTAL 39.38 (-

02-06-04 109.53 10.25% G.S. 2021 6.1538 35.71 02-06-04 73.82 r03-06-04 85.38 12.60% G.S. 2018 6.1032 16.22 03-06-04 ("

12.30% G.S. 2016 5.9720 15.91 03-06-04 53.25TOTAL 32.13

04-06-04 17.71 12.60% G.S. 2018 6.1026 40.56 04-06-04 ( .12.60% G.S. 2018 6.1026 8.11 04-06-044% FD SBI FOR 10 DAYS 4.0000 20.00 04-06-04 9.04

TOTAL 68.67

05-06-04 9.04 4% FD SBI FOR 33 DAYS 4.0000 9.00 05-06:.04 0.04

06-06-04 0.23 SUNDAY 0.23 (

07-06-04 0.23 NO TRANSACTIONS 0.23

08~06-04 2.91 11.43 % G.S.2015 5.7078 15.06 OS-06-04 (

11.83% G.S.2014 5_6440 14,91 08-06-0411.83% G.S.2014 5.6440 22.37 08-06-0411.50% G.S.2015 5.7256 14.70 08-06-047.63% IRFC BONDS 2009 6.0539 5:44 09-06-047.63% IRFC BONDS 2007 5.8503 10.68 09-06-046.20% IRFC BONDS 2008 5.9559 5.11 09-06-04 -85.36 .'

TOTAL 88.27-,

09-06-04 23.31 6.90%REC BONDS 09 P/C07 5_8500 10.44 10-06-04 12.87

10-06-04 32.40 11.430/0G. S. 2015 5.7537 15.02 10-06-049.25%PFCBONDS 12 PIC 09 6.0601 8.36 11-06-04TR. TO MUMBAI MAIN BR. 19.00 10-06-04 -9.98

TOTAL 42.38

11-06-04 0.16 12.30% G.S. 2016 6.0453 4.75 11-06-04 -4.59

12-06-04 8.64 12.30% G.S. 2016 7.92 12-06-04 0.72

13-06-04 5.02 SUNDAY 5.02

14-06-04 5.02 11.43% G.S. 2015 5.8702 14.90 14-06-04

11.83% G.S. 2014 5.8125 14.76 14-06-047.70% NHPC BONDS 2010 6.2000 16.03 15-06-047.70% NHPC BONDS 2009 6.1500 4.50 15-06-04 -45.17

TOTAL 50.19

15-06-04 2.15 9.70% PGC BONDS 2010 6.3040 5.91 16·06-046.00%REC BONDS'10 P/C08 6.2000 5.03 16-06-04 -8.79

TOTAL 10.94

AVERAGE IDLE FUNDS DURING THE FORTNIGHT: RS. 10.348 CRORE

-rvlAL AV£RAit-f. IcD1-£ (VNDS KJr<-- ALl- Tl-fAa AUc>VNT,S

Q '0' 3lf-S .,.' q ./113 + 2.- q ~ ) t-t<DI\£ :: :1.Z- 4-tr9.3 U{c>RE. •W£'R~ =

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EPF ACC;OUNT NO. 25 . './ ~. l '--.,

. IDLEFUNDSSTATEMENTFORTHEPERIOD01:06.0'4 TO 15.06.04 ",DATE OPENING' " iNVESTMENTS YTM AMOUNl VALUE

SALANGE MADE DATE{ Rs. CR.J %' (RS. CR.)

01-06-04

C12-06-04

03-06-04

04-06-04

05-06-04

00-06-04

07'-06-04

08-06-04

09-{)6-04

1"0-06-04

11-06-04

12-06-04

13-06-04

( 14-06-04

15-06-04

9.40'

10.67

11.33

12.39

2.50

2.99

2.99

0.31

0.80

6.37

0.04

1.46

1.67

1.67

1.11

CLOSINGBALANCEfRS.CR.)

NO TRANSACTIONS 9.40


NO TRANSACTIONS o 1·1.33

4% FO SBI FORi0 DAYS 4.0000 10.00 04-06-04 2.39


SUNDAY 2.99

5.99% IRFC BONOS 2009 6.0547 2.83 08-06-04 0.1"6



9.25%PFC BONDS12P/C09 0.0601 6.35 11-06-04 0.02


NO TRANSACT tONS 1.46

SUNDAY 1.67

7.70% NHPC BONDS 2009 6.1500 10.60 15-06-04 -8.93


AVERA<3E IDLE FUNDS DURING THE PER100 : RS.2.99CRORE

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r: r:EPF ACCOUNT NO.11 "_.-c_ (-.IDLE FUNDS STATEMENT FOR THE PERIOD 01.06.04 TO 15.06.04

DATE OPENING INVESTMENTS MADE YTM AMOUN1VAlUE CLOSINGBALANCE DATE B~CE (

(Rs. CR.) ( % ) (Rs. CR.) . (Rs. CR.)(

01-O6...()4 109.23 10.03% G.S. 2019 6.0631 7.11 01-06-046.30% G.S.2030 6.1189 5.15 01-06-04 (6%REC BONDS 2010 PIC 2008 5.9100 '5.07 . .02-06"-04 ..,6.10% Nf>C BONDS 2014 6.1739 50.38 02-0644 (7.50% PFC BONDS 2009 PIC 07 5.7156 22.10 02-06-04 19.42TOTAL 89.81

02-06-04 41.20 NO TRANSACTIONS 41.20

03-06-04 49.57 NO TRf,NSACTIONS 49.57

04-06-04 123.73 6%REC BONDS 2010 PIC 2008 5.9100 20.28 07-06-046%REC BONDS 2010 PIC 2008 5.9100 10.14 07-06-044% FD WITH SBI FOR 18 DAYS 4.0000 50.00 04-06-044% FD WITH SBI FOR 12 DAYS 4.0000 50.00 04-06-04 -6.69

TOTAL 130.42

05-06-04 30.75 4% FD WITH SBI FOR 33 DAYS 4.0000 41.00 05-06-04 -10.25

06-06-04 8.15 SUNDAY 8.15

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07-06-04 8.15 6.10% IRFC BONDS 2008 5.9562 5.08 08-06-045.99% IRFC BONDS 2009 6.0547 2.23 08-06-04 0.84TOTAL 7.31


09c06-04 17.45 12.00% G.S. 2018 6.1258 40.52 09-06-04 (5.75% NABARD BONDS 2008 5.8679 10.46 10-06-045.75% NABARDBONDS 2008 5.8679 5.23 10-06-045.75% NABARD BONDS 2008 5.8679 15.70 10-06-045.75% NABARD BONDS 2008 5.8679 10.46 10-06-04 -64.92TOTAL 82.37

10-06-04 11.98 10.71% G.S.2016 5.8623 21.38 10-06-0411.83% G.S. 2014 5.7164 14.84 10-06-049.25% PFC BONDS2012 PIC '09 6,0601 19.94 11-06-045.75% NABARD BONDS 2006 5.9079 15.67 11-06-04 -59.85

TOTAL 71.83

SALE 4.5% FD SBI MATU.R.07/07/04 4.1)000 50.12 10-06-04 -9.73

11-06-04 1.15 10.25% G.S. 2021 6.2292 7.10 11-06-0412.30% G.S.2016 6.0453 15.85 11-06-0412.30% G.S.2016 6.0453 11.09 11-06-04 -32.89TOTAL 34.04


SUNDAY 8.85 t13~06-04 8.85 ..14-06-04 8.85 7.70%NHPC BONDS 2010 6.2000 7.48 15-06-04

7.70% NHPC BONDS 2009 6.1500 0.79 15-06-04 0.58TOTAL 8.27

15-06-04 1.74 8.63% PGe BONDS 2009 6.2592 11.77 16-06-048.63% PGC BONDS 2009 6.2592 5.88 16-06-04 -15.91TOTAL 17.65

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."'/Fax.: 220454681.22028779/22861220·lm'/T."~.m ·:APEX...

. . .. f\.~\-l~O(~eF~ FTHE REGIONAL PROVIDENT FUND.COM;MISSIONER (INVST)EMPLOYEES PROVIDENT FUND ORGANISATION -__ .BRA VISIlY A NIDm BBAYAN, 14 , BHIKAJI CAMA PLACE,NEWDELm-llOO66 ..

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L~. ~/No. T IPMs/~cti r. ,/V,/ ~/D.te: 08 6.0 .2004

Dear Sir,

IDLE FUNDS STATEMENT FOR THE PERIOD:(1) 16.05.2004 TO 31~S.lO04

(

W.eforward herewith the abov-ementioned statement for your kindinformation. The average idle funds for the period were Rs. 36.58 crore.Tbeposition of the idk funds has been somewhat distorted by the fact that wehad to accumulate funds n-om 25/{)5/2004 to 27/0512004 for investing Rs,120.00 crore on 2810512004 in the primary issue of 5.7{) % StateDevelopment Loans 20 14.

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Yours faithfully,««.(PMS"& CS)

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92/01/2001 08:19 2818746 SBI PHS

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PAGE 08

DATE

_ .EPF. ACCOuNT·NO. 25IDLE FUNDS STATEMENT FQR ntE PeRIOD 16..05.04 '1"031.05.04OPENING INVESTMENTS··· YTM AMOUHlVALUE;BALANCE MADE DATe .( RIs.CR.)' % (RS. CR.)

16-05-0417-:O?-04

18-O~419-05-0420-05-0421-05-0422-05-0423-05-0424-05-0425-05-0426-05-0427-05-0428-05-0429-05-0430-05-0431-OS-04

0.08O;os-sAi..e

13.2413.3213.7515.981.612.722.724.555.335.186.820.460.850.85

SALE

SUNDAY . ..5.3O%-se'FO FOR 6 MTHS·~TURING 28110104_ .5.30% SBJ FO fOR 20·1DAYSMATURING' 17/11104

TOTAL SALESNO TRANsACTIONSNO TRANSACTlONSNO TRANSACTIONS, 1.43% O.S. 2015NO TRANSACTIONSSUNDAYNO TRANSACTIONSNO TRANSACTIONSNO TRANSACTIONSNO TRANSACTIONS10.03% GS 2019NO TRANSACTIONSSUNDAYNO TRANSACTIONS

4.2500

4.2500

5.5803

5.9440

Average idle funds during !he fortnight: Rs. 5.00 crore

\,\ \

8.02 11-t5-04

5.01 17-05:-0413.03

15.16 21-05-04

1.18 2~

CLOSiNGBAl.ANOE(RS.CR.)

0.08

. 13.11

13.2413.3213.75

- 1.611.612.722.n4.555.335.78-0.360.460.850.85

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DATE

EPf ACCOUNTNO.11 ' .... IDLE FUNOS STATEMENT FOR THE PERJQD 1e.os.cM TO 31.05.04·

OPEN1HG INVESTMENTSMADE YTM . AMOUNlVAlJJEaALANC£ PATE(R •. CR.) (% ) (Rs. CR.)

CLOSINGBAI..ANC£( Rs.CR)

16-05-44 8.02 SUNDAY17-05-04 8.02 10.25% G.S. 2021 5.9246 7.54 17-05-04

10.47%G.S. 2015 5.588.1 28.35 17-05-0410.45% G. S. 2018 5.1845 t4.47 17-05-04

/ . 10.45%G. S. 2018 5.8050 43.35 17..()5.()4

12.60%·G.S.2018 5.9534 42.52 17-05-045.85% GAlL 2010 BONOS 6.0521 9.99 18-05-045.85% GAIL 2011 BONOS 6.0523 9.97 18-05-045.85% GAIL 2012 BONOS 6.0538 9.96 18-05-045.85% GAIL 2013 BONOS 6.0534 9.95 18-()5.()4

SALE 6.30% S8t FO FOR 6 MONTHSMATURING 28110104 4.2500 22.05 17-05-04

SALe: 5% 581 FO FOR 48 DAYSMATUR.15-06-04 4.2500 50.11 17-05-04

~lpUIJO ·lAO~~".I~~OFOR201 DAYS4.2500 45.09 17-05-04• . U~ 17/11104.

(~JUOOd 'S'a) TOTAL PURCHASES' 176.fOTOTAL SALES 111.25

18-05-04 4.12 10.71%<i.S.2016 5.7142 14.36 1~19.:()5-Q4 42.51 4.50% S81 FOFOR 49 DAYS

MATURING 07107104 4.5000 50.00 1~44.5O%SBI FO FOR 580AYSMATURI~ ON 16-07.()4 4.5000 SO.OO 19-05-04

8.02

-SO.83.10.24

·57.49

18.13

20-05-0421-05-0422-05-04VN

VN

2J.05-04 YN24-05-04VN25-05-04 VN1

VN

26-Q5-04VN27'-05-04 V N28-05-04

VNVNVNVN

2'9-05-04 NO TRANSACTIONS8.13

31-05-04 24.19

·UO!PUSUUll ~4l JO s~p!1euoq at{llnoqe siqnopsnoues oi ~!l iiu!.\!~ 'A:uudwo:) ::l41 .10 s~:)Aotdw:) 'lU:)WW::lAOD

~4l JO SlS::l.l::llU! Iu!;)mmu a41 U! lOU SUM pus :)nlt?A l~)(leW l'~~ll!aqlump .laMOI qoruu lE SUO!}tn!lual U! palIns:)l S!4l ·l~dUO!phe {UOOIe

.:' DAlEf

EPFO MAIN ACCOUNTIDLE FUNDS STATEMENT FORTHE PERIOD16.05.04 TO 31.05.~ '..OPeNING· INv£STMEHTSMADE . YTM. AMQUNT VAUJECLOSINGBALANCE. . .. . . . ~TE BAi.At4ce

RS.CRORE ( %) RS.CR. R$.C~E ...

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16--05-04 5.79 SUNDAY 5.7917-05-04 5.79 6.10% PGC2010 . 5.9559 5.29 18-05-04

6.10",(, NPC BONQS2014 6.1038 10.10 18-05-046.10% NPC BONDS 2014 6.1038 SO.51 1.8-05-:04.6.68% PGC 2014 6.1057 5.28 .,8-05-045.85% GAIL BON052014 6.0532 5.96 18-050045.85% GAIL -BONOS 2011 6.0500 5.24 18-05-04

TOTAL . 82.36SALE 5.30% S81 FO FOR 6 MONTHS

MATURING 28/10104 4.2500 20.04 17-05-04SALE 5.30% S8. FD FOR 186 DAYS

MATURING 0211112004 4.2500 SO.10 17-05-04 -6.45

18-05-04 3.08 NO TRANSACTIONS 3.0819-05-04 5.36 NO TRANSACTIONS 5.3620-05-04 5.36 6.30% G.5.2023 5.8795 12.66 2()..()5.04 -7.3021..()5-04 6.12 NO TRANSACTIONS 6.1222-05-04 24.29 NO TRANSACTIONS 24.2923-05-04 70.33 SUNDAY 70.3324-05-04 70.33 6.75% ORISSA SOl 20,3 5.8300 10.76 24-05-04

6.75%W.8.S0I.2013 5.8400 10.75 24.()5-047.80% T. N. SOL 2012 5.8296 22.96 24-05-04e.75%RAJASTI"IAN SD12013 5.8300 10.76 24-()5.()4

. TOTAL 55.23 15.1025-05-04 53.36 NO TRANSACTIONS 53.3626..()5{)4 58.06 NO TRANSACTIONS 58.0627-05-04 59.61 NO TRANSACTIONS 59.6128"()S-04 74.11 5.70% tJp SOL 2014(2815114) 5.7000 82.00 -7.8929"()S-04 3.44 NO TRANSACTIONS 3.4430-05-04 10.44 SUNDAY 10.4431-05-04 30,39 10.25% GS 2021 6.1396 35.75. 3J-05-04

10.45% GS 2018 5.9983 21.37 31-05-0410.45% GS 2016 5.9983 14.25 31-05-04 -40.98

TOTAl 71.37

Average Idle funds during the fortnight: Rs. 19.69 Crore~

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Total average idle funds for /he fortnight: Rs. 19.69 er .• Rs. 11.89 cr.+Rs.S.OOct.: Rs.36.5&crore

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82/81/2881 88:19 2818746SBr PMS PAGE a1

ql(dlQm·~State Bank of India

.• ~.ifif{,",.~~; cri ,~~ .. 12,1j"irf-400 021. . - - .Treasury Departriient, Corporate Centre.Post Sox No. 12. Mum~i..fOO 021. .~/Fax: 22445468 12202 8179I 2286 8220.«nt/Te'e9r~m: ApeX

rras REGIONAL PROVIDENT FUND COMMISSIONER (INVST)EMPLOYEES PROVIDENT FUND'QRGANtSATIONBHAVISHYA NIDHl BHAY AN, 14 ,BIUKAJI CAMA PLACE,fEW DELHI-II 0066

;;re. ~/ No. ~/Oate:

Dear Sir,Tr.l PMS/)'o'1- 07.06.2004

IDLE FUNDS STATEMENT FOR THE PERIOD:(1) 01.05.2004 TO 15.05.2004

(

We enclose the Idle Funds statement for the captioned fortnight for yourinformation and perusal. The average idle funds for the period were Rs,62.11 crore, a figure which would have been considerably lower but for thefact that there were 3 holidays in the first week of May and that we hadaccumulssed funds for subscription to the auction of 6.01% {J.S.2028:(r-e-issue), where our bids submitted on .()6fOS/2004 were not accepted by RBI.

Yours faithfully,--filii!i:f!:ager(PMS & CS)

-82/81/2661 68:19 2818746 sar PMS PAGE 6S

'q·I(dl~ ".~"""~ ~.State Bank of India

'.- t1rirPr, "'(~zS:l. '".~. 'J5'. 12,"':'400021 ..Tfe~"'YPepanment,CorpoAteCentte .P.,.t Sox ~. 120Mumb,tl-400 021.~IFItl(: 2%0454681 2202877~ , 2286 8220l'm'/T.legfilm ; APEX

"IUlE REGIONAL PROVIDENT FUND COMMISSIONER (INVST)EMPLOYEES PROVIDENT FtJNDORGANISATIONBHA VISHYA NIDHI BHAV AN , 14 , BHIKAJI CAMA PLACE,NEW DELHI -110066

L~. ~/No. TrJPMS/5V~ ft-ri;,; I Date: 08 06 4.. 200

Dear Sir,


We forward herewith the abovementioned statement for your kindinformation. The average idle funds for the period were Rs, 36.58 crore, Theposition of the idle funds has been somewhat distorted by the factthat wehad to accumulate" funds from 25/05/2004 to 27/0512004 for investing Rs.120.00 crore on 2810512004 in the primary issue of 5.70 % StateDevelopment Loans 2014.

Yours faithfully,

for Deputy General Manager(PMS& CS)

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ry~----~---.~,'I=I~Z.F=A~C~OOU~··~·~N=T~N~O~.~25~--------..~I~~·~r-I~---r------r-~---,; IDLE FUNDSSTAreMENT FOR THE PERIOD 01.05.2004 TO 15.05.20G4 ~_',

62/61/2661 68:19 2818746 SBI f'MS PAl3£. 64

.OPENING INVESTMENTS .YrM AMO\IHT <0 VALUE·DATE"BALAHCE MADE DATE.f( Rs.CR. % . R$.CR..1.

01105104 1.67 HOltOAYtMAHARASHTRADAV;

02/05/04 1.67 SUNOAY~. i 03I05I04 1.67 .NO TRANSACTIONS

I04105104 2.32 . HOI..IOAY(BUOHPURNlMAl

(05105104 2.32 NO TRANSACTIONS

06105/04' 6.2S NO TRANSACTIONSJ

07105104 6.63 NO TRANSACTIONS1

08I05I04 6.88 NO TRANSACTIONS

09105104 7.22 SQNOAY

10105104 7.22 10.71% GOVT STOCK 20161

11/05/04 0.28 !NOTRANSACTIQNS1

1?tro:Jn. 0.61 NO TRANSACTIONSI

13105104. 1.26' NO TRANSACTIONS

14105/04 1.50 NO TRANSACTIQNS

15I05I04 1,84 10.71% oovr STOCK 2016f'"

-' -,1.67

1.67.

1.67

2.32

2.32

6.2~

6.63

5.6053:

5.647~

7..2.3 1

6.88

7.22

0.2$

0.67

1.26

1.50

-0.54

Average Idle Funds forthe period 0110512004 to 15/0512004=Rlt6bore

'\ \ J, \ 1:--

-"-...

62/61/2661 08:19

DATE

2919746

-.---.- -.- ..'. - -""1'._- .. " .

58I PHS PAGE 63

"CLOSING

[RII.CR.)" -, .' .L% iRs.eft. (RS. CR.)

20.59

~~~~~~~ __ ~SUNDAY ~~ ~~~-; ;- ,- __ -=20~.5-,9

r==+-==t __ -tNO TRANSACTIONS

t--::::-:-;;;;=.t-~":'"';;';;:t-----t HOLJPAY{~bU-::D:-:H~P::::U-::RN::-:-;:;IM;'7"A&":~}--~f-"-----t"";"'-;---;---:;-3'~.6<>nt9

20.59

JNO TRANSACTIONS

J5.90% N' SDl2017 5.7600 10.29 OrJ05f04

. 5.9560 16.25 101C)5I04

5.9560 5.41 10/05J04

5.8047 3.20 10I05I04

5.7582 .5.23 10I06I04..0.38

5.9073 11.76 10/0Sf04

4.2500 50.00 08105104

4.2500 SO.OO 08105104

111.76

.16.35% EXIM2013 BONDS(19/6/13

I6,35% t:>C1M2013BONDS(23J6I13

I6.Q8% IRFC 2010 BONDS

I6.31% EXIM 2010 BONOS

(115.96

(

(

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08105104 88.77 7.85% EXIM 2012 SONDS1

4.25~ 5.81 FP FOR 10 DAYSMAT. 18I05I04

I4.25" S81FD FOR 11 DAYSMAT. 191Q51()4

85.48(

(

SUNDAY

-22.99

09/05104 10.7310.73

10105104 10.73 10.71% GOVT STOCK 2016 5.6053 7.23 10105/04 3.50

11105104 3.50I

NO TRANSACTIONS 3.50I

12105104

13/05104

63.38

87.77

NO TRANSACTIONS

11.43% GOVT STOCK 2015.1

6.68% PGC 2008 BONDS

6.10% PGC 2008 BONDS

7.85% PGC 20087 BONDS

5.5449 37.93 13105104

5.6052 5.25 14105104

5.6081 5.34 14105104

6.6099 17.15 14/0510465.67 22.10

63.38\.

~..

14105104 25.63 11.43% GOVT STOCK 2015 5.5488 22.76 14/05104.1

11.43% GOVT STOCK 2015 5.5580 15.16 14105/041 37.92

15/05104 1.09 10.71% GOVT STOCK 2016 5.6474 9.09 15105104.1

II

-12.29

-8.00

Average Idte Funds for the period 0110512004 to 1510512004-Rs 28.65 Crore------'

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82/01/2601 08:19 2818746 SBI PMS PNSE: 02

.-. , EPFO'MAiH ACCOUNT, I I I.

IDI..EFtJNOS STATEMENT FOR THE PERIOD 01.G5.04 TO 15.05..04- ..

DAT£ OPENING INVesTMENTS MADE YTM- 'AMOUNTPVAlUE ·C ••OStNG.· •.

BAlANCE - -. .. , I DATE BAlANCE-

RS.CRORE - ( %) RS.CRORE-- RS~CRORE.'

.

01105104 38.96 HOUDAY(MAHARASHTRA DAY) 38-,96

02I05I04 38.96 SUNDAY- .. , 38.96r03I05I04 38.96 NO TRANSACnONS 38.96

-- ~04105104 45.44 .' HOLIOAY{BUDHPURNIMA) 45;,44

t

05105104 45.44 &.63% PGC2010BONOS 5.757~ 6.06 39.38.06105104 106.48 NO TRANSACTIONS 106.48

07I05I04 117;09 8.63% PGC 2010 BONOS 5.7575 12.14 10J0S104

. 8.63% PGC 2010 BONOS 5.7575 1-2.14 1a105104

6.25% EXIM BONDS 2010 5.7562 17.73 10I05I04

6.31% EXIM BONDS 2011 6.8354, ·5.22 1~

6.68% PGC 2010 BONOS 5.7564 5.2t6.10% PGC 2010 BONOS 5.7558 10.67 10105104

6.~% P(lC 2010 BONOS 5:'564 5.~9 1~

6;68% PGC 2010 BONOS 6.7564 5.2973.77. 43.32

08105104 47.23 'NO TRANSACTIONS 47.~3:

09105104 53.13 SUNDAY 53.13

10105104· 53.13 10.71% GOVT. STOCK 2016 5.5826 36.22 10105104

. 10.71% GOVT STOCK 2016 5.6053 21.69 10/05104,57.91 4.78

11105104 0.70 NO TRANSACTIONS 0.70


13105104 21.63 7.85% PGC 2008 BONOS 5.6099 5.72 14105104

.8.63% PGC 2008 BONOS 5.6107 -5.89 14J05.'04

6.68% PGC 2008 BONOS 6.6052 6.26 1410510416.86 4.77

14I05I04 4.77 11.43%-GOVT STOCK 2015. 5.5488 3O.3S 14105104

10.45% GOVT STOCK 2018 5.745f 14.52 lA1n~

10.45% GOVT STOCK 2018 5.7451 14.52 1410510459.39 -54.62-

15/05104 4.88 11.83% GOVT STOCK 2014 5.5392: 12.72 15105104 -7.84

Average Idle Funds for the period 0110512004 to 1'S105I2004=Rs 3O.77#-CmreI

~t-~ ~~ ,~ ~ -;= £. '3~.'11k +~-7-~,'t; V. + Ii. 2·6Q tA--. :- /h.6:L"IJ tAott·

132/01/2001 07:48 2818746SBr PMs

PAGE a1t:

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---·qllftlq:-:-,~.-,\!'::.~~t1i;..-"_~'.~,,=,~,:-*q,.tt ;~~T;". ~__ 0Z1.- .'- '; . __ c.

Tte'asW; Oepartmefit.CorpoTale~tre.'PostBoX No.12.Mumb.(-4000~1.~IF.x :~$468 122028779/2286 8220lm/T.'fM9ram : APEX

State Bank of India ('

Tr~: .~.

THE REGIONAL PROVIDENT FUND COMMISSIONEB. (INVST)EMPLOYEES PROVIDENT FUND ORGANISATIONBHAVlSIlYA NIDHI BHAVAN, 14, BHIKAJI CAMAPLACE,fEW DELHI - 110066

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Dear Sir,Tr.l PMSl5l>'t 07.06.2004

IDLE FUNDS STATEMENT FOR THE PERlOD:(1) 01.05.2004 TO 15.05.2004

(

We enclose the Idle Funds statement for the captioned fortnight for your -jnforrnation and perusal. The average idle funds for the period were Rs.62.11 crore, a figure which would have been considerably lower but for thefact that there were 3 holidays in the first week of'May and that we hadaccumulated funds for subscription to the auction of 6.01% G.S. 2028(re-issue), where our bids submitted on 06/0512004 were not accepted by RBI. (

Yours faithfully,

-r~ag~(PMS &CS)

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-DATE AAl.ANefl

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38.96II HA OAf}

·38.96

38,9Ei ;flONSNUl' .n.••. 45.44

6.Q6 39.384S.44 5.7575-

:TJONS106.46

8:63% PGC 2010 BONDS.

5.7575 12:14

8:63% PGC2010B()NDS SJ'61~ 12.14 ~

~EXIU BONn~ 2010 6.7562 17.73 .hlnl:ln,

6.31% EXiM $lNt)S 2011 6.83~ 5.22

6.68% PGC20W DVNU~ 5.7564 5.29

6.10% PGC 2Q10BONO~ 5.7558 TO.61- ••~ ~20109ONOS -~~

5.29

IEt~~ 5.7564 5.29 IUIU:W<\73.71

IJIIU:NQ4 117.09

43.32

.4723t. 47.23('J fiQ/OQIl 53.13

10/05104 53.13

(

( 11105104 0.70

( -....: 4.28

}37u>JlV't 21.63

~I

to:ff%GOVTSTOCK 2016 5.5826 36.22 i 0JA1Vt1

[10.71% GOVT STOCK2016 5.60~ 21.69 10105Ml4

INOT ~TIONS

NOTAAII..IC IK)N~

5.725.60997.85% PGc 2008 B()NDS

'6.63% PGC 2006 BONDS 5:6101

5.6052 5.25 •..•j6.68% PGC 2008 O'JI'C\R:4.71

11.43o/.;oovr STOCK 2015 5.5488 30.35

,11.83% GoVT STOCK 2014 5:539'"Z 12.724.881:Wu~.

Average Idle Funds for the period 0110512004 to 15105I2OO4JtRs 30.71.-(;«>1"8

,;ro.l ~~ ;oli.L, ~ -::: ~. 39· f t:t fA: +~,'2,.~. ,> ~ +~.2.·6 q vr. = ~ .62.011 Ui>rt·

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---

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PIV?E. 63

_c - ,. ",', .--,'. " ~j i s: - .' -EPfACCOUNT "0.11 ' ~.-.:~ "J I I

" lOll: FUHOS:SlATatfatrFOIt"tHE PEfUOO01~o.s.;o.tT01$.os.04DATe : ,~f(),PENIN~ fttV£$TlleH'TS,.ADE vnt AMWI'f I ittc: ICLOSING

fSAl.ANCE , OATE BALANCE-IlRa.Ctl.) - (% IfRs.CR;; IUb.CJU- "

01l05J04 '20.59 HOUOAY~HTRA DAY) 20.59"

021051.04 20.59 SUNDAY, 20.59

03105104 20.59 . NO TRANSACTIONS .. 20.59

04/05104, 31.69 HOUDAY(BVOH PORN/MA) 31.69t

05105104 31.69 NO TRANSACTIONS 31.69I

06105104 115;96 NO TRANSACTIONS 115.96I

07105104 125.86 5.90% AP SOL 2017 5.7600 10.29 071OMl4I

6.35% EXIM 2013 OONDSl19161f3 5.9560 16.25 10I05I04f

.6.35% EXIM 2013 8ON[)S(2316f13 5.9560 5.41 10I05I04

I6.98% IRFC 2010 BONOS 5.8047. 3.20 10I05I04

I6.31% EXIM 2010BQNOS 5.7562 6.23 10I05I04

I 40.38 85.48

I08105104 88.71 7.85% EXIM 2012 BONOS 5.9073 11.76. 10I05I04 .

I4.25% S81 FO FOR 10 DAYS 4.2500 50.00 ()81()51<)4

MAT. 18105104,4.25%S61 Fe FOR 11 DAYS 4.2500 SO.OO 08105.1)4MAT. 19105104 .22.e9111,76

10.7309/05104 10.73 SUNDAY

10.73 10.71%OOVT STOCK 2016 5.6053 7.23 10105104 3.SO10105104

1 3.5011/05104 3.SO NO TRANSACTIONS

I 63.3612105104 63.38 NO TRMlSACTIONS

I 37.93 13105f0411.43% GOVT STOCK 2015 5.5449

13105104 87.771 5.25 14lO5104

~.68% PGC 2()()$ BONOS 5.6052

I 5.34 14I05I046.10% PGC 2006 BONDS 5.6081

1 17.15, 14I05I041.85% PGC 20081 BONOS 5.6099

65.67 22.10

I 22.76 14f()5/0411.43% GOVT STOCK 2015 5.5488

14105/04 25.63I 5.5580 15.16 14/05104

, 11.43%GOVT STOCK 2015 37.92 -12.29II 9.09 15I05I04 -8.00

10.71% GOVT STOCK 2016 5.647415105104 1.09 -,

I iod 01105/2004 to 15105/2004=Rs 28.65 CrO/'eAverage Idle Funds fO/' the per

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pfllSE. 84

--JEPF ACCOUNT NO. 2S L -: 1, ,.

IOLE FUNOSSTAl"eMarr fOR THE PERIOD 01.05.%Q04TO 15M.z~ .DATE OPENING -' INVESTMENTS IYTM AMOUNT VALUE CL()S'HG

BAt..ANCe . MADe r: !DATE , 'fJA1.ANce[(b.eR.; , % RS.-CR.J RS.C~),.. ,'

01105104 1.67 HOUDAY(MAHARASHTRA DAY 1.87

02105104 1.67 SUNOAY 1.87

03I05I04 1.67 NO TRANSACTIONS , 1.61I "

04105104 2.32 HOUOAY(BUOH PURNIMAl 2.32-I

05105104 2.~2 NO TRANSACTIONS 2.32.. J06105104 6.25 NO TRANSACTIONS 625

I07105/04 6.63 NO TRANSACTIONS 6.63

j08105104 6.88 NO TRANSACTIONS 6.88.09105104 7.22 SUNDAY 7.22

10105104 7.22 10.71% GOVTS'TOCK 2016 5.6053 7.23 10I05I04 ~.01I


I12105104 0.61 NO TRANSACTIONS 0.87

l13105104 1.26 NO TRANSACTIONS 1.26

I,14105104 1.50 NOTAANSACTIONS 1.50

" 1fi105I04 -OM15105104 1.84 10:71%GOVT STOCK2016 5,6474 2.3a

j.. 12..66Average Idle FundS for' the period Ot105I2004 to 15105I2004=R.S ,'rore

1

1

1

1

1

1

1

1

1

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1

1

1

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1

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62/61/2061 07:48 2818746

''lit(:ft'q. '~State'·Bank -o.flndia·

SB! PMS PAGE 65

.~ ~,""'liq. -.n,- ~iI'. 12,'~--O~t~_ . .'lreasury-pep.ttment. Corponta Centle.·P08tBoXNa. 12. Mumbal-400 021.~IF';" :22" $4G8I 2~02 8n9 12286 8220m/Telegntf!' : APEX

THE REGIONAL PROVIDENT FUND COMMISSIONER (INvST)EMPLOYEES PROVIDENT FUND OR.GANlSATION -BHAVISHYANIDID BHAVAN J 14 ,BHIKAJI CAMA PLACE,NEW DELHI -11 0066

L~. ~/No. Tr.l PMSI50,

Dear Sir,

~ I Date: 08.06.2004


We forward herewith the abovementioned statement for your kindinformation. The average idle funds for the period were Rs. 36.58 crore. Theposition of the idle funds has been somewhat distorted by the fact that wehad to accumulate funds from 25/0512004 to 27/05/2004 for investing Rs.120.00 crore on 28/05/2004 in the primary issue of 5.70% StateDevelopment Loans 2014.

Yours faithfully,

for Deputy General Manager(PMS & CS)

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02/01/2801 07:48 2818146 ssr PHS

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. ~O'''AIN ACCOUNT_IOlEFuHOS sTATEMENT FOR THe PERIOD ~G.OS.04TO 31.OS.0:4 .

.DATe -OPENING' INVESTMENTSMADE YTM AMOUr« .vALUEct.OSJNGSAI.,AHCE OATE BALANCERS.CRORE ( %) RS.CR. RS.CRORE

1CHlS-04 5.79 SUNDAY•.17-05-04 5.19. 6.10% roc 2010 5.9559 529 1~

6.10% NPC ~S 2014 6.1038 10.10 18-05-046.10% NPC'SONOS 2014 6.1038 SO.51 ~6.68% PGC 2014 6.1057 5.28 18-05-045.85% GAIL BONOS 2014 6.0532 5.96 1~5.85% GAIL BONOS 2011 6.9500 524 18..()$()4

TOTAl. 82.38SAL1: 5.30% S81 FD FOR 6 MONTHS

MATURING 28110104 4.2500 20.04 17..()5.()4SAlE 5.30% serre FOR 186 DAYS

MATURING 02111J2()(M 4.2500 50.10 17.0s.04

1~5-04 3.08 NO TRANSACl)ONS19-05-04 5.36 NO TilANSACTfONS2O-OS-04 5.36 6.30% G.S.2023 5.8795 12.66 20..()5.()421-05-04 6.12 NO TRANSACTIONS22.()5-04 24.29 NO TRANSACTIONS23-05-04 70.33 SUNDAY'24..()5-Q4 70.33 6.75% ORISSA SOl 2013 5.8300 10.76 24-05-04

6.75% W. B. SOL 2013 5.8400 10.15 2+05-04

7.80% T. N. SOL 2012 5.8296 22.96 24~6.75%RAJASTHAN SOL2013 5.8300 10.76 24-05-04

TOTAL 552325-05-04 53.36 NO TRANSACTIONS

26~ 58.06 NO TfWCSACl"IONS27.()5.()4 59.6t NOTRANSltCTIONS

5.7000 82.00~~ 74.11 5.70% UP SOL 2014(2815114)

'~-05-04 3.44 NO TRANsACTIONS

30.05-()4 11>.44 SUNDAYii.1396 35.75 31-05-04

31-05-04 30.39 10.25%0520215.9983 21.37 31-05-04

10.45% GS 20185.9983 14.25 31-05-04

1().450f0 GS 2016TOTAL 11.37

5.79

-6.45

3.085.36-1.300.1224.2910.33

15.1053.3658.0659.61-7.893.4410.44

-40.98

Average idle funtis during the foItnight : Rs. 19.69 Crore.5 00 cr = Rs.36.58crOle

. . 1969 er •. Rs.11.89 cr."Rs.. ."'Ie funds for the fortOight . Rs·· .Total aven1lge ••..•

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r02/81/28al 87:48 2818746 SBI PHS PAGE 07 (

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EPF ACCOOHTNO.11."! i!jl":

DATE IDLEFUNOs STATEMENT FOR 1'ffE PERIOO16.lJ5 04 TO 3--.050.. i>

OPENING ItM:STMENTSMAOE YTM - AM" ",' .BALANCE OUNl ~ue CLOSING (-(Rs DATE BAI..AHCE

• CR.) ( % ) (Rs. CR.) (Rs. CR.)16-0.5.()4 8.02 SUNDAY

(-17-05-04 8.02 10.25% G.5. 2021 8.02

5.9246 7.54 17-()S..()410.47% G.S. 2015 5.5881 28.35 17-QS-0410.45% G: S. 201'8 5.7845 14.47 17"()5-0410.45% G. S. 2018 5.8OSO 43.35 17-05..()412.60% G.5. 2018 5.9534 42.52 17~5.85% GAIl. 2010 BONOS 6.0527 9.99 18-Q5-04S.8S%GAIL 201180NDS 6.0523 9.97 18-05-04S.85% GAIL 2012 SONOS 6.0538 9.96 18-05-045.85% GAIL 2013 BONOS 6~0534 9.95 18-05-04

SAlE 5.30% SSI FD FOR 6 MONTHSMATURING 28110104 -4.2500 22.05 17-05-04

SAlE 5% SB! FD FOR 48 DAYS MATUR.15-()6.()4 4.2500 SO.11 17-05-04

SALE 5.30% SBI FD FOR 201 DAYSMATURING 17/11104 4.2500 45.09 17-05-04

TOTAL PURCHASES 176.10TOTAL SALES 117.25 -50.831S-05-04 4.12 10.71% G.S.2016 5.7142 14.36 18-05..()4 -10.2419-05-04 42.51 4.50% SSI FD FOR 49 DAYS

MATURING 07107104 4.5000 50.00 19-05-04 /'

I

4.50% SBI FD FOR 58 DAYSMATURIN~ ON 16-07-04 4.5000 50.00 19-{)5-04 -57.419

TOTAl 100.002()'05-04 4.27 6.30% G.S.2023 5.8795 13.71 2Q..05.()4 -9.4421-05-04 9.73 10.03% G.S.2019 5.8477 28.92 21-05-04 -19.1922-05-04 3.39 6.30% G.S. 2023 5.9008 26.31 22.05-04

"10.25% G. S. 2021 5.9592 7.52 22-05-04 -30.44 CTOTAL 33.113

23-05-04 20.34 SUNDAY. 20.3424-05-04 20.34 NO TRANSACTIONS 20.3-425-05-04 111.39 10.03% GS 2019 5.8659 14.4S 25-05-04

10.03% GS 2019 5.8659 14.45 2s.QS-0410.03% GS 2019 5.8659 14.44 25-05-045.90% AP. SDL2017 5.8482 9.74 25-05-045.90% MAHARASHTRA SDl2017 5.8482 5.12 25-05-046.10'1(,PGe 2009 5.7668 5.33 26-OS-{)49.00% PFC 2009 5.7693 24.38 26-05-04B.OO% PFC 2009 5.7693 18.29 26-05-04 5.19

TOTAL 106.2026-05-04 26.67 NO TRANSACTIONS 26.8727.:05-04 58.46 NO TRANSACTIONS 58.4628-05-04 78.06 5.70% UTTAR PRAD. SOL 2014 5.7000 18.00 28-05-04

5.700/0WEST BENGAL SDl2014 5.7000 20.00 28-05-0410.25% G. S. 2021 5.9937 7.50 28-05-0410.25%G.S. 2021 5.9937 7.51 28-05-0412,60% G.S. 2018 5.9616 8.20 28-05-0412.60% G.5. 2018 . 5.9618 8.20 28:.05-04 8.65

TOTAL 69.4129-05-04 18.13 NO TRANSACTIONS 18.1330-O~O4 24.19 SUNDAY 24.1931-05-04 24.19 12.60% G.S.2018 6.0938 79.89 31-05-04

6.10% PGC 2007 5.6559 5.33 01-06-048.63% PGC 2007 5.6578 5.78 01-06-047.50% PFC 2009 PUT/CAlL 2007 5.6566 16.60 01-06-047.500/0PFC 2009 PUT/CALL 2007 5.6566 11.07 01-06-04 -94.48

TOTAL 118.67

Average idle funds during the fortnight: Rs. 11.89 crore

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DATE

ePF ACCOUNT'NO~ ~ ,JOl.E FUNDS stATEMENT FOR THE PERJOO 16.05.04 TO 31.oS.04OPENIHG INVeSTMENTS YTM -AMouNlVALUE8ALANCE MADE' DATE-(Rs. CR.) % (RS. CR.)

16-05-0417-O~

1-8-05-<>419-05-0420..05-0421-05-04

·22-05-0423-OS-0424-05-0425-05-0426-05-0427-05--0428-05-0429-05-0430-05-0431-05-Q4

.•.. .~"

O.OS0.08 SALE

SALE

13.2413.3213.7515.981.612.722.724.555.335.786.820.460.850.85

SUHOA\'5.30% S8J FO FOR 6 MTHSMATURING 281101045.30% SBt F-OFOR 201QAYSMATURING 17/11104

, . TOTAl. SALESNO TRANSACTIONSNO TRANSAC'TIONSNO TRANSACTIONS1'.43%.(;.S.201SNO TRANSACTIONS

. SUNDAYNO TRANSACTIONSNO 'l"AANSACTIONSNO TRANSACOONSNO TRANSACTIONS10.03% OS 2019NO TRANSACTIONSSUNDAYNO TRANSACTIONS

4.2500

5.5803

5.9440

Average idle fund$ during fhefortnight : Rs. 5;00 crore

8.02 17.05-04

.S.01 17-Os-0413.03

15.16 21-05-04

7.18 4!8-0s-04

CLOSING8Al.ANCe(RS.CR.)

O.oe

13.11

13.2413.3213.751.611.612.722.724.5-55.335..78-0.360.460'.850.a5

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rTHE REGIONAL PROVIDENT FUND COMMISSIONER (INVST)EMPLOYEES PROVIDENT FUND ORGANISATIONBHAVISHYA NIDHI BHAVAN, 14, BHIKAJI CAMA PLACE,NEW DELHI -110066

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'it I(i'fiq .• - -k'Stat.e-Bank of India

'ill. iIi1I'ic5 / No.

Dear Sir,Tr.l PMS/ iqi

.~-tiniPl"'~\<o.q,1(5( .~ •. 12

~-<IOO 021. -T........,~COrporate Centre,Post Box No. 12, MumbaI-4OO021~_/Fax: 2204 546812202 8779 12286 8220em/Telegram: APEX ' (

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19.04.2004 (

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IDLE FUNDS STATEMENTS FOR THE PERIOD:01.04.2004 TO 15.04.2004

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We forward herewith the abovementioned statement for your kindinformation. The average idle funds for the period were Rs. 11.33 crore.

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EPFACCOUNT NO. 25IDLE FUNDS·'STATEMENT'FOR THE PERIOD. 01.04.04 TO 15.04.04 _.~>~:~.',,,"'_. ..

. OPENING . .'INVESTMENTS: . '1._ ·'·"',::'·YTM'· .AMOONi'::iVALUE"'- -CLOSINGBAlANce' . MADi: . . DATE . BALANCE(R$~ CR.)" %. (RS.CR.) (RS. CR.)

.DATE

01/04104 4.54

02104104 . 4.54 '

03104/04 7.41

04/04/04 7.41

05/04/04 7.41

06/04104 0.44

07104104 1.35

08/04/04 0.03

09/04/04 0.04

10/04/04 0.04

1~~/04 0.25

12/04104 0.2:5

13/04/04 0.65-

14/04104 0.25

15/04104 0.25

ANNUAL·CLOSING OF BANKS

5:05% AllAH.BK. FD FOR101 DAYS MAT. 12107104

HOLIDAY (MAHAVIRJAYANTI)

SUNDAY

4.75% OL YCOM SBI FD FOR46 DAY'S MAT 21105104

NO TRANSACTIONS

5% QL Y COMSBI FD FOR 63DAYS MAT. 09106104

NO TRANSACTIONS

HOLIDAY ~D FRIDAY)

4.75% QLY -COM SBI FD FOR83 DAYS MAT. 02107/04

SUNDAY

5.25% QLY couser FO FOR6 MTHS MAT 12/10/04

4.54

5.0500 2.00 02104104 2.54

7.41

7.41

4.7'500 8.00 05104104 -0.59

0.44

5.0000 . 2.0007104104 -0.65

0.03

0.04

4.7500 0.60 10/04104 -0.56

0.25

5.2844 0.50 12104/04 -0.25

5.50%Ql y.-cOM BOM FO FOR 5.53886MTHS 26 DAYS MAT 8111/04

O.SO 13104/04 0.15

0.25

4.2500 0;60 15104/04 ·0.35

HOLlOAY(AMSEOKAR JAYANTI)

4.25% S81 FD FOR 8 DAYSMAT. 23104/04

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Average Idle Funds for the period 01104/2004 to 15/0412004=Rs 11.33 Crore

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EPFOMAIN ACCOUNT ' ,- r ' .~ •

.IDLE FUNOS,STATEM~tir-'FOR Tiie'PERIoD 01~04.04c;rO15.04~04DATE .OPENING -:fNVEsTMENTS MADE YTM AMOUNT' VALUE CLOSING

BAlANCE DATE BAlANCERS.CRORE ( %) RS.CRORE RS.CRORE

01/04/04 10.58 ANNUAL CLOSING OF BANKS

02104/04 10.58 5.05% ALLAH. BK. FD FOR101 DAYS MAT; 1210.7/04

03/04/04 12.99 HOLIDAY (MAHAVIRJAYANTI)

-04/04/04 12.99 SUNDAY

05/04/04 12.99 4.75% QLY COM SBI FD FOR46 DAYS MAT 21/05/04

06/04104 2.98 NO TRANSACTIONS

07104/04 50.71 5% QLY COM SBI FD FOR 63DAYS MAT. 09/06/04

5.0500

4.7500

5.0000

4.25% QLY COM S81 FD FOR 4.250021 DAYS MAT. 28/04/04

TOTAL

08/04/04 0.16 NO TRANSACTIONS

09/04/04 0.32 HOLIDAY (GOOD FRIDAY)

10/04/04 0.32 4.75% QLY COM S81 FD FOR83 DAYS MAT 217/04

11/04/04 3.97 SUNDAY

12104/04 3.97 5.25% QLY COM S81 FD FOR6 MTHS MAT 12/10/04

13/04/04

4.7500

5.2844

14.71 5.50% QLY COM 80M FD FOF 5.53886MTHS 26 DAYS MAT 8/11/04

14/04/04 10.39 HOLlDAY{AMBEDKAR JAYANTI)

15/04/04 10.39 4.25% S81 FD FOR 8 DAYSMAT. 23/04/04

4.2500

48.00 02104104

22.00 05104/04

16.00 07/04104

35.00 07/04/04

51.00

6.30 10104104

3.80 12104104

14.50 13/04/04

11.20 15/04/04

10.58

-37.42

12.99

12.99

-9.01

2.98

-0.29

0.16..(";' (

0.32

-5.98

3.97

0.17

0.21

10.39

-0.81

Average Idle Funds for the period 01/04/2004 to 15/04/2004=Rs 3.65 Crore

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f--0 EPF ACCOUNT NO.11i

IDLE FUNDS STATEMENT FOR THE PERIOD 01.04.04 TO 15.04.04~~r. J DATE OPENING INVESTMENTS MADE YrM . AMOUN1VALUE CLOSINGBALANCE DATE BALANCE'

n (Rs.-CR_) ( % ) (Rs. CR.) (Rs. CR.)

01/04104 L23 ANNUAL ClOSING OF BANKS 1.23,()

02104104 1.23 5.05% ALLAH. BK.FD FOR 112 5.0500 -25.00 02104/04'r: DAYS MAT 23107104

() "" 5.05% ALLAH. BK. FD FOR 111 5.0500 SO.OO 02I04I04DAYS MAT. 22107104

('5.05% ALLAH. BK. FD FOR 91 5.0500 50.00 02104104

( DAYS MAT. 02107/04TOTAL 125.00 -123.77

( 03104/04 38.14 HOLIDAY (MAHAVIRJAYANTI) 38.14

c 04104104 38.14 -SUNDAY 38.14

( 05104104 38.14 4.75% QLYCOM SBI FD FOR . 4.7500 7.00 {)510410446 DAYS MAT 21I05I04

(4.75% Ol Y-COM"SBlrD FOR 51 4.7500 45.00 05I04I04

( DAYS MAT 26105104

( 4% UNITED BANK.()F INDIA FO 4.0000 6.38 05I04I04FOR 7 DAYS MAT. 10/04/04

(4% UNITED BANK OF INOlA FD 4.0000 45.00 05104104FOR 9 DAYS MAT. 12104/04

5.05% Ol y,ooM ALiAH. BK. ro 5..0500 50.00 05104/04, { ~

FOR 91 DAYS MAT 05107/04TOTAL 153.3'8 -11524

06/04/04 1.97 NO TRANSACTIONS 1.97

07104/04 74.58 5%Ol Y COM SBI FD FOR 63 5.0000 82.00 07/04104 -7.44DAYS MAT. 09106104

08/04/04 1.79 4.75% QlY C{)M SBI FD FOR 69 4.7500 25.00 08104/04DAYS MAT. 16106104

( 4.75% Ol vcou SBI FD FOR 70 4.7500 50.00 08104/04DAYS MAT. 17/06104

TOTAL 75.00 -73.21

09/04/04 0.08 HOLIDAY {GOOD FRIDAY) 0.08

I 10/04104 0.08 4.7&'k Ql Y C{)M SBI FD FOR 83 4.7500 37.40 10/04104 -37.32DAYS MAT 02107104

11/04104 7.34 SUNDAY 7.34

12104104 7.34 5.25% Ql Y COM SSI FD FOR 6 5.2844 115.70 12104104 -108.36MTS MAT. 12110104

13104104 18.00 5.50% 'Ol Y COM 80M FD FOR 5.5388 30.00 13104104 -12.006MTHS 26 DAYS MAT 8111/04

14104/04 5.18 HOUDAY{AM8EDKAR JAYANTI) 5.18

15/04/04 4.25% SBI FO FOR 8 DAYS 4.2500 12.70 15104104 -7.52-,

5.18MAT. 23104104

Average Idle Funds for the period 01104/2004 to 15104/2004=Rs6.14 Crore

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\il(dlq m 'ic6State Bank of India

• ~, .~ q, q;r ~ iIi. 12

~-400021.Treasury Department, Corporate Centre,Post Box No. 12, Mumbal-400 021.m/Fax: 22M5468/2202 8779/2286 8220tnt/Telegram: APEX

ITHE REGIONAL PROVIDENT FUND COMMISSIONER (INVST)EMPLOYEES PROVIDENT FUND ORGANISATIONBHAVISHYA NIDHI BHAVAN, 14, BHIKAJI CAMA PLACE,NEW DELHI - 110066

L! ./. VlT. iIiIm5 No. Tr.l P!',,1Sl 3

Dear Sir,ft;ri;w / Date: 01.04.2004

IDLE FUNDS STATEMENTS FOR THE PERIOD :16.03.2004 TO 31.03.2004

We forward herewith the abovementioned statement for your kindinformation. The average idle funds for the period were Rs .:12.38 crore.

Yours faithfully, ')

~-~""--;:~uty Ge~~ral Manager(PMS & CS)

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EPF A~COUNT NO.11 rIOlE FUNDS STATEMENT FOR THE PERIOD 16.03.04 TO 31.03.04DATE OPENING INVESTMENTS MADE YTM AMOUNlVAlUE CLOSING

BAlANCE DATE BALANCE r:(Rs. CR.) ( % .)(Rs. CR.) (Rs. CR.)

-- r16/03/04 100.79 4.25% aLY COM SBI FD FOR 4.2500 115.00 16103/04 -14.2'1

11 DAYS MAT. 27103/04 ('".l~ ...,.

NO TRANSACTIONS, ('

17103/04 1.73 :~1.73

18/03104 32.54 5.75% aL Y COM UCO BANK FD 5.8500 50.00 18103/04 -17.46(

FOR 364 DAYS MAT. 17103105 ("

19103104 52.37 ··5.75% aLY COM UCOBANK FD 5.8500 33.00 19103/04 19.37 (FOR 364 DAYS 18103/05

20103104 61.80 5.75% aLY COM ALLAH. BK FD 5.8500 127.60 20103/04 :-65.80, r\

FOR 364 DAYS MAT. 19103105;1.,:··,· ;-. .. --_.j:

(21/03104 NIL SUNDAY NIL

22103/04 2.70 5.75% QLY COM ALLAH. BK FD 5.8500 134.00 22103104 -131.30FOR 364 DAYS MAT. 21103105

23/03/04 5.48 5.75% ot,Y COM UCO BANK, FD 5.8500 67.50 23103104 -62.02 (FOR 364 DAYS MAT 22103105

24/03/04 11.36 5.75% ot,Y COM SBP FD FOR 5.8500 9.80 24103104364 DAYS 23/03105

(

5.75% ot,YL COM ALLAH. BK FD 5.8500 150.00 24/03/04FOR 364 DAYS MAT. 23103105 -{i (

159.80 -148.44

25103/04 0.08 5.75% aLYCOM SBP FD FOR 5.8500 35.00 25103/05 -34.92·-364 DAYS MATU. 24/03105 (

26103104 29.19 5.25% oi,Y COM ALLAH.BN K.FD 5.2500 50.00 26103/04FOR 46 DAYS MAT. 1110512004

5.25% QLY COM ALLAH.BNK. FO 5.2500 20.00 26/03/04FOR 75 DAYS MAT. 06/06/04

70.00 -40.81 l

27/03/04 4.57 NO TRANSACTIONS 4.57 (

28/03104 4.57 SUNDAY 4.57 (

29/03104 35.43 NO TRANSACTIONS 35.43 C3'0/03104 35.43 HOLlDAY(RAMNAVMI) 35.43

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31/03/04 44.89 5.10% ALLAH.BNK.FD FOR 61 5.1000 38.00 31/03/04~DAYS MATURING 31/0512004

5.10% ALLAH.BNK. FD FOR 47 5.1000 50.00 31103/04 (

DAYS MATURING 17105/0488.00 -43.11

Average Idle Funds for the period 16/0312004 to 31103/2oo4=Rs 6.31 Crore

63 -1!f

r: ~~EPF ACCOUNT NO. 25

r toLE FONDS STATEMENT FOR THE PERIOD 16.01.04 TO 31.0104DATE PP£NING INVESTMENTS YTM - ~UNT VALUE C(.OSING

t> BAlANCE MADE DATE BAlANCE(Rs.CR) % (RS.CR.) (RS.CR.)

('16103104 5.37 NO TRANSACTfONS 5.37

(~17103104 7.41 NO TRANSACTIONS - 7.41

( 18103104 7.82 NO TRANSACTtONS 7.82",tr:

19/03104 8.46 5.15% Ql Y COM 000 BK FD 5.8500 1.00 19103104 7.46FOR364 DAYS MAT. 18103105r-

( 20/03104 8.59 5.75% QLY COM ALlAH. BK 5.8500 10.80 20103104 -2.21FOR3640 MAT. 19103105

(,

( 21/03104 NIL SUNDAY NIL

( 22103/04 0.22 NO TRANSACTIONS 0.22

(23103104 225 5.75%-Ql Y COM-UCOBANK 5.8500 4.00 23103104 . -1.75

FO FOR 3640 MAT. 22103105

( 24/03104 0.35 NO TRANSACTIONS 0.35

r: 25103104 0;64 NO TRANSACl-tONS 0;64

( 26/03104 3.73 5.25% Ql Y--COMALLA.BNK-FD -5.2500 5.00 26103/04 -1.27FOR 75 DAYS MAT. 9/6104

:, -27103104 0.18 NO TRANSACTIONS 0.18

28/03/04 0.18 SUNDAY 0.18

29/03/04 2.23 NO TRANSACTIONS 2.23

" 30/03104 2.23 HOlIDAY{RAMNAVMI) 2.23

31/03104 2.4!;l NO TRAI'fSACTIONS 2.49

Average Idle Funds for theperlod 1610312004to 31/03/2004=Rs 2.28 Crore

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\

AnnexUM L1'~- . - - -.-.- .

Stattts Note on proDQsed fund Manaaem~nt ,i.

..••. :.j ~:f~':'.: 'IntroductIon; To study the fund maJ\ag~t In the ~fo,:-data ft)ih2 months offund fl9wtn~1I the 108 offices wascalled for·during_J~ee2;i"~ti:l1of about 70offices was 'received and a study was conducted for arirvUTg'at: ffu!lCOst benefitanalysis. However, It was felt that data from all the' O~Olir~:studled andtherefore a new study was undertaken by caning for da~'Wil!lflt:fliit08 offices for3 months durtngOctober/2002. Data from 100 offices ~ receIVed.~~ .costbenefitanalysis been arrived during 11/2003. The following.brf~f!eXplaln Ith!i! .extst:ingandthe proposed fundmanagement. .,;: Hip t'o;:.,.: ..• 't ~.' ;.•

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•• ' f i' t·~tt·.•·· ... ~~f:.. .Existing Fund Management: EPFOrganisation fs'havrn9Pl:08:fIe1a~T(icesknownas ~eglonal Offices (RO) and Sub-RegionalOfflces.(SR:a)hst·:presen~F0'6ghout thecountry except J&K. At each of these stations, account9-flasIebeen·op"«iledwith theState Bank of India (SBI) for receiving EPFdues from the establis~ments coveredunder the EPF&MPAct, 1952 which are known as Unk Branches•. F"ronithe 'sameaccounts, cheques are issued for payment of PFto the bei'leficlaries;1ltfie ROs1SROSafter meeting their requirements advice respective'linkrbianch O~S~ J;aotransferthesurplus monies to respective investment accounts'at S8!; tlaln' B~c!l+,~Mumbai forInvestment.· In case of those offices where there;ls deficit/Such ~'GffR::essend their"requlslttons for grant of subsidy with justification to Head 0f.fIce.·:flhe·:HeadOfficeafter scrutiny of the requisitions advice the Main Branch of"SBI 10lite<! In .Mumbaland New Deihl to transfer the monies to the respective: link ~ncAes'from theInvestment account. It sometimes happensthat there are requlsltlO(isfor subsidy Indifferent accounts but there are no funds available In the Investme!it accounts. Insuch a scenarto, the SeOJrityServicesBranch of SBI who manages~eP..F.lnvestmentsis requested to divert funds from either the Interest earned from' tile' investmentsmadeor maturity of any securttv,

2. In this system, the HeadOffice plays the most Important role of regulating thefund availability. This is a time consumingexerdse and the costs of telephone,fax.etc. are involved. When funds are not available In the Investment accounts, itcreates panic situation in the field offices due· to the threat of cheques being.dishonored. To prevent such Situations, the field offices resort to blocking of hugefunds which would otherwis~.earn interest on being Invested.

Proposed Fund Management: In this at S8r Mumbai the EPFdues of all the~i'ficeswill be centrally pooled. All 108 link brancheswill transfer surplus funds to theSBl .Main Branch at Mumbai after keeping a minimum balancedally arid in thoseofflces where there is shortage, link branch will honour allcheques.and debit to theirSBI Main Bra~h Mumbai. Therefore,. there will be 108 advices received from 108field offices either debit advice or credit advice daily at SBIMain Branch, Mumbai.~may also happen that on any particular date at 581 Mumbai main branch there may

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2. In this system the expeGted benefit will beot utilizing the blocked funds/fundsin. the pipeline lying inthe·Sm branches throughOut the-coUntryfo'rinvestmentwhich will earn handsome returns. Also throUgh this ·system,cost 'Spefltontetephones,fax etc. can,be a~oided and there will be no panic situation In -the: fieJdoffICeSas there wiil be no th~ of <:hequesbeing dishor1ored•..This will enable thefIeld OfftCes to GOnoentrat.eon their main area of work t•.e., ..promPt· settlement-ofda;ms •. This will also reduce -the dependence bn the Head Offioe for regulating fundavaHability.

Pre:;ent saWs of the Study: Data of three mon~sffQlJl about 100offICeS in Ale5 and A/~·10 was caUedfor arriving at ·the cost--benefit.analysis. The '.study iscomplete. This new system will Nqulre a very ~mon1toringmedlaru~m asdevtoday entnes{1()8) willl1aveto be recondted attbe end of the day. Thel'Jl()QaLit~sand cost of setting, up this monitoring mechanism are pelng .exal1li~~A1so ~atiyebafances are noticed In mOst office's cash books de$PiteWhiCh'Chequesare ISSUedand whereas bank-balances show positive balance. 'This issue .is atso beingexamined. As the 5BI wiH playa very' crucial role intflis system, it has-eo beensured. that all its branches with EPF aocounts throughout the country areInterconnected for smcoth fund flow. This wiUalso require entering iri"tpnew bankingagreement with 5Bl. The feasibility of implementing the new fund management intotality is being examined.

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P

Item for 168th Meeting of CBT" "

Restructuring Of InvestrnentModeBy CBT.,EPF In IFCI Non...,SLRBonds ["And"Consideration Of IFCI's Request Regarding Overdue Interest.

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1. Central Board of Trustees, Employees' Provident Fund in its 162ndmeetmc held on 27-06-2003 decided to restructure the debts of IrCI as perterms and conditions listed in the column 1 of Annexure. IFCI wasadvised toaccept the terms of re-structuring of debts vide letter no. Invest.I/2(16)IFCI/2001 dated sth August 2003 but IFCI requested for reconsideration ofcertain issues vide letters dated 8.8.2003, 10.10.2003 & 28.10.2003 and inmeeting dated 10.10.2003. IFCI requested 'for reconsideration of issuesregarding rate of interest, tenure of restructured Bonds, overdue interest andeffective date for restructuring of .debts. Therefore CBT, EPF in its 16Sth

meeting held on 3.12.2003 decidedas under:-

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\\The ChairmanCBT,EPFmay negotiate with the IFCI to find aneertvsolution to this long pending issue. Further it was resolved that theChairman of the Central Board of Trustees (EPF) assisted by onerepresentative"eachof employers and employeesand the Central ProvidentFund Commissioner may"negotiate with the top management of IFCItowards finalizing the outstanding issues. The Board further resolved thatthe,Chairmanmay select the membersof the Boardto assist him".

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2. The Chairman CBT EPFhad vide order dated 9-1-2004 constituted thefollowing Committee to hold negotiation with IFCI as resolvedby CBT,EPFin its165th meeting held on 3-12-2003:-

1. Hon'bleLMand Chairman,CBT2. Shri BaleshwarRai,Addl Secretary

& Chairman-Finance& Investment Committee3. Shri HasubhaiDave,Member-CBT4. Shri J.P.Chaudhary,Member-CBT5. Shri Ajai Singh, CPFC '

Chairman

MemberMemberMemberMember

The committee negotiated with the IFCI in the meeting held on"23.02.2004. Decisions taken on various issues are given in column 3 of theMinutes of the said meeting (copy enclosed as Annexure A-l). On chargingthe interest for the delayedperiod the Committee decidedthat after the cut offdate i.e. 1.04.2003 overdue interest would not be charged if the outstandingamounts were paid within 15 days. IFCI contended that overdue interest

C:\backup_cICBT'lFCI Item 168th Meeting

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for the peri~ from November, 2001 to Ma~ 2003 amounting to Rs.14·crores (approx.) was also waived bythe·C()mmitt.ee~This fact was brought tothe .nonce of the chairman; Central Board of Trustees, Employees' Provident.Fund vide note-dated 26.02.·2004(copy enclosedas Annexure-A2). '

3. The above minutes were placed before the 77thMeeting of the Financeand Investment Committee held on 19.04.04 for consideration. The Committee.noted the contents .and desired that the matter may be referred to thecompetent authority. again to get approval. Further IFel was informed videletter no. Invest.I/2(16) IfCI/2001/Vol.I/12{)72-73 dated 01.06:04 about theterms and conditions for restructuring or. debts payable by I'fCI S6r in itscapacity as portfOlio Managerof funds Of CST,EPFhas been advised to recoverdues from n=CIin accordancewith terms and conditions decided by committeeto-complete all r.equisiteformafities.

4. In accordancewith the above decisionsof the committee Ii=CI has paidRs.92,04,75,494/- on 14.06.2004. IFeI has further r.equestedfor~ondoningthe payment of interest for delayed.period.IFCI vide letter No. fKI/-Res/2004dated 14-6-2004{ Copy enclosedas Annexure-A3) has requestedas under:-

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"In this f"~a-rd, we woufd like -to submit that the.JKI was not abfe to payinter.estfor delayed period to any of the investors inCludingthose who haveagreedfor rest1"ucturingof their investments. As you may kindly be aware,there has 'been considerabledelay in releaseof payments to aUthe largeinvestors, who have agre~ for--restrt,Jd:uringof investments involving rnorethan Rs. 10,000crores. If IfCI agreeseopay tnteresttor delayed per;9d toEPFO, such payments for delayedperiod would have to be made to aWsuchinvestors and that may not be feasible 9iv~n I'fCI's current health. li'1 thisregard, we woukJliKeto inform you that tFCI has been incurring losses forthe past thr-eeyears and the cumulative loss as on 31st December, 2QD3stands at the level of Rs. 3,600crores. During the nine months 'periodended December 31, 2003, our lossesare Rs. 2464.72.cr{)res. A copy ofour results is·endosed for your kind .perusal. In the above situ.ation, yo,uwould kindiV appreciate, f:FCI is not in a position to pay tne interestfor delayed period and we, therefore, request you to kindly condonethe same and waive the interest for delayed period".

The matter placed before the CBT,EPFforinformation andratification of above decision of the committee and to consider. therequest of IFeI dated 14-06-2004.

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C;\h.ckup .cICBTlFCI Item i{iSth Meeting

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Dra""Ninutes of the Sub-6omi:nittee meeting of CST,EPF-heldon 23.02.2004 fo'r~ "~l: ':'~;' , res~ructuring of debts payable -byIFCI

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'Present:

"Dr.Sahib Singh, Union Labour Minister

ii. Shri Baleshwar Rai, Addl.Secretary& Chairman-Finance & Investment Committee

iii. Shri Hasubhai Dave, Member- CBT Member

iv. Shri J.P. Chowdhary, Member-CBT -, Member

Chairman, -CST

Memqer

v. Shri Ajai Singh, CPFC Member

vi. Shri M.V. Muthu ExecutiveDirector & CEOIFCI

vii. Shri R.M. Malia 'Executive Director, IFCI. " :

viiii ShriA.K. Choudhary General Manager(Oebt. services), IFCI

Shri Anirudh Rai, FA & CAO. And Shri C.M Pillai, DGM, State Bank of India also

attended the meeting.

2. At the outset the Chairman welcomed all committee members, executives from IFCI

and other" officials from EPFOISBI. Thereafter the committee negotiated with the IFCI"". . . ,1 '-,

officials to finalise the outstanding issues.

3. In continuation to the declslon of Central Board of Trustees, Employees' Provident

Fund regarding approval of terms and conditions for restructuring of the debts payable by

IFCI in its 162nd meeting on 27.06.2003 & IFCI'srequest for reconsideration vide letter

dated 8.8.2003, the committee negotiated with the IFCI and consensus emerged to

finalise the outstanding issuesas under:

CBT's Decision IFCl's Response 'Decision takenl clarification on the issuesdated vide letter that emerged in the meeting

27.06.2003 dated 8.8~2003i. Principal of i. Acceptableto (a) The redemptionof one-feurth-of the totaIexisting Non-SLR IFCI. restructureddebt may be fixed in eachof the 4Bonds amounting consecutivequartersof the financialyearstartin~Rs. 1006.85 from 1st April, 2013 to 31st March,2014 in linecrores may be with changesin interest due date(s) agreed by

CST EPF (Clause4). This is reouired to avoid

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(b) In. case of acceptancesof accumulationsinvestedinlfCI ,by-theexemptedTrusts,after thecancellationof their exemptions(i.e. investmentbeyondRs.l006.85 crores of CBT,EPFin Ifel),

- the CBT,EPFwill ac<:eptpre-payments.by IfCI.

n, IFCI be ii. IfCl is ready to a) Cut-off date of restructuring will .be 1stadvised to meet meet their April, 2003 as decided by CBT,EW.their obligations obligations up toup to 31.03.2003' 31.03.2002 at the. b) In.cases where principal amouot has fallenat the contracted ~oontrecsed"rate .of due.for redemptlon before 31-3-2003, Interestrate of interest as interest as provided at contracted rate to be paid.up to the date ofprovided in the in the respective redemption and thereafter it will carry interestrespective securities as at reset rate.securities. against uptq 31-3-Overdue interest 2003 dec1de.d by .e) Interest for the defayed period will beup to 31.03.2003 CST,EPF. lfCl has -cornoounded annually at the end of thewill be .caiculated also expr-essed U:s.financial year at reset rate. Waiver of interestat -contr~ed rate inabifityto pay' on interest for ~layed. period ,asr~~ byand thereafter at overdue interest at iFeI wil1 be'1\elfeetj;e fj om tPiedcitt:· 1M'the rate reset contracted rate up l-e;;t:saa: i:It dz. rt }.plil, i!889 if IfC~ •.pays1

,hereinafter. lfCI to 31-3-2003 as the outstanding interest within 1S d~ys of I

~hould clear its decided by CST, formal communicationof the decision. '!::s..-<:mterest dues up EPF. . ~'" .. ' ~to 31.03.2003 • .payable to CBT, \ ~I .. . ..

EPFbefore formal ,~communicationabout acceptanceof roll over>proposal.

~,;r~·.;~~1L ~-' •.••••.•~. This is reqvir.ed t() avoid:;rm.tJJnty·of more than Rs.1000CroreS.ona single

. d~te. Accordingly restructureddebt wiU matureasunder: .... .

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......-"".•....~.•.•.,..restructured .. with

.." shiftinQ. _of~atUrity dates by10' years from2003-04. Rs. 250 croreseach on 20/4/2013, 20/7/2013

.and- ,20/10/2013' and balance amount on.20/1i20~4.

iii. Boardapproved therestructuring ofinvestments byEPFOin Non-SLRBonds'aggregating Rs.1006.85 crores

iii. IFCI has The reset rate of interest will be 9.25% orrequested to rate of interest declared/paid by CBT,1;PFreconsider the under para 60{1} of EPFSchemewhichever isdecision and higheragree toresetting the rateof interest at 9%p.a. w.e.f.

Acceptable to Interest accruedbut not due up to 31.3.2003 willbe paidupfrontandthereafter interestwill becomedueas under:a) On Rs. 250 crores of restructured debt on20th April." .b) On Rs."250 crores of restructured debt on20th July.c) 'On Rs. 250 crores of restructured debt on20th October.d) On Balance Principal of restructured debton 20th January.

" "resetting~'rate of interest@'

p.a. from,-

to

.04 orthe ",rate 'ofinterest declaredunder Para 60(1)of EPF',scheme,whichever is,'higher instead of10% p.a. w.e.f.01.04.2003.

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iv. Interest iv.due dates will be IFCI.reset at zo= April,20th ,July, '20tl!October and 20thJanuary for -oneforth' of theamount i.e.Rs.l006.85 croresfor which roll,overis sought.

v. In case of v. Acceptable to Decision of CBT,EPFis acceptable to IFCI andany default for IFCI. no further darification is required.more than 3months by' IFCI in ,,J, -

servlclnq of'interest! principalafter restructuringof debts, IFCI winbe liable forpaying penalinterest @2%over and abovereset rate ofinterest andoverdue interestof reset rate' forfirst three monthsof default. Penalinterest will becomputed on theamount of defaultin servicing ofL,interest! prtnclpal.

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andto-have -:put-after~ 5from thedate of(before

rollover) of eachstrip. Put optioncan be exercisedonce-in a financialyear for-~scrips as peroption of-CBT,cPFafter giving 3months notice inadvance.

is tono ~~r d~riflccit{q~isrequH-ed.'• t :,,!!;t:. ~ '~i_'~ . 0' - - •

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All forma1ities in r~spectof restructuring-ofdebts be completed within one month fromthe date of formal communication of thedecision to IFCI

i. fFCl wiH vii. Acceptable to DecisiOnof CST, 'EPF is aeceptable{ol'FCI andfurnish its I'FCI. no furtherdarifacationis r-equtteG.quarterly financialstatement ofaccounts regularly.to EPFO. IFCI willalso furnish otherinformationrequired byportfOliomanagers of 'EPFOfrom time totime.

VIII. TImecompletionformalities.

for No commentsof

(No decision wastaken)

4. The Committee unanimously decided that the above decisions/clarifications wer-e

final and need not be placedbefor-ethe CST,EPFagain.

5. The meeting ended with thanks to the Chair.

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-) .• "<:~ :)":\ C \YPage No. @

FileNo~V\.~"l. / 'i.(. 'J fF C r.}o-,l~u

EMPLOYEES' PROVIDENT FUND ORGANISATIONCORPORATE OFFICE

NEW DELHI.

Central Board of Trustees, Employees' Provident ·Funddecided in its

162nd meeting held on 03.12.2003 as under:

"It was resolved that the Chairman of the Central Board of Trustees,

(EPF) assisted by one representative each of employers and employees and

the Central Provident Fund Commissioner may negotiate with the top

management of IFCI towards finalizirlg the ouistandlng Issues. The Board

further resolved that the Chairman may select the members of the Board to

assist him."

Accordingly, the Chairman, CBT, EPF vide order dated 09.01.2004

constituted following Committee for negotiations with IFCI:

Horrble LMand Chairman, CBTi. Chairman

Shri Baleshwar Rai, Addl.Secretary Memberii.

& Chairman-Finance & Investment Committee

iii. Shri Hasubhai Dave, Member- CBT Member

iv. Shri J.P. Chowdhary, Member- CBT

Shri Ajai Singh, CPFC

Member

Membeyv.

2. The meeting of the Committee was held at 3.30 P.M. on 23-02-2004

in the Committee Room, 1st Floor, Shram Shakti Bhawan, New Delhi for

negotiation & finalisation of the outstanding issueswith the IFCI.

3. The issues mentioned in the Agenda item were discussed.one by one

and final decision was taken in each case. On charging of interest for the

delayed period, it was decided that after the cut off date i.e. 01-04-2003

overdue interest would not be charged if the outstanding amounts were paid

within 15 days. After the meeting, IFCI was contending that overdue interest

for the period from November, 2001 to March, 2003, amounting to Rs. 14.'j

crores approx. was also waived by the Committee. The minutes of the

meeting recorded at item No. ii© in paragraph 3 clearly stipulates that

overdue interest for the delayed period will not be charged after the cut off

date i.e. 1stApril, 2003, if IFCI pays the outstanding interest within 15 days of.••.., r--.

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.formal commu~:iCation9f-tbe d¢dS.lor,iThls rsalso in tune with the decision ofthe CST, EPFIn its. t'6~ncIm~rl9 held on 2i~06-2003.

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..4. Draft Minutes of the 'meeting ar.e enclosed for -kind. perusal and

a-pproval.

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CENTRAL PROVIDENT FUNO-oCOMMISSIONER

Chairman, CBT,E F & Labour Ministeru.o. No. Invst.I/2( 6)IfCI/2001/Vol.I/ -Dated: 2 .-02.2004.

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t..NoJFCJIR.esIioo4!lg·· ,.>.i·...? ·)t .J '.: . b!l'''lieb'I~1 t:June-14I;2004 ,'.. ..... . . . - . ~ .' ,.(:;j :l~U !,;.~<.lO'''!~.tj·~·lYJji~';';·.i ;iJ !l!!JJ~'l'lli'j"'!Jl'l f:Yn jJti/i2 ::;idt-lS;, ,.(t. : •••.. f.~' ;!

:~:Shii!~~ ~l::'•.j 'J.•!if1 r:.~J;!:~<j lcn ~'.ki;~~Virli.fj:,i li');:d 31lif I:Yi: I.;:, u., ::. :,'. ::PinanCialoi\dVi$or& Cbief~iOffictrJ :f :~~tI.•u wns .·!idm~·):·(: .... »:

1Employees~.Provi~tFuDd.()rganisati()~!Jt· ~.'9~~:f ';?dt!n:l~(l: ";:'" "";i'Head:OffiCtr,:;;-I(){iS.·~~I: ::i .(jJ·!;·li';.1.~.:j'iJ:.) u. -rq ·,ltrii.:. 1;;,), ··,1 ';:;~.. l ~ :.'·Bha.•;';•..J.,,·Go~;-;'dlii·····BbaUlllnBhika·lit' "----,nf-_l 'n;: t(.n • ~"i 1: ':' ';'j" .... !.:,'-Y&All.&..7a.l~1 ,•.• ....., ~ ~.J:7Ulv-;. ~,. ... ~.. • ..- .."..... , .. "; .

'New·Delhi::dllO·066 L-'~;. 'J!'~; ~ '~.i! '~f:O~;ii': !!bo ~ u: :-'..J': j;""'~~"~'" .

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'!J: .',: ~.n'Please. refet: to your: leuer:·NoJnvCSt.II2(16}11FCI12.oo1JV6LJlI2672-73dated lit~1~~;2004.o.ti~~ject. i ·.. f :i'.:mff"JSJ'llet.l :J,:;ir;qf, ~,d; If! !l(J::l:J!; ;.•.....•.

.i"l(~~!·.~·:~tJ~.,f!;1:. ~$·:-.~::!:r·· '~. f:.":·rt,,~·j;.r:;i!' ~.~..\ !('!--I --:·'1: ~;t;,~:ri:--'~':- .;::. ,t

;·2.::I.~'\i·,Atuihe;~litset,we express our:giatitude.to CeottaliBoard :Of.Trustees,. ~FO for"their:; ~pport! ·/.and·liapprovat acCordccl';:to .IFar s·jproposal :~ror<;'rest{ucturing.of their. investments.made:by;tbem in lFCrs·&.SLR.~;Bodds.~~~:Asa::mark:bf acCeptanCe of theapPr-oval,;:lcoriunuoicated Lin: 'the'. afOresaid .lett«;;~we larer;.rele3singpayment· of

..Rs~920~475;494·through·ourMumbai Regiona1.~ toWBI:dsit!iehite£est broadly arisingfrom :-, . ~:.-. : .•"~(,,,~'!l', 'j/,! . ~ . !.'

(i) Difference in interest calculated at the original coupon' rate and that at 90/0p.a. on the total investment of Rs.lOO6.85 crore for the financial year

or ._,r,': "2()().2..:.03; -il: "

(Ii)." Difference in the interest calculated on due dates .aspec applicablerestructured rate of 9.5% p.a. and that as per 90.4 p.a. on the total

, ':mveStment in the financial year 2003-04; and .(ill) .r;...-Interest due@ 9.25% p.a, on Rs.2S0 erore on the first due date of the

current financial year 2004-05 (as pee tenus of your approval, we arerequired to pay interest @ 9.25% p.a. or the interest declared by EPFO,whichever is higher. and as EPFO is yet to declare the rate, we ace makingpayment @ 9.25% p.a.),

The summary calculation of the aforesaid interest amount is enclosed (Annexure-I) andwould' be subject to reconciliation of all the payments made so far and verification 'by theaudit at both ends Le.EPPO and IFCI.

3. You may kindly appreciate that the above interest amount does not include theinterest to be calculated 'for the delayed period and to be compounded annually at therestructured rate upto 31It March, 2003, as envisaged in the approval. In this regard, we

PH: 51782800, 51782800

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would.'. ..Iikoto.. sub~. ·t~ .....~.~~1F.:Q:!lf~.~~:".•"3" :. ·:.:tbJe.·.·.:··.. to....pay. interest.. for dela.. fed.. period.·.to .any.' of the investors ~~~ .: '[JP~.;.:agrecd for restnicturinS. of their -investments. As you may~idndI~beaware,. ..: ibaS been coosiderable delay in releaseof pa~ to all the Iargc~investors, who havc' agreed. for restRlcturing .,f investmentsinvolvingmc)re tbanRalO.:OOO'.~;~ to·pe.yinterest fordday~·peri9d.to .EPFO, suclipayments for delayed period W9ti1d have tobO tnadeto all ~ investors ~that may not be feasible givenlFCrs cum:nt. bealtb.1n this J"eg8l'd. vie would like toinform you thatlPCI bas been incunin8losses for. tho past three years ~.~JlnlJtativeloss·ason311t December, 2003 stands at ~.)~~.3,6QQ.~ ..,l?uMg the· ninemonths' period endedDecenlber 31,2003tour·losses:are~:as~.72'crpre. ACQpyofour resu1tsis enclosd for)'OUl' IdndlXpetupl (~~ In theabovesituatiotl, youwOO1dlCiDdiyappreciate, IFCI is not in a PQsilioa.fO~jthe ~f()r.delay¢periodand we, therefore, request you toJdndly -condone the:-same 'and ~ .Jhe ~ fordelayed period.

4. We•.pr6p0se. to jlrepay.·,J.nuued_ely: .• ·m.v~nt.s,:of :BPF.Oili excess ofRs.1006.8S crores including the investment in lFCI Fiinilly Bonds and .thosetransfefred'in1he:name'ofEPFO>arising out·ofcanoellatiO,lli.~.PF;T~ etc., alongwitbinterest accrued ~eon litthecapplicl.ble ~rate(s):tll.l:·~~ C>f financialyear 2003-<>4. TO<".Olllpletethe.process ofR5n1CtUrin& asstipulated.in.the approv.al. it

·;;isproposed.·.thatl·allidlC certificates.in.physical~ .Y1Qe lJUR'~ior..T~ssue of·.·~~;ifpossible. jn·clemat~~19 p(~.~wher~:..aipplkablt;q ~hLt:Oider!to.compIete,c, inLtbe_tiIJlCJ~~ith&t~· of issue -of·;·r~ certificates.and prepaynteDt es~"tllS~~.Q£pa~ on aU the-certificates;"it is:Jbrtber;proposed thaf'a./teal\l~(_~~:~()m· EPFO/SBI may bedeputed for the purpose.

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Annexure 1

, Amount papbletO EPFO ,la8lallC6~yments due OI'J varioUs'Senes'in,2OE)1"()2@document rate "

92047~.494

720,9$5:800

:.. ~'.J~al ~~~ments due In 2002..()3 @ document" rate ' 1,357,419.000

A¢crued Interest @ dOcument rate till ~1.p3.03 "538,061,118

71.575.~2f31.438.356

Payment due on 20.04.03 on R$250 ClSG ~ 9.5% w.e.f 1.04.03 12,363.014e- .: Payment due on 2O.P7.03 OI'J Rs 25() crs ~~,~.5%w.e.f 1.04.03

Payment due on 2().10.03 on Rs 250 Crs GD9.S% w.e.f 1.04.03Paymerit due on 20'.1.04 on Rs 256.58Crs @9.5% w.e.f 1~04.P3 1Q6.33G.422Payment due on 20',04.04 on Rs 250 CIs @9.25% w.e.f 20.04.03 231.250.000

Total 3,259,399.052

Payment made on 31.03.03 720,955.800Payment made on 17.04.03 for 2002..()3@ 9% 1,095,067,757P~.yments made In 2003-04 for different Folios on variQus due d~es 522,900,001

Total 2,338.923.558

Net Due

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ScheduleNo.

As at 31stDec.. 2003

As at 31st·'Oec.2002

/rr.. t..L):W\t.;=i'r".~

p~~.(Rs. million) !t

As at 31stMarch. 2003

IFe'LTD.BALANCe'SHEET AS.AT 31ST'DeCeMBER2003

L SO(J~ OF FUNDS

(1) Sharehofders' FundsShare .capitaJReserves and Surplus

"":'.' •• :/J!'".w-:",:••( ;~.;.,.'-

TOTAL

10.679.48 10,679.48 10,679.48\I 4,585.44 4,7~.46 4;697.02

III 165,134.43 179.027.41 181.132.68N 19,223.73 21,#1.30 20.897.22

199,623.08 215,937.65 217,~6.40

(2) Loan Funds (Unsecured)Rupee LoansFOreignCurrency t.oans

,; . u.APPLICATION OF FUNDS

(1) loans{2) Investments(3.) FIXed~ts{4} Current Assets & Advances(5) Less:-CurrentUabilitiesand Provisions{6) Net Curr~nt Assets(7) MiScellaneous Expenditure to the

extent not written off or adjusted(8) Profit &-Loss AJC

l :;- -!.••'-,f .·i0 •••••• 01 TOTAL

V 110.317.65 144,856.80 132,127.58VI ~629.11 41,S38.08 38203.34VII 5.951.30 5,812.78 6,131.41VIII 18,249;06 18.755;00 40.606,07IX (13,684.53) (10,168.30) {11.256.81)

4,564.53 8,586.70 29.349.26X 73.S9 203.52 155.08

36,O8~.90 14,939.n 11.439.73--- ......XVI

199,623.08 215.937.65 217.406.40

Significant h:counting Policies and Noteson Accounts

.::. ,'.

;.

/t'\'II\-t "'f ~ - J.I...

..:..;... "~""""'__~""'"".!-~..-?::.•1:-"2:: .~

" ,'.FC.I::TD •.~,~OF'.TAND LO~S ACCOU~T F~ ":H1¥~~RfOO~Eo 31ST DECEMBER2003 ."

(Rs. miIion)

. Income tfom OperationsOther Income'TOTAL INCOME (A)

IL EXPENDITURE

;

Cost of BorrowingsPayments to and provisions for employeesEstablishment and Other ExpensesOeprecialion (Net of transfer from Revalualion Reserve)TOTAL EXPENDITURE (B)

UL OPERATING LOSS BEFORE PROVISIONS (A. B)

IV. BAD & DOUBTFUL ASSETS

""~8<fuIe "Fot the period For the period Fotlheyear

~:¥. No. ended 31st endecf31st ended 31stDec. 2003. Dec. 2002 Marc.'!. 2003

~ .

XI 9,929.21 12.473.88 14.034.95XII 67.45 229.29 347.43

9.996.66 12.703.17 14.382.38

V. EXTRAORDINARY INCOME

• Written off• Provided for• Uability taken over byGovt of India (Refer Note 3)

VI. EXTRAORDINARY ITEM {Refer Note 3(c)}

VII. LOSS AFTER PROVISIONS AND EXTRAORDINARY ITEM

-Surplus! (Deficit) brought forward from Previous Year

Balance carried over to Balance Sheet.--;"

:.j 8asic & Diluted Earnings per share of Rs.10.00 sach(Rs.)

'rSignificant Accounting Policies and Noteson Accounts

(6.097.01) (2.596.97)

(,

r:

(8.842.75) (3.342i5;;

(1.1.939.77) (11.43973)

(10.02) (o!.57,

XIIIXIVXV

11,254.91721.71126.72212.49

14.805.91 15.581.02250.21 358.i3165.58 200.79238.87 322.~1

15.460.57 16,462.65

(2.757.40) (2.080.27)

89.51 3.7g0.933.250.00 15.035.77

i~a.3COCOI

12.315.83

(2.319.17,-

65.0917.502.91(290.00)

4.950.00

(24,647.17)

(11.439.73)

(36.086,90)

(38.86)

XVI

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GGMFICBT June 14. 2004

Employees Provident Fund OrganisationMinistry of labour. Govt. of IndiaBhavishya Nidhi Bhawan# 14, B~ikaiji Cama PlaceNew-Delhl1:fO 066

Dear Sir,

. .Kind attn. ; ShriK.L. TaneIaRegional P.E.Commissioner (lnvgstment)

SUb:Settlement oJ dues to CaT-£PfQIS pertrn:directive of coo

Kindly refer 'fo your fetter NoJnvstJ13(3)95IHMTNo1.IV/6997 -dated2nd June, 2004 requesting us to furnish the status report on settlement of dues inrespect of ~s.25-crore HMTBonds held by caT -EPfO as per the directive-ofHigh Power Committee on Disputes {COD) in their meeting held on 4th Marcil,2004.

•

In order to imptement the decision taken at the COO meeting, iheCompany has initiated the following paraUel actions for settiementof dues 10C8T-EPFO:

1. The Company has identified a portion of fr-eehold immovable propertiesout of fand admeasuring 680 acres located at Hyderabad for disposalandsettcJemem of dUes to CST -EPFO. In this connection, theCompany has already appr-oached Govt of Andhra Pradeshfor issuingNo-objection for disposal of theidentifaed property.

2. HMT has submitted a proposal to the Adminis8"ative Ministry {DHf) torevise the approval for raiSing Rs.300 crore under Gal Guarantee toinclude Bank loan also apart from Bonds for discharge of overdue andother borrowings. The liability in respect of.csT-EPFDis also lnoludedin the details furnished to our Ministry. We hope to receive theamended in-principle approval and Guarantee from the Ministryshortly. Tner~after the funds will be raised from the market or loan isobtained and the liabilitY of EPFO is discharged which may take 30 to45 days.

...2

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, 3.: The"proposedoottiement of dues to CBT..EPFQ has been informed toBoard.

We are confident of settling CBT-EPFO dues within stipulated period.

This is for your kind information with a request to inform CBT-EPFOaccordingly.

Yours faithfully,For HMT LIMITED,

• (G.S. Shanthiraj)Group Generaf Manager, Finance

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Item No.3Item No.3A: Reviewoflnv~ent in respectof ProvidentFund.

Thed$ils oflnflpws and Investments made by sat according:to the prescribed pattern as follows:- .

PROVIDENT FUND INVESTMENTS(01-04-2004 to 31-05-2004)

-INFLOW Rupees

c(

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Opening BalanceFresh AccretionsMATURmESTreasury Bills-others

INTERESTCentral {;ovt.loans 1-04,39,92,OO3.30}

. State Govt/Gtd loans 7,94,90,909 ..0Q}State Dev.loans 114,07,40,S80.S0}PSU/PSFIBonds 69,40,63,488:00}

Withdrawat from 50SRefund of Income TaxIncentivesRefund of Appl. MoneyRefund of Bank ChargesOther recipts

10,58, 79~596.17268,25,00,000.00

(~

}425,94,85,667.00} . 425,94,85,667.00

315,82,86,980.80

1,67,77,200.003,00,000.00

1.0,26,499.00

(TOTAL ~NFLOW: 1022,42,55,942.97

( OUTFLOW

(

INVESTMENTS MADE-Central Govt. loans 212,77,42,500.00}State Govt/Gtd Loans }State Dev. loans 309,41,45,100.00}PSU/PSFIBonds 451,07,96,480.00}Treasury Bills }

Accrued InterestTransfer to Main Br.Oeposit To SDSIncome Tax DeductedBANK CHARGESTransection FeesIncome CollectionService TaxMisc. Charges

Current Account

973,26,84,080.00

"6,87,84,755.1310,00,00,000.00

1,67,80,097.00

7,03,OOO.OO}4,86,784.00}95,183.00}8,16,650.00}

20,06,434.00

0,39,05,393_84

TOTAL OUTFLOW: 1022,42,55,942.97

INVESTMENT CORPUS-UNEXEMPTEQ SECTOR

A. -PROVIDENT FUND INVESTMENTS

(Rs. In Crores)31.03.01 31.03.02 31.03.03 31.03.04 31.05.04

1 centratcovt, 3801.46 4374.12 4997.00 6613.13 6763.88Securities

2(a) State Govt. 2068.86 2456.65 2964.32 5419.75 5702.10

(b) Govt. 847.79 730.46 626.49 533.58 522.10Guaranteed .Securities .

3. Special 43145.65 47441.14 51851.28 51954.77 51978.64DepositScheme

4 Public Sector 4540.90 4986.07 4974.64 7317.19 7371.49FinancialInstitutions

Total 54404.66 59988.44 65413.73 71838.60 72338.21

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DETAILS OF1NVESTMENTS IN RESPECT OFACCOUNT NO. 05 (01-03-2004 to 31-05-2004)

.. "4'

.Oate Cat 1Couoon . Particulars

s:-sf . J=.0,.10,1OA'[&A~Q.~eO"

In~,d!!~~,fe M.a~rl!:y F.ace.vfllu~

48,QO,Q.QQ'OO] . 1 ()O;

R~te,

>II

CQ$tPrl~... (,.

.>0

.A~crd!ll'ter"st· .I. BanI<Charge I Yield

2QOQoJ 5..05

,

12~,QQ~OQ040L, ,Q01, 1Z3,QO.OO:O:OQ.OQ,

",. ., J 0,

~',s.

m&Q.OOo'Qil~QQ..OOOClitt.M.(;~o.(

I.(t

(~t~'() \

22~ 00,,000001 100

1$.QO.,Qoj50al . too6.~pj(lo.Qtlol ....tOO

"',

48,QQ.OOOOb.QOit! iI. <do

22. OQ.oooa,C).QO.

3"p.QQ.OQO'O'O.Q16.60.oooao. Q6.30,000'00.0

II: ,"'-_iI!

3,80.000.00.00.

1.4.$0;O'QOo;O.O.o

1.1.20:00.000.00~

5Q,60.PQOQol, d' ,toO] ..50.0'0.00.660.00

to,;M.QOOQOI 144

114.64114..$'102..;m~·:t04.~<'t.

MP.SOl,. 20.141. 23-Apr[ 23-.0ctJ 2M)4~O.14,

-. ~:!4!Q§a.'O'[41 .. ,5Q,OQ,QQJ)QQl.. 19,'QI. . ~Q•.QO.Q.QOOO.OO

5.73.307dO.oor 3.310.136.9§

02I1,1aP'04

-.~8nQ~§!)41. ..~QJQO,OQQ.Q(ll 10'01" 20.6'O.ijQooo.oo

-~.Q6J~®9,Pq:l 1.~6te?5.()Q

02104/2004 'Psu

05/04/2004

07/04/2004

10/04/2004

12/04/2004 PSU

131 412004 PSU

15/04/2004 su23/04/20()

--"'i-

~..fmdemlP,!?,UPeU

~f ~,. I ; I

14/051200{. ere

4.751 F.OAtS DAYSSel,$se

4.251 F.O~21·DAYS$6f.$sa51- F.O.63 DAY$.Sf3I,SSB

4.751 F.cHf3DAYS'SBI.SSB

5~

5~

-4:~5

.5.65.6

w .••... iol\o,. ~:ti.

FTISBI F<:lR.e.M~NTH

F.O.6 M.2fHteQM,..•

12/07i~004

DETAILS OF INVESTMENTS IN RESPECT OFACCOUNT NO. 05 (01-03-2004 to 31-05-2004)

:It.... .~-,

Date Cat ICo~on L Particulars~. _~ J I[lt._d.ye~at~ J Mi\ltlJrlty-CFace-,ValJ,Je T--:Ra~] -- C9sfPrJ~e" _ IAccrcf,llJ!~est- J Bank Ch~rg, llYt.!.I.dCTGI 10ASI LOAN201,81 30-Apr) 3Q-Qctl 3Q/041~Q1&] 1Q,QQ,0,01ll001144.751 .14,47,SQQQ9A<5[--~Q[38&.§9r ~.2oqQQl f>.1'451

149.S5

'"tOa.17

1-. : r eTGI 10.4~r ' ~6AN 201:6): 3b-Aprl 3D-OctI 30/04/20181 10,00,000001 144.751 - 14,~f7~50000.0or· 406;388.691' 20(1)Oltr74511

,'3.Q~6~§.30 1~.Qo;OI·$:6099111.02, 3,~Q4,7:12.~ 1S0Q.(lll-St07

PSU.I '7.~1 POW~RG~tD c98P ~.Q08r . ~hMI _-I _31l011~QQ~I- --~90,()()OOO 5,4Q,8,§Q~~Q.PO

!-f5705720()4 '-erG 11:83---- 0 - LOAN2014 12-Mav 12-Nov 12111120148,50;00000r-L I" .I .1 ,I.I 18/0S12004 p~ 'El.1 POWERGR~ C.QBP2010 17,"",ul. - 1},IQ.7(2P1Q S,ot>,Qoq;ooI JO.0.71 §,Q3,5p6~0.001 2,S56,966.301 15Q0Q15.9559

f- 5,60 00000!. 5,QQ,QQQOO1(13.S4

S',~5,1~f~crQ:Q95,17,7Q,QOg:OP 74.f~9SA8 .jSQOO(Q.60S2

20000] 5-.S39212,71.17S00.00 83795.83

I- PSU 6.1 -I- PSU' 6.1 -I P~U 6·6f3

-AILeo~O2014- GAILBOND2011

_2QI0~/20Q1j eTGt 6.31 LOAN2023t 09-APr! Q9·.Q2tl 09/04/20231 12,00,000001' 104.751 hS7,OOOOO.00t· 861,000.00t . t $.879Sjir2'~4~/0~5/~20~04-:-+t~SD:::'!'L+j-6~. 7::':S:+-t-----=O'l::"R "='Sbl:"!L.-::2::"::'0~13+1-:1~2--:-:Ml"'""ar+J~1-=-2.•-=-se-p+-1~12::":':/0~3/~?0~1~31-1--="1 O~,O~'O~,0_~0"0~90'!04t"".1~Q"="i~~5§.~L-.-::1~0,~62~,5~~~O-:-:0.=oo:+l-.""'1.=35=""OL~00~()-:!.O~Qtl--"'"'!2~.O]QQ!~()9~QI-'_-.~,().~a3.1~ WB SOL20131-350000.00~_ TNSDL2012 SR II 4.116.6~6.6.7! ---.1 SOLI 6.751 RJ SOL 2013] 12-Marl 12.Sep] 12103/201~L _ fDJOO,ooOOoI106.2S1 -10,62.~1900.dOr1.3S0,OOo.oorT ~ 200001 - 5.83,

l 28/0S/20041 sOLf' s.71. UP SOC2014]2B:fv1ayl 28.Novf 28/05/2014[ 82,OO,00OOOI~-100L_-~2.LOO~Ooooo.obr -- I 20000r-5.7

t-31l0512004I-CTGf u10.2S[- .. -~------COAN-2P2j]-3o.Novr 30:May['30705l202IT=_ g§.QQ..QQQClOl~43l 3.S,~5,Qo.OOo.00l T ,. ou -200O'oTe:13961.- 30/04/2018L 30/04/2018

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Item No. 38: Review of Investment in respect of Pension Fund.

':"ibe"detailsofihflowSi;U~di;'''~r1ts made by 561· according tothe prescribed pattern as fOllows:- ,',' : '

PE,NSIOf,jFUND INVES1M~NTS, '{Q1..(J-4--?~04f03f:.Q5-20D41'- .',

INFLOW Rupees

(

(

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OpeningB.alance 1,23~1~,484.35Fresh Accretions 858',19,00,000.00MATURITIESTreasury Bills 2,21,OO,OOO.OO}Others 1202,42,28,531.00} 1204,63,28,531.00

INTERESTCentral-Govt. Loans 176,85,22,929.25}State Govt/GtdLoans 7,72,42,667.50}State .oev..Loans 129,13,99,369.50} 51.2,01,40,619.08PSU/PSFI Bonds 198,29,75,~52~83}

Withdrawal from 50SRefund of Income Tax 6,27,62,013.00Incentives 6,00,000.00Refund of Appl. MoneyRefund of Bank ChargesOther recipts 00,00,00,000:00

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( --------------------------------------------------------------------..~--- .•..--------TOTAL INFLOW: 2642,40,47,647.43

OUTFLOW

INV.ESTMENTS, MADECentral Govt.loans 467,03,91,600.00}State Govt/Gtd Loans }State Oev. Loans 821,62,27,978.30}PSU/PSFIBonds 1184,25,26,40LOO}Treasury Bills }

Accrued InterestTransfer to Main Br.Deposit To 50SIncome Tax DeductedBANK CHARGESTransaction FeesIncome CollectlonService TaxMisc. Charges

'Current Account

2472,91,45,979.3D

14,85,65,301. 78

6,33,66,763.00

15,51,578.00}10,29,812.00}

2,06,5HU}0}}

25,81,390.00

148,01,81,703.35-------------~--------------------------------------------------------------TOTAL OUTFLOW: - 2642,40,47,647.43

l-t

B. PENSIONFUND~'

-31:03.ill

·"f:

As On --7 . 31.-.03.02 . '31.03.2003 31.03.2004 31.05.20041. Central 4753.45 6386.14 8231.50 9640.54 9961.88

GovernmentSecurities

2(a) State Govt. 1887.68 2503.71 3475.57 4426.61 5229.50

(b) Govenunent 551.36 622.98 561.38 .496.15 491.15GuaranteedSecurities --

3. Special 1117.09 1227.34 1339 ..36 1339.36 1399.36DepositScheme

4 Public Sector 7842.62 9290.26 10369.76 13508.14 13442.62FinancialInstitutions

5 Public 17064.19 19019.38 21067.64 22883.87 22883.07Account

Total 33216.39 39049.81 45045.21 522933.87 53407.58

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Details of Investments in respect of Account NO.11 (01-03-2004 to 31-05-2004)

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¢,ai.l C~UDOr'l

i.'

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[.Dg 9AYUJ'Jr!&~§PlF.. 51 OAvl S U~SR

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o710M2Q041PS.U

P$l. ,4,75....•...•

5 -FJ:f.63 6AY$ sBl.~sa

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.....,'><_""'.1.1.. "J~ .. :'. J;' ••I. ..:IiJ .1. :.:.Jt • .' ",il .. ;!Ii

ilBJ04I2M4lP§Uf .4.1ijpsl[ 4.75

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-i~:2:fi-·~£t~D:i~G~-t. ••• l u' ".., , ""'- ,_--,-.-:J~.-:.:.

F.0.83 OAYS-SSI,SSB OZ/071200f 37,4'O']O.OOO( . ~O;o,1, 3.7.,40,00(}00.001 .1 200001· \ ".75J0104/2P0'4[P$U[ 4.75

FO S,61FQR ~;-MONTH

;:.0:6 M.260$O~J -

- -. 1"11 W~l.lU~ 200apf f.~8~r,.~:•i ~ ,.•~.~,.l.' ~OoOo'l $:539

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13/04/2004 P~U ,_5,,-5 .OMJ/i.I!!JU4.,;.•• ,.i;. , d :•.•1 , ".... .:'.: : 1. I ""'T 1·-t,.

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Details of Investments in respect of Account No. 11 .(01-03~2004 to 31-05-2004)

Date Cat· I COIlPC)n- nt. cfue-date

~T8:JuII .28~an f.42Jlolfoor·fts041

Cost Pri~e-5

d,j.9?QQO.QO

,,~;..;, Iftta.": ••t1 Sa.nkCh!!lrlll' .J Yield-Partl¢l,ll!l1'<'06/2013,

Face ValU~ I RatE§.Q.,",1 ~6.35 KN SOL 2013 12.Junl 12~Oec

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5 nnn nnni .103.64 1?n R?B3Ql- ~ -~t5bOI5.801

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~~Ll __ ~c". IH !5-!=eb1?"'_411" 081 POO~OO()] . f03J -!n6~,82!§.OLI o.~ CH, SOl 2015 !5-Feb1 ?",_a"" 25/0S120H 2.40.90000\ lQ~.2~ ?L~~,7»~Q8.85 2:SOLI 51 G,J SOl2Q1 1..1al'l,I .. 2j -4,1.11 211.01/20J7 2;:SO.OOOOOI1Qf.2 .~•.~~.100M 401.~~/_.,SOLL __ §~ .SOL 2Q1 tanI 21 "Jui 2110:1/2017 9.8300OT-fQf.~~ li~1~8~~:

~.; we. sl:>L 201f.' Feb"1 25-All!:i ?~.JnAJ?015 sr:OO.30QoOl 1()~·.~f ~~L~()8"3.4. 1601 .~5.7alJ~5 5.761

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Details of Investments in respect of Account No. 11 (01·03·2004 to 31-05·2004 )

I,l; ~ .~.. ,.i~·" ~"'....lf.I '*'

Maturity .. [ Fac, Va'/uct ) ~iJt~~ t ,J;~s~J)rlc;e~IAccrd,lnterest 1~ank char9 ••JJ'je!ciJJl~ dl!(;l~dab.!;Parti~;; ••.Date 1 CQt 1 ceueon.J/", '" .~ •. ,.I '"" . ,., j, I, ~. "_~i! c., ,~J, '"',",.~..J LLt.L -,...idL~j;1L......._~I ".... .- •.:

150001 ssos, LOp.N20161. l~-Pctf~f~=APrr~ 19(04/?P.16J,5,00,OOQOQ\ .,1441.. 7,~O.00Q()O.Opr-312.375.001O/P5/20,04JCIG I 10.71(-.\.

200,00.1 5.~5eB.50r .260.2'I5.4-n 'tAAI~6!EXlM BAN.KeONCt~Qi1 }~.OPlagoo,M'.I

R5i_nrJ:9~Jun 191.0.6/201~resoi 6.3.5 -lS00QI ~.~e~ .RR~nntH ? ArtnQ~1t~.e!I:XIM6ANK aONtf2l)13~SUl 6.;~~ ~~-J.UI1 , .90,001 1>.~Ql: ltl?lo..Ol)J '14;3,124 .•. 31l~L2,Ol,~'f$-.Oct:tFC.BQNOSap1,(p~ ~-APr.15Q001 5 .75~/ji:l~~nnt'\'ltl -i:l~5;39{.'EXt~~raANK BQN020n 1~~,\/~Qol.l.,j;ja(l, 51p.~ -2000Ql$.§O~11.24.63$00.0,(51',5.204.657.:l:XiM aANJ<.aONt:i~ nl~9/2"O;'fl~epF?~ .

,;,'fit" ~::'1, :'26 ,,~ cr~7.;1:CO>QQ.OQ~1i~~ ,o~o."0"'?'it "'"" "t ' , ••' ~,H8~7:

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'Mnnl. 6.519.LOl'N~[1 ~L,QZ..~,ipl,Ol-~Ug 15:~;WOQtL~.~14/05/2004l:CiG 1 .11.4.~ -07708/~Ul:) 2?-?01~I\'O·,hl"iI41:tO A2~00J., ••~,'JLY'l.~Y.!ll.i-,,·Y...c'f. -1.,Joi.: ,_)I, Yt'!l:,:JI·, ..

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!:-~ 15000J$.Q(6.681'POWeRGRI\)CORPZQQ~f '~.I=!Af, ''l 11.706.00.Q.Ol' "'loti?Mp loonnlll

: 6.11· POWeR GruD¢CJ.~paD'~~l ..17-:J'uJ 17/0'11'. '1StIf'iRM'nnl ? ~~~nf6f.~l--:7 1500"ol5.6(p ,nnnr-7.851-POWf;RGRIO CORP 20081,, 31-Jt.\1 150qonooc'-', • ..l',' t'd,",

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't •.,~"ti:$'.' •. 11, ' l.;.,. ~ ;.n.L.AN ~021.i170~goo~1~Gt·.'1O~25. 150001 5'.92f.~nJ~~~n?i ,tfl'

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Details of Investments in respect of Account No. 11 (01-03-2004 to 31-05-2004)

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Date JCatTCollp9nI Particulars l.Ilt.due dl,lte MaWrity F~ceJ/au.e Rate Cost Price Accrd.Jtltecest Bank(:'h.!frgj! Yield20105/20041 eTG1 6.31 LOAN 2023 09-Apr 09-0ct 09/0412023 13.<1000000 104.75 13.61 75000.00 932.750.00 .200QOl 5;88

21105/2004 rCTGf1 0.03f,---

lOAN201~ . OQ·Aug 09·Feb 09J08/20 19 20,00,00000 141.75 28.35,00000.00 5,683,666.67 2QQ.OOT 5.848,",

15Qqqr-S-:959.2210512004.ICTGT 10.25T LQAN2021 ~p~ttov 30·May 3P/05/2021 5.Q,P.00QOQ 145.5 7,27 50000.00 2 448 611.11CTGl 6.31 LOAN 2023 09·Apr . 09·0ct 09/04/2023 2500,00000 104.5 26,12,50000.001' 1.881.250.001 200001 5.901

SOsl' 81 R!:eO.ONTRANSFER Of·Jim .. sa 00.00000 100 60 00 00000·.00~~--~----- ------- --

25/0512()()4) eTG 10.03 - ,- - - - LOAN 2019 09-Aljg 09-Feb 09/0812019 10,0' '.•00000 141.5 1416,00000.00 2953.277.78 ~OQOO ~.a~6eTG 10.03 LOAN201~ 09-AI:IQ Q9-Feb .09/0812019 100 ~,QOOOO .141.5 14.15.00000.QO 2 $~3;277.78 22000 ·~.•e.~6eTG 10.03 , _LQ~~2(>1 ~ _ .09-Alj~. 09-Feb Q9/0812Q19 100 00000· 141.5 14.•15 00000.00 2953277.78 '2~l!Q.Q. 5.866

,SOL 5.9 ---~-, -:-- Ap'sOL20f1 21..Jan 21-Jul 21/0112017 $,SO.Q<OQOO 100.45 954,%7500.00 1930611.11 . 20.00.0 5.848SDLl 5.91 .M.H $~L 2011 Z1-Jsn 21-Jul 21/0.112017 5,OOOOQOO 100.45 5.0.2,25000.00. 1,016,111.11 150.00 5.848

6.1 POWER GRltf[ORP200926/05/20()41 P$U 17·~ul - 17/07aOO~ 50~Q 00 0 101.43 5 07, 13200~OO 2 623.835.62 150eO .5.767PSU 9 POWER FIN CO 200.9' Q~-Jul - Q,8/0712.00.9 20,0.0.,0DO. 0 1.13.95. 22 79.05000;00' ·1,~9 28767.12 20000 t 5.769.PSU 9 POWER riN CO 2009: 08-Jul - Q8/07120l!. ~~~~O.JQ!O g J.13,~5 11 ,-o.~.i!8750.00.:1,1.9,~575.34 20000. 5.769

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28/0.5/20041 eTG 10.25 LOAN 2021 3Q-N,ov 3~May 30/0512.0.21 ,OO/DOOOO ·145 72500000.09 2.534,0.27.78 1.S0Qo 5.99.3•eTG 10..25 t..OAN2021. 3.Q-NQV 30·May 30/Q~g021 .OO;Q.OQQO 145 .1,~,OOOOO.OO 2.534 027..78 1$00.0 15.993.eTG 1~.6 LOAN 2018 (ON TAP 23~N()V 23-M~Y 23/11120.18 QD,~.Q.QOQ. f63.8 •(lr19;OOOo.O~OO 87500 150.0.0 15.9«52eTG 12.6 LOAN~018~N'TAP) ~3-NOV 23-May 23/1112018 5;OO~OOOOO '163.8 8,19,00000.00 '87500. 150JIQ 5.962

28/0512014 18 00 .00000.0028f0512014 ·2o,00,OQOOQ..t)9

31/05120041<:1<31 . -12.61 LOAN 2018 (ONfAP)T 23"Novr23~Ma'fl- . 2.3111120J~Ln~@.~4.3Po.ool ·1621 79,77 .36600.00t 1.~06,453.501

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Item No.3 C : ,Revjew,of.:tnvest~ent in \respect efEDU Fund.

,: ' ',',The detaifs·ofillflowsand investments madeby 56I according-'.to the prescribedpattemasfOn~ws:~' '; ,'~-' , ',' ,

. ','Eot.fFU.NDINvEUMeNTS,I01..Q4-2004 to 31-DS-2004}

INFLOW

OpenJngBalal)CeFresh AccretionsMATURITIESTreasury BillsOthers

INTeRESTCentral Govt. Loans 5,OO,10,330.2S}State-Govt/Gtd Loans 31,62,SOO.OO}State -Dev..Loans 3,51,45,927.00}PSU/PSFI Bonds 7,52,52,7~.sO}

Withdrawal from 50SRefund of Income TaxIncentiv.esR.efund of Appl. Money:Refund or Bank ChargesOther'recipts

}34, 12,SO,OOO.OO}

TOTAL INFLOW:

OUTFLOW

INVESTMENTS MADECentral Govt. Loans 31,41,77,500.00}Stat.e Govt/Gtd Loans }State Oev. loans 1l,50,00,OOO.OO}PSU/PSfl Bonds 27,20,OO,OOO.OO}Tr.easuryBills }

Ac-crued InterestTransfer to Main 8r.Deposit To 50SIncome Tax DeductedBANK CHARGEST.,.ansBction FeesIncome CollectionSetvice TaxMisc. Charges

Current Account

71,100.00}39,214.00}

8,826.00}}

TOTAL OUTFLOW:

Rupee~

4,$4,76,436.5825,O~,89,000.00 '

34,12,50,000.00

16,35( 71,542. 75

13,59,243.00

80,19,46,222.33

70,11,77,500.00

52,60,433.06

13,59,243.,00

1,10,314.00

9,40,29,906.27

80,19,46,222.33

INVESTMENT CORPUS- UNEXEMP'rED SECTOR

C. - "INSURANCE FUNDINVJisTMENTSAs 0rI-7 "31.03~oi 31.03.02 31.03.03 31.03.04 31.05.04.

1. Central GovernmeDt 116.76 171.S3 224.04 288.73 310.38Securities - 0"

J

2( Stat.e Govt. 48.90 69.18 107.98 134.34 145.03a)

Government 20.86 23.04 15.54 15.24 15.24(b) Guaranteed

Securities

3. Special Deposit 2.08 2.29 2.50 2.50 2.50Scheme

4 Public Sector 197.20 257.84 316.16. 383.76 395.43FinancialInstitutions

5 Public Account 2397.16 2600.92 2822.00 2822.00 3061.87

TOTAL 2782.96 3124.80 3485.22 3646.57 3930.45

The corpus under different schemes was lying invested in the securitiesapproved by the Central Government as under :-

As on-~ 31.03.01 31.03.02 31.03.03 31.03.04 31.05.2004

i) Provident 54404.66 59988.44 65413.73 71838.60 72338.21Fund

Ii) Pension 33216.39 39049.81 45045.21 52293.87 53407.58fund

Iii) Employees' 2782.96 3124.80 3485.22 3904.23 3930.45Deposit"LinkedInsurance IScheme

Total 90404.01 102163.05 113944.16 128036.70 129676.24

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AS.on";;'7· 31.03;00,. 3!·9:3!0J, _ _3hO.:LQ2.: 3.1..03.2003- 31.05.2004'j) Central 6039~53 8.671.67 ·10931.79 - .134,52;'S4 17036.14

Government......

Securities

Ii) State 1-207.05 5425.45 6406.02 ''6547.87 12105.12Govt./Govt.Guaranteed·Securities

Iii) Special 39778.56 44264.82 48670.77 53193.14 53380.50Deposit .Scheme ofCentralGovt.

iv) Public 1,0191.15 12580.72 14534.17 1"5657.'56 21l09.S4FinancialInstitution

v) Public 17365.77 19461.35 2162().30 23889~"64. 25944.94A-ccount

Total 77582.14 90404.01 l,02iS3.05 113944.1"'6 129676.24

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Details of Investments in respect of Account No. 25 (01-03-2004 to 31-05-2004)

"

Date Cat Code Coupon Particulars Int. due date Maturity Face Value Rate Cost Price AccrdJnte,est Bank C)\arg •. YieldL

02/04/2004 PSU 900164 5.5 t=.D.101 DAYS ALLA'BD - - 12/07/2004, 20000000 JOO 2,0000000.00 ,'., , 5.05

,

05/04/2004 PSU 900169 4.75 F.D.46 DAYS SBI,SSB - - 21/05/2004 ' 8,00,00000 100 8,0000000.00 4.75:

07/04/2004 PSU 900171 5 F.D.63 DAYS SBI,SSB - - 09/06/2004 2,OOOQOOO 100 ' 2 00,00000.00 5

10/04/2004 PSU 900174 4.75 F.D.83 DAYS SBI,SSB - - 02/07/2004 6000000 100 6,000,000.00 4.75,

12/04/2004 PSU 900175 5.25 FD SBI FOR 6 MONTH - - 12110/2004 5,000 000 100 5000000.00 . 5.2844

13/04/2004 PSU 900176 5.5 F.D.e M.26 o 80M - - 08/11/2004, 5000 000 100 5000,000.00 5.53e8

15/04/2004 ' PSU 900177 4.25 F.D.08 ~AYS SBI S~B - - 23/04/2004 6000000' 100, 6,000000.00 4.25"

23/04/2004 SDL 121114 5.6 CH SOL 2014 23-AQr 23-0ct 23/04/2014 11,500QOOO 100 11,50,00000.00 20000 5.6•

28/04/2004 PSU 900181 5.3 F.D.6 MNT.SBI,SSB . - 28/10/2004 8,00 OQOOO 100 8,00,00000.00 " 5.33$1

30/04/2004 PSU 900183 5.3 F.D.201 DAYS S81SSB . - 17/11/2004 5,00,00000 100 500 00000.00 5.33

10/!l5/2004 eTG 110107 10.71 LOAN 2016 19-0ct 19-Apr 19/04/2016 5,00,00000 144 7 20 00000.00 312375.00 15000 5.60'53

15/05/2004 eTG 110107 10.71 LOAN 2016 19-0ct 19-Apr 19/04/2016 ',65,00000 143.5 2,36,77500;00 127627.50 1,100 5.6474

21/05/2004 eTG 110100 11.43 LOAN 2015 07-Feb 07·Aug 07/08/2015 100000000 148.3 14,8250000.00 3302000.00 12000<) 5.5603,

28/05/2004 eTG 110105 10,03 LOAN 2019 09-Aug 09-Feb 09/08/2019 5,00,00000 140.5 7,02,50000.00 ~115t8,430.56 ' 15000 5.944

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Item No.3 D: Review of Investment in respect of Staff ProvidentFund. '

The details of 'inflows andlnvestments made by S8r accordingto the prescribed pattern as f~lI~ws:-=', '

.Investm~nt'for Alc.08f~r the period01~04:-2003.to31.•03-2004

INFLOW RupeesOpening Balancefresh AccretionsMATURITIESTreasury BillsOthers

INTEREST-centrat Govt. Loans 6,07,44,773.88}Stat-e;Govt/Gtd Loans 69,39,747.S-0}State oev.Loans 2,80,44,678,s0}PSU/PSFI Bonds 6,63,73,377.30}

Withdrawal from 50SRefund of Income Tax,IncentivesRefund of Appl. MoneyRefund of Bank ChargesOther recipts

2,29,26,802.7710,45,50,000.00

}12,74,79,500.00} 12,74,79,500.00

16,21,02,577.48

32,156.001,91,880.00

6,87,20,405.76

TOTAL INFLOW: 48/~O,03,322.01

OUTFLOW

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INVESTMENTS MADE'Central Govt. Loans 18,70,43,400.00}State {;ovt/Gtd Loans }State Dev. Loans 7,54,55,294.04}PSU/PSFIBonds 21,30,79,660.00}Treasury Bills }

Accrued InterestTransfer to Main Sr.Deposit To 50SIncome Tax DeductedBANK CHARGESTransaction FeesIncome CollectionService TaxMisc. Charges

Current Account

47,55,78,354.04

46,63,682.60

32,156.00

53,082.00}36,755.00}

7,192.00}}

89,837.00

56,32,-100.37,

TOTAL OUTFLOW: 48,60,03,322.01

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Details of Investment 01-04-2003 to 31-03-2004 (Account No. 08)

"I Date Cat Code Coupon Particulars lnterest Due Date Maturity Face Value Rate Cost Price Accrd.lnterest Bank Chafge Yield!

I 10/0412003 ere ,11Q111 10.45 ,LOAN 2PJG 3Q-~pr 30-0ct 30/0412018, 2,40,00()0O 139,1 3,33,84QOO.00 1 114c'p~6.e7 7200 6.37.

'"! . 25/04~003, CTG 110104 10.47 LOAN 2015, 12-Feb 1~-A\lg 12/02l~Q~5 1,3400000 134.3 1,7S 962.00.00 284,493.17 402P 6.3

07/0512003 eTG 110111 10.45 ~OAN 2018, 30-Apr ~Q-Oct ' ~0104120J.8 1,~OJOOOOJ! 138.71$ 2.06.1250Q.OQ 31);it7.9,17 45QQ 6.39.• '" ' ."

13/0512003 PSI.) 311016 7.85 REC l'tO.~ONO 2QP7 3D-APt, 31-0ct 31(0712007, 2,.000 oeo 103.$83. 4,OJ966.Q,aO 5591:78 6QO 6.87

26/0512003 SPL 120501 ' 6.4 lAP SOl, 29,13 1.~~Ma~ 12-Nov, 1~/Q512013, 9,OOa.Ooo ,100.8 9 072000.00, 22«)0 2100 ' 6.29

23/06/2003 SOL 120265 11.85 GO.$0(., 2009 OB-Mar OS-SeP 08/09aOP9 9.340.00P 127.8~74 119,4QQl3.16 322813.75 ~~~2 6.35

'"26/06{:2003 eT~ .110108 10,18 ,LQAN 2026 11-Mar 11~Sep" 11/0(:1(202£1 ~cOQ,QPO 148.25 1,17~.OOO.OO 3,5630 360 6.22

, ,

25/07.:~003 ~Ol., 120.433. 8 RJ SOl. 201.2 13-Mar 13-Sep, , .13/0312012. ,200,OOQOO 11t 17 2.22.3400.o.0D ' S866e6,(S7 6000 6.3,.<1•• <L

, .,01/0912003 SOL .1209,35 7.8 AS SOL 2012 19-F~b 19~Au9 19/08(f012 1,750.Q9PO 1l119Z 19..5194750,Q.q" 455QQ. Jj250 6,05,

,03/09~003 ISOL 120548 6.2 TN $OL2015 25-Fep 25-Aug 25/0812015 . 2.750000 t01.26 2 t.64,650.0,Q, 3788.89 825 6.05

16/09120Q~PSJ,J, ljQOQ14 .5.5 F.P.6 MNT.ALLA·~O - - 16/03/2004 1,25100000 J,oo 1.2500pOO.OO. a7$) 5..52I

23/09(2003 lPs\J, 900~n 5.75.I,F.P,364 DAYS SSBJ - - 21(0~/2004 1 500,000 100 1 500000.00 ·45~ 5.85. <," "

08/1Q1200~ P$U 1100033 5.5 F.p.9ty1NT,I,INIIEP,J3. - - QS/Q712,Q04 140.0090Q 1QO , 4Q.00000.Oo. 42C . 5;52_. , ,. ',,",, ..

29/10l/Z003 P.SI.) 900Q4~ 5.7 F.Q.l~40AYa SEtMY - r ;27/1·01Z004. 1.nnnmnr .100, 1.00,,()OOOQ.I)Q .c:. .... 3Q(lQ 5.8.' ." ,

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03/1112QQ3PSI,.! 909051 5.75 F.D 364 OAYS,pNa - - .01/11aQ04, , 1.PO.()()(lOP 1Po.. 10Q,00000.00 30(0 5.85t.: i'

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20/1t12QO~ ISOl- 1~O.&A7 ~.2.GJ $QL 2Qi1~ ~5-r::::,b 2~-Al.jg ?I'i/Ml?n ..15;'. 75QQ,OOO 10082 7,Q52 238 00. 111109,17 22717 6.09" .. ,.: ' ; .. .. l

04/1mOQ~ PSV, 900062 §.4,5 F,p.~MQ.NTI1~SaS. ,- - .Q4/06~QQ4 3.00.00000 i 100 30Q,00000.00 ; 5.42..L . ' ,," ' .~. " L I

1On2.l2J).03SOL 121087 6.2 AP 'sOL 21),15 ,2~feP 25-Aug ~5/0812015, . 2160,000 100.8168 2177642.8$ 39060 648 6.09•17/12.12003 eTG 11010& 10.25 LW,N 2021 ~O-Nov 30-May 30/05/2021 5.000,000 143.5 7,175,000.00 24201.39 . 1500 6.15

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2211~3 pau 900070 5.35 F.O,6 MNT.SYNOI..lJK - - 2~~O~~OO4 4,POO.QQ'O 100 4,000 000.00 5.37.

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,'. Details of Investment 01-04-2003 to 31-03-2004 (Account No. 08)

"Date Cat Code Coupon Partlcul~ts Interest Due Date Maturity Face Value Rate Cost Price Accrd.Jnterest Bank Charge Yield

2311212003 PSU 900071 S.4 r.D.6 MNT.SYNDI.BK - - 23/0612004 2,000000 100 2 000,000.00 ~A$~.L

01/0112004 PSU 900083 j.75 r.D.180 D~YS ANQfiR. - - 29/0612004 1,00,00000 100 1 00 00000.00 5.7~~~ 08/01/2004 eTG 110168 5.87 LOAN 2022 ~8-Feb 28-Aug 28/08/2022 7,65,00000 100.78 7,7096700.00 1,621 587.50 5.~I ,I 13/0112004 PSU 900098 5.65 364 DAYS UNION BK. - - 11/0112005 3,000000 100 3000000.00 5.75I I .

, 13/0212004 erG 110106 10.25 LOAN 2021 30-Noy 30-May 30/0512021 200,00000 144 ~88 O~OOO.OO 415694.44 .6.1ii

! 04/0312004 PSU 900136 4.25 F.D.07 DAYS sal SS - - 11/03/2004 200,00000 100 20000000.00 4.2p,

1610312004 PSU 900142 4.25 F.D.11 DAYS Sal SS - - 27/0312004 400,00000 . 100 40000000.00 4.25,

20/03/2004 PSU 900147 5.75 F.D.364 DAYS ALLA' - - 19/0312005 8,000000 100 8000000.00 ·5.~i ,L 24/03/2004 PSU 900152 5.75 F.D.364 DAYS S8 PA - - ---

23/03/2005 4,60,00000 100 4,60,000QO.00 .- 5.85--- --- ---- --- -

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Item No. 3E: Reviewof Investment in respect of Pension-cum-Gratuity Fund.

The detalls.of Inflows and investmentsmade by S8! accordingto the prescribed pattern as fo"ows:- -. -

Investment for AI c.09forthe period01-04-2003 to 3:1-03-2004· -

INFLOW RupeesOpening BalanceFresh AccretionsMATURmESTreasury 8iHsOthers

INTERESTCentral-Govt. Loans 7,34,43,820.17}State Govt/Gtd Loans 45,11,-018.50}State Dev.Loans 3,28,62,7S8:3'S}PSU/PSFI Bonds 7,14,00,553.30}

Withdrawal from SDSRefund of Income TaxtncennvesRefund of Appl. MoneyRefund of Bank ChargesOthertecipts

3,77,67,173.9229,80,67,000.00

}24,OO,32,300.00} 24,00,32,300.00

18,22,18,150.32

2,13,8'60.00

7,56,97,568.60

TOTAL INFLOW: 83,39,96,052.84--------------~---------------~--------------------------------------------OUTFLOW

i...

INVESTMENTS MADECentral Govt. Loans 32,79,88,614.50}State Govt/Gtd Loans }State Dev. Loans 10,41,65,712.73}PSU/PSFIBonds 37,63,98,300.00}Treasury Bills }

Accrued InterestTransfer to Main Br.Deposit To 50SIncome Tax DeductedBANK CHARGESTransaction F-eesIncome CollectionService TaxMisc. Cha-rges

Current Account

80,85,52,627.23

85,82,190.01

83,699.00}38,060.00}

9,744.00}}

1,21,759 ..00

1,67,29,732.60

TOTAL OUTFLOW: 83,39,96,052.84

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Oetails of Investment in Account No.9 (01-04-2003 to 31-03-2004)

."'Oate~-rc;:~fTC:O~e~~[Coupon J Parti~ulars J Interest due dal!! Maturity Fac, Valqe ~at~ Co~tPrlce Accrd.lnferc~$t l B.ank Ch~rgl! rYield.. cALc

1Q/04I2QO~lCT.O I. ~ 1,.01,11] 10.45[ , " , LQAtf 2[1~'-1 3Q-Oct, 30/04~P18, 3,40,OQ,000, 1391 ~,72 941)0,0.00 1 579. 111.11 1.()2$OJ, 6.37

"?Kin-.;tnnn~lr,fG -110104 -nf47,- .. -. - LOAN 2015 1~-Feb 12-Aug --n;o212015 7,30Q,aOO 134,3. , 9.ao3J,~OQ,QO 154,985,08 2190J - 6,3I

01lQ5i2903!CTG. 110100 11.43 LOAN~015 07-Feb . Q7-A)JQ 07!Q8L2QJ5. c 2,6Q~Op()Q , .1~2,55. ~,7Q,&300Q,QO 742,950.00,1. 78J!.Or~6.3t, J

1"1!n<;nMw:.SI,J , ,311Q~6 7.(15 R~~,L TQ.BQt-tP.2007 ,~O·Apr 3,1-0ct 31/97/?,OO7, 1,0o,0~<l1!9.L 1P3,~8il ~,Q3,98~0,Oo.l 2Z9.M:~ . ~Q(fol !.l.87

'C"fG 110t44. ,~~4t>A'r'!~J.,l:JA~/§!3.1 - - 2.7/06/2'003 1.t~tQQggp 9'9.6.027 1 1.t 5431[9.0. il 1 4JS5QT~ 110140. 91 DAYST.6.(22IaJ3) - - 2'1.1 8,,ooO.OilO S8.8913 ],9j1304.Q·Q J.. jl 4,!5',

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-30~~35123/.0612003 ,$OL 120;324 1M2 RJ,SQ~~01Q 25-Apt Z~,:Qq AMl412010 1,OO,~~ 1~.~~§7 3 .22,8267Q,qO 169,488:89~L 120297 11,3. .. " ,UP SD~~Q10: 24-~ul. ~4-Jan .~4/(r1(~OJO 1,33.9fCXJO 1Z6.2.95~ 1.~91.1?~8Z.·?a 626.47&:71 401'9 6.35'

~T570712003]err 1J~~, " Cb, .x: ...•'

6.8 GJ SOI..,20t2 2.a-.)Un 23~O~c 2~~l.2120J2 , ~.O,~I)OO .10~.Z2 1.1;,4 R~nn~.Ol). .62~~;t33. (&00 6,~4J..J,.SDL.l·,12Q4301 ' 81 . . .. . MH $0\..:21>12 13.;.M.~ 1~-S~p tl/Q3fZltl,2 1,~OJlQ~ 1.10.92 1.6§,3~l)o.Q.OI 406 6l>~.67 450P . 6;34

L. ,;;, '.M/nAnnn11Q.TG.i,. 11011,11 10.451 ... LOA1f~. .~Apr ~O-C)ct 3Q19:4I2QH3 , 1,00,0001)0 142 1,42,OOOOO:.!)O 27~,763:691 3000T 6.09b. .

~1/08120.03jP~GJ..110068.l . 12.6. I,.,OAN~018 ~37N.OV .~3-Mav ~~/W.2Q18 2 (lO,QOOOO, l~S25 ,~,,3Q.500QQiDQ' 546,OO(Ulc[ $06Or-.6.01,','"

61iQ9i2003'TS'OLT 120546 7.13 MG SOl. 2.012 19,:Feb 19-Aug 19/.08(2012 5,000;.000 111.97. 5 598,$00.00' 13QDOr ._- - 15001 6.05

11$01 I 1203~5. P. "' '" .UP.SD.b~Q'P 21,Mar 22-S~p. 22/Q;ttaP10 7,100,PQO . 121;1.$6, M.8~,760.PIl . 34~,28Q.~6 21301 6..03' .•.

375Qt.o.s21..f~/09~QCl3]~$JH.~OOO141' 5.5 f.O.6.~NT.AI.\)I'.BO aK - - 16103/2004 12$ 00000 .100: 1.~5 OOOOO.OQ,!" " ,." ...•.. .~..

?,d/Mnnm[/?SuJ' 9QQ02~- 5.5.1. EO 6 MNT.Aq..Al1I![!3K - - 24/0.3/2004 2,00,OOOQO 100 200,0000e.oo 6.QQ.QL.o.54i, .

[pi.Cr r 9,Q00251. Ml ..FD 6 MNT.ALLAHB:.~.BK - - Z~'Q~Q.o4 5,.0.00.000 100 5 oQOOaQ.Oo. ... 1SQ6.t 5.541.•L .. .,. • ;<.

-(j8/io~903IR$.Yl_~51PQQ3~L ".~:.§:sr- FD,.9 MNT.VNlts'paOI - - OS/07/2,OO4 ,1,CO,00.goo .100 1 OP.OQOOO.OQI 30n6f"- 5:521x",

29I1W20()~IP§U.J. ..900,04$J ,5,71. F,Q.3640AY$"SB}!Y$; - - 27/10/2004 3,OQ,OQOOO 100 3 00 00000.00 9QOO,....5.8.,

Q3/HI2Q03IP§,(f[ ~QllJ)pIL_5.7~I::-=- ~,~ E~364 D~Y$PNB - - 01(.11~OP4; 100 QOOOO, . 100 1,QQ000'0'0;0'0 3QOO 5.8~..11111I2.o,Q~Jf§VL~~.990;521._§.I!L~. ~~_.fl'J.ELBQ@~JJlP _ .9H!1ay - Q41Q~I4Q1~ 2,OQ,00000 1.0.0 2]p.OOOOO~QQ[-- 211),109.591 T 5.81

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Details of Investment in Account No.9 (01-04-2003 to 31-03-2004)

I Date Cat Code Coupon Particulars Interest due date Maturity Face Value Rate Cost Price Accrd.lriterest . Bank Charge Yield I- . " I·

20/11~OQ3 SOL 120543 6.2 MR SOL 2015 25-Feb 25-Aug 25108/2015 3700,000 100.!}865 3736500.50 54163.89 1110 6.08'

04/1212003 PSU 900062 5.45 F.O.6 MONTHS sss - - 04/0612004 2,00,00000 100 2,00,00000.00 5.42

10/1212003 SOL 121088 8.37 KL SOL 2011 20-Jun 20-0ec 20/12/2011 1,00,,00000 114.24. 114 2~OO.00 395;250.00 3000 6.1,

17/1212003 erG 110106 10.2S LOAN 2021 30-Nev 30-May 30/0512021 5,000000 143.5 7175,000.00 24201.39 1500, 6.15:

23/1212003 PSU 900071 5.4 F.O.SMNT.SYNOI.BK - - 23/0612004 2.75,00000 100 2,7500000.00 5.42

01/0112004 PSU 900083 5.75 F.O.180 DAYSANDHRAB - - 29/0612004 4,000000 100 4000(100.00 5.75

08/0112004 eTG 110168 5.87 LOAN 2022 26-Feb 28-Aug 28/08/2022 9,4500000 100.78 9.52,37100.00 ·2003,137.50 5.8

21/0112004 SOL 121090 5.9 ASSAM SOL 2017 ' 21-Jan 21-Jul 2110112017 1,31,00000 100 1 31·00000.00 5.9

13/0212004 eTG 110106 10.25 LDAN2021 30-Nov 3D-May 30/05~021 45000000 144 6 48 001l00.00 935,312.50 S.1t

27/0212004 PSU 900131 4.25 F.O.17 OAY$ SBISSB - - 1S/0312004 360,00000 100 35000()OO.00 4.25

16/0312004 !PSU 900142 4.25 f.O.l1 OAY$ SBI SSB - - 27/03/2004 6,OO,OQOOO " 100 6 00,00000.00 4.25

2310312004PSU 900149 5.75 F.O.3,64DAY$ UQQBK . . ~2/0312005 3,0000000 100 3 OOOOQOO.OO. 5.85

24/0312004 PSU 900152 5.75 F,O.364 DAYS SB PATI - . 23/03/2005 8,20,00000 100 8,20000go·90 5.85

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Item No.4: Portfolio management of EPF money~cha.rgespayabl¢to. $~B.I.for the ye~r2004-05: .. ..

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'The agreement for portfolio manage~ent ent~ed' into with sar lays downthat SBI is entitled tore.l1uneratiQn as setoUt in AnnexUre 'A':'m theagfeement.Thefee as stipUlated in the agreement was applicableiriitiallyfor one year,.to be revIsed on the basis of mutual negotiations. .

.'

Accordingly negotiations were held with the 58! at the level of the Anance &Investment ComfTlitte~ also: These effortsresufted in drastic redUction inthe rates of service charges payable to the sal for handling t-heinvestmentportfoHoof EPFO. . .

The comparative position of the fees payable to 581 for the period from1995-96 to 2002-03 is gNen befow:

BANK CHARGES

I)T.,-ansactionFees.

2S paiseperRs.l00forinvestmentsotherthan50S.

Applicabl I"PPlicablee in 11997"7981996.,.97

~pplicabe in:1995-96

in I/'pplicable ~pplicable ~pplicable in !Applicablen 19~8-99 ~n 1999- ;lOOO-01and n 2002-03

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2.5 paise Re.O.lOper Rs.l00Rs.I00 forlnvestments otherthan 50s.

everyinvestmentother than 50Swith a cap ofRs.l Lakh on-eaeh individualpayment.

per R.e.O.l0 Re.{).OS Rs 0.04 per Rs 0.03 ion per Rs.l00 per Rs.iOO Rs 100 on per Rs !

on every on every Face value of lOO on i'investmen investment every Facevafue jt other other than investment of every Ithan 50S SOSwith a other than in investmen iwith a 'Cap cap of Special t other ;of Rs.l Rs.50,OOO/ Deposit than" in ilakh on - on ~ach Scheme, In ~ecialeach indiVidual addition.a cap Deposit iindividual payment. of Rs. Scheme. I

payment. 20,000/- will Inbe placed on addition a ;the cap of Rs.transaction 20,000/-fee recovered wIll beon individual placed onface value of theinvestment(Deal ticketwise)irrespective ofthe amountinvestedunder thisdeal ticket.

transaction feerecoveredon 'individual I

face valueofinvestment (Dealticketwise)irrespective of theamountinvestedunder tnis I

dealticket.

\ t. 2:

if 1 securities

,iincludingoverdue! interest, ifI any, ;

.~~---4 ~~ -4 -4~ -4 ~ __-+~~~ ~i~ __ ~ i

III) 25 paise lump sum A lump sum Waived ~aived ~aived !WaivedCustod per fees of charge of Rs.l0 'other thanlal Rs.l00. Rs.l0 lacs per scheme [for chargesFees p.a. on. lakhs on on the entire !payable to

investme the entire Non-SGl :Depositorients other non-SGL Securities. !s forthan SGL irrespectiv iDEMATand e of the i transaction5DS. face - ;S

. ~t)tncome

.•.Cot~ion Fees

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so paiseperRs.l00Inavenues.otherthan50S.

I) 25paiSe perRs.l00forSGlsecurities,and onSG~cu.rities,

i) AlufllP sumcharge ()f Rs.Slac per scheJ:nC!as incomecoJlectionfee."

i) WaivedonSGlSecurities.

f) . Waived el) Income 1'1) Incomeon SGL coUected on ~oJjec;tedonSeclJri~~s. .SGl . 6GL

- "Securities.;.No ~rities-charge. Nodlarge

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:Iecte~~ I~~l~meINon-SGl I on Non- Isecurities- Rs i SGL I0.05 per Rs. i secuntles- I100/-on Rs 0.05 !

Ii) SO ill Re.-O.50per iI) Rs.0.2Spaise per Rs.l00/- on perRs.l00 for income Rs.l00/-non-SGL collected on on actualSecurities. non-SGL money

Securities. collected

If) Rs.O.OSperRs.l00/-on actualmoneycollectedon non-SGLSecutitles.

incomecollectedNon-SGLsecuritiesindildingoverdueinterest,any.

: per Rs. ion i 100/-on i

i income i

: collected ,! on Non-i SGL

on non-SGLSecurities.

value.1 TransaI etian in I: Treasu Ii rv BillsI Accept, anceI and I! with-

drawal I·.ofsecurities onbehalfer cerEPF

No charges : No charges

; NoChargesNo charges

The rates applicable in 2002-03, EPFO's proposal for 2003-04 asrecommended by Finance & Investment Committee in its 73rd meetingheld on 14.10.2003. and SBI's response thereto are indicated below:

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RsO.03per Rs 100 on 'RSO.03 'perRs 100 on 'SBIdfd not ag~e--F~ __val~e - of every face 'value o.f every to the, proposal forrrwestm«!nr-Otherthan fn investment otfierfhan:lnreou(tjOi'l of'Spedal -DePOSit Scheme.Sped~1 'PepOsitScbeFne <;h~~ _ ~sIn -addition a cap of Rs. In addition a cap of Rs recommended by20,000/- witl be placedon 20,000/- on the the Finance andthe transaction fee transaction fee recovered Investment I --

~r:e.d on individual on' fnc:flvldualface vafueof Committee CBT,face value of investmentlnvestment,(Oeal ticket1:PF.(Deal ticket wise) wise)lrrespect:ive of thekT$pective of the amount amount Invested underin\tested 'under this deal this deal ticket.ticket ..

2. -Income coJlectedon SGlSecuritles- No charge-IncomecolJectedon Non-"5Gl securities- Rs 0.05per Rs. lOO/-on incomecollected on Non-SGLsecurities inc~udingoverdueinter.est, if any.

SBI to reduce the income SBI has not agreedcollection fee on Non-SGl to the proposal forsecurities from Rs 0.05 reduetion ofper 100/- to Rs 0.{)4 per charges asRs lOO/-recommended by

theFinanc~ andInvestmentCommittee CBT,EPF.

Income-CollectionFees

-CustodialFees: Waived other than for Waived other than forcharges payable to _ charges payable 'toDeposltories for ·DEMAT DepoSitories for DEMATtransactions transactions

No.'COmments.3.

No charges No charges4. Acceptanceand withdrawalof securities onbehalf of CSTEPF

No. comments.

No chargesNo chargesTreasury Bills No. comments.

5) While taking up the matter with 581, it was stressed that investmentsmade by 5BI in TORs is in the nature of short term parking of funds andbe treated equivalent to Treasury Silts. It is not justifiable to pay bankcharges twi-Ce i.e. once at the time of short term parkinq in TORs andagain at tne time·of investments after mat-urity of TORs. 5BI has agr-eedto scale down the bank charges to zero for TORs below lBOdays and aflat amount of Rs.500/- per TOR for TORs above 180 days but less than364 days. S8I's Jetter dated 29.03.2004 is enclosed.

6) In future investment may be made in Repo market and CBlO in additionto TDRsfor short term parking of funds. It may be clarifi·ed to S8I that nobank charqes for lnvestlnq in Repo, CBlO etc. will be payabre SBI beingshort term parking of funds.

7) SBI is willing to continue to be the portfolio manager of funds of CBT, EPFat the preset scale of charges for a further period of 1 year from01.04.2004. The committee decided that S81 may continue to manage

23

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the portfolio dlJringth~'year 2004~05but deferred·theissuere-gardi.,gBank Charges. -

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7) -Them-atter is accor.dingly placed before -.the'Finance. andInvestment Committee for -ccmsideratioA.Oftbe-SGhedule·of-fees'payatilefor2004':05 as _weii -as continllance -of 581 as portfoliom~nager for 2004.;.05. - . -

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- The matter is placed before the Fi"~n"ceand InvestmentConlillittee ·for. "consideration. ,-

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With rcfafJIGC to your leU«ao.lDvea.£?(10)'9S1Bt11k c:bqesIftJI 4arocl2S-43.()4We advise u wod« :

1'QMDEPOSlTBECflPTS

(i) W~ N"C &DIl:iDgpbccmentS, DWsdy because ofthcbcU« yi~ availllblcincompaitoGtD cbc altaDativc investmcat lwoues illtbccacegoly. 11maybo0bscrve41bal webaw'mMo ~withmm,aJizc:d)'ictds of5.85%Ja~ woeb, wbal~boPIk YiC!P' .'tilJl•.~S .•. 'lhu$,the~to ••. tIleill ~~8()~b1'iucll~ liDiisliolmetd1 a~y~ offunds" iJl1:beCIrN off -bilk;. wilen:yiddupcctis ODJysccorntary.

(if) 1D1t& KC in tbebm ofpb,ylic:ak, JPdfCq\Jire much~ fonowupwotk in tams of custodY.~ ~011 oCmawdty proc:;eedsetc. ~T.aU1s ~ atem~ bm(CSQI;A/c) 11)1l',rcpcescolJnDCh ~ouday in tamlofmaHioua(~o.

02.HowcvCt", 1oo1d:oJto dlC cpccial rdaliOoSbip ~ fJ'FO and SBl, wopropo..c toscale down the .chargea'" UDd«;

Allln"estmtllls euept TDRs

TDRI below' 180 clays : Frceot~,(

TDR. above 1&0da.". but ~5 (han164 days . : Flat aDlO1lllt ·}U.SOO/-

=Vau may agree: tb.ac this rc:pce.s.entsa vay s~ u.critioc on our put and tBcfemporaQ' pad:ing coocept if appUed fordepl?)'ID~ below &ixmoo~wbcR yieldconsid.eraUoa is not primary.

03.WeWll be gl3d toreeeiveconfianatioo of tho sbcve.

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Permission to Exel11pted Praviden,tFutad'Trusts foropetN,ng ,.•.• Nat ,Account with. stock Hot_ng,'Corporation w,!ndia Ltd~(SHCrL).'" ,

1. Reserve6ankoflhdia strPufat(!o)rilts .2000-01'NOne~fY ,c;tnd~re(fjtPoticyannounced In April 2001 that' wftlf ~ffectfrom end October~2001 allinvestment of financial ·fnstitutions·a.ndprimarYdealers in Non-SGl securitiesshould be in the,OEMAT form and from 'end June,2002 all their holdIng inthese securities should be compulsorily in the OEMAT'form alone. A lot ofExempted Provident FundsTrusts were operatingOEMATaccountswith StockHoldingCorporation of India Ltd.

2. A Circular dated 20.08.2002 (Copy enclosed ,as Annexure-l)specifying provisions of EPFScheme,'1952 was issued.according to whlchexempted trusts were allowedto open DEMATAccountwith ScheduledBanksand not with Stock HaldingCorporation,of India Ltd. Matte.rwas referred tothe Government for clarification and it did not agree to the request of StockHolding Corporation of India Ltd. vide letter dated 05.02.2003 (Copyenclosed as Annexure-2) in view of following provisions prevalent at thattime in Para27AAof EPFScheme,1952ConditionNo.13:-

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"Board of TrusteesshaU invest the monies in the fund underdirections that maybe given by the Government from time to time.The securities sf)t'dJ'be obtainedin.the·name of the Board·of Trusteesand shall be kept in the custody of a Scheduled Bank under the creditcontrol of the Reserve Bank of India."

3. Stock Holding Corporation of India Ltd. again' represented to theGovernment and EPFOto avoid closure of accounts already opened withthem vide letter dated lL03.2003 (Copyendosed as Annexure-3). EPFScheme, 1952 was amended on 29.10.2003 and aforesaid condition No.13given in Para 27AA was replaced by revised condition No.1S ( C ) givenbelow:

"The DEMAT Account should be opened through depositoryparticipants approved bv Reserve Bank of India and CentralGovernment in accordance with the instructions issued by the CentralGovernment. "

Notification of the Govt. dated 29-10-2003 in this context is placedasAppendix "A".

4. While reconsidering the matter, Governmentof India desired vide letterdated 08.10.2003 (Copy enclosedas Annexure-4) that the matter may bedeliberated in Finance& Investment Committeeof CBT,EPF.'

5. Ministry of Financeand ReserveBank of India has already permittedStock Holding Corporation of India Ltd. to mobilize funds for Government ofIndia by way of relief Bondsand to open SGLAccountdue to its credibility aspremier custodian and largest depository participant of the country.

25

NottRcation dated 17.11.2000 of Ministry of 'Anance 'appointing any,9chedufedBank or Stocktfolding COfPo("aijon of IndiaLtd.as'fts agent at iiiOYplace in India Is enclesed-as Annexure-S. '

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Matter ·is pUt up "before Finance & Investment Committee 1:0~perniitSHCIl .toopenO:~ATAccounts of· Provident Fund TrustS' (Sf"'exempt~,establishments.

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All Regional Provident Fund Comnl'ssioners;nos/snos.

Sub: """1111111"I III MI\ I I\Cqlllllt hy f!X'!m,,11!C1 p,"vlclnlll fllnd tru';' c; •• ItI~CI.

Sir,Reserve Bank of India has advised thal RBI r~gulaledenlllle5 will have to holel -u ltl

deal In debt instruments In the dematerialized form." As a result, In due course ,clllllie';like Provident Funds holding securities In the physical form, may be faced with problem ofliquidity on ac:count of counter parties unwilling to transact In the physical mode. ReserveBank of India, therefore, suggested to Issue suitable Instructions to Provident Fund Trustsexampted under the provtstons of Employees' Provident Fund &. Misc•. Provisions Act,1952to start the process of dematerlalizlr)9 their existing holding In their own Il1t'!resl,RBI's Circular No. IDMC/PORS No.5039/03.64.00!2001-2002 dated 20.05,2002 I~enclosed ror InformaUon and ready reference. . .

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EMPLOyeeS' PROVIDENT FUND 'ORGAN'ISATION(MinIStrY of Labour, Govt.ofIndia)

. :.. :(HeadOffice) , .-Shavishya Nidhf Bhawan, 14, Bhika'.i:ji,Cama Place,

~e.~DeIhltt~=i.-\~5No.lnvest.I/l(76)2001/DEMAT/ ,§l8g99:' - .. Dated: 1J;00.2002

. 'IReULAHTO

Exempted establishments are governed 'bv the terms & conditions given In Para .'27AA of EPFScheme,1952 and condltlon No,13 provides as under:-

"Donrd of Trultcfl5 sholl invest the monies in the fund under directionsthat mny h.e given by the Government (rom tf'"~ to Uri16. 'rho seeurltles shim hr.obtained In the name of the Board of Trustees and shall be kept In the custody I)f

a scheduled Bank under the credit control of the Reserve Bank of India",

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To mitigate the dirflculties In making the Investments In physical forrn of SCCllrili'~',as polnted out by Reserve Bank of India, Board of Trustees of establishments ext:I1II·!1under relevant provisions of EPF & MP Act, 1952 be allowed to keep the securities, inDEMAT accounts with Scheduled Bank under the credit control of the Reserve Oillli< 01India. Further It may be noted that RBI does not control all the brokers/private firrn·; who

'" are entitled to operate as depository participants of NSDL/CSDL. NSDL and CSDI. do noropen the DEMAT accounts directly, rather they operate through depository parttctpantssuch as Scheduled Commercial Banks, private companies and, brokers, for safe custody offunds exempted provident fund trusts should not be allowed to open DEMAT accounts wi~1Jbrokers/other private companies' acting as depository participants. Accordingly suchexempted trusts may open OEMAT account only wIth Scheduled Commercial Bank. (Thi~issues with the approval of FA&CAO)

End: As above.'""",Yours faithfully,

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REGIONAL PROVIDENT FUND COMMISSIOt:rER (INVST.) ( )

Copy to all officers at Head Office (list enclosed).NATRSS.Concerned f;"le (Investment -I)

(REGIONAL PROVIDENT FUND COMMISSION •...I1O_.J'T'·1I

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, .-No.<J-27031/2l2002.sS.II

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Clarification regarding opening of DEMA T Account byexempted PF Trust With SHCfL & Entities other thanScheduled Commercial Banks. - regarding.

lam directed to refer-t-oyour letterNo.E.UII18(5)2002l00MATI2360dated 15.1.2002 on the subject mentioned aboveand to state that thismatter.has been examined and it was not found feasible to~ee to the requess

Yours' faithfuli y,

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(SanJUkta Ray)Under Secretary

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K.C.,BamIyopadhyayManaging Director a CEO .

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March 11, 2003

Shri. P.D.ShenoySecretary.to the Govt. of IndiaMinistry/of Labour ..... ... ...,ShramShakti Bhavan .Raft,MargNew Delhi -110001

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Dear Sir,

Sub: Depository Services to Exempted Provident Fund Trusts

I address this letter seeking your kind intervention to include SHCll's (StockHolding Corporation of India Ltd.) name in the list of eligible institutions to providedepository services to Exempted Provident Fund Trusts.

Our Branch Manager, Shri Rajesh Oegra has been in touch with various offICialsin the Employees Provident Fund Organization seeking their support for inclusionof SHetL's name in the eligible institution's list. which seems to have beenomitted inadvertently while amending the Employees Provident Fund Scherne~ -. . ( \1952 in December 2000. A letter was addressed by our Branch Manager onAugust 29,2002 wherein we had requested the EPFO to include SHeil's nameas one of the eligible Organisations to provide depository services to ExemptedProvident Trust. The Regional Provident Fund Commissioner was kind enough toinform us vide letter No. E.III118(1)2000/32893 dated September 19, 2002 thatthe matter was under consideration. Subsequently vide letter No.E.1I1118(6)2000IDEMAT dated October 29,2003, we were informed that since theexisting provisions of the EPF Scheme 1952 provided that the securities are to (be kept with a scheduled bank under the credit control ot RBI, the matter was J C

be.ing refe.rred to the Ministry of Labour for further clarification and guidance. 'i. (?Even as we were e>q>eeting a favourabte response, we received a/ (Vi (jcommunication vide letter No. EIIU18(6)2002/DEMATL29844 dated February 282003 informing us that the Government of India has expressed its inability to~cte_!9. our request

In this context we would like to submit as follows:

As you are aware, before the amendment of Employees Provident FundScheme, 1952, on December 22, 2000. the scheme did not restrict the extensionof service to scheduled commercial banks. A new paragraph namely, viz., 27AAwas inserted afterparaqraph 27A which read as follows:

\\\Millal Court. 'S' Wing. 2nd Floor, 224, Nariman Point, Mumbai-400 021.

1r: (Direct) 202 7271.204 5480· Fax: 202 7211a-mail: [email protected]

mailto:[email protected]

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"27AA.-Terms and conditions of exemj:>tion:-All exemptions already granted or to be granted hereaft.er under section "17of.theActQr 'underparagraph27A of the' $Cherne shall,·be. subjeCt to the terms' 'anaconditions as given in the AppendixA."

Clause 13 of Appendix A stipulated that

"The Board of Trustees shaft invest the monies in the fund as per directions givenby the -Government from time to time. The securities shan be obtained in thename of the Board of Trustees and shall be kept in the ~stody of a sc-hedutedbank under the .creditControt of the -Reserve BanKof India".

This is understandable as having regard to the safety and security of theinvestment. the Government must have thought it fit to introduce this particularclause primarily to desist.ExemptedProvi,dent Fund TfU$tSfrom opening anaccount with brokers and other private depository participants. However, in theprocess inad\lef'tently and unintentionaHy SHeil ~s.been «>mbined withbrokersand private depositOfy -participants, thereby barring Exempted Trust from openingan account with SHell.

SHeil apparently does not require .any introdu~ion to the Government of tndia:-'Set up at the initiative of Government -of India and prcmotedby seven major aftIndia financial institutions like lie. GIC and its four ~idiaries. tcJCl.,(flOw.fete,Bank). IDBI. UTI. IFel and USI. SHCllis the premier Custodian and the far~tDepository Participant in the country providing custodial.and depository relatedservices to a .Iarge number of clientele. The clientele ,of. SHeil incltlde .majorfinancial institutions and Mutuaf Funds, leading corporates,private and publIcsector banks, PSUs. Trusts and neatly 7 lakh individuals and NRls.

Not only the institutional and individual investors, but the -Government of Indiahas also been using the services of SHeil for disinvestment process of variousPSUs. SHCll has successfully carried out the disinvestment process of ChennaiPetroleum,BOAgaigaofl Refmery & Petrochemicais Ltd., Kochi Refinery, SAILPower Supply Corporation Ltd.. CONCOR, IPel, CMC. equity swap betweenIOC, ONGC and-GAIL and many others.

It may be mentioned that SHeil is the only Non-Banking Organisation to beauthorised by Ministry of Finance and RBI to mobilise the -Government of IndiaRelief Bonds. Besides SHeil was one among the fifStto -be authorised to openSGL and Current Accounts with RBI largely due to its credibility, parentage andunique position enjoyed as a premier custodian and largest depository participantof the country. Further, many of the public and private sector banks themselveshave their depository accounts with SHCIL.

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We enclose copies ..of a few notifications and letters received -,from RBI· andvarious Ministries to highlight the special privilege accorded toSHCIL Further,.ltmay not be out of. place to mention here that tlJe SHCILhas:.been .authoiised ·toact as custodian and approveo inlefn1edlary for Securities Lending Schemehaving regard to the fact that SHCll had fulfilled the capital requirement of Rs.50crore (present net worth irt excess of Rs.140 crores) and the systemrequirements.

In the light of theabove, we request you to kindly include SHCll in the list ofeligible entities for providing depository related services to the ExemptedProvident Fund Trusts. AHemativery. you may also consider including all SEBIapproved custodians as eligible entities for providing depository related servicesto the Exempted Provident Fund Trusts. .

We understand that the letter issued by the Regional Provident FundCommissioner has already been circulated to various Regional Provident FundOffices .: This would result in respective offICeS instructing .the ExemptedProvident.Fund Trusts to close the accounts with SHCIL, which would result inexodus of depository accounts from SHCIL. We therefore request you to kindly·instruct the Regional Provident Fund Commissioner not to issue any instructionsto the Exempted Fund Trusts to close their accounts with SHCll till such time afinal decision is taken in this matter;

We enclose copies of the correspondence exchanged between the Employees'Provident Fund Organization and our Organization for your ready reference. Inthe above background,·we request you to kindly examine our representation andfavour us a positive response at an e~rly date. I shan be pleased to furnish anyinformation or document that you may require in this context.

Thanking you,

Yours faithfully,

.(K.C.Band,;~J;;hyay)encl.: ala

cc: Shri Ajay SinghChief Provident Fund CommissionerEmptoyees Provident Fund OrganisationBhavishya Nidhi Bhavan14, Bhika}i Cama Place,New Delhi-11 0066.

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Subject:

. New Delhl,O~d8.1{).03

Depository Services to€xempted Provident F-itnd Trusts-representation made by Stock HokUng Corporation .of IndiaLimited(SHCll). ;.: ,.:.. !h·,

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l.arn dir~ooto refer to yourletter no.E.1Il/1SE6) 2OO2/OEMAT/t070

datec;l14.~:2003~ thesuPj~fme~above ~to say that fhe-matter(> . .~

. has been e)c·amioed in-consulation with IFD.branch of this Ministry whoi1av.e

; ~ ~ Oesifed that this .matter may be deliberated in the Finance and lrivestment

k Committee in detail and after getting the approval of F& 1C and e~ivee: .~A~1 Committee the issue, may be referred to the Ministry.( ~V\ 1 b~"V19 .l' \C yt._ (lY'" • . .: ~:~~(C)0..~7 ~<t.,~.o~

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Yours faithfully

(

~.~{K.C. Jain)Director

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The Manager, ..Government of India Press,

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[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRA-ORDINARYPART-rrStCTroN 3-(1)] , '

Government of India/Bharat Sai"karMinistry-ofLabourlShram Mantra{aya

--_ ..-NOTIF1CA ffON

New Dethit;i.. (.. J-10.CJc~-c.l('Ji ,1£'v1_ ,

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GSR{E), - In-exerctse of thepowers-confer'foo by seetion 5,read with sub-section '{1).of section 7..afthe€mployees'1>.r<>videntFunds-& Misc.et.laflOOUS-Pt"ovisions Act, 19S2.{19-of 1952~, the CentralGov-ernment hereby makes the foi,[owing Scheme further, to amendthe :£mptoyees' f>1'OV4dent f"undsScheme, '1952 namely:-

1. (1) This Schet11esh<Nt '''be .caRed thefm:ployees'Pf"ovidentfuoos (A~ 'eoOOKfoAs) 5cherne, 2003.(2) ~tsAa·t.tcome, into force wit-he'ff~ct from· thecate -ofi tspubi ica!ion in the 1Jff.icia! <iazett-e.(

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In parag-raph 27 AA of Ernptoyees' Provident funds Scheme,1'952 for the existing Appendix-A, the fotl'Owing Appendixshalt be substituted 1 nanle~y:-

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"Appendix rA'r-;, ,

Revised Conditions for Grant of Exemption ·under Section 17 ofthe Employees' Provident Funds and Miscellaneous ProvisionsAct,1952.

The foHowing are the revised conditions for grant ofexemption under section 17 of the Act, 1952:- .

1. The employer shall establish a Board of Trustees under hisChairmanship for the management of the Provident Fundaccording to such directions. as may be given by the CentralGovernment or the Central Provident Fund Commissioner, asthe case may be, from time to time. The Provident Fund shallvest in the Board of Trustees who will be responsible for andaccountable to the Employees' Provident Fund Organization,inter alia, for proper accounts 'Of the receipts into andpayment from the Provident Fund and the balance in theircustody. For this purpose, the "employer" shall mean .;

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"(i) in relation to an establishment, which is a fact-ory, theowner or occupier of the factory; and

(ii) in relation to any other establishment, the person who,or the authority, that has the ultimate control over theaffairs of the establishment.

2. The Board of Trustees shall meet at least once in everythree months and shall function in accordance with theguidelines that may be issued from time to time by theCentral Government! Central Provident FundCommissioner(CPFC) or an officer authorized by him.

3. All employees, as defined in section 2{f) of the Act, whohave been eligible to become members of the ProvidentFund, had the establishment not been granted exemption,shall be enrolled asmembers.

4. Where an employee who is already a member ofEmployees' Provident Fundor a provident fund of any other

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~xeJJlPtedestabtishment is employed in his estabttshment,the employer shaUimmediatelyenrotlhim as a member ofthe 'fund. Tile employer shouldalso arrange t-o have theaccumulations in the provident fundac-eOUf\t of such.employee. with hjsprevious, ernptoyer transferr-ed andcredit.ed irltohis account.

The employer shalt transfer to the ,&>ar<f -()f Trustees thecontributiorls payabte to the Provident Fundby himself andemployees at the rate .pr-escribedunder the Act from timeto -timeby the 1.s{h ofeach month ·foUowing the month forwhkh the contributions are payable. The employer shaHbe -liable.to pay simpte inf-erest in terms 'Of t-he provtsions of.section 7Q of the Act for any delay tn.payment-of anyduestowards the Board of Trustees.

The employer shaH bear aU the expenses of theadministration -of the Provident fund and also make goodany other toss that may ,be caused to the Provident Funddue to theft, bur-glary, -<lefaka~iao,misappropriation or anyother reason.

Any deficiency in the interest declared by the Board ofTrustees is to be made good by the employer to bring it upto the statutoryIirrut.

The employer snalt display on the notice boar-d of theestabusnrnent, a copy of the rules of the funds as approvedby the' appropriate authority and as and wbenameosedthereto ...aloAg. with' a transtatiori in the language of themajority of the employees.

9. The rate of contnbutions payable, the conditions andquantum of advances and other matters laid down underthe provi-dent fund rutesof the establishment and theinterest credited' to the a-ccount of each' member.calculated on the monthly running balance of the memberand declared by the Board of Trustees shalt not be lowerthan those declared by the Central Government under the

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.-various provisions prescribed. in the Act and the Schemeframed there under. :

10. Anyamendmenttothe Scheme, which is more beneficial totheemptoyees than the existing rules of the establishment,shall be made applicable to them automatically pendingformal amendment of the Rules of the Trust.

11. No amendment in the rules shall be made by the employer.without the prior approval of the Regional Provident FundCommissioner (referred to as RPFC hereafter). The RPFCshall before giving his approval give a reasonableopportunity to the employees to explain their point ofview.

12. All claims for withdrawals, advances and transfers shouldbe settled expeditiousLy, within the maximum time frameprescribed by the Employees' Provident Fund Organization.

13. The Board of Trustees shall maintain detailed accounts toshow the contributions credited, withdrawal and interest inrespect of each employee. The maintenance of suchrecords should preferably be done electronically. Theestablishments should periodically transmit the details ofmembers' accounts electronically as and when directed bythe (prC! RPFC.

14. The Board of Trustees. shaU Issue an. allmJal·.ststement ofaccounts or pass books to every employee within sixmonths of the close of financial! accounting year free ofcost once ill the year. Additional printouts can be madeavailable as and when the members want, subject tonominal charges. In case of. passbook.: the same shallremain in custody of employee to be updated periodicallyby the Trustees when presented to them.

15. The employer shaH make necessary provisions to enable allthe members to be able to see their account balance fromthe computer terminals as and when required by them.

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16. The Board-of Trustees and the employer shaU fHe suchreturns monthly I annuaUy as maybe pr.ese'fibedby theEmployees' 'Provideijt . Fund ·Organization wit-hin thesped'fied- time-limit,failing which it willbe deemed as adefaul t and the Board of Trustees and employer wit joinetyand separately be liable fpr ,:suitable penalactton by theEmplOYee5'Provident fund Organization.

17;./ ,The .Board.of Trustees st)att invest the monies .of the\.../pr{)vident fund as per the dtrecnonsotthe Gov.ernment

from time-to time. faiture to make investments as perdtrecttonaof .ttleGovernment snail make. tbe Board ofTrusteesseparatety and :iOintty,tiable to sur.charge a'Smaybe imposed by the ..Cent rat Provi.aentFuoo Commtsstonerorhis repr~entative.

18<, (a) The securities shalt be·obtained in the name ofTrust. The securities so OOtalned shout<J be tn.aemateriaUzed to£MA T) form and in case the requiredfacility is notavaltabl.e in the areas where the trustoperates; the Board of Trustees shaH inform the Regiona]Provident Fund Commissioner concemedaoout the same .

(b) The Board of Trustees shaH maintain a script wiseregister and ensure timely reaiizationof interest.

(c) The DEMAT Account shoofdbe opened .throughdepositQfY.;partkipoots approved by Reserve Bank of Indiaand Central Government in accordance with UIeinstructions issued by the Central Government in thisregard.

{d) The cost of maintalning DEMAT account shotid betreated as incidental cost of investment by the Trust. A~soatt types of cost of investments Uke brokerage for purchaseof securities etc. shall be treated as incidental cost ofinvestment by the Trust.

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/All such investments made, like purchaseof securities andbonds, should be lodged in the safe,custody of depositoryparticipants, approved by -Reserve-Bank-of tndfa andCenfralGovernment,- who shalf be 'the custodian of thesame. On closure of establishment or Ilquidatton orcanceUation of exemption from EPF Scheme, 1952, suchcustodian shall transfer the investment obtained in thename of the Trust and standing in its credit to the RPFCconcerned directly on receipt of request from the RPFCconcerned to that effect.

2D. The exempted establishment shaH intimate to the RPFC~ concerned the details of depository participants (approved

by ReserveBank of India and Central Government), with_Whomand in whose safe custody, the investments made inthe name of trust, viz., Investments made in securities,bonds, etc. have been lodged. However, the Board ofTrustees may raise such sumor sumsof money as may berequired for meeting obligatory expenses such assettlement of claims, grant of advancesas per rules andtransfer of member's P.F. accumulations in the event of .his/ her leaving service of the employer and any otherreceipts by sale of the securities or other investmentsstanding in the name of the Fund subject to the priorapproval of the RegionalProvident Fund-Commissioner.

Any cornrmssion, incentive, bonus, or other pecuniaryrewards given by any financjal or other instttutlens for theinvestments made by the Trust should be credited to itsaccount.

22. The employer and the members of the Board of Trustees,at, the time of grant of exemption, shall furnish a writtenundertaking to the RPFC in such· format as may beprescribed from time to time, inter alia, agreeing to abideby the conditions which are specified and thts shall belegally binding on the employer and the Boardof Trustees,including their successorsand assignees,or such conditionsas 1T1aybe specified later for continuation of exemption.

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. 23. The employer and the Board of Trustees shaH also give an'undertaking to transfer the funds promptly within the timelimit prescribed by the .£ooeemed-Rf'FC.in tne ~event{)fcancellation 'of exemption. This shall bete.gaUy binajngonthem and will make them liable for prosecution in theevent of any delay in the transfer of funds,

24. (a) The account of the P.rovident fund maintained by t~Board of Trusteesshall be subject to audit bya "Qua{ifiedindependent ctrartered accountant annuaUy. Where-considered nec-essary, the {:PFCor the RPfC in-charge ofthe Region shaHhave the right {" have the accounts re-audited by any other quatified. auditor and the expenses soincurred shaU be borne by the employer .

{b) Acopy of the Auditor's report a4.ongwtth tne atKfitedbatancesheet should-be submitted to the RPfC concernedby the·Auditors :directly wfthin six months after thecloslflg .of the financial y-ear from 1st April to 31st Mardl- The

.. ~ f-ormat of the balance sheet and the informqtion to befurnisbed in the' report shall be as pcescrieed ·by theEmployees' Provident Fund Organization and madeavatlable with the RPfC Off'ice in etectrontc format as weltas a signed hard copy.

{c) The same auditors should not be appointed for twoconsecutive years and not more than two years in a blockaf six years.

25. A company reporting toss (.of three consecutive financfaiyears or erosion in their capital base shatl have their:exemption withdrawn. from. the first day of the next!succeeding financial year.

26. The employer in relation to the exempted establishmentshaH provide for such facititles for inspection and pay suchinspection charges as the Central Government may fromtime to time direct under c-lause (a) of sub-section (3) of

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section 17 of the-Act within ~r5'daysfrom-ihec.[ose of everymonth. .

27. In the event of any violation of the conditions f-or grant ofexemption, by the employer or the Board of Trustees, theexemption granted may be cancelled after issuing a show.cause notice in this regard to the concerned persons.

28. In the event of any loss to the trust-as a result of any fraud,defalcation, wrong investment decisions etc. the employershall be liable to make good the loss.

29. In case of any change of legal status of the establishment,which has been granted exemption, as a result of merger,demerger, acquisition, sale, amalgamation, formation of asubsidiary, whether wholly owned or not, etc., theexemption granted shaH stand revoked and theestablishment should promptly report the matter to theRPFCconcerned for grant of fresh exemption.

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30. In case, there are more than one unit! establishmentparticipating in the common Provident Fund Trust whichhas been granted exemption, aLL the trustees shaH bejointly and separately liable/ responsible for any defaultcommitted by any of the trustees/ employer of any of theparticipating units and the RPFCshaH take suitable legalaction against all the trustees of the common ProvidentFund Trust.

31. . The Central Government may .lay down any furtherconditions for continuation of exemption of theestabt ishments",

D.S.POONIA,Joint Secretary to the Govt. of India.

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- -- .--Item No.6: Screen based trading of Government Securities

1.

(i)

Investments of the fund administered by the CBT,EPF are -made inaccordance with the investment pattern not-ified under para 52 of EPFScheme, 1952 and the investment guideJfriesfiilddown by the CentralBoard -of Trustees, Employees' Provident Fund. The pattern ofinvestment and the investment guidelines need to be executed fromtime to time in eccordance with the changes in market environment.Extant investment pattemnotified pytl)a-MiRistptof Labour on09.97~~003. is reproduced bel ow_Which predominantly .provides forInvestment 'in debt markets. Bank Deposits - ar-e just short-term .parki~:- -

1NVESTMEm" PATTERNPercentage amount

to be invested

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25% !.~

Cent-raf Government 5ecuritiesas defined in Sec. 2 of the Public DebtAct, 1944 (18 of 1944); and lor units of such Ml,ItualFunds which havebeen set up as dedicated Funds for investment in Gov.ernment secunnesand which have been approved by the Securities and wcchange 8oa-rdofIndia; !

I.-1(ii) GQv('!mment Securities asdefmed 1n Sec. 2 C>fthe Public~ot

Act, 1944 (18 of 1944)'; .c-reated and' tsSt.ted by aOY StateGov~mg:i~!ltiWldl.,pc ,units ~j)f·sudl·MutliJa' ,FundS which 'havebeen set up as 'dedicateQ Fun<:,fsfor Investment in ~overn~ritsecurities and whidl. have been approved by the Securities and .Exchange Boarddf India; and/or .Aoy othef"negotiabte securities the .principal whereOf andinterest-whereon isfufly.arldunconditionaUyguaranteed by the-Central Government' or .any State Government exc-epttnosecovered under (iif) (a)·below

(a)

15% IiiiII

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(b)

(;.V) " To-be tnveste"Cfin any of the ab9ve three categories as detidedby their.Trustees. .. .-

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.-(b)

Bonds/ Securities of 'Public Financial .Instit-utions'· as s-pedfiedunder Section 4{i) of the Companies Act; "public sector.companies" as defined in Section 2(36-A) of the Income TaxAct, 1961 including public sector banks: and lorShort :duration (less than a year) Term Deposit RecceJpt-s(TOR)issued-by public sector banks

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!--·30%

The Trusts, s~bject to tnei~ assessment ~fthe ~~k -' re~umprospects, may invest up to I'1/3,d of {iv) above, m.pnvete sector bondsl securitles, which have an investment grade i

rating from at least two c-redttrati1l9 agencies.

'.(vi) Any moneys received on the maturity of earuer investments r-educed by

obligatory outgoing shalt be in\tested in accordance with tf-leinvestmentpattern prescribed in this Notification.

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(vi;) In case of any instruments mentioned above being rated and their ratingfalling below investment grade and the same rating has been confirmed bytwo credit rating agenCiesthen the optionof exit canbeexercised.The investment pattern as envisaged in the above paragraphs may beachieved by the end of a finandal. year, ands~~ll_ ~~_e into force with·i·mmediateeffect:~.. .. ",--,-,,-, ..-'-~~-~'~-'--,._---.,

(viii)

2,. Debt Markets/ ...

TheDebt market in-~India ~omprises of two main segments, viz. the_~overnmEmt Securities market arid the corporate securities market, besides~the emerging market for. interest rate dertvates (IRDs). Governmentsecurities form the major part of the market in terms of outstanding issues,market capitalization ano tradmg value. ,

Traditionally, debt market has been an institutiona, market all over theworld. Banks and institutions contribute more in term of trading value. InIndia, banks financiafinstitutions (FIs), mutual funds (MFs), provident funds,insurance companies and corporates are the main investors. Banks have'been investing in this market mainly due to statutory requirement of meetingStatutory Liquidity Ratio (SLR), many of these partiCipants are also issuers ofdebt instruments. Thesmall number of large players has resulted inthe debt markets being .fBjrly concentrated,-and evolving int(J a'wholesale negotiated df!81ings mancet. HOst-debt issues areprivat~IY plac.edDr.,auctiE)ned,t4 -the 1JtWfidpants.Secondaty marketdeaflnqs .are mostly undertaken through, telephonic, negotiations amongmarket participants. In some segments, such as the government securitiesmarket, market makers in the form of primary dealers have emerged whiclt_enable a broaderhofding of treasury securities •. Debt funds of the mutual'fund industry compriSing'ofliquid funds, bond funds and gilt funds, representa recent mode of intermediation of retail investments into the debt markets.

3. Policy Development in Debt Market

In India, fiscal policy compulsions rendered internal debt managementbefore 1991-92 passive. To keep Government borrowing costs down, lowcoupon rates were offered on Govt. securities, which made real rates ofreturn negative for several years-till the mid 19805.- With .acaptiMeinvaGtorbase (th~¢ugh SLR) and interesF:below the -market rate, secondary marketfor Govt. bonds remained dormant. Artificial yields on Govt. securitiesaffected the. vletdstructure of ftlTancial assets in the system,' and led tohigher lending rates, Driven by these compulsions RBI's monetarymanagement was dominated by a regime of administered interest 'rates, andrising eRR and SLR prescriptions. High eRR & SLR left little room for

, monetary maneuvering. It is against this backdrop that development of the t,Govt. securities markets was initiated in the 1990s.

With a view to develop and deepen _debt market, particularly Govt.Securities market, and optimizing cost-maturity structure- of Govt.borrowings, a number of important policy measures were initiated and

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- --implemented. The policy measures adopted far this purpose have beendiscussed in detail in Annexlire I.

In sf:!~I!=,L,J:-<!r_dey.eIQRing..a vibrant - Govtr -Securities--mariret, the-To1rowrng-s~ps were,ti;Jl<en:. . .

i) The' operational autonomy 'Of RBI. was increased by aboHtion, ofautomatic monetisation through adhoc treasury biHs and it wasr-e"taced by W'ays 'aM MeansAdvancesfacility to meet temporary cashflowmrsmetcbes for the CentralGovt, .

ii) Goyt. borrowin9"wasmade marketbasedthrouqh the mtroductlon ofauction' system in primary issues.' .-

lH) Improvem:eQt.io Jnstit.utionaU.nfrastructurewer-e sought to be achieved.through t.ne setting up of system of Primary Dealers. .

lv) The breadth qnd depth of markets Were sought to be improved byintroduction ofa variety of new instruments viz., zero coupon bonds,capital indexed bonds, floating rate bonds, call and put option bondsetc. . .

v) RBI started actively pursuing thecQnsofidati,ori of debt thmugh re-issuance/re-o~nitlgs through price based auctions. This has greatlyimproved the market liqUidity and-helped the' ernerqenee-of bench-mark securities. _ .

vi) Trading & settlement ,systems have been' improved throughintroduction of Delivery Ve~us i P~yrnent '(DVP) system' andoperatlonaliSat:ion of Negotiatet{ Dealing System-{NDS) and ClearingCorporation of India Ltd. (CeIL).

vii) Retail market in Govt. securities is sought to be promoted through asystem ,of non-cornpetitlve bidding at primary auctions.

4. OTHER-DEVELOPMBNTSIN UEBTNARKET. .

~. Non-competitive Bidding: Under the scherne, the investors who donot malntain current account or SGl account with RBI are eligible tobid; the minimum amount of bid is' Rs. 10,000 and thereafter inmultiples of Rs. 10,000 and the maximum amountof each bid is Rs. 1crore; bids are placed through a bank -or 'PO; the total amount underthe scheme does not exceed SOlo of the notified amount; and allotment-of ,,()n-competitive bi~~~ ~r~,m9Jlegt.J:~,.a.v.eJ:~ rate ofsoccessfLiTcompetiElve' bidders. This-system is very useful for,exempted provident fund trusts and is utilized by many smallplayers in the 'market.

Market Infrastructure: As part of the ongoing 'efforts ,.to build-debtrnerket infrastructure, two new systems, the NOS and the CCIl--commencedoperatlons on February 1S,)2002 to faci.titate debt marketoperetlons. The CCll facHitates settlement of transactions ingovernment securities {both outright and repo) on Delivery versusPayment (DVP-II) basts which provides for settlement of securitles ongross basis and setttementof funds on net basis simultaneously. Itacts as a central counterparty for dearing and settlement ofgovernment securities transactions done on NOS. With a view to

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improving transparehcyand strengthening efficiency in themarket, itwas decided by RBI that from the fortnight beginning May 3, 2003, itwould be mandatory for all NDSmembers to report all their calli noticemoney market deals on NDS. Deals done outside NDS should bereported, within--!5 -mifttJtesof ,eondttd~thedeal--ifTespeaiveof thesize of the deal or whether the counter; party is,a member of the NDSor not.

IsslIc:ln(:E! Cill~"de~;RBI h_a~be~.nJ~suil)~.!~sl!.all~~_,£~!~ndereveryhalf-year since March 27, 2002 to provide all indicative calender forIssuance of marketable dated government securities, This helpsinstitutional and retail investors' to plan their investment in a bettermanner and will also provide' transparency and stability in thegovernment sectlrftfesmarket: RBI woofd,however, .have the ffexibUityfor additional issuance of government securities as per emergingrequirement of the Government and market conditions.

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~ Prevention of scams in Govemm.entSecurities: In light of thefraudulent transactions in the guise of government securitiestransactions in physical format, RBI issued a circular on June7, 2002to accelerate the measures for further, reducing the scope for tradingin physical form. The measures were as follows:

(i);.

For banks,whfch do not have SGL account with· RBI, only one CSGLaccount can be opened. ',~ ,

, (ii) In case the CSGL accounts are _opened witha$cheduledcommercial bank, the account holder' has to open a designatedfunds account (for all ,CSGL related transactions) wittJ the samebank. '

(iii) The entities maintaining the CSGl / designated funds accounts willbe required to ensure availability of clear funds in the, designatedfunds accounts for purchase and of sufficient securities in the CSGLaccount for sales before putting through the transactions. .

(iv) No further transactions by the bank should.' be qndertaken inphysfcatforrn with any broker with Immediate effect.

(v) Banks should ensure, the brokers approved 'for transacting in--',government securities are registered with the debt market segmentof NSE/a,SE/OTCEI....:'

(vi) It should_also be ensured that users of NDS deal directly on thesystem and use the system for transactions on behalf of theircllents.,

.:. Transactions through SGL Account: For purchase / sale ofsecurities through SGL account under the DvP System, wherein thetransfer of securities takes place simultaneously with the transfer of

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funds, both the seUingbank and the buying bank should maintaincurrent account. with RBI. As no overdraftfaci4ity in the currentaccount would be extended, adequate balance in current accountshould be maintained by banks for effecting any.Rurcha,setransaction.AI1 transc;rc:fions in govefnm~n,t,~~ctlnties for- Wflkh - -5Gl faciUty isavanabte should be put through SGl accounts only .

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•:. Engagement of Brokers: Banks shoukf observe the followinq.guidettnes forengag;ngbrokers~ fa)' "FraflSactionS·-bet:weefl· one"oonkand another bank should not be put through the brokers' accounts (b)If a deal is put through with the help of a broker, the rote of-the brokershould be restricted to that of bringing the two>parties to the dealtogether. (c) While negotiating the deal, the broker ls not obliged todisclose the identity of the counterparty to the deal. (d) On the -oesisof the contract note discloSing the name of the counterparty,settlement of dea1s between banks, viz. both fund settlement anddelivery. of security, should be directly between.the banks, and thebroker shall have no role to .play in the process. (e). With the approvalof ,their top rnenaqements, banks should preparee pane/of approvedbrokers Which should be reviewed annually, or more often if sowarranted. Clear-cut criteria should be laief-down f.or empanelment ofbrokers. A record of broker-wise details of deals put through andbrokerage paid, should be maintained. if) AJ,UsprQPQrtl<H1cgepartofthe business should not be transacted" through only one or a fewbrokers. Banks should fhe aggregate contract limits' for each of theapproved Orokers. A limit of 5% of total transactions {both purchaseand safes) entered into by a bank during a year should be treated .asthe aggregate upper contract limit for each of the approved brokers.This limit woukf cover both the· business initiated by a bank and thebusiness offered I brought to the bank by a broker.

Note: As per extant investment guidelines of CBT,EPFno brokerage is, ,pay~ble even though portfofiomanager utilizes the services of

brokers empanelled with SBI. Over the years marketparticipants have become -.accustomed to accept theseguidelin,es.

Real Time Gross Settlement: RTGSSystem of RBI is scheduled tobe dellvered shortly folf-ow~ by, instaHation,restlng .andcommencement 'of paralle! run. There would be a single RTGSSystemfor'the country. The RTGSSystem wou~dfacUitate Jarge value inter-

=.bank payment and settlement in real time ,oonne mode on .,G

transaction by transaction basis. It would enhance svsterntc efficien.tyandminimise the existing settlement risks. In fact, t-he RTGS Systemthe world over has come to be regarded as the sine qua Bon of everyadvanced economy.

5. Purchase of Government Securities

Investors can purchase 'Government securities including T-Bilts eitherfrom primary market or from the secondary market.

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Primary Market Issuance ProcessGovernmeht issues securities through the following modes:

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Issue .of securities through auction. 'Issue of securities with pre-announced coupon ratesIssue of securities through tap saleIssue of securities in converston of maturing treasurysecurities'RBrs-6pen'-markefopeicifioris~'

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bills / dated('

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SECONDARY MARKET"

Most of. the secondary market trades in government' securities arenegotiated between participants (Banks, FIs, POs,MFs) having SGL accountswith RBI. These. may be negotiated dlrectly between counter parties ornegotiated through brokers. NOS of RBI provides an electronic platform fornegotiating trades in government securities. Ifabrokeris involved, the tradeis' reported to the concerned exchange. Trades are also executed onelectronic platform of the WOM segment of NSE. WDM segment of NSEprovides trading and reporting fadlities for government securities .:

6. CORPORATef)E8TMA~KI!T

Corporate debt instruments are traded either' as bilateral agreementsbetween two ccunterpertlesor on a stock exchange through .brokers. In the.fatter category, these are traded onBSE and on theCMc:tnd WDM segmentsof NSE. The difference between trading of government securities andcorporate debt securities is that the tatter are traded on the electronic limitorder book. This is in view ofSEBI mandate which prohibits negotiated dealsin respect of corporate listed debt securities and prescribes that all suchtrades would be executed on the basis of price and order matchingmechanism of stock exchanges as in case of equities. The trades on BSE aresettled through the dearing house. The trades on CMsegment are settledthrough National Securities Clearing Corporation which provides novation forall trades. Trades on WDM segment of NSE are settled on a trade-by-tradebasis on the settlement day. -

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. 7. Trad,ingPlatforms in Debt-Markets _ -es- ~-.-.

In' addition to the .transactlons of Government· securities/otherdebentures on- the NDS, RDM/wof't'of NSE.end BSE,PQrties can-negotiateand complete sale/purchase transactions'. Outright wholesale purchases/sales are reported on NOS of RBI/WDM of NSE. Turnover of Debt Securitieson various plateforms are given below1 .

Turnover- of Debt Securities

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SecuritiesGovernment SecuritiesWDM segment of NSE

2001-021,57,38,927

92,76,041

_(Rs. Mn.)2002-03

- 1,95,57,3121,03,28,264

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64,62,8861,~7,289

5881,95,871

····".._·····'830

1,59,36,216

92,29,0483,60,388

6833,58l755

9491,99,71,700

8. Brief about Trading Platforms.A Negotiated Dealing System

NOS facifitates screen based negotiated deaUng for ~§econdary markettransactions in government securities and money mCirket instruments, online

, reporting of transactfons in the Instruments avaltable on the NOS anddissemination of trade information to" the market. Government Securities(including _T-bills), call money, notice / .term money, repos in e.igiblesecurities, etc. are avaUabJefor negotiated deaUngthrough NDS among themembers. .NOS members concluding deals outside NOS .system, ininstruments available on NOS, are required to report the deaf on NOS systemwithin 15 minutes of concluding the deal. NOS interfaces with Cell forsettlement of government securities transactions for both cutright andrepotrades done / reported by NOS members.

Art· trades. in government securities are reported. to RBI -SGl forsettlement. The trades are settled on gross basis through the DvP system,where funds .and- securities are transferred simultaneously. Centralgovernment securities and T-bUlsare ~Id as demateriaUzed entries in theSGl of RBI. The PDO, which oversees the settlement of transaetlons throughthe SGl, enables the transfer of securities from one participant to. another.Transfer offunds is effected by crediting/debitiogthe.currentacrountof theseHer/. buyer, maintained with the RBI. Securities are transferred through .credtts/debitsIn the SGl account.

Further details about NOS are given in Annexure-'2'.

B -, Wholesal~ Debt Market (WDM) of.NSE

. The wholesale debt market' segment of NSE has been prDviding a-platm:rm~f.or·.ffadtngfreporting 'Of a wjdera~. of·debt;. securittes. mitiaHy,_..gov~nment securities, T-'biHsand bonds issued by f>sus were made ·availablejn this segment. This range. has been widened to. include non-traditional -instruments llke- floating rate bonds, zero coupon bones, index bonds, CPS,CDs, corporate debentures, state government Ioans, SLR and non=SlRbonds": .issued by financial institutions and units of mutual. funds. The WDM"tradingsystem, kn-own as NEAT (National Exchange for Ausornated Trading), is afuNy automated screen based trading system, which enables members acrossthe country to trade simultaneously with enor-mous ease-and efficiency. Thetrad-ing system has both negotiated t-rading system and an order drivensystem, which matches best buy andsefl orders on a pri-ce I time priority.

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Trading system provides two market sub-types: continuous marketand negotiated market. In continuous market, the buyer and seller do notknow each other and they put their best buy/self orders, which are stored inorder book with price / time priority. If orders match, it results into a trade.The trades inWDM segm~nt c:tr~L_$~Jtirectly~_betweeJlthepartiCipa.its, who takeiin exposure to tbe set.tl.@ntelltrisk;tttached toany unknown counter-party. In the NEAT-WDMsystem, all participantscan set up their counter-party exposure limits against all probable counter-parties. This enables the trading member/perticipant to reduce/minimise the "counter-party risk assodatedWith the counter-party to trade. A trace does-' ""not take place if both the buy/se,Hpartlclpents do' not invoke the counter-party exposure limit in the tradi~g system.

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. ...•In the negotiated'ma.rket, the trades are normally decided by

the seller and the buy~f oqtside the exchange, and reported to theExchange through the: broker. Thus, deals negotiated or structuredoutside the exchange are disclosed to" the' market through NEAT-WDMsystem. In negotiated market, as buyers and sellers know each other andhave agreed to trade, no counter-party exposure nmit needs to be invoked.

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The trades on the WDM segment could be either outright trades orrepo transactions with settlement cycle ofT +2 or T+0 and repo periods (1 to14) days). For every trade, it is necessary to specify the number ofsettlement days and the trade type (repoor non-repo), and iothe-event of arepo trade, the repo term. - .

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The Exchangefadlitates trading members to report off-market deals insecurities in cases where the repo period is more than the permissible daysin the trading system (14 days) or where the securities cannot be listed on -,(

, the Exchange as they do not meet the listing requirements. These ttadesare, - reqoiredto be reported to the Exchange within24 hours of the .issuance of

contract note.

All government securities are 'deemed' listed as and when they areissued. The other debtsecuritles are traded either under the 'permitted totrade' or 'listed' category. All eligible "securities, whether publicly issued,Ofprivately placed, can be made avallabte for tradIng in the' WDM segment ..Amcnqst ,other requirements, privately pla~d debt paper of banks,institutions and corporetes requires an .investment.grade..credit.cating.,totbeefigible for listing. _

CHARGES

NSE has speclfled the maximum rates ofbrokeraqe that can be levied bytrading' members for trades, on WDM. The rate 'depends on the type ofsecurity and value of transactions. The rate for central governmentsecuritles ranges from 5 paise to 50 paise for every Rs. 100 of transactions.'Similariy, it ranges from 10 .palse to 50 paise for state government securities.!tis 1% of the order value for' debentures, securities, debt and commercialpaper.

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A trading member ;s required to pay transaction charges @ Rs. 0.25 per~akh of turnover subject to maximum of Rs. 1 lakh per year.

In the WOMsegment most of the players uses NOS tor settlementpur,poses. Banksaoo primary "deater'sact<runtecf fOt·more [nan 71070 of thedeats in 2002-03 and they are bound to use NOS as per market particlpant-wise distribution of turnover is given below: -. .

Participant ~ise Distribution of Turnover (in 0/0),

Participants :Indian Banks .ForeigR &mksPrimary DealersTrading MembersFI, MFs & CorporatesTotal

2001~0236.6013.2222.5023.524.16

100.•00

2002-03.36.77·10.62.2.~.03:·.24.81·3.77

·100.00

C. Retail Debt Market (RDM) of NSE/BSE

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The features of the ROM are as under:

Trades can ~ executed, based on quot-es put up by buyingfseflingpartlclpants when the pricesfquantities match •. In case only pric-esmatch,part-sale/purchase would be booked.There is .no 'Couhterparty risk, as NSE would be the counterparty fortheretaiJ eeals. .Trades would be on T+2 basis oriIy.. In case of delivery .defautt thetrade would be treated as null & void and refund would be made withinterest as per NSE norms.

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lFurther detctiJsare enclosed as Annexure '3'.

9. DELIBERATIONS ON DEBT MARK~TSBY THECOMMITTEE

• In the 75th meeting;·of Finance .& rnv~nt Committee held onQp.022004.Ur.Aja¥5hah"ConsuJtant, Ministry of Ffnance-made adetanedpresentatton on the problems being faced by EPf'O·and itsregulated entities hj the debt market ak>r.l9 with the steps required to

".. be taken by EPFOand other Provident fUnd.s regatdill9 tradlng in ..GO\lernment Securitles/Bonds. It was decided to take thispr-esentation asan addition~ It..em.After deltberatlons ·Committeedecided as under: - .

•:. Screen based tr<lf/ing of Central Government Securities atNational Stock Exchange be allowed in principle .

•:. Detailed Agenda item showing pros and cons or the screen-based trading in Central Government Securities as also trading

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of Central Government' Securities .through NDS of RBI bebrought before the Central Board of Trustees, Employees'Provident Fund along with the views of portfolio manager, StateBank of India. .

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.tt may be recalled. that in the presentation of Dr. Ajay.Shah followingregulatory requirements were proposed with reference to Screen BasedTrading: - .

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a) All pur~ase I sale orders regarding investments of EPFOor ofEPFO ,Jegulated entities should be mandatorily be matched' onthe exc,hange.This wilt innately involve using NS{)L· as t/le depositoryThe regulations should also require the use of custodten banks,so broker credit risk is eliminated.,:- . ~ .

b)c),

• While deliberating on the action taken statement on above the Finance& Investment Committee in its 7Jih meeting held on 19.4.2004'decided as under:

.:. The :Committee agreed in principle that screen based trading 'OfgOVernment securities I booas at .NSEIs. the.need of the (lour.Matter should be followed up withNSE and sat to as certain -costs and benefits from the proposed screen based tradingsystem at NSE. It was expiaineq that SBI is already usingNegOtiatetf .Dealing System (NDS)deve/oped' by RBI tor r.purchase of Government securities which gives better facilitiesabout trading setttementsviz. T+O as compared toT +2 systemin vogue at NSE. However SBI may also ascertain as to whetherother institutions such as Banks, UC and UTI are using ScreenBased Trading System of NSE for investment of their funds in

-government securities. .·:·Committee decided that detailed proposal indicating pr-os'and ..

cons of screen based trading of government securities on NSEbe put up for constderetion during a special meeting to be.cOnVftqgqaf1fu ..J.S:!'_.Ma¥,..:;201l4. CXper::ts ..tr:omJ:4JI:Ustry Of Financemay etso. be,requestedto attend the meeting. State Bank of1ndia be advised to take necessary steps for using the system oflYSEre.o.ardingscreen based trading of-Govt. Securities w.e.f. t"June, "2004, if so decided by the Committee after consideringdetailed agenda items in its next. meeting.

10. Matter was followed up with NSE and S6! to ascertain costs andbenefits from the proposed screen based trading system at NSE.ResponseofNSE dated 11.5.2004 and of 56! dated 13.2.2004,30.4.2004 & 21.5.2004are enclosed asAnnexure '4'.

Regarding usage of Screen Based Trading System of NSE' by otherinstitutions such as Banks, UC & UTI, it has been informed that none of the

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major market partk:ipantsare trading -00 the Retail Debt segment. This canalso be inferred form the' negligible volumes ill .tumover in this segment.

11. Screen 13ctsedT-rading (Automated Anonymous order driven Systemlike RDM~.may-fadUtate .the-.,faUowing' providectthe reyutator VfzR81&SEBIand Government mak-e it mandatory: - " '

• 1000/0 transparencytn trading• Lowest prices acros$ t~,~ ~rega(~!essd.cwbel::e theooyer is--Tocat€d as the~system will innatejy check it.' i

• Post-trade processes wiU be' flawless, completely predictable, andcompletely system ...;'ariven .

• No credit risk of the broker provided Cell / NSCCL gives .guaranteesas in-easeof NOS. e: .

• Probability of full transperencvof trades,-cneCk on 'cartels and noconcept of trading at off market prices

• Technology reaching locations all over India and may facilitate smallexempted trusts.

12. . While there would 'be transparency in, puttiag up quotes on ROMplatform I there would be total information block on the originalcounterparties to any trade. There would be no deal confirmations availablefrom the Original counterparty, as NSE would furnish' the same. Theimplications Qf this woulct b(ftflatNSE would·be the counter party and SS!would not be ina pOSition to ensure against dealtng wij:h SBI'as provided inthe investment guidelines of CST, EPf.

At present RDM is not .popular at all iflthe market due to itsmis-matches with the (oRowing requirement.ofthe market: -

• Depth of Retail Debt 'Marl<e,t is not there. as people {individualInvestorsj.ere not aware about intricaciesoftb:e market such as yieldcurve/shifting of yiefd curve due to upward and downward moment oflnterest tate in the economy etc. .Practiadly, 'most "Of the .pea~ arenot able to' quote purchase I sale price of securities which they' intendto buy / sell.

• Suffldentcounter parties are not placing ordersfor purchase I sale ofsecurities on the ROM so practlcaUy the Automated Driven System of -NSf; (Nf;AT) is. .inopeHltlve.Number eft~ in the month ofFebruary; March&. April.2OO4 were "9, 8 & 4 respectiv.ely with' total-traded. value of Rs. 73.17 lakhs. Accon:tingty av~age value pertransaction was Rs. 3.48 lakhs amy durt1)9the af-oresaid th-ree months.

• RDM dearing membef"sconstituted as iflQivid.yafsand partnership firmsare required to keep deposit of just Rs, 5 takhs.

• Maximumriate.af brok-erage-on ROM as prescribed by NSE is 2.S%ancIminimum rate has not been specified ny NSE.

• ROM provides for settlement on T+2 basis as compared to facHity ofsettiement at T+0 basis on WDM and NOS. It causes unnecessarilytoss of interest.

• Since as per extant guideHnes .of Central Board . of Trustees,Employees' Provident Fund no brokerage is payable for dealing on

37

---RDM, membership of NSEwouid be must costing Rs.·1.05 crores (onetime plus annual charges of Rs. 3 lakhs).

• Delivery versus payment system of settlement is not available onRDM.

13. UNAVOIDABLE USAGEO':-WDM jNDS PLATFORMS"

Out of total trading volume of Rs. 19,97,110 crores in debt marketsduring.the ¥8ar- :;W020-3·omy-uades worthRs. :ffi3~2crores took ptacer{;;RDM and BSE put together and the rest 99.99% dealings worth Rs.19,96,946.8crores were made on WDM and NOS•. It seems that due toobvious reasons stated abo{,e market players are bound to do trading onWDM / NDS platforms even though theseare npti.}nDnyrrious driven systems.

Central- Board of Trustees, Employees' Provident Fund also uses WDMplatform of NSE and NOS of RBI which areavenable to it free of cost. - Forpurchases from RBI directly (Primary market) Central Board of Trustees,Employees' Provident Fund is bound to -use NDS platform. For purchasesfrom secondary market on behalf of CBT, EPFservice of brokers empanelledwith SBlare taken by tts Portfolio Management Serv.ices Division withoutmaking any payment of brokerage and all such deals are informed to public_through NSE website by -;tsbrokers. During the year 2003-04, dealsamounting Rs. 5314.08- crores.werereported on W,QK,.P+imary-jssyes and ( -direct -deels .dUring. thevear ·2003-04 amouAted:~ •.·.2008croresend Rs,2455.45 crores reS~veJY. 'To avoid operatlooaf risk "ali the cfeals weresettled through delivery versus payment systeni ofR6I on NOSplatform.

In view of above, itnuiy be re-consideeecl--~sto -whether it isl!.;-practically possible to .switch over from the existing WOMand NDSplatforms to RDMor portfolio",anagersma¥b£!;.a4visecl to watch andwait till other market pa.rticipants· viz. Banks, Financial Institutions,Insurance· Companies and primary deaiersetc.;startusing RDM(Anony~ous Order O,.iven Screen ·Based Trading System) to avoidmanipulations by the other market players againSt,~BT,EPF.

The matter is placed before Finance &: In~estment Committeefor consideration. .

38

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Annexure -1

Policy Development in Debt Market

Union Budget 2001-2002-- --

(' • A dearing Corporation would be set up unGer{he active encouragement.of RBI, with State 'Sank of India as the chief promot-er.

• Trading 'o( goverilment"'"secliriti~ th~gh 'order- driven screen-basedsystem wH/be implemented.

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• An Electronic Negot~ated Deming System wiU be set up by the RBI tofa·cmtate transparent etectronic bidding in auctions and dealings ingovernment securities on.a real time basis.

• In order to ensure smooth and quick movement of funds, the ElectronicFund Transfer and RealTime Gross Settlement systems are being put inplace by the RBI within the next year.

Union Budget 2002-2003

• A new Government Securities Bill would -be introducec" -within the .budget session toi"eplace the oldPubJicDebt Act; 1949:

( • To helpihvestorspfan their - investments better and to addtransparency and stability in themarket,RBf wou4dannounce auctionsaFldissuaneecalendarfor dated govemmentsecurities. .(

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• Administered interest rates would be benchmarked t-o the ayerageyieJds annually on a non-discretionary automatic basiS. These wouldbe benchmarked to the average annual yields of government securitiesof equivalent maturities in secondary market. Accordingly, mostinterest rates would _be reduced by "SO basis points from March 1,2002.

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Union Budg~t 2003-04

• l3UY- back .of high'COlJPOAbearmg..ce~Ge\lefnmentSeettrities was-pro.pese~ in the budqet, - -- . .

• States were ·also asked to swap aHfoaf1swith interesf raees more than13 percent .by 2004-'()S.States debt swap to -cut tnterest oests by8HLbillions:

I• It was proposed that the saving rate intErest on pubUcprovident fund

and small saving schemes be cut by lOObasis points.

Securities Ordinance, 2002

The Securitiesation and Reconstruction of Finandal Assets andEnforcement of Security Interest Ordinance, 2002 was promulgated on June21, 2002. It empowers banks and finandal insUtutions to enforce theirsecurities without intervention of court or tribunal. The ordinance at$Q.provtdes. a 1e§alfFameworJ< for SE!curitfsati6ri'of··financrafassets and assetreconstruction. In the event of default by a borrower, a secured creditorshall have recourse to .

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(a)

(b)

(c)

take possesskm, setl.ortease tRe-SOOUr~a5Sets,

take over the management

take possession of the secured asset and appoint a manager tomanage the same, or

(d) recover any money payable by third parties to the borrower.(

(e) In case of joint financing under consortium or multiple lendingarrangement, if 75% of the secured creditors in value agree to initiaterecovery action the same shalf be binding on all secured creditors.

. .

(f) The securities companies or reconstrUction companies shall beregulated by RBI. The security receipts issued by these companies will .be securities wlthin. the . meanlng.of the .Securities ' Contract ('(Regulation) Act,19S6. These companies would. have powers toacquire assets.by issuing a debenture or bond or any'~er security in

.the nature of deberiturein lieu" thereof., Once an asset has beenacquired by the asset reconstruction company; such company wouldhave the same powers for enforcement of securities as the Original ,.C)lender.

NOTE: To check defaults relating to investments ofCBT, EPFas well asexemptedestablislrmertts, CBT,EPF recommended for extension ofus"qges.of recovery powers under the EPF & MP,· Act, 1952 forrecovery of defaulted amounts related to investments also. EPF &MP Act, 1952 is yet to be amended for this purpose.

Monetary and Credit' Policy, 2002-03

• Th€L~baflks woukt'promote sct'ternes for sale I purchase of government-securitles "over their counters "to retail investors through' demat accountswith~depositories or with 'CSGL account holders. POs and banks may alsoprovide both-sale .and purchase facility to ensure that theretall investors -are assured of IiqlJidity of sueh investments.

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. .A mid term review of the policy introduced the following measures:

• The bank rate was cut by 0.25% to '6.25% effective from the close ofbusiness of October 29, 2002. The CRR was reduced to 4.75% effectivefrom the fortnight beginning November 16, 2002.

40

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• The reoo rate under the Uquidity Adjustment Facifity{LAF) of RBI wasaiso reduced by 0.25%.

• In order to enlarge the number of partidpants and to provide countrywideaccess to ..9oyern~securltiesr·introdudioR-of~screen· basedorder driven trading system in ~emment securities.on the stockexchanges was proposed. It was also proposed to extendrepo e1igibHityt<>select category 'ofnon-SGl account holders with adequate safeguardsto ensure OvP and transparen~:... __ ~ ...,~~.~.,. " ~ .

• In order to promote £oHateraUsed Borrowing and Lending Obligation(CBlO), itw.as said that it would be 'considered as a rrl'oney marketinstrument with original maturity between 1 day and 1 year, with norestrlctlons on the minimum denomination as wel as /ock..ln pertcd jorItssecondary market transactions.

• Price and trade information on gOvernment securities and relat-eddatareporteGonNDS would be available on the. RBI website on real timebasis.

Monetary and Credit Policy, 2003-04

• As a st-ep further;nmoving towards the medium 'term objecti,,:,! ofreducing eRR of banks, It was proposed that the same would be reducedfrom 4.75% to 4.50% w.e.f. fortnight starting June1,4~ '2003. The bankrate was cut by 0.250/0 to 6.00% effective from the dose of business ofApril 29, 2003.,

R:BI also proposed that from too fortnight beginning May 3,2003, itwould bemendamzytor atl NDSmembers' to report all thetr call/noticemoney market deals on NOS. Deals ,done. outside NO.5-shatralsobe reportedwithin 15 minutes on NOS, irrespective of the size of the-deal or whether thecounterparty is a member of the NOSor not.

41

ANNEXURE- '2'

Salient features of Clearing and Settlement using Negotiated DealingSystem (NDS).of RBI .. ,

'~-~~NDS-syst~if1 ~,~~~igb~dto.:·.,..--

• provide transparency on prices and volumes traded on real time basisto the market in the government securities; . . '_"

• ,*"ovtde screen-based tradirrgin goverhl11ent paperwhic::h wH/ facilitate" Y

larger participation in the government auction system: .'• facilitate on-line trade information dissemination to tf:k market;• put a centralised Subsidiary General Ledger and database system in

place;• . provide inter-regional PD~ connectivity;• provide connectivity to participants;• facilitate speedier reporting mechanism .• facilitate information access. to supervisory and regulatory authorities

and• provide a scalable architecture.

The objective is to help create a broad-based and transparent market ingovernment securities, thereby enhanCing liquidity in the system.. . .Instruments

. The first phase would cover the Call money, notice/term money,government securities including Treasury Bills, Repos, Certificates ofDeposit, . and Commercial Paper markets, while derivative products(Interest Rate Swaps and Forward RateAgreements markets) would becovered in the second phase. Thesystem will also be used for daily Liquidity

. Adjl:lstment Facility (LAF) auctions •

,1. ,

.Participants

The parttclpents in the PDO-NDSsystem will be:

• _Banks,- • Primary Dealers-= • Financial Institutions

• Insurence-Companles• Deposltorles and elearing Corporations-. Mutual Funds

Eligibility

Membership of Indian Financial Network (INFINET), a Closed UserGroup (CUG) network, that will provide secured communication to NOSmembers, is the eligibility criteria for becoming members of Nos-poo

42

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n system. Membership of INFINET requires Subsidiary General Ledger accountand lor Current Account with RBI or as may be prescribed from time to time.

Scope

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• Secondary Market Operations {NOS),• ' Primary Market Operations,• -8a5te,Data-Matnteoonce,• SGL Settlement, ahd• PDQ Operations 'cnJdCorporate Events (indudingReHef Bonds)

The NDS Would be linked to tbe other modules in the ne)ttpHase: It wilthave an interface between the members (SGL eceounthotders) andt~ POnsfor' faciHtatingsettfement of deals done in Government securttles :ahdTreasury Bills. The member terminals would facilitate primary and secondarymarket operations. Pooled Terminal Facility provided at all reqlonaloffkes of 'PDOs would facilitate input of trade details by RBI functionaries, whenevermember terminals are' not up due to any reason. The entire system will beworking in a networked environment and INFINET will provide the backbonefor -cornrnunlcatlon. It ,will provide for reporting of trades executed through,exchanges for information dissemination and settlement, in addition to de~done through the NOS.

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The project is 'being developed in a phased manner. Initially, NOS willprovide for subrrtission of bids, generation and submission of SGltransferform for settlement through Clearing Corporation of India Umited(CeIL).Thereafter, the system will graduate to providing r-eitl time DvP settlementand other primary market operations. In the final phase the remaining areaslike Bond ledger Accounts, securities lending etc. wiHbe covered.

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TheCCIL, established in April 2001, wiH act as thecentraJcounterparty for trades and undertake multilateraf netting, facilitate· DvP',and opera t.e the Settlement Gua•.antee Fund (SGF). Ttie Cell will play therole of a Central Counter Party (CCP)to all transactions and wiU guaranteesettlement of trade through 'Novation', -o:thereby minimfsing counter party -

_I risk. The -etimlnation of thecounterparty risk wiJI gr~atly-enhancescale-efficiency and reduce the- post-trade. processing coses for market participant-s.

Functional Scope of It/OS

The furyctional scope of the NOS System indudes

• giving/receiving a Quote,• ptacing a call and negotiation (with or without a reference to the

quote),• ente'rtng the deals successful1y negotiated.• setting up preferred councerpartv list and exposure Hmits to the

counterparties43

'~."'-'" ..

• dissemination of on-line market information such as the last tradedprices of securities, volume of transactions, yield curve andinformation on live quotes.

• interface with Securities Settlement Syste'1l for facilitating settfementQf .deaf~done in govemmentsecurittescmdtreasl.fry bms:

• fa.cHity .,forraportiAg on trades executed through the exchanges forinformation dissemination and settlement in addition to deals donethrough NOS. . -

- -- --.-"'- ~,....•~-As 'statecf earlier, CCll will extend the guaranteed settlement through

Novation for governmi:mt securities -transactions, both outright and repo- executed/reported thrQugh NDS. It wrrt provide confirmation about trade"':.wise guarantee 'extended to members, settlement obligation of membersrelating to Se€uFitiesand fundsp'osftion, better risk management practices .;:daily marking- to market of coltateral, management of guaranty fundetc.rlttsalso belnq envisaged that outright transactions in government securities -upto Rs. 20 crore (face value) and a" market repo transactions -would settlethrough CCll. For transactions 'above the face value of Rs.20 crore, themembers will have the option to either settle through _CCIl or directlythrough RBI-SGl. CCIl will extend settlement facility under DVP IImechanism (i.e. securities on gross basis and funds on net basis) in thebooks of RBI.

When NOS is integrated with other-modules, it would bring in efficiency in, trading, settlement; interest payments and other improvements in servicesto investors in Government securities as the automated system will haveminimum response time. The shut period for trading wilt also be reduced.

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ANNEXURE - '3'

('Salient features of, Clearil19. !Ul~ Settlementia-RetaiIDebtM~*etseg'ine-nt -------- --,~, -.' . " -- - ----

•. Clearing and settlement ot' all trades in the Retail Debt Market shall besuqj~tQ. the6ye Laws, RuJes,ooEiReguJattooS"ofttre 'Capftat MarketSegmen~ and such regulations, circulars and requirements etc. as may

.;~be brought into force from tlme to time in respect of clearing andsettlement of trading in Retail Debt Market (Government securities).

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• Settlement in Retail Debt Market is on T + 2 Rolling basis viz. on the2nd working day, For arriving at the settlement day all interveningholidays, which include bank holidays, NSE holidays, Saturdays andSundays are excluded. Typically trades taking place on Monday are

'. settled on Wednesday, Tuesday's trades settled on Thursday and soon.

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• ct~aring and settlement woufdbe based on netting of the trades in aday. ~

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• NSCCL shall compute memberobtigations and make- availablereports/data by T+1. The obligations shall be computed separately forthis market from the obligations of the equity market.

• The settlement schedule for the Retail Debt -Market (GovernmentSecurities)

1 T

2 T+ 1 (11 :00 a.m.)

3 T+2 (10.30 a.m.)

T+2

Trade Date

Custodial Confirmation

Securities & Funds pay-in

Securities & Funds pay-out.' ._.'., .._---_.--_._-,,---,'. '.""'.~".,--.-----

• Funds-· settlementand securities settlement shall be through theexisting clearing banks and depOSitories of NSCCL, in a manner similarto the: Capital Market segment. The existing' clearing bank accountsshall be used for funds settlement... -

• The existing CM pool account with the depositories that is currentlyoperated for the eM segment, will be utilized for the purpose ofsettlements of securities.

45

-

• In case of short deliveries, unsettled positions shal1 be dosed out. The-ciose out would be done at Zero Coupon Yield Curve (ZCY£) valuationfor prices plus a 5% penalty factor. The buyer shalt be e1igibJe f~r thetrlgbest traded pnGeffGm-the~trade1fate-to-ttre·-dateuf~-ctose'out Orclosing price of the security on the close out date ptus interestcakulated at the rate of overnight FIMMDA-NSE MlBOR for the doseout date wh k:hever is higher and the balance shaH be credited to ~

. -investor Pr'6tectT(')rfFiJria~'--" ~_'hh" ~ .•

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. ..Memb~s mev pleese note that the penal actions and penalty points

shall be similar to as in Capital Markets ..:

NSCCL carries out the clearing and settlement of the trades executed in theequities and derivatives segments of the NSE. -It 'operates a well-definedsettlement cycle and there are no deviations or deferments from this cycle. Itaggregates trades over a trading period, netsthe positions to determine theliabilities of members and ensures movement of funds and securities to meetrespective liabilities.

NSCGL has empaneUed 8 dearing banks to provide banking serWces totrading members and has established connectivity with bot.h the depositories

. for electronic settlement of securities.

It also undertakes settlement of transactions on other stock exchanges Uke, .~.the -Over the Counter Exchange of India.

Trading in the Retail Debt Market takes place in the same manner in whichthe trading takes place in the equities (Capital Market) segment. TheRETDEBT Marketfa£iJity onthe NEAT system of Capital Market Segment isused for entering transactions in RDM session.

Members eligible for trading in ROMsegme~t

Tradlnq Members who. are registered members efNSEin the Capital Marketsegment and Wholesale Debt Market segment '!be aHowed to trade in RetaiiDebt Market (ROM) subject to fumlling the capital adequacy norms.

Tradillg Members with membership in Whor.esafe Debt Market segment only,can participate in ROM on submission of a letter in the prescribed format asper Circular No. NSElCMTR/3860 dated January 11, 2003.

46

- ~----Market Timings and Market HolidaysTrading in ROM segment takes place on af·,days of the week, .exceptSaturdays and Sundays and holidays declared by the Exchange in advance(The hoUdays ~11 tJleROM segmentshaU be the same astfitose un t"e-~"equities seg,ment).

The market timings of the ROMsegment are the same as the Equitiessegment, viz.:

Normal Market Open: 09:55 hoursNormal Market Close: 15:30 hours

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Note: The Exchange may however close the:market on daysother than theabove schedule hofidays or may open the market on daysor.j.ginaHy declaredas hofidays. The Exchange may also extend, advance orreduce tradtnqhourswhen its deems fit and necessary,Trading Parameters #

The trading parameters for ROM segment are as below:

(.Operatlnq Range +/- 5%iMkt. Type Indicator (RETOEBT)

'Book Type . /RD

Trading System

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Trading in ROM takes pJace on the 'National Exchange for Automated Trading' -(NEAT) system,a fully automated screen based trading system, which adoptsthe prinCiple of an order driven market. The RETDEBT Market facility on theNEAT system of Capital Market Segment fsuSedfor-enter:ing transattiofls in

_.RGM-sesston.

Trading Cycle

Trading in Retail Oebt.Narkefis permitted under Rolling Settlement, wherein each trading day is considered as a trading period arid trades executedduring the day are-settled based on the net obligations for the day.

SetNement is on- a T+2 basis i.e. on the 2nd working day': For arriving et thesettlement day aU intervening holidays, wbich include bank holidays, NSEhoHdays, Saturdays and SUndays are exduded. TypicaHy trades taking placeon Monday are settled on Wednesday, Tuesday's trades -settled on Thursday

47

and soon.

Risk Management (Retail Debt Market)

Bass Capftai-'&-ffetworth Requirements

• Clearing members of Capital Market and Trading members of the WOMsegment of the Exchaflge wiil~e anowed to particte~.~~l[l.c;leaLingandsettlement rif-fractes done;n Governm~nt securities, subject to aminimum net worth of Rs.l crore.

• An initial contribution to the Settlement .Guarantee Fund (SGF) of thismarket by way of interest free security deposit (IFSO) of Rs.S lakhs isrequired to be kept with NSCCL.A member desirous of participating inthis segment may opt to set aside a contribution of Rs.5 lakhs from hisadditional base capital 'avaifable on the Capital Market segment and /or Futures & Options,segment (s) towards this IFSD.

Margins & Gross Exposure Limits

• Mark to market margins will be applicabieon all-epen positions in.government securities and shalf be-catculated on the. basis of Zo{C .prices. This margin shalf be payable on T + 1day. .

• Institutions that are permitted under the relevant regulations totransact only on the basis of giving and taking delivery will operatethrough the custodial mechanism and shall be exempt from marpln asin the case of the equities. Custodial trades on behalf of ProvidentFU!1dstransacting through SGl - II accounts shall also be eligible formargin exemption.

,, '

• The gross exposure in respect of these securities shall not exceed 20times of the IFSD.Any member desirous of a higher exposure will berequired to b~;'!~Lin additional base ~pitql as in capitaL Market ..segment.

Ri~k Management (Ret~iI Debt Market) ~

Base .Capit~1& Networth Requirements. .,

• Clearing members of Capital Market and Trading members of the WOMsegment of fhe Exchal1gewill be allowed to partiCipate in clearing andsettlement of trades done in Government securities, subject to aminimum networth of Rs.l crore.

48

• Aninitiaf contribution to the Settlement -Guarant..eeFund (SGF} of thismarket by way of interest free security deposit {IFSD) of Rs.5 lakhs isrequired to be kept with NSCCL. A member desirous of parttdpating inthis segment m"y~1?t~o~tg~kte a contributionDfRs S4ekhs from h~s.aa(fjt'on~~base capitalav.a#abJe on tnetapitcn Market segment ana Ior Futures & Options segment {s) towards this IFSD.

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Ma-fglns &. Gross Exposure Limits

• Marl< to market margins wiU·be applicable on all-open positions ingovernment securities and shaH be calculated on the basis of LC¥Cprices. This margin shall be payable on T +1day.

• Institutions that are. permitted under t~~ relevant regulations totransact-only on the basis of giving and taking defivery will operatethr.ough the custodtelmeehanlsm and shall beexemptfrom margin as~n the case of the equities. CUstodial trades on'behaff of Prov~entFunds transacting through SGl - II accounts shall also beeltgtbfeformargin exemption.

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~• The gross exposure in respect of these securities shall not exceed 20

times of the IFSD. Any member desirous of a higher exposure wUI berequired to bring in additional base capital. as in Capital Marketsegment.

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NATIONAL STOCK EXCHANGE OF INOlA LIMITEDRegd. Offi~: "EXCHANGE PlAZA", SANDRA· KURLA COMPLEX, SANDRA (E), MUMBAI.400 051. INDIA

May II, 2004r>I

Ref: NSFJ2326- V

Mr. K. L. TanejaRegional P .F. Commissioner (Investment)Employees Provident F'll!1d·()rKam~~iQ!1Ministry of Labour, Government ofIndiaBhavishya Nidhi Bhawan14, Bhikaji Cama Place;~New Delhi- 110066

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Dear Sir,

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(. Sub: Screen Based Trading-National Stock Exchange (NSE) .

This has reference to our earlier letter dated May OJ,. 2004 in response to your letter ref no.Invest.1I1(18)/96IPatternlVoI. VH/9502601l the captioned subject. The details as required by youare enclosed for your kind perusal. Further mformation, if required, .you may please contact us.

With regards (,

Thanking you,Yours faithfully

R. SundararamanVice President

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COI'ttinuafion Sheet

ANNEXURE

.. (:;o~tsj"".)(41f\,edto~g.me ~ber &.the pnKas4beHOt::~

TIre Fund managers of EPFO need not have to become members to take partin the screen based

trading system. The orders can be routed through registered trading members in the wholesale

(1 de6tmai-k~ segment or the ~I debt market segment Presently there are 75 members in the

WDM segment and 134.memt>ers in the RDM Segment.(':

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Cost of brokerage on transactions through NSE:- ,NSE has not stipulated any minimum brokerage that may be charged by the members to the

clients. Trading members charge brokerage based on their relationship with their clients.

However, NSE·has specified the maximum rates of brokerage chargeable by trading members in

relation to trades done in securities available on the Exchange. In the RDM segment the

maximum brokerage cannot exceed 2.5% of the contract value and in respect of WDM, the

maximum bro:k:erage.~~le is as given below:

( Order Value Brokerage (maximum)1. Govt. or India Securities and T-Bills

Upto Rs. ICrs 25 ps. per &S. 100More than I'Crs upto S{;rs l'Sps. per Rs. 100~oFe than SCrs upto IOCrslO psper Rs. 100

'-More thanlOCrs :5ps perRs. 100~~.._._..__State Govt. Securities, Institutional Bonds and Supra Institu!iona.!.B~_~~.~_.__._ _.

Upto Rs. 25 Iakhs .. 50 ps.per Rs. tOOMore than 251akhs upto 50 Iakhs 30 ps. per Rs. 100More than 50 lakhs upto 1Crs 25 ps per Rs. 100More than ICTS upto 5 Crs 15 ps per Rs. i00More than :SCrsup.oolOCrs . to psperRs. 100

..( More than to Crs 5ps per RS.l00

( )3. - .J?Sl1. Boads

Upto Rs. ICrs'More than ·1ers upto 5 CrsMore than 5 'Crs umo 10 ers-More than 10Crs -

50 ps. per Rs. 10025 ps. per Rs. 10015 ps per Rs. 100lOps per Rs-:-lOO

4. Commercial Paeers andDebentures 1% of the order valuei

. Honouring of prices quoted

In the transparent screen based market for G-Secscanied out on NSE, trades are

executed online based on peke I time priority of the orders in the book. The depth and the

demand I supply position is available to the market online. Clients are provided order

r:\

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and trade confirmation slips by trading members. A contract note issued by any trading r:member can be verified for accuracy I confirmed for deal completion. Clients can

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confirm trades on the.~.website. ·In-GaSe dients-·have"adisptlte, they can

approach Investor Grievances Celllapply for Arbitration.

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Settlement process - whether on T+Oor T+2 basis

WDM trading systemprovides for trading in debt and other instruments either as outright

purchase and sale as -Non-Repotrades 'or as Repo.. Currently, Exchange permits the

settlement term from i+o (i.e. same'day) to T+2 and Repo term from 1 to 14 days. Repo. : - .

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is allowed in all Govt. securities, PSU bonds and corporate debt, provided these are

dematerialized. Settlement is on a rolJing basis, i.e. there is no account period settlement.

Each order has a unique settlement date, specified upfront at the time of order entry and

used as a matching parameter. It is mandatory for trades to be settled on the predefined

settlement date. The Exchange currently allows settlement periods ranging from same

day (T+O)settlement to a maximumof'three worlciDg days (1'+2).

In ROM, ,the settlement is in the same manner as in the caseof equities on a T+2 basis i.e.

on the 2nd working day from the day of trade: For arriving at the settlement day,all

intervening holidays, which include bank:holidays, NSE holidays, Saturdays and Sundays. .

are excluded. Typically trades taking place on Monday are settled on Thursday,

Tuesday's trades settled on Friday and so on.

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Details. of order matching System of NSEaloJig .with im~rovements on preSent

broker driven system of price d~termination& elimination ofprice rigging (if any)

The secondary market activity- on the NSE happens throulih,.the NEAT (National--

Exchange for Automated Trading).system, which is-fully automated screen based trading. -.

system..The members are connected fro~ their respective-otIic~sat dispersed locations to. - -*--

the main. system at the NSE premises through a high-speed, efficient satellite tele-

communication network or through leased lines. The trading system is an order-driven,

automated order matching system, which does not reveal the identity of parties to an

order or a trade. This helps orders whether large or small to be' pla~ without the

members being disadvantaged by disclosure of their identity. The trading system operates

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on a price time priority. Orders are matched automatically by the computer keeping the

system transparent, objective and fair. Wherean order does notfin<ia match it remains in.- --.....-..-__ ....."-..._ -__ . ._.~ I

.-tbe~.aRd4s;~whole market, tillatteshorder whichmatches,oomes

inor the earlier order is cancelled or modified.

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The trading system provides tremendous flexibility to the users in terms of the type of

orders that can be placed on the system. Several time-related.tprioe-related or volume-

relatedconditions can easily be placed on an order. The tradingsystem also provides

complete on-linevmarket information through variousinq~ facilities. Detailed

information on the total order depth in a security, the.best buysandsellsavailable in the

market, the quantity traded in that security, the high, the IQwand last ,traded prices are

available through the various market screensat aUpoints of time.

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State Bankoflndla

! Shri"Ajai Singh. IRSCentral Provident Fund CommissionerEmplo)'ee~Providellt Fund'OrgantsationBhavishya Nidhi Bhawan14,:Bhikaiji CamaPlace

L New Delhi 110066~. a;qjq; / No.

PMSCS/TRI 2.:>- 0~/Date:

."Apri.pO, 2Q04

Dear Sir,

NSE Trading

We refer to the Finance & Investment Con;nnittee meeting hcldon April 19, 2004. which

was attended by Shri C.M. Pillai, DGM, whece the question of going on to the NSE

Trading Platform was discussed. Our earlier feedback on the subject bas been conveyed

to EPFO vide our letter No. PMSI2324 dated 13.2.2004· (copy enclosed foc ready

ref:renc~). Discussions ~ere held with· Sbri SonejiDirector: NSE on~ April, 2004 to

obtain a complete picture, and the following points have emerged:

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I. Screen based facilities for debt trading provided by NSE comprise of two segments -

retail debt market (RDM) and whole sale debt market (WDM). Trading facilities are

lc available only in RDM, as the latter is essentially an infonnation module, without any

rrf\r~ intervention from NSE for executing the· trade or verifying the authenticity 'of the

information put up by the participants.-:»- The features of the RDM would be:')\io It - .;: Trades can he ex~.based~quotesput up. bybu~f*Iflieipallts,

\ _ when the prices/quantities match. In case only "prices match, part sale!

purchase would be booked,~

There is no counterparty risk. as NSE would.be the counterparty

Trades would be on T+2 basis only. In case of delivery default the trade

would be treated as null & void and refund would be made with interest as per

NSEnorms.

While there would be transparency in putting up quotes, there would be total

information block on the original counterparties to any trade. There would be

no deal confirmations available from the original counterparty, as NSE would

furnish the same. The implications of this would be that

a" As primarily, NSE would be the counterparty, we would not be in a position to

ensure against dealing with SBI, who are active market participants and may be

the original sellers. However, this should not hinder trades, as the very purpose of

going on NSE is for transparency of prices.

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b. Likewise, there are RBI restrictions on counterparties which have been

ciscularized to the PF trusts. EPFO rules for eounserparties would have to be

amended suitably.

c. Auditors(l?otb -internal -~·BPFO·appoirtted) .would have. to accept··· NSEconfirmations while auditing the transactions.

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Trades would be confined to G-~ecs., Corporate bonds 'and mutual fund units.o. • • .f.. .

Treasury Bills & SI>L (i,e, State Govt, Security) are not traded for which the

existing system wo.uld need to be continued. ~ .

Primary SUbscriptions are noi handled

The fees would be Rs.l.50 crs. (one-time) plus annual charges of approx. Rs.

3 lacs.

The dealers at the bank will be required to pass NCFM examination conducted

by NSE.

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m. As far as completion C!.f formalities is concerned, NSB wpmd require at least Hlree

months to process our application for membership, Membership for trading rights would

be necessary, which would involve approval from SEB!.

IV. For SBI.to seek NSEmembershipwewould need pennission from Reserve Bank of- .

India, and internal Board approvals. We can proceed with this as soon as we hear fromyou. We may also examine dealing through brokers who already have NSE m~ip

..if this is acceptable to EPFO. However, this would entaii payment of brokerage.

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- . --~. W~ trust we have been able to provide Y()\l with jnfQnnaJjQDsutlic~·tOrthe~ ..--. - -. . -- --..- - -~f finalizing your views on the subject On receipt of your approval we propose to-

coinmence theprocess of obtention or various other approvals. We-would be happy to"- -.provide whatever further clarifications required.

.Yours faithfully,

Chief General Manager {Treasury)

Kzepfo.Iet/cmp

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I, .,' ' i!' ;:1 '. ~ .:'~~" ;- •.~~:-! i··",·b. Q.~ ";. ., .~..~!'.'-f~~ iJ~~" .l~,D - . ~f~;4· :r. ,,:',!~ • c- ~. ~~ .j.~:j!i·· ;

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XI. '.~ I:i ,u,1 ~ ..,~ , !"'-,il, !l., i'. . - i Ilfo)1f~,~.. hri R ...~ .' I~F"~ '~ ..n ar, .f" ,ii~l,l,r~l! ~': ,. .;;~i~Ej~.ErN BASED TRADING - NSE

}.l!~ Tt~I'" . '. .'"j ,.:~~W~reference to the above we furnish our tentative views in thematter.- A morej :.':....~.~~~iI~. ex~m.ination wo~1den~ fu~~ ~ may ~t.be~ to, .

-, 'f> t;{ !f~M,t? withmthe date of.'.fhe boan;f rneel!ng. -._ . .; !::~;g r" I, l'~-·.

:,1~~':; ti;e bondma~t ~ takes ~, on a d,aiIybasis and has three major,:';, 1.~"" components, VIZ., amvlng at a decision orrjnvestment (purchasesy

.'/ ., disinvestment (Sale), pdce·diseoveryand trade settlement Before we':;/ : '. ~.j!'( comment on these aspects; we would like to highlight the fact that thei : ..~..~~),handlcaps, that the' change to screen based system seeks to address, doi ,; • h .. r, not apply to EPFO investments. as sm are fully equipped with state of art·.;j . f , .:.;' i ~f:;" deaJi~g facUities. Remedial measures/processes that may be relevant to, :~~,·,t!·r:·.,~ma" entities,(e.g:, ~rative banks, proVident funds, RRBs etc)'.~lj~~.~located away from Mumbai may not contain any value addition' in respect-..::~;~~;~.ff:'pf EPFo. investments. Subject to 'this, our preliminary views on the

. ~ ~ .1). ~~I' ••- ~sed"s.ystem. a_~as ~RdeF! - ~

11 t·· I: •-I -f. " ~: iH~.:j:~.ll> ll)}, '.~ lnvestment-Declslon : "-.~r.'~ 1 1:.. .:.:< ::.:1:; .. '.' r: -. -' _ - --_,

:, :::! :"!;:":i;·~/ This is .the major area othandicap; as seleCtiODof typeofinvestmenj and,. . ';'. ::(f: ': tirhi~~ of the transaction ,are critical to the value of ~ i~ve~tment .

. decision. The proposed screen based system has application only In..the':I~ 'to,n"

.. ;,'. ';.J;', post decision taking stage. Thus this major area where the smaffer, .: ;':l ~~/ij':~,entities stand to lose out on, mainly due to lack of skills, would remain

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Price Discovery

The' extant system, in terms of which price discovery/finalisation issubstantially dependerit on broker inputs, contains considerable scope forirr~tinn::l"v oriced transactions. However, the screen based system could

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J.,l~-::Nso. the;price for any security is a function oHhe buyer'slseIIe(sowninternal compulsions. Farinsfance. in a scenario where the investorsinternal cash flow issues become critical, an investment' disinvestmentmay be made atprices~ma}Loot be.real)·arepresentatiYe.the~··~nylJte.I~Jt1aDOtpcac;ticalto eo¥i$ag&'&~wItefe .~ iB&board aI/ investors/players are uniformly placed in regard to such internalpressures. Also there area large number cjf illiquid scrips fonihich thepricing may not ~ disdosed at all and a decision to buy or sell sUCh

r. scrips,. ~ ~epend gn~DPPDlh~Djtje$ .-. :

:However. tiroadly speaking, a screen basejf system would certainly .;'~represent a greater degree ofbansparency in the price discovery process.in respect of entities Which·have hitherto been functioning entirely onlimited inputs from a few brokersfmtermediarieslfnciat oonsulfants. Iti,satso a moot point as to whe1her brokers can be erminated from theprocess even uFJdersseceen based system.: asttJeypiay a matketingrole.'n~stabfishing business ties between prospective buyers/sellers.k . " -

'iiii) SEJ"TLeMENTPROCESS

. JijthOUgh NSE reportedlY have a'T+Osetuement preeess.Le., .~imultaneous J)aymentand delivelyof securiUes,' it is our understanding

, that as 'Of now,settJements are on T+2 ~.This.does not comparef~vourablywith.theextant NDSsettlementprocess where T+Ose.tUernc;mttakes pface~However,.entitieS not.~.~.!o ...~~tf.l9m~

C"""'''If''H!'''·~. fc>twantot~~~),them,m,y:not'l"·<"~iJ:'lI\iI~IP tie:any compamive disadVanfage:· -'. c· . .. •. .1"r . .. .. .. .

'f-n:thisoonnection. a complete assessment cannot be made withoutevaluating thecos.tsI~ i,lvolvedinseUing uPascmenbasedsystem. TheprOpcJsedJ)~hefeciaries \NOUId~.~inJy $ffl8~~,.~ittlrelatively so¥t8turnovers, and the savings effected bycbetterpriclng ..mayor m.ayhOt be .~ by the costs in putting.iIl pooe the proposed~~tem. W~ donothaVe~Yconcrete data onttle likely costs, and hence~ .unable.to tnakea relative COmparison.!' .

~h ConclusiOO, we would Ilketo re.JteratetbatthesBr Treasury functions.~re of a degree of efficiency that address all the Uveebasic~spects(Investment decision, pripe discovery, and-settlements) in4hemostetticientandcosteffective manner.possible at,pmsent We can COAsid~aFeen ba8ed process for EPFO only ifa~reridea.fs oonveyedioffm'J1sof all the costs, that are likely to devolve.~L _

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cf.JVI..a.n Y..qeneral Manager~ CS)_

'4HdtQ ~ 4<6State Bank of India

~~.~q;.,""~jI!i'. n,t:t-~~21. -T•••• "'" ~ Corporate Centre.Poet~ No.u.~ai0400 021. .~iFax ; 2204$4U I nUl '71~ i 22ihl1i'220

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Dear.Sir, .

TRJPMs/ ~·i / • 21-05-04ftri"s f o.."U:

We write witt) further re-ierE'nceto our. tetter 00. PMSCSIfRlZiodated JCi.;(J4- \- .2004. : .

02. In regard to trading on NSE, it is our feedback that none of the major marketparticipants, including LJC/UTo' are trading on the Ref8i1·~ segmenl Tbis canalso be inferred from the negligible voiumes in turnover in this segment W&would suggest that NSEbe asked to furnish the data as afudher validation ofmarket feedback.

03. In regard to the tt'ansp8mnC'/ aspect. we 2n:! foIfowingjntemal~.forsanction that Involve a committee approaefl, withconfrol reoonto the Top ..Management offfie bin"k:>matidn~ftheCh;erGeilei-allianage;"-···· .(Treasury)lOeputy Managing DirectorlManaging~n according 10the value of the transaction.

04. The G-seclSDl deals are inva~ through theHBIj\f[)~~ijorm,~hichisin public domain and can be freeiY accessed by ioggIOg()rm) iheir web sitewww.ods.rbi.org.in. For CorpOiateBonds, the setUemenHsthrough RBt Clearing.and wberevertnese are brokeredthe irr".o.-;nat=tln is·r.lari~1posted ontheNSEweb site. This is becausealtourempanelfedbro((er'S et"~JoyNSE membershipand are obliged to make these di$dosures asa partoftMl mernbershipterms:

o? For brokered G-sec deals, the disclosures in the NSE is over and above theinformation made public through the NOS web site. In this connection, in the FYended 31-03-2003, the total brokered deals were Rs. 5314.08 CtS. The rest of.the total investments of Rs,9777.53 CfS. pertains to primary issuesldirectdeals(Rs.200a.OO ers. and Rs.2455,45cts. respectively). -

06. It may alSo be noted that the ;nl9flllaUOfl on a·daily basis is conve}'ed to~fEQID[QY9it..c:~(nail.djsrlnsln~GOmplete Jl&"Jrt/lars L~apart. E.eF.Q..audi!!lrsare Verifying-each and ever; deal ••••'ith reference to, interalia, the markethigh/fo\·,s and EPFO investment norms .

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07. In conclusion, we may mention that S81 ~aln~ady (in Feb 2004) in touch.with RBI for approval for seeking NSE memtSership. We understand that RBI areevalUating the proposal as most of the other public sector banks have alsosought such an approval. It is also understood that SEBI approval at present isgranted to banks only for dealing in derivatives on the NSE and we are notinformed of the po/icy change, if any, in ihis regard.

Yo~~~l-ir"'~ _DJrputy Gen_. _.... anager{V'M3~c-,)., .

http://www.ods.rbi.org.in.

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Item No.7.

'7~n. (\1~~ ~L~~<Ldb ..tq~ -'L""'-tAmendment in Para 600fEPF Scheme, 1952 toavoid delay in settlement of claims of EPFMembersincase of non-decfaration of rate of interest intime.

1. ... Tfie- r_a~e--~r}nt~r~st~O}l--!=I'F~~cUmy'atiQris~basootbeendedaredbythe Central Govt. for the financial year-s2002-03 and 2003-04. However,as per the decision of CBT,EPFthe final claims of the outgoing members havebeen-settled at the interim rate during the years 2002-03 and 2003-04. For

--.-.~ 'fEtw= 299r:-.~3·~e i1Iterest"i'tas-treencretfttetl-trT-ttl1~ ·3'trounrs·-m-eacfi-member at the rate recommended by the CBT,EPFto the Central Govt. Forthe year 200~-04 CBT,tPF had decided to aJJowsettlement of claims ofoutgoing members at the composite interest rate of 9.50/0 to avoidiocon~n~nce-tothe retmng/outgqing members,

2.>CBT~ -EPFin its 163m meeting held on 19th August 2003 recommendedinterest at the rate of 9% for the year 2003-04 and an additional interest of0.50/0 on the occasion of Gofden Jubilee of JneEmployees' Provident FundOr9i'ritsation to aU members of the Employees' Provident Fund under Para60(1) of the EPF'Scheme, 1952., The Board also deeded that an interim rateof interest @ 9% and 0.5% bonus interest be paid to aUoutgoing members.Recommendation of the CBT, EPF, was sent to the Government of India andits decision is a'Waitee.

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According to the above decision of CaT, EPF interim rate of interestwas to be given to the outgoing members. The position -about crediting theinterest fs.r the ~at 2003-04 ili- the 'accounts of continuing members at the 'time of issuing anIWal statement of accounts is not clear. As.per Para 73 ofEPF Scheme, 1952anntJal statement of accounts issued 'to the membersshould reflect total amount of interest credited- at the end of theperied/finaQciafyear. This task cannot. be cornplet~d· tiH the CentralGovernment takes a decision on the rate of interest to 'be credited in theac-counts ofPF members for the year 2003-04. Accordingly annual statementof accounts for 2003 .•04 can not be issued -till further instructions. Howeverto avoid delays and to- utilize .the manpower field offices were dir:ected videlett-er dated 25.:3.2004 (copy enclosed) to complete _pJ:"eparatoryactivitlessuch as upQ:atio~of Cash-Books &OCB-R, Data Entry, Check listing process ofinputs etc. ,and not to. tssue annual eceounts slips for the year 2003~04 till

-furtherdecision by Finance & Investment cpmrnittee and CBT,EPF .•• c ",,_. __, . ..•••. "'~.-'~'-"_~''''''_-,-,-".,...--- ..-.. ----.- ~-.=~,- ..- ..,.,.,-----":;.-""- - ....-,,"",,-"

3. For unlformitv,-:jtmay be Co';~idered to continue to caHow interest for2003-.04 to -out'"Qoing-members @9.S-O/o as ~ided by CBT,EPF after March2.OD4a1sO. It is-coosidefed essentlat to avoid harassment to outgoingmembers,_r 4. Now the declaration of rate of interest forthe year 2004-'05 is again duefor which it is essentiai to project the income & HabFlitiesof the un-exemptedprovident fund. While presenting vote on account instead of general budget

lfor.the y. ear 2004-05 j~. the parfj~men~, Government did not annour~c~ the rateof Interest payable by It on 50S -rnwhich about ]80/0 of the corpus IS Invested.Since generai etectlon for the Parliament has been notified and the Election

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Commission has enforced model code of conduct, the agenda item on rate ofinterest may be interpreted as violatlon of model code of conduct as it has videramifications and concerns about crores of workers and their families. Mediamay also pofiticize the issue in view of general election. Elections arescheduled up to se£-oOOweekcfMay2004. ---

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5. As per Para 60(1) of EPFScheme, 1952, the Commissioner shall credit tothe account of each member interest at such rate as may be determined bythe Central~~'!'~'-Ilf!J~ntln cQnswtatiDn witb theuCeRtral BgilFGr-··-~-"'"-"··l-7

6. Provident Fund clelmsof retiring/other outgoing members. cannot bewithheld just because Qf non-dedaratlon of rate of interest. Interest willhave to be paid on all. Claims to be settled on or after zs= April, 2004 inaccordance with Pata 6Q(2)(b) whichinteralia provides asunder:

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"In the ca';e ;"'a claim for the refund umler"paragraph 69 or70, interest shall be pay~bleuptO the end ot the month precedingthe date on which the final PlIyment is autiwrised irrespective of thedate of receipt of-the claim from the claimant concerned. "

"Provided that interest up to and for the current month shall bepayable on the claims which are authorised on or alter the 2$l' day ofa particular month alongwith .actual payment after the end of the r>.current month. " "

"Provided further that .the rate of interesf:tobeallowedonclaims" for refund for the broken .currencyperiod shal/be the ratefixed for the financial year in'whIch .the refund is authoFisetL II . t:7. It may not be out of place to mention that settlement of claims ofprovident fund members in time is the statutory duty under Para 72 (7) whichcannot be fulfilled properly in the absence of declaration of rate of .interestunder Para 60 (f) of EPFScheme, 1952. Para 72(7) PrQvld~sas under:-

"The claims, complete in aU 'respe~ submitted along with thereq"uisite documents sha-II.~ settled and benefit amount paid tothe beneficiaries withi~.30 days'from the dateofitsl"eceipt by the

-Commissioner. If there isanv~eficiency in the claim, the sam~shall be fecerded-'tn-wl iting-cimt~(1lf1mUnicated ~otile applicantwithin 30 days from the date of receipt-afsuchapplieation.-Incase the Commissioner fails· without sufficient cause to settle aclaim complete II] a.ILrespects-within--30 .tiays, the-co.mmissioner

- shall be liable for the delay beyond the sa"id period and penalinterest at the rate of twelve 'percent per annum may be ~hargedon the benefit amount and the same may be charged ion thebenefit amount and the same may be deducted from the salary ofthe Commissioner".

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B. It is obligatory on the part of Central ~overnment and Central Board ofTrustees, Employees' Provident Fund, to declare rate of interest before thecommencement of the financial year in order to avoid delay in settlement of

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-claims of the retiring/outgoing provident fund members. Similarly, it isobligatory under Para 73 (1) to issue annual statement of member'seccountshowing opening bafance,contributions and interest credited to the member'sacc-ount. .In the absence of any direction of CST, 'EPFand non-dectaratton ofrate ,o~ fnferest 't>y The'~C-enrfaTGOvemmentror'the year 2003-Q4'~worK TofiSSuanceof annual account sflps fo'rtfle year 2003":04 eoUid notbe ~arted witheffect from 01.04.2{)04.EPFO issues more than three crore account sltpsevery year to the members intimating them the opentngbalance, contributions

"Jiecei\led·~-mteRlSt-€reditee ..ifl.··thetr..·aCCOtlnt5;-~~ maUy seM:lesabout 1.60 rakh claims p~ month. The claims for final settlements cannot be'kept pending for long ti~. Moreover it will be inequitable if provident fundmembers are not given interest at the time of final settlement of claims. It V\r'iHcause unnecessary harassment tq, the outgOing members. .

9. In the event of delay in dedarationof rate of interest jf CBt· €I{Fresorts to settlement of claims without payment of interest for the relevant 'financial year,' cla'hi"ls-Wiflhave to be processed twice viz.once at the time offinal· settlement without interest for the broken period and again. afterdeclaration of rate of interest for paying the' interest for the broken period.Additional cost-ofservicing about 1.6 lakh clalms per month wiH be very highin terms of financial burden. In the present manual & paper intensive systemprevalent in the EPFOtnereJs every chance that 100 reproeesstnqof alf suchclaims settled (without interest at first instance} may not be·POSSib~. Thiswould lead tounavoldabieharassment to the customers as well- as to theconcerned offlc;·aJsofEPFO. This' wiH attraetaoverse media attentiofi lfnd willspoil the reputation of government as well as EPFO.

10. To resolve the' aforesaid problems and to avoidanomaty in the EPF.Scheme, 1952 it will be essential to make a pr.ovision in Para 60 itselfSb thatEPFmembers are not deprived of their basic rights to qet their claims settledwith interest on retirement/other contingencies in case the rate 'of mterest'h'as not been declared. In view ofthe above, Government of India may berequested to add following proviso after second proviso of Para t>O(2) {b) ofEPFScheme, 1952 :

"Provided also that the rate of interest to be allowed on claimsfor refund for the broken currency period shall betfte ..•.ate

. determined by Ute Centra. Govt. forPubfic Provident Fund"fPPft~orsDchtowerrate"a's reemn'ftl'!nClea tJy"'Cenfl!af SCSarcfofTrustees, Ernpfoyees' Provi~entFund to the CentraLGovt. und~r~.para 60(1) if ratehas not been fiKed ·for the financial year in

-. which refund is -authorized and the c1aimsSSUled under thisproY.isiori shall be final."

_11. Para 6{) qf £PF Scheme" 1952 regarding interest and Section 7qf EPF& MP Act, 1952 about the powers of the-GentralGovemment to amend EPF

. Scheme, 1952 are enclosed for ready reference.

Matter is accordingly placed before the Finance & Investment Committeefor consideration. .

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Para 60 of the Employees' ProvidenlFund Scheme, 1952

Interest-(l} the Commissioner shall credit to the account of each memberinterest at such rate as may be determined by the Central Government inOOf'tSultationwtth thE:"CentrntBoard:- --~.---->---- ----- e' ... ---

(2t{a-) Interest"snafr bEfcredited fothe member'saccounf onmonfhiyrunning balances basis with effect from the last day in each year in thefollowing manner: .

--_._.- ----.-.--- --~~--•....-.-----...--.--,~-.--.--.--- .'. ---.~.,...-.---~--... ,-. ...:;--(i) on the amount at the credit of a member on the last day of the

. preceding yea~, less any sums withdrawn during the current year> ".interest for twelve months. .

(ii) On sums withdrawn during the current year - interestfr<>m .thebeginning of the current year up to the fast day of the .morithpreceding the month of withdrawal. -. ,

eiii) On all the sums credited to the member'S account after the fasr'day ofthe preceding year - interest from the first day of the .monthsucceeding the month of credit to the end of the current year.

(iv) The total amount of lnterest shall be roundedto the nearest wholerupee (fifty paise counting as the next higher rupee)J

2.( b) In the. case' of a claim for' the refund under paragraph 69 or 70,interest shaH be payable up to the end of the month preceding the date onwhich the final payment isauthorised irrespective. of the date of receipt ofthe claim from the claimantconcerned:] .' .

Provided that interest up to and for the currentmooth shall be payableon the claims which are authorised on or ·after the2Sth day of a partiCular ,/month alongwith actual payment after the end of the current month:'

Provided further that the rate 'ot"interest to be ·atlowedon claims forrefund for the broken currency period shall be the rate fixed for the .financialyear in which the refund is authorised.

[Explanation-If an establishment is covered for the first time: underthe Act/Scheme during the course of the currency period the interest. shall be .allowed on all the sums credited to the member'S account on and from thefirst day of the month succeeding the month of credit to. the end of tb,.e

•.•._.~ .•••• ••• ~ •• ~.,_._c~ ..,. ••••..••••••. __ .•. _, __ '.,_0·'"

eerrent year.]

(3) The aggregatft amount of interest credlted to the accounts of themembers shall be debited to "Interest Suspense Account".

(4 J In determining the rate of interest, the Central Government sha]]satisfy itself that there is no overdrawal on the Interest Suspense Account asa result of the debit thereto of the interest credited to the accounts ofmembers.

'.

(5) Interest shall not be credited to the account of a member if he informsthe Commissioner in writing that he does not wish to receive it. If, however,the member subsequently asks for interest, it shall be credited to his account

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-with effect from the first day. of the penod of currency in which he makes arequest therefor.

C) Section LH.oLthe·EmpIQ¥ees' Pro.vident Eund A_. Mi$<;e1IaoggusProvisions Act,.-1952 ..

7 {1) Ttie Central Government may, by' notifICation in the Offlcialr_ r-~-~' .~.""G'azefteaa(f'oo;--amenoor vaf{e.1fier ·pr~ea:Nefy .or "re"tf<)§pec'fI'JeTy, me"

Scheme, the Pension Scheme or the Il1surance Scheme, as the ;case may be.~ .

7 (2) Every notification issued under sub-section-{l) shaH be laid, assoon as may be after it is lssued,oofOf'e eadl HousedParUament while it isj;n session. fora total period of thirty days; wh;chmay·be 'Comprised in onesession or in two or more successive sessions, and if, before the expiry ofthe session immediately. following the session or the successive sessionsaforesaid, both Houses agree in making :anymodification in the notification,or both Houses agree that the notification should not be issued, thenotification shall thereefter have effect only in such modified form or be ofno effect, as thec.ase may be; so, however, that any such modification orannulment shall be without prejudice to the validity of anything previouslydone under that -notifiCation.]

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Item No.9. : Portfolio Audit for the year 2002-03. r=:\ J

Audit Report of Batliboi & Purohit on Investment Portfolio of Employees'

.. --·-Ptovfderrt FarrdOrga'hisation mcmagedby the~State-~ rorthe. .....;. ..~-.,.'-... ,..-.-- .....•:.,~~-.--~ .•.-~,,--.;..""" ----- _.,.--

period 01-04-2002 to 31.3.2003 was circulated. Thereafter the gist of the

Audit Report was .placed before the Finance & Investment Committee in its

-..-~ meetingne«forrrg:4'::ZU02f:--1\uffiFR'epoft a10119w;m'Wst-Wftt'be-pta~7----

on the table as and when required,

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Matter is placed consideration of Finance &,Investment Committee.C)()(l"'

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IT£MNO. 8: DECLARATION OF RATE OF INTE.~ TO BE CREDITED TO EPFMEMBERS' ACCOUNT FORTHE Y'EA~~OO4-2005.

1. As per the provisions contained in Paragr~ph 60.(1) of Employees' Provident Fund

Scheme 1952, EPF organization is required ".0 credit interesten the balance available in the

accounts of the EPF members at such rate as may be: determined by the Central

.Government in consultation with the Central Board of Trustees, Para 60.(1) of the EPF

Scheme needs to be read with Para 60.(4) according to which • in determining the rate of

interest, the Central Government shall satisfy itself that there is no overdrawal on the

Interest Suspense Account as a result of debit thereto of: the interest credited to the

accounts of members".

2. Prior to 0.1.0.4.1993, interest was credited on the opening balance of the year. From

0.1.0.4.1993, the Scheme provides that interest is to be credited on monthly running balance.

3. The amount belonging to the Fund is invested according to the pattern of

investment prescribed by the Central Government (Ministry of Labour) from time to time.

The current investment pattern as renotified under para 52 of EPF Scheme, 1952 effective

from 0.1.0.4.20.0.3 is as under: -

INVESTMENT PA TTERN-Pattern of investment to be followed hy the non-Government Provident Funds,Superannuation Funds and Gratuity Funds.

No. F. 5 (18)-ECB/2001 - In partial modification of this, Ministry's Notification ofnumber F.11(3)-PD/98 dated·31st March 1999, the pattern of investment for investmentfor incremental accretions by the non-Government Provident Funds, SuperannuationFunds and Gratuity Funds shall be as follows effective from.1st April, 20.0.3;-

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c.Percentage amount:

INVESTMENT PATTERN to be invested q(i) Central Government Securities as defined in Sec. 2 of the ·C

Public Debt Act, 1944 (18 of 1944); and lor units of such (Mutual Funds which have been set up as dedicated Funds 25%for investment in Government securities and which have lbeen approved by the Securities and Exchange Board of

I

India;..

--(ii) (a) Government Securities as defined in Sec. 2 of the

Public Debt Act, 1944 (18 of 1944); created and~

issued by any State Government; and! or units ofsuch Mutual Funds whi~h have been set up as 15%

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securities and which have been approved by the kSecurities and Exchange Board of India; and lor "j

(iii) (a) Bonds/ Securities of 'Public Financial Institutions'as specified under Section 4(1) of the CompaniesAct; "public sector companies" as defined InSection 2(36-A) of the Income Tax Act, 1961including public sector banks; and lor

(iv) To be invested in any of the above three categories asdecided by their Trustees.

(v) The Trusts, subject to their assessment of the risk - return prospects, may invest up to 1/~of (iv) above, in private sector bonds! securities, which have an investment grade rating fromdat least two credit rating agenci~s. (:

(b) Any other negotiable securities the principalwhereof and interest whereon IS fully andunconditionally guaranteed by the CentralGovernment or any State Government except thosecovered under (iii) (a) below

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30%

Short duration (less than a year) Term Deposit Receipts(TDR) issued by public sector banks

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II. Any moneys received on the maturity of earlier investments reduced byobligatory outgoing shall be invested in accordance with the investmentpattern prescribed in this Notification.

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III. In case of any instruments mentioned above being rated and their rating fallingbelow investment grade and the same rating has been confirmed by two creditrating agencies then the option of exit can be exercised.

IV. The investment pattern as envisaged in the above paragraphs may be achievedby the end of a financial year.

4. To recommend the rate of interest for the year 2004-05 to the Government, the

position of estimated amount to the credits of the members as on 01.04.2004 and the

estimated yield from the Investment holdings are taken into consideration. EPFO follows

single entry system of accounting and in case of Un-claimed Deposit Accounts of EPF

members, interest liabilities are computed at the time of settlement of claims only. No

provision for interest is made on accrual basis in the books of accounts. Accordingly the

surplus of income over liabilities is overstated to that extent.

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5. The investment holding of CST, EPFas on 31.03.2004 in the provident fund accountwasas under:

(.11"A fiqures in Crores of Rupees)HolCilingas on % age holding31.03.2004.1. CUltral Govt. Securities 6613.31 9.21

2(0) State Govt. 5419.75 7.54

(b) Govt. Guaranteed Securities 533.56 0.74

3. Special Deposit Scheme 51954.77 72.32

4. Public Sector Financial Institutions 7317.19 10.19

Total 71838.60 100.00

6. As is evident from the above, 72.32% of total investment boldings in the Employees'

Provident is lying invested in the Special Deposit Scheme (SDS). Deposits in the SDS earn

interest at par with interest declared for the small savings schemes and Public Provident

Fund. In the proposals for vote on cccount/ for the year 2004•.05 the rate of interest on

small savings schemes and PPFwas not declared. The notification as regards the rate of

interest on SDS is still awaited. It is pertinent to note that rates of interest on SDS from

Financial Year 1986-87 onwards upto Financial Year 2003-04 have been same as the

respective rates of interest onPPFaccumulations in all these years.

The yield of the EPFCorpus depencs on the market yield of the debt instruments

like Government Securities and bonds of Public Sector Financial Institutions/Public Sector

Undertakings. All the Securities as per approved pattern are now being quoted in the

market on a premium thereby bringing down the yield. Yield on all securities is thus market

driven. With lot of pressure on the interest rates, the yield is falling steadily.

7. Further, as informed earlier there are a few cases where there are defaults in

payment of interest and maturity dues. Chronic defaulters have been M/s HMT Ltd. And

M/s IFCI Ltd. While computing the expected interest incomethe expected dues from HMT

Ltd. have not been taken into account. Interest receivable from IFCI has been taken

@9.25% per annum.

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8. Projected interest Income from Ptovident Fund investments during the year 2004-

2005 will be as under if rate of interest (q SDS continues at 8% per annum.

(Rs.In crores)

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CATEGORY

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PARTICULARS i

CTG STG SDL PSU Grand Total IINTEktST ON SECURITIES MATURING 707.55 45.92 488.69 401.88 I1644.04 !AFTER 01-04-2005 I- ----1Add: INTEREST ON SECURITIES MATURING ON .~..11 13.131 0.19 120.45 134.881OR BEFORE 31-3-2005

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Add: INTEREST ON REINVESTMENT * IOF SECURITIES MATURING AFTER 31-3-2004 0.75 2.84: 1.27 96.15 101.01 I

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9.75 0.93': 7.35 9.28 27.31 IAdd: REINVESTMENT OF INTEREST* PROCEEDS i

IAdd: DAMAGES (AS PER BUDGET ESTIMATES 48.00 I2004-05) {page ll}

I !1955.24 i

INTEREST RECEIVABLE ON SECURITIES ---> i

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INTEREST RECEIVABLE ON DEPOSITS IN SDS @ ii

~jP.a.* 4156.38 j

.- 122.23 !LE~ 2% FOR CONTINGENCIES

LESS INTEREST ON SRF 69.97 INET INTEREST RECEIVEABLE 5919.42 !

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"'Reinvestment rates for Financial year 2004-05 :

CTG 5.5%

SDL

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6%

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6%

If SDS interest rate is reduced by the government. to 7% then the interest 0receivable on SDS will come down by 389.66 Crores. Accordil!lgly interest amounting to

Rs 3766.72 Crores will be received @7% instead of Rs 4156.38 Crores on deposits inuul;

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9. Keeping in view the above tactors two scenarios have been worked out to ascertain

the interest payment liability vis-a-vis the expected interest income during 2004-05. The

scenarios basically addressed are>

A) Interest rate on SDS deposits are reduced to 7%

B} Interest rates on SDS deposits continue to be at 8%

(Rs. in crores)

51. No. Estimated interest income Interest payment liability Surplus/deficit

Scenario A 5044.8l4(@7'10) 484.92

Interest

rate on 5405.1$(@7.5'10) 124.58

SDS 5529.76

deposits are 5765.53(@8'10) - 235.771reduced toI7"/0 I

IScenario B 5044.84(@7'10) 874.58

InterestI

rates on 5405.18(@7.5'10) 514.24 :I

SDS 5919.42

Ideposits I

continue to 5765.53' (@8'Yo) 153.891

be at 8"/0 j6125.87 (@ 8.5%) -206.45 ,

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The item is accordingly placed bet(.,'e the Finance and investment committee for

consideration and recommendation of rate of interest for the financial year 2004-05.

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2002-2003Money Segments - Membership Spread

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Members Membership %age to Accumulations %age of Averagehaving balance Rs. Total CIR Rs.) Total Balance, membership Accumula-

tion<20,000 2,93,40,092 84.58% 91,92,07,36,322 16.98% 3,133

20,000 to 49,999 28,77,805 8.30% 1,16,45,79,24,377 21.520/0 40,468

150,000 to 99,999 12,77,200 3.68% 90,25,08,80,929 16.67% 70,663

i 1,00,000 to 1,99,999 7,91,765 2.28% 1,09,59,13,05,649 20.25% 1,38,414I -I 2,00,000 to 2,99,999 2,33,212 0.67% 56,11,46,51,878 10.37% 2,40,616II

J 3,00,000 to 3,99,999 82,829 0.24% 28,32,41,51,699 5.23% 3,41,959i14,00,000 to 4,99,999 34,593 0.10% 15,31,00,02,326 2.83% 4,42,575

i 5,00[000 to 9,99,999 36,297 0.10% 23,23,83,73,951 4.29% 6,40,229

1-10,00,000 to 24,99,999 5,973 0.02% 7,86,51,37,914 1.45% 13,16,782

I 25,00,000 to 49,99,999 678 0.00% 1,69,94,88,131 0.31% 25,06,620I>= 50,00,000 86 0.00% 46,85,84,821 0.9% 54,48,660

Sensitivity Analysis of Income and IlI'terest PaymentLiabilities

(Rs. In Crores)

Interest payment Interest Interest payment Surplus/ Qeficitat the rate of (%) Income liabilities

7.00 5919.42 5044.814 874.587.25 5919.42 5225.011 694.417.50 5919.42 5405.1 ~ 514.247.75 5919.42 5585.3 ~ 334.068.00 5919.42 5765.53 153.898.25 5919.42 5945.70 -26.288.50 5919.42 6125.8f7 -206.458.75 5919.42 6306.05 -386.639.00 5919.42 6486.~ -566.809.25 5919.42 6666.39 -746.979.50 5919.42 6846.57 -927.159.75 5919.42 7026.74 -1107.3210.00 5919.42 7206.91 -1287.4910.25 5919.42 7387.08 -1467.6610.50 5919.42 7567.26 -1647.8410.75 5919.42 7747,43 -1828.0111.00 5919.42 7927.60 -2008.1811.25 5919.42 8107.78 -2188.3611.50 5919.42 8287.95 -2368.5311.75 5919.42 8468.12 -2548.7012.00 5919.42 8648.29 -2728.87

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2002-2003Money Segments - Membership Spread

Members Membership %age to Accumulations %age of Averagehaving balance Rs. Total (In Rs.) Total Balance,

membership Accumula-tion

<20,000 2,93,40,092 84.58% 91,92,07,36,322 16.98% 3,133

20,000 to 49,999 28,77,805 8.30% 1,16,45,79,24,377 21.52% 40,468

50,000 to 99,999 12,77,200 3.68% 90,25,08,80,929 16.67% 70,663

1,00,000 to 1,99,999 7,91,765 2.28% 1,09,59,13,05,649 20.25% . 1,38,414

12,00,000 to 2,99,999 2,33,212 0.67% 56,11,46,51,878 10.37% 2,40,616

3,00,000 to 3,99,999 82,829 0.24% 28,32,41,51,699 5.23% 3,41,959

4,00,000 to 4,99,999 34,593 0.10% 15,31,00,02,326 2.83% 4,42,575

5,00,000 to 9,99,999 36,297 0.10% 23,23,83,73,951 4.29% 6,40,229

10,00,000 to 24,99,999 5,973 0.02% 7,86,51,37,914 1.45% 13,16,782

25,00,000 to 49,99,999 678 0.00% 1,69,94,88,131 0.31% 25,06,620

>= 50,00,000 86 0.00% 46,85,84,821 0.9% 54,48,660~~-- - -- --.-~-----

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,(Rs. In Crores)

Interest payment Interest Interest payment Surplusl Qeficitat the rate of (%) Income liabilities

7.00 5919.42 5044.84 874.587.25 ' 59.19.42 5225.01 694.417.50 5919.42 5405.18 514.247.75 5919.42 5585.36 334.068.00 5919.42 5765.53 153.898.25 5919.42 5945.70 -26.288.50 5919.42 6125.87 -206.458.75 5919.42 6306.05 -386.639.00 5919.42 6486.22 -566.809.25 5919.42 6666.39 -746.979.50 5919.42 6846.57 -927.159.75 5919.42 7026.74 -1107.3210.00 5919.42 7206.91 -1287.4910.25 5919.42 7387.08 -1467.6610.50 5919.42 7567.26 -1647.8410.75 5919.42 7747.43 -1828.0111.00 5919.42 7927.60 -2008.1811.25 5919.42 8107.78 -2188.3611.50 5919.42 8287.95 -2368.5311.75 5919.42 8468.12 -2548.7012.00 5919.42 8648.29 -2728.87

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Portfolio Audit for the year 2002-03.

Gist of Audit Report of Batliboi & Purohit on Investment Portfolio ofEmployees' Provident: Fund Organisation managed by the State Bank ofIndia for, the period 01-04-2002 to 31.3.2003 is as under:-

PagelPara

6(i)7/ 3.0.0(ii i)

AI c R£;MARKSNo. AUDITOR

Demat reconciliationas on 3pt March2003 comparing theDemat statements ofN5DL and"Certificate ofHoldinq reports"gen'erated from thesystems was notconducted. This hasresulted inunidentifieddiscrepencies.

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i To do physical We confirm that,verification and tally physical verificationwith total Non-5GL of 5GL & Non 5GLholdings. securities are being

carried out by theExternal Auditors qnhalf yearly basis. :

OF REMARKS OF SBX

We have once againverified from the !

National SecuritiesDepository Ltd(N5DL) site andfound that necessarycorrections havesince been carriedout. Our enquiry withN5DL reveals that, isuch instances occurvery rarely but errorhare being rectifiedduring updation. weinvariably confirm theface value of eachsecurity at the time ofinvestment from ourDepository Participantsection (DP).Moreover, ourConcurrent Auditorsare also verifying theDemat statement ona. monthly basis,which is thensubmitted toCorporateCentral/EPFO officefor their information

REMARKS OF iEMPLOYEES'PROVIDENTFUNDORGANISATION(IF ANY) I

5BI's view is Iacceptable. No Ifurther comments Iare required. I5B! may ensure to Istreamline the,system to furnishthe monthlyreconciliation ofholding inCSGL,DEMAT andin physical formduly reconciledwith that of totalholding at the endof each month.5B! should take upthe mat~er withNSDL to I get theface I valuerecorded !in NSDLstatement: fortimely ,reconciliation

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1105,1 Omni 2003 This has arisen duelto :lCQde the fact that, issu~rs No comm snts. I.~:9.01S0),NSDL of debt instrumentsd'ebited Rs.S Crs. on follow different25-3-2003 but later practices in putting'confirmed holding on through redemption6-4-2003. entries. However, we

are closely monitoringany deviation arisingout of such practices.

As stated above we Abstractare arranging to Concurrentrectify the Auditors reportsdiscrepancies pointed related to Centralout. Reconci liation: ofDemat Holding as perBank's book and asper NSDL DernatStatement is done onmonthly basis and thesame is audited bythe ConcurrentAuditors.. ...f--~---l--~-------'-- .--.-----.----- ---,-- -----------.---

In case of security Signatures obtained No comments.code 360144 (A/c No subsequently.11) (transaction date28th January 2000),certificate numbers372-376 of 12.50%IndustrialDevelopment BankOf India (lOBI)C1MNI BONDS 2004having a face valueof .as, 5, 00,00,000(Rs, 5 Crores), thecertificates were not~-~~horized by

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11 I3.00/iiito v)

11 I3(vii)(a)

i Certain securitieswere thoughdemated before 31st

March 2003 but dueto non-updation inthe system recordswere still appearingin physical report,which were rectifiedat our instance.Refer Annexure 1.The S8! (back office)should reconcile theD~mat holding as~~Jr!books and as per*,,s~L Demat~fement on~~riodical basis.

No Comments.

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We have sinceupdated our system.

Board of Trustees,Employees'ProvidentFund,EPF shouldbe given by S8I.

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-------We have observedthe SCR receipts forthe maturedsecurities beingretained in SCR filealong with thecurrent SCR. SuchSCR should be

In 9 cases, securitiesaggregatingR$:A,79,61,90,000/-~Qiders name is SB!fo./!;C EPFO instead ofG~ntral Board of;T1(ustees, Employees'R.r;ovident Fund EPF.I-- +-_--j.;.-:=-=-:..::~:=-....:-~::::..L~_'___I_----- ----.,,-.-,.'-

I'Mr 7 cases securitiesare held in the formof allotment lettersthough date ofpurchase pertains tomore than 2 yearsold.

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returned to We are arrang,ing torespective branch on call back the I

i receipt of proceeds securities wherever I

~:nf~~1:~to avoid ~~;t"t_:~SS~bu~,es_ -~--.-.,------J&1

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Since Rectified. Safe No comments.Custody Receipts i(SCRs) for ma turedsecurities have Sincebeen remo,ved.System now in placeto monitor maturedSCRs to be returned.

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We do not accept thecontention of theAuditors as style ofnomenclature doesnot affect our right asholders (Custodian)of the security.

Matter is underconstant follow' upwith the issuer. Lastreminder sent on15.9.2003. Further,we confirm that outof seven allotment

:

letters shown aspending in the report,we have sincereceived BondCertificate in respectof Securily Code no501010, 13.6% WBIDFCL 2006 for Rs.12,00,000/-. As also,we have surrenderedAllotment letter forexchange of SecurityCode no 510045,12.52°;() Goa TIL IRR

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All purchasesholdings should bein the name ofCBT,EPF.

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---.'-.....--.-,~--JEffective measures Iare required on ithe part of SB! to Iremove thedeficiencyparticularly in caseof defaulterRichard & Crudas.

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'Purchase of HUDCOBonds of Rs. 100 cr.On 4.3.2003 out ofissue rated as AAA(ind) so by FITCHignoring thedowngrading ofrati n-g of AA - byCRI5IL on ";' 3.2003.

should have beenconsidered forinvestmentdecision.

of the 5BI has been

The rating AAA (50)is on a standalonebasis as the paper issecured by Letter ofcomfort. The everettdown gradation of theHUDCO that 'tooanother agency wouldnot affect the ratingof the paper. In fact,this paper continuesbe traded in vthesecondary market asAAA (SO) rated psperand we feel tha-t thereis no deviation fromthe guidelines.

1------\--- ---------.--- .-_.--.,-Purchases were We are.made from DFHI in opinion, that there is10 cases, which is no breach ofsubsidiary of 5BI instructions aswithin the market conversion of DFHIhigh-lows available into our subsidiary ofon the date of SBI is yet to completeinvestment. the leyd"L\ie~.

However, we haveadvised EPFO aboutthe tra nsactions for

f--- -+---_--+-- f--'.th,eir_:il.e,~?Lcom1'l],§QL_Securities Allotment is done bypurchased from the issuer, who havePrimary Market allotted only Rs. 3.'00

L--- --'--_---L-'--W.:....:i..::.:th~.__:.....:r~?lLE!ct__J:P_ C rore_s a9ainst

15 / 4(ii)

16 /4.0.0(ii i)

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Auditors: further Icommen;ted as'1

1

under: -

Though FITCH has!given AAA rating i

to the paper onthe basis of Letterof com fort issuedby "Ministry ofUrbanDevelopmentPovertyAlleviation", it hasalso clarified that"letter of comfortis not a guarantee,it is nevertheless,sufficiently strongto warrant implicitsovereign supportfor the proposedbond issue." In ouropin Ion pressrelease of CRI5IL

allowed in revisedguidelines to dealwith DFHI subjectto submission ofseparate report!showinq that den Is iwet e made ill Imarket rates.

-----.----.----------~----.- - ----_ .. ---~Firm allotment imay not be Ipossible in all Icases.lrlYegr:Tl~,~U

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condition of firm application mon-ey f ofallotment we have Rs. ;?5.00 Crorr-., Wf'nouced that as per have paid only oninv~~tment note No allotment of Rs, 3.bo2~q~00031 the crores and we do riotpr:gposed amount to understand trebe invested was Rs. nature of objection.]25,qo,00,000.f,{&)\lvever the'J"'.r- :

$~curities amountingto,~"Rs. 3,00,00,000w-&~eallotted.TJ;le new system The matter has beencalculates the' taken up withinterest receivable HUDCO. Such casesfrom the date of noted for specialapplication till the monitoring.date of allotment incase of purchasesmade from primarymarket, which maybe received after theallotment or at thetime of receipt offirst interestinstallment. On ourverification ofinte't~st receivableanp~i,hterest received

.;r.-/":::'w~_r_have observedth~t; in 2 cases of9%.' HUDCO-III,Ci9:~:~No.390014,CIS/lr;. No.ll & 25)tA~"interest from theiqga.t,e of applicationtAt' the date ofal'tbtment amountingRs. 3,69,862/- is notreceived eventhough the firstinterest installmentwas received.

1---------1-------- -----,----------------- -.-,---We have analyzed While our efforts are Followingthe investment to' obtain maximum information mightdecision taken by yield, it may not be be required beforeSBI (front office) by possible to track each any commentscomparing them with and every security could be offeredthe other investment that is available in the on erriciency oropportunities market. Further, the otherwise of the

opportunitiescontinue toenchasedprimarysecondaryboth .

inand

markets

Matter requires ivigorous followup

on the pa~'rtO,f sseof SBI t recoverRs. 3 69,862/-from HUD O.

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- in--the--dynamics of 'theon same market is such that,

we may purchase asecurity at some yieldand quotes for othersecurities at a higjheryields might cornel upafter the deal! isstruck." Also, ~he

securities. We have comparison has lOI bealso considered the made with similarnumber and volume size deals. Smallof trades while value deals are oftenarriving at our struck at off ~he.conctusion. market r9tes

particularly for oddI

lots and cannot Iqrrnthe basis 'forcomparison. fhe

i

report also goespurely by yield andnot category ofinvestments. We maygo in for a certaincategory ofinvestments to fulfilthe distributionobligations andcomparing the yieldwith that of anothercategory may not beappropriate.All the deals putthrough by us onbehalf of EPFO (inSDL and CGScategory) have to berouted through NDS,RBI platform forsettlement oftransactions. Themarket highsj lowsare obtained lrorn theNDS data, whichwould include ourdeals also. Hence, thequestion ofpurchasing thesecurities beyond themarket's highest pricedoes not arise at all.

!,':?-l-yailable!:rrarketi.dav.We have takenmaturity year of theinvestment made asa basis forcomparison forPSUjPSFI and SDL

<.','-./';1-·'

~.-.--

The instances wheredeals are made at aprice higher thandays' average priceare referred to inAnnexure IV.The ,daily marketquotations are notavailable in case ofdeals done withoutbroker "involvement(Direct deals) and~here no other tradewas undertaken onthat day in themarket. Hence wehave not carried outthe above exercisein such cases.

dealer striking thedeals.a)The exact time,when the deal wasstruck.b)The offeravailable in themarket before thedeal was struck.c)Voice recordingsystem at thedealer's end.

However keepingin view marketdyanamic;:s,CentralBoard or: Trustees,Employefs'Provident Fund,may coptinue torely o~ controlsystems! in S8Iand SBIi may beadvised to encashbest i possibleinvestmentopportunlties.

I

I,

Auditors~ave theirview as [under onthe comments ofS8I "We havecompared thepurchase pricewith daily averageprice. The dailyaverage : price isderived by addingday's high and lowprice and dividingaddition by 2. Wehave taken dailyhigh and lowprices from NSE'quotes madeavailable to us" "However S8I beadvised to make

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investments made.There are nomajor deviationsobserved . in the ~pattern of!Investment during i

ithe period under i :::'audit.! ':,Interest received at iWe are ensurrng that An agreement tolower than coupon ill com puler repor l is re'-.trut.iur c tile

I

rate: Industrial," generated covering debt 'of IFCI hasFinancial Corporation all investments, and oeenarriveo at in

1

of India {IFCI} has i made available to the subcommittee ofpaid interest on 3'" i Cor cerate Centre to Central Board ofApril 2003 and 21",1 pnSlIlP proper I TrLJ~tpf"s,EmployPPAplIl )003, wlll( h rf'poftlf)(J to 11'1 (), .;' pfovldrnt l und,

i '

5BI (front office) hasreported the pattnrnOr jllve!,lrnelll (01lOOt' OJ to rI'l ()Imr;pd 011 tllP rfll",,1op.l1p.r.,tN/ (rom t hr-new system.However, on ourveri rica lion weobserved that therewas difference of Rs.244.27 Crores ascompared to theholding report as on31~·t March 2003generated from oldsystem.The compliance withpattern ofInvestmnnt shouldhe based on thpIncremental l1(llaccretion during theperiod and not onthe totalinvestments made,during the period, Asobserved currentlythe investment!pattern compliance tis based on the total i

~,

No comments.

all efforts to strikedeals .at least atlesser. then thehigI1es'l; price,

t ,I t

; ,:::.,;J'The :>1' provisionc;hOljllcJ':'/Jp.made ]nlh~ ':\'( S l 1abu',"Y"'"1I11 to';,I'''I~:I;~ 111r>1',,1 \pr"r'\:, OfInves'mlent on the,bCl'>is',: ;;~,: of netaccrei:i:an and on I

total ': nhvestmentsllla~e:'ttlurlfl9 the

pen01~1 -.:,~i:\, '.1

'::':f;;:J;::'): 1:1

<' ji, ,I:r ii:I';'i:!::.:i:.:: 1:,[' t:!;I:;:;I,r.'!::}!:;;~j! ;:. .':: I: :,':~: '; ::~J!",:\:,:'d""

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r------r---r------:-~---- ..--~...- .rpertains to financialyear 2001 and 2002respectively.However interestreceived on 21" April2003 is received atrate of 9% instead ofcoupon rate. Thishas resulted Intoshort receipt ofinterest amountingto H',. 29,56, 1B,I)C)~),Ihe monthly Interestwatch & interestreceived reports arefiled separately.However, monthlyinterest watchreports for SGLsecurities were notavailable for ourverification for themonths of April,June, September,November, andDecember 2002 andalso such reportscannot be generatedafter the monthlY!updation in oldsystem. Computersystems beconfigured to giveinterest short receiptreport to facilitateeffective interest Icollection monrtortnq

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especi,l~t IormeoI, 'I

for ,11gotiations.Howe~~f Portfolio IManag~r:: shouldfollow::j-!U upVigOr<>::~~IY theCOllec~l~i'"r of allreceiv~'tes in timeat the:,: !dupon rateSBI b~Hadvised toupgra~~,: its systemi1111I r!T,; '.1I1" liltInterdN::,: shortreceip~; i';,: report toEPFO :Iit:! everymontti~J:

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In cases listed in audit I We have noted to .SBI 'has beenreport delays in receipt follow up in cases advised.: to follow-of Interest occurred on where large amounts up theaccount of following:: are involved arising vigorously.

) out of delay in Slalei::Bankil [11c~rt;)ln (';1';1'<; .' ' ,there are. deldY" in, rpcf'lpt·; of p<lyrlH'rlt·,. IIlClril:,I111l

• notreceipt of Inter ust r We are arranqmq for given ... ; its'

Iamount of NOIl- SGL I transfer/dernat of the obsedvauons onsecurities as compared, securittes wherever the ' ,I specific

I to due date. ' such facility is instanC~$ of'-- '-_~.__Lb) ~~~~~i~~S the available to ensure. delayedireceipt of i

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matterTheof

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hence we have not II------~. rep()!::te~_~l,~h delays. ,

(i) Delays in receipt i The Strahus Systemof maturitv 'O\ltP\lt in ,pqMd toproceeds: ~outstandinq interestIn certain Ci1S(\S , r (\PO, I is b(\l/lf) ,(\liN!detavs ille obscr vf~d upon and ". put tofor receipt of incremental use, dueproceeds il<; to prpspnt prilrlicp. ofcompared to due I propertv enteringdates. As explained masters, Suggestionthe reminders for regarding configur-claiming the penal ation has been takeninterest were sent up for consideration.but the same were We are continuouslynot available for our discusstnq the matterverification ti" 4t/1 with StrabusAug 2003. Representative(ii) Maturity, (System Providers) tooutstanding Report: resolve the matter.

I The maturity due but It occurs (0 us that

---.~-" -" '_"", -- Idelays are on account timelyof Interest warrantsbeinq received aspayable at plarf"'i(lItHH IlIflll Mlllllllnr,

c) III few casusback office has lodgedthe securities with its

,eceiptinterest.We are regularlyf()"()win~) IIp wil l: III •.•,1".petUve CO'lIpillliesfor overdue interest.However I responseshave not beenbranches for interest

collection for which forthcoming in manySafe Custody Receipt cases. We are(SCR) are issued to stepping up our581, (ba.ck office). On I follow UP, mechanismthul e•••• Interest Is in this regard.collected at ,respective branchesand later onforwarded to Mu IIIba I ,which results in delayin collection ofinterest.d) WI~ ItiIVI! ,Iho ,:

observed delays ill II

receipt of maturitylntnrest amount a<;COlllPitrl'd to 111iltlllily ,I

dates.e) case of iIn

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of ini~~~st. However,the:iicases or delayin ~:::.:receipt ofilllril ~';I .1ndrllilhJ~ilY proceedsare:h~gularly takenup:¥-.rilh the StateBarlk:, of India toens;ut¢ adequatefollow up andrecoverv ofout*~ndings.

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I mpot receivedfQutstanding) reportI i~'prepared manuallyijif: the end of each'!ilJlonth on the basisgf: watch report.p:~esently this report~~ 'not available;~orough both (oldand new) system ..Asexplained the sameis underdevelopment for newsystem.(iii) Systemobservations:

~~) The old systemgenerates the partmaturity report,which has columnssuch as scri ptdetails, face value,% and amount. Thepart maturityamount at the timeof first due date iscalculated correctlyas a % of face value.However at the time6f subsequent duedate the systemcalculate value as%of reduced facevAI~e instead ofirlltial face value

'-- ....L... __ L--Wo;<W:hl+",iC-"--h_._.i~_in.correct,

(a) The maturitywatch report of oldsystem gives thematurity amount atface value eventhough maturity is atpremium.

(6)" The put call andR~rt redemption~f0rt generatedfr.oin old system dol,l\l'"

P/i>,tgive the details~~:EPFO Account No..,' ·i

the new system cantake care of the freshentries. However,the existing masterscannot be modified aschange in these fields

I

may affect the 01herdata in the system,Due care will I beexercised whilekeying in the data inthe system I 'The follow up is b~ingdone on a reg~larbasis with focus I onlarge amounts andlonger periods! ofdelay.

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'. ---..---...--------- - ---- ..~ r :::/:;:':r ThiS needs to be ,.j "

rectified in order to ~If;q:,i:':h:tv(l COli Pel (II lid ,1'1."t: ~Cj;~,po·,IIIOII. I:,.;"

t: (lJ) "I (:.!"t~t1l1ylilt! put ;1; r:i:,1",,1,and call watch report ,1;1,,:::

( is available in both :.:;~>~r the systems. The ~/: ;";

( q', I,~'SBr (back office) ,!!!:'

( may forward such :1;)":~I; t: 'I

report to EPFO to ","'",;':";

( enable themto I :;;;::

decision for,,!'.'

make ~j; I ~( exerctsinq put 1'".',. '

option. U;~( (e)The reference I'; '.;'

il!.' ;'i';. '

(documents. of l;;, "

maturity proceeds :;: "I I",

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(rount or foih "rn filr-r/ I ,;':'together with :: ':'( I I I'.', '"interest documents, •~ i I,

( fhe supportinq I" i '. ""

regard to maturity i( may be filed iseparately (or easy ,

retrieval.~

", ,

(f) The maturity Iw,\leh /I'Plllt

rllilllcHl1 '.hol/iel l)r I ~

taken after updation jat the end of each i'

month to trace the l~

acceptance cases Ientered '

t-- t-__ +_s_,u_b.?E:!gue_~~ly~. lWe have scrutinized ] Amount of commis-the de;)1 ticket wl<;e I <ion rp(undpd, SRItransactions fee I st atcd ()~ under:recovered on the t "We have taken upbasis of face value of i the matter forinvestment and I ascertaining thenoted that in some position to becases the followed up fortransactions are refunding the Service

C28- 29/

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Amount ofcollhnls"ion hasbec'!n,;': refunded.Further SB! has

. .'\

been: ;>i,advised toref~nd:RS. 25603/-on ',',~kcounl of

" I·

service. tax too., .':

I made in same Tax,; account for same \Ve are informed that,! security at same Service Tax cannot beI rate and on the refunded at t hi-. latesame dav with same " c.tllye,"

,,_~ , , , Counter f'arty but for

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tic:kAt. Thl.. h:1t;resulted Into Illyller Irecovery of itransaction fee. IThe transaction feet;rate was reduced on23rd May 2002 withretrospective effectfrom pt April 2002.(Refer letterNo.Tr/PM5/296 .dated 13'" M.ly I2002). At:, a resu!J.o(,above retrospective Ieffect 58I made a,refund of Rs. I5,12,060 on account'of excess feec;;dlnr yeti f~l1lllt!r.However whitecalculating the Irefund amount 5BIhas not consideredservice tax @ 5% on Iexcess amount .m(unded which I0"1011111'1 . 10 P'" I)5,003. I

The 581 (back office) I The matter is beinghas neither received ~taken up with theTD5 certificates nor i higher authorities ofrefund amounting to I respective CompaniesRs,.99, 68,738 of i for . .obtaining TD5which Rs. 51,30,456/1 certificates.pertains to SAIl. Asinformed the followup for the same isnow been done byRegional Provident ICommissioner Office INew Delhi is IlOW r

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As per the practice [Out of the 24 casesfollowed by SBr r pointed out by the(back office) the! Auditors incentivesincentives are i have been received inaccounted as & 11 cases. for thewhen received. remarrunc follow up

being made.I i. There is a

Iconsinf>filhlp dpl;,yin reteipl 0'Incentive III ~Jcases as comparedto the date ofinvestment made.

Ii. Incentivesamounting to Rs.3,30,93,000 for yearunder audlt areoutstanding asverified by us on 1i"

I June 2003.Iii. An old system

Idoes not qenerate tile

, Incentive receiv(11)j(>

I

111p C;tr.,hll·; C;Y';lpfl)

UP r H" " Ip " l h r:'Inconllvl'" r(~u!IVtlbl(!report. Follow up inregard to outstandingcases is beingmaintained.

'('JHII t, i.·, ~.l/(II(1«!ld I'.

not provldf'd 111 Ill"

~y·,I"nl.· In tlI".,11',('"1"of willi II 11\1'follow "I' or Ih,' ',,11111'

1!"(Olll'''; d ," II 1111.v . 1\'; expl,,'rll'd III

us the incentivereceivable in case ofState Development

I loans cannot be

Idetermined ill

f------I---- __advance./. II Is OIJ••i'rv(·t!

I ~I~~:s III '~~:~ of ~~:

I Interest is not receivedfrom the issuer. Total

1{('lllindersrcqular ly sent to theissuers. However, assuggested by theAuditors focuccedOver Due Outstandino .

up to 31st Mar 2003 j; I attention WI" be gIvenRs.3,66,70,514.88 ' for hiqh valueThe auditors further; outstanding.reported: "We havenot consideredoutstanding overdue interest amountless than Rs. 1000 &outstanding periodless than 2 days.

, --'-- ~a_ty!d_ay_s/_S und ays _

". ;-"f I ~

S8I s:tl~uld monitorincentive

:'J I:receivable through,Stra qu~ Systemand :i:: Iurntshmonthfy report toEPFO.: .: SBl should

. ~ .f'

ensure timelyof/('("OVf,/ Y

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fv1ilXfliHifll over due. ,~·r~ .rn.tere;SI~!',' IS onaccou'ntof pending

t,'I'1

debt; r¢structuringof I~~I. Smallerarnounts are notlikefy,!-i.: to berecei~~,ple andmayBg on account

'i"',"of p09~.,al delays /holid~~S / clearinglime. i-:~!31 may beadvis¢p to focuson :J:, amountsexceeding Rs.5000~/~

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Ignored. )(I) On VClifl«llioll of I (i) r houqh 110 idlethe "Dully fUlltl flow fUlltl~, dr(~ to l)t~ kept

I statements" we have I ill the dllOUIll'. thenoted down the days i market dynamicson which even force us to hold on Lathouqh funds <lie the Iund« until wo net(1VllilllLJj(~ 110 " Iwtt"r oppor tuntt yinVI"".tIlH'nt'. 1l."lVI· t for invc".tfll'·f11,bp(>n made which!results into idle I (ii) The lacunae in thefunds. For the I present system haspurpose of our been taken care of byAnnexure we have Strabus,considered minimumbalance of Rs 50,lacs. I(ii)On the Iverification of fund f

Iflow statements for;a" accounts we have!observed that thei ~;y~.lerll pr intout I

! showc thp (lifff>rPllu' iI b - ,etween prevrous Idays closing and Inext days opening I

! balance form 18th~

I Feb 2003 onwards.;

IHowever if the same ',',is viewed on the

I system there is no!difference is ~

\observed. Also the f

above discrepancy is icontinued till 31·,t f

M.lre/! 7001.No I'.i"ltI·.t.HluIY I

I '·Xpl.lrl,llitHI w.r-.'-- -'--_._Lg!~e-'-~J()!~.!.b....~_saIIIe._

SUI be advised to',trivd Ilu/tler forJJtllkillY Iunds IIITreasury Bills,FDRs.· and in Repomill kel to avoididlir!'iq( fUII(h.

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------~---+-""'-'------~---~---~---- -1,"" SBI has No comments.prescribed the.~C/:uorum forIauthorization ofinvestments to bedone on behalf ofEPFO. As per whichthe investmentabove Rs.l0 Croresshould beauthorized byquorum of 3members. Howeverin 25 cases theinvestment aboveRS.10 Crores havebeen authorized byquorum of 2rl!W!mbers.

1I.\I.i; In some casesa&' referred to in thej~Q\t.JnterParty Dealc¢~1llfirmations and'/(:H-bker notes werehot available.

\ '.: ::~ii. c.~ In some casesthe maturity dates,Lt'interest dates, dealticket number and

__'(rl1~~_ O'ield to

In case of SDS 31dated 2nd Dec 2002for K.R.Mills EPFtrust, the amounttransferred as perAnnexure 8 is Rs.54,285. However as perthe 5DS passbook ofSyndicate Bank OfMysore the balanceof Rs. 53,498 isshown. Thus there isexcess transfer ofRs.787.

\ ..'~' •...

Presently there is nopr;actice to receive

"j"any confi rmationa;Q~jlable for the SDSb~l~nce available~"j;thRBI.

l..-...• . .._~L.. _

We have taken up thematter with SyndicateBank.

IThesB!i---(backoffice) should giveyearlyconfirmation ofSDS balances outof its ~ooks ofaccounts.]

SBI be advised tocomment onauditors remarksand show therecords to auditorsin the next year.

MJturity) wereeither not enteredor wronnlv antaradIv. 111 (HIt' (d',I'

Investments notewas not available for;our verification.v. In 2 cases dealticket reference WJS i,not recorded 011 thf' IIlIvc·.I,nnlll 11111,'";ill III t If" II P tI. "" !tickets could not b(l!traced. IvI. In certaincases the details, i

. !as per Investment ~note and (/,',dtickets were notsame.

vii. Some of theinvestment notesand deal ticketswere cancelleddurlnq tile Pfll iod hIlt

tile reason (01cancellation was notmentioned on the

f-- --+__ -+_=-sa=...:.m..:.ce=-.. ._.~ . .. . ...__.. _i. We have ..We have taken up theobserved' that even' matter with the111011</11 111(' V",jcHI'; ~ r;I",h,,'. ',y',IPIIIII'POI t- .I'" plUvld,'I" ItH cjI'lIlnqavatlable in the the desu ed repor tsReport module, ,I from the system andthey are not' t/l(l';(" '(lpo,t·~ ~H(lnowgenerated Ir om ~ lJeinq O('llrraled.Iront end. A', ;Inel: I fOI'/I'VI'r till' o,.""CWIH~1l reqllirl'(j ',W II I,ll" bl'ill<) ',ul»l'ct turopor t s ,1/(1 ',rllJtiny .'lnd (10',';

qf'nPliltf'd fr orn (111'( kinoOllCk end by i

,

33 & 34/ 17.0.

~;y',l,~tllAdlllini',ll at or . Alsothe comptctcnc s« ,and reliability of therf'flort are not yf't',d u',r clllur flyestabhsned. Tile(;1'1 (ll.lC~.<,tlOlJld try

_.._~_._fallo\"i nq

Offll.')to (j I'treports

\V.~ h.iv«: ."'/'eldyldh.en up lIle ,nalle,I'nth NSDL farpr ovrdiriq t hr: ffleeVcl!tJ(l in 111(l (IflrTli1t

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of documents. Thiswould facilitatemonitoring overpending cases foracceptances.It is also observedthat the registrationof ';f'cwitiP'. Llk,··.considerable timewlle'r rill ti,e' Itltrr r·.!or matui rtvproceeds dueremain untracked.Thp(OIllPIlIf'1 il,lt rnn ofIII r "..,III c: \ '/l) LJ Id ;track such cases for

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when required. .b) SBX be advised to take requisite action iasstated in

the auditor's report arid pointed out above asrernarks of EPFO.

Mt'ltt"r Is plt'lct'ld COIl~lctt'l'nrton of fIOI'Hlc'f' 8.Investment Committee.

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AgeQdaitem; '0Worlsinq of Special Reserve Eun~and~Qropgsedreylsed conditions for

release of amount frOIDSRE .

Present Status. Conditions·

1. A Special Reserve Fund was created on 15th September 1960 out of theReserve and Forfeiture Account of the Fund to help outgoing members ortheir nominees theirs, where an employer fails to pay the whole or part ofthe provident fund contribution due to the fund. The assistance from thisFund is regulated as per the provisions contained in the Manual ofAccounting Procedure and the decisions taken by the CST, EPFfrom time totime.

2'. The spectat Reserve Fund is operated upon as an imprest and as soon as thearrears against which payment c'has been made from the said fund arerecovered from the employers, such amounts are paid into the specialReserve Fund.

3. Consequent to the deletion of the provision to effect forfeiture of employersshare under the provision of Para 69(3) of the scheme, with effect from

. 1.1.1990 there is no additional receipts to the reserve and forfeiture accountthe amount standing in the forfeiture account was therefore transfer red tospecial reserve fund.

4. In all the circumstances in which the accumulations in the employeesprovident fund are payable 'to a member or his nominee their underparagraph 69 and 70 of the employees provident fund scheme, the amountis paid to the member or his nominee/heir, as the case may be, in one lumpsum from the special reserve fund subject to the following provisions andthe instructions issued from time to time.

(i) While, making payment from special reserve fund, interest at the usual ratesmay be paid notwithstanding the fact that the damages have not beenrealized from the employer.

(ii) Interest paid to the members may be debited to the interest suspenseaccount as and when the payment is made.

(iii) Payment may also be made from the special reserve fund of the employees'share deducted from his wages but not paid by the employer to theemployees provident fund in respect of the member who leaves one coveredestablishment' and joins another covered establishment and his Providentfund accumulation become payable to him subsequently owing to retirementor death or any of the circumstances mentioned in paras 69and 70 of theemployees provident fund scheme. Payment from the special reserve fund ishowever to be made only in respect of the amount due from unexemptedestablishment.

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-~ (iv) No paym~nt from the special reserve fund may be made towards arrears ofpast provident fund accumulations, if they relate to pre-coverage and whichhave not been deposited in the employees provident fund.

(v) Pay":,ent. from Special Reserve Fund is allowed even to meet the voluntarycontribution of the employee (.in excess of the statutory contribution)defaulted by the establishment.

(vi) The amount to be paid from the Special Reserve Fund should be actualamount due to be paid to the member concerned. Subsequently if theamount is recovered from the employer, the actual amount paid fr~m thespecial Reserve Fund should be credited in the fund.

(vii) The actual verification of the amount of employees share of contributionrecovered from wages is essential before any payment is authorized out ofthe Special Reserve Fund. For this purpose the receipt of Form 3A(contribution card) should be ensured so as to ascertain the amountrecovered every month from the wages of an employee. In case the Form 3Aor a certificate from the ernptover furnishing the details of recoverieseffected from the wages of the employee is not forthcoming, the assistanceof the area enforcement officer should be sought for furnishing the extract ofwage register of the member concerned and payment out of special reservefund should be authorized after ensuring the recovery of contribution fromthe members' wages and non deposits by the employer.

(viii) In order to regularize fraudulent cases where payment of provident fund dueshave not been made to the rightful claimant such payments due to thegenuine claimant may be made out of the Spedal Reserve Fund.Simultaneously action should be initiated to recover the amount and itsrecovery should be watched for re-coupment.

(lx) Before releasing the amount from special reserve fund, the approval ofRegional Commissioner/Officer In-charge of Sub regional Office should beobtained. A register to record the payments from the Special Reserve Fundand its recoupment is to be maintained.

(x) As the Death Relief Fund was merged with special reserve fund w.e.f. 1.4.95the benefit of Death Relief Fund is to be met from S.R.F. only.

5. The Central Board of Trustees in its lS0th meeting held at New Delhi on 6thMarch 1999, after detailed deliberation decided as under:

i) the employers share which is in default may also be paid to theemployees /nominees /heirs out of the S.R.F. in respect of the followingcases:

a) Establishments which are under liquidation,b) Establishments which are continuously closed for more than threeYears.

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C) N.T.C. Mills (pre-take over/pre-nationalization period).

ii) Money order commission for sending payment through money orderupto Rs. 500/- are required to be met from the S.R.F.accounts.

The total payment during a year from S.R.F. should not exceed theinterest earned on the fund during the year.

Since the payment from special reserve fund is to be restricted to theinterest earned on the funclsstanding to the credit of special reserve fund ason 1st day of each flnar nal: year at statutory rate for each year, CentralOffice should calculate the quantum of interest that can be earmarked forexpenditure from special reserve fund. The amount is then allocatednotionally to each region for its utilization in Regional Offices and SubRegional offices on the basis of requests received from them. The R.P.F.C.(Finance and Accounts) shall keep. an account of the utilization of S.R.F.amount and its recoupment and furnish a monthly return to ensure that thetotal payment does not exceed the prescribed limit on yearly basis.Simultaneously, the R.P.F.C. (F& A) should ensure timely action by RegionalOffices to recoup the fund drawn from special reserve fund.

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6.

7. FINANCIAL pOSmON....i

The financial position of SR:-"from 1997-98 to 2002-03 is given below:

Rs. In lakhsAmount paid from

SRF Amount InterestYear For DRF Defaults Recovered during Accrued on Balance in

& M.O. the year SRF SRF

Comm.1997-98 1.19 132.21 .73 5120.73 46592.16

1998-99 1.36 3154.67 - ~5734.54 49170.66

1999-00 4.02 374.95 14.12 6421.72 55227.53

2000-01 .25 224.18 .32 6741.82 61745.25---'-'

2001-02 1.87 291.56 145.63 6333.36 67930.81

2002-03 1.50 206.82 6.9 6930.36 74659.79

8. Although existing procedure to sanction the amount out of Special ReserveFund requires action under Sec.7A for assessment of dues, under Sec. 8 forrecovery of assessed dues, under 5ec.14 and 14A for filing prosecution,under Sec. 406, 409 of I.P.C. for non-payment of employees' share ofcontribution but practically action taken in the above lines have not yieldeddesired results for various reasons such as the establishment concerned isclosed/under Ilquldatton, whereabouts of the Employers not available, legal!recovery proceedings are staved by courts etc.

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9. As the interest paid to the members is debited to the interest suspense

account and not to the ~iecial Reserve Fund recoverable from the

employers, the real amount recoverable from the employers' is very high as

compared to the figures indicated above. For example:

•..• ""rt'A requisition recently received from a region requires sanction of Rs. 3.65

crores from Special Reserve Fund for the period of default from 9/1989 to

6/1996. The amount to be allotted from SRF may appear as small but the

interest from 1989-90 to 2002-03 will be approx. 6.53 crores which will have

to be debited to Interest Suspense Account.

A requisition recently received from another region requires sanction of Rs.

5.13 Iakhs from Special Reserve Fund for the period of default from 1965-66to 1971-72. The amount to b~!~allotted from SRF may appear as small but

the interest from 1965-66 to 2002-03 will be approximately 1.3 crores which

will have to be debited to Interest Suspense Account.

10. Recovery of Interest under Section 7Q and Damages under Section l'~S is

very remote when the con.ributlon itself is remaining in arrears. Thu;5\

Interest Suspense Accour., is debited by huge amounts without

replenishments by way of Damages. Proper investigation and verification

before release of funds for a defaulting period as old as 20-30 years from the

date of default/closure of the establishments, is practically not possible. It

becomes very difficult to identify even genuine subscribers. Chances for

fraudulent claims also arise.

11. Recently the Legal Advisor has opined that the SRF with CST cannot be

utilized to pay the amount i, default in respect of exempted establishments.

Accordingly a circular has been issued to all field offices. Copy enclosed at

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12. In view of the above, the comnittee may consider the following;

(a) The requisition received in Head office for allotment of SRFafter a period of

10 years from the date of default/closure of the establishments may not be

entertained and in other cases funds may be released from Special Reserve

fund after obtaining proper justification for the delayed requisition for

release of funds from S.R.F. However, requisitions of funds from Special

Reserve Fund must meet the criteria laid down by Central Board of Trustees,

Employees' Provident Fund Organisation as indicated in the above paras.

Further funds will be released ( ,Iy after requisite actions are taken against

the defaulters under Section 7A, 7Q, 8, 14, 14A, 146 of Employees'

Provident Funds & Misc. Provisions Act, 1952 and under Section 406 and 409

of Indian Penal Code.

(b) Amount in default for the period prior to cancellatton of exemption will not be

paid from SRF.

(c) While settling the claims out of Special Reserve Fund only the contribution in

default will be .peld out of SRF. Interest on this amount will not be paid as

Interest Suspense Account IS getting charged to the disadvantage of

establishments and members whose contributions are regularly received.

Tne regularly complying establishments and members are in effect being

burdened with the cost of non-compliance by certain establishments and

members.

(d) The corpus of SRF as on 1st April of the Financial Year be freezed. The

interest earned on' SRF & available as on 1st April of the Financial Year be

utilized for payment of DRF, M.O. Cornmlsslon and amount in default as per

Manual of accounting procedure. The balance interest available at the end of

the year may be transferred to ~hecorpus.

(e) In order to help field offices to pay DRF and MO Commission, a sum of Rs.

25,000-1,00,000 may be allocated to each office at the beginning of the

~ financial year. In all other cases fieki offices may make payment out of SRF

\, only after allotment by Headquarters.

The proposal is accordingly put up for consideration of the

Committee. ' Necessary, amendments in the Manual of Accounting

Procedure will be made in accordance with the decision of the Committee.

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EMPLOYEES' PROVIDltNrl\FUND .ORGANISA TION, (Ministrv of "'bouri~.GOvt.~OfIndia)

. .Head Office ,...Bhavishya ,Nidhi'Bhawan,'1~.'.Bhikaiji Cama Place,

. NewqelN~t19 066 ~!

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Sub: Allocation of funds out of SRF to defa~tiD&establiShments - Manual ofAccoUntinl procedure- Clarification ~,Reg. '

Sir, ' : JLr'~~'..: ' ,,'I ~H·t;jEki:;;.. .,r ' , "

Please refer to the Provision~ relatiJ)g :iO<SpeCialReServeFund in chapter 6 of theManual of Accounting Procedure P~-II-A.!&.'1I-B~ A plain reading of Paras 6.3.1 (vi) and6.3.1. (vii) leads to ambiguous imerpretationon'theissue of payment to employees of theexempted establishments out of the "Special Reserve Fund" maintained by the CBT, EPF.

Para 6.3. 1,(vi) of the ManuM of Accounting Procedure, reads as "Payment from theSpecial Reserve Fund is however, to be made only in respect oftbe amount due Iiomunexcmpted establjshmen~'

Para 6.3; 1 (vii) of the Manual of Accounting Procedure reads as "payment fro,mtheSpecial Reserve Fund. however oo",mad.ein the C/lSC of an employee of an exempted=::;:=~n!f:::::~. ~f his=x: and not paid by the employer before

,l . .' I ~,~~.f(',', ': .. In view of Para 6.3.1 (vii) oftheManll:8l of Accounting Procedure Pan II-A & I1-B,assistance from the Special Reserve FWldis made available to the members of defaultingexempted establishments, after cencedation ,oflhe exemption.

it ,".; {.; t~~~:~'However the legal advisor has opined, •that ~tbe S~I Reserve FUDd with tbe

CB.T. ;s JlsepJlrate fund over wbich exempted astllbJisbmeDu bJlve DO c/Jlim or snylegal relatioDsbip JlDd beDce the SpeciIlJ'ReserreFund CHDDOtbeutUized for lisbillties. of tbe Exempted Trust" in If'" .,'

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(,\'l'JRUDH RAI)· FF~cial Advisor &Chief Ac.'ounts Officer F

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Hence on the basis of the legal advice obtained, it is clarified that "'no assistancefrom the Special Reserve Fund should be made available to the employees, for theperiod ·ofdefault when the establishment was enjoyinl esemption, after cancellation ofthe esempti.on". All ROs I SROs are accordingly advised to keep in mind the aboveclarificationwhile sending any proposal to the Head Quarters for sanction of any am["<f.ntout of SRFmaintained by CBT, EPF. i -,

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Copyto:1.ACC-CempliancelCoordinationlExemption

rr (' Item No. 11:-Default in payment of outstanding interest due on

belated maturity proceeds of investments of funds ofr CST, EPF in PSIDC ponds('

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The Employees Provident FundOrganisation administers the statutory PF

and Pension schemes established under the EPF&MPAct1952. The funds ofI"':these schemes are invested in Public Sector Undertakings/financial

institutions in accordancewith the pattern of investment notified by the Govt

of India. The investment of these funds is made by the State Bank of India,

Mumbai in its capacity as the portfolio manager of the funds of the CBT,EPF.

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In accordance with the norms ftxedfor investment of funds of CffT, EPF

in securities issued by PublicSector Undertakings/Financial institutions I SBI

had invested funds of CBT1 EPFin various securities floated by the Punjab

State Industriat Development Corporation Ltd (PSIDC). There has been a

delay In crediting the maturity proceeds of some of these securities

in the EPFO PF (Ale 05) and Pension(A/c 11) accounts maintained

with 581, Mumbai. Details of these securities and delay that hasoccurred in

each case are given in Annexure I.

The Punjab State Industrial Development Corporation Ltd (PSIDC) is

now liable to payto EPFOoutstanding Interest accruing onthe delayed period

of credit of the maturity proceedsof the above referred securities into EPFOAccounts No 05 and 11 with 5BI Mumbai. After protracted correspondence

with PSIDC regarding payment of for delay and penal interest applicable,on .

account of delayed receipts, PSIDC has finally agreed to payment of

delayed period interest @8.S% towards full and final settlement of

the issue. Copyof PSIDC"sletters NosPSIDC:ACcrS:341&334 in this regard

areplaced at Annexures II &. III.

Matter is accordingly placed before the Finance &. Investment

Committee CBT, EPFfor consideration of the above request of PSIDC

regarding full and final settlement of the dues accruing to CST, EPF

on account of delayed maturity proceeds.

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('Item No. 11:-Default in.pavment of outstanding interest due on

belated maturi tv proceeds of i"vestments of funds ofCBT,EPF in PSIDC Bonds

The Employees Provident FundOrganisation administers the statutory PF

and Pension schemes established under the EPF&MPAct1952. The funds of

\'~these schemes are invested in Public Sector Undertakings/financial

institutions in accordance with the pattern of investment notified by the Govt

of India. The investment of these funds is made by the State Bank of India,

Mumbai in its capacity as the portfolio rnanaqerotthe funds of the CBT, EPf.

In accordance with the norms fixed for investment of funds of CBT, EPFI

in securities Issued by Public Sector Undertakings /Financial Instttutions , SBI

had invested funds of CBT, EPF in various securities floated by the Punjab.

State Industrial Development Corporation Ltd (PSIDC). There has been a

delay in crediting the maturity proceeds of some of these securities

in the EPFOPF (Ale 05) and Pension(A/c 11) accounts maintained

with 581, Mumbai. Details of these securities anddelay that hasoccurred in, ,

each case are given in Annexure I.

,The Punjab State Industrial Development Corporation Ltd (PSIDC) is

now liable to pay to EPFOoutstanding Interest accruing on the delayed period

of credit of the maturity proceeds of the above referred securities into EPFOAccounts No OS and 11 with 5BI Mumbai. After protracted correspondence

with PSIDC regarding payment of for delay and penal interest applicable on

account of delayed receipts, PSIDC has finally agreed to payment of

delayed period interest @8.S% towards full and final settlement of

the issue. Copy of PSIDC"s letters Nos PSIDC:ACCTS:341&334in this regard

are placed at Annexures II 8t III.

Matter is accordingly placed before the Finance 8t Investment

------~·---eomnl'ittee·C8T; 'I!PF forconsideration--of~above ·request·ef'- PSI9G··

regarding full and final settlement of the dues accruing to C8T, EPF

on account of delayed maturity proceeds.

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Annexure - 1

Details of Outstanding Interest Due on Belated Maturity Proceeds of Investment of funds of CBT in PSIDC subject tofinalisation as per portfolio managers record

Due Date of Maturity proceeds credited Face Value & Delayed Overdue interestAlc Particulars Code No. Maturity Amt~ period in cP 8.5% (approx) Remarks

M.aturity to account of CBT, EPF*No (Rs.) days (Rs.)

STG16-8-2002 Part Maturity 5,000,000 78 90,822

5 12.15% PSIDC 2002 821053 30.5.200216-9-2003 Balance Amt. 20,000,000 477 2,221,644

11 19-8-2002· Part Maturity . 5,000,000 81 94,315f-- 12.15%PSIDC 2002 821053 . 10.5.2002

14-9-2003 Remaining Amt. 10,000,000 472 1,099,178

11 12.25% PSIDC 2002 821047 30.3.2002 16-9-2003 Final Maturity 5.0,000,000 535 6,229,452\

9,735,411

* Subject to adjustment of cheque clearing time (if any) as per records of Portfolio Manager, State Bank of India.----",--

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., NO:PSIDC::':t,CCTS: ·Si., I rApril 19.2004-rr: C

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~PUNJAB STATE ltiRYir~J~.L'F;-~i!':'DE'VELOP fll1ENT'CtiRI~CfRATfoN. '

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CENTRf\L BOA.RD OF TRUSTEES,EMPLOYE~S PROVIDENT FUND - NC PENS10NFUNDS8I,EPFO,SECURITIES SERViCESBR.,2 Fl.,BOMBAY MAIN BR,8tDG.BOMBAY SAMACHR MARG,'BOMB.AY· 4QO;,Q2,~"';'"

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( I Sub: Payment of delayed period lnterestonyour lnvestrnent'tn PSIDC bonds

( , t. J\s you are aware, PUI1)\:,b St('lte lnduslrla! Development Corporation LtcJ, 'v'/i'lf',

incorporated in 1966 as an undertaking of the State Govt. to act as a catalyst for thedevelopment ef large afrj medium scale industciesin the State of Punjab. The Corporationnow combines in itsel{ the role of an institutipnat" entrepreneur, a .financial institution and afacilitator [::r industriaIW:)\,lth'oi Punjab. '''F

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2. . Till rew years back, the corporation IoVpS making timely payments, to its lenders and

thus, 'enjoyed exc~Uent: L,re. dibility, withtD,er;n. (f..~r~~pp~.~h...,.Q.~.~~~~'.ha.,.'Ie,. reposed faith in ~SIDCand have beensubscnblr,g for tne CorpOraf)0n-rSi~tilind~:.f~om :t(llle to. time. However, In therecent past, PSIOC has laced resource cfu~ch'dueto· 'certain factors beyond its controlresulting in delayin P18'?ling its fil1anc;alccornmilments to the bondholders. f,s soon as ;\sliquidity position improved, tre Corporation promptly cleared the overdues including interestIJP\o the cue.catesot redemption.

3, The matter regarding payrnentof interest for the delayed period has been underconsideration of the Corporation tor quite some time. Since the interest rates are continuouslyfalling and with a view to maintain credibinty wilh the investors, it has been decided after duedeliberations, to offei'de1ayed period interest @Q\5% p.a. {interest applicable on the recentlyc'osed bond issue of the Corporation which h~~.'9.:.\1en,fuUy: sups,qribed) instead of the couponrate from the due date of redemp~ion.tilt tt,et~tv§H:!ta,!e9tJ~d~mption Qfjb.onds. The rate onth;: previous" bonds iss!J:: W8.5 Irxed in consultation with the arrangers and advisors to thei~;~lue'.~~Jed t~&l$end:.~y~!d~~W~'H~~len~{,·...~J1,e.~i~'\iela)·edperlodinterest '._@~~;rtl/o,t9}~~rq$\,;fXIIJ!&fin8r~eHlef:rl'~Rntr yoJ¢~M~~pht~~tjfi',..:t~~ta,ng~mentfor payment could,'be made. -

Thanking you,

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Yours faithfully,/, ,/

/.- 'I'.' '/''-i (S,K.Ahuja)if'i Dy.Generat Manager(Accts,}

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rPUNJAB ST~TE INDU$Tf:UAL

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DEVELOPMENT CORPORATION' LTD.(A STATE GOVT. UNDERTAKING)

Regd. Office: Udyog 8hawan, 18 Himalaya.Marg, Sector 17, P.Box No. 81, CHANDIGARH~ 160 01'7 (IN'DIA). 'l~(!TSTERElJ .' NO:PSlqC:ACCTS: /~.'~ L,

. April 19,2004.:~-.(

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CENTRAL BOARD OF TRUSTEESEMPLOYEES PROVIDENT FUND Ale 9STATE BANK OF INDIA, EPFOSECURITIES SERVICES BR.,·IIND FlOOH,BOMBAY MAIN 8RANCHBOMBAY SAMACHAR MA.RG - 400 023

Dear Sir,r:

l Sub: Payment of delayed period interest on your Investment in PSIDC bonds

[

As·tou arc ~W;);\). Punjab .3lit!0 Industrial Development Corporatlon Ltd. WiJ5

incorporated in 1966 as an undertaking of the Slate Govt. to act as a catalyst for thedevelopment of large and madiurn scale industrln the State of Punjab. The Corporationnow combines in itself the role of an institution" .ntrepreneur, a financial institution and afacilitator for industrial gro'N1h of PUiljab.tFt~~,.~ : .'

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2. Till few years b2C;~, the corporation was,~Rjng .tlmelypayments to its lenders andthus, enjoyed excellent c.edibility with them. T!\e'lrQlldholder-snave' reposed faith in PSIDCand have been subscrib;~g ror)he Corporatlon'sbendsIrorn time to, lime: However, in therecent past, PSIDC has fa():;~iesou(cecitJnch due to'> certain factors beyond its controlresulting in delay in me,-"ting itsfin~nclal commltrnents to the bondholders .. As soon as itsliquidity position unprovec, the Ccrporation piornplly cleared the overdoes including interestupto the due dates or redemption. •

3. The matter reg8rding payment of lnterest for the delayed period has been underconsideration of the Corporation for quite some time. Since the interest rates are continuouslyfalling and wiih a vrew to mai:',\c::n credibility with the. investors, it has been decided after duedeliberations, to offer oeiayed period interest @ 8.5% p.a. (interest applicable on the recentlyclosed bond issue of fhe Corporation which has beenfully subscribed) instead of the couponrate from the due date or redemption till th\:actuat d~e_.2f redemptlonc' ponds. The rate onthe previous i)on<:J5 issve \"Ia~ ill.cd in cC"'~'Ji~tion;with the arrangers and advisors to theissue. You are requested to seed your \u·,.ittefltcuilse~J..for payment of delayed period interest@ 8.5% towards full & fii'ClI s?!.ifernei1t of YOUI', .ccount so that arrangement tor payment couldbe made.

,.Thanking ycu, 'i ~r- '.r •. ~_:~.~: ~··::··"I··"77.---~··-~l . -..' - .

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~)····l·fl·J::~yYours faithJully,

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. I····i .' .,I-II (S.K.Ahuja)lDy,General Manaqer(AccIS.)

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Telephones : EP!'-.L'lX . 102381-84 Fax: 9'1-172-704145 Gram: 'PUNCORP'E-'",lail . psi(!-.''''sar.ch81·.c:Lin pSidc@chd,nicin

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~H~~)cn~"~I, (~I~r I1\iI(iU), '~<J~~~~"ell 'lN~.~ WiltfR surf, ~i{ - 400 023.::~I,. ~~Wrr~JRil,(~Jj~), ~~J~U1Rlll'llCR.

•., .• " ,.!fcr~ ~'1fiINIfIrf, ~ - 400023.. 1 SecurlllN ServicesBranch.(2ndf:loor)-, Mumbal Main Branch Bldg.,

Mumbal SamaChar Marg. Mumbal - 400 001.

aN / Telegram ·SECSERBR~·. Mumbal~ w./Tel. :022-2267 6896/022-2261 1528

r: r Wm/Fax 022-2281192"022-~1032

Th R· . I P ld t F d Coo ~ te w./er. Code No.9277 SBI-I. P.No. 103438e eglona roVI en' un ommlssloner . <,. ., " ~.Employees Provident Fund Organisation, .14 Bhikaji Cama Place,NEW DELHI 110 061

L\ill. ~I No. PMSlEPFOI ~/~/Oate 25TH JUNE 2004.

Dear Sir,

DEFAULT IN PAYMENT OF lNTERfotr AND MATURITYPROCEEDS BYP .S.I.D.C.

With reference to telephonic talks undersiqned had with you .today, we forward .herewith a statement showing a position of overdue interest in respect ofinvestments of EPFO in PSIDC Bonds: The bonds ..ynderSecurity CodeNo.820005 - 13.00% PSIDC Bonds 20G1 were rolled over and' converted Into'11.74% PSIDC Bonds 2001 First Series. However, PSIDC had delayed paymentof interest on these bonds by 221 days. The matter is under constant follow-upwith PSIDC, without any response from them. We may .furtheradd that there is nooutstanding maturity against the PSIDC. We are endorsing a copy of this letter toour Treasury Department, Corporate Centre, for theiradvices.

Yours faithfully,~..

DY. GENERAL MANAGER.

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Over due InterestFromOl-Apr-2001T 025-Jun-2004

CENTR...-ll BOARD OF TRUSTEES,EPFRille

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Page 1of:26-JUN-2004 11:4(

AccountCode

Delay·Period

SecuritY DescriptionCode

Face Value(Rs.)

Interest Amount Due(Rs.) Date

~Client: Ep·.Issuer :. . PSIDEPFb~1.\l~ 820005EPFO~L-\l~ 820l)v5EPFO~l\C\ 8:!O()05EPFO~1.\I~ 8200(15

Central Board OfTrustees,Ep{

PUNJAB STATE INDUS .DEV. CORP'13% Psidc :!OI::!13%Psidc 2(1\'}13% Psidc 2()4)113% Psidc :!(\OI

13.001.3.00

13.0013.00

Issuer wise Total:

81,02.740,,:00 30/06/:001.#?s, ' 81.?,M;81.lll) 30/091:001 :.

.81..:!5,OOO.(00 03/11/:001'53.20:205 .•» 06/03i:002-------::-:---2,97,39,726.00

25.00,00,000.00 ."23.00,OO.()()().oo.....25,00,00,000.00

2,97,39,726.00

2,97,39,726.00

CreditedDate

OverdueInterest (Rs.)

Client wise Total:

Total:

16/0-/2001 16 53,278.:912/H/fOOl 43 1.44,738.5:-11/03/2002 128 4,2:-,39-':611/0312002 5 10.931.93

6,36,366.33

6,36,366.33

6,.36,366.3~ ',',

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Over due InterestFromOl-Apr-2002To2S-Jun-2004

Account Security Description Rate Face Value(Rs.)

Interest Amount Due Credited Delay

Page 1 of 1i6-J{;X-200~ 11:3~ I

Ove'rdueInterest (RS.)

CENTRAL BOARD OF TRUSTEES,EPF

Code Code

Client: EPIssuer: PSIDEPFO:-'L \1::\ H20045EPFO:-'L '\1::\ 8:0,)45

(Rs.) Date Date Period

Central Board OfTrustees,Epf

PUNJAB STATE INDUS .DEV. CORP11.74";,Psidc Bonds(:;O<)\) l sr Series

11.74u'"Psidc Honds(:(<t)\) l st Series11.74.11.74

roo.oo25,00,00,000.1))

1,-:"4,51,477.00 14/11/:;0022.93,50,000.00 18/0111003

4,68,01,477 .00

20/11/200207/10/2003

6 39.4~.43221 :;.!.41.710.93

24.81,127.36Issuer wiseTotal :

Client wise Total : ,

Total:

4,68,01,477.00

4,68,01,477.00

24,81,127.36

24.31,127.36

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EMPLOYEES'PROVIDENT Ftf~iDORGANISATION · 2015-12-17 · 11. Reviewof Investment Pattern...

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