A STUDY ON SOCIAL SECURITIES OF SUPER ANNUATED EMPLOYEES OF NALCO LTD.

A project report submitted to Utkal University in partial fulfillment of the requirement for the award of the degree.
MASTER OF FINANCE AND CONTROL

Under the guidance of: Director:

Project

Submitted By: Roll No: University No:

Affiliated to Utkal University KIIMS, Pira Bazar,Vanpur CUTTACK

CERTIFICATE from Principal This is to be certified that the project entitled A Study On Social Securities Of Super Annuated Employees Of NALCO Ltd. Submitted by Shubhalaxmi Das of KUSHAGRA INSTITUTE OF INFORMATION AND SCIENCE (KIIMS) towards the partial fulfillment of the degree of MASTER OF FINANANCE AND CONTROL is a bona fide record of research work carried out by him under the supervision of Partha Sarathi Senapathy. The content in the record is full or in part has not been submitted to any other institutions for award of any degree or diploma.

Date : Place:

Principal KIIMS

CERTIFICATE from HOD

This is to be certified that the project entitled A Study On Social Securities Of Super Annuated Employees Of NALCO Ltd. submitted by shubhalaxmi Das of KUSHAGRA INSTITUTE OF INFORMATION AND SCIENCE (KIIMS) towards the partial fulfillment of the degree of MASTER OF FINANANCE AND CONTROL is a bona fide record of research work carried out by him under the supervision of Partha Sarathi Senapathy. The content in the record are full or in part has not been submitted to any other institutions for award of any degree or diploma.

Date : Place:

HOD Dept. Of MFC KIIMS

CERTIFICATE from Internal Guide

This is to be certified that the project entitled A Study On Social Securities Of Super Annuated Employees Of NALCO Ltd. submitted by Shubhalaxmi Das of KUSHAGRA INSTITUTE OF INFORMATION AND SCIENCE (KIIMS) towards the partial fulfillment of the degree of MASTER OF FINANANCE AND CONTROL is a bona fide record of research work carried out by him under the supervision of Partha Sarathi Senapathy. The contained in the record is full or in part has not been submitted to any other institutions for award of any degree or diploma.

Date : Place:

Internal Guide KIIMS

ACKNOWLEDGEMENT
It is with profound gratitude that I express my sincere thanks to Mr. J.B. Padhi, the Secretary and all other faculty members of our college for their constant encouragement during the course of my study. I sincerely express my deep sense of gratitude to, Jayanta Kumar Bihari Head of the department and for guiding me in completing the project. I owe my sincere thanks to Mr.of NALCO LTD. without whose

able guidance this project would not see the light of the day .I am indebted to all our friends for their encouragement and support rendered for their successful completion of the project. Lastly no words can express my debt gratitude to my parents and thanks to all my relatives for their cooperation.

Shubhalaxmi Das Roll No.-

DECLARATION

I do hereby declare that this Project A Study On Social Securities Of Super Annuated Employees Of NALCO Ltd.is an original one done by me. This is submitted as a part of fulfillment the requirement for the degree of Master of Finance and Control (MFC).This is entirely of my own word and it is not submitted to any other institutions or published anywhere before.

Date: -

Smruti Ranjan Sahoo

Roll No-13771U092056 KIIMS

Objective of the Project

The project study is necessary to make a contribution to knowledge through integration of the review of literature and methodology developed for the understanding and resolution of management problem, and empirical work done thereon. And more importantly this study is required to meet the partial fulfillment for the award of the master degree i.e. Master in Finance Control from Utkal University. The purpose of the summer project report proposal is allowed to place the proposed study with in a coherent, organized frame work, which is also standardized. The project study is necessary to enhance our understanding, grasp

and clarity of the subject matter, the context of the managerial problem and the research problem. This is necessary for the direction and procedure of the study to be brought within the required scope, coverage, and rigor, and also for changing the quality of the research effort.

Aluminium Sector

An Overview of Aluminium Sectors

Aluminium Industry in India is a highly concentrated industry with the top 5 companies constituting the majority of the countrys production. With the growing demand of aluminium in India and world market, the Indian aluminium industry is also growing at an enviable pace. In fact, the production of aluminium is currently outpacing the demand. Moreover, India has huge reserves of high-grade bauxite and it caters to about 5% of the world aluminium demand of 54 million tonnes. World aluminium growth rate seems to touch 4.9%. India has huge reserves of bauxite spread across Orissa, Madhya Pradesh, Jharkhand and other states. Large reserves of good quality alumina and proximity of Asian markets have attracted global aluminium reserves of good quality alumina and proximity to Asian markets have attracted global aluminium producers in the world towards India. The availability of cheap

labours has given the Indian an edge over its peers. India serves as a ready market for perpetually aluminium demanding nations like China. Aluminium Industry in India is a highly concentrated industry with the top 5 companies constituting the majority of the countrys production. With the growing demand of aluminium in India and world market, the Indian aluminium industry is also growing at an enviable pace. In fact, the production of aluminium is currently outpacing the demand. Though Indias per capita consumption of aluminium stands too low (under 1 kg) comparing to the per capita consumption of other countries like US and Europe (range from 25 to 30 kgs), Japan (15 kgs), Taiwan (10 kgs) and China (3 kgs), the demand is growing gradually. In India, the industries that require aluminium most include power (44%), consumer durables, transportation (1012%), construction (17%) and packaging etc. The Indian aluminium industry is dominated by four or five companies that constitute the majority of Indias aluminium production. Following are the major players in the Indian aluminium industry

Hindustan Aluminium Company(HINDALCO) National Aluminium Company(NALCO) Bharat Aluminium Company(BALCO) Madras Aluminium Company(MALCO) Indian Aluminium Company(INDAL) HINDALCO: Hindalco, an Aditya Birla Group flagship company is the

biggest player in the aluminium industry in India with around 39% of market share.. Hindalco has its aluminium plant at Renukoot in Uttar Pradesh. It has

various aluminum products with a market share of 42% in primary aluminium, 20% in extrusions, 63% in rolled products, 31% in wheel and 44% in foil.

Sterlite Industries: The aluminium business of Sterlite Industries

Limited comprises of two aluminium giants MALCO and BALCO. While BALCO is a partially integrated producer of aluminium, Nalco is a fully integrated producer of aluminium. Sterlite has got a market share of around 32%. NALCO: It is one of the leading aluminium producers in India. Government of India has stake of 81.15% in this company. Its aluminium refinery is located at Damanjodi. It also has a smelter located at Angul, Orissa. Currently, NALCO is concentrating on a capex program to increase its production from 345,000 tonnes to 460,000 tonnes.

SOME OTHER COMPANIES IN THIS SECTOR

Hindustan Zinc Jindal Stainless Kennametal India INDAL Sujana Metal Products Ratnamani Metals

ALUMINUM - STRUCTURE

The Aluminium industry in India can be classified as:

(a) The primary producers who produce ingots and billets (primary form of Aluminum) using bauxite.

(b) The secondary producers who add value to the ingots and billets to produce semi-fabricated products.

All the primary producers have integrated forward into the manufacture of high value semi-fabricated products like rods, rolled products, extrusions and foils.

Regulated till 1989

Until 1989, the Aluminum Control Order (ACO) required all domestic

manufacturers to ensure that atleast 50% of their ingot production was electrical grade, for use by the transmission power industry. The government fixed ingot prices on the basis of a Retention Pricing Mechanism, taking into consideration the average retention prices of all producers and a minimum return on equity. The above control resulted in a skewed product mix and shortages of aluminum for other sectors. The problem was further compounded by the vulnerable financial position of State Electricity Boards (the main users of electrical grade aluminum) and high import and excise duties. The producers resorted to inflated prices for other types of Aluminum to compensate for the disadvantages they suffered because of this regulation. The ACO was scrapped in 1989 and in 1991 the government lifted restrictions on capacity additions resulting in a free market environment.

Aluminum Inputs
The aluminum industry in India can be classified as: Captive power, ample bauxite reserves, coupled with cheap labour costs make Indian companies amongst the most competitive Aluminum producers globally.

 The main raw material for the manufacture of Aluminum includes bauxite, caustic soda, calcined petroleum coke, coal tar pitch, and LS/FS furnace oil. The production process for manufacture of Aluminum is briefly outlined below. The mined bauxite ore is mixed with caustic liquor and is refined to produce alumina.
This is then smelted (through electrolysis in a smelter) to obtain Aluminum.

Depending on the quality of bauxite, 2.5 3 tonnes are required for manufacture of 1 tonne of alumina. In turn, 2 tonnes of alumina are required for manufacture of 1 tonne of Aluminum

Salient features of Indian Aluminum Industry

Highly concentrated industry with only five primary plants in the country Controlled by two private groups and one public sector unit

 Bayer-Hall-Heroult technology used by all producers Electricity, coal and furnace oil are primary energy inputs All plants have their own captive power units for cheaper and un-interrupted power Supply Energy cost is 40% of manufacturing cost for metal and 30% for rolled products Plants have set internal target of 1 2% reduction in specific energy consumption in the next 5 8 years Energy management is a critical focus in all the plants Two plants have declared formal energy policy Each plant has an Energy Management Cell Achievements in energy conservation are highlighted in the Annual Report of the Company. Energy targets are based on best energy figures achieved in their sector / region and by the plant itself in the past Generally, government policies were rated as conducive to energy management
Task Force formed by BEE in this sector to work as catalyst in promoting

energy efficiency
High cost of technology is the main barrier in achieving high energy

efficiency

NATIONAL ALUMINUM COMPANY ( NALCO )

NALCO:AN OVERVIEW
National Aluminium Company Limited (Nalco) is consideration to be a turning point in the history of Indian Aluminium Industry in a major leap forward. Nalco has not only addressed the need for self-sufficiency in aluminium but also given the country a technological edge in producing this strategic metal as per world standards. Incorporated in 1981 as a public sector enterprise. Nalco was set up to exploit a part of the large bauxite deposits discovered in the east coast in technological collaboration with aluminium pechinery of france (now alcon). With consistent track record in capacity utilization, technology absorption, quality assurance, export performance and profitability. nalco is a bright example of indias industrial capability. today, as on iso 9001,iso 14001 andohsas 18001 company, with its products registered in London metal exchange. Nalco has

emerged as the largest integrated bauxite-alumina-aluminium complex in Asia. now, Nalco enjoys the status of a Navratna company. Nalco Aluminium Company (NALCO) is Indias largest integrated public sector producer of alumina and second largest producer of aluminium. Its combination of modern assets, excellent logistics, cheap power and captive port facilities has all contribution to making it one of the lowest-cost producers of alumina in the world. It was incorporated as a public sector enterprise of the Government of India in 1981 under the Ministry of Mines. Government of India had a share of around Rs 1289 crore in the total funding of Rs 2408 crore as Capital Cost and the rest of Rs 1119 crore is met by Euro-Dollar loan a consortium of International Banks. It boasts of some of the worlds latest and finest technology in the Aluminium manufacturing industry. Commissioned during 1985-87, Nalco has emerged to be a star performer in production and export of alumina and aluminium, and more significantly, in propelling a selfsustained growth. It has made the country more than self sufficient in alumina and aluminium needs and has quite impressive export figures as well. Being the largest exporter of the metal in the country, it has its own section of port facility at Visakhapatnam. All units of NALCO employ the latest in technology and are some of the advanced manufacturing units in the world. The main units of NALCO are at Damanjodi (Mines and refinery complex) and Nalco nagar, Angul (Smelter and Captive Power Plant Complex). The Bauxite mines are situated atop a set of five mountains called Panchpatmalli. These mines are open cast mines. The refinery complex for producing bauxite is located in Damanjodi. The companys headquarter are located in Bhubaneswar, which is the capital of Odisha. Nalco is considered to be the one of the best profit making PSU

n India and reaps impressively huge benefits every year. It is expanding by currently employing new projects. The ongoing second phase of expansion is set to make it the sixth largest producer of the metal in the world. The company has numerous awards to its credit, some of them being prestigious awards and recognitions. The company received Indira Priyadarshini Vrikshamitran Award from Government of India for its contribution in the field of afforestation and wasteland development. The 960 MW Captive Power Plant of the Company also received the prestigious Indira Gandhi Paryavaran Puraskar for the year for the year 2000 from Government of India for its outstanding contributions in the field of environment management. Besides these, the Company and its Units have received various National, State and Institutional awards for excellence in Safety and Environment Management. Nalco received ISO 9001:2000 awards and OHSAS 140001 for its excellence in production technology and occupational health and safety systems respectively.

SHARE HOLDING PATTERN / OWNERSHIP PATTERN

The huge chunk of the share is held by Government while the rest is distributed among the FIIs, DIIs and other investors. Before the recent divestment, the scenario was slightly different. The Government holding was 87.11%, FII was 5%, DII was4.5% and the rest of 2.39%. But the recent divestment has been done to meet the future expansion policy.

Vision of NALCO:
To be a company of global repute in Metals and Energy Sectors.

Mission of NALCO:
To achieve sustainable growth in business through diversification, innovation and global competitive edge. To continuously develop human resources, create safe working conditions, improve productivity and quality and reduce cost and waste To satisfy the customers and shareholders, employees and all other stakeholders. To be a good corporate citizen, protecting and enhancing the environment as well as discharging social responsibility in order to ensure sustainable growth. To intensify Research and Development for technology development.

OBJECTIVES OF NALCO
To achieve annual turnover of over Rs.25,000 Crores by 2020. To achieve annual production of 1.7 million ton Aluminium and 4 million ton Alumina by 2020.

 Transform from being only an ALUMINIUM PRODUCER to become a metal producer and energy provider.

To venture into new fields of activity beyond Aluminium by setting up at least 2 nos. diversified projects by 2016.

To target at least one 1000 MW IPP by 2016. To maximise value and long term return to share holders through a stratergy of new investments, cost competitive mines and business driven by the quality of products and services. To develop long-term relations with domestic and foreign clients and Joint Venture partners.

To develop a powerful scientific and technical base. Apart from investments in volume growth, the company shall substantially finance R&D and mordernization of facilities, laboratories, achieving improvements in the quality of products and satisfying customer demands.

To adopt main stratergic priorities aimed at end user orientation.

HR Vision of NALCO:
To attain organizational excellence through trust, openness, commitment, creativity, innovation and providing opportunities for growth, well being and professional enrichment.

HR Mission of NALCO:
To create a learning and knowledge based organizational through continuous innovation, evaluation and realignment HR practices with the business strategies and to attract, nurture and retain talent. To inculcate a spirit of creativity, quest for learning, to create a responsive and competent work force and inspiring and motivational organizational climate.

HR Philosophy of NALCO:
The philosophy of Nalco in the field of human resources and management has been: To attract competent personnel with growth potential and develop their skill and capability in a congenial work and social environment through opportunities for training, recognition, career advancement and other incentives. To develop and nurture favourable attitude among employees and to obtain their best contribution to the organization by providing stable employment, safe working conditions, job satisfaction, quick redress of grievances and through good pay and welfare amenities, commensurate with the companys capacity to spend and the government guidelines. To foster fellowship and sense of belongingness among all sections of employees through closer association of employees with the management and by encouraging healthy trade union practices.

HUMAN RESOURCES AT NALCO

(As on march, 2010)

Quality Policy at NALCO

Quality will form the core of our business philosophy. Meeting the needs and expectations of the customer and consistently improving our systems and works ethos will be our chosen path in achieving excellence in business and fulfilling our social obligations.

Guiding Principles:
To ensure a healthy return on investment by maximizing Operational efficiency, Capacity utilization and Productivity. To continually improve and redesign Systems, Processes and Practices in order to ensure error prevention and improve response time. To adopt internal Customer focus as a means to external customer satisfaction. To treat human resource as the key to the Quality excellence and ensure development, involvement and satisfaction of employees. To ensure high quality of inputs through proactive interaction of employees. To meet obligations towards the society as a responsible corporate citizen. To provide value for money to all stake holders. To follow ethical business philosophy at all times.

Commitment:
We declare ourselves to the Quality Policy and Objectives of the Company in letter ad spirit and commit to continuously to their fulfillment.

Social Accountability Policy

We at NALCO are committed to provide a socially accountable work environment to all employees and uphold ethical business practices by respecting employees

rights. We shall achieve these by adopting a company wide culture, which will help to promote: Involvement of all employees in sustenance of SA 8000 standard; Continual improvement initiatives in all social issues; Learning and training opportunities to all employees; Fulfillment of relevant statutory rules and regulations, ILO requirements, applicable international instruments and their interpretation.

Occupational Health and Safety Policy

NALCO is committed a Safe, Healthy and Sustainable work environment in all its operations. This shall be achieved by: Focusing on prevention of Accident and Occupational Health Issue. Complying with all legal requirement and other requirements related to Safety and Occupational Health of persons and establishing clearly defined goals and procedures to achieve the same. Ensuring Safety and Health of all employees and contract workers in its premises, including those involved in transportation, cleaning and other such activities. Conducting Periodic Safety Audit, Environment Audits, Health Check-ups and Risk Assessment by both internal and external qualified persons. Considering aspects related to Safety and Health of the personnel as well as the environmental issues at the time of procurement of equipment and selection of technologies. Ensuring health of persons in the peripheral locations, likely to be affected by our operations.

 Periodically monitoring and reviewing safety and occupational health issues at relevant levels, including the highest levels. Communicating Safety Hazards and health related issues to all concerned through suitable means, including training. Involving the workmen in Policy implementation as well as identification of potential issues.
Considering Health and Safety performance of individual at different levels

during their career advancement, as per NALCOs policy.

Establishing and maintaining suitable set-up with competent persons to monitor and bring to the notice of the management any issues related to unsafe conditions and practices. Striving for continual improvements, exceeding statutory compliance levels, wherever feasible.

Environment Policy

In recognition of the interests of the society in

securing sustainable industrial growth, compatible with wholesome environment, National Aluminum Company Limited (NALCO) affirms that it assigns high importance to promotion and maintenance of a pollution-free environment in all its activities. To use non-polluting and environment-friendly technology. To monitor regularly air, water, land, noise and other environmental parameters. To constantly improve upon the standards of pollution control and provide a leadership in the environment management.

 To develop employees awareness on environmental responsibilities and

encourage adherence to sound environmental practices. To work closely with Government and local authorities to prevent or minimize adverse consequences of the industrial activities on the environmental practices. To comply with all applicable laws governing environment protection through appropriate mechanisms. To actively participate in social welfare and environmental development activities of the locality around its Units.

CORPORATE STRENGTH
Captive Resources

Advanced Technology

Integrated Operation

World-class Products

Well-trained Manpower Sound financial Management Care for Ecology $ Environment Self-funded Expansions Expertise in Project Management International Linkages in Technology $ Market

COMMITMENTS/ASSISTANCE FROGOVERNMENT: THE MINISTRY OF MINES AGREES TO ASSIST IN:

A. Mining Lease of Pottangi bauxite deposite-recommendation by Govt. Of Orissa. B. Enhancent of coal linkage to 7.55 million metric ton through Long Term Linkage Committee.

STATE GOVT. ISSUES :

A. Withdrawal of electricity duty on auxillary consumption. B. Withdrawal of enhancement of electricity duty from 12 paisa per unit to 20 paisa per unit.

C. Withdrawal of entry tax. D. Allotment of Bauxite Mines at Gandhamardan in favour of NALCO.

E. Issues pertaining to stock transfer to NALCOs stockyards situated outside the State. F. Allotment of water for Utkal- E Coal Block.

The performance in respect of production and sales parameter for year 2008-09 and in comparison to previous year is given below :

DEPARTMENTS IN CORPORATE OFFICE

All Director Company Secretary Project & Technicals Marketing Department Metal Emport Chemical Rolled Product Domestic Marketing Marketing (Finance) Logistics Finance Finance (NEPFT )

 Taxation ( Sales ) HRD Training Dept Materials

Administrative Maintainance Service Telecom Corporate Communication Raj Bhasha / Welfare Department (Hindi Cell) & Sports Law Department Medical Services Documentation- Library System Department- System ERP Team Member- SAP (WIPRO) Industrial Engineering- Recruitment Environment & Safety Research & Development Business Development Total quality Management Share Cell Vigilance

BAUXITE MINE
A fully mechanized open-cast mine of 48.00.000 tpa on panchpatmali hills of Koraput district in Orissa, serves feed-stock to the Alumina Refinery at Damanjodi, located 16 km downhill. The transportation is done through a 14.6 km long single flight, multicurve, cable belt conveyor of 1800 tph capacity. The mining capacity is being expanded to 63,00,000 tpa.

Area of Deposit : 16 Sq. Km Resource : 310 million tonnes Mineralogy : Over 90 % gibbsitic Ore Quality : Alumina 45%, Silica 2% Ore Thickness : 14 mtr (avg.)

ALUMINA REFINERY
The 15,75,000 TPA energy- efficient Alumina Refinery, having three parallel streams of equal capacity, is located in the picturesque valley of Damanjodi. The Refinery provides alumina to the companys Smelter at Anugul and exports the balance alumina to overseas markets through Visakhapatnam Port. Presently , it is being expanded to 21,00,000 TPA capacity.

SMELTER PLANT

THE 3,45,000 TPA capacity Aluminium Smelter, located at Anugul in Orissa based on advanced technology of smelting and pollution control. Its capacity is being further expanded to 4,60,000 TPA. The salient features of the plant include. 180 KA cell technology Furne treatment withdry-scrubbing system

Manufacturing of carbon anodes, bus bars, anode stems etc Integrated facilities for manufacturing Ingots. Sows Billets Wire Rods. Strips and Rolled Product.

4 x 45 tonne furnaces and 2 x 9.5 tph wire rod mills 2 x 45 tonne furnaces and 60/42 per drop billet casting machine 2 x 1.5 tonne induction furnace with a 4 tph alloy ingot casting machine 26,000 tpa strip casting machines

CAPTIVE POWER PLANT

Close to the Aluminium Smelter at Angul a Captive Power Plant of 960mw capacity has been established for firm supply of the Smelter. The coal demand of the Plant is met from a dedicated mine of Mahanadi Coalfields Limited. The plant is also connected with the State Grid for sale of surplus power. Close to the Aluminium Smelter at Angul, a Captive Power Plant of 720 MW capacity, comprising 6 x 120 MW clusters, has been established for firm supply of power to the Smelter.

The salient features:

 Micro-processor based burner management system for optimum thermal efficiency Computer controlled data acquisition system for on-line monitoring Automatic turbine run-up system Specially designed barrel type high pressure turbine Electrostatic precipitators with advanced intelligent controllers Wet disposal of ash The water for the Plant is drawn from River Brahmani through a 7 km long double circuit pipeline. The coal demand is met from a mine of 3.5 million tpa capacity opened up for Nalco at Bharatpur in Talcher by Mahanadi Coalfields Limited. The Power Plant is inter-connected with the State Grid.

PORT FACILITIES
On the inner harbour of Visakhapatnam Port on the Bay of Bengal, Nalco has established mechanized storage and ship handling facilities for exporting alumina in bulk and importing caustic soda. This facility can handle ships up to 35,000 DWT. Ship loading rate: 2200 TPH Alumina storage: 75000 tonnes Besides Nalco exports from the ports of Paradeep and Kolkata.

ROLLED PRODUCTS UNIT

After acquisition and merger of International Aluminium Products Ltd., Nalco has started production from this 50,000 TPA plant. This Rolled Products Unit is presently producing standard coils and sheets. Besides, it has facilities to

produce foil stock, finished stock, cable wrap stock, coil stock and closure stock for a variety of end uses.

ENVIRONMENT
Nalco assigns high importance to promotion and maintenance of a pollution-free environment in all its activities. The Environment Management Systems in all production / operation units conform to the ISO 14001 norms. Among numerous recognition, the two highest national awards viz. Indira Priyadarshini Vrikshamitra Puraskar for environment management, conferred on the Company by the Ministry of Environment & Forests, Govt. Of India, bear further testimony to Nalcos commitment towards the environment.

COMMUNITY CARE
The Company has adopted a policy of playing a catalytic role in improving the quality of the people living in the peripheral villages, in collaboration with local government authorities. The activities include creation of infrastructure for communication, education, health care, water supply, apart from undertaking social forestry, organising rural sports and supporting cultural activities.

Products Manufactured by NALCO:

Aluminum Metal:

Standard Ingots (each approx. 20/22.5 kgs)

Sows Ingots (each max 750 kgs) Billet (in four sizes: 127+/- 1.5mm, 152+/- 1.5mm,178+/- 1.5mm, 203+/1.5mm) Wire Rods (in coil form : 9.5/11.95 mm dia, weight approx. 2 MT) Alloy wire rods ( Max. width 1600 mm, gauge 6 10 mm)

Cast Strips Alumina Hydrate: Calcined Alumina Alumina Hydrate Zeolite-A

Financial Overview of Nalco

To give a better picture of the companys performance, it is better on our part to give some graphical representation of the performance of the company not only on the financial part but on the part of production and sales for the better understanding to the evaluator of the project.

PRODUCTION and SALES (in 000 MTs)

ALUMINUM
(in 000 MTs)

POWER

FINANCIAL PERFORMANCE

Turnover and Net Profit

(Rs. in Crore)

Sales Turnover
Rs.(in Crore)

Dividend Payment
(Rs. in Crore)

Expenditure Breakdown
(Rs. in crore)

SWOT ANALYSIS OF NALCO

STRENGTH:

1. Availability of huge deposit of bauxite 2. state of the art technology 3. Huge power production. 4. Low energy consumption 5. Maintenance of production and quality of metal production. 6. Presently it is the market leader. 7. High profitability leader. 8. Co-ordination among the various departments thereby decreasing the chances of conflict. 9. Increased customer satisfaction 10. Last but not the least, the feather of NAVRATNA status studded to the crown of NALCO.

Weakness:
1. High transportation cost from the refinery to the smelter. 2. Prices of Aluminum depend upon London Metal Exchange quotes. 3. The cash reserves are increasing each year without any further utilization or investment.

Opportunity:
1. Growth of the potential domestic market 2. Widespread uses of Alumina for various purposes 3. Utilization of the idle cash reserves in other booming sector like Nuclear Power or in further expansions. 4. Identifying the prospect of setting up manufacturing units in foreign countries as well as looking for new source of raw material in foreign countries.

Threat:
1. Instability of the LME quotes. 2. High tax rate imposed on the metal. 3. Devaluation of the rupee leading to the increase of the debt amount 4. Dumping of the metal at low cost by the European countries. 5. Depressed LME prices resulting in more import of metal thereby decreasing demand of product from NALCO. 6. Rejection of LP

Expansion Programme
In order to strengthen its business and increase market share, the company has been pursuing expansion programs on a sustained basis. Soon after the completion of first expansion, the Company launched its 2nd phase expansion commenced on October 2004, which involved fresh investment of more than Rs. 4402 Crore. The ongoing expansion will raise the capacities of its various segments:

Unit
Bauxite Mines Alumina Refinery Aluminum Smelter Power Plant

Original Capacities 24,00,000 8,00,000 MT 2,30,000 MT 600 MW

After 1st Phase Expansion 48,00,000 MT 15,75,000 MT 3,45,000 MT 960 MW

After 2nd Phase Expansion 63,00,000 MT 21,00,000 MT 4,60,000 MT 1200 MW

The Company is now planning for 3rd phase expansion at an investment of Rs.6000 Crore, which will further increase Aluminum Smelter capacity to 5.80 Lakh tonnes and power generation to 1400 MW per annum.

NALCO A Leap Ahead

New era has begun. With the advancement of 21st century, Nalco has begun to change its course of operation to cope up with the flow of modernization. Nalco has started the process to design itself as a 21st century company. Nalco has designed a plan for its horizontal as well as its vertical expansion along with the diversification of its operation. The company is planning to utilize its unused cash reserves so as to decrease the cash burden on itself. Nalco is planning to raise a part of the amount of the total funding from public issue of Nalcos share. The

company is going for the issuance of FPO. The fund raised from the FPO will be utilized for the purpose of both expansion as well as the diversification. The company is going to divide its operation into three parts at corporate level Nalco Power, Nalco Metals and Nalco International.

1. Nalco Power:
Nalco is planning to invest about Rs. 1000 Crore in future project of state-run Nuclear Power Corporation of India Limited (NPCIL). The two companies had entered into an agreement to team up with each other for setting up nuclear power plant in different part of India.

2. Nalco Metals:
Nalco metals will constitute the operation starting from mining of bauxite from Panchpatmalli, Damanjodi to the production of Aluminum metals in the Smelter in Angul. Nalco is considering of buying coal, copper, uranium and bauxite mines in Nambia. It will also be operated under the head of Nalco Metals.

3. Nalco International:
Nalco International will look after the operation of its own International trade houses which will be set up at Dubai and Singapore. The export of minerals and aluminum metals produced in the manufacturing unit will be exported to this Trade houses and from this houses they will be forwarded to its consumer countries as per the demand.

NALCO
GUIDELINES ON CORPORATE SOCIAL RESPONSIBILITY FOR CENTRAL PUBLIC SECTOR ENTERPRISES (CPSE)

CHANGE IN APPROACH
With the rapidly changing corporate environment, more functional autonomy, operational freedom etc., CPSEs today are required to adopt CSR as a strategic tool for sustainable growth. CSR, in the present context, means not only investment of funds for social activities but also integration of business processes with social processes.

NEED FOR LINKAGE WITH COMMUNITY

An Enterprise needs to address the concerns of the society in which the enterprise is operating. There should be free interaction between enterprises and community leaders. In order to address the social needs of the community, viable projects need to be identified to meet its requirements.

OVERARCHING CONCEPT
CPSEs may approach Corporate Social Responsibility as a professional management process, with a long-term strategy, integrating it with corporate strategies. CSR activities may be planned in parallel to the business plan, looking at every possible opportunity to link and integrate business plans with the social and environmental concerns available.

PLANNING THE CSR INITIATIVE

A long-term Corporate Social Responsibility Plan needs to be prepared matching with the long-term business plan; This may be broken down into short-term and medium term plans, specifying activities to be undertaken, budgets allocated, responsibilities and authorities defined, and measurable results expected

IMPLEMENTATION
The Plan must clarify implementation guidelines involving:

 Participation of Voluntary Organizations, Specialist Organizations and Community-Based Organizations; Base-line Surveys; Documentation of the experience; Setting up a CSR Hub with participation of Department of PE, SCOPE and CPSEs; Monitoring and Evaluation; Lessons learnt for future use.

THRUST AREAS
Areas related to the business of the PSE as a natural corollary to the business; Assistance to be mostly project based rather than donation, so as to generate community goodwill, create social impact and visibility; Finalizing of time-frames and various milestones before commencement of a project; Involving of suppliers in order to ensure that the supply-chain also follows the CSR principles; Emphasis on principles of Sustainable Development, based on the immediate and long-term social and environmental consequences of the activities undertaken; Improvement of the existing ecological conditions; Ensuring skill enhancement and employment generation by co-creating value with local institutions and people.

ACTIVITIES THAT WILL NOT COUNT AS CSR

Benefits to staff Grants to organization/institutions

IMPLEMENTATION MODALITIES
CSR Activities to be carried out by Specialist Agencies; Such activities generally not to be conducted by CPSE employees / staff; Specialist Agencies to include NGOs, Institutes, Academic Organizations, Civil Society / Community-based Organizations, Trusts, Missions etc., who have requisite expertise; Utmost efforts to be made to find out the reliability, and track record of the NGOs / Organizations entrusted with CSR activities; Initiatives of State Governments as well as Central Government Departments / Agencies could be dovetailed/ synergized with CSR activities; Avoidance of any duplication of CSR activities by the CPSEs, the State Governments and local level Programs.

FUNDING The CSR budget to be mandatorily created through a Board Resolution as a percentage of net profit in the following manner: TYPE OF CPSES EXPENDITURE RANGE FOR CSR Net Profit in a Financial Year (Previous Year) (% of profit) i. Less than Rs. 100 crore 3% 5% ii. 100 crore to Rs. 500 crore 2% 3% (Subject to a Min. of 3 cr) iii. 500 crore and above 0.5% 2%
The CSR Budget to be fixed for each financial year. This funding not to lapse must be transferred to a CSR Fund, which will accumulate as in the case of non-lapsable pool for North East.

 In case CPSEs have different Profit Centers like Factories / Plant locations, they may be allocated separate CSR budgets to be spent by them under the Annual CSR Budget allocations.

MONITORING
Monitoring of the CSR projects is very crucial and needs to be a periodic activity of the Enterprise; \ The Board of CPSEs should discuss the implementation of CSR activities in their Board meetings; The CPSE should bring a separate paragraph / chapter in the Annual Report on the implementation of CSR activities / projects including the facts relating to physical and financial progress The implementation of CSR guidelines to form a part of the Memorandum of Understanding to be signed between CPSE and the Government; The performance of CSR should be monitored by the Ministry / Department on regular basis; In MoU Guidelines from 2010-11 onwards, 20% has been earmarked out of the non-financial parameters for performance under CSR. For proper monitoring of CSR activities, companies may appoint a CSR committee or a Social Audit Committee or a suitable, credible agency to critically assess fulfillment of social obligations. CSR projects should also be evaluated by an independent external agency. This evaluation should be both concurrent and final.

MONITORING & EVALUATION BASELINE SURVEYS AND DOCUMENTATION

Impacts made may be quantified to the best possible extent with reference to base line data, which need to be created by the CPSEs before the start of any project. Hence, Base-line Surveys mandatory. The documentation relating to CSR approaches, policies, programs, expenditures, procurement, etc. to be put in the public domain, particularly through the internet.

NALCO CSR It is not the Charity, It is the Responsibility

Nalco has always tried to prove itself a responsible and star corporate citizen of the country. It has always tried to deliver its duty more than its expectation towards the society. The company has adopted a policy of playing a catalytic role in improving the quality of the life of people living in the peripheral villages, in collaboration with the local government authorities. These activities includes: creation of infrastructures for communication, education and health care, water supply apart from undertaking social forestry, organizing rural sports and supporting cultural activities. Even before the land is acquired and foundationstone is laid for a project, the company launches its CSR activities in the area to create a favorable mood among the local people towards the project. As a policy NALCO allocates 1% of its net profit per year for the periphery development activities of the succeeding year. Out of this allocable fund, 40% is allocated for the Damanjodi, 40% towards Angul and the rest 20% is for other areas. Around Rs.136.87 Crore has been allocated towards the periphery development including the special projects. Nalco has created a trust within the local people towards the company. It will foster the relation between the company and the people of the local area. Nalco has set up a Corporate Social Responsibility Foundation and has doubled the allocated money from 1% of its net profit to 2% . Nalco is now playing a vital role in the economic development of the area where it operates. Rehabilitation of displaced families, employment and income generation for local people, development of infrastructure, environment care and humanitarian goodwill missions have earned Nalco a special place in the hearts of the local people of the area where Nalco operates.

PROJECT

INTRODUCTION
Social Security protects not just the subscriber but also his/her entire family by giving benefit packages in financial security and health care. Social Security schemes are designed to guarantee at least long term sustenance to families when the earning member retires, dies or suffers a disability. Thus the main strength of the Social Security system is that it acts as a facilitator it helps people to plan their own future through insurance and assistance. The success of Social Security schemes however requires the active support and involvement of employees and employers. The term Social Security is of almost indefinite connotation as it covers several measures of protection against various contingencies from Womb to Tomb or from the Cradle to the Grave. It is a scheme of social insurance against interruption and destruction of earning power and for special expenditure arising at birth, marriage or death. It is an attack on five giants namely, Want, Disease, Ignorance, Squalor and Idleness The concept of Social Security is as old as civilization itself. The concept of old age, disability and survivors protection, as an essential ingredient of Social Security, was included in the objectives of International Labor Organization, set up after the First World War in 1919. The oldest institution of social security in the history of mankind is family. Closely connected by flesh and blood, inspired by the tales of filial devotion, fraternal affection and parental sacrifice and encouraged by various religions, every member of the family consider it as a part of his duty to share his weal and woe with other members. Income from family property and family labor was pooled together and was used for the maintenance of all members, whether protective or nonprotective. The family is supposed to look after physical needs of its member including food, shelter, clothing as well as providing comfort and love acceptance and approval. The break-up of the joint family system following emergence of the urbanization and industrialization has resulted in the need for social security through the society.

Main Characteristics of Social Assistance It provides for selected social dependency needs. The entire cost of the Scheme is borne by the State. It applies uniform and statutory means test. It may follow from the above study that the social assurance has the following features. a. It is a device for providing social security benefit for special cases. b. Assistance is granted by the state from its own fund directly or through some appropriate Organization. c. Assistance is granted as a matter of right. d. The financial resources of social assistance scheme are of the limited order and benefits given can be only for a short duration of time. e. It is granted to those persons who fulfill certain prescribed conditions and f. Social Assistance is supplemented rather than substitutive to social insurance. The purpose of social security:- The fundamental purpose is to give individuals and families the confidence that their level of living and quality of life will not, so far as possible, be eroded by any social or economic eventuality. This involves prevention of the occurrence of contingencies which involve loss of substantial reduction of income. According to International Labor Organization, there are nine branches of social security benefits which are Medical Care, Sickness Benefit, Unemployment Benefit, Old age benefit, Employment injury benefit, family benefit, Maternity benefit, invalidity benefit and survivor benefit. In the life of man, there are two stages of dependency childhood and old age and in the intervening years of adult life, there are likely to occur spells during which he can not earn his living. Illness enters into every ones experience and apprehension of it is felt at all ages. A person who falls sick is threatened with two stages of unemployment, at first because he cannot work and later because he would have lost his job. Similarly every body is exposed to a certain number of risks or contingencies viz. Unemployment, Sickness, Invalidity, Maternity, Employment Injury, Old age and death of the bread winner. For the great majority of those who have nothing to live on but their earnings, any one of these risks on contingencies, resulting inevitably in loss of income and is liable to plunge workers and their family into extreme poverty.

Social Security System in India

The constitution of India lays down, in its directive principles (Article-41) the State shall within the limits of its economic capacity and development, make effective provisions for securing the right to work, to education and to public assistance in case of unemployment, old age, sickness and disablement and in other cases of undeserved want In India, both social insurance and social assistance programs provide for Social Security needs of workers in the contingencies of sickness, maternity, employment, inquiry occupational disease, old age and death. So far as Social Insurance programs are concerned the following schemes are in existence. The principal Social Security Laws enacted centrally in India are the following The Workmens Compensation Act, 1923 The Employees State Insurance Act, 1948 The Employees Provident Fund and Miscellaneous Provision Act, 1952 The Coal Mines Provident Fund Act Provident Fund for Tea Plantation in the State of Assam Seamens Provident Fund The Maternity Benefit Act, 1961 The payment of Gratuity Act, 1972 In addition, a number of social assistance scheme both central and state Government schemes provide social assistance benefits for the welfare of specific categories of workers. Most of these schemes cater to the 90% of the work force which is in the unorganized sector, for whom the benefits of a Contributory Social Insurance Scheme is yet to be extended, as is provided to worker in the unorganized sector. Today Social Security exists for employees in Organized Sector whereas it is absent in the unorganized sector. In the employee category, the complete responsibility of social security is given to the Employer and States assistance is negligible. Out of 400 million workforces in India, about 8% of them are brought under the PF/Pension legislation. The Government of India is very keen to extend this benefit to the unorganized sector.

Social Security Laws The Workmens Compensation Act, 1923

The Workmens Compensation Act is the first piece of legislation towards social security. It deals with compensation for workers who are injured in the course of duty. The scheme of the Workmens Compensation Act is not to compensate the worker in lieu of wages. The general principle is that a worker who suffers an injury in the course of his employment, which results in a disablement, should be

entitled to compensation and in the case of a fatal injury, his dependant would be compensated. Under the Workmens Compensation Act it is the employer who is responsible to pay compensation (as opposed to the employees State insurance. Establishments to which the Employees State Insurance Act applies to the liability to pay compensation are on the ESI Corporation). The meaning of compensation in this Act is limited to compensation granted under the Act for employment injuries sustained during the course of work. It is also limited to specifically monetary compensation other than a salary, travel allowance, and any other form of remuneration that could be paid under normal circumstances of employment . To get an overall understanding of the Act it is useful to look at the Statement of Objects and Reasons published with the Act when it was first passed in 1923. To quote: the growing complexity of industry in this country with the increasing use of the machinery and consequent danger to workmen, along with the comparative poverty to workmen themselves renders it advisable that they should be protected, as far as possible from hardship arising out of accidents.

The Employees State Insurance Act, 1948

The Employees State Insurance Act, 1948 provides for health care and cash ents in the case of sickness, maternity and employment injury. The Act is applicable to non-seasonal factories using power and employing 10 or more employees and nonpower using factories and certain other establishments employing 20 or more employees. The ESI Scheme is administered by a statutory body called the Employees State Insurance Corporation (ESIC), which has members representing Employers, Employees, Central and State Governments, Medical Profession and the Parliament. The Union Minister for Labour & Employment is the Chairman. A Standing Committee constituted from among the members of the Corporation, acts as the executive body for administration of the Scheme and is chaired by Secretary to the Government of India, Ministry of Labour & Employment. There are 24 Regional Boards and 345 Local Committees in existence at present.

The EmployeesProvident Fund and Miscellaneous Provision Scheme, 1952

The Employees Provident Funds and Miscellaneous Provisions Act, 1952 is a welfare legislation enacted for the purpose of instituting a Provident Fund for employees working in factories and other establishments. The Act aims at providing social security and timely monetary assistance to industrial employees and their families when they are in distress and/or unable to meet family and social obligations and to protect them in old age, disablement, early death of the bread

winner and in some other contingencies. Presently, the following four Schemes are in operation under the Act through the EPFO: Employees Provident Funds Scheme, 1952 Employees Deposit Linked Insurance Scheme, 1976 Employees' Pension Scheme, 1995 New Pension Scheme, 2009 The Maternity Benefit Act, 1961 (M.B. Act), which provides for 12 weeks wages during maternity as well as paid leave in certain other related contingencies. The Payment of Gratuity Act, 1972 (P.G. Act), which provides 15 days wages for each year of service to employees who have worked for five years or more in establishments having a minimum of 10 workers. Evolution of Income Security for Elder, disabled and Survivors in India: Government Employees The concept of old-age Pension was brought to India by the British, because the person who were brought by them from England to occupy the higher bureaucracy, had to be given old age pension, as they were entitled to be given old age pension, as they were entitled to it, if they had remain in their own country. The benefit was also extended to all Government employees as they had to rule through them. Moreover it would have looked discriminately if it was available to only one section of employees, who were British citizen and not available to the employees of Indian origin. The Central Government employees are also enjoying the benefit of pension and the payment of pensions is regulated under the CCS (Pension) Rule, 1972. Similarly the Armed Forces Personnel, Railway Employees and members of All India Service are enjoying the pensionary benefits at par with Central Government Civilian employees through separate notifications issued by the respective Ministries/Department. The pension schemes for the Government employees are financed from the General Revenue of the Government of India. Thus, in a sense it is a Social Assistance Scheme. In 1965, the Gratuity Scheme was introduced for the Government employees. In respect of Central Government employees who join the service on or after 1.10.2001, the Government is considering framing of a separate pension scheme on recommendations of Pension Regulatory Authority set up by the Government of India

Industrial Employees The Employees Provident Funds Scheme was framed under the EPF Act, 1952. With a view to protect the family of the PF members, who die while in service, a Scheme name Employees Family Pension Scheme was framed under the EPS and Family Pension Fund Act, 1952 in the year, in the year 1971, as a Social Insurance Scheme. In the year 1976, the Employees Deposit Linked Insurance Scheme was framed under the EPF and MP Act, 1952, providing lump sum benefit, which was linked to the PF deposits of the subscribers who dies while in service. On behalf of the employees, the employer is required to pay the contributions towards the EDLI scheme, 1976. In the year 1995, the Employees Provident Pension Scheme, 1971 was replaced by Employees Pension Scheme, 1995 which provides pension on Superannuation, Family Pension to the family of the member who die while in service or away from service or while drawing pension. In addition, Disablement Pension, Children Pension, Orphan Pension, Disabled Children Pension and pension for nominee and dependent parents and other benefits viz. Return of Capital and communication are also being provided. The working class in India was demanding one more retrial benefit and accordingly the Government of India introduced the payment of Gratuity Act in the year 1972. Other Schemes in general The Public Provident Fund Scheme, 1967 is a statutory Scheme of the Central Government framed under the provisions of the PPF Act, 1968. The scheme came into force w.e.f 1.07.1968 the PPF scheme can be availed by any individual in his or spouse name and this is a boon to the self employed and entitled for income tax benefits. The Government of India included the National Social Assistance Programmes (NSAP) in the Central Budget for the year, 1995-96 and it came into effect from 15th August, 1995. The NSAP for the time being included: 1. National Old Age Pension Scheme 2. National Family Benefit Scheme (Survivor Benefit Scheme) 3. National Maternity Benefit Scheme 4. Social Security Group Insurance Scheme for weaker section NALCOs Role in Maintenance of Social Security NALCO Employees Provident Fund Trust (NEPFT) looks after the maintenance of the Laws of Social Security in NALCO. The board of Trustees for NEPFT, headed by the Chairman-cum-Managing Director of the company, has been reconstituted, following a meeting of the Board of Trustees on June 15, 2009. The meeting was

presided by Shri C.R Pradhan, CMD while Shri B.L. Bagra, Director (Finance), attended the meeting as special invitee. The representative of NEPF Trust and officials were also presented on the occasion. The new board of Trustees for the NEPF with the following members (nominated by Employees Recognized Union and Management) has been constituted (W.E.F 1st January, 2009).

Employees Representative
Shri B.P. Kar, Senior PS, Corporate Shri B.N. Soren, EA (Administration), Mines Shri L.D. Rout, EA (HRD), Alumina Refinery Shri Malaya Swain, Accountant, Smelter Shri P.K. Behera, Sr. EA, (HRD) Smelter Employers Representative Shri S.C. Das, Executive Director (Finance), Corporate Office Shri S.K. Das, Dy. General Manager (Finance), Smelter & Plant Complex Shri K Ravindranath, Dy. General Manager (Electrical), Mines & Refinery Complex Shri S.K. Mishra, Dy. General Manager (HRD), Corporate Office Shri A.K. Rout, Sr. Manager (Finance),NEPFT, Corporate Office Shri P.K. Dhirsamant, Dy. Manager (Finance), NEPFT, Corporate Office

Employees Pension Scheme 1995

(w.e.f. 16th November 1995)

INTRODUCTION The Employees Pension Scheme (EPS), 1995 is one of the three subordinate legislations coming under the Employees Provident Fund Act, 1952 and is the latest among the three, coming into effect from 16th November, 1996. On introduction of the Employees Pension Scheme, 1995, the erstwhile Employees Family Pension Scheme, 1971 ceased to operate and all assets and liabilities of the old scheme were transferred and merged with the Employees Pension Fund. The Employees Pension Scheme 1995 has been designed as a Benefit defined Social Insurance Scheme formulated following actuaries principles for ensuring long term financial viability. The Scheme is a defined contribution as well as defined benefit scheme and aims at providing for economic sustenance during old age and survivorship coverage to the member and his family. The Employees Pension Scheme, 1995 derives its financial resource by partial diversion of 8.33% from the employers share of Provident Fund contribution. The Central Government contributes at the rates of 1.16% as done in old scheme. The benefits and entitlements to the members under the old scheme are protected and continue under the new Pension Scheme, 1995. The Scheme on its application applies to all existing members of the Provident Fund who were contributing to the Employees Family Pension Scheme, 1971. The new entrants to the membership of Provident Fund from 16.11.1995 onwards shall also acquire membership of the scheme on compulsory basis. The existing members of the Provident Fund who did not opt for joining the erstwhile Employees Family Pension Scheme, 1971 shall have a option to join the new Pension Scheme. The Employees Pension Scheme though effective from 16.11.1995 has a provision for retrospective application from 1.04.1993 in selective cases for outgoing members of the ceased Employees Family Pension Scheme, 1971 during the period between 1.04.93 to 15.11.95. Members of the old scheme who died between 1.04.1993 and 16.11.1995 are deemed to join the new scheme and their beneficiaries are entitled for the pensionary benefits under EPS-1995. Benefits and Eligibility The Employees Pension Scheme, 1995 provides the following varied benefits to the members and their families I. Monthly Member Pension: Superannuation Pension: With a minimum service of 10 years and attaining the age of superannuation. Early Pension:

With a minimum service of 10 years and any time before attaining the age of superannuation but after 50 years of age provided the member retires or otherwise ceases to be in employment. II. Disablement Pension Paid to the member on permanent and total disablement during the service if at least one months contribution has been paid. III. Widow/Widower The widow or widower pension shall be payable to the spouse of the member when member dies While in service Away from Service As a pensioner This pension is payable upto the death of the spouse or upto date of remarriage whichever is earlier. IV. Children Pension The children pension to each child shall be 25% of the widow/widower pension and is payable to two children at a time upto their age of 25 years and will run from the oldest to the younger in that order. The pension shall be paid concurrently along with the widow/widower pension. The legally adopted children of the member are also eligible for children pension V. Orphan Pension The orphan pension to each child shall be 75% of the widow/widower pension and is payable to two children at a time up to their age of 25 years and will run from the oldest to the younger in that order, on the death or remarriage of the spouse of the member. VI. Disabled Children/Orphan Pension If the child or children of the member is/are permanently or totally disabled at the time of death of the member, then a disabled children or orphan pension is payable up to the entire lifetime of the child irrespective of the age and number of children in the family in addition to the normal children/orphan pension payable to the other normal children. VII. Nominee Pension

If there is no spouse or an eligible child for the member on his death, then the nominee executed through the Nomination proforma in Form 2 for the EPS-95 would be eligible to get a nominee pension up to his/her life time with quantum of pension same as the widow pension. VIII. Pension to the dependent father/mother If there is no spouse, children or a valid nominee to a member, then a pension equal to the widow pension shall be payable to the dependant father up to his death and then to the dependant mother up to her entire life time. Previously under the old Employees Family Pension Scheme, 1971, only widow/widower pension was payable, in case of only death while in reckonable service and prior to completion of 60 years of age. In absence of widow or on cessation of Widow Pension, pension was payable to the eldest child up to the age of 25 years and then it was to pass on to the younger children, one at a time, subject to the age limit of of 25 years. There was no provision for pension to member and capital return or commutation or disablement pension. At the time of leaving the service, the employee was entitled to withdrawal benefit only. METHOD OF CALCULATION OF PENSION AND THE MINIMUM AMOUNT PRESCRIBED Monthly Member Pension The quantum of pension payable to a member on superannuation and/or exit from service on attaining the age 58/50 years shall correspond to the period of pensionable service rendered by the member and his pensionable salary i.e. the last twelve months average pay drawn by him at the time of exit. The pension is calculated by the formula (Pension Salary x Pensionable Salary) 70 Those retiring after 16-11-1995, shall have also the benefit of past service pension for the period of membership under the erstwhile Employees Family Pension Scheme, 1971 on factor formula basis provided in Paragraph 12(3) in the EPS1995 as below:However, the amount shall be multiplied by the corresponding Table B factor for the period that had elapsed between 16-11-1995 and the date of

exit is date of attaining 58 years for superannuation/early pension, date of death for widow/widower pension and date of disablement for disablement pension. Both the amounts would be aggregated to calculate the total monthly member pension subject to the minimums prescribed as below: If the members dies away from service before 58 with service of less than 10 years then Widow Pension = Table C factor, if the member is a bachelor otherwise a lump-sum amount equal to 100 times of pension payable to the nominee or patent If the member dies as a pensioner then Widow Pension = 50% of the Member Pension (or) Rs.450/-, whichever is higher Children Pension 25% of the widow pension calculated as above or Rs.150/-whichever is higher Orphan Pension 75% of the widow pension calculated as above or Rs.250/whichever is higher If the members dies away from service before 58 with service of less than 10 years then Widow Pension = Table C factor, if the member is a bachelor otherwise a lumpsum amount equal to 100 times of pension payable to the nominee or patent If the member dies as a pensioner then Widow Pension = 50% of the Member Pension (or) Rs.450/-, whichever is higher Children Pension 25% of the widow pension calculated as above or Rs.150/-whichever is higher Orphan Pension 75% of the widow pension calculated as above or Rs.250/- whichever is higher If the members dies away from service before 58 with service of less than 10 years then Widow Pension = Table C factor, if the member is a bachelor otherwise a lump-sum amount equal to 100 times of pension payable to the nominee or patent If the member dies as a pensioner then Widow Pension = 50% of the Member Pension (or) Rs.450/-, whichever is higher Children Pension 25% of the widow pension calculated as above or Rs.150/-whichever is higher Orphan Pension 75% of the widow pension calculated as above or Rs.250/whichever is higher

New Pension Scheme 2009

AUTHORITY (PFRDA) Pension Fund Regulatory and Development Authority (PFRDA) was established by the Government of India on 10th October 2003 to promote old age income security by establishing, developing and regulating pension funds, to protect the interests of subscribers to schemes of pension funds and for matters connected therewith or incidental thereto. 1. The Central Government has introduced the New Pension System (NPS) with effect from 01 January 2004. The new pension system covers, at present, new entrants to Central Government services (excluding Armed Forces) some State Government services and autonomous bodies at their discretion and all citizens of India on a voluntary basis with effect from 1st May 2009. 2. The NPS is based on a unique individual Permanent Retirement Account Number (PRAN) created for individual subscribers. In this system, a subscriber shall periodically contribute savings into his/her Permanent Retirement Account (PRA) while he/she is working and shall use the accumulations at retirement to procure a pension for the rest of his/her life. Subscribers in this system shall enjoy a variety of important facilities and rights including portability across jobs and locations, rights and choices regarding selection of Pension Fund(s) and schemes, freedom to switch between Pension Funds and service providers and nationwide access over a period of time. 3. PFRDA has already put in place the institutional framework and infrastructure required for administering the 'New Pension System' (NPS) for government employees. Various institutional entities such as Central Record Keeping Agency (CRA), Pension Fund Managers (PFM), Trustee Bank (TB), Custodian and NPS Trust have been appointed and are now functional. 4. The recordkeeping and administration functions for all subscribers of the New Pension System will be centralized and performed by a Central Recordkeeping Agency (CRA). The CRA will issue the unique PRAN to each subscriber, maintain a master database of all pension accounts and record the transactions related to each subscriber's PRAN.

5. This pension system is envisaged to be based on two types of sub-accounts created for individual subscribers: a. Tier-I non-withdrawal pension account, And b. Tier-II withdrawable savings account. 6. PFRDA has already appointed 21 Points of Presence (PoP) and is now undertaking the task of expanding the Pop network for all citizens of India. For this purpose, PFRDA proposes to select and authorize entities as Points of Presence (POPs) to extend customer interface for non-government subscribers/individual citizens. PFRDA has undertaken the process of registration of PoP(s) in phases. This is the second phase of registration in which interested entities fulfilling the eligibility criteria as laid down in this document will be registered as PoP(s). 7. PFRDA will authorize designated branches of PoP(s) as service providers. Such authorized branches will henceforth be referred to as POP-Service Providers (POPSP). PoP-SPs shall offer to all account holders all services related to the NPS and PRA, as may be specified by PFRDA from time to time. 8. The POPs and associated POP-SPs shall also abide by such regulations, directions and guidelines that PFRDA may issue from time to time. 9. All the eligible bidders are requested to note that the current selection of PoP(s) is for expanding the existing network of PoPs for all citizens of India. 10. The proposed appointment of PoP(s) will be valid for 5 years subject, however, to review on the passage of the PFRDA Bill. The PoP(s) are expected to commence their operations immediately after entering into agreement with PFRDA.

Graphic Representation of NPS Architecture

The key stakeholders of the New Pension System are as follows: Pension Fund Regulatory and Development Authority (PFRDA) PFRDA is the regulator for the NPS. PFRDA is responsible for appointment of various intermediaries in the system such as Central Record Keeping Agency (CRA), Pension Funds, Custodians, NPS Trustee Bank, etc. PFRDA shall also monitor the performance of the various intermediaries. PFRDA has a significant role to play in safeguarding the interest of subscribers. It will regulate the manner

in which subscriber contributions are invested by PF(s) and will make all efforts to ensure fair play for subscribers. It shall also ensure that all stakeholders comply with the guidelines/regulations issued by PFRDA from time to time. Central Recordkeeping Agency (CRA) The recordkeeping, administration and customer service functions for all subscribers of the New Pension System will be centralized and performed by the CRA. The CRA shall, on the basis of instructions received from subscribers, transmit such instructions to the appointed Pension Funds on a regular basis. The CRA will also provide periodic, consolidated PRAN statements to each subscriber. Pension Funds (PFs)/Pension Fund Managers Appointed PFs would manage the retirement savings of subscribers under the NPS. PFs would use their secure access codes to confirm receipt of netted assets and instructions regarding fund allocation, confirm allocation of funds and communicate the NAV of each scheme to CRA on a regular basis. The PFs will be required to invest strictly in accordance with guidelines issued by the PFRDA. Annuity Service Provider (ASP) ASPs would be responsible for delivering a regular monthly pension to the subscriber for the rest of his/her life. On receipt of personal and banking information details of subscriber from CRA and of specified sum from the trustee bank the ASP would use its access codes to confirm receipt. ASP would then begin payments of annuities to the subscriber. Trust & Trustee Bank (TB) A Trust would be responsible for taking care of the funds under the NPS. The Trust would hold an account with a bank and this bank would be designated as NPS Trustee Bank. NPS Trustee Bank will facilitate fund transfers across various entities of NPS system viz. PFM, Annuity Service Providers, subscriber, etc. PFRDA has already established NPS Trust under the provisions of the Indian Trusts Act w.e.f. 27th February 2008 and Bank of India is functioning as NPS Trustee Bank. The NPS Trust is being administered by the Board of Trustees, as constituted by the PFRDA. Point of Presence (POP) POP shall be the first point of interaction between the voluntary subscriber and the NPS architecture. PoP shall perform the functions relating to registration of subscribers, undertaking Know Your Customer (KYC) verification, receiving contributions and instructions from subscribers and transmission of the same to

designated NPS intermediaries. Detailed functions to be performed by the PoP(s) are listed out in section 2 of this RFP., PoP(s) and their authorized branches (PoPSPs) shall also be required to comply with the provisions of the Prevention of Money Laundering (PML) Act , 2002 and the rules framed thereunder, as may be

Application, from time to time Voluntary Subscribers Subscribers will have complete control on how their contributions and savings in PRAN are managed. They will be able to select a professional Pension Fund ( PF) from a pool of competing Pension Funds. Each PF in this system will offer a limited number of simple, standard investment schemes with different risk and return profiles. They will also be able to seamlessly switch savings between investment schemes subject to such conditions as prescribed by PFRDA from time to time. FUNCTION OF POPs The following sets of functions are primarily expected from PoP/PoP-SP. However, these are not exhaustive INITIAL CUSTOMER INTERACTION FOR NPS a) Addressing queries of potential subscribers regarding NPS. b) Providing and displaying PFRDA approved information/material on NPS and application form/ offer document/other publicity material The application and other request forms as prescribed by PFRDA for various services under NPS would be required to be printed, stored and made available to NPS subscribers by the PoP. In addition, these forms shall also be made available in downloadable format on the PFRDA, PoP and CRA websites. SUBSCRIBER REGISTRATION a) Receive the duly filled application form along with the KYC documentation as may be applicable from time to time. b) Verification of KYC documents as may be required from time to time. c) At the time of registration, PoP-SP shall collect and verify contributions that may be received through cash/cheque/Demand Draft. d) Collection/deduction of NPS application processing fees and issue of receipt to the subscriber against the same. e) Duly accepted application form shall be submitted on a daily basis, to CRA/CRA-Facilitation Centre (FC) for digitization by hand where the PoP-SP and the CRA-FC are co-located. Where the PoP-SP and CRA-FC are not co-located,

the former shall have the option to transmit the documents (original application form along with documents) to the nearest CRA-FC either by hand or through post. For the purpose, PFRDA/CRA may map PoP-SP(s) to nearest CRA-FC location. f) Currently CRA-FC(s) are existing in approx 50 cities. g) CRA would, on successful digitization, dispatch the PRAN kit directly to the subscriber. The CRA shall also inform the PoP-SP of the PRAN numbers allotted to its subscribers.

h) On receipt of PRAN numbers, PoP-SP shall upload the subscriber contribution files into CRA system and simultaneously arrange to transfer the funds into the account of the NPS trust maintained with the Trustee Bank. For this purpose, the PoP/PoP-sp. is expected to maintain a separate, earmarked account for the NPS contributions received. i) The initial contribution of subscriber shall be remitted to the trustee bank on the day it receives information from CRA about the PRAN number allotment to the subscriber j) On successful digitization, the CRA shall retain the original NPS application form and the KYC documents for storage. MAINTENANCE OF HARD COPIES AND RECORD OF TRANSACTIONS (i) PoPs and PoP-SPs shall ensure maintenance, reporting and retention of records of all transactions in accordance with the provisions of PML Act, 2002 and Rules framed thereunder, as may be applicable, from time to time. (ii)CRA shall store hardcopy of the NPS application form and other supporting documents submitted by the subscriber at the time of registration towards fulfilling the KYC norms. In addition, CRA shall also maintain documents submitted by the subscribers for effecting any changes in demographic details. Note: NSDL/CRA has agreed to store the hard copy documents on behalf of PoP/PoP-SP. This arrangement would, accordingly, need to be formalised in writing between the PoP/PoP-SP and NSDL. NSDL shall however not be charging PoP/PoP-SP for storage of such KYC documentation. The responsibility for KYC verification shall, however, be that of PoP/PoP-SP. REGULAR SUBSCRIBER CONTRIBUTION UPLOAD a) Verify PRAN card details on the deposit slip, the format for which shall be prescribed by PFRDA.

b) Collection and verification of contributions that may be received through cash/cheque/Demand Draft/ Electronic Clearing System (ECS). c) Collection/deduction of contribution processing fee and issue of receipt to the subscriber against the same.

d) Uploading subscriber contribution details online into the CRA system, in respect of subscribers for whom clear funds are available, on a daily basis. e) Remit clear funds into the account of the NPS trust maintained with the Trustee Bank on a T+1 basis. f) Maintain hard copies of deposit slips SUBSCRIBER SERVICING On a regular basis, PoP/PoP- SP is expected to provide following range of services to the NPS subscribers: a) Carry out changes in subscriber details on request by subscriber subject to the conditions stipulated by PFRDA. b) Receiving switch request for change in PFM and/or investment option from subscriber and transmitting the same to CRA. c) Receiving withdrawal requests from subscriber and transmitting the same to CRA. For this purpose, subscriber would put in a withdrawal request to PoP-SP. The subscriber's corpus would be credited directly to his bank account by trustee bank, on receiving instructions from CRA, through RTGS/NEFT or by way of a pay order where his/her personal bank details are not available. d) Attending to subscriber's request for shift to another PoP-SP. - Recording the request - Updating records in CRA system. e) Any other NPS account related service as may be prescribed by PFRDA from time to time In order to execute above instructions/requests PoP/PoP-SP shall follow maker - checker principle. GRIEVANCE HANDLING

PoP/PoP-SP shall be expected to carry out the following in respect of receiving, transmitting, verification and redressal of grievances from the subscribers and other NPS Intermediaries: a) Receiving of grievances submitted by the subscriber against PoP / PoP-SP or any other NPS Intermediary in the format prescribed by PFRDA and uploading of all grievances in the Central Grievance Management System (CGMS) of CRA on a daily basis. The CGMS system of CRA would route the grievances to respective NPS intermediaries. b) Subscriber may, in addition, raise grievances against the PoP/PoP-SP, at the CRA call centre or electronically through CGMS. c) Receiving grievances raised by the subscriber against PoP/PoP-SP through the CRA call centre/CGMS of CRA by accessing the CGMS. d) If PoP/PoP-SP has grievances against any NPS Intermediary such as CRA or TB, it shall raise grievance using CGMS of the CRA or at the CRA call centre. The grievances relating to PoP/PoP-SP raised either by the subscriber or by the NPS Intermediary shall be resolved within 7 days of receiving of grievance and the resolution shall be posted in the CGMS system for each grievance. Supporting CGMS infrastructure will be available with CRA system.

INTER/INTRA POP OPERABILITY CRITERIA FOR DELIVERY OF SERVICES

TECHNICAL ELIGIBILITY CRITEREA FOR PoP Any institution bidding for PoP Registration is required to fulfill following basic technical eligibility condition to be registered as PoP under NPS. a) Regulated by both Reserve Bank of India, Securities and Exchange Board of India or Insurance Regulatory and Development Authority.

b) Having a minimum of 25 branches, covering at least 25 districts spreading over 3 or more States with each branch conforming to IT infrastructure and capacity to electronically link to the CRA (detailed IT requirement as mentioned in section 3.2 of this document). Each of these branches should have demonstrated capability to electronically transmit in an efficient and secured manner clear NPS subscriber contribution and subscriber information on at least "T+1" basis. c) Minimum net worth (paid-up capital+reserves+surplus) of INR 1.00 Cr as on 31st March 2009. d) A three year track record of profitability (Profit after tax) as of 31st March 2009. e) The institution should be in business of marketing/selling of retail financial service Note: While a PoP must satisfy conditions at (a) to (e) above, any branch of the PoP seeking authorization from PFRDA to function as PoP-SP will have to satisfy the requirement of conforming to IT capability which will enable it to transfer funds and information on at least "T+1" basis. REGISTRATION OF CONTRACT REGISTRATION CRITERIA Any bidder who satisfies all the technical eligibility conditions laid out in this RFP and submits the requisite commercial undertaking as specified in Annexure V will qualify for registration as PoP under NPS. The bidder has to provide sufficient evidence of being a responsible and responsive bidder whose proposal conforms to the RFP. PFRDA'S RIGHT TO ACCEPT OR REJECT ANY OR ALL PROPOSALS The PFRDA reserves the right to accept or reject any proposal, and to annul the RFP process and reject all proposals at any time prior to award of contract, without incurring any liability to the affected bidder or bidders or any obligation to inform the affected bidder or bidders of the grounds for PFRDA's action. NOTIFICATION OF AWARD Prior to expiry of the validity period, PFRDA will notify the successful bidder in writing that its proposal has been accepted..Immediately on receipt of acceptance letter from PFRDA, the successful bidder should initiate the process of registration

of its branches as PoP-SP. The successful bidder should log on to the NPS architecture and establish necessary connectivity with CRA and Trustee Bank so as to be ready for participating in Orientation programme. The authorised and registered branches (PoP-SP) of the PoP should become fully operational and registration of minimum 25 branches completed within time frame prescribed by PFRDA in the contracts SIGNING OF CONTRACT Once the PFRDA notifies the successful bidders that their proposal has been accepted, PFRDA shall enter into a separate contract, incorporating service level agreements (will be provided in detail to successful bidders separately) between PFRDA and the successful bidders. PROCESSING FEE AND PERFORMANCE BANK GUARANTEE Processing Fee of Rs. 25,000/- (Rupees Twenty Five Thousand only) in the form of DD drawn in favour of "The Pension Fund Regulatory and Development Authority" and payable at New Delhi must be submitted along with the Technical Bid. The successful bidder shall at its own expense deposit with PFRDA, within fifteen (15) working days of the date of announcement of eligibility or prior to signing of the contract whichever is earlier, an unconditional and irrevocable Performance Bank Guarantee (PBG) from a scheduled bank acceptable to the PFRDA, payable on demand, for the due performance and fulfilment of the contract by the bidder. The Performance Bank Guarantee will be of Rs. 500,000 (Rupees Five Lakh only). All incidental charges whatsoever such as premium, commission etc. with respect to the Performance Bank Guarantee shall be borne by the bidder. The PBG shall be valid till 120 days after the completion of the registration period/termination of the registration. In the event of the bidder being unable to service the contract for whatever reason, the PFRDA would invoke the PBG. Notwithstanding and without prejudice to any rights whatsoever of the PFRDA under the contract in the matter, the proceeds of the PBG shall be payable to the PFRDA as compensation for the bidder's failure to perform/comply with its obligations under the contract. The PFRDA shall notify the bidder in writing of the exercise of its right to receive such compensation within 14 days, indicating the contractual obligation(s) for which the bidder is in default. Before invoking the PBG, the vendor will be given an opportunity to represent before the PFRDA. The decision of the PFRDA on the representation given by the vendor shall be final and binding. If circumstances so warrant, the matter may be referred to an arbitrator to be appointed by the PFRDA in consultation with registered Pop.

REGISTRATIONFEES Due to the fact that NPS is at its development stage no registration fee has been prescribed for PoP at present. PFRDA, however, reserves the right to impose registration fees for PoP in due course. POP REGISTRATION CONDITION On signing of the contract with PFRDA, the successful bidder would be allowed to operate as POP for NPS under the following terms and conditions. RENEWAL OF REGISTRATION AFTER THE FIVE YEAR TERM The initial registration period as PoP will be for 5 (five) years. After the completion of the five years term, the PoP will be required to re-bid to be considered for subsequent appointment as a PoP. The selection process and criteria may be different from the criteria adopted in the present process. On an ongoing basis, PFRDA or the NPS Trust at their discretion may register more PoP(s) and also review the performance of the existing PoP (s) GOVERNING LAWS/ JURISDICTION ARBITRATION Any matter relating to the appointment of PoP shall be governed by the Laws of Union of India. Only Courts at New Delhi (with exclusion of all other Courts) shall have the jurisdiction to decide or adjudicate on any matter or dispute which may arise. TERMINATION OF THE REGISTRATION

The initial registration of PoP(s) will be for a period of 5 (five) years. The tenure of registration of the PoP will end if: 1) PoP contravenes the conditions/clauses as specified in the contract with PFRDA; or 2) At the end of the tenure as specified in the letter of registration. PoP once registered will have to ensure that the eligibility conditions laid out in this RFP are strictly adhered to during the entire currency of the registration period and any extension thereto. A certificate evidencing compliance with the eligibility conditions shall have to be furnished by the registered PoP to PFRDA on annual basis within 15 days of completion of each financial year. Minimum Contribution by an Individual Subscriber The minimum contribution by an individual subscriber is Rs. 500 per month or Rs.6000 per year and a minimum number of 4 contributions per year. Benefits of NPS 2009 It is voluntary on the part of the Indian citizen to choose their own contribution to the pension fund. It is simple to open an account with any one PoP and get their PRAN. It is optional on the part of the subscriber to choose their own investment option. It can be exchanged in between the cities and jobs as well as the pension fund managers. It is regulated by PFRDA, with transparent investment norms and regular monitoring and performance review of Fund Manager by NPS trust. On attaining normal retirement age (60YEARS)

there should be compulsorily annuitize of 40% of the total fund and the rest 60% can be withdrawn in a lump sum or in a phased manner. In case if the subscriber opt for phrasal withdrawal, Minimum 10% of the pension wealth should be withdrawn every year. Any amount lying to the credit at the age of 70 years should be compulsorily withdrawn INVESTMENT CHOICE The NPS would have two choices in front of the subscriber. Active Choice Individual Funds (Asset Class E, Asset Class C and Asset Class G) Auto Choice Lifecycle Fund Active Choice Individual Fund It is at the will of the subscriber to decide the investment option of the NPS Pension Wealth. Asset Class E investment in predominantly in equity market instrument Asset Class C investment in fixed income instruments other than Government Securities Asset Class G investments in Government Securities If the subscriber opts for Asset Class E then 50% of the fund would be invested in Equity, 30% in Government Securities and the rest 20% in corporate bonds and other income instrument other than Government Securities. If the subscriber opts for Asset Class C, then 100% of the fund would be invested in Corporate Bonds and other fixed income instruments other than the government securities. The option of Asset Class G would give the subscriber a choice to invest 100% in Government Securities.

Findings on Active Choice: The subscribers have to consider the both risk and return part of investment. The E Asset Class has higher potential return than the G Class Asset. But it also carries the risk of investment loss. Investing entirely in Asset Class G would not give a higher return but is a safer option. It is advisable to reduce the risk by diversifying the investment. The three individual assets allow broad range of investment options, its good not to put all eggs in one basket. The amount of risk the subscriber can sustain depends upon the investment time horizon. The more the time the subscribers have before investment, the more risk the subscriber can take. (This is because early losses can be later offset by later gain. Periodically the subscriber should review the investment choices and check the distribution of his/her account balance among the funds to make sure that the mix they choose is still appropriate for his/her situation. If not, rebalance the account to get the allocation they want. Auto Choice: NPS offers an easy option for those subscribers who do not have the required knowledge their NPS investments. In case the subscriber is unable/unwilling to exercise any choice as regards to asset allocation, their fund would be investment in a ccordance with the Auto Choice option.

TABLE OF LIFE CYCLE FUND AGE Upto 35 years 36 years 37 years 38 years 39 years

ASSET CLASS E

ASSET CLASS C

ASSET CLASS G

50% 48% 46% 44% 42%

30% 29% 28% 27% 26%

20% 23% 26% 29% 32%

40 years 41 years 42 years 43 years 44 years 45 years 46 years 47 years 48 years 49 years 50 years 51 years 52 years 53 years 54 years 55 years

40% 38% 36% 34% 32% 30% 28% 26% 24% 22% 20% 18% 16% 14% 12% 10%

25% 24% 23% 22% 21% 20% 19% 18% 17% 16% 15% 14% 13% 12% 11% 10%

35% 38% 41% 44% 47% 50% 53% 56% 59% 62% 65% 68% 71% 74% 77% 80%

CHARGES NPS offers Indian citizen a low cost option for planning their retirement. A 0.0009% fee (based on Asset under Management) is charged for managing the wealth, makes the pension funds under NPS perhaps the worlds lowest cost money manager. Following are the charges under NPS: STATEMENT OF PROBLEM It was hard on our part to define a problem because both of EPS-1995 and NPS2009 have their own pros and cons. But still we have to find out from both of this Pension Scheme that which one is better for the Pensioner. Because both of this Scheme are the part of Social Security. And Social Security is about securing the income of citizen of a country whether it may be at the time of old age, sickness or death of earning member. So it is for the well being of citizen of a country. And Government of India, in order to lessen the burden of expenditure along with maximum benefit to the pensioner, replaced the EPS 95 by NPS 2009. In EPS, the contribution was made by employers and the employees and the accumulated fund will also bear the contribution from the Government of India. Government

contributed to this fund Rs.2500 Crore (fig. as in2006) annually. And on the NPS part, Government will have no contribution to the Pension Fund. Government is in full support of this scheme. But the biggest drawback in this scheme is when the pensioner while withdrawing 60% of the fund at time of retirement would have to pay the tax on it. Even the PFRDA got only Rs. 8 Crore for the advertisement campaign to create the awareness of NPS - 2009 which is very less. The six fund manager will get only 0.0009% fee on the total fund held by them. So it is not luring for the fund managers. Because in comparison to the other funds, this funds carries a very low rate. And this may affect the interest of the fund managers to promote the pension fund among other financial products. OBJECTIVE To find out the better scheme for the pensioner of PSU To analyze the pros and cons of both of the scheme. Elaboration of the objective The Government of India has designed these pension schemes namely Employees Family Pension Scheme 1971, Employees Pension Scheme 1995, New Pension Scheme 2009 to secure the income of the working mass of India at the time old age, death or inability to work. Through the aspect study of EPS 1995 and NPS 2009 we can find out the pros and cons of both of the schemes.

METHODOLOGY a) Type of Study: The study is based on the analysis of the data provided by the NALCO Employees Provident Fund Trust (NEPFT). The data provided by the NEPFT was based on the Phase-I conversion of EPS account to NPS account which included the conversion of 1247 out of 7459 EPS accounts b) Type of Data: The data can be divided into two categories namely primary data and secondary data. Primary Data: The primary data was collected from the NEPFT and the data provided by them. The PRAN entry also helped me a lot to analyze the data and to find out the number of accounts in NPS-2009. Secondary Data: This type of data was collected from various websites and journal to find out various circulars and notification issued by the Government of India and PFRDA regarding the New Pension Scheme as well as the Social Security. The secondary data was also helpful in providing data regarding the Employees Pension Scheme 1995. c) Sources of Data: The sources of the data were the data provided by the NEPFT and Financial Report and other financial statement was provided by the financial department of NALCO. And for the part of the secondary data source, the circulars and notification of PFRDA and the Government of India, internet was used. Facts and Findings about NPS 2009 Investment in New Pension Scheme 2009 is exempted from Security Transaction Tax and Dividend Distribution Tax. The NPS 2009 is being put under Exempt Exempt Tax (EET) regime with the majority amount is being taxed. Final Receipt from NPS 2009 is taxed, unless it is being invested in the annuity in the same financial year.

Other Peer products like Provident Fund and Public Provident Fund is not being taxed at any stage and is under Triple Exempt Regime. RESULTS/FINDING The Pensioner, in NPS 2009, is given option to decide where the money in the fund would be invested. There would three options in front of the Pensioner to decide their investment channel. The three options would be G, C and E. The return from the NPS would be better than the Provident fund and EPS 1995 but it is not exempted from tax as the peer products are. Even another drawback in the NPS is that it is a financial market product and its benefit and schemes are need to be well-communicated and advertised. But unfortunately the record keeper or the fund managers get very low incentives and they cannot spare a part of it for promotions. The positive side for the NPS is that there are 40 Crore of working population in India but only 12-13% are enrolled under the EPS -1995 so there is still a scope to bring the rest of the working population to take into its grip. Where as in EPS 1995, the employee do not get any option to decide their investment patterns. Moreover in EPS 1995, the return is lower than the NPS 2009. The positive side of EPS 1995 would be that it is not taxable at any point of time as it is in NPS 2009 CONCLUSION AND RECOMMENDATION The EPS 1995 has a larger liking than that of the NPS because of the promotions and knowledge the pensioner have about the benefits in EPS 1995. People also have a very wrong perception about the NPS that it is a financial market product so it is more risky than EPS 1995. Pensioners need a secure investment option to plan their retirement so they prefer EPS more over NPS. Moreover the amount at the maturity of the NPA depends upon the NAV at the time of retirement. But the NPS 2009 is better than EPS 1995 on the aspect of transparency and the Pensioner get the option to plan out the investment strategy of their pension fund. The return on the pension fund is better than EPS 1995. In NALCO only 1247 employees out of 7459 are enrolled under NPS 2009. Most of them were from Corporate of NALCO. This proves that the employees in the middle level and top level management are more enrolled in the NPS 2009

Recommendation: The Government needs to think over the recommendation given by the PFRDA to make the amount at the maturity of Pension Fund tax-free. The Government needs to think over the increase in the money allocated for the promotion of NPS. The PFRDA as well as the Government should try to increase the fund manager fee so as to encourage them to promote NPS over and along other Pension Scheme and other retirement investment plan. The lack of knowledge and promotion is one of the major lacunae which the Government should think upon. On the part of NALCO, the NEPFT should carry out extensive promotional activity like seminars among the labors and labor union.

REFERENCE Annual Report 2007-08, 2008-09 of NALCO Circulars of PFRDA to NEPFT CSR report of NALCO Article of Association of NALCO http://www.nalcoindia.com/newsdefault.htm http://www.nalcoindia.com/productsmain.asp http://www.nalcoindia.com/productsmain.asp http://pblabour.gov.in/pdf/acts_rules/maternity_benefit_act_1961.pdf http://pfrda.org.in/ http://www.dnaindia.com/money/report_a-layman-s-guide-to-the-new-pensionscheme_1253551 http://epfindia.nic.in/pension.htm http://www.youtube.com/watch?v=krmKmpJoDwg http://www.youtube.com/watch?v=8fuh_gkX9H