ACKNOWLEDGEMENT

A formal statement of acknowledgement will hardly meet the ends of justice and obligation to all those who helped us in completion of this project named ESI & PF. I am extremely grateful to the management of the Sukhjit Starch and Chemicals ltd Phagwara for allowing me to undergo this project in their company and providing all sort of facilities. I am highly obliged to manager V.K. Suri and Mr. N.K. Kapoor for their valuable contribution. I am indebted to Ms. Ruchi Sharma who provided reviews and suggestions for improving the material covered in project. I also want to express my sincere gratitude to all my friends who encouraged me to face the problem with easy and complete my project report successfully In the end I extend my apology to anyone I may failed to mention.

Neha Kumari

INTRODUCTION AND HISTORY OF COMPANY

Present study is conducted to analyze the financial position in Sukhjit Starch & Chemicals Phagwara. Sukhjit Starch & Chemicals ltd is a leading company engaged in the production of maize starch ,liquid glucose ,dextrose monohydrate and other derivatives ,for the last more than six decades. The company is founded by Sh.B.K.Sardana and Sh.B.D.Sardana. Sh.Sudesh Bhagat .Sh.B.K.Sardana was its first managing director in the year 1943. At present Sh.I.K.Sardana is managing director who is being assisted by senior professional executives and technical staff. The company appear to be an the forefront of starch industries in the from the point of view of productivity and profitability. The Sukhjit Starch & Chemicals ltd. was incorporated in the 1943. It was converted into a joint stock company on the 16 march 1944. The company was inaugurated on 15 march 1943 by his highness The King of Kapurthala Sardar Jagjit Singh. The main objective of company is to provide product specialty to meet the needs of food industry. Achieving success is something which seems to be written on the natal chart of Sukhjit Starch & Chemicals ltd. Phagwara more than six decades ago two young entrepreneur spotted the immense chemicals potential of the humble maize ideally situated in Phagwara, Punjab (The graining of India) ,Sukhjit Starch & Chemicals ltd has grown by leaps and bounds of judicious and innovative utilization of its tradition to meet the challenges of future . As in 1943, Sukhjit Starch & Chemicals ltd.was a small scale unit having a daily production of 5 tones and it is today conglomerate of entrepreneur performing both at the national and international levels. The group is managed by highly skilled and capable professional and is headed by a well experienced board of directors . A double prolonged approach using the state of art technology as well as exploiting indigene nous potential of the organization that has served it well years of research and careful coordination of the methodology has resulted in qualitatively superior products manufactured by cost effective production techniques. The company occupies a unique place and enjoys excellent credit worthiness and goodwill amongst its creditor, suppliers, customers and bankers. It has been enjoying excellent labor management relation for the last many years. The company is fully conscious of its social obligations, besides making ,liberal contribution towards donation to various public charitable institution . The company has also financed two water supply scheme for two villages at Nizamabad under rural development programmed. Last but not the least , the company has handsomely rewarded its shareholders and has liberally been playing the dividends for last more than 21 years with period bonus issues.
2

PROFILE OF THE COMPANY

Company Status Date of incorporation Date of commencement of business Date of conversion into Joint Stock Company Construction Sector Head Office Group Industries Branch of company 15th March 1943 1st April 1943 16th March 1944 Public ltd Company Private Sarai Road, Phagwara Sukhjit Group of Industries Phagwara, Mumbai, Nizamabad,Malda. Location Phones in Phagwara Sarai Road, Phagwara 01824-260314, 260216, 260758,261669,262077 E-mail Sukhjit@Come connect. Com

ACHIEVEMENTS OF THE COMPANY

1944 1946 1947 1965 Conversion into public ltd company Paid up capital raised to rs.6 lakhs Paid up capital raised to rs.9 lakhs Modernization of plant by importing machinery from USA and Germany 1969 1972 1976 Set up the liquid glucose plant Capital rose up to 18 lakhs Capital rose up to 26 lakhs by issuing bonus Shares 1980 Acquisition of Vijoy steel to general mill Company 1981 Capital rose up to rs.48 lakhs by issuing right Shares to shareholders, issue of debenture, Of rs.1 crore with 20% conversion 1985 1986 1987 Set up similar unit in Nizamabad Acquire Haryana oils soya ltd. Installation of dextrose monohydrate with Indigenous Machinery 1993 1994 1995 1998 Set up Sorbital plant in august Set up dextrose anhydrate plant Incorporation of sukhjits finance ltd. Modernization and expansion of starch plant at Phagwara

1999

Modernizations and expansion of starch plant at Nizamabad

2002

Company being awarded quality system {ISO 9000:2000} certificate

2003 2004 2006-07

Set up a similar unit in Malda Achievement of Rs.99 crores in turnover We have achieve a recorded turnover of rs.175 Crores

2006-07

Setting of Sukhjit Argo Industries village Bathu

BOARD OF DIRECTOR

Sh.V.K.Sardana Sh.I.K.Sardana Sh.K.K.Sardana Sh.S.M.Jindal Sh.S.C.Jindal

Non-executive directors Managing director Joint managing director Executive director Non-executive chairman, Independent director

Sh.A.K.Sardana Sh.Naresh Sardana Sh.S.K.Anand Sh.V.P.Kaparchi Bankers Punjab National Bank G.T.Road Phagwara 144401 Auditor Y.K. Sood and Co. Charted Accountant Durga Niwas, Civil Lines Jalandhar

Non-executive director Non-executive director Independent director Independent director

Licensed Capacity

Maize starch Glucose High fructose syrup Sorbitor Molto dextrin Dextrose anhydrogene Dextrin

Capacity not mentioned 22600 MT per annum 5000 MT per annum Capacity not mentioned 1000 MT per annum 1000 MT per annum Capacity not mentioned

WHY I SELECTED SUKHJIT STARCH AND CHEMICALS LTD

Sukhjit Starch Mill & Chemicals ltd is a well establish company from the viewpoint of profitability and productivity. The company is on the forefront of starch industry and also in the country. I was interested in knowing about the company and its performance appraisal. So I have to to consider each & every point concerning the topic . The main highlights of choosing the company are:1. Company is well known for its productivity and profitability. 2. Company enjoys an excellent reputation and goodwill among customers, suppliers and actually every party to whom it is concerned. 3. Company has healthy and sound relationship network in internal working environment. 4. Moreover, the company has fulfilled its responsibility towards society in an efficient manner.

RESEARCH METHODOLOGY

During my training period ,I underwent training in Sukhjit Starch & Chemicals ltd Phagwara.I collected the information from the primary as well as secondary resources. A. Primary Sources- Discussion with the keeping departments and by observation method. B. Secondary Sources-Records maintain by organization, web site.

INTRODUCTION TO EMPLOYEE STATE INSURANCE

Acc. To Employee , any person employed for wages in or in connection with the work of a factory or establishment to which this act applied and (1)who is directly employed by the principal employer on any work of ,or incidental or preliminary employed to or connected with the work of the factory or establishment whether such work is done by the employee in the factory or establishment or elsewhere or(2) who is employed by or through an immediate employee on the premises of the factory or establishment or under the supervision of the principal employer of his agent on work which us ordinarily part of the work of the factory or establishment or whish is preliminary to the work carried on in or incidental to the purpose of the factory or establishment or(3) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so. Lent or let on hire has entered into a contract of services ,and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part , department or branch thereof or with the purchase of raw material for , or the distribution or sale of the products of the factory or establishment or any person engaged as an apprentice, not being apprentice engaged under the apprentice act 1961 or under the standing orders of the establishment but doesnt include(a) any member of Indian naval ,military or air forces (b) any person so employed whose wages exceed such as wages prescribed by central govt.a month at
10

any time of after and not before the beginning of contribution period shall continue to be an employee until the end of the period. Benefits of ESI: ESI scheme provides the following major social security benefits to the insured person : 1. Medical benefit 2. Sickness benefit 3. Maternity benefit 4. Disablement benefit 5. Dependent benefit 6. Funeral benefit

Objectives of ESI:

1. To provides for certain benefits to employees in case of sickness ,maternity and injury during employment and to make the provision for certain other matters in relation thereto . 2. To applicability of this act on all factories. 3. To promote and measure for health and welfare of insured person. 4. To appoint inspectors for purposed of the act. 5. Intervene for the rehabitation re-employment for disabled/injured. 6. To determine the amount of contribution and relevant verification .
11

7. The purpose of the ESI act is to provide benefits as detailed in the act particularly in see 46 to insured person.

Coverage of ESI: The ESI act 1948 in the first instance applies to non-seasonal factories using power in the manufacturing process and employing 10 or more persons and non power using factories or establishment employing 20 or more persons for wages . The provisions of the act are being implemented area wise by stages. The act contains on enabling provisions under which the appropriate govt. is empowered to extend the provisions of the act to other classes of establishment industrial , commercial, agricultural or otherwise. Under these provisions most of the state govt. have extended the provisions most of the state govt. have extended the provision of the ESI act to the following classes of establishments. 1. Shops, hotel, restaurant ,cinemas including preview theatres, road motor transport agencies and newspaper establishments etc employing 20 or more employees. 2. Power using beedi manufacturing units in the implemented areas employing 10 or more employees attract coverage under the act. A few state have been extended the power of the act to non power using beedi manufacturing units employing less than 10 persons. 3. State pencil manufacturing units employing one or more employees have also been brought under the coverage of the act in a few states. Employees of the aforesaid factories and establishments in receipts of wages not exceeding Rs.6500/- pm are covered under the act. By the end of dec 02,about 2,45,000 factories and establishment at about 680 industrial centers had been brought under the coverage of ESI act benefiting about 80 lakh insured persons and their dependent family members.

Organization:-

12

At the national level, the ESI scheme is administered by a statutory body called the Employee State Insurance Corporation set up under employees state insurance act 1948. The corporation comprises representative of employees ,employers ,the central govt. ,state govt. , medical profession and the parliament. A standing committee , constituted from amongst the members of the corporation acts as the executive body . The medical benefit council, a statutory body advises the corporation on matters related to the provision of medical care to the beneficiaries of the scheme . The director general is the chief executive of the corporation and is also an exofficio members of the corporation and standing committee . At the state level, regional boards have been constituted in each state and at the gross root level ,local committees have been formed as advisory bodies for smooth functioning of the scheme . The Regional Boards and Local Committees have representation, both from employer and employees. For day to day administration the corporation has its central headquarter at New Delhi , besides regional offices in the states and over 800 local offices etc at industrial centers throughout the country. The medical care in the states is administered by the state govt. concerned on cost sharing basis except in the National Capital Territory of Delhi and Noida area in Uttar Pradesh , where the medical facilities are being provided directly by the corporation . The corporation has , over the last few years, also set up four well equipped zonal occupational disease centers at Kolkatta , Delhi , Chennai Nagda (M.P) and is setting up yet another ODC at Chinchwad in Pune .The entire expenditure on these specialist centers is borne by the corporation and are being administered directly .

Finances:The scheme is primarily funded by the contribution raised from insured employees and their employers in the implemented areas as a small but specified percentage of wages payable to such employees. The rates of contribution were last revised by the corporation from 1 jan1997 and are still in vague.
13

These rates of contribution are:1. Employees contribution 2. Employers contribution Total 1.75 percent of wages 4.75 percent of wages 6.50 percent of wages

Employees in respect of average daily wage of Rs.40/-or loss ,are exempted from payment of their share of contribution but are entitled to all social security benefits under the scheme. The state govt. as per provisions of the act, contribute 12.5% of expenditure on medical care on ESI beneficiaries in their respective states within the per capita ceiling. Any expenditure over and above this ceiling in borne entirely by the state govt. The contribution paid by employees and employers are deposited in a common pool known as the ESI fund i.e. utilized for payment of cash benefits to the insured persons and their dependents as well as for providing medical facilities to the beneficiaries . The administrative and other expenses of the corporation are also met from this fund.

Advantages to employees:Employers who come under the purview of the ESI act 1948, derive the following benefits from the scheme :1. Employers are absolved of all their liabilities of providing medical facilities to employees and their dependents in kind or in the form of fixed cash allowances , reimbursement of
14

actual expenses , lump sum grant or opting for any other medical insurance policy of limited scope unless it is a contractual obligation of employer. 2. Employers are exempted from the applicability of the a. Maternity benefit act b. Workmen compensation act in respect of employees covered under the ESI scheme. 3. Employers are absolved of any responsibility in times of physical distress of workers such as sickness ,employment injury or physical disablement resulting in loss of wages as the responsibility of paying cash benefits shits to the corporation in respect of insured employees. 4. Employers have , at their disposal a productive a well secured workforce an essential ingredients for better productivity . 5. Any sum paid by way of contribution under the ESI act is deducted in computing income under the income tax act.

15

Benefits to Employees:-

The social security convention number 102 of the international labor conferences on 28.5.1952 defines 9 branches of social security benefits for the welfare of labor class. In India as a follow up measure for protection of workers , in times of physical and economic distress , the employees ,State Insurance corporation has already adopted and extended five major benefits to the insured workers out of the nine benefits identified by ILO. Under the ESI scheme, the comprehensive and need based package of major social security benefits in cash and kind include. 1. Medical benefit 2. Sickness benefit 3. Maternity benefit 4. Disablement benefit a. Temporary disablement benefit b. Permanent disablement benefit 5. Dependent benefit employment injury. In addition, the scheme also provides some other need based benefits to insured workers . These are 1. Funeral expenses 2. Rehabilitation allowance - to a person who performs the last rites of on IP - for self for self for self for dependents in case of death due to for self and family for self for self

16

3. Vocational rehabilitation 4. Old age Medicare 5. Medical bonus

- for self - for self and spouse -for insured women and IPs wife.

An interesting feature of the ESI scheme is that the contribution are related to the paying capacity as a fixed %age of the employed wages , whereas social security benefits are provided acc. to entitlements without any distinction of class or status . Medical benefit for self and dependents is provided at uniform scale from day one of entering insurable employment. 51 years of ESI scheme Growth and development A. Coverage March 1952 1. Number of status /UTs covered 2. Number of implemented centers 3. Number of employers persons 4. Number of insured persons 5. Number of beneficiaries B. Infrastructure(medical) 1. Number of ESI hospitals 2. Number of ESI annexes 3. Number of diagnostic centers 4. Number of ESI dispensaries nil nil nil nil 141 43 337 1452 Delhi & Kanpur 2 500 1,20,000 do 30 700 2,50,000 80,00,000 3,10,000 March 2003

17

5. Number of panes clinic 6. Number of beds in esi hospitals

nil nil

3000 23,500 3800 14,000 45,000

7. Number of beds reserved in other hsptls nil 8. Number of doctors / specialists 9. Number of paramedical staff C. Infrastructure (non-medical) 1. Number of regional office/ SROs 2. Number of local offices/ pay office nil nil

26 820

Prevention Is Better Than Cure Come; let us identify our responsibilities better All that employers need to do is Ensure proper environmental planning of the premises. Carryout periodical checks of the strength of sheds and structure
18

 Provide adequate working space to workers against heat, dust, smoke and chemical fumes. Do not expose workers to any flying objects and splinters. Do not expose the workers to long strenuous working hours. See that the workstation is well ventilated, well lit. Earmark some sitting, resting place for workers in between shifts. Have the lavatories/ bathrooms kept clean. See that the workers are not exposed to any infections from fellow workers. Ensure provisions of portable water in the premises. Have naked wires ,broken switches and other faulty electric equipment repaired/replaced. Have adequate firefighting equipment installed. Keep first aid facility available in the premises.

19

Legal provisions of ESI: Section 72 Section 72 of the Act, places a bar upon the powers of an employer with regard to reduction of wages of an employee for reasons of his liability to pay contribution. Section 73 Under Section 73, an employer cannot dismiss or punish an employee during the period of his certified sickness etc. Contravention of these provisions attracts penalties provided under Section 85 of the Act. Regulation 97 Regulation 97 permits an employer to discontinue or reduce benefits payable to his employees under conditions of their service which .are similar to the benefits conferred by the Act, to the extent specified below, namely a) From the date of the commencement of the first benefit period following the Appointed Day for his factory or establishment

Sick leave on half pay to the full extent; Such proportion of any combined general purposes and sick leave on half pay as may be assigned as a sick leave but in any case not exceeding 50 per cent of such combined leave.

b) Any maternity benefits granted to a woman employee to the extent to which such a woman employee may become entitled to the Maternity Benefit under the ESI Act.
20

Where an employee avails himself/herself of any leave from the employer for sickness, maternity or temporary disablement, the employers shall be entitled to deduct from the leave salary of the employee the amount of benefit to which he/she may be entitled under the Act for the corresponding period.t is only when a workman actually obtains or receives cash benefit under the ESI Scheme that the employer can exercise his right to make a suitable deduction from the wages due to him by way of leave salary.

Guidelines for the employees:1. Applicability of the act :- The ESI scheme is implemented area wise in a phased manner new geographical area are notified for implementation from time to time , by the state/central govt. ,taking into consideration the density of coverable industrial population within a given geographical area called a center. The act, in the first instance, applies to all non seasonal factories using power and employing ten or more persons using manufacturing units and establishments employing 20 or more persons for wages and falling within the scope of an implemented geographical area. As of now, employees of factories that fall within the ambit of coverage and earning wages not exceeding Rs. 6500/- per month are covered under the ESI scheme. This revised wage ceiling for purpose of coverage came into effect 1.11.1997. A factory once covered under the ESI act, remains covered even if the number of employees at any later stage fall short of the stipulated number of 10120 employees or the manufacturing process therein ceases to be carried on with the aid of power. The act, however, does not apply workers engaged in mining operations, railway running sheds and seasonal factories as defined under the act. The provisions of the ESI act have also been extended gradually to the following classes of establishments under sec 1(15) of the act, by most of the state govt.

21

a. Shops b. Hotels and restaurants c. Road motor transport undertakings d. Cinemas including preview theatres e. Newspaper establishment Under sec 1(5) of the ESI act the appropriate govt. is empowered to extended the scheme to any other establishment, industrial, commercial, agricultural or otherwise. Thus, a state govt. may extend the provisions of the act in consultation with the ESI corporation and with the approval of the central govt. , after giving six months notice of its intension in the official gazette provided that where the provisions of this act have been brought into force in any part of state , the said provisions shall stand extended to any such establishments or class of establishments within that part if the provisions have already been extended to similar establishment in other part of state. The provisions of ESI act are not applicable to factories or establishment run by the state/central govt. whose employees are in receipt of social security benefits substantially similar or superior to the benefits provided to the employees by the concerned management with those admissible under the ESI act.

Provisions for Exemption:The appropriate govt. may grant or renew exemption under sec 87 of the ESI act in respect of a factory in any specified area from the operation of the act for a period not exceeding one year at a time. Exemption under sec 88 of the act is granted by the app. govt. to employees , or class of employees who remain away from their hqrs ,for more than 7 months in a year and those employees who are posted in non-implemented areas. No exemption, under sec 87 , or sec 88 can

22

be granted unless a reasonable opportunity has been given to the corporation to make any representation and the same is considered by the appropriate govt. Exemption under sec 90 can be granted to a factory belonging to any local authority such as a municipality/corporation etc. if employees in any such factory are in respect of benefits substantially similar or superior to the benefit provided under the act. 2. Definition of factory/establishment:- For the purpose of coverage under the ESI act , a factory has been defined as any premises ,including the presents thereof , whereas 10 or more persons are or were employed for wages on any day of the preceding 12 months and in any part of the which a manufacturing process is being carried on with the aid of power or whereon 20 or more persons are or were employed for wages , on any part of which a manufacturing process is being carried on without the aid of power. 3. Manufacturing process:- The term manufacturing process factories act 1948 as under1. Making, altering, repairing, ornamenting, finishing,packing.oiling,washing, cleaning, breaking up, demolishing or otherwise treating or adopting any article or substance with a view to its use,sale.transport,delivery or disposal. 2. Pumping oil or water or sewage or any other substance. has been defined in

3. Generating , transforming or transmitting power or 4. Compositing types for printing , printing by letter press ,lithography ,photogravure or other similar process or book binding etc. 5. Constructing ,reconstructing ,repairing , refilling ,finishing or breaking up ships or 6. Preserving or storing any articles in cold storage. 4. Power:- The term power means electrical energy ,gas or ny other form of energy which is mechanically transmitted and is not generated by human or animal agency . Accordingly if in a manufacturing process steam is used, it amounts to use of power if constant pressure is maintained in the boiler, which transmits the steam and along with it
23

the heat electrical energy used in the case of photo studio or ironing of cloth etc amount use of power. Similarly the use of LPG in any manner in the manner in the manufacturing process amounts to use of power. These e.g. are illustrative and not exhaustive. 5. Contribution:- ESI scheme is a contributory scheme in which both employers and employees contribute as per the rates prescribed in the ESI rules ,1950 contribution is the amount payable to the corporation by the principal employer in respect of an employer and the employee and comprises the amount payable by the employers and employees contribution at present is 1.75% of the wages whereas the employers contribution is 4.75% of the wages paid /payable in respect of every wage period in the first instance of the principal employer is to pay employers share of contribution as well as employees share of contribution in respect of every employer whether employed directly or through immediate employer. The employers share may thereafter be recovered by making deduction from their wages for the wage period. Employer earning Rs.40/- or less per day as wage are exempted from payment of their part of contribution. Employers share of contribution is payable. 6. Calculation of contribution payable:The effective rates of ESI contribution in

respect of employees and employers covered under the scheme are 1.75 % or 4.75% of the wages respectively .The amount of contribution in respect of a person is to be rounded to the next higher multiple of 5 paise and the total amount or contribution payable under one challan should be rounded to the whole rupee,if it is more than 50 paise employees contribution payable under one challan should be rounded to the whole rupee , if it is more than 50 paise employees contribution shall not be payable in respect of persons whose average daily wages is up to Rs.40/- in any wage period. 7. Manner and time limit for making payment of contribution: - ESI corporation has authorized the designated branches of SBI and some other scheduled banks to receive payments on behalf of corporation. The total amount of contribution is to be deposited with the authorized bank branches in cash or by cheques or by demand draft through a challan in the prescribed form in quadruplicate on or before 21 st of the month following the calendar month in which the wages fall due. If the last day for deposit is a holiday, the
24

contribution may be deposited on the day following the last day of deposited. The challan form can be indented free of cost from the local offices of the corporation. The challan form should be written legibly ,furnishing all the details as per the columns provided therein. The rubber stamp showing the name and code number of the employer should be affixed on the challan at appropriate place to avoid misplacement of credit. 8. Contribution period and benefit period:- There are two contribution periods of 6 months duration each in a year,in respect of an insured employee ,with corresponding benefit period of six months each as under. Contribution period 1st april to 30th sept 1st October to 31st march of the Year following. In case a person becomes on employer within the meaning of the act for the 1st time, the first contribution period will commence from the date he enters into insurable employment for the first time in the contribution period current on that day and his corresponding benefit period will commence on the expiry of nine months from the date of such examples if a person has joined insurable employment for the first time , say on 5th jan. his first contribution period will be from 35 th Jan to 31st march corresponding first benefit period will be from 5th Oct to 31st Dec. 9. Register of employees (form-7):- The form of register of employees will depict the wages paid/payable to each employee. In respect of monthly paid employees, ordinarily, there will be only one entry against the name of each employee every month. However if any other wages etc. This will be entered just below the entry for the monthly wages and contribution for such additional payments will also be recovered by the employer as well as entered in this register below the figure of normal recovery of employees contribution for the month. In case of fortnightly and weekly paid employer the entries of wages as well as of contribution recovered and the figures of no. of days paid will be made one below the other under the relevant monthly head against each name in register .
25

Corresponding benefit period 1st jan to 30th june of the year following 1st july to 31st dec of the calendar year.

and his

At the end of every month the column of wages pais as also employee contribution recovered will be totaled up , whereafter the employer will calculate his own share of contributionat 4.75% of the total wages paid . He will the add to this figure,the total of employees contribution recovered and make payment of the total amount rounded o the next higher rupee into the authorized bank branch to the credit of ESI fund a/c no. 1 regional office by filling up four copies of challan no, S iii (for cash payments) or S iv (for cheque payments). The payments must be made on or before 21st day of the following month failing which interest is chargeable for every day of delay. The delay in payment also attracts levy of damages. As soon as the contribution period is over the following columns may be totaled up in respect of the each individual employee. Description No. of days for which Wages are paid/payable Total amount of wages Are paid/payable Employees shares of Contribution Column Nos. 7, 10,13,16,19 and 22 8, 11,14,17,20 and 23 9, 12,15,18,21 and 24

The total in respect of each employee will then be posted in columns 25, 26 and 27 respectively. After this exercise, the figure of Daily Wages will be calculated in respect of each employee by dividing the figure given in column 26 by the figure in column 25, to two places of decimals. 10. Statutory forms/returns:- The submission of the under mentioned documents in prescribed forms, duly filled up by the employers is a statutory requirement:a. Declaration form:-

26

Submit declaration forms along with the return of declaration forms to the appropriate office within 10 days of the date on which a new entrant joins insurable employment for the first time. Also submit changes in family particulars, which includes acquiring of a family by a person not having it earlier, within the said time limits to the appropriate. b. Accidents reports:Submit accident reports in form-16 to the local office/insurance medical officer within 24 hours in ordinary cases and immediately in respect of serious accidents that could result in death or permanent disablement. c. Abstention verification:Fill up and return form 28 whenever received from the local office. 11. Inspections:The ESI Inspector or any other authorized officer normally sends advance intimation regarding the inspection of records of a factory or an establishment in his area of operation. On such occasions the following documents are to be kept ready for inspection and produced on demand before the inspecting authority. I. II. III. IV. V. Attendance register Wages register Cash book/bank book Account books including ledgers and vouchers, balance sheet. Employees register ESIC FORMS & STATIONERY: USED BY THE EMPLOYERS All forms used by the employers to meet their obligations under the Act are supplied free of cost by the local offices of the corporation. Employer has to make an indent for the requisite number
27

of forms to the appropriate local office, indicating there in the number of employees covered. Forms generally required to be filled in by the employers are as under: Form no. 01 at the Registration within 15 days of the Form 1 appropriate regional/ Form entry into Insurable employment. 3 declaration Declaration form duplicate to office 1-B whenever there Particulars of the particulars of an IP Employees 6-A paid in Advance. 16 reports are to be Submitted within 24 hours in ordinary cases Accident report To be filled in triplicate. The or when an IP acquired family. In case contribution have been is a change in the family Change in the family This form is to be submitted forms to be submitted in Return of This is a covering letter for the local office within 10 days of Declaration Applicability. To be submitted to the time of initial coverage, Title Employers Purpose To be submitted by the employer

28

And immediately in death cases or serious Injury cases. 32 benefit Period has not started, to calculate the rate Of disablement benefit and submitted Accident report. 53 any change in Change address ,code no. Local office etc. 71 the employer To ascertained the contributory particulars in The absence of return of contributions. 72 countersigned by the Duplicate local office. employer and submitted to the Application for To be filled in by IP and Wage/contributory Initiated by the local office for dispensary, residential Application for This is required for effecting Accidents cases This is needed in cases where the

The Contribution Percentage of Sukhjit Starch & Chemical ltd. is 12% which applied both on employer and employee. Example:Workers Salary = Rs. 3000/29

Contribution

= = = = =

12% 12% of 3000 360 30000-360 Rs.2640

The Pension Scheme is 8.33%. The EPF is 3.67%. Challan : Limit is up to 6500/- and it is deducted from total no. of employees salary after deducting the contribution which is 12%. Example: ESI of employers ESI of workers Total = 1.75% = 4.75% = 6.50%

6.50% is deducted from salary and deposited into State Bank of India, and it Must be deposited twice a year i.e. after every 6 months.

PROVIDENT FUND SCHEME AND FAMILY PENSION S. No. Register no. PF wages PF amount PF wage PF amount Covered w
30

Ne Left

Total

1. 2. 3. 4. 5. 6.

Executive 710000 85920 Office 49610 5954 Permanent Specific Probation Trainee -

156200 310730 369774.60 318156.05 1057717.5 0 227695.38 2440273.6 3

18744 37285 44375 38178 126927 273160 0 292825

68 22 54

08 22 54 50 248 75

765610 91874

24440273-00 no.22 00765610-00 3205883-00

A/c no. 1 600840

A/c no. 2 35265

A/c no. 10 168558

A/c no. 21 16029

A/c 321

31

Introduction to Employee Provident Fund: Employment provident fund is a scheme intended to help employees from both private and non pensionable public sector save a fraction of their salary every month in a saving scheme ,to be used in an event that the employee is temporarily or no longer fit to work or retirement . Objectives of EPF The government want to tell us the importance of routine saving over a long time. The lump sum given during retirement can be used by the employee to continue his life without being financially dependent on anyone and stand on his own legs. Benefits of EPF: To employer:1. Coverage 2. Contribution 3. Administrative charges 4. Inspection liability 5. Interest liability 6. Damage 7. Provident funds 8. Pension scheme To employees:32

1. Enrolments to employees 2. Emoluments 3. Becoming member of the scheme 4. Rate of contribution payable by a member shall be of 12%. 5. A member can contribute staturally.

Provident funds rule in India: The Provident fund rules in India came into existence in the year 1955. The rules comprises the following sections:

Definitions, Constitution of the Fund, Nomination, Subscribers account, Conditions and rates of Subscriptions, Transfer to foreign service, Interest, Withdrawal from Fund, Payment towards insurance policies, Bonus on policies, Procedure on death of subscriber, Method of maintaining accounts.
33

Employees Provident Fund:Employees provident fund organization is one of the largest organization is one of the largest organization in the world dealing with the social security measures for the industrial workers. The EPFO came into existence as a Brain child of the well thought of piece of legislation passed by the Honble Parliament-enacted Employees Provident Funds and Misc. Provisions act 1952. The Act was aimed at providing an umbrella of social security to the industrial workers as an old age protection when they become incapacitate due to old age protection when they become incapacitate due to old age after having been given best part of their lives to the cause of nation building by improving the national productivity. To start with, EPF scheme,1952 was implemented in 8 industries and only few thousands of workers could be enrolled as members of EPF scheme . With the passage of time. The organization has grown both vertically and horizontally and the benefits were extended to the workers engaged in more than 177 schedule of industries/class of establishment and about 2 crores of industrial workers have been enrolled as members of the scheme has also been almost doubled during this period i.e. @ 6.25% of the wages/salary has grown up to 12%.
34

EPFO being a dynamic organization had always kept pace with the time and growing needs of workers. Resultantly in 1971 the EFPS scheme,1971 was introduced to provide monthly pension to the widow/child of the member in the event of members death while in service. Similarly in 1976 was introduced to provided the insurance cover to the family members of EPF members who die during the employment. With passage of time all the benefits extended to the members as mentioned above become inadequate to cater the changing needs of the working class and requirements of their families in case of distress and unforeseen contingencies. With the influence of the modern life style a dramatic change came in the social set up of the fabric of joint family system prevalent in India for centuries. The whole society broke down to the system of small families i.e. tiny family system. The abrupt change of the society in the small size of family created a feeling of insecurity among the elder citizens of the working class. After having been given the serious thoughts to the growing needs of the working class and to protect the interest of retired members and their families-the govt. of India introduced an unique SOCIAL SECURITY SCHEME CALLED AS EMPLOYEESPENSION SCHEME 1995(EPS 1995) w.e.f. 16.11.95. EPS 1995 is an unique and unparalleled piece of Social security measures for industrial workers and their families. EPS 1995 is aimed to provide social security for post retirement life of the member ,to meet the requirement of unforeseen excegencies of the member and social security to the family members in the hour of distress. The gist of benefits under EPS ,95 are given below. The main features alongwith the example to make them easily understandable have been discussed in this booklet separately.

35

Main Benefits Superannuation Pension- On attaining the age of 58 years (Members Pension) Retirement Pension(Members Pension)- On leaving the service and retiring before the age of 58 years but above 50 years. Total and permanent disablement pension(To members) - On being total and permanent disabled during employment having one month membership. Monthly Pension Payable to Family of the member - In case of death of the member while in employment /out of employment/death of the pensioner. Widow/ Widower Pension- Monthly pension payable to spouse-death of the member/pensioner. Children Pension- Monthly pension paid to legitimate children of the deceased member paid simultaneously and in addition to widow pension -@25% of widow pension-paid up to the age of 25 years.

36

Orphan Pension Orphan pension is paid to the children of the deceased member in the event of death of widow/widower or marriage of widow/widower @ 755 of widow pension till the age of 25 years. Nominee Pension- Monthly pension is paid to the nominated person as per nomination of the member who does not have the family and or the eligible child to receive the pension.

Other benefits Return of capital At the time of retirement the member can opt either of the three options for return of capital which can lead to lump sum payment of 100 times of original pension on the death of the members to the nominee families. Communication The member can opt for communication of his pension @ one third of the original pension and lump sum payment of 100 times of commuted value of pension is made under this option. The option is effective w.e.f.16.11.98. Scheme Certificate The member having less than 10 years service and leaving the employment before the age of 58 years can opt for the scheme certificate which enable him to add his present service in the future
37

service on joining his new employment of a covered estt. It will also enable all the benefits admissible to his family members in case of death before attaining the age of 58 years. Withdrawal Benefits The member having less than 10 years membership can have withdrawal benefits as per Table D attached with the booklet. Contributions No contribution is to be paid by the employee/member . Out of the employers contribution @ 8.33% of salary will go to pension fund and remaining 3.67% will go to member PF a/c.

EMPLOYEES PENSION SCHEME(EPS):1995 SALIENT FEATURES Applicability: The Employees Pension Scheme (EPS),1995 applies w.e.f. 16.11.95 to all establishment to which the EPF and miscellaneous provision act,1952 is applicable and on its introduction the family pension scheme,1971 ceases to exit. Important Definitions: In the Employees pension scheme ,1995 unless the context otherwise requires:-

38

1. Actual service means the aggregate of periods of service rendered from the 16 th November.1995 or from the date of joining any establishment which ever is later to the date of exit from the employment of establishment. 2. Contributory service means the period of actual service rendered by a member for which the contribution to the fund have been received or are receivable. 3. Eligible member means an employee who is eligible to join the employees pension scheme. 4. Existing member means an existing employee who is a member of the employees family pension scheme1971. 5. Family means: (1) Wife in the case of male member of the EPF. (2) Husband in the case of female member of the Employees pension fund, and (3) Sons and daughter of a member of the EPF. 6. Pension means the pension payable under the employees pension scheme and also includes the family pension admissible and payable under the Employees Family Pension Scheme 1971 immediately preceding the commencement of the Employees. Pension Scheme 1995 with effect from the 16th Nov. 1995. 7. Member means an employee who becomes a member of the EPF in accordance with the provisions of the scheme. 8. Non contributory service is the period of actual service rendered bu a member for which no contribution to the EPF has been receivable. 9. Orphan means a person, none of whose parents is alive. 10. Pay means basic wages ,with dearness allowance ,retaining allowance and cash value of food concessions admissible ,if any.

39

Contribution: Accumulation in members PF account both shares up to 15.11.95 shall remain untouched. The rate of contribution towards the EPF is @ 8.33% of the pay up to Rs. 5000/per month . On the option of employee and employer, employer can contribute on salary exceeding Rs. 5000/- per month from the date of commencement of this scheme or from the date of salary exceeding Rs.5000/- p.m. which ever is later. The contribution is to be diverted from the employers share of the PF. The central govt. will also contribute@ 1.16% of the pay of members. The entire contribution of the employees share shall be deposited in members PF account. 1.16% of each employees as well as employees share of PF contribution which was being diverted to EPF scheme have been discontinued. In case of the employers contribution is more than 8.33% shall remain in members PF a/c. If the members remains in service after attaining 58 years of age,his/her PF contribution including employer share shall be deposited in his/her PF a/c and shall not be diverted to pension a/c notwithstanding payment of pension to the concerned member.

EXAMPLE OF P.F. DEDUCTIONS/CONTRIBUTION OF EPS,95.

40

Suppose the salary of a member is Rs. 1000/- P.M. Employers contributions will be Rs.120/-@ 12% Employers contribution will be Rs.120/-@12% Total Rs.240/-

E.P.S contribution out of employers share will be Rs.83/-i.e. 8.33% of Rs 1000/The amount will be credited in PF a/c will be Rs.240/- , Rs.83/-,Rs.157/-

BENEFITS TO MEMBERS 1. Superannuation pension, retirement pension and short service pension. 2. Total and permanent disablement pension. MONTHLY PENSION PAYABLE TO FAMILY OF THE MEMBER 1. Widow/widower pension. 2. Children pension

3. Orphan pension 4. Nominee pension OTHER BENEFIT 1. Return of capital 2. Commutation 3. Scheme certificate 4. Withdrawal benefit 5. No contribution from members

41

MONTHLY MEMBERS PENSION 1. A member shall be entitled for a. Superannuation pension, if he has rendered eligible service of 20 years or more and retires on attaining the age of 58 years. b. Retirement pension ,if he has rendered eligible service of 20 years or more and otherwise ceases to be in the employment before attaining the age of 58 years c. Short service pension, if he has rendered eligible service of 10 years or more but less than 20 years. In case of a new entrant the amount of monthly superannuation pension or retiring pension ,as the case may be , shall be computed in accordance with the factors.

FORMULA FOR PENSION (A) NEW ENTRANT Monthly members pension= Pensionable salary * Pensionable Service/70 (B) IN CASE OF EXIXSTINGMEMBERS MONTHLY PENSION= 1/70 *Pensionable salary* pensionable service + pension due to membership of employee family pension scheme varying b/w 80 to 170 multiplied by table B factor for period b/w 16.11.95 and date of attaining age of 58 years. All the members pension are payable on attaining age of 58 years. On the option of the member , the reduced pension can be granted on attaining the age of 50 years and pension will be reduced @ 3% for every year the age falls short of 58 years. Total and Permanent Disablement
42

2. While in service : The member having rendered one month actual service and on total & permanent disablement ,the member is also entitled for permanent disablement pension subject to minimum Rs. 250/- p.m. DETERMINATION OF PENSIONABLE SERVICE (1) The pensionable service of the member shall be determined with reference to the contribution received on his behalf in the EPF. (2) In the case of member who superannuates on attaining the age of 58 years and who has rendered 20 years pensionable service or more , his pensionable service shall be increased by adding a weight age of 2 years.

ELIGIBLE SERVICE (A) In case of new entrants, the actual service rendered under EPS 95 will be treated as eligible service. (B) For existing members Eligible service aggregate of past service rendered under EFPS -1971 and actual service under EPS -95. To become eligible for monthly pension-minimum eligible service is 10 years. The examples of each i.e. monthly in case of new entrants and in case of existing members are given as under: EXAMPLE OF MONTHLY PENSION OF EXISTING MEMBER; Suppose Date of Birth Date of retirement Date of joining In EPFS 1971
43

19.11.1960 18.11.2018 1.1.1979

Date of joining EPS 95 Salary on 16.11.95 Average salary of last So, Past service i.e. under EPFS 1971 Date of joining EPS 95 Date of joining EPS 71

16.11.95 Rs. 4000/Rs.8500/-(contributing on full salary)

16.11.95 01.01.79 14.10.16

16 years and 10 months i.e. 17 years 2 pensionable service i.e. service after 16.11.95 membership under EPS 95 Date of retirement Date of joining EPS 95 18.11.2018 16.11.1995 02.00.23 Pensionable service is 23 years. On completion of 20 years pensionable service 2 more years are added i.e. 23+2=25 years Monthly pension= Past benefit service* table B+1/ 70 * pensionable service*pensionable average salary =135*9.390+1/70*25*8500 =1268+3036= Rs4304/-p.m.

MONTHLY MEMBERS PENSION (NEW ENTRANTS)

44

Bio-data of Mr. X Date of birth Date of joining of EPS.95 Date of retirement 30.1.2035 No break in service Pensionable service= 39 years+2 additional years on completion of 20 years=41 years Average salary of last 12 months=Rs.8000/- p.m. Monthly pension=41*8000/70(1/70* pensionable average salary) Rs4686/-per month 31.01.77 16.11.95

BENEFITS PAYABLE TO THE FAMILY ON THE DEATH OF A MEMBER: The detail of benefits available to the family of the member on his/her death is as under:A. Widow Pension/ Widower pension: The chart given below shows the benefits available to the widow/widower on the death of a member under various circumstances/service condition. ON THE DEATH OF A MEMBERa) While in service,provided that at least one month contribution is received or receivable in EPSF. b) Member not in employment ,age below 58 years. c) Death after superannuation and pension has been vested. WIDOW/WIDOWER PENSION

45

a) Equal to members monthly pension on retirement as on the date of death. Or Rs.450/p.m. as per table C whichever is more. b) Equal to members monthly pension on retirement as on the date of death or Rs.250/p.m. or as per table C whichever is more . c) 50% of members monthly pension subject to minimum or Rs 250/- p.m. B. Monthly children pension: In addition to widow pension: The children pension is also payable to 2 children at a time till the age of 25 years. The rate of children pension is @ 25% of the widow pension subject to minimum of Rs. 115/per month. The monthly children pension shall be admissible to maximum 2 children at a time and will run from eldest to the youngest child in that order. C. Orphan pension: If the deceased member is not survived by widow but is survived by children then the children would be entitled the ORPHAN PENSION , which shall be paid to each orphan @ 75% of widow pension till the age of 25 years subject to minimum Rs. 170/- p.m. each orphan. In case of remarriage of widow or on the death of widow,children pension will be converted into the orphan pension which shall be payable to maximum to 2 orphan at a time and will run from eldest to toughest. D. Nominee pension: In case the member is not married or does not have spouse and or any eligible child may nominate a person to receive benefits. In the event of death of such member , the nominee shall be entitled to receive monthly pension equal to widow pension.
46

EXAMPLES

OF

THE

BENEFITS

AVAILABLE

TO

THE

FAMILY

MEMBER/NOMINEE ON THE DEATH OF THE MEMBER. Suppose a member of EPS, 95 is drawing salary Rs.2000/- p.m. and he dies before attaining the age of 58 years ,the benefits available to his wife /children will be as per details given below: The benefits for the family as a whole will be as under: A) The widow pension as per Table C will be payable Rs. 898/- p.m. till the date of death or widows remarriage whichever is earlier. B) Children pension @25% to a child till attaining the the age of 25 years i.e. 1.1.2015. C) Children pension @ 25% of widow pension to second Child till the age of 25 years i.e.31.12.2018. Total benefits available to the family Orphan pension: For example the widow remarriage or expires then children pension will be converted into orphan pension and orphan pension will be as per details given below:Orphan pension to a child @ 75% widow pension of Rs. 898/- the orphan pension will be Rs. 673/- p.m. till 1.1.2015. Orphan pension to second child will be @ 75% of widow pension of Rs. 898/- which comes to Rs.673/-p.m. till 31.12.2018. The total orphan pension thus comes to Rs. 1346/- up to 1.1.2015 and thereafter Rs.673/- up to 31.12.2018 to 2nd child. Example of nominee pensions: Suppose EPS-95 member has got no family / no eligible child for children pension in the event of his/her death.
47

Rs. 224/-p.m.

Rs.224/-p.m.

Rs.1436/-p.m.

e.g. the member has no eligible child and his salary is Rs. 2000/- p.m. and dies before attaining the age of 58 years then the nominee pension will be equal to widow pension i.e. Rs. 898/-p.m. for the whole life of the nominated person. Similarly, the benefits to the family are also available in case of death of a pensioner of EPS-95.

OPTION ON LEAVING SERVICE BEFORE ELIGIBILITY FOR PENSION A member who has left employment before completion of 10 years eligible service and has not attained the age of 58 years has the following two options :1. Either to obtain a scheme certificate . OR 2. To apply for withdrawal benefits. In the above case the members are advised to opt for scheme certificate. Scheme certificate is a certificate issued by Regional Provident Fund

Commissioner/EPF Authorities-which has all the service details of the member, details of family of the members, Eligible service rendered by him including the salary drawn by him and details of the nominee if any. On the opting for scheme certificate the member has the following advantages:1. On taking up new employment of a covered establishment his earlier service period will be carried forward and clubbing both the spells together pension entitlement shall be regulated. 2. If the member does not take up the employment and dies before attaining the age of 58 years,his family pension.

48

3. While availing a scheme certificate , there is no bar to withdraw the PF accumulation by the members. It has been observed that in this category ,most of the members , opt for withdrawal benefits whereas it is always beneficial to opt for scheme certificate. The examples as under will give the more demonstrative effect of comparative benefits:EXAMPLE It is advisable to the member to obtain a scheme certificate. Comparatively, it is more beneficial to get a scheme certificate instead of withdrawal benefits. This can be illustrated with an example:-e.g. Mr. A is the member whose particulars are given below:1. Date of birth 2. Date of joining of EPS , 1995 3. Date of leaving of service 4. Salary on the date of leaving the Service i.e. 31.12.2002 (a) WITHDRAWAL BENEFITS ADMISSIBLE= Salary on the date of leaving service* Table D 3500*7.54=Rs. 26,390/In case Mr. A applies for withdrawal benefits then he will receive Rs.6,390/- as lump sum payment and he will cease to be the member of EPS 1995. (b) BENEFITS OF HAVING SCHEME CERTIFICATE:If Mr. A opts for the scheme certificate Mr.A and his family members are eligible for the following benefits:49

15.01.1959 16.11.95 31.12.2002 Rs.3500/-

1. If Mr. A joins service I any other establishment which is covered under EPF and MP Act 1952, the service as per scheme certificate will also be added in the future service and the pension will be counted by adding both the servicei.e. service rendered as per scheme certificate and service rendered in the future employment covered under the act 1952 and benefit s to family will be provided after death of member. 2. In case of death of member before attaining the age of 58 years whether in employment , family members of Mr.A will be eligible for the following benefits:FAMILY DETAILS OF MR.A ARE GIVEN BELOW:1. Wife :- Mrs. X 2. Son :- Master Y date of birth 31.08.89 3. Daughter Miss Z date of birth 16.07.92

BENEFITS AVAILABLE ARE (a) Mrs. X (widow) will receive monthly pension Rs.1481/-p.m.

(till date of death or date of re-marriage whichever is earlier ) (b) Master Y monthly pension @ 25% Rs. 370/- p.m.

(up to 30.08.2014) (c) Miss Z monthly pension@ 23% Rs. 370/- p.m.

(up to 15.07.2017) Total benefits to the family members Rs. 2221/- p.m.

50

The widow will receive the pension through out her life or up to the date of re-marriage whichever is earlier i.e. the family will receive a total amount of Rs. 2221/- p.m. up to 30.08.2014 and an amount of Rs. 1851/- p.m. w.e.f. 31.08.2014 to 15.07.2017. Thereafter, the widow will receive the pension of Rs. 1481/- p.m. In this case, the family will receive a total of Rs. 26,652/- p.a. during the period from the date of death of member to 30.08.2014 per year and after Rs. 22,212/- per annum up to 15.7.2017. In case of death of widow or remarriage of widow, then children pension will be converted into orphan pension and Master Y and Miss Z will receive orphan pension @ 75% of widow pension till they attain the age of 25 years each. In this case Master Y will receive orphan pension @Rs. 1111/-p.m. And Miss Z will also receive the same amount of@ Rs.1111/-p.m. In this case the family member will receive pension Rs.2222/-p.m. In case Mr. A i.e. member has not received family at the time of his death ,then his nominee Mr. B will receive the nominee pension which is equal to widow pension i.e. Rs.1481/- p.m. till death of such nominee. Now if we compare with the amount received as withdrawal benefits we can see that in case of withdrawal benefits the member received as sum of Rs. 26,390/- and his family members are deprived of the benefits in the event of sudden death of the member and member also does not get the benefits in the future,so we can see that benefits are more in case of opting os scheme certificate.

OPTION FOR RETURN OF CAPITAL Each member can opt for either of the three options at the time of submitting application for pension: 1. Member to draw 90% of original pension during his/her life time and on death 100 times of original pension shall be paid to nominee.
51

2. Member to draw 90% of original pension during his/her life time and on his/her death widow/widower to draw 80% of pension and on the death or marriage of widow/widow are 90 times of original pension shall be paid to nominee. 3. Member/family/nominee to draw 87.5% of original pension for 20 years thereafter 100 times of pension shall be paid to the member/nominee and pension would cease. The example the comparative benefits of all the three alternatives options are illustrated below:For example the monthly pension of a member is Rs. 1000/- p.m. the benefits under the alternatives options will be as per that data.

MEMBER HAVING NO FAMILY- NOMINATION PENSION:

In case the member has no family he/she can nominate any person to receive pension at par with widow pension. Member having no spouse and or eligible child to receive pension, can nominate
52

any person to receive the benefits- In the event of death of such member, the such nominated person shall be eligible for monthly pension which will be equal to widow pension.

Nomination form It is very important to fill up form 2(EPS-1995) immediately on joining of service in any covered establishment ,because the nominee pension is payable to the nominee only as nominated by the member during his life time.

It has been observed that form 2 EPS 95 are not being filled at the time of taking up employment which has resulted in disallowing the nominee pension.

It is therefore requested that member as well as employer should take prompt action in filling form 2(EPS-95) and submit same to regional office/ sub-regional office concerned and also retain one copy. Guarantee of pensionary benefits:

None of the pensionary benefits under the scheme shall be denied to any beneficiary for want of for want of compliance of the requirement by the employer provided the employer shall not be absolved of his liabilities under the scheme.

Annual valuation of employees pension fund and preview of rate of contribution and quantum of the pension and other benefit Central govt. shall have annual valuation of the fund made by valuer appointed by it.

53

On the basis of annual valuation provisional increase @ 4% on pensionary benefits have alredy been announced by govt.w.e.f. 16.11.96.

BANKING ARRANGEMENTS:

Special arrangements have been made for speedy and regular disbursement of pension to the beneficiaries through leading banks of all the regions. E.g. in Punjab region i.e. special arrangements have been made with Punjab National Bank under Eployee pension scheme 1995. These arrangements have been made to provide the service at the door steps of the beneficiaries.

The members/beneficiaries will mention the branch of the Punjab National Bank nearest to his/her residence in the form-D itself and pension will be paid through that branch. During first week of every month the concerned branch will credit the pension amount in the Bank a/c of beneficiary automatically. Under this scheme , the beneficiary will receive a regular and timely pension and the bank charges will be paid by the beneficiary. The beneficiary will be required to be present before the bank authorities only once in a year and the required certificate of nonmarriage life certificate will have to be produced before the bank authorities only.

EXEMPTION FROM THE OPERATIONOF PENSIOIN SCHEME:

As per inbuilt provisions in the EPS 1995 the exemption can be granted to the establishment or class of establishment if the employees of the establishment are either members of any other pension scheme or proposed to be members of a pension scheme wherein the pensionary benefits are at par or more favorable than the benefits provided under this scheme.

54

SPECIAL FOR EMPLOYERS: No extra contribution is required. Monthly returns for Nov. 1995 in two equal part is separately to be submitted. Returns on form 3A,6A,2,5,10 and 12A on revised and simpler forms are to be submitted every month to RO/SRO. Details of such members exercising option to be furnished to RO/SRO immediately on receipt from the members. Details of contractors and their employees to be furnished. A/c number of members remains unchanged. Nomination and family details of all members to be furnished in form no. 2. To furnish the details/particulars of owner. To submit all types of claims to RO/SRO as soon as received from the member/the beneficiaries.

SPECIAL SCHEME LAUNCHED IN PUNJAB REGION TO HANDOVER EPF CHEQUES/PPO ON THE DATE OF RETIREMENT BY EMPLOYEES PF ORGANIZATION OFFICERS.

In Punjab Region i.e. a scheme has been launched to hand over the EPF cheques/PPO on the date of retirement to the retiring employees at their working place by EPFO officers. The cheques/PPOs have already been handed over to retiring persons on theday of retirement by Regional Office Chandigarh and SRO Amritsar/Ludhiana/Shimla/Bhatinda. The employers are requested to submit claim forms 19 and 10D atleast 20 days before the date of retirement with one month advance contribution by name to RPFC Regional office Chandigarh ,

55

RPFC sub regional office Ludhiana ,RPFC SRO Amritsar RPFC Shimla and Officer ,Bhatinda as the case may be.

BENEFITS COMPARISON

E P S 1 9 7 1 (O L D S C H E M E ) No provision for retirement/ Supperannuation/Short Service Pension.

EP S 19 95 (N EW S CH EM E) A member can get retirement/ superannuation/short service pension after putting in

56

20/10 years of service, as the case may be at the Monthly Widow's Pension was payable if the employee had put in at least 3 months' reckonable service. Monthly Family Pension was payable to only one person at a time. age of 58 years (or discounted pension at an earlier age after 50 years). Monthly Widow's Pension is payable after one month's service. Monthly pension is paid to three persons at a time i.e. widow/ widower and two children. Monthly pension is paid to disabled persons on No benefits were paid in case of permanent and one month's service. total disablement during employment. Only withdrawal benefits were paid if a member expired after leaving the employment and no pension to the widow was payable in such cases. Maximum monthly family pension on a pay of Rs. 5000/- p.m. was Rs. 1050/-p.m. (Rs. 1750/in case of 7 years minimum service). No provision for nomination other than the family members. No provision for Return of capital. No widow/children's pension in case of death of the member whose account was not settled, if he was not in service. aged below 25 years No provisions for commutation of Pension. Disbursement of Pension by cheque o r t h r o u g h p o s t o f f i c e o n submission of certain papers such as A.S.R./Life Certificate. Even after leaving service, if a member expires, monthly pension is paid to the widow/widower and two children. On pay of Rs. 5000/- monthly family pension would upto Rs. 1750/- plus Rs. 875/- PM. to two children. Can nominate any person if he/she is not having family. 100 times equivalent to original pension is payable as Return of Capital if the pensioner opts for reduced pension. Pension is available to widow/ children of a holder of certificate of contribution, short service, even when he/she is out of employment. Two orphans (at a time) get a pension of minimum of Rs. 170 p.m. each orphan. Provision for commutation of pension w.e.f. 16.11.98 upto the extent of 1/3 of the original pension. Disbursement through Banks by automatic
57

Pension was available only to the eldest orphan 75% of pension of the widow subject to a

credit to pensioners bank account at their doorstep

TABLE-A (See Paragraph IWITHDRAWAL BENEFIT] No. of full year's contribution paid

TABLE-B 14) (See Paragraph 14) Factor for computation of Past Service Benefit under the ceased Family Pension Scheme for existing Members on Exit from the Employment. (1) (2) Years Factor
58

Proportion of pay payable at cessation of membership

(1)

(2)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Less than 1 Less than 2 Less than 3 Less than 4 Less than 5 Less than 6 Less than 7 Less than 8 Less than 9 Less than 10 Less than 11 Less than 12 Less than 13 Less than 14 Less than 15 Less than 16 Less than 17 Less than 18 Less than 19 Less than 20 Less than 21 Less than 22 Less than 23 Less than 24

1.049 1.154 1.269 1.396 1.536 1.689 1.858 2.044 2.248 2.473 2.720 2.292 3.992 3.621 3.983 4.381 4.819 5.301 5.810 6.414 7.056 7.761 8.537 9.390

TABLE-C (See Paragraph 14) EQUIVALENT WIDOW PENSION

Salary at day of death not more than (1) (Rupees)

Equivalent widow pension (2) (Rupees)

59

Upto 300 350 400 450 500 550 600 650 700 750 800 850 900 950 1000 1050 1100 1150 1200 1250 1300 1350 1400 1450 1500 1550 1600 1650 1700 1750 1800 1850 1900 1950 2000 2050 2100 2150 2200 2250 2300 2350 2400 2450

250 327 343 359 375 391 408 425 442 459 476 493 510 527 544 561 578 595 612 629 646 664 682 700 718 736 754 772 797 808 826 844 862 880 898 916 935 954 973 992 1011 1030 1049 1068
60

2500 2550 2600 2650 2700 2750 2800 2850 2900 2950 3000 3050 3100 3150 3200 3250 3300 3350 3400 3450 3500

1087 1106 1125 1144 1163 1182 1201 1221 1241 1261 1281 1301 1321 1341 1361 1381 1401 1421 1441 1461 1481

NoteL: In the case of employees drawing wages above Rs. 3500/- p.m. the widow pension shall be increased Rs. 20/- p.m. for every increase in wage of Rs. 50/- or part thereof subject to the maximum of Rs. 1750/-.

61

TABLE-D (Return of contribution on exit from the employment) (See paragraph 14)

Proportion. wages at exit Year of Service (1) 1 2 3 4 5 6 7 8 9 (2) 1.02 2.05 3.10 4.18 5.28 6.40 7.54 8.70 9.88

Precautions

to

be

taken

while

completing

claim

forms

under

various

schemes under Employees' Provident Fund & Misc. Provisions Act, 1952

1. All the columns of the form should be completely and neatly filled in : Member's name.
Father's Name, IT A/c No., complete address etc.

2. Bank particulars (Saving Bank A/c No., Complete Address of the Branch with Pin Code)
should be filled in the appropriate columns.

3. Mode of payment should be clearly mentioned. In case the amount payable exceeds Rs.
20()0/-, flit- saint- will be remitted through Bank only.

62

1. The claim forth should be duly signed/`]'numb Impressed by the claimant and be
attested by the Authorised Officer. Revenue stamp of Re. 1.00 should be fixed and signed - when amount exceeds Rs. 500/-

4. All cuttings/overwriting should be attested by the Claimant as well as by the Attesting

Authority as the case may be.

5. Claim forms should be accompanied with form 5 & 10 and form 3A for last year (Broken
period).

6. While furnishing claim forms following documents should be enclosed.

Nature of claim f o r m

Documents to be enclosed

63

a) Forms 31 (for advance)

For illness - prescribed Medical (Certificate. For House Building by advance original Title Deed/ Registered Agreement /Approved Map/ Es ti ma t e ap pr ov ed V al ue r, no n encumberance Certificate, Allotment letter (which ever is applicable). Forms 3A for the last broken year, proof of

b) Forms 19 (for EPF withdrawal immigration leaving employment.)

in

case

of

going

abroad

for

by the member in case of permanent settlement or for taking employment, if applicable.

c) Forms 20 (for withdrawal of Original Death Certificate, Details of family EPF by Nominee/Family members showing Name, Relation with the Family Members alongwith certificate Members in case of death of Deceased, Date of Birth, Martial Status of member.) w h e t h e r the parents were dependent on the deceased member or not. Details of family members should be certified by Authorised Officer of the Employer/Revenue Authority. Documents as mentioned above against Sr. 7(c). In d) Forms 5 GF) for EDLI addition to this, certificate by the Employer showing that member had died while in service and all breaks have been regularised, details of monthly contribution for the last 12 months proceeding date of death. e. FORMS 10-D, (MONTHLY PENSION) in case of Retirement Pension, Total and Pension, the

Permanent Disablement Pension, Widow/Children/ Orphan/ Nominee duly attested along-with form 10-1).

claiment/Member should enclose the following documents through employers/establishments

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i) Three sets of specimen signatures of the applicant duly attested. Left thumb and
finger impression of the applicant duly attested in three separate sheets if the applicant is not literate enough to sign his/her name.

ii) Descriptive Roll of the applicant in three separate sheets. iii) Certificate(s) of age in original with two attested copies showing the date of
birth of the children- The certificate should be from the municipal authority or from Registrar of Birth and Death or from the Head of the Recognised School where the children are studying.

iv) Death certificate of member in case of widow/children/nominee or orphan

pension.

v) Guardianship certificate (on behalf of each child when natural guardian is not
alive).

vi) Three passport size photos taken with spouse (with guardian in case of Minor
child)

i) Medical certificate of prescribed Authority in support of total and permanent

disablement.

ii) Particulars of family members (in the format giving name, address, sex, date of birth,
marital status. Relationship with member).

vii)

Bank Account particulars Account to be opened in Punjab National Bank (in

case of minor children, Bank account is to be opened in the name of child to be operated by the guardian).
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viii) From 3A/other details of salary for last 12 months. iii) Details of break in reckonable service if any. In case there is no break in
reckonable/actual service certificate thereof.

iv) Details of members including date of joining of service, date of commencement of

membership under EFPS 1971, EPS 1995 and date of leaving service (copy of form 2, if already not submitted)

ix) Apply in separate set of form 10-D in case of children pension and (for minor
children, guardian will apply. For major, he/she will apply).

x) Form to be sent in triplicate, if the Pension is to be drawn from other Region/

SRO.

xi) A certificate regarding Date of Birth of the member. A certificate stating the
amount of last salary for the full month at the time of death of the member and also stating the member died while in service.

f) 10-C form for scheme certificate under EPS-95

For - 5,10,3A for the last 12 months, list of family members and nomination forms if not supplied earlier.

Findings and Observations

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As Sukhjit Starch & Chemicals ltd. is a well known establish co. from the view point of profitability and productivity. The quality of its product is well known in the country and its enjoys excellent reputation and goodwill among its creditor, banks, customers and suppliers. About EPF:1. The PF contribution was @ rate of 10% covered under Employees Provident Fund and Miscellaneous Provision Act 1952. 2. It was only w.e.f. the rate of deduction of PF was enhanced to 12%. 3. W.e.f 16,11,1995 the employees contribution to PF was 3.67% and balance 8.33% was contribution to family pension fund as required under the provision of EPF and family pension scheme 1996. 4. Earlier the interest on PF accumulation was paid by central govt. @ rate 9% but the same has been reduced to 8.5% presently. 5. The PF contribution of employees is @ the option of employees is @ the option of employers entire on full base salary or restrict the same to basic salary of Rs. 6500/- per month. About ESI:1. ESI was deductable on basic salary of Rs. 6000 per month for industrial employees which were enhanced to Rs. 5000 per month. 2. Subsequently the ESI was deductable on basic salary of Rs. 10,000 per month and same has been revised to Rs. 15,000 per month. 3. The ESI deductable @ rate of 1.75% and employees contribution is @ rate of 4.75%.

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CONCLUSION

1. Though the family pension scheme is introduced keeping in view the welfare of industrial employees but pension payable to them is to low to pull on smoothly with the family. 2. The govt. has ignored the revision of pension of industrial employees due to past 14 years and no attention has paid in this particular area. 3. The Industrial employees suffer from industrial deceases but their care is not taken sufficiently by ESI organization. 4. Many times the doctors refuse the cases to civil hospitals or even to PGI which is beyond the reach of industrial employees. The medicines are not available in the ESI dispensary which also causes industrial unrest and increase industrial deceases. 5. Industrial employees if submit their bills from medicine purchase outside those are not paid ESI organization well in time. A lot needs to be grouped into improve the functioning of these organization.

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BIBLIOGRAPHY: Before going to prepare this project report, I have collected lot of information from many sources. I have studied various books and I have referred internet for different topics that are covered by my in my project report.

Books: Human resource management (Shashi K. Gupta, Rosy Joshi) Organizational behaviour (PTU) Management by appraisal (Gellerman,S.W.) Management Principles and Practises (McFarland, Delton)

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