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PUNJAB STATE TRANSMISSION CORPORATION LIMITED

Registered Office: PSEB H.O., The Mall, Patiala

EMPANELMENT OF CHARTERED ACCOUNTANT FIRMS For ASSIGNMENT OF INTERNAL AUDIT

REQUEST FOR PROPOSALS

CS/Internal Audit/02/2012-13

Company Secretary Punjab State Transmission Corporation Limited (PSTCL),

The Mall, PATIALA-147001 Phone 0175-2308233

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PUNJAB STATE TRANSMISSION CORPORATION LIMITED

EMPANELMENT OF PUNJAB INCLUDING CHANDIGARH BASED CHARTERED ACCOUNTANT FIRMS AS INTERNAL AUDITORS FOR INTERNAL AUDIT OF OFFICES OF THE

CORPORATION. Applications are invited from the Punjab including Chandigarh based partnership firms of Chartered Accountants registered with the Institute of Chartered Accountants of India (ICAI) who intends to be empanelled with Punjab State Transmission Corporation Limited (PSTCL) for appointment as Internal Auditors.

1. CRITERIA FOR EMPANELMENT

1. Constitution of Firm of the Chartered Accountants

Should be Partnership Firm from Punjab including Chandigarh.

2. Existence of Firm Should have in existence for at least 7 years.

3. Minimum No. of Partners 3 (Three) FCA/ACA full time Partners. 4. Association of Partners with the

Firm All the three Partners should have an association with the firm for minimum continuous period of 5(five) years.

5. Experience in internal audit Should have experience in conducting internal audit in private and /or public corporate sector for more than 5 years.

6. Average Annual Turnover Average of the last three years should be at least Rs. 15.00 Lacs P.A.

7 Indicative staff Staff to be assigned for each Accounting Unit Partner/Qualified CA 1(One) Semi qualified 2(Two)

8 Total audit staff in partnership Firms

Minimum 10 including Partners.

2. Form of Application, Terms of reference, Scope of audit work and General Terms & Conditions etc. can be downloaded from PSTCL web site www.pstcl.org

3. Cost for application amounting Rs. 500/- (Rs. Five Hundred only) in the form of demand draft /banker's cheque drawn in favour of “Accounts Officer/Cash, PSTCL, payable at Patiala, must be furnished along with the application failing which the application of the firm will not be accepted.

4. Applications should be submitted in two parts, Part-1 (Cost of Application) and Part-2 Technical information regarding eligibility for qualifying for empanelment & the same should be submitted in sealed cover and delivered at the address given below latest by 5th October, 2012 up to 3.00 P.M.

5. PSTCL reserves the right to reject any or all the applications without assigning any reason thereof.

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6. In case the due date for submission of applications happens to be a holiday, applications shall be received and opened at the same time on the next working day.

7. Based on overall Technical Evaluation, Firms will be empanelled as Internal Auditors for conducting internal audit of the offices of PSTCL at the remuneration given in the Terms of reference, Scope of audit work and General Terms & Conditions etc.

8. Allocation of audit among empanelled auditors shall be at the sole discretion of PSTCL.

9. The empanelled Firms who will be assigned internal audit job, shall be required to deposit security of Rs. 25,000/- (Rupees Twenty Five Thousand only) in the form of demand draft favoring ‘Accounts Officer/Cash, Punjab State Transmission Corporation Limited (PSTCL), payable at Patiala within 7(seven days) from the date of allotment of the assignment of internal audit for faithful execution of the assignment failing which its empanelment will be cancelled without any further notice and the said assignment will be allotted to other empanelled firm.

10. The firms so empanelled shall be given offer of appointment initially for a period of one year for carrying out the Internal Audit of Offices as allocated by PSTCL which will be extendable for a further period of two years subject to satisfactorily performance of the assignment by the firm as may be assessed by PSTCL and there shall be rotation policy for change of Auditors after every three years.

11. After completion of the period of 3(three years), the security so deposited by the empanelled firm with PSTCL will be refunded because of expiry of tenure due to rotation policy. In case any empanelled firm is offered to conduct the internal audit which was not allotted earlier, the said firm is required to redeposit the amount of security.

12. Any other information/details required in this regard can be had from the office of undersigned or from website http://www.pstcl.org

Company Secretary

Punjab State Transmission Corporation Limited (PSTCL), The Mall, PATIALA-147 001

(PUNJAB) Phone 0175-2308233

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1.0 Introduction

Keeping in line with the provisions of the Electricity Act 2003, the Punjab State Electricity Board (PSEB) has been restructured and unbundled into two successor entities, vide Govt. of Punjab notification no. 1/9/08-EB (PR) 196 dated 16.04.2010, viz.:

• Punjab State Transmission Corporation Limited (PSTCL), to undertake transmission of electricity in the State along with the operation of SLDC functions. PSTCL is a deemed transmission licencee and has been notified by the State Govt. as the State Transmission Utility.

• Punjab State Power Corporation Limited (PSPCL), to undertake the Generation, Distribution and Trading Businesses. The Annual turnover of PSTCL for the FY 2010-11 and 2011-12 is Rs. 428 crore and Rs. 548 Crore respectively.

2.0 Organization Structure

The organization of the Corporation below Board of Directors level is divided in to (i) Technical, (ii) Finance, Accounts, internal audit, Commercial and regulatory affairs and (iii) Administration. The Technical departments are headed by Director/Technical supported by Engineer in Chief/ Chief Engineers. The Finance and Accounts departments are headed by Director/Finance and Commercial supported by Chief Accounts Officer and Financial Advisor. Brief Activities taken by each department on functional basis are as under:

a. Corporate Office

Organization Structure of Corporate Office of PSTCL is as under: Board of PSTCL comprises Chairman cum Managing Director, three functional Directors i.e. Director (Finance & Commercial), Director (Technical), Director (Administration) and two non-functional Directors. All functional Directors reports to Chairman-cum Managing Director. Financial Advisor, Chief Accounts Officer (Corporate Accounts) and Incharge Internal Audit report to Director (Finance & Commercial). CE/TS, CE/SLDC and CE/P&M reports to Director (Technical). Organization set up of PSTCL is divided in to Corporate Office and field offices comprising of Circles, Divisions and Sub Divisions. Office of Financial Advisor deals in Loans and funds, Budgets, Banking & Drawing etc. and the office of Chief Accounts Officer (Corporate Accounts) is

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concerned with Pay & Accounts of Gazetted Officers, Cash, Compilation of Accounts, preparation of Trial Balance and Annual Statement of Accounts, Taxation matters, etc. etc. Presently all monthly accounts are post audited in Corporate Office in WAD.

b. Field Offices

i) CE/TS (Construction of New 132/220 KV and above Grid SubStations and Erection of Transmission Lines of 132 KV and above.

ii) CE(P&M)

Manage, Operations and Maintenance of 220 KV and 132 KV Substation, Manage Operation and Maintenance of 220/132/66KV Transmission Lines, Carry out pre commissioning/periodical testing of 132KV and above Substations, Replacement/Up gradation of electrical equipment installed on substations and Design and procurement of material required for maintenance of old substations and erections of new substations. 400 KV Substation & 400 KV Transmission Lines which are being commissioned are expected to be operational by the end of FY 2012-13.

Iii) CE/ SLDC

State Load Dispatch Centre (SLDC), is a state of art Computerized Control Centre established in August 2002 at Ablowal, Patiala. It ensures integrated operation of the power system of Punjab with the Northern Region Load Dispatch Centre of India. To ensure integrated operation of the Power System in the State, Optimum dispatch of Electricity, Monitoring and control of system parameters to maintain healthiness of the Power System at all times.

SLDC keep accounts of the quantity of electricity transmitted through State Grid, exercising supervision and control over the intra-State transmission system. As a system operator, SLDC is to function as a separate unit under PSTCL. SLDC is required to maintain separate books of accounts for its entire operation from the FY 2011-12 provided Punjab State Electricity Regulatory Commission (PSERC) allows separate fees and charges to be levied and collected by it.

The office of CE/ SLDC is instrumental in implementing/commissioning of the Unified Load Despatch and Communication (ULDC) scheme in PSEB which is functional since July, 2002. This scheme comprises of SCADA/EMS (Supervisory Control and Data Acquisition/Energy Management System), Activities of SLDC Directorate, Distribution SCADA Scheme, Intra-state ABT compliant Boundary Metering Scheme and Communication Design.

3.0 Objectives of the Assignment PSTCL intends to empanel Punjab including Chandigarh based partnership firms of Chartered Accountant for assignment of the internal audit of its accounts for the FY 2012-13 and onward.

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The objectives of the assignment are as under:

1) To assess / review/ recommend / comment whether

accounting/financial/Operational/ maintenance systems are reliable/effective/efficient & to assess whether they are properly followed.

2) To assess/review efficiency/adequacy/application of accounting/financial & operating controls & thereby ensuring accuracy of books.

3) To verify that the systems of internal check is effective in design & facilitates detection of misappropriation/misapplications/irregularities/negligence etc;. and commensurate with the nature and size of business of the organization.

4) To strengthen internal control system. 5) To identify areas of significant inefficiencies in current system & to suggest

immediate remedial measures. 6) To verify compliance to statutory & regulatory requirements. 7) To serve as continuous source for improving operational & control efficiency. 8) To assist the Management in designing purposeful MIS to take decision of the

business development. 9) To indicate areas of concern for effecting more internal control and risk

mitigation. 10) To help the management to evolve Risk Management strategy as also to

indicate the level of risk in each area of operation as low, medium and high with risk matrix.

4.0 Scope of the Work

The Scope of internal audit assignment for different offices shall be as under:

4.1 Common to all Offices:

4.1.1 SANCTIONS & BUDGETS:

i. 100% checking for the period under review, along with Administrative/ Financial Approval, detailed estimation being technically sanctioned by the Competent Authority.

ii. Budget allocation viz its utilization. iii. Excess spending over the budget allocation and its Regularization. iv. 100% Checking of deposit works & final settlement of accounts of such

deposit works. 4.1.2 CONTRACT AGREEMENTS/PRICE:

i. Checking Tender Registers, Comparative Statements, Contractors’ Bill

Registers and procedure of Registration of Contractors including e-tendering. ii. Considering the reasonability of Rates & urgency to be established, the

contract under question should not be more than Budgeted. iii. Competent Authority to sanction the Contract & amendments issued, if any,

and its approval. iv. Split up of contract to be within financial powers of field officers to be reviewed

and commented.

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v. Scrutiny of supply of manpower contracts.

4.1.3 WORK ORDER:

i. The Work Orders must have Administrative approval and Technical Sanction and the proposal must be justified on the basis of Budgeted Provisions.

ii. The total work through open, limited & Single tender should be within sanctioned budgets. In case of awarding Contracts for works through quotations, reasonability of prices is to be recorded & Post Facto approval of the concerned Competent Authority is to be obtained in a month.

4.1.4 PURCHASE ORDER:

i. The orders placed by the CE’s/EIC, Circle, Division and subdivision offices should be as per the Budget provision & check should be kept on the items reserved for Corporate Office purchases.

ii. Delay in supply and resultant recovery of L.D (Late Delivery) charges etc. should be checked and commented. Waiver of L.D charges by Competent Authorities to be critically reviewed with reference to the existing circumstances.

iii. There should a comparative price analysis review on the basis of Quotations & other price information.

iv. Purchases should be within powers as per Delegation of Power. v. Distress purchase/ wrong intending/ Excess quantity procurement etc. should

be reported. vi. Checking of Spot purchases, Cash purchases & purchase of contingent

items.

4.1.5 COMPUTATION & RECOVERY OF INTEREST ON INTEREST BEARING ADVANCES:

i. The recovery of Interest should be as per the requirements & rules of the Organization & must be appropriately made, adequately secured & duly acknowledged.

ii. Non-recoverability of both principal and interest to be verified/ reported. iii. Accounting of such unrecoverable advances and interest to be verified and

reported.

4.1.6 REVIEW OF INSURANCE CLAIMS:

i. Reviews should be taken of the Claims lodged along with the Follow- up actions, its Settlement & followed by proper Accounting Procedure.

ii. Loss of insurance claims due to lack of procedures/processes to be reviewed/reported.

iii. Timely submission of information should be verified.

4.1.7 CLOSURE OF CONTRACT:

i. Final bills to be settled as expeditiously as possible. ii. Delay to be reviewed. Delay in capitalization to be seen and reported. iii. Reasons for pending IWRs to be analysed/ reported.

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4.1.8 ESTABLISHMENT- SALARIES & WAGES:

i. Test Checking of Pay Bills with reference to rules & Proprietary aspects- at

least for a month in every phase of Internal Audit. ii. Verification of Wage Sheets, Attendance Records- particularly of Leave

Salary/ OT& other Allowances & Accounting of leave records at least for a month in the phase of Internal Audit.

iii. 100% checking of Payment of Pension, Gratuity & Other Retirement Benefits, Statutory Deductions & their timely deposits.

iv. Calculation & Accounting of Interest on Loans & Advances & its recovery as per applicable rules.

v. Verification of the terms of employees engaged on contract basis and verification of the terms of the agreement executed with the Outsourcing Agency to ensure that the personnel engaged through them are being paid as per the terms of the contract.

vi. To check the deductions made in salary account and timely deposits with requisite authority.

vii. To check the fixation of pay on general revision of pay scale/grant of time bound/devised promotional scale and grant of annual increment.

4.1.9 FIXED ASSETS & CAPITAL WORK IN PROGRESS:

i. 100% Checking of all Capital Expenditure with reference to proper sanction of Competent Authority.

ii. Accounting of Fixed Assets & General Assets, Depreciation & Capital WIP. iii. Checking of works completed but not transferred to fixed assets. iv. Delay in finalization of final bills. v. Review of Fixed Assets, General Assets and Depreciation Register. vi. Review of payment of commitment charges, if any. vii. Comment on the Assets not in use, Obsolete, Scraped. viii. To Check accounting of obsolete/ Scrapped Assets with reference to

withdrawal of depreciation, cost & loss /Gain on such sale. ix. Review of Capital items financed out of internal resources when loan tie up

was possible. x. To check misclassification of revenue expenditure required to be capitalized

or vice versa. 4.1.10 STORES & MATERIAL ACCOUNTING

i. Checking of receipts, acceptances & issue of Material, its Reconciliation & Accounting.

ii. Checking of transfer of material to PSPCL other agencies and vice & versa, its accounting, reconciliation and settlement.

iii. Non- Moving /Slow Moving items to be brought to the notice of management. iv. Release of stores Receipt notes, acceptance of material after test results etc.

to be checked. v. Review of sale of scrap/utilization of slow moving items.

4.1.11 Special emphasis should be made for Vehicles including heavy vehicles with

reference to estimates, Logbook, maintenance sets etc.

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4.1.12 Verification of Cash, Cash Book & its Auditing, Bank reconciliation of

Cheques drawn Statement, Accounting of Stale Cheques, and Dishonor of Cheques. Action under Section 138 of Negotiable Instruments Act, 1938.

4.1.13 STATUTORY COMPLIANCES:

i. Compliance of Accounting Standards and provisions of the Companies Act,

1956 as applicable to PSTCL from time to time read with the license conditions of PSTCL as prescribed by PSERC.

ii. Compliance of Income Tax Act viz. deduction of tax at source at the time of payment towards Rent, Consultancy charges, Professional fees, etc.

iii. Appropriate recovery under various laws and its timely deposit with appropriate authorities and filing of returns.

iv. Claiming VAT set off (input credit).

4.1.14 Violations of any other law e.g. non-payment of wages as per Minimum Wages Act, ESI recovery & timely remitting of P.F by contractors for which Corporation is responsible as a Principal Employer.

4.1.15 Recovery and deposit of Service Tax. 4.1.16 Physical presence of Internal Auditors at the time of annual inventory. You

have to give comments and be a party to sign the verification report. You can suggest the methods/procedures to improve upon current practices of inventory verification.

4.1.17 Comments on the adequacy of internal control procedure commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale in compliance to clause No. 4(iv) of Companies (Auditor’s Report) order, 2003.

4.1.18 Comments on compliance report submitted by the individual office for previous Internal Audit Reports, pending IRs/Para’s, if any.

4.1.19 Auditors shall also attend to any other work specifically assigned by the Management or commented by the statutory auditors in their report (CARO) regarding Internal Audit.

4.1.20 SUGGESTIONS/ RECOMMENDATIONS FOR ENHANCING OVERALL / INTEGRATED EFFICIENCY

4.2 DIVISIONS HAVING S&T STORES.

The accounts of S&T Sub Division will be test checked with special emphasis on the following:-

i. Issue of material to works viz evaluation process. ii. Transfer of material from store to store. iii. Maintenance of quantity/value ledger cards and their reconciliation. iv. Checking & Reconciliation of various Registers as required under various

Manuals Viz, MAT-50, MAT-51 ,MAT-55 etc. etc. v. Reserve Stock limit. vi. Transfer within division and its reconciliation and settlement of accounts. vii. Stock verification Reports, Adjustment of surplus/deficits.

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viii. Slow moving/obsolete/unserviceable material. ix. Position of inventory existing vis-a-vis targets fixed by the Board/Reserve

stock limit. x. Labour employed on handling & stacking of material vis-à-vis stock storage

estimate. xi. Fixation of issue rates & check of local inward carriage account. xii. Checking of materials transfer to PSPCL and other agencies and its

adjustment.

4.3 Corporate Office

Scope of work to Conduct Internal Audit of Corporate Office for the year 2012-13 and subsequent years shall be as under:-

4.3.1 Loan, Banking & Drawing Section

Checking of following activities undertaken in Loan Section:

i. REC/ PFC/LIC/Banks etc., and Servicing of Loans ii. Repayment of principal of various loans. iii. Yearly repayment, monthly repayment preparation. iv. Interest payment-on various loans. v. Payment of Government Guarantee Fee . vi. Preparation of JVs-month wise. vii. Review of bank accounts-Suggestions for closure of documents of

unnecessary bank accounts. viii. Tie up of loans with Capital Projects. ix. Evaluation of financial layout with physical targets of projects. x. Review of Bonds, debentures if any. xi. Bank Reconciliation. xii. Cash management/fund management placing of surplus funds in fixed

deposits.

4.3.2 Cash Section Checking of following activities undertaken in Cash Section.

i. Daily Cash Book. ii. Daily Receipt Book. iii. Bank Reconciliation - Operative & Non-operative A/c’s. iv. Income Tax, LIC and misc. recoveries including statutory and its deposit with

requisite authorities. v. RPFC (CPF) payment. vi. FDR Register including renewal. vii. Stale Cheque Register. viii. To Check the monthly Cash Vouchers. ix. To Check different Schedule maintained.

4.3.3 Pay & Accounts and Bill Section.

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i. Preparation of Pay of Gezetted and Non Gezetted Officer. ii. Issue of Cheques to different Officers/Officials on account of arrears or

otherwise. iii. Issue of Salary through Banks. iv. Fixation of Pay from time to time as per the instructions of department.

4.3.4 Accounts Section and Accounting Units of Field Offices.

Checking of following activities undertaken in H.O. Accounts Section and accounting units of field offices.

i. To check the accounting of J.Vs adjusted at the Head Office Level. ii. Checking the Trial Balance. iii. I.U.T Reconciliation. iv. Maintenance of Asset Register. v. Maintenance of Suspense Register-clearance of old items. vi. Bills for Transmission charges being raised and amount received from PSPCL

and others with reference to PSERC rules and regulations. vii. Open access billing with reference to the relevant regulations and circulars

issued from time to time and its corresponding receipts. viii. To check Annual Statement of Accounts in order to ensure the compliance of

various Acts, rules, regulations and Accounting Standard issued by ICAI.

4.4 Misc. Work

4.4.1 Turnkey Contracts: Ø Checking of Cost Data/Estimates. Ø Evaluation of tenders received. Ø Provisions of G.O.I. Ø Position with reference to administrative approval and technical sanction. Ø Contracts to be audited in a VFM- (Value for money basis).

4.5 Special Assignment:

Auditors shall also attend to any other work specifically assigned by the management or commented by the statutory auditors in their report (CARO) regarding Internal Audit.

5.0 Audit Units along with audit fees to be incorporated. Table showing Office wise half yearly remuneration, Hotel charges and TA/DA to be paid to Empanelled Auditors.

Sr. No.

Name of the Office Remuneration including TA/DA and Hotel Charges but exclusive of service tax

Audit Unit -1 Jalandhar

1 P&M, Circle, Jalandhar 17000 2 Protection Divn. Jalandhar 17000

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3 P&M Divn. Jamsher 17000 4 P&M Divn. Kapurthala 17000 5 P&M Divn. Dasuya 17000 6 P&M Divn. Mahilpur 17000 Total 102000

Audit Unit- II Ludhiana

1 CE/P&M 17000 2 P&M Circle, Ludhiana 17000 3 P&M Divn. Malerkotla 17000 4 P&M Divn. Laltokalan 17000 5 P&M Divn. Dhandari Kalan 17000 6 P&M Divn. Jagraon 17000 7 P&M Divn. Mandi Gobindgarh II 17000 8 P&M Divn. Mandi Gobindgarh I 17000 9 Protection Divn. Ludhiana II 17000 10 CO&C Divn. Ludhiana 17000 Total 170000

Audit Unit- III Amritsar

1 P&M Circle, Amritsar 17000 2 P&M Divn. Amritsar 17000 3 CO&C Divn. Amritsar 17000 4 P&M Divn. Verpal 17000 5 P&M Divn. Wadala Granthian 17000 6 P&M Divn. Fatehgarh Churian 17000 7 P&M Divn. Sarna 17000 8 P&M Divn. Patti 17000 9 P&M Divn. Butari 17000

Total 153000 Audit Unit- IV

1 P&M Circle, Patiala 17000 2 CE/SLDC, Ablowal 17000 3 SLDC 17000 4 AO/Cash & Pay & Accounts 17000 5 AO/Banking & Drawing 17000 6 P&M Divn. Patiala Ablowal 17000 7 Protection Divn. Patiala 17000 8 P&M Divn. Patran 17000 Total 136000

Audit Unit- V 1 P&M Divn. Bathinda 17000 2 P&M Divn. Mukatsar 17000 3 P&M Divn. Moga 17000 4 P&M Divn. Ferozepur 17000 5 P&M Divn. Mohali 17000 6 Protection Divn. Mohali 17000 7 P&M Divn. Ropar 17000

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Total 119000 Grand Total 680000

6.0 Periodicity of Audit The internal audit and reporting shall be on half yearly basis. The internal audit must be completed within the schedule programme from the date of commencement of the assignment. The date of assignment will be any date in the month of October/November and April/May respectively which will be communicated by PSTCL.

7.1 Modus Operandi of Internal Audit

The method adopted for the audit of the units shall be clearly stated in the report. The percentage checks undertaken for inspection of the various areas of business operation, documents and records shall also be specified in the report. The auditor should comment on each activity as mentioned in the scope of work and commented from the point of view of generally accepted practices and industry norms.

7.2 Method of Reporting

The auditors shall conduct the internal audit based on the data and records available at the accounting units. In the course of audit, it is expected that all queries/doubts pertaining to any area shall be got settled at field unit/Corporate based offices. If any irregularity or misdeed or wrong doing or unconformities are observed during the audit then, Audit Memo shall be issued for the each observation immediately to the audit unit. The compliance of the same should be ensured during the audit period. If the compliance to the audit observation(s) is/are not possible within audit period in that case, time for complying the observation/ para should be obtained and suitably mentioned in the final audit report. Before finalizing internal audit report, the firm shall discuss the audit observations with the head of the accounting unit and apprise him/her the observations. During the course of audit, if any major irregularities, frauds have been noticed, same may be reported immediately to the officer, in charge Internal Audit, Corporate Office, PSTCL Patiala. In general, report should comment on the lacunas observed in the systems and procedures and weak areas where internal control needs to be intensified. The report should contain the entire Audit Memos issued and observations made during the inspection irrespective of compliance to the Audit Memos. The report should also mention the method and way of working adopted by the field units. The report should contain the major observations

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with examples of nonconformity. The report should also spell out the overall risk, the organization is carrying. The report should be submitted in quadruplicate (3 copies in English and one copy in Punjabi version) to the Corporate office with a fifth copy to the respective Field units for the compliance.

7.3 Compliance of the report

The compliances to the Para’s or observations made by an Internal Auditor in the report should be submitted to the corporate office (Internal Audit Section) along with necessary supporting documents to enable corporate office to close the Para’s. Under any circumstances the compliances will not be closed by those professional audit firms without the knowledge of corporate office.

8.0 Qualifying Criteria

Qualifying Criteria for empanelment of Internal Auditor shall be as under:

1. Constitution of the Firm of

Chartered Accountants Should be Partnership Firms from Punjab including Chandigarh.

2. Existence of Firm Should have in existence for at least 7 years.

3. Minimum No. of Partners 3 (Three) FCA/ACA full time Partners.

4. Association of Partner with the Firm

All the three Partners should have an association with the firm for minimum continuous period of 5(five) years.

5. Experience in internal audit Should have experience in conducting internal audit in private and /or public corporate sector for more than 5 years.

6. Average Annual Turnover Average of the last three years should be at least Rs. 15.00 Lacs P.A.

7. Indicative staff - Staff to be assigned for each Accounting Unit Partner/Qualified CA 1(One) Semi qualified 2(Two)

6 Total audit staff in partnership Firms

Minimum 10 including Partners.

Applicant should supply the above information as contained in the format of Application mentioned in the document. Failure to provide information in the given format of application tends to rejection of application. 6.1 Evaluation Parameters Sr. Parameters Score Max. Points

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No. 1 Firm’s No. of Years’ Experience

(Minimum 7 Years) One point per year ≤ 6 months experience will be given as 0.5 point and ≥ 6 months but ≤ one year experience will be given 1(one) point.

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2 No. of Full Time Partners (Minimum 3 partners)

2.5 points per FCA partner. 2.0 points per ACA partner.

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3 No. of Qualified Full Time CA employees

4 points per qualified CA employees

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4 Experience of Internal Audit assignment in Public/Private Sector

4 points per assignment

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5 Weightage to No. of Audit Staff 0.5 per audit staff Semi-Qualified/Article

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6 Experience of Internal Audit assignment in Power sector

2 points per assignment

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Total 100 Note: 1. Full time partner does not include a person who is

a. a partner in other firms b. employed full/part time elsewhere, practicing in their name or engaged in

other activity which would be deemed to be in practice under section 2(2) of the Chartered Accountants Act, 1949.

2. The Firm should not have been barred from practice by ICAI in the last 5 years

3. No proceedings for professional misconduct are pending against the firm on the date of submission of request.

9.0 GENERAL TERMS & CONDITIONS

General Instructions to be observed by the applicant Firm’s.

9.1 Procedure for Submission of Application

1. The application must be complete in all respects. The following points should carefully be studied in order to ensure submission of a complete and comprehensive application. Failure to comply with any of these instructions or to offer brief explanation for non-compliance is likely to render effective

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comparison of the application as a whole impossible and may lead to rejection. Further before submission of the application, the applicant firms are required to make themselves fully conversant with the scope of work, payment and penalty clause, general terms & conditions etc.

2. The application shall be submitted in duplicate and all copies shall be separately tagged and marked as Original/Duplicate as the case may be.

3. Part-I Cost of Application: The first part will consist of Cost of Application and Documents in the form of Demand Drafts in favour of AO/Cash, PSTCL, Patiala

4. Part-II Proof of eligibility & Technical Information: The second part will consist of documentary evidence with regard to qualifying conditions and other documents as mentioned in qualifying criteria.

5. Application in the given format and complete in all respect will be received in the office of Accounts Officer/Corporate Audit, 2nd Floor, Shakti Sadan, PSTCL, Patiala upto specified hours on the due date given in the notice. In case the due date for submission of application happens to be a holiday, applications will be received at the same time & place on the next working day.

9.2 OPENING OF ENVELOPS Envelopes containing application and other documents will be opened in the following manners: Firstly the main envelope will be opened. After opening the main envelope, the envelope marked Part-I (Cost of Application) shall be opened first and if the cost of Application will be found as per the requirement, only then the envelope marked Part-II shall be opened. After opening Part-II of the envelop (Proof of eligibility & Technical bid), the firms will be evaluated by PSTCL with reference to the terms & conditions of the reference made by PSTCL. PSTCL reserves the right to modify specifications at any time but before the last date and time for submission of application and to reject any or all the application received without assigning any reasons. It will not be responsible for and will not pay for expenses or losses that may be incurred by the applicant firms.

10.0 Empanelment of Auditors

The empanelment of audit firms shall be made on the basis of evaluation of technical information supplied by the applicant firms. Allocation of work among empanelled firms shall be at the sole discretion of PSTCL.

11.0 Remuneration, TA/DA and out of Pocket Expenses

Auditors so empanelled shall be paid such remuneration at the rates as mentioned in the Para 5.0 of the document and shall be inclusive of TA/DA and out of pocket expenses.

12.0 ASSIGNMENT OR TRANSFER OF SUB CONTRACT

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The firm shall not assign or transfer the Contract or any part thereof, any share, or interest there-in to any other person. The firm shall not sublet any portion of the Scope of work without the prior written approval of the PSTCL.

13.0 KNOWLEDGE OF LANGUAGE

PSTCL documents/correspondence/Accounts are in Punjabi language. Applicants must ensure that members of audit team who may be deputed to conduct the audit of PSTCL offices must be able to read, write and speak Punjabi.

14.0 COMPLIANCE TO REGULATIONS AND BYE LAWS

The firm shall conform to the provision of any Statute relating to the work and regulations and bylaws of any local authority and of any Central/State Departments or Undertakings with whose system the work is proposed to be connected. The Firm shall be bound to give notice required by Statue Regulations or Bylaws and to pay all fees and taxes payable to any authority in respect thereof.

15.0 CHANGE IN CONSTITUTION OF FIRM AND ADDRESS

In case of any change in the constitution of the firm the same shall be forthwith notified by the Applicant firm to the PSTCL for its information. Any change in the address of the Applicant firm shall also be intimated to the PSTCL.

16.0 SECURITY DEPOSIT 16.1 The successful applicant who may have been empanelled is required to

deposit security amounting Rs. 25,000/- in the form of demand draft in favour of Accounts Officer/Cash, PSTCL, Patiala before the commencement of assignment for faithful execution of the work order/contract. No interest shall be payable to the firm on the amount of security.

16.2 The security deposit of the firm shall be released by PSTCL within 3(three)

months from the date of faithful execution of work order/contract in all respect.

16.3 FORFEITURE OF SECURITY DEPOSIT In the event of default on the part of firm in faithful execution, security deposit shall be forfeited by PSTCL. The forfeiture of security deposit shall be without prejudice to any other rights arising or accruing to the PSTCL under relevant provisions of contract like penalty/damages for delay including suspension of business dealings with PSTCL for a specific period.

17.0 EXTENSION OF TIME

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No extension of time shall be allowed for completion of the assignment. 18.0 FORCE MAJEURE

During the pendency of the Contract, if the performance in whole/part by either party or any obligation there under is prevented/delayed by causes arising out of any war, hostility, civil commotion, acts of the public enemy, sabotage, fire, floods, explosions, epidemics or under order/instructions of Central/State Government/PSERC Regulations, strikes/lockout, embargo, acts of Civil/Military authorities or any other causes beyond their reasonable control, neither of the two parties shall be made liable for loss or damages due to delay or failure to perform the contract during the currency of Force Majeure conditions, provided that the happening is notified in writing (with documentary proof) within 30 days from the date of the occurrence.

19.0 DEDUCTIONS OF AMOUNTS DUE TO PSTCL.

Any excess payment made to the firm inadvertently or otherwise under this contract or on any account whatsoever and any other sum found to be due to PSTCL by the firm in respect of this contract or any other contracts of work order or on any account whatsoever may be deducted from any sum whatsoever payable by the PSTCL to the firm either in respect of this contract or any work order of firm from any other account by any other office of the PSTCL.

20.0 NEGLIGENCE AND DEFAULT CLAUSE

In case of negligence on the part of professional firm to execute the order/contract with due diligence and expedition and to comply with any reasonable orders given in writing by the professional firm in connection with the Contract or any contravention in the provisions of the contract, PSTCL may give 21 days’ notice in writing to firm to make good the failure or neglect or any Contravention and if the firm fails to comply with the notice within, time considered to be reasonable by PSTCL, he will suspend/terminate business dealings with the firm for a specific period apart from claiming reasonable compensation/damages, forfeiture of security etc.

21.0 CANCELLATION

The PSTCL reserves the right to cancel the work order as a whole or in part at any time or in the event of default on the part of the firm prior to the receipt of information regarding taking in hand of the work.

22.0 LEGAL

i. Professional Firm will indemnify PSTCL against any liability or damages by

way of compensation arising from any accident to person or property of persons in the firm's employment.

ii. Professional Firm shall indemnify PSTCL against any liability or damages by way of compensation arising from any accident to any other person related to or unrelated to firm or PSTCL.

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iii. Professional Firm shall bear the entire responsibility, liability and risk relating to coverage of workforce under different statutory regulations including but not limited to Workmen Compensation Act, ESI Act, Factories Act, Contract Labour Act 1970 etc. and other relevant regulations, as the case may be.

iv. Professional Firm shall be fully responsible for payment of benefits to its staff deployed for the subject assignment including but not limited to Provident Fund, Bonus, Retrenchment Compensation, Leave Encashment, etc. as per statutory provisions.

v. Necessary payment and liabilities as mentioned at (i to iv) above shall be the responsibility of the professional firm irrespective of payment received from PSTCL or otherwise.

vi. All taxes and other levies payable to government and or local authorities in respect of these works shall be the responsibility of the professional firm.

23.0 ARBITRATION

i. If at any time any question of dispute or difference what so ever shall arise,

between the PSTCL and the firm upon or in relation to or in connection with work order/contract, either party may forthwith give to the other notice in writing of the existing of such question, dispute or difference and the same shall be referred for sole arbitration of a nominee of the PSTCL who shall give a reasoned/speaking award. The award of the sole arbitrator shall be final and binding on the parties under the provisions of the Indian Arbitration Act 1996 and of the rules there under. Any statutory amendment, modification or re-enactment thereof for the time being in force, shall be deemed to apply and be incorporated in the contract/work order. The Sole Arbitrator shall be any officer of the PSTCL whose name is approved by the CMD of the PSTCL. It will not be objectionable if the Sole Arbitrator is an officer of the PSTCL and he has expressed his views on all or any of the matter in question of dispute or difference.

ii. Upon every or any such reference, the cost of and incidental to the reference and award respectively shall be in the discretion of the Sole Arbitrator so appointed who may determine the amount thereof or direct the same to be fixed as between solicitor and client or as between party and shall direct by whom and to whom and in what manner the same is to be borne and paid.

iii. The work under the contract shall, if reasonably possible continue during the arbitration proceedings and no payment due or payable by the PSTCL shall be withheld on account of such proceedings.

24.0 CANCELLATION OF CONTRACT FOR INSOLVENCY, ASSIGNMENTS OR

TRANSFER OR SUB LETTING OF CONTRACT. The Accepting Officer, without prejudice to any other right or remedy which shall accrue thereafter to PSTCL, shall cancel the contract in any of the following cases:-

a) If the firm or any partner thereof shall at any time be adjudged bankrupt or have a receiving order or order for administration of his Estate made against him or shall take any proceedings for liquidation or composition under any Bankruptcy Act for the time being in force or make any conveyance or

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assignment of its/effect of composition or arrangement for the benefit of his creditor or purport to do so, or if any application he made under any Bankruptcy Act for the time being in force the sequence of his Estate or if a trust deed granted by him on behalf of his creditors.

b) Assigns transfers, sub-lets or attempts to assign, transfer or sub-let any portion of the work without the prior approval of the Accepting Officer.

c) Whatever the Accepting Officer exercises his authority to cancel the contract under this condition, he may complete the work by any means at firm’s risk and expense provided always that in the event of the cost of completion (as certified by the PSTCL which is final and conclusive) being less than the contract cost, the advantage shall accrue to the PSTCL and that if the cost of completion exceeds the money due to the firm under the Contract the firm shall either pay the excess amount ordered by the PSTCL or the same shall be recovered from the firm by other means.

25.0 SPECIAL POWERS OF DETERMINATION

If at any time after the acceptance of the tender, PSTCL shall for any reason whatsoever not requires the whole or any part of the work, to be carried out, the PSTCL shall give notice in writing to the fact to the firm who shall have no claim to any payment of compensation or otherwise on account of any profit or advantage which he might have derived from the execution of the work in full but which he did not derive in consequences of the foreclosing of the work. He shall be paid at contract rates, for the full amount of the work executed including such additional works, as may be rendered necessary. He shall also be allowed a reasonable payment (as decided by the Accepting Officer) for any expenses sustained on account of workforce but which could not be utilized, as verified by the PSTCL. Neither shall the firm have any claim for compensation on account of any alterations having been made in the original specifications and instructions involving any curtailment of the work as originally contemplated.

26.0 UNDERTAKING

The Applicant shall have to give an undertaking that they shall not pay any commission etc. or engage any commission agent or liaison agent for dealing with PSTCL in any matter. This undertaking is required to be supplied along with the application in the prescribed format failing which their application is likely to be rejected.

27.0 PAYMENT CLAUSE

No advance payment shall be made to the firm. The professional service charges payable to the firm as per terms of the contract shall be released within reasonable period on satisfactory completion of assignments as per terms of the contract along with submission of audit report and its acceptance by the Management.

28.0 PENALTY CLAUSE

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The time allowed for carrying out the work as prescribed, shall be strictly observed by the professional form and shall be reckoned from the date of commencement of work. The work shall throughout the stipulated period of the contract be proceeded with all the due diligence (time being deemed to be the essence of the contract on the part of the professional firm) and the firm shall pay as penalty an amount equal to one half percent (0.5%) of the fee payable for every week, the work remains unfinished after the contract completion period, provided always that the entire amount of compensation to be paid under the provision of this clause shall not exceed five percent (5%) of the fee payable.

29.0 COMMENCEMENT OF ASSIGNMENT

The date of commencement of assignment shall be the date of execution of contract agreement which shall be intimated by PSTCL. The contract agreement shall be signed within 10 (ten) days from the date of issue of letter of intent (Letter of intimation for Empanelment) to the Audit Firm.

30.0 PERIOD OF CONTRACT AGREEMENT

The period of contract agreement shall expire upon successful completion of assignment. The firms so empanelled shall carry out the internal audit of offices as allocated by PSTCL for continuous period of 3(Three) Years and there shall be rotation policy for change of auditor after every three years.

31.0 LETTER OF INTENT AND AWARD OF CONTRACT

Acceptance of the proposal by PSTCL shall be communicated to the eligible qualified applicant firm by issue of Letter of Intent and such firm shall accept the offer within 7 (seven) days from the date of issue of Letter by returning a duly signed copy thereof and shall enter into a Contract agreement with PSTCL within 10 (Ten) days of issue of Letter on Non-judicial stamp paper of requisite value with Company Secretary, PSTCL, Patiala. Stamp duty is to be borne by the empanelled firm. The empanelled firm shall undertake to deposit Rs. 25,000/- as security with PSTCL before commencement of assignment failing which its empanelment with PSTCL will be cancelled and the assignment will be allotted among other empanelled firm. The empanelled firm shall furnish security deposit as per clause 7.10 above before signing the contract agreement.

32.0 TERMINATION OF AGREEMENT If the work entrusted is not proper and to the satisfaction of PSTCL, then the payment will not be released and if the work of the professional firm continues to be unsatisfactory, the agreement shall be terminated by PSTCL by 10 days notice at any time during subsistence of this agreement. The same will be entrusted to another professional firm and the extra expenditure incurred by PSTCL will have to be borne by the existing firm.

33.0 JURISDICTION

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Jurisdiction for filling any suit in case of any dispute shall be the Civil Courts at Patiala.

Company Secretary Punjab State Transmission Corporation Limited

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APPLICATION FORM

1. Name of the Firm:

2. Contact Person(s) /Authorised signatories:

3. Registered Address:

4. Tel No./Fax No.:

5. Name of the Chief Executive:

6. Legal status of the Firm:-

7. Date of incorporation/Registration of the Firm with the Institute of Chartered

Accountants of India

8. Details of Partners(Attach Documentary Proof)

S.No. Name of Partners Member

ship No. Qualification

Experience Date of Association with the Firm

9. Turnover of the Firm for Last Three Years(Attach attested copies of Annual

Statement of Accounts): Year Turnover (Rs.)

10. Details of Qualified Staff: (FCA/ACA):

NAME Qualification Membership No.

11. Details of Semi-qualified Assistants NAME Qualification Membership No.

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12. List of Audit and Certification work done in last 5(Five) Years years (Attach list

of major Five Clients along with documentary evidence)

Year No. of Clients

13. Audit Works in Hand (Attach list of major Five Clients along with documentary evidence) Year No. of Clients

14. Detail of Experience of Internal Audit in PSU(Attach documentary evidence)

Name of the Firm Nature of Audit Year of Assignment

15. Detail of Experience of Internal Audit in Power Sector (Attach documentary evidence) Name of the

Organization

Nature of Audit Year of Assignment

Name of the Authorised Signatory

Designation Name of the Firm

Signature

Place:

Date:

(Signature with Seal)

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DECLARATION

I/We hereby certify that:

1. The information provided above are to the best of my/our knowledge and belief, true and correct in all particulars.

2. There is no litigation pending against the company/firm or its Directors. 3. I/We shall furnish all information as required by PSTCL in connection with this

assignment. 4. All information provided by PSTCL is in the course of the assignment shall be

kept strictly confidential. 5. This is to certify that none of the Chartered Accountants or the Firm who are

going to be appointed with this work, have any interest in the business of the PSTCL and have no relative working in the Corporation. Further they have not been associated with Audit of Accounts of PSTCL and involved in financial dealings of the Corporation.

6. I/We understand and accept that PSTCL has a right to reject our application without assigning any reason therefore. Name of the Authorised Signatory

Designation Name of the Firm

Signature

Place:

Date:

(Signature with Seal)

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CONTRACT AGREEMENT FORM (To be entered on a Non-Judicial Stamped Paper of Rs. 15/- only) This contract agreement made this…………………………day of………………in the year…………………………………. ………. between the _________________, Punjab State Transmission Corporation Limited, Patiala hereinafter called ‘Owner’ and M/s…………………………….………………………..having their Regd. Office at ……………………..hereinafter called Internal Auditor This is in confirmation of the offer notified by the owner letter No……………………..dated……………wherein the Owner has offered the proposal for empanelment to get the internal audit done of PSTCL offices as detailed therein . In view of the foregoing, the owner and the empanelled firm ( M/s……………………. …………………………….. have agreed to the scope of work and the terms and conditions of the empanelment settled between them. The detailed terms and conditions, scope of work, the firm’s M/s …………………… acceptance of proposal and related correspondence, confirmation of letter of empanelment acknowledgement /acceptance (with amendment thereof) by the M/s……………… form part of this agreement. This agreement contains…………………..pages. In witness whereof the parties here to have affixed their signature on the day, month and year written as above. CONSULTANT OWNER Witness 1.__________________ Witness 1_________________ Witness 2__________________ Witness 2__________________