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SELECTION OF INTERNAL AUDITORS

FOR

PUNJAB STATE TRANSMISSION CORPORATION LIMITED

For Financial Years 2010-11 & 2011-12

For assignment of Internal Audit for Corporate Offices of PSTCL situated at Patiala and for field offices of EIC/Sub Station, CE/Transmission, CE/SO&C and CE/P&M comprising

offices of Circles /Divisions/Subdivisions.

REQUEST FOR PROPOSALS

Bid/CS/Internal Audit/01/2010-11

(RFP)

Company Secretary Punjab State Transmission Corporation Limited

The Mall, PATIALA-147 001

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PUNJAB STATE TRANSMISSION CORPORATION LIMITED

SELECTION OF PUNJAB BASED CHARTERED ACCOUNTANT FIRMS AS

INTERNAL AUDITORS FOR INTERNAL AUDIT OF OFFICES OF PSTCL

National Competitive Bidding (NCB) Bid-CS/Internal Audit/01/2010-11

1. Sealed offers in duplicate in three parts Part-I (Cost of Tender) , Part-II( Technical Bid) & Part-III(Price bid ) separately are invited from the Punjab based partnership firms of Chartered Accountants registered with the Institute of Chartered Accountants of India (ICAI) meeting with the qualifying requirements specified in Bid Specification No. Bid/CS/Internal Audit/01/2010-11 for assignment of Internal Audit for Corporate Offices of PSTCL situated at Patiala and for field offices of EIC/Sub Station, CE/Transmission, CE/SO&C and CE/P&M comprising offices of Circles /Divisions/Subdivisions as detailed in Annexure-A of the tender specification. Bid details are available on our website www.pstcl.org

2. The eligibility criteria for selection of Internal Auditors (details in Para-IX) would be

as under:-

a) The Chartered Accountant firm should be Punjab based Partnership Firm with minimum 3 FCA/ACA full time Partners with good office set up.

b) The Partnership Firm should have in existence for at least 05 (Five) years to prove that it is a well-established firm.

c) The Firm should have experience in conducting internal audit in private and/or public corporate sectors and

d) Average Annual Turnover of last 3 years of the firm should be at least Rs. 15.00 Lacs.

(4) “REQUEST FOR PROPOSAL” containing eligibility criteria, terms of reference and general terms & conditions etc. can be downloaded from our website http://www.pstcl.org against non-refundable cost of Rs. 500/- (Five Hundred only) in the form of demand draft in favour of “Accounts Officer/Cash, PSTCL”, payable at Patiala. This cost for document of “REQUEST FOR PROPOSAL” must be furnished in a separate envelope along with the bid failing which the bid of the firm shall not be accepted.

(5) The bid documents can be downloaded from 2nd February to 7th March, 2011 & bid should be submitted in sealed cover and delivered at the address given below latest by 7th March 2011 up to 3.00 P.M.

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

7) The documents for the EMD and Technical bids will be opened at 3.30 PM on 7th March 2011 at 3.30 PM at the address given below in the presence of authorized representatives of the bidders, who may like to attend. The part III financial proposal of only those bidders shall be opened who are short listed on the basis of qualifying criteria and evaluation. The date and time for opening of part III of the bids will be intimated to the qualifying firms.

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(8) The Firm shall be required to submit fixed Earnest Money 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 along with the bid/proposal. If the Earnest money is not submitted with the proposal or is not found in order, the Technical proposal will not be opened and the bid will be rejected. The Earnest Money Deposit, proof of eligibility, technical proposal and financial proposal each shall be properly bound separately with all pages numbered serially.

(9) Based on overall evaluation of Technical bids of the short listed bidders and their financial bids, PSTCL will appoint the Internal Auditors.

(10) The offer should be valid for 120 days from the date of opening of bids. (11) The Company Secretary, PSTCL reserves the right to reject any or all bids without

assigning any reason and no claim on this account shall be acceptable. (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 Regd. Office, PSEB Building,

Room No. 204, Three Storey Building, The Mall, PATIALA-147 001 (PUNJAB)

Phone 96461-20712

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REQUEST FOR PROPOSAL

REGARDING SELECTION OF CHARTERED ACCOUNTANTS FIRMS FOR INTERNAL AUDIT OF PSTCL FOR THE FY 2010-11 & 2011-12.

I. Introduction Pursuant to 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 has been notified by the State Govt. as the State Transmission Utility and

• Punjab State Power Corporation Limited (PSPCL), to undertake the Distribution, Trading and Generation of electricity , PSTCL is a deemed transmission licencee under section 14 of the Electricity Act,

2003. PSTCL commenced its operation from 16th April 2010. The major source of revenue of the Corporation is the transmission charges which it realises from PSPCL and other users at the tariff approved by Punjab State Electricity Regulatory Commission. Estimated Annual turnover of PSTCL for the FY 2010-11 will be around Rs. 670 crore and the turnover for the FY 2011-12 will be known after PSERC approves the transmission tariff for the FY 2011-12.

II. OBJECTIVES OF THE ASSIGNMENT

PSTCL intends to select CA firms based in Punjab for assignment of the internal audit of its accounts for the FY 2010-11 and 2011-12.

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 timely business

decisions. 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.

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III. ORGANIZATION STRUCTURE

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). EIC/SS, CE/TL, CE/SO&C and CE/P&M report to Director(Technical). Organization set up of PSTCL is divided in to Corporate Office and field offices

comprising of Circles, Divisions and Sub divisions. For the purpose of internal audit, organization is divided in to Corporate office and field offices comprising of EIC/Sub Station, Patiala, CE/Transmission Lines, Patiala, CE/P&M, Ludhiana, SE (Civil Constructions), Patiala and (SLDC)/CE/SO&C, Ablowal.

Office of Financial Advisor deals with Loans and Funds, Budgets, Banking &

Drawing etc. and the office of Chief Accounts Officer (Corporate Accounts) is concerned with Pay & Accounts of Gazetted Officers, Cash, Compilation of Accounts, preparation of Trial Balance and Annual Statement of Accounts, Taxation matters, etc. Presently all monthly accounts are post audited in corporate office in WAD section which is programmed to be dispensed with from FY 2011-12.

b. EIC (Sub-station)

Deals with Construction of 132/220KV and above Grid Substations and up-gradation/augmentation of existing substations i.e. up-gradation from 66KV to 132KV/220KV, 132KV to 220KV and commissioning of new capacitor banks. Grid Sub-stations, Replacement of damaged power transformers and other substation electrical equipment, Construction work involving civil works of new substations and Design and procurement of material required for erection of Sub-stations. Construction of 66 KV grid sub-stations on behalf of PSPCL.

c. CE(Transmission Lines)

Deals with Design and procurement of material for erection of Transmission Lines of 132KV and above, Erection of new as well as up-graded Transmission Lines both departmentally as well as through outsourcing, Preparation and approval of new/ revised route plans, Design and Development of Transmission lines components such as towers, Hard fittings, disc. Insulators etc. and Coordination with various agencies like CEA Power Grid, Ministry of Power, Railways, various departments and BSNL etc. regarding issues relating to Transmission lines. Construction of 66 KV grid sub-stations on behalf of PSPCL.

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d. CE(P&M)

Deals with Operations and Maintenance of 220 KV and 132 KV Substation, 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 substation.

e. CE(SO&C) and SLDC

State Load Dispatch Centre (SLDC), 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.

IV. No. of Internal Auditors to be appointed

For the Financial Year 2010-11 & 2011-12, number of Internal Auditors required on the basis of Functions of the organization shall be as under:

Sr. No.

Name of Organization No. of Audit Firms to be appointed

No. of Accounting Units in each Organization

1 P&M 2 32 2 TL, Sub-station & Civil

Construction Divisions 1 14

3 SO&C including SLDC & for Corporate Level Offices

1 11

For division of work, please refer to annexure A.

V. Scope of the Work

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

A. Common to all Offices:

1. SANCTIONS & BUDGETS

i. 100% checking for the full period at the end of the Financial Year, along with Administrative/ Financial Approval, detailed estimation being technically sanctioned by the Competent Authority.

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ii. Budget allocated to Circles & Divisions as well as 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 including the works being done for PSPCL. 2.1 CONTRACT AGREEMENTS

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

procedure of Registration of Contractors including e-tendering. ii. Competent Authority to sanction the Contract & amendments issued, if any, and its

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

commented. iv. Scrutiny of supply of manpower contracts/outsourcing. v. Comments on turnkey projects implementation.

2.2 WORK ORDER

i. The Work Orders must have Administrative approval and Technical Sanction by the

competent authority and the proposal must be justified on the basis of reasonability of rates and Budgeted Provisions.

ii. The total work through open, limited & Single tender should be within sanctioned budgets.

iii. All work orders should be in compliance with the Work Regulations of the Corporation as amended up to date.

2.3 PURCHASE ORDER

i. The orders placed by the CE’s/EIC, Circle, Division and subdivision offices should be as per the Budget provision.

ii. Delay in supply and resultant recovery of L.D (Late Delivery) charges etc. should be checked and commented.

iii. Waiver of L.D charges by Competent Authorities to be critically reviewed with reference to the existing circumstances.

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.

vii. All purchase order shall be in conformity with the Purchase Regulations of the Corporation.

3 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 REVIEW OF INSURANCE CLAIMS

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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.

5 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.

6 ESTABLISHMENT- SALARIES & WAGES

i. Test Checking of Pay Bills with reference to rules & Proprietary aspects- at least for two months including last month of the audit period 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 two months in each phase of Internal Audit including last month of the audit period.

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.

7 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. To check misclassification of revenue expenditure required to be capitalized or vice versa.

8 STORES & MATERIAL ACCOUNTING

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

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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.

9 Special emphasis should be made for Vehicles including heavy vehicles with reference

to estimates, Logbook, maintenance sets etc.

10 Verification of Cash, Cash Book & its Auditing, Bank reconciliation of Cheque drawn Statement, Accounting of Stale Cheques, and Dishonor of Cheques.

11 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 licence 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).

12 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.

13 Recovery and deposit of Service Tax. 14 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.

15 Comments on the adequacy of internal control procedure commensurate with the size of the corporation and the nature of its business, for the purchase of inventory and fixed assets and for the commercial arrangement for revenue realisation through transmission charges/open access charges.etc in compliance to clause No. 4(iv) of Companies (Auditor’s Report) Order, 2003.

16 Comments on compliance report submitted by the individual office for previous Internal Audit Reports, if any.

17 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.

18 SUGGESTIONS/RECOMMENDATIONS FOR ENHANCING OVERALL / INTEGRATED EFFICIENCY: B. FOR Civil Works Divisions, GRID,TLSC & P&M DIVISIONS,

In addition to the above, the internal Auditor shall have to carry out the following

specific checking in respect of Civil Works, Grid, TLSC & P&M Divisions.

i. Test checking of initial Works Register (Form CE-26).

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ii. Test Checking of Works Register (Form CE-21). iii. Test Checking of Material Estimate Control Register (MAT-28). iv. Test Checking of FORM-4 Register and other registers as mentioned in Manual of

Damaged Transformers. v. Scrutiny of Contractor's ledger.

vi. Checking of accounts of maintenance of residential/office buildings & colonies under the control of Civil works Division.

vii. Checking of expenditure on land acquisition and register of land/property. viii. Checking of final bills of contractors.

ix. Checking of T&P Register (Works & Office). x. To assess loss due to non /delayed dismantlement of redundant lines/Substations,

non-accountable of dismantled material if any.

C. 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 and 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. Transfer within division and its reconciliation and settlement of accounts.

vi. Stock verification Reports, Adjustment of surplus/deficits. vii. Slow moving/obsolete/unserviceable material.

viii. Checking of materials transferred to PSPCL and other agencies and its adjustment.

D. Corporate Office

Scope of work to Conduct Internal Audit of Corporate Office for the year 2010-11 & 2011-12 shall be as under:-

a) LOAN, BANK & DRAWING SECTION

Checking of following activities undertaken in Loan Section:

i. REC/ PFC/LIC/Banks etc., 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.

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b) 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. Supplier Income Tax payment.

vi. MMBS/Staff Welfare Fund payment. vii. RPFC (CPF) payment.

viii. FDR Register including renewal. ix. Interest received against FDR to be paid to concerned parties. x. Stale Cheque Register.

xi. Adequacy of verification of cases/surprise verification. xii. Discontinuance of unnecessary Bank Accounts.

c) H.O.- 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 regulation.

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.

E. STATE LOAD DESPACTCH CENTRE (SLDC) Scrutiny and verification of all commercial matters including Open Access charges in

compliance with the relevant regulations of appropriate Commission.

F. 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.

VI. Periodicity of Audit

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The internal audit of above accounting units and Corporate Offices for the current year 2010-11 shall be on annual basis and must be completed within 45 days from the date of closure of financial year or from the date of LOI whichever is later. However for FY 2011-12, internal audit and reporting shall be on half yearly basis. The internal audit for 2011-12 must be completed within one month from the date of commencement of the assignment. The date of assignment will be any date in the month of October and April respectively which will be communicated by PSTCL.

VII. Modus operandi of Internal Audit

The method adopted for the inspection 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.

VIII. Method of Reporting

The auditors shall conduct the internal inspections 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 respective accounting units. 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 inspection report. 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 is need to be intensified. The report should also mention the method and way of working adopted by the field units. The report should contain the major observations with examples of nonconformity. The report should also spell out the overall risk, the organization is carrying.

The internal audit report in compliance with the above should be submitted in quadruplicate (3 copies in English and one copy in Punjabi version) to the Corporate office.

IX. Qualifying Criteria

Qualifying Requirement (Technical Bid) For Corporate Office Internal Audit and field level Internal Audit shall be as under:

1 Nature of Firm Should be Punjab based Partnership Firm with

minimum 3 FCA/ACA full time Partners with good office set up.

2 Existence of Firm Should have in existence for at least 5 years. At least two partners should have an association of 3 years or more with the firm and one partner of the firm should have an association of one year or more

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3 Experience Should have experience in conducting internal audit in private and /or public corporate sector.

4 Average Annual Turnover For last three years should be at least Rs. 15.00 Lacs.

5 Total audit staff in partnership Firms

Minimum 10.

Bidder should supply the following information in part A of the envelop (Technical Bid) a Year of Establishment b Year of Registration of Firm with

ICAI

c Details of Partners d Details of fully Qualified

Assistant(s)

e Details of Semi- qualified assistant f Qualification of staff Qualification Nos.

CAs Postgraduate in Commerce Graduate in Commerce

g Audit and Certification work done No. of clients 2005-06 2006-07 2007-08 2008-09 2009-10

h Audit work in hands No. of clients 2010-11 2011-12

i Details of list of major five clients for 2009-10 & 2010-11

Name Form of org. Turn over

j Experience of audit of PSUs other than Banks and Insurance sectors

Evaluation Parameters Sr. No.

Parameters

1 No. of Years’ Experience 2 No. of Full Time Partners 3 No. of Qualified Full Time CA employees 4 In case of previous internal audit assignment 5 Experience of Internal Audit assignment in PSU/Govt. Utility 6 Experience of Internal Audit assignment in Power sector 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 the ICAI in the last 5 years

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3. No proceedings for professional misconduct are pending against the Firm on the date of the submission of the bid.

X. SCHEDULE OF PRICE BID

Bidder should quote their rates in the following format and should be duly signed and sealed:

Sr.No Internal Audit Assignment of

the Offices as per the Scope of Work

Lump-sum offer in Indian Rupee for 2010-11 2011-12

1 CE, P&M Audit Unit- 1 comprising P&M Circles of Amritsar, Jalandhar, & Bhatinda

2 CE, P&M Audit Unit- 2 comprising P&M Circles of Ludhiana & Patiala

3 CE/TL, CE/Sub-Stations and Civil Construction Circles Audit Unit-3

4 Corporate Office and SLDC Audit Unit-4

Note:

i. The rate should be exclusive of Service Tax and other Statutory levies but including out of pocket expenses, tour/travel and other incidentals required for completing the assignments covering objectives and scope as mentioned in the tender document.

ii. Bidders should quote FIRM prices only. iii. The rate quoted should be given in figures and words and any overwriting, erasion,

cutting etc. should be legibly signed or avoided. Incomplete bids shall be rejected.

XI. GENERAL TERMS & CONDITIONS

General Instructions to be observed by the bidding Firm’s. 1. (i) The bid must be complete in all respects. The following points should carefully be

studied in order to ensure submission of a complete and comprehensive bid. Failure to comply with any of these instructions or to offer brief explanation for non-compliance is likely to render effective comparison of the bid as a whole impossible and may lead to rejection of an otherwise competitively lowest offer. Further before submission of the bid, the bidders are required to make themselves fully conversant with the scope of work, payment and penalty clause, general terms & conditions etc.

(ii) The bid shall be submitted in Triplicate and all copies shall be separately tagged and

marked as Original/Duplicate/ Triplicate as the case may be.

(iii) The bid shall be submitted in three parts i.e. Part-I, Part-II and Part-III separately. Each part will be enclosed in a separate envelope duly super-scribed the details of the parts such as Part I, Part II and Part III on the envelope. All the three envelopes will

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be further enclosed in a larger envelope. The following procedure will be adopted for the opening of tenders.

a) Part-I Cost of bid Documents & Earnest Money: The first part will consist of Cost

of bid Documents & Earnest Money in the form of Demand Drafts in favour of AO/Cash, PSTCL, Patiala.

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

c) Part-III Financial Bid: The third part will consist of the financial bid.

d) The bidder or his duly authorized representative may remain present in the opening of bids.

e) The bidder revising their offer or withdrawing the same within the validity period after opening of the tenders are liable to be ignored/black listed. OPENING OF BIDS Bids will be opened in the following manners: Firstly the main envelope containing the bids will be opened in the presence of the

bidders/representatives who choose to be present at the time, date and at the prescribed address. After opening the main envelope, the envelope marked Part-I (Cost of tender specification & Earnest Money) shall be opened first and if the cost of specification & earnest money will be found to be as per the requirement of the specifications, only then the envelope marked Part-II shall be opened. The bids without earnest money and cost of tender shall be out rightly rejected.

After opening Part-II of the bids (Proof of eligibility & Technical bid), the bids will

be evaluated by PSTCL with reference to the bid conditions. The Part-III will be opened in respect of those bidders who are short listed on the basis of qualifying criteria and evaluation done by PSTCL as mentioned in Clause-IX of Bid Document. The date and time for opening of Part-III of the bids will be intimated to the qualifying firms. The financial bids (Part-III) will be opened in the presence of the representative of the qualifying bidders who choose to be present.

2. PSTCL reserves the right to modify specifications at any time and to reject any or all

the tenders 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 bidders in the preparation of the tenders.

3. Bids will be received in the office of Company Secretary, Room No. 204, Three

Storey Building, PSEB Building, The Mall, PSTCL, Patiala upto specified hours on the due date given in the tender notice and shall be opened at the fixed hours in the presence of bidders or their representatives who may like to be present. In case the due date of receiving/opening of bids happens to be a holiday, bids shall be received and opened at the same time & place on the next working day.

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4. All taxes and duties leviable shall be paid extra and the same should be shown

separately as prevalent on the date of opening of tenders, and will be paid at the rate as may be actually prevalent at the time of payment within contractual completion period, otherwise these elements shall be deemed to be included in the quoted prices and will not be paid extra.

5. The selection of audit firms shall be made on the basis of evaluation of financial bids

on L-1 basis for each financial year. However no firm shall be given the assignment to conduct audit of more than one audit unit as mentioned in Para IV of the bid document.

6. CO-ORDINATION WITH OTHER AGENCIES:

During the course of assignment, the Firm and its authorized representatives are required to make his best effort to work in harmony with others in the best overall interest of the PSTCL and comply with the instructions for making alternative arrangements at any time for maintaining the work schedule at no extra cost to the PSTCL.

7. ASSIGNMENT OR TRANSFER OF SUB CONTRACT

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.

8. COMPLIANCE TO REGULATIONS AND BYE LAWS

The firm shall conform to the provisions 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.

9. 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 firm to the PSTCL for its information. Any change in the address of the firm shall also be intimated to the PSTCL.

10. SECURITY DEPOSIT

i. The successful bidder shall be required to submit security deposit for faithful

execution of the work order/contract at the rate of five percent (5%) of value of work order. No interest shall be payable to the firm on the amount of security. Earnest Money received with the bid shall be converted into security deposit and the balance, if any shall be deposited in the form of demand draft in favour of Accounts Officer/Cash, PSTCL, Patiala.

ii. 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.

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iii. 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.

11. EXTENSION OF TIME

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

12. 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.

13. 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.

14. 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.

15. 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.

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16. 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.

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.

17. 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.

18. CANCELLATION OF CONTRACT FOR INSOLVENCY, ASSIGNMENTS OR

TRANSFER OR SUB LETTING OF CONTRACT.

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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 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.

19. 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.

20. UNDERTAKING

The bidders will 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.

21. 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. 100% payment along with taxes shall be paid within 30 days of receipt of the bills along with Audit Report and its acceptance by the Management.

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22. PENALTY CLAUSE 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.

23. COMMENCEMENT OF ASSIGNMENT The date of commencement of assignment shall be the date of execution of contract

agreement and the contract agreement shall be signed within 10 (ten) days from the date of issue of letter of intent to the Audit Firm.

24. PERIOD OF CONTRACT AGREEMENT The period of contract agreement shall expire upon successful completion of

assignment.

25. LETTER OF INTENT AND AWARD OF CONTRACT Acceptance of the bid proposal by PSTCL shall be communicated to the successful

bidder by issue of Letter of Intent. The successful bidder shall accept the Letter of Intent within 7 (seven) days from the date of issue of Letter of Intent by returning a duly signed copy thereof and shall enter into a Contract agreement with PSTCL within 10 (Ten) days of issue Letter of Intent on Non-judicial stamp paper of requisite value with Company Secretary, PSTCL, Patiala. Stamp duty is to be borne by the bidder. The bidder shall furnish security deposit as per clause 10 above before signing the contract agreement.

26. LIABILITY CLAUSE Notwithstanding anything stated hereinabove, the liability of the Professional Firm

shall be governed by the clause as follows.

PSTCL agrees that the Professional Firm shall not be liable to the Client for any losses for an aggregate amount in excess of the fees paid by the Client to the firm under the Contract.

Further in no even shall the Professional Firm be liable for any loss of use, contracts data, goodwill, revenues or profits (whether or not deemed to constitute direct Losses) or any consequential, special indirect incidental, punitive or exemplary loss, damage, or expense relating to this Contract or the Services.

27. 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,

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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.

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

Patiala.

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Annexure-A

Sr. No.

Chief Name Circle Name Internal Audit Assignment of the Offices as per Scope of work

CE/ P&M Ludhiana 1 CE/ P&M Ludhiana -Audit Unit-1 1) P&M Circle Amritsar Grid Mtc. (P&M), Amritsar 2) Grid Mtc. (P&M) Buttari 3) Grid Mtc. (P&M) Fatehgarh Churian 4) Grid Mtc. (P&M) Patti 5) Grid Mtc. (P&M) Sarna 6) Grid Mtc. (P&M) Verpal 7) Grid Mtc. (P&M) Wadala Granthian P&M Circle Jalandhar 8) P&M Divn. Jamsher 9) P&M Divn. Mahilpur 10) P&M Divn. Kapurthala 11) P&M Divn. Grid Mtc. Dasuya 12) Protection Divn. Hoshiarpur 13) Protection Divn. Jalandhar 14) P&M Circle Bhatinda P&M Divn.,Bhatinda 15) P&M Divn, Ferozepur 16) P&M Divn.Moga 17) P&M Divn. Mukatsar CE/ P&M Ludhiana- Audit Unit-2 1) P&M Circle Ludhiana P&M Divn. Jagraon 2) P&M Divn. Dhanderi Kalaan 3) P&M Divn. Lalton Kalaan 4) P&M Divn.No.1,Gobindgarh 5) P&M Divn.No.2,Gobindgarh 6) Protection Divn. No. 1, Ludhiana 7) Protection Divn. No. 2, Ludhiana 8) P&M Circle Patiala. P&M Divn., Mohali 9) P&M Divn, Ablowal 10) P&M Divn.Malerkotla 11) P&M Divn. Patran 12) P&M Divn. Rajpura 13) Protection Divn. Sangrur 14) Protection Divn. Mohali 15) Protection Divn. Patiala. CE /TL & CE/ Sub-station Patiala: Audit Unit-3 CE /TL Patiala. 1) TLSC Circle Jalandhar TLSC Divn., Jalanhar 2) TLSC Divn. Mohali 3) TLSC Circle, Patiala TLSC Divn. Bathinda 4) TLSC Divn. Patiala. CE/ Sub-station Patiala

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5) Grid Circle Ludhiana. Grid Divn. Amritsar 6) Grid Divn. Jallandhar 7) Grid Divn. Ludhiana 8) Grid Divn. Moga 9) Grid Divn. Patiala 10) Civil Circle Jalandhar Civil Works Divn. Jalandhar 11) Civil Works Divn. Ludhiana 12) Civil Circle Patiala Civil works Divn. Mohali 13) Civil Works Divn. Mukatsar 14) Civil Works Divn. Patiala Corporate Offices and C.E./ SO&C including SLDC: Audit Unit-4 C.E./ SO&C including SLDC, Ablowal 1) Communication Circle

Jalandhar PLC Divn. Amritsar

2) PLC Divn., Bathinda 3) PLC Divn. Ludhiana. 4) PLC Divn., Patiala 5) SLDC Patiala. Corporate Offices, Patiala 6) Chief Accounts

Officer/Corporate Accounts

Pay & Accounts

7) Cash Section, Patiala 8) A&R Section, Patiala 9) Financial Advisor Banking & Drawing, Patiala 10) CPC, Patiala

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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 acceptance notified in the PSTCL work order

No……………………..dated……………wherein PSTCL has accepted the proposal of the

Audit Firm for the internal audit of the Offices of ………………..

In view of the foregoing, the PSTCL and the Audit Firm have agreed to the scope of work

and the terms and conditions of the internal audit assignment as contained in the Bid.

The Bid terms and conditions, the Audit Firm’s proposal and related correspondence and the

work order acknowledge/accepted (by the consultant 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.

Audit Firm PSTCL

Witness 1.__________________ Witness 1_________________

Witness 2__________________ Witness 2__________________