Appointment of Internal Auditor for Central UP Gas Limited (CUGL).

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Request for Proposal for Valuation as per Ind AS 103 and Ind AS 109 for BPCL.

Bid Document for Appointment of Internal Auditor for Central UP Gas Limited (CUGL).

Internal Audit for Central UP Gas Limited

The company intends to a firm of Chartered Accountants to carry out regular internal audit including systems and procedures of M/s CENTRAL UP GAS LIMITED (CUGL), a joint venture company of Gas Authority India Limited (a Maharanta company) and Bharat Petroleum, BPCL. A brief about the company and its branches/locations and Joint Venture Companies are placed at Annexure.

1.1 The broad scope of work which is indicative and is not exhaustive is listed below –

Scope of Work
1Contract and Procurement (C&P):

Checking of contracts/Purchase Orders starting from indent to award including closure of contracts/purchase orders as per the defined Contract & Procurement Procedure, Delegation of Power and Office Orders/Circulars issued by the company from time to time ensuring the documents like indemnity bond, bank guarantee, etc. are as per the approved formats of the company. To carry out 100% checking for contracts/purchase orders valuing above Rs.10 lacs and for contracts/purchase orders below Rs.10 lacs, checking on random basis at least

30%.

2Material Management :

i)   Checking of receipt of material as per PO, creation of proper records like Inspection Note, GRV, SIV, MIT, MTN, etc. and accounting thereof in SAP system including checking of PSL.

ii)   Checking of inventory management including monitoring of slow/non-moving and obsolete inventories.

iii)   Checking of Material/Inventory reconciliation.

ii) Checking of physical verification report including adjustment/write-off and accounting thereof, if any.

3Construction Contracts and CNG projects:

a)   Ongoing Construction Contracts-Material issue process, Transactions recorded, Bills raised by Contractors, Material Reconciliations, Inventory with Contractors, Recoveries, Compliance to contract terms, Refund of Security Deposits

b)   The process of review of “Capital Work in Progress” and Capitalization Process.

c)  Defect liability period – Ensure that repairs during Defect Liability Period as per contract are done on non-chargeable basis.

d)  Planning – Review of process for planning of CNG stations & land acquisition and timely completion of projects.

e)   Timeliness – Review of all on-going project activities and their timely completion.

f)  Review of labour regulations in respect of applicable law and regulations. g) Approvals/NOC/permission for laying pipeline.

4Operations & Maintenance Review:

Sub-processes to be covered in the process are:

i)   Surveillance of the pipelines

ii)   Maintenance of network pressure

iii)   Transportation of gas to DBS

iv)   Odourisation of Gas

v ) Complaint and emergency handling

vi)   Loss on Unaccounted Gas (LUAG)

vii)   Third Party damages

viii)   Equipment capacity utilization

5Repairs and Maintenance (Plant & Machinery)

Review of Repairs process covering-

i)  Compliance to contract terms and conditions

ii)   Adherence to the maintenance schedules

iii)   Bill passing and payment to the contractor.

iv)  Process of creating provision for Quarterly closing.

Review of Maintenance process covering-

i)  Preventive maintenance schedules: CNG outlets, PNG network, Steel network and domestic connections

ii)   Breakdown time

iii)   Availability of equipment

6Services of Third Party Inspectors (TPI)

Review of Services of Third Party Inspectors (TPI) process covering-

i)  Process of service record maintenance.

ii)   Reporting hierarchy.

iii)   Bill processing and payment.

iv)  Process of taking provision for Quarterly closing.

v)   Inspection Report & QA/QC Report.

7Repair & maintenance of Offices/ Warehouse.

Review of Repairs and Maintenance process covering

i)   Compliance to contract terms and conditions

ii)   Adherence to the maintenance schedules

iii)   Bill passing and payment to the contractor.

iv)  Process of taking provision for Quarterly closing.

8CNG/PNG Billing:

i)   Checking of CNG/PNG billing starting from meter reading to processing of invoices considering the approved pricing and collection thereof.

ii)   Analysis of exceptional cases.

iii)   Checking the basis of pricing.

iv)   Physical checking of Joint Meter Reading once in a quarter on random basis for fortnight billing for each city for CNG as well as PNG.

vii)   Checking the adequacy of security deposit towards the invoice values as well as equipment.

viii)   Checking of receipt of payment/encashment of instrument.

ix)     Checking of instruments as per CUGL approved format.

x)   Checking of Debit/Credit Notes for interest, etc. as per approval and accounting thereof.

xi)   Checking of timely processing of invoices as per the approved procedure and bringing out the irregularities, if any.

xii)   Review ageing of debtors and recommendation thereof for recovery/write- off.

xiii)   Review of nature of customer’s complaints.

xiv)   Scrutiny of documents to identify control gaps in the process reviewed.

9Gas Sourcing:

Review of Gas sourcing process covering-

i)   Vendor master maintenance

ii)   Procedures for sourcing APM/ Non APM, monitoring prices

iii)   Process for raising purchase orders

iv)  Process for ascertaining the quantity and quality ( calorific value) of gas supplied by the vendor

v)  Process of fulfillment of nominated quantity

vi)   Procedures for bill passing and payment

vii)   Process for adjustment of foreign exchange differences

viii)   Compliance with the agreement / MOU

ix)     Raising of debit notes and credit notes

x)  Procedures for reconciling and confirming balance outstanding

xi)   Compliance to government APM norms.

10Gas Reconciliation:

Quarterly checking of gas reconciliation including normal and abnormal loss suggesting remedial measures wherever thought appropriate including accounting thereof.

11Marketing Activities including Registration & Refund

Sub-processes to be covered in the process are:

i)   Gas marketing – Domestic, Commercial and Industrial

ii)   Assessing the customer’s needs/ marketing opportunities

iii)   Marketing objectives and strategies

iv)   Implementation of strategy

v)   Monitoring & Control

vi)   Customer inquiry / complaints receipt

vii)   Response to enquiry & intimation to functional departments

viii)    Systems to address varied information needs

ix)     Response to complaint and intimation to functional departments

x)  Performance monitoring systems

12Finance and Accounts Review :

Financial transaction audit of payment , receipts & Journal Vouchers including bill passing ( 100% checking of for each item of “Rs.10/- lacs and above” and for balance commensurate sampling at least 30% based on test check) , Sundry Debtors and Creditors, Funds

Management , Fixed Assets management , General accounting review , Bank Guarantees/LCs, Compliance to Indian Accounting Standards and availability of audit trail , Accounting of

Debit / Credit Notes ,General Ledger Review , Review of inter control/check systems, Capitalization , Depreciation, Capital Work in Progress (CWIP), Provision of liabilities,

Review of applicable Govt. Audit and Statutory Auditors Comments and its compliances, etc.

13Statutory compliances

The regulatory compliance review would comprise of review of the following:

i)   Compliance process laid down and followed by the Company

ii)   Process for updating of the compliance requirements

iii)   Process of reporting of non compliances

iv)   Compliance check of the following Acts:

–  Various State’s Sales Tax

–  Excise & CENVAT

–  Income Tax – in respect of Advance Taxes, TDS, Various returns filing, etc.

–   Service tax

–  Any other tax as applicable

14Annual Financial Statement Closure Process :

All required physical & financial reconciliation ,Closing of Accounts , Debtors/Creditors/Bank – Balance Confirmation, Compliance to the requirement of CARO, General Ledger Review , Compliance to applicable GAAP & Statutory guidelines , Revenue Recognition , Financial Assets verification ,Related party transactions, Applicability and Internal Financial Control (IFC) as per statutory requirement, Provision of liabilities, etc.

15Budgeting and MIS Review:

Costing records review, variance analysis, exceptional reporting and all relevant physical and financial ratio analysis.

16Insurance :
Coverage and claims Identification of insurable assets , Selection of policies , Finalization of policies , Monitoring – Policies and Coverage , Renewals , Claim submission , Claims pending etc.
17HR Review:

HR compliances , hiring of accommodation – Office as well as residential, arrangement of security services, Land records, Physical Verification of Fixed Assets, etc.

18HSE (Health, Safety and Environment)

Sub-processes to be covered in the process are:

i)   Compliance to internal policies

ii)   Incident analysis

iii)   Compliance to safety audit procedures

iv)   Compliance to Environment Regulations

v)   Training

vi)   Review of readiness of Firefighting, Meetings on safety, etc.

19Information Technology General Controls

Sub-processes to be covered in the process are:

i)  Process for Data Safety on SAP B1

ii)   Access to Data servers

iii)   Infrastructure maintenance and safety

iv)  Process of physical verification of IT assets

v)   Compliance to required IT process

20Code of Practice (COP) & Service Standards (SS), (specified by GAIL & PNGRB)

The compliance review of Code of Practice (COP) & Service Standards (SS) would include adherence to the following standards issued by PNGRB:

i)   Code of practice for quality of service standards

ii)   Code of practices for Emergency Response

Note: Audit plan covering above points to be mutually discussed before start of the audit and this may be amended / changed as per annual plan of audit as approved by Audit Committee.

Minimum man power deployment for internal audit of CUGL will be as below: (Excluding the period

for attending the meeting of audit Committee/ Management Review / Board meetings):
ParticularsNumberMinimum deployment period per quarter
Senior Chartered Accountant (with minimum

10 Years post qualification experience)

12 to 3 days
Qualified Chartered Accounted (with minimum two years post qualification experience)1Two weeks
Qualified Technical professional (with minimum two years of experience)1Two weeks

Note 1: Name of the team member is to be declared before start of the 1st audit and any change of team member need to be approved /consented by CFO of the Company.

Other Terms:

  1. It may be noted that the internal audit assignment is to be carried only by the regular employees of your firm.
  2. Documents in support of availability of above stated manpower to be submitted along with the bid.

TECHNICAL CRITERIA

  • Firm should have experience of conducting internal audit in India for minimum 7 years involving financial / technical / system / process i.e. on the functions and activities of a co of Oil & Gas sector / Petrochemical sector / Fertilizer sector / CGD sector / Refinery sector in India.
  • Firm should have executed a single order value of minimum Rs 5.00 Lakh having experienced as internal auditor as stated above.
  • Experience acquired as a sub contractor / owned establishments will not be considered.
  • Firm should submit a copy of work order and completion certificate in support of above qualification criteria from the authorized signatory duly notarized. The completion certificate must indicate work order number, date, scope of work, contract value, contract period and executed value.

For running contract, if the actual executed Value/Quantity/ experience (for partially executed contract) is equal to or more than the value/quantity/experience indicated above one day prior to the due date of bid submission, the same shall also be considered for meeting the single order value/quantity/experience criteria, for which a certificate from the client showing executed Value/Quantity/experience prior to the due date of bid submission shall be submitted by the bidder/audit firm along with copy of work order/ agreement. The copies of work order / agreement and execution certificate from client should be duly certified/ attested by notary public with legible stamp.

DOCUMENTS REQUIRED TO REVIEW QUALIFICATION CRITERIA

Bidder shall meet the qualification criteria as stated Bid Evaluation Criteria. Bidder shall furnish following documents along with the bid, to justify meeting the stipulated qualification criteria.

  • Reference list of previous work Order/Contracts.
  • Work order & Work Completion Certificate / Performance report from Client.
  • Copies of Work Order detailing scope of work along with Completion certificate issued by client.
  • Owner reserves the right to get direct feedback from user on satisfactory performance.

If bidder fails to provide the requisite documents, CUGL reserves the right to reject the Bid

Last date of receipt of bids April 26, 2017 03.00 PM

For details click below

Notification

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