Hindustan Copper Ltd (CIN: L27201WB1967GOI028825) Regd. office: ‘Tamra Bhavan’, 1, Ashutosh Chowdhury Avenue, Kolkata – 700 019 Phone: (033) 2283-2226, Fax:(033) 2283-2676, Email: [email protected], Website: www.hindustancopper.com Notice Inviting Tender (NIT) for appointment of Internal Auditor of Hindustan Copper Ltd for Financial Year 201718 and 2018-19 Tender enquiry No. HCL /CO /IA /2017-18 /01 dated: 05.07.2017 Due date of submission of Tender: 19.07.2017 up to 3.00 p.m. Due date of opening of Part-I bid: 19.07.2017 at 3.30 p.m. Offers are invited through EPS (Enterprise Procurement System), on-line bidding process, from experienced Chartered Accountant Firms, meeting pre-qualification criteria as stipulated hereunder in the tender document, for the following work: Name of Work: Appointment of Internal Auditor of Hindustan Copper Ltd for Financial Year 2017-18 and 2018-19 Period of contract: 24 months from the date of issue of LoI/Work Order The complete tender document is available on company’s website at http://www.hindustancopper.com for the purpose of downloading. The interested agencies fulfilling our requirement may download the tender document directly for participating in the tender process. It may please be noted that all the changes in the NIT including the extension of the date of opening etc. if any, would be posted only on the website of the Company and hence, the prospective bidders should keep in touch with the Company’s website for updates before submitting their bids. Last date of tender online submission:

Up to 3:00 P.M. on 19/07/2017

Techno-Commercial (Part-I) bid opening: At 3:30 P.M. on 19/07/2017

Executive Director (Materials & Contracts)

Tender No.HCL /CO /IA /2017-18 /01

dated:05/07/2017

M/s--------------------------------Sub: Appointment of Internal Auditor of Hindustan Copper Ltd for Financial Year 2017-18 and 2018-19 Dear Sir, Offers are invited through EPS (Enterprise Procurement System), on-line bidding process, from experienced Chartered Accountant Firms, meeting pre-qualification criteria as stipulated hereunder in the tender document, for Appointment of Internal Auditor of Hindustan Copper Ltd for Financial Year 2017-18 and 2018-19. 1. Pre Qualification Criteria Bidders meeting the following Pre Qualification Criteria shall be eligible for opening of price bid for appointment of Internal Auditor of HCL for FY 2017-18 and 2018-19: i. Chartered Accountant Firm with minimum ten years in existence as on 1.4.2017 ii. Chartered Accountant Firm with at least ten partners iii. Chartered Accountant Firm with branches in at least two cities out of Kolkata, Mumbai and Delhi and compulsorily have a branch / head office in Kolkata. iv. Empanelment with C&AG. v. Experience of minimum three year as internal auditor of PSU with mining / manufacturing activities on PAN India basis. vi. Experience of minimum two years as internal auditor of a company listed at BSE/ NSE having standalone turnover exceeding Rs. 500 crore. vii. Chartered Accountant Firm having average turnover of at least Rs. 50 Lacs during last 3 years period ending 31.3.2016. All PQCs must be supported with documentary evidences which is to be submitted offline to above office address on or before due date of opening of Part-I bid. Any price terms mentioned in the technical bid shall be summarily rejected by HCL, without assigning any reason. 02. Rate is to be attached in a pdf format as per Annex-VII in EPS through our Service Provider, M/s MJunction Services Ltd. The Price bids of only techno commercially qualified bidders shall be opened/evaluated through EPS on the due date which shall be notified to them in advance. The authorized representatives of the bidders may wish to remain present during opening of the part-I and part-II bids through EPS. 03.

Please ensure that your offer is submitted on line on or before the due date i.e. 19/07/2016 up to 3.00 PM.

04.

The Part-I Techno-Commercial bid shall be opened on line on 19/07/2017 at 3.30 PM in presence of the bidders who may wish to be present at the time of opening.

05.

HCL may reject any or all tenders/offers and award the order in part or in full. HCL may also extend the due date of tender or cancel the tender. Important: Before final submission of tender on-line, bidders should carry out mock submission of tender on-line and a certificate should be submitted by the bidder at least 4 working days before last date of submission of offer that they have successfully mock tested online submission of offer and they have no problem in submission of offer on line.

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Note: All vendors are requested to contact M/s.Mjunction Services Limited, Kolkata at the following address for registration and obtaining user id and password to access and quote for the tender enquiry on line. The offers are to be submitted on line at URL https://eps.buyjunction.in of M/s.Mjunction Services Limited, Kolkata, who are our service provider for Enterprise Procurement System. Registration Procedure: 1. Please visit the Link https://eps.buyjunction.in. 2. Click on Register button. 3. Put your Company PAN No. 4. Click on INTERESTED Button on behalf of respective organization. 5. Fill up the Form, click on the next button fill your preferred procurement category and click on submit button. 6. Intimate us by mail at [email protected] or phone about the online registration to activate generate your password. You may then login to EPS with the above mentioned EPS User ID & Password. For any assistance, please feel free to get in touch with us at our Toll Free EPS Customer Helpline: 1800419-20001 (10 AM to 6 PM) or 033-66011715 (9 AM to 5:30 PM). 7. MJ New Office Address:

Godrej Waterside, Tower-I, 3rd floor, Plot No. 5, Block-DP, Sector-V, Salt Lake City, Kolkata – 700091

NB: You do not require registering again for different tender enquiries of HCL. Registration on the website is free of cost. For Urgent Escalation on EPS please contact: Mr. Indranil Banerjee mjunction services ltd (A SAIL-TATA Steel joint venture) Email: [email protected], Mobile No. 08584008224. Thanking you,

Yours faithfully, (D K Mahajan) EXECUTIVE DIRECTOR (Materials & Contracts)

1.

Objective and scope of internal audit

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The objective of internal audit is to assist the Audit Committee / Management in the effective discharge of their responsibilities by furnishing them with analysis, appraisals, recommendations and pertinent comments concerning the activities reviewed. Besides conducting audit with adherence to regulatory requirements, Internal Auditor has to evaluate the adequacy of risk assurance and internal control system in the Company. While focusing on risk assurance and internal control system, the internal auditor shall offer suggestions for improvements in areas covered in the scope of work. Attainment of the objectives of internal audit involves inter- alia following activities: i. ii. iii. iv. v. 2.

To conduct internal audit in two phases viz. Phase I from April to September and Phase II from October to March. To conduct a proper risk analysis of the company's transactions during the period of audit and to identify areas which require attention of the management. To review adequacy and application of financial and other operating controls and make suggestions if any for improvements. To ascertain compliance with established policies and procedures of the Company. The detailed scope of work is indicated in Annexure I, II & III. Extent of coverage of audit is given in Annexure- IV. Audit Team

The audit team shall consist of minimum one Chartered Accountant having at least five years post qualification experience who may be a Partner and two Audit Assistants (out of which one must be Inter passed Chartered Accountant). The audit team shall always be supervised/ coordinated by a Partner of the firm. The CV of audit team members duly certified by one of the partner of the firm in advance of each phase of audit to be submitted to the Internal Audit department, CO. Minimum two Audit Team shall be deputed simultaneously for completion of job within due date. The travel plan of audit team members shall be decided in consultation with the Internal Audit department, CO and to be freezed at least 60 days in advance of each phase of audit. The audit team shall record their attendance in the prescribed format of the Company at respective units/ offices. Minimum number of man days needed to be devoted by the audit team in each phase location wise (excluding journey period) is as under: Sl. No 1 2 3 4 5 6 7 8 9

unit / office

Minimum Man days requirement in each Phase excluding journey period Partner / Qualified Audit Assistant Chartered Accountant Khetri Copper Complex, Rajasthan (KCC) 5 10 Indian Copper Complex, Jharkhand (ICC) 5 10 Malanjkhand Copper Project, MP (MCP) 5 10 Taloja Copper Project, Maharashtra (TCP) 5 10 Gujarat Copper Project, Gujarat (GCP) 5 10 Corporate Office, Kolkata (CO) & Regional Sales Office East, 3 6 Kolkata (RSOE) Regional Sales Office North, Delhi (RSON) 1 2 Regional Sales Office West, Mumbai (RSOW) 1 2 Regional Sales Office South, Bangalore (RSOS) 1 2 Total Man days per Phase 31 62

The Management keeps the right to interchange number of man days among units/ offices as per requirement. 2. Reporting requirements

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On completion of audit of the respective unit/ office of each phase, the following steps should be followed for finalization of the report: i.

The preliminary audit observations shall first be discussed during the audit with the Finance in charge along with unit/ office head so that timely corrective action on the issues/ observations may be taken. Based on the discussion/ outcome of action taken, the left over preliminary audit observations of the respective unit/ office shall be forwarded to the Internal Audit department, CO with a copy to the respective unit / office head immediately on completion of audit of the respective unit/ office.

ii.

The preliminary audit observations thus arrived of the respective unit/ office shall be further discussed with the head of Internal Audit at CO and based on necessary corrective actions taken thereon, a Comprehensive Audit Report of HCL covering all the units/ offices within the scope shall be compiled / prepared in triplicate and submitted to the head of Internal Audit, CO with a soft copy in PDF format. The Composite Internal Audit Report thus compiled shall be structured as outlined hereunder: Part-I: Important observations / findings: This part shall contain comments of Internal Auditor on all such significant irregularities and occurrences which he wants to bring to the notice of management, along with their financial implications, if any. The observations should be arranged in self-contained paras, preferably with suitable titles. Part-II: Compliance Report: This part shall consist of the following: a) Compliance report of the audit observations pointed out in the internal audit report of preceding period along with the corrective action taken. b) Deviations / non-compliances from the policies, system and procedures prescribed by HCL and applicable statutes. Part –III: Report on Annexure I, II and III of the NIT: a) In this part, the Auditor shall furnish its detailed comments/ observations whether Company’s system/ procedure/ propriety has been adhered to in the areas covered in Annexure I and II of NIT in the following format by way of exception reporting i.e. wherever deficiencies, non-compliance, etc. are observed / noticed: Audit Observations Management’s Reply Further observations of the auditors, if any _________________________________________________________________________________ 1 2 3

iii.

Certificate on compliance of applicable laws by the Company as per Annexure-III of NIT.

iv.

In addition to Comprehensive Audit Report, an Executive Summary thereof shall be simultaneously submitted to head of Internal Audit, CO indicating there in the major points vis-à-vis suggestions, which need the attention of the top management.

3. Audit Schedule Phase wise timeline for submission of internal audit reports is given below:

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Phase I (April- September) Phase II (October – March)

– –

Latest by 7th November Latest by 7th May

4. Payment i.

Payment of Audit Fees and out of pocket expenses shall be released phase wise after submission of report for that phase and conclusion of Audit Committee meetings for accounts ending 30th September and 31st March, of respective FY. The Audit Fees will include all charges towards supervision by Partner/ Consultant, their discussion with officers at units / offices and also for writing of reports, typing, charges for scanning of reports, etc.

ii.

For outstation journey, AC I / Economy Air for Partners, AC II Tier for qualified CA who are not Partners and AC III Tier for others are reimbursable on production of documentary evidence, copy of tickets, boarding pass in original, etc. Our unit / office may provide local transportation (including pick up and drop from Airport / railway station) for visiting team. Railway / Air Tickets have to be arranged by Internal Auditor only. Any other expenditure, if any, like travelling expenses by taxi and food on journey must be accompanied by original bills. For movement of audit team in locations where the Audit firm is having its offices, no local travelling expenses are reimbursable. For movement of audit team to unit/ office of HCL, it is expected that audit team from nearest branch /office of the Audit firm shall be deputed.

iii.

The Audit team will be provided with free boarding and lodging at Company Guest House at all locations where such facility is available. In case hotel accommodation is essential due to non-availability of facilities at HCL, the same will be allowed at actual in reasonably good hotels/ Guest House for boarding and lodging in same line with Deputy General Manager level for Partners and with Senior Manager level for others.

iv.

All Bills in original shall be submitted to the Internal Audit department, CO only along with supporting documents and stay certificate issued by the unit/ offices of HCL.

5. Contract Period Appointment of audit firm will be initially for two years i.e. for FY 2017-18 and FY 2018-19 and extendable by another one year upon satisfactory performance of the firm at same terms and conditions at the sole discretion of the Company. The performance of audit firm, if not found satisfactory, HCL may terminate the appointment by giving one month’s notice without assigning any reason. 6. Offer Validity Bids submitted shall remain valid for a period of 120 days from the date of opening of Part-I bid.

7. Rate

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Rates should be attached in a pdf format strictly in accordance with scope of work given in clause 1 .0 above, which will remain firm and fixed during the currency of the contract ((The lump sum rate per year is to be quoted for carrying out Internal Audit for 2 years i.e. FY 2017-18 and 2018-19, exclusive of any tax). Any applicable GST shall be paid extra as per laws. Note: Bidders are requested to attach the price bid (Annexure-VII) in pdf format duly signed and stamped by the authorized signatory. The process to attach the pdf format of price bid in Mjunction site will be as follows;

Save and go to items>>> Put price in the HTML page>>> Click on save at the button of the page>> A new tab will appear as "Commercial" just below the items >>> Click on the tab in the first item >>> do not put any value anywhere in this page>>> click on "Add Row">>> attach the pdf file >>> post the attachment click on "Go To Header" 8.

Security Deposit: The successful b i d d e r will submit Security Deposit equivalent to 5% (Five P ercent) of the annual value of the contract in the form of Demand Draft or Bank Guarantee from any S c h e d u l e Commercial Bank s t r i c t l y as per attached format (Annexure-VI) at HCL/CO. Validity of the BG should be up to 15 months from the date of award of the contract. The s u c c e s s f u l b i d d e r should furnish above Security Deposit within 1 0 days from the date of award of LoI/Work Order, whichever is earlier. In case of non-submission of Security Deposit, payment of bills will not be released. The Security Deposit is liable to forfeiture towards any penalty imposed by Hindustan Copper Limited or any loss that may be sustained by HCL as a result of omission/negligence on the part of the successful bidder towards the performance of the contract. The Security Deposit will however, be released within three months after satisfactory execution of the contract, after deducting any dues on account of the above reasons.

9.

Deduction of Taxes: As applicable as per law.

10. Arbitration:

All question(s) dispute(s) or difference(s) of any kind whatsoever arising out of, or relating to the contract shall be referred by the parties to this contract for decision within 30 days from the occurrence of difference or the dispute, to a Sole Arbitrator, nominated by the Chairman-cum-Managing Director of Hindustan Copper Ltd. (HCL). The venue of the arbitration shall be Kolkata, West Bengal only. The award of the arbitrator shall be final and binding on the parties. Subject to the above, the provisions of Arbitration and Conciliation Act 2015 and of all the rules there under and the statutory modifications thereof shall govern such arbitration proceedings and shall be deemed to apply and be incorporated in this contract. Any dispute, which arises at any point of time out of arbitration, shall have the jurisdiction of the Court of Kolkata, West Bengal.

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11. Force Majeure:

If at any time during the continuance of this contract, the performance in whole or in part by either party of any obligation under this contract shall be prevented or delayed by reason of war, act of hostility of public enemy, civil disruption or sabotage, fires, floods, explosions, epidemics, quarantine restrictions, strikes, lock-outs or acts of God (here-in-after referred to as events), provided notice of the happening of any such eventuality is given by the either party to the other within 21 days from the date of occurrence thereof, neither party shall by reasons of such event be entitled to terminate this contract nor shall either party have any claim for damages against the other in respect of such non – performance or delay in performance/execution under the contract. Provided also that such performance/execution under the contract should commence as soon as practicable, after such event has come to an end or ceased to exist, and the decision of HCL as to whether the performance has been so resumed or not shall be final and conclusive. Provided further that if the performance in whole or in part or any execution under this contract is prevented or delayed by reasons of any such event for a period exceeding 60 days, either party may opt to terminate the contract. If the contract is terminated under this clause, HCL shall have liberty to take over from the contractor at a reasonable price , all unused, undamaged and acceptable materials, machinery, equipments, etc. at the site , being used for the performance of the contract and in the possession of the contractor at the time of such termination of such portion thereof as HCL may deem it fit, except such materials, equipments, etc that the contractor may with the concurrence of HCL elect to retain. It is also understood in addition that this force Majeure clause will cover parties’ inability to perform on account of change in law or imposition of rules or restrictions by the Government. 12. Jurisdiction of Court:

Only the Court of Kolkata, West Bengal having original jurisdiction to entertain suit shall have jurisdiction to receive and decide any application/applications under the Arbitration and Conciliation Act 1996 and no other court shall have any jurisdiction. 13. Termination: The audit firm will be debarred from getting internal audit assignments of HCL in future in the following cases: a) if the firm obtains the appointment on the basis of false information/ statement made in the bid document. b) the firm is found to have sub-contracted the work. c) if the firm does not take up audit in terms of the appointment. d) if the firm does not submit the Audit Report, complete in all respect, in terms of the appointment. 14. Special Instructions to Bidders i. L-1 bidder may be required to give presentation to the management about their expertise and mode of carrying out internal audit assignments on Pan India basis. ii. The selected audit firm shall nominate a Nodal Officer based in Kolkata who must be one of the partners/ qualified CA of the appointed firm, immediately on award of the assignment for timely and smooth interaction. Partner of the audit firm has to attend all the Audit Committee meetings and may be required to give power point presentation on his report. iii. All working papers created in the course of audit will be the property of the Company and are to be handed over to the Internal Audit department, CO at the end of tenure.

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iv. Details / data relating to the transactions / activities of the Company obtained during the course of audit by the appointed audit firm shall be kept in absolute confidence and not to be disclosed / shared. v. Copy of the tender document duly signed and stamped as a token of your acceptance of all the Terms & Conditions to be submitted off-line. vi. Offer received by off-line mode shall not be considered. vii. Mere submission of bid does not necessarily qualify for consideration of bid. HCL may accept or reject any bid without assigning any reason whatsoever. Decision of Company in this connection shall be final. viii. The selected audit firm is required to submit bank mandate in the prescribed format along with a cancelled cheque. ix. Successful bidder (Firm) would be required to sign Non- Disclosure Agreement (NDA)/ Confidentiality Clause with Hindustan Copper Limited. x. Any solicitation for allotment of work if detected shall be the cause of disqualification of the bidder. Thanking you, Yours faithfully,

(D. K. Mahajan) Executive Director (Material & Contracts) Encl: Annex-I (Audit Plan for Projects) Annex-II (Audit plan for the marketing offices) Annex-III (Certificate of Compliance) Annex-IV (Extent of Coverage of Audit) Annex-V (Format of Application) Annex-VI (SD Format) Annex-VII (Price Bid format)

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Annexure I Audit plan for the projects [KCC / ICC / MCP / TCP/ GCP / CO / RSOs/ Others] 1. Purchase 1) To check whether quotations are received from various suppliers. 2) To check whether Comparative Statements are prepared for each Purchase Order. 3) Match the Purchase Orders with the Purchase Requisitions in respect of quantities. 4) The circumstances / necessity for making Emergency Purchases (if any) and ensure that this follows the guideline of GFR rules. 5) Check the system of emergency purchases and check a few emergency purchases by reference to stocks available and actual issues/consumption. 6) Check whether the approved supplier’s list is periodically reviewed/ updated. 7) To confirm that whether the norms of 60 days from the date of indent to the date of placement of order are followed or not. 8) Review of Contracts (Mining development / Other Contracts). 9) Verification of Purchase Proposal. 10) Mode (web hoisted / general) of procuring material. 11) Check that the tenders are so invited as to ensure adequate competition and that the prescribed procedures for single tender/limited tender have been followed. 12) List of materials procured but not consumed within 6 months of the following financial year. 13) To verify the procedure of disposal of non-moving / obsolete / scrap materials. 14) Check that for capital purchases, powers have been adequately delegated and such delegations have been properly applied. 15) Report on Periodic Monitoring of inventories of non-moving stores & spares carried out by senior level management to be submitted along with internal audit report on a regular basis. 16) Items purchased on emergency basis but not consumed to be submitted in the Internal Audit Report on a regular basis. 17) Receipt of materials is recorded through Material Receipt Note (MRN) against all Purchase Orders. 18) To check whether bills are passed after adequate inspection. 19) Quantity and Rates match with the PO.

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20) Check of bills are properly accounted in the books. 21) Whether the Purchase Requisitions are made by the authorized persons to be checked and deviations if any to be reported. 2 Works contracts 1) Ensure that the estimates are administratively approved considering essentiality, reasonableness and the same are covered by the provision made in the budget. 2) Examine whether estimates have been concurred by Finance. Also examine the difference between departmental estimates and the quotations received. 3) Check that the prescribed procedure for initiation of tenders, opening the tenders, preparation and checking up of comparative statements has been followed, whether the comparative statement has been correctly drawn taking into account all relevant items. 4) Ascertain whether the work is allotted to the lowest tenderer in compliance of CVC guidelines. 5) Check whether the tender documents contain complete description of work to be done and also detailed specification etc. without any ambiguity. 6) Scrutinise from the final contract and see that it covers all the essential conditions required for the execution of work. 7) Verify the quantum of work done, either from the measurement book or from the other certificates attached to the bill. 8) Check the accuracy of measurement book. Verify the rate from the works contract. 3. Stores 1) To check: The process under the ERP system, Flow of stores documents and control over these, Stores Receipt Registers in respect of Stores Receipt Vouchers (SRV) so as to test the effectiveness of the system, Examine the system of preparation of SRVs and reconcile with Gate Entry Register. 2) Stores Ledger / physical stock to be reconciled. 3) Verification of Reordering Level (R.O.L) and Lead Time for procuring the materials. 4) Non-Moving / Obsolete materials to be monitored. Audit should confirm that no further accumulations of obsolete / non-moving materials have taken place. Action taken to dispose off / re-use the Non-Moving / Obsolete materials. 5) Inventory at Shop Level is to be identified. 6) Time-gap is to be noted for materials received but GRN/RV not prepared and also in case of material received, GRN/RV made with abnormal time-gap which is more than 15 days. 7) List of materials inspected after 15 days from receipt and the reason for the delay. 8) Compliance of IndAS-2 for valuation of inventories. [Cost of Purchase + Cost of conversion + Other Costs], Inventories to be valued at the lower of cost and the Net Realisable Value.

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9) Reliability and effectiveness of ERP system on stores & spares management to be reviewed and suggestion for improvement, if required. 4. Finance 1) Comments on internal controls and suggestion, if any. 2) Check that all capitalizations have been done on regular basis as per the company’s capitalization policy. 3) Ascertain that there has been no undue delay in putting to use the assets during the year or earlier years. 4) Ensure that disposal, condemnation or scrapping of assets are done by competent authority on the basis of report of survey committee and check all journal entries for disposal of assets with relevant papers and documents, check that all additions and deletions have been made in the Fixed Assets Register to ascertain correctness. 5) That all major proposals for capital expenditure were initiated on the basis of cost benefit studies and duly approved by competent authority. 6) Check the rate of depreciation of various category of fixed asset as per Companies Act 2013 has been correctly considered. 7) Ensure that depreciation for the purpose of annual accounts as well as of Income Tax has been correctly calculated. 8) Cenvat, Service tax or applicable taxes is to be ensured by reconciliation with books. 9) To verify whether the supply Bills are paid (inclusive of e-payment) in accordance to the terms & conditions for the order placed and goods received. 10) Verification of BRS (Bank Reconciliation Statement) at regular interval and the reason to be identified for the unadjusted transactions. 11) Cash verification. 12) Monitoring Sundry Creditors / Debtors and advances paid to suppliers and advances received from Customers with ageing and documentary evidences in support with the recording for that particular half. 13) Checking purchase bills, works contracts, Employee’s remuneration and other payments and Tax returns. 14) Internal Audit should also check up and Report whether there was any delay in payment of bills by the Company & that Bank Reconciliation should be complete before submission of the report. 15) To check whether all expenses made on account of CSR activities have been accounted for in ERP to report differences if any & reasons thereof. 16) To check whether the Cost Records of the Company are properly maintained by individual production units. 5. Creditors review Scrutinize debit balances in creditor’s ledger, to determine the following:

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a. Excess payment. b. Bill not booked. c. Advance made but material not received. d. Whether new advance given to the same party from which earlier supplies are pending since a long time. e. (i) KYC and Balance confirmation to be checked. (ii) Debit Balance in creditors ledger to be scrutinized and checked. 6. Production / Maintenanace 1) Capacity Utilisation: To ensure the optimum utilisation of the machine involved with special emphasis to Gross Input, Normal Loss, Normal Output, Actual Output, Abnormal Loss / Gain, Normal Loss Realisation. 2) Metal Balancing: To confirm the ratio of the metal input and output are matching with the norms specified by the management. 3) To verify that the Specific Consumption Norms in mining, smelting, refining etc. are complying with the specified norms set by the company. 4) To substantiate the consumption of power involved in production and to compare the consumption with the standard fixed by the management. 5) Whether the system of recording of production and inter process transfer has been checked on regular basis? 6) Bottlenecks / hindrances for under-utilisation of production resources and action taken to avoid the same in future. 7) Non-standard production (if any), cost involved, reasons for such production, cost incurred for producing accepted product, action taken to avoid reoccurrence in future. 8) Monitoring of the statutory compliances made by the contractors supplying the contract labours. 9) Verification of material/machines issued on returnable basis and material issued to outside contractors for Job work. 10) Verifications of calculations made for paying Incentive Bonus to the employees of the units. 11) Checking of revert generation (% of loss, production report). 12) Check the recovery percentage with norms and reasons thereof. 13) Verification for overhauling / maintenance of machines. 14) Utilisation of major equipments 15) Check idle assets and condemned equipment and action taken for Utilisation/disposal. 16) Check the system of preventive maintenance and adherence. 7. Sub contracting 1) Matching bills to Work Order and receipt of material.

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2) Check whether Excise / CENVAT implications. 3) Quotations are invited for new jobs / new contracts. 4) Material Accounting Report / PO wise Material Accounting Report is checked with issue and receipt details for reasonableness. 5) Perform material reconciliation to ensure whether correct credit has been given for expensive material for e.g. Stainless Steel. 6) Perform material reconciliation to ensure that input / output ratio’s exist and are reasonable. 8. Inventory – scrap 1) Procedure for selection of party e.g. alternative quotations, tenders etc. 2) Whether advance earnest money deposit is given before clearance of material. 3) Whether scrap cleared is correct type & weighed before clearance. 4) Whether scrap is sold by the subcontractor & proceeds / debit notes received by the company. 5) Whether scrap retained by subcontractor is forwarded to company. 6) Whether excise duty has been correctly paid. 7) Scrap invoices raised are in accordance with contract rates. 8) Whether TCS has been collected and deposited (Tax collected at source). 9. Price escalation 1) Objective:- To ensure that price escalations are paid in all eligible purchased components and are paid correctly. 2) Read all contract provisions in general, and in particular for price escalation, to determine the plan of action. 3) Check ceiling on price escalation claimable, in respect of various project price components and total payments made during the review period. 4) Examine the formula provided in the contract, has been applied correctly. 5) Check whether the base and current indices for various types of raw material have been derived from the sources specified in contract and used in the formula correctly. 6) Examine various dates i.e. scheduled date and execution date of work done, used are correct. 7) Check currency conversion factors, in case project price is expressed in foreign currency. 8) Check arithmetical accuracy of calculation of value billed, adjusted price payable to suppliers and net adjustment amount (escalation amount).

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9) Check whether escalation payments are made in respect of billing done, up to the date of claim(s). 10. Cash management 1) Identify all the Bank CC Accounts, Current accounts of the company. 2) Analyse the Daily Bank Balances at the end of the day to find out the monthly unutilized balance. 3) Prepare a frequency Distribution Table of daily balances. 4) Check whether the balances at banks are lying idle over a period of time. 5) Find out if there are any loans taken by the company. 6) Analyze the need for taking loans, if surplus bank balances are in existence. 7) Check other investments of the company e.g. Fixed deposits, Term Deposits and analyze the cost benefit of interest paid on loans vis-a-vis interest received on FDs. 8) Advances lying unutilised to be reviewed and reported. 11. Payroll 1) Ensure that gross pay paid is in accordance with contract of employment. 2) Payments are made on the basis of attendance and all leaves are accounted for. 3) Payroll calculations are correct. 4) Statutory deductions and other deductions are properly made and paid over to the concerned authorities. 5) Payments to contractors are verified in respect of actual attendance in company premises. 12. Labour contractors 1) Read all the provisions of the contract agreement in respect of maximum number of labourers required, payment terms etc. 2) Check attendance record maintained by the contractor with that of time office. 3) Check whether requisition slips for casual labour (i.e. extra labour) are authorised. 4) Surprise check the physical attendance of labourers in the company with that of attendance record at time office. 5) Check whether wages / overtime wages / other allowances are paid as per agreement. 6) Check whether any other deductions like canteen, leave etc. are made as per the provisions of the contract. 7) Check whether statutory deductions like PF, ESI etc are properly made and paid by the contractor & the company.

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8) Check whether other reimbursements like service tax / PF / ESI are paid after producing sufficient documentary evidence. 9) Check whether billing for regular and casual labourers are done properly and as per the agreement. 13. Review of MIS & internal controls 1) Study the manuals of the company and reporting of deviations. 2) Check if these controls are followed by all departments. 3) If not then identify the reasons. 4) Identify loopholes and risks, if any, in the system. 5) Recommend ways to eliminate the loopholes and mitigate the risks. 6) Draw Flow Charts of the Business process flow. 7) Draw a Flow Chart of the inter department document flow. 8) Study the flow and recommend improvements. 9) Specifically look for delays in the document flow in any particular department and find ways to pace up the flow. 10) Identify bottlenecks in the business process flow and categorize in the order of importance and recommend ways to eliminate them to result in optimum utilization of resources and increased production capacity. 14. Personnel & Administration 1) Recovery from Outside Agencies (Electricity; Water, Rent & Other recoveries). 2) Proceedings of Legal Cases. 3) Whether proper record of medicines are kept in a systematically way in Hospital. 4) Whether medicines are purchased through proper tender. 5) Audits of Guest House. 6) Check the internal control system for payment of LTC for non-executives, claims, leave encashment, festival advance etc. 15. Others 1) Whether a register has been maintained for proper control and follow-up of Annual Maintenance Contracts (AMC). 2) Any other issues which management deem fit to be examined during the tenure of audit. 3) Follow up of earlier Audit reports.

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Annexure II Audit plan for the marketing offices 1. Marketing procedures 1. Compliance of head office circulars issued from time-to-time with regard to (100% compliance to be verified): • Invoice register • Billing & utilisation • Correctness about the applicable rates & value 2. Discounts: debit / credit notes (100% verification) 3. LME / CSP register: to verify the correctness of the applicable rates and value quantity booked whether as per the empowered committee decisions 4. L.C. Register: to verify • Challan date vis-à-vis date of submission, • Submission date vis-à-vis date of realisation 5. Reviewing customers ledger and anomaly observed (if any) to be highlighted. 6. Cash / bank / journal vouchers. 7. Physical verification of cash / stock. 8. Advances to employees, suppliers / contractors. 9. Compliance of statutory matters (TDS-income tax, vat, service tax). 10. Report on periodic monitoring of debit and credit balance of debtors through the ERP system carried out by senior management level to be submitted along with internal audit report on a regular basis. 2. Sales 1) Scrutiny of contract with the client and ensure that all supplies are properly billed. 2) Provision of Guarantees / advances. 3) Collection / Receivables / Retention. 4) Taxes & Duties reimbursement from the client. 5) Taxes & Duties in case of Direct Dispatches. 6) All Materials dispatched is billed. 7) Sales Returns. 8) Compare budgeted profit with actual profit.

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3. Debtors review 1) Check age wise listing of the debtors. 2) Filter out debtors aging more than the credit period. 3) Investigate into the reasons of delay in payments. 4) Ensure the adequacy of the debt recovery measures and recommend way to eliminate the inefficiency. 5) Reconcile the debtors as per the branch / site and as per the Head Office. 6) Accentuate on frequent visits by HO officials / auditors to site / branch in order to sort out the differences in the amount of debtors and keep a track on the debt recovery controls. 7) Confirmation of Balances.

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Annexure III “To counter sign the Certificate of compliance of applicable laws to the Company given pursuant to SEBI Listing Regulation 2015 by the Unit Heads of Khetri Copper Complex(KCC), Indian Copper Complex(ICC), Malanjkhand Copper Project(MCP), Taloja Copper Project(TCP), Gujarat Copper Project (GCP), any other Projects / Offices of Hindustan Copper Limited and Head of Departments of Finance, Human Resource, Administration, Legal, Mining, Operations, Company Affairs, Materials & Contracts, Marketing, Systems and Corporate Communication at the corporate office of the Company for each audit period, based on which a consolidated Certificate of compliance of applicable laws under the signature of Chairman-cum- Managing Director will be placed to the Board of Directors.”

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Annexure IV Extent of coverage of Audit Sl. No. 1.

Particulars

In each phase

Purchase (pre award and execution) (a) PO with value up to RS.100 lakhs (b) PO with value above RS.100 lakhs

10% 100%

Works contracts (pre award and execution) (a) Contracts with value up to Rs.100 lakhs (b) Contracts with value above RS.100 lakhs

10% 100%

Works contract / PO awarded on single tender and nomination basis (pre award and execution) (a) Contracts with value up to Rs.10 lakhs (b) Contracts with value above RS.10 lakhs

10% 100%

4.

Verification of metal balancing report on monthly basis

100%

5.

Checking of Security Deposit as per contract / PO terms

50%

6.

Stores: documentation and record keeping, random physical stock verification, reporting of A-50% non-moving materials and disposal of obsolete materials, scrape management as per ABC B-20% analysis C-10%

7.

Payment released from finance against PO/Contracts

10%

8. 9.

20% 100%

10. 11.

Attendance, payment to Contract labours including statutory deductions All statutory payments in time viz., VAT,CST, GST, Service Tax, Excise duty, other applicable taxes and levies Verification of Bank Reconciliation Statements of all Banks for audit period Accounts- vouching of all vouchers (cash/bank/ JVs etc.)

12.

Investment of surplus fund as per Company policy

100%

13.

Compliance of Revenue budget and Capital budget

100%

14.

Checking of Imprest accounts: (a) Accounts up to Rs.5,000/- each (b) Accounts more than Rs.5,000/- and up to Rs.25,000/- each (c) Accounts more than Rs.25,000/- each

10% 50% 100%

15.

HR Establishment covering Leave records, LTC records, and payment of all types of advances to employees, pay fixation, Training and other areas

20%

16.

Administration department covering maintenance of quarters, lease rentals of quarters/shops, vehicles movement (company owned & hired vehicle including heavy

20%

2.

3.

100% 10%

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vehicles, ambulance etc.), Guest house, hospitals, purchase of medicines by tendering and its record keeping and miscellaneous office expenses 17.

Verification of CSR expenditure (i) For projects costing up to Rs. 10 lakh (ii) For projects costing above Rs. 10 lakh

18.

Marketing: Compliance to office orders, manuals, rates, discounts, credit/debit notes, LC register verification

19.

Debtors Review: Age-wise analysis, reason for delay in payment, adequacy of debt recovery measures (i) Debtors balance up to Rs. 1 Lakh (ii) Debtors balance more than Rs.1 Lakh and up to Rs. 5 Lakh (iii) Debtors balance above Rs. 5 Lakh

20. 21.

1. 2.

Verification of : (a) Reconciliation of Debtors balance and Creditors balance (b) Sales ( product-wise) on monthly basis Creditors and Advance Review: Age wise analysis, plan for payment (i) Creditors balance up to Rs. 5 Lakh (ii) Creditors balance above Rs. 5 Lakh

20% 100% 100%

20% 50% 100% 100%

20% 50%

The above list of extent of coverage of audit is not exhaustive. Other areas of the scope of work detailed in Annexure I, II & III are also to be covered in the internal audit report. Management keeps the right to modify the extent of coverage of audit based on risk analysis of Company’s transactions during the period of audit.

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Annexure - V

Format of application 1. 2. 3. 4. 5.

Name of the Firm: Registration No. of the Firm issued by Institute of Chartered Accountants of India: Date of Registration of the Firm: Date of empanelment with C&AG: Details of Head Office & Branch Office(s):

Head Office: Address

Date of Establishment

Contact No(s)/Fax

E-mail

Branch Office 1 Address

Date of Establishment

Contact No(s)/Fax

E-mail

Branch Office 2 Address

Date of Establishment

Contact No(s)/Fax

E-mail

Branch Office 3 Address

Date of Establishment

Contact No(s)/Fax

E-mail

(Insert further Branch Office(s), if any) 6. Details of Partners in the Firm: Sl. No. Name of the Associate/ Partner Fellow membership No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Qualifications

Email id

Mobile No.

Date of joining the firm as Partner

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7. Details of Qualified Chartered Accountants: Sl. No. Name of Qualified Membership No. Qualifications Chartered Accountants

Email id

Mobile No.

Date of joining the firm

1. 2. 3. 4. 8. Details of Audit Assistants: Sl. No. Name of Audit Assistant 1. 2. 3. 4.

Qualifications

Email id

Mobile No.

Date of joining the firm

9. Details of experience in Central Public Sector Undertakings with mining / manufacturing activities: Sl. No. Name of the Company/Unit Year of Audit Type of Audit - whether Statutory / Internal Audit / Physical Verifier 1. 2. 3. 4. 10. Details of experience in company listed at BSE/ NSE having standalone turnover exceeding Rs. 500 crore: Sl. No. Name of the Company/Unit Year of Audit Type of Audit - whether Statutory / Internal Audit / Physical Verifier 1. 2. 3. 4. 11. Turnover of during last 3 years period ending 31.3.2016 as per audited accounts: Sl. No. Financial Year Turnover (Rs. in Lakh) 1. 2013-14 2. 2014-15 3. 2015-16 12. Income Tax PAN No. of the Firm : 13. Service Tax Registration No.: 14. GST Registration No.:

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15. Bank details of EFT: 1. Bank Name, Address and Telephone No.

2.

Branch Name. Address & Code

3.

Bank Account Number with style of account, Savings / Current

4.

IFSC Code No. of the Bank

5.

Attached a cancelled cheque of the said Bank

Yes / No.

16. We confirm that we have not taken any deviation from the specified terms & conditions, of the NIT documents. A copy of complete NIT documents duly signed and sealed on all pages as a token of acceptance of all terms & conditions is attached.

Signature of Partner with Name & Seal of the Audit Firm Date: Place:

Annexure-VI

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PROFORMA OF BANK GUARANTEE FOR SECURITY DEPOSIT (On non-judicial stamp paper of appropriate value) To M/s. Hindustan Copper Limited ‘Tamra Bhavan’ 1, Ashutosh Chowdhury Avenue, Kolkata – 700 019 Dear Sir, M/s.----------------------------------------------------------------------------------------------- upon being awarded the work of -------------------------------------------------------------------------------- for Hindustan Copper Limited at-------------------------------------------------------------under tender/LOI/Work Order No.---------------------------------------------------------approached us with the request to furnish Hindustan Copper Limited at------------------------------------------------ a Bank Guarantee for Rs.----------------------------------- (Rupees-----------------------------------------------------------------------------------------------------------only) towards security deposit. At their request and in consideration of the promises, we -----------------------------------------------------------------------------------------have agreed to give guarantee as hereinafter mentioned. 1. We----------------------------------------------------------------------------------------- hereby agree and undertake that if in your opinion any default is made by the said M/s.------------------------------------------------------------------------------------------------------------------------------in performing any of the terms and/or conditions of the agreement or if in your opinion he commits any breach of agreement or there is any demand by you against the said M/s.--------------------------------------------------------------------------------------------------------------------------------------then on notice to us by you we shall on demand without demur and without reference to the said M/s.----------------------------------------------------------------------------------------------------------------------------immediately pay to you, in any manner in which you may direct, the said amount of Rs.-------------------only (Rupees----------------------------------------------------only) or such portion thereof as may be demanded by you not exceeding the said sum and as you may from time to time require. Our liability to pay is not dependent or conditional on your proceeding against the said M/s.----------------------------------------------------------------and we shall be liable to pay the aforesaid amount as and when demanded by you merely on a claim being raised by you and even before any legal proceedings are taken against the said M/s.-----------------------------------------------------------------------------------. 2. You will have full liberty without reference to us and without affecting this guarantee, postpone for any time or from time to time the exercise of any of the powers and rights conferred on you under the contract with the said M/s.------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -----------------------------and to enforce or to forbear from endorsing any power or rights or by reason of time being given to the said M/s.-----------------------------------------------------------------------------------------------------------------which under law relating to sureties would but for the provision have the effect of releasing us. 3. Your right to recover the said sum of Rs.-------------------only (Rupees------------------------------------------------only) from us in manner aforesaid will not be affected or suspended by reason of the fact that any dispute or disputes have been raised by the said M/s.--------------------------------------------------------------------------------- and/or that any dispute or disputes are pending before any officer, tribunal or court. 4. Our guarantee herein contained shall not be determined or affected by the liquidation or winding up of dissolution or change or constitution or in solvency of the said M/s.-----------------------------------------------------------------------but shall in all respects and for all purposes be binding and operative until payment of all money due to you in respect of such liability or liabilities. 5. Our liability under this guarantee is restricted to Rs.--------------------(Rupees----------------------------------------------------- only). Our guarantee shall be valid up to------------ and we are liable to pay the guaranteed amount or any part thereof under the Bank Guarantee only and only if you serve upon us a claim or demand or a suit/action to enforce a claim under guarantee is filed against us on or before------------------------------------------------------------.

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6. We have power to issue this guarantee in your favour under Memorandum and Articles of Association and the undersigned has full power to do under the power of attorney dated ----------------------granted to him by the Bank. Yours faithfully, ------------------------------------------------------------------------------------------------- Bank (Signature of a person duly authorized to sign on behalf of the Bank).

Annexure-VII

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PRICE BID FORMAT to be uploaded in pdf format. Sl. No.

Item Description

Item No.1

Internal Audit work for the Company (HCL) for FY 2017-18 and FY 2018-19

Rate Rs. per Annum .

Rate is to be quoted excluding taxes if any.

Name of the Agency Signature Stamp Date

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