TS-02_MD-WZ-02-Audit-13-14-TS-02-12713_07062013.pdf

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OFFICE OF THE MD (WEST ZONE)M. P. Paschim Kshetra Vidyut Vitaran Co. Ltd.,

G.P.H. Compound, Pologround, Indore

Tender Specification No.MD/WZ/02/Audit/13-14/TS-02/12713 dated 07.06.2013

Due for opening on: 18.07.2013Request for Proposal Document (Tender)

June -2013

(This Document contains 01 to 24 Pages)

_ Tender for The Appointment Of The chartered Accountant Firms as Internal

Auditor for Audit of Corporate Office, MPPKVVCL, Indore For Three Years

Issued by:Director (F&A)

O/o MD (West Zone),M. P. Paschim Kshetra Vidyut Vitaran Co. Ltd,G.P.H. Compound, Pologround, Indore (M.P.)

Ph No.: 0731- 2426247,2426355,2426311,Fax No. 0731-2423300.


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Index of Tender Document

SR NO PARTICULARS PAGE NO

1 NOTICE INVITING TENDER 02

2 INTRODUCTION & BACKGROUND

033 OBJECTIVE

4 QUALIFYING CRITERIA5 PERIOD OF VALIDITY OF THE BID

04

6 TERM OF AGREEMENT( CONTRACT PERIOD)

7 EARNEST MONEY DEPOSIT

8 CLARIFICATION/FURTHER INFORMATION

9 PRE-BID CONFERENCE

10 DUE DATES OF OPENING OF THE BID

11 CONSIDERATION OF BID 04-05

12DUE DATES OF OPENING OF THE BID

0513 RIGHT OF REJECTION14 STRUCTURE OF AUDIT TEAM & ROLES AND

RESPONSIBILITIES

15 SECURITY DEPOSIT

16 INTERNAL AUDIT – AUDIT OPINION AND REPORTING06-07

17 OFFICE SPACE

0718 TRAVELLING EXPENSES

19 PAYMENT TERMS

20 FORMAT FOR THE FINANCIAL BID 08

21 ANNEXURE 1 09

22 ANNEXURE 2 10

23 ANNEXURE 3 11

24 ANNEXURE 4 12

25 ANNEXURE 5 13

26 ANNEXURE 6 14

27 ANNEXURE 7 15-19

28ANNEXURE 8 (Draft of Agreement)

20-24



MD/WZ/02/Audit/13-14/TS-02/12713 date 07.06.2013

NOTICE INVITING TENDER

Sealed tenders are invited from reputed Chartered Accountant Firms :-

TS. No. Name of Work Tender fee

(in Rs.)

Amount

of EMD(in Rs.)

Due date for

Opening

TS-02 Tender for The Appointment Of The chartered Accountant Firmsas Internal Auditor for Audit of

Corporate Office, MPPKVVCL,Indore For Three Years

1000/- 10000/- 18.07.2013at 11.00 a.m.

Note:- Full details of qualifying criteria, earnest money and terms & conditions of tender are available on our website – www.mppkvvcl.org. The tender documents mustbe purchased from the Director (F&A) O/o MD (WZ), MPPKVVCL, Indore, from dtd.

17-06-2013 on payment of non refundable tender fees as specified above (extra Rs.100/- each by post), between 11.00 Hrs. to 17.00 Hrs. on all working days. Tenderdocuments down loaded from web site will also be entertained in that case bidder mustsubmit tender fees in a separate envelope with bid. In case of any ambiguity, the termsand conditions mentioned in the tender document will be final. The payment of EMD/Cost of Bidding Document shall be made by crossed Demand Draft in favours of

MPPKVVCL, Indore payable at Indore. Cheque/Cash/Postal orders will not be accepted.The last date of selling of tender document shall be 17.07.2013 upto 12:00 hoursand last date of submission of Bid shall be 17.07.2013 upto 17:00 hours .

Further details could be obtained from No: Ph No.:0731-2426247, 2426355, 2426311

www.mppkvvcl.org //Save Electricity// Director (F&A)



TENDER DOCUMENT INCLUDING TERMS OF REFERENCE (ToR) FOR APPOINTMENT OF THE INTERNAL AUDITOR

1. INTRODUCTION & BACKGROUND

Madhya Pradesh Paschim Khsetra Vidyut Vitran Company Limited, with its Head Office at GPH CampusPologround Indore, is a Power Distribution Company incorporated under the provisions of the CompaniesAct, 1956 and is a Government of Madhya Pradesh Undertaking, post un-bundling of Madhya Pradesh State

Electricity Board in 2005, as a part of the MP power sector reforms. The scope of work of the companyincludes:i. Distribution of electricity to retail consumers;ii. Compliance of requirements provided under provisions, regulations, notifications, clarification, etc

issued or notified by Madhya Pradesh Electricity Regulatory Commission (MPERC).iii. Operation and Maintenance of distribution system;iv. Billing to retail consumers and collection of revenue from retail consumers;v. Capital investment for improvement and capacity enhancement of distribution system.

The Company is engaged in the distribution & retail supply of electricity to its consumers through 2regional offices,14 circles and 51 divisions. There are about 402 Distribution Centres/Zones and 4 No. CityDivisions under the Company in the specified area.The Management of the Company has decided to appoint Internal Auditors, by engaging the Firms of Chartered Accountants with a view to bring in a professional approach in the Internal Audit of the PowerDistribution business in Madhya Pradesh. As a part of the implementation of the same, the appointment is

planned to be done on a 2-tier basis:1. Tier I Audit Firms – Internal Audit of all the sections/departments of the Corporate Office

along with managing/verifying the works of the Tier II Audit Firms.2. Tier II Audit Firms– Internal Audit at the Regional/ Division Office(s).The company desires to engage a reputed Chartered Accountant firm as Internal Auditor forundertaking the Tier I Audit functions at the Corporate Office to carry out the internal audit on aquarterly basis of all the sections/departments of the Corporate Office.

2. OBJECTIVE :-

The objective of this assignment shall be to:2.1. Focus on regular internal audit of the office(s) to assess ,review ,recommend and comment in respect

of effectiveness & efficiency of accounting, financing , operation & maintenance functions andprocedural compliance at all the corporate divisions;

2.2. Ensure prevention by early detection of misappropriation, fraud, irregularities, negligence, etc;2.3. Establish an effective internal audit and control system;2.4. Achieve the objectives specified in the Corporate and Operational Plans.

3. QUALIFICATION CRITERIA

(Refer Annexure 1 for Submission of Information for the Qualification Verification)3.1 The CA Firm must be in operation for at least fifteen (15) years, (with at least one (1) office of

operation located in Indore duly registered with ICAI and at least 1 Partner should sit regularly insuch Office. If the firm does not have its office in Indore at present then the firm shall submit anUndertaking in the A n n e x u r e - 6 regarding consent for opening of its Branch office in Indore dulyregistered with ICAI within one month of receipt of Letter of Award(LoA). If selected firm after onemonth of receipt of Letter of Award (LoA) fails to submit copy of the registration of firm from ICAI

showing Branch office in Indore its contract award shall be cancelled.3.2 The CA Firm must be empanelled with C&AG for the FY 2013-14, having a minimum of three (3)

Fellow Chartered Accountants (FCA) and at least one (1) DISA/CISA qualified Chartered Accountant;3.3 The firm must undertake to deploy audit team as per details given in Clause 13 of the tender

document.3.4 Firm should have served as internal auditors for two (2) years during past four years in any zonal/

regional/ corporate office(s) of a Govt. / Semi Govt. Undertaking which has a turnover of at least Rs.500 Crores; In case of internal audit has been carried out for the Corporate office of any Govt. / SemiGovt. Undertaking then the turnover shall be considered for the organisation as a whole. In case of internal audit has been carried out for the Zonal / Regional office of any Govt. / Semi Govt.Undertaking then the turnover shall be considered for that particular Zonal/ Regional office(includingoffices subordinate to such Zone/Region). As a proof of turnover the bidder firm required to submit acertificate in this regard from the client.

3.5 The Firm should have turnover of at least Rs. 20 Lacs in any one Financial year, FY 2011-12 or FY2012-13 ;

3.6 There should be no legal suit / Criminal case pending or contemplated against the CA Firm on thegrounds of moral turpitude or for violation of any of the law in force.



4. PERIOD OF VALIDITY OF THE BID :-

The Bid shall remain valid for a period three (3) months from the date of opening of Technical Bid.MPPKVVCL reserves the right to request extension of the bid validity for an additional period of three (3)months, if necessary.

5. TERM OF AGREEMENT (CONTRACT PERIOD)

The Internal Auditor for the Corporate Office would be appointed for an initial period of three (3) years

from the date of letter of award.MPPKVVCL, Indore reserves the right to terminate the Agreement at any time before the expiry of theContract Period.

6. EARNEST MONEY DEPOSIT6.1. All interested bidders are expected to submit, along with their Bid, Earnest Money Deposit (EMD) of

Rs. 10,000 /-, in the form of DD / Bankers’ Cheque, drawn on any scheduled bank in favour of MPPKVVCL, payable at Indore.

6.2. The EMD of the unsuccessful bidder shall be returned not later than sixty (60) days after the expiryof the period of Bid validity as specified above.However, EMD of Successful Bidder shall be returned after the submission of the Security Depositand Execution of the work.

6.3. Offers submitted without EMD shall be summarily rejected.

7. CLARIFICATION/FURTHER INFORMATION

The Bidders may seek clarification on the ToR by making a request in writing, submitted to the personaddressed below, either in person, or through registered post / courier, or through email, in the formatprescribed in Annexure 3 till 08.07.2013 as per the details provided below:

Designation :Director (F&A)Address :O/o MD (West Zone),

MPPKVVCL G.P.H. Compound,Pologround, Indore (M.P.)

Ph No. :0731-2426247,2426355, 2426311Fax No. :0731-2423300E-mail :[email protected]

8. PRE-BID CONFERENCE

Interested Bidders may attend the pre-bid conference on 10.07.2013 at 12.00 Hrs.at the followingaddress:Conference Hall O/o MD (West Zone),MPPKVVCL G.P.H. Compound, Pologround, Indore (M.P.)

9. Due dates

Sl. No. Activities Due Dates

1 Issuance of Tender Document 17th June,2013

2 Pre bid conference 10t July, 2013 at 12:00 Hrs.

3 Last date for sale of Tender Document 17th July, 2013 at 12.00 Hrs.

4 Last date of submission of Bid (Bid Deadline) 17th July, 2013 at 17.00 Hrs.

5 Opening of Technical Proposal 18th July, 2013 at 11.00 Hrs.

10. CONSIDERATION OF BID

10.1. The bid must be enveloped and super-scripted as “Envelope 1 – Earnest Money Deposit andTender Document Fees [Bidder to insert if applicable]”;

10.2. “Envelope 2 - Bid for appointment as Internal Auditor- Technical Bid” containing all theinformation and enclosures as required in Annexure 1 and undertakings as attached in Annexure-4, Annexure -5 and Annexure-6. The bid which do not contain the requisite information or is notsupported by the supporting documents will be treated as non responsiveness, and his bid will not beopened.

10.3. “Envelope 3 - Bid for appointment as Internal Auditor- Financial Bid” must contain the

Quotation for each year of the Contract period for the appointment as Internal Auditor of theCorporate Office.10.4. The bids, found eligible after evaluation of the technical bid, will be shortlisted and financial bids of

only such eligible bidders shall be opened.



10.5. The financial bid with the lowest Total Quoted Fees will be selected for award subject to conditionthat the lowest Total Quoted Fees quoted by the bidder is reasonable and other contractualformalities are fulfilled.

10.6. The selected bidder shall be issued a Letter of Award (LoA) by MPPKVVCL, Indore.The selectedbidder shall accept the Letter of Award unconditionally, within seven (7) days from the date of issue of the LoA.

10.7. Upon acceptance of the LoA, the selected bidder shall be required to sign up an agreementwith MPPKVVCL Indore on a non judicial stamp paper of Rs. 250/-, within fifteen (15) days of acceptance of LoA, containing overall terms and conditions which shall be binding on the firms.

Draft of the Agreement is given as Annexure -8.10.8. Cost of the stamp and revenue stamp affixed on the agreement shall be borne by the applicant.MPPKVVCL, Indore shall not reimburse these costs.

10.9. The selected bidder shall commence the work of Internal Audit within 15 days of signing of theagreement.

10.10. If the selected bidder:10.10.1.Fails to accept the LoA within the prescribed time;

10.10.2.Fails to complete the contractual formalities within the stipulated time period; or

10.10.3.Fails to commence the work within the stipulated time period.

Then in such cases, MPPKVVCL, Indore reserves the right to cancel the offer made to such firm,forfeit its EMD and may also blacklist the bidder. In such case the MPPKVVCL may at its discretion,offer the contract award to L-2 firm at the rates quoted by L-1 Firm .

10.11. The selected bidder shall not sublet the work of Internal Audit to any other party. Any violation of

this provision would make the contract liable for termination10.12. MPPKVVCL, Indore reserves the right to cancel the tender without assigning any reason thereof.

11. DUE DATES OF OPENING OF THE BID

Bids will be accepted up-to 17.00 hours on 17th July,2013 and will be opened on 18th July,2013 at11.00 hours in presence of the CA Firms or their authorized representative.

12. RIGHT OF REJECTIONThe Company is not bound to accept lowest Total Quoted Fees, nor is it bound to assign any reasonwhatsoever for rejecting any or all of the Bids.

13. STRUCTURE OF AUDIT TEAM & ROLES AND RESPONSIBILITIES

13.1. The selected bidder firm shall be required to depute one audit team for the Internal audit of

the Corporate Office, consisting of one (1) Chartered Accountant and two (2) experienced staff who should be minimum graduates and not be the article assistant of the firm (each withminimum 2 years experience) on full time basis in the premises of the Company .

13.2. In addition to Audit team as mentioned above, the Bidder shall have a Team leader who shouldbe a Fellow Chartered Accountant (FCA) responsible for the supervision and overall monitoring of the team. He shall arrange all necessary information for the audit team from time to time,Effectively supervise and control the audit,.

13.3. The deployed Audit team, referred to as Auditor hereafter, shall be responsible for Carrying outthe day to day Internal Audit of the Corporate Office as per scope of work defined in Annexure-7of the tender document.

13.4. The Internal Audit staff will be authorized to review all areas of the organization and shall have fulland free access to all activities, records, property and personnel of the organization.

13.5. The Team leader (FCA) deployed shall be responsible for the overall coordination of theInternal Audit function. He should ensure the work shall be as per the Scope of Internal Auditand completion of the Audit as per the schedule.

13.6. During the course of the audit there shall be regular meetings once in a month betweenthe management of the Company and the team leader of the audit team to discuss and reviewupon the issues. He should also report to the management of the company on need basis .

13.7. The selected bidder firm shall be required to report the outcome of their activities to the Director(F&A).

13.8. The Internal Auditor should be responsible for periodically evaluating the adequacy andeffectiveness of the system of internal control and the quality of performance in carrying outassigned responsibilities throughout the Company.

13.9. The Internal Auditor shall be obliged to maintain complete secrecy and not to disclose any matterwhich comes to its knowledge while conducting Internal Audit, to any third party, which mayaffect the interest of the Company adversely.

13.10. The appointment of the Audit team and the team Leader shall be made on the basis of the

credentials, experience and capability as furnished by the participating firm for the purpose of evaluation along with the technical proposal.13.11. The Internal Auditor shall not sublet the work of Internal Audit to any other party.



explanation for any recommendations not addressed. All significant findings will remain open until clearedby the Head of Internal Audit.The Internal Auditor shall work for the achievement of the objectives of Internal Audit and as per theStandards of Internal Audit prescribed.However, if the performance of the Internal Auditor is found to be unsatisfactory or not to the standards asexpected by MPPKVVCL, the contract can be terminated even before the expiry of the period of agreement.Indicative performance parameters are listed in Annexure 2 can be used as the medium for reviewing theperformance of the Internal Auditor.

16. OFFICE SPACE

The Company shall provide all sitting arrangements including furniture free of cost for bona-fide use of audit staff. Other resources, viz. computers, telephone etc. would have to be arranged by firm.

17. Travelling Expenses

The expenses incurred on travelling of the staff of the Internal Auditor deployed on the project to anyof the Field offices for the purpose of the Audit shall be reimbursed at par, provided the same is withthe consent of the Head of Internal Audit, MPPKVVCL. The TA Bill shall be submitted to JointDirector (Finance & Accounts ), Indore in the prescribed form of the Company. However, the TA Bill shallbe reimbursed based on the travel slab applicable to the corresponding rank in the Company under the

rules in force from time to time.

18. PAYMENT TERMS

Fees for the Internal Audit Function

18.1. The Bidder shall quote the lump-sum price for each year of the Contract period, inclusive of alltaxes, duties etc., for carrying out internal audit of MPPKVVCL as per scope of work and the termsand conditions given in the tender document. The payment terms for each year of the Contractperiod will be as follows:6

Sl.No.

Release of Fees Percentage (%) of the AnnualQuoted Fees (AQF) for therelevant year

1 On submission and acceptance of 1st Quarter Reportalong with the Management Letter

20%

2 On submission and acceptance of 2nd Quarter Reportalong with the Management Letter

20%

3 On submission and acceptance of 3rd Quarter Reportalong with the Management Letter

20%

4 On submission and acceptance of 4th Quarter Reportalong with the Management Letter

20%

5 Final payment after one (1) month from the date of

submission of 4th quarter report

20%

18.2. In case of delay in submission of the Quarterly Audit Report ( in Hard & Soft copy) within 30 daysof the end of a Quarter, a penalty of 2% of the fees due for the particular quarter will be imposedfor every week delay subject to a maximum of 5% of the fees due for quarters.

18.3. Quarterly payment of accepted fees will be made within 45 days or on turn as per queuewhichever is later after satisfactory completion of work as per scope of work mentioned inAnnexure-7 of the tender document.

18.4. No interest, claim or penalty etc. would be payable by MPPKVVCL in case of any delay in paymentbeyond stipulated time.

18.5. No. advance payment shall be made against audit fee.18.6. The bill should be submitted in triplicate to Director (F&A) O/o MD MPPKVVCL, Indore.

18.7. After satisfactory completion of the work, the bill will be passed by the Bill section of Corporate office and shall further be forwarded to the Director (F&A) of Corporateoffice MPPKVVCL,Indore for pre-auditing the bill and arranging payment within 45 daysor on turn as per queue whichever is later.



FORMAT FOR THE FINANCIAL BIDThe following shall be used as a format for the “Financial Bid” to be submitted in Enevelope-3 of theBid.Annual Quoted Fees (AQF) for the Internal Audit Function

S.No.

Details Year Professional Fees(Amount in Rs.)

Service Tax(Amount in Rs.)

Total(Amount in Rs.)

1 Lumpsum priceinclusive of all taxes,duties & all otherexpenses etc. forcarrying out internalaudit of MPPKVVCLas per scope of workand the terms andconditions given inthe tender document.

Year 1

2 Year 2

3 Year 3

Total

(Rs. In words _________ )

Note:1. Evaluation will be done on the Total Quoted Fees for three years (including service tax).2. Any overwriting or erasing in the quotation shall render the same invalid.3. Where there is any discrepancy between the rates in figures and words, words will govern.4. Any difference between the original and duplicate copy of the bid, the Original Bid shall govern.



ANNEXURE-1

Submission of Information for the Qualification Verificationa) All information submitted shall be sealed and signed by the authorized representative of the firm.b) A brief “Profile” of the Firm’s Practice and experience giving the following details clearly:

1 Name of the Firm2 ICAI Registration No.3 CAG Empanelment No. for the FY 2013-14

4 PAN No.5 Service Tax Registration No.6 Strength of manpower.

7 Audit and Certification work done in past 2 years (along with details as Name of theclient and the fees charged)

8 Experience of PSU’s other than Bank and Insurance Sector

Along with the Profile above, the firm must submit documentary evidences in support of the

above mentioned details, as given in the table below:

1 Photocopy of the certificate of registration of the partnership with ICAI2 Photocopy of the latest certificate of Constitution of firm issued by ICAI.3 Documentary evidence for the CAG Empanelment No. for the FY 2013-144 Photocopy of PAN Card5 Photocopy of Service Tax Registration Certificate / Copy of Service Tax Challan etc clearly

specifying the Name and Registration No. of the CA firm6 DISA/CISA certificates of the DISA/CISA qualified CA7 Audited copies of P & L A/c, Balance Sheet, and Income Tax Return for last three years of

the CA firm8 Breakup of the Professional Fees of 2012-13, clearly segregating the fees from Audit

services during the year (if not already available in the audited accounts), duly attested byits Auditor

c) Qualification of the staff

Sl. No. Qualification No. of Staff on rolls

1 No. of CAs2 No. of DISA/CISA qualified CA3 Postgraduate in Commerce4 Graduates in Commerce

d) Details of list of major five clients with data for FY 2012-13 giving the following detailsclearly:

1 Name of organization.2 Form of organization (Partnership/ Proprietary/Company).3 Turnover.4 Fee charged.5 Experience/Completion Certificates of Statutory / Internal Audit from at least three clients out of

the Clients as mentioned above.6 Audited Financial Statements of the Year 2012-13 of the clients mentioned above.

e) Documentary evidence in support of the internal audits undertaken for zonal/ regional/corporateoffice(s) of a Govt/ Semi-Govt Undertaking (Appointment letter for the appointment as InternalAuditor of the zonal/regional/ corporate office(s) of a Govt./ Semi-Govt. Undertaking)

f) Certificate of Turnover of the Govt/ Semi Govt. Undertaking for whom the firm has served as

Internal Auditor.g) Audited Financial Statements of the Govt/ Semi-Govt undertaking for the respective year(s) forwhich the firm has served as Internal Auditor.



ANNEXURE- 2Indicative Performance Parameters of the work of Internal Auditor

The performance of the Auditor shall be determined based on the following parameters:• Feedback from the Board of Directors of the Company;•

Elapsed time for issue of reports – completion of audit work to draft report;• Elapsed time for issue of reports – draft to final report;• % unsatisfactory audit opinions (not more than 10%);• % of recommendations accepted (not less than 50% - 70%);• Number of repeat audit findings;• Amount of direct savings potential as a result of audits;• Amount of measurable savings achieved as a direct result of audits;• Number of major process improvements implemented as a result of audits;• Extent of reliance External audit can place on Internal Audit;• Extent of advice given; and• Number of best practice ideas shared

In addition to the above list, the Internal Auditor is also expected to follow and meet the minimumstandards for Internal Audit as prescribed from time to time.



ANNEXURE- 3

FORMAT FOR CLARIFICATIONS IN THE TENDER DOCUMENT

Sl.

No.

Clause no. and existing

provision

Clarification

required

Rationale for the

clarification



ANNEXURE -4

UNDERTAKING BY THE BIDDERS

(This undertaking is to be submitted along with the Technical Bid in Envelope -2.)

(This undertaking should be on a non-judicial stamp paper of `

100 duly notarized)

To,Director (F&A),O/o MD (West Zone),MPPKVVCL G.P.H. Compound,Pologround, Indore (M.P.)

Dear Sir,Sub: Bid for Appointment of Internal Auditors at the Corporate Office, MPPKVVCL, Indore(Tender Specification No. MD/WZ/02/Audit/13-14/TS-02 /12713 Indore dtd: 07.06.2013 )This undertaking is submitted in respect of the appointment of Internal Auditors for the Corporate Office of MPPKVVCL, Indore, in response to the tender document dated 07.06.2013 issued by MPPKVVCL, Indoreand subsequent amendment thereof.

We hereby confirm that:1. We have never been blacklisted by any Government Department or Public Sector Undertaking of

any State Government in India or the Government of India for practicing in India.2. We have no pending or contemplated legal suit or criminal cases on grounds of moral turpitude or

for violation of any other law in force.We understand and agree that if the information mentioned above is found to be incorrect at any stage of this Bidding Process, our Bid shall be considered as non-responsive and rejected accordingly. If thisundertaking is found to be incorrect post the issue of LoA, then such LoA issued shall be cancelled and thecontract terminated, without any liability to either Party. Under such circumstances, however, weacknowledge and accept the right of MPPKVVCL to encash our EMD.We further understand and agree that if the Audit is awarded to us and this undertaking is found to beincorrect after execution of the work, the order of appointments stands terminated, without any liability toeither Party. Under such circumstances, however, we acknowledge and accept the right of MPPKVVCL toencash our security deposit.

……………………………………………..

(Signature of authorised signatory of the firm issued along with firm seal)

Name: ……………………………

Designation: …………………………..

Date: ……………………………

Place: ………………………...



ANNEXURE- 5

UNDERTAKING BY THE BIDDERS

(This undertaking is to be submitted along with the Technical Bid in Envelope -2.)

To,Director (F&A),O/o MD (West Zone),MPPKVVCL G.P.H. Compound,Pologround, Indore (M.P.)

Dear Sir,Sub: Bid for Appointment of Internal Auditors at the Corporate Office, MPPKVVCL, (Tender SpecificationNo. MD/WZ/02/Audit/13-14/TS-02 /12713 Indore dtd: 07.06.2013 )This undertaking is submitted in respect of the appointment of Internal Auditors for the Corporate Office of MPPKVVCL, Indore , in response to the tender document dated 07.06.2013 issued by MPPKVVCL, Indoreand subsequent amendment thereof.We hereby agree that:a) We shall deploy audit team & team leader as mentioned in Cl au s e- 1 3 of the tender document on theassignment who shall be responsible for the Internal Audit of the Corporate Office;b) The experienced staffs deployed on the assignment are not the articled assistants of the firm.c) The staff will maintain complete secrecy of the records and will not disclose any matter which comes tothe knowledge during the conduct of internal audit, to the third party, which may affect the interest of theCompany adversely.

……………………………………………..

(Signature of authorised signatory of the firm issued along with firm seal)

Name: ………………………………..

Designation: ……………………………

Date: ……………………………

Place: …………………………



ANNEXURE-6

(Format for submission with Technical-Proposal)

(To be kept in envelope 2)

[Shall be detailed out as indicated in the format on the Company’s/ Firm’s Letter Head]

I, the undersigned, being the duly authorized representative, do hereby declared that if the

work of the Appointment Of The chartered Accountant Firms as Internal Auditor for Audit of

Corporate Office, MPPKVVCL, Indore For Three Years allotted to our firm , the firm shall open

its branch office in Indore, within one month of the receipt of the LoA from MPPKVVCL Indore

and a copy of the registration of the firm from ICAI showing its branch office in Indore will be

submitted to the MPPKVVCL Indore failing to which MPPKVVCL Indore shall have the right to

reject our proposal .

The undersigned understands and agrees to the statement made above.

________________________________

(Signed by an authorized Officer of the Firm, along-with seal of firm)

Title of Officer -

Name of Firm-

Date –

Place-



ANNEXURE -7

Broad Scope of Internal Audit at the Corporate Office Level

Internal auditing is an independent, objective assurance and consulting activity designed to add value andimprove an organization's operations. It helps an organization accomplish its objectives by bringing a

systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control,and governance processes.The Internal Audit firm appointed shall be responsible to carry out internal audit function, and submitreports as per the reporting requirements on Audit observations a initial period of three (3) years.

(A) SCOPE OF INTERNAL AUDIT AT CORPORATE OFFICEScope of Work should include the verification of internal controls and process at all thesections/departments of the Corporate Office It includes internal controls in all the departments / sectionsof the corporate office In particular , the internal auditor shall be required to comment on following aspectsof working of different department of the Corporate office.

1. C.E.(Purchase)

1.1. Checking of administrative & financial approval and payment against tenders above Rs. 50 lacs.

1.2. To verify the progress of all the turnkey contracts awarded and ensure the same comply withthe contract conditions.1.3. Checking of the cost data and estimates of the turnkey projects1.4. Refund status of EMD/ SD1.5. Release of BG where the contracts are concluded.1.6. Check to ensure that tender procedures viz, payment of earnest money ,receipt of tender,

opening of tender, attestation of tender by Finance Representative etc. are complied with.1.7. Check to ensure that tenders from black listed parties are dealt with as per orders/instructions

on the subject.1.8. Check to ensure that ordered quantity is delivered within the due date as per delivery schedule;

in case of extension, it may be seen that the extensions are approved by the competentAuthority.

1.9. Check to ensure that in case of cancellations that these are made with the approvals of theCompetent Authority’s terms of purchase order.

1.10. Check to ensure that Purchase Order /agreement incorporates a suitable compensationClause in case of delay in execution or non execution of Purchase/ various orders .

1.11. Check to ensure that in the respect of Purchase Orders placed against ex-post-facto approval of Chairman/Board ,that such ex-post-facto approval are in fact obtained.

1.12. To check whether a proper system exists to check the approval of the competent authoritybefore any action is initiated by the purchase department.

1.13. To determine whether purchase order are placed promptly after receipt of requisitions .1.14. To make sure that bids are properly analysed in accordance with the procedure laid down1.15. Whether an award is made other than to the lowest bidder,Find out why it was done and

whether approval was secured and reasons for accepting a bidder other than lowest areproperly recorded .

1.16. To see that the procedure for registration of suppliers are followed as per rules.1.17. To verify whether tenders received against different enquiries are kept under safe custody and

opened on due date.1.18. To verify whether tender opening register is maintained properly.1.19. To examine whether sales tax and all other taxes applicable as well as percentage there of

mentioned on all purchase orders.1.20. Proper action is being taken against the (i) Firm who has failed to supply the material /failed to

carry out the work as per order (ii) Firm who has not supplied material in time, in requiredquantity and as per specification of the supply order or firm who has not carried out the work intime and as per specification of the work order.

1.21. To check :- (a) whether nomenclature of specifications given in the tender/enquiry/TenderNotice tally with the Quotations/Tenders received. If not, note the differences. (b) Whetherrebates offered by the tenders for payment terms or quantity are brought out in thecomparative statement and duly availed of. (c) Whether one supplier is quoting in differentnames so as to fulfil the requirement of minimum three quotations. (d) whether there is anyattempt to split the purchases.

1.22. To see that the adjustments for the short supply or the reject material and credit received fromthe suppliers are handled correctly and promptly.

1.23. To see that concessional rate of Central and Commercial Tax is availed wherever applicable inpurchasing goods/ materials.



1.24. Purchase has been made after call of comparative tenders by giving wide publicity whererequired and rates are reasonable as per prevailing market trend.

2. Human Resources and Administration Section

The following records are generally required to be kept which require checking by auditor :-(a) Attendance register (b) Service books (c) Personal files (d) Medical claims register (e) Advance (HBA,Conveyance advance ,festival advance etc.) register (f) Telephone Register (g) Register of repairs and

replacement (h) Purchase order (i) Stock register (j) Dead Stock Register (k) T.A. Register (l) C.L.Register(m) Postage stamp account register.2.1 Administration Department

2.1.1To test check the indents, purchase orders, requisitions and stock register for stationery andprinting material.

2.2 Personnel Department2.2.1Expenditure on establishment and other than establishment and their comparison with the proposed

budgets.2.2.2 Looking to the present working staff, recruitment of staff of all cadres being made by the Company is

necessary, Justified and Proper procedure is being followed in recruitment.2.2.3To check the strength of staff with original sanctions of competent authorities with the staff in

position.2.2.4To scrutinise the leave records of employees and test check the calculations of Earned & Sick

leave as per rules and note the postings of actual leave taken into service records /books withsanctioned applications. Regularisation of cases where the employees availed leave in excessof prescribed days, cases of non debiting of CL or any other kinds of leave, non deduction of salary against cross marking in the attendance register, deduction of salary of the employeetowards LWP and other kinds of irregularities.

2.2.5To check the re-fixation of pay of employees as a result of promotion or an agreement withunion or as per decision of Board/Company taken from time to time.

2.2.6To see the proper records of each employee is maintained in the personal history sheet /service books.In case of new appointments it may be ensured that police verification reportshave been obtained.

2.2.7Test check whether all formalities are observed as per existing rules for the recruitments of employees indifferent posts .

2.2.8To check the leaves other than earned and sick leaves are granted as per existing procedureof the Board/Company and properly noted in the personnel records/service books.

2.2.9Proper action is taken in cases of suspension/ termination/demotion/dismissal/compulsory retirement casesof the employee.

2.2.10 Proper and timely action is taken in all the court cases by the Company.2.2.11 Maintenance of service book of the employee as per Board’s/Company’s rule.2.2.12 Purchases of furniture and fixtures, purchase of computers, disposal of old furniture and computers.

2.3 Pay Rolls /Salary & Wages Payments2.3.1To check the each name in salary/wages sheet with attendance records received from the

establishment sanction and other sections/departments concerned.2.3.2 To check the D.A., C.C.A., H.R.A., other allowances are allowed as per rules.

2.4 Medical Claims

2.4.1To see that a proper register of medical claims is maintained as prescribed and is kept uptodate.

2.5 Provident Funds Account2.5.1 Examine that an employee is made a member of P.F. in accordance with the rules and

regulations of the Provident Fund Act Board’s /Company’s Provident fund Scheme.2.6 Travelling Expenses

2.6.1T.A. Bills

2.6.1.1 To verify that the TA bills are correctly passed as per the Travelling Allowances Rules of theBoard/Company.

2.6.1.2 To verify that the journey was actually performed and it was authorised by a competentauthority.

2.6.2 T.A. Advance2.6.2.1 To see that all advance payment for TA are made on the sanction of competent authority and

individual accounts of such advances are duly posted in the TA advance register.2.6.3 Transfer Advance

2.6.3.1 To verify the transfer TA bill with reference to relevant advice/order .2.6.4 Telephone register

2.6.4.1 To test check the bills of telephone etc. as passed by Administrations.2.6.5 Misc. Bills Register.2.6.6 Dead stock Register.2.6.7 Cash Book, R-11 Book, CAC, CRA.



3. Works and Planning Department

3.1. Verify that administrative approval and technical sanction for various works is granted as per DoPand in accordance with norms /procedure.

3.2. Verify that funds are received for execution of deposit/Contributory works prior to commencementof such works.

4. Commercial Department

4.1. Verification of Power Purchase bills, Transmission charges bills and SLDC charges bills.4.2. Verification of HT Cases of Corporate Office – CE(IR) Indore & CE(UR) Ujjain Office.Verify that

proposals for sanction of new HT service connection /enhancement of load etc. are processedexpeditiously and delays are avoided.

4.3. Verify that various sanctions are granted after competent approval as per DoP.4.4. Audit of Franchisee Accounting.4.5. Audit of wind energy Account.4.6. Audit of open access consumer HT bill.

4.7. To verify and certify that the Billing software is updated from the effective date for the Tariff Ratesconsumer category wise as approved by MPERC.

5. Finance Department

5.1. Books of Accounts5.1.1. Ensure that the books of accounts like Loan registers, grant registers, shareholders

registers and all the other books of accounts required to be maintained as per CAG orany other Statute are maintained and duly updated.

5.1.2. Verify that the financial transactions have to be thoroughly checked for theiraccounting.

5.1.3. Scrutiny of trial balances of all accounting units and head office, and reporting of theobservations on the same.

5.1.4. To verify accounting and treatment of the interest charges, bank charges, guaranteeand other charges on funding by various funding agencies.5.1.5. Checking of capitalization and depreciation calculations .5.1.6. Proper Accounting of Grants.

5.2. Bank Transactions5.2.1. Reporting of the Status of the bank reconciliation statement of the bank account at

the Corporate Office and passing of adjustment entries.5.2.2. Report on the settlement of all old items reflected in the BRS.5.2.3. Report on the status FDR’s and Investments indicating interest earned/ accrued

during the quarter vis-à-vis reinvestment of the amount.5.2.4. Surprise verifications.5.2.5. Review of the Bank Accounts and suggestions for the closure of unnecessary Bank

accounts and discontinuance of the same.

5.2.6. Reconciliation of TDS deducted by the Bank on investments5.3. Debt Servicing

5.3.1. Verification of repayment of principal of various loans as per the payment schedule.5.3.2. Interest payments on various loans.5.3.3. Preparation of JVs month wise and proper accounting entries of the same.5.3.4. Review of the terms and conditions and benefits accrued as per the loan agreements.

5.4. CBP Cell5.4.1. Sample checking of invoices of vendors which have been admitted for payment to

verify that the invoice is in conformity with the contract terms and conditions anddeduction of taxes, penalty etc. has been done properly.

5.4.2. To verify that the vouchers for payment of taxes /statutory liabilities are preparedand submitted to payment section for timely remittance of taxes.

5.4.3. To verify that uniform and consistent approach is adopted while pre audit of bills/invoices of various vendors.

5.4.4. To verify that all invoices are processed within a reasonable time-limit and delays arenot occurring.

6. Company Secretary



This shall include checking of following:-6.1 All statutory requirements as per Company’s Act 1956 are complied.

7. S.E. (Stores)This shall include checking of following:-7.1. Timely receipt of various materials as per terms ,conditions and as per specification of the order. Timely entry

of materials in the Bin Card.7.2. Timely testing of materials as per conditions of supply order and proper receipt of test report.7.3. Timely lifting, repairing and return of material failed within Guarantee period by the supplier/repairing firms as

per condition of order like Meter, Power Transformer, Distribution Transformer etc. Timely action taken towardsrecovery of penalty from the supplier/repairing firms for cases like non lifting of materials in time ,Material notreturned in time ,material not returned , timely raising liability ,recovery of liability etc. as per terms & conditions of the order .

7.4. Timely issue of various materials to the field offices in order to reduce the inventory of the material.7.5. Proper maintenance of records of receipt/ issue of material as per procedure of the Board/Company.7.6. Timely auction for disposal of scrap material. Proper up-keeping and safety of the materials available in store.7.7. Check to ensure that in case defects are noticed within the warranty period, whenever a warranty exists ,due

claims are made on the vender/supplier.7.8. Ensure reconciliation and neutralization of difference as per accounts and as per the physical

verification of inventory is done.7.9. Reporting on the status of the physical verification of inventory.7.10.Check to ensure that the quantity delivered against the order is within the +/-tolerance limits

stipulated in the Purchase Order.

8. Project Department

In addition to above, the scope of auditor also includes verification of internal controls and process inall the following departments / sections of the corporate office.8.1. Project Department Feeder Separation.8.2. Project Department RGGVY.8.3. Project Department R-APDRP.8.4. Project Department ADB.8.5. Project Department Works section.8.6. To verify the progress of all the turnkey contracts awarded and ensure the same comply with the

contract conditions.8.7. Checking of the cost data and estimates of the turnkey projects.

9. Regulatory and Statutory Compliance

9.1. Checking of fee & fines realized by Commission as per relevant Regulation.9.2. Violation of TDS.9.3. Compliance of MPERC regulations.9.4. To ensure adequate internal control procedures commensurate with the nature & size of the

business in compliance to C&AG Report for the year 2008-09,2009-10 & 2010-11.9.5. Non compliance of payments of the Statutory Dues along with the reasons for the same

should be reported on a quarterly basis.9.6. Checking of the pending cases with the courts vis-a-vis occurring of contingent liability.

(B) SCOPE OF INTERNAL AUDIT TO VERIFY THE WORK OF THE TIER II AUDITORS:

1. Ensuring timely submission of Internal Audit reports by Tier II Firms, who are carrying out internalaudit of various offices at different circle levels under MPPKVVCL Indore for the different financial

year as per LoA issued by this office. Scrutiny of the Test Audit Report (TAR) & Test Audit Note(TAN) submitted by the Tier II Firms for the following :-1.1 The report is prepared as per standard format decided by the Company & Report file

containing all necessary annexure ,half margins etc. complete .1.2 The audit recovery pointed out by the auditor is correct as per rules & regulations/circulars

and according to the applicable tariff for the year & calculations are correctly made .1.3 All pages should be numbered serially.

2 Preparation of draft of covering letter informing to the auditee office as well as its next superioroffice about the TAR/TAN already submitted by the Tier–II auditor firm to their office, andrequesting them to send the compliance of the various audit observation within one month as percircular . The draft letter shall be put up to the Assistant Engineer (Audit) /Executive Engineer(Audit)/ Joint Director (F&A) for the signatures.

3 To prepare the U.O. Note on the basis of scrutiny of paragraph-wise compliance and offer

comments in respect of final settlement of paragraphs in TAR/TAN for their disposal, dropping orrejoinder, as the case may be. The draft U.O. Note /letter shall be put up to the Assistant Engineer(Audit) /Executive Engineer (Audit)/ Joint Director (F&A) for the final consideration.



4 After approval of U.O. Note by the Joint Director (F&A) Preparation of covering letter informing tothe auditee office as well as its next superior office about the settlement of various audit paras of TAR/TAN submitted by the auditee office and requesting for early submission of compliance of balance audit para .The letter shall be put up for signatures to Assistant Engineer (Audit)

/Executive Engineer (Audit)/ Joint Director (F&A).5 In cases where compliance report of TAR/TAN is not received within one month, make contact

telephonically /writing letter to the auditee office for early submission of the compliance report tothe Corporate office for early settlement of the audit pars & closing the file of the cases in whichcompliance of all the audit para have been made.

6 In case of L.T. Revenue Audit of Distribution Centres, verify the incentive amount claimed by theTier –II auditor firm for the realised audit recovery as per clause of the tender document of theTier-II firm and if the incentive claim found correct then put up the case through Assistant Engineer(Audit)/Executive Engineer (Audit)/ Joint Director (F&A) for the final consideration.

It is however emphasized that the coverage in the scope of services as mentioned above is indicative andnot exhaustive. Director (F&A) may include more area of audit as per need. Apart from the auditobservations, auditor will be required to indicate discrepancies / inadequacies in the system orprocedures so as to initiate steps for improving the system and making it more efficient. The audit teamwill also be required to educate the dealing staff so as to avoid repetition of routine procedural / technicalerrors.

Further, all other incidental/ necessary activities for the completion of audit & resolution of mattersarising during the audit ,shall be deemed to be included in the scope of services. In case of judicial

proceeding(s) initiated by MPPKVVCL, Indore, pursuant to the audit for the period, the auditor shallreasonably assist MPPKVVCL, Indore office by acting as a witness and providing evidences required asrelated thereto.



ANNEXURE-8

(DRAFT)

OVERALL AGREEMENT TERMS AND CONDITIONS

THIS AGREEMENT is made on _________

BETWEEN:

(1) MP Paschim Kshetra Vidyut Vitaran Company Limited (referred as “MPPKVVCL” or“Company” hereinafter) having its Head Office at Indore; and

(2) M/s______________________, Chartered Accountants/Cost Accountants (referred as the“Vendor” or “Firm” hereinafter) having its Head Office/Branch Office at Indore.

INTRODUCTION:

A. Whereas the MPPKVVCL wants the Vendor to provide certain “Appointment Of The charteredAccountant Firms as Internal Auditor for Audit of Corporate Office, MPPKVVCL, Indore ForThree Years“ related services (as outlined under the heading ‘Scope of work’ in the Tenderdocument, or mentioned herein under) and the Vendor is willing to provide such services all on the

terms and conditions set out in this Agreement.

B. And, whereas the Vendor has knowledge and experience in the provision of services in the area of “The chartered Accountant Firms as Internal Auditor for Audit of Corporate Office,MPPKVVCL, Indore For Three Years “ of companies of the size and type of MPPKVVCL, Indore. TheVendor acknowledges that MPPKVVCL has relied on such knowledge and experience in selecting theVendor to provide such services.

And therefore, IT IS AGREED as follows:

1. DEFINITIONS AND INTERPRETATION

1.1. In this agreement unless otherwise specified or the context otherwise requires:

1.1.1. where reference is made to a statutory provision this includes all subsequent enactments,

amendments and modifications relating to that provision and any subordinate legislationmade from time to time under it;

1.1.2. a “law” includes common or customary law and any bye-law, regulation, legislation, decree, judgment, order, ordinance, statute, treaty or other legislative measure in any jurisdictionor any present or future directive, regulation, request, requirement or guideline (thecompliance with which is in accordance with the general practice of persons to whom thedirective, regulation, request, requirement or guideline is addressed);

1.1.3. a document in an “agreed form” is a reference to a document in a form approved by bothparties and for the purposes of identification signed by the relevant AuthorisedRepresentatives on behalf of each party; and

1.1.4. reference to “the parties” or to “a party” will be to MPPKVVCL and/or the Vendor unlessotherwise expressly provided and shall include that party’s assignees;

2. TERM

2.1.This Agreement will come into force on the Signature Date and will, subject to the terms of thisAgreement, continue for a period till satisfactory completion of work “Tender for The AppointmentOf The chartered Accountant Firms as Internal Auditor for Audit of Corporate Office, MPPKVVCL,Indore For Three Years“from the Signature Date.

2.2.MPPKVVCL reserves the right to extend the term of agreement for a further period of one year, atthe same terms & conditions.

2.3.At any time during the Term, the parties may (in their absolute discretion) by mutual agreement,extend the Term by such additional period as they see fit and on terms and conditions substantiallysimilar to those included herein.

3. SERVICES

3.1.From the Service Start Date the Vendor shall provide the Services in accordance with the terms of this Agreement and Award(Work Order) and will ensure that with effect from the Service Start



Date, a team of persons is available to provide the Services. This team will as of the Service StartDate include the employees of the Vendor.

3.2.The Vendor agrees that it will follow and comply with any reasonable instructions, directions orrequests given or issued which are consistent with the terms of this Agreement by MPPKVVCL'srelevant Authorised Representative in writing or, where it was reasonably impracticable to do so inwriting, given orally and subsequently confirmed in writing by such Authorised Representative inconnection with the performance of the Services.

3.3.The Vendor shall as soon as reasonably practicable notify MPPKVVCL whenever the vendor

becomes aware of and has reasonable grounds to believe that any failure on the part of MPPKVVCLto carry out its obligations and responsibilities under this Agreement will have a detrimental effecton the performance or quality of the Services or cost (to MPPKVVCL). The same shall apply to thevendor also.

4. MPPKVVCL RESPONSIBILITIES

4.1. MPPKVVCL shall:

4.1.1. Use all reasonable endeavours to make available such staff of MPPKVVCL as are reasonablyrequired on a timely basis to liaise with the Vendor in relation to the provision of theServices;

4.1.2. Provide to the Vendor on a timely basis such information and documentation as the Vendormay reasonably require to provide the Services;

4.1.3. Provide the Vendor on a timely basis, taking into account MPPKVVCL 's standard policiesand procedures, with such access to the information as is reasonably required to providethe Services;

4.1.4. Provide answers on a timely basis to queries, consents and approvals requested by theVendor to enable the Vendor to provide the Services.

5. SERVICE LEVELS

5.1. The Vendor shall perform the Services in accordance with the Service Levels listed as part of thescope of services in the main letter.

5.2. If the Vendor fails to meet the Service Levels as per the scope of services, the Vendor shall assoon as reasonably practicable:

5.2.1. identify the cause of such failure;

5.2.2. take such action as is reasonably required to minimise the impact of the failure and toprevent it from recurring;

5.2.3. where possible, correct the failure; and

5.2.4. Advice MPPKVVCL, of the status of the remedial efforts being undertaken for meeting theservice levels as per scope of work.

6. CHARGES

In consideration for the provision of the Services, MPPKVVCL shall pay to the Vendor the Chargesas detailed in the Letter of Award.

7. INVOICING AND PAYMENT

7.1. The Vendor shall invoice MPPKVVCL for the Charges as laid out in the Letter of award (LoA) /workorder which shall be issued to the successful bidder firm.

7.2. The total fees payable for the assignment shall as per Clause-18 of the tender document.7.3. If MPPKVVCL receives an invoice which, acting in good faith, it reasonably believes is not correct,

valid and/or properly due or where MPPKVVCL, acting in good faith, otherwise disputes theappropriateness of such invoice, MPPKVVCL shall pay that part of the invoice which is not indispute in accordance and shall be entitled to withhold the balance pending resolution of thedispute and shall notify the Vendor in writing.

7.4. Notwithstanding anything contained in clause 7.1 to 7.3 above, whenever MPPKVVCL acting ingood faith, reasonably believes that the services provided by the vendor were not satisfactory, theMPPKVVCL shall have the right to wholly or partly withhold the payment or make appropriatedeductions from the invoice of the vendor.

7.5. In case of dispute on any invoice, the dispute resolution procedure, as outlined below, shall apply.



7.6. For avoidance of any doubt, it is herein specifically agreed that the Vendor's obligations to providethe Services shall in no way be affected by any dispute in relation to the Charges or paymentthereof.

7.7. Whenever under this Agreement any sum of money shall be recoverable from or payable by theVendor to MPPKVVCL, this may be deducted from any sum then due, or which at any time maybecome due, to the Vendor under this Agreement.

8. REGULATORY REQUESTS

8.1. If the Vendor receives requests for information from Regulatory Authorities which relate to theServices or any other obligation of the Vendor under this Agreement, it shall inform MPPKVVCL’sAuthorised Representative promptly in writing and shall provide reasonable assistance toMPPKVVCL in dealing with the requests.

8.2. The Vendor will only release such information to the Regulatory Authority after:

8.2.1. providing a copy of the information to MPPKVVCL; and

8.2.2. receiving MPPKVVCL’s written consent to the release,

8.3. Except that the Vendor shall not be obliged to obtain MPPKVVCL’s prior consent or provide a copyof the information in advance where it is prevented from doing so by law or the relevantRegulatory Authority.

9. FORCE MAJEURE

9.1. F o r c e Ma j e u r e Ev e n t means any event beyond the reasonable control of the affected party.Force Majeure Event includes, but is not limited to, acts of God, expropriation or confiscation of facilities, any form of government intervention, war, hostilities, rebellion, terrorist activity, local ornational emergency (including an emergency service to a hospital), sabotage or riots, and floods,fires, explosions or other catastrophes. Force Majeure does not include:

9.1.1. Strikes or other industrial action by employees of MPPKVVCL or the Vendor; or

9.1.2. Any act or omission of either party's employees, agents, or subcontractors (except to theextent that person is affected by a Force Majeure Event).

9.2. Neither party shall be responsible for failure to, or delay in, carrying out any of its duties underthis Agreement to the extent to which this is caused by a Force Majeure Event (as defined in

Clause 9.1).

9.3. Should a Force Majeure Event occur, the affected party shall:

9.3.1. Take all reasonable steps to overcome and mitigate the effects of the Force Majeure Eventas soon as reasonably practicable, including actively managing any problems caused orcontributed to by third parties and liaising with them;

9.3.2. On becoming aware of the Force Majeure event promptly inform the other in writing of thedetails and provides information of the Force Majeure Event and information about whichServices have been affected to the extent that such information is known, together with, if practicable, an estimate of the period during which the Force Majeure Event will continue;and

9.3.3. Notify the other as soon as it becomes aware that the Force Majeure Event has stopped.

9.4. If the Force Majeure Event continues for more than 15 calendar days, the unaffected party mayterminate this Agreement by giving 15 calendar days written notice without cost or liability to theother party (except in respect of antecedent breaches).

9.5. Nothing in this Clause-9 shall suspend MPPKVVCL’s obligation to pay the Charges in accordancewith this Agreement in respect of any portion of the Services provided by the Vendor toMPPKVVCL not affected by a Force Majeure Event.

10. EMPLOYEES of the VENDOR

10.1. The vendor would deploy persons for provision of the Services to MPPKVVCL ensuring that theyare suitably qualified, skilled and experienced in the work which they are to perform;

10.2. The Vendor will obtain the written approval of MPPKVVCL prior to appointing any replacement forany Employee of the Vendor (such approval not to be unreasonably withheld or unduly delayedby MPPKVVCL), except that the Vendor shall be able to replace any Employee withoutMPPKVVCL’s prior written approval where a Employee leaves the employment of the Vendor, isprevented from fulfilling his duties due to sickness or will no longer be involved in the Services



due to natural career progression. Save as otherwise agreed with the MPPKVVCL in writing, theVendor will, at its own cost and expense, use all reasonable endeavours to ensure that, wherepossible, the Employee who is being replaced imparts appropriate knowledge and experienceconcerning the Services to the replacement for the Employee.

10.3. Without prejudice to the provisions of Clause 10.2, before appointing a replacement for anyEmployee, the Vendor shall:

10.4. notify MPPKVVCL of the proposed appointment;

10.5. introduce the individual to appropriate representatives of MPPKVVCL (and, if reasonablyrequested provide an opportunity for MPPKVVCL’s Authorised Representative for Services tointerview the individual); and

10.6. provide MPPKVVCL ‘s Authorised Representative for Services with a resume and other informationabout the individual reasonably requested by MPPKVVCL (including, without limitation, asummary of such person’s expertise and previous experience);

AND the Vendor shall provide such replacement for any Employee as soon as reasonablypracticable.

10.7. The Vendor shall:

10.7.1. ensure that its persons engaged in the provision of the Services to MPPKVVCL are suitablyqualified, skilled and experienced in the work which they are to perform;

10.7.2. ensure that while any of its Employees are on MPPKVVCL’s premises they will conform toMPPKVVCL’s standard codes of conduct (including policies regarding occupational health andsafety requirements, building access, physical security and dress codes) or procedures ashave been communicated in advance to the Vendor in writing but only to the extent thatsuch compliance does not place the Vendor in breach of any other provision of thisAgreement.

10.8. MPPKVVCL may, for reasons of incompetence, poor performance or misbehaviour or any suchreason (MPPKVVCL at all times acting reasonably), request the replacement of any Employee of thevendor. MPPKVVCL shall notify the Vendor giving written reasons as why it is requesting areplacement to be made. MPPKVVCL and the Vendor shall promptly discuss any such request and, if the Vendor is unable to satisfy MPPKVVCL’s concerns within a time period of three days, the Vendorshall replace that Employee as soon as reasonably practicable, but not later than seven calendar

days in any case. The Vendor shall use reasonable endeavours to ensure that the Employee who isbeing replaced imparts appropriate knowledge and experience concerning the Services to thereplacement Employee. The Vendor shall not be excused from performance of its obligations underthis Agreement as a result of the replacement of any Employee.

10.9. The vendor is expected to provide services of the employees as mentioned in the para 7.1 of theRFP documents (Tender) on continuous basis on all working days. However, if any employee remainson leave the vendor must informs of such leaves in advance to the Director (F&A) or any officernominated by him, and alternate arrangement shall be made by the vendor.

11. CONFIDENTIALITY

11.1. Each party undertakes to treat all Confidential Information as confidential and to use suchConfidential Information solely for the purposes of this Agreement. Each party shall not, without

the prior written consent of the other, divulge such Confidential Information to any person.11.2. Each party undertakes to effect and maintain the same adequate security measures to safeguard

the Confidential Information from unauthorised access, use and misappropriation as it maintainswith its own similar information that it does not wish publicly to disclose, publish or disseminate.

11.3. Each party undertakes to notify the other promptly of any unauthorised use, copying or disclosureof Confidential Information and to provide all reasonable assistance required to terminate suchunauthorised use or disclosure (or both).

11.4. Neither party shall make any announcement about nor disclose the existence or any terms of thisAgreement without the prior written consent of the other. Notwithstanding the foregoing, eitherparty may advertise or otherwise make known that the Vendor provides services to MPPKVVCLpursuant to this Agreement without the prior written consent of the other party.

11.5. The foregoing obligations as to confidentiality shall remain in full force and effect notwithstandingany termination or expiry of this Agreement.

12. DISPUTES



12.1. This Clause does not prevent either party commencing or pursuing court proceedings to protectthe rights of confidentiality and in respect of the Confidential Information of that party and iswithout prejudice to either party's right to terminate this Agreement.

12.2. The Dispute will be dealt with by the parties pursuant to the following escalation procedures (the “Escalation Procedures”):12.2.1. In the first instance, the Dispute will be referred to the Director (Finance & Accounts) for

resolution;12.2.2. If the Director (Finance & Accounts) cannot resolve the Dispute within 15 Business Days

(or such other period as may be agreed between the parties), the Dispute will then be

escalated to the MD (MPPKVVCL);12.3. The parties acknowledge and agree that all disputes arising out of or in connection with thisAgreement (the “Dispute”) shall be dealt with in accordance with the procedure set out in theClause 11.2. For the avoidance of doubt, any communications between the parties arising out of or in connection with Clause 11.2 will be without prejudice and will be treated as confidential.

13. TERMINATION13.1. MPPKVVCL may terminate this Agreement in its entirety or as it relates to one or more discrete

parts of the Services on written notice with effect from the date specified in the notice if theVendor commits any material breach of this Agreement which in the case of a breach capable of remedy has not been remedied within seven calendar days of service upon the Vendor of awritten notice specifying the breach and requiring it to be remedied. For the purposes of thisClause, breach shall be capable of remedy if the Vendor can or will be able within the prescribedperiod of time to comply with the provisions in question in all material respects other than as to

the time of performance.13.2. In addition to any other rights it has under this Agreement, MPPKVVCL may terminate this

Agreement in its entirety, or as it relates to one or more discrete parts of the Services, at will,at any time after the expiry of the one month from the Signature Date, on giving the Vendor notless than one month’s written notice.

14. CONSEQUENCES OF TERMINATION

14.1. The Vendor acknowledges that it is critical for MPPKVVCL to have continuity of the Services. Toensure the orderly transfer of the Services either back in house to MPPKVVCL or to a ReplacementService Provider, MPPKVVCL relies significantly on the Vendor fulfilling its obligations under thisAgreement.

14.2. The Vendor is an independent contractor and nothing in this Agreement shall be deemed to

constitute a partnership or any employment relationship between the parties nor shall anything inthis Agreement be deemed to constitute one party the agent of the other for any purpose.

Other Terms & conditions as stipulated in Tender documents of Tender Specification No.MD/WZ/02/Audit/13-14/TS-02 /12713 Indore dtd: 07.06.2013 shall prevail.IN WITNESS WHEREOF each of the parties has duly executed this Agreement as of the date first writtenabove.

Witness

SIGNED by [ ] 1.)__________________________

duly authorised for and 2.)_________________________

on behalf of MPPKVVCL

SIGNED by [ ] 1.)_________________________

duly authorised for and 2.)__________________________

on behalf of the Vendor

Date:

TS-02_MD-WZ-02-Audit-13-14-TS-02-12713_07062013.pdf

Documents

Transcript of TS-02_MD-WZ-02-Audit-13-14-TS-02-12713_07062013.pdf