ODISHA HYDRO POWER CORPORATION LIMITED

A GOLD RATED STATE PSU

ODISHA STATE POLICE HOUSING CORPORATION BUILDING
Bhoinagar, Bhubaneswar-751022
Phone No. 0674-2542983, 2542802, 2545526, 2542826

NOTICE INVITING EXPRESSION OF INTEREST FOR APPOINTMENT /

EMPANELMENT OF CHARTERED ACCOUNTANT / COST ACCOUNTANT
FIRMS FOR INTERNAL AUDIT, STOCK AUDIT, PHYSICAL VERIFICATION
OF FIXED ASSET AND ANY OTHER ASSIGNMENT
Scope of Work & Period of Audit
The scope of work of Internal Auditor, Stock Auditor & Physical Verification of Fixed Asset is
attached as Annexure -1, which is indicative. The scope of work may increase depending upon
the requirement of works. The period of engagement shall be for two years which may be
extended for another one year depending on the performance of Audit.
Audit Team
The audit team should consist of adequate number of qualified / semi qualified Staffs led by a
senior partner (ACA / FCA / ACMA / FCMA) of the firm. Details may be furnished as prescribed
in Annexure -2.
Audit Fee:
The schedule of fee will be as follows:
i)

The present fee structure of OHPC is enclosed at Annexure -3 which is likely to be

revised w.e.f. 2013-14 and subsequently in every three years.

ii)

50% of the audit fees will be payable on completion of 1st phase Audit (six months) and the
remaining 50% will be payable on completion of 2nd phase Audit (rest six months) and
submission of final report.

iii)

The traveling and out of pocket expenses will be subject to production of documentary
evidence and as per TA / DA rules of the corporation.

iv)

Service Tax shall be paid extra as applicable on furnishing the registration number along
with proof of amount paid with the appropriate authority.

v)

The fees for Stock Audit & Physical Verification of Fixed Asset are to be paid after
submission of Stock Audit report & Physical Verification and Fixed Asset Report
respectively.

vi)

The payments shall be released by corporate office after receipt of performance report
from the unit finance head.

Minimum Eligibility Criteria:

1.

The firm should be a partnership firm and must be empanelled with C & AG and Institute
of Chartered Account of India (ICAI). (supporting documents to be enclosed).

2.

The firm should be a partnership firm and must be empanelled with the Institute of Cost
Accountants of India (ICAI). (supporting documents to be enclosed).

3.

The firms should have atleast 7 years experience as Internal / Statutory / Stock Auditor
with minimum 3 years experience in Power Sector PSUs. (supporting documents to be
enclosed).

4.

The average annual turnover of the firm during the last three financial years must not be
less than Rs.5 (Five) lacs. (supporting documents to be enclosed).

5.

The Firm must be registered under Service Tax Act and provide Service Tax Regd.
Number.

6.

The firm must be registered under Income Tax Act & provide PAN Number.

7.

In case a firm does not qualify under Sl.No. 3 above on its own strength in such case they
can form a consortium with a firm having the requisite criteria including Sl. No.3 and apply
for the purpose.

8.

The partners having experience in power sector shall be considered as an added

advantage.

Selection and Award Criteria.

The weightage for selection and award of the work will be done based on the overall suitability
of the firm having experience of audit in Power Sector PSUs and strength of partners / qualified
or semi qualified staffs. The firm having its office at Bhubaneswar and / or nearby areas of
power house may be given preference.
Other Terms & Conditions:
The appointment of auditors is subject to the following:
i)

The Audit firm must not subcontract the work.

ii)

The audit team will work in strict confidence and will ensure that the information in respect
of the operation of the area unit is dealt in strict confidence and secrecy. A certificate
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towards maintaining confidentiality to be provided by the Auditor before commencement of

audit.
iii)

No partner of the Auditors is related to CMD / whole time Director or part time Independent
Director of the company within the meaning of Section 6 of the Companies Act, 1956.

iv)

Neither the firm nor its partner or associates have any interest in the business of the
company.

v)

The Audit Firm will be debarred from getting the Internal Audit, Stock Audit or Fixed Asset
verification in future in OHPC in the following cases.
a.

If the firm obtains the appointment on the basis of false information / false
statement.

b.

If the firm does not take up audit in terms of appointment letter.

c.If the firm does not submit the audit report, complete in all respects in terms of
appointment letter.

vi)

d.

If the Firm violates any of the stipulation from (i) to (iv).

e.

If the performance of audit is found to be unsatisfactory as reported by the units.

The offer should be submitted strictly as per terms and conditions laid down in the
document. Application documents duly sealed and signed are to be submitted as a token
of acceptance of all terms & conditions. All envelopes must be sealed and super scribed
mentioning Appointment / Empanelment of Internal Audit, Stock Audit & Fixed Asset
verification.

vii)

Application received after the due date and closing time of submission of applications shall
be ignored. Any application received late due to any reason whatsoever will not be
accepted.

viii)

Jurisdiction of courts: Any dispute arising out of or in respect of the contract will be subject
to the jurisdiction of the High Court of Odisha, Cuttack only.

ix)

Disclaimer : OHPC reserves the right to accept or reject any or all responses and to
request additional submission or clarifications from one or more Appointment(s) at any
stage or to cancel the process entirely without assigning any reason.

Annexure-1
Scope of Work
A.

Internal Audit

The objective of internal audit is to review the accounting and internal control system as a
service to the Company. The functions of Internal Audit interalia include examining, evaluating
and reporting to the Management on the adequacy and effectiveness of components of the
Accounting and Internal Control System. The scope of coverage shall include examination of
the economic effectiveness of operations including non-financial control system in the
organization, which the management may modify during the course of Audit.
The broad scope of work is as under:
a)

To verify the awarding of contracts in respect of Civil, Electro Mechanical and

Infrastructure Works including variation orders / amendments thereto and accounting for
the expenditure there against. Major and important activities including pre and post award
procedures of contracts are required to be audited in detail. In addition, all the contracts
above Rs.5.00 lacs either awarded or executed during the year are to be reviewed and
analysis of the same is to be submitted along with the Report. The applicability of Service
Tax to the Works Contracts awarded needs to be examined.
Some of the major and infra work contracts have been completed but due to certain
formalities, the same could not be closed due to which security deposits, retention money
and liabilities are to be settled / cleared. Audit report should include a para on the same
mentioning the latest status and the reasons / issues due to which the closure of contracts
is pending.

b)

The audit should cover the generation detail of electricity, its reporting to Regulatory
Authorities as well as Commercial Deptt of the Corporation for raising the bills. It should
also look into major differences, if any, between the figures reported and bills raised /
sales booked.

c)

Audit should verify timely raising of correct bills, in terms of OERC guidelines and power
purchase agreement.

d)

Review the proper and correct maintenance of Sundry Debtors Ledger for bills raised,
amounts realized and the balance outstanding.

e)

To check the investment of surplus funds as per the guidelines issued by the Govt. from
time to time and raising short term loans depending on exigencies and their repayments.

f)

To monitor and report on implementation of the Internal Audit Manual and Accounts
Manual.
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g)

To review the formulation of budgets both capital as well as revenue, approval, source of
funding vis--vis the amount spent there against and the accounting & reporting thereof.
The report should point out any major deviations requiring re-appropriation / re-allocation
of funds provided in these budgets. The report should also contain the Budget provisions
vis--vis the actual achieved and the reasons for variance.

h)

The audit team should include at least one technically knowledgeable person in
power generation industry and one member should also be a Senior Auditor / Audit
Manager. The technical audit should above the monitoring of progress of work as
per contract agreements, critical path, if any, and views of the auditors on the same.

Apart from the above, audit should also cover all the other activities like Finance, Power House
& Dam Maintenance, P & A (including Workshop & Transport Deptt.), Stores, Legal, R & R,
Corporate Planning, Administration, Income Tax and any other works as advised by the
management.
Some of the other areas are elaborated and detailed as under:
1.

Statutory compliance and Internal Controls:

To ensure compliance of Companies Act, 1956 with particular reference to the accounting
functions and the Accounting Standards & Guidance Notes issued by the Institute of
Chartered Accountants of India from time to time and also other statutory provisions
applicable to the company. To assist and advice the company in formulation / revision of
accounting policies and in establishing proper accounting practices and procedures as per
the changing needs.

2.

Works Accounting
(i)

To verify and scrutinize payments to contractors with reference to respective

contracts and adjustment thereof while accounting for the work done by them and
ensure that deductions in respect of Mobilization Advance etc. and statutory
deductions are correctly made from their bills.

(ii)

The internal auditor should check that adjustments for returns, shortages, damages
and unserviceable stores and materials at sites are properly made.
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(iii)

The internal auditors should check that various Statutory Tax Returns Should be
timely filed with the Tax Authorities and also verify the facts and figures given in the
Tax Returns.

(iv)

Review of terms and conditions of tender documents and agreements, verification

of Bank guarantee and specific emphasis to be given on final payments.

(v)

To plug loopholes, which might have crept in the system due to passage of time and
complacency on the part of persons particularly engaged in financial concurrences,
release of payments, updating accounting records, authorizations as per DoP etc.

(vi)
3.

To verify the Bank Guarantee issued by suppliers / contractors and its validity.

Capital work-in-progress and capitalization

(a)

Work-in-progress should be verified by the internal auditors with reference to field

records such as Interim Payment Certificates and certification of progress issued by
the EIC. Quantum of work-in-progress recorded should be compared with work
orders / contracts and subsequent approvals for variations, to ensure that payments
are duly authorized.

(b)

To verify capitalization of assets and accounting of capital expenditure (including

expenditure incidental to the construction) and its further distribution on the specific
assets as per Accounting Policy of the company for capitalization.

4.

Fixed Assets :
To verify that proper records of assets of the company are maintained as per requirements
of CARO, 2003 as am ended by Companies (Auditors Report) (Amendment) Order, 2004,
issued by the Government of India in terms of sub-section (4A) of Section 227 of the
Companies Act, 1956.
Review the system regarding accounting, custodianship and safeguarding of monetary
and non-monetary assets of the corporation and to see that the assets of the company are
reasonably and adequately protected against loss. Also check that the transfer / sale of
each asset is immediately and properly accounted for. Also check the applicable
depreciation rates and calculation of depreciation.
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5.

Scrutiny of Bank Transactions & Reconciliation:

(a)

Scrutiny of Bank Transactions

To verify that cash (wherever applicable) & bank transactions are recorded properly
and surplus funds, if any, shall be kept in short terms / flexi deposits with the banks
as per companys Investment Guidelines. Entries in the deposit statement should
tally with the term deposit certificates. Also to verify that interest on deposits and
TDS thereon has been correctly calculated and accounted for in the books of the
Company. Also review the stale cheques, if any.

(b)

Bank Reconciliation :
Verify the Bank Reconciliation Statements of various Bank Accounts and report for
old / unadjusted requiring special attention.

6.

Vouching :
To verify all accounting transactions so as to ensure interalia that bookings have been
made to the appropriate heads of accounts.

7.

Ledger Scrutiny:
Scrutiny of trial balance, groupings, General Ledger, subsidiary records, review of sundry
debtors, creditors and loans and advances outstanding for more than one year and ensure
that CWIP of the project is accounted for correctly.

8.

Store transactions and valuation thereof:

To verify the vouchers pertaining to stores receipts, issues and the valuation thereof. The
coverage shall include purchases of stores and scrap disposal on test basis. The internal
auditor while verifying these transactions shall evaluate internal control procedures
operative within the enterprise for efficient materials management.

9.

Verification of secured / unsecured advances and securities given / received on behalf of

the company:
(i)

Documents / agreements relating to secured & unsecured advances to parties /

Govt. Bodies shall be verified on test basis.

(ii)

The scope includes verifications of securities deposited by the company with

different authorities / parties. The internal auditor shall check and examine the
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purpose and the duration of such deposits and whether the deposit certificates are
in safe custody for presentation at the time of claiming refund. Security deposit
received from the parties shall also be verified to ensure that the company beyond
prescribed period does not retain these.
10.

Income Recognition:
To verify that income recognition is being made in conformity to Accounting Policy /
procedure and the transactions are recorded accordingly.

11.

Strengthening of internal Control System ;

To identify weaknesses in controls which can lead to frauds and report the same to the
management for timely corrective actions.

12.

Other matters :
To examine that :
(i)

The authorities at every level are being strictly adhered to as per DoP.

(ii)

The expenditure are sanctioned and booked as per the authorization.

(iii)

All important documents including term deposits, tax returns, bank guarantees,
cheque books etc. are kept under safe custody.

(iv)

There is a proper mechanism that the bank guarantees are extended well before
the expiry dates.

13.

Keeping in view the above requirements, internal auditors are also required to contribute
for following activities:

Helping in rectification of errors and omissions observed in the course of audit.

Guiding in location of difference in Bank Reconciliation and proper control over

banking transactions.

Review and guidance in the finalization of accounts.

Online scrutiny of TDS deductions from payments made to contractors / suppliers

and consultants.

Advising on statutory requirements of the companies Act, Accounting Standards and

other various taxation laws.

To report any other matters coming to notice during verification in order to strengthen
internal control system and for improving MIS.
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Review of liabilities and provisions.

Proper accounting of expenditure and incomes accruing to the enterprise and

adherence to matching principle.

14.

Review the system for intangible assets assessment and impairment of assets.

Review the adequacy of the insurance cover for the various risks involved.

To verify that all moneys received are accounted for.

(a) Insurance and other claims lodged by the company:

Internal auditor while verifying insurance and other claims of the company should see
that losses to the company giving rise to claims are properly lodged and proper follow
up action is taken for realization of overdue claims and the claims are properly
accounted for after settlement.
(b) Claims lodged against the company :
Internal auditor while verifying claims lodged against the company should ascertain
that the passed claims are with the approval of Competent Authority and are properly
accounted for after settlement.

15.

Employee payments :
To verify that accounting for salary and benefits admissible to employees and directors are
being done properly and all subsidiary records for loans / advances and other deductions
related to employees are reconciled properly. Requirements of AS 15 should be complied
with.

16.

Consultancy Services: Review the terms and conditions of all consultancy contracts and
report the debtors position in case the same are overdue.
The internal auditors are required to issue drafts paras for verification of facts and figures
before putting in the reports and also discuss conclusions and recommendations with the
officer in-charge of the office and final report shall be drawn after giving due consideration
to the explanations offered.
The Internal Audit shall be conducted half yearly. The 1st half report (1st April to 30th
September) shall be submitted by 30 th October and the 2nd half (1 st October to 31 st March)
shall be submitted by 30th April positively in order to meet the companys target regarding
successful drawl of annual statement of P & L Account and Balance Sheet. Accordingly,
they shall submit their plans & programs in advance to enable the management to take
appropriate steps for finalization of various tasks as per pre-decided matching schedule.
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B.

Scope of Stock Audit

1.

The Stock Auditor should physically verify all the inventories lying in different stores
including site store.

2.

To reconcile the store ledger with Accounts ledger both in quantity and value and
suggest for rectification entry if any.

3.

To verify the stores consumption both in quantity & value and its proper accounting.

4.

The auditor while verifying the transactions shall evaluate internal control procedures
operative within the enterprise for efficient materials management.

5.

To verify the scraps and its Proper accounting.

6.

To submit the reconciliation statement of stores with accounts.

7.

To submit the final report by 30 th April.

C.

Scope of physical verification of Fixed Assets

1.

To verify that proper records of assets of the company are maintained as per
requirements of CARO 2003 as amended by companies (Auditors Report) Amendment
order 2004 issued by GoI in terms of sub-section (4A) of section 227 of the Companies
Act, 1956.

2.

To physically verify all the fixed asset and reconcile with General Ledger.

3.

To comment on the system regarding accounting, custodianship and safeguarding of

monetary and non-monetary assets of the corporation.

4.

To see that the assets of the company are reasonably and adequately protected against
loss.

5.

To check that the transfer / sale of each Asset is immediately & properly accounted for.

6.

To check the applicable depreciation rates and calculation of depreciation.

7.

To check whether the assets are impaired or not and submit a certificate that there is no
impairment of Asset.

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Annexure -2
Format of the offer
1.

Name of the Audit Firm/Consortium Firm

2.

Address

i)

Permanent Address

ii)

Correspondence Address

iii)

Telephone Number

iv)

Fax Number

v)

Email Address

vi)

PAN Number

vii)

Service Tax Regd. No.

Sl. No.
1.

2.
3.

4.

5.(a)
5(b)
6.
7.

Particulars
Year of establishment & registration of
Firm(s)
Average Annual Turnover of the firm in
the preceding 3 Financial Years
Number of partners in the firm
Number
of
qualified
assistants
(Chartered / Cost Accountants) in the
Firm. He should be a member of his
respective institute.
Number of semi qualified assistant (Inter
Chartered /Cost Accountant) in the firm
and relevance and quality of the
Methodology of execution of work
Types of Audit conducted in State/
Central power sector PSUs.
Types of Audit conducted in other
State/Central PSUs.
The address of the office / branch near to
HQ of OHPC & near by power stations.
Date
of
Partnership
deed
with
Registration Number.
Copy of consortium agreement

Name

Institute

Membership
No

8.
Note :
1. Documentary evidence of all the information as stated above are to be furnished along
with the offer.
2. All the pages of the terms & conditions and documents submitted are to be signed with
the seal of the firm.
3. In case of applicants through consortium, the consortium agreement should form a part
of requisite document.

(Sign. & Seal of the Partner of the Firm)

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Annexure-3

Fees for Internal Audit / Stock Audit / Physical verification of

Fixed Assets
Category A
UIHEP(M)
BHEP
HHEP

40,000
40,000
40,000

Category B
UKHEP
RHEP

36,000
36,000

Category C
CHEP
UIHEP(K)
Corporate Office

32,000
32,000
32,000

In addition to the audit fees, the out-station auditors shall be paid traveling allowance
and daily allowance as applicable to E6 grade for partners and E3 grade for the
assistant according to the applicable TA rules of OHPC, subject to a limit of Rs.30,000/-.

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