Tender for Appointment of Internal Auditors
for the F Y 2018-19
Hutti Gold Mines Co Ltd
May
2018
THE HUTTI GOLD MINES COMPANY LIMITED, HUTTI
1. INDRODUCTION
1.1 The Hutti Gold Mines Company Limited (HGML), a Government of
Karnataka Undertaking has the unique distinction of being the only primary
producers of gold in the country. The corporate office of the Company is at
Bangalore and gold extraction plants at Hutti. HGML has been active in the
process of exploration, development and exploitation of gold deposits
occurring in Karnataka.
1.2 At present the company on an average extracts 2 metric tonnes of gold per
year. The extraction capacity of gold may be increased to 3 tonnes in the
next 2 years' time. HGML has huge reserves of gold and may take up
further expansion in future.
1.3 Location of the Mines : Lingsugur Taluk, Raichur Dist, Karnataka State
Distance : 480 KM North of Bengaluru
300 KM Southwest of Hyderabad
80 KM West of Raichur
20 KM Northeast of Lingsugur
Railway Station : Raichur, south Central Railway 80.km
History of Mining : a) Ancient Mining 2000+ years old
(Pre-Ashokan era)
b) Modern Mining Main Mine during
Nizam's period (1902 -1918)
c) Modern Mining Rediscovery of parallel
Lodes and Mining from 1947 onwards.
Present Mine Depth : 26th Level, 842 Metres
1.4 The Company has four major Departments which play main roles in
extraction of primary gold.
Mining Department
Exploration Department
Metallurgical Department
Engineering Department
1.5 Performance of the Company during last 3 years:-
(Rs. in lakhs)
Particulars FY 2015-16 FY 2016-17 FY 2017-18
(Provisional)
Production
a) Ore treated (MT) 548237 569087 568692
b) Net recovery grade 2.39 2.78 2.88
c) Gold produced (kgs) 1310.00 1579.72 1639.52
Income / Turnover 43971.73 47882.46 50265.35
Profitability 632.76 3077.09 3960.75
1.6 Disclaimer
This Tender Document is not an agreement and is not an offer or
invitation by The Hutti Gold Mines Co Ltd (HGML) to any party other
than the one that qualifies to submit the Bid. The purpose of this
Tender Document is to provide information to the potential bidders to
assist them in responding to this Tender Document. Though this Tender
Document i s prepared with sufficient care to provide all required
information to the potential bidders, they may need more information
than what has been provided in this document. In such cases, the
potential bidder is solely responsible to seek the information required
from HGML. HGM L reserves the right to provide such additional
information at its sole discretion. In order to respond to the tender, if
required, and with the prior permission of HGML, each bidder may
conduct his own study and analysis, as may be necessary.
HGML makes no representation or warranty and shall incur no liability
under any law, statute, rules or regulations on any claim the potential
bidder may make in case of failure to understand the requirement and
respond to the Tender document. HGML may, in its absolute
discretion, b ut without being under any obligation to do so, update,
amend or supplement the information in this Tender Document.
2.0 SCOPE OF WORK:-
HGML being the only primary producers of gold in India intends to
appointment Internal Auditors under section 138 of the Companies Act
2013, for the F.Y.2018-19. Scope, extent and coverage of audit of Hutti
(including projects i.e. Uti & Heerabuddinni), Chitradurga and
Registered Office Bengaluru is mentioned below,
Underground
· Review and verification of incentive payments including
calculations , thresholds etc.,
· Review and check of awards and incentives
· Review of production records including operating efficiency of
ore hoisting
· Review of ore stock records
· Verification and reporting of consumption of major inputs, in
comparison with standards
· Utilization of major Machinery & equipment
Metallurgy
· Review and check of Gold Bar Books
· Review and check of Monthly Gold Production
Records/dispatch/stock & sales reconciliation with Finance
records
· Review and check of smelting Records
· Check of Cyanide Consumption and Gold Production Registers
· Consumption of Grinding media balls& Liners with reference to
standards / norms
· Review and check of recovery of gold
· Review of monthly reports regarding the Ore treated, concentrate
and cyanide gold recovered with reference to all relevant registers
maintained at the Units
· Monthly review of operating efficiency of ore processing
· Review and verification of new Refinery Unit
· Review and verification of incentive payments including
calculations , thresholds etc.,
· Review and check of awards and incentives
· Review of production records
Engineering
· Review the cost of the power, generation of electricity, and
compare with purchase of power from outside agencies.
Reconciliation with finance records
· Review of utilization of machinery and to report on idle
machinery
· Review of installation and commissioning of machinery
· Review of contracts entered into with various parties in respect of
transport of mine ore from several mine heads and to ensure that
the payments are made in accordance with the contract and that
the penalty is levied as per the terms agreed into. Reconciliation
with finance and purchase records
· Review of utilization of fleet of vehicles, comparison of cost of
operation vis-a-vis contract transportation
· Checking of Vehicle Log books and consumption of fuel
· Operating efficiency of ore Manpower deployment for various
works / departments
· Review and verification of incentive payments including
calculations , thresholds etc.,
· Review and check of awards and incentives
Purchase / Stores
· Review the system of purchases, listing of vendors, vendor rating,
system of preparation of comparative statements
· Review of purchase files relating to capital equipment and other
materials
· Review of slow-moving / non-moving / unserviceable / obsolete /
surplus stores.
· Audit of all purchase vouchers
· Physical verification of stores
· Review of Inventory control
· Review of issue of stores
· Review of timely recovery of advances. Reconciliation with
finance records
· Review of contracts entered into with various parties in respect of
transport of mine ore from several mine heads and to ensure that
the payments are made in accordance with the contract and that
the penalty is levied as per the terms agreed into
· Consumption of major inputs such as steel items, cements
· Materials issued to other units and reconciliation
Finance
· Review of monthly operational cost sheets and to report reasons
for wide variations
· Review the expenses incurred and apportion/accounting on the
development of each section of mine
· Audit of all cash and bank payments
· Audit of journal vouchers
· Checking of payments against weekly release of funds from Regd.
Office
· Check of postings in general ledger and other related records
· Audit of all claims receivable, analysis, and age wise details
· Inter-unit accounts (i.e. RO, CGU, HB, UTI & Projects)
· Audit of Salary, TA and other benefits to employees
· Compliance with various Statutory Laws like Sales Tax, Income-
tax and other laws
· Review of Income-tax deduction and their remittances
· Checking of Bank Reconciliation and other Reconciliation
statements
· Review of cost records
· Review of Cash Management
· Review of Budgetary Control system
· Review of Insurance
· Review of Advances paid to suppliers and others
· Review of Significant Account Policies with respect to
maintenance of Books of Accounts and advises thereon
· Review of classification of expenses.
· Review of compliance of mandatory Accounting Standards &
Ind.AS.
· Review of Statutory and C&AG observations pertaining to
previous year and suitable advise for compliance including
disclosure , accounting treatment etc.,
· Review and advise on tax-planning
· Review and reconciliation of all tax related accounts.
· Review of purchase entries relating to capital equipment and other
materials
· Review and check of payment of Ex-gratia& reconciliation
· Review of Suppliers, contractors, consultants and hospital ledgers
· Review the cost of the power, generation of electricity, and
compare with purchase of power from outside agencies&
reconciliation
· Review and check of Monthly Gold Production
Records/dispatch/stock & reconciliation
· Imports, CVD, ED, CENVAT, VAT , Input Tax Credit, Entry tax
provisions pending issues
· Review of implementation of GST
· System Audit (EDP Audit) & its effectiveness.
Human Resourses
· Review and check of Welfare Expenses
· Review and check of payment of Ex-gratia& reconciliation.
· Pre-paid advances and recoveries
· Festival advance records
· Time office records
· Grants, Donations paid from HGU
· Employee service cards, annual increments, allowances, DA/IDA,
Bonus, PLIB
· Leave records, discipliner cases
· Court cases, RTI records
· HGML hospital records, expenses
· Medical referrals
· Procurement of drugs, issues of medicines to employees
· Stock of medicines and procedure of disposal of time-barred
medicines
· Review of employee institute, officers club, cricket club, Guest-
house, Canteen, other institutional records and activities. Revenue
collection and expenditure
Security Department :-
· Deployment and utilization of man-power
· Booking and payment of overtime, Sunday incentives, and
allowances
· Materials and equipment records
Common for All Departments of HGU
· Review system of booking of labour / idle labour.
· Physical verification of fixed assets.
· Compliance audit of procedures.
· Checking of consumption of stores, spares and other components,
vis-a-vis standards
· Review of Internal Control and Internal Check procedures and
comments regarding adequacy and strengthening measures if
required
· Review of financial follow-up, security and vigilance.
· Review of implementation of suggestions.
· Review of Delegation of Powers , deviations from delegations if
any.
Chitradurga Wind Farm Unit
· Review of windmill operations and efficiency
· Review of wind power sales to BESCOM
· Review of Sale of COT
· Review of O & M, other contract / purchase files.
· Review of attendance / leave records, overtime / Sunday booking
& other miscellaneous payments to employees and contractors /
suppliers & professionals.
· Review of Cash / Bank Books, BRS, Inventory / fixed asset
register.
· Review of Statutory Deductions / Remittances
· Review of General / Sub-Ledger
Heera-Buddinni Gold Project
· Review of General / Sub-Ledger
· Review of attendance / leave records, overtime / Sunday booking
& other miscellaneous payments & allowances to employees.
· Verification of production records
· Review & verification of utilization of man power, machineries &
efficiency.
UTI Gold Project
· Review of General / Sub-Ledger
· Review of attendance / leave records, overtime / Sunday booking
& other miscellaneous payments & allowances to employees.
· Verification of production records
· Review & verification of utilization of man power, machineries &
efficiency.
Projects
· Review & verification of on-going capital works at HGU, Heera-
Buddinni, UTI Gold Project & Chitradurga units.
· Procurement / implementation of capital equipments and works as
per approved capital budget
Registered Office, Bengaluru
· Review of General / Sub-Ledger
· Review of Sale of Gold / Silver
· Review of CSR (Corporate Social Responsibility)
· Review of attendance / leave records, overtime / Sunday booking
& other miscellaneous payments to employees and contractors /
suppliers & professionals.
· Review of Cash / Bank Books, BRS, Inventory / fixed asset
register.
· Review of Statutory Deductions / Remittances
· Review of Fixed Deposit register.
Deliverables:-
Quarterly Audit reports
3.0 INSTRUCTIONS TO BIDDERS
The Bidder is required to submit Covering Letter in Form No. 1.
Following are the guidelines for bidders to submit Technical and
Financial Bids for this assignment.
3.1 Bid Formats:
The bid shall consist of two parts i.e. Technical bid & Financial bid.
The Technical bid shall contain all the documents and
declaration/information with respect to compliance with pre-
qualification criteria as per Form No. 2.
3.2 Technical Bid:
The technical bid document shall include specific responses
addressing the requirements described below:
1. Understanding of Hutti Gold Mine's needs.
2. The bidder's organization profile
3. Relevant Experience of the firm.
4. The curriculum vitae of key team members to be associated with
this study.
Note 1: Documentary evidences are to be submitted towards all the
experiences claimed and clearly highlighting the relevant
part in the document.
3.3 Financial Bid:
The Financial quote shall not be part of technical bid. The total
amount /fees including TA/DA, out of pocket expenses and all taxes
and duties shall be entered in the e-portal, financial bid approval
format.
3.4 Others:
The company will arrange free of cost for the boarding and lodging at
its mine sites.
4.0 MANDATORY ELIGIBILITY CRITERIAS
The following are the essential qualifying criterias' for the firms to
qualify in Technical Bid.
1) The firm should have been registered with the Institute of Chartered
Accountants of India or the Institute of Cost Accountants of India.
2) The firm should have at least 3 Chartered / Cost Accountants as its
partners
3) One of the partners should be a fellow member of the Institute
of Chartered Accountants of India or the Institute of Cost
Accountants of India.
4) The firm should have carried out Internal Audit work in any state
PSUs in Karnataka at least for one year during the previous 3
years.
5) The firm shall have minimum personnel strength of 5 assistants /
article assistants
Note: Documentary evidences are to be submitted towards compliance
with Mandatory qualification criterias along with the technical bid.
5.0 EVALUATION CRITERIAS
5.1 Stage 1: Technical Evaluation
Stage 1 evaluation will be taken up for those bidders who have
submitted b i d t h r o u g h e - p o r t a l . The bid will be scrutinized
with respect to the mandatory eligibility requirements. Only
those bids who meet all the eligibility requirements shall be
considered for further evaluation. The details of these
parameters are given in Form No-2 (Technical Bid). Financial
bid shall be opened for only those bidders, who qualify
technically as per the Technical Bid.
5.2 Stage 2: Financial Evaluation
Bidders who qualify in stage 1, their financial bids shall be
opened. The lowest bid amount as per e-portal, among the
technically qualified bidders shall be taken for further
consideration,
The amount to be entered in the e-portal financial bid shall be
inclusive of all charges, fees, expenses, TA/ DA & out of pocket
expenses and applicable taxes. The amount entered in the e-portal
shall be final and binding.
The assignment/audit work shall be awarded after evaluation of
the financial Bid.
6.0 OTHER TERMS AND CONDITIONS
6.1 HGML's right to accept/ reject the bids
Notwithstanding anything stated in the Tender Document or in
any related correspondence, HGML reserves the right to accept
or reject any Bid. It also reserves the right to cancel/annul the
bidding process and reject all Bids at any time before the award of
the Contract, without assigning any reason and thereby without
incurring any liability to the affected bidder or bidders or any
obligation to inform the affected bidder or bidders of the grounds
for HGML's action/decision.
7.0 FAILURE TO ABIDE BY THE CONTRACT
The bidder is expected to strictly adhere to the terms specified in this
Tender document as well as the LOI. Any violation of any of the terms
could lead to immediate termination of the Contract at the risk and cost of
such bidder without prejudice to the rights of HGML with such penalties as
specified in the Tender Document and the LOI.
8.0 TERMS OF PAYMENT
HGML will release payments for execution of the Assignment based
on milestones of work completion as indicated in APPENDIX - 1.
9.0 CONFLICT OF INTEREST
Neither the selected firm nor any of the firm's personnel shall engage
in any personal business or professional activity which conflicts or could
conflict with any of their obligations in relation to this project. The key
members mentioned in the Tender document shall not be changed in any
circumstances w i t h o u t t h e p r i o r a p p r o v a l o f t h e H G M L . F ailure
to comply, the HGML will have the right to cancel the Contract at the risk
and cost of such bidder without prejudice to the rights of HGML.
10.0 PRICE VALIDITY
The price quoted by the bidder should be valid for 90 days from the tender
due date.
Form 1: Cover Letter
To Date:
The Deputy General Manager (Materials),
Hutti Gold Mines Co Ltd.,
Hutti-584115
Sub: Tender for Assignment of Internal Audit of HGML for the F.Y.2018-19
Dear Sir,
1. We, the undersigned, after having examined the terms and conditions mentioned
in the tender document, submit our technical & financial proposals for the above
tender.
2. We have read the provisions contained in the tender document and confirm that
these are acceptable to us.
3. We further declare that additional conditions, variations, deviations, if any, found
in our proposal shall not be given effect to this tender.
4. We hereby declare that all the information and statements made in this
proposal are true and accept that any misinterpretation contained in it may lead to
our disqualification and without prejudice to other remedies available to HGML
Authorized Signatory (in full and initials):
Name and title of signatory:
Duly authorized to sign this Proposal for and on behalf of [Name of Consultants]
Name of Firm:
Address:
Form - 2
TECHNICAL BID
Sl. Mandatory Criterias Yes/No Required
No. (To be Documentary
filled by the Evidence
Firm)
1 The firm should have been Certified copy of the
registered with the Institute of Registration / certificate
Chartered Accountants of India or of incorporation
the Institute of Cost Accountants of
India.
2 The firm should have at least 3 Certificate of
Chartered / Cost Accountants as its Registration.
partners
3 One of the partners should be a Certificate issued in
fellow member of the Institute of this regard
Chartered Accountants of India or
the Institute of Cost Accountants of
India.
4 The firm should have carried out Names of the companies
Internal Audit work in any state with copies of work
PSUs in Karnataka at least for one orders.
year during the previous 3 years.
5 The firm shall have minimum Curriculum Vitae in
personnel strength of 5 assistants / brief.
article assistants
(A) - The technical bid document should include specific responses addressing the
requirements described below:-
1. Understanding of Hutti Gold Mine's needs.
2. The bidder's organization profile
3. Relevant Experience of the firm.
4. The curriculum vitae of key team members to be associated with this assignment.
Note 1: Documentary evidences are to be submitted towards all the experiences
claimed and clearly highlighting the relevant part in the document.
(B) - Credentials related to the works / assignments completed/continuing for last
3 (Three)years.
Sl. Name of the Contacting Scope of Year of Value of Period of
No. Client/ person of Services services Assignment Completion
Organization with Client Provided provided (INR) of
Address with by Bidder Assignment
telephone
Number
(C)- Qualifications and Experience of Key Personnel to be associated with the Assignment:
Particulars Professional No.1 Professional No.2
Name and Designation
Experience / Work History
Educational / Professional Qualification(s)
Expected Nature of Involvement (Specific
roles / activities Full time/ part time
Appendix - I
Terms of Payments
The following schedule will be adopted for the payment of fees:
Schedule of
Milestones
Payment
1) Submission of first 2 quarterly Internal Audit report. 50%
2) Submission of balance 2 quarterly Internal Audit 50%
Report and clearance from Audit Committee of
HGML
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