yash sip

Preface

The term ROLE OF FINANCIAL CONCURRENCE implies that financial manager has an eminent role to play in an organization and is concerned with the creation of harmonious working relationship among organization and external parties .Financial management has gained importance since professionalization of management is now regarded at most for the successful running of business. Finance department has to look after the financial affairs to evaluate the actual expenditure incurred by an organization and minimize the cost.

This report has been prepared keeping in view that it will be a guide to know the financial climate in NMDC.BIOM ,KIRANDUL COMPLEX.

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1. INTRODUCTION TO THE ORGANISATION

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1.1 INTRODUCTION

In 1940s and 1950s, a Japanese team came to Kirandul to verify the quality of Iron Ore (Hematite) Later on, National Mineral Development Corporation Limited, with help of Japan set up the first iron ore plant in Kirandul (Deposit 14) good.

Incorporated in 1958 as a Government of India fully owned public enterprise. NMDC is under the administrative control of the Ministry of Steel, Government of India.

Since inception involved in the exploration of wide range of minerals including iron ore, copper, rock phosphate, lime stone, dolomite, gypsum, bentonite, magnetite, diamond, tin, tungsten, graphite, beach sands etc.

India's single largest iron ore producer and exporter, presently producing about 30 million tons of iron ore from 3 fully mechanized mines viz., Bailadila Deposit-14/11C, Bailadila Deposit-5, 10/11A (Chhattisgarh State) and Donimalai Iron Ore Mines (Karnataka State) which are awarded ISO 9001-2000 certification.

NMDC has the only mechanized diamond mine in the country with a capacity of 1.00 lakh carats / annum at Panna (Madhya Pradesh State). The mine remained non-operational since 22.08.2005 as per the directives of MP Pollution Control Board. The issues have now been resolved and Subsequently Panna Diamond Mine of NMDC, the only mechanized diamond mine in Asia, has been revived with the Hon’ble Supreme Court of India granting permission. Hon’ble Union Minister for Steel Sri Virbhadra Singh has rededicated the project in the service of the nation on 21st August 2009.

Strong back up of an ISO 9001 certified R&D Centre, which has been declared as the "Centre of Excellence" in the field of mineral processing by the Expert Group of UNIDO.

NMDC has made valuable and substantial contribution to the National efforts in the mineral sector during the last five decades and has been accorded the status of schedule-A Public Sector Company. In recognition to the Company's growing status and consistent excellent performance, the Company has been categorized by the Department of Public Enterprises as "NAVRATNA" Public Sector Enterprise in 2008.

The story of NMDC is woven around the dreamy hills and the deep jungle land of Bastar in Chhattisgarh, known as Dandakaranya from the epic periods. The Bailadila iron ore range - "The hump of an ox" - in the local dialect, was remote, inaccessible and replete with wild life. The range contains 1200 million tonnes of high grade iron ore distributed in

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14 deposits. The entire area was brought to the mainstream of civilization by the spectacular effort of NMDC by opening-up of mines. Today, Bailadila is a name to reckon with in the world iron ore market because of its super high grade iron ore. Bailadila complex possesses the world's best grade of hard lumpy ore having +66% iron content, with negligible deleterious material and the best physical and metallurgical properties needed for steel making.

In the past, NMDC had developed many mines like Kiriburu, Meghataburu iron ore mines in Bihar, Khetri Copper deposit in Rajasthan, Kudremukh Iron Ore Mine in Karnataka, Phosphate deposit in Mussorie, some of which were later handed over to other companies in public sector and others became independent companies.

NMDC is presently producing about 22 million tonnes of iron ore from its Bailadila sector mines and 7 million tonnes from Donimalai sector mines.

Because of its excellent chemical and metallurgical properties, the calibrated ore from Bailadila deposits has substituted the iron ore pellets in sponge iron making and hence became an important raw material for three major gas-based sponge

Iron steel producers like Essar Steel, Ispat industries and Vikram Ispat. In addition to these three, the entire requirement of the Visakhapatnam Steel Plant is also being met from Bailadila.

The demand for steel will continue to grow in the years to come and this in turn would call for increased demand for iron ore. NMDC is gearing itself to meet the expected increase in demand by enhancing production capabilities of existing mines and opening up new mines - Deposit -11B in Bailadila sector and Kumaraswamy in Donimalai sector. The production capability would increase to around 50 million tonnes per year by 2014-15.

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BOARD OF DIRECTORS

D U T I E S I N B R I E F

Sl. No. Designation Duties in brief

1 Chairman-cum-Managing Director Cheif Executive Officer

2 Director (Finance) Cheif Financial Officer

3 Director (Commercial) Cheif Commercial Officer

4 Director (Production) Cheif Production Officer

5 Director (Technical) Cheif Technical Officer

6 Executive Director /Project Manager

BIOM, Bacheli Complex Head of Project

7 Executive Director/Project Manager

BIOM, Kirandul Complex Head of Project

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CURRENT OPERATING MINES

1. Bailadila Iron Ore Mine, Kirandul Complex Bailadila Deposit-14

Commissioned : April, 1968

Average grade : + 66% Fe

Balance reserves : 138.29 million tonnes (April, 08)

Bailadila-14 mine is the first large scale open cast mechanised iron ore mine in India for which DPR was prepared by NMDC. The mine has the distinction of having unique down-the-hill conveyor system passing through a tunnel to transport iron ore from crushing plant to processing plant.

Bailadila Deposit-11/C

Commissioned : June, 1988

Average grade : + 65% Fe

Balance reserves : 52.98 million tonnes (April, 08)

Capacity : 5 MTPA Product Dep 14& 11C : Lump –150mm +10mm Fine –10 mm

CLO : 6mm to 40mm

Capacity : 5.50 million tonnes ROM ore/year (original)

Derated Capacity : 2.0 million tonnes ROM ore/year

Port of export :Vizag outer harbour. Capable of handling ships upto 1,30,000 DWT

Rail link to Vizag : 475 kms.

No. of Employees : 1751

1752

2. Bailadila Iron Ore Mine, Bacheli Complex

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Bailadila Deposit-5

Commissioned : January, 1977

Average Grade : +66% Fe

Balance Reserves : 240.10 million tonnes (April,08)

Product : Lump-150mm +10 mm Fine-10 mm

CLO : 10mm to 40mm

Capacity : 6 million tonnes of ROM ore/year

Port of Export :Vizag outer harbour. Capable of handling ships upto 1,30,000 DWT

Rail Link to Vizag : 471 Kms.

No.Of Employees : 1784 ( April,09)

DPR was prepared by NMDC Built with largely indigenous know-how and equipment Has the biggest indigenously built gyratory crusher (60" x 89") Longest conveyor system in mining in India with a single downhill conveyor of 2.5 km

length passing through 2.2 km long tunnel with a gradient of 50 which was driven from both ends through difficult terrain and strata.

A highly mechanised wet screening plant and facilities for stacking, reclaiming and loading (2500 t/ hour) of lump ore into railway wagons.

In 1987 mechanised handling system of reclamation and wagon loading of fine ore with a capacity of 2.8 million tonnes per annum was also added to meet the increasing demand of fines in the steel industry. IS0 9001:2000 certifications awarded in February 2001.

3. Donimalai Iron Ore Mine

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The saga of NMDC includes the pioneering exploration activity carried out for developing iron ore mines in Karnataka in various regions like Kudremukh, Donimalai, Bababudan, Kumaraswamy and Ramandurg. NMDC developed the Donimalai mine in this area to export ore to Japan and South Korea.

Commissioned : October, 1977

Average grade : + 65% Fe

Balance reserves : 27.92 million tonnes(April,08)

Product : Lump –31.5 mm +6.3mm Fines: -10mm

Capacity : 4.0 million tonnes of ROM ore/year

Port of export : a) Chennai outer harbour. Capable of handling ships

of 1,30,000 DWT - 532 Kms. rail Link

b) Marmagoa port, Goa. Capable of handling

panamax size vessels - 370 Kms rail link

No. Of Employees

:

1270 ( April,09)

ISO 9002 Certification awarded in February, 1999.

4. Panna Diamond Mine

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India was the only source of diamonds in the world for over 3000 years till diamond deposits were located in Brazil and South Africa.

Today, NMDC is the only organised producer of diamond in India from its Majhgawan mine at Panna, Madhya Pradesh and continues to carry on the legend and past glory through its untiring efforts.

Capacity : 84,000 carats per year

Incidence : 10 carats per 100 tons of tuff material

Total diamonds recovered so far : 1005064 carats approx.

No. Of Employees : 240 ( April, 2009 )

OUR ESTEEMED CLIENTS

INDIAN

Chowgule & Company Limited Engineers India Limited Essar Gujarat Limited Fomento Heavy Engineering Corporation Limited Hindustan Zinc Limited Manganese Ore India Limited Minerals & Metals Trading Corporation Limited Mishra Dhatu Nigam Limited National Thermal Power Corporation Limited Neyveli Lignite Corporation Paramount Sinters Pvt. Limited Pennar Steel Limited Pyrites, Phosphates & Chemicals Ltd. KIOC

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GOA Sathavahana Ispat Limited Sponge Iron India Limited Steel Authority of India Limited and its Subsidiaries Salem Steel Plant Tata Metaliks Limited Tata Iron & Steel Co. Uttar Pradesh State Mineral Development Corporation Limited Utkal Alumimium Company Limited VS Dempo & Company Limited Salgaccar & Pore Ltd. MMTC LTD. Rashtriya Ispat Nigam Ltd.( VSP) Essar Steels Ltd. Ispat Industries Ltd. Vikram Sponge Iron Ltd. KIOCL Ltd. JSW Steel Ltd. Visvesvaraya Iron & Steel Plant. Aparant Iron & Steel Co. Ltd. Lanco Industries Ltd. Kirloskar Ferrous Industries Ltd Southern Iron & Steel Co. Ltd. CG based Sponge Iron Units

OVERSEAS COUNTRIES

Bhutan, Hungary, Iraq, Liberia, Mongolia, Nigeria, Sri Lanka, Syrian Arab Republic.

1.2 Corporate Policy:

Create sound and eco-friendly environment for sustainable development at all production projects

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Plan new projects with environment – friendly considerations Plan regulative, ameliorative and mitigative measures to protect environment Lend support to projects on environmental matters.

1.3 Objectives

The Environmental Policy is framed specifically to fulfill the following objectives :

Create a work environment which enhances/ motivates production and productivity. Create a residing environment for the enjoyment & peace of employee. Encourage safe and scientific mining and other engineering practices. Promoting awareness amongst the employees and the neighbourhood population for

adopting environmentally acceptable procedures and restricting environmental degradation and pollution to the barest minimum.

Establishing "Eco-label" for its finished products so as to promote domestic and international markets.

To achieve Communal harmony and peace amongst the employees and the local villagers for heading fast towards "sustainable development".

Meaningful use of forest lands within the lease areas.

1.4 Sub-goals

Judicious and scientific planning of direct excavation, waste dumping and siting infrastructural areas.

Restricting use of forest lands to the barest minimum level. Constructing ameliorative measures like buttress walls, contour trenching, biological

reclamation of mined out areas and waste dumps, etc. to minimize land erosion. Construction of check dams, tailings dams, ETP for treating effluents from service

centre, Auto shops, etc to avoid water pollution. Regular water sprinkling and grading of haul roads, scientific afforestation for abating

air pollution. Regular maintenance of HEMM and Plant equipments and good housekeeping to

reduce noise pollution. Create green belts; densify open lands, good arboriculture and avenue plantation

practices for improving the overall Importance value index of the region and also to eradicate effects of visual intrusion.

Monitor all environmental parameters on regular basis following the statutory acts and their amendments of the GOI viz.,

Preparation and timely submission of six-monthly reports to MOEF regional offices and annual environmental audit reports to respective state pollution control boards.

Creating environment awareness amongst the employees and the local population through celebration of Mine Environment & Mineral Conservation (MEMC) week

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under the aegis of Indian Bureau of Mines & World Environment Day on 5 th of June every year.

Training employees for environmental consciousness. Undertake Peripheral village community development works like improving roads,

constructing school buildings, community halls, distributing books and stationery, extending schooling and medical facilities available in the project townships to the local people as well.

Providing safe drinking water to the township dwellers and extending water supply to population of neighbouring villages.

Obtaining Consents for establishment and operation of mines/plants from respective state pollution control boards.

Obtaining environmental clearances for new/ expansion projects. Obtaining forest land clearances for renewal/ fresh grant of mining leases. Massive afforestation drive. Mined out area to an extent of 16.18Ha has been stabilize at Donimalai project by tree

plantation.

Responsibilities:

Maintaining ecological balance by adequate environmental protection and environment improvement works is entrusted to the Chief Executive of the respective project. He may sub-delegate the power to the DGM (Production). The Manager/ Sr. Manager (Geo- Env)/ Sr. Manager (Trg, safety & Environment) and his associate in the rank of Jr/Asst .Manager (Env) is responsible for maintaining clean and green environment as the front line executive. The General Manager (IE & TS) and the DGM (Env) at Corporate Office should monitor the environmental performances and guide the Projects for maintaining good environmental practices and to adopt newer, safe and cleaner technologies

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2.PROJECT DETAILS

FINANCIAL CONCURRENCE

2.1 Meaning of Financial Concurrence

Financial concurrence is careful scrutiny of expenditure proposals to satisfy as to whether the proposals are made out comprehensively by following laid down norms,

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financial principles, all applicable rules and guidelines and above all the financial property. Financial concurrence is given by appropriate finance authority after careful examination of all above aspects before the proposal is approved by competent authority before giving financial concurrence, proposals are scrutinized in the concurrence section and they are generally concurred by the finance authority one level lower in rank than the approving authority, e.g. director (fin) is the concurring authority where CMD approves the proposal; GM (fin) for directors; HOD (FIN) for head of project etc.

2.2 Meaning of vetting

Vetting is a process of examination and evaluation, generally referring to performing a background check on someone before offering him or her employment, conferring an award, etc. In addition, in intelligence gathering, assets are vetted to determine their usefulness.

To vet was originally a horse-racing term, referring to the requirement that a horse be checked for health and soundness by a veterinarian before being allowed to race. Thus, it has taken the general meaning "to check". Vetting can refer to the process of analyzing stocks, bonds, and any other securities or financial instruments before committing money.

2.3 CONCURRENCE VIS-À-VIS VETTING

Vetting is a process in which the facts and figures with reference to the underlying documents are verified.

To vet was originally a horse-term, referring to the requirement that is to be checked for health and soundness by a veterinarian before being allowed to race. Thus, it has taken the general meaning “to check.”

Financial vetting is a part of concurrence.

Vetting could also refer to other areas such as technical vetting, legal vetting etc.

Though objective of both vetting & concurrence is same, the procedure involved and the scope makes the difference.

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Concurrence and vetting are however used as synonyms referring to the same process.

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3RESEARCH METHODOLOGY

3.1 PROJECT OBJECTIVE To study the process of financial concurrence in selecting the tendering parties. To reduce the risk of bearing extra expenditure concerned with tenders. To select the tendering parties which are better in performance and lesser in cost. To analyze deviations in cost, incurred in same kind of work.

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3.2 RESEARCH DESIGN

The project study is based on descriptive and applied research. This project involves detailed analytical research of the process of flow of financial concurrence at NMDC LTD, kirandul. In the later phase, the project follows conclusive research design. In depth analysis of various information gathered, have been done to arrive at findings and conclusions. The project is properly designed to meet the set objectives.

Sources of Data

1. Personal interviews

2. Finance and Accounts department

Secondary Source

1. Company’s record

2. Respective data

3. Annual reports

4. Website

5. Office internet

Presentation of data

Data have been presented in form of tables.

Data analysis and interpretation.

Detailed analysis has been done of the data collected while concurring the files of tender and interpretation have been drawn thereafter.

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DATA ANALYSIS AND INTERPRETATION

BUSINESS CASE

Purchase procedure adopted in NMDC

National Mineral Development Corporation Ltd., (NMDC), (A Govt. of IndiaEnterprise), under the Ministry of Steel, is primarily engaged in the production of iron ore and diamonds. NMDC deploys various heavy earth moving equipments such as excavators, drills, dumpers, dozers, loaders and plant equipments suitable for crushing, screening and loading etc. In order to have regular maintenance of the above heavy earth moving equipments and

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plant equipments, it is essentially required to procure capital equipment, spares, consumables and various general items at regular intervals. For procuring the above category of items, NMDC is adopting the following procurement procedure:-In NMDC, procurement activities have been divided in two-tier system. Some of the items / spares have been delegated to the respective projects to procure at their end, whereas some of the items mostly high value consumable items (combining the requirements of all the Projects), capital items and imported spares are being procured at Corporate Office situated at Hyderabad. The procurement is being made on single, limited and open / global tender basis. NMDC, Hyderabad Office also concludes Rate Contracts for regular general consumable items / spare parts, explosives etc., so that all the Projects can place the orders without routing through tender procedure. Normally, limited tenders are being called but open tenders are also invited for the new materials or when sources are not known or where there is no registration for such sources or lack of competition for the particular store group. Global tenders are also invited where there are limited indigenous manufacturers to meet the requirements or where it is advantageous to obtain the offers from the manufacturers from more than one country for technological up-gradation or to encourage competition or derive the cost advantage.1. CAPITAL ITEMS PURCHASEThe limited / open / global tenders are called in two bid system, depending on the sources available. Initially, the tenderers who have submitted required EMD, the techno-commercial bids of such tenderers, are opened in the presence of tenderers’ representatives. After sorting out the technically acceptable tenders through a Tender Scrutiny Committee (TSC) recommendations, the price bids of technically acceptable tenders are also opened in the presence of such tenderers’ representatives.

The price comparative statement on destination cost basis is prepared after taking into consideration the applicable taxes, duties, freight & insurance etc. The Tender Scrutiny Committee examine the technically acceptable offers with last purchase rates / estimates for reasonability of price and past performance. In case the lowest technically acceptable offer is found to be on higher side, the price negotiation is also held with lowest tenderer. TSC finally recommends the procurement on lowest technically acceptable tenders which are being concurred in Finance and approved by competent authority as per the delegation of powers. On approval, letter of intent and detailed purchase order are issued.

2. REVENUE ITEMS PURCHASENormally revenue items are procured on single / limited tender basis. Only in few cases such as conveyor belts, OTR tyres, RR bits and other high value items, tender is called with EMD @ 1% of the quoted price. In case the

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tender value is Rs.10.00 lakhs or more, the offers are opened in the presence of tenderers’ representatives. The remaining procedure is same as that of capital items.

3. RATE CONTRACTSThe rate contracts of regular consumable items are finalized based on single tender/ limited tender basis. The procedure of finalizing the rate contracts is same as that of the procurement of revenue items.

4. REPEAT ORDERSIn some cases, repeat orders are also being considered, on case to case basis, after fulfilling the norms of repeat order as per the procedure stipulated in the Materials Management Manual.

4.1 CONCURRENCE PROCESS FLOW

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4.1.1 ADMINISTRATIVE APPROVAL

Purchase procedure

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Administrative approval

Indent/Detailed estimates

Mode of tendering

Tender documents

Comparative statement

preparation

Techno commercial

recommendation

Price comparative statement

Price recommendation

execution

The procurement of material in our Labs / lnstt can be divided into the following distinct stages:

a) Finding the Budgetb) Prioritisation of purchase of equipment, machinery etc. for the financial year for

CSIR budget on project needs & priorities of sponsored projects.c) Placing of the Indent by the scientist and other officers concerned after verifying the

non availability in stock.d) Consideration of the indents by the respective SPC.e) Calling for tender/ quotations and processing of tender papers by the purchase

department.f) Evaluation of the tenders/ quotations by the respective SPC.g) Submission of the papers to the competent authority for sanction.h) Placement of orders.i) Arrival of equipment and its installation.

4.1.1A Opening of Tenders and Approval to Accept a Tender

To ensure that proper recording of tenders submitted is carried out the Project Control Group must adopt a formal procedure for the receipt and opening of tenders. Tenders are to be closed in Department of Health or Health Service/Agency offices with suitable facilities and processes.

A tender process set out on the Department of Health website states that an opening panel of at least 2 persons should be constituted, generally including a representative from the Health Service/Agency, the Principal Consultant and/or the Quantity Surveyor.

The date and time for receipt of tenders should be at a predetermined place, time and day as required by the Code of Practice and the opening of tenders should record in order of opening the relevant tender summary details (e.g. list items to be recorded, late tenders, distribution of copies, tender price, conditions, completed tender forms). It is normal practice to have a tender box that can be secured (i.e. locked) available until tender close and only these tenders received are to be considered for evaluation.

The Department guidelines for opening procedures are attached (refer to Risk Management Principles and Proposed Procedures Required for Department of Health Projects).

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4.1.1B Tender Opening Summary Form

The following information shall be submitted with each schedule of tenders on a tender opening summary form (example attached):

The tender amount of all tenders received, together with the full legal name of the recommended tenderer, ACN reference, ABN reference and building practitioners number

The allowances and/or provisional sum amounts included for mechanical, electrical, lifts and/or any other service or equipment

The time in working days required by the contractors to complete the project Completion of all tender forms Acknowledge receipt of addenda and if they are incorporated in tender Advice that required statutory declarations have been submitted Inclusion of list of all building trades to be engaged and if direct or sub-contractor

and their respective costs.

4.2 INDENT/DETAILED ESTIMATES

Indents covering the requirements for equipments, components, raw materials and all types of stores needed by the Projects/Constituent Units of the Department of atomic Energy and also for the services (i.e. repairs, transportation of materials, etc.) shall be prepared in the format prescribed by the DPS and shall be raised on the Central Purchase Unit or the Regional Purchase Unit of the Directorate of Purchase and Stores depending upon the financial limit up to which the Regional Purchase Unit concerned is empowered to make purchase or the independent Purchase Units attached to CAT, IGCAR and NFC. Indents shall be approved by the authorities in the Projects/Units to whom appropriate powers have been delegated. Before the indents are approved and sent to the Purchase Unit concerned, the officer concerned approving the indent should satisfy himself and ensure that he has the authority to approve the indents to the extent of the estimated value of the items indented and also furnish the relevant authority number and date on the indent. Officers empowered to approve indents shall ensure maximum possible consolidation of their requirements against each item while raising indents. Indents for items of equipment and stores of proprietary nature (i.e. when a particular make/model of the equipment or product of a particular manufacturer is indented when items of similar or near equivalents are available from more than one source) should be supported with sufficient technical justifications for choice of the proprietary make. Such indents shall be

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approved by only those officers who are delegated specific indenting powers for proprietary articles of stores.

The authorities empowered to approve the indents shall indicate in the indent the Head of Account Number to which the expenditure for the purchase is to be debited, the financial sanction number and date and certification about the availability of funds for the purchase and also send the indents through their Stores Unit to ascertain whether indented items are available in the stock. DPS shall return to the Indenting Officer such of those indents which do not contain these details. The Indenting Officer should ensure that the specifications of the items required to be purchased is complete in all respects and that no such material is available in stock.

4.3 MODE OF TENDERING/PURCHASE

On receipt of an indent in the Purchase Unit concerned, the Purchasing Officer concerned, after satisfying that the indent is complete in all respects, shall decide the mode of purchase and invite tenders by adopting any one of the following modes of Purchase taking into account the history sheets and such other relevant data as may be available in respect of the item. In deciding the mode of purchase in respect of imported items, the F.O.B. value shall be the criterion for applying the prescribed financial limit. An invitation to tender should normally be issued only to the suppliers registered with the Purchasing Units in DAE, Directorate General of Supplies and Disposal, National Small Scale Industries Corporation or those listed in the Hand Book of Indigenous Manufacturers published by the Development Wing of Ministry of Industry, Government of India. Selection of suppliers for sending invitation to tenders will be made on rotation except in the case of a few proven core suppliers who can be invariably contacted to ensure timely supplies. The Purchase Unit of DAE may register as many suppliers asPossible who will be in a position to meet the requirements of the Projects/Units of the Department of Atomic Energy? In case it is proposed to issue enquiries to unregistered firms which will normally be based on the recommendation of the Projects/Units in respect of some specialised requirements and also where the field is limited and the reputed suppliers do not get themselves registered with the Purchase Units under the DAE, prior approval of the Director, P&S, DPS/Heads of the Projects/Units who have been authorised to exercise the powers of Director, Purchase and Stores by DAE or the officers to whom such powers are specifically re-delegated by the Director, Purchase and Stores/Heads of Projects/Units who have been authorised to exercise the powers of the Director, P&S by DAE shall be obtained.

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TYPES OF TENDERSThe SPC must select after deliberation one of the following modes of procurement:a) Open tender - by advertising in the press.b) Limited tender - by sending written enquiries to known, reputed suppliers.c) Single tender - by sending written enquiries to a single supplier if it is in the knowledge of the indentor that the stores/equipment required is manufactured only by that supplier and none else.OPEN TENDER: The open tender method shall normally be followed for all procurement worth more than Rs. five lakhs. Splitting of indents, in order to bring it outside the ambit of open tender method is strictly prohibited. Notice inviting tenders shall be given in at least two local dailies for procurement worth more than five lakhs but less than Rs. ten lakhs. Notice inviting tenders shall be given in at least two national dailies and in the Indian Trade Journal; published by the DGCIS, Calcutta, for procurement worth Rs. ten lakhs and above. The notice inviting tenders shall be short, clearly worded and unambiguous. It should give a brief description of the item/ equipment to be procured, the qualification requirement for the supplier, the last date upto which tender papers shall be supplied (when required) the date of receipt of completed tenders, the date, time and venue of opening of tenders. Detailed technical specifications should not be given in the notice at all; they should only be given along with the 9 tender papers. In addition, the notice can be put in the website of the lab and or other dedicated websites for such purposes.

LIMITED TENDERS: Limited tender method shall normally be followed in all procurements worth Rs. five lakhs or less. However, this method can be followed even in procurement of material worth more than five lakhs when:

a) The Indenting Officer certifies that the demand is urgent and any additional expenditure incurred through open advertisement shall not be fruitful.

OR

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b) When the sources of supply are definitely known and the possibility of fresh sources of supply being available is remote.

OR

c) And it is not in public interest to adopt the open tender method.

In all such cases, the invitation to bids must be sent to parties of comparable reputation and market share. For instance, if the requirement is for the installation of air-conditioning system and the intention is to get it done from major firms, such notices must be sent only to reputed national or multi- national firms and not to local manufacturers/ agencies. On the other hand, if the intention is to encourage local manufacturers/ agencies, queries should be sent to local manufacturers/ agencies only and not to major firms. This is necessary to ensure proper comparison.

GLOBAL TENDERS: Global tenders may be issued by the SPC if it is felt that bidding from the indigenous source through open tendering shall not result in competitive prices. In such cases, in addition to the open tendering procedures, copies of the NIT may be sent to the embassies of the countries where such manufacturers are located by giving them at least six weeks time so that they can forward the notice to the prospective bidders in their countries.

SINGLE TENDER METHOD: Single tender method shall be followed only in rare cases where it is in the sure knowledge of both the SPC and the indentor that the equipment to be procured is manufactured only by a particular manufacturer and there is no other option for the laboratory except to go in for this equipment. Intentionally adding restrictive clauses to favour a single source should be avoided at all costs. All such cases of procurement on single tender basis must be approved by the competent authority on specific recommendations of the SPC, only after he satisfies himself that such procurement is unavoidable. Spare parts of equipments procured on single tender basis from the manufacturers or from their authorised dealers can be decided by the SPC. The following minimum time limit may be allowed to the bidders so that they can quote their best possible prices:i) Limited tender - Three weeks.ii) Open tender - Four weeks.iii) Global tender - Six weeks.

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However, in case of urgency, the time period can be reduced but Proper justification for the same has to be furnished and accepted by the SPC.

4.4 TENDER DOCUMENT:

The tender documents which comprise the detailed technical specifications, conditions of contract, the proforma in which the tender is to be submitted and such other material as may be sold at the following rates for open tenders.Estimated value CostRs. 5 lakhs to Rs.10 lakhs Rs. 500.00Rs. 10 lakhs to Rs. 50 lakhs Rs. 2000.00Rs. 50 lakhs and above Rs. 5000.00These rates are exclusive of postage/ courier charges and sales tax, if any, levied by the Govt.

EMD & BG APPROVAL : The tender document for purchase of equipment must include a clause that the successful bidder shall furnish an unconditional Performance bank Guarantee valid till 60 days after the warranty period from a scheduled bank for 10% or higher if decided by the Competent authority of the order value within 15 days of the placement of order for orders where full payment is to be made on L/c or on delivery, failing which the contract shall be deemed as terminated. In cases where part payment is made on delivery & part on installation, the performance BG shall be asked for at the time of release of final payment. In rare cases where goods have been procured on proprietary basis etc. the matter of non-furnishing of performance Guarantee, if any, may be brought to the notice of the competent authority for his decision.

It shall be clearly mentioned in the tender document for purchase of equipment that if the vendor have supplied identical or similar equipment to other CSIR labs/ Instt. the details of such supplies for the preceding three years shall be given together with the prices eventually or finally paid. An earnest money deposit for all procurement costing more than Rs. 5.00 lakhs must be collected at the rate of 2% to 5% of the estimated value as may be decided by the SPC. The EMD shall always be collected by DD or bankers Cheque or bank guarantee. The EMD of unsuccessful bidders shall be returned within 15 days of the award of the contract. All tenders received without EMD shall be summarily rejected. Firms registered with DGS&D, NSIC and Govt. Public Undertakings who are exempted from payment of

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EMD may be allowed exemption. But it must be verified that such registration include the item they are offering which are manufactured by them and not for selling products manufactured by other companies. In rare cases however, if the bidder is well known and highly reputed, the matter may be brought to the notice of the competent authority for his decision. Purchase of equipment from abroad shall be made directly from the manufacturer or their authorised agents in India. It shall not be bought from the sub-agents of authorised agents. It shall be clearly stated in the tender documents that purchases made for scientific purpose are exempt from Customs / Excise duty.

During intensive examination of the Civil works of some of the CSIR

Labs/Instts, the Chief Technical Examiner's Organisation of the Central Vigilance

Commission has emphasised the need for obtaining the approval of the competent

authority in respect of tender documents prepared/drafted.  The tender document will

normally consist of the following:-

1.     Notice Inviting Tender.

2.     The schedule of quantities of the work.

3 .    A set of drawings referred in the schedule of quantities of work, if any.

4.     Special conditions and additional conditions of contract, if any.

5.    Reference to work specifications, if the same are in the form of printed book

Additional/Special specifications, if any, shall also be enclosed.

6.     Press Notice.

The tender document should be page numbered and all corrections, over writings, insertions etc. should be certified on each page.  After compiling these papers and obtaining approval of competent authority, these may be kept in a sealed cover so as to avoid tempering in future.  General conditions of contract should be attached with the original agreement.

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Receipt of Tenders

Tenders are received either through post or through courier or by hand .The tenders shall be dropped in the tender box, which shall remain locked, and its keys with the Purchase officer. If a tender, received in a cover without any superscription about its contents, is opened by any official receiving it, he shall himself mark on the cover the tender number and the date of its receipt and the date of its opening and shall sign it and cause it to be delivered to the purchase officer before the opening date. Tenders for items costing less than Rs. 2.00 lakhs and are received in open condition or through fax or e-mail or telegram or telex within the due date and time shall not be rejected but shall be accepted at the risk of the bidder if the same is presented to the SPO before the expiry of the due date and time.

Late/Delayed Tenders

Tenders received after the specified time and date of opening are treated as "Late" while tenders received after the last date specified for receipt of tender but before the date of opening of the tender are treated as'' Delayed". Such tenders shall be marked as late/delayed as the case may be and filed. They shall not be opened at all and be returned to the bidders in their original envelope without opening.

Postponement of the tender opening date

Requests for the postponement shall not normally be entertained. In rare cases however, if the response to a notice is poor, a decision to postpone the opening date of the tender by a minimum 15 days may be taken by the competent authority. The time extension so granted may be intimated to all concerned so that adequate response is received. In case where the response to limited tender method in respect of materials costing more than Rs. 5.00 lakhs is poor (if the response is only from two or less bidders, it is considered poor), then open tender method shall be resorted to. The bidders who responded to the limited tender enquiry must be informed that their tenders shall also be considered along with the tenders received through open enquiry. If a decision is taken to change the specification to make it broad-based, the bidders who had responded to

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limited enquiry shall be asked to bid again as per the revised specifications. Any exception to this should have the approval of Director.

Opening of the Tenders

The tenders shall be opened by a committee consisting of representatives of DGM (FIN), JT. GM (FIN) and GM. Separate notice of opening of the tender need to be sent to the bidders before opening of the commercial bid . Opening of the tenders without informing the bidders is strictly prohibited for the limited & open tendering process. The officer opening the tender shall read out the following particulars only for the information of the representatives attending the tender opening.a) Tender numberb) Name of the firmc) Description of the item to be purchasedd) Pricee) Whether the price is inclusive of taxes & duties or exclusivef) Discount offered.g) Delivery Schedule.h) Any other extra charges quoted for packing, transport etc.i) Terms of deliveryj) Warranty obligations. All the pages of the tender has to be initialed by the tender opening committee. Alterations/ corrections in the tenders should be initialed legibly by the officers opening the tender and dated. A similar procedure shall be followed wherever any erasing/ cutting are observed. Any correction in the price quoted in the tender both in the words and\ Figures shall be circled in red ink by the representative of finance and signed. The members of the tender opening committee shall endorse this. In addition, a list of the representatives of the bidders present at the time of opening shall be prepared who shall write their name and the bidder they represent under their signature. If there is any discrepancy between the price quoted in figures and words, whichever is the higher of the two shall be taken as the bid price.

4.5 COMPARATIVE STATEMENT PREPARATION:

Comparative statements are financial statements that cover a different time frame, but are formatted in a manner that makes comparing line items from one period to

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those of a different period an easy process. This quality means that the comparative statement is a financial statement that lends itself well to the process of comparative analysis. Many companies make use of standardized formats in accounting functions that make the generation of a comparative statement quick and easy.

The benefits of a comparative statement are varied for a corporation. Because of the uniform format of the statement, it is a simple process to compare the gross sales of a given product or all products of the company with the gross sales generated in a previous month, quarter, or year. Comparing generated revenue from one period to a different period can add another dimension to analyzing the effectiveness of the sales effort, as the process makes it possible to identify trends such as a drop in revenue in spite of an increase in units sold.

Along with being an excellent way to broaden the understanding of the success of the sales effort, a comparative statement can also help address changes in production costs. By comparing line items that catalog the expense for raw materials in one quarter with another quarter where the number of units produced is similar can make it possible to spot trends in expense increases, and thus help isolate the origin of those increases. This type of data can prove helpful to allowing the company to find raw materials from another source before the increased price for materials cuts into the overall profitability of the company.

4.6 COMPARATIVE STATEMENT FOR TECHNO COMMERCIAL RECOMMENDATION

After entering the valid Tenders received in the office in a registrar. All the items contained in are entered in a list called comparative statement. See the specimen list. 

1. Before filling in the rates, tender offers should be checked for calculations. 2. Initials of contractors should be present on any of the cutting on tenders. 3. If two rates are written for one item, the lowest will be treated as correct. 4. Rates should be written in words along with figures. 5. If the rate in fig differs with that of words, the lower will be treated well even in

this case. 6. The lowest rates tender shall be accepted if it is possible to execute the work. 7. The competent authority shall accept or reject the tender on comparative

statement. 8. Full name of Tender should be written.

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The two BIDS are presented here in the format of comparative statement for simplification of verifying process:

Those BIDS are:

1. EMD bid (Earnest Money Deposit)2. Techno –commercial bid

After verification of both BIDS the tender scrutiny committee recommends which party should be selected and called for the presentation of price BID.

4.7 PRICE COMPARATIVE STATEMENT; (price BID)

A bid price is the highest price that a buyer (i.e., bidder) is willing to pay for a good. It is usually referred to simply as the "bid."

In bid and ask, the bid price stands in contrast to the ask price or "offer", and the difference between the two is called the bid/ask spread.

An unsolicited bid or offer is when a person or company receives a bid even though they are not looking to sell. A bidding war is said to occur when a large number of bids are placed in rapid succession by two or more entities, especially when the price paid is much greater than the ask price, or greater than the first bid in the case of unsolicited bidding.

These statements are prepare to know whether all the price elements are considered correctly in the price CST including discounts offered, taxes &duties ,CENVAT credit ,input tax rebate and approved loadings needs to be vetted.

SOME EXAMPLES OF PRICE COMPARATIVE STATEMENTS ARE

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4.8 PRICE RECOMMENDATION:

Price recommendations are made and given by the panel of finance competent authorities after considering all the price effecting elements like taxes, duties, freight etc. This panel of experts recommends to material department that tender should be accepted or rejected.

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Evaluation of offers strictly as per tender terms. Determination of L1 tenders. Reasonableness of L1 offered price. In case of huge variation in the estimate cost and L1 offer, reasons

justifying the L1 price shall be brought out by Tender Scrutiny Committee.

Reasons for recommending for negotiations/retender. If award of work is approved, contract shall be entered into as per

tender terms.

4.9 EXECUTION:

This phase starts with the final check on tender papers before tenders are invited. 

The general conditions and special conditions should be in conformity with the related

instructions.  The eligibility for the tenders should be fully spelt out in the tender

document.  Tenders should be sold to eligible parties only.  Comparative statement

should be prepared after evaluating the financial implications of any conditions put forth

by the tenderer and after determining the choices in respect of designs, materials etc., if

alternatives provided in the tender papers.  Normally, work is to be awarded to the lowest

tenderer.  Justification on the reasonableness of rates should also be prepared.  Items for

which abnormal rates may have been quoted, should be identified and careful watch

exercised on their quantities as the work progresses.  All detailed designs and drawings

should have been completed by this time.

The lab should facilitate the progress of work through cooperation in terms of the

contract agreement. Promptness in payment of bills is a salient example.  The Engineer-

in-charge should have arrangements for checking the quality of materials and work.  He

should be knowledgeable about rules and procedures of construction/contract

management.  Measurements should be recorded as the work progresses and the final bill

should be processed along with the completion of construction.

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There should be complete adherence to the provisions in the agreement.  Attention

should be paid in this regard to extensions of time, instructions given to the contractor on

works and any issues raised by the contractor in the course of construction.

Making changes mid-stream is seen to be the most prominent cause for disputes and

malpractices.  Therefore, any major changes in design, items, specifications, quantities

should be effected only when they are inescapable.  The approval of competent authority

for effecting the deviations should be obtained invariably.  Full justification and financial

impact of deviations should be taken into account while ordering them.  Rates of non-

agreement items should be settled expeditiously in terms of the agreement.  The lab

administration should take up in writing with the contractor as soon as any deviation is

noticed with regard to quality/progress of work.

AFTER EXECUTION RESPONSIBILITIES:

The following site documents need to be maintained:

    i)       Site Order book

    ii)       Hindrance Register

    iii)      Material at site (MAS) account for receipt & issue of material

  iv)  Stage Passing Register: Important stages of works are to be checked and

correctness confirmed and approved by the Site Engineer.  Some such stages are setting

out, foundation, centring and shuttering, reinforcement, slab casting, slopes of

floors/roofs, anti termite treatment and water proofing treatment etc.

 v)   Cement register

 VI) Testing Records Register-both material/equipment and sub system.

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 vii)  Register for Contractor's Resource (men, material and plant) and site to be

maintained daily/weekly duly signed by Contractor's representative and site engineer.

d)    It is a must that the Site Engineer should be aware of the contract specifications in

detail as also the relevant IS codes.  National Building Code and CPWD Specifications

1977 refer.

     e)    It is essential that the technical plans and schemes are technically sanctioned and

approved by competent engineer officer so as to ensure the soundness of the         

scheme/designs.

    f)     Certain Contractual obligations are required to be met by the contractor. 

Deductions from the contractor's bills need to be made for their non compliance where

applicable.  Some such examples are non submission of CPM/PERT programmes.

required testing of samples, not insuring the works where stipulated, non employment of

qualified engineers, non supply of guarantee bends in case of specialists' works whose

durability/serviceability is guaranteed for certain period.

     g)    The following charts if maintained at site will assist in better contract

management:

i)        Chart showing name of work, important information like cost, plinth area, number

of storeys, PA Rate, type of structure, type of foundation, important specifications and

date of commencement/completion.

ii)       List of stores to be procured by the department. their procurement schedule and the

procurement position.

iii)      Procurement schedule of stores to be procured by the Contractor and their present

status.  This should also include the requirement of tools and plants and scaffolding and

centring material etc. at various stages.

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iv)      CPM/PERT work programme also indicating planned and actual progress.

v)       A bar chart showing the planned and actual expenditure.

(c)     Details of extra items/substituted items, deviated quantities and the position of their

approval.

vii)     List of all freak rate items.

      h)    Aldrine, a chemical earlier used for anti termite treatment has now been phased out.  In lieu the following chemicals for anti termite treatment are currently being used.  Record of the quantity used of such chemical should be maintained.

5. FINDINGS

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1. I found that the process of flow of financial concurrence is accurate in selecting tenders.

2. The organisation enjoys the benefit of maximum profit rather than suffering from losses.

3. The extra cost incurred by the organisation is ignored up to a great extent.4. The method of financial concurrence decreases the chances of fraud among

tenderers.5. The financial concurrence flow follows a legal aspects in government enterprises.6. Various aspects of tendering parties are diagonized while acceptance of an offer.

6. RECOMMENDATION

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1.  Register for Contractor's Resource (men, material and plant) and site to be maintained

daily/weekly duly signed by Contractor's representative and site engineer.

2.    It is a must that the Site Engineer should be aware of the contract specifications in

detail as also the relevant IS codes.  National Building Code and CPWD Specifications

1977 refer.

 3.    It is essential that the technical plans and schemes are technically sanctioned and     

approved by competent engineer officer so as to ensure the soundness of the         

scheme/designs.

  4.     Certain Contractual obligations are required to be met by the contractor. 

Deductions from the contractor's bills need to be made for their non compliance where

applicable.  Some such examples are non submission of CPM/PERT programmes.

required testing of samples, not insuring the works where stipulated, non employment of

qualified engineers, non supply of guarantee bends in case of specialists' works whose

durability/serviceability is guaranteed for certain period.

  5.   The following charts if maintained at site will assist in better contract management:

i)        Chart showing name of work, important information like cost, plinth area, number

of storeys, PA Rate, type of structure, type of foundation, important specifications and

date of commencement/completion.

ii)       List of stores to be procured by the department. their procurement schedule and the

procurement position.

iii)      Procurement schedule of stores to be procured by the Contractor and their present

status.  This should also include the requirement of tools and plants and scaffolding and

centring material etc. at various stages.

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iv)      CPM/PERT work programme also indicating planned and actual progress.

v)       A bar chart showing the planned and actual expenditure.

(c)     Details of extra items/substituted items, deviated quantities and the position of their

approval.

vii)     List of all freak rate items.

7. CONCLUSION:

After the entire study of “PROCESS OF FLOW OF FINANCIEAL CONCURRENCE” in NMDC LTD I come to the conclusion that this approach

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changes the entire outlook of an organization and also the methodology, which an organization follows. Under the topic FINANCIAL CONCURRENCE FLOW I did the analysis of PROCESS OF FLOW FINANCIAL CONCURRENCE. It acts as a mirror, which shows the reputation of corporation and bidders as well.

Tenders are one of the components to know about the financial status & position of the company. It helps to identify the process of indenting internally in the firm with the help of that we arrive the results of proper vetting procedure in any organization and the flow of various documents for approval towards competent authorities.Thus the needs to evaluate the tenders are mandatory for every big and small organization for the development of all aspects whether it relates to technical stream and financial stream.

8. REFERENCES

1. Companies manual (NMDC, KIRANDUL)

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2. Work visit notes

3. DSR for rate analysis in price comparative statement

4. Company bulletins

5. Past tender records

6. websites

www.nmdc.org

www.tender.com

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