SJVN ARUN-3 Power Development Company Pvt. Ltd. (A Subsidiary of SJVN Ltd. Registered in Nepal)

Arun-3 HYDRO ELECTRIC PROJECT, NEPAL

TENDER No.: PCD-87/2017 [COMPETITIVE BIDDING]

DOCUMENT FOR EXPRESSION OF INTEREST FOR APPOINTMENT/ EMPANELMENT OF STATUTORY AUDITOR FOR THE FINANCIAL YEAR 2073-74

KHANDBARI

MARCH, 2017

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SJVN ARUN-3 POWER DEVELOPMENT COMPANY PVT. LTD EXPRESSION OF INTEREST (EOI) FOR APPOINTMENT/ EMPANELMENT OF CHARTERED ACCOUNTANT FIRMS FOR CONDUCTING STATUTORY AUDIT FOR THE FINANCIAL YEAR 2073-74. SJVN Arun-3 Power Development Company Limited (SAPDC) invites expression of interest for appointment/empanelment of Chartered Accountant Firms for Statutory Audit of the company. The scope of work along with detailed terms & conditions and estimated schedule of fee together with Annexure – I, and II are elaborated hereinafter. The selection of the auditor shall be based on overall suitability of the firm and its experience in the statutory audit of Power sector companies. Preference will be given to firm having its office at Biratnagar or Kathmandu. Interested firms (having requisite experience in Statutory Audit of Power Sector Companies and having its office preferably in Biratnagar or Kathmandu region) may send their application in prescribed format in envelopes super scribing “Appointment / Empanelment of Chartered Accountant for conducting Statutory Audit for the F.Y 2073-74” so as to reach in the office of Superintending Engineer (P&C), SAPDC Project Office, Plot No. 583, Sajak Tole, Koshi Highway, Khandbari-1, Sankhuwasabha, Nepal latest by 15.04.2017. The offer should be submitted strictly as per terms and conditions laid down in the document. The key dates for this Expression of Interest (EoI) are as under: 1. Date and time for availability of Bidding 28.03.2017 to 15.04.2017 (upto 1300 Hrs.) document 2. Earnest Money Deposit NPRs 1,500/(to be submitted in favour of SAPDC and payable at Khandbari in the form of Manager's Cheque/demand draft only) 3. Last date & time for submission of EoI 15.04.2017 Time: upto 1500 Hours. 4. Time and Date for opening of EoI

15.04.2017 Time: At 1530 Hours.

5. Bid validity period

120 days from the last date of submission of bids.

Important Note: - For the purpose of this EOI ‘Firm’ means a Firm of Chartered Accountants include Limited Liability Partnerships.

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SJVN Arun-3 Power Development Company Pvt. Ltd. Selection and Appointment of Statutory Auditor

A) Introduction: SJVN Arun-3 Power Development Company Pvt. Ltd is 100% subsidiary of SJVN Limited (Schedule ‘A’ MINI Ratna Company under the administrative control of Ministry of Power, Govt. of India). A memorandum of understanding (MOU) was entered into on 2nd day of March 2008 between the Govt of Nepal represented by Ministry of water resources & the SJVN Ltd for the purpose of execution of Arun-3 Hydropower project. The detail project report of Arun3 HEP (900MW) has been prepared & submitted to GON by SJVN Ltd. The wholly owned subsidiary company in the name of M/s SJVN Arun-3 Power Development Company was incorporated on 25th day of April 2013 having Registration No. 111808/69/070 with Office of the Company Registrar, Nepal. The registered office of the company is situated at House No. 3, Swagat Marg, Lokanthali, Madhyapura (Thimi)-16 Bhaktapur, Nepal. The Project Development Agreement has been signed on dated 25th November 2014 between GON, represented by the Investment Board of Nepal & SJVN ARUN-3 Power Development Company Pvt. Ltd for execution of Arun-3 Project in Sankhuwasaba Distt. in Nepal. The private land for construction of project has been acquired by the company & the compensation has been distributed. The work for project access road has been awarded to DOR for the execution and the same is in progress. The Major civil works shall be awarded very soon. B) Scope of Work: SAPDC is looking for engagement of eligible Chartered Accountant firm preferably from Biratnagar or Kathmandu Region for carrying out the following job:1. To audit the books of accounts and related records and certify the Balance Sheet, Profit & Loss Account Statement, Statement of Change in Equity & Cash flow statement as per requirement of Company Act of Nepal. 2. To submit report addressed to shareholder/appointing authority, which shall be prepared in accordance with the prevailing laws or in accordance with the audit standard prescribed by the competent body & such report shall state the matters to be set out under the act, as per necessity. 3. The statutory auditor shall, if required, certify the financial statements as per the requirement of lending institution from time to time in international currencies i.e. INR, US $ & EURO etc. 3

C) Audit team: Auditors should deploy suitable teams for undertaking the audit, after a thorough perusal of requirements of appointment letter, terms and conditions contained therein and the Detailed Guidelines for Statutory Audit, ensuring that the size of the audit team is commensurate with the size of auditee unit and the volume of work. The Head of Finance will coordinate with the Audit team for smooth functioning of the audit. It should be ensured that the audit team is headed every time by a Chartered Accountant / (who may be a partner) and shall consist of adequate number of qualified/semi qualified audit assistants of the firm. D) Proposed Audit Fee: The schedule of fee will be as under: i. ii.

The schedule of fee for F.Y. is NPR Rs.70,000/- plus VAT The audit fees will be payable on completion of the Audit & submission of audit report for the F.Y. 2073-74 to the appointing authority and shall be payable within 30 days on submission of the bills. iii. The travelling and out of pocket expenses will be paid subject to production of documentary evidence. The entitlement for the purpose of payment of TA/DA shall be as per SAPDC rule which shall be indicated in detail in the appointment letter. iv. VAT shall be paid extra as applicable on furnishing copy of the registration certificate. v. Tax Deduction at Source (TDS) will be made as applicable. E) Selection Criteria/Evaluation:-

The selection of the Statutory Auditor shall be as per qualitative criteria indicated in Annexure - II which is based on the overall suitability of the firm and its experience in the statutory audit of Power sector companies. The firm securing maximum marks will be selected. Preference will be given to firm having its office Biratnagar & Kathmandu. F) Other Terms and Conditions: The appointment of Statutory Auditors is subject to the following declarations: i. ii.

iii. iv. v. vi.

The Audit firm must not sub contract the -work. In case it is subsequently found at any stage of the appointment process / post appointment that outsourcing has been resorted to, the appointment will be liable for cancellation with immediate effect. The designated team will work in strict confidentiality and will ensure that the information in respect of the operation of the area/ unit is dealt in strict confidentiality and secrecy. A certificate towards maintaining confidentiality to be provided by the Statutory Auditor before commencement of audit. No partner of the Auditors shall be related to Chairman & Directors of the company. Neither the firm nor its partner or associates have any interest in the business of the company. The auditor will be required to issue certificate of Independence before commencement of audit. The auditor / audit Firm must not be holding any assignment as Internal Auditor of the Company. 4

vii. viii. ix.

x.

xi.

The partners holding certificate of Practice issued by the Institute of Chartered Accountant of Nepal are in whole time practice. The Statutory Auditor shall ensure that data given to the Auditor by company and any information generated from the data provided shall not be used by the Auditor for any other purpose. The Auditor / Audit Firm will be debarred from getting the Statutory Audit in future in SAPDC 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 respect in terms of appointment letter. d. If the firm does not adhere to the conditions as per provisions of Companies Act, Nepal. e. If the Firm violates any of the stipulations from (i) to (ix). Jurisdiction of courts: The law of land as promulgated / modified /amended or replaced from time to time shall govern this EOI. Any dispute arising out of or in respect of the contract will be subject to the jurisdiction of District Court of Chainpur Only. Disclaimer: SAPDC reserves the right to accept or reject any or all responses and to request additional submissions or clarifications from one or more Applicant(s) at any stage or to cancel the process entirely without assigning any reason.

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GENERAL INSTRUCTION TO AUDIT FIRMS AND DOCUMENT LIST TO DO LIST A. Instruction to Audit Firms 1. Format for Application must be completely filled in. Incomplete applications will be rejected out-rightly. 2. Please ensure that date of registration of Registered Office / Branch Office(s), date of joining of partners/qualified/semi-qualified assistants into the firm should be invariably indicated in the application. 3. All EOI will be evaluated on the basis of the documents furnished along with application only. No further documents will be called during the scrutiny of EOIs. Any additional documents received, after last date & time of receiving of EOI as stipulated in the notice inviting EOIs, will not be entertained. 4. Since, all the applications will be evaluated strictly on the basis of Selection Criteria as per “Annexure – II”, please avoid attaching unsolicited information / documents in order to ensure processing of applications expeditiously. 5. All documents submitted should be signed by a partner with his name and under the seal of the firm. 6. Any application received after the stipulated date due to any reason whatsoever, will be rejected out–rightly. B. List of documents to be submitted along with the Applications / EOIs Interested audit firm are advised to go through contents of EOI documents carefully and submit all attested copies of the following documents in proper sequence along with the EOIs as described hereinafter: 1) Registration certificate of the firm issued by the Institute of Chartered Accountant of Nepal. Information related to year of establishment of Head Office & Branch Office(s), addresses, details of partners and their membership nos. as indicated in the Certificate will be treated as conclusive and final information for evaluation of EOIs. 2) Membership certificate of the Partners / Qualified Assistants issued by the Institute of Chartered Accountants of Nepal. 3) Certificate/Mark sheets issued by the ICAN in evidence of qualification of SemiQualified Assistants. 4) Copies of appointment orders for statutory audit / statutory audit in Power Sector companies in evidence of experience. 5) The firm must submit a copy of audited balance sheet and P&L Account for the last three financial years i.e. 2070-71, 2071-72 & 2072-73. 6) Copy of PAN/VAT Registration. 7) A cancelled cheque of the Bank to which Fee payments will be made. 8) A copy of complete EOI documents duly signed and documents are to be signed by the partner/owner of the firm along with seal of the firm as a token of acceptance of all terms and conditions.

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Annexure-I

Format of Application 1.

Name of the Firm :-

2. Registration No. of firm :(Institute of Chartered of Nepal) 3. Date of Registration of the firm:4. Details of Head Office & Branch Office(s):Head Office:Address Date of Establishment

Branch Office 1 :Address

Date of Establishment

Contact No(s)/Fax

E-mail

Contact No(s)/Fax

E-mail

(Insert further Branch Office(s), if any) 5.

6.

Details of Partners in the Firm/Limited Liability Partnership :SI. Name of Membership Membership Any other No the Partner No. Status ACA/FCA qualification

Details of Qualified Assistants :Membership SI. Name of No. No the Qualified Assistants

Membership Status ACA/FCA

7. Details of Semi-Qualified Assistants :SI. Name of the SemiWhether Chartered No Qualified Assistant Intermediate

8. Details of Experience in Power Sector :SI. Name of the Year of Audit No Company/Unit

Any other qualification

Date of joining of the firm as Qualified Assistant

Date of Joining the firm as Semi-Qualified Assistants

Turnover of the Company/Unit

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Date of joining of the firm as partner

9. Details of Experience other than Power Sector :SI. Name of the Year of Audit Turnover of the Company/Unit No Company/Unit

10. PAN/VAT No. of the firm :11. Bank details of EFT:i. Bank Name ii. Branch Name, Address & Code iii. Type of account (saving or current account) iv. A/c No. v. Swift Code No. Declaration:I/We, __________________ Partner/owner of the Firm______________, hereby declare that the above information furnished is true & correct to the best of my knowledge and I will abide by the Terms & Conditions set by the company for the Appointment / Empanelment as Statutory Auditors Signature of Partner with Name & Seal of the Audit Firm

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Annexure - II SELECTION CRITERIA (MARKS ALLOCATION) FOR SELECTION OF STATUTORY AUDITORS WILL BE AS FOLLOWS Sr. Particulars No 1 Year of Establishment of the Audit Firm / Limited Partnership Firms (Minimum 10 years) 2 No. of Partners in the Firms / Limited Liability Partnership Firm who are associated with the firm for not less than three years as on date of application 3 No. of Qualified Assistants (Chartered Accountant ) employed with the firm 4 No. of Semi-qualified Assistants (Chartered/Final) employed with the firm. 5 Turnover of the firm (Average annual in the Last three years) At least NPR 25 Lakh 6 Experience of Statutory Audit assignment of Power Sector companies having turn-over. 7

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Points to be allocated ≥ 10 years = 10 points < 10 years = Zero

Max. Points 10 (Ten)

a) 3 (three) for each Partner who is ACA b) 5 (five) for each Partner who is FCA

10 (Ten)

2 (Two) per Qualified Assistant

10 (Ten)

0.5 (Half points) per Semi-qualified Assistant

5 (Five)

Between NPR 25-30 Lakh = 8 Points More than NPR 30 Lakh = 10 Points

10 (Ten)

5 (Five) Points per assignment per year (fraction to be ignored) more than 50 crores to 100 crores 10 (Ten) Points per assignment per year (fraction to be ignored) more than 100 crores Experience of Statutory Audit 5 (Four) Points per assignment per year assignment of other than Power Sector (fraction to be ignored) more than 100 crores to 200 crores companies having turn-over 10 (Ten) Points per assignment per year (fraction to be ignored) turn over more than 200 crores Place of Registered Office/Branch Biratnagar /Kathmandu = 5 Points office of Chartered firm Others = 2 Points Total Points

25 (Twenty five) 25 (Twenty five)

5 (Five) 100

Minimum Eligibility Criteria: i. ii. iii.

The firms should have atleast10 years experience as Statutory Auditor. The average annual turnover of the firm during the last three financial years must be at least NPR. 25 Lakh. The firm must be registered under the PAN/VAT with Inland Revenue Department. For & on the behalf of SAPDC Sd./ Superintending Engineer (P&C) Arun-3HPP, SAPDC, Koshi Highway, Khandbari Distt. Sankhuwasabha, Nepal Mob. No.: +977-9852024908, Tel. No. +977-029-560766 E-mail Address: [email protected] 9