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NATIONAL THERMAL POWER CORPORATION LIMITED

MANUAL ON CONTRACT ACCOUNTING SYSTEM November 2002

A.F.FERGUSON & CO. NEW DELHI

Manual on Contract Accounting System

CONTENTS Process No. 01 02 03 04 05 06 07 08 09 10 11 12 Introduction Allotment of party codes Sale of tender documents Accounting of EMD Vetting of Letter of Award and amendments Advance payments to contractors Other Payments & Contract Closing Procedures Payments by International Finance Section Material issued to the Contractor Accounting and recovery for other services Release of security deposit Tax deduction and deposit Provisioning at year-end and computation of capital committments Process Page No 1 3 6 10 13 19 34 36 39 42 44 47

Manual on Contract Accounting System

List of formats
Format Statement of tender documents sold Summary statement of sale of tender documents Schedule of Sales tax and other duties payable Bid opening statement EMD register Advice on EMD release/ conversion Master List of Contracts Contract Payment Register Job Cost Card Payment Release Authorisation Bills register Advances sub-ledger Material issued to Contractors sub-ledger Status of a contractor across all accounts L.C. Register LC Payments Register Advice note for establishment of FLC Conditions of FLC Break-up of FLC value Contract Closing Form: CCP-09 Contract Closing Form: CCP-13 Statement of services provided, charges recoverable Tax Forms Register Statement of TDS payable Statement of provision and TDS deducted thereon Capital Commitment Statement MIR FORMATS List of new parties who have been unsuccessful in tender List of parties whose accounts have not been in operation for three years or more List of EMDs outstanding PRAs received but pending for payment Report on Unadjusted Advances Statement of Payments released against FLC Age Analysis Report of recoveries outstanding against services provided Format No CT/01 CT/02 CT/03 CT/04 CT/05 CT/06 CT/07 CT/08 CT/09 CT/10 CT/11 CT/12 CT/13 CT/14 CT/15 CT/16 CT/17 A CT/17 B CT/17 C CT/18 CT/19 CT/20 CT/21 CT/22 CT/23 CT/24 CT/MIR/01 CT/MIR/02 CT/MIR/03 CT/MIR/04 CT/MIR/05 CT/MIR/06 CT/MIR/07

Legends used in the manual: I Input O Output R Report/Register MIR Management Information Report

Manual on Contract Accounting System

INTRODUCTION The manual on Contract Accounting deals with various aspects of contracting, involving interface of Finance. The processes covered in the manual pertain to allotment of party codes, accounting of sale of tender documents, vetting of letter of awards and amendments thereof. The manual also provides various checks and balances for release of payments to contractors, be it an advance payment or stage/running bills payments through cheques, letters of credit etc. The manual also deals with accounting of materials issued to contractors, accounting of services rendered to contactors, tax deduction and deposit. Provisioning for the year-end and computation of capital commitments is also covered in the manual. Some of the important guidelines for maintaining records such as Contract Payment Register and Job Cost Cards are brought out below. IMPORTANT GUIDELINES 1. A Contract Payment Register (CPR) should be maintained contract wise to provide the consolidated information of a contract across all account heads in respect of advances made, bills processed, recoveries/ deductions made and the net amounts paid since the start of the contract. The CPR must contain the details of contract like contract value, scheduled period of completion, securities like BG, limits of secured advances etc. A master list of contracts should be maintained containing the details of the contracts such as element-wise contract values, period and time of completion and should be updated contract wise with all the amendments issued. In addition Job Cost Card (JCC) is also to be maintained for each contract to record the amount of total expenditure incurred on a particular work. This includes direct payments to contractors, direct debits like material consumption, bank charges, pre-commissioning expenses, allocation of IEDC, borrowing costs and ERV, if any. This serves as the basic document for capitalisation. As soon as a copy of the contract is received in the Works Section, check the party code of the contractor, enter the work order details in the CPR, JCC and identify the account code for the work. The Section In-charge of Works Payments should go through the contract along with its special conditions, technical conditions, pre-award minutes of the meeting etc. and prepare a contract summary indicating the special features of the contract and should ensure that the same are reflected in the system and recorded in the work order file contract-wise. Checklists for release of advance payments, Running Account bills (RA bill) payment and final payments should be prepared by the in-charge of Works Section.

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In case of Corporate awarded contracts, the receipt of debits for release of advances/ other payments from Corporate Centre should be monitored. Further, the debits received for initial advances and other payments/adjustments should be verified with the provisions of the contract and suitably accounted for at site. Material issued to contractor should be valued at the stores issue rate as per the Procurement & Stores Accounting system. The details of materials issued to contractor and consumption thereof should be furnished along with each RA bill/final bill in the relevant proforma i.e. CM01 and CM02 respectively. Material consumption by contractor should be valued based on FIFO basis as per the sub-ledger materials issued to contractor. In case of commissioned assets, where final settlement of bills with contractors is yet to be effected, capitalisation should be done on a provisional basis subject to adjustment at the time of final settlement. In respect of supply-cum-erection contracts, the value of supplies received and accepted at site should be treated as Capital Work-in-Progress. Deposit works should be accounted for on the basis of statements of accounts received/certifications from the executing agency. Claims for price variation should be accounted for on acceptance. The foreign currency liabilities should be restated at the rates of exchange prevailing on the accounts closing dates. A review of balances of CWIP codes and other Account Codes, which remain constant over a period of more than three months should be done by the Section-in-Charge of the Works Section When final bills are recommended for payment, it should be ensured that the date of completion of job is recorded by the Engineer-in-charge (EIC) to facilitate initiation of action for capitalization of such completed works. Liability should be created for all the works done but not paid as at the accounts closing date. The un discharged liability as on accounts closing date in respect of bills received and processed should be credited to a control account and discharged through payment in the next accounting period. The estimated liability in respect of work done for which bills have not been received should be credited to a liability account and the same should be reversed at the beginning of the next accounting period. TDS to be accounted for while crediting the liability account (only year end provision) As and when capitalization takes place pursuant to completion of work and commissioning of system, the details of such assets should be entered in the Fixed Asset Register as per the proforma indicated in the Manual on Asset Accounting.

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Manual on Contract Accounting System

Process : Allotment of Party code Process brief :

Process No : 01

The process deals with the procedure to be followed for allotting codes to the parties by the Contracts Department and their subsequent de-activation in the system. While discharging this function it is to be ensured that: Party codes are serially controlled accounting location-wise across all LOAs / POs One party does not have more than one code Codes for parties whose accounts have not been in operation for three years or more are frozen in the system in order to prevent any unauthorized use of the same. Party codes for bidders new to NTPC, who have been unsuccessful in a tender should also be frozen in the system. Any subsequent operation of such (i.e. frozen) party codes is to be done with the approval of HOD (Materials) in consultation with the HOF. Identification / flagging of SSI units is done at the time of allotting the party codes to facilitate information for disclosure regarding SSI units.

Departments / sections involved in the process Contracts department Finance and Accounts department Works Bill section O&M Bills section

Procedure : Allotment of party code S.No 1 2 Person Responsible Allot codes to the new parties on Contracts receipt of request for tender Department documents. Generate the following lists: Contracts Department List of new parties who have been and F&A unsuccessful in any tender List of parties whose accounts department have not been in operation for three years or more Review the above lists jointly with the Contracts department and freeze the party codes in the system. Manual on Contract Accounting System 3 Activity Frequency Immediately Monthly Remarks

Documents - Records Document Title List of new parties who have been unsuccessful in any tender List of parties whose accounts have not been in operation for three years or more Document Type MIR MIR Format Ref. CT/MIR/01 CT/MIR/02 Frequency Monthly Monthly Distribution Contracts department F&A Department Contracts department F&A Department

Manual on Contract Accounting System

Process: Sale of tender documents Process brief

Process No : 02

The process deals with the procedure to be adopted for sale of tender documents by the Contracts department and accounting thereof by F&A Department. While discharging this function, it is to be ensured that: Only draft/ pay order is accepted for sale of tender documents. Tender documents are issued only against a money receipt (MR) issued by the Cash and Bank section. The sale price of tender documents includes the elements of sales tax or any other applicable local tax and such amount is identified for each tender in order to facilitate the remittance of such tax collected. The Cash and Bank Section verifies the statement of tenders sold and indicates the MR nos. in the statement of tenders sold.

Departments / sections involved in the process Finance and Accounts department Cash and Bank Section Contracts Department

Procedure: Sale of tender documents S. No. 1 Activity Receive request/application for the tender documents Person responsible Contracts department Frequency As and when Remarks

Authorise (on the application) for issue of tender documents and hand over the application to the contractor for deposit of the draft/ pay order with the Cash and Bank Section. Receive the authorized application Cash & Bank As and when form along with the draft / pay section order. Check that the Immediately Request is authorized by the competent authority Draft/ pay order is in order

Manual on Contract Accounting System

S. No.

Activity Follow the procedures as per the Cash & Bank manual for preparation and authorization of BRV and deposit of draft/ pay order in the bank.

Person responsible

Frequency Same Day

Remarks

3 4

Hand over a copy of the MR to the contractor. Receive the MR and issue the tender Contracts document to the contractor. Enter Department the details in the tender register. Receive a statement of tender Cash & Bank documents sold against each tender Section from Contracts Department and endorse the MR reference. Generate a BPV for remittance of Works bills/ the sales tax for the taxes collected O&M bills on sale of tenders. Section/ Establishment section/ Miscellaneous Bills section Verify and authorize the BPV in the As per IWA. system and sign on the hard copy.

As and when Weekly

By the scheduled date

Prepare a challan for deposit of the sales tax and forward the same along with the authorized BPV to the Cash and Bank Section. Receive the challan and the Cash & Bank As and when authorized BPV along with the Section supporting documents. Follow the procedure as per Cash & Bank manual for preparation of cheque/draft for deposit of sales tax. Deposit the sales tax with the concerned authorities. Send a copy of the challan to the section concerned for their records. Generate a schedule of sales tax and Section other duties payable accounts and concerned.

By the scheduled

Manual on Contract Accounting System

S. No.

Activity review the same.

Person responsible

Frequency date

Remarks

Prepare and file the return for sales tax on monthly and yearly basis. Receive a summary statement of Section tenders sold from Contracts Concerned department for reconciliation of amount received against sale of tender documents.

Monthly

Documents - Records Statement of documents sold tender I CT/01 Weekly - Contracts department - Cash and bank section - Cash and bank section - Section concerned

Summary Statement of sale of tender documents Schedule of Sales tax and other duties payable Monthly and year-end returns of sales tax Accounting entries 1) Sale of tender document

I O O

CT/02 CT/03 -

Monthly Monthly Monthly/ Yearly

Bank A/c Dr To sale of tender forms Foreign / Indian currency Cr To sales tax payable Cr 2) Sales tax remittance Sales tax payable To Bank A/c Dr Cr

Manual on Contract Accounting System

Process: Accounting of EMD Process brief This process lays down the procedure to be followed in respect of:

Process No. : 03

Receipt of EMD and accounting thereof Adjustment of EMD against security deposit in respect of successful bidders Refund of EMD to unsuccessful bidders Forfeiture of EMD Review of outstanding balances in EMD accounts

The modes of EMD i.e. draft/ other instruments should be as per the tender document. This process covers EMD received by way of draft/ pay order. The process for custody, extension, release and forfeiture of EMD received in forms other than drafts/pay order is covered in the manual on Bank Guarantees and Other Non-Cash Securities. While discharging this function it is to be ensured that: The drafts/pay orders are checked for their correctness and validity at the time of opening of the tenders. The drafts/ pay orders along with bid opening statement are received in Finance Department immediately on opening of tender. EMD of the unsuccessful bidders is refunded on acceptance of the award by the successful bidder. In case of successful bidders the EMD is converted into initial security deposit. However, if EMD is submitted in the form of BG, the BG is released only on submission of Initial Security Deposit. In case the contract is not accepted by the successful bidder with in the specified time, action for forfeiture is initiated by the contracts department. An EMD sub-ledger is maintained to record tender wise and contractor wise EMD received, adjusted, refunded and forfeited. The total of party wise balances as per the EMD ledger is periodically reconciled with the EMD control account. On award of the contract, tender wise EMD account is closed. At the time of releasing of EMD the amounts due from the same contractor in respect of any other transaction is ascertained and approval is taken from the HOD (Finance) for making adjustments, if required.

Departments/ sections involved in the process Finance and Accounts department Cash and bank section Works bills section

Manual on Contract Accounting System

O&M bills section. Contracts Department

Procedure : Receipt of EMD S.No. 1 Person responsible Receive EMDs in the form of drafts/ Cash & Bank pay orders alongwith bid opening section statement. Verify and enter the details of EMD in the system. Follow the procedures as per the Cash & Bank Cash & Bank manual for preparation section and authorization of BRV and deposit of draft/ pay order in the bank. Generate and issue MR for the draft/pay order received. Record the MR reference on the bid opening statement. Procedure : Adjustment/ Refund of EMD S.No 1 Person Frequency Responsible Receive intimation from the Works Bills/ On acceptance Contracts Department for refund of O&M Bills of award by EMD or for transfer of the EMD to section the successful the Security Deposit (SD) account. bidder Check that the intimation for transfer Works Bills/ Same day of EMD to SD account is as per the O&M Bills terms of the LOA. section Generate a JV for transfer of EMD to SD account Follow the procedure detailed in the manual on Books Section for preparing and authorising JV. Activity Remarks Activity Frequency Same day Remarks

Same day

Manual on Contract Accounting System

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Person Frequency Responsible Generate BPV to refund the EMD Works Bills/ Next day after ensuring that the EMD has been O&M Bills received against the particular tender section and is available. Verify and authorize the BPV in the As per IWA system and sign on the hard copy. Receive the duly authorized BPV Cash & Bank Same day. along with the supporting section documents. Follow the procedure as per Cash & Bank manual for release of payment.

Activity

Remarks

Procedure: Forfeiture of EMD S. No 1 Activity Person Responsible Works Bill / O&M Bills section Frequency As and when Remarks

Receive an IOM from contracts department along with approval of the competent authority to forfeit the EMD Generate a JV to transfer the EMD Works Bill / deposit to EMD forfeited account. O&M Bills Follow the procedure detailed in the section manual on Books Section for preparing, authorising and updating JV. Review of EMD Accounts

Same day

Procedure:

Review of EMD Accounts is to be regularly done by the F&A Department. Outstanding EMDs indicating tender-wise status, expiry of validity of bids should be generated on fortnightly basis. The list should be forwarded to the Contracts Department for review and necessary action. S.No 1 Activity Generate a list of EMDs tenderwise, age-wise, particularly EMDs lying beyond the validity of bids Person Responsible Works Bill / O&M Bills section Frequency Fortnightly Remarks

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S.No

Activity Forward the list to the Contracts Deptt for necessary action.

Person Responsible

Frequency

Remarks

Documents-records Document Title Bid Opening statement Document Type O Format Ref CT/04 Frequency As and when EMD Register R CT/05 As and when List of EMDs outstanding Advice of EMD released/ conversion Accounting Entries: 1) Earnest money received by way of draft / pay order Bank a/c To Earnest Money Deposit - Foreign / Local contractors 2) Dr. Cr. MIR I CT/MIR/03 CT/06 Fortnightly As & When Distribution Cash and bank section Contracts department Cash and bank section Contracts Department Contracts Department Sections concerned in F&A

Refund of Earnest Money received by way of draft/pay order Earnest Money Deposit - Foreign / Local contractors To Bank a/c Dr. Cr.

3)

Transfer of earnest money amount to security deposit account Earnest Money Deposit - Foreign / Local contractors To Security deposit a/c Dr. Cr.

4)

Forfeiture of earnest money received by draft/pay order Earnest Money Deposit Foreign / Local contractors To Earnest money forfeited a/c Dr. Cr.

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Process: Vetting of Letter of Award and Amendments Process brief :

Process No: 04

The Contracts department prepares a Draft Letter of Award (LOA) as per the approval of the award. The draft award proposal is vetted by the Concurrence section of the F&A department, after which the Contracts department prepares the final LOA. Upon acceptance of the LOA by the contractor, contract agreement is entered into within the specified time period and a copy of the Contract Agreement along with copy of vetted LOA is forwarded to the F&A Department In case of exigencies, with the due approval of competent authority, Letter of Intent (LOI) or brief LOA is issued by the Contracts Department. Such LOI/brief LOA is also to be vetted by the F&A Department. The LOI/brief LOA is regularized immediately by issuing detailed LOA. No payment is to be released unless detailed LOA is issued and contract agreement is entered into. In respect of the Letter of Award and amendments it is to be ensured that: The draft copy of contract has been vetted as per the approved award proposal. In case the contract does not provide the firm rate/ amount in respect of sales tax, excise duty, any other taxes and these are subject to the rates applicable as on the date of despatch/execution of work, the executing department/contracts department has indicated the rate/amount of such taxes prevailing and payable during the period of work execution/dispatch of equipment and the same is to be checked by Concurrence Section of F&A Department and thereafter the bill payment section should admit the payment. The contractor bills are processed only on the basis of the finance vetted and the contractors accepted LOA and contract agreement. The value and provisions of securities like BG for Advances, CPGs etc. are as per the amended Contract Value/provisions.

Departments/ sections involved in the process Finance and accounts department Concurrence section Works /O&M Bills section Contracts department

Procedure : Vetting of LOA/Amendments S. No. 1 Person responsible Generate a LOA/Amendment Order Contracts on the basis of concurred and Department approved proposal. Activity Frequency As when and Remarks

Manual on Contract Accounting System

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S. No.

Activity Forward one copy of the LOA/Amendment to the F&A department Concurrence Section Check the LOA/amendment with the approved proposal. Vet the LOA/Amendment. Receive the accepted LOA/Amendment, Contract agreement from Contracts department. Enter the details in the system to create/update: -Master List of Contracts -Contract Payment Register. -Job Cost Card (JCC)

Person responsible

Frequency Same day

Remarks

2 3

Concurrence Section as per IWA. Works Bills/ O&M Bills Section.

Within a day Within a day

Documents Records Document Title Letter of Award Document Type I Format Ref. Frequency As and when Amendments to Letter of Award I As and when Award / amendment proposal Master List of Contracts Contracts Register Job Cost Card Note: Manual on Contract Accounting System 13 Payment I R R R CT/07 CT/08 CT/09 As and when As and when As and when As and when Distribution Executing department FES/Engineering department Works / O&M Bills section Executing department FES/Engineering department Works / O&M Bills section Contract Department Concurrence Section Contracts Department Works/O&M Bills Section Contracts Department Works/O&M Bills Section Contracts Department Works/O&M Bills Section

The computerised system should maintain the original LOA as well as the amendments thereto. The latest amendment should indicate the reference of the previous amendments. There should also be a provision to generate a consolidated LOA inclusive of all amendments for record purposes after execution and closure of the LOA.

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Process: Advance payments to Contractors Process brief

Process No: 05

This process deals with release of advance payments to contractors. The advance payments should be made as per the terms of the contract and can be of the following types. Initial advance Mobilisation advance and machinery advance Secured advance against material Advance against bills

Departments /sections involved in the process Finance and Accounts department Works Bills Section O&M Bills Section Cash and Bank Section Contracts department Engineer-in-charge/Executing department

While discharging this function it is to be ensured that: No advance is given unless provided for in the contract. The Engineer-in-charge / Contract Coordinator checks compliance of all pre-requisites for release of advance payment and forwards the Payment Release Authorisation (PRA) to the F&A Deptt approved by the competent authority as per IWA The advance payments are within the limits provided in the contract for each type of advance. The PRA indicates the current payment as well as the cumulative payment. PRA is controlled serially, contract-wise, nature of payment wise, and Engineer-incharge wise An advance sub-ledger is maintained, giving contract-wise, type wise details of advance made, adjusted and balance outstanding to facilitate monitoring and reporting for each type of advance Un-adjusted advances are analysed at regular intervals as per guidelines to initiate management action for adjustment of the same or to expedite any pending issues to settle the advances in time Advances to sub-contractors are released on the basis of necessary approvals and with the due consent of the main contractor. The amount paid to the sub-contractor should be debited to the main contractor account. Tax at source is deducted and remitted in time as per the statute In case hypothecation of machinery is involved in the case of release of machinery advance, suitable measures like endorsements in the title documents (invoice/RC book etc.), fixing of labels/painting on the body of the machinery, instructions to security

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agencies not to permit the movement of machinery outside plant without approval, have been taken by the executing department and the same is confirmed by Engineer-inCharge while recommending the payment. Procedure: Payment of advance (As per terms of LOA) S.No 1 Activity Receive the invoice along with the request letter for advance payment and other documents from the contractor, as per the terms of the contract. Enter the details of the advance payments to be made in the system. Verify the BGs, if any, and forward to the Finance Department for seeking confirmation from the issuing bank. Follow the procedure specified in the manual on BGs and other non-cash securities for verification/confirmation of BGs. Check the following: Contract provides for advance payment The conditions as per the terms of the contract have been fulfilled and the required documents have been received. The total advance payment recommended till date is within the limits laid down in the contract For release of mobilization and machinery advance, check the following: Machinery is required for execution of work Machinery is new, available at site and hypothecated in favour of NTPC Cost of machinery is reasonable Machinery is owned by the contractor and free from all encumbrance The interest of NTPC in the machinery has been recorded in the insurance taken for the machinery Person Frequency Responsible Engineer-inAs and when charge Concerned Site/ Contracts Coordinator at CC Engineer-inSame day charge Concerned Site/ Contracts Coordinator at CC Engineer-inWithin 3 days charge Concerned Site/ Contracts Coordinator at CC Remarks

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S.No

Activity The fact of hypothecation of machinery is recorded / painted on the machinery and the security agencies have been apprised that machinery should not be allowed to move out of site without prior approval. For release of secured advance against material, check the following: Material is required for execution of work within the next three months Material is received at site in good condition, properly stored and hypothecated in favour of NTPC Cost of material is reasonable Material is owned by the contractor and free from all encumbrance Material is not of perishable/explosive nature Material is linked to execution of one or more items of billing breakup/BOQ and the rate recommended is as per the prescribed policy/guidelines. All taxes and duties have been paid on the material Insurance coverage has been obtained for adequate value and period.

Person Responsible

Frequency

Remarks

Process the invoice for payment. Generate MB and PRA and forward to the F&A Department along with the relevant supporting documents as per the terms of the contract after approval of the competent authority on the PRA & MB. Receive the PRA and MB along with documents and enter the same in the bills register/diary of Works/O&M Bills Section. Check the following with reference to the contract and the PRA: Contract provides for payment of

Engineer-incharge

Same day

Works Bill / O&M Bills section Works Bill / O&M Bills section

As and when

Within 3 days

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S.No

Activity advance. The amount of advance has been calculated correctly The PRA is authorised and all the prerequisites for release of advance have been met as per the conditions of the contract. The requisite BGs have been received in the Cash and Bank Section and got confirmed from the issuing bank.

Person Responsible

Frequency

Remarks

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10

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Prepare an MB abstract after ensuring deduction of taxes at source and any other deductions with complete documents. Generate the BPV. Attach the PRA, MB abstract and other supporting documents and forward it to the competent authority for authorization. Verify and authorise the BPV and MB abstract. Sign the hard copy of the BPV and the MB abstract and update the same in the system Forward the BPV along with a copy of the PRA and MB abstract and other supporting documents for payment to the Cash and Bank section Receive duly authorized BPV along with the supporting documents. Follow procedure as per Cash & Bank manual for releasing payment. Verify the date of payment from Cash and Bank Section/system for computation of interest as and when applicable as per the contract terms. Generate a report indicating the PRAs received but pending for payment, for review by HOF Generate a report on unadjusted advances for review by HOF.

Works Bill / O&M Bills section Works Bill / O&M Bills section Competent authority as per IWA Works Bill / O&M Bills section Cash & Bank section

Same day Same day

Same day

Same day

Same day

12

Works Bill / O&M Bills section Works Bill / O&M Bills section

Same day

13

Weekly

Monthly

Note:

For purposes of computation of interest, the date of the cheque and the date of recovery recorded in the accounts i.e. JV date is to be taken.

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Procedure: Advance (Against Bills) S.No 1 Person Responsible Receive a request letter from the Engineer in contractor with specific reasons for Charge release of payment in advance against bills submitted. Examine the request and get the same Engineer in approved by the competent authority. Charge Forward the approved request to the F&A Department to process the payment. Check the following: Works Bill / O&M Bills The running bill concerned has been Section received in the finance deptt. The bill has been certified by the Engineer-in-charge and the competent authority has approved the request. Determine the amount of advance payable to the contractor as per the policy after prima facie verification of the bill. Obtain approval of the Head of Finance for release of advance, indicating the status of bill verification. 4 Process the payment as per the procedure Works Bill / for release of advance as above. O&M Bills Section Same day Activity Frequency As and when Remarks

Within 2 days

Within 2 days

Procedure: Advances to sub-contractor The procedure for releasing of advances to the sub-contractor would be the same as above. However, it should be ensured that the advance amount is released only after receiving due approvals from Engineer-in-charge and consent from the main contractor. The amount paid to the sub-contractor should be debited to the main contractor account

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Documents-records Document Title Payment Release Authorisation Bills Register Contract Payment Register PRAs received but pending for payment Report on unadjusted advances Advances sub-ledger Accounting entries 1) Passing of contractors claims for advances Advances to contractors for civil works and supply / erection contracts (GOI/ Non GOI parties)/ Advances to contractors - O&M To Income tax/Works Contract Tax deducted at source To Contractors Control a/c (Advance type wise break up would be maintained in the system) 2) Payment of advance to contractor Contractor control a/c To Bank 3) Remittance of tax deducted at source Income tax/Works Contract Tax deducted at source To Bank Dr Cr Dr Cr Dr Cr Cr. Document Type O R R MIR MIR O Format Ref. CT/10 CT/11 CT/08 CT/MIR/04 CT/MIR/05 CT/12 Frequency As and when As & When As & When Weekly Monthly Monthly - HOF - HOF Distribution Works / O&M Bills section

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Process: Other Payments & Contract Closing Procedures Process brief

Process No.: 06

This process lays down the procedure for processing for payment of contractors bills which include the following: On despatch of equipment on FOB, FOR and CIF basis (through LC or by way of direct payment ) On receipt of equipment at site (through LC or by way of direct payment ) Payments for civil works. Payments for erection of equipment Freight and insurance payments Price variation payments Exchange rate variation payments Central Sales Tax (CST), Local taxes etc. Other payments under Consultancy contracts, Civil contracts, O&M contracts etc.

The process also deals with Contract Closing Procedures. In processing and payment of contractors bills the following should be ensured: The bill is passed for the actual quantity of work certified by the Executing Department and at the rates given in the contract. Payments for post award variations including extra items/substituted items are made after due approval of the competent authority. In case the contract does not provide the firm rate/ amount in respect of sales tax, excise duty, any other taxes and these are subject to the rates applicable as on the date of dispatch / execution of work, the executing department/contracts department has indicated the rate/amount of such taxes prevailing and payable during the period of work execution/dispatch of equipment and the same is to be checked by Concurrence Section of F&A Department and thereafter the bill payment section should admit the payment. Recovery of advances, security deposit, retention money, income tax etc. has been made from the bills before release of payments. Recoveries, if any, on account of vehicle hire charges, FQA charges, material issued on loan, interest on loans etc. have been made before release of the payment. The Engineer-in-charge has furnished, in the prescribed formats, the details of the material issued and material consumed respectively and also confirm the availability of the balance material at site. Recovery, if any, on account of material transactions is to be advised as soon as the same is due. Payments are made only against duly approved Contract Journal Vouchers.

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A contracts payment register is maintained to record contract wise bills passed, element-wise deductions made and the net payments made. The balances in the contracts payment register are reconciled with the balances in the sub-ledgers. The approved billing break-up is available before release of progressive payments. Lot must be defined in the billing break-up. In case of part shipments where consolidated rate is provided in the LOA, the Engineer-in-charge is to make the rate analysis and get it concurred by Finance for release of payment at part rates. Progressive payments for despatch, receipt, freight and insurance, price variation claims are linked with each other consignment-wise. For any shortages/defects identified at the time of issue of MRC, recoveries towards dispatch payment already released are made immediately. While releasing Price Variation payment, the applicable dates and indices thereof are verified. PV invoices for all the supplies and work completed are submitted to account for both positive and negative price variations.

Departments / sections involved in the process Finance and Accounts department Works Bill section O&M Bills section Cash and Bank section Concurrence Section Contracts department CC/Site Executing Department at Site

A. Procedure: Payment against dispatch of equipment (Direct payment) S.No 1 Activity Receive invoice along with the requisite documents from the contractor. Enter the details of the payments to be made in the system. 2 Check the following: The conditions as per the terms of the contract have been fulfilled and the required documents have been received. The payment claimed by the Person Responsible Engineer-incharge Concerned Site/ Contracts Coordinator at CC Engineer-incharge Concerned Site/ Contracts Coordinator at CC Frequency As and when Remarks

Within 5 days

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S.No

Activity contractor is as per the billing breakup. Unconditional Material dispatch clearance certificate (MDCC) is issued by the QA / Inspection Department Original LR/RR/Bill of Lading in name of NTPC, as proof of despatch of equipment is enclosed. In case of bought out items, which are directly despatchable to NTPC, sale in transit endorsement is made. Transit insurance coverage is available Packing slips indicating details of equipment and LR/RR/Bill of lading nos. are enclosed. Compliance of any other conditions mentioned in the payment terms of contract.

Person Responsible

Frequency

Remarks

4 5

Process the invoice for payment. Engineer-inGenerate MB and PRA and forward to the charge F&A Department along with the relevant supporting documents as per the terms of the contract after approval of the competent authority on the PRA and MB Receive the PRA and MB along with Works Bill documents and enter the same in the bill Section register/diary of the Works Bills Section. Check the following with reference to the Works Bill contract and the PRA: Section Contract provides for the payment claimed. The rates are based on the rate as per billing break-up. The PRA is duly authorised and all the pre-requisites for release of payment against despatch have been met as per the conditions of the contract. Prepare an MB abstract and forward the same for authorisation of the competent authority as per IWA along with complete

By next day of completion of checking

As and when Within 5 days

Works Bill Section

Same day

Manual on Contract Accounting System 23

S.No 7

Activity documents. Generate the JV and BPV, attach the PRA and other supporting documents and forward it to the competent authority for authorization. Verify and authorise the JV and BPV. Sign the hard copy of the JV and BPV and update the same in the system Forward the BPV along with a copy of the PRA and MB abstract and other supporting documents for payment to the Cash and Bank section Receive duly authorised BPV along with the supporting documents. Follow procedure as per Cash & Bank manual for releasing payment

Person Responsible Works section Bill

Frequency Same day

Remarks

8 9

Competent authority as per IWA Works Bill / O&M Bills section Cash & Bank section

Same day Same day

11

Same day

Procedure: Payment against receipt of equipment (Direct payment) S.No 1 Activity Enter the details of equipment received at site in the Material Inward Register (MIR). Allot MIR no., which is serially controlled contract-wise and billing breakup-wise. Person Responsible Engineer-incharge Concerned Site Frequency As and when Remarks

Link the receipts with dispatch payments made. Prepare and forward to the contractor the Engineer-inMaterial Received Certificate (MRC) after charge physical inspection of the equipment. Concerned Site Receive invoice along with MRC and Engineer-inrequisite documents from the contractor. charge Concerned Enter the details of the payments in the Site system. Check the following: Engineer-incharge The conditions as per the terms of the Concerned contract have been fulfilled and the Site required documents have been received.

As and when

As and when

Within 5 days

Manual on Contract Accounting System 24

S.No

Activity

Person Responsible

Frequency

Remarks

The payment claimed by the contractor is as per the billing breakup. All covenants applicable for release of payment against receipt are complied with such as: Unconditional MRC is issued Equipment is covered under storage and erection insurance Indemnity bond has been executed in case equipment is handed over to the contractor for erection Compliance of any other conditions mentioned in the payment terms of the contract. Process the invoice for payment. Engineer-incharge Generate MB and PRA and forward to the F&A Department along with the relevant supporting documents as per the terms of the contract after approval of the competent authority on the PRA.and MB. Receive the PRA and MB along with Works Bill documents and enter the same in the bill Section register/diary of the Works Bills Section.

By next day of completion of checking

As and when

Follow the balance procedures specified for release of dispatch payment as above. Note: In case of spares payment is to be released against SRV. Procedure: Payment under Inland Letter of Credit (ILC) S.No 1 Activity Receive advance copy of the LC documents from the contractor/bank and verify the same w.r.t. the terms & conditions of the LC. Intimate the acceptance or otherwise of any discrepancy noticed in the advance copy of documents to Cash & Bank section for intimation to the bank. Receive the negotiated LC documents Person Responsible Works Bills Section/ IF section at CC/ Contracts deptt. Works Bills Section/ Contracts deptt. Cash and Frequency As & When Remarks

Same day

As and when

Manual on Contract Accounting System 25

S.No

Person Responsible from the bank, update LC Register and Bank Section forward the documents to the Works Bill at Site Section. Forward the copy of LC documents to the Works Bills Executing Department. Section/ IF section at CC In case of dispatch payment original LR/RR/BoL should be sent to the executing department. Receive the debit advice from the bank. Cash and Bank Section Follow the procedures as per the manual Works Bills on Cash & Bank for accounting thereof. Section/ IF section at CC/ Contracts

Activity

Frequency

Remarks

Same day

Within 2 days

Procedure: Payment under Foreign Letter of Credit (FLC) S.No. Activity Person responsible Bill Frequency As & when Remarks

Opening of Foreign LC (FLC) 1 Receive two copies of the advice note for Works establishing foreign LC in the prescribed section format from the Head of the Contracts department along with a copy of the LOA. Check the following: LOA provides for payment through LC The amount is as per the LOA The Advice Note is duly sanctioned as per IWA The details provided in the format are as per the LOA

Enter the details of the Advice Note in the LC register. Prepare the following documents in the Works prescribed formats: section Conditions of LC

Bill Same day

Manual on Contract Accounting System 26

S.No. 4 5 6

Activity Break-up of LC value Covering letter to the HOD(F) of the concerned T&CC office/CC

Person responsible

Frequency

Remarks

Verify and forward the documents to the In-charge Within a day HOF for approval. Works Bill of receipt section Approve and forward the documents to HOF Same day HOF (T&CC)/ In-charge (CC). (Projects) Receive the duly approved advice note along with the specified documents from the project/ station for opening of the FLC. Prepare a request letter and application to the concerned bank for opening of the FLC. Obtain approval of the competent authority and forward it to the bank. Obtain the FLC and forward a copy of the same to the HOF of the Project/ station concerned. Enter the details of the FLC opened in the LC register HOF(T&CC office) As and when

F&A Section, T&CC office

By the next day

F&A Section, T&CC office F&A Section, T&CC office HOF- T&CC office

Same day

Operation of FLCs 10 Receive documents from the bank and verify the same with the terms of the LC. In case of any deviations/ discrepancies in the documents obtain necessary clarifications from the project/ station concerned and on the basis of the clarifications take necessary action. Receive the debit advice from the bank and ensure that the advice is as per the terms of the LC. Update the LC Register with the details of the advice. Follow the procedure as per Cash & Bank Manual on Contract Accounting System

As & When

11

F&A section T&CC Office

As and when

Same day

27

S.No.

Activity manual for accounting for the bank advice. Raise an IUA on the project/ station concerned, as per manual on Books Section and forward the same to the unit along with the debit advice and the other documents received from the bank. Generate a project/ station-wise statement of the payments released during the period on account of the project/ station and the IUA raised thereon and forward to the project/station concerned. Receive IUA from T&CC, update the LC register with the details of the advice. Account for the advice as detailed in the manual on Books Section.

Person responsible

Frequency

Remarks

12

F&A- T&CC Office

Monthly

13

Works Bill section -site

As and when

Procedure: Other direct payments- Running bills under Erection/Civil/Consultancy/O&M contracts, PV/ERV etc. S. No 1 Person Responsible Receive invoice along with approved copy Works Bill / of the MB abstract, PRA and material O&M Bills consumption statement where required section from the EIC. Verify the invoice. Carry out the Works Bill / following checks: O&M Bills section The cumulative work done is as per the MB abstract and is within the total quantity as per the contract/ approved deviations. The rates are as per the contract/approved rates for deviations. Make the deductions/ adjustments in respect of the following, as applicable as per the terms of the contract: Taxes (such as TDS, Works Contact Activity Frequency As and when Remarks

Within 5 days

Manual on Contract Accounting System 28

S. No

Activity Tax, etc) as per the provisions of the respective Acts. Unadjusted advance Recoveries pending against the contractor on account of rent charges, auto base charges, FQA charges etc. Recovery on account of excess material consumption as compared to norms. Deductions on account of liquidated damages in accordance with instructions issued by the concerned Engineer-in-charge Retention money/security deposit Any other deduction as per the terms of the contract / instructions by the concerned Engineer-in-charge

Person Responsible

Frequency

Remarks

Works Bills Section Follow the procedure specified in step 6 to /O&M Bills 11 for release of dispatch payment above. Section Where payment of tax is the responsibility Works Bills of NTPC, calculate the tax payable. Section /O&M Bills Generate JV and BPV as per challan for Section tax payable. Follow the procedure for preparation and authorization of JV & BPV as per manuals on Books Section and Cash & Bank Section. Forward the BPV to Cash & Bank section. Follow the procedure for release of payment as per Cash & Bank manual for Cash & Bank deposit of tax. Section

Prepare an MB abstract.

Same day

Same day

Manual on Contract Accounting System 29

Procedure: Final bill S.No 1 Activity Receive the duly approved final bill of the contract from the concerned EIC along with the following approvals/documents: Final deviation statement Approved rates for deviations, extra items, substituted items Final time extension & approval for levy/waiver of LD for delays Approval for levy/waiver of LD for short performance, if any No demand certificate from contractor Final material reconciliation statement in respect of materials issued to the contractor on FOC/ loan basis and instructions for recovery, if any. No objection certificate from l the departments concerned Receive CCP forms 5, 6, 8, 9a, 9b, 9c, 10 and 11 for site contracts and CCP forms 1 to 11 in case of Corporate awarded contracts. 2 Process the bill for payment Check the following: The conditions as per the terms of the contract have been fulfilled and the required documents have been received Reconcile the payments released with the documents forwarded by the Engineer-in-charge including outstanding balances in advance accounts, retention money, security deposit account, Work Bill / O&M Bills section Within 5days after receipt of all the necessary certificates and documents Person Responsible Work Bill / O&M Bills section Frequency As and when Remarks

Manual on Contract Accounting System 30

S.No

Activity material accounts. The total cumulative work done is as per the MB abstract and is as per the total quantity indicated in the final deviation statement. The rates are as per the contract and as per the approved rates for deviation.

Person Responsible

Frequency

Remarks

Make the deductions/ adjustments in respect of the following, as applicable: Taxes (such as TDS, Works Contact Tax, etc) as per the provisions of the respective Acts Unadjusted advances as per the terms of the contract Recoveries pending against the contractor on account of material issued to contractors on FOC/loan basis, rent charges, auto base charges, FQA charges etc. Deductions on account of liquidated damages in accordance with the terms of the contract and instructions issued by the concerned EIC Retention money as per the terms of the contract Any other deduction as per the terms of the contract / instructions by the concerned EIC while

Ensure the following processing the final bill:

All un-adjusted balances lying on account of advances, recoveries, material issued on FOC/ loan basis, etc have been adjusted in the final bill

Manual on Contract Accounting System 31

S.No

Activity

Person Responsible

Frequency

Remarks

The total amount withheld (if any) is equivalent to the amount stated in the contract for defect liability. Adjustment to fixed assets with reference to the provisions made Prepare MB abstract. Works Bills Section Follow the balance procedures (6- /O&M Bills 11) specified for release of dispatch Section of payment above.

Same day

Procedure: Contract Closure S. No 1 Activity Prepare the certificate (CCP No 09) after ensuring the following: the contractors account has been reconciled all recoveries have been made Prepare the certificate (CCP No 13) on release of BG/ Indemnity Bond, etc. Obtain the approvals of the competent authority and forward the certificates to the Contract Department for contract closure Receive security deposit release authorization from the Engineer-incharge Reconcile the security deposit/retention money available, make recoveries, if any, as per CCPs. Check the security deposit/retention money release proposal. Prepare an MB abstract. Follow the balance procedures (611) as specified for release of Manual on Contract Accounting System 32 Person Responsible Work Bill / O&M Bills section Frequency As and when Remarks

2 3

Cash & Bank Section Work Bill / O&M Bills/ Cash & Bank Section Work Bill / O&M Bills/ Cash & Bank Section Work Bill / O&M Bills/ Cash & Bank Section Work Bill / O&M Bills/ Cash & Bank Section Works Bills Section /O&M Bills Section

As and when As and when

As and when

Within 5 days

Within 5 days

Same day

S. No

Activity despatch payment above.

Person Responsible

Frequency

Remarks

Document - Records Document Title Contract Payment Register Bills Register Materials issued to contractor sub-ledger Measurement Book Status of a contractor across all accounts LC register LC Payment Register Advice note for establishment of FLC Conditions of FLC Break-up of FLC value Statement of Payments Released against FLC CCP-09 CCP-13 Document Type R R R I/O O R R O Format Ref CT/09 CT/11 CT/13 CT/14 CT/15 CT/16 CT/17 A Frequency As and when As and when As and when As and when As and when As and when As & When As and when Distribution - Works/ O&M Bills section - Works/ O&M Bills section - Works / O&M Bills section - Works/ O&M Bills section - Works/ O&M Bills section - Works/ O&M Bills section - Works/ O&M Bills section - F&A - Contracts Department - T&CC - F&A - T&CC - F&A - T&CC - Units concerned F&A T&CC F&A T&CC

O O MIR O O

CT/17 B CT/17 C CT/MIR/06 CT/18 CT/19

As and when As and when Monthly As and when As and when

Accounting Entries 1) For despatch payments, where ownership passes to NTPC on despatch Material/Equipment-in-transit To Contractors Advance A/c To Tax deducted at source (if applicable) To Contractors Control A/c. (for amount payable) To Provision for liability(for balance payment) Manual on Contract Accounting System 33 Dr. Cr. Cr. Cr. Cr.

In case of foreign currency contracts, the liability for balance payment is to be made at the rates of exchange prevailing as on the date of dispatch. 2) For dispatch payments, where the ownership continues with the contractor

Manual on Contract Accounting System 34

Contractors Advance A/c To Tax deducted at source (if applicable) To Contractors Control A/c. (for amount payable) 3) Payment for receipt of material Capital Work-in-Progress/Equipment-under-inspection Exchange rate variation control A/c To Contractors Advance A/c/M-I-T A/c To Initial Advance A/c To Tax deducted at source (if applicable) To Contractors Control A/c. (for amount payable) To provision for liability(balance payment)

Dr. Cr. Cr.

Dr. Dr/Cr. Cr. Cr. Cr. Cr. Cr

In case of foreign currency contracts, the liability for balance payment to be made at the rates of exchange prevailing as on the date of receipt. The exchange rate variation arising on receipt payments in case of contracts where the ownership had already passed to NTPC on dispatch should be routed through the ERV control A/c for disclosure purpose.

4)

Processing of RA/Final bills Capital work in progress / Repair and Maintenance a/c To Contractors Advance A/c To Tax deducted at source (if applicable) To Contractors Control A/c. (for amount payable) To Security deposit/retention money A/c To amount recoverable from contractors Dr. Cr. Cr. Cr. Cr Cr

5)

Discharge of liabilities Security Deposit/Retention Money A/c Contractors liability A/c Exchange rate variation control A/c To Contractors Control A/c. (for amount payable) To Provision for liability Dr. Dr. Dr/Cr Cr. Cr.

The exchange rate variation arising on discharge of foreign currency liabilities should be routed through the ERV control A/c for disclosure purpose.

6)

Payments to contractors by cheque Contractors control a/c To Bank a/c

Dr Cr

Manual on Contract Accounting System 35

Process: Payments by International Finance Section Process brief:

Process No.: 07

The process deals with payments released in foreign currency (FC)/multiple currencies for both imports as well domestic purchases. All such payments are released through International Finance (IF) section at Corporate Centre. In addition consultancy contracts awarded on foreign contractors and payments for expatriate supervision are also dealt with by IF section. Payments by IF section are released by way of TT remittances/Drafts, LCs (FLC & ILC), Letter of Authority (LA) or directly through the suppliers/buyers credit (Credits). Payments through FLC/ILC: The procedure for opening and operating FLC has been covered in Process 06. The procedure for release of FC payment through ILC is also the same as that of FLC. Payments through Letter of Authority (LA): LAs or Letter of Instruction (LOI) is established by Government of India in favour of the Contractor/party specifying therein the negotiating bank, which is decided prior to opening of LA/LOI. The payments are released under LA/LOI in those cases where the credits are extended by foreign Governments/ Banks to GOI for projects undertaken by NTPC. THE LA/LOI substitutes for FLC and payment is released to the contractor against submission of documents specified in LA/LOI and the procedure is similar to the negotiation of documents under LC. The funds are sanctioned under bilateral arrangement and after disbursement from the credit to the contractor/ party, the equivalent rupees are deposited with GOI by NTPC. Direct payments through Credits: The payments are released to the suppliers against submission of Admissibility Certificate authorizing payment of sums due to the contractor against submission of documents as stipulated in the payment terms of the relevant contract. The disbursements are made after receipt of such certificate from NTPC and on submission of above said documents by the contractor. TT remittances/Drafts: Payments through TT/Drafts are made for PRA received from Corporate Contracts and from site finance. In the case of PRS from Corporate Contracts, the checking is done by IF section. The procedures are the same as provided in Process 06 for direct payments. In the case of PRS from site finance, the checking is done by site finance in the first instance and is forwarded to IF section. IF section checks that the request for payment is as per the terms of the contract, is approved by the competent authority and is supported by the necessary documents. Payment is released by the banker based on the duly approved request from IF section.

Manual on Contract Accounting System 36

Accounting of payments: The payments are accounted for on the basis of advice received from the bankers as per the procedure in the manual on Cash & Bank. Payments released under LA or directly through Credits, are booked based on intimation from the respective agency at the exchange rate as on the date of payment. While discharging this function, it is to be ensured that: The covenants of the relevant loans/credits are complied with. Before issue of PAC, site finance carries out all the checks as per Process 06. FC exchange rate (forex), is negotiated before release of payments and the amount debited to NTPC is as per the negotiated rate. A summary of payments released on behalf of sites are periodically intimated to and reconciled with sites. The checks specified for release of payments in Process 06 have been made.

Departments / sections involved in the process Finance and Accounts department International Finance Section Site Works Bills Section Corporate Contracts Department

Documents-records Document Title Contract Register Bills Register LC Register Payment Document Type R I R Format Ref CT/09 CT/11 CT/15 Frequency As and when As and when Distribution

Manual on Contract Accounting System 37

Process: Material issued to the contractor Process brief:

Process No.: 08

Materials are issued to the contractors on Free of Cost (FOC) basis or on loan basis as per the terms and conditions of the contract. The accounting process for material issued to and returns from contractor should be as per the manual on Procurement & Stores Accounting. This process provides the accounting system for material consumption and recoveries, if any, from contractors. While discharging this function it is to be ensured that: Materials issued to contractors sub ledger (giving quantity and value information) is maintained account-head-wise for each contract containing material code-wise details to facilitate the following information: Account head wise balances Material item code wise details of receipts and issues in both quantity and value terms for each account heads The total quantity of the materials to be issued and the consumption norms are detailed for each item of the BOQ of the contract. Material is issued to the contractor on the basis of a Store issue voucher (SIV) approved by the Engineer-in-charge. The material issued is initially debited to the Material Issued to the contractor on FOC/ loan basis. The final head of account (i.e. revenue expenditure / capital work in progress) should be debited on the basis of the consumption statement. The material consumption including returns of scrap is computed on the standard consumption norms at the time of bill processing and accordingly credit is given to the contractor. The Engineer-in-charge periodically (physically) verifies the balance material in hand with the contractor. The details of material issued, consumed and balance are certified by the Engineer-in-charge along with the contractor in the relevant forms i.e. CM01 & CM02 and are forwarded along with each RA bill/final bill. In case of materials issued on loan basis as a special case, the Engineer-in-charge has ensured deposit by the contractor of adequate amount covering the cost of material and overheads as per the guidelines. In case the materials are not returned within stipulated time, the deposit is to be adjusted. On completion of contract the Engineer-in-charge has finalised the material consumption against the material issued on FOC basis vis-a-vis the norms and instructions for recovery, if any, have been issued to the F & A Department.

Departments / sections involved in the process Finance and Accounts department

Manual on Contract Accounting System 38

Works Bill Section O&M Bills Section Stores Accounting Section (PSL) Stores Department Executing department

Procedure: Accounting for consumption of materials issued S. No 1 Person Responsible Receive the following documents Works Bill / from the Engineer-in-charge: O&M Bills section -consumption statement containing details of consumption of material for the work done, along with each RA bill/ final bill. Activity Frequency As and when Remarks

-instructions, if any, for recovery for excess material consumed vis--vis the norms. Enter the item wise details of the Works Bill / Within 3 days consumption/ recoveries in the system O&M Bills to update the material issued to the section contractor sub-ledger and generate a JV. Follow the procedure for preparation and authorization of JV as per manual on Books Section.

Documents-records Document Title Material Issued Contractor subledger Statement consumption to of Document Type R I Format Ref CT/13 Frequency Monthly / As and when Monthly Accounting entries 1) Material issued to contractor on FOC Distribution Works Bill O&M Bills Engineer-incharge Works / O&M Bills section

Manual on Contract Accounting System 39

Free Issue / Owner supplied material issued to contractors To Issues to contractors 2) Consumption of material issued to contractors on FOC basis Capital work in progress / Repair and Maintenance a/c To Free Issue / Owner supplied material issued to contractors 3) Return of material by contractors Material returned by contractors a/c To Free Issue / Owner supplied material issued to contractors 4) Recovery for excess consumption of material from the contractor Contractors control a/c To Free Issue / Owner supplied material issued to contractors To Other recoveries from contractors - for recovery in excess of cost of issue 5) Material issued to contractor on Loan basis Material issued on loan a/c To Issues to contractors 6) Return of material issued on loan by contractors Material returned by contractors a/c To Material issued on loan a/c 7) Recovery for excess consumption of material from the contractor Contractors control a/c To Material issued on loan a/c To Other recoveries from contractors - for recovery in excess of cost of issue

Dr Cr

Dr Cr

Dr Cr

Dr. Cr Cr

Dr. Cr

Dr Cr

Dr. Cr Cr

Manual on Contract Accounting System 40

Process: Accounting and recovery for other services Process brief

Process No.: 09

The contractors avail of various facilities like Companys quarters, construction machinery and equipment, laboratory and workshop testing facilities etc. Contractors are generally charged for these services and the charges are deducted from their bills. This process provides the procedure for accounting and recovery for the services rendered. While discharging this function it should be ensured that: The recoveries for services are made at the applicable rates. A contract-wise statement of services rendered and amount recoverable is forwarded by the department extending the service to the Engineer-in-charge concerned on a monthly basis with a copy to the F & A Deptt. The amount recoverable for services rendered is accounted for on accrual basis immediately on receipt of statement from the service-providing department. The recoveries due against a contractor are made by the executing department/ Engineer-in-charge from the subsequent running bill submitted irrespective of the contract for which the service was rendered. Amounts recoverable from contractors, for other services, is periodically reviewed to ensure timely adjustment of outstandings. Tax for the recoveries made from the contractors has been deducted (if applicable) at the rates prescribed Sub-ledgers for debtors for services are maintained contractor/ contract wise.

Department / sections involved in the process Contract department FQA Town ship administration Civil maintenance Electrical Maintenance Auto base Maintenance Work shop Laboratory Finance and Accounts department Works Bill O&M Bills

Procedure: Accounting for services provided to contractors

Manual on Contract Accounting System 41

S.No 1 2 3

Activity Receive an approved statement of services rendered to the contractor from the concerned departments Verify that the rates charged are as prescribed/ approved and check the computations of the amount recoverable Generate a JV for the amounts recoverable from the contractors as per the statement received. Follow the procedure for preparation and authorization of JV as per the manual on Books Section. Verify the recoveries proposed by the Engineer-in-charge while processing the release of payments to the contractor, if recovery not proposed, take up with the Engineer-in-charge and make the recovery Generate a BPV for deposit of the salestax deducted with the concerned authorities. Follow the procedure for generation and authorization of BPV and for preparation of cheques/drafts as per the manual on Cash & Bank section. Prepare a schedule of recoveries outstanding and review the same along with the sub-ledger.

Person Responsible Engineer-incharge/ F&A Deptt. Works Bill/ O&M Bill Section Works Bill/ O&M Bill Section

Frequency Monthly As and when Same day

Remarks

Works Bill/ O&M Bill Section Works Bill / O&M Bill section Works Bill / O&M Bill section/ Cash & Bank section Works Bill / O&M Bill section

As and when

Within the time limit specified

Monthly

Generate a statement of the outstanding recoveries and forward the same to the Engineer-in-charge for review and necessary follow up action Take up the outstanding recoveries in the HOF GMs Monthly Finance Review Meeting

Monthly

Document - Records Document Title Statement of services provided, charges recoverable Document Type I Format Ref CT/20 Frequency Monthly Manual on Contract Accounting System 42 Distribution Engineer-incharge Works Bill/

Document Title

Document Type R MIR

Format Ref

Frequency -

Distribution O&M Bills Contractor Works Bill/ O&M Bills Works Bill/ O&M Bills Engineer-incharge

Amounts Recoverable from contractors sub ledger Age analysis report of recoveries outstanding against services provided Accounting entries

Monthly CT/MIR/07 Monthly

1) Accounting for recovery from contractors Debtors for other services rendered To Hire charges / Misc. receipts / Township recoveries Dr. Cr.

At the time of recovery from the bills credit to Debtors for other services will be given in the JV for the recoveries made

Manual on Contract Accounting System 43

Process: Release of security deposit Process brief

Process No.: 10

This process deals with the procedure to be adopted for release of security deposit (SD) as per the terms of the contract. The Engineer-in-charge should recommend the release of SD and the same should be released through the Works/ O&M Bills sections. Department / sections involved in the process Finance and Accounts department Works Bills Section O&M Bills Section Cash and Bank Section Engineer-in-charge

For release of the security deposit ensure the following, Security deposit is released on completion of work/ compliance of all prerequisites as per the contract, on certification of the concerned EIC. There are no dues outstanding against the contractor and the security amount released is as per the provisions of contract.

Procedure: Release of security deposit S. No. 1 Person Frequency responsible Receive a duly approved release Works / O&M As and when order and MB for release of security Bills section deposit from the concerned EIC. In addition, in case of other than non-cash SD, receive approved PRA. Check the following before release Works / O&M Within 2 days Bills section of security deposit: The release of security deposit is as per the terms of the contract The pre-requisites as specified in the contract have been met. There is no amount recoverable from the contractor. Prepare an MB abstract for release Works Bills of SD. Section /O&M Bills Activity Remarks

On completion of checking

Manual on Contract Accounting System 44

S. No.

Person responsible In case of cash security, generate Section BPV for release of SD. Forward the BPV, MB and release order for authorisation of competent authority as per IWA along with complete documents. In case SD is in the form of BG or other non-cash security, forward the release order and MB abstract for authorisation of competent authority as per IWA along with complete documents. Authorise the MB and release order Competent (in case of non cash security). officer as per IWA Follow the procedure for authorization of BPV as per the manual on Cash & Bank section. Forward the authorized BPV/ release Works Bill / order to Cash and Bank Section for O&M Bills release of SD. section Follow the procedure for preparation Cash and of cheques/drafts as per procedure in Bank Section the manual on Cash & Bank for release of other than non-cash SD. Generate a JV to account for the release of SD in the form of noncash and non-BG. Release the SD in the form of BG or Cash and other non-cash security as per the Bank Section procedure in the BG manual.

Activity

Frequency

Remarks

Same day

5 6

Same day Same day

Same day

Documents-records Document Title Security Release Order Document Type I Format Ref. Frequency As and when Distribution -Sections concerned -Cash & Bank Section

Manual on Contract Accounting System 45

Process: Taxation Matters Process brief

Process No.: 11

This process deals with receipt and issue of relevant concessional forms, the procedure for depositing the tax deducted from contractor bills, maintenance of records and filing of the relevant returns with the authorities. While discharging this functions ensure that: Concessional forms are issued only for eligible purchases/ contracts as per the statutes. Safe custody and proper record of concessfional forms received and issued are maintened. The details in the forms are correct and no liability arises on NTPC on any account. Return on utilisation of concessional forms, if required, are submitted as per the statute. Tax deductions are deposited with the authorities by the due dates specified. TDS certificates are issued and the returns (as applicable) are filed in time. Every receipt and issue of concessional forms is authenticated by the section incharge.

Department / Sections responsible Finance and Accounts department Works Bill Section O&M Bills Section Cash and Bank Section Procedure: Receipt and issue of concessional forms S. No 1 Person Responsible Draw the forms form the authorities Works/ O&M concerned based on the consolidated Bills Section anticipated requirements of F&A department. Enter the details of drawal in the Tax Works/ O&M Forms Register. Bills Section Authenticate the details in the system 3 Section in/charge Fill in the concessional tax form with the Works/ O&M Activity Frequency As & When Remarks

Same day

Monthly/ As

Manual on Contract Accounting System 46

S. No

Activity details of the procurement/ work.

Person Responsible Bills Section

Frequency & When

Remarks

Authorise the form and issue to the Section vendor/ contractor. in/charge 4 5 6 Update the Tax Forms Register with the details of the form issued. File the return of the forms received and issued Carry out periodic physical verification of the concessional forms in hand

Works/ O&M Bills Section Cash & Bank Section

As per Statute Quarterly

Procedure: Deposit of tax deducted from contractors and filing of the returns S. No 1 Person Responsible Generate a statement of TDS payable, Works Bills / including TDS payable on the provisions O&M Bills created, for each type of tax deducted i.e. Section TDS, Works Contract Tax, etc. Fill in the challan for the total amount to be deposited. Generate BPV for deposit of tax. Follow the procedure for preparation and authorization of BPV as per manual on Cash & Bank Section. Forward the BPV and challan to Cash & Bank Section for deposit of tax. Prepare cheque/draft for deposit of tax as Cash & Bank per procedure for payment in manual on Section Cash & Bank Section. Deposit tax and forward a copy of the receipted challan to the section concerned. Receive the copy of duly paid challan Works Bills / from the Cash and Bank Section O&M Bills Section Update the system for challan numbers Generate the TDS certificates (contract Works Bill/ Activity Frequency At month end Remarks

Before the due date

As and when

Within the

Manual on Contract Accounting System 47

S. No

Person Responsible wise) on a monthly basis and the returns O&M Bills as prescribed under the respective statutes. Section Sign the TDS certificates and the Returns. In-charge Forward the TDS certificates to the Works Bill/ contractors concerned and submit the O&M Bills returns with the respective authorities Section

Activity

Frequency time frame specified in the statute Within the time frame specified in the statute

Remarks

Document - Records Document Title Tax Forms Register Statement of TDS payable Accounting entries 1) Deposit of taxes deducted Taxes payable a/c To Bank a/c Dr. Cr. Document Type R O Format Ref CT/21 CT/22 Frequency As & When At the month end Distribution - Works Bill / O&M Bills section - Works Bill / O&M Bills section

Manual on Contract Accounting System 48

Process: Provisioning at the year-end and computation of capital commitments Process brief

Process No.: 12

This process provides the procedure to be adopted for creating provisions and ascertaining the capital commitments for disclosure purposes. A provision is required to be made at the year-end for the work completed but not paid for. All Engineers-in-charge should expeditiously forward the bills including details of consumption of materials relating to the accounting year immediately at the close of the accounting year. In case bills are not preferred by the contractors, the Engineer-in-charge should estimate the value of work done including the consumption of materials. The status of the materials-in-transit and materials-under-inspection as well as the material received at site and accepted but for which the MRC is still to be raised should also to be reviewed and indicated by the Engineer-in-charge to the F&A Deptt. While discharging this function, it should be ensured that: Master list of contracts is updated as and when LOAs/Contracts are received in the F&A Deptt and the total number of contracts is verified with the data available with the Contracts department to ensure that all the contracts have been received. All the amendments are updated in the master list of contracts. Contract payment register is updated with the bills received. Schedule of Material-in-transit (MIT) and material under inspection (MUI) is reviewed periodically and a copy of the same is forwarded to the Engineer-incharge concerned for necessary action. Materials received at site for which bills have not been raised by the contractor are informed by the EICs to the F&A deptt for provisioning. Recoveries to be made from the contractor as well as claims of the contractor are intimated by the EICs to the F&A Deptt for provisioning. The EIC has estimated the provisions with reasonable care so that the estimate is accurate and the TDS is properly deducted. A review of all the contracts is done to ensure complete provisioning in respect of the work done against each contract. TDS is deducted and deposited as per the provisions of the Income Tax Act, 1961 on all the provisions created. Bills in hand pertaining to the financial year are considered for provisioning. In case bills are not raised / received for any contract where provision is created and the TDS in that respect has been deposited, such amounts should be recovered from the contractor expeditiously. Details of the TDS deducted and deposited on account of provisions created at the year-end are to be separately maintained by the Works Bill/ O&M Bills Section

Manual on Contract Accounting System 49

Departments / sections involved in the process Engineerin-charge, site Finance and Accounts department Works Bills Section O&M Bills Section Procedure: Creation of provisions S.No 1 2 Activity Person Responsible Works Bill/O&M Bills Section Works Bill/O&M Bills Section Frequency Year-end Within 2 days . Remarks

3 4 5

Receive contract wise details of the work done but not billed from the EIC concerned. Calculate the provision to be created in respect of the above as well as for the bills received but not processed till the yearend. Prepare a statement of provision to be Works created for all the contracts. Bill/O&M Bills Section Generate a JV for creation of provision Works Bill / and deduction of tax where applicable O&M Bills section Forward the JV along with the liability Works Bill/ statement to the competent authority for O&M Bills approvals. Section Follow the procedure for preparation and authorization of JV as per manual on Books Section. Update the details of the provision made in the Contract Payment Register (CPR). Review the CPR and generate a list of the LOAs for which no provision has been created. Review the list to ensure that in such cases provision is not required to be created otherwise follow up with the Engineer-in-charge for details of the work done Reverse the provision created for those contracts where work is not completed at the previous year-end. While reversing the entry for provision record the amount of TDS deducted and paid as recoverable from the contractor and recover the same

Within 2 days Same day Same day

Works Bill/ O&M Bills Section

Same day

Works Bill section

Beginning of next period

Manual on Contract Accounting System 50

S.No

Activity from the next bill received from the contractor, irrespective of the contract to which the bill pertains.

Person Responsible

Frequency

Remarks

Procedure: Computation of Capital Commitments S.No 1 Person Responsible Generate a schedule of the capital Works Bill/ commitments at the year end in respect of O&M Bills each LOA/ contract containing the Section following: The total value as per the LOA/ contract as per the master list of contracts maintained. The payments released till date including advance payments- as per the Contract Payment Register The provision created at the year-end. Forward the statement to the competent Works Bill/ authority for approvals and to the O&M Bills Engineer-in-charge concerned for review Section Activity Frequency Year-end . Remarks

Same day

Document - Records Document Title Statement of provision and TDS deducted thereon Capital Commitment Statement Accounting entries 1) Provision for works done but not billed / bills not passed Capital work in progress / Repair and Maintenance a/c Dr. To Provision for liability for contractors (Capital works/ revenue works) Cr. Reversible account To Provision for liability for contractors (Capital works/ revenue works) Cr. Non-reversible account TDS payable A/c Manual on Contract Accounting System 51 Cr. Document Type O O Format Ref CT/23 CT/24 Frequency Year-end Year-end Distribution Engineer-in-charge Engineer-in-charge

(Contractor wise record would be maintained for non-reversible provision though it would not be credited to the contractor account) 2) Provision for materials consumed Capital Work in progress Repairs and Maintenance a/c To Free Issue / Owner supplied material issued to contractors Steel / Cement/ Others - Issued against SIV Dr Dr Cr

Manual on Contract Accounting System 52

INDEX of FORMATS Format Statement of tender documents sold Summary statement of sale of tender documents Schedule of Sales tax and other duties payable Bid opening statement EMD register Advice on EMD release/ conversion Master List of Contracts Contract Payment Register Job Cost Card Payment Release Authorisation Bills register Advances sub-ledger Material issued to Contractors sub-ledger Status of a contractor across all accounts L.C. Register LC Payments Register Advice note for establishment of FLC Conditions of FLC Break-up of FLC value Contract Closing Form: CCP-09 Contract Closing Form: CCP-13 Statement of services provided, charges recoverable Tax Forms Register Statement of TDS payable Statement of provision and TDS deducted thereon Capital Commitment Statement MIR FORMATS List of new parties who have been unsuccessful in tender List of parties whose accounts have not been in operation for three years or more List of EMDs outstanding PRAs received but pending for payment Report on Unadjusted Advances Statement of Payments released against FLC Age Analysis Report of recoveries outstanding against services provided Format No CT/01 CT/02 CT/03 CT/04 CT/05 CT/06 CT/07 CT/08 CT/09 CT/10 CT/11 CT/12 CT/13 CT/14 CT/15 CT/16 CT/17 A CT/17 B CT/17 C CT/18 CT/19 CT/20 CT/21 CT/22 CT/23 CT/24 CT/MIR/01 CT/MIR/02 CT/MIR/03 CT/MIR/04 CT/MIR/05 CT/MIR/06 CT/MIR/07

Manual on Contract Accounting System 53

CT/01 STATEMENT OF TENDER DOCUMENTS SOLD

Tender description --------------Tender number ----------------Rate per tender document -------------Sl. No Party Draft/Pay MR Tax Element --------------------Remarks

Nam e

Cod e

Order No. Dat e

No

Date

Amount (Rs)

Prepared by -------------------------------------------------

Authorised by (Cont./Matl. Deptt) Authorised by (C&B Section) ------

Note: The statement to be generated by the Contracts/ Materials deptt. The statement to be authorised by Contracts/ Materials Deptt & Cash and Bank Section

Manual on Contract Accounting System 54

CT/02 SUMMARY STATEMENT OF SALE OF TENDER DOCUMENTS For the month ended ------------------S. No Tender document No No of documents sold Amount (Rs) Basic Tax Total amount (Rs) Remarks

Total No of tender documents sold : Prepared By -------------------------------------------Authorised By -------

Manual on Contract Accounting System 55

CT/03 SCHEDULE OF SALES TAX AND OTHER DUTIES PAYABLE ON SALE OF TENDER DOCUMENTS
FOR THE MONTH ENDED ----------------------------------

S. No

Tende r No. No

BRV Date

Account code

Amount Sales Tax Other Duties

Total

Remarks

Prepared By---------------By -------------------

Authorised

Manual on Contract Accounting System 56

CT/04 BID OPENING STATEMENT

As on-------------Tender description --------------Tender number ----------------Date of bid opening ----------------

Bid Sl. No Name

Contractor Code Form

EMD received

Signatures

Remarks

No.

EMD control No.

Date

Drawn on

Amount (Rs)

Prepared by --------------------------Vetted By ------------------------------

Approved by -----------------------

Note: The statement should be prepared by Contracts/ Materials Deptt and vetted by the Finance member present at the bid opening A copy of the statement acknowledged by the Cash and Bank section should be retained in the bid opening file

Manual on Contract Accounting System 57

CT/05 EMD REGISTER

As on -------------Sl. No of EM D
Contractor NIT Ref No Instrument BRV

Name

Code

Typ e

Re f No

EMD control No.

Date Amount (Rs)

No

Date

Amount

(Rs)

Refund/ Transfer to Security deposit/ Forfeited

Voucher (BPV/ JV)


No

Remarks

Date

Manual on Contract Accounting System 58

CT/06

ADVISE ON EMD RELEASE/ CONVERSION For the period -------------Tender description ---------------

Tender number ----------------Date of receipt of EMD ---------------Sl. EMD No contro l no.


Bidder Tender Ref No Instrument

Voucher (BPV/ JV) No Date


Amount N o

Remarks

Nam e

Cod e

Type

(Rs)

Date

Prepared by --------------------------deptt) ----------------------Note: The voucher reference No to be filled by the Section concerned

Approved by (Contract/ Materials

Manual on Contract Accounting System 59

CT/07 MASTER LIST OF CONTRACTS S. No No LOA Date Amendment s Ref. Date No Contractor Name Code Work Description Work Order No Contract Value (Rs) As per As Original LOA amende d Scheduled date of completion Remarks

Manual on Contract Accounting System 61

CT/08 CONTRACT PAYMENT REGISTER Contractor Name & Code----------------LOA No.-------------------LOA Description ----------------Total contract value - Original value--------------------- Revised value --------------------BANK GUARANTEE FURNISHED No Date Purpose Start date---------------Completion date - Original ------------- Revised --------------Engineer-in-charge -----------------Issuing Bank Amount (Rs/FC) Validity upto Extension Remarks

SUMMARY OF BALANCES Amount of Amount Running / the Bill (Cumulative Final Bill (Gross) Gross) No Date Rs/FC Rs/FC

Equipm ent Cost Rs/FC

Erection Rs

Transport ation Rs

Civil Rs

Others Rs/FC* Mobilisa tion Advance Bill Advance

Advances (Rs/FC) Other Advance Cement Steel Other s

SUMMARY OF BALANCES (contd) Mob Adv Bill Adv Other Adv Steel Cement Others RECOVERIES (Rs/FC) Interest Retention on loans Money W.C. Tax I. Tax Dedn Security Others Total Deducti ons Net Amount Paid (Rs) BPV No and date

Note : * Others wouls include the items of CST, PVC, CST on PVC, Spares, Tools, ED, etc. In case of FC payments, the amounts in INR is also required to be recorded.

Manual on Contract Accounting System 62

CT/09 Contractor Name : Contractor Code : JOB COST CARD BG No : LOA No : Issuing Bank: LOA Date : Value : Contract Ref : Validity : Contract Value : Effective date of contract : Value of Direct Last JV Allocation of Debits IEDC Borrowing No Date cost Date of completion of contract :

Value of work Accounted

Value of Material Consumption Accounted

Total ERV

Manual on Contract Accounting System 63

CT/10

PAYMENT RELEASE AUTHORISATION (PRA) Department/ Section ---------------No --------------------Date ---------------------LOA No.----------------------Date------------Contractor Name-------------------Code-------------Certified for release of Rs/FC.-------------------- as per the details provided below: Invoice/ RA Bill No Date Amount (Rs/FC) Amount Certified for release (Rs/FC) Gross Deduction Net Remarks

Total amount as per LOA--------------------------Amount released till date-------------------------Amount Certified for release--------------------Encl: (supporting documents attached) 1.-----------------2.----------------3.----------------Prepared By ----------------------------

Authorised By --------------------

Note : The PRA should be prepared and approved by the Contracts department and should be authorised by the competent authority. In case of any pre-condition to release of advance (say receipt of BG) then the same should be indicated in the remarks column.

Manual on Contract Accounting System 65

CT/11 BILLS REGISTER As on ----------Sl Contractor Name


N+a me Code

LOA

Bill

Amount Released/ Recommended


Amount (Rs/FC) Date Amount (Rs/FC)

N o

Date

No

Date

No

Date

Particulars

Manual on Contract Accounting System 66

CT/12 ADVANCES SUB- LEDGER For the period -----------

Account Code ---------------Contractor Name ------------Contractor Code -------------Type Voucher No Date No

LOA Date

Particulars Dr Opening Balance

Amount (Rs) Cr

Closing balance Note: The format would be applicable for all sub-ledgers advances/ creditors Additional information (say C Form No in case of creditors) should be provided in the Remarks Column or in a separate column

Manual on Contract Accounting System 67

CT/13

MATERIALS ISSUED TO CONTRACTOR SUBLEDGER


For the period -------------------LOA No and Date --------------Contractor Name ---------------Code ----------------VOUCHER Type No Dat e Opening Balance ISSUES Quantity SIV Rate Account Head---------------------Account code--------------------Material Item code -------------Material Description-----------RETURN/ RECOVERY/ CONSUMPTION Date Quantit Rate Amount Amoun Bill y (Rs) (Rs) t (Rs) No/ SRV Adjustmen t for diff in SIV and recovery rate (Rs) Remarks

SIV No and date

Closing Balance Note: Returns of scrap should be indicated in the Remarks column. Any penal recoveries effected should also be indicated in the Remarks Column of the relevant consumption entry

Manual on Contract Accounting System 68

CT/14

STATUS OF A CONTRACTOR ACROSS ALL ACCOUNT CODES AS ON -------------------------Contractor Name: ----------------------------Contractor Code : ----------------------------Account Code Account Description Work Order Details Balance (Rs) Debit Credit

Net Balance

Manual on Contract Accounting System 69

CT/15

LC REGISTER
Bank: LC Limt sanctioned----------LC Limit available----------S. LC Beneficiary No No. Date Name Code

Contract No

Validity Shipment Negotiatio ns

Amount Rs/FC Re Eqvlt.

Negotiation Date & Amount Date Rs/FC Re Eqvlt.

Balance LC Value Rs/FC Re Eqvlt.

Remarks

Note:LC Register is to be maintained Bank wise for all LCs

Manual on Contract Accounting System 71

CT/16 LC PAYMENT REGISTER Contract/ PO No & Date: Name of Beneficiary : S. No Date of Negotiation No Opening balance Invoice Date LC No & date : LC Validity : For Shipment/ Negotiation Validity Extension details: FCY Amount INR Balance LC Value (FCY) Remarks

The details are to be maintained LC wise.

Manual on Contract Accounting System 72

CT/ 17 A

Reference No : ------------

Date : ------------ADVICE NOTE FOR ESTABLISHMENT OF FOREIGN LETTER OF CREDIT

Sl. No 1 2 3 4 5 6 7 8 9

Particulars

Details

10

11 12 13 14 15

Originating Department Contract Co-ordinator Description of package Contract/ P.O. No and Date Name and address of the Party in whose favour the LC is to be established Name and address of the Advising Banker (in case specified by the Supplier) Method of advising LC (letter/ fax. Etc.) Amount for which LC is to be established/ enhanced/ reduced Indicate the following parameters as required in the LC: a) Port/ place of Shipment b) Port/ place of Discharge c) Delivery terms as per contract d) Validity of LC required (date) - For shipment - For negotiation e) Partial shipment f) Transhipment g) Country of origin to be mentioned in the LC In case of CIF Contracts, indicate the following a) Percentage of insurance cover to be specified in the LC b) Risks to be covered in the Insurance Policy Indicate clause reference in the LOA/ contract governing the LC terms and conditions Bank charges relating to LC opening and negotiation in India to be borne by Bank charges outside India to be borne by Additional/special condition to be incorporated in the LC (if any) Particulars of CPG/ BG No & date - Amount - Issuing Bank - Valid till

Allowed/ Disallowed Disallowed/ Allowed

Beneficiary/ NTPC Beneficiary/ NTPC

Manual on Contract Accounting System 73

ADVICE NOTE FOR ESTABLISHMENT OF FOREIGN LETTER OF CREDIT

Sl. No 16

Particulars

Details

Particulars of Import License - License No - Date of issue - Amount - Valid till


If items are to be imported under Open General License (OGL) the following are to be completed :

17

18 19 20

a) Foreign Exchange sanction No (if applicable) b) Indicate the OGL appendix No of the Import policy under which the above import of goods are covered c) Confirm that the items being imported are not included in the banned/ restricted/ cannalised list in the policy Expected date of issue of MDCC Expected date of shipment for which this LC is being established Quantity of Equipment covered in LC

Unit price Payment Terms

: :

Manual on Contract Accounting System 74

CT/17 B
CONDITIONS OF FOREIGN LETTER OF CREDIT

Purchase Order No & Date Sl. No


A Particulars

Details

General Terms and Conditions 1 2 3 4 Name and address of beneficiary Name and address of advising bank Method of advising LC Validity details (in the country of beneficiary)

Airmail Full text Telex Expiry date --------- quarters from the date of establishment Valid for shipment upto -------Valid for negotiation upto ---------

LC coverage - Equipment portion - Spares portion Merchandise details - Equipment - Materials Shipment Terms & Conditions

--------% FOB+ ------% Insurance +----% Freight ------% CIF Package ----Project ------

1 2 3 4 5
C

Delivery Terms Port of shipment Port of discharge Partial shipment Transshipment

FOB/CIF ----Allowed/ Prohibited Allowed/ Prohibited

Documentary conditions (for releasing despatch payment) 1 2 ( whichever is applicable) ( ) Signed commercial invoices in sixtuplicate certifying that the equipment/ spares are in accordance with Openers letter of award No. / Purchase Order No. ( ) Airway bills duly signed, stamped and marked Freight prepaid/ to pay made

Manual on Contract Accounting System 75

in favour of purchaser (original + 2 copies) OR


( ) Full set of clean on board Bill of Lading to order blank endorsed marked Freight prepaid/ to pay made in favour of purchaser

3 4 5 6 7 8

9 10

11 12 D 1 2 3 4 5

) Detailed packing List 3 copies ) Original Material Despatch Clearance Certificate issued by NTPC (or waiver thereof) ( ) Factory/ Manufacturers test/ inspection certificate 3 copies ( ) Insurance Premium receipt 3 copies ( ) Freight paid memo 3 copies ( ) Insurance policy or certificates in duplicate Covering marine, war-risks, strikes, riot and civil commotion (SRCC), malicious damage, theft, pilferage and non-delivery (TPND), Institute cargo clauses (all risks), damage by rain, sea, fresh water, mud, hooks, and/or contract with other cargo irrespective of percentage of WPA/ FPA from shippers warehouse to Openers warehouse plus 60 days. The policy shall not be for less than ----------------- of CIF value of equipment/ spares shipped and shall be in the same currency as the Letter of Credit. All claims payable in India ( ) Sellers certificate confirming that the advance documents as required under clause ----- of the Letter of award/ Purchase order has been sent to the purchaser along with the consignment ( ) Sellers certificate confirming that cable has been sent to the purchaser and the named insurance company within 24 hours of delivering the goods into the charge of the air/ sea carrier giving full particulars for the purpose of insurance as per clause ------- of the contract/ purchase order 1 copy ( ) Warranty Certificate as per clause ----- of Contract/ Purchase Order - 1 copy ( ) Certificate of compliance as per clause ------of Contract/ PO - 1 copy Additional conditions (as provided in the PO/LOA) ( ( ( ( ( ) All bank charges outside India shall be to the account of the beneficiary ) Shipping documents must be prepared for negotiation within ------ days of shipment ) Insurance and freight shall be payable at actuals on production of documentary evidence subject to the ceiling indicated in the LC break-up given in Annexure III ) The negotiating bank shall send telex intimation of date and amount of negotiation to the opening bank two working days before negotiation ) This LC is covered under OGIL ---- of present export and import policy

( (

Manual on Contract Accounting System 76

CT/17(C)
BREAK-UP OF LC VALUE

Contract/ Purchase Order No & Date : S. No Item Description (as per contract/ PO) Quantity Unit FOB price (FC) Total FOB (FC)

Total FOB price Add: Freight & Insurance Total CIF price Less Indian Agents commission payable, if any Amount payable under LC Authorised By ----------------------- (HOD Executing Department)

Manual on Contract Accounting System 77

CT/18

CCP-09
PAYMENT RECONCILIATION CERTIFICATE This is to certify that all the ayments released to the Contractor in respect of above mentioned LOA/Contract have been reconciled with provisions of the Contract documents as per detail enclosed. NAME OF CONTRACTOR LETTER OF AWARD No. & DATE NAME OF PACKAGE PROJECT : CONTRACT VALUE DETAILS OF PAYMENT : INVOICE NO. DATE AMOUNT PAID (Rs) DESCRIPTION OF PAYMENT : : :

Date

Signature

Manual on Contract Accounting System 78

CT/19 CCP-13 CERTIFICATE FOR RETURN/RELEASE OF BANK GUARANTEES/INDEMNITY BOND

NAME OF PACKAGE
Letter of award No./ Contract No. Name of the Contractor Name of the Project This is to certify that the under-mentioned Advance Payment bank guarantee received for the above-mentioned contract/LOA has been discharged.

BG No. & Date Date :

Amount

Discharged on

NTPC Ref. Signature

Manual on Contract Accounting System 79

CT/20 STATEMENT OF SERVICES PROVIDED CHARGES RECOVERABLE

No Date

Department Department code Engineer In charge


Recovery Details JV No Remarks Date Amount (Rs)

Contractor Name Code


Details of services provided

Type of service

Period (specify the date)

Particulars

Rate

Amount (Rs)

Prepared By -------------------------------------

Authorised By ---------------------

Note: The document to be raised for all types of services provided to the contractor autobase, hire of equipment, allotment of township houses, etc.

Manual on Contract Accounting System 80

CT/21 TAX FORMS REGISTER Receipt of Forms: Sl. No. From ToDate.. Sl. No of Contract Form No Date Contractor Name Code Tax Amount Tax Form Issued On (date) No. Amount (Rs) Remarks

Prepared By -----------------------------------

Authorised By ----------------

Manual on Contract Accounting System 81

CT/22 STATEMENT OF TDS PAYABLE

For the month ended ---------Account head-------------------------Account code--------------------------

Voucher No Date

Contractor Name Code

LOA No
No

Bill Date Amount (Rs)

Amount on which TDS applicable (Rs)

TDS Amount (Rs)

Total

Total

Prepared By -----------------------------

Authorised By -----------------------

Manual on Contract Accounting System 82

CT/23 STATEMENT OF PROVISION AND TDS THEREON

For the year-ended ---------------LOA EI C No Dat e Quantum of work done but Total Last running bill No Dat For Amoun not billed/ Amoun e the t (Rs) bill not t (Rs) period paid (Rs) (4) (5) (6) (7) (8) (9) Details of work done and billing Details of material consumption (FOC basis) Standard Consump Consumpti consumpti tion on unbilled/ on for accounted unaccounte work done for till d for till date date (Rs) (Rs) (Rs) (10) (11) (12) Provisio n Amount (Rs) TDS Deposited Recovered

(1)

(2)

(3)

(13) [(9)+(12) ]

BP V No

Dat e

JV No & Date

Amoun t (Rs)

TOTAL Prepared By ------------------------------Note:

Authorised By ------------------

The statement to be consolidated from the statements received from the respective EICs (in the same format)

Manual on Contract Accounting System 83

CT/24 CAPITAL COMMITMENT STATEMENT


AS ON -------------------------------------

Sl. No Contractor

LOA
Description

No Amount . (as amended ) 3 4

Esacalati on Amount 5

Payments Released Total Advan Progre Amoun ce for ssive t capital payme expend nts iture 6 7 8

Capital Liability Created

Total of Column (7+8+9)

Estimated Amount of Contract remaining (6-10) 11

10

Total Prepared By -------------------------------------------------------Note: Serial No. shall be controlled w.r.t. Master List of Contracts. Authorised By --------

Manual on Contract Accounting System 84

CT/MIR/01

LIST OF NEW PARTIES WHO HAVE BEEN UNSUCCESSUL IN TENDER As on --------------S. No No Tender Date Party Name Remarks Code

Manual on Contract Accounting System 85

CT/MIR/02 LIST OF PARTIES WHOSE ACCOUNTS HAVE NOT BEEN IN OPERATION FOR THREE YEARS OR MORE As on --------------Contractor Name Code Account Code LOA No Dat e Closing Balance (Rs)

Date when account last operated

Rem arks

Prepared by ---------------------

Authorised by ---------------

Note: The balances can be under more than one account for a party, therefore closing balance should be indicated account head-wise The list should be prepared by the F&A Department The list should be authorised by F&A/ Contracts/Materials Deptt

Manual on Contract Accounting System 86

CT/MIR/03

LIST OF EMDs OUTSTANDING As on-------------Sl. No EMD Contr ol No. No Tender Descripti on


Contractor Date of Receipt of EMD Validity period Instrument Remarks (indicate the reasons for delays in release/ adjustment)

Name

Code

Typ e

No

Dat Amount (Rs) e

Total Prepared by ---------------------------

Manual on Contract Accounting System 87

CT/MIR/04
PRAs RECEIVED BUT PENDING FOR PAYMENT

As on -----------------------No PRA Date Issuing Department Received On Contractor Name Code Amount (Rs) Remarks

TOTAL Prepared By --------------------------------------

Authorised By ---------------------

Note: The statement to be prepared by the F&A Department (Works Bill/ O&M Bills section) The reasons for non-processing of the PRA should be recorded in the Remarks column

Manual on Contract Accounting System 88

CT/MIR/05 REPORT ON UNADJUSTED ADVANCES

As on ------------------Account Code -------------------Contractor Name Code Contractor A Sub Total Contractor B Sub Total Total Prepared By ----------------------------Authorised By -------------------LOA No and Package Date No XXXX XXXX XXXX XXXX Voucher Date Amount (Rs) (Dr/ Cr) 0-3 Age analysis (no of months) 3-6 6-9 9-12 Remarks > 12

Note: This report is to be generated for all sub-ledgers maintained for contractors

Manual on Contract Accounting System 89

CT/MIR/06 STATEMENT OF PAYMENTS RELEASED ON ACCOUNT OF FLC Station / Project: S. No No LC Date Value (FCY) Date of Negotiation Invoice No Date FCY Amount INR Balance Value (FCY) LC Validity Period

Prepared By ---------------------------------------

Authorised By -----------

Manual on Contract Accounting System 90

CT/MIR/07

REPORT OF RECOVERIES OUTSTANDING AGAINST SERVICES PROVIDED As on ------------------Account Code -------------------Contractor Name Cod e Contract or A Sub Total Contrac tor B Sub Total Total Prepared By ----------------------------Authorised By -------------------LOA No Pac and kage Date Department Name Code No Voucher Date Amount (Rs) (Dr/ Cr) 0-3 Age analysis (no of months) 3-6 6-9 9-12 Remarks > 12

Manual on Contract Accounting System 91

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