MATERIALS MANAGEMENT MANUAL at Sites

HCC-Materials Management Manual revision -2

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This Materials Management Manual is divided in Seven (7) parts for easy identification. 1. 2. 3. 4. 5. 6. 7. Main Stores Sub Stores Centrals Stores/Transit Stores Purchase Procedure at Project Site/Central Stores Steel Yard Working Procedure Disposal Procedure for Site/Central Stores Formats for All
Materials Management Manual At Site Issue No 1 Revision No. 2 Page No. 145 Date Feb.-22, 2008

Hindustan construction Company Limited is one of the few organizations which has spanning most part of India and also some of the neighbouring countries. We have executed projects of different magnitudes, nature and complexities to the entire satisfaction of our clients. The success and reputation that we enjoy today is a result of the high degree of system, procedures and planning. The objective of this manual on Materials Management is to insure that the good practice that we have followed uniformly in all respects and that our procedures and modalities of work are transparent and become known to all concerned within our organization. This will also help in bringing about clarity of thoughts, visualization of what is to be done and do know how correct and accurate our materials management is. I am ensuring this manual will assist all concerned ensuring that we remain one of best organization. I have no doubt that the revised manual will help us to achieve the goals that we have set for ourselves.

Arun S. Banavali Assistant Vice President President Stores & Inventory Management

Arun Karambelkar Group Executive Vice Procurement & S/C- Outsourcing

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HINDUSTAN CONSTRUCTION CO. LTD.

MATERIALS MANAGEMENT AT SITE MATERIALS MANAGEMENT AT SITE

INDEX

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III

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Contents

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1.0
1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.9.1 1.9.2 1.9.3 1.9.4 1.10 1.10. 1 1.10. 2 1.10. 3 1.10. 4 1.10. 5 1.10. 6 1.10. 7 1.10. 8 1.10. 9 1.11 1.12 1.13 1.14 1.15 1.16

MAIN STORE
Purpose Of Manual Scope Objectives Definition ( Sub Store, Branch, Log Number, Sections ) Sap Addition And Deletion Role, Responsibility & Authority Of Materials Manager / Stores In-Charge Setting & Commencement Of New Stores Procedures Of Materials Handling / Management At Site Commencement Of New Financial Year Goods In Transit Handling Of All Type Materials Storage & Preservation Of All Type Materials Material Accounting & Control Accounting Of Imported Materials Days Coverage For Inventory Control Receipt Of Materials Coding Item Code, Accounts Code, Vendor Code Inspection Of Materials Weighment Sending The Materials Out Of Site Issue Of Materials Stock Verification Raising Debit Note Reconciliation Of Materials Received From Client Closure Preprinted Stationery Records MIS

1-28
1 1 1 2 2 5 5 8 8 8 9 9 10 10 10 11 13 14 15 15 16 16 19 20 20 20 22 22 24

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Sl. No 1.17 1.18 1.19 1.20 1.21 1.22

Contents Accounting Requirements Internal Audit Classification Of Equipment Capital And Non - Capital Items. Environment & Safety Policy Brief note on safety need to follow by Materials Dept. Site. Repairing Procedure

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2.0
2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9

SUB STORE
Introduction Scope Sub Stores Organisation Procedure Receipts Transfer - Main Stores Direct Vendor Receipt - Sub Stores Issues Of Materials Maintenance Of Records/Registers

29-34
30 30 31 31 31 32 32 32 34

3.0
3.1 3.2 3.3 3.4 3.4.1 3.4.2 3.4.3 3.4.4 3.4.5 3.4.6 3.4.7 3.4.8 3.4.9 3.4.1 0 3.4.1 1 3.4.1 2 3.4.1 3

CENTRALS STORES/TRANSIT STORES

Introduction Objective Of Central Store Organisation Procedure Receipt In SAP Security Storage & Preservation Issue Of Material Material Accounting Fabrication Scrap Disposal Procedures Repairs By Outside Parties Bill Passing Transit Material Receipts Central Stores Purchases Bill For Fabrication Work At Central Stores Bill For Repairs Items At Central Stores

35-44
36 36 36 37 37 38 38 39 40 40 41 41 41 41 42 42 42

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Sl. No 3.4.1 4 3.4.1 5 3.4.1 6 3.5.0 3.6.0 Material Code

Contents

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List Of Documents To Be Kept In Form Of Hard Copy Goods In Transit Handling Of All Types Of Materials Storage & Preservation

4.0
4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20

SITE PURCHASE PROCEDURE

Introduction Purpose Purchase Organisation & Function Scope Of Procurement From Site Type Of Material Purchasing Policy Vendor Management Preliminary Work For Vendor Registration Purchase Procedure Inspection Payment Follow Up Cash Purchase Emergency Purchase Client Materials Material From Other Branch Follow Up Of Ho Order Uniform Vendor Coding VMI Management Of Nonmoving, Damaged/Unserviceable Stock FLOWCHART

45-56
46 46 46 47 48 48 49 49 50 53 53 53 53 53 54 54 54 55 55 56

5.0
5.1 5.2 5.3 5.4 5.5 5.6 5.7

STEEL YARD WORKING PROCEDURE

Objective Scope Receipt Issue Formats To Be Used Reconciliation And Care To Take For Minimizing Wastage Rolling Margin

57-61
58 58 59 59 60 60 61

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Contents

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6.0
6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10

DISPOSAL PROCEDURE
Classification Information To Procurement Department At H.O. Invite Offers Release Of Disposal Order From H.O. Collection Of Payment & Issuance Of Delivery Order Delivery Of Goods & Collection Of Sales Tax, If Any Completion Of Disposal Order Raising Of Bill And Refund Of Security Deposit / Excess Money Deposited Disposal From Site Procedures in SAP

62-66
63 63 64 64 64 64 65 65 65 66

7.0

FORMATS

67-70

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1.1 Purpose Stores management is the back bone of any project site or manufacturing activity. Generally, more than 60% of the project cost is the cost of materials. Hence, it is necessary that proper efforts are made to ensure that materials are used in most effective way & also the project material is salvaged to the best possible extent. Meticulous stores management at site will result in plugging the profit leakage attributable to materials wastage.
Effective stores management at site also provides tools to keep track of all materials received at site & thus eliminates the requirement of reprourement on crash basis which in turn may affect the project schedule / cost. The purpose of this Procedure is to provide the outline of the system for effective control for Handling, Storage, Preservation and Accounting of all the incoming materials to protect their quality from deterioration and prevent damage, and to have effective control over inventory.

1.2 Scope

The procedure shall cover all incoming out going materials such as from/ to: Vendors, Clients, Sub-Contractors, Other branches of HCC, returns from the site, items sent out for repairs, sub- stores etc. These materials are broadly grouped as Building Materials, General Store Items Fuels/Oils/Lubricants, Spare Parts, Consumable Accessories and construction assets etc. The Procedure shall cover the goods in transit between two sites. Inventory Management The procedure lays emphasis on effective utilization of inventories, avoidance of stock outs as well as excess inventories. The procedure shall exclude all in-process materials and final project completion material, which are related to the project since these are under control of the operations personnel and not under stores. Materials such as sand, aggregate, stones/boulders, iron ore, murum etc also may be excluded from this procedure since these items are under direct control of civil section & not the stores. Project manager will authorize one civil engineer who will follow same procedure in that section, reconcile these materials monthly & give a copy to stores. Attempt however, should be made to give records of receipts/issues etc. on daily basis to stores so that stores package can give consolidated information. If these Civil Engineers are attached to store for this sole purpose, these items also can be controlled by Stores. Generally, Quality Assurance Procedures cover aspects of Packaging and Delivery of Final Product also. However, this procedure shall not cover these sub-elements - Packaging & Delivery of Final Product, as they are not applicable in Construction work.

OBJECTIVE The objective of the Manual is: To act as a guideline on Policies, Procedures and Systems adopted by the Company. To establish uniform methods and procedures for systems and thereby achieve standardization at all locations. To provide adequate controls in the day-to-day procedures, materials cost.

HCC-Materials Management Manual revision -2

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To list out the format of records to be maintained. To list out details of reports and formats of periodical reporting i.e. monthly, quarterly, half yearly, and yearly.

1.4. Definitions 1.4.1 Sub store: An another store at the same site which functions under the control of the Main store. 1.4.2 Branch: Refers to another location of the Company. This includes a project site and the Central stores at Tara Central Store. 1.4.3 Log number: Log number is a unique number allotted by the Head Office Equipment Department for every equipments which is a capital item procured by the Company.

1.4.4 Sections:
Means the different departments for e.g. Civil, Mechanical Electrical, Planning, Laboratory, Administrative, Quality, Procurement, Survey, etc.

SAP
This is an integrated software as against earlier is land systems Sap is readymade software which can be customized suiting to specific industry requirement. HCCs Processes has been mapped in to the system. Data is on line Moment a record is saved- it is common data any body accessing will be able to see the data. Data is secured. Data viewing is controlled through authorization Accounting & costing transaction is carried out. entries flow as & when different

Data is consistent as same data flows across modules

1.5.1 In SAP Material Cycle- Material Master is defined as under Material Types 1. BLDG- (Building Material) 2. COAS- (Consumable Accessories) 3. CONA-(Construction Aids) 4. FUEL- (Fuel & Oil)

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5. 6. 7. 8. 9.

GENS (General Stores) MSE - (Miscellaneous Service Equipments) NVAL- (None valuated items) SFGD- (Semi finished Goods) SPRS- (Spares)

PR Types in SAP 1. 2. 3. 4. 5. 6. Material- PR Cona -PR MSE -PR Spares- PR IT Non capital- PR Stock Transport- PR

Received classified in SAP as under 1. 2. 3. 4. 5. Receipts Receipts Receipts Receipts Receipts against Purchase Order with out Purchase Order / Cash Purchase against stock Transfer Order (MIGO) of Returnable Materials Vendor / Sub contractor of Free Issue Materials from Vendor

Materials issue classified in SAP as under 1. Issue 2. Issue 3. Issue 4. Issue 5. Issue 6. Issue 7. Issue 8. Issue 9. Issue 10.Issue 11.Issue 12.Issue to to to to to to to to to to to to Reservation Order Project Network Asset Cost Centre Scrap (from blocked stock) other branch ( Non SAP Branch) STO ( Dispatch to other SAP Branch) Subcontractor / Vendor ( Debit basis) subcontractor / vendor ( Free basis) Non returnable items Employee ( Non returnable items/ to be debited , Non PTR items)

Materials will issue on the base of reservation made by respective departments user, Materials reservation done for Material is created by T. Code MB21 for Cost Centre, WBS/ Network, Order Production order, Maintenance Order, Internal Order. In succeeding MRP run it gets converted in to PR if stock is not available. 1.5.2 Branch Transfer of Materials in SAP Branch transfer in SAP is only on the base of site requiting the materials from one branch to another Branch. On the base of requiting dispatching (sending site) will prepared stock transfer P.O and it will releases by Materials Manager and Project Manager than sending site will dispatch the materials and communicate the issue ref no. so that receiving Brach will take the receipt (GRN) under transaction code MIGO. 1.5.3 Physical Inventory verification in SAP SAP functionality allows us to carry out a physical inventory of various material stocks kept in different Storage Location under different plants for Valuation / balance sheet purposes. There are following four types of Physical inventory taking will be carried out as applicable

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1. Continuous Inventory This is perpetual stock taking. Stocks are counted continuously during the entire fiscal year. In this case, it is important to ensure that every material is physically counted at least once during the year. 2. Cycle counting Inventory is counted at regular intervals within financial year. These intervals (or cycles) depend on the cycle counting indicator set for the materials. For example X & A Class items will be counted quarterly, Y & B Class items will be counted six monthly. 3. Periodic Inventory - All stocks are physically counted on the predefined date. In this case, every material must be counted. During counting, the entire storage location must be blocked for material movements. This functionality to be used for Stock taking by HO Team. 4. Inventory Sampling - In Inventory Sampling, randomly selected stocks of the company are physically counted. If the variances between the result of the count and the book inventory balance are small enough, it is presumed that the book inventory balances for the other stocks are correct. This is used for Stock Audit by Auditors. Following process flow will be applicable for all above mentioned four types of Physical Inventory Verification. 1.5.3.1 Physical Inventory preparation 1.1 Create a physical inventory document. A physical inventory document contains, among other things, the following data: The plant and storage location in which the count is to take place when the count is to take place which materials are to be counted for material handled in batches which batches are to be counted 1.2Blocking Materials for Posting Due to the delay between a material movement and the posting of that movement, there is a short-term discrepancy between actual warehouse stock and book inventory. To avoid such a discrepancy during physical inventory, it is recommended to block the materials for posting during the physical inventory. 1.3Print and distribute the physical inventory document. Take print out the physical inventory document for the physical inventory count and pass it on to the people responsible for doing the counting. 1.5.3.2 Physical Inventory Count 1.1. The stocks are counted for individually for the materials in a physical inventory document. 1.2. The count results are written on the printout of the physical inventory document. 1.3. The printout is then directed back to the person responsible, so that he or she can enter the count into the system and analyze it. 1.4. If there is material physically counted at storage location but which is not listed in Physical Inventory Document then the proposed option is to extend the material in the storage location and create an additional Physical Inventory Document for this material and enter the physical count. 1.5.3.3 Physical inventory analysis 1.5. Enter the count results in the system.

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1.6. Determine whether an inventory recount is necessary due to discrepancies 1.7. Inventory differences will be posted collectively for all the material included in the Physical Inventory document, with proper authorization.

1.5.4 Accounting activity during posting of the inventory differences When inventory difference is posted, the material master record is changed; total stock is automatically adjusted to the counted quantity. From the accounting point of view, this means that when the inventory difference is posted, the stock account is debited or credited: If the counted quantity is smaller than the book inventory balance, the stock account is credited with the value = (inventory difference x rate). The offsetting entry is made in the "Expense from physical inventory" account. If the counted quantity is greater than the book inventory balance, the stock account is debited with the value of the inventory i.e. (Qty difference x rate). The offsetting entry is made to the "Income from physical inventory" account. Since the amount posted is calculated on the basis of the current standard or moving average rate, posting inventory differences does not lead to a rate change.

Operational manual for each module will be provided to the user. Details of procedure for operation of SAP available in operation MM model.
1.6 Addition and Deletion: The manual may require modification and establishment of additional procedures. Requests for such modification and additions should be made to the Procurement Department at Head Office -Vikhroli, Mumbai. The request shall be supported by the following information: Reasons for change or modification of specific procedures Suggested procedures The purpose or the objectives, which are sought to be achieved by the suggestions. The amendments to the manual shall specify the date on which they are to become effective and shall only be made by General Manager Procurement at Head Office. The staff & Officers at all levels are expected to study this Manual carefully so as to implement the desired systems and procedures. Any clarifications may be directed to the Procurement Department at Head Office -Vikhroli, Mumbai. 1.7 Role, Responsibility Materials Manager / Store In-charge 1.7.1 The responsibility for operation of the system as per this Procedure shall lie with the materials manager / Store In charge. In this regard, he shall be assisted by Store officer/ Keeper & Other Staff. Materials Managers at site should keep updating our self regarding rules & regulation of explosive act, Pollution control Board, Market affairs (prices), Purchase

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tax, Tax applicable on various type of Scrap sales, disposal of various waste materials, 1.7.2 The In charge (Stores) shall be under the control of the Project Manager administratively for Decision making in relation to this Procedure. However for other functioning he shall report to HeadStores & Inventory Control/Head.

1.7.3 Project Manager shall inform the In charge (Stores) the names of the persons with their specimen signatures, who shall be permitted to sign the document such as indents/rejection memo/ Store-Spare Requisition/ issue slips etc as authorized signatories. The required action will be only if the documents are signed by the authorized signatories. No writing will be in pencil all alterations will be initialed. This list may be updated at the start of every working season by which it can take care of the changes due to transfers & new appointments. In the absence of the in charge (Stores) due to leave etc the person designated by the In charge (Stores) in consultation with the Project Manager will be responsible for managing the stores function. 1.7.4 Materials Manager / Store in charge also responsible for follow up for :

Inspection of material Pending Indents for purchase

Rejected goods not collected by the vendor Stocks lying with Third parties Disposal of scrap

Acknowledgement of transfer to other sites/ sub stores

Material dispatched by other sites not received Material with sub contractors Tools with employees

Material from local vendor as well as H.O. Procurement Payment position with Account Dept. To get sufficient lead-time in procuring materials from indenting Dept. Monthly reconciliation statement such as Steel, Cement etc. with concerned person. Safety of material Perpetual inventory control MIS reports on time Protection of material

Security & lighting at store & material yard, Fire protection, safety
Regular market survey Local vendor development

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This follow can be made verbally, by writing e-mail, Official inter office memo whatever is possible 1.7.5 CHECK LIST FOR MATERIALS MANAGER / STORES IN CHARGE Daily Check list Review of pending purchase indent (Site purchase) Follow of pending Purchase indent from HO Indents should be signed by Materials Manager /Stores in charge.

Ensure no purchase is made without Purchase Indent which is necessarily to be signed by PM or authorized by him. Arrangement for examining goods received as to quantity, quality and condition for evidencing before preparation of MRN/ GRN.

Updation of MRNs,/ DCs/ issue/ Transfer of Materials. Updation of PTR/DTR Updation of tools registers. Perpetual inventory Control/Daily verification of 20 selected items. Whether all the materials are issued only to authorized signatories as

authorized by PM

Updating, plant & machinery register. Records for clients materials / issue / accounting Separate DC books for returnable and transferable items. Scrap disposal to be

maintain. Monthly Check List Filing statutory return(Explosive) Control Over scraps collection & disposal. Damaged, obsolete and waste items to be disposed / written off after proper Control over materials sent out for fabrication

authorization.

Control over debit notes for materials issued to sub-contractors on chargeable basis with mark up for handling charges as per companys rule. Preparation and submission of MIS in time to Site Account / HO. Getting acknowledgement for the materials / P & M sent to other sites. Whether bulk material statement submitted in time. Valuation of stock.

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Quarterly Check List. Stock Insurance Adequacy and Timely Renewal Quarterly reconciliation of tools issued to sub contractors Control Non-Moving Stock and take require action Physical verification of 100% all class items. Construction assets Statement should be sent.

Yearly Check List. Due to financial year closing Physical verification of all items should be done. For Non Moving items certificate should be issue. Data to be sent to HO for House Keeping for Non SAP sites, if it is SAP site it is Furnitures & Fixture statement to made.

not required.

1.8 Setting and Commencement of a New Stores Stores In charge with a computer loaded with stores system should be one of the first Personnel to reach at new site. Read the Stores manual and understand the desired Systems & Procedures. Ensure that the Pre printed stationery required for Material receipt, issues and accounting, is in stock. If not get the same printed. Fist Need to arrange installation SAP with help of HO Ascertain the total storage space required and initiate steps for building the storage in the form of racks, separate stockyard etc. requirement)

Cylinder shed as per cylinder storage rules. (Drawing attached or as per project Lubricant shed (A sample drawing attached but it can be change as required by project
site) Issue counter in store to prevent unwanted entrance.

Cement godown as per site requirement Godown for Admixture, sheathing materials etc. Proper approach Road to store / godown /cement godown.
Obtain storage licenses wherever required for e.g. for diesel, explosives etc. for this help is to be taken from Liaison Officer of the Branch. Ensure that the required furniture and office equipment are in place.

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Obtain a list of persons who would be signing documents such as issue slips, requisition etc as authorized signatories. Obtain the Material code list and understand the system of assigning codes to materials. list).

Understand the reports to be prepared and the periodicity (as details provided in check Prepare a list of all Company personnel to be contacted together with their contact
numbers and addresss in case of need or emergency.

Prepare a list of the nearest hospital, doctor, ambulance, fire brigade, police station
together with addresss and phone numbers. Initiate steps for setting up the computerized system. Obtain the users manual. Manual records in the same format shall be maintained till computer system is established. Undertake Market Survey for various commodities enter into rate contracts for major item to be bought from site.

Keep an account of preliminary expenses with appropriate account code wise.

Ensure proper weighbridge, weigh balance are installed at close proximity of site.

1.9 Procedures of Materials Handling / Management at Site 1.9.1 Commencement of New Season / Year At the end of the financial year i.e. on 31st March once the site accounts have confirmed the closing, all the back-up of the store system is to be taken and will be sent to ISD @ HO. In turn they will send a house keeping programmed that has to be run in stores system and hence entries for new season may be started, it is only applicable for Non SAP projects. 1.9.2 Goods in Transit The material transferred by one site to another will be immediately informed by the site transferring the material to the site to which the material is transferred. A copy of the dispatch document will be sent by the transferring location to the location to which the goods are transferred. The receiving location will receive the document informing about dispatch of material before the material is received. The receiving location will monitor the time taken for receipt based on this document. The delays in receipt should be followed up with the location sending the material. If the receipt is unduly delayed then the same should be informed to the procurement department at Head office. The procedures for Handling, Storage, Preservation and Accounting shall be in accordance with the following steps: 1.9.3 Handling of Materials As and when the materials are received and routed through inward section of Stores to main stores and issued to the actual user, necessary precautions shall be taken for safe handling as per details below: 1.9.3.1 Handling of Cement Cement shall be received in bulk (in bulker, jumbo bags etc) and / or 50 Kg bags. The bag cement shall be unloaded manually while the bulk cement shall be emptied in cement silos

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through pneumatic or any other suitable system. The bulk cement may be transferred to main silo subject to verification of week of manufacturing mentioned in the challan/test certificate. 1.9.3.2 Handling of Explosives Explosives are received from the vendor and shall be need to handle as per explosive act, issued to the user through explosive van. Each type of explosives shall be handled separately so as to avoid mix up and accidents. 1.9.3.3 Handling of Diesel Consumer pump shall be set up for storage / issuance of diesel with the help of oil companies. Diesel bousers / Tankers shall be used for issuing diesel where large fleet of equipments/vehicles is required for the branch. Pump as well as metering device shall be periodically calibrated & record shall be maintained. 1.9.3.4 Handling of Steel Steel shall be unloaded by crane/manually. for further details please refer steel procedure manual. 1.9.3.5 Handling of Construction Chemicals Chemicals shall be unloaded by rolling over the plywood or over the used tyre to eliminate damage. All other materials shall be handled manually and / or using equipments taking necessary precautions to avoid damage. 1.9.3.6 Handling of Cylinder Cylinder should unload directly on a raised platform by rolling over a coir mattress, taking care that the bottom end touches first. Full and empty cylinders are to be stored separately. Cylinders must not be kept in battery room or oil storage room. Oil or grease should not come in contact with the cylinder valve assembly or the regulator fittings. Use red hose for DA cylinder and green hose for oxygen. Never interchange hoses. Use hoses of equal length and do not coil the hoses around regulator of the cylinder.

1.9.4 Storage & Preservation Storage shall be organized by allocating clear separate areas such as: Receiving Section for Incoming Materials Inspection area/ Zone Main Stores for inspected and accepted materials Separate racks for Shelf life items & Hazardous items Rejected Materials Separate racks for repairable items Separate racks for old & used but usable items Scrap-Yard

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Open yards for bulky materials such as steel with proper fencing. Cement shall be stored in separate godown or silos Explosives shall be stored in licensed explosive magazines. Gas cylinders shall be stored in sheds to prevent direct sunlight. Separate area for Lubricants & Oils under a covered shed. Consumer pumps /Bourser for Diesel etc

Sufficient racks and bins shall be provided in main store (Receiving section, main section & rejected materials) for proper stocking & preservation of materials. All areas and locations shall be suitably coded. These Location Codes shall be mentioned on the bin cards as well as in the computer for updating the Stores Ledger. For storage and preservation of cement & explosive refer work instruction attached. At a regular interval (monthly) all the stores item should be inspected by the stores personnel. Any item found rusty, likely to cross expiry date corrective measures shall be taken. A manual register will be maintained for this purpose, depicting the record of such inspection, observations and actions taken.

1.10 MATERIAL ACCOUNTING & CONTROL 1.10.1 Accounting of Imported Materials. We frequently import materials and spares from abroad, which are transported into India mainly by sea-route or sometimes by Air. After their arrival into India our Clearing Agent clears the goods from the Customs Authorities, on payment of Customs duty as per assessment by the Customs Authorities and as mentioned in the Bill Of Entry. The copy of the Bill Of Entry is sent to sites by Procurement Dept., therefore they should not wait for accounting the material and preparation of GRN (Goods Received Note) till Debit is raised from H.O. The Accounting Standard (AS-11) issued by ICAI requires that the currency rate on the date of transaction (in this case Bill of Lading Date) should be considered for GRN.

1.10.2 DAYS COVERAGE Day coverage means control on inventory available will cover the work for how many days and when we require the materials again. Safe Inventory management and calculated working stock will be maintained by way of days coverage. How to Set No. of Days Coverage Norms Target Closing Stock :- Working Stock + Safety Stock (1) (2) Explanation for (1) : Working Stock:-

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This is the average stock that is maintained on site to cater to the day to day production requirement. Formula for Working Stock = = (1/2) X { Inter Receipt Period X Avg. Consumption} + Processing Time Key Definitions:Inter Receipt Frequency is the number of times material is delivered to site in a month. Inter Receipt Period = (Inter Receipt Frequency / 30) Processing Stock:- Processing time is required to prepare the material before it is Issued to section Engineers. For e.g. bending of steel bars in steel yard. It is always computed in days coverage basis. Processing Time = Avg. Consumption Per day processing Qty.

Say, Project A consumes 100 ton of Steel in a month. The Bar bending team can process 10 ton per day on an average. Thus the processing stock required is 100/10 = 10 days stock.

Example 1 o Say the total consumption of Steel for project A in June is 100 ton. o The supplier supplies in 2 consignment of 50 ton each every 15 days. o Processing stock is 10 days as explained in Processing Stock above. In this case:Working Stock = (1/2) X {Inter Receipt Period X Avg. Consumption} + Processing Time = { x 15 (100/30)} + Processing Time = 25 Ton + Processing Time Processing Time is taken in 10 days. If we convert days stock into Ton this will come as 33 Ton (10 x 3.33) Therefore, Working Stock = { x 15 (100/30)} + 33 = 25 +33 = 58 Ton Therefore Working Stock = 17.5 days stock [ 58 / 3.33] i.e. Working stock / one days stock

Explanation for (2) :- Safety Stock Safety Stock = [Working Stock] X [ % of Variation in Consumption ] o If we take above example of Steel, then working stock calculated is for 17.5 days. o As per explanation given below Lead time variation is 2 days. o % of variation due to change in quantities is 20%. Therefore if we apply above formula to calculate safety stock :Safety Stock = [Working Stock] X [ % of Variation in Consumption ] = 17.5 days x 20% variation in consumption

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= 3.5 days 3.5 days stock is due to variation in Consumption Quantities 2 days stock is due to variation in Lead Time. Therefore, total Safety Stock is 3.5 + 2 = 5.5 days stock Key Definitions:1. Variation :- The variations are on account of a) Change in quantities (production rates) b) Change due to lead time variations a) Variation due to change in quantities :Eg. - To calculate quantity variations. If the planned consumption for Tor Steel 32 mm for a season is 1000 MT Reason for variation Estimated variation in qty from plan (MT) Unexpected change in work (progress / shortfall) 50 Unpredictability in rock 60 grades Client Decisions 30 Change in work fronts 60 Total Change 200 % variation in this case would be 20% b) Change due to Lead Time variation :Lead time variations could be due to Road Blockage, Accidents, and Strikes etc. Lead Time variation in days:Eg:- If you have placed an order for 100 ton of steel and the scheduled delivery date is 15th June. However the material is received at site on 13th June or 17th June, then the lead time variation is +/- 2 days. Conclusion:We have calculated Working stock as well as Safety Stock. So lets arrive at Target Closing stock :Target Closing Stock = Working Stock + Safety Stock = 17.5 days + 5.5 days = 23 days The above exercise shows that we should keep 23 days stock as Target Closing stock. (200 MT in 1000 MT)

1.10.3. Receipts of Materials All incoming materials (Procured at site, through Corporate Office, Customer (Client), Subcontractor, Inter Branch Transfer, etc.,) shall be received by Inward Section of stores. In case of heavy/bulky materials (i.e. Bulk/Bag cement, HSD, Steel etc.) the unloading of which is not possible in Inward Section, the same shall be unloaded in respective areas / yards / godowns in

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presence of person concerned from the Main Stores or any other authorized representative , immediately after their weighment at Weigh-Bridge. The Inward Section shall verify the quantity of materials with delivery Challan and purchase order. All purchase orders are prepared by procurement section using HCCS standard software. Copy of every P.O. shall be maintained by stores for record and verification etc. In case of material received from Customer (Client), Subcontractor & Other Branch, the same shall be verified on the basis of Purchase Request in form of letter. The Inward Section will verify that all documents like Excise gate pass, octroi receipt, third party inspection/analysis reports etc as advised in PO have been received. The Delivery Challan will be stamped and signed as follows: Sample Rubber stamp

For HINDUSTAN CONSTRUCTION CO. LTD. Name of the Project-paradip Road project received, subject to Quantity verification and quality acceptance)

Date :

STORES IN CHARGE

Materials received in excess of quantities ordered shall be received after checking up with concerned persons such as Procurement department. Discrepancy if any, shall be intimated to Purchaser, Vendor, Customer (Client), Sub-contractor, Sending Branch as the case may be. Material received from client Materials received from client shall be stored separately so as to ensure adequate control over them. Separate material code shall be assigned to them by suffixing letter C to normal material code so that computer system also shall keep track of these materials and their records shall not get mixed with same materials received from other sources. Separate receipt registers shall be maintained for all materials received from client. On monthly basis list of materials issued by client shall be obtained from the client & it shall be tallied with our receipt information. Differences, if any, shall be settled forthwith. As far as possible such materials shall be drawn directly & not through any nominated agencies such as subcontractors. If material is directly drawn by sub-contractor on our behalf from the client, receipt & issue entries shall be made in the computer system and above periodical reconciliation system shall be followed to ensure adequate control over the materials. It is possible through SAP also in others received option.

Work Returns Used material returned by the section shall be checked before accepting. Only good & usable material shall be taken to stock. It will be accepted at nominal value of 0.01 paisa, otherwise

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when it is issued again; consumption value will be wrongly reflected. Unserviceable material returned by section shall be sent to scrap yard for disposal. Material Receipt Note A Material Receipt Note (MRN) ISO FORMAT NO - HCC F 01 07 18 OR shall be prepared on receipt of the material. The MRN should distinguish the following receipts: 1-Receipt from vendor 2-Receipt from branch ( transfer of material whether from another site or Central stores) 3-Receipts from within the site (i.e. sub store, tools, sub contractor, surplus, and client). 4-Receipt of capital items, will be taken into computer separately like General store, spares etc. 5-Receipt from sub-contactor 6-Receipt from Client 7-Receipt of Construction Assets, Receipt will be taken into computer in a separate module. The Receipt information shall be updated in the computer system for generating the MRN/GRN for qty received vis--vis quantity mentioned in the Challan, rate etc after inspection of materials. The system provides various reports based on receipt of materials. DOC. NO. QR-15(15)/03 Basis QR-15(15)/04 QR-15(15)/05 QR-15(15)/06 QR-15(15)/07 Return) QR-15(15)/08 QR-15(15)/09 QR-15(15)/10 QR-15(15)/11 Client, QR-15(15)/12 Client, DOC. NO. IN ISO FORMAT ISO F N/A ISO ISO ISO ISO F F F F N/A N/A N/A N/A DETAILS Materials Material Material Material Material Received On Cash Purchase

Received From Contractors Received Form Client Received From HCC Branches Returned Back by Site ( Works

ISO F N/A HCC F 01 07 21 ISO F N/A ISO F N/A ISO F N/A

Material Returned by Employees (Tools) Receipts Of Explosives Receipt History of Item(s) Receipt History of Vendor, Contractor,

Branch - Item wise Receipt History of Vendor, Contractor, Branch - Date wise

Receipt report for major items such as steel, cement etc. may be sent to H.O Procurement Department daily. Other reports may be furnished to HO as & when needed. This only required for non SAP Branch. In SAP Branch Daily report for measure construction materials need to send till SAP is stabilized properly. 1.10.4 CODING ITEM CODE, ACCOUNTS CODE, VENDOR CODE Codification will implemented as per new system i.e., SAP System hereafter HO will take care for code Generation for all item and vender code, Accounts code for Non SAP site as per Gide line given in materials code book.

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1.10.5 Inspection The inspection authorities ISO FORMAT - HCC S 01 17 05 shall be informed for necessary inspection for all material by inward section. The inspection authorities shall endorse the quality inspection remarks on the MRN or in the Challan copy or by a separate Inspection report as given in Exhibit 2 The In charge (Stores) shall inform these details to Vendors, Customer (Client), Corporate Office, Sub-Contractors, etc. as the case may be. Inspection must be completed within seven days of receipt of the material. The inspected and accepted materials shall be tagged by Material Tag as under: 1. Specific Materials (HCC F 01 07 24) Yellow Tag 2. Generic items ( V Belt ,Bearing, Hoses) (HCC F 01 07 24 ) Green Tag 3. Equipment & Plant Consumables (HCC F 01 07 24) Blue Tag 4. Rejected Materials (HCC F 01 07 24) Red Tag 5. Material purchased from unregistered vendor (HCC F 01 07 19) White Tag

SAP sites can print this materials tag from SAP on colour paper with materials code/part numbers
After inspection and acceptance of materials, following records shall be updated.

Bin cards as per (ISO FORMAT - HCC F 01 07 20) It is compulsory.

Computer System for receipt information (Qty, rate etc) Stocks shall be updated simultaneously for quantity as well as value. Where material is received free of cost (e.g. FOC spares received along with equipments), dummy rate such as Rs 0.01 shall be used since Computer System does not accept receipts without rates. Every branch will have their computer at stores from the very beginning of the project.

MRN as per ISO FORMAT - HCC F 01 07 18 will be prepared/ printed one copy should be attached with bill copy. No. need to keeping duplicate of MRN. In SAP MRN printing is not required.

At the end of the day, Daily Receipt Report shall be printed from the computer separately as per the type of receipts ISO FORMAT - HCC F 01 07 20 and filed to generate a Receipt Registers. The register will be checked by stores personnel everyday with the relevant Challan. These registers shall be bound periodically say monthly/ quarterly/half yearly depending upon volume of receipts. No Printing of document is required in SAP Treatment to rejected material All rejected materials shall be kept separately duly identified by material tag ISO FORMAT HCC F 01 07 24 in red colour. Materials found defective at inspection stage shall be returned to the suppliers against rejection challan as per ISO FORMAT - HCC F 01 07 19. However, if any stock material is found to be defective later on, issue entry shall be made to take the quantity out from the stock and then material shall be returned to the vendor against rejection challan , ISO FORMAT - HCC F 01 07 19.

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1.10.6 Weighment The weighment will be verified by a stores personnel through computer aided weighbridge. He may be rotated every fortnight or as may be decided by the Incharge Stores. The name of the Stores personnel supervising the weighment will be mentioned on the Material Receipt Note (MRN) / Weighment slip. Weigh Bridge shall be calibrated once in a year, record shall be available both in mechanical Section as well as in Stores. 1.10.7 Sending the materials out of site Any item (materials, equipments, plant machinery etc) going out of HCC site shall be accompanied by a Delivery Challan issued by stores, which will be generated from computer. Apart from material code, full description, qty, value etc following information shall be clearly mentioned on the delivery challans.

Purpose for sending the item out. Eg. : Repairs, rejection, inter-branch transfer etc. Expected date by which the item is supposed to be returned (if applicable) In case it is not a sale transaction, it shall be clearly mentioned NOT FOR SALE and value indicated is inclusive of sales tax, insurance. Cross reference of relevant work order, disposal order, authority letter for transfer etc. Gate pass is also needed for security purpose

Separate registers are to be maintained for all issues made from stores and necessary follow up is to be carried out for materials sent out for repairs, works returns etc. Every dispatch is to be entered in this register and as and when the materials are received the same is to be entered and necessary follow-up is to be carried out for unreturned In SAP no need of maintaining register as and when required we can see the system. Need to updating system at any point of time. 1.10.8 Issue of Materials 1.10.8.1 Issue to Site Issue of materials from Stores (Main Stores/Yard/Godown) shall be against such duly authorized Requisition, ISO FORMAT - HCC F 01 07 23 only which are made by the concerned departments. In SAP it can be issue against creation of reservation also. 1.10.8.2 Issue of Diesel to Bousers Diesel will be issued to Bouser as per site requirement and it will regularize the same by next day against issue slip. 1.10.8.3 Issue of Explosives Explosives shall be issue to the user through Explosive Van only. 1.10.8.4 Issue of material to Sub-stores. Material will be issued to Sub-store again (Sub-stores Transfer / Delivery Challan) In SAP it can be issued through transfer/ posting. 1.10.8.5 Return of Defective materials to Vendors If any stock material is found to be defective, issue entry shall be made and material shall be returned to the vendor against rejection Challan as per ISO FORMAT HCC F 01 07 19. In SAP it can be done through system also.

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1.10.8.6 Issue of material to Subcontractor: Any subcontractor whom the material will be issued would request Project Manager in writing mentioning name & Specimen Signature of their authorized representative who will draw the material from stores. In turn Project Manager will inform stores mentioning the name of the sub-contractors authorized representative. Section In charge/ Engineers who are authorized by Project Manager will give issue indent to stores requesting for issue of material to a particular subcontractor mentioning free or chargeable basis. The following cases may be arises:-

A. Free Basis As per Work Order B. Chargeable Basis.

In case of chargeable rate that may be following two types. i) Fixed Rate System Rate + Service Charges as mentioned in Work Order or as decided by Project Manager. Fixed rate may have following three options. System Rate or = System or < System Rate

ii)

Computer system is so designed that it will take care of all options & stock valuation is not affected. Same procedure shall be adopted for issuing the materials to the sub-contractors to ensure that materials are issued only against appropriate authorization. If any material is required to be issued to the sub-contractor directly from the site, then appropriate work-return entry shall be made and then only issue shall be shown so as to have complete record of issues in the computer system. Separate issue registers shall be generated from computer for materials issued to Contractors. Sub-contractors shall be asked to certify the materials drawn by them from stores on monthly basis. This shall be tallied with the issue record and differences, if any, shall be settled forthwith. In SAP system will follow only one rate service charges and other will be added by Accts dept/QSS. No need to maintain manual register. 1.10.8.7 Inter branch transfer of material: - Branch Transfer of any material can be made as per request of receiving branch. In case of construction asset approval from construction asset Incharge from H.O. have to be obtained. For equipment & spares clearance from equipment division at Head Office has to be obtained. Branch Transfer Challan may be generated by computer & rate to be debited @ 50% of the cumulative rate of that particular item OR AS AGREED BY DISPATCHING & RECEIVING SITE. In SAP it is not possible.Tranfer of materials can be done through system rate only against STO. 1.10.8.8 Issue Document requirement All Indenters should mention correct cost center code in all stores issue requisition slip. An Issue slip will be prepared for all issues for consumption. As all issues are treated as consumption it must have cost centre. An issue slip will not be prepared for issues, which are not for consumption.

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The issue slip will be prepared in duplicate, original will be the stores copy with stores reference number and duplicate duly acknowledged for receipt of material. Duplicate copy should be kept with the indenter.

In case no stock is available original will be stamped no stock and returned to concerned section . For items which are consumed regularly ask purchase dept. to procure it immediately and rest of the cases request concerned dept to raise purchase requisition.

Issue slip for equipment spares must contain reference of the LOG Number. At the end of the month Stores should prepare report of issue against each equipment. Stores shall obtain signatures of persons taking delivery, on issue slips. For construction asset signature in asset ledger has also to be obtained. In SAP indenters can create the reservation for issue of items on through his own SAP system & reservation number should be communicated to stores .Stores can issue the materials against the reference no. and print issue slip and take the signature of recover. It can be issued without receiver signature also receiver name and token no.\ EMP no. can be put in system. The issue documents will be as follows :

I. Issue slip for consumption II. Delivery Challan for material going out of the site.(vendor ,client, sub-contactor)
generated from computer.

III. Issues to subcontractors on debit basis. Red colour and for all other materials white issue
slip can be used. IV. Returnable slip for material issued on returnable basis i.e. tools to employees, issues to sub contractors. Physical issues shall be made on FIFO basis so as to ensure that lots received earlier are utilized first.

Stores accounting system should free from error, issue from store should be restricted upto 5 PM. In case of extreme emergency issue can be made after prior approval from Project Manager but this should not be in a regular practice. While issuing the materials following records shall be updated.

Bin cards as per ISO FORMAT - HCC F 01 07 20( it is compulsory now) Computer System for issue information (Qty, rate, cost center code etc)

Every branch will have their Computer System installed and hence stocks shall be updated simultaneously for quantity as well as value. Issues shall be valued by Weighted Average method by computerized stores accounting system.

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Tools issued to employees shall be entered in Personal Tool Register (PTR) as per R-15(15)/20 (ISO F N/A).In case of tools misplaced by employee 100% debit will be made for new one, whereas for broken tools old & used 50% will be debited on that particular employee. In SAP it can be issued through transferred/ posting and PTR is not recommended to Maintain.

In case any materials from the inventory are to be scrapped, requisition duly approved by Project Manager shall be taken. Computer System shall be updated for showing issue for the purpose of scrap disposal. Separate Scrap Register shall be maintained as per QR-15(15)/37 (ISO F- N/A) Through SAP it is not required and it can booked in proper cost code only The registers shall be bound periodically say monthly/quarterly/half yearly depending upon the volume of issues.

Issue slips also shall be properly bound and preserved as a record. While issuing the materials Bin Card balance (and also the balance shown by the computer) shall be verified with physical balance where items are stored in small quantity. In case of variance, Discrepancy Report shall be made as per QR-15(15)/28 (ISO F- N/A)& Bin card as well as computer shall be updated by passing a suitable adjustment entry. It is essential that data entry in Computer System is always up-to-date. It is necessary to check entries pertaining to Daily Receipts & Issues everyday. If any transaction entry is missing, it shall be made before entering next days records. If any mistake is found, adjustment entry shall be made and then alone next days entry work should be started. This is necessary since Computer System shall not allow any backdated entries once adjustment is passed. The computer system has been provided with facility to do reconciliation of client materials (receipt, issues, return to client & stock), materials issued to contractors (contractorwise), Tools issued to employees (employee-wise), and reconciliation of explosives. It is necessary to run these reports periodically & ensure proper reconciliation to have adequate control over materials. 1.10.9 Stock Verification 1.10.9.1 Annual Physical Stock-Check Stocks shall be physically verified quarterly i.e. four times in a year as on 30th of June, 30th of September, 31st of December and 31st of March to confirm the balances in computer data tally with each other as well as with physical balance for A class items verification should take place once in a month. For B & C Stock checking shall be started well in advance so as to complete verification by 30th June. While declaring stocks as of 31 st, March, information shall be collected from works regarding the materials issued to them but not used. These stocks shall be shown in separate column so that entire inventory as of year-end shall be properly accounted. The discrepancies noted during stock-audit shall be recorded in report as per QR-15(15)/28 (ISO F- N/A). If cumulative discrepancy on any single item is below 2% of its consumption during the season, it shall be reconciled with the approval of Project Manager. If this discrepancy is beyond 2%, detailed investigation has to be carried out by stores-in charge for the variation. If no

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settlement is made, stores-in charge should recommend this for proper adjustment jointly to Project Manager & Head- Stores & inventory management for squaring up the discrepancy. 1.10.9.2 Perpetual stock-check For X, Y & Z items (items where maximum inventory is locked-up), stocks shall be periodically verified (use stock verification sheets QR-15 (15)/27) (ISO F- N/A). Everyday few items will be checked. Number of items shall be selected so as to check each item in these groups at least once in a month. This method cannot be adopted for bulky items such as steel, sand, aggregate etc The discrepancies noted during stock-audit shall be recorded in report as per QR-15(15)/28 (ISO F- N/A). If cumulative discrepancy on any single item is beyond 2% of its consumption during the season, it shall be brought to the notice of project manager and Functional head at HO 1.10.9.3 General procedures to be followed for half yearly/yearly stock verification. a) Stocks sheets duly signed by Section Head should be available with the respective Sections b) All materials in Stores should be properly arranged so that each item is grouped together in one place and properly stacked to facilitate verification. c) Bin cards/Registers at all location should be updated and balanced.

d) A list of last receipt, issue notes, challan must be prepared

for each Section and a photocopy of the relative document( Gate pass/ Dispatch etc.) must be attached. case of annual stock verification.

e) Any rejections/ surplus materials lying with the Section must be returned to the Stores in
f) Third party stocks, rejected items, if any, must be clearly demarcated. Similarly, items damaged, obsolete, etc. must be segregated.

g) A supervisor will be put in charge of each Section . He will be responsible for co-ordination and stock count, so that helpers and weigh machines are readily available to assist the persons taking the stock when necessary. Also, he will see that the stock count is conducted with due care. h) Goods with third party, should be verified by confirmations received from the parties. A physical verification may also be conducted wherever required.

i) Following reports to be printed for year ending inventory.

Stock List Stock Discrepancy Report Stores Ledger

No printed document required for SAP sites

1.11 Raising of Debit note For the purpose of raising debit notes in case of inter-branch transfers as well as issue of materials to contractors on chargeable basis, stores will issue debit notes with the help of their Computerized System. and the same will be passed to accounts dept. for final adjustment. In case of issue to contactors on chargeable basis stores will add extra service charges as per contract or as decided by project manager, which will be added to: Current issue rate of item in case item is being issued from the stock.

Last issue rate in case item is being issued from site because there is no stock. Page 21

 Some Work Order may ask certain materials to be issued to a Contractor at predetermined (fixed rate) through the terms of Work Order, debit shall be accordingly made. Computer System is so designed that stock valuation is not affected by the rate at which the material will be issued to sub-contractors. In SAP it is not applicable, system rate is final rest account and Qss will calculate the over head 1.12 Reconciliation of material received from the clients Together with the QSS and Accounts prepare a Statement of material received and materials returned with the supporting documents should be made and got approved by client. Reconciliation of net quantities of materials received from the clients such as steel, cement etc on cost recovery basis and free issue basis should be done got approved from the client. Provision for shortfall if any should be made in the books of accounts as per the terms of contract. 1.13 Project closing time: 1.13.1 The following activities may be required to be followed at the time of closure of the Main stores. Prepare closing stock statement. Find out whether surplus/slow moving and obsolete items have been identified and are disposed off or declared for disposal as per the Guideline given in Disposal Titled as scrap and instructions of HO Procurement Department. Compare the physical stock with the book stock and prepare a statement giving details of the discrepancies. Prepare a final statement of issues to sub contractors containing details of issues from the last statement to date. Prepare a statement of tools issued to employees containing details of issues from the last statement to date. List all files and destroy them as advised by HO Procurement Department. Inform all vendors about the closure. Prepare a list of all pending material and follow up with the vendors for receipt of material. If the material is not required than coordinate with Materials department as to whether the order can be cancelled or whether the material can be delivered at another site. Material reconciliation statements for items like reinforcement steel, structural steel, cement, sand, boulders and aggregates etc. should be obtained from concerned person. Prepare statements for the materials like structural steel, CGI steel, reinforcement steel used for preliminary and enabling works since beginning to date and ascertain the quantity retrievable. Determine the scrap generated by way of wastages i.e. cut pieces. Reconcile the retrieved quantities as per reconciliation and quantities actual sold as scrap/send to other branches and balance stock lying at site.

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Prepare list of other scraps available I.e. batteries, tyres, tubes, cables, GI pipes, conveyor belts etc. Outstanding liabilities efforts are needed to make even nil statement. List any other outstanding issues with vendors such as disputes, complains etc. In SAP no need of manual working and also printing of document any document. 1.13.1 Accounting procedure for Zero Value Items / Spares Many time we get the spares / Items along with the equipment at Zero value (free of cost) .These spares moves along with the equipment from site to site .The price indicated in such cases fro these spares / items in the stores systems is either RS. 1.00 or Rs 0.01 so far at different sites. As these spares / items are capitalized for inventory management we need to resort to them as zero value or Rs. 1.00. However at the moment, these no means to assess the correct value of these spares for reference purpose. Similarly the consumption is booked in such spares for Rs. 1.00 (and not as 0.01). To get actual valuation wherever required and to get correct consumption for such items .ITG dept at HO with the guidance given by HO accounts / equipment and procurement have modified. The change made in the process has been identified bellow. 1. For all inventory valuation the system will still receive / issue these spares / items at Rs. 1.00 only and provision to capture addition purchase rate made. 2. The system will show the report of actual purchase value for these spares / items as additional information. Similarly in case of spares consumption it could give report on consumption based on actual value as additional details. 1.14 Preprinted Stationery Stores shall maintain separate register as per format QR-15(15)/39 giving details regarding receipts, issues & stock of pre-printed stationery used in stores. Details of following stationery items shall be maintained in the register. Challan Books, Gate Pass Books, Stores Requisitions. 1.15 Records Stores shall maintain following Records / Registers / Files. Regular documents, consignment notes etc other despatch documents received with the consignments. DOC. NO. DOC. NO. IN ISO FORMAT DETAILS QR-15(15)/02 required QR-15(15)/03 copy-N\R QR-15(15)/06 QR-15(15)/07 copy-N\R QR-15(15)/08 QR-15(15)/09 QR-15(15)/13 HCC F 01 07 18 HCC F 01 07 18 HCC F 01 07 18 ISO F N/A ISO F N/A HCC F 01 07 21 HCC F 01 07 20 Material Received From Vendors / Hard copy Not Materials Received On Cash Purchase Basis Hard Material Received From HCC Branches Hard copy-N\R Material Returned Back by Site ( Works Return) Hard Material Returned by Employees (Tools) Receipts Of Explosives Bin Card ( not compulsory to keep)

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QR-15(15)/14 QR-15(15)/15 QR-15(15)/16 QR-15(15)/17 QR-15(15)/18 QR-15(15)/19 QR-15(15)/20 QR-15(15)/21 QR-15(15)/27 QR-15(15)/28 QR-15(15)/29 QR-15(15)/30 QR-15(15)/31 QR-15(15)/32 QR-15(15)/33 QR-15(15)/34 QR-15(15)/35 QR-15(15)/37 QR-15(15)/39 QR-15(15)/36 QR-15(15)/38 QR-15(15)/59 PUR/Doc/10 PUR/Doc/11 PUR/Doc/12

HCC F 01 07 23 ISO F N/A ISO F N/A ISO F N/A ISO F N/A ISO F N/A ISO F N/A HCC F 01 07 21 ISO F N/A ISO F N/A HCC F 01 07 19 ISO F N/A ISO F N/A ISO F N/A ISO F N/A ISO F N/A ISO F N/A ISO F N/A ISO F N/A ISO F N/A ISO F N/A ISO F N/A ISO F N/A ISO F N/A

Stores Requisition Slip Materials Returned to Vendors Materials Issued to Contractors Materials Returned to Client Material Sent to Other HCC Branches Material Issued to Site Materials Issued to Employees Issues of Explosives Stock Verification Sheet Stock Discrepancy Report Challan Book - Rejected Materials Challan Book - Issue Of Materials to Contractors Challan Book - Materials Returned to Client Challan Book - Inter Branch Transfer (Materials) Challan Book - Despatch of Capital Items Challan Book - Machinery / Assets Sent for Repairs Challan Book - Disposal Scrap Register Register for Pre-Printed Stationery Personal Tool Register - Employee wise (PTR) Purchase Register Monthly Liability Statement Disposal Action Request. Disposal Order HCC F 01 07 26 Delivery Order

Inventory information DOC. NO. DOC. NO. IN ISO FORMAT DETAILS QR-15(15)/40 maintained ) QR-15(15)/41 QR-15(15)/42 QR-15(15)/43 ISO F N/A ISO F N/A ISO F N/A ISO F N/A Stores Ledger ( where manual records are

Stock List ( Item wise ) .... Monthly Report Monthly Stock Statement Monthly Inventory Statement

Reconciliation DOC. NO. QR-15(15)/56 QR-15(15)/57 QR-15(15)/58 DOC. NO. IN ISO FORMAT DETAILS ISO F N/A ISO F N/A ISO F N/A Reconciliation of Client Materials Reconciliation of Materials issued to Contractors Monthly Reconciliation Of Explosives

Account of Explosive Register receipt as per form # 32 Account of Explosive Register used as per form # 34 Account of Explosive Register monthly return as per form # 36 Reconciliation of Steel, Sand, Aggregate etc.

In SAP all option available in system no need to maintain any thing manually. MATERIAL INSPECTING AUTHORITIES Page 24

MATERIALS 1] PLANT & MACHINERY SPARES AND RELATED MATERIALS 2] ELECTRICAL MATERIALS INCHARGE 3] GENERAL STORES MATERIALS 4] FUEL BY HIM 5] CONSUMABLE ACCESSORIES PERSON 6] BUILDING AND CONSTRUCTION MATERIALS

INSPECTING AUTHORITIES PROJECT MECHANICAL ENGG. OR ANY PERSON AUTHORIZED BY HIM PROJECT ELECTRICAL ENGG. OR ANY PERSON AUTHORIZED BY HIM / STORE

INCHARGE (Q.A. & C) / STORE INCHARGE OR ANY PERSON AUTHORIZED BY HIM PME / ANY PERSON AUTHORISED BY HIM / STORE INCHARGE OR ANY PERSON AUTHORIZED INDENTOR / STORE INCHARGE OR ANY OTHER AUTHORISED BY THEM WORKS MANAGER / INCHARGE (Q.C.) OR ANY PERSON AUTHORIZED BY HIM

ISO HCC S 01 07 05 (Revised as per ISO Manual)

1.16 MIS Stores shall provide following information in order to have effective control over its functioning. SAP has All most all function where ever SAP implemented in full false manner no need prepaid the report all data is available in SAP all the time.

Sl. No. 1 2 3 4

Information / Report Monthly Stock Statement QR-15(15)/42 Monthly Inventory Statement QR-15(15)/43 Monthly Liability Statement QR-15(15)/59 Materials Issued For Prelim Works QR-15(15)/37

Whom Site A/Cs Dept. H/O Procurement Dept. / Site Accounts Site A/Cs Dept. Site A/Cs Dept.

Periodicity By 2nd of Every Month By 2nd of Every Month By 2nd of Every Month By 2nd of Every Month

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5 6 7

8 9 10

Details of Disposal (Scrap & Equip.) QR-15(15)/37 Non-Moving Inventory QR-15(15)/47 Reconciliation of Explosives QR-15(15)/58 Client Materials QR-15(15)/56 Materials Issued Contractors QR-15(15)/57 Materials Issued To Employees QR-15(15)/57 XYZ Analysis QR-15(15)/49 ABC Analysis QR-15(15)/50 Consumption Details Section / Cost Centre wise QR-15(15)/52 Cost Centre / Sectionwise QR-15(15)/51 Section wise QR-15(15)/53 Log-Nowise QR-15(15)/54 Consumption Pattern of an QR-15(15)/55

Site A/Cs Dept. PM./ HO (Procurement) PM

By 2nd of Every Month By 2nd of Every Month Monthly As & when required As & when required As & when required Once a Quarter Once a Quarter monthly monthly monthly monthly As & when required

PM / HO Procurement PM / HO Procurement Site A/Cs Dept.

These all above format are not applicable to SAP site.

1.17 Accounting Requirements The Head office may require statements and details for the purpose of accounting. The Head office has issued a circular giving detail of the statements. The In charge stores should read this circular and send details as per the requirement of Head office. The requirements include: Statement Number 1. 2. 3. Particulars Particulars of scrap & un-serviceable sold Particulars of closing stock Particulars of provisional liabilities

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4. 5. contractors 6.

Particulars of imported materials Particulars of receipt, consumption & stock of Materials received from Particulars of capital expenditure

The Statutory audit requires a company to comply with certain requirements. The stores procedures and systems should ensure that these are complied. The company should have reasonable system of recording receipt, issues and consumption of materials and stores and for a reasonable allocation of the material and man-hours consumed to the relative jobs. There is a reasonable system of authorization at proper level with necessary control on the issues of stores and allocation of stores to jobs and the system of internal control is adequate . The Company has maintained reasonable records for the sale and disposal of scrap. For financial year closing apart from regular reports generated for MIS, stores has to prepare following reports additionally:

Machinery statement, Furniture and fixture statement, Survey instruments statement, Stock discrepancy report. 1.18 Internal Audit 1.18.1 The systems and stocks may be audited by the Internal Audit Department (at random on sample check basis) once in a year or as required by the Internal Audit Department. 1.18.2 The Stock verification should be carried out jointly by One person from Accounts Department, one from Section and Stores.

1.19 CLASSIFICATION OF EQUIPMENT CAPITAL AND NON - CAPITAL ITEMS. INTRODUCTION Enclosed is the complete identification of items which are divided into the following: 1.1.1 1.1.2 1.1.3 1.1.4 1.1.5 Capital Equipment. (List enclosed.). M.S.E. items - Miscellaneous Service Equipment. Minor Items. (See Definition). Construction Aids. (List enclosed.). Unit Assemblies. (See Definition).

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DEFINITION 1.19.1 Capital Equipment (REFER GUIDELINE NO HCC G 01 09 01 for numbering) These are such equipment which can perform independently, moved from project to project without undergoing any change in their identity and recorded in HCC Asset Register. In this category all items will be treated as Capital items. 1.19.1 CONA / MSE CONCEPT.CONA MATERIALS: - Construction Aid Materials. These are high value items having repetitive usage other then fixed assets. As per our current accounting polices with normal process of materials issue, value gets expensed out and corresponding quantity gets reduced from stock.

However our business requirement was to trace quantity of these reusable materials even after issue. We keep the track for issue to whom, physical viability time to time. As such these need to verify quarterly /half yearly / yearly. That means all CONA/MSE items will be treated as any other items for accounting purpose only.
1.20 ENVIRONMENT & SAFETY POLICY Our environmental Policy It is our environmental policy to manage our projected activities / products / services in an environmentally responsible and lawful manner, so that their environmental impacts are reduced to a practical minimum and that there is continual improvement in our environmental performance. In particulars we will: 1. Prevent and control any air, water and soil pollution arising from construction activities, Plants associated other utilities and also from the amenities provided to our employees. 2. Optimize utilization of water and non-renewable resources, i.e. materials, fuel, energy. 3. Actively pursue efforts towards waste minimization-reduce, reuse and recycle. 4. Control spillage from all pertinent operations. 5. Comply with all applicable laws and regulations as well as contractual requirements. 6. Promote awareness and enhance skills of employees to develop a prevention oriented work attitude.

OBJECTIVES The environmental objectives and targets should be in line with HCCs environmental policy and should consider the following: Significant environmental aspects Legal and other requirements Technological options with consideration for financial, operational and business aspects Views of interested parties (internal & external) Commitment to prevention of pollution. To meet the defined objectives, targets should be set in such a way that they are:

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SMART (Specific, Measurable, Achievable, Realistic and Time bound) The time frame and responsibility for meeting the objectives and targets should be defined. In case of new environmental requirements due to new legislation or amendments in existing legislation, the environmental objectives and targets should be set and identified appropriately to ensure compliances. Project sites / and operational areas should consider establishing measurable environmental performance indicators while setting objective and targets. Once the particular objective/target has been achieved, new opportunities or possibilities for setting new objectives and targets should be identified. The project coordinator and project manager should periodically monitor the progress made in the achieving the environmental objectives and targets and coordinate and optimize the utilization of resources. SPILLAGE MANAGEMENT OF MATERIALS Personal Protective Equipment Chemical splash goggles Gloves Shoe covers Plastic aprons and/or suits Absorption Materials Spill pillows (or equivalent) Spill booms Spill sock Polythene liners filled with loose absorbent, or high porous sand and with loose absorbent in the bottom. Clean-up Tools Polypropylene scoop or dust pan Broom or brush with polypropylene bristles Polypropylene bags Sealing tape Waste stickers Floor sign DANGER chemical spill keep away A good oil spill absorbent should have the following characteristics: Absorb only hydrocarbons such as all kinds of oil / grease / paint (not water) Hydrophobic in nature therefore it can float on water and can only absorb spilled oil. Does not leach out the absorb hydrocarbon in to the soil or water, thought it is thrown out. SPILL MANAGEMENT MEASURES Spill management comprises of prevention and control of spills. Always remember that prevention of spills is inexpensive and easier than management of spills. Treatment and disposal of contaminated soil or water could be quite expensive. The spilled waste should be disposed of in the same way as hazardous waste. Prevention of Spills a) General Measures:

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Hazardous materials and wastes should by covered in containers and protected from damage. Secondary containment such as a drain pan or drop cloth should always be used to absorb spills or leaks when removing or changing chemicals / oils. Drip pans or absorbent materials should be placed under paving equipment when not in use. Used oils or chemicals should be promptly transferred to suitable waste or recycling drums. Full drip pans or other open containers should not be left lying around. Spilled materials should never be hosed down or buried. a) Hazardous Material / Waste Storage Area Waste storage areas should be kept clean, well organized, and equipped with sufficient spill cleanup materials. Used oil filters should be crushed or punctuated (nail hole in the top of the filter) and then placed over a funnel mounted in the waste oil-recycling drum for 12 to 24 hours to drain excess oil and then send the filter to the authorized recycler Cracked batteries should be stored in a non-leaking secondary container till all the acid has drained out. 1.22 Brief note on safety need to follow by Materials Dept. Site.

Under OHSAS 18001 Hcc is committed to provide both safe working conditions and
protection against health risks to all its employees and others involved in its activities and members of public affected by such activities. This shall be achieved by eliminating or minimizing the hazard potentials through the adoption of proper management of risk control. Materials Mangers should ensure that basic safety rules should be follow during the handling of materials.

1. Worker should use PPE & Wear safe clothing. 2. Avoid the taking shortcuts method during loading unloading. 3. Read Materials Data sheet MSDS or the container label before handing the chemical. 4. Used PPE that will protect you. 5. Keep washrooms toilets and drinking water points neat and clean. 6. While lifting bend knees. Get help for lifting heavy loads. 7. Make sure that worker are prevented from getting into swinging radius of cranes. 8. Make sure that tested and inspected tools, silling are issued from stores. 9. Do not keep unsafe tools or without tested Silling, in site the stores. 10. Smoking is not allowed other then designated areas. 1.23 Repairing Procedure Store is responsible for major / minor repairing work of all section at site. Stores involvement starts with the arrival of materials along with written note, signed by section in-charge, having clear specification of material with its problem which needs to be repaired. Before issuing work order to any vendor, repairing charges are finalized by making comparative statements of quotations collected from 2-3 authorized sources. PME should be consulted while analyzing repairing charges before forwarding for PM approval to release WO in favour of selected vendor. If PM approves WO can be released & it should be sent to vendor along with material accompanied by two copies of delivery challan (Vendor Copy & Store copy). Store copy duly acknowledged by vendor should be kept in file as record. Besides this ODR register needs to be maintained regularly for responsible for this job should ensure timely delivery and follow up.

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In SAP it can be maintained on system also, manual register is not required.

SUB. STORES PROCEDURE AT PROJECT SITES

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2. Sub Stores

Definition:

Sub. Stores means anther stores at the same project which function under the control of main stores. Sub stores can be several under the main stores Its depend on the nature of job & requirement of Project.
2.1 Introduction The Project in charge in consultation with the Procurement Department at head office may decide to have a Sub store for a large project for:

a. Easier accessibility of materials Better planning and control of materials Minimizing

transport and handling costs like loading, unloading, etc. c. This manual attempts to document the system & procedures of the Sub stores for handling, storage, preservation and accounting of the materials and to have an effective control over the inventory.

b.

The sub-stores working / operation at site is mostly same as that of main store except for the following: 2.2 Scope 1. The material received from the client will be under the control and responsibility of the Main stores. 2. The sub stores will not maintain control over the Client materials. 3. Issues to sub-contractors will be controlled by the Main stores.The sub store may issue material to sub-contractor but sub contractor wise material account and reconciliation will be the Responsibility of the Main stores. 4. The material for preliminary works should only be issued by the Main stores. If the Substore issues material then the same should be shown as a transfer to the Main stores and a subsequence issue from Main Stores. 5. The Main stores will be responsible for consolidating the employee wise receipts, issues and outstanding tools as at the end of the month and monitor the same. Sub-store may issue tools to employee but that will be shown as transfer to main store and issue from Main store. The Sub Stores shall not normally perform the following functions unless there are specific instructions from Project in charge or in charge Main Stores: o o o o o Item codification Arrangement of transport Cash Purchases Disposal of Scrap Liaison with Finance/Purchase

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o o o o o

Handling of Imp rest Equipment spare parts management Valuation of inventory. Accounting of printing & stationery Explosives

2.3Sub Stores Organisation a) The In charge Sub stores may be a person of the level of Officer or Junior Officer as may be decided by the Procurement Department at Head Office in consultation with the Project in charge and the in charge Main Stores on the basis of project requirement size of project. b) The In charge Sub Stores has the responsibility for operation of the system as per the procedure given in this manual.

c)

The In charge Sub Stores shall report and follow instructions of the in charge Main Stores both as administratively and functionally also.

d)

The Project in charge shall inform the In charge Sub stores, the names of the persons with their specimen signatures, who shall be permitted to sign all documents such as issue slips as authorized signatories. No document / signature will be in pencil. All alterations will be initialed. e) The Sub stores material accounting system identifies the Sub stores by a distinct code. 2.4 Procedures The procedures for Handling, Storage, Preservation and Accounting of material shall be in accordance with the following steps: 2.4.1 Handling of Materials As and when the materials are received and routed through inward section of Main Stores to Sub stores and issued to the actual user, necessary precautions shall be taken for safe handling as per guideline given in main stores manual. In case of diesel material issue indents from individual equipment shall be sent to main store daily to up date sub-store stock. 2.4.2 Handling of Steel Generally steel is being unloaded by main store. But if required it may be unloaded in Steel yard under the sub store with the use of crane or manually. All the consignments will come through main stores weighbridge and one store attendant will accompany the truck up to unloading point at sub-store. The same will be unloaded in presence of representatives from both main and sub store. You may refer steelyard procedure for the same. 2.4.3 Handling of Explosive With a special instruction from main stores explosive may be issued to user through explosive van proper register of explosive to be maintained by sub. Stores if it is near quarry its need to control by sub stores. As per explosive act register of explosive should be updated immediate when the explosive materials removed from Magazine. It is also necessary that balance stock should be display in the inside of magazine.

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2.5 Receipts a) The accounting of material receipt in the Sub stores would be as if the material is transferred from the Main stores. Thus all incoming materials (Procured at site, through Corporate Office, Customer (Client), Subcontractor, Inter Branch Transfer, etc.,) shall be shown as received by Main stores and then transferred by Main stores to the Sub stores. If the sub store computer is linked with main store server then all the receipts may be taken in the main store and that will be automatically transferred to sub stores as desired. In SAP it can be done through transfer/posting. b) The Main Stores should prepare a Stores Transfer Slip (STS) for dispatch of material to the Sub stores. The STS should have a different series for: b) Transfer of material from Main stores c) Direct receipt of material by the Sub stores In case of direct linking of computer STS having different series is not needed. d) The STS should be prepared at Sub store wise i.e. if there are more than one sub stores then for each of the sub stores STS will be generated from the computer having different sub store code and that may be of same series. e) The STS will be the document based on which the Sub stores makes a receipt entry. The Sub stores should give reference of the entry number in the Sub Stores receipt Register on the STS. In Sap if sub store is far way from main stores its need to link with SAP so that it is essay to handled smoothly as main stores is able see the stock available at sub stores and requirement of sub stores. 2.6 Transfer - Main Stores main stores

a) In SAP system there is no need of transfer DC. When preparing of MRN by putting location of
sub store in system stock will show in sub store. For sending the material from Main store to Sub stores for transit purpose need transit document to be prepared. b) The Sub stores shall verify the quantity of materials with the transit DC. Materials received in shortage/excess of quantities mentioned on the transit DC shall be received after informing the Main Stores and recording the receipt quantity on the original as well as the second copy of the transit DC. c) Location change information shall be updated in the computer system for qty received vis-vis qty mentioned in the transit DC, rate will be updated automatically when the location will change 2.7 Direct vendor receipt - Sub Stores

a) In case of direct unloading at the sub stores, the Main stores shall prepare MRN and put the
location of sub store and send transit DC in duplicate to sub store for verification purpose and sub store will verify the quantity and acknowledge transit DC and that in turn will sent to main store for regularization. b) If the material is unloaded at more than one sub store than the STS will be prepared sub store wise having mentioning sub store code. The transporter should collect the

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acknowledged STS from all Sub stores and hand over the same to the Main stores together with the delivery Challan. In SAP no dc /received at sub stores is required it can be done through changing location of stores and issue posting through same location by transfer /posting with in one project. 2.8 Issues - Sections

Issue of materials from Sub Stores shall be against such duly authorized Requisition ( (QR-15 (15)/14 OR HCC F 01 07 23) only which are made by the concerned departments. 2.8.1 Issues - Sub contractors 4.17 a) As far as possible the issues to the sub contractors should be only by the Main Stores. If the Sub stores then it make and issue will be treated as if the material is issued to the Main stores and an STS prepared for the same. b) The issues to the sub contractors should also be only against a duly authorized requisition. A STS should be prepared for the issue and the Main stores will account for the issue sub contractor wise. c) The Main stores will monitor the total issues to a Sub contractor after collecting the details of issues from all the Sub stores and consolidating the same. The Main stores shall ask the sub-contractor to certify the total materials drawn by them from Main stores as well as sub stores on monthly basis. The differences if any shall be settled forthwith. d) Physical issues shall be made on FIFO basis so as to ensure that lots received earlier are utilized first. 2.8.2 Issue Tools - Employees a) If any tools are to be issued to the employees, proper authorization need to be obtained on the Tools Issue Slip and the employee concerned should acknowledge it. The issues by the Sub store will be treated as if the material is issued to Main stores and an STS will be prepared for the issue. The Main stores shall show the issue against the name of the employees. The same shall be recorded in the Personal Tools Register (QR -15(15)/20 (ISO F N/A) by Main stores. In SAP no need to maintain PTR manual register it can be maintain through system option is available in SAP by transfer posting. b) The Main stores will consolidate the employee wise receipts, issues and outstanding as at the end of the month and monitor the same. c) Through SAP consolidated statement can be printed for all location from main stores / sub stores also. No need to prepare the manual statement. 2.8.3 Issue - Main Stores Sub stores should prepare a Sub Stores Transfer Slip (STS) (Exhibit 2) for transfer of material from sub stores to the main stores. In SAP materials can be issued from any wear in one project (from any sub stores by putting actual location of issue place but statement can be generated from one location with details of issued location. 2.8.4 Rejection

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a) The rejected material should normally not be kept at the Sub store and should be transferred to the Main stores unless the material is to be returned immediately to the supplier. For bulky material such as steel and cement the rejection information has been transmitted to main stores immediately and the same will be transferred to main store within next 7 days time. The Sub stores is responsible for informing details of rejections to the Main stores as main stores keeps a control on debit note to be raised on the supplier. b) The material may be: Rejected on receipt: In this case the details of rejection will be recorded on the STS prepared by Main stores. Rejected at the time of inspection after receipt before issue: In this case inspection authority will prepare a Rejection slip. Rejected after issue: In this case also authorized representative of user section will prepare a Rejection slip. In any case through SAP Return to vendor dc can be generated form System no need manual STS If a material is found to be defective after it is issued than the returning department should prepare a Rejection slip (Exhibit 3). The sub stores should account for the return on the basis of the Rejection slip. c) The Sub store should prepare a statement containing details of rejections during the month. The statement should also give details of rejected material lying at the Sub stores as at the month end. A copy of this statement should be given to the Main stores. In SAP Main stores/ sub no need of manual statement it can be generated from SAP as and when required.

d) If the material is proposed to be kept at the sub-stores for replacement / repairs / return
then the material has to be identified by way of red tag HCC F 01 07 24. 2.8.5 Sending the Materials Out of Site. The sub stores should not sent material out of the site. If it has to do so it should be only with the approval of the In charge Main stores. The issue will be shown as a transfer to Main stores by preparing a Sub stores transfer slip. Any item (materials, equipments, plant machinery etc) going out of the sub-stores for a Delivery Challan shall accompany dispatch out of the site generated by sub-store computer. Apart from material code, full description, qty, value etc following information shall be clearly mentioned on the delivery challans. Purpose for sending the item out. e.g. : repairs, rejection, etc Expected date by which the item is supposed to be returned (if applicable)

In case it is not a sale transaction, it shall be clearly mentioned NOT FOR SALE. The Value of goods reflected on the Challan shall confirm inclusive of sales tax, insurance etc. 2.9 Maintenance of Records/Registers The Sub-stores shall maintain following Records / Registers / Files. QR-Stores Transfer Slip file containing copies of STSs arranged serially DOC. REF. NO. DOC. REF. NO. AS PER ISO DETAILS

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QR-15 (15)/13 QR-15 (15)/14 QR-15 (15)/27 QR-15 (15)/28 QR-15 (15)/40 QR-15 (15)/41 QR-15 (15)/42 QR-15 (15)/43 DS-15 (15)/01

HCC F 01 07 20 HCC F 01 07 23 ISO F N/A ISO F N/A ISO F N/A ISO F N/A ISO F N/A ISO F N/A ISO F N/A

Bin Card it is not compulsory Stores Requisition/Issue Slip Stock Verification Sheet Stock Discrepancy Report Stores Ledger Stock List (Item-wise).... Monthly Report Monthly Stock Statement Monthly Inventory Statement Specification for Cement Godown. : Rejection slip : Sub stores transfer slip

What ever not cover in sub stores procedure it is cover under main stores. Sub stores in charge can ref. the manual of Main stores for any clarification or to Main stores in charge. In any case in SAP no printing is requiring. Any report can be generated from system any time.

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Central Stores /Transit stores

CENTRAL STORES
3.1 INTRODUCTION The Company has a Central store at TARA WORKSHOP. The main functions of the stores are receipt and storage of site material as transit point and dispatch to needy site accordingly. The functions include:

a)

Acts as a Transit stockyard to store materials including equipment received on behalf of the sites for economic transportation. b) Fabrication of materials received on behalf of the sites To hold stock of steel on behalf of branch for fabrication. c) Acts as a Transit stockyard to store materials and equipment identified as surplus by various sites. d) Acts as a Transit stockyard to store material on closure of a site. e) To meet the needs during carrying out repairs and maintenance of equipment & machinery at this place. f) Meets the spares requirements of various sites by storage of the spares and keeping the sites informed of the available inventory on hand and if available from present stock and sending them on requisition to various site. g) Sale of scrap and unserviceable spares The Central Store operation is same as that of any site stores except for the above functions. 3.2 Objective of Central store The objective of the central store is:

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To sport the TARA workshop in day to day function of workshop. To sport and help extend to all project site at the any point of time. To Stores the idle machine and Materials after servicing till the requirement of said from sites. High value spares /imported spares stores centrally to help the needy sites on time and reduce inventory caring cost. High value spares or imported spares monitoring centrally from central Stores. Central store/ Transit store is function for Machines and materials as a transit park also. Centrals stores is take care of all equipment receipt and dispatch record Emergency time it stores all materials received from any sites suddenly closed due to any reason. It aims to provide service to project sites on time on best available price. High value spares keep in central stores and monitoring the same in over all project sites. To provide space for fabrication of materials for Mumbai or near by Mumbai project sites wearer land isnot available for fabrication yard. 3.3 Organisation

a)

The Central Stores administratively reports to the Materials department/ Equipment division at Head office also functionally follows the instructions of both the Equipment division as well as the Materials Procurement Department at Head office.

b)

The Central store is headed by Materials Manager (Stores in charge) who is assisted by other support personnel to manage the day to day activities of stores. The central stores in charge will report -functionally & administratively to Tara Equipment in charge as well as Head Stores & inventory Management at HO. 3.4 PROCEDURE 3.4.1 Receipts in SAP

a) All incoming materials shall be received by the Inward Section of stores. The Inward
Section shall verify the quantity of materials with delivery Challan & purchase order and intimate to user or indenter for inspection the materials. After inspection the Material Receipt Note (MRN/ GRN) should be generated from SAP within 3 to7 days ISO HCC 010 07 18. Hardcopy of MRN/GRN is not required to print.

b) The weighment will be verified jointly by one security personnel as well as stores
personnel. The stores personnel as well as the security personnel verifying the weighment will be rotated every fortnight or as may be decided by the Materials Manager with consultancy of Plant in charges of Tara. The names of the Security and Stores personnel supervising the weighment will be mentioned on the Material Receipt Note (MRN).as well as in the weighment slip generated from the computer.

c) The material will be inspected by the specified inspecting authorities considering the
type of materials.

d) The material will normally be unloaded in the Inward section except for heavy/bulky
materials (i.e. Bulk/Bag cement, HSD, Steel etc.) the unloading of which is not possible in

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Inward Section, which will be unloaded in respective areas / yards / godowns in presence of person concerned from the Store, immediately after their weighment at Weigh-Bridge. e) The inspected and accepted material shall be suitably tagged by Material Tag :

Yellow colour Teg (ISO F HCC F 01 07 24) other them V-belt, bearing & hoses and
equipment consumables & plant consumables. Blue colour Tag: V-belt, bearing & hoses and equipment consumables & plant consumables. Red colour Tag: All rejected materials shall be kept separately duly identified. White Colour Tag: Materials received from Unregistered Vendors

SAP is fully implemented at central stores the materials tag advice to print on colour paper From SAP. The SAP System having that option and same can be used for tagging the materials. The out side Printed tag is not allowing for SAP sites wear ever the SAP implemented in full phase manner.

f) The discrepancies noticed on weighment/inspection and verification of documents such

as Purchase order, Delivery Challan etc should be recorded on the MRN. The weighment slip may be filed together with the MRN/GRN or filed separately but reference number of the same should be given on the MRN/GRN. The reference of the Inspection report number should be given on the MRN if there is a separate Inspection report it is not compulsory, in SAP the inspection authority can release the GRN after inspection of Materials from system it self.

g) The delivery Challan should be acknowledged with a remark Received subject to

verification where the material is not possible to be verified immediately.

h) Acknowledgement should be made on delivery challan it self and duplicated copy

should be sent to sender site or it can be communicated though-mail.

3.4.2 Security The Security personnel will maintain a register to record all incoming material/out going materials. The register will list day wise the receipts together with details such as Time in-out, Vehicle number, Received from. Supplier/ branch with challan no and date. 3.4.3 Storage & Preservation Storage shall be organized by allocating separate areas such as follow: Receiving & inspection zone for Incoming Materials Transit Material Receipts (TMR) for temporary storage. Transit Material Receipts for fabrication Equipment spares Fabricated items to be dispatched to sites.

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 Rejected Materials Scrap-Yard Equipment storage yard

a.

Sufficient racks shall be provided in the stores for proper stocking & preservation of materials. All areas and locations shall be suitably demarcated and coded. These Location Codes shall be mentioned on the bin cards as well as in the computer also.

b. The Material's Procurement department will ensure that clear instructions are given to sites to identify packages which contain material for : fabrication repairs closures of site surplus at site c. In case of closure and surplus at site no material will be accepted by central stores unless there is a Prior approval from GM (equipment). The packages should also contain details of the site from where the same are transferred to Central stores. The delivery challans prepared by the sites should also contain package wise details of material together with the reason for sending the same to Head office Central stores .Each item in the packing should have proper tag so that identification will be easier. This procedure will help in proper storage Identification of the material at the site/ Central stores.

d.

e. The vendors delivering material to the Central stores may be asked to give details of the site
and may also mention that the material is for fabrication on the packages. Will put purchase order no in the challan and as purchase order copy is available from procurement dept H.O. the identification is easy.

3.4.4 Issue of material. The issue of material will be only against appropriate document duly signed by the authorized signatories. The Material department and Equipment department at Head office should give a list of site wise personnel together with their specimen signatures who are authorized to sign documents based on which the Central stores can issue material. The Materials department Equipment division at Head Office will also specify in writing the names of the persons with their specimen signatures at Central stores, who shall be permitted to sign the documents such as MRNs, Delivery Challans as authorized signatories. Transfer to other sites Issue for fabrication Issue for operation (Equipment repair etc.)

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Disposal.

A Delivery Challan should be prepared generated from computer for material going out of the stores. The format of the mentioned Delivery Challans is the same but there should be a different series for each different type of dispatch and the serial number will be auto generated having different code mentioned for different purpose, such as rejected material-R, material to contractors-C. The challans to be used are as follows: DOC. NO. QR- 15(15)/29 DOC. NO. IN ISO FORMAT HCC F 01 17 78 DETAILS Challan for rejected material

Challan for issue of material to contractors Challan material returned to client Challan for inter branch transfer of material Challan for Capital items should be accompanied with an Equipment Transfer Form Challan for assets sent for repairs Challan for disposal No Delivery Challans should be prepared at central stores manually challans will be generated from computer and Will have 2 copies the distribution would be as follows: Original for receiving location Second copy to be acknowledged and sent to the sender stores.

The Central Stores should ensure that an acknowledgement is received for all issues. Dispatches. A statement should be prepared on the 1st of every month containing details of deliveries to site for which an acknowledgement is not received. A copy of this statement should be sent to the Materials Procurement department at Head office. The Central stores should also follow up with the concerned site in case the acknowledged delivery Challan is not received. In a computerized environment no need to maintain any manual register till it very very essential and option are not available in system. A central store is permanent establishment it has to full prove paper less office.

3.4.5 Material Accounting The details of material receipt and issues should be entered into the computer as well as in a Bin card. The entry of the receipt and issue documents in computer will keep in serial wise so that it can be retrieve immediately. 3.4.6 Fabrication

The Central Stores carries out fabrication work on behalf of the sites. This is done on the basis of the site wise Work orders. The process is as follows : The site should specify its fabrication requirements to Engineering Dept. at Head Office. The Engineering Dept gives specifications of designs to Central stores together with drawings and Bills of materials.

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 The material received from sites for fabrication is as far as possible identified as for
fabrication on receipt and stored separately. The Central stores than confirms that it has the Work order, Drawings and the Bill of material for the fabrication job to be carried out. The stores than identifies the fabricator and issues the material by preparing a Delivery Challan for Fabricators.

There could be spares and other stores material not received from the site which may be
required for fabrication. This material will be issued by Central stores only on the basis of Spares & Stores Requisition note A delivery Challan will be prepared on issue of this material to the Fabricator. The details of the issue of the material are recorded on the Fabrication Job Card (Exhibit 4).

The Fabrication Job Card will give details of material lying with the Fabricator at any point of
time. The details of each issue will also be recorded against the job card in system. No manual issue book required to maintain.

The Fabrication work done by the fabricators should be recorded in Measurement Book.
This book should be maintained site-wise by supervisor / engineer who made responsible for supervising the fabrication job.

An MRN should be prepared on receipt of the fabricated output. The MRN for Fabricated
output should have a different series, which identifies the MRN's as for fabricated output. The details of the receipt should also update the Fabrication Job Card. When fabricated material is received the unutilized steel with fabricator also needs to be reconciled.

The Fabricated Job Card should be closed after receipt of the total fabricated output. This
can be done by determining the loss and comparing the same with the standard loss. The excess should be recovered from the Fabricator by raising a Debit note". A copy of the debit note should be given to Head office materials procurement department and to the Accounts department. An MIS statement should be prepared giving the following details : Fabricated Job Cards open as at the end of the month. The statement should contain details of date of issue of material, expected date of completion. Fabricated Job Cards completed during the month. The statement should contain details of expected loss, actual loss, recovery from the Fabricator, stores material used and debit notes raised on sites.

The Fabricated output is dispatched to the Site by preparing a delivery Challan. The Central
stores raise a debit note in the form of Inter branch bill for the services provided. The debit note includes all charges incurred by Central stores for components, loading & unloading charges, Crane hire charges and services charges. The debit note is prepared monthly. The debit notes should be authorized by the In charge Tata workshop. The basis of charge should be authorized by Head office in writing. 3.4.7 Scrap Disposal Procedures Please refer detailed Scrap & Surplus Disposal procedure mentioned in the Main Stores Manual.

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3.4.8

Repairs by outside parties

a)

The repairs of material are carried out as per the Work orders for the repair. The material is sent out of the stores on the basis of the delivery challan for repairs. The materials sent out should be up dated in SAP after repairs GRN are made with same refurbishment. Material sent out for repairs but not received back system will update automatically. b) A report should be prepared giving details of material sent out for repairs and not received back as at the end of a month. This report should also contain details of repairs being carried out in-house together with details of date of starting of repair, person/party carrying out the repairs.

c)

Another section of the report should contain details of material received for repairs for which repair work has not yet started.

d)

A debit note in the form of a inter branch debit note should be raised by Central stores and accounts department will rise the inter Brach for the same with services charges. In SAP this report can be generated from system no need to maintain manual report or register. 3.4.9 Bill Passing The bills will be passed by the location which raises the Purchases orders .The PO's may even be raised by Central stores for material required by Central stores. The bills will be passed by the location itself on behalf of which the purchase orders/work orders are being released by procurement dept. At head office the procedures for the same are as follows: 3.4.10 Transit Material Receipts MRN copy (for transit material receipt) along with acknowledged DC should be sent to the site. Bills are received from HO (Procurement) / Site, whosoever raises PO H.O procurement dept. will send the related bills to the concerned site. Bills are passed by stores at site after receipt of material from Central store. Site store is responsible for quantity verification in bills passing. The bills will be passed by the location raising the Purchase Order. The bills will be passed on the basis of the MRN's prepared by stores. Procurement dept. at head office will forward the bills enclosing copy of related challan duly receipted by central stores to the H.O finance dept for final processing of bills. In case of emergency central stores may purchase some spares/tools against cash after approval of DGM (equipment) 3.4.11 Central Stores Purchases Ref Purchase manual at site/ Central stores 3.4.12 Bill for Fabrication work at central stores The bills are passed on the basis of Work orders and approval of the fabricated material. The bills are being passed by respective sites on the basis of work order raised by procurement dept. H.O and also measurement book sent by central stores to the site .The total material reconciliation against each work order will be done by central stores and a copy to be sent to respective sites.

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3.4.13 Bill for Repairs items at central stores Bills for repairs are received at Central stores: Bills are forwarded to HO (Equipments) or respective site depending upon whosoever has raised PO. Bills should be attached with MRN copy (received after repairs) & photocopy of Acknowledged DC. Now central stores can made the GRN in system against the works order rest of works for bill passing account dept can do directly in SAP. No need send the hard copy of GRN after repairs printing of GRN is not possible. 3.4.14 Material code Material code will be allotted by HO materials dept on requirement from site on standard format as decided by Ho. 3.4.15 List of documents to be kept in form of hard copy. DOC NO QR15(15)/02/03/04/06 N/R QR15(15)/1 QR15(15)/29 DOC. NO. IN ISO FORMAT FORMATS HCC F 01 07 18 HCC F 01 07 24 HCC F 01 07 19 Stores Material Receipt book-HardcopyMaterial Tag Challan for rejected material

3.Delivery Challan Fabricators/transfer of materials from one Brach to other Brach/sent for repairs , any other used one type of delivery challan can be used for all purpose with diff SL no to identify the book used for the purpose. 4. Fabrication Job Card 3.4.16 Goods in Transit The material transferred by one site to another will be immediately informed by the site transferring the material to the site to which the material is transferred. A copy of the dispatch document will be sent by the transferring location to the location to which the goods are transferred. The receiving location will receive the document informing about dispatch of material before the material is received. The receiving location will monitor the time taken for receipt based on this document. The delays in receipt should be followed up with the location sending the material. If the receipt is unduly delayed then the same should be informed to the procurement department at Head office. The procedures for Handling, Storage, Preservation and Accounting shall be in accordance with the following steps:

3.5.0 Handling of Materials As and when the materials are received and routed through inward section of Stores to main stores and issued to the actual user, necessary precautions shall be taken for safe handling as per details below: 3.5.1 Handling of Cement

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Cement shall be received in bulk (in bulker, jumbo bags etc) and / or 50 Kg bags. The bag cement shall be unloaded manually while the bulk cement shall be emptied in cement silos through pneumatic or any other suitable system. The bulk cement may be transferred to main silo subject to verification of week of manufacturing mentioned in the challan/test certificate. 3.5.2 Handling of Explosives Explosives are received from the vendor and shall be issued to the user through explosive van. Each type of explosives shall be handled separately so as to avoid mix up and accidents. 3.5.3 Handling of Diesel Consumer pump shall be set up for storage / issuance of diesel with the help of oil companies. Diesel bousers / Tankers shall be used for issuing diesel where large fleet of equipments/vehicles is required for the branch. Pump as well as metering device shall be periodically calibrated & record shall be maintained by Project Mechanical Engineer. 3.5.4 Handling of Steel Steel shall be unloaded by crane/manually. For further details please refer steel procedure manual. 3.5.5 Handling of Construction Chemicals Chemicals shall be unloaded by rolling over the plywood or over the used tyre to eliminate damage. All other materials shall be handled manually and / or using equipments taking necessary precautions to avoid damage. 3.5.6 Handling of Cylinder Cylinder should unload directly on a raised platform by rolling over a coir mattress, taking care that the bottom end touches first. Full and empty cylinders are to be stored separately. Cylinders must not be kept in battery room or oil storage room. Oil or grease should not come in contact with the cylinder valve assembly or the regulator fittings. Use red hose for DA cylinder and green hose for oxygen. Never interchange hoses. Use hoses of equal length and do not coil the hoses around regulator of the cylinder.

3.6.0 Storage & Preservation Storage shall be organized by allocating clear separate areas such as: Receiving Section for Incoming Materials

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Main Stores for inspected and accepted materials Separate racks for Shelf life items & Hazardous items Rejected Materials Scrap-Yard Open yards for bulky materials such as steel with proper fencing. Cement shall be stored in separate godown or silos Explosives shall be stored in licensed explosive magazines. Gas cylinders shall be stored in sheds to prevent direct sunlight. Separate area for Lubricants & Oils under a covered shed. Consumer pumps /Bowser for Diesel etc Sufficient racks and bins shall be provided in main store (Receiving section, main section & rejected materials) for proper stocking & preservation of materials. All areas and locations shall be suitably coded. These Location Codes shall be mentioned on the bin cards as well as in the computer for updating the Stores Ledger. For storage and preservation of cement & explosive refer work instruction attached. At a regular interval (monthly) all the stores item should be inspected by the stores personnel. Any item found rusty, likely to cross expiry date corrective measures shall be taken. A manual register will be maintained for this purpose of record of such inspection, observations and actions taken.

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PROCEDURE FOR SITE PURCHASE

4.0 SITE PURCHASE MANUAL

4.1 INTRODUCTION 4.1.1 The Hindustan Construction Company (HCC) was incorporated in 1926. The company has become an established name in the civil engineering and construction industry. Its strength lies in heavy civil engineering works for power projects, bridges and construction jobs requiring underground work.

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4.1.2 The operations of the Company are conducted from multi location sites. The Company has its Head office at Vikhroli, Mumbai and Site offices at many locations. The complexity of the business, as the operations are conducted from sites which may be diverse in terms of material requirement and planning and which may be situated at far off places resulting in time lags in coordination and communication with Head office, makes it imperative to document the desired systems and procedures in the form of an Purchase Manual. 4.2 PURPOSE The objective of the Manual is: To act as a guideline on Policies, Procedures and Systems adopted by the Company. To establish uniform methods and procedures for systems and thereby achieve standardization at All locations. To provide adequate controls in the day-to-day procedures, materials cost. To list out the format of records to be maintained. To list out details of reports and formats of periodical reporting i.e. monthly, quarterly, half Yearly and yearly. Ensure that organization should have sound system uniform basis. 4.3 4.3.1 PURCHASE ORGANISATION & FUNCTION Objective of Purchase Department

The objectives of the Purchase function are to ensure that : 1. Materials purchased are of the required quality and quantity. 2. Materials are purchased at the right price on right time and should be delivered on right place. 3. Developing & maintaining good relations with suppliers and developing potential suppliers. 4. Best possible service provided to internal & external Customers 5. Prompt delivery is received from the supplier so that production may not be interrupted. The objective can be summarized as to obtain the right material, in the right quantities, with the right price from right source on right place in required time.

4.3.2 Function of Purchase Department at Site The purchase function at the site includes:

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 Co-ordination with Head office for material purchased by Head office mainly " A " & " B" category items. To make necessary follow up with suppliers for A & B class items on who order has been placed by Head Office Procurement Department. To obtain quotations from a new competent source who can supply major items & accordingly it may be sent to Head Office Procurement Department for final negotiation. All fuel purchases required at the site such as Diesel, Lubricants etc. (POL) Purchase all C class items such as General Store material, Electrical Store material, Consumable etc. Purchase of spare parts required for Break Down maintenance purpose. To develop local competent vendor. To obtain quotations from Local Transporters in order to help HO in finalizing transport order. This information may be sent to HO Procurement Department for further negotiation and release of transport order. Arrangement of transport from local market as an alternative if main arrangement fails. To obtain offers from local scrap and surplus traders and accordingly it will be sent to Head Office for final negotiation. Co-ordination with Accounts Department for making final payment to supplier and also issue of C Form, Form 31 if required. Other purchases of mainly " C" category items directly purchased by the site. Follow-up with accounts dept. at site for making final payments to supplier. 4.3.3 Organization for Purchase Department at Site The Sites may have a Manager-Procurement / Materials separately for purchase function at site an officer and assistants as may be required that is depend on the size of project and type of project. The person in Charge of purchase will report administratively to the Project manager and functionally to the Head- Stores & inventory Management at Head office. In normal course in general a Medium size of project of HCC is Rs. 300 to 400 Cr. In this level Manager Material is responsible for purchase and stores activities at site He is in chare of purchase as well as stores too. Officer level person is assisting to ManagerMaterials for same. Officer purchase is report to Manager- Materials, functional & administratively both. 4.4 Scope of Procurement from Site 4.4.1 As a policy all material categorized as 'A'& 'B' class items should be procured by the Procurement department at Head Office on the basis of site indents. A list of such items is given as (PUR/DOC/01) ISO FORMAT - HCC S 01 07 01. The list is an illustrative list and not an exhaustive list. The site may procure the items listed after obtaining approval from project manager and under the guidance of Head office.

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4.4.2

The details of this type of purchase orders may be sent to H.O procurement dept. monthly and if required These purchase orders would than be subsequently authorised by Head office by an approving authority as may be specified by the Head Procurement or authorised him. 4.4.3 All capital goods shall be purchased from HO only. If site Purchase Department received any request for purchase of Capital items, they must refer it to Head Office. However depending on the location of site HO may direct site Purchase Department to buy a few capital items on case-to-case basis. 4.4.4 All imports are procured by the Head office. All C Class items including Lubricants, Diesel are being procured by Site Purchase Department directly or it is depend on the po value also. 4.5 Type of Material 4.5.1 Raw Materials These are main & major constituents of the Construction product, like Cement, Steel, Aggregates, Additives, Construction Chemicals, Cement Capsules and Wire Mesh, stone, rubble; sand, wood etc purchase order will finalized from HO other then emergency purchase within the limit of project Manager. 4.5.2 Consumables These are the materials, which are consumed during the process such as Explosives, Drilling Accessories, Electrodes, Lubricants, Tyre & tubes etc. 4 .5.3 General stores This includes all general stores items required for the Construction activity such as electrical stores, pipe fittings, sanitary materials etc. 4.5.4 POL This includes diesel, Petrol & different grades of Lubricants etc. 4.6 Purchasing Policy All major purchases shall be referred to HO procure department. Purchases will be made from established sources already registered by HO or site ( In case of urgency/emergency material can be procured from non-registered supplier if it authorized by project manager) Purchase will not be made from vendors not registered with sales tax authorities. As far as possible materials shall be purchased directly from the manufacturer. In case manufacturer has appointed a distributor / dealers and it manufacturer is not servicing directly then alone purchase will be made from distributor/dealers. Only in case of emergencies purchase shall be made from traders. For all large consumption items, purchases shall be made from at least two suppliers so that uninterrupted supply can be maintained. At the same time too many suppliers shall not be kept which will create only administrative difficulties. Wherever there is monopoly, attempt shall be made to develop alternate sources. Preferences shall be given to goods of reputed brands rather than purchasing unbranded goods. This is to ensure better quality of incoming materials. All attempt shall be made to release payment to suppliers as per agreed payment terms.

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For items of regular consumption long term supply contracts shall be made so as to get price advantage and reduce administrative efforts. 4.7 VENDOR MANAGEMENT Procedure 4.7.1: There is a detailed procedure prescribed by the Company for vendor management. This states that the Purchasing authority shall strive to maintain the quality supplies from reliable sources only. To exercise control over sources of Purchase, the purchasing authority shall follow the under mentioned steps which are detailed under the subsequent clauses : a) b) c) d) Preliminary work for vendor registration. Assessment of Vendors and their registration and selection. Performance evaluation of registered Vendors. Initiate action in case of unsatisfactory performance.

4.7.2: The Site should send the necessary details for the purpose of performance evaluation of the vendor. This data shall specifically include for each vendor the following details : i) Total quantity ordered and details of Acceptance/ Rejections against the order quantity. ii) Total quantity ordered and details of quantity, which was delivered later than the scheduled time. Average period taken to replace Rejections. Delays in replacement of rejections should be specified. iii) Average period taken to provide After Sales Service. Delays in providing After Sales Service should be specified. iv) These Reports should be prepared and sent to the procurement department (Head Office ) by the Stores-in- charge on monthly basis. The Site should also follow the preliminary work for vendor registration, assessment and evaluation for key material (i.e. material which goes into final product). The site should follow a vendor registration procedure as given in ISO 9001. 4.8 Preliminary work for Vendor Registration 4.8.1 The Vendor registration shall be done on the basis of available information with the procurement department at site in any of the following forms. Profile of the supplier Catalogue / literature of the supplier. Information from the internet, email, yellow pages, business magazines, news papers, seminars, workshops, training, technical exhibitions, JV / consortium partner, clients or consumption Standard registration form. Supplier suggested by any of the HCC sites or by experienced senior level personnel through email, IOM or free style note. Order executed successfully by unregistered suppliers under urgent situation. The assessment of suppliers shall be done as documented in) (ISO FORMAT - HCC F 01 17 78) by recommended authority.

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The final approval on the recommendation will be given by the PM/WM or any person nominated by them. 4.8.2 Assessment of Vendors and their Registration Based on the recommendations of the vendor assessment, as documented in quality record no : QR-05(06)/3A, the vendors registration status shall be identified in registered supplier list. 4.8.3 Performance evolution of vendor Performance Evaluation of Vendors will be limited to suppliers of key materials and consumables only which determines the quality of final product(Ref. HCC S 01 17 11) 4.8.3.1 All the Vendors included in QR-05(06)/4 (ISO FORMAT - HCC F 01 17 77) shall undergo performance evaluation at least once Four times in a year . Each consignment from each Vendor shall be evaluated on the basis of Quality, Delivery Schedule and price as per the norms given in Data Sheet : DS-05(06)/3. 4.8.3.2 For performance evaluation, quality and delivery of each lot shall be compared with corresponding purchase order. Vendors Performance Evaluation shall be based on monthly report from stores at site, mentioning receipt details, i.e. quantity of accepted materials and actual delivery at site. Records of such evaluation shall be maintained in the prescribed format (Quality record: QR-05(06)/5 (ISO FORMAT - HCC F 01 17 80)). 4.8.3.3 If any of the vendor fails to score minimum points during the evaluation of the yearly quarterly performance, as stated in DS-05(06)/3, the purchasing authority shall initiate actions such as suspension and de registration of the vendor in consultation with the Project manager. If the annual purchase value is more than Rs 10 lakhs the Executive Vice president procurement should also be consulted before discontinuing an approved vendor. Vendor Grading should be done and on the basis of the grade points given to the respective vendors they should be classified as follows : Grade Points 100-91 90-61 60-41 40-0 Classification E- Excellent G- Good M- Satisfactory U-Unsatisfactory

4.90 PURCHASE PROCEDURE 4.9.1 Requirement planning The Site planning department should prepare a Material Requirement Plan based on data on consumption for the previous year as compared with production provided by Purchase Department of site which will be duly approved by the Project Manager. This Material Requirement Plan should specify monthly material requirement. The Material Requirement Plan should be prepared in detail giving the requirement of each material and not for the group of materials. For example : If Cement is the material group the Material Requirement Plan should give the details of Grade wise / Brand wise Cement required. If MS Plates is the material group the Material Requirement Plan should give the details of thickness of MS Plates required.. A copy of the Material Requirement Plan should be submitted to the Head Office (Purchases Procurement), Procurement Manager at Site.

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On the basis of this Material Requirement Plan the Site engineers should prepare indents well in advance considering procurement time required for these materials. Non- Regular purchases of C class items should be procured on the basis of site engineer/ concerned engineers indent duly approved by project manager. The site/-concerned engineer should clearly specify the date of material requirement. The Purchase Department at site should make follow up with planning Department for timely release of Material Requirement Plan.

4.9.2 Indenting & Authorization

Since all purchase will be based on the purchase indents, all concerned site engineer will have to raise indent for the materials that they need for their section. All purchase indent shall be duly approved by project manager. Indents should be raised by the site/concerned engineers in the format prescribed in PUR/DOC/03 (ISO FORMAT HCC F 01 17 71) for this purpose a numbered indent book shall be provided to site/concerned engineers. Head Office Purchases : These purchases are made by Head Office (Purchases Procurement) on behalf of the Sites. These purchases include A & B category materials, Import purchases & Client purchases. Indents should be raised by the site / concerned engineer in the format prescribed in (PUR/DOC/03). This will be consolidated by the Purchase department in the format given as PUR/DOC/3A (ISO FORMAT HCC HCC F 01 07 01) A serially numbered Indent book should be provided to the site / concerned engineer. This indent should be authorized as follows:

Indenter shall verify the stock at the store, if the material is not available in stock, indenter/ user has to get approval from PM or any other person authorized by him and approved indent should be handed over to purchase department for further action. In SAP indenter required to feed the PR. in SAP and Work Manger or PM should authorized the same through system then only the purchase dept will act on. Manual purchase Indent is not required
4.9.3 Receipt of Indent, Verification & Register The Site Purchase Department should verify the Indent Receipt for its description and specification. This indent may be in electronic format our Hard copy as such manual indent should not required if sites have SAP system. For any clarification regarding specification against any particular indent should be taken up by Purchase Department at Site with the respective indenter. Now Procurement Manager will check up with the Procurement Department at HO whether this type of material is available surplus in any one of the existing site. If it is located in any of the site, Procurement Manager may send a letter to the particular site requesting them to dispatch the said material under intimation to HO Procurement Department.

To Decide Procurement from Site or Head Office:

Now if the above item is not available in any of the site then the Procurement Manager will decide from where the Purchase will be made whether from HO or from site depending upon the value of the item and also the availability near the site.
The Manager-Materials (Site) should check the surplus viability in SAP surplus location. If materials are available in surplus location at any of our site he should need to send the STO to particular site for transferring the same. Incase non viability of materials at any of our site. He should refer

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to the database of material to verify whether the material required as per the indent is listed in the database. If it is listed than the database would contain details of characteristics of the material as well as the registered vendors. If the material can be procured form the registered vendors than a Purchase Order should be raised on the registered vendors. If the registered vendors cannot supply to the location where the site is based than process should be initiated to identify new suppliers. The Procurement Manager should raise an inquiry on at least 2 vendors. The inquiry letter should be made in the format as prescribed in ISO FORMAT HCC F 01 07 02. The Letter of Inquiry should be initialed by the Procurement Manager. This inquiry should initiated by electronic format also through SAP. 4.9.4 Quotation & Evaluation On the receipt of quotation from the vendor a Comparative Analysis Statement should be prepared by the procurement Manager(Site). The Comparative Analysis statement should be prepared in the format as prescribed in (PUR/DOC/05). It should be prepared separately for each item or group of items. The quotations and the Comparative Analysis Statement should be prepared indent-wise. The comparative statement may not be necessary if purchased from OEM or its authorised distributor.

SAP sites can invite the quotation through electronic format comparative statement can be maintained in system. No need of keeping hard copy of quotation & comparative statement.
4.9.5 Negotiation After analysis of Comparative Statement the lowest bidder has been chosen and site procurement Department should negotiate further for better Price and terms. In case of item whose consumption is regular in nature quotations are being obtained from 3 4 different vendors. After further negotiations and comparison consolidated rate contract order may be placed covering 3 6 months requirement with a delivery in a phased manner. 4.9.6 Ordering, Authorization 4.9.6.1 The Procurement Manager (Site) should raise a Purchase Order in the format prescribed in (PUR/DOC/06) after selecting a supplier and get it authorized from Project Manager. Procurement Manager @ Site should ensure that all Purchase orders should be released well in advance before the actual material received. 4.9.6.2 The Vendor should acknowledge the Purchase Order and send a copy to Purchases department (Site). The acknowledged copy of the Purchase Order should be filed indent-wise. Copy of Purchase Order should be sent to Accounts / Stores Department respectively, Purchase Department at site should maintain Purchase Orders serially in a file. In SAP Printing of purchase order as such not required but till SAP 4.9.6.3 Amendment Cancellation When any terms of purchase require change after further negotiation, an amendment to Purchase Order should be raised by the Purchase Procurement Manager and should be duly authorised by the Project Manager. The amendment to the Purchase Order should be prepared in the format

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prescribed in (PUR/DOC/07). ISO FORMAT HCC - HCC F 01 17 74 If any order is required to be cancelled, the cancellation order duly authorized by Project Manager will be released by Purchase Department at site. 4.9.7 Follow up, Receipt of material Follow up for material may be made by Purchase Department through Telephone, Fax, Letter etc. Stores Department at Site will prepare the MRN against the receipt of material. Site Purchase Department should advise each vendor to mention the order number and vendor code in their respective Challan.

4.9.8 Pending Purchase Indent / Order 4.9.9 All the Purchase Indent should be recorded in a manual register and will be converted in a purchase order within 7 days time after receipt. A weekly review of pending Purchase Indent has to be done by Procurement Manager and according action has to be taken by Purchase Department. The Purchase department at the site should monitor the pending Purchase Orders. This can be done by matching the receipts with the Purchase Orders. The Computerized system should give details of the Pending purchase orders. The pending orders should be reviewed every fortnight Month by the Site Purchase department. The pending orders should be followed up and if further material is not expected the order should be short closed. 4.10 Inspection In case of any rejection, Purchase Department at site should be informed by Stores and accordingly they should follow up with the vendor for replacement of the rejected material 4.11 Payment Follow Up Purchase Department at Site should advise each vendor to mention MRN number in the related bill along with copies of receipted Challan. The concerned buyer should make follow up with accounts department at site for the final payment to supplier. 4.12 Cash Purchase Cash Purchases should only be made for C category materials. The Procurement Manager (Site) should make a request for an advance in the format prescribed in to the Accounts Manager (Site). This request should be authorised by the Project Manager or any person designated by him. The Purchase procurement Manager ( Site ) should collect cash on the basis of this duly authorised request from the Accounts department. A formal Purchase Order should not be raised in the case of Cash Purchases. The Cash Purchase need to be restricted as much as possible. The maximum value of cash purchases for any individual case should not be more than a value of Rs. 10000/- and should be authorised by PM. 4.13 Emergency Purchase Purchase made on do or die situations is called emergency purchases. Emergency purchases are those where the time required for procurement is critical as material is to be made procured immediately. The vendor who can supply the materials immediately is selected. (Can be procured from non-registered supplier also if it is authorised by project manager). 4.13.1 In case of emergency purchases relating to A & B category materials , the Purchase Procurement Manager ( Site ) should inquire about the market rates , available approved vendors

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with the Purchase procurement department (Head Office). The Purchase Procurement Manager (Site) should negotiate the purchase terms with these vendors and accordingly place a Purchase Order. 4.13.2 The Purchase orders for Emergency Purchase should clearly indicate that the order is for an emergency purchase. The Purchase order should be authorised by the Project Manager. 4.13.3 A report for emergency purchases should be prepared by the Procurement Manager (Site). This report should be prepared separately for A , B & C category materials .The report should be prepared as and when required. 4.14 Client Materials 4.14.1 Client Purchases are such where the purchase is to be made from a nominated (preselected) vendor as per the contract. 4.14.2 The Client purchases should be made only by the Head office. 4.14.3 The inspection of the Client purchase material should be done by the client and the inspection report should be sent to the Stores department (Site). The Stores department (Site) should forward the copy of the MRN along with the inspection report to the Accounts department (Site). 4.14.4 A copy of the vendors invoice is received by Accounts department (Site). The reference of the MRN and the Inspection report should be endorsed on the copy of the vendors invoice and sent to the client against the client should pay an advance as per the terms of the contract. In SAP MRN/GRN printing is not required. Inspection of materials physically required in any case but inspection approval can be not by QC through system. 4.15 Material from Other Branch As per requirement of material at site Procurement Manager should make correspondence with Procurement Department at Head Office whether the required material is available in any of the existing site, if available he may send the request letter to that particular site for transferring the material under intimation to Procurement Department at HO. In SAP surplus location is available if sites placed the materials in surplus location then other sites can see and if required they can place the STO against. Against STO materials can transfer to needy Site. 4.16 Follow up of HO Order Purchase Department at site should prepare a statement showing details of outstanding Purchase Order raised by HO Procurement and get it updated on daily basis. They should make follow up with concerned buyer at HO Procurement for the receipt of materials. Capital items are being procured from Head Office and any purchase indent may be forwarded to HO Procurement Department for further action. In certain cases General Manager (Procurement) at HO may advise site Procurement Department for purchasing any Capital item. 4.17 Uniform Vendor Coding 4.17.1 To attain uniformity in vendor coding at Site and Head Office, it is suggested that there should be a clear segregation of Head Office vendors and Site vendors at Site. The Vendor Master maintained in purchase system at site should be classified as Site vendors & Head Office vendors. The vendors should be classified as :Head office Procurement department will allot vendor code for site purchase also. Head Office vendors Site vendors - By attaching prefix H prior to the vendor code. - By attaching prefix S prior to the vendor code

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4.17.2 The vendor code should be centralised at the Head Office. 4.17.3 The vendor code should have the following features : The code will be the same for Accounts, Purchase, Other Brach, and HO also The code will be the same for the same vendor supplying material at different sites.

IN SAP Only HO will issue the Vender code. Sites are not authorized to issue vendor code.

4.18 VMI - (VENDOR MANAGED INVENTORY) Inventory maintained by vendors at HCC Main Store & to be billed based on consumption. The purpose to implement VMI is to reduce inventory carrying cost & supplier liability. Vendors for fast moving items, wear parts & major items like steel, cement, and admixture etc. should be encouraged to stock. PROCEDURES We shall provide consumption pattern of VMI items to agreed vendors to enable them to determine min/max level to be stocked. We Shall place the Purchase Orders on the maximum level & subsequent Purchase Orders will be released for items reaching below minimum level. We shall identify & allot separate area for stocking vendor inventory. Once the material arrive at our main store, it will be thoroughly checked by HCC representative for any discrepancy such as quantity variation or damage in transit and the same will be communicated to vendor immediately. The stock & consumption details would be entered daily in a register to be maintained by HCC. We shall furnish consumption details to each vendor by the end of every month to enable them to raise bills. All bills should be cleared for payment by site within the period specified in Purchase Order. HCC shall be responsible for any shortage & damage of stock maintained by vendors The Purchase Orders for VMI should clearly indicate that non consumed material will be returned to supplier on freight to pay basis 4.19 Management of Non-moving, Surplus, Damaged / unserviceable stock. 4.19.1 Identification: -The main store has to perform regular procedure for determination of unserviceable or damaged stores, embedded goods, components and adequate provision has to be made in accounts for loss arising there form With the help of reports QR_15(15)/47, nonmoving, surplus materials shall be identified. These reports shall be studied by Stores as well in charge of Mechanical/Electrical/Civil Sections. Items, which are surplus and may be needed by a branch shall be separated and circulated to all other branches to see if any other branch requires the same. If other branch wants these items then same shall be transferred to them.

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In SAP it can be put in surplus location so that others brach can see the list of surplus and on the movement of materials it can be transfer against STO. 4.19.2 Action / Control :- Surplus, Obsolete inventory which is not required by other branches also shall be declared to HO. Spares shall be referred to Equipment Division. Items such as construction aids etc shall be referred to construction asset in-charge at H.O, General Stores shall be referred to Procurement Department. Once it is decided to dispose off particular items, they shall be declared to HO Procurement Department for disposal in a standard format (DAR) quarterly basis. Actions regarding disposal shall be taken at HO. Branch shall obtain quotes from local dealers along with Material Requirement EMD and shall forward them to HO for further actions. Indent

Check Stock?

Issue Material to Indentor

4.20

To Procurement Dept at Site Send Indent for PM / WM Approval

FLOWCHART

To be Proc from H.O.?

Send Purchase Indent to H.O. for Procurement in a prescribed format .ref: HCC P 01 07 01

Procurement

Send Enquiry

Receive Purchase Order Copy from H.O.

Receive Quotations

Compare Quotations and Get Approval on Comparison from PM/WM

Place Purchase Order

Follow Up with Supplier Whenever necessary Receive Mat. & Make Stores Entries

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STEEL YARD WORKING PROCEDURE

5.0 STEEL YARD WORKING 5.1 OBJECTIVE To bring in control on receipt, issue and consumption For better storage and minimise wastage For better accountability For safe & prevent from thief. To meet ISO specification for stocking.

5.2 SCOPE Requirement of all steel CES REQUIRED :

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5.2.1 5.2.2

An exclusive area of 100 M by 90 M needs to be allocated at the beginning of the project for reinforcement yard. This is good enough for handling about 1000 tons of steel at a time. The size of the yard will depend upon project size and quantity of steel to be used. This yard needs to be fenced by Concertina fencing coil and will have adequate gates for trailer and truck loads to enter. Photocopy of this fencing along with address of vendor enclosed.

5.2.3 The steel yard should be near the Main Store so that receipt and issues can be well controlled. 5.2.4 500 kgs. Weighing scale should be in the yard to facilitate weighments. In addition, 60 tons weigh bridge is required. This weigh bridge to have computer package. Weighbridge to have length 60 feet and width 10 feet to ensure accommodating trailer loads weighment. However, location of weighbridge can be decided depending upon the site conditions.

5.2.5
5.2.6 5.2.7

Steel yard should have proper concrete pedestal for storage of steel at least 300 mm above ground level. A mobile 10 tons telescopic crane is to be provided to steel yard for unloading, loading and handling. A civil engineer/ manager is to be made in charge of this steel yard. Additional personnel are to be provided to him depending upon the size of the project.

Steel scrap and waste needs to be stored separately in the yard. Adequate security & lighting must be provided at the steel yard. 5.2.10 Adequate bar cutting/ shearing machines, bar-bending machines to be provided.

5.3 RECEIPT : 5.3.1 Steel yard engineer should check all consignments received for its quality like crack, pitting, rolling defect, not straight, not in full length etc. In case of rejection/ quality problem, steel yard engineer will report to stores for necessary action. 5.3.2 Steel received at the site is to be weighed on the weighbridge and is to be certified by the civil engineer. He will be responsible for the weighment of gross weight, tare weight and net weight. After such certification only, the steel is to be unloaded in steel yard. Thereafter necessary acknowledgement is to be done by the yard engineer on the delivery challan and the same is given to the stores. Based on such certification store shall make MRN, weighbridge weight shall be noted for MRN irrespective whether it is less or more than challan weight.

5.3.3

In case we have client steel, receipt records is to be maintained separately. All receipt record is to be maintained by the steel yard engineer item code wise. 5.3.4 Unloading of the steel is to be as such, to enable issue on FIFO (first in first out) basis as far as possible. 5.3.5 All receipt records at the steel yard, monthly and YTD basis item code wise. shall give material received by site on daily,

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5.3.6

Reinforcement steel and structural steel are to be stored separately, size wise and diameter wise in this yard. Boards shall be displayed indicating size/ quality of steel to be kept on the pedestals.

5.4 ISSUE : 5.4.1 Requirement of steel along with the bar-bending schedule has to be given one month in advance by respective section heads to steel yard engineer. Schedule should indicate the drawing number also for reference.

5.4.2
5.4.3 5.4.4

Season wise steel requirements are assessed by Works Manager/ Project Manager and the same is given to purchase to place order with tentative delivery schedule. Steel yard engineer to ensure this in time. Above schedule shall be monitored by yard engineer depending upon progress of work, stock available i.e. to ensure adequate inventories and co-ordinate with Purchase/ Store. Steel is to be issued from steel yard based on approved material issue slip approved by steel yard engineer, in duplicate duly signed by Site/ Section Engineers. Original issue slip should go to store on daily basis. OR As authorised by PM Steel Issue slip can be made on daily/ weekly / fortnightly or Monthly Basis but reconciliation should be done on monthly basis positively.

In SAP daily issued materials need to feed in system on dally basis without fail.
Since all receipts are on weighment basis, all issues of steel also should be on weighment basis. 5.4.5 Issue of any extra reinforcement as compared to bar bending schedule, already given, should be approved by Works Manager in writing. 5.4.6 Chair support, spacer bars, enabling work should be fabricated from scrap only. In case the same is not possible, we can fabricate the same by welding scrap pieces. Use of full length for above application has to be with the approval of Works Manager only.

See Flow Chart F8 for action between Store and Steel Yard. 5.5 FORMATS TO BE USED : 5.5.1 *Weekly consumption statement (Format attached) **Monthly reconciliation statement (Format attached) 5.5.2 Standard gate for the steel yard (Drawing attached)

Standard concertina fencing coil (Sketch attached) Existing formats of purchase indent, issue note, MRN are to be used 5.5.3 Standard layout for steel yard

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(Layout attached) This format is in use effectively site.

5.6 RECONCILIATION AND CARE TO TAKE FOR MINIMIZING WASTAGE: Proper authorisation of issue indents for non-payable controls wastage. i) The bar bending schedule needs to be verified and cross checked by senior personnel at site before giving it to the steel yard for bending. Weigh bridge calibration at regular intervals is a must to ensure correct receipts & dispatches. ii) Proper storage on the pedestals in the steel yard and also during unloading to eliminate bending of the bars to be ensured. iii) Proper selection of the length of bars while bar cutting to give maximum utilisation of the lengths should be followed.

Utilize all available cut lengths before taking up cutting of short length bars. iv) For non-payable work, stress on utilising end-pieces, scrap and wastage rather than using fresh material. Necessary supervision required in the steel yard at regular intervals by senior personnel from site. 5.6FLOW CHART FOR RECEIPT, ISSUE & RECONCILIATION BETWEEN STORE & STEEL YARD 5.7REINFORCEMENT RECONCILIATION STATEMENT FOR THE MONTH 5.8WEEKLY REINFORCEMENT CONSUMPTION STATEMENT

5.7 Rolling Margin Rolling Margining in Reinforcement steel or Structural steel is measure factor at any construction site .All steel are received (Purchase on weight Basis) on weight basis but we issue on measurement basis .Client also pay us on Measurement basis only. Always actual weight and theoretical weight does not mach and its causes shortage of steel. It is necessary to find out the difference between actual weight and theoretical weight and proof to client that it is nothing but difference is due to rolling margin. It is suggested that as and when steel received at site one piece of exact one meter should be cut in front of client and its weight should be recorded in register for future reference or claim. It is also advise that this exercised should be done jointly by Steel yards in charge, QC-Manager, Client representative and store in charge or any person authorized by them. All representatives should sign as the witness of weight. This exercise needs to be done for each and every lot received at site. ACKNOWLEDGEMENTS : Improvement plan note by

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Mr. A. B. Phadke dt. 29-06-92 Note from Mr. K. R. Viswanath dt. 7-4-99 Manual for Materials Management by Mr. A. K. Khanna dated 9-4-99 Detailed discussion the undersigned had with Mr. K. R. Viswanath at Gosikhurd and Mr. C. P. Ramesh & Mr. K. S. Singh from our Bandra Works on 8-6-99 and 7-7-99 respectively Detailed discussion about steel yard had with Mr. Dilbag Singh from Paradip on 29.09.2006 Mr. Anil Kumar from Paradip on 28.09.2006 All the feed back given and corrected Mr. Arun s Banavali All the guidance from Mr. Arun Karambelkar

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PROCEDURES OF DISPOSAL

6.0 Procedure for Disposal

6.1 SEGREGATION (LOTTING) OF GOODS FOR DISPOSAL Goods for disposal will be broadly classified as under : 1- Surplus Equipment 2- Scrap Equipment 3- Surplus / Obsolete spare parts 4- Scrap Parts (removed from equipment) 5- Construction Aids 6- Surplus stores materials 7- Scrap stores materials 8- Used / Scrap fabricated structures 9- Cut pieces of structural steel / reinforcement steel 10- Surplus Furniture & Fixtures Capital Equipment / Surplus spare parts / construction aids / surplus materials are to be declared for disposal by branches only after obtaining approval for disposal from the concerned authorities at H.O. Disposal Action Request (DAR) should be sent to H.O. disposal action request for disposal from respective authority. All other goods are to be identified and declared for disposal by the branch Monthly/quarterly or as and when required. 6.2 INFORMATION TO PROCUREMENT DEPARTMENT AT H.O. 6.2.1 Once goods are identified for disposal as stated above, Disposal Action Request (DAR) is to be sent to Procurement Department at H.O. by the branch in the format as per specimen enclosed (PUR/Doc/10), to arrange disposal. The description of goods should give maximum possible details of the goods to ascertain their condition. Whenever any vehicle or equipment, which is registered with RTO, is declared for disposal, additional information as follows is to be given in the DAR.

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A. B. C. D.

Road Tax paid up to Insurance valid up to Fitness Certificate, if any, valid up to Whether the vehicle/equipment is in use or in non-use

6.2.2 The goods identified for disposal are to be stacked category wise in lots and a Lot No. should be given to each lot so that the bidders can inspect the goods neatly while submitting their offer and there is no dispute at a later date. If the item under disposal is a capital equipment, Log No. is to be mentioned instead of giving Lot No. However, if the equipment does not carry any Log. No., then a Lot No. is to be given. Lot No. is to be displayed where the goods are stacked. 6.2.3 Once goods are identified for disposal, properly stacked and DAR is sent to Procurement Department at H.O. to arrange disposal, no items should be removed from the lot. If it is absolutely necessary to do so, an immediate intimation should be sent to Procurement Department at H.O.

6.3 INVITE OFFERS 6.3.1 Procurement Department at H.O. will invite offers from the prospective buyers whose details are available in the data bank. If necessary, Procurement Department at H.O. will invite offers by inserting an advertisement in newspapers if the quantity of goods to be disposed is large. 6.3.2 Terms and conditions of the contract for disposal, as per the specimen enclosed (Annexure II), should be enclosed to the invitation of offer. 6.3.3 The bidders should submit their offer along with an Earnest Money Deposit (EMD) which should be 5-10 % of the bid value, by way of a demand draft in favor of Hindustan Construction Co. Ltd. payable at Mumbai. Offers received without EMD will not be considered. The offers must be submitted in a sealed envelope. 6.3.4 Branches also can invite offers from local agencies as per the above procedure and send the offers collected in sealed envelops to the Procurement Department at H.O. 6.3.5 Offers should be obtained by Procurement Department at H.O. and branches as mentioned above within max. 21 days from the date of receipt of DAR / Date of DAR, as the case may be. 6.3.6 If the quantity of goods to be disposed is fairly large, Procurement Dept. at H.O. may decide whether any external agency should be involved in organizing disposal by Auction or by Tenders, as the case may be. 6.4 RELEASE OF DISPOSAL ORDER FROM H.O. The negotiations shall be carried out by Procurement Department; HO & Disposal Order (PUR/Doc/11) (ISO F- N/A) shall be released by them. In case Quantity to be disposed is small, HO may advise the Disposal Order to release from site against specific instruction. 6.5 COLLECTION OF PAYMENT & ISSUANCE OF DELIVERY ORDER FROM H.O.

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6.5.1 The agency (buyer) to whom Disposal Order is issued shall deposit payments as per the schedule given in the Disposal Order with Procurement Department at H.O. either directly or through site. 6.5.2 Procurement Department at H.O. shall forward all such payments received to H.O. Accounts department immediately and H.O. Accounts Department should promptly issue stamped receipt for the same. 6.5.3 Procurement Department at H.O. shall also issue a Delivery Order in the enclosed format (PUR/Doc/12) to the buyer authorizing them to collect goods within specified time as agreed in the Disposal Order and shown in the Delivery Order. A copy of delivery order shall be sent to H.O. Accounts Department, the Branch and to Equipment Division (in case of disposal of equipment and spares). in case site is asked to raise the Disposal Order, they will follow above procedure at site for payment collection & releasing Delivery Order. 6.6 DELIVERY OF GOODS & COLLECTION OF SALES TAX, IF ANY 6.6.1 The buyer to whom Delivery Order is issued should approach the site, from where the delivery of goods is to be taken, with the original Delivery Order. 6.6.2 Site should take possession of the Original Delivery Order and collect sales tax amount at full rate and / or sales tax exemption form, if any, as prescribed in the Delivery Order from the buyer prior to giving delivery of the goods. 6.6.3 Normally loading of the goods is the buyers responsibility as mentioned in the terms and conditions of the Disposal Order. However, if loading facility is available at site, the same may be provided to the buyer on chargeable basis. The site should decide with the buyer the charges to be levied and collect the charges in advance from the buyer.

6.6.4 Terms and conditions of the Disposal Order and Delivery Order should be strictly adhered to. 6.6.5 The Project In-charge at the site, for the above purpose, should form at least three member disposal committee, one each from Stores, Equipment Div. and Accounts Dept. An additional member, if required may be appointed from any other department. This committee will keep check on the physical delivery of the goods such as weighment, delivery of right materials, etc. 6.6.6 The security appointed should cross check the contents of the challan / gate-pass with the goods loaded in the vehicle before vehicle moves out of the premises. Stores copy of challan, therefore, needs to be signed by the Security personnel to this effect and then returned to the stores. 6.6.7 Deliveries shall be taken out only during day time and on working days. 6.7 COMPLETION OF DISPOSAL ORDER A copy of each delivery Challan is to be sent to Procurement Department at H.O. by the branch immediately on delivery. As prescribed in the Disposal Order, when all the goods, for which Disposal Order is issued, are taken delivery of a completion certification is to be issued by the branch to the buyer immediately on the completion of the order.

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6.8 RAISING OF BILL AND REFUND OF SECURITY DEPOSIT / EXCESS MONEY DEPOSITED A bill is to be raised on the buyer by site Accounts Dept. immediately (maximum within 7 days) on completion of the disposal order or intermittently, as the case may be, and is to be sent to Procurement Department at H.O. in triplicate. Bill should give reference of Disposal Order and the delivery Challan under which the goods are delivered to the buyer & also show the tax collected. Procurement Department shall send the bill in original to the buyer, one copy of the bill to H.O. Accounts Department, along with Refund Order, with a request to return security deposit / excess money, if any, deposited by the buyer, and retains one copy in file. H.O. Accounts Department immediately on receipt of bill should refund security deposit / excess money deposited to the buyer through Procurement Department at H.O. 6.9 DISPOSAL FROM SITE If Procurement Dept. at H.O. feels that if the goods declared for disposal can be disposed off directly by the site, the DAR will be returned to site for taking disposal action. In such case Site shall thereafter arrange disposal by inviting offers, releasing of disposal orders, collecting payment, etc. in same way as mentioned above, through Material Dept. at site. 6.9.1 Even Disposal order are issue from HO procurement Sites Materials department (stores & procurement ) should ensure that the following materials should be sold to authorized Re- circler or Purchaser only. 6.9.1 Battery of any size. 6.9.2 Battery acid 6.9.3 Chemical barrel, paint barrel, concrete- admixtures barrel, 6.9.4 Bitumens barrel, or barrel of any petroleum product items.

6.9.5 Waste oil to be sold to only PCB central authorized buyers or re-cycle, 6.9.6 Disposal of fuel Filter, oil filter should also dispose with prayer approval of Municipal Corporation or PCB 6.9.7 Materials Managers at sites should keep updating our self regarding rules & regulation of disposal of various items which are frequently used by the construction industries. 6.10 Disposal Procedure in SAP In SAP Disposal DAR (Disposal Action Request) can be sent from site in (shaft) electronic copy through system (SAP) Ho is floating inquiry through system comparative system can be made and maintained in system. On the base of comparative statement Disposal order is generated .after received of money from Buyers delivery order are released through electronic copy (that is shaft copy) and on the base of delivery Oder site is generating delivery challan against delivery of Materials. If completion certificate is also available in system there is no need to keep any single hard copy or file for deposal from DAR to Delivery challan are fully used.

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FORMATS

LIST OF FORMATS SL . N O 1 2

PARTICULARS PURCHASE INDENT FOR MATERIALS -HO PURCHASE ENQUIRY

S/P REF NO. SP F 01 SP F 02

DOCUMENT REF NO. HCC F 01 07 01 HCC F 01 07 02

OLD REF. NO. PUR/DOC/03 A PUR/DOC/04

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3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

COMPARATIVE STATEMENT OF QUOTATIONS COMPARATIVE STATEMENT OF TRANSPORT OFFER COMPARISON - EQUIPMENT PURCHASE PURCHASE ORDER TRANSPORT ORDER IMPORT ORDER ORDER AMENDMENT SUPPLIER REGISTRATION FORM SUPPLIER ASSESSMENT FOR REGISTRATION PERFORMANCE EVALUATION OF EQUIPMENT SUPPLIER TRANSPORTER REGISTRATION FORM LIST OF REGISTERED TRANSPORTERS TRANSPORTERS PERFORMANCE EVALUATION SUPPLIER PERFORMANCE EVALUATION MATERIALS RECEIPT NOTE (MRN) BIN CARD ISSUE AND RECEIPT OF EXPLOSIVES MONTHLY RETURN OF EXPLOSIVES SPARES AND STORES REQUISITION/ISSUE NOTE MATERIAL IDENTIFICATION TAG TRANSPORT REQUISITION FOR TRAILER/TRUCK INDENT FOR PURCHASE OF CAPITAL EQUIPMENT

SP F 03 SP F 04 SP F 05 SP F 06 SP F 07 SP F 08 SP F 09 SP F 10 SP F 11 SP F 12 SP F 13 SP F 14 SP F 15 SP F 16 SP F 17 SP F 18 SP F 19 SP F 20 SP F 21 SP F 22 SP F 23 SP F 24

HCC 03 HCC 04 HCC 05 HCC 06 HCC 07 HCC 08 HCC 09 HCC 10 HCC 11 HCC 13 HCC 14 HCC 15 HCC 16 HCC 17 HCC 18 HCC 20 HCC 21 HCC 22 HCC 23 HCC 24 HCC 25 HCC 26

F 01 07 F 01 07 F 01 07 F 01 07 F 01 07 F 01 07 F 01 07 F 01 07 F 01 07 F 01 07 F 01 07 F 01 07 F 01 07 F 01 07 F 01 07 F 01 07 F 01 07 F 01 07 F 01 07 F 01 07 F 01 07 F 01 07 PUR/DOC/12 QR-15(15)/14 QR-15(15)/01 QR-15(15)/13 QR-15(15)/09 & 21

SL . N

PARTICULARS

S/P REF NO.

DOCUMENT REF NO.

OLD REF. NO.

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O 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 TRANSPORTS ASSESSMENT FOR REGISTRATION INDENT FOR PURCHASE OF MISCELLANEOUS SERVICE EQUIPMENT (MSE) INDENT FOR SPARE PARTS PURCHASE ORDER ORDER AMENDMENT MATERIAL REQUIREMENT INDENT COMPARATIVE STATEMENT OF QUOTATIONS SUPPLIER REGISTRATION (SITE) LIST OF REGISTERED SUPPLIERS (SITE) LIST OF REGISTERED SUPPLIERS SUPPLIER ASSESSMENT FOR REGISTRATION (SITE) SUPPLIERS PERFORMANCE EVALUATION (SITE) CHALLAN BOOK REJECTED MATERIAL DATA SHEET ON LIST OF MATERIALS MATERIAL INSPECTION AUTHORITIES DATA SHEET ON LIST OF MATERIALS STATEMENT OF EMERGENCY PURCHASE AT SITE CH BOOK-DES. OF CAPITAL ITEMS & MC./ASSET SENT FOR REP. INTER BRANCH TRANSFER CHALLAN MATERIAL ISSUED TO SUB-CONTRACTOR MATERIAL ISSUED TO EMPLOYEE STOCK VERIFICATION & DISCREPANCY REPORT MATERIAL RETURNED BACK BY SITE MATERIAL RECEIVED FROM CONTRACTOR DISPOSAL ACTION REQUEST DISPOSAL ORDER SP F 25 SP F 26 SP F 27 SP F 28 SP F 29 SP F 30 SP F 31 SP F 32 SP F 33 SP F 34 SP F 35 SP F 36 SP F 37 SP F 38 SP F 39 SP F 40 SP F 41 SP F 42 SP F 43 SP F 44 SP F 45 SP F 46 SP F 47 SP F 48 SP F 49 SP F 50 HCC F 01 07 28 HCC F 01 07 39 HCC F 01 07 42 HCC F 01 17 73 HCC F 01 17 74 HCC F 01 17 71 HCC F 01 17 72 HCC F 01 17 76 HCC F 01 17 77 HCC F 01 07 12 HCC F 01 17 78 HCC F 01 17 80 HCC F 01 07 19 HCC S 01 07 01 HCC S 01 07 05 HCC S 01 17 05 PUR/DOC/01 PUR/DOC/09 QR15(15)/33 & 34 QR15(15)/32 QR15(15)/16 & 30 QR15(15)/20 QR15(15)/27 & 28 QR15(15)/07 QR15(15)/04 PUR/DOC/14 PUR/DOC/15 OR05(06)/3A OR05(06)/29 PUR/DOC/02 QR/05(06)/0 4 PUR/DOC/06 PUR/DOC/07 PUR/DOC/03 PUR/DOC/05 OR05(06)/3B

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SL . N O 51 52 53 54 55 56 57 58 59 60 61 62

PARTICULARS DELIVERY ORDER STATEMENT OF PENDING DISPOSAL ORDER MATERIAL RETURNED TO CLIENT PERSONAL TOOL REGISTER SCRAP REGISTER MONTHLY STOCK STATEMENT NON MOVING INVENTORY RECONCILIATION OF MATERIAL ISSUED TO CONTRACTOR RECONCILIATION OF CLIENT MATERIALS SCRAP GENERATION SLIP MONTHLY RECONCILIATION OF EXPLOSIVES DEBIT NOTE CHALLAN

S/P REF NO. SP F 51 SP F 52 SP F 53 SP F 54 SP F 55 SP F 56 SP F 57 SP F 58 SP F 59 SP F 60 SP F 61 SP F 62

DOCUMENT REF NO.

OLD REF. NO. PUR/DOC/15A PUR/DOC/16 QR-15(15)/31 QR-15(15)/36 QR-15(15)/37 QR-15(15)/42 & 43 QR-15(15)/47 QR-15(15)/57 QR-15(15)/56 QR-15(15)/61 QR-15(15)/58

Sample Formats are enclosed.

This manual is an attempt to document the desired policies and procedures. It may not incorporate all areas and may not address all control issues. This should not limit the efficiency of the stores operations nor should it be recourse to actions which are not desirable or not in the normal course.

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