I T I LIMITED (G overnment of India Undertaking)

I T I LIMITED (G overnment of India Undertaking) Accts/COFN/IFCS/2016-17 Date: 10/02/2017 Subject:-INVITING EXPRESSION OF INTEREST (E.O.I) FOR APPOINTMENT OF CA FIRM FOR PREPARATION OF INTERNAL CONTROL SYSTEM ON FINANCIAL REPORTING UNDER THE COMPANIES ACT 2013 FOR ONE YEAR. Expression of Interest is invited from the interested Chartered Accountancy firms/limited Liability Partnership for consultancy services for review, evaluation & identification of the Internal Control System on Financial Reporting under the Company,s Act 2013, and establishment of effective Internal Controls System in various units/regional Offices of IT I including remediation of any control gaps. ITI has six production units located at Palakkad in Kerala, three units located at Mankapur, Naini & Rae Bareli in Uttar Pradesh, one unit at Srinagar in J&K and one Unit at Bangalore in Karnataka. Eight Regional Offices located at Bangalore, Hyderabad, Chennai, Delhi, Bhubneshwar, Lucknow, Mumbai and Kolkatta. Network Systems Unit at Bangalore and Corporate Office at Bangalore. After the establishment & remediation if any of Internal Controls, the consultant has to assist & coordinate with statutory auditors for their final testing & reporting. 1. Eligibility conditions:- (a) The Chartered Accountant f irms/limited Liability Partnership should have Head office/branch offices at B a n g a l o r e. (b) The Chartered Accountant firm/limited Liability Partnership should have five or more partners. At least one partner should be Fellow Chartered Accountant and at least one of them should have Diploma Information System A u d i t qualification. (c) The Chartered Accountant firm/limited Liability Partnership should have experience of at least five years as on the offer submission date. (d) The C h a rt e r ed Accountant firm/limited Liability Partnership should have at least one year experience of complete comprehensive review and implementation of internal control system under IGAAP (Internationally Generally Accepted Accounting Principals ) / USGAAP ( United States Generally Accepted Accounting Principals) compliance in previous five years in any listed entity or any company which has a turnover of Rs 500 crore or more. (e) Preference will be given to the firm having experience of internal audit/statutory Audit/Implementation of Internal Financial control system in a Telecom manufacturing Company. (f) The working/present auditors of I T I are precluded from being considered and hence

are not eligible to apply. The declaration, that the firm/limited Liability Partnership is not notified for any unwarranted or misleading reporting or not in receipt of any adverse notice against it by Institute of Chartered Accountants of India or by the Ministry of Corporate affairs or Comptroller & Auditor General, has to be submitted in the E.O.I. (g) The turnover of Chartered Accountant firm/limited Liability Partnership should not be less than Rs.25,00,000/- annually in any of the preceding three years, in this regard audited P&L Accounts for the last three years to be attached with the bid. 2. Chartered Accountant firm/limited Liability Partnership to be engaged for internal financial control system will not be allowed to subcontract the job awarded to them. 3. The Chartered Accountant firm/limited Liability Partnership shall be appointed for one year initially which may be extended for one year further based on the performance. 4. Performance of the Agency may be reviewed at any time during the year and contract may be terminated anytime after giving one month s prior notice if performance of the company is found unsatisfactory. 5. The validity of the proposal shall be for 150 days from the date of opening of the Technical Bid without change in the personnel proposed for the assignment in the proposed price. 6. Rates should be offered all inclusive. Service tax should be shown separately as applicable, as per the Annexure-B 7. In case of any discrepancy in the amounts quoted in words and numerical in the financial bids, the amount quoted in words would prevail for evaluation purposes. 8. The rates quoted are for one year which will be applicable for next year also, if the Contract is extended. 9. TDS or other statutory deductions as applicable will be deducted by the I T I at the rates notified by the Govt. of India from time to time for each bill. 10. In case of any dispute, the decision of CMD, IT I shall be final and binding on the Chartered Accountant. firm. Jurisdiction of court will be Bangalore only. 11. Scope of work is given in Annexure-D. 12. Submission of EOI i) Proposals are invited in sealed and stamped envelope containing two separately sealed envelopes, one for the financial bid and another for technical bid accordingly with clear heading/marking as Financial bid and Technical bid on respective envelops and in the technical bid EMD of Rs.20,000/- in the form of DD/Pay order shall invariably be enclosed without which bid will not be considered. a) Technical Bid: Technical bid should contain all the requisite details and documents as per Annexure A detailed as below:

Name of the firm/llp Date of establishment Address: Presence & location of offices in Bangalore Name & Designation of the authorized signatory Phone no & Mobile No Fax No & Email id Service Tax Registration no & PAN (copies to be attached. Number of partners with details regarding ACA/FCA and DISA qualifications Details of experience (as per para 1(d) and 1(e) of above eligibility conditions. Turnover of the Firm./LLP Details of EMD/Bid security Clause by clause compliance/certificate, self declaration, certificate a s p e r A n n e x u r e - C in compliance to para 1(f) of eligibility condition. It is required to submit documentary evidence regarding experience, turnover, no of partners and the existence of the firm/llp along with the proposal. b) Financial Bid: Total lump sum fee for the assignment be quoted in financial bid of the proposal in (Annexure B). The EOI/Bids will be evaluated based on such all inclusive price excluding cenvatable taxes only of the technically qualified bidders and the lowest bidder shall be selected for award of work. Applicable taxes if any should be mentioned clearly in the all inclusive price in the proposal clearly demarking cenvatable and non cenvatable taxes as the selection is on the basis of L1 price with all taxes excluding cenvatable taxes. The envelopes containing bids should be submitted on or before 13.03.2017 by 15.00 Hrs. at the address: The Chief Material Manager & CPIO, ITI Ltd. Regd. & Corporate Office, ITI Bhawan Doorvaninagar, Bangalore - 560016 ii) Technical bid will be opened first on 1 3-03-2017 at 16:00 hours. Financial bid containing price/rate will be opened only in respect of the bidders, who qualify in the Technical bid. The date of opening of financial bid, for those who qualify in the Technical bid will be intimated subsequently. Corresponding financial bid of ineligible and non responsive bids will not be opened and same will be returned to the unsuccessful bidder in due course of time by registered post or by hand. Only one representative may be sent for participation in the opening bid process, for which separate intimation shall be sent to the short listed bidders. iii) The selected firm/bidder would have to furnish security deposit @5% of the value of the contract by depositing the same to C h i e f M a t e r i a l s M a n a g e r & C P I O, I T I L t d. Corporate office within 5 days of the letter of intent issued by this office on selection.

iii) I T I reserves the right to accept or reject the EOI, and to annul the process and reject all EOIs at any time without assigning any reason what so ever and without thereby incurring any liability to the affected bidders. iv) Clarifications, if any, required in respect of scope of work or any other related issue may be asked five days in advance prior to the date of bid opening i.e. by 08.03.2017 and will be clarified immediately through E-mail at least two days prior to the date of opening. It is also requested to furnish the E-mail, Fax No and Telephone no of the person authorized by the bidder to receive the clarification while asking for the clarification. E-mail of the undersigned declared as the nodal officer for this purpose is also mentioned below. v) Time limit for preparation of Internal Financial Control System will be 3 months from the date of issue of purchase order. Failure to adhere to the time limit, will attract penalty in the form of Liquidated Damages recoverable @ 0.5% per week subject to maximum of 12%. Yours faithfully, Chief Materials Manager-CPIO, ITI Ltd. Regd. & Corporate Office, ITI Bhavan, Doorvaningar, Bangalore-16

ANNEXURE-A (On Letter Head EXPRESSION OF INTEREST FOR APPOINTMENT OF CA FIRM FOR PREPARATION OF INTERNAL CONTROL SYSTEM ON FINANCIAL REPORTING UNDER THE COMPANIES ACT 2013 FOR F.Y.2016-17 TECHNICAL BID (To be submitted by the bidder) Name of the Firm/LLP Date of Establishment Address of HQ of the firm/llp Phone No & Mobile No Fax No & email ID Presence & location of offices in Bangalore Firm/LLP registration No & date of establishment (registration copy to be attached) Service Tax Registration Number and PAN (copies to be attached) Number of partners with details regarding ACA/FCA and DISA qualifications Details of experience (as per para 1(d) and 1(e) of above eligibility conditions). Name & Designation of the authorized signatory Turnover of Firm/LLP Clause by clause compliance/certificate, self declaration, certificate in compliance to para 1(f)of eligibility condition (Annexure-C) Details of EMD

Annexure-B (On Letter Head) EXPRESSION OF INTEREST FOR APPOINTMENT OF CA FIRM FOR PREPARATION OF INTERNAL CONTROL SYSTEM ON FINANCIAL REPORTING UNDER THE COMPANIES ACT 2013 FOR F.Y.2016-17 Sl No Amount Quoted (Lump Sum) Service Tax (As applicable) Total Cost (Including Service tax) Amt in Rs. Amt in words: Note: The L-1 bidder will be chosen on the basis of total cost (excluding cenvatable duties & taxes) Signature of Authorized Signatory Name. Designation (Please affix rubber stamp) Date Place

ANNEXURE-C (On Letter Head) EXPRESSION OF INTEREST FOR APPOINTMENT OF CA FIRM FOR PREPARATION OF INTERNAL CONTROL SYSTEM ON FINANCIAL REPORTING UNDER THE COMPANIES ACT 2013 FOR F.Y.2016-17 CERTIFICATE I, --------------------------------------, working as --------------------------------------in this firm and authorized to issue this certificate certify that: a) We have gone through the contents of advertisement and related documents for this EOI and fulfill all the eligibility criteria as per EOI. b) All relevant documents are enclosed with our EOI. c) We have understood that it if is found that our firm is not fulfilling any of the laid down criteria, or relevant details/supporting documents are not found to be enclosed, we will not be given any opportunity for any clarifications and our EOI will be evaluated based on available documents in EOI. d) We also submit hereby our clause by-clause compliance by declaring that all clauses and terms and conditions are agreeable and shall be complied. Signature of Authorized signatory Name:... Designation:.. Date: Place: (Please affix Rubber Stamp)

Annexure-D DETAILED SCOPE OF WORK: The Companies Act, 2013 has introduced some new requirements relating to audits and reporting by the statutory auditors of companies. One of these requirements is given under Section 143(3)(i) of the Act which requires the statutory auditor to state in his audit report whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls. Clause (e) of Sub-section 5 of Section 134 to the Act requires the directors Responsibility statement to state that the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. Rule 8(5)(viii) of the Companies (Accounts) Rules, 2014 requires the Board of Directors report of all companies to state the details in respect of adequacy of internal financial controls with reference to the financial statements Internal Control Compliance based on the Guidance note on Audit of Internal Controls Over Financial Reporting issued by Institute of Chartered Accountants of India in September 2015 and any further clarification / updation /revision issued in this regard, The main scope of the work is to assist the management to establish an effective control system in compliance with the above provisions of Companies Act 2013, the consultant is required to: Study and evaluate the existing process in respect of accounts, audit and finance functions to identify and assess controls inherent within the company s processes and the methodology used to: Mapping material accounts to processes and sub processes. Entity Level Controls (ELC). Walkthrough for evaluating the design of the controls. Identifying risks and controls inherent in the process through Management risk and control matrix (MRCM) and process flow. Testing of controls for evaluating the operating efficiency. Identifying control gaps existing in the process and remediation. PAT ( Process Application & Transaction) and ITGC (Information Technology General Controls. The study will also include to study and evaluate the existing process-sub process identified, which is tentative and subject to approval of ITI board on report of consultant. The existing processes / systems need to be studied at the unique sample generating field units to understand the flow of information / data for the various transactions in

respect of accounts. Based on the study of existing processes / systems and comparison with the best practices in the sector, the consultants would be required to conduct a gap analysis in respect of various functional areas such as finance, accounts, audit, internal control system, budgeting, etc. On the basis of the gaps identified in the processes / systems and best practices in the sector, the consultants would be required to suggest improvements through process reengineering in respect of the various functional areas of accounts, internal control system, costing, etc. Based on identification of areas of improvement in the existing processes / systems, the required improvements would be finalized in consultation with the management of ITI Ltd., to prepare a feasible and implementable roadmap for the effective financial management functions. The suggested process reengineering should be discussed and agreeable to the management of I T I L t d., and should be in support of the proposed manuals and organization structure. Based on the remedial plan of action to mitigate the risk of control gap and the sample testing of the various processes, the consultant will submit report to the management for assessing the effectiveness of internal control system. Consultant will assist and coordinate with the statutory auditor in assessing the Effectiveness of ICFR and the efficacy of the same. After final testing by statutory auditors, if any major risk or control gap is noticed, remediation measures are to be evaluated and submitted to management.

Illustrative List of Risks of Material Misstatement - Control Objectives - Control Activities 1. Cash /Bank Balances 2. Prepaid Expenses 3. Trade Receivables 4. Inventory 5. Fixed Assets 6. Goodwill and Intangible Assets 7. Trade Payables 8. Provision for Expenses 9. Loans /Borrowings 10. Employee Benefits 11. Income taxes 12. Deferred Taxes 13. Provision for Income Taxes/Advance Income Tax 14. Share Capital 15. Revenue from Operations 16. Cost of sales 17. Other Expenses 18. Finance Cost 19. Journal Entries 20. Financial Reporting 21. Implementation of CCEA mandated Revival Package.