Standard Operating Procedure (SOP) for Store

(Procurement of Material)

1. Monthly Budget requirement is prepared at site and sent to HO for approval. The Budget
requirement contains details of items which need to be procured.
2. Budgetary approval is accorded at HO by COO. The Budgetary approval is shared
with the Plant Heads, Barrage Head & Admin Head at site, who in turn shares it
with Manager Stores for preparation of Indent for both the projects.
3. Indent is prepared by Manager Stores and takes sign off from the Plant heads, Barrage
head & Admin Head.
4. Basis the approved Indent, Manager Stores takes vendor quotations (3), finalizes
the vendor in consultation with the HoDs and makes the Purchase Order (POs). The
PO is given a number. The unique number to be given to any PO is to be done as
mentioned in Annexure I.
5. The POs to be signed by:
a. Plant Heads & Admin head for their respective department for procurement up to Rs
1Lakh.
b. For procurement above Rs 1 Lakh, the draft POs are sent to HO for verification of
commercial terms & signing of PO.
6. The signed POs are circulated in soft copy to respective departments and Finance &
Accounts at site & HO for records by Manager Stores. Where POs are signed at HO,
signed POs are circulated in soft copy to all by Deputy Manager- F&A from HO
Finance & Accounts team. The original signed POs issued from site are to be
maintained by Manager Stores. POs issued from HO are to be maintained in original
by HO Finance & Accounts.
7. After issuance of PO:
a. On receipt of PI for advance (upto Rs 1Lakh) against signed PO, PI with all the
documents (indent, quotation, signed PO, Gate entry document, MRN. Gate entry
document & MRN preparation is Stores incharge responsibility who is Manager Purchase
for Stores Supervisor for Tashiding project) is put up by Manager Purchase to the
Plant head & Admin Head for their certification.
b. On receipt of material, gate entry is done, Material receipt Note (MRN) is prepared
(Gate entry document & MRN preparation is Stores incharge responsibility who is
Manager Purchase for Stores Supervisor for Tashiding project) and invoice with all the
documents (indent, quotation, signed PO, Gate entry document, MRN) is put up by
Manager Purchase to the Plant head & Admin Head for their certification. The
material is taken into stock and the details of the same is maintained / updated by
Stores Incharge for respective projects.
c. For point a & b above, in case the amount in the PI / Invoice is more than Rs
1Lakh, then the PI / Invoice after HOD certification is sent with all the documents
to HO GM-Finance & Accounts for further approval and payment processing.
8. Certified invoice / PI as per point 7a & 7b with all documents is submitted to Site
DGM-Finance & Admin for further processing.
9. The Site Finance & Account verifies all the documents together with the invoice / PI
and submits to HO GM-Finance & Accounts with complete document set for payment
processing. A copy of the same set is also maintained by them at site for their own
records.
10. On release of payment from HO, payment intimation is shared by Deputy / Senior
Manager – F & A to site concerned persons.

Annexure I
Eg: if a Purchase order for regular O & M in Barrage has to be issued in SEPL from site,
the numbering will be done as below:

SEPL/Site/Barrage/PO/2022-23/001
The above sequence is derived with the help of table below:

SEPL Site Barrage PO 2022-23 001

Name of the Location Department Type of Document Financial Sequence
Company
Year
SEPL HO PH Work Order (WO) 2022-23 001
Site Barrage Purchase Order
(PO)
Transmission Agreement (AGR)
Power sales Capex (CAP)
Administration
Environment
IT
Finance &
Accounts
HR
Secretarial
Insurance
Legal
Safety
 Logbook to be maintained by store

These are the written logbook such as gate pass logbook, Purchased indent,
Material Receipt Note (MRN), Material Issue Slip

1. GATE PASS BOOK –

2. PURCHASED INDENT
 2. MATERIAL ISSUE SLIP

4. MATERIAL RECEIPT NOTE (MRN)-

 Standard Operating Procedure (SOP) for Store
(Material Receipt Note (MRN) & Issuance (Issue Slip))

A. Introduction

1. Material receipt and issuance is very important function for any organization.
Inventory management is much more specific to procuring, storing and handling
the store's inventory (physical items). It is important to The document the process
of MRN & Issuance of any items which is being procured by the company or
supplied by the vender to the company.

2. This document covers the entire process on end to end basis and outlines the
responsibilities of various departments / personnel involved in the process.

3. The broad process involved is as follows:

a) Material Receipts
b) Storage- Proper Up Keeping of the items at designated places
c) Issuance of items
d) Physical stock verification
e) Inventory Management- MIS, Minimum stock alarm, Cost analysis
f) Gate pass book
g) Tools issue and return Register.

4. The process requires involvement of multiple departments and therefore it is

proposed to implement the entire process. The individual/ group of members would
have specific responsibilities in relation to the activities. The responsibility matrix
would involve 4 levels viz. (i) Primary (process owner in ordinary course, MIS and
custodian of documents), (ii) Secondary (to guide the primary process owner and
to act as the primary owner in the event of non-availability of the primary process
owner), (iii) Supervisor (to monitor the entire process, act in the event of any
slippages and intervene in any special circumstances not envisaged in this SOP)
and (iv) Auditor (to ensure compliances of the process, MIS and highlight the
deficiency for sustainability / improvement as required).

B. Material Receipt Note (MRN)

5. On receipt of the items procured by the company or supplied by the vender,

following process shall be adopted/ adhered:
 a. Items shall be entered in the prescribed register of the security register. Before
making the entry in the register the physical checking of number of items/ boxes
and necked eye inspection of the item and cross checking from the challan/ bills
shall be carried out by security personnel. Any deficiency such as numbers of items
or any loss including broken of any items etc to be noted on challan/ bill as well as
in the prescribed register.

b. After completing the process mentioned in point 5 (a), the material shall be sent to
store and store personnel shall verify from the purchase order and make entry in
the register. Any deficiency such as numbers of items or any loss including broken
of any items etc to be noted and to be informed to procurement department under
intimation to his supervisor and user.
c. After completing the process mentioned in point 5 (b), user and concerned person
of quality dept (if any) shall check/ inspect the quality/ weight and all other
parameters/ standards mentioned in purchase order (PO) for each material/ items.
He shall make the report of the same and it shall be signed by user and Site In-
charge/ Functional Head. If any deviation found from the PO, the report shall be
sent to purchase department for onwards communication to vender/ supplier.

d. If material find in order, then bill of the items shall be sent to account for releasing
the payment or adjustment of advance paid (if any) against the material or items.

e. MRN is mandatorily supported to the bill for release of payment of the supplied
item/ material.

f. MRN shall not be issued if item not received in store. In case any item sent directly
to shop floor/ Machine hall or site without entering in the store, then issue slip to be
submitted to store along with challan / invoice. So in this case MRN and Issue slip
shall be entered in store record simultaneously on same time.

C. Entry of the material/ Material in Computer Software (POMS)

a. On preparing of Physical MRN, entry to be made in software/ Stock Register. For

any new items code to be developed/ allotted before entering the software.

b. After entering the material / items in software the accounts department shall check
and release the payment.

D. Issuance of Items/ Material

I. For Consumption

a. The use shall submit the Material issue slip duly approved by his supervisor and
mention the purpose/ name of the machines/ component where items to be used.
 b. The material shall be issued to user for onward consumption and user shall return/
deposit old item/ replaced item to store if so.

II. Returnable gate pass shall be issue on following circumstances

i. Any item found not in order as per specification of PO, then material shall be
returned to vender/ supplier under intimation or on request of purchase
department.

ii. Any item is being rejected by user and same is being sent to vender for
replacement/ change.

iii. Any item is being issued on rent to vender /or employee for temporary use or on
loan.

iv. Any item being sent for sample/ R&D purpose.

v. Any other purpose being approved by management.

III. Non- Returnable gate pass shall be issue on following circumstances:

i. When any item is being rejected by user and no possibility of purchase the material
or requisition has been cancelled.
ii. In case of any item being sent to Group Company permanently on non-returnable
basis.

iii. In case of sale of any company asset/ items.

iv. Any other purpose being approved by management.

E. Physical stock verification of store items/ inventory

a. The stock verification of the store items/ inventory to be carried out on monthly
basis by the person who is looking after or responsible for store. He shall submit
the report of the same to his supervisor by 10th day of every month.
b. The stock verification of the store items/ inventory to be carried out on quarterly
basis by the supervisor concerned and internal auditor by 30 th day of end of every
quarter.
c. The stock verification of the store items/ inventory to be carried out on half yearly
basis by account department 30th day of end of Ist half of the year.
d. The stock verification of the store items/ inventory to be carried out on annual basis
as on 31st march every year by 15th April. This exercise shall be carried out by
account department of HO and concern person responsible for store.

F. Responsibility Matrix

a. The material inward, out ward and Audit matrix are tabulated as under:

S.no Activity Responsibility Person

.
1 Entry Check/ Security Check Post Concern Person/Shift
Verification Supervisor
2 MRN Preparation Store Supervisor Concern SH of the
function/Site
3 Entry in Stock Store Supervisor SEPL-Zaffer Ali
Register/Software
4 Monthly Audit Person entering in To be decide by
POMS/Software and Management.
nomination for MRN
preparation
5 Quarterly Audit Store Supervisor and To be decide by
internal auditor Management.
6 Half Yearly Audit Accounts department To be decide by
Management.
7 Annual Audit Accounts To be decide by
department/3rd Management.
party Auditor

 The site where no security personnel deployed, then this PSS/ Shift In-charge of
concern shift would be responsible to carried out this work when material
received at site.

b. Internal Audit shall review the process, documentation and record keeping (filing,
etc) on a regular basis and submit a report to CEO after incorporating comments
from all concerned.

G. Review/ MIS and Audit

c. The SOP would be reviewed after three year (maximum) to see if any changes /
optimization are required in the process.

d. HR would be responsible to update the responsibility matrix on a yearly basis

(minimum) to ensure that the designated personnel are available in the service of
the company.

H. Effective Date

e. The SOP would come in to effect from the date of its approval.

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