Tri-Pack Films Limited

Procurement Manual Chapter I – Introduction

Chapter I –
Introduction

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TABLE OF CONTENTS
PAGE
A. SCOPE OF CHAPTER...................................................................................................1

B. OBJECTIVE....................................................................................................................2

C. COMMERCIAL DEPARTMENT.................................................................................3

D. DISTRIBUTION OF THE MANUAL AND PHYSICAL SECURITY........................4

E. PROCEDURES FOR UPDATING THE MANUAL.....................................................6

E.1. GENERAL............................................................................................................ 6

E.2. AMENDMENT TO THE MANUAL....................................................................6

E.3. AMENDMENT CONTROL LOG........................................................................7

E.4. AMENDMENT TO THE HARD COPY..............................................................7

E.5. AMENDMENT TO THE ELECTRONIC COPY.................................................7

F. DOCUMENT CONTROL...............................................................................................8

F.1. VOUCHERS AND FORMS.................................................................................8

F.2. RETENTION AND DISPOSAL...........................................................................8

E.2.1 Policy for Retention Periods....................................................................8

E.2.2 Storage of Documents.............................................................................8

E.2.3 Destruction of Documents.......................................................................9

E.2.4 Method of Destruction............................................................................9

ANNEXURE A – REQUEST FOR PROCUREMENT MANUAL.........................................10

ANNEXURE B – REQUEST FOR AMENDMENT FORM...................................................11

ANNEXURE C – AMENDMENT CONTROL LOG...............................................................12

ANNEXURED – ABBREVIATIONS........................................................................................13

A. SCOPE OF CHAPTER...................................................................................................3

B. OBJECTIVE....................................................................................................................5

C. COMMERCIAL DEPARTMENT.................................................................................6

D. DISTRIBUTION OF THE MANUAL AND PHYSICAL SECURITY........................7

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E. PROCEDURES FOR UPDATING THE MANUAL.....................................................9

E.1. GENERAL…………........................................................................................................9

E.2. AMENDMENT TO THE MANUAL.................................................................................9

E.2.1. AMENDMENT CONTROL LOG..................................................................................10

E.3. AMENDMENT TO THE HARD COPY........................................................................10

E.4. AMENDMENT TO THE ELECTRONIC COPY..........................................................11

F. DOCUMENT CONTROL.............................................................................................12

F.1. VOUCHERS AND FORMS..........................................................................................12

F.2. RETENTION AND DISPOSAL....................................................................................12

F.2.1. Policy for Retention Periods.........................................................................................12

F.2.2. Storage of Documents..................................................................................................12

F.2.3. Destruction of Documents............................................................................................13

F.2.4. Method of Destruction...................................................................................................13

ANNEXURE A – REQUEST FOR PROCUREMENT MANUAL.........................................14

ANNEXURE B – REQUEST FOR AMENDMENT FORM...................................................15

ANNEXURE C – AMENDMENT CONTROL LOG...............................................................16

ANNEXURED – ABBREVIATIONS........................................................................................17

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A. SCOPE OF CHAPTER
Procurement Manual (this manual) sets out the procurement principles, policies
and procedures adopted by Tri-Pack Films Limited (the Company) for
preparation, updating and retention of the accounting books and records. This
manual has been approved by the Board of Directors in their meeting on XX (Day)
XXX (Month) 2013.

Head of Department (HOD) shall be responsible for:

 Distribution of the manual to various process owners,

 Maintenance of the record of the holders of the manual and
 Approval of the recommended modifications to existing procurement
policies and procedures.

Heads of Departments / Process Owners shall be responsible for:

 Implementation of the manual and

 Monitoring of compliance with the policies and procedures in the manual.

The manual comprises the following chapters which cover the processes related to
procurement activities:

1. Introduction
2. Commercial Department Organogram
3. Delegation of Authority Matrix
4. Procurement Planning and Forecasting
5. Vendor Registration, Evaluation and Approval
6. Identification of Requisition Requirement
7. Quotations, Comparative Bidding and Purchase Order Issuance and
Approval

All queries, matters, exceptions and modifications to the existing procurement

policies and procedures in this manual should be addressed to Commercial
Manager (CM).

This manual provides a source of instruction and guidance to all employees of the
Company for the application of procurement policies and procedures. The
procurement policies and procedures contained in this manual shall be followed by
all the employees of the Company. Internal Audit Department shall ensure
compliance through their audit plan.

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Where the employees of the Company consider that they are unable, for any
reason, to comply with the policies and procedures defined in this manual, they
should refer the matter to Commercial Manager for resolution through their
respective Head of the Department(s). However, general queries and clarification
matters regarding this manual should be addressed to the Commercial Manager.

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B. OBJECTIVE
The objective of this manual is to promote uniformity and consistency in the
Company’s Procurement function by clearly defining responsibilities, authorities,
and functions. The objective of this manual shall be met by ensuring the following:

a) That Procurement Department adopts and implements leading

procurement practices, policies and procedures uniformly;
b) That internal controls are in place to safeguard the assets of the
Company which shall be ensured during the internal audit;
c) That guidance and instructions are provided to the employees
within the department on the application of the procurement policies,
procedures and financial controls;
d) That the manual is to be used as a standard by Internal Audit
Function for compliance, also to identify any missing controls, that can be
introduced through amendments in this manual;
e) That execution and administration of Procurement functions are
conducted throughout the Company in a controlled and orderly manner; and
f) That sufficient guidance and instructions are provided to the
employees of the Company on the application of the Procurement policies,
procedures and systems.

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C. COMMERCIAL DEPARTMENT

D.

The Commercial Department, functions as an independent operational unit within the

Company’s Organization Structure, duly staffed by suitably qualified and experienced
procurement professionals, under the overall administrative and management control of
chief Financial Officer (CFO). In conducting their functions and activities, the
Commercial Department appropriately coordinates, consults, and interacts with other
Departments such as Marketing & Sales, Operations and Finance Departments in a
suitable manner.

The main function of a Commercial Department shall be to attract and retain

vendors. Therefore, procurement activities need to been coordinated i.e., to meet
the production demand with appropriate supply.

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E. DISTRIBUTION OF THE MANUAL AND PHYSICAL

SECURITY
The following executives of the Company will be provided with a copy of this
Manual:

 Managing Director
 Chief Financial Officer
 Commercial Manager
 Material Manager
 Import Manager
 Internal Audit Manager

Procurement Manual of the Company shall be available to the users in the

following two forms:

 A hard copy available with the Head of Department (Commercial

Department) and
 An electronic copy (read only) available on the Company’s database, access
to which will be given by the Department on the basis of an electronic request.

Distribution of the manual whether in the form of a hard copy or an electronic copy
is the responsibility of Commercial Manager. Distribution of this Manual, in whole
or part, shall be only to those personnel who will have to act on the basis of this
Manual or who would require guidance to carry out their day to day work.

Where a hard copy is required, it shall be provided against an approved

Procurement Manual request (Please refer to Annexure – A to this Chapter for
format of request for Procurement Manual request). The Procurement Manual
request shall contain the following information:

 Date;
 Chapter version number;
 Chapter description;
 Custodian;
 Custodian designation;
 Signature of the requesting Head of Department; and
 Signature of custodian for accepting the Manual.

Commercial Manager (CM) shall also ensure that all the concerned staff in
Procurement Department and other end user departments are aware that there is

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an electronic copy available on the Company’s database and shall provide access
to this database to the concerned personnel at the end user department.

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Where access to this Manual is being given through the database (electronic copy)
it shall be authorized by IT support staff on the basis of an electronic request sent
by the Head of Department to the IT support staff.

The SAP Manager shall provide access of the electronic copy of the Manual to the
relevant employee after receiving the approved request.

SAP Manager shall have a record of the personnel to whom electronic access of the
Manual has been provided.

The contents of this Manual are confidential and should not be copied (physically
or electronically) or distributed outside the Company either in whole or in part
without the prior written approval of Managing Director (MD). Any employee
who is given access to this Manual shall be required to sign an undertaking in this
regard.

Where there is a change of responsibility of an employee, the copy / access that the
employee has of / to this Manual should be handed over to the new employee and
this action shall be documented in the previous employee’s handing over notes.

Where an employee leaves the employment of the Company without another

employee taking over his duties, then the copy of / access to this Manual should be
returned to / revoked by the Head of Department to his / her departure.

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F. PROCEDURES FOR UPDATING THE MANUAL

E.1. GENERAL

It shall be the responsibility of Commercial Manager to ensure that the Manual is

regularly updated. Periodic reviews of the Manual shall be carried out by Material
Manager and Import Manager to ensure that the Manual is up-to-date.

The Manual may require changes on account of any of the following reasons:

 additional policies and procedures consequent to introduction of new

products / services, financial reporting requirements, the level of automation or
changing needs of the Company;
 improvements to existing policies and procedures; and
 Deletions, for example, for superseded or redundant policies and
procedures.

Changes to this Manual shall be reviewed and recommended by Material Manager

and Import Manager. Material Manager and Import Manager shall send the
Manual with recommended changes to Commercial Manager who shall review it
and if in agreement shall forward the same to Head of Internal Audit, CFO and
MD who shall have the final authority to approve the recommended changes.

E.2. AMENDMENT TO THE MANUAL

All requests for amendments to the final version of the Procurements Manual shall
be documented on a Request for Amendment Form, specified for this purpose
(Please refer to Annexure – B to this Chapter for format of amendment form). The
Request for Amendment Form shall be raised by the Material Manager/Import
Manager and shall contain the following:

 Name and signature of proposer;

 Type of amendment (e.g. addition / deletion / modification to an existing
policy or procedure);
 Chapter, section, subsection and page reference;
 Description of amendment and reason for the amendment;
 Date of amendment;
 Prepared by; and
 Approved by.

The Request for Amendment Form shall be circulated by the Material

Manager/Import Manager to all concerned personnel within the Procurement
Department who shall review and comment on any proposed amendment.

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Once the procurement personnel provide their consent on the amendment, the
Request for Amendment Form shall be forwarded to Commercial Manager and
Head of Internal Audit Department for approval and incorporation of the
respective changes. The amendment control log shall also be updated in respect of
the change.

E.3. AMENDMENT CONTROL LOG

A central repository of all amendments made, shall be maintained in an

Amendment Control Log by Commercial Manager and shall form part of each
chapter in this Manual for the reference of those who shall not receive Request for
Amendment Form (Please refer to Annexure – C to this Chapter for format of
amendment control log). The Amendment Control Log shall contain the following:

 Amendment number;
 Date of amendment;
 Chapter, section, subsection and page inserted / deleted / amended; and
 Amended by.

E.4. AMENDMENT TO THE HARD COPY

Any amendment to this Manual shall warrant a reprinting of the affected chapter
and issuance to those users who are holding hard copies. This shall be so due to the
amendment of the version number of the chapter which shall be changed by
Commercial Manager.

On receiving the approved Request for Amendment Form, Commercial Manager

and respective personnel from Procurement Department shall incorporate the
changes in the electronic copy of the Manual and then make the necessary
printouts.

In the interest of economizing, one may choose to reprint only the modified pages.
This is possible when a modification does not change the page number on which any
subsequent sub headings can be found. In this case the affected pages may
physically be removed from the existing copy of this Manual and new pages
inserted to replace them.

Where a modification shall change the page number on which a subsequent sub
heading can be found, then the affected chapter shall physically be removed from
the existing hardcopy of this Manual and the updated chapter shall be reprinted
and inserted in this Manual.

E.5. AMENDMENT TO THE ELECTRONIC COPY

The original electronic file containing the respective chapter that needs amendment
shall be copied and saved with a new version number equivalent to the old version

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number plus one by SAP Manager, thus ensuring that the original file remains
unchanged.

The amended electronic copy shall be forwarded by the Commercial Manager to

the SAP Manager for replacing the existing electronic copy in the database with the
amended electronic copy. The Commercial Manager shall electronically inform end
users who have electronic copies of the Manual to update their copy by obtaining
the amended version from the database.

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G. DOCUMENT CONTROL

F.1. VOUCHERS AND FORMS

Procurement Department shall adhere to and use the standard forms prepared and
distributed. Standard templates (wherever Manual documentation takes place)
shall be provided to the department.

Any changes to forms shall be well justified to the Commercial Manager and Head
of Internal Audit before they can be approved.

Data entry on the computer system must be supported by a serially numbered audit
trail of data entry forms. These forms will be pre-numbered and system generated.

All pre-numbered forms must be held with one individual in the department and
must be filed with that individual. All original cancelled pre-numbered forms will
be retained as record of their cancellation. All numbers in the serial must be
accounted for at any point in time.

In preparation of any voucher or form, all blank lines and / or spaces will be
crossed out before the voucher or form is approved.

F.2. RETENTION AND DISPOSAL

E.2.1 Policy for Retention Periods

As per the Companies Ordinance, 1984 documents shall be retained for a period of
ten years, the responsibility of which shall be with the respective Head of
Departments. Upon expiry of the retention period, the documents shall be
destroyed.

Retention periods shall begin at the end of the financial year in which the document
was created and settled. Where a document is being disputed then the retention
period shall begin at the end of the financial year in which the dispute and the
document are settled.

Retention periods shall end at the end of the financial year in which the document
completes the retention period, after which the document shall be destroyed.

Where a document is to be maintained forever, then the retention period shall be

‘Indefinite’. Documents that shall be maintained for an indefinite period of time
must be kept to a minimum which shall be ensured by the respective Head of
Departments.

E.2.2 Storage of Documents

Documents shall be stored in fire resistant filing cabinets for one year, within the

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access of the employees using the documents. The contents of each cabinet shall be
labeledlabelled clearly to allow quick retrieval of documents when necessary.

After completion of the external audit for a particular year, the documents shall be
moved to fire resistant filing cabinets in the Archives section (Stores). Where
possible documents shall be digitalized / scanned and stored on a computer or
compact discs for easier access.

E.2.3 Destruction of Documents

All documents shall be destroyed upon expiry of their retention period. If any
documents labeledlabelled ‘Indefinite’ (indefinite documents are to be stored
separately) are seen, for a valid reason, to warrant disposal then Commercial
Manager approval shall be sought after which the document may be destroyed.

Each year, immediately after the completion of the external audit for the financial
year, CFO shall co-ordinate with the Commercial Manager for the review of
financial documents. Instructions shall be sent out to the department to carry out
their documentation review.

The purpose of this document review exercise is to ensure that all the required
files / documents are stored in the Company archives, arranged year wise and
properly labeledlabelled. Document retentions shall be as detailed in section I.2.1 of
this chapter. Any documents that are not required shall be burnt / shredded, with
proper supervision and appropriate method of destruction.

E.2.4 Method of Destruction

The method of destruction of documents shall be left to the discretion of

Commercial Manager, but the following principles must be observed.

 All confidential documents must be either burned or shredded;

 Other documents shall be disposed of in the fastest, most economical and
environment friendly manner;
 Destruction of documents must be supervised by a committee appointed by
the CFO.

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ANNEXURE A – REQUEST FOR PROCUREMENT

MANUAL

TRI PACK FILMS LIMITED

REQUEST FOR PROCUREMENT MANUAL

Form Reference: ____ Date ___/___/___

Chapter Version
Chapter Description
Number

Name Designation Signature Date

Requesting
Dept.

Approval of
Head of
Department

Custodian
Approval to
release the
Manual

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ANNEXURE B – REQUEST FOR

AMENDMENT FORM

TRI PACK FILMS LIMITED

PROCUREMENT MANUAL REQUEST FOR AMENDMENT FORM

Form Reference:____ Date of Amendment: ___/___/___

Description of
Section / Type of amendment (addition /
Page amendment and
Chapter sub deletion / modification to an
reference reasons for
section existing policy or procedure)
amendment

Name Designation Signature Date

Change Proposed By

Change Approved By

Change Approved By
Head of Internal
Audit

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ANNEXURE C – AMENDMENT CONTROL LOG

TRI PACK FILMS LIMITED

PROCUREMENT MANUAL AMENDMENT CONTROL LOG

Description

Date of
Amendmen
amendmen Page No. Amended by
t No
t Section / inserted /
Chapter
sub section deleted /
amended

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

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ANNEXURED – ABBREVIATIONS

DESIGNATIONS:

HOD – Head of Department

CM – Commercial Manager

CFO – Chief Finance Officer

MD – Managing Director

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