UTTAR PRADESH STATE SUGAR CORPORATION LIMITED
TERMS OF REFERENCE for selection of Valuer(s) for 33 Sugar Mills of UPSSCL (including subsidiary companies)
1. Purpose
The Uttar Pradesh State Sugar Corporation Limited (UPSSCL) proposes to engage the services of a panel of Valuer(s) to value the mills as per the Policy of the Government of Uttar Pradesh, Department of Infrastructure Development.
UPSSCL is engaged in the production and sale of sugar of Sugar Mills situated at different locations in the State of Uttar Pradesh. For the purpose of valuation exercise, 33 mills have been grouped into five bundles (or ‘packets’). The bidders may bid for one or more bundles. Two independent valuers will be appointed for independent valuation of each bundle. The bundles of the sugar mills are as below:
Packet / Unit Name / District1 / Rohanakalan / Muzaffarnagar
Bijnor / Bijnor
Chandpur / Bijnor
Sakhotitanda / Meerut
Meerut / Meerut
Mohiuddinpur / Meerut
Saharanpur / Saharanpur
2 / Bulandshahr / Bulandshahr
Amroha / JP Nagar
Rampur / Rampur
Bareilly / Bareilly
Chhata / Mathura
Hardoi / Hardoi
Maholi / Sitapur
3 / Jarwalroad / Bahraich
Ghatampur / Kanpur Dehat
Burhwal / Barabanki
Barabanki / Barabanki
Raebareli / Rae Bareilly
Nawabganj / Gonda
4 / Khadda / Kushi Nagar
Chhitauni / Kushi Nagar
Ghughli / Maharajganj
Siswabazar / Maharajganj
Shahganj / Jaunpur
Pipraich / Gorakhpur
5 / Bhatni / Deoria
Baitailpur / Deoria
Deoria / Deoria
Munderwa / Basti
Ramkola / Kushi Nagar
Lakshmiganj / Kushi Nagar
Nandganj / Ghazipur
A brief profile of each sugar mill is enclosed at Annexure-I for your ready reference. Further information in respect of the same can be obtained from the designated Nodal Officer of UPSSCL namely:
1. Sri Vinay Priya Dubey, Managing Director, U.P. State Sugar Corporation Ltd., Vipin Khand, Gomti Nagar, Lucknow-2260010, Tel.:0522-2396556,+91-9999400995,+91-9999400994
2. Eligibility criteria
i. The bidder should be a “Government Approved Valuer”
ii. Preference will be to the bidder who has completed valuation assignments of at least 10 industrial units, of which at least 2 assignments should involve valuation of sugar mill.
iii. Preference will be given to valuers with prior experience of valuation for disinvestment purposes for Government of India or State/UT by valuing the assets using all four methods of valuation.
iv. The bidder should satisfy itself that it has capacity and manpower and undertake that it can complete valuation of the awarded bundles within the stipulated timeframe (4 weeks from the date of appointment).
v. The bidder will need to submit a Bid Security of Rs. 50,000 (Rupees Fifty Thousand Only) per bundle which shall be refunded to the unsuccessful bidders within one week of the date of opening of the bids. For successful bidders, the same shall be converted into Performance Security and will be refunded after completion of the valuation assignment to the satisfaction of UPSSCL.
3. Proposed schedule for completing the assignment
The Valuer shall be expected to have the entire valuation process completed and submit its report within 4 weeks from the date of appointment. The site visit to sugar mills shall be completed by 31st August 2007. The appointed valuer may contact the Managing Director, UPSSCL for any assistance/ escort at the site of sugar mill. If the valuer feels that he will not be able to complete the assignment in the stipulated time frame due to non- availability of data it should give a notice stating the information gaps and the expected time delays on such account so as to reach the office of The Managing Director, UPSSCL, at least 10 days before the completion date stating the information gaps.
4. Last date for submission of bid
The interested bidders may submit their bids within a sealed cover subscribing on the top of envelope “Bid for appointment of Valuer” positively by 13.00 hrs. on August 10, 2007 or before, on any working day between 09.30 hrs. and 18.00 hours (IST) to The Managing Director, U.P. State Sugar Corporation Ltd., Vipin Khand, Gomti Nagar, Lucknow-2260010, Tel.:0522-2396556, Mobile .No. 0-9415006161
5. Bidding Format
The sealed cover (as mentioned in para 4 above) should contain:
· Application Covering letter as per Annexure II
· 2 separate sealed envelops marked as:
- Envelop-A: Technical Bids (as per Annexure III) &
- Envelop-B: Financial Bids (as per Annexure IV)
Envelop – A i.e. Technical Bid, should contain the supporting documents (as per details below and Annexure III) and Bid Performance Security amount whereas, Envelop -- B should contain unconditional Financial Bid.
Documents to be submitted with Technical Bids
i. Valid and duly authenticated registration certification issued by the state or central government certifying the valuer as a “Government certified valuer”
ii. Proof for each completed valuation assignment for which credit is claimed
iii. Full particulars of the constitution, ownership and main business activities of the prospective Valuer(s) (bidder).
iv. Undertaking stating that the bidder has not been barred from undertaking similar assignments from any of the State Governments or the Union Government of India.
v. Details of the pending litigation and contingent liabilities, if any, that could affect the performance of the bidder under the mandate, as also details of any past conviction and pending litigation against sponsors/partners and any areas of possible conflicts of interest.
Documents to be submitted with Financial Bids
The Valuer(s) are required to submit the sealed Financial Bids incorporating the Lump-sum Fee chargeable (including valuation fee, expected out of pocket expenses and gross of all applicable taxes) . The Bid should be unconditional. The valuer may bid for one or more bundles for valuation. The bid should indicate the fee chargeable on a per item basis for the following:
a. Fee for Valuation of Bundle 1
b. Fee for Valuation of Bundle 2
c. Fee for Valuation of Bundle 3
d. Fee for Valuation of Bundle 4
e. Fee for Valuation of Bundle 5
6. Sub-contracting
The appointed valuers may sub-contract work to other agencies. However, the appointed valuer will be responsible for the final deliverable and certify the correctness of the valuations on its own letterhead.
7. Opening of Bids & Bid Evaluation Criteria
The opening of bids shall take place at U.P. State Sugar Corporation Ltd., Vipin Khand, Gomti Nagar, Lucknow-2260010 at 1400 hours IST in the presence of bidders on August 10th 2007.
The bids shall be scrutinized on the basis of details provided in Envelop A (Technical Bid) following the under mentioned qualifying criteria:
WEIGHTAGES: Technical aspects shall carry 50 % weightage whereas the financial aspects shall carry 50% weightage.
Technical
· Past experience of the bidder
· Past experience of Valuation in disinvestment/sale for GOI
· Past experience of valuation in disinvestment for Central/ State Government PSUs
· Past experience valuation of industrial units
· Past experience valuation of sugar Mills
· No. of years experience of key personnel associated with the engagement
· Number of certified valuers with the firm
Financial
· Lump sum Fee quoted for valuation
For each packet, the two independent valuers with the highest and second highest total score will be appointed as valuers. The fee payable to each of the two appointed valuers will be the lowest amongst the fee quoted by the valuers with the highest and second highest total score.
8. Letter of Appointment
The selected Valuer(s) shall be issued a Letter of Appointment immediately after completion of the bid evaluation and selection process on the same day i.e. 10th august 2007.
9. Payment of fee to the appointed Valuers
The total fees (Adjusted for penalties if any) will be paid in the form of a lump sum payment on completion of the assignment which is on submission and satisfactory completion of the stated deliverables (As stated in Para 11) to UPSSCL.
10. Scope of work
The responsibilities of the Valuer(s) would, inter-alia, be to undertake a valuation of mills as per Govt. of UP guidelines. The methodology used for valuation should include but is not limited to:
1. Discounted cash flow (DCF)
2. Balance Sheet Method
3. Market multiples method/Comparable companies method
4. Market valuation of assets/Asset Valuation Method
The above methods have been explained in detail in Annexure V
If the valuer in his professional opinion believes that any one or more methods of valuation may be inappropriate, he may exclude these methods. However, the valuer will have to provide a justification for not using the method.
The above valuations have to be supported with well laid out assumptions, which will need to be fully justified and explained in the report and in the presentation as specified under the “Deliverables” section of these Terms of Reference.
In case of market multiples method, the use of a comparable should be explained in the valuation report.
If the valuer in his professional opinion believes that other methods of valuation may be appropriate, he may also include these methods in addition to those required. However, the valuer will have to provide a justification for using the method.
In case of Market valuation of assets/Asset Valuation Method, valuation may be done for:
a. Plant and Machinery
b. Land and Building
c. Intangibles, if required
d. Other assets
Presentation to UPSSCL: As a part of terms of ToR, the valuers will be required to make a presentation to UPSSCL, if called for, and justify the valuation and the underlying assumptions.
11. Deliverables
The deliverables for valuers includes:
§ The last date for submission of valuation report is four weeks from the issue of letter of appointment.
§ A sealed valuation report containing valuation Report of each of the sugar mills in the bundle awarded to the Valuer in LoA.
§ A presentation to justify the recommended valuation, if called for.
Penalty for Late submission
For each day of delay in submission of the valuation report a penalty of 1% of the valuation fee shall be deducted from fees payable to the valuer for each bundle.
12. Other terms and conditions
§ All the information/details to be supported by authentic documents duly certified by the authorized signatory.
§ UPSSCL reserves the right to negotiate the Lump-sum Fee and with the selected bidder.
§ UPSSCL reserves the right to reject any or all Bids without assigning any reason thereof as well as the right to add/delete/modify any one or more of the terms and conditions.
§ UPSSCL reserves the right to discontinue the services of the appointed Valuer(s) at any point of time on account of force-majure or non-satisfactory performance by the Valuer(s).
§ The Valuer is required to comply with the guidelines issued by the Deportment of Infrastructure Development, Government of Uttar Pradesh.
Managing Director
UP State Sugar Corporation Ltd
ANNEXURE I
UP STATE SUGAR CORPORATION LTD. (UPSSCL)
Sl. / Unit Name / Location / Land Area / Year / Crushing / Cane / PBITNo. / Capacity / crushed
sq. mtr / (TCD) / (lac tons) / (Rs. in lac)
1 / 2 / 3 / 4 / 5 / 6 / 7 / 8
A - / UP State Sugar Corporation Ltd.
1 / Amroha / J. P. Nagar / 304081.06 / 2004-05 / 3000 / 2.722 / 489.19
2005-06 / 3000 / 1.785 / 248.47
2006-07 (prov.) / 3000 / 4.566 / -1959.48
2 / Bijnor / Bijnor / 173200.00 / 2004-05 / 2500 / 4.559 / 1482.89
2005-06 / 2500 / 3.394 / 2151.85
2006-07 (prov.) / 2500 / 4.605 / -236.00
3 / Bulandshahr / Bulandshahr / 363440.00 / 2004-05 / 2500 / 2.700 / 111.61
2005-06 / 2500 / 2.086 / 310.66
2006-07 (prov.) / 2500 / 3.697 / -920.79
4 / Chandpur / Bijnor / 291017.80 / 2004-05 / 2500 / 3.828 / 867.71
2005-06 / 2500 / 2.430 / 1407.24
2006-07 (prov.) / 2500 / 4.530 / -233.56
5 / Jarwalroad / Bahraich / 290847.83 / 2004-05 / 2500 / 2.258 / 770.45
2005-06 / 2500 / 2.798 / 502.06
2006-07 (prov.) / 2500 / 3.768 / -1226.65
6 / Khadda / Kushi Nagar / 277250.38 / 2004-05 / 1600 / 1.722 / 359.71
2005-06 / 1600 / 2.046 / 104.13
2006-07 (prov.) / 1600 / 2.409 / -971.82
7 / Mohiuddinpur / Meerut / 271167.95 / 2004-05 / 2500 / 3.535 / 830.11
2005-06 / 2500 / 2.345 / 650.88
2006-07 (prov.) / 2500 / 3.431 / -1550.55
8 / Rohanakalan / Muzzafar-nagar / 355270.00 / 2004-05 / 1300 / 1.570 / 343.92
2005-06 / 1300 / 1.045 / -216.05
2006-07 (prov.) / 1300 / 2.407 / -744.92
9 / Saharanpur / Saharan-pur / 638618.00 / 2004-05 / 2500 / 2.255 / 288.00
2005-06 / 2500 / 2.921 / 324.25
2006-07 (prov.) / 2500 / 4.387 / -813.11
10 / Sakhotita-nda / Meerut / 99040.00 / 2004-05 / 1800 / 2.237 / 600.61
2005-06 / 1800 / 1.757 / 315.87
2006-07 (prov.) / 1800 / 2.649 / -553.94
11 / Siswabazar / Maharajg-anj / 163128.93 / 2004-05 / 2500 / 1.974 / 62.96
2005-06 / 2500 / 2.720 / 148.02
2006-07 (prov.) / 2500 / 3.433 / -832.55