PARRY SUGARS REFINERY INDIA (PVT) LIMITED

SCRAP SALES – STANDARD OPERATING PROCEDURE

1. PREAMBLE................................................................................................................... 1
2. BACKGROUND............................................................................................................. 1
3. POLICY AND OBJECTIVE..............................................................................................1
5. COMPONENTS.............................................................................................................. 2
6. LIST OF SCRAP ITEMS GENERATED.............................................................................2
7. SCRAP COMMITTEE.....................................................................................................2
8. VENDOR SELECTION AND SOURCING PROCESS..........................................................3
9. SALE OF SCRAP............................................................................................................ 3

Particulars Responsible Acknowledgement

SOP Ref/Date/ Number PSRIPL/SOP/SCRAP/01
SOP Drafted by SPR & Co
SOP Reviewed by Management Audit
Process Owner Sr. Manager – Purchase
Dept. HOD Sr. GM – Commercial
SOP Approved by Sr. GM – Finance
Version Draft
W.e.f 01-05-2018
Next Review Due Date 30-04-2019
Review Responsibility Management Audit /
Finance
1. Preamble
1.1. Code of Ethics
1.1.1.As a guiding principle of professional conduct all employees of Parry Sugars involved in the scrap
sales function will abide by the following code of ethics
 To consider the total interest of the Organisation in all transactions without impairing the dignity
and responsibility of the position held in the Organisation
 To act without prejudice and seek maximum commercial benefit in all transactions for the
Organisation
 Apply “zero tolerance’ in assuring strict adherence to local and international laws and regulations
as well as to the Group’s ethical standards
 Ensure all business transactions are fully and fairly recorded according to the Group’s accounting
principles.
 Ensure continuous training and awareness for employees on how to handle ethical issues, as well
as timely advice and guidance
 Regularly monitor ethical conduct and ensure that accessible systems are in place for employees or
others to report potential violations.

2. Policy and Objective

2.1. This document encapsulates the sale of scrap material procedures and protocols followed by the
Company at the Kakinada Unit.
2.2. To promote judicious handling and sale of scrap material.
2.3. To ensure the vendors are selected on a fair basis.
2.4. To ensure fair valuation of various scrap items generated and sold.

3. Key Risks

This document attempts to cover the following keys risks in the sale of scrap operation:

3.1. Sale of items which is actually not scrap

3.2. Sale of scrap at lower prices due to price rigging
3.3. Sale of scrap on credit basis

4. Components
This document covers the following components of Sale of scrap operations:

 List of scrap items generated

 Scrap committee and its function
 Vendor selection and sourcing process
 Sale of scrap

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5. List of Scrap items generated
5.1. The following are the list of scrap items generated in the process of refining raw sugar:
 Metal waste: (MS/SS) Metal cutting waste in Mild steel, GI, Aluminium, Tin, etc. used cables
 Packing material: Wood, Plastic Carbuoys, Iron strip, PP bags and black tarpaulins, cardboard
boxes, bubble sheets, paper wrappings, Cut and torn bags
 Process generated waste like filter bags, Non usable insulation material like wool etc.
 Used Vibro Screens, Brass, Copper items
 Barrels
o Plastic (35litres, 50Litres and 200 litres)
o MS (200litres)

5.2. The above scrap accumulated in the scrap yard is inspected and certified as saleable scrap by the
Scrap committee prior to calling of quotes from buyers.

6. Scrap committee and its function

6.1. The scrap committee shall consist of the following heads of the unit:
 Plant Head
 Engineering Head
 Commercial Head
 Purchase Head
 Finance Head

6.2. Scrap committee shall meet at every month last Friday – To review and action plan with target dates
6.3. Purchase department shall submit the quantity of scrap stock and it should be viewed judicially really not
usable for any other work , fix a Rate Contract for all items of scrap, based on their current market value and
the period within which the same has to be purchased by the selected vendor
6.4. Minutes of the meeting shall be documented with justification within 3 days from the meeting date.
6.5. quantity of scrap accumulated and It should be viewed judicially really not usable for any other work, fix a
Rate Contract for all items of scrap, based on their current market value and the period within which the
same has to be purchased by the selected vendor (Validity of the agreed rates)
6.6. The Vendors for purchasing scrap materials identified by the Committee (Exiting vendor and new vendor)
are invited to visit the premises to examine the scrap items.
6.7. Scrap vendor shall provide all the details as per PSRIPL tender document. (Annexure 2 – for Tender
Format)
6.8. A cut-off date shall be announced by the committee by which the sealed quotations and security deposit
should be received.
6.9. Each Vendor shall submit their sealed quotations to the Scrap Committee. The quotations shall be received
directly at office premises only and dated upon receipt.
6.10. Each Vendor shall also submit a refundable security deposit to the Company.
6.11. The Quotations shall be opened in the presence of all scrap committee members. All sealed covers to be
initialled by the members of the scrap committee to evidence their presence at the time of opening the
quotes.
6.12. The Committee shall prepare a final comparative statement of quotes received and select the highest
bidder and intimate him of the same (Vendor selection shall be finalised on the same of quotations opened)

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6.13. Basis above, a scrap contract shall be prepared outlining the details of the quantum of scrap to be sold,
value and the timelines within which the same is to be cleared from the premises by the selected vendor.
The vendor shall be asked to given his acceptance of the contract in writing.
6.14. Upon receipt of acceptance from the selected vendor, security deposits should be returned to those
vendors who have not secured the bid.

7. Control over the scrap generation and disposal

7.1. Purchase head shall visit the scrap yard on weekly (Friday/Saturday) basis to ensure the scrap collection and
segregation of scarp
7.2. Route cause analysis shall be carried for the sold scrap during 2017-18 to make necessary action plan for
reduction in scrap generation for 2008-19.
7.3. List of hazardous scrap is defined in (Annexure 1) and process of handling the same is defined – All the
department are responsible for complying with the process
7.4. The scrap committee is responsible for providing the “net cost to company” to study the impact before every
sale made for the month
7.5. Scrap committee has earmarked the scrap area and it is the responsibility of each employee (Including
contractor) to dispose the scrap at this point

8. Sale of scrap
8.1. A sale order for the value of the contract shall be generated in SAP and sent to the buyer.
8.2. SEZ process to be complied in the following manner
 Performa Invoice shall be made by purchase team for the agreed price and quantity
 Applicable duty amount with remittance date be made to finance team
 Duty amount will be paid out of amount collected from scrap vendor only and deposited in to bank
 SEZ Team has to file the BOE for assessment by SO and out of charge by P.O
 Tare weight and Gross weight shall be made at PSRIPL only
 Invoice in SAP shall be raised by Accounts for disposal of the scrap

8.3. The scrap material will be cleared only during the office hours on all working days (Up to 5 PM only)
8.4. Sale of scrap shall be strictly on cash basis. The buyer shall receive the scrap material only when full
payment of advance has been made and realised. In case of staggered payments, proportionate amount of
material shall be delivered.
8.5. Security should present while loading the material and counting and signature should be obtained from both
scrap vendor and security in charge in the weighment slip only.
8.6. An invoice shall be generated in SAP for each lot (in-case of proportionate deliveries). The rate shall be as
agreed in the scrap contract. TCS (tax collected at source) shall be levied at 1% on the buyer.
8.7. All materials shall be sent out of the premises on an NRGP (Non-returnable gate pass). The security shall
physically inspect the invoice and NRGP vis-a-vis the stocks being taken out.
8.8. A declaration shall be obtained from the buyer that the scrap materials purchased shall not be used for any
illegal or unethical purposes.

8.9. SAP Functionality

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 Name Description Transaction Code
Sale order creation Creation of sale order with details of VA01
scrap items to be sold - quantity and
rate
Sale order modification Changes if any to be made to the sale VA02
order
Sale order display View details of any sale order VA03
Sale order delivery Issue of sale order generated to the
buyer VL01N
Sale order delivery  
modification VL02N
Sale order delivery display   VL03N
Creation of sale invoice of the scrap
Sale invoice generation materials being taken by the buyer VF01
Changes if any to be made to the sale
Sale invoice modification invoice VF02
Sale invoice display View details of any sale invoice VF03

Annexure 1
Sl. Wastes
No.
1 Brass Dross
2 Copper Dross
3 Copper Oxide mill scale
4 Copper reverts, cake and residue
5 Waste Copper and copper alloys in dispersible form.
6 Slags from copper processing for further processing or refining
7 Insulated Copper Wire Scrap/copper with PVC sheathing including ISRI-code material
namely "Druid"
8 Jelly filled copper cables
9 Spent cleared metal catalyst containing copper
10 Spent catalyst containing nickel, cadmium, zinc, copper, arsenic, vanadium
11 Zinc Dross-Hot dip Galvanizers SLAB
12 Zinc Dross-Bottom Dross
13 Zinc ash/skimmings arising from galvanizing and die casting operations
14 Zinc ash/skimming/other zinc bearing wastes arising from smelting and refining
15 Zinc ash and residues including zinc alloy residues in dispersible form
16 Spent cleared metal catalyst containing zinc
17 Lead acid battery plates and other lead scrap/ashes/residues not covered under Batteries
18 Components of waste electrical and electronic assembles comprising accumulators and
other batteries included on list A, mercury-switches, activated glass cullets from cathode-
ray tubes and other activated glass and PCB-capacitors, or any other component e.g.
cadmium, mercury, lead, polychlorinated biphenyl) to an extent that they exhibit hazard
characteristics
19 Paint and ink Sludge/residues
20 Used Oil and Waste Oil - As per specifications prescribed from time to time.

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