1. finance
2. accounting and auditing

Revised Request for Proposal
For
Appointment of Audit firms for various audit assignments of
IDBI Mutual Fund Schemes
May 15, 2015
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Disclaimer
The information contained in this Revised Request for Proposal (RFP) document or
information provided subsequently to applicants whether verbally or in documentary form by or
on behalf of IDBI Asset Management Limited (IDBI AMC), is provided to the applicant(s) on
the terms and conditions set out in this RFP document and all other terms and conditions
subject to which such information is provided.
This RFP document is not an agreement and is not an offer or invitation by IDBI AMC to any
parties other than the applicants who are qualified to submit the applications (“practicing
Chartered Accountant Firms”). The purpose of this RFP is to provide the applicant(s) with
information to assist the formulation of their proposals. This RFP does not claim to contain all
the information each applicant may require. Each applicant should conduct its own
investigations and analysis and should check the accuracy, reliability and completeness of the
information in this RFP. IDBI AMC makes no representation or warranty and shall incur no
liability under any law, statute, rules or regulations as to the accuracy, reliability or
completeness of this RFP.
The information contained in the RFP document is selective and is subject to updating
expansion, revision and amendment. It does not purport to contain all the information that a
Applicant may require. IDBI AMC does not undertake to provide any Bidder with access to
any additional information or to update the information in the RFP document or to correct any
inaccuracies therein, which may become apparent. IDBI AMC reserves the right or discretion
to change, modify, add to or alter any or all of the provisions of this RFP document and / or the
selection process, without assigning any reasons, whatsoever. Such change will be intimated
to all applicants. Any information contained in this RFP document will be superseded by any
later written information on the same subject made available to all recipients by IDBI AMC.
IDBI AMC may in its absolute discretion, but without being under any obligation to do so,
update, amend or supplement the information in this RFP.
IDBI AMC reserves the right to reject any or all the expression of interest / proposals received
in response to this RFP document at any stage without assigning any reason whatsoever. The
decision of IDBI AMC shall be final, conclusive and binding on all the parties.
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IDBI Asset Management Ltd
Engagement of Audit firms for various audit assignments for IDBI Mutual Fund Schemes
1.
1.1.
Invitation for empanelment
IDBI ASSET MANAGEMENT LTD(CIN U65100MH2010PLC199319) a company
incorporated under the Companies Act 1956 having its Registered Office at IDBI
Tower, WTC Complex, Cuffe Parade Mumbai 400 005 and having its Corporate Office
at 5th Floor, Mafatlal Centre, Nariman Point, Mumbai 400021, hereinafter referred to
as “The Company”, had issued a RFP on February 26, 2015 inviting applications in the
prescribed format from the practicing Chartered Accountants Firms in India for various
following audit assignments:
Company
/ Assignment
Period of Assignment
Mutual Fund
IDBI
Asset Internal Audit
April 01, 2015 to March 31,
Management Ltd.
2016
IDBI Mutual Fund Concurrent Audit
April 01, 2015 to March 31,
Schemes
2016
Internal Audit
April 01, 2015 to March 31,
2016
Statutory Audit of Mutual Fund April 01, 2015 to March 31,
schemes
2016
1.2.
While, the competent authority had approved the appointment of audit firm for internal audit
of IDBI Asset Management Limited, the competent authority of IDBI Mutual Fund Trustees
has thought fit to revise the evaluation criteria for appointment of audit firm for various audit
assignments of IDBI Mutual Fund schemes and accordingly revised the period of assignment
in respect of Concurrent Audit from April 01, 2015 to March 31, 2016 to July 01, 2015 to
March 31, 2016 Therefore, the company hereby invites fresh applications in the prescribed
format (Attached as per Annexure-I) from the practicing audit firms in India who are willing
to take up following assignments:
Company
/ Assignment
Period of Assignment
Mutual Fund
IDBI Mutual Fund Concurrent Audit (Details scope July 01, 2015 to March 31,
Schemes
of audit is attached as per 2016 (9 months)
Appendix-I)
Internal Audit (Details scope of April 01, 2015 to March 31,
audit is attached as per 2016 (12 months)
Appendix-II)
Statutory Audit of Mutual Fund April 01, 2015 to March 31,
schemes (Details scope of audit 2016 (12 months)
is attached as per Appendix-III)
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1.2
Due Diligence
The Applicant is expected to examine all instructions, forms, terms and specifications in this RFP.
Application shall be deemed to have been done after careful study and examination of this RFP with
full understanding of its implications. The Application should be precise, complete and in the
prescribed format as per the requirement of this RFP. Failure to furnish all information required by
this RFP or submission of a Application not responsive to this RFP in every respect will be at the
applicant’s risk and may result in rejection of the Application.
1.3
Cost of Participation
The bidder shall bear all costs associated with the preparation and submission of its Application and
IDBI AMC/IDBI MF, will in no case be held responsible or liable for these costs, regardless of the
conduct or outcome of the selection process.
1.4
Clarification of RFP Documents
A prospective Applicant requiring any clarification of this RFP may notify IDBI AMC in writing by
E-mail at [email protected]. IDBI AMC shall respond in writing by E-Mail to any
request for clarification of the Application documents, from the prospective Applicants, which it
receives not later than 27th May, 2015 – 5.00 Hours. Further IDBI AMC will respond by E-Mail, to
all clarifications, without identifying the source of the inquiry. IDBI AMC shall not be responsible
for any external agency delays.
1.5
a)
b)
c)
d)
1.6
1.7
Amendment of RFP Document
IDBI AMC reserves the sole right for including any addendum to this entire bid process. The
bidders shall not claim as a right for requiring IDBI AMC to do the aforesaid.
At any time before the deadline for submission of offers, IDBI AMC may, for any reason,
whether at its own initiative or in response to a clarification requested by prospective
applicants, modify this RFP Document.
All prospective Applicants who have received this RFP shall be notified of the amendment in
writing by e-mail or fax or post, and all such amendments shall be binding on them.
If required in order to allow prospective Applicants reasonable time in which to take the
amendment into account in preparing their applications IDBI AMC, reserves the rights to
extend the deadline for the submission of applications. However no request from the
Applicant, shall be binding on IDBI AMC for the same
The applications should be submitted through email on [email protected] in
PDF FORMAT, to be followed by the Hard Copy.
The proposed appointment would be for one financial year (i.e. from April 01, 2015 to March
31, 2016 except in case of concurrent audit which for 9 months upto March 31, 2016) and
shall be renewed for a further period subject to review by IDBI AMC.
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1.8
The application through email shall followed by Hard Copy of the Application form duly
signed and stamped alongwith attested copy each of audit firm’s registration/ peer review/
profile in the record of ICAI and all experience certificates/ letter of appointments justifying
the experience of audit firm, to be submitted to:
The Managing Director & Chief Executive Officer
IDBI Asset Management Ltd
5th Floor, Mafatlal Centre,
Nariman Point,
Mumbai-400021
by postal service / courier.
“Application for appointment for ___________________(Audit Assignment)-2015-16”
should be superscribed on the envelope carrying the application.
1.9
The quotes for audit fee shall not be sent through emails, as these are required to be submitted
in a separate sealed envelope.
“Quote for the fee for audit assignment
__________________ for FY 2015-16” should be superscribed on the envelope.
All enclosures must be attested as true copy under seal by the partners (by managing partner
or all).
Last date for submission of the application through email is on or before May 25, 2015 by
5.00 PM, and signed application form alongwith annexure should reach our office latest
before May 27, 2015 by 5.00 p.m. applications recevied thereafter shall not be considered.
1.10
1.11
1.12
Mere submission of application does not, in any way, constitute guarantee for allotment of
any audit assignment from the Company.
1.13
The Company reserves the sole right to shortlist and award the assignments based on
specified criteria and subject to approval of the appointment by Competent Authority
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Eligibility Criteria
The indicative eligibility Criteria for Audit Firm to be eligible for conducting Internal/ Concurrent/
Statutory Audit of IDBI Mutual Fund for FY 2015-16, is as under:
Criteria
Constitution
of Firm
Internal Audit
Concurrent Audit
Statutory Audit
Partnership Firm or
Partnership Firm or
Partnership Firm or
Limited
Liability Limited
Liability Limited
Liability
Partnership (LLP)
Partnership (LLP)
Partnership (LLP)
Registered with the Registered with the
Institute of Chartered Institute of Chartered
Accountants of India Accountants of India
(ICAI)
(ICAI)
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Registered with the
Institute of Chartered
Accountants of India
(ICAI).
Minimum
relevant
experience of
the Audit Firm
Base
office
and adequate
experienced
staff
Immediate 5 years of
statutory
audit/
internal/ concurrent
audit
or
SEBI
inspection of MF
Schemes of atleast of
similar size or above. (
IDBI MF had AAUM
of about Rs.7000 crore
across 23 MF schemes
as on March 31, 2015)
Immediate 5 years of
Concurrent
Audit
(NAV Calculation) of
MF Schemes of atleast
of similar size or
above. ( IDBI MF had
AAUM
of
about
Rs.7000 crore across
23 MF schemes as on
March 31, 2015)
Immediate 5 years of
statutory audit/ SEBI
inspection
of
MF
Schemes of atleast of
similar size or above. (
IDBI MF had AAUM
of about Rs.7000 crore
across 23 MF schemes
as on March 31, 2015)
The firm should have necessary office set up in Mumbai headed by atleast
one of the senior (Chartered Accountant) partners of the firm. The
local office shall have adequate audit team engaged in audit of mutual
funds which shall comprise of atleast one qualified Chartered Accountant/
Company Secretary/ Cost Accountant who will lead the team and ensure
proper deployment and timely completion of the assignments.
Further, the preference would be given to the firm where one or more
partners themselves were engaged in the Mutual Fund and or now
handling relevant audit assignments of other Mutual Funds and or the firm
have employed CISA/ DISA qualified staff.
Cooling
Period
The appointment of concurrent/ internal/ statutory audit firm shall be
initially for a period of one year. The term may be extended, solely at the
discretion of IDBI AMC, for a period of two years (1+1) on satisfactory
review by the competent authority.
A cooling period of one year shall be given after completion of three years
of audit.
The existing internal / concurrent auditor/ Statutory auditors of IDBI MF
schemes shall not be eligible to apply for the respective assignment again.
Any case or
legal
action
pending
against
the
Firm, if any /
Peer Review
There should not be any legal action taken or pending including
professional misconduct against the firm by:
By ICAI;
By any Corporate;
By Bank or any other financial institution to whom any default has been
committed etc.
By any other Government agency.
The firms shall submit a self attested copy of the latest Peer Review report,
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if any conducted by ICAI.
Compliance
with
other
statutory
provisions
The Firm/ all partners are in compliance with the relevant provisions of
the Companies Act 2013. A certificate in this regard be submitted along
with the application.
Please furnish the following details alongwith adequate supporting documents
regarding firm’s experience in Mutual Fund Industry (only for immediate last five
financial years)
Name of
the Fund
House/
AMC
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3.01
3.02
3.03
3.04
3.05
3.06
Nature of Assignment
(Statutory/ Concurrent/
Internal/ SEBI
Inspection)
Year of
Assignment
Year end
AUM (Latest
year in which
Audit
assignment
was handled)
Name of
the Partner
with no. of
other Staff
deployed
Evaluation of Audit firm for appointment of audit assignments:
The application shall be received as under:
a) Audit Firm shall send its request for proposal (RFP) (in the format prescribed at
Annexure-I) through email as well as by hard copy; and
b) Audit Firm shall also submit Quote for fee for the respective audit assignment (in the
format prescribed at Annexure-I) in a separate sealed envelope only. No quotation
(Draft or otherwise) will be entertained through email and the application shall be
rejected in case quote for fee are sent alongwith the application or in the same
envelop which contains the application of the firm.
The Audit firm will be evaluated based on eligibility criteria as mentioned above.
Merely meeting the eligibility criteria shall not automatically entitle the firm for
appointment.
The Company reserves its right to cancel any or all the offers without assigning any
reason whatsoever.
The audit firm which is presently appointed as auditor of IDBI MF schemes, shall not be
considered for appointment for the same assignment.
The same firm shall not be shortlisted for Statutory Audit as well as for concurrent/
Internal Audit of IDBI Mutual Fund schemes.
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3.07
The selection of audit firm shall be two stage processes. At stage-I, the technical bid shall
be opened. The firms which meet the eligibility criteria as mentioned above (during
technical bid), only would qualify for stage-II i.e. Financial Bid. At stage-II, the financial
bids (quotation for audit fee) shall be opened for the audit firm which qualified at
technical bid stage-I. The qualified audit firm, which would have quoted the lowest fee
for the respective audit assignment (L1 basis), shall be allotted the respective audit
assignment for the period mentioned above.
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Documents to be submitted with the application
Audit firms shall submit the following documents along with the application.
i)
General information as per Application (format given in this document - Application
for Appointment of Audit Firm).
ii)
Copies of certificate of experience and conduct of audit assignment etc., in relation to
similar assignment performed elsewhere during last five years.
iii)
Copies of Registration Certificate issued to the firm by ICAI alongiwth latest profile
of the firm downloaded form the ICAI website.
iv)
Copy of constitution Certificate issued by ICAI.
v)
A copy of the latest peer review certificate issued by ICAI.
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Terms and conditions
No communication will be sent by the IDBI AMC and no correspondence will be
i.
entertained in respect of firms, which are not being selected.
The Firm, on receiving the offer letter by way of e-mail from IDBI AMC, should
ii.
submit the hard copies of Letter of acceptance of terms and conditions, undertaking
letter, compliance to “ Dos and Don'ts” and Undertaking of Fidelity and Secrecy, as
furnished in Annexure II, III, IV and V respectively.
The assignment should be carried out in a professional manner and in case of any
iii.
misconduct & negligence, IDBI AMC is free to report the matter to ICAI/ SEBI/
RBI under the guidelines from time to time. This will be in addition to the
disengagement from the assignment.
All the necessary certificates including quarterly, half-yearly, annual closing of
iv.
Book of Accounts that need to be given by audit firm as a part of Concurrent Audit /
internal audit assignment shall be given under its letterhead without any additional
certification fee.
By virtue of the engagement, the successful applicant’s team may have access to
v.
business information of IDBI AMC. IDBI AMC shall at all times have the sole
ownership of and the right to use, all such data in perpetuity in the course of
performing the Service(s) under the Engagement.
Appointment of Audit Firms shall be purely at discretion of IDBI AMC and no
vi.
rights whatsoever accrue to the firm for such appointment.
vii. Audit firms shall submit monthly/quarterly/half-yearly reports in structured formats
(as per standard practice and finalised with the Management/Board) within
stipulated period i.e. within 10 days of the completion of month / quarter / half-year.
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viii.
ix.
x.
xi.
xii.
Any persistent delay shall be viewed negatively at the time of review of the audit
firm.
IDBI AMC shall monitor the performance of audit firms closely. Performance of
the Firms shall be evaluated once in a year for their quality and coverage of
reporting. In case, Audit firm is not attending audit work properly, continuous delay
in submission of reports, non reporting of serious irregularities/ deviations, nondetection of fraud, non-detection of excess expenditure or wrong calculation of
NAV, Leakage of income etc. where they are conducting concurrent audit, IDBI
AMC reserves the right to terminate the assignment, without assigning any reason.
In case of termination of assignment, the remuneration for the incomplete month
and the residual period of engagement shall not be payable by IDBI AMC.
The firm shall not sub-contract the audit work assigned to any outside firm or other
persons even though such persons are qualified chartered accountants.
The audit firm shall adhere to the audit coverage strictly as per the scope as may be
decided by IDBI AMC from time to time.
IDBI AMC reserves the right to seek views from the coporate houses with whom the
firm is/has been/was associated as Auditors.
Any other terms and conditions of the assignment would be decided by IDBI AMC
on a case-to-case basis.
6
Tenure of Audit Assignment
6.01
The appointment of concurrent/ internal/ statutory audit firm shall be initially for a period
of one year (except in case of concurrent audit which shall be allotted initially for 9
months upto March 31, 2016). The term may be extended, solely at the discretion of IDBI
AMC, for a period of two years (1+1) on satisfactory review by the competent authority.
A cooling period of one year shall be given after completion of three years of audit.
After completion of specific period (including the cooling period), the firm may be
considered for other audit assignment, as per extant policy of IDBI AMC.
6.02
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7.01
7.02
7.03
7.04
Payment of fee
The audit fee would be decided based upon the quote received from the Audit Firm
selected for the respective Audit Assignment, as part of this application and assignment
shall be awarded accordingly after negotiations if any.
No out of pocket expenses or travelling allowance/ halting allowance shall be paid to the
audit firms for carrying out the assignment. However, service tax, education cess etc.
shall be paid as applicable from time to time in addition to basic fees.
Payment to the auditors shall be subject to deduction of tax at source at appropriate rates
then applicable.
All necessary certificates that need to be given as part of audit assignment shall be given
by the audit firm without any additional certification fee.
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7.05
8
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
8.09
8.10
The Audit fees once fixed shall remain the same throughout the tenure of the Auditor.
The only exception may be in case of revision in the scope of audit. IDBI AMC’s
decision will be final in this regard.
Conduct and Performance Monitoring
IDBI AMC shall designate one of its senior officer as a Nodal Officer as a single point
contact for coordinating the audit assignments.
IDBI AMC shall provide the auditor with requisite initial information of its activities and
further support to conduct audit.
Minor irregularities pointed out by the Concurrent Auditors are to be rectified on the spot.
The audit firm should ensure rectification of deficiencies without any loss of time so as to
achieve the very purpose of concurrent audit. As regards internal Audit assignment, it
would be ensured that the Audit Reports are closed within one month of submission.
Pending issues of previous reports shall be highlighted/ reported as persisting irregularity
/ deficiency in the subsequent reports.
A formal wrap up discussion with the Departmental Head and with Senior Management
shall be arranged before submission of report by the auditor. In case of any difficulty in
interpretation of the internal policies/ circulars/ guidelines of the company by the
department or by the Auditor, the same shall be referred to the Concerned Department/
Audit Co-ordinator before finalization of the report.
All the audit aspects/ areas covered in the scope of audit assignment including quality of
compliance with the internal as well as with all statutory provisions/ requirements shall
be covered and commented upon by the Internal Auditors.
The Senior Management shall interact with the Auditors at least once in a quarter.
IDBI AMC reserves its right to review the appointment at any point of time and if
necessary, can cancel the appointment by giving 7 days written notice. In case of
termination of assignment, the remuneration for the incomplete month and the residual
period of engagement shall not be payable by IDBI AMC.
In case the firm fails to report serious omissions/ commissions/ non compliance etc.,
IDBI AMC reserves right to report the matter to ICAI / SEBI/ RBI & initiate appropriate
action. Such firms will be black listed and they will not be eligible for assignment of
audit work with IDBI AMC for next five years.
The Concurrent Audit has very important role in identifying System lapses, irregularities
of every type, NAV calculation mistakes, delay in upload/ non-compliance with statutory/
internal guidelines, detecting frauds, pointing out procedural lapses etc. Therefore, it
would be expected that Audit Firm keep its staff updated with the Statutory and other
legal requirements as well as with the internal circulars/ policies/ guidelines of IDBI
AMC.
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8.11
The Auditors are expected to provide the full report, an executive summary of
observations and a Power point presentation of the same to the Management to be
presented to the Board.
8.12 The Senior partner of the form is expected to attend the Audit Committee of the Board of
IDBI AMC when their respective items are put up for consideration.
8.13 The Board may also like to separately interact with the Auditors at their discretion
without the presence of AMC management.
8.14 The Auditors are expected to strictly abide by the Directions of the Board as advised by
them from time to time. Further, the scope of audit as defined in this document is
indicative and is subject to revision/ modification/ alteration/ addition with the approval
of the competent authority of the company.
8.15 The quality of the Audit (specially concurrent audit) would be judged from the number of
instances of wrong calculation/ of NAV, Declaration of NAV after cut off time, internal /
procedural lapse on the part of the staff etc.
8.16 If the Concurrent Auditor fails to attend the office on day-to-day basis or the attendance
of the Partner of the firm is found to be poor, his services are liable to be terminated by
giving 7 days written notice.
9 Representations and Warranties
i.
That the Applicant is a Partnership firm/LLP which has the requisite qualifications,
skills, experience and expertise in providing Service(s) contemplated hereunder the
financial wherewithal, the power and the authority to enter into the Engagement and
provide the Service(s) sought by IDBI AMC.
ii.
That the Applicant is not involved in any major litigation, potential, threatened and
existing, that may have an impact of affecting or compromising the performance and
delivery of Service(s) under the Engagement.
iii.
That the representations made by the Applicant in its application are and shall continue
to remain true and fulfill all the requirements as are necessary for executing the duties,
obligations and responsibilities as laid down in the Engagement and the RFP Documents
and unless IDBI AMC specifies to the contrary, the Applicant shall be bound by all the
terms of the RFP.
iv.
That the Applicant has the professional skills, personnel and resources/authorizations
that are necessary for providing all such services as are necessary to perform its
obligations under the application and this Engagement.
v.
That the Applicant shall use such assets of IDBI AMC as IDBI AMC may permit for the
sole purpose of execution of its obligations under the terms of the RFP or the
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Engagement. The Applicant shall however, have no claim to any right, title, lien or other
interest in any such property, and any possession of property for any duration
whatsoever shall not create any right in equity or otherwise, merely by fact of such use
or possession during or after the term hereof.
vi.
That the Applicant shall procure all the necessary permissions and adequate approvals
and licenses for use of various software and any copyrighted process/product free from
all claims, titles, interests and liens thereon and shall keep IDBI AMC, its directors,
officers, employees, representatives, consultants and agents indemnified in relation
thereto.
vii.
That all the representations and warranties as have been made by the Applicant with
respect to its RFP and Engagement, are true and correct, and shall continue to remain
true and correct through the term of the Engagement.
viii.
That the execution of the Service(s) herein is and shall be in accordance and in
compliance with all applicable laws.
ix.
That there are – (a) no legal proceedings pending or threatened against Applicant or any
of its partners or its team which adversely affect/may affect performance under this
Engagement; and (b) no inquiries or investigations have been threatened, commenced or
pending against the Applicant or any of its Partners or its team members by any statutory
or regulatory or investigative agencies.
x.
That the Applicant has the corporate power to execute, deliver and perform the terms and
provisions of the Engagement and has taken all necessary corporate action to authorize
the execution, delivery and performance by it of the Engagement.
xi.
That all conditions precedent under the Engagement has been complied.
xii.
That neither the execution and delivery by the Applicant of the Engagement nor the
Applciant’s compliance with or performance of the terms and provisions of the
Engagement (i) will contravene any provision of any applicable law or any order, writ,
injunction or decree of any court or governmental authority binding on the Applicant (ii)
will conflict or be inconsistent with or result in any breach of any or the terms,
covenants, conditions or provisions of, or constitute a default under any agreement,
contract or instrument to which the Applicant is a party or by which it or any of its
property or assets is bound or to which it may be subject
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10 Confidentially
The Parties agree that they shall hold in trust any Confidential Information received by either
Party, under the Engagement, and the strictest of confidence shall be maintained in respect of
such Confidential Information. The Parties also agree:
i.
to maintain and use the Confidential Information only for the purposes of the
Engagement and only as permitted herein;
ii.
to only make copies of such documents/papers as specifically authorized by the prior
written consent of the other party and with the same confidential or proprietary notices as
may be printed or displayed on the original;
iii.
to restrict access and disclosure of Confidential Information to such of their employees,
strictly on a "need to know" basis, to maintain confidentiality of the Confidential
Information disclosed to them in accordance with this Clause and
iv.
To treat Confidential Information as confidential for a period of [two (2) ] years from the
date of receipt. In the event of earlier termination of the Engagement, the Parties hereby
agree to maintain the confidentiality of the Confidential Information for a further period
of [two (2)] years from the date of such termination.
Confidential Information in oral form must be identified as confidential at the time of disclosure
and confirmed as such in writing within 30 (thirty) days of such disclosure. Confidential
Information does not include information which:
i.
the recipient knew or had in its possession, prior to disclosure, without limitation on its
confidentiality;
ii.
is independently developed by the recipient without breach of the Contract/Agreement ;
iii.
information in the public domain as a matter of law;
iv.
is received from a third party not subject to the obligation of confidentiality with respect
to such information;
v.
is released from confidentiality with the written consent of the other Party.
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The recipient shall have the burden of proving that Clauses (i) or (ii) above are applicable to the
information in the possession of the recipient.
Notwithstanding the foregoing, the Parties acknowledge that the nature of the Service(s) to be
performed under this Engagement may require the successful Applicant's personnel to be present
on premises of IDBI AMC or may require the Successful Applicant’s personnel to have access to
computer networks and databases of IDBI AMC while on or off premises of IDBI AMC or at
only its third party locations. It is understood that it would be impractical for IDBI AMC to
monitor all information made available to the Successful Applicant under such circumstances
and to provide notice to the Successful Applicant of the confidentiality of all such information.
Therefore, the Successful Applicant agrees that any technical or business or other information of
the Successful Applicant that the Successful Applicant’s personnel, acquire while on the IDBI
AMC's premises, or through access to IDBI AMC's computer systems or databases while on or
off IDBI AMC premises, shall be deemed Confidential Information.
Confidential Information shall at all times remain the sole and exclusive property of the
disclosing Party. Upon termination of the Engagement, Confidential Information shall be
returned to the disclosing Party or destroyed, if incapable of return. The destruction shall be
witnessed and so recorded, in writing, by an authorized representative of each of the Parties.
Nothing contained herein shall in any manner impair rights of IDBI AMC in respect of the
Systems, Service(s), and Documents etc.
In the event that any of the Parties hereto becomes legally compelled to disclose any
Confidential Information, such Party shall give sufficient notice to the other Party to enable the
other Party to prevent or minimize to the extent possible, such disclosure. Neither party shall
disclose to a third party any Confidential Information or the contents of the Contract/Agreement
without the prior written consent of the other Party. The obligations of this Clause shall be
satisfied by handling Confidential Information with the same degree of care, which the receiving
Party applies to its own similar confidential information but in no event less than reasonable
care. The obligations of this Clause shall survive the expiration, cancellation or termination of
this Contract/Agreement.
The provision of this clause shall survive termination of the Contract/Agreement till such
Confidential Information enters public domain.
Governing Law
The Engagement shall be governed in accordance with the laws of Republic of India. These
provisions shall survive the Engagement.
Jurisdiction of Courts
The courts of India at Mumbai have exclusive jurisdiction to determine any proceeding in
relation to the Engagement. These provisions shall survive the Engagement.
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Time Limit for the Commencement of Work
Time limit for commencement of work shall be 2 working days from the time of award of
Engagement
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Annexure-I
FORMAT FOR APPLICATION FOR APPOINTMENT OF AUDIT FIRM
(on the letter head of the firm )
Ref. No.
Date:
To,
The Managing Director & Chief Executive Officer
IDBI Asset Management Ltd
5th Floor, Mafatlal Centre,
Nariman Point,
Mumbai-400021
Application for participating in the RFP for appointment of
Statutory Audit/ Concurrent Audit and or Internal Audit of IDBI Mutual Fund Schemes2015-16* strike of whichever is not relevant.
Dear Sir,
In respect of the appointment of Internal/Concurrent/Stautory Auditor of IDBI Mutual
Fund and/or of Internal Auditor for IDBI AMC, please find enclosed our response to your RFP
dated ……
2.
Having examined the RFP document and the Scope, Eligibility Criteria and other terms
and conditions as stipulated therein, we, the undersigned, hereby state that we are in conformity
with the specified requirements and would like to offer to provide the Services as defined and
described in the RFP Document, on the terms and conditions mentioned in the RFP Document
and for the sum / price indicated as per quotation submitted separately in a sealed envelope as
desired by you.
3.
We certify that all the information and representations furnished herewith are true, correct
, valid and subsisting in every respect as of the day and can be supported with relevant
documents of proof on demand by IDBI AMC
4.
We are submitting the application for appointment of our firm for the following audit
assignment with regards to IDBI Mutual Fund:
i)
ii)
iii)
5.
We agree and undertake that if our proposal is accepted, we shall provide the Services
comprised in the scope within the timeframe specified, starting from the date of receipt of
notification of award from IDBI AMC.
16
6.
We agree and undertake to abide by the terms and conditions, provisions, stipulations and
covenants from time to time and it shall remain binding upon us and may be accepted at any time
before the expiration of that period.
7.
We understand that you are not bound to accept our request for participation in the
process or not bound to accept our proposals that you may receive, or give any reason for
rejection of any application. We also agree and confirm that we will not claim any expenses
incurred by us in proposal and that you will not defray any expenses incurred by us in proposal.
8.
We are also aware that IDBI AMC has also right to re-issue / re-commence the bidding
process, to which we do not have right to object and have no reservation in this regard; the
decision of IDBI AMC in this regard shall be final, conclusive and binding upon us.
9.
The entire set of documents, information about our firm, and clients etc. are enclosed
hereto and shall form the part of this application.
10.
We enclose herewith our firm’s profile (as per the prescribed format attached) for your
perusal.
Thanking you,
Yours faithfully,
For Chartered Accountants
Partner
Encl: As above
NOTE:
1) No columns of application are to be kept blank.
2) Incomplete applications and / or applications not in format may be rejected without any
further reference.
3) The applications should be submitted in the prescribed format through email on
[email protected] in PDF FORMAT, to be followed by the Hard Copy, within
the time limits mentioned in the Invitation for appointment.
4) The Proprietorship Firms and Individual CA and firms not fulfilling the minimum eligibility
criteria are not eligible for the appointment.
17
FORMAT FOR QUOTE FOR AUDIT FEE
(on the letter head of the firm in a separate sealed envelope)
Ref. No.
Date:
To,
The Managing Director & Chief Executive Officer
IDBI Asset Management Ltd
5th Floor, Mafatlal Centre,
Nariman Point,
Mumbai-400021
Quote for Audit Fee for the Audit Assignment
Dear Sir,
In continuation of our application for appointment of our firm for the audit assignment
_____________________________, we quote our professional fee as under:
Audit Assignment
Concurrent Audit of IDBI
Mutual Fund Schemes (Daily
NAV calculation)
Internal Audit of IDBI
Mutual Fund Schemes (Fund
Accounting other than NAV
calculation)
Statutory Audit of IDBI
Mutual Fund schemes
Period
of
Assignment
July 01, 2015 to
March 31, 2016
Periodicity
of
Audit Report
Bi-Monthly
April 01, 2015 to
March 31, 2016
Bi-Monthly/
Quarterly
April 01, 2015 to
March 31, 2016
Semi- annually
Audit Fee (Rs.)
Thanking you,
Yours faithfully,
For Chartered Accountants
Partner
18
PROFILE OF THE FIRM FOR APPOINTMENT OF STATUTORY/ CONCURRENT/
INTERNAL AUDIT
Sr.No.
Particulars
Details
Basic Data
1.
Name of the Audit firm and constitution (Partnership/
LLP)
2.
Address of Head Office
Number of Branch Offices
(Specially mention the office address, Partner and other
details of the contact person in Mumbai office)
3.
Total No. of Partners
(Partners based at Mumbai Office)
4.
Date of Establishment
5.
Registration Number of the firm with ICAI
6.
Details of Peer Review, if any
7.
Whether any disciplinary action by ICAI including
professional misconduct instituted/ pending against the
firm or any member/ partner of the firm;
any other legal issue pending against the firm or its
member/ partner(s) or
Any action taken by bank/ credit financial institution/
Government Agency on account of default etc. against
the firm or any of its partner(s)
(if “Yes” give details);
8.
Whether the Firm or any partner has ever been debarred
by ICAI/ RBI/ SEBI, if yes, details:
Sr.
No.
Name of the partner
19
Brief reasons for debarment
9.
Manpower (Nos)
A) Name of the CA Partner(s) engaged in the Mutual
Fund Audit(s) at Mumbai
B) Other Staff deployed for Mutual Fund Audit at
Mumbai
- Qualified Professionals: CA/ CS/ ICWAI
- Others
- Articles
C) Partner/ Staff with DISA/ CISA qualification
10. Brief profile of partners in the following manner)
Name/
ICAI Membership
Qualification & Date of
Certificate
of practice
Whether
DISA /
CISA
Whether
FCA
or ACA
Mobile No.
11. Experience of Concurrent / Internal/ Statutory Audit of Mutual Fund house
Name
of Nature
the
Fund Assignment
House
(Statutory/
Concurrent/
Internal)
of Period of Year end AUM/ Staff
Assignment No. of Schemes deployed
(Latest year in
which
Audit
assignment was
handled)
12. Other Relevant Experience in Mutual Fund Industry:
Name
of Nature
the
Fund Assignment
House/
(Inspection etc)
AMC
of Period of Year end AUM Staff
Assignment (Latest year in deployed
which
Audit
assignment was
handled)
20
14.
a)
b)
c)
Certificate/s
I / we hereby declare that neither I nor any of our partners/ members of my/ their families
(family will include besides spouse, children, parents, brothers, sisters or any of them
who are wholly or mainly dependent on the Chartered Accountants) or the firm/Company
in which I am/they are partners/directors have been declared as willful defaulter by any
bank / financial institution.
I / We hereby confirm that I / We am / are not disqualified / ineligible for appointment as
Internal/ Concurrent Auditor /statutory auditor of the IDBI MF under the Companies Act
2013.
I / We confirm that the information furnished here are true to the best of my knowledge.
SIGNATURE
DATE:
21
Appendix-I
IDBI Mutual Fund
The scope of work for concurrent audit of IDBI MF- Fund Accounting for FY 2015-16,
includes but not limited to:
Type of Audit
the Scope of the Work
Concurrent Audit
of IDBI MF NAV
calculation
Daily verification of NAV of all the schemes on T+0 basis which
includes the following but not limited to:
Valuation of securities held by the schemes;
Accrual of Income on the securities held by all the schemes;
Reporting shall be
Accruals of all expense in all the schemes and ensure the same are
on bi-monthly
in compliance with statutory as well as internal limits;
basis
All Deals/transactions are authorized in back office before EOD;
Regarding deals ensure all counter party confirmations are received
and adequately reported to the custodian and records are kept
internally.
Ensure all posting control for all schemes are accounted for;
All Corporate Actions have been accounted for;
Profit & loss on sale of securities have been accounted for;
Ensure all inter scheme transfers have been adequately accounted
for in the books of accounts.
Valuation of securities are in compliance with the valuation policy
of IDBI MF;
Review of compliance with Indian GAAP/SEBI requirements for
valuation of investments
Verification of various elements which form part of the NAV and
NAV calculation;
Review of Creation of Security Master based on security
documents; Monitoring of regulatory changes impacting NAV
calculation and checking the implementation etc.;
Such other areas identical/related to the NAV Verification as per
discussion with management as per mutual terms;
Review of distributable surplus as per agreed procedure.
Dividend has been declared in the schemes as per the SID of the
schemes or as per the approval obtained from the Board.
Review of SEBI
1. Verification of compliance with investment restrictions under seventh
compliance limit
schedule to SEBI (Mutual Fund) Regulation 1996 on T+1 basis;
2. Verification of investments whether fully are made in compliance with
Reporting on biinternal limits, if any set by the management for the scheme specific and
monthly basis
are in compliance with the investment policy of the IDBI MF.
3. Verification of Inter scheme transactions.
22
Appendix-II
IDBI Mutual Fund
The scope of work for internal audit of IDBI MF for FY 2015-16 includes but not
limited to:
Type of Audit
the Scope of the Work
Internal Audit of
IDBI MF
(Review of all the
functions of IDBI
MF including
Fund Accounting
excluding
concurrent audit
of NAV
calculation and
declaration)
a) Review and report whether IDBI MF has maintained proper Books of
Accounts, records and documents required as per the internal
guidelines and or as per the statutory requirements.
b) Review of the accounting policies to confirm that the same are in line
with the best market practices and in compliance with the statutory
requirements.
c) Analysis of instances of delay in Generation and or declaration of
NAV uploading and report the justification thereof;
d) Analysis of all the Switch Transactions with respect to the necessary
documents and its funding based on matrix;
e) Review of the procedure followed to empanel the Brokers and report
whether the master list of empanelled Equity and Debt brokers are
updated in line with the approvals given by the appropriate authority.
All relevant documents have been submitted by the brokers for annual
review and empanelment as per the internal policy.
f) Review of various payments such as payment to RTA, Custodian,
third party responsible for settlement etc. are in line with the
agreements/ contracts entered into.
g) Review of the Three way
reconciliations and report the
discrepancies, if any with respect to the:
• All schemes and Collection bank account reconciliations.
• Investment/operative scheme bank account reconciliations.
• All redemption/ Dividend and Brokerage bank account
reconciliations.
• All scheme expenses bank account reconciliations.
h) Verify that all statutory including the following dues are calculated
correctly and paid within the time line/ due dates as per the respective
statutory provisions:
• TDS payment on all fees.
• NRI TDS payment
• Service tax payment all applicable fee etc.
• DDT payment.
• STT payment.
• VAT payment.
a) Review of the process of receiving and keeping record of the security
and other relevant documents. Verify the securities already in their
custody and report that all procedures have been complied with and
Reporting shall be
on bi-monthly
basis
Review of
Custodian
operation
23
Reporting shall be
on Quarterly
basis
Review of
Compliance
Reporting shall be
on bi-monthly
basis
Review of RTA
operations
Reporting shall be
on Quarterly basis
relevant documents such as security, terms and conditions, security/
guarantee etc. are received and kept in the safe custody;
b) Verify all securities where LOA was issued and report the action
being taken by custodian to complete the documentations;
c) Analysis of the procedure for delivery of instruction for sale and
purchase of securities;
d) Review of securities holding reconciliations (including Gsec)
prepared by the Fund Accounting team and verify with third party
confirmations/ statements received;
e) Analysis of practices of updating the records with regards to
corporate action in the Fund Accounting software and
communication of the same to the relevant departments such as
Fund Management team and compliance etc.
ii) Review of Net worth at the end of quarter;
iii) Review of Assets Allocation pattern of each scheme in line with
the same specified in SID;
iv) Review of the brokers’ business vis-à-vis statutory limits, if any.
v) Review of Borrowings of the schemes and reporting of the same if
not in line with statutory provisions or internal limits as per the
investment policy;
vi) Review of Timely submission of New Scheme Report (NSR) as and
when required by regulator;
vii) Review of Timely submission of following reports:
Monthly Cumulative Report(MCR);
Bi-monthly Compliance Test Report (CTR);
Quarterly Activity Report to Trustee board;
viii)
Review of circulars both internal as well as issued by the
regulators and their compliance by the relevant department.
1. Review of following transactions on test check basis:
i. Review of all SEBI regulation compliance;
ii. Review of AMFI best practice recommendations as adopted by
IDBI AMC
iii. Review of Purchase transactions
iv. Review of Redemption Transactions;
v. Review of NRI Purchase Transactions;
vi. Review of Missed, Revertal and Exception Transactions;
vii. Review of Switch Transactions;
viii. Review of Broker empanelment process
ix. Review of Brokerage computation and payments;
x. Review of TDS on NRI transactions;
xi. Review of Lien / Pledge Cases
xii. Review of Security Transaction Tax;
xiii. Review of Investor Complaints and Servicing;
24
Review of RMS
activity
xiv. Review of Delay in Dispatch of redemption and Dividend proceeds;
xv. Review of Non Commercial Transactions;
xvi. Review of KYC documentation and report, if any Pending
Corporate / KYC Documents and status thereof;
xvii. Review of Circulars.
xviii. Data Quality checks
2. Review the internal audit/ any other quality check audit done by the
independent or in-house team of RTA and report the discrepancies
therein and action taken by RTA to resolve the issues.
3. Review and comment on the procedure regarding house keeping of
RTA, which may include:
Maintenance of records
Storage of data and any backup maintained
Storage of all forms received from ISCs
Review of Risk Management Activity as per SEBI circular.
Reporting shall be
on Quarterly basis
Review of
Investor Service
Centres (ISCs)
On Quarterly
basis
a) Receipt of application forms, time stamping, signature verification
stamp in case of redemption applications.
b) Forwarding of application forms to registrar
c) Receiving accounts statements from R&T and their dispatch to
investors
d) Dispatch of redemption and dividend warrants and hand delivery of
redemption cheque at branches.
e) Banking of cheques in case of high values and other cheques
f) Cheque dishonour handling at ISCs
g) Handing unclaimed dividend / redemption warrants / cheques /DDs
h) Redressal of investor complaints
i) Adherence to SLA and policy memos
25
Appendix-III
IDBI Mutual Fund
Statutory Audit of all the schemes of IDBI Mutual Fund which includes, but not
limited to the following:
a)
Audit and certification of Balance Sheets and Income and Expenditure
statements with all required schedules
b)
Annual Review of Valuation Policy.
c)
Physical verification of Gold held by IDBI Gold ETF with its Custodian and to
be reported on half yearly basis to IDBI MF Trustees including certificate.
d)
Consolidated Scheme accounts and certification.
e)
Audit reporting on semi-annual basis.
f)
Certification of voting decisions participated by IDBI AMC in companies in
which IDBI MF has investment
g)
All other certifications/ review of policies etc. in compliance with SEBI
requirements
26
Annexure-II
(Proforma Letter of acceptance to be obtained on firm’s Letter head)
Ref. No.
Date:
To,
The Managing Director & Chief Executive Officer
IDBI Asset Management Ltd
5th Floor, Mafatlal Centre,
Nariman Point,
Mumbai-400021
Dear Sir,
Sub : Internal / Concurrent Audit / Statutory Audit of your company
With reference to your letter No.________________ dated____________ on the subject
matter, we do hereby convey our acceptance to undertake the above mentioned audit assignment
of your company on the terms and conditions mentioned therein.
As desired by you, we send herewith the Declaration of Fidelity and Secrecy and
Declaration regarding non-disqualification etc., in the enclosed proforma.
Yours faithfully,
(Chartered Accountants)
Name of Signatory &
Rubber Stamp.
Encl : as above.
27
Annexure-III
Letter of confirmation regarding Non-disqualification of Audit Firm/ Consultant
( to be submitted on letter head )
Ref. No.
Date:
To,
The Managing Director & Chief Executive Officer
IDBI Asset Management Ltd
5th Floor, Mafatlal Centre,
Nariman Point,
Mumbai-400021
Dear Sir,
With reference to your letter No.____________dated___________, I/we confirm as follows:i)
ii)
iii)
iv)
v)
vi)
vii)
I am/ Any of our partners is not an officer/employee of your company.
I am/ Any of our partners is not a partner or in employment of any office or employee of
your company.
I am/ Any of our partners or Associates firms or sister concern or Branch office, is not
assigned with Statutory Audit of your company.
I am/ We are not otherwise disqualified to accept the audit in terms of Sections 141 and
145 of the Companies Act 2013 read with rule 10 of the Companies (audit & auditors
Rules) 2014.
I/ We also confirm that I am/we are full time practising chartered accountants and
am/are not employed elsewhere and do not have any other business interest.
I/ We also confirm that I/ we will not be disqualified during the course of audit for any
of the reasons mentioned above.
I/ We undertake not to subcontract the audit work assigned to me/us to any outsider.
Yours faithfully,
(Chartered Accountants)
Name of Signatory &
Rubber Stamp.
28
Annexure-IV
DO’S AND DON’TS FOR INTERNAL / CONCURRENT AUDITORS
Do’s
The Concurrent/ Internal Auditors should:
1.
Going through the relevant SEBI Circulars/ guidelines/ MF regulations and internal
policies / guidelines relevant to the audit assignment.
2.
Pre-audit study of the relevant department by going through the previous reports and pre
requisites documents.
3.
To act in a normal friendly/ professional fashion and help to improve normal working of
the staff/ department.
4.
Discuss his findings with the concerned department/ head of the Audit team on daily basis
and try to rectify the defects then and there itself.
5.
Give the concerned staff/ department a chance to express their opinion while discussing the
issues.
6.
Getting proper explanation in a co-operative atmosphere will save precious time.
7.
In case of difference of opinion with the staff/ department, the auditor should first discuss
with the leader of his team. Further discussion with head of the Department/ Audit Coordinator, if required, may be made. Besides, discussion if required with Senior
Management (Executive Director/ MD) can also be made for guidance / instruction.
8.
If the Audit Staff comes across any information which causes him to suspect any element
of fraud, gross negligence, gross incompetence or similar unfavorable actions or
tendencies, he should report the matter to the leader of the team / head of the Department
immediately.
9.
The audit staff should keep continuous dialogue with the leader / Audit Firm partner/
Senior Qualified Audit team Member on important findings and be guided by his advice.
10. Auditor should maintain a neat appearance and a courteous manner.
Don’ts:
1.
Auditor need not act overly reserved or unfriendly in order to maintain his independence as
an inspecting officer. A forbidding attitude on his part may well cause others to adopt the
same attitude towards him. This can adversely affect the work entrusted to the audit team.
2.
Auditor should not get involved in heated argument with auditee.
3.
Auditor should not delay the submission of audit report.
4.
Auditor should not discuss sensitive matters of the company with any person outside the
company or their audit firm.
29
ANNEXURE V
Declaration of Fidelity And Secrecy
( to be submitted on letter head )
I/We,____________________ in the capacity of ___________________do hereby
declare that I/ we will faithfully, truly and to the best of my/ our skill and ability execute and
perform the duties required of me/us as Auditor of IDBI Asset Management Ltd/ IDBI Mutual
Fund and which properly relate to the office of position in the said IDBI Asset Management Ltd/
IDBI Mutual Fund held by me/ us.
I/ We further declare that I/ we will not communicate or allow to be communicated to any person
not legally entitled thereto any information relating to the affairs of IDBI Asset Management
Ltd/ IDBI Mutual Fund or the affairs of any person having any dealing with IDBI Asset
Management Ltd/ IDBI Mutual Fund, nor will I/ we allow any such person to inspect or have
access to any books or documents belonging to or in the possession of IDBI Asset Management
Ltd/ IDBI Mutual Fund and relating to the business of IDBI Asset Management Ltd/ IDBI
Mutual Fund or to the business of any person having any dealing with IDBI Asset Management
Ltd/ IDBI Mutual Fund.
Yours faithfully,
(Chartered Accountants)
Name of Signatory &
Rubber Stamp.
30