Appointment of Audit firms for various audit assignments

Transcription

1 Request for Proposal For Appointment of Audit firms for various audit assignments IDBI Asset Management Ltd. February 26, 2015

2 Disclaimer The information contained in this 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 Any information contained in this RFP document will be superseded by any later written information on the same subject made available to all recipients by IDBI AMC.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.

3 IDBI Asset Management Ltd Engagement of Audit firms for various audit assignments 1. Invitation for empanelment 1.1. IDBI ASSET MA AGEME T LTD(CI U65100MH2010PLC199319) a company incorporated under the Companies Act 1956 having its Registered Office at IDBI Tower, WTC Complex, Cuffe Parade Mumbai and having its Corporate Office at 5th Floor, Mafatlal Centre, ariman Point, Mumbai , hereinafter referred to as The Company invites applications in the prescribed format (Attached as per Annexure- I) from the practicing Chartered Accountants Firms in India who are willing to take up following assignments: Company / Assignment Period of Assignment Mutual Fund IDBI Asset Management Ltd. IDBI Mutual Fund Schemes 1.2 Due Diligence Internal Audit (Details scope of audit is attached as per Appendix-I) Concurrent Audit (Details scope of audit is attached as per Appendix-II) Internal Audit (Details scope of audit is attached as per Appendix-III) Statutory Audit of Mutual Fund schemes (Details scope of audit is attached as per Appendix-IV) April 01, 2015 to March 31, 2016 April 01, 2015 to March 31, 2016 April 01, 2015 to March 31, 2016 April 01, 2015 to March 31, 2016 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 at auditfy2016@idbimutual.co.in. IDBI AMC shall respond in writing by to any request for clarification of the Application documents, from the prospective Applicants, which it

4 receives not later than 8th March, Hours. Further IDBI AMC will respond by , to all clarifications, without identifying the source of the inquiry. IDBI AMC shall not be responsible for any external agency delays. 1.5 Amendment of RFP Document a) 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. b) 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. c) All prospective Applicants who have received this RFP shall be notified of the amendment in writing by or fax or post, and all such amendments shall be binding on them. d) 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 1.6 The applications should be submitted through on auditfy2016@idbimutual.co.in in PDF FORMAT, to be followed by the Hard Copy. 1.7 The proposed appointment would be for one financial year (i.e. from April 01, 2015 to March 31, 2016) and shall be renewed for a further period subject to review by IDBI AMC. 1.8 The application through shall followed by Hard Copy of the Application form duly signed and stamped, to be submitted to: The Managing Director & Chief Executive Officer IDBI Asset Management Ltd 5 th Floor, Mafatlal Centre, ariman Point, Mumbai by postal service / courier. Application for appointment for (Audit Assignment) should be super-scribed on the envelope carrying the application. 1.9 The quotes for audit fee shall be not be sent through s, as these are required to be submitted in a separate sealed envelope. Quote for the fee for audit assignment for FY should be super-scribed 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 is on or before March 10, 2015 by 5.00 PM, and signed application form alongwith annexure should reach our office latest before March 12, 2015 by 5.00 p.m. applications received thereafter shall not be considered.

5 1.12 Mere submission of application does not, in any way, constitute guarantee for allotment of any audit assignment from the Company 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 2 Eligibility Criteria Eligibility Criteria for Audit Firm to be eligible for conducting Internal/ Concurrent/ Statutory Audit of IDBI Mutual Fund and Internal Audit of IDBI Asset Management Limited for FY , is as under: Criteria a) Auditing Firm Description Constitution of Firm Years of Existence of the Audit Firm Registration of Audit firm Any case or legal action pending against the Firm, if any / Peer Review Compliance with other statutory provisions b) Staff and experience Minimum number of partners in Audit Firm Minimum Partners deployed in the Mumbai Minimum Partner fully involved in doing various Audits/ Inspection of Mutual Fund Houses Partnership Firm or Limited Liability Partnership (LLP) Registered with ICAI Minimum 10 years and having a Office in Mumbai RBI CAG No 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. Latest Peer Review report may be attached, if available. The Firm/ all partners are in compliance with the relevant provisions of the Companies Act A certificate in this regard be submitted along with the application. At least 10 (Ten) At least 5 (Five) At least 1 (One) in Mumbai Minimum Qualified Staff At least 2 (two) in Mumbai

6 deployed in Mutual Fund Industry Minimum Articles/ other audit staff engaged in Mutual Fund DISA/ CISA qualified staff At least 5 (five) in Mumbai Minimum one partner with adequate number of qualified staff having this qualification c) Experience in Mutual Fund Industry Total Asset Under Management (AUM) of the fund House(s) and kind of assignment handled Minimum aggregating AUM of Rs crore for all AMCs handled, AUM figure will be taken as of year end of latest year of assignment handled in the last five years for the respective AMC/ Mutual fund as under: Name of the Fund House/ AMC Nature of Assignment (Statutory/ Concurrent/ Internal/ SEBI Inspection) Year of Assignment Year end AUM (Latest year in which Audit assignment was handled) Staff deployed 3 Evaluation of CA Firm for appointment of audit assignments: 3.01 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 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. o quotation (Draft or otherwise) will be entertained through The Audit/ CA firm will be evaluated based on the following parameters: i) Eligibility criteria as mentioned above. ii) Preference will be given to Audit firm having office in Mumbai. iii) Experience of Mutual Fund house having adequate asset under management. iv) Weightage will be given to firms where the partners themselves having relevant audit experience with adequate experienced / qualified staff in the relevant field. v) Amount of the fee quoted by the Audit Firm for the respective Audit Assignment, as part of their application 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.

7 3.05 The same firm shall not be shortlisted for Statutory Audit as well as for concurrent/ Internal Audit of IDBI Mutual Fund schemes/ IDBI AMC A detailed evaluation matrix shall be compiled by evaluation committee allotting marks for parameters which shall form the basis for appointment of Audit Firm for the respective assignment 4 Documents to be submitted with the application CA 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, if any. iii) Copies of Registration Certificate issued to the firm by ICAI. iv) Copy of constitution Certificate issued by ICAI. v) Registration/empanelment certificate/letter issued by RBI/CAG. 5 Terms and conditions i. No communication will be sent by the IDBI AMC and no correspondence will be entertained in respect of firms, which are not being selected. ii. The Firm, on receiving the offer letter by way of from IDBI AMC, should 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. iii. The assignment should be carried out in a professional manner and in case of any 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. iv. All the necessary certificates including quarterly, half-yearly, annual closing of 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. v. By virtue of the engagement, the successful applicant s team may have access to 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. vi. vii. viii. Appointment of Audit Firms shall be purely at discretion of IDBI AMC and no rights whatsoever accrue to the firm for such appointment. 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. Any persistent delay shall be viewed negatively at the time of review of the CA 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

8 reporting. In case, CA 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. ix. 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. x. 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. xi. IDBI AMC reserves the right to seek views from the corporate houses with whom the firm is/has been/was associated as Auditors. xii. 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. 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. 7 Payment of fee 7.01 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 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.

9 8 Conduct and Performance Monitoring 8.01 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 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 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.

10 8.13 The Board may also like to separately interact with the Auditors at their discretion without the presence of AMC management 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 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 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 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.

11 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 Applicant 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 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:

12 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. 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

13 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. 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

14 Annexure-I FORMAT FOR APPLICATIO FOR APPOI TME T OF AUDIT FIRM (on the letter head of the firm ) Ref. o. Date: To, The Managing Director & Chief Executive Officer IDBI Asset Management Ltd 5 th Floor, Mafatlal Centre, ariman Point, Mumbai Application for participating in the RFP for appointment of Internal Audit of IDBI Asset Management Ltd or Statutory Audit/ Concurrent Audit and or Internal Audit of IDBI Mutual Fund Schemes * strike of whichever is not relevant. Dear Sir, In respect of the appointment of Internal/Concurrent/Statutory 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 Asset Management Ltd/ 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.

15 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 on auditfy2016@idbimutual.co.in 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.

16 FORMAT FOR QUOTE FOR AUDIT FEE (on the letter head of the firm in a separate sealed envelope) Ref. o. Date: To, The Managing Director & Chief Executive Officer IDBI Asset Management Ltd 5 th Floor, Mafatlal Centre, ariman Point, Mumbai Dear Sir, Quote for Audit Fee for the Audit Assignment In continuation of our application for appointment of our firm for the audit assignment, we quote our professional fee as under: Audit Assignment Period of Assignment Internal Audit of IDBI Asset April 01, 2015 to Management Ltd March 31, 2016 Concurrent Audit of IDBI April 01, 2015 to Mutual Fund Schemes (Daily March 31, 2016 NAV calculation) Internal Audit of IDBI Mutual Fund Schemes (Fund Accounting other than NAV calculation) Statutory Audit of IDBI Mutual Fund schemes April 01, 2015 to March 31, 2016 April 01, 2015 to March 31, 2016 Periodicity Audit Report Monthly Bi-Monthly Bi-Monthly/ Quarterly Semi- annually of Audit Fee (Rs.) Thanking you, Yours faithfully, For Chartered Accountants Partner

17 PROFILE OF THE FIRM FOR APPOI TME T OF STATUTORY/ CO CURRE T/ I TER AL AUDIT Sr.No. Particulars Details Basic Data 1. Name of the CA Firm 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. Constitution 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 any member of the firm or any other legal issue pending against the firm (if Yes give details); or Any action taken by bank/ credit financial institution on account of default etc. 8. Whether the Firm or any partner has ever been debarred by ICAI/RBI, if yes, details: Sr. No. Name of the partner Brief reasons for debarment 9. Whether Registered with RBI/ CAG, if yes give the details

18 10. Manpower (Nos) A) Qualified Professionals: (i) Partners (Partners deployed for Mutual Fund in Mumbai) (ii) Others (Deployed for Mutual Fund in Mumbai) B) Articles: (Deployed for Mutual Fund in Mumbai) C) Partner/ Staff with DISA/ CISA qualification 11. Brief profile of partners in the following manner) ame/ Qualification ICAI Membership & Date of Certificate of practice Whether DISA / CISA Whether FCA or ACA Mobile o. 12. Experience of Concurrent / Internal/ Statutory Audit of Mutual Fund house ame of the Fund House/ AMC ature Assignment (Statutory/ Concurrent/ Internal/ Inspection) of SEBI Year of Assignment Year end AUM (Latest year in which Audit assignment was handled) Staff deployed 13. Other Experience in brief

19 14. Certificate/s a) 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. b) I / We hereby confirm that I / We am / are not disqualified / ineligible for appointment as Internal/ Concurrent Auditor /statutory auditor of the IDBI MF/ Internal Auditor of IDBI AMC under the Companies Act c) I / We confirm that the information furnished here are true to the best of my knowledge. SIG ATURE DATE:

20 Appendix-I IDBI Asset Management Ltd The scope of work for internal audit of IDBI AMC for FY includes but not limited to: Type of Audit Internal Audit of AMC accounts (Review of all the financials and other matters of IDBI AMC) Reporting shall be on monthly basis the Scope of the Work a) Scrutiny of all vouchers to ensure that they are having adequate supporting documents such as required approvals as per Delegation of Power (DOP), vendors invoice/ bills, delivery challan/ reports, b) Detailed and thoroughly checking of brokerage payments to the Distributors/ IFAs with respect to DOP Matrix and the approved brokerage structures, checking of claw-back due. Checking of incentives and promotional scheme points earned by the Distributors/ IFAs under the various promotional schemes approved by the delegated authority. c) Scrutiny of all investments made by AMC and redeemed with respect to the approvals received from the authority as per the Delegation of Power matrix approved by the Board of AMC. Review the accounting of the profit or loss on redemption as well as accounting for the interest/ dividend or other income from the investments/ deposits. d) Scrutiny of Ledger and review all the assets, liabilities, advances, loans, statutory payables, vendors accounts etc to ensure no unwanted balances are outstanding and all dues are paid in time. e) Review the month end expenditure provisioning and its adequacy including expense accrual, accounting and documentation including deferred revenue expenses/ amortizations; f) Review of income accrual and receipt thereof, accounting and documentations; g) Review of all the supporting documents for the capital expenditure/ fixed assets purchased including their authorization/ approvals and their accounting and amortization as per provisions of companies act and maintenance of fixed assets register; h) Review of the bank reconciliation and report whether funds are ideally deployed. Analysis of cash flow prepared by AMC and the balance in the bank account. i) Review of HR related activities such as Attendance, Leave management, NISM certification as per statutory / internal requirements, securities transactions reporting by the employees as per statutory/ internal requirements and payroll process and detail checking of the Payroll payments. j) Review of all statutory payments such as TDS deducted and deposited, Service Tax, as well as payment of fee to SEBI, AMFI and other agencies are paid as per the regulations or as per the terms of contract/ agreement; k) Analysis of the net-worth statement of the IDBI AMC and verify the

21 components thereof. l) review of compliance by AMC of applicable provisions of: a. Companies Act, 2013 b. Corporate Governance c. Income Tax Act, 1961 d. Statutory obligations w.r.t. PF, PT, Service Tax etc. m) Review of internal controls and procedures, Delegation of powers and policies lay down and comment on the effectiveness of the same. n) Review and report whether AMC has maintained proper Books of Accounts, records and documents required as per the internal guidelines and or as per the statutory requirements.

22 Appendix-II IDBI Mutual Fund The scope of work for concurrent audit of IDBI MF- Fund Accounting for FY , includes but not limited to: Type of Audit the Scope of the Work Concurrent Audit of IDBI MF NAV calculation Reporting shall be on bi-monthly basis Review of SEBI compliance limit Reporting on bimonthly basis Daily verification of AV 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; Accruals of all expense in all the schemes and ensure the same are in compliance with statutory as well as internal limits; 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. 1. Verification of compliance with investment restrictions under seventh schedule to SEBI (Mutual Fund) Regulation 1996 on T+1 basis; 2. Verification of investments whether fully are made in compliance with internal limits, if any set by the management for the scheme specific and are in compliance with the investment policy of the IDBI MF. 3. Verification of Inter scheme transactions.

23 Appendix-III IDBI Mutual Fund The scope of work for internal audit of IDBI MF for FY includes but not limited to: Type of Audit Internal Audit of IDBI MF (Review of all the functions of IDBI MF including Fund Accounting excluding concurrent audit of NAV calculation and declaration) Reporting shall be on bi-monthly basis Review of Custodian operation the Scope of the Work 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 AV 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

24 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 et 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;

25 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

26 Appendix-IV 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

27 Annexure-II (Proforma Letter of acceptance to be obtained on firm s Letter head) Ref. o. Date: To, The Managing Director & Chief Executive Officer IDBI Asset Management Ltd 5 th Floor, Mafatlal Centre, ariman Point, Mumbai 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. Encl : as above. Yours faithfully, (Chartered Accountants) Name of Signatory & Rubber Stamp.

28 Annexure-III Letter of confirmation regarding on-disqualification of Audit Firm/ Consultant ( to be submitted on letter head ) Ref. o. Date: To, The Managing Director & Chief Executive Officer IDBI Asset Management Ltd 5 th Floor, Mafatlal Centre, ariman Point, Mumbai Dear Sir, With reference to your letter No. dated, I/we confirm as follows:- i) I am/ Any of our partners is not an officer/employee of your company. ii) I am/ Any of our partners is not a partner or in employment of any office or employee of your company. iii) I am/ Any of our partners or Associates firms or sister concern or Branch office, is not assigned with Statutory Audit of your company. iv) 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) v) 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. vi) I/ We also confirm that I/ we will not be disqualified during the course of audit for any of the reasons mentioned above. vii) 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.

29 Annexure-IV DO S A D DO TS FOR I TER AL / CO CURRE T 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 unfavourable 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.