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Small Industries Development Bank Of India, Mumbai, Maharashtra
December, 06th 2018
Small Industries Development
                          Bank of India

                     Request for Proposal (RfP)


                          For
          Concurrent Audit of Operations of
       Institutional Finance Vertical (IFV), SIDBI

                     Small Industries Development Bank of India
                                         Audit Vertical
                                  4thFlOOR, SIDBITOWER,
                                      15, ASHOK MARG,
                                     LUCKNOW - 226001
                                    Website : www.sidbi.in
                            Tender No. 314/2019/1413/HO1/IAD

THE   INFORMATION PROVIDED BY THE BIDDERS IN RESPONSE TO THIS  TENDER DOCUMENT
WILL BECOME THE PROPERTY OF SIDBI AND WILL NOT BE RETURNED. SIDBI RESERVES THE
RIGHT TO AMEND, RESCIND OR REISSUE THIS TENDER DOCUMENT AND ALL AMENDMENTS WILL
BE ADVISED TO THE BIDDERS AND SUCH AMENDMENTS WILL BE BINDING ON THEM.



 (THIS DOCUMENT   SHOULD NOT BE REUSED OR COPIED OR USED EITHER PARTIALLY OR FULLY IN ANY FORM)



                                                         3|Page
                                        RfP ­ CA for Operations at IFV, SIDBI, Mumbai

                     Critical Information Summary

1) The RfP is posted on the SIDBI website www.sidbi.in. SIDBI reserves the sole
   right for carrying out any amendments/ modifications / changes including any
   addendum to this RfP. Such amendments / modifications / changes including any
   addendum to this RfP shall be notified on SIDBI's website www.sidbi.in and these
   will be binding on the bidders.

2) Bidders are advised to study the tender document carefully. Submission of bids
   shall be deemed to have been done after careful study and examination of the
   tender document with full understanding of its implications.

3) Any clarifications from bidder or any change in requirement will be posted on
   SIDBI website. Hence, before submitting bids, bidder must ensure that such
   clarifications / changes have been considered by them. SIDBI will not have
   any responsibility in case some omission is done by any bidder.

4) In case of any clarification required by SIDBI to assist in the examination,
   evaluation and comparison of bids, SIDBI may, at its discretion, ask the bidder
   for clarification. The response / Clarification shall be in writing and no change
   in the price of substance of the bid shall be sought, offered or permitted.

5) Please note that all the information required as per the bidding document needs to
   be provided. Incomplete information in these areas may lead to non-selection.

6) Modification And/ Or Withdrawal of Bids:

   Bids once submitted will be treated as final and no further correspondence will be
   entertained. No bid shall be modified after the deadline for submission of bids. No
   bidder shall be allowed to withdraw the bid, if bidder happens to be the successful
   bidder.

7) SIDBI has the right to reject any or all bids received without assigning any reason
   whatsoever.

NOTE:

   SIDBI SHALL NOT BE RESPONSIBLE FOR NON-RECEIPT / NON-
   DELIVERY OF THE BID DOCUMENTS DUE TO ANY REASON,
   WHATSOEVER.




                                                                             4|Page
                                            RfP ­ CA for Operations at IFV, SIDBI, Mumbai

    Schedule of events:

Sr.
    Bid Reference      -   314/2019/1413/HO1/IAD
No.
                                    Concurrent Audit of Operations of
1     Purpose                       Institutional  Finance   Vertical   (IFV),
                                    Mumbai.
                                    One (1) Envelope.
      No. of Envelopes (Non window,
2                                   1 set of Hard copy should be submitted in
      sealed) to be submitted
                                    sealed single.

3     Last date of submission of Bids      December 24, 2018 at 2:00 p.m (Monday)

      Venue, Date and Time of opening December 24, 2018 by 3:00 p.m at the
4
      of Bids.                        address given at Sr. No. 8.

5     Date of Pre-bid meeting              December 10, 2018 by 4:00 p.m

      Response to clarification/pre-bid
6                                       December 17, 2018 by 4:00 p.m
      meeting
                                        6 months from the last date of submission of
7     Bid Validity
                                        Bids.
                                           The General Manager
                                           Audit & Fraud Management Vertical
                                           SIDBI, 4th Floor
                                           SIDBI TOWER,
8     Address for submission of Bids
                                           15, ASHOK MARG,
                                           LUCKNOW - 226001
                                           Ph : 0522-2288546-50
                                           E-mail: auditvertical_ho@sidbi.in

      Contact Persons:

          Name & Designation               Phone                        e-mail
9
      Susheel Kumar Agrawal [M]         0522-4259821      auditvertical_ho@sidbi.in

      Arup Kumar Vishwakarma [M]        0522-4259788      auditvertical_ho@sidbi.in


    If a holiday is declared on the dates mentioned above, the proposals shall be
    received / opened on the next working day at the same time specified above and at
    the same venue unless communicated otherwise.




                                                                                 5|Page
                                           RfP ­ CA for Operations at IFV, SIDBI, Mumbai

Introduction and Disclaimers
1.1    Purpose of RfP

The purpose of RfP is to shortlist experienced professional firm/ Limited Liability
Partnership (LLP) of Chartered Accountants, for undertaking Concurrent Audit of
Operations of Institutional Finance Vertical (IFV) of SIDBI at Mumbai.

                                       Table ­ I

                                                      O/S as on
 Sl.
        Name of the HO Vertical         Head Office March 31, 2018 Appendix on
 No.                                                               Scope of work
                                                     (` in Crore)

       Institutional Finance
  1    Vertical (IFV) (NBFC & SFB)        Mumbai          15, 246         Appendix-I



1.2    Purpose of RfP
The Request for Proposal document contains statement derived from information that
is believed to be relevant at the date but does not purport to provide all the
information that may be necessary or desirable to enable an intending contracting
party to determine whether or not to enter into a contract or arrangement with SIDBI.
Neither SIDBI nor any of its employees, agents, contractors or advisors gives any
representation or warranty, express or implied, as to the accuracy or completeness of
any information or statement given or made in this document. Neither SIDBI nor any
of its employees, agents, contractors, or advisors has carried out or will carry out an
independent audit or verification exercise in relation to the contents of any part of the
document.
1.3    Disclaimer
Subject to any law to the contrary, and to the maximum extent permitted by law,
SIDBI and its officers, employees, contractors, agents and advisors disclaim all
liability from any loss or damage (whether foreseeable or not) suffered by any person
acting on or refraining from acting because of any information including forecasts,
statements, estimates or projections contained in this RfP document or conduct
ancillary to it whether or not the loss or damage arises in connection with any
negligence, omission, default, lack of care or misrepresentation on the part of SIDBI
or any of its officers, employees, contractors, agents, or advisers.
1.4    Costs to be borne by Applicants
All costs and expenses incurred by Applicants in any way associated with the
development, preparation, and submission of responses, including but not limited to
the attendance at meetings, discussions, demonstrations, etc. and providing any
additional information required by SIDBI, will be borne entirely and exclusively by the
Applicant.

                                                                                6|Page
                                             RfP ­ CA for Operations at IFV, SIDBI, Mumbai
1.5         No Legal Relationship
No binding legal relationship will exist between any of the Applicants and SIDBI until
execution of a contractual agreement.

1.6         Applicant Obligation to Inform Itself
The Applicant must conduct its own investigation and analysis regarding any
information contained in the RfP document and the meaning and impact of that
information.

1.7         Evaluation of Offers
Each applicant acknowledges and accepts that SIDBI may in its absolute discretion
apply selection criteria specified in the document for evaluation of proposals for
shortlisting/ selecting the eligible Concurrent Auditor(s). The RfP document will not
form part of any contract or arrangement, which may result from the issue of this
document or any investigation or review carried out by a Recipient.

1.8         Maintaining Secrecy and Confidentiality
The applicant shall be liable to maintain secrecy and confidentiality of all the
information/ data / operations, etc. of SIDBI.

1.9         Errors and Omissions
Each applicant should notify SIDBI of any error, omission, or discrepancy found in
this RfP document.

1.10        Acceptance of Terms
An applicant will, by responding to SIDBI for RfP, be deemed to have accepted the
terms of this Introduction and Disclaimer.

2. Lodgment of RfP

      2.1         RfP submission:
 RfP document submission is required to be done by December 24, 2018
 (Monday) (2.00 PM) as under :-

      Hard copy should be submitted at the following address in sealed single
      envelope superscribed at the top of the envelope ­ "Request for Proposal
      (RfP) for Concurrent Audit of Operations of Institutional Finance Vertical
      (IFV), Mumbai, SIDBI".
      The General Manager
      Audit & Fraud Management Vertical
      Small Industries Development Bank of India (SIDBI)
      SIDBI Tower, 15, Ashok Marg,
      Lucknow ­ 226001 (U. P.)
      Telephones: (0522) 2288546-50
      Email: auditvertical_ho@sidbi.in


                                                                                  7|Page
                                          RfP ­ CA for Operations at IFV, SIDBI, Mumbai
RfP must be submitted on or before the aforementioned closing date and time.

            Fax / e-mail copies of any submission are not acceptable and will be
            rejected by the Bank.

            Copy of bids and attachments must be provided in a sealed envelope.

  The person(s) signing the bids shall initial all pages of the bid. The bid shall
  contain no erasures or overwriting except as necessary to correct errors made by
  the applicant, in which case corrections shall be initialed by the person(s) signing
  the bid.

  If the submission does not include all the information required or is incomplete, the
  proposal is liable to be rejected.

  All submissions, including any accompanying documents, will become the property
  of SIDBI. Applicants shall be deemed to license, and grant all rights to SIDBI to
  reproduce the whole or any portion of their submission for the purpose of
  evaluation, to disclose the contents of the submission to other Respondents and to
  disclose and / or use the contents of the submission as the basis for any resulting
  RfP process, notwithstanding any copyright or other intellectual property right that
  may subsist in the submission or accompanying documents.
   2.2         RfP Validity Period
The proposal must remain valid and open for evaluation according to their terms
for a period of at least six (6) months from the time the RfP closes on the deadline
for lodgment of RfP.






   2.3         Cost of RfP Document
 No cost has been prescribed for the RfP Document.

   2.4         One bid/ application per applicant
  Applicant can submit application for engagement as concurrent auditor for
  institutional finance vertical (IFV) at Mumbai where applicant has a regular
  office set-up, either head office or full fledged branch offices.

Firms already engaged with SIDBI:

      SIDBI shall engage the services of a firm/ LLP for carrying out
      Concurrent Audit of only one office of SIDBI. Accordingly, in case the
      applicant has already been engaged as Concurrent Auditor by SIDBI
      for any of its branches and or HO Verticals, such Firm/ LLP will not be
      eligible under this RfP.


                                                                               8|Page
                                                RfP ­ CA for Operations at IFV, SIDBI, Mumbai
        Such firms/ LLP only after completion of specific period (continuous
        three years), cooling period of one year would be observed for
        considering the services of the CA firm again in the same HO Vertical.

      2.5          Late Applications

 Any RfP / application received after the deadline for submission of the bids/
 applications will be treated as "Late Application" and such late applications shall
 not be considered at all for competitive consideration.

      2.6          Requests for Proposal

SIDBI may, in its absolute discretion, seek additional information or material from any
applicants after the RfP closes and all such information and material provided must
be taken to form part of that Applicant's response.

 Applicants should provide details of their contact persons, Fax, Telephone, email
and full address(s) to ensure that replies to bids could be conveyed promptly.

If SIDBI, in its absolute discretion, deems that the originator of the question will gain
an advantage by a response to a question, then SIDBI reserves the right to
communicate such response to all Applicants.

SIDBI may, in its absolute discretion, engage in discussion or negotiation with any
Applicant (or simultaneously with more than one Applicant) after the RfP closes to
improve or clarify any response.
      2.7          Notification

SIDBI will notify all short-listed Applicants in writing as soon as practicable about the
outcome of their bids. SIDBI is not obliged to provide any reasons for any such
acceptance or rejection.
      2.8          Disqualification
Any form of canvassing / lobbying / influence / query regarding shortlisting, status,
etc. will lead to disqualification.

3 About SIDBI

3.1         Small Industries Development Bank of India (SIDBI), set up on April 2, 1990
            under an Act of Indian Parliament, is the Principal Financial Institution for the
            Promotion, Financing and Development of the Micro, Small and Medium
            Enterprise (MSME) sector and for Co-ordination of the functions of the
            institutions engaged in similar activities.
            SIDBI provides its services through a network of Branch Offices located all
            over India. Detailed information on the functions of SIDBI is provided on the
            website, www.sidbi.in

                                                                                     9|Page
                                             RfP ­ CA for Operations at IFV, SIDBI, Mumbai

3.2      SIDBI offers several financial and non-financial products and services for
         catering the financial and non-financial needs of Micro Small and Medium
         Enterprises (MSMEs) through its field level offices. These include the following
         broad areas:
          Direct Finance
          Bills Finance
          Refinance
          Promotion and Development
          Micro-finance
4 Project Particulars:

         The scope of work for Institutional Finance Vertical (IFV) is given in Appendix I.

5 Fee Structure:

The fee structure under this mechanism is based on the outstanding portfolio of the
Head Office Vertical as at the end of previous financial year. The award of contract to
CA firms/ LLPs to undertake concurrent audit will be as per fee structure issued by
the Bank from time to time. The present slab fee structure, based on the outstanding
portfolio size and Average Transactions/ day is indicated below:

      Outstanding Portfolio/ Average            Fee Payable Per Month (excluding
             Transactios/ day                              GST, etc.)

              ` 15,246 Crore                      ` 35,000/ -
 Note: Maximum upto 5% annually enhancement in remuneration may be
 considered, if the contract is renewed, after one year, provided the performance is
 found satisfactory.
No out of pocket expenses or traveling allowance/ halting allowance would be paid to
the concurrent audit firm/ LLP for carrying out the audit. However, the service tax,
education cess/ GST, etc. would be paid by the Bank, as applicable, in addition to the
basic fees. The payment to the concurrent auditors would be subject to deduction of
tax at source, at applicable rates.

6 Selection process
         This RfP will be assessed on the following Selection process:-
         Invite Request for Proposal (RfP) wherein Technical Evaluation information is
         submitted in envelope.

Technical evaluation:
      a) The Applicant is required to submit the details of its proposal in sealed
         envelope. The envelope should be superscribed "For Technical Evaluation"

                                                                                 10 | P a g e
                                          RfP ­ CA for Operations at IFV, SIDBI, Mumbai
      for said Concurrent Audit and should contain detailed statement giving the
      various technical particulars of the proposal covering aspects of the Applicant
      like name and location, year of establishment, names of its partners, staff, their
      qualification/ experience, registration number of the firm/ LLP, details of ICAI
      membership/ Certificate of Practice details, methodology proposed and all
      other such relevant particulars in the format given in Para 1.5.4 of Appendix I.
   b) After the expiry of last date for submission of bids/ application, the
      envelope containing the compliance on the "Technical Evaluation" would be
      opened in respect of all the applicants to verify the compliance of the
      applicants with the prescribed Technical Evaluation information requirements.
      [




   c) The Technical Evaluation of Application would be carried out by SIDBI. The
      technically qualified applicants would be short listed.
   d) The requirement of the applicants for IFV Operations is given in Appendix ­ I.
7 Tenure of the contract:

   The selected firm/ LLP of Chartered Accountant would initially be assigned the
   contract for a period of upto December 31, 2019 extendable for further two more
   years (extended for one year, at a time), provided the performance is found to be
   satisfactory on review and on sole discretion of SIDBI, with NOT MORE THAN
   5% increase in professional fee. The concurrent audit is likely to start from
   February 01, 2019. The proposed assignment would be subject to periodical
   review at the discretion of SIDBI and is liable to be terminated at any time, if not
   found satisfactory, by giving a written notice of 15 days.
8 Terms & Conditions:
   The Applicant shall ensure that the audit be carried out in a professional manner
   and in case of any misconduct & negligence, the Bank may approach the
   concerned professional bodies with complaints of professional misconduct, if any,
   on the part of any professional engaged by the Bank. Accordingly, we may also
   recommend their name to ICAI/ RBI/ IBA or any other authority, for suitable action
   thereon by them.
   The Applicant shall ensure that it will not sub-contract the audit work assigned to
   any outside firm/ LLP or other persons even though such persons are qualified
   Chartered Accountants.

   The applicant appointed as Concurrent Auditor to IFV should nominate a
   Chartered Accountant (CA) who will head the concurrent audit team as the
   "Designated Auditor" duly authorised by the FCA partner of the CA firm/ LLP to
   act on behalf of the firm. The Designated Auditor would be required to submit his/
   her identity proof and address proof together with specimen signatures with a
   request to be allotted biometric enabled unique login ID for access to the system.
   The Designated Auditor would require to log in and log out of the system each

                                                                              11 | P a g e
                                          RfP ­ CA for Operations at IFV, SIDBI, Mumbai
   working day. The Designated Auditor would require to surrender the login ID on
   completion of the concurrent audit tenure or on any change in the Designated
   Auditor by the firm/ LLP.

   The audit team composition for Concurrent Audit and attendance requirements
   should be specified as under :-
   a) The FCA partner of the firm/ LLP who shall visit the Vertical at least 4 days in a
      month; and
   b) Chartered Accountant who shall visit the Vertical preferably on all working
      days but for a minimum of 20 days in a month.

   The concurrent auditor should adhere to the audit coverage strictly as per the
   scope as may be decided by the Bank from time to time.
   The concurrent auditor should not undertake any other activities / assignment on
   behalf of the HO Vertical without obtaining the concurrence of the Audit & Fraud
   Management Vertical at Head Office, in writing.
   The concurrent auditor will co-operate with investigative body, regarding
   processing or execution of the consultancy contract or any matter related with
   discharge of contractual obligations.
   Necessary arrangement would be made for providing space, workstation and
   access to systems (viewing rights only) to the concurrent auditor for ensuring
   smooth conduct of the audit.
   The concurrent auditor shall be granted read only access to the systems of the
   Vertical.

   The concurrent auditor shall not be allowed to carry any mass storage device
   such as pen drive/ flash drive/ thumb drive or any laptop inside the HO premises
   as these devices will not be required for the job. Concurrent auditor shall be
   provided with computer system with disabled USB ports by the concerned HO
   Vertical.
   The concurrent auditor is required to plan the audit that it results in gradual
   shortening of the interval between a transaction and its examination by an
   independent person. The concurrent auditor shall perform substantive checking in
   key areas and emphasis should be on `on the spot' rectification of deficiencies.
   The concurrent auditor shall daily go through all the vouchers and books of the
   HO Vertical for the previous day and identify areas to be scrutinized in detail.
   Should maintain and keep back up papers in support of observations made.
   Any other terms and conditions of the assignment would be decided by the Bank
   on a case to case basis.




                                                                              12 | P a g e
                                             RfP ­ CA for Operations at IFV, SIDBI, Mumbai

A. Declarations and undertaking
      On appointment, the Applicant shall execute undertaking of fidelity and secrecy
      on its letterhead in the format prescribed by the Bank.
      A declaration to be furnished by the applicant that credit facilities availed by the
      firm or partners or firms in which they are partners or directors including any
      facility availed by a third party for which the firm or its partners are guarantor/s
      have not turned or are existing as non-performing assets as per the prudential
      norms of RBI. In case the declaration is found incorrect, the assignment would
      get terminated besides the firm being liable for any action under ICAI/ RBI
      guidelines.
      The applicant must submit an undertaking that the firm/ LLP does not have any
      professional relationship with any of the borrowers of SIDBI nor will it in future
      accept professional relationship with any of the borrowers of SIDBI during the
      period during which the firm/ LLP acts as the concurrent auditor for SIDBI.
      Any other terms and conditions of the assignment would be decided by the Bank
      on a case-to-case basis.

B. Selection Process
      All applicants scoring 65 marks or more (in Technical Evaluation) will be selected
      as the Technically Qualified Applicant. The top three applicants getting the
      maximum marks in Technical Evaluation will be given preference.
      Due diligence will be carried out for the top three applicants getting the maximum
      marks.
      On the recommendation of the Committee, name of the successful applicant
      would be identified for the IFV.
      The final selection of the successful applicants from the technically qualified
      applicants will be done, based on marks scored in Rating Chart
      and due diligence carried out by SIDBI.

9 Guidelines & Instructions for applying:

i.       SIDBI will endeavour to make available all relevant information in the RfP. In
         case of need of any further information or clarification during the application
         period, the applicant must contact only the Contact Officer named above. On
         no account should the Applicants communicate directly with any other SIDBI
         personnel. Failure to comply with this requirement may result in the
         disqualification of the applicant from this competition.
ii.     Government Tax
        Applicants are responsible for establishing the status of the Services for the
        purpose of any government tax including GST, cess etc.



                                                                                 13 | P a g e
                                             RfP ­ CA for Operations at IFV, SIDBI, Mumbai
iii.   Alterations to Application
       Any manuscript or other alteration to the RfP/ Application must be
       countersigned and dated by the person submitting the RfP/ application.
iv.    Letters and Declaration to Accompany Applications
       The bid / Application must be accompanied by a letter on Firm/ LLP letter head
       showing the full registered name(s), registered office address of the applicant.
       It should be signed by a person of suitable authority to commit the applicants
       to a binding contract.
v.     Packaging and Delivery of Applications
       Applications must be delivered in a double sealed envelope clearly labeled
       with the following:
        1.     Selection of CA for operations at Institutional Finance Vertical (IFV),
               Mumbai.
        2.     Application Due Date
        3.     Applicant/ Firm/ LLP Name
       SIDBI accepts no responsibility for the premature opening of any incorrectly
       marked Applications.
       Applications must be received at Audit & Fraud Management Vertical, Small
       Industries Development Bank of India, SIDBI Tower, 15, Ashok Marg,
       Lucknow ­ 226001 (U. P.) for the attention of The General Manager by 2.00
       PM on the due date. Late applications will not be accepted under any
       circumstance. No special pleadings will be accepted. Faxed or e-mailed
       applications will not be accepted.
vi.    Conflict of Interest
       Applicants must disclose in their application details of any circumstances,
       including personal, financial and business activities that will, or might, give rise
       to a conflict of interest; this includes any sub-contractor, if they were awarded
       this contract. Where applicants identify any potential conflicts they should state
       how they intend to avoid such conflicts. SIDBI reserves the right to reject any
       application which, in SIDBI's opinion, gives rise or could potentially give rise to
       a conflict of interest.
vii.   Disclosures
       The applicant must disclose:

       a.    If they are OR have been the subject of any proceedings or other
             arrangements relating to bankruptcy, insolvency or the financial standing
             of the applicant including but not limited to the appointment of any officer
             such as a receiver in relation to the applicant's personal or business
             matters or an arrangement with creditors or of any other similar
             proceedings.

                                                                                 14 | P a g e
                                              RfP ­ CA for Operations at IFV, SIDBI, Mumbai
        b.   If they are OR any of the applicant's staff have been convicted of, or are
             the subject of any proceedings, relating to:
              a criminal offence or other offence, a serious offence involving the
                 activities of a criminal organisation or found by any regulator or
                 professional body to have committed professional misconduct.
                corruption including the offer or receipt of any inducement of any kind in
                relation to obtaining any contract, with SIDBI, or any contracting
                authority.
                failure to fulfill any obligations in any jurisdiction relating to the payment
                of taxes or social security contributions.
        Disclosure extends to any entity in the same group of the applicant (including
        but not limited to parent subsidiary and sister companies, and companies with
        common shareholders whether direct or indirect and parties with whom the
        applicant is associated in respect of this application/ bid).
        If an applicant or related entity or any individual discloses details of any
        previous misconduct or complaint, SIDBI will seek an explanation and
        background details from them. At the sole discretion of SIDBI and assessment
        as to whether the Applicant will be allowed to submit an application, decision
        will then be made by SIDBI.
viii.   Indemnity
        The successful applicant shall exercise reasonable skill, care and diligence in
        the performance of the assignment and indemnify and keep SIDBI indemnified
        in respect of any loss, damage or claim howsoever arising out of or related to
        breach of contract, statutory duty or negligence by the firm/ LLP or its staff,
        agents or sub-contractors in relation to the performance or otherwise of the
        Services to be provided under this Contract.
ix.     Assigning to Others
        The successful applicant shall not, without the prior written consent of SIDBI,
        assign or transfer or cause to be assigned or transferred, whether actually or
        as the result of take over, merger or other change of identity or character of
        the CAs, any one of its rights or obligations under the Contract or any part,
        share or interest therein. Upon any such assignment or transfer, this
        engagement may forthwith be terminated by SIDBI.
x.      Termination
        SIDBI may, at its sole discretion and at any time terminate the Contract (after
        giving 15 day notice) and inform the CAs of SIDBI's decision by written
        instruction to that effect. In the event of the Contract being so terminated, the
        firm/ LLP shall take such steps as are necessary to bring the Services to an
        end, (including terminating any sub-contracts placed by the firm/ LLP) in a cost
        effective, timely and orderly manner. No further correspondence will be
        entertained in this regard.

                                                                                  15 | P a g e
                                               RfP ­ CA for Operations at IFV, SIDBI, Mumbai
                                                                                 Appendix I

1.       Project & Scope for Operation of Institutional Finance Vertical (NBFC &
         SFB) at Mumbai
The Institutional Finance Vertical (IFV) handles the business operations of Non-
Banking Finance Company (NBFC) and Small Finance Banks (SFB) operations of
SIDBI. NBFCs (Deposit taking & Non-Deposit Taking) and SFBs are being supported
by SIDBI along with the other Primary Lending Institutions (Banks/FIs) for extending
financial assistance to MSMEs in the country. The NBFCs and SFBs are regulated
and supervised by RBI in terms of registration, prudential norms, capital adequacy
norms, asset liability management, income recognition, accounting standards, credit/
investment norms, compliance of KYC norms, adopting code of fair business
practices and several disclosure requirements.

Project Objective & Scope of NBFC and SFB Operations
The selected firm/ LLP of Chartered Accountant would undertake the concurrent audit
of NBFC and SFB operations of SIDBI. Assignment would also include verification
and confirmation on the adequacy of internal controls and IT system for sustaining
operations. The staff deputed by the firm/ LLP for carrying out the concurrent audit
should be qualified and experienced in the area of work.

The major areas of work include:

1.1 Pre-sanction stage:
       (i) To check the application from the Borrower.

       (ii) To verify the completeness and appropriateness of various certificate/
            documents/ information submitted by the Borrower.

      (iii) To verify the compliance of KYC guidelines and other Due diligence measures.

      (iv) To verify the proper and correct entry of data/ information into the systems.

       (v) To verify the compliance with eligibility parameters for sanction as per the
           extant Loan Policy of the Bank as also with various guidelines issued by
           SIDBI, RBI and other regulatory authorities in connection with lending to
           NBFCs and SFBs.

1.2 Post Sanction to disbursement stage
(i)        To verify the compliance with all extant guidelines and terms of sanction,

(ii)       To verify that the terms of sanction are captured while conveying sanction to
           the Borrower,


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(iii)      To verify the various documents executed and security creation,

(iv)       To verify the disbursement,

(v)        To verify that correct data and accounting entry into the system has been fed

(vi)       To verify application of correct interest rate and reset terms as approved by
           Competent authority.

1.3 Monitoring and Post disbursement stage
(i)        To verify that periodic reset of Interest rate as per the terms of approval by the
           competent authority and updation of the same in the system

(ii)       To verify the Periodic/ recurring Compliance with terms of sanction

(iii)      To verify the compliance with end use related terms of sanction

(iv)       To verify the compliance of all applicable internal and RBI guidelines

1.4 Reports:

           The firm/ LLP will have to submit the following reports to the Management
           relating to NBFC and SFB Operations:
      I.   Daily reports covering day-to-day transactions with regard to their
           correctness, monitoring of risks and observations, if any, on counterparty and
           other specified limits by the Bank, etc.

  II.      Monthly reports covering comments on adherence to regulatory and internal
           policy guidelines including post disbursement monitoring guidelines and areas
           of audit as indicated at para 1.1 ­ 1.3 including submission of MIS to
           Management. Reconciliation of accounts and other similar periodic
           submission.

 III.      Quarterly report on closing work pertaining to the operations and tallying of
           trial balance.

 IV.       Any other related report as may be required by SIDBI from time to time.

It is expected that the above work would require about 250 - 300 hrs of work in a
year. However, the same may not be evenly distributed through the year.

The above reports with regard to NBFC and SFB Operations should be submitted to
The Chief General Manager, Institutional Finance Vertical at Mumbai, both in soft and
hard forms, within a week of the reporting period for which the report pertains. Daily
reports should be released at the end of the day to The Chief General Manager,
Institutional Finance Vertical at Mumbai, both in soft and hard form. The formats of

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the reports would have to be devised, wherever required, by the firm/ LLP in
consultation with and approval of SIDBI

SIDBI will prescribe structured formats for the audit reports and also stipulate the time
limits for submission of the reports. The audit formats would be reviewed
periodically, as and when required. The firm/ LLP should strictly adhere to the format
and the time limit. SIDBI may prescribe different periodicity for different reports of the
operations.

1.5 Technical Evaluation Procedure of the applicants:

The technical capabilities of the applicants with regard to audit of the operations
pertaining to financing of NBFCs and SFBs would be evaluated based on the
following criteria and weightage:

1.5.1 Technical Evaluation Criteria for Operations pertaining to financing of
      NBFCs at Indirect Finance Vertical, Mumbai.






1.5.2 Pre-Requisite for Applying

       The Applicant should

       Furnish proof of Valid registration/ Certificate of Practice from the
       Institute of Chartered Accountants of India (ICAI).

       Be a Partnership firm of Chartered Accountants with minimum 3 partners
       of which at least 2 partners should be FCA(s). At least one partner
       should have a continuous association with the firm of a minimum of 5
       years and another partner should have a continuous association with the
       firm of a minimum of 3 years. The details of each partner including
       experience, qualification etc., and their Registration Number with
       Institute of Chartered Accountants of India (ICAI) to be furnished as
       documentary proof.

       Has minimum five years of previous track record of carrying out
       concurrent audits in other Financial Institutions/ Public/ private Sector
       Banks particularly in the area of financing to NBFCs/ Refinance to Banks
       (with documentary proof).

       CA firm has its HO or Branch office at Mumbai.

Without compliance of the above pre-requisites, the applicant will not be
eligible for applying.




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      1.5.3 Technical Evaluation Criteria for Operations pertaining to financing of
            NBFCs at Indirect Finance Vertical, Mumbai. (Rating Criteria)

                                        Rating Chart

                                                                                        Maximum
Sl.
                                       Criteria                                          Marks
No.
                                                                                       (Weightage)
 i      Year of establishment of Chartered Accountant firm/ Limited Liability
          Partnership (LLP) of Chartered Accountants.
           Upto 5 years ­ 10 Marks                                                            20
           5 to 10 years ­ 12 Marks
           10 to 15 years ­ 15 Marks
           More than 15 years ­ 20 Marks
ii.        Firms/ Liability Partnership (LLP) of Chartered Accountants with
           minimum 3 partners of whom at least two should be FCA. At least
           one partner should have a continuous association with the firm
                                                                                              30
           of a minimum of 5 years and another partner should have a
           continuous association with the firm of a minimum of 3 years.
           - (20 Marks)
        1.5 marks to be awarded for each additional partner (over and
        above 3 partners) of the firm and 01 mark for full time CA employee
        (Maximum marks - 10)
iii    Minimum five years of previous track record of carrying out such
        audits in other Financial Institutions/ Public/ Private Sector Banks                  30
        mainly in the area of financing to NBFCs/ Refinance to Banks. (with
        documentary proof) ­ 30 Marks
iv.   Whether the firm/ LLP empanelled with RBI as
        Statutory Central Auditor ­ 10 Marks                                                  10
        Statutory Branch Auditor (Category I) ­ 7 Marks
        Statutory Branch Auditor (Category­II) ­ 5 Marks
v.    Availability of suitable infrastructural facilities including office set up,
      adequate manpower who are specialized in the area of audit of financing
      of NBFCs. Presence in India - number of offices and permanent                           10
      manpower along with regular set-up, either Head Office or full fledged
      Branch Offices, at Mumbai.
        Branch (locally) ­ 5 marks
          Head Office (locally) ­ 10 marks

                             Maximum technical score                                         100


                                          ***************

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      1.5.4 Technical Evaluation Criteria for Operations pertaining to financing of
            NBFCs at Indirect Finance Vertical, Mumbai.

 a)   Audit Firm/ LLP Details:

 Sl.
     Requirements                                                                 Remarks
 No.
  1 Name of the Chartered Accountant Firm/ LLP with year of establishment.
  2 Registration Number / Certificate of Practice from the Institute of Chartered
     Accountants of India (furnish documentary proof, Registration should be
     valid).
  3 Knowledge and experience in carrying out audit of Financial Institutions/
     Public/ private Sector Banks particularly in the area of financing to NBFCs/
     Refinance to Banks.
  4 Details of every partner including experience, qualification etc. and their
     Registration number with CA Institute (furnish a detailed list of all the
     partners)

           Sl.   Name of              Education                              Period of
                 the           Age                      Experience        Association with
           No.   Partner              Qualification                           the firm




  5   Minimum five years of previous track record of carrying out such audits in
      other Financial Institutions / Public Sector /Private Sector Banks mainly in
      the area of financing of NBFCs/ Refinance to Banks (furnish documentary
      proof)
  6   Whether the firm/ LLP empanelled with RBI (furnish documentary proof).
  7   Availability of suitable infrastructural facilities including office set up (Branch
      office/ Head office at location of SIDBI's Branch/Head office may be
      specifically indicated), adequate manpower who are specialized in the area
      of audit of financing of NBFCs/ Refinance to Banks. Competence and
      qualification of key professional staff who shall carry out the assignment in a
      time bound manner (furnish a detailed list of all the skilled/ semi skilled
      employees/ staff).
  8   Whether the firm has regular set up with Branch Office or Head Office at
      Mumbai.
  9   Whether the audit firm/ LLP or any sister/ associate concern is conducting
      the statutory audit of SIDBI or Concurrent Audit in any of SIDBI branches.

Note: All the relevant details & documentary evidence are to be furnished. The above is only a
      format. Information may be submitted in additional sheet.
      i.     The following declaration/ undertaking shall be furnished by the firm.

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                                                        RfP ­ CA for Operations at IFV, SIDBI, Mumbai
     ii.     The firm/ LLP shall agree to execute undertaking of fidelity and secrecy on its
             letterhead in the format prescribed by the Bank, if the contract assigned.

                 a) A declaration to be furnished by the firm that credit facilities availed by the firm or
                    partners or firms in which they are partners or directors including any facility
                    availed by a third party for which the firm or its partners are guarantor/s have not
                    turned or are existing as non-performing assets as per the prudential norms of
                    RBI. In case the declaration is found incorrect, the assignment would get
                    terminated besides the firm being liable for any action under ICAI/ RBI guidelines.

                 b) The firm / LLP must submit an undertaking that the firm / LLP does not have any
                    professional relationship with any of the borrowers of SIDBI nor will it in future
                    accept professional relationship with any of the borrowers of SIDBI during the
                    period during which the firm / LLP acts as the concurrent auditor for SIDBI.


b)     Details of audit mainly in the area of financing to NBFCs/ Refinance to banks/ FIs.

                                                                     Year of Audit/ Period (From -
           Sr.     Name    of   the
                                                 Branch/HO           To) [Data required for the last
           No.         Bank/FIs
                                                                         10 years of your firm]




c)     Details of Statutory Central Audits (Category - I) of various Banks

                                                                     Year of Audit/ Period (From -
           Sr.     Name    of   the
                                                 Branch/HO           To) [Data required for the last
           No.         Bank/FIs
                                                                         10 years of your firm]




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                                           RfP ­ CA for Operations at IFV, SIDBI, Mumbai


Declarations:

      All the applicants should submit their bid along with the following
      declarations and undertaking

      (i)    Declaration to be furnished in the letter head of the firm/ LLP.


      We hereby declare that the information submitted above is complete in
      all respect and true to the best of our knowledge. We understand that in
      case any discrepancy or inconsistency or incompleteness is found in
      the information submitted by us, our application is liable to be rejected.




      Date:                                                    Authorised
      Signatory




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                                            RfP ­ CA for Operations at IFV, SIDBI, Mumbai
       (ii)   Declaration of Eligibility


             I/ We _______________________________Chartered Accountants
hereby declare that I/ We comply with the eligibility conditions specified, established
under the Chartered Accountants Act, 1949, and I/ We declare that:

None of the Partners of the firm do not have any disciplinary proceeding under the
Chartered Accountants Act, 1949 pending against them or any disciplinary action
under the Chartered Accountants Act, 1949/ penal action under any other law taken/
pending against him/ her.

Credit facilities availed by the firm or partners or firms in which partners or directors,
including any facility availed by a third party for which the firm or its partners are
guarantor/s, have not turned or are existing as Non Performing Assets as per the
prudential norms of RBI.

The firm does not have any professional relationship with any of the borrowers of
SIDBI nor will it in future accept professional relationship with any of the borrowers of
SIDBI during the period during which the firm acts as the concurrent auditor for
SIDBI.

It is further confirmed that the firm is not the Statutory Auditor of Small Industries
Development Bank of India (SIDBI).

None of the Partner of the firm hold any shares or other securities (including options
or furthers) in Small Industries Development Bank of India (SIDBI).

Our Firm will continue to satisfy the eligibility norm for appointment of Chartered
Accountants as Concurrent Auditors as prescribed by the Bank from time to time.

                   I/ We understand that any breach of the provisions regarding
eligibility shall be considered as gross negligence and may result in appropriate
action under the Chartered Accountants Act, 1949.



                                                     For ________________________
                                                             Chartered Accountants
Place: ______________
Date: _______________
                                                                                  Partner



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