RFP- Appointment of Central Internal Auditor October 2021 to September 2022

REQUEST FOR PROPOSAL
for the

Appointment of Central Internal Auditor
of

Stock Holding Corporation of India Limited

Reference No.: SHCIL/CIAA/2021/01

Stock Holding Corporation of India Limited
Regd. Office: 301, Centre Point
Dr. Babasaheb Ambedkar Marg
Parel, Mumbi-400012

CIN no. U67190MH1986GOI040506
Website: www.stockholding.com

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RFP- Appointment of Central Internal Auditor October 2021 to September 2022

This document is the property of Stock Holding Corporation of India Limited
(StockHolding). It may not be copied, distributed or recorded on any medium,
electronic or otherwise, without StockHolding’s written permission. The use of the
contents of this document, even by the authorized personnel / agencies for any
purpose other than the purpose specified herein, is strictly prohibited and shall
amount to copyright violation and thus, shall be punishable under the Indian
Law.

DISCLAIMER
This Request for Proposal (RFP) is not an offer by StockHolding, but an
invitation to receive response from eligible interested bidders for Appointment of
Central Internal Auditor. This document should be read in its entirety.

The purpose of this RFP is to provide the interested bidder with information to
assist the formulation of their proposals. This RFP does not claim to contain all
the information each bidder may require. Each bidder should conduct its own
investigations and analysis and should check the accuracy, reliability and
completeness of the information in this RFP and wherever necessary, may obtain
independent advice. StockHolding 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. StockHolding may in its absolute
discretion, but without being under any obligation to do so, update, amend or
supplement the information in this RFP.

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RFP- Appointment of Central Internal Auditor October 2021 to September 2022

StockHolding Corporation Of India Ltd.
Regd. Office : 301, Centre Point, Dr. Babasaheb Ambedkar Road, Parel, Mumbai-400 012

CIN : U67190MH1986GOI040506
NOTICE FOR INVITATION OF BID FOR APPOINTMENT

OF CENTRAL INTERNAL AUDITOR
Stockholding Corporation of India Limited invites bids in the prescribed format from eligible
practicing firms of Chartered Accountants for appointment as Central Internal Auditors at Mumbai Office.
The Bid document can be submitted on or before03:00 PM on 09th July 2021 and same is
available on company website: https://corporate.StockHolding.com/notices.html.
Corrigendum / Addendum with regard to this advertisement, if any, shall be uploaded only on
same website.
StockHolding reserves the right to accept or reject any or all other applications without
assigning any reason.
For queries contact: internal.auditor@stockholding.com

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RFP- Appointment of Central Internal Auditor October 2021 to September 2022

Index of RFP Document

Sr. No. Description Pages
1 Introduction 5
2 Eligibility Criteria 9
3 Terms and Conditions 10
4 Format of application form and technical bid 12
5 Format for Financial quotes 15
6 Evaluation Criteria 17
7 Details of scope of audit 20

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RFP- Appointment of Central Internal Auditor October 2021 to September 2022

Stock Holding Corporation of India Limited
Regd. Office: 301, Centre Point
Dr. Babasaheb Ambedkar Marg
Parel, Mumbi-400012

CIN no. U67190MH1986GOI040506
Website: www.stockholding.com

June 24, 2021

Introduction

About StockHolding

StockHolding Corporation of India Limited (StockHolding), a subsidiary of IFCI Limited is
promoted by the public financial institutions and Insurance majors and incorporated as a public
limited company. The services provided by the Company are listed below:-

A) Institution Segment
StockHolding is country’s largest Custodian in terms of assets under custody. The Company
provides post trading and custodial services to institutional investors, mutual funds, banks,
insurance companies, etc. for all securities, valuation and fund accounting services, securities
and lending and borrowing services etc.

B) Retail Segment
a) Depository Participant (DP) Services
StockHolding provides Demat Account Services to Retail, HNI, Corporate and Institutional
Customers on both NSDL and CDSL. StockHolding is also empanelled as a Comtrack
Participant with National Commodity and Derivatives Exchange (NCDEX) to hold commodities
in dematerialised form.

b) Sub-Broking Services
StockHolding offers Sub-Broking Services in Cash, Derivatives and Currency segments through
its wholly owned subsidiary - SHCIL Services Limited (“SSL”) to Retail, HNI, Corporate and
Institutional client.

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RFP- Appointment of Central Internal Auditor October 2021 to September 2022
c) Professional Clearing Member Services
StockHolding is a Professional Clearing Member and Custodian in the Derivative segment.

d) Third Party Distribution

· Mutual Funds, Fixed Deposits & NCDs

· Bonds of PSUs, Capital Gain Bonds, Sovereign Gold Bond

· Initial Public Offer

Loan against Shares

e) National Pension Scheme (NPS)
National Pension System (NPS) is a pension scheme from Government of India offering a
regular pension after retirement after retirement apart from unique tax advantage and partial
withdrawal benefit. StockHolding is a leading Point of Presence (POP) as well a Custodian in
National Pension System architecture.

f) Insurance
StockHolding is a Corporate Agent having valid Composite Corporate Agency License from
IRDAI and is soliciting Insurance business of three insurers each in Life, General and Health to
various segments of client.

g) Bullion
StockHolding is engaged in distribution of MMTC PAMP’s gold and silver coins of assured
purity. StockHolding’s bullion vault at Zaveri Bazar, Mumbai provides vault/ locker services to
retail and institutional clients. StockHolding’s Gold Accumulated Plan, Gold Rush enables
clients to purchase purest quality gold in a safe and secure manner with facility of anytime
withdrawal and safe delivery.

h) e-Stamping
E-stamping is a computer based application and a secured electronic way of stamping
documents. Ministry of Finance, Government of India appointed Stock Holding Corporation of

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RFP- Appointment of Central Internal Auditor October 2021 to September 2022
India Ltd as Central Record Keeping Agency (CRA) for Computerization of Stamp Duty
Administration System (C-SDAS).As a major e-governance initiative, several State
Governments have authorised StockHolding to collect non- judicial stamp duty payment through
our e-stamping system. SHCIL is the only CRA appointed by the Government of India.CRA is
responsible for User Registration, Impress Balance administration and overall E-Stamping
Application Operations and Maintenance. StockHolding acts as the CRA for collection of stamp
duty for various State Governments and Union Territories in India.

i) e-Registration & e-Court fees
E-Registration Fees Collection system is a secure electronic way of Collection of Registration
Fees along with the Other Charges and payment mechanism for various State Government and
Union Territory in India. It is a step towards e-Governance which ensures that Registration fee
and Other Charges paid by public reaches the Government safely. As a major e-governance
initiative, several State Governments have authorized StockHolding to collect judicial stamp
duty payment through e-Court fees system.

j) StockHolding Learning & Development Centre
StockHolding has set up a training-cum-education Centre at Mahape, Navi Mumbai, called
StockHolding Learning and Development Centre (SLDC). It offers superior infrastructural
facilities to provide training and education in the right ambience.

To know more about the Company please visit www.StockHolding.com

‘
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RFP- Appointment of Central Internal Auditor October 2021 to September 2022
OBJECTIVE

The objective of this RFP is to select a Central Internal Auditor for StockHolding as per scope of
work specified in this document.

ROLE OF CENTRAL INTERNAL AUDITOR
The internal audit function of the business operations and activities of Stock Holding
Corporation of India Ltd. (Corporation) is being carried out by Regional Auditors across eleven
(11) regions and one Central Auditor at Head Office at Mumbai/ Navi Mumbai.
The Central Internal Auditors conduct audit of HO departments, products and also collates all the
internal audit reports of the Regions and submits an Executive Summary of the same to the Audit
Committee of the Board (ACB).
StockHolding intends to appoint reputed Practicing Chartered Accountant/ Firm of Chartered
Accountants as Central Internal Auditor to conduct Internal Audit of StockHolding.

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RFP- Appointment of Central Internal Auditor October 2021 to September 2022
ELIGIBILITY CRITERIA

1. The eligible firm should have Head/Registered officein Mumbai/ Navi Mumbai
2. The firm should be empanelled with RBI/CAG/SEBI.
3. The firm should have more than 10 years standing in practice.
4. The firm should have minimum 10 partners.
5. The Lead Partner and the firm should not have any direct/ indirect benefit/ conflict of

interest with the Stockholding group.
6. No adverse remark/disciplinary proceedings should be pending against the firm/any of its

partners on record of The Institute of Chartered Accountants of India (ICAI)
7. The Firm should have an average annual financial turnover of at least Rs.2 crore or more

from practice, in the last three financial years.
8. The Lead Partner under whose supervision the audit of StockHolding will be carried out

should have a minimum post qualification experience of at least 10 years, out of which
minimum 7 years should be in full time practice.
9. The firm should have conducted internal audit of at least 3 Companies having a turnover
of Rs 50 crore or more, in the last 3 years preferably from the BFSI.
10. Carried out Internal Audit of at least one Depository Participant/ Banks/ Broking entities.
11. At least 50% of the partners of the firm should be Fellow CA.

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RFP- Appointment of Central Internal Auditor October 2021 to September 2022

TERMS AND CONDITIONS

i Validity of appointment: The appointment will initially be for one year starting from
01-October- 2021 to 30-September-2022 for conducting internal audit. The Company
at its sole discretion may extend the contract for further 3 terms of one year each,
based on the performance and with the approval of Competent Authority. The renewal
will be subject to a maximum 5% increase in Base remuneration on every renewal as
per mutual agreement, on account of minor revision and up-dation of scope of audit
due to latest guidelines and circular of regulators, Depositories and Exchanges.

ii Place of Audit: The audit work has to be primarily conducted at the Operations office
of StockHolding at SHCIL House, Plot No. P-51, T.T.C. Industrial Area, MIDC,
Mahape, Navi Mumbai- 400710.However, in case of any exigencies or requirement
the auditor will have to carry out the audit work from any of the offices of
StockHolding situated in Mumbai/Navi Mumbai. It is to be noted that for the carrying
out of audit activities, Mumbai and Navi Mumbai jurisdiction will be treated as one
local jurisdiction and not separate jurisdictions.

iii Format for submission of quotations: The firm fulfilling the above minimum
eligibility criteria should submit the technical and financial quotation in separate files
only in pdf format as per Annexure I and II respectively. Both the “Technical
quotation” and “Financial quotation” should be compulsorily password protected.
The files should be named as (Name of the firm_Technical & Name of the
firm_Financial). The password for technical file will be taken on 12th July 2021 for
technical evaluation. If the firm qualifies technically, then they will be asked to submit
the password of the financial quotation pdf file. The date for taking the password for
financial file will be intimated to the bidders who qualify based on technical score.

iv Technical evaluation criteria: As per Annexure III. Only the firms which score 45 or
above points will be eligible for the commercial evaluation process.

v Pre-bid Meeting - The pre-bid meeting will be held on 02nd July 2021. The interested
bidders may e-mail at Internal.auditor@stockholding.com expressing their willingness
to attend the pre-bid meeting. Thereafter, the meeting link and timings will be shared
with them. The interested bidders may send their queries at the above email id by 5 pm
on 01st July 2021.

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RFP- Appointment of Central Internal Auditor October 2021 to September 2022

vi Timelines: The signed quotation should be submitted by email to
Internal.auditor@stockholding.comon or before the 3 PM on 09th July 2021.

Please note the important dates mentioned below:

Date of Submission of quotations(Technical& July 09, 2021upto3.00 P.M.
Financial)

Date of Opening of Technical quotations July 12, 2021 at 03:00 P.M.

Date of Presentation Will be intimated separately

Date of Opening of financial quotations Will be intimated separately

vii StockHolding Internal Committee will evaluate all the quotes and StockHolding
reserves the right to cancel/ restrict/ enlarge/ modify/ postpone and/or extend the date
of receipt/ opening of quotations.

viii The decision of StockHolding shall be final and binding.

For further information, clarification of this RFP document, please contact following officers of
the corporation:

Name of the contact person Contact details & E-mail ID

Ms. Mita Chaudhary, Manager 9987776344
Internal Audit Department Internal.auditor@stockholding.com
Mr. Sanjeev Kumar, Senior Manager 9987776250
Internal Audit Department Internal.auditor@stockholding.com

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RFP- Appointment of Central Internal Auditor October 2021 to September 2022

Annexure I

(On the Letterhead of the Company)

To

Head of Internal Audit
Stock Holding Corporation of India Limited
Regd. Office: 301, Centre Point
Dr. Babasaheb Ambedkar Marg
Parel, Mumbi-400012

Dear Sir,

Re : Application form and Declaration w.r.t. Eligibility Criteria

Particulars/ Details of the Firm

Sr. No. Particulars Details

1. Name of the Firm/Company
2. Constitution

Address with Pin-code
3.

Contact Details of the partner assigned to

StockHolding:

Name of the Partner

Mobile No.(s)

4. Landline No.(s)
E-mail

5. Date of Establishment of the firm

6. Years of experience in Internal Audit

7. No. of Chartered Accountants

8. Branches of C.A. firm, if any

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RFP- Appointment of Central Internal Auditor October 2021 to September 2022

Sr. No. Particulars Details

No. of corporate clients of the firm.
9. Name top five from BFSI

Name of the bank/ Depository Participant/
10. Broking entity audited with year of audit
11. Firm’s PAN/GST No.

12. Empanelment Details with RBI/ CAG/ SEBI

13. Firm’s Registration No. with ICAI

I/We______________________________________________ do hereby confirm that

1. Our firm is having Head/Registered office in Mumbai/ Navi Mumbai

2. Our firm is empanelled with RBI/CAG/SEBI.

3. Our firm has …… years standing in practice.

4. Our firm has ……. Partners.

5. The Lead Partner and the firm does not have any direct/ indirect benefit/ conflict of
interest with StockHolding group.

6. No adverse remark/disciplinary proceedings are pending against the firm/any of its
partners on record of The Institute of Chartered Accountants of India (ICAI).

7. We have an average annual turnover of at least Rs.2 crore or more from practice, in the
last three financial years. (Copies of ITR return to be attached.)

8. Internal Audit of StockHolding will be carried out by the lead partner who is a qualified
Chartered Accountant/Cost Accountants with an experience of at least 10 years, out of
which minimum 7 years is in full time practice.

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RFP- Appointment of Central Internal Auditor October 2021 to September 2022

9. We have conducted Internal Audit of the following Companies having a turnover of Rs
50 crore, in the last 3 years.
a.

b.

c.

10. At least 50% of the partners of the firm ie…..nos are Fellow CA

11. We will provide documentary evidence relating to any of the above point, if required by
the company at the time of appointment.

Declarations:

 We confirm that all the information provided by me/us here above is correct to the
best of my/our knowledge & belief.

 We confirm that we meet all the eligibility criteria mentioned on the contract &we
have not been de-panelled / Black listed by any organization in the past

 I/We have read the terms and conditions stipulated for appointment as Internal
Auditors of StockHolding and I/We also understand that StockHolding has
reserved its right to accept or reject the application without assigning any reasons.
If selected for appointment as Internal Auditor of StockHolding and the offer is
accepted, I/We will execute Service Level Agreement and Integrity pact in the
format given by the company.

Date: Signature of Authorised Signatory
Place:
Name:
Designation:
Stamp

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RFP- Appointment of Central Internal Auditor October 2021 to September 2022

Annexure II

Format for Financial Quotes

(On the Letterhead of the Company)

To
Head of Internal Audit
Stock Holding Corporation of India Limited
Regd. Office: 301, Centre Point
Dr. Babasaheb Ambedkar Marg
Parel, Mumbi-400012

Dear Sir,

Re : Quotation for carrying out internal audit of StockHolding for a period of one
year starting from 01-October-2021 to 30-September-2022 renewable for 3
more terms of one year each as per terms and conditions given in the RFP
document.

I/We______________________________________________ are pleased to submit our
commercials for the assignment/scope of work as mentioned in the document.

Our fee exclusive of applicable taxes for a period of one year starting from 01-October-
2021to 30-September-2022 are as under:

Particulars Amount in Rs.

Professional fee (exclusive of applicable taxes) from
01-October-2021 to 30-September-2022 (fees to be
quoted for the entire year)

Amount in Words (only annual professional fees to be mentioned): Rs.

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RFP- Appointment of Central Internal Auditor October 2021 to September 2022

Date: Signature of Authorised Signatory
Place:
Name:
Designation:
Stamp

Note:

1. Only annual professional fees are to be quoted.

2. Fees will be paid on quarterly basis @25% of the annual fees quoted plus out of
pocket expenses not exceeding 10% of the professional fees on completion of the
audit for the quarter. The out of pocket expenses will be reimbursed on submission of
statement of expenditure and original bills.

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Annexure III

BID EVALUATION PROCESS

The completed bids will be evaluated on the basis of technical and financial parameters as per
details given below. Maximum technical score is 70 and maximum financial score is 30. The
criteria for technical, financial and final scoring is given below.

Technical evaluation criteria

The Company shall constitute an Evaluation Committee (EC), to carry out the evaluation

process. The Technical proposal evaluation process would focus on the ability of the firm to

satisfy technical requirements of the assignment. Technical proposals will be evaluated based on

the following criteria. The bidder will have to provide necessary documentary evidence for

below criteria along with Bid document failing which bidder will be awarded Nil mark for

criteria where no documentary evidence are provided with the bid document.

Sr. Evaluation criteria Score Marking System
No.

1. Presentation by lead 10 Based on the background of the firm, areas of

partner expertise, past and present clientele, Audit approach

etc.

2. Firm in Existence (in 5 10 years – 2 Points

years) 11 - 15 years – 4 Points

More than 15 years – 5 Points

3. No. of partners 5 10 – 2 Points
11 - 15 – 4 Points

More than 15 – 5 Points

4. Post qualification 10 10 years – 7 points

experience of lead 10-12 years – 8 points

partner as on 31.03.2021 More than 12 years – 10 points

5. Experience of lead 5 7-10 years – 3 points

partner as full time 10-12 years – 4 points

partner as on 31.03.2021 More than 12 years – 5 points

6. Fellow CA 10 50% of total partners of firm – 8 points
Above 50% of total partners of firm – 10 points

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RFP- Appointment of Central Internal Auditor October 2021 to September 2022

Sr. Evaluation criteria Score Marking System
No.

7. Relevant audit experience 5 Internal Audit conducted of Depository

participants/Banks/ Broking entity

No of referred institutions audited Points

1-2 2

Above 2 5

8. Financial Capabilities 10 Average annual financial turnover in the last three
financial years i.e.2018-19 to 2020-21

3 Yrs average turn over (Rs.in crore) Points
10 Cr and above 10

5 Cr to less than 10 Cr 7

2 Cr to less than 5 Cr 5

9. Clients 10
Internal Audit conducted of Companies having a

turnover of Rs 50 crore, in the last 3 years.

No of Companies audited having Points
turnover >50 Cr
Above 5 10
3 to 5 7
70
Total Score

Note: Financial bids will be opened for only those bidders who score 45 out of 70 or above
in technical score.

Financial Evaluation criteria

The bidder with the lowest financial quote will be awarded a score of 30 and the score of other
bidders will be set in proportion to the difference in quoted amount between the lowest bidder
and other bidders.

Example: The bidder with lowest quote is for Rs1,00,000/- and the other bids are with quotes for
Rs1,50,000/- and Rs2,00,000/-.

Then the bidder with lowest quote of Rs1,00,000/- will be awarded a score of 30

The bidder with quote of Rs1,50,000/- will be awarded score of 30 x (100000/150000) = 20

The bidder with quote of Rs2,00,000/- will be awarded score of 30 x (100000/200000) = 15

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RFP- Appointment of Central Internal Auditor October 2021 to September 2022
Final Evaluation criteria

The final evaluation will be made on the basis of sum of technical score and financial score.
Total Score = Technical Score + Financial Score.
The bidder with highest total score will be recommended to competent authority for
appointment as the Central Internal Auditor as per terms and conditions mentioned in the
RFP document.
The decision of the Competent Authority of StockHolding will be final and binding on the
bidders.

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RFP- Appointment of Central Internal Auditor October 2021 to September 2022
Annexure IV

General details of Scope of Internal Audit
1. The internal audit report should be detailed and conclusive.

2. It should specify the scope, methodology, extent of verification and observations with
implication & risk suggestion.

3. Internal audit should verify all internal controls – operational, human resources,
finance/accounts, IT areas etc.

4. The report periodicity should be of monthly/ quarterly/Half yearly/Yearly and final
report should be submitted on 10th of the subsequent month.

5. The report should include verification of statutory compliance in respect of all
applicable laws to the Company.

6. Wherever possible, the report should specify the extent of checking in a particular
area in term of value and volume, for example – Bank payments – around 25% etc.

7. The internal audit team should of at least 4 members comprising of article staff (other
than the lead partner), one of whom should be a CA having 3 or more years of
experience.

8. The lead partner should be involved with the finalization of the audit report and
discussion of the same with the management along with presentation of key findings
to the Audit Committee.

9. All reports and certifications should be with UDIN. No separate charges will be paid
for any certification.

10. The firm should have BCP & WFH capability to provide services during pandemic or
similar situations

The Detailed department wise and product wise scope of audit is annexed herewith with as
“Annexure A”.

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ANNEXURE - A

STOCK HOLDING CORPORATION OF INDIA LTD.

SCOPE FOR CENTRAL
AUDIT

Period: October - 2021 to September - 2022
Details of Central Audit

Sr. Frequency Scope of Audit
Details of Audit
Concurrent Pls. refer Annexure - 1
no. Daily Pls. refer Annexure - 2
A Concurrent Audits/ Certificates Pls. refer Annexure - 3
Certification Pls. refer Annexure - 4
NSCCL (Cash, F&O, Debt segment & Currency Concurrent Pls. refer Annexure - 5
1 Concurrent Pls. refer Annexure - 6
Concurrent Pls. refer Annexure - 11
derivatives)
Daily Pls. refer Annexure - 11
2 Fund Valuation services Certification
Pls. refer Annexure - 3
3 SGL & CSGL Daily Pls. refer Annexure - 1
4 NSDL - Retail & Institution segment Certification Pls. refer Annexure - 7
5 CDSL - Retail & Institution segment Pls. refer Annexure - 8
Concurrent Pls. refer Annexure - 9
6
Daily Verification of various NAV schemes Quarterly Pls. refer Annexure - 10
Daily audit & certification of redemption of GOI
Quarterly Pls. refer Annexure - 11
7 Pls. refer Annexure - 12
bond Quarterly Pls. refer Annexure - 13
Quarterly
Daily concurrent audit for subscription of GOI Quarterly Pls. refer Annexure-3
8 Quarterly
Quarterly Pls. refer Annexure - 14
Saving Bonds Quarterly Pls. refer Annexure - 15
Quarterly Pls. refer Annexure - 16
B Quarterly/Certificates Quarterly Pls. refer Annexure - 17
SGL Report & Certification of Reconciliation of Quarterly Pls. refer Annexure - 18
Quarterly Pls. refer Annexure - 19
1 Quarterly
holdings with RBI Quarterly Pls. refer Annexure - 26
NSCCL (Cash, F&O, Debt segment & Currency Quarterly Pls. refer Annexure – 27
Quarterly Pls. refer Annexure - 28
2 Quarterly
derivatives) Quarterly
Quarterly
3 HWD & Training department Quarterly
4 Administration activities Quarterly
5 Derivatives Quarterly
6 Institutional segment Quarterly
7 ISA segment Quarterly
8 Corporate segment Quarterly
9 GOI Bonds & SGB
10 Third Party Products
11 Mahape premises
12 SGL activities
13 CSGL activities
14 Investment functions
15 Related Party Transaction
16 GoldRush
17 e-Stamping operations - Mahape
18 Bullion trade
19 MCX & MCX-SX
20 Sub-Broking
21 Executive Summary of all department reports
22 SBI Certificate - Custody operations
23 NPS - POP Audit (Internal Audit)
24 Compliance Audit
25 Security System

Annexure – A – Detailed Scope of Audit
Sr. Frequency Scope of Audit
Details of Audit Quarterly Pls. refer Annexure - 29
Quarterly Pls. refer Annexure - 30
no. Quarterly Pls. refer Annexure – 31
26 PFRDA Custodial Operations Quarterly Pls. refer Annexure-32
27 Information Technology Department Quarterly Pls. refer Annexure-33

28 Insurance Activities Half yearly Pls. refer Annexure - 20
Half yearly Pls. refer Annexure - 21
29 National E-Repository Ltd. Activities Half yearly Pls. refer Annexure - 22
CDSL Commodity Repository Limited (CCRL) Half yearly Pls. refer Annexure - 4
Half yearly Pls. refer Annexure - 5
30 Half yearly Pls. refer Annexure - 24
Activities
Half yearly Pls. refer Annexure - 26
C Half yearly / Certificates Half yearly Pls. refer Annexure - 11
1 Derivatives - BSE segment Half yearly
2 Derivatives - NSE segment Half yearly Pls. refer Annexure - 25
3 Custodial operations Half yearly Pls. refer Annexure - 26
4 NSDL operations Pls. refer Annexure - 23
5 CDSL operations Yearly Pls. refer Annexure - 34
Yearly Pls. refer Annexure - 07
Branch Rating based on Half yearly report of Yearly Pls. refer Annexure - 35
6 Yearly
Yearly
NSDL & CDSL Yearly
Executive Summary of NSDL & CDSL Reports -
7
All regions
8 NSDL Compliance Certificate
9 CDSL Compliance Certificate
10 NPS - POP Audit (Regulatory Authority)
Half yearly audit and certification of interest on
11
GOI Bond
D Yearly Audits
System Audit of Pledge Module as per NSCCL
1
requirement
2 NPS - POP Audit (Regulatory Authority)
Yearly Inspection u/s 14(2) of SEBI (Custodian of
3
Securities) Regulations 1996
4 DDP Operations Audit
5 Incentive Audit
6 Review of SOP, Manual and Certification

Annexure – A – Detailed Scope of Audit
Annexure – 1
Scope of Audit for activities as Custodian for NSE Clearing Ltd (Formerly
NSCCL)
The coverage of audit includes all relevant segments wherein SHCIL acts as a
custodian. Please refer detailed circular for scope of audit and guidelines.

Annexure – A – Detailed Scope of Audit
Annexure – 2

Scope of Audit - Valuation services

SHCIL provides quarterly valuation services to few general insurance companies
like New India Assurance, General Insurance Corporation of India, The Oriental
Insurance Corporation of India etc. for their debt and equity portfolio based on
FIMMDA guidelines. The same need to be verified by internal auditors.
This audit scope will also cover any other certification required by the clients for whom
SHCIL is providing valuation services at any point of time during the Audit period.

Annexure – A – Detailed Scope of Audit
Annexure – 3

SCOPE OF AUDIT OF SGL/CSGL & INVESTMENT FUNCTION

Operation/ Settlement/ System & Procedure/ Accounting/ Documentation/
Reporting and Compliance (Mumbai & FC centres)

1. Account opening and closing formalities and procedures
2. Purchase:

a. Receipt and verification of instruction from clients
b. System entries and deal slip generation
c. Fund confirmation
d. Settlement in NDS
3. Sales:
a. Receipt and verification of instructions from clients
b. System entries and deal slip generation
c. Securities balance confirmation
d. Settlement in NDS
4. Conversion and transfer request from clients
5. System and procedure
6. Benefits and Redemptions
7. Timely payments and reporting to clients – Holding, Transaction and benefits
8. Investment undertaken by the SGL department (Mumbai)
a. Checking of Fund flow statement
b. Investment approval & limits
c. Critical analysis of investment avenues
d. RBI Fund flow statement
e. System and procedure
f. All accounting entries including income booking relating to above.
9. Reporting and Compliance issues (RBI/ CCIL/ Legal/ Section 372/
Client instruction/ others, if any)
10. CSGL Billings procedure and invoices.
11. Verification of client wise Collateral Margin balances as per SGL Books with
CCIL records at every quarter end.

Annexure – A – Detailed Scope of Audit
Annexure – 4

Scope of Audit of DP Concurrent Audit (NSDL)

Sr. Area Percentage of samples
No. to be verified

1. Account Opening forms including online accounts 100%
2.
opened with e-sign
3.
KYC re-confirmation cases:
4.
5. - Initiated by Participant (100%) 100%
6.
- Intimated by NSDL (100%) 100%
7.
DIS execution (25%) -
8.
Digitally signed DIS images (having DP as well as 10% of Pan India DIS
9.
10. NSDL digital signature) extracted from tamper proof Sample
11.
12. storage (at least 10% of samples)
13.
14. Replacement of Original DIS image in tamper proof 100%
15.
storage (100%)
16.
Margin Pledge / Re-pledge 100%

Client data modifications – Nomination, Signature 100%

updation, Minor to Major account, RI to NRI and

vice versa

Account Freeze

a) Freeze due to statutory order (100%) 100%

b) Other freezes -

Account Unfreeze

a) Unfreeze due to statutory order (100%) 100%

b) Other unfreezes -

Modification in the name of client (including minor 100%

correction in name)

Power of Attorney modifications 100%

Account Closure requests

- Initiated by Participant 100%

Transmission 100%

Investor grievances received by Participant –verify 100%

the entire documentation.

Accreditation of investors (IGP) 100%

Providing statement of accounts to clearing member 100% process level

(100% process level) (For count/ samples checked,

specify number of occasions of dispatch during

audit period - typically it would be six for the six

month period).

FATCA/CRS filing Documented and un-

documented reporting

Where ever “-” is mentioned, it implies that there exists no mandate/ guideline by the
depository and the sample size is on a random basis.

Annexure – A – Detailed Scope of Audit
Annexure – 4

Internal auditors are requested to ensure that the following points should be
categorically audited while conducting DP Concurrent audit as per NSDL.

1. “10% sample PAN verification” for all accounts by internal auditors. (As per
NSDL guidelines the DP has the onus of doing this verification 100%).

2. “100% verification of PAN updates for frozen accounts or PAN modifications for
dormant accounts” by internal auditors.

3. 100% verification of modification.
4. Availability of Investor grievance register
5. Contact details for registering Investor Grievance displayed on notice board in

branches.
6. Depository conducts surprise audit in branches and inspection at HO. Auditor is

required to check for inspection report and verify correction of non-compliance.
7. Compliance of circulars/ guidelines issued during the audit period applicable to

clients
8. Verification of KYC data/ documents uploaded on KRA/ CKYC
9. Compliance under Prevention of Money Laundering Act, 2002 (PMLA)
10. Verification of audit data/documents on DPM
11. Verification of IT related check points mentioned in IAR
12. Verification of Transnet/ Electronic instruction
13. Verification of Speed-e/ IDeAS registration documents
Note:

1. All the certifications/ reports as required by NSDL time to time to be submitted by
auditor.

2. Completion of Concurrent Audit by the next working day or within a week (in case
of large volume).

3. Minor deviation should be rectified during the period of audit only
4. Auditor shall submit duly signed list of samples verified during monthly/half

yearly audit for the activities where 100% concurrent audit is not applicable.

Annexure – A – Detailed Scope of Audit
Annexure – 5

Scope of DP Concurrent Audit (CDSL)

Sr. No. Audit Area Percentage of
samples to be
1. Account opening including online accounts opened
with e-sign verified
100%
2. BO Account data modifications – POA, Nomination,
signature change, Name change, Minor to Major 100%
account, RI to NRI and vice versa.
100%
3. Transaction Statements 100%
4. Account closure initiated by DP 100%
5. Margin Pledge/Unpledge/Repledge/Invocation
100%
instructions
6. Transmissions 100%
7. Freeze & Unfreeze -

a. Statutory 100%
b. Others -

8. BO Grievances/ Redressal Documented and
9. Accreditation of investors (IGP) un-documented

10. FATCA/CRS filing reporting

Where ever “-” is mentioned, it implies that there exists no mandate/guideline by the
depository and the sample size is on a random basis.

Internal auditors are requested to ensure that the following points
should be categorically audited while conducting DP Concurrent audit
as per CDSL

1. “10% sample PAN verification” for all accounts by internal auditors by
visiting the IT website (as per NSDL guidelines the DP has the onus of
doing this verification 100%)

2. “100% verification of PAN updates for frozen accounts or PAN
modifications for dormant accounts” by internal auditors, by visiting the
IT website.

3. 100% Audit of BO account data modifications.

4. Availability of Investor grievance register

Annexure – A – Detailed Scope of Audit
Annexure – 5
5. Contact details for registering Investor Grievance displayed on notice

board in branches.
6. List of services offered by the branch displayed on Notice Board.
7. Depository conducts surprise audit in branches and inspection at HO.

Auditor is required to check for inspection report and verify correction of
non-compliance.
8. Compliance of circulars/ guidelines issued during the audit period
applicable to clients
9. Verification of KYC data/ documents uploaded on KRA/ CKYC
10. Compliance under Prevention of Money Laundering Act, 2002 (PMLA)
11. Verification of audit data/documents on CDAS
12. Verification of IT related check points mentioned in IAR
13. Verification of Transnet/ Electronic instruction
14. Verification of EASY/ EASIEST registration documents
Note:
1. All the certifications/ reports as required by CDSL time to time to be

submitted by auditor.
2. Completion of Concurrent Audit by 7th of the subsequent month.
3. Minor deviation should be rectified during the period of audit only.
4. Auditor shall submit duly signed list of samples verified during

monthly/half yearly audit for the activities where 100% concurrent audit
is not applicable.

Annexure – A – Detailed Scope of Audit
Annexure – 6

Audit Scope for Daily NAV verification

Daily verification of NAV components for various schemes of Mutual
Funds/ Insurance Companies /PMS/AIFs on daily basis. In case of
Mutual Fund Schemes, Global NAVs as well as Plan wise NAVs are
required to be generated by internal auditors on their own tool which
may be in MS excel or any other tool and the same need to be verified
with Global/Plan wise NAVs computed by SHCIL through Fund
Accounting Software for the audit period.
Areas covered

a. Verification of daily interest and amortization accruals
(discounted income) for securities;

b. Verification and valuation of securities as per valuation guidelines
prescribed by respective regulators like SEBI, IRDAI etc.

c. Trade verifications (Other than allocation of CBLO, if any);
d. Daily verification of expenses accrual on defined parameters;
e. Recording and accounting of corporate actions on T-1 /T basis;
f. Verifying calculations of dividend declared by the schemes and

entry for dividend reinvestment for daily/weekly dividend plans
and any other options;
g. Verification of New Security/Asset Class masters and its features;
h. Verification of daily closing market price for equity & settlement
price for derivative’s positions.
i. Verification of daily Unit Capital Movement (Purchase/ Sale/
Switch-in/ Switch-out of Units);
j. Computation of NAVs at Global/Plan levels and comparing with
the NAV generated by FA system;
k. Verification of profit & loss on sale of securities;
l. Verification of scheme NAVs after mergers, if any;
m. Reconciliation of custody stock with FA system

Annexure – A – Detailed Scope of Audit
Annexure – 7

SCOPE OF AUDIT OF HWD AND TRAINING ACTIVITIES

HWD
1. Attendance and payroll
2. Maintenance of leave records and verification of leave applications
3. Training conducted - approvals and payment procedure
4. Promotions
5. Resignations
6. Audit and certifications for Increment & Incentive –
Certification for incentive amount calculation with performance matrix
and board approved policy. Verification and certification of
distributable amounts among employees. (UDIN Certification)

Training Activities
1. Billing
2. Recovery of outstanding from clients

Annexure – A – Detailed Scope of Audit
Annexure – 8

SCOPE OF AUDIT OF ADMINISTRATION ACTIVITIES

1. Functioning of Mail counter
2. Procedure for Hiring of vehicles
3. Review of Training activities
4. Procedure for Purchase / Sale / Leasing of property
5. Review of Pantry activities
6. Procedure for Medical reimbursements, Hospitalization expenses, LFC
7. Purchase of office equipments, stationery, etc.
8. Disbursements / Authorization / Repayment of loans
9. Maintenance of Telephones, Lease lines
10. Review of AMC’s for Air-conditioners, EPABX, Fax machine, Xerox

machine, water filters, etc.
11. Review of House-keeping activities
12. Maintenance of Gymnasium
13. Purchase procedures for IT (PC’s, Hardware, Software, etc) / Premises
14. Procedure for invitation and processing of quotations / tenders
15. Whether approved by Purchase Committee / Management Committee
16. Whether terms of purchase / contract as per approval
17. Review of terms of payments (full / part payments)
18. Whether proper documentation done.

Annexure – A – Detailed Scope of Audit
Annexure – 9

SCOPE OF AUDIT OF DERIVATIVE CLEARING OPERATIONS
1. Verification of Trading Member / Clearing Member Agreement, Verification of

Tariff.
2. Adherence to Base Capital and Additional Base Capital Requirements.
3. Verification of details on Approved users and Authorized persons.
4. Adherence to Collateral specifications and limits.
5. Adherence to Disclosure norms.
6. Verification of Upfront margin collected from clients – Form, Value (with

appropriate haircuts).
7. a. Verification of Mark to Market margin collected from clients – Form, Value.

b. Verification of penalty levied by Exchange & Collection of same from the
client/s
8. Physical verification of Collaterals collected.
9. Audit of Transactions:
a. Trades.
b. Bills (MTM Profit or Loss, Premium payable or Receivable, SHCIL’s service

charges)
c. Initial Margin / Mark to Market margin – Inflow, Outflow, and Transfer.

10. Cash book and Bank book
a. Verification of Records:
b. Settlement obligation received from Clearing Corporation/ Clearing House
c. Correspondence with the Clearing Corporation / Exchange
d. Instruction obtained in writing from clients and other correspondence with
clients
e. Margin reporting to the Exchange
f. Payment of Statutory Charges
g. Submission of Statutory requirements.

11. Institutional Clients:
a. Verification of physical orders and copies of fax instructions
b. Bills and Brokerage payments

Annexure – A – Detailed Scope of Audit
Annexure – 10

SCOPE OF AUDIT OF FINANCE ACTIVITIES – HEAD OFFICE

A. GENERAL:

1. Proper maintenance of ISA and corporate accounting
2. Income reconciliation according to the nature of transactions – client-

wise, preservation of pay-in-slip with client ID no.
3. Proper maintenance of Cash book and Bank book. Periodic

verification of Cash book. Ensure that the Branch / FC do not carry
heavy cash in hand.
4. Cash and Bank book vouching – whether expenses made are within
prescribed powers.
5. Periodic reconciliation of Branch A/c with the Bank statement both
in respect of ISA as well as Corporate A/c including stale cheques.
6. Proper recording and checking of imprest account and amounts spent
out of it
7. Review all outsourcing agencies, if any
8. Settlement of inter office transaction
9. Internal check and control for Expenses, Fixed Assets. Checking of
vouchers, Approval, etc. Verification of Fixed Assets.
10. Review of billings dispatched to the clients and their realization and
reconciliation with Head office. No waiver / concession should be
granted on the bills without approval from the Head office except
penal interest
11. Security of overdue statement and age-wise analysis of doubtful
receivables
12. Tax deducted at source on payments made
13. Inter branch reconciliation and balance confirmation
14. Inter product reconciliation and balance confirmation
15. Accounts operated at Head office need not be covered at branches

B. INCOME:
1. Proper maintenance of ISA and Institutional accounting
2. Billings:

a) Programme, Period and dispatch
b) Collection

Annexure – A – Detailed Scope of Audit
Annexure – 10

c) Overdue bills

d) Institutional clients

e) Clearing member

f) Retail clients

3. Income Reconciliation:

a) Head-wise e.g. Account opening, Demat, Trade and other business,
etc.

b) Scrutiny of overdue statement and age-wise analysis of receivables

c) Identification of doubtful receivables

C. EXPENDITURE:

1. Proper maintenance of Corporate accounts

2. Review of Deployment of funds

3. Proper maintenance of Cash book and Bank book, verification of
monthly Reconciliation of Bank book with Bank statement

4. Review of follow-up of all pending items of Bank Reconciliation
statement

5. Review of branch reporting, verify that Branches / FC’s do not
carry heavy Cash in hand / Bank balance

6. Checking of Reconciliation between Branches and HO

7. Verification of all claims acknowledge and paid

8. Scrutiny of all payments made for Capital expenditure and to
review the procedure for scrutiny and timely follow-up for
delivery of such capital assets

9. Ensuring that no Capital expenditure to be debited to revenue
account

a. Review of NSDL bills approved and paid by SHCIL
b. Review of terms and payment to outsourcing agencies
c. Deduction of tax at source and its timely payment to Central

Government
d. Proper recording and maintenance of supporting, voucher, approval,

etc
e. Review of any compensation paid / losses suffered
f. Review of CPS payments for all branches across PAN India.
g. Review of Bank reconciliations of all regions.
h. Review of Cash vouchers of all branches across PAN India.

Annexure – A – Detailed Scope of Audit
Annexure – 10

i. Review of Trial balances of all branches across PAN India.
D. Important points:

1. Whether cash withdrawals have been recorded in cash and bank book
appropriately

2. Whether the bank reconciliation has been done and the amount
represented in the bank reconciliation have been dealt with in the
subsequent periods properly

3. Are the entries made in cash and bank book, supported by appropriate
vouchers.

4. Whether all vouchers are authorised by the appropriate person/s as per
the Delegation of Powers

5. Is the beneficiary and authoriser of the voucher a different
employee/person, if not, please specify instances

6. Whether all the vouchers relating to cash and bank book have been entered
in the cash and bank book

7. Whether the supporting attached with the vouchers tally with the amount
entered in the system

8. Whether tour programs of officials are approved by the appropriate
authorities prior to the tour

9. Whether there has been any post dated supporting attached to any vouchers
10. Whether any vouchers have been authorised / attached with photo copies

rather than original bills
11. Whether there is any duplication of payment / voucher and if so whether it

has been rectified
12. Whether all vouchers have been marked as paid and cancelled
13. Whether cash book was maintained and tallied on daily basis

E. Other Areas:
1. Physical Verification of Fixed Assets as per Fixed Assets Register: Auditors
to carry out physical verification of fixed assets as per fixed assets register
on a yearly basis and certify that “we have physically verified fixed assets
at all branches and they are in agreement with fixed assets register (FAR)”.
Also a hard copy of FAR should be obtained from branch managers and be
certified by the auditors and should be enclosed with the report.

Annexure – A – Detailed Scope of Audit
Annexure – 10

2. Quarterly certification of Trial Balances of the all branches across regions
includes E-stamping, E-registration and E-Court.

a. Issue of Quarterly finance audit report region wise with management
comments.

b. Issue of quarterly E-stamping certificates.

F. CORPORATE:
1. Bank Reconciliation for 17 bank accounts across all the regions in the
country.
2. Verification of all the bills and vouchers. Whether all the payment
vouchers are authorized by the respective Branch heads, Area Managers
and Regional Managers (As per DOP and approvals).
3. Verification of maker and checker concept. Branch will make initial
payments request at branches for each payment (makers) and same will be
approved by the checker and payment request will flow to H.O. through
CPS module.
4. Verification of all payments request generated in the CPS module along
with the corresponding original bills (except utility bills) received and
approvals thereby and payable entries are generated by the corporate
accounts department (makers), then checkers from corporate accounts
department will verify the bills and approve the same for generating
payment vouchers.
5. Petty Cash at branches are handled through Axis Bank cash cards, Once
cash is loaded in the cards through CPS module, it is booked as imprest in
the respective branch books, when employee withdraw cash from the card,
amount withdrawn will be reduced from the imprest balance of the branch
and debited as advance in the name of employee. This advance will be
squared-off through duly approved cash vouchers.
6. Verification of payment vouchers along with proper approval and bills to
Head office and the date on which advance will be reversed.

G. ISA Accounts
1. Verification of Daily bank reconciliation statements for each of the bank
accounts opened for all each regions. (17 bank accounts)
2. Verification of refunds towards closure of client accounts across PAN
India basis.
3. Audit for Pan India branches.

Annexure – A – Detailed Scope of Audit
Annexure – 10
H. GST scope

1. Verification of GST input credit availed
2. RCM liability created and paid on bills where ever applicable.

Annexure – A – Detailed Scope of Audit
Annexure – 11

SCOPE OF AUDIT OF GOVERNMENT OF INDIA RELIEF BONDS & SOVEREIGN
GOLD BOND

To check whether the necessary documents are completed and properly filed and
maintained including:

1. Application for Bond ledger account
a) Correctness of the data captured in the back office software
b) Register of Bond ledger accounts
c) Register of nominations
d) Forms of nominations / cancellation
e) Scrolls submitted to CAS and RBI
f) Statements submitted to PDO
g) For Online Applications (with e sign), checking of availability of application
forms

2. Receipt of Money and Remittances
1. Timely creation of BLA’s and issue of Certificate of holding
2. Record of cheques returned unpaid/ represented
3. Subscription amounts – Verify the date of receipt / realization and payment to
RBI
4. Payments issued by the Corporation but not encashed by clients as on the quarter
end.

3. Checking of Income and Expenditure:
a) Periodical interest payments to Investors
b) Redemption Payments to Investors
c) Commission paid to Business Associates on mobilization
d) Checking of bills raised on RBI for service charges (only for Relief Bonds)

4. Compliance
a) Checking validity of PAN with Income Tax and NSDL site.
b) Checking compliances with Income tax for 15G, 15H, 197 certificate
c) Checking of whether the invoices uploaded by registered brokers in GST 1 Return

5. Audit and Certification of Redemption of GOI Bond
a) Daily audit & certification of redemption of GOI bond (UDIN)
b) Half yearly audit and certification of interest on GOI Bond (UDIN)

Annexure – A – Detailed Scope of Audit
Annexure – 11

c) Daily concurrent audit for subscription of GOI Saving Bonds
6. Finance:

a) Bank Reconciliation, checking current balance confirmation certificate with
reconciliation and bank book. Match Bank statement balance and Balance
confirmation

b) Checking old outstanding balances
c) Ledger Scrutiny
d) Debtors Ageing
e) Income received from RBI including Brokerage/ Commission/ Handling and

Service Charges
f) Enlisting of cheques issued but not cleared or bounced.
g) Checking compliance with TDS, GST Payments
h) Reimbursement of Receivable from RBI
Sovereign Gold Bond
a) Checking of bills raised on RBI
b) Checking of amounts received from branches and reconciliation
c) For Online Applications – Checking of availability of application forms.
Finance:
a) Bank Reconciliation
b) Checking old outstanding balances
c) Ledger Scrutiny
d) Debtors Ageing
Others:
a) Timely reporting to RBI
b) Comment on time lag between Receipt of subscription and issue of Certificate of

holding
c) Transfer / Transmission cases. In transfer / Transmission cases, to verify that

the COH’s are defaced with stamp “Cancelled”
d) To verify that the application forms are stamped with the BROKER CODE stamp

or a DIRECT stamp.

Annexure – A – Detailed Scope of Audit
Annexure – 12

SCOPE OF AUDIT OF THIRD PARTY PRODUCTS

General:
If no transaction has occurred during the period, then the Internal Auditor is
required to comment “NIL”.
SHCIL is the distributor of units/bonds of various mutual fund/Financial
institutions. Our income is in the form of regular commission/additional
commission/ trail commission which we receive from MF’s / FI’s.
Our expenses are commission payments to sub-brokers who act as SHCIL’s agent.
Normal pay – out rate is 75% of the income received. In case, the pay-out rate is
higher than 75%, an approval is required to be put in place as per existing Delegation
of Powers (DOP).
Verification of the following:

1. Accounting – Booking of income and expenses
2. Generation of payables for franchisees
3. Statutory obligations – TDS, GST payments
4. Bank Reconciliation statement
5. Inter-branch reconciliation
6. Income pending allocation
7. Claim from fund houses for commission and expenses reimbursement as per

terms agreed with them are being billed and collected
8. Pay out to franchisee as per approval
Finance:
1. Accounting – Booking of income and expenses
2. Transfer of Income booked from Head Office to Branches/ BAs
3. Statutory obligations – TDS, GST
4. Bank Reconciliation statement
5. Inter-branch reconciliation
6. Pay out to franchisee as per approval
B. SCOPE OF AUDIT FOR BUSINESS ASSOCIATE SERVICE SYSTEM:
1. Random Checking of payments of commission.

Annexure – A – Detailed Scope of Audit
Annexure – 13

Audit Scope of Mahape Premises Activities

1. Pre Audit of all payments for Mahape premises and other payments
relating to Capital Works.

2. Pre audit of all payments at any other premises relating to capital
works & works contracts.

3. Pre-audit of payments pertaining to Mahape Premises, Center Point
Premises and Training Building.

4. Quarterly report on capital works in progress.
To check whether all payments are as per contract and as per approvals

Annexure – A – Detailed Scope of Audit
Annexure – 14

Audit Scope of Related Party Transactions

The scope of work for related party transactions is as follows:
 Check whether all related party transactions are billed;
 Check whether such transactions are at arm’s length and in ordinary course of

business.
A. RELATED PARTIES:
As per section 2(76) of Indian Companies Act 2013, “related party”, with reference to
a company, means

1. a director or his relative;
2. a key managerial personnel or his relative
3. a firm, in which a director, manager or his relative is a partner;
4. a private company in which a director or manager or his relative is a member or

director;
5. a public company in which a director or manager is a director and holds along

with his relatives, more than two per cent. of its paid-up share capital;
6. any Body corporate whose Board of Directors, managing director or manager is

accustomed to act in accordance with the advice, directions or instructions of a
director or manager;
7. any person on whose advice, directions or instructions a director or manager is
accustomed to act:
Provided that nothing in sub-clauses (6) and (7) shall apply to the advice, directions
or instructions given in a professional capacity;
8. any body corporate company which is—
 a holding, subsidiary or an associate company of such company
 a subsidiary of a holding company to which it is also a subsidiary
 an investment company or the venture of the company.

9. Such other person as may be prescribed under Rule 3 of the Companies
(Specification of Definitions Details) Rules, 2014.

B. CLAUSE REGARDING TRANSACTIONS WITH RELATED PARTIES:
As per section 188(1) of Indian Companies Act 2013, except with the consent of the
Board of Directors given by a resolution passed in a meeting of the Board and subject
to such conditions as may be prescribed, no company shall enter into any contract or
arrangement with a related party with respect to

 sale, purchase or supply of any goods or materials;

Annexure – A – Detailed Scope of Audit
Annexure – 14

 selling or otherwise disposing of, or buying, property of any kind;
 leasing of property of any kind;
 availing or rendering of any services;
 appointment of any agent for purchase or sale of goods, materials, services
 or property;
 such related party's appointment to any office or place of profit in the

company, its subsidiary company or associate company; and
 Underwriting the subscription of any securities or derivatives thereof, of the

company:
 Provided that no contract or arrangement, in the case of a company having a

paid-up share capital of not less than such amount, or transactions not
exceeding such sums, as may be prescribed, shall be entered into except with
the prior approval of the company by a resolution. (Not applicable for
transactions entered into between holding company and its wholly owned
subsidiary whose accounts are consolidated and placed before shareholders at
the General Meeting for approval)
 Provided further that no member of the company shall vote on such
resolution, to approve any contract or arrangement which may be entered
into by the company, if such member is a related party.
 Provided also that nothing contained in the second proviso shall apply to a
company in which ninety per cent or more members, in number, are relatives
of promoters or are related parties:
 Provided also that nothing in this sub-section shall apply to any transactions
entered into by the company in its ordinary course of business other than
transactions which are not on an arm’s length basis.

Annexure – A – Detailed Scope of Audit
Annexure – 15

Scope of Audit for GoldRush

Operations Audit
1. Purchase and Sale Register.
2. Stock Register to be tallied with MPIPL Stock Certificate quarterly basis.
3. Random audit of KYC documents collected.
4. Allotment data from the subscription file.
5. Customer Complaints / feedback.
6. Original Purchase invoice from MPIPL.
7. Despatch and Delivery.

Finance Audit
1. Bank reconciliation & Balance Confirmation.
2. Accuracy and Timeliness of computation of GST liability & input.
3. Accuracy and Timeliness of Payment to MPIPL and other payments.
4. Business Associate Commission payments.
5. Verification of Trial Balance on quarterly basis.

MPIPL
1. Audit to be done for the gold stored in their vault on behalf of Stock Holding.
2. Audited quarterly stock certificate.

Annexure – A – Detailed Scope of Audit
Annexure – 16

Scope of Audit of E-stamping Operations - Central office

e-Stamping HO Operation
1. Creation of User Ids in the system
2. Imprest update process
3. Reset of certificates
4. ACC agreements
5. Receipt of requirement for colour stationery and despatch to region.
6. The audit would be conducted for e-Stamping, e-Registration and e-Court Fee
systems.
7. ACC registration forms to be checked on sample basis for completeness and
accuracy in the system.

HO Finance
1. Updated system data from SRO counters and Authorized collection centres, issuing

the e-Stamp and collecting the stamp duty, and verify the commission paid to ACC
2. Proper maintenance of Cash book and Bank book
3. Checking of Reconciliation between branch and HO
4. Checking of scroll balance (e-stamping) with HO Ops.
5. Proper maintenance of e-stamping accounts
6. Certification of Trial balance
7. Audit of E-Court and E Registration: Scope similar to the scope of audit for E-

Stamping (including cash and bank reconciliations and certifying Trial Balance)
8. To verify calculation and payment of commission to Lead Generation Agents.
9. Ledger Scrutiny and Checking Old Outstanding balances
10. Checking compliance with TDS & GST payments.
11. Verification of Bank Reconciliation and review of follow up of pending items in

Bank Reconciliation in co ordination with operation team.
12. And certifying the Trial Balance is carried out as part of Scope of E- stamping

Internal Audit for both finance and operations areas.
13. Checking regular payments to LGAs and ACCs (including lower denomination

ACCs)

Channel Head HO

1. Age wise unclaimed credits.

Annexure – A – Detailed Scope of Audit
Annexure – 17

Scope of Audit for Bullion Business:

Operations Audit
1. Purchase Register and Sales Register.
2. High Value Transactions: – 100% audit of value exceeding Rs. 50,000/- for
forms and KYC documents
3. Random audit of KYC documents collected during sale of coins
4. Purchase / Sales Invoice.

Finance Audit
1. Income Verification
2. Business Associate Commission payments
3. Quarterly balance confirmation certificate to MMTC
4. Certification of Trial Balance on quarterly basis.
5. Cash Balances to be checked
6. Accuracy and Timeliness of Payment to MMTC
7. Accuracy and Timeliness of computation of GST liability & input Bank
reconciliation
8. Cash verification on Balance Sheet dates

GST Audit: As applicable by Government Authorities

ZAVERI BAZAAR GOLD CUSTODY:
Operations Audit:

1. Application form duly filled in
2. KYC documents duly verified
3. Timely Banking of instruments
4. Proper record maintenance

Finance Audit:
1. Checking credit of instruments
2. Proper accounting
3. Accuracy and Timeliness of GST payments
4. Proper accounting of GST
5. Certification of Trial Balance on quarterly basis.
6. Bank reconciliation if any

Security audit: management
1. Ensuring proper functioning of all security equipments
2. Ensuring proper record of in-time out-time
3. Key

Annexure – A – Detailed Scope of Audit
Annexure – 18

Scope of Audit for MCX & MCX-SX:

MCX

1. Monthly and quarterly certification audit for MCX Ltd. For certification and
audit of valuation of pledged transactions

2. Certification with UDIN

MCX-SX

1. Monthly and quarterly certification audit for MCX-SX Ltd. For certification
and audit of valuation of pledged transactions

2. Certification with UDIN

Annexure – A – Detailed Scope of Audit
Annexure – 19

Scope of Audit for Sub-broking Activities

A. Voice Logger System
1. To verify working of the Voice logger ,wherever there is
an active dealer , inclusive of both branches and CDR
2. To do a random check on the Voice logger data

B. Grievance
1. Register for client complaints/ grievance.

C. Finance
1. Bank reconciliation & Balance Confirmation.
2. Accuracy and Timeliness of GST payments, computation
of GST liability & input.
3. Verification of Trial Balance on quarterly basis.

Annexure – A – Detailed Scope of Audit
Annexure – 20
Derivative – BSE Segment
1. Submission of Half yearly Networth Certificate.

Annexure – A – Detailed Scope of Audit
Annexure – 21
Derivative – NSE & MCX Segment
1. Submission of Half yearly Networth Certificate.
2. Submission of Internal Audit Report – as per relevant circular
issued by the Exchange.

Annexure – A – Detailed Scope of Audit
Annexure – 22

SCOPE OF AUDIT OF CUSTODIAL OPERATION

1. SEBI Compliance.
2. Purchases & Sales (On test check basis).
3. Billing.
4. Holding Statement.
5. Corporate Action.
6. Physical verification of the Securities from Safe custody.
7. Withdrawal of Securities from Safe custody.
8. Gold Custody Audit – Physical verification of securities
9. Finance Audit:

• Accounting-Income booking.
• Inter-branch reconciliation.
• Certification of Trial Balance on quarterly basis.
• Accuracy and Timeliness of computation of GST liability & input, if any.
• Bank reconciliation.
• Brokerage Payments.
• Debtors Ageing.

Annexure – A – Detailed Scope of Audit
Annexure – 23

SCOPE OF AUDIT OF SEBI INSPECTION

1. Yearly inspection u/s 14(2) of SEBI (Custodian of securities) Regulations 1996
2. Mechanism that has put in place for the purpose of reviewing, monitoring and

evaluating controls, systems, procedures, and safeguards for carrying of
Custodial Operations.

Annexure – A – Detailed Scope of Audit
Annexure – 24

Audit Scope for Branch Rating:

SCOPE & METHODOLOGY:

The process for branch rating is as follows:

> The audit observations for the NSDL & CDSL half year Audit report to be

considered as a base.

> The gradation of the audit observations into High, Medium and Low Risk

was done on the basis of previous Audit Report.

> Based on the number of observations under each risk category negative scoring

was given to the branch. The matrix of negative scoring is given below:

No. of observations Risk Negative
Points

<=2 Low 1

>2-4 Low 2

>4-6 Low 3

>6-10 Low 4

>10 Low 5

less than 2 Medium 3

>2<=4 Medium 4

>4 Medium 5

less than 2 High 5

>2<=4 High 8

>4 High 10

Annexure – A – Detailed Scope of Audit
Annexure – 25
Scope of System Audit - Pledge Module
1. General Control
2. Custodial Operation and Process
3. Application Security
4. Network Security
5. IT Continuity Plan (ICP)/ Disaster Recovery Plan (DRP)

Annexure – A – Detailed Scope of Audit
Annexure – 26

Audit of NPS activities- monthly, quarterly, half yearly and yearly basis

Verification and Audit of following reports submitted:
1. Operations
a. Generation of PRAN viz a viz system entry.
b. Timely loading of contribution received from the date of clear funds
for initial and subsequent contributions.
c. Timely submission of Common subscriber registration form (CSRF 1)
to CRA/ CRA-FC.
2. Other Transaction Details

a. Change in subscriber’s personal details
b. Change in Investment scheme/ Pension Fund
c. Processing of withdrawal requests
d. Processing of request for subscriber shifting
e. Issuance of printed account statement
f. Change in subscriber’s nomination details

3. Grievance redressal system from CGMS and direct (through branches)
4. Compliance – Reporting to NPS Trust
a. Submission of periodic Monthly MIS Reports (Annexure 2.4 and 9) by 10th of next
month.
b. In case of deviation from service level standards submission of Quarterly
Exception Reports (Annexure 2.1, 2.2 and 2.3) by 10th of next month.
c. Submission of Compliance Certificate (Annexure 3) at Half yearly within fifteen
days of half year ending.
d. Submission on Annual basis (before 30thApril every year) details of cash held
(certified by Compliance Officer and External Auditor) Annexure 5.
e. Submission of Annual Internal Audit Certificate I, II and III (within three months
from the date of closure of accounts).
5. Compliance – Reporting to PFRDA
a. Cyber security certificate–Half Yearly Annexure I and Annexure II (to be
submitted on letterhead within 30 days from end of Financial year)
b. Submission of Certificate Annexure IV – Annual before 31st October Any
other reports/ MIS as specified in PFRDA (POP) Regulations

Annexure – A – Detailed Scope of Audit
Annexure – 26

c. All the certifications should have UDIN as per ICAI guidelines.
6. Finance
a. Delay in fund transfer to Trustee bank post receipt of clear funds
for initial and subsequent contributions.

Reference Guidelines

The guidelines prescribed hereunder do not limit the scope of the audit and
inspection. The points mentioned are only indicative in nature and not exhaustive.
This has been prepared based on the regulatory requirement (as per relevant act,
regulations and circulars) which keep on developing from time to time. The auditors
should peruse them and update the scope of the audit. The auditors should clearly
indicate ‘Yes’ indicating Compliance, ‘No’ indicating Non-compliance and ‘NA’
wherever ‘Not Applicable’.

The report shall also include the following.

1. In case of any non-compliances/findings/observations/qualifications by the
auditor the management comments/ responses should be obtained against
each point. Further paragraph wise comments are required to be given by the
management for corrective action taken as given in the format above.

2. Improvements brought about in the operations between the last audit and the
current audit.

3. Auditor shall specifically declare about direct / indirect interest in or
relationship with the Point of Presence or its shareholders / directors /
partners / proprietors / management if any and also confirm that they do not
perceive any conflict of interest in such relationship / interest while
conducting audit of the said Point of Presence.

4. Membership number allotted by the affiliated professional body should be
quoted at the bottom of the report as provided in the format. Each page of the
report shall be signed and stamped by the auditor.

5. In case any violations/qualifications/observations are observed by the auditor
the same shall be submitted as annexure with complete details and should be
quantified specifying the no of instances, value etc. and the evidences should
be enclosed with the Audit Report.

6. Sample size indicated in the format above is minimum sample size. The
auditor may increase the sample size as it may deem fit. It is desirable that the
sample selected is representative sample of the population.

7. The details of the sample checked by the auditor needs to be provided along
with the report.

Annexure – A – Detailed Scope of Audit
Annexure – 26
8. The audit report should be submitted to NPS Trust as per the report format

specified above along with the POP management comments wherever non-
compliance/adverse remarks are made by the auditor.
9. In case where audit report submitted is incomplete and not as per the
guidelines like sample size not given, only certificate submitted without
report, same would be treated as non-submission of audit report. NPS Trust
reserves the right to advise the auditor to get the audit redone for completing
the set audit process and format or change the auditor if quality of the report
is not satisfactory or the audit is not carried out as per guidelines.
10. If in the opinion of the auditors, any observation related to any area also
possesses a risk relating to Anti Money Laundering (AML) or Combating
Financing of Terrorism (CFT), then such observation should be highlighted
clearly specifying the risk relating to it.
11. In case of deviations observed, the quantum of compensation as per prescribed
Regulations and Operational Guidelines has been calculated, shared with the
PoP and also mentioned in the report for submission to NPS Trust.

Annexure – A – Detailed Scope of Audit
Annexure – 27
Scope for Compliance Audit
Verification/ scrutiny of the various Compliance Certificates issued by the
departmental heads/ compliance officers.
Do test/ sample audit of important compliances as specified under various
Acts/ Rules/circulars.

Annexure – A – Detailed Scope of Audit
Annexure – 28

Scope of Security System

1. Key movement register as per Standard Operating Procedure (SOP). A copy of SOP
should also be available with Branch Manager (BM).

2. Keys for Guard well – one employee to have only one key.
3. Door Keys – Should be with BM / Employee and not with anyone else.
4. Keys on offsite location – proper record should be maintained
5. Every door in the office which has a lock should be locked. Wherever there is no

lock and there is provision for lock, a lock should be put.
6. Recording of each Camera should be checked every day by BM or an employee

designated by BM. Everyday check for recording during the night for 10 -15 min
around 11 – 11 :30 PM or 12 – 12:30 pm or any other time of the night. Ensure that a
light is kept “ON” during the night near each camera.
7. Camera should cover the entry, the bullion display box and guard well/ safe
containing the bullion. At each stage the face of the person must be clear. If it is
not so, the camera settings should be modified. In case all the three (entry, display
and guard well is not covered, additional camera should be placed).
8. The password of the PC where image is stored should be with BM only. If the BM is
going on leave an employee may be designated and the same should be recorded
through email with a cc to area manager. The person who is being handed over the
password should change it and the same should be changed again when the BM
joins back.
9. The password for burglar alarm should be followed in the same manner as point
no 8. BM or one designated employee must check and ensure that the alarm is ‘ON’
while closing the office.
10. The safe for bullion should be of Godrej make and ground mounted only. If it is not
so the arrangement needs to be reviewed and necessary changes like mounting
within the guard well (if it is available) may be looked at. The present status must
be intimated correctly so that necessary rectification steps can be made.
11. All Windows including the ones in the washroom should be checked for iron
grill.
12. Doors of the washroom must have locking facility (at least a latch) from outside
also.

Annexure – A – Detailed Scope of Audit
Annexure – 29

Scope of Internal Audit of Custodian of Securities for NPS – Annexure “A”

PFRDA (INTERNAL AUDIT OF CUSTODIAN OF SECURITIES) GUIDANCE NOTE – 2019

1. Board Meeting
2. Operational Manual/ Procedure
3. Risk Management Policy
4. Risk Management Committee
5. Adequacy of Infrastructure
6. Settlement Processing
7. Scheme wise reconciliation of Holdings for each Pension Fund
8. Dealing Procedure(Front office) for deals executed by Pension funds
9. Back office procedure
10. Safe Keeping
11. Asset Servicing
12. Reporting to Pension Funds/NPS Trust
13. Reporting to Pension Funds/NPS Trust
14. Accounting
15. Valuation of Asset Under Custody (AUC)
16. Disclosure
17. Periodical returns to Authority/ Trust
18. Compliances
19. Internal Audit/ Custodian/ Scheme Audit

Note: The above list of scope is only indicative and not exhaustive. Custodian/
auditor may include more parameters based on their requirements

Annexure – A – Detailed Scope of Audit
Annexure – 29

Annexure B
On the letter head of Audit Firm

Certificate of Internal Audit
To
Board of Custodian of Securities

We have examined the relevant books of accounts, records and documents
maintained by __________________________________(Custodian of Securities) for the
Quarter ended on________________ of FY__________________ .

The purpose of this audit is to examine that the processes, procedures followed and the
operations carried out by the Pension Fund Manager, are in compliance with
Tripartite Agreement signed by the Custodian of Securities with the NPS Trust.

We have conducted the audit as per REVISED PFRDA (internal auditor of custodian of
securities) GUIDANCE NOTE – 2019.

Further our procedures covered all the areas listed in scope of work stipulated in
Annexure A of the above Guidance Note. (Enclosed, duly signed by us under reference
to this certificate.)

Based on our scrutiny of the books of accounts, records and documents maintained by
the Custodian of Securities, we certify that the Custodian of Securities has complied, in

all material respect, with the relevant clauses of tripartite agreement, Guidelines /
Regulations/ Circulars of NPS Trust/ PFRDA and Investment Policy of the PFM to the

extent covered by the scope of work stipulated in Annexure A and any additional Scope
of work agreed with the Pension Fund Manager.

We declare that we do not have any direct/ indirect interest in or relationship with
shareholders/ Directors of Custodian of Securities.

In our opinion and to the best of our information and according to the explanation given
to us by the Custodian of Securities, the internal audit report provided by us as per
Annexure and subject to our observations contained therein, covers the entire scope of
the Audit and is true and correct.

Yours truly For __________________________(Name of Firm) Chartered Accountants Firm

Regn No ......................................

........................................ .. (Name of Partner) Partner

Membership No:

Place: Date:

Annexure – A – Detailed Scope of Audit
Annexure – 30

Scope of Internal Audit of Information Technology Department
The Internal Auditor needs to verify the following:

• AMC - First of all, obtain the list of contracts (AMC) and get signed
by the management for your working papers so that in future
management will not say that you have missed that AMC -

• On test check basis, select some AMC and obtain the copy of
contract. - Carefully study the clauses of AMC and check whether
the expenses booked according to clauses of AMC. -

• Check whether the TDS @ 2% as applicable in case of contractors if
PAN no. is obtained or 20% in case of the specified contractor does
not provide the PAN no has been deducted or not?? -

• Is the expenditure booked in addition to amount specified in
contract?? If yes, obtain the revised copy of contract otherwise
report to management -

• Deposit of TDS deducted on it -

• Bifurcation of amount into the expenditure to be booked and
prepaid expense if the period specified in the contract exceeds the
year ended. - Booking of AMC in accurate head i.e. have to see
according to expenditure

Annexure – A – Detailed Scope of Audit
Annexure – 31

Scope of Insurance Activities

Insurance Activities
The auditor needs to verify the following:

1. Computer generated electronic Report which contains list of clients, details of
policy such as type of policy, premium amount, date of issue of the policy,
charges or fees received; (Business procurement entries need to be done by
branches and Policy Reconciliation/ Income Receivables by raising GST Bills,
Recoveries by H.O.)

2. A register which shall contain the name, address, telephone no, photograph,
date of commencement of employment, date of leaving the service, if any,
monthly remuneration paid to the specified person;

3. Verification of Trial Balance on quarterly basis ;
4. Compliance - IRDAI
Finance:
1. Accounting – Booking of income and expenses
2. Transfer of Income booked from Head Office to Branches / BAs
3. Statutory obligations – TDS, GST
4. Bank Reconciliation statement
5. Inter-branch reconciliation

Annexure – A – Detailed Scope of Audit
Annexure – 32

Scope of Audit of National E-Repository Limited (NERL)
NERL Process
1 : NERL Account Opening process at Branch level

1. The client will approach Stock Holding Branch for opening of a Repository
account and submit duly filled in NERL Account Opening form along with the
other supporting documents as per prescribed guidelines of Repositories.

2. In Person Verification will be carried out by StockHolding official.

3. StockHolding officials will scrutinize NERL account opening form, KYC forms
and other KYC documents submitted by client prior to acceptance.

4. If the NERL Account opening form, KYC application form does not meet the
prescribed guidelines, the same will have to be returned to the client with a
request for re-submission.

5. StockHolding Official needs to ensure the KYC documents are self-attested by
the client and Verified with original stamp affixed on all copies of proof
submitted by Client.

6. PAN verified stamp to be affixed on PAN copy submitted by Client.

7. SHCIL official details to be mentioned on ACOP form and KYC form wherever
is applicable.

8. On acceptance of complied documents branch official should collect the AMC
charges (if any) and generate Temp ID.

9. Upon generation of Temp ID, Branch Official has to give system generated
acknowledgment copy to Client.

10. On generation of Temp ID, the NERL account opening form and other
documents to be send to the HO ACOP team for further processing.

2: Documents required for NERL account opening
2.1 Individual Category

1. NERL Account opening form duly filled in all respect
2. CKYC application form duly filled in all respect.

Annexure – A – Detailed Scope of Audit
Annexure – 32

3. In person verification of all holders on ACOP form and KYC form.
4. Self attested copy of PAN, Proof of identity and Proof of address of all the

holders.
5. Cancelled pre-printed cheque leaf for bank details proof.
6. Farmer can put as EXEMP0000T instead of PAN card copy.
7. If the NERL account is opened in farmer category then ensure to collect 7/12

extract copy along with clear 7/12 number (PANI no)
8. Ensure signature of client on declaration form.
2.2 Body corporate accounts (Non Individual forms)

1. Account opening form and KYC application form duly filled in all respect.
2. PAN Copy in the Name of Company is Mandatory for Corporate Account

opening.
3. Address proof in the Name of Company is Mandatory for Corporate Account

opening.
4. Copy of Balance sheet for the Last TWO financial year is required (to be

submitted every year).
5. Copy of latest share holding pattern including list of all those holding control,

either directly or indirectly, in the company in terms of SEBI takeover
Regulations, duly certified by the company secretary/Whole time director/
MD (to be submitted every year).
6. Photograph, Proof of Identity, Proof of Address, PAN and DIN numbers of
whole time directors/two directors in charge of day to day operations.
7. Photograph, Proof of Identity, Proof of Address, PAN of individual promoters
holding control - either directly or indirectly.
8. Copies of the Memorandum of Association and Articles of Association are
required.
9. Copy of Certificate of Incorporation is required.
10. Copy of the Board Resolution for investing in Commodity Market is required.
11. Details of Authorized signatories along with Photo and Signatures are
required.
12. Supporting Documents should be attested by Whole time Director and person
authorized to deal in Commodities on behalf of Company along with Company
stamp.
13. Cancelled pre-printed cheque leaf for bank details proof.

3. NERL Account Opening process at HO level

3.1 Initial Entry by Branch user

Annexure – A – Detailed Scope of Audit
Annexure – 32

1. After collecting all the documents from Client, Branch official needs to
generate temp id (Account opening – initial accop entry) from back office and
forward the scan copy of the same to HO Mumbai.

2. User path in Back office : Initial Accop Entry
3.2 Client Id generation on NERL website by HO user

1. On the receipt of document at HO, account opening entry for generation of
Client ID is done on NERL website directly (https://nerlindia.com).

2. After successful entry of data onNERL website, account number gets
generated.

3. User path in NERL system :Organisation – CreateBeneficiary
3.3 Data entry in Back Office by HO user
In NERL client enrolment process, data is captured in NERL website first then same
transferred to Back office system. Data base is maintained in back office in two ways
i.e. Manual process and File loading process

3.3.1 Manual Process:
1. Data can be updated in back office system manually by each record wise.

2. After generation of beneficiary account number on NERL web site, same will
be mapped against temp Ids generated by Branch users in the Back office.
Mapping activity is done by designated HO ACOP team official.

3. User path in Back office : ACOP - Comtract / NERL – Account opening – client
id updation

4. User will first enter the temp ID in given field then system will flash the Name
of the holder against that temp ID. User then will enter the Beneficiary/client
ID generated on NERL web site and name of holder. After re-confirmation of
entered details user will save the record.

3.3.2 File loading process
1. NERL provides the data in xls file on request.

Annexure – A – Detailed Scope of Audit
Annexure – 32

2. File will be then converted in to CSV format in prescribed format and loaded
in the Back Office through the options provided.

3. User Path in Back Office: Account opening – client Export upload
4. Key point to be remembers while converting file in CSV format

Take Excel file from NERL open the same with open office
Replace (,) with (~).
Remove 2 (~) before PAN if 4 (~) are displayed in a file.

4: NERL Modification

1. In case NERL client wants to modify any detail they can submit modification
form (as per NERL Manual) to any StockHolding branch.

2. Branch official will check whether modification form is duly filled and signed
and send the scan of the same to HO ACOP team.

3. On receipt of such modification request, HO user will make changes on the
NERL web site as well as in back office manually.

4. User path in NERL system : Organization – view Beneficiary

5. User Path for modification in Back office: Account opening – client account
closure.

5: NERL CM-TM Mapping
1. CM-TM mapping is also done at HO level.
2. Branch official will collect duly filled and signed request form (as prescribed
by NERL) and send the scan copy of the same to HO ACOP team.
3. Designated official from HO ACOP team will scrutinized the documents as per
the guidelines set by Repository.
a. Entry of complied cases will be made directly on NERL website.
4. User path in NERL system : CM – TM trading beneficiary id ma

6: NERL closure:
1. NERL closure request to be accepted in NERL prescribed format.

Annexure – A – Detailed Scope of Audit
Annexure – 32
2. On receipt of such request from client, the branch user will check whether

same is duly filled and signed and send a scan copy of the same to HO ACOP
team.
3. On receipt of NERL Closure form, designated official from HO ACOP team
will scrutinized the documents as per the guidelines set by Repository.
4. The complied case will be send to DP Billing team for NDC confirmation.
5. On receipt of confirmation from Billing team If pending dues are not there
then status of the account will be changes as closed in back office as well as on
NERL web site.
6. User path in Back office: Account opening – client account closure
7. User path in NERL system: Mater – Beneficiary closure
Please Note: We have to login through Admin login id and same can be closed
but once closed account can’t be reopened
8. If DP billing team reverted with pending dues for the client then related mail
will be send to the conserved branch and branch in turn informs the client.
9. After recovery of pending dues from client, the process as mentioned above
will be followed.

Annexure – A – Detailed Scope of Audit
Annexure – 33

Scope of Audit of CDSL Commodity Repository Limited (CCRL)

CCRL Account Opening process at HO level
1. Client Id generation on CCRL website by HO user

1. On the receipt of document at HO, account opening entry for generation of
Client ID is done on CCRL website directly ( http://www.ccrl.co.in)

2. User path in CCRL system: Customer- Select CCRL- Login RP-SHCIL User
name and password.

3. After successful entry of data on CCRL website, account number gets
generated.

2. Checker entry: CCRL site
1. User path in CCRL system : Client- Account Opening-New- Action- Authorize-
Checker id- Submit- Submit
2. Account ID generated in CCRL system to be note down carefully for further
use.
3. All documents and signature will be uploaded to CCRL site. Documents
should be in JPG format (Documents to be loaded one after another by
selecting proof details).
4. User path in CCRL system : Client- Document scan- Save

3. CCRL procedure of mapping the client ID in back office is same as NERL as
mentioned in the Annexure “32” pertaining to NERL.

4. TM –CM mapping & Client CM linking :
1. Mapping will be done directly on CCRL site
2. Path : client – Masters – TM –CM Mapping or Client CM linking

5. CCRL client Modification:

Annexure – A – Detailed Scope of Audit
Annexure – 33
1. In case CCRL client wants to modify any detail they can submit modification

form(as per CCRL Manual) to any StockHolding branch.
2. Branch official will check whether modification form is duly filled and signed

and send the scan of the same to HO ACOP team.
3. On receipt of such modification request, HO user will make changes on the

CCRL web site directly.

4. Details will be modified only if the checker entry is done. If same is not done
then HO ACOP team official will coordinate with CCRL team.

6. CCRL closure:
1. CCRL closure request to be accepted in CCRL prescribed format.
2. On receipt of such request from client, the branch user will check whether
same is duly filled and signed and send a scan copy of the same to HO ACOP
team.
3. On receipt of CCRL Closure form, designated official from HO ACOP team will
scrutinized the documents as per the guidelines set by Repository.
4. The complied case will be send to DP Billing team for NDC confirmation.
5. On receipt of confirmation from Billing team If pending dues are not there
then status of the account will be changes as closed in back office as well as on
NERL web site.
6. User Path : Account opening – client account closure

Annexure – A – Detailed Scope of Audit
Annexure – 34
Scope of Audit of DDP Operations Audit
1. DDP Operations audit as per SEBI (Foreign Portfolio Investors)
Regulations 2019
2. Audit on the internal control with respect to DDP operations
Scope of audit
1. Registration under the relevant category
2. Verification of application form and supporting documents for FPI
Registrations
3. Payment of fee to SEBI for the registered FPI
4. Adequacy of infrastructure , system, controls and manuals
5. Submission of reports pertaining to FPI to SEBI & other regulator
6. Verification of documentation obtained from FPI
7. Others areas per relevant circular from SEBI

Annexure – A – Detailed Scope of Audit
Annexure – 35
Scope of Audit of review of SOP , Manual & Certification
1. The standard operating procedure and manual of department and
product should be reviewed once in a year.
2. Verification of latest guidelines and circulars from regulators has been
incorporated in the manual.
3. The compliance officers of the various departments furnish Monthly,
Quarterly, Half yearly and yearly certifications to regulators,
depositories and exchanges. The issuance of these certifications by the
internal auditor is part of the scope of the audit. All the certification
issued by the internal auditor should be UDIN generated and no
separate fee will be paid for the same.

Annexure – A – Detailed Scope of Audit
DISCLAIMER

The scope of the audit is subject to a periodic review with reference to
the changes in type and nature of the product & services, business
conditions and regulatory framework.

Annexure – A – Detailed Scope of Audit