nabard financial services limited...nabard financial services limited, [nabfins], having its...

NABARD FINANCIAL SERVICES LIMITED [Subsidiary of National Bank for Agriculture and Rural Development]

NABARD FINANCIAL SERVICES LIMITED (NABFINS)

(A subsidiary of NABARD)

3072, 14th Cross, KR Road

Banashankari 2nd Stage, Bengaluru-560070

E-mail: [email protected]; Fax: 080 26970504 Telephones: 26970500

CIN: U85110KA1997PLC021862; www.nabfins.org

RE-TENDER DOCUMENT

FOR

INTERNAL AUDIT

Opening Date of Submission of Tender : 12th Sep 2017

Closing Date of Submission of Tender : 14th Sep 2017 (4.00 pm)

mailto:[email protected]


Inviting application for Internal Auditor of NABARD Financial Services Ltd (NABFINS)

NABARD Financial Services Limited, [NABFINS], having its registered head office at 3072, 14th

Cross, Banashankari 2nd Stage, Shastri Nagar, Off KR Road, Bengaluru-560070, is a subsidiary

of National Bank for Agriculture and Rural Development (NABARD) with equity participation from

NABARD, Government of Karnataka, Canara Bank, Union Bank of Indian, Bank of Baroda,

Dhanalakshmi Bank and Federal Bank. It is a non-deposit taking NBFC-MFI registered with

the Reserve Bank of India having operations in 11 states across India. The main objectives of the

Company are to provide financial services in two broad areas of agriculture and microfinance.

NABFINS provides credit and other facilities for promotion, expansion, commercialization and

modernization of agriculture and allied activities.

NABARD Financial Services Ltd (NABFINS) is inviting tender from Chartered Accountant Firms

(CA Firms) for the appointment of Internal Auditor at its head office Bangalore on contract or

retainer basis.

The responsibilities of the Internal Auditors shall include reporting on the adequacy of internal

controls, the accuracy and propriety of transactions, level of compliance with financial, regulatory

and statutory norms.

The audit team needs to verify various functioning aspects as per the attached scope document

and other need based aspects. Internal Audit process shall also involve field visits to various

district/branch offices and clients to verify the deviation on the laid down process and end

utilisation of loan amount.

Along with the audit, Internal Auditor of the Company shall be required to help the Company in

streamlining its accounting systems, provide advice/suggestions in compliance with the

accounting standards, other relevant regulations/conventions etc.

Interested CA Firms may forward/submit the required information through hard copy to our Head

Office. The sealed tender may be submitted in one big envelop superscripting “NABFINS-

Appointment of Internal Auditor” containing two sealed envelopes, one for “Technical Bid”

(Experience and Eligibility Criteria) as per Annexure–1 and the another for “Financial Bid”

(Professional Fee) as per Annexure-2 superscripting as such and addressed to Managing

Director, NABARD Financial Services Ltd. The Technical Bid envelop must contain the required


information along with all relevant documents in support of eligibility criteria. The Financial Bid

envelop must contain only the Financial Bid format.

The Technical Bid will be opened at NABFINS Head Office on 14th Sep 2017 (5.00 pm), in

presence of the bidders who wish to be present. Based on the preliminary scrutiny by the selection

committee and after opening the Financial Bid, shortlisted firms shall be invited for an interaction

with the selection committee on a mutually convenient date and time.

The interested CA Firms are advised to read carefully the entire tender document before

submitting their tender and the tender documents not received in Prescribed format and/or found

to be incomplete in any respect will be summarily rejected. For details regarding the operations

of NABFINS, you may please refer to our website--www.nabfins.org. Any further

information/clarification can be sought from:

Mr. Sai Ranganathan, AGM, NABARD Financial Services Ltd(NABFINS) 3072, 14th Cross, KR Road Banashankari 2nd Stage, Bengaluru-560070 E-mail: [email protected] Eligibility Criteria:

1. The Chartered Accountant firm should have at least an experience of 3 years from the

establishment or registration of the firm.

2. In case of sole proprietor firm, the proprietor should be a FCA while in case of partnership

firm, one of the partners should be a FCA.

3. The firm should not have been debarred from Statutory Audit/Internal Audit of any

Company.

4. The Chartered Accountant firm or its partners should not be disqualified under provision

of section 141 of the Companies Act, 2013.

5. The license of the proprietor/Key person of the partnership concern have been issued for

full time practice by the ICAI.

6. The Chartered Accountant firm should have its office at Bengaluru.

7. The Chartered Accountant firm should have experience and exposure of Corporates,

particularly for financial institutions like NBFCs, NBFC-MFIs, Banks, Legal matters,

Investments, Secretarial, Accounting and Tax matters.

8. The Chartered Accountant firm should have experience in conducting Internal audit,

Management audit, Taxation and Revenue audit and other management work such as

verification of assets and stocks, cash & fund management, recruitment services etc.

9. The Chartered Accountant firm or no partner thereof should have been subjected to any

disciplinary proceedings initiated by the ICAI and no such proceedings should be pending

as on the date of appointment.


10. The firm having DISA/CISA qualified partners/proprietors may be preferred.

11. The Chartered Accountant firm should have at least five articles/Articled clerks and two

fulltime CA on the date of tender submission.

12. The annual turnover of the Chartered Accountant firm shall not be less than Rs.20 Lacs

as per the latest financial year.

13. The proposer should provide reference of two clients for whom they have earlier/recently

carried out such Internal/other Audit assignment.

Terms and Conditions:

1. The period of appointment shall be for conducting Internal Audit of NABFINS for the

financial year 2017-18 starting from October 2017. However, considering satisfactory

work, the appointment may be extended further. The Company reserves the right to extend

the tenure or terminate the appointment on account of unsatisfactory performance.

2. Each page of the tender document is required to be signed by the partner of CA firm. The

documents/certificates in support along with the tender shall also be signed by the partner.

3. Tender shall be submitted in official tender document only. If submitted in any other form,

the same shall be summarily rejected.

4. No local conveyance expenses and out of pocket expenses will be paid for audit

conducted at our Head Office or in local area.

5. The Chartered Accountant firm should depute trained staff (team of two) for day to day

audit and the assignment should be supervised by the senior partner of the firm who will

be available for discussion with the management as and when deemed necessary. The

presence/involvement of senior partner (CA) may be required for minimum 3 to 5 days in

a month. The audit personnel should not be changed frequently so that continuity and

consistency is maintained.

6. Audit observations shall be shared on regular basis and shall be discussed with the

management on monthly basis along with the status of compliance. Report along with the

compliance and auditor’s remarks shall be presented to the Audit Committee of the Board

on quarterly basis.

7. NDA to be signed between NABFINS and proposer firm.

8. The proposer shall (whether or not she/he submits the proposal) treat the details of the

documents as secret and confidential.


Annexure-1

TECHNICAL BID

(The details to be provided as on the closing date of this notice inviting tender)

General Information

1 Name of the Chartered Accountant firm

2 Registered/Main Office Address and Contact Number

3 Branch Office Addresses (if any)

4 Number of Partners and Name & profile of Partners

with ICAI Registration no.

5 Membership/Registration No. & Date

6 Certificate of Practice No

7 Brief profile of the firm including promoters, parent

association (if any)

8 Name & details of DISA/CISA qualified partners (If

any)

Eligibility Criteria

1 Whether the firm meets all the eligibility criteria as

defined above? (Yes/No). If yes, supporting

documents as per eligibility criteria to be enclosed.

2 Number of year’s experience

3 Whether the firm is empanelled with C&AG (Yes/No)

4 Whether the firm is empanelled with RBI (Yes/No). If

yes, empanelment no.

5 Whether the firm has peer review by members of ICAI

for any financial year? (Yes/No). If yes, year of peer

review to be mentioned.

6 Number of Chartered Accountant employees (As on

the closing date of tender)


7 Number of Articles/ Audit Clerks (As on the closing

date of tender)

8 Annual Turnover of CA firm for:

a. FY 2014-15

b. FY 2015-16

c. FY 2016-17

9 Reference of two clients for whom earlier/recently

carried out Internal/other Audit assignment


Annexure-2

FINANCIAL BID

The interested CA firms may quote their professional fees (all inclusive) in the following format:

Serial No Description Professional Fee

1 Internal Audit professional fee per month

2 Others (if any)

3 Taxes

4 Grand Total

Grand Total Professional Fee (In words)

………………………………………………………………………………………………………………

Signature of Partner:

Name of Partner:

Date:

Seal of Firm:


Periodicity

of Report % of Check

1 EQUITY CAPITAL

1.1 Raised during the quarter --- if yes, organisation name. Monthly 100% HO

1.2 Whether Board Resolution is passed for Allotment of Shares Monthly 100% HO

(Furnish the date of minutes of Board Meeting)

1.3 Whether Amount due in respect of allotment of Monthly 100% HO

shares has been duly received and the share certificate/s issued

after allotment.

1.4 Statutory requirements of the Companies Act, 1961 Monthly 100% HO

are complied with within stipulated period

2 LONG TERM BORROWINGS

2.1 Details of long term borrowings availed during the quarter Monthly 100% HO

Delays in claiming Refinance

Whether all Documentation of borrowings has been done

2.2

Whether terms & conditions for sanction of loans are complied

with. Monthly 100% HO

If not complied mention the same.

2.3 Check & Ensure the accuracy of monthly/Monthly payment of Monthly 100% HO

interest on borrowings.

2.4 Repayment of Refinance : Whether delayed, prepaid etc. Monthly 100% HO

2.5 Ensure and verify whether the company has accepted any long

term loans or deposits from the Public. If so whether the

provisions of new companies act are complied with. Monthly 100% HO

2.6

Balance confirmation of loans and book debt statements where

ever applicable obtained or not on time. Monthly 100% HO

Furnish the date of confirmation

SCOPE OF WORK

NABARD FINANCIAL SERVICES LIMITED

INTERNAL AUDIT SCOPE OF ACTIVITIES( ANNEXURE )ITEM NO. Internal Auditor

Location


3 DEFERRED TAX LIABILITIES

3.1 Whether any provision has been made for deferred tax liabilities Monthly 100% HO

3.2 Verification of Deferred tax liability Monthly 100% HO

3.3 Verify the Deferred tax liability in respect of Disallowance Monthly 100% HO

of Gratuity provision U/Sec. 43B of the Income Tax Act, 1961

3.4 Verify the Deferred tax liability in respect of disallowance of Monthly 100% HO

Leave Encashment Provision U/Sec. 43B of the Income Tax

Act, 1961

4 OTHER LONG TERM LIABILITIES :

4.1 Whether there are any other long term liabilities other than long Monthly 100% HO

term borrowing are existing at the end of quarter

For example the security deposit from BC, etc.

4.2 Ensure, check and furnish the list of other long term Monthly 100% HO

liabilities and its terms and conditions

4.3 Whether receipts have been issued for Security Deposits Monthly 100% HO

Whether interest is being paid/ accruals accounted

4.4 Check if any cost is involved in the long term liabilities, If so Monthly 100% HO

furnish the nature of cost and amount


5 PROVISIONS FOR EMPLOYEE BENEFITS

5.1 Whether Provision for employees retirement benefits such as Monthly 100% HO

Gratuity and Leave Encashment was made.

5.2 Verify and ensure the guidance notes issued by ICAI are Monthly 100% HO

followed by the company in respect of gratuity provision.

Furnish the deviations if any. Also state the method followed by

the company in respect of gratuity provision

6 SHORT TERM BORROWINGS

6.1

Nature of Short Term Borrowings existing at the end of the

quarter ( Overdraft/ other facilities if any) Monthly 100% HO

If yes, then to verify the gap against the

actual demand and the time of demand.

6.2 Whether Boards Resolution is passed for the availment of loans Monthly 100% HO


6.3

Whether the defined terms and conditions of loan are complied

with. Monthly 100% HO

If not complied mention the same.

6.4

Check & Ensure proper execution of loan

agreements/documents available at HO. Monthly 100% HO

6.5 Check & Ensure the accuracy of half yearly payment of Monthly 100% HO

interest on loans borrowed.


6.6 Half yearly confirmation of loans borrowed obtained. If so Monthly 100% HO

furnish the date of confirmation

6.7

Verify and ensure that the repayment register for external

borrowings is updated, interest accruals are properly accounted

and repayments are made against the maintained repayment

notices received from NABARD. Monthly 100% HO

6.8 Ensure and verify whether the company has accepted any short Monthly 100% HO

term loans or deposits from the Public. If so provisions of of

Section

58A & 58AA of the Companies Act, 1956 are complied with

7 OTHER CURRENT LIABILITIES

7.1

Verify and ensure proper accounting and record of other current

liabilities Monthly 100% HO

For example the security deposit from staff

towards the leased accommodation, etc.

7.2

Whether proper provision for expenses has been made in the

books Monthly 100% HO

If not mention the nature of expenses not provided for.

7.3 Whether Statutory dues such as Tax Deducted at Source, Service Monthly 100% HO

Tax, Professional Tax of Employees are calculated properly

and remitted to the Govt on or before due dates, If not furnish

full details.


7.4 Verify the accuracy of the above provision for expenses Monthly 100% HO

7.5 Verify the accuracy of interest provision on loans borrowed Monthly 100% HO

8 SHORT TERM PROVISIONS

8.1

Whether provision for interest liability, PAR, leave encashment

and leave travel Monthly 100% HO

allowance has been made. If not state the reasons for the same

8.2 In respect of Provision of PAR, Leave Encashment & Leave Travel Monthly 100% HO

Allowance whether the policy approved by the board has been

complied with.

(Furnish the Policy No. and date adopted by the board)

8.3 Verify and check the provision for income tax as per Income Monthly 100% HO

Tax Act, 1961

9 FIXED ASSETS

9.1 Do the fixed assets (computers, desks, filing cabinets, etc.) Monthly Sample or 100% HO

correspond with what is listed in fixed assets register Certification required

9.2 Whether Physical verification of the Fixed Assets has been Half Yearly Sample or 100% HO

carried out by the company. If so state date of reports and Certification required

its remarks.

9.3

Apart from normal wear-and-tear, are the furniture, equipment

and Half Yearly Sample or 100% HO

machines well protected and in good condition? Certification required

9.4

Verification of the confirmations received from the Districts on

fixed assets status. Half Yearly Sample or 100% HO

Certification required

9.5 Do all fixed assets have a Fixed Asset Number clearly written on Half Yearly Sample or 100% HO

them in indelible ink? Certification required

9.6

Are all computers, printers and keyboards covered to protect

them Half Yearly Sample or 100% HO

when not in use? Certification required


9.7 Whether any fixed assets have been written off during the year Half Yearly Sample or 100% HO

Certification required


10 CASH & BANK BALANCES :

10.1 Verification of the Cash balance for all the Monthly 100% HO

bank accounts along with imprest cash and petty cash.

10.2

Verification of gap between fund transfer and Actual

Disbursement Date, income loss due to delay or improper

transfers Monthly On Sample Basis HO

10.3 Whether the cash/bank vouchers and remittance vouchers Monthly On Sample Basis HO

have been authorised for payments by authorised person

10.4 Review of Bank Reconciliation Statements Monthly On Sample Basis HO

10.5 Confirmation of balance from the bank Yearly 100% HO

11 FIXED DEPOSITS

11.1

Physical verification of the Original Fixed deposit certificates,

Fixed Deposit Register and notes against the

renewal/pledging/maturities/transfer to other account or Bank

and verify the updation status. Monthly Sample check HO

11.2 Verify whether bank deposits are held as margin money or Monthly Sample check HO

security deposit against borrowings, guarantee/other

commitments

Furnish full details of such deposits and borrowings

11.3 Fixed deposits matured but not renewed. Furnish full details of Monthly Sample check HO

such deposits


12 LOANS AND ADVANCES (Asset)

12.1

Verify the gap from the Actual Collection Date from the Group to

the Due date of Repayment to the Actual date of deposit into

NABFINS account by BC/customer Monthly Sample Basis HO

12.2

Verify the information/communication received dates, on the

receipt (NABFINS Copy) details , from BC to Distt. Office to HO

and then to compare the time and accuracy of accounting of

these amounts. Monthly Sample Basis HO

12.3

To furnish the overdue account list on the date of verification

and the collection amount bank balance , for which the receipt

details are yet to be received.(BC wise & Distt. wise) Monthly Sample Basis HO

12.4

To verify if any Repayment madeby cheque from the group, if

yes, whether the same gets encashed and if yes whether within

the stipulated due date. Monthly Sample Basis HO

12.5 Examine the delegated utilisation of powers for sanction of loan Monthly Sample Basis HO

12.6 Verification of tally/accounting balance vis-à-vis MIS balance Monthly 100% HO

for no. of outstanding groups/accounts , loan outstanding, PAR

accounts.

12.7 Loan Process Deviations Monthly Sample Basis HO & Field

Any mismatch to be reported.

13 CONTINGENT LIABILITIES AND COMMITMENTS

13.1 Furnish the details of claims against the company not Monthly 100% HO

acknowledged as debt

13.2 Furnish the details of any guarantees issued by the company Monthly 100% HO

13.3 Furnish the details of estimated amount of contracts to be Monthly 100% HO

executed on capital accounts and not proved for

13.4 Furnish the details of uncalled liability on shares and other Monthly 100% HO

investments partly paid


14 REVENUE FROM OPERATIONS

14.1

Verify and ensure the accuracy for the accounting of interest

rate on loans given to groups. Furnish the details of short or

excess interest collected on loans. Monthly Sample Basis HO

14.2

Verify and check whether the Processing Fees, service tax

receivable is properly calculated as per sanctioned terms and as

per policy of the company and accounted on time. Monthly Sample Basis HO

15 OTHER INCOME

15.1

Verify and check whether the interest receivable from Banks on

Fixed Deposits has been property calculated as per deposits

terms and conditions and accounted. Monthly Sample Basis HO

16 EMPLOYEES BENEFITS

16.1

Verify the Recoveries for remittances like Provident Fund,

Income Monthly 100% HO

Tax, Professional Tax & ESI, Gratuity, Leave Encashment, LTC

etc.

17 FINANCE COSTS

17.1 Verify the correctness of interest on loans borrowed as per Monthly 100% HO

sanctions terms and conditions

17.2

Monitoring of bank charges paid for accepting remittance in non

home branches. Monthly Sample Basis HO

18 OTHER EXPENSES

18.1 Income Tax Deductions from Payments as per the provisions Monthly 100% HO

of Chapter XVIII-B have been complied with

18.2 Vouchers for all the financial transactions recorded in the Monthly Sample Basis HO

books of the company. Verify all approvals, sanctions and

payments as per approved policies

18.3 Any penalty payments for infringement of statutory Monthly 100% HO

regulations

18.4 Verify the provision made for Non Performing Assets as per Monthly 100% HO

Guidelines of RBI

18.5 Verify the provision made for Standard Assets as per Monthly 100% HO

Guidelines of RBI


19 ACCOUNTS

19.1

Examine Balancing of Books/accounts : Timeliness, accuracy,

suspense accounts, receivables & payables, accruals etc. Monthly 100% HO

19.2 Examine preparation, accuracy etc. of Monthly trial balance Monthly 100% HO

19.3 Adherance of Accounting process manual Monthly Sample Basis HO

20 OPERATIONS :

20.1Verification of loan files maintained at HO as well as in Field

offices. Field office visit on sample basis. Monthly Sample Basis HO & Field Office

20.2

Verification of overdues and subsequent follow up and reporting

status. Sample Basis HO & Field Office

20.3

Verification of Collection Receipt Book,Process of issue and

Reconciliation(Receipt Books) status at HO. Monthly Sample Basis HO

20.4 Verification of reporting & MIS from DO, BC,SLIs,PTSLP etc. Monthly Sample Basis HO

20.5

Verification of sanction process for staff loan, group loan and

second level institution loans, PTSLP loans and other loans given

by NABFINS. Monthly Sample Basis HO

20.6 Adhrance of Operation manual processes & Loan Policy Monthly Sample Basis HO & Field Office

21 ADMIN :

21.1 Verification of all third party payments like rent, electricity, Monthly Sample Basis HO

mobile bill , telephone bill ,purchases etc. Any delay/deviation

to be reported.

21.2 Verification of updation status of registers like : Monthly Sample Basis HO

Receipt Vouchers

Payment Vouchers

Petty Cash Register

Petty cash vouchers

cash vouchers

Journal Voucher

Insurance Register for staff,BC staff, Asset Insurance etc.

ID Card Register

Staff Loan Register

Attendance Register

Staff Leave Record register

Any delay, improper approval, policy deviation, no updation of

files/records

must be reported.


21.3 Examine Budget versus actual expenditure

21.4 Advances granted to staff and recoveries

If any recovery is not forthcoming please report the same with

reasons there for

21.5

Review of all the advances other than staff advances remains

overdue for more than three months---to be reported with a

detail report Monthly 100% HO

21.6

Adherence status verification-- staff & expenditure

policies/rules and processes Monthly 100% HO

FRAUDS

22 22.1

Any frauds/misappropriation are noticed during the audit. If so

furnish confidential Monthly 100% Any

report to the risk management team.

22.2 Status verification of of fraud and legal reportings

GENERAL

23 23.1

Other points required to be brought to the notice of Risk

Management team. Monthly 100% Any

23.2 Compliance to applicable accounting standards Monthly 100% HO

23.3 Field visit and district/branch office visit Monthly Sample basis Any

23.4 Statutory and Regulatory Compliance status verification Monthly 100% HO

nabard financial services limited...nabard financial services limited, [nabfins], having its...

Documents