Appointment of ASM – Bhagwati Lacto Vegetarian Exports Pvt Ltd withMCB Branch, Ludhiana

Approved for placing to

Committee of General Managers

GM (Corporate Credit)

Name of Dept: CO: CORPORATE CREDIT

Name of the Branch/ Zone Mid Corporate Ludhiana
Note No 2244
Date 31/01/2023
Note to: Committee of General Managers
Purpose: Empanelment of ASM for Account M/s. Bhagwati Lacto
Vegetarian Exports Private Limited with Mid Corporate
Branch, Ludhiana

M/s. Bhagwati Lacto Vegetarian Exports Private Limitedis having CC limit of

Rs.356.00 Crores, Covid loan limit of Rs.2.63 Crores (present o/s), Term Loan of
Rs.30.00 Crores, CEL Limit of Rs.10.60 crore and NFB limit of Rs. 44.00 Crores.

Total existing Exposure of Rs.443.23 crores (FB: Rs.399.23Crores and NFB:

Rs.44.00Crores).

CAC in its meeting dated 25.11.2022, accorded approval for review/renewal of the
existing OCC limit of Rs.356.00 Crores, CEL Limit of Rs.10.60 Crores, Term Loan of
Rs.44.00 crore & COVID of Rs.2.63 Crores (Present Outstanding).

The details of latest position of the accounts as on 21/01/2023is given below:

(Rs in Crores)
Facility AC No. Limit Balance Excess/
Overdue
OCC 50028412875 190.00 185.94 NIL
Ind Covid Loan 58001166103 13.30 2.63 NIL
CEL Limit NA 5.00 - NIL
Term Loan 7242469884 10.00 10.00 NIL
EPC (Gold 50470374397 24.00 24.00 NIL
Card)

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 Appointment of ASM – Bhagwati Lacto Vegetarian Exports Pvt Ltd withMCB Branch, Ludhiana

In line with IBA guidelines based on Ministry of Finance directive to Public Sector Bank
for appointment of agency for specialized monitoring in accounts having exposure of
Rs.250 crores& above from the banking system. Accordingly, the branch has called for
fresh Quotes from the following IBA empanelled Agencies, the details of the same are
as follows:

Sr. Name of the Address of Firms Date of Date of Rate Quote

No Company / Invite Receipt Received
firm send of
quotatio
n
1 M/s Sanjay 81, Sector 33 -A, 17.01.23 19.01.23 Rs.3,72,000
Deep & Chandigarh – /- P.A.
Associates 160020
2 M/s Kamal Opp. Dr. Kiran 27.12.22 27.12.22 Rs.4,00,000
Singla & Sarwal, Street No 8- /- P.A.
Associates A, Bhatti Road,
Bathinda (PUNJAB)-
151001
3 M/s S S 646/A, Malerkotla 27.12.22 27.12.22 Rs.6,00,000
Periwal & House, Civil Lines, /- P.A.
Company Ludhiana, Punjab -
141001
4 M/s Raj 271, Maya Nagar, 27.12.22 27.12.22 Rs.8,00,000
Gupta & Near Gurudwara, /- P.A.
Company Civil Lines,
Ludhiana - 141001,
Punjab
5 M/s V.V. E-64, Rishi Nagar, 27.12.22 27.12.22 Rs.8,50,000
Bhalla & Ludhiana - 141001 /- P.A.
Company

The above quote excluded all applicable taxes.

As per above table, M/s Sanjay Deep & Associates & M/s Kamal Singla &
Associates are the L1 & L2 bidder.

SL.No. Guidelines Compliance to the guidelines

01 It is to be ensured that the ASM to None of the above-mentioned firms
be selected for a particular have been engaged by our branch in
assignment shall not be engaged different capacity.
at a branch where they are / have
been engaged in different

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Appointment of ASM – Bhagwati Lacto Vegetarian Exports Pvt Ltd withMCB Branch, Ludhiana

capacity.
02 As per IBA, the points to be seen while allotting the work:

 Experience in the field of Audit (Central/ Statutory/ Concurrent/

Stock and Receivables/ Forensic) and other areas (Technical
Evaluation, Project Monitoring)
M/s Sanjay Deep & Associates having experience of 23 years in
different fields such as Concurrent Audits, Revenue Audits, Expenditure
Audits, Statutory Audits of Branches of Public Sector Banks. The Firm is
already empanelled with IBA (Indian Banking Association) for Forensic
Audit vide IBA dated 21.08.2021, the firm is having 8 forensic auditors 5
Anti Money Laundering Specialists and 4 Certified DISA Auditors by ICAI
and 5 ICAI Certified Concurrent Auditor.

M/s Kamal Singla & Associates having experience of 12 years in

different fields such as Concurrent Audits, Revenue Audits,
Expenditure Audits, Statutory Audits of Branches of Public Sector Banks.
Further they had also Conducted Internal Audits, Statutory Audits,
Management Audits, Conducting Quality Systems Audits as per 9001-04
Quality Standards and arranging Quality Certification. The main Partner
of our Firm is having more than 20 Years of Experience in various types
of Bank Audits and well as Internal and Statutory Audits. The firm is
empanelled with IBA for ASM. The firm has one ex banker as employee
who has served as AGM in Punjab National Bank.

M/s S S Periwal and Company having experience of 49 years in

different fields such as Concurrent Audits, Revenue Audits,
Expenditure Audits, Statutory Audits of Branches of Public Sector Banks.
Empanelled as Agency for Special Monitoring (ASM), Sr. No. 62
(Including Specialized Sectors of Iron & Steel, Power, NBFC, Real Estate
and Textiles), Empanelled as Forensic Auditors for borrowal accounts
having exposure of above Rs. 50.00 Crores (Sr. No. 142), Empanelled as
Forensic Auditor for borrowal accounts having exposure up to Rs. 50.00
Crores (Sr. No. 167), Empanelled as Special Auditors with Ministry of
Corporate Affairs vide letter dated November 12, 2020, Empanelled as
Statutory Auditor/ Additional Auditor/ Concurrent Auditor of NHAI vide
circular no. NHAI/F&A/BOT/CA/11019/27/e-38158 dated 14-03-2022 (Sr.
No. 81), Empanelled as Auditors for audit and special audit of PF
Trusts/establishment and taxation matters and Empanelled as Forensic
Auditors vide letter dated January 16, 2023. The firm has 9 offices across
India and 11 partners and 5 full time qualified chartered account as
employees. Further the firm has 31 articles and 23 other staff members.

Currently the firm is already doing ASM of borrower from last three
years. We are getting reports timely and the quality of the report is
also good as accepted by all the consortium members.

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Appointment of ASM – Bhagwati Lacto Vegetarian Exports Pvt Ltd withMCB Branch, Ludhiana

M/s Raj Gupta and company having experience of 46 years in different

fields such as Concurrent Audits, Revenue Audits, Expenditure Audits,
Statutory Audits of Branches of Public Sector Banks. The firm is
registered with CAG, empanelled with Income Tax Department,
Chandigarh for Special Audits, empanelled with Income Tax Department,
Amritsar for Special Audits, empanelled with Haryana Real Estate
Regulatory Authority for Forensic Audit/Inquiry/ Special Audit, one of our
Partner Mr. Sandeep Gupta is the member of Office of the Chief
Commissioner Goods and Service Tax Zone, Chandigarh, empaneled
with Employees provident Fund, Ludhiana and empanelled with IBA for
Forensic Audit having Exposure Rs 50.00 Crores and above.

M/s V V Bhalla and company having experience of 41 years in different

fields such as Concurrent Audits, Revenue Audits, Expenditure Audits,
Statutory Audits of Branches of Public Sector Banks. The firm was set up
in the year 1981 by our managing partner Mr. V.V. Bhalla to service
clients, primarily in the field of audit and taxation. The firm presently has
nine working partners and a 30 members team. The firm is offerings its
services include Assurance, Risk Advisory, Tax Advisory and Corporate
Advisory. Our clients include public and private companies and cover a
broad spectrum of industries ranging from Textiles, Construction, Steel,
Engineering, Information Technology, Retail, Commodities,
Telecommunication, Healthcare, Insurance, Hospitality, Education,
Entertainment, Chemicals, Cooperative Societies and NBFCs.

 Whether on the list of empanelled list say, of Government/ RBI/

IBA/ others

Yes, all the Firms are Empanelled in the List of IBA.

 Experience
M/s Kamal Singla & Associates–Overall 12 Years
M/s S S Periwal & Co - Overall 49 years
M/s Raj Gupta & Company - Overall 46 years
M/s V V Bhalla & Company - Overall 41 years
M/s Sanjay Deep & Associates- Overall 23 years

Number of Partners/ directors and the additional expertise of the

firm/ company.
M/s Kamal Singla & M/s S S Periwal & M/s Raj Gupta &
Associates Company Company
Partners - 3 Partners – 11 Partners - 11
Qualified CA – 1 Qualified CA – 5 Qualified CA – 1
Ex-Banker - 1 Other Staff-54 Other Staff-15
Other Staff-7

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 Appointment of ASM – Bhagwati Lacto Vegetarian Exports Pvt Ltd withMCB Branch, Ludhiana

M/s V V Bhalla & M/s Sanjay Deep & Associates

Company Partners - 10
Partners - 9 Qualified CA - 2
Qualified CA – 1 Other Staff - 31
Other Staff-34

The year of establishment/ incorporation

M/s Kamal Singla & Associates– 2010
M/s S S Periwal & Company - 1973
M/s Raj Gupta & Company - 1976
M/s V V Bhalla & Company - 1981
M/s Sanjay Deep & Associates- 1999
 Profile of ASM to include CAs, Engineers with necessary domain
knowledge, ex-bankers either on retainer ship or employee basis
or as partners.
All the firms have Team of CA’s with considerable Experience in field of
Audit and domain knowledge.
03 The fee for engagement shall vary Fees quoted by the firms is as per the table
on a case-to-case basis below (Excluding GST and OPE):
depending upon the following:
Name of Fees Frequency
 Nature of Activity of borrower the firm Quoted of
firm/ company (Annually) Reporting
M/s Sanjay Rs.3,72,00 Quarterly
Deep & 0/-
Associates
M/s Kamal Rs.4,00,00 Quarterly
Singla & 0/-
Associates
M/s S S Rs.6,00,00 Quarterly
Periwal & 0/-
Company
M/s Raj Rs.8,00,00 Quarterly
Gupta & 0/-
Company
M/s V V Rs.8,50,00 Quarterly
Bhalla & 0/-
 Total funding to the firm/ Company
company
Rs.443.23 crore
 Number of locations of the
units of the firm/ company and Only one which is a Ferozepur,
their places Punjab

04 Other points:
 Engagement of ASM shall This note is for approval of appointment of

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 Appointment of ASM – Bhagwati Lacto Vegetarian Exports Pvt Ltd withMCB Branch, Ludhiana

be account specific to be the Agencies for Specialized Monitoring by

approved by the Committee of General Managers.
Committee.
Quotations have been taken from 5 firms
 Quote shall be called from which are empanelled with IBA as ASM and
at least 3 empanelled ASM all of them have submitted the quotes.
for an account for deciding
allotment of ASM. As far
as possible, the lowest of
the 3 quotations shall be
finalized, unless
justification for engaging a
higher quotation is given Already discussed.
specifically.

 The allotment may be

discussed in the
consortium meeting in case
of consortium where we
are the leader and scope of Stipulated as a condition.
work may be enlarged/
fine-tuned if found
necessary.
Stipulated as a condition.
 The fee for the ASM shall
be recovered from the
borrower customer along
with GST.

 The engagement of ASM

shall be for a period of one Stipulated as a condition.
year or till completion of
the project (till COD) as the
case may be and will be
subject to review
thereafter.

 In case the performance of

the ASM is not found to be
satisfactory, the Bank can
at any time terminate their
services.

As per the Revised Guideline of IBA - Operational Procedure related to

Appointment of Job of Monitoring and Supervision work to ASM at Bank level
dated 11.02.2021, the compliance to the framework is as below;

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 Appointment of ASM – Bhagwati Lacto Vegetarian Exports Pvt Ltd withMCB Branch, Ludhiana

Sr. No Guideline under Framework Compliance

1. While assigning the job of Specialised Yes, The same is given below.
monitoring to ASMs, member banks
may assign 70% weightage for technical
capability / competence and 30%
weightage may be assigned for financial
quotations.
While assessing Technical capability,
due importance may be given to
activities of ASM covering areas of
Project monitoring / Technical
evaluation / Sector specialization in
various industries, availability of
experienced persons in various
industries, outreach of branches or
locations can be given weightage.
2. Indicative Remuneration - Remuneration The Quotes submitted by the 5
may be fixed based on complexities of Agencies are within the stipulated range
assignment like multiple location of of total credit limit / exposure to the
units, terrains, size of undertaking, company.
complex nature of products, monitoring Hence Complied
period and IRAC status of a/c etc.
However, it is suggested that fee may
be fixed in a range of 0.05% to 0.1% of
total limits / exposure.
3. Number of assignments to be to be As per the Quotes submitted by the
allowed to an ASM shall be based on Agencies they are having anadequate
their size, capacity, expertise and experience, adequate staff with
geographical locations. experience and Offices are present in
requisite geographical locations.
Hence Complied.

Recommendations:

On the basis of above, we hereby request you to appoint ASM in M/s Bhagwati Lacto
Vegetarian Exports Private Limited for 3 years subject to review annually.

The following are the proposed terms and conditions:

1. The present assignment is for monitoring of limits availed by the Company.

2. The firm shall carry out the work as per indicative list of IBA and shall ensure monitoring
of terms as per sanction.

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 Appointment of ASM – Bhagwati Lacto Vegetarian Exports Pvt Ltd withMCB Branch, Ludhiana

3. The appointment shall be intimated to the borrower company M/s Bhagwati Lacto
Vegetarian Exports Private Limited (Fees payable to the ASM shall be recovered from
Company).
4. The ASM selected for a particular assignment shall not be engaged at a branch where
they are / have been engaged in different capacity.
5. Quarterly ASM report to be submitted to the branch within 10 days of completion of
respective quarter which will be forwarded to Corporate Office with the rectification report
of Branch.
6. Bank reserves the right to terminate the contract without assigning any specific reason
after giving a month’s notice and consent for the same shall be obtained from the ASM.
7. The engagement of ASM shall be for a period of 3 year and will be subject to review
annually.

8. Scope of work is as under:

Scope of Work:
SPECIALIZED MONITORING OF WORKING CAPITAL

Specialized Monitoring Report on the Financial Status of the Company

A. Monitoring Report on Working Capital – Coverage

 Monitor the purchases/invoices of the company (about quantum and reasonableness
of the rates) for procurement of raw material / spares/ transportation of raw material
etc. on daily/weekly basis and compare vis-a-vis monthly operation budget
submitted by the company. Periodicity would be decided by Consortium.
 Review of inventory buildup (including trade receivables and advances to the
Company) for operation of the units commensurate with funds released.
 To monitor the actual operations (production / supplies etc.) vis-a-vis projections.
 Verification of high value transaction/ payment as regards beneficiary and purpose.
 Assessment of financial information that has been and that will be provided by the
company to its lenders including information related to its short term and long
term cash flows.
 Identify key issues and submit the report along with the suggestions with regard to
smooth operations of the project.
 Additional verification of evidence of end use of facilities to company and its
utilization as per the conditions lay down by the consortium of lenders.
 Inspection/verification of stocks/book debts and submission of monthly report (or
as stipulated by Lenders) about the inventory/ receivables position of the company
including slow moving inventory if any, to arrive at correct drawing power to the
company.
 Submit reports at regular intervals (say at quarterly interval or as stipulated by the
Member Bank) on:
a) Temporary /long term/unscheduled closure of manufacture facilities;
b) Any untoward incident or suspicious business or unrelated activity;
c) Non-cooperation from borrower to provide general information.

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 Appointment of ASM – Bhagwati Lacto Vegetarian Exports Pvt Ltd withMCB Branch, Ludhiana

 Source of margin towards working capital/LC/BG.

 Quality of Book Debt, their appropriateness, age wise classification and eligible
Book Debts for Drawing Power.
 In case of consortium lending, ASM will monitor status of borrowing with member
bank, conduct of accounts, business sharing etc.
 Confirmation on availability of adequate insurance for the Securities/ Stocks/
Assets with Bank clause noted.
 Perform such other services as requested by the lenders and mutually agreed to by
the party and lenders.

B. General parameters for monitoring:

Cash inflow monitoring:

 Sources of cash inflow based on estimates/ projections.

 Source of unsecured loan / NCD, its tenor and rate of interest, if any / sale of fixed
assets/ investments, interest /dividend received from investment.
 Profit ploughed back and any windfall/exceptional cash inflow e.g. profit from
sale of fixed assets, tax refunds etc.
 Sources of margin, whether it is through borrowing or through capital infusion and is
brought as per sanction stipulation.
 Monitoring of the payment transactions to/ realizations from the group companies.
Cash outflow monitoring:

 Utilization in inventory buildup/ acquisition of fixed assets/ purchase-invoices of the

company (about quantum and reasonableness of rates) for procurement of raw
material/ spares/ transportation of raw material etc. on daily/ weekly basis and
compare vis-a-vis monthly operation budget submitted by the company.
 Utilization in creditors’ repayment/ repayment of term borrowing/ Loans and
advances to other firms.
 Capital drawings, if any / interest/ dividend payouts / redemption of debentures,
if any / shares buy back, if any.
 Inter corporate transactions and / or related party transactions.
 Timely and full payment of Government / statutory due / analysis of any other
kind of outflow, if observed.

Fund flow Analysis:

 To highlight on diversion of short-term funds in long term uses.

C. Report on Non-Cash Parameters (Quarterly)

 Report on Industry Trends/ Competitors Profile & market share, Government

Policy/Global Policy, Cyclical Changes, Sustainability in business etc.
 High value vendor due diligence, market values vis-a-vis invoice price.
 Technological obsolescence and substitution measures.

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 Appointment of ASM – Bhagwati Lacto Vegetarian Exports Pvt Ltd withMCB Branch, Ludhiana

 Industry experts should also be involved while conducting stock audit in sectors
where raw material/finished goods are of technical nature.
 Report on any Legal Cases & Litigation by the company & against the company.

Senior Manager Chief Manager Asst. General Manager

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