Due Dligence Checklist(1) - IPO

IPO DUE DELIGENCE CHECKLIST

Subject

Corporate Records

Branches

Incorporation

Existing Shareholders Arrangements

Structure of the Company

Management Structure and Employees

General Information

Compliance with corporate governance

Organisational Structure and Human Resources

Employment Benefits

Proof of registration on Labour Laws

Corporate profile/ history of the Company:

Competition:

Licenses & Permits

Details of the investment made by the Company in any joint venture/ acquisition

Key milestones in the history of the Company

Other Licenses

Owned or Belonging to the Company

License Arrangements

Infringement

Immovable Property

Movable Property

Bank Accounts

Protection of Intellectual Property

Loans and other Credit Facilities

Security Created

Guarantees

Unsecured Loans

Default and Other Information

Joint Venture, Partnership or Other Arrangements

Acquisition, Divestment or Investment

Standard Forms and Warranties

Commercial Agreements

Other Agreements

Claims or Disputes

Orders Passed

Pending or Threatened Litigation

Industry Overview

Promoters

Management Discussion and Analysis based on the restated accounts prepared by the auditors:


Particulars

(2) Annual reports for last five years.(3) Copies of internal audit reports of the Company for last five years.

(6) All power of attorneys that are currently valid or were valid in the last 12 months.(7) Copies of all filings made with the RoC in last five years. (1) List of all branch and other offices of the Company with complete addresses. (2) Organisational structure of such branch and other offices.

(3) Details of the shareholders/promoters who exercise control over the Company.

(5) Share premium account of the Company (before and after the Issue).

(1) Certification of Incorporation of the Company.(2) Memorandum of Association and Articles of Association of the Company, including all recent amendments thereto.(3) Change, if any, in the name or registered office of the company along with relevant resolutions and Registrar of Companies (“ROC” hereinafter) filings. (4) Change in the status of the company, if any, viz from private to public or vice versa. If yes, the appropriate RoC filing. (1) Minutes of the meetings of the shareholders, board of directors and committees of the board of directors for last five years, including all resolutions authorising the Offering.

(4) All statutory books & records required to be maintained by the Company including without limitation to the Register of members, register of share transfer, registers of charges and registers of debenture holders, Register of contracts, companies and firms in which directors are interested if any.

(5) Copy of the board resolution and resolution of members of the Company passed under section 81(1A) of the Companies Act, 1956 authorising the initial public offering (“Issue”).

Joint venture, shareholders, subscription, investment or venture capital or any other agreements with or between shareholders of the Company including any agreement for purchase of securities, stock of the Company.

(1) Details of the share capital of the Company including details pertaining to number of issued equity shares, authorised capital, preference shares and other convertible instruments, alterations in the share capital.

(2) Details of ownership of Company’s share capital, including a break up of the promoters’ shareholding in the Company and the shareholding of any NRI/OCB/FII.

(4) Details of any liens, charges, pledges or encumbrances on the shares of the Company.

(6) Share capital history of the Company covering details such as date of allotment, number of shares, face value of shares issued, issue price, nature of payment (cash or otherwise), reasons for allotment and cumulative share premium supporting filings made with the Registrar of Companies.

(7) General meeting resolution for increasing the authorised capital, if any and a copy of intimation of the same to the ROC.(8) Details of aggregate number of securities purchased or sold by the promoters and the company in the last 6 months. (9) List of top ten shareholders of the Company (as on the date of filing the Draft Red Herring Prospectus, 10 days prior and 2 years prior to filing the Draft Red Herring Prospectus).(10) Has the Company capitalised its reserves in the past? If yes, give details (Date of AGM/ EGM approving the issue, number of shares issued and whether issued out of free reserves or revaluation reserves and give copies of important documents in this regard.

(11) Has the Company issued shares otherwise than for cash in the past? If yes, give details (date of AGM/ EGM approving the issue, number of shares issued and whether issued out of free reserves or revaluation reserves and give copies of important documents in this regard).

(13) Details of any pending convertible instrument, warrants, options etc.(14) Details of any restriction on dividends, whether under regulation or contractual arrangement.

(The above details to be given for a period of 5 years preceding the date of filing the DRHP)

(9)Copies of form 32 filed with the ROC.

(2)Name address, telephone number, fax number and e-mail of the bankers of the Company. (3)Name address, telephone number, fax number and e-mail of the compliance officer of the Company.

(4)Credit rating, if any obtained during the last one year by the Company.

(12) Details of any buy-back and/or standby arrangements for purchase of equity shares of the Company.

(1) Details of the composition of the board of directors including appointment resolutions, brief details of the directors such as their age, fathers’ name, address, their previous experience, relevant academic and professional qualifications, director’s identification number and directorships in other companies.

(2) Details of current and past directorship(s) in listed companies whose shares have been/ were suspended from being traded on the BSE/ NSE, as follows:o Name of the company;o Name of the stock exchange where it is listed;o Date of suspension on the stock exchanges;o Suspended more than three months: Yes/ No – If yes, then reasons for and period of suspensiono Whether suspension revoked: Yes/ No – If yes, date of revocation of suspensiono Term (along with relevant dates) of director in the above companies

(3) Details of current and past directorship(s) in listed companies which have been/ were delisted from the stock exchange(s), as follows:o Name of the company;o Name of the stock exchange where it is listed;o Date of delisting on the stock exchanges;o Compulsory or voluntary delisting;o Reasons for delisting;o Whether relisted: Yes/No. If yes, date of relisting and name of stock exchange on which relistedo Term (along with relevant dates) of director in the above companies(4) Copies of resolutions regarding appointment, terms and conditions thereof and service agreements in respect of the managing/whole time directors. (5) Details of the interest of the directors and promoters in the transactions of the Company. (6) Details of the senior management of the Company including age, designation and academic qualifications.(7) Composition, dates of constitution and terms of reference of all committees of the board of directors.

(8) Change in the board of directors in last three years with reasons for appointment and resignation.

(10) Date of expiration of the terms of the current directors.(11) Any service contract with directors.(12) Remuneration details for executive directors for last fiscal and details of sitting fees paid to directors.(13) Details of interest of the directors and promoters of the company in any property acquired by the Company in last 2 years.(14) Any family relationship amongst the directors of the Company. (15) Share ownership of the directors in the Company.(1)Name, address, telephone number, fax number and e-mail of the company secretary of the Company.

Members and summary of terms of reference of the following committees:

(1) Audit committee(2) Remuneration committee(3) Shareholders’ / Investors’ grievance committee

(4) Employment, management or other personal service agreements to which the Company is a party.

(7) Confirmation that all key managerial personnel are permanent employees of the Company.

(9) Any family relationship amongst the key managerial personnel.

(12) Share ownership of the key managerial personnel.

(14) Copies of the employment contracts of the key managerial personnel.(15) Details of all transactions between the Company and the key managerial employees.

Further, in the event the Company has in place any other organisational committee, kindly provide the members and summary of terms of reference of the same. Organisational structure of the Company indicating the functional responsibilities, titles and names of key managerial personnel.

(2) The following information should be disclosed with respect to the Company’s directors and key managerial personnel:a) Name, business experience, functions and areas of experience in the Company, responsibility in the Company, date of joining the company and experience before joining the Company;b) The nature of family relationship between any of the persons named under this head;c) During the last fiscal year, the amount of compensation paid and benefit in kind granted to persons mentioned under this head, by the Company for services in all capacities to the Company. The disclosure of compensation should be on individual basis and the disclosure should also cover contingent or deferred compensation accrued for the year, event if the compensation is payable at a later date; and

d) If any portion of the compensation was paid pursuant to a bonus or profit sharing plan, provide a brief description of the plan and the basis upon which such person persons participate in the plan. (3) Arrangement with employees including employment contracts/ appointment letters, amendments to employment contracts/appointment letters, human resource policies and procedures of the Company.

(5) Agreements which limit the freedom of the Company or “key” employees or its directors to engage in any line of business or to compete with any other person or entity.(6) Change in the key managerial personnel of the Company in last three years along with the date of change and reason for change such as resignation, appointment, promotion etc.

(8) The average employee turnover for the last year. Please state whether it is higher than the industry standards.

(10) Any bonus or profit sharing plan for key managerial personnel.(11) Details of an employee stock option plan/scheme, if any, with a copy of the scheme/plan.

(13) Details of total number of employee engaged by the Company. If the Company has different divisions/branches, please provide the details of each such branch/division.

(16) Detailed break up of the number of (a) permanent employees (b) temporary employees and (c) retainers along with department-wise break of employees;Employment benefit plans, like provident fund, gratuity, leave encashment, employee state insurance, life insurance and other benefit & incentive schemes, bonus plans offered to all categories of employees.

(2) Details of stock option scheme and any other scheme for employees participation in management or profits of the Company.

(4) Reports on existing or proposed pension, gratuity or other employee benefit plans.

(1) Number of workmen, in various categories including temporary and, or, probationary.(2) Terms of employment.(3) Retrenchment benefits and retirement schemes for labour and employees.(4) Last salary/wage reviews and current position.

(1)Details of ‘contract labour’ engaged by the Company.(2)List of contractors.

(4)Agreement with the contractor along with details of compliances by the contractor (license).(5)Any past disputes, issues in respect of contract labour and anything threatened in this regard.

(2)Registration details.(3) Details of any material labour dispute, arbitration. (4) Collective bargaining arrangements or any other wage settlement agreements etc.(3)Disputes/claims/cases, any strikes or lockouts.

(1) Details of termination, dismissal and resignation of employees in the last six (6) months.(2) Claims made by employees or ex-employees on the Company after cessation of employment.

(4) Any liabilities on the Company arising from termination, dismissal and resignation of employees.

(3) Agreements, commitments or loans between the Company and any of the shareholders, officers, directors or employees of the Company or any affiliate or relative of any such shareholder, officer, director or employee.

C. Workmen

D. Contract Labour

(3)Details of the compliances by the Company (registration, applications made for seeking registration, maintenance of statutory registers, filing of returns).

E. Trade Unions(1)Details of trade unions including recognised trade unions and other trade unions, membership and political affiliations.

F. Termination, Dismissal & Resignation of Employees

(3) Claims made by the Company on such terminated, dismissed or resigned employee, equal opportunity and harassment, or occupational health and safety or any settlement for agreements and copies of any awards of any judicial tribunal.

(5) Details of all claims/disputes relating to consultants, or ex-consultants which have been made against a Company within the last 5 years, including claims relating to termination of employment or service, equal opportunity and harassment, or occupational health and safety or any settlement for agreements entered into with employee unions and copies of any awards of any judicial tribunal.

Proof of registration and compliance by the Company with statutory requirements under labour laws in relation to employees, including payment of gratuity, provident funds, superannuation, employee state insurance obligations etc.

(1) Indicate briefly the various landmark developments, various “firsts” of the company in previous years, since incorporation of the Company. If there has been a change in the name of the Company, giving reason for the same.

(2) The existing business of the Company and the names of various companies, with which the Company has had dealings in the past, including any litigations with such companies.(3) Trace the various stages in the increase in the activities of the Company, since incorporation, i.e. increase in the volume of business over the various years, capital/ facility creation. Also trace the growth of the Company, in terms of new markets and also indicate the growth in the business of the competitors during the same period. Details of capital raised by the Company in the past (i.e. in the form of equity or debt), details of time / cost overrun in setting up projects including the proposed project. Major milestones achieved.

The Company’s competitive strengths and weaknesses.

The threats and opportunities that the Company foresees.

Strategy plan of the Company over the next three years.

Details of any scheme of amalgamation of the Company.Description of Company’s offering across industry verticals and service capabilities.Overview of all new business areas or services that the Company plans to enter in the next three years.

Provide an overview of the marketing structure for the organization.The Company’s strategy for customer acquisition, brand building, pricing etc.

Key milestones in the history of the Company

(1)Industrial Development and Regulation Act;

(4) Disclose the changes in the activities of the Company in the last 5 years, which may have had a material effect on the profit/loss (illustrative material changes could be discontinuance of lines of business, loss of agencies or markets and introduction of new business lines).

Discuss in detail the strategy of the Company to grow its businesses and the initiatives being taken by the Company to implement its plans, including any strategic investments or acquisitions.

Where does the management foresee growth in the business – what are the steps planned to capture the growth potential? What are the financing plans for achieving this growth?

Description of all critical functional areas of the Company including business development, sales and marketing, operations, project management and engagement model, quality, human resources, delivery infrastructure, corporate development and finances etc.

Details of Company’s clients across geographies, industry verticals, service offerings etc., including identification of potential client concentration risks, pricing differentials between clients etc.Details of any intra-group agreements including any indemnities or guarantees given to or for the benefit of or by other group/associate company.

(1) Overview of the transaction, parties involved, timing, investment amount and stake, form of consideration, schedule of payment of consideration.

(2) Rationale for the acquisition/ investment and the benefits that have accrued and are expected to accrue to the Company from the investment.(3) Copies of the shareholder agreements and any other memorandum of understanding/agreement entered into for the purpose.(4) Details of the form of investment - equity/ debt/ any other instrument.(5) If the investment is in the form of debt, details of whether the debt is secured or not, the rate of interest and other information as required.(6) If the investment is in the form of equity, indicate whether the dividends are assured or not. The precise benefit accruing to the investor company should be brought out, along with the financial estimates for the ensuing year should indicate return out of investment separately. If the return has not been taken into account, a negative statement should be incorporated in the offer document.

(1) Who are the Company’s key competitors in each industry vertical and service offering? (2) How has the competitive landscape changed in the last three years?(3) What are the expectations for changes to the competitive environment over the next three years?

(4) How does competitor’s business model differ from the Company’s?

Copies of all consents, approvals, licenses, registrations, no objections, clearances and permits obtained by the Company from the relevant regulatory authorities, for carrying out the business and operations of the Company and the current status of the same including but not limited to:

(2)Factories Act;(3)Works Contracts Act, 1985;(4)Sales Tax registration (Central and State);(5)Reserve Bank of India;(6)Income Tax Act;(7)Society registration Act;(8)Ministry of Finance (including with respect to external commercial borrowings); (9)Ministry of Information and Broadcasting;

(3)Details of patent or patent claims in the circuit or other part of the inverters.

(10) Foreign Investment Promotion Board;(11) Central Excise Act, 1944; (12) Any other government or private agency;(13) Any application made to any authority seeking any type of exemption; (14) Shops and Establishment Act of the respective states where branches of company are located;

(15) Any local municipal acts and regulations;(16) Contract Labour (Regulation & Abolition) Act, 1970; (17) Industrial Disputes Act, 1947;(18) Indian Telegraph Act, 1885;(19) Telecom Regulatory Authority of India, 1997;(20) Technical Approvals;(21) Department of Telecom, Ministry of Communications and Information Technology; and(22) Any other Act, regulations, norms, guidelines as may be specifically applicable on any of the specialised activities undertaken by the Company including but not limited to internet broadband services.

B. Other Licensesa) What are the various licenses that the Company has applied for/ will be applying for in the future for its businesses?b) Details of backward area classification, if any. Additionally, details of any special tax (including income, sales, customs, excise or stamp duty) benefits enjoyed by the Company.c) Copies of all documentation relating to government or other grants received by the Company, and whether any part of the grant is liable to be withdrawn.d) Information as to the validity, termination or amendment of any licences, permits or authorizations.

e) Any violations or possible violations by the Company of any licences, permits, authorisations, laws, regulations or contracts including but not limited to any notices received from RBI, FIPB, TRAI, Department of Telecommunications or any other regulatory authority.

(1)List of all registered and unregistered intellectual property rights, including Trade Marks, Service Marks, Trade Names, Copyrights, Patents, Designs and other similar or intangible rights owned or which belong to the Company or which are used by the Company on in which the Company has any right, title or interest.

(2)Details of applications filed or registrations obtained in India and abroad regarding such intellectual property right ownership, license or other usage.

(4)List of all Company owned or licensed domain name registrations for all active and inactive websites, if any.Details of all agreements whereby the Company has licensed its intellectual property rights to third parties, including without limitation, forms of any license agreements used by the Company.(2) Details of patents, trademarks, service marks and copyrighted materials or other intellectual property rights, which the Company has licensed from a third party.

(3)Details of mortgage and charges (along with satisfaction thereof including RoC filings)(4)Copies of any valuation reports

(3)Particulars and description of hardware software used by the Company.(4)Copies of valuation reports, if available.

(2) Copy of the sanction letter and all other loan documentation in this regard.(3) Arrangements of convertibility of loan into stock or other securities of the Company.

(3) List of individuals or entities whose work were or is incorporated into any products or services currently or previously licensed, marketed, or otherwise distributed by the Company, which list specifies whether such individual or entity is or was an employee or independent contractor at the time of contribution to the product or service. For independent contractors, provide the written agreement relating to such work.

(4) Agreements and material documents relating to intellectual property to which the Company is a party or under which the Company is a beneficiary.Communication from third parties relating to the validity or infringement of the Company’s patent, trade name, trade marks, copy rights and other intangible assets including software and other system.

(2) Details of any pending or threatened claims, disputes, or litigation involving the Company in regard to any intellectual property whether brought by or against the Company.(3) Details all claims, disputes or opposition from any person or entity against the Company, its promoters or from the Company, its promoters against any third party in respect of intellectual property rights belonging to or used by the Company.

(4) Details of any confidential information or know-how belonging to or used by the Company and shared with third parties and vice versa.Copies of any nondisclosure agreements and non-competition agreements entered into by the Company, and copies of internal policies and procedures regarding access to and use of confidential information.

(2) Copies of any development (including joint development), research and development, or cooperation agreements entered into by the Company. This should include any joint partnerships entered by or with the Company for the development of intellectual property and whether or not the rights to that intellectual property are transferable.

(3) All agreements whereby the Company released any circuit, source code to another party or has received or may in the future receive any source code from another party including source code licenses and source code escrow agreements (i.e. under which Company code is subject to escrow or under which Company has conditional rights to third party code in escrow).

(1)Details of all freehold properties owned by the Company giving the address, description, approximate area, copies of documents of title and details of registration of charge.(2)Details of all leasehold properties of the Company along with the relevant documents including but not limited to lease agreement, leave and licence agreements and rent agreements.

(1)Particulars and details of all movable property and current assets of the Company along with confirmation to the effect that the Company is the sole and absolute owner of all the movable property (subject to the hypothecation agreement executed between the Company and its bankers )

(2)Charges and encumbrances on movable assets along with registration under the Companies Act, 1956

List of bank accounts of the Company and details regarding the operations of the same (including but not limited to the authorized signatories for each bank account).Loan, letter of credit, bill discounting, indentures, receivables or inventory financing arrangements, promissory notes, sale and leasebacks, industrial revenue or development bond financings and other credit facilities obtained by the Company including details of the lenders, amount of loan and other terms.

(4) Other inter corporate loans, deposits/short term borrowings taken and, or, given by the Company.

(6) Details of all unsecured indebtedness of the Company.

(2)Copy of security arrangements, including security documentation.

(2)Waiver of interest or penalties and the like. (3)Copy of certificate of satisfaction of charges, if any.

(2) Customs/excise and other Guarantees/Bonds to Government Authorities.(1)Details of all unsecured loans and material terms of such unsecured loans; and(2)Details of any other unsecured indebtedness of the Company.

(1)Standard forms of agreements.

(2)Copies of all insurance services agreements entered into by the Company.

(5) Debentures and like securities issues by the Company in respect of any loan or other credit facilities of the Company. Details of any trustee arrangements in relation to such issuance of debentures/bonds and material events of default.

(1)Securities created by the Company over its assets or other intellectual property of the Company including, creation of charge, lien, mortgage, hypothecation arrangement, registered or unregistered.

(3)List of lenders, financial institutions who have to be informed or whose consents are required prior to the transaction.(1)Communication, correspondence regarding defaults, potential defaults or waivers of defaults under various loan and other credit facilities arrangements, if any, including any past defaults.

(1) Details and copy of guarantees, undertakings and other similar commitments issued by the Company or issued on behalf of the Company.

Agreements between the Company and any of its shareholders, including agreements between the promoters of the Company and any other person in respect of management of and, or, shareholding of the Company.

(2) Other agreements, documents or information including agreement with clients, suppliers or vendors and license agreements, confidentiality agreements etc which, in the judgement of the Company, are significant with respect to the business or operations of the Company.

(3) Details of all negotiations relating to any commercial or joint ventures involving the Company or any collaborations.(4) Details of any technical/marketing/financial collaborations/tie-ups. Detailed disclosures about the flow between clients, group concerns with the Company. (5) Details of any inter group agreements including any indemnities or guarantees given to or for the benefit of or by other group/associate company. Acquisition or divestment documentation (including purchase agreements and plans to merger, reorganisation or consolidation) relating to any pending or completed acquisitions or divestment by the Company.

(2) Purchase or lease agreements or commitments which require the Company to make any future capital expenditure or commitment for property or equipment at the Company.(3) Agreements by which the Company is subject to any obligation or requirement to provide or make, or under which the Company is currently providing or making, any funds to or any investment (in the form of a loan, capital contribution or otherwise) to any person or entity.

(2)Warranty agreements currently in force. With respect to warranties which provide a guarantee by Company, description of experience with guarantee claims.(1)Copies of all commercial agreements entered into by the Company, including but not limited to the services agreements providing a summary of the foregoing including information with respect to term and termination (i.e. upon notice, minimum payment) and any exclusivity arrangements.

(5)List and briefly describe all oral agreements and arrangements entered into by the Company.

(2) Management service agreements and consulting agreements.(3) Any sub-contracts.

(2)Any current or past investigations involving the Company by any regulatory authority.

Details of all cases filed by the Company against third parties.

(1)Public liability insurance;(2)Product Liability insurance;(3)Directors and officers liability insurance; (4)Keyman insurance; and(5)Professional indemnity insurance.

(6)Public liability insurance;(7)Product Liability insurance;(8)Directors and officers liability insurance;

(3)List of all significant suppliers of the Company with an indication of the amount paid to each such supplier and an estimated number of alternative suppliers. Copies of all contracts entered into by the Company with any suppliers.

(4)List and briefly describe all agreements and arrangements with dealers, sales agents, franchisees, distributors or representatives.

Confidentiality and, or, non competition agreements to which the Company or employees or customers is a party.

(4) Any powers of attorney issued by the Company or agency contracts conferring authority on an agent.(5) Details of all related party transactions, including but not limited to intra-group loans, guarantees, letters of comfort, production and/or supply agreements.(1)List and summary of pending or threatened litigation, arbitration or investigation against, by or involving the Company, the promoters of the Company, the directors of the Company and the ‘group companies’ before any court, forum, tribunal, department or any other judicial or quasi-judicial regulatory or administrative body, whether in India or outside, and potential liability of claims pursuant to such litigation in and outside India.

(3)Details of any undertaking given by the Company to any Court or any third party arising out of any past legal proceedings.(4)List and copies of show cause notices or other notices received by the Company from regulatory authorities or third parties.(1)Claims/disputes against, by or involving the Company, including customer, consumer complaints, if any. (2)Any legal notice or other correspondence or intimation relating to any violation or infringement by the Company involving its business operations. (3)Details of any undertaking given by the Company to any Court or any third party arising out of any legal proceedings.(1) Decree injunctions, settlement, judgements or order passed by the Courts or any other Government body/agency.(2) Information regarding any existing consent decrees, injunctions or settlement agreements that materially affect the conduct of the Company’s business.

Details of any material litigation including any proceedings initiated/ notices issued by any Governmental authority against the group companies and the promoters, directors of the Company.

A. Details of insurance policies obtained by the Company in respect of its assets, employees, liabilities, activities and other aspects of the Company, including but not limited to the following:

B. Details of insurance policies obtained by the Company in respect of its assets, employees, liabilities, activities and other aspects of the Company, including but not limited to the following:

(9)Keyman insurance; and

Objects of the offering and a detailed write up on each object.Requirements of funds and means of finance with year-wise breakup, if applicable. (2) Means and sources of financing of funds deployed - internal accruals or loans etc.

(5) In schedule of implementation, status of progress made till date stating details thereofDisclose how the Company proposes to utilize the funds raised pending deployment of funds.

Details of property to be purchased by the Company (if any) including the following.

Where the amount of the purchase money is not material

Examine the industry in detail and give an overview covering the following:

(2)What are the major business drivers in the industry - globally and in India(3)What are the major trends witnessed by the industry recently. (4)Industry outlook in terms of growth dynamics, competition, price trends, technological trends etc.(5)Level of competition, recent developments and key competitors.(6)Key policy and regulations affecting the industry as well as the Company.

(10) Professional indemnity insurance.Details of past claims rejected or refused, details of outstanding claims and details of disputes, if any, with insurer. Details of any negative ranking or marking by any insurer.Copies of most recent property inspection reports issued by a property insurer in respect of any property of the Company, if any.

(3) Amount spent on the above till date; any quotation received (if applicable e.g. for purchase of equipments), details of any project cost estimation, fund requirement.(4) If debt is being used to fund the objects the sanction letters or loan agreements entered into in relation to same, copies of such agreements/sanction/tie-up required.

Prepayment of loans and facilities, if applicable, disclose if there is any penalty clause in the loan agreement or any such agreement for prepayment of loans or working capital facilities. Highlight the impact of such an arrangement on the Company.

(1) names, address, descriptions and occupations of the vendors;(2) amount paid or payable in cash, shares or debentures to the vendor and, where there is more than one separate vendor, or the company is a sub-purchaser, the amount so paid or payable to each vendor, specifying separately the amount, if any, paid or payable for goodwill;

(3) nature of the title or interest in such property acquired or to be acquired by the Company;(4) short particulars of every transaction relating to the property completed within the two preceding years, in which any vendor of the property to the company or any person who is, or was at the time of the transaction, a promoter, or a director or proposed director of the company had any interest, direct or indirect, specifying the date of the transaction and the name of such promoter, director or proposed director and stating the amount payable by or to such vendor, promoter, director or proposed director in respect of the transaction; and

(5) Copies of title deeds and other relevant documents.Details as in (5) shall be required for the property which is a property purchased or acquired by the Company or proposed to be purchased or acquired and which is to be paid for wholly or partly out of the proceeds of the Issue offered for subscription by the prospectus or the purchase or acquisition of which has not been completed at the date of issue of the prospectus. Details are not required for the property -

(1) Where the contract for the purchase or acquisition whereof was entered into in the ordinary course of the company’s business, a contract not being made in contemplation of the Issue nor the issue in consequence of the contract; or

If the Company proposes to acquire a business, which has been carried on for less than three years, the length of time during which the business has been carried on.

(1)What is the market opportunity being addressed by the Company? Provide third party research reports or analyses on size of the markets.

B. In case promoter is a company, provide us the following details :

G. Full particulars of the nature and extent of the interest, if any, of every director or promoter-(1)in the promotion of the Company; or

A. List of promoters of the Company including details such as their complete profile, including their age, educational qualifications, experience in the business or employment and in the infrastructure sector, their business and financial activities, photograph, voter ID number, driving license number shall be disclosed.

a) History of the companies and the promoters of the companies.b) Details in change of management of the companies, if any, including details of the persons who are holding the controlling interest together with the applicability and compliance of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, as amended.

C. Are there any promoter group companies, for which an application has been made to the ROC for striking the name off the Register of Companies, since the companies are defunct companies or have been referred to the Board of Industrial and Financial Reconstruction?

D. Companies with whom the promoters have been disassociated in last three years, reason and manner of such disassociation.E. Details of promoter, any member of the ‘promoter group’ or any ‘group company’ associated with any capital market related activity.F. Indicate if the promoters have any other interest in the business of the Company, other than as in the role of promoters (for instance, whether any other business which a promoter has any connection with the existing business of the Company). If it is expected that in future, the promoters would have an interest in the business of the Company, attempt to quantify the impact of such an interest on the business of the Company.

(2)in any property acquired by the Company within two years of the date of the prospectus or proposed to be acquired by it.(3)Where the interest of such a director or promoter consists in being a member of a firm or Company, the nature and extent of the interest of the firm or Company, with a statement of all sums paid or agreed to be paid to him or to the firm or Company in cash or shares or otherwise by any person either to induce him to become, or to qualify him as, a director, or otherwise for services rendered by him or by the firm or Company, in connection with the promotion or formation of the Company.

H. Any amount or benefit paid or given within the two preceding years or intended to be paid or given to any promoter or officer and consideration for payment of giving of the benefit.I. Disclose all transactions with group companies during the last three years, indicating the nature of transactions and the cumulative value of transactions involved.J. Changes in promoters or management since incorporation (if any): If original promoters are different from the existing management, details in respect of them. Also give reasons for the change in management in the past.

Names and following details of all companies/ partnerships/ sole-proprietorships / firms / ventures promoted by the promoters of the Company, directly or indirectly, irrespective of whether these are covered under section 370 (1B) of the Companies Act, 1956 shall be given. Also give details of such ventures of the promoters in the past, which may not be existent now or which have been sold off. (Undertakings are required from the promoters).

a) Date of incorporation;b) Equity capital;c) Board of directors;d) Shareholding pattern;e) Nature of activities;

(1)Type of issue;(2)Nature of Security;(3)Issue price of the security;(4)Current market price;(5)Particulars of change in capital structure, if any, since the date of the issue;

Copy of the offer document is required to be furnished.

Disclose cost per share to the promoters and book value per share.

(1)Date of incorporation; (2)Business of the company; and(3)Date of listing the company and date of de-listing.

(1)Name of the company;(2)Year of issue;(3)Type of issue (public/ rights/composite);(4)Amount of issue;(5)Date of closure of issue;(6)Date of completion of delivery of share/debenture certificates;(7)Date of completion of the project, where object of the issue was financing the project; and(8)Rate of dividend paid.

Promise vs. Performance for share issue done by group/associate companies in the last one issue.Particulars regarding last capital issue - if applicable please provide the following details:

f) Share quotation for the last six months (if listed); andg) Past financial performance for the last three years and any stub period that may be available (Audited) (Copies of Annual Report to be furnished).Indicate changes in the capital structure during the period and the market value on the date of filing the Prospectus with the ROC.In addition, please mention if any group company(ies) is having negative networth, under BIFR supervision and/or under winding up.If any of the above companies has made any public or rights issue, then the following information needs to be disclosed for the last issue:

(6)Statement on cost and progress of implementation of the project in comparison with the cost and implementation schedule mentioned in the offer document; and(7)Statement regarding the adverse factors related to such company regarding whether it has become a sick company under BIFR or it has made loss in the immediately preceding year.

Sales or purchase between companies in the promoter group when such sales or purchases exceed in value in the aggregate 10% of the total sales or purchases of the Company and also disclose material items of income or expenditure arising out of transactions in the promoter group.

Following details of the group companies, which had been listed in the past and subsequently de-listed:


In case, the Company has more than five listed group companies, the financial information may be restricted to the five largest listed companies to be determined on the basis of market capitalisation one month before the date of filing draft red herring prospectus with the Securities and Exchange Board of India.

Following particulars in regard to the other listed companies under the same management within the meaning section 370 (1)(B) of the Companies Act, 1956, for its last capital issue shall be given:


(For group companies coming under section 370 1B)(1)Year of issue;(2)Type of issue (rights/public/composite/international offerings);(3)Amount;(4)Date of closure of issue;(5)Date of completion of dispatch of certificates;(6)Date of completion of the project;(7)Rate of dividend paid;(8)Other details regarding the issue; and(9)Performance versus projections and reasons for under performance, if any.

(3)Information regarding:

Examine the impact of the latest Budget proposal on the business of the Company.

Confirmation whether the Company has complied with all applicable tax laws and regulations and has filed/delivered all returns, particulars and other documents to be filed on behalf of the Company with any authority.

(1)Management discussion and analysis of the financial conditions comparing the financial performance of FY 2010 with FY 2009, FY 2009 with FY 2008 and FY 2008 with FY 2007.

(2)Financial results for the latest period. Is there are a significant variation in the profits of the Company from one quarter to another, as this may have an impact on the share price of the Company, post listing. Also please explain the reasons for such cyclical variation and if anything can be done to overcome the same.

a). Unusual or infrequent events or business transactions.b). Significant economic changes that materially affect or (are likely to) affect income from continuing operations.c). Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations.d).Future changes in relationship between costs and revenues, in case events such as future increases in labour or material costs or prices that will cause a material change are known.e). Total turnover of each major industry segment in which the Company operates.f). Status of any publicly announced new business segment.g). The extent to which the business is seasonal.h). Any significant dependence on a single or a few suppliers or customers (particularly if the supplier or customer is a foreign company).i). Any unorthodox method adopted by the Company for recording sales/ purchases.j). Are there any significant ingredients to the business of the Company, which in future may be subject to the Government regulations (variables could be in terms of manpower requirement, or various raw materials)

Names, address and certified copies of latest general meeting resolution for appointment of auditors.

Changes in auditors in the past three years. If there has not been any change, indicate by way of a positive statement that there has not been any change in the auditors of the Company. A. Copies of any brochures, newspaper articles or other publicity documents by the Company in the past five years.B. All documents (including submissions and other correspondence) relating to any defective products.

G. Any short-term or long-term, formal or informal, letters of authorisation and power of attorneys.

To the extent not otherwise requested, details of all IT licences granted to or by the Company.

C. Copies of any studies, reports, or analysis prepared by consultants or advisors retained by the Company in connection with the proposed Offering.D. All studies, reports or analyses of the Company or its products prepared by investment bankers, management consultants, accountants, securities analysts or others. E. All written materials and presentations prepared for creditors, potential lenders, securities analysts or equity investors in the last [·] years, financial or otherwise relating to the Company.F. Information, that the Company has knowledge of, regarding any material current or prospective legislation, directives or developments that are likely to impact the Company or their principal business activities

H.. Any other documents or information, which, in your judgement, are significant with respect to the business, operations of financial condition of the Company, or the Offering.A. Details of computer software (both proprietary and third party) and computer hardware (both owned and leased) used by the Company.B. Details of any disaster recovery agreements the Company has in place in relation to information technology and know-how. C. Details of any material agreements relating to the maintenance and support, security and management of material computer hardware, software, networks and other information technology.


Yes/ No

Documents

Due Dligence Checklist(1) - IPO