Information required for Preliminary Due Diligence
S.No | Information Required |
---|---|
1 | Global Organization Holding Structure (Holding company, subsidiaries) and their shareholding pattern |
2 | Board of Directors (BODs) and their Credentials |
3 | Civil and Criminal cases against Shareholders and Directors |
4 | Credit Rating(s) of Organization (across rating agencies) |
5 | Credit Score(s) of Promoting Shareholders |
6 | Political connections of BODs and Shareholders |
7 | Amount of Funds to be Raised |
8 | Instruments of raising Funds (if there is a point of view on this) |
9 | Application of Funds to be Raised (How you intend to use the funds to be raised) |
10 | Corporate Presentation |
11 | Business Plan / Expansion Plan / Project Report (if available) |
12 | Unique Selling Proposition (USP) i.e. Differentiators |
13 | Is a Virtual Data Room (VDR) already maintained? |
14 | Last 3 Financial Years (as available)
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15 | Current Financial Year
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16 | Next 3 Financial Years (as available)
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17 | Are promoters open for arranging the following for security:
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18 | Key Organizational risks, mitigation and contingency plans |
Questions to answered for Preliminary Due Diligence
Regarding Bank Transactions
- What financing facilities have been sanctioned from banks, from when, and in which regions? What is the current outstanding?
- What securities have been hypothecated to the banks for providing these facilities?
- In the last 36 months, have there been any defaults in the repayment of financing facilities obtained? Please provide details of number of instalments overdue
- Have there been any rescheduling of financing facilities sanctioned
- In the last 36 months, has there been any debt restructuring done?
- Is the organization classified as a Non-Performing Asset (NPA)? If yes, what is the status (Possession Notice, One-time Settlement (OTS), Appeal in Debt Recovery Tribunal / NCLT, Auction of Company)? Please provide details
Secretarial Assessment
- Has a secretarial audit been conducted in the last 36 months? If yes, please share details
- What laws are specifically applicable for your organization?
- What is your compliance against these applicable laws?
- Have you raised any deposits from public? If yes, please provide details
Statutory Assessment
- Has there been a change in the accounting policies followed by the company in the last 36 months? If yes, what is effect of the same on the financial statements?
- Which accounting standards are applicable? (IND-AS / GAAP)
- What are the related party transactions in the last 36 months?
- What inter-corporate deposits / loans have been given? Have any loans been given to key-managerial persons?
Regarding Income Tax (including Transfer Pricing), Goods and Service Tax (GST), VAT
- In the last 12 months, did you receive any notices from any of the above authorities?
- In the last 12 months, have there been any penalties levied on the late / non-payment of any kind of taxes?
- In the last 12 months, have there been any interest paid levied on the late / non-payment of any kind of taxes?
- What is the outstanding tax to be paid as on today, and this is related to which month?
- Are there any pending cases with any taxation authorities?
Regarding Labour Department, Employee State Insurance (ESI), Provident Fund (PF), Professional Tax, Gratuity, Bonus and Leave Wages
- In the last 12 months, did you receive any notices from any of the above authorities?
- In the last 12 months, have there been any penalties levied on the above items?
- In the last 12 months, have there been any interest paid levied on the late / non-payment of any of the above?
- What is the outstanding tax, ESI, PF to be paid as on today, and this is related to which month?
- Are there any pending cases with any of the above authorities?
Regarding Reserve Bank of India (RBI), Foreign Exchange Management Act (FEMA), Registrar of Companies (at a central level), SEBI and Shops and Establishments Act
- In the last 12 months, did you receive any notices from any of the above authorities?
- In the last 12 months, have there been any penalties levied by any of the above authorities?
- Are there any pending cases by any of the above authorities on:
- The company
- Any of the Board of Directors
- Any of the Shareholders
Pollution Board
- In the last 12 months, did you receive any notices from any of the above authorities?
- In the last 12 months, have there been any penalties levied on the above items?
- Are there any pending cases with any of the above authorities?
Fire Department
- In the last 12 months, did you receive any notices from any of the above authorities?
- In the last 12 months, have there been any penalties levied on the above items?
- Are there any pending cases with any of the above authorities?
Insurance and Claims
- What Insurances have been taken by the company thus far?
- In the last 12 months, how many insurance claims have been raised and for what amount?
Legal litigations and Jurisdictions
- How many legal mediations, arbitrations and litigations are outstanding and what is the status?
- Where are these legal mediations, arbitrations and litigations being pursued?
Contingent Liabilities
- Have you made any provisions for Contingent Liabilities?
Other
- Have any other notices of non-compliance been received from any other regulatory agencies in the last 12 months? If yes, what is their status as on date?
Forensic disclosures; are there any:
- Inflation of revenues
- Potential diversion of funds
- As consultancy and agency fee
- Noncore investments
- Existence of accommodation transactions
- Non-existent vendors/customers
- Issues of conflict of interest
- Anomalies in related party transactions
- Focus on procurement process
- Undisclosed related parties
- Revenue streams and supplies that may be predicated on bribery
- Bribes paid or received
- Including corruption charges and cases
- Anti corruption compliance programs, including areas such as culture, policies, training, implementation and compliance
- Financial statement irregularities
- Inter-company trades, loans, receivables, Transfer Pricing
- Sexual-Harassment and Discrimination Cases
- Tracing shareholder acquisitions to the beneficiary, source of funds and accounting treatment
- Fraud cases identified in the organization in the last 12 months
- Restrictions on trade and export
- Non-compete clauses signed with other parties
- Exclusivity clauses signed with other parties
- Liability, Limitation of Liability, Guarantee, Warrantee clauses signed with other parties
- Personal travel, gift and entertainment expenses for Directors / Shareholders
- Cash Transactions for personal use
- Political and Charitable donations
- Transactions that may give rise to potential exposure to criminal persecution, regulatory fines and civil litigations
- Physically non-existent employees
- Obtaining, analysing and assessing findings of the audit committee investigations