Checklist for Preliminary Due-diligence

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) Audited Cash Flow Statements Audited Profit and Loss Accounts Audited Balance Sheets
15	Current Financial Year Provisional Cash Flow Statements Provisional Profit and Loss Accounts Provisional Balance Sheets
16	Next 3 Financial Years (as available) Projected Cash Flow Statements Projected Profit and Loss Accounts Projected Balance Sheets
17	Are promoters open for arranging the following for security: Personal Guarantee Collateral security Hypothecating company shares Increasing Equity investment Debt contribution Shifting the corporate headquarters to a different country
18	Key Organizational risks, mitigation and contingency plans

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

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

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?

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?

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?

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

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?

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?

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?

How many legal mediations, arbitrations and litigations are outstanding and what is the status?
Where are these legal mediations, arbitrations and litigations being pursued?

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?

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