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Documents for due diligence

1. Financial Statements
1.1 All annual and quarterly financial reports and audited financial statements, including
accompanying schedules (Balance Sheet, Income & Cash Flow statements and reconciliation of
retained earnings) of past 5 years.
1.2 Unaudited quarterly financials of the current year (including accompanying schedules Balance
Sheet, Income & Cash Flow statements and reconciliation of retained earnings)
1.3 All accounting policies followed by the company
1.4 Details of changes in the accounting policies in last five years
1.5 Significant correspondence with independent public accountants, including management letters
1.6 Copy of Bank Statement for last one year
1.7 Invoices of sales made by the company in last 1 year with corresponding bills raised and
revenues realised in bank
1.8 Cash Book
1.9 Copies of Monthly MIS
1.10 Copies of Annual Operating Plan
1.11 Revenue Recognition Policy
1.12 A listing of any significant non-recurring expenses occurring in the previous year or current year.
1.13 A schedule showing Current Account Receivables, incl. quality, aging as on last balance sheet
date and end of last quarter.
1.14 A schedule showing Current Account Payable, Accrued Expenses and Customer Deposits.
Include Current Aged Account Payable listing by supplier as on last balance sheet date and end
of last quarter.
1.15 A schedule of property, plant, equipment, depreciation and amortization schedules.
1.16 Break-up of orders in hand, Existing Contracts with the customers
1.17 Description of Contingent Liabilities arising from any agreements, severance payments for
terminal employees, unsolved legal matters etc.
1.18 Transactions by the Company with any affiliated companies and the method of reflecting these
transactions in such Company's financial statements.
1.19 List and details of all borrowings (secured as well as unsecured), fixed deposits, deferred credits
undertaken by the Company, along with copies of the documents/agreements in relation
therewith including:
 sanction letters;
 security documents;
 agreements;
 default notices; and

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2. Company/ Business:
2.1 Certified true copy of the Certificate of Incorporation, the Memorandum of Association and the
Articles of Association (the “Company”), with all amendments upto date.
2.2 Copies of:
 Minutes book of the meetings of the Board and Shareholders of the Company;
 Register of Charges of the Company along with related filings with the office of the
concerned Registrar of Companies;
 Register of Assets of the Company;
 Register of Contracts of the Company;
 Register of Members;
 Register of Transfer of Shares;
 Register of Directors;
 Register of Directors’ Shareholding;
 Register of companies/firms in which directors are interested; and
 Copies of all filings made with the concerned Registrar of Companies including periodic
filings such as filings of annual returns and balance sheet and profit and loss account of the
Company.
2.3 List of collaborations/ partnerships/ joint ventures, if any, with copies of agreements.
2.4 List of agreements/arrangements if any by or among the shareholders including voting
agreements.
2.5 List and copies of Powers of Attorney or other powers granted by the Company to its directors or
employees if any, to act on behalf of the Company.
2.6 List of outstanding personal and/ or corporate guarantees given in relation to the assets/
business of the Company, with copies thereof.
2.7 Copies of audited financial statements of the Company for the last 5 years and the latest
unaudited financial statements of the Company.
2.8 Details of the manufacturing facilities of the Company, details of the products manufactured
therein together with the capacities and the quantities manufactured and the location of the
plants and assets.
2.9 List of all officers and key personnel of the Company.
2.10 List of subsidiaries (if any) or associate companies of the Company and also details of all
investments of the Company.
2.11 Particulars of companies/firms in which directors are interested as well as list of companies within
the same group, associated companies/firms etc.

3. Contracts:
3.1. List of contracts/ agreements/ arrangements/ purchase orders with distributors, suppliers,
customers agents, stockists, carrying and forwarding agents, sales representatives, government
authorities, consignment agents, consultants, service providers, etc. with copies thereof relating
to the business/ assets of the Company;

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3.2. Copies of license agreements, registered user agreements, contract manufacturing agreements,
if any, relating to the products manufactured.
3.3. List of all lease agreements or license arrangements in relation to all leases or licenses for real
estate, assets, equipment and copies thereof.
3.4. Particulars of any oral agreements in force that may have a bearing on the business/ assets that
shall form part of the proposed transaction.
3.5. List and copies of agreements/ arrangements with directors and personal guarantees/
indemnification’s given by directors on behalf of the Company and vice-versa relating to the
business/ assets that shall form part of the proposed transaction.
3.6. Particulars of any guarantees given by third parties relating to the business/ assets that shall
form part of the proposed transaction.
3.7. List and description of all liens, charges, encumbrances, etc., on the assets/ products of the
Company.
3.8. Copies of all non-competition agreements or other agreements limiting or restricting the business
of the Company.

4. Fixed Assets
4.1 Break-up by each class of fixed assets, including details such as :
 Details of Plant and Machinery of the company
 The Depreciation Policy (estimated useful life, basis)
 The Valuation Policy (historical cost/ replacement value)
 WDV Value of all Fixed Assets of the company as on March 31, 2009 along with the
depreciation rates
4.2 Details of properties owned, ownership papers, approvals of plants pollution etc.
4.3 Details of Fixed Assets pledged as security against loans and guarantees
4.4 Details of insurance policies with respect to the fixed assets and copies of the insurance policies
4.5 Details of Capital Leases (Financial/Operating), if any, including information on
 Capitalisation criteria and amounts
 Lease data (Type, Lessor, Terms, and Transferability)
 Copies of lease and hire purchase agreements
4.6 Details of machinery given on lease to customers
4.7 Copy of the fixed asset register
4.8 Reconciliation of the fixed asset register with the balance sheet
4.9 List of fully depreciated assets
4.10 List of all non-operational assets
4.11 Details of any critical assets having Technical issues impacting production costs and capacity
utilisation.
4.12 Reports and maintenance agreements.
4.13 Major maintenance when last undertaken
4.14 annual maintenance budget

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4.15 any equipment requiring major overhead

4.16 any balancing/additional/replacement equipments required.
4.17 Disposal policy in respect of old or fully depreciated or redundant equipment.

5. Employee Matters:
Copy of latest organisation chart identifying officers, number of employees together with their break-up
with respect to various departments and category (per manufacturing facility) and other key
employees of the Company.
5.1 Employee compensation policies and benefit plans and other such policies/ plans for the welfare of
the employees both statutory as well as non-statutory.
5.2 Copies of:
 employee contracts (each category);
 service agreements; and
 severance agreements.
5.3 Agreements, charter of demands/ memorandum of settlement, if any, with employee unions their
terms and validity etc.
5.4 Demands outstanding, if any, relating to Employee State Insurance, Provident Fund dues or other
labour related dues.
5.5 Details of gratuity funding, if any.
5.6 Employee severance/ compensation policy of the Company and the details of the voluntary
retirement scheme, if any, announced by the Company.
5.7 Copies of the Employees Standing Order and other terms and conditions as may be applicable to
the employees of the Company.
5.8 Details on the contract labourers along with contract labour agreements, details of the services for
which they are working with the Company and the copies of the licenses and registrations obtained
by the Company in this regard.
5.9 Details of any employee welfare facilities.

6. Licences etc.:
6.1 List of licences, exemptions, permits, consents, approvals, concessions, etc. obtained by the
Company with copies thereof.
6.2 List of all government registration requirements along with copies of such registrations including
industrial license (if any) for manufacture of items reserved for the small scale sector.
6.3 Details of any restrictions on use or distribution of Company’s products issued by any government
body/ authority.

7. Safety/ health/ environment:

7.1 Copies of the licenses, consents, permits and registrations under the local pollution control laws
and other environmental legislation applicable to the Company.
7.2 Details of any serious accidents/ injuries to employees.

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8. Insurance:
8.1 List of pending claims, disputes with insurance companies or denials of coverage.
8.2 “Key person” insurance policies.
8.3 Any material insurance arrangements (including property damage, third-party liability, and key
employee insurance.

9. Litigation:
9.1 List (along with copies) of all legal cases filed against the Company or filed by the Company,
including without limitation:
 Legal proceedings involving former or present employees, agents, officers or directors, affecting
the Company.
 Settlement agreements, whether entered into before or after lawsuits, affecting the Company.
 Legal proceedings involving trademarks and intellectual property rights infringements by or
against the Company or the business having affect on the Company.
 Product liability claims and suits concerning the products presently being manufactured at the
plants as well as those the production of which has been discontinued.
 Legal proceedings under environmental laws.
9.2 Description of any other litigation, investigation or government complaints/enquiries during the last
5 years and a summary of any past, current or proposed regulatory action against the Company
including notices received.
9.3 List and particulars of arbitration or other proceedings by or against the Company.
9.4 List along with summary of customer complaints, or any threatened compliant or litigation by
customers in respect of the Company.
9.5 Summary of any threatened or other potential litigation, investigation or government enquiry in
respect of the Company.

10. Transfer of technology and Intellectual Property:

10.1 Agreements/ understandings/ obligations in respect of transfer/ licence of any technology, know-
how and intellectual property rights in connection with the manufacture of the products by the
Company together with the copies of the registrations with the registering authorities and
governmental/ regulatory approvals/ registrations obtained in this regard.
10.2 Schedule of all patents and applications along with copies of the registrations and applications.
10.3 Schedule of all trademark registrations and applications along with copies of the registrations and
applications.
10.4 Schedule of all copyright registrations and applications along with copies of the registrations and
applications.
10.5 Schedule of all other intellectuals property right registrations and applications along with copies
of the registrations and applications.

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10.6 Copies of all assignment agreements in relation to the intellectual property rights and invention
agreements.
10.7 Copies of all documentation/ communications concerning validity or infringement of the
Company’s intellectual property.
10.8 Copies of all documentation/ communications concerning infringement by the Company of any
third party’s intellectual property.

11. Information technology- IT

11.1 Structure of EDP /IT function
11.2 List of all significant accounting, operational & customer interface functions
11.3 List of all hardware and software in use (age, make, supplier, etc.)
11.4 Maintenance policy and procedures
11.5 Details of systems implementation in the last 3 years.

12. Income Tax

12.1 Copies of tax returns (direct/ indirect tax) and any audit reports (federal, state or local) for the last
five years.
12.2 Tax audit reports of last 3-5 years and a list of any notices received or notices of assessment
contemplated by the Income Tax Department.
12.3 Correspondences with tax advisors, auditors, income tax department
12.4 Letter/ Certificates indicating benefits received under Income tax/ Sales tax/ excise duty

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