VC CORPORATE ADVISORS PVT. LTD.

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INITIAL DUE DILIGENCE CHECK LIST FOR THE IPO

VC Corporate Advisors Pvt. Ltd.

31, Ganesh Chandra Avenue, 2nd Floor Suite no. 2C, Kolkata - 700 013. Ph : 033 - 2225 3940 / 3941 / 4116 Fax: 033 - 2225 3941

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INITIAL REGULATORY DUE DILIGENCE LIST TABLE OF CONTENTS A. INITIAL REGULATORY DUE DILIGENCE CHECKLIST..................................3 Section I General Information....................................................................3 Section II Capital Structure........................................................................5 Section III History.....................................................................................7 Section IV Management.............................................................................8 Section V Subsidiaries, Group And Associate Companies & Equity Investments 9 Section VI Business.................................................................................10 Section VII - Promoters .............................................................................12 Section VIII- Information on Financial Performance.......................................12 Section IX - Management Discussion and Analysis.........................................14 Section X- General information....................................................................14 Section XI- Consent Letters........................................................................15 Section XII- SEBI Certificates......................................................................15 Section XIII Other certificates...................................................................15 B. PRELIMINARY LIST OF INFORMATION REQUIRED ABOUT THE BUSINESS OF THE COMPANY .......................................................................................15 Corporate profile/ history of the Company....................................................15 Business of the Company............................................................................15 Industry Overview - ..................................................................................17

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A. INITIAL REGULATORY DUE DILIGENCE CHECKLIST Document type SECTION I GENERAL INFORMATION 1. Consent/ Resolution from shareholders for fresh issue of equity. 2. Power of Attorney from the Directors of the company for signing the RHP/ Prospectus while filing with SEBI/the Registrar of Companies (RoC). 3. Minutes of Board and general body meetings of the company for the last three years. 4. Review of minutes of all stockholders/shareholders meetings, stock books, stock ledgers and other records of stock issuances of the Company. 5. Review of internal audit reports for the last 5 years. 6. Copies of all statutory RBI/ GoI/ FIPB/ various GoI agencies clearances and approvals received and copies of applications made if approval(s) awaited e.g. SIA registration, environmental clearance, approvals required for utilities, emission norms, approvals for foreign investment, approvals for export etc. 7. List of approvals that are required to undertake and continue the business e.g. permission for electricity, water and other utilities from the relevant authorities Copy of all approvals/consents received from municipal/local authorities. Copy of any show cause notice received from municipal/local authorities. Copy of tax exemption approval that the company has availed of, including exemption relating to entertainment tax. 8. Labour compliances List of all labour compliances maintained by the company. Latest filings for provident fund, gratuity Labour Registers ESI, Provident Fund, Accidents Register. Registration under the Contract Labour (Regulation and Abolition) Act, 1970. Any group insurance policies for gratuity, accident etc. Any notices from any labour or statutory authority. List of any collective bargaining agreements. Number of employee unions, are these recognized or unrecognized unions, are they registered or unregistered. Any payouts made to any workmen as compensation for any accidents etc. Copy of the fatal accidents register. 9. Confirmation that the company, its directors, any of the companys associates of group companies, and companies with which the directors of issuer are associated as directors or promoters, has not been prohibited from accessing the capital market under any order or directions passed by SEBI. If the promoter is a body corporate, then confirm and disclose that none of the directors or the person(s) in control of the body corporate has been prohibited from accessing the capital market under any order or direction passed by SEBI. 10. Confirmation that neither the company, nor its promoters or their relatives or promoter group companies have been declared by RBI as willful defaulters. If declared as a willful defaulter, the reasons thereof with case history. 11. Penalties, if any imposed by SEBI or any other regulatory body in or abroad to be disclosed. Else a negative confirmation. 12. Address of the registered office of the company, registration number of the company along with the address of RoC where the company is registered.
3 CHECKLIST FOR THE INITIAL PUBLIC OFFERING

Resolution Document(s) Document(s) Documents Documents Document(s)

Certificate Document(s)

&

Certificate

Certificate Certificate MoA/AoA and Mgmt confirmation

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13. 14. 15.

16.

17. 18. 19. 20. 21. 22.

23.

24.

Name, address, telephone number, fax number and e-mail address of the Company Secretary. Name, address, telephone number, fax number and e-mail address of the Auditors to the Company. Name, address, telephone number, fax number, website address, e-mail address and contact person of the Registrar to the Issue along with copy of the SEBI registration certificate. Name, address, telephone number, fax number, website address, e-mail address and contact person of the Market Makers to the Issue along with copy of the SEBI registration certificate. Name & address of the Compliance Officer of the Company with phone and fax numbers and the e-mail address. Name, address, phone number, fax number and e-mail address of the of the legal advisors to the Company. Name, address, phone number, fax number and e-mail address of the of the Bankers to the Company. No default certificate from bankers / lenders. NOC from bankers / lenders as per existing terms of agreements. Name, address, telephone number, fax number, contact person, website address and e-mail address of the Underwriters and Escrow Collection Banks (along with copy of the SEBI registration certificate of the Bankers and any correspondent bank). Details of all credit ratings received by the Company during the previous three years (including copies of the letters received from the rating agency(s)) giving the name of the rating agency(s), credit rating, borrowing programme etc. Date and place of original incorporation of the company and any changes thereafter in the name and registered office.

Document type Mgmt confirmation Mgmt confirmation Document(s) Document(s) Resolution/ Certificate Mgmt confirmation Mgmt confirmation

Mgmt confirmation

Document(s)

Copies of Certificate of Incorporation and change of name/ registered office (s) Document(s)

25.

26. 27. 28.

29.

30. 31. 32. 33. 34.

If there is a change in the name of the company at any time during the last 3 years, state reasons for change and whether and when the Objects clause of Memorandum of Association was amended to carry on activities as reflected by the new name. Certificate regarding utilisation of issue proceeds. Tripartite Agreement between the Issuer, Registrar and Depositories (NSDL & CDSL) to be executed by the Registrar. Recent analyses of the Company prepared by investment bankers, engineers, management consultants, accountants, rating agencies or others, including marketing studies, credit reports and other types of reports, financial or otherwise. Details of any branch, agency, place of business or any permanent establishment inside and outside, including address, brief description of business and details of the personnel involved. Review of any report, notice or correspondence relating to any violation or infringement by the Company of any Indian or other governmental regulation. Review of compliance reports filed and significant correspondence with any regulatory agency. Review of all governmental permits, consents and regulatory approvals of the Company. List of and information relating to all material laws affecting operations of the Company. Review of copies of the approvals from the Secretariat for Industrial
4 CHECKLIST FOR THE INITIAL PUBLIC OFFERING

Certificate Document(s) Document(s)

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Document type Assistance/Foreign Investment Promotion Board (SIA/FIPB) and the Reserve Bank of (RBI) required by the Company or its shareholders for any direct or indirect foreign investment or technical collaboration in the Company, or copies of any industrial license obtained under Schedule I of the Industries Regulation Development Act, 1951, if any. Review of any reports, notices or correspondence to the Company regarding foreign payments or compliance with any countrys governmental regulations or currency requirements. Review of any other agreements executed by the Company with the Indian government, or governmental entity, whether at the central, state or municipal/local level. Other than those listed above, review of all reports filed with, and significant correspondence sent to, any government regulatory agency, in or abroad, by the Company. Review of copies of all valid powers of attorney granted by the Company.

35.

36.

37.

38.

SECTION II CAPITAL STRUCTURE The information in the capital structure should be as on the date of SEBI filing 1. Authorised, Issued, Subscribed and paid up capital Number of instruments Face value 2. Size of the present issue in terms of the number of instruments and face value Promoters contribution Firm allotment/ reservation i) Names of group companies in case reservation made to the shareholders of the group companies. ii) Net offer to the public 3. Paid up capital After Issue (based on issue structure) After conversion of outstanding vested ESOPs/ securities, as applicable 4. Share premium account Before the issue
5. 6. 7.

Certificate

Certificate

Document(s)/ Certificate Certificate Document(s) Document(s) Document(s) Certificate

8.

After the issue Details of any outstanding financial instrument(s) or right entitling anyone to receive equity shares after the issue. Details of change in face value/ subdivision/ split of shares and the Board and EGM resolution authorizing such action. Details of any bonus/ rights issue The Board and EGM resolution authorizing such action RBI/ FIPB approval required if the rights/ bonus issue is made to an NRI/ OCB/ Foreign collaborator Details of the existing subscribed and allotted equity shares including that of promoter and promoter group: Date of allotment No. of shares Face value Price/ consideration Reason for allotment (e.g. subscribers to the memorandum, bonus, rights, amalgamation/ merger/ swap) Cumulative Share premium
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9.

10.

11.

12.

13.

14.

15. 16. 17. 18.

19. 20. 21.

22.

23.

Disclose the names of the promoters, promoter group, their pre and post issue holdings, contribution towards promoters contribution and details of lock in of their shares on a LIFO basis. Details of shares issued for consideration other than cash stating the date of issue, persons to whom issued, price, reasons for the issue and whether any benefits have accrued to the company out of the issue. Names and shareholding of the top ten shareholders of the Company Two years prior to SEBI/ RoC filing 10 days prior to SEBI/ RoC filing SEBI/ RoC filing Current shareholding pattern and the post issue shareholding pattern. Promoter Group Directors of the promoters, if the promoter is a corporate NRI/ OCB/ FII Others Total number of members of the Company If the promoter is a corporate, the names of natural persons who are in control (holding 10% or more of voting rights) or who are on the Board of any company which is a part of the promoter group. Promoters contribution and lock-in Individual shareholding Date of allotment/ date of making fully paid/ date of acquisition Consideration Nature of issue (bonus, rights etc.) Face value and issue price of securities Percentage of promoters contribution to the total issued capital Date to which securities are locked-in Promoters and other shareholders to give NOC to the Company for lock-in of their shareholding, as per SEBI guidelines. If the locked-in shares have been pledged, then the details including name of pledgee, facilities availed and terms and conditions of the pledge. Details of additional lock in of shares, if any. Details of transactions in the shares of the issuer company by the Promoter Group and the Directors of the promoting companies Transferor Transferee Maximum and minimum price of the transaction Date of the transaction Details of all buy-back, stand by and similar arrangements for purchase of securities by the promoters, directors and lead managers, if any. Details of bridge loans, if any. Confirmation that the issuer shall not make any further issue of capital whether by way of issue of bonus shares, preferential allotment, rights issue or public issue or in any other manner, during the period commencing from SEBI filing till listing. Disclose as to the proposal, intention, negotiations, consideration of the issuer to alter the capital structure by way of split/ consolidation of the denomination of the shares, or issue of shares on a preferential basis or issue of bonus or rights or further public issue of shares or any other securities, within a period of 6 months from the date of opening the present issue. Details of the ESOP scheme, if any.
6 CHECKLIST FOR THE INITIAL PUBLIC OFFERING

Document type Certificate Certificate Certificate

Certificate

Mgmt confirmation & Document(s) Certificate

Certificate Document(s) Certificate Document(s)/ Certificate

Document(s) Document(s) Certificate

Certificate

Document(s)

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Document type
24.

Review of copies of Register of Members/ Transfer of Shares, Register of Inter Corporate Loans, Register of Charges, Register of Contracts, Register of Directors, the Register of Investments and any other Register required to be maintained by the Company.

SECTION III HISTORY 1. History of the Company including Date of Incorporation Date of Commencement of Business Date of conversion of private limited company to public limited company, as applicable, dates on which names have been changed, if applicable, reasons for change of name, changes in registered offices of the company and reasons therefore Dates on which the Memorandum of Association of the company have been amended citing the details of amendment 2. Main objects of the Company 3. Trace the major events in the history of the company including Corporate profile of the company regarding its history, description of the activities, services, products, market of each segment, growth of the company, standing of the company and/ or its products and its management, the major suppliers and customers of the company, environmental issues if any. The company's performance, standing with reference to the prominent competitors with reference to segment [geographical, type of customers, etc.] Technology, market, managerial competence and capacity built-up Capacity/ facility creation, location, marketing competition, details of past projects, time and cost overrun etc. Raising of capital in form of equity or debt, details of default and reschedulements, if any Injunction/ restraining order, if any towards the company Details of any restructuring Complete details of acquisitions of business/ undertakings/ mergers/ amalgamation/ revaluation of assets. Provide copies of merger/amalgamation scheme relating to merger of the erstwhile subsidiaries into the Company, and other relevant documents in that regard including valuation report and legal opinion. Changes in the activities in the last 5 years of the issuer which have had a material impact on the profit/loss of the company Details of litigations and defaults as per certificate. Company to provide with a list of all litigations, show cause notices or threatened notice or litigation. Company should ensure that back up documentation and litigation files are available for the same. A description of any and all strikes, lockouts, slowdowns and other labor disruptions at any of the Company's or any subsidiary's facilities and any claim of unfair labor practices or petitions filed with federal or state governmental authorities with respect to workers at the Company's or any subsidiary's facilities.

Copy of Certificate Copy of Certificate Copy of Certificate, Document(s), Certificate Document(s) Document(s) Mgmt confirmation/ Document(s)

4.

Certificate

5.

Document(s) & Mgmt confirmation

7 CHECKLIST FOR THE INITIAL PUBLIC OFFERING

VC CORPORATE ADVISORS PVT. LTD.

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Document type SECTION IV MANAGEMENT 1. Board of Directors

2.

Name, age, fathers name, occupation, address (as submitted to the RoC) of the Directors1 Other directorships and the nominee capacity of the directors Changes in the directors in the three years preceding the date of filing the offer document: dates of appointment, resignation and reasons for resignation- certificate required Board resolution/ contract for the appointment and the remuneration of the managing director and other directors Interests of Directors, their borrowing powers and qualification shares

Document(s) Certificate from each Director Mgmt confirmation

3. 4. 5.

Litigation/ defaults etc as per certificate. Key managerial personnel: Profiles of key managerial personnel including name, date of joining, qualification, details of previous employment, experience in the line of business, key strengths , remuneration paid in last one year etc. Confirmation that the key management personnel are permanent employees Changes in the key managerial personnel in the past one year: dates of appointment, resignation and reasons for resignation Organisation structure with names, designations, functions and responsibility Corporate Governance Composition of Board, Audit committee, Investors grievances committee, etc. The following information shall be disclosed with respect to the company's directors and key managerial personnel: Name, business experience, functions and areas of experience in the company. The nature of any family relationship between any of the persons named under this head. Any arrangement or understanding with major shareholders, customers, suppliers or others, pursuant to which any person referred to in this head, was selected as a director or member of senior management. During the last FY, the amount of compensation paid, and benefits in kind granted, to persons mentioned under this head, by the company for services in all capacities to the company. Disclosure of compensation should be given on an individual basis. The disclosure should also covers contingent or deferred compensation accrued for the year, even if the compensation is payable at a later date. 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 persons participate in the plan. With respect to the persons listed under this head, disclose as to their share ownership in the company The following information shall be disclosed with respect to, the company's directors. Date of expiration of the current term of office. Details of directors' service contracts with the company
8 CHECKLIST FOR THE INITIAL PUBLIC OFFERING

Document(s) & Resolution Mgmt confirmation & Document(s) Certificate Mgmt confirmation and employees confirmation Certificate Certificate

Document(s), Mgmt confirmation Mgmt confirmation, Document(s) & Certificate

Form 29 & 32 which are filed with the RoC

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Document type providing for benefits upon termination of employment, or an appropriate negative statement. Details relating to the company's audit committee and remuneration committee, including the names of committee members and a summary of the terms of reference under which the committee operates. Documents providing for any bonus, retirement, profit sharing, incentive compensation, welfare and other employee benefit plans or agreements of the Company. Review of copies of all agreements or arrangements restricting the transfer of shares, or relating to the management, ownership or control of the Company, and any other agreements which define or limit the rights of the shareholders of the Company, including any restrictions upon voting rights or upon the declaration or payment of any dividends or relating to the issuance of additional share capital Review of full particulars of any pension plan, pension arrangement, or proposed pension scheme, covenant or life assurance schemes of the Company. Details on compliance of the Provident Fund and Miscellaneous Provisions Act, maintaining of the registers prescribed thereunder and details of contributions and employees covered thereunder. Details of any other Provident Fund scheme or Trust. Details of availing any infancy benefits under Provident Fund and Bonus laws. Details of bonus payments and registers required to be maintained pursuant to the Payment of Bonus Act. Details of compliance with Payment of Gratuity Act or other Gratuity Fund Scheme and any other Employee Welfare Schemes in existence.

6.

Document(s)

7.

8.

9.

SECTION V SUBSIDIARIES, GROUP AND ASSOCIATE COMPANIES & EQUITY INVESTMENTS 1. Define promoter group 2. Group and associate companies Date of incorporation Shareholding pattern Board of Directors Audited accounts for the last 3 years, along with any significant notes to accounts Details of litigations and defaults as per certificate. Information regarding companies which have become BIFR companies or are under winding up or have negative net worth If listed, i. Highest and lowest market price during the preceding 6 months, current market price and current market capitalization ii. In case the company has made a rights or a public issue, the following details regarding the last issue: year of issue, type of issue, issue amount, date of closure of issue, date of completion of dispatch of delivery of security certificates, issue price of the security, object of the issue, rate of dividend paid, date of completion of the project, where the object was financing of a project and particulars of changes in the capital structure iii. Promise v/s performance of all the group companies who have made an issue during the last 3 years, or the last issue made by such group companies, including cost and progress of implementation of
9 CHECKLIST FOR THE INITIAL PUBLIC OFFERING

Legal Certificate Document(s)

Certificate Mgmt confirmation/ Document(s) Document(s)/ confirmation Mgmt

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Document type the project in comparison with the cost and progress of implementation given in the Prospectus/ Letter of Offer. iv. Details of investor complaints which have been received, resolved and which are pending resolution v. Investor grievance redressal system including the normal time taken to redress various types of investor complaints List of ALL VENTURES OF THE PROMOTERS (sole proprietorship, Firm, private company, limited company, listed company), giving activities undertaken, in brief. If any of these entities had faced/is facing any litigations/ defaults/ overdues OR labour problems/ closure etc., these may be mentioned under this para. The list to include all private/ listed companies of the issuer irrespective of whether they are under the same management as per Section 370(1B) of the Companies Act In case of common pursuits among the group companies and the issuer Company, details of any conflict of interest to be given, along with related party transactions and their financial implication on the issuer Company. If the promoters/ directors are involved one or more ventures in the same line of business as the issuer Company, potential conflict of interest to be given Details of promoter company/ group companies etc. in securities related business Details of any investment in any other company, partnership, association or any other person, including copies or details of any agreements/ arrangements with other investors A schedule with the names of all companies that the Company controls solely through its right to appoint an additional seat on the board of directors.

3.

Certificate

4.

Mgmt confirmation & Certificate from Auditors reg. Related party transactions Certificate

5. 6.

7.

SECTION VI BUSINESS 1. Facilities Location of the facilities Technology, process, etc. Confirmation that land acquired by the company is free from all encumbrances and has a clear title

7.

8.

Details of municipal tax and local tax compliance All significant leases of real property and all leases of any substantial amount of personal property to which the Company is a party, either as lessor or lessee 2. Nature of products, consumers and end users, including dependence on customers, suppliers, dealers etc (in or abroad) 3. RM supply agreements / arrangements 4. Seasonality of the business 5. Details of the market including details of competition, past trends and future prospects 6. Manpower: Details of the recruitment strategy, training programs and retention strategy Marketing strategy Approach to marketing and marketing set up Brand names/ service marks owned by the Company (and whether they are registered in the name of the Company) Collaborations/ alliances: Details of collaboration, performance guarantee or assistance in marketing by collaborators.
10 CHECKLIST FOR THE INITIAL PUBLIC OFFERING

Document(s) Mgmt confirmation/ Document(s) Certificate & Mgmt confirmation/ Document(s) Document(s) Document(s) & Mgmt confirmation Mgmt confirmation Mgmt confirmation Mgmt confirmation & Document(s) Mgmt confirmation Mgmt confirmation Document(s) Document(s)

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Document type Names of collaborators, nature of arrangement, place of registration, year of incorporation, paid up share capital, turnover in the last year of operations, general information and infrastructure facilities for raw materials and utilities Capacity and capacity utilization Give existing installed capacities for each product, present and during the previous three years, proposed capacities for existing and proposed products and the assumptions for future capacity utilisation for the next three years (from the date of commercial production) in respect of existing and proposed products Infrastructure: Property: the lease agreements or the agreements of conveyance made out towards each of the properties used by the company. List of all properties owned/leased/licensed by the company, together with details of the area of the property and the nature of the right over the property. The company should also provide details of the areas of the properties (if not included in the lease agreements) and the facilities that are housed in the properties. Equipment: the ownership details of the main equipment supported by the relevant documents. Also outline the purchase policy, the main suppliers, the uniqueness of the various machinery etc. Website: the site address, the registration details, agreements, if any with other companies to provide content. The details (capacities, authority etc) of the utilities in terms of the electrical connections, leased lines, VSATs, or any other form of internet connectivity supported by relevant documents Export possibilities and export obligations, if any

9.

Mgmt confirmation & Document(s)

10.

Document(s) & Mgmt confirmation

11. 12.

Market including details of the competition, past production figures for the industry 13. Copies of any joint venture or collaboration agreements or technical collaboration agreement or arrangements among the shareholders of the Company, including the shareholders agreement, technical know-how licensing, technical assistance, trademark licensing and equipment supply agreements. 14. A schedule of all trademarks, service marks, trade names, brands and copyrights of the Company and their date of application or registration. 15. Details of awards/ recognitions won by the company 16. Review of all material sales, agency, distribution and advertising contracts to which the Company is a party. 17. Review of all material supply or requirement contracts to which the Company is a party. 18. Review of material agreements with any government or government agency, other than ordinary course contracts 19. Details of any long term contract, or contracts esp. which are or are likely to be of an unprofitable or loss making nature and of any contracts containing material obligations or restrictions of an unprofitable or loss making nature and of any contracts containing material obligations or restrictions of an exceptional or unusual nature. 20. Details of any other contract or arrangement which has, or is likely to have, a material effect on the financial or trading position or prospects of the Company, or is outside the ordinary course of the Companys business
11 CHECKLIST FOR THE INITIAL PUBLIC OFFERING

Mgmt confirmation and Document(s) Mgmt confirmation and Document(s) Document(s)

Document(s) & Mgmt confirmation

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Document type Review of all significant documents relating to major acquisitions or dispositions, or, proposed acquisitions or dispositions, by the Company. 22. Details of any investigation by, or correspondence with, any monopoly and/ or restrictive trade practices commission of office, including the office of The Monopolies and Restrictive Trade Practices Commission under or in connection with the Monopolies and Restrictive Trade Practices Act, 1969, as amended. 23. Details of any agreement or arrangement (or any judgment or ruling) which restricts the Companys ability to compete anywhere in the world and of any notification or registration or notification under the relevant domestic legislation. 24. Details of and copies of documents relating to any patent, trade or service mark or registered design, or any copyright, know-how or other intellectual property of which the Company is the owner, licensee or user. 25. Details of any infringement or alleged infringement by third parties of any intellectual property rights of the Company. 26. Details of any intellectual property rights owned by third parties the use or exploitation of which is necessary or desirable for the business of the Company 27. Details of any circumstances where the benefit, or the right of use, of any of the above intellectual property rights, licences or agreements may be lost or affected adversely (including on a change of control). 28. Schedule of major suppliers and customers, giving annual amounts purchased or sold. 29. Backlog and order records 30. Details of all insurance policies of the company. List to be provided with details of amounts of the same and the coverage of the policy. Cover notes/ policy details should be kept available for review. SECTION VII - PROMOTERS 1. Back ground of the promoters, their qualifications and experience
21.

2.

3.

4. 5. 6.

Details of litigations and defaults as per certificate Any other interest of the promoter in the company In case the present promoters have acquired the controlling interest, state details such as date of acquisition, terms of acquisition, consideration and compliance with the provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 as applicable If the Promoters/Directors have any other interest in the Issuer Company, the same should be brought out briefly under this head also in addition to details appearing elsewhere in the prospectus. If the promoters have disassociated with any firm in the last 3 years then the reasons for the disassociation together with the terms of such disassociation Details of outstanding litigations and defaults in case of companies with which the promoters were associated in the past as per certificate Companies belonging to Promoter whose name has been struck off from the Registrar of Companies

Certificate Document(s) Certificate 26

&

Certificate Certificate

SECTION VIII- INFORMATION ON FINANCIAL PERFORMANCE 1. Documents to carry audited accounts for the last 5 years and the stub period
2.

Auditors certificates considering ICAI accounting standards Comfort letter(s) at the time of SEBI filing and RoC filings of the RHP and Prospectus
12 CHECKLIST FOR THE INITIAL PUBLIC OFFERING

Auditors Certificate

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Confidential

Document type Certificate of Tax Benefits Auditors Report (as per Schedule II requirement) Adjusted P&L Account for the last 5 years and the stub period Adjusted Statement of Assets and Liabilities, with Net worth shown separately, Revaluation reserves should be deducted for the last 5 years and the stub period Adjusted cash flow statement for the last 5 years and the stub period Significant Accounting Policies Changes in Accounting Policies in the last five years Notes to Accounts & qualifications to a/cs Statement of adjusted accounting ratios Statement of aggregated related party transaction as per Accounting Standard 18 Statement of adjusted segmental information as per Accounting Standard 17 Statement of dividend paid for the last five years. Tax Shelter Statement (SEBI format) Capitalization Statement (SEBI format) Statement of Earning per share Break up of Sundry Debtors (separately showing break up of receivables from promoters/ promoter group/ group companies) Aging Schedule of Sundry Debtors Break up of Loans and Advances (separately showing loans/ advances to promoters/ promoter group/ group companies/companies in which directors are interested) Statement of adjusted Other Income Statement of adjusted secured loan showing details of terms and conditions Statement of adjusted unsecured loan (separately showing loans/ advances taken from promoters/ promoter group/ group companies/companies in which directors are interested) Details of Investments (both quoted investments with current market value and unquoted investments) Relevant details of all the contingent liabilities Outstanding due to small scale undertakings for more than 30 days Cost per share to the promoters and book value per share. Details of customer concentration (if the main customer(s) are foreign then details of the impacts on the financials due to currency fluctuations need to provided) Key Accounting ratios to be given as of the date of filing (to include any alteration in the capital structure after the date of audit), including EPS, NAV and RoNW and to be provided also in the post-diluted basis In case of change in standard denomination of shares, financial data, comparison of financial ratios should be presented pre-split and post split, and stock market data and capital structure should have adequate disclosures. Brief terms and conditions of the term loans including re-schedulement, prepayment, penalty, default, etc. be incorporated along with suitable risk factor(s) for the negative developments. Company to provide a list of
13 CHECKLIST FOR THE INITIAL PUBLIC OFFERING

3. 4. 5.

Certificate Mgmt confirmation/ Document(s) Auditors Certificate Auditors certificate Document(s)

6.

7.

8.

VC CORPORATE ADVISORS PVT. LTD.

For internal circulation only

Confidential

Document type
9.

10. 11. 12.

13. 14.

15.

outstanding loans and documentation in relation to the same. Disclosure and undertaking stating that at any given time there shall be only one denomination for the shares of the company and that the issuer shall comply with such disclosure and accounting norms specified by SEBI from time to time. Details of tax benefits, exemptions, subsidies etc. Bank letters or agreements, including sanction letters, confirming lines of credit of the Company. Review of all documents and agreements evidencing other material financing arrangements including sale and leaseback arrangements, installment purchases, etc. Review of compliance reports submitted by the Company or its independent public accountants to lenders. Review of copies of Forms 8 and 13 filed with the Registrar of Companies in respect of any security created. Copies of Form 17 where such charges have been satisfied along with Nil Due Certificates issued by the Banks/ Lenders Details of all loans, guarantees and counter guarantees given by the Company to or on behalf of any subsidiary of the Company.

Certificate

Document(s)

SECTION IX - MANAGEMENT DISCUSSION AND ANALYSIS 1. A summary of the past financial results (after adjustments) for the past three years with significant items of income and expenditure, including other income and nature of other income (recurring/ non-recurring) Comparison of items of income and expenditure for the last three years and the stub 2. An analysis of reasons for the changes in significant items of income and expenditure giving including nature of miscellaneous income and expenditure
3.

Auditors Certificate Certificate & Mgmt confirmation Certificate & Mgmt confirmation Mgmt confirmation

Other items of management discussion Unusual or infrequent events or transactions Future changes in relationship between costs and revenues Significant economic changes Known trends or uncertainties that will affect the business Breakup of turnover in terms of each segment in which the company operated Status of any publicly announced products Significant dependence on single or few suppliers Competitive conditions

SECTION X- GENERAL INFORMATION 1. Changes in the auditors in the last three years: date of appointment, resignation and the reasons for change. Also include the copy of the board resolution appointing the auditors 2. Copy of the Memorandum and Articles of Association (along with a soft copy). Proof of compliance with the Registrar of Companies in this respect 3. Any JV/ Shareholders Agreements/ Arrangements
4. 5. 6. 7.

Document(s)/ confirmation Document(s) Document(s)

Mgmt

Last five years annual report for the issuer company Restrictions, if any, on the transfer and transmission of shares Revaluation of assets during the last five years, if any Any other documents or information which, in your judgment, are significant
14 CHECKLIST FOR THE INITIAL PUBLIC OFFERING

Document(s) Mgmt confirmation Certificate

VC CORPORATE ADVISORS PVT. LTD.

For internal circulation only

Confidential

Document type with respect to the business of the Company and its subsidiaries or which should be considered and reviewed in making disclosures regarding the business and financial condition of the Company to prospective investors. SECTION XI- CONSENT LETTERS 1. Consent letters from customers and various intermediaries to be received by the BRLM SECTION XII- SEBI CERTIFICATES 1. Declarations by the company to be filed with SEBI at the time of SEBI filing SECTION XIII OTHER CERTIFICATES 1. All other certificates B. PRELIMINARY LIST OF INFORMATION REQUIRED ABOUT THE BUSINESS OF THE COMPANY Headings provided in this section are guidance towards structuring the Companys information on its business. The same will also be used for development of additional disclosures on the business and the industry in the Offer document. Corporate profile/ history of the Company Profile of the Company should cover the following: The various landmark developments, various firsts The various stages in the increase in the activities of the company, since incorporation of the Company, which have had a material effect on the profit/loss Details of any collaborations and tie-ups (marketing or other), present or being planned. Business of the Company Description of the business of the Company should include segment-wise revenue and key customers, current distribution network/coverage. Growth strategy should be developed to provide guidance to investors on the likely nature, mix and scale of business in future and financial performance. Key elements of the growth strategy in the following segments o IT Fulfillment o Corporate Communications o Domestic Publication o Overseas Publications Steps taken by the Company towards implementing its strategy

Certificate

Certificate

Business Model The Company may provide complete details of its business model and business plan, primarily from the perspective of positioning the business story to potential investors. Following is a preliminary and indicative list of issues, which may be covered, however the company may cover wider information based on its judgment on presentation of the business story. The business story should be targeting towards providing support to the Companys revenue and cost performance in the future. Revenue Analysis
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VC CORPORATE ADVISORS PVT. LTD.

For internal circulation only

Confidential

What is current market size of each of the segments in which the Company is operating. The data on each segment should be backed by relevant industry publications. o The details of the major domestic and overseas players in each of the segment in which the Company is operating. o Key factor which determine the bargaining capability of the Company vis--vis other players in the industry. o What is the cost advantage the Company enjoys vis-a-vis other players in the segment. Cost Analysis o Major elements of variable and fixed costs o Strategies to compress cost structure Investment plans o Is the Company operating at optimum capacity? Can the company increase volumes without incurring too much incremental expenditure? o Capex required for supporting expansion. Financing plan to support this capex. o New business initiatives planned by the Company o Plans to expand in overseas geographies Inorganic Growth Plans o Profile of the likely acquisitions / joint ventures if any. Business Advantage o Technology and business practices o Major competitive advantages derived by the company o Productivity achievements targets and plans to achieve them o Quality policy and systems for ensuring quality Competitive advantage o Major competitive advantages derived by the company o Achievements targets and plans to achieve them o Quality policy and systems for ensuring quality Marketing Advantage: o Marketing structure and sales set up o Segment wise positioning o Pricing strategy o Advertising and marketing strategy including Promotions, if any o Policy of the company in attracting/drawing customers. Organisation structure o What is the current organization structure? o What are the HR; Training and recruitment policies? o Who are the key people? What are their educational qualifications and work experience? Please highlight who amongst these are secondees? What is plan to move to an independent management structure? o What is the total employee strength? What is the number of employees in each segment/ business area? What are the planned additions? o What is the average cost per employee? R&D o Importance of R&D in the industry o R&D setup and budgets o Initiatives and key achievements SWOT analysis as perceived by management Other o (Potential) competition to the Companys business o Any stated dividend policy details of the same o Highlight a few decisions that emphasize the independent nature of the Board? o What is the current contracting strategy for equipment / manpower etc.? o
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VC CORPORATE ADVISORS PVT. LTD.

For internal circulation only

Confidential

o o o o o o o

Details of the ESOP structures? What are the commercial arrangements with the software developers/corporates/publication houses Details of debt contracted so far (loan agreements) and changes to terms, if any What is the billing, receivables and payables cycle? Detailed financial model with assumptions etc. Details of break-up of revenue by customer and product segment in the past 2 years: volumes, price and usage. Historical (2 years) cost break-up by variable and fixed costs. Shareholders agreement

INDUSTRY OVERVIEW The industry section of the Red Herring Prospectus should be prepared to inform the investors of the major industry parameters affecting profitability of the companies in the industry, prominently highlighting the aspects that are positive for the company and making investors aware of possible risks to the company. This should cover industry evolution and future outlook, including key demand drivers [All industry data is required to be supported by copies of industry reports which can be quoted as sources in the Red Herring Prospectus.]

17 CHECKLIST FOR THE INITIAL PUBLIC OFFERING