Suggestive format for Due Diligence Report

DUE DILIGENCE REPORT for [Name of the Listed Entity]

[Pursuant to Regulation 10 (3) of the SEBI (Delisting of Equity Shares) Regulations, 2021]

To,

The Board of Directors

(Company Name)

In terms of Regulation 10 of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 (“Delisting Regulations“), I/we, _________________________, Peer Reviewed Practicing Company Secretaries, have been appointed vide the Resolution of the Board of Directors passed by _____________________________ Limited (hereinafter referred to as the “Company”) having CIN________________ and having registered office at_______________ in the meeting held on ______, to carry out the due diligence in accordance with Regulation 10(3) and other applicable provisions under the Delisting Regulations and issue a Due Diligence Report (“DDR“).

Background:

1. In terms of Regulation 8 of the Delisting Regulations, an Initial Public Announcement dated (“Initial Public Announcement“) was issued on behalf of , the acquirer as defined in the Delisting Regulations (“Acquirer“) inter alia expressing their intention to:

(a) Acquire_______________ fully paid up equity shares of the Company, having a face value of INR_______ each, (“Equity Shares“) representing__________ % of the paid-up capital held by the public shareholders of the Company (as defined under the Delisting Regulations and to be referred to as “Public Shareholders“), either individually / collectively or together with other members of the Promoter Group or along with the persons acting in concert, as the case may be; and

(b) Consequently voluntarily delist the Equity Shares from the stock exchanges where the equity

shares of the company are presently listed namely,_________________ (collectively, “Stock Exchanges“), by making a delisting offer in accordance with the Delisting Regulations (“Delisting Proposal“).

2. The present Capital structure including the details of the Authorised, Subscribed, Issued, Paid up and Listed Equity share Capital of the Company is placed at Annexure I.

3. Shareholding Pattern of the Company as on__________ (current date) is placed at Annexure II.

4. The distribution of public shareholding as on______ (current date) is as per Annexure III.

5. The list of Top Twenty-Five shareholders (other than Acquirer) as on ______ (date previous to Board Meeting date) is placed at Annexure IV.

Verification:

1. On the basis of the information received from/furnished by the Board of Directors of the Company, as required under sub-regulation 2 of Regulation 10 of the Delisting Regulations, for the purpose of carrying out the due diligence, I/we have examined the following:

(a) The details of buying, selling and dealing in the Equity Shares of the Company by the Acquirer(s) and their related entities (including members of Promoter Group) during the period of two years prior to the date of Board Meeting (i.e., ______________ ) held to consider the Delisting Proposal (“Review Period”) including the details of the Top Twenty-Five shareholders, for the said period;

(b) The details of off-market transactions of the aforesaid persons/ shareholders for the Review Period;

(c) Relevant additional document/ filing/ records/ information such as ……………….. ( to fill up the additional documents examined) including the information mentioned in clauses (a) and (b) for a longer period of time from______ , as sought and made available to us and the explanations provided by the Company.

The same is placed at Annexure V

2. For the purpose of verifying applicability and compliance of securities laws, we have identified the following regulations and their applicability:

Observation:

Basis review of the aforesaid information/ document, set out below is our analysis/ observations:

a) For Acquirer and their related entities:

a. During the Review Period, we did not notice any change in the shareholding of the Acquirer and their related entities, except as follows:

b. As on date, the Acquirer hold_____________ Equity Shares, representing to__________ % paid up equity share capital of the Company.

b) For Top Twenty-Five Shareholders:

i) During the Review Period, Top Twenty-Five Public Shareholders have overall (net) bought______ Equity Shares of the Company.

ii) The Acquirer has confirmed that neither of them nor their related entities or other members of the Promoter Group have any connection, direct or indirect, with the Top Twenty-Five Public Shareholders.

Certification:

I/We hereby certify that, during the Review Period:

• The buying, selling and dealing in the equity shares of the company carried out by the Acquirer or its related entities and the Top Twenty-Five Shareholders is in compliance with the applicable provisions of securities laws;
• The Acquirer has not, directly or indirectly, –
• employed any device, scheme or artifice to defraud any shareholder or other person; or
• engaged in any transaction or practice that operates as a fraud or deceit upon any shareholder or other person; or
• engaged in any act or practice that is fraudulent, deceptive or manipulative –

in connection with delisting of equity shares of the Company sought or permitted or exit opportunity given or other acquisition of equity shares made under Delisting Regulations.

Assumption & Limitation of Scope & Review:

1. Ensuring the authenticity of documents and information furnished is the responsibility of the Board of Directors of the Company.

2. This DDR is based on due diligence of documents/ information shared with us by the Company for our review. Our responsibility is to give report based upon our examination of relevant documents and information. This is neither an audit nor an expression of opinion.

3. Various concepts viz. defraud, deceit, fraudulent, deceptive, manipulative are used in the SEBI Delisting Regulations, however parameters/methodology for determining the same are not prescribed therein. By reading these terminologies it can be construed that the Acquirer shall not directly or indirectly cause any loss to the Public Shareholders by adopting any malpractice. Based on publicly available information, we have checked whether the Acquirer or the Company has common registered office or directorship. We do not have any negative observation.

From the above details, we can conclude that the Acquirer has not;

(i) Employed any device, scheme or artifice to defraud any shareholder or other person;

(ii) Engaged in any transaction or practice that operates as a fraud or deceit upon any shareholder or other person; and

(iii) Engaged in any act or practice that is fraudulent, deceptive or manipulative.

4. We are not expressing any opinion on the Floor price and/or the price at which the shares would ultimately be delisted. We have assumed that the Company/ Acquirer would comply with the applicable provisions related to floor price. Further, we are not an investment adviser or tax advisor or a broker/ dealer. This report should not be construed as investment/ disinvestment advise.

5. This DDR is solely for the intended purpose of delisting of equity shares of the Company and for your information and it is not to be used, circulated, quoted or otherwise referred to for any purpose other than Delisting purposes and as required under the Delisting Regulations.

For XYZ & Associates Company Secretaries

Name…………………………………

FCS…………………………………

CP………………………..

PR………………………..

Date …………………………………………………………………..

Place ………………………………………………………………….

UDIN:

ANNEXURE I

CAPITAL STRUCTURE OF THE COMPANY AS ON THE DATE OF THIS REPORT

AUTHORISED CAPITAL

ISSUED CAPITAL

SUBSCRIBED CAPITAL

PAID UP CAPITAL

LISTED CAPITAL

Note : In case of a difference between issued and listed capital, the reasons for the same may be given over here.

ANNEXURE II

ANNEXURE III

The distribution of Shareholding as on _______ (current date):

–

ANNEXURE IV

Details of Top Twenty-Five shareholders (other than Acquirer) as on ______ (date previous to Board Meeting date):

ANNEXURE V

Details of Share Transactions during the Review Period:

Surce : ICSI