1. DUE DILIGENCE REPORT FOR BANKS
Apte Joshi & Associates, Company Secretaries
DUE DILIGENCE REPORT FOR BANKS

2. Apte Joshi & Associates, Company Secretaries
CONTENTS
S.No.
Particulars 1
Introduction, Meaning and Definition of Due Diligence 2.
Need for Due Diligence 3.
Points covered under Due Diligence Report 4.
Checklist for some vital points of Due Diligence Report (Sections of Companies Act, 2013 along with Corresponding Sections of Companies Act, 1956) 5.
MCA Clarification 6.
Role of Company Secretaries

3. INTRODUCTION, MEANING AND DEFINITION OF DUE DILIGENCE
Due Diligence is
Such Diligence (Thoroughness, Attentiveness, Carefulness, Conscientiousness) as a reasonable person under the same circumstances would use.
The care that a prudent person might be expected to exercise in the examination and evaluation of risks affecting a business transaction
MERRIAM - WEBSTER’S - DICTIONARY OF LAW

4. MERRIAM - WEBSTER’S - DICTIONARY OF LAW
DUE DILIGENCE IS
3.The process of investigation carried on usually by a disinterested third party on behalf of a party contemplating a Business transaction for the purpose of providing information with which to evaluate the advantages and risks involved/ associated with.
MERRIAM - WEBSTER’S - DICTIONARY OF LAW

5. NEED FOR DUE DILIGENCE
Misrepresentation and Fraudulent dealings are not always obvious or straight.
These are to be uncovered.
Proper Due Diligence explores and assesses the details behind the same or the intended transactions.
Thus, the need for Due Diligence is two fold i.e. investigative process for providing the desired comfort level about the potential investment and thereby to minimize the risk.

6. POINTS TO BE COVERED UNDER DUE DILIGENCE REPORT OF BANKS ISSUED BY RESERVE BANK OF INDIA VIDE CIRCULAR NO. UBD. PCB. NO. 49/ /

7. COMPOSITION AND CONSTITUTION OF BOARD OF DIRECTORS. POINT 2
SHAREHOLDING PATTERN OF THE COMPANY AND CHANGES THERETO IF ANY
POINT 3
ALTERATION TO THE MOA AND/OR AOA OF THE COMPANY, IF ANY
POINT 4
DISCLOSURES OF CONTRACTS IN WHICH DIRECTORS OF THE COMPANY ARE INTERESTED
POINT 5
COMPLIANCE OF THE PROVISIONS OF SECTION 185 OF THE COMPANIES ACT, 2013
(SECTION 295 OF THE COMPANIES ACT 1956)

8. LOANS AND INVESTMENTS MADE, GUARANTEES GIVEN, SECURITIES PROVIDED
POINT 6
LOANS AND INVESTMENTS MADE, GUARANTEES GIVEN, SECURITIES PROVIDED
POINT 7
AMOUNT BORROWED BY THE COMPANY AND THE BREAKUP THERETO
POINT 8
COMPLIANCE WITH THE PROVISIONS OF SECTION 73 TO 76 OF THE COMPANIES ACT, 2013 (SECTION 58A OF THE COMPANIES ACT, 1956)
POINT 9
DETAILS REGARDING CREATION, MODIFICATION AND SATISFACTION OF CHARGES OF THE COMPANY INVESTMENTS IN WOS/JVS ABROAD SECTION 77 TO 87 OF THE CA’ 2013
POINT 10
DISCLOSURE OF PRINCIPAL VALUE OF FOREX EXPOSURE AND OVERSEAS BORROWINGS

9. ISSUE, ALLOTMENT AND REDEMPTION OF SECURITIES POINT 11
INSURANCE OF ALL SECURED ASSETS
POINT 12
COMPLIANCE WITH ALL THE TERMS AND CONDITIONS OF LENDING BANK/INSTITUTION
POINT 13
DECLARATION AND DUE PAYMENT OF DIVIDEND SECTION 123 OF THE CA’ 2013
POINT 14
INSURANCE OF ALL THE ASSETS OF THE COMPANY
POINT 15

10. TIMELY PAYMENT OF STATUTORY DUES AND PROVISIONS FOR FUTURE.
NON-APPEARANCE OF THE NAME OF THE COMPANY AND/OR ANY OF IT’S DIRECTORS IN THE DEFAULTERS LIST OF RBI.
POINT 16
NON-APPEARANCE OF THE NAME OF THE COMPANY AND/OR ANY OF IT’S DIRECTORS IN THE SPECIFIC APPROVAL LIST OF ECGC.
POINT 17
TIMELY PAYMENT OF STATUTORY DUES AND PROVISIONS FOR FUTURE.
POINT 18
UTILIZATION OF FUNDS BORROWED FOR THE PURPOSE FOR WHICH THEY WERE BORROWED.
POINT 19
POINT 20
COMPLIANCE WITH THE PROVISIONS OF SECTION 186 OF THE COMPANIES ACT, 2013.

11. COMPLIANCE WITH THE APPLICABLE ACCOUNTING STANDARDS ISSUED BY ICAI.
SECTION 133 OF THE COMPANIES ACT, 2013
POINT 21
SECTION 143 AUDITORS REPORT
POINT 22
TIMELY CREDIT AND PAYMENT TO IEPF.
POINT 23
DISCLOSURE REGARDING PROSECUTION, SHOW CAUSE NOTICES, OFFENCES ETC. AGAINST THE COMPANY AND/OR ANY OF ITS DIRECTORS.
POINT 24
IF THE COMPANY IS LISTED COMPLIANCE WITH ALL THE PROVISIONS OF LODR REGULATIONS, 2015
POINT 25
COMPLIANCE WITH THE PROVIDENT FUND REQUIREMENTS.

12. CHECK LIST FOR SOME VITAL POINTS OF DUE DILIGENCE REPORT
Composition and Constitution of Board of Directors.
Disclosures of Contracts in which Directors of the Company are interested Section 188 of the Companies Act, 2013 (Sec. 297 of Companies Act, 1956).
Issue, Allotment and Redemption of Securities.

13. CHECK LIST FOR SOME VITAL POINTS OF DUE DILIGENCE REPORT
Compliance with the Provisions of Section 186 of the Companies Act, 2013 (Sec. 372A of Companies Act, 1956).
Compliance of the Provisions of Section 185 of the Companies Act, 2013 (Sec. 295 of Companies Act, 1956).

14. ISSUE, ALLOTMENT AND REDEMPTION OF SECURITIES
ISSUE OF CERTIFICATES FOR SHARES AND OTHER SECURITIES
REDEMPTION OF PREFERENCE SHARES
REDEMPTION OF DEBENTURES

15. ISSUE OF CERTIFICATES FOR SHARES AND OTHER SECURITIES
Check whether
The Company has allotted shares/debentures and entered the names of allottees in the register of members/debenture holders.
Company has issued and delivered Share Certificates as per Section 46 and 56 of the Companies Act 2013 (Sec. 84 and 113 of The Companies Act, 1956)
Company has filled Form PAS-3 for Return of Allotment with the Registrar. (Old Form 2 )

16. ISSUE OF CERTIFICATES FOR SHARES AND OTHER SECURITIES (Cont.)
Check whether
Company has executed Debenture Trust Deed in case of Debentures.
Company has registered transfer and transmission of shares as per Section 56 of the Companies Act, (Sec. 108 and 113 of the Companies Act, 1956)
Company has kept in abeyance any transfer, in case of Court-injunction.

17. REDEMPTION OF PREFERENCE SHARES
Check whether
the provisions contained in AOA have been Complied with.
the Company has filed Form SH-7 within 30 days from the date of redemption. (Earlier Form 5)

18. REDEMPTION OF DEBENTURES
Check whether the Company has
Filed Form CHG-4 and CHG-5 with the ROC. (Earlier Form No.17)
Created a Debenture Redemption Reserve for the redemption of debentures and credited adequate amount out of profits until such debentures are redeemed. (Section 71 of the Companies Act, 2013)

19. REDEMPTION OF DEBENTURES
Not utilized Debenture Redemption Reserve except for redemption of Debentures.
Paid Interest and Debentures are redeemed in time.
Complied with the order, if any, of Company Law Board.

20. COMPOSITION AND CONSTITUTION OF BOARD OF DIRECTORS
Check that the Company has
Minimum number of Directors-three in the case of a Public Limited Company and Two in the case of a Private Limited Company.
Taken action to bring the number to the minimum if the number had fallen below the minimum.
Appointed the first Directors in accordance with the articles, if it is a new Company.

21. COMPOSITION AND CONSTITUTION OF BOARD OF DIRECTORS (Cont.)
Check whether
The Provisions of Sections 152 of the Companies Act, 2013 have been duly complied with respect to retirement of Directors by rotation. (Earlier Sec. 255 and 256 of the Companies Act, 1956)
Persons other than Retiring Directors who were candidates for Directorship at the General Meeting had complied with the provisions of Section 160 of the Companies Act, (Sec. 257 of the Companies Act, 1956)

22. COMPOSITION AND CONSTITUTION OF BOARD OF DIRECTORS (Cont.)
Check whether
The appointment of Additional Director was in accordance with the Articles of Association of the Company.
The Board has filled up casual vacancy among Directors appointed in General Meeting, and such appointment is in accordance with the Articles of Association of the Company and was made in the meeting of Board.

23. COMPOSITION AND CONSTITUTION OF BOARD OF DIRECTORS (Cont.)
The authority of the Board under Section 161 of the Companies Act, 2013, if the Board has appointed any alternate/additional Director, during the period under review. (Sec. 313 and 260 of the Companies Act, 1956)

24. COMPOSITION AND CONSTITUTION OF BOARD OF DIRECTORS (Cont.)
Check whether
The appointment of any nominee Director during the period under review was in accordance with the Articles of Association of the Company and the Loan Agreement.
Also, whether approval of the Central Government, under Section 149 of the Companies Act, 2013, if required, has been obtained. (Sec. 259 of the Companies Act, 1956).
In case of listed Company, please check the appointment of Director and Composition of Board is in accordance with LODR Regulations, 2015

25. COMPOSITION AND CONSTITUTION OF BOARD OF DIRECTORS (Cont.)
Check whether
The office of any Director did not fall vacant on account of disqualifications with reference to Section 167 of the Companies Act, (Sec 283 of the Companies Act, 1956)
The Provisions of Section 169 of the Companies Act, 2013 were complied with, if any Director was removed before the expiry of his term of office. (Sec. 284 of the Companies Act, 1956)
The Director’s other Directorship were within the limits prescribed under Section 165 of the Companies Act, (Sec. 275 of the Companies Act, 1956)

26. DISCLOSURES OF CONTRACTS IN WHICH DIRECTORS OF THE COMPANY ARE INTERESTED Section 188 of Companies Act, 2013
Check whether
Register is being properly maintained by entering separate particulars as prescribed under Section 189 of the Companies Act, 2013 of all contracts or arrangements to which Sec. 188 and 184 of the Companies Act, 2013 applies. (Section 297 or Section 299 of the Companies Act, 1956)
Names of the Directors voting for or against the contract or arrangement and the names of those remaining neutral are recorded.
Entries have been made within 7 days from the date on which contract was made in Form MBP-2.

27. Section 188 of Companies Act, 2013 (Cont.)
DISCLOSURES OF CONTRACTS IN WHICH DIRECTORS OF THE COMPANY ARE INTERESTED
Section 188 of Companies Act, (Cont.)
Check whether
The previous approval of Central Government has been obtained if the Company has paid up Capital of Rs. 1 Crore and more .
the Register has been signed by each Directors present at Board Meeting.
the Register has been signed and maintained in accordance with the terms of Resolution.
Register has been maintained and kept open for inspection.

28. DISCLOSURES OF CONTRACTS IN WHICH DIRECTORS OF THE COMPANY ARE INTERESTED
Check Board Resolution for contracts u/s 188 of the Companies Act, 2013.
The consent of the Board of Directors by passing a resolutions at the meeting of the Board is required if a company enters into any contract or arrangement for sale, purchase or supply of any goods and property of any kind including leasing of such property, availing or rendering of services, appointment of agent for purchase and sale of goods material services or property and underwriting the subscription of any securities or derivatives thereof.

29. RELATED PARTY TRANSACTIONS SECTION 188 OF COMPANIES ACT, 2013
This Section also covers appointment of related party to any office or place of profit in the company or its subsidiary or associate company which was earlier covered by Section 314 of the 1956 Act.
b. In case of the Company having paid up capital of more than 1 Crore no contract or arrangement shall be entered into except with prior approval of the Company by a special resolution which, required Central Government’s approval under Section 297 of 1956 Act.
c. This Section also includes sale, purchase and leasing of immovable property which was specifically excluded under the Companies Act of 1956.

30. RELATED PARTY TRANSACTIONS SECTION 188 OF COMPANIES ACT, 2013 (Cont.)
Every contract or arrangement shall be entered into with Board or Members approval by Special Resolution as the case may be and shall be referred to in the Board’s Report along with the justification for entering into such contract.
If the provisions of the above sections are not abided by then, in case of listed companies be punishable with the imprisonment for a term which may extent to 1 year or with fine which shall not be less than Rs and shall not exceed Rs. 5 Lakh or with both. In case of any other Company, be punishable with a fine which shall not be less than Rs. 25,000 and shall not exceed Rs. 5 Lakh or with both. 30

31. COMPLIANCE OF THE PROVISIONS OF SECTION 185 OF THE COMPANIES ACT, 2013
Check whether any Loan has been made to
Any Director of the Lending Company or of a Company which is its holding Company.
Any Partner or relative of such Director
Any such firm in which any such Director or relative is a partner
Any private Company of which such Director is a Director or member
Any Body Corporate in which 25% or more voting power is exercised by any of such Director of the Company.
Any Body Corporate whereof, the Board, Managing Director or Manager are accustomed to act in accordance with directions of the Board or any Director of lending Company.

32. LOAN TO DIRECTORS SECTION 185 OF THE COMPANIES ACT, 2013
Check that previous approval of Central Government has been obtained u/s 185 of the Companies Act, 2013 (except housing loan to MD) (Sec. 295 of the Companies Act, 1956)
The Act states that no Company shall, directly or indirectly, advance any loan, including any loan represented by a book debt, to any of its directors or to any other person in whom the director is interested or give any guarantee or provide any security in connection with any loan taken by him or such other person unless loan is given to MD or Whole–time Director as a part of the conditions of service extended by the company to all employees; or pursuant to any scheme approved by the members by a special resolution. 32

33. LOAN TO DIRECTORS SECTION 185 OF THE COMPANIES ACT, 2013
2. Interest on loan should be at a rate not less than the bank rate declared by RBI.
3. This Section is applicable to all the Companies including Private Companies as they are not specifically excluded.
4. In addition to this Section 295 required Central Government’s approval for providing loans to Director and the related parties which is not provided in this Section, which states that giving of loans and providing of guarantees and securities in connection with any loan to or from the Directors and Related Parties is prohibited if not in accordance with this section. 33

34. SECTION 186 OF THE COMPANIES ACT, 2013
Check whether Provisions of Sec. 186 are applicable. (Sec. 372A of the Companies Act, 1956)
If applicable, check whether the aggregate of the loans made, guarantees given, securities provided or investments made by the Company are within the limits of 60% of its paid up share capital and free reserves or one hundred percent of its free reserves, whichever is more

35. CHECKLIST FOR SECTION 186 OF THE COMPANIES ACT, 2013
The Company has not defaulted in complying with provisions of Sec. 73 and 75 of the Companies Act, (Section 58A of the Companies Act, 1956)
Board resolutions were passed with the consent of all the Directors present at the meeting
The Company has complied with the guidelines, if any, issued by the Central Government u/s 186.

36. CHECKLIST FOR SECTION 186 OF THE COMPANIES ACT, 2013 (IF THE AGGREGATE HAS EXCEEDED THE PRESCRIBED LIMITS)
Board resolutions were passed unanimously approving the impending transaction subject to approval by the members present at General Meeting.
The prior approval of the Public Financial Institutions concerned, where any term loan is subsisting shall be obtained. (Section 186(5) of the Companies Act, 2013)

37. No omnibus special resolutions have been passed.
CHECKLIST FOR SECTION 186 IF THE AGGREGATE HAS EXCEEDED THE PRESCRIBED LIMITS (Cont.)
General Meetings (AGM/EOGM) have been held and specific Special Resolutions have been passed stating the limits, particulars of Bodies Corporate, in which investment is proposed to be made or loan or security or guarantees to be given, the purpose and the specific source of funding etc.
No omnibus special resolutions have been passed.
MGT-14 filed with ROC within 30 days of passing of such resolution.

38. CHECKLIST FOR SECTION 186 WITHOUT THE AUTHORIZATION OF SPECIAL RESOLUTION
In the case of Guarantees given by the Board of Directors, without the authorization of Members by way of a special resolution, check that:
Exceptional circumstances existed which prevented the Company from obtaining the approval;
The Board passed a resolution authorizing the same in accordance with the provisions of Sec. 186.
Notice of such General Meeting indicated clearly the specific limits, the particulars of Bodies Corporate for which the guarantee was given.

39. CHECKLIST FOR SECTION 186
In the case of loans, check whether the interest rate at which it was made was not lower than the prevailing Bank Rate as prescribed u/s 49 of the RBI Act, 1934.
The details regarding the transaction were entered chronologically in the register maintained in this regard as per the provisions of Sec. 186(9).
Register of investments is kept at Registered Office of the Company (Section 186(10)).

40. LOANS AND INVESTMENT BY COMPANIES Section 186 of Companies Act, 2013
The Company shall unless otherwise prescribe make investment through not more than 2 layers of investment Companies. It provides that no Company shall directly or indirectly give any loan to person or Body Corporate or give guarantee or security in connection with such loan to Body Corporate or acquire by way of subscription purchase the securities o0f any other body corporate exceeding :
60% of its paid – up capital, free reserves and Securities Premium account or,
100% of Free Reserves and Securities Premium account
Which ever is more.
Unless prior approval by means of special resolution in general meeting is obtained. 40

41. THE COMPLIANCES UNDER THIS SECTION TO BE ENSURED :
Disclosure in the financial statement the full particulars of the loans given guarantee or security provided, investments made and the purpose for which the proposed loan is to be utilized.
Resolution sanctioning the loan, guarantee, security and investment is passed in the Board meeting with the consent of all the directors present and approval of Public Financial Institution where any term loan is subsisting.
Every Company shall keep a register containing particulars of such loan, guarantee, security and investments. 41

42. Insurance of all secured Assets of the Company
Compliance Inputs:
Original insurance policies
Register of Assets
Collateral Security offered to the lenders
Stock Statement
Premium payment receipts

43. Points to be checked for Insurance Policies
Verify the original insurance policies and check carefully the details of assets covered by the policy.
Check that the Company has taken a Policy from a General Insurance Company registered with IRDA.
Check the period of policy. Policies are generally issued for a period of 1 year.
Generally, Fire Insurance policies covers immovable properties, stocks etc. earthquake, Terrorism etc. are given as add on covers. Vehicles should have valid Comprehensive Insurance Policies.

44. POINTS TO BE CHECKED FOR INSURANCE POLICIES (Cont.)
Check that the sum insured represents the market value/ Replacement Value as the case may be(not book value) or else, under insurance will be applicable. Name, address, situation (with Building No. etc.) of the Company should tally with the records.
Verify the name of mortgagee.
Verify any endorsement during the policy period, noting the changes in the sum insured, situation, risk, etc.
Check the compliance of Terms of Insurance

45. PARA NO. 13 OF THE REPORT : the lending Bank/Financial Institution
Compliance with the terms and conditions, set forth by-
the lending Bank/Financial Institution
at the time of availing any facility and also during the currency of the facility.
Compliance Inputs –
Copy of Lending Agreement
Sanction Letters, etc.

46. COMPLIANCE WITH THE TERMS AND CONDITIONS, SET FORTH BY LENDING INSTITUTIONS
Check operations of the Company
Check Securities offered on the Term Loan
Check whether there is any default in payment of Interest/Principal Instalments
Check information submitted to Bank(s)/ Financial Institutions
Check for utilization of Moneys advanced

47. Check payment of Liabilities/ Dues
COMPLIANCE WITH THE TERMS AND CONDITIONS, SET FORTH BY LENDING INSTITUTIONS (Cont.)
Check payment of Liabilities/ Dues
Check Books of Accounts as well as Financial position of the Company
Scrutinize records related to Directors/Promoters and their meetings
Ensure compliance of indenture as regards to appointment of Technical Experts, Licenses/Consents
Check MOA & AOA
Verify legal proceedings, if any related to Takeover of Management

48. The Company has diverted the funds for other purposes.
NAME OF THE COMPANY AND OR ANY OF ITS DIRECTORS DOES NOT APPEAR IN THE DEFAULTERS LIST OF RBI
The Company has defaulted in meeting its payment/repayment obligations to the lender even when it has the capacity to honour the said obligations.
The Company has defaulted in meeting its payment/repayment obligations to the lender and has not utilised the finance from the lender for the specific purpose for which it was availed of.
The Company has diverted the funds for other purposes.

49. Check whether the disputed dues have been paid.
NAME OF THE COMPANY AND OR ANY OF ITS DIRECTORS DOES NOT APPEAR IN THE SPECIFIC APPROVAL LIST OF EXPORT CREDIT GUARANTEE CORPORATION
Check that the name of the Company or its Director(s) does not appear in the Specific Approval list of Export Credit Guarantee Corporation
The Company has paid all its Statutory dues and satisfactory arrangements had been made for arrears of any such dues –
Check whether the disputed dues have been paid.
Check that as regards payments of liabilities/dues of all the ground rents, rates, taxes, dues, duties and outgoings immediately on their becoming due.
Check whether satisfactory provisions have also been made for meeting tax liabilities for subsequent years.
Check whether the Company has a structured compliance reporting system in place on statutory payments

50. Check for the utilization of the moneys advanced
CHECK WHETHER THE BORROWED FUNDS FROM BANKS/ FINANCIAL INSTITUTIONS HAVE BEEN USED BY THE COMPANY FOR THE PURPOSE FOR WHICH THEY WERE BORROWED OR NOT ?
Check for the utilization of the moneys advanced
Check the Financial Position of the Company

51. CHECK WHETHER THE BORROWED FUNDS FROM BANKS/ FINANCIAL INSTITUTIONS HAVE BEEN USED BY THE COMPANY FOR THE PURPOSE FOR WHICH THEY WERE BORROWED OR NOT ?
Check for the utilization of the moneys advanced
Check the Financial Position of the Company

52. PROSECUTIONS INITIATED AGAINST OR SHOW CAUSE NOTICES RECEIVED BY THE COMPANY FOR ALLEGED DEFAULTS/OFFENCES
Check whether the Company has been issued ant show cause notice for non-compliance of any of the provisions of the Companies Act , 1956/Companies Act, 2013, if so verify the explanations given by the Company while assessing enormity of the violations in question.
Check whether the notices of prosecution/show cause have been placed before the Board;
Check whether any inspection or investigation has been ordered under the Companies Act , 1956 or under Companies Act, 2013 and if so, assess the status at the time of issuing the Compliance Certificate;

53. PROSECUTIONS INITIATED AGAINST OR SHOW CAUSE NOTICES RECEIVED BY THE COMPANY FOR ALLEGED DEFAULTS/OFFENCES (CONT.)
Check whether any fines and penalties or any other punishment was imposed on the Company;
Check whether any order has been issued under the Companies Act, or under section 441 of Companies Act, 2013(as and when the latter is notified) for compounding of the offences; if so check whether the Company has complied with the orders passed by the concerned Authorities.

54. Frequent circular transactions between various bank accounts.
SUGGESTED ALERTS
Disproportionately large cash payments in relation to normal requirements in a company of its size.
Frequent circular transactions between various bank accounts.
Inordinate delay in submission of stock statements/book debts/quarterly filings to the Bank(s).
Large differences between MSOD/QIS2/FFR etc. with stock statements and inventory regularly and particularly as on date of Balance Sheet.
Delay/default in meeting statutory payments.
Any apparent unrelated payment(s) that come to notice.

55. SUGGESTED ALERTS (CONT.)
Disproportionate holding of work-in-progress (WIP).
Regular on account payments to creditors.
Regular on account payments from debtors.
Any differential pricing system to associates.
Any attachment of Bank accounts from Statutory Authorities (input from Bank)
Borrowings from unconventional sources.
Dishonour of cheques.

56. Suggested Alerts (Cont.)
Unduly large sales returns/return of bills.
Lack of tie ups in project finance resulting in diversion of short term funds.
Winding up cases if any filed against the Company.
Insolvency proceedings against any of the promoter(s)/director(s).

57. Prosecutions initiated against or show cause notices received by the Company for alleged defaults/offences
Check whether the Company has been issued ant show cause notice for non-compliance of any of the provisions of the Companies Act , 1956/Companies Act, 2013, if so verify the explanations given by the Company while assessing enormity of the violations in question.
Check whether the notices of prosecution/show cause have been placed before the Board;
Check whether any inspection or investigation has been ordered under the Companies Act , 1956 or under Companies Act, 2013 and if so, assess the status at the time of issuing the Compliance Certificate;

58. Prosecutions initiated against or show cause notices received by the Company for alleged defaults/offences (Cont.)
Check whether any fines and penalties or any other punishment was imposed on the Company;
Check whether any order has been issued under the Companies Act, or under section 441 of Companies Act, 2013(as and when the latter is notified) for compounding of the offences; if so check whether the Company has complied with the orders passed by the concerned Authorities.

59. ROLE OF COMPANY SECRETARIES
From Bankers Point of View:
The Company Secretaries will work as a extended arm of the Bank.
The Due Diligence Report issued by us will give a high level of comfort to the Banks.
Thus the Banking Community in general and the regulator in particular have reposed trust and enormous responsibility on Professionals.

60. ROLE OF COMPANY SECRETARIES
From Professionals Point of View:
The introduction of Due Diligence Reporting by Company Secretary in practice is expected to lay down strong foundation for good Governance, culture among borrowing corporate and correspondingly enhance the comfort level of the Banks by reducing the information asymmetry prevailing currently.

61. ROLE OF COMPANY SECRETARIES
Just as religion and spirituality make a nation great, Good governance in the sense of ethical, moral and character will make a company great. The society without values, ethics and character is like a multistory building without a sound base which may CRUMBLE & CRUMBLE.

62. Thank You Presented by: Mr. Raghavendra J. Joshi
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