COMPLIANCE MANAGEMENT AND DUE DILIGENCE

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Lesson 4
DUE DILIGENCE — AN OVERVIEW
Learning Objectives ... 81
Introduction ... 82
Why Due Diligence? ... 82
Objectives of Due Diligence ... 82
Scope of Due Diligence ... 83
Types of Due Diligence ... 84
A. Business Due Diligence ... 84
B. Legal Due Diligence ... 86
C. Financial Due Diligence ... 86
Factors to Be Kept in Mind While Conducting Due Diligence ... 86
Objectives and purpose ... 86
Planning the schedule ... 87
Negotiation for time ... 87
Risk Minimisation ... 87
Information from external sources ... 87
Limit the report with only material facts ... 88
Structure of information ... 88
Stages/Process of Due Diligence ... 88
Transactions Requiring Due Diligence ... 90
Documents to be Checked in Due Diligence Process ... 91
The Concept of Data Room in Due Diligence ... 91
Data Room – Virtual or Physical ... 92
Major Advantages of Virtual Data Room ... 93
Some Disadvantages of Virtual Data Room ... 93
Virtual and Physical Data Room – A comparison ... 94
Data room administration and data security ... 95
Due Diligence vs Audit ... 95
Annexure I - Non Disclosure Agreement ... 95
LESSON ROUND UP ... 98
SELF TEST QUESTIONS ... 99
Lesson 5
ISSUE OF SECURITIES
Learning Objectives ... 100
Introduction and Regulatory Framework ... 102
Introduction ... 102
Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009 [(SEBI(ICDR) Regulations] ... 103
II. Due Diligence - Initial Public Offer (IPO)/Further Public Offer (FPO) ... 106
A check list on Major IPO Compliances under SEBI (ICDR) Regulations 2009 ... 110