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Preliminary Information Requirements for the Due Diligence
The period of coverage of due diligence is the 2 fiscal years (Year ending 31/03/2006 and
31/03/2007) and period ended 30 September 2007 (referred to as most recent interim
period) financial information
1 Overview
1.1.1 Brief write-up on the background of the group including the following:
• Group structure
• Organisation chart with management reporting relationships
• Brief on products and solutions/services offered by the Company
• List of facilities (owned and leased) from where the Company operates
• Number of employees in each location
• Research and development capabilities
1.1.2 Copy of the “Information Memorandum” of the Company, if any.
1.1.3 Names and addresses of all bankers (including facilities granted by each bank) and
solicitors (subsidiaries and India entity separately).
1.1.4 Copies of the incorporation documents of the group companies
1.1.5 Summary of key acquisitions/ new business services/ discontinued business in the last 2
years.
1.1.6 Write up of the Accounting System and accounting policies followed by the Company
1.1.7 Write up on the planning and budgeting systems followed in the Company.
1.1.8 Write up of key financial and management controls in the group.
1.1.9 Certified true copies of the minutes of meetings of all the Board of Directors and
shareholders and senior management held for the last 2 years and during period ended
30/09/2007.
1.1.10 Key MIS reports and budgets prepared and monitored by management for the last 2
years and period ended 30/09/2007 (quarterly/monthly and annual). Variances between
budgets and actuals and reasons for the same.
2 Financial Statements
2.1.1 Audited consolidated financial statements for the last 2 fiscal years and latest interim
information available.
2.1.2 Workings for the preparation of the consolidated financial statements.
2.1.3 Inter company transactions and balances.

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2.1.4 Stand alone financial statements for the last 2 fiscal years and the most recent interim
period (in case of consolidation of subsidiaries, if any).
2.1.5 Significant accounting policies followed within the group. Differences in accounting
policies, if any, amongst the group entities (if any).
2.1.6 Changes in accounting policies in the last 2 years and contemplated changes to the
accounting policies.
2.1.7 Estimates used in the preparation of the financial statements.
2.1.8 Management recommendation letters distributed by statutory auditors and management
response to the same for the last 2 years.
2.1.9 Internal audit reports for the last 2 fiscal years.
3 Income Statement (for last two fiscal years and most recent available interim
information)- Revenue
3.1.1 Revenue model for each service offering (eg product sale, customisation etc.) provided
by the company.
3.1.2 Accounting policy followed for revenue recognition for the different products/service
offerings.
3.1.3 Quarterly revenue and margins by product/service offering for the last 2 fiscal years and
the most recent interim period.
3.1.4 Quarterly revenues and margins by customer and product for the last 2 fiscal years and
the most recent interim period.
3.1.5 Quarterly revenues and margins by geography for the last 2 fiscal years and the most
recent interim period.
3.1.6 Computation of revenue for projects as per percentage of completion method for for the
last 2 fiscal years and the most recent interim period.
3.1.7 Revenues deferred by customer and service offering, Reasons for deferral and the
expected timing of revenue recognition.
3.1.8 Instances of one time sales for the last 2 fiscal years and the most recent interim period.
3.1.9 Accounting policy used for capitalisation of research and development costs of
developing products
4 Customers
4.1.1 List of customers won/lost during the last 2 fiscal years and the most recent interim
period. Significant customer losses prior to such period.
4.1.2 Reasons for customer losses in the past, if any.

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4.1.3 Number of repeat customers in the last 2 years and the recent most interim period.
4.1.4 List of the top 10 customers for the last 2 fiscal years and most recent interim period and
the following information:
n Customer contracts and related correspondence
n Length of customer relationship;
n Credit terms
n Unusual terms, if any
n Provision for doubtful debts; and
n Committed revenues subsequent to the latest period end
4.1.5 Orders in hand and in pipeline at the latest period end.
5 Costs and expenses (for the last 2 fiscal years and most recent interim period)
5.1.1 Quarterly cost of revenues by product offering, implementation, customisation etc for the
last 2 fiscal years and most recent interim period
5.1.2 Quarterly SG&A expenses for the last 2 fiscal years and most recent interim period
5.1.3 Schedule of software development expenses, if any. Details of capitalized costs and the
computation for determining the basis of capitalization.
5.1.4 Details of warranty costs provided for and incurred. Instances of costs incurred for work
not accepted and returned and provision for the same.
5.1.5 Policy relating to commissions and discounts and amounts relating to the same.
5.1.6 Details of all legal, professional and consultancy fees incurred during the year; and
5.1.7 Details of exceptional, extra-ordinary and unusual items in the income statement.
6 Balance Sheet (for the last 2 fiscal years and most recent interim period)
Share Capital and reserves
6.1.1 Details of shareholding and details of dividend pay-outs in the last 2 years.
6.1.2 Particulars of consideration received for share allotments, if any,
6.1.3 Details of equity shares issued without consideration.
6.1.4 Details of reserves recorded in the financial statements.

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Fixed Assets
6.1.5 Schedule of fixed assets including original cost, accumulated depreciation and net book
values for major classes of assets for the for the last 2 fiscal years and most recent
interim period
6.1.6 Depreciation methods and rates used.
6.1.7 Details of borrowing costs/ overhead costs capitalized for the last 2 fiscal years and most
recent interim period.
6.1.8 Details of any software development costs capitalized.
6.1.9 Details of software included in fixed assets, segregated between system and application
software.
6.1.10 Complete list of authorised licenses for software packages in use/installed. Details of
any software used without authorized licenses.
6.1.11 List of additions and deletions for the last 2 fiscal years and most recent interim period.
6.1.12 Planned capital expenditure for the year and details of capital commitments.
6.1.13 Capital work-in-progress (if any), copies of contracts entered into, invoices/details of
progress payments and advances on capital account;
6.1.14 Details of fixed assets that may be idle, impaired or written down including particulars of
intangible assets, if any
6.1.15 Annual maintenance costs incurred for assets and procedures in relation to the same.
6.1.16 Latest management reports on the physical verification of fixed assets;
6.1.17 The fixed assets register agreed/reconciled to the general ledger;
6.1.18 Amount and nature of all hire purchase and lease contracts entered into as at the latest
period end (including copies of the hire purchase and lease agreements);
6.1.19 Lease agreements of office premises, major buildings and fixed assets utilised by the
Company;
6.1.20 Summarise future cash pay-outs for leases/hire purchase arrangements.
6.1.21 Summary of insurance coverage of fixed assets by:
n Nature of fixed assets;
n Insured value;
n Details of the type of insurance taken;
6.1.22 Details of all insurance policies on fixed assets and copies of the insurance policies; and

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6.1.23 Particulars of all charges created on fixed assets.
Investments
6.1.24 Schedule of investments at each of the fiscal year ends and the interim period covered.
6.1.25 Agreements relating to past acquisitions/sales if any.
6.1.26 Policy for accounting for past acquisitions and divestitures,
6.1.27 Details of diminution in value of these investments, if any
Accounts receivable
6.1.28 Ageing analysis of debtors each of the fiscal year ends and the interim period covered in
the following age bands less than 30 days, 31 to 60 days;61 to 90 days; 91 to 180 days;
181 to 365 days; and above 365 days.
6.1.29 Movements in the provision for doubtful debts account during the periods
6.1.30 Note on credit and collection policies followed by the Company;
6.1.31 Details of collections from trade debtors after the latest period end
6.1.32 Management comments on all receivable outstanding for more than 90 days highlighting
the reason for the delay and the expected recovery date.
6.1.33 Allowances for uncollectible accounts and write-offs of other current assets;
6.1.34 Details of credit notes issued after the balance sheet date;
6.1.35 List of litigations/disputes with customers and copies of correspondences.
Financing arrangements/ Cash and Bank
6.1.36 Schedule of cash and bank balances and facilities obtained from each bank
6.1.37 Copies of bank confirmations at the latest period end.
6.1.38 Bank reconciliation statements for all banks at the latest period end.
6.1.39 Copies of loan agreements/line of credit facilities.
6.1.40 Details of security and charges of the loans.
6.1.41 Summarise key covenants of the loan agreements highlighting the loan amount, interest
rates, restrictive clauses, key covenants, defaults by the company etc
6.1.42 Summary of the defaults in repayments and non-compliances with the key covenants at
the latest period end.
6.1.43 Summarise repayment schedule for the outstanding loans at the latest period end..

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Current assets
6.1.44 Schedule of other current assets (loans and advances, prepaid expenses, deferred charges,
deposits etc.) by category.
Account payable and accrued liabilities
6.1.45 Schedule of accounts, which comprise accounts payable and accrued expenses.
6.1.46 Accounts payable ageing schedule at each of the last 2 fiscal year ends and the most
recent interim period.
6.1.47 List of all major approved suppliers for all categories of significant purchases
6.1.48 Supplier contracts and outstanding supplier claims;
6.1.49 Purchasing policy.
6.1.50 Schedule of advance billings by customers and deferred revenues.
6.1.51 Details of long term purchase commitments if any entered into by the Company;
6.1.52 Details of restructuring and other reserves if any.
6.1.53 Other current and non – current liabilities.
Deferred taxation
6.1.54 Computation of deferred taxation at the end of the last 2 fiscal years and the recent most
interim period.
6.1.55 Details of historical positions taken if any.
7 Cash flow statements
7.1.1 Consolidated Cash flow statement for the last 2 fiscal year ends and the most recent
interim period end.
8 Contingent liabilities
8.1.1 Details of significant claims (customers, suppliers, others) , other disputes, pending or
threatened litigation in connection with the business along with a narration of the current
status of the same.
8.1.2 Details of post retirement benefits, employee incentive schemes, unfunded pension and
liability in respect of contract labourers.
8.1.3 Significant commitment and contingent liabilities for
• Self insurance
• Sales warranty and repair

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9 Related Parties
9.1.1 Complete list of all related parties and related party transactions.
9.1.2 Details of amounts due to/ from related parties as at the latest period end.
9.1.3 Details of key terms for related party transactions.
9.1.4 Details of allocation of common costs and expenses from related parties/group
companies.
9.1.5 Details of transfer pricing arrangements with group/inter-companies.
9.1.6 Copies of all agreements with related parties.
10 Personnel
10.1.1 Details of employees of the Company by grade including a quantitative reconciliation of
staff, i.e. Staff (by Grade) at the period beginning, additions and deletions (with reasons
for leaving - retirement/dismissal/resignation/other) to staff strength and the position for
the periods covered.
10.1.2 Summarise employees under sub-contracting for each period end.
10.1.3 Copies of the agreements with sub-contractors.
10.1.4 Break-up of employees Quarter-wise from April 2005 to September 2007 into the
following:
• Billable (segregated into business segments);
• Billed (by business segments)
• Support.
10.1.5 Details of Employee Utilization (billed/billable %) and attrition - quarter-wise for the last
2 fiscal years and the most recent interim period.
10.1.6 Details of Senior Management Compensation and employment contracts.
10.1.7 Details of employee incentives paid in the periods covered and summarize by category
of employees.
10.1.8 Copies of employee incentive compensation plans like bonus, sales commission etc.
10.1.9 Existence of any pension or profit sharing plans with employees.
10.1.10 Summarise employee retrenched/separated from the company in the periods covered and
the notice pay/ retrenchment compensation paid.
11 Taxation (all tax records for the periods covered)
11.1.1 Tax returns for all open tax years
11.1.2 Historical positions taken with respect to both domestic and foreign tax issues.

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11.1.3 Note on the tax benefits available to the Target.
11.1.4 A brief note on the status of various pending tax proceedings and issues under litigation;
11.1.5 Computation of tax provision for the periods covered
11.1.6 Reports issued regarding completed and ongoing tax examinations, administrative
proceedings, or tax litigation,
11.1.7 Basis for structuring various material transactions in open tax years (including
acquisitions, dispositions, joint ventures, and intercompany transactions) and the tax
treatment thereof
11.1.8 Structuring of material transactions in all open tax years (including acquisitions,
dispositions, joint ventures, and intercompany transactions) and the tax treatment thereof
Note:
Please note that we may require additional information during the course of our work and we
look forward to your co-operation during the course of our work.