pvtltd.co

Audit & Assurance

Financial Due Diligence

Financial, tax, GST, and ROC due diligence for buyers, investors, and lenders — built on Schedule III financials, Form 3CD, and GSTR evidence.

Reviewed by CA Harun Raaj, ICAI Reg. No. 238303·Last reviewed:
Starting from Discuss with usTypical timelineFinancial Due Diligence

Financial due diligence tests what the financials claim — revenue quality, tax and GST positions, and ROC compliance — using Schedule III financials, Form 3CD, and GSTR records as the evidence base, before you invest, lend, or acquire.

What is included
  • • Financial review — Schedule III financials against ledgers and bank statements
  • • Revenue and margin quality testing with customer and contract evidence
  • • Tax position review — return history, Form 3CD, and outstanding liabilities
  • • GST review — GSTR filings, ITC claims, and liability reconciliation
  • • ROC record check — annual filings, charges, and director KYC
  • • Findings report with quantified exposure and a deal-readiness list
Documents required
  • • Audited financial statements for the last 3 years with schedules
  • • Trial balance, ledgers, and bank statements
  • • Income tax returns, Form 3CD, and GST returns
  • • Statutory registers, charge documents, and ROC filings
Government fees

See the fee table below for the statutory filing charge and common delay logic.

Legal basis
  • • Section 128 of the Companies Act 2013
  • • Section 129 of the Companies Act 2013
  • • Section 143 of the Companies Act 2013
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Process

How the service works

The workflow is built to be predictable: document collection, legal review, filing, and post-filing follow-through.

Step 1Scope

Scope the review

We agree the purpose — investment, lending, or acquisition — and the entities and periods in scope.

Step 2Data room

Set up the data room

We list the documents needed and coordinate the data room with the target or investee.

Step 3Financials

Test the financials

We trace the Schedule III financials to the ledgers and bank records and test revenue and margin quality.

Step 4Tax & GST

Review the tax and GST trail

We check the tax returns, Form 3CD, and GST filings for gaps and outstanding liabilities.

Step 5ROC

Check the ROC record

We verify annual filings, charges, and director KYC against the MCA record.

Step 6Report

Deliver the findings

You get the findings report with quantified exposure and the list of what to clear before closing.

AEO summary

Financial due diligence tests what the financials claim — revenue quality, tax and GST positions, and ROC compliance — using Schedule III financials, Form 3CD, and GSTR records as the evidence base, before you invest, lend, or acquire.

The evidence base decides the answer

Due diligence is only as good as the records behind it. Schedule III financials give the presentation; the trial balance, ledgers, and bank statements give the reality; the Form 3CD and GST returns give the tax and indirect-tax truth; and the MCA record gives the company law picture. We read them against each other — a revenue line that matches the bank and the contracts is real, one that does not is a finding.

That cross-reading is where the value sits: not in repeating what the financials say, but in finding where they quietly differ from the records underneath.

  • • Financials traced to ledgers, bank, and contracts
  • • Tax position tested through Form 3CD and returns
  • • GST and ROC records cross-checked for gaps

Findings are priced, not ignored

Every due diligence exercise ends in a decision, and the decision is made on the findings. A buyer adjusts price for the overstated margin; a lender conditions the facility on the unfiled return being cleared; an investor walks from the ITC risk. The findings report is the instrument that makes the deal honest.

Our job is to make sure the findings are complete, quantified, and clear — so the decision-maker works from the real position, not the presented one.

  • • Each issue quantified with its exposure
  • • Deal adjustments priced from the findings
  • • Clearance list delivered for pre-close fixes

Government fees

Fee breakdown

ItemFeeNotes
No standalone government feeNilThis is a professional assignment; fees apply only if a connected filing is part of the scope.

Timeline

Typical turnaround

Typical timeline usually means a 2–4 weeks turnaround, assuming documents are complete and any board or shareholder approvals are already in place.

Pricing note

This is a professional engagement — fees track the scope of records reviewed and the number of entities; there is no standalone government fee.

Related services

Keep the company moving

Statutory Audit

Statutory audit under s.143 Companies Act 2013 — the financials base that due diligence tests

Deal Due Diligence

Buy-side and sell-side DD for acquisitions — quality of earnings, normalised EBITDA, and working capital

Forensic Audit

Investigation support where the review finds exceptions that need evidence-backed analysis

Tax Audit

Tax audit in Form 3CA/3CB with Form 3CD — the trail the tax review builds on

FAQ

Frequently asked questions

What does financial due diligence actually test?
It tests whether the financials are real and complete: revenue traceable to customers and contracts, margins consistent with the cost records, tax positions backed by returns and Form 3CD, GST consistent with the GSTR filings and ITC ledger, and the ROC record clean — no unfiled returns, unsatisfied charges, or lapsed KYC.
How is this different from an audit?
An audit under s.143 of the Companies Act 2013 gives an opinion on whether the financials are fairly presented. Due diligence goes further and answers the deal question: what is the real earnings power, what liabilities are hidden, and what will this cost me if I invest or acquire.
What happens if we find issues?
The findings report quantifies each issue — an overstated revenue line, an ITC claim that could be rejected, an unfiled return with late fees. The buyer or lender then prices those findings into the deal: an adjustment to price, a warranty, or a condition to be cleared before closing.
What should you send us before we start?
Send the audited financials for the last 3 years with schedules, the trial balance and bank statements, tax returns with Form 3CD, and the GST returns. That is enough for us to scope the review and set up the data room list.

Canonical reference: https://www.pvtltd.co/services/due-diligence

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