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Probe Research

Company Secretary using Probe42 to increase efficiency
From RoC Search Reports to Company Valuations: How Company Secretaries Can Leverage Probe42
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“Why does it take so much time to prepare an RoC search report?”

“Is there an easy way to monitor companies where I provide Secretarial services?”

“Can I access and evaluate a company’s detailed legal history at a glance?”

As a Company secretary, these are some questions that might arise on a daily basis. If these resonate with you, discover how Probe42 can increase process efficiency, and reduce turnaround time.

 

Key Tasks

One of the most time-consuming tasks for company secretaries is preparing an RoC search report. With Probe42, this can be done at the click of a button, reducing the time and cost required to do a search report.

Key tasks such as Valuation, transfer pricing, NCLT & high court cases, business development, insolvency, and monitoring & consulting, are all possible on a single platform.

Valuation is made easier with peer comparison, securities allotment, and financials on unlisted companies. Transfer pricing is streamlined with instant access to the financials of all private companies and standardized formats that are widely used by banks and acknowledged by the RBI.

Improve Business development with lead generation from newly incorporated companies and LLPs, identifying companies due for auditor rotation, and tracking auditor details, their clients, and remuneration.

Access the detailed legal history of a company with a detailed summary of  NCLT & high court cases, including arbitration matters, corporate disputes, civil cases, criminal appeals, enforcement of orders, and taxation matters.

 

Insolvency proceedings of corporates can be overseen, cases filed by/against corporates can be explored, and preferential transaction audits can be conducted with Probe42.

Lastly, monitoring companies where you provide compliance services, assessing the compliance and financial risk of key customers & client suppliers, and 3rd party validation of information provided can all be done with Probe42.

 

About Probe42

  • Probe42 is an independent information services company that specializes in offering financial information on unlisted Indian companies.
  • Our platform has been widely utilized by banks and corporations to aid key processes like business development, credit analysis, KYC and competitor analysis.
  • Access over 28 Lakh companies, with 500+ Data points on each company, curated from 746 verified data sources on the Probe42 platform.

Probe42 Explainer – The MCA V3 Rollout
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There has been a lot of conversation around the V2 to V3 migration by the Ministry of Corporate Affairs (MCA). We have created a brief explainer for you that provides an overview of the changes, as well as an associated timeline. We’ve also compiled a list of documents that are currently available on the V3.

The Ministry of Corporate Affairs is an Indian Government Ministry that is primarily responsible for enforcing the Companies Act 2013 and the erstwhile Companies Act 1956, the Limited Liability Partnership Act, 2008, and the Insolvency and Bankruptcy Code, 2016. It is in charge of regulating Indian enterprises in the industrial and service sectors.

What exactly are V2 and V3?

Companies in India file e-forms with the MCA for a variety of reasons, including Company Incorporation, Charge Creation/Modification, Directors/KMP’s Appointment/Resignation, address change, and so on. These e-forms were previously available as defined PDF forms that could be downloaded from the MCA website until Version 2 (V2). Users were required to download, fill out, and upload the appropriate e-forms to the MCA website.

In Version 3 (V3), webforms have replaced PDF-based e-forms. Users can choose their webforms and fill out the fields directly online, with added convenience, such as the ability to save a partially completed form and file it later.

While in V2, a “My Workspace” section with a list of notices from the MCA and circulars issued by them was available; in V3, there is a personalised “My Application” section which allows users to view all the forms filed by them, as well as the status of these forms such as – ‘Pending for DSC upload’,  ‘Approved’, ‘Under Processing’, etc.

Also, login in the V3 is possible via email ID than just a user ID. This allows for an OTP to be sent to the user’s mobile and e-mail address for increased authenticity.

Current Status

  • All LLP forms and the 65 company forms listed above have been moved to the V3 system, and will be available as web forms.
  • Migration of filled-in forms from V2 to V3: The MCA announced that all documents from V2 will eventually move to V3, and V3 to VPD. 

The View Public Documents (VPD) service

The MCA allows you to view the public documents of all registered companies/ LLPs through its View Public Documents (VPD) service. Users can view the public documents of a company/ LLP on payment of a fee.

  • The documents filed in V2, are all available in the VPD.
  • However, none of the filed V3 documents are currently available for viewing in the VPD.

Annexure

46 company forms made available in V3

Additional Resources https://www.mca.gov.in/content/dam/mca/pdf/SPICEplus-and-linked-filings-FAQs-V3-20230122.pdf

5 Key Ratios for Commercial Loan Underwriting
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Over time, financial ratios have been used to quickly evaluate the financial and operational health of a company. Ratios are precise, yet elaborate enough in their own way.

Most of these ratios can be calculated through financial statements and then compared with industry benchmarks to get a broader understanding. For bankers, the interpretation of the ratio is far more critical than the computation. Validation of solvency and performance are the two essential characteristics of such financial ratios.

Selection of critical ratios is essential for bankers to access asset management, capital management, liquidity, risk, and profitability.

To make it easier we have listed five key financial ratios required for commercial loan underwriting:

5 Key Financial Ratios to Commercial Loans Undertaking - A detailed InfographicProfit Margin Ratio: This is a widely used profitability ratio, and it indicates the amount of profit generated over sales. This ratio measures the company’s ability to earn enough profit to sustain its business. Profit margins often vary from industry to industry, so, a prudent banker should always compare it with close competition and with the average industry standard.

Debt Ratio: This is a solvency ratio, which indicates the debt level of the borrower as a percentage of total assets. A lower debt ratio suggests more stable business and the higher is reverse. A ratio of 0.5 or less is considered as healthy, as this means the company has two times the assets as compared to liabilities. Anything more than 0.5 should be carefully examined before consideration.

Loan to Value (LTV) Ratio: This is a risk assessment coverage ratio that is very critical for mortgage underwriting. The LTV ratio ensures that the collateral is worth higher than the size of the loan. Higher the LTV ratio, more the risk involved.

Debt Service Coverage Ratio (DSCR): This is a liquidity ratio, which indicates the amount of cash generated by the business to service its debts (principal, interest, and leases). DSCR validates the borrower’s capacity to pay back the debt and keep running the business. DSCR between 1.25-1.5 is a relatively safe number to consider. However, it differs from business to business and depends on the risk aversion policies of the bank.

Net Worth to Loan Size Ratio: This ratio is used to compare the borrower’s net worth to the size of the requested loan. A high net worth indicates stable financial health, ultimately ensuring the repayment of the loan.

Ratio analysis is a proven technique to carry out quantitative analysis. However, financial ratios often vary across different industries and sectors, and comparisons between entirely different companies might not be advised.

So, it is advisable to examine industry peers through PEER COMPARISON to get more meaningful insights about the industry.

Use Probe42 to

  • Access key ratios by downloading financial statements in an excel format
  • Compare with peers in the same industry
Migrating from Internet Explorer to Edge, Chrome or Firefox
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Microsoft has retired Internet Explorer and will go out of support on June 15, 2022. Click here to read more from Microsoft on this. Continuing to use a browser not supported will result in serious security risks and vulnerabilities. Click here to read more on what Microsoft says. Considering this it is advisable to migrate to other new browsers like Microsoft Edge, Google Chrome or Mozilla Firefox.

If you are working in an organisation like Bank, Large Corporates etc., browser installations will be mostly managed by the internal technical support team. In such cases, please raise a ticket requesting your technical support team to install Microsoft Edge, Google Chrome or  Mozilla. Kindly note you can have more than one browser on your PC if you want.

 

Please find below steps to download and install browsers on your own if you have the rights to install browsers.

I. Steps to Download and Install Microsoft Edge:

In most computers Microsoft Edge will be built-in by default. Meaning you dont have to separately download and install them. To check if you have Microsoft Edge Installed or not, Open your start menu and search for Microsoft Edge. If install you will see search result like in below screenshot. You can click on “Open” to open and start using Microsoft Edge.

If Microsoft Edge is not installed, please follow below steps to install Microsoft Edge..

  1. Open your current Internet browser and go to the Microsoft Edge download page.
  2. Click the Download button, depending on your version of Windows.
  3. Follow the on-screen instructions to install Microsoft Edge.

II. Steps to Download and Install Google Chrome:

  1. Open your current Internet browser and go to the Google Chrome download page.
  2. Click on Download Chrome Button to download latest version of Google Chrome.
  3. Follow the on-screen instructions to install Google Chrome.

III. Steps to Download and Install  Mozilla Firefox:

  1. Open your current Internet browser and go to the Mozilla Firefox download page.
  2. Click on Download Firefox button to download latest version of Mozilla Firefox.
  3. Follow the on-screen instructions to install Mozilla Firefox.

 

 

 

Understanding business information landscape
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Understanding business information landscape :

 

When it comes to understanding the information landscape, banks and businesses need to plan around the following 4 types of information sources and availability. This is normally with respect to the companies you want to lend to, or evaluate as a customer or supplier. You will need to understand these companies to get a better understanding of these companies before you do business with them.

 

  1. Private and Confidential information :

Such information are confidential and private information where you need the target company to share the information with you. In many cases, you will need to sign an NDA with the company. We have seen bankers, investment bankers, purchase department officials visit the target company to get a better understanding of the company. Sometimes this will involve the target company’s most recent financials, the last few months orders, etc. In order to access such information, you need to be on the verge of doing business with the target company and they in turn allow you access to non-public information.

 

  1. Bureau Information :

The concept of Bureau was setup by regulators, where adverse loan repayment related information on the business or individuals behind the business is shared with the Bureau, which in turn shares such adverse information with other bureau members. You don’t want one bank giving a loan to a business, when it is simultaneously defaulting the loan with another bank. Bureau’s can either be the approved entities by regulator and in some cases, the regulators themselves have setup such mechanisms to share information within the banking circles. Unfortunately, such information is privy to banks and other lenders. Corporates wanting to understand their customers or suppliers cannot access such information.

 

  1. Consent Based information :

With the proliferation of several structured source of information with the regulators, like GST, IT filings, bank statements, etc there is an increasing trend towards accessing such information based on consent – essentially the target company will need to provide you permission to access such information. It would probably be easier for a lender to access such information when the target company is looking to borrow. On the other hand, if the target company is a customer or a supplier, it would be a bit awkward to even ask for such information.

 

  1. Public Information :

Over the past 15 years, we have seen a proliferation of information available on companies in India. This covers various source like the MCA (financial, borrowing, shareholding, etc), Court records (legal cases from Supreme Court, High Court, District Court), rating, GST filing, news, etc. Some of these sources are available directly from the internet. In most other cases, you will need to be a registered user and get information upon payment or access documents. Such information is available publicly and it is a good first step to evaluate your potential borrower, customer or supplier. The information is quick to get, does not need permission from the target customer and helps with an initial first cut evaluation.

 

On the whole, there has been a significant evolution in the way one can evaluate companies in India over the past decade – and we believe this is part of the digital India journey – and you can benefit from this journey too. Ease of doing business is becoming real.

 

Most of the Public Information on a company can be accessed on Probe42.