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16. It is further argued by Mr. Devitre that the Appellant, as a legitimate part of its due diligence exercise, had obtained various Statutory Auditors' Certificates, including Certificate dated 13th September, 2011, to the effect that they had read the Minutes of the Meetings of the Board of Directors and of the Committees up to 10th September, 2011, and, in addition, had also read the unaudited financial statements for the period 1st April, 2011 to 31st August, 2011 and found no material change in the share capital, liabilities, loans, etc. of the Issuer Company. Therefore, there was no reason for the Appellant to develop any suspicion as regards the financial affairs, etc. of the Issuer Company as on 22nd September, 2011, when the RHP was filed.

17. It is also argued on behalf of the Appellant that even though the requirement of obtaining SA's certificates is statutory in nature yet, it did not solely rely upon the said Auditors' certificates and had made its own exhaustive enquiries independently as well with the management of the company commencing from June 2010 onwards. In addition, the Appellant had obtained relevant updated certificates, undertakings and affirmations certifying that there was no material change before presenting the draft RHP to the Respondent. Further, during the due diligence process, Appellant had periodic meetings with the promoters and management of the Issuer Company wherein Appellant, inter alia, discussed with them the business of the Issuer Company, their experience, visited various premises of the Issuer Company including its manufacturing units to better understand their products, production processes and, plant and machinery etc. All this was done purely with a view to keep a tab on the progress of the objects of their proposed IPO. Appellant had also verified various documents relating to the business, properties, capital structure, litigation, objects of the issue, government approvals, management, promoter and promoter group entities, etc. of the Issuer Company. During the process of due diligence of the Issuer Company, Appellant had also sought from the Issuer Company various documents/information as per the Appellant's exhaustive checklist and had properly verified and documented the same in the data room.

20. The Statutory Auditor of the Issuer Company completed restatement of audited financial statements of the last five years ending 31st March, 2010 and submitted their report which was duly reproduced in its entirety in the DRHP. The same was updated in the RHP with the restated financials for the year ending 31st March, 2011, based on the updated report of the Statutory Auditor. As part of the due diligence process, the Appellant had also relied upon the confirmations/submissions of the Issuer Company's Statutory Auditor (Comfort Letters) specifically intended to provide an update of any material developments in the Issuer Company, subsequent to the date of the last audited financial statements. Further, in respect to the material disclosures, the Comfort Letters issued by the Statutory Auditor categorically confirmed that except as disclosed in the RHP, no material change was there in share capital, increase in current liabilities, secured and unsecured loans, deferred payment liabilities, contingent liabilities or total liabilities or decrease in current assets, loans and advances, fixed assets, total assets or net worth of the Issuer Company, etc. In addition to the above, Appellant had periodic discussions with the Statutory Auditor at various stages during the due diligence process. The Appellant submits that the Statutory Auditor's certificates in the nature of limited review of quarterly financial statements are recognized by the stock exchanges as required in the listing agreement. Thus, the submission of the Appellant is that it had done its own due diligence expected of an MB in respect of matters known to it and contained in the RHP/Prospectus.