Due Diligence is the process by which confidential, legal, financial and other
material information is exchanged, reviewed and appraised by the parties to a
business transaction, which is done prior to the transaction. Due diligence is
an analysis and risk assessment of an impending business transaction. It is
the careful and methodological investigation of a business or persons, or the
performance of an act with a certain standard of care to ensure that
information is accurate, and to uncover information that may affect the
outcome of the transaction.
Due diligence is primarily a way to reduce exposure to risk. The process
ensures that a party is aware of all the details of a transaction before they
agree to it. For example, a broker-dealer will give an investor the results of a
due diligence report so that the investor is fully informed and cannot hold the
broker-dealer responsible for any losses.
The procedures and analyses ultimately represent a window into the target
Company’s success and potential, including what opportunities exist to grow
the business further to meet your goals and objectives. Due diligence exercise
is needed to confirm the nature and genuineness of a business, Identify
defects/weaknesses in the target company and to avoid a bad business
transaction, to gather information that is required for valuation of assets, and
to negotiate in a better manner. In nutshell due diligence is a SWOT analysis
of an investment which is essentially required to make an informed decision
about a potential investment.
Depending on its purpose, due diligence takes different forms. A company
that is considering an M&A will perform a financial analysis on a target
company. The due diligence might also include an analysis of future growth.
The acquirer may ask questions that address the structuring of the acquisition.

The acquirer is also likely to look at the current practices and policies of the
target company and perform a shareholder value analysis.
Due diligence can be categorized as “hard” due diligence, which is concerned
with the numbers on the financial statements, and “soft” due diligence, which
is concerned with the people within the company and its customer base.
The most important types of Due Diligences are:
● Due Diligence for Public Issue
● Due Diligence for Takeover and Acquisitions
● Due Diligence for Joint Ventures and Investments
● Due Diligence for Forex and Overseas Transactions
● Legal Due Diligence (including Secretarial due diligence)
● Financial Due Diligence (including Tax due diligence)
The investigation or inspection would cover:
● Compliance with applicable laws
● Regulatory violations or disciplinary actions
● Litigation and assessment of feasibility of pursuing litigation
● Financial statements
● Assets – real and intellectual property, brand value etc.
● Unpaid tax liens and/or judgements
● Past business failures and consequential debt
● Exaggerated credentials/Fraudulent claims
● Misrepresentations or character issues
● Cross-border issues – double taxation, foreign exchange fluctuation,
sovereign risk, investment climate, cultural aspects.
● Reputation, goodwill and other intangible assets.

Our specialized team of legal and financial professionals, employ a multi-
disciplinary approach in analyzing the transactions and industry related risks,
commercial and financial viabilities, prospective growth and future
contingencies, tax implications and work hard to deliver the possible solutions
and suggestions.