There is a great number
of translations of this term into Russian. This phrase is translated as "proper
carefulness", "close supervision", "checking of proper fairness" or "thorough
investigation of reliability of information given".
All these interpretations
do not fully reflect the sense the laconic English phrase has. The most appropriate
translation of Due Diligence into Russian is "thorough investigation of
reliability of information given".
We offer our services on all types of Due Diligence, specifically:
Operational
Due Diligence - operational analysis
which describes business history including main stages of its development with comments
concerning markets, competitors, customers, product (services, production methods),
rendering of services, suppliers and business system in a whole. The information
on management structure and senior managers, main characteristics of labor
force is described briefly; advantages, disadvantages and deterrents are
reported. The guidelines of analysis are: historical development of the company;
organizational structure, management, personnel; sales; purchases.
Financial
Due Diligence - financial analysis which
concludes on enterprise ability to bring income. It is reasonable to carry out financial
analysis together with the enterprise audit in course of which accounting
keeping correctness, credibility of statements and other documentation and
their conformity with normative acts is determined. In the course of financial analysis
the assets and liabilities structure of the enterprise, its income, financial rates
and financial planning and control system are reviewed, fundamentals of cost
estimate and acknowledgement of obligations are also considered. The factors underlying
reported business results for the last years and unusual and unperiodic rates influencing
the results considerably are explained and commented. Cash flow character over the last period of
time and factors having considerable influence on it are reviewed. The comment on
management forecasts concerning commercial activity perspectives is given with
particular attention to their comparing with current trade volume.
Tax
Due Diligence - analysis of business
tax condition whereby a company tax burden and tax optimization opportunities
are estimated. The analysis of transactions concluded by the company from the point
of view of tax risks, violation of tax legislation is carried out. Risk
estimation of claims from tax bodies is carried out simultaneously. Also on this
objective setting, the tax optimization opportunity may be revealed in the
course of tax analysis.
Legal
Due Diligence - legal review defines
the company activity in accordance with the current normative acts in sphere of
civil, labor and corporate law. The following is under consideration: constituent
documents; titles of property ownership; major transactions concluded and transactions
with interest to the conformity with the requirements of antimonopoly and currency
legislation; certificates, patents, trademarks, licensees, fulfillment of
contracts concluded and checking of their conformity with the current
legislation. In the course of legal review the recommendations on changing of
enterprise documents wording for its conformity with the existing law rules are
made.
Market
Due Diligence - analysis of market
position, life perspectives, opportunities of production and technologies development,
matching with market needs data, with company activity estimation, main market
participants, on the basis of thorough investigation of the technologies
existing at the market with used at the given enterprise and estimation of
their viability for life and progress. Company position in competitive environment
is determined, market development potential and perspectives are analyzed, and
opportunities of company development in compliance with market dynamics are
estimated. At this stage the market development and competition forecasts are made,
potentials and availability of resources necessary for the future development
are analyzed both in the company, its partners and competitors.
Environmental
Due Diligence - review of company
environmental effect. Within this direction the environmental effect the enterprise
activity has or will have in the result of investment project is examined. This
analysis became particularly urgent during the last time in connection with the
increased activity of large international investors such as European Bank for
Reconstruction and Development which is the strategic investor of many Russian
enterprises. Upon consideration of the project the Bank makes the minimization of
environmental damage as one of the conditions of its participation in it. In case
of detected violations the recommendations on ecology damage minimization of
acquired enterprise are given.
Technical Due
Diligence: evaluation of technological process
basis including analysis of technical base, technologies applied and enterprise
productive potential.
