1. “Due” means appropriate and Dilligence means Care and Effort. Dilligence is derived from the Latin word “Diligo” which means “Love”

2.  Due Dilligence is an analysis and risk assessment of an impending business transaction.  It is basically a background check  It is used to investigate and evaluate a business opportunity  It covers all aspects of the past, present and a predictable future.  It covers the entire gamut of business, touching upon technical, legal, finance, etc.

3.  Collect material information  Conduct SWOT Analysis  Improve the bargaining strength  Take an informed decision  Identification of areas where warranties and representations required  Ensure complete and accurate disclosure  Bridge the gap between the existing and the expected  Enhance the confidence of all stake holders

4.  Misrepresentations and fraudulent dealings are not always obvious  To protect the interests of the company  To identify the defects and weekness in the system  It is done with a view to a) Withdraw the deal, b) Adjusting the valuation of the investment, c) Solving problems uncovered

5.  Compliance with applicable laws  Regulatory violations  Litigation / tax disputes  Financial statements  Assets – Real and Intellectual Property  Past business failures  Exaggerated credentials  Cross border issues – double taxation  Reputation, goodwill, intangible assets

6.  1) Business Due Dilligence  2) Legal Due Dilligence  3) Financial Due Dilligence

7.  Operational Due Dilligence  Strategic Due Dilligence  Technical Due Dilligence  Intellectual Property Due Dilligence  Environmental Due Dilligence  Human Resource Due Dilligence  Information Security Due Dilligence

8.  It covers the legal aspects of the business to see whether any potential legal pitfalls are there in the business.  It includes both inter-corporate and intra- corporate transactions.  It includes independent document verification with the concerned authorities.

9.  It includes review of accounting policies, review of internal audit procedures, cash flow, potential liabilities, tax implications, internal control systems, etc.  It is basically an analysis of tax compliance, identification of risk areas, tax planning and opportunities.

10.  To understand the purpose of the transaction  To plan the schedule which includes, steps to be followed, areas to be checked, aspects to be covered, information and other material to be required, etc.

11.  1) Pre-Dilligence  2) Dilligencce  3) Post Dilligence

12.  Signing the Letter of Intent and Non- Disclosure Agreement  Receipt of Documents  Identifying the Issues  Organising the papers  Creating a data room  The Check-list is invariably exhaustive.

13.  Outcome of Dilligence would be  Deal Breakers  Deal Diluters  Deal Cautioners  Deal Makers

14.  Post Dilligence will result in rectification of non-compliances and further activities based on the finding of the dilligence.

15.  Mergers, amalgamations and Acquisitions  Joint ventures and collaborations  Venture Capital Investment  Public Offer

16.  Non-availability of information  Unwillingness to provide support  Providing incorrect information  Complex tax policies and hidden liabilities  Multiple regulations and its applicability  Multiple layers in the reporting system  Absence of proper MIS

17.  Focus follow-up questions  Ask several people the same questions  Polite persistence  Independent check with regulatory authorities

18.  Company Secretaries are competent professionals to take care the Due Dilligence work.  Also as a Compliance Manager in the company, Company Secretaries are equipped with all the regulatory framework connected to the industry.