FINANCIAL DUE DILIGENCE (FDD):

Under Financial Due Diligence, our team investigates thoroughly into the financial affairs that are prone to have a material impact on the different prospects of the said target business. We go beyond the routine traditional audit and look at the specific business from a purely commercial perspective. The intent being to identify, quantify and substantiate the multiple value drivers or inhibitors of the planned transactions.

We do Buy and Sell Side Due Diligence

Buying Side Due Diligence helps in:

• Providing best insights into the company operations
• Structuring and valuing the transactions
• Negotiating the purchase price and agreements
• Determining future financing strategies
• Identifying operational areas to focus after deal closure
• Assist in determining where the value in the company is and where the "black holes" are

Some crucial questions which we help answer for the client are:

• What is the quality of past earnings and risks in attaining the projections?
• What are the current and likely WC necessities of the business?
• What are the dangers that the numbers are not right?
• What is the precision of provisions in the balance sheet?
• What are the off-balance sheet obligations?

Sell Side Financial / Vendor Due Diligence helps

• Negotiate the finest deal
• Allows superior competition
• Retain control of intercession
• Suited to the procedure where multiple bidders or investors are involved
• Meeting the timelines
• No shocks/"black holes"
• Reduces straining on the management
• Reduces interruption to business operations
• Least post-completion and parting issues

Tax Due Diligence (TDD):

Tax Due Diligence aids in reducing the risk of getting hidden tax liabilities and risk exposures related with such transactions. Tax Due Diligence is significant due to the following:

• Identification of material tax exposures
• Validating various representations made by the seller
• Validating norms in the valuation of the buyer
• Structuring deals in a tax competent manner
• Identifying multiple tax-saving opportunities
• Understanding the exact goal

Typical direct-tax issues which arise in due diligences are

• Penalty and interest revelation
• Cover-up of tax implications
• Transfer-pricing insinuations
• Tax exposure on account of business reorganization in the past
• Analysing the carry-forward of the losses after the transaction
• Analysing the availability of tax holidays post the transaction
• Analysing the tax positions on inferences and exemptions claimed
• MAT credit entitlement
• Tax litigation

Typical Direct Tax issues which arise in Due Diligences are:

Service Tax

• Non-payment of the service tax under reverse charge as a recipient
• Input of service distribution
• Availing and utilization of the CENVAT
• Services that do not qualify as Export
• Service tax on various reimbursements
• Payments to related vendors and parties

VAT/CST

• Incorrect sorting of goods
• Non-deduction of withholding related to the Work Contract Tax
• Incorrectly availing of various input tax credits
• Pending status or lost statutory forms

Excise

• Incorrect classification of goods
• Issues in area-based exemptions
• Valuation of supplies to related entities
• Availing CENVAT credit in relation to trading and exempted activity

Miscellaneous Issues

• Imports from associated parties without special valuation bench order
• Issues in availing benefits under the Foreign Trade Policy and other related compliances
• Non-payment of the Entry tax/Octroi/LBT
• Non-fulfilment of different incentive conditions

LEGAL DUE DILIGENCE (LDD):

Through our in-house counsels and external counsels, we are well-equipped to do the legal due diligence. For an investor a legal due diligence is critical for decision-making. It helps in defining liabilities, negotiating a lower price and handling risk of in a multifaceted country like India. The exercise shelters various aspects like Corporate Laws, Loans and Borrowings, Real Estate, Intellectual Property, Contracts, Employment, Licenses, Litigation, Competition Law, etc

Typically, a legal due diligence is a study of the Target, focusing on the following:

• Regulatory issues
• Corporate compliances
• Verifying Loan documents to check for any restrictions on M&A
• Title over Real Estate and other tangible property
• Title over Intellectual Property and the risks associated with it
• Compliance with Employment Laws
• Existing or potential litigation against the target
• Licenses and regulatory approvals required for the Business
• Compliance with environment and other industrial laws
• Material Contracts

INVESTIGATIVE DUE DILIGENCE

Through our close tie-ups with Corporate Investigators, we also offer Investigative Due Diligence on the target company. Information is classically gathered in a inobtrusive way through various partners, social media, journalists, investors, friends and family, litigation records, corporate records, etc.

This involves the following

• Reputational due diligence on the target company, promoters, etc in a discreet way
• Due diligence which is aimed at anti-bribery, corruption, ethics and integrity.
• Anti-bribery, corruption, ethics and integrity of the target companies are the biggest concerns for foreign acquirers.
• Post-transactional issues are investigated as well
• We also conduct due diligence on Start-ups for Venture Capital Funds.