Due Diligence

The main objective of Due Diligence is to provide the Client with the most complete and true information on the entity’s actual financial situation and all risks, which could have a significant negative effect on its financial situation.
The goal of Due Diligence is to MINIMIZE BUSINESS RISKS in all fields of activity of the analyzed entity.
Due Diligence is a procedure of comprehensive analysis and examination of legal, tax, financial and other aspects of the entity’s activities.
Legal Due Diligence represents an expert examination of the entity’s documents, a complete legal analysis of the entity's business activities for a definite period with an analysis of all possible risks.  
Legal Due Diligence comprises:
  • Legal analysis of foundation documents;
  • Legal analysis of the subscribed capital formation, the shareholders;
  • Examination of the rights in immovable property including land plots;
  • Examination  of legality of the entity’s activities, relevant agreements;
  • Review of liabilities;
  • Legal analysis of disputes with state authorities, enterprises, institutions, organisations and individuals;
  • Examination of the rights to intellectual property;
  • Compliance with the legislation in the field of labour relations, labour protection.
Based on the results of works carried out a written report on the state of a legal aspect of the entity's activities is to be prepared. This report will include specific transactions of legal nature in the entity's activities; most probable consequences will be disclosed there, necessary and comprehensive recommendations will be prepared.  
Financial Due Diligence implies an analytical review and economic analysis of financial information for the purposes of assessment of the entity's actual financial situation and existing risks.
Financial Due Diligence comprises:
  • Analysis of accounting policies and accounting system;
  • Inventory of the key assets;
  • Evaluation of the internal control system;
  • Analysis of the document flow system;
  • Analysis of income in respect of operating segments and main contract partners;
  • Diagnostics of expenses according to the “nature of expense” method and in respect of operating segments;
  • Analysis of assets and liabilities items;
  • Analysis of loan portfolio and pledges;
  • Analysis of cash flow.
Based on the results of works carried out a written report on the entity's actual financial situation and the risks, which could have a significant negative effect on its financial situation, will be prepared. 
Tax Due Diligence implies the analysis of the most significant items of the entity’s tax accounting to obtain information on the tax accounting system, tax burden and to assess existing risks.
Results of Tax Due Diligence are aimed not only to assess the entity's possible tax risks but also to provide a basis for further tax planning.
Tax Due Diligence comprises:
  • Diagnostics of the entity’s tax accounting system;
  • Analysis of the entity’s source and contractual documents as to whether they meet the requirements of tax legislation;
  • Analysis of tax aspects in the entity’s activities with residents and non-residents;
  • Analysis of transactions with related parties;
  • Analysis of recording unusual transactions in the tax accounting;
  • Analysis as to whether taxes and charges have been accrued correctly.
  • Assessment of risks concerning a potential additional charge of tax liabilities.
Based on the results of works carried out a written report on the state of the entity's tax accounting and reporting, existing risks will be prepared. Recommendations on elimination or minimisation of the identified risks will be provided.