Due Diligence

Due Diligence is a process designed to get a comprehensive view of the business. In other words, DD is, essentially, independent verification of all the facts regarding the firm, including availability of relevant supporting documents. DD is necessary when you need accurate financial information on the true condition of the company for decision-making.

Our company professionally conducts Due Diligence. We have solid experience in performing such analysis of the company, our company employs professional appraisers, auditors, financial analysts and lawyers.

Necessity to conduct Due Diligence occurs in the following cases:

  • sale of business;
  • purchase of ready-made business;
  • opening of activity abroad;
  • establishing of a joint company or the companies merger;
  • provision of evidences to foreign partner or investor;
  • verification of reliability and solvency of contractor;
  • verification of the subsidiaries efficiency.


Our Due Diligence process primary focuses on legal, tax, financial, IT and technical areas. In the process of DD MGI Consulting team of certified appraisers and forensic experts, financial analysts, auditors, accountants, lawyers, IT and technical experts descends on the firm to analyze it. They assemble and review all the documents of the firm, interview the management, examine company solvency and good standing, assess various risks (SWOT, PEST, etc.). One of the key issues of the DD process is the analysis of the Company’s compliance with all legislative and regulatory requirements.

Appraisers, forensic experts and financial analysts

Financial analysts are experts on evaluation of the companies’ business. Sense of this team work is obvious; their goal is determination of the investment object’s market attractiveness, most efficient usage and market price.

Evaluation procedure in compliance with generally accepted standards shall include the following steps:

  • review of the evaluation object, collection and processing of the initial data;
  • identification of the evaluation object and related rights, analysis of possible risks;
  • choice of necessary methodological approaches, methods and appraisal procedures;
  • analysis of the evaluation results received by different methodological approaches;
  • preparation of report and conclusion on appraisal of property.

Technical experts

Technical Due Diligence involves examination of cost estimation, project and technical documentation. When preparation of building documentation, it is accepted to pay special attention to examination of engineering project draft.

Services on conduction of technical and construction Due Diligenсe include:

  • evaluation of quality of building and construction works (BCW);
  • analysis of budget according to regulatory norms and prices;
  • analysis of BCW calculations;
  • evaluation of defects and losses.

Auditors and accountants

The task of auditors is to reveal financial and tax risks, to assess reliability of financial statements and financial position of the company.

Economic Due Diligence includes all material aspects of activity, i.e. economic and property position, position in financial sphere, condition of cash settlements, etc.

The data provided by the auditors may be structured as follows:

  • Analysis of the company’s structure of income and expenses for analyzed period, analysis of the company’s main activity indexes;
  • Evaluation of the internal control system in the part of document flow related to the company’s expenses. Sample analysis of quality and fulness of documents confirming the company’s expenses;
  • Analysis of fixed assets: general structure, accrued depreciation, results of revaluation;
  • Analysis of the company’s financial investment;
  • Analysis of accounts receivable;
  • Analysis of the company’s stocks: structure, cost, dynamic, non-liquids;
  • Analysis of accounts payable;
  • Analysis of credit contracts and liabilities: structure of creditors/lenders and volume of credits and loans, terms of crediting and lending
  • Analysis of contingent liabilities (fines; penalties; guarantees issued to secure debts of third parties, bills of exchange; lawsuits brought against the Company; liens and other encumbrances of the company’s property);
  • Analysis of fullness and reliability of accounting of assets and liabilities reflected at the Balance Sheet of the company.

Due Diligence includes review and comments on listed issues with highlighting of any potential tax risks and benefits, as well as revealation, generalization and numeric expression, if possible, of all not accounted material tax risks and/or potential tax liabilities existing at the company.


Legal Due Diligence is considered as one of the most important. Legal Due Diligence includes review of the following issues (on the basis of relevant documents):

  • Corporate governance (documents determining company’s corporate governance, incorporation documents);
  • Shares and company’s shareholders;
  • Regulating aspects of the company’s activity (licenses and permits);
  • Main contracts and other transactions;
  • Documents confirming property rights of the company;
  • Staff and labour relations;
  • Court lawsuits and other claims.

Conduction of Legal Due Diligence allows to:

  • assess investment attractiveness of the company or corporate rights issued by it as the objects of sale and purchase;
  • to prevent cancelation of the company’s state registration or recognition of incorporation documents as invalid;
  • to prevent recognition of the company’s transactions as invalid or fictious
  • to prevent application of penalties and economic sanctions to the company.

As a result of DD MGI Consulting will provide you with a detailed independent DD Report outlining major benefits and risks with our professional recommendations on how to prevent any possible negative consequences and to correct the Company’s problems it was unable or unwilling to fix. Our DD Report will present the customer a valid picture of the business, proper evaluation of its profitability and viability, as wells as assessment of its true worth (EBIT, EBITDA, NFP).


Finally, when deciding whether or not to perform Due Diligence you should appreciate that the cost of examining the target business prior to decision-making would normally be far less than sorting out any future problems.