Importance Of Due Diligence

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IMPORTANCE OF DUE DELIGANCE REPORT
"Provided that nothing contained in this sub-section shall render any such person liable to punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention."
- The proviso under various sections of the Indian Constitution

INTRODUCTION
Due diligence is an investigation of potential investments to validate all facts, like reviewing financial records and anything else considered material. Due diligence in general sense refers to the care that must be taken by a person before entering into a contract or any form of financial transaction with another party.
Due diligence is performed by studying the annual reports, Exchange commission filings and securities of a business. The investor has the responsibility to verify all the facts in relation to his purchase and decide whether the investment suits his return requirements, income needs and risk tolerance. The collection of due diligence report gives an idea as to where the business is headed and acts as a guidance on whether I is right or not to go ahead with the investment or a purchase.
OBJECTIVES
1. To understand the meaning of due diligence.
2. To map out process of due diligence.
3. To interpret the importance of due diligence report.
DUE DILIGENCE— MEANING
Due diligence is a process where examination of all material facts of an agreement or a deal is conducted before the contract is signed by the

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