Due Diligence Policy

1. Purpose

The purpose of this Due Diligence Policy is to establish guidelines and procedures for conducting due diligence in all business activities undertaken by X Apparels Ltd. Due diligence is a critical process to assess and manage risks, ensure compliance with applicable laws and regulations, and make informed business decisions.

2. Scope

This policy applies to all employees, contractors, and agents of X Apparels Ltd. involved in activities that require due diligence, including but not limited to mergers and acquisitions, partnerships, investments, and contractual agreements.

3. Definitions

Due Diligence: The comprehensive and systematic examination of a potential business decision or transaction to assess its legal, financial, operational, and strategic implications.

4. Responsibility for Due Diligence

The HR & Administration Department is responsible for overseeing and conducting due diligence activities. This department will coordinate with relevant stakeholders, such as legal, finance, operations, and compliance, as needed.

5. Due Diligence Process

The due diligence process includes, but is not limited to, the following steps:

5.1 Identification of Due Diligence Requirements:

·    Clearly define the scope of due diligence required for each specific transaction or business activity.

·        Identify key areas of concern, including legal, financial, operational, and regulatory aspects.

5.2 Data Collection:

·        Collect relevant information and documents from the target entity or business partner.

·        Utilize appropriate resources, including external consultants, as needed.

5.3 Risk Assessment:

·        Evaluate potential risks associated with the transaction or business activity.

·        Prioritize risks based on their impact and likelihood.

5.4 Legal Compliance:

·        Ensure compliance with all applicable laws and regulations.

·        Identify any legal issues that may impact the transaction.

5.5 Financial Analysis:

·       Conduct a thorough financial analysis, including review of financial statements, cash flow, and valuation.

·        Assess the financial stability and performance of the target entity.

5.6 Operational Due Diligence:

·        Assess the operational capabilities and efficiency of the target entity.

·        Identify any operational challenges or opportunities.

5.7 Documentation:

Maintain a comprehensive record of all due diligence activities, findings, and decisions.

6. Reporting and Decision-Making

The results of the due diligence process will be documented and presented to Operation Director. She will use the information to make informed decisions regarding the proposed transaction or business activity.

7. Confidentiality

All information obtained during the due diligence process is confidential and should be handled in accordance with X Apparels Ltd. confidentiality policies.

8. Review and Update

This Due Diligence Policy will be reviewed periodically and updated as necessary to ensure its effectiveness and relevance.

9. Compliance

All employees, contractors, and agents are required to comply with this Due Diligence Policy. Non-compliance may result in disciplinary action, including termination of employment or contractual relationship.