SAS | Due Diligence
INTRODUCTION
Businesses ought to make many strategic decisions that affect their operations, profitability, and growth in the years to come.
Some of these strategic decisions, such as investment/disinvestment, bank loan, acquisition, merger/demerger, business partnership, or organizational effectiveness initiative, require critical consideration. This is where Diligence helps, meaning that research and analysis are conducted to determine if the transaction is feasible and value-generating for the business or if it will face significant obstacles or any concerns that may result in bleak outcomes. Therefore, it must be accurate, clear, and timely for it to play a pivotal role in the company’s strategic management decisions. SAS provides due diligence services to clients to help them make informed decisions.
We, at SAS, engage in obtaining all the information necessary for an in-depth study and analysis of the transaction within the timelines and provide the best recommendation to our clients. We ensure that our review helps you to take the transaction forward with cautious strategies so that it does not end up as a costly mistake.
Our dedicated and sincere professionals provide due Diligence and transaction advisory services to clients concerning the legal, financial, business environment, and tax domains of a business’s operations.
The various types of due diligence services include:
FINANCIAL DUE DILIGENCE
Financial Due Diligence, we conduct an in-depth study of the present and historical financial statements, accounts, and the relevant compliances to identify the potential risk areas. Such an investigation leads to the identification of the key revenue items, cost items, non-performing segments, assets and liabilities, non-core assets, hidden or contingent liabilities, and similar other data-related trends.
The risk of taxes may also influence any financial transaction of the businesses. Hence, financial due diligence also includes an analysis from the tax perspective.
It answers questions such as –
CUSTOMER
Customer due diligence is essential to find out the relevant information regarding the customers and evaluate them against any risks of money laundering and terrorist financing activities. It is a way to identify your customers and their risk profile. In some countries, it is conducted under the legal ambit, and if not followed by companies, they may be charged penalties.
We assist our clients with KYC checks, including full name, residential address, place, and date of birth, gender, nationality, marital status, contact number, email address, occupation, specimen signature, government-issued identification number, and tax number. Depending on the transaction, the company may require further due Diligence of customers. Furthermore, regular customer monitoring is also conducted to keep a tab on the customer’s risk profile that may change over time.
SUPPLIERS
Before entering into an agreement with the suppliers, businesses need to check whether the supplier has the financial capability, operational competence, and a sound system of corporate governance. This is required for any company to decide whether to enter into an agreement with them or not so that the risk to reputation and compliance is minimized.
Besides, it is also critical to analyze the business relationship that the company has with its vendors to identify the compatibility of both the companies. Such due Diligence also enables the company to identify any changes at the vendor’s end and the impact it may have on the relationship so that a better deal can be arranged for.
MERGERS & ACQUISITIONS
Due Diligence is critical in transactions when two companies plan to merge or when one intends to acquire another to understand if the deal will be beneficial or not. In this process, our expert professionals gather information about the target company, its customers, technology used, assets and liabilities, suppliers, financials, and intellectual property.
This information enables both the companies involved in the transaction to adjust their expectations from the Business Restructuring. It helps in risk identification, the definition of a clear structure, and better reputation management
Assessment of the technical feasibility of the transaction is a critical requirement to gauge if the company is ready to go ahead with it, given the technological capability, financial resources, and human talent. Some transactions also require an investigation into the educational, professional, and financial backgrounds of the promoters of the company, company structure, and ownership. There are some other transactions, which require us to assess the internal and external environment of a company to check for commercial viability. Operational due Diligence is another service, which studies the company’s daily operations, procedures in place, internal controls, and business processes that are required to identify any operational inefficiencies.
