By Category

Assisted a German customer-care-solutions provider in a joint venture in India

Engagement: The client was a leading provider of customer-care solutions for electronic devices to manufacturers, insurance providers, mobile network operators and retailers globally based in Germany. SKP was engaged by the company to assist them (with Financial Due Diligence) in acquiring a majority stake in a Mumbai-based company providing managed care services to smart phone manufacturers and an Apple authorised service provider in India.

Solution/Value Addition
SKP conducted Financial and Tax Due Diligence on target company. We pointed out that significant effort should be made to improve the internal control environment post acquisition and many of the policies and procedures developed needed to be strengthened. Service vertical gross margins were eating into the gross margins of the solution vertical, as a result of which, the company's overall gross margins were lower. At times, working capital requirements were primarily met by senior-level employees not taking any salaries. We assisted in figuring out the adjusted gross margins and normalised working capital for the business. We also highlighted the fact that the company was taking credits for taxes paid that was meant to be netted off with future tax payments. Considering the company's business model, such credits would not be available and thus, would  result in extra cash flows for future tax payments.