Its purpose is to determine the rationality of the hypothetical basis of the future growth forecast of the project company and that the project company has no hidden major risks to investors, and to protect both investors and financiers from prosecution by other stakeholders.
Due diligence does not guarantee that all potential risks can be found, but it is an effective measure for investors and financiers, which can make investment transactions more efficient.
Second, the basic principles of due diligence 1, independence 2, objectivity 3, prudence 4, comprehensiveness: the investigation content and related materials should be as comprehensive as possible 5, thoroughness 6, importance 7, principle of differential treatment: due diligence should be focused on different enterprises. 3. Basic procedures of due diligence. 4. Due diligence project team structure 1. Financial audit-experienced financial and auditing personnel. 2. Business investigation-it is best to have rich management experience in manufacturing enterprises. 3. Lawyers are key project members and try their best to find risks. 4 professionals-experts in the industry, mainly to guide and assist business investigators. V. Basic methods of due diligence 1. Review the financial statements and other legal, financial and business information provided by the project company to find out the key and significant influencing factors.
2. The analysis program analyzes the information obtained from various channels, such as public statements and industry research reports of banks, taxation, accounting firms, industry experts and listed companies in the same industry, and finds anomalies and major problems, such as trend analysis and structural analysis.
3. Interview and fully communicate with all levels, functional personnel and other relevant internal and external personnel within the enterprise; Visit and consult the downstream customers, upstream suppliers and competitors of the project company.
4. Inquire and consult the meetings, industry journals, industry reports and other materials of industry associations for comparison.
The members of the intra-group communication investigation team come from different backgrounds and professions, and their mutual communication is also a way to achieve the purpose of the investigation.
The concrete implementation of due diligence on intransitive verbs 1. Preparatory work A. Discuss the project, mainly focusing on the historical evolution, management team, main business, profitability, business model and legal background of the target enterprise.
And arrange the division of labor for the project team members.
(First round meeting) B. According to the main business of the enterprise, conduct targeted market research, such as technical barriers, policy orientation, domestic and international industry status and future trends, market positioning, etc.
At the same time, the survey of competitors focuses on market share and technical conflicts.
(Second Meeting) C. If you have any questions during the meeting, you can answer them at the next meeting through the post-meeting survey. If you still can't answer, then focus on field trips.
D. Finally, according to the discussion results of the meeting, prepare the list of enterprise preparation materials, the summary of key investigation issues and the due diligence schedule.
(The original division of labor can be adjusted appropriately) 2. Matters needing attention in the interview A. Make an interview outline before the interview to prevent omissions. Please refer to the summary of key survey questions.
B. Make an agenda at least two days before the interview, and inform the target enterprise of the interview time, main contents, etc. At the same time, the material preparation list is provided, which requires the target enterprise to prepare according to the actual situation.
Maintain an equal, cooperative, modest and respectful attitude in the interview.
When you ask for reference materials, you should pay attention to your tone and adopt the correct method.
D interview records include: participants and positions, interview time, place and main interview contents; Pay attention to details when recording contents, especially names and data, and verify them before recording; Make special marks for important content.
E. Interview records should be sorted out in time (as far as possible on the same day) and filed as important documents.
Interview content: the arrangement should be comprehensive and clear, and it cannot be simply listed; Data collection: it is necessary to sort out the registration.
The content of the interview is that according to the division of labor in advance, everyone talks with the relevant personnel.
During the conversation, if you find new information that is not prepared in advance, you need to record it in time.
The specific contents of the conversation include: team, business, market, technology, finance and legal affairs.
A. The team survey requires the resumes of managers and the turnover of company personnel in the past 12 months.
Copy of ID card, copy of degree certificate, and share proportion of each founder.
It is particularly important to examine the quality of the management team. For example, in some cases, entrepreneurial teams with failure experience have advantages over other teams.
When investigating the shareholder structure, we should not only pay attention to the relationship between shareholders, but also pay attention to whether shareholders can provide value-added services, such as help in marketing, experience in technology research and development, and methods in enterprise management.
B. business investigation business investigation is related to the profitability and means of enterprises and is one of the focuses of due diligence.
Investigate the current sales model, future sales planning, objective evaluation and grading of the target market, and comparative analysis of the advantages and disadvantages with competitors.
Internally, it includes: rules and regulations, management process, reward and punishment system, execution ability and so on.
C market research product production includes: independence of production equipment, long-term supply contract, supply qualification certificate, consumption ratio of raw and auxiliary materials, cost ratio of raw and auxiliary materials, unit cost, sales price, etc.
Macro issues such as market status, future trends, domestic and international trends, policy support, market share, etc. These issues need different people to verify.
You can buy industry reports, interview experts, and consult the CEO and chairman of the industry.
Survey of competitors and downstream customers.
No matter what method is adopted, direct contact is needed.
The purpose is to objectively and fairly understand the competitiveness, advantages and disadvantages of the same industry and the urgency of market demand for products.
D. Technical investigation, independence, replicability and substitutability of technical barriers, among which the independence of technology is the most important, and there can be no intellectual property disputes with other enterprises.
Hire senior professionals to issue independent reports and analysis to verify its technical content.
As an intangible asset, there must be a professional evaluation report.
E. financial investigation finance is the most important work in due diligence.
It is divided into two parts: past financial data and future financial forecast.
Specifically, it includes income list, balance sheet, cash flow statement, monthly operating status, budget and actual situation, sales and gross profit details (by product and by region), accounts receivable list by enterprise name and age, different products and their contribution to income, cost structure, rate of return, etc.
According to different types of enterprises, distinguish the key inspection objects.
For production enterprises, it is necessary to recalculate and confirm according to the financial data and cost accounting provided by the enterprise, and the data provided by the enterprise cannot be used as the reference object.
The purpose is to determine the profitability of products and the substitutability of downstream customer demand.
F legal investigation provides copies of the business licenses of the parent company, subsidiaries, holding companies and affiliated companies 1 copy, and copies of corporate identity cards 1 copy; Plus articles of association and resolutions of shareholders' meeting, labor contract, relevant provisions of intellectual property rights, trademark filing, purchase certificate of genuine software, court judgment, etc.
4. Matters needing attention in the investigation A. Actively encourage the respondents to put forward personal opinions and suggestions for future improvement on the existing business situation of the enterprise.
B. It is best to design the data format required by the enterprise in advance to obtain electronic data.
C. The members of the project team should exchange the obtained information with each other and write a report at the first time, so as to find the problems in time and communicate with the enterprise again in the next day's work.
D when preparing the report, the project team members should use a uniform template format to facilitate the synthesis of the report.
E in the process of report formation, we should make full use of various analytical methods and tools to express scattered information concisely and put forward opinions.
F for the multi-day investigation arrangement, it is necessary to hold a meeting every night to communicate the investigation situation in their respective regions and make the investigation arrangement for the next day.
For the investigation content of the day, do the "stage investigation part".
Summarize the collected information, and compile the information collection catalogue as the schedule of the due diligence report.
Seven. Due diligence report 1, basic framework of due diligence report 1) The overview part is a summary of the information obtained in this report, so that the report readers can have a basic grasp of the important information of the investigated enterprises.
2) Due diligence content n Legal investigation n Business investigation n Financial investigation n Investment cooperation scheme 3) Summary 2. Requirements for Due Diligence Report Due Diligence report should analyze and evaluate the key structure of the enterprise as much as possible. The scattered and disorganized documents, tables, data, interview records and other information obtained by project members should be expressed by professional analysis tools, statistical comparison of indicators, curves, charts and other means, and long words should be used as little as possible.
3. Writing skills of due diligence report 1) Use appropriate titles 2) Express opinions and suggestions appropriately 3) Use charts, such as graphs, comparison tables and drawings. 4) The expression content should be quantified. 5) Sentences and paragraphs should be concise and clear. 6) Key attachments shall be highlighted in frame, underlined, italicized and bold: the list of material preparation shall be subject to the title of this certificate. Pay attention to the basic license, business license, tax registration certificate, organization code certificate, account opening license, ownership certificate of loan card, real estate license, land certificate and articles of association, including previous changes and resolutions of shareholders' meeting. Financial information such as equity transfer agreement is called covered financial system. Financial statements report the costs and expenses of the last three years, semi-annual, quarterly and monthly. The unit production cost of various products, the consumption and cost ratio of main raw materials, the specific composition of the three-phase expenses, the list of creditor's rights and debts and their causes. The amount, interest rate, term and maturity date of various bank loans and other loans, whether there are overdue loans borrowed by affiliated enterprises and individuals, a detailed list of guarantees and mortgages, various taxes and tax rates currently implemented by taxation, various special items such as tax payment vouchers, electronic tax payment vouchers, VAT invoices, tax preferences for fixed assets, and a list of major fixed assets (original value and net value). They are called original patent certificate, transfer agreement, patent office transfer approval certificate and publicity document * * * supporting project related certificates, trademark registration certificate, asset evaluation report, relevant qualification certificate GMP certificate, hygiene license, industry qualification, safety and environmental evaluation certificate, etc. Other auxiliary materials are called the company structure chart, organization chart, staffing and materials of the equity incentive plan team. Salary system; Process flow chart for making feasibility report of labor contract sample; Future planning and analysis of production, scientific research and market; Analysis of advantages and disadvantages of upstream and downstream relations, contracts related to upstream and downstream enterprise customers, sales ratio of each company in market relations, competitive enterprises, products and target markets.