Due Diligence Report is an investigation or audit that a company should perform before entering into an agreement with a potential client. The audit covered the following areas such as company background, company structure, company management, company finance, production, product and service, research and development, company assets, shareholders and director status, etc.
A China Business Due Diligence Report gives enterprises a very deep understanding of the China party which to be joint-venture with and partnership with. It can avoid the enterprise from unnecessary financial risks and losses. There are two ways to conduct a China Due Diligence Report which are clear grasp and unannounced visit. However, both the methods include the following areas:-
Company background audit would cover the history and establishment of the company, development progress of the company, the company’s main production, productivity, profitability, employee turnover, employee information in terms of age, education and technical, resume of all the management people.
Company Structure audit would cover the number of subsidiaries, number of employee, the organization chart of the parent company and subsidiaries, rules and regulations, company details in terms of authorized capital, shareholders’ details, shareholdings and scope of business, etc.
The company management strategies would include business management, finance management, marketing management, human resources management, productivity management, debts management and risks management, etc.
Company finance audit would cover the source of income, sorts of income, total costs, cost management, the previous three years account status in terms of turnover income, inventory turnover, current ratio, quick ratio, return on net assets, gross profit margin, asset and debt ratios, the previous three years balance sheet, profit distribution statement, and the factors impact on future income and expenditure.
Company production would include the raw materials, supplemented materials, suppliers’ status, sales & purchase agreement, supply statistic, financial terms, source of raw materials, production machines and production costs.
Company Products & Services
The overall company products & services, the role played in the company income, potentiality in the future, improvement, quality, technical, competitive advantages, intellectual property, intellectual property protection, award & recognition, R&D, and the recent year sales statistic.
Company market networks, import & export status, local market distribution & oversea market distribution, customer networks, loyal customer details, principal markets, fixed cost contract, financial terms, and marketing strategies.
Company Research & Development
Company Research & Development audit would cover the new product development, product diversification, resume of product engineer, researcher and developer, expertise of product engineer, researcher and developer, R&D cooperator and status, award and recognition, to-be launched products, and R&D costs.
The composition of the major fixed assets included the name of the main equipment, the original value, net worth value, quantity and depreciated value.
Shareholders & Director Status
Shareholders and directors background, acquisition assets, award & recognition, criminal involvement, and etc.
We have more services than the above mentioned such as China Feasibility Study Report, China Legal Advisory, China Contract Drafting and Hong Kong Pre-IPO, etc.
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