Full scope_List of information required

By Carmen Morris,2014-05-17 12:14
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Full scope_List of information required




    Company: contact person: Mr. ……………….; Mr………………………

     Telephone number +86…………… +86………………….

    We set out below a preliminary list of the information in respect of ferrite business that we should

    like to be made available at the start of our due diligence review. It is likely that we will have to

    request further information as a result of our review of documents listed below. Due diligence firm: ………………………………………………………….

    contact person: …………………………………………………………

     Provided (date)

    1. General

    ; access to the auditors’ work papers for the last two audited financial

    years and an appropriate contact at the auditors with whom any

    queries can be discussed.

    ; access to tax advisors and their tax files for those fiscal years which

    have not been audited by the tax authorities and which are therefore

    not final yet

    ; access to the board minutes (in terms of ferrite business) for the last

    two completed financial years and the current year.

    ; copy of any prospectus or other public document issued in the last five


    ; copy of the articles of association and any shareholder agreements.

    ; Excerpts of commercial registers

    ; Monthly reporting including comments (comparison of budget and

    actual results)

    ; Applications for entry into the commercial register that have not yet

    been effected

    ; copy of the audited accounts and audit reports for the last two years

    for each company in the group and consolidation schedules if

    appropriate. First check that information is not available through

    internet site or One source

    2. Company overview

    (A contextual summary of the key features of the entity/entities.)

    ; schedules detailing the current:

    - management organisation structure (names and job titles of

    directors and senior management with associated employee


    - operational structure if different to the organisational structure

    (e.g. divisions, directorates);


     Provided (date)

    - legal structure (including rationale for structure if complex,

    identity and quantum of material shareholdings and form of


    - for groups, a group structure chart, precise details of

    shareholdings and similar information on subsidiaries,

    partnerships, associates and joint ventures to that set out above;


    - authorised and issued share capital, details of changes in the

    past ten years and identities of the major shareholders (with


    ; details of when, where and by whom the business was established and

    the original nature of the business.

    ; copy of any company brochures/information pamphlets providing

    details of principal activities and/or products and operational/service


    ; details of the principal changes in the business over the last five years

    (in terms of the legal structure, senior management, trading strategy,

    or principal activities).

    3. Business environment

    (A review of the key external and internal factors influencing the business of the entity/entities and their competitiveness.)

    ; copy of strategy plans produced by the company’s management.

    ; copy of any reports produced by market consultants on behalf of the

    company (specifically, if there is any information on the size and

    nature of the market sector and its structure (international/ local,

    degree of fragmentation or consolidation, trends and the company’s

    position in the market share and dominant/leading/secondary


    ; copy of any reports, data or reviews regarding the market/industry

    prepared by management in support of budgets/forecasts or strategy


    ; details of key competitors (identity, estimated/actual market share and

    recent changes, differences in approach to the market).

    ; identification of barriers to market entry (e.g. financial, regulatory,

    know how).

    ; details of and government or trade regulations applicable to the target.

    Copy of significant correspondence with industry/company regulatory

    authorities. Details of most recent visits (if any) by regulatory

    authorities (date, outcome, resultant actions).

    ; details of advertising and marketing policy and process of relationship

    development with principal customers. Extent of market research and

    product testing carried out.


     Provided (date)

    ; description of risk management system and (monthly) risk reports

    ; copy of reports/assessments of any consultants and auditors for the

    last three years

    ; copy of external reports/assessments from previous capital raising

    exercises (e.g. due diligence reports). For companies where recent

    acquisitions were subject to due diligence, copy of the relevant


    ; details of management’s views of any competitive advantage or

    disadvantage offered by its:

    - tangible assets (e.g. location of distribution centre, poor

    reliability of machinery);

    - intangible assets (e.g. patent protection, know how,

    dependence upon third parties for proprietary software);

    - financial resources (e.g. existence of large cash balances or

    expensive debt finance); and

    - human resources (e.g. strong market contacts, scarcity of

    suitably skilled work force).

    4. Company operations

    (A review of the key features of the entity/entities operations.)

    ; details of the significant agreements/contracts entered into with the

    company’s customers and suppliers (pricing policy, discount and

    rebate arrangements, payment terms, volumes and amounts),

    reservation of title clauses) for the last three completed financial years

    and year to date. Details of any forward purchase commitments.

    (Major customers (net sales exceeding 3 % of annual sales volume)

    and major suppliers (net expenses exceeding 3 % of annual purchase

    volume with indication of net sales/expenses in last fiscal year;

    Contracts with suppliers containing reservation of title clauses or

    similar security rights (L specifying the respective security rights)

    ; Contracts with commercial agents, authorised dealers or other

    distribution agents

    ; All contracts with forwarding agencies, warehouses and other

    logistics services providers

    ; All contracts relating to licensing, provision, maintenance or operation

    of electronic data processing hard- and/or software

    ; Research and development contracts, either within the Yageo-group

    or with third parties

    ; Tangible fixed assets subject to restraints on alienation


     Provided (date)

    ; details of and changes in sales to/purchases from principal

    customers/suppliers over each of the last three financial years and year

    to date (individual amounts and volumes where applicable). Note any

    customers whose business is seasonal. Identify any customers at risk

    of being lost and any sole suppliers.

    ; sales organisation (domestic and export) with details of commissions

    structures and agreements with any agents.

    ; summary of credit notes issued for the last full financial year and the

    current year (number and value) and reasons for the material ones. ; information on price trends on key supplies for the latest three years

    and the current financial year.

    ; details of current productive capacity and plans for development,

    bottlenecks in production, degree of computerisation and age of

    machinery, to what extent sub assembly and sub contracting is used. ; a description of the company’s estimating and tendering procedures.

    ; details of products in development (anticipated launch date, whether

    modification to an existing product or new product range, expected

    market size/share).

    ; copy of most recent order book or schedule of contracted for work

    (with comparison for prior year).

    ; copy of standard sales terms and details of alternative arrangements

    offered to select customers (key terms and rationale for alternative


    ; details of significant operating leases (lessor, lessee, description of

    item, payment terms, contract start and termination dates), licences

    and other obligations (amount, duration, obligations, other key terms). ; details of the company’s quality assurance controls for procurement,

    production/service and distribution.

    ; details of any after sales services and any potential liabilities under

    warranties, guarantees or recourse arrangements.

    ; details of the company’s insurance cover (what covered, amount of

    cover and excess arrangements, duration, insurer, significant

    exclusions of cover, self insurance arrangements if any). ; details of current insurance claims or issues outstanding (amount,

    claimant, details of claim, current status, expected settlement date).

    Include copy of legal advice if available.

    ; details of the company’s environmental policies and accounting

    treatment of environmental costs, current claims or known issues and

    potential costs. Identification of any sites known or suspected to be

    contaminated. Copy of any previous commissioned environmental



     Provided (date)

    ; details of the company’s information technology infrastructure and

    policies (including function, capacity, maintenance contracts, support

    arrangements, identification of critical systems, issues arising from

    systems reviews, emergency and back-up procedures and software


    ; details of services provided by third parties (amount, duration of

    contractual arrangements, alternative sources of supply if critical


    ; details of transactions with other group companies or associates and

    whether the transactions are at arm’s length. Level of transactions in

    the last full financial year and the current year to date. Identify any

    products or services which may not be capable of being sourced from

    outside the group.

    ; Agreements (including but not limited to loan agreements and

    agreements on the provision of collateral) between the Company on

    the one hand and shareholders, which hold more than 5% of the

    interests in any EPCOS/Yageo group company or the company itself,

    relatives of such shareholders or enterprises in which such

    shareholders or relatives of them hold more than 5 % of the interests

    on the other hand (if the annual gross remuneration is more than Euro


    ; SWOT (strengths, weaknesses, opportunities, threats) analysis for the

    company with specific reference to specific business units if


    Directors and employees

    ; schedule detailing the directors’ and senior executives’ remuneration

    and benefit arrangements (cars, pensions, share options and bonus

    schemes) and any transactions with the business and other


    ; details of any service agreements.

    ; curriculum vitae for directors and key management to provide details

    of age, length of service, previous experience and qualifications.

    ; details of key personnel to the business (identity, duties, why

    significant/dependence exists). Details of key directors and

    management who have left the business in the last two years. ; details of management succession plans (which positions covered by

    plans, identities and qualifications of potential candidates). ; details of any key man insurance (identity(s) of persons covered,

    amount, duration and cost of cover).

    ; schedule detailing employee numbers (by role and/or

    department/location), wage rates/ salary structure, details of previous

    pay reviews and due date of next review, pension and other benefit

    entitlements, standard terms of employment.


     Provided (date)

    ; details of staff turnover - joiners and leavers over the past two years

    and the current year.

    ; details of any training schemes or qualifications employees are

    required to study for.

    ; details of any performance appraisal schemes.

    ; details of any family relationships within the business or with other

    key business contacts e.g. shareholders, customers, suppliers

    (quantum, frequency and dependence upon the trading relationship). ; details of union involvement and relationship (recognition, industrial

    action(s) over last two years) and employee relations. ; Applicable collective bargaining agreements (FT), foreseeable

    modifications (L)

    ; details of any significant redundancy programmes over the three

    financial years and current years (numbers of employees affected,

    estimated and actual cost and cost savings).

    ; details of management/employee incentive schemes offered including

    bonuses and share option schemes. Details of outstanding options

    granted (price, number and key terms of grant/award).

    ; details of the company’s health and safety policies, current claims or

    issues arising including recent safety visits or serious accidents. ; Service agreements and other agreements together with any

    amendments and supplements (including those taking affect in the

    future) with managing directors/board members

    ; Regulation on stock options and other profit sharing

    programmes (bonuses, profit shares, shares in turnover, etc.)

    ; Regulations on pension benefits (pension for inability to

    practice one?s profession or to work at all, old age or surviving

    dependants? pension etc.)

    ; Obligation vis-á-vis former members of the board(s)/ managing

    directors (pension benefits, consultancy agreements, lump sum

    payments, loans, collateral, indemnities for waiting periods due to

    post-contractual covenants not to compete, etc.)

    ; Loans granted to employees, specifying the conditions ad the status of


    ; Job guarantees granted in individual employment contract ; Agreements on special right to terminate the employment relationship

    in the case of change of majority of the shareholder or the

    participation quotas in the company

    ; Company?s health insurance fund or group insurance covering death,

    permanent inability to work or other events insured to the benefit of

    the employees


     Provided (date)

    ; Employees with whom a post-contractual covenant not to complete

    has been agreed upon, specifying the duration of the prohibition of

    competition and the amount of the potential indemnity for the waiting


    ; Former employees who are still subject to post-contractual covenants

    not to complete, specifying in each case all paid indemnities for

    waiting periods

    ; Commitments of re-employment to former employees

    ; details of any financial derivative instruments used.

    ; Works Agreements, standard arrangements, company commitments,

    global commitments and protocol notes which are in effect or expired

    within the last two years, in the case of pension rules also all

    predecessor rules

    ; Reconciliation’s of interests and social plans of the last five years

    ; Job guarantees resulting from collective bargaining agreements,

    works agreements, other company rules, re-integration agreements

    with job exchange offices, health insurance agencies or the like (L =

    list of all questioned agreements)

    ; Contracts with natural persons which aim at the rendering of services

    or the bringing about of particular results (in particular with so-called

    “consultants”, “free-lancers”, “pro forma self-employed”, etc.) with

    average monthly gross remuneration of more than Euro ????? or

    notice period of at least ????? months, describing the activity and

    specifying start of the activity, responsibility, representative powers,

    remuneration, ancillary benefits, notice period (L))

    ; Employees who are neither temporary employees nor have an

    employment contract with the Company but steadily work on the plant

    grounds / in the operations of the Company (number, type and

    duration of activity and employer) (L)

    ; employees outside the collective salary, employees within the

    collective salary scale, employees hired for limited periods of time,

    seasonal workers, home-workers and persons who work insignificant

    numbers of hours (FT = full text)

    ; Employment contracts together with any amendments and

    supplements (including those taking effect in the future) of all

    executives and other employees with an annual gross remuneration

    of more than Euro ????? or a notice period of at least ????? months


    Financial reporting procedures

    ; summary of the company’s management information systems and key


    ; copy of company policies, procedures and controls manuals (if

    available) including accounting, treasury and foreign exchange

    management and other management internal controls.


     Provided (date)

    ; details of management reporting procedures including timetable for

    reporting and for the central review process. Copy of monthly

    reporting pack pro forma and circulation list.

    ; details of the company’s cut-off procedures (quantum and incidence

    of post-period end adjustments).

    ; details of any costs arising from the year 2002 issue and remedial

    works yet to complete (duration and cost).

    ; copy of recent management information and reports (other than

    management accounts) used by management to manage the business.

    ; copy of audit management letters received during the past two

    financial years (where applicable). Details of management responses/

    actions to those points raised.

    ; copy of internal audit reports for the last two years (if any).

    5. 历史交易Historical trading

(A review of the key features of the entity/entities’ historical trading pattern.)


    For groups of companies, consolidated profit and loss accounts are required, together with details of consolidation adjustments.


    For the last two audited financial years (where applicable) and the current year to date:


    ; detailed monthly management account profit and loss accounts with

    management commentary thereon. For the most recent financial year

    and the current period the management accounts should be provided

    by month and for the two preceding years for the financial year end


    ; 提供附有管理层注释的逐月管理会计利润表。对最近的财年和当



    ; detailed budgets (and any reforecasts) with actual versus budget

    comparisons and textual commentary on the material variances in

    expected performance together with any available reconciliations

    between budget and actual profit before tax.

    ; 提供附有实际与预算比较情况的相关预算!和预测,和对原料差

    异的注释in expected performance,如果有对预算与实际税前利润



     Provided (date)

    ; analysis of income and margin by customer, by geographical region

    and by product.

    ; 分别按客户/地理区域/产品分析收入和利润。

    ; analysis of cost of sales, direct costs and overheads if not analysed in

    the management accounts.

    ; 分析销售成本、直接成本及一般管理费用(如果管理会计中没有


    ; a detailed analysis of head office and other overhead expense with

    method of allocation for each business unit.

    ; 按照分配到每个业务单位的方式(对总部和其他一般管理费用进


    ; Analysis of interest payable/ receivable by source (bank loan/

    overdraft, hire purchase etc).

    ; 按来源!银行贷款/透支、分期付款购货等,分析应收/应付利


    ; Schedule detailing material provision movements. Explanation for the

    creation, release or utilisation of those provisions. ; 按时间顺序列示原料条款变化。解释这些条款的形成、废除和运


    ; Quantification of the financial impact of any acquired or discontinued

    businesses (turnover, gross profit, operating profit, operating cash

    flow and net assets).


    ; details of any non-operating, one-off, non-recurring, extraordinary or

    exceptional income or expense items or accounting adjustments

    (amounts and explanation of items).

    ; 有关营业外收支、一次性收支、暂时性收支、非常收支项目或会


    ; identification of revenues or costs that will not continue post-

    transaction or that are currently provided under third party

    arrangements that will/may not continue post transaction. ; 对并购后不存续的收入/成本(或现因第三方按协议而产生但并购


    ; details of, and quantification of the impact of any changes in,

    accounting policies (including depreciation, accruals, income

    recognition, basis of consolidation, capitalisation of costs). ; 有关会计政策变更!包括跌价、预提、收入确认、报表合并的基



     Provided (date)

    ; schedule reconciling the management accounts to the statutory


    ; 将管理会计报表转换为审计报表的时间表。

    ; details of any changes in analysis between the management accounts

    for the last three financial years and the current year to date (schedule

    of quantum).

    ; 在对过去三年和今年到目前为止的管理会计报表的分析(schedule

    of quantum)的基础上(详列相关变化。

    ; details of dividends paid and proposed for the period under review. ; 有关股利!包括对审核期间的预期,的详细资料。

    6. Historical cash flows


    (A review of the key features of the entity/entities’ historical cash generation

    and funding.)


    For groups of companies, consolidated cash flows are required, together with details of consolidation adjustments.


    For the last two audited financial years (where applicable) and the current year to date:


    ; detailed monthly management account cash flow statements if


    ; 如果有(请提供每月的现金流量表。

    ; comparison of budgeted to actual operating and net cash flow. ; 比较预算性的经营性现金流、净现金流和实际发生情况

    ; month end cash book balances for at least the last twelve months. ; 至少提供过去12个月的月末现金流水账。

    ; access to bank statements for all bank accounts for at least the last

    twelve months. If a “Bankline" facility is available, a print out of the

    daily bank balance for the last twelve months.

    ; 提供至少过去12个月的所有银行账户的对帐单。如果有


    ; historical analysis of the level of capital expenditure by major



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