Enterprise equity investment process

Enterprise equity investment process I. Establishment of investment projects (I) The project manager is responsible for organizing the preliminary evaluation and preliminary screening of the projects. The project manager shall organize personnel to deeply understand the operation and management status, applicable laws and regulations, regulatory standards and relevant industrial policies promulgated by the central and local governments of the invested enterprises, and judge whether there are major obstacles and risks that affect the realization of the core values of the project; (2) In the preliminary screening stage of the project, the project manager and the staff of the equity investment post conduct research on the industry where the project is located, and report the research results to the department head; (three) after the completion of the preliminary investigation and screening, the project manager shall complete the project report or investment letter of intent and submit it to the project review working group; (4) The project review working group reviews the project report or investment letter of intent submitted by the project manager. The project review working group reviews and questions the investment feasibility, compliance and data authenticity of the project, and the project manager answers questions from members on the spot and supplements and improves relevant materials according to the resolutions of the project review working group; (V) After the project review working group deliberates and passes the project report, it forms a written opinion, and the asset management department (center) submits the project report or investment letter of intent to the investment management committee of the company; (VI) The Investment Management Committee of the Company comprehensively reviews the materials submitted by the project review working group, and may invite experts to provide relevant opinions when necessary. The project manager answers questions from members on the spot, and supplements and perfects relevant materials according to the resolution of the investment management committee of the company; (VII) The Investment Management Committee of the Company approves the formal establishment of the project by means of meeting resolution. The project manager shall set up a project team according to the approved plan and organize due diligence. Two. After the project evaluation, due diligence and investment scheme design (1) is formally established, the asset management department (center) may employ a third-party intermediary to conduct due diligence. Due diligence should generally cover the following aspects: 1. Business due diligence: analyze the industry and market where the enterprise is located, including competitive position, future growth potential, products, competitive environment, industrial chain perfection, etc. Based on the investment letter of intent, this paper analyzes in detail the degree of agreement between the invested enterprise and the company's investment strategy, demonstrates the feasibility of the above investment strategy from the operational level, and prompts the key risk points and control measures; 2. Financial due diligence: The goal of financial due diligence is to evaluate the real financial value and the effectiveness of financial control, reveal important financial risks, and provide financial basis for determining transaction pricing and post-investment value-added targets. The scope of investigation includes the evaluation of internal control system, interviews with relevant financial managers and detailed verification and analysis of financial data; 3. Legal and tax due diligence: Legal and tax due diligence aims to determine the main legal and tax risks of enterprises and the tax risk areas that need legal and tax protection clauses. The scope of investigation covers the internal tax management and tax policies of enterprises, the tax impact of business processes, the various tax benefits and financial returns enjoyed, and the specific analysis and review of tax information; 4. Operational due diligence: The results of operational due diligence can provide an important basis for project evaluation. The scope of investigation includes management qualifications (including the professional knowledge level, work experience, industry reputation and stability of the management team, etc.). ), corporate culture, functions and departmental processes, technology and R&D strength, effectiveness of logistics management, talent sources and incentive mechanism. The historical burden and restructuring of state-owned enterprises are also important contents of business due diligence. (2) Hire a third-party professional organization to summarize the above due diligence results and complete the due diligence report, which will be reviewed by the company's project manager and submitted to the person in charge of the asset management department (center); (3) The project team is responsible for evaluating the value of the project enterprise and completing the evaluation report, which is submitted by the project manager to the department head for review; (4) The project manager is responsible for leading the project team to draft the investment plan. Based on the results of due diligence, the project team should determine the transaction structure and transaction price range of the project according to the value evaluation, income risk requirements, external market conditions, investment environment, project negotiation and other factors of the project enterprise, and calculate the expected rate of return at different price levels; (5) The project team shall summarize the results of the above-mentioned due diligence, project value evaluation and other project evaluations, complete the project evaluation report, which shall be reviewed and signed by the project manager, and sent to the Compliance and Legal Department for review and professional opinions; (VI) The project manager submits the project evaluation report, due diligence report and enterprise value evaluation report together with the countersigned opinions of all departments to the investment management committee of the company for deliberation; (VII) During the transaction evaluation and due diligence, the project manager shall report the overall progress of the project to the person in charge of the asset management department (center) in a timely manner; The Compliance Legal Department shall independently evaluate the compliance of the project enterprise and the transaction structure, and report it to the person in charge of the Asset Management Department (Center) in time. Three. Investment decision-making and implementation (I) The investment management committee of the company conducts a comprehensive review of the above-mentioned relevant materials and performs investment management functions within the scope authorized by the board of directors by means of meeting resolutions; (II) For the project scheme that fails to meet the decision-making conditions, the project manager shall continue to modify and improve the scheme according to the specific guidance of the company's investment management committee and resubmit it to the company's investment management committee for deliberation; (3) Submit the investment plan to the board of directors for decision; (IV) The project team negotiates and communicates with the project enterprise according to the approved investment plan, drafts the investment agreement and submits it to the compliance and legal department of the company for review; (5) The Compliance Legal Department reviews the terms of the investment agreement according to the approved investment plan and relevant laws and regulations, and issues legal opinions. For clauses that do not meet the approval conditions, return them to the project team for modification; (6) After drafting the investment agreement, sign a contract with the project enterprise according to the company's process; (VII) The project manager is responsible for leading the project team and coordinating all departments to complete the relevant work of transaction execution; (VIII) The Finance Department of the Company is responsible for arranging relevant funds according to the investment agreement; (9) The project manager shall submit the application/filing documents for equity investment to the regulatory authorities as required; (10) Investment projects that have not been reviewed by the company's investment management committee shall be returned to the project library and tracked and managed by the project manager. From the above, we know that the process of enterprise equity investment is mainly divided into three steps. The first step is to establish investment projects, that is, to screen and inspect the projects to be invested; The second step is project evaluation, due diligence and investment scheme design, and the third step is investment scheme decision and implementation. After the three-step inspection, if the project enterprise meets the investment conditions, it needs to submit materials to the relevant departments; If you don't meet the investment conditions, you need to continue to follow up the investment when the time is ripe.