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Address:
Suite 811, Tsimshatsui Centre, East Wing, 66 Mody Road, Tsimshatsui East, Kowloon, Hong Kong.
Telephone: +852 2268 6226
Fax: +852 2268 6227

DUE DILIGENCE

Due diligence services in mergers and acquisitions

Services that enable buyers to discover all that they should reasonably know about what they intend to buy. These are material facts that help to determine whether to proceed with a transaction or not. Our clients need to be provided with a high level of comfort that the business records together with the financial statements offered do accurately reflect all of the assets and liabilities of the target company. From the buyers' perspective, they must know how to tackle any risk factors. These risks include e.g.

the political risk associated with the country in which the target company is based; i.e. to acquire a target company formed in some economies can have risks from Government policy where assets may easily be expropriated;
the completeness and the accuracy of the financial information of the target company - the past certified audited accounts plus the latest management accounts, cash flow statements and profit forecast projections can reveal whether any material misstatement of profit and/or net worth has been made in respect of the target company.

Managing a financial due diligence process

Initial parameters

Buyers require a preliminary evaluation of the key important factors related to acquisition transaction and is concerned with issues in respect of key personnel, suppliers and customers of the target company and other critical factors.

Preparation and execution of the preliminary investigation

Used to identify deal-breaking issues up front before money and other valuable resources are committed to performing a detailed investigation. Some possible issues examined during the exercise are:

concealment of material facts and figures;
insufficient internal control policies;
non-compliance of or in-appropriate interpretation of contracts, legal provisions, accounting principles, policies and standards;
rapid employee turnover and core management succession;
material contingent liabilities;
statutory non-compliance issues;
industrial sickness;
legal proceedings;
The material misstatement of assets and liabilities recorded in the management accounts and the audited financial statements.

We provide financial due diligence services to potential clients who intend to participate in an acquisition transaction. Please feel free to contact us.

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