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Model Outline of Application Reports for Overseas Investment Projects

Jan 31, 2008 Source: Website of Sichuan Province DRC

  I. Project name

  II. Investors’ information

  1. Basic information about the major investors: the full name of the enterprises, main business scope, place of incorporation, registered capital, nature of the enterprises, shareholding structure, assets and liabilities, information about the major shareholders;

  2. Basic business information about the major investors: the enterprises’ main business scale and performance, productivity, actual production scale, domestic and international sales of major products in the last three years, and the enterprises’ major financial indicators in the last three years;

  3. Major investors’ relevant strength and advantage analysis, and brief information about their investing in related projects in China and overseas; and

  4. Brief information about other investors: place of incorporation, registered capital, nature of the enterprises, main business scale and performance, assets and liabilities, revenue, profits, etc.

  III. Analysis of the necessity of the project

  1. Purpose of investment: information about related industries of the project in China and overseas, such as the supply and demand of the products in domestic and international market and forecast of the same, import of the products and forecast of the same, and future development of relevant industries; the necessity and significance of the project to all investors, including the connection between the project and other domestic projects by the investors and the connection between the project and enterprise development strategies; and

  2. Social significance: connection with related industries’ development in China, and connection with China’s strategies and industrial policies on overseas investment.

  IV. Project background and investment environment 

  1. Project background: basic information about the project before the investors’ involvement, basic information about foreign parties, how the investors get involved in the project, investors’ overseas investigation, due diligence investigation, negotiations with foreign parties and other competing investors, and communication with host country’s state and local governments; 

  2. Investment environment: host country’s national and local political and economic situation, relevant laws and regulations in relation to taxation, foreign exchange, export and import, foreign investment utilization, resource development, market access, environmental protection and labor, situation of the local related industries and market; and (in the case of resource development) information about the reserve, quality, exploration, and exploitation of relevant resources in the host country; and

  3. Exterior comments for and effects of the project: comments from the host country’s central and local governments, comments from the local communities, the possible effects of the project to the host country’s national and regional social and economic development.

  V. Particulars of the project

  Construction projects:

  1. Content of the construction: place of the construction, construction scale, construction duration, progress schedule, technical planning, construction planning, and supporting facilities that are needed; and (in the case of resource development) the quantity and tenor of exploitable resource, entitled quantity of resource of the Chinese parties and exploration planning;

  2. Main products and target market: main products and production scale, target market and marketing planning of the products;

  3. Realization of relevant supporting conditions: the equipment and arrangement of related infrastructure such as roads, railways, ports and energy supply, land provision and arrangement, measures to satisfy local environmental protection requirements, arrangement and measures in relation to labor supply and security, and (in the case of processing projects) the sources of processing materials; and

  4. Indicators of Financial effects: financial forecasting indicators such as gross sales revenue, profits, investment payoff period, internal rate of return, and such forecasting indicators as the investment payoff period and rate of return of the Chinese parties.

  Merger and acquisition projects:

  1. Information about the acquired entities: (in the case of equity purchase) the full name of the acquired enterprises (in English and Chinese), main business scope, place of incorporation, registered capital, production, operation, assets and liabilities, shareholding structure, public listing, the latest performance in the stock market, brief information about major shareholders, the position and development status in the specific sector of the enterprise and its products and technology; (in the case of asset acquisition) the constitution of the acquired assets, the appraised value fixed by professional appraising agencies and the basic information about the owners of the assets; and

  2. Acquisition planning: the acquired objects, acquisition price (indicating the method of price-fixing and major parameters), the executing entities, way of transaction, acquisition progress arrangement, presumed counter measures in the presence of other competitors.

  (Note: where merger and acquisition projects involve investment in construction, all items required above in relation to construction projects should be specified as well as the comprehensive indicators of financial effects of the project.)

  VI. Cooperation and capital arrangement of the project

  1. Cooperation arrangement: shareholding ratio of all parties, way of capital contribution, way of cooperation, sharing of revenue and profit, distribution of products, other issues of cooperation;

  2. Capital utilization: gross investment, (in the case of construction projects) preliminary expenses (agency fees, exploration fees, ect.) engineering and construction fund and their use, use of working capital, (in the case of merger and acquisition projects) preliminary expenses of the acquisition, acquisition fund and its use, Chinese parties’ investment amount and its use; and

  3. Capital raising: capital fund of the project and all parties’ contribution, the constitution and source of bank loans and other social financing, amount of foreign exchange and source.

  VII. Risk analysis of the project

  Possible risks and uncertainties of the project and relevant measures to guard against risks: country-specific risks, legal and policy risks, market risks, construction risks, exchange risks, risks in relation to environmental protection, risks in relation to mining rights and resource quantity, labor risks, other possible risks facing the projects; (in the case of equity purchase projects) enterprise operation risks.

  VIII. Miscellaneous issues

  1. Whether the project has other issues that need to be solved;

  2. Next step of work in the schedule of the project.

  IX. Appendices

  1. Relevant documents required by Article 17 of the Interim Measures for the Administration of Examination and Approval of Overseas Investment Projects (Order No.21 of the NDRC) to be attached to the application report; and

  2. Other relevant verification documents required to be provided.

  

 
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