dave mouncey smith & williamson solomon hare llp dmouncey@solomonhare.co.uk ralf krüger/andré...

Dave Mouncey Smith & Williamson Solomon Hare LLP

dmouncey@solomonhare.co.ukRalf Krüger/André Hollnagel

CFH Cordes + Partner WP StB RAHamburg/Germanyhamburg@nexia.de

CFH Cordes + PartnerCORDES + PARTNER GMBH

Nexia International Client Profile

February 8, 2008

Smith & WilliamsonSolomon Hare

Reasons for choosing Nexia• Brand awareness• Local presence• Reporting structures, network• Responsibility for the client• …

Smith & WilliamsonSolomon Hare

CFH Cordes + PartnerCORDES + PARTNER GMBH

February 8, 2008

Langley Holdings plc

Claudius Peters Group

Piller Group

ARO Group

GermanyChinaFranceUSASpainSingaporeBrazilIndiaUKRomania

Australia* France* USA Spain UK Germany

* France USA Germany Belgium Spain * Mexico China* Sweden UK

Total fees outside UK: appr. €750k

Nexia fees: appr. €550k

2001 2006 2007 2004

Smith & WilliamsonSolomon Hare

CFH Cordes + PartnerCORDES + PARTNER GMBH

February 8, 2008

Langley Holdings plc – Global Presence

Smith & WilliamsonSolomon Hare

CFH Cordes + PartnerCORDES + PARTNER GMBH

February 8, 2008

Key Highlights – Year Ended 31 December 2007Year ended

31 December 2007

€’000

Year ended31 December 2006

€’000Revenue 493,852 347,566

Non-recurring items (4,053) 18,230

Pre tax profit 56,735 59,912

Net assets 156,388 128,062

Net cash 99,744 69,509

Orders on hand 251,288 188,245

No No

Employees 2,413 2,179

Smith & WilliamsonSolomon Hare

CFH Cordes + PartnerCORDES + PARTNER GMBH

February 8, 2008

How does this work?(best practise)

February 8, 2008

Smith & WilliamsonSolomon Hare

CFH Cordes + PartnerCORDES + PARTNER GMBH

e. g. joint cooperation:

- Smith & Williamson/Salomon Hare, UK (client relationship; lead manager) - CFH / Nexia Hamburg, Ger (local tax+ audit expertise).

1. Starting Point

- British Investor bought a group engaging in the machinery industry (incl. a holding company and several subsidiaries operating worldwide and in Buxtehude, Ger - near Hamburg)

Smith & WilliamsonSolomon Hare

CFH Cordes + PartnerCORDES + PARTNER GMBH

February 8, 2008

Legal Structure Langley Holdings plcUK

Claudius Peters GroupGmbH

Technologies GmbH

Technologies S.A.

(Italiana) srl.

(Ibérica) S.A.

Aerospace(dormant)

(Americas) Inc. do Brasil Ltda.(Asia Pacific) Pte.Ltd.

(China) Ltd.Projects GmbH

Piller Groupsee next page

Romania srl

(Beijing) Machinery Services.Ltd

CPVA GmbH(dormant)

(UK) Ltd.

CP India Pvt. Ltd.

Smith & WilliamsonSolomon Hare

CFH Cordes + PartnerCORDES + PARTNER GMBH

February 8, 2008

2. Services / tasks of CFH („Nexia Hamburg“)

- CFH was appointed to being auditor of the German subsidiaries of the Langley Group

- due to good circumstances, the group is performing excellently

- Mr Langley being hungry for further investments

- Nexia Hamburg was linking to a local M & A- company (without finding fees for Nexia)

Smith & WilliamsonSolomon Hare

CFH Cordes + PartnerCORDES + PARTNER GMBH

February 8, 2008

Smith & WilliamsonSolomon Hare

CFH Cordes + PartnerCORDES + PARTNER GMBH

February 8, 2008

3. Acquisition of Piller Group

- new target (group of companies) found as possible investment tasks for German Nexia companies:

- consulting in special tax-issues in Germany- structuring the acquisition financed by equity

(liquidity within German subsidiaries) with view to tax reasons

Legal StructureClaudius Peters

Technologies GmbH

Power Systems GmbH

Inc. (UK) Ltd. Australia Pty. Ltd. France SAS. Italia Srl Iberica S.L.

Dynasine GmbH

Smith & WilliamsonSolomon Hare

CFH Cordes + PartnerCORDES + PARTNER GMBH

February 8, 2008

Smith & WilliamsonSolomon Hare

CFH Cordes + PartnerCORDES + PARTNER GMBH

February 8, 2008

Conclusions of PillerAcquisition

- enlargement of the auditing-mandate, reporting (generating profit) - tax issues becoming more and more complex (chance to create and to design in cooperation with Solomon Hare)

- transfer pricing

- financing matters (structured finance)

Smith & WilliamsonSolomon Hare

CFH Cordes + PartnerCORDES + PARTNER GMBH

February 8, 2008

4. Next Acquisition AROThe Steps…

- Investment developing excellently again

- Investor interested in further investments

- contact to M&A-company (by “Nexia Hamburg”)

- tax and commercial due dilligence

- new target found as possible investment

Smith & WilliamsonSolomon Hare

CFH Cordes + PartnerCORDES + PARTNER GMBH

February 8, 2008

Conclusion of ARO Acquisition - mandate for tax and commercial due diligence in Germany (investor focused on highlights and quickness task performed by Nexia companies in time, investor can make the acquisition based on a price lower than the price offered by the competitors, because of the

quickness in which the investor receives the information necessary and the quickness in his decision to buy)

- new auditing mandates for Nexia companies worldwide

- new chances for tax-consulting mandates

- “desire” of the investor for further investments

Smith & WilliamsonSolomon Hare

CFH Cordes + PartnerCORDES + PARTNER GMBH

February 8, 2008

5. Latest Acquisition Bradman Lake Group

- Former Investment developing excellently again

- Investor interested in further investments

- M&A-company in Hamburg looking for new investment, finding new group of companies

- unfortunately, the German subsidiary of the new group is not interesting (insolvency risk)

Smith & WilliamsonSolomon Hare

CFH Cordes + PartnerCORDES + PARTNER GMBH

February 8, 2008

Final Result - note from Nexia Hamburg to the investor in brief form for commercial issues

- investment with a right to cancel the contract for the German company

- no further mandates in auditing for Nexia Hamburg but client happy, now paying attention to the legal structure of his former investments

Smith & WilliamsonSolomon Hare

CFH Cordes + PartnerCORDES + PARTNER GMBH

February 8, 2008

“New” Tasks

- transfer pricing worldwide

- taxation of cascade 5% in german tax law

- use of losses in the group

- dissolving links of liabilities, minimizing risks

- thinking of changing legal forms of the group

- in order to avoid cascade-effect- trade tax becoming more important in

Germany (after latest tax-reform)

Value of Nexia

• Protect existing clients

• Attract local clients

• Efficient international network

Smith & WilliamsonSolomon Hare

CFH Cordes + PartnerCORDES + PARTNER GMBH

February 8, 2008