Financial Advisory

Due diligence

Financial due diligence is detailed financial assessment of the current financial situation at the analyzed company including its ability to generate profits in the near future. In the course of due diligence, various financial aspects of the business are appraised, i.e. assets and liabilities, revenue and costs, receivables and payables, bank debts, financial controls and planning system, integrity of the management information and quality of reporting. Due diligence process highlights unusual and uncharacteristic business transactions, analyses intercompany transfers and their impact on financial performance. Particular attention is given to cash flows and liquidity of the current operations, as well as to various factors impacting the cash-generation capacity of a company at present and in the near perspective. In practice, due diligence procedures are carried out for the period of three years back (historical performance) and up to two years forward (forecast). Further, the analysis touches upon feasibility of the business plans, sales projections and profits – all in the context of the current (factual) performance indicators.

Our expertise and experience allows us to assist clients in the following:

• Reviewing on and off balance sheet assets and liabilities
• Identifying critical business drivers, trend analysis and where the critical risk in the organization lie
• Assessing the target’s quality of earnings and identifying whether accounting policies or methods used are overly aggressive

Tax Due Diligence is a particular form of due diligence chiefly concerned with the tax aspects of the business. Scope of the tax-due-diligence work usually includes the assessment of the current tax burden, main tax liabilities and relationships with the tax authorities. Compliance with tax laws and regulations is evaluated by amount and submission date – as well as risks related to social insurance and payroll taxes. Tax analysis can be conducted either in relation to a specific business situation (e.g. as part of a conventional due diligence) or take a form of more general tax consulting. In both cases, the most valuable outcome of the tax due diligence is the Client’s full awareness of the extant tax risks and the informed decision-making in the context of tax law.

Transfer Pricing

Transfer Pricing – price control in transactions between related parties and counterparties from low-tax jurisdictions. A key principle of Transfer Pricing: prices in controlled transactions should correspond to the level of prices between independent companies under comparable market conditions. The justification of the price level in such transactions includes analytical procedures, which requires specific instruments.

The roles of Baker Tilly Joanidis Consultant in Transfer Pricing projects are following:

• determination of current and potential controlled transactions
• assessing risks and provide recommendations on their minimization
• performing all the necessary analytical procedures to substantiate the level of prices in controlled transactions
• preparation of package of transfer pricing documentation
• support in communication with regulatory authorities

Mergers & Acquisitions

Our specialists have the insight and experience to advise corporate and private equity investors through each stage of the merger and acquisition process. We help clients develop appropriate growth strategies based on their goals, so they'll be prepared to capitalize on opportunities during the merger, acquisition, or divestiture process. From strategy to due diligence to integration or divestiture, we recommend established strategies and solutions to help provide the confidence and support clients need to achieve their unique growth objectives.

Our team is available to provide you with services according to M&A.

Valuation services

The Valuation law and its amendments (Official Gazette No.115/2010, 158/2011, 185/2011, 51/2012 and 64/2012) regulates the area of valuations. According to this law, the estimation of the market price of the subject of the valuation shall be performed by the methodology, the rules and the standards for evaluation, that include international standards for value assessments, as well as some other laws governing the value of different forms of ownership and also the regulations related with them.

According to the Valuation law, valuations are performed in the following areas:

• Companies, public enterprises and other legal entities
• Real estate
• Movable property
• Claims and liabilities
• Machinery and equipment
• Means of transport
• Agriculture, forestry and water management
• Industrial property
• Copyright and related rights
• Environmental protection
• Information technology
• Police and military equipment and
• Other areas determined by law

A valuation is performed in one of the following cases:

• Transfer of title
• Determination of the equity value in cases in which there is a change of its value and its structure and also in cases of status changes
• Bankruptcy and liquidation proceedings
• When financing and raising mortgage and credit pledge
• Offsetting claim
• Expropriation procedure
• Taxation with property taxes
• Investment consulting and
• Other cases determined by law

A valuation service can be performed by physical entity – sole proprietorship and Valuation Company registered according to the Company law, licensed for evaluation and it is registered in the appropriate register of authorized assessors.