Central & Eastern European Circle Meeting

Montabaur (Germany)

22-23 April 2016

www.mgiworld.com www.mintalliance.com

Agenda

09.00 – 09.15 Welcome by the CEC Coordinators Michael & Thomas

09.15 – 09.25 Welcome by hosting office Arno

09.25 – 09.45 Examples of collaboration: BHP & BPO Michael & Laszlo

09.45 – 10.00 Opportunities of collaboration „Central & Eastern Circle I“ Hana

10.00 – 10.15 Opportunities of collaboration „Central & Eastern Circle II“ Teo

10.15 – 11.00 Collaboration between circles: discussion all

11.00 – 11.30 Coffee Break

11.30 – 12.30 Group audit and software support DATEV

12.30 – 13.30 Lunch Break

13.30 – 14.00 News from the members all

14.00 – 14.30 News from the IC Thomas

14.30 – 15.00 News from the TC Michael

15.00 – 15.20 News from the ECC Zoltan

15.20 – 15.30 Close of the meeting Michael & Thomas

Welcome by the Circle Coordinators

Welcome by the hosting office

Examples of collaboration

Examples of collaboration:

Background of the engagement:

• International group with headquarter in Germany andsubsidiaries in Germany, Hungary, Poland, Spain, USA, Romania, Japan, Mexico, China.

• Group is supplier for the automotive industry.

• Revenues (group level) 2015 KEUR 75,983 (2014 KEUR 68,089), thereof approx. 60% are generated outside Germany.

• Total Assets 2015 KEUR 57,610 (2014 KEUR 54,709).

• 630 employees.

Examples of collaboration:

Background of the engagement (cont‘d):

• 2007: BHP engaged for Due Diligence work in 2007 by the financialinvestor.

• Since 2008: BHP appointed as auditor of the German local GAAP financial statements and as group auditor.

• The subsidiaries are audited by

• USA: Detterbeck Johnson & Monson,• Spain: MGI Audicon & Partners,• Poland: Eso Audit,• Hungary: BPO AUDIT TAX.

• Summer 2015: BHP appointed as tax advisor.

Examples of collaboration:

The Hungarian subsidiary:

• Founded in 1989.

• 2008 registered as a limited liability company (Kft.) with the trade register.

• Revenue 2014 approx. KEUR 10,000, 143 employees.

• Company delivers products to other Group companies as well as to 3rd party customers.

Examples of collaboration:

Audit Instructions issued by BHP as the Group auditor:

• Scope of the audit work: full audit of the German GAAP reporting package

• Information on materiality for each local entity

• Time schedule

• Audit procedures:

• 3rd parties confirmations, observing the stock taking on a sampling basis• According to ISA the audit work should also include adequate audit procedures to uncover fraud and

error risks• Going concern: review critically the Company´s planning for the next 24 months• Correctness of German-GAAP reconciliation,• Recognition and measurement of fixed assets,• Recognition and measurement of account receivables,• Recognition and measurement of inventories,• Accounting of provisions and accruals,• Revenue recognition and cut off procedures• Deferred tax reconciliation from local tax balance sheet to German-GAAP balance sheet

Examples of collaboration:

Reporting of the local auditors to BHP as the Group auditor comprise:

• Acknowledgement confirmation,

• Audit planning questionnaire,

• General audit confirmation,

• Audit questionnaire,

• Audit opinion,

• Reporting on subesquent events.

Examples of collaboration:

About the engagement:

• We’ve been appointed as auditor of the Hungarian subsidiary in 2009.

• The previous auditor was Rödl & Partner.

• The Company is located in Tapolca.

Examples of collaboration:

Doing the audit of the subsidiary:

- It is more complex than doing the audit of a local firm.

- The business depends less on the local management.

- More expectations.

Examples of collaboration:

Understand the engagement:

Local Audit

Group Auditor

TaxOffice

Global Manage-

mentLocal

Manage-ment

Chamberof

Auditors

Audit Team

1st Audit instructions2nd Listen to the communication3rd Ask questions if something is not clear

Listen to the communication

Examples of collaboration:

The component auditor must keep in mind:

• The local financial statement is only for compliance of the local rules.

• The group auditor is responsible for the whole group and relies on the component auditor. (keep the trust!)

• The group auditor must work with the audit package as well and they also have deadlines. (be on time)

• The quality of the local audit depends on the quality of the group audit. (Help each other!)

Opportunities of collaboration

Czech Republic

GmbH & Co.KG

Limited partnership

GermanyUnlimited partner (~99,99%)

Limited partner (~99,99%)

GmbH

Unlimited partner (~0,01%)

GmbH / SRO

Limited partner (~0,01%)

A-Híd big Hungarian bridge-construction company

Set up Czech subsidiary

Financial accounting and Payroll

Tax advisory

Legal advisory – construction law

Public procurement

Opportunities of collaboration

Teaha Management Consulting

Collaboration between circles: Discussion

Collaboration Central & Eastern Circle: Discussion

Group Audit & Software Support

News from the members

News from the members:

• Since several years cooperation with law firm Dr. ScholzFrank Thomsen & Partner.

• 2015: Discussions on strengthening the partnership between BHP and Dr. Scholz Frank Thomsen & Partner.

• Dr. Scholz Frank Thomsen & Partner is a law firm founded in 1937 with experienced and dedicated lawyers, specializing in a broad range of commercial and corporate law.

• Each partner and attorney handles his specific areas of expertise which enables us to provide custom-tailored services.

• Each client shall establish a close relationship with his counsellor, so we can become acquainted with his needs, demands and concerns.

News from the members:

News from the members:

• Legal advice to companies from four continents about:• Corporate Law (M&A, Restructuring)

• Commercial Law (national & international)

• Employment Law

• Insolvency Law

• Real Estate Law

Joint Business Opportunities

Gräwe & Partner Consulting GmbH

Joint Business Opportunities

• Mr. Daniel Maatz, CPA

• Appointed as new GM as of January 1, 2016

• CPA designation in 2010 (US-GAAP)

• Master of Auditing, Finance and Taxation, University of Osnabrück

• BA European Finance and Accounting, University of Bremen

• BA (Hons) Degree, Leeds Becket University

• Served for 11 years as Audit Manager and Audit Senior (Gräwe & Partner

GmbH, EY, Osterloh & Nottbohm GmbH)

• Professional banker, Oldenburgische Landesbank AG

Gräwe & Partner Consulting GmbH - Services

Joint Business Opportunities

• Our service portfolio has grown

• Experts are available in the internal audit field while the company has

augmented the services provided by the controlling, reporting, and interim

management departments.

• Experienced professionals are available in the area of sales organization

analysis, market development, franchising systems, etc.

Gräwe & Partner GmbH – A New Generation Advances

Joint Business Opportunities

• Mr. Laurenz Möllmeier is no longer involved as Partner since January 1, 2016.

However, Mr. Möllmeier will continue with the company until his retirement in

mid-2017.

• Mr. Alexander Sloot has assumed the Partner and GM positions as of January

1, 2016.

• Prof. Dr. Detlev Schrade will start reducing his work volume from mid-2017

until termination for retirement at the end of 2018.

• Mr. Gunnar Schwede will initially assume the GM position at Gräwe & Partner

GmbH.

Gräwe & Partner GmbH – Czeching out Business in Germany

Joint Business Opportunities

• Gräwe & Partner GmbH has become a member of the German-Czech

Industrial Chamber of Commerce in Prague.

• A close cooperation with lawyers covering both legislations on the German

territory.

• Efforts to forge business to the extent of involving MGI partners as part of the

engagement

• Mr. Marcel Valtr coordinates our Czech-German and other international

business in Germany.

RLT Cologne

RLT established an office in Cologne effective 10/2013

Spin-off of former O&R Oppenhoff & Rädler AG officein Cologne (existing since 2001)

Markus Sellmann(51 years)

Michael Nolte(39 years)

Auditor andTax Consultant

Auditor andTax Consultant

more than 20 years of businessexperience

more than 10 years of businessexperience

Who

we are

RLT Cologne

What

we do

• Long lasting experience in the support of(international) law firms

• Tax and financial advice in the context of M&A transactions (national and inbound)

• Tax restructuring, especially for SME

• Tax compliance services in Germany for national and international enterprises of all sizes

• Accounting related support for lawyers in case ofarbitration and litigation

Changes in Management of RLT IT

Oliver Graß Sebastian Rütten

Changes in Management of RLT IT

Sebastian Rütten

- Joined RLT in 2010

- CISA

- Certified SAP-Consultant

- Lead Auditor ISO/IEC 27001

- Started Career in Banking Sector, especially IT-Development

- E&Y, Advisory Services IT-Risk

- Heading a team of 6

- Continued services in IT-Audit

- Extra focus on- Data Analytics

- In-House Training for Audit Teams in using IDEA, expanding to ACL (DATEV)

Who we are

www.votum.eu

• Offices in Frankfurt, Hofheim, Wiesbaden

• National and International Tax, Auditing, Accounting and Corporate Law

• 30 professionals and employees

New Services

CIA – Certified Internal Auditor

• Only globally accepted

certification for internal auditors

• Risk-based audit approach –

focus an scaling financial audits, depending on

complexity and type of business

• (outsourced) internal audits for clients

New Services

„Perfect match 2.0“

• Spanish language skills

Succes Stories

Worldwide audit client

• Integration LTA, Czech Republic

• Due Diligence and tax consulting Steirer·Mika & Comp., Austria

• Offer mgi de leone-triunfo-galloni & associati, Italy

Factoring client

• Budliger Treuhand, Switzerland

• Revideco, Sweden

News from IC, TC & ECC

May 2015 –Strategic Workshop New Orleans

• Facilitated full day workshop

• Focus on collaboration

• Confirming importance of areas

• Value for members

• Need for recruitment

Similarities to the outcome of the EAM

Key Action Points Emerging Since NO

After all the formal discussion – re-emphasise on expectations of

• Members towards MGI/Mint

• Members towards Members

• Definition of areas to work on

• Ask the members!

The results of the survey

Working on the benefits

• Underline the need for member engagement

• Exchange with areas about meeting structure/content

• Getting in Touch

• Create tools to interact with other members, e.g. Webinars

• Knowledge exchange

• Promoting business exchange opportunities

• Value of the brand

Looking at the costs of membership

• Subscriptions too high?

• International fees unchanged since 2011

• Comparison with other organisations

• Examination of other models

• Surveys 2012 / 2014 – fees are about right

• Continuous monitoring

Recruitment

• Need to be active

• General market consolidation

• Loss of members

• Better coverage – with quality

• Importance of area development and involvement

• M&A opportunities

• Strengths in areas where we are week / have need to grow

• Little overlap

• Quality of member firms

Looking Ahead

• IC

• 2 meetings / 2 conference calls

• EC

• 4 meetings / 3 conference calls

• Follow-up on actions points

• Network implementation

• AGM 2016 Santiago / 2017 Frankfurt

News from the TC: work since April 2015

• Management/coordination of SWAT-UK • Audit independence register (AIR) – confidentiality isssues

raised by several members• Access to AIR – change from Excel to web based tool• Explanations will follow – see below

• Handling of questions from members• E.g., is an MGI on site review allowed due to confidentiality

required by the German WPO? • Check with German Chamber auf Auditors (WPK)

• Minor changes of network regulations mainly relating to• E.g., who is to be informed in case of audit independence

threats• Final version accepted by the IC in December 2015

News from the TC: work to come

• On site reviews requested by members for2016 for regulatory reasons

• Development of on site review checklist(SWAT-UK will be involved)

• Review of self assessment questionnaires in 2016

• Development of criteria for on site reviews

• Preparation of reviewers

• Improvement plan for firms

News from the TC: new Audit Independence Register (AIR)

News from the TC: new Audit Independence Register (AIR)

News from the TC: new Audit Independence Register (AIR)

News from the TC: new Audit Independence Register (AIR)

European Coordinating Committee update

Montabaur

22-23 April 2016

• Strategic debate

• EAM

• Recruitment

Debate on the MGI European Strategy

EAM 2015 in Mello

What we learned in EAM 2015 1. Enhancing business, building alliances.

2. Flexible working.

3. How to link change management and Staff motivation

4. How many MGI meeting we need?

5. How to communicate?

6. How to enhance MGI culture?

7. How to implement innovation management for producing products?

8. How to share professional experience?

9. How to work together between China and Europe?

10. How we generate more local membership value?

11. Interaction with North Am.

12. Inter-firm comparison.

13. Measuring MGI benefits other than referrals.

14. New member presentations.

15. Secondment of staff between offices.

16. Use of MGI Europe to approach target clients.

17. VAT practice group.

18. What value do we get from MGI.

Heritage from EAM 2015 Mello

• 18 topics were discussed

• Need to define where the European Area would like to be in 3 years

Strategic debate among European Circle Coordinators

Desired outcome:

• Agreed strategy, budget, implementation plan

• Distribution of tasks among ECC members

• Increased efficiency on costs, communications, working together

Question raised

• Do we fully embrace the global strategy?

• Where does Europe should put the focus on?

Goals

Steps one:

Develop a culture of a higher level of COLLABORATION among European members.

Step two:

Deliver sustainable business growth for MGI Global and MINT firms

Collaboration

because

• its is specific to MGI as an alliance,

• it is measurable - currently we measure as number / value of inward referrals however we can extend it

• it is achievable - see ideas of our Open Space discussions

• it is realistic - we can gradually execute it, as budget allows

• it is timely - the network aims and necessitate a level of collaboration

Mind map 1 – based on Mello outcome

Mind map 2 – finally agreed focus points

Developing executions in 3 areas

1. Improving quality of service (readiness, speed of reactions, flow of information, handling disputes, etc. )

2. Collaborative business building

3. Culture of engagements

ECC formed 3 teams dedicated to each area to develop executions and share their thoughts at the coming EAM.

EAM 2016

Our venue

Location is Noorwijk – a 35 minute drive from Schipol Airport

Agenda

08-Jun Programme Speaker

14:00- 19:00 Arrival of delegates and free time activities

19:00 - 19:30 Pre Dinner Drinks

19:30 - 22:00 Dinner

09-Jun Programme Speaker

08:30 - 08:45 Welcome speech Francesco Bartolucci

08:45 - 10:00 European Strategy ECC presentation

10:00 - 10:30 Coffee break

10:30 - 11:30 European Strategy Round I All - team conversations

11:30 - 12:30 European Strategy Round II action plan All

12:30 - 13:30 Lunch All

13:30 - 14:00 New member presentation

14:00 - 14:30 MGI IC and Technical Committee update Thomas Althoff and Michael Grüne

14:30 - 15:00 MGI Accounts Nico Hansen

15:00 - 15:30 Coffee Break All

15:30 - 16:00

16:00 - 19:30 Free time

19:30 - 22:00 Dinner

Agenda

10-Jun Programme Speaker

09:00 - 10:00 Key Note speaker To be confirmed

10:00 - 10:15 Introduction to professional team conversation

10:15 - 12:00 Professional team conversation All

12:00 - 12:30 Professional team - sharing activity plans All

12:30 - 13:00 Lunch

14:00 - 18:00 End of conference, departures

Workshop on collaboration –Mediterranean Circle Meeting

Challenges to face when collaborating

• Do we have reliable MGI colleagues?

• What the flow of information is going to be?

• Who gets the money?

Improvement areas

• Trust other members (quality and attention)

• Promote MGI members

Opportunities for collaboration

Strong knowledge of MGI firms within our firms

Next Steps - ECC

1. Analyze the survey on barriers to collaboration

2. Finalize action steps of the three strategic area

3. Share the strategic proposal at EAM 2016

Recruitment

Firm left MGI during the past 12 months

• Revisionsfirman Öresund KB - Malmö

• MGI Group Fiduciaire - Lausanne

• Advisa Treuhand-Anstalt -Vaduz

• AB - Antonio Bernardo Lda -Lisbon

• Audit-Business-Platform LLC - Saint-Petersburg

Recruitments

Hired a telephone marketing agency to make initial contacts of potentials firms in Russia that could be followed by visits.

• Use of Google Adwords is under consideration

• Regions

• Germany

• Baltic countries

• Balkans

Close of the meeting