exceeding expectations october 2007 presentation to: exceeding expectations

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EXCEEDING EXPECTATIONS OCTOBER 2007 Presentation to: EXCEEDING EXPECTATIONS

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Page 1: EXCEEDING EXPECTATIONS OCTOBER 2007 Presentation to: EXCEEDING EXPECTATIONS

EXCEEDING EXPECTATIONSOCTOBER 2007

Presentation to:

EXCEEDING EXPECTATIONS

Page 2: EXCEEDING EXPECTATIONS OCTOBER 2007 Presentation to: EXCEEDING EXPECTATIONS

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AGENDA

Section

About DMCTOur Value AddOur City

Our ServicesTax AdvisoryAudit & AssuranceTransaction Advisory

Closing Comments

Page

35678

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NOTICE TO READER:

The following material was presented by DMCT at the Nexia International Dublin Conference. If you have any questions or would like further clarification, please contact Enzo Testa, Senior Tax Partner, DMCT at 416.322.1656 or [email protected].

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EXCEEDING EXPECTATIONS

ABOUT DMCT

Page 4: EXCEEDING EXPECTATIONS OCTOBER 2007 Presentation to: EXCEEDING EXPECTATIONS

About DMCT

DMCT was established in 1992 and has a team of over 80 financial professionals who focus on tax, audit & assurance and transaction advisory services.

DMCT is one of Toronto’s top ten largest independent accountancy and financial advisory firms. We service over 1,000 clients in a variety of industry sectors focusing on private and public

companies in the mid-market with revenues that range between $10MM and $100MM USD.

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TAX ADVISORY AUDIT & ASSURANCE TRANSACTION ADVISORY

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Our Value Add

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OUR VALUE ADDREQUIREMENT

Experience & Track Record

Over 15 years of professional and dedicated project management experience

Over $1.5 billion USD of completed transactions over the last four years

Experience in relevant market segments

Team

Experienced group of professional advisors with dedicated service disciplines

Team approach on all assignments Industry expertise

Network & Credibility

Mid-market focus, alternative to the “Big 4” Excellent reputation with Legal Firms, Financial Institutions

and Regulators Transaction-relevant know-how (IPOs, Leveraged Buyouts,

Re-orgs, etc.)

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Our City

DMCT is located in the downtown city core of Toronto, Canada’s largest economic centre with a population of over 5.5 million.

Toronto's leading economic sectors include finance, business services, telecommunications, aerospace, transportation, media, arts, film, television production, publishing, software production, medical research, education, tourism and sports industries.

More than 200,000 highly skilled employees make Toronto’s financial services sector the third largest in North America after New York and Chicago.

Toronto boasts the largest financial sector in Canada and is home to the world’s sixth largest stock exchange, the TSX.

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Over 300 foreign companies have subsidiary operations in the Toronto region.

Toronto has lower overall business costs than most large G-8 cities.

The second largest multi-cultural city after Miami with nearly 50% of the population originating from other countries

56 Canadian Companies rank among the top 500 fastest growing technology companies in North America.

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EXCEEDING EXPECTATIONS

OUR SERVICES

TAX ADVISORY AUDIT & ASSURANCE TRANSACTION ADVISORY

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Tax Advisory

DMCT offers an integrated tax practice comprised of some of Canada’s brightest proactive and experienced taxation specialists.

DMCT’s Tax Advisory group manages all details of tax requirements in domestic jurisdictions while strategically serving all transactions requirements.

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TAX ADVISORY

Domestic Structuring Cross – Border Structuring Strategic Tax Planning International Tax Planning In bound / Out bound

Investment

Corporate Reorganizations Transfer Pricing Income Tax Minimization R&D Claims Corporate Tax Compliance Representation with CRA

Industry specific knowledge translates into efficient, high-value service

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Tax Advisory Case Study: Structuring International Subsidiary

Client: Stock Photo CompanyIndustry: Technology

Client Need: With international customers, this Canadian based Company made the decision to cease operating with

agency agreements and set up offices where they have experienced high demand for images. The client decided to focus on their European customers and set up four offices in the UK, Germany, France

and Italy.

DMCT Role: To find the most optimal structure from a tax perspective, to minimize tax exposure, and maximize after-tax

funds transferred back to the Canadian group.

Recommendations and Client Benefits: With the recent elimination of the withholding tax in the UK, we recommended that the Company set up a

HoldCo in the UK with subsidiaries in the remaining countries (Germany, France, Italy). As members of the EU, the countries are now able to flow their dividends to the UK HoldCo and not be subject

to withholding tax. Additionally, with this structure the Company benefits from the UK tax regulation that allows a UK company

with a controlling foreign ownership to flow dividends back to the Canadian entity tax-free. The Company has benefited by having a structure where they do not remit withholding taxes which typically

range from 15-30% and allows the Company to have tax-free dividends to flow back to the home entity.

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Tax Advisory Case Study: Asset and Share Sale Transaction

Client: Private Equity Company (“Private EquityCo”)Industry: Manufacturing

Client Need: Two private equity firms, through one of their investees, set out to complete their first strategic purchase and

required both financial due diligence and transaction structuring.

DMCT Role: Our first role was to take a signed Letter of Intent based on a share purchase and structure a transaction on an

asset basis. We recommended to the vendor’s advisors that changing to an asset-based transaction would result in no

material difference in after-tax benefits to the vendors. We performed financial due diligence. We assisted in the negotiation process.

Recommendations and Client Benefits: We structured the transaction as an asset purchase, leaving the vendor’s position neutral and providing a

$2MM tax shield to the client. In addition, we structured the transaction in a manner that allowed the Canadian vendor to defer tax on the

portion of the purchase proceeds that was reinvested into the acquiring US entity. We assisted in the drafting of the Purchase Agreement so that the definitive agreements reflected the tax

objectives.

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Audit & Assurance

Our audit and assurance teams are structured to assist clients with the analysis, interpretation and application of accounting standards.

All aspects of a client’s financial position are considered but our focus and energy is spent in areas that represent the greatest risk.

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Audit Services: Standard & Specialty

Financial Accounting Virtual CFO IDA Panel Auditor

Cross Border / International Audits

Management Reporting / Profitability Analysis

Specialty in Public Markets

AUDIT & ASSURANCE

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Public Markets

Public companies trust DMCT to provide expert advice and strictly adhere to the CPAB (Canadian Public Accountability Board) code of conduct and stringent reporting guidelines.

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DMCT

CPAB (Canadian Public Accountability Board) registered which allows us to audit Canadian listed public companies.

Audit over 50 public companies on Canadian stock exchanges. Deal with public and going public companies. Extensive experience with prospectus financings and initial public offerings. Well networked with securities lawyers, board of directors, private equity and industry professionals in Canada. Experienced with Capital Pool Companies, REITs, Income Funds. Advise other public companies in non-audit role, primarily with financial reporting (Virtual CFO, MD&A, etc.). Assist foreign issuers with Canadian listing requirements, working alongside Nexia affiliates.

Partners with Influence

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Audit and Assurance Case Study: Canadian Audit with Subsidiary in Australia

Client: Canadian Public Company with Subsidiary OperationsIndustry: Technology

Client Need: A Public Technology Company on the Toronto Stock Exchange (“TSX”) headquartered in Toronto with two

subsidiary operations in Canada and Australia required a cost efficient Consolidated Audit and Financial Reporting that meets the Canadian public filing requirements and fulfills the local statutory reporting requirements for the operating subsidiaries.

DMCT Role: DMCT planned and carried out audit procedures of all Canadian Operations in a cost efficient manner. DMCT selected local firms in the operating jurisdictions to complete an Audit Review with their Audit Opinions. The local Australian Auditors provided the audit and opinion on the Australian operating subsidiary. Once the

Auditors’ Report was received, we carried out procedures to satisfy our requirements so that we can rely on the secondary auditor opinion.

Recommendations and Client Benefits: Cost efficient consolidated financial Auditors’ Report that meets Canadian public regulatory filing requirements

and local statutory reporting requirements for the operating subsidiaries. The subsidiaries maintain a relationship with local firms and therefore have access to resources in each operating

jurisdiction for tax compliance, tax planning and any other issues where local expertise is a requirement.

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Transaction Advisory

Our Transaction Advisory group helps clients manage risk: financial, deal structure, market, technology and management.

Our focus is on deals ranging between $5MM to $250MM USD. Our clients include: financial institutions, private equity firms, and corporate development teams. A true alternative to the “Big 4”, servicing North American-wide Buyers, Investors and Sellers.

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TRANSACTION ADVISORY

Due Diligence IPOs, Reverse Takeovers,

Income Trust Conversions, Privatization

Valuations, Opinions and Estimates

Structuring LOI’s and Negotiating PSA’s

Proforma Financial Modeling Debt and Equity Financing Corporate Finance

In the last 48 months, DMCT’s Transaction Advisory group has advised both public and private companies on completed transactions that value in excess of $1.5 billion USD.

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Transaction Advisory Case Study: Cross Border Due Diligence

Client: US Private Equity Co.Industry: Industrial ManufacturingDeal Size: $85MM USD

Client Need: DMCT was hired by a US private equity group to complete financial due diligence on the purchase of an

Industrial Manufacturing Company located in Canada.

DMCT Role: DMCT performed due diligence on the target company. DMCT assisted in the negotiation process.

Recommendations and Client Benefits: During the due diligence engagement, DMCT identified several key contracts that were expiring soon after the

expected close date. DMCT was able to quantify the earnings impact of these large contracts which provided a basis for the purchaser to discuss the risks associated with these contacts with the vendor and develop a reporting mechanism to keep their eye on these contracts post closing.

Also as part of the due diligence, DMCT continued its review of the Company on a monthly basis, even after the report was completed, right up until closing. As a result of this follow up review, DMCT identified a decline in the vendor’s working capital prior to closing which resulted in a $4MM USD price adjustment in the purchaser’s favour.

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The Right Choice for Your Canadian Services

DMCT is one of Canada’s fastest growing Mid Market Public Accounting firms, on track to grow over 20% this year.

Serving both private and public companies in a wide range of industries, DMCT has developed a reputation for being a real choice for quality and value added financial advice due to the depth and breadth of in-house skills, customized offerings and a commitment to excellence in customer service.

DMCT is entrenched in and has substantial representation in the largest financial centre in Canada where the client base demands results-driven advisors for their financial needs.

Unmatched service and deep financial offerings in Audit, Tax, and Transaction Advisory Services makes DMCT the right choice for extending your network’s reach, capability and marketability.

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To learn more about DMCT please visit us at www.dmct.com