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Beyond Value

Value is an elusive and judgemental notion. As a consequence, assessments of value can be subject to bias and open to challenge. For many legal, fiscal, regulatory or financial reporting purposes you require a robust, independent expert opinion of value. With our extensive experience, strong reputation and track record in corporate finance, we provide independent expert opinions of value in all manner of circumstances.

Revealing Value

To make the best investment decisionEven if we talk about transactions involving businesses, tangible or intangible assets or financial instruments, understanding their market value is the first step in taking a decision.

To comply with accounting standardsPurchase price allocations in compliance with IFRS 3 Business Combinations, revaluation of PPE according to IAS 16 Property, Plant and Equipment, impairment test as per IAS 36 Impairment of Assets, actuarial calculations according to IAS 19 Employee Benefits are just some examples of services that require extensive valuation expertise within the relevant accounting framework.

To maximize your tax benefitsRevaluation of real estate assets every three years as permitted by the Romanian Fiscal Code, transfer pricing for transactions within a Group or contributions in kind allow you to take advantage of the possible tax savings while complying with the fiscal legislation.

To finance your businessIn order to access bank loans or European funds, we assist you to build a business case through financial or economic feasibility studies, market studies or business plan analysis.

Value is high on every corporate agenda. It could be in a business, brand or bonus plan; about investment, divestment or impairment; needed for a takeover, transfer pricing or tax assessment.

Every valuation includes a figure. But a figure on its own may not tell the whole story or take the decision for you. Valuation is about expert analysis and understanding of the facts behind the figures.

Whatever the issue is, we will add our judgement to yours, helping you to take the right decision.

Why do you need reliable and timely values?

Overview

We are in business to build trust and enhance value for our clients and their stakeholders. We build value by bringing our clients expertise, experience and insight – as well as fresh perspectives – by leveraging both our local and global networks. We build trust by being straight with our clients, by being unafraid to challenge our clients, by making sure they have the accurate information they need, when they need it, and by advising them for their long-term goals as well as their short-term needs.

Capturing Value

Business ValuationThere are a wide range of circumstances in which an independent opinion of value on a business is required, and each different scenario requires specialist knowledge and the application of specific skills:

• Mergers & acquisitions, share capital increase etc;

• Mandatory takeovers;• Regular valuations of unlisted

businesses for performance measurement purposes.

Tangible Asset ValuationA transaction involving a tangible asset normally implies its previous valuation by a specialist, consequently the independent opinion of value can be relied upon for both information purposes and negotiation support. Through our extensive experience, we are experts in real estate asset valuations and in valuations of specialized equipment.

Intangible Asset ValuationApart from assets already recognised in the balance sheet, a company may also own internally developed intangible assets. Depending on the industry, a brand or customer list can add significant value to a company. Intangible assets might be transferred on a single basis or as part of a company. Market value estimates of intangible assets proved to be supportive in price negotiation. Brand values are often released to the public, providing an indication on global perception about the respective company or brand.

Financial Assets and Liabilities ValuationThe complexity, diversity, and proliferation of financial instruments in recent years have intensified the demand for services relating to their valuation. We provide market value estimates of sophisticated financial instruments, including complex derivatives, swaps, convertible bonds, non-performing loan portfolios, commodities and other investment products.

Transaction Support Valuation

Understanding the value likely to be created through a transaction is vital – should the transaction refer to a business as a whole or to any of its assets or liabilities. Valuing all or part of a business requires understanding and analysis of a variety of complex factors. These include both detailed technical knowledge of value drivers and in-depth industry knowledge.

Our Services

Our valuation specialists assist you to achieve a thorough understanding of the value of each business or asset in a transaction. Our leading-edge technical knowledge combined with our in-depth industry knowledge allows us to understand the specific factors driving each individual deal.

Purchase Price Allocation (“PPA”)The process of identifying and measuring at fair value all assets and liabilities of an acquired entity following a merger or acquisition. IFRS 3 Business Combinations requires that assets and liabilities of the target company are recognized at fair values. Especially internally generated intangible assets (such as brands, technologies, patents or customer relationships) of the target company have to be identified and valued. The standard has recently been subject to significant changes and requires enhanced valuation expertise for acquisitions.

Real Estate (RE), Machinery and Equipment (M&E) ValuationIAS 16 Property, Plant and Equipment (“PPE”) provides companies with the opportunity to benefit from periodical revaluation of their PPE. The standard has been subject to significant changes and requires enhanced valuation expertise.

Impairment TestAccording to IAS 36 Impairment of Assets, intangible assets, including goodwill shall be tested for impairment at least annually whereas tangible assets are tested for impairment when a triggering event is identified.

Actuarial CalculationCompanies that provide retirement benefits to their employees should provision these amounts in their financial statements in compliance with IAS 19 Employee Benefits and Order no 907 from June 2005 issued by Romanian Ministry of Finance.

Financial Instruments Valuationis covered by IAS 39 Financial Instruments: Recognition and Measurement. Some financial instruments, such as swaps, futures, options and other securities, are required to be measured at fair value.

Accounting Valuation

International Financial Reporting Standards (IFRS) and Romanian Accounting Standards (RAS) introduced significant changes to the way accounts shall be prepared and presented, requiring a wider range of assets and liabilities to be measured at fair value on an annual basis.

Our Services

These considerable changes call for specialist valuation services that both understand the specific accounting implications and the wider commercial context in which those accounting valuations will apply. PwC draws on considerable technical and financial specialisation combining both valuation and accounting expertise to meet your specific requirements.

Valuations often lie at the heart of disputes and negotiations with tax authorities. The specific demands of the tax authorities require specialist advice and detailed knowledge of their working methods and practices.

In compliance with the Romanian Fiscal Code, a real estate revaluation every three years maximises the possible tax benefits. For instance, for a building revalued within the last three years the applicable tax rate lies in the range of 0.25% - 1.5%, whereas the same building, if not revalued, triggers a tax rate between 5% to 10%.

A change in corporate structure, a disposal of assets or a new shareholding arrangement are just some of the issues that can impact business values and create tax liabilities.

Share schemes and other forms of employee incentive programmes need to be valued in accordance with specific legislations and regulations.

Complex assets such as goodwill, know-how and other intangibles have to be valued for tax purposes.

Unlisted businesses face specific challenges when negotiating and agreeing values with the tax authorities, for instance at what value to settle taxes in case of transferring a company within its group (transfer price).

Where an asset is exchanged for an equity share in a business, an independent valuation is required to demonstrate the appropriate value of the contribution in kind.

Tax & Legal Valuation

Our Services

Our team of dedicated specialists understands the demands of the tax authorities and are able to provide knowledge of the latest valuation techniques combined with clearly documented advice. In addition, we produce detailed and comprehensive documents that can be submitted to the relevant fiscal authority.

Financial Feasibilitystudy provides quality information for decision taking and / or assistance in securing funding from credit institutions, European funds or other sources.

Economic Feasibility Study(cost-benefit analysis) is normally built on the information provided in the feasibility study and is often a prerequisite for EU or public funding programmes. The analysis sums up the strengths, weaknesses and validity of assumptions as well as assesses the financial and non-financial costs and benefits underlying preferred options.

Business Planis prepared as an integral ingredient of procuring debt capital from potential investors, bankers and other lenders. The business plan is essential when taking a business public or selling all or part of a company.

Financial Modellingprovides management with more useful information relating to strategic decisions, improves capital management or assists in gaining understanding of the dynamics of a company and the factors that need to be considered within the risk management framework.

Strategic Financial Modelling

A complex range of economic factors need to be analysed before taking an investment decision that may refer either to entering a new market or sustaining existing activity. This type of investment decisions means building an understanding of the many different strands that influence the relative strength and weaknesses of an economy.

Macro-economic considerations need to be taken into account alongside specific and detailed analysis of the potential market for a particular product or service.

Our Services

PwC’s services to support business planning combine advanced technical resources with commercial awareness based on in-depth direct experience of specific industry sectors. Our specialists, whilst offering leading-edge economic skills, also understand the commercial imperatives that drive business success.

PwC provides industry-focused services for private and public clients in order to build trust and enhance value. As now you have seen each section of Our Services hopefully you discovered the benefits we can bring to you – whatever the size of your organisation.

Enhancing Value

With our extensive experience, strong reputation and track record in corporate finance, we provide independent expert opinions of value in all manner of circumstances. As a large specialist business valuation practice in Romania, we have performed many independent, expert valuations for various purposes.

PwC acts in a global manner by a single set of high standards and a strong sense of the international market place. Based on our knowledge in transactions gained through corporate finance practice and our global network, we ensure that the valuation takes full consideration of all industry – and country-specific issues.

By providing deep industry and technical knowledge, supported by rigorous market, economic and financial analysis, we enable you to deliver the best results for your business.

PwC is an independent expert valuator recognized by the Romanian National Securities Commission, the Romanian Ministry of Industry, the Romanian Ministry of Transport and other different governmental organisations. For over 15 years, PwC has been an active full member of the relevant professional association – ANEVAR (National Association of Romanian Valuators).

Our team experts are members of ANEVAR (National Association of Romanian Valuators) and certified appraisers in different areas like business, real estate, financial instruments or plant, machinery and equipment valuation. Our team includes CFA, ACCA or CPA charterholders and members of relevant international professional associations like RICS (Royal Institution of Chartered Surveyors) and of TEGoVA (The European Group of Valuers).

Our formal report will be tailored to meet your specific requirements. We recognize that the clear communication of our valuation opinion and the basis upon which this opinion has been drawn can be as important as the opinion itself. We would typically prepare a valuation report summarizing the valuation work undertaken and supporting the conclusion of value.

We deliver a truly independent expert opinion of value through our team of dedicated specialists backed by the reputation and resources of PwC.

Our Team

Reporting

Why PwC?

People engage PwC to help them design, manage and execute lasting change. Increasingly, value is created across a complex network of partners, suppliers, customers, regulators and stakeholders. Survival and success depends on collaboration amongst them. Our consultants bring together a full range of functional and industry skills to help you in this environment. We take the time to listen and have the courage to debate different points of view – based on independent and challenging insights, supported by facts and industry benchmarks.

Care for Value

© 2012 PwC. All rights reserved. Not for further distribution without the permission of PwC. “PwC” refers to the network of member firms of PricewaterhouseCoopers International Limited (PwCIL), or, as the context requires, individual member firms of the PwC network. Each member firm is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control the exercise of another member firm’s professional judgment or bind another member firm or PwCIL in any way.

Your PwC contacts

Radu StoicoviciuPartnerCorporate FinancePhone: +40 21 225 3620radu.stoicoviciu@ro.pwc.com

Sorin PetreDirectorHead of Valuation and StrategyPhone: +40 21 225 3629sorin.petre@ro.pwc.com