JOHANNSEN · BASEDOW + PARTNER AG

JOHANNSEN · BASEDOW + PARTNER AG 4th North European Conference St. Petersburg May 2008

JOHANNSEN · BASEDOW + PARTNER AG • Location • we have our offices in the Northern Partof Germany in • Hamburg (center) • Hamburg Finkenwerder • Schwerin • Rostock Kreston 4th North European Conference St. Petersburg

JOHANNSEN · BASEDOW + PARTNER AG • locations Kreston 4th North European Conference St. Petersburg

JOHANNSEN · BASEDOW + PARTNER AG • HamburgGänsemarkt 50 Kreston 4th North European Conference St. Petersburg

JOHANNSEN · BASEDOW + PARTNER AG • Group • Johannsen . Basedow +Partner AG • Tax consultancy • Johannsen . Basedow +Partner GmbH • Audit company • Heuer, Finck & Kollegen • Tax consultancy • Johannsen . Basedow – Külper + Röhlig GmbH • Tax consultancy Kreston 4th North European Conference St. Petersburg

JOHANNSEN · BASEDOW + PARTNER AG • Personell • 5 senior-partners • total staff about 35 • qualifications • 1 Wirtschaftsprüfer (cpa) • 8 Steuerberater (tax consultant) • 1 Rechtsanwalt (attorney at law) • qualified personnel with special training Kreston 4th North European Conference St. Petersburg

JOHANNSEN · BASEDOW + PARTNER AG • language • German • English • Russian Kreston 4th North European Conference St. Petersburg

JOHANNSEN · BASEDOW + PARTNER AG • Services provided • auditing • annual statements • consolidated statements • other: • broker • disposal of packing material • prospectus Kreston 4th North European Conference St. Petersburg

JOHANNSEN · BASEDOW + PARTNER AG • Services provided (cont.) • accountancy • bookkeeping • departmental costing • pay roll accounts • preparation of annual financial statements • preparation of consolidated financial statements Kreston 4th North European Conference St. Petersburg

JOHANNSEN · BASEDOW + PARTNER AG • Services provided (cont.) • taxation • for • Individuals • companies and other corporate bodies • non profit organisation • tax returns • tax consulting and planning • legal remedy at tax court Kreston 4th North European Conference St. Petersburg

JOHANNSEN · BASEDOW + PARTNER AG • Services provided (cont.) • consulting • financing and investment advices • merger & acquisition • reorganisation, restructuring • Business planning • real estate • real estate investment trust Kreston 4th North European Conference St. Petersburg

JOHANNSEN · BASEDOW + PARTNER AG • Kreston • member since 1993 • received referrals from • Austria • Denmark/Sweden • Netherlands • United Kingdom • USA Kreston 4th North European Conference St. Petersburg

JOHANNSEN · BASEDOW + PARTNER AG • Kreston • our service for Kreston clients • tax advice • lookkeeping • pay roll accounts • annual audit • preparation of annual accounts • financial planning • merger & acquisition Kreston 4th North European Conference St. Petersburg

JOHANNSEN · BASEDOW + PARTNER AG • Services for east-european clients • Hamburgische Gesellschaft für Wirtschaftsförderung mbH, Hamburg • Our assistance • Establishing of subsidiaries • Establishing of branches • Bookkeeping and tax consultancy • Business plans Kreston 4th North European Conference St. Petersburg

Corporations 2007 Gewerbesteuerca. 20 %deductible Körperschaftsteuer + Solidaritätszuschlagca. 26,4 %not deductible total tax on profitca. 40% in Hamburg Corporations 2008 Gewerbesteuerca. 14 %not deductible Körperschaftsteuer + Solidaritätszuschlagca. 15,8 %not deductible total tax on profitca. 30% in Hamburg Changes in taxation in Germany Kreston 4th North European Conference St. Petersburg

shareholder of corporations 2008 Corporations ca. 5 % Business individuals 50-%-income-method Private individuals 50-%-income-method shareholder of corporations 2009 Corporations ca. 5 % Business individuals 60-%-income-method Private individuals 25-%-withhold-tax No income related expenses deductible Changes in taxation in Germany Kreston 4th North European Conference St. Petersburg

Changes in taxation in Germany • partnerships 2008 • Special taxation for reserved earnings • No more degressive depreciation • Only straight-line method • Interest expenses • Exemption limit 1 Mio. € • Deductible are only 30 % of ebita Kreston 4th North European Conference St. Petersburg

Changes in HGB in Germany • HGB = German Commercial Code • Includes the legal regulations for accounting and auditing • draft of the „Bilanzrechtsmodernisierungsgesetz" (German code to bring up to date the accounting law) • eighth EU-guideline (auditors-guideline) Kreston 4th North European Conference St. Petersburg

Changes in HGB in Germany • Requirements for the license as auditors, • independence, • establishment of ISA as standard for statutory audits, • quality assurance, • analysis of audit fees and • regulations for corporations wich public interest Kreston 4th North European Conference St. Petersburg

Independence - § 319 (2) • German public auditors may not audit financial statements if there are grounds that indicate that their independence may be impaired, in particular • Business relationships • Financial relationships • Personal relationships Kreston 4th North European Conference St. Petersburg

Independence - § 319 (3) • Specifically, German auditor are excluded from auditing financial statements if they, or a person with whom they jointly practise their profession: • Hold shares or some other more than merely insignificant financial interest in the corporation to be audited Kreston 4th North European Conference St. Petersburg

Independence - § 319 (3) • excluded from auditing if they…cont. • Hold an financial interest in a company • that is affiliated with the corporation to be audited or • that holds more than 20 % of the shares of the corporation to be audited Kreston 4th North European Conference St. Petersburg

Independence - § 319 (3) • excluded from auditing if they…cont. • are a legal representative, a member of the supervisory board or employee • of the corporation to be audited or • of a company • that is affiliated with the corporation to be audited or • that holds more than 20 % of the shares of the corporation to be audited Kreston 4th North European Conference St. Petersburg

Independence - § 319 (3) • excluded from auditing if they…cont. • over or above the audit activities at or for the corporation to be audited • have been involved in keeping the accounting records or preparing the annual financial statements to be audited • have been involved in the performance of internal audit functions in a position of responsibility Kreston 4th North European Conference St. Petersburg

Independence - § 319 (3) • excluded from auditing if they…cont. • over or above the audit activities … cont. • have rendered corporate management or financial services, • have rendered independent actuarial or valuation services that have material bearing on the financial statements to be audited • this shall also apply if one of these activities is performed by a company in which the auditor is shareholder, employee or legal representative Kreston 4th North European Conference St. Petersburg

Independence - § 319 (3) • excluded from auditing if they…cont. • employ a person on the audit who may not act as an auditor in accordance with nos. 1 to 3 above • have in each of the last 5 years generated more than 30 % of their total income from professional activities • from the corporation to be audited or • from companies in which the corporation to be audited holds more than 20 % of the shares • where this is also expected in the current year Kreston 4th North European Conference St. Petersburg

Independence - § 319 (3) • excluded from auditing if they…cont. • This shall also apply if the spouse or civil partner satisfies a reason for exclusion under sentence 1 nos. 1,2 or 3 above Kreston 4th North European Conference St. Petersburg

Independence - § 319 (4) • German public auditing firms may not audit financial statements if • they • one of their legal representatives • a shareholder owning more than 20 % • An affiliated company • a shareholder or another person employed by it involved in the audit are excluded under subsections (2) or (3) above Kreston 4th North European Conference St. Petersburg

Independence - § 319a • In addition to the grounds listed above German public auditors may not audit financial statements of listed companies if • They have in each of the last 5 years generated more than 15 % of their total income from professional activities • In addition to the audit activities they have provided legal or tax advisory service … • In addition to the audit activities they have been involved in the development, establishment … of accounting information systems • They have already signed an auditors report in 7 or more cases Kreston 4th North European Conference St. Petersburg

Independence - § 319b Draft • an auditor is excluded from auditing financial statements if a member of his network • Fulfils grounds that indicate that their independence may be impaired, in particular • Business relationships • Financial relationships • Personal relationships • Hold shares in the corporation to be audited • Is legal representative of the corporation if the member of the network an influence the results of the audit Kreston 4th North European Conference St. Petersburg

Independence - § 319b Draft • an auditor is excluded from auditing financial statements if a member of his network • have been involved in keeping the accounting records or preparing the annual financial statements to be audited • have been involved in the performance of internal audit functions in a position of responsibility • have rendered corporate management or financial services, • have rendered independent actuarial or valuation services that have material bearing on the financial statements to be audited • this shall also apply if one of these activities is performed by a company in which the member is shareholder, employee or legal representative always Kreston 4th North European Conference St. Petersburg

Independence - § 319b Draft • an auditor is excluded from auditing financial statements if a member of his network … • This shall also apply if the spouse or civil partner of the member satisfies a reason for exclusion under sentence 1 nos. 1,2 or 3 above • following example: The wife of a Chinese Kreston member owns shares of the client to be audited. As far that woman is not involved in the audit, the corresponding German Kreston partner may exculpate himself and accept that audit engagement. Kreston 4th North European Conference St. Petersburg

Independence - § 319b Draft • A reason for exclusion as statutory auditor is given as far as a partner of the network has exercised one of the following areas of responsibilities as far as the audit client is concerned: • Accounting, • actuarial services, • legal or tax consultancy (sec. 319a par. 1 no. 2 HGB), • financial services or • implementation of accounting- and IT systems. Kreston 4th North European Conference St. Petersburg

Independence - § 319b Draft • Legal definition of a Network • There is a network if • persons act in combination at their professional practice • in following of common economic interests • for a certain duration Kreston 4th North European Conference St. Petersburg

Independence - § 319b Draft • criteria of a Network • Sharing of profit or costs • Common property • Common control or management • Use of a common brand • Common quality control system or proceeding • Use of common professional resources Kreston 4th North European Conference St. Petersburg

Independence - § 319b Draft • Demand on a Network • Data pool with all the necessary information about the business activities • the members • the business partners, spouses and civil partners of the members • Companies of the members • or a email system with the need of a 100% response rate Kreston 4th North European Conference St. Petersburg

EURAFNE Conference 2008 18th September – 20th September 2008 Steigenberger Hotel, Hamburg, Germany Hosted by Johannsen · Basedow + Partner AG Kreston 4th North European Conference St. Petersburg

JOHANNSEN · BASEDOW + PARTNER AG