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NewsletterWinter 2017

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This was a year of momentous success for all at Baker Tilly Hughes Blake, and as 2017 draws to a close we look back at some of our accomplishments and take pride in our work and how far we have come as a firm.

Winners of Medium Practice of the Year: Irish Accountancy Awards

Winners of ‘Investing in the Profession’: Wexford Business Awards

Image Business Woman of the Year Nominee

Annual Tax Conference held in the Shelbourne

Recommended Irish Firm by World Tax2018

EIIS Investmentand fundraising

2017: Our Year in Review

2017

In this Issue...

Powerscourt Distillery secures €5 million EIIS investment by Conor Sweeney - Page 2

Annual General Meeting - Getting it Rightby Gráinne Howard

- Page 3

Growth by acquisition - Key steps to successby Aidan Kearney

- Page 4

A New Erafor Audit by Tom O’Reilly

- Page 5

In OtherNews- Page 6

Two new partners appointed at Baker Tilly Hughes Blake

Neil Hughes presenting on examinership in Cyprus

International firm of the year

nominee

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A huge amount of work has taken place since our formation in 2016 and this latest investment enables us to continue the journey toward becoming a premier independent Irish whiskey distillery,” said Alex Peirce, Chief Executive of Powerscourt Distillery.

The investment in Powerscourt Distillery is the third by the Goodbody 2016 EIIS Fund.

“We are delighted to make this investment, which will help Powerscourt Distillery establish itself on the Irish whiskey landscape and to target export markets right from the start,” said Stephen McGivern, Partner, Baker Tilly Hughes Blake.

“Irish whiskey is experiencing strong worldwide growth and our investment helps to provide the Powerscourt Distillery with a robust capital base. The team behind Powerscourt Distillery has many years of experience selling in international markets and, with Noel Sweeney as Master Distiller, they have one of the most experienced and internationally recognised Irish whiskey experts on this island.”

“EIIS is one of the few remaining income tax reliefs available to investors and represents a key element of effective financial planning for many Goodbody clients. We are very happy with the progress of last year’s fund and are currently raising money for the Goodbody 2017 EIIS Fund,” said Simon Howley, Goodbody’s Head of Wealth Management.

Conor SweeneyDirector | Corporate Financeconor.sweeney@bakertillyhb.ie

Powerscourt Distillery secures €5 million EIIS investmentPowerscourt Distillery has secured investment of €5 million from the Goodbody EIIS Fund to finance a significant expansion of its whiskey-making operation in County Wicklow.

The new whiskey distillery has obtained €2 million from the Goodbody 2016 EIIS Fund and a further €3 million is planned for investment early next year. Powerscourt Distillery will use this funding to support the development of the distillery and visitor center, to launch new expressions of Irish whiskey, and to lay down whiskey stock.

Scheduled to open in Summer 2018 on the grounds of the Powerscourt Estate in Enniskerry, the Powerscourt Distillery represents an exciting addition to Ireland’s growing whiskey tourism landscape.

“We are delighted to have secured this investment from the Goodbody EIIS Fund. Our plant is scheduled to arrive from Scotland shortly after Christmas and we expect to create more than 20 new full-time jobs in County Wicklow in the coming months.

L-R Conor Sweeney, Noel Sweeney, Stephen McGivern

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Gráinne HowardDirector | Corporate Governance & Compliancegrainne.howard@bakertillyhb.ie

Annual General Meeting - Getting it Right An Annual General Meeting (“AGM”) is a meeting of the members and is a statutory requirement for every Company. The Companies Act 2014 states that if a default is made in holding the AGM, the company and any of its officers who are in default will be guilty of a category 3 offence.

Routine Business of the AGMThe routine business of an AGM is as follows:

1: Receive the report and accounts laid before the meeting

2: To seek approval of the report on directors’ remuneration, which appears in the report and accounts

3: Declare the final dividend

4: Appoint or reappoint the auditors and determine their remuneration

5: Elect the directors who have been appointed since the last AGM.

Timing of the AGM The first AGM of a company is held within 18 months of its incorporation. They are then held once a year, and must be held within 15 months of each, however, an AGM must be held in every calendar year.

Quorum for the AGMThe minimum number of members that must be present at the AGM is called the quorum. The quorum for limited companies is two members (except in the case of single member companies) and the quorum for PLCs is three members. Failure to have a quorum will result in the AGM being adjourned.

Notice Period of the AGMThe Companies Act 2014 specifies that a notice period of 21 clear days (24 days to include the date of postage, the 24 hours following postage and the date of receipt) must be given to all members entitled to vote at and attend the meeting. If this notice period is not given, the events of the meeting can be disregarded. However, a shorter notice period may be given if all members entitled to attend and the company’s auditors (if the Financial Statements are audited) give written consent for this to happen.

Voting at the AGMMembers who are entitled to vote at the AGM may appoint ‘proxies’ to attend and vote on their behalf if the members are unable to attend.

Minutes of the AGMThe minutes of a company’s AGM may be reviewed by all members, and some companies, such as charities, may release their AGM minutes for public viewing.

Dispensing with the AGMSingle-member companies are not required to hold an AGM. If the sole-member wishes to dispense with the holding of the AGM, they must put this decision in writing and address it to the company. The directors are then obliged to send the accounts to the sole-member for review/approval.If the company is a multi-member company, a resolution can be passed each year in order to dispense with the AGM. The resolution must be signed and also expressly acknowledges the acceptance of the financial statements.

NewsletterWinter 2017

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Valuing a prospective targetThis is an art, not a science. An experienced adviser will look not only at the asset base of the business but also its potential to generate cash. Valuing a business based purely on its net asset value does not normally bring us to a ‘fair value’ if the target business is profitable and generating cash. So a valuation based on a multiple of adjusted sustainable earnings before interest and tax tends to be far more appropriate in such circumstances. Deciding what is a sustainable level of underlying profit and what is an appropriate multiple both require judgment and expertise from your corporate financier.

FinancingFinding the right targets and valuing them correctly only gets you so far. How do you ensure there is a funder out there prepared to back you financially? There are a number of ways to finance acquisitions - conventional bank debt, private equity, venture capital, business angels, mezzanine, asset-backed lending and structured finance to name but a few. Talented advisers will be able to introduce you to the appropriate financiers (not just your local bank manager) and will work with you using bespoke financial models to get the right funding in place.

Heads of termsAgreeing a detailed outline of the deal with the vendors can be time-consuming and costly if it is not dealt with in a focused manner from the outset. We will work closely with you to ensure that all key issues are addressed and clarified before the heads of terms are agreed. Once the heads of terms have been signed, it is then time to get your lawyer on board to work alongside us on the due diligence and detailed documentation.

We would be delighted to talk to you about your requirements. Please call 01 669 9999 to arrange an initial no obligation meeting.

Aidan KearneyPartner | Advisory and Transaction Servicesaidan. kearney@bakertillyhb.ie

Growth by acquisition - Key steps to success As successful businesses in Ireland with strong balance sheets start to look forward to 2018, our new advisory partner Aidan Kearney outlines the key steps to a successful acquisition and how our Corporate Finance Advisory and Transactions experts can add real value to the process.

Identifying and approaching target companiesIf you choose the wrong targets initially or approach the right ones in an ‘inappropriate manner’, your whole strategy can hit the rocks on day one. Use an experienced adviser to work with you to identify the right targets and to make the first approach to the owners. Put yourself in the sellers’ shoes - they want comfort that the approach is genuine. Getting your adviser involved from the outset adds immediate credibility to your strategy.

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A New Era for AuditThe audit of the future will bear little resemblance to the traditional audit that company owners and directors are accustomed to receiving today. In fact, the way organisations conduct audits will change more in the next 5-10 years than in the last 50 years given the evolution of technology and analytics.

As the world innovates, the audit of the future must also evolve. Data analytics, new technology and access to detailed industry information will all combine to help auditors better understand the business, identify risks and issues and deliver

Tom O’ReillySenior Manager | Audit & Advisorytom.oreilly@bakertillyhb.ie

additional insights. The ability to review and analyse entire sets of data, rather than applying sampling techniques, will help bring more confidence to the audit. Auditors who can successfully deploy techniques that incorporate data analytics into an audit will quickly be accepted as a leading practice. In the future, companies will be able to rely on a more comprehensive approach to identifying issues, which will allow them to provide better insight to directors and board members.

FutureThe future of audit will involve looking at broader amounts of data and then applying ‘audit relevant’ analytics that can be used to improve audit quality.Once auditors embed analytics in their audit, they will be able to examine much larger sets of financial data to better identify issues and analyse trends. As a result, they will be able to provide deeper perspectives on trends. This enhanced perspective should support better decision-making. Given these evolving capabilities, companies should expect that their auditors will leverage new analytics and technologies that may enhance dialogue with senior management and provide deeper insights.

In the future, the primary success factor for an audit will come when firms can implement on a broader scale data capture techniques and analysis of larger data sets to provide deeper insights that offer new perspectives.

Transition The transition from the traditional audit to the audit of the future won’t happen overnight. Auditors and the organisations they audit will need time to move beyond the traditional approaches to develop a more comprehensive audit that considers such areas as fraud and financial risk and compliance. Analysing entire data populations will help auditors and their clients deliver more timely and accurate audit conclusions and identify areas of fraud and business risk more quickly.

In a marketplace and regulatory environment that places greater demands on quality and transparency, auditors who successfully incorporate analytics in the audit of the future will be in a much stronger position to help their clients fulfill their responsibilities.

Auditors and organisations who embrace the audit of the future and its potential to transform the entire auditing process will be taking a major step toward helping their organisations adopt a more resilient business strategy.

In Other News...

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Alma O’ Brien, Tax Partner was shortlisted for Image Business Woman of the Year – Management Professional. The Image Business Woman of the Year Awards recognise excellence among business women in Ireland,

and we were delighted to be in the company of such trailblazing business women.