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women who

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+ MARINOS CLEANTHOUS, ANDREAS PAPADOPOULOS, ANDREAS athinodorou B2B MATCHMAKING A new department at the CCCI starts work

INTERVIEWS Dr. Mike Balm Michael Izza Dennis Malamatinas

EU ELECTIONS The European Parliament’s role in our lives

Plus:

MONEY / BUSINESS ECONOMY TAX & LEGAL LIFESTYLE / OPINION

CMY

ALEXANDER THE GREAT BEACH HOTEL - PAFOS

ELIAS BEACH HOTEL - LIMASSOL

OLYMPIC LAGOON RESORT - AGIA NAPA

OLYMPIC BAY - AGIA NAPA

Issue 37 April 14- May 13, 2014

8 EDITORIAL 10 UP FRONT 16 FIVE MINUTES WITH…

THE OLD CONCEPT THAT “A WOMAN’S PLACE IS IN THE HOME” IS STILL BROADLY HELD, AND NOT ONLY IN CYPRUS WHERE, FOR EXAMPLE, WOMEN REPRESENT JUST 7.7% OF THE BOARD MEMBERS OF THE LARGEST PUBLICLY LISTED COMPANIES. THIS PROPORTION IS ONE OF THE LOWEST IN THE EU AND SIGNIFICANTLY BELOW THE EU AVERAGE (15.8%). BUT THINGS ARE CHANGING. WE PRESENT THE PERSONAL VIEWS OF 21 SUCCESSFUL BUSINESSWOMEN IN CYPRUS WHO EXPLAIN HOW THEY REACHED THEIR PRESENT POSITION AND WHAT ADVICE THEY GIVE TO YOUNG WOMEN STARTING THEIR CAREERS.

+ OPINION WAS THE CYPRUS BAIL-IN FAIR? By Stavros Zenios

SHE’ S THE

CYPRUS’ TWELVE STEP RECOVERY PROGRAMME By Petros Florides 45

BOSS WOMEN WHO RUN THE BUSINESS

SPECIAL

FEATURES 34 | HIGH PERFORMANCE CULTURE

50 | ALL ABOUT PEOPLE

What differentiates an exceptional company from a middle-of-the-road one, according to Saxo Bank Chairman Dennis Malamatinas.

Dr. Mike Balm, Managing Director of Emergo Wealth on the key to successful management and more.

38 | THE ABC OF BUSINESS

54 | YOU’VE GOT TO FIGHT FOR YOUR RIGHTS

How Junior Achievement Cyprus has taken entrepreneurial education into schools.

Marinos Cleanthous, IP Attorney and Director of IP Cyprus, on the importance of protecting intellectual property rights.

42 | TAXING JOB FOR TAXING TIMES Interview with Michael Izza, Chief Executive of ICAEW.

70| B2B MATCHMAKING A new CCCI Department Boosts Business Networking.

46 | THE NAME SAYS IT ALL Interview with Andreas Athinodorou, CEO of the Aspen Trust Group.

72 | NO MAN IS AN ISLAND Esimit Europa: committed to connecting countries

SUPPLEMENT 57 | INTERNATIONAL BANKS IN CYPRUS

78 80 82 84 86

{money} {business} {economy} {tax&legal} {lifestyle}

6 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

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EDITORIAL

Running the Show

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John Vickers, Chief Editor john@imhbusiness.com ISSUE 35 FEBRUARY 14 - MARCH 13, 2014 PRICE €4.95

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BANKING

How Spain restructured its system

BITCOIN

The Future of the Digital Currency

INTERVIEWS

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Peter Greenberg Matthew Kidd Alexis Tsielepis

The Future oF The AudiT Profession in Cyprus

8 Gold the international investment, finance & professional services magazine of cyprus

the international investment, finance & professional services magazine of cyprus

womEN wHo

f women ruled the world, would it be a happier place? There is a growing number of people who believe that it would be and, indeed, some argue that things have already changed since women began playing a greater role in politics and business around the world. In Cyprus, despite the less than impressive statistics regarding the percentage of women in company boardrooms and in senior political roles, things appear to be changing. Chrystalla Georghadji, recently appointed as Governor of the Central Bank of Cyprus, is just one example of a woman who has excelled in her career (she had been Auditor-General of the Republic since 1998). There are others like her in both the public and private sectors and, in this month’s cover story (page 20) we present the views of some of those who have risen to the top in private companies about why they have succeeded and why they believe that we need more women in the top jobs. There can be little doubt that the House of Representatives would be a much more sensible place if half of our 56 MPs were women, given the way that the male- dominated body has been behaving lately, particularly in relation to the country’s obligations towards the Troika. It goes without saying that we would never have found ourselves in this mess in the first place had women been running things and, faced with the most serious situation that Cyprus has faced since 1974, they would surely have buckled down to work rather than resorting to the populist soundbite tricks at which many of the present Members have become specialists over the past 12 months. The need to pass legislation that is unpopular with a relatively small number of voters (privatisation) or with a much larger section of the population (protection of one’s primary residence against foreclosure) is clearly too much for some of them who appear not to understand their role or the issues they have been entrusted to deal with. Fortunately there are plenty of people around with genuine vision and proven ability and we spoke to several of them this month, including the Chairman of Saxo Bank, Dennis Malamatinas (page 34), Andreas Athinodorou, Co-founder of the Aspen Trust Group (page 46), Michael Izza, CEO of the Institute of Chartered Accountants of England and Wales (page 42), Dr. Mike Balm, Managing Director of Emergo Wealth (page 50), Andreas Papadopoulos, Manager Group Strategy, Hellenic Bank (page 38), Marinos Cleanthous, IP Attorney and Director of IP Cyprus (page 54) and Igor Simčič, founder of the Esimit Europa project (page 72). You are reading yet another packed issue of Gold which has always been a platform for expert views and opinions on issues related to the economy, investment, business and finance in Cyprus and elsewhere. If you check the cover of this month’s magazine you’ll see that we have reached issue 37, meaning that Gold is now three years old. A lot has happened since April 2011, including events close to home that we could never have imagined at the time when writing about the Cyprus economy and its thriving professional services sector. Fortunately, in spite of everything that happened during Cyprus’ annus horribilis, things have not worsened to the degree that many were predicting this time 12 months ago and, hopefully, those in charge of our finances and policies will have the courage to stand up and be counted when it comes to doing the right thing for the country and its future. In addition to celebrating the magazine’s third birthday, we are also delighted that our online portal Gold News and the daily Gold News Newsletter are already in their fourth month and gaining new readers every week. Please check then out for yourself if you haven’t yet done so. Thank you once again for your continuing valuable support and encouragement.

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up front

Emirates Global Ambassador Cristiano Ronaldo signing an Emirates plane

Cristiano

mirates Airline recently announced that Cristiano Ronaldo, Portuguese captain and winner of the FIFA Ballon d’Or 2013, is its newest Global Ambassador. At a press conference in Madrid, the airline also premiered its campaign video featuring the football superstar alongside Brazilian legend and fellow Global Ambassador for Emirates, Pelé. The announcement came a little over two months before the world’s most-watched sporting event kicks off in Pelé’s home country of Brazil. Twice named

Ronaldo and Pelé

join forces with Emirates

FIFA Player of the Year, Ronaldo, who plays for Emiratessponsored Real Madrid, will lead his national team to South America to compete in his third tournament, his second as Captain. In January, the airline announced three times World Cup winner Pelé as its first Global Ambassador since the 2006 competition in Germany, when Franz Beckenbauer was brought on board. Continuing with the tradition of only working with the very best on the field, Cristiano Ronaldo was the ideal choice to stand alongside Pelé. Boutros Boutros, Emirates

Divisional Senior Vice President of Corporate Communications and Brand said: “Cristiano Ronaldo is an icon for this generation of football fans and is widely regarded as one of the greatest footballers on the pitch today. He has broken records and earned awards throughout his career. He is massively talented but he doesn’t rest on his laurels. Instead, he works hard to continue pushing himself to new heights. This ethos, plus his ability to inspire fans across the world is why we are delighted to be working with him.”

Emergo Wealth’s

Strategic Move

mergo Wealth has announced that it has agreed to acquire the business of the boutique financial advisory firm The Parthenon Partners. Under the terms of the agreement, Dr George Mountis, founder and Managing Director of The Parthenon Partners, will join the executive team of Emergo Wealth as Director of Business Development. Emergo Wealth Ltd. is a financial services Company that has applied for a Cyprus Investment Firm licence from the Cyprus Exchange & Securities Commission. The Company is associated with the international investment Group of Emergo, which has been operating in Cyprus with tremendous success since 1990.

Dr Mike Balm, the Managing Director of Emergo Wealth said “We are excited to have George Mountis join the Emergo Wealth team. His expertise in the banking and financial services sector will enhance our ability to grow, while continuing to focus on uncompromising quality of service for our clients. Dr Mountis specialises in investment banking, corporate finance and debt restructuring advisory. Prior to joining Emergo Wealth, he started and run successfully a couple of companies in the financial consulting sector in Cyprus. George also worked in London as

10 Gold the international investment, finance & professional services magazine of cyprus

The Investment Strategy Director of Emergo Wealth, Dr Constantinos Neophytou and Dr George Mountis, after the signing of the agreement.

an investment analyst for CB Richard Ellis and for HSBC in the M&A UK team. Dr Mountis said “We have considered and evaluated carefully this strategic move and we are certain that, given the excellent synergies created, there will be great benefit and added value for all our clients.” Dr Mountis is a visiting fellow at several universities is published extensively in finance and business journals and is a regular contributor of articles in the local press.

Top Two Floors of

The Oval Sold

Following the successful launch of The Oval on March 18, property developer Cybarco has revealed that the top two floors of executive offices have already been sold. With unobstructed views of the sea in Limassol, the uniquely designed Oval is described as being a world-class commercial building, with state-of-the-art facilities and services, spanning a reception, 24-hour security, controlled access, property management, and more. The Oval is the creation of Cybarco, one of Cyprus’ leading luxury property developers, and a part of the Lanitis Group. An additional major project in the pipeline courtesy of Cybarco is the Limassol Marina, the country’s first residential Marina project.

Limassol to Host Largest Solar Park in Europe

ollowing months of discussion and development, an initial agreement has been signed between stakeholders in Cyprus, China and Australia for the development of the largest solar park in Europe, due to take shape in the village of Alassa near Limassol. With the overall cost of construction reaching €185 million, the EU will funnel €50 million into the project, which falls under the auspices of the NER300, one of the

world’s largest funding programmes for innovative lowcarbon energy demonstration projects. Throughout the negotiation process, Deloitte has served as the coordinator, facilitating the finalisation of what may be deemed a highly significant deal for the Cypriot economy. The Cyprus Investment Promotion Agency (CIPA) has also garnered great praise for having assisted in establishing and maintaining relations with the Chinese firm.

International Awards

for Zambartas

Wineries

It is estimated that the solar park will generate some 50 Megawatts of electricity. All parties involved are already pursuing a second related project in the same area, with InBusiness reporting that CIPA recently hosted a lunch in Nicosia, at which the General Secretary of Energy of China was present. Moreover, President Nicos Anastasiades and Agriculture Minister Nicos Kouyialis have also had contacts with the relevant businessmen undertaking the project.

ambartas Wineries have won three top medals in the 2014 Thessaloniki International Wine Competition. Zambartas Xynisteri 2013 was awarded a gold medal, while Zambartas Maratheftiko 2012 and Zambartas Epicurean 2012 both won silver medals. Marcos Zambartas, Winemaker at Zambartas Wineries, said: “We are very pleased to see that our wines were judged as being among the very best at the competition. This is a very important event for us and it is an honour to have such recognition on a professional international level. Our aim is to continue our research in oenology and keep on offering our clients the very best of quality wines.” The Thessaloniki International Wine Competition is an annual nternational wine competition organised in Greece under the auspices of the International Organisa-

Asbis Launches

Prestigio MultiPhone

7500 Smartphone

sbis Romania, the Romanian subsidiary of Cypriot distribution company IT&C Asbis, has launched the Prestigio MultiPhone 7500 smartphone. This mobile device features a IPS 5-inch touchscreen with full HD resolution, 13 Megapixel main camera, frontal camera of 8 Megapixel, MT6589T Quad Core processor at 1.5 GHZ, and 2300 mAh battery. The device also supports NFC technology and is available in two variants, namely a model with 2 GB RAM plus 32 GB internal memory offered at RON 1,299 and another at 1 GB RAM plus 16 GB internal memory available as of April at RON 1,149. The phone is also offered in two colours, namely white or black, and its package includes a phone cover.

tion of Wine and Vine (O.I.V) and the Association of Wine Producers of Northern Greece in collaboration with the TIF HELEXPO. This year, twenty-eight distinguished connoisseurs from Greece and beyond came together with sommeliers, journalists and wine distributors. They tested more than 500 samples from Cyprus, Greece, Brazil, Germany, China and Slovakia. Zambartas Wineries was found in 2006 by Akis Zambartas. The winery enjoyed a small production when it first started out, with only 4,500 bottles produced the first year. From the early days, Akis and his son Marcos envisioned that Cyprus had the potential of producing wines of international standard and their vision was soon realised. Today, Zambartas Wineries produce 60,000 bottles per year.

CIM Celebrates Opening of New Premises

he Cyprus Institute of Marketing (CIM) celebrated the opening of its new premises in Limassol on March 28, with President Nicos Anastasiades officially inaugurating the event, ushering in a new

era for one of Cyprus’ premier business schools Public officials, business professionals, students, and members of the CIM gathered at the new building – situated behind the Tsirion Stadium – with select guests delivering addresses, including Anastasiades, Theophanis

Hadjiyiannis, Founder and Director of CIM, and Glafkos Mavros, former General Director of Hellenic Bank and current President of the CIM council. In his address, Anastasiades thanked the CIM for its contribution to Cyprus’ business development over the years.

the international investment, finance & professional services magazine of cyprus

Gold 11

up front

Cyprus-Israeli communication companies’ alliance

wo specialised communication consultancy firms – an Israeli and a Cypriot – have announced the establishment of a strategic cooperation, aimed at upgrading their services and at expanding their activities in the region and in Europe. At the initial stage of the cooperation, the Cypriot firm Gnora Communication Consultants and Israel’s Shaviv Strategy and Campaigns (SS&C) are offering public affairs services, corporate and political communication, Media management and public opinion surveys in Greece, Israel and Cyprus. “The new situation in our region requires extroversion and the creation of business alliances that will enable our companies to grow and improve so as to meet the increasing demands of large foreign companies,” said Andreas Hadjikyriacos, the Managing Director of Gnora, which was voted the best small and

medium-sized company at the 2013 IN Business Awards. “Our region is at the heart of international business interest due to energy developments and political changes taking place. With this cooperation, we are creating the conditions to serve this interest,” said Aron Shaviv, Chief Executive Officer of SS&C, which in 2012 won the Reed award from Campaigns and Elections magazine for the best international campaign (for voting abroad in the US elections). Gnora offers comprehensive services in Corporate and Political Communication, Public Affairs and Publishing in Cyprus and Greece. As a specialised consultancy, it utilises the expert knowledge, extensive experience and networking of its executives to design, manage and protect the reputation of organisations in the private and public sector. SS&C is a global political-strategy consultancy firm, specialising in winning election campaigns for parties and candidates. The SS&C has run a number of campaigns for the European elections and continues to provide consultancy services to senior EU officials on an ongoing basis.

XM Sponsors Moscow Forex Expo

XM.com,

financial service provider of online trading on Forex and CFDs operated by Cyprus-based Trading Point Holdings Ltd., will be the official platinum sponsor of the 16th International Forex Expo in Moscow. The event, which takes place on 25-26 April, will

see international brokers and bankers participate in seminars, workshops and talks by figures from the industry’s leading Forex firms. Held at the Radisson Slavyanskaya Hotel, the expo will also include an awards ceremony, for which XM has been nominated for a total of 6 awards:

• Broker of the year • Best standard forex broker • Best 24/7 customer service • Best forex broker in Russia and CIS • Best forex broker in Europe, and • Best forex broker in Asia Region. Trading Point is an internationally regulated financial institution, founded by market experts with extensive knowledge of the global forex and capital markets. It operates both the XM.com brand, as well as XM Partners, the affiliate programme for introducing brokers. Its head office is based in Limassol.

12 Gold the international investment, finance & professional services magazine of cyprus

CSC Celebrates 25th Anniversary

he Cyprus Shipping Chamber held its 25th Annual General Meeting at the Four Seasons Hotel in Limassol on Friday, 28 March 2014. The AGM was attended by the President and other Government officials, MPs, diplomats, representatives of Professional Organisations and Members of the Cyprus Shipping Chamber. The Cyprus Shipping Chamber was established on 26 January 1989, and constitutes the trade association of the Shipping Industry in Cyprus. The main purpose of the Chamber is to promote the interests of Cyprus Shipping and to continuously further the reputation of the Cyprus flag. At the same time, the Chamber acts as a lobbying group for the promotion and safeguarding of the legitimate interests of its Member-companies, at a national as well as at international level. Today, the Cyprus Shipping Chamber ranks as one of the largest national shipping associations in the world and undoubtedly,

Capt. Eugen Adami

“Navigates Cyprus Worldwide”. On the occasion of the 25th Anniversary of the establishment of the Cyprus Shipping Chamber, President Nicos Anastasiades, the Minister of Communications and Works, Marios Demetriades, Nicos Nicolaides MP on behalf of the Speaker of the House of Representatives, and the President of the Cyprus Shipping Chamber, Capt. Eugen Adami, all addressed the Meeting. During the Meeting, reference was made to the multifaceted work of the Chamber, the importance of the Cyprus Shipping Industry to the Cyprus economy and to Cypriot society, and to current matters of concern to the Cyprus Shipping Industry.

GO Purchases 25% of Cablenet altese company GO has entered into a share purchase agreement with Cyprus-based Cablenet Communications Systems. GO will purchase 25% of the issued share capital of Cablenet in exchange for a convertible loan of €12 million to be granted to Cablenet. The loan will bear no interest until December 31, 2017, with GO retaining the option to convert the loan into equity, meaning that upon such conversion the total number of shares held will equal 45%. The agreement struck with the beneficial owner of Cablenet, Nicolas Shiacolas, also allows for the option for GO to acquire the majority control of Cablenet in the future, subject to regulatory approval in Cyprus.

CORRECTION In the print edition of the 14 March issue of Gold, the name of Erik Malinen, Director of Marinetek in Cyprus, was spelt wrongly in several instances. We apologise to Mr Malinen for the error.

©2014 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Cyprus.

Quality service is our target In today’s ever-changing business environment, there is a need for professional business advisors, who not only have the ability to see the broader picture, but also the commitment to serve each client as an individual. KPMG operates in 155 countries with more than 155.000 people working in member firms around the world, offering Audit, Tax and Advisory services. Visit our website at:

www.kpmg.com.cy or our web tv at:

www.kpmgcy.tv

up front

The World’s Richest

f 1,645 people on the 2014 Forbes d’s bilworl the of list

Women lionaires, only 172 are women. While this is up from 138 last year, women are still a tiny minority on the list,

Top 10

1 Christy Walton (USA)

Net worth: $36.7 billion Christy Walton reclaims her spot as the richest woman in the world. She inherited her wealth when her husband John Walton died in 2005. Her First Solar shares, which have gone up 47% in the past year, have helped boost her net worth above the rest of her family.

2 Liliane

Bettencourt (France)

Net worth: $34.5 billion L'Oreal's grand dame Liliane Bettencourt lost her top spot to Walton but the world's secondrichest woman, grew even wealthier this year thanks to the French cosmetics giant's stock price, up 9% since 2013. She’s is no longer involved in running the company.

3 Alice Walton (USA)

Net worth: $34.3 billion The daughter of Wal-Mart founder Sam Walton is report-

representing a little over 10% of the total. Of the 34 newcomers, only five of them built their own fortunes as

edly raising funds for a potential Hillary Clinton run in 2016. The biggest philanthropist of the Walton family, she gave more than $2 million in 2012 to support charter school initiatives.

opposed to inheriting them from their parents or husbands. Six of the top ten are Americans.

Enterprises, which she inherited from her father James M. Cox, continues to sit on the board of Net worth: $17.4 billion directors at age 94. Chambers Germany’s richest woman owns was ambassador to Belgium nearly 50% of automaker BMW under President Jimmy Carter along with her brother Stefan and holds the French Legion of Quandt and her mother Johanna Honour title. Quandt (also billionaires). A trained economist, Klatten also Net worth: $20 billion controls chemical manufacturer She is the third generation Altana. heir to Mars, the largest candy Net worth: $14 billion company in the world with $33 Powell Jobs is the largest inbillion in sales. She inherited the dividual shareholder in Disney. company with her two brothers As head of the trust that carries Net worth: $17.3 billion when their father Forrest died. her name, she oversees more Abigail Johnson is the president than 130 million shares in the The company produces over 400 million of its famous M&M’s of Fidelity Financial Services entertainment company, a stake and a front-runner for the CEO in the US daily. left to her by late husband Steve of Fidelity Investments when Jobs. her father, Edward «Ned» Johnson, steps down. Fidelity is the second-largest mutual fund Net worth: $17.7 billion company in the U.S. with $1.67 Australia’s wealthiest person is trillion in assets under manage- Net worth: $12.8 billion also, reportedly, its biggest priJohanna was first secretary and ment. vate taxpayer. Her fortune stems then third wife of the late Herfrom iron ore and coal projects bert Quandt, who rescued auin western and northern Austomaker BMW from bankruptcy. tralia discovered by her father. She owns nearly 50% of the Net worth: $15.5 billion A bitter family trust battle with company along with son Stefan The majority owner of privately- and daughter Susanne, also bil3 of her 4 children is currently held media conglomerate Cox in court. lionaires (see No.6).

6 Susanne Klatten (Germany)

4 Jacqueline

Badger Mars (USA)

9 Laurene

Powell Jobs (USA)

7 Abigail Johnson (USA)

5 Gina Rinehart

q Johanna

(Australia)

14 Gold the international investment, finance & professional services magazine of cyprus

Quandt (Germany)

8 Anne Cox

Chambers (USA)

E L PR I M E RO C H RONOMA S TE R 19 6 9

W W W . Z E N I T H - W A T C H E S . C O M

Acknowledged as the world’s best chronograph, it is a descendant of the legendary El Primero ﬁ rst unveiled in 1969 and proudly bears the iconic colours of the ﬁ rst high-frequency automatic column-wheel chronograph calibre. Beating at a rate of 36,000 vibrations per hour, this daring feat embodies the exceptional expertise of the Manufacture.

Zenith_HQ • Visual: Ch1969Steel • Magazine: INBUSINESS (CY) • Language: English • Issue: 4.5.2013

INTERVIEW

five minutes with...

Loukia L. Hadjigavriel Director, A. G. Leventis Gallery

hy did the A. G. Leventis Foundation choose to invest €20 million in a new private gallery rather than donating the artworks to a public institution? Anastasios G. Leventis’ vision was to establish a fine arts museum in his homeland, Cyprus, allowing his compatriots to enjoy the art he loved: the works and objects he collected throughout his lifetime. For this purpose, he established a trust, which would provide the necessary funds for the creation of the Gallery and for the covering of its running and operational costs. What are the highlights of the collection? The Gallery’s highlights span all three of its collections – of European, Greek and Cypriot art respectively – and include numerous works by celebrated artists from El Greco, Canaletto, Boucher, Renoir, Monet and Chagall to Volanakis, Rallis, Moralis, Parthenis, Diamantis and Kissonergis. The works reflect Anastasios G. Leventis’ personal aesthetic. How big is the collection and how does it compare to other private collections in Cyprus? The collection is the biggest private collection of European Art on the island. It comprises over 800 works, including paintings, drawings, watercolours and objets d’ art.

How will the collection attract an international audience? Acquisitions aside, the collection has also been studied, catalogued and documented, as well as fully and meticulously restored. The Gallery has already established an honorary committee, which includes leading scholars, curators, museum directors and academics from around the world. It has also established partnerships with celebrated institutions and museums – including the Musée de l’Orangerie, the Louvre, the National Gallery of Athens, the Musée des Impressionistes at Giverny, and the Musée Fabre at Montpellier, among others. We also hope that the Gallery’s research will contribute to existing scholarship of Old Masters and modern European painting. The gallery is also planning a series of monographs on celebrated artists of the Greek and Cypriot schools of art respectively. Is the gallery planning an exhibition programme, and if so, what do you have planned? The Gallery team is in the process of formulating its 5-year strategic plan. This includes collaborations with museums and private foundations which, we hope, will result in exhibitions that will engage both the public of Nicosia and a broader international audience. Would you ever expand the collection or sell part of it? There is no intention on the part of

the Gallery for the deaccession of our collections – on the contrary, we have a policy of long-term or permanent loans to enrich existing collections. There is also a very specific acquisition policy involving adding works that will complement each of the three collections in distinct ways. Given the current economic climate in Cyprus, why did you decide to launch the Gallery this year? Particularly at times of financial crisis, there is a profound need to reach beyond immediate philanthropy to actions that support society as a whole. We believe the opening of the gallery will offer an important cultural outlet and a source of optimism for the future. The design for the building project incorporates a gallery, restaurant and also some apartments: who will benefit from the sale of the latter? The site will incorporate the new A.G Leventis Gallery alongside a restaurant and 10 apartments. Whilst these apartments will not be available on the open market, their sale will contribute to funding the day-to-day running of the Gallery and the work of the A.G. Leventis Gallery. The A.G. Leventis Gallery is located on Leonidou Street in the centre of Nicosia, just off of Archbishop Makarios III Avenue.

16 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

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European Elections 2014

Why you should

vote

E very five years, EU citizens choose the people who represent them in the European Parliament. Each member state has the right to elect a fixed number of Members of the European Parliament (MEPs). The allocation of seats is laid down in the European treaties on the basis of the principle of degressive proportionality: countries with a larger population have more seats than smaller countries, but the latter have more seats than strict proportionality would imply. For the 2014 elections, according to the Lisbon Treaty, the number of MEPs ranges from six (for Malta, Luxembourg, Cyprus and Estonia) to 96 for Germany.

Voting practices vary across the EU, although there are some common elements, the most important of which is that some form of proportional representation should be used. This gives larger and smaller political parties the chance to send their representatives to the European Parliament in line with the number of votes they receive. However, each country is free to decide on many important aspects of the voting procedure. For example, some split their territory into regional electoral districts, while others have a single electoral district. Countries may also decide on the exact day of the elections according to their voting traditions. European elections usually span four days, with voting in the UK and the Netherlands taking place on Thursday and residents of most other countries, including Cyprus, casting their vote on Sunday. Elections are contested by national political parties but once MEPs are elected, most opt to become part of transnational political groups. Currently there are seven such groups. Most national parties are affiliated to a European-

18 Gold the international investment, finance & professional services magazine of cyprus

wide political family so one of the big questions on election night is which of these European groupings will exert greater influence on the decisions taken in the next legislative term. The European Council must take the election results into account when choosing a nominee for the post of President of the European Commission, the executive arm of the EU. With the entry into force of the Lisbon Treaty, the European Parliament has become a powerful co-legislator and plays a determining role in shaping European policies. A vote in the European elections is every citizen’s chance to influence the

Another of the key

messages of the forthcoming elections is that, through the

European Parliament, you have more

power than you think

shape of the Parliament and the decisions it takes over its five year mandate. The European Parliament is the only directly-elected EU body and one of the largest democratic assemblies in the world. Its 766 (soon to be 751) Members are there to represent the EU’s 500 million citizens. Most of Parliament’s indepth work is done in specialised committees that prepare reports that will later be voted on in the plenary. As a representative of all European citizens, the assembly’s multilingualism has become one of its most important aspects. Parliamentary documents are published in all the official languages of the EU (24 in total) and every MEP has the right to speak in the official language of his/her choice. This year’s elections are the eighth since 1979, and, in the eyes of many, they are the most significant so far. European advocates are extremely keen to impress upon potential voters that ‘this time is different’ – that the EP elections are worth taking seriously. First and foremost at an institutional level, the major change for this

year’s Parliament is the power to ‘elect’ the President of the European Commission – the main executive body of the EU. The parties that make up the current EP are nominating candidates for the most powerful executive office in the EU, who will then be approved by a majority (376) of the MEPs. Thus for the first time, EP elections will not only decide who will sit in the Parliament, but also indirectly who will lead the Commission. Aside from this ‘official’ change, there are several other – highly significant – reasons why the 2014 elections are worth extra attention. As all Europeans are well aware, the Union is in the midst of either a crisis or a crisis-recovery mode, dependent on the country in question, therefore this round of EP elections will be a real test for how the mainstream ruling parties have been judged throughout the past few turbulent years. With austerity in the South and bailout payments in the North, Europe is arguably more divided today than it has been in decades, however in some cases all sides appear to have reacted in a similar fashion; looking to the extremes. One trend observed over previous EP elections is that, although Europe is becoming more and more significant to the lives of its citizens, they attach less significance to them than to national elections due to their perceived ‘less important’ nature. One result of this may be that those who are motivated to vote often do so to out of a fervent desire to express strong views, not usually shared by the ‘average’ voter. This, combined with national protest votes and the proportional voting system, often leads to results which look very different in each country from the better-attended national

NEXT STOP european parliament

elections – with extreme parties of both the Left and Right fairing better than in national elections. While some of these ‘extreme’ parties are arguing for comparatively modest policies of European reform or withdrawal from the EU, others hold ideologies and policies that many find far more troublesome. If people wish to vote for these parties that is, of course, their decision. However what is of concern is that those supporting more moderate views lack the same motivation and drive to express them, which is why this time around it is imperative that everyone should exercise their democratic right to vote to achieve a balanced a representative result. The European Parliament itself has been extremely active in an EU-wide campaign for

With

austerity in the South and bailout payments in the North,

Europe divided today than it

is arguably more has been in

decades May’s elections. It points out, for example, that “Since the last European elections, the rules of the game have changed. The European Parliament now has more power, both to set the political direction of Europe and over the day-to-day decisions

EUROPEAN PARLIAMENT

which affect us all. A more powerful European Parliament means more influence for everyone, more ability to deal with our problems, more ability to change what needs changing, more assertiveness to conserve what we want to keep. “Europe faces great challenges. Meeting them won’t be easy, and choices have to be made. The changes made to the system were designed to ensure that we, the citizens of Europe, have more say over those choices. Not just when we go to the ballot box, but as decisions are taken, day in, day out. “The European Parliament now decides on the European laws that affect you, across the board. On how your money is spent from the EU budget, across the board. We must agree to the financing of the EU for years to come, looking at the collective interest of Europeans. And after the next elections it is your parliament who will elect the head of Europe’s executive, based on your wishes, as expressed in these elections. “This time it really is different. Together we now have more real power to actually make a difference.” Another of the key messages of the forthcoming elections is that, through the European Parliament, you have more power than you think. “You make a direct impact on everyone’s future and, more importantly, on your own and on the future of the next generations too,” says the publicity. “Each of your actions and reactions ultimately leads to results. The decisions we make together have an impact on the day-today life of over half a billion European citizens.” The Parliament wants to ensure that voters feel that their representatives are aware of the financial realities that they are

facing: “In times of economic hardship, wise investment and real accountability for how money is spent are crucial. Driven by this belief, the European Parliament has insisted on increased scrutiny of the EU’s 2014-2020 budget. “Although this budget may only represent 1% of the entire EU’s Gross Domestic Product, the European Parliament is determined to ensure that each and every euro contributed by European taxpayers is money well spent, adding real value for the benefit of all. “These are turbulent times in the history of Europe. For many people in Europe, these are hard times. As times have changed, so have we. The European Parliament now has more power in shaping Europe than ever before. And that gives you more power to make things happen. You can influence the decisions that touch your own life as well as the lives of over 500 million people. You can start something or end something. Ask for more or ask for less. You can act and take all matters big and small into your own hands. Choose which Europe you want. In the end, you decide what happens. Or doesn’t happen. “The European Parliament represents each and every one of you and acts on your behalf. Our decisions are based on what matters to you. No, not everything can happen overnight, but one thing is for sure: together we can get it done. “The European Parliament is here to react to your demands and to fight for the things you really care about. Our job is to listen to the multitude of voices in Europe and provide real answers. We will face every challenge and offer solutions that make sense.” Convinced? Then you need to vote on 25 May.

The project is co-funded by the European Parliament. The European Parliament is not responsible for the content of this article.

the international investment, finance & professional services magazine of cyprus

Gold 19

COVER STORY

T By John Vickers

SHE’ S

THE BOSS

The mere idea of women in business has always clashed with popular notions about women’s role in society. The old concept that “a woman’s place is in the home” is still broadly held, and not only in Cyprus. After all, women have babies and they are largely responsible for bringing up children and running the family home. The idea of doing this and, at the same time, having a successful career is something that many men have difficulty accepting. And for every Oprah Winfrey, Margaret Thatcher and Christine Lagarde, there are millions of women who deserve to become leaders but never do. The statistics are, perhaps surprisingly, not the same everywhere, particularly within Europe. While almost one in two (46%) of Latvian managers are women, in Italy that percentage is just over one in four (26%). Italy lags behind most EU countries in terms of women business executives, followed only by Greece (25%), Macedonia (23%), Luxembourg (18%), and Cyprus (16%), against an EU average of 33%. France, Lithuania, Hungary and Slovenia, beat the EU average with 39% of female managers, followed by Poland (38%), Bulgaria (36%), and Sweden (34%). Even more worrying, women represent just 7.7% of the board members of the largest publicly listed companies in Cyprus. This proportion is one of the lowest in the EU and significantly below the EU average (15.8%). The proportions of women Chairpersons (5.0%) and CEOs (5.3%), on the other hand, are slightly above the respective EU averages. On the following pages we hear the personal views of 21 successful senior businesswomen from the private sector in Cyprus. They explain how they reached their present position, why there are not enough women like them and they give advice to young women starting their careers. Interestingly, most of them do not entirely blame men for the lack of equality in the workplace and, almost unanimously, they point out the qualities that complement those of their male counterparts and make for the ideal team at any level of management. It may be a man’s world but things are clearly changing.

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ANASTASIA PAPADOPOULOU

Partner, Tassos Papadopoulos & Associates LLC My first job: Slaughter and May Law firm in London, 2000-2001. My biggest challenge: The bias against me when I started out, both because of my gender and my name. Both led to perceptions about my abilities that I either had to live up to or overcome. But I think that facing this challenge drove me even more to want to prove myself. That bias still exists today, although to a much lesser extent, but I have come to think of it as extremely valuable since it always keeps me alert and driven. I got where I am today thanks to: The people I work with at the firm, especially the senior partners, who pushed me when I needed it, who never refused me any help and who always treated me with respect. My proudest professional achievement: The fact that I have contributed as a member and part of a group that continues to consolidate and grow the firm founded in 1971.

DEMETRA KAKOPIEROU

Director, Diexodos Group

The best piece of advice I’ve ever received: I was preparing for a court hearing and I went to ask one of the partners for some advice. During our discussion I told him that I didn’t understand why I always got so stressed and worried before a hearing, no matter how many times I had tried the same issues and even after so many years of doing it. He told me that I should only be concerned if I ever stop stressing and worrying before a hearing because that would mean that I had stopped caring. My advice to young women in Cyprus who are just starting their career: You need to set your goals, both professionally and personally and not be afraid to go after them. Don’t get discouraged and don’t be afraid to ask for help when you need it. I believe that, unfortunately, today women still need to speak up more than men to be heard, to work more in order to achieve the same and to have patience and perseverance to prove their worth.

So few business leaders in Cyprus are women because: Of a combination of bias against women and the choices women make about their lives. I have seen many change their priorities once they have a family. Although many times that choice is made due to the fact that the man in a relationship makes more money than the woman and so the choice for the woman to pull back from work makes more financial sense. I think that until we achieve real equality in salaries so that women are free to make their choices in the same way that men are, we will always have fewer female business leaders than men. It is important to have women in leadership positions because: I believe that women often offer a different perspective of situations than men do. In any team I believe one needs as many different perspectives as possible in order to take an informed decision.

My first job: At the same company. My biggest challenge: To always maintain my basic principles, i.e. dignity, faith, honesty and a great deal of hard work. I got where I am today thanks to: All those who have helped me in my professional and personal life, some because they believed in me and others because they didn’t. Most of all, thanks to God! My proudest professional achievement: Rather than talking about something from the past, I would prefer to mention something on which I am working together with a large group of people: Repower Cyprus. This is a major effort by Cypriots abroad and all those of us who still believe in Cyprus. I will do everything I can because I owe it to my grandparents and to my own children. The best piece of advice I’ve ever received: “Never lose your faith.” My advice to young women in Cyprus who are just starting their career: Fight for what you believe in but always in a moral way; be

yourself and be prepared to face difficulties. My most important piece of advice would be this: Don’t forget that work and a career is all very well but motherhood is the greatest achievement. So few business leaders in Cyprus are women because: I don’t believe that they are few. Those who dare are few. It is important to have women in leadership positions because: It is important to have the right people in the right positions but we should not distinguish between men and women.

Fight

for what you

believe in

but always in a

moral way

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ion plan, ma act ke s n a ure you ma nag e your time

Set goa ls, ha ve

COVER STORY

My first job: As a journalist at Phileleftheros newspaper in 1987. My biggest challenge: The biggest challenge in my career to date was the key role I played in helping my company grow to become the leading media and publishing organisation in Cyprus. It was back in the mid-1990s when we set in motion an expansion and modernisation drive, aiming at transforming Phileleftheros from a 12-page newspaper into a comprehensive media group. It is now home to a range of publications (newspapers, magazines, books, special editions), websites and radio stations. It also has a stake in a press distribution agency and a paper import company and owns and runs its own Proteas printing press. Although it was certainly no easy task, thanks to long hours, hard work and tireless efforts, we succeeded in raising the group’s profile to fresh heights and expanding its activities, while maintaining high standards of customer satisfaction.

Belie ve in what you are doin g, al wa

sue your goal s pur s y

MYRTO MARKIDES

CEO, Phileleftheros Media Group

I got where I am today thanks to: My cousin Nicos Pattichis, who believed in me and trusted me with the commercial and financial aspects of the company whereas others looked at me with mistrust because I was a woman. I had to struggle to the top (beginning as a features journalist, then as a Financial Editor, Assistant Editor-in-Chief, General Manager and CEO). I went through all the steps of production, gaining valuable experience and expertise and proved to everyone that any woman with the right education, commitment and passion for work can inspire and drive organisations to success. My proudest professional achievement: The setting up of Proteas, our printing press. It was a field of which I had absolutely no prior knowledge or expertise, but my colleagues and I managed to establish and then expand what is now one of Cyprus’ major printing houses. The best piece of advice I’ve ever received: “Everything worth having is worth working for.” My mother always used to tell me this and she has been proven so right. My advice to young women in Cyprus who are just starting their career: Stay focused, have vision and passion. Learn as much as you can from every perspective. The more well-rounded you are, the more effective you will be and the more persuasive among your colleagues and business associates. Always remember that hard work is the road to success but never compromise your social life and never forget that you are a woman, a wife and a mother. Believe in what

you are doing, always pursue your goals and, above all, love your job. Motivate and inspire others to share your passion and work as a team, not for the recognition it may bring but for the results you produce. So few business leaders in Cyprus are women because: Women are still held back by the image of the housewife. At the same time, they have to keep the family together, organise the household and they need the ability to multitask. They have to make tremendous sacrifices and struggle for the right to be leaders in a man’s world. They are treated with mistrust and still haunted by the stereotypes they grew up with. Even though they are as intelligent as men, they behave differently and are motivated by different things. These attributes are not yet accepted by most men, who still want women to be at home raising their kids and far away from leadership positions. Many of them will never accept a female boss; it feels degrading and creates a lot of tension. It is important to have women in leadership positions because: Women are more persuasive, have a stronger need to get things done and are more willing to take risks than male leaders. They are more flexible, they are more likely to ignore rules and be bold. They have the ability to influence and are more ahead in terms of self-awareness. Women are able to bring others around to their point of view; they have multi-tasking skills and can perform better in difficult situations. They are hard workers, very ethical, organised and incredibly time-efficient.

OLGA RYBALKINA

CEO, ForexTime Ltd. My first job: Alpari, 1998. My biggest challenge: A start-up is always a challenge but the biggest challenge of all, when creating a new company, is building an efficient, knowledgeable and experienced team. If you have the right team, you can achieve the goals you set far more effectively. Setting up the infrastructure, designing different processes, renting an office and buying property are the simplest parts of it. But finding the right people – that can be tricky! People can be perfect for certain positions but when you put those people together and they try to blend, the result can be turbulent. So I would say that my biggest challenge so far has been putting together an efficient, motivated and driven team whose members function in harmony with one another. I got where I am today thanks to: Every single person I’ve met along the way who has helped me, whether they were my supervisors to whom I had to report and whose feedback I would receive, or the subordinates who gave me different points of view and helped me understand how to progress. Throughout my career, I have learned to see things through the eyes of different people. Although I’m quite a straightforward and persistent person, I can’t say I was like this 10 years ago. I was once very stubborn and, in the past, there were times when I would disregard the opinions of others. With time I was taught many lessons and I realized that sometimes you need to see things from a different perspective. I also enjoy learning from the experiences of other people; I like to hear how they resolved situations they were in and sometimes I put myself in their position and ask myself how I would have dealt with the situation. I like the ‘what if’ approach so I always try to imagine different scenarios and ask myself how I would respond to them. This is how I’ve gained wisdom and applied it to my own path My proudest professional achievement: Is yet to come! There will always be room for progress and the list of things I want to achieve is endless. I set personal goals in my career for myself and for the company, but once they are achieved I don’t look at them as

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well and, m ost im port ant ly, lf. bel ieve in yourse something grand. I can enjoy and celebrate for a short period of time and soon it’s time for the next one. You can never catch your greatest dream; it’s always ahead of you. Only in this way can we be motivated to move forward and strive for even better things. Each achievement is something to build on and I personally always need something more – to keep me going, to keep me developing, to keep me motivated and to keep me engaged. It’s a never-ending story for me. The best piece of advice I’ve ever received: If you cannot change a situation, you must either accept it or change the way you see it. This piece of advice has been repeated to me by many people throughout my career. When you’re trying so hard to change something, try as you might, if there is a wall there you cannot always tear it down. So perhaps you may need to start looking at it differently; it could be that the wall is not an obstacle but in fact something which you can turn into what you want it to be, like a blank canvas you can paint on. If you approach something differently, you’re more likely to achieve your goal. If a different approach is impossible, you must accept this, focus your energy on something else and move forward. Another piece of valuable advice I live my life by is that that we must live in the present and not the past. Stop thinking of what could have been and start maximizing your experience on this earth right here and right now! Enjoy this exact moment, because it won’t come again. My advice to young women in Cyprus who are just starting their career: I would give the same advice to any aspiring young individual, male or female. Set goals, have an action plan, make sure you manage your time well and, most importantly, believe in yourself. Almost everything is possible if you keep trying; you must not fear challenges or give up at the first obstacle you meet; all paths in life are filled with difficulties and it’s those difficulties that will give you invaluable lessons and help you grow and turn into a more dynamic businessman or woman. It is important to have women in leadership positions because: We need balance in leadership, as we need a universal balance in everything. There cannot be too much of one thing. You must have people of different temperaments and approaches in leadership positions and I can say that women have the advantage of being more flexible and able to adapt to situations effectively, so they bring something positive and different to the table. Moreover, it is important for the younger generations to see women in leadership positions so that they can look up to both men and women, have solid role models and feel confident that, in this day and age, they can be whatever they want to be if they set their mind to it.

Men & women have an entirely different

thinking process

BARBARA PETROPOULOU LILLIKAS

CEO, Marketway My first job: Raychem, 1985 My biggest challenge: If I had been asked this question before March 15, 2013, I would have said that it was the launch of Marketway some decades ago, when we introduced the new concepts of Strategic Business planning, Strategic Marketing and applied Marketing to local businesses. Little did I know back then that this challenge would appear as a delightful exercise compared to what we are now going through. Over the past year, most businesses in Cyprus have had to survive under conditions of severe liquidity constraints, increased operating expenses and, in most cases, a market slump with a doubtful midterm recovery. All these recent difficulties, coupled with the inability of the local banking system to respond to the needs of local businesses, make even the daily operations of a business extremely challenging, to the point of being frightening, when one brings to mind one of the basic lessons of Financial Management, which says that a loss-making business operation can survive and work towards recuperation, whereas a liquiditydeficient, profitable business may be forced to halt its operations. I got where I am today thanks to: The principles on which the American educational system is based Never leave anything to chance; Work continuously to excel; Pay attention to detail; And, most importantly, love and think about what you do constantly. My proudest professional achievement: If I try to answer this question, I will be led to believe that my career has reached its end. Can I

answer this question towards the end of my life? The best piece of advice I’ve ever received: It was given to me by a dear friend, the late Hagop Keheyian, one of the “fathers” of the Banking Sector in Cyprus: There is a lot of unfairness in business transactions. This definitely does not excuse withdrawal. You never give up! Or else consider yourself a failure. My advice to young women in Cyprus who are just starting their career: Don’t precondition yourself that youwill be descriminated against. If you think along these lines, it will be reflected in your behaviour and, subconsiously, affect the environment around you. Instead, you have to work as hard as you can so that, through excellence, you will prevent any discriminatory thoughts or actions. So few business leaders in Cyprus are women because: I often wonder whether the blame should fall entirely on the system or the Establishment and not, at least partially, on the perception that women themselves carry deeply embedded in their subconscious as well. Nothing changes without us believing in it and nothing is accomplished without “fighting” – or rather working – to bring about this change. And, as far as I understand it, the quest should be the mission of those who want to bring about the change and not of a vaguely defined “force” that will make things just and fair. It is important to have women in leadership positions because: Why do we have to be one-sided in the way we understand and do things? I think that science and centuries of consolidated experience have shown that men and women have an entirely different thinking process. So, why should we rely entirely on one of those two approaches and discard the other option? And especially since it has been proven that women can be just as successful as men – I would have said ‘more successful’ but I’ll try to be poltiically correct! We have tried the one-sided approach for so many centuries. It’s only fair to see how things will evolve if we open up and try a different way. Men have to understand this, or else they may be accused of being afraid of the competition!

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COVER STORY

CHRYSO CHARALAMBOUS CHRISTODOULOU

Co-founder and CEO, Digipro Computer Consultants Ltd. & Founder of FUNecole Research Institute My biggest challenge: Leading the development and the exploitation of the awardwinning, six-year FUNecole Creative Learning Environment for primary school pupils from 6-12 years of age. FUNecole is built on active learning and creativity-for-life principles and lessons cultivate the entrepreneurial spirit, creative expression, innovative thinking, whilst acquiring advanced ICT skills. These lessons do not rely on rote learning in any form but on problem solving, self-reflexivity and creative imagination, enabling pupils to become developers and owners of information and ideas and not simple users of technology. FUNecole engages 21st century pupils in collaborative and stimulating activities that inspire them to

ELENA TANOU

Vice President, Top Kinisis Travel Public Ltd

My first job: Cyprosun Holidays, UK, from 1983-1988. My biggest challenge: My contribution to the organisation so that Top Kinisis Travel remains Number 1 on the list of tour operators in Cyprus, as well as opening markets for incoming travel. More than 100,000 people travel with us every year. I’m very proud because we are always the first ones to introduce several new destinations every year around the world. The establishment of these new destinations is done after my thorough exploration of these countries, cities and islands. Our clients’ comments are of paramount importance to us so we keep up with the fast-changing trends of our times to offer the best, the different, the trendy, the luxurious, the competitive, etc., to our esteemed clientele. I feel that the key to successful entrepreneurship is to form honest, transparent and meaningful human

use ICT tools, discover and manage their own learning. I got where I am today thanks to: My studies in New York, USA. Imagine going from Paphos to NY in the ’80s! “If you can make there, you can make it anywhere.” And, of course, thanks to my family’s support My proudest professional achievement: When FUNecole was a recognized as best practice curriculum in all 27 countries of the EU. The report was prepared by European Commission’s Institute of Prospective Technological Studies (IPTS) and one very special moment in my career was when FUNecole received the endorsement of Cambridge International Examinations for supporting the ICT Starters Initial Steps

relationships. This is the way I work and I’m enthusiastic when our travellers tell us that the trips we design are unique dream holidays. I got where I am today thanks to: My character. Skills and qualifications are of great importance, too, but my willingness to be an achiever has driven me to work hard to gain experience and become established. I love my job and I consider it my hobby too, so I inspire my team to create all these wonderful new experiences for our customers while, at the same time, I am able to inspire and enthuse our customers that this new destination is not to be missed, no matter what. I am decisive and courageous, which means that I take clear-cut decisions even under pressure and I stand firm by my principles because I believe that, in this way, you can be justified in the long-term. Being resourceful is important in my field; I see what needs to be done in especially difficult situations and I explore all possible means of solving problems in a calm manner. I always plan my time well, I am firm about meeting deadlines, I consciously try to improve my work habits and I always lead by example. My proudest professional achievement: Because I stay informed about what is going on globally, I have a huge network of business associates/friends from the industry

primary school syllabus. The best piece of advice I’ve ever received: Be patient, stay in focus. My advice to young women in Cyprus who are just starting their career: Imagination is more important than knowledge. Everything starts with a dream… Set yourself a clear life vision. Have the perseverance to follow it through. Never give up. So few business leaders in Cyprus are women because: I don’t think that leadership has to do with gender. It has more to do with character education and culture. I believe that, in time, this situation will not exist. It is important to have women in leadership positions because: Women have more determination and vision and the desire to realise that vision.

worldwide. As a result I’m often invited to express my views at conferences, in panel discussions and International Fora. In 2009 I was invited to speak in Madrid at the meeting of EU Tourism Ministers during the Spanish Presidency. The same thing happened in 2012 under the Cyprus Presidency of the Council of the EU when I addressed the Meeting of European Ministers of Commerce & Industry in Nicosia. I’m proud to be able to be among the bigger players in Europe or internationally because I am constantly enhancing my knowledge, my horizons and my network. I have really good business friends from Alaska to Africa with whom I transact business with honesty and integrity. These valuable relationships have been built over 28 years of close cooperation. The best piece of advice I’ve ever received: Not to take hasty decisions but to decide collectively over a reasonable time. Many years ago, when I was young and a fresh Rotarian, a fellow Rotarian – the late David Beckett – was chairing the Rotary Board meetings. I noticed that, for any subject of discussion, he would ask each board member their opinion. If there was a majority vote on the issue, he would adopt it and the subject was closed. If there was no clear view, though, he would always

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No man can thin

e the confidence of a k lik woman r hav e a woman o

EVI PANTELIDOU

General Manager,Hellenic Tzilalis (Cyprus) Ltd

ANDRI GEORGIOU

General Manager, Dessange Paris

My first job: Hairdresser at Kakopetria in April1982. My biggest challenge: It was and will always be the creative process and being able to affect so many different dimensions including personality, society and beauty with style. Another major challenge is to my human resistance which, like everyone else’s, is being tested at all levels. I got where I am today

thanks to: Taking advantage of every opportunity that presents itself and having patience and persistence. I have always followed my wonderful father’s axiom which was that you should do to others what you want them to do to you. He also taught me that I should always cherish and protect the good things I have. My proudest professional achievement: The appreciation, recognition and support of our customers and people in general for the services we offer. The best piece of advice I’ve ever received: Always try to be the best at what you do and you will be

say, “OK, let’s sleep on it.” He would come to the next board meeting after speaking individually to the members but without pressuring anybody for a consensus and the decision would be taken. This tactic was a great lesson for me, and one which I have also adopted ever since and, I believe, has helped me enormously in my professional life, especially on all the boards over which I have presided. My advice to young women in Cyprus who are just starting their career: First obtain some qualifications and enhance your skills in your chosen subject because you love to do it. A key to success is to make a continuous effort to obtain the best results in an innovative and diversified way, so work hard. Adopt a positive approach to difficult situations. Be honest and close to all the people you collaborate with. Listen to them carefully. Be practical in your decisions and raise your points during business/professional discussions in a constructive way. Speaking sense and keep to the essence of the subject. Don’t be too emotional. Use technology: it is the future and it saves time and money. Be responsible, plan your career ad-

rewarded, even in today’s uncertain times. My advice to young women in Cyprus who are just starting their career: Despite the financial crisis, you should take risks as if nothing had happened. Invest in your knowledge and experience. So few business leaders in Cyprus are women because: Maybe not enough women today are willing to take the risk. The lack of an appropriate infrastructure and the right processes make it very challenging. It is important to have women in leadership positions because: No man can think like a woman or have the confidence of a woman.

vancement step by step. Take on extra assignments that will help you get ahead within your professional field but also those outside your field which are close to your beliefs. Be an active global citizen. It is important to have women in leadership positions because: Women are the majority of the population and they take most of the decisions in the family concerning expenditure and home management. To have women in leadership positions safeguards the basic objective of ensuring the steady development of the economy, continuous improvement of the standard of living and prosperity & welfare of all people. Women tend to be multitasking, imaginative, creative and they work collectively, using their strengths to create innovative solutions to problems and needs. Experience tells us that life is to be interpreted not simply in terms of things but in terms of ideas and values. I therefore urge men to respect women as equals and give them chances to prove themselves while, at the same time, I urge women to persevere with their knowledge and personality so as to be where the decisions are taken.

My first job: With Coopers & Lybrand (now PwC Cyprus) in Nicosia in 1988. My biggest challenge: Since my appointment, the company has expanded considerably, with the formation of subsidiary companies (it is now a holding company for other 3 companies), acquiring a considerable number of contracts. When Cyprus’ airports were privatized, my company was assigned the management of the civil servants working there and engaged in our line of work, for more than 24 months. During that period we expected considerable labour unrest but there was none, with the employees and our company working very peacefully! The current financial/economic crisis is a challenge for every business. Due to the fact that our company did not have any burdens from the past, and thanks to its efficient and prudent management, it is not only surviving but also able to expand with new projects and venues. I got where I am today thanks to: Many people with whom I have worked throughout my career, as well as to my academic qualifications. My proudest professional achievement: Participation in the team which attended the negotiations for the Cyprus Airports (Hermes) with the Cyprus Government and the lenders of Hermes (financial closing) My advice to young women in Cyprus who are just starting their career: To be professional, consistent and independent.It is difficult but good things need a lot of effort and work! So few business leaders in Cyprus are women because: So few women believe they can do it! It is important to have women in leadership positions because: I don’t believe that is important to have “women in leadership positions”. I believe we need leaders, irrespective of their gender!

THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

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COVER STORY

DESPO LEFKARITI

Managing Director, DeLeMa McCann My first job: Petrolina Hellas S.A., Athens Greece from November 1977 to April 1985. My biggest challenge: Forming and maintaining a vary talented team, one that can think conceptually and strategically, and then work efficiently to create and implement effective communication campaigns for all those clients who have placed their trust in our agency. In the current economic situation, maintaining profitability – which will enable the company to retain its talented people – is a major challenge. I got where I am today thanks to: My father, Takis Lefkaritis, who is my inspiration and my role model. Honest, intelligent, hard working, a rare visionary person, who dared to challenge statuses and succeeded. At the same time he was a loving father who invested his little

free time in teaching my brother Dinos and me the importance of values in life. He trusted me with the management of the company he bought in Greece when I was only 21 years old. This responsibility taught me how to treat people (employees and clients) with respect, how to think and act fast, how to cope with challenges in a very competitive and hard environment. These empowered me to become an entrepreneur. My proudest professional achievement: Our next campaign! The best piece of advice I’ve ever received: There is no shame in hard and honest work. My advice to young women in Cyprus who are just starting their career: Don’t be scared to dream and then work hard to give life to that dream. So few business leaders in

Cyprus are women because: Our society is fundamentally conservative, expecting women to be primarily responsible for raising a family. Those responsibilities deter women from becoming “too” career oriented as they have been raised to consider raising a family their main priority. Some women – few in Cyprus – have dared to do both and have been able to manage both. It is important to have women in leadership positions because: The way the two genders approach a situation is different. In general terms, a man sees the forest (the end result) and a woman nurtures the tree (the details and the tactics to get there). I believe that any analysis of situations and decisions that takes into account both perspectives will be more comprehensive.

POPI HADJIOANNOU-DEMETRIOU SOPHIE PAPAKYRIAKOU

Managing Director, A.M. Papakyriakou Ltd My first job: With the same company. I started in 1994. My biggest challenge: To stablise the company after the events of March 2013. I got where I am today thanks to: My frank and fair approach to all my associates, suppliers, bankers and, in general, everyone I work with. My proudest professional achievement: Creating Famous Sports, the biggest chain of sports stores in Cyprus, and gaining representation of the broadest range of sports companies for our company, A.M. Papakyriakou Ltd. The best piece of advice I’ve ever received: “Always be humble and down-to-earth.”

My advice to young women in Cyprus who are just starting their career: In Cyprus things are still very difficult for women but that does not mean that we should give up without a fight! So few business leaders in Cyprus are women because: Prejudice against women still exists and most men in decision-making positions feel more comfortable when surrounded by other men. It is important to have women in leadership positions because: Women think in a different way from men. They see things from all angles. And since women represent more than half the world’s population, it would be good if they had a corresponding representation in key positions.

Head, Retail Banking Division, Alpha Bank Cyprus Ltd My first job: Kidsons Impey Chartered Accountants, London in 1992 My biggest challenge: Being employed in the financial sector has been a challenge, especially following the unprecedented events that took place in Cyprus last March. The biggest challenge is to stay abreast of developments and adapt to the ever-changing financial environment. The best piece of advice I’ve ever received: No matter how much you progress in your career, always abide by your ethics and beliefs, be true to yourself and respect everyone you work with, superiors and subordinates alike. My advice to young women in Cyprus who are just starting their career: Due to

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ed ne en om W

to g et pa st

ARTEMIS PANTELIDOU

General Manager, EuroLife Ltd.

their multiple roles, women face greater challenges than their male colleagues in reaching their career objectives. You must therefore strive to achieve work-life balance at all stages of your career. So few business leaders in Cyprus are women because: Although there is an increase in female representation in middle management, women in Cyprus are having trouble breaking male dominance in high profile positions. This is also true for most European countries, although female representation in Cyprus certainly stands at much lower levels. Prejudice, stereotypes and culture are some of the main reasons why women find it hard to break through the glass ceiling and reach senior management positions, although this trend is changing, albeit at a slow pace. It is important to have women in leadership positions because: Women’s approach towards work and life is different – not necessarily better but different – from that of men in many ways. This gender difference should be recognized and treated by management as a source of success that can improve company productivity, in the same way that different talents and fields of expertise are brought together to create a powerful team.

it, with n o t their inhibitions and ge My first job: Deloitte Touche in 1982. I got where I am today thanks to: Developing a strong work ethic from a very young age, working alongside my parents in the family business. Open and direct communication developed my understanding of critical business challenges and their eventual outcome, giving me valuable and practical business exposure. Later on, a recognized professional qualification opened doors and gave me the opportunity to take on roles with responsibility and develop professionally. I then put all my energy into making a difference. Challenges, impact and achievement have kept me satisfied and motivated. My proudest professional achievement: Being selected by one of the ‘Big Eight’ accounting firms to train as a Chartered Accountant back in 1982 at a time when the UK was in recession and unemployment was at a peak. It was very clear during all my interviews that the odds were against me. I was both a foreigner needing a work permit and a woman. In many ways, it both defined and secured my future. I was one of the first 10 women chartered accountants in Cyprus and the first woman chartered accountant to be employed by the Bank of Cyprus

not talk themselve s out

of ac hievin g their

Group. I believe that what made the difference was my self-confidence, professionalism and a clear vision of what I wanted to achieve. My advice to young women in Cyprus who are just starting their career: Set your sights high and be willing to work hard

Set your

sights high and be willing to work hard to achieve your biggest

dreams

to achieve your biggest dreams. It takes both grit and resilience. Your social life will suffer at intervals, but this is part of the journey toward achieving your dreams. Business networking is a must, so build up your contacts among peers and professionals. Being visible and making your accomplishments known will increase your opportunities. If you don’t, you will be stunting your own growth. A career that allows you to be the best you will ensure that your relationships thrive, whilst being a working mother makes you a good role model. Don’t start out by assuming you can’t have what you want, for example, a family and

own potentia l.

career. Instead, give it your best shot and compromise later if you need to. Of course, a supportive spouse – a real partner – plays a huge part in succeeding. So few business leaders in Cyprus are women because: Cultural biases, stereotyping and a lack of female business leader role models in Cyprus do not encourage women to get rid of their self-imposed gender bias. They need to get past their inhibitions and get on with it, not talk themselves out of achieving their own potential. At the same time, men need to recognize the potential of women, get past their own gender bias and act in their own interest. Adopting a more inclusive attitude and tapping into the potential of women will give them better results and, ultimately, success. It is important to have women in leadership positions because: Women are good at building motivating teams, taking initiative and driving results. They are aware of the impact of their own and others’ actions and are less driven by risk taking and selfpromotion. Men tend to be aggressive and are driven by short- term maximization of profits. It is my utmost conviction that, had we brought more women’s values into business and decision-making in Cyprus, the country would have been in a different financial state.

THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

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COVER STORY

MELINA PYRGOU

MARINA ZEVEDEOU

Chief Operations Officer, Director, Aspen Trust Group My first job: Pricewaterhouse, London UK, 1989-1994. My biggest challenge: The biggest challenge in my Personal Development was to overcome my impatience to have it all, the way I wanted quickly! I have learned through the years to exercise patience and let go while, at the same time, keeping my eyes focused on my goals. The biggest challenge in my present position is managing so many different aspects of the Aspen Trust Group. I am the Chief Operations Officer and a Director/Shareholder of the Group, so a lot of major Departments report to me. The biggest challenge for me is the balance between achieving results, meeting targets and managing the human factor, both as Director of HR and Director of Client Services. As Accountants, we are trained to plan, manage and control any issues arising but the human factor is totally different and quite unpredictable. Hence to strive for a good balance is pretty challenging but extremely rewarding. The human factor is very important in our Industry and should be treated as such. I got where I am today thanks to: my determination to become the best I could while remaining human and enjoying a balanced life. It was my dream to change by example the dryness of the business world and make it a bit more approachable to women. Also to: mentors in all the positions I have held who really believed in my abilities and my foresight but also my very practical way of approaching and solving problems; parents who believed in me, helped and continue to help me immensely to this day. Last but not least, I have a partner who believed in me, assisted me to bring out issues and with whom I could share my thoughts and we could co-create with love and openness. I thank them all from the bottom of my heart. My proudest professional achievement: Becoming a Chartered Accountant with

Pricewaterhouse London in 199, was a great achievement for me as the female professional staff at the time only amounted to about 25% of the employee population and conditions then were rather difficult. My proudest professional achievement was setting up the Aspen Trust Group in 1998 and being such an active part of its growth to date. I have been there all the way and I consider Aspen my ‘first daughter’, where all my professional abilities and technical knowledge has been tried and tested many times. We have been through a lot but not only have we survived, we came out of the challenges better, stronger, more flexible and resilient and I thank Aspen for teaching me a lot of lessons. The best piece of advice I’ve ever received: In times of turmoil, keep your head down and keep walking/working. Over-analyzing and discussing every single possibility of what could possibly go wrong limits you and drains you emotionally, thus making you very unproductive and inefficient. Close your eyes and ears to what the others say and just feel what your truth is. My advice to young women in Cyprus who are just starting their career: Keep your eyes fixed on your goal and keep trying until you succeed. There is no such thing as failure, only a change of goals and priorities until you succeed. In Cyprus, due to the very fixed way society thinks, young women need to try harder to first educate society and then promote their ideas. Do not fear this; it actually reinforces your goals and your ownership of them. And do not forget you are women, with so many gifts and qualities. Be proud of who you are and never let anyone doubt you because of your femininity. Femininity is a gift. It is important to have women in leadership positions because: For starters, women in society would feel more represented and heard if there were more women in power. Women have unique qualities which can contribute greatly to society which, by the way, consists of women and men! Such qualities are intuition, nurturing, patience, team spirit, cooperation, sensitivity, good communication and interpersonal skills, empathy, compassion, efficiency and so many others. Many men and women firmly believe that if women were in leadership and utilized these qualities, our world would be a happier and healthier place. The gift of motherhood, which each woman possesses, irrespective of whether she has children or not, gives her the unique opportunity and insight to be patient and look at all angles of an issue before deciding and taking action. It trains her to show compassion and love openly. I find it difficult to believe that any woman serving her true female nature would ever begin a war. She values and celebrates life and, as such, she would lead in this way.

Director, Pyrgou Law Firm My first job: As a trainee lawyer at Lellos Demetriades Law Firm in 1991. My biggest challenge: In 2008 I started my own practice. The biggest challenge at the beginning is putting together a team that can perform to the standard expected by the clients. It was not an easy task but very important in going forward. I got where I am today thanks to: The fact that, in general, I am a very positive person and I always look forward. This has helped me enormously, especially in the last couple of years with the economy deteriorating. I always tell my team that the crisis is not something that is relevant to us and that we will keep going, no matter what. I believe this. However, the reality is that no-one can succeed alone. There are always others around us who help us get to where we are. I am grateful for having had and continuing to have the support of the people around me: my team in the office and my associates in Cyprus and all over the world for trusting me, my team and our services. Also I must mention my “support system” when it comes to looking after my children, especially when they were younger, and that’s my mother. My proudest professional achievement: It is surely the setting up of my law firm in 2008. However, over the years I have been involved in many committees to which I think I have contributed positively and left my mark. I still look forward to achieving more. The best piece of advice I’ve ever received: Was from Michael Zampelas with whom I was lucky early on in my career to have had the opportunity to spend time during various trips abroad organized by the Cyprus Chamber of Commerce. He taught me one thing I did not know then and I realize now that it is very important: “Think Big”. Your outlook completely changes if you think big and much bigger than you actually are. It drives you forward, setting goals that you never imagine could be achieved. And they can be achieved. My advice to young women in Cyprus who are just starting their career: A career in law is not easy. It requires commitment in time, continuous learning and drive. It is most certainly not a 9-5 job. For those who see it

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e ti

ANNA SOFRONIOU

t’s just how i ha

t is .O no th

have to be ready to d days you evo te er

e life. o your privat more time t

opment commitments w evel ith l d ittl k work or w y b p u n e k a t e r a s y a d e m So me remainin g fo r

private life. T

General Manager, The Cyprus Investment and Securities Corporation Ltd (CISCO) My first job: Investment Banking Analyst at CISCO in January 1996 My biggest challenge: We are all facing many challenges on a daily basis at work and it’s very difficult to distinguish among them. The greatest challenge I’ve faced in my career to date has to be the key role that any manager in Cyprus must have played in the past six months in helping his/ her company survive the recent political and economic/financial developments. For most of us, the discussion last year was business resumption and providing a motive for moving forward – unfortunately the situation we had been facing related to survival and viability

issues for our firms rather than stabilisation or growth. We faced – and are still facing – an uphill struggle to restore confidence and trust, maintain income and get costs down while maintaining our standards of customer service. While we have certainly had a tough time, the aim and challenge is to successfully ride out the negative impact of the March 2013 events and the recession and to achieve a higher degree of resilience, both for my company as well as the financial system in general. I got where I am today thanks to: The pleasure in my job. “Pleasure in the job puts perfection in the work” according to Aristotle. My proudest professional achievement: In

2006, CISCO was going through a lot of structural and organisational changes and consequently, taking over responsibility for the team, at a relatively young age, was my proudest and most challenging professional achievement so far. The best piece of advice I’ve ever received: There are several pieces of advice that have been passed down to me that I always have in the back of my mind: (1) Be guided by your gut as well as your intellect & Dare to Fail - use positive politics whenever necessary and celebrate failure as the fast track to experience and reward. And (2), be more than the Boss, Be there for others. Give back

and invite others to join you at the top. Nurture productive relationships on the front line across the organisation. It is important to have women in leadership positions because: Recent statistics reveal that women are more effective in leadership positions and especially in key competencies such as driving for results, developing others, practising self-development, taking initiative, displaying integrity, building better teams, combining intuitive and logical thinking more seamlessly, being more aware of the implications of their own and others’ actions, and thinking more accurately about the resources needed to accomplish a given outcome.

TASIA YIANNARA YIALLOURIDES

as a job, there is no career. During my employment at PwC, there was a lot of talk of work-life balance. Truly, this is what it is all about. Some days are taken up by work or work development commitments with little time remaining for private life. That’s just how it is. On other days you have to be ready to devote more time to your private life. It is important to have women in leadership positions because: Women represent 51% of the population. They are as educated as – if not more educated than – men if you check the statistics. They are the biggest consumers. Women have the same opportunities as men and have a lot to offer to decision-making. Women see things differently and it is important to include them on the boards of companies. They are an asset.

Managing Director, Partners/Y&R, pr:partners, Byte digital agency (in Cyprus), Arrion Advertising/PR/Digital (in Qatar) My first job: Copywriter at Galaxy advertising, Nicosia in 1989. My biggest challenge: The start-up of our company in Qatar whilst trying to fight for the survival and progress of our three companies in the Cyprus market. Entering an Arab market was all ‘Chinese’ to me and my team and it required a whole new way of working, both strategically and day-to-day. We had to learn how to approach the Qatari market and engage it both from the client and the consumer side. We had to study Islamic culture and customs and adapt ourselves to the easygoing pace and response of ‘Insh’Allah’. At the same time, in the Cyprus market we had to speed up, to be more innovative and more productive with less funds. This contradiction has been my biggest challenge so far! I got where I am today thanks to: Being a

person who likes challenges. I hate mediocracy. I love to try new things, to discover new ways, to find solutions to supposedly ‘insoluble’ problems. I think this is the reason why I love communication. Every product, every launch, every crisis is a challenge. My profession is one of the most intense and stressful ones but at the same time one of the most fulfilling as you face new challenges and create new things everyday! Of course, I had a great support system at home and at work. The best piece of advice I’ve ever received: “From here to China? Really?” from my dear friend and inspiration, Dr Tracy Kemble. There is always a solution to a problem. You just need to look for it.

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COVER STORY ea hav o t ucky dibly l e r c n i I am My first job: Citco Amsterdam in 1998. My biggest challenge: My work involves a decent amount of travel and even when I’m in Cyprus, working hours can be unconventional due to the different time-zones that I deal with. So the biggest challenge is to give my family – in particular my son – and friends the attention they deserve while dedicating so much of my time to a job that I thoroughly enjoy. It must be said that I am incredibly lucky to have a supportive husband and understanding friends. I got where I am today thanks to: Growing up in a liberal environment with a high level of gender equality. My parents ran their own successful business, while being there whenever I

understand ing and d fri an b s en u h ds ve i t r o p sup

ANTOINETTE ALBUS

Director of Operations EurAsia, Citco Corporate & Trust

needed them. This instilled in me the belief that through hard work, with confidence and a clear goal in mind, I can achieve whatever I want. My advice to young women in Cyprus who are just starting their career: Be yourself, don’t try and act like a man, recognize your strengths and weaknesses, and work from your strengths whenever you can. Take ownership over what you do and give others credit when it’s due. And most importantly, make sure you do something you enjoy; it will be easier to work hard and more likely that you will succeed. It is important to have women in leadership positions because: I believe in appointment by merit; whoever is most suitable should be the one in that role,

regardless of gender. Of course, only women can have babies but this shouldn’t disqualify them from senior roles and it doesn’t strip a woman of her talent and her ability to lead. Women generally bring a different perspective and communication style to management, they are good multitaskers and have a high degree of emotional intelligence. In my opinion, organisations would do well to look at ways to recognize and utilize the talented women they have in their ranks.

I can ve achaietever wh ant

EMILY YIOLITIS

Partner Harneys LLC My first job: European Parliament, Luxembourg in 2000. My biggest challenge: Staying abreast of the ever-changing tax, legal, trust and regulatory landscape globally and adapting our practice to find a fit for

Gravitating towards gender diversity in any corporate environment is a natural force which cannot be

impeded

Cyprus so that, jurisdictionally, we remain compliant but competitive. My proudest professional achievement: Client gratitude and industry recognition, as endorsed in legal rankings and internationally-acknowledged guides such as Chambers and Legal 500 are important drivers. I was also happy to be included in the Citywealth 100 Women in Power List 2014 which rewards women who are influential opinion leaders in their respective spheres. So few business leaders in Cyprus are women because: I think that there is a growing number of women in business today and less gender bias in the top tiers than, say, five

years ago. Although the quota system is a recourse, I am not personally a proponent of positive discrimination because I believe it addresses gender inequalities at a social and business cost which outweighs the benefit. It is important to have women in leadership positions because: Diversity, in terms of having people of different backgrounds, ethnicity, gender and experience in the same think tank, undoubtedly enhances not only the legitimacy but also the applicability of the outcome. I think that gravitating towards gender diversity in any corporate environment is a natural force which cannot be impeded.

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EVANGELIA ELIADOU

Executive Director, Pafilia Property Developers is our clients that at it hold t h t e he key to sustainable business success iev l e b I My first job: Trainee Lawyer at Christos Clerides Law Office. My biggest challenge: Without doubt, the greatest challenge that I’ve faced has been overcoming the many hurdles created by the global economic crisis. These obstacles have included the drying up of our core target markets, the difficulty for our clients to obtain credit from the banks, the general conservativeness of everyone with regard to luxury purchases and the necessity to restructure. Great adaptability has been necessary to overcome these hurdles, including identifying new markets and new

channels to source clients, developing new product that meets the needs of these new markets, and achieving a high level of market understanding in order to maximize our market share. Although it has been a very difficult time, I believe that both I and the company have emerged from these challenges stronger and more determined than ever. I got where I am today thanks to: My decision to be on the front line of sales for Pafilia, as I believe that it is our clients that hold the key to sustainable business success. Pafilia has a broad international

My first job: Aeolos Travel, 1988-2000. My biggest challenge: In 2012, IMH was entrusted with the organisation of all the meetings during the Cyprus Presidency of the Council of the European Union. With more than 3,000 sessions attended by 8,000 delegates, the project remains the largest undertaken ever in Cyprus. In parallel with my current duties, I was the project manager of this operation, in which a total of 215 staff were engaged. My main daily task was to coordinate with the contracting authority, (the Government of Cyprus) ,supervise operations at all levels, provide quick solutions to any problems that arose and take care of all the large and small operational needs of the project, from the catering to the cleanliness of the International Conference Centre. In this capacity I was fortunate to meet distinguished personalities such as the Head of the IMF, various European heads of state and ministers. I got where I am today thanks to: The one mentor that I had in my career. She was a woman and, unfortunately, she passed away a few years ago. I am very big on mentoring and, like everyone else, I did not succeed alone. My proudest professional achievement: It is yet to come! The best piece of advice I’ve ever received: Was from my mentor, friend and first boss. She told me that the secret

client base and I’m very fortunate that my role enables me to meet most clients and form relationships with them. I also frequently visit each of the markets from which we source clients in order to obtain a deeper understanding. It is this first-hand knowledge of our clients’ needs and desires that guides all of my strategic decisions, including which product to introduce and what services to offer. This customer-focus ensures that the company and product are market-oriented, as well as client satisfaction. It is this market orientation that has helped Pafilia over-

come many hurdles in recent years. The best piece of advice I’ve ever received: My father told me that it is better to take many decisions, even if some turn out to be wrong, rather than to take no decisions at all. I definitely live by this advice. My advice to young women in Cyprus who are just starting their career: I believe that women – more so than men – have to take their career paths into their own hands. I recommend that you be proactive, seek out difficult tasks and over-perform to demonstrate your value and abilities to ensure you achieve

to success was to look at each day as a new opportunity to be my very best. She taught me how to set goals, be honest, never say no, and work with people who share my passion for doing their best. I have always remembered her advice and I try to apply it on a daily basis. I am also very self-motivated, determined and hardworking. I really love what I do and I try to have people around me who share my passion. In such an environment I am in my element. My advice to young women in Cyprus who are just starting their career: Believe in yourself and negotiate for yourself. Women underestimate their own abilities. People will not get promoted if they don’t think that they deserve their success. Selfconfidence is the key to success. Another piece of advice is this: Make your partner a real partner. Relationships with balanced and equal responsibilities reflect positively on the performance of each partner at work. And if you start thinking about having a child, don’t lose focus and don’t panic. Don’t think “How am I going to cope?” Don’t sit back; seize new challenges at work. Be passionate about your work. Passion enables women not only to run a business but to find a balance between home and work. So few business leaders in Cyprus are women because: There are few worldwide and not only in Cyprus. This is a global

your aspirations. Most importantly, I recommend that you identify a career which you’ll enjoy, as a lot of time and energy will be devoted to it. So few business leaders in Cyprus are women because: The Cyprus business environment, much like the global one, is male-dominated. Women in Cyprus not only have to overcome this challenge but also to deal with the pressure which society places on them to be a good – often translated as full-time – mother/ housewife. Although difficult to achieve, I believe that an ideal balance can be found,

enabling women to be highly successful in both their business and personal lives. It is important to have women in leadership positions because: Women have many qualities that make them exceptional leaders. We are more empathetic and have better interpersonal skills than our male counterparts and we can also be more persuasive. Most importantly, however, having a balance of men and women in senior positions ensures optimum thought leadership and balanced decisionmaking.

DAPHNE TANG

General Manager, IMH phenomenon. Furthermore, companies do not have a clearly defined strategy or philosophy for the development of women into leadership roles. Many women work incredibly hard and become outstanding performers. At some point, their success brings them to the next level: the male-dominated level of power and leadership. And that is, I believe, one of the largest problems in Cyprus. Women themselves are reluctant to put themselves forward for promotion. And the reason is obvious: they have so few female role models to look up to and they lack the necessary self-confidence and ambition to set higher goals and picture themselves as leaders. It is important to have women in leadership positions because: As McKinsey’s recent study shows, women rate higher than men on most leadership skills which obviously contribute to an organisation’s growth. Women are multi-taskers, they are gifted with the “female brain” that gives birth to ideas, answers and solutions in complex organisations.

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opinion

Was the Cyprus bail-in fair?

Principles for Stable Capital Flows and Fair Debt Restructuring should have been applied.

he bail-in of depositors was considered essential by the Troika, if the country were to avoid unsustainable debt levels. Therefore, by restructuring bank liabilities, the country avoided the risk of debt restructuring or default. This was a typical example of creditors and debtor working together to avoid default – creditors are the bank depositors and debtor is the bank – and the Principles for Stable Capital Flows and Fair Debt Restructuring should have applied. These principles incorporate voluntary, market-based, flexible guidelines for the behaviour of debtors and creditors with a view to promoting and supporting financial stability. While they are not legally binding they have been proven effective in dealing with sovereign debt restructuring. Until October 2010, the Principles applied only to sovereign issuers in emerging markets, but their applicability has since been broadened to encompass all sovereign issuers, as well as cases of debt restructurings by non-sovereign entities in which the state plays a major role in influencing key parameters of debt restructurings. They should have applied to the restructuring of bank liabilities, as this was an agreement involving an intergovernmental group (the Eurogroup), Cyprus’ House of Representatives (legislature) and the Cyprus government (executive). The Principles rest on four pillars: (i) transparency and the timely flow of information; (ii) close debtorcreditor dialogue and cooperation to avoid restructuring; (iii) “good faith” during debt restructuring and (iv) fair treatment of all parties. In the Cyprus bail-in, pillar (i) was not satisfied as the decisions were based on confidential studies by PIMCO and KPMG. Pillar (ii) was satisfied as the Steering Committee for the PIMCO study involved all the key actors. “Good faith” was not questioned by any of the participants of the Steering Committee so one may consider pillar (iii) satisfied as well. However, Bank of Cyprus (BoC) that was to assume the burden of Laiki ELA was not consulted, its executives questioned the fairness of the deal, its Board refused to approve the deal and resigned in protest, and the deal was signed by the Governor of the Central Bank of Cyprus in his capacity as resolution authority. Therefore pillar (iii) was not satisfied in dealing with Bank of Cyprus. Furthermore, the treatment of various stakeholders in the new BoC was not equitable. In particular, the bailed-in depositors of BoC contributed €3,806 million in cash and received 3,806 million shares,

The bailin process also created transparency where opacity was required

By Stavros Zenios

i.e. €1.00 per share. Laiki contributed net assets of €425million and received 844million shares at €0.503 per share. The capitalisation of the old shareholders of BoC was €371.95 million at the time of restructuring and they received 18 million shares at €20.66 per share. If all stakeholders had been given shares at the same price in proportion to their capital contribution, the capital structure of the restructured BoC would have been 82.7% bailed-in depositors, 9.2% ex-Laiki and 8.1% old BoC shareholders. Instead, the current allocation stands at 81.5%, 18.1% and 0.4% respectively. This is preferential treatment of ex-Laiki at the expense of old BOC shareholders. Of course, old shareholders expect to be wiped out in case of bankruptcy. However, the bank was restructured, not resolved – i.e. there was no bankruptcy – and therefore they should have been treated equitably with ex-Laiki, even as BoC depositors received preferential treatment, as they should have done. Therefore, fairness pillar (iv) was not satisfied. In a perverse twist of events, while the bail-in process failed the transparency test, at the same time it also created transparency where opacity was required: with BoC shares returning (hopefully) to active market trading, the bank ownership needs to be disclosed. Since a very large proportion (81.5%) of the shares is owned by the bailed-in depositors, any disclosure of share ownership allows us to infer the amount bailed-in from each shareholder. This is tantamount to public disclosure of deposits prior to the crisis, in violation of banking privacy rules. How is this analysis relevant to Cyprus today? The provisional agreement on the Single Resolution Mechanism clarifies bail-in procedures. Several exceptions to depositor bail-in are envisioned – for short-term deposits, payments for products delivered, pensions and wages. None of these exemptions were applied in the Cyprus case. Needless to say, these are the exceptions that would have mostly alleviated the severe credit crunch that Cyprus is experiencing. In spite all the encouraging rhetoric, growth with credit crunch is a myth – as my University of Cyprus colleague Marios Zachariades tweeted recently. Someone – the ECB, the EC, the eurozone – should make amends for the botched bail-in. As to “how”, I repeat my favourites: Extend liquidity to Cyprus banks so that capital controls can be lifted and provide financing for a bad bank We need arguments, not passions, in Europe and this is one reason why I have thrown my hat into the European parliamentary elections.

info: Stavros Zenios is a Professor of Finance and Management Science at the University of Cyprus and President of the Universities of European Capitals. He is

standing as a candidate in the May elections for the European Parliament with DISY/EPP. 32 Gold the international investment, finance & professional services magazine of cyprus

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banking

HIGH PERFORMANCE

Culture

This is what differentiates an exceptional company from a middle-ofthe-road one, says Saxo Bank Chairman Dennis Malamatinas. By John Vickers, Photograph by En Face Sudio.

fter a successful career at the helm of some of the world’s most iconic brands, there is little that Dennis Malamatinas can’t tell you about business. Having served as the CEO of Burger King Corporation, Smirnoff Vodka, Priceline Europe and Pepsico Italia and as the Chairman of Metro International, the world’s largest international newspaper, he joined Saxo Bank as a director seven years ago, later becoming Vice-Chairman and he has been Chairman of the Board for the past two years. Malamatinas (“The name is Greek. I was born in Africa of Greek parents and educated in the United States; my wife is Dutch, I live in London and I‘m a Swiss citizen – I guess I’m a man of the world”) says that he joined Saxo because he likes and believes in the business model and the vision of the bank’s founders. “It’s an amazing model,” he says. “I like the people, too, and that’s why I am still here.” Twenty years ago, as one of the first financial institutions to develop an online trading platform, Saxo Bank was well ahead of its time. Now that online has become an

essential part of banking and trading, how has the bank managed to remain innovative and to stay ahead of the competition? “Twenty years ago we were ahead of the curve and ahead of everyone else, including the big banks and that gave us an enormous advantage,” he says. “Even today, one of the top 3-4 banks in the world uses us as a so-called White Label client because it hasn’t spent the money, the time or the effort to build a platform such as ours. Other banks and brokers use Saxo Bank’s trading technology to provide trading solutions to their own clients. So we have stayed ahead of a lot of our competitors thanks to our technologically very advanced and very reliable platform. Moreover, we’re highly differentiated as a multi-asset platform, which means that a lot of other online firms do Forex trading, for example, whereas we do that and many other things besides. And last but not least, Saxo is a bank, supervised by the Financial Services Authority of Denmark, so in terms of trust we are seen to be a serious financial institution.” Doesn’t the apparent advantage of being a multi-asset platform make it harder to keep up with the demand for ever morespecialised products which competing companies (e.g. Forex brokers) are constantly

introducing? No, says Malamatinas, insisting that “The fact that we are a multi-asset platform is a strength for us. Our customers are relatively sophisticated and the fact that we offer them the possibility to trade a number of asset classes is obviously a plus. The competition is always going to be there but we believe that in terms of technology, reliability and trust we are ahead of the game. We are not complacent and I’m not going to sit here and tell you that we are the best – when you start believing your own press it’s the beginning of the end – but I have been trained to listen to what our customers say, which is that they love Saxo Bank because we’re very reliable and fast.” Saxo Bank now has offices in 24 countries and clients in 184 countries. As to why it decided to relocate its Central/Eastern European hub from Copenhagen to Limassol, Malamatinas jokes “Better weather!” before going on to note that the bank has a lot of Cypriot customers (“and not only wealthy Russian speakers”) who trade their multi-asset portfolios with it. “We already had a relationship with a number of financial institutions, banks and brokerages that were located here before the crisis and the move also enabled us to gain considerably

Retailing – and specifically in Cyprus – is not on the agenda 34 Gold the international investment, finance & professional services magazine of cyprus

SAXO BANK

axo Bank was founded by Kim Fournais and Lars Seier Christensen in 1992 under the name Midas. In 2001, Midas became a fully licensed and regulated European bank and was renamed Saxo Bank, after one of Denmark’s most revered figures, Saxo Grammaticus, the 13th century mediaeval scholar and historian who first chronicled the history of the Danish people. Saxo Bank was one of the first financial institutions to develop an online trading platform that provided ordinary investors with the same tools and market access as the professionals. Over nearly two decades, it has grown to become a fully licensed and regulated European bank specialising in trading and investment. Through Saxo Bank’s suite of online trading platforms, clients can access the world’s major financial markets from any location and trade a broad range of financial products, including Forex, FX Options, Stocks, CFDs, Futures, Contract Options and ETFs, all from a single account. Advanced trading tools, reliable live prices, fast trading executions and ease of use have made Saxo Bank’s platforms important business tools for traders and investors in over 180 countries, as well as banks, brokerages and other financial institutions. Always at the forefront of change, Saxo Bank is a financial facilitator, bridging the gap between providers of products/ liquidity on the one side and trading clients on the other. Product/liquidity providers are typically global banks and exchanges that deliver high-quality liquidity that Saxo Bank integrates into its online trading platforms. The Bank’s clients comprise both private client segments and institutional client segments, including banks and brokers that use Saxo Bank’s trading technology to provide trading solutions to their underlying clients. Such banks and brokers (White Label clients) represent approximately half of all Saxo Bank clients.

banking

I’m not exaggerating when I say that we’re looking at growing the business by ten times in the next five years in terms of costs and efficiency so we consider that it has been a very successful one.” The Limassol office employs 40 people plus another 15 at Saxo Capital Markets, housed in the same building but despite the problems currently being experienced by the local retail banking sector, there are no plans for Saxo to enter that particular market. “We’re not a retail bank,” says Malamatinas. “We have a few private banking branches in Denmark but the DNA of Saxo Bank is not the retail sector. We made an exceptional strategic move to capture certain types of assets. Retailing – and specifically in Cyprus – is not on the agenda.” One of the key issues in banking these days is transparency. Given that many people are still suspicious of the Internet, does Saxo Bank have a problem with this perception and the need to be seen to be transparent and open? Not at all, says its Chairman: “Funnily enough – and I can tell you this because I’ve worked in and run many big corporations, including Priceline, one of the largest online companies in the world and a $60 billion market cap company – I would argue that a lot of online business is more transparent than that of the ‘bricks and mortar’ firms,” he says. “We need look no further than Lehman Brothers as an example, the like of which we haven’t seen with any online business. The second point is that Saxo is a bank, monitored by the European authorities and, consequently, there is full transparency.” As part of its global promotion strategy, Saxo Bank recently signed a sponsorship deal with the Lotus Formula 1 racing team. What does such sponsorship offer? “As you probably know, Formula 1 has one of the highest viewerships globally after football,” Malamatinas says, noting that when he was the CEO of Pepsico Italia in 1987, the company had sponsored the Benetton team. “It’s a terrific event that a lot of our clients appreciate and we can leverage and use it for our high net worth clients. Formula 1 is very exciting and, of course,

our sponsorship of the Lotus team means that there is a lot of pressure on our PR and marketing people to ensure that we get the maximum mileage out of our investment. Everything is measured and we believe that it’s worth the effort.”

In terms of technology, reliability and trust we are ahead of the game Next month, Dennis Malamatinas will have completed two years as Chairman of Saxo Bank. How would he sum up his contribution so far? Modestly, he begins by saying that he doesn’t want to take the credit himself “It’s never just one person. It’s a team. However, what I have tried to bring to the party is basically my grey hair and my experience of running multinationals and also some of the processes. It’s all about leadership and putting the right team in place.” Good leadership is not rocket science, he says, noting that one of the things he has focused on is putting the customer at the heart of everything Saxo Bank does. “We are customer-centric in terms of segmenting the customer base, understanding our customers’ behaviour and how we can better cater to and service them,” he explains. On the subject of customer service and focus on the customer, is this not a little strange for an online business? After all, it’s not a question of going to meet the bank manager in his office. Malamatinas believes that being online actually makes it easier to deliver great personal service: “We have

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so much information on every customer – the traditional banks have no idea except, perhaps, in the case of a few wealthy customers – and so the challenge for us is to collect and mine the data and see what our customers like, how and what they trade, etc. If needs be, there are cases with our VIP customers where we do indeed meet them face to face. But being online is not an obstacle. Just look at Amazon.” In addition to making the business more customer-centric, Malamatinas says that he is now focusing more and more on the quality of the people working for Saxo Bank, the way they operate and what needs to be done to create an even better high performance culture. “At the end of the day,” he asserts, “this is what differentiates an exceptional company from a middle-of-the-road company: a high performance culture. I’ve done it in my previous life and I like to think we can do it here too. It’s exciting to work with high calibre people who make a difference. Of course, as the Americans say, ‘You’re only as good as your performance today’ but looking forward, the potential is enormous.” In reply to the question ‘What are your ambitions for the bank for the next five years?’, Dennis Malamatinas’ response is probably the most optimistic any company official has ever given to Gold. “In most of the businesses that I’ve been involved in,” he says, “my answer would have been ‘to double the business.’ In this case, I’m not exaggerating – and we can meet again in five years from now – when I say that we’re looking at growing the business by ten times. We’ve built a very powerful engine and it can really handle a lot of volume because the technology is there. So the challenge is drive more volume through the engine, to gain more customers as we grow around the world and we’re going to do that. There’s no question.” Ten times growth is an astonishing prediction, I say. “Frankly, if it’s not ten times it will be eight times,” he insists. “There is no question. It’s going to be enormous and significant growth. You’ll see!” Read all about it in April 2019.

entrepreneurial education

Elisa Bosio, Secretary of the Board, Junior Achievement Cyprus

Dr. Nicos Peristianis, President of the Council, University of Nicosia

Andreas Koupparis, Chairman, CyBAN (Cyprus Business Angels Network) Andreas Papadopoulos, Manager, Group Strategy, Hellenic Bank, Chairman of the Board

Junior Achievement Cyprus, Board of Directors

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Eloiza Savvidou, CEO, Junior Achievement Cyprus

The

ABC of Business Constantinos Loizides, Chairman, Piraeus Bank (Cyprus)

How Junior Achievement Cyprus has taken entrepreneurial education into schools. By Chloe Panayides, Photography by Jo Michaelides

the international investment, finance & professional services magazine of cyprus

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In entrepreneurial education

light of the rupturing of the island’s banking sector in March 2013 and the consequent overall economic fracture, both private and public stakeholders have been feverishly exploring the most fecund avenue for recovery. Will foreign investment be our saviour? Or is the impending extraction of natural gas reserves our greatest asset in moving forward? Andreas Papadopoulos, Manager Group Strategy, Hellenic Bank has other ideas. He believes that the ABC of laying solid foundations for future sustainable growth is as simple as 1) recognising that the human mind is society’s fundamental resource; 2) allowing for entrepreneurial education amongst the youth of today who will, invariably, be our leaders of tomorrow; and 3) permitting a forum for the practical application of this newly learned know-how. Papadopoulos met with Gold to describe the ins and outs of the Junior Achievement Cyprus initiative that is growing in prominence day by day. “Did you know,” Andreas Papadopoulos asks with a smile, “that Cyprus, statistically, has the highest number of companies per household in the eurozone by far, com-

There is a clear and unmistakable link between entrepreneurial education and success

pared to the latter’s average?” Papadopoulos was not exaggerating. Cyprus’ percentage registers at 19.5%, compared with the average of 11.1%. “It’s almost twice the average,” Papadopoulos asserts, “We obviously like being our own bosses!” Elaborating, he explains: “As Cypriots, we are driven to have our own companies. I think it’s built into our DNA. Being an island, trading and business is part of our nature. Any small country must adequately promote itself, and this often comes in the form of asking the questions ‘What can I do?’, ‘What can I make?’, ‘What can I develop?’ and so on.” And yet, considering the number of businesses already set up, Papadopoulos believes that the most vital questions we should be asking ourselves now are: ‘How good a job are we doing?’ and ‘Are our businesses set up in a structured and sustainable manner?’ “Unfortunately, structure is lacking throughout Cyprus, from our education and health systems, to our real estate development; even our laws and regulations lack structure so as not to be as implementable as they should be,” he says. Untangling the impedimental knots already in existence is an arduous task; conversely, preventing the permeation of the same mistakes is not only possible but a responsibility that all stakeholders should be willing to bear. Junior Achievement Cyprus (JA Cyprus) was officially founded in 2011. “Through JA Cyprus,” Papadopoulos says, “we are laying the building blocks, building the foundation and erecting the framework, nurturing the business professionals and leaders of tomorrow.” Here, he pauses. “I think it best we go back to the beginning.” The beginning actually dates back some 100 years, when Junior Achievement was established in the US. A means of allowing for entrepreneurial education within the otherwise stringent and somewhat onedimensional school curriculum, the Junior Achievement initiative has spread worldwide. JA Cyprus falls under the auspices of Junior Achievement Europe (JA-YE Europe), with Caroline Jenner, CEO, JA-YE Europe actually serving on the Board of Directors of the Cyprus faction. “Students are given – via practical challenges – the opportunity to learn about how

40 Gold the international investment, finance & professional services magazine of cyprus

to strike the fine balance between innovative thinking and well-thought out planning, allowing for a structured, sustainable and successful business model,” Papadopoulos explains. “In essence, teams of students develop their own businesses, having to consider costs, sourcing, how to brand the product, how to promote it – all angles of business planning and execution must be given thought and developed. The students even take on specific roles, such as marketing manager or human resource officer.” Having been introduced into Cyprus in 2009, the programme itself has, until now, been a work in progress. “For the first three years, we ran ‘Innovation Camps’: a single day of entrepreneurship, through which some 125 students aged 16-17 gathered at the University of Nicosia to address a specific challenge. “Students were split into random teams of five and, within that single day, they had to develop a solution to a previously unknown challenge from a business direction.” And what might these challenges look like? “In 2012, we posed the question: ‘How can we tackle the economic crisis?’ The ideas generated were phenomenal. The winning team that year decided to address the reduced economic vitality of households by making a branded clothing line from reused clothing, resulting in unique produce that can either be bought, or exchanged for old items of attire.” Following three successful camps – and perseverance on the part of the board of directors and other relevant stakeholders – JA Cyprus has flourished over the past year, finally entering the school system in September 2013. Papadopoulos elaborates: “To have been able to evolve JA Cyprus to the next level, we required greater commitment from the Ministry of Education (which we received), as well as funding (as this project is driven purely by private funds). “Thanks to our sponsors, we were able to set up the programme for this year as a more permanent and prevalent fixture of children’s school lives. “Initially, in close cooperation with the Ministry of Education, we invited the heads of schools island-wide to meet with us, through which we presented the project. We asked them to send, on a volunteer basis – and I must stress this, as the time

A small investment can truly give back immeasurably and effort given by the teachers is invaluable – teachers who would be appropriate and willing to participate. “The positive response was overwhelming, which is really testament to the high calibre of our teachers and their willingness to commit themselves to the future of Cyprus.” Papadopoulos describes how, prior to the commencement of the school year, JA Cyprus brought trainers from abroad to develop material with the teachers, and to guide them on how to deliver the theory of the project, encouraging, thereafter, its practical application. In January, a ‘refresher’ course was held, with strong support from JA Europe. “Now, we have approximately 250 students representing 25 schools – from the public, private, and vocational sectors – taking part. It’s an absolutely inclusive programme and is not subject-specific: business plans can span both the arts and sciences, from optimising the utilisation of Cyprus’ plethora of fresh fruit, to devising security systems, making resizable shoes, organising treasure hunts, and publishing a school magazine. “An event scheduled for May 2 will be our ‘open day’ and the first National Company of the Year competition, through which the students will have the opportunity to present their projects to the public. Several categories have been established to recognise the accomplishments of the teams, but the overall winning team will have the chance to represent Cyprus in Estonia through the JA-YE Company of Year Competition, due to take place in Estonia on July 22-25. “Our May 2 event is already garnering great attention, with the Minister of En-

We are nurturing the business professionals and leaders of tomorrow

ergy, Commerce, Tourism, and Industry, the Ambassador of the US in Cyprus, the British High Commissioner and members from the Chamber of Commerce and Industry already set to attend. Due to the recent Government reshuffle, we’re still awaiting confirmation of whether the current Minister of Education will attend.” Beyond the practical aspect of the project, Papadopoulos explains: “Students are encouraged to consider such qualities as time management, clarity and succinctness in presenting, and working effectively as a team.” Teamwork, it transpires, constitutes the crux of JA Cyprus, precisely because, according to Papadopoulos, it facilitates reaching the pinnacle of professional success. “Whilst teamwork is crucial to success in the professional sphere, there is little opportunity for nurturing it within the school environment,” Papadopoulos begins. “Think about it: exams are individual, and exams are, almost exclusively, the mark of a student’s success at school. The mantra follows: I learn, I study, I pass, and I go to university. “Therefore, the mindset of the school environment is based upon the individual. Moreover, as the education system requires a simple and efficient method of assessment – that is, examinations – most exam questions have only a single answer, which is a stark departure from the real world. “And so it is that the fundamentals of JA Cyprus develop thus: teamwork, set against creative, innovative thinking, which allows for more than one answer.” Concurrent to the promotion and nurturing of these ideas at Junior Achievement level, the European Commission has delineated the core driver of education in the coming years as being ‘entrepreneurial education’, with the possibility of developing a framework accordingly to introduce this into the national curricula all member states coming closer to reality. “At its core, there is a clear and unmistakable link between entrepreneurial education and success,” Papadopoulos states. “Through JA Cyprus, we are training the future employees of Cyprus’ business world. JA Cyprus is dual in nature in that

the relevant theory is taught, and thereafter students are afforded the opportunity to apply this practically: we allow for not just the know-how, but the do-how. This is rarely afforded prior to entering the professional world.” And what is Papadopoulos’ view regarding the responsibility of private stakeholders being dynamically involved in the nurturing of school children, preparing them for their professional life to come? “It’s paramount. Ultimately, JA Cyprus has been founded by individuals, not companies. I, for example, am involved both in a personal capacity and as a representative of Hellenic Bank. “One entity that has continuously supported the project is the University of Nicosia. It has been a main point of action, hosting all of our innovation camps. “Besides providing money, the sponsors of JA Cyprus (for 2013-2014, these are Piraeus Bank, Deloitte, M.S. Jacovides, Metro, Hellenic Bank, Bionic, Helix Business Incubator, Microsoft, the US Embassy, and the University of Nicosia) also supply mentors, approximately two per school: managers, for example, with great business experience, who offer their guidance and assistance to both students and teachers.” When asked as to how JA Cyprus may now grow, having successfully penetrated the school system, Papadopoulos explains: “Our plans for the future include extending this programme to primary schools and middle schools, as well as universities. “However, we want it to be a controlled expansion, to keep the quality high. Initially, within the next year, I foresee us expanding the programme to more schools representing our current targeted age bracket, as well as instigating the university programme. We also plan on holding more one-day innovation camps.” Growth, Papadopoulos explains, may also come in the form of an expanded JA Cyprus team. “By offering the right support, others may join the board, which is responsible for setting the guidelines; sponsors, meanwhile, fund the programme and provide mentors. “We’re even looking for sponsors to lend their name to a specific award in the national competition. We fully welcome participation from the business community: a small investment can truly give back immeasurably.”

ACCOUNTANCY

Taxing job for Taxing times Although accountancy is hundreds of years old, it wasn’t until after the middle of the 19th century that professional accountants became recognised. The Institute of Chartered Accountants in England and Wales (ICAEW) was granted a Royal Charter by Queen Victoria in 1880, giving its members the right to use the designation ‘chartered accountant’. Today, ICAEW is a professional membership organisation that promotes, develops and supports over 142,000 chartered accountants worldwide. It provides qualifications and professional development, shares knowledge, insight and technical expertise, and protects the quality and integrity of the accountancy and finance profession. By John Vickers

ichael Izza has been the Chief Executive of ICAEW since 2006 and under his leadership, the Institute has undertaken an ambitious strategy to transform itself into an international professional accountancy body. During his recent visit to Cyprus, when he met with President Anastasiades, he gave an exclusive interview to Gold. Gold: What are the ICAEW’s main priorities for 2014 in terms of its interaction with governments around the world? Michael Izza: First of all, business growth and economic stability are important in every market that we are in. Markets are at different stages of recovery from the financial crisis – some, such as South East Asia, might say they’ve not been in such a situation but they’re experiencing different challenges now – so positioning the accountancy profession as being one part of helping business operate more efficiently and effectively is something we think is crucial. The second priority area relates to tax, which is probably the biggest single challenge that our membership and the accountancy profession globally is having to deal with at the moment, from a repu-

42 Gold the international investment, finance & professional services magazine of cyprus

tational perspective. Governments are short of money and they’re looking at ways to improve their financial performance; they look at corporates, they look at individuals and ask them to pay more. Our members and, indeed, the members of other bodies are there to ensure that people pay the right amount of tax and do not to stray into tax evasion. But we have a bigger issue, which is that there is a gap between what politicians think companies should pay and what they do pay according to the law. Part of this is because we’ve got a tax system which, pretty much globally, is no longer fit for purpose. Its origins are deep in the 19th century, when most companies and individuals were based in one location and not trading extra-territorially. That’s now evolved with the multinationals and it’s been compounded by the arrival of the Internet age and digital business. As an entrepreneur, you no longer need to have your sales centre, your dispatch centre and your production centre close to where you’re actually making the sales and so, depending on how you then structure your transactions, it can mean that the country in which you effectively make your sales isn’t the country where you record most of your business. That’s just how it is today and we

Gold: One main reason why Cyprus has done so well as a location for international companies is its 12.5% (previously 10%) corporate tax rate. Unless all the countries in the EU decide to have the same rate, it’s not going to work is it? Your members won’t be advising their clients to pay more than they need to. M.I.: I agree that it’s going to be very difficult but actually the one country that really matters is the United States. If the Americans don’t want to play ball on this, nothing is going to happen.

think this is something that needs to be addressed at an intergovernmental level rather than an individual government level.

the government is spending £750 billion a year. That›s bigger than any corporate in the world yet you’ve got not ‘top drawer’ people dealing with it. So if governments want to make savings, they need to start getting serious about financial management, and not just on the spending side but on the balance sheet side as well. That’s something we’ll be talking to some Cypriot ministers about because they are interested in it and we’re seeking to help them.

Gold: Public sector financial management is another area of major concern to the ICAEW. Why? M.I.: The financial management of governments around the world, including Cyprus and the UK, could do with improving. Governments and politicians are very quick to demand the highest standards from private business but they don’t apply those same standards to themselves. We’ve developed a report called A CFO at the Cabinet Table which the UK government has agreed to implement and one of our basic premises is that none of the top three civil servants in the UK has financial management as a priority yet

There is a gap between what politicians think companies should pay in tax and what they do pay Gold: But unless all the countries around the world agree on a common rate of corporate tax, for example, how is anything going to change? Won’t companies continue to base themselves where the law helps them to save on their tax bills? M.I.: Yes, but I would add two modifications to what you say. First of all, I don’t think it’s helpful for companies like Starbucks to pay £20 million voluntarily in lieu of a tax contribution because of public pressure. That’s no way to run a system. The second thing is that society today – and consumers in particular – is interested in dealing with businesses that are ethical and do the right thing. Regardless of what the law says and how it’s structured, I think that an awful lot of corporate boards are very sensitive to the reputational and financial damage that could flow from, for example, a customer boycott. It’s my understanding that tax is an issue that was probably discussed by most large corporate boards in the UK last year there’s no reason to believe that that isn’t true for Europe and North America too. The OECD has a project underway at the moment called the BEPS project (Base Erosion Profit Shifting) with 15 individual projects under that overall title. The first one about how to tax the digital economy and that’s the nub of the issue. There are no easy answers to this. We at the ICAEW have hosted the two UK open meetings on this, we are inputting to the working groups (and indeed this is going to be presented to the G20 in Brisbane in November) and we are currently exploring sponsoring next month’s G20 event in Tokyo so that we can be seen to be supportive of this and also be engaged in a constructive dialogue. It doesn’t make any sense for the accounting profession to say “That’s what the law says. Tough!” That’s not going to win anybody any points.

Gold: Is the accounting profession still attracting enough new people? How do the Institute’s numbers compare over the last 10 years? M.I.: In terms of people wanting to train as chartered accountants, those numbers continue to go up. It’s still seen as a very attractive profession although it differs in certain parts of the world. In Vietnam, for example, accountancy is seen as a profession for women. The constraining factor in recent years has been the number of employment places available in some countries by what’s not been a sparkling economic performance but, in terms of young people wanting to come in, there are many more than can be dealt with. Gold: You have an office in Brussels, which suggests that you want to play an active role in Europe-wide discussions affecting your members. Is that right? M.I.: Absolutely. In common with any EU member country, a very high proportion of our legislation now emanates from Brussels – 80% is a frequently-quoted figure –and since 2010 we’ve seen an awful lot of draft legislation that very much affects the financial services in the UK and across Europe so we want to be there to have a constructive dialogue, not just with the Commission but with parliamentarians as well. We have certainly had great success with things that we have wanted to be amended, re-worded or changed,

the international investment, finance & professional services magazine of cyprus

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ACCOUNTANCY

though I would have to say that, over the last couple of years, it’s been more difficult because some Commissioners and members of their staff tend to regard interaction with anybody connected with financial services as lobbying and trying to deviate them from their task. Gold: Tell us something about the ICAEW’s presence in Cyprus. M.I.: Cyprus is a market that has been important to us for several decades now. In recent years it’s come into stark relief because of the success of the Cypriot economy, on the back of which ICAEW and the training of chartered accountants has benefited. We have just short of 1,700 members and close to 700 students on the island, which is actually quite a big community. We work closely with the professional body here and with the authorities and we seek to support our members here insofar as they want to be supported. We work with the local profession to help them and we have a very good dialogue with them. Gold: You know that the accounting & audit profession has always been a mainstay of the island’s professional services sector. What sort of conclusions have you reached over the past 12 months about the effects of the bailout and restructuring on your members? M.I.: If you go back to this time last year, people were beginning to digest the impact of what had happened, they were through the

M.I.: Yes, I think that the audit profession in Cyprus is facing are pretty much the same challenges as those being faced globally. There might be differences from country to country because of specific requirements of legislators or regulators but broadly speaking everybody is asking the same questions: What is an audit? What is its relevance in this day and age? How does it have to evolve and change? Are we in a position to actually help that evolution or is it something that is going to be done for us? It’s 170 years since audits in the modern context were first mandated in the UK and they no longer bear any resemblance to what they were back then. I’m willing to bet that, by the end of this decade, they may well have changed again significantly. At the moment an audit is an opinion on financial statements. It doesn’t actually say very much. Some countries are experimenting with something called an extended audit report which gives more detail about what the auditors actually did and the discussion they had with the audit committee and they may extend that to the principal areas of judgment in the accounts. Audit could do more than just look at the financial statements because many of the most important things that investors want to know are about non-financial numbers. Technology is changing many things and it’s changing audits as well. What about auditors actually using data analytical tools to tell audit committees and the owners different things about their business? The general ledgers that record everything may have been set up 30-40 years ago. With analytical tools you can start to look at the business in a different way so this is added value that the audits of the future might potentially give.

We’ve got a tax system which, pretty much globally, is no longer fit for purpose curve of denial and they realised that some were going to be affected financially more than others. Businesses were looking at what they needed to do to make sure that they survived that period. And the numbers that I recall being talked about – contraction of the economy in double digits – have, in reality, been nowhere near that bad. I think that this year, even though it’s going to be very tough, is still not going to be as bad as some people feared. What that points to, in the medium term, is that the Cypriot economy is perhaps more resilient than many people thought it would be. Most of the reasons for businesses being here and continuing to be based here – a good legal system, a competitive tax rate, a good base of skilled people, a large English speaking population, proximity to markets in the Eastern Mediterranean and the Middle East – still exist and if you’re looking to put a head office or headquarters in this region, you don’t have to look 20 minutes’ flying time to see some politically troubled, unstable countries. Cyprus has a lot going for it in this respect. That then rolls over to the long term and the strategy once the Troika MoU expires. What is the Government going to build its recovery on? Oil & gas appears to be the flavour of the moment and hydrocarbons will undoubtedly have a part to play although there are some physical and political challenges to overcome to get it onshore and to markets but we shouldn’t forget business services which are still resilient and have a strong role to play in a mixed economy and, of course, tourism which, before the crisis, represented over 20% of the country’s GDP. That is a great asset too. Gold: Two months ago, our cover story was about the future of the audit profession. Are the same questions being asked globally?

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Gold: You will be aware that one of the big talking points in Cyprus these days is privatisation. What’s your view of the popular idea – elsewhere at least – that the private sector is invariably better than the public sector when it comes to running utilities and major corporations? M.I.: The UK went through a massive experiment in the 1980s and ’90s and at the time, as a young man, I was very supportive of privatisation. Today, given some of the problems and challenges that we’ve got as a country, I would say that some of the privatised industries would be better in state hands. I don’t think energy, for example, has received the investment that it should have. We’ve been talking in the UK about a potential energy crisis since 2008 and we’re now talking about potential energy shortages in 2016! The problem is that to have a long-term investment strategy in something which is very infrastructure heavy, you need to have a long time-frame and a private company, which is often focused on the next quarter or the next half-year, can find such time horizons very difficult. Governments that rotate also find them difficult but, if you can get cross-party consensus on things like that, I would think that it shouldn’t automatically be the default situation. Conversely, a company like British Airways, which used to be in state ownership, has done fine in the private sector. BA sets the standards that everyone looks to. I do believe that if privatisation is entered into, the Government have to make sure that they’re actually being advised by people who are just as sharp and savvy as those on the other side of the table. Because the experience from elsewhere in the world is that if you have civil servants trying to negotiate with people who do this every day,they’ll get taken to the cleaners.

opinion

Cyprus’ Twelve Step Recovery Programme The opportunity now exists to follow for a tried & tested method

or decades, Cyprus has been addicted to bad governance whilst also suffering from compulsive behaviour towards poor practices. We can no longer fool ourselves that we are immune to the deleterious outcomes of our desperate condition. The opportunity now exists for Cyprus to follow a tried & tested method of recovery. Step 1: We admit that ‘the way we do things around here’ is utterly hopeless as a modus operandi to achieving sustainable economic success. As Albert Einstein taught us, a problem is not solved using the same consciousness that created it. Therefore, good governance is the best solution to a crisis induced by bad governance. Step 2: We accept that ‘we are all in this together’ and put aside our differences to unite for a better future around this common cause. Tired and vacuous arguments that serve only to artificially divide society into opposing groups should be ignored. Step 3: We commit to identifying a purpose higher than our short-term self-interest to inspire us to build a sustainable economic future. The nation’s children who play, oblivious to the huge burden they will inherit due to our failure to be good and honest stewards, should provide the perfect inspiration. If not, we are truly beyond help. Step 4: We commit to undertaking a fearless inventory of ourselves to identify what has gone so wrong in our country within such a relatively short period of time. Our cultural idiosyncrasies of, inter alia, cronyism, tokenism, short-termism, populism, scapegoat-ism, clientism and tribalism must be confronted with all the courage and determination we can muster. Step 5: We declare a collective mea culpa for what has transpired to date, reinforced by private reflection on the way each of us has tolerated, acquiesced or manipulated the system. Each one of us must model good governance in our private and professional life and be part of the solution. Otherwise, we are simply contributors to the wider problem. Step 6: We acknowledge that ordinary people have suffered because of our actions or inaction. This includes: countless losers-out to

As Albert Einstein taught us, a problem is not solved using the same consciousness that created it

By Petros Florides

‘rusfeti’, buyers of property without title deeds, depositors subjected to a haircut, over-charged but under-served taxpayers, minority shareholders lacking proper protection, and retail investors mis-sold unsuitable products, to name just a few. Step 7: We commit to making amends to the people who suffer by demanding justice prevails. A legitimate means must be found of pressurizing the authorities into utilizing, without fear or favour, laws and regulations whenever a breach occurs. It is an insult to all good and honest citizens when laws and regulations are not implemented or enforced. Step 8: We resolve not to succumb to fatalism due to the size of the task at hand. Each small step on the long journey towards good governance contributes to a better future. Let’s be the ones ensuring that “hope springs eternal” in Cyprus too. Step 9: We commit to identifying the ethics, values and principles that should determine how our systemically important public interest entities, whether public or private, are governed and managed. The conversation must move beyond “You can’t prove I’ve done anything wrong” towards “Let me show you what I’m doing right”. Step 10: We commit to revising and enhancing laws and regulations governing the duties and obligations of directors of our systemically important public interest entities. The discussion should include increased personal liability on directors for any breaches of either the letter or spirit of relevant laws and regulations. This could be facilitated by mandatory ethics-based standards supported by an “apply and explain, or else” system of corporate governance. Step 11: We commit to learning from our past mistakes by holding each other accountable. All stakeholder groups (e.g. lawmakers, regulators, shareholders, customers, academia, professional bodies, civil society, employees, media, creditors, etc.) must be encouraged to play an active role and contribute to a new, holistic, good governance environment. Step 12: We commit to regular self-review and evaluation for the foreseeable future. Our addiction and compulsion are so strong we will probably need a generation to pass before even considering declaring victory.

info: Petros Florides is Regional Governance Advisor for World Vision International, and Executive Officer of World Vision Cyprus. He is also on the board of the Institute of Directors (Cyprus), co-founder of the Cyprus National Advisory Council for the Chartered Institute for Securities & Investments, co-founder of the Institute of Risk Management Cyprus Regional Group, and a Chartered Management Accountant. The views in this article represent those of the author and not any other individual or organisation. the international investment, finance & professional services

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profile

Aspen Trust

Without wishing to be irreverent towards young Juliet who, in Shakespeare’s beloved play, proclaimed that “that which we call a rose by any other name would smell as sweet,” Andreas Athinodorou, CEO of the Aspen Trust Group, clearly believes otherwise. In fact, everything one needs to know about the Group is embodied in its moniker, and Athinodorou’s experience has shown that when a company’s (or, indeed, a country’s) core values – its roots – run deeply and defiantly, beginnings and ends dissipate: instead, there is only revival, survival.

olours effervesce off brightly decorated canvases; busts of Greek philosophers sit pensively by; and a replica statue of the Nike of Samothrace spreads its wings, conveying the interrelated struggle and triumph embodied in this deity. This is clearly a place of reverence towards the arts, a space of exploration of creativity, and a testament to the potential of human talent but, no, I am not sitting in a museum or an art gallery. In fact, I have entered the world of the Aspen Trust Group. “I felt incredibly saddened when I beheld the Nike of Samothrace in the Louvre in Paris,” Andreas Athinodorou, CEO of Aspen Trust confided. “To see an emblem of such great force and dynamism confined within a small space can’t help but evoke feelings of sorrow.” We may be talking art – surrounded by it, no less, in Athinodorou’s office – but the profundity of this observation is not, it transpires, confined to this sphere. Athinodorou explains: “I truly believe that Cyprus is one of the most promising places worldwide: we are fettered only by our inability to realise our full potential. Yes, Cyprus is a small island, but this does not reflect the quality of what is simmering within. Unfortunately, we seem to be measuring our business and social potential according to our physical size, and aiming for far less than we can truly achieve. ” Aspen Trust was co-founded with his wife in 1998 and Andreas Athinodorou has worked tirelessly – and creatively – to ensure that it is not marred by this same stigma. Rather, he has pursued the assertion of local independence, set against a backdrop of global collaboration and interrelatedness. How? Athinodorou explains: “We are a large, independent service provider on the island, and have built an international reputation as industry leaders over the years since our inception. During

By Chloe Panayides, Photography by Jo Michaelides

the time leading up to Cyprus joining the EU in 2004, with all the new opportunities in our business, we were approached to be bought by an international group.” Soon, an issue arose: a chasm reflective of an innate discord between how Aspen Trust wanted to flourish, and the constraints that would be come with belonging to an international group. “We went through the process of due diligence. As we did so, however, it became clear that the core values that we stand for – in particular, the cultivation and protection of an entrepreneurial spirit – would be jeopardised, killed off, even, in a big corporation.” Athinodorou continues, “I was, admittedly, attracted by the international exposure and experience that would have come by proceeding with the sale but I was not willing to sacrifice our independence, which allows for the expression of our own, personal ideals.” He therefore went back to the drawing board and, by thinking outside the box, came up with an alternative solution: “I reached out to companies, and suggested a different mode of cooperation,” he says.

the international investment, finance & professional services magazine of cyprus

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profile

“Another international trust group responded positively, indicating that it was happy to explore these new opportunities with us. Collectively, we ended up creating a joint venture model that was duplicated in at least 15 different countries. Under this joint venture, we were able to export our value prepositions and know-how to over 30 countries.” So far, so good, it would seem. But then, a few years later, Aspen Trust’s international partner was bought by the very same company that had wanted to buy it out in 2004. “Faced with the same dilemma in 2012, we took the decision to walk independently instead of selling,” he says proudly. In February 2014, the news broke that Aspen Trust had entered into a partnership with the JTC Group. Athinodorou reveals: “JTC shares our core values and has attracted a lot of the old international trust team that we used to be partners with. It’s a strategic alliance, which is based on shared values, devoid of hindering local independence, and which permits us to provide seamless tailor-made solutions across borders. We’re aspiring to build an organisation that is independent locally, but connected globally.” Indeed, Aspen Trust’s very name embodies this aspiration, having been, since its inception, quietly emanating the value of striking this balance. “It’s important that people understand the symbolism behind the name,” Athinodorou elaborates. “Aspen is the English name for the Lefka tree, which some sources cite as the inspiration behind the naming of Nicosia: Lefkosia. “The largest living organ-

48 Gold the international investment, finance & professional services magazine of cyprus

ism in the world is an aspen forest: the deep-growing roots of the trees unite to bring forth one single entity of vast magnitude,” he says. “Nevertheless, each tree retains its independence, standing tall on its own. Being an aspen tree makes you part of a worldwide family but with independence. This is perhaps the best analogy for the way in which we operate with JTC. We’re operating with an international family, but the exchange of know-how, strategic visioning, design of products and more, are driven by the local entrepreneurial spirit.” Athinodorou believes that a vital lesson has emerged from this journey: “Our creation of an alternative alliance served as discernible proof that a view of the microcosm is invaluable in understanding and nurturing the macrocosm. Cyprus may be small, but this can, precisely, be used to our advantage. Our size facilitates a prime overview: we’re small enough to see the big picture, and we can consequently effectively develop knowledge, exporting our know-how thereafter.” When probed regarding Cyprus’ growth opportunities overall, Athinodorou muses: “Change is the only constant in life. To not embrace it or strive for it, even, is a disservice to Cyprus’ natural blessings. People often reference Cyprus’ position ‘at the crossroad of

Andreas Athinodorou

three continents’ but the explanation as to the benefit of this ceases with the completion of the statement. The island, quite literally, has a clear vision of the entire globe with the ability to act as a bridge, a stepping stone, in a myriad of permutations.” So what is missing? “Attitude: a lack of vision arising from not seeing our true potential,” Athinodorou asserts. “We’re not taking full advantage of this blessing. We lie in the perfect time zone for east to meet west, and yet we have not tapped into the opportunities available. Thanks to the island’s time zone, its educated professional population and a whole list of other strategic advantages, we can act as a base connecting the Americas with Asia, and vice-versa, providing services and know-how to Singapore and Hong Kong come dawn, and the Caribbean come dusk.” He continues: “An overview of our developed industries shows how times have moved on without us Cypriots keeping up with change; we are still trying to attract the low-budget tourist to the most beautiful island in the Mediterranean, the Stock Exchange is

still trying to recover from the 1999 boom and crash, and the real estate sector is trying to pass on the same old unsold houses from UK pensioners to the Chinese pensioners of the future.” So what if we were to see the true potential of Cyprus as a unique social and financial hub for quality living? How different would our value proposal be? Athinodorou ponders: “We have to ask ourselves: who do we want as neighbours for our children to grow up next to when we sell the next piece of real estate? Will the next investor in Cyprus bring us closer to the vision of a quality living island? Who can we become partners with to place our financial sector at the forefront of the world economy? Can we see how to turn our oil and gas discoveries into a driving force that will transform the island into a regional hub for trade and business? Do we understand how our education system can be offered to those who want the best for their children and are willing to send them to a quality living island for their development?” He adds: “Moreover, situated in the middle of a conflict zone, surrounded by warring Middle Eastern and African nations, could Cyprus become an intermediate ground in dispute resolution in politics and a place to mix the opposites’ business?” The opportunities, it seems, are endless: “Cyprus is like a projector,” Athinodorou explains, “A small hole through which the big picture can be displayed.” So where, exactly, lies the impediment, in Athinodorou’s estimation? “Cyprus has an innate lack of values, equating to a hazy understanding of what we practice and how we practice it,” he says. “We have no true branding guiding our expansion and development. Rather, there is this conception that if you throw money at a problem it will dutifully go away.” Emphatically, he asserts: “It will not.” On 15 March 2013, Cyprus awoke to tremors tearing frighten-

ingly through its economy, displacing the status quo as the island – and, in essence, the world – knew it. A few days later the longawaited bailout agreement would be going ahead, with some of the burden for shoring up the island’s beleaguered economy being placed on its bank depositors: an unprecedented move on an unprepared island. Everything was about to change. Aspen Trust, however, sustained by its core, long-defined values, was ready for action. “News broke of the bailing-in of bank depositors at 5am on Saturday, March 15,” Athinodorou recalls. “At 9am, we were in the office, evaluating the situation and planning our action to protect our clients. “We contacted our clients, keeping the ones affected updated every hour on the hour. “We tried to relate the message that, yes, the system is failing, but that Aspen Trust – as the name suggests – could be trusted.” Detailing the key steps taken, Athinodorou explains: “We created a list for our clients and displayed all the possible scenarios that could transpire, so as to translate the changing news of what was happening into a practical action list. We also engaged in absolute transparency, using our mailing list to communicate with all of our clients and other industry stakeholders to keep them informed of developing events.” And what was the reaction? “Our clients did not move their business out of Cyprus! Furthermore, despite the slowdown at the outbreak of the crisis, clients requested services from Cyprus in other jurisdictions, reinforcing our long-term relations based on trust. In certain areas, we actually witnessed growth in 2013.” Meanwhile, 2014 has begun on a positive note. “We managed to convince people that what is happening in Cyprus is easier to predict now, and that worldwide corporations have not deserted the island. The banking sector is still in the process of being stabilised but there has been a changing tide in sentiment, with people once purely critical of Cyprus now praising the island for its resilience. Overall, I’m optimistic that business will pick up.” When pressed as to whether Cyprus has actually corrected the mistakes of its past, Athinodorou replies assuredly with a chilling sense of knowing: “No. On a scale of one to ten, perhaps we’re at 3½ – maybe 4 at a stretch. Retrospective vision is admittedly always the clearest, but I’m already wondering whether we’re trying to reconstruct what we lost by using the same methods that got us here in the first place, and one can only conjecture as to the ramifications of this. “I’m not sure we know it yet, but we can’t realistically expect to move forward and solve our problems by using the same thinking that created them. We need to invigorate our vision and thinking: no shortcuts; only grassroots changes.” I leave Aspen Trust intent on educating myself further. Upon researching the aspen tree, I discover that, whilst individual trees’ life-spans are capped at some 150 years, the root system of an aspen colony is long-lived, resulting in the creation of ancient woodlands, boasting 80,000 years, in certain cases, of surviving and thriving. Moreover, with the root systems penetrating the earth to extraordinary depths, aspen forests are protected from otherwise destructive fires: new sprouts burst forth from the ashes once the flames have subsided, and the aspen forest endures indefinitely. What’s in a name? Everything, it seems.

the international investment, finance & professional services magazine of cyprus

Gold 49

All About

People

Dr Mike Balm

corporate finance

ACCEPTING MISSTEPS ON YOUR WAY TO success may seem counterintuitive. However, Dr. Mike Balm, Managing Director of Emergo Wealth, is adamant that learning from one’s mistakes is intrinsic to the building of one’s ‘home’, one’s company, and that it is precisely this framework that will be infallible come rain or shine. In the meantime, whilst Cyprus weathers its worst economic storm in recent history, companies would do well, Balm suggests, to get their affairs in order so as to emerge stronger. And in every company, he says, it’s all about people, understanding and knowing how to manage them. By Chloe Panayides, Photograph by Jo Michaelides

Gold: Considering Emergo’s history and profile, you seem to be in the habit of thinking big, whilst paying attention to the smaller details. Mike Balm: Emergo is indeed a multifaceted organisation, boasting over 30 years of experience in investments. The group is comprised of three key components: venture capital services, private equity, and the newly-formed wealth function. We were one of the first Canadian companies to establish a presence in Cyprus. Considering its location, Cyprus was the obvious choice to base our operations – for fiscal and logistical reasons – allowing for interaction with companies in surrounding countries. One of our first company collaborations out of Cyprus was with a Russian oil services entity. We have made numerous investments over the years, and have contributed greatly to Cyprus in various ways. Emergo Wealth was established in the latter months of 2013. It has, in essence, emerged from this duality we hold dear of honouring expansion, and thus being forward-thinking, as well as taking care, first and foremost, of one’s home: paying attention to the details that will make or break a company when external economic tides change. Time and practice have allowed for the ever-enriched experience of our personnel, concurrent to the changing needs of clients: amalgamating these two resulted in the birth of Emergo Wealth.

financial services, spanning portfolio and wealth management advisory, corporate finance and management consulting, brokerage and research.

Gold: Can you give an example? M.B.: The most common situation I witness far too often is that when trying times emerge, companies are all too quick to dismiss important aspects of their make-up, such as employee incentives and management, spanning from executive compensation to pension plans. Employees are a vital investment of one’s company and key to the company’s success; to negate the worth of the people you have is invariably detrimental. It is precisely this disorganisation – of structure and core values – that makes it hard for many companies to survive an economic downturn and, in particular, to raise instrumental capital when necessary.

Being the founder of a company doesn’t automatically entitle that person – in the light of experience and education – to run the show

Gold: The needs must be fairly pronounced, considering Cyprus’ ailing economy. Isn’t it risky to be launching a new initiative when times are currently so trying? M.B.: Despite the incredulity towards new ventures borne by the fact that the island’s economy is in turmoil, Cyprus is, rather, ripe. It is absolutely the right time for the founding of Emergo Wealth, considering the services we will be offering, namely highly-personalised

Gold: Initially, what direction will you be taking? Will you be focused exclusively on Cyprus? M.B.: Whilst the reaction to the establishment of Emergo Wealth has far surpassed our expectations, we will, initially follow a measured growth approach, focusing primarily on Cyprus. Having said that, we are a global company, so the possibility of pursuing other opportunities further afield is always open. Gold: So how does your experience translate specifically to the Cyprus market? M.B.: As a group, we have bought and sold countless companies: we have ‘been there and done that’, so to speak, in every capacity of corporate finance activity. Most importantly, we have made all the mistakes along the way, learning from each one, and can therefore identify with the situation befalling companies in Cyprus at present. In these instances, where times have been overly good and thus taking care of one’s ‘home’ has taken a back seat, experience counts. We can’t fix the economy, but we can help companies prepare, and be prepared, for future downfalls.

Gold: In your experience with international entities, is there a model to be followed? M.B.: Many companies that come to us in need of help may often be aided with some very simple structural changes. The key focus is survival. External conditions – for example, the economy – will get better, without a doubt. The question is: can you hang around long enough? Can you survive the bad times to be able to thrive in the good times? It’s often about isolating the impedimental issues and taking the necessary action, which is a universal truth. Many, unfortunately, don’t recognise their own downfalls, and don’t have a clear picture of their situation to be able to do this. Gold: Given the multiplicity of businesses in Cyprus per household – some 19.5% – it’s clear that the Cypriots have a propensity towards entrepreneurship. Is this enough? M.B.: The entrepreneurial spirit in Cyprus is truly commendable. However, something that needs to be heeded by everybody interested in the industry is that starting a business and running a business are not synonymous: one is an action; the other, perpetual reactions, based on depth of knowledge and experience. In fact, effective operation not only requires clear know-

the international investment, finance & professional services magazine of cyprus

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corporate finance

starting a business and running a business are not synonymous how, but demands it. Inevitably, that means overcoming stumbling blocks and correcting blunders. It’s an invaluable learning curve. We must be just as proud of our failures as we are of our successes. Gold: How far do you feel having a diverse team is integral to the building of this experience that can lend itself to professional tenacity and resilience? M.B.: Having a diverse team is paramount. It is a company’s collective experience that will make all the difference: the whole really is greater than the sum of its parts. There’s a lot to be said for cultural backgrounds impacting professional decisions. For example, I come from a North American perspective, informed by European roots. Overall, we expect things to be more organised and structured. The culture simply isn’t the same in Cyprus. But, the core value to be wrought from using your cultural perspective is not in proclaiming that your way is the right way, but rather being open to understanding what drives your international business partners, and having an open enough mind to learn how best to communicate with them. Gold: You have worked in various roles on various rungs of the professional ladder. How has this aided your sensitivity in communication? Do you feel it’s integral to truly fulfilling the position – not simply acquiring the title – of ‘leader’? M.B: Yes, believe it or not, I wasn’t born CEO of Emergo! I have worked in more or less every role under the sun, in a range of industries. And whilst my days of, for example, working in a cement lab are far behind me, the lessons heeded from these experiences are not. There truly is a right way to communicate with people, and manage them effectively; this notion has been reinforced every step of the way in my career. Most of what I’ve internalised over the years about sound management is on a personal level, as opposed to a business level. Every company is different, from its location and its market to its culture and its people. For a manager to be able to execute his role effectively, he needs, unequivocally, to know his people: what drives them, what inhibits them, how their personal experience will influence their professional decisions, and more. Time and time again, I come to the same conclusion: it’s all about people. A company may have an excellent product, but if the wrong person is at the helm, the results may be adverse. The same is true of the inverse.

Gold: The immovability of authority figures in Cyprus is, for some, a pervading issue. Could it be detrimental in the light of what you’re saying? M.B.: Well, there are two sides to this, I suppose. The first problem I see here is that the practice of rotating a company’s management, which is crucial, is all but absent in Cyprus. By rotating a company’s management, you’re allowing for the process of growth, followed by rationalisation. Cyclically, this process is a strong buffer in safeguarding a business’ success despite external conditions. The second consideration – with Cypriots so prone to founding their own companies – is, precisely, the problem of the founders. Founders are actually sometimes the biggest impediment to their own businesses. They’ve poured their heart and soul into a business, to give birth to it from the ground up, and therefore they feel a sense of entitlement to the head position, even as the company grows beyond the founder’s means. Being the founder of a company doesn’t automatically entitle that person – in the light of experience and education – to run the show. Often, companies require an outside perspective: qualified professionals who aren’t afraid to say what needs to be said, as hard as this may be to hear. That’s part of what we do at Emergo Wealth. We’re not afraid to say the hard things if it helps our clients. Gold: Would it be fair to say that your most prized investment is your clients? M.B.: Certainly, and this is actually a kinship we have with the island. Cyprus is a service economy. There are fantastic service providers here and a very well-educated workforce, which is second to none. Everyone is looking after his/her clients and even though there seems to be too much competition, this is actually good for the market. Gold: What advice do you have for Gold readers looking to invest in 2014 and beyond? M.B.: The only answer I feel comfortable giving is to advise people to invest in what they know and can operate. Professionals should buy something because they think they can utilise it, make it better, profit from it. There are great deals to be had right now, due to the economic downturn. But if you know nothing about buildings and management, then why buy a building? To be successful, people need to know their limitations.

52 Gold the international investment, finance & professional services magazine of cyprus

Gold: By the same token, are there any global trends you anticipate impacting on the Cyprus market in the coming year? M.B.: I suppose the typical path I could go down is to talk about energy developments and the possible solution to the Cyprus problem. But I actually think the biggest consideration for Cyprus, and the Cypriots right now is rationalisation. It’s the process of getting your house in order. A filtering of the market place will inevitably take place, with only the stronger companies remaining. This will create a number of structurally sound companies which, going forward, will put Cyprus on the map, the surviving companies coming out stronger. Basic qualities need to be learnt and internalised, such as proactive cost management and the practice of proper, global diversification. The next time Cyprus experiences an economic downturn – after all, the economy is cyclical in nature – there will be a larger number able to survive and prosper in the recovery process. Gold: And, finally, in keeping with Emergo’s self-proclaimed spirit, that of being adventurers who cannot stop venturing, how do you ensure you are instigators of advancement? M.B.: Well, our research desk was a bold step, and perhaps proof that we’re all closet academics! In truth, however, research is powerful tool, and a key element in facilitating the making of profitable decisions. A thorough understanding of one’s environment is paramount. Companies do not operate in a vacuum and good decisions are made with all of the variables in mind. Similarly we are unable to effectively advise our clients without a thorough understanding of the marketplace. Many people are currently in trouble because they didn’t do their research, and have now been exposed by changing conditions. Research allows for diversification from a global perspective. I don’t want to be pre-emptive, but we’ve planned and worked very hard on our offerings, and the response has already been immense. We have a complete roll-out of services planned for the next 12 months. But, in the interest of our clients, we will not offer any service until we are ready. Our focus is exclusively on offering quality, and thus attaining results for our clients. The key to change is to be ready for change, and this is all we ask from our clients.

intellectual property

IP Cyprus

s an intellectual property (IP) service provider based in Nicosia, Cyprus, which works with clients to develop all facets of IP rights at both a national and international level. As a one-stop shop for any issue pertaining to the registration, protection, licensing and maintenance of IP rights, IP Cyprus also aspires to assist companies in realising the full potential of their IP assets, and therefore offers valuation services and advice on royalty collections.

Youâ&#x20AC;&#x2122;ve Marinos Cleanthous

54 Gold the international investment, finance & professional services magazine of cyprus

Got to Fight for Your Rights

espite being an intangible asset, intellectual property (IP) is perhaps the most valuable component of a company’s makeup: easy to ignore when all is well but almost impossible to fully recover from should it be infringed. IP is, precisely, a right and companies are learning more and more that it is their own responsibility to fight to protect it. Gold spoke to Marinos Cleanthous, IP Attorney and Director of IP Cyprus, about how Cyprus is evolving into a prime IP jurisdiction, a development that may play a key role in rescuing the country from its economic difficulties. By Chloe Panayides, Photograph by Jo Michaelides

Gold: How far is protecting the intellectual property of a business vital to its success? Marinos Cleanthous: IP rights exist almost everywhere: consumers tend to make choices based on, amongst others, the fame and reputation of a product (i.e., choosing one trademark over another), and businesses accumulate income based on the value derived from each trademark. Furthermore, the success of a business might depend on its specific ‘know-how’ or, in very advanced cases, on its patent portfolio. The success of each company depends on its ability to distinguish its goods or services from those of its competitors. Therefore, a successful logo or brand is usually key to achieving this. If it is not protected as a trademark, it will be vulnerable to infringement. New or unique knowledge and the creative expression of ideas is the driving force of successful businesses in the 21st century. Therefore, it follows that safeguarding such knowledge and creative expression from unauthorised use by competitors is becoming increasingly important for developing and retaining a competitive advantage. Generally, the better and more completely a company protects its IP rights, the more successful it will be. Gold: Inversely, what negative effects may come about from neglecting to tend to a business’ IP rights? M.C.: Many companies in Cyprus adopt the rather flippant attitude of thinking that the more famous a brand is, the less chance

it has of being copied and that everything will be ok: infringement of rights won’t happen to them. However, in reality, IP assets are one of the most important (and very often unidentified) assets of a company. Not protecting these assets will make it easy for others to steal your ideas and to infringe your company’s fame. A competitor may pass off your goods or services as its own and this may result in damage to your company’s reputation or alternatively a similar trademark/name to yours may cause confusion among consumers that their products are yours. If these products are of bad quality, then it is very probable that this again will result in damage to your company. If your trademark is duly registered, you are in a much stronger position to quickly and competently attack any such infringement. The protection of the logo, the design or the patent of a company is an investment: costs are low and protection equals peace of mind.

the potential of his/her IP assets and to maximise this potential. We make it our priority to assist our clients at every step to secure the protection of their rights, both at national and international level. This is done with the least amount of hassle and anxiety as possible and, where applicable, with suggested solutions to any obstacles encountered. We use the law as our toolkit to create certainty and resolve issues that could otherwise become a threat to any intellectual property transaction.

Gold: What key services – and experience – does IP Cyprus offer? M.C.: Our team is comprised of dedicated, experienced professionals, who are passionate about IP law and who have decided to promote and encourage innovation rather than to simply follow standard procedure. We offer a one-stop shop for any issue related to the registration, protection, licensing and maintenance of intellectual property rights. However, our services are not limited to the usual assistance expected. Our aim is to help each individual realize

The protection

Gold: What changing trends – if any – have you witnessed in the market regarding IP protection? M.C.: Over the last few years, we have seen that more and more entrepreneurs and companies are paying attention to the protection of their IP rights. It is a fact that the notion of IP is not always understood by many. Five or ten years ago, when you started speaking about IP rights in Cyprus,

of the logo,

the design or the patent of a company is an

investment

the international investment, finance & professional services magazine of cyprus

Gold 55

intellectual property

IP CYPRUS Services include:

real

Trademarks / Designs

fake

The better and more completely a company protects its IP rights, the more successful it will be it was like trying to sell a TV in the United States during the 1930s and the reply was “but I already have a radio!” However, the more educated and experienced heads of business are becoming, the more sensitive they are to the protection of their IP. Furthermore, presently there are mechanisms in place which make it possible to protect your IP easily and cost-effectively. An example of this is the Community Trademark system, where, with one application, you may achieve protection in all the countries of Europe for a period of 10 years. Gold: Why is Cyprus now considered a prime IP jurisdiction? What benefits are offered to businesses? M.C.: Cyprus’ legal and tax framework provides opportunities for it to become a model for the protection and the development of IP rights. The Cyprus IP Box Tax Regime, in place since mid-2012, provides an 80% exemption on royalty income and capital gains upon disposal of IP. Cyprus is therefore an ideal location for the establishment and maintenance of the IP owner as the royalty income will be substantially exempted from taxation in Cyprus. The significant tax exemptions of the IP Box, in addition to the attractive 12.5% Cyprus

company tax rate and the extensive network of double tax treaties that Cyprus has ratified, reconfirms Cyprus’ advantage as a business centre since companies – and particularly the IP owning companies – will receive unquestionable tax savings. Also, according to the World Intellectual Property Organisation (WIPO), Cyprus is one of the most innovative countries of the region. This is mainly for two reasons: firstly, the fact that it adopts EU legislation fully and, secondly, the fact that the advantages of our corporate law attract a number of very important players to the market. This is the reason why more and more international brands are choosing Cyprus as a base for their businesses. Gold: Cyprus has endured a difficult year. What opportunities do you feel IP practices may bring to Cyprus in 2014 and beyond? M.C.: The economic crisis can be a great opportunity for the development of a new model of business. IP rights and their tax regime in Cyprus can attract a number of very significant investors and, in this way, play an important role to the economic recovery.

56 Gold the international investment, finance & professional services magazine of cyprus

• Filing national, community and international registration applications; • Conducting availability searches of potential trademarks and designs; • Filing actions relating to trademark registrations; renewals and transfers of ownership and or any changes to ownership; • Preparation of replies and submission of evidence supporting the registration of a trademark in Cyprus; • Preparation of considered replies as appropriate for provisional refusals brought by the Cyprus Trademark Office in relation to International applications; • Assistance in anti-counterfeiting efforts.

Patents

• Filing national, EPO and PTO registration applications; • Validating patents in Cyprus; • And assistance in the prosecution and protection of patents.

• Preparation and filing of evidence documents in relation to the copyright ownership; • Assistance in various transactions involving copyrights; • Representation of clients in copyright litigation cases against piracy.

IP transactions

• Licensing, transfer, assignment transactions; • Negotiating and advice on IP transactions.

IP litigation

• Representation and assistance in patent, trademark and copyright disputes before the Cyprus Courts.

Domain Names

• Registration and protection of domain names in Cyprus.

Registration of Cyprus companies

• For purposes of owning intellectual property rights.

Special SuPPLEMENT

INTERNATIONAL BANKS

in Cyprus As a leading regional financial and professional services centre, Cyprus is home to a large number of international banks, notably subsidiaries and branches from EU and non-EU countries. On the following pages, six leading international banksÂ present their services to clients based in and outside Cyprus.

SPECIAL SUPPLEMENT

Alpha Bank Cyprus Ltd

he presence of Alpha Bank in Cyprus began in 1998 with the acquisition of Lombard Natwest Bank that was later renamed Alpha Bank Ltd and later still Alpha Bank Cyprus Ltd. Alpha Bank Cyprus Ltd is a full subsidiary of the Alpha Bank A.E. Group, which is one of the leading groups of the financial sector in Greece. The Alpha Bank Group is extensively active in the international market with a dynamic presence in Cyprus, Romania, Bulgaria, Serbia, Albania, F.Y.R.O.M and Great Britain. The parent company and main Bank of the Group is Alpha Bank A.E., which was founded in 1879 by John F. Costopoulos. Alpha Bank A.E. is one of the largest banks of the private sector and constitutes a consistent point of reference in the Greek banking system, with a wide Network of over 1,200 service points in Greece. Through its Network and Group Companies, it offers a wide range of high-quality financial products and services, including retail banking, SMEs and corporate banking, asset management and private banking, the distribution of insurance products, investment banking, brokerage and real estate management. Significant recent milestones in the long and successful course of the Group are: • The acquisition of the entire share capital of Emporiki Bank on 1.2.2013 • The successful recapitalization of the Bank, on 31.5.2013, with oversubscription of the required private-sector participation in the Rights Issue, which resulted in the preservation of Alpha Bank’s private character

• The completion of the legal merger by absorption of Emporiki Bank on 28.6.2013 and the creation of the integrated Alpha Bank. • The completion of a capital increase of €1.2 billion (including share premium account) on 31.03.2014, through a private placement with qualified investors. Since the beginning of its operations, Alpha Bank Cyprus Ltd has based its growth on prudent management, its excellent knowledge of the local and international environments in which it operates, and the long-term trust relationships it builds with its customers and employees. Through a modern Branch Network in all cities of Cyprus, supplemented by the alternative electronic channels of Alpha Web Banking, Alpha PC Banking, Alpha Mobile Banking, Alpha SMS Banking and Alpha ATM Banking, the Bank provides competitive products and flexible solutions that cover the entire banking field. Reliability, integrity, professionalism and quality service are an integral part of Alpha Bank Cyprus Ltd’s retail strategy, which focuses on the provision of banking services and products that offer added value to its customers and help them reach their goals. Today, the Bank’s efforts focus on facing the challenges created by the wider financial environment, by utilizing its long experience, as well as the Group’s specialized knowledge, and the possibilities offered by new technologies to constantly improve its services and continue on its course despite the current difficult economic climate. With regard to its international customers, the Bank’s International Banking Services Units are staffed with experienced and well-qualified executives, supported by advanced systems and processes, ensuring the

provision of high quality and efficient service. As an indication of its high standards, the Bank has received several Quality Recognition Awards by International Financial Institutions for its excellent service in processing international payments. In addition, the Bank operates a representative office in Moscow, which provides information and promotes Alpha Bank Cyprus products and services to the Russian Market. The Bank also maintains a strong relationship with prominent banks and financial institutions around the world, ensuring the best international service for its customers. Alpha Bank is not only a reliable banking associate but also a responsible and sensitive Social Citizen. With utter respect for society and the environment it operates in, the Bank is leading the Corporate Social Responsibility sector by regularly organizing and supervising local community initiatives which support society, culture and the environment. Within the framework of social contribution it makes human values its highest priority and ensures social wellbeing, environmental protection as well as social and cultural improvement with actions which offer further value to its customers, its staff and the wider social unit.

Contact Information

Alpha Bank Cyprus Ltd Head Office: 3, Limassol Avenue, P.O.Box 21661 1596 Nicosia, Cyprus Tel: (+357) 22888888 Fax: (+357) 22773788 Website: www.alphabank.com.cy e-mail: marketing@alphabank.com.cy,

SPECIAL SUPPLEMENT

Barclays

he last two years have seen challenges arrive thick and fast in the Cyprus banking sector. Against a backdrop of significant change within the wider global financial services landscape, Barclays in Cyprus has recognised the need to review our strategy and to refocus our offering. The changes being made locally are part of a new global strategy announced by Barclays Wealth and Investment Management last year. The strategy is built upon three key pillars: Firstly, building on our existing strengths; secondly, competing only “where we believe we can win” and thirdly; simplification. The result? A new look Barclays with a more closely defined business offering.

What’s new?

With a presence in Cyprus for over 75 years, we are building on a tremendous heritage and association with the island. Barclays offers a wide range of international corporate banking and wealth management services. Under our new approach, our offering will focus on key intermediaries and international direct corporate relationships. Our locally based Relationship Management teams are working closely with clients to explain the changes we are making, as well as the breadth of solutions and services offered by the Barclays Group, which includes: Banking • Accounts in a range of currencies including Sterling, Euro, US Dollar Savings • Call accounts, notice accounts, fixed deposits Cash management • Including a range of integrated payment solutions Foreign Exchange and Treasury • Tailored service to manage large currency conversions while spreading currency-exchange risk. Investment Solutions • Structured products, funds and brokerage As part of the new Wealth and Investment Management strategy and to simplify how we operate, Barclays

has announced its intention to serve a refocused set of 70 countries, including Cyprus. Under the new business model for Cyprus, we have highlighted our commitment to retaining relationship management capabilities in Cyprus, meaning that our clients are supported by our local team. Meanwhile, clients will continue to benefit from the strength and connected expertise of the Barclays Group. Clients are understandably concerned about the challenging market environment in Cyprus. Our local presence means we have the relevant insight and knowledge to help our clients, offering solutions to support them through these times. And, as part of the Barclays Group, we are able to offer the safety, stability and reassurance of a much coveted A credit rating (Standard & Poors)*. In addition, Barclays Group is highly regarded in terms of its economic and product research capability. Its globally recognised research is often provided free of charge to our clients, to enable them to make the best investment decisions.

A spotlight on cash management

We offer a wide range of solutions to intermediary and corporate clients. Cash management is just one area which is proving popular as companies look for ways to improve operational efficiency. Our cash management offering benefits from a team of specialists who lead clients through a consultative and collaborative process, enabling us to design individual solutions tailored to our clients’ specific immediate and long-term cash management needs. Once a solution has been mutually agreed, our dedicated implementation team ensures its efficient delivery.

Where to find us

Barclays is based in new premises in Nicosia and Limassol. In Nicosia, we are located in Globe House, a recently constructed building in the Central Business District which boasts spacious open plan office space, individual offices and a client meeting suite. In Limassol, we are located on the ground

floor of the new KPMG building, Agias Fylaxeos. Both offices offer significantly improved facilities and clients have welcomed the improved experience of visiting the team in a bright and fresh working environment. Hans Wolff, Head of Barclays Wealth and Investment Management in Cyprus, underlines the business’ commitment to the island: “We continue to recognise Cyprus as an attractive place to do business and remain committed to developing our business here. As we refocus our activities in line with our new strategy, we are excited about the opportunities that lie ahead for Barclays and for our clients.” Barclays offers banking, wealth and investment management products and services to its clients through Barclays Bank PLC and its subsidiaries. Barclays Bank PLC is registered in England and authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered No. 1026167. Registered Office: 1 Churchill Place, London E14 5HP. Barclays Bank PLC is regulated by the Central Bank of Cyprus in the conduct of its banking and investment business in Cyprus. * http://group.barclays.com/about-barclays/ investor-relations/debt-investors/creditratings/current-ratings Barclays offers banking, wealth and investment management products and services to its clients through Barclays Bank PLC and its subsidiaries. Barclays Bank PLC is registered in England and authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered No. 1026167. Registered Office: 1 Churchill Place, London E14 5HP. Barclays Bank PLC is regulated by the Central Bank of Cyprus in the conduct of its banking and invest-

Contact Information

Barclays

Head Office Address: 1 Churchill Place, London, E14 5HP, UK Cyprus Main Office: Barclays, Globe House, 23 Kennedy Avenue, Nicosia 1075 Postal address: Barclays, PO Box 27320, Nicosia 1644 Telephone: Nicosia Office (+357) 22654474, Limassol Office (+357) 25208000 e-mail: cyprus.enquires@barclays.com Website: www.barclays.com/wealth

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A more direct approach to optimal cash management If the pinnacle is optimum efficiency, we recommend taking the direct route. Equipped with a range of leading integrated cash management solutions fitted to your unique specifications, we can facilitate the control of money throughout your organisation. To keep on top, simply call +44 (0)207 574 3247 or speak to your Relationship Manager. Alternatively, you can find out more by visiting us at barclays.com/wealth/cash

Wealth and Investment Management Barclays offers banking wealth and investment management products and services to its clients through Barclays Bank PLC and its subsidiary companies. Barclays Bank PLC is registered in England and authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered No. 1026167. Registered Office: 1 Churchill Place, London E14 5HP. Barclays Bank PLC is regulated by the Central Bank of Cyprus in the conduct of its banking and investment business in Cyprus.

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SPECIAL SUPPLEMENT

FBME Bank

BME Bank is an International Commercial Bank. The Cyprus branch was established in 1982, which makes FBME one of the island’s longeststanding international banks. For over three decades, we have built on our sustainable business strategies through providing products and services along traditional banking lines. This has resulted in strong financial growth and liquidity, consequently enabling us to provide our Partners with secure and reliable banking solutions. Having a solid base, FBME specialises in cross-border transactions and commercial trading facilities in addition to:

• International Payment Services • Swift Account Services • Credit Facilities • Trade Finance • FOREX Trading Facilities • E- banking • International Card Services Solutions

Our Philosophy Our philosophy is based on our Mission Statement: “To develop and grow in partnership by providing customised banking solutions for our clients”. This dedication, combined with client selectivity and a keen sense of opportunity, is the foundation for us to build and maintain strong and enduring client relationships and ensure a solid asset base. At FBME we believe that a great bank makes its clients feel special, and we endeavour to foster that feeling.

Corporate Social Responsibility At FBME Bank, we believe firmly that one should give back to the society in which it operates. We are in the business to serve people, to use and employ our ingenuity to improve the lives of people around us. And we also believe that the time is always right to do what is right because the difference between who you are and who you want to be is the work you put in!

Why FBME? • Strong client focus and a dedicated customer service team • Personalised client care • Regular client contact by senior managers • Confidentiality throughout the banking relationship • Efficient processing of new accounts, ensuring speedy turnaround times • Our team collectively can converse in over 30 languages • Our working hours allow access to different global markets • Our priorities are client satisfaction and client care

Contact Information

FBME Bank Ltd

90, Archbishop Makarios III Ave, 1077 Nicosia, Cyprus P.O. Box 25566, 1391 Nicosia, Cyprus Tel: (+357) 22888444 Fax: (+357) 22888555 e-mail: banking@fbme.com Website: www.fbme.com

SPECIAL SUPPLEMENT

IBL Bank SAL

Ghada Christofides, Branch Manager

BL Bank SAL is amongst the top Lebanese banks. The Bank traces its roots back to 1961 and has hence been at the service of its clients for more than fifty years. IBL Bank continued its growth in 2013, anchoring the Group in the top Lebanese banks, known as the Alpha group. In fact, total consolidated assets grew by 9%, with customers’ deposits remaining the main growth driver as they registered as well a 9% growth in 2013. In parallel, on the lending front, customers’ loans and

advances rose by 6% during the year 2013, with loans-to-deposits ratio reaching 21% showing the high liquidity IBL Bank enjoys – the second highest net primary liquidity to deposits among the top Lebanese banks according to Bankdata, an independent analyst of financial information of Lebanese banks. These outstanding results were not at the expense of profitability as IBL Bank’s core business and high assets quality continued to ensure a robust revenue stream, as shown by its Return on Average Equity (ROAE) of 17.1% and Return on Average Assets (ROAA) of 1.17% ranking second in both indicators while the cost-to-income ratio remained as low as 36%, the lowest in the Alpha group, according to Bankdata. In addition to these results, IBL Bank succeeded in solidifying its long term strategy by achieving important milestones: enhancing its brand awareness, strengthening its human capital, anchoring IBL Bank as an international bank through the regional network in Lebanon (19 branches), Cyprus (Limassol), Iraq (Erbil and Baghdad) and the establishment of a sister bank IBL Invest which offers investment banking, private banking, and asset management services. IBL Bank is committed to all its stakeholders, shareholders, customers and employees. The Bank’s Head Office and main branch are located in Achrafieh, Beirut.

IBL Bank in Cyprus

IBL BANK SAL Limassol branch opened in January 2009, offering all traditional banking services such as credit facilities, trade finance and acceptance of deposits in all major currencies. After the events in March 2013, and as an expression of its commitment to continue serving and sup-

porting its local clientele, IBL Bank Limassol Branch opted to remain outside the Catalogue. The market has favourably responded to IBL Bank’s unique positioning and products offering and has shown strong interest in the enhanced services provided by IBL Bank.

Ghada Christofides | Branch Manager Tel. (Direct): (+357) 25504555 e-mail: gchristofides@ibl.com.lb

Jacovos Georgiou| Deputy Manager Tel. (Direct): (+357) 25504499 e-mail: jgeorgiou@ibl.com.lb

Maria Christophi | Senior Credit Officer Tel. (Direct): (+357) 25504500 e-mail: mchristophi@ibl.com.lb

Hussein Sayed | Customer Service Officer Tel. (Direct): (+357) 25504433 e-mail: hsayed@ibl.com.lb

Contact Information

IBL BANK SAL

Cyprus Branch: 214, Arch Makarios III Avenue, 1st Floor, CY 3030 Limassol, Cyprus Postal address in Cyprus: P.O. Box: 54273 CY 3722 Limassol, Cyprus Swift Code: INLECY2L Tel: (+357) 25504444 Fax: (+357) 25504450 Website: www.ibl.com.lb e-mail: ibl.limassol@ibl.com.lb Headquarters in Lebanon: Charles Malek Avenue - Al Ittihadiah Bldg Achrafieh, Beirut 2071, Lebanon Postal address in Lebanon: P.O.Box 11-5292 Beirut, Lebanon Tel: (+961) 1200350-334102 Fax: (+961) 1204524 Swift Code: INLELBBE Website: www.ibl.com.lb

CYPRUSpr

25 50 4444 www.ibl.com.lb

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SPECIAL SUPPLEMENT

OJSC Promsvyazbank PSB is a universal financial services provider engaged in commercial banking, retail banking, private banking, investment banking, and SME banking. As of October 1, 2013, PSB offered services to about 1.4 million retail and over 94,000 corporate clients. Today, PSB branches operate in all economically developed regions of Russia, and a wide network covers Moscow and Moscow region. In addition to that, PSB also has a branch in Cyprus (Promsvyazbank-Cyprus) and representative offices in China, India, Ukraine, and Kazakhstan.

Custom–made products

The Bank you can trust

Open Join-Stock Company Promsvyazbank (PSB) is one of Russia’s leading privately owned banks, successfully operating since 1995. In terms of assets PSB ranks among the top 10 largest Russian banks (Interfax Information agency) and enters the Top 500 Banker’s Brands (The Banker magazine).

Promsvyazbank-Cyprus was established in 2002. During the 13 years of its successful operation, Promsvyazbank-Cyprus has created an extensive client base and has extended its presence in the financial market of Cyprus. The client base of Promsvyazbank-Cyprus comprises of big corporate clients, represented by the wide range of economic sectors among which are telecommunication and IT, investment activities, international trade, aviation, shipping, fishery, etc., external trade participants and European licensed finance companies, private banking structures of the most developed financial centers in Europe and Asia. Using a widespread branch network of PSB in Russia, Promsvyazbank-

Cyprus appears to be a connecting link between Russian and international business, providing opportunities to invest into Russian economy, organization and financing of companies’ foreign trade activity. Many products being similar with the ones offered by PSB in Russia, nevertheless, are modified under the requirements of the Cyprus legislation. A separate product range is formed for each customer segment: various financial instruments, flexible schemes for sight account balances, cash management services and FX-plans, escrow services and letters of credit, card products, systems of virtual pooling etc. The main goal of PromsvyazbankCyprus is to offer “smart products” and high quality service at affordable prices. Promsvyazbank-Cyprus periodically conducts customer surveys, and their results prove that this goal is achievable.

Contact Information

OJSC Promsvyazbank, Cyprus Branch Head Office in Cyprus: 35, Grigori Afxentiou street, 4003 Mesa Geitonia, Limassol, Cyprus Tel: +357 25 272 000, Fax: +357 25 820 378, Website: www.psbank.ru E-mail: cyprus@psbank.ru

SPECIAL SUPPLEMENT

Piraeus Bank Cyprus

Piraeus Bank Group

George Appios, Managing Director & CEO

Founded in 1916, Piraeus Bank operated in Greece as a private credit institution for many decades. It was in state ownership for the period 1975-1991 until it was privatized in December 1991. Since then, it has rapidly grown in size and activities, and today it is the leading Bank in Greece with a 30% market share in terms of loans and 29% in terms of deposits. Headquartered in Athens, Greece, with offices in 10 countries around the world, Piraeus Bank Group offers a full range of financial products and services to approximately 7 million customers. Total assets of the Group amounted to €92 billion, net loans to €62 billion and customer deposits to €54 billion on December 31, 2013. Piraeus Bank Group, on December 31, 2013 had an international presence consisting of 1,453 branches focused in Southeastern Europe and Eastern Mediterranean. In particular the Group operates in:

Piraeus Bank Presence

No. of Operating Units

Greece

1,037

Cyprus

Bulgaria

Albania

Serbia

Ukraine

Romania

140

Egypt

Piraeus Bank Cyprus

In Cyprus, Piraeus Bank started operations in 2008 through the acquisition of the local Arab Bank operations and the establishment of Piraeus Bank (Cyprus) Ltd, a wholly owned subsidiary of Piraeus Bank S.A.. Licensed by the Central Bank of Cyprus and having the support of a leading Greek Institution Piraeus Bank Cyprus has developed into a universal bank, offering the whole spectrum of financial products and services. At the end of December 2013, the Bank had a balance sheet in excess of €1 billion, with net loans of €0.7 billion and deposits of €0.9 billion. Despite the currently adverse conditions in Cyprus, the bank continues to have strong capital adequacy and liquidity and, as a member of the largest Banking Group in Greece, it is in a position to take initiatives that support its sound business plans. With a network of 20 branches and business units all over Cyprus and more than 300 employees, we offer a full range of banking and investment services, including:

• International Banking • Corporate Banking • Retail Banking • Wealth Management • Custody Services • Treasury Sales • Trade Finance Services • Escrow Services • Insurance Brokerage

International Banking Unit

Our client philosophy puts you first At Piraeus Bank (Cyprus) Ltd., we recognize that each client is exclusive and has unique needs. Therefore, a personal relationship manager is dedicated to assist you achieve your business objectives with convenience. Moreover, a team of highly qualified and experienced professionals ensure excellence in service with confidentiality and security. We welcome businesses from around the world to bank with us and do our best to communicate with you in your own language, whether that is English, Greek, Russian, Ukrainian, Armenian, German, French, Serbian or Arabic. Our international customers can take advantage of the multiple benefits of Cyprus as a regional financial centre with distinctive advantages and significant tax incentives. Always there for you… Knowing that time is essential and in an effort to accommodate the time difference amongst countries around the world, Piraeus Bank International Banking Units are at your service with extended working hours, from Monday to Friday, 07:30 to 18:00 Cyprus time. Moreover, we can execute your international payments, with same-day-value, within extended cut-off times. You may also obtain customer support on more general banking issues, such as Internet banking, card services, etc, Our Customer Service Centre can be reached on 800 11 800 / +357 22 575555 (from abroad) 24 hours a day, 7 days a week

Products & Services for International Customers Payments We can process your payments with excellence in service, having been officially recognized by the receipt of Deutsche Bank’s award “Straight-Through Processing (STP) Excellence Award” in both USD and Euro for the last four consecutive years. By processing your payments through us, you can efficiently take advantage of:

Cards Piraeus Bank Cards are designed to meet your personal and business needs effectively and enhance flexibility in your daily transactions. With the Chip & PIN technology, you now have extra security and access to your money throughout the world. We offer you the following type of cards:

• Personal or Business Platinum Debit Cards

• Personal Shop & Cash Debit Card with over-the-counter issuance

urrent accounts in all major currencies • Visa Business Credit Card for advanced •C control and monitoring of your business • Payments in over 42 currencies transactions • Competitive pricing with no charges Miles & More personal Visa Credit Card • for same-day-value transactions

• Extended cut-off time for outgoing

payments for same-day transactions, until 16:00 for USD and 15:00 for EUR

Internet Banking Through our multi-country award winning WINbank platform, our products and services are accessible 24 hours a day, 365 days a year.

• WINBANK WEB BANKING - Bank via your Personal Computer (PC / Mac) by using any browser

• WINBANK MOBILE BANKING - Enjoy the experience of performing your banking transactions via your Mobile Phone

• WINBANK PHONE BANKING - Bank

via Telephone round-the-clock. Call us 24/7 and interact with a live agent to perform your transactions

• WINBANK for CARDS - “Connect”

to your credit cards and view all available details related to them at any time of day without the need for registration. Simply owning a Piraeus Bank Credit Card is enough

which rewards usage with mile redemption from more than 40 airline partners and 1,100 destinations

Trade Finance Trade Finance Department accommodates your business requirements through a comprehensive product range, such as:

• Import/Export Letters of Credit • Letters of Guarantee • Inward/Outward Collections Wealth Management

Our Wealth Management Department offers specialized banking and investment services to high-net-worth individuals, both in Cyprus and abroad. With the support of our experienced relationship managers, customers can select and create their own international investment portfolios. Simple, easy & secure! Our services include:

• Access to the major stock markets

around the world and the global fixed income market (i.e. Government and Corporate bonds in developed and emerg-

ing markets in all major currencies).

• A truly open architecture platform with

easy access to thousands of Equity, Fixed Income and Alternative Funds

• Foreign Exchange and structured treasury products

• Credit & Real Estate lending locally and abroad

Custody Services Our Custody Services Unit offers a full range of global custody services to individual and institutional clients in cooperation with leading global custodians, providing access to all major international markets.

Escrow Services With an experienced banking team, empowered with legal experts, we can provide tailormade Escrow Agreements with efficiency and reliability. The participation of Piraeus Bank Cyprus as an Escrow Agent can add safety and security to your transactions.

Treasury Our Treasury serves as the Bank’s access to the financial markets by actively participating in the money, foreign exchange, bonds and derivatives markets. Treasury maintains an established client base which underpins the distribution of a variety of investment and risk management products addressing specific customer needs. Our Treasury provides a full range of products and services in the following four major areas:

• Foreign Exchange (FX) products: FX Spots, FX Forwards, FX Swaps.

• Interest Rate Risk Management Products. • Interest Rate Swaps (IRS), Interest Rate Caps and Floors, Cross Currency Swaps.

• Investment Products: Time Deposits, Fi-

duciary Deposits, Greek and Cypriot Government Treasury Bills & Bonds, Buy-SellBack Repos of Greek or Cypriot Bonds, Eurobonds, etc.

Contact Information

PIRAEUS BANK (CYPRUS) LTD Head Office in Cyprus: 1 Spyrou Kyprianou Ave., 1065 Nicosia, P.O. Box 25700, 1393 Nicosia Telephone: 800 11 800 Calling from abroad: +357 22 575555 Fax: 22 767741 Email: info@piraeusbank.com.cy Website: www.piraeusbank.com.cy

B2B Matchmaking

he Cyprus Chamber of Commerce and Industry (CCCI) is a private, financially independent corporate body representing the local business community whose interests it promotes to the government and the House of Representatives. It has long been involved in promoting Cyprus business abroad and attracting foreign entrepreneurs to Cyprus but, since 1 January, a new dedicated Department of International & Public Relations has been operating under Senior Director Leonidas Paschalides. Lia Riri and Theo Andersson are the two highly engaging CCCI officers charged with running the new department and they spoke enthusiastically to Gold about their mission, which, in part, concerns the many interna-

New CCCI Department Boosts Business Networking By John Vickers, Photograph by Jo Michaelides

tional business associations that operate in Cyprus. “We deal with promoting relationships between the business communities of Cyprus and about 30 countries,” said Lia Riri, “and this means organising missions abroad, holding seminars and training programmes and, in general, facililating cooperation between the countries in any way we can.” Theo Andersson elaborated: “The various business associations are basically special interest groups. The Chamber of Commerce didn’t create them – they came to the Chamber wanting to operate under its auspices. They have a Board of Directors that meets typically every two months and they pay a membership fee to the Chamber which gives them access to our networks and to secretarial services in instances where they don’t have their own permanent staff.” These associations were all in place before

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1 January but, said Riri, whereas they were previously under the Department of Trade and Services together with a large number of other professional associations, they have now been brought together and given greater significance and attention. “Putting all the business associations in one department allows us to focus better on them,” agreed Andersson. Not all 30 associations are as large or as active as, for example those of the UK, the US, Russia and China but that does not mean that the smaller ones will not receive equal attention. However, in some cases, organising trade missions is no easy task. “Egypt, Libya and Syria, for example, have well-known problems at present so there is not a lot we can do,” admitted Lia Riri. “We are waiting for Egypt, in particular, to stabilise so that we can make a move and we want to make sure that we are

business relations

People used to be content to be part of a trade delegation without expecting any tangible benefits. Now they won’t consider it unless they feel they are going to have some good-value B2B meetings prepared because, once the time is right, if we don’t approach the business community there, others will.” Andersson agreed and gave another practical example: Australia. “There is a lot to be said for setting up a Cyprus-Australia Business Association,” he said, “but we wouldn’t be able to go there very often and people may not be willing to spend a great deal of money on getting there, given how far away it is.” It is understood that a Cyprus-South Africa Business Association may be the next to be set up under the auspices of the CCCI but no-one is ready to make an official announcement of such a decision. The ultimate aim of the CCCI and, in particular, of this new Department is to promote Cypriot business and Cyprus as a business centre in all respects. Does that mean helping Cypriots take advantage of opportunities abroad or attracting foreigners to invest here? “It’s both,” came the answer in unison. “But things are changing,” added Andersson. “Financial services have always been a dominant sector of the economy and they would also constitute a dominant part of the membership base of each of the business associations. Our role was to facilitate “matchmaking” between institutions here and abroad and it still is but if we look at the latest delegations, which the President has been spearheading into the Gulf region, for instance, they comprise a very diversified group of business people. They still include financial services firms and banks, of course, but now companies and organisations from a much broader range of business activity are showing interest in these trips.”

Before we can really start to attract serious investment, we need to sort out the image of Cyprus abroad

“There has been a definite change over the last 12 months,” Riri confirmed. “Where the members of the associations were happy to see them as informal gatherings of likeminded individuals from the same country, they now want us to organise more events and place a greater focus on Business-toBusiness meetings. We are receiving many more requests to find companies abroad for investment deals, joint manufacturing deals, etc.” “It’s the same with the trade missions,” her colleague added. “I have been dealing with them for the past three years and the main change is that where people used to be content to be part of a trade delegation without expecting any tangible benefits, now they won’t consider it unless they feel they are going to have some good-value B2B meetings. It is through these that contacts are made, if not deals at first, and it is through them that foreign investment will come in. It means more work for us, of course, but that’s OK!” One of the most frustrating parts of Riri’s and Andersson’s work is the fact that it is extremely difficult to measure whether they have been successful or not. “We have a lot of interaction with business people,” said Riri, “so we do receive a certain amount of general feedback about whether things have gone well or not but they are not keen to reveal much information about the actual deals they do, for reasons of business confidentiality.” Andersson echoed this view: “If they have any success, they’re not going to come and tell us about it, unfortunately. After we went to Qatar, for example, there was no immediate feedback but then we started to see stories in the news about this company and that getting contracts there and we have to assume that it was a direct result of that trip and contacts made on it. As Lia said, they let us know if a mission was successful and it would appear that they are much happier now than in the past, as far as the organisation is concerned.” It sounds as if the CCCI trade missions are very similar to those organised by the Cyprus Investment Promotion Agency (CIPA) whose objectives are, to some extent, the same. Is there cooperation with CIPA

and other bodies such as, for example, the Cyprus Tourism Organisation? “We have very close relations with CIPA,” said Lia Riri. “They participate actively in many of the trade missions we organise. We also cooperate with the CTO, though not as closely, in areas such as special interest tourism. But I believe that before we can really start to attract serious investment, we need to sort out the image of Cyprus abroad and this is part of what we are trying to do here and the Government is working on too.” So what is the new Department’s first year going to be dealing with? “There are going to be lots of trade missions in 2014,” Theo Andersson told Gold. “It may not be a record-breaking year for them in terms of numbers but there is much more preparation involved than before. We are also taking a keen interest in the Transatlantic Trade and Investment Partnership (TTIP) negotiations to see what the consequences may be for Cyprus and, hopefully we will have a trade delegation going to New York and Toronto later this year.” “We are also arranging public events,” added Riri, “including bringing important speakers from abroad to Cyprus to share their experiences of, for example, similar financial crises in their own countries. We are also seeing great interest from Lebanese banks in Cyprus and that is an area in which we may play a role this year.” Asked to sum up their mission and message, Lia Riri said, “I want to ensure that the members of the international business associations that we are working with feel that they are getting good value from their membership of their association and of the Chamber.” Theo Andersson concluded: “Our message to business people reading Gold is this: ‘Come to the Chamber if you are looking for foreign partners or if you want to know where you should focus your export strategy. Come here and make use of our contacts. The Enterprise Europe Network is a free service that will connect you to 600 offices, mainly in Europe but outside too. Use your Chamber of Commerce and we’ll do everything we can to help.”

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No Man is an Island Esimit Europa: committed to connecting countries By Chloe Panayides

72 Gold the international investment, finance & professional services magazine of cyprus

esimit europa

he sea has long endured in worldwide culture as the embodiment of dynamism, destruction and deliverance. Vessels traversing its waters are, at the same time, at its mercy and majesty, like countries that may diminish or flourish depending on changing economic tides. Igor Simčič, founder of the Esimit Europa project – which aspires to promote collaboration throughout Europe, encouraging a common identity courtesy of its yacht that sails competitively under the European flag – certainly believes that no man is an island and that teamwork and solidarity are instrumental to the process of prospering. “A sailing yacht not only represents countries and continents – in that it is a

symbol of collaboration, of working together to achieve results – it connects them,” Simčič explains. The Cyprus-flagged yacht Esimit Europa 2 currently serves as the incarnation of these ideals, with its multinational team from ten different countries – composed of Olympic Games medalists and multiple winners of the America’s Cup and Volvo Ocean races – sailing it to success in numerous renowned races, promoting the ideal of a united and resilient continent. Simčič shares his belief that whilst Europe is one of the wealthiest and most developed continents in the world, each European country alone is too small to be competitive globally: “I strongly believe that the future of the European continent – in order to be globally successful – will depend on good collaboration, not only within the EU, but also further afield between, for example, the EU and Russia.” So what was the driving force behind the inception of the project, which now has its headquarters in Cyprus? “My inspiration was three-fold,” Simčič begins, “drawn from influences that marked my life from a very young age. “Firstly, I come from a city bordering Slovenia and Italy, living on one side, and working on the other. Crossing it every day encouraged the development of a vision: that of providing a symbol representing the blurring of borders. “With this vision in tow, I turned to my

Cyprus offers a very friendly environment for internationallyoriented companies and projects the international investment, finance & professional services magazine of cyprus

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esimit europa

childhood experiences as to how to materialise this vision. My uncle was a successful sailor and skipper on the famous Helisara sailing yacht. When I was 17, I served as a crew member on the Helisara and, since then, I have appreciated that sailing is much more than just sports and competition. Connecting countries and continents: what could be a better symbol of the blurring of European borders than sailing?” Continuing, Simčič adds: “Thirdly, my family has a history of winemaking dating back to the 19th century. All their knowledge over the years has been poured into the development of high-quality sparkling Medot wines, which are produced following the traditional méthode champenoise. This has had a strong impact on my view of the importance of constant development and innovation, the ability to develop a long-term vision and always have a broader picture, and to appreciate hard work, effort, and patience.” Fuelled by this passion and resolve, Simčič set out to realise his vision in 1995, initially acquiring the help and support of the mayors of the bordering cities in which he lived and worked. “I launched the Esimit Gorizia & Nova Gorica sailing project, which extended across the whole of Europe,” he recalls. “Since 2010, with the Esimit Europa 2 yacht, sports, diplomatic and business connections have been established between the EU and Russia, extending the message of friendship and collaboration to a Pan-European level.” Addressing the core values that drive the project forward, Simčič elaborates: “From the very beginning, the Esimit sailing yacht symbolised collaboration. It is still our core value today and it will be continue to be in the future. Only by working together as a crew and trusting each other can we achieve such outstanding results. To be able to rely on and to help each other when needed are crucial conditions for successful teamwork, so responsibility and solidarity are also important values in our team. Furthermore, constant improvements and technological advancement are a priority of the project.” Simčič describes how, in the very action of the project, these values are perpetually expressed and extend beyond seas and shores, serving as a metaphor for political and economic development: “If we look at these values through the

We reflect the values needed for the success of a whole, united European continent: collaboration, mutual trust, efficiency, innovation, and solidarity fact that we are connecting different nationalities on board the Esimit Europa 2 yacht under the European flag, and winning some of the toughest races around the world, we are representing the success of what we stand for,” he says. “As a symbol, we reflect the values needed for the success of a whole, united European continent: collaboration, mutual trust, efficiency, innovation, and solidarity. Through its winning performances, the Esimit Europa 2 yacht, which is one of the fastest and most technologically advanced in the world, carries the message of a successful and united Europe around the globe.” Esimit Europa, moreover, offers opportunities for collaboration on land: “We also connect people on shore through our regular diplomatic activities,” Simčič explains. “Within the project, special events are organised to present the achievements of the yacht and our further ambitions. On these occasions, European diplomats and

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businessmen from various countries are invited to attend, giving them a forum for discussion and possible collaborations. “The project is under the patronage of the President of the European Commission, José Manuel Barroso, and is supported by the President of the European Parliament, Martin Schulz, the President of Cyprus, Nicos Anastasiades, the Russian Minister of Foreign Affairs, Sergey V. Lavrov, as well as many other prominent European diplomats and businessmen.” As to why the project has chosen to make Cyprus its home, basing its headquarters here, Simčič explains: “Cyprus offers a very friendly environment for internationallyoriented companies and projects. Esimit Europa is a project with partners and suppliers from all over the world, so it is easier to run it from such an international business centre.” Esimit Europa’s relationship with Cyprus has, indeed, been ever strengthening: “During the Cyprus Presidency of the Council of the EU in the second half of 2012, Esimit Europa 2 was invited to carry the emblems and the logo of the Presidency. The good cooperation continued in 2013 when the Esimit Europa project supported the World Youth Championship in Sailing in Cyprus, and was crowned at the beginning of this year with a reception held by President Anastasiades and his official support for the project.” Regarding registering the ship here, Simčič reveals: “We checked various options, looking at the regulations and formalities in different countries. Time was crucial at this point, since we had less than six months from buying the yacht in Australia to the beginning of the racing season in the Mediterranean. We had received an invitation by the Cyprus Government to register the yacht here. I recall great responsiveness and efficiency from the Cyprus administration in this process, so we decided to it was the best option.” Concluding, Simčič says with pride: “Esimit Europa is a project connecting all nations on the European continent, committed to the promotion of values such as friendship and cooperation of all nations and people. We salute all kind of events and meetings that foster collaboration among European countries, and thus fully support Cyprus in its endeavours.”

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{April 14 – May 13, 2014}

ISSUE

+ BOOK REVIEWS

{money}

BUSINESS: The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers By Ben Horowitz 81

{economy}

78 Investable Real Estate to Grow by Over 55% by 2020 The findings of the Real Estate 2020: Building the future report. 79 Cyprus Property Values & Rents Fall in Q4 2013 Only properties in the Famagusta district buck the trend.

{business}

80 Multinationals close the door on defined benefit pensions Deficits have become unmanageable, says PwC survey. 87 MEPs Vote to End Roaming Charges Roaming charges for using a mobile phone in another EU country will be banned from 15 December 2015.

82 Eurozone to Lag Behind the Rest of the World During Recovery The conclusions of the spring EY Eurozone Forecast.

{tax&legal}

84 Double Taxation Treaties Cyprus signs new agreements with Latvia and Norway.

ECONOMY: The Tragedy of the European Union: Disintegration or Revival? How Europe Must Now Choose Between Economic and Political Revival or Disintegration 83 By George Soros TAX & LEGAL: The Question of Competence in the European Union 85 By Loic Azoulai LIFESTYLE: Life After Life By Kate Atkinson

{lifestyle}

86 The Bling Ring Investing in Jewellery 90 A Day In The Life Dr. George Pamboridis

THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES OF CYPRUS

gold_plus.indd 77

Gold 77

08/04/2014 15:53

real estate

{money}

Investable ] Real Estate to Grow by

Over 55% by 2020

new report from PwC, Real Estate 2020: Building the future, predicts that the global stock of investable real estate will rise by more than 55% to around $45.3 trillion by 2020, from a 2012 total of $29.0 trillion and will expand again by a similar proportion by 2030. The expansion will be greatest in the emerging economies, where economic development will lead to better tenant quality and, in some countries, clearer property rights and will play out across housing, commercial real estate and infrastructure. The report also finds that private capital will play a critical role in funding the growing and changing need for real estate and its supporting infrastructure. Intense competition for prime real estate will force real estate managers and investors to seek out new opportunities for yield. Yet the growing and changing real estate world will present them with a far wider range of risks, which they must be equipped to manage. PwC predicts that total investable real estate in the euro area will rise by 27% to $8.6 trillion by 2020, from a 2012 total of $6.8 trillion. Constantinos Constantinou, Advisory Services Partner at PwC Cyprus says: “The real estate industry is at the centre of rapid economic and social change, which is transforming the built environment. Already thousands of people migrate from country to city across Asia, the Middle East, Latin America and Africa, attracted by the wealth of these new economies. By 2020, this migration will be firmly established. Cities in these regions will swell and some entirely new ones will spring up. Meanwhile, the growing middle class and ageing populations in these emerging economies are increasing demand for specific types of real estate such

Rapid urbanisation and demographic changes, especially within emerging markets, will lead to substantial growth in the real estate investment industry over the next six years, according to a new report from PwC. At the same time as the industry’s opportunities grow, so too will assets invested into the sector.

Growth in online shopping will continue to reduce the need for retail space but shorter delivery times increase the need for warehouse space close to customers as affordable housing, retirement accommodation, gated communities outside cities for families and smaller urban apartments without kitchens or car parking for young professionals. As real estate is a business with long development cycles, now is the time to plan for these changes.” Other changes in real estate by 2020 will include: • A huge expansion in cities, with mixed results. By 2020, the 21st century’s great migration to the cities will be well underway. Cities will swell across the fast-growing countries of Asia, Africa, the Middle East and Latin America. Even the developed Western countries will be urbanising, albeit at a slower pace. Come 2020, cities will be competing fiercely with each other. But while some cities

78 Gold the international investment, finance & professional services magazine of cyprus

will become centres of wealth creation in a multipolar world, others are likely to fail. Those that emerge as their region’s leading cities are likely to provide opportunities for attractive returns. • Growth in emerging markets will ratchet up competition for real estate assets and competition between real estate organisations. • Sustainability will transform the design of buildings and developments, presenting opportunities and risks for real estate asset managers. • Technology will disrupt real estate economics: growth in online shopping will continue to reduce the need for retail space but shorter delivery times increase the need for warehouse space close to customers. And as workers increasingly work from home or satellite offices, the need for office space will decrease. For developers, technology advances will make eco-efficient building more practical. Technology even has the potential to transform real estate asset managers’ own operations, allowing them to make far more use of telecommuting, while also embracing data management techniques such as data warehousing. • Real estate capital will take financial centre stage. Private capital will play a critical role in funding the growing and changing need for real estate and its supporting infrastructure. Just as asset managers, real estate funds and sovereign wealth funds will find the assets under their control swell, so there will be a growing need to finance urbanisation. Private real estate capital will become an important partner of governments. Real estate managers will need to leverage the full range of financing possibilities to take on new types of risk, often with long-term investment horizons. To download a copy of Real Estate 2020, visit www.pwc.com/RE2020

real estate

{money}

Cyprus Property Values & Rents Fall in Q4 2013 Only properties in the Famagusta district buck the trend

he seventeenth edition of the RICS Cyprus Property Price Index (CPPI), a quarterly price and rental index racks property and rental prices across all districts and main property types, has recorded falls in almost all towns and asset classes for the fourth quarter of 2013. Among its findings: During the fourth quarter of 2013 the Cyprus economy began stabilising from the impact of the decisions of the Eurogroup on 15 and 27 March to “bail-in” the depositors of two of Cyprus’ largest banks, to close down Laiki Bank, and to impose capital restrictions. The secondary implications of these decisions, mainly the reduction of bank staff, the increase in unemployment, and further decreases in salaries, were unfolding throughout the quarter. Given the prevailing economic conditions and the turbulence in Cyprus’ banking system, there was a lack of transactions during the quarter. Local buyers in particular were the most discerning as the increase in unemployment and the worsening prospects of the local economy led to a sharp reduction in interest. Furthermore, those interested were unable to access bank-finance or their deposits.

Market Capital Values The Property Price Index has recorded falls in almost all cities and asset classes, with significant falls being recorded in Nicosia. The capital is clearly feeling the impact on the government and banking sector (the two sectors that dominate the local employment market), whilst other cities are progressively bottoming out. Across Cyprus, residential prices for both houses and flats fell by 1.6% and 0.5%

respectively, with the biggest drop being in Larnaca (1.4% for houses) and Nicosia (6.8% for flats). Values of retail properties fell by an average of 3.2%, whilst those of offices and warehouses fell by 1.4% and 0.7% respectively. Compared to Q4 2012, prices dropped by 13.3% for apartments, 10.5% for houses, 19.8% for retail, 12.8% for office, and 15.4% for warehouses.

Given the prevailing economic conditions and the turbulence in Cyprus’ banking system, there was a lack of transactions during the quarter Market Rental Values Across Cyprus, on a quarterly basis, rental values decreased by 1.0% for apartments, 1.3% for houses, 3.0% for retail units, 1.4% for warehouses, and 1.6% for offices. Compared to Q4 2012, rents dropped by 13.3% for flats, 12.3% for houses, 29.4% for retail, 18.0% for warehouses, and 18.8% for offices. The majority of asset classes and geographies continue to be affected, with areas that had dropped the most early on in the property cycle now nearing the trough. Only properties in the Famagusta district showed a marginal increase in both capital values and rents, as the market there appears to be stabilising.

Appraisal Based Initial Yields At the end of Q4 2013, average gross

yields stood at 3.8% for apartments, 1.9% for houses, 5.3% for retail, 4.5% for warehouses, and 4.3% for offices. The parallel reduction in capital values and rents is keeping investment yields relatively stable and at very low levels (compared to yields overseas). This suggests that there is still room for re-pricing of capital values to take place.

Coverage and Variables Monitored The RICS Cyprus Property Price Index monitors the urban centres of Nicosia, Limassol, Larnaca, Paphos and ParalimniFamagusta. The Index only tracks prices in the Republic of Cyprus’ government controlled area and not in the occupied North. In each of these centres, the index monitors the Market Value and Market Rent, as defined in the RICS Red Book, across the four main property sectors – office (CBD), retail (high street), industrial (warehouse) and residential (houses and apartments). Recognising that there are sub-districts within these urban areas which operate and behave in a varying manner, a number of these is monitored in order to derive the composite index for each category per urban area. The information provided in the publication is based on the average price and rent of the sub-districts monitored per urban centre per sector. The complete list of these subdistricts can be found in the University of Reading’s report which is available on http://www.joinricsineurope.eu/en/na/ view/rics-cyprus The RICS Cyprus Property Price Index is a quarterly price and rental index which is based on methodology produced by the University of Reading, UK. The Index tracks property and rental prices across all districts and main property types.

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pensions

{business}

Multinationals close the door

on defined benefit pensions Deficits have become unmanageable, says PwC survey

45%

of employers are actively looking to transfer pension liabilities to insurance companies

he death of defined benefit (DB) pension arrangements has become a global phenomenon with employers grappling with what to replace it with, according to new research from PwC, which surveyed 114 Fortune 500 global multinationals employing a total of 4.7 million people with combined pension liabilities of $950billion. The survey found that only 6% wish to perpetuate DB arrangements, where the employer underwrites the costs and risks of providing workers with guaranteed pension incomes. Nine out of ten are actively deploying defined contribution (DC) as their predominant workplace retirement provision, with the commensurate transfer in cost and risk from employer to employees. PwC’s survey found that 83% of multinationals are closing their DB plans to new employees with 71% also intending to freeze DB accruals for their existing employees. This shift towards DC is prompted by the continuing financial

80 Gold the international investment, finance & professional services magazine of cyprus

strain and volatile impact on companies of supporting DB pension and healthcare obligations. Almost 80% of respondents said they have global retirement liabilities that exceed a third of their group’s market capitalisation. 88% of companies are concerned about the risks their global DB obligations pose to their balance sheet, with 83% worried about costs, 76% about impacts on cashflows and 58% about impact on credit rating. To address the remaining big legacy DB liabilities, half of the employers intend exploring options to offer current and former employees cash or other terms to give up legacy liabilities and 45% are actively looking to transfer liabilities to insurance companies, a big opportunity and challenge for the financial services industry. While the appetite for providing DB pensions has largely ended, the research reveals that an overwhelming majority (90%) of multinationals still want to play a significant role in the provision of retirement benefits to their employees. Companies recognise that providing retirement benefits is important to maintain their reputation as an employer of choice (93%) and to help them hire and retain the people they want (97%). But only a small number (15%) of employers feel their current benefits policy is sufficiently effective for the new world of work. Although employers have no appetite to return to the costs and risks of DB, there is a growing appetite to invest in “new paternalism”. This is where companies are taking responsibility and investing resources to give employees access to appropriate retirement savings arrangements and to help them take better-informed decisions about their retirement provision. There is also a recognition that employees need to be given greater flexibility in a world of increasing diversity and unpredictability. Nine out of ten companies said that it is important they help employees to take informed decisions about their retirement savings and 83% said they plan to give more flexibility to their employees in the way they save. However, only 11% and 15%, respectively, think they are currently sufficiently effective at doing this.

telecommunications

{business}

MEPs Vote to End Roaming Charges

nternet access providers will be barred from blocking or slowing down selected services for economic or other reasons by the latest draft EU “telecoms package” legislation voted by Parliament on 3 April. MEPs also voted to ban so-called roaming charges for using a mobile phone in another EU country, as of from 15 December 2015. “Today’s vote is a great step towards strengthening the telecommunications single market. Parliament wants to abolish retail roaming charges for voice, SMS and data by 15 December 2015 and improve radio spectrum management to develop 4G and 5G throughout Europe”, said rapporteur Pilar del Castillo Vera (EPP, Spain). “We have achieved further guarantees to maintain the openness of the Internet by ensuring that users can run and provide applications and services of their choice as well as reinforcing the Internet as a key driver of competitiveness, economic growth, jobs, social development and innovation”, she added. Del Castillo’s report was approved by 534 votes to 25, with 58 abstentions. MEPs amended the text of the legislation to ban roaming charges (extra fees for using a mobile phone to call, send text messages or access the Internet in another EU country) anywhere in the EU as of 15 December 2015. If roaming services are abused, however, capped charges could exceptionally be imposed, MEPs said.

Equal Internet access for service suppliers

MEPs want clear rules to prevent Internet access providers from promoting some services

Parliament wants to abolish retail roaming charges for voice, SMS and data by 15 December 2015

at the expense of others. EU telecoms regulator BEREC has reported that several Internet access providers were blocking or slowing down services like Skype, which is used to make phone calls over the Internet. Internet access providers would still be able to offer specialized services of higher quality, such as video on demand and business-critical data-intensive “cloud” (data storage) applications, so long as these services are not supplied to «the detriment of the availability or quality of internet access services» offered to other companies or service suppliers. MEPs shortened the European Commission’s list of “exceptional” cases in which Internet access providers could still be entitled to block or slow down the Internet. MEPs said these practices should be permitted only to enforce a court order, preserve network security or prevent temporary network congestion. If such “traffic management measures” are used, they must be “transparent, non-discriminatory and proportionate” and “not be maintained longer than necessary”, they added. MEPs underlined that internet access should be provided in accordance with the principle of “net neutrality”, which means that all Internet traffic is treated equally, without discrimination, restriction or interference, independently of its sender, recipient, type, content, device, service or application. On 3 April, the European Parliament voted on its first reading of the draft legislation, in order to consolidate the work done so far and hand it over to the next Parliament. This ensures that the MEPs newly elected in May can build on work done during the current term.

The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers By Ben Horowitz (HarperBusiness, 2014)

R.R.P. £18.99 (£18.99 from amazon.co.uk) ne of Silicon Valley’s most respected and experienced entrepreneurs, Horowitz draws on his own story of founding, running, selling, buying, managing, and investing in technology companies to offer essential advice and practical wisdom for navigating the toughest problems. Few entrepreneurs are as brutally honest as he is about how hard it is to run a business. His blog has garnered a devoted following of millions of readers who have come to rely on him to help them run their businesses. A lifelong rap fan, he amplifies his business lessons with lyrics from his favourite songs and tells it straight about everything from firing friends to poaching competitors, from cultivating and sustaining a CEO mentality to knowing the right time to cash in. His advice is grounded in anecdotes from his own hard-earned rise – from cofounding the early cloud service provider Loudcloud to building the phenomenally successful Andreessen Horowitz venture capital firm. Filled with humour and straight talk, the book is invaluable for veteran entrepreneurs as well as those aspiring to their own new ventures.

the international investment, finance & professional services magazine of cyprus

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eurozone

{economy}

Eurozone to Lag Behind the Rest

of the World

During Recovery

lthough the eurozone is now growing, it is still expected to lag well behind other major economies during the recovery, according to the spring EY Eurozone Forecast (EEF). The forecast shows that eurozone GDP in 2018 will be only about 5% above its pre-financial crisis peak in Q1 2008. In contrast, the EEF expects UK and US GDP to be 12% and 23% respectively higher over the same period. After two years of decline, the forecast predicts growth of 1% in the eurozone 2014, followed by a pickup to 1.4% in 2015, which is still weak, particularly compared to the growth seen in the first half of the last decade, and then only slightly faster growth

82 Gold the international investment, finance & professional services magazine of cyprus

of about 1.6% a year in 2016-18. However, there are reasons for cautious optimism as there will be a gradual recovery in consumer spending and business investment. The return to modest growth and stabilizsation in debt burdens should mean that the possibility of a eurozone breakup recedes further The accession of Latvia earlier this year and the probable accession of Lithuania next year have given a welcome boost to faith in the single-currency zone. Tom Rogers, senior economic adviser to the EY Eurozone Forecast comments, “The eurozone recovery is likely to gather momentum this year but risks to the forecast do remain. While the risks of a breakup have diminished and some of the peripheral countries have surprised on the upside, deflation and unemployment will remain ongoing concerns.” Mark Otty, EY Area Managing Partner for Europe, Middle East, India and Africa comments, “Although the overall outlook remains patchy, there is finally some more positive news to report in this forecast, particularly in the peripheral countries in the eurozone. As their economies continue to rebalance and their labour forces become more competitive, businesses from the rest of the eurozone and other parts of the world could gain a competitive advantage by expanding or moving operations into these countries. The forecast predicts a variable pace of recovery across different member states. Divergence is nothing new, but the divide is no longer simply between the core and peripheral countries. Some of the peripheral countries that have implemented painful reforms in recent years, notably Spain and Ireland, are benefiting as world trade picks up. The EEF now expects Irish GDP growth of 1.8% this year, while Spain is set to return to growth of 0.8%.The fastest growth in the eurozone is expected to be seen in the newest member, Latvia, which is projected to grow by over 4%, followed by Estonia at 2.5%. By contrast, GDP growth in France is forecast at only 0.7%, below the eurozone average. Other core countries, including Belgium, the Netherlands and Finland, are also set to experience very subdued growth, adding to concerns about their medium term prospects. Rogers comments, “As a result of the ongoing deflationary threat, the need for the ECB to be prepared to loosen monetary policy further remains high. The latest inflation data

A key factor in the forecast of subdued consumer demand in the coming years is the high level of unemployment shows that the danger of deflation is very real and even assuming a steady recovery unfolds we expect inflation to remain well below the ECB’s target for some time.” The EEF forecasts eurozone inflation of just 1.1% on average in 2014, with a modest uptick to 1.5% in 2015. But with an output gap estimated at around 4% of GDP in 2014, the risks to the EEF’s inflation projections are on the downside. Deflation would increase the real value of the debt stock, while at the same time depressing the tax revenues that service it. As a result, deleveraging would need to happen via further austerity, and in a worst case scenario, debt restructuring. One source of upside risk to growth is on the government side. With less pressure from financial markets and the European Commission, governments may allow some easing of fiscal targets, particularly if accompanied by further reform efforts that improve longerterm debt sustainability. The possibility of higher spending could mean that the drag on growth from fiscal austerity will be lower than we currently expect. In turn, this would enable stronger private sector demand to emerge, resulting in a virtuous circle. As well as the possibility of less fiscal austerity than currently expected, it seems likely that the eurozone’s monetary stance will start to diverge from US policy in 2014.

The EY Eurozone

Forecast The forecasts and analyses presented in the EY Eurozone Forecast are based on the European Central Bank’s model of the eurozone economy. This model embeds state-of-the-art economic theory and techniques and is used by the ECB to produce its quarterly forecasts of the euro area. EY is a global leader in assurance, tax, transaction and advisory services. EY refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity.

This should help the euro to start to weaken against the US dollar, and perhaps give an even larger boost to exports than is currently expected. The EEF estimates that the euro is currently overvalued by around 10%, so a weaker euro would certainly be welcome news. As well as tight credit conditions, a key factor in the forecast of subdued consumer demand in the coming years is the high level of unemployment. The unemployment rate at the eurozone level has flattened out at about 12% in recent months and the countries with the highest rates of unemployment, such as Greece and Spain, are reporting much smaller rises. But the weak recovery that the EEF

While the risks of a breakup have diminished, deflation and unemployment will remain ongoing concerns predicts for the eurozone, combined with businesses trying to improve profitability and productivity in the face of tight credit conditions, means that unemployment will fall only very slowly in the next two years. The forecast shows unemployment in the eurozone averaging 12% in 2014, slightly lower than 2013, before edging down gradually to 11% in 2018. But, as with GDP growth rates, wide labour market divergence among member countries will persist. The jobless rate in Greece is projected to climb to 28% this year, before falling slowly to just under 25% in 2018, while the Spanish rate is expected to fall to 25% this year, and then to 23% in 2018. In contrast, Austria and Germany will continue to have the lowest unemployment rates, at about 4.5% and 5.3% respectively, over the 2014-18 period. While current levels of unemployment in some eurozone countries are worryingly high, youth unemployment is an even greater concern, especially in the periphery. Spain

and Greece have youth unemployment rates of over 50%, while Slovakia, Italy and Portugal have rates of above 30%. Tom Rogers concludes, “The eurozone has come a long way in the last 12 months and the risk of a breakup of the currency union now seems to have subsided. However, risks such as deflation, growing divergence in the core countries, and the social costs of high unemployment persist, and the outlook for medium to long term growth remains weak by historical standards.”

BOOK REVIEW the Tragedy of the European Union: Disintegration or Revival? How Europe Must Now Choose Between Economic and Political Revival or Disintegration By George Soros (Public Affairs, 2014) R.R.P. £12.99 (£12.99 from amazon.co.uk)

n the eyes of many, the EU has declined in the past decade from a unified global power to a fractious confederation of states with staggering unemployment resentfully seeking relief from a reluctant Germany. If the EU collapses and the former member states are transformed again from partners into rivals, the US and the world will confront the serious economic and political consequences that follow. In a series of revealing interviews conducted by Dr. Gregor Peter Schmitz, George Soros, the outspoken Chairman of Soros Fund Management, offers trenchant commentary and concise, prescriptive advice. For example, he believes that the euro crisis was not an inevitable consequence of integration but a result of avoidable mistakes in politics, economics, and finance. Excessive faith in the self-regulating financial markets (Soros calls it market fundamentalism) inspired flawed institutional structures that call out for reform. Despite the present problems, Soros maintains his faith in the European Union as a model of open society and this book is a testament to his vision for a peaceful and productive Europe.

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double taxation

{tax&legal}

New Cyprus-Latvia

Double Tax Agreement

egotiations between the governments of Cyprus and Latvia on a new double taxation agreement, which began in 2006, appear to be reaching the final stages. The Latvian authorities have now published the text of the final draft agreement, which requires the approval of the Cabinet before signature. After signature it will need to be ratified by both countries before taxing effect. The agreement closely follows the form of the latest OECD Model Convention. According to Andreas Neocleous & Co LLC, the key features of the agreement are the following:

to a resident of the other are subject to zero tax in the contracting state from which they originate as long as the beneficial owner of the dividend, interest or royalty (as the case may be) is a company (but not a partnership) resident in the second contracting state. It this is not the case, tax payable in the first contracting state is limited to 10 per cent of the gross amount in the case of dividends and interest and 5 per cent of the gross amount in the case of royalties. As both countries are EU members, the Interest and Royalties Directive and the Parent Subsidiary Directive will also be relevant.

Withholding Taxes on DiviCapital Gains dends, Interest and Royalties Income or gains derived by a resident of Dividends, interest and royalties paid by a company resident in one contracting state

one contracting state from the alienation of immovable property situated in the other

84 Gold the international investment, finance & professional services magazine of cyprus

contracting state may be taxed in the contracting state in which the property is situated. Gains on disposal of shares or similar interests in a company or other entity deriving more than 50 per cent of its value from immovable property may also be taxed in the contracting state in which the immovable property is situated. Gains from the disposal of immovable or movable property associated with a permanent establishment may be taxed in the contracting state in which the permanent establishment is located. Gains derived from the alienation of all other property (including ships or aircraft operated in international traffic) are taxable only in the contracting state in which the alienator is resident.

Offshore Activities The draft agreement with Latvia is the first of Cyprus’s agreements to include an article dealing specifically with offshore activities. Article 21 provides that a resident of one contracting state undertaking activities offshore in the other contracting state for more than 30 days in any 12 month period in connection with the exploration or exploitation of the seabed or subsoil or their natural resources

is deemed to be carrying on business in that other contracting state through a permanent establishment. Profits from offshore supply and transport operations in connection with the exploration or exploitation of the seabed or subsoil or their natural resources of a contracting state are taxable only in that contracting state. Salaries, wages and the like earned by a resident of one contracting state from employment in the offshore zone of the other contracting state are taxable in the contracting state in which the activities are carried out. However, if the employer is not resident in the contracting state in which the activities take place, and the employment is for less than 30 days in any 12 month period, the remuneration is taxable only in the contracting state in which the individual is resident. Salaries, wages and similar remuneration derived from employment aboard ships or aircraft engaged in offshore supply and similar activities are taxable in the contracting state in which the individual is resident. Gains derived by a resident of one contracting state from: ΐ the alienation of exploration or exploitation rights; or ΐ property situated in the other contracting state and used in connection with the exploration or exploitation of the seabed or subsoil or their natural resources situated in the second contracting state; or ΐ shares deriving their value or the greater part of their value directly or indirectly from such rights or such property, may be taxed in the second contracting state.

Exchange of Information The exchange of information article reproduces article 26 of the OECD Model Convention verbatim. Cyprus’s Assessment and Collection of Taxes Law provides robust safeguards against abuse of any exchange of information provisions. Requests for exchange of information are dealt with solely by the International Tax Relations Unit (“ITRU”) of the Department of Inland Revenue. Exchange of information may take place only via the ITRU: direct informal exchange of information between tax officers bypassing the competent authority is prohibited. A request must be much more than a brief email containing the name and identifying information of the individual concerned. Rather, a detailed case must be made, with the criteria set out in a lengthy legal document. In effect, this means that the authorities requesting the information must already have a strong case even before they request the information. Accordingly, it will not be possible to follow up a suspicion without first gathering significant evidence. As a final safeguard, Cyprus’s Assessment and Collection of Taxes Law requires the written consent of the Attorney General to be obtained before any information is released to an overseas tax authority.

On independence Latvia did not adopt the Cyprus-USSR double taxation agreement of 1982, and there is currently no double taxation agreement in force between the two countries. The Latvian govern-

Cyprus and Norway

he Cyprus government recently announced that it has signed a new double tax agreement with Norway. Previously, double tax avoidance between the two countries was regulated by the 1951 agreement between Norway and the United Kingdom, which was extended in 1955 to include several British colonies, including Cyprus. On becoming independent, most of the newly independent countries negotiated new arrangements, but Cyprus had not done so until now. The new agreement is based on the Organisation for Economic Cooperation

BOOK REVIEW TheQuestionofCompetence intheEuropeanUnion By Loic Azoulai (Editor) (OUP Oxford, 2014)

Conclusions

Sign Double Tax Agreement

ment announced the commencement of negotiations on an agreement with Cyprus in 2006 and it is hoped that the remaining steps in concluding the agreement and bringing it into effect can be achieved quickly. If it takes effect in its current form, the agreement will be Cyprus’s first to include an article dealing with offshore activities, reflecting its newly-discovered energy resources. In the meantime, although there is no agreement in existence, the Cyprus tax authorities will doubtless follow their normal practice of allowing unilateral relief for Latvian taxes paid.

and Development Model Tax Convention and provides for the exchange of information in accordance with the relevant articles thereof. The agreement will take effect once it has been ratified by both countries. The Cyprus government attaches great importance to maintaining, updating and expanding Cyprus’s network of double tax treaties, in order to attract foreign investment and promote Cyprus as an international business centre. It has expressed confidence that the new agreement will contribute to the further development of trade and economic relations between Cyprus and Norway.

R.R.P. £60.00 (£57.92 from amazon.co.uk) or a long time it was taken for granted that the European Community could act whenever its action was justified on the basis of the widely-interpreted objectives of the Treaties. However, there is today a widespread perception of a competence problem in Europe and the overabundance of provisions limiting the Union’s competences is one of the most obvious marks left by the Lisbon Treaty. This book discusses the extent to which the parameters of power throughout the Union and its Member States have been recast by the implementation of the Lisbon Treaty and doctrines developed by the European Court of Justice. With contributions from a vast array of leading practitioners and academics in the field of EU Law, it assesses the debate and further illustrates the relevance of the Federal theory of sharing competences for the development of EU Law. This broad reflection on the notion of competence in the EU law context is a way of opening up the question of the nature and contours of the political identity of the European Union.

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investing in jewellery

{lifestyle}

T h

ing

n g i l R B Few become acquainted with the glimmer of gems without succumbing to the joy of jewellery...

...NOW, people the world over are parting with a portion of their wealth to acquire unique pieces, pushing up prices as they go. The bling ring is widening and fewer items remain to satiate: the jewellery market is, indeed, shining brightly. By Chloe Panayides

Jewellery’s significance and worth endures: it is power, it is status, and it is wealth

n Pre-dynastic Egypt, jewellery was thought to symbolise power; in Ancient Rome, it symbolised status; and in modern-day society, jewellery symbolises wealth. Along this 5,000-year arc, the world has witnessed changes of monumental significance: the evolution from totalitarianism to democracy, the dissemination of imperialism alongside the realisation of self-determination, the industrial revolution, space exploration, and more. The world has come a long way to where it stands today. And, yet, jewellery’s significance and worth endures: it is power, it is status, and it is wealth, regardless of borders or experiences. In stark contrast to other assets, jewellery is globally revered in the same capacity, its endurance as a coveted commodity a diachronic testament to its value. Moreover, the physical properties of the materials used to construct jewellery – most notably, gold, diamonds, and other precious stones – result in the end product possessing of inherent value. The sheer scarcity alone of, for example, gold, drives its worth. Those owning a piece of jewellery constructed with gold are wearing a portion of the mere 174,000 tonnes of gold mined throughout the whole of history. And the ease with which it is melted, shaped and measured made it a natural trading medium in antiquity. Similarly, the discovery of quality gemstones is a laborious task, and limited to certain

locales. It is thought that, of one million diamonds mined, only one will be a quality one-carat stone. Acquiring a quality 2-carat diamond requires sifting through five million, and a quality 3-carat, 15 million. Imagine, then, the excitement of jewellery enthusiasts at Sotheby’s Hong Kong in October 2013 upon coming face to face with an 118-carat diamond, one of only four known examples of a diamond over 100 carats. The flawless D-colour stone – in other words, perfect and colourless – described as being the size of an egg, was sold to an Asian buyer for a phenomenal $30.6 million. Having grown on average at a compounded annual growth rate of 5.2% since 2000, the global gems and jewellery industry was estimated as having been worth $146 billion in 2005. According to a study conducted by KPMG, this figure swelled to $185 billion in 2010 and is projected to reach $230 billion in 2015, with gold and diamond jewellery jointly dominating the sales market, accounting for some 82% of it. Whilst the US has, until now, been the majority shareholder – some 30.8% – with Japan, India, China and the Middle East possessing 8-9%, it is thought that come 2015, China and India will gain significantly in prominence, totalling some 13% of the market each. Indeed, the growing middle classes of both India and China, as well as the rise of wealthy millennials, has augmented the market significantly, boosting sales worldwide despite the economic distress of western nations. Onicra Credit Rating Agency of India recently released a report describing how, by the end of Q2 2013, jewellery demand in China was up by 54% compared to the previous year, whilst demand in India increased by 51%. Elaborating, Onicra specified that India’s retail industry has experienced exponential growth, with retail development taking place in major cities and metros. Whilst its current retail market totals $560 billion, this figure is expected to increase by at least $200 billion, amounting to an estimated $750-850 billion by 2015. And why is this significant? Until recently, buying within India’s jewellery market was

the international investment, finance & professional services magazine of cyprus

Gold 87

investing in jewellery

DIAMONDS REALLY ARE FOREVER

S 1.

quare-cut or pear-shape, these rocks don’t lose their shape; or their value, apparently. Below is a selection of the most expensive diamond jewellery items ever sold:

THE GRAFF PINK

A pink round-cornered rectangular step-cut diamond weighing 24.78 carats, set between shield-shaped diamond shoulders, in platinum, came up for auction at Sotheby’s Geneva in November 2010. The diamond was formerly owned by jeweller Harry Winston, and commanded $46.2 million. Bought by fellow jeweller and collector Laurence Graff, the proud buyer dubbed the item ‘The Graff Pink’.

THE $30 MILLION DIAMOND BIKINI

In 2006, super model Molly Sims wore a diamond bikini in a Sports Illustrated Swimsuit Issue. The bikini has over 150-carat diamonds all set in platinum. It was designed by Susan Rosen and Steinmetz Diamonds and comes with a price tag of $30 million.

HEART OF THE OCEAN DIAMOND

Actress Gloria Stuart wore one of the most expensive jewels ever at the 1998 Academy Awards, made famous by the movie Titanic. The Harry Winston 15-carat blue diamond necklace has an estimated price of $20 million. Even mere replicas are selling in the region of $3.5 million.

THE GLOBAL GEMS AND JEWELLERY INDUSTRY IS PROJECTED TO REACH

$230 BILLION IN 2015

dominated by purchases from trusted neighborhood jewellers. However, recent openings of branded jewellery retail have caused a shift,

BULGARI TWO-STONE DIAMOND RING

Created in 1972 from the Bulgari collection, this ring is set with a triangular-cut fancy vivid blue diamond, weighing 10.95 carats, and a triangular-cut diamond, weighing 9.87 carats. Following an intense bidding war at Christie’s New York in May 2010, an Asian collector bought the ring for $15.7 million.

EMERALD AND DIAMOND TIARA

Commissioned by German Prince Guido Henckel von Donnersmarck, he gave this tiara as a gift to his second wife Katherine in the year 1900. It contains a row of 11 polished pear-shaped Columbian-mined emeralds at about 500 carats total and an anonymous bidder parted with $12.76 million at Sotheby’s Geneva in May 2011 to acquire it.

WALLIS SIMPSON’S PANTHER BRACELET

The onyx and diamond panther bracelet was once owned by Wallis Simpson, whose love affair with King Edward VIII led to his abdication in 1936. It sold at Sotheby’s London in November 2010 for $12.4 million. Some believe that renowned pop star, Madonna, purchased the piece.

whereby an increasing number of individuals are opting for branded jewellery, opening up India’s booming interest in jewellery on a global scale. This change in trend is driven by a number of factors, Onicra explains, such as brand consciousness, choice of designs, consciousness towards hallmarking and certifications of gold and diamond along with a growth in urbanisation and increase in disposable income. Furthermore, cultural reasons have been credited as driving India’s gold market, with tradition dictating the giving of gold for

PINK GRAFF DIAMONDS RING

EMPRESS EUGENIE BROOCH

THE 6-CARAT BLUE DIAMOND RING

A fancy vivid pink cushionshaped diamond weighing 5.00 carats, mounted by Graff Diamonds, came up for auction at Christie’s Hong Kong in 2009. The rare pink diamond was mined in South Africa and commanded an impressive $11.8 million.

In April of 2008, at Christie’s New York, an antique diamond bow brooch from François Kramer, circa 1855 came to auction. It was designed as an old mine and old European-cut diamond openwork sculpted bow, and was created by Kramer for the wife of Napoléon III, Empress Eugénie Henri Loyrette, President of the Louvre, bought the brooch for $10.5 million, wanting to bring the item back to its native France.

A vivid blue cushion-shaped diamond ring weighing 6.01 carats fetched $10 million at auction by an anonymous bidder at Sotheby’s Hong Kong in 2011. Two oval pink diamonds weighing 0.46 and 0.44 carats respectively frame the centerpiece of the platinum mounted ring.

. THE CULLINAN DIAMOND

At a Sotheby’s sale in Geneva in 2009, this blue diamond ring proved to be a crowd favourite, reaping $9.69 million.

dowries, wedding celebrations, and religious festivities. In fact, some industry experts believe that global gold prices are affected by seasonal demand around the Diwali festival in the autumn of every year. China, meanwhile, has undergone explosive growth, with its emerging middle class bringing sweeping economic change and social transformation. And, according to management consulting firm, Mckinsey & Company, it’s not over yet. The firm’s research suggests that, by 2022, more than 75% of China’s urban consumers

88 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

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will earn the equivalent of $9,000 to $34,000 a year. In purchasing-power-parity terms, this range is between the average income of Brazil and Italy. The evolution of the middle class means that sophisticated and seasoned shoppers – those able and willing to pay premium for quality and to consider discretionary goods and not just basic necessities – will soon emerge as the dominant force. This prediction, coupled with China’s deregulation of gold ownership some 10 years ago, has opened up the market. According to the World Gold Council, demand for jewellery in China has consequently doubled overall in the past seven years. As new markets rise in prominence, 2013 witnessed sales of monumental significance in the jewellery sphere, positively augmenting its future course. In November, Christie’s Geneva made headlines with the sale of a vivid orange diamond for $36 million. The 14.82-carat pear-shaped stone’s price – including fees – amounted to about $2.4 million per carat, according to the auction house, which represented a per-carat record for any coloured diamond at a public sale. The gem also set a record for an orange diamond of its type, Christie’s said. The previous time an orange diamond of the same classifications appeared at auction, it weighed 5.54 carats. Known as “The Pumpkin Diamond,” it fetched $1.3 million at Sotheby’s in 1997, selling to Ronald Winston, a son of the Harry Winston founder. A mere few days later following the epic sale of the vivid orange diamond, Sotheby’s Geneva sold a 59.6-carat flawless pink diamond, nicknamed the ‘Pink Star’, for a soaring $83.1 million, far surpassing the previously held record for a pink 24.78-carat diamond of $46.2 million established in 2010. David Bennet, chairman of jewellery at Sotheby’s, said of the sale: “It is difficult to exaggerate the rarity of vivid pink diamonds weighing only five carats, so this 59.6-carat stone is simply off any scale, and passes, I believe, into the ranks of the earth’s greatest natural treasures.” So, how does one go about building a portfolio that may prove profitable in the future? Experts advise that the key focus should be on acquiring pieces of intrinsic value: that is, gold, diamonds, sapphires, rubies, emeralds, amethysts, and any other rare stone with an indelible twinkle. Forgeries are perhaps the greatest threat in this quest. Particularly when dealing with an-

tique pieces, the risk of acquiring an item that has had its stone replaced in a so-called ‘restoration’ process is acute. Therefore, focusing one’s buying efforts around established dealers and designers will assist in mitigating this threat. Experts will be able to advise accordingly as to the authenticity of the piece in question and, in certain cases, should be able to provide a certificate of authentication. The UK has even founded associations for greater protection, such as the British Antique Dealers’ Association, and the Association of Art & Antiques Dealers. For new items, dealers recommend pursuing limited edition pieces by major designers whose names have transcended jewellery history, such as Cartier, Tiffany, or Van Cleef & Arpels. Still, the threat of paying more simply due to the name attached to the item means prospective collectors must be discerning in their selection, choosing items of not just aesthetic value: there must, unequivocally, be a quality stone in place as well, embedded within quality metal. Consider Bonhams London’s April 2013 auction, through which a Bulgari ring, circa 1965, featuring a fancy deep-blue diamond came up for auction. Besides representing the craftwork of a major fashion house, the blue diamond – already incredibly rare due to its hue – weighed an impressive 5.30 carats, and was set horizontally within a mount pavé-set with brilliant-cut diamonds and courses of baguette-cut diamonds of approximately 2.00 carats in total. It sold for €7.5 million. Further to targeting key brands, experts suggest structuring one’s collection around a particular theme, whether that be specific stones, items (such as rings, bracelets, necklaces etc.), eras (Georgian, Victorian, Art Nouveau, Art Deco, Art Moderne, and more), or, indeed, designers. When targeting high-end brands and quality stones, numbers will inevitably soar. Here, collectors may safeguard themselves by simply buying the best they can afford. In the case of diamonds, experts explain, examples of medium quality – devoid of brazen flaws – may be easier to sell in the future, and will appreciate at a similar rate to more expensive stones. Similarly, the resale value of an item may be affected by its design: complicated and intricate designs may pass with the fashion, in contrast to singular classic brilliant-cut stones that have proven their enduring popularity. And so it is that engaging in the jewellery market emerges as being precisely akin to what

Demand for jewellery in China has consequently doubled overall in the past seven years jewellery has continued to symbolise across generations: empowering oneself with knowledge; pursuing only items of status, of quality; and parting with just the right amount to acquire an item embodying of both personal and monetary value. Welcome to the bling ring.

BOOK REVIEW Life After Life By Kate Atkinson (Black Swan, 2014)

R.R.P. £7.99 (£4.00 from amazon.co.uk)

The premise of the winner of the 2013 Costa Novel Award will be familiar to readers of the sci-fi classic Replay and, more recently, The Time Traveler’s Wife and 11.22.63, not to mention the movies Sliding Doors and Groundhog Day: What if we were given second, third or an infinite number of chances to live our life? Would we eventually find happiness and save the world from its own inevitable destiny? Kate Atkinson is at her most profound and inventive, telling how the main character, Ursula Todd was born in 1910, during a heavy snowstorm, but died immediately as there was no time for the doctor to reach her. Then we read that Ursula Todd was born in 1910 during a heavy snowstorm and lived. She had another start at life and this unique quality, stays with her as she lives and lives again, changing the direction of her life with chance after chance to get it just right. This fascinating take on the “What if?” conundrum is, not surprisingly, a huge bestseller.

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Gold 89

A Day in the Life

Dr. George Pamboridis

The Founder & Managing Partner of Pamboridis LLC on boxing, how he came to choose the law and not medicine, and why he hopes he won’t be tempted to encourage his sons to follow his example.

“I used to be a heavy

sleeper but since becoming a father in 2007 – we have three boys – sleep has become a bit of a rare commodity! I get up at 6 o’clock and I check the news before taking the children to school at 7.15 and then I meet my personal trainer. We do a 15-minute run and then about half an hour of cardiovascular boxing, followed by 10-15 minutes of stretching. I take a shower, have breakfast and, by 8.45, I’m at my desk. Boxing makes you use almost every muscle in your body, it develops good balance and reflexes and it’s an enjoyable way to start the day. We work with DLA Piper, the biggest law firm in the world, and so I start by checking if anything from abroad needs my immediate attention. I try to schedule meetings with clients early in the morning so that I can get on with substantive work during the day. I invariably have lunch with clients before going back to the office around 3pm. I spend a good couple of hours every day reading articles from the regional and international press and from scientific periodicals on international relations and natural gas issues. Recently I was appointed to the Board of the Cyprus Hydrocarbons Com-

pany and that involves a lot of work. My involvement in the natural gas sector goes back to when I did my second MSc, for which I studied fisheries, coastal zone management and other maritime issues. My father was a doctor and he actively discouraged me from considering medicine as a career. For him it was a 24/7, 365 days-a-year job. One of my great complaints is that I never had any holiday time with my father and we invariably had late lunches because he was so busy. I decided to study politics but as most politicians back then were lawyers, I thought it was probably better to become a lawyer until I realised that it involved a lot of work! I had never cared much for school or lessons but I resolved to study law in Athens and that’s what I eventually did, followed by a Master’s Degree in shipping law and then a second Master’s at the LSE. I worked in London for Holman Fenwick Willan before writing my PhD thesis and although I could make good money in the City there was too much backstabbing so I came back to Cyprus. I’ve had my own office here for al-

The last movie I saw - twice!

90 Gold the international investment, finance & professional services magazine of cyprus

The last book I read

most 10 years now. My motto is to sustain my standard of living while working a little bit less each year. I never take work home as a matter of principle and I don’t let anyone work beyond 6pm or at weekends. I very rarely miss out on telling my kids a bedtime story at 7.30. In the evening I’ll read or watch a movie until 11. I’m not one for going out at night.

My favourite team

My favourite band

I don’t read for pleasure as much as I would like to and, even then, it’s usually only when I’m on holiday. I recently read Nikos Kazanzakis’ The Saviours of God: Spiritual Exercises for the third time. As far as music is concerned, I’m a boring classic rock fan: Deep Purple, AC/DC, Scorpions. My wife and I used to see a lot of movies together but we haven’t done that since the children were born. The last two movies I watched were The Lego Movie and The Lego Movie again! As a kid myself, from the age of 12 I played football for APOEL and back then we had great respect for our rivals such as Omonia. I am saddened to see how things have become these days. It’s a shame. I still support West Ham United from my London days – another sad story, though it could be worse! My weekends are devoted 100% to the kids. It’s unbelievable how much being a parent changes your perspective on life. The fact the focus is no longer on yourself but on something much more precious is both humbling and rejuvenating. I fear I will probably encourage them to follow me into the legal profession but I hope I don’t. It’s easy for parents to screw up the lives of their kids but we have to give them space to make their own choices and let them feel that they are creating their own future. I would like mine to think only good things about me when I’m no longer around.”

CMY

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+ MARINOS CLEANTHOUS, ANDREAS PAPADOPOULOS, ANDREAS athinodorou B2B MATCHMAKING A new department at the CCCI starts work

INTERVIEWS Dr. Mike Balm Michael Izza Dennis Malamatinas

EU ELECTIONS The European Parliament’s role in our lives

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MONEY / BUSINESS ECONOMY TAX & LEGAL LIFESTYLE / OPINION