Standards Magazine Issue 2 - Cyprus and the Dubai Model

The Investor’s Guide To Cyprus

Cyprus and the Dubai model Investment, Business, Energy, Technology & Luxury Living Articles YIANNOS LAMARIS ● ANDREAS VYRAS ● MICHAEL DAMIANOS STAVRIANA KOFTEROS ● GIOVANIS KOUZALIS ● CHRIS PREIMESBERGER MARIOS VALIANTIS ● ANDREAS ROUSSOS ● KYRIACOS CHRISTOFIDES Interviews PHOTIS PHOTIOU ● CHRISTOFOROS KAPLANIS ● SERGIY KUDRYAVSKY DEMETRA KALOGEROU ● MICHAEL PILIKOS

Royal Crown Insurance

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ocused on providing the right insurance and committed to the core principles on which it was founded and since operates, Royal Crown Insurance Company Ltd. is keeping its customers secure and worry-free. For more than 20 years, the company were agents of colossal Royal Insurance, and became established as a Cypriot company in 1999 as the natural successors to Royal’s 70-year successful operation in Cyprus, and is now part of Royal & Sun Alliance’s huge network of global partners.

The procedures and practices of this company have since May 2005 been certified by Lloyd’s Register Quality Assurance LTD with the quality system ISO 9001-2008, confirming the provision of excellent service within very strict practical specifications. Royal Crown firmly believes in long-term collaborations, loyalty and good faith, and has developed mutual trust relationships with some of the largest European reinsurers, enjoying their support in every step.

The quality services Royal Crown Insurance offers, achieved through speedy and professional customer service by its network of educated, experienced and continuously trained employees, consultants, agents and associates, have affirmed its excellent reputation in the market.

Royal Crown Insurance is renowned for the integrity with which claims are settled. It is the mission of the company to carry out the social role of properly distributing the funds collected by its clients, to individuals who have suffered

losses or injuries. Royal Crown Insurance is committed to justice and fairness, and aims for all its clients and third parties to be fully reinstated and fairly compensated as promptly as possible.

The people involved in the insurance industry are well aware of how adversely businesses have been affected by the economic turmoil. It is imperative to ensure that insurance products are flexible, and can easily be adapted to the specific needs of each client, in line with each single one’s individualised circumstances and financial abilities and priorities. After all, at times of crises, there is a creativity outburst in all sectors, and in insurance, the way forward is through innovation and readjustment.

The Business Combined Insurances Policy is a multi-cover policy, offering more than thirty available products, out of which the businessmen can choose which best fits their needs. It protects and ensures the smooth continuation of the business whilst being adapted according to the business’s specifications, and amended at any time in evolving situations. Other insurance products that are of interest to businessmen are Royal Crown’s professional indemnity, employer’s liability, constructors all risks, directors and officers liability and goods in transit policies, along with covering for renewable energy sources.

Royal Crown never rests on its laurels, and shall keep searching for new challenges and solutions for the insurance market.

You Decide On The Investment

We'll Provide The Rest

www.CyprusStandards.com The Cyprus Top 10:

Accountants Lawyers Developers Banks Advertising Marketing Consultants

Shipping Importers Exporters Construction Insurance Estate Agents IT Solutions

NAMES YOU CAN TRUST Along with a complete Traveler's Guide and:

Airlines ∩ Travel Agents ∩ Car Rentals Luxury Hotels ∩ Apts & Villas ∩ Activities 4 CyprusStandards.com

Сделайте Кипр Вашим Местом Назначения, А Мы Обеспечим Остальное

Кипрские тор-10:

Авиакомпания Туристические агенства Апартаменты и Виллы Достопримечательности Медицинские клиники Красота и здоровье Поля для гольфа

Люкс отели Аренда машин Рестораны Шоппинг Спа Бары Клубы

КОМПАНИИ, КОТОРЫМ ВЫ МОЖЕТЕ ДОВЕРЯТЬ! Наряду с инвестиционными возможностями руководство по:

Гольф-недвижимость ∩ Бухгалтеры и Адвокаты Судоходство и Логистика ∩ Виллы с видом на море 5 CyprusStandards.com

Skylink Skylink Services Ltd is part of the Skylink Group of Companies. The company is wellestablished and provides ground handling services for General Aviation Aircraft in Cyprus.

We began operations in 1998, filling the gap in the Executive Aircraft ground handling market at both international Airports of Cyprus, Larnaca and Pafos.

Larnaca International Airport / P.O Box 43012, CY6650 Larnaca, Cyprus.

Tel +357 24 84 09 00 / Fax +357 24 66 58 05

24h Operations

Tel +357 24 64 33 34 / Fax +357 24 64 35 99

Inside PUBLISHER FUA LTD FOUNDING EDITOR Pavlos Vavlitis GRAPHIC DESIGNERS Antigoni Karakoulli Chrysostomos Iosifides ADVERTISING Maria Demetriou

10 12 16

t: 7000 7626 e: media@fua-marketing.com ACCOUNTS MANAGER Demetris Demetriou

CONTRIBUTORS Andreas Roussos Andreas Vyras Chris Preimesberger Christoforos Kaplanis Demetra Kalogerou Giovanis Kouzalis Kyriacos Christofides Marios Valiantis Michael Damianos Michalis Pilikos Pavlos Loizou Photis Photiou Sergiy Kudryavsky Stavriana Kofteros Yiannos Lamaris Read the Standards Online at www.CyStandards.com © 2014 | Standards Magazine The title and all material are protected by copyright and all rights are reserved. No part of this magazine may be reproduced without the publisher’s permission.

Banking Christoforos Kaplanis - Interview Andreas Vyras Cooperatives - New Facts and New Challenges

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Business Michael Pilikos - Interview

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Economy Yiannos Lamaris Energy, Manufacturing, Small and Medium Enterprises

PRINTERS Cassoulides Masterprinters

Welcoming Message Pavlos Vavlitis

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Michael Damianos Cyprus - One Year On Pavlos Loizou Cyprus Real Estate Market: Is there light at the end of the tunnel?

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Giovanis Kouzalis Miracle of Dubai - What Cyprus may learn from it

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Finance Demetra Kalogerou - Interview

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36 40 44 48 50 54 58

Andreas Roussos Are you ready to report?

EMIR Regulation Overview Energy Photis Photiou - Interview

we ‘Unless address

the serious structural problems that plague our economy, economic recovery is far from certain

’

MICHAEL PILIKOS General Director of LUKOIL Cyprus Ltd

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Sergiy Kudryavsky - Interview Marios Valiantis Solar Thermal Energy: it is finally here Youth Entrepreneurship Stavriana Kofteros Cyprus and Angels Kyriacos Christofides Professional Development in Rotaract & Rotary Technology Chris Preimesberger How Enterprises Can Get Better Access to Real-Time Data

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Luxury Living Top 5 Most Expensive Hotels in the World

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Bijan - The Most Expensive Store. By Appointment only

S E R G I Y K U D R YAV S K Y “Further prospects for the CSE exist in the emerging sector of energy, due to the expected earnings from natural gas explorations in Cyprus’ Exclusive Economic Zone.”

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DEMETR A KALOGE R O U

Cyprus -

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One Year On M I C H A E L DA M I A N O S

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Welcoming Message Following the successful publication on the first issue, it is with now great responsibility that we present to you the second edition of Standards Magazine, The Investor’s Guide to Cyprus.

When looking out for potential investors, do not look far. Cypriots should be Cyprus’ number one investors. The summer season is approaching and with it the holiday booking and shopping frenzy.

This year I am hopeful that more and more people will see the wisdom of shopping local. It is important to the continuing prosperity and vitality of our region.

My advice: Book your holiday locally and travel around the island, I bet you are yet to explore even half of our island’s beauties.

Shop at local stores and establishments first, if you cannot find what you are looking for, then order online.

Why is it so important to shop local? Here are three good reasons: • Keep the Money Here: When you buy locally, more of the money gets re-spent here, revitalising the entire economy.

• Job Creation: Increasing demand by supporting Cyprus based companies increases supply, thus creating even more jobs.

• Local Businesses Give Back: Cyprus based businesses give back to local charities and non-profits.

It is only logical, that when you are living, raising a family and involved in a community, it is more likely that you support its schools, organisations and charities, both with donations and activities.

SPEAK UP We speak your language. Talk to us and let us know what matters you consider important, either in business, investment, energy or technology, matters you wish to be addressed by experts in the field, by decision and market makers.

Email us at info@fua-marketing.com

This second edition, is especially dedicated to a Man of Honour, Tasos Mitsopoulos, who we were fortunate enough to host his interview in our first issue. A man of political virtue and public morality, distinguished for his ethos, honesty and modesty, with a unique sensitivity and selflessness, who served his country with dignity, effectiveness and was deservedly respected and appreciated by everyone. An ideologist and charismatic politician, a man hard to replace, a man who has left his legacy and an indelible seal on the local political scene. It was an honour. We bid you fare well Tasos Mitsopoulos.

Please enjoy reading the second edition of Standards Magazine.

Pavlos Vavlitis

www.kourossfashions.com

Nicosia Stasikratous 14 B&C T: +357 22 660497 KourossLefkosia

Limassol Anexartisias 178 T: +357 25 354584 Maximos Shopping Plazza T: +357 25 585454 kouross.lemesos

Με την Αγορά ενός κοστουμιού παίρνετε ΔΏΡΟ αξίας €125

Banking

Christoforos Kaplanis Head, Retail Banking Operations & Alternative Distribution Networks Division at Piraeus Bank (Cyprus) Interview by Dr Loukas G. Glyptis, Lecturer of Accounting, School of Business and Management, UCLan Cyprus. Loukas has a PhD from the University of Birmingham in the inter-organisational cost management and control (IOCM & C) practices of the Greek Shipping industry.

When did Piraeus Bank first enter the Cyprus Banking sector?

Piraeus Bank was granted a license for the exercise of banking operations in December 2007. Barely a month later, after the signing of the deal for the acquisition of the Arab Bank network in Cyprus, on 28/01/2008 Piraeus Bank (Cyprus) Ltd began its operations.

How has the Bank developed in Cyprus over the years?

Piraeus Bank’s commitment in Cyprus was quickly evident from the unfolding of its operations. Soon after the commencement of operations, Piraeus Bank Cyprus was in a position to offer a full range of banking services and products, through its network of: •14 Retail Branches spread in the 5 Districts, •4 Corporate Units in Nicosia, Limassol, Larnaca and Paphos, •2 International Business Units in Nicosia and Limassol, and •1 Wealth Management Unit.

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Piraeus Bank Cyprus’s network of front-line branches and units is complemented by our local Winbank Centre offering digital banking services, our Card Centre, a network of ATMs, Phone Banking, and a 24/7 Call Centre.

As mentioned above, through our network of Retail Branches and of the Corporate, International Business and Wealth Units, Piraeus Bank Cyprus can reach out to the whole of the domestic as well as the international market.

What are the areas in which the Bank has particularly invested resources in?

What is the penetration that Piraeus Bank currently enjoys in Cyprus overall, and on a per District level?

Piraeus Bank’s mission from the outset was to offer value-adding service to its clientele. Resources are continuously dedicated to achieve: •Continuous pursuit of quality of frontline service, based on a welleducated and trained human resource •Utilisation of the resources and experiences of Piraeus Bank Group for the development of an infrastructure that can support its ever-developing range of services and products •The cultivation of a spirit of trust between Piraeus Bank Cyprus and its clientele.

What is the geographical catchment of Piraeus Bank’s branches in Cyprus?

Piraeus Bank Cyprus inherited from Arab Bank a market share of about 0.5% of the local market, focused mainly in corporate banking. During its 6-year presence on the island, Piraeus market share in most important metrics (loans and deposits, retail and corporate) ranges between 2.0% - 2.5%. These numbers are more or less representative down to the District levels.

Admittedly, despite the many-fold increase in the share, these numbers still rank Piraeus Bank Cyprus among the small-size banks. We feel confident though that the continuous growth rate is sustainable because it is based on the financial fundamentals of Piraeus Bank

Cyprus and of Piraeus Bank Group, the excellence of service provided to our clients as well as the continuously enriching of our range of products. All these factors, we believe, will continue to lend support to a sustainable growth in our market share.

Has the Bank developed branches destined to meeting the banking requirements of specific niches of the market? E.g. service providers, shipping companies, hotels, etc.

The special needs of various important segments of the domestic and international markets are catered by our front-line units, which have developed a range of products and services. These products and services are constantly being adapted to best serve our clients’ ever-changing needs.

Can you please elaborate on the product mix that Piraeus Bank customers currently enjoy?

The product mix available to our customers is a fully comprehensive one, consisting of every type of product in the categories of deposits, loans, cards, trade finance, alternative channels, investment and treasury products, all for

the needs of companies, or individuals.

These products range from the standard, bread-and-butter, to the most innovative.

Our clients do take advantage of this rich range of services, as a typical client enjoys 6-7 products on average, according to his needs.

How has this mix developed over the years?

The constant re-designing of our existing, as well as the development of 13 CyprusStandards.com

new, products and services, has enriched our product mix to the point where in all categories Piraeus Bank Cyprus can offer some unique products on top of the standard banking products and services.

Our strategy is to be at the fore-front of the financial services sector. Just to name a few such innovative examples: the various Escalator Deposit products, the Housing Overdraft, Miles & More Gold Visa Credit Card, Mass Payments feature through our Winbank webbanking, Mobile Banking, Instant Cash offering cardless withdrawals from our ATMs, 24/7 availability of Call Centre, Phone Banking, etc.

And I believe it is exactly this combination of standard products, along with so many easy-to-distinguish, innovative products ones, all coupled with a high level of service offered to the client, that were the key factors in Piraeus Bank Cyprus’s growth in market share.

Did the Bank, upon its entry to Cyprus, had to adapt its retail products to meet special customer needs pertaining to the Cyprus economy?

Absolutely, as the economic climate and the needs of our clients constantly

evolved through the years, our products had to adapt as well. Such an example would be how the requirement of a good yield that would be accompanied by liquidity for our depositors, led us to the creation of the Escalator Term Deposits. Similarly, the need of housing loan borrowers to be able to make extra payments in their loans without any charge, economising on the interest charge, and still be able to re-withdraw these available funds, led us to the development of the Housing Overdraft.

How has the Bank’s product mix been affected by the economic crisis?

The crisis, especially in the aftermath of the events of March 2013, has shifted the clients’ desire towards deposits with varying features, providing various combinations regarding yield vis-à-vis liquidity. More recently though the trend is shifting again. An increasing stream of our clients is opting for the longer duration deposits with Piraeus Bank, displaying an increasing level of confidence in Piraeus Bank Cyprus.

Which retail products are currently the most popular and which products had to be redesigned, following the impact of the crisis on the economy in general and the banking sector in particular?

Our range of standard deposit products are the most sought for by our clientele.

Simplicity to comprehend and speed to implement are always very important factors in the deposit business.

Undoubtedly though, a certain part of our clientele wishes to combine liquidity with yield, hence certain other products (such as Escalator Deposits) have been invented, to cater for this part of the market as well.

On the loan-granting side of the business, our Housing Overdraft, with its flexibility in accepting additional, non-scheduled deposits, reducing the interest cost of the housing facility, while allowing for re-drawing of available funds, is highly appreciated by our clients.

In Cards, our Miles & More Visa Gold Credit Card, with its benefits in acquiring Miles with the Lufthansa-led “Star Alliance” is a product that is very

much supported by our clients.

In alternative channels, our Mass Payments feature in web-banking, as well as our “Instant Cash/Λεφτά στο Λεπτό” service, stand out.

How does the Bank plan to expand further its product mix to respond to the emerging needs of the Cyprus market, particularly following the efforts to diversify the economy and reposition its competitive emphasis on areas other than banking?

It is a given that the role Banks play is integral and paramount to the development of all parts of the economy.

Consequently, successful Banks will be the ones that position themselves in such a way so as to better serve the needs of their clients. Banks will have to provide the confidence that depositors need if they are to continue lending their savings to Banks, and from then on, Banks will pass on this liquidity to the borrowers, thus completing the financial circle.

In this fashion, Piraeus Bank Cyprus will keep providing the deposit solutions that evolve along the needs of the clients.

It will also seek to monitor and satisfy the needs of credit-worthy clients for all types of loans, such as housing, consumer, educational loans and credit cards for Individuals, as well as providing the necessary financial backing for Businesses, a key factor for economic growth.

Moreover, technological innovation will always be embraced in order to provide all the necessary tools for the most efficient exercising of our clients’ banking operations.

How is the Bank treating the provision of loans, mortgages and credit cards at these bleak, financially, times?

Piraeus Bank Cyprus enjoys both a strong capital base as well as a selffunding status through its deposit portfolio. These two factors enable Piraeus Bank Cyprus to continue with the granting of new loan advances, a policy aiming to enable Piraeus Bank Cyprus to play an active role in the economy of Cyprus. And more specifically, we aim to continue to examine quality cases of healthy new 14 CyprusStandards.com

lendings towards both Individuals as well as Businesses. In the case of Individuals we seek to provide the necessary finance for personal and family needs concerning housing, consumer and other needs. In the case of Businesses, the target is to finance such enterprises that are of healthy financial status and can, in turn, play their role in the growth of the economy.

Having said that, Piraeus Bank Cyprus owes it to itself, its depositors and its shareholders, to exercise as prudent a credit policy as possible during the assessment of all type of loan applications. Our Bank’s Credit Policy combines good practices with the Credit Policy of Piraeus Group, and of course, always abiding by the Directives of the Central Bank of Cyprus.

How is the Bank adapting its policies and practices to protect both its own and its customers’ financial stability in these times of austerity?

The most prudent policy a Bank can follow is primarily to evaluate the repayment ability of the applicant (individual or business). To do this, the Bank must obtain all necessary financial information to ascertain the financial position of the client, the economic environment the client is operating in, various challenges and opportunities lying ahead, and of course the viability or plausibility of the specific proposition submitted by the client. For us, it is a clear-cut target to always try to avoid dangerous loan advances that can end up damaging the client, as well as the Bank, and consequently the relationship between the two. All these have always been an integral part of our standard practice and Credit Policy. In the current economic environment our officers need to pay extra attention to the strains the economy is going through, and what its effects (both in the macro-, as well as in the micro-economic sense) will be on the client and their economic position.

How has the balance between performing versus non-performing (‘red’) loans, mortgages and cards evolved in the aftermath of the haircut in Cyprus?

It goes without saying that our comprehensive loans portfolio has suffered a considerable deterioration during the past 2-3 years, as the economic crisis was unfolding. The liquidity shortages in the economy, the drop in economic activity, the ensuing unemployment, all took their toll on our clients and of course their loans with us. The haircut on deposits in the Bank of Cyprus and ex-Laiki Bank, and the Restrictive Measures imposed since last year, have further hit the economy, by effecting a reduction in wealth, incomes, and of course a shrinkage of the actual national economy. All these negative factors have caused the quality of our Loans Portfolio to worsen, as more loans than usual have been characterized as Non-Performing. It has to be said though, that our prudent credit practices exercised in the past have considerably mitigated this dangerous trend, allowing us to have a considerably better-thanthe-market balance (comparison made between our figures and the ones announced by the competition).

How is the Bank managing nonperforming loans?

The Bank, always abiding with the Directives of the Central Bank of Cyprus, investigates each particular case, always in cooperation with the client.

Efforts are made to assess the severity of the financial troubles the client is, or may soon be, facing, and hence the prospects of the ability to serve his loan obligations. As per the guidelines of the Central Bank, the “financial viability” of the client is ascertained, paying attention to differentiate the cases where the client’s apparent non-viability can be considered as temporary, with prospects to recover. Such an example could be if the client is presently going through a period of unemployment, accompanied by loss of income, but with hopes that in a relatively short period of time, he might find new employment and his financial position will recover. In cases of “financial temporary non-viability” the Bank tries to provide restructuring solutions that will offer the necessary breathing time to the client. Usually, such a solution would include the reducing of installments payable for a certain period, thus facilitating the liquidity of the client for the more

distressed period.

to the Bank’s prospects in Cyprus.

Could you please summarise the effects of the haircut on the branches, the customers and the staff?

Overall, what is your perspective of the prospects of banking in Cyprus?

As the clients of Piraeus Bank Cyprus have not suffered any haircut on their deposits, the effect of the haircut on Piraeus, its staff and clients, has been indirect.

In the aftermath of the haircut, the perceived safety offered by the strong economic position of Piraeus Bank Cyprus, has maintained a stream of new business. Individuals and Businesses seeking to stabilize their own economic position have opted to try to review their banking relationships. And thus a considerable number of new clients have chosen to set up a banking relationship with Piraeus Bank Cyprus. Of course the breadth of these new relationships is usually restricted by the current Restrictive Measures. Nonetheless, to the extent permitted by these Measures in each individual case, clients do enjoy the full set of products and services available to them from our Bank.

What are the plans for the future of Piraeus Bank in Cyprus?

Piraeus Bank Cyprus was from its outset poised to be an active player in the Cyprus banking market and economy.

Continuing on the same path even during these turbulent times, and always with the support of Piraeus Bank Group, our Bank is committed to offer quality services, build on the trust of its clients, continue to strive for maximizing the benefits offered to our clients, as well as the economy in general.

Towards these ends, Piraeus Bank will keep investing primarily on its most valuable asset, that being its Human Resource. I believe that providing a productive environment to work in, constant training opportunities, as well as encouraging a professional, clientcentric approach, will contribute vitally to the prospects of our Bank.

Moreover, the Piraeus Bank Group’s commitment to the cultivation of new ideas, and the utilisation of new technologies, can only play its own part 15 CyprusStandards.com

I believe that Banking in Cyprus is proving to be a very resilient industry, much like the Cyprus economy in general. It has undoubtedly taken a number of substantial hits in the past 2-3 years (the world economic crisis, the Greek crisis and the ensuing PSI of Greek Sovereign Debt, the Mari crisis and its effect on the economy, and eventually the Troika Memorandum and the haircut).

However, despite the original ominous predictions that pretty much drew a picture of collapse, the banking industry is now re-defining itself, planning for the future. This strength is based to a large extent on the level of knowledge, expertise and infrastructure that this industry is based on. And again, all important players in the Cyprus Banking system (Banks, Employees, Regulators, Government) appear to have the ability to learn from mistakes of the past and evolve. And all these appear to gradually re-earn the trust of even the clients that were the most hard-hit by the haircut. Cyprus continues to have its international banking business, despite the recent traumas it has sustained.

All in all, it is my personal belief that along with the much-predicted reappearance of growth in the economy by 2015, the banking industry will display some serious signs of recovery.

And despite the appearance of other important industries (such as gasexploitation), Cyprus Banking Industry will maintain a very important role in the economy of the country.

What does the successful completion of the increase in the share capital by 500 million Euro marks for Piraeus Bank?

What does it mean for the Bank and for the Cypriot banking sector, that despite controversies and uncertainties, that amount oversubscribed 6 times?

Piraeus Bank has recently announced its success to raise capital of about €500 million through the issue of a bond (with an oversubscription of 6 times) as well as to increase its share capital by €1.75

billion through the issue of new shares.

These exercises had many purposes, to cover the required by the Bank of Greece capital increase as prescribed by its recent stress tests and to redeem existing high-cost preference shares to which the Greek government subscribed in 2009, just to name two such purposes.

The success in both exercises, along with the high over-subscription, indicate that investors are displaying a high level of confidence for Piraeus Bank Group, its financial position, its prospects and its strategy. This success of Piraeus Bank, along with the similar positive announcement by Alpha Bank to raise €1.2 billion, have very much contributed to the display of confidence again to the Greek economy. And it is a matter of no coincidence I believe, that on 10/04/2014, the Greek government’s first attempt in many years to raise capital from the markets, had a similar success.

Just going to prove how intertwined the economy is with its banking sector.

So, on top of the strong capital base and its self-funded status that characterise Piraeus Bank Cyprus, the feeling of investors’ confidence on the side of the Piraeus Bank Group can only lend support to its Cyprus subsidiary. This will help boost the image of the Piraeus Bank Cyprus, in the eyes of the wider local and international market, allowing it to continue on its own track of growth.

The challenges lying ahead are certainly big, given the economic climate, but the conclusions drawn from the Greek example are that for the economic recovery to take place, a strong banking sector is needed. And Piraeus Bank Cyprus is determined to be an active player contributing positively to the economy of the country.

Christoforos N. Kaplanis is a graduate of the London School of Economics and Political Sciences in the field of Economics (B.Sc. and M.Sc.), is a Chartered Financial Analyst, has worked for the Cyprus Popular Bank, Alpha Bank Cyprus and has been working for Piraeus Bank Cyprus for the past 6 years (during which he was also briefly posted in Piraeus Bank Egypt). He has held various positions in Retail, SME and Corporate Banking, International Banking, Credit Risk and Alternative Channels.

Banking

COOPERATIVES New Facts and New Challenges Andreas Vyras Secretary / Director Co-operative Savings Society Ammochostou – Larnakas Ltd.

It is a fact that with the conclusion of the memorandum agreement and the recapitalization of the Cooperative Credit Sector by the State, many things have changed and our country’s Cooperative Movement enters a new era with new facts. What follows, is an outline of the most important changes and new challenges the Sector will be called to address in the years to come.

The main parameter that must be borne in mind when referring to the Cooperative Credit Sector is NOT to use the method of deposits impairment for the recapitalization just because it was judged as SUSTAINABLE by our lenders. Also, another key factor is that the depository base of the Cooperatives consists of deposits by Cyprus residents, hence the risk of foreign deposits outflow is quite limited. It is also a fact that the Cooperative has not resorted to the ELA mechanism for liquidity issues.

The Restructuring Plan that was recently approved for the Cooperative Credit Sector includes the mergence of ninetythree (93) CCIs to eighteen (18) CCIs. Other provisions of the Plan include the creation of a separate centralized management unit of the Non-Performing Loans (NPLs), closing branches, the plan of early retirement of staff, but most importantly the provisions for implementing proper banking practices in matters of granting loans, risk management, and strict processes of internal controls. In addition to the Restructuring Plan, the Cooperative Credit Sector must implement all the

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directives of the Central Bank of Cyprus on the management of Non-Performing Loans (NPLs). Regarding the NPLs, it is worth mentioning that the Cooperatives do not face issues with large exposures to businessmen who have invested in the real estate market or other groups.

It should be made clear that each of the 18 CCIs resulting from the merger, are separate legal entities and individual members of the Deposit Protection Scheme. Namely, the Deposit Protection Scheme covers the depositors of each of the CCIs separately for a deposit amount of up to €100,000 per CCI. Additionally, the provisions relating to joint accounts in the same CCI apply.

The recapitalization of the Cooperative Central Bank and as a consequence the recapitalization of the eighteen (18) merged CCIs has been ratified in a recent special event at the Ministry of Finance, and all procedures have been initiated. The roadmap, as described in detail in the Restructuring Plan, is being implemented in accordance with the timetable for the achievement of all goals.

There is no doubt that the main objective set before the Cooperative Credit Sector of Cyprus with the new facts as they have been formed with the signing of the Memorandum and the State support, is to maintain to the highest possible degree its anthropocentric character, but primarily to play a key role in Cyprus’s economic recovery.

BANKING TRENDS 2014

Business

Michael Pilikos

Director General of the Cyprus Employers & Industrialists Federation (OEB)

There is a general view that SMEs, the backbone of the Cypriot economy, suffer from serious structural problems and reduced competitiveness. Do you think that this is a fair assessment?

Cypriot businesses

face unprecedented challenges as a result of the financial crisis and other endemic factors. What are your views regarding the prospects of the economy and when do you expect it to recover?

There are no easy solutions to the problems our economy faces and a swift recovery is highly unlikely. We need to be honest with ourselves and call it as it is: unless we address the serious structural problems that plague our economy, economic recovery is far from certain.

Structural reforms are necessary but take time to implement. Judging by the decisiveness with which the current administration is implementing the terms of the MoU, which has already led

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to the first upgrade of our credit ratings in a few years, shows we are doing the right things. It will be a long and bumpy road but we are heading to the right direction.

The sooner we implement the necessary fiscal and structural reforms, the sooner we will be able to return to international markets and the sooner our economy will return to growth, only this time it will be on a sound footing.

Also, I expect that a positive outcome to the negotiations that have commenced between the two communities for a permanent settlement to the Cyprus problem and the reunification of the island will undoubtedly provide an economic boost and accelerate our recovery rate.

You are right that many Cypriot SMEs face reduced competitiveness but I am not sure this is always their fault.

Though structural and administrative inefficiencies may exist, currently the biggest problems most businesses face have nothing to do with how they operate but are for reasons beyond their control. For example, Cypriot businesses are obliged to pay the most expensive electricity in the EU. They also have to borrow, if they can borrow given the lack of liquidity, at some of the steepest rates in the Eurozone. Even prudent businesses that did well for themselves in spite of the crisis lost almost all or most of the cash they kept in the island’s two biggest banks at the blink of an eye in March 2013 due to Eurogroup’s illadvised decisions. All these factors take their toll on business competitiveness but businesses are not to blame.

The Cypriot banking sector faces challenges that undoubtedly affect the operation of businesses and, in some cases, may threaten their very survival.

What would you say are the biggest problems posed and what can be done about it?

The finance and credit problems Cypriot companies currently face fall within three broad categories: lack of liquidity and prohibitively high interest rates, loss of deposits and restrictions on transactions imposed by the Central Bank.

We can do a number of things to increase liquidity and reduce interest rates. First, we should do everything in our power to restore faith, stability and credibility in our banking system. Second, we should take measures to improve even more our image as an attractive investment destination including the reduction of red tape and the acceleration of all processes related to foreign investment.

Third, we should assist the banks in reducing their NPLs while making special arrangements where possible to help healthy businesses meet their obligations.

Assistance should be provided to companies who want to undertake major projects abroad, mainly in the construction sector, through the introduction of an adequate guarantee mechanism. Finally, we should proceed decisively with the implementation of the MoU so that our credit ratings will improve to a level that will allow us to return to the markets and draw liquidity from there.

Though very few things can be done with regard to the loss of deposits, at least transaction restrictions are being

we can shift from oil to natural gas to produce cheaper energy and we can help businesses reduce their electricity expenses in other ways. The latter can be achieved through the introduction of incentives to encourage companies exploit renewable energy sources, we are after all a Mediterranean island with considerable climatic competitive advantages, or by providing incentives to exploit new technologies that help reduce energy consumption.

Youth unemployment has exceeded 40% and many young Cypriots are forced to seek employment abroad as a result.

What should be done by the state and the business community to address this issue effectively?

The old model whereby the state created overpaid and often unnecessary jobs in the civil service and the wider public sector has failed spectacularly and at everybody’s expense. It should never be repeated and we should turn our attention to the private sector where most new jobs will be created as the economy slowly recovers. With this in mind, the

Private and public investments are required to help the economy recover.

From where will the funds necessary for these investments come from?

I have already discussed how we can help restore credibility in our banking system so I will focus on other ways we can draw funds from abroad and locally. The first and more obvious way is to sort out our public finances and this includes proceeding with privatisations and reducing unnecessary expenditure, targeting social transfers and reducing the state payroll. Even though much of these savings will go towards serving our debts, it will better enable the government to proceed with the implementation of mature projects.

Second, we should draw as much funding as possible from the European Development Bank and any other EU or international bodies where funding is available. We cannot afford to let a single euro available to us go to waste and the government should do everything in its power to make this funding available to businesses.

Third, we should improve even more

“Unless we address the serious structural problems that plague our economy, economic recovery is far from certain.� gradually lifted and it is my estimate that it will not be long before all restrictions are lifted.

The high cost of electricity puts many Cypriot businesses at a disadvantage compared to their international competitors. Is there anything that can be done to address this issue?

As I mentioned earlier, the cost of electricity in Cyprus is the highest in the EU. Given that the cost of electricity constitutes a significant inelastic expense for many businesses, especially in the manufacturing sector, its high price jeopardises their viability and the prospects for nationwide economic recovery.

We can reduce the cost of electricity in three ways: we can proceed with necessary privatisations in the energy sector that will introduce competition,

19 CyprusStandards.com

best service to the cause of employment government can do, is to help businesses get back on their feet. This includes implementing bold structural reforms, reducing taxation when that is possible, investing in research and development, encouraging entrepreneurship and reducing bureaucracy so that companies can do what they do best; grow and create new jobs.

Employment incentive schemes, provided they create no undesirable labour market distortions, may provide temporary relief to the thousands of the unemployed and we welcome such measures as part of a comprehensive employment policy.

However, considerable and more stable reduction in unemployment will only occur when the economy returns to growth and there is no better way to help achieve that other than supporting businesses.

our image as an investment destination.

Bureaucracy, for example, remains a problem for companies that wish to invest. CIPA, the Cyprus Investment Promotion Agency, carries out a very important mission and should be supported by all means.

Despite our shortcomings and the economic deterioration of the past few years, Cyprus is still an attractive investment destination with a very favourable corporate tax environment, a great geographic location, political stability and a high-calibre work force.

As a result of the crisis, co-operation between social partners is being tested.

How do these frictions in the industrial relations system affect the economy and businesses? Is there a way to relieve this pressure?

I choose to be optimistic. I use the word ‘choose’ because I am very well aware of the difficulties we face.

Had you asked me the same question in March 2013, I would have been far more pessimistic. But in the past year I have seen the determination with which we proceeded with structural reforms and I hope we do not lose momentum; Cypriot society demands reform and is ready to embrace change.

In the past year I bore witness to the huge sacrifices our companies and their employees made to weather the storm.

Implementing the MoU was often no pleasant experience but after three consecutive positive assessments from Troika regarding its implementation and outperforming our targets, I am truly proud of what we have achieved in such

In Cyprus we have an exemplary industrial relations system that has served our economy very well since independence. To their credit, most Cypriot trade unions have exhibited admirable self restraint as the labour market readjusted to the new conditions and we have avoided large scale industrial action that would be very disruptive to the economy and the efforts we collectively make for recovery.

There has always been a high degree of co-operation between the social partners, which on its own is a competitive advantage of our economy.

Cypriot social partners realise that we are all interdependent and with good will and through dialogue we can find the right balances and the right solutions to the common challenges we face. Surely, in these extraordinary times social dialogue faces extraordinary pressures but we have been through worse in the past, through much worse as a matter of fact. There is no doubt in my mind that despite the difficulties we face, social dialogue and our industrial relations system will persevere.

What is your outlook on the Cypriot economy?

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“Bureaucracy, for example, remains a problem for companies that wish to invest.” short time.

We have learned a lot from our mistakes and we are now taking corrective measures. Cypriots are a resilient, dignified and hard working people that can endure hardship and grow stronger out of it. Not all is bleak; we have natural resources, a great workforce and discussions to resolve the Cyprus problem are underway. Yes, it will take time before we implement all needed reforms and a number of imponderable factors are at play, but we are determined to see our economy recover. There is no other way for us than forward.

Economy

ENERGY, MANUFACTURING, SMALL AND MEDIUM ENTERPRISES Following the disastrous decisions of the Eurogroup in March 2013, Cyprus is experiencing an unprecedented economic crisis, with rapid changes, but especially negative social impacts, pointless repeating, as they are both known and much talked about. It is broadly accepted, that as long as the dogmatic philosophy of the Memorandum is imposed, the address of any negative impacts will not have substantial results. Even under the circumstances, it is necessary to identify those measures and policies that will alleviate the problems, improve the living and working conditions, strengthening our people and the society in general.

Following the stage of ascertainment, we must move on to the implementation of certain plans to give a perspective to the resolution of problems.

It is important to focus in the vital parameters that can help to redesign the economy. First, in relation to the primary sector, it is known that 35% of the total exports of the island is derived from fresh and processed agricultural veterinarian products, with very encouraging growth prospects.

Following, as a State, a comprehensive

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strategy in this area, the latter can have as action guidelines the rural economy and production, specialised activities for sectors with high added value, the reduction of costs for the producer, the disposal of production and the strengthening of exports, along with the improvement of the knowledge and support of the farmers, actions that will enhance the growth potential.

Another key parameter is that of the manufacturing industry, which especially after the accession of Cyprus to the EU and the abolition of tariff protection, faces serious problems of low productivity and increased competition.

As a result, many manufacturing plants shut down as some industries are eliminated, such as footwear and clothing. Additionally, the introduction of high technology and the application of modern methods of organization - administration - training of staff, are the most important problems this sector faces. For the industry to get back on track, it is essential that measures are taken, such as the introduction of high-tech in research and innovation in the production, the adoption of modern methods of organization

Yiannos Lamaris Parliamentary Representative AKEL - Left - New Forces.

Chairman of the House Standing Committee on Internal Affairs.

Member of the House Standing Committee on Financial and Budgetary Affairs and of the House Standing Committee on Trade and Industry.

and management, the education and training of human resources with the involvement and contribution of the Human Resource Development Authority and the Cyprus Productivity Center, the introduction of fiscal and financial incentives for technological enhancement and mergence of small manufacturing units within the same industry, the processing and promotion of funding programs for small manufacturing units for young entrepreneurs, granting tax incentives for attracting foreign investment in the

local industry, as well as the utilization of funds from the European Investment Bank for the industry.

Another equally important aspect that I strongly believe contributes substantially to the redesign of the economy and is the backbone of the Cypriot economy are the SMEs, whose contribution is vital in both the development of the economy and the competitiveness of the Cyprus business. The primary objective should be the immediate setting of a support plan for the SMEs that will focus on strengthening their dynamics by creating new jobs and reinforcing competitiveness both in the EU and the global markets. Our proposal is based on improving the business environment, promoting entrepreneurship, increasing accessibility to the foreign markets and the implementation of European instruments for small businesses. It is our belief that all this should be implemented quickly and efficiently in order to create the fundamentals that will help businesses grow sooner.

It is important to improve access to international markets and to offer motivates for the immediate emergence of results.

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Yet, Cyprus’s most important perspective for development and prosperity, is the exploration and exploitation of hydrocarbon reserves in Cyprus's EEZ. The timely implementation of the planning and creation of appropriate infrastructures utilizing the natural gas are the factors that will determine the potential benefits for our country. It is my belief that the independence of the implementation of the planning is of utmost importance in order to achieve our goals. In addition, the economics of the exploitation are equally important for the Cyprus economy and will need as part of a possible dominant course - to derive the maximum benefits. Moreover, the advent of natural gas will attract the interest of investors in derivatives exporting and processing industries, but also in energy-intensive industries, that due to the reduced cost of production, it will be in their best interest to establish a presence in Cyprus. In my opinion, energy self-sufficiency after 2020 will help to drastically reduce the cost of energy imports from abroad and at the same time create significant trends of increased competitiveness for the Cyprus economy.

Hence, a basic prerequisite for all the above is the smoothing of the state of the banking sector, the restoration of capital adequacy and liquidity and the creation of growth conditions. The State can play a significant role, having as guidelines of its policy the above parameters, as well as many others that contribute to the redesign of the economy. With a social - economic policy, the aim is to build a modern State, which will focus on its citizens and their needs. I consider as the responsibility of every political party and every organized group in the society to work towards exiting the crisis. This can be achieved through the redesign of the economy, by promoting development at all levels, with the upgrade of the policy of the State, by creating infrastructure for pumping and channeling investments into the economy, along with everything mentioned above. Essentially, we should rebuild all primary sectors of the economy using coordinated policies, through specialization and introduction of modern technologies. This is what Cyprus needs under the circumstances, progressive measures to exit the crisis.

Cyprus -

Economy

One Year On B y M i c h a e l D a m i a n o s * o f M i c h a e l D a m i a n o s & C O L LC C y p r u s L a w y e r, S o l i c i t o r o f t h e Supreme Court of England and Wales, Council Member of the Strovolos Municipality

It has now been a bit over a year since the March 2013 Eurogroup decision to impose unprecedented economic conditions on Cyprus in order for it to obtain a euro 10 billion bailout. A year on, unemployment in the country is at record levels, food banks have sprung up, retail trade has shrank, manufacturing production fell, and obviously so has the country’s GDP. As far as the banking sector is concerned, the bail-out conditions included the winding down of Laiki Bank with uninsured deposits of over euro 100,000 being wiped out, and the bail-in of the Bank of Cyprus with uninsured deposits of over euro 100,000 being slashed by 47.5% in exchange for shares in the same bank. Billions of euros in Laiki Bank were wiped out overnight and billions of euros in the Bank of Cyprus were turned into shares.

The obvious lack of confidence in the banking sector has also resulted in people withdrawing funds from their bank accounts and there has not been a further bank collapse simply due to the restrictive measures imposed by the government on more or less all types of cash withdrawals and bank transfers.

Cyprus banks now have billions of euros more outstanding loans than deposits in their books. Non-performing loans have increased rapidly and with the economy and property market falling, this means that they will keep increasing and that the bank collateral will shrink further. Short of cash and in need to deal with the non-performing loans, banks are, and will keep being, extremely stingy on new loans, depriving the market of badly-needed liquidity.

Restoring confidence in the banking sector in order to attract foreign investors and get savers to re-deposit funds with Cypriot banks won’t be an easy task and won’t happen overnight.

Banks won’t, therefore, soon be able to provide liquidity to the economy.

Despite the above, it is not all bad news. The general perception, both in Cyprus and in the EU, is that the Cyprus economy has proved to be more resilient than expected. Tourism in 2013 did rise and we are looking at a busy summer ahead (provided that the events in Ukraine do not heavily affect this). Foreign businesses do not seem to have fled the country, despite such initial fears. It could, therefore, be the case that Cyprus could, sooner

* Michael Damianos is a lawyer practicing in Cyprus since 2008, but qualified in both Cyprus and England & Wales (as a solicitor). Before practicing in Cyprus he qualified as a solicitor at the London office of Simmons & Simmons and then moved on to the London office of Lovells LLP (now Hogan Lovells), working for the then Energy, Power, Utilities and Infrastructure department. His main areas of practice in Cyprus are international and local mergers and acquisitions, general corporate and commercial work, fiduciary and trust services, energy/ projects, real estate, banking and capital markets.

Find him at : http://damianoslaw.com | Michael@damianoslaw.com 24 CyprusStandards.com

than expected, commence its recovery.

In order for the country, however, to commence its recovery, badlyneeded liquidity needs to be injected in the economy, mainly through foreign investment due to the condition of the banking sector. The imposed by the Troika de-nationalization of certain profit-making state-owned enterprises may be the start for foreign funds to be injected into the economy.

The government will, however, need to do much more in order to attract foreign investment, and foreign investment can only be attracted through incentives.

This is surely something that the government is working on and it is trusted that it will sooner rather than later lead to the commencement of the Cyprus economy’s recovery.

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Economy

CYPRUS REAL ESTATE MARKET: Is there light at the end of the tunnel?

Despite the expected stabilisation and minor

recovery of the economy, the downturn in the real estate market seems to further continue, mainly due to increasing levels of unemployment and persisting high percentages of Non Performing Loans (NPLs). Given the circumstances, it appears that transaction volume in the sector is at its lowest levels, whilst prices are most likely to continue decreasing in the short term due to subdued demand. Nevertheless, positive prospects for the Cyprus Economy and Real Estate market are starting to become visible as the worst part appears to be past us and we have entered a period of tentative stabilisation.

With regards to unemployment, the forecasted economic stabilization and GDP growth from 2015 onwards are unlikely to be enough to alter the general situation in the economy and the labour market any time soon. The decrease in GDP for 2013 was limited to 5.3%, which can be positively compared to the original forecast for a 8.7% decrease. Revised forecasts indicate a minor decrease of GDP during 2014 and an increase of 1.1% in 2015. At the same time the unemployment rate reached 17.5% in December 2013 and is expected to increase further during 2014, peaking north of

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19.0%. The expected recovery from 2015 onwards is estimated at GPD growth of 1.01.5% annually, which is unlikely to decrease the unemployment level below 10% before 2020, let alone contribute to the recovery of the Real Estate.

Recent data on unemployment also show that there has been a shift in the composition of the Labour Force of Cyprus, since not only the percentage of Cypriots in the Labour Force has been constantly falling since 2008, but that of EU and nonEU member states’ nationals has been increasing. The shift in the composition of the Labour Force demonstrates that as the economic crisis unfolded, employers replaced EU nationals with non-EU nationals. Furthermore, it appears that Cypriots are choosing to remain unemployed rather than undertake certain types of work, which appear to be taken-up by non-EU nationals; this could be either because they are not skilled for that work or because they consider the pay to be too low.

By extent, government schemes initiated to tackle unemployment should provide incentives for employers to replace their non-EU nationals with Cypriot employees.

Persistent unemployment levels in conjunction with a stable, but high level percentage of NPLs keep demand in

record-low levels, resulting in the decrease of the transaction volume and the plunge of the property prices. In 2013, the highest movement in total volume (31%) and purchases by foreigners (38%) were recorded in Paphos district, while 27% of sale and purchase agreements across Cyprus involved foreign buyers. The smallest number of sale and purchase agreements (583) was recorded in Famagusta district (6% of total), whilst the lowest percentage of transactions to foreigners was recorded in Nicosia (13% of total transactions, 92 properties).

Prices decreased across all cities and for all types of real estate. The largest decrease was recorded for shops (42% decrease in relation to 2009Q4) and the lowest for houses (26% decrease). The largest overall price decreases were recorded in Nicosia, since the capital was the last city to be affected by the crisis and its economy is largely reliant on the public and banking sectors.

The decrease in transaction volume and the drop in property prices do not present an accurate picture of the property market. There is a dearth of demand for land purchases (especially fields) and for constructions in secondary locations.

In multiple cases, especially for “mass production� real estate, even though prices

for sale

are below construction costs, there is no demand. Prime real estate attracts limited demand, but at distressed prices and usually in conjunction with payments involving ‘blocked’ deposits.

The high levels of NPLs imply that collateral disposals are essential and that there is likely to be a need for further recapitalization of the banks in the foreseeable future.

However, rationalising procedures and liberalizing information exchange between government departments and financial institutions are expected to increase the pressure on borrowers and allow for the financial system to function more effectively in relation to the management of its multiple problems relating to NPLs. An amendment in legislation for speeding up the process of real estate foreclosure is also underway, ensuring that properties are disposed of within 2.5 years of initiating legal proceedings for someone’s primary residence and 1.5 years for all other properties. Going forward, the establishment of NPL and property management units in all banks and COOPs is expected to serve as a platform for addressing the rising number of NPLs. Evidence suggests that with a proper response to the challenges affecting the short-term and long-term recovery of the sector, there is a light down the tunnel for

27 CyprusStandards.com

“A persistently high level of unemployment, combined with a high percentage of NPLs are keeping demand at record low levels and causing real estate to plunge”

Cyprus’s Real Estate. In the short term, the biggest challenge for Real Estate will be the prospect of developing within the British Bases, since this will significantly increase the supply of available land in Larnaca and Limassol. In the medium term, the economy will face the ongoing challenge of the banks’ deleveraging and foreclosure of real estate assets, while in the long term there will be multiple policy issues relating to the reckless incentives provided to boost construction by granting additional building density for various developments which has created ‘pent up’ oversupply.

Leaf Research provides real estate advisory services, valuation, and market research, utilising financial models to examine, analyse, and assess the risks associated with real estate investments.

Pavlos Loizou MRICS Leaf Research Managing Partner T +357 22 250 554 E pavlos.loizou@leafresearch.com W www.leafresearch.com

MIRACLE OF DUBAI WHAT CYPRUS MAY LEARN FROM IT Presentation made by Mr. Farooq Mohammad Ladha and Zayd Maniar, Partners Crowe Horwath, UAE, on 12 March 2014

The presentation was organized by G. Kouzalis LLC, in partnership with the assistance of TEVEA (Famagusta Tourist Commercial Industrial Association), and in association with SPEA (Association for the Promotion of Business in Famagusta), CIPA (Cyprus Investment Promotion Agency), and Giovani Developers Ltd. www.lawcyprus.org lawfirm@cytanet.com.cy

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Speeches were given by Tziovanis Kouzalis, Petros Petrou of Tevea and Mr. Christodoulos Angastiniostis of CIPA. Crowe Horwath UAE through their representatives Farooq Ladha and Zayd Maniar, presented their presentation, giving examples on how Dubai used its ‘advantages’ to prosper in to the current metropolis it now is! They explained that while Dubai had positive factors which led to investment Cyprus has additional factors which they can and should utilize, the 300+ days of sunshine, the tourism sector in Cyprus could be extended to be a 12 month season, taking advantage of the fantastic mild winter season and extending the income generated through tourism, its location within Europe and the EU, Cyprus has the infrastructure to become a tax haven and a large investment sector, to name but a few examples.

Mr. Farooq Ladha and Mr. Zayd Maniar gave an overview of the success story of Dubai.

They stated that pre-1970 Dubai was an important trading port and centre for

importing and exporting goods with neighboring countries, such as India, Pakistan, Iran and other Gulf Countries.

It was, however, a very small city with very little natural resources other than sea, sand and blue sky. Dubai has, however, been blessed with a very wise and visionary leadership with foresight to succeed as well as, enterprising, and benevolence skills.

With the realization that Dubai had to have more visionary and enterprising policy, to compete with other developed countries, in late 1970, visionary plan was prepared to establish Dubai as an attractive international tourist destination and regional business hub.

In order to achieve this, Dubai embarked upon a well thought out and coordinated plan overseen by the Ruling Family assisted by a team of dedicated efficient officials.

To increase the tourism in the country, Dubai: •A Key advantage for European and

international companies seeking to establish companies in Dubai is its zero tax regime with DTT signed with many countries, as one strong option for European and international companies for efficient tax planning. To maximize on such policies, most of the global top 100 firms to establish either their international branch or Head office in Dubai.

•Company formation prodecures are swift and concise which enable businesses to penetrate the market more efficiently & effectively.

• Created a world class airline, with the aim of connecting Dubai with all the major cities of the world. Emirates started in 1985 with two aircraft leased from Pakistan International Airlines and only second in the world with 220 aircraft, operating around 3,400 flights per week and covering more than 130 cities. This has made Dubai the ideal transit destination. In view of the increasing demand for low cost air travel, Dubai has established another airline, Fly Dubai, which has 35 aircraft and flies to 68 destinations.

• Dubai started upgrading its airports and has today, not one but two world class airports. Dubai International has three terminals and one of the largest duty free shopping areas in the world. Dubai annual air-traffic reached 66 million passengers in 2013. Sheikh Maktoum Airport has just been inaugurated and will be one of the largest airports in the world when fully operational.

•In order to attract visitors, Dubai embarked upon a liberal visa policy while being strict at security vetting procedures at the same time. Dubai was the first country in the Middle East to allow visa on entry to the residents of other Gulf countries, so they could visit Dubai during holidays and festivals.

•To accommodate the visitors, Dubai started building of a large number of hotels.

Today, Dubai has approximately 85,000 hotel rooms with 85% occupancy round the year; This has further attracted investors seeking to set-up businesses; whether in retail, commercial or professional services.

•To attract visitors and tourists, Dubai has a program of shopping, recreation and sports events round the year. Dubai organizes shopping festivals and exhibitions, trade shows and seminars and symposiums. The trade shows are an ideal means for international businesses to connect with the local market.

•World-class infrastructure: •The world’s Tallest Tower, Burj Khalifa.

•The World’s Tallest Hotel: J W Marriot Marquis.

•A very efficient and comfortable metro train system.

In order to be an attractive business hub and trading centre, Dubai: •Has two sea ports. Its Jebel Ali port is one of the largest container ports in the world.

•Twenty two free trade zones, where foreign investors may establish 100 percent wholly owned business entities; These free zones are a lesson in efficiency as the licenses to establish business and recruit employees are granted extremely swiftly and without a bureaucratic hassle.

•Created specialized business zones, such as the Health Care City, Internet City, Media City, Academic City, Knowledge Village to attract specialist international organizations to establish facilities in Dubai •Availability of office space. Today Dubai has a range of office accommodation available suiting every type of business organization.

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cooperation between the two countries.

The purpose of the seminar was to highlight the positives of Cyprus. The way forward in developing these ideas and bringing to fulfillment the prospect of a greater economy, is that we must change our mentality. We must think ‘outside the box’ and we must make informative, proactive and positive steps to ‘re-brand’ Cyprus and move forward.

We as the collective community must persuade the markets, Investors and People to TRUST Cyprus again.

•Created a property boom by selling properties with residential visas given to investors and foreigners while establishing extremely efficient procedures for land registration, etc.

A title deep, upon, purchasing a property can be arranged within an hour of making the payment.

Today, Dubai is on the world map as a most sought after, tourist destination, for round the year visits, a business hub, a centre for training and conferences, and the destination of choice for all travelers. Dubai has been selected to host the prestigious Expo 2020, which shall add another feather in its cap and put it even more prominently on the world map.

The presentation was also attended by: MP. Chris Giovani Ayia Napa Mayor, Mr. Antonis Tsokkos Paralimni Mayor, Mr. Theodoros Pyrillis Sotira Mayor, Mr. George Takkas Mr. Yiannakis Yiannakis of CO-OP bank of Paralimni Mr. Christos Koukkides and Antreas Kyprizoglou Law office of R. Erotokritou in Limassol F.S.A regulated Financial Advisors, Members of the TEVEA association Bankers, developers, business people of the East Coast

Mr. Ladha and Mr. Maniar also commented that whilst there were a lot of similarities between Dubai and Cyprus, Cyprus might adopt some of the policies successfully implemented by Dubai. Cyprus has certain positives also, such as: •Ideal, climate round the year. In spite of such lovely weather there are no visitors or tourists for six months in a year and all the facilities remain idle, this is a key issue that needs to be resolved.

•Cyprus is a part of the EU, and therefore attractive for EU visitors to establish business hubs and training centers here.

•Proximity to Europe and the Middle East.

•Developed sea ports and shipping industry.

Cyprus has suffered recently due to the economic down turn. However, with enterprise, vision and practical and attractive policies, Cyprus also has the capacity to be the world destination for tourism and business. Dubai and Cyprus have a lot of synergy and they 30 CyprusStandards.com

T +971 4 447 3951 F +971 4 447 3961 M +971 50 6458693 www.crowehorwath.ae

may work together to support each other and benefit from the trading and other activities.

The presentation was attended by Mr. Christodoulos E. Angastiniaotis, Chairman of the Board of CIPA, who while appreciating the ideas presented by Mr. Ladha and Mr. Maniar, stated that Cyprus was undergoing a fiscal discipline imposed by the EU and therefore may have to find ways to implement the free trade and investment policies applied successfully by Dubai. He also acknowledged that there was a synergy between the UAE and Cyprus and advised that the President of Cyprus was scheduled to visit the UAE in April 2014 to meet the rulers and other officials and explore the possibility of a closer

zayd.maniar@crowehorwath.ae

farooq.ladha@crowehorwath.ae

Finance

Demetra Kalogerou

Chairman of Cyprus Securities and Exchange Commission.

Interviewed by Dr. Theodore Panayotou Director of the Cyprus International Institute of Management (CIIM) and Professor of Economics and Ethics, CIIM, University of Tel Aviv, and Harvard University, Member of the President’s Council of the National Economy

the financial services sector are still facing risks that need to be addressed in order to restore investor confidence.

Amongst the steps taken, a concerted promotion of the comprehensive regulatory and supervisory framework in operation in Cyprus abroad should continue and intensify.

What are the main risks that the Financial Services industry of Cyprus is facing?

The current economic crisis has undoubtedly created or increased certain risks the economy of Cyprus, and its financial services sector in particular, is facing. The events of March 2013 put a huge strain on most companies, including the CySEC’s regulated entities that have been affected either directly or indirectly. We believe that the primary challenge is the reputational risk, which has led to loss of business and drop in volume of transactions. Also, the companies that engage in international activities and have an international

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clientele faced difficulties in obtaining new customers, due to the perceived country risk.

The multiple structural and fiscal consolidation reforms implemented by the government have had positive effects on the economy and serve to address these risks. This is evident from the successive positive evaluations issued by the Troika of international lenders and also in the upgrades of Cyprus government bonds by international credit rating agencies. The most recent example being that of Moody’s, which recently changed the outlook on Cyprus government bond rating from negative to positive.

However, the economy of Cyprus and

What are the regulatory steps that are needed to help transform Cyprus into a regional fund jurisdiction?

In the past three years, in collaboration with the Ministry of Finance, the CySEC has worked towards the enhancement and completion of the national legal framework concerning investment funds in order to facilitate and expand the investment funds industry in Cyprus. In this context, various improvements and upgrades have been implemented in the supervisory and regulatory framework, which are conductive to the development of an investment funds industry in Cyprus.

In particular, in June 2012, the Law regulating the Open-ended Undertakings on Collective Investment came into force. This has brought the

national legal framework in line with the European Directive for Undertakings for Collective Investment in Transferable Securities (UCITS IV) and made substantial additional innovations to the existing national legal framework in order to facilitate the establishment and operation of UCITS Funds and UCITS Management Companies in Cyprus.

Furthermore, the Law on Alternative Investment Fund Managers, which came into force in July 2013 as a result of the harmonisation of the national legal framework with the Alternative Investment Fund Managers Directive (AIFMD), introduced a number of important regulating changes.

In addition to the above, the legislation on collective investment undertakings, other than UCITS, known as the

jurisdiction that offers many competitive advantages such as, among others, access to EU client pool, efficient supervision according to EU and international standards and best practices, favourable tax structures and highly skilled multilingual workforce.

What are the global trends in the Financial Services industry?

A rising introduction and interest in new financial products and practices is observed in recent years. This was the result of both financial innovations but also due to a general decline in returns, which drives investors to search for more complicated products that may offer higher returns. Examples of this trend include crowdfunding, automatic

risks. For this reason, the CySEC is preparing a new project that will upgrade the investor education system vis-à-vis investment in transferable securities.

More details will be announced soon.

What are the chances of the Cyprus Stock Exchange (CSE) revival?

The prospects for a CSE revival and growth are certainly present and the current crisis could potentially turn out to be a big opportunity. We certainly hope so, since stock markets offer an important alternative way to bank loans for companies to raise capital. In the case of Cyprus, the stock market can play an important role as a source of funds for new ventures and start-ups, in a period of scarce bank loans and high lending

“Further prospects for the CSE exist in the emerging sector of energy, due to the expected earnings from natural gas explorations in Cyprus’ Exclusive Economic Zone.”

Alternative Investment Funds Law, is being prepared. This piece of legislation will regulate the establishment and operation of Alternative Investment Funds in Cyprus, which are currently regulated by the International Collective Investment Schemes (ICIS) Law and are supervised by the Central Bank of Cyprus. By virtue of the new legislation that is being prepared, the supervision of these funds will be undertaken by CySEC. This will bring the regulation of all collective funds under one supervisory roof, that of the CySEC, and it will effectively complete the regulatory and supervisory framework for funds in Cyprus. Following this, we expect to see increased interest from investors from Cyprus and abroad to set and manage funds from Cyprus. We already have 36 foreign funds with a total of 512 subfunds and 3 Cypriot funds with 14 subfunds. We also have authorised 2 UCITS Management Companies, while we have received 4 applications for alternative investment managers.

However, there is still a need to promote Cyprus internationally as a funds

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execution/advice platforms and virtual currencies. There is also an increasing focus on technology-related innovations, such as web trading platforms, forex trading platforms, automatic execution and advice platforms, High Frequency Trading etc.

However, increased interest is observed and in certain existing products such as Contracts for Difference (CFDs), options and derivatives, binary options and hybrid securities or convertible bonds.

The supervisory authorities monitor the trends and analyse the risks to investor protection, including the degree of complexity of a financial instrument relative to the client profile and how well the existing regulations address those risks. When weaknesses are identified, the regulation is revised as promptly as possible aiming to strengthen both investor protection and financial stability.

In view of increased financial innovation and the onset of new and more technological and complicated financial products, we support a more concerted effort to be put into financial education to raise consumer awareness of financial

interest rates. This will in turn create valuable job positions and help combat the rising unemployment.

The CSE could be a constructive tool in the process of privatisations of certain public utilities that are currently underway, should the government decide that these are conducted through the stock exchange. In this case, the value of these utilities will result in a drastic increase in the market capitalisation of the CSE. Further prospects for the CSE exist in the emerging sector of energy, due to the expected earnings from natural gas explorations in Cyprus’ Exclusive Economic Zone.

Two companies with energy-related operations have already been listed on the CSE. The CSE is also going ahead with plans for the establishment of a market for commodities and derivatives which will enrich the services offered to investors and are thus expected to boost investor interest.

Does the CySEC needs more powers? To do what?

In the last few years, the CySEC has been

empowered with mostly all the necessary powers and authorities necessary to fulfil its mandate and conduct its investigations without any notable challenges. The CySEC now boasts a robust and comprehensive regulatory and supervisory framework, in line with the European and international standards of investor protection.

However, it is paramount to note that to apply this regulatory and supervisory framework effectively, the CySEC is in urgent need of being strengthened with much needed human resources. Should the CySEC be empowered through an increase in its personnel, it will be better equipped to conduct investigations and conclude findings more promptly.

Furthermore, to better fulfil its mandate and highlight its independency, the CySEC should have full budgetary independence. This is in line with the recommendations of the European Securities and Markets Authority, the European supervisory authority for the securities markets.

numbers, it is easy to deduct that the sector offers substantial revenues in the form of taxes and other fees paid to the state. Furthermore, the companies of the sector have a large indirect contribution to the economy through the salaries to their employees and payments to local professionals such as lawyers, accountants and others.

At the same time, they offer valuable job positions in a period of raging unemployment and very little start-

How can we estimate the value of the financial services and the forex sector to Cyprus?

Capital markets are considered to be significant drivers of economic growth and, according to new research on the topic, their increasing size could compensate for the post-financial crisis decline in bank lending. The new research finds that capital markets support economic growth by providing new sources of funding for long-term investments, something that Cyprus could benefit a lot from. Further, the research underlines the link between activities by pension funds, non-bank lenders and active investors such as hedge funds to the growth in the real economy.

Especially for Cyprus, having a strong financial services sector has many benefits. The financial services sector in Cyprus has proven remarkably resilient following the events that followed the Eurogroup’s decision of March 2013.

Today, the CySEC supervises around 340 companies and has, until today, received around 190 applications for setting up new companies. From these

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ups. To give you an example, one of the large Cyprus Investment Firms (CIF) employs more than 900 people. To also give an indication of the importance of the sector, I would like to mention that, from data collected by the CySEC, around 2/3 of the CIFs have made transactions of more than 4.9 trillion Euros in 2013. This figure for 2011 was around 2.9 trillion Euros, which reveals the growth prospects of the sector and the increasing contribution it can make to the Cyprus economy. One last thing to mention is the fact that, by bestowing trust on Cyprus by setting

up companies in the jurisdiction, the foreign entrepreneurs help to reinstate the overall investor confidence in the economy and contribute to the further attraction of much needed capital inflow.

How can the Financial Services industry help the country come out of the recession that we are experiencing?

Based on the value and the importance of the financial services industry I have just mentioned, we believe that it can indeed contribute to the country’s efforts to come out of the recession and return to a path of growth and prosperity. The services economy and the financial services market in particular has been a key contributor to the national economy for many years. And, as evident by the inflow of applications for the authorisation of new companies, the interest of investors from Cyprus and abroad, remains. The setting up of these new companies in Cyprus implies the creation of numerous new job positions that would help combat the record high unemployment rates and increase activity and revenues for an array of other professionals such as lawyers, accounting firms, insurance professionals and others.

These companies will also contribute to improving in the conditions of the national economy through acquisitions of properties, buildings, rental of office spaces and other, as well as through the fees, taxes and other payments they will be making to the local authorities once they become active and for many years to come. Lastly, the financial services industry reflects the professionalism and quality of the Cypriot services sector to investors abroad and thus it can assist in the restoration of a positive international image for Cyprus which could prove conductive to attracting inward investment in other related or unrelated sectors of the economy. As you can understand, the investment services sector has a lot to offer, however, it should be noted that for the sector to fulfil its growth potential and maximise its contribution to the Cypriot economy, the state must adequately recognise its importance and key actions must be taken to support it.

Sources: U.S. Geological Survey, GFMS World Gold Council, Trustable Gold, TrustableGold.com

Finance

Are you ready to report?

EMIR Regulation Overview EMIR EMIR (European Market Infrastructure Regulation) applies to financial and non financial corporates as soon as they enter into derivative contracts.

By Andreas Roussos, Sales manager of Confisio Group www.confisio-group.com

What does it mean? lYou have to report all your external and inter-group derivative contracts to a Trade Repository. lYou have to clear your OTC derivative contracts that are subject to the clearing obligation (if you exceed the clearing threshold). The clearing obligation only applies if a corporate has billions (in EUR) of speculative derivatives that are not linked to its commercial activity. lYou have to apply risk mitigation techiniques to your OTC derivative contracts.

Overview of EMIR Requirements The following table shows which entities are subject to specific EMIR requirements.

Registered Trade Repositories The following trade repositories have been registered by ESMA:

Trade Reporting – Backloading of Trades 36 CyprusStandards.com

EMIR – EU Regulation Regulation (EU) No 648/2012, better known as EMIR, is setting out the legislative framework and standards for regulating OTC derivatives, central counterparties and trade repositories. Here is the EMIR Regulation in the official EU languages - © European Union, http://new.eur-lex.europa.eu/ EMIR – Financial Instruments The EU Directive 2004/39/EC, better known as Markets in Financial Instruments Directive or ‘MiFID’, is an integral part of EMIR as it provides the list of financial instruments which are subject to EMIR.

Overview of reporting / backloading timeline. Despite February 12, 2014 having passed, a large number of corporates are yet to report.

Please note that for transactions concluded on or after August 16, 2012 and still outstanding on February 12, 2014, according to ESMA (January 2014) the grace period of 90 days does not apply, they have to be reported on February 12, 2014 at the latest.

Timely Confirmation l Entities should focus on updating internal procedures and good-faith efforts to comply with the timelines and use electronic confirmation platforms where available lConfirmation requirements apply to both counterparties lSpecific final confirmation deadlines are applicable per asset class, which are also tighended over time - see below table. Please note that the starting dates to comply with new confirmation deadlines are given by law and are not related to other dates like start of trade reporting

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Finance

Portfolio Reconciliation l Entities will be required to agree with counterparties before trading, how portfolios will be regularly reviewed to identify any disagreements regarding key terms or valuations and reconciled l They must cover the key trade terms and the valuation methodology l They may be delegated to a counterparty or a third party lThe frequency of reconciliation is dependent on the status and number of trades

Portfolio Compression lOnly applies to FCs and NFCs that have more than 500 trades outstanding with a single counterparty l Compression is a mechanism by which similar or offsetting transactions can be replaced with a smaller number of transactions with a lower notional value amount lThere must be procedures in place to analyze the possibility to compress at least twice a year and to provide a reasonable and valid explanation if compression is not performed Dispute Resolution l Entities need to have detailed procedures and processes in place to:

• Identify, record and monitor disputes regarding valuations and the exchange of collateral

where applicable. They are required to record at least the length of time the dispute is

outstanding, the counterparty and the amount in dispute

• Establish a specific process (e.g. third party arbitration) for disputes that remain

unresolved for more than 5 business days lFCs are required to report any disputes in valuation or exchange of collateral for an amount higher than EUR 15 million and outstanding for at least 15 business days Clearing Obligation (irrelevant for NFC-) Clearing obligation applies to FCs and NFC+s, i.e. non-financial counterparties exceeding the clearing threshold. The clearing threshold (related to the gross notional values of trades) is an amount set by class of OTC derivative contracts according to ESMA Technical Standards as follows:

Not all OTC derivative contracts count towards the clearing threshold. Those OTC derivative contracts entered into in order to reduce risks relating to the commercial or treasury financing activity of the non-financial entity, or of non-financials of the group it belongs to, are excluded from the calculation of the clearing threshold (in other words: contracts for the purpose of “hedging” are excluded for the calculation of the threshold).

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The clearing obligation would apply to all OTC derivatives contracts concluded after the clearing threshold was exceeded, irrespective of the asset class to which these OTC derivative contracts belong to and no matter which purpose they have (hedging or speculation).

Corporates will need to make notifications to the competent regulatory authorities, i.e. the relevant national authority and ESMA, once the gross notional value of derivative positions is exceeded. Only if the average rolling position over the previous thirty days exceeds further a threshold, then a future clearing oblgiation for newly concluded contracts applies. These calculations must be made with regard to positions held by all non-financial entities in the consolidated corporate group, regardless of whether the entities are located within the EU. Non-financial companies may benefit from an exemption from the clearing obligation for intragroup OTC derivative contracts when certain conditions are met (including notification to, or authorization by the relevant competent authority).

Based on ESMA’s Q&A document, the following rules apply for calculating the clearing threshold within a group of counterparties: l NFC (EU) with NFC (EU) of same group: double counting of trades. l NFC (EU) of the group with external counterparty: single counting of trades. l FC (EU) of the group with external counterparty: no counting of trades. l NFC (Non-EU, but equivalent to EU) of the group with external counterparty: single counting of trades. l NFC (EU) with NFC (Non-EU, but equivalent to EU) of same group: double counting of trades.

Please note: l Only speculative trades are considered; l Thresholds are calculated on group level; l Only fully consolidated entities are counted towards the clearing threshold; l Netting per counterparty / contract type allowed; l If hedging, then entire “chain” is hedging (i.e. bank with NFC, NFC intragroup trade with another NFC).

Daily Valuation of Contracts (irrelevant for NFC-) l Only applies to FCs and NFC+s l FCs and NFC+s are required to mark-to-market all outstanding OTC contracts on a daily basis l Where market conditions prevent marking-to-market, market-to-model may be used if the

model meets specific criteria and is documented and approved by the board of directors at least annually LEI / GEI The Legal Entity Identifier (LEI) is a 20 digit alpha-numeric reference code to uniquely identify parties to financial transactions worldwide throughout all markets and legal systems. The global LEI system would contribute to and facilitate many financial stability objectives by quickly and clearly identifying entities, corporate networks, and connections between issues and the issuer.

The General Entity Identifier (GEI) is a preliminary stage leading to the LEI and will be changed into this as soon as the global LEI system is established. All companies and funds worldwide should be clearly identifiable using this system. The national or supranational lawmakers determine which legal entities need a GEI. It is expected that the LEI will be required by many authorities and institutions worldwide once the global LEI system is in place.

Currently, the GEI is required for reporting within the scope of EMIR (European Market Infrastructure Regulation). A GEI has to be obtained for every single legal entity (within the EU) of a group that has either internal derivative transactions or external transactions with e.g. local or any other banks, also outside the EU. GEI registration is available e.g. on www.geiportal.com provided by WM Datenservice. The registration costs EUR 150,- including the fee for the first year, prolongations will cost EUR 100,- per year.

LEIROC - The Legal Entity Identifier Regulatory Oversight Committee - is a committee of authorities from around the world working to coordinate and oversee a global system of legal entity identification. LEIROC was established after recommendations by the international Financial Stability Board (FSB) and subsequent endorsement by the Group of 20 (G-20) nations.

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Energy

Photis Photiou Fo r m e r M i n i s t e r o f D e f e n s e

It is of course obvious that we need to take every little step wisely and carefully, and take into consideration all of the factors in the decision making process regarding the reserves; I strongly believe that the discovery will eventually enhance the security of Cyprus.

Interview with Mr. Photis Photiou, Former Minister of Defense Do you believe that the discovery of the hydrocarbons and the subsequent investigations in the Exclusive Economic Zone of the Republic of Cyprus undermine or enhance the security of Cyprus?

The discovery of significant hydrocarbon reserves in our Exclusive Economic Zone

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gives Cyprus a unique opportunity.

We can take advantage of this opportunity and use it as a catalyst to establish a broad regional cooperation, which, in turn, will contribute to the peace and stability in the area and will also strengthen the energy security of our neighborhood and of the European Union. The discovery has already brought foreign investors resulting in a much needed boost of the economies of the countries in the area. Even though our economic situation has started stabilizing, we have a long road ahead of us, and we need these foreign investments to make the travel a little bit easier.

At the same time, we have to be realistic.

Cyprus, at the moment, still has limited capabilities. We will, however, keep moving ahead with our energy planning, exercising our sovereign rights in our EEZ as member state of the United Nations and the European Union.

I would like to clarify that the hydrocarbons are the property of ALL citizens of the Republic of Cyprus, and everybody will benefit by the correct and wise exploitation of this natural wealth.

Do you believe that the discovery of new hydrocarbon deposits and possibly oil in the Eastern Mediterranean, coupled with the prospect of the creation of energy networks, could highlight the region as an alternative to Europe’s energy security?

The European Union has identified the need to ensure its energy supply, which was introduced in Treaty of Lisbon. One of the ways to improve the security of Europe’s energy supply is the diversification of its energy suppliers. The gas crises between Russia and Ukraine in 2003 and 2009, as well as the current crisis in that region, prove the necessity of energy security; and quoting Barrack Obama, “A nation that can’t control its energy sources can’t control its future.”

It is also no coincidence, the fact that last March, the European Council as part of its conclusions, set as a priority the elaboration by June 2014, of a comprehensive plan to reduce the energy dependency of the European Union, highlighting in this respect the strategic importance of energy reserves in the Southeastern Mediterranean.

How could Cyprus, as a member of the European Union, contribute to the energy security of the troubled eastern Mediterranean?

The policies of the European Union provide several guidelines for the Member States, which aim directly or indirectly at increasing the security of the energy supplies for the Union, the Member States, but also regionally. These include several subjects, some which do not lie completely in the competency of the Ministry of Defence, such as cybersecurity, asymmetric threats, piracy and others.

The European Union, in the framework of the Common Security and Defence Policy, launches operations in areas or countries affected by crises, due to armed conflicts or violation of human rights. I believe that this can indirectly increase the energy security of the Eastern Mediterranean.

Cyprus, as a Member State of the European Union, actively participates in these Operations.

It is also important to mention that, Cyprus, along with France and Spain lead the efforts of publishing a document related to maritime security, which will be used as the basis for drafting the European Strategy on Maritime Security.

Our plans to become an energy hub in the region and a part of an energy distribution network, while also being an energy source ourselves, considering the excellent relations that we maintain with our neighbors, will undoubtedly provide a valuable boost to the energy security of our region.

Do you think that the energy factor requires revision of hitherto defense policy of the Republic of Cyprus?

With the discovery of hydrocarbons in our EEZ, we also acquired increased responsibilities. Our sovereign rights in our EEZ demand that we provide adequate defence and protection. Cyprus owes it to its citizens to be able to properly defend their common offshore wealth, and for this reason we have been working very hard in order to review our defence policies and also to acquire the required military capabilities that will enable us to provide a safe and secure environment, both onshore and offshore.

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Do you believe that Turkey can act as a destabilizing factor in the Eastern Mediterranean, if it continues to deny the right of Cyprus to exercise its sovereign rights in its sea zones?

An issue that is open until today is the possible participation of Cyprus in the Partnership for Peace. How do you consider that this potential will enhance the Republic of Cyprus?

Turkey’s continuing actions are certainly a significant destabilizing factor in the area.

Turkey has to realize that it should not only declare that it wishes to have “zero problems” with its neighbors, but this should be followed by specific actions as well. Turkey must stop its provoking policy in the area.

Since Cyprus is part of the European security system, its application to join the Partnership for Peace (PfP) Program should be seen as a positive development for the shared strategic security interests and concerns both of the EU and NATO. In fact, it will highlight Cyprus’s geostrategic and geopolitical role in the eastern Mediterranean region. Moreover, it will contribute to further involve Europe in challenging security issues. Bear in mind that Cyprus, at the crossroads of three continents, offers a number of benefits and potentials for NATO and its Allies. It should be also pointed out, that currently, Cyprus renders important assistance and facilities on a bilateral basis (e.g. France, Germany and Canada) as well as on a multilateral basis (presence of UNIFIL Maritime Task Force in Limassol).

Do you think that the evolving relationship with Israel may last over time and affect the new security architecture in the Eastern Mediterranean?

It is a fact that during the last couple of years, our relations with Israel have strengthened. We share the same vision of peace and stability in the area of the Eastern Mediterranean and, as all the countries in the region, we have benefited from an increased sense of security. At the same time we maintain excellent relations with all of our neighbors and this can help Cyprus play an important role in promoting the much sought after peace and stability.

How would you see a more active involvement of Russia in both the energy game as well as in the security of the Eastern Mediterranean?

The Russian Federation is an energy superpower and the EU’s most important single supplier of energy. At the same time, Europe is the most important consumer for Russia’s energy exports. Russia has also signed energy related agreements with Israel and it is only logical to witness Russia’s efforts to be part of the energy plans in the Eastern Mediterranean. And since energy security has a tremendous impact on the prosper of well-being of every country’s citizens, I think we will see increasing efforts from the big energy players, to be part of the game, as reserves are being confirmed.

In addition, joining the PfP Program will contribute to the effective solution of the problems concerning the cooperation between the EU and NATO (institutional and operational level), while at the same time, Cyprus will refrain from being the exception amidst the other 27 EU Member States that are either members of NATO and/or PfP. Against this background and in order to be capable of addressing the contemporary, asymmetrical threats, it is also necessary to strengthen the relations between the two organizations, especially, due to increasing reduction in both organizations’ defence budgets. At this point it should be clarified that the intention of Cyprus to join the PfP would, by no means, harm the traditionally friendly relations with Russia or the excellent relations with Arab countries.

Finally, the PfP Program offers the possibility to exchange information on security and defence issues while Cyprus could participate in a series of educational and training seminars such as boarder security, humanitarian issues, cyber defence, maritime and energy security, counter-terrorism, crisis management etc.

A r g y r i d e s & A s s o c i at e s

A r g y r i d e s & A s s o c i at e s , e s ta bl i s h e d s i n c e 1 9 6 7 , s p e c i a l i z e s i n va r i o u s a r e a s of c or p or at e a n d c o m m e r c i a l l aw w i t h t h e m a i n f o c u s i n t h e f ol l o w i n g :

» C o m pa n y F or m at i on a n d I n t e r n at i on a l B u s i n e s s » C or p or at e M a n a g e m e n t a n d d o m i c i l i at i on s e r v i c e s » Virtual Office Services » M a n a g e m e n t a n d A d m i n i s t r at i on S e r v i c e s » Or g a n i s at i on a l S t r u c t u r e s » W i n d i n g Up / L i q u i d at i on » F or m at i on a n d u s e of T r u s t s a n d F o u n d at i on s » Contractual Drafting » C or p or at e a n d C o m m e r c i a l L aw

A d d r e s s : 4 5 , N i c o u D e m e t r i o u , R o s e C o u r t, 3 r d f l o o r | L a r n a c a 6 0 3 1 | C y p r u s

A d v o c at e s & l e g a l c on s ulta n t s

Other Areas of Practice include:

» A c q u i s i t i o n o f I m m o va bl e Pr opert y in C yprus » Banking & Finance L aw » Intellectual Pr opert y L aw » M i g r at i on L aw » Competition L aw

w w w. a r g y r i d e s l aw. c o m

T el : + 3 5 7 2 4 6 5 5 3 6 0 | Fax : + 3 5 7 2 4 6 5 1 7 7 0

» employment L aw » Eur opean Union L aw » Insurance L aw » L i t i g at i on & A r bi t r at i on » Media L aw » Trusts

Sergiy Kudryavsky General Director of LUKOIL Cyprus Ltd

b y D r . M a r i o s Va l i a n t i s ( Д р . М а р и о с В а л и а н т и с ) , D i r e c t o r , C e n t r e f o r G r e e n D e v e l o p m e n t a n d E n e r g y Po l i c y, C o o r d i n a t o r , E n e r g y, O i l , G a s a n d E n v i r o n m e n t A c a d e m i c P r o g r a m e s , U n i v e r s i t y o f N i c o s i a

Biography / Биография: Mr Sergiy Kudryavsky General Director of LUKOIL Cyprus Ltd Date of Birth 16th of January 1973 Married, has two children In 1998, Mr S. Kudryavskyy graduated from Kiev State University named after T. Shevchenko Mr S. Kudryavskyy started his employment at L UKOIL Groups in 2000 in LUKOIL Ukraine In 2003 Mr S. Kudryavskyy moved to the LUKOIL Refinery in Odessa In 2005 Mr S. Kudryavskyy was transferred to LUKOIL Cyprus Ltd In July, 2013 Mr S. Kudryavskyy was appointed to the Position of the General Director of LUKOIL Cyprus Ltd As an experienced, qualified and competent manager, Mr S. Kudryavskyy believes that the presence of LUKOIL in Cyprus is strengthening the economic cooperation between the Republic of Cyprus and the Russian Federation and opens promising new investment opportunities for the business communities of the two countries

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Сергей Эдуардович Кудрявский Генеральный директор «ЛУКОЙЛ Кипр Лтд» Дата рождения: 16.01.1973 Женат, имеет 2 детей В 1998 году окончил Киевский национальный у ниверситет им. Т. Шевченко С.Э. Кудрявский начал свою трудовую деятельность в Г руппе Компаний «ЛУКОЙЛ» в 2000 году в Организации «ЛУКОЙЛ – Украина» В 2003 году С.Э. Кудрявский был переведен в «ЛУКОЙЛ-Одесский НПЗ». В 2005 году С.Э. Кудрявский получил перевод в Организацию «ЛУКОЙЛ Кипр Лтд» . В июле 2013 С.Э. Кудрявский назначен Генеральным директором «ЛУКОЙЛ Кипр Лтд» С.Э. Кудрявский, как опытный организатор, высококвалифицированный, грамотный специалист и руководитель, считает, что деятельность Компании «ЛУКОЙЛ» на Кипре служит укреплению экономического сотрудничества между Республикой Кипр и Российской Федерацией и открывает новые перспективные инвестиционные возможности для бизнес-сообществ двух государств.

English

1

2

You are one of the giants in the field of oil with businesses in many areas of the world. What influenced your decision to enter the Cypriot market in 2002?

3

What is your strategy and plans for the future in Cyprus?

LUKOIL is one of the world’s leading vertically integrated oil & gas companies. Main activities of the Company are exploration and production of oil and gas, production of petroleum products and petrochemicals, and marketing of these outputs.

At the early 2000 the main strategy of LUKOIL was an active expansion of its own Retail networks abroad. Within the Mediterranean, the Company planned to purchase the Retail Network in Italy, Spain and Greece. In this regard, the Cyprus market was examined as an additional asset to the above mentioned Networks.

4

Compressed Natural Gas (CNG) is currently used in many parts of the world as fuel for transportation. Do you see LUKOIL Cyprus Ltd playing a major role in the distribution of CNG in Cyprus should the Government introduce all the necessary legislations?

1

5

Pусский

3 4

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деятельности компании в кипрский рынок инвестировано более 40 млн. долл. на приобретение, строительство и реконструкцию АЗС. В результате, АЗС ЛУКОЙЛ Кипр отвечают самым высоким мировым стандартам безопасности и качеству. Какова Ваша стратегия и планы на будущее на Кипре? В условиях сокращающегося розничного рынка страны, первоочередной задачей является удержание доли рынка. В данный момент крупных инвестиции в расширение сети компания не планирует. Сжиженный природный газ (СПГ) используется в настоящее время во всем мире как топливо для транспорта. В случае если Правительство Кипра внесет необходимые изменения в законодательную базу, видите ли вы «ЛУКОЙЛ-Кипр Лтд.» ведущим игроком в распределении СПГ на Кипре? ЛУКОЙЛ Кипр первая компания на Кипре, получившая разрешение на установку газового модуля на АЗС. Поданы заявки на получение аналогичных разрешений еще на 6 АЗС. Серьезно о газовом розничном рынке можно будет говорить только после принятия соответствующего законодательства. Правительство Кипра должно сделать все для скорейшего его принятия.

В 2002 «ЛУКОЙЛ» приобрел 16 станций у BP Cyprus Ltd и ExxonMobil Cyprus Ltd. Насколько увеличилась сеть с тех пор и какова Ваша доля рынка на Кипре в настоящее время? В настоящее время розничная сеть компании «ЛУКОЙЛКипр Лтд.» составляет 30 АЗС. Основной деятельностью организации является розничная реализация нефтепродуктов и фасованных масел. Доля в общем объеме розничных продаж нефтепродуктов на внутреннем рынке составляет 10%. Наша компания уделяет особое внимание проектированию, дизайну и сервисному обслуживанию своих АЗС. Все станции представляют собой многофункциональные комплексы, включающие в себя автомойки, магазины, кафетерии, системы электронных платежей и другие современные сервисы. С начала

How do you see Cyprus’ energy sector developing in the near future and how this will affect the long term strategy of LUKOIL Cyprus Ltd? It is quite obvious that the developing process of Cyprus’s energy sector depends on how successful the construction of the LNG infrastructure to be developed in Cyprus will be. What is of major significance, is the need for an update in the current Legislation that will protect the rights of all involved parties, including the interests of potential investors.

Вы являетесь одним из лидеров нефтяной отрасли с бизнесом, представленным во многих регионах мира. Что повлияло на Ваше решение войти на рынок Кипра в 2002? ОАО «ЛУКОЙЛ» является одной из крупнейших международных вертикально интегрированных нефтегазовых компаний. Основными видами ее деятельности являются разведка и разработка месторождений нефти и газа, производство и реализация нефтепродуктов, нефтехимической продукции и электроэнергии. В начале 2000 –х стратегическим планом ОАО « ЛУКОЙЛ» являлось активное развитие зарубежных сбытовых активов. Относительно средиземноморского региона: были планы по приобретению сети АЗС в Италии, Испании и Греции. В этой связи, Кипрский рынок рассматривался с точки зрения дополнительного актива в средиземноморье.

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LUKOIL Cyprus Ltd was one of the first Oil Companies in Cyprus that had received a License for the installation and operation of equipment for CNG. Currently, we have applied for the Licenses for another 6 Petrol Stations within Cyprus. Unfortunately, serious talks about CNG markets in Cyprus would be possible only upon the approval of relevant Legislations. Cyprus Governmental Authorities need to put more efforts in order to speed up this process.

In 2002, LUKOIL purchased 16 stations from BP Cyprus Ltd and ExxonMobil Cyprus Ltd. How have you grown since then and what market share do you have in Cyprus today?

Currently, the Retail network of LUKOIL Cyprus Ltd consists of 30 petrol stations. The main activities of the company are the retail sales of petroleum products and packaged lubricants. Our market share is about 10% of the total retail sales of petroleum products in the domestic market. Investments in acquisition, renovation and modernization in 2002-2013 were more than 40 million USD. Our company focuses on engineering, design and maintenance of Petrol Stations, therefore our Stations are multifunctional complexes and include car washes, shops, cafes, electronic payment systems and other advanced services. All our Petrol Stations meet the current requirements for quality and safety of the European Union.

With the current situation in Cyprus, where domestic market tends to decline dramatically and new market players appearing, LUKOIL Cyprus Ltd’s primary target is to maintain its current market share. We do not plan on any major investments in the near future.

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Каковы перспективы энергетического рынка на Кипре в ближайшем будущем и как они могут повлиять на долгосрочную стратегию ЛУКОЙЛ Кипр Лтд.? Развитие энергетического сектора в первую очередь будет зависеть от того, насколько успешно будет продвигаться газификация страны. В первую очередь нужно принять законодательство, учитывающее интересы не только государства, но и обеспечивающее защиту инвесторов.

EU - Russia Trade

EU exports

Russia’s exports

50% machinery + transport

76% oil + gas

22% manufactured goods

6% manufactured goods

16% chemical products

3% chemical products

1% raw materials

2% raw materials

11% other

1% machinery + transport

12% other

Information Source: RT, zerohedge.com

WHAT DOES RUSSIA LOSE IN CASE OF ECONOMIC SANCTIONS OF WESTERN COUNTRIES?

Information Source: uacrisis.org

Russian gas in Europe One-third of gas consumed in EU comes from Russia

Source: Gas Infrastructure Europe, BP Statistical Review of World Energy 2013, Eurogas, Fas.org

Energy

Solar Thermal Energy: It is finally here On March 3rd 2010, the European Commission developed the European Strategy 2020 – a 10-year strategy for the advancement of the economy of the European Union. The Europe 2020 strategy is about delivering growth that is smart (through more effective investments in education, research and innovation), sustainable (thanks to a decisive move towards a low-carbon economy) and inclusive, with a strong emphasis on job creation and poverty reduction.

The strategy is focused on five ambitious goals in the areas of employment, innovation, education, poverty reduction and climate/energy.

Under climate/energy, the goal for all member states is to reduce greenhouse gas emissions by at least 20% compared to 1990 levels or by 30% if the conditions are right, increase the share of renewable energy in final energy consumption to 20%, and achieve a 20% increase in energy efficiency.

To achieve these 20-20-20 goals, the strategy sets the flagship initiative ‘Resource Efficient Europe’ that aims to help decouple economic growth from

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the use of resources by decarbonising the economy, increasing the use of renewable sources, modernizing the transport sector and promoting energy efficiency.

Cyprus as a Member State must also achieve these difficult targets. The energy sector in Cyprus is characterized by the high dependence on imported energy sources, the strong dominance of oil in the energy balance, the rapid increase in energy demand, the difficulties in connecting with European energy networks due to our geographic location and the relatively low penetration and exploitation of renewable energy.

The Cyprus Energy Policy is developed taking into consideration the European Energy Policy which is based on three axes: ensuring fair competition in the market, ensuring the supply of energy and meeting the energy needs of the country with the least possible burden on the environment and the economy.

The energy needs for Cyprus are currently covered by import fuel (oil).

Oil, apart from transportation, is mainly

used for the production of electricity.

Cyprus electricity generation for 2013 was around 1250 MW. The production of electricity is covered by the three conventional power stations in Moni, Vasilikos and Dhekelia.

Production of electricity is also achieved through the use of renewable energy sources, mainly wind, solar (photovoltaics) and biomass, which take around 8-9% of the energy share of the island.

We are still long way before achieving our targets. It would be impossible in a country with so much sunshine as Cyprus not to have plans in using solar thermal for the production of energy and therefore not to capitalize on some opportunities utilizing solar energy.

So, what is solar thermal energy then and how does it work?

Most of us may be ignorant about where our electricity comes from.

We only know that it is available and plentiful. Electricity produced by burning fossil fuels such as coal, oil and natural gas emits carbon dioxide

‘Considering the key advantages of using solar thermal energy for the production of electricity compared to fossil fuels, along with the development of new green jobs, there is no better time for Cyprus to use this type of technology’ Dr. Marios Valiantis, Director, Centre for Green Development and Energy Policy, Coordinator, Energy, Oil, Gas and Environment Academic Programes, University of Nicosia and other gases that scientists believe contribute to climate change. Solar thermal energy is a carbon-free, renewable alternative to generating electricity using fossil fuel.

There are two main ways in generating energy from the sun: Photovoltaic (PV) and Concentrating Solar Thermal (CST). PV converts sunlight directly into electricity. Solar Thermal technology is large-scale by comparison. It generates electricity indirectly.

California. Sunlight was focused and concentrated onto the top of a tower by 1,818 large mirrors (each about 20 feet in diameter) that were mechanically linked to each other and tracked the sun.

Wondering where the technology has been since then?

Heat from the sun’s rays is collected and is used to heat a liquid. The steam produced from the heated liquid powers a generator that produces electricity.

Key advantages of using solar thermal include reducing dependency on imported fuels, improving the diversity of energy supply, reducing the CO2 emissions and air pollution, and being a source that is readily available.

The sudden drop in the price of natural gas in the 90’s meant that interest in the solar thermal technology dropped as well. However, at this time there is rapid development occurring both in the basic technology and the market strategy and prospects for rapid growth appear now to be very bright for newer approaches.

In what could be a major turning point for industrial-grade solar energy, the Ivanpah solar power plant – the largest solar power plant in the world – was opened in February 2014 in the Mojave Dessert in California.

Solar thermal energy is not something new. The first large-scale test of using sunlight to heat water and using that to run an electric generator was Solar One that was funded by the U.S. Department of Energy and was built in 1981 in

The plant contains 347,000 mirrors, each one the size of a garage door, which are distributed among 173,500 heliostats that move mirrors to track the sun. The mirrors reflect the sun’s rays directing them to boilers on the

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top of three 150- metres tall towers, which heat water to create steam. The outcome? 400 megawatts of electricity.

There is an urgent necessity in Europe to develop measures aiming at creating large projects harnessing renewable energy, promoting local and sectorial markets and developing business opportunities relevant to solar thermal SMEs. Considering the key advantages of using solar thermal energy for the production of electricity compared to fossil fuels, along with the development of new green jobs, there is no better time for Cyprus to use this type of technology.

Permission has been granted for the first Solar Thermal plant (one of the biggest in Europe) with production capacity of 50 MW to be built in Cyprus. That makes a big step forward towards achieving our 2020 goals.

Youth Entrepreneurship

Stavriana A. Kofteros

Whether we like it or not a major contributor to our GDP is now severely (hair) cut – pun intended. So where do we go from here? There is only one solution for Cyprus and that is not hidden bellow the sea in the form of Natural Gas. Natural Gas is an opportunity – not a solution.

Our solution is to reinvent ourselves and startup Cyprus. Literally. Allow me to elaborate. The Cyprus Dream of working in the public, semi -public and banking sector is finally dead.

Thank God for that. This dream was nothing but a curse shadowing Cyprus for the last 30+ years and traumatizing our true entrepreneurial spirit. I have nothing against public servants. They perform, or should perform important service to the society. I am totally against everyone wanting to become one though. And the public sector being the most competitive employer was surely not a good sign for Cyprus.

Happy to say this is changing.

I have been in entrepreneurship and startups for well over a decade and since 24 months ago to be exact there is a noticeable shift in the culture.

The curse is lifting and our innovative and entrepreneurial self is lying under 50 CyprusStandards.com

the surface waiting to be polished. In my past, pre-political life as the CEO of the Diogenes Business Incubator of the University of Cyprus, I was often invited to deliver inspirational speeches on entrepreneurship and startups.

My format of choice was the proverbial kick in the … behind. It works. It works not because I was such a great inspirational speaker but because I happened to be hitting a nerve that is already there, practically waiting to be tapped. More and more people are seriously looking into starting up and this is the best news about our country.

Numerous initiatives have sprung up enhancing and augmenting a community of mainly young and restless people that view technology as a great enabler. With the business incubators, these initiatives collectively aim to Startup Cyprus, a vision to change Cyprus, aiming to influence, help and support the development of entrepreneurial mindset in our country, while empowering and strengthening the Cyprus Entrepreneurship Ecosystem.

Alas, a bit of good news. The culture

is shifting and changing. What normally would have taken a couple of generations to change is now morphing fast and mainstreaming.

While these changes are taking place, Cyprus is still an island and a small country. Now an island and a small country with a wounded banking sector and an economy starving for cash. And as we know, Cash is King.

Or, as my dear Professor at MIT used to say, CIMITYM. Cash is more important than your mother. Yet I see opportunity springing up; the angel opportunity.

Cyprus needs angels.

Seriously.

I am not an authority on the feathery kind but I can definitely talk about the business type. The business angel investor. An angel investor or angel - also known as a business angel or informal investoris an affluent individual who provides capital for a business startup, usually in exchange for convertible debt or ownership equity (Wikipedia).

Business angels invest in startups at their very early stage, when no

bank will loan them and over half the people they meet consider them crazy for attempting to startup, and that’s an understatement. If it weren’t for angels, startups would be stuck in the valley of death and well, die. The name “death valley” refers to the high probability that a startup firm will die off before a steady stream of revenues is established. Unless a startup can effectively manage itself through the death valley curve, and raise funds it will fall victim to negative cash flows.

High risk investment capital might be hard to find in Cyprus but it is the same everywhere. Just because there are Venture Capital funds in Silicon Valley it doesn’t mean they will fund your startup. Actually in Silicon Valley about 8 out of 10 startups do not get funded. The truth is, VCs don’t really jump to invest in early stage. Hence, the term “angel”.

Now we talk business. There are people out there - in Cyprus - that have already started considering other investment options and investing in innovative startups is an attractive option for them. Not only do they consider it, but they have actively taken action too. Forming the Cyprus Business Angels Network 51 CyprusStandards.com

(www.cyban.com.cy) for starters about a year ago, our business angels have already invested in 3 startups the cumulative sum of €2.270.000. This is what I’m talking about!

[ [ CIMITYM Cash is more important than your mother

Innovation and startups is the future of Cyprus. And we must all pitch in.

Some with our ideas, others with our commitment to make it happen, others supporting with mentoring, coaching and networking and yet others by investing. This is not charity.

This is a business proposition.

So what do we need to startup?

In order to turn our economy around we need to “make meaning” in the words of Guy Kawasaki. In the words of Steve Blank, we need startups to develop world class products that solve problems in a business area or segment that is at its “ground floor” and in its infancy preferably.

We need to be solving problems for the worldwide market, not just our tiny island. Can we do it? The impact of business incubation in Cyprus paints an important picture in creating highly innovative startups on a global scale with sales of innovative products launched in international markets protected by numerous international patents. More importantly, it hints to the vivid potential of innovation and innovative startups and this is the name of the game.

The recent results of two highly acclaimed startup events that took place in Cyprus for the first time, Startup Live Cyprus and Startup Weekend Cyprus, and saw their winners selected to join the most succesful accelerators in the world, are the light at the end of the tunnel.

(Full disclaimer: I was involved in the organization of both these events).

Everyone who has ever taken a shower has an idea. It’s not about the idea. Everyone has ideas. It’s about execution. The only way for an idea to gain value is implementation by a stellar team... So if you are starting up take notes. This is what you need to do. If you want to become an angel, take notes as well.

‘‘

It’s no t abou t the i It’s ab dea. E out ex veryon ecutio e has idea t n. The ideas. o gain only w v a lue is ay for stellar implem an team.. entati . on by a

’

’

The startups that do the bellow are the ones you should be talking to and investing in: Make meaning. Be an aspirin. Develop products and services that solve your customers’ problems.

Don’t fall in love with the technology, however hot it may be. Fall in love with the customer.

TALK.TO.THE.CUSTOMER. Most startups fail from lack of customers not from failure of product development. Let them tell you what they need.

Do Not self-fulfill your prophecies. Write and revise your business plan.

Constantly. A business plan is not a wish list, it’s a road map. Make sure it’s the proper one.

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There is always competition.

The idea might be superduper hot, innovative never done before, but hey, there is always competition. Never underestimate the power of the existing way of doing things.

Fail. Fail Fast. Fail better.

Build the product fast. So you can test it fast. So you can re-build and retest. Pivot until you nail it.

Get Traction. Have paying customers preferably. Or lots and lots of users. That’s the ultimate proof that your product is an aspirin and you are on to something with potential. Then and only then you are ready to start looking for investors. If you don’t have traction, go back and repeat the above process until you do.

But above all remember that you have to be a pig. Not a chicken. A chicken is involved to make an egg; a pig is committed to make bacon.

A 100% committed. If you are not a 100% committed in your startup why expect someone else to be? Startups are not easy and entrepreneurs have to be a little crazy to want to startup.

But in the words of Apple’s Think Different campaign, the ones that are crazy enough to think they can change the world are the ones who do.

So let’s Be Crazy. Let’s Startup Cyprus.

And have fun doing it.

Stavriana A. Kofteros @Stavriana_K Deputy Press Spokesperson Special Entrepreneurship and Innovation Adviser Democratic Rally http://about.me/Stavriana

Youth Entrepreneurship

Professional Development In Rotaract & Rotary Rotaract is a robust project of Rotary International which consists of young professionals between the ages of 18 to 30.

Rotaract aims to attract high calibre individuals which seek a way to assist local communities via their professional knowledge while at the same time encouraging entrepreneurship.

Rotaract Cyprus consists of 10 clubs which operate autonomously but are bounded to the international Standard Rotaract Club Constitution and bylaws. Clubs are usually named after local landmarks and points of interest due to the fact that Rotaract is aligned towards assisting local communities.

Kyriacos Christofides was born and raised in Larnaca, was educated in the United Kingdom and is currently working in the Oil & Shipping industry. He is the Vice District Rotataract Representative for 2013-2014 and can be contacted at christofidisk@me.com Rotaract in Cyprus numbers around 250 members allocated in ten clubs. Those interested in becoming a member or to join the Rotaract newsletter can contact Mr. Christofides on the above email.

Thank you for helping us help others.

Cyprus consists of the following clubs: Kyrenia Liman Rotaract Club Kyrenia St. Hilarion Rotaract Club Rotaract Club Limassol Amathusia Rotaract Club Larnaca Kition Rotaract Club Limassol Berengaria Cosmopolitan Rotaract Club Nicosia Rotaract Club Nicosia Aspelia Rotaract Club Nicosia – Ledra Rotaract Club Nicosia – Lefkothea Nicosia Sarayönü Rotaract Club

Cyprus is yet to reach the necessary levels of entrepreneurship that will help it re-group and progress . The existing foundations along with the many bright minds which are striving for personal and professional development, must be helped to materialize their goals and through encouragement to implement their entrepreneurial ideas through a better understanding of their target business field.

The benefits for the members of our Clubs, is the provision of professional development through collaboration, resources and of course sponsors. Professional development in Rotaract encompasses a plethora of facilitated learning outcomes but at the same time helping and supporting local communities in need.

An example of the aforementioned, is a testimonial by the RAC Larnaca-Kition president: ‘’As the President of Rotaract Club Larnaca Kition 2013-2014, Andreas Matsagkos had been given the opportunity to prepare and assess a variety of projects both for charity and professional development of the Club’s members. He was able to provide planning advice to various members and professional colleagues. For the last 6 months he has been working as a special assistant to the Mayor of Taking into consideration the above, Rotaract Larnaca and has been given the opportunity aims to develop a member professionally. to utilize these experiences in a professional In Rotaract, it is aimed to have members environment. After all, that is one of the goals from a variety of professions and disciplines for being a Rotaractor. He was a member such as architects, accountants, economists, of a very small group assigned to organize lawyers, artists etc. Every potential member a conference regarding the Challenges that is assigned to a project in order to prove Local Governance is facing in such difficult their willingness and ability to be part of the from an economic point of view times. Their Club. The organization aims to treat every responsibilities varied from arranging for project with extreme detail and diligence. The flight tickets for our speakers to flowers at the projects are supervised by a director which entrance door. Four hundred guests attended, assigns responsibilities in accordance with the including the Minister of Interior, the Mayor of abilities (or weaknesses, since Rotaract aims to Piraeus and many more high profile guests. improve one’s potential) of each member thus Andreas performed his duties with excellence justifying the success of Rotaract’s professional mainly as he was always a step ahead, and development events. had further been given the opportunity to organize, lead or delegate more events though Rotaract encourages entrepreneurship, since Rotaract, enabling him to gain the professional every project needs to be differentiated and touch several deliverables, primarily the cause demeanor and cope with the challenges that might appear in any working environment’’. (to assist local communities and charitable organizations), the method (every project The above is just one example of how should attract potential members), and finally Rotaract enhanced an individual’s ability to awareness (as Rotaract stands for Rotary take initiatives and gain valuable experience. in action, we aim to create “noise” to raise people’s awareness and interest by asking questions about Rotaract and the cause).

Technology

How Enterprises Can Get Better Access to Real-Time Data

by Chris Preimesberger, Editor of Features and Analysis at eWeek.com, Twitter: @editingwhiz

Here’s a list of data points around a new approach to enterprise performance management.

C-level executives are struggling with a very real problem: how to gain access to the real-time data that drives their business. In the new on-demand economy, if an enterprise doesn’t have control of its real-time data, it’s difficult to compile meaningful results that help a business grow and compete.

Most conventional enterprise performance management (EPM) platforms were designed for a slower business climate and fail to produce actionable insights from current and relevant data inside a relevant window of opportunity. In addition, most older implementations are complex and difficult to manage, requiring power users to serve as data gatekeepers.

Automation is what it’s all about in 2014.

However, EPM is evolving, and as a result, it’s changing the way enterprises operate around the world.

Serial entrepreneur and current Tidemark CEO Christian Gheorghe recently worked with eWEEK to come up with a list of data points around a new approach to enterprise performance management. Tidemark

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makes a mobile-first enterprise performance management package that provides cross-functional analytics and forecasting across an organization.

Cloud agility now benefits new-gen EPM. IDC Research predicts cloud technology spending will grow by 25 percent in 2014, reaching over $100 billion. EPM solutions that offer improved cloud capabilities will be the ones leading growth for businesses in the new year.

Mobility is empowering the global workforce. Mobile is now the de facto platform on which business people and consumers are devouring data, and unlike in previous years, they are now acting on the data as well. EPM tools are now able to provide reports on the fly— on any device.

Big data is creating actionability.

Big data is a key consideration for any EPM system—and today data crunching capabilities alone aren’t enough to move the needle. Decision-makers are now looking for easier-to-manage apps that provide more granular, actionable insights in real time. EPM solutions that provide the ability to sift through

{

On average, companies that employ rolling forecasts save between five and 25 days each year in their budgeting process,

}

according to research by the American Productivity & Quality Center.

disparate data streams are becoming indispensible in the finance department.

Collaboration is no longer simply nice to have. Platforms that don’t include collaborative features are becoming extinct. Innovative technologies such as Yammer and Box that enable employees to collaborate and share information have become critical business functions, not just the latest shiny object.

IDC also expects that by 2016, 60 percent of the Fortune 500 will have social-enabled innovation management solutions in place. This also has implications for EPM; solutions that enable collaboration across the organization fit into today’s enterprises, while those that don’t are putting companies behind the eightball.

CFOs are now more influential. CFOs now have a leading role to play in transforming organizations, and are working to identify best practices for implementing EPM solutions that can help them make the most of their growing influence.

In-context analytics is driving decisionmaking. The importance of context and real-time data is now mission-critical

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for EPM. In the coming year, the role context plays in making smart use of data will start getting the recognition it deserves.

Machine-generated data is now part of the package. With more data attached to every system, machine-generated and unstructured data represents a wealth of information that EPM solutions are taking into consideration.

RFIDs, sensor data and more are all part of this package.

Enterprise innovation is starting to drive consumer IT innovation. The enterprise is becoming a new source of innovation, and while in past the consumerization of IT drove enterprise trends, now the enterprise is starting to take the lead. The intersection of cloud, mobile and social at enterprise scale is helping to create highly available and user-friendly experiences in the workplace.

Competition is creating technology adoption. CFOs are finding that their systems are outdated, and budgeting platforms that still require up to four months to complete a budget are no longer sufficient.

On average, companies that employ rolling forecasts save between five and 25 days each year in their budgeting process, according to research by the American Productivity & Quality Center.

CFOs are beginning to understand that the current environment is “eat or be eaten,” and if they don’t adopt new technologies to reduce the time they spend planning, they will become irrelevant.

Agility is winning. In the new evolving market, there is no silver bullet to success in any industry. But what does work is to continually be looking to the future, and considering the next move.

Forward-thinking CFOs should look for EPM solutions that think like they do—well ahead of the now—and if the variables change, they want something that can pivot quickly and adjust to the new conditions.

Originally posted on 2014-02-23.

Reprinted with permission from http:// www.eweek.com. Copyright 2014, QuinStreet Inc. All rights reserved.

Luxury Living

TOP 5 WORLD'S MOST EXPENSIVE HOTELS Most Expensive Hotels in the World in 2014 How many times have you wondered which are the most expensive hotels in the world? Well, we’re here to provide that answer and an inside look at what makes each worthy of our top 5 list.

If you enjoy traveling and the quality is more important than anything else, these places will make you wish vacation lasts forever!

With unlimited budget come unlimited options but very few are at the peak of a fine living experience.

When it comes to luxury, these hotels have it all and they’re just waiting to make your stay as memorable as possible.

Here are the top 5 most expensive hotels in the world in 2014:

5.

Atlantis Resort Hotel Dubai & Bahamas Price per night: €17,000

4.

President Wilson Hotel Geneva, Switzerland Price per night: €22,500

.

3

Four Seasons Hotel, Manhattan, New York Price per night: €23,000

2.

Palms Casino Resort Hotel Las Vegas, Nevada Price per night: â‚Ź27,000

1.

The Grand Resort Lagonissi Athens, Greece Price per night: â‚Ź34,000

Bijan: Luxury Living

The Most Expensive Store.

By Appointment Only.

Looking to shop in the most expensive store in the world? Head over to Rodeo Drive, the posh Beverly Hills locality that is home to the House of Bijan.

A-list stars love shopping in Rodeo Drive’s expensive stores. Yet, none of them compare to Bijan, the world’s most expensive store. The House of Bijan has been in operation at 420 Rodeo Drive since 1976. But you cannot simply walk in to the premises. To enter the most expensive store in the world you will need to make an appointment. This is no marketing gimmick to keep the riff-raff out, however. The late designer Bijan Pakzad established this as a “By Appointment Only” store from the time of its opening.

The “By Appointment” sign outside the door generates only a couple of clients on some days. However, Bijan has a full staff of stunning and stylish sales attendants to convince clients to buy some of the most expensive clothing and accessories

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in the world. As you enter the premises of the House of Bijan, prepare to be amazed by the sheer visual opulence.

The most expensive store in the world has not compromised on anything.

Marble floors, fine woodwork, a crystal chandelier and massive windows make shopping here a truly luxurious experience.

It is no wonder that clients who head to this menswear store on a shopping trip spend close to $100,000 on an average.

Why shouldn’t they? After all, as Bijan himself proclaimed, “I happen to be the most expensive clothing designer in the world. I’m sorry for that.” A pair of socks would set you back by $100.

A tie would cost around $1,200. As for suits, those come with an asking price of about $25,000. Not that the prices deter Bijan’s rich and famous clients.

The Iranian designer has dressed political heavyweights like Ronald Reagan, Barack Obama, Tony Blair and Vladmir Putin. Also on his client list are

people like Tom Cruise, Arnold Schwarzenegger, Michael Jordan, Giorgio Armani and Oscar de la Renta among others.

During his lifetime, Bijan did not limit his designing prowess to menswear alone. He dabbled in luxury cars as well. One of his collaborations was with Bugatti. And a month after the designer’s death, the luxury car brand released a single-unit custom car, the Bijan Bugatti Veyron Grand Sport. The yellow Bugatti with a 1001 horsepower 16-cylinder engine is not Bijan’s only auto-design venture either. The designer had also brought his sharp sense of style to Rolls-Royce’s Phantom Coupe. The collaboration between Bijan and RollsRoyce led to a limited edition Phantom Drophead Coupe. 30 units of this model were produced and sold to select clients at $1 million each.

The menswear designer died of a massive stroke earlier this year. But his legacy

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lives on and the House of Bijan continues to attract clients. As the holiday shopping fever sets in, shoppers heading past the most expensive store in the world will notice the stylish Bugatti Veyron that stands outside. The $1.7 million luxury car has been placed outside the House of Bijan as tribute to the late designer. It is trussed out in Bijan’s signature yellow.

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