WBJ #37 2012

The same but different: Tech Eye reviews the iPhone 5

George Soros on why Germany must lead the euro zone or leave it 10

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VOLUME 18, NUMBER 37 • SEPTEMBER 17-23, 2012 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

LOKALE IMMOBILIA

Since 1994 . Poland’s only business weekly in English

The bulls are back Optimism that a resolution to the euro zone crisis is in sight has brought the bulls back to the Warsaw Stock Exchange – but for how long? 12-13

COURTESY OF COLLIERS INTERNATIONAL

REAL ESTATE

• Special GRI preview issue • Warsaw Trade Tower sold • Poland outperforms CEE

15-17

Plus

In this issue News . . . . . . . . . . . . . . . . . . . . . . .2-4 Business . . . . . . . . . . . . . . . . . . . . . .5 Law . . . . . . . . . . . . . . . . . . . . . . . . . .6 Interview . . . . . . . . . . . . . . . . . . .8-9 Opinion & Analysis . . . . . . . . . . . .10 Cover Story . . . . . . . . . . . . . . .12-13 Finance & Economics . . . . . . . . . .14 Lokale Immobilia . . . . . . . . . .15-17 The List . . . . . . . . . . . . . . . . . . .18-19 Markets . . . . . . . . . . . . . . . . . . . . .20 Sports . . . . . . . . . . . . . . . . . . . . . . .21 Lifestyle . . . . . . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23

More perfect union? The EC has unveiled its plan to create a banking union, but Polish officials are less than 3 enthused

Putin’s decree PGNiG may have to negotiate with the Kremlin in its price dispute with Gazprom

SHUTTERSTOCK

• EU shale gas battle • Poles sour on the US • Popular Polish bonds • New Katyn revelations • Furniture powerhouse • Paralympic medal haul

NEWS

www.wbj.pl

Polish exports on the rise From January to July 2012, the value of Polish exports amounted to €80.5 billion – 3% higher than the same period a year earlier, according to data from the Central Statistical Office. Data in z∏oty show that the value of exports rebounded by 11% year-on-year, although in US dollars, exports fell 4%. Imports in z∏oty grew 6.3%, but when denominated in euros and dollars, imports fell over the period. Poland had a negative trade balance when calculated in all three currencies.

Polish families want to move abroad Over half of Poles who have tasted life abroad want to take their kids with them out of Poland as soon as they can, according to a survey conducted by labor agency Otto Work Force, Rzeczpospolita reported. Polish families argue that it is easier to find a wellpaid job in Western countries, where they can very often can count on robust social assistance.

Economists pessimistic Even after the current economic slowdown ends, Poland’s economy has no chance to return to the days of 5-7% growth, and instead will likely grow by 2-3% per year at most, economists told Rzeczpospolita. The economy needs additional stimulus, a loosening of regulations and more businessfriendly law, they say. ●

Numbers in the News

Poland’s justice system

A recorded telephone conversation between a judge and a journalist posing as an official in the Prime Minister’s Chancellery has gripped public attention and brought to the fore questions about whether the Polish government routinely pressures members of the judicial system for political gain. The conversation was released to the media last week, and involved judge Ryszard Milewski, the head judge of the District Court in Gdaƒsk, and a journalist from the right-wing Gazeta Polska Codziennie newspaper. In the recording, the journalist tells the judge that the PM’s office is interested in the Amber Gold case, which is being heard by Mr Milewski’s court, and that the head of Mr Tusk’s Chancellery, Tomasz Arabski, would like to meet him in order to “arrange when the

next court hearing on Amber Gold should be held.” Amber Gold was a “parabank” that attracted clients with promises of high returns on investments in gold-indexed instruments, but has now gone bust and is being described as a pyramid scheme by government officials. Its owner, Marcin P., has been arrested and charged with cheating thousands of people out of over z∏.180 million. At one point, the prime minister’s son, Micha∏ Tusk, worked for a low-cost airline owned by Amber Gold. In the conversation, the journalist also told the judge that the prime minister wanted a meeting with him but didn’t want it to coincide with any Amber Gold case hearings, so as not to be perceived as “amounting to pressure.” In response, the judge

offered several dates he could order the next hearing, asking whether the PM’s office wanted him to “speed up the case or not.” The journalist then asked Mr Milewski whether he “trusted” the judges he had assigned to the case, to which the judge replied, “Don’t you worry about that.” Justice Minister Jaros∏aw Gowin said the judge’s behavior was “scandalous” and that he should be dismissed. “In independent courts, we shouldn’t have people who are ready to accept political dispensations,” Mr Gowin said. Poland’s largest opposition party, Law and Justice (PiS), has said a parliamentary commission must be established to investigate the Amber Gold affair, since it suspects the government has something to hide. It also suggests that Mr Milewski’s readiness to cooperate with the government represented not an isolated incident, but rather a practice common in the Polish justice system. Mr Tusk has rejected the calls for a parliamentary commission, saying it would be a “political spectacle.” He also said it was possible that a crime has been committed by the newspaper that obtained the recording. Remi Adekoya

is how many medals Polish athletes won during the Paralympic Games in London. Poland’s Olympic athletes won just 10.

2,417.32 points was the level at which the blue-chip WIG20 closed last Friday, its highest level since October 2011.

14% is the share of Polish firms that plan to cut jobs this year. About 12% plan to create new jobs, according to a study by employment agency Manpower Group.

73 is the number of companies that declared bankruptcy in August 2012. That’s 4.3% more than a month earlier and 25.7% more than in August 2011.

Quote of the Week “The euro zone train will be leaving.” EU Budget Commissioner Janusz Lewandowski, on what is at stake when it comes to whether or not Poland will join the newly proposed EU banking union. Mr Lewandowski called the decision facing the Polish government “a very important strategic choice.”

Figures in focus Approval ratings Overall approval for US President Barack Obama's handling of international politics, selected countries in 2012 (in %) 100 80 60

PiS catching up with PO: poll If elections were held today, 28% of Poles would vote for the ruling Civic Platform (PO) party, headed by current Prime Minister Donald Tusk, while 26% would vote for Law and Justice (PiS), headed by former Prime Minister Jaros∏aw Kaczyƒski, according to a survey carried out by TNS Polska. The numbers show that PO has lost one percentage point of support while PiS has gained two since the last poll was carried out in August.

SEPTEMBER 17-23, 2012

IN THE SPOTLIGHT

SHUTTERSTOCK

On WBJ.pl

A land down under

Not unlike discovering a lost world, the underground passages of the Filtry waterworks are one of Warsaw’s best-kept secrets. Log on to WBJ.pl to find out more.

Russia Turkey Poland

Spain

Italy Germany France

Source: German Marshall Fund

Company index Abacorp ..............................5 Fidelity ..............................14 Metro Properties ..............15

DATELINE

Web:

Property Forum 2012 is the largest event dedicated to the sector in Poland. The event is a great opportunity for the management of commercial real estate developers to meet with facility managers and tenants. Sheraton Hotel, Warsaw propertynews.pl

POLISH OUTSOURCING FORUM

Event:

Web:

Organized by Roadshow Poland and Aspire, the Polish Outsourcing Forum will present the latest trends in the outsourcing market in Poland and abroad and will feature representatives from business, government and media. Hyatt Hotel, Warsaw roadshowpolska.pl/e

34TH WARSAW MARATHON

Event:

The annual Warsaw Marathon will raise funds for the Bátor Tábor Polska Foundation, an organization that offers therapeutic camp-

Event:

Location:

Location: Web:

AIG/Lincoln ......................16 Goldman Sachs ................20

ing opportunities to children with chronic diseases in Central and Eastern Europe. Participants are expected to be sponsored by friends, family and colleagues for every kilometer they run. Organized by Kompania Wra˝eƒ, the marathon route will travel through Warsaw’s key landmarks, including the Old Town. Warsaw kompaniawrazen.pl

OCTOBER 4 ‘BUSINESS IS TALKING’ Event:

Location: Web:

Mid Europa Partners..........5

AEA Technology ..................3 GRI ........................15, 16, 17 Nordea Bank ....................14

September/October SEPTEMBER 18-19 PROPERTY FORUM 2012

Advent International ..........5 Gazprom..........................3, 5

This congress, organized by Netia, is an experience-exchange platform for new technologies and their application in business. It provides knowledge of ICT solutions and innovation technologies. Each year, the congress brings together over 1,000 participants, and is strongly supported by TVN CNBC. This year’s theme will be “Integration, Innovation, Inspiration.” Multikino Z∏ote Tarasy, Warsaw biznestorozmowy.pl

Akron Investment Central

Griffin Group ....................15

Eastern Europe II..............15 Hochtief Development

Otto Work Force..................2 PBG Group ..........................5

Amber Gold ........................2 Poland ..............................15 Penta Investments ............5 American Express ............15 Hydrobudowa Polska..........5

Peter Nielsen & Partners ..6

Apple ................................23 Immo Invest ......................16 PGNiG ................................5 ARC Rynek i Opinia ..........14 ING TFI ..............................12 Audytel ................................5 JEMS Architekci................15

Process Solutions Group..14

Avestus Real Estate..........15 Jones Lang LaSalle ....15, 17 PZU ..................................12 AXA ....................................15 Kernel ..............................20 Quinlan Private Golub ......15 Bank Pekao ......................12 KGHM ................................12

RTKL Associates ..............15

Bank Zachodni WBK ........14 KPMG ................................15 Savills................................17 Biedecki ..............................6 KSP Real Estate Investment Boeing ................................5 Management ....................15 CBRE ................................17 Kulczyk Real Estate

Silverstein Properties ......15 Skarbiec TFI......................12

Colliers International ......15 Holding..............................15 Synthos ............................12 Cushman & Wakefield......17 Kulczyk Silverstein

TVN....................................20

Echo Investment ..............15 Properties ........................15 Warsaw Ecorse Investments............5 LOT ......................................5 Eko Holding ........................5 Manpower ....................2, 14

Stock Exchange ............6, 12

Emperia ..............................5 Mattel ................................15 X-Trade Brokers ..............20

NEWS

SEPTEMBER 17-23, 2012

www.wbj.pl

European Union

Poland’s future in ‘banking union’ unclear The European Commission’s plan allows for countries outside the euro zone to join, but not to have a full say

COURTESY OF THE EUROPEAN PARLIAMENT

After the European Commission revealed proposals last week to give the European Central Bank supervisory powers over euro zone banks, Poland’s government remained non-committal, reluctant to voice its approval of a plan that could place Warsaw on the outside looking in. In a speech to the European Parliament last week, Jose Manuel Barroso, president of the European Commission, called the proposals “a major step to a banking union.” Specifically, the EC wants to give the ECB supervisory power over all banks in the euro zone, “with a mechanism for non-euro countries to join

sions, the EC’s statement said. Under the EC’s proposal, the ECB would be able to decide to assume full supervisory responsibility over any credit institution, particularly those which have received or requested public funding, at the start of next year. By July 1, 2013 all banks of major systemic importance would be put under the supervision of the ECB. The phasing-in period would be completed by January 1, 2014, bringing all banks within the system under ECB supervision.

Catch the train?

Mr Barroso outlined the EC’s proposal for a banking union last week on a voluntary basis,” the EU executive said in a statement. Precisely how that mechanism will work is unclear, and Poland is keen to avoid a situation where it gives up supervision of its banks to a body in which it has no direct say.

Poland’s Finance Ministry issued a statement saying it was too early to decide Poland’s stance on the union until it sees “all the details of the plans for the euro zone banks.” According to the proposal,

ultimate responsibility for supervisory tasks related to the financial stability of all euro zone banks will lie with the ECB, although national supervisors will continue to play an “important role” in preparing and implementing ECB deci-

EU Budget Commissioner Janusz Lewandowski, a Pole, told journalists last week that Poland has before it “a very important strategic choice” of whether or not to join the banking union, adding that Warsaw would have to decide before the year runs out. Mr Lewandowski said that countries outside the euro

zone would only be allowed to “cooperate closely” with the banking union but would not count as full-fledged members. He questioned whether such guarantees would be “enough” to convince countries to join the banking union while giving up domestic supervision. But he added that the “euro zone train will be leaving,” and said that staying outside the banking union “could worsen the external perception of the Polish banking system.” Poland’s Finance Ministry said in its statement that “if Poland does not join the new system fully, it will not weaken our position in the EU,” but that it would do everything in its power to have an “influence on decisions taken in the unified structure, which could have an indirect influence on countries outside the EBC supervision.” Remi Adekoya

Unconventional gas

EC shale gas report stirs hornets’ nest

The Polish government has reacted angrily to news that the European Commission is planning to strengthen environmental regulations related to the extraction of shale gas. The EC says changes in legislation will be needed in order to deal with threats to the environment which were identified in a new report. A study for the European Commission led by consultancy AEA Technology highlighted risks to surface- and ground-water contamination related to the hydraulic fracturing process used to extract shale gas, as well as other risks, including increases in air and noise pollution. “The study identified clear gaps in the existing legislation,” said EC spokesperson Joe Hennon. “We will analyze, consult with member states and the public, and propose something in 2013. At this stage it is not possible to say whether it will be stand-alone new legislation or amendments to existing legislation,” he added. Experts say tougher envi-

Miko∏aj Budzanowski said he disagreed with many of the findings in the report and criticized it for “misleading the public from behind a desk.” “This is an important matter and we will intervene,” he said. “I have the impression that the report was prepared in the comfort of an air-conditioned office, not taking into account the laws of physics and geology.” He added that companies prospecting for shale gas in Poland currently adhere to stringent, and sufficient, environmental regulations. The government is staking major hopes and no little capital on the development of the country’s shale gas industry, which could allow Poland to become a self-sufficient producer of gas. “That partly explains why the government reacted so sensitively,” said ¸ukasz Cioch, general director of the Centre for Energy Studies at Tischner European University. “The promising outlook for commercially exploitable shale gas in Poland is subject

to many factors and variables at this stage. The government is risking a great deal. It probably prioritizes hard facts and critical answers from people close to the actual drilling over PR, social activism and reports produced from behind a desk,” he added. Polish media reported that a number of experts are skeptical about the findings of the report due to earlier close cooperation between AEA Technology and Russia’s Gazprom group, the world’s largest extractor of natural gas. Gazprom exports large quantities of natural gas to Poland and would lose out if Poland’s shale gas industry were to take off. Poland is thought to have the EU’s largest shale gas reserves, but estimates of total accessible deposits vary widely. “Over time, facts should prevail over speculation and, hopefully, be reflected in sound, fact-driven EU legislation, sooner than later. As of now, there appears to be a lot of politics, lobbying and ‘strategizing’ behind closed doors, especially among business stakeholders. We are still at a very early stage in Poland, as reflected by the current legislative turmoil,” said Mr Cioch. Gareth Price

REPORTER

The study could herald ronmental regulations would the introduction of likely raise shale gas production costs for companies more stringent prospecting in Poland. environmental regulations. Poland is ‘Behind a desk’ not impressed Poland’s Treasury Minister

“I have the impression that the report was prepared in the comfort of an air-conditioned office, not taking into account the laws of physics and geology”

Treasury Minister Miko∏aj Budzanowski was highly critical of the report

‘Useful summary’ ¸ukasz Cioch, general director of the Centre for Energy Studies at Tischner European University, assesses AEA Technology’s report into the environmental effects of shale gas prospecting “The report itself is a comprehensive review of the shale gas prospecting processes across multiple technical, legislative and geographic settings. It comprises many intuitive recommendations, but does not seem to contribute much by way of ground-breaking, definitive research into environmental questions as such,” he said. He added that while “useful for weather forecasts,” the report’s emphasis on riskassessment categories such as “high,” “moderate” or “low” entails a number of potentially “harmful implications” when applied to social, legislative, technological and environmental aspects of shale gas prospecting. This is unless research methodology and

data on the comparative impact of other available technologies were to be fully incorporated into the study. “The industry should make good use of constructive, well-intentioned pressure, criticism or demands of increasing transparency and a proactive approach to communication,” he added. He concluded that, “while it is of vital importance that there should be strict controls and regulations which follow the technology very closely and stimulate innovation, one should avoid the luxury of reasoning [along the lines that] ‘the fact that we like hamburgers doesn’t mean that we want to meet the cow.’ ” “Mining will always have its adverse effects. Sound regulations, constructive pressure on environmental factors and emphasis on innovation will hopefully accelerate the onset of cleaner energy sources. Until that happens, we are simply stuck with compromise. The trick of the game is to make it a sustainable one.” ●

NEWS

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US-Polish relations

SEPTEMBER 17-23, 2012

Katyn

Poles’ views on US, Obama President Roosevelt knew Stalin turn increasingly negative was behind Katyn massacre

COURTESY OF THE WHITE HOUSE

In no other European country has support for American leadership in world affairs dropped as much as in Poland, with only 38 percent of Poles now finding it “desirable,” down from 49 percent in 2011, according to the German Marshall Fund’s latest annual survey of transatlantic trends. Among European countries, Poland gave President Barack Obama his lowest favorability rating – 54 percent – compared to 82 percent from the continent as a whole. Just 49 percent of Poles approve of Mr Obama’s international policies, a 16 percentage-point drop since last year, while Poland also had the second-lowest level (59 percent) of respondents who said they believed that the United States and the EU have “enough common interests” to enable international cooperation. Likewise, the percentage of surveyed Poles who saw “enough common interests” between the EU and US (59 percent) fell below the

Fewer than half of Poles approve of President Obama’s international policies Europe-wide average of 66 percent.

Three key incidents President Obama’s standing among Poles has been tarnished in recent years, mostly due to three incidents: The first was his 2009 cancellation of George W. Bush’s missile shield program, elements of which were to be hosted in Poland, on the anniversary of the Soviet Union’s invasion of Poland in World War II (he later announced a replacement program, which also included Poland). Second, in 2010, Poles were dismayed to see him playing

golf on the day of the funeral of the late Polish President Lech Kaczyƒski (he was prevented from attending due a volcanic eruption in Iceland). Finally, earlier this year, he made an unfortunate slip of the tongue referring to German concentration camps in Nazi-occupied Poland during World War II as “Polish death camps” (he was honoring a Polish hero at the time). If Poles were to vote in the upcoming American presidential election, 35 percent would vote for Mr Obama, and 16 percent would vote for Mitt Romney, the survey found. Remi Adekoya

US President Franklin Delano Roosevelt and his administration had credible evidence that it was the Soviets who committed the 1940 massacre of 22,000 Polish officers and inteligentsia in and near the Katyn Forest in Russia, but preferred to keep the information quiet, documents published last week suggest. According to the documents, published by the US National Archives and Records Administration, the US received coded reports in 1943 from two of its officers who were taken by their German captors to the Katyn Forest to see mass graves packed with thousands of corpses in Polish officers’ uniforms. The men reported that the corpses were in an advanced state of decay, proof that the killers could not have been the Nazis (as Soviet propaganda claimed), since they had only recently occupied the area.

It has long been suspected that President Roosevelt had known Soviet leader Joseph Stalin ordered the massacre, but didn’t want to alienate the USSR, an ally whom the Americans were counting on to help defeat Germany during World War II. However, documentation proving President Roosevelt’s knowledge of who was behind the crime had remained undisclosed until last week. Though the messages did reach Washington, they disappeared soon after, indicating that the administration wanted

to keep the reports under wraps. They failed to appear in a 1951-52 Congressional hearing on the massacre. In response to the release, Foreign Minister Rados∏aw Sikorski wrote in an open letter that “we must ensure that the fullness of the truth is uncovered for its own sake and in the name of historical justice.” It was Soviet leader Mikhail Gorbachev who in 1990 finally admitted publicly that the USSR was responsible for the Katyn massacre. Remi Adekoya

COURTESY OF WIKIMEDIA COMMONS

Documents released last week show the US government knew who murdered tens of thousands of Poles in 1940

That’s according to a survey by the German Marshall Fund

Some 22,000 Polish officers and inteligentsia were killed by Soviet secret police in the Katyn massacre of 1940

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BUSINESS

SEPTEMBER 17-23, 2012

www.wbj.pl

Gas supplies

LOT sells Dreamliner tickets

Putin moves to protect Gazprom

Polish state-controlled gas monopolist PGNiG was dealt two blows to its aim of improving its weakened financial position last week, first from the Russian government and then from the local regulator. Russian President Vladimir Putin signed a decree last Tuesday declaring that “strategic Russian companies” – such as Gazprom – must first receive permission from the Kremlin before changing pricing contracts or disclosing information.

It is suggested Mr Putin signed the decree to shield Gazprom from a recently launched EU investigation into whether the Russian company is abusing its position as dominant gas supplier to the EU. The decree puts significant political weight behind Gazprom’s position and makes it less likely the Russian firm will be forced to make its prices more competitive, an analyst who asked not to be named told WBJ.

PGNiG recorded a net loss of z∏.314 million in the second quarter of 2012, seeing its margin on gas sales drop to -13 percent as the US dollar strengthened against the z∏oty during the period. PGNiG pays Gazprom in dollars. “Putin’s statement will significantly reduce the chances of PGNiG and Gazprom reaching an out-of-court settlement,” said Peter Csaszar, an analyst at KBC Securities. To improve PGNiG’s bargaining position, Treasury Minister Miko∏aj Budzanowski said that the company should seek to double its natural gas production by 2019, the year when PGNiG is due to start renegotiating its next long-term gas supply contract with Gazprom. Polish energy market regulator URE did little to help

Arbitration PGNiG has filed an arbitration claim in order to secure price cuts on natural gas it imports from Gazprom under a long-term contract. The Polish company sources most of its gas from Russia but says the prices it is charged are unfairly high.

The first Boeing 787 Dreamliner will not become part of LOT Polish Airlines’ fleet until December, but passengers can already book tickets for routes due to be serviced by the airplane. To begin with, the new aircraft will service flights to European capitals.

Polish public debt rises SHUTTERSTOCK

The Russian president wants “strategic companies” to ask the Kremlin for permission to lower prices or disclose information

Mr Putin is seeking to protect Gazprom from an EU anti-monopoly probe beleaguered PGNiG last week, rejecting a request from the gas firm to increase the

price it charges Polish customers. Gareth Price

COURTESY OF WIKIMEDIA COMMONS

Hydrobudowa files for Poland is world leader in outright liquidation furniture production: report

Hydrobudowa helped build the National Stadium in Warsaw The share price of construction company Hydrobudowa Polska dropped 40 percent to z∏.0.03 last Monday, in reaction to news that the company’s board has changed its bankruptcy application to a request for outright liquidation. Previously, the company, a part of the troubled PBG Group, had applied for a controlled bankruptcy whereby it would enter into individual agreements to pay creditors at least some of what they are owed. However, the builder does not believe it will be able to meet its obligations, since its financial position has deteriorated so drastically in recent months. The company’s margins evaporated thanks to the low prices resulting from bidding wars for Euro 2012 construction projects and the

growing cost of raw materials. It recorded a loss of z∏.800 million in the first half of this year. With banks taking control of Hydrobudowa’s accounts and withdrawing from loan agreements, the company has lost financial liquidity. Moreover, new contracts have dried up in recent months, following the end of the Euro 2012 infrastructure building boom. As a result, Hydrobudowa’s liabilities have risen to z∏.75 million. The company said in a statement that it will be forced to lay off 90 percent of its workforce, which would amount to around 850 people. Hydrobudowa was part of the consortium that built Poland’s National Stadium. It is also involved in the construction of sewage systems and water-pipe networks, as well as roads and sewage treatGP ment plants.

Poland is the second-largest producer of furniture, with only China producing more, according to a recent report by Abacorp on the furniture industry. Every year Polish furniture factories produce more than 31 million couches, sofas, chairs, mattresses as well as car and airplane seats. In terms of sales, Poland is in fourth place, behind the US, Italy and China. The furniture industry in Poland provides 62,000 jobs, and in 2011, Polish furniture sales stood at over z∏.12 billion. The sector is growing five

times faster than in the rest of the EU. Seventy-five percent of the furniture produced in Poland is sold abroad – half of that goes to Germany, 20 percent to France, 8 percent to the Netherlands and 6 percent to Sweden, the report said. Poland’s specialty is transformable bedroom furniture like futons and foldable chairs. According to Abacorp, over half of such furniture sold in Europe comes from Poland. Poland is also a leader in the production of upholstered furniture for cars

and airplanes. What gives Polish furniture its edge? “Price-to-quality ratio above all,” Marcin Bandura, CEO of SIC, an upholstery manufacturer in ¸ódê, was quoted by daily Gazeta Wyborcza as saying. According to Mr Bandura, the quality of Polish furniture is just as high as that made in the West, but it is much cheaper. The average price of a piece of furniture produced in Western Europe is €147, compared to €90 in Poland, the newspaper wrote.

September 28 to October 29. The success of the bid depends mainly on Eko Holding’s largest shareholder and president of the board – Krzysztof Gradecki. Together with his wife, Mr Gradecki controls just over 55 percent of Eko Holding. He hasn’t revealed yet if he plans to answer the call for shares. However, an unnamed representative of investors in Eko Holding told Parkiet that the

At the end of the first half of 2012 Poland’s public debt amounted to z∏.842.6 billion, the Finance Ministry announced. That’s 3.3% (z∏.27.3 billion) more than at the beginning of the year and 7.2% more than 12 months ealier.

Emperia to sell properties Polish trading company Emperia will put 95 properties on sale shortly, with the first sales offers expected in the coming weeks. The book value of these properties stands at more than z∏.350 million. “I think that their market value is close to this amount, so their sale should not have a significant impact on the company’s net results, only its cash situation,” Parkiet reported Artur Kawa, Emperia’s president, as saying.

Izabela Depczyk

Advent launches Eko Holding takeover bid Ecorse Investments, a subsidiary of private equity firm Advent International, announced a call for all shares in Polish supermarket operator Eko Holding last week. It is offering over z∏.199 million at z∏.4.1 per share – 13 percent below the company’s stock price just before the call. Ecorse Investments hopes to purchase at least 80 percent of Eko, which it would then delist. It will accept offers from

offer price is “highly unsatisfactory.” Also reportedly interested in Eko Holding are two other funds: Penta Investments and Mid Europa Partners. These two are willing to pay more than Advent, Parkiet reported. With some 300 supermarkets, Eko Holding is one of the largest players in the market. Its stock market capitalization is around z∏.230 million. GP

Telecoms won’t grow as fast as expected In its latest report, consulting firm Audytel has trimmed its forecast for the value of growth in the telecoms sector in Poland this year. Whereas it had earlier estimated that the sector would grow by z∏.2.2 billion this year, it has now changed this forecast to a predicted growth of z∏.1.6 billion. This would take the total value of the sector up to z∏.48.58 billion. ●

LAW

www.wbj.pl

Tax

Legal News Contact: Miros∏aw Stefanik ms@pnplaw.pl

Draft amendment to the act on CIT for 2013 A draft amendment to the act on corporate income tax (CIT) for 2013 was recently published on the website of the Government Legislation Centre – a body that contributes to the writing and revision of laws proposed by the government. The draft, if adopted, would introduce limitations on some types of tax optimization – among them so-called “thin capitalization,” by which companies maximize tax deductions by including interest payments on debt taken on by affiliated companies. Currently, such deductions are limited to threefold the amount of initial capital, and these limits apply to companies that are directly related. The new legislation would extend these limitations to companies that are indirectly related. The draft also would expand the number of companies who pay CIT, by including limited joint-stock partnerships.

New legislation to keep telecoms from lowering internet speeds The Sejm, Poland’s lower house of parliament, is working on an amendment to the country’s Telecommunication Law. The draft would bring Polish law in line with

SEPTEMBER 17-23, 2012

some EU provisions. One proposed change looks to protect end users by preventing telecoms from lowering their clients’ internet data speeds below what is stipulated in the given contract or regulations. The president of the Office of Electronic Communications (UKE) will be allowed to object to the method telecoms use to measure the datatransmission speed, and will be allowed force a given telecom to use a particular measurement method.

Change of supervision over cooperative savings and loan associations On October 27, an act on cooperative savings and loan associations will come into force. The main goal of the act is to introduce national supervision over such associations by transferring supervisory powers, detailed decisions on permissible risk levels and investment policy to the Polish Financial Supervision Authority (KNF). Moreover, the KNF will supervise activities related to the establishment of such associations by requiring permits for founding such an association and for approving its statutes. The solvency ratio of the associations will be set at the level of at least 5 percent. ●

BROUGHT TO YOU BY PETER NIELSEN & PARTNERS LAW OFFICE

Technology tax break Polish legislation allows for your company to deduct technology spending from its tax requirements. Here’s how Almost all taxpayers in Poland can make use of a special tax deduction on new technology. The legislation in place allows for a company to deduct all costs spent on the acquisition of new technologies from their revenues. The deductions can be made as early as in the year the expenditures were made. In order to receive the deduction, the new technologies have to be acquired on the basis of a contract and must be entered into the company’s record of fixed and intangible assets. New technologies are defined in the legislation as technological knowledge in the form of intangible assets, in particular the results of research and development, which allows the creation of a new product or an improved existing product or service and which has not been in use by

others around the world for more than the last five years. Moreover, the new technology must be confirmed as such by an independent scientific unit. An independent scientific unit is defined in Polish law (specifically the Act of 30 April 2010 on the principles of financing of science; Journal of Laws No. 96, item. 615). The confirmation can be prepared by units of universities. Reception of the confirmation (or “opinion”) will require the conclusion of a contract for the preparation of the opinion with a scientific unit and submission of a detailed technical description of the machine/technology and the manufacturer’s technical documentation – marketing materials are not appropriate. If the devices are protected by patents, then the patents, or at least the patent numbers, should be presented. It will also require payment of the price for preparation of the opinion. The price can be set as a lump sum (from z∏.4,000 to z∏.40,000) or it can be set as a percentage of the value of the deduction. This will all

depend on the range of the opinion and the type of technology. The time necessary for preparation of the opinion will depend on the range of the analysis. In practice this usually means that the opinion can take two months or longer to prepare. The ultimate requirements and time necessary for preparation of the opinion will depend on the particular scientific unit that will provide it.

Katarzyna Ryszard

Legal and tax advisor Peter Nielsen & Partners kr@pnplaw.pl

Legal Forum

Disclosure requirements on the WSE Monika Glinka Associate Over the last three years the Polish Financial Supervision Authority (KNF) – Poland’s financial regulator – has imposed some z∏.6.33 million in fines on Warsaw Stock Exchange-listed companies that have breached disclosure requirements. Let’s take a look at these requirements, and the penalties companies and businesspeople face when the rules are broken.

and start-ups that want to get a financial boost from the capital market, but who require one with less stringent regulation. Both the Main Market and NewConnect require member companies to comply with specific disclosure requirements. And those, as governed by Polish regulations, are in line with EU rules, specifically with the Transparency and Market Abuse Directives.

The stock exchange The argument can be made that the Warsaw Stock Exchange (WSE) is the best stock exchange in the CEE region, and presents opportunities for large, medium-sized and small companies. The WSE’s Main Market is addressed to “mature” companies with at least a few years of business history and a capitalization of minimum €15 million. A second market, NewConnect (an alternative market often comapred with the London AIM and Scandinavian First North), is intended, in particular, for small firms

Disclosure requirements on Polish markets Issuers that are admitted to trading on the Main Market are obliged to provide the following information to the KNF, to the WSE and to the public simultaneously: •Inside information – that is, any information of a precise nature, relating, whether directly or indirectly, to one or more issuers of financial instruments, one or more financial instruments, or acquisition or disposal of such

instruments, which has not been made public and which, if made public, would be likely to have a significant effect on the prices of financial instruments; •Current reports – these relate to all substantial events regarding the issuer or its capital group, such as changes in shareholding structure or management, share issues, and decisions adopted at the general shareholders meeting; •Periodic information – this consists of historical data of the issuer during a given period, such as quarterly, semiannual and annual reports. Since NewConnect is a secondary trading venue, disclosure requirements are relatively less stringent. However, issuers on that market will have to disclose to the public: •Inside information – this should be understood in the same way as for companies listed on the Main Market;

•Current reports – these relate almost to the same issues as on the Main Market, but with a narrower coverage; •Periodic information – this consists solely of annual and semi-annual reports. The issuer is exempt from drawing up quarterly reports.

Sanctions for infringement of regulations According to Polish regulations, the KNF may impose administrative, penal and civil sanctions on issuers whose shares are listed on the Main Market and who have breached disclosure requirements. The most severe administrative punishment might be, for example, banning the offending company’s securities from trading for a definite or indefinite period of time and the imposition a fine, which may amount to as much as z∏.1,000,000. Moreover, the person in a company responsible for disclosing false information or

Legal Forum is a paid-for module which gives law firms in Poland an opportunity to discuss and inform readers about important developments in the market. The content is created in consultation with Warsaw Business Journal's editorial staff.

withholding true data is subject to a fine of up to z∏.5,000,000 or imprisonment from six months to five years. It is worth noting that regulations provide for the obligation of the issuer to repair damage caused by disclosing untrue information or undisclosed information. Penalties on NewConnect look a little bit different. The issuer, depending on the degree and scope of the infringement, may be sanctioned with: a written warning, a fine of up to z∏.20,000, as well as a suspension or ban of the company’s financial instruments from trade. Practice shows that issuers on both markets, on a daily basis, face many obstacles related to the fulfillment of disclosure requirements and unfortunately do, from time to time, break the rules and thus face fines. It is therefore wise for issuers to make use of specialist services in order to avoid all types of penalties and other unpleasant consequences. ●

INTERVIEW

www.wbj.pl

SEPTEMBER 17-23, 2012

Foreign policy

PiS MP touts vision of regional leadership Witold Waszczykowski, Law and Justice (PiS) MP and vice chairman of the Foreign Affairs Committee in the Sejm, talks with WBJ about his party’s vision for Poland’s foreign policy and his assessment of the roots of the confrontation between PiS and the ruling Civic Platform (PO) Ewa Boniecka: The Polish government’s foreign policy is often an area of heated confrontation between the ruling Civil Platform and your party, Law and Justice. How do you assess Poland’s policy towards Europe? Witold Waszczykowski: Let me start by recalling that the break in Poland’s foreign policy began in 2007, when Civic Platform decided at the start of its election campaign that foreign policy would be a field of conflict between it and Law and Justice. Up until 2007, the majority of those in power in Poland presented similar conceptions of our foreign policy, which were expressed by various presidents [including] Aleksander KwaÊniewski and the late Lech Kaczyƒski. The view was that Poland should play a proactive role in Europe, so positions were taken to allow us – in institu-

tions such as NATO and the EU, to which we had earlier acceded – to participate in shaping policy, at least towards the east [of the European Union]. This concept of Poland playing a proactive role in European foreign policy was reinforced by our close cooperation with the United States and our role as spokesperson for the interests of the Central and Eastern Europe region. This policy was carried out by all previous prime ministers, ministers and presidents, who made efforts to increase cooperation with the Baltic states and the Visegrad Group [of the Czech Republic, Hungary, Poland and Slovakia]. When Civic Platform gained power, they decided that this policy was too ambitious and that our active policy towards Eastern Europe brought us into conflict with

Russia and did not benefit us in the EU. The present government now conducts a minimalist foreign policy, which has led it to rid itself of those instruments which gave Poland influence in European institutions, and is instead satisfied with the position given to us by the strongest of its members, first of which is Germany. And on this clientelist policy, PiS is not in agreement.

European Union. We are a large and politically important European region and a big economic market for the West. But this would only be truly acknowledged by other EU members if we act as a unified whole, with Poland, due to its size, geopolitical location and economic potential, acting as a link between Eastern and Western members. Such a strategy would strengthen the effectiveness of the whole of the

“PiS will never agree to remove the Smolensk tragedy from the agenda of Polish-Russian relations” What is PiS offering as an alternative? We emphasize that to make Polish European policy substantial and meaningful, it is necessary to rebuild Poland’s position in our region. We must return to serious talks with the Baltic states and countries in the CEE and assure them that Poland is ready and willing to be a spokesperson for our region’s interests and aspirations in the

EU, as well as cooperation between its members, and should be used as an advantage by Poland’s leaders. PiS emphasizes that Poland should return to such an ambitious policy and lead a meaningful dialogue with countries from the Baltic and CEE regions, who have many common interests and common worries which should be taken into account in shaping EU policy.

Let’s turn to some specifics about the present situation in the EU. How do you see the situation, and do you have any suggestions about how to rescue the euro? I consider the whole concept of introducing the euro 10 years ago to have been wrong and in contradiction to the direction in which the world is developing. In the last 200 years there have been democratic revolutions in many countries, because societies demanded to have an influence on taxes and on shaping budgets. The evident political prerogative of the state is to make decisions about printing money and about its own financial policy. The euro was introduced without providing the European Union with political control over it, and this was the first mistake. The second one is economic, because the common currency could [only] apply to areas that have a similar level of development. It is evident now that this is not so, therefore during the present crisis there is discussion about establishing political control over the euro zone and trans-

forming the European Union into a kind of federation. But EU members do not want a federation, so in my opinion it is possible that countries will return to using their national currencies and that the euro will be kept as a nominal currency, used in financial dealings between countries. It appears as if the Smolensk catastrophe currently plays a dominant role in how PiS formulates its own stance towards Russia. Is this correct? The issue of the Smolensk catastrophe is a consequence of the “collision character” of Polish-Russian relations, which has been in existence for years, because Poland and Russia have different views about how relations are set in Europe. Our country’s stance is that the European and transatlantic institutions, the EU and NATO, and their enlargement, result in [increased] stabilization and peace in our continent and that their activities are not hostile or confrontational towards Russia. Yet Russia does not accept this and is aiming to return to the

INTERVIEW

COURTESY OF WITOLD WASZCZYKOWSKI

SEPTEMBER 17-23, 2012

CEE should capitalize on its size and importance by acting as a unified whole, says Mr Waszczykowski, who believes Poland should take the lead role 19th century “concert of powers” arrangement, where Russia, with a group of countries of its choosing, makes decisions about international issues. Of course, Putin’s biggest ambition would be to recreate the arrangement … of the Cold War, when the world was divided by the decisions of the big two powers, the US and Russia. But however much this is desired by Russia, it is not a realistic plan. So Russia is trying to build a group of countries that are dependent on it, or at least closely tied with it. If this were to happen, NATO and other, European, institutions would be pushed into a second-tier position and Poland would become a thirdrate country. We do not agree with that philosophy and think that the enlargement of democratic institutions in countries in the east should continue, because it contributes to political democratization and the liberalization of the economy, and would have a positive impact on the peaceful development of the world. Poland finds itself at the crossroads of two worlds: the integrated West, and the “East,” which is getting rid of even the pretense of democracy. So neighboring a country as undemocratic, unpredictable and as dangerous as Russia, we have lowered the level of our security. Yet PM Tusk and Foreign Minister Sikorski are following a policy of “reset” and in fact say: “Let’s put aside the issue of the Smolensk catastrophe, to disregard the causes of that tragedy.” PiS does not agree and will never agree to remove that tragedy from the agenda of Polish-Russian relations. We believe that Poland could build relations with Russia on the

basis of stronger political and diplomatic instruments practiced by ourselves and in the framework of the European Union.

“I consider the whole concept of introducing the euro 10 years ago to have been wrong” How do you assess PolishAmerican relations concerning security, particularly in relation to the planned NATO missile defense system that Poland will host? Close relations with the US in the field of security are necessary for us, because despite Poland’s entry into NATO, the security status of Poland and the whole Eastern European region remains worse than that of Western Europe. For years we have demanded that this situation be changed, now we demand that NATO’s contingency plans for aiding [us] in the case of aggression would have an automatic, rather than a general, character. I was involved in negotiations about the first project for building a missile shield in Poland during George Bush’s administration and I know that it was not the Americans who first changed their minds, but Prime Minister Tusk. When, on July 4, 2008, I returned from Washington with an agreement ready to sign, Donald Tusk said that this agreement did not contribute to Poland’s security, while the then-President Lech Kaczyƒski was not informed by the government about what it intended to do.

And the shield could at that time have been implemented, if Poland had ratified the agreement. President Obama would not have changed such a decision. He decided to change the whole concept of the missile shield in September 2009, about a year after taking office, by which time the Polish government had still not ratified the agreement. According to the new plans, the missile shield would be built in Poland in 2018. I want to point out that if Obama were to win a second presidential term, it would finish in January 2017. So, in fact, he said to Russia and the world that during his second term in office there is not going to be a missile shield in Poland, and what happens in 2018 is not his concern. By the end of this year a base for US F-16 fighter planes will have been established in Poland and for the first time American troops will be present on Polish soil. How do you see this? This is a small positive step in the right direction. I do not disagree with it and I hope that our cooperation with the US develops further. We look at the US as a European power and we have to make the next American president – whoever it may be – once again show that the US is interested in our region. I think that American strategists are starting to realize that the policy of “reset” with Moscow has not resulted in an improvement in American relations with Russia, and that a new approach to these relations is now needed. We should observe these trends and be more active in setting our own agenda with the Americans. But to do so, we need the will and the ability. ●

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OPINION & ANALYSIS

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SEPTEMBER 17-23, 2012

Why Germany should lead or leave George Soros

“The euro crisis is dividing member countries into creditors and debtors, with the creditors in charge” print money to the European Central Bank (ECB), member countries exposed themselves to the risk of default, like Third World countries heavily indebted in a foreign currency. Commercial banks loaded with weaker countries’ government bonds became potentially insolvent. There is a parallel between the ongoing euro crisis and the international banking crisis of 1982. Back then, the International Monetary Fund saved the global banking system by lending just enough money to heavily indebted countries; default was avoided, but at the cost of a lasting depression. Latin America suffered a lost decade.

Shifting burden Germany is playing the same role today as the IMF did then. The setting differs, but the effect is the same. Creditors are shifting the entire burden of adjustment on to the debtor countries and avoiding their own responsibility. The euro crisis is a complex mixture of banking and sovereign-debt problems, as well as divergences in economic performance that have given rise to balance-of-payments imbalances within the euro zone. The authorities did not understand the

complexity of the crisis, let alone see a solution. So they tried to buy time. Usually, that works. Financial panics subside, and the authorities realize a profit on their intervention. But not this time, because the financial problems were combined with a process of political disintegration. When the European Union was created, it was the embodiment of an open society – a voluntary association of equal states that surrendered part of their sovereignty for the common good. The euro crisis is now turning the EU into something fundamentally different, dividing member countries into two classes – creditors and debtors – with the creditors in charge.

Lack of coherent policies As the strongest creditor country, Germany has emerged as the hegemon. Debtor countries pay substantial risk premiums for financing their government debt. This is reflected in their cost of financing in general. To make matters worse, the Bundesbank remains committed to an outmoded monetary doctrine rooted in Germany’s traumatic experience with inflation. As a result, it recognizes only inflation as a threat to stability, and ignores deflation, which is the real threat today. Moreover, Germany’s insistence on austerity for debtor countries can easily become counterproductive by increasing the debt ratio as GDP falls. There is a real danger that a twotier Europe will become permanent. Both human and financial resources will be attracted to the center, leaving the periphery permanently depressed. But the periphery is seething with discontent. Europe’s tragedy is not the result of an evil plot, but stems, rather, from a lack of coherent policies. As in ancient Greek tragedies, misconceptions and a sheer lack of understanding have had unintended but fateful consequences. Germany, as the largest creditor country, is in charge, but refuses to take on additional liabilities; as a result, every opportunity to resolve

the crisis was missed. The crisis spread from Greece to other deficit countries, eventually calling into question the euro’s very survival. Since a breakup of the euro would cause immense damage, Germany always does the minimum necessary to hold it together.

Considering alternatives Most recently, German Chancellor Angela Merkel has backed ECB President Mario Draghi, leaving Bundesbank president Jens Weidmann isolated. This will enable the ECB to put a lid on the borrowing costs of countries that submit to an austerity program under the supervision of the Troika (the IMF, the ECB, and the European Commission). That will save the euro, but it is also a step toward the permanent division of Europe into debtors and creditors. The debtors are bound to reject a two-tier Europe sooner or later. If the euro breaks up in disarray, the common market and the EU will be destroyed, leaving Europe worse off than it was when the effort to unite it began, owing to a legacy of mutual mistrust and hostility. The later the breakup, the worse the ultimate outcome. So it is time to consider alternatives that until recently would have been inconceivable. In my judgment, the best course of action is to persuade Germany to choose between either leading the creation of a political union with genuine burden-sharing, or leaving the euro. Since all of the accumulated debt is denominated in euros, it makes all the difference who remains in charge of the monetary union. If Germany left, the euro would depreciate. Debtor countries would regain their competitiveness; their debt would diminish in real terms; and, with the ECB under their control, the threat of default would disappear and their borrowing costs would fall to levels comparable to that in the United Kingdom. The creditor countries, by contrast, would incur losses on their

COURTESY OF WIKIMEDIA COMMONS

urope has been in a financial crisis since 2007. When the bankruptcy of Lehman Brothers endangered the credit of financial institutions, private credit was replaced by the credit of the state, revealing an unrecognized flaw in the euro. By transferring their right to

Better Germany as a “benevolent hegemon” than the creation of a two-tier Europe, says George Soros claims and investments denominated in euros and encounter stiffer competition at home from other euro zone members. The extent of creditor countries’ losses would depend on the extent of the depreciation, giving them an interest in keeping the depreciation within bounds.

Keynes’ dream After initial dislocations, the eventual outcome would fulfill John Maynard Keynes’ dream of an international currency system in which both creditors and debtors share responsibility for maintaining stability. And Europe would avert the looming depression. The same result could be achieved, with less cost to Germany, if Germany chose to behave

as a benevolent hegemon. That would mean implementing the proposed European banking union; establishing a more-or-less level playing field between debtor and creditor countries by establishing a Debt Reduction Fund, and eventually converting all debt into euro bonds; and aiming at nominal GDP growth of up to 5 percent, so that Europe could grow its way out of excessive indebtedness. Whether Germany decides to lead or leave, either alternative would be better than creating an unsustainable two-tier Europe. ● George Soros is chairman of Soros Fund Management and of the Open Society Institute. Copyright: Project Syndicate, 2012.

Editorials are the opinions of WBJ’s editorial board. Other opinions are those of the authors alone. Comments, opinions and letters should be sent to editor@wbj.pl. Please include a name and contact information and clearly indicate if they are to be considered for publication.

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COVER STORY

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SEPTEMBER 17-23, 2012

Listed companies

Summer surge on the WSE Andrew Nawrocki & Iza Arciszewska The Warsaw Stock Exchange’s main indices have risen strongly in recent months, but doubts remain about how long investor confidence will last Between the beginning of June and early September, the Warsaw Stock Exchange’s blue-chip WIG20 index gained nearly 17 percent, outdoing most major European indices. The overall WIG, meanwhile, rose by more than 18 percent over the same period. WBJ spoke with leading banking analysts and fund managers to find out what was behind the recent gains. And, perhaps more importantly, to find out whether or not investors in Poland should remain bullish, or head for the hills.

M&A and hope

WIG20 rose 4.32 percent over the course of last week, while the WIG grew 3.73 percent.

Dreaming of dividends Perhaps most important in explaining gains over the last few months are the huge sums paid out in dividends by the largest companies – many on

“WSE indices have reacted positively to moves by European policymakers to quell the crisis”

COURTESY OF WBJ/ARCHIVES

Not counting January, both the overall WIG and WIG20

took a hard hit earlier this year, with both indices shedding approximately 10 percent of their values. Construction stocks have seen the largest declines, with the broader WIG-DEWEL shedding 25 percent of its February values, following bankruptcy announcements by firms struggling with the costs of Euro 2012 building projects. Worse, stocks within this sector are continuing to fall, and many analysts predict further declines. But since June, stocks listed on the WIG20 have seen a spectacular rebound, gaining immensely, with many companies in the chemical sector seeing some of the largest gains.

last few months,” said Mr Mrówczyƒski. Synthos, which is listed on the WIG20 and is the largest chemical company on the WIG-CHEMIA index, has risen by around 5 percent since the beginning of June. Another reason for the recent surge in stock prices, especially on the WIG20, can

“One part of the reason that may explain increases on the overall WIG and WIG20 were a series of takeover bids and hostile acquisition attempts slightly before mid2012,” said Pawel Cymcyk, analyst at ING TFI. One of the largest of these was in the chemical sector, with a series of tender offers for Azoty Tarnów made by Russian Acron. The share price of Azoty Tarnów has risen by over 20 percent since June, pushing up the broader WIGCHEMIA index as well. Indeed the WIG-CHEMIA index has been one of the leaders among all sub-indices, gaining close to 15 percent. Mr Cymcyk’s view was echoed by Krzysztof Mrówczyƒski, an analyst at Bank Pekao. “Prices of chemical stocks have been pumped up by all these tender offers in the

The blue-chip WIG20 index has gained almost 14 percent over the last three months

be attributed to a general “risk-on” sentiment. Trading long on hope has been an onand-off theme in 2012, although in recent months there has been a general feeling of optimism. “Support from [German Chancellor Angela] Merkel and ECB president Mario Draghi over this past summer has definitely lifted markets,” said Mr Cymcyk. He was quick, though, to explain that trading long on hope is precarious, and that the future of Greece in the short term is still uncertain. In recent weeks, WSE indices have reacted positively to moves by European policymakers to quell the crisis, including the ECB’s announcement that it will launch an unlimited bond-buying program. Indeed, the WIG20 rose to its highest level since October 2011 on Friday of last week, growing 2.71 percent in a single day. The

the WIG20. Nearly 200 listed companies have paid out, or plan to pay out, dividends to shareholders. For the WIG20 alone, over z∏.18 billion is expected to be returned to shareholders, up more than 30 percent from 2011. According to ¸ukasz Pa∏ka, an analyst at financial portal Money.pl, one of the main reasons why companies are paying out record dividends is that they are expecting hard times. Firms prefer to share their profits rather than pursue investments in times of such uncertainty. Politics has its say too. Of the 13 companies on the WIG20 that have paid out dividends so far in 2012, six are partially owned by the state and two have indirect government equity participation. And to meet budget inflows, the government has estimated that it will earn z∏.8.5 billion from dividends this year, a figure that would beat the 2009 record, when z∏.7.8 billion was

collected. As Mr Pa∏ka put it, “It is clear that the Polish government wants to take advantage of the fact that many companies are awash in cash, and do not necessarily want to pursue additional investments in the short run.” This all means good news for shareholders’ long positions on stocks on the WIG20, with metals firm KGHM and insurer PZU leading the way in dividend payments. “Not only domestic, but so too foreign investors are rushing in to gobble up relatively cheap shares of the largest companies on the WIG20 to take advantage of dividend payments,” said Grzegorz Zatryb, chief strategist at Skarbiec TFI, an investment firm. As he put it, “WIG20 shares don’t underperform when dividends are paid out, they can generally be seen as dividend-proof.”

What’s next? Market analysts across the board agree that restoring confidence in the euro zone is key to the direction in which markets will move in the upcoming months. With the situation in Greece still unclear and looming over Europe after two years, technical indicators and other market influences mean less in such an environment. Moreover, the Polish economy grew by a worse-than-expected 2.4 percent y/y in Q2 – the worst reading since Q3 of 2009, as the impact of the European debt crisis started to be felt in earnest.

COVER STORY

going long on stocks on the WIG20 is probably the best bet if one wants exposure to Polish equity,” said Mr Zatryb.

One sector that will surely be impacted negatively if hope fades further, though, is the banking sector. “Good times

Polish debt proving popular Perhaps most telling of the “risk-on” sentiment towards Poland in recent months has been the recent rush by foreign investors to buy Polish treasuries. Poland, still viewed as a risky country by some foreign investors, saw huge inflows in June and July, with foreign investors gobbling up Polish debt. Moreover, in September, Poland sold $2 billion of new benchmark dollar bonds after its borrowing costs fell to record lows. With many of the safest foreign government bonds producing negative yields, Polish

treasuries have become widely attractive, especially on the back of a growing (albeit decelerating) economy and stable governance. Data from the National Bank of Poland shows that of the z∏.3.5 billion that flowed into Poland in June, over z∏.2.3 billion alone – roughly 65 percent of inflows – went into Polish treasuries. This huge demand has some analysts pointing to a possible credit upgrade for Poland sometime in the first half of 2013. ●

will launch an unlimited bondbuying program has heartened investors, but a fresh round of bad news could quickly spell an end to the WSE’s latest surge. ●

Pay masters Value of dividend per share paid this year by companies listed on the WIG20 30

28.34

22.43

20 15 10 5 1.27 0.10 0.31 0.50

2.76 1.50 1.83 2.19

4.00

5.38 5.38

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PZ U

0 PG E s eco Cit iH an dlo w Bo y gd an ka Pek ao

“In such an environment of deteriorating conditions, on the backdrop of cheap stocks and large dividend payments,

and the situation in the euro zone remaining dangerous, it is imperative for Polish stocks that the European crisis is brought under control. The ECB’s announcement that it

For how long will the WIG and WIG20 keep rising?

for banking are more or less over,” said Mr Zatryb. Since June, the WIG-BANKI index has seen a rise of almost 15 percent, but it is likely that the sector will see falls in the upcoming months. Another sector that investors should be wary of is chemicals. In the words of Mr Mrówczyƒski, “generally, chemical companies (those producing basic chemicals) outperform other industries when there is an economic upturn, but when the economy slows down, their margins are under greater pressure than other industries.” Moreover, Mr Mrówczyƒski said that the “cyclical peak in the basic chemicals segment is already behind us. This means that in the coming quarters margins of companies from the WIG-CHEM index should erode.” However, they should not underperform as much as they did in 2009, when many chemical producers nearly went bankrupt, he said. So, despite recent surges on the WSE, the long-term outlook remains deeply uncertain. The reasons behind the increases are in many cases tenuous, with investors often banking on nothing more than hope, as well as a spree of dividend payouts that will come to an end sooner rather than later. With the Polish economy starting to slow dramatically

www.wbj.pl

TVN Tau ron Syn tho s PK OB P TPS A

TOMASZ PACZOS/FOTONOVA

SEPTEMBER 17-23, 2012

Source: Money.pl

A timely boost Revenues earned by the Polish Treasury from dividends (z∏. bln) 10 8.20

7.80

8 *Budget assumption 6

4.40 3.50

2.00

2.90

2.60

2006

2007

2008

2.20 2

2005

2009

2010

2011

2012* Source: Money.pl

FINANCE & ECONOMICS

Record-low yields aren’t driving away demand for Polish government debt Polish government bonds are gaining popularity, as bonds from other governments deemed “safe” by international investors continue to see yields shrink. Poland, part of a region with its own financial difficulties, is seen as somewhat riskier than the US or Germany, but still a solid bet, due to its stability and strong fundamentals. As a result, Polish bonds are proving popular, and are achieving record-low yields in their own right. Last week, the Polish government sold $2 billion in 10-year dollar-denominated bonds at a record-low yield – just 150 basis points above US treasuries. Demand for the bonds reached as high as $9 billion, Reuters reported. The yields have fallen so strongly, in fact, that some analysts believe it is unlikely

they’ll get any lower. “When you look at the slope of the Polish yield curve, it is now very flat,” Andrew Weir, a global bond fund manager at Fidelity, told Reuters. “It seems to me that we are approaching the moment when Polish bonds are no longer as cheap as they once were.” “We are already seeing lower inflows into the market. I do not think that investors want to somehow offload Polish debt, but these capital inflows will probably be smaller,” he added. Yields on Polish 10-year bonds were around 4.885 percent last week, having fallen from around 6 percent toward the end of last year. The yields of 2- and 5-year bonds are close to their lowest levels in history, daily Parkiet reported. Nevertheless, analysts at Credit Suisse expect Polish bonds to remain popular. “A stable fiscal condition in Poland can increasingly generate demand by foreign

investors for alternative financial instruments in the G10 and the euro,” the bank wrote in a statement. “This in turn can result in improved performance of the Polish market in comparison with other countries in the region and the G10.” The bank’s analysts expect a significant strengthening of the z∏oty in the coming months as well. As WBJ went to press the z∏oty was hovering around z∏.4.08 to the euro. Credit Suisse sees the z∏oty strengthening to z∏.4.0 to the euro over the next three months, and to z∏.3.95 over the next 12 months. The bank noted that Poland will continue to lead the region in terms of economic growth and added that while the rate-setting Monetary Policy Council has taken a more moderate tone, it is unlikely to reduce interest rates until the end of the year, since inflation should remain high until at least November. AK

Polish CPI inflation slowed to 3.8 percent year-on-year in August, from 4 percent y/y a month earlier, Central Statistical Office data showed. The result was in line with expectations. “This development was due to further cuts of food prices (mainly vegetables and fruit) as well as of clothing and footwear prices,” Bank Zachodni WBK wrote in a report. “In our view this is still not the beginning of a durable downward trend,” Piotr Bujak, chief economist Poland at Nordea Bank, wrote in an email. “At least until October inflation will remain close to 4%, i.e. clearly above the central bank’s inflation target of 2.5% with allowed fluctuations

of +/-1%-point. Thus, we think that the slight inflation drop in August is not enough to convince the majority of [Monetary Policy Council] members to trim rates already in October,” he added. He said, however, that

Nordea believes the next data due for release this month, including industrial output and retail sales, “will tip the scales in favor of rates-setters calling for a rate cut as soon as possible.” GP

Still high Poland's CPI inflation rate (%), August 2011-August 2012 5.0 4.7 4.4 4.1 3.8 3.5

'11 Oc t. ' 11 No v. ' 11 De c. '11 Jan . '1 2 Feb . '1 2 Ma r. ' 12 Ap r. ' 12 Ma y '1 2 Jun . '1 2 Jul . '1 2 Au g. '12

Polish government bonds popular among international investors

Polish CPI inflation eases

'11

Debt market

SEPTEMBER 10-16, 2012

Se p.

www.wbj.pl

Au g.

Source: Central Statistical Office

One-third of Poles fear for their jobs Some 31 percent of working Poles fear they could lose their jobs, since, for the first time in five years, more firms are planning to fire than hire employees, according to a survey from Manpower and ARC Rynek i Opinia. By comparison, in last year’s survey, 25 percent of Poles were worried about los-

ing their jobs. Unemployment is currently at 12.4 percent in Poland, with almost 2 million people registered jobless. Some 49 percent of Poles feel secure in their jobs, while 40 percent believe that if they lost their current jobs, they would have a significant problem finding a new one.

Understandably then, 33 percent of respondents said they would accept a pay cut in order to keep their job, with another 37 percent saying they were “unsure” as to how they would react. Thirty percent said they would certainly refuse to take a pay cut.

Advertorial Feature

The changing landscape of outsourcing It is no longer only about cutting costs, the challenge is to leverage the SSC and create value by finding smart ways to drive their organizations forward globally. The basic instincts of business have remained unchanged over time. The ultimate objective to create value for shareholders triggers the urge to maximize operational cash flow, which in turn drives the quest for maximizing profitability. A combination of healthy top-line growth together with careful cost control has served most companies well over the years. However, the

Andrew Majlath, CEO of Process Solutions Group

ever-changing environment and the need to forge a competitive edge in the market means that all companies must continuously work smarter just to stand still. Developments in work practices together with advances in technology have enabled companies to better organize and align their non-core internal processes. Reducing internal complexity and implementing best practices have been commonplace for most international businesses. The vast majority of larger corporations have completed or are close to completing the implementation of one or another integrated IT solution (e.g. SAP, Oracle, MS Dynamics AX) at most of their major business operational sites around the world. As a result of this they are able more efficiently and more effectively to manage the administration of their internal processes. Once on a common IT platform, many corporations realize further efficiencies by relocating part of their internal administrative processing and support functions into a small number of centralized locations, often to just one single location, i.e. the Shared Service Center or SSC, usually located in a “lowcost” country with a well-educated and highly productive workforce.

During the past 10 years or so, the number of SSCs being established in CEE has been accelerating incredibly. The region now has nearly 500 SSCs, getting close to the same as in Western Europe. More than 90 percent of these SSCs are located in five countries. It’s not far short of a revolution. We at Process Solutions operate a Business Process Outsourcing business focused on providing hands-on accounting and tax compliance solutions for more than 300 international clients. Established in 1999, we have close to 300 people in five offices located specifically in the above countries. We specialize in providing full support to CEE SSCs. Not only do we provide internal accounting and payroll for the SSC itself, but also training for the SSC personnel, qualified loan staff, as well as statutory accounting and tax services with global coverage. A typical multinational company which has its SSC located in CEE countries will serve somewhere between 10 and 50 countries. Therefore the demand for competent personnel with strong language skills is high. Those SSCs that are at a more advanced stage in their develop-

ment have started to outsource certain parts of their SSC activities. Typically they are outsourcing the lower complexity transaction processing tasks to the large Business Process Outsourcing (BPO) service providers, who are then relocating these simple, well defined, low risk tasks to lower cost locations in CEE and Asia. This “hybrid” solution, where part of the activities are outsourced, effectively segments the SSC into layers – outsourced transactional BPO SSCs/in-house Centers of Scale for simple transaction processing, leaving the more complex tasks to be handled by the SSC Centers of Excellence. The SSCs in CEE are therefore tending to develop into Centers of Excellence over time and taking on ever more complex tasks. Some more mature SSCs are now taking over the Compliance Management function, handling parts of the statutory accounting and tax function which has typically remained inhouse at each local country. Since the financial crisis the business environment has become even more difficult for most corporations and they can no longer rely on guaranteed growth either in domestic or international markets,

BROUGHT TO YOU BY PROCESS SOLUTIONS

there is no apparent slow-down in the trend towards SSCs. Organizations are still looking to establish SSCs if only to catch up with their competitors. But it doesn’t stop there. For existing SSCs it is no longer about only cutting costs, the challenge is to leverage the SSC and create value by finding smart ways to drive their organizations forward globally.

Lokale Immobilia gears up for New Europe GRI 2012 with an interview of GRI’s managing director, as well as market analysis features 16-17

LOKALE IMMOBILIA

W a r s a w B u s i n e s s J o u r n a l ’s w e e k ly s u p p l e m e n t o n re a l e s t a t e , c o n s t r u c t i o n a n d d e v e l o p m e n t

Metro malls BREEAMcertified After an almost fourmonth-long audit, 11 shopping centers from the real estate portfolio managed by Metro Properties have obtained BREEAM In-Use certification, which is given to existing buildings. The centers in question are nine M1 facilities, the CH Ster shopping center in Szczecin and the CH Ursynów shopping center in Warsaw. They have been rated “excellent” in building management and “very good” in asset rating. ●

In this issue WTT on sale . . . . . . . . . . . . . . . . .15 Hala Koszyki deal . . . . . . . . . . . .15 KSP funds . . . . . . . . . . . . . . . . . .15 GRI interview . . . . . . . . . . . . . . .16 Property-related stocks . . . . . .16 Investment market . . . . . . . . . .17 SEE overview . . . . . . . . . . . . . . .17

Warsaw Trade Tower skyscraper put up for sale Akron Investment Central Eastern Europe II is selling the tallest office building in the region

over 208 meters tall, making it the tallest office building in Central Europe. The skyscraper is located in Warsaw’s Wola district and is expected to benefit from the planned completion of the central stretch of the capital’s second subway line in 2014. It comprises more than 45,000 sqm of class-A space and its tenants include KPMG, American Express, Mattel and AXA. “Given the prominence and excellent quality of the Warsaw Trade Tower, we anticipate good interest in the sale process,” Tomasz Trzós∏o, head of capital markets, CEE, at Jones Lang LaSalle, said in a

The Akron Investment Central Eastern Europe II closed-end investment fund has announced plans to sell the Warsaw Trade Tower office building in the Polish capital that it acquired in 2006. Colliers International and Jones Lang LaSalle will handle the sale process. Designed by the American RTKL Associates architectural studio and completed in 2000, the WTT features 43 floors and stands at

statement. “The compelling combination of Poland’s ongoing economic growth and Warsaw’s low city center office vacancy rate supports the WTT offering,” stated Neil Gregory-Eaves, head of the investment services team, Warsaw, at Colliers International. “The property is one of the few core office assets currently for sale in the city center,” he added. Mr Gregory-Eaves and Jones Lang LaSalle’s Trzós∏o were also involved in the recent sale of the Warsaw Financial Center office skyscraper in Warsaw. Adam Zdrodowski

Griffin Group acquires Hala Koszyki in Warsaw Real estate investor and developer Griffin Group has acquired Hala Koszyki, a company involved in the process of revitalizing an eponymous historic market hall in Warsaw, from Avestus Real Estate. The value of the deal, which was brokered by Colliers International, has not been revealed. Originally, Avestus Real Estate, formerly known as Quinlan Private Golub, planned to renovate the hall and develop new mixed-use buildings in its neighborhood. Now, however, the company has decided to sell the scheme and focus on its other investments in Poland. Griffin Group is planning to continue the process of revitalizing Hala Koszyki which is, after completion,

expected to offer “interesting and modern retail space surrounded by office buildings,” the company said in a statement. The JEMS Architekci studio has been tasked with designing the Hala Koszyki project. An advanced architectural concept for the planned investment is to be presented before the end of

the year, Griffin Group said. The acquisition of Hala Koszyki follows a number of investments made by Griffin Group in Poland in recent years. In January 2012, for one, the company acquired the Prima Court office building in Warsaw and in April it added an investment plot in Gdaƒsk to its portfolio. Adam Zdrodowski

COURTESY OF COLLIERS INTERNATIONAL

Warsaw Stock Exchangelisted developer Echo Investment has signed an agreement with the Municipality of Jelenia Góra, Lower Silesia voivodship, concerning the development of its planned Galeria Sudecka shopping center in the city. The agreement calls for, among other things, the development by Echo Investment of road infrastructure near the planned mall. The investor plans to apply for a building permit for Galeria Sudecka within the next two months. Construction on the 53,000-sqm project is scheduled to launch in spring 2013 and finish one year later.

Office

COURTESY OF COLLIERS INTERNATIONAL

Galeria Sudecka deal signed

SEPTEMBER 17-23, 2012, LI 17/37

The WTT building offers over 45,000 sqm of office space

KSP to launch investment funds Real estate investor and developer Kulczyk Silverstein Properties (KSP) has established an institutional real estate investment management platform called KSP Real Estate Investment Management (KSP REIM) for investors seeking exposure to the CEE region. KSP REIM, which will launch and manage closedend funds, intends to raise €200-300 million of equity over the next two years, which it will invest in commercial property in capital and secondary cities in Poland and the Czech Republic. After five years, the entity plans to manage assets valued at a total of over €1.5 billion. “We will focus on investing in the major cities of the CEE

region which are characterized by high economic growth,” Otis Spencer, cohead of KSP REIM, said in a statement. “We are looking for projects having both income potential as well as opportunities to increase value. We are particularly interested in unique projects in terms of location and whose value can be increased by renovation or repositioning,” Mr Spencer added. Established at the end of 2010, KSP is a joint venture of Kulczyk Real Estate Holding and Silverstein Properties. The company recently bought two office buildings in central Warsaw from Hochtief Development Poland. Adam Zdrodowski

Warsaw Business Journal presents Real Estate weekly newsletter • Know about the newest projects before they’re on the market • Keep up to date on the latest tenders and auctions • Learn the latest trends in Poland’s dynamic office, residential and retail sectors • Find out who’s who in Polish real estate To subscribe: e-mail subscribe@wbj.pl or call +48 22 639 85 68, ext. 201 and sign up for free two-week no-obligation trial subscription

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

SEPTEMBER 17-23, 2012

New Europe GRI 2012 will take place November 26-27 at the Hyatt Regency in Warsaw. For more information, log on to globalrealestate.org

Special New Europe GRI 2012 issue New Europe GRI 2012

Lokale Immobilia talks to Ronny Gotthardt, managing director at the Global Real Estate Insitute, which will be holding its New Europe GRI 2012 conference in Warsaw this November, about the situation of the property markets in Poland and the region Adam Zdrodowski: You are holding the New Europe GRI summit in Warsaw for the second time in a row. Does this mean Poland’s property market continues to stand out in the region? It does, despite the trying situation in the euro zone. Or because of it. Poland has shown remarkable resilience, outshining all else in CEE. Property investors like such scenarios, and while investors have withdrawn widely from the region, Poland has been buoyant with capital coming in. In terms of potential, the Polish property market is

attractive, not just Warsaw, and investors are discovering more of the region’s opportunities for new and re-developments. The availability of debt is creating a bottleneck, and hence the transactions volume has been lower recently. It is widely expected that the upcoming months will be more difficult for the Polish economy. Could the country’s real estate market see more problems next year? Alongside the Czech Republic, Poland is the only alternative and remains the magnet for capital. However, if Europe slips into a severe recession, and in particular if the German economy loses steam, both of which are quite likely, the Polish economy will not be immune, though in and amongst the gloom Poland might retain its haven status, cushioning it from the worst. The best insurance will be to continue favorable conditions and policies for foreign capital – and they will keep coming. Actual transaction numbers reveal less activity in 2012, but

the real estate outlook remains better than elsewhere.

new markets, and that is what GRI is about.

As the euro zone continues to suffer, do you see increased investor interest in the Central and Eastern Europe (CEE) region and how is that reflected in the attendance at the conference? CEE is increasingly incoherent. Poland and the Czech Republic together account for 90 percent of all business in the region, with Poland getting the lion’s share of interest. Since the beginning of the crisis, investors have been retreating from CEE markets, finding better value domestically. And those investors are coming back only slowly and selectively. The number one choice is Poland. Beyond that investors act asset-driven, not markets. The New Europe GRI’s return to Warsaw illustrates the importance of the Polish market. At the same time there will be more senior regional players – Romania, Slovakia, Hungary and others, and some major foreign investors and developers. Connections are the key in

What kinds of risks could the potential investor in Poland and CEE face? Or is the region today regarded as a safe haven in Europe? Who would consider anything safe today? Poland is considered in much better shape than other economies, closer to core than emerging, similar for the Czech Republic. The region overall is heterogeneous. The greatest threats are from outside, like Europe and the world economy, in its tow a nationalist and protectionist drift in certain parts. History shows protectionism never solves pain but scares capital away, if anything. Hungary, Romania, even though fundamentals are positive, are problematic for investors. On the reverse, the Polish government sends positive signals and as such portrays itself as a safe haven. Long term Central, Eastern and South Eastern Europe are highly attractive for developers and investors.

Which sector of the Polish property market has been performing best of late and in which could some potential problems loom? The most money is in the office market and that continues to attract investors. Higher proportions of disposable income and availability of private credit creates demand in retail and shopping centers across the country. With [Poland’s] population of around 40 million, foreign retailers are expanding continuously, but often face a lack of quality retail stock. Other sectors might not be as fancied; residential has lost some of its sheen because of investor concern and restraint in mortgage approvals. The overall shortage in housing, however, will make a future upturn likely. In Poland, the Warsaw market continues to attract the most attention from investors. How are the regional Polish cities perceived? Warsaw is the center, preferred by investors and lenders

COURTESY OF GLOBAL REAL ESTATE INSTITUTE

Poland still the region’s ‘magnet’ for capital

Poland is the number-one choice for investors in CEE, Mr Gotthardt said alike. But investors venture out towards regional centers, Gdaƒsk, Katowice, Kraków, Wroc∏aw, ¸ódê and a few others as they find better value in the regions, as long as good infrastructure, sufficient population, local industry and jobs are available. Recent examples like AIG/Lincoln developing a retail project in Gdaƒsk or Immo Invest developing multifamily buildings in Luboƒ illustrate the opportunities are there. ●

Property-related stocks Security

Closing price on Sep 13

% change (week)

52-week low

52-week high

% change (year)

Total shares

Market value (z∏. mln)

BUDIMEX

49.00

0.31

45.85

88.35

-24.21

25,530,098

1,250.97

CELTIC

9.00

-14.20

7.02

22.70

-54.43

34,231,466

308.08

DOMDEV

26.00

5.26

23.50

42.80

0.00

24,670,397

641.43

ECHO

4.01

5.80

3.05

4.40

21.52

420,000,000

1,684.20

ELBUDOWA

94.35

0.75

87.00

120.00

-7.50

4,747,608

447.94

ENERGOPLD

0.18

-10.00

0.17

2.96

-93.68

70,972,001

12.77

ERBUD

11.89

2.06

11.33

23.30

-41.72

12,644,169

150.34

GANT

3.45

-4.43

3.45

9.85

-56.77

20,120,000

69.41

GTC

6.70

6.35

5.20

12.49

-29.55

319,372,990

2,139.80

HBPOLSKA

0.03

-40.00

0.02

1.43

-96.74

210,558,445

6.32

JWCONSTR

4.20

1.69

3.85

8.42

-39.91

54,073,280

227.11

LCCORP

0.92

3.37

0.85

1.48

1.10

447,558,311

411.75

MARVIPOL

10.35

-0.38

6.20

11.00

16.55

36,923,400

382.16

MIRBUD

1.09

-0.91

0.98

2.68

-53.02

75,000,000

81.75

MOSTALWAR

12.94

1.89

11.30

25.88

-35.62

20,000,000

258.80

MOSTALZAB

0.94

1.08

0.81

1.80

-30.37

149,130,538

140.18

ORCOGROUP

6.38

-2.15

6.38

22.00

-70.67

99,992,889

637.95

PBG

3.98

-22.11

3.36

92.00

-94.19

14,295,000

56.89

PLAZACNTR

2.00

-3.85

1.80

2.94

-16.32

297,174,515

594.35

POLAQUA

3.53

-8.31

3.40

10.30

-66.70

27,500,100

97.08

POLIMEXMS

0.52

-7.14

0.48

2.04

-62.86

521,154,076

271.00

POLNORD

11.80

-0.84

10.49

19.85

-5.45

23,798,439

280.82

RANKPROGR

7.80

2.63

7.10

16.97

-25.64

37,145,050

289.73

ROBYG

1.14

-4.20

1.04

1.75

1.79

257,935,500

294.05

RONSON

0.64

0.00

0.63

1.15

-33.33

272,360,000

174.31

TRAKCJA

0.70

-7.89

0.65

1.87

-53.02

232,105,480

162.47

ULMA

38.99

3.97

37.20

74.80

-34.53

5,255,632

204.92

UNIBEP

4.48

2.99

3.60

6.61

-2.40

34,021,684

152.42

WARIMPEX

3.10

4.03

2.64

5.77

-42.59

54,000,000

167.40

ZUE

6.46

0.94

5.07

9.40

-29.78

22,000,000

142.12

SEPTEMBER 17-23, 2012

LOKALE IMMOBILIA – REAL ESTATE

Special New Europe GRI 2012 issue

www.wbj.pl

New Europe GRI 2012 will take place November 26-27 at the Hyatt Regency in Warsaw. For more information, log on to globalrealestate.org

Investment market

Poland continues to outperform CEE peers

Commercial property investment volumes are expected to decrease in Poland this year but a number of spectacular transactions have closed in recent months, including the sale of two office towers in Warsaw, showing that the country is still highly attractive for investors. Moreover, more deals appear to be in the pipeline.

Lower volumes Overall commercial property investment volumes in the CEE region decreased by 60 percent year-on-year to almost €2.1 billion in the first half of 2012,

according to CBRE data. However, the most significant decreases were recorded in countries seen as more risky. Meanwhile, Russia and Poland accounted for 83 percent of the deal flow in the region in H1. Office investment transactions in the Polish market were valued at a total of just €140 million but were expected to surge in the second half of the year. The retail transactions volume in Poland amounted to €596 million and included the largest deal across CEE in the period – the sale of the Z∏ote Tarasy shopping center in downtown Warsaw.

Still attractive It is evident that the total investment volume in Poland will decrease this year but the

final figure is difficult to forecast since several major deals are now being negotiated and it is not certain if they will be closed in 2012, said Michael Atwell, recently appointed head of CEE capital markets at CBRE. Mr Atwell stressed that as the largest market in the region and a country with a stable economy and strong fundamentals, Poland continues to be attractive for investors. This, he said, is borne out by several large deals, including the sale of the WFC tower in Warsaw, that the country has seen of late. There remain ample opportunities to invest in prime property in the Polish market, Mr Atwell said. “What has changed over the last few years is the fact that transactions take longer to negotiate,” he added.

Warsaw-focused According to Mr Atwell, Warsaw is now getting the most investor attention. Particularly in demand are office buildings located in the capital’s central business district, as well as those in the city’s popular and constantly growing business hub in Mokotów. Location and visibility are among the factors that count most for investors when choosing potential acquisition assets. “Investment funds are now showing relatively little interest in the regional Polish cities,” Mr Atwell said. In the retail sector, investor interest is more evenly distributed and investors are generally looking for prime large-scale assets, both in Warsaw and the secondary Polish cities. The recent sale of the Manufaktura

COURTESY OF JONES LANG LASALLE

Despite lower investment volumes, the country is still seeing some of the largest deals in the region

The WFC sale was one of the biggest deals this year mall in ¸ódê, for one, is an example of the trend, Mr Atwell added.

Same investors Mr Atwell, who most recently worked as partner and head of Cushman & Wakefield’s Middle East operations, after having spent almost a decade in Poland

and Hungary, said that more or less the same investors have been active in the Polish market in recent years, although a few new entrants are being seen. Some of the most active players in the Polish market are now German investment funds and British pension funds. Some major American investors also remain interested in investing in property in the country, he noted. It remains to be seen whether new investors from other parts of the world will enter Poland in the near future. Some Middle Eastern entities are now investigating investment opportunities in CEE, Mr Atwell said, and pointed out that a Qatari fund bought telecom TP’s headquarters in Warsaw last year. Adam Zdrodowski

SEE markets

Southeastern promise The SEE region is characterised by low transaction volumes and falling values, but experts say its prospects are positive The real estate markets of Southeastern Europe have been witnessing low transaction volumes and falling values for some time now, due to investors’ growing aversion to risk. But market analysts say the situation in the region is set to improve.

“Investors’ aversion to risk has increased across Europe in the past year as the sovereign debt crisis and other macro concerns have dominated the agenda and generally led to increased caution among investors and occupiers,” said David Hutchings, head of European research at Cushman & Wakefield. “Smaller and less liquid markets have in particular suffered as a result of this and much of SEE falls in to this category,” he added.

Cyprus’ banking sector, for one, is quite dependent on that of Greece, and is suffering due to a perception of high risk. “Cyprus, having a banking sector closely linked to Greece and becoming the latest country to seek a bailout, is also suffering from limited investor interest,” said Eri Mitsostergiou, director European research at Savills. Investor interest, meanwhile, has been low in other countries in the region, such as Romania and Bulgaria.

“Romania and Bulgaria are less weighed down by fiscal burdens … nevertheless, investor interest has been sporadic there and focused on prime assets,” Ms Mitsostergiou said. “Most of the prime deals have now taken place in the market,” she added.

Positive outlook However, analysts say that prospects for the region are positive. The EU and the European Central Bank are taking steps to ease the uncertainty

surrounding the future of the euro zone. These steps, analysts say, should boost investor confidence and eliminate some of the speculation taking place in markets. This is especially important for Greece, where speculative trades are being made in relation to its possible exit from the currency bloc. Analysts say that while most investors will stay focused on core markets in Western Europe, the shortage of appropriate stock in most areas and demand for yields

will cause some of them to look more widely around Europe for opportunities, in places such as the SEE region. “If the current euro crisis does not worsen, we are cautiously optimistic about the near to medium term future – we are for sure not at the end of the crisis or close to the end, but hopefully we have passed the end of the beginning,” said Jens J. Moller Madsen, managing director SEE at Jones Lang LaSalle. Izabela Depczyk

THE LIST

www.wbj.pl

SEPTEMBER 17-23, 2012

Corporate Services

Auditing and Accounting Companies Ranked by revenue from auditing and accounting in 2010

Total revenue (z∏. mln)

Accounting / Auditing

Tax consultancy / Other

Tax Auditing / Accounting consultancy / M&A

Specialization: Other

Selected clients

Number of: Accountants / Internationally licensed auditors / Poland-licensed auditors

Company name Address Tel./Fax E-mail Web page

Specialization

Total number of employees / Number of full-time employees / Year founded in Poland

Rank

Revenue split Revenue from auditing and accounting (z∏. mln)

www.bookoflists.pl

Top local executive / Title

BRE Bank; TP; PKO BP; ITI/TVN; Polska Telefonia Cyfrowa; Shell; KGHM; Kompania Piwowarska; Samsung Electronics; Volvo; Electrolux; Toyota Motor Manufacturing; RWE; Coca Cola; GlaxoSmithKline Pharmaceuticals; NBP; Jastrz´bska Spó∏ka W´glowa; LG Group; Jeronimo Martins; Schenker; GPW; Philip Morris; Alticor; Ministry of Finance; PGNiG; Kredyt Bank; Polkomtel; Google; GazSystem; Tesco; Bumar

1,765 1,765 1990

148 70 162

Olga Grygier-Siddons

1,585 1,394 1990

259 19 87

1st half of 2011 / 2010 / 2009 / 2008

PricewaterhouseCoopers Sp. z o.o. Al. Armii Ludowej 14, 00-638 Warsaw 22 523-4000/22 523-4040 podatki@pl.pwc.com www.pwc.com/pl

WND 231.7 188.9(1) 165.0(2)

WND 419.8 399.7(1) 388.8(2)

6.6% 46.8%

22.7% 23.9%

✓ ✓

Reporting and accounting consultancy; advisory on internal audit, audits of business processes, information systems and advisory on internal control; risk management advisory; legal, tax and business advisory; public subscription offer advisory; financial and strategic advisory for companies and public sector entities; transactional consulting; human capital management; advisory on shared service centers; advisory for investors; sustainable development advisory

Ernst & Young Rondo ONZ 1, 00-124 Warsaw 22 557-7000/22 557-7001 ernst.young@pl.ey.com www.ey.com/pl

213.5(3) 200.0(4) 211.0(1) 182.0(2)

497.0(3) 424.0(4) 444.0(1) 423.0(2)

5% 35%

22% 37%

✓ ✓

Business consulting; financial advisory; IT Asseco Poland; Getin Holding; Grupa consulting; effectiveness management; GTC; ING Bank Âlàski; Mostostal financial risk management; business risk Lotos; Warszawa; Tauron Polska Energia; management; abuse risk management; IT Multimedia; Netia; Poczta Polska; PERN; risk management; European consultancy; CEDC transaction advisory

KPMG ul. Ch∏odna 51, 00-867 Warsaw 22 528-1100/22 528-1009 kpmg@kpmg.pl www.kpmg.pl

106.8 171.2 176.8 176.6(2)

230.0 407.0 455.0 440.3(2)

2% 40%

21% 37%

✓ ✓

Legal, business, financial advisory; risk management advisory

WND

1,289 1,149 1990

24 WND 108

Andrzej Âcis∏owski

Deloitte Al. Jana Paw∏a II 19, 00-854 Warsaw 22 511-0811/22 511-0813 dpoland@deloittece.com www.deloitte.com/pl

68.8 113.6 127.5 125.9

216.2 344.6 340.3 371.8

34%

30% 36%

✓ -

✓ ✓

Consulting; financial advice; risk management

TP; PZU; ArcelorMittal; PGNiG; Fiat; WPP

1,163 1,065 1990

23 63

Marek Metrycki

BDO Sp. z o.o. ul. Post´pu 12, 02-676 Warsaw 22 543-1600/22 543-1601 office@bdo.pl www.bdo.pl

24.4 41.0 43.0 40.1

29.3 51.5 51.6 50.2

WND WND

✓ ✓

Introducing co-partnerships into public rotation IPO; business advisory; financial advisory; finance acquisition; special audits; advisory for trial proceedings; IT advisory; structural funds acquisition; implementation of IT systems; risk management advisory; IT audit; training

ACTION; ALTERCO; AMBRA; ARP; AVIVA; Ceramika NOWA GALA; COMARCH; FAMUR; INDYKPOL; Jupiter TFI; JW Construction; KDPW; KOFOLA; Kronospan; Laboratorium Kosmetyczne Dr. Irena Eris; PCC; Petroinvest; POLNORD; PROKOM; Takenaka Europe; Trakcja-Tiltra; Jagiellonian University; YAWAL; X Trade Brokers

318 293 1991

73 1 26

André Helin

Mazars w Polsce ul. Pi´kna 18, 00-549 Warsaw 22 255-5200/22 255-5299 main@mazars.pl www.mazars.pl

WND 34.0 34.0(5) 36.0(6)

WND 41.0 41.0(5) 40.0(6)

31% 52%

7% 10%

✓ ✓

Business advisory

Air Liquide; Alior Bank; AXA; BNP Paribas Bank Polska; Bonduelle; Camaieu; Citroen; DM IDM; Etam; Farmacol; G+J; Hochland; K2 Internet; Konsorcjum Stali; Leclerc; Orze∏ Bia∏y; Publicis; Raiffeisen Investment; Sofrecom; Swissmed

169 164 1992

51 4 13

Michel Kiviatkowski

Rödl & Partner (Roedl Audit Sp. z o.o.; Roedl Outsourcing Sp. z o.o.) ul. Sienna 73, 00-833 Warsaw 22 696-2800/22 696-2801 warszawa@roedl.pl, www.roedl.pl

21.5 33.9 37.9 35.8

27.4 44.7 62.2 42.5

44.9% 30.9%

1.3% 22.9%

✓ ✓

Legal and tax advisory services; business consulting; IT consulting; training; translation services; HR consulting

WND

289 283 1992

43 2 17

Liliane Preußer; Jens Jungmann; Therese Baginski

Grant Thornton Fràckowiak Sp. z o.o., Sp.k. Pl. Wiosny Ludów 2, 61-831 Poznaƒ 61 850-9200/61 850-9201 info@gtfr.pl, www.grantthornton.pl

WND 23.9 25.7 23.8

WND 34.1 35.7 31.9

27% 44%

29% -

✓ ✓

Economic advisory

PBG; MNI; Koelner; Alchemia; Komputronik; LPP; Monini Polska; RWE Dea Polska; Polkomtel; Estneti Osauhing Oddzia∏ w Polsce; Polski oddzia∏ Nordic Gaming; Dutchmed PL

225 225 1993

65 30

Cecylia Pol; Tomasz Wróblewski

Baker Tilly w Polsce ul. Hrubieszowska 2, 01-209 Warsaw 22 295-3000/22 295-3001 contact@bakertillypoland.eu www.bakertillypoland.eu

8.0 16.2 19.6 18.1

19.6 37.5 39.9 37.4

32% 9%

4% 55%

✓ ✓

Trilux; World Courier; Samsonite; Services for public limited companies; initial PL2012; M&M Aerospace Hardware; Philips & public offerings; due diligence; Lite-On Digital SolutionsCorp; Lilium; management consulting; economic and Coast; MCI Management; Grupa legal analysis; tax advisory; payroll service North Caelum Development; Euromark; NFI outsorcing; full HR and recruitment services Midas

269 254 1990

87 6 7

Steven Foster

Grupa Kapita∏owa PKF Consult ul. Elblàska 15/17, 01-747 Warsaw 10 22 560-7650/22 560-7663 pkfconsult@pkfconsult.pl www.pkfconsult.pl

10.8 14.1 15.3 12.9

13.2 18.8 19.7 17.7

20% 55%

5% 20%

✓ ✓

Financial advisory; IPO prospectus issuing; debuts on NewConnect and Catalyst; accounting; training activities; structural funds; due diligence; valuations

ECCO; TECH-BUD; Besic; JDSU Polska; Nutriad Polska; Capital Group Capital Park; Capital Group Neo BPA; Agencja Rozwoju Przemys∏u; Krajowa Spó∏ka Cukrowa; PKP Intercity

175 128 1993

35 25

Ewa Jakubczyk-Ca∏y

IMPEL ACCOUNTING Sp. z o.o. ul. T´czowa 13, 53-601 Wroc∏aw 11 71 769-5700/71 769-5888 iaccounting.recepcja@impel.pl www.impel.pl

5.6 10.8 10.2 9.4

6.3 11.4 10.6 9.9

92.3% -

4.8% 2.9%

✓ ✓

✓ -

WND

Grupa IMPEL; TIM; Grupa Zaberd; Grupa Vantage

154 154 2007

117 4

Alina Rudnicka-Acosta

TPA Horwath (TPA Horwath Horodko Sp. z o.o., TPA Horwath Accounting Sp. z o.o.) 12 ul. Murawa 12-18, 61-655 Poznaƒ 61 630-0500/61 630-0502 office@tpa-horwath.pl www.tpa-horwath.pl

6.1 10.1 8.8 9.0

6.1 10.1 8.9 9.1

WND WND

✓ ✓

Corporate finance; HR advisory

Strabag; Erbud; Union Investment; Point Park; Aberdeen; Deka Immobilien

116 94 2005

28 1 5

Krzysztof Horodko

WND 10.0 WND WND

WND WND

✓

✓ ✓

Contract audits; HR and payroll advisory; project management; due diligence; controlling; VAT tax collection

WND

100 WND 1999

WND WND WND

Raphael Vieuxmaire

CEO/President

Duleep Aluwihare Managing Partner of Ernst & Young in Poland

Senior Partner

President

Partner

Partner; Expert Auditors

President; Vice President

President

Managing Partner

Exco A2A Polska Sp. z o.o. Al. Niepodleg∏oÊci 106, 02-585 Warsaw 22 847-6117/22 847-9193 war@exco.pl, www.exco.pl

Extor Sp. z o.o. ul. Wyrzyska 9A, 02-455 Warsaw 22 266-0550/22 266-5088 info@extor.pl, www.extor.pl

4.5 8.8 7.6 5.6

95% -

✓

Payroll services

RGA; State Street Bank; SAD; Brunswick Marine; Kingspan Insulation; NWAI Dom Maklerski; Bruckner Polska; Eolos Polska; Hercesa Sagarbe Axial Polska; Vredestein

80 73 1994

60 -

Rafa∏ Strzelecki

System Rewident Sp. z o.o. ul. Rakowiecka 30A, 02-528 Warsaw 15 22 380-0380/22 380-0381 info@system-rewident.com.pl www.system-rewident.com.pl

3.4 7.6 6.7 6.5

4.3 7.8 7.1 6.7

61.5% 35.9%

2.6% -

✓ ✓

HR and payroll; business consulting; stocktaking; trainings

FIS Technology Services; UBB Polska; B3System; Stopklatka; SAP Polska; CB Richard Ellis Polska; Grupa Portfolio Real Estate; Soyter; Grupa Heitman; Multico; Grupa Farmy Wiatrowe

76 73 1995

24 12

Jadwiga Szabat

Estelligence Sp. z o.o. ul. I. Krasickiego 35, 02-611 Warsaw 16 22 250-0550/22 250-0550 kontakt@estelligence.com www.estelligence.com

3.5 6.5 2.7 1.5

WND WND

✓

WND

53 49 2004

39 -

Agnieszka Szwedowicz

Board Member

President

Board Member

THE LIST

SEPTEMBER 17-23, 2012

Total revenue (z∏. mln)

Accounting / Auditing

Tax consultancy / Other

Tax Auditing / / Accounting consultancy M&A

Specialization: Other

Selected clients

Number of: Accountants / Internationally licensed auditors / Poland-licensed auditors

Company name Address Tel./Fax E-mail Web page

Specialization

Total number of employees / Number of full-time employees / Year founded in Poland

Rank

Revenue split Revenue from auditing and accounting (z∏. mln)

www.wbj.pl

Top local executive / Title

187 29 1995

22 136

Zofia Podhorodecka

1st half of 2011 / 2010 / 2009 / 2008

4.1 5.9 5.4 4.1

4.5 6.5 5.8 4.4

35% 56%

5% 4%

✓ ✓

Stock market advisory

Doradcy 24; INBOOK; Liberty Group; TELFORCEONE; INTERSPORT Polska; STI Group; ART NEW MEDIA; Positive Advisor; Odlewnie Polskie; Dom Lekarski; Unima 2000; Makolab; Cementownia WARTA; Wojskowa Agencja Mieszkaniowa; Adesso; Stomil Poznaƒ; Lamda; Gdaƒsk University of Technology;

3.2 5.6 5.3 4.7

3.3 5.9 5.8 4.8

39% 54%

4% 3%

✓ ✓

WND

48 42 2005

25 1 3

Janusz Bia∏ecki

2.6 4.9 4.8 4.3

2.8 5.3 5.3 4.9

69% 22%

6% 3%

✓ ✓

✓ -

WND

29 29 1990

17 1 3

Kurt Iversen

2.9 4.4 5.6 5.8

3.7 6.5 7.1 7.0

33.3% 34.7%

6.3% 25.7%

✓ ✓

Corporate finance; controlling; investment advisory; valuations

Mi´dzynarodowe Targi Poznaƒskie; Agencja NieruchomoÊci Rolnych; Kopalnia W´gla Brunatnego “Konin”; Oponeo; WUPRIN˚; Wittchen; Chata Polska; PIECBIOGAZ; Totalizator Sportowy; Polskie Radio; Polskie Jad∏o; Cracow University of Economics

87 52 1989

23 35

Lidia Skud∏awska

2.7 4.3 3.1 WND

70% -

10% 20%

✓

✓ -

Virtual office services; start-up support; business planning and modeling; accounting services by using customers’ IT systems; payroll and HR services; IT services (Extranet and ERP application hosting); legal advice

WND

45 45 2006

40 WND WND

Monika MartynkiewiczFrank; Claus Frank; Roy Heynlein

Grupa Gumu∏ka - Audyt Sp. z o.o. ul. Jana Matejki 4, 40-077 Katowice 32 790-2294/32 201-1765 audyt@gumulka.pl, www.gumulka.pl

2.6 4.1 3.4 2.8

4.5 8.6 5.8 4.3

9% 39%

38% 14%

✓ ✓

FM Polska; PARP; MRR; GK ZARMEN; Evaluation; opinion polls; EU funds Tauron Wytwarzanie; Polish Chamber of acquisition for project development; Commerce; G∏ówny Instytut valuation expertise; NewConnect; Catalyst; Budownictwa; Agencja Rozwoju Warsaw Stock Exchange Przemys∏u; Warsaw City Hall; ZUS FRD; GK K´ty

70 70 2004

9 1 8

Rados∏aw Gumu∏ka

Korycka, Budziak & Audytorzy Sp. z o.o. ul. Solec 22, 00-410 Warsaw 22 522-2390/22 522-2391 kba@kba.com.pl, www.kba.com.pl

2.0 4.0 4.4 4.2

2.2 4.5 5.1 4.8

53% 37%

9% 1%

✓ ✓

Accounting advisory; due diligence

Jupiter NFI; Apator; PRI Pol - Aqua; Pekao Fundusz Kapita∏owy; Roto Frank; Uniwheels Production; Guhring

27 23 1992

10 3

Ewa Orkwiszewska

FK Partner Sp. z o.o. ul. Tagore’a 3, 02-647 Warsaw 22 242-8511/22 242-8510 warszawa@fk-partner.pl www.fk-partner.pl

1.5 3.8 7.3 5.4

2.6 5.9 7.3 6.9

61.1% -

0.6% 38.3%

✓ ✓

HR outsourcing; training; IT outsourcing; financial advice

BPH TFI; Miejskie Przedsi´biorstwo Taksówkowe; Lexmark Polska; Aptiv Solutions; Przedsi´biorstwo Miernictwa Górniczego; Grifols Polska

52 17 2002

19 WND WND

Krzysztof ¸ogiewa

Zespó∏ Us∏ug Finansowo-Ksi´gowych Bilans-Servis Sp. z o.o. Grupa Finans-Servis (8) ul. Zagnaƒska 84, 25-528 Kielce 41 368-6669/41 368-6070 audyt@bilans-servis.com.pl www.bilans-servis.com.pl

WND 2.6 2.5 2.5

WND 2.7 2.9 2.8

18% 61%

7% 14%

✓ ✓

Economic and financial case studies

Piekarnia Pod Telegrafem Roman Smolarski; Kopalnie i Zak∏ady Chemiczne Siarki Siarkopol; Przedsi´biorstwo Budownictwa Ogólnego Kartel; Grupa Polskie Sk∏ady Budowlane; Zak∏ady W∏ókien Chemicznych Stilon

52 23 1991

10 33

Andrzej Mucha

Mac Auditor Sp. z o.o. ul. Obrze˝na 5, 02-691 Warsaw 22 649-2765/22 649-2765 macauditor@macauditor.pl www.macauditor.pl

1.4 2.5 1.4 1.3

1.5 2.5 1.6 1.4

WND WND

✓ ✓

Verification of valuations

Idea TFI; Opoka TFI; Ipopema TFI; Noble Funds TFI

35 11 1993

10 5

Rados∏aw Âwiderski

MK CONSULTING Sp. z o.o., Sp.k. ul. Mariensztat 8, 00-302 Warsaw 22 538-9160/22 538-9161 mk@mkconsulting.pl www.mkconsulting.pl

0.9 1.8 1.5 1.3

100% -

✓

MSR/MSSF; controlling; outsourcing; shelf companies; accounting advice; HR and payroll; legal and customs services; liquidations; management reporting; accounting for EU projects

WND

23 21 2005

19 -

Monika Zaluska

Staniszewski & Richter Sp. z o.o. ul. Lwowska 10/21, 00-658 Warsaw 22 622-4198/22 621-2719 sr@auditors.pl, www.auditors.pl

0.7 1.5 1.4 1.3

1.1 1.8 2.1 1.9

32% 51%

10% 7%

✓ ✓

First Property Group; Ceraco Group; Polfrost; EZO; Richter Med

20 20 1993

2 2 2

Marzena Richter

Agencja Bieg∏ych Rewidentów Badex Sp. z o.o. ul. Reymonta 45, 45-072 Opole 77 454-5410/77 454-0898 badex@badex.com.pl www.badex.com.pl

1.4 1.3 1.6 1.6

1.5 1.4 1.7 1.6

WND WND

✓ ✓

WND

30 4 1992

1 26

Adam Karcher

TBR Kowalczyk Sp.j. ul. Indiri Gandhi 11, 02-776 Warsaw 22 647-2002/22 644-4346 tbr@tbr.pl, www.tbr.pl

0.5 0.9 0.8 0.7

100% -

✓

WND

APS; Magnolia Polska; AWT International Polska; Papilart

12 8 1997

6 -

Arkadiusz Kowalczyk

Optant Sp. z o.o. ul. Berezyƒska 39, 03-908 Warsaw 22 617-2233/22 616-2487 biuro@optant.com.pl www.optant.com.pl

0.4 0.8 0.8 0.8

99% -

✓

Fleishman Hillard; Vivarto; Fastpoland; Apli Polska; Navitor

8 8 2004

5 -

¸ukasz Kaliƒski

THOMAS Sp. z o.o. ul. Cicha 5, 00-353 Warsaw 22 862-8800/22 862-8810 thomas@thomas.pl www.thomas.pl

0.3 0.6 0.6 1.2

0.4 0.9 0.9 1.3

WND WND

✓

✓ ✓

WND

6 4 1993

3 -

Tomasz Wikliƒski

WND WND WND WND

80% -

Bookkeeping and tax compliance; statutory and international reporting; HR and payroll; fiscal representation; start-up support; business planning and modeling; corporate administration

British Telecom; Caterpillar; Gefco; Hutton Energy; Interserve; Toro; Turbomach; WizzAir

20 20 2007

18 1

Tomasz Tàkiel

20%

✓

AUXILIUM SA Al. Pokoju 84, 31-564 Kraków 12 425-8053/12 425-9147 auxilium@auxilium.com.pl www.auxilium.com.pl Moore Stephens Central Audit Sp. z o.o. ul. Sienna 82, 00-815 Warsaw 22 652-2183/22 323-6550 biuro@centralaudit.pl www.centralaudit.pl Baltic Accountants and Consultants Kurt Iversen Al. Wojska Polskiego 11, 01-524 Warsaw 22 869-0666/22 869-0660 contact.us@baac.com.pl www.baac.com.pl

Morison Finansista Audit Sp. z o.o. ul. G∏ówna 6, 61-005 Poznaƒ 61 654-4102/61 875-2950 biuro@morison.pl, www.morison.pl

getsix Sp. z o.o.(7) ul. Szwedzka 5, 55-040 Bielany Wroc∏awskie 71 388-1300/71 388-1310 office@getsix.pl, www.getsix.pl

Process Solutions Sp. z o.o. Al. Jerozolimskie 81, 02-001 Warsaw 22 695-0295/22 695-0299 info-pl@ps-bpo.com www.ps-bpo.com

Notes: NA = Not Applicable, NR = Not Ranked, WND = Would Not Disclose. Research for The List was conducted in October 2011. Number of employees is as of September 2011. All information pertains to the companies' activities in Poland. Companies not responding to our survey are not listed. Footnotes: (1) Financial year: July 1, 2008 - June 30, 2009; (2) Financial year: July 1, 2007 - June 30, 2008; (3) Financial year: July 1, 2010 June 30, 2011; (4) Financial year: July 1, 2009 - June 30, 2010; (5) Financial year: September 1, 2008 - August 31, 2009; (6) Financial year: September 1, 2007 - August 31, 2008; (7) Consolidated data of getsix Sp. z o.o. and getsix Poznaƒ Sp. z o.o.; (8) Financial year: July 1 - June 30

President

Director

President

Partners

President

Board Member

President

Managing Partner

President

Manager

To the best of WBJ ’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Corrections or additions to The List should be sent, on official letterhead, to Warsaw Business Journal, attn. Katarzyna Hernik, ul. Elblàska 15/17, 01-747 Warsaw, via fax to (+48) 22 639-8569, or via e-mail to wbjbol@wbj.pl. Copyright 2011, Valkea Media SA. The List may not be reprinted or reproduced in whole or in part without prior written permission of the publisher. Reprints are available.

MARKETS

www.wbj.pl

SEPTEMBER 17-23, 2012

Stocks report

world stock indices DJIA

NASDAQ

S&P500

FTSE100

DAX

Hope pays off

NIKKEI225

13,539.86 (Sep 13 close)

3,155.83 (Sep 13 close)

1,459.99 (Sep 13 close)

5,819.9 (Sep 13 close)

7,310.32 (Sep 13 close)

8,995.15 (Sep 13 close)

1.86% (for the week)

0.64% (for the week)

1.95% (for the week)

0.74% (for the week)

2.00% (for the week)

3.62% (for the week)

CHANGE: 9.22%

CHANGE: 19.15%

CHANGE: 14.32%

CHANGE: 2.11%

CHANGE: 20.32%

CHANGE: 5.08%

(year to Sep 13)

52-week high: 13539.86

52-week high: 3155.83

52-week high: 1459.99

52-week high: 5,989.10

52-week high: 7310.32

52-week high: 10,255.20

52-week low: 10,404.50

52-week low: 2,298.89

52-week low: 1,074.77

52-week low: 4,868.60

52-week low: 4965.80

52-week low: 8,560.11

Andrew Nawrocki WBJ market analyst Last week was yet another positive period for stock markets across Europe, with the Polish overall WIG and bluechip WIG20 indices seeing impressive gains. Hope once again paid off, with investors driving up indices two days before Germany’s Constitutional Court approved the euro zone’s new rescue fund. Stocks opened with a jump last Monday, despite not much data being released. Leading the WIG20 for the day were shares of TVN, closing over 9 percent higher after investment bank Goldman Sachs changed its bearish position towards the stock to a “neutral.” The WIG20 closed 0.78 percent higher. Similarly on Tuesday, stocks saw another bullish run, with shares of TVN (5.5 percent) once again dominating the WIG20. Unlike on

Major indices WIG

43,047.41 (September 13 close)

WIG20

2,353.51 (September 13 close)

13.09

12.09

11.09

10.09

07.09

06.09

05.09

04.09

03.09

31.08

30.08

29.08

28.08

13.09

12.09

11.09

10.09

07.09

06.09

05.09

04.09

03.09

2,200 31.08

40,000

30.08

2,240

29.08

40,800

28.08

2,280

27.08

41,600

24.08

2,320

23.08

42,400

22.08

2,360

21.08

43,200

20.08

2,400

17.08

44,000

27.08

52-week low: 2,035.80

24.08

Change year to September 13: 7.26%

23.08

52-week low: 36,549.47

22.08

52-week high: 2,414.62

Change year to September 13: 12.34%

21.08

Change for the week: 2.47%

20.08

52-week high: 43,047.41

17.08

Change for the week: 2.17%

Top 5 URSUS HYGIENKA SELENAFM WESTAISIC ADVGRUPA

Closing 2.55 1.17 6.90 0.55 13.29

% change (week) 52-week high 30.10 2.70 27.17 1.47 25.45 11.90 22.22 9.21 21.37 15.50

52-week low 0.66 0.76 5.05 0.42 7.10

Top 5 TVN GTC PKNORLEN KGHM GETIN

Closing 6.89 6.70 42.94 144.40 1.65

% change (week) 6.66 6.35 6.29 4.71 4.43

52-week high 15.98 12.75 43.56 174.20 9.03

52-week low 5.90 5.13 30.33 102.40 1.43

Bottom 5 IFCAPITAL HBPOLSKA RESBUD IGROUP PBG

Closing 0.96 0.03 9.10 0.21 3.98

% change (week) -41.82 -40.00 -33.09 -22.22 -22.11

52-week low 0.45 0.02 2.88 0.19 3.25

Bottom 5 PBG POLIMEXMS CEZ BRE TPSA

Closing 3.98 0.52 124.50 312.00 16.84

% change (week) -22.11 -7.14 -1.97 -1.89 -0.36

52-week high 94.65 2.09 141.50 321.00 18.56

52-week low 3.25 0.46 111.90 204.90 15.18

52-week high 14.97 1.47 70.00 0.86 94.65

Currency report

Markets rally on QE3

Other indices sWIG80

9,420.59 (September 13 close)

WIG-Banki

6,337.78 (September 13 close)

13.09

12.09

11.09

10.09

07.09

06.09

05.09

04.09

03.09

31.08

30.08

29.08

28.08

13.09

12.09

11.09

10.09

07.09

06.09

05.09

04.09

03.09

31.08

5,900

30.08

33.0

29.08

6,000 28.08

33.4

27.08

6,100

24.08

33.8

23.08

6,200

22.08

34.2

21.08

6,300

20.08

34.6

17.08

6,400

27.08

52-week low: 4,944.19

24.08

Change year to September 13: 14.33%

23.08

52-week low: 33.69

22.08

52-week high: 6,337.78

Change year to September 13: -16.73%

21.08

Change for the week: 2.00%

20.08

52-week high: 43.83

17.08

Change for the week: 0.14%

35.0

Adam Narczewski X-Trade Brokers DM SA

13.09

12.09

11.09

10.09

07.09

06.09

05.09

04.09

52-week low: 8,218.71

03.09

29.08

28.08

27.08

24.08

13.09

12.09

11.09

10.09

07.09

06.09

05.09

34.55 (September 13 close)

52-week high: 10,536.29

SOURCE: WSE

NewConnect

04.09

03.09

9,200 31.08

2,200

30.08

9,260

29.08

2,220

28.08

9,320

27.08

2,240

24.08

9,380

23.08

2,260

22.08

9,440

21.08

2,280

20.08

9,500

17.08

2,300

23.08

Change year to September 13: 9.49%

22.08

52-week low: 2,076.52

21.08

Change year to September 13: 4.11%

20.08

Change for the week: -0.02%

17.08

52-week high: 2,561.94

31.08

2,280.20 (September 13 close)

30.08

mWIG40 Change for the week: 1.99%

Monday, gains on the WIG20 only took off an hour before closing, with the blue-chip index gaining 0.75 percent. On Wednesday, after a choppy start, Polish stocks reacted to the crucial approval by Germany’s Constitutional Court rather disappointingly. After leading Europe in gains the day before, the WIG20 was only one of four indices to close in the red, shedding a quarter of a percent. Thursday saw all eyes turn to the US. Polish indices bounced back after their marginal losses on Wednesday after the Federal Reserve promised more monetary stimulus. The WIG20 gained 0.27 percent, with Ukrainian Kernel seeing the largest gains, up 3 percent. On Friday the WIG rose 2.42 percent while the WIG20 grew 2.71 percent. ●

Hot on the tail of the European Central Bank’s decision to buy bonds from troubled countries, the US Federal Reserve provided investors with another boost. It announced it will be buying back bonds worth $40 billion each month until the economic situation stabilizes. The announcement of the third round of quantitative easing (QE3) undertaken by the Fed boosted markets and risk aversion declined. The EUR/USD broke the $1.28 resistance level and rallied all the way to $1.31, its highest level since May. The move was strong and this week I would expect a corrective downward movement as traders will probably take some of their profits from the market, closing long positions. The z∏oty continued its

run from the previous week against the major currencies. The main impulse came from the Fed because internal data showed CPI inflation at 3.8 percent y/y. Inflation is not rising, while the economy is slowing down, all of which probably indicates that interest rates will be cut at some point this year. An interest rate cut has been more or less discounted by the market, and the euphoria on the market helped the z∏oty appreciate. The EUR/PLN rate fell to z∏.4.06 by the end of the week, while the USD/PLN dropped to z∏.3.10. The z∏oty has already gained 8 percent against the US dollar this year, making it the third-best performer in this category just after the Hungarian forint and the Chilean peso. ●

currency rates 4.1091

4.0681

4.0990

11.09

12.09

13.09

4.0037

4.1086 10.09

14.09

4.1277 07.09

0.1014

0.1009 14.09

4.0

SOURCE: NBP

PLN-100JPY

4.5

13.09

0.1012

0.1011 12.09

11.09

0.1014 10.09

14.09

13.09

12.09

07.09

0.1017

3.3379

3.3963

3.3749

3.4023 11.09

10.09

PLN-RUB

0.11

0.10

07.09

14.09

13.09

12.09

3.3971

3.4071 5.0421

5.1317

5.1033

5.2033

5.1421 11.09

10.09

PLN-CHF

3.5

3.0

07.09

3.1852

3.1131 14.09

5.0

5.1475

PLN-GBP

5.5

13.09

3.2098

3.1680 12.09

10.09

11.09

3.2578 3.0

07.09

4.0584 14.09

4.1146

3.2189

PLN-USD

3.5

13.09

4.0801 12.09

4.1085 11.09

10.09

4.1275 07.09

4.0

4.1141

PLN-EUR

4.5

SPORTS

SEPTEMBER 17-23, 2012

www.wbj.pl

Paralympics

Poland finishes ninth at London Paralympics “These Games have changed us all forever,” said International Paralympic Committee president Sir Philip Craven as he declared the 2012 Paralympics closed. “The thrilling achievements of the Paralympians have caused us to see them as role models, not victims. They have changed our lives,” The Daily Telegraph wrote in an GP editorial.

The spectacular closing ceremony of the Paralympic Games in London brought to an end not only the biggestever Paralympics, but also a sporting festival that started with the Olympic Games in August. Polish Paralympians arrived back home with an impressive haul of medals. The country took ninth place in the final medal count, with 36 in total, including 14 gold, 13 silver and 9 bronze medals – a performance that Poland got nowhere near to matching during the main Olympic event in London. Notable performers included Natalia Partyka, who retained her Paralympic title in the women’s table tennis singles Class 10 event, and Rafa∏ Wilk, who won two golds in cycling. China finished top of Natalia Partyka, one of Poland’s Paralympic gold medalists

SHUTTERSTOCK

the Paralympic medals table with 231 medals, including 95 golds. Russia was second and Great Britain third. The US, which topped the Olympics medals table, finished in sixth place with 98 medals. The 2012 Paralympics broke all manner of records, including number of athletes (4,200), tickets sold (2.7 million) and TV audience (around 4 billion people).

Robert Kubica is back racing

Motorsport

Kubica wins first race in long comeback trail “The aim remains to return to Formula One,” the Polish racing star said following his victory in a rally in Italy

SHUTTERSTOCK

Polish Paralympians picked up 36 medals, including 14 golds

Polish Formula One driver Robert Kubica says he is on track to make a return to F1 racing, following his victory in early September in the Ronde Gomitolo di Lana rally in Italy.

“Being here is already a good step, but I would have preferred to be somewhere else,” the 27-year-old told reporters after the race, referring to the Italian Grand Prix which took place on the same weekend. Mr Kubica sustained lifethreatening injuries in a horrific crash in Italy early last year, leading many to speculate that he would never again make a return to competitive racing, let

alone F1. “I have still got a long road to travel and will probably never be at the same physical level as before,” Mr Kubica said. “But I don’t intend to give up.” “The aim remains to return to Formula One and the next few months will tell me whether I can do it next year already or will have to wait until 2014,” he added. Gareth Price

LIFESTYLE

www.wbj.pl

Music festival

SEPTEMBER 17-23, 2012

Contemporary art

Crazy for Russian classics Young artists look to

reinterpret history

La Folle Journée de Varsovie / Crazy Days of Music 2012 – Russia Teatr Wielki Pl. Teatralny 1 September 28-30

COURTESY OF TEATR WIELKI

izers are aiming for, most of the concerts will last about an hour and will be held in several of the various halls of Warsaw’s Grand Theater – National Opera, as well as in a tent in the square in front of it. Ticket prices are low: z∏.5, z∏.7 and z∏.10. Musicians of worldwide renown – such as Abdel Rahman El Bacha, Alexander Kni-

Two contemporary art exhibitions worth checking out began earlier this month and will be open through late November at the Centre for Contemporary Art at Ujazdowski Castle in Warsaw. “Aurorite” is a collection of works by Agnieszka Polska, an artist who uses photography, animation, video and collage to

explore the thin line between memory and creation. Ms Polska takes newspapers, books and black-and-white photos as source materials, and uses them to show how the misconceptions that are produced from taking these artifacts out of context can lead to new understandings. Organizers of the exhibition say she is “less interested in what was actually archived, paying more attention to the things that have not been stored.” The works pose the question as to where historical documentation ends and artistic creation begins. Another exhibition – “Freedom Club” – takes its inspiration from a single set of histori-

cal events: the Unabomber case, which unfolded over a period of nearly 20 years in the United States. The artist, Radek Szlaga, explores the images and ideas that motivated Ted Kaczynski, a former child prodigy, to embark on a campaign of sending deadly bombs in the mail. The mass murderer signed the packages “FC,” which he later said stood for “Freedom Club.” Mr Szlaga’s paintings follow the trail of the Unabomber (and his Polish roots) in an attempt to make sense of this promising mind gone wrong. AK

For more information, log on to csw.art.pl.

azev, Andrei Korobeinikov, the Borodin Quartet and Giampiero Sobrino – will play, but so too will young musicians and the best ensembles from Polish schools, organizers say. The festival will also feature music education programs for children. Andrew Kureth

For more information, log on to szalonednimuzyki.pl

COURTESY OF CSW

Packing in some 60 concerts featuring over 950 musicians into three days, this year’s edition of “La Folle Journée de Varsovie” offers up plenty of opportunities to catch live classical music performances in an informal atmosphere. The event marks the third time La Folle Journée has been held in Poland. The festival – which aims to make classical music more accessible to those who find it stuffy and formal – began in France in 1995, and soon spread to countries such as Brazil, Japan, Portugal and Spain. After the festival in Poland concentrated on Chopin in 2010 and “the Titans” (Brahms, Mahler, Liszt, Strauss and Szymanowski) in 2011, this year’s edition will be devoted to classical music from Russia. Performances will include pieces by composers such as Prokofiev, Rachmaninov, Rimsky-Korsakov, Shostakovich, Stravinsky and Tchaikovsky, among others. To achieve the accessibility and informality that the organ-

Agnieszka Polska “Aurorite” to November 25, 2012; Radek Szlaga “Freedom Club” to November 18, 2012 CSW – Centre for Contemporary Art ul. Jazdów 2 Warsaw

Robert Szlaga’s work was inspired by the Unabomber case

Museums, galleries and venues in Warsaw Centre for Contemporary Art at Ujazdowski Castle ul. Jazdów 2 www.csw.art.pl Czarna Gallery ul. Marsza∏kowska 4 www.czarnagaleria.art.pl Galeria 022, DAP, Lufcik ul. Mazowiecka 11a www.owzpap.pl Galeria 65 ul. Bema 65 www.galeria65.com Galeria Appendix 2 ul. Bia∏ostocka 9 www.appendix2.com Galeria Asymetria ul. Nowogrodzka 18a www.asymetria.eu Galeria Foksal ul. Foksal 1-4 www.galeriafoksal.pl Galeria Milano Rondo Waszyngtona 2A www.milano.arts.pl Galeria Schody ul. Nowy Âwiat 39 www.galeriaschody.pl

Green Gallery ul. Krzywe Ko∏o 2/4 www.greengallery.pl

Simonis Gallery ul. Burakowska 9 www.simonisgallery.com

Katarzyna Napiórkowska Art Gallery ul. Âwi´tokrzyska 32, ul. Krakowskie PrzedmieÊcie 42/44 and Old Town Square 19/21 www.napiorkowska.pl

State Archaeological Museum in Warsaw ul. D∏uga 52 www.pma.pl

Królikarnia National Gallery ul. Pu∏awska 113a www.krolikarnia.mnw.art.pl Le Guern Gallery ul. Widok 8, www.leguern.pl Museum of Independence Aleja SolidarnoÊci 62 www.muzeumniepodleglosci.art.pl National Museum in Warsaw Al. Jerozolimskie 3 www.mnw.art.pl Polish National Opera at Teatr Wielki Pl. Teatralny 1 www.teatrwielki.pl Pracownia Galeria ul. Emilii Plater 14 www.pracowniagaleria.pl

State Ethnographic Museum ul. Kredytowa 1 www.ethnomuseum.website.pl Historical Museum of Warsaw Old Town Square 28-42 www.mhw.pl History Meeting House of Warsaw ul. Karowa 20 www.dsh.waw.pl Warsaw Philharmonic ul. Jasna 5 www.filharmonia.pl Warsaw Rising Museum ul. Grzybowska 79 www.1944.pl

Galeria XX1 Al. Jana Paw∏a II 36 www.galeriaxx1.pl

Rempex Art and Auction House ul. Karowa 31 www.rempex.com.pl

Wilanów Palace Museum and Wilanów Poster Museum ul. St Kostki Potockiego 10/16 www.milanow-palac.pl www.postermuseum.pl

Galeria Zoya ul. Kopernika 32 m.8 www.zoya.art.pl

Royal Castle Pl. Zamkowy 4 www.zamek-krolewski.com.pl

Zachęta National Art Gallery Pl. Ma∏achowskiego 3 www.zacheta.art.pl

LAST WORD

SEPTEMBER 17-23, 2012

www.wbj.pl

Tech Eye

So it’s official – the iPhone 5 is everything we expected and more. Or less, actually. But less in a good way. Mostly. First things first. As anticipated, Apple’s latest smartphone comes equipped with a four-inch display, up from the traditional 3.5-inches of the past. It’s a Retina display, of the same eye-popping variety introduced last year with the third-generation iPad, with 326 pixels per inch. That’s not the highest PPI count on the market (indeed, it’s no change from the iPhone 4S), but it offers stunning quality and is more than good enough to watch HD films or play graphicsheavy games. To power the Retina display there’s a new chip inside the iPhone 5 – called the “A6” – and Apple is promising CPU and graphics performance that’s twice as fast as that of last generation’s A5 chip. Indeed, the graphics look fantastic, but with a faster chip you have to wonder about battery performance, right? Well, Apple hasn’t talked this up too much, except to say that the iPhone 5 will have better battery life than the 4S. That’s due to power-saving functions on the A6 chip, apparently. “Ultra-fast wireless” was another talking point, but of course this

depends in part on your mobile network provider. Still, LTE-support has been added, so if your carrier has a proper 4G network then you’ll finally be able to take full advantage of it with an iPhone. Then there’s the new 8-megapixel, rear-facing iSight camera, which sounds a lot like the old 8-megapixel, rear-facing iSight camera last seen in the 4S, but is in fact not the same. This version is 25-percent smaller, apparently, with a extra-durable sapphire crystal lens. What else, what else ... oh right. As expected, Apple is ditching two of its older technologies – the execrable 30pin dock connector and the oftmaligned earbuds. The former is being replaced by an all-digital connector that’s 80 percent smaller. And, because Apple is never content without a flashy name for its proprietary technologies, the new connector has been dubbed “Lightning.” That’s probably because it’s fast, but we’d recommend keeping your dock connector indoors during storms. Just in case. For their part, Apple’s earbuds have gotten a much-needed upgrade, though the fact that they’re officially called “EarPods” is a bit twee for Techeye’s tastes. Also, the “beam-

forming” microphone system sounds vaguely ominous. On the plus side, they pack noise-canceling technology that will come in very handy, making it that much easier to ignore boring colleagues, hungry offspring, needy spouses or crazy, ranting bus passengers. Probably the most eyebrow-raising aspect of the iPhone 5 is the fact that all of the performance upgrades have been accompanied by a significant slimming of the whole phone. The device is 0.3 inches (7.6 mm) wide and weighs 0.25 lbs (112 g), making it 18 percent thinner and 20 percent lighter than the 4S. In fact, in what is obviously a cynical attempt to entice supermodels, Apple is calling this the “world’s thinnest smartphone.” So that’s the iPhone 5, available starting September 21. It’s not a revolution. It’s not eye-wateringly innovative. Instead it’s a refinement on Apple’s existing formula for success. It’s lighter, skinnier, more powerful and, um, display-ier than its predecessor. And, judging by the pomp with which it was introduced, the iPhone 5 is packing 25 percent more hubris than any other phone on the market. ●

COURTESY OF APPLE

The iPhone 5: stronger, thinner and rather familiar

Ever cynically attempted to entice a supermodel? Let us know: techeye.wbj@gmail.com