Contact Magazine 01.2011 - British Polish Chamber of Commerce

International Business Voice
ISSN 1425-1779
NO. 1 • 2011 | (96)
the magazine of the British
Polish Chamber of Commerce
art
bank
stock exchange
gold
currencies
real estate
the best investments in 2011
alan jarman
BPCC’s new chairman talks to Michael Dembinski
about how he sees the opportunities in Poland and
how he plans to develop the BPCC.
graphology
Practice shows that graphology assessments,
by advising the strengths and weaknesses of
prospective candidates, give the most effective
support to recruitment processes.
winter sports
This winter season, enthusiasts of winter sports,
powdery snow and breathtaking speed are heading
for Spain, Argentina and Chile.

AGENCJA
MIENIA WOJSKOWEGO
ATTRACTIVE FORMER MILITARY
REAL ESTATE THROUGHOUT
THE COUNTRY
• building plots • leisure centers • warehouses
Hel, Przybyszewskiego St.
Kraków, Rakowicka St.
Location: Hel, north Poland
Voivodeship: pomorskie
Area: 5.8232 ha
Real estate category: residential development
Location: Kraków, south Poland, 10 min. to the Old Town
Voivodeship: małopolskie
Area: 0.9580 ha
Real estate category: services, residential development
Poznań, Bukowska St.
Nowy Dwór Mazowiecki, Modlin Fortress
Location: Poznań, west Poland, near airport Ławica
Voivodeship: wielkopolskie
Area: 10.5898 ha
Real estate category: trade, service
Location: Near Warsaw, central Poland, near
aiport Modlin
Voivodeship: mazowieckie. Area: 55.0233 ha
Real estate category: recreational property
www.amw.com.pl

Editorial 3
International Business Voice
Honorary President (PL)
Ric Todd
H.M. Ambassador
Honorary President (UK)
Barbara Krystyna
Tuge-Erecińska
it’s a good time
to invest
DOROTA
GOLISZEWSKA
BPCC HEAD OFFICE IN UK
British Polish Chamber of Commerce
43-45 Portman Square
London W1H 6HN
Tel: +44 (0) 207 969 2789
Fax:+44 (0) 207 969 2800
BPCC IN POLAND
ul. Fabryczna 16/22, 00-446 Warszawa
Tel: +48 22 320 01 00
Fax: +48 22 621 19 37
www.bpcc.org.pl
e-mail: name.surname@bpcc.org.pl
Martin Oxley, chief executive officer
Paweł Siwecki, operations director
Michael Dembiński, head of policy
Ewa Świętochowska, membership manager
Dorota Kierbiedź-Jaskólska,
portal and e-commerce manager
Tessa Sujka-McIver, events manager
Sławka Kroszczyńska, administration manager
Marta Mikliszańska, project manager Policy Groups
Izabela Niewińska, events executive
Maria Kowalewska, membership executive
Krzysztof Litwiniec, membership executive
Kuba Piegat, media assistant
Gabriela Jatkowska, policy group assistant
Regional Offices in Poland & the UK:
UK: Michael Clay, vice chairman michael.clay@bpcc.org.pl
Katowice: Witold Turant, regional director, katowice@bpcc.org.pl
Kraków: Agnieszka Libura, regional director, krakow@bpcc.org.pl
Łódź: Piotr Grabowicz, honorary chairman, lodz@bpcc.org.pl
Wrocław/Poznń: Ilona Chodorowska, regional director, wroclaw@bpcc.org.pl
employer: British Polish Chamber of Commerce
publisher: Concept Publishing Polska sp. z o.o.,
al. J.Ch. Szucha 8, 00-580 Warszawa
tel.: +48 22 627 26 60, faks: +48 22 627 26 71,
biuro@cppolska.com.pl, www.cppolska.com.pl;
Account Manager: Sebastian Lizakowski
editorial office:
Editor in Chief: Dorota Goliszewska; editor@bpcc.org.pl
Editorial Director: Marzena Mróz;
Proof-reading: Małgorzata Mierżyńska;
Layout design: Łukasz Szczepanowski; DTP: Piotr Żak;
Photoeditor: Joanna Potępska; Advertising Director:
Małgorzata Solarczyk; Advertising: Anna Kurowska,
Katarzyna Kościuszko; Printing House: Regis Print
The best investments in 2011. This is the
headline of our extensive, special report
published in the Hot Topic section. Contrary
to your expectations, the report will not give
you any suggestions, hints and tips or recommendations
about how to invest your money
to generate the highest possible return. The
financial crisis that began two years ago with
the collapse of the Lehman Brothers bank
effectively calmed down investors, analysts
and journalists, showing that nothing is what
it seems to be and that all kinds of forecasts
should be approached with great caution.
And, most importantly, that they should be
considered as only one of the possibilities.
And also that you should always be guided by
common sense, intuition and skepticism.
You need to save money. It’s a cliche, but
we’ve recently been reminded of it by, even if
only, the government plans to make changes
to the retirement pension system. It’s more
than certain that without your personal
prudence and foresight, without investment
decisions made as soon as today, your life on
BPCC PATRONS:
retirement may not be one of affluence. But
it’s not only about such distant things as your
retirement. Let’s save money then! Contact’s
special report describes a range of possibilities
to make your money work for you: from
secure term deposits, to today’s sure things
such as real estate or gold, to investing in
currencies and securities (which requires a
knowledge of the rules of the game and of
the market), to investments in works of art.
It’s good to remember that the return of
optimism among investors after the lean years
has resulted in investment funds rebuilding
their assets, and that structured products are
still very popular – it’s true that they offer
moderate returns, but they offer capital protection.
Your choice will depend on whether
you prefer secure investments or are ready to
accept a higher-than-standard risk.
The macroeconomic forecasts for Poland
for the next few years are optimistic. Our
economy is expected to grow at the pace of
almost 4 percent or even higher. It’s a good
time to invest.

4
contents
People
6
Events
8
Companies
10
Alan Jarman,
BPCC’s new chairman: View of the
Polish market.
BPCC members’ careers: promotions,
new responsibilities.
An overview of events
organised by BPCC, including BPCC
Head Strat 2011, Grand Business
Networking, International Christmas
Evening in Wrocław and The
Renewable Energy Conference
Market analyses
and special reports
by BPCC members. HSBC’s report
“The World in 2050” and the PwC’s
Annual Global CEO Survey
Hot topic
12 - 31
The best investments in 2011
Contact’s special report describes a range of possibilities to make
your money work for you: from secure term deposits, to today’s
sure things such as real estate or gold, to investing in currencies
and securities (which requires a knowledge of the rules of the
game and of the market), to investments in works of art.
new tools
32
news from...
34
After hours
40
Graphology
as the most effective support to
recruitment processes
the British Embassy
The Polish Embassy
Too big to fail
Winter sports
This Winter season the enthusiasts
of Winter sports are heading for
Spain, Argentina and Chile.
Fot: Shutterstock.com, Getty Iamges/FPM

WYG International
creative minds safe hands
Engineering
Environment
International Development
Management Services
Planning & Design
WYG in Poland
tel: +48 22 492 71 00
fax +48 22 492 71 13
ul. Marynarska 15
02-674 Warszawa
www.wyginternational.pl
Transport Planning
www.wyginternational.pl
creative minds safe hands

6
people
L
ooking at Poland, one has
to be aware of the size,
attractiveness and opportiunities
of the market
in the near and long term.
With GDP growth double that
of the EU average, and the size
of total GDP making Poland
the world’s 21st largest economy
(which, for example, is double the
size of Hong Kong), it is a market
that can’t be ignored.
“Trade flows are also impressive
when viewed on the world stage,
ranked as the 26th largest economy
for inbound and outbound trade,
and with Poland also being ranked
by AT Kearney as the 6th most
favourable destination for foreign
direct investment, it is easy to see
why Poland should be billed as the
EU’s leading emerging economy.
“The economy is also more open
today than ever before, with nearly
10% of imports arriving from
China, coupled with 25% of its
imports and exports crossing the
border into Germany.
“So the economic picture is both
strong and very encouraging.
Added to this is the stability of the
macro picture, which is sometimes
lacking in developing economies.
With a stable political and legal system, strong
professional services and the benefits of being
under the EU’s umbrella, the overall picture is
very compelling,” says Mr Jarman.
In terms of British business, it is the mediumsized
firms that need to take a closer look at
Poland. “Multinationals are here in abundance,”
he says, – “but there exist plenty of opportunities
for mid-cap companies in the Polish market.
Sectors such as renewable energy stand out. The
good news is that the business agenda’s of the
Polish and UK government are aligned. In the
UK, it is the private sector that will stimulate
economic growth. In Poland, the privatisation
agenda will offer new business opportunities.”
But it’s not a market for quick profits. “British
businesses should look at Poland from a
longer-term aspect – they should seek to gain
an understanding of a market that’s not as
familiar from the point of view of culture as,
say Commonwealth countries; however, my
alan jarman,
bpcc’s new chairman
view of
the polish
market
The BPCC’s new chairman,
as of January the 1 st 2011, is
Alan Jarman, CEO, HSBC BANK
Polska S.A. He talks to Michael
Dembinski about how he sees the
opportunities in Poland unfolding,
HSBC’s view of the Polish market,
and how he plans to develop the
BPCC in his role as chairman
overriding message is the size of the prize –
worthy of investment in time and energy to
understand and then enter the market,” says
Mr Jarman.
HSBC has been in Poland for nearly 20 years.
Today, its goal is to become the leading international
bank for corporates and the leading
bank in the premium segment for individuals.
“We are excited about Poland’s
size, demographics and connectivity
to other markets which makes
Poland one of HSBC’s top European
strategic markets . We will be
looking to deliver market-leading
propositions for our customers,
learning from our experience in
other markets, and delivering
seemless cross border banking,”
he says.
Looking at how Mr Jarman will
make the Chamber more effective,
he says that there is “plenty to shout
about in terms of business opportunities
that Poland can bring to
UK business”. He stresses the need
for cooperation at government and
industry levels – working together
with the UK chambers network,
the Federation of Small Businesses,
Institute of Directors and CBI to
raise awareness of Poland among
their members.
“Another valuable partner is the
UKTI”, he says; “The appointment
of Stephen Green, the former chairman
of HSBC, as the new minister
for trade and investment, shows seriousness
of intent and global outlook
of the UK. UKTI can’t and indeed
shouldn’t do its job on its own – it
must work in partnership with the
private sector – here in Poland the BPCC and
its members work very closely with the British
Embassy and the UKTI team there.”
Where will Mr Jarman place priority on in
terms of the development of the Chamber?
“This is a time to renew the aims of the chamber,
engage with the members and stakeholders
to deliver them, and therefore ensure we
continue to progress. We’ve been listening to
what our members want and need, and intend
to improve our delivery against this.
“We’ll be extending the scope of the policy
groups; improving the Chamber’s regional presence
across Poland and the UK; communicating
more effectively with members and stakeholders
both online and in print; and finally ensuring
our events calendar delivers real value. Finally,
making sure that this is our Chamber, with
everyone feeling engaged in its agenda and
progress, and something we can all be rightly
proud of,” he says.

people 7
piotr
rusinek
On January the 3rd 2011 Piotr
Rusinek has joined EC Harris as
Deputy Leader in our Lenders
and Investors department.
EC harris
new Deputy leader
Douglas
changes in the managament board
Agnieszka
Mosurek-Zava
Douglas, the biggest perfumery chain in
Poland and owner of the first authorized
e-shop, announces changes in its management
board. Agnieszka Mosurek-Zava, member of
sławomir sołkiewicz
In the end of January 2011 Sławomir
Sołkiewicz, hitherto Director of the
Leading Factory of Imperial Tobacco
Polska, was promoted to the post of
Operations Director Central Europe
& USA.
Piotr is a Chartered Quantity Surveyor
and has a BSC (Hons) in Quantity Surveying.
He started his business career as
a quantity surveyor in the UK and since
moving to Poland fourteen years ago he
has been one of the leading professionals
in his field. Before joining EC Harris
Piotr held the position of Project Director
being responsible for the management
and development of cost management and
transactional services.
the Management Board, was nominated GM
Douglas Poland and Regional Director Poland,
Czech Republic, Latvia and Lithuania.
Agnieszka Mosurek-Zava has been working
for Douglas since 2001, the start of Douglas
operations in Poland. She was in charge of the
key business areas - new perfumeries, business
development, sales, marketing and purchase.
Under her supervision Douglas has built
its leader position on the Polish perfumery
market. This was further confirmed by the
opening of Douglas House of Beauty, the
biggest perfumery in Poland (1200 sqm) in
Waraw’s Arkadia.
imperial tobacco polska
New Operations Director
Central Europe & USA
Sławomir Sołkiewicz began his work at
Imperial Tobacco (previously Reemtsma) in
1994 as an intern in the tobacco purchasing
department. He was subsequently responsible
for managing the following areas: tobacco
purchasing, product development and quality
management. Promoted to the post of Production
Director at Imperial Tobacco Polska S.A.
he was responsible for numerous projects,
including the implementation of an integrated
management system consistent with ISO 9001,
ISO14001, HACCP.
DTZ
new marketing
director
robert borowicz
At the beginning of the year, Robert
Borowicz was appointed as new Marketing
and PR Manager of DTZ in Poland.
Robert replaced Maksymilian Pawłowski on
this position who left the company after almost
4 years. Robert is responsible for corporate
communication, internal communication and
marketing. Robert Borowicz graduated from
the faculty of Journalism and Political Science at
Warsaw University. His specialization is Public
Relations and Media Marketing. He has also
studied at George Brown College in Toronto.
the best
object manager 2010
wojciech liszka
Director of Sales and
Marketing in the Radisson
Blu Hotel Krakow
has been appreciated
by the readers of MICE
Poland, as the best
Object Manager 2010.
The MICE Poland Personality of the Year is an
award for people in the MICE industry granted
by the industry representatives. People of
outstanding professionalism and efficiency were
appreciated for the third time in Poland. In the
“Object Manager” category in which Wojciech
Liszka was the winner, the jury has set store by
paying particular attention to ethics in action,
contribution to the meetings industry, CSR
initiatives, innovation and creativity, and above
all – quality of the managed object.

8
events
Krakow:
BPCC Head
Start 2011
The Whisky
tasting Tour
of Scotland
20th January 2011 saw one of the best events BPCC Krakow has staged in
recent times – “BPCC Head Start 2011” a great evening of networking and
business.
The event attracted nearly 300 participants and
was organized in the brand new Hilton Hotel
in Krakow. 2011 will be a great year for British
Polish business. This was confirmed by Martin
Oxley, CEO BPCC and the participating
audience. A superb musical interlude from the
British International School in Krakow was followed
by a buffet and informal networking.
The evening concluded with a marathon lottery
wonderfully led by BPCC Board Director Joe
Smoczynski and Agnieszka Libura, BPCC
Director in Krakow. The evening took place
thanks to our kind Corporate sponsors Porsche,
Roncato, Hilton International and Mazars.
If you are interested in expanding your business
in Malopolska please do not hesitate to get in
touch with either Martin Oxley, CEO BPCC
or Agnieszka Libura, Director BPCC Krakow..
You may find some pictures – in the link:
http://www.mga.webd.pl/MGA/bm/
On January the 13th more than 50
senior managers and representatives
of Polish and international
companies took part in the Scottish
Evening, a popular annual event
organised in Łódź.
Hosted by the Lodz Special Economic Zone
and BPCC, the Scottish Evening took place
amidst the beautiful architecture of the Scheibler
Palace, part of which has been adapted for the
Museum of Cinematography, with a interesting
selection of movie art exhibits. The main attraction
of the evening was a presentation of a spe-
INTERNATIONAL
CHRISTMAS
EVENING
IN WROCLAW
As it has already become a tradition, The
International Christmas Evening in Wroclaw
was co-organised by 5 international chambers
of commerce: the American Chamber of Commerce
in Poland, the British-Polish Chamber of
Commerce, the French Chamber of Commerce
and Industry in Poland, the Polish-German
Chamber of Industry and Commerce and the
Scandinavian-Polish Chamber of Commerce.
The event took place on December 8th in
Wroclaw’s Puppet Theatre. Dim candle lights of
glittering Christmas trees and the overwhelming
fragrance of fresh spruces created a unique and
unforgettable atmosphere. The first part of the
artistic programme was devoted to international
traditions. A choir of international children
from the British International School of Cracow
dressed in their national attires, sung carols
from all over the world. This was followed by a
performance of international Christmas carols
by Wroclaw’s most famous gospel band – the
Spirituals Singers Band. The rest of the evening
continued alongside modern tones of various
Christmas melodies from all over the world
as well as delicious Polish Christmas cuisine.
During the cocktail a fortune teller was available
to reveal what the future held in store for those
brave enough to ask. The highlight of the event
was the Grand Prize Lottery Draw with its valuable
prizes.
Our special thanks go to Platinum sponsors: KPMG
and ENEL-MED CENTRUM MEDYCZNE; to Golden
sponsors: ING and VOLVO; to Silver Sponsors: EURO
PARK LOGISTICS and SKALSKI; to Bronze sponsors:
ALMA CONSULTING GROUP, QNH, KAUFLAND,
DOTPAY and SÜDZUCKER; to Product sponsors: BISC
WROCŁAW, FAGOR MASTERCOOK, MG NETWORK, PM
GROUP, XPRESS, BUKIETY BARANOWSKA, CADBURY,
COCA-COLA, LAMBERTZ, ADORIA and STARBUCKS
COFFEE; to Lottery sponsors: FAGOR MASTERCOOK,
XPRESS, TRINITY CORPORATE SERVICES, Q4NET,
SCANDIC WROCŁAW, BISSOLE BUSINESS TRAVEL, ING,
GRAFTON RECRUITMENT, BUKIETY BARANOWSKA,
HERTZ, RABEN, HOTEL MONOPOL WROCŁAW, KELHAM
GROUP, CPL JOBS, WROCŁAWSKI PARK WODNY, ENEL-
MED CENTRUM MEDYCZNE, STEELCASE, SAMSUNG,
SONY ERICSSON and last but not least the Main
Media Partner - WARSAW BUSINESS JOURNAL.

events 9
The renewable
Energy
Conference
Marek Cieślak, Deputy Mayor of Łódź,
Martin Oxley, CEO BPCC
cially chosen selection of five Malt Whiskies, accompanied
by haggis, the world-famous Scottish
delicacy (akin to Polish kaszanka). The Whisky
Tasting Tour of Scotland was expertly presented
with passion and expressiveness by Martyn
O’Reilly, president of the Caledonian Society
of Warsaw. Guests also had the opportunity to
exchange opinions and business cards during
the subsequent business mixer, accompanied by
the strains of bagpipers from the Czestochowa
Bagpipes Band.
The British Polish Chamber of Commerce in the
UK organised ‘ The Renewable Energy Conference’
at the Radisson Blue Hotel in Portman
Square on the 26th January 2011 together with
the Conservative Friends of Poland.
Many attended the conference and the Minister
of Energy and Climate Change - Mr. Charles
Hendry was to speak at the event. Unfortunately,
due to urgent Government business, he was unable
to do so and Teresa Potocka of the Conservative
Friends of Poland gave an overview of the
state of gave an overview of the state of the UK
renewable energy scene. The participants said
afterwards that they were captivated by the quality
of the speakers and enthralled with the latest
developments in this field. Particular note was
taken of the Vertical Wind Turbine presented by
Michael Clay and a HUGE number of enquiries
placed with the Bio Fuel Speakers John Dickinson
and Peter O’Hara for the only truly GREEN
Fuel in the world as confirmed by Offgem and
currently being used by the Royal Family in the
UK. There was an overview of the Renewable
energy situation in Poland by Michael Clay
BPCC Vice Chairman, and a presentation by
Chris Dodson of Torftech on Bio Mass plants.
Dr. Andrew Blatiak spoke about Photo Voltaic
and Stephen Hubble made a speech about Waste
to Energy and the first of their projects in Lower
Silesia. The last presentation was done by Robert
Windmill of the Law firm Windmill Gasieweski
Roman which is based in Warsaw.
Grand Business
Networking
The very first Grand Networking for
Business was held on the 10th of
February at Nowa La Boheme Restaurant
and opened a series of events
for senior management.
Business Breakfast
social housing
The provision of social housing
was the subject of a special
PPP-focused breakfast on 27th
January in the InterContinetal
Hotel in Warsaw.
The deputy mayors of Katowice (Mr.
Marcin Krupa) and Łódź (Mr. Paweł Paczkowski),
and Warsaw’s head of housing
(Mr. Marek Goluch and Mr. Włodzimierz
Ejchorszt) were the special guests. The
deputy mayors began by outlining the
situations in their cities. In each case, social
housing is required for those families who
are evicted from properties belonging to
the municipality (usually for not paying
the rent). Social problems (long-term unemployment,
alcohol or drug abuse) often
accompany these families. The cities’ needs
for such housing in each case amount to
several hundred units. BPCC members
A4E (Katarzyna Jaszczuk, Development
Manager), Reed in Partnership (Robert
Zamarlik, Recruitment Manager), Saritor
(Marcin Osowski, Commercial Director)
and Hogan Lovells (Sławomir Mikołajuk,
Attorney) explained how they see the
issue. A vigorous question and answer session
followed.
The venue, situated in the Opera, was an inspiration
for our guests to wear carnival masks - all
the guests who went the extra mile were awarded
prizes sponsored by Douglas, Imola Gokarty
& More, and Tagomago. The event was an opportunity
to meet delegates from 2 British trade
missions which were in Warsaw and representatives
from Łódzka Agencja Rozwoju Regionalnego
- our Partner for the evening.
The restaurant filled in very quickly with Members
swapping business cards and enjoying its
ambient interiors over a glass of sparkling wine.
The lottery prize draw was full of amazing prizes
sponsored by AMS Grzebieluch, Le Meridien
Bristol, InterContinetal Warsaw, Mamaison Le
Regina, Marriott hotel, Bryza Resort &SPA, and
Mercure Mrągowia. Congratulations to all lucky
winners!

10
companies
forty years
from now
HSBC has published a fascinating report
entitled The World in 2050 - Quantifying
the shift in the global economy.
It takes a look at the 19 emerging
economies - including that of Poland
- and charts their rapid rise against 11
countries of today’s rich world.
Looking at GDP per capita, Poland’s is expected
to carry on cantering ahead at an annual growth
rate of between 3.7% and 4.0%, slowing down
fractionally in each successive decade. The UK’s
growth will be much slower, but it is expected to
accelerate while Poland’s slows (1.4% to 2.0%).
The upshot of this is that by 2050, UK GDP
per capita is expected to be $69,000 (up from
$35,000 last year), while in Poland it should
be $51,000 (up from $11,000). Eventhough
Poland’s GDP per capita is currently three times
lower than the UK’s, in 40 years time it will only
be a quarter less.
No overtaking of the UK, then; but solid performance
is expected nevertheless from Poland’s
economy. But could Poland do better? Factors
that are seen by the HSBC researchers as crucial
include demographics. The UK’s working
population is expected to grow, albeit at a very
slow rate (0.1% to 0.3% a year over the next 40
years). However Poland’s working population
is expected to shrink- and at an alarming rate -
from 27 million to less than 19 million. (One
growth
Vivendi’s EUR 2 billion dispute over PTC
December 15th , 2010 finally brought
an end to the EUR 2 billion plus and the
11 year long dispute over control of PTC
(Era), a leading Polish telecom company,
involving, among others, Vivendi,
Deutsche Telekom, Elektrim and the
Polish State Treasury. The signing of the
settlement papers took place on January
14th , 2011, just after Elektrim’s exit
from bankruptcy
reason behind Poland’s impressive catching-up
with the UK in terms of GDP per capita is that
there will be fewer Poles to share the wealth.)
Poland’s policy-makers will need to devise an
immigration strategy that will be able to fill the
employers’ future need for a qualified workforce
while at the same time squaring with the demands
of Poland’s membership of the Schengen
group of countries. A pro-family policy of tax
incentives also seems to be required if, by 2050,
large numbers of Polish pensioners can be paid
for by a shrinking workforce.
It is worrying to note that only Japan’s population
is expected to shrink faster than Poland’s.
Education is another factor. If Poles were to
increase the number of years of schooling attended,
the Polish economy could move faster
up the value-added ladder, with more jobs in
R&D, high-tech industries, life sciences and IT,
and thus accelerate GDP growth.
Salans, as Vivendi’s counsel, conducted and
hosted the negotiations and the signing. The
team was led by Tomasz Dąbrowski, Warsaw
Managing Partner, with sterling support
provided by Anna Maria Pukszto, partner
and head of Warsaw Insolvency, and over 15
lawyers from the Corporate, RRI and Tax
teams. The final stage of the negotiations
involved over 20 law firms in 5 jurisdictions,
including Orrick, Hengeler Mueller,
Bingham McCutchen, Clifford Chance,
Slaughter and May, and major Polish law
confidENCE
Two years removed from the depths
of recession, CEOs’ confidence in
future growth has returned to nearly
pre-crisis levels, according to PwC’s
14th Annual Global CEO Survey –
“Growth re-imagined”.
In the worldwide poll of 1,201 CEOs, 48% said
they were “very confident” of growth in the
next 12 months. That’s a major shift from the
31% last year who were “very confident” last
year and approaches the 50% reached in 2008
before the onslaught of the economic crisis. The
PwC survey results were released at the World
Economic Forum annual meeting in Davos. In
total, 88% of CEOs said they now have some
level of confidence in the prospects of the next
12 months, up from 81% last year. In Poland
as many as 94% of CEOs surveyed by
PwC declared so as well.. Longer
term, 94% now are confident of
growth three years from now,
an increase of two percentage
points. With regard
to the three-year perspective,
optimism of CEOs
in Poland also increased and
amounts now to 96% (3/4 of them
being “strongly convinced” CEOs).
Renewed confidence was spread
across all continents, with CEOs
firms. Briefly, at closing Vivendi received
EUR 1.25 billion and withdrew all claims
for PTC, Deutsche Telekom group became
the sole owner of PTC - paying Vivendi
and Elektrim EUR 1.4 billion for it. And
finally, Elektrim paid off its creditors, the
Polish State Treasury and the bondholders
in particular.
The Salans Litigation & Arbitration team,
led by Wojciech Kozłowski and including
Katarzyna Bilewska and Patrick Radzimierski
among others, conducted wide-ranging litiga-

e-imagined provident’s
round table
RESTORED?
companies 11
More results: www.pwc.com/ceosurvey
in India, Austria, Colombia, Peru, China, Thailand
and Paraguay particularly upbeat about
near term growth. Regionally, CEOs in Western
Europe were the least confident. German CEOs
were an exception, with nearly 80% of CEOs
“very confident,” up from about 20% last year.
Strategically, the best opportunities for growth
Provident as the first financial institution
conducts social dialogue
in the next 12 months will come from the
with the company’s environment.
development of new products and services and
Round table was organized in the
fourth quarter of 2010.
from increasing share in existing markets, both
cited by 29% of CEOs, and by penetration of
new markets, 17%. Mergers and acquisitions,
joint ventures and alliances trailed as growth
strategies. In Poland the shift is not as clearly
visible as it is globally - 31% of CEOs want
to focus on the development of new products
and services, while 37% on increasing
shares in existing markets. “CEOs have
emerged from the bunker mentality
of surviving the recession. They
now see renewed opportunity
for growth, even in
the near term, and are
determined to take advantage
of better global
economic conditions
and increased customer
demands,” said Dennis
M. Nally, Chairman of
PwC International..
shares is over
tion related to the dispute over a 48% stake
in PTC. It was one of the biggest, longest
and most complex shareholder disputes in
European legal history. It involved over 100
court and arbitration cases (including over
40 cases in Poland alone) in a number of
jurisdictions (Polish, Austrian, Swiss, English
and American), conducted at all levels of the
court system, including supreme courts in
Poland, Austria and the United Kingdom and
attracted extensive media and press coverage
both in Poland and internationally.
The report contains a summary of the meeting
as well as the answers to the expectations
towards the company that were raised by the
stakeholders represented by, amongst others:
customers, suppliers, business partners,
employees, trade unions, state authorities,
non-governmental organizations and the
media. Provident is the first financial institution
that decided to have such a form of
dialogue with the company’s environment.
31 Provident stakeholders representing all
key groups from the company’s surroundings
accepted the invitation to the Round Table
meeting. During the meeting they had the
opportunity to express their opinions and
doubts related to the company’s activity. On
the basis of the discussions 32 expectations
towards the company were formulated referring
to various areas of the company’s activity:
from the product, through the relations with
the customers to the employee issues and the
communication with the company’s environment.
The report contains the company’s
answers to those expectations.
“Holding discussions at a Round Table with
the company’s stakeholders is a big challenge
for each enterprise – says Tomasz Trabuć,
the head of the PR Department. – The sole
preparation of the meeting at such a level
which engages many different institutions
including persons holding important public
functions requires the hard work of many
people. The stakeholders must believe that
participation in such an event will be a good
investment of their time”.
Partners to the dialogue with the stakeholders:

12
hot topic
bank deposits
art
real estate
currencies
the best
INVESTMENTS
in 2011
gold
Warsaw Stock Exchange

hot topic 13
chapter 1
by: Jarosław Horodecki
illustrations: Kinga Nieśmiałek
Security
comes first
Bank deposits. In addition to treasury
bonds, bank deposits are considered as
the least risky form of investment. All the
same, you can still fall into a trap even
with a bank deposit.
It may seem that depositing money
in a standard bank deposit account
requires no effort. It may appear that
all it takes is to find a deposit account
that earns the highest interest and
then pay some money into it for the term of
your choice: from a few to between ten and
twenty months. However, with this type of
an investment vehicle, you may sometimes
end up with a gain only slightly higher than
the inflation rate. What’s more, you should
remember that gains on investments in bank
deposits are subject to capital-gains tax.
Therefore, before making the final choice, it’s
better to scrutinise the products offered by
banks and consider what would be the best
choice in your particular situation.
“When choosing a term deposit, the majority
of customers focus on the interest rate
offered by the bank,“ says Antoni Leonik,
director of private banking and asset management
at HSBC Bank Polska. ”Of course, the
interest rate on a deposit depends on its term
and the amount deposited by the customer.
The truth is, however, that in many cases
banks are ready for individual negotiations
with the customer where the final interest
rate offered by the bank can be considerably

14
hot topic
higher than the standard rate.
Sometimes banks offer this negotiation
opportunity in the case of deposits for as
little as PLN 50,000. Everything depends
on whether or not they are particularly
interested in gathering new deposits at the
time when the customer is interested
in opening a deposit account.
Another factor that can make
the bank agree to negotiate
the interest rate is the deposit
term: the longer the term, the
more likely it is that the bank
will meet the customer halfway.
There is, however, no point in
arranging a long term, as it’s doubtful
that the customer will keep the money in the
deposit account for its entire duration.
“It’s good to take care in finding out how
much the bank would charge you for cancelling
the deposit before the end of its term,”
Antoni Leonik advises. ”In some cases, if the
customer cancels the deposit early, he or she
may end up with no interest at all. However,
in most cases, he or she will be paid at least a
portion of the interest accrued from the date
of opening the deposit to the date of its early
termination.
You should also check whether the
interest rate on your preferred deposit
is a fixed or a variable rate.
This is where the customer
becomes a market analyst.
Will inflation rise or fall?
Will the central bank raise
or lower interest rates?
”Everything depends on how
long you would like your
money to stay “frozen”
in the deposit account,”
says the representative of
HSBC Bank Polska. “In
the case of a fixed interest
rate, you can precisely
calculate the interest you
will be paid at maturity, even
before opening the deposit
account.
This stability offered by such
deposits doesn’t always pay. For
example, if the inflation rate rises and the
interest rate on your deposit stays the
same throughout its term, you may
end up with no interest at all in
real terms, i.e. after the interest
is adjusted to the rate of inflation
and the capital-gains tax
you will have to pay.
”If you predict that interest rates
will rise, then it’s better to choose
a short-term or a mid-term deposit account,”
Antoni Leonik advises. ”If you follow
this strategy, you may earn higher interest on
your next deposit for a new term. In contrast,
in many cases banks are ready for
individual negotiations with the customer
where the final interest rate offered by
the bank can be considerably higher than
the standard rate
if you think that interest
rates (and the rate of inflation)
will stay unchanged or
if you think they will fall, it
may be more profitable to
use a long-term deposit with
a fixed interest rate.
Another factor you may try to
predict is the banks’ demand
for money. If it turns out that
banks are in need of cash, we may
see another battle for deposits similar
to that in 2009. This, however, is difficult
to predict. What’s more, we should not
expect it to happen again in the near future.
Especially because the number of loans
granted by banks will certainly fall as a result
of the recent decisions made by the Banking
Supervision Commission.
A less profitable alternative to bank deposits
is a savings account. This, however, is not
a way to invest capital, but it is rather an
addition to your current account that earns
interest at a rate close to nothing.
“Savings accounts, which carry interest rates
higher than those offered with current accounts
and lower than those with deposit accounts,
are an interesting solution if you want
to save your surplus cash regularly,” says the
director of HSBC Bank Polska. ”With a savings
account, you can withdraw your money
at any time, while interest is calculated for the
actual number of days during which
the money was deposited in
the account. This way you
can withdraw your money
from the account whenever
you need it, without
losing interest on the
entire amount.
In most cases, however,
the interest rates offered on
savings accounts are far from
attractive. What’s more, banks
often charge hefty fees for withdrawals
from such accounts. Only
the first withdrawal in a
given period is free. For
every additional withdrawal
in the same period, the fee is so
high that it simply doesn’t pay
to withdraw any money from the
account. If you don’t need to keep
any money in a savings account for
a rainy day, it’s better to keep your
savings in term deposit accounts, as
these offer one more advantage: terminating
a term deposit usually means
no interest, which in turn discourages
you from spending your money on
impulse.

advertorial 15
The best investment for 2011
is in the diversity of your people!
Diversity & Inclusion programs seem to be a buzz word in the
modern executive rooms. The trend to create a fully diverse and
inclusive corporate environment finely made its way to Poland.
What we observe, however, is a
substantial doubt among the
managers how the creation of
the diverse and inclusive culture
can really help people to achieve
better results or simply become more efficient
and satisfied workers. For these still in doubt,
some facts and figures:
The term ‘diversity’ made its way into business
to describe the existence and methods of
communication and cooperation between the
cultural entities, such as departments as well as
the functional, professional, national, gender
and age groups. The fact that demographically,
Poland is a very monolithic society and we don’t
experience many problems with race or religious
discrimination in the work place, does not mean
that the notion of the diversity friendly culture
is not for us!
As a test, ask yourself a series of questions:
1. Do your departments cooperate smoothly
or do you hear complaints of the type: “they
don’t understand our procedures”, “it takes
ages to get their attention”, “they live in their
own world and don’t care about others”.
2. How efficient is your top-bottom-top communication:
Do your employees come to
their managers with ideas? Do the employees
know what the Mission, Vision and Strategic
Goals of your business are?
3. If your company is involved in cross-national
projects how many times have you heard:
Kelham Group
www.kelhamgroup.eu
“It’s impossible to get my German colleague
on the mobile after 6.00 p.m. – even to discuss
a problem– very difficult to work with!”
“No more Spanish on my team! Cannot rely
on them!”
4. What is your employees’ age make up? Do
you have 30+ managers whose teams are made
of 45+ employees? How many 40+ managers
work with the teams of 20+ people? Do you
know how to motivate these age groups, make
them efficient and satisfied?
5. And finally gender questions: How many
women have you got on the Management
Board in your organization (%)? Do you
have procedures to support new mothers and
fathers? What about the work-life balance?
• Organisational & Personnel Development consulting
• Design & implementation of the skills training workshops
• Needs driven selection & implementation of the psychometric tools, such as International Profiler,
W.E.R.T, Itim Focus
•Business & development coaching
38 Brackenridge, Carrickfergus
BT38 8FW, UK
+44 2895 81 12 66
ul. Traktorowa 12
52-213 Wrocław, Polska
+48 600 36 82 54
Magda Stobińska-Kelham
Managing Partner
Kelham Group
The answers to these questions will give you
an indication of the wide scope of issues that
“diversity” encompasses. And now, what is “Inclusion”
about? In simple words it is a concept
that will help you to discover, nourish and utilize
the potentials and talents of your people! In the
inclusive company every individual feels good
about the things they do, so they are satisfied and
motivated to do even more! Isn’t it really every
manager’s dream? Have a team of professionals
of different, but complementary skills, who communicate
well, feel motivated and overachieve
their targets? You may smile, but that’s what
‘Inclusion’ is about - diagnosing the strengths,
understanding differences, utilizing talents and
potentials to achieve a common business goal.
If you wish to improve your business bottom
line, attract and retain quality people, enhance
your image on the market or make the efficiency
of your internal operations better, it’s worthwhile
developing a long term “Diversity & Inclusion”
program for your organization. And remember
to make your people aware that not only the
company but they will benefit in the process.
Above, you will see the results of the research carried
out in 2007 on the sample of 52 companies
from the EU market. The figures speak for
themselves.

16
hot topic
chapter 2
by: Roman Przasnyski, Open Finance
illustrations: Kinga nieśmiałek
Going on a currency
Roller Coaster
The pace of changes in exchange rates which generally move in long trends each
lasting for a few years, has recently visibly increased. This situation is unfavourable
in many ways. It may, however, provide opportunities to increase your capital.
began to be described as a trash currency
destined to lose its position, another wave
of crisis turmoil emerged, this time hitting
Europe. Greece’s budget deficit and public
debt trouble, the weeks’ long negotiations
over support for this country, combined
with a subsequent threat of Greece’s problems
spreading to other parts of Europe,
such as Ireland, Spain, Portugal and Italy,
for dealing with the crisis as adopted by the
majority of European Union countries and
the United States. The policy of extremely
low interest rates and quantitative easing
pursued by the Fed since the beginning
of this century is causing the US dollar to
weaken, while European countries’ efforts to
reduce their budget deficit and public debt
levels and to keep their finance in balance
In Poland, the US dollar was, for a long
time, perceived as the perfect investment.
The great shock which came when
the scale of the global financial crisis
became apparent, with its symbolic climax
being the collapse of the Lehman Brothers
bank in the autumn of 2008 caused the US
dollar to strengthen by 20 percent against
the euro in a matter of a few weeks. In
Poland, at that time, the US currency rose
from slightly over PLN 2 in the summer of
2008 to PLN 3.9 in early 2009, meaning
that the Polish currency lost as much as 94
percent against the dollar.
When the shock went away and the situation
became a little calmer, the US Federal
Reserve gave the US financial markets and
the country’s economy a special treatment,
i.e. extreme easing of the country’s monetary
policy, combined with printing money, and
the trend in the US dollar changed dramatically.
The value of the US currency began to
plummet. In February 2009, in took 1.25
dollars to buy one euro. However, at the end
of that year, it took as much as 1.5 dollars,
meaning that the US currency lost 20 percent
against the euro. When the US dollar
At the dot-com bubble burst, many people
who failed to notice and recognise the
change, suffered great losses on their
investments in the US dollar.
led to serious weakening of the euro
and the view that both the single currency
and the entire Eurozone may collapse. From
December 2009 to May 2010, the value of
the euro fell by 20 percent. A later reversal
of this downward trend led to the euro making
up for most of its losses. The Irish crisis
caused the euro to lose only 6 percent.
What we have seen in the last several
months is that significant changes in the
world currency market cause the values of
major currencies to change by around 20
percent. Less turbulent events and changes
in the main trends result in changes by a few
percent, quite large for a currency market.
Although predicting the situation in currency
markets is difficult (because it is impossible
to say whether, and if so, when and
where another crisis will explode and what
its scale will be), some prevailing trends
can still be seen. In the world market, such
trends are the result of different solutions
are of benefit to the euro.
The Polish currency market is overwhelmingly
influenced by what happens in the
world markets, including Central and
Eastern Europe. The factors that weigh in
favour of the strengthening of the Polish
currency, which are related to Poland’s
economic situation and prospects, are
often disrupted by such external influences.
These influences cause the values of
foreign currencies to fluctuate by around 10
percent against the Polish zloty. In the case
of the euro, the exchange rate in the first
half of the year fluctuated between PLN
3.82 and PLN 4.23. As far as the US dollar
is concerned, the difference from June to
October was around 22 percent. The Greek
crisis pushed the value of the dollar against
the Polish currency up to over PLN 3.5,
while a subsequent reversal pulled it down
to slightly above PLN 2.72. As a result of
Ireland’s trouble, the Polish zloty weakened

8
hot topic 17
by almost 15 percent in just a few weeks. If
we ignore the extreme values, which are generally
short-lived, fluctuations over a period
of a few months are about 5 to 10 percent.
Longer-lasting disruptions on a larger scale
are possible only if another European country,
such as Spain or Italy, gets into solvency
trouble or in the event of Poland having
serious financial difficulties.
The currency market is not the easiest
market for individual investors. To stay
afloat in this market, you need to have
some experience, keep your eyes wide open
to various phenomena (both market and
bureau de change is a little bit old-fashioned
method - it is not very practical and not
very effective, as the high buy/sell spread
would significantly reduce your potential
gains. Derivatives, mostly futures contracts,
are yet another possibility, traded in on the
Warsaw Stock Exchange, as well as forex
instruments offered by specialised trading
platforms operated by some brokerage firms
and companies.
All it takes to use currency futures contracts
is an investment account with a separate
derivatives account. The minimum investment
limit is a few hundred zlotys (buying
Using forex platforms normally
requires an investment of at least US$
10,000. In practice, however, you will need
around US$ 50,000 to freely take advantage
of trading opportunities.
by investing, say, US$ 10,000, you enter
into a contract worth half a million dollars.
This multiplier is a powerful weapon but,
at the same time, a double-edged sword. If
the exchange rates change in line with your
expectations, your gains will grow rapidly.
However, even a slight change in the opposite
direction can quickly make your initial
investment go up in smoke.
Recently, structured products based on
exchange rate changes have been gaining
popularity. The main advantage of these
products is that the risk of loss is reduced.
In such products, the investor is generally
guaranteed to get back the nominal amount
of the money invested or a specified part of
the money, normally 80-90 percent. However,
financial leveraging is not used in the
case of structured products, so high gains
are difficult to achieve.
macroeconomic in nature) and your finger
on the pulse. In other words, you must be
ready to close a position any time there are
any indications that the situation is going
to change. Above all, however, you need
to reduce risk, which means you should
only invest a small portion of your capital.
Generally, the money you invest in currency
markets should account for between a few
and ten percent of your capital, though your
exposure will depend on the instrument
you use. You can choose from a number of
options. The easiest method is to buy currency,
though this option is available mostly
as part of a private-banking service. Using a
or selling a single contract). However,
currency futures contracts are available
only for euros, US dollars and Swiss francs.
Using forex platforms normally requires an
investment of at least US$ 10,000. In practice,
however, you will need around US$
50,000 to freely take advantage of trading
opportunities. Here the choice of currencies
and instruments is much wider. A characteristic
feature of futures trading is financial
leveraging: if, for example, you wish to
buy a futures contract for US$ 10,000, you
actually pay only a few percent of the value
of the contract. In the case of platforms,
it’s even only 1-2 percent. This means that
Open House
March 12th, 2011
10:00-14:00
Open House
March 12th, 2011 10:00-14:00

18
hot topic
WARSAW
chapter 3
by: adam mielczarek
illustrations: Łukasz Szczepanowski
Time
to rationalise
moscow
A 16-percent rise in the WIG20 index, a PLN 450 billion turnover, 29
debuts, plus a completely new instrument that lets you “buy an index”.
The image of the Warsaw Stock Exchange is quite impressive. However,
in the upcoming year the picture is not going to be so rosy, though opportunities
for making money will always be there.
london
tokio
Looking back at the last twelve months
leaves no doubt – the Warsaw Stock Exchange
is the leader of the financial market
in Central Europe. With a capitalisation
of over PLN 800 billion, which accounts
for about 60 percent of Poland’s GDP, the
Warsaw Stock Exchange (WSE) has outclassed
its competitors in the region. Today, it is a stock
exchange where 394 companies are listed and
derivatives are doing very well. It is also a place
that attracts companies from outside of Poland
and shows that Poland is indeed a good destination
to go in search of capital and to make quite
a good profit.
The levels of WSE indices speak for themselves.
WIG20, the index which lists the largest
companies, is at 2783 points, up by 16 percent
compared to a year ago. The figures for WIG,
the index that represents the entire market are,
respectively, 47770 points and 19 percent. Add
to this the impressive rises in industry-specific
indices. The Warsaw Stock Exchange’s daily
turnover is higher than that on stock exchanges
in Prague, Vienna and Budapest.
It were the monitors placed in the building
of the Warsaw Stock Exchange that showed
Poland as the “green island” on the map of
Europe in stagnation. However, no tree grows
as high as the sky, which means that any period
of good luck must come to an end one day.
It’s something that stock market analysts are
well aware of. They are cautious (after all, stock
market moods change like the weather), but all
the same agree on one thing: the upcoming year
is a time to rationalise.
”Share prices are already relatively high and
the improvement in corporate earnings has
certainly been factored in to a large extent,” says
Jacek Welc, a specialist in business valuation, an
economist and president of WNP Ekspert, who
specialises in business valuation. The barrier,
he says, is a P/E ratio of 16, a level above which

hot topic 19
welcome to
hilton garden inn kraków
Situated close to the heart of the city – in between the Old Town and the Jewish Quarter of Kazimierz the hotel is ideally
located. Hotel guests can admire the Wawel Castle and Skalka monastery from the windows of half of the rooms .
The other half overlook green fields and trees which have a calming effect. For those who arrive by car there is ample
parking which is unusual in Krakow.
The hotel has 154 well-appointed
rooms spread over six floors all
featuring the brand’s key signature
offerings including:
• the Garden Sleep System bed,
• comfortable working area: large desk with
ergonomic Mirra ® chair, designed by
Herman Miller,
• complimentary cable and WiFi internet
access in all guest rooms,
• round-the-clock business centre with free
access, where you can check emails even if
travelling without your laptop.
areas – a multifun-ctional space of 220 square
metres – a spacious foyer with a view of the
Wawel Castle and an exclusive VIP boardroom
– prepared to host 14 guests and equipped with
the latest technological solutions. Special effort
is made to provide our guests with a great culinary
experience combined with good value for
money. The hotel restaurant offers light, standard
yet delicious food – a collection of dishes
suitable for everyone. All those burger fans will
be satisfied, along with those who always look
for something special like goulash of wildboar or
sautéed liver & oyster mushroom salad.
experts in the mixing of anything that comes
in a liquid form. There’s no need to add that
they have around 200 different types of alcohol
to work with, which in its essence creates
a unique collection, unmatchable with any
other Bar in Poland. Our special offer brings
you cocktails served in large glasses, which, as
most of our dishes, are made to share – our
aim is to bring unforgettable moments to
our client’s social life. Conoisseurs with more
ambitious tastes can enjoy our house-special
– a cocktail made only from the best available
alcohols topped with beautiful and glittering
To make you feel at home the hotel has an open
fireplace where you can rest with a glass of wine
after a hard day’s work. If you forget something
you can always call by our 24-hour Pavilion
Pantry – a smart shop full of snacks, beverages,
cosmetic items, umbrellas and pendrives. The
hotel, as a whole concept is designed to be a
hassle-free place. This main theme can be seen in
most areas of the building, especially the public
areas. Our modern and top-notch conference
rooms are fully equipped with the latest
multimedia equipment, which can be controlled
simply at the press of a button. That enables
maximum multi-functionality and flexibility
which provides all you need for a successful
meeting. The conference space is divided into 2
Our best attraction, though, is the “GLOBE”
– our fine cusine Restaurant, Bar and Café. It’s
the apple of our eye, a finale for our concept of
being a universal and open space for everyone.
The Globe is a truly democratic place reflecting
a colourful and multiethnic world, an
escape for people looking for different flavours
of the world. You can jump in for a take-away
coffee during traffic, you can come for a cocktail
especially prepared for you, or simply indulge
your taste-buds. The menu prepared by
our talented chef allows you to enjoy a journey
around the various places of our Globe. This is
the first and the only venue in Kraków which
is amember of Polish Bartender Association –
which means that your drinks are prepared by
Swarovski crystal. At the same time we never
forget where we came from – living in the
homeland of vodka we take a bow to our finest
product with a special collection of niche
premium vodkas which will surely impress
many connoisseurs. Our hotel empowers
experience, pushes to discover new things and
build relationships. We place special attention
to create a passionate place for the citizens
of our modern world. Eager to discover the
world, travelling or sport are things that make
people come together. And if we show live
sports in our multimedia bar it’s not simply
football – we will show rugby or cricket as we
want to understand what makes billions of
other people passionate about it.

20
hot topic
stocks are simply too expensive. “Currently, the
P/E ratio for the entire stock exchange is slightly
higher, so it’s time to realise profits,” he adds.
In contrast, Jarosław Ryba, an analyst of the
bankier.pl portal, says that in 2011 we should
see a speculative bubble in the energies market.
”Energy sector companies will be exposed to
considerable changes in their values. At the same
time, the pressure on price increases in sectors
stimulated with EU money will ease as we get
closer to the end of such funding,” the analyst
stresses.
There is also a fairly general expectation that
interest rates will rise in the months to come,
which would automatically result in the socalled
risk-free instruments, i.e. bonds and bank
deposits, becoming more attractive. According
to Jacek Welc, this situation is putting investors
off investing their money is stocks, especially
in the face of the increasing likelihood of a
stock market downturn. A lot of companies are
troubled by low-quality earnings, which means
their inventory and account receivable levels
are relatively high. This, in turn, may result in
negative surprises in the next few quarters of
the year,” the Wrocław University of Economics
lecturer forecasts. We should not, however,
expect any stagnation.
According to Marek Rogalski, an analyst at
BOŚ Brokerage House, the year 2011 will be
a chance for the Warsaw Stock Exchange as an
institution. ”Poland is an attractive market for
companies based in Ukraine, the Baltic states,
as well as the Czech Republic or Hungary. Our
advantages include the absorption capacity of
the Polish stock market in relation to other
stock exchanges, plus the prospects for the Polish
economy. Although we should not expect
Poland to join the club of highly developed
countries, we should be a little bit more prepared
to deal with global shocks than we were a
few years ago,” says the analyst.
Jarosław Ryba is not so optimistic. He thinks
that although Poland’s situation is, in objective
terms, exceptionally good compared to
its neighbours, the country is still seen as a
representative of Central and Eastern Europe
and so the managers of global funds holding
assets worth billions of dollars look on Poland
as the only country in this part of Europe with
sufficient liquidity levels in securities and currencies.
“If they want to invest in the region, the
main destination is Warsaw, but when Poland’s
The end of the
period of big
privatisation
projects does not
mean that we will
not see any stateowned
companies
being privatised
next year. After
all, the Polish
Treasury plans
to receive PLN 15
billion in revenue
from privatisation.
Hot stock tips for 2011
Jacek Welc, PhD, president of WNP Ekspert
Looking at sectors as a whole makes no sense,
as there are both cheap and expensive companies
in every sector. We can, however, try to find
interesting companies with strong foundations.
I think that those worth considering include Boryszew,
Grall, Atlanta, Tell and Impexmetal, while
Cyfrowy Polsat, PZ Cormay and Ulma Construction
should rather be avoided. In the case of companies
neighbours get into trouble, investors most
visibly start moving capital out of Warsaw,” adds
the bankier.pl specialist.
Unfortunately, we can hamper the stock market
upturn with our own moves. Changes in tax
regulations or at least tempering with the
national pension system (which is, by and large,
a fact already) will always cause concerns. ”Each
of the bills now on the drawing board to amend
Poland’s pension system regulations proposes
to reduce the limit of money that Polish open
pension funds are permitted to invest on the
stock exchange. Although the time of big privatisation
projects is coming to an end, it is the
pension funds that are acting as a passive investor
that prevents market volatility from reaching
excess levels” adds Marek Rogalski.
The end of the period of big privatisation
projects does not mean that we will not see
any state-owned companies being privatised
next year. After all, the Polish Treasury plans
to receive PLN 15 billion in revenue from
privatisation. The most interesting state-owned
enterprises have already been privatised, which
is in line with the government’s plans for 2008-
2011. However, there are still many companies
to choose from: the BGŻ bank, the mining
companies Jastrzębska Spółka Węglowa and
Katowicki Holding Węglowy, plus the railway
operator PKP Intercity – these are the hot tips.
There is also a lot of talk about the privatisation
of the Polish national airline, LOT; the mobile
operator Polkomtel; or other companies within
the PKP (Polish Railways) Group; though these
are less certain. ”On the privatisation side, the
upcoming year may be a period to relax and
design a new plan describing the government
strategy for the years to come,” says Jarosław
with positive prospects, the valuation ratios are
relatively low and the trends in the measures that
are indicative of their future earnings are favourable.
In the case of those with negative prospects,
things are quite the opposite. My hot tips are not
adjusted for the companies’ plans because, as
numerous surveys starkly show, it’s hard data that
matters.

22
hot topic
Ryba. What is going to be really interesting is
the continued sale of stakes of between ten and
twenty percent in companies already listed on
the Warsaw Stock Exchange. These should include,
above all, energy sector companies (Enea,
Tauron), chemical companies (Police, Puławy),
as well as the financial sector (PKP BP, PZU)
and fuels (Lotos).
However, according to bankier.pl analysts, if
you want to make money on the stock market,
you should pay greater attention not to the
market giants, as these have already exhausted
their growth potential, but rather to mediumsized
companies. ”Now that Poland’s economic
situation has stabilised, the business risk of such
companies is lower, which will reflect in the
prices of their shares. I think that the upcoming
year will be a bullish period especially for
food manufacturers as well as the banking
and financial sectors,” he says. He thinks that
fuel sector companies and the broadly defined
category of defensive companies (mining, public
utilities, public infrastructure modernisation,
mass media, insurance) will also be successful on
the stock market.
Those who would rather trust the stock market
trends than pick the raisins out of the stock
exchange cake will find a new instrument traded
on the Warsaw Stock Exchange since September
2010 particularly useful. It’s called Lyxor ETF
(Exchange Traded Fund), a fund designed to
precisely reflect changes in the WIG 20 index.
Although it’s a forerunner on the Warsaw trading
floor, we should see more of them soon, says
Adam Maciejewski, a Warsaw Stock Exchange
board member.
An advantage of this new instrument is its
simple passive investing strategy, without
trying to “catch” any highs or lows. Another
advantage is that it is widely available with all
brokerage firms and at any time during the
trading session. The management fees are also
low compared to those charged in the case of
traditional funds. Lyxor ETF has obviously
been quickly appreciated by investors, as the
turnover on the instrument exceeded PLN
100 million after the first three months of
trading.
So whether you go hunting for bargains or just
take a passive approach and watch the trends on
the Warsaw Stock Exchange in 2011, you will
certainly find something for yourself. Time will
show which strategy will prove better.
Now that Poland’s economic
situation has stabilised, the
business risk of such companies
is lower, which will reflect in the
prices of their shares.
bankier.pl
ETF: buying an index
”Can I buy an index?” A novice female-investor
asked this question almost two decades ago to
the then president of the Warsaw Stock Exchange,
Wiesław Rozłucki. She asked the question in
a time when the offices of the stock exchange
were situated in a building previously used as the
headquarters of the Polish United Workers’ Party (or
PZPR) and in a time when only a dozen companies
were listed on the Warsaw exchange. At that
time, the question sounded funny and completely
absurd. But thanks to ETFs, the answer to that same
Warsaw Stock Exchange
question today is a “yes”. The problem with “buying an
index” is that it is not enough to hold shares in every
company listed within the index. The companies that
form an index vary in both size and demand for their
shares. To put it briefly, each company has a different
impact on changes in the value of the index. To make
sure that all these differences are fully reflected in the
investor’s portfolio, the investor would have to spend
several thousand zlotys at a time and then keep track of
each and every change to the composition of the index.
ETFs help solve this problem.

hot topic 23

24
hot topic
chapter 4
by: Jarosław Horodecki
illustrations: Michał Małolepszy
Something
tangible
Investing in real estate. An advantage of
this form of investment is that the asset
you invest in is a real, tangible thing. After
all, you can always see the flat, penthouse,
office building or warehouse you’ve bought
as an investment.
While investment funds have
the advantage of being easily
available, particularly in the
age of the Internet, it’s no secret that they are
virtual investments, as the money you invest
does not take any tangible form. The case is
different with real estate, whether for residential
or commercial use, also because you can control
your investment, which is important for many
investors.
The most popular type of real estate investment
are flats. Flat prices have, in recent years,
increased even fourfold in some Polish cities,
but another investment paradise like that is
very unlikely to happen in the future. All you
can expect today are two-digit returns at best.
You should, however, remember the developments
in late 2008 and early 2009. In June 2007,
newspapers carried stories about fabulously high
returns on investments in real estate (reaching
even several dozen percent), while real estate
investment funds, popping up like mushrooms,
tempted investors with the prospect of making a
fast buck. Analysts back then claimed that, after
a short period of stagnation, prices would start
soaring again as soon as in 2009. What was the
outcome? Those who gave in to the temptations
know the answer very well, even too well... Despite
considerable drops in prices, a slump in the
Polish real estate market is out of the question.
”Our residential property market has not been
badly affected by the crisis,” says Bartosz Turek,
a real estate market analyst at Home Broker.
“Prices in the largest cities have dropped by
10-15 percent from the peak levels during the
booming period.
So it can be said the Polish market is getting
back to normal, which means that if you buy
a flat or a penthouse, you shouldn’t expect to
make a big profit if the value of the property
goes up. The only way to do so is to carefully
look for a property in a location where significant
amenities or facilities are expected to be
provided in the foreseeable future (such as a
metro station or some other transport facilities).
The price of the property will rise then.
However, such an approach requires a great deal
of effort and, given the feasibility of the local
development plans in our country, the expected
profits may turn out to be illusory. Hence it’s
better to buy and then let.
”Surveys carried out by the Global Property
Guide portal show that rent levels in Poland are
attractive compared to the average for the EU,”
says the Home Broker analyst. “The payback period
in Poland is 20 years, while the average for
the entire EU is around 25 years, yet in Monaco
it’s as long as 68 years.
The most popular flats bought as an investment
are those in good locations and for which
tenants are relatively easy to find. What’s also
important is the technical condition of the
property, the type of the building (blocks of
flats made of prefabricated concrete slabs or
old neglected tenement houses are not popular
any longer), the running costs of the building
(differences can be as high as a few hundred
percent) and the costs of any repairs that the
property needs. It’s good to remember that the
cost of redecorating a flat is higher than the cost
of finishing a flat bought in a builder’s finish
condition.
Buying a flat is not a problem today, as the
supply of both new and existing properties is
large. In 2011, the prices of new properties will
certainly continue to drop, as the number of
projects under construction is on the rise and
the government is planning to impose restrictions
on its “Rodzina na swoim” scheme (which
subsidises the interest rate on home loans), while
the Banking Supervision Commission’s decision
that will come into force on 23 December (the
so-called “Recommendation S”) will certainly
reduce the number of home loans granted by

hot topic 25
The most popular type of real estate
investment are flats. Flat prices
have, in recent years, increased even
fourfold in some Polish cities
banks. Used to raking in huge profits, property
developers will have to come to terms with the
falling profit margins.
What, then, are the benefits of a buy-to-let
investment? Generally, the rate of return on
such an investment is similar to that on a 10-year
government bond, except that the former carries
no guarantee that the investor will get back the
capital invested (which was the case after the
2008 slump in prices).
“The average profit from rental payments in
relation to the value of the property can be
estimated at 4-5 percent net,” Bartosz Turek
explains. ”Of course, the value of the property
itself will increase in the long-term, but it would
be naive to expect a return of 110 percent, as was
the case in the last five years. Still, the rise in the
value of the property should generate returns
higher than the rate of inflation.
Another argument in favour of investing in flats
is the prospect of the Polish central bank (or,
more specifically, the Monetary Policy Council)
raising interest rates. Why? Because higher interest
rates result in loans being more expensive
How
to
invest?
John Duckworth,
Managing Director CEE
at Jones Lang LaSalle
In general, it is usually best to use
professional real estate funds or fund
management companies instead of doing
everything in-house. Real estate funds benefit
from a dedicated team in place with know-how
and experience, so you don’t have to maintain a
whole team in place responsible for managing
the portfolio. This is especially true for small
portfolios, as the headcount required does not
differ much from that of larger portfolios. Additionally,
real estate funds / managers can invest
your money across many properties in all the
sectors, hence they give you the diversification
you will not get by creating your own portfolio.
Also, the professionals can allocate your money
together with other inflow money into big
ticket high quality properties, which again
would be hard to achieve on your own. Real
estate funds known on the market also have
higher chance of securing financing at more
favourable terms, hence they could purchase
the properties ‘cheaper’.

26
hot topic
and less available. This, in turn, translates into
more people being interested in renting a flat
and, as a result, in an increase in rent levels (and
so in higher rates of return). A drop in the number
of loans usually means a drop, or at least no
rise in the prices of flats. All this looks like buying
properties is the best thing to do! However,
if you want to make a really good profit, you
need to use your own cash, not a mortgage loan.
With a few exceptions.
“Under the current market circumstances,
a mortgage in the Polish currency is not an
attractive form of financing, as the cost of such
a loan is higher than the return on the investment,”
Bartosz Turek explains. ”The cost of a
euro-denominated loan is almost as high as the
return. The only way to make a profit from a
buy-to-let investment financed with a loan is
to use a loan provided within the “Rodzina na
swoim” government scheme, where you can
flats may not be very easy. There are simply not
enough potential customers.
Investing in holiday properties is another story,
and it’s quite complicated because there is a multitude
of factors and many ways to invest in such
properties. You can buy a holiday property in
Poland or abroad. You can receive regular rental
payments or ones that depend on the building
occupancy level. Finally, you can choose to buy
a holiday property directly or use the services
of a hotel management company. In addition,
if you’re buying abroad, currency and legal risks
are involved.
”In Poland, you can let your holiday property
to tourists or you can buy a suite in a hotel,”
says Bartosz Turek. ”In the first option, you will
have to pay a fee to a broker for finding tenants
for you. Normally, the fee is equal to around 20
percent, which results in a 4-6 percent gain on
the investment. The other option, i.e. your own
or London.
”As is the case with any investment, the primary
objective is to make a profit,“ Łukasz Lorencki,
an analyst at Capital Markets Group Cushman
& Wakefield, says clearly. “Although,
unlike in the case of risky instruments such
as stocks, you shouldn’t expect returns of
several dozen percent on investments in
commercial properties, but returns are all
the same higher than on residential property
investments.
However, you should not expect rent levels
or property prices to rise significantly. After
a period of sudden rises and no fewer sudden
drops, the market is eventually in balance.
Making a fast buck is no longer possible even
today.
”Before Poland joined the European Union,
the rates of return on commercial property
investments were significantly higher than
they are today, with many at around 10
percent,” comments Marek Paczulski, an inan
interesting alternative to investing in flats is doing so in
commercial properties. Especially because almost all market
analysts say that Poland has become a paradise for both individuals
and companies interested in investing in such properties
make profits for 8 years, which is the period
of time that the government will subsidise the
interest on the loan.
Home Brokers analysts estimate that a 50 sq m
flat paid for with a loan as part of the scheme
will generate a profit of around PLN 200 per
month in Poznań (for a property with a price
tag of PLN 260 thousand) and PLN 800 per
month in Warsaw (for a flat bought for PLN
300 thousand). In reality, the return on a buyto-let
investment hardly ever exceeds the costs
of the loan used to pay for the property. An
alternative is to invest in luxury flats and holiday
properties.
“A luxury flat seems to be the least risky investment
vehicle in relative terms,” says a Home
Broker representative. ”Generally, we don’t see
any significant drops in the prices of luxury flats
during periods of economic slowdown or even
in a crisis. Except that it’s not easy to estimate the
rate of return on such a property, as this market
is still in its early days in Poland. Another thing
is that making profits form letting out luxury
hotel suite, carries hotel business management
risks. These, however, are compensated for with
higher rates of return if your investment is successful
(from 5 to 9 percent).
In fact, an interesting alternative to investing
in flats is doing so in commercial properties.
Especially because almost all market analysts say
that Poland has become a paradise for both individuals
and companies interested in investing
in such properties. This is proved, for example,
by the value of transactions in the market for
commercial and office properties. In 2010, it
was around EUR 2 billion, a figure almost three
times higher than that in 2009. Another sign
of recovery in the market is that suspended
projects are being resumed and new ones are being
planned. In this respect, Warsaw is clearly in
the lead and ahead of other capital cities in the
region, including Prague and Budapest. Why
are investors so eager to locate their capital in the
Polish market? Well, if you invest in an office
building in Warsaw, the payback period is ten
years, compared to more than 20 years in Paris

hot topic 27
vestment adviser at DTZ. “In the second half
of 2007, returns for the best office properties
in Warsaw fell to around 5.5 percent.
The reason? A lot of interest in investments
immediately before the crisis caused a considerable
rise in property prices, while rent levels
remained almost unchanged. The rates of
returns fell, which was not much of a surprise.
The crisis, which peaked in 2008, caused
investors to pull out their capital,” Łukasz
Lorencki reminds us. “The values of properties
may have dropped by even 30 percent
in less than two years, which led to rates of
return rising to over 7 percent.
“This year we have seen investors come back
to the Polish market. This, combined with
loans being more and more available, causes
rates of return to fall to almost 7 percent
for the best properties in Warsaw,” the DTZ
representative sums up.
However, returns at these levels are still
higher than in the case of residential properties.
The problem is that you can’t make a
good profit from every commercial property.
”An increase in the value of a commercial
property depends on a large number of factors
whose changes are difficult to predict,”
explains Michał Stanisławski, an analyst of
the department of capital markets at CB
Richard Ellis. ”This makes it impossible to
tell exactly how much a particular property
will be worth even in one year’s time. Another
reason is that there is not a lot of top
quality commercial properties.
What then should you look at if you’re
considering investing in an office building, a
warehouse or a shopping centre? Łukasz Lorencki
of Cushman & Wakefield enumerates
a whole range of factors that may affect your
ultimate success, i.e. the expected return on
your investment. These include the situation
in the given property market, the location
and condition of the property, its competitors
(both buildings under construction and
projects at the planning stage), the capacity
to extend the building, the choice of tenants
and their financial situation, as well as the
duration of the lease agreements with the
tenants, plus the area of vacancies in relation
to the total leasable area of the property,
and the level of rent rates in relation to the
average for the entire market. The currency
in which rent payments are denominated is
also important, as is whether or not the lease
agreement provides that the rent is to be
adjusted to inflation. However, finding the
ideal property is not easy...
”The most wanted properties are shopping
centres and top-quality office buildings,
which are still very few in Poland,” says
Michał Stanisławski. ”Talking about topquality
office buildings, I mean buildings in
prestigious locations, in the centre proper of
a city, particularly in Warsaw. In the case of
warehouses, access to good roads and railway
lines is important, while the factors that matter
in the case of shopping centres include
the number and wealth of the people living
in the surrounding area.
Such properties are the most popular with
investors. If you look at the demand figures
for lower-quality properties, the picture isn’t
so rosy.
Although the crisis is already the past, investors
are very reluctant to take risks,” says
Łukasz Lorencki. “This is why we’re dealing
with an interesting situation where the best
properties are still highly wanted, while
demand for second-rate ones is still low.
Nevertheless, it’s good to consider investing
in the commercial property market.
Especially if you have a really large amount
of capital available for use. Although smaller
investors can too make profits from investments
in such properties. Except that in such
a case, it’s better to look for funds that invest
in real estate. In Poland, the number of such
funds is increasing. So all you need to do is
to check what they have to offer. Remember,
though, that the majority of these institutions
are closed-end funds that require
“freezing” your capital for at least a few years.
In return, they promise reasonable returns of
a few percent, usually higher than the gain on
a bank deposit.

28
hot topic
1000 $
500 $
by: Witold gadomski
chapter 5
In a time of crisis
it’s time for gold
On August 15th 1971, US president Richard Nixon announced dramatic changes
in the US administration’s currency policy. The dollar lost support in the form
of gold reserves. As a matter of fact, the United States admitted its insolvency.
Central banks of other countries, that held reserves in US dollars, could no
longer exchange their bucks into gold. And this has been the case ever since.
Start of the Year
End of the Year
2005
The US administration’s decision was
a response to the country’s growing
current account deficit. The United
States were involved in the costly
Vietnam War, while the US economy
was no longer competitive with that of Europe
and Japan. The US made payments in dollars,
which had been exchangeable into gold by the
August of 1971. Nixon’s advisers came to the
conclusion that the US couldn’t afford such
a luxury. Gold lost its powerful status as the
foundation of monetary systems, although
central banks still hold part of their reserves in
gold bullion.
With the US dollar freed from the chains of
gold, the value of the US currency began to
plummet, while the value of gold - as money -
Gold prices
in dollars per ounce
2006 2007 2008 2009 2010
The London gold fixing, own calculations
soared. Previously, governments (or at least the
government of the United States) had guaranteed
a stable price of the precious metal. Before
it was de-monetised, gold cost 38 dollars per
ounce (approx. 31.1 grams). Today the price of
gold is determined by the market, which means
that it rises inevitably, even if because of inflation.
Despite the divorce of gold with the dollar,
the prices of gold still depend on the condition
of the US currency and of the US economy. The
better the condition of the dollar, the lower the
price of gold. When the US economy gets into
trouble, the value of gold goes up.
Last year was a good year for gold and not
so good for the economy. The price of gold
increased by over 25 percent, from US$ 1,120
to US$ 1,410 per ounce. Today, the value of the
precious metal is nearly 37 times higher than in
the August of 1971. This means that an investment
in gold would have generated a return of
9.4 percent annually since then. That’s quite a
lot, though it’s not excellent. A stake in the General
Electric Corporation bought 50 years ago is
worth more than 100 times more today, which
means the holder of the stake would have earned
more than 10 percent annually for almost half
of a century. According to Goldman Sachs analysts,
the price of gold will rise in 2011 to US$
1,690 per ounce and will reach its peak value in
2012. In contrast, experts of the closed-end fund
Investor Gold FIZ predict that the value of gold
will reach US$ 2,000 per ounce within the next
two years. All the same these are only forecasts,
and it’s better to be cautious about them.
In the past, there have been periods of falling
gold prices. In January 1980, it took an average
of 675 US dollars to buy an ounce of gold. Five
years later, it took only 302 dollars. In the 1990s,
when the US economy prospered, the prices of
gold were stable, slightly trending downwards.
In the mid-2000s, they began to rise. The price
record set in the January of 1980 wasn’t beaten
until May 2006. If someone invested in gold
bullion in the early 1980s, he wouldn’t begin to
make up for his losses until a quarter of a century
later. Although an investment in gold doesn’t
guarantee any returns, the precious metal has
its supporters. Gold is both a financially liquid
capital accepted worldwide and a safe haven
in the time of a financial crisis. It’s also the best
insurance policy, as the prices of gold never depend
on share prices or bond values. They often
rise when the prices of other instruments fall.
Therefore, the precious metal offers protection
against unexpected market fluctuations. For this
very reason, many experts encourage investors to
allocate a portion (5-10 percent) of their portfolios
in gold. Just in case, for a rainy day.
Gold is indestructible and easy to store. It will
survive a fire and an earthquake. It does not
change even though time passes. It cannot be
counterfeited, as the weight and purity of gold
and gold coins are subject to precise control
and standardisation done by international
institutions. In the gold market, as in any other
financial market, the price depends on the
demand and supply. Speculative bubbles occur
in the gold market too, like the one in the years
1979-1980. Is the boom in the gold market we

hot topic 29
specifically, Banque de France). These two
institutions are followed by China. With large
amounts of money available, SPDR Gold
Shares is able to make the price of gold go up.
The main advantage of investing in the fund
are the low costs of buying and keeping its
shares. Gold bars are indestructible, but may
be stolen. Agents in gold transactions charge
high profit margins to cover their costs of
transporting and storing the precious metal. In
contrast to this, shares in the fund are liquid,
stored safely in an electronic database and can
be bought and sold from the comfort of your
own home. ETFs investing in gold is popular
in Asia, a continent traditionally attached to
gold. A few of such funds - linked to prices of
gold, silver, platinum and palladium - are listed
on the Tokyo Stock Exchange. According to
analysts, the Japanese, concerned about the
likelihood of the country’s insolvency - will
readily invest in such funds. Japan is the
world’s most indebted country. In India, gold
have seen in the last few years a sign of another
bubble growing? Analysts say ”No”. The supply
of gold is stable and the demand for the metal is
on the rise due to the risk of a number of large
countries becoming insolvent.
In the recent years, no new deposits of gold
have been discovered. The biggest players in
the gold market spend billions of US dollars
acquiring companies together with
their gold deposits, thus increasing
production potential.
This, however, does not
lead to new deposits
being discovered,
while global
resources
of the
precious
metal ready for mining are not growing.
In China, the world’s largest market, the
demand for gold grows at the pace of 13 percent
annually. In the Chinese culture, gold is a symbol
of wealth. The Chinese also have a tradition
of giving gold gifts on occasions such as birthdays,
weddings or the Chinese New Year. The
Chinese trust gold and invest more and more
of their savings in it. They are encouraged to do
so by the government’s advertising campaigns.
Last year, the Chinese bought US$ 14 billion
worth of gold, which accounts for 11 percent of
the global demand. The central bank of China
gradually increases its gold reserves. However, to
prevent prices from excessively rising, it doesn’t
purchase the precious metal directly on the market,
but rather takes it over from state-owned
gold mines and signs contracts for the supply of
gold ore with independent mining companies.
The main investors in the gold market are large
financial institutions: central banks, commercial
banks, pension funds and hedge funds. They
invest in physical gold, derivatives, shares in gold
mines, and ETFs.
According to Bloomberg, ETFs hold 2,091.6
tonnes of gold, including 1,280.72 tonnes
(41176501.67 ounces) held by SPDR Gold
Shares and valued at US$ 58 billion. The SPDR
Gold Shares fund made its debut on the New
in 2010 Financial markets were concerned
to see more and more countries getting
into debt repayment trouble. Gold seems
to be the last “safe haven”.
York Stock Exchange (NYSE) in November
2004. Since December 2007, it has been listed
on NYSE Arca, but also on the stock exchanges
in Singapore, Tokyo and Hong Kong.
The largest owners of the SPDR Gold Shares
fund are well-known financial investors: Paulson
& Co (which holds over US$ 4 billion worth of
its shares), Northern Trust (US$ 1.665 billion),
JP Morgan Chase & Co (US$ 1.3 billion),
Bank of America (US$ 1.3 billion),
Morgan Stanley & Co (US$ 983
million), Blackrock Advisers
(US$ 901 million), UBS
AG (US$ 783 million),
Soros Fund Management
(US$ 600 million), Eton Park Capital
(US$ 584 million).
SPDR Gold Shares is part of a family of funds
managed by the State Street Global Advisors.
The fund is the world’s largest investor in the
market for gold and gold-related derivatives. It is
also the world’s biggest ETF in terms of capitalisation.
Holders of shares in SPDR Gold Shares
are practically holders of shares in the gold
stored by the fund. If the share price of SPDR
Gold Shares is different from the price of gold,
the fund exchanges 100 thousand shares into 10
thousand ounces of gold to regain balance. The
fund’s gold bars of 400 ounces (approx. 12.4 kg)
are stored in HSBC’s strongroom in London.
Isn’t it easier to buy a bar of gold or a few
gold coins directly? Well, do as you like. If
you buy gold directly, you have no influence
on the price of the precious metal, whereas
shareholders in the SPDR Gold Shares fund
influence the market. The only institution
with gold reserves greater than those held by
the fund is the French government (or, more
ETFs now hold only 12 tonnes of the precious
metal, but their value is growing fast. In
Poland, a convenient form of investing in gold
is buying Investor Gold FIZ certificates. Since
they were made available four years ago, they
have generated the highest gains for investors
among all the available funds with different
investment strategies. The Investor Gold FIZ
fund was established and is managed by the
investment fund company Investor TFI. The
fund’s portfolio is based on derivatives whose
prices depend, directly or indirectly, on the
market price of gold, but also on the prices of
silver, platinum and palladium. Additionally,
the fund may invest money in the shares of
companies operating in the exploration, development
and mining of precious metal deposits
and polymetallic deposits, where gold, silver,
platinum and palladium constitute a major
part. Investor Gold FIZ certificates are listed
on the main market of the Warsaw Stock Exchange.
Last year, the Investor Gold FIZ fund
generated a return of 63.8 percent!

30
hot topic
chapter 6
by: Kama zboralska
Investing
in beauty
Nothing is more glamourous than investing in art. By investing
in works of art, you show that you value aesthetic
excellence and appreciate the company of beauty in your
everyday life.
Grzegorz Lerka, “Bez tytułu”, oil on canvas
The global economic crisis
has also affected the art
market. The price bubble
burst and the value of many
artists’ works dropped. Today, things
are slowly getting back to normal.
Traditionally, last year’s largest art
trade show, Art Basel, held in Basel,
Switzerland, in June 2010, attracted,
as was the case in the previous years,
major curators, critics, museologists and, of
course, art collectors. On the first day, a queue
of millionaires waited outside the entrance, a
view not so common these days. The decision as
to which art galleries can exhibit at the event is
made by an extremely exacting committee. Of
all the Polish galleries, only a few are represented,
including the Foksal Gallery Foundation
located in Warsaw and the Starmach Gallery,
situated in Cracow.
The owner of the Starmach Gallery, Andrzej
Starmach, decided to exhibit modern art
classics, including works by Jerzy Nowosielski,
Tadeusz Kantor, Maria Jarema, Jonasz Stern,
and Henryk Stażewski. And he succeeded. In
the 1970s, their works were available at a price
between US$ 100 and US$ 200. Today, the
prices start from PLN 100,000. Starmach says
that buying the works of these artists is like buying
shares in a secure investment fund. There is
a chance to make profits at minimum risk. The
works of these artists have also been appreciated
by world-famous museums. Kantor’s ”Umarła
klasa” was bought by Pinakothek der Moderne,
a modern art museum in Munich, Germany.
During the Basel event, Stażewski’s geometric
abstract works, paintings by Roman Opałka,
and Nowosielski’s modern works were
appreciated. Nowosielski’s outstanding
works have not been available on the
market for many years. If they come
back, says Starmach, their prices will be
five times higher.
The works of other artists, too, are
invariably highly recognised, including
those by Wojciech Fangor (up PLN
160 thousand), Jan Tarasin (PLN
60-120 thousand) or – from a younger
generation – Jarosław Modzelewski (oil
paintings – up to PLN 120 thousand).
Contrary to appearances, it is not easy
to establish a presence in the Polish
market. Few, mostly the classics, have
been successful. The prices of their works have
doubled in a matter of a few years. Not so long
ago you could hear people say that their prices
were as high as possible. Today, we can say they
were quite affordable...
Klementyna Bocheńska, the owner of the Klima
Bocheńska Gallery in Warsaw, deliberately
Major Polish Galleries
WARSAW
Foksal Gallery Foundation www.fgf.com.pl
Foksal Gallery Foundation has taken Polish art to the
international market. It is thanks to this art gallery that
artists such as Wilhelm Sasnal, Paweł Althamer, Monika
Sosnowska and Artur Żmijewski are now successful. The
gallery exhibits its works at art shows, including Art Basel in
Basel, Switzerland.
Raster Art Gallery www.raster.art.pl
This gallery focuses on works by young artists, including
Rafał Bujnowski, Aneta Grzeszykowska and Zbigniew Rogalski.
The gallery exhibits its works at art shows, including Art
Basel and Liste in Basel, Switzerland, and Art Basel Beach in
Miami, Florida.
Poster and Graphics gallery
www.galeriagrafikiiplakatu.pl
This gallery displays works by artists who use paperbased
techniques. It is famous for its collection of
Polish modern and archival posters. It offers works
by, among others, Henryk Tomaszewski, Waldemar
Świerzy, Franciszek Starowieyski, and Teresa
Pągowska.
Klima Bocheńska Gallery, www.bochenskagallery.
pl ; Milano Gallery, www.milano.arts.pl; Le Guern
Gallery, www.gallery.leguern.pl; Lokal_30, www.
lokal30.pl; aTak Gallery, www.atak.art.pl; Czarna
Gallery, www.czarnagaleria.art.pl; Leto Gallery,
www.leto.pl; Piotr Nowicki’s Gallery, www.galeriapn.pl;
Kolonie Gallery, galeria@galeriakolonie.pl
CRACOW
art agenda nova www.nova.art.pl
This gallery promotes the most interesting modern art
works by Polish artists. It displays paintings, photographs,
installations, as well as new media art. The gallery works
with, among others, Katarzyna Skrobiszewska, Anna Polska,
and Michał Chudzicki.
Starmach Gallery www. starmach.com.pl
This is the biggest Polish privately-owned gallery (covering
an area of around 600 square metres). It displays works by
the classics of postwar art, including Tadeusz Kantor, Jerzy
Nowosielski, Jan Tarasin, and Maria Jerema. It also shows
geometric abstract works (by Henryk Stażewski and Ryszard
Winiarski, among others). The gallery exhibits its works at
Art Basel in Basel, Switzerland.

hot topic 31
Choosing the most modern works of art
is like investing in an emerging company
– you can earn either a lot or nothing. In
the world of art, the rules are similar to
those in the economic market.
Kobiety w czerni, Martta Węg, oil on canvas
mixes generations, exhibiting works by artists of
both the young and middle-age generations. She
always recommends colouristically sophisticated
abstract works by Wojciech Łazarczyk and
paintings by Ryszard Woźniak, of the legendary
Gruppa (oil paintings priced at a few tens of
thousands zlotys, depending on the format and
period of origin).
Choosing the most modern works of art is like
investing in an emerging company – you can
earn either a lot or nothing. In the world of art,
the rules are similar to those in the economic
market. The higher the potential profits, the
higher the risk. The specific character of the art
market – which is in fact a combination of the
investment, decoration and collection markets –
is that it is the least predictable of all markets.
A spectacular example of an incredible success
story is Wilhelm Sasnal (born in 1972). His
works can be found on display at, for example,
London’s Tate Gallery, New York’s MOMA
and Guggenheim, and at the Pompidou Centre
in Paris. In 2007, Sasnal’s “Samoloty” (Planes),
from Charles Saatchi’s collection, were sold
for US$ 396 thousand at a Christie’s auction.
It is important to note that in 2000, the artist’s
paintings were available for around PLN 1.5
thousand.
Until recently, there was a great interest in
the works of debut-makers, mostly from
post-Communist countries. Today, this trend
is somewhat weaker, but talented artists at
the start of their careers are still wanted.
Especially because their works are available
at low prices. It takes only PLN 1.5 thousand
to buy an oil painting by, for example, Michał
Chudzicki, a talented last-year student of the
Academy of Fine Art in Cracow (available at
Art Agenda Nova, Cracow). Huge paintings
by Marcin Kowalik, that hard back to the
old masters are also popular. They are up for
sale at the Artemis art gallery in Cracow,
with prices starting from PLN 6.5 thousand.
Modern art is also multimedia art, with artists
using various means of expression. Works
such as original ceramic sculptures by Olaf
Brzeski (Czarna Gallery, Warsaw) are sought
after. His plates were bought at the Basel
show to be included in an important collection
in Copenhagen. Another increasingly
popular artist is Radek Szlaga, born in 1979,
whose works are available at the Warsaw
Leto Gallery. His works look like the works
of a child, with the predominant features
being the US flag, an empty sky or forgotten
cemeteries, and with the characters being
Basquiat, Michael Jackson and Idi Amin.
Their prices start from EUR 1.5 thousand.
Before choosing to buy a particular work of
art, it is essential to visit a number of reputable
art galleries first. Then you can choose what
you like. It is the basic rule – after all, it is you
who is going to commune with the painting or
sculpture of your choice.
Major art auction
houses outside Poland
Of more than 300 auction houses throughout
the world, the following four are visited most
frequently: Christie’s (London), Sotheby’s (New York),
Phillips de Purry & Co. (London) and Bonhams (Vienna).
Sotheby’s www.sothebys.com
Sotheby’s is one of the world’s two most reputable auction
houses with the highest turnover levels. It was founded in
1744 by Samuel Baker, a London bookseller.
Christie’s www.christies.com
Founded in 1766 by James Christie. It is situated in London,
but its major auctions are also held in New York, Paris,
Amsterdam and, recently, also in Hong Kong.
Dorotheum www.dorotheum.at
It has been in existence since 1707. Although its
head office in situated in Vienna, its branches are
located in other major cities in Austria. Dorotheum
has also been present in Prague for a few years.
Phillips de Pury &Co. - London
www.phillipsdepury.com
It was founded in London in 1796 by Harry
Phillips.
Zurich
Galerie Koller
www.galeriekoller.ch
Munich and Hamburg
Ketterer Kunst
www.kettererkunst.de
Paris
Tajan
www.tajan.com
Cologne
Auktionshaus Lempertz
www.lempertz.com
Stockholm
Bukowskis www.bukowskis.se
Bukowskis is he largest auction house in Scandinavia.
Founded in 1870 by a Polish emigrant, Henryk
Bukowski, it is situated in Stockholm and has a branch
in Helsinki.
Kama Zboralska, author of a book series entitled Sztuka
inwestowania w sztukę (or: The Art of Investing in Art).

32
new tools
by: Lucyna Baca-Lönn
the founder and Director of Graphology Solutions Group
Graphology
as a solution
in recruitment processes
Graphology is the study of the psychological structure of a human being
through his or her handwriting. Graphology is a social science and depends
on research and experimentation. Graphology is an organized and systematic
search for knowledge having, as a target, the discovery of the truth...says
Renna Nezos in her book “The interpretation of handwriting”.
Experience proves that graphology
analysis is an effective and reliable
tool in assessment processes
within Human Recourses Departments.
Graphology opinions support
recruitment processes and assess a candidate’s
adequacy for a specific position in a
company. Graphology is the unique and
professional assessment of the personality
profile, which helps executives make right
choices in personnel selection processes. It
is a precious method which combines the
comfort of the graphology analysis for the
customer with its high assessment effectiveness.
A personal touch of handwriting
provides stunning insight into the person’s
psyche and life situation.
Graphology analysis has a structure and or-
der. The graphology portrait of a candidate
is prepared according to knowledge based
on research and experimentation. It includes
the assessment of key personality elements
in the area of intellect, emotivity, activity
and adaptation skills of a prospective
employee. Graphology analyses enable to
discover and assess key personality elements
such as the ability to give and take orders,
to keep cool under pressure, to work with
others, adaptability, ambition, attention to
detail, authority, clarity of judgment, clarity
of thinking, common sense, communication,
concentration, confidence, consistency,
creativity, critical mind, decisiveness,
dynamism, extroversion, equilibrium, goal
orientation, harmony, imagination, independence,
introversion, logic, motivation,

new tools 33
organization, originality of ideas, practicality,
reliability, sense of priorities, speed of
thinking, stability, tenacity, suppleness of
mind and many other personality traits of
the person being assessed. It provides a deep
and thorough assessment of a candidate for
a specific position in a company. Professional
graphology analyses apply findings of
Jung, Hippocrates, Le Senne, Freud, Adler
and other well-known psychologists.
When to apply graphology analysis?
Questions concerning the selection of
the key personnel are pure management
functions. Graphology findings effectively
support executive decisions in the final stage
of the personnel selection process, when 3-4
applicants are short-listed by the selection
committee. Practice shows that graphology
assessments, by advising the strengths and
weaknesses of prospective candidates, give
the most effective support to the selection
committee at this stage of the recruitment
processes. Graphological opinions
lend support to the personal evaluations
of the members of the selection committee,
complement or question them. They
observe and judge applicants from different
angles showing their values and shortages.
Graphology analysis is a decision-making
tool which provides a differentiated view of
the candidate’s personality.
Reason of applying Graphology Analysis in
companies:
Accuracy-graphology analysis allows an
assessment of personnel profiles with an
accuracy of 95 per cent, which generates
substantial economical value to companies.
Adequate personnel selection decisions
make companies grow and develop. Graphology
assessment is a method of a remote
personality analysis, which reduces additional
costs for the companies. Comfort in
terms of no need for direct contact between
a graphologist and the client and easy access
to graphology analysis are the advantages of
graphology opinions. There is anonymity,
which gives us a sense of security and privacy,
essential when making an assessment
of key personality elements.
Graphology with a long and honourable
history, going back to ancient China and
Egypt, is a respectful and effective tool
in personnel selection processes within
companies. Graphology opinions are a
valuable and effective decision-making tool,
which support top executives in choosing
appropriate key personnel with minimum
risk. Graphology findings clearly assess what
added value brings a prospective candidate
for a specific position within a company.
Such in-depth graphology analyses allow
to arrive at well-founded conclusions in
recruitment processes. I strongly recommend
graphology opinions as an effective
decision making tool in personnel selection
processes. Graphology findings guard
precious human abilities of handwriting
and its skillful interpretation in our highly
technological reality…

34
NEws from the british embassy
Sustainable
management
– UK expertise
The British Embassy in Warsaw organised
a seminar on sustainable urban
development on the 7th of December.
The main purpose of the event was to showcase
UK expertise in the development of modern
eco-towns and low carbon metropolitan centres,
presenting a range of case studies on how modern
approaches and techniques can mitigate the
effects of climate change.
Eighty Polish delegates - representatives of
Polish local and regional governments, architects
and urban planners – attended the seminar.
Sports Sector
Roadshow
December 2010
Liz Basing (UKTI Warsaw) and Lyudmyla
Bychyk (UKTI Kyiv) travelled to Belfast,
Birmingham and London before Christmas,
meeting companies interested in opportunities
around the Euro 2012 football
championships. Though the main stadium
contracts are well under way there is still a
huge amount of interest from UK companies
in all kinds of downstream sports business
UK experts from public and private sectors
shared their experience of successful sustainable
solutions adopted in cities across the UK and
internationally.
The seminar provided an excellent opportunity
to establish initial collaborative links between
the UK experts and Polish authorities dealing
with urban planning.
Following the success of the seminar, the British
Embassy in Warsaw is organising another event.
This time dedicated to sustainable flood risk
management. The area is of particular importance
to Poland as it is required to implement
the Directive 2007/60/EC on the assessment
and management of flood risks by 2015.
The seminar ‘s aim is to share the best UK
practice in flood prevention. The date of the
seminar is the 22nd of March 2011. For further
information on both seminars please contact
agnieszka.szweda@fco.gov.uk
and “extras”, from club-branded booster seats
for tiny sports fans to ongoing management
of playing surfaces and companies who can
dress a whole city to celebrate its participation
in a major sporting event. Liz and
Lyudmyla each met well over 20 companies
in three cities and are following up now with
businesses who need information or partners
for the Polish and Ukrainian markets. To
find out more about the UK expertise in all
aspects of the sports sector, contact
liz.basing@fco.gov.uk
or malgorzata.hoffmann@fco.gov.uk .
UKTI Warsaw
at Medica 2010
Trade Fair in
Dusseldorf
Mariola Biedrzycka, Trade & Investment Adviser
at the UKTI Team Warsaw visited Medica
International Trade Fair in Dusseldorf on 17-19
November 2010.
Mariola met over 30 UK companies during her
visit, learning about their needs and concerns
when considering exporting into the Polish market.
UK companies in turn were able to share
Mariola’s market and sector knowledge and hear
about the UKTI services that could help them
win business in Poland.
Mariola said: “I am happy to be able to bring
Poland closer to UK companies. We are already
talking to one of the companies about a research
project and we hope to help more businesses
benefit from opportunities in Poland over the
coming months”.
IBIZ 2011
– UK excellence
and innovation
in Life Sciences
UK Trade & Investment invites
innovative companies from Poland
to join IBIZ 2011 – the International
Business Innovation Zone.
The UK’s Healthcare Innovation EXPO will
be held on 9-10 March this year in London.
IBIZ is a unique opportunity for international
businesses to find partners in the UK
and see the best of UK innovation in the Life
Sciences sector. Over 300 UK biotech and
meditech companies will use IBIZ to arrange
meetings with 100 international partners
from 31 countries.
The Healthcare Innovation EXPO will
attract up to 10,000 UK private and public
sector healthcare professionals, making it an
exceptional networking occasion.
More information about the event is available
on http://www.ibizlifesciences.com or
from mariola.biedrzycka@fco.gov.uk.

advertorial 35
Settlement of investments
co-financed
with EU grants
Companies that decide to implement their investment plans with the
participation of EU funds mainly concentrate on the first phase of the process,
i.e. preparation of the application documentation and obtaining the grant,
applying significantly less attention to the realization of the investment
according to EU regulations.
Kamila Jabłonowska
Department of EU Settlement Manager
ABBEYS Europejskie Doradztwo Finansowe Sp. z o.o. Sp.k.
When the co-financing
contract is signed and the
time comes for the first
request for payment, they
often realize their unpreparedness
and lack of know-how. Whereas
this is only one of the many aspects which
one ought to see to when wanting to correctly
settle the received grant.
Practically for every investment cofinanced
with EU grants, the critical
area in which transgressions most often
appear, is the execution of the quotation
procedure and the choice of the optimum
offer. Shortcomings in this area are the
most frequent reason for EU contract
termination. However the list of possible
irregularities is long. Amongst them the
most common are: commencement of the
investment before the eligible period or the
incurrence of expenses after its end date,
inobservance of binding terms, not informing
the Implementing Institutions about
changes introduced into the project, lack of
or improperly managed separate accounting
records, payment of non eligible costs
from the advance payment or its incorrect
settlement.
While financial documentation is subject
to detailed verification with each request
for payment, allowing the correction of errors
au courant, many issues that determine
the proper settlement are verified only during
the control at the site of the investment.
If irregularities are of minor importance,
for example the lack of an information bill-
board at the site of the project, they can be
removed in compliance with post control
recommendations. In this case the only
consequence for the company is the delay
in receiving the payment or a short term
loss of financial liquidity. However some
irregularities can result with a recognition
of part of the costs as non eligible, and
at worst may result in termination of the
subsidy contract and a need to return the
granted subsidy.
The realization of projects partly financed
with EU funds is problematic also to those
companies which have some experience
in the area. This results mainly from
numerous changes in operative regulations
or from lack of their clear interpretation.
Situations when institutions directly cooperating
with beneficiaries (e.g. Regional
Financing Institutions) do not inform
companies about new recommendations or
guidelines issued by supervising institutions
which, though they have the character
of internal documents, influence the investment
implementation, are also frequent.
Implementation of EU projects is not easy,
however if conscious of EU requirements
one can eliminate most problems before
they appear. Often compliance with several
basic principles, like entering the full invoice
number for which the payment is made in
the title of the bank transfer, permit avoiding
submission of additional declarations and
explanations whose preparation lengthens
the payment approval. If, however, the company
decides to settle the EU investment on
While financial documentation is subject
to detailed verification with each request
for payment, allowing the correction
of errors au courant, many issues that
determine the proper settlement are
verified only during the control at the
site of the investment.
its own, it is advisable to employ an external
consultancy firm before the control at the
site of the investment. Such a company can
carry out an internal audit, evaluate the project
consistency with all requirements subject
to control and prepare the project documentation.
It can also participate in the control
and represent the company during the audit.
In this case the experience and know-how of
the consultancy firm in the field of national
and EU rules and regulations and the technical
knowledge of the company guarantee
a correct and effective settlement of the
project.

36
news from the polish embassy
Regulatory response to the crisis:
too big to fail
Crises and financial regulation
Banking crises remain a major manifestation
of financial instability. On average
in OECD countries they happen every
15 to 20 years, which gives an annual
probability of 5-6 per cent, and the
average effect of a systemic banking crisis (as the
recent sub-prime crisis) on the sustainable level
of output amounts to about 4 per cent of GDP.
To strengthen the resilience of the banking system
to financial instability, financial regulation
accords from Basel I to Basel II to recent Basel
III have been designed, defining a capital (and
liquidity) framework of operation for banks.
Research shows that, indeed, regulatory factors
such as capital and liquidity ratios (together
with rising house prices, and current account
deficit) are among the main crisis predictors
in OECD countries and their increase may
significantly reduce the probability of a crisis.
Research also shows that not only the quantity
but also the quality of capital, as well as a banks’
size affect bank risk taking and the susceptibility
of the banking sector to a crisis.
Basel III has already defined new liquidity and
capital standards (both in terms of its quality
and quantity) for banks and one of the issues
that still needs to be resolved is how to deal with
institutions which are too big to fail.
Support for the financial
sector during the crisis
The crisis which hit the world in 2007 and was
followed by a severe recession was the worst
since the crash of 1929. It did not result in a
new Great Depression only because there were
unexceptional policy responses taken which
prevented a collapse of the banking system.
The scale of support given to the banking sector
was unprecedented. Paraphrasing W. Churchill,
M. King said that “never in the field of financial
endeavour has so much money been owed by so
few to so many”. Over October 2008-October
2010, the European Commission approved
state aid measures to the financial sector in 22
member states of €4588.90 billion, although
the amount actually used was €1106.56 billion
(9.3% of GDP) in 2009 and €1236 billion
(about 9.9% of GDP) in 2008. The bulk of
support came in the form of state guarantees,
however, large amounts were also assigned to
ad hoc interventions to individual financial
institutions through recapitalisation, asset relief
interventions, etc. The size of the required
interventions revealed that the previous system
of regulation of the banking sector required
major amendments. As argued by S. Cecchetti,
left with their own devices, banks held too little
capital and too little liquidity. Lower capital and
less liquidity gave banks higher returns in good
times. However, lower capital and less liquidity
also implied higher risks in terms of unexpected
loan defaults and sudden funding withdrawals.
The crisis has shown that the upside of the risks
belongs to the banks’ shareholders and managers
while a sizeable part of the downside risk is
borne by taxpayers. To address the inadequacy
of the previous regulatory framework several
measures have already been introduced under
Basel III. The key features of the policy are higher
capital and liquidity ratios across the banking
system, better quality capital, countercyclical
capital buffers. The impact of the new capital
requirements on GDP is estimated to be small
and a 1 percentage point increase in capital and
liquidity ratios are expected to reduce output by
merely ¼ per cent.
Addressing the too big
to fail problem
One of the critical issues that still require a
regulatory re-design, remains how to deal with
systemically important banks, that is banks that
are too big and too interconnected to fail, or
rescue.
There is no “silver bullet” to address the problem
of banks being too big to fail, as pointed out by
dr Tatiana Fic
National Institute of Economic and Social Research, London
National Bank of Poland, Warsaw
A. Turner, instead the answer lies in a combination
of policies. Several solutions are being
considered:
• from the perspective of microeconomic
incentives, discussions concentrate on the moral
hazard problem. A failure of a large and highly
interconnected bank generates serious systemic
risks. This produces an expectation that, if a big
bank fails, it will be bailed out. Our research
shows that larger banks tend to make larger
charge offs in relation to their total assets. This
may reflect either a loss of managerial control, or
a reliance on being bailed out. Beyond certain
size it is optimal for banks to hold more poor
equity capital and take more risks to ensure bail
outs. Basel III states that large banks should
have loss absorbing capacity beyond standard
requirements.
• from the perspective of microeconomic
structural policy, the UK Banking Commission
is considering whether large banks should
be broken up. There is also an issue of high
volatility of investment banks profits and their
appropriate business model.
• from the perspective of macroeconomic
policy, the matter of too big to fail concerns
costs of bail outs and tax schemes. C. Cottarelli
argues that banks should contribute to the
system which rescues them during crises.
• from the perspective of international supervision,
the FSB suggests that for each global
systemically important institution there should
be institution-specific cooperation agreements
between its home and host authorities. This
might help to deal with global systemically
important institutions that, as observed by Ch.
Goodhart, are international in life but national
in death. To recap, there are various policy
options being considered to tackle systemically
important institutions. Time will show which
policy mix will prove optimal.
Views expressed in this note are those of the author
and not of the institutions she is affiliated with.

advertorial 37
the most attractive land
for business use
Kępa Mieszczańska is the dream land for investors. It is situated in the centre
proper of one of the most thriving cities in Poland
The property is located within a
5-minute walk, along a pedestrian
street, from the city square and
from the buildings of the University
of Wrocław. The north border
of the property is marked by a fork of the
River Odra, while the south border by the
Mieszczańska and Dmowskiego streets.
The property is in close proximity to areas
with services, a large sports hall and office
buildings. Another advantage of the Kępa
Mieszczańska island is its convenient transport
links to other parts of both the city
and Poland. The existing bridges and roads
leading out of the city give drivers easy
access to Warsaw and Poznań. The Kępa
Mieszczańska property can be extensively
adapted for business use.
The Military Property Agency is in active
talks with the city government to ensure
that a land use plan is adopted for the area
of Kępa Mieszczańska. Possible land uses
for the area of the property include use for
multi-family residential buildings, retail,
foodservice and entertainment, cultural facilities,
office buildings, tourist services and
education, including higher education. If
the plan is adopted by the city government,
the area of the property can also be used for
health care, trade and exhibition services,
production, sport or recreation activities -
as the so-called “accompanying functions”.
In 2010, the Wrocław local branch of the
Military Property Agency applied to the
local government of Wrocław to include, in
their document called “a study on land use
conditions and directions”, the possibility of
constructing high-rise buildings in the area
of the property.
After it is adopted by the city government,
the new land use study for Kępa
Mieszczańska will attract more investors to
this unique property. In accordance with
the study, the 12 hectare area of the property
is divided into 30 plots of land that will
be offered for sale. Once the land division
procedure is complete, the first plots of land
on the Wrocław island will be put up for
sale in April 2011. With its great potential
for business use, the Wrocław island can
become a real “treasure island” for prospective
investors.
www.amw.com.pl.
Details of the properties now available
can be found on the Agency’s website

38
advertorial
Combine learning
with pleasure
As an official representative of several dozen foreign
language schools, every day I deal with customers with
increasingly varied and very specific needs as far as learning
foreign languages is concerned.
Maria Karwowska
AM Consulting & Education
Przedstawiciel Zagranicznych Szkół Językowych
Spanish school Malaca Instituto
Today, every professional wants to
use a foreign language in a way that’s
adequate for his or her position,
i.e. correctly, fluently, easily and
professionally, knowing what phrases
or expressions should be used in a particular
situation.
Obviously, this can be achieved through hard
work for many years on language courses in the
student’s home country. However, the student
can achieve perfection much faster and much
more effectively by learning the language in its
natural linguistic and cultural environment.
Today, language schools in the UK, Germany,
France, Spain, Russia and many other countries
compete with each other in designing the most
effective and most attractive language courses
that virtually every professional would find as
useful, pleasant and interesting as possible.
Foreign language schools offer an increasingly
varied range of courses suited to the individual
needs of their customers, from customised
one-to-one courses with content and intensity
designed to suit the needs of a particular person,
to learning in small groups of a few students, to
standard group courses (a dozen or so people
per group). Another option is individual courses
with the student living in the teacher’s home.
The teacher provides the student with intensive
one-to-one tuition plus a custom-prepared cultural
programme that includes trips, excursions,
sightseeing tours, etc.
Course intensity ranges from 3-4 to 6-7 lessons
daily. All lessons are varied to help keep
the student(s) focused and make the most of
the student’s potential to develop his or her
language competence comprehensively, from
a knowledge of the grammar of the language
to the ability to use the foreign language in
conversations.
Some schools specialise in offering courses
designed specifically for diplomats and
other people in high places – such schools have
provided language tuition to prime ministers,
ministers, parliamentarians, corporate presidents
and directors.
Courses offered by such schools often combine
general with professional language (e.g. the
language and skills of negotiation or presentation).
There are also courses for secretaries,
engineers, pilots, or people working in the hotel,
foodservice or tourist industries, etc.
If you would like to study at a foreign college or
university, you should be well prepared for the
challenge. There are language exam preparation
courses (such as ELTS, CAE, TOEFL, DELE
and other). There are also courses designed to
prepare the student to study at a college or university
abroad, where the students not only learn
everyday language, but also acquire academic
language skills, including academic writing skills
and other skills necessary to study at a college or
university in a particular country.
Language summer camps for children and teenagers
usually offer 20 language lessons weekly
combined with sightseeing and leisure activities,
plus a host of tourist and sport attractions.
We also offer courses for mature adults (over
50), covering a varied programme of social and
cultural activities.
The most convenient solution is always one that
combines learning with pleasure – you can learn
a foreign language and enjoy sunshine, water
and mountains as well as other various forms
of active recreation in the natural linguistic and
cultural environment of the foreign language of
your choice.
Do you dream of learning a foreign language
“painlessly” and effectively in the country
where the language is used, combined with the
pleasure of visiting places of interest, learning to
dance flamenco or salsa, savouring the tastes of
a foreign cuisine, visiting distilleries in Scotland

advertorial 39
and tasting whisky, enjoying social events,
barbecues, a game of golf or tennis, horse riding,
swimming, diving, experiencing the thrill of
rock climbing in ravines, or practising football
under the watchful eye of a professional Glasgow
Rangers coach? If your answer is ‘yes’, let
your fantasy and dreams become a reality! Start
planning your language-learning trip today!
We can arrange a language course abroad for
you, suited to your needs. Save your time and
have us handle all the arrangements!
Business Profile:
• We are an official representative of foreign
language courses.
• We offer language courses in many countries:
the United Kingdom, the United States,
Canada, Australia, New Zealand, Malta,
the Canary Islands, Spain, Latin America,
Germany, Austria, Switzerland, France, Russia
and other countries.
• We offer standard and all kinds of specialist
language courses.
• We offer comprehensive customer service and
a fully flexible approach to the needs and our
customers.
• We do not charge any additional commission
– our prices as are stated in the price lists
of the language schools we represent.
• We can arrange a language course abroad for
you - save your time and have us handle all the
arrangements!
• You make the choice! It’s up to you where,
when and for how long you will go!
All kinds of language
courses are available:
• general language courses or specialist language
courses (business, marketing, commerce,
the hotel industry, banking, law, medicine,
engineering, aviation, etc);
• total immersion courses in the natural linguistic
and cultural environment of the language
of choice, e.g. living in the teacher’s home;
• courses for children and teenagers, language
summer camps;
• courses for mature adults (over 50);
• language teaching methodology courses for
teachers;
• language exam preparation courses (IELTS,
CAE, TOEFL, DELE and other) and courses
preparing students to study a foreign college or
university;
• courses + sightseeing, horse riding, golf,
tennis, surfing, diving, learning to dance
flamenco, tango, salsa, etc.including its culture
and operational
AM Consulting & Education
– LANGUAGE COURSES ABROAD
Ul. Zubrzyckiego 3
05-510 Chylice
Phone: 22 754 00 00, 668 599 537
E-mail: amcons@amcons.edu.pl
www.amcons.edu.pl
Krzysztof Rezler
Director, Advisory Department
Mazars
As a result of markets decline
taking place in 2008 many
organizations and investors
experienced material losses and
significant setbacks. Financial
crisis triggered numerous
discussions on re-evaluation of
investment philosophy.
The author can be contacted at k.rezler@mazars.pl
Due Diligence
An Acquisition Necessity
A
t the same time, the market
meltdown intensified the number
of opportunities for investments
around the globe as many
organizations slipped into financial
troubles. They may represent an attractive target
for acquisition due to the specifics of their business
and attractive price already discounted by
local distressed market. Many businesses have
already started to incorporate these lessons into
their strategies and begun looking beyond their
borders for growth opportunities.
Still entering new markets, especially in
challenging economic times, involves additional
risks. Therefore completing detailed
due diligence of the company anticipated as
target for acquisition is a must. Effective due
diligence provides much broader insight into
company operations, the overall quality of its
business including its culture and operational
philosophy. The purpose of due diligence is as
much as to assess the risks associated with the
company and prospective acquisition as it is to
identify outright fraud. In these circumstances,
it is needles to say that judgment is critical in
due diligence process. Careful due diligence is
required and investors should emphatically not
assume that top-tier management will always
provide best results.
Due diligence is also critical when selecting
partners, subcontractors or agents abroad. Investors
should do thorough background checks
of anyone who represents them in business
negotiations abroad. That involves having a
consultant with experience in the country in
question taking a hands-on role in vetting any
prospective agents.
It is impossible to eliminate all risk when doing
business abroad but without a question, due
diligence is worth its weight in gold.

40
after hours
by: Marzena mróz
Skiing with
a seaview
Skiing down snow-capped slopes of the Tatry Mountains,
Alps or Carpathians is already a relic of the past. This winter
season, enthusiasts of winter sports, powdery snow and
breathtaking speed are heading for Spain, Argentina and
Chile. Not afraid of the conflict in the Middle East, they’re
ready to schuss down the mountains in Turkey, Lebanon or
Oman. After all, what matters the most is the pleasure of
skiing in a new, exotic place and the spine-tingling feeling
one gets at the sight of difficult ski routes.
In Spain, a country usually associated with
summer holidays, great beaches, corridas
and flamenco, skiers can enjoy almost a
thousand kilometres of perfectly prepared
ski runs. Solynieve, is Europe’s southernmost
ski resort, situated in the picturesque Sierra
Nevada mountain range. Since the slopes of
Sierra Nevada hosted the Alpine World Ski
Championships in 1996, the ski routes there
have met the expectations of even the pickiest of
skiers. Another advantage of the area is that you
can ski down its over 3,000 m high snow-capped
mountains straight onto one of Spain’s most
beautiful and hottest beaches, namely Costa del
Sol. Lovers of much smaller and more gentle
slopes in the Spanish Pyrenees found, that in the
region’s most popular ski resort called Alp 2500,
which is equipped with 31 ski lifts and offers
111 kilometres of ski runs, they can go for a stroll
along the sea shore in the Costa Brava area after a
day spent on skiing.
In Uludag, a ski resort that’s just a 90-minute
drive from Istanbul, the skiing season lasts 5
months. The highest mountain is 2,543 m above
sea level, and only 14 ski lifts take skiers up to a
station located 2,000 m above sea level. A region
much more popular with enthusiasts of extreme
sports is Palandöken, located near the border
with Armenia and Iran. With its over 3,000 metre
high mountains, wide open spaces and fresh
powdery snow so typical of the area, the place is
becoming increasingly popular with skiers.
Chile, a country that boasts the longest mountain
range in the world, is steadily becoming the
skiing mecca of South America. The most famous
ski region of the Andes is Portillo, located
180 km away from Santiago, which is a relatively
short distance as for this part of the world. The
ski slopes of Portillo, rising to the heights of over
3,200 m above sea level, command a view of
Aconcagua, the highest mountain in the Americas,
which rises up the height of 6,960 m above
sea level and which is considered as a romantic
and, perhaps therefore, inaccessible mountain.
The area abounds in the newest-generation ski
lifts, while its routes are not considered of the
highest level of difficulty. It is the perfect starting
point for heliskiers transported by helicopter
to the most beautiful and remote yet skiable
high-lying mountain sites. Once you get there,
accompanied by a guide and condors flying
above the snow-capped slopes, you can ski down
until you’re ready to drop, schussing down a difficult,
virgin area.

after hours 41
Heliskiing has been practised for
as long as 35 years and, from the
very beginning, was considered
as an alternative for the most
demanding skiers
Pradollano Ski Resort in Sierra Nevada, Spain
In Lebanon, a country usually associated with being
a hotbed of conflicts in the Middle East, you
will find the most popular ski slope in this region
of the world. It’s called Faraya-Mzaar and is
situated 30 km away from Beirut. The area offers
80 kilometres of ski routes and 20 ski lifts that
carry skiers to the height of 2,460 m above sea
level. The Cedars ski resort, in Lebanon, where
gondola ski lifts take skiing enthusiasts to a hostel
located at the height of 2,870 m above sea level,
will play the role of the host to Asian Ski Championships
this year. An additional attraction of
skiing in Lebanon is the incredible view of the
sky blue waters of the Mediterranean Sea that can
be enjoyed from the highest mountain tops.
Who says that skiing or snowboarding is just
about using only marked-out and colour-coded
routes and queuing up waiting for your turn to
use a ski lift? More and more winter adventure
seekers change their old habits and choose to
try new, or rather old but forgotten, winter
sports. These include ski-alpinism. Compared
to ordinary skiers, enthusiasts of this sport have
the advantage of, for instance, not having to
queue in a crowd of people for a ride up using
a ski lift. Instead, on a sunny morning, they
head for a mountain top, carrying their skis on
their shoulders. They choose mountain paths
located far from tourist trails, busy ski runs and
trodden slopes. Their passion is a combination of
alpinism, i.e. climbing, often in difficult conditions,
using an ice axe and crampons, and the
pleasure of hiking and skiing in the mountains.
Ski-alpinism, also known as ski mountaineering,
is – so to speak – a return to the roots, to the
time when people reached the top of a mountain
without using any equipment, such as a ski lift,
and then skied down on fresh snow, marking out
a new route. In addition to the adrenaline thrills
and professional nature of the sport, ski-alpinism
enthusiasts appreciate the unique opportunity
for a face-to-face encounter with overwhelming
mountains.
Those more comfort-loving and
better-off lovers of extreme winter
sports reach the difficult mountain
tops by means of snow scooter or
helicopter. This sport, known
as ski touring, doesn’t usually
involve climbing, and is practised
in conditions where
your life, or at least your
health, is at risk. Ski
touring involves
schussing down
a virtually vertical
slope covered
with snow and ice.
Those who go even
further in seeking the
extreme thrills of winter
sports, choose areas that are
particularly dangerous, full
of rock crevices and faults,

42
after hours
or – out of their own free will - choose to ski
away from an avalanche chasing them – these are
lovers of a sport known worldwide as freeriding.
This word best describes what these people are
feeling while skiing down – absolute freedom
and the unique feeling of doing so without any
limitations.
Heliskiing (or helicopter skiing) has been
practised for as long as 35 years and, from the
very beginning, was considered as an alternative
for the most demanding skiers. The first heliskier
was Hans Groser, an Austrian mountain guide
and instructor, who offered his best-skiing students
a ride in a kind of a mountain taxi, namely
a helicopter. Helicopters took and still
take professional skiers to the most
remote, inaccessible and beautiful
mountain sites. The first heliskiing
ride took place in Bungaboo, Canada.
”Thanks to a helicopter, you can ski
down almost any mountain,” says
Marcin Reszko, a heliskiing enthusiast
who has been skiing for years. A
helicopter helps us to ski down routes
that have never seen a snow tractor.
We never use ski lifts and never queue
for a ride up one. The feeling of skiing
down a mountain that’s inaccessible
to an average man or woman in the
street defies description. Perhaps
“heavenly” is the only word that can
describe the way you’re feeling while
skiing down a virtual slope lit by the
rays of the mountain sun.
For a feeling of unlimited freedom,
try snowkiting, a sport that requires
not only mountains, but especially
wide open spaces covered with snow and ice, and
– what is very important – a particularly exposed
and windy site. If you want to go snowkiting, you
need a snowboard or a pair of skis for slope skiing,
plus a special harness and a parachute-kite to
take you up. With this equipment, you’re ready
to glide in the sky to finally touch down on the
top of the most beautiful slope and, marking out
a new route, ski down as fast as you can.
Fat-skiing, also known as powder skiing, means
skiing on powder snow. This pleasure is available
only to those adventurers who are ready to mark
out their own ski routes. Enthusiasts of this sport
compare the feeling of powder skiing to the pleasure
of “floating on slopes in three dimensions”.
The high slopes of the Swiss Alps are a mecca
of extreme winter sports. In the famous town
of Verbier, which is the main resort of the Four
Good to Know:
• The oldest image of skis can be seen in rock
paintings that date back 5,000 years, found
in Roloy, Norway.
• The oldest preserved pair of skis was found
in Hoting, Sweden. They are only ... 4,500
years old.
• The first pair of skis for sport use was
produced in Italy, in 1867, and was made of
wood.
Fat-skiing,
also known as
powder skiing,
means skiing on
powder snow.
This pleasure
is available
only to those
adventurers who
are ready to mark
out their own ski
routes.
Valleys ski area, situated in a depression sheltered
from the wind, you can practise your favourite
version of skiing, from ski-alpinism, which is
popular in this region, to heli-skiing. Chamonix,
shadowed by the giant Mont Blanc, is the French
town that hosted the 1st Winter Olympic
Games and still is one of the world’s best-known
ski resorts, attracts enthusiasts of freeriding and
snowkiting. However, skiers truly addicted to the
adrenaline thrills of skiing say that the only place
to go for a real challenge are the mountain slopes
of Canada.
The dream destination of any extreme skier is
Vancouver, a city situated on an ocean coast, at
the foot of a mountain range, where
temperatures stay above freezing
even in winter. Vancouver is only a
90-minute drive from Canada’s two
best-known ski resorts: Whistler
and Blackcomb, famous for catering
the most sophisticated skiing needs
and expectations. Seven Heaven,
a famous ski route running in the
area, is the best example of the skiing
experiences offered by Canadian
slopes. Another part of Canada that
is associated with extreme sports are
the Rocky Mountains, which are
part of the Pacific Cordillera, a 8,000
km long mountain range. The most
famous mountain glaciers, offering
winter attractions also in the summer
months, include Angel, Columbia,
Bugaboo and Wapta.
According to Robert Grzybowski,
the owner of a travel agency Discovery,
located in Warsaw, if you want to
practise winter sports, you must meet two basic
conditions. The first condition is perfect physical
fitness, while the second is a lot of money. The
cost of a one-week heliskiing experience on the
virgin mountain routes in Chile is at least 13,000
US dollars.
A sport that’s perhaps not extreme but definitely
eccentric, and practised for a few years already,
is golf on ice. World ice golf competitions take
place on the vast areas of Greenland. Reportedly,
the rules of the game are the same as those in traditional
golf. The only difference is the colour of
the ball – the traditionally white ball is replaced
with a colourful one, and the holes are twice the
normal size. Ice golf players are, also reportedly,
transfixed by the silence that can be found only at
the ends of the world, interrupted by the howling
of malamutes, samoyeds and huskies.

after hours 43
BMW