BCC Paper No. 36

British Chamber of Commerce Didzioji 5, LT-011128 Vilnius, Lithuania

Spring 2011

This BCC paper issue is kindly sponsored by

R E A L E S TAT E

issue No. 36

Violeta Klyvienė

Jonas Kisielius

Hugh Thomas

Real Estate market aims for stabilisation

Rental market Vilnius, bread and butter or just toast

Brits in Lithuania.

A Dream Comes True

page 4

page 4

page 10

Signs of rationality appear on the Lithuanian real estate market Vytas Zabilius

General Director, Ober-Haus

The year 2010, that has just ended and the year 2011, that has just begun, cannot be described in black or white terms - meaning that the market has stabilised. Those who have learned the lessons of the crisis have earned the highest points. Those who have not are bound to repeat their mistakes. Those who have made the right conclusions will dance a meaningful tango, and those who have not will only entertain themselves with the polka...

No matter what, prices are rising Data from Ober-Haus Real Estate Advisors shows that in 2010 apartment prices in the main Lithuanian cities (Vilnius, Kaunas, Klaipėda, Šiauliai, and Panevėžys) dropped by 3%. In 2009, the drop was 26.8%. In February 2011, the value of the Ober-Haus Lithuanian apartment price index (OHBI) showed that apartment prices in Lithuania remained stable.

However, residential property prices have begun to increase in some new construction projects. These price trends are seen in the economy and medium class residential projects with smart, high quality solutions. Some of these projects, which have received considerable attention from potential buyers, have increased by as much as 15%.

over LTL 10 million involving Russians and Belarussians. Considering the attractive prices of real estate, not only in Lithuania but also in Latvia and Estonia, we can confidently state that the interest of Russian, Belarussian, and other Eastern European countries in the Baltic real estate markets will continue to grow. Russians and Belarussians normally invest in leisure and luxury property, while also valuing highquality economy class housing. Recently, rich buyers from Eastern Europe have purchased very expensive properties in Vilnius, which during the two years of recession did not receive any attention from Lithuanians. Our neighbours purchased both premium class houses for LTL 3–4 million and apartments for the pre-crisis price of LTL 10,000 litas per sq. m.

The emergence of a new type of buyer The evolving market has changed the behaviour of buyers. Prior to the crisis the concept of rationality was hardly seen in the house buying process. Today, the market, which has become more rational itself, forces buyers to be more selective, quick-witted and patient in assessing their decisions. In statistical terms, the highest demand this year is for economy class housing which is characterised by economical maintenance and is located in peripheral quarters.

The average amount which buyers are prepared to spend on real estate today is LTL 200,000–300,000.

Most of the activity in the real estate market this year has come from foreign investors. There has been noticeable interest on the part of Russian and Belarussian citizens in Lithuanian residential property. Ober-Haus experts have helped in sales valued at

The Attitude of banks is becoming less strict Vytas Zabilius, Director General of Ober-Haus, voiced the following opinion in January 2009: ‘In early 2010, we will see a more favourable attitude from banks towards the real estate market, stock exchanges, and other methods of investment’. This forecast has proved to be correct: while in early 2010 only one or two banks were active in granting loans to those wishing to purchase a house, now we can see that the other banks in the country have become more active and are more competitive in their fight for a more extensive loan portfolio.

Lithuanian banks have already considerably improved their conditions for granting loans for the purchase of housing.

Interview with Ambassador Simon Butt

continued on page 3 >

In The Service of his Country

Managing Director, Europe St Andrew Square Capital

As British Ambassador to Lithuania, Simon Butt, nears retirement from the Foreign Office, we would like to take this opportunity of thanking him for his efforts. His support of the British Chamber of Commerce in Lithuania has been unprecedented and he takes the gratitude of our members with him.

You were Educated at which University?

I was at Oxford University, New College – although actually we celebrated the College’s 600th birthday while I was there! It was a very happy time and quite a few of the people I knew there are now prominent in politics, the media, the law, business and other fields.

Could you tell us something about the time you spent writing speeches and for whom did you write?

I wrote speeches for three successive Foreign Secretaries: Sir Geoffrey Howe, John Major and Douglas Hurd – in the late 1980s. But I was also asked to prepare

Amit Majithia

speeches for other Foreign Office Ministers, and, occasionally for Prime Minister Margaret Thatcher – although these were usually worked over by her office. The themes mostly concerned East-West relations at a time of great change in the Soviet Union and Eastern Europe, and the EU. But I once was asked as a favour to write a “light” one on British fashion for an international meeting of Parliamentary Speakers’ wives (for which I sought help from a well-dressed female colleague). One that I was most pleased with was one of the shortest, delivered in Berlin at the ceremony to dismantle Checkpoint Charlie. continued on page 3 >

Lithuania has hopefully now seen the worst of the effects of the global financial crisis and the recession that followed. In the middle of 2009 the international press made much of the fact that between 2004 and 2006 Lithuania had one of Europe’s fastest growing economies, but that it shrank 22.4% in the second quarter of 2009, which at the time was the deepest contraction in any European Union country. Since then the government has undertaken a series of measures to correct the situation in a way which has even attracted the praise of the World Bank. Naturally, many of these measures have involved cutting back on public expenditure but crucially many have also sought to positively stimulate the economy.

Important examples of these policies are educational reform, in particular with regard to universities, and the program of initiating science and technology valleys which aim to be clusters of excellence in their fields.

This reflects the view of the government that Lithuania

Innovations is the Future for Lithuania cannot compete anymore as a low cost manufacturing alternative for western European countries, and that the future for Lithuania lies in the value that it can add through innovation.

However, even if Lithuanian universities produce the best graduates and the science valleys undertake the best research and development activities, if they cannot commercialise those ideas and raise capital for growth then the intended medium and long terms benefits to the economy will not be seen.

Lithuania is dealing with this to a certain extent with a planned seed fund, which would run alongside a European Investment Fund initiative to provide seed funding that is currently in the process of being implemented. These sources of capital will be crucial for start up technology companies that need relatively small amounts of capital to continued on page 4 >

BCC paper Spring 2011

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The news in Lithuania in recent weeks has been dominated by politics – perhaps inevitably, since on the economic front nothing very much is new as Lithuania crawls out of recession towards a long, slow recovery.

On the other hand, politics has been positively buzzing. We have recently had municipality elections and the results have been quite interesting. Overall the Homeland Union – Christian Democratic party (HU-CD) of Prime Minister Andrius Kubilius did not suffer quite the meltdown in votes that many anticipated, although they still lost a significant number of seats compared with four years ago.

At the same time the largest opposition party, the Social Democrats, whilst winning the most seats did not achieve the breakthrough in the major cities that they had hoped for. The Labour party did well, the Law and Justice vote remained stable.

In the post election horse-trading to identify who will actually be the Mayor in each municipality, we can observe a clear trend that the HU-CD is mostly isolated as the other parties form coalitions together without them. As I write it is entirely possible that there will be no HU-CD Mayor in any of the five largest cities. This is interesting in as much as it is a possible indicator as to what the next government of Lithuania will look like after the Seimas elections due in autumn 2012. It is entirely plausible that something similar will happen – ie that the HU-CD vote will hold up reasonably well but that working together, the other

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Chris Butler

parties will be able to form the government. Anyway, it is still a long way off and for now we wait with interest to see whom the new Mayors will actually be and what impact they will have.

At the national level we have also seen some interesting political events, particularly surrounding the Minister of Economy for the past two years, Dainius Kreivys. I think it is also fair to say that the foreign investor community is disappointed to see him go. Regardless of what he may have been guilty of doing, he was certainly the most active and innovative Minister of Economy that Lithuania has had during my time in Lithuania.

Foreign investors have appreciated his efforts to attract more investment to Lithuania and also his ministry’s attempts to shine a light on some of the state-owned businesses where transparency is lacking and to make them more accountable. My personal view is that the reform of the state-owned sector is not only long overdue but absolutely vital to the fight against corruption. I certainly hope that whoever succeeds Mr Kreivys will pursue the same agenda but his departure is certainly a blow.

Turning to the Chamber’s internal affairs, another two years have flown by and once again it is time for elections to the BCC Board. I certainly hope that as two years ago, we will have an election. Any organization such as ours must be in pretty good health if there are more people willing to get involved than there are available places on the Board.

I would like to end on an optimistic note. Prime Minister Andrius Kubilius declared some two years ago that the recession in Lithuania would end around about the time that Lithuania plays host to the European Basketball championships. Since this great event will take place in September this year, it seems that he was not far wrong.

For the BCC however, I dare to suggest that the recession has ended slightly sooner – this spring edition of the BCC Paper is entirely self-financing thanks to the increased levels of interest that we have seen from advertisers. I am extremely pleased by this development because it seems to me to vindicate the decision taken at the last AGM to continue to support the Paper even though it was loss-making.

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When contacting the companies, please indicate that you are a BCC member, provide your company name and BCC Membership Card number. For more detailed information about special offers & discounts please visit our website www.bccl.lt and click on a flashing banner. allocating up to 2 percent of his/her yearly personal income tax that has been withheld/paid throughout the taxable year.

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BCC paper is a free of charge newspaper of the British Chamber of Commerce in Lithuania, published 4 times a year.

It covers a variety of subjects related to the UK – Lithuania business, provides members news, introduces to new BCC members and provides a review of events organized by the Chamber.

The BCC paper is distributed at Vilnius International Airport, Kaunas Airport, main hotels in Vilnius, Kaunas and Klaipeda, travel agencies, restaurants, information and business centres, all BCC members, International Chambers in Lithuania, British companies interested in entering the Lithuanian market, the Lithuanian Government and trade organisations. Copies are also sent to the Lithuanian Embassy in London, UK Trade and Investment (the UK Government organisation which supports UK companies trading Internationally), British Chambers in the UK and Europe.

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BCC paper Spring 2011

3

R E A L E S TAT E

Signs of rationality appear on the Lithuanian real estate market < continued from page 1

The difficulty of making forecasts Statistical data shows that the year 2010, compared with 2009, was more favourable both for house sellers and buyers. Sellers were delighted with the increased buyer activity and significantly more stable prices, while buyers took an interest in the slowly growing supply (in particular in Vilnius), improving mortgage loan conditions, and housing prices which still remained fairly attractive. The stable prices, the first signs of recovery in the country’s economy and greater activity by banks in the housing purchase market are likely to determine that the real estate market in 2011 will be no less active than in 2010. We can assume that this year some definite signs of price increases will be recorded not only in Vilnius but also in other Lithuanian cities. Ober-Haus experts forecast that in 2011 housing prices are likely to rise by 5–7%.

Most attention is likely to be directed once again to economy class housing, which is characterised by economical maintenance solutions. High-quality real estate projects based on rational solutions and convenient locations can expect particular attention from buyers. It has already been observed that one of the main factors determining the success of a project is the existence of pre-established, welldeveloped social infrastructure.

Commercial property market: the scarcest supply of new projects for the past 10 years Summarising the activity on the Lithuanian commercial property market in 2010, Ober-Haus experts state that it was marked by record low prices in both property sales and rents, with particularly low overall market activity and the lowest number of new projects initiated for any year in the past decade. Nevertheless, regardless of the pessimism that still surrounds the market, the first positive changes in the commercial property sector were recorded in the first half of 2010: the number of modern offices left vacant in Vilnius stopped growing and a slight increase in rents in the class A office segment was recorded. Positive trends in the capital’s modern office market were also recorded in Q4 2010.

Statistical data from Ober-Haus shows that over the course of 2010 the vacancy rate for modern class A and B offices in Vilnius decreased from 17.7% to 9.9% and the total area of vacant premises decreased from 75,500 sq. m to 44,200 sq. m. The decrease in the vacancy rates was determined not

only by the new opportunities to rent or purchase premises for a very attractive price but also the absence of any new supply: in 2010, not a single new business centre was opened in Kaunas or Klaipėda.

In Vilnius, just one new business centre, Beta, with 20,000 sq. m of area available to rent, was introduced. On completion of this project, the supply of modern office premises in Vilnius increased to 447,000 sq. m, but this increase in supply has not had any negative impact on occupancy rates: to date as it has been fully leased.

Ober-Haus experts believe that the prospect of new business centres being developed in 2011 remains unlikely. Regardless of the considerably decreased rate of vacant office space available, we are unlikely to see any major developments in this sector in 2011. The significant quantity of premises available on the market will be one of the main obstacles to overcome for those attempting to attract investments towards the construction of new office buildings. It seems likely that this year we will see the completion of some of the projects currently in progress or the initiation of one or two built-to-suit office projects.

Office rents to increase slightly 2010 was a period of price stabilisation and even saw a slight increase. According to data from Ober-Haus, the cost of renting modern office space in Kaunas and Klaipėda did not undergo any major changes during the year; in Vilnius it increased by 10–12%. In the middle of 2010, with the decreasing number of vacant premises, the position of owners in the rent negotiation process started to solidify.

In the opinion of Ober-Haus experts, the shrinking amount of vacant office space and the decreasing supply are likely to be key factors that will determine growth in the rent levels of modern offices in 2011, which may be as high as 5–15%.

Shopping centres: losses for some and profits for others The supply of new retail premises in 2010 was very scarce. Only a couple of major new projectsthe Link Molėtų shopping centre in Vilnius and the Prisma hypermarket in Kaunas-were implemented in the main Lithuanian cities. These minimal developments in the retail sector are a natural response to decreased consumer activity. No major changes were recorded in 2010 with regard to shopping centre area per number of city residents in the main Lithuanian cities. Šiauliai continues to rank first

In The Service of his Country < continued from page 1

Ambassador Simon Butt making a speech at QBP in 2010

The shorter ones are often the hardest to write, but can have the most impact. Lincoln’s Gettysburg Address is a classic example.

From reading about you had rather an interesting experience in Pakistan, could you elaborate on this?

I was Deputy High Commissioner at our High Commission (Embassy) in Pakistan for three years before coming to Lithuania. Pakistan is an important partner for the UK, with over 800,000 people of Pakistani descent living in Britain. It was a very large mission with over 100 British staff, many of them

working in the Visa Section. Of course we had a high level of security and counter-terrorism and counterradicalism work occupied a lot of time, along with political reform and development assistance. The possibilities for travel became more limited while I was there, but I still managed to travel through the Khyber Pass to the Afghan frontier, to the Swat Valley and Himalayas further north and to historic cities such as Lahore and Peshawar. Among many memorable experiences some stand out – travelling by military helicopter to visit troops on the Afghan frontier combating the drugs trade; a visit to a remote mountain village that involved hours of travel over narrow trails and around ten suspension bridges hundreds of metres high; feasting with tribesmen whose ancestors had fought the British in the 1890s. The saddest moment was the assassination of Benazir Bhutto, who I had known at Oxford and who I had arranged to meet the following day.

You began serving abroad as a Political officer in the British Embassy in Moscow in the early eighties; do you find it fitting to be retiring from the Foreign Office as the British Ambassador to Lithuania?

Yes, there is a pleasing sense of a circle – or cycle – completed. Much of my career has directly or indirectly been concerned with the former Communist bloc – in London for example I worked on four occasions in the Department dealing with the USSR, then the CIS – the last time as its Head. I’ve been fortunate to observe, and often to be working first-hand on, the process and consequences of the dissolution of the Soviet empire.

And it is heartening to see the transformation that has taken place in countries like Lithuania in such a

with 966 sq. m of shopping centre area per 1,000 residents and Vilnius is second with 745 sq. m per 1,000 residents. The remaining main Lithuanian cities rank as follows: 659 sq. m. for Klaipėda, 528 sq. m for Kaunas, and 473 sq. m for Panevėžys.

In 2010, owners of retail premises had to adjust rents fairly drastically in order to fill the available vacant premises or to retain existing tenants. If we consider the overall situation of shopping centres, their current standing does not seem particularly threatened. Statistical calculations made by OberHaus show that throughout 2010 the vacancy rate in Vilnius’ shopping centres decreased from 5.7% to 4.5%. The situation in individual shopping centres varies: some shopping centres enjoy 100% occupancy, while less successful ones have 70–90% occupancy. It seems likely that 2011 will be more favourable both for the owners of large retail areas and for owners of smaller individual premises. OberHaus analysts forecast that the first positive changes in the retail sector will be recorded this year, and this in turn will determine certain adjustments in the current record low rents.

Cautiousness of investors on the Lithuanian real estate market Despite expectations of greater investor activity in the purchase of revenue-generating commercial sites, 2010 was marked by only one major transaction. The local investment fund Lords LB Baltic Fund I established in 2009 acquired a class A office building with 8,500 sq. m of rentable area in Vilnius in the middle of 2010. The details of the transaction were not published; however, this was the first major investment transaction in Lithuania for almost 2 years. The absence of any major investment transactions was determined by differences in the expectations of owners and potential buyers: the prices demanded by owners were not acceptable to buyers, and vice versa. It is expected that a more stable national economy, the reviving real estate market, and a more constructive assessment of the situation will lead to a more productive dialogue between the two parties and that we will see more investment transactions in 2011. One major transaction was already recorded in early 2011, when the Baltijos Logistikos Miestas site with an area of 25,800 sq. m was purchased in the Kaunas District. According to Ober-Haus experts, it seems likely that current investment transactions in Vilnius, depending on the type of property, may be finalised with a profit of 7–10%, while the risks are 0.5–2.0% higher in the other main Lithuanian cities.

relatively short time. So it has been a special pleasure to serve as Ambassador here.

You came to Lithuania at a challenging time, both for the Lithuanian economy and the British Embassy in Vilnius, what has given you the most satisfaction professionally during these times?

I was very pleased to be able to secure a visit to Vilnius by our Foreign Office Minister for Europe last year – the first such in five years. It gave a welcome and overdue boost to our political relations. It has been very satisfying finding areas of agreement with Lithuania across a wide range of EU and international issues. I’ve also enjoyed speaking to Lithuanian audiences on different topics during my time here. Of course it has been especially satisfying to be able to help British business interests here, to work with the Chamber, and to visit, occasionally, factories outside Vilnius. Finally I feel that the work I’ve done in co-operation with other Ambassadors to tackle the discrimination and intolerance that is sometimes suffered by minorities here, has been very worthwhile.

Having also served as Deputy Head of Mission at the British Embassy in Kiev do you see yourself as having continued involvement in the region?

As I said earlier, I’ve spent a lot of time working in and around this region. If I could find something else to do that keeps up that contact – especially with Lithuania – I would be very happy.

Napoleon lost an army here, what have you found most enjoyable about serving in Lithuania?

The people, the friends I’ve made, travelling round the country discovering new places – and saunas!

When this issue of the paper is being read, what advice would you give to those young people who would like to join in the service your area of Government service?

Do you mean British or Lithuanian young people?

I would still recommend a career in diplomacy to anyone

Most investors are based in Norway In 2003–2009, most investors in residential property in Lithuania came from Northern Ireland, Great Britain, Norway, Finland, Sweden, and Israel.

In 2009–2010, this expanded to Russia and Belarus.

In terms of investment transactions in commercial property in Lithuania from 2001 to present, most premises were purchased by Norwegian investors (23%), who were followed by German (20%), Danish (16%), Lithuanian (14%), and UK (10%) investors.

Prospects of commercial property in 2011 in the Baltic property markets Considering the overall economic situation in the three Baltic countries, we can see a certain stabilisation and even the first signs of recovery.

The optimistic mood is supported by the facts that speculation on the topic of currency depreciation in Latvia and Lithuania has become less common and that the Euro was introduced in Estonia. The commercial property market, which has regained its balance, has displayed recovery and some signs of price rises. Current prices which in most cases have reached a record low have good prospects of growing. Furthermore, commercial property occupancy rates are improving and market segmentation is manifesting itself: the occupancy rate of successfully operating sites is increasing, while the opposite is true of less successful sites. Distinguishing between projects that justified themselves and those that were overrated is becoming easier. There is also good news from the financial establishments.

Banks, which until now have focused mostly on the financing of residential property, are starting to show a more favourable attitude towards financing commercial property. Another positive factor that was determined by the recent economic recession is that the supply of commercial property has become more balanced. The preparation of new projects has become more thorough and construction work only starts when tenants have been found. We can conclude by saying that it seems very unlikely that any future projects will ever again ruin the market balance.

Conclusion An associate expert of the Free Market Institute said that ‘we have the market that society is worthy of’, which means the market that each of us is worth.

We should learn to take wise decisions, be able to make the right conclusions after our mistakes, and try to build a balanced market. Only then will we dance the meaningful tango...

who likes travelling and has an interest in current affairs: the two factors that motivated me to apply to the Foreign Office more than 30 years ago. You have an unparalleled opportunity to get to know other countries and cultures and to be on the inside of the Government response to things that are happening in the world. You have the satisfaction too of knowing that you are serving your country. Perhaps at a time of shrinking budgets the work pressures are greater, and the postings opportunities for some grades of staff more limited than in the past. But it’s still possible to have a good career if you put in the effort and performance. I’m lucky to have enjoyed every job I’ve done since I joined the office, and now that I have been an Ambassador, I’m ready to try something else.

On behalf of the Chamber we wish you an enjoyable retirement from the Foreign Office and much success in your future endeavours, whatever they may be!

Simon Butt presents diplomas to the kids at the annual event Bukime Kartu

This BCC paper is kindly sponsored by

BCC paper Spring 2011

4

R E A L E S TAT E

Real Estate Market Aims for Stabilisation Violeta Klyvienė Danske bank Senior Baltic Analyst

The Lithuanian economy is recovering from the recession relatively rapidly. Although the recovery is gaining momentum, the growth will not be sustainable or long-term without investing into efficiency and high value-added production. While the Lithuanian economy is mostly driven by exports and domestic demand is gradually picking up, the recovery of the real estate market is still at an early stage.

The results of the second half of 2010 reveal that last year the economic rebound was faster than expected.

GDP growth in the last quarter of 2010 accelerated up to 4.8%. However, the main drivers remain the same – that is exceptional export results and slowly recovering domestic demand. The real estate market going through a stabilisation process. The credit policy of banks is becoming less and less conservative, and the competition in this sector is gradually increasing. Still, it is too early to speak about the rapid recovery of real estate. We are observing the market and responding to its signals. We are ready to lend to consumers, but we will lend only to rational buyers and we will do it responsibly. Even though the worst is left behind, the real estate market is still at an early stage of recovery, and no forced measures will be assumed to boost it before time. This market still has a great potential for development as many people live in old housing and the renovation process is not that smooth. On the other hand, more rapid recovery of demand is hardly expected due to the still difficult situation found in most households.

Despite very positive results in the last quarter, Danske Bankas has not changed its growth forecasts. This year GDP is expected to increase by approx. 3.6%, primarily because of the rapidlygrowing export sector (it will grow by 14.3%, versus our previous expectation of growth by 13.5%). The main prospects in relation to the growth of Lithuanian export partners will remain very favourable

this year. GDP in Russia and Poland is expected to grow by as much as 4.7–4.8%. The fastest growing country in the euro area is still Germany (2.7%). Germany’s growth will also have a major impact on,increasing exports this year. The recovery of domestic demand in 2010 was faster than initially forecast. It is, however, associated with a lack of fiscal consolidation and increased investment by the public sector. A stronger recovery of private investments (up to 17.8%) is expected this year. According to an EU evaluation, the Lithuanian manufacturing sector has still underutilised production capacity, but its existing capacity stock is running out. This should result in a faster recovery in investment demand. The banking sector will also be more robust this year, loan quality has improved considerably and overdue loan growth came to a halt. That allows a forecast of stronger investment growth as well. Still, it is necessary to take into account the fact that rapid growth rates will be driven by the low base effect. Last year, private consumption growth was insignificant because of the high unemployment rate and falling wages. After the last two years of negative prospects this year wages are expected to rise by 1.3%. More sustainable consumption growth prospects (3.3%) are also expected, though such optimism is diminished by the difficult situation in the labour market.

Unemployment started declining and such trends will continue. Nevertheless, we have slightly reduced unemployment forecasts for this year – from the 16.5% forecast in January to 15.9%. This year unemployment, being one of the highest in the European Union, will remain one of the major economic challenges. Unfavourable trends start forming in the labour market as soon as the gap between the demand for and supply of labour force starts widening.

This should come as no surprise, as the largest number of

the unemployed came from the construction sector, and the current demand for labour is in the export-oriented manufacturing sector which usually requires higher qualifications from employees. Therefore, the decline of unemployment will depend on the ability of the unemployed to retrain. Inflation will be one of the biggest challenges this year. The demand side will not put much pressure on domestic prices though changes in external factors may cause unfavourable scenarios. Rapidly-growing prices for energy resources and food across the world will also affect Lithuanian inflation accordingly. It is necessary to take into account the fact that the share of food and energy products in the Lithuanian consumer price index (CPI) is larger than in eurozone countries, therefore the impact will be more significant, too. We have considerably improved our inflation forecasts for this year from 3.2% to 3.4%.

As for all the Baltic States, Estonia is obviously standing out at the moment. Its export growth rates are outstanding. During the last quarter of 2010 they increased by 50%, this was partially due to the fact that foreign investors expected Estonia to introduce the euro. In Joining the euro-zone, Estonia managed to control its state debt and budget deficit, which makes it obvious that Lithuania must change its fiscal policy. In the absence of a political consensus on the necessity to cut the deficit up to 3% of the GDP, we may not reach this objective, particularly now as elections are approaching. The need to reduce the deficit is not related to the plans to introduce the euro. It is primarily our obligation to the EU. Also, it is the fundamental precondition for macroeconomic stability. The threat of a debt crisis in the euro-zone remains, which is a clear indication that Lithuania has no opportunities to implement an expansive fiscal policy.

Table 1. Development of the Lithuanian economy in 2011–2013 Year Gdp1 Private cons1 Fixed Inv1 2011 3.6 3.4 17.8 2012 3.6 3.9 7.8 2013 4.3 4.6 7.6 1) Average % y/y 2) % of GDP 3) % of total labour force 4) Export and import prices, EUR

Export1 14.3 7.1 7.9

Industrial Unenploy ment3 prod.1 2011 -1.7 5.3 18.7 15.9 2012 -4.1 2.6 14.2 15.8 2013 -7.4 -1.1 12.0 14.7 1) Average % y/y 2) % of GDP 3) % of total labour force 4) Export and import prices, EUR Year

Trade balance 24

Current acc.24

Import1 17.1 9.8 9.8

Wages1

Inflation1

1.9 3.1 4.6

3.4 2.8 2.6

Innovations is the Future for Lithuania < continued from page 1

prove their concept or product. However, the possibility of raising significant growth capital for young technology companies in Lithuania remains fairly difficult.

Our firm, St Andrew Square Capital, which is part of the CCB Group, advises young technology companies on raising growth capital, primarily from UK venture capital funds. What is exciting for Lithuania is that currently the most attractive areas for investment for venture capital funds are IT and internet, clean energy and energy efficiency as well as biotechnology and medical devices – all areas in which Lithuania excels at.

The venture capital funds that exist in the UK are very active, but unlike private equity funds they are not investing in mature revenue generating companies with proven business models, and therefore are very particular about what they invest in. The three main drivers are the innovative qualities of the product, the ability to scale the business to a European or global level and very importantly, the quality of the management team.

UK venture capital funds currently have about £2.48 billion to invest, but almost half of this is sitting in cash deposits waiting for suitable opportunities to arise.

Interestingly, many of the venture capital funds have Europe wide mandates as they believe that it shouldn’t matter where an exciting technology is conceived.

Many venture capital funds review more than 500 business plans a year, meet 100 management teams and end up investing in no more than 10 companies.

It is crucial therefore that technology companies have a good knowledge not only of which funds are currently active, but also the sectors that they are currently investing in and mostly importantly their individual investment criteria.

St Andrew Square Capital is currently working with around 40 UK venture capital funds and a wide selection of Baltic technology companies that have developed innovative solutions in areas as diverse as public relations management, web hosting, medical diagnostics devices, energy efficiency and mobile phone applications. We are constantly and pleasantly surprised at the innovative businesses that are presented to us, many of which will hopefully grow into leaders in their field.

If you have any questions please do not hesitate to contact Amit Majithia at amit.majithia@stas-capital.com

Rental market Vilnius, bread and butter or just toast

Jonas Kisielius

Managing Director Residential Lettings, Verslo Namai

The rental market has been essentially stable for more than one year. Rental apartments in Vilnius saw a rapid decline with average rents falling up to 50% to their present level from the peak in 2007/8. In some parts it has been muted that rents are rising, however it is difficult to say this is definitely case.

What is clear, the volume of unrented apartments has declined, along with the expectation on rental prices from apartment owners. All research suggests there will not be a significant change in the rental market of apartments of the short or medium term.

What is also apparent is the ceiling on rents people are prepared to pay (or can pay) is reflected in the rental return of larger apartments. This is unsurprising when one considers the cut in both public and private wage (both taxed and grey economy).

To achieve the best rental yields property buyers should seek smaller one bedroom or studio apartments, away from the old town, where 4-5 % yields are comfortably achieved. The average sq.m. rental price for larger apartments is significantly less than that of smaller units.

Rental prices in most regions are comparable, although sales prices in the centre/old town are much higher average rents do not reflect this and yields are lower. High end and corporate rents are to some extent a different matter, although with the economic slowdown it is clear there are less foreign expat workers around i.e. those able to pay the higher rents.

It is as good a time as any over the last 5 years for purchasing larger apartments long-term, without the primary objective of immediate strong rental yields. Though a note of caution, many older apartments have communal heating systems which are inefficient and expensive to run. In winter months many landlords are forced to drop rents to subsidize the extra costs tenants are faced with. A newly constructed apartment of 60 sq.m. may pay at most 250 litas per month on heating in the coldest, older heating system apartments can pay 600-700 litas a month.

When selecting your rental management company pay special attention to their record, especially if you are out of Lithuania. Many sales agents became rental companies when the financial crisis hit, without property management as the core business. They may know the sales market very well, but do they have the experience for rentals, an altogether more time consuming and laborious business. What to look out for;

Firstly, make sure you have an appointed manager who is ultimately responsible for when things go wrong, and is competent and experienced to deal with any eventuality. Things do go wrong, pipes burst, and do you have insurance cover? The tenants done a runner but you have got a deposit and a well worded contract, right?

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Secondly, does the company have the experience and or resources to meet your expectations?

When you call up your rental management company do they know if the apartment is rented and the tenant paying the bills and rent? Who has your keys! Do not be surprised when you don’t get an affirmative response.

BCC paper Spring 2011

5

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R E A L E S TAT E

Baltic Real Estate James A. Clarke CEO BNTP Group, Board member Lords LB Asset Management

I have been living and working in Lithuania for the past ten years and during that time I have witnessed a full cycle of the Baltic real estate market. In 2001 the market was on its way up from very low valuations; in 2004 - joining the EU provided a confidence boost; 2007 was the peak before the fall together with the financial crisis and now in 2011 we can feel the market starting to rise again.

A lot of building took place during that time and the Baltics caught up with a fairly adequate supply of commercial buildings. Currently there is very little speculation in the market and commercial buildings are built only on firm demand.

I believe it is a favorable time to invest in commercial real estate if you can find a good project. Valuations are low due to low rent levels and higher yield requirements, whereby some projects can be valued at less than today’s building replacement costs. A project which ticks all the boxes (including secure and sustainable cash flow, good location, quality design and construction) is hard to find with not many owners or banks willing to sell at such prices.

The residential sector has quite a lot of long term demand potential and will see more renovations and new constructions; however it is expected that only the professional projects which fully consider the customer’s needs will prevail.

The Baltic region still has a lot of potential for PPP building, energy and infrastructure projects; if the respective governments can develop a transparent information and regulation framework so that the private sector can engage properly.

one of the most convenient and active economic zones in

Klaipeda Real Estate The commercial real estate market in Klaipeda has seen similar dynamics over the years to the whole region.

Rent levels have been reduced in many projects. The retail market is stabilising in the main shopping centers; however the center and the old town are still very quiet.

There is an oversupply of offices and warehousing which needs to be absorbed before rent levels can come back to more reasonable levels. Currently, there are very few new commercial projects being developed, however there are quite a few ambitious projects planned in the medium term.

There are plenty of new apartments available in unpopular and flawed large projects; however new smaller projects are being developed and demand is increasing again.

BNTP, Baltic Real-Estate Developments We are a family owned real estate and private equity investment company. We currently own and operate two shopping centers and a business park in Lithuania. We are also investing in agriculture, energy, manufacturing and other real estate investments in the Baltics.

Klaipeda Business Park, Free Economic Zone, Klaipeda Situated in the free economic zone, Klaipeda Business Park offers clients quality premises for lease with all the advantages of a modern business park in an excellent location. We are also offering investments to joint venture manufacturing and service projects. Recently we have seen increased interest from international companies, who would like to benefit from the considerably lower facility and labour costs, while also utilizing good logistics and convenience to markets.

BNTP can also recommend Klaipeda free economic zone to companies who would like to develop their own business premises. The superior location and business environment has all the necessary infrastructure and support services available to allow a Company to establish and develop successfully.

Klaipeda Free Economic Zone Since 2001, Klaipeda FEZ has become an important industrial and business development hub in Western Lithuania. Currently, 16 companies are operating in the zone including Companies from Ireland, Denmark, Norway, Finland, Belarus, Ukraine, Thailand, Japan and the UK. These Companies represent a broad spectrum of products and activities including; plastics, biodiesel, electronic appliances, architectural glass, steel fabrication, logistics, manufacturing and many service providers.

Klaipeda FEZ Companies enjoy a superior business environment including major tax advantages and other benefits. The FEZ Management Company provides clients support and services, also assisting companies establish and operate in the zone, streamlining costs and timing.

Feedback confirms that clients are utilising the superior business environment; during the past three years FEZ Companies have increased their turnovers, with exports of production growing by more than 10% annually.

Recently the Finnish company “Fortum” has commenced construction of a heat and power plant, with planned investments of approximately 140 million EUR. Presently, negotiations are underway with representatives from the food, building, wood and transport industries who are planning to set up in the zone.

In 2010, the Klaipeda FEZ gained an important international recognition published by “FDI Magazine”, belonging to the “Financial Times” Group – in the global ranking out of 700 special zones, the Klaipėda FEZ earned the 5th place by the criterion of favourable business conditions and zone facilities as well as the 20th place in the general ranking.

KLAIPEDA FREE ECONOMIC ZONE

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R E A L E S TAT E

Anti - Counterfeiting Trade Agreement Renata Beržanskienė SORAINEN

On 2 October 2010 after 11 rounds of negotiations between states, the Anti-Counterfeiting Trade Agreement (ACTA) was finally drafted in Tokyo. The parties to the ACTA are developed as well as emerging economies: Australia, Canada, the European Union, Japan, Korea, Mexico, Mo-

Helene Ryding

BCC Private member

rocco, New Zealand, Singapore, Switzerland and the United States. The ACTA initiative was initially announced in 2007.

Accretion of counterfeit and pirated goods weakens the legitimate trade and development of the world economy. The main aim of the Agreement is to address the problem of infringement of intellectual property rights, including the digital environment. What is more, it aims to ensure international cooperation among its Parties. Cooperation among the competent parties is vital in the fight against the infringement of intellectual property rights.

However, it does not require sharing information, the disclosure of which could be contrary to the party’s law or could impede law enforcement.

The Agreement is dedicated to the legal framework for enforcement of intellectual property rights, which covers the issues of civil enforcement, border measures, criminal enforcement and also enforcement of intellectual property rights in the digital environment.

IF ONLY, I HAD BOUGHT THAT FLAT/HOUSE WHILE IT WAS STILL AFFORDABLE ….

It is mandatory for the parties to ensure that enforcement of the intellectual property rights procedure is available under their law. In terms of the civil enforcement of the intellectual property rights, the parties must provide for their authorities to have the authority to issue an order against the party to stop the infringement, also to order an infringer, who is knowingly engaged in the activity infringing intellectual property rights, to compensate for the injury the right holder has suffered.

Other remedies include the destruction of goods without compensation of any sort. In addition, in case of a copyright or related rights infringement and trademark counterfeiting, the authorities of each Party will have the authority to order the seizure or placement into custody of the infringer. Provisional measures ordered by the Parties’ authorities against a party or against a third party over whom the relevant judicial authority exercises jurisdiction should be prompt and effective.

As for border measures, under the Agreement the procedures for import and export shipments must be provided by each Party. In case of suspected goods in transit or in other situations where goods are under the customs control, the Parties may provide for suitable procedures. It is important for the competent authorities of the Party to adopt a procedure by which it may determine whether the suspected goods infringe an intellectual property right.

The Agreement also deals with the issues concerning criminal enforcement measures listed in this section for criminal enforcement include seizure, forfeiture and destruction.

Apart from all the above mentioned issues, the ACTA also covers the enforcement of intellectual property rights in the digital environment.

Members of the agreement should guarantee that enforcement procedures apply to an infringement of at least trade mark and copyright or related rights over digital networks. To provide adequate legal protection against a person performing any act infringing the intellectual property rights over digital networks, the Agreement obliges the Parties to adopt or maintain appropriate limitations or exceptions to the measures implementing certain paragraphs of the Agreement that allow judicial authorities to order seizure, forfeiture and destruction.

In short, the ACTA includes innovative provisions to deepen international cooperation and promote strong enforcement practices. Despite all the criticism on how the ACTA can be a threat to freedom and fundamental human rights, notably the freedom of expression and communication privacy, parties agree that it will help to establish a state-of-the-art international framework, which will provide a model for combating counterfeiting and piracy in 21st century.

How many times have you thought that recently?

For me, it started in 2000 when I sold my house in the UK and didn’t immediately replace it, while I lived in Lithuania. Then in 2003, when we left Lithuania for Greece, friends told me I should have bought my flat in Vilnius. But somehow a house in Athens or a Greek island seemed a much nicer proposition, with no more cold winters.

But that was not to be. After two years not really settling in Athens I was faced with a job in Kosovo, and daughters needing to be educated.

So finally we bit the bullet and headed for Oxford in 2005. I didn’t realise that I had chosen the most expensive town in UK, but I soon felt it. By then I had bought a flat in Ljubljana which my sister lives in. More than that, my work, though well paid, is freelance and that made it more or less impossible to get a mortgage. So I resigned myself to renting while we were in England In between work in the Balkans and visiting my sister on the way home, I got to know Ljubljana quite well, and began to think about buying a flat there. Although Ljubljana is as cold as Vilnius in the winter, it is an hour’s drive from the Mediterranean, from Croatia and Italy, so this means you can escape the winter.

At that time, I paid a visit to Vilnius, and found that there too, prices had leapt, and while I had cherished dreams of living in the Old Town what I could afford for the future was Ateities gatve.

So back in Ljubljana, I searched and searched for a suitable flat. In the Old Town apartments with bizarre layouts; the rest of inner Ljubljana, boring standard Yugoslav socialist housing. There were no blocks of modern new flats like in Vilnius. The best I could was a small flat in a tall block, with a wonderful view of the Alps, and a perfect (but too small) flat in a house with a garden fronting on the river. My sister pointed out it was a long walk to the shops and I would be responsible for all the repairs needed to the old building (big cracks already visible).

In 2008 I had just started a new steady job in Georgia and was saving lots of money. In Tbilisi, meanwhile, friends were trying to persuade me to buy, as prices kept on rising. However, I could see the terrible standard of construction (single glazed windows, no insulation, black shell) and couldn’t face the hassle. Plus the prices were incredible compared with other cities in Europe where you got a finished apartment not just some concrete walls.

Then the war happened, and we evacuated.

Faced with an August with unexpectedly no plans, I visited Vilnius. To my surprise, I found prices were already falling, developers had lots of unsold

properties and there was a good choice near the centre. I realised that of all the places I had lived, the place where I still had most friends was Vilnius.

So why not buy in Vilnius?

In November I gave myself 10 days to find a flat. I had lots of help. Estate agents fell over themselves to show me round empty properties.

At first I decided I needed a flat into which I could move straight away. Before I started to travel for work, I had renovated three old houses, and refitted several others, and that was enough, I thought. But everyone was hanging onto their finished flats and what was on the market were completely new flats, with developers desperate to sell.

Already on the first day I realised I found a flat against which I was comparing all the others.

In a new block just over the Green Bridge, with a long view of the river and view of Gediminas Castle, and a full length south facing balcony, it was just the right size for me and my budget in cash. Everyone told me to bargain hard, so when we went to settle the price, I took a deep breath and went very low. The developer quickly raised it to something I could afford and the deal was done. I borrowed a friend’s interpreter and her lawyer daughter and we signed the contract on my birthday. I left the lawyer to sort out the details, whilst I collected the cash. In September I had already assembled all my cash in one account just at the time when the banks were crashing.

So I had quickly dispersed it again in accounts round Europe.

Over the next year, I hired the friend’s architect and got the flat finished. I have worked with British architects professionally and found that they divide into two types, the boringly competent and the excitingly arrogant. In Vilnius it is possible to have excitement and competence. My architect instantly earned his fees by moving all the walls in my flat to remove a dark corridor, make a bigger living room and two reasonable bedrooms. I made trips once a month to check progress and make the endless decisions that are needed about colours and finishes, lights and kitchen fittings.

A good architect has a good builder ready, so no problem finding workmen or keeping to time, as by now building work in Vilnius was at a standstill.

The only difficulty appeared to be delays getting materials delivered, as no stocks were being held.

But even this had its advantages since my savings kept pace with the need for cash.

So now as I sit writing this, looking out over the river in the sun, I have no regrets for properties I might have bought. The recession brought me an opportunity to find and finance a perfect home.

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BCC paper Spring 2011

8

Chronicle of BCC Events

Burns Night Celebrated in Vilnius for the 12th Successive year On Saturday, January 22nd the British Chamber of Commerce in Lithuania held its 12th Annual, Traditional Burns Night, Charity Event to celebrate the birthday of Scotland’s national poet, Robert Burns (1759 – 1796) and to raise funds for two selected Lithuanian charities.

In keeping with tradition, the 12th annual Burns Night was held in Vilnius City Hall, located in the very heart of the magnificent old town. The event was attended by over 220 guests from different countries including, naturally, Scotland, England and Lithuania. The charity raffle raised 13,800 litas (3.463 GBP), which has since been presented to VšĮ „Sėkmės mokykla“ (School of Success), which runs free seminars in Lithuaninan secondary schools, to help with the development of general practical and life skills. The allocated funds will be used to organize workshops in schools, located in smaller towns and villages across Lithuania. The second NGO supported this year was Taurage Childrens Day-Care centre, which runs after-school activities for 8-13 year old children from disadvantaged families. The money raised at Burns Night will help the centre to improve conditions for the children inside the building.

Chris Butler, the chairman of the British Chamber of Commerce and host of the event, is pleased that Burns Night remains extremely popular in Vilnius and that guests are willing to support the Chambers’ annual fund-raising initiative: “I am delighted that not only the Scottish gaiety, but also our national traditions are acceptable to Lithuanian guests, who attend Burns Night every year and willingly donate for the charities”.

This year Guests at Burns Night were entertained by “Saor Patrol”, a Celtic rock and folk group from Scotland, who returned back after their tremendous success at last year’s Burns Night.

Burns Night was celebrated in a true Scottish manner and had most of the essentials necessary for a successful event. The haggis was ceremonially piped in by Pipe Major Brian Elrick accompanied by the Chef. “Address to a Haggis” was recited by Scottish guest, Neil Aitken, the “Toast to the Lassies” and “Reply from the Lassies” were delivered by John Grigor, who had travelled to Vilnius from Scotland especially for Burns night and Penny Miller who also did a fantastic job in leading the guests in ceilidh dancing after the supper, managing to get even the most reserved guests onto the dance floor.

Burns Night’11 general Sponsor

TM

Media partner

Charity Raffle Prizes Sponsors

The chamber expresses its enormous gratitude to

Sponsors

Photos by Tomas Gorbačas

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BCC paper Spring 2011

Chronicle of BCC Events On January 26th, BCC Members and Friends were invited to a traditional Monthly Breakfast Technical Briefing. After English Breakfast served at the“Sonnets” restaurant in the Shakespeare Hotel, the topic “Lithuanian tax environment overview, tax law changes, tax incentives and planning opportunities in 2011” was presented by Mr Robertas Jakubauskas, Tax manager, KPMG Baltics, UAB. The presentation covered current taxation and the upcoming changes in corporate income tax, individual tax, VAT, real estate tax, taxation of dividends, interest and royalties. The speaker also shared his opinion on practical aspects and the implementation problems of recently introduced transfer of group tax losses and advance ruling system implementation and related challenges.

The audience was greatly involved in the presentation and the topic was followed by an active discussion.

On February 11th, the British Chamber of Commerce organized a “member visit” to the “Baldai Jums” factory in Jonava, which is a producer of high quality solid wood furniture.

The company supplies major UK brands such as Sainsbury’s, Laura Ashley, Living Storage, Content by Conran and NEXT. The British Ambassador Simon Butt, a group of BCC members and a number of diplomats received a warm welcome from Alfonsas Me kauskas, company Managing Director and his team. All attendees had the opportunity to witness the manufacturing process at the factory, view the production site and listen to a short presentation about the factory and its long history in Lithuania since it was established in 1911. The factory tour was followed by a presentation of furniture in the company’s special show room and a further reception was kindly hosted by Baldai Jums.

The British Chamber of Commerce expresses considerable gratitude to Baldai Jums and its team for hosting this interesting and memorable event.

On February 24th, the Monthly Breakfast Technical Briefing featured the topic, “Mind the

huge Pensions Gap in the future - immediate actions of every individual in Lithuania and Europe to be taken today” covered by Mr Arūnas Rumskas, Financial Director, Member of the Board of “Aviva Lithuania”.

Based on European level research carried out in 2010 by the Aviva group together with audit company “Deloitte” the speaker focussed on the pensions people can expect to receive in 10, 20 or 30 years time and provided information about the pensions gap people in Lithuania and other European countries will face.

On February 22nd, the British Chamber of Commerce held a‚Speaker‘ meeting with ViceMinister of the Economy Mr Rimantas Zylius, who focused on the main issues of reforming corporate governance of State owned enterprises in Lithuania and answered questions from the audience. As usual, after the presentation, nearly 80 chamber members and friends had the opportunity to network over a glass of wine and snacks were served by the Novotel Vilnius Centre restaurant.

BCC Members’ News 9

Euromonitor International unveils new look and website in its 40th year As Euromonitor International approaches its 40th birthday the company is pleased to announce a new image and website (www.euromonitor.com).

“We have seen extraordinary growth in recent years and with our number of international offices reaching eleven we have extensive exposure in all corners of the world,” says Executive Chairman, Robert Senior. “Our new image is designed to appeal across all markets and be instantly identifiable with the quality and integrity of our internationally-renowned research.”

Along with a new logo Euromonitor International is launching a completely new website featuring more interactivity, substantially improved navigation and timely, up-to-date information on its products, com-

pany activity and research. “Our goal is to help our audience to identify and navigate easily through the myriad of industry, country and consumer analyses that make our company the leader in global strategic business research,” adds Mr. Senior.

Euromonitor’s rebranding comes shortly after the opening of two of its latest regional offices in Tokyo and Sydney, and just before the launch of its Bangalore office in India. This will bring the company’s total regional offices to eleven, marking a new chapter for the company. “We’re excited about the direction Euromonitor is taking and we expect that our new offices and new website will ensure easy access to our customers and a clear understanding of the benefits of our research and services,” says Mr. Senior.

Educational game for kids - Pinigėnai www.pinigėnai.lt is an educational website that was designed to enable school children aged 5 to 9 years old to learn more about money in a fun and interactive environment. With its entertaining games and various activities, your child can explore where money comes from, what money is worth and how they can prioritise and save up.

To make sure that your child feels at home in Moneyville and can recognise it from visit to visit, he/ she is given a personal house and room, as well as their very own character. In the family game, which is specially designed for children from 8 to 9 years of age, your child can create an imaginary family, design their home, devise forms of transport and decide where they spend their holidays.

PINIGENAI www.pinigėnai.lt is the first part of Danske bankas’ Financial Literacy programme aiming to equip children and young people with basic financial skills. The website is specially designed for children aged 5-9 years old and the aim is to provide them with a good basic understanding of what money is, how they can prioritise and save so that they eventually learn to manage their private finances responsibly as adults.

Golf Season Starts on 15th of April With the golf season just over a month away now is the time to start planning your visit to The V Golf Club so you can be one of the first to experience these magnificent facilities in 2011.

In order to assist you we have a special Introductory offer for those who want to improve their golf and dust away those cobwebs from the long winter break. Our new resident PGA Professional, Yiannis Tsioukanis, is offering 50% OFF your lessons if taken before May 15, 2011. So come visit our beautiful setting and improve your golf at the same time. Contact us on +370 685 08181.

Bunnahabhain Distillery takes whisky lovers on a new journey of discovery Bunnahabhain 12 year old Islay Single Malt Scotch Whisky, from the Bunnahabhain Distillery on the isolated north-eastern tip of the Island of Islay, has been re-introduced as an un-chillfiltered spirit, a move which has excited whisky lovers and experts from across the world.

The process of chill-filtering removes some of the oily-fatty compounds produced during distillation or extracted in the maturation period. It prevents the whisky, when in the bottle at an alcohol level below 46% abv, or when served, from becoming hazy when chilled. Some whisky experts believe that chill-filtration removes some of the flavour and body from the whisky.

When un-chillfiltered, the dram retains a depth of flavour the filtration process would otherwise rob it of.

In line with Burn Stewart Distillers’ Master Blender, Ian MacMillan’s vision for all of the company’s malts to move the spirit to un-chillfiltered, the whisky now has a high strength of 46.3% alc with no colour added. The packaging has been revised to compliment the new expression, with the whisky now contained within a smoked oak glass, replacing the traditional emerald green glassware, dual labelling and is now presented in a quality gift carton.

Ian MacMillan, Master Blender commented “Enjoying the experience of un-chillfiltered whisky allows you to enjoy the whisky as near natural as possible, with all the original flavours and aromas contained”.

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BCC paper Spring 2011

10 Brits in Lithuania/BCC Members’ News

A Dream Comes True

By Hugh Thomas BCC private member

Strongly encouraged by my father, I have messed about in boats from small sailing dinghies to larger cruising yachts around the coasts and seas of Wales, Ireland, the South of England, Channel Islands and France for many years. In 1986, with my family, I sailed my own 36 foot cruiser from the UK to Corsica over 3 months. I had tried to persuade my family to sail the Atlantic with me but the answer I got was “No Dad, we don‘t want 30 days at sea“! But such a trip has remained an ambition of mine.

My move to work for PwC in the Baltics in 1997 changed my focus somewhat and I sold my boat in the UK. I now live on Margis Lake, near Trakai, and sail a 5 metre yacht and similar sized speed boat.

To my delight, some 4 years ago, my wife‘s cousin, Tomas, expressed very strong interest in sailing and together with 3 other Lithuanians we have gained the necessary RYA (Royal Yachting Association) qualifications and now regularly skipper and charter yachts in the Mediterranean.

But crossing the Atlantic has always been an ambition When the owners of Ambersail were planning her circumnavigation as part of the Lithuanian Millennium celebration, Tomas tried to get him (and possibly me) on one of the legs of the voyage. That effort was unsuccessful.

And then, to my surprise, last December Tomas phoned me and said “I have just received a crazy proposal – to join Ambersail for a trip across the Atlantic in February“. This really focused my mind. Was it really so silly? But was I fit enough (I am 66 years old – tolerably fit but not particularly so)? Was it fair to leave my wife on her own for 3 weeks in the worst of winter in Lithuania, living out in the country as we do, etc, etc. But on reflection and after discussion with my wife, Rita, who knew my ambition, I replied very positively.

Ambersail What is she? Well, her class is a Volvo 60 designed specifically for the Volvo Ocean Race, which takes place over the southern latitudes of the Atlantic, Indian and Pacific oceans. She is 19.25 metres (66 feet) long overall, with a mast height of 26 metres (90 feet), and is an out and out racing yacht.

She was bought by a group of Lithuanians about 5 years ago.

Since completing the “Millennium Odyssy“ circumnavigation, she has been raced extensively in Europe and the Mediterranean, achieving a very commendable 2nd place in her class in the prestigious „Round Britain“ race last year. We were to be part of the 13 Lithuanian crew delivering her from the Canaries to Antigua for the start of the new racing season.

The route The conventional southerly route from Europe to the Caribbean is to sail south- south west from the Canary Islands until „the butter melts“. In practice this is getting close to the Verde Islands and the 20th parallel before turning west to pick up the easterly trade winds. Some wet/stormy weather can be ex-

Concentration (Hugh)

pected off the west coast of Africa and increasing short stormy weather at night for the last 1000 miles or so as the Caribbean is approached.

Provisioning Provisioning was a bit of a challenge but was achieved after some negotiation (e.g. the balance between red wine and spirits) and the use of 5 taxis!

The skipper was horrified to see how much weight we were adding to his boat!

In the event we were not far out with our fresh foods and through marinating some of the meat and buying some frozen we had fresh meat every day.

The beer lasted the trip, but sadly we did run out of decent red wine 3 days early although there were 3 bottles of spirits left at the end (quickly demolished by the new crew in Antigua!).

held immediate cooking needs but no table.

With only one gas burner cooking is limited to “one pot“preparation. We had at least one good hot meal every day with salads, snacks, porridge and pasta in between. Chocolate and cookies supplemented our needs at night.

Washing up was simple – hang over the open stern and wash out your bowl and utensils in the sea!

Safety Our skipper was very relaxed throughout and this led to a very happy ship with plenty of story-telling and jokes. But the rules on safety were clear with strict requirements for life jackets and harnesses at night and at other times of risk (e.g. when gybing/

Provisioning

Safe arrival

Below decks I had been warned that accommodation below would be “sparse“with uncomfortable bunks directly against the hull and a limited cabin sole. But at least we did have a separate heads/shower cabin. There was no galley as such – just one small portable gas burner in the centre of the cabin floor and small refrigerator surrounded by a fibre glass structure that

reefing). At the speed Ambersail travels recovery from the sea would be problematic to say the least.

We had a birthday party on board for crew member, Kestutis. Extra life lines were rigged for the party-goers before the whisky was brought out and the singing started. They were safely below decks before nightfall.

The voyage The motion of the boat was tough – rarely were there times when we could move about the boat inside or on deck without “three limbs being secure“. And this applied equally in one‘s bunk – but sleep was a rare commodity!

BUT the speed and sheer acceleration of Ambersail is quite incredible. Rarely did she drop below 10 knots, more usually it was 12 to 15, regularly it was 20 plus, 24 plus was achieved many times and 30 knots achieved at least once.

I tried to time her acceleration. I reckoned she could change from 10 to 20 knots in 2-3 seconds as she accelerated down a wave. It was really exhilarating stuff.

The sense of being on an out and out racing machine was huge. She surfs down waves with the boat‘s own wave of water shooting out either side (only occasionally catching the crew) and leaving her own wake behind her. Of course, the bow occasionally digs into the wave ahead and throws gallons of water crashing over the deck and any unfortunate souls there. And heaven help any crew member who had left the hatch open – the skipper‘s bunk was very close!

This, of course, requires a lot of the helmsman.

The sea is generally following but from mixed directions and the helmsman needs to anticipate what the waves will do to the boat and react early to counter it with minimum rudder and then help the boat surf and keep her straight. It needs a lot of concentration and rapid response. In stronger winds and seas I found this difficult but Tomas and Gintas, on our watch, got the hang of this and were first class at the end.

After the last gybe as we neared Antigua, the skipper left Tomas and I to navigate and helm Ambersail into Falmouth, Antigua.

Some statistics • Sea miles of water covered: 3266 (rumb line about 2800) • Time taken: 11 days and 10 hours • Average speed: 12 knots (theoretical max. hull speed 11 knots!)

• Best day: Average speed 15 knots • Maximum speed: 30 knots (in 40 knots of wind and full sail!)

• Vessels seen: 2 ships and 2 yachts near Verde islands then NONE for over 3000 miles • Fish caught: NONE! • into Falmouth, Antigua.

Conclusion This was a fantastic adventure and for me the achievement of a life- long goal. Ambersail is a superb sailing machine and one quickly forgets the high degree of discomfort involved in favour of the excitement of sailing on her.

Ambersail, those who own and support her, and especially those who sail her are a huge credit to Lithuania. I hope she will be an inspiration to other potential sailors in Lithuania where the sport is substantially under-developed.

Magazine honours for Mike

Mike with this year’s and last year’s award

For the last two years there has been a big party in Central London for organisations involved in accountancy training hosted by PQ Magazine.

This year a member of our BCC board, Mike Little, is a member of a winning team which scooped the honours for “Best Accountancy Website of the Year”. OK, it’s not

the Oscars, but in the field of accountancy tuition it’s certainly an honour which is recognised.

Two years ago, following the initiative of John Moffat, an accountancy tuition provider in Latvia, a website www.opentuition.com was established with the aim of providing free accountancy tuition to accounting students around the World.

A team of five ( four UK qualified accountants and an administrative person – who happens also to be a wizard on the computer! ) contribute their efforts to running the site which now has in excess of 100,000 registered members.

This is of particular help to those students who are unable to attend formal courses in their preparation for their exams. Reasons for non-attendance on courses are many and varied but include cost, job commitments, family commitments and the lack of available courses in their vicinity.

Registration as an opentuition family member is absolutely free which is, of course, a major attraction!

Around 30% of the members are from the UK and a further 20% from the Indian sub-continent. The rest are scattered around the World – from Nepal to Nigeria, from Austria to Australia.

The site offers free course notes, a chat room, forums, study groups and study buddies as well as a page “Ask the tutor”. The tutors endeavour to answer questions on this page within 48 hours.

It is therefore no surprise that, for the second consecutive year, opentuition has won the award “Best Accountancy Website of the Year”.

The site is relevant for any student of accounting be they school children attempting their school accounting or book-keeping exams, university students who feel they are struggling with their studies or accountancy students aiming for a professional qualification.

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Mike with three other team members collecting the award

It was originally targeted at students trying to gain an ACCA qualification – Association of Chartered Certified Accountants – but more and more students are registering for other accountancy based qualifications.

BCC paper Spring 2011

BCC Members’ News How the Children Build Their Personalities at Vilnius Montessori pre-School “There is in every child a painstaking teacher, so skilful that he obtains identical results in all children in all parts of the world”, said Maria Montessori after seeing Montessori schools open in every corner of the world and employing the method this genius of a lady had created. For the last six months the staff of Vilnius Montessori pre-School has been able to observe and experience exactly what the quotation above says. The children in Lithuania, just like the children around the world, embrace the Montessori method and the classroom full of Montessori materials. With all assuredness and sincerity I, as a director of Vilnius Montessori preSchool will state that: • all children have a natural desire to learn so deep that once it is released it cannot be stopped; • children adore Montessori materials because unlike traditional toys they have a challenge inherent, which is designed to teach a notion or a skill; • the freedom to make ample choices all day long helps the child feel confident in his/her learning path and allows the child to become independent; • “Discipline must come through liberty. . . .” freedom is easily misunderstood; the freedom of choice that sets the child on the beautiful tracks of self discipline is not the freedom that some people confuse the child’s misbehaviour with; • children will much rather describe their activities as ‘work’ than ‘play’.

With the beautiful time of spring approaching VMS group will learn about life and how it comes about. The subjects of ecology, Green attitude, and the Earth as a part of Solar System will also become favourite this spring.

Among the means to help each child perceive these notions the Montessori teacher will be presenting the children with beautiful and scientifically designed materials, such as Tellurium (3D model of the Solar System) and many more.

Vilnius International School (VIS) has been authorized as an International Baccalaureate (IB) World School as of January 2011 It is the first school in Lithuania to offer the IB Primary Years Programme (PYP).

The IB consists of three educational programmes developed by the International Baccalaureate Organization based in Switzerland, the Primary Years Programme (age 3-11), the Middle Years Programme (age 11-16) and the Diploma Programme (age 16-19).

Over 3000 schools in 140 countries follow the IB. In Lithuania, there are two other schools authorized to teach the IB Diploma Programme, Vilnius Lyceum and Šiaulių Didždvario Gymnasium.

The Lithuanian Ministry of Education fully recognizes IB programmes as meeting the national education requirements. The Ministry actively supports the proliferation of the IB throughout the Lithuanian school system.

The IB values high educational standards, promotes a student-centered approach to learning and actively fosters the development of socially responsible young citizens. “At VIS, we seek to equip children with the skills to meet the demands of an increasingly complex global society, and the integrity to meet those demands with more than their own self-interest at heart”, shared VIS director, Rebecca Juras.

Vilnius International School is a non-profit private school located in the center of Vilnius Old Town. VIS offers pre-school, primary and middle school programmes with instruction in English and Lithuanian.

Deloitte has launched Football Money League Report This report deals with the analysis and ratings of the world’s highest earning football clubs. Since this report has been issued nine months after the end of 2009-2010 season, the financial data analysis of football clubs is reliable and contemporary.

The combined revenues of the world’s 20 highest earning football clubs have surpassed €4 billion for the first time, according to the latest Football Money League from Deloitte. They generated a total of €4.3 billion in revenue, up 8% on the previous year.

For the sixth consecutive year, Real Madrid claims top spot as the world’s largest football club on this measure. Real is now just two years short of matching Manchester United’s eight year reign from 1996/97, the first edition of the Money League, through to 2003/04.

Dan Jones, Partner in the Sports Business Group at Deloitte, commented: “All bar three of the top 20 clubs achieved revenue growth during 2009/10 demonstrating the continued resilience of football’s top clubs as the full impact of the global economic downturn took hold.”

Despite its relatively modest on-pitch performance, by the club’s own high standards, Real held a €41m revenue advantage over Barcelona in 2009/10. Deloitte expects the battle for top spot in the Money League to be between Spain’s two superclubs for the next few years at least.

Whilst Spanish clubs claim the top two positions in the Money League, England retains the largest representation from any single country, with seven clubs.

Manchester United, Arsenal and Chelsea all retained their previous years’ positions of third, fifth and sixth, respectively. Liverpool slipped one place to eighth.

According to Paul Rawnsley, Director in the Sports Business Group, emphasized: “Despite the difficult economic times we would not be surprised to report that revenues have grown again when we cover the current season in next year’s report, as bigger central overseas broadcast deals and some strong sponsorship deals strengthen English clubs’ revenue position further.”

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11

BCC paper Spring 2011

12 BCC Members’ News Taurage industrial park prepares industrial land for high tech production companies

LAWIN – IFLR Law Firm Of The Year: Baltics for 2011

Taurage industrial park has started a new project.

The Park has developed 7 hectares of industrial land, making it suitable for high tech production companies.

All the necesary infrastructure and communications equipment has been installed in this new industrial land.

Two British investors have already indicated their intention to build high tech production plants at Taurage industrial park. UAB „Mobilicity Systems Lithuania“ are going to produce innovative electric buses, while UAB „Derivative Industries“ will produce new generation compressors.

LAWIN was awarded as the best law firm for the year 2011 in the Baltics by the experts of independent legal directory International Finance Law Review 1000.

Clear Aligner International sign agreement with Odontika as representatives for the Baltic and CIS regions

On 23 March 2011 the International Finance Law Review 1000 (IFLR) h e l d E u ro p e Aw a rd s e ve n t i n London and granted its awards to the best law firms of the year which have completed the most innovative and outstanding legal deals of 2010.

Specializing in production of clear teeth straightening positioners, Clear Aligner International is one of the UK market leaders. Clear Aligner International has undergone rapid growth over the past 7 years due to precision detailed production, continued product development, and close communication with partner dental clinics.

Clear Aligner International has identified Lithuania as an exciting location and potential centre for produc-

tion expansion with plans to establish a new R&D facility.

The laboratory facility will produce unique, clear, teeth straightening positioners for dental clinics and patients throughout Lithuania, the Baltic and CIS region.

Having production in Lithuania will enable Clear Aligner International to continue offering the very best treatment, whilst maintaining the most value assured teeth straightening solution for dental clinics and patients.

Rolandas Valiūnas, Filip K. Klavins and Peeter Lepik, LAWIN Managing partners in Lithuania, Latvia and Estonia

Every year IFLR carries out independent quality surveys and announces the best law firms of the year of various jurisdictions not only in Europe but also globally. LAWIN has been awarded for the second time since the category for the best Baltic law firm was introduced in 2008.

IFLR 1000 financial law firm rankings are based on the recommendations of in-house counsel at the world’s most prominent financial institutions and companies, as well as the leading lawyers, attorneys and solicitors.

English consultants extending range of contacts in higher education

regular language lessons from a Lithuanian teacher in the UK. He says he has found it useful when arguing with taxi drivers about the fares from the airport.

Mike Guttridge & Terry Gregory of Smith Guttridge & Associates arrived back in Vilnius on one of their regular 3 times a year visits. They were last here as a team in November when they were invited to present a paper at the Lithuanian International Coaching Federation conference held in Vilnius.

Terry was also here for two weeks in January studying Lithuanian language and culture at Vilnius University, something they have both been keen to learn about since they first visited Lithuania. Mike took the plunge at VDU in Kaunas in 2008 and has been having

Kęstutis Kazlauskas

Hotel Manager of the Radisson Blu Hotel Lietuva

Many polls are published around the world each year ranking the most favoured companies that university and college students want to work for. For the most part, they have similar results – everyone wants to work for Google, followed by major international accounting and consultancy firms.

On a more serious note, this time they were visiting 6 universities on 8 sites in Vilnius, Kaunas and Siauliai delivering 1/2 day taster workshops on “Career Management”, “Impression Management” and “Resilient Leadership”.

They had “Linkedup” with Jurgita Jankuviene, from local consultancy Profesiniai Kontaktai, who was able to introduce them to 3 universities they had not been involved with previously and who organised the “tour” for them.

Mike and Terry have been to Kaunas in the past but this is the first time they have been to Siauliai. They said; “this is the longest we have spent here as a team delivering workshops and we are delighted to be meeting both new colleagues and those we have worked with previously. We see this not just as a valuable marketing tool for us but as helping final year graduate and Master level students increase their employability”.

In addition to the workshops they are also catching up with business contacts from previous visits.

Radisson Blu one of the Top 10 companies to work for Lithuanian students also rank their company preferences. The job-search website CV-Online and the student organization AIESEC recently polled Lithuanian students, and out of 150 companies Radisson Blu Hotels & Resorts was chosen as one of the Top 10. This was the first time a company from the hospitality industry had been included in the list.

Law firms merge to strengthen position in the Baltic States The business law firms of Varul Vilgerts Smaliukas and Devyžis & partners WILL have announced their merger in Lithuania and from the 24th of January 2011 the firm will be operating under the common name VARUL across the Baltics.

“A year ago we formed a network of business lawyers, and today we are making an important step forward to strengthening our positions in Lithuania seeking to create one of the strongest business law firms in the Baltic States. According to the number of attorneys and lawyers, VARUL becomes one of the top law firms in the Baltic region”, - says Managing Partner of VARUL in Estonia Helmut Pikmets.

VARUL across all three Baltic countries has 65 attorneys and lawyers. In addition to the

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merger in Lithuania the Estonian office also announced three new partners who joined the team.

“We joined our competencies, experience and potential to expand our legal services portfolio and to ensure the highest quality of our services.

One common name – VARUL – will represent the firm’s integrated network in all of these countries”, - affirms partner and lawyer Marius Devyžis.

According to Robert Juodka, the Managing Partner of VARUL in Lithuania, our firm will expand its collaboration with foreign companies requiring for experts who provide legal services in all three Baltic countries at the same time. “We feel this demand not only from foreign companies, but also from the Baltic businesses as they are expanding into neighbouring markets”, - says R. Juodka.

BCC paper Spring 2011

BCC Members’ News THE INSURANCE BROKER analyse the proposals, the rules (wording) you find appropriate and acceptable conditions for the damage suffered, to negotiate with insurers for damages and so on. All this can be a complex process of outsourcing experts in the field.

Insurance Brokers are used throughout the world.

Companies are able to gain the best prices for insurance cover in all company and partnerships whatever the risk they may require coverage off, if they require property cover, burglary, damages, partnerships, transport, specialist cover and many more risks that the client may require insurance for.

Insurance Brokers are not paid by their clients, they receive payments from the insurance company that they use on behalf of your company. Therefore they give the best advice to your company at no cost to a client. They offer options that Insurance companies are not able to offer, for instance at least three quotations by differing Insurance companies for the same cover required.

Does my company need an Insurance Broker. A question that is asked and is quite simple to answer using the history of this highly respected trade.

The insurance broker will provide you with the insurance market changes and innovations. The insurance Broker represents the client and protects his interests.

Insurance markets that work only through brokers, as an example Lloyds of London.

Established in the 17th century and covered Lord Nelson’s victory at the Battle of Trafalgar, through the devastation of the San Francisco earthquake in 1906, and on to the emergence of space satellite technology in the late 20th century, the story of Lloyd’s is both a long and a most interesting honourable one for over 300 years.

Your Broker will do everything possible to get bids from insurance companies that cover all the risks that are required by their clients, to explore and

The insurance Broker is not the seller who is interested to sell one or other insurance product to customers, he is his clients advisor, who will advise the client and protect their interests, incurring the minimum amount of premium cost for insurance cover to their client.

The insurance Broker is aware of what products are offered in the world market, which one or other product it’s advantages and disadvantages, whether or not they meet the customer needs. Should a client specifies or require insurance cover that by the nature of its activities is not covered by the local market, the insurance Broker has the ability to find such a product in world markets.

As an example, our insurance brokerage company - GrECo JLT Lietuva, assess threats to the customer’s business, the decision of how they plan to eliminate or reduce the occurrence of a disaster may call customer support 24 hours a day. JLT (Jardine LIoyd Thompson) is the largest UK and European Broker, they are quoted on the London Stock Exchange and ranked 139 on the FT Global 500 UK (2010).

13 Tax Directors HandBook 2011 recognises Law Firm Juridicon as one of the best tax advisors in the world The fifth edition of Tax Directors Handbook („Tax Directors Handbook 2011“) analysis the tax capabilities of law firm in 47 jurisdictions, including tax rates, the tax impact on business and revenue authority contact details.

The Law Firm Tax 100 is the only place to find details of the largest global law firms ranked by size of the tax department, and demonstrates how tax is weighted in each firm. And for the third year, this research highlights the best 250 individual tax advisers in the world (according to clients) in one of the sections of the handbook.

Law firm Marcinkevicius, Caikovski & Partners JURIDICON is indicated as one of the leading tax law firms in Lithuania. “Laimonas Marcinkevicius of Juridicon Law Firm’s tax planning advice is “highly professional”, but his tax litigation skills catch the eye, whether in defending a €1m VAT dispute, succesfully negotiating a €0.6m tax dispute for real estate investors, or battling a €2.5m tax claim for a engineering company.”

Communicating with the insurance broker, you are communicating with one person who will provide you with a proposal from several insurance companies and all types you specified.

The insurance broker will provide you with the insurance market changes, innovation. The insurance Broker represents the client and protects his interests.

Therefore, we suggest you take the time and money saving solution that the use of an insurance Broker service will add the extra security to your business and piece of mind in an important part of all trades and services.

SAS officially named Europe’s most punctual airline

“We are very proud to have officially been awarded the title as Europe’s most punctual airline.

All our staff, from the check-in and gate to the baggage handlers, work exceptionally hard every day to provide our customers with that unique service that characterizes SAS. With our innovative check-in solutions, being amongst the first airlines to introduce Fast Track security and being one of the world’s most punctual airlines, no competitor can come close to SAS in offering time-efficient air travelling,” says John Dueholm, deputy CEO, SAS.

SAS was also nominated as the World’s most punctual airline and was the only airline outside the AsiaPacific region included in the global category.

Scandinavian Airlines are officially crowned Europe’s most punctual airline by Flightstats, which awarded SAS with an On-Time Performance Service Award.

Flightstats track the performance of over 150,000 flights per day, archive the data for analysis and publication, and provide real time flight status to millions of travellers worldwide each day.

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The Indian Maharaja is of the finest Indian restaurants in Lithuania, offering food from experienced Head Chef Chander Shekhar in a cosy environment.

The restaurant has the capacity to seat up to 40 people and our business lunch is available for just 12 Lt. Tel. 8 662 20 440, 8 662 11 600 El paštas indurestoranas@gmail.lt Adresas: Trakų g. 4, LT-01132 Vilnius

Home delivery is also available and is free within Vilnius Old Town and to any address in Vilnius for orders exceeding 75 Lt.

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BCC paper Spring 2011

Presenting New BCC Members

14 BCC Corporate Member Western Union Processing Lithuania UAB Mr Cort Norman, Vice President, Accounting and Managing Director, EUROC Operations Center Western Union The Western Union Company (NYSE: WU) is a leader in global payment services. Together with its Vigo, Orlandi Valuta, Pago Facil and Western Union Business Solutions branded payment services, Western Union provides consumers and businesses with fast, reliable and convenient ways to send and receive money around the world, as well as send payments and purchase money orders. Payment services are offered through a combined network of 445,000 agent locations in 200 countries and territories. In

BCC Corporate Member Evolution office system

Rimas Vezbergas, Director Concentrate on your business – we will take care of the rest.

The Evolution office system is a brand new serviced office solution created specially for the Lithuanian market by an experienced real estate and business management team.

Our new modern business centre was opened in 2009. It is located in the northern part of Vilnius, in the district of Seskine, at the busy Ukmerges Street which is part of the Vilnius-Riga Highway. Due to its convenient location, you can reach bank branches, shops and other offices in just a matter of minutes.

Our business centre is one of the best in the market as it offers the broadest spectrum of services necessary for businessmen and women.

2010, The Western Union Company completed 214 million consumer-to-consumer transactions worldwide, moving $76 billion of principal between consumers, and 405 million business payments.

Western Union has recently established a European Regional Operating Centre (EUROC) in Vilnius, Lithuania; one of four global operations centers located around the world. The facility, which also serves as a Centre of Excellence, hosts call center services, AML Compliance and Accounting functions among other critical work streams, and complements similar functions in the global operations centers of Western Union. This center will enable Western Union to simplify and streamline business processes and improve operational productivity in pursuit of global strategies.

Company Contact details: Western Union Processing Lithuania UAB Balčikonio St. 3, LT 08247, Vilnius, Lithuania Tel: +370 5 259 02 14 Fax: +370 5 266 01 00 Email: LT-info@westernunion.com www.westernunion.com Whether you have a single workstation or a virtual office, the services that we provide on a pay-as-you-use basis will help you move away from the daily concerns that aren’t directly related to your business.

We have created an advanced working environment with 64 workstations, stylish meeting rooms, a conference hall for 60 people and a cosy breakout area, that will have a positive influence on the image of any company, showing its solvency and desire, where possible, to set high standards. We provide the latest IT, business and telecoms equipment. Our professionally trained team are dedicated to dealing with “day to day” issues, which allows you to get on with running your business, safe in the knowledge that we take care of the rest. Our clients range from one person start-up businesses to mobile professionals.

They include people who have recently started a new business, a project team that needs to be located off-site, branches of foreign companies and business people from local departments.

Company Contact details: Evolution Office System Ukmerges Str. 223, Vilnius Lithuania Tel: +370 5 2195300 Fax +370 5 2195330 E-mail: office@EOSystem.lt www.EOSystem.lt

BCC Corporate Member KPMG Baltics, UAB

BCC Corporate Member Grontmij | Carl Bro, UAB

Genovaitė Jakševičienė, Managing director UAB „GRONTMIJ | CARL BRO” is a branch office in Lithuania of Grontmij Group and provides consultancy services based on customer orientation, professional experience and social awareness. For our customers, this means creating tailor-made and long lasting solutions, which are based on modern technology and reflect individual customer preferences and needs. We provide intelligent consultancy throughout the project life cycle from inception to completion. For our customers and partners this means having a single supplier able to deliver integrated, sustainable multi-disciplinary solutions.

The aim of UAB Grontmij | Carl Bro is to provide optimal services through combining awareness of local conditions and opportunities with international know-how and expertise. Particular focus in recent company activities was put on development of a broad range of environmental and energy efficiency

BCC Corporate Member Law Offices Raidla Lejins & Norcous

Dr Irmantas Norkus, Managing Partner Law offices Raidla Lejins & Norcous Raidla Lejins & Norcous is one of the largest law firms in the Baltic countries – Lithuania, Latvia and Estonia. The firm has been operating under the name of Raidla Lejins & Norcous since 2008, after consolidating the operations and branding of three long-term Baltic partners: Raidla & Partners from Estonia, Lejins, Torgans & Partners from Latvia and Norcous & Partners from Lithuania.

The firm has a strong international outlook and provides legal services to foreign legal entities, including multinational enterprises, international banks and financial institutions. Our substantial domestic and international practice focuses on mergers and acquisitions, corporate advisory, dispute resolution, competition, real estate and construction, banking and finance, intellectual property and employment law.

BCC Corporate Member Stephen Young Senior Partner, KPMG in the Baltics and Belarus

Domantas Dabulis, Partner, KPMG in Lithuania

KPMG in Lithuania started its operations in Lithuania in 1994 and is proud to have served clients in Lithuania across all industry sectors since then.

KPMG has offices in Vilnius and Klaipėda.

The KPMG practices in Belarus, Estonia, Latvia and Lithuania operate as one business under one management team, enabling KPMG to serve clients with appropriate professional, industry, technical, language and cultural know-how across the countries and is one of the leading professional services firms in this region. The KPMG leadership team brings practical experience from Estonia, Latvia, Lithuania, Belarus, UK, USA, Czech Republic, CIS and Australia, and is able to connect local experience to local and incoming clients from around the world.

We could not adapt ourselves to meet the needs of our clients, the changing requirements of our profession and the demands of macroeconomic trends without a large team of high quality staff. We have approximately 100 staff in each Baltic country across all levels and pride ourselves on the quality and friendliness of our staff. We take a personal approach to our clients, seeking to come alongside as a business adviser, and bring independence and robustness to our work.We are also committed to

Rokas Kasperavičius Partner, KPMG in Lithuania

Reenpro, UAB

our communities and giving something back to them. KPMG strongly believes in behaving ethically, safeguarding the environment and building positive links with the communities around us.

KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We have more than 140,000 outstanding professionals working together in 146 countries around the world. KPMG combines a multi-disciplinary approach with deep, practical industry knowledge to help clients meet challenges and respond to opportunities.

Local leadership in Lithuania rests in the hands of Domantas Dabulis, Rokas Kasperavičius and Stephen Young. We would be delighted to meet with you and discuss how we can help.

Company Contact details: KPMG Baltics, UAB Upės St. 21, Vilnius, Lithuania Tel: +370 5 210 2601 E-mail: vilnius@kpmg.lt www.kpmg.lt

KPMG Baltics, UAB Klaipėda branch Naujoji uosto St. 11 Klaipėda, Lithuania Tel: +370 46 480012 E-mail: klaipeda@kpmg.lt

Mr Mindaugas Jaruševičius, Manager A range of quality products and services for a perfect solar photovoltaic Reenpro provides industrial solar photovoltaic (PV) systems, but the main offering is roof-integrated solar PV systems of 2-5 kWp for individual homes.

Reenpro provides turnkey services including feasibility studies, system design, installation and preparation of required paperwork.

Offering innovation to the market, Reenpro proposes a unique choice of project services and solutions including installation. With these complementary assets, Reenpro guarantees the most comprehensive solution, combining quality and customer satisfaction.

Specialized in building-integrated PV systems, Reenpro offers a range of solutions selected for their special features, performances and style.

This BCC paper is kindly sponsored by

projects in various sectors of Lithuanian economy, what enabled our company to gain substantial experience in project management and coordination, capital budgeting and investment appraisal.

Historical background: • UAB Carl Bro was established as a branch office of Carl Bro Group in Lithuania. In 2007, UAB Carl Bro changed name to UAB Grontmij | Carl Bro, due to Grontmij acquisition of Carl Bro. • UAB “Grontmij | Carl Bro” is LEKA (Lithuanian Energy Consultants Association) member and one of five initiators to found LEKA. • At 2009 May UAB „Grontmij | Carl Bro“operations have been certified under the three international standards: The Quality Management System Standard (ISO9001: 2008), Environmental Management System Standard (ISO 14001:2004) and Occupational Health and Safety Management System Standart (OHSAS 18001: 2007).

UAB “Grontmij | Carl Bro” has completed international projects for the World Bank, implemented a high number of projects funded by international organizations/ donors like NEFCO (Nordic Financial Corporation), DEA (Danish Energy Agency), EU Structural Funds.

Company Contact details: UAB Grontmij | Carl Bro T.Ševčenkos St. 14/16 LT 03223, Vilnius, Lithuania Tel: +370 5 231 28 88 Fax: +370 5 231 28 89 Email: info@gmcb.lt www.gmcb.lt Belarus Help Desk. Considering an increased interest from the clients towards investment opportunities opening up in Belarus, we have been successfully developing a Belarus Help Desk where Belarus qualified lawyers residing in Vilnius are employed.

New Practice groups. Changes in EU and Lithuanian legislation regulating the energy sector encouraged the recent establishment of the Energy Law Practice Group led by an acknowledged expert, attorney-at-law Mindaugas Jablonskis. Later the Public Procurement Practice Group was founded in Raidla Lejins & Norcous’ Vilnius office with the aim to provide assistance on public procurement processes and on ensuring timely and lawful use of EU funds.

The group is headed by a public procurement expert, attorney-at-law Jolita Rima Puškorienė.

Member of RR ALLIANCE. Raidla Lejins & Norcous is a member of the leading law firm alliance in Northern Europe – the RR ALLIANCE. The alliance has altogether approximately 250 lawyers in 5 jurisdictions and includes Roschier in Finland and Sweden and Raidla Lejins & Norcous firms in Estonia, Latvia and Lithuania.

The network offers cross-border solutions based on uniform quality and best practices of international standard by premier law firms in each jurisdiction.

Company Contact details: Law offices Raidla Lejins & Norcous Lvovo St. 25, LT-09320 Vilnius, Lithuania Tel: +370 5 2500800 Fax: +370 5 2500802 E-mail: office@rln.lt www.rln.lt The PV systems proposed are ideal for all kinds of construction projects, new-build or renovation: • private homes, • mall scale commercial, • industrial buildings, • offices and administrative buildings, •m farm installations.

Building integrated PV tiles system for residential roofing.

Modules come in a variety of shapes and sizes to fit all kinds of roofs.

Designed to fit in easily, quickly and with style, solar PV tile systems combine black backing, frameless edges, black fastening hooks and extremely fine elements for perfect integration.

Installed by overlapping, the PV solar tiles keep the roof watertight. Given the variety of formats available, they are suitable for every type of roof and ensure layout flexibility to incorporate chimneys, roof-windows or any other element positioned on the roof. The installation is easy with no grounding required, the tiles are fixed in place using highly-resistant fastening hooks.

Reenpro proposes economically viable solar PV solution tailored to individual customer needs. Tomorrow’s Solar PV solutions available today in Lithuania.

Company Contact details: Reenpro, UAB Kriviu St. 44, Vilnius, Lithuania Mob: +370 698 18218 E-mail: info@reenpro.lt www.reenpro.lt

BCC paper Spring 2011

List of BCC Members BCC Sponsor Members

BCC Corporate & Group Members

AAA, UAB (www.AAA.lt) / Legal services & Real estate development ARIJUS (www.arijus.lt ) / Transport and Logistic services

Bunnahabhain rep. by Mineraliniai vandenys, UAB Production of single islay malt Scotch Whisky www.bunnahabhain.com

AVIS Rent a Car & Leasing Company (Litideal, UAB) (www.avis.lt) / Car rental and leasing AVIVA LIETUVA, Joint Stock Limited Life Insurance and Pension Company (www.aviva.lt) / Life insurance and pension funds ĄŽUOLYNO Clinic (www.azuolynoklinika.lt) / The first private clinic in Lithuania for psychological problems, psychiatric disorders, alcohol and drug addiction treatment, long – term nursing. Patients can be consulted or hospitalised

Baltic Legal Solutions Lithuania Full service law firm www.blslawfirm.lt

www.kalevatravel.lt

DELOITTE Lietuva (www.deloitte.lt) / Audit.

Tax & Legal. Consulting. Financial Advisory.

Enterprise Risk Services

MICHAEL LITTLE IR KO, UAB (www.mikelittle.lt) / ACCA accountancy tutors

DELTA MANAGEMENT SOLUTIONS, UAB (www.deltamanagement.lt )/ Recruitment, Executive Search, Temporary Staffing, Personnel Assessment, Outplacement, Greenfield Staffing Support

MOTIEKA & AUDZEVIČIUS, Law Firm (www. ma-law.lt) / Legal services

EKO RIVI, UAB (www.ekorivi.lt) / Consultancy in municipal and environmental infrastructure EUROMONITOR INTERNATIONAL (www.euromonitor.com ) / Provider of strategic market research on countries, consumers and industries EVERSHEDS SALADŽIUS (www.evershedssaladzius.lt) / Legal services

Baltic Holidays (www.balticholidays. com) / Tour operator in the UK specializing in Lithuania, Latvia & Estonia

Evolution Office System, UAB (www.EOSystem.lt ) - Serviced office, RE Development. NEW!

Baltic Survey and Shipping Bureau LLP (www.bssb.lt) / Marine and Cargo Surveys, Valuation Surveys of the Vessels and Port Infrastructures, Average Agent.

NEW!

FINANCIAL MANAGEMENT GROUP, UAB (www.fmg.lt) / Accounting, tax consulting, legal advice

FIORENTINO RESTAURANT (Altomondas, UAB) (www.fiorentino.lt) / Restaurant/ Catering Services

BERNOTAS & DOMINAS GLIMSTEDT (www.glimstedt.lt) / Legal services

G4S Lietuva, UAB (www.g4s.lt) / Security Solutions covering cash handling, guarding, electronic security, system maintenance, installation, courier service.

BITĖ LIETUVA, UAB (www.bite.lt) / Telecommunications

BIURO PASAULIS, UAB (www.biuropasaulis.lt) (www.elektromedia.lt) / Office supplies, printing management and IT solutions

PricewaterhouseCoopers Assurance, Actuarial, Advisory, Tax and Legal services www.pwc.com/lt

BLACK & DECKER (Hardim, UAB) (www.blackanddecker.com ) / Black & Decker power tools distributor and service provider in Lithuania BNTP, UAB (www.bntp.lt) / Private equity investment; real estate development and investment; asset management; project management; facilities management.

British Council (www.britishcouncil.lt) / the United Kingdom’s international organisation for cultural relations and educational opportunities.

Strategic Staffing Solutions International Provider of information technology solutions.

Recruitment Services www.strategicstaff.com

BCC IT Partner

CID Baltic

BCC PR Partner

CAMIRA FABRICS Ltd (www.camirafabrics.com) / Contract seating & transportation fabric manufacturer CID BALTIC (www.cid.biz) / Development, services and implementation of enterprise level tailor-made software for financial, trading, media and production business line and public sector.

COWI LIETUVA, UAB (www.cowi.lt) / Consulting and engineering services related to building design & engineering, energy, environment, territory planning, topographic survey, hydraulic engineering, technical supervision, water and sewage systems design CORMACK CONSULTANCY BALTIC LT Ltd (www.ccbaltic.eu )/ Business development, export development, market researches, consultancy in investment, innovation, management DANSKE BANK A/S LIETUVOS FILIALAS (www.danskebankas.lt) / Banking services DEKONA, Evaldo Darškaus IĮ (www.dekona.lt) / Management Consulting: Operational efficiency, Lean, Six Sigma, process improvement

ODONTIKA (www.odontika.com) / Dental surgery

Vilnius International School (www.vischool.lt) / Pre-school, primary and middle school

PERITUS SPRENDIMAI (www.peritus.lt) / EU funding, project management and legal consulting

Vilnius International Airport (www.vno.lt ) / Airport operation and management

PUBLICUM, UAB (www.publicum.lt) / Public Relations, Public Affairs, Management consulting and training PZU Lietuva, UAB DK (www.pzu.lt ) / Insurance QUANTUM CAPITAL (www.qcapital.eu) / Investment banking & strategic advisory boutique Radisson Blu Hotel Lietuva (www.radissonblu.com) / Hotel, biggest conference and events centre, Riverside restaurant, Skybar, Lobby bar, fitness centre and saunas Raidla Lejins & Norcous law offices (www.rln.lt) - Law services. NEW! REENPRO, UAB (www.reenpro.lt) / We develop and construct Your solar energy park. Turn-key services. Green-field, roof-top, building integrated photovoltaic solutions REGUS (www.regus.lt ) / The the world leading provider of pioneering workplace solutions, with a large range of products and services from fully equipped offices to professional meeting rooms, business lounges and the largest network of videoconference studios

GLAXOSMITHKLINE Lietuva (www.gsk.lt) / Pharmaceuticals

SCAENT Baltic, JSC (www.scaent.lt) / Investment Enterprise

GrECo JLT Lietuva, UADBB (www.greco.lt ) / Insurance intermediation

Scandinavian Airlines SAS (www.flysas.lt) / Aviation

Grontmij/ Carl Bro ( www.grontmijcarlbro.lt ) - Engineering consultancy and design projects. NEW! HIGHLIFE, UAB / Manufacturing for export timber components for the furniture and construction industries.

HOTEL VANAGUPĖ (Eskom, UAB) (www. vanagupe.lt) / 5* Hotel, Modern Conference centre and luxury GOLDEN Spa centre, gourmet cuisine restaurant L’Ambra Rossa INOVA BALTIC, UAB (www.inovabaltic.com ) / Real Estate and Private Equity Investments and Management Intelligent Media, UAB (www.iq.lt) / Publishing JURIDICON, Law Firm (www.juridicon.com) / Legal services, tax consulting, corpo­rate services, legal project & risk management.

Member of Warwick Legal Network.

KAUNAS AIRPORT (www.kun.lt ) / Airport KAUNAS FREE ECONOMIC ZONE MANAGEMENT COMPANY (www.ftz.lt ) / Real estate development KLAIPĖDA FREE ECONOMIC ZONE MANAGEMENT COMPANY (www.fez.lt) / Management and development of Klaipėda Free Economic Zone KPMG Baltics, UAB (www.kpmg.lt ) - Audit, Tax, and Financial Advisory services. NEW! LE MERIDIEN VILNIUS & V GOLF CLUB (VILLON, UAB) (www.lemeridienvilnius. com) / Hotel, Leisure, Golf, Real Estate LawIN, Lideika, Petrauskas, Valiūnas ir partneriai (www.lawin.com) / Legal services

DUBLIN EDINBURGH LONDON LIVERPOOL FRANKFURT RHODES OSLO ALICANTE

Ūkio Banko Investicinė Grupė, UAB (www.ubig.lt ) / Investment projects; real estate; banking; life insurance and other financial services; industry, industrial engineering; logistics and sports VARUL, Law firm (www.varul.com ) / Legal services in all fields of business law in Lithuania, Latvia and Estonia

GENCS VALTERS, Law Firm (www.gencs.eu) / full service, general practice international business law firm with offices in Riga, Tallinn and Vilnius focused on tax, litigation, M&A, corporate, immigration, finance and intellectual property law

DUBLIN EDINBURGH LONDON LIVERPOOL FRANKFURT RHODES BRISTOL ALICANTE

ŪKIO BANKAS, AB (www.ub.lt)/ Banking

NOVOTEL VILNIUS CENTRE (Hekon, UAB) (www.accor.com) / Hotel services

PROFESIONALUS DIZAINAS (www.prodi.lt) / Graphic design, Corporate photography

FINREDA, UAB (www.finreda.net) / Corporate services provider. Legal, financial and business consulting & services including translations to Lithuanian and foreign companies

BANKSERVIS, UAB (www.bankservis.lt) / Bank and office equipment, security products and solutions

Best Western HOTEL VILNIUS (Naujasis Vilnius, UAB) (www.vilniushotel.eu) / Hotel, restaurant, conference centre, fitness centre

MIRROR SUPPORT SERVICES, UAB (www. mirroraccounting.lt ) / Accounting services

DPD LiETUVA (www.dpd.lt) / Distribution of business parcels within Lithuania & EU countries, logistics solutions for distribution

Baldai Jums, UAB (www.BaldaiJums.eu) / Solid wood furniture production

BALTIC SURVEYS (Baltijos Tyrimai, UAB) (www.gallup.com) / Market research

Kaleva Travel UAB Wholly owned by Carlson Wagonlit Travel Corporate travel management

15

Vilnius MONTESSORI pre-School (www.vms. lt) / English Language pre-School Western Union Processing Lithuania UAB (www.westernunion.com) - Financial Services. NEW! ZABOLIS PARTNERS (www.zabolis.com) / Finance and Real Estate

BCC Private Members Adrian North Aivaras Krasuckas Ben Harvey Christian Ranft David Telky David Holliday Dominykas Čeledinas Edmundas Aniulis Geoffrey Cohn Giedrius Jankauskas Giedrius Sabaliauskas Graham Keith Hugh Miles Thomas OBE, FCA Dr Helene Ryding Jeff Lewis John S. Gledhill John Lawrence Jouni Kaitila Jūratė Rusteikaitė – Bakšienė Marius Molotokas Mark Whittle Nikki Leftly Nick Viney Rajinder Kumar Chaudhary Ron Sheppard www.ryanair.com Sigitas Stankevičius Sigitas Žutautas Tony Bishop

KOS BIRMINGHAM PARIS GOTHENBURG TAMPERE OSLO BRUSSELS

SHAKESPEARE Boutique Hotel (Olizarų rūmai, UAB) (www.shakespeare.lt) / Boutique hotel, Sonnets restaurant, Globe bar, conference halls SIMEON, UAB (www.simeon.lt ) / Transport & Logistics SMITH GUTTRIDGE & ASSOCIATES (www. smith-guttridge.eu) / Business Psychology & HR Consulting including training/ coaching, career management and team and leadership development.

SORAINEN (www.sorainen.com) / Legal services in all fields of business law in the three Baltic countries and Belarus STOREBRAND BALTIC, UAB (www.storebrand.com ) / Financial services SWEDSPAN Girių Bizonas (www.swedspan.lt) / Particle board production TARK GRUNTE SUTKIENE, Law Firm (www.tarkgruntesutkiene.com) / full-service commercial law firm mainly focused on providing advice on commercial trans­actions in the Baltic region and Belarus

BCC Board as of March 2011 Honorary President Simon Buttw, HM Ambassador to Lithuania Chairman Chris Butler, PricewaterhouseCoopers Alistair Day-Stirrat, Odontika, Dental Surgery Amit Majithia, Cormack Consultancy Baltic Lt Ltd Geoffrey Cohn, Private member Mike Little, Michael Little ir Ko, UAB Raimundas Jurevičius, Baltic Legal Solutions Lithuania

Rimantas Tuskevičius, Eko Rivi, UAB

Tauragė Industrial Park (www.tip.lt)/ Industrial premises for rent in Southwest Lithuania

Robert Juodka, Varul, Law Firm

TRANSCOM Worldwide Vilnius (www.transcom.com) / International provider of outsourced services and solutions in the field of customer contact (client relationship management & credit management). Near shore outsourced services from Lithuania to UK and other European countries.

grupė, UAB

KOS

Sergejus Fedotovas, Ūkio banko investicinė Observer Ieva Binkauskaitė, British Embassy, UK Trade and Investment Section

The New Board for 2011-2013 will be elected on 31st March at the 12th AGM.

BIRMINGHAM PARIS

GOTHENBURG TAMPERE BRISTOL BRUSSELS www.ryanair.com

This BCC paper is kindly sponsored by