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I S S U E 2 M A Y - J U N E 2 0 1 3

Offshore ReportsFEATURES: MANX CLOUD - FATCA - PROJECT MANAGEMENT IN PRACTICE - RIGHT IN THE GAME - THE BUSINESS OF MARKETING - HANDSHAKES, KISSES & HUGS - PLUS: BUSINESS NEWS IOM/JSY/GSY

O F F S H O R E B U S I N E S S N E W S E V E N T S C O M M E N T S

Getting Ahead in the Cloud

I S L E O F M A N

www.wilkinsthejeweller.co.uk

THE VICTORY WATCH

L I M I T E D E D I T I O N

76 Strand Street, Douglas, Isle of Man IM1 2EWTel: 01624 690450 | Email: enquiries@wilkinsthejeweller.co.uk

KEY CONTACTS

CONTENTS

Manx Telecom 4G Mobile.....................22

Channel Islands News...........................24

Capita International Group................26

China.................................................................28

Appleby Offshore Reports...................30

Project Management In Practice....34

The Business of Marketing.................36

Handshakes, Kisses & Hugs................38

In the Agenda...

EDITORIAL & DESIGNSteve RedfordDD : (+44) 7624 249249steve@agenda.im

Disclaimer: All rights reserved. Any form of reproduction of Agenda Isle of Man Magazine, in part or whole is strictly prohibited without the written consent of the publisher. Any views expressed by advertisers or contributors may not be those of the publisher. Unsolicited artwork, manuscripts and copy are accepted by Agenda Magazine, but the publisher cannot be held responsible for any loss or damage. All material, copy and artwork supplied is assumed to be copyright free unless otherwise advised.

In The News-IOM..........................................2

FATCA...................................................................6

KPMG - Right In The Game....................8

Director Opinions.......................................12

Appointments................................................14

Getting Ahead In The Cloud................16

Sure C&W Innovation...............................18

ITEX - Manx Cloud.....................................20

16 36

Reliable solutions to your small business accountancy problems

Contact Ian Gribble - Tel:432452E-mail: enquiries@sigma-iom.com

www.sigma-iom.com

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Right Game

in the

in the

CLIENT RELATIONSLaura MacgregorDD: (+44) 7624 249249Laura@agenda.im

ADVERTISING SALESRachel MorrisDD: (+44) 7624 209726rachel@agenda.im

Dr Who, Bacardi Breezer and Ferrari were among the references employed by solicitor Patricia Barclay of Edinburgh-based firm Bonaccord when she gave two seminars on intellectual property (IP) organised by the Isle of Man Law Society.

Drawing on her experience from her years with pharmaceuticals company Pfizer and working with scientists, often in Central Europe, in other commercial sectors, including chemicals and cosmetics, Ms Barclay explained that her seminars were designed to give ‘a flavour’ of the legal implications of trademarks, copyright, patents and licensing. As an example, referring to nostalgia articles featuring old photographs, she said: ‘Just because it’s old, doesn’t mean it’s copyright free’.

Ms Barclay gave two seminars over two days and met representatives of the Department of Economic Development in anticipation of collaborative projects between the jurisdictions involving advocates’ clients. This was against the background of the Law Society’s wish to act as a catalyst to business to benefit the island’s economy and legal profession.

Entrepreneurs with organiser Charlotte Mason (front row, second from left), Kevin Cowley, PwC Partner (front row, third from left) and Peter Craig, PwC Partner (back row, second from left).

In The News IOM

2

PwC was delighted to sponsor the latest in a series of events which encourage entrepreneurs to consider locating to the Isle of Man and give them the chance to network with Isle of Man business people and influential residents.

The events are organised by Isle of Man resident Steve Hawkins and his UK-based colleague Charlotte Mason, and attract companies based around Europe. Each event, held at the Claremont Hotel in Douglas, offers six to eight entrepreneurs the opportunity to visit the Island, explore what it has to offer, present their businesses to potential investors and entrepreneurs and then network over supper.

Previous events have already led to several off-Island companies relocating to the Isle of Man and several more considering it. For this event there was representation from two Isle of Man start-ups too.

Equiom, a leading Aviation services provider will be exhibiting at the 2013 European Business Aviation Convention and Exhibition (EBACE) event in Geneva from 21st to 23rd May.

Representatives from the company will travel to Geneva to promote the Isle of Man as the premier jurisdiction for business aviation and to showcase the market leading services that Equiom provide. Attending this year will be VAT Director, Steve Cain, Aviation Consultant, Captain John Hills, Tax Director, Ali Stennett and Manager of Yachting and Aviation Services, Lisa Osland.

Speaking ahead of EBACE, Steve Cain commented; “EBACE is an essential business aviation event for Equiom, providing a global platform to meet industry friends, colleagues and clients in addition to seeking out new opportunities.

EBACE which is jointly hosted by the EBAA and the NBAA (National Business Aviation Association) is Europe’s premier aviation event and regularly attracts over 12,000 attendees and 500 exhibitors from around the world. The 2013 show is set to be the biggest to date with an extended exhibition area in addition to the usual features which include a static aircraft display.

The Equiom team will be located at EBACE in Hall 6 at Stand No: 1067.

Equiom jetting ahead in the Aviation Sector!

Mr Steve Cain

Minister encouraged by 2012 visitor figures

THE Minister for Economic Development John Shimmin MHK has expressed his satisfaction at the 2012 visitor figures which are contained within the 2012 Passenger Survey Annual Report.

‘Overall visitor expenditure increased by just over 5% to £103M over the figures for 2011. Of this, the expenditure by Leisure Visitors increased by 14% to £47.7M. This is particularly impressive as the figures in 2011 were boosted by the highly successful Commonwealth Youth Games.

The Department published its ‘Visitor Economy Strategy 2012-2015’ on 1 March 2012. This set out the need to drive up quality and exploit new markets to develop the Island as a year-round, distinctive and unique visitor destination.

The Tourism Strategy can be downloaded at: www.gov.im/lib/docs/ded/isleofmantourismvisitoreconomy.pdf

PWC Encouraging Entrepreneurs to the Isle of Man

IOM Law Society Provides IP Refresher Training

Patricia Barclay

Introducing Canaccord Genuity Wealth ManagementCanaccord’s global wealth management division has been rebranded Canaccord Genuity Wealth Management

Canaccord Financial Inc. (‘Canaccord’, ‘the Company’) are pleased to announce that its global wealth management division has been rebranded Canaccord Genuity Wealth Management. Accordingly, the Company’s wealth management businesses in the Isle of Man, the UK and other offshore locations, previously known as Collins Stewart Wealth Management, are now known as Canaccord Genuity Wealth Management.

As a result of this initiative, the Company’s wealth management operations in the UK, the Channel Islands, the Isle of Man, Switzerland, Canada and Australia now share the same brand.

In the last two years Canaccord has grown its wealth management platform into new markets. Today, the Company has formed an integrated global wealth management division that includes businesses previously known as:

• Collins Stewart Wealth Management (UK and Europe)

• The wealth management business of Eden Financial (UK)

• Canaccord Wealth Management (Canada)

• BGF Equities (Australia)

This branding initiative culminates the global integration of all wealth management businesses on Canaccord’s platform. The name Canaccord Genuity Wealth Management also better aligns the division with the brand of Canaccord. Genuity, the Company’s investment banking and capital markets division.

Isle of Man adds Monaco and Switzerland for yacht ownershipThe Isle of Man Ship Registry can now take vessels with ownership structures in Monaco or Switzerland thanks to legislative changes which were passed in Tynwald recently.

This is a strategic move in terms of superyachts which was introduced in response to requests by the yacht industry on the Isle of Man, which sees great potential for new business opportunities as a result of these changes.

The latest regulations extends the list of qualified owners already approved, to include citizens, bodies corporate incorporated in Monaco or Switzerland, or limited partnerships with their principal place of business in Monaco or Switzerland, as persons who are qualified to be the owners of Manx vessels.

The Department’s Political Member with responsibility for the Ship Registry, Alex Downie OBE MLC, said:

‘I am delighted to have been able to establish regulations to extend our ownership criteria to include the important financial centres of Monaco and Switzerland. The yacht management companies in the Island see great potential in this latest move and I hope to see more yachts financed in these countries flying the Manx Ensign in the future.’

Dick Welsh, Director of the Isle of Man Ship Registry said:

‘This is a very useful piece of legislation and a great example of the public/private partnership which exists in the Isle of Man.

Mr Dick Welsh

Mr Alex Downie

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Strong representation for Isle of Man in “start-up launchpad” event at major us gaming show

A social gaming network with strong links to the Isle of Man has won a prestigious contest at a major e-Gaming conference in San Francisco.

The recent conference was an all-round celebration for the Island gaming industry as three of the five finalists at the 2013 GiGse event have close connections with the Isle of Man and SMP Partners, one of the Island’s leading providers of professional services to the sector.

ISIS Lab was selected as the winner after making a successful pitch to a panel of expert judges in front of an audience of industry leaders. With a showcase b2c site operated by an Isle of Man based licensee, ISIS Lab was described by GiGse organisers as ‘a b2b and b2c social gaming network providing a low barrier for game developers to enter the iGaming business and offer their games for real money’.

The other companies with Island links shortlisted from 17 applicants were: Buddybet and Ever Adventure.

GiGse San Francisco is a major event in the calendar of many of the world’s top level gaming executives and the Start-up LaunchPad competition is designed to showcase and spotlight innovation at the intersection of gambling, social, mobile and other trends that might influence the future of gaming across the international stage. This is the second year Start-up LaunchPad has featured at GiGse.

www.gigse.com/gigse-start-up-launchpad

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Sure are helping Isle of Man businesses slash their roaming costs by launching a new app that promises to reduce roaming charges by placing voice and video calls over the Internet.

Smart Number is available for iOS, Android and Windows and Mac PC devices. It enables business travellers, when abroad, to make and receive video and voice calls on their mobile phone or via their laptop using a Wi-Fi connection, rather than the local mobile network. The Smart Number application is intrinsically linked to a customer’s mobile number and call package, so calls made using Smart Number are charged as though the customer was on their home network, and are deducted from the customer’s call minutes allowance in the usual way.

When Smart Number users are not in a Wi-Fi zone, the call is placed over the mobile network, as normal, so there is never any danger of missing a call.

As well as cutting roaming costs, Smart Number customers make and receive voice and video calls using their normal mobile phone number. This is a huge advantage over Skype and other Voice over Internet Protocol (VoIP) platforms which need separate accounts to be created, resulting in calls often having to be arranged in advance.

On top of the accessibility that Smart Number offers, it also provides complete flexibility because it can be loaded onto multiple devices so the user can choose whether to use a smartphone, tablet or PC when making or receiving a call.

The launch of Smart Number is the first stage of its development and it is hoped that in the future, instant messaging, presence identification (letting other users know whether you are available, busy etc) and BlackBerry and Windows Mobile versions of the app will be available.

To mark the conclusion of its four-year sponsorship of West Ham United Football Club Celton Manx, operator of the global sports book SBOBET, hosted a race day at Royal Windsor racecourse.

Members of the Celton Manx Management team welcomed club manager Sam Allardyce, players including Andy Carroll, Joe Cole and Matt Jarvis and many of the non-playing officials to the event held on Monday April 22nd.

Mike Stanton, Head of Business Development said: ‘The club’s schedule was such that a good number of players were able to attend. Around 40 guests in total enjoyed the hospitality and race programme. With some of West Ham’s leading players out on a balcony watching the racing there was great excitement among the 4000-strong crowd of spectators, one of whom was selected from a prize draw to visit the hospitality suite, meet the players and be presented with a framed signed West Ham shirt by Sam Allardyce.’

A competition for players to nominate their preferred horse for each of the six races on the card raised £1000 for Bobby Moore Fund for Cancer Research UK, a charity to which SBOBET has lent long-term support.

The occasion also saw Executive Director Bill Mummery, present the prize to the owner of the horse that won the feature race, one of four sponsored that evening by SBOBET.

Celton Manx and West Ham reach finishing straight

Captive Association’s spring 2013 Educational seminar highlights the sector’s continuing success

Over 100 members and other practitioners attended the recent Isle of Man Captive Association (IOMCA) Spring 2013 Educational Seminar at the Villa Marina in Douglas, sponsored jointly by Barclays Wealth and Investment Management and KPMG.

The seminar highlighted the sector’s continuing success, with industry experts discussing developments in the economic, legislative and regulatory climates to ensure key stakeholders are up to date with topical issues of interest and relevance.

The event, co-ordinated by IOMCA Executive Committee member Mark Willis, and featuring a range of presenters from organisations including Barclays and KPMG, was opened by Chief Executive of the Isle of Man Insurance and Pensions Authority, David Vick, who provided regulatory and legislative updates.

New Smart Number Technology Cuts Roaming Charges

In The News IOM

ELS (Event Lighting Services) and G-Force Displays have been working together for over 5 years to provide the Island’s conference and events industry with professional solutions incorporating lighting, sound, staging, banners, large-format graphics, back-drops and display stands, projection screens and custom-built conference sets.

ELS celebrates its 8th year of business and remains the Island’s premier hire company specialising in the supply of professional lighting, sound, staging and audio visual equipment for the conference and events community.

The company was set up by local lighting technician Justin McMullin, who has dedicated over 22 years to the lighting and sound industry both on and off the Island, including projects successfully delivered in London and the Channel Islands for clients within Financial Services and e-Gaming sectors.

Justin is joined by two highly experienced and motivated directors; Ricky Rooney and Craig Brown, who between them have access to a comprehensive resource of local freelance technicians who offer support with the larger scale events that happen on the Island such as the various Music festivals etc.

ELS are constantly investing in the latest equipment and hold some of the most advanced lighting and sound technology available on the market; names such as Marshall and Martin for example.

As Justin explains ‘We only buy the best

fittings as it is a false economy to buy cheap technical equipment - it’s just not reliable enough and a failure during an event is the last thing anyone wants. We have the Island’s only stock of battery powered wireless-controlled high-power LED up-lighters which have proved invaluable for lighting areas where there is no access to mains power or where running cables is not an option; at popular venues such as Castle Rushen and in glens. The lights will run for 24 hours on a single charge and can be controlled remotely from our lighting desk via wireless link. Being waterproof they’re perfect for all occasions whether indoor or outside’

‘Also new in our hire stock are the very latest LED gobo projectors which are ideal for corporate clients who want to project their logo or image onto a wall or the side of a building’

G-Force specialises in the design and installation of modular and custom-built exhibition stands and conference sets for Isle of Man based organisations who exhibit internationally. G-Force was set up in 2008 by Greg Pye and since then has supplied design, manufacture, installation and project- management services to clients within the Pharmaceutical, Financial Services and e-Gaming industries at trade shows in countries including France, Germany, Spain, UAE and USA.

As budgets are squeezed, ELS and G-Force together strive to maximize return on investment, by offering a range of high quality market leading products at competitive prices, as well as advice and service with a smile.

Equipment for sale or hire includes indoor and outdoor lighting, sound and PA systems, staging, large format LCD flat-screen displays, lecterns, projectors, front and rear projection screens, modular and custom-build conference sets, banners, pop-up displays, dry-ice machines, lasers, search-lights ... and more!

ENQUIRIES:

EVENT LIGHTING SERVICES LIMITEDwww.elsiom.com info@elsiom.com or call 07624 200101 / 499248

G-FORCE DISPLAYS www.gforcedisplays.com – info@gforcedisplays.com – or call 07624 225770

When it comes to putting on a conference or event there are two Manx firms who stand out from the rest for providing innovative audio visual support and event branding solutions.

Treat your Event to a professional makeover with the help of ELS and G-Force Displays

5

Feature

John Spellman, Director of Financial Services for the Isle of Man Government

Interviewed with Tanya Hanson.

In the UK, The Treasury estimates that tax evasion costs HM Revenue & Customs £4bn a year in lost revenues, which has prompted their championing of the U.S. Foreign

Account Tax Compliance Act (FATCA).

FATCA is a pivotal development in U.S. and UK efforts to improve tax compliance concerning foreign financial assets and offshore accounts.

The UK signed an agreement to implement FATCA rules in September last year, which was the catalyst in precipitating signatures from the Isle of Man, Jersey and Guernsey on automatic exchange of information agreements with London. Under FATCA, UK taxpayers with specified foreign financial assets that exceed certain thresholds must report those assets

John Spellman updates Agenda with news on how the agreement has progressed since the Isle of Man volunteered to lead the way in widening the net for greater transparency on international tax issues.

Tanya: So, what’s changed?

John: Early last year, we decided to enter into negotiations with the U.S. on a thing called FATCA, the Foreign Account Tax Compliance Act. That was an agreement to share an automatic exchange of information with the U.S. On the 9th December last year, we also agreed with the UK to provide the same information with due changes appropriate for the UK’s tax position, by doing so, effectively providing automatic exchange on UK resident accounts with the UK Government.

We are the first jurisdiction in the world to agree that type of exchange of information with the UK. Since then, we have been under negotiations both with the U.S. and the UK, formalising what is called a Model 1 inter-governmental agreement, which we feel is the best solution for the automatic exchange of information. We’re at an advanced stage with Annex 1, which defines the type of information we exchange and Annex 2, what is exempted from that automatic exchange.

Tanya: What exemptions are under discussion?

John: That is part of the negotiation. We are looking at various things. An example may be when information is already provided to a country in one form, we would simply duplicate that, for example; insurance contract information from the Isle of Man to the UK, we already provide that information under a thing called Chargeable Event Reporting. Another example is where there would be extremely low risk of tax avoidance or tax evasion, such as pension contracts. So, we’re in negotiation on those and also others that could be removed from the regime.

We were the first mover, summed up by GORK in the UK as having “shown great leadership”. The Crown Dependencies have also announced that they are going to provide automatic exchange of information.

We are comfortable with where we are and that the necessary exemptions and reporting regime will meet the needs of industry.

JOHN SPELLMAN, DIRECTOR OF FINANCIAL SERVICES

6

Tanya: How is the UK responding?

John: Very positively, we have a very good and practical working relationship with the UK. We have had representatives from the HMRC over to the Island to assist both ourselves - and industry - in interpreting some of the technical clauses, which was very welcome. The UK Government has also provided what is called an Isle of Man Disclosure Facility for those people who need to regularise their taxation affairs.

There is a regime - which they can now apply under - which gives them certainty of outcome and fixed penalties. They have been able to sign up from the 6th April 2013 and will be able to until the end of the calendar year, so it gives them the ability to tidy up their affairs.

Tanya: How does government believe FATCA has affected industry?

John: We did consult with each of the trade associations before we announced on the 9th December, so we had reasonably detailed conversations with all industries. When moving from one world to another, change is always feared by some. We expect an impact from certain aspects, but we also expect that impact to be smaller.

We have had feedback from both companies on the Island and also from media commentators off-Island, but they have been remarkably low in number so far. The government understands why people would be concerned about FATCA, but we are doing everything that we can to ensure that we provide the necessary information on how compliance may be achieved, but also on a reduction in

bureaucracy in this type of reporting, an example being; the Manx Disclosure Facility.

On the 13th March, we held a FATCA seminar presented by Deloitte, KPMG, PWC and Ernest and Young, called ‘Preparing for Automatic Exchange of Information’, with which we had over 300 delegates from the Isle of Man and over 100 people wanting to attend on the waiting list.

The April event will be based on fiduciaries and we want to use the technical information that comes from the UK and the U.S. as a bedrock for that presentation. It will cover trust reporting, international company reporting and also the responsibility of firms here, professionally managing assets on behalf of others.

Tanya: How is the bureaucracy being organised?

John: There is a number of ways that we are looking to address that, one is that the agreement that we are doing with the UK – as much as possible – will mirror the U.S. agreement, with the key difference being that instead of being for U.S. Citizens, it will be for UK Residents only, reflecting on the UK tax system.

Secondly, all of the reporting information that’s reported under U.S. FATCA, we will be looking to mirror. Having the same reporting techniques, same reporting systems under UK FATCA.

The government has also identified the various means of how you can exchange information – being Model 1, Model 2 or Direct Reporting – we have identified that Model 1 is the easiest way to report

that information, it offers a flexibility of reporting where the Isle of Man Government effectively collects the data and remits that on to the U.S.

Not for a moment do I think that Model 1 is an easy reporting mechanism, but what we have done is take the easiest route - or the route of least resistance - to ensure our businesses are well served both locally and internationally.

Tanya: So, now that the agreement has evolved, the system is taking shape and Guernsey and Jersey have followed suit, do you believe it continues to be seen as a “bold move”?

John: Yes, many may see this as a bold move by the Isle of Man, the Isle of Man Government accepts that this is a bold move, but we believe that automatic exchange of information is not just here for the Crown Dependencies and Overseas Territories, in short order, the UK and other developed nations will be asking for exactly the same information.

So, we see ourselves at the forefront of transparency and cooperation. This will secure the Isle of Man’s position for the long term.

There is a legacy opinion in the UK, but we now see the ability to amend ourselves is when people wrongly call us a ‘tax haven’. We will have automatic exchange of information with the UK, we’re a lower tax jurisdiction and we’re competitive and internationally transparent. So please, do your business here!

We will have

automatic exchange of information with the UK, we’re a lower tax jurisdiction and we’re competitive and internationally transparent.

7

Feature

RightGame

in the

On 11th April 2013, Gibraltar played host to the sixth in a series of KPMG eGaming summits that, for the past three years, have sought to build upon the eGaming industry’s already excellent reputation for cross-industry discourse by providing a forum within which key players can discuss the future of eGaming, its challenges and opportunities.

Russell Kelly

Director, eGaming Services

KPMG Isle of Man & Gibraltar

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The Isle of Man, having become one

to the eGaming industry in 2001, has remained at the forefront of eGaming, establishing itself as a pioneer in regulatory and licensing practises which place consumer protection and private/public sector cooperation as key drivers for

a competitive taxation framework, world leading telecoms and power infrastructures, and a responsive commercial environment, have created a culture of growth and innovation that has resulted in eGaming and, now more broadly, eBusiness, becoming the second largest contributor

home to the headquarters of some of the

developers, and hosting and service providers, while its international renown and commitment to licensing only the best and most socially engaged companies has

most respected jurisdictions for eGaming.

Table 1 – Tim Craine’s (former Head of eGaming, Department of Economic Development) licences and

to become the preferred provider to the sector locally was the recruitment of Archie

Isle of Man and Gibraltar, in July 2010. Archie came to us from KPMG in London

the Information, Communication and Entertainment practice with a focus on

this was with BDO in London, where he worked on the public listings of 888, Playtech and PartyGaming, amongst others.

Archie was instrumental, along with Micky

eGaming Summit in November 2010, and this has since been followed by a series of annual summits in Gibraltar and the Isle of Man, which may also extend to

Summit has been driven by key events and

revisiting of the Summit reports, each kindly

provides the reader with a fascinating potted history of the sector from November 2010 onwards – and it has certainly been eventful.

key trends for the sector included:

Increasing recognition and regulation in Europe: We were starting to see a shift in online gaming regulations in Europe; with state monopolies slowly giving way to privately owned websites, albeit only through pressure from the European Courts.

Industry consolidation: heralded increase in online gaming related M&A activity was beginning.

Established gaming sites were looking to license their software and services platforms to establish new revenue streams and gain market presence.

Land to web:body, the American Gaming Association (AGA), stated in March 2010 that it

regulated online gambling. Given that the AGA listed among its members

Sands, it seemed reasonable to take this statement as a statement of the

capitalise on their brand recognition and expand into the online market.

Emerging platforms: Gaming had started moving to the same mobile and social platforms that were exploding for casual games.

This was just the latest event in an initiative which, since early 2010 when the release of our global publication ‘Online Gaming – A Gamble or a Sure Bet?’ clearly signalled our presence in the market, has seen KPMG work increasingly closely with and for the gaming sector both on and off the Isle of Man.

© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.

Last 12 monthsLicences:

Licence Holders 45Approved 10Applications being considered 4

Economic Benefit:Licence fees (2011/12) £1.7mDuty (2011/12 online online only) £2.9mOther taxes* £13.3mLocal Spend* £164mEmployees* 688

* MeGA Survey 2012 forecast1/23/2013GO HEADER & FOOTER TO EDIT THIS TEXT 4

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eventful one for the sector both globally

consummation of the bwin/PartyGaming merger at the end of March 2011 was rapidly overshadowed by the actions of the US Department of Justice (DoJ) on what quickly became known as “Black Friday”.

three online poker companies – Absolute

was the most cataclysmic event to hit the online gaming sector since the US passed the Unlawful Internet Gaming

to process banking transactions on behalf of online gaming companies).

While Absolute Poker collapsed

drawn out over the six months following Black Friday, PokerStars continued to hold

poker site, and the Isle of Man regulator was credited with having provided the environment which supported Pokerstars to operate in a manner which protected its players where others had failed to.

of mobile gaming and many of you will now be accustomed to seeing live odds being displayed around the grounds at Premier League football matches. We soon heard operators reporting that up to 80% of wagers placed were coming from mobile devices, with most of these wagers

was little doubt that it was mobile that was driving growth for the sportsbooks – and industry observers were keen to see what mobile might do for other sections of the online gaming world.

with the UK announcement in early summer 2011 that it was intending to move to a point of consumption basis of taxation (ie. tax is levied where the gaming customer is based rather than in the location from which the service is supplied) – and there was immediate

cover at the 2nd Isle of Man summit in 2011, and there was keen interest in the views of the regulator on how the fallout from Black Friday was handled locally, how they maintained the focus on player protection, and the impact this has all

chip” regulatory regime. It was clear by November that the reputational impact both on Pokerstars and the Isle of Man had been overwhelmingly positive.

After the ups and downs of 2011, anyone hoping for a quiet 2012, however, was soon to be disappointed.

We were fortunate enough to have the

Summit in April 2012, and the industry greatly welcomed the opportunity to hear

period closed on 28 June 2012, it was apparent that there would be widespread resistance to it being introduced. Since the closure of the consultation period

announcement it has become apparent that, regardless of the representations made, the UK Government intends to implement this Regulation (and hence tax).

Later in 2012, the EU announced their action plan for online gaming, which was a hopeful sign that consistency may be about to enter the regulation of gaming in the EU. Commissioner Barnier and his team have expressly acknowledged that EU member

supply of all or certain types of online gambling services on the basis of public interest objectives – usually following the line of “protecting consumers, ensuring a

and protecting the integrity of sports”.

of the European Union (also known

countries introducing restrictions on the freedom of companies from other member states to provide services to recipients in other member states:

“Restrictions on freedom to provide services within the Union shall be prohibited in respect of nationals of Member States who are established in a Member State other than that of the person for whom the services are intended.”

October 2012, it would appear that Commissioner Barnier has reservations

some EU countries in their attempts to restrict the supply of gambling services by

approach has generated a fragmentation of piecemeal regulation and introduced much additional cost to operators with little or no apparent improvement in any of the public interest objectives listed above.

Right in the Game

Here in the Isle of Man, a key issue was the attitude of the local banking community. It had become increasingly hard for operators to access the local banking services they needed, so our delegate list and speaker programme for that first summit in late 2010 reflected a desire to educate service providers about the extent and effectiveness of the regulation of the gaming sector, particularly with regard to KYC and player protection.

10

It is to be hoped that the establishment of the expert group heralded by Commissioner Barnier’s announcement will indeed facilitate exchanges of experience on regulation between member states and develop a “well regulated, safer online gambling sector in the EU”. This must surely be the objective of all responsible operators in the sector.

As we moved into 2013, the KPMG eGaming team remained busy – 6 of us attended ICE in February, joining 18 other local providers on the Isle of Man stand. This is the first time we have attended as an exhibitor rather than a delegate, and we found it a very positive experience being on the Government stand - we hope to be stand regulars in future years, at ICE and similar events.

As this year has progressed, we have seen further developments regarding the UK’s intentions to introduce their point of consumption tax, as other key jurisdictions have begun to take public stances against it. The statement issued by the Gibraltar Gaming and Betting Association in late January appealed to the UK’s Department

of Culture Media and Sport to call off its plans to introduce the new regime - and it gave notice that it is serious in its intention to fight the bill, advising:

“In the event that the Government determines to proceed with the proposed legislation and fiscal reforms, the GBGA will regrettably have little alternative but to institute judicial review proceedings to challenge these measures.”

The Association has the necessary financial clout to make good on this threat, having raised a £500,000 war chest from its 24 member companies for the fight. The GBGA characterised the proposed changes as discriminatory and disproportionate, saying they were based on a flawed perception of the competitive threat to British-licensed companies. On a similar note, the Gibraltar Government also raised objections to the UK’s intentions, with Phill Brear (Head of Gambling Regulation) claiming that the proposals contradicted “reality, research and the evidence base”.

Gibraltar’s David v Goliath stance was augmented by Malta’s recent filing with the European Commission of a complaint which, whilst the detailed content has not

been made public, is believed to argue that implementing a law such as the proposed UK point of consumption tax would be against EU legislation because it would give an unfair advantage to genuine UK ventures over companies based outside the UK, thereby undermining the European principle of free movement of services between member states. Shortly afterwards, on 4th March, the European Commission announced it was extending its review period for the proposed tax.

The next summit, in the Isle of Man is booked for Tuesday 12 November – so the game goes on...

Right in the Game

11

Director Opinions

InBusinessDirector Opinions

I’m optimistic about the Isle of Man’s economic future, very optimistic. I can feel a real buzz as I speak with technology companies around the Island. Over the last twelve months I’ve met with a number of new business owners in the technology industry from e-gaming, app development, finance, cloud hosting, internet trading and many more. In fact, I host of weekly meeting of business people who get together to discuss new ideas and how they see things in the future. We’re all very positive about the next few years and working hard to do our bit for our Island’s economy.

Nathan Cafearo | Director | BEST Group

In your view, why is the Island is so well placed to take advantage of the “technology revolution”?

Three reasons.

Firstly, the Isle of Man government has an extremely helpful and “quick to act” attitude towards the promotion of companies across the board. This is particularly advantageous to technology companies, where the boundaries change on an almost daily basis. I would urge anyone working in business on the Isle of Man to make themselves known to the Department of Economic Development, they are there to help and really do so, but can only help if they know what business exists on the Island.

Secondly, there are a few groups of business people who are now beginning to come together to unite towards the common goal of making the Isle of Man a centre for technology excellence. I’ve noticed things like access to investment for technology projects, more active Angel Investor networks and increasing number of networking events. I spend a reasonable amount of time in London, and there is an area around Shoreditch, which has been dubbed the “Silicon Roundabout”. There is a real buzz, there are some big international companies, you can feel it in every coffee shop and bar. It would be great to see a “Silicon Island” atmosphere over here, and I can already feel it happening.

Finally and let’s be honest, the taxation environment is a big advantage. The larger economies of the world could learn a lot from the Isle of Man. Allowing higher earners to keep more of their income doesn’t lead to massive social problems, it leads to greater investment and more incentive for everyone to work hard. I’m certain that tax avoidance is not an issue for the Isle of Man government at all. All high earners would view 20% to be a fair contribution to society, and would pay their taxes in entirety.

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Exactly what is this revolution that you talk about?

Well, most people will be aware of the “.com” boom and bust that happened around the late nineties. I believe that was essentially caused, not by over excitement, but premature excitement. The technology just wasn’t quite good enough then and people weren’t ready for it there masses. We are now at a point where the kinds of technologies that created such a fuss back then are now becoming part of our everyday lives. Although I trained as a computer programmer, I’m actually personally quite a late adapter to technologies. But even, I now have a Windows phone, use Skype to speak to friends around world, buy everything from Amazon and I only ever watch TV on iPlayer.

In a business context - and this is the part that I feel is relevant to the Isle of Man - my group of companies (BEST Group) is totally focused around digital technology. We are now able to perform some pretty complex arrangements for clients who find us through our internet marketing, engage with us through a telephone conversation, supply us with all of their financial records, all without ever having physically met anyone from our office. We use cloud technology to host our server functions based on the Isle of Man. We spend somewhere in the order of £1m per year marketing the group digitally through PPC, social media, sponsorships, etc, and all of the business generated is transmitted down a phone line and dealt with on the Isle of Man.

The Isle of Man has long transacted financial business around the world, but the business model has always involved a long an expensive supply chains of introducers, agents, processors, etc. Our clients come to us directly so our commission payments are low and we have very low overheads for IT infrastructure, due to our early adaptation of cloud technology. I believe that any companies on the Island who embrace these changes and aim to set the standard - as we do - will be at a huge competitive advantage over those in other jurisdictions.

What is the BEST Group?

I have put together a group of companies based around the mantra of “Digital, Digital, Digital!”. We have incorporated an internet Marketing business, which has a very unique business model. A company can become a client of ours without any upfront cost to themselves at all. We will create a marketing platform for them, free of charge, test it, bring in business, and if it is successful, and only then will we look to an arrangement whereby we can work for that client. It’s a zero risk strategy for them. A “no win, no fee” if you like.

The internet Marketing arm feeds business into the group; BEST Practice Accountants, BEST Corporate Services, BEST Recruitment, BEST Marketing, BESTPAY, and Victoria Claims.

There’s a real buzz in the office, we’ve taken on 25 new people in the last 12 months and are looking forward to the next few years having an involvement in e-Gaming, app funding and development, ‘Cloud’ and ‘Crowd’ ventures.

If anyone would like to know more about what we do please do contact me, Nathan@bestpay.co.uk

What’s the BEST investment you’ve ever made?

This is a really interesting question and one that I get asked all of the time. I spend five to ten hours a week researching and studying different investments and types of investment. I have done for a long time. My advice would be before you invest any money in anything, you need to invest an equal amount of time to learn about it. You really do!

To answer your question; my best investment - and the best investment that anyone can ever make - is to buy your first book in the area that you wish to invest in. If you’re interested in that area, then you’ll follow it with a second and third.

I was actually given a book about six years ago called ‘Rich Dad, Poor Dad’ by Robert Kiyosaki. It is an interesting book to read about his life and how he made his millions, but the real underlying theme is the maths around money and business. It’s maths that is so simple that it’s almost entirely overlooked. Let me give you an example (using approx calculations):

You earn £10,000 in your salary and I generate £10,000 of revenue in my company. We both want to invest that money. You take your £10,000 of salary. After Tax and NI gives you about £7,500. You put that in a fund which gives you 10% annualised (not bad). After 12 months you’ve got £8,250.

I take the £10,000 of revenue, reinvest that into online advertising - which is fully tax deductable - so I get £10,000 worth of advertising. Now I know that kind of advertising returns me over 100%, but let’s say it only returned 25%. So I have at the end of the year either £12,500 to reinvest in more advertising or £9,375 if I take it as earnings.

That’s great, but the interesting thing happens when you compound the calculation over ten years.

After ten years, you would have £19,453 in your well performing investment fund.

But I would have £93,132 in my business account.

And that’s the simple maths explained in ‘Rich Dad, Poor Dad’. That’s the reason why business owners make more money.

That knowledge came to me for an investment of £7.99.

I am now working with the Isle of Man Angel Network. If you are either a potential angel investor or a business person looking for support with a new venture, please contact me either by email or on 07624 201140.

Reasons to be Cheerful

1-2-3Nathan Cafearo | Director | BEST Group

Contact Nathan with questions or to request information: Nathan@bestpay.co.uk

Would you like to express your views in Agenda? Email: myview@agenda.im

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The Isle of Man’s Premier Business VenueFor conferences and exhibitions, the Villa Marina offers unrivalled facilities and expertise.

The Royal Hall is the only venue in the Island capable of hosting over 1000 delegates and offers an impressive arena to represent your brand on a large scale. Flexible enough to host dinners, exhibitions, lectures or any other function you require, the Royal Hall is the ultimate business venue in the Isle of Man.

With great views of Douglas Promenade, the Colonnade Suite and Promenade Suite are impressive venues to host exhibitions, events, meetings and conferences. Hosting up to 200 delegates, both suites have internet access, flexible layout options and are serviced by their own dedicated bar.

As well as our larger rooms, the Noble Suite is perfect for small meetings or a breakout room from a large conference. It is fully web enabled, fitted with an LCD television and can comfortably seat 20 delegates.

The Broadway Cinema is the Isle of Man’s ultimate presentation venue.Capable of hosting up to 150 people, nothing makes a big impression at presentations than a cinema screen, HD digital projector and the best surround sound system in the Island.

So whether you need to give and impressive presentation, hold a major conference or just need a fully equipped and comfortable room for an important meeting, the Villa Marina is the perfect venue for your business.

To make an enquiry about hosting your event at the Villa Marina, call us on 01624 694578 or email enquiries@villamarina.gov.im.

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Appointments

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Manx Telecom appoints new Chief Technology Officer and Customer Service Director

Manx Telecom has appointed a new Chief Technology Officer and Customer Service Director who has a CV that includes senior roles with eircom Group and Vodafone UK. Kevin Paige has more than 30 years’ experience in the telecoms and IT industries and joins the Island’s premier telecoms provider having spent the last two and a half years in Dublin with eircom - Ireland’s principal provider of fixed-line telecommunications services. He was eircom’s Director of Access Networks and Director of Central Technology Operations, managing approximately 700 staff with significant budgetary responsibility for investment and operations. Among key achievements at eircom he established Ireland’s first mobile network sharing agreement, defined and commenced execution of eircom’s fibre based broadband rollout to one million homes, and led the business transformation of eircom’s group technology function.

From 2007 to 2010 Mr Paige worked for Level (3) Communications as Senior Vice President Technology Services - Europe. As part of the European board he managed a team of more than 200 staff spread across 42 European markets in more than 20 countries. During three years with the company the European business achieved industry leading growth of more than 20% YOY.

He worked as Chief Technology Officer and Chief Network Officer during a year with Bulldog Broadband (now Cable and Wireless Access), Bulldog were the pioneers in offering broadband services via Local Loop unbundling building an extensive network across 800 BT exchange areas and prior to that spent five years with Vodafone UK. Senior roles with Vodafone included Director of Telecommunications Systems, Executive for Core Network and Transport Services, Head of Enterprise IT Network Services, and Head of IT Systems and Infrastructure Services. He

Isle of Man Advertising & PR welcomes new team members

Isle of Man Advertising & PR is delighted to welcome two new faces to its team.

Philip Thomson has joined as Account Manager, while Hannah Francis has been appointed as an Account Executive. They will play key roles in helping to oversee a broad portfolio of the agency’s major clients.

Philip, 38, joins Isle of Man Advertising & PR from Duke Marketing, where he spent six years as Copy Editor responsible for everything from website and social media content to writing for catalogues and DVD sleeves.

Before that, Philip worked as a reporter at Isle of Man Newspapers for 10 years, building strong links with key figures on the political and business scenes.

After completing his A Levels at King William’s College in Castletown, Philip achieved a Joint Honours degree in Ancient History and Archaeology at the University of Durham and studied journalism in Sheffield.

Hannah, who was appointed in February, brings a strong marketing background having worked for major businesses including Microgaming, CMI and, most recently, Friends Provident.

The former Ballakermeen High School student completed a marketing degree at Leeds Metropolitan University before returning to the Island to pursue her career.

Managing Director, Helen Summerscales said: “I am confident that Philip and Hannah will be a big hit with our clients. They bring with them some hugely valuable and complementary skills to our team that will undoubtedly help us to grow the business.

Philip and Hannah have hit the ground running – I’m delighted with our new management team line-up and feel we are well-positioned for the future.”

New MD for Scottish Widows Isle of Man

Juan Clarke has been appointed managing director of Scottish Widows in the Isle of Man.

Mr Clarke, who was appointed to the boards of the CMI Group of Companies in March 2012, joined the company in 1991 when it traded as CMI. It later became part of the Lloyds Banking Group and subsequently rebranded as Scottish Widows.

Mr Clarke, who joined CMI after nine years with Barclays Private Bank, said: ‘While at Barclays I forged a valuable working relationship with CMI colleagues running the CMI High Income Fund. In 1991 I moved to CMI which had been operating for just four years to lead its flourishing fund administration function. As the company continued to grow I was afforded a broad range of opportunities to develop my skills in a variety of disciplines and in management and leadership.’

began his career in telecoms in 1982 with an engineering apprenticeship at British Telecom where he worked for six years. His CV also includes technical roles with British Airways and Barclays Bank Group. Commenting on joining Manx Telecom, he said:

“I’m delighted to join Manx Telecom as a member of the operating board. Manx Telecom is very well recognised for industry leadership and innovation and I’m looking forward to continue to grow that reputation alongside ensuring that our products and services continue to deliver high levels of customer satisfaction. With the responsibility for all technology aspects of Manx Telecom’s product development, and service delivery on and off Island, this is an excellent opportunity to contribute to the growth of an interesting and successful business.”

The Isle of Man’s Premier Business VenueFor conferences and exhibitions, the Villa Marina offers unrivalled facilities and expertise.

The Royal Hall is the only venue in the Island capable of hosting over 1000 delegates and offers an impressive arena to represent your brand on a large scale. Flexible enough to host dinners, exhibitions, lectures or any other function you require, the Royal Hall is the ultimate business venue in the Isle of Man.

With great views of Douglas Promenade, the Colonnade Suite and Promenade Suite are impressive venues to host exhibitions, events, meetings and conferences. Hosting up to 200 delegates, both suites have internet access, flexible layout options and are serviced by their own dedicated bar.

As well as our larger rooms, the Noble Suite is perfect for small meetings or a breakout room from a large conference. It is fully web enabled, fitted with an LCD television and can comfortably seat 20 delegates.

The Broadway Cinema is the Isle of Man’s ultimate presentation venue.Capable of hosting up to 150 people, nothing makes a big impression at presentations than a cinema screen, HD digital projector and the best surround sound system in the Island.

So whether you need to give and impressive presentation, hold a major conference or just need a fully equipped and comfortable room for an important meeting, the Villa Marina is the perfect venue for your business.

To make an enquiry about hosting your event at the Villa Marina, call us on 01624 694578 or email enquiries@villamarina.gov.im.

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technical support

onsite parking

state of the art presentation equipment

flexible setup options

breakout rooms

dedicated bars

expert support team

Feature

WORDS STEVE BURROWS

Getting Ahead

in the CloudRead almost any business magazine or website and there will be articles exhorting business people to get into “The Cloud”. Cloud technology has been the latest and possibly greatest IT fad for the past few years, and looks like continuing that way for many years to come - but why, what is it and what’s it good for?

Starting off with what it is: for IT providers Cloud is a rental / outsourcing business model whereby instead of buying and operating your own IT you instead put it into the hands of an IT provider, either having them host and run your IT within their datacentres somewhere on the Internet, or using their IT delivered to you over the Internet.  It can take several forms; public cloud, private cloud and hybrid cloud (a combination of the two). You don’t need a server room, and you don’t need systems operators; your IT personnel needs are reduced to those who actually make the IT work within the business. You access your IT over an Internet connection using ordinary desktop and laptop computers. Ideally, but not always, you buy access to the IT on a Pay As You Go basis.

The Cloud can also be delivered at several levels: typically these are Infrastructure as a Service (IaaS - basically naked servers and their networking), Platform as a Service (PaaS - servers with operating systems, databases, web servers etc.),

and Software as a Service (SaaS - Software applications delivered via the Internet, typically in a web browser).

So why the Cloud?  As a business proposition for IT suppliers it’s great; they get to rent you services instead of you buying the hardware and software and rolling your own IT. Once you’re in it is logistically difficult and painful to get out, so you become a sticky customer providing the business with a reliable forward income stream. Organisations are demanding about IT, always needing changes, so there are many opportunities to sell additional services and you are largely tied in to the supplier. The standard charges typically include the services that you need in order to use the supplier, but any services you might need to ensure your independence or to protect yourself against the failure of the supplier are extra. For your business the Cloud offers obvious financial benefits: typically reduced Capex, you don’t need to buy server hardware etc., where it exists the

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Pay As You Go model means that you can reduce costs during quieter periods and increase capacity during peaks, you don’t need an army of server specialists, and the supplier takes responsibility for keeping the services available and up to date. 

Don’t use “your” systems. The reality is that for all but the most basic services - email, file storage etc., the cloud is a difficult place to run your own IT. When you look at more sophisticated IT systems, such as CRM (Customer Relationship Management) or ERP (Enterprise Resource Planning), trying to host your own systems in the cloud is fraught with issues. The more sophisticated business systems require significant expertise and tailoring to make them suit your business, and most Cloud suppliers are not in business to understand your business. It is common to find that businesses which move their CRM, ERP or other “enterprise” systems into the Cloud reverse their decision after a year or two; having these complex systems under the control of

a third party rarely works except for the least demanding businesses who can use the system “out of the box” without customisation or configuration. The Pay As You Go model also doesn’t work very well with most enterprise systems because the licensing model of the software was never intended for Cloud or rental.

Use theirs. This is not to say that you can’t successfully have CRM or ERP in the cloud - you can, but probably not using “your” systems. There are several very good suppliers of Cloud based enterprise systems, and what they all have in common is that they have created their own enterprise system offerings designed from scratch to work in the Cloud. Instead of running your IT in the Cloud, you migrate to using their IT. For example you might choose to move from using the Goldmine CRM system on your own servers to using Zoho CRM in the cloud, or at a more sophisticated level move from Microsoft CRM to Salesforce.com. Because these Cloud based enterprise systems are explicitly designed for the Cloud they are set up to allow customers to tailor them to their business needs without access to the servers, and to provide a genuine Pay As You Go service whereby you only pay for what you use or need. There can be no doubt that this Software as a Service approach works very well. It has downsides, perhaps limited functionality compared with the most sophisticated and expensive “in-house” systems, and your data is in their hands, but the reality is that most organisations don’t need or use the most sophisticated systems, and the location and format of your data is only an issue when you want to move to another system.

What’s Cloud good for?  It is easy to see that if the way it is exploited has been well thought through the Cloud can offer real financial savings to businesses, reducing the cost of their access to technology. Is this a good reason to adopt the Cloud? Probably not. In most organisations the cost of IT is marginal, under 10% of operating costs. A 20% reduction in IT cost might, at some risk, yield a c. 1% improvement in profit margin, nice to have but not worth significant risk and disruption. Nevertheless there are several very good reasons to look seriously at Cloud.

Location and mobility. An organisation with its IT in the Cloud can work almost anywhere - in the office, at home, on client premises, in an hotel ... Staff are empowered to work wherever they are, where the demands of business take them..They are not disadvantaged or disenfranchised by being out of the office, it is entirely reasonable that an organisation can exist and work without any physical premises other than a correspondence address for snail mail.

Business Continuity. So the office goes up in smoke, a helicopter falls upon it or the nearby gas main breaks... So what? With the organisation’s IT safely stored in the cloud the staff can carry on working from home, book into an hotel or rented office. Apart from the water cooler conversations the life of the business can carry on as before.

Flexibility and scalability. We need another 20 people to handle the response from this campaign... With in-house IT there must be the provision of additional capacity, which has to be scoped, purchased and installed. In the Cloud we merely add extra accounts for the new staff, in a few minutes, and our monthly bill for Cloud services goes up a bit. Similarly when we no longer need them we close the extra accounts and the bill goes down. If we launch a special offer on our website and happily get massively more demand than anticipated we can simply tell the Cloud provider to give us more computing power so that the website doesn’t crash under the load.... instead of having to give public apologies in the press.

Collaboration. Many Cloud services have been explicitly designed to be used by workers who are geographically scattered. It is possible for multiple people, in different places and on different computers, to work on and edit the same document or spreadsheet at the same time, while discussing it by phone or video conference. Collaboration and cooperation between the head office in Douglas and the Hong Kong branch office or the travelling relationship manager visiting Chicago becomes feasible and productive in a way that has never been possible with traditional productivity tools.

Using the Cloud has the potential to revolutionise the way we look at IT in business, to make our businesses more agile, more distributed, more resilient and more productive. These are the real benefits of the Cloud, and they have great value, so in making a decision about Cloud computing we should be looking at the positive benefits it may bring if we exploit it thoughtfully, and not merely the marginal savings we might make in reducing some in-house IT costs.

And yes, this article was written in the Cloud....

(Steve Burrows is principal consultant with SBA Ltd., and a widely respected expert in business exploitation of IT. He is a Chartered Director, Fellow of the Institute of Directors, Chartered IT Professional and Fellow of BCS The Chartered Institute of IT. www.sba.co.im)

Using the Cloud has the potential to revolutionise the way we look at IT in business

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Innovation is the bedrock of the technology industry and Sure has been at the forefront of bringing the latest innovations to the Isle of Man. This history of innovation is set to be enhanced following the sale to the Batelco Group of Cable & Wireless Communications’ Channel Islands and Isle of Man business.

Andy Bridson, Chief Commercial Officer of Sure, Isle of Man, looks at some of the innovations past, present and future that Sure has and will be championing in the Island.

That Sure has been a pioneering organisation in the Isle of Man is a bold claim but it is also one that has strong foundations.

Sure was the firm that created a sustainable competitive market in network services in the Island. This was at a time when many believed that the Isle of Man was too small to maintain a truly competitive marketplace. Not only have we proven that competition can be successful but we have shown that it delivers enormous benefits in terms of price and choice of services.

The initial investment that Sure made in its mobile network is continuously increased as we upgrade the network and launch new services, continuously seeking to provide our customers with true Islandwide coverage.

Sure however, has always looked beyond the mobile space, believing that it is only by providing the whole suite of telecom services, that we are able to give our clients the best prices attached to the best and newest services.

Looking beyond the infrastructure, you

can also see that Sure has delivered new ideas to Islanders and Island businesses, helping everyone to make the most of technologies that were previously unavailable in the Isle of Man.

Innovation that cuts costs

In the world of mobile, we have recently launched a service aimed at cutting the costs of roaming for our business customers.

Smart Number is a new service available for iOS, Android as well as Windows and Mac PC devices. It enables business travellers, when abroad, to make and receive video and voice calls on their mobile phone or via their laptop using a Wi-Fi connection, rather than the local mobile network. The Smart Number application is intrinsically linked to a customer’s mobile number and call package, so calls made using Smart Number are charged as though the customer was on their home network, and are deducted from the customer’s call minutes allowance in the usual way.

As well as cutting roaming costs, Smart Number customers make and receive voice and video calls using their normal mobile phone number. This offers a huge advantage over Skype and other Voice over Internet Protocol (VoIP) platforms which need separate accounts to be created, resulting in calls often having to be arranged in advance.

On top of the accessibility that Smart Number offers, it also provides complete flexibility because it can be loaded onto multiple devices so the user can choose whether to use a smartphone, tablet or PC when making or receiving a call.

Innovation isn’t however, just about the services that we offer. It’s important that we also look at ways to push our whole industry forward and in terms of green energy, this is something that our business clients also welcome. As a result, we have begun trials of a hydrogen fuel cell portable energy device.

The device, which generates clean energy, has been designed to meet a growing demand for portable power driven by an

ever-increasing need for greater amounts of power for “on-the-go” electronic devices, such as smartphones.

Over the next few months, Sure will ask selected customers to trial the device and provide feedback that will provide our partner, Intelligent Energy, with key data for the fuel cell’s future development. Ultimately, Islanders will be playing a crucial role in developing a product that has the potential to transform the environmental footprint of mobile devices.

Batelco and Beyond

At the beginning of April, we received confirmation that Sure had been acquired by Batelco, the Bahrain-based telecommunications provider.

This is an exciting step forward for Sure as Batelco has a long history, dating back almost 140 years, of delivering high quality communications services to its customers, who remain the focal point of the company’s mission. It is the desire to bring the latest products and services to its clients that has driven Batelco as an innovator in the jurisdictions in which it operates and it does so in a number of ways.

As well as having launched Bahrain’s first 4G mobile network, Batelco supports a “Technovation” competition in the Kingdom. This is designed to encourage young people to showcase their innovations within the field of ICT. The winning teams and individuals will be given the support they need to further develop and commercialise their ideas through admittance to Batelco’s own Entrepreneurs’ Zone and via incubation services provided by the Bahrain Development Bank.

Initiatives like this are helping to transform Bahrain’s economy and it is through community engagement as well as customer-focused innovation that Batelco and Sure will help our Island build a vibrant and prosperous future.

Building on a foundation of innovation

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MANX TELECOM

leads the way with 4G mobile 4G (LTE) mobile broadband + The Cloud were both hot topics at the Mobile World Congress expo in Barcelona. The congress is an annual international gathering for the mobile communications industry, and it always gives a unique glimpse into how technology will develop in the year ahead.

With both 4G + The Cloud high on Manx Telecom’s agenda, delegates from the Island’s premier telecoms company returned from the Congress with an even greater commitment to push forward with these technologies. Mervyn Harvey, Manx Telecom Mobile Product Manager, commented:

“4G LTE is a very exciting thing for the Isle of Man as the next generation of mobile network. It will give customers mobile broadband speeds equivalent to our superfast broadband services when out and about, allowing faster access to social media, the internet, downloads and emails. We have been surprised and delighted by how many customers

of Cloud services and the many varied ways they are now using the Cloud as part of their overall business solution.

Smartphones have changed the way people do business, organise their lives and communicate with others and this would never have happened without 3G

mobile networks. These two elements changed the communications industry but we believe that 4G LTE + The Cloud has the ability to change every industry.

As operators move to all IP networks, 4G mobile networks + The Cloud will allow for an enhanced user experience, faster access to content anywhere and richer communication services as part of your monthly package. In order to successfully deliver this, we will have to focus our investment in the 4G mobile network and in cloud services that add real value to customers.”

Manx Telecom’s commitment to 4G began in November 2011 when successful trials were held here on the Island. The company’s technical preparations for 4G are already well advanced and, depending upon the allocation of radio frequencies, Manx Telecom plans to launch a 4G network later this year.

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JerseyJersey In MoscowDelegates at a major financial services conference in Moscow last week heard about the opportunities Jersey offers as a stable international finance centre and the role it plays as a gateway to accessing markets around the world. Gary Hales, Jersey Finance’s Business Development Representative for Russia and the CIS, attended the two-day Moscow Financial Innovation Forum at the Russian Chamber of Commerce Conference Centre, taking to the stage on 20th March with a talk entitled ‘Jersey: integrity, quality and service’.

Highlighting Jersey’s geographical proximity to Europe but position outside of the EU, Gary outlined the opportunities Jersey offered as a stable finance centre in facilitating investment in and out of Europe.

In addition, he pointed to the strong links Jersey has with key growth markets including the Gulf, the Far East, India and Africa.

New Name, New Year, same strong story for NedbankNedbank Private Wealth announced astrong year of growth for 2012 and encouraging continued growth levels into the first quarter of 2013. Since changing its name from Fairbairn Private Bank in October last year, it has also won an award for its relationship management and been named the Best Private Bank for High Net Worth Clients (US$1m to US$10m) in Jersey in the global Euromoney Private Banking Awards.

Year-on-year profit in the bank after tax was up 33% in 2012, but when one-off revenue factors are excluded underlying year-on-year profit growth still remains

impressive at 15%. The business continues to see strong new business flows with double-digit percentage growth in the number of new client accounts during 2012.

Greg Horton, managing director of Nedbank Private Wealth, said: “It is very pleasing to see that the strong progress made in 2012 has continued through into 2013.”

Horton reported that total holdings on its award-winning integrated banking and investment platform, Focus, were continuing to grow strongly and were up a further 6% in the first quarter of 2013, having comfortably passed through the £2 billion (US$3 billion) mark for the first time.

Guernsey

Hawksford Wins Best Offshore Trust Company AwardHAWKSFORD has won the Wealth Adviser best offshore trust company award. Readers of the publication, which are made up of banking, legal, accountancy, private client, wealth advisory and tax advisory firms, nominated entities they believed to be ‘best in class’ in 30 categories. Hawksford received the greatest number of votes in the best offshore trust company category.

‘I am delighted that Hawksford has been recognised with this award. Our success is testament to the hard work and continuing dedication of our whole team,’ said Peter Murley, chief executive, Hawksford. ‘It is great that as a Jersey based company we are able to represent the Island and its trust sector in such a positive way through our high standard of work, and that it has been recognised by our peers.’

The awards took place in Mayfair, London on Friday 22nd March.

Chinese Ambassador pledges to work with GuernseyThe Chinese ambassador to the UK has pledged to work with Guernsey on a range of initiatives which could be of mutual benefit to the two jurisdictions.

His Excellency Liu Xiaoming spent four days on the Island in April. During the visit he pledged to assist with a number of initiatives that Guernsey has been developing with the Chinese market, including those culturally as well as commercially orientated.

Fiona Le Poidevin, Chief Executive of Guernsey Finance – the promotional agency for the Island’s finance industry internationally, said: “We had a series of very productive meetings with the ambassador and his officials during their time in Guernsey. The result is that there are a number of cultural and commercial initiatives which we all recognised could be of benefit to both jurisdictions and therefore both parties have agreed to undertake further work on these so that they can be progressed as quickly as possible.

Funds industry squeezed by EU and CompetitorsGUERNSEY’S funds industry is being challenged by a combination of EU regulation and aggressive offshore competition, a senior figure in the industry has warned.

Joe Truelove, head of business development, fund administration at Kleinwort Benson and vice-chairman of the Guernsey Investment Funds Association, told a conference on the impact of onshore regulation, organised by Offshore Professional Conferences, how the local industry was being impacted.

The Guernsey funds sector, which employs some 2,000 people, might still be doing relatively well and is certainly a buoyant part of the wider financial services industry. But Mr Truelove warned that times were changing.

He said that there was still an over-reliance by industry on London for new business when the Island could be attempting to do more in the emerging ‘Bric’ markets. And he questioned whether the sector had been too pre-occupied in hanging on to ‘legacy business’, which may have stifled growth.

24

Channel Island In The News

PLACES

Capital International Group

INSTINCTIVE FINANCIAL AGILITYThe regulated activities detailed in this editorial are provided by Capital International Limited, Capital Treasury

Services Limited, Capital Financial Markets Limited or Capital Fund Services Limited who are all members of the Capital International Group of companies and are all licensed by the Isle of Man Financial Supervision Commission

pedigree with instinctive financial agility

In a world of uncertainty, particularly over recent years in the matters of finance and the economy, we have seen companies consolidate, retrench and turn to tried and tested solutions. We have also seen a move to safety as people increasingly look to deal with companies that provide security rather than risk, and consistency rather than efficiency.

In times like these, clients turn to the well-known brands, large companies and more established global players. While large companies tick many of the boxes in terms of security and consistency, they often seem inflexible, indifferent to people and constrained by procedures.

This disparity between service and size is often because in the world of large companies, the watchwords become commoditisation, standardisation and automation. So, while low prices, financial security and consistency are available from these large companies, as soon as a customer seeks some flexibility around the product or service they require or they seek a personalised solution to a problem or complaint, difficulties and issues can arise rapidly.

A Harvard Business Review blog from a few years ago described the two best customer-service practices as “empathy over indifferent calmness and common sense over standard operating procedure”.

So, is it possible to bridge the two? To offer the security and comfort of a global player, as well as the service of your local specialist provider?

At the Capital International Group, we like to think so. We provide a wide range of financial services to businesses and also some high net worth individuals, both locally and around the globe. Our clients are focused on reducing risk and cost, but they struggle to access the investment services they need, or a basic level of customer service, from the large global institutions. It is often simply not practical for them to access these institutions directly but they want the security they offer coupled with good customer service.

Our solution is to provide our clients with a flexible customised service built on our excellent IT platform and utilising our global network of relationships. What does that mean in practice? It means our clients benefit from world class clearing, settlement and payment services via our institutional relationships. In addition to being able to exploit this global infrastructure, we can also offer clients access to non-standard transaction types which can be tailored to our clients’ specific requirements. This enables us to provide a complete service, including many additional services that the majority of global players are unwilling or unable to match.

However, we never forget the importance of personal contact and the human touch. We always ensure direct and immediate access to senior management which enables a rapid response as issues arise in a way that simply cannot be achieved by a remote global institution.

So in a world where big may not always be beautiful, but is often sought after, we believe that our local specialist expertise combined with global reach provides the best of both worlds.

The Capital International Group of companies (the Group) specialises in the provision of financial services. Initially founded in 1996 as a stockbroker, over time the company has developed into a diversified Group offering a customised and integrated range of international financial services solutions.

• Trading & Stockbroking;

Dealing & Advisory Services, Foreign Exchange, Bullion & Precious Metals

• Custody & Administration;

Fund, Payment & Card Services, Global Custody & Portfolio Administration

• Cash & Investment Management;

Treasury Management, Managed Portfolio Services & Discretionary Investments

• Investment Structuring;

Spread Bet Services, Fund Formation & Administration

We mainly focus on providing our services business-to-business; largely to life assurers, pension schemes, fund and wealth managers, corporate and trust service providers as well as financial intermediaries, third sector organisations and the Isle of Man Government.

As an organisation founded on innovation, integrity and excellence, the Group delivers the highest quality of customer service, in addition to being mindful and proactive to the changes experienced by our customers within their industries. Consequently our overall goal is to deliver tailored and flexible services and products that meet the requirements not only of our direct customer but their underlying clients too. We achieve this by listening to our clients, being flexible and working closely with them to better understand their business.

Capital International Group

Capital House, Circular Road, Douglas, Isle of Man, IM1 1AG

Antony Kelsey Group Head of Marketing & Business Development Email : a.kelsey@capital-iom.com Telephone : +44 (0) 1624 654230 Website: www.capital-iom.com

Customer Service - empathy or indifferent calmness?

27

Feature

The positioning and acceptance in China of the Isle of Man as a reputable international business centre is partly dependent upon building relations at government level to demonstrate

import/export capabilities.

The facilitation of bilateral trade can also dispel any negative preconceptions associated with the perception that the

centre’.

established Entry Processing Unit (EPU) -

standard of customer service compared to our competitors; with the UK’s Treaty of Accession to the EU; ensures our free trade access for goods and agricultural products produced or supplied by the Isle of Man;

attractive base for operations. In addition,

professional services, helping facilitate

trade into the EU and the option of virtual ‘turnkey’ solutions for import/export administration.

By establishing this type of business in the Isle of Man, the Island may ultimately grow into a European sales base, which sits well with the Chinese ‘Going Global’ policy. In addition, such business and its shareholders may well use the Island for other well-established propositions, such as listing on stock markets, wealth management or asset structuring (subject

The Department of Economic Development’s (DED) strategy for developing business in China has identified effective ways of accessing

the growing Chinese economy with the aim of helping reinforce the geographic diversification in the Island’s own economy.

ChinaThe Isle of Man Proposition

WORDS TANYA HANSON

28

to the legality of capital movements and any necessary approvals in China).

Importantly, the Isle of Man is within the EU indirect tax area, allowing market access and customs clearance from a well-positioned trading base in the centre of the British Isles and on the doorstep of Europe.

In the next three to five years, the European Union (EU) will be implementing a free trade agreement between the member states of the Customs Union (CU) and the countries of the European Free Trade Association (EFTA), strengthening existing trade relations and creating new opportunities for co-operation.

To aid this growth in China, the DED now has a representative in China, who is helping to cultivate and target companies, entrepreneurs and creating networking opportunities to build awareness of the Island. We have also built Mandarin webpages and resources adjacent to our Isle of Man Where You Can website to support our communications.

In January, the first of several businesses being cultivated by the Isle of Man Country Strategy Team confirmed their intention to set up a subsidiary business on the Island to manage exports from China.

The DED’s most recent visit to China in November 2012 highlighted the possibility of working with a broader network like government and chamber bodies in Shanghai and Guangzhou, which may help the Isle of Man to draw on SME manufacturing and exportation membership opportunities from those areas. There have already been a number

of Chinese delegations of entrepreneurs who have been attracted to visit the Isle of Man.

In April 2013 a mini trade mission - headed by Economic Development Minister John Shimmin – was undertaken. Isle of Man industry attendees who participated in the trade visit to China were able to showcase one or more propositions to sell which they have already established as being a ‘good fit’ with Chinese opportunities.

Hong Kong is an important market for Chinese Initial Public Offers (IPOs) and the Isle of Man can help foreign companies list overseas on the Hong Kong Stock Exchange since 2010 when we gained acceptance there. However, the Island‘s track record is best illustrated by the number of companies it has on London’s AIM market. Presently such market activity is quiet, but may present some opportunities in the future.

Beijing is the pre-eminent and established centre in China for a diverse range of commerce and head offices, but Shanghai is key for financial services, banking and technology exportation and other cities like Guangzhou and Shenzhen are also key centres of activity such as manufacturing for export.

In January, Shanghai officials stated their intention to create Mainland China’s first free trade zone in a three-year development project – approved by the central government.

The Shanghai Pudong Free Trade Zone is expected to offer foreign-denominated offshore banking; financial leasing; cross-border financing; and international trade settlements, yielding considerable economic and political benefits.

This may improve relations between the Isle of Man and organisational head offices in Shanghai, who already have long-established relationships for other partnering and overseas activity. The Isle of Man scores over the BVI, Cayman Islands and the Channel Isles by offering a practical physical base for real Chinese operations.

Improving our business relations with China will help us to fight for a share in the world’s fastest-growing consumer and B2B markets.

The Department of Economic Development is already playing its part in the improvement of business relations with China which could emphatically become linked to the success of Manx businesses and growth to support the Island’s glowing future.

Comments:Chief Executive Officer of The ILS Group, Chris Eaton said: “With offices in 10 locations around the world, ILS understands the importance of building global relationships. With three offices in China, Asia is a core focus for the Group and the continued development of good relations between the Isle of Man and those within the Chinese marketplace is essential to do business successfully in China. Guanxi, commonly defined as personal connections between people doing business, is a distinct element of Chinese business culture. Asia will continue to welcome more members into its UHNW club, which brings with it tremendous opportunities for the Isle of Man’s wealth professionals to help Asia’s future generations amass their wealth and grow their fortunes for their legacy. As such, ILS is committed to promoting its services and the Isle of Man as an established platform for business success and prosperity in Asia.”

Steve McGowan, Chairman of SMP Partners, said: “SMP Partners are a geographically  diversified organisation, and  would benefit from continued organically nurtured IoM relations with those within the Chinese marketplace. SMP have an office in Hong Kong, which currently provides services to clients from China and other Asian countries. We have identified that there is significantly more potential to come from this region, hence we have the strategy and appetite to expand further into Asia by increasing the size of our office”.

Sean Dowling, Managing Partner at Appleby (Isle of Man) LLC, said: “China has been a significant market of interest to the Isle of Man for some time. With access to the European VAT network and zero per-cent corporate tax rates, the Island is in a perfect position to offer unique services to Chinese individuals and businesses. As a Group, Appleby is unique in its ability to provide fiduciary services through our dedicated experts in the key offshore jurisdictions. In April 2012, we expanded this reach with the opening of a new representative office in Shanghai, which has allowed us to not only grow our business, but to also enhance the first-class service we offer to our existing clients, many of whom are interested in China as a fast growth, dynamic centre. We already have a solid base with our office in Hong Kong, which has serviced Appleby’s local and international clients in Asia for over 20 years. Our strategy is to focus on offering fiduciary and administration services from Shanghai, the commercial and financial centre of Mainland China. We feel there is a genuine need for these services in the PRC, given the economic environment there.”

29

Isle of Man, 19 February 2013 -

The offshore markets experienced their largest quarter-to-quarter rise in M&A transactions in the last three years, according to a report released today by Appleby. The latest edition of Offshore-i, the group’s quarterly report which provides data and insight on merger and acquisition activity in major offshore financial centres, focuses on Q4 2012 while providing a review of the year as a whole and predictions for 2013.

Appleby Reports Offshore M&A Activity for Q4 2012Isle of Man experiences healthy uptick in M&A Activity to round off 2012

ANNUAL OFFSHORE DEALS 2012

Russell Kelly

Director, eGaming Services

KPMG Isle of Man & Gibraltar

NICK VERARDI, HEAD OF CORPORATE & COMMERCIAL,

APPLEBY GLOBAL

MAURITIUS47

US$ 1,297mSEYCHELLES7

US$ 20m

ISLE OF MAN86

US$ 2,269m

JERSEY117

US$ 4,849m

GUERNSEY196

US$ 6,374m

BERMUDA351

US$ 35,163m

BRITISHVIRGIN

ISLANDS359

US $72,476m

HONGKONG

387US $42,588m

CAYMANISLANDS

497US$ 45,923m

Value of all deals

US$211bn

Value per working day US$837m

30

Offshore News

Whilst there is no doubt that 2012 was another challenging year for the M&A market as a whole, the steady increase in Isle of Man based deals and activity is testament to the strength of this jurisdiction.

Isle of Man continues steady growth path

The Isle of Man witnessed a small uptick in M&A activity this quarter, with the jurisdiction being the target of 25 deals against 20 in Q3 2012, worth a cumulative value of USD193m. While values were down from last quarter’s USD425m level, it is encouraging to see that deal flow has been rising gradually over the course of the year.

“This latest report is encouraging for the Isle of Man,” said Nick Verardi, Partner and Head of Corporate and Commercial at Appleby (Isle of Man) LLC. “Whilst there is no doubt that 2012 was another challenging year for the M&A market as a whole, the steady increase in Isle of Man based deals and activity is testament to the strength of this jurisdiction.”

Acquisitions of minority stake transactions continue to dominate deal activity, accounting for 17 of the 25 deals completed in the Isle of Man in Q4 2012. Of particular significance was the USD63.9m issuance of new shares by New Europe Property Investments plc, the Isle of Man based commercial property investment company, which follows the Group’s USD55m issuance of shares in Q2.

Where Isle of Man companies were acquirers, the report notes that the jurisdiction completed nine deals worth a combined value of USD884m this quarter, up from USD38m in Q4 2011. This significant increase is largely attributable to Douglas-based GVC Holdings takeover of Sportingbet plc, the online and telephone sports betting company.

Global Offshore Market: Q4 2012

The key themes emerging from the report show that in the fourth quarter of 2012:

The number of deals involving offshore targets amounted to 590, up 27% over the previous quarter. This is easily the biggest rise quarter-to-quarter in the last three years.

The cumulative value of offshore deals was USD101.8bn, up 202% on the previous three months and 282% on Q4 2011.

The average deal size was USD173m – by far the largest average of the last 12 quarters.

The financial services and insurance sector continues to dominate offshore M&A activity, accounting for 30% of all deals completed. This sector was considerably busier in Q4 than the preceding quarter, with 14 more deals and spending up USD14.5bn.

Minority stake transactions remain the most popular deal type by volume. However, acquisitions overtook them in terms of value, accounting for 70% of the money spent.

There were just 28 IPOs recorded – this compares to 43 in the same quarter of 2011.

Cayman remains the most attractive destination for investors looking offshore, with BVI being the busiest market by value. The value of deals was also up significantly in Hong Kong and Guernsey.

Where offshore companies are acquirers, BVI continues to lead by volume, with 139 deals recorded.

The offshore region ranks fifth globally by value of M&A deals, on par with that of Eastern Europe, the Nordic States, Africa and the Middle East combined.

Significant uptick in M&A Activity to round off sluggish year

Both the volume and value of deals involving offshore targets increased considerably in Q4 as against the preceding three months, with volume up 27% and value up 202%. While the substantial increase in value is largely attributable to the biggest transaction of the quarter - the USD56bn sale of British Virgin Islands-listed oil exploration business TNK-BP to Russian state-owned oil company Rosneft – it is encouraging to see that if this deal is excluded from the data, the quarter still boasts a deal value of USD45.8bn, placing it as the third highest three-month period of the last three years.

Nevertheless, despite the surge in activity for the last quarter, 2012 overall had 14% fewer deals than 2011, and 26% fewer than 2010.

31

Cayman Islands continues to attract investors offshore

The Cayman Islands remain the most attractive market in the offshore region for M&A targets, with 142 acquisitions of Cayman-incorporated businesses in the fourth quarter of 2012, as against 102 of BVI-targets, in second place.

In terms of value, the BVI tops the table, accounting for USD60.2bn or 59% of dollars spent offshore in the fourth quarter; this compares to 9% in Q3 2012 and 23% in Q4 2011.

Hong Kong, meanwhile, continues to attract investors to it shores, and in the fourth quarter of 2012, saw an uptick in deal activity as against the preceding three months, with volume up 41% and value up a considerable 123%. Moreover, examination of year-on-year growth reveals that value was up 245%, with USD18.6bn deals generated in Q4 2012 as against just USD5.3bn in Q4 2011, signifying a general robustness returning to the Asian marketplace.

Looking ahead to 2013, Ms. Woo notes: “We expect that the Cayman Islands, closely followed by Hong Kong, will remain the driving forces for offshore M&A activity, with both jurisdictions plugged tightly in to the Asian economic growth story, while the Asia Pacific and Latin America will remain the most attractive world regions for M&A targets.”

“2012 was peppered with uncertainty, most notably around the Euro crisis, the US presidential election, and changes of leadership in China and elsewhere,” said Cameron Adderley, Global Head of Appleby’s Corporate & Commercial department. “Moving into 2013, the outlook is far from clear and the very real questions remain around the single European currency, America’s challenges related to the so called Fiscal Cliff and China’s continuing growth.”

Average deal sizes, meanwhile, illustrate a depth slowly returning to the marketplace. The average deal size this quarter stood at USD173m, outstripping averages over the last 12 quarters, while average deal size in 2012 surpassed the preceding two years, coming in at USD103m as against USD63m in 2011 and USD71m in 2010.

“We are optimistic that the M&A markets in which we operate will gradually strengthen, not least as a result of the relative health of strategic buyers, the emerging markets and the energy sector,” said Frances Woo, Appleby’s Hong Kong-based Chairman. “Offshore jurisdictions generated two of the world’s largest transactions in 2012 – that of TNK-BP and Jersey based Glencore’s USD33bn purchase of Xstrata. We have plenty of reason to be cautiously hopeful going forward, with general robustness returning to deal value as well as the number of deals coming out of our region growing faster than any other world region apart from the Nordic States this quarter.”

193

Isle of Man

25

18,604

Hong Kong

123

60,294

BritishVirgin

Islands

102

9,990

Bermuda

101

2,693

Guernsey

59

519

Jersey

28

46

Mauritius

10

9,598

Cayman Islands

142

8

Seychelles

2

KEY

TARGET COUNTRIES BY VOLUME AND VALUE

19,074

104No. ofdeals

Location

CaymanIslands

Aggregate deal value(mil USD)

32

Financial services dominates offshore market volume in 2012

The financial services and insurance sectors dominated activity in the fourth quarter of 2012 and were considerably busier than the previous quarter, accounting for 178 of the 590 deals done, worth a combined value of USD23.2bn.

Across 2012, financial services deals accounted for almost one in four dollars spent on offshore transactions (24%), and a third of the volume (32%), with both proportions up on the year before, when the sector made up 19% of deal values and 29% of volume. Appleby predicts financial services will continue to dominate M&A activity in offshore markets in 2013.

Behind financial services, manufacturing was the next busiest sector of the quarter with 96 transactions, worth a combined value of USD3.3bn in Q4.

Meanwhile, the professional, scientific and technical services sector saw the highest deal value this quarter, with USD62bn worth of deals, attributable in large part to the TNP-BP acquisition. This deal, along with the USD2.4bn acquisition of the subsidiaries of iron miner and ore wholesaler Wuhan Iron & Steel Group Mining by Chinese parent Wuhan Iron and Steel, highlights the ongoing importance of energy and natural resources as a generator of transactions in the region and around the world. Insatiable demand from emerging markets continues to fuel activity, along with shale gas discoveries and technical innovations in the industry.

Minority stake transactions and IPOs

Yet again, acquisition of minority stakes led by deal type this quarter, accounting for 58% of all deals done, or 342 out of the 590 transactions recorded in the period.

“It is indisputable that minority stake transactions remain the deal types of choice, and that appears to be a clear function of the macroeconomic uncertainty facing investors as they embark on deals,” Adderley said.

Acquisitions overtook minority stake transactions in terms of value, accounting for 70% of the money spent, or USD71.1bn. This dramatic increase in the amount of money being spent on these deals, from USD13bn in the third quarter, is again largely attributable to the two TNK-BP transactions which both saw 50% stakes change hands.

IPO’s suffered a slight decline in Q4, with only 28 IPOs and planned IPOs recorded as compared to 43 in the same quarter of 2011. It is worth noting, however, that the money raised in IPOs in Q4 was over double that raised in the preceding quarter – USD992m as against USD450m - showing a general robustness returning to these listings.

There are also 14 planned IPOs in the pipeline, suggesting that conditions may improve in 2013.

“We hope to see IPO activities accelerate through 2013, initially with smaller offerings but probably gathering depth as the year progresses,” said Mr. Adderley. “There is no doubt that the outlook for 2013 is uncertain however, in view of the strengthening US economy, combined with reduced stock market volatility globally, assertive action from central banks and brightening economic prospects in both Europe and Asia, we are cautiously optimistic that companies will be tempted back to fundraising on the public markets.”

BVI and Hong Kong markets continue to top deals by acquirer

Looking at acquirers based offshore, the numbers are up significantly both in terms of volume and value, suggesting that buyers from the offshore markets are in rude health.

The BVI continues to produce the largest number of deals involving offshore acquirers, with 139 deals recorded in Q4 2012 as against 164 in the same period last year.

The Crown Dependencies, meanwhile, showed a considerable increase in acquisition value compared to a year ago, with Jersey topping the table by value this quarter at USD34.7bn. This value, however, was largely attributable to the Xstrata deal.

Global market comparison

The offshore M&A market continues to fare positively against other global markets, with offshore this quarter ranking ninth on the list for deal volume activity and fifth by value, with an aggregate value of USD101.8bn.

“It is encouraging to see that the offshore markets average deal size for the quarter, at USD173m, far outstrips those of North America, Western Europe and the Far East and Central Asia and is second only to South and Central America’s ,” said Ms. Woo. “The region’s cumulative deal value is on par with that of Eastern Europe, the Nordic States, Africa and the Middle East combined.”

Ms. Woo continued: “We expect that offshore financial centres will continue to perform strongly and relatively robustly on the international stage. That said, as and when a deeper global recovery takes hold of the M&A market, we will not be surprised to see the performance of our markets rapidly eclipsed by the larger relative growth of onshore jurisdictions and bigger economies.”

We expect that offshore financial centres will continue to perform strongly and relatively robustly on the international stage.

33

Project (noun): A series of activities completed against agreed time and cost targets to produce an end product or result. The product/result should provide benefits exceeding the required return on investment and satisfy a business need.

Feature

Most people have been involved in projects at some point in their lives – professionally or privately. Weddings, loft extensions and technology implementations – projects come in all shapes and sizes.

One project may consist of 50 tasks; another may have 1,000. One may be completed within a month, while another may span years.

In organisations, projects are often initiated due to internal changes, such as in strategy or structure, or environmental pressures like deregulation or technological developments.

We have all seen one of the many property renovation shows on TV, where everything goes horribly wrong – often due to the lack of proper project management.

So what is project management all about? In theory, the concept can be defined as: “Planning, organising, directing and controlling resources for a specific period to meet a specific set of one-time objectives”.

Basically, structured project management means managing a given project in a logical, organised way, following defined steps. Several frameworks and methodologies have been developed to assist organisations with managing projects successfully.

PROJECT MANAGEMENTIN PRACTICE

WORDS MICHELLE P. TONNESEN

34

PRINCE2 is the dominant one, particularly in the public sector, but numerous

us simplify it all with a metaphor – think of yourself as setting out on a journey:

outline the route you are travelling

business needs make up the vehicle you are travelling inControls (such as progress reports, steering committee meetings and risk logs) constitute your navigation

Project management problems usually arise when putting theory into practice.

soon challenged by the unpredictability of markets, organisations and perhaps hidden agendas of stakeholders.

Implementing project management successfully requires equal knowledge of and emphasis on the people, the processand the task. With tight deadlines and pressure from management, clients and regulators alike, it is tempting to focus solely on the task at hand. However, to obtain the desired results it is necessary to apply a holistic approach and also consider engaging the right people, ensuring high performing teams and engaged stakeholders, as well as designing a sustainable process to

Project failure is often caused by a lack of clarity of what is to be delivered, how and by whom. Whenever we decide we want to do something, go somewhere, build something, achieve something, we need to know the answer to some questions:

What are we trying to do? When will we start? What do we need? Can we do it alone, or do we need help? How long will it take? How much will it cost?

These are the usual questions asked at the start of any project, and the answers are the building blocks of project management.

Based on these answers, developing a concise project management plan and governance structure from the start is essential to project success. Ensure that your pick a format and level of detail that suits the project. Particularly in terms of managing schedules, it is often the case that for smaller projects a list of deliverables with target dates

blown schedule. For larger projects, phased planning is handy in which immediate phases may be planned in detail and later stages in summary.

Here are some examples of common pitfalls and how to avoid them when planning a project and managing schedules:

Keep the plan up to date

“Just dump that under the

“I’d guess 60 days for

Watch out forhard-to- measure activities

Involve the team in the planning

Make the logic clear – what drives each task

Be aware of the trend of slippage – consider a milestone chart

“But that was supposed to

Ensure dependencies are understood and owned

Additionally, targeted stakeholder management and communication are essential throughout the project lifecycle. The importance of these elements are often ignored or reduced to line items within a project plan. The fact of the matter is: communication promotes commitment. Thus, you have to communicate to improve the quality and reliability of the project outcomes:

– to gain commitment from top managers who can then make informed decisionsInwards – to help the teams to manage and to understand the whole context of the project

– to end users and stakeholders to ensure the proposed result meets their expectations

– to manage information about the project to the press, customers and the general public when necessary

In sum, project teams cannot work in isolation. A competent project manager builds a strong understanding of all the project stakeholders; establishes

over the project; uses communication

to win over the opposition; and keeps track of the stakeholder dynamics throughout the project.

Finally, projects exist to create value

seems obvious. Yet most projects fail

these are not actively managed.

Think about some of the projects you have worked on:

What were the deliverables, and

Did the project deliver its

often focus on deliverables rather than

delivery is often confused. Be realistic

is embedded within the organisation.

The morale of this article – and the

may be harder work in the beginning

Put the effort in up front and it pays off in the long run.

35

Feature

Establish clear goals and find a key message, monitor your progress relative to your objectives, create a long and short term PR plan and be ready

to adapt very quickly to what remains a changeable and dynamic corporate and media landscape.

36

WORDS LAURA BRYAN

theBusiness of Marketing

Welcome to this first installment in which Ashgrove

Marketing examines the subject of PR and advertising and its impact upon the business world. This month, Laura Bryan discusses the measurement of PR and the Advertising Value Equivalent rating, or the AVE.

Considering the time of year and, indeed, the current state of the nation, it seems fitting that our inaugural discussion on the

mechanics of marketing and its impact on business in real terms should surround the all-important, although penultimate, topic of return on investment. For years now, one of the greatest obstacles we’ve faced in the advertising and PR industry has been the measurement of its effectiveness or, more precisely, its justification. Most other professions have recognised tools for calculating ROI, but when it comes to public relations and advertising (notice that the two are different), discussions remain slightly

divergent, even within the industry itself. As such, the efficacy of public relations and advertising is now gauged using a range of different methods, with differing levels of effectiveness, and for a variety of different reasons – allow us to elaborate.

In measuring the effectiveness of any PR or advertising campaign, it is important to remember that each can only be accounted for using a range of subjective variables. These are based upon factors such as audience judgement and time sensitivity as well as placement, form, tone and quality, and each influences output measurement in four key areas: Media Content Analysis, Cyber Space Analysis, Event Measurement, and Public Opinion Polls. Traditionally, the emphasis here surrounds tone and placement i.e. whether the material is positive, negative or neutral and, in turn, whether it can be considered to be favourable, unfavourable or balanced. However, further complications arise when we factor in the likelihood that tone and placement are values which are again subject to the interpretation of the individual.

In answer to this, it seems logical that an entirely objective approach to media content analysis be adopted if we in the PR industry are to establish any formal criteria for the value of content placement. There are many different tools available to the PR practitioner and, with the boom in online sharing over recent years, many more arriving each week. But for the purposes of this article, we have decided to focus upon the ever present and ever contentious method of the Advertising Value Equivalent rating, or the AVE.

Traditionally, AVEs are calculated by measuring coverage in column inches, in the case of print, or seconds, in the case of broadcast media, and multiplying these figures by the respective costs to advertise in that medium. The higher its circulation or esteem, the higher the cost to publish with a given magazine, newspaper or website; so the ROI of a PR activity can be directly measured by taking the cost to produce an article against the value of its placement, assuming that the value of the placement by circulation or esteem correlates to the rate of conversion. Unlike our good selves, some agencies go further and multiply the resultant value of a placement by a factor of 3, 5, or sometimes (in the case of less scrupulous concerns) 10xvalue, to account for ‘PR factor’. This is based on the

assumption that news is more persuasive than advertising, for example, or that ‘word of mouth’ (which should not be underestimated) is a quantifiable element. Some, meanwhile, go further still and add the total revenue of a client over a given period to the calculated AVE, and attribute the sum total to their own valuation – a questionable practise to say the least.

The ramifications here are self-evident and some have, as a result, called for the discrediting of AVE practises overall. Many contend that AVEs cannot possibly take into account audience reception at source, which for printed media, of course, is true - for the time being. Whilst some also contend that the effectiveness of a given article in terms of generating conversions or sales is also unquantifiable and therefore impossible to place a value upon, which is also true, but far besides the point of AVE calculations.

As many more have pointed out, calculating AVEs is not the problem in itself; rather, it is their misuse, miscalculation and misappropriation that serve to muddy the waters for our industry. The key is to take the AVE for what it is – which is a means of gauging tangible costs and returns prior to sales and not of gauging overall brand value - and the most fundamental tangible to measure when it comes to PR (for the purposes of brand exposure), is prominence. AVEs remain the best way to calculate visibility in relation to both circulation and credibility. These are the fundamentals. What you have to rely upon next is the suitability, penetration and resonance of your brand as it appears within certain targeted publications, however, these intangibles lie within the realms of the press officer and copywriter. Establish clear goals and find a key message, monitor your progress relative to your objectives, create a long and short term PR plan and be ready to adapt very quickly to what remains a changeable and dynamic corporate and media landscape. And the intangibles? We’ll get around to those soon.

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Feature

Greetings etiquette in the working environment is becoming ever more complicated, Les Able looks into what is and isn’t acceptable.

Handshakes are the only acceptable physical contact for men and women in a business environment but

hugs and kisses are definitely taboo.

So says one investigative survey at a time when the ABCs of handshake etiquette and other styles of greeting in business networking are coming under scrutiny as never before.

We’re talking sweaty palms, bone-crushing grips, the feeble limp lettuce handshake and is it appropriate for a man to forego the handshake when meeting a woman in a company’s corridors of power and, heaven forbid, kiss her or, for that matter, she him!

To the horror of some traditionalists, the sometimes noisy ‘Mwah, Mwah’ is becoming ever more commonplace as we British menfolk follow the lead of our European compatriots and become more continental in behaviour when pressing the flesh.

But then should it be a kiss on one or both cheeks? A mere peck of a cheek perhaps! Indecision which can sometimes result in amusing, even embarrassing zig zagging, coupled with a few nose bumpings.

There are those enthusiastic males who will skip not only a handshake but even the kisses and go for a hug, often to the surprise of the women in their bear like clutches.

Personal research shows that the majority of women who were quizzed prefer a firm handshake in the business environment while socially a kiss is acceptable, but preferably on just one cheek.

“I would never ‘mwah, mwah’ a client on a day to day basis or ahead of a normal business meeting, but might if meeting up on a more social basis ie a lunch,” was the response from one woman with a marketing background.

A personal assistant of more mature years was more equivocal. “I don’t think a kiss is right, either before or after a business meeting. A confident handshake is all that’s needed, but not too limp and the crusher is just daft, and in my experience is usually confined to men who are relatively short in stature and feel they have something to prove.”

A hug? “Definitely not,” was the steely, grimacing reply.

“NEVER a kiss,” says Abby Johnson, whose former roles have included deputy chief executive of East Midlands Development

Agency and more recently chief executive of Plymouth Culture Board. “In the public sector I would say it’s almost never acceptable for a male business colleague to kiss a female on the first meeting, or any subsequent meeting. This is the case for anyone in a position of power or influence over the colleague’s career – absolute no no and runs risks of harassment and assault.”

She adds: “This only generally changes if said colleagues have met subsequently at a social event and their relationship has taken on a slightly more informal role and then a couple of pecks on the cheeks might be acceptable. In my experience, attempting to kiss a female colleague, unless they have known them for a fairly long time, is usually confined to men of a certain age, younger men do not, in my experience, move in for a kiss.

“Yes, in the private sector things are slightly less constrained (although not by much in the under 55s I would say) and in the arts world, well, much more of a free for all but one I still resist. I have to confess though, as I’m now nearing 50, I find it gets easier as the attempts to kiss me get less and less frequent, in all circumstances!!”

Oh for those halcyon days when shaking hands was just so simple, a standard greeting, two hands meet, shake and that was it. Today the handshake is almost forensically analysed; it can shape a career and messing up at the interview stage might even cost a much wanted job.

So in business circles the best advice is: A handshake. Firm, but brief coupled with eye contact and a smile.

End the handshake after three or four seconds.

Remember, a handshake is not a show of physical strength.

Avoid offering a limp ‘fish hand’.

Avoid the urge to handshake with two hands, seen as intrusive and too personal.

Finally, if shaking hands with someone with sweaty palms don’t immediately wipe your hands on your coat but discreetly wash them later to avoid embarrassment.

Les Able is head of PR and Media Relations at Home Strategic.

Handshakes, Kisses and Hugs!

WORDS LES ABLE

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