INTERVIEW: George Catalin Costache, CEO of Siemens Romania, says the company, which is interested in developing green and sustainable projects, is growing its annual turnover by 15 percent »page 8
ROMANIA’S PREMIER BUSINESS WEEKLY
March 25 - 31, 2013 / VOLUME 17, NUMBER 9
LEARNING THE INSOLVENCY LESSON The number of FMCG producers and retailers going into insolvency has increased over the past year and pundits don’t expect any improvement in 2013 »page 6 NEWS
MONEY
CITY
Citi trade
Talking tax
Concerted effort
Raiffeisen Bank has taken over the consumer portfolio of Citi, acquiring 100,000 customers with assets worth over EUR 90 million
BR looks at the tax implications of the increase in the minimum wage and the potential reduction of social contributions
Oltea Parau Serban, artistic director of the orchestras and choirs of Radio Romania, reveals the institution’s projects for the conclusion of the season
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www.business-review.ro Business Review | March 25 - 31, 2013
NEWS 3
NEWS in brief
BUSINESS AGENDA March 27
BANKING
11:00 HoneyWood organizes a press conference to mark the launch of its local operations at Iconic. By invitation only.
BRD’s factoring operations exceed EUR 1 bln in 2012 BRD-Groupe Societe Generale reached over EUR 1 billion in factoring transactions and its turnover moved up by 19 percent in 2012, driven by no regress operations, said bank officials. Internal factoring represented 78 percent of all operations, while export and import factoring accounted for 13 percent and 9 percent, respectively. BRD said that no regress operations dominated the business, representing 80 percent of the factoring, as more companies aimed to cover the default risk on the receivables portfolio. Numerous companies have opted for factoring services, ranging from small, local firms with a turnover of up to EUR 5 million, to multinational companies. BRD is the leading player in the factoring market with a 35 percent market share in 2012.
UniCredit Tiriac Bank net profit up to EUR 40 million in 2012 The net profit of UniCredit Tiriac Bank rose by 11.3 percent to RON 177 million (EUR 40 million) last year, helped by a 4.2 percent reduction of provisioning and a 2.1 percent increase in revenues. The lender continued to expand its loan portfolio, sustained primarily by external financing, and was able to lower the risk cost by 15 percent. The lender’s operational revenues rose by 2.1 percent to RON 1.25 billion (EUR 280 million), driven by a 28 percent increase in non-interest income. Interest income tumbled 12 percent on falling loan margins. Unicredit Tiriac Bank saw a 12 percent growth in corporate loans to RON 11.3 billion (EUR 2.5 billion), with another RON 3 billion (EUR 673) registered by the parent. SME lending soared by 54 percent, while mortgages edged up by 1.2 percent. The loan exposure of EU-funded projects expanded by EUR 100 million last year, totaling EUR 500 million. Meanwhile corporate deposits rose by 14 percent to RON 7.9 billion (EUR 1.7 billion). Retail lending dropped 2 percent, against a 0.1 percent expansion of the market, while deposits added 28 percent versus an 8 percent market increase. The loan-to-deposit ratio fell by 12 percentage points to 125 percent. Non-performing loans grew slightly to 12.2 percent. The bank has not relied solely on deposits to expand the loan book and has continued to receive parent support, said officials.
March 28 ∫EVENT 08:30 Business Review organizes the twelfth edition of its flagship event Tax & Law, which updates companies and entrepreneurs on the latest fiscal and legal changes, at Pullman Bucharest Hotel. By invitation only. Find out more at www.business-review.ro/brevents
IMAGE of the week Irish eyes are smiling: St Patrick’s Day celebrations come to town Last weekend Bucharest joined a host of cities around the world celebrating the patron saint and national day of Ireland. A parade of Irish singers, drummers and bagpipe players marched on Calea Victoriei under an environmental message: think green, wear green. Parliament Palace was lit up in the color, leading Ireland's Ambassador to Bucharest Oliver Grogan to say it “represents the ever-closer ties between Ireland and Romania.”
IT SAP inaugurates nearshore IT consultancy center in Timisoara German company SAP Romania has held the official inauguration of its nearshore center in Timisoara, which will provide IT consultancy services for the company’s customers in Europe, the Middle East and Africa. “This is the second consultancy center that SAP has opened locally after the one in Bucharest. Currently, over 60 SAP consultants are working in Timisoara and we are aiming for the SAP nearshore delivery centers in Romania to employ 400 specialists by 2014,” said Valentin Tomsa, general manager of SAP Romania. In Romania, SAP posted a turnover of approximately EUR 23 million, 40 percent up on the previous year. The company provided its solutions to more than 400 local firms.
Vodafone opens regional network operations center in Romania Vodafone Romania has announced the official inauguration of its Danubius Regional Network Operations Center, which caters for several of the group’s divisions in Europe. The center has two technical headquarters located in the Pipera and Avrig areas of Bucharest. Since July 2011, the Danubius center
has provided services to four Vodafone networks, in Romania, Italy, Greece and Germany. However, over the next two weeks, the center will begin to cater for other three Vodafone networks: the Netherlands, the Czech Republic and Albania.
14:00 Business Review organizes the special workshop Access to Finance, which aims to outline the financing options available for companies, ranging from EU funds to state aid, at Pullman Hotel Bucharest. By invitation only. 14:00 Business Review organizes its special workshop on Transfer Prices, which presents the practical aspects of preparing a file and for a transfer pricing tax inspection, at Pullman Hotel Bucharest. By invitation only.
April 3 HR Club organizes the fifth edition of its Awards Gala, which recognizes excellence in human resources and people management, at JW Marriott Bucharest Grand Hotel. By invitation only.
April 18 ∫EVENT
TOURISM ANTREC: More foreigners to holiday in rural Romania in 2013 The number of Romanians taking rural vacations locally in 2013 will grow by 15 percent while between 5 to 7 percent more foreigners will explore the Romanian countryside this year, according to the National Association for Rural, Ecological and Cultural Tourism (ANTREC). This will happen in the context of an overall growth in Romania’s domestic tourism this year, according to the same source. Most of the foreign tourists who stay in local rural guesthouses come from neighboring countries such as Hungary as well as Germany, France (especially individual tourists), Israel and Japan (from where group travel is more common). The most popular Romanian regions for rural tourism are Brasov (BranMoieciu, Fundata, Rasnov, Cristian), Bucovina, Maramures and Marginimea Sibiului.
09:00 Business Review organizes Focus on Energy, an event that gauges trends in the domestic energy market, at Howard Johnson Grand Plaza Hotel. By invitation only.
April 20-21 The Maastricht School of Management Romania organizes a sales course as part of a new executive training program. Participation is fee-based. Find out more at www.msmromania.org/content/o pen-enrollment-courses
April 22 Korea Business Center – the Commercial Office of the South Korean Embassy organizes an event for companies interested in meeting a South Korean business delegation, active in the medical and industrial sectors, at Intercontinental Hotel. By invitation only.
www.business-review.ro Business Review | March 25 - 31, 2013
4 NEWS BANKING
Raiffeisen Bank takes over retail arm of Citibank
R
aiffeisen Bank Romania has acquired the consumer portfolio of Citi, which took a strategic decision in December to focus solely on the corporate sector. The transaction is expected to be effective in the third quarter of 2013. Raiffeisen Bank will take over a portfolio of 100,000 customers with assets of over EUR 90 million and deposits exceeding EUR 175 million. The deal also includes the transfer of Citi’s consumer banking staff in Romania to Raiffeisen. “The fact that Citi’s business model is similar to ours in all segments, both in terms of customer service quality and product offer, mattered when signing the agreement,” said Steven van Groningen, president and CEO of Raiffeisen Bank. He added that the quality of the loan portfolio played a central role in the purchase decision. Tibor Pandi, general manager of Citi Romania, said the sale “represents the best possible outcome for our customers, staff and shareholders.” “Our commitment to Romania will see us continue to grow and invest in our business to better serve our local and global corporate, financial institution, commercial banking and public sector
clients,” said Pandi. Citibank’s customers will continue to be served in accordance with their current terms and conditions, until the transaction becomes effective. Citi’s Institutional Clients Group advised Citi on the deal, while Raiffeisen Bank was assisted by Raiffeisen Capital & Investment. The deal comes at a difficult moment for the banking industry, which has an ongoing restructuring program. Lenders have had to rethink their retail lending strategies, while axing jobs and closing branches across the country. The banking sector suffered losses of close to EUR 500 million in 2012 and lenders have to deal with a soaring rate of non-performing loans, which has reached 18 percent. Raiffeisen Bank, owned by Raiffeisen Bank International, has been one of the few lenders that remained in the black, registering a net profit of EUR 88 million, down 8 percent on 2011. Its loan book remained stable at EUR 3.5 billion. The Austria-based lender added 60,000 customers last year, reaching around 2 million individuals, 105,000 SMEs and 7,500 companies. ∫ Ovidiu Posirca
IT SECURITY
Deloitte: IT security is greater priority for CEOs
E
xecutives in the world’s largest technology, media and telecommunications companies have replaced compliance with implementing a 2013 security strategy as the number one driver for improving information security, according to the latest Deloitte Touche Tohmatsu Limited TMT Global Security study based on interviews with security executives at 121 TMT organizations from 38 different countries, including Romania. “The business significance of information security officer positions has increased in recent years in Romania,” said Bogdan Petre, manager of Deloitte’s enterprise risk services (ERS) division. “Companies’ approach in this area still doesn’t match the current high level of risks and cyber threats. Budgets are also limited. Generally, neither the IT team nor the business is fully aware of the number and severity of current incidents, which cannot fully justify investments or bring bigger budgets in information security management.” The study reflects overconfidence in protection against external threats, with 88 percent of executives not
viewing their company as vulnerable. However, when pressed further, more than half of them acknowledged experiencing a security threat in the last year. Less than half of survey respondents reported having a response plan in place to address a security breach and only 30 percent believe third parties are shouldering enough responsibility for cyber security. Also, 74 percent of the 121 executives surveyed rate security breaches at third parties as one of their top three threats, followed by denial of service attacks and employee errors and omissions. Other major threats identified by respondents include advanced persistent threats (64 percent) and hacktivism (63 percent), new to this survey, which combines social or political activism with hacking. The survey also identified a lack of employee awareness and thirdparty risks as top security vulnerabilities. It suggests that organizations should also invest in information security training and awareness for their employees to help mitigate risks from new technologies. ∫ Otilia Haraga
www.business-review.ro Business Review | March 25 - 31, 2013
NEWS 5
M&A
Local M&A market faces stagnation With the banking sector more restrictive in granting acquisition loans and the local market still dependant on rare mega-transactions – of over EUR 100 million – the Romanian mergers & acquisition (M&A) market is set to remain below EUR 1 billion this year. ∫ OVIDIU POSIRCA
IMF deal could influence privatizations
Radu Stoicoviciu, advisory and deals leader at the professional services firm PwC Romania, said the market had shrunk as it lacked big transactions. “If we look at the dynamics over the past few years, we will see that the drop has been pronounced since the M&A peaks of 2007-2008: in the past few years the market has been at around a seventh or maybe a tenth of the value of the boom-time market, and is relatively stagnant,” Stoicoviciu told BR. He estimates the Romanian M&A market stands between EUR 500 million and EUR 1 billion. The PwC leader said that fragmented sectors may prove to be more active in deal-making. He cited the private healthcare sector and the services sector in general as young markets with growth potential. “For investment funds, things have moved from chasing certain sectors to looking for an attractive and robust firm that can be in any sector; this trend excludes specialized investment funds,” said Stoicoviciu. He added that the economic fundamentals of a company are paramount for an investment fund that is seeking an acquisition.
The IMF’s presence locally will not impact private deal-making significantly, but it should influence the manner in which privatizations are carried out, reckons Stoicoviciu. The country’s privatization record remains poor, but the Ponta government has pledged to list energy companies on the local stock exchange this year and to sell other stateowned firms to strategic investors. Similar ambitious announcements were made last year, however, with lackluster results. In 2012, the government raised over EUR 37 million from the secondary public offering in the grid operator Transelectrica. Failure to sell Cuprumin, a copper mining firm, and Oltchim, a petrochemical plant that has entered insolvency, cast doubt on the government’s capacity to attract bidders with strong financial backing. Stoicoviciu commented that Romania could achieve more in terms of privatizations, as the political outlook is more stable. However, he warned that the structural issues facing the stateowned companies, some of the biggest generators of arrears, remain
Radu Stoicoviciu, leader, Advisory and Deals, PwC Romania Stoicoviciu said there are strong Romanian firms, but no transactions because an owner “may not be inclined to sell at prices that are sometimes lower than in the past”. However, some deals carried out during the crisis saw companies obtain even higher prices than they could have expected in the pre-crisis period.
a tough nut to crack. “The economic fundamentals of companies up for privatization can’t change overnight and it is debatable whether they have become more attractive from this perspective,” said the PwC leader. He predicts hydro-electricity producer Hidroelectrica will exit insolvency and should be able to attract investors by selling a minority stake on the stock exchange. “Hidroelectrica has some better economic fundamentals from the perspective of its economic substance,” said Stoicoviciu, adding that Oltchim’s fundamentals are different. Investment funds may be interested in Hidroelectrica, but it depends on the type of privatization. The state plans to sell a 10 percent stake in the power producer on the local stock exchange. Romania has been able to extend a EUR 3.5 billion IMF stand-by agreement through to June. The international lender gave this lifeline to the local government, which needs to reduce arrears in the public administration and appoint private managers in state-controlled companies. ovidiu.posirca@business-review.ro
WHO’S NEWS
BR welcomes information for Who’s News. Submissions may be edited for length and clarity. Get in touch at simona.bazavan@business-review.ro
Rohith Murthy
She will be in charge of the department responsible for asset evaluation. Badea has previously held top management positions in the banking and FMCG sectors for companies such as TBI Consumer Financing IFN, ING Group Romania and Heineken Romania. Her most recent position was key account manager at Unicredit Consumer Financing. Badea graduated from the Romanian Banking Institute as broker.
will join NABE Labs, the digital division of Centrade, after having previously led the eBusiness division of Citibank. His professional background also includes a period working in the Middle East. NABE Labs is a recently set up division of the Centrade group. Its team, which is divided between Romania and the USA, will target partnerships with Asian development centers.
Laura Badea is the new sales director of Casa de Insolventa Transilvania (CITR).
Ruxandra Bandila is the new strategy and business development director of Lafarge Romania. Before joining the building materials company, she spent six years as a marketing and business development director for Romania and SEE at PwC. Previously, she was executive director of the Foreign In-
vestors Council (FIC) in Romania. Bandila has also served as head of the socio-economic department of the United Nations Development Programme (UNDP). She holds a Ph.D. in Energetics from Ecole des Mines de Paris. Bandila is a member of the board of the National Center for Sustainable Development and a member of the European Association of Communications Directors.
Esther Berrozpe has been appointed president of Whirlpool’s Europe, Middle East and Africa (EMEA) region and to the company’s executive committee.
She is currently vice-president of European markets for the EMEA region. Berrozpe is replacing Jose Drummond, who will return to Brazil for personal reasons and continue in the role of president, Whirlpool S.A. Brazil board of directors, until year-end. She became vice-president of European markets, EMEA, in August 2012. Prior to this role, she was vicepresident, brand and product, North America Region. Berrozpe joined the Whirlpool Corporation in June 2000 and has held various trade marketing, product and brand leadership roles.
www.business-review.ro Business Review | March 25 - 31, 2013
6 FOCUS
Consumer goods firms continue to battle with specter of insolvency Decreasing purchasing power, cash-flow issues, difficult access to financing and stock related problems are among the factors that have plunged numerous consumer goods producers and retailers into insolvency over the past year. And the situation is not likely to improve in 2013, market pundits warned BR. ∫ SIMONA BAZAVAN Last week, the owner of the local Spar supermarket franchise, Retail D&I 2011, entered administration for the second time in three years. This is only the most recent insolvency in the retail sector, which alongside wholesale saw the most insolvencies over the past year, followed by constructions, horeca, transportation services and the food industry, according to a Coface Romania report released earlier this year. Overall, some 23,600 companies opted to enter or were forced into insolvency last year, up by 10 percent on the previous year and by 20 percent against 2010, according to the same source. “What we have seen since the start of 2013 is that insolvency doesn’t discriminate against anyone. While before, most of the insolvencies came in the construction and metallurgical sectors, in 2012 and the beginning of 2013, a larger number of insolvencies have come in sectors such as meat processing and agro-food,” Constantin Coman, country manager, Coface Romania, told BR last week. Furthermore, he thinks that the FMCG sector in particular will be affected in direct relation with the public’s spending power. “It’s clear the purchasing power of Romanians has decreased, which harms consumption,” he added. “Goods production, trade and distribution, especially FMCG, seem to be the worst affected sectors, since most consumers have started to be more cautious with their spending. Considering that most consumer goods were financed by consumer loans in the years before the economic turmoil, once the banking system became more risk adverse in providing consumer loans, the resources available for this sector also became scarce,” Dorin Petcu, head of restructuring and insolvency services at TZA Insolventa, the insolvency entity of Tuca Zbarcea & Asociatii law firm, told BR. Cash-flow difficulties, delayed payments, rising production costs, accumulated and slow-moving stocks, large distribution networks including overheads and logistics expenses are some of the industry-related issues that have forced consumer goods
Off the shelf: the collapse of a major FMCG retailer could create problems all along the supply chain, warn pundits companies into insolvency. The issue of stock is particularly important in an insolvent company’s process of restructuring, which Petcu stresses means much more than protection from creditors’ claims in the insolvency procedure, but rather “a detailed analysis of the entire structure and costs in order to understand which areas generate value, and which areas should be cut, outsourced or kept in order to maintain value”. “From our experience we have learned that the most difficult part is dealing with the accumulated stock. Most entrepreneurs do not seem to understand that it is more expensive to hold onto such stock in the hope of an unforeseen better market, than to sell it at a high discount to specialized companies,” he said. The situation gets even more complicated when the stock is collateral for bank loans, as banks are typically interested in obtaining a higher price than the market can provide and using the full collec-
tion for loan repayment. To the list of specific factors that can lead to insolvency in the consumer goods sector, Ana Maria Placintescu, partner at Musat & Asociatii, adds the aggressive expansion strategy many producers have adopted and which can no longer be supported given the economic context. As demand went down, business followed suit, affecting entire production and distribution chains, she told BR. “The situation is in no way surprising considering that these are industries which depend directly on consumption, which has been greatly affected by the economic evolution. Against dropping sales but also limited access to financing, companies were not able to honor their payment obligations and creditors demanded the opening of insolvency procedures in order to recover the debt,” she said. However, not everyone agrees, at least when it comes to FMCG producers.
“I don’t think we can talk about a greater number of insolvencies in the consumer goods sector compared to other fields. Even if the public’s financial resources have diminished over the past few years compared to the previous period, the FMCG sector has the advantage of meeting the public’s everyday needs, even in times of crisis. This should help – at least in theory. In reality, the difficulty comes mostly because of chain effects,” Bogdan C. Stoica, partner at Popovici Nitu & Asociatii, told BR.
What does 2013 have in store? In a business environment that continues to struggle with a lack of capital resources while seeking to reverse cautious consumption patterns, medium- and long-term projections are for the number of insolvencies to go up, says Placintescu. “Many creditors and companies had hoped business would recover but it
www.business-review.ro Business Review | March 25 - 31, 2013
FOCUS 7
OPINION Colin C. Lovering Director, British Romanian Chamber of Commerce Achieve International
Have your people got a job or a career? Ana-Maria Placintescu, Musat & Asociatii hasn’t happened and patience has come to an end. In this context, one expects that more creditors will try to recover their debts from business partners by asking for their insolvency or for debtors themselves to start procedures in order to save their business,” she explained. Petcu, on the other hand, believes that when it comes to insolvencies, 2013 will be similar to last year, as “no good news is emerging from this sector”. “On one hand, consumers who still have cash for expenses are cautious enough not to invest or replace goods unless absolutely necessary. On the other hand, there are also consumers that are in need of such goods but they do not have the available cash, other than cash for their daily needs and to service debt. To have a new boom in consumer loans is not a particularly good solution, but if new money is not available soon, general consumption will not increase and the previous year’s pattern in insolvency will be replicated this year, too,” he warned. But there is also room for optimism, according to Stoica. “I expect 2013 to mark a stabilization of the number of insolvencies at the level of 2012. There could be problems if some large retailers fall into difficulties, which will directly impact the entire business chains,” he said.
How the mighty have fallen Last year, the Romanian retail and FMCG market saw major M&As, withdrawals from the local market, bankruptcies and numerous insolvencies. In the FMCG domain, one of the most affected industries remains the bakery sector, which faces challenges such as rising production costs and tax evasion estimated at a whopping 70 percent. In February, Romanian bakery and milling company Dobrogea officially began insolvency procedures. According to the most recent available data, Dobrogea had 845 employees in 2011 and reported revenues of about EUR 55 million the same year.
Dorin Petcu, TZA Insolventa Debts, however, reached some EUR 22.5 million, according to local media reports. The dairy sector has also had its share of insolvencies. Among the most significant at the top level was that of Prodlacta, which started voluntary insolvency proceedings at the end of 2011 following declining sales and rising losses. One year later, in December 2012, the dairy producer was taken over by JLC, the largest dairy player from the Republic of Moldova. The Romanian subsidiary of Israeli dairy producer Tnuva was the second major player on the dairy segment to apply for insolvency after having previously tried to sell its local operations due to unsatisfactory results. The Israeli firm is estimated to have invested about EUR 60 million locally since 2005 when it entered Romania with the goal of establishing an integrated business – from milk production to product distribution under the Tnuva and Yoplait labels. While the company hoped to reach yearly sales of EUR 50 million by 2008, the figure did not surpass EUR 20 million. One of the most eye-catching insolvencies by far last year was that of Murfatlar in March. Romanian’s largest winemaker was forced to take this step by cash-flow problems, said Cosmin Popescu, the company’s GM. “The main consequence of the slow money recovery rate – a general characteristic of the business environment at present – is that it makes it difficult to pay outstanding debts,” he explained. Murfatlar said the insolvency procedure would not affect its objectives and development plans. After reporting RON 140 million (approximately EUR 33 million) worth of sales in 2010, the winemaker saw its turnover hike to RON 180 million (approximately EUR 42.5 million). The growth came from expanding its network of wine stores to 125 outlets. simona.bazavan@business-review.ro
In my four plus years here in Romania those rising stars as more ‘threat’ I have always been impressed with than ‘asset’. Organizational talent requires the skill level of many people within the organizations that I work with space, specific encouragement and and have been equally dismayed by movement, and if you block it then the restriction on talent rising within it will find another route just like a departments and organizations in strong river does. So, don’t completely disagree with general. Whenever I have a group of young me. Take a good, hard look at your professionals in a training class I ask team and ask yourself the question, the question, “Hands up who has a “do they see working here as a job or job?” to which almost everyone raises a career?” then you will have your their hand. I then proceed with the answer! more provocative question two, “So, how many of you have a career? Perception IS reality! Which is then greeted Just to add salt into the wounds I’m with a smaller gathering of hesitant going to reveal another unknown arms nervously reaching for the sky source of damage to many businesses together with a group of slightly puz- as a consequence of poor employee zled faces looking directly at me. dissatisfaction and commitment. The point of this is to emphasize Please, please don’t be fooled into the huge difference that can some- thinking that your ‘minor’ procedural times exist between an employer problems, internal issues, relationand employee – a difference in ex- ship problems and challenges are pectations of commitment, dedica- not being felt by your customers betion and performance that has puz- cause they are! zled business leaders and managers It’s amazing how a simple comfor many, many years. ment, attitude or reaction by any In sales we do everything possible member of staff can have a profound to swerve the client away from ‘price’ impact on the marketplace and your towards all the wonderful benefits competitors’ appetites as, believe of our product/service, yet as em- me, they will smell the blood a mile ployers we do the exact opposite: away! we just focus on price (salary) and But it’s not just employees; there neglect the abundant ‘features and are very small and insignificant benefits’ of our organization. things that can have a major impact Now, if you are a manager reading on how potential or existing clients this thinking, “No, Colin, you’re see you and many times it’s right in wrong; we take good care of our front of people and they don’t see people” I would challenge you to it! take a deeper look. You may be right Imagine that you are in a doctor’s but it’s amazing how seemingly waiting room and you look in the insignificant things spoil everything corner and see a plant but it’s dead! else. Your immediate thought is, “Well, if ‘Succession planning’ is, very much, they can’t take care of that, how are a taboo phrase to many managers’ they going to take care of me?” ears here since it requires the re- If you are on an airplane and you leasing of knowledge, information, put the tray table down and see a nurturing of upcoming talent and large coffee stain, you think, “bad movement towards my definition engine maintenance? Poor hygiene? of a good manager which is one that etc…” “surrounds him/herself with people Perception IS reality: if a customer much more talented than he/she thinks your company stinks, it stinks! is!”. If clients sense you have organizaReaching the personal goal of hav- tional challenges or employee issues ing the word ‘manager’ on a business then you do! card seems to have this weird impact Ask yourself the question, “What on many people that makes them are our coffee stains?” and get them pull down the blinds and shut up removed before they do any more shop in terms of moving any further damage! By the way, a rude and arup the career ladder and just simply rogant security guard or receptionist ‘protecting’ their world and treating is a BIG coffee stain! ∫
www.business-review.ro Business Review | March 25 - 31, 2013
8 INTERVIEW
Sustainable and green development projects make up Siemens agenda in Romania The Romanian branch of the Siemens Group ranks fourth in importance and headcount in Central and Eastern Europe, with activities in energy, healthcare, industry and infrastructure & cities. The company also runs locally an R&D center in Brasov, which is the largest in the region. George Catalin Costache, CEO of Siemens Romania, tells BR what type of projects spark the firm’s interest.
CV George Catalin Costache September 2012 appointed CEO of Siemens Romania 2010 appointed country division lead for the customer services and metal technologies divisions, Siemens Romania 2009-2010 general manager of Veolia Water Solutions and Technologies 2003 country division lead for the industry automation and drive technologies divisions, Siemens Romania
Romania but we also export competencies. We have people who work in divisions in Dubai, the United States, Austria, Germany and India.
∫ OTILIA HARAGA What Siemens divisions are currently active in Romania? Siemens’s activity in Romania reflects the group’s activity all over the world. We have operations in four sectors: energy, healthcare, industry and infrastructure & cities. In Romania, the firm currently has four production units, three in Sibiu and one in Buzias (close to Timisoara). In 2010 all of the units were integrated into the Simea Sibiu entity to optimize manufacturing processes in Romania. Simea Sibiu produces electronic equipment and systems, since being founded in Sibiu in October 2005 as an entity of Siemens AG Oesterreich. Furthermore, the company has offices in all big Romanian cities- ClujNapoca, Sibiu, Brasov, Galati, Timisoara, Iasi, Targu Mures- and runs an R&D center in Brasov. The center is called Corporate Technology and it is the largest in Central and Eastern Europe. Apart from Romania, Siemens has R&D centers in Germany and Austria, in the Central and Eastern European region. Worldwide, the company has R&D activities in approximately 178 locations. In the Brasov center, we employ 200 people, 80-90 percent of whom are researchers and software developers, delivering projects mostly for Germany, the United States and Dubai. Research projects cover a wide
range of topics. They can be in such areas as healthcare or oil & gas. For instance, we are working on a complex healthcare project that encompasses everything pertaining to a patient, from the time the patient enters the medical unit until release. I cannot go into further detail. We are also working on special Scada systems, and projects involving green cities and traffic management. What is the average age of the employees in the R&D center? They are around 28 years old, even younger. Many of them graduated from the Transylvania University, but we do not recruit only from the west. We even have two employees from Chisinau. We have partnerships with all the major universities in the country. Last year, Siemens opened an education center in automation for students at Cluj Technical University. We already have one at the Polytechnic
University’s Faculty of Automation. This year we plan to open such a center at the Construction Institute and we are also opening one in Timisoara. We have an annual internship program for students. Last year we received 30-40 students. We also have a trainee program, through which we take in students or graduates to work with us for a while, some of whom are kept on in certain divisions, depending on their skills. Last year there were about 22 and we kept them all on. The financial year for Siemens started on October 1, 2012, and since then, the most people we have hired were taken on in Brasov. About 40 people have been recruited there, and we are still counting. In total, we have employed around 60 new people since the start of the financial year. Currently Siemens has approximately 1,800 employees in total in
Will Siemens be downsizing any operations in Romania? As a group, Siemens is about to close two operations. One involves water technologies and consists of water purification and treatment systems, of which 80-90 percent was done in the United States. We don’t do this in Romania – here we only deal with the automation, electrical and measurement systems. We will continue this activity in Romania and even develop it further. Secondly, Siemens was active on the solar projects side. We sold the solar panel project division, but this was a small part of what we do. What are your priorities as general manager of Siemens Romania? I aim to develop all the sectors uniformly in Romania, and especially grow the newer ones – infrastructure & cities, and industry. Secondly, I wish to develop the energy sector, which involves, wind, renewable energies, oil & gas and cogeneration/trigeneration. In the industry sector, I am interested in developing the energy efficiency projects and environmental projects (especially water). In the infrastructure & cities sector, I am interested in developing mobility, electric cars, traffic management, smart grid and green cities projects. To sum up, we are interested mainly in projects that involve sustainable and green development. My term as general manager is not
www.business-review.ro Business Review | March 25 - 31, 2013
INTERVIEW 9
limited to a definite timeframe. In Romania, Siemens was well known for a product that no longer exists, mobile phones. I aim to present Siemens in a new light on the local market, which better reflects what it has been doing in the past few years.
Iasi, which has just been started. We are also interested in entering a public-private partnership, once the current government has finished adjusting the PPP law. In the private sector, we are very interested in all wind projects.
How often does Siemens apply for public projects? We take part in public tenders by ourselves or in conjunction with other companies. We are, for instance, involved in water projects where the beneficiaries are water utilities. We also have a large project with the Romanian Railways, which we participated in with Thales and RCC. Such a project can start from EUR 1.5 million and can reach EUR 120 million. The completion deadline varies from one project to another. Wind projects should be finished within two years; water projects can take up to three years; a railway project can take even six months or a year. If we have to deliver equipment, it can take a week. We take part in many public auctions, especially in healthcare, where we apply to tenders on a weekly basis. In this sector, we deliver equipment. We would have been interested in the tram tender for Bucharest but it is no longer being held due to lack of funds. We are also interested in a large traffic management project in
To what extent do payment delays affect Siemens’s cash flow in Romania? In general, our turnover grows by 1015 percent annually. We don’t have cash flow problems because state contracts represent a very small amount of Siemens’s revenues in Romania. I don’t think they represented more than 10 percent of the turnover we posted last year.
1,800 the total headcount of Siemens in Romania
I am only referring here to our direct business with the state, because we are also working with partners, and they may have been involved in a project. If European funds are available,
this could change. To my knowledge, we are talking about EUR 40 billion in EU financing, between 2014 and 2020, which is a lot. I don’t think Romania, in its best year, managed to absorb more than EUR 2 billion. The biggest problem we encountered with payment for a project was in the case of Hidroelectrica, which became insolvent. The Siemens group announced in 2012 that it was getting ready for a restructuring process. Will this affect Romania? Certain redundant processes should be reduced so that the company works faster, more easily and more profitably. In Romania, I cannot say such redundant processes exist. Things started from the headquarters and moved to each of the sectors and further to the divisions. There have been no layoffs so far. It may get to that but I would not call them lay-offs. In the case of employees who have reached a certain age, they may be encouraged to retire while others may be transferred to other activities. In 2015, we will be celebrating 110 years in Romania. I don’t think we can say we are merely a German firm anymore. Is Siemens interested in acquisitions on the local market? We have an acquisition policy but dis-
closing what we are interested in would lead to an increase in the price. Very recently, Siemens took over a big company based in a large European city which also has a branch in Romania. Once we have integrated it, we will make it public. With this move alone, we will grow by more than 100 employees. While there are extraordinary companies in Romania, the management may not be the best. This is why we are mainly interested in the teams. We are also keen on attracting EU funds for employee training. After that, we want to try to set up some training centers, not only for our employees but also those of our partners. We wish to hire more people, especially students. I think the EU funds have already been unblocked, as far as I know, and they have started to make payments. How does the Siemens Romanian branch rank in the region? Siemens’s Central and Eastern European cluster numbers 19 countries. We are in fourth place – after Austria, the Czech Republic and Turkey – in importance and number of employees. Compared to five years ago, we have made a great deal of progress in Romania. otilia.haraga@business-review.ro
www.business-review.ro Business Review | March 25 - 31, 2013
10 MONEY
Romania seeks to boost tax collection Although small companies bore the brunt of the crisis, the government has imposed a mandatory tax rate on them to increase collection, and experts fear some will not survive. The authorities have also kicked off a larger fiscal reformation, aiming to rewrite the Fiscal Code and modernize the tax collection agency ANAF. Experts quizzed by BR mulled over the increase in the minimum wage and a potential reduction of social contributions and predicted the potential effect of these measures on businesses. ∫ OVIDIU POSIRCA More small firms to pay taxes In February, the taxation threshold for micro-enterprises was lowered, meaning that small firms with a turnover of up to EUR 65,000 were made subject to a 3 percent tax, while the employees limit was dropped. In the past, these firms could either pay a 16 percent profit tax – if they had a profit – or a 3 percent tax on turnover. Daniela Zar, ACCA, tax senior manager at Zamfirescu Racoti Predoiu Tax, said this measure aimed to bring small firms that registered losses concomitant with reporting significant turnovers into the taxable base. “I think these fiscal measures will have a negative impact on the taxpayers that are having difficulty in their activity, and it’s possible we might see a small number of firms close as a result of this measure,” said Zar. Filling the public coffers will come at a cost for companies, some of which will go to the wall, warn pundits. “This will impact micro-enterprises, because many will not be able to afford it. We estimate the number of insolvencies will exceed 20 percent this year,” said Constantin Coman, country manager, Coface Romania, a credit risk insurer. Small firms may resort to fiscal evasion to survive and they will be tempted not to issue invoices and tax receipts in order to reduce their turnover, reckons Ionut Bohalteanu, partner at Musat & Asociatii – Tax Advisory. “The effects of this system will not be more beneficial than the minimum tax that was enforced in 2010, as many entrepreneurs will have to pay taxes despite not making a profit,” said Bohalteanu. Mihaela Pohaci, tax partner at Popovici Nitu & Asociatii, commented that the authorities are aiming to simplify the administration of a large number of taxpayers through this system, which is not fully in line with EU regulations. “Small firms that trade goods and register a low profit margin will not be able to bear the fiscal cost, and will have to close their doors,” predicted Pohaci.
Daniela Zar, ACCA, tax senior manager, Zamfirescu Racoti Predoiu Tax She added that this system is transitory, in preparation for the lump-sum tax and other measures that aim to reduce the tax burden for small taxpayers. Fewer fiscal inspections are an important measure for small firms that don’t have an accountancy department, but the taxation harms start-ups and companies that are in a tight fiscal spot, commented Romulus Badea, tax partner at Soter & Partners, a tax consultancy. Mihaela Mitroi, tax partner at PwC Romania, the professional services firm, argues that the government wanted to simplify the tax system for small companies so as to make it in line with VAT registration provision, where companies register as VAT payers above the EUR 65,000 annual turnover ceiling. “This measure is creating some difficulties for small companies and we believe that the system should be optional and not mandatory, meaning small companies should be able to choose whether to pay corporate income tax, or the 3 percent tax on turnover,” said Mitroi.
Hiking the minimum wage without a tax compromise Aside from an ailing sector of small firms that lack competitiveness, Romania is also grappling with the lowest minimum wage in the EU 27. The gross wage stood at EUR 157.3 in January, but
Ionut Bohalteanu, partner, Musat & Asociatii - Tax Advisory
Mihaela Pohaci, tax partner Popovici Nitu & Asociatii Tax
Mihaela Mitroi, tax partner, PwC Romania
Romulus Badea, tax partner, Soter & Partners
it is set to go up by 14 percent this year. However, employers should not expect a 5 percent reduction in social insurance contributions this year. The increase in the minimum wage will lead to increased upward pressure on all wages, with paid labor taxes also expected to climb. Bohalteanu of Musat & Asociatii – Tax Advisory estimated than an increase of the minimum wage to RON 800 (EUR 180) would lead to a 5 percent hike of the contributions paid by the
employers. Companies will come under intense pressure to increase all wages, and remuneration that is partially paid under the table may come into the fiscal light. “In the current difficult market environment, it is highly unlikely that private companies could support a wage increase much higher than the rate of inflation,” commented Mitroi of PwC. She expects wages in the private sector to be driven mostly by supply and demand. She cited IT and telecom as sec-
www.business-review.ro Business Review | March 25 - 31, 2013
31-32 % of GDP – Romania’s tax collection, against the EU average of 39-40 percent of GDP tors with a higher than average growth and banking as the industry that might report a dismal wage increase, coupled with a reduction in employment. Pohaci of Popovici Nitu & Asociatii believes that an increase in the minimum wage needs to be coupled with a real growth of labor efficiency in order to be truly beneficial. “Apart from the possible inflationary effect, this growth may turn into a burden for the employer, with grave consequences, running to layoffs or even bankruptcies,” said Pohaci. She added that companies face the difficult task of keeping more people on lower wages – which damages motivation and morale – or firing some of the staff and increasing the workload of the remaining employees. She suggested that reduction or capping social contributions could help companies maintain or create new jobs. Romania has one of the highest levels of social contributions, but the government hasn’t announced any plans to reduce it this year. “A decrease in social contributions would be welcomed by the business environment and would stimulate the economy; it has been requested on numerous occasions by the business environment,” said Zar of Zamfirescu Racoti Predoiu Tax. Bohalteanu added that the government would have to find fresh revenue sources if it moved to cut the social contributions. “We maintain our position that reducing social contributions would support economic growth and job creation and, on the medium run, would have positive effects on the state budget,” stated Mitroi of PwC.
Taming the taxman The Ponta government intends to increase the tax base, while overhauling the tax collection strategy, helped by a World Bank loan. It attempts to remove the popular perception that the fiscal authority is hounding firms and wants companies to deal with their taxes online. Badea of Soter & Asociatii argued that the tax collection rate will not go up if the income and tax payment statements are not simplified. He described the current situation faced by a taxpayer who has wait in five queues to present a delayed statement. “A taxpayer has to queue twice to see the allotted fiscal inspector, at the counter that issues the installment sheet for the fine, at the cash desk to pay the fine and at the registry office. In addition, he or she has to make a copy
MONEY 11 of the receipt of the paid fine that must be deposited at the same fiscal administration. All this means half a day lost,” said Badea. He added that all these operations could be handled by a single clerk from the fiscal body ANAF, helped by an improved IT system. Reforming ANAF requires profound changes in various fields, from bolstering the IT infrastructure to reducing the staff and developing the tax assistance function, argues Pohaci of Popovici Nitu & Asociatii. “This is why the political decision to carry out the reform has to make the expected step, from statements to effective implementation,” said Pohaci. She cited Bulgaria as a successful reformer of the fiscal administration. The neighboring country has ended up with five regional administrations – down from 200 – and gained 5 percent of GDP in tax collection. Tax experts say Romania could improve its current collection rate of 31-32 percent of GDP by a similar figure by following a bold reform program. With foreign direct investments at an all-time low and a tax collection rate below the EU average of 40 percent, Romania needs to find additional funding. “I expect that the fiscal authorities will focus on increasing the tax collection for the budget this year,” said Zar of Zamfirescu Racoti Predoiu Tax. Bohalteanu of Musat & Asociatii – Tax Advisory warned that ANAF is undergoing constant reform, while the Fiscal Code and fiscal procedure have been rewritten “more frequently than specialized fiscal magazines”.
14.2 % the projected growth of the gross minimum wage in 2013 The Ministry of Finance said it wants to rewrite the Fiscal Code and the Fiscal Procedure Code this year, some ten years after the first documents of this type were issued. Tax experts welcomed this announcement, saying it would help companies stay in line with the tax inspectors when interpreting the fiscal provisions. Pohaci of Popovici Nitu & Asociatii said the new code needed to update certain concepts and principles, and correlate provisions on profit and income tax with VAT. It should also organize better the provisions of the Fiscal Code with the Norms. Bohalteanu called for a realistic fiscal system, tailored to the market conditions and the requirements of entrepreneurs, to support economic development. This would ultimately lead to an increased tax collection. ovidiu.posirca@business-review.ro
www.business-review.ro Business Review | March 25 - 31, 2013
12 CITY
Making the star shine Although Oltea Parau Serban doesn’t conduct an orchestra from Wednesday to Sunday, the concert nights at Radio Hall, her wand is a pivotal one in creating some of the most interesting classical music experiences in Bucharest. BR sat down with Serban, artistic director of the Orchestras and Choirs of Radio Romania and also the Radio Romania Cultural editor-inchief, to find out more.
∫ OANA VASILIU How have you sought to promote the Radio Orchestra since you took over Radio Hall? I have worked for the Radio’s Orchestras and Choirs twice: first, between 2009 and 2011, and again since summer 2012. To stage a Radio Hall season means not only to build a calendar consisting of symphonic concerts and recitals, but also to coordinate the events dedicated to the Radio Chil-
dren’s Choir, Big Band Radio and Radio’s Folk Orchestra. Throughout this period, some major improvements have been made: the introduction of electronic ticketing, OOH advertising, especially on the subway and in universities, and also exclusively public funding for the staging of concerts. What projects are scheduled at Radio Hall this year? For the final stage of the season, April and May, we have some surprises for
www.business-review.ro Business Review | March 25 - 31, 2013
CITY 13
e Radio Hall e bright all types of audience. Over April 812,we will give music lovers a festival called Antique Violins at Radio Hall, now on its second run. Over five days it will feature a 1694 Stradivarius violin played by Liviu Prunaru (who mainly works in Amsterdam), a Guarneri del Gesu violin from 1731, played by Gabriel Croitoru (settled in Romania, performing for the Radio Orchestras, plus the Cluj and Ploiesti Philharmonics), a Gagliano from 1761 for Bogdan Zvoristeanu (the concertmaster of the Suisse Romande Orchestra in Geneva) and a Testore 1710 violin, played by George Cosmin Banica (who also performs in Switzerland). Another major event held at Radio Hall will be the Travelling Piano Tour, where the Romanian pianist Horia Mihail will present exclusively three of Beethoven famous sonatas – Moonlight Sonata, Pathetique and Appassionata and Concerto no. 4 in G major. On May 11, we are staging a concert in honor of the Royal House of Romania, conducted by Christian Badea. At the end of June, the Verdi Requiem with the National Radio Orchestra and Chorus, under the baton of Tiberiu Soare, will perform a spectacular concert to mark the end of the Verdi season. How do you put together the monthly schedule of events at Radio Hall? The entire season is scheduled at least a year ahead by establishing concerts with our own artists – singers and orchestra conductors. Our imagination is only limited by the budget, which covers almost 100 concerts a year (from September to June). What kind of audience does Radio Hall attract? Who comes to the performances? The audience is made up of subscribers – almost 300 people who buy subscriptions quarterly and come to all the concerts – students and people who are studying music. Globally, classical music audiences are getting older. Is Romania facing this problem? What strategy do you have to counter it? Generally, the world talks about the so-called “gray-haired” classical music public. Fortunately, in Romania, the audience is younger, but there is perhaps an important public of a certain age who cannot leave the house, cannot walk from the metro station or
Upcoming events: March 27: Rossini and Mozart recital, conducted by German Cristoph Adt. Pianist: Dana Borsan March 29: Antonin Dvořák, Recviem, Op.89.Conductor: Julien Salemkour. Soloists: Sorin Munteanu, soprano, Cornelia Oncioiu, mezzo-soprano, Marius Budoiu, tenor, and Czech Marius Jan Martinik, bass March 30: Radio Children’s Choir. Invitation to Disney World. Conductor: Vociu Popescu April 8-12: Antique Violins festival. Violinist: Liviu Prunaru, Gabriel Croitoru, Bogdan Zvoristeanu, George Cosmin Banica April 17: Travelling Piano Tour held by Horia Mihail May 11: Concert dedicated to the Royal House of Romania. Conductor: Christian Badea May 22: Haydn, Mozart, Schubert and Sibelius compositions under the wand of the French conductor Amaury du Closel. Piano, Horia Maxim, and cello, Hyunah Park June 21: The closing concert of the session – the Verdi Requiem with the National Radio Orchestra and Chorus. Conductor: Tiberiu Soare bus station to Radio Hall. There is also economic and social conditioning, which lowers the average age of the audience in Romania. Is there a strategy to attract young audiences? We have such a strategy and we are following it alongside our partners who organize national tournaments to promote classical music – The Travelling Piano, The Golden Flute, The Duel of the Violins, Do you like ... Brahms?, George Enescu’s Violin in Villages. At large events such as these, we have special promotions and advertising, which definitely attract young people to Radio Hall through stories and special ideas. So far, these attempts have been extremely successful, but we find it hard to figure out if the audience is captured by these events alone or whether they come here for the season’s concerts too. oana.vasiliu@business-review.ro
www.business-review.ro Business Review | March 25 - 31, 2013
14 CITY FILM REVIEW
DON’T MISS WAGNER-VERDI GALA
Shadow Dancer
∫ OANA VASILIU Bucharest National Opera March 30-31, 19.00 The rival legacies of classical pioneers Giuseppe Verdi and Richard Wagner both celebrate bicentenaries in 2013, and the Bucharest National Opera, along with several other musical institutions, is paying tribute with recordings and performances around the world. Both born in 1813, the German Richard Wagner and the Italian Giuseppe Verdi each took operatic theatre in entirely fresh directions. They continue to inspire opera-lovers, and are known by millions of people, including many with scant interest in classical music. The ceremonial evenings held by the Bucharest National Orchestra and Choir present to classical music lovers internationally renowned guests such as Valentina Nafornita, Alexandru Badea, Dan Paul Dumitrescu and Marius Vlad Budoiu. Both performances will be under the wand of Cristian Mandeal, a Romanian who studied with Herbert von Karajan in Berlin and with Sergiu Celibidache in Munich. Cristian Mandeal has been a frequent guest of orchestras including the Staatskapelle Dresden and Berlin, Münchener Philharmoniker, Hessisches Rundfunk Orchester, Bayerisches Rundfunk Orchester, Bournemouth Symphony Orchestra, City of Birmingham Symphony Orchestra, Royal Liverpool Philharmonic Orchestra, BBC Scottish Symphony, RTE National Symphony Orchestra, Czech Philharmonic, Israel Philharmonic, Japan Philharmonic, Orchestre Nationale de Belgique, Santa Cecilia di Roma, Vienna State Opera, Deutsche Oper Berlin, Orchestra National de Cataluna, and the Gulbenkian Orchestra. oana.vasiliu@business-review.ro
Owen goal: MI5 officer Mac (Clive Owen) recruits failed bomber Collette (Andrea Riseborough) as an informant
DEBBIE STOWE Director: James Marsh Starring: Clive Owen, Andrea Riseborough, Gillian Anderson On at: Cinema City Cotroceni, Cinema City Sun Plaza, Cinemateca Union, Hollywood Multiplex, Movieplex Films about terrorists have recently tended to focus on Middle Eastern conflicts, joining a genre that includes Syriana and United 93. But it is the Troubles (the bitter and long-running discord in Northern Ireland, which has become less bloody since the Good Friday Agreement of the 1990s) that form the backdrop to this taut thriller. In 1973, Belfast 12-year-old Colette McVeigh (Andrea Riseborough) sees her younger brother killed in a gunfight between British troops and members of republican paramilitary group the IRA. Fast forward to 1993, and adult Colette is on a tube (metro) in London clutching a bag, which the director leaves the viewer to surmise contains a bomb. The attack is thwarted, and Colette is detained by compassionate MI5 officer
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Mac (Clive Owen), who offers her a choice: prison and her son taken into care, or become an IRA informant. But keeping her family together also means betraying her family, as her surviving brothers – firebrand Gerry (Aidan Gillen) and thoughtful Connor (Aidan Gillen) – are fellow IRA operatives, and Colette must balance participating in their violent missions with her informing duties, all the while avoiding the death sentence of detection. Meanwhile, menacing IRA higher-up Kevin Mulville (David Wilmot) is trying to ferret out the rat – or tout in IRA parlance – he knows is in their midst. In one suspenseful scene a character leaves an apartment after a tense debrief with Kevin and sees a flunky rolling up a piece of tarpaulin that would have come into play had the interrogation gone the other way. Films that follow a mole informing on a criminal group (The Departed, for instance) often plant us firmly on the side of the snitch so we more readily share their fear. Shadow Dancer takes a different approach. Though we sympathize with Colette and feel her predicament, she remains a mysterious and inscrutable protagonist, and aside from
her protectiveness of her son, the film never gives us a handle on her motivation and innermost thoughts. Dedicated Mac, meanwhile, who is an open book, has his own struggles with higher-ups, as his department boss (Gillian Anderson) seems to have other plans for his informer. From the early sequence on the London Underground, where the camera follows a wordless Colette for an extended period (reminiscent of Hitchcock’s Vertigo, in which another mysterious woman is pursued) Shadow Dancer adopts a spare style of filmmaking – we learn more from what is left unsaid. At times it seems more suited to a TV slot than the big screen, favoring understated events thoughtfully presented over the big bangs a film about terrorism could indulge in. None of which means it is ever less than gripping – thrills and twists are delivered and the atmosphere and questions it poses will stay with you long after. Much of this is owing to Riseborough’s enigmatic performance as the bomber-slash-single parent, though Clive Owen, as the moral heart of the film, also adds to its impact. ∫
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