The Economic Update - November 2013

Special Feature: Bay Street Tourist Complex November 2013

BAYSTREET

TOURIST COMPLEX

Special Feature: Bay Street Tourist Complex

PULL  OUT AND KEEP SUPPLEMENT

November 2013

It’s a Risky Business What Uncertainty means for RiskCap

An Interview with Paul Magro, RiskCap International Limited p.06

FOCUS ON POLITICAL LEADERS

Exclusive Interview

Corporate Interview

Special Pull-Out and Keep Supplement

Setting High Standards

High End Quality Way of Living

SEPA Changing the End Game

Bay Street Tourist Complex

James Bonello, Secretary General of Malta Bankers’ Association & Herman Ciappara, Head of Payments and Banking Dept at Central Bank of Malta talk about SEPA p.18

A superb pull-out featuring Bay Street – Malta’s most modern shopping and entertainment complex p.01S

Prime Minister Dr. Joseph Muscat gives his first interview to The Econimic Update since he was elected to office p.08

Angelo Xuereb, Chairman of AX Holdings describes his vision of 22 years – the €50 million investment of Hilltop Gardens p.12

CONTENTS

Special Feature: Bay Street Tourist Complex November 2013

BAYSTREET

TOURIST COMPLEX

Special Feature: Bay Street Tourist Complex

PULL  OUT AND KEEP SUPPLEMENT

November 2013

FEATURE STORIES It’s a Risky Business

What Uncertainty means for RiskCap

An Interview with Paul Magro, RiskCap International Limited p.06

FOCUS ON POLITICAL LEADERS

EXCLUSIVE INTERVIEW

Setting High Standards Prime Minister Dr. Joseph Muscat gives his first interview to The Econimic Update since he was elected to office p.08

High End Quality Way of Living Angelo Xuereb, Chairman of AX Holdings describes his vision of 22 years – the €50 million investment of Hilltop Gardens p.12

CORPORATE INTERVIEW

SPECIAL PULLOUT AND KEEP SUPPLEMENT

SEPA Changing the End Game

Bay Street Tourist Complex

James Bonello, Secretary General of Malta Bankers’ Association & Herman Ciappara, Head of Payments and Banking Dept at Central Bank of Malta talk about SEPA p.18

A superb pull-out featuring Bay Street – Malta’s most modern shopping and entertainment complex p.01S

Publisher John Formosa Editor Martin Vella Journalist Lorna Diep Sales & Publication Manager Margaret Brincat Graphic Designer Berthrand Pisani Cover photography Daniel Borg Printing PRINT IT Quote of the month: “Now this is not the end. It is not even the beginning of the end, but it is, perhaps, the end of the beginning.”

Winston Churchill For magazine and website advertising enquiries please contact: margaret@networkpublications.com.mt or call on (+356) 9940 6743 For editorial enquiries please contact: martin.vella@networkpublications.com.mt The Economic Update is published by: Network Publications Ltd., Angelica Court, Giuseppi Cali Str., Ta’ Xbiex, XBX1425, Malta Tel: +356 2131 6326/7/8 Fax: +356 2132 3432 Contributors: George Carol; Ivan Grima; Maarten Haijer; Melvin Mangion; Eric Muscat; Tania Naudi; Thea Saliba.

Special Thanks: AX Construction; Baystreet Tourist Complex; Banif Bank; BOV; Hugo Boss; Central Bank; Emma Diacono; Dmax; HSBC; JP Advertising Ltd; Malta Bankers Association; KPMG; Ogilvy PR.

04 Cover Story: It’s a Risky Business – What Uncertainty means for RiskCap

We talk with Paul Magro, Managing Director at RiskCap International Limited, who is on a mission to assist clients understand the risks and the effects they have in the event a particular uncertain outcome occurs 08 Focus on Political Leaders: Setting High Standards

Prime Minister Dr. Joseph Muscat sits down with Martin Vella for their first interview since Dr. Muscat was elected to office. In a hard-hitting, yet frank and open dialogue, the PM shares his views on a variety of topical issues 12 Exclusive Interview: High End Quality Way of Living

We meet with Angelo Xuereb, Chairman of AX Holdings, who describes his vision of 22 years – Hilltop Gardens – the 17,000-square-metre, €50 million investment 14 Corporate Interview: SEPA - Changing the End Game

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James Bonello, Secretary General of Malta Bankers’ Association (MBA) and Herman Ciappara, Head of Payments and Banking Department at Central Bank of Malta (CBM), give The Economic Update their take on the wave of the SEPA regulation rising before them

01S Special Pull-Out and Keep Supplement:

Bay Street Tourist Complex

Special Feature: Bay Street Tourist Complex November 2013

BAYSTREET

TOURIST COMPLEX PULL  OUT AND KEEP SUPPLEMENT

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A superb pull-out featuring Bay Street – Malta’s iconic shopping and entertainment complex showcasing clothing boutiques, fine restaurants, hotels, brand outlets and live street entertainment 08S Special Pull-Out and

Keep Supplement: Outstanding Reputation The Economic Update sits down with CEO David Debono, to learn why the complex is at the forefront when it comes to shopping, entertainment and relaxation 23 Higher Education: RGU extends its international reach by partnering with Global College Malta

Please feel free to email us with your viewpoint, whether you agree or disagree with the standpoint of the personalities we interview or the topics we focus on.

Your opinion, contribution, concern and feedback on our articles and interviews are welcome. Please include full name, contact details

We follow Robert Gordon University’s (RGU) working partnership with Global College Malta (GCM), which aims to deliver three of its oil and gas engineering courses

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www.maltaeconomicupdate.com All rights reserved. Reproduction in whole or in part is strictly prohibited without written permission. Opinions expressed in The Economic Update are not necessarily those of the editor or publishers. All reasonable care is taken to ensure truth and accuracy, but the editor and publishers cannot be held responsible for errors or omissions in articles, advertising, photographs or illustrations. The Economic Update is printed by Print IT and distributed free with The Business Weekly.

Editor’s Note

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Have you ever wondered why it is clever to pretend to be stupid?

I have come across an unorthodox pattern of behaviour whereby attempts have been made to disarm others, make them forget that one is scarily upset and lull them into thinking that one is a victim of circumstance.

But to portray self-pity by using Machiavellian ways of providing a picture which is further than the truth can possibly be is distasteful and must be stamped out. Reading a piece by an eminent columnist, I read how academics at the University of New Mexico wrote a paper proving how persons who self-victimise themselves are repulsed by society. And studies found most of these self-confessed victims of fear are atheists. “You shall not bear false witness against your neighbour” is the ninth of the Ten Commandments, which are widely understood as moral imperatives by legal scholars Self-victimisation has been studied as trait of an inbuilt genius emanating from self-delusional personalities with paranoid affliction and self-obsessed to look as the alpha of the pack. Sowing doubts to obscure reality is also a characteristic of the God-Complex syndrome, wherein the status and superiority of that person is demonstrated by a constant pointing of fingers at others, without ever accepting fault or blame.

This inconsistent behavioural pattern disarms other people, makes them forget you are scarily powerful and lulls them into thinking you are victim of circumstance. I don’t actually think for a minute that I have been threatened: If I did, I would keep quiet about it. But by telling others that I am terribly fearful out of my own spite of others is anti-social behaviour.

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The more ludicrous the self-victimisation is, the worse it works. Recently I interviewed a well known politician, who told me that he was hopeless compared with his predecessors, that he was uncomfortable with numbers, terribly self-obsessed, and that he got terrified before big speeches. In a way it was all hogwash. Yet it made me putty in his hands. Self-victimisation is dangerous when the person is lying about it to give a different outlook of himself to society in order to shift the blame of his past misdeeds. Even though my mother never managed to teach me how to cook, she did warn me never to diss the food I had just put on the table.

Self-victimisation and self-deprecation that demands a contradiction is never OK. There are men that are not yet convinced that what they are producing isn’t the kitchen equivalent of soggy pasta.

Proverbs 6:16–19 teaches us that there are six things that the LORD strongly dislikes, seven that are an abomination to him: “haughty eyes, a lying tongue, and hands that shed innocent blood, a heart that devises wicked plans, feet that make haste to run to evil, a false witness who breathes out lies, and one who sows discord among brothers.”

Offenses against the truth express by word or deed a refusal to commit oneself to moral uprightness.

Martin Vella

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24 Case Study: The Importance of Building a Strong Brand An expert case study reflecting AX Construction’s recent corporate rebranding exercise, which continues building upon AX Construction’s reputation as a recognised and trusted brand

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28 ICT: Making a Difference Our team meets up with Uwe Schoenfeld. Dmax Group Strategy and IT Development Director, who shares his knowledge and expertise about intelligent email marketing solutions 30 Talking Point: Independent and Non-executive Directors under Maltese Law Thea Saliba Marketing Officer for GħSL’s ‘Id-Dritt’ publication and for the new Online Law Journal website discusses the increase in the culture of appointing non-executive Directors (NEDs) and independent directors to the Boards of Maltese companies 34 Transport & Logistics: Express Trailers’ Logistical and Transport Service We follow Express Trailers recent prestigious listing on the Eudra GMDP Database for Good Distribution Practice compliance and Wholesale Distribution Authorisation for the storage and transportation of medicinal products 40 MEP Focus: All About People An exceptional interview, with outstanding MEP candidate Miriam Dalli, who’s straight-thinking and captivating approach comes to the fore in a comprehensive interview

COVER STORY

IT'S A RISKY BUSINESS What Uncertainty means for RiskCap

By Martin Vella Risk and Uncertainty is a fact of life in the financial and business world. With the global economy still feeling the effects of the recent crises, decision making is certainly the most important task of any manager and it is often a very difficult one. We speak with Dr Paul Magro, Managing Director at RiskCap International Limited, who aims to assist clients understand the risks and the effects they have, and provide recommendations in the event a particular uncertain outcome occurs.

Background In November 2008 the G20 leaders concluded that there was a need for a secure and stable financial system where all significant market players are subject to appropriate regulations and supervision for investor protection as well as financial stability reasons. In Europe the fund industry is governed by two regulations the Undertakings for Collective Investment in Transferable Securities (“UCITS”) and the Alternative Investment Fund Management (“AIFMD”) Directives.

Both regulations require a risk management process functionally and hierarchically separate from the portfolio management activities to manage and monitor risks which is key to protecting investors from risks they are exposed to in relation to a fund’s performance. Asset and fund managers can bring in in-house personnel or else delegate this function. For this reason RiskCap was established.

TEU: Can you begin by describing RiskCap International Limited and how does it provide customised and outsourced risk management services to investment management companies and funds?

PM: RiskCap was set-up this year to provide risk management services to investment management companies and self-managed funds. The recent regulatory developments in the European fund industry increasingly requires transparency from asset and fund managers. This comes as a result of the recent crises highlighting the need for all market participants to better understand, monitor and disclose their risks – in particular when investing in more complex products and strategies.

RiskCap’s team, which includes two fully qualified PhDs, is familiar with and utilizes both market-leading software and in04 |

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house, custom-made tools. This facilitates the measurement and analysis of a fund’s risk exposures – via VaR testing, scenario analyses, stress testing, back-testing and many other techniques. Our team’s mix of experience and academic background enables us to transform data into information, thus promoting a greater understanding of risks and opportunities.

RiskCap’s team, which includes two fully qualified PhDs, is familiar with and utilizes both market-leading software and inhouse, custom made tools

TEU: Why Risk Management?

PM: The greatest risk in life is taking no risk. In a world that is constantly changing, by not taking risks you could be risking even more. After my PhD studies I wanted a challenge and to put my expertise in quantitative modelling and risk analysis to further use. The recent crises have opened an opportunity for enhanced risk management services which is in every company’s best interest. It is an important strategic function and could provide a competitive advantage.

TEU: What are the various services RiskCap offers that a fund’s risk management needs and what are your objectives where risk management service of a fund’s exposures are concerned?

PM: RiskCap has identified four service levels that it can offer self-managed funds or asset managers, namely: • Risk Manager: This statutory role is required under the regulations. RiskCap can offer clients a risk manager that fits the

minimum requirements in the regulation or a risk manager who can provide a valueadded service. The tasks carried out by risk manager include responsibility for the client’s risk management process – thus handling the development of the relative framework, policies and procedures and their implementation. This includes monitoring and analysing risk exposures on both day-to-day and long-term bases, incorporating quantitative/analytical models. The Risk Manager also attends board and investor meetings to report on the risk profile of the client.

• Risk Officer: The risk officer supports the risk manager and is responsible for measuring and monitoring the portfolios risks of the client including market and liquidity risk. This risk officer will also provide support to the client’s risk management process and is accountable for the analysis. The risk officer is recommended for clients whose (i) Risk Manager lacks time, or (ii) Risk Manager lacks expertise in specific areas, or (iii) Risk Manager nominee risks not being approved without supporting manpower/ expertise.

• Risk Reporting: This service is offered to (i) clients that have a risk management function in place but only need RiskCap to provide them with reports or (ii) clients that are after ad hoc risk reporting.

RiskCap can produce detailed reports on a fund’s risk exposures. This is critical for disseminating risk information to managers, investors and regulators for improved risk decision-making.

COVER STORY

• Risk Advisory Services: RiskCap aims to provide independent risk management consulting offering advice and assistance to its clients. We are not only targeting the hedge fund industry but we also envisage targeting other organisations e.g. banks and insurance companies. Our team will work with clients to create strategic, practical and effective processes to minimize their risks and maximise their opportunities.

TEU: How does RiskCap assist businesses to establish a risk management framework and what is the set-up process involved here?

PM: After gaining a deep understanding of the client’s operations and requirements RiskCap will assist its clients by setting up a robust risk management framework based on five core factors: a strong corporate governance that diffuses a positive risk culture from the top to the bottom of the organisation, a coherent and exhaustive set of policies and procedures, the technological capability to extract data about the organisation’s performance and the risk of its uncertain environment, know-how in measuring this uncertainty, and finally, its ability to monitor risk on an ongoing basis in order to optimise the risk taking process.

TEU: How do you transform risks into opportunities?

PM: RiskCap’s service can be split into two, namely: 1. Clients who, due to resource constraints, are focusing on addressing the recent multiple and onerous regulatory requirements; 2. Clients who have the resources to delve even deeper into risk management.

In either case, RiskCap promises an efficient service. This is especially important for the former as it provides the opportunity to achieve savings that can address other needs.

Furthermore, in both scenarios, RiskCap’s knowledge and systems provide a simpler, and thus clearer, picture of a client’s risk profile.

This clarity facilitates insights, allowing opportunities to be grasped. Finally, for the latter client, RiskCap is possibly uniquely equipped locally to tackle more complicated requirements. This affords clarity on even the more obscure areas of risk management, and hence brings opportunities to light.

TEU: Why should I partner my business with RiskCap? PM: There are three reasons why you should consider partnering your business with RiskCap. First, Our Service: We will provide

you with a hands-on, custom designed and cost effective solution that meets your risk management requirements. Second, Our People: The team at RiskCap, which includes a mix of recognised and relevant academic credentials and real-world experience, is focused on one common goal of providing you with a service that helps you identify, measure, manage and monitor your risks.

Third, Our Goals: RiskCap is not only a Maltese company but a European company and forms part of a group with 25 years in the finance industry, spanning three continents (America, Europe and Asia). Our target is that over the next five years to expand internationally and become a well-known brand when it comes to risk.

RiskCap is not only a Maltese company but a European company and forms part of a group with 25 years in the finance industry

TEU: What is RiskCap’s footprint in addressing many of the most strategic requirements of the risk management industry?

PM: In addressing the strategic requirements RiskCap is providing a range of services that should cover all the levels of requirements for asset and fund managers. Furthermore we are not only targeting the hedge fund industry but also envisage targeting other sectors such as banks and insurance companies.

TEU: Have you set international benchmarks in execution excellence that has translated into measurable business benefits for your customers?

PM: RiskCap aims to assist its client’s set-up a risk management process (e.g. an ability to scale up, high quality reporting, access to foreign academic community, access to range of risk management related service providers) that not only complies with legislation but also with international standards. We believe in providing a value-added service that takes its clients over and above what is required of them when it comes to realising their risk management requirements. RiskCap will always set high standards in the services it provides it clients by rigorously continuing to improve and be ready for any opportunities that arise.

TEU: How do your business segments stand out among competitive businesses?

PM: RiskCap is a local company pioneering risk management services as a core business.

What sets us apart from other businesses in Malta is that we have two fully qualified PhDs. This is something that is unique for Malta. We

are also competing internationally, obviously against much larger and more established companies but we have nonetheless received excellent feedback to date. Our current structure and resources should allow us to scale up our client base significantly in the near future.

TEU: What is the top challenge facing RiskCap today?

PM: The biggest challenge that we face is convincing fund managers to make full use of our services. Many of our clients have a strong understanding of risk management and have been doing it for years themselves, however due to the recently introduced regulations, they are now being forced to delegate it or get someone else in-house and thus see it as an expense, rather than an opportunity to get specialists in and gain additional insights. As a result they are seeing this as a necessary evil. As a result the downside is that risk management is being treated solely as a compliance issue and cost; many just draw up lots of rules and make sure they are blindly followed.

However, in finance, risk management should be seen as a way of understanding and managing risks whilst taking advantage of opportunities. This is what RiskCap aims to achieve with its clients.

TEU

All rights reserved | Copyrighted

Editor’s Note Dr Paul Magro is Managing Director at RiskCap International Limited, responsible for risk management and quantitative research. He joined RiskCap after having worked in the local financial services industry and recently, having received his PhD in Finance at the University of Bangor (ranked first in the UK for Finance and Accounting Research in the latest Research Assessment Exercise). His research focused on hedge fund risk and performance, persistence and capital flows and is in the process of being publishing in top rated international journals. He is also a visiting lecturer at the University of Malta’s Banking and Finance department lecturing 4th-year Banking and Finance and MSc Banking Finance students and has been invited to talk at seminars and conferences locally and abroad on the topic of risk.

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financial services

The Malta Funds Industry Association and FinanceMalta hold an Educational Clinic on FATCA

Finance Malta Chairman, Kenneth Farrugia addressing the FATCA conference

The Malta Funds Industry Association (MFIA) in collaboration with FinanceMalta has recently held an educational clinic for its members and the financial services community on the Foreign Account Tax Compliance Act (FATCA) and its practical implications and impact on the various stakeholders operating within the local funds industry.

The clinic was led by FATCA specialists from PwC Malta and PwC Germany.

The presentation discussed the entities that will be impacted by FATCA, the main requirements and deadlines as set out in the FATCA legislation, including those provided for in the Model Intergovernmental Agreement that Malta should shortly be signing with the United States.

Dr Neville J Gatt, Tax Leader and Partner at PwC Malta commented that “The U.S. FATCA is one of various initiatives around 06 |

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the world to combat tax evasion through new reporting obligations imposed on financial institutions worldwide. Failure to meet these new reporting obligations would result in a financial institution suffering a 30% withholding tax on certain US source income. For asset managers, FATCA is not simply a compliance exercise, it is merely one out of various legislations that is reshaping the industry at its core. It is clearly important to plan the way ahead for such FATCA requirements so as to minimize the disruption to the business operations as the FATCA deadline approaches.”

Kenneth Farrugia, Chairman of the MFIA stated “FATCA which became part of U.S. legislation in 2010, is a new U.S. information reporting regime with its main aim being to identify U.S. persons that are either directly investing outside the U.S. or indirectly earning income inside or outside the U.S. through non-U.S. entities. This is one form of several initiatives to combat

tax evasion and introduces substantial reporting requirements. FATCA will have a significant process and technological impact on the fund industry and the MFIA has over the past months been very active on this subject by issuing a technical brief holding this educational clinic in order to update and assist its members to gear up for this new requirement.

He continued, “the asset management industry is today operating in a markedly challenging environment driven by a regulatory environment that is impacting stakeholder relationships and business models. This is leading the industry into a transformational and restructuring process.

The Association is also assessing the implications of UCITS V, UCITS VI and MiFID II which are among the regulations that will be introduced in the coming months and the Association will keeping its members informed on these changes.”

TEU

U LT I M AT E D I S C R E T I O N

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INTERVIEW OF THE MONTH

Setting High Standards

By Martin Vella

With his distinctive and welcoming aura, Dr Muscat is all smiles on this grim Monday afternoon. And no wonder: At the time of our meeting Dr Muscat has just returned from Brussels and is presenting his first budget, where the momentum is on his side.

Backdrop Prime Minister Joseph Muscat won the election with a battle cry for meritocracy, promising to usher a new style of politics, a ‘Malta for all’ campaign and that injustice will become a thing of the past. But how much has he managed to deliver on those promises?

TEU: May I begin by asking you, Prime Minister, what does the economic relationship between Europe and Malta mean to you?

JM: The economic relationship between Europe and Malta beyond doubt should be viewed as an extension of the Maltese market. We form part of the Common Market and this is our viewpoint, and this may be the difference in our economic and foreign policy positioning. Going to Europe is not enough and it should not rest our laurels simply because we are in Europe.

This should be the beginning. In fact, we should seek markets outside the EU, such as African or Asian markets, such as is actually happening with some of the companies who have extended their businesses there. Forma mentis Europe should be our extension and is not an external entity. That is the most important aspect I perceive and I hope we will instill this in people’s minds for the next five years.

TEU: What are the necessary steps to strengthen and improve economic ties and how would you characterise the relationship between the EU and Malta right now?

JM: As I have said, we are part of a single market. I disagree with portraying it as an ‘us’ and ‘them’ relationship; it’s an ‘us’ relationship, whereby we cannot consider Europe as a sort of foreign market – it is an extension of our market. Their rules are our rules, and we have a say in the way these rules are put forward. I would rather see Maltese companies considering themselves as part of the global community, rather than just the European market. We cannot be happy with just a European outlook; we need a global outlook. That’s a change in mentality which I hope we will be putting forward in the next five years.

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Dr Joseph Muscat, in discussions with, David Cameron, Prime Minister of the Uk, during the retreat session for leaders of Commonwealth countries at CHOGM 2013 in Sri Lanka - (Photos – DOI – Omar Camilleri)

TEU: So what are your long term political focus and short term economic focus?

JM: I would group them together. If you are asking where I would like to be in a couple of year’s time, I would like Malta to be on the shortlist of any other investor in Europe and elsewhere, where Malta is considered as a place for investment and immediately crosses the mind as an alternative for relocation. This is something I think we have to work hard on, since the situation is such that once we get shortlisted, many times we will manage to win the race, but the problem is getting people to consider us, to show that Malta can be a base for financial services, tourism, the digital economy and manufacturing. In the long term we need to get Malta on the shortlist of every other international company. In the short term, our aim has been that of seeing that this political transition, after 25 years of a conservative government, is as seamless as possible, and I think we have managed quite well. Economic growth during the second quarter of 2013 was 5.4%, which is an impressive figure. That shows that the economy didn’t stutter; there was a change of government, without any repercussions on the economy, and I would say there’s a reinvigoration of our economic structure.

I believe we are at a junction where we have to choose between the prehistoric economic model and an innovative economic model, where we need to be the people who pioneer new ideas

TEU: Following the agreement reached with China, do you have any estimates on

how much the new power station will cost, and where is this money coming from, since this was not in the original finance costing of the budget and may have a serious implication for our economy?

JM: No, it doesn’t, because they are two different projects. We are carrying on with our project where we now have a preferred bidder chosen. It’s a consortium made up among others of Maltese investors, including German giant company Siemens and SOCAR Trading, a gas company who will supply us with the necessary amount of electricity over a period of time, at an agreed price. This is something totally in line with what we promised, and doesn’t add any extra burden on our economy. When it comes to our agreement with China, we are looking at three aspects; firstly, giving China Power and Shanghai Electric a minority stake in Enemalta. Secondly, the opening up together of a servicing centre for other power stations across Europe and the Mediterranean, and thirdly, setting up a joint venture to go into solar power. None of these add any burdens on tax payers, rather they will alleviate those burdens.

TEU: There has been significant fiscal slippage- Malta’s general government deficit was 3.3% of GDP in 2012, well above the government’s target (2.2%). Fitch now forecasts that general government gross debt (GGGD) will peak at 74% of GDP in 2014-15. Within the euro zone there is a need for growth. How will you be able to implement EU growth policies in Malta taking into consideration Fitch forecasts?

JM: We are extremely resolute. As announced in our budget, we are looking at concluding

IT INTERVIEW OF THE MONTH

this year at below the 3% deficit rate - we’re not moaning, but working hard with a comprehensive spending review, which we have carried out. We have managed, even though the European Commission gave us two years to get below the 3% target, which we managed to do that basically in six months, and this goes to show how hard we have worked. Our outlook is that we will reduce it further this year. But then, how can we get growth? Getting growth is about going for innovative measures. I believe the budget that has been announced has given the economy quite a number of incentives on how to develop more growth. But it is all about new ideas. We are not scared of new ideas. I believe we are at a junction where we have to choose between the prehistoric economic model and an innovative economic model, where we need to be the people who pioneer new ideas.

TEU: So would you agree, as the Minister of Finance said to us a week ago, that on the expenditure side it is on a downward trajectory?

JM: Yes, we are looking at that sort of scenario where the expenditure increases at a decreasing rate, and will be reigned in by plans which have been put forward.

TEU: Since the March 2013 elections, there has been no concrete policy announcement on the pension pay-asyou-go system, despite several years of consultations on the review and recommendations of the Pensions Working Group. What is your policy and how are you going to tackle this issue?

JM: The policy has been announced in the budget, where we are very clear where we want to go, and we have announced that there will be incentives to go for the third pillar. That is something we are actively pursuing and I look forward to seeing the results during the next financial year.

disarray, and there was no direction. We started by fragmenting the problem; seeing the medicine stock and inventory issue as one thing, and seeing the Mater Dei issue amongst other matters and treated other issues separately. We are currently in the final stages of the examination of some points and we will come up very soon with ideas of how to move forward. I do believe this is a national project, rather than government project. I will not allow a situation where we leave after this legislature a health system in shambles such as the one we inherited. We have a very good workforce, excellent human resources and very good equipment, but the management is nonexistent really.

TEU: Do you agree that MPs should have freedom of expression on the basis of their political judgments in the House?

JM: Wherever there are issues which are not clearly spelt out in an electoral manifesto, points should be decided within a parliamentary group, and then the parliamentary group decides on the basis of majority. If there is an issue of conscience which was not put forward in an electoral manifesto, then all options need to be exempt.

TEU: I refer to the prima facie ruling by the Speaker of the House in breach of privilege over comments by the PN Leader that Prime Minister had interfered in police proceedings against John Dalli. Dr Simon Busuttil said the Opposition would contest the ruling in Parliament and in court, possibly even in the European Court. Is Dr Busuttil right by stating that he viewed this as an attempt by the government to gag the opposition in a manner which undermined democracy?

JM: The leader of the opposition is free to make his own comments, as any other citizen, and likewise I put forward my own comments and judgments. But one cannot lie. And the statement that he made was

an outright lie. Later on, during another debate, he said that he believed that the Commissioner of Police came to the judgment of John Dalli case on his own. And I hope he sticks to the latter, because saying that I interfered in any way is the furthest thing from the truth that you could imagine.

TEU: As you have just mentioned, your current government has ensured a rapid reduction of the budget deficit by the end of the fiscal year. How do you intend to pass structural reforms and improved growth potential?

JM: Well, I think it’s all about leadership, about people not thinking that you are wasting money, doing a sensible comprehensive spending review, in the most sensible of manners. I believe that the work done by Prof. Maurice Maillard, who is one of the UK government’s top consultant on spending reviews is helping us a lot in new ideas such as zero budgeting. But then it’s also about creating new streams of revenue, and getting people to see that the government wants everyone to have a level playing field. There are ideas that we put in the budget such as reducing the tax on rent from a maximum of 35% to 15% – some people see this as a tax reduction, and it is, but I believe it will have a net positive effect on the economy, and that is how we stimulate the economy.

TEU: And regarding unemployment?

The opposition has accused that even in unemployment, there is no policy?

JM: Well, it would have been easier to have a policy if we inherited one, but we didn’t.

If I accept what Eurostat is saying there is a downward trend in unemployment, and we are the member state with the fourth lowest rate of unemployment in the EU. Am I happy? No, I am never on this and I think more can be done and more will be done.

But it’s about creating wealth and jobs –

TEU: But is the third pillar pension going to be implemented during this budget?

JM: Sure.

TEU: Out-of-stock medicine has reached alarming levels at hospitals, waiting lists have reached peak levels and hospital emergency units were facing a bit of a crisis. When do you intend to articulate a detailed plan on healthcare and address this important issue?

JM: The alarmingly levels have been there for some time. Actually, and I believe we have started taking stock of the situation.

We found a health system which was in

Prime Minister of Malta Joseph Muscat greets President Mahinda Rajapaksa of Sri Lanka ahead of the Commonwealth Heads of Government 2013 Opening Ceremony

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INTERVIEW OF THE MONTH

states can handle the presidency smartly and handsomely. It will be an occasion also to show that we can come up with innovative ideas, and it will be occasion where we can put a number of policies on the agenda.

The Prime Minister of Malta, Joseph Muscat, in a meeting with the Prime Minister of Italy, Enrico Letta, at the Auberge de Castille

even in the way we acted swiftly on MEPA tariffs. In some cases we reduced them by more than half, overnight, last April. That is something which has had positive effect on the economy. It’s about being proactive.

TEU: Let’s move onto illegal immigration.

You have recently expressed concern about how things are ‘developing or not developing’ on immigration in Europe.

What did you mean by this statement?

JM: Well I think that on the positive side, for the first time, Europe has bound itself to a timetable where by next December there should be operative decisions taken. The negative side is that these are all words for now – we need to see action, then we will be happy.

TEU: You have recently returned from the EU Summit, where you wanted to present a plan of action with measures including a more coherent returns policy; a proposal for Frontex to start coordinating return flights; the issuance of legal documents to immigrants; the roping of third country like Libya, which is not signatory to the UN convention on refuges; and sending a clear message to countries of origin that migrants will be repatriated if they do not qualify for asylum. Following this Summit, have all these objectives been reached, or is there another way of reaching them?

JM: We have managed to get a very concrete result: for the first time Europe has agreed to a timetable on taking these decisions. The points you mentioned are part of our agenda, and I look forward to December when we will get a concrete answer on that.

TEU: Dr Robert Visser from EASO said to us, ‘we are dealing with human beings and in this problem we have to support these human beings because they are looking for help, rather than sending them back.’

Do you agree with this statement?

JM: His job also to see that the countries that support these people are also supported – and until now we are not supported. No one 10 |

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is supporting us. When the cookie crumbles, there must be more support from other countries, especially Europe. We are doing our best, others aren’t.

But it’s about creating wealth and jobs – even in the way we acted swiftly on MEPA tariffs.

TEU: But so you believe that in order to arrest the hemorrhage – the flow of illegal immigrants – they have to go at the source and direct their efforts to the country of origin?

JM: Until now Europe hasn’t taken any decisions on this issue or bound itself to any deadline. That’s what we managed to do.

TEU: Let’s turn to cohabitation. Mons Anton Gouder, the Curia’s pro-Vicar General, was quoted as saying that, ‘the Civil Union Bill is a full marriage bill,’ and that ‘it profoundly changes the nature of marriage and gives a totally different definition of marriage.’ Do you agree with this, and don’t you think marriage, should be a sacred bond between a man and woman? In quoting Genesis, Chapter 1, it is indicated that ‘God made men and women different, and God is the one who joins men and women in marriage’; even in the New Testament Jesus asserts Gods authority over marriage – ‘it is God’s institution, not men’s’. So, it is fair to say God’s rules apply?

JM: My job is not interpreting the bible, but that of a politician – to legislate for minorities irrespective of their beliefs. We went to the people, we said that there will be a civil union, and that’s what we are putting. It’s not marriage – it’s a civil union. And that is what we will be implementing.

TEU: What would you like to accomplish through Malta’s first EU presidency and also by 2018 - the year of the European Capital of Culture?

JM: We have a unique occasion to put Malta on the map, and show that a small member

The planning and organisation necessary for such an important and engaging event in view of the fact that Malta will be hosting the Presidency of the EU in the first six months of 2017. Although the presidency is very demanding, likewise we are convinced that through a national effort, Malta will prepare itself in the best possible manner in order to organise successfully the EU Presidency and will reap the economic benefits that we hope to accomplish from it.

Before the first EU presidency though Malta will host CHOGM 2015; another opportunity for us to show we can be among the best. In Sri Lanka, following Mauritius’ withdrawal and despite other countries’ interest, Malta received a unanimous approval to host this major international event for the second time in ten years. This is a clear indication of the trust and respect Malta holds among the Commonwealth countries and the international community.

We have two years, and not four as is the case for the usual CHOGM organization, to come up with the best possible platform for this worldwide conference. But I am convinced that our hard-working people will once again successfully rise to the occasion and lead Malta to host this event in an honourable manner and to maximize the economic boost it offers before the EU presidency in 2017 and the European Capital of Culture in 2018 TEU

Editor’s Note Dr Joseph Muscat took office as Prime Minister of Malta on 11 March 2013. Dr Muscat received his formal education at the Government Primary School in St. Paul’s Bay, Stella Maris and St. Aloysius’ College. He graduated with Honours from the University of Malta in Public Policy and later as Master of European Studies. In 2007 he attained a Doctorate of Philosophy in Management Research from the University of Bristol (UK). From 1992-1997 he was a journalist and eventually Assistant Head of news with a national private radio station. He was elected member to the National Executive of the Partit Laburista at the age of 21 and later nominated as Education Secretary of the Party. From 1997 to 1998 he was a member of the National Commission for Fiscal Morality. Dr. Muscat was also a market intelligence manager and investment adviser. He successfully contested the first European Parliamentary elections in Malta in 2004. In 2006 he was the recipient of the Outstanding Young Person of the Year. In 2008 he was elected as the Leader of the Partit Laburista.

EXCLUSIVE INTERVIEW

High End Quality Way of Living

By Martin Vella

Artist’s impression of Hill-Top Gardens Retirment Complex In an exclusive with The Economic Update, entrepreneur Angelo Xuereb speaks about a new AX Holdings project, embracing a vision spanning 22 years. Hilltop Gardens Retirement Village is testimony to the Group’s affinity with this sector and is the largest private project of its nature in Malta.

TEU: Exiting the economic crisis, business leaders are doing more with less? Do we have to change our thinking especially in the elderly health sector?

AX: When you have a downturn it is inevitable that business leaders review their operations, and zoom in on the nitty gritties in order to reduce expenses, think out of the box in an attempt to be creative to generate work. Secondly, when facing times of crisis, one has to be innovative and resourceful enough to seek avenues that are a catalyst for the necessary changes. This is what we have been doing in the hotel sector, such as in the case of the Seashells Resort at Suncrest where we decided to go for an all-Inclusive package. In the construction industry, we concentrated on restoration and other major projects.

The development will be of a high end quality and offers a luxurious way of living for elderly

Beyond any doubt, since the post-war era, we have had an escalating problem with the care of the elderly. As a group, AX Holdings is a reluctant follower of trends, instead focusing its energy on innovation. Presently, we have many homes for the elderly which are all the same, in the sense that these hold a wide spectrum of residents with varying needs, some perhaps 70 years old with a particular health condition, while others being 90 years 12 |

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old with disability problems. Therefore, we sought to establish a new concept of elderly residence and are entering this market with a new project, the Hilltop Gardens at Naxxar. The project spans a vast area with 43 percent footprint built-up and 57 percent open space, including two blocks for independent elderly citizens with their own kitchen, terrace, sleeping area and car park facilities. This enables elderly residents to live a comfortable life for as long as possible.

It will also offer residents the opportunity to continue retaining a healthy and dignified lifestyle The development will be of a high end quality and offers a luxurious way of living for elderly, with a variety of amenities such as a Spa, outdoor pool fitness centre.

Each apartment will have a separate living quarter with large terraces with extensive views. On the premises one will find a crafts centre, multi-purpose hall, restaurant, bar, a chapel, a clinic, bocci club, library and billiard room. We will also provide a freqent shuttle bus service to the Naxxar Centre.

Gardening enthusiasts will be allocated an area in the ample gardens for their exclusive use. On demand services, such as cleaning and laundry for the independent living will also be included 24/7. The terraces will even offer sun beds and built-in smart technology is also being installed in certain apartments.

Residents will also be allowed to transport any valuable piece of furniture that they might wish to hold on to, naturally within the limits

and confines of the space. Independent living units will include a “smart” carpet in a centralised location that will set off an alarm to the Reception if no one has crossed over for a number of hours TEU: Given your abiity to always spot opportunities out of any situation, how did you arrive at conceptualising this project?

AX: Interesting question… The concept has been brewing in my mind for the past 22 years. I had a stand-alone concrete factory at Naxxar and by time, building developed around my factory. Upon becoming a mayor, one of my objectives was to foster a better environment for all residents. Naturally, I had to ensure that my factory, which was a cause of dust and debris, was not of an inconvenience to residents any longer. It was at this time that I asked myself what I could do with this property. We applied for a MEPA permit over 22 years ago andwe were granted a permit only recently. However, we always maintained the same principle, the same vision although it has developed and matured over the years – which will result in a breakthrough in quality in the sector. And I wish to end this question on this point- today the standard of living of the population is ever-increasing. You have elderly people who cannot afford the average, others who can, and others affording the high end. This is the same when choosing a holiday and staying

EXCLUSIVE INTERVIEW

at a hotel; you may choose three, four or five star properties according to your budget.

The concept here is identical and the elderly will have a residential product available in Malta which has now been studied for over 22 years, backed by a wealth of experience in the construction of residential units, hospital, hotels, etc. We always stress on the quality of our projects and are now embarking on this outstanding sheltered housing offering high end facilities, TEU: How would you define the development Hilltop Gardens project in terms of elderly home care retirement?

AX: This is a top end product targeting people who can afford a certain amount of luxury. The units will incorporate seemingly little things which in reality are big advances improving the quality of life and facilitating living in the third age. There is a small garden with each apartment, large terraces on every apartment level, indoor and outdoor lifestyle amenities, swimming pools and landscaped gardens where people can walk, relax, and recreational facilities. The idea is to keep people active. It is sad to go to homes and see people just waiting for the day to pass them by. We are providing a new concept of elderly community lifestyle and this is something which is not found in Malta.

There is the benefit of a manned reception 24/7, and paramedics available at all times.

The “nursing home” side of the project will offer recovery areas with qualified nurses which will provide healthcare services. This combination of facilities provides a unique elderly healthcare system in Malta and this falls within our vision to improve people’s quality of life during their latter years and not see them sadly deteriorate We shall also have a children’s play area and the roles will be reversed, in that the residents would request to see the children at the residence and take them around. One of the best therapies for the elderly is enjoying their children and grandchildren in their living ambience instead of being driven for a monthly home visit. There will be 500 metres of pathways,

Inside a Hill-Top Gardens Apartment

craft centres with play areas providing plenty of space for residents to walk and enjoy stunning views alone or with their loved ones.

TEU: What have you designed differently in landscaping and eco-friendly measures for this new concept?

AX: The majority of the site consists of open space and the design incorporates irrigated gardens, a large swimming pool, and spectacular sweeping views of Malta’s countryside. The very location of the gardens is what makes it most attractive, since it is situated on a high vantage point with views of the green valley below. The spectacular environment itself attracts the resident and visitor. The property is superbly located and will be complete with CCTV, remote controlled gates and garages.

It is also not more than five minutes walk from the town centre. The design also allows space and sheltering for a shuttle bus service to the town centre, which facilitates communication between the internal community at the residence and and external communities. This is not just about maintaining an existence, but helping our loved ones make new memories. We look at this as a lifestyle change and a quantum leap in elderly luxury residence. In addition to design features and smart technology, and more importantly Hilltop Gardens is designed as a “green building”. This requires a lot of higher investment, but will save on energy by about 60 percent.

There is going to be 500 meters of pathways, craft centers, with play areas providing plenty of space for residents to walk and enjoy stunning views

TEU: What levels of expertise are you going to provide for this project in terms of hospitality and healthcare services and standards?

AX: I think this will all start with the recruitment of the CEO for the operation and we have already identified the person we wish to have within this project. Obviously at

Inside a Hill-Top Gardens Apartment

this stage we are unable to disclose the name, however, we believe this person possesses a wealth of experience and the necessary vision to carry this project to fruition. It is at that point that we will commence to define the details of what the healthcare service level will be, what we can assure you of is that it will be of the highest standard possible.

The degree of actual services we will provide will also reflect the high end nature of the Hilltop Garden project.

TEU: Can you give me three unique selling propositions for this luxurious concept?

AX: Lifestyle, location, quality and if you will allow me another, I would also add our approach towards the community and how we deal with the elderly residents. I think this is a characteristic that is derived from the hospitality side of our business operations. In all of our hotels, we have many repeat guests re-visiting us. These are satisfied guests, who have experienced dealing with our employees, who are always ready to serve with smile. I strongly believe that the guest orientation embedded in our culture should hold us in good stead.

TEU: Do you find time to reflect on your past achievements?

AX: I always look ahead and I am a forward thinker. I am constantly seeking ways and means to expand my business. However, when I look back, I do feel that I have achieved a lot, although I say to myself that I wanted to do much more. I am not in the driving seat of my country. Even though I speak a lot about infrastructure and construction projects, I always want to do these differently with new ideas to improve the landscape of my beloved Malta. I am a creative person with many ideas and when I look back I believe my career to date has been a success and I am fortunate to have been given the opportunity to contribute to my country.

TEU

All rights reserved | Copyrighted

AX Holdings in the Hospitality Sector AX Holdings first venture in hospitality started in 1983 with the Sunny Coast 4-star complex in Qawra. In 1988 the Group inaugurated the largest hotel in Malta, the 4-star Suncrest Hotel. In 1996 the Group shifted its attention to Sliema and developed the 4 star boutique, The Victoria Hotel. The following year a 200 year Palazzo Capua was restored to its former glory and forms part of the Victoria Hotel operationIn 2007 the group developed the first 5-star city designer hotel in Sliema – The Palace. The existing five hotels have been grouped under the AX Hotels brand and the Group is looking for opportunities for further expansion.

November 2013 | THE ECONOMIC UPDATE

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Single Euro Payments Area

Banif Bank (Malta) wins Best Banking Group Malta 2013

From left: Nick Laurance from World Finance and Joaquim F. Silva Pinto, at the London Stock Exchange Banif Bank (Malta) plc has won the World Finance 2013 award for Best Banking Group in Malta. The Bank’s Chief Executive Officer Joaquim F. Silva Pinto was presented the award at the London Stock Exchange. This is the third time that Banif Malta has won the award, having clinched it in 2010 and 2011. The award recognises the Bank’s sound financial performance, strong corporate governance and innovative client solutions.

During an interview at the London Stock Exchange Mr Silva Pinto highlighted the Bank’s successes saying that the best result is the public’s idea of the Bank. “When we communicated our fifth anniversary this year, the public was surprised that we’ve only been here for five years! The public perception is that Banif has been around for so much longer! And this is the best acknowledgement the Bank can get!”

Banif Bank (Malta) has registered good results in a challenging market, experiencing rapid expansion and a 14 |

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growth rate that’s faster than other banks’.

With percentage growth in assets of 59%, 71% growth in deposits, 13% growth in loans, 11% growth in net operating income and 24% growth in client relationships, the Bank is firmly set on a course of expansion, supported by a dedicated team of employees , a retail network of ten branches and a Corporate and Business Banking Unit.

Innovative client solutions are developed through new-on-the-market products and product privileges, and an alternative customer experience. The Bank’s sound corporate governance is based on checks and balances, ethical operations, a cautious outlook and mitigation of risk, as well as CSR commitments.

Mr Silva Pinto concluded his interview by outlining the Bank’s vision for the future.

“Banif Bank Malta will keep a consistent strategy of reaching targets and growing volumes, in a context of slow market conditions. We aim to increase the

Bank’s local market share according to projections, grow operations according to market needs, continue on a programme of investment in human resources, keep the customer at the centre of all that we do and work strategically on the provision of services to SMEs to strengthen the local environment of open business.

“This year Banif’s community investment programme targeted diverse sectors of society, with activities involving art, culture, philanthropy and education. Our programme is coming to an end for this year, and will culminate in The President’s Charity Fun Run in December which the Bank supports in a big way and which we’re all looking forward to. Apart from our sponsorship Banif mobilises other resources in order make the event a smooth one on the day, while helping the MCCF with the logistics by accepting application forms at our Branches. We urge the public to once again join us in this event, to help make it the biggest one ever, and generate even more funds for those in need.”

TEU

BELIEVE: RECOGNISING EXCELLENCE

Another prestigious award was bestowed on Banif in recognition of the Bank’s financial performance, sound corporate governance and innovative client solutions.

Banif Bank (Malta) plc Banif Bank (Malta) plc is a credit institution licensed to undertake the business of banking by the MFSA in terms of the Banking Act 1994. Registered in Malta C41030 – 203, Level 2, Rue D’Argens, Gzira, GZR 1368, Malta.

Single Euro Payments Area

Preparing for SEPA

By Tonia Naudi - Senior Manager Payment Business

SEPA (Single Euro Payments Area) is about harmonizing millions of everyday Euro payments. This major initiative, supported by the European Central Bank (ECB), the European Commission (EC) and banks across the SEPA region, is related towards creating an integrated payments market across Europe for any organisation or individual making or receiving payments in euros within the SEPA region. This initiative was undertaken as a reaction to the fragmented national payment systems we have today. A single set of SEPA standards will bring harmony across the different nations. Organisations and individuals will be able to make payments to anyone within the area through their existing bank account using standardised payment instruments.

SEPA will be preparing the field for greater competition in the provision of payment services. Ultimately organisations and individuals will both benefit once SEPA is introduced. As from the 1st February 2014, euro payments within the SEPA territory will be considered domestic, and therefore will be subject to the same conditions, rights and obligations, regardless of national boundaries.

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Payments businesses based in SEPA countries will make payments and collections in euros across the area as swiftly and as cheaply as they do today in their own country. This is achieved primarily by quoting the correct information in the payment transaction, including both the Bank Identifier Code (BIC) and the International Bank Account Number (IBAN). Furthermore with shared standards, faster settlements and simplified cash flows, companies can improve their financial supply chain, and move towards a more centrally managed treasury function.

BE Prepared - How? The most important changes for businesses will relate to the conversion of their databases which include bank and account information. These must now contain the IBAN because the traditional bank account number (BBAN) will no longer be used, after the 1st February 2014. It is important that in the meantime, businesses start quoting their own IBAN, together with the corresponding BIC on their invoices and other paymentrelated correspondence. If one makes use of online banking to make individual payments, the above changes will be required. On the

other hand, if companies send bundled payments data to the bank, they must ensure that they will be using versions of their financial management software (accounts ledger, payroll computation, etc.) that are compatible with SEPA and use ISO 20022 XML payment data.

Banks in Malta have been working hard for this transition, together with the Central Bank of Malta as well as the Malta Bankers Association, in order to ensure that all businesses are well aware of the change and its impact. In addition to the joint campaign, they are making their utmost to differentiate themselves in terms of the level of support they offer their business customers.

BOV is working closely with its business customers, with the aim of guiding and assisting them in experiencing a smooth migration to SEPA. The conversion to SEPA is already underway, resulting in business customers who have already started generating and submitting SEPA compliant bundled payment files.

TEU

BOV clients can make use of a dedicated page on the Bank’s website www.bov.com to convert a BOV BBAN to IBAN, or validate a correct IBAN, whilst the Bank’s corporate customers are being supported directly in this respect.

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Single Euro Payments Area

Sepa: Changing the End Game

By George Carol

Formally known as the European Commission’s proposal for a regulation establishing technical requirements for Credit Transfers and Direct Debits in Euros and amending Regulation (EC) No 924/2009, the SEPA End Date regulation (260/2012) promises to deliver a clear deadline for migrating domestic payments instruments on to SEPA standards. We talk with James Bonello, Secretary General of Malta Bankers’ Association (MBA) and Herman Ciappara, Head of Payments and Banking Department at Central Bank of Malta (CBM), who give The Economic Update their take on the wave of the SEPA regulation rising before them.

BACKGROUND The Central Bank of Malta Act mandates the Bank as the regulator and overseer of payment instruments. SEPA (Single Euro Payments Area) regulation deals specifically with payment instruments, and it’s highly driven by the European Central Bank, therefore the Central Bank is a major stakeholder in driving this project forward.

Being part and parcel of the payment mechanism of course the banks are another major stakeholder in this project. The Central Bank and the Malta Bankers’ Association had to come together on this project to convey information to businesses in Malta and to make sure, as an EU member state, that this project is successful. All banks, businesses, government and other stakeholders have to conform to this regulation.

TEU: What is SEPA, what does the EU hope to achieve with it and what is happening right now?

HC: As an introduction of the SEPA European Project, I always like to mention the introduction of Euro coins and notes.

The idea behind that was harmonization of a fragmented landscape of currencies. We had different member states with different currencies and it was difficult to do business abroad due to exchange and conversion rates.

With Euro bank notes, we have a harmonized market, and the idea of a single market is more effective. SEPA comes in vis-à-vis electronic payments. Electronic payments today, even though we have the Euro as a single currency, are still fragmented. Every member states has its own infrastructure, which does not necessarily speak very nicely to the system next door and this is a problem for businesses. If a Maltese business needs to pay his German supplier, it could take several days to affect payment, is expensive and is burdensome. SEPA is the European Union’s next project to reinforce the single market by removing all the fragmented systems and installing one system – one format, one standard for all euro payments; not just within the EU countries, but also including another five other countries. So SEPA is really thirty-three countries and is bigger than EU. The idea is that any account holder can pay another within this area as easily as a Maltese person will pay another Maltese person; same conditions, time-frame, cost, 18 |

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format, and efficiency. The idea is to facilitate business and make it really feel like a single market, eliminating the differences between domestic payments and cross border payments. This is the general concept behind SEPA. Therefore, I can basically bank with a German bank now as easily as with a Maltese Bank. There is single market competition - just as I can shop around online and see how much a car in Germany or Italy will cost me, I can shop around and see what a bank transfer will cost me. This should create more competition, harmonize the market, and help the consumer get a better service.

SEPA is the European Union’s next project to reinforce the single market by removing all the fragmented systems and installing one system – one format, one standard for all euro payments

TEU: Are there any benefits from SEPA for Maltese businesses?

HC: As I mentioned, the distinction between domestic and cross border payments will stop. It’s really the same payment, so if I’m paying from Valetta to Attard, it’s exactly as if I am paying from Valetta to Paris, and I will expect the same efficiency – if I pay you, you can receive it tomorrow. If you are paying cross border within SEPA, by law, your beneficiary – supplier or employee – will receive it, at worst, by tomorrow, or even today, because it is very efficient. It’s the same system, integrated, and that is a big benefit for businesses. Today it is far from that situation; if you send a payment to Italy your beneficiary may receive it several days later.

We are working towards real time and this is already a big step forward considering it is across thirty-three countries - the twentyeight member state EU countries plus a selected few others – Norway, Liechtenstein, Switzerland, Monaco and Iceland. Even these non¬-EU countries have realised the great potential and benefits that they can get from accessing and being accessible to all the account holders in this payment landscape.

It’s a huge market.

Another benefit is this idea of operating a single account. Up to now, remembering that our trading partners are mostly European, most businesses working with Germany, or France, or Italy have preferred to have a bank account in the country, managing different accounts to pay different suppliers in different countries. But this would obviously

mean fragmented payment processes and fragmented liquidity – you have to make sure that you have enough cash in the account before you pay your supplier. With SEPA, all this can go away – you can operate one account, say a Maltese account, and since all accounts in Europe and beyond are reachable, it is easy and transfer is guaranteed. You could also consolidate your liquidity in one account, and easily pay your German, French or Icelandic supplier through your Maltese bank account with the same efficiency.

If you do that you can eliminate all the management hassle of managing four or five accounts in different countries with different charges and issues such as relationships with different banks and languages, especially if you think of multinationals. Time saving, cost saving, better liquidity management, and you know exactly where your funds are. When addressing people, we always tell them, ‘there are benefits– don’t just implement SEPA, but look at the benefits and try to implement them as well, to make it worthwhile.’

Another big benefit is the issue of direct debits. In Malta, up till now, we do not have a national direct debit scheme. What users of this payment instrument do is open a bank account with bank A, so they will be able to collect monies from the customers of bank A, and then open another account with bank B and get the customers of bank B, and so on for other banks. Again, fragmentation of accounts, different file formats – there was no national scheme to use one bank and collect all the payments from all the other different banks. With SEPA, you can do this – not just for Malta, but for all the different banks in Europe. Therefore the utility service provider who has an expat from Germany living here – he can pay his utility bills directly from his account in Germany. It is the same with rent, mobile and cable TV companies etc. A French person can just give his French IBAN and the service provider will be able to collect payment from the French bank account as easily as if he were collecting it from a local bank account.

TEU: How are businesses and consumers impacted, and what do Maltese businesses need to do?

HC: Like any conversion process, if we look at the introduction of the Euro for example, it was not trouble-free of course. Things have to change. This is also relevant for SEPA. What we are saying is that the impact

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Single Euro Payments Area

depends on how complicated the payment process is. If I use internet banking to process individual payments, then what will change is that I will need to know the IBAN numbers of my suppliers. Up to now, we have been using BBAN (basic bank account number).

This is normally a twelve digit long number and used to work well. When we talk about SEPA now, we need an account number that identifies your account in all these thirtythree countries, therefore we need more information to be carried in this account number, and so SEPA introduces the IBAN (International Bank Account Number). It’s an ISO standard, and the Maltese IBAN is thirty-one characters long. We don’t expect people to memorize it, and it is long because it has to carry information. So if I’m doing individual transactions, I need to know the IBAN of my suppliers. Up to 2016, I would also need to know his BIC, which is the bank swift code. What happened was that some banks in Europe opted not to use the same swift code in their IBAN, so there is a difficulty at European level at this point in time; not all BICs can be derived from the IBAN. Until this problem settles down, we have opted to use the IBAN and the BIC until 2016. A businessman who’s doing individual transactions needs to know the IBANs of all the beneficiaries he is paying; if he is paying his employees individually he needs to collect the IBAN of his employees, or suppliers if he is paying his suppliers. That is why we are asking people to show their IBAN and BIC on their financial statements or invoices.

The big impact comes for those more advanced corporates who use file transfers for effecting payment transactions, who have a lot of employees and issue their payroll and pay employees through file transfer.

They run the payroll, send the payment fiel to the bank and the bank automatically credits these beneficiaries on payday. This file transfer format has to change. We have a local file transfer format, but now, because we have SEPA, the file transfer has to be a Pan¬European standard. SEPA uses an ISO standard, ISO 20022. It uses a special XML language and therefore software, whether it is payroll or afinancial package, which is bundling payment transfers which I send to the bank once week or once a month, needs to change.

TEU: What steps should businesses take to ensure they have the capacity to initiate and receive bundled payments in ISO 20022 XML format by 1st February 2014?

HC: The format needs to change, and this is where the big job is. We have spoken to the main IT software houses in Malta and most of them have told us that their software 20 |

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is already SEPA compliant, or is becoming SEPA compliant as we speak. In fact, most of them gave us September or October as the go live date for their software, and now these software suppliers are rolling out SEPA compliant software. What we are hoping is that all corporates who use this process of file transfer will a) convert their BBANs to IBANs b) test the new file format with their bank and plan to go live with SEPA compliant file format as soon as possible, but definitely before 1st February 2014. This is very important, because if they don’t go through this process and come to run their February payroll, their bank will not accept the legacy file format, and employees or suppliers would not get paid, which of course is a huge issue.

The Central Bank, which is the bank for the government, has been working very closely with public administration because they are big payment originators. Government payroll is all credit transfers, so they had to go through the normal process of upgrading their payroll and ensuring their file format is SEPA compliant, and I can say that the governemtn payroll went live on SEPA for the October payroll. We are also going live with the Deprtment of Social Security , a huge payment originator – I would say over a million transactions per year.

When addressing people, we always tell them, ‘this is huge – don’t just implement SEPA, but look at the benefits and try to implement them as well, to make it worthwhile.’

TEU: What does the Central Bank of Malta do to contribute to a smooth transition and what has already been accomplished?

HC: We have been working on this project as Central Bank and MBA for several years now, because the banks had to prepare their systems much before everyone else. As MBA and Central Bank we have launched our awareness campaign and we have been doing information sessions since October last year. We try to speak to everyone- we have spoken with the ministries, to public entities from the government side, several times with the Chamber of Commerce, Institute of Management, Institute of Accountants, GRTU, MHRA, Institute of Engineers, Chamber of Advocates, Insurances and other constituted bodies. All we have been doing in the last few months is having more than one presentation a week, and speak individually to each sector of society, especially the businesses, to tell them specifically how this will impact their business and what they should be doing.

Banks are talking directly to customers. In this last month we are stepping it up and we have started the PR campaign and it’s all

about awareness, awareness, and awareness.

Hopefully they will get the message across and people will react and do what must be done to get through this migration.

There are a lot of adjustments and a lot of work to be done. The Commission and the ECB are monitoring the progress of SEPA. Just for information, at the end of September, the average migration of credit transfers to SEPA at EU level was around 56%, while that of direct debits was close to 7%. In Malta our migration for crdit transfers for October is still at 25%. We believe the reason for this low migration rate is because a) the big government processes have not all migrated yet, so with payroll well in hand, with DSS migrating in November, and dividends following soon as planned ,once we have that migration the volumes will go up, and; b) the software for businesses to migrate was not available yet. So that’s what the impact is, and that is where we are.

About SEPA end date, it is there – 1st February 2014. Everyone should have migrated by this date; it is mandatory, it’s the law. The message of the Commission and the ECB is that there is no plan B. Unless you migrate, unless you are capable of using this new XML language, unless you give your bank the right file format, you will not be able to process your payment transactions. So that’s our message: speak to your bank and IT software supplier as soon as possible. The issue that we foresee now is that there could be a huge bottleneck. If everyone is talking to their bank and ringing their supplier now, the closer we get to December the bigger the bottleneck is going to be. The message is: do it as soon as possible, get it out of the way and don’t leave it till the last week of January, because the chances are, as with any software upgrade, you will not get it perfect the first time round.

As Central Bank and MBA and all the other banks, of course we are working closely in this situation, getting statistics every month and even more so as we get closer to understand how the migration is going, to understand where the issues are and talking to everyone to really monitor the situation; if there are issues we need to react, and make sure that if there is an issue we deal with it.

We cannot afford to go wrong in this. We are an EU member state, and we have our reputation at stake and obligations to the Commission. This is what we have been doing and will continue doing in the next two or three months – to get our message across as soon as possible and hope businesses react to it as fast as they can, go through the migration process, go live and reap as many of the benefits as they can from SEPA. TEU

inCOMe & GROWTh INVESTMENT SOLUTIONS

a combination of income and growth Orchestral horns are traditionally grouped in pairs - “high” horn and “low” horn. Expert horn players have specialist knowledge to balance the unusually wide range required of the instrument.

Likewise, the Vilhena Malta Fund is designed to maximize the total level of return through a composition of both Maltese bonds and equities, and is advised by Bank of Valletta plc.

Vilhena MalTa Fund 80072344 I vfm.com.mt

BOV Branches/Investment Centres & Licensed Financial Intermediaries The income that the assets of the Fund generate and the frequency of payment may vary and are not guaranteed. Past performance is not a guarantee to future performance.

The value of the investment can go down as well as up and any initial charges may lower the amount invested and the amount received upon redemptions. Investments should be based on the full details of the Prospectus and the KIID which may be obtained from Valletta Fund Management Limited (“VFM”), Bank of Valletta plc Branches/Investment Centres and other Licensed Financial Intermediaries. VFM is licensed to provide Investment Services in Malta by the MFSA. The Vilhena Funds SICAV plc is licensed by the MFSA and qualifies as a UCITS. Issued by VFM, TG Complex, Suite 2, Level 3, Brewery Street, Mrieħel BKR 3000, Malta. Tel: 21227311, Fax: 22755661, Email: infovfm@bov.com, Website: www.vfm.com.mt. Source: VFM

Scientific research and development

AAT Research Signs

Exclusive Agreement to the Gulf Region

By Ivan Grima

AAT Research CEO Dr Adrian Attard Trevisan during his visit in Qatar

AAT Research, a Malta-based health research and innovation company, will be expanding its operations into six Gulf Co-operation Council countries.

This new venture will include Bahrain, Oman, Qatar, Kuwait, Jordan and United Arab Emirates. During CEO Dr Adrian Attard Trevisan’s visit in Qatar last week, an exclusive and extendable three-year distribution agreement was signed with Pureline Medic, a leading Medical Sales Agency in the above mentioned territory. The Qatari agent will distribute AAT’s patented technology, the MENTe Headband, which is the first home-based commercially-available aid for managing Autism Spectrum Disorder.

The MENTe Headband Autism Aid is FDA-approved and CE-certified.

In 2012, the company was awarded the Malta Innovation Award for Technology for its work on the MENTe device. The

device is currently being used by autismdiagnosed patients in Malta, South Korea and China. Furthermore the newly updated and improved version of MENTe device will be produced at the new AAT Research’s ISO-Certified manufacturing plant in Marsa. This device includes quantitative and qualitative improvements to the technological features while still maintain the users’ comfort and portability as a top priority.

The software the headband operates on is currently being available-for-download as an application for smart phones and tablets on Google Play. The feedback gathered from the app-users was exceptional and very positive as the new system provided them with the opportunity to take the therapy sessions virtually anywhere.

Both the smartphone and tablet app were downloaded substantially and together with the MENTe Headband, a

new revolutionary system in aid of ASDdiagnosed patients was created.

Furthermore the AAT Research team is also proud to announce that the app is also short-listed as a finalist for the Best App Award given away by the MCA eBusiness Awards 2013. The MCA eBusiness Awards are held to aid the promotion of innovative initiatives in the domain of eBusiness and spread awareness about the potential of emerging technologies to drive economic growth and social development. There are six award categories with the ‘Best App Award’ recognizing the entity that has successfully introduced a mobile/ tablet application.

TEU

For more information, please visit www.aatresearch.org or contact Ivan Grima on 21330588 or ivan@aatresearch.org.

November 2013 | THE ECONOMIC UPDATE

| 23

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Special Feature: Bay Street Tourist Complex November 2013

BAYSTREET

Tourist Complex Pull - Out and Keep Supplement

Special Feature: Bay Street Tourist Complex

Milestones and achievements of

Foreword

Bay Street Tourist Complex Bay Street Complex - St. Julian’s

•

opening another retail sector within the complex level 2

•

opening a language school on level 4 ace English Malta

•

Launch of a new family entertainment center, Delta 4

•

Growth in annual footfall year on year

As the management team of Baystreet Complex, it gives us immense pleasure to welcome you all to this special 24-page pullout-and-keep supplement of The Economic Update featuring Baystreet.

Through its successful business concept, Baystreet has been able to reach out to a wide spectrum of local and foreign customers, and in so doing, played a role in the development of Malta’s economy being one of the foremost commercial centres on the Island. This special feature pays tribute to all partners and operators at Baystreet and explores the key drivers behind the complex’s strong brand equity and market positioning, as a premium commercial and leisure destination. Over the years, Baystreet has retained its leading position as the most convenient destination for retail, dining, hospitality and leisure, being accessible seven days a week from 10.00 till 22.00 We would like to express our appreciation towards all stakeholders involved with Baystreet, for their continuous support and collaboration. Over the past years, we have witnessed remarkable investment by several prestigious brands and operators which have surely contributed towards establishing Baystreet as a premium destination within multiple market segments.

We have always fostered a culture based on the creation of synergy and we are confident that this approach will be fundamental in the accomplishment of further growth. We look forward to your continued patronage and support so that we shall experience more success in the years to come.

David Debono Chief Executive Officer Bay Street Tourist Complex

Shopping Love your fashion? Well bay street is the place for you. With stores, Armani Jeans, Guess, Mexx, Terranova, Jennyfer, Mangano, ECCO, Tommy Hilfiger, Nadine, Gas, Bortex, Primo Empoiro, Swarovski, stivaletti, Ovale, your spoilt for choice. Our fashion extends beyond clothing to accessories, jewellery and sportswear.

Dining Quick snack, coffee with friends, or looking for a great night out? Bay Street provides a superb choice of cafes, bars and restaurants. We have tastes and prices to suit everyone including McDonalds, Hard Rock Café, Barcelona Café, Al Pomodoro -Pizzarotti, Fluid Diner , San Crispino, Café Pascucci, Mangano Café and Little by Little Chinese Restaurant. Whatever the occasion, you’ll find a mouth-watering choice at Bay Street. Remember all our outlets are open from 10am until late seven days a week.

Leisure & Services We offer a great range of services and family entertainment to ensure that all of our visitors can relax and be entertained. If you want to extend your visit, why not book into the bay street hotel? Children will love our new family entertainment center Delta 4 with sate of the art arcade games, soft play area, kiddies rides.

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Special Feature: Bay Street Tourist Complex

Winter Moods Inducted into Hard Rock Cafe Baystreet Hard Rock Café has selected top local band Winter Moods to join hundreds of international artists to be featured in their café. Winter Moods memorabilia will be exhibited at Hard Rock Café and the band’s videos will be featured on the Café’s inhouse music channel.

Winter Moods donated the white Yamaha guitar featured in their Marigold video to Hard Rock Café Malta, as well as the shirt featuring the Maltese cross that was worn by Ivan Grech during the band’s memorable concert at The Granaries, Floriana. Speaking at a press conference, Adolf Vella, Sales and Marketing Manager, Hard Rock Café Malta said, “We are honoured to have Winter Moods as the very first Maltese band to join Hard Rock Café memorabilia collection with the ranks of the best musicians in the world. We are proud with this collaboration and trust that fans will appreciate Winter Moods’ talent on screen. We love all music, and local talent is awesome.”

“Hard Rock Café is a hub of the best music from around the world. It is an honor to join the ranks of some of our idols and be included in this network,’ said Ivan Grech. ‘We are giving Hard Rock Café two items which are synonymous with Winter Moods; Melvin’s white Yamaha guitar that was used in the Marigold video and in various concerts in the past six years, and the black shirt with the Maltese cross that I wore at the concert in Floriana in 2010, a night we will never forget – it was the best night of our lives.”

Hon. Jose Herrera, Parliamentary Secretary for Culture and Local Government attended the event and said, “Winter Moods’ achievements over the past three 04 |

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Wintermoods decades have been remarkable. They have seen the music industry evolve and they grew, advanced and evolved with the times, being leaders in their field. Their music has touched our hearts and accompanied us through our lives and it is a delight to see them receive this international recognition for their hard work.”

Winter Moods signed the memorabilia that they donated, which will now be featured in Hard Rock Café at St Julian’s and the Hard Rock Bar at the Valletta Waterfront. The band also donated a poster of their album ‘Butterfly House’ which carries the signature of their late guitarist Steve Caruana Smith, who passed away in October last year.

After the press conference Winter Moods gave an intimate performance of some of their most popular hits, including Marigold, My Neverland and Hang On to Your Smile.

Hard Rock Café Malta will be supporting Winter Moods’ recent collaboration with local charity Puttinu Cares. The CD which includes ‘Miss You’ featuring Joseph Calleja and a re-recording of the Maltese classic ‘Xemx’ will be available as of today from Hard Rock Café Rock Shops at the Valletta Waterfront and Bay Street Tourist Complex for a donation of €5.

Hard Rock`s Malta Rocks is supported

by Cisk.

Winter Moods were supported by Renault, Hamilton Travel, DAB and Olimpus Music.

About Hard Rock International With a total of 179 venues in 57 countries, including 141 cafes, 18 hotels and 8 casinos, Hard Rock International (HRI) is one of the most globally recognized companies.

Beginning with an Eric Clapton guitar, Hard Rock owns the world’s greatest collection of music memorabilia, which is displayed at its locations around the globe.

Hard Rock is also known for its collectible fashion and music-related merchandise, Hard Rock Live performance venues and an award-winning website. HRI owns the global trademark for all Hard Rock brands. The company owns, operates and franchises Cafes in iconic cities including London, New York, San Francisco, Sydney and Dubai. HRI also owns, licenses and/ or manages hotel/casino properties worldwide. Destinations include the companies’ two most successful Hotel and Casino properties in Tampa and Hollywood, Fl., both owned and operated

by HRI parent company The Seminole Tribe of Florida., as well as other exciting locations including Bali, Biloxi, Chicago, Cancun, Las Vegas, San Diego and Singapore. Upcoming new Hard Rock Cafe locations include San Jose, Ibiza, Chennai, Istanbul and Tenerife. New Hard Rock Hotel projects include Daytona Beach, Palm Springs, Aruba, Riviera Maya, Abu Dhabi and Shenzhen and Haikou in China. New Hard Rock Casino projects in development include Hungary and Northfield, OH. TEU

For more information on Hard Rock International, visit www.hardrock.com.

MANGANO SHOP AND CAFE - LEVEL 1 BAYSTREET - MALTA

Special Feature: Bay Street Tourist Complex

Bay Street presents the only real ice-skating rink in Malta Bay Street Complex in St George’s Bay, presents the only authentic ice-skating rink in Malta, between Saturday 16 November, 2013 and Sunday 2 March, 2014.

The island’s most established and popular shopping, dining and entertainment complex is welcoming locals and visitors alike to enjoy ice-skating every day from 10 a.m. to 10 p.m. between Saturday, 16 November, 2013, and Sunday, 5 January 2014, and then every weekend from Friday to Sunday from January 10th to March 2nd.

The circular ice-rink is located on Level 0 in the main arena.ay Street is offering skating sessions for only €5 including the hire of ice-skating shoes, as well as a special family ticket offer. Schools and community organisations can arrange a private hire booking.

To ensure that customers of all ages and abilities can skate and have fun Bay Street will have a range of aids, from toddler ice shoes to help little ones get their balance on the skating surface, and Penguin walkers as a learning aid, For customers

Good food…

Good feelings

with reduced mobility, a special support frame will be availaible, as well as dedicated sessions for wheelchair users.

Throughout the three and a half months there will be many exciting programmes. A Parent and Toddler Penguin Club offers help in learning iceskating to all ages, a Rock the Rink Ice Disco will be held on weekend evenings, as well as organised events to enable one and all to enjoy the true atmosphere of ice-skating.

“We are looking forward to hosting the only real ice-skating rink in our county,” a spokesman for Bay Street said. “We expect this to be an amazing opportunity for new experiences and we are confident that this Christmas attraction will encourage lots of guests to shop and enjoy Bay Street during the festive season.”

One hour’s free parking is also being offered to all customers.

TEU

For more information telephone 2138 0600 or go to the Bay Street Facebook page www.facebook.com/baystreetmalta.

Spacious, tasteful and relaxed; unless you get caught up in the pre-club rush, Fluid’s the best place in Baystreet for sub-street level food. A strong seasonal menu and meat specialities is all a ravenous shopping punter could hope for, with well-executed brasserie grub the order of the day, and a nice selection of booze, to boot.

Don’t come here assuming you’ll still have change for the bus ride home; it’s good value for money.

Level 2, Bay Street Complex, St. Julian’s | T: 23722020 | E: fluid@onvol.net

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Reputation

Special Feature: Bay Street Tourist Complex

Outstanding

By Martin Vella

Baystreet complex has established itself as one of the leading destinations on the Island. The complex location, design architecture, brand mix and its ability to adapt to consumer needs, were surely key factors which have contributed towards the success story of this organisation. The Economic Update sits down with CEO David Debono, to learn why the complex has always managed to be at the forefront when it comes to innovation, thus enabling it to remain aligned to a constant changing environment. David states that one of the main factors which will stimulate further growth in the future is the outstanding reputation which the complex enjoys.

TEU: Despite the size and scale of Bay Street Tourist Complex, you focus on maintaining an entrepreneurial culture.

How are you able to drive innovation throughout a large organisation?

DD: We believe that maintaining an entrepreneurial culture across the various activities of the complex is a vital element in the success of the organisation. The complex has a very well balanced and agile board of directors, a highly dedicated and qualified management team and supportive towards creative thinking which in many cases has transformed into business innovation.

Baystreet hosts some of the most trendy and exciting retail concepts not just locally but also within the international dimension. We strongly believe that our size should never hinder our agility and we do exploit business diversity to stimulate synergy between each business model.

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TEU:What is the top challenge facing Bay Street Tourist Complex today?

DD: We operate in a very dynamic business environment. One of our key challenges is to respond effectively to market changes in order to ensure that our product portfolio remains in congruence with market trends. I must admit that at times, reacting in a timely manner is not sufficient, and we therefore need to further sharpen our skills in trying to anticipate market trends and position ourselves accordingly.

and partners, gives access to a wealth of knowledge stemming from their diverse activities. This is utilised in the formulation of a strategy aimed at articulating the various activities into a unique offer.

One of our key challenges is to respond effectively to market changes in order to ensure that our product portfolio remains in congruence with market trends

TEU: Why is diversity important and how do you build relationships with your tenants, co-owners and brand outlets?

TEU: Bay Street Tourist Complex is known for its community and leisure engagement. When it comes to corporate citizenship initiatives, what is Bay Street’s main focus?

DD: I believe that managing diversity is an extremely challenging aspect in management.

Throughout my experience at Baystreet, I have realised that direct communication, both formal and informal with operators

DD: Baystreet has been one of the pioneers in engaging the community with the various activities, serving as a platform to support local talent, fund raising, charity organizations, culture and

Special Feature: Bay Street Tourist Complex

societies. The complex itself achieved an award as recognition for the adoption of good urban design principles and which contributes to the enhancement of a public open space in line with a Maltese Piazza.

Many of the events being organised and sponsored by the complex are aimed at supporting entities within the local society to strengthen the standard of life of the community around them.

TEU: What makes Bay Street Tourist Complex successful?

DD: During the initial years, Baystreet complex distinguished itself through its physical construction, layout and design features. This architectural concept has remained vibrant over the years and still creates a unique feeling of open space where visitors can converge and roam freely around the various outlets of the complex. Over the years, Baystreet has nurtured a distinctive structure of relationships with its customers, employees and suppliers which has enabled the complex to ensure stability and adaptation, when necessary. The constant drive for innovation and the optimization of our retail mix throughout the various activities, gives Baystreet its competitive advantage. The months of November and December will be characterized by two innovative projects – the launch of the real Ice Rink this month and the launch of a premium Family Entertainment centre in December. Baystreet location is surely another important component in the formula for success. Its geographical position and opening times, makes it easily accessible by the domestic market and the thousands of tourists within the surrounding area.

TEU: What is unique about Bay Street Tourist Complex?

DD: Within the same complex, Baystreet manages to offer its customers, an outstanding selection of retail brands, some of the best renowned food and beverage outlets, hotel accommodation in one of the most sought after locations, a state of the art English Language school and on the 4th December, a premium family entertainment complex spreading over an area of over 1,100 square meters. Supporting these facilities one will also find advantageous parking schemes for customers in our indoor and outdoor car park and extended retailing hours, Monday to Sunday from 10.00-22.00 all year round. Our aim is to continue improving these facilities to further strengthen the truly unique holistic experience to our customers.

TEU: How can management take a proactive approach towards ensuring the operational success of the Company’s key assets?

DD: We give a lot of importance to the management of both the tangible and the intangible assets of the organisation. When it comes to the physical assets, we have implemented processes which manage the entire life cycle of the assets in order to ensure that these are being optimized at all times. The organization aims at developing strategic value from its assets rather than just the immediate short term returns.

Baystreet has nurtured a distinctive structure of relationships with its customers, employees and suppliers which has enabled the complex to ensure stability and adaptation

TEU: How do you ensure optimal performance and full compliance with health and safety, labour and environmental regulations?

DD: We see the regulatory systems as support frameworks to our operating systems. We recognise that such policies are in place to safeguard the interest of our customers, employees and the community and we therefore ensure constant adherence to these regulations. We have internal committees led by management and supported by local specialists, which meet on a regular basis to examine our internal procedures and take the necessary action when performance gaps are identified. In the coming months, the complex will also be embarking on a project to achieve full eco-certification.

TEU: What are the challenges of making investment decisions and performing a financial model in commercial centres?

DD: As in most other investment appraisals, uncertainty is always an issue. We do adopt a very structured approach both in direct investment initiatives and when supporting our operators and partners in the decision making process, to thoroughly assess each opportunity on the basis of suitability, feasibility and appropriabilty. However, I must also say that an element of intuition is usually present in the process.

TEU: What is your unique selling proposition and leasing advantages?

DD: Baystreet is a destination of excellence for brands aiming at establishing themselves within the domestic market and at the same

time have access to foreign market segments.

We consider each ‘lease agreement’ as a business partnership and the commencement of an agreement at Baystreet signifies the start of a business relationship which will be built on communication and trust.

TEU: Does Malta offer present opportunities in the tourist shopping centre sector?

DD: Perhaps in general, we are rather limited in terms of size but we certainly offer tourists a formidable line up of quality brands backed up by very diligent operators. The fact that the tourism industry is experiencing growth, prime destinations such as St. Julian’s surely benefit from an increase in footfall.

TEU: Do you think this market will be consolidated and what developments do you have going forward?

DD: I believe that although there could still be room for growth, new entrants will find it very difficult to generate the necessary critical mass. At Baystreet, we are very determined to continue developing on the existing platform to expand our operations, introduce more innovative concepts and strengthen our customer centric culture.

TEU

All rights reserved | Copyrighted

Editor’s Note David Debono commenced his career within the hospitality and leisure industry in the early 1990’s.

Throughout the first years he occupied senior management positions within the Rooms Division, F&B and Sales and Marketing departments and held the post of Group General Manager for a company which operated two hotels and a wellness center. During this time he also achieved Malta’s first ‘Tourism Authority Quality Certification. David joined a leading five star property as Operations Director and later appointed Director of Business Development responsible for the formulation and implementation of the growth strategy for the hotel’s hospitality and retail units. He then joined Baystreet holdings Ltd. as Chief Executive Officer, focusing primarily on the company’s business development strategy, corporate development and consolidating the complex’s operating systems. He obtained post graduate qualifications covering Operations, Strategic Management, Human Resources, Finance and Marketing from Henley Management College in 2008. David also obtained his master degree in Business Administration from Henley business school (University of Reading), specialising in corporate and business strategy. He is currently conducting further post graduate research at doctoral level on leadership and competitive strategy.

November 2013 | THE ECONOMIC UPDATE

| 09

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lly)

PRESTIGIOUS OIL AND GAS ENGINEERING COURSES IN MALTA JANUARY 2014 Global College Malta (GCM) has announced that it is partnering with Robert Gordon University (RGU) to provide three of its oil and gas engineering courses, commencing January 2014. The partnership agreement will ensure that industry specialists from RGU’s teaching community will come to GCM to deliver the following three courses: • MSc Oil and Gas Engineering • MSc Petroleum Production • MSc Drilling and Well Engineering

Robert Gordon University

The programmes combine on campus tuition and online tutorials. This means, the courses emulate those offered at RGU’s main campus whereby after successful completion of the course, students will graduate with a degree certificate awarded by Robert Gordon University.

To find out more about Global College Malta and its degree courses, please visit www.gcmalta.com.

Are you interested?

If you are interested in applying for one of the MSc Oil & Gas Engineering courses or just enquiring for more information, contact Global College Malta directly and one of our Admissions Representatives will provide you with all the details on the courses and application process.

The Admissions Office can be reached via admissions@gcmalta.com and +356 21801252.

Global College Malta Tel.: +356 21801252 enquiries@gcmalta.com, www.gcmalta.com SmartCity Malta, SCM01, Ricasoli

Robert Gordon University (RGU) is based in Aberdeen, the Energy Capital of Europe, and offers a diverse and exciting range of degree courses to students from over 120 different countries world-wide.

RGU is recognized as a leading provider of professional education and training to the oil and gas sector with courses developed in close collaboration with industry and taught by leading experts in the field.

The close working relationship that RGU maintains with industry has led to the Universities outstanding employment rate for postgraduate students of 96% and the accolade of Best UK University for Employment.

Good quality education makes a difference...

RENDEZVOUSHOES NOW OPEN Level 2, Baystreet St. George’s Bay, St.Julian’s

w: rvs.eu.com | e: info@rsv.eu.com | t: +356 2733 7755 | f: Rendezvoushoes

Special Feature: Bay Street Tourist Complex

Bay Street Complex offers a great mix of high street brands, quality independent shops, restaurants, services, family entertainment and even a four star hotel. The complex is open 10am until 10pm seven days a week, so there really is no other shopping and leisure destination that can keep you entertained every day!

Located in the heart of Malta’s premier tourist destination, St. George’s Bay, offering unique blend of indoor & outdoor shopping, dining and leisure is complemented with a regular events and entertainment programme creating a lively atmosphere for families and shoppers all year round.

Mission Statement “At Bay Street we are committed to creating an exceptional customer experience, providing a one stop destination for quality dining, shopping, hospitality, leisure, business and services. The reason for our competitive advantage is the energy, enthusiasm and ideas that we generate towards our goals. Our strength is derived from our passion to listen, innovate and deliver excellent customer care and property management to our business partners and guest, so that we generate a value driven experience for all our stakeholders.”

The Bay Street Promise To create an ever growing environment that is conducive to an enlightened experience that adds value to all our stakeholders.

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•

To maintain an ever changing standard of service and quality that meets with and indeed, exceeds customer perception.

•

To provide an exciting place that is constantly alive with people.

•

To maintain a high standard of retail shopping inMalta.

•

To provide customers with a safe and clean environment for them to shop, dine, relax and amuse themselves in.

•

To ensure the financial success of all our partners that make up the Bay Street Tourist Complex.

•

To provide all Bay Street employees with a proud job and to ensure that the Bay Street is a continuous learning organisation.

•

To commit Bay Street into a philosophy of constant and never ending improvement.

EDUCATION

RGU extending its international reach by partnering with Global College Malta

Robert Gordon University (RGU) has announced that it is working in partnership Global College Malta (GCM) to deliver three of its oil and gas engineering courses.

To be launched in January 2014, the partnership agreement will see industry experts from RGU’s teaching staff travel to GCM to deliver an MSc Oil and Gas Engineering, an MSc Petroleum Production and an MSc Drilling and Well Engineering.

GCM, which opened in September 2013, is the first higher education establishment in SmartCity Malta and currently offers four British-style business and management related courses.

Targeting students from Africa and the Middle East, the RGU courses will mirror the content delivered at RGU’s home campus in Aberdeen, and are

tailored to reflect the latest industry demand, equipping the students with the relevant skills and knowledge required for successful graduate employment.

Ferdinand von Prondzyski, the Principal of RGU, said: “This partnership is an exciting opportunity for RGU and we are delighted to be working with GCM to deliver three of our engineering courses on an initial basis, with the potential to eventually provide a full portfolio of courses from across our various faculties.

“Malta has a long standing relationship with some of the countries which RGU is targeting so the partnership is a fantastic opportunity for us to engage with students from further afield and demonstrates that the university is now being recognised at an international level.”

Brian Smart, the Rector of GCM, said: “GCM is delighted to be working with RGU

to bring world-class oil and gas postgraduate education to the strategic location of Malta.

“These courses are of great significance to the region and Malta, particularly as Malta begins a new round of exploration in its territorial waters and should be a key factor in helping to meet the Government’s objective of growing the provision of higher education to foreign students on the island.

“GCM looks forward to bringing more RGU courses to Malta in the future, all subject to accreditation by the Malta Qualifications Recognition Information Centre.”

The teaching programme will combine a mixture of on campus lectures delivered at GCM by RGU staff and distance learning. On completion of the courses, GCM students will graduate with a RGU degree certificate at a ceremony held on GCM’s campus.

TEU

November 2013 | THE ECONOMIC UPDATE

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Case Study

The importance of building a strong brand

By Martin Vella

In the modern business world an organisation’s brand image can be as important as the goods or services it actually offers. A strong brand image is a powerful asset. We present a case study regarding AX Construction’s recent corporate rebranding exercise, which aims to continue building upon AX Construction’s reputation as a recognised and trusted brand, focusing on quality and service excellence.

Backdrop AX Construction, established in 1976, is a market leader in the building and construction sector. An integral component of the AX Holdings. the company has grown steadily throughout the years, and today, employs 70 workers ranging from professionals to manual workers committed towards promoting best practices in the sectors in which it operates, which include construction, project management, restoration, turnkey and civil engineering. AX Construction has also acquired an enviable reputation of excelling on both small private assignments and large-scale national projects, the latter including the Delimara Power Station, Valletta Waterfront and the New Parliament Superstructure

AX Construction has overhauled its brand identity and corporate image. This has included the adoption of a new logo outlining a set of corporate values upon which it seeks to consolidate its market position and build itself as Malta’s leading construction company. Whilst retaining its core values, the new identity portrays a new philosophy focused on service and competence.

SWOT analysis, which involves the study of the internal strengths and weaknesses of the business and an appraisal of its external opportunities and threats.

CHANGE MANAGEMENT Effective change management is crucial to the success of a genuine rebranding exercise. Customised training programmes were devised and implemented in order to educate the workforce on the cultural underpinnings of the new corporate identity. This approach created a high level of receptiveness amongst employees.

The new corporate identity seeks to communicate the four key company attributes that underpin AX Construction, namely experience, professionalism, high standards of quality and efficiency. Together with the new logo, the Company’s brand identity has been totally revamped with new vibrant colours, uniforms for all employees and an upgrade of its fleet of trucks, vehicles and equipment. The brand identity also features a new slogan namely ‘Building Our Future, Restoring Our Heritage.’

By identifying the business’ strengths, AX Construction has built on its core competencies in order to remain competitive.

These strengths include its:

CULTURE

• strong brand and reputation

AX Construction’s culture has grown and developed over the years from the initial direction given by its founder and CEO, Angelo Xuereb. Today it provides the ideal corporate environment for its customer focused strategy.

• market leading training and development

One of AX Construction’s main objectives is to secure its profitability by maintaining its market leading position. Key to this objective is the constant analysis of the factors affecting the organisation’s ever-changing internal and external environments and using data collected to plan on-going improvements to efficiencies and processes. One of the key methods used by AX Construction to audit its internal and external environment is the

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are personally presented by the CEO. AX Construction’s commitment to its employees is also recognised through it’s Long Service Awards scheme.

opportunities • flat organisational structure

In creating a new brand identity, the initial step was that of identifying the relevant values of the company and to encapsulate them in the slogan and logo. Management drew upon the views of customers, suppliers and employees whilst keeping in tune with industry expectations.

This gave the rebranding exercise a sense of continuity through the fusion of the still relevant core values with the new brand promises.

• Customer-centric business philosophy

While the new colours and logo are clearly the stand-out feature of the rebranding exercise from a visual perspective, it is crucial that they are complemented by the “behaviour” of the organisation to ensure that the initiative has depth and is not considered superficial

HUMAN RESOURCES

PROJECT LEADERSHIP

Many AX Construction employees have been with the company for many years and are rewarded for their long service with additional holiday entitlement and gifts that

The re-branding exercise at AX Construction was spearheaded by the company’s executive management with the help of a prominent agency.

• dedicated workforce and high number of long-serving professionals

• High standards of quality

Case Study

AX Holdings Chairman, Angelo Xuereb receiving a memento from Denise Xuereb during the corporate branding event.

The marketing department took a lead role, creating a small but broadly based project team with representatives from sales, marketing, staff, and the external agency.

MARK DISTINCTIVENESS An outstanding feature of the AX Construction mark is its distinctiveness. It comprises two elements, a symbol and a wordmark which combine to be one entity.

The large, grey ‘AX’ (the symbol) is designed to be recognised immediately. The colour hints at a bold business approach, consistent with a new beginning. The name (the abbreviated wordmark honouring its founder Angelo Xuereb) appears in a contrasting white colour and in its own distinctive typeface.

Brand Repositioning AX Construction’s top management assessed the available market opportunities to identify, develop, and successfully migrate to the company’s optimal market position, narrowing and shifting its positioning from that of a traditional construction company to a talent-based professional services contractor.

The marketing department at AX Construction developed internal and external communication aimed at creating understanding, support and confidence in the corporate rebranding process with staff, clients, partners, suppliers and the media. During this time it also builtmarket awareness, brand visibility and understanding across the company’s

business sectors through a series of high impact PR and communications activities, which promoted the company’s construction capability, expertise and flexibility in delivering both large, complex projects as well smaller scale assignments. The new logo and colour have been applied to everything from business cards and sale collateral to business pitch materials and the website.

Once these “deliverables” were completed, AX Construction’s management also created, produced, and unveiled its corporate motto: ‘Building Our Future, Restoring Our Heritage’. Ably managed for the past six years by Denise Xuereb, a graduate at Masters level in project management, AX construction aims to consolidate the company’s position as a standalone profitable entity within the AX Holdings group of companies. Speaking during the launch of AX Construction’s new brand identity, at the State Hall, The Palace, Sliema, Ms Xuereb said that, “This is an important milestone in the AX Construction’s history. A number of changes have taken place to ensure that our diversified organisation places the customer at the centre of all its operations. The rebranding of AX Construction will ensure that we can communicate in a more effective manner. The new AX Construction branding is intrinsically connected with the company’s 36-year history, while being a reflection of future business strategy” In his address AX Holdings Chairman, Angelo Xuereb said that “AX Construction is arguably operating in the most challenging

of markets, facing direct competition from local and foreign companies. Throughout the years our company has gained a reputation for creativity, efficiency and quality. This reputation has helped us maintain a cutting edge amongst cut-throat competition Mr Xuereb also announced that 2013 is set to be one of the most successful years for AX Construction in terms of new projects and investment opportunities.

Recent achievements of note have been the construction of the superstructure of the new parliament building in Valletta, completed ahead of programme to the satisfaction of the client. The Company’s restoration arm has also grown and has seen AX Construction involved in large restoration projects on the historic fortifications at Birgu and Valletta, the construction of a new visitor centre and restoration works at St. Pauls Catacombs in Rabat and the unfolding of the plan for the new multi- million development of Hilltop Gardens limits of Naxxar.

Today AX Construction is a widely recognised brand that has developed a strong presence in the building and construction industry.

Rebranding the organisation has made it possible to open up new opportunities whilst building on the company’s accumulated strengths. The creation of a consistent and well-recognised character for the company based on quality, performance and presentation is certain to have beneficial results for AX Construction.

TEU

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November 2013 | THE ECONOMIC UPDATE

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ICT

Making a Difference

By George Carol Developing solutions takes time and money. The first is harder to come by than the second, maintains Uwe Schoenfeld. Group Strategy and IT Development Director with Dmax, Uwe explains why Dmax chose to specialise rather than spread into all areas of web solution development. He says that, “Dmax’s key niche areas are the creation and provision of business intelligence solutions (which encompass our knowledge share and intelligent email marketing solutions – dmaxepaper.com) and solutions for social media.” Dmax’s direction and vision is to create innovative technologies that make a difference, yet they want to create solutions that remain ‘easy to operate’ for the user, in spite of the complexities of their resources.

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ICT

TEU: In light of economic challenges, is this a time of opportunity or is your outlook more reserved?

US: As a Financial and IT Analyst, I am by nature prudent. I see Malta as an opportunity, and I trust my team here have both the talent and the expertise to succeed. As Dmax, we have experienced growth over the past 5 years, and although we remain a micro operation by continental standards, we have ambitious plans not only locally but particularly abroad, in Germany, where we have a stake in a new IT company, Tedlog GmbH (www.tedlog.de). Our outlook is clearly a positive one.

TEU: For your business intelligence systems, do you see growth coming mainly from within the corporate sector or from international markets?

US: We see growth in Germany though we are always interested in local projects.

We are specialising in Reverse Logistics, which is our niche market, and this is an area where over the past years we have acquired specialised skills that make us very competitive. Our latest development has been the adoption of smartphone technology, an area where we are seeing growth and where in the coming months we will need to increase investment in HR and in product research.

TEU: You joined Dmax as a director and, subsequently, as a shareholder.

How has extensive experience in company finance as well as consultancy and development involving ERP systems (such as BaaN and SAP) served your clients?

US: My experience in managing ERP systems (such as BaaN and SAP) helps enrich Dmax’s services. We have managed to fuse together two important elements of a successful business creativity and technology. This in-house talent base has enabled us to approach substantial projects, enabling us to create solutions that we are now selling to a wider client-base. Our varied products and services, notwithstanding the competition, like dmaxepaper.com, the email marketing solution for businesses, have momentum. We export some 60% of our output – which is encouraging.

TEU: Dmax offers solutions for Social Media, how does this tie up

with your Reverse logistics and other business solutions?

US: Social Media touches all businesses.

That is why we have adopted business intelligence applications, recruited copywriters and invested in training and research in new media applications. Today we have a host of Dmax smart applets for use on Facebook, for instance, that make all the difference for companies seeking greater reach and return on investment. Our users include financial institutions, health services and professional firms. Our Malta office now has a team of experienced business copywriters, offering clients content creation and on-going subject, pertinent to research support. We see our clients’ online presence improving in terms of brand recognition, website traffic and business generation as a direct result of our solutions.

Change is continuous, and we can only win (and survive) if we keep developing ourselves as a company from A to Z.

TEU: Do you reflect on how much you have achieved with regards to Dmax in Malta?

US: Dmax is not a Fete Accompli, it is a works-in-progress. I do reflect (together with our company board, of course), and we see where we could do better next time. I believe that such reflection helps in adopting winning strategies and in allocating the right resources into the most profitable sectors. Ray de Bono, our CEO, holds a monthly meeting on company performance; he has turned this company around, making Dmax a local leader in email marketing and social media solutions. And I say this here because these niche business specialisations were born some five years back as a result of reflections of this very nature!

latest technologies, and for this we import or outsource required specialised HR skills, which in turn help in keeping our staff always in line with the latest developments.

Change is continuous, and we can only win (and survive) if we keep developing ourselves as a company from A to Z. TEU: How do you make it clear to a client that while he might be paying more, he can still be getting more value with Dmax Email marketing systems?

US: How do you make it clear to someone who is buying a Porsche with his head set on, that he can get a Japanese sports car for a quarter of the expense? How do you ask a wine connoisseur to drink a cheap table wine instead of a Premier Cru Chardonnay from Bordeaux? We did not invent the wheel here, yet our solutions are smart(er) than others around. On top of all this, we offer dedicated, committed support to all our systems users, irrespective if they are Maltese, German, African or from where ever they may be. We sell solutions that people like, as they deliver results and this is Dmax’s Raison d’Etre.

TEU: Does it take a different skill set to be a successful SMM today?

US: It takes a good combination of copywriting, IT and creativity skills to succeed. However, the key is ‘specialisation’ and ‘continuous training’.

We are focusing on the finance, medical and the professional sectors. We have the right team on board and are always looking for good talent. No one knows what the future has in store in terms of new smartphone and social media technologies. However, one thing is for sure, Dmax is getting ready for it!

TEU

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TEU: How do you create a balance in offering your clientele what they like but also continue to be innovative in sectors such as Smart phone Apps?

Editor’s Note

US: There is no magic here. We listen to what clients need. We then study their business models and recommend solutions which are based on their best expectations.

As a Finance and IT analyst, I am open to a wide spectrum of technologies and this helps in directing our company beyond the limits of our in-house knowledge pool. Our business solutions often include the very

IT Development Director

Uwe Schoenfeld Group Strategy Born in Germany in 1963, Uwe Schoenfeld graduated in economics at the University of Berlin. He has been personally involved in the running of a number of international firms, mainly in the financial and equity sectors in Germany and the UK.

November 2013 | THE ECONOMIC UPDATE

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LAW

Independent and Non-Executive Directors under Maltese law

By Thea Saliba

As the culture of appointing non-executive Directors (NEDs) and independent directors to the Boards of Maltese companies increases, regular discussions on how the law regulates their position and role become ever more relevant.

NEDs are normally described as directors who do not have an active role in the day-to-day management and direction of a company, but would normally make sporadic visits to the company. They are often appointed in large companies typically with the role of scrutinizing managerial decisions in order to enhance the company’s long term success. Thus their independence is crucial, given their typical involvement in such areas as appointment and removal of senior management, remuneration of executive directors and overlooking the general governance of the company.

It is therefore essential that a NED insist on some basic risk management measures, such as laying down clear yardsticks for behaviour

The law makes it clear that directors owe a duty of loyalty to the Company, and are responsible for the general governance of the company, its proper administration as well as the management and general supervision of its affairs. Directors are legally bound to use their powers honestly and in good faith, to seek the best interests of the company and to promote its wellbeing. These duties and responsibilities apply to all directors, irrespective of their designation. Cases dealing with the position of NEDs aren’t numerous. In Malta, the typical problem involves liability for VAT, given that directors are jointly and severally liable together with the Company for such payments.

Until the local courts decide on how the liability exposure of a NED may differ, if at all, from that of other directors, a person 30 |

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accepting such a role would be wise to heed the directions of some foreign cases, such as the Australian case of ASIC v Vizard, where a NED was found to be in breach of his fiduciary obligations as a director, for having gained a personal advantage using company information. In Howard v Herrigel, Goldstone J A, opined that even if a director omits to take steps in the management of the company, one may still be a party to a fraudulent conduct.

responsibility, irrespective of his actual executive function within the company, and should therefore ensure that basic risk management measures such as appropriate corporate governance rules are duly adopted.

TEU

Clearly, NEDs owe fiduciary duties to the company they serve like all other directors.

It is therefore essential that a NED insist on some basic risk management measures, such as laying down clear yardsticks for behavior, when invited to sit on a Board in a non-executive capacity.

The ‘OECD Principles of Corporate Governance’, states, in Section VI, that the board should appoint non-executive board members who exercise independent judgement on matters where conflicts of interest can arise.

The Financial Reporting Council (FRC) of the United Kingdom promotes ‘The UK Corporate Governance Code’ which covers a variety of issues, including the way a board should be composed and its suggested operating procedures. In its most recent 2012 iteration, the Code states the following: “The board should include an appropriate combination of executive and nonexecutive directors (and, in particular, independent NEDs) such that no individual or small group of individuals can dominate the board’s decision taking.”

Various authors state clearly that the person’s functions matter much more than his title, when it comes to determining his liability at law. However, it is also true that when a person accepts the formal title of director, he is making very clear implied affirmations in connection with

The author would like to thank Dr Tonio Fenech, Director at Alliance Trust Company Limited and Joint Managing Partner at Fenech Farrugia Fiott Legal, for his assistance and guidance in the preparation and drafting of this article.

All rights reserved | Copyrighted

Editor’s Note Thea Saliba has graduated and obtained her Bachelor of Laws Degree in the year 2012 and will be graduating as a Notary Public this year. She is currently reading for a Doctor of Laws degree at the Faculty of Laws, University of Malta. Thea is also a legal trainee with Alliance Trust Company Limited and Fenech Farrugia Fiott Legal, Malta. Thea is the Marketing Officer for GħSL’s ‘Id-Dritt’ publication and for the new Online Law Journal website.

WE’RE WITH YOU EVERY STEP OF THE WAY Capstone Group and Alliance Trust Company Limited offer clients extensive and wide-ranging bespoke services within the professional and corporate services field. This enables companies to focus on reaching their maximum potential and business growth. From the provision of company formation, management, on-going compliance and fiduciary services to tax, accounting, audit and business advisory we are with you every step of the way.

Suite 5, Level 1, Tower Business Centre, Tower Street, Swatar, BKR4013 MALTA T: +356 2549 6500 F: +356 2549 6444 info@capstonegroup.com.mt • www.capstonegroup.com.mt • www.atcl.com.mt • info@atcl.com.mt

ALTERNATIVE ENERGY

Investing in the Future

By Lorna Diep

Debbie Schembri, director at ElectroFix Ltd. speaks to the Economic Update to discuss the implications of installing Malta’s first Solar Farm and process involved.

TEU: What factors come into play when investing in a Solar Farm?

DS: The starting point would obviously be the question of space. Does one have the area in which to install such a large PV System? Ideal locations would be barren land, a disused quarry, rooftop space, etc.

Then there are the permits and negotiations with the MRA that the organization needs to sort out. You would need to obtain clearance from MEPA, from Enemalta as well as the MRA. Once all those are in hand and negotiations in relation to the feed-in tariff have been sorted, MRA issues the PV authorization.

One must also keep in mind the financial aspect to such a project. Although a solar farm is one of the only guaranteed revenue-making investments, the initial expenses need to be provided for.

TEU: What makes a Solar Farm a safe investment?

DS: I think of a Solar Farm as a moneymaking machine that never stops working; a business where employees are never sick, tired or need to take leave – a business with a workforce which is producing constantly and consistently for a minimum of 25 years guaranteed.

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Maintenance is also minimal – scheduled cleaning, testing and physical inspections are the only things needed.

I think of a Solar Farm as a money-making machine that never stops working; a business where employees are never sick, tired or need to take leave

TEU: How has ElectroFix equipped themselves for such a large project?

DS: In reality since we have been behind several large projects in the past few years - for example, The Private School’s Association project consisted of 13 different locations which had to be delivered in an extremely tight timeframe – we were already set-up and able to cater for this.

Yes it is true the scale of the project is the largest we have ever done, or rather has actually every been installed on the Island Yet in actual fact a Solar Farm is simply a very large PV Installation.

Our engineers, installers and project managers are all fully skilled and more than capable to ensure the project is implemented successfully. Additionally we are confident in the product we will be working with – Conergy.

TEU: What is your advice to anyone interested in investing in a Solar Farm?

DS: If you have the space then it is definitely something to consider - A PV

installation is one of the only investments with a guaranteed return.

It is also important that the installation company one works with is experienced in large projects. A lot rides on the quality of the installation and the detail that goes into planning the layout. It is merely the quality of the PV Panels that counts but also the quality of the cables, inverters and structure to ensure you gain the maximum out of your investment.

TEU

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Editor’s Note Debbie Schembri is the co-director of ElectroFix. ElectroFix has established itself as one of the leaders in the energy efficiency market in Malta, representing leading global brands. Their products include solar water heaters, pv panels, heat pumps, solar pumps and insulation and protective coatings amongst others.

Their best of breed products have been installed in some of the largest private enterprises as well as government organizations in Malta.

Transport & Logistics

Express Trailers’ Logistical and Transport Service Second To None

After Express Trailers was recently confirmed and listed on the Eudra GMDP Database for Good Distribution Practice compliance and Wholesale Distribution Authorisation for the storage and transportation of medicinal products, the company has just been awarded the Importers License that allows Express Trailers to import medicines from non-eu countries and redistribute them throughout Europe through its logistical network

“No freight forwarder company in Malta has this license and we are proud to say that this new development strengthens our commercial positioning as Malta’s leading transportation company that is capable of offering all groupage services from Malta to Europe. Indeed, our service is second to none when it comes to reliability, quality and frequency and this is what gives us an edge, and our customers, peace of mind,” says David Fleri Soler, Sales and Business Development Manager at Express Trailers.

Operating to and from Malta on a weekly basis, Express Trailers is today regarded as the leading company when it comes to the delivery of products from Europe to Malta and also for exportation of products at fast delivery times into Europe. This hard-earned reputation has been possible thanks to a committed and passionate team with a most professional outlook to the sector and the industry in general.

“We are Malta’s leading third party logistics (3PL) provider, our business has been built over these past 40 years of servicing clients from many different sectors ranging from manufacture, retail & fashion, importers of foodstuffs, frozen & chilled foods, cars, and 34 |

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personal effects. We are also certified and have been operating in the transportation of dangerous goods, waste and in the storage and delivery of pharmaceuticals, all according to the EU’s most stringent quality and safety requirements. Across all operations, we remain conscious of our clients’ priorities and we make these priorities our own,” says David Fleri Soler.

Express Trailers has garnered a strong footing in the warehousing and distribution of all types of retail goods due to the recently set up facilities next to its Head Office in Luqa. These facilities, purposely designed and built for the storage of all types of goods including pharmaceuticals which have have been licensed by the Medicines Authority of Malta and form a very intrinsic part of the company’s service to all our clients.

“It is true that the transportation business is a delicate operation that requires particular attention however, this is the same philosophy with which we approach all our clients in the service we deliver and this is what I feel has given us the edge over other operators. We love what we do and we deliver with passion,” concluded David Fleri Soler.

TEU

iGaming

European Parliament pressure prompting European Commission action on online gaming could be very positive for Malta’s growing igaming jurisdiction ONLINE GAMBLING: COMMISSION ACTS AGAINST GAMBLING LEGISLATION OF SEVERAL MEMBER STATES The European Commission launched formal infringement proceedings against the online gambling legislation of 6 Member States and issued 2 ‘reasoned opinions’ against Sweden for failing to comply with EU law. This move follows repeated calls from the European Parliament for the Commission to act as the Guardian of the Treaties and significant legal clarifications by the Court of Justice on how the Treaty applies to national gambling legislation. Similar decisions against other Member States are expected to follow.

The Commission sent letters of formal notice (1) to Belgium, Cyprus, the Czech Republic, Lithuania, Poland and Romania with regard to their online gambling legislation (see link for Commission press release). Sweden, which already was subject to an infringement proceeding, was today sent 2 reasoned opinions, formal requests to bring its legislation in conformity with EU law rules and the last step before potential litigation at the Court of Justice. Sweden has a 2 month deadline to reply to the Commission.

Estimates put the revenue from Malta’s growing igaming cluster at 10% of GDP and with some 6000 people directly employed in this industry sector, the scene may be set for further growth spurred by this latest round of political activity.With the Maltese jurisdiction beginning to leverage its 10 years of expertise, there may now be renewed interest in exploring EU opportunities in a more systemmatic way based on yesterday’s news from Brussels and looking for consensus on how to develop the Single Market for services to Malta’s advantage in this emerging context. With the EU taking up its role of guardian of the EU treaty certainly indicates that Maltese businesses can seize the opportunity, not only for the gambling contribution to Malta but also for the remote gaming sector which is the primary driver of Maltese Digital Economy, attracting strong foreign direct investment and with highly positive spill-over effects into other digital sectors of the Maltese economy.

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These are the first series of decisions from the European Commission regarding outstanding complaints and pending infringement cases against over 20 Member States (see link). Whilst the Commission has closed some complaints, cases against inter alia France, Germany, Greece, Hungary and the Netherlands remain under investigation and are awaiting formal decision. The decision to restart gambling infringement proceedings is a significant step as its last comparable action dates back to February 2008.

The Commission´s action follows repeated calls from the European Parliament - most recently in its June 2013 report ‘Online Gambling in the Internal Market’ – for the Commission to “continue to monitor and enforce compliance of national laws and practices with EU law,…,and to launch infringements procedures against those Member States that appear to breach EU law” (see link).

It is based on recent clarifications by the CJEU on how the Treaty applies to the (online) gambling sector (see link).

National rules which prohibit gambling services authorised in other Member States were found to restrict the freedom of residents to receive services offered in other Member States. Furthermore, gambling licensing regimes must be transparent, non-discriminating and non-arbitrary.

Most importantly, the CJEU has clarified that national regulation must be overall consistent in its objectives and measures and that

it is for the Member State to prove that imposed restrictive measures are suitable and necessary.

Maarten Haijer, Secretary General of EGBA, commented; “Today´s decision by the Commission is highly significant as it will bring further legal clarity to the online gambling market in the EU. We commend Commissioner Barnier and his services for their perseverance and commitment to making sure gambling regulation functions properly.

EGBA urges Member States to use this opportunity to put in place effective, commercially viable gambling legislation which takes into account the CJEU requirements and to avoid the need for litigation at the Court of Justice.”

Haijer adds; “It is perfectly well possible to achieve public interest objectives in a consistent and systematic manner without being unnecessarily restrictive and in compliance with EU law. EGBA is fully committed to achieving public policy objectives such as a high level of consumer protection. In fact, all EGBA members are compulsorily audited on their compliance with the CEN agreement on ‘Responsible Remote Gambling Measures.’(2)” Infringement procedures Where a Member State fails to comply with EU law, the Commission has powers of its own (action for non-compliance) to

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DATA PROTECTION

Should we leave big corporations or the secret services in charge of our privacy?

By George Carol

Leading academic and author Professor Joe Cannataci holds no punches when it comes to privacy and data protection, understandably when put in the following context; in an interview he explains that Hitler needed an army of clerks to sift through records to identify Jews in Holland during the second world war, “but in 2013 you need only a relatively few people to crunch software to get similar results around the world”.

Stories shared by the European Parliament Office in Malta in the run up to a discussion with MEPs on Friday show how hackers, security and intelligence agencies as well as ill-meaning persons can invade many aspects of our life and our security, including our bank details through our own activity online.

Rights to review provisions of the European Data Protection Convention and especially Recommendation R(87)15 on police use of personal data. This cutting-edge research is next being channeled into a new joint Masters programme in Information Policy & the Security Sciences.

Professor Cannataci, who is Head of the Department for Information Policy & Governance at the University of Malta, will be a main speaker during the discussion.

Cannataci holds a Chartered Fellowship of the British Computer Society, received his Doctor of Laws degree (LLD) from the University of Malta in 1986 with a thesis on privacy and data protection law published by the Norwegian University Press in 1987 and has pioneered work in areas as diverse as technology law, security and cybercrime for more than a quarter of a century. While dedicating the bulk of his time to his base at the University of Malta, he continues to maintain an international presence across several continents: his part-time appointments include that of full-Professor with the title of Chair in European Information Policy & Technology Law within the Faculty of Law at the top-ranked University of Groningen in the Netherlands, an Adjunct Professor at the Security Research Institute and the School of Computer and Security Science at Edith Cowan University in Australia and an Associate of Longwood University’s Cyber Security Center, a US Department of Defense certified National Center of Digital Forensics Academic Excellence

the work of MEPs has been both invigorated and overtaken by the Edward Snowden disclosures on US and British mass surveillance of digital communications

Professor Cannataci is currently coordinating the research work of over 100 researchers organised within 33 teams across 29 institutions in 25 countries carrying out projects across Europe, Kenya, India, Malaysia, Australia and the Americas. He also holds the position as Expert Consultant engaged by the Council of Europe’s Consultative Committee (T-PD) and Directorate for Legal Affairs & Human 38 |

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Professor Cannataci says, “These enormous multinational corporations with a presence in Europe are also subject to EU law and new European rules aimed at curbing questionable transfers of data from EU member states to non-EU countries such as the US are being finalised in Brussels. Yet they may also be subject to other laws such as US law so which law will they comply with?

The European Parliament and MEPS have been doing some sterling work in this sector, a process which gathered momentum since the European Commission published its Data Protection Reform Package in January 2012. In reality, however the work of MEPs has been both invigorated and overtaken by the Edward Snowden disclosures on US and British mass surveillance of digital communications. Overtaken to a certain extent since Snowden’s disclosures detail activities of intelligence agencies working in the sphere of national security, one of the few areas of activity which is excluded from the competence of the EU institutions and thus it does not fall within the remit of the European Parliament. Yet constituents do not necessarily understand these legal niceties and may still be expecting MEPs to do something to protect them from masssurveillance in the post-Snowden era.”

The most salient comments from Professor Cannataci, who has been publishing on these data privacy and protection issues Professor Joseph Cannatac

DATA PROTECTION

for 30 years, bring a new heightened level of insight to a complex subject. He says, “New EU rules to curb transfer of data to non-EU states such as the US after Edward Snowden’s revelations may be more of a boon to multinational corporations than anyone else. Many of these corporations have links to or roots in the US and they have commenced very powerful lobbying in Washington to start a damage limitation exercise to stem the haemorrhage arising out of all the negative publicity which portrays them as stooges of the US security agencies and leading to a considerable lack of trust in their services. It is estimated that the drop in demand for their services may cost them anything between 15 and 50 billion dollars over the next 3-5 years. is. This lobbying may mean however that ultimately a handful of very powerful corporations can exert much more pressure on the US Government to be a good global citizen than the laws passed here in Europe. Money and profits resound more in this space than ethics.”

Regulations on European data protection standards recently passed through the European Parliament committee stage would make it harder for the big multinational internet service providers and social media providers to transfer European data to third countries, subject them to EU law and authorise significant fines, possibly running into the billions, for not complying with the new rules. The Snowden revelations do bring a new urgency to the debate.

We have to be more protective of the privacy we have, and privacy on the internet in a small island state needs full safeguards and protection

“As parliamentarians, as politicians, as governments we have lost control over our intelligence services. We have to get it back again,” said Jan Philipp Albrecht, the German Greens MEP who steered the data protection regulation through the LIBE Committee of the European Parliament.

Data privacy in the EU is currently under the authority of national governments with standards varying enormously across the 28 EU countries, complicating efforts to arrive at satisfactory data privacy and protection agreements while Professor Cannataci explains that Europe is not just the EU 28 with 500 million inhabitants, “it’s also the 820 million citizens who together make up the 47 member states of the Council of Europe, so there’s a very big balancing act to perform.”

“Most worryingly, even the new proposed EU rules are easily sidestepped by the big multinationals if matters of national security are claimed by the US”, Cannataci argues.

Viviane Reding, the EU’s commissioner for justice and the leading advocate in Brussels of a new system securing individuals’ rights to privacy and data protection, argues that the new rulebook will rebalance the power relationship between the US and Europe on the issue, supplying leverage to force the American authorities and tech firms to reform.

“The recent data scandals prove that sensitivity has been growing on the US side of how important data protection really is for Europeans,” she told a German foreign policy journal. Cannataci agrees that the proposed draft Regulation is a step in the right direction but is far less satisfied with the proposed draft directive and does not completely share Reding’s optimism as to the impact that the new DPRP could have on rebalancing the power relationship between the US and Europe.

Cannataci adds that privacy is very much a concern for the Maltese, and not just something being discussed “out there”. He says, “Studies clearly show that privacy in small places may be even more precious than in larger communities. We have to be more protective of the privacy we have, and privacy on the internet in a small island state needs full safeguards and protection. I am very glad we will have the chance to discuss this in-depth at the University with an open house for anyone who wants to attend. This issue concerns every Maltese and Gozitan.

The software installed by Amazon, Google or GCHQ does not discriminate between Americans, French and Maltese. It collects data and profiles all and sundry, so we have to do everything in our power to understand what we are giving away when we simply check boxes on the internet.”

“Online Privacy and Data Protection”, an activity by the European Parliament Information Office, was held on 15th November at the University of Malta, Lecture Theatre 1, Erin Seracino Inglott. The event’s discussion included the presentation of results from the EU-funded CONSENT, SMART and RESPECT research projects.

TEU

For further information visit the facebook page www.facebook.com/ParlamentEwropew

All rights reserved | Copyrighted

November 2013 | THE ECONOMIC UPDATE

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POLITICS

All About People

By Martin Vella

Background With over 15 years of experience in the Communications sector Miriam Dalli established herself as one of the main television journalists in Malta. She worked as a journalist with ONE and was the first female news editor on the Islands heading a TV and Radio newsroom. She was Head of News of ONE TV and ONE Radio. Miriam was a member of the Labour Youth Forum (Forum Żgħażagħ Laburisti), holding key roles as an Equal Opportunities Officer and as an International Secretary. She was also a member of IUSY (International Union of Socialist Youths) and the former ECOSY (European Community Organisation of Socialist Youths), attending a number of international conferences organised by the Council of Europe, by the Committee of the Regions, and the European Parliament and conferences organised by the OSCE

TEU: Can you describe, briefly, what you think the European Union stands for?

MD: The first words that come to mind are Peace, Stability, Prosperity and unity in diversity. Back in 1950 Robert Schuman, in the ‘Schuman Declaration’ said that the EU’s aim was ‘to make war not only unthinkable but materially impossible’. Today, 63 years down the line, things have changed a lot even though the EU project is still work-in-progress.

I see a dynamic EU which has moved from its original aim to avoid war or to establish a single market to an EU which has a fundamental role in addressing extremely important issues such as climate change, fighting Third World poverty and managing properly the economic and financial crisis. At the same time we have 28 nations with different languages, cultures, traditions, religions and mentalities which have to act as one in the international arena. Nevertheless, respecting each other’s diversity remains key to the success of the European project.

What I am totally against is a state of affairs where European citizens feel that the gap between themselves and European politicians and institutions is growing. I firmly believe that legislators of Directives which Member States will transpose in their national legislation should truly represent the people that live in the EU as a whole.

My first and utmost concern is to defend and safeguard the interests of the Maltese families

TEU: As a journalist and expert witness at public forums if elected as an MEP, what area of EU policy would you wish to influence?

Miriam Dalli’s interest is to keep a down-to-earth approach, where listening to what people need and want becomes of paramount importance. As we speak with the amiable and magnetic MEP candidate, she tells us that listening properly will help her address Maltese families’ needs and in turn this will assist her push forward policies that make sense for our families and our country, because ultimately her main priority is Malta and its people.

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MD: If elected as an MEP my main interest would be to bring to the fore issues which are of utmost importance to Maltese families and fight for the interest of the Maltese citizens. The people’s aspirations are my main priority including more employment, tackling irregular immigration, less bureaucracy for business, more EU funding and sustainable energy for everyone. These are the policy areas that I would like to focus on, actively work upon and proactively influence.

POLITICS TEU: How would you fulfil the role of an MEP? MD: With utmost loyalty towards the people I would be representing. My first and utmost concern is to defend and safeguard the interests of the Maltese families. In this context, I shall work hard to scrutinise EU legislation and give a voice to the concerns of the Maltese citizens. I also intend to focus my work on the areas which are of strategic importance to Malta.

TEU: What policy proposals would you support on: MD: The Financial crisis – A policy that would combat the recession whilst ensuring the smooth and efficient functioning of financial markets to ensure the general well-being of our country and its people, protecting taxpayer interests and facilitating business operations.

Energy policy – A policy which will assure a secure supply of energy, promotes affordable means of sustainable energy production, reducing energy costs and protecting the environment we live in.

Global warming – This is an area which the EU cannot tackle on its own. I would therefore support a policy based on an alliance with other continents and players. A policy that will help the EU develop and agree upon a global plan for energy and the environment.

Such a plan has to focus on whether different nations can meet internationally agreed Carbon Dioxide emission limits while being able to satisfy their energy needs.

Consumer protection – A policy that will ensure a high level of consumer protection, better representation of consumers’ interest and the effective application of consumer protection rules.

Agricultural, environmental, and health and safety policies – A policy which fosters the production of safe, nutritious affordable food supply while protecting the environment and contributing to the health and stability of our communities.

Regional, cohesion and solidarity policies with respect to disadvantaged regions in the EU – A policy which reduced disparities between regions and countries of the European Union by improving competitiveness and employment to achieve a faster rate of economic development in a sustainable manner.

TEU: What is your outlook for the 2013-2014 term from the point of view of the institutions?

MD: This term is an extremely interesting one.

As regards Institutions I believe that we need to emphasise the fact that the 2014 European Parliament Elections are different from any other EP election. The European Parliament is now more powerful than ever before. Thanks

to the Lisbon Treaty it is on an equal footing with the Council of the European Union on important areas such as immigration and asylum and the approval of the EU budget.

During this period we will also have the appointment of a new President of the European Commission. The European Parliament has an important role to play since the Lisbon Treaty provides that the European Council votes by qualified majority for a nominee for the post of President, taking account of the latest European Parliament elections. This proposal is then put before Parliament which must approve or veto the appointment. Moreover, the second term of the President of the European Council, Herman Van Rompuy comes to an end on 30 November 2014.

I am in politics because I’m interested in changing things for the better

TEU: Although the current Maltese MEPs have managed to win the respect of many of their colleagues, what will be your footprint in the EU Parliament as a Maltese women MEP? MD: My main concern is to give priority to my country and our families, since I strongly feel that their interests are my interest. Nowadays, a big chunk of Maltese laws originate at the EU level and the European Parliament is in charge of amending and approving proposals put forward by the European Commission.

I look forward at a situation where such amendments would reflect what the Maltese electorate requires and needs. I am committed at establishing and enforcing this link between what happens on an EU level and the interests of Maltese and Gozitan citizens and provide the required information which would make the Maltese electorate feel part of what happens on an EU level.

TEU: Do you think Labour could do more to attract women and how do you define barriers to women’s political and civil participation in Malta?

Women in Malta still lack the right structures and support which can help them participate actively both in the political and civil field. We are seeing some changes being implemented including new initiatives that have been introduced in Budget 2014. I sincerely hope that these changes will give women the required impetus to be active participants in the public life. We have a lot of valid and talented women who can make a valid contribution to politics both on a local and also on a European level. These women should be given the right space to contribute further in politics and in civil life.

I think the Labour party is attracting valid women on its ticket and as its representatives.

However, when you have a look at the amount

of female candidates of both parties both for the general election and the MEP election it is clearly evident that more still needs to be done.

TEU: What is your stance on illegal immigration?

MD: Coming from a small island in the middle of the Mediterranean like Malta means that I completely understand the fact that Malta is facing a new exodus of immigrants from North Africa and the Arab world. I sincerely do hope that we have arrived at a point where we will see all the nice words and statements about solidarity made by different EU institutions being translated into action. Solidarity should not be limited only to the economic crisis where the most vulnerable states had to be bailed out but it should be extended to the humanitarian crisis that Southern Member States are facing.

By accepting that this problem is an EU problem the Union would not only be helping the most affected Member States but in turn it would also be helping immigrants seeking a better future elsewhere.

TEU: What is your outlook for the future as a totally fresh and innovative face on the local political scene?

MD: I am in politics because I’m interested in changing things for the better. I am not ready to settle easily for the status quo if I believe that a change is required and if such a change will be of benefit to my country and the Maltese people.

Taking a defeated approach from the outset by stating that certain things cannot be changed simply does not work for me.

I believe that the upcoming European Parliament election is an extremely important election and European citizens, including Maltese citizens, have an opportunity to express their view on how they want EU policies to change and on what future direction they want the EU to take.

TEU

All rights reserved | Copyrighted

Editor’s Note Miriam Dalli has successfully completed her Doctorate of Law at the University of Malta. Her thesis which focuses on the financial services sector is entitled Investment Advisors: Legal Obligations towards Investors. Miriam Dalli obtained a first class degree in her LL.B. course which leads to the conferment of Bachelor of Laws. She is a Communications graduate and she obtained an MA in European Studies, an MBA from the University of Malta. She acted as Corporate Affairs Senior Executive by Vodafone Malta where she worked on the company’s Internal and External Communications, Public Relations, Corporate Social Responsibility and Sustainability. Currently she is working as an advisor with the Ministry of Energy and Conservation of Water focusing on Communications, Corporate Social Responsibility and Stakeholder Management. Miriam Dalli is a candidate on the PL ticket for the 2014 MEP elections.

November 2013 | THE ECONOMIC UPDATE

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ICT

Choosing a core business application software package

By Eric Muscat (Partner responsible for IT Advisory Services at KPMG in Malta)

Your core software application may no longer be serving your business appropriately or it has become too expensive to run and maintain. Selecting a replacement software application is not a straightforward undertaking as many organisations do not have the experience and the robust approach to ensure that the right system and vendor are selected.

Organisations typically look at what software is being used by other players in their industry, you speak with friends to gather intelligence on what is out there, and search the internet to identify options to include on a shortlist. In so doing, you should keep in mind that what your competitors are using may not befit the specific requirements of your organisation, or that the cost associated with the purchase, implementation and maintenance of the system could be much higher than your organisation can afford or expects.

A selection process should start with a definition of scope and high level business requirements, typically a by-product or an extension of a business and IT planning process. A long-list of software packages that fit these requirements should be prepared.

Establish also the desired benefits of the new system, a realistic implementation timeframe, a budget, and a desired payback period.

Asking for a demonstration of systems at this stage may seem to be a logical step in the process. Vendors are usually willing to oblige highlighting the product’s strong features and benefits while providing impressive credentials. However such an approach does nothing to aid comparing one solution with another in the functional areas that matter most for your organisation.

Product demonstrations are very time consuming and tiring experiences and need to be appropriately structured if they are to contribute to a selection decision.

This structure finds its origin in a well documented list of requirements that the vendors use in their proposals to confirm which specific requirements are supported 42 |

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by their respective solutions. Vendors take this process very seriously as their response eventually finds its way to a contractual obligation once a solution is selected. These requirements are prioritised and given relative weightings providing you with the means to score each solution with hard numbers making comparisons meaningful.

The cost of the solution is also a complex consideration

Only vendors with the best scoring packages are invited to showcase their solution. Take control of these demonstrations by preparing and sharing with the vendors a well defined description of how your organisation operates in some key areas. Give the vendors sufficient time to prepare their solution to address these areas. From these focused demonstrations you can judge and compare which solution best meets your requirements.

Of course there are other considerations that come into play for a final selection, not least the technical architecture of the solution, how it fits your organisation’s technical environment, the nature and cost of the skills and resources that are available in-house, the implementation approach including testing strategy and data migration strategy, the implementation timeline, the extent of configuration and customisation necessary, the experience of other organisations using the system, and of course, cost. Each of these elements needs to be carefully considered as each one will impact the risk profile of the solution and its implementation. For example, if the new system is to integrate with existing systems, you need to consider the risks and costs associated with disconnecting the old system and integrating the new one.

The cost of the solution is also a complex consideration. There are one-time costs and recurring costs. Software licensing cost structures can differ, one variation relating to concurrent users versus named users.

Also, many fail to distinguish between maintenance and support costs.

It is imperative that you consider the Total Cost of Ownership (TCO) over a period of

say five years. Some solutions may present a relatively high up-front cost while others will have higher ongoing costs. This is not a straightforward issue. For example, a poor implementation process – possibly a low cost rushed implementation – may result in high support costs over the years. A poor data migration strategy may result in low quality of data that will manifest itself many months following implementation, increasing your support costs in the latter years.

Once you identify a preferred solution and vendor, you enter the contracting stage. Vendors happily propose a contract incorporating a licensing agreement, a maintenance agreement, a support agreement and an implementation agreement, and claim that all of this is standard. By this time you have developed an affinity with the vendor, you have been allowed discounts, and you are keen to get on with it after many months of effort to get to this point. You must resist the temptation of moving rapidly through this stage. A complex contract of this nature is an eco system that should avoid loose or dead ends. If it is negotiated in good faith by both parties it will go a long way to put your relationship with the vendor on a sure footing and a good specialist lawyer will help you get there.

TEU

Editor’s Note Eric has over twenty years experience working in various Information Technology functions covering the entire spectrum of the systems development lifecycle, IT project management, IT strategy, selection and implementation of IT solutions, process reengineering, IT risk management, learning strategies and change management. Eric is responsible for a team of professionals engaged on IT Advisory projects covering IT project management, IT assurance and IT governance.

SAILING

ALEX THOMSON AND GUILLERMO ALTADILL FINISH 1st IN CLASS AND 4th OVER THE LINE IN MIDDLE SEA RACE 2013 ON HUGO BOSS Alex Thomson together with Guillermo Altadill on HUGO BOSS have won their class in the Middle Sea Race in a close race with the other IMOCA 60, Gaes throughout the entire 3 days of racing.

“It was close the whole way round,” said Alex. “There hasn’t been time for much rest these past days. We started out ahead of them, but took a routing in the Strait of Messina which allowed them to get in front. We had a bit of catch up, then worked hard to stay ahead until the finish.”

The race left Grand Harbour in Valletta on Saturday morning, with HUGO BOSS crossing the finishing line back in Valletta this morning. They were 4th over the line.

“This is my first ever Middle Sea Race,” said Alex. “Tricky conditions meant it was quite a challenge. Not in the way that I am usually used to, but a definitely a challenge.”

“It was a great race though – and always good to win when you are in a race that close. And despite focusing on the boat

there was some spectacular scenery to take in out there.” The Middle Sea Race marks Alex’s final race in a successful year.

He started 2013 on the podium in third place in the non-stop solo around the world race, the Vendee Globe.

He has since gone on to race in the Gotland Runt in Stockholm, Round the Island, the Fastnet and the Artemis Challenge with great success. Alex now goes into training before heading into an exciting new year of 2014 TEU

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www.paradise-bay.com November 2013 | THE ECONOMIC UPDATE

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FILM INDUSTRY

U-film attracts investment to Malta

Film industry is one of the defining types of activity in Malta - along with tourism, education and yacht business. U-Film (Film Corporation Ltd.) is a structural division of U-group, a Russian- Maltese Group of Companies that works within the film production industry. U-Film (Film Corporation Ltd.) has been giving its customers all sort of services including a unique opportunity for filming deep under the water, for more than 7 years.

U-Film (Film Corporation Ltd.) assist their clients in organizing the complete filming process at all implementation stages from pre to post production. Besides, the company also offers additional services such as legal agreement, transport services, casting, location scouting and other. In seven years U-Film was involved in around 20 projects involving Russian and international films and also commercials.

U-Film (Film Corporation Ltd.) is a regular participant at the most important international festivals, film screening and forums. In 2013 the company participated in International Film Festivals in Cannes, Berlin and Rome .The Russian-Maltese company actively promotes the Maltese islands as one of the most unique and convenient filming platforms in Europe that received the title of “Mediterranean Mini-Hollywood” from The London Times.

Development of the filming industry in Malta was promoted during the last years with a special mention of the deep blue clear waters and the Temples which are even more ancient than the Egyptian Pyramids. They were built approximately 3800 years B.C when at that time the cult of the goddess- giantess Sansuna occurred on the island. But, certainly, the biggest attractions in Malta are the wrecks found at 44 |

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the bottom of the archipelago with vessels ranging from the Phoenician Galleys to modern boats. The most attractive wrecks in Malta are the destroyer escort “Southworld” (65-75m), tug “Rozi” (32m) and also Saint Paul’s ship, found by archeologists in 1990.

U-Film is one of the companies in Malta, which provides professional filming on on both small and large scalesto its clients. Its unique contribution to the industry is the high quality equipment it manages, which includes, a submarine which can go 300m beneath the surface.

Renowned Russian Film stars Filming in Malta Malta has featured in a variety of countries in several films over the years with directors often choosing to set the story in Malta, after becoming inspired by the island’s beauty.

Malta based U-Film (Film Corporation Ltd.), has just finished providing film production services to a Russian film called The Divers, which is expected to hit the theatres in mid-2014. The producers are Sergey Melkumov and Alexander Rodnyansky.

Since 2007, Film Corporation Ltd. (http:// www. filmcorporation.com.mt) has grown in experience and worked on several other productions. The Divers is filmed under the helm of Russian director Konstantin Buslov.

This action-packed adventure was filmed in over twenty different locations across Malta including Valletta (at the National Library and Grandmaster’s Palace), St. Thomas Bay, Marsaxlokk and Vittoriosa. The Director of Photography was Sergey Machilsky. Buslov also took his crew and actors underwater to heighten the tension of the adventure.

The Russian director is making the best use of Malta’s clean sea water, which offers perfect lighting conditions up to several metres beneath the surface. Underwater Director of Photography Evgeny Tomashov

was responsible for capturing the beauty of the Maltese seascape, as U-Film (Film Corporation Ltd.) specialises in underwater filming.

The Divers is about treasure hunting coupled with intriguing relationships between the main characters which also incorporates some elements of Maltese history. Russian scriptwriter Denis Rodimin, known for scripting a string of hits including the cult film Boomer, wrote the script for The Divers. The cast includes top Russian actors Konstantin Khabenskiy and Svetlana Khodchenkova, with emerging star Denis Shvedov. Svetlana Khodchenkova has just finished a starring role in James Mangold’s The Wolverine as The Viper (she was also one of Tomas’ stars).

Sergey Melkumov, Alexander Rodnyansky and Natalia Gorina are producing through «Non-Stop Production» (http://www. nonstop-kino.ru) and «Twin Media».

More over, in Autumn 2013 U-Film (Film Corporation Ltd.) launched an ambitious film project with a preliminary working title “The Depths of the Mediterranean”. The project involves a series of shots of various sceneries in the territorial waters of Malta.

The main theme is the underwater sceneries and their stories.

In November 2013 the company plans to continue working on the project and is actively preparing to shoot the second part.

The third phase of filming will take place in February 2014.

U-Film (Film Corporation Ltd.) is one of Europe’s top location services and underwater shooting specialists. Having an underwater submarine Explorer C5 in it’s arsenal of underwater capabilities, makes it one of the best equipped companies in Europe for underwater film production.

TEU

Trader Marine Yacht Services Ltd are pleased to announce that they are the official representatives of Livart Marine manufacturers of pontoons. tel: 21 313453 Mob 7949 2937, 7903 2488. Email: Edward@tradermarine.com.mt elise@tradermarine.com.mt

Accountancy

A first for Malta as 3a Global is launched

By Lorna Diep

3a is the first locally founded accountancy firm in Malta to branch out overseas. Instead of becoming representatives of a foreign principal, which is the norm in Malta, they have reversed the trend and are now engaging affiliates who will be representing the 3a brand in their respective countries.

Minister Cardona at 3a Global’s Launch

Dr Chris Cardona, Minister for the Economy, Investment and Small Business, officiated the launch of 3a Global as a brand, which coincided with the agreement between the company and its first foreign affiliate, 3a Cyprus. Being a small island, an ex-British colony, and a Eurozone member like Malta, Cyprus was the natural choice for 3a’s expansion. In fact, senior representatives from this country attended 3a Global’s official inauguration which took place on the 8th of November at the company’s headquarters.

George Georgiou, Director of 3a Cyprus, spoke highly of the advantages this membership will offer and said that “Being a member of the 3a Global network has provided our office in Cyprus with access to markets and clients worldwide that recognise the value of quality services.

In collaboration with an international network of professional accountants we can demonstrate the strategic and taxoptimising opportunities available to our clients. Utilising the 3a Global network tools and shared resources such as the online Knowledge Base and the Quality 46 |

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Management System, we can offer fresh and unique solutions that add value to our local and international clients.’

The company has come quite a long way since its inception in 2008 when it was formed by a small team of professionals who ventured into the world of finance.

Led by Neville Cutajar, 3a’s young and enterprising managing partner, this young team has grown rapidly and attracted highranking local partners, including Misco directors, Lawrence Zammit and Joseph FX Zahra and leading consultant, Franco Azzopardi. The company nowadays serves a diverse portfolio of clients, ranging from manufacturing, to tourism, e-gaming, insurance, ICT & finance service companies, locally and overseas.

3a Global was launched after logistical planning and the investment in stateof-the-art information systems set to facilitate the smooth running of a business & professional exchanges between teams operating across multiple regions. The Global operation was instituted as a fully-fledged association, legally set up and registered in Malta, to

act as the coordinator of 3a’s international professional services network.

3a Global members will benefit from crossborder facilities such as intra-companies IT infrastructure, granting privileged access to network resources (and potentially clients) geared to help members meet increasing service demands within the international business context. In parallel, clients of 3a Global will benefit from a multinational, best-of-breed HR team and a range of services including assurance, accounting, advisory, trust/fiduciary, international taxation, and corporate services.

The corporate re-branding for 3a Global, as well as the essential part of the 3a Global IT infrastructure, including the intelligent email marketing system (dmaxepaper.com) and the knowledge share platform (dmaxpedia) were managed by the locally based, MalteseGerman firm, Dmax.tv.

3a Globalnet.com, 3amalta.com and 3acyprus.com were also developed by the Dmax team.

TEU

For more information visit www.3aglobalnet.com, 3amalta.com or 3acyprus.com

iGaming

Continued from Pg 36

try to bring the infringement to an end and, where necessary, may refer the case to the European Court of Justice. The first phase is the pre-litigation phase.

The purpose of this pre-litigation stage is to enable the Member State to conform voluntarily with the requirements of the Treaty.

The letter of formal notice represents the first stage in the pre-litigation procedure, during which the Commission requests a Member State to submit its observations on an identified problem regarding the application of EU law.

The second and final stage in the pre-litigation phase is the issuance of a reasoned opinion that sets out the Commission’s position on the infringement and determines the subject matter of any action, requesting the

Member State to comply. The reasoned opinion must give a coherent and detailed statement of the reasons that have led it to conclude that the Member State concerned has failed to fulfil one or more of its obligations under the Treaties. 4 Member States (Sweden, Hungary, the Netherlands and Greece) have already received a reasoned opinion.

Referral by the Commission to the Court of Justice opens the litigation procedure..

CEN agreement on ‘Responsible Remote Gambling Measures The European Committee for Standardization (CEN) has published the CEN Workshop Agreement ‘Responsible Remote Gambling Measures’ (CWA 16259: 2011) aimed at securing a high level of protection of online players in the European Union (see link).

The CWA is a voluntary consensus agreement and provides for a total of 134 implementing measures that are aimed at attaining 9 policy objectives, including the protection of vulnerable customers and the prevention of underage gambling. The CWA also serves to inform policy makers at national and EU level of the standards needed to maintain a responsible, safe and secure remote gambling environment. EGBA members are compulsorily audited on their compliance with the CWA. CWA 16259: 2011 - ‘Responsible Remote Gambling Measures’ can be obtained from the 31 CEN National Members.

TEU

For further information or comment please contact: Maarten Haijer: +32 2 554 08 90 maarten.haijer@egba.eu

Is your Payment Software ready for SEPA? SEPA compliance becomes mandatory on 1st February 2014. Contact your bank and your software suppliers today.

November 2013 | THE ECONOMIC UPDATE

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NEWSMAKERS

New Internal Auditing Qualification launched by LEAD Training Services of this short course Marinus De Pooter, who is a top-notch internal auditing and corporate governance expert from the Netherlands and who regularly contributes highly interesting articles and features to the official monthly journal published by the Institute of Internal Auditors (US) journal Internal Auditor. He will help participants to focus on improving the Predictive Power© of an organisation to enable them to manage the expectations of their stakeholders.”

A new Award in Internal Auditing, the only qualification for internal auditors available locally, is being organised by LEAD Training Services, starting on 5 February, 2014. Individuals can apply for a grant covering 100% of the cost via the TSSA Scheme which is currently open until December 2013, administered by the Employment and Training Corporation.

An internationally acclaimed speaker and Internal Auditing contributor, Marinus De Pooter from the Netherlands, will deliver the first module in Governance, Risk, Compliance (GRC) and Internal Auditing.The other four modules are spread out until April, 2014. The second module, Cybercrime – What Internal Auditors should know will be delivered by fraud and cybercrime expert Daniel Gambin. Composition and Writing of Internal Audit Reports, the third module, has been entrusted to Dominic Fisher, who is teaming up with James Grech to deliver the fourth module, A Closer look at the IPPF and COSO Frameworks. Last but not least, Soft Skills for Internal Auditors, will be presented by executive coach and trainer James Ashton.

“This is a highly practice-oriented qualification with some top level speakers,” James Grech of LEAD Training Services, said. “We are very proud to have on board as trainer for one of the five modules

Participants in this course, who are limited to no more than 25, will obtain a fully-fledged CPD Award Qualification (MQF Level 6), accredited by the National Commission for Further and Higher Education and recognised overseas. Tertiary Education and a minimum of two years working within a business (private or public) organisation are the entry requirements for the Award in Internal Auditing.

During the first quarter of 2014, LEAD Training Services are also holding another two specialised accredited short course qualifications – Award in Advanced Tax and VAT Matters and Award in Capital and Risk Management – Financial Services.

The first course has a total of 40 hours of lectures spread over seven months. It is targeted at finance professionals willing to get abreast with latest tax (local and international) and VAT matters. The second is a 39-hour advanced short course directed at capital and risk management professionals within the financial services sector.

TEU

For more information on the Award in Internal Auditing visit www.leadtraining.com.mt/shortcourses/award-in-internal-auditing/; for the Award in Advanced Tax and VAT Matters visit www.leadtraining.com.mt/short-courses/award-in-advanced-tax-and-vat-matters/; and for the Award in Capital and Risk Management – Financial Services visit http://www.leadtraining.com. mt/work/award-in-capital-and-risk-management/.

Richmond Foundation The Richmond Foundation has received €10,000 worth of smart software applications from Maltese-German online business solutions firm Dmax.tv. Minister Helena Dalli, who is responsible for Social Dialogue, Consumer Affairs and Civil Liberties, was the guest of honour at the handing over event held on November 4th at Dmax Business Centre, in Swatar. Ray de Bono, Dmax CEO, handed over the licences and access codes of the software to the Chairman of Richmond Foundation, Mr Anthony Guillaumier. The donated software applications, known as Dmaxepaper.com and Dmaxapps.com are vital tools for intelligent email marketing and Social Media applications. This will enhance the marketing prowess of the Richmond Foundation. The donation will be used over the next 5 years saving the organisation some €10,000. These applications will strengthen the promotion of mental health awareness and provide useful information to persons suffering, or those close to people suffering from any mental affliction.

Whilst congratulating Dmax for lending a helping hand in this worthy cause, Minister Dalli commended the Richmond Foundation for their sterling and valuable service, and pointed out that unfortunately the stigma of mental problems still exists although a lot of progress has been made in the last years. Also present for the event at Dmax Business Centre was Richmond’s operations manager, Holger Saliba.

On behalf of the Foundation, Mr Saliba explained that they did not only concentrate on people who have mental health problems, but 48 |

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From left - Anthony Guillaumier, Holger Saliba, Hon. Minister Helena Dalli and Ray de Bono.

also on its prevention. Mr Ray de Bono maintained that as email and the use of Social Media are virtually free-of-charge, NGOs stand to benefit exponentially from using an intelligent business solution like Dmaxepaper.com, as it not only helps in disseminating information to a finely selected audience, but it also provides accurate metrics on each campaign performance, down to every email contact involved, with automated follow-ups and responses. When asked about the typical clients of Dmax, Mr de Bono explained that his company’s clients mainly come from the Financial, Insurance, Tourism, eGaming and ICT industries. In spite of its relatively small size, Dmax exports over 60% of its annual turnover, with its main markets being Germany, England and Sub-Saharan Africa. Mr de Bono said that, as part of its corporate social responsibility, it is an honour for Dmax to be of service to an organisation like the Richmond Foundation which does so much good for society in general.

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