Malta Economic Update

www.maltaeconomicupdate.com

MARCH 2013

IntervIew of the Month

Appraisal & Strategy pg 16

cover story

An exclusive interview with architect Edwin Mintoff

Embracing Change pg 8 An interview with Mark Jr & Keith Laferla

focus

Challenges to invest in Research & Development

pg 20

An exceptional article by David J. Dingli, Managing Consultant – Resource Productivity Consulting Services SCAN ME

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08 | Covery Story

contents 20 | R&D

Embracing Change

We go corporate in an exclusive story with Mark Jr and Keith Laferla of Laferla Insurance Agency Ltd.

12

MFC Announces Call for ESF Tenders

The European Social Fund Cohesion Policy Operationa Programme II 2007-2013

16

Appraisal & Strategy

44| Executive Interview

Architect Edwin Mintoff discusses design issues in this outstanding interview

Challenges to invest in Research & Development

20

The Economic Update welcomes the first instalment by David J Dingli

27

Special Feature BOV Top Entrepreneur of the Year Award 2103 We highlight this month’s nominees for the event of the year

47 | Security

44

Passion, Hard Work and Deliverance

Our executive interview with the exceptional Eddie Woods

Security – Flaw by Design

47

Exor Group’s Duncan Dimech and Ana-Marija Zafirovska discuss securing IT systems against data theft

55 | Health & Fitness

56 | Lifesciences

55

Strengthening Your Willpower

In his Health & Fitness corner, Richard Geres gives us his best advice on self-control businessman

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Publisher Editor Journalist Sales & Publication Manager Graphic Designer Printing

ad management can be like porn: hard to define, but you know it when you see it. David Dingli, Managing Consultant of Resource Productivity Consulting Services, a company with global connections, has spent over 30 years in the business of helping companies improve their management culture. His famed lectures specifically grooms middle managers and top executives for leadership positions as they climb the ranks. He has some specific insights into what makes someone a bad boss. Fundamentally, he says, ”It’s not only about learning the skills to be a good boss. We can all learn these things but it is all about character and who you are, and that might not be possible to change.

So overall, as much as I believe that people can transform and become better bosses, however I’m afraid that we will make the grade.”

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“NEVER INTERRUPT YOUR ENEMY WHEN HE IS MAKING A MISTAKE.” NAPOLEON BONAPARTE

For editorial enquiries please contact: martin.vella@networkpublications.com.mt

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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

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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 Progress Press and distributed free with The Business Weekly.

E d i t o r’ s

Contributers: Miriam Agius; George Carol; Marta Criado; David Dingli; Duncan Dimech; Pascal Dupont; Stuart Fairbairn; Godfrey Formosa; Jeanette Grech; Pekka Koponen; Tony Muscat; Donald Tabone; Astrid Vella; Ana-Marija Zafirovska.

I have experienced five traits of a boss who can make employees miserable and hamper a business’s chances of success. The first is arrogance, where bad leaders have put themselves above the team.

David Dingli says that, “when leadership is arrogant, there also tends to be a difference between the public agenda and the ‘behind-closed-door agenda.’ Having a hidden agenda, usurps team spirit. “It usually comes from a place of management wanting to protect their knowledge or power: ‘I know more than you and I am not going to share,’” he says. “It serves no purpose and it’s a complete waste of time.” The second is when a boss cannot instil trust and demonstrates opaque traits. Mr Dingli points out to workplaces where workers sit in cubicles next to each other send emails instead of speaking. “They are protecting their backs by documenting correspondence,” David says. “They are afraid that if they don’t document something they will be the fall guy.”

Bad leaders also shows taciturn traits when they don’t share information about threats with the team, preventing people from adding value by participating in the problem-solving process. Dingli states that the fourth trait lies with undisciplined bosses who have poor delegation skills and they don’t manage the team. To be sure, Dingli notes, zooming in on small details and taking time to explain expectations is not micromanagement, but the opposite: “You are making sure that what you have asked or delegated is meeting your expectations. It takes discipline.” Finally, referring to the fifth trait of detachment, Dingli says that a good boss truly cares about employees, and that is not just some warm-and-fuzzy philosophy. “To delegate and manage well you have got to know the strengths of your people, and the only way is to get to know them.”

Says Dingli, “Listening to your team helps create a culture of high expectations; that’s the reason for showing the exampleof what you’re looking for: you want it to meet that level of satisfaction.” And that is exactly what The Economic Update team is creating- a culture of high expectation in quality story content such as this month’s cover story featuring Keith and Mark Jr Laferla, the high profile interviews with Architect Edwin Mintoff and Trader Marine’s Eddie Woods.

So can a bad boss learn to be a good boss? “People can learn those skills, but it requires a deep desire,” David says. “I believe it can be done.” The key, he says, is “if you are the boss, you must have the vulnerability to recognise you have weaknesses and seek ways to change. You can’t do that with arrogance.”

Martin Vella

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MARCH 2013 | THE ECONOMIC UPDATE

CORPORATE

EVENTS

Leveraging eBusiness in Malta CSB Group and MIM join forces to co-organise Malta e-Business Seminar

CSB Group and MIM (The Malta Institute of Management) have joined forces to co-organise the first Malta eBusiness Seminar.

The event is to be held at the Westin Dragonara Hotel on the 2nd of May 2013.

Business of all sizes in all sectors are using the internet in many different ways - to work with partners and suppliers, for procurement, for internal activities such as knowledge-sharing, new sales channels and new product development, among others. This seminar explores the benefits and challenges of ebusiness.

The Internet is just like other information technologies - change management, good implementation practices and clear business objectives are required in order to reap the full benefits. This seminar explores the benefits of taking one’s business online, the ways of doing it and the opportunities which lie therein. It also discusses the pitfalls and legal implications of the matter, from a regulatory perspective.

Top concerns for management in today’s business environment in fact include the threat posed by competitors, controlling costs, finding new opportunities, improving responsiveness and better customer focus and service.

E-business is capable of delivering these benefits. Its promise is in its ability to transform the way a firm conducts its business with its customers, with its suppliers, and within its own organization. Internet based buying; selling and processes provide opportunities to many businesses to reinvent themselves,

creating new business designs and models for evolving market spaces. Companies that have taken the plunge are reporting benefits from the use of the Internet. These benefits include: • Improved speed of response; • Cost savings; • Improved communications, information and knowledge sharing; • Reductions in inventory; • Improved efficiency and productivity; • Harmonisation and standardisation of procedures; • Better transfer of best practices; • Acquisition of new customers and increased sales; • Improved customer service.

The best way to learn how to do something is to talk with people who are already doing it successfully! The event aims to provide a number of success stories, network live and connect directly with some of the best minds in eCommerce, Internet Marketing, and eBusiness. Among various items on the agenda one will find Effective Online Transactions – Security – Anti-Fraud, the Online Payment Process and payment options, Online Document Management, Cloud Computing, legal implications of eBusiness and online marketing – Social Media – SEO.

The event aims to target business owners, change Managers, business development managers, marketing managers and IT professionals and is currently being organised in close cooperation with and support from the local business community, stakeholders and other bodies

The event aims to target business owners, change Managers, business development managers, marketing managers and IT professionals and is currently being organised in close cooperation with and support from the local business community, stakeholders and other bodies. Sponsors include eGold Sponsors (Bank of Valletta and SG Solutions), eSilver Sponsors (Calamatta Cuschieri, CC Web Trader, Cloud Keeper, Cloud Account, Infusion, Golden Gate, Melita, APCO, EB Learn, VacancyCentre.com, eBronze Sponsors (DMAX ePaper). The event is supported by Xerox and Anchovy Studios.

For more information about the event, registration, speaking and sponsorship opportunities, kindly visit www.ebusinessmalta.com or contact MIM Membership Executive Nicola Mizzi - nmizzi@ maltamanagement.com or CSB Group Marketing Executive Diane Borg Bascetta email: seminar@ebusinessmalta.com.

TEU

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COVER STORY INTERVIEW

MARCH 2013 | THE ECONOMIC UPDATE

Embracing Change This is not just any other company, it is Laferla Insurance Agency Ltd. The people in the management are actually direct family members. They are tying in their own reputation and it makes an immense difference. We talk with the new generation, Mark Jr and Keith, who embody the family spirit of innovation, commitment and excellence .

Background

Mark Laferla’s first insurance agency to the Maltese market, Laferla Insurance Agency Limited, was established in 1984. In 1987 Mark, together with Robert Baldacchino as his right hand man, became one of the very first pioneers of private medical insurance in Malta.

Today they have grown into an over 50-strong team and are conveniently located in Vincenti Buildings at Old Bakery Street in Valetta. This family-run business believes in providing the best possible service at the best possible price to fit each client’s individual needs.

The Laferla Story

With over 40 years of experience in the industry, Mark Laferla still lives and breathes insurance – it’s in the Laferla blood. The familyrun agency opened its doors in 1984 and is still run by Mark Laferla, who holds the position of Managing Director and Chairman of the firm. The agency’s greatest assets were Mark’s wealth of knowledge, along with the collective commitment of his staff.

Since then, Laferla Insurance Agency developed a steady following of longstanding clients who value the thoughtful advice, personal service and exceptional attention to detail.

This tradition continues today through the leadership of a close-knit management team that includes Mark Laferla’s sons, Mark Jr and Keith. Mark Jr joined the company in March 2010 and Keith followed in 2012, after both having acheived ACII recognition at the tender age of nineteen.

The world of insurance and business in general, is much different now. However, the basic precepts remain the same. Laferla Insurance Agency customers value the ability to work directly with the owners of the agency. They also appreciate the way the company’s dedicated staff would go to the ends of the earth to serve their needs – and to be accessible when they need them the most. The firm has grown to become one of the leading players in the local insurance field, with close 8|

www.maltaeconomicupdate.com

to thirty years of experience and enjoying an excellent reputation for prompt and fair claims settlement. In this fast-changing world, some things do remain the same and they become even more valuable over time.

The company’s new mascot, Ferlu, was adopted in 2013, as part of the new branding exercise that the agency has embarked upon.

The idea of having a bird as a mascot was to tie in the mascot with the company’s logo, reflecting the fresh approach which the company has taken and its mission to be advocates and advisors for their valued clients, who count on Laferla Insurance Agency to provide highly personalised protection and service.

Laferla guarantees to settle claims within seven working days – the only insurance firm on the island to provide such a promise.

TEU: How did you determine what the Laferla Insurance Agency Ltd brand should stand for?

Mark Jr: Originally since its inception, as acknowledged in the insurance industry, when someone goes to an insurance company they yearn for financial strength, which we provide and it is reflected in our philosophy, together with reliability and good service. And that is what the brand represents.

TEU: And what does it stand for today?

Mark Jr: We like to show that today the same values have been passed down to the second generation. Our father has always stressed the importance of providing that superior service that he has always managed to do so well. He’s now handing over the ropes and tweaking our skills, so that we can follow in his footsteps.

No amount of studying and qualifications can teach you how to handle clients the way that our father has thought us to.

TEU: What are the values and the motivation that go into it?

Keith: It is our seven day settlement promise, which is the pinnacle of the service we offer our clients. When clients submit a claim (together with all supporting documents, and subject to the eligibility of the claim); we guarantee to settle that claim within seven working days.

We’re the only insurance firm on the island to provide such a promise and service.

TEU: Where does the brand stand in the corporate rebranding strategy?

Keith: When we are discussing the current project we are going through, we are not talking about it as a rebranding exercise, but rather a freshening-up of the brand image to appeal to a wider audience. This helps to showcase our professional service to the whole market rather than solely to the portfolio of existing clients who have expanded with us over the years and are still with us today. We know that our existing client base is extremely loyal to our brand, as we are to them; and so we wanted to find a way to appeal to a newer, wider audience and further grow our portfolio of such clients. That was the idea behind the image re-engineering process.

Mark Jr: There is a direct link between this branding exercise and the foundations of the company itself. If you look at the logo the way it was set up initially you see the Laferla tree, which is the emblem of the Laferla name, together with the chains symbolising security.

So you get growth and security, the financials that I was talking about. The mascot that was created by Keith was a bird seeking refuge in the same tree. So there is a link between the security that is offered and the bird which seeks refuge in the security of the tree, signifying insurance.

The name chosen, Ferlu, is also derived from the family name. Another deciding factor for this name was that mine and Keith’s childhood friends used to call both of us “Ferlu” respectively – it was our school nickname. Therefore, in naming the bird “Ferlu”, this also symbolises our personal touch in the company.

COVER STORY INTERVIEW

MARCH 2013 | THE ECONOMIC UPDATE

Keith Laferla, Mark Laferla and Mark Laferla Jr.

TEU: How do you maintain the personal side of the relationship in today’s hyperkinetic insurance sector?

Keith: We do not really have any fixed working hours; we are working twenty-four-seven. So if anyone calls us at 1 1pm on a Saturday night, we are going to answer the call and do our best to solve the problem. We consume a lot of our resources on marketing in order to attain new clients and when they experience our services, because they become so loyal to our brand and we are so loyal to them, it is much easier to maintain the relationship as customer retention rates are high.

How do you show what makes your company stand out within this fierce market?

Mark Jr: Again, with our company’s personal touch. If you had to pick one thing that would differentiate us from other companies, apart from

the reputation and the promise of claims settlement which is very important, it is the personal touch we keep with the client. Also, we have a young management team. Naturally, fresh ideas are coming in, and the board is approving most of the proposed changes. Not everything is completely the way our predecessors would have done it, but I think it is working well. It is all about embracing change.

TEU: Is it all about building mutual beneficial relations?

Keith: Yes, definitely. Our clients are aware that we are always looking for such mutual beneficial relations; and that helps us to keep moving forward with them.

TEU: What makes for a successful insurance advisor today?

Mark Jr: You have to know the risk and be sincere with your client. When you have a good

relationship with your client, you understand your client’s needs, you know your client’s market and you recognise your client’s business and his risks. Once you understand that, then you can put yourself in your client’s shoes, and know exactly what he needs. If you see them all at face value and treat them all as just numbers then you do not know what a client really needs, and you don’t stand a chance of building a fruitful, long-term relationship. Once we have built that relationship and we know what our client’s business is all about, then we will be able to provide the best package for customer needs and wants.

Keith: The fundamentals are there now, they are there because there is financial stability, professionalism, all set by our father. We have also obtained recognised qualifications from the Chartered Insurance Institute in London.

We have been geared into the business. Before entering the business we worked for over two www.maltaeconomicupdate.com

|9

Some people are seasonal.

Others, seasoned.

Trader Marine has been in operation for over 20 years, mastering the ropes in the exclusive and demanding sector of yacht management, yacht chartering and brokerage.

We believe that each client is unique, and that his requirements deserve the best attention.

We believe in value, passion and commitment.

Trader Marine 211/2, Admiral Court, The Strand, Gzira GZR 1022, Malta (+356) 21 313 453 edward@trademarine.com.mt www.tradermarine.com.mt

COVER STORY INTERVIEW

MARCH 2013 | THE ECONOMIC UPDATE

what you need, then he can guide you to take the right decisions. We always wanted to be market leaders in terms of service and convenience for our clients.

Keith: Many consumers do not appreciate the importance of insurance. We use IT to help educate consumers and also guide them with their decision-making process. We always try to be innovators; one step ahead of even what the consumer is expecting. Using computers for online payments, for market information systems and customer relationship management, we are looking forward towards the future and the growth aspect.

Mark Laferla Jr Holds the post of Assistant General Manager, responsible for Motor, Marine and Non-Motor business on private and commercial classes.

Holds the title of ACII, Chartered Insurer from the Chartered Insurance Institute, UK. Enjoys good food, cooking and travelling. Is a licensed private pilot and is keen on all forms of aviation.

If you had to pick one thing that would differentiate us from other companies apart from the reputation and the promise of claim settlement, which is very important, it is the personal touch we do give our clients.

years with another company, gaining experience and being hands on as well, as we started, like everyone else, from the bottom.

TEU: Should more be done to raise awareness that most significant undertakings require insurance?

Mark Jr: Yes and no. I think essentially on personal lines basis in terms of personal products the awareness is there. You can basically say that all the products being offered by different competitors are almost identical, the difference is in the service. On a commercial level it is important to find the right service provider, because if you find the right provider who understands

TEU: How critical is the focus on corporate responsibility?

Mark Jr: For starters, we sit down regularly for management meetings, board meetings, IT and marketing meetings. We know exactly what is happening in every aspect of our company, and we have full control.

Keith: Being a family-run business, we can then also go the extra mile. If we feel the need to hold an ad-hoc board meeting on a Sunday morning, we will hold it that morning... Our use of technology further helps this; as we can get a snapshot of what’s going on, all throughout the company. This always keeps us a step ahead of the competition.

TEU: What are you most focused on to ensure growth for now and the future for Laferla Insurance?

Keith: I personally would say costumer loyalty.

When you have the customer loyalty, the word is vibrant, and you get a good reputation. On top of the technology aspect, we are also using new mediums such as Facebook and other social media tools. We make sure to keep our social media pages, social. It costs money; but they are social tools, not selling tools. This helps to attract more consumers towards our brand. It seems to be coming along well so far!

TEU: How do you think you can achieve that focus?

Keith: Because we have personal interest in the company. Also, since the company has a family environment, our team go the extra mile, and it is not just an “eight to five” dull day.

Mark Jr: People seek our company for security and dependability, which we can provide through our flexibility and strength.

TEU: Three words that best define Laferla Insurance Agency?

Keith Laferla Holds the post of Assistant General Manager, responsible for the Health Insurance Department, Marketing and IT. Holds the title of ACII, Chartered Insurer from the Chartered Insurance Institute, UK. Enjoys cooking, travelling and sports. Keith is also a playing member and treasurer of White Hart Hockey Club.

Settlement’, which fits perfectly!; Reputation, Dedication and...

Keith: Professionalism, I would say.

TEU

LAFERLA Insurance Agency Limited are licensed to act as agents for Middlesea Insurance p.l.c. on all classes of general insurance business.

LAFERLA Holdings Limited is also authorised to sell Individual Life Assurance Products for MSV Life p.l.c. and Group Life Assurance Schemes for Middlesea Insurance p.l.c.

Both LAFERLA Insurance Agency Limited and LAFERLA Holdings Limited are regulated by the Malta Financial Services Authority.

Contact T (+356) 2122 4405, 2124 0828/9, 2124 6340 F (+356) 2124 9014 Email: info @laferla.com.mt www.laferla.com.mt

Mark Jr: Well, besides ‘Prompt Claims www.maltaeconomicupdate.com

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MARCH 2013 | THE ECONOMIC UPDATE

EDUCATIONAL OPPORTUNITIES

Malta Film Commission Announces Call for ESF Tenders The Malta Film Commission has been awarded €500,000 as part of the European Social Fund Cohesion Policy Operational Programme II 2007-2013, which aims to improve employment opportunities in the European Union and aid to develop a skilled and adaptable workforce.

T

he Malta Film Commission will be initiating a certified training programme encouraging individuals of all ages to further their studies, as well as develop their skills in order to increase their opportunities for employment in the film servicing industry.

Film Commissioner Peter Busuttil referred to the ESF funding approval, pointing out that this allocation will be invested towards accredited courses in the filming production sector for those interested in starting a career in this industry or in improving their expertise in the field. The commission aims to increase the number of persons adequately skilled in the filming industry with the potential to increase innovation opportunities in this sector.

The training programme consists of compulsory modules, which aim to provide a solid foundation for participants when working in the filming industry. These include an introduction to film production processes, termi-

12 |

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nology, safety and environmental consciousness. Participants will select a training course from the optional courses based on their interest and skills. Depending on the course of their choice participants will become qualified in the module chosen at NQF/MQF Level 1.A list of envisaged courses has been designed in accordance with the skills supply required by the filming industry. In this respect, the courses that will be offered will deal with the following themes: • Module 1 – Compulsory Courses which will include: Introduction to the Film & Television Industries; First Aid; Green Champions • Module 2 – Optional - Administrative Courses which will include:Wardrobe Management for the Film and Television Industries; Location Management/Location Scouting; Film Administration/Production Skills for the Film and Television Industries; Props Procurement; Props and Scenary Assistant for the Film and Television Industries.

• Module 3 – Optional – Technical Courses which will include:Grips for the Audiovisual Industries; Introduction to the Camera Department; Sound technician Assistant for the Film and Television Industries (Production); Lighting for the Film and Television Industries.

• Module 4 – Optional – Construction Department Courses which will include:Stage Hands for the Film and Television Industries; Film Set Painter for the Film and Television Industries; Wood Set Design for the Film and Television Industries; Physical Special Effects; Model Making, Sculpting and Welding for the Film and Television Industries; Set Decorator for the Film and Television Industries; Perfecting Plastering Skills for the Film and Television Industries.

Accordingly, in with the above, the Malta Film Commission (MFC) herby notifies that an invitation for tender has been issued

MARCH 2013 | THE ECONOMIC UPDATE

EDUCATIONAL OPPORTUNITIES

Agora Film Set on location at Fort Ricasoli.

The training programme consists of compulsory modules, which aim to provide a solid foundation for participants when working in the filming industry. These include an introduction to film production processes, terminology, safety and environmental consciousness.

in conjunction with the European Social Fund (2007 – 2013) and with the support of the Employment and Training Corporation (ETC), for the provision of specialist support from eligible, qualified and accredited institutions to provide training services (including the provision of venues and materials) related to the film servicing industry in Malta.

Interested parties are to collect the relevant tender document form from the Department of Contracts. Tenders can be downloaded directly from the Department of Contracts www.contracts.gov.mt. A fee is attached to each tender. The tenders must be submitted in English and deposited in the Department’s tender box before 9th April for Modules 1,3 and 4 and before 2nd April for Module 2.

They must be submitted: either by recorded delivery (official postal/courier service) or hand delivered to: Department of Contracts, Notre Dame Ravelin, Floriana, FRN 1600, Malta.

TEU

Editor’s Note The Malta Film Commission (MFC) is responsible for the promotion, development andsupport of the audiovisual industry, including the film servicingindustry, in Malta. This is achieved through various policies, services and incentives with an aim to facilitate the work of foreign film productions prior to and during the shoot in Malta and by marketing Malta’s locations, skilled labour and industry capabilities to international producers. In addition, the MFC is also responsible for developing an indigenous film industry through training programmes and the Malta Film Fund. To find out more about the Malta Film Commission, visit www.mfc.com.mt Contact Details: Peter Busuttil/Susan Ronald Malta Film Commission Caraffa Stores, Cottonera Waterfront Vittoriosa BRG 1721 Tel: +356 2180 9135, E-mail: info@mfc.com.mt Web: www.mfc.com.mt

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| 13

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MARCH 2013 | THE ECONOMIC UPDATE

Banking

A HELPING HAND

Article written for: The Economic Update by Jeanette Grech

A UNIT WITHIN BANK OF VALLETTA IS THERE TO GUIDE BUSINESSES UNDER PRESSURE OUT OF THE WOODS... ONE CAREFUL STEP AT A TIME The financial and economic crisis of the past five years has taken its toll on Maltese businesses – even if not to the extent it has in other countries.

But not all the problems being encountered by these businesses are due to external factors.

Companies can find themselves under pressure for a number of reasons, ranging from inertia and poor administration, to competitive forces and overzealous expansion.

The most natural reaction is to assume that the pressure is temporary and to plough on regardless, but while this might be true in some cases, some companies merely dig themselves into a deeper and deeper hole.

When companies start to default on their repayments and their overdraft starts to spiral, the Relationship Officer is the first to realise, thanks to the strong “relationship” model that the Bank follows. The case is then handed over to a unit that was set up three years ago, the “Rehab Unit”, which helps them to get back on their feet.

“It takes time and patience to get a company back on track – and a lot of trust,” the Head of the unit Jeanette Grech explained.

“It is a very time-consuming approach and it can be very intense, but we have well-trained, handpicked staff, who are able to work closely with their customers – for well over a year in some cases,” she explained, adding that in some cases, there is daily contact and frequent visits.

The Unit handles a limited number of cases, prioritising the most urgent and most serious ones, to ensure that each of the cases gets full attention. This starts with drawing up a profile

of the company which identifies the root of the problem and continues with a process to identify the solution, starting with the most obvious such as restructuring of debt.

“Companies get into trouble for a number of reasons but very often all they need is a bit of support and advice, a nudge to get them to take the decisions they have been avoiding, and breathing space...” she said, stressing that this is all in line with the Bank’s brand promise of supportiveness and mutuality.

Jeanette’s team of five was built up over the first two years and is now at full complement, handling around 35 relationships in all.

“Clearly the Bank has an obligation to protect its own interests but the service offered by the Unit is not about trying to recoup the money owed to us. This is a service we offer as part of our corporate social responsibility, giving our customers a chance rather than adding to their heavy burden when they are already under pressure. We want our customers to succeed and to thrive and we believe that we need to be there through the bad times as well as the good,” she said.

“And this is very important in the macro context as well as it means that creditors get paid and the wheels of the business keep turning. It is a win-win-win situation...”

“If you were to ask me to identify the most

important factor which makes the difference between success and failure, I would say it is time. Problems escalate when they are neglected: You might get a garnishee order, fines start to acculumate, suppliers turn off their lines of credit preventing you from carrying on your day-today operations...” she said, stressing that this is why it is so important for companies to be helped as early as possible, rather than when problems became irreversible.

The Unit sometimes brings in independent consultants, such as auditing firms, who are able to benchmark the company’s performance against that of others in the same sector, which helps to clarify whether the problem is structural.

Jeanette’s team of five was built up over the first two years and is now at full complement, handling around 35 relationships in all.

“The work requires considerable patience and know-how as well as an unsentimental approach.

It is very important to avoid giving the customer rope with which to hang himself.”

The Unit initially started out with a very low profile but encouraged by customers’ reaction, its work is now being given higher visibility.

“It is too early to gauge the success of the unit but the response has certainly been positive. We anticipated that we might encounter resistance but nothing could be further from the truth. The Maltese are generally very proud and will do anything they can to avoid letting other people down. It is amazing how relieved most of the company owners are when they realise that we are willing to help...” she concluded.

TEU

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INTERVIEW OF THE MONTH

MARCH 2013 | THE ECONOMIC UPDATE

APPRAISAL & STRATEGY

by Martin Vella

Dr Edwin Mintoff has become known as one of the most prolific local architects through his practice both in Malta and overseas, and has proven himself capable of achieving a masterful balance between art, architecture and engineering. In this part two of a remarkable interview, Dr Mintoff stresses the importance of green architecture in the role of sustainable development.

TEU: Buildings have a great impact on our environment and one-third of all greenhouse gasses come from buildings. What are your views on green architecture and its future?

EM: My definition of green architecture is an approach that seeks to create sustainable development in harmony with nature. This can be achieved through various means including the selection of eco friendly materials, the application of certain design criteria etc. The importance of green architecture in the role of sustainable development cannot be understated and compatibility with these principles has now become necessary through the introduction of the requisite legislation.

One of my major concerns is the layman’s attitude towards green architecture whereby some still believe that this should be taken into consideration only as it is a legal requisite and not as an underlying construction principle or belief in long term sustainability. Unfortunately, in the past when the cost of oil was low and technological developments were lacking, different design aspects were employed resulting in anonymous architecture that is not energy efficient at all.

Green architecture should not be viewed as something that has just been introduced; one has only to look at the Maltese vernacular architecture to see green architecture at its best. Internal court yards that allow the high winter sun to enter the space but provide shade from the low summer sun; thick walls and small windows that prevent heat entering during the summer and heat loss in the winter months.

TEU: How did people manage to build with the technology and the tools they had in the past in such a short time?

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Residential Development, Tripoli, Libya

EM: It was difficult but they were very wise.

They excavated rock and then used the same rock to build with. We have a lot to learn from our ancestry who used very simple means and design, and I think we should follow by example and apply these design solutions in our contemporary buildings.

TEU: And yet we don’t exploit it…

EM: The subject of my doctoral dissertation was the urban planning of the city of Valletta over 400 years ago. Here we see green principles in use in

commercial use. This section is overtaking the residential dimension by using the upper stories as storage whilst in reality it would make more commercial sense to use basements and other underground spaces.

Other potential uses include culture and even entertainment. A space below the Fine Arts Museum, for example, has been very effectively used for a numismatic exhibition. Other spaces are even large enough to be used for staging different activities, such as concerts.

TEU: Do you think that architecture as a profession needs improvement?

It is however imperative that architects overcome this challenge and may have to employ a strategy of a humble and modest approach over a more tempting solution of ‘grandoise’ architecture

many aspects, including the building of a whole underground city to make the best use of water catchment and distribution, something that was essential for a city under siege.

The heritage we have below ground level is something that few countries around the world can boast of. It is such a pity; we have all these hidden vaults below Valletta, Cottonera, Senglea and Vittoriosa, that are currently neglected and yet which, with some creative thinking, have so many potential uses. In Valletta, for example, many buildings at street level now have a

Ta’ Monita Residences, Marsascala

INTERVIEW OF THE MONTH

MARCH 2013 | THE ECONOMIC UPDATE

EM: There is always room for improvement in any profession with architecture being no exception.

I am firmly of the opinion that in recent years a significant amount of progress has been achieved in the appreciation of fine architecture. As a consequence, architects, particularly those of the younger generation, are keen to demonstrate their skills and aptitudes in producing an architecture which is appreciated by the public at large.

However the absence of a comprehensive appraisal of the context prior to preparing design proposals is very often the main reason behind poor architecture. Lack of public participation is another reason and this should be introduced and encouraged at all times.

The relaxation of certain policies by MEPA will also contribute towards an improvement in architectural solutions. One would fully understand that certain policies should remain in force in the framework of effective planning practice. However these policies should be projected as ‘guidelines’ rather than rigid ‘rules and regulations’ which stifle the creative imagination that every architect would like to convey through his architectural designs.

TEU: How do you ensure that building compliments, rather than damages, the place and heritage it is situated in?

EM: Very often it is very difficult for an architect to design a building which compliments rather than competes with other structures within the same context, especially when the latter form an integral part of our historic and architectural heritage. It is however imperative that architects overcome this challenge and may have to employ a strategy of a humble and modest approach over a more tempting solution of ‘grandoise’ architecture which would dwarf other structures within the same context.

Casino Di Venezia, Vittoriosa Waterfront

A case in point is the ‘Cottonera Waterfront Hotel’ which is currently being constructed over the Vittoriosa Waterfront adjacent to the Palaces constructed during the reign of the Knights of the Order of St. John and within a streetscape endowed with buildings of heritage importance.

Our solution was a simple form of architecture which respects the ‘old’ but is conscious of the ‘new’. The morphology of the building is defined by its proportions which follow those of the adjacent palaces, and through the introduction of fascias which align themselves with the adjacent facades. The solution is certainly contemporary in nature but reveals a singular respect towards the palaces which adorn the streetscape rendering the waterfront more pleasing and holistic.

Firstly, one has to keep in mind that life on earth is only possible due to the greenhouse effect. However, since we are producing more greenhouse gases than the atmosphere can absorb, the atmosphere is increasing in temperature. In consideration of this, it is essential to understand that a large percentage of greenhouse gas emission emerge from the building sector. Therefore, it is easy to understand that if carbon neutral buildings were constructed, then the anthropogenic emissions of the world would be deceased dramatically.

In an effort to achieve this in the not too distant future, a change of paradigm is needed, a change in mentality whereby we will no longer construct buildings that rely on mechanical systems to provide cooling, heating and lighting but will rather construct buildings which are responsive to nature’s daily and seasonal rhythms and to the forces of the sun and wind; buildings that have components that can transform in response to

their surroundings. Adapting to these rhythms is in my opinion a unique opportunity in the architecture world to design buildings in which the building form and its materials are synchronized with the environment. Therefore, I myself am of the opinion that green urban regeneration cannot be a passing fad, in that same way that concern for the environment is not a mere novelty or a fad, but rather our responsibility. Therefore, green architecture is the way forward into developing architecture to suit our modern day needs.

TEU

Corporate Brief The firm of Dr. Edwin Mintoff Associates was set up some twenty-eight years ago by Dr. Edwin Mintoff, an architect and civil engineer who became one of the first Maltese architects to obtain a doctorate Ph.D. in the field of architecture and urban design. It has since expanded to one of the largest, architectural and civil engineering firms on the island and now offers a wide range of services including land use and environmental planning, urban design, architectural and interior design, civil, road and structural engineering, land and quantity surveying, as well as cost consultancy both in Malta and overseas.

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MARCH 2013 | THE ECONOMIC UPDATE

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any foresee ways to get a return from their hardly earned money. At Di Natura we have amalgamated a smart return with environmental sustainability so that our children can benefit through cleaner air and a more sustainable environment.

At Di Natura we have managed to provide advise how people can make money from empty roof space. This is the main reason why investing in a Photovoltaic System is a smart investment.

Through photovoltaic systems one can have a financial return in an easy manner which is safe and requires low maintenance. By using or better maximising your roof potential, you would be practically “Flus mill-Arja”. The investment becomes even smarter when one considers the Government scheme where a 50% grant (capped at €2,500) will be available shortly. Realistically speaking, today a photovoltaic system investment offers a better return than any savings account.

The return on investment on a photovoltaic system is excellent where in a few cases one receives up to 33% return on investment per year (which is a far better and safer investment for your money). This thought has been shared by many in Malta and this has been clearly seen with the increase in photovoltaic systems on the Maltese Islands. Di Natura has been the first company to install onemegawatts of Photovoltaic in 2011.

This has significantly increased to 3 megawatts in 2012 and today the Target of Di Natura is to install 10 megawatts of photovoltaic installations.

No need to stress and mentioning that investing in such systems also means that environmental preservation. Today we are all aware of the rising CO2 levels and the melting down of arctic glaciers. Today we should not ignore these problems but on the contrary we can all contribute towards slowing down this phenomenon.

Current developments and technological advances made also photovoltaic prices fall in the last years making the investment not just an environmental issue but a money making machine.

At Di Natura,we have made a commitment to reconcile our commercial objectives with a strong statement on preserving the environment. We

by Godfrey Formosa

feel it is within our ‘power’ to make a difference, and we exercise this right by promoting products and solutions that take the most advantage of the laws of nature and contribute positively to long-term sustainable development. At Di Natura, we aim to contribute to human progress by seeking products that strike a fair balance between global access to heat, light, wind and water while reducing waste, emissions and discharges, thereby protecting and improving the natural environment.

The future is now...and our lives depends on it!

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TEU

Di Natura PV systems

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MARCH 2013 | THE ECONOMIC UPDATE

R&D

Challenges to invest in Research & Development Ing. David J. Dingli M.Phil.(Maastricht); MBA(Brunel); B.Elec.Eng.(Hons.)

Managing Consultant “Resource Productivity Consulting Services� & Assistant Professor, Operations Management, Maastricht School of Management, the Netherlands

David is the Managing Consultant of Resource Productivity Consulting Services, (R.P.C.S.), Formed in the year 2000, his consulting practice specialises in strategic development and operations management, while the corporate training arm focuses on management development programs on a broad range of topics. He has consulted & provided training in private manufacturing & service organizations as well as Government bodies.

He is also an Assistant Professor with Maastricht School of Management (MsM).The Netherlands and lectures at MBA level in: Operations Management, Global Supply Chain Management, Strategic Management, Entrepreneurship, & Innovation.

His international experience over the last 13 years reaches out to 27 countries, in Europe, Africa, Asia and South America.

Throughout his career he has delivered lectures and corporate training to over 5000 managers from more than 50 nationalities.

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MARCH 2013 | THE ECONOMIC UPDATE

R&D

Article written for: The Economic Update by: David J. Dingli – Managing Consultant – Resource Productivity Consulting Services

R

esearch & Development (R&D) could be defined as the practical application of knowledge and collective learning, gained through systematic and methodical methods and procedures that allow a company to bring to market new and innovative products hence creating competitive advantage for such a company.

In order to remain competitive in a fast changing marketplace and meeting the challenges of evolving preferences and expectations of consumers, ever increasing product life cycles and technological advances, new product design and development is often considered as a critical success factor for a company’s survival and future prosperity. In industries that are constantly evolving and maturing due to such continuous technological advancements, as in computer hardware and software, semiconductors, telecommunications, pharmaceuticals and biotechnologyto mention a few, participating businesses must continually revise their design and range of product offerings in order maintain a competitive edge.

A company’s growth strategy ina highly competitive worldrelies firmlyon its capability to derive superiorR&Dperformance to keep satisfying the market with novelty.

Today’s increasing demand for faster, more technically advanced and less expensive product development requires more effective upfront planning and a cohesive alignment between strategic planning, product research and product development and commercialisation capability.

The utilisation of the knowledge acquired during the research phase can be used to introduce new products or processes to the market but can also be used to improve existing products so as to increase a business’s existing market share. R&D also opens up new opportunities for organisations, which would not be available to them unless they delve into this realm.

The global R&D scenario The United States(US) accounts for approximately 40% of investment in all R&D in the industrial world. In 2011, this was close to 400 Billion USDollars. The US spends almost twice as much as the European Union (EU). Emerging

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MARCH 2013 | THE ECONOMIC UPDATE

R&D nations are also working hard to significantly boost their innovation capability. China has increased R&D investment by 10% annually over the last 10 years. It invested close to $150 billion in 2011, passing Japan’s $140 billion. Innovation however does not only stem from the amount of investment in R&D. Other contributing factors, and here, the US has a significant advantage, are: the scientific output from academic institutions and capital investment and growth in the scientific and engineering workforce. The infrastructural setting plays a significant role in boosting R&D performance. There is no denying that the world’s centre of gravity for research and technological activity is shifting towards Asia, which seems well on track to becoming the centre for science and technology by 2020.

With most manufacturing firm classified as Small and Medium Enterprises (SME’s) and operating in niche markets, it is important to understand what challenges they face when compared to large international firms in the innovation process. Increased internationalisation has allowed a number of SMEs to participate in the global markets where innovation is a pre-requisite for survival. The innovation process stretches beyond the technical capability, it is also a managerial and people dimension.

• Investing in innovation capability can only be realized when companies have: • Access to capital • Tools and resources such as skilled workers, quality programs, flexible manufacturing, cost reduction and timing capabilities.

• External networks and collaborative capabilities • Friendly government regulations and tax regimes.

• Incentive programs R&D in Malta Senior managers and investors do understand the importance of R&Das a means to keep ahead in the marketplace, however in Malta very few companies are ready to make the leap in this direction. The results achieved in the bigger companies around the world are well known and yet few companies are enthusiastic enough to be part of the leading and cutting edge companies in the industries they participate in.

In a recent survey I carried out over a large number of manufacturing companies in Malta, part of the data collected focused on the attitude and investment in R&D. Overall, the results are poor and in many companies completely non-existent. They tend to either rely on the R&D work carried out overseas by their parent 22 |

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Successful companies recognize the crucial importance of managing their R&D investments and processes.

organisations or are participating in very stable industries where the international scenario has not really changed much over the years in terms of the product offerings or the technology being used in such products. Others are just enjoying the revenues being generated by their present cash cow products but do not have a clear strategic plan on what to do the moment technologies or markets change (and they will!).

What was rather interesting to observe was that there are a few companies that are carrying out some amazing R&D in Malta. One company (with foreign connections) actually has a team of 20 engineers in this department which roll out a number of products each year. The strategic

Participating businesses must continually revise their design and range of product offerings in order maintain a competitive edge. advantage of this set up is something worth investigating in its own right. However, the comment made to me by the Managing Director summed it all up and went along the lines that“ if the parent company wanted to move out of Malta we could go for a management buyout and survive”. How many Foreign Direct Investment companies in Malta can say that? Most are still just production cost centres where no real strategic competences are being built.

The issue of Intellectual Property (IP) which is highly associated with R&D was also an interesting eye opener in understanding how senior managers tackle this issue. A few of the larger

companies, mostly with foreign connections go down this road and register their innovations. One company even engages a law firm in Germany who specialise in IP to manage the administrative process and monitor for infringements throughout the EU. A smaller 15 man company I interviewed also engages in R&D and sells its products to a large number of countries even outside the EU but chose not to register its IP due to the hefty expense, procedures and the ever so difficult task of monitoring for infringements. Despite all the benefits that theory lays out in favour of IP, there is extreme scepticism about itin the practical world mainly due to the high fees and problems of monitoring for infringements.

Strategy For R&D to have a chance of achieving returns for a company it must be strategically aligned with the goals of the organisation. Companies must prioritise and focus R&D efforts on opportunities today that will have a positive effective on corporate success in the future. Failure to align R&D investment with Business Strategy results in wasted R&D investment. In this respect it is difficult for companies that want to excel in “Cost Leadership” to strategically accommodate R&D investment. It conflicts with their more compelling goal of cost cutting. Even the most technologically advanced product innovations will experience commercial failure if these innovations are misaligned with the company’s business strategy.

So the starting point of any R&D effort must first achieve strategic acceptance and alignment.

Planning the R&D function requires key inputs from corporate management and marketing on a cross-discipline basis. The

MARCH 2013 | THE ECONOMIC UPDATE

R&D strategic challenge is to ensure that the ideas and products generated out of R&D can be leveraged in the market place for commercial success.

By directing innovation efforts to specific market requirements and product capabilities, the R&D team will be able to more clearly outline how product development relates to customer benefits. Here again, when many companies in Malta do not have their marketing departments based here, adds to the complexity of cohesion between R&D and commercialisation.

In essence, the entire company needs to be organised to ensure that the R&D plan is successfully executed. The company must therefore establish clear goals, effective drivers, accurate success metrics and commit adequate resources; both financial and human.

Management of R&D Department

Culture change

Methodologies and Tools

The overall corporate approach towards creativity and Innovation must also undergo radical change and a culture that is inspired by people’s ideas and passion for creating new and novel products and processes must prevail. So R&D is not about just setting up a new department – it transforms the mind-set of the complete organisation.

Senior management is faced with the task of creating a culture where innovation thrives; and this could take time. When this organisational strength is magnified, it can become a core competence acting as a source of competitive advantage.

Although every organisation should have a dedicated team working within the R&D function it would be wrong to create an environment where employees think and feel that it is only that division’s role to be creative. A culture where innovation thrives in every corner of the firm is so much more valuable than a culture which anoints a few experts as “the innovative ones.” Creativity must be encouraged and rewarded throughout the organisation and in this way informal participation in the innovation process is created. Ideas need time to be pursued and a new way of thinking about how employees spend their time must also be part of the change process. Freedom to work on areas of interest which lead toprojects of one’s choice must be embedded within the working environment.

An “Open Culture”, ensuring that learning is a central tenet in the corporate philosophy, and continuous improvement approach towards building agility, flexibility, freedom and cooperative teamwork must also be created.

The aim is to remove obstacles to culture change and create organisational conditions that are conducive to innovation.

There are a range of methodologies related to innovation. One is the MTOR process: Market, Technology, Organization, Resources – for facilitating a learning-based approach to “high uncertainty projects.” The methodology is integrated across the organisation.

There is ample research to illustrate that there is a gap between R&D spending rates and business results in terms of commercial success. What has also emerged from research is that very often lack of success is not a direct function of spending but has a stronger relation to the management (or mismanagement) of the R&D function itself.

Successful companies recognize the crucial importance of managing their R&D investments and processes. Effective planning is essential for aligning R&D spending with current and future business strategies, balancing product and process innovations, and leveraging intellectual property to its fullest potential.

Another being theStage-Gate process which is a conceptual and operational roadmap for moving a new-product project from idea to launch. Stage-Gate divides the effort into distinct stages separated by management decision gates.

There is no denying that the world’s centre of gravity for research and technological activity is shifting towards Asia.

Financing R&D R&D and its associated innovative activities are difficult to finance in a freely competitive market place. R&D has a number of characteristics that make it different from ordinary investment. In practice fifty per cent or more of R&D spending is the wages and salaries of highly educated scientists and engineers. Their capabilities create a valuable intangible asset in the form of the firm’s knowledge base, from which profits in future years will be generated. But due to the fact that this knowledge is “tacit“ rather than codified, as it is embedded in the human capital of the firm’s employees, this exposes the firm to a serious vulnerability as it is aware that this knowledge can be lost if these key employees leave or are fired.

Another feature of R&D investment is the degree of uncertainty associated with its output.

Key Challenges Firms willing to innovate will face a number of impediments, many of which are external to the firm. Following are nine major impediments firms new to innovation could face: 1. COST – Innovation costs are too high 2. RISK – Excessive perceived economic risks 3. FINANCE – Lack of appropriate sources of finance 4. CUSTOMER RESPONSE – Lack of customer responsiveness to new products 5. INFOMANTION (MRKT) – Lack of information on market 6. INFORMATION (TECH) – Lack of information on technology 7. SKILL – Lack of skilled personnel 8. REGULATION – Insufficient flexibility of regulations and standards 9. ORGANISATION (RIGID) – Organisational rigidities within company

As can be seen above not only must a firm overcome its own internal weaknesses to become an innovator but is also dependent of the right external environmental factors.

As explained earlier on; there isn’t always a clear correlation between R&D investment and profitability. This uncertainty tends to be greatest at the beginning of a research program or project, hence the advantage for applying appropriate methodologies such as Stage Gate which manages risk versus project expenditure.

The funding source for most consumeroriented companies’ R&D efforts comes from their retained earnings. These companies forego short-term profit in order to maximize long term gain by acquiring a dominant market share for their products that successfully incorporate leading advantages.

TEU

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MARCH 2013 | THE ECONOMIC UPDATE

TOP ENTREPRENUER AWARDS 2013

Recognising the Difference

by George Carol

Sandra Calafato

Company: Company: Environ Skin Care Distributor (Malta) Job title/description: Sole Agent / Distributor Professional Expertise: Aesthetician / Qualified Trainer Quote: If you do work you love, and the work fulfils you, the rest will come – Oprah Winfrey Sandra Calafato always kept herself updated with what is new in the beauty industry. Her curiosity about a certain skin care brand and their “Miracle creams” led her to become the proud distributor of Environ Skin Care. Her story is about the right attitude and the will to succeed.

TEU: Can you offer a few key lessons that any business owner can -- and perhaps should -take to heart?

SC: Life is a bowl full of opportunities, but there

are three things needed before you can turn that opportunity into a business. Firstly you need a talent; secondly you need an opportunity to come your way; and thirdly you need the courage to seize that opportunity.

Be proud of your product. I am so fortunate that I have something amazing to give my customers, that people feel my excitement and sincerity. I am never thinking how much money I can make, the

TESTIMONIALS

To Whom lt May Concern I have had the pleasure of knowing Sandra Calafato for more than seven years. Sandra was appointed as the distributor for Environ skin care in Malta early in 2005.

Before my first visit to Malta I was already amazed at how enterprising Sandra was, but when I visited her in Malta in 2010 I realised what a dynamic person she is and how effectively she spreadsthe concept of a “Beautiful skin for a Lifetime’’ our Environ slogan.

Sandra’s clients adore her and feel that she is the greatest skin care teacher and practitioner in the world. lt is obvious that the manner in which she conducts her business is highly ethical and beneficial to everyone she is involved with.

On my second visit to Malta in 20121was once again impressed by Sandra’s enterprise and marketing skills.

She really stands out as a person who has created her own opportunities and maximised not only her business but also enhanced her clients, enjoyment.

I feel that she is a magnificent entrepreneur and I am happy to know her and be associated with her.

Sincerely Dr Des Fernandes

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money will come. I am thinking, I can’t wait to share this fantastic product, that will give results and bring happiness to others. This is my success.

Success isn’t something that happens to you, you happen to it. Confidence in your work is crucial, hard work and commitment runs a close second.

TEU: The founders of some socially-oriented start-ups have begun focusing on helping fellow entrepreneurs, while creating new business opportunities for themselves. What are your views on this?

SC: I think this is a very healthy business idea, because new entrepreneurs can learn from successful entrepreneurs and from which both can benefit.

TEU: Failure is inevitable, but is there a right way to go wrong- is an open mindset and a willingness to learn from mistakes the way forward?

SC: I never went into business thinking failure was inevitable, I went into business with the attitude I will succeed, and learn from any mistakes that might arise.

TEU: How do you inspire others with your achievements and success?

SC: I have been working in the beauty industry for over 30 years and have been asked many times how did I get to where I am today. I usually relate to a past story. After leaving school I attended a beauty college in London. I decided then that I wanted to be the best, to shine, to stand out from the rest. I achieved a distinction in my final examinations and was awarded “Student of the Year”. I left college before my 18th birthday and anxious to get started on the next phase of my life, my career. My first job interview was with Steiners who owned multiple salons also on board cruise liners, which is what I decided I wanted to do. During my interview I expressed my wish, my interviewer laughed and explained I

would have to work at least four years land based in order to prove myself first. I am a fairly timid person by nature, but I remember feeling at the time, so confident, that I could do nothing wrong.

I politely thanked her and said well it’s your loss then. As I got up she asked me to sit again and phoned my college. When she got off the phone, she asked me whether I would be able to be in Sardinia in three weeks time, and that is how my career started. Managing a salon in a Trust House Forte Hotel in Sardinia.

TEU: Support and tolerance lead to growth and success. Do you agree?

SC: I want my clients to know they can count on me to constantly help them to push ahead of their competition, support is about giving professional advice and building trust through friendship.

Everyone is an individual for me, each with their own expectations, so tolerance I see as recognising the differences.

TEU

ENTREPRENEUR DETAILS Achievements and recognitions • Appointed distributor of world renowned Environ Skin Care for Malta/Gozo.

• Through hard work, integrity, commitment, passion for the product, and innovative marketing ideas, I have over the last 8 years turned Environ Skin Care a completely unknown brand hereinto one of the islands leading and result driven brands with a wide distribution all over the island.

• I have focused up to now on my business achievements but of course this is just part of who I am. I’m a single parent and sole provider for my family. I have needed to dig deep within myself to find a balance between taking my business success forward and simultaneously being a parent, providing all the needs for my family. I have financed beauty training abroad for my daughter and private schooling for my son. Sometimes, I have my “wobbly moments” when the commitment financially and emotionally feels heavy. Moments like these pass quickly and I am thankful for my success and family.

MARCH 2013 | THE ECONOMIC UPDATE

TOP ENTREPRENUER AWARDS 2013

Aligning Values and Giving Mark J Galea

Company: Quad Consultancy Job Title: Managing Director Professional Expertise: Human Resources and Leadership Quote: “Treat a man as he is and he will remain as he is; treat a man as he can and should be and he will become as he can and should be.”

Johann Wolfgang von Goethe Mark J Galea believes failure is inevitable and that it’s the best way to improve your processes and strategy, but maintains there are far too many variables to discuss this statement on absolute terms. Mark deems empowering employees within any given organisation and giving them the freedom to play to their strengths will increase their sense of ownership and commitment, which in turn will positively affect the organisation’s success.

TEU: Can you offer a few key lessons that any business owner can -- and perhaps should -take to heart?

TESTIMONIALS

MJG: I believe that business and business management are no rocket science. For some reason, people have over-complicated business management over time. These are my 12 commandments: 1. Always be ethical in your behaviour I have come to know Mark recently, however in these past months of working closley together on our temping agency, he has shown qualities of vision, drive, commitment and team work. He is a reliable team player who is open to suggestions and feedback, and this facilitates an easy approach to work that’s fun and inspiring.

Rachel Balzan Demajo, Head of Marketing and Sales, Demajo Group

2. Keep your business model, structures, policies and procedures as simple as possible 3. Ensure that your people are happy to do what they’re doing and to be working for and – most importantly – with you 4. Trust your colleagues and clients first…. then it will be easier for them to trust you, and to build solid trust in you 5. Be very prepared to take the necessary decisions – especially the most unpleasant ones 6. Involve your people as much as possible in the decision making process when making decisions that will impact them directly, and give them all the space, freedom and empowerment to challenge your decisions 7. Be objectively self-critical by focussing constantly on innovation and improvement 8. Base your decision-making process on your personal strengths 9. Be perseverant in the face of adversity 10. Treat your people in the same way you’d like them to treat your best client 11. There is only one way of doing business: the Win/Win way 12. The main objective of your business should be to deliver a service, or make a product; and not just to make money.

Money is just a natural consequence that is usually proportionate tothe quality of your product/service TEU: The founders of some sociallyoriented start-ups have begun focusing on helping fellow entrepreneurs, while creating new business opportunities for themselves.

What are your views on this?

MJG: I absolutely agree. This is, in fact, our

by Martin Vella

business model: it is based on partnerships with other providers who complement our portfolio of service.

The belief that in order to succeed in business, one has to be ruthless and willing to destroy all forms of competition or possible competition is something I vehemently abhor. This is diametrically opposed to the way I conduct my business. I believe that when people put their minds together, they achieve much more than what every person would have achieved had they worked individually. More importantly still, when people focus on synergies and creativity, they go a much longer way than others who waste their time on negative thoughts and destructive actions.

Needless to say, one needs to be very careful that both parties share the same agenda and ethics as partnering with “dodgy individuals/organisations” will inevitably lead to one’s downfall – especially in a small community like ours.

TEU: How do you inspire others with your achievements and success?

MJG: All my successes are dependent on other people’s input. I have never achieved anything by myself in my whole life; and because of this it comes natural to me to talk about “our success”.

In that case, I always share the rewards with the people who contributed to that success and acknowledge individuals accordingly. The most important thing is to build a strong and diverse team of great people around you, give them all the freedom they need to challenge you and perform to their best abilities. In the process, it is crucial that you give your team your full support and guidance when needed. It is only when a team of people work together that they achieve great results. This way, not only do you inspire others in your team to achieve the desired goal, but you also get inspired by those same members and there’s no stopping the high energy levels and adrenaline rushes.

TEU

ENTREPRENEUR DETAILS Company Turnover: Turnover doubled in the last 12 months Past Achievements: Partnered with the M Demajo Group to set up tempsinmalta.com Co-Chairman for the Academy For Chief Executives (Malta) Business growth achieved through client referrals Senior Partner with tempsinmalta.com Inspiration: Stephen R Covey

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TOP ENTREPRENUER AWARDS 2013

MARCH 2013 | THE ECONOMIC UPDATE

A Solution for the Solution Provider Ivan Bartolo

Company: 6PM Holdings PLC Job title/description: CEO Professional Expertise: Agile Mentoring and Coaching assisting Businesses derive benefit from their Business Projects and individuals participate on Agile projects as to derive personal satisfaction and personal growth and confidence.

Quote: There are no secrets to success. It is the result of preparation, hard work, and learning from failure. – Colin Powell

There is one proud fact at 6PM - it is that out of this business at least three other companies were generated. People who used to work with 6PM attained a quality level and felt confident enough to simply walk out and set up their own business.

Ivan Bartolo talks with The Economic Update to explain why it’s extraordinary that today 6PM works with these businesses, since in his opinion, this certifies that 6PM is a place where you can build a real career.

of medicines. Obviously I am not a clinician, but effectively one of the biggest challenges is monitoring the calibrations of the medical supply and the medicines they are actually taking.

Climate-HIV is an effective solution providing the necessary tools and environment for the clinician to be able to provide a superior service and a better treatment for their patients.

What makes it very special is that it is being designed by the clinicians. It is not designed by 6PM; 6PM actually took the fitting role as an IT company should, basically capitalizing on the knowledge and the experience of the clinician, making the necessary interpretation to produce a solution for the solution provider.

TEU: What is the reason that you have success by introducing Climate-HIV solutions with NHS, health services in the UK? What makes this a unique product and what is 6PM offering? Also, what distinguishes the success factor of 6PM in all of this?

TEU: You are basically breaking grounds?

IB: Yes, indeed since the product was developed here in Malta, through a very tight process, which is called Agile.

IB: Climate-HIV is effectively an application which can be seen as a clinical solution. It is used by clinicians, experts in their field, very well trained and experienced HIV specialists.

As everyone knows HIV is obviously a well renowned killer. And effectively one of the big challenges that any clinician has when treating a patient, is keeping track of the calibrations

IB: The major benefit is the provision of a historical medical record of a patient and the ability to provide the patient with the necessary calibration of their medical supply and the medicines that come through the process. Obviously the biggest one is that this could also lead to significant cost reduction in the production of medicines. Why? Because there are instances where an actual tablet

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TEU: What are the benefits?

needs to be re-manufactured, since it needs a different size or a different amount of dose. This led us to where we can actually produce medical tablets in compartments, where if you want, you may have a tablet or thousand. Due to the way in which it is manufactured, you can actually instruct the patient to take three blocks. So basically you are taking 300 out of the 3,000.

The whole point about Climate-HIV is that it is providing the clinician with a fantastic opportunity to offer what is most important: better treatment and better care for the patient.

TEU: What does this product mean to you?

IB: First of all, it is very unique and there is no real competition for it. Recently we issued a statement on the Malta Stock Exchange stating that three NHS trusts in the UK have purchased our solution, that is, Climate-HIV. Obviously that speaks volumes.

The way HIV is treated in the UK is not different from how it is treated in America or Africa. That is why the organisation’s next big push is to promote our clinical products. We have another solution besides Climate-HIV; called Strokepad and are seriously considering starting another one for hepatitis. It is on the drawing board but not yet confirmed. The reason we as a business want to go into these areas is because these are the type of solutions which can also be marketed in other countries besides the UK. In fact, we hope to demonstrate Climate-HIV in Italy shortly. We are hoping for the best.

TEU: Can you offer a few key lessons that any business owner can - and perhaps should – take to heart?

IB: The first thing which comes to mind is better no sale than a bad one. A bad sale can honestly come back to haunt you. Effectively when you are selling you definitely need to be honest, you need to admit the weaknesses in your product or your service and you need to be candid with the customer. That is one of the things I would advise any entrepreneur.

The other big thing I would definitely inform an entrepreneur out there is what I keep telling myself: if I had to be given the opportunity to give a thirty second lecture to students at Harvard, coming out of the business school, my advice to them would be the following: 1. Make sure you don’t have more than three loose ends in any time in your life, within your business;

MARCH 2013 | THE ECONOMIC UPDATE

ACHIEVEMENTS

Other than that, if I had to speak for myself and the way this business has grown from a €100,000 business to a €10 million business in thirteen years, effectively it is all about passion, perseverance and the ability to always find the positive in the negative. Unless you are going to embrace negative experience as learning opportunities, I do not think this business is for you.

Unfortunately many people in this world settle for good but what many people do not realize is that there is another destination besides good, it is called great. The gap between being good and great is the ability to make an assessment of yourself and see if you have the ability to live out of your comfort zone. By that I mean that I am one person who has for the last 15 years travelled a lot, so I am always on the edge, I am always out of my comfort zone.

I am out of my comfort zone because I believe in what I am doing. I always strive to get better and better and better. Another thing which I actually learnt in the UK, which I highly recommend not only to entrepreneurs but to everybody out there, is that if you want to improve you have to have the discipline so that everyday before you go to bed you ask yourself four very basic questions and document answers on a piece of paper. I have a diary next to my bedside table. The process is called the after action review. Effectively what you have to do is ask yourself ‘What have I achieved today?’

What have I learned today? What could I have done better today? What am I going to be doing different tomorrow?

The reality is that if you do not do it, you are never going to enable yourself to self develop. Nobody is going to care about your self development unless you do. In fact, as part of the next phase of continuing to grow this business and take it to the forefront, this is a discipline which I am now going to enforce on my employees. If they actually prove to me that they are doing their after action review they will be rewarded.

When you look at your after action review and check whether you have achieved anything or learned something you will then start to think: ‘What the hell am I doing, I am in my comfort zone. Let me get out, I am going out to achieve greatness’.

TESTIMONIALS

2. Make sure you have a healthy cash flow; 3. Make sure you are doing the right margins; 4. And the one I started off with - better no sale than a bad one.

TOP ENTREPRENUER AWARDS 2013

Achievements by Ivan Bartolo • Set-up the company 6PM in 2000.

• From 1 to 150 employees in 13 years • From €120,000 turnover to €10 million in 13 years • Listing on the Malta Stock Exchange in 2007 • Successful Rights Issue in 2011 • Deputy Chairman of the Malta Communications Authority 2008 – March 2013 • A Certified Practitioner, Trainer and Examiner in Agile • Served as International Business Development Director for the International Dynamic Systems Development Method (DSDM) Consortium between 1997 and 1999 • Successfully launched the DSDM Consortium in USA and Canada • Delivered Agile Project Management, Agile Practitioner, Facilitator and Agile Awareness training and mentoring to over 50 organisations including IBM, Fujitsu and BT • Worked on major Agile rollout projects with British Airways (UK), Verizon (USA), Manulife (Canada), Storebrand (Norway) and others • Highly involved with introducing Agile within the University curriculums and other major ICT colleges in Malta • Specialised in Business Analysis, System Analysis and IT management in general • Professional Facilitator • Creator/Innovator of : • QuickFocus • Quick Professional Mentor • Quick User Interface • Quick Business Intelligence

Testimonial by Leonie Baldacchino, Lecturer in Entrepreneurship, Creativity and Innovation University of Malta: “A prosperous enterprise in today’s competitive ICT industry can only be possible with a true visionary at the helm.

It requires a leader who constantly injects new life into the organisation, and whose passion and integrity inspire his team to strive for excellence.

This is 6PM. This is Ivan Bartolo.”

TEU

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MARCH 2013 | THE ECONOMIC UPDATE

NEWS MAKERS

Win 2 Club Class tickets to London Heathrow

HSBC Europe CEO joins HSBC Malta Board Mr. Brian Robertson, Chief Executive Officer of HSBC Bank plc, a Group Managing Director of HSBC Holdings plc and a member of the Group Management Board, has been appointed to the Board of Directors of HSBC Bank Malta p.l.c. (‘HSBC Malta’) as an Executive Director, subject to regulatory approval.

As CEO of HSBC Bank plc, Mr. Robertson is responsible for all the Group’s operations in the United Kingdom and Continental Europe. Mr. Robertson is also Chairman of HSBC Life (UK) Limited and a Director of HSBC Bank Bermuda Limited. Mr. Robertson has been with the HSBC Group for 38 years and has extensive international experience, having worked in the Middle East, Hong Kong, USA, the United Kingdom and Canada.

HSBC Malta Chairman Albert Mizzi said: “On behalf of the Board, I take this opportunity to thank Peter for his enormous contribution to the bank over the past 3 years.

And we are delighted to announce the appointment of Brian Robertson succeeding him. Brian’s distinguished career within the HSBC Group will allow him to bring his extensive experience to facilitate HSBC Malta’s growth, helping to increase the bank’s connectivity within the HSBC Group and internationalise its business.”

Laferla Insurance Agency Limited has teamed up with Air Malta to give away 2 Club Class tickets to London Heathrow; via a new online competition. To participate in the competition, visit either the Laferla Insurance Agency Ltd. Facebook page or the Air Malta Facebook page, where you may find the competition tab. One winner will be chosen at random on the 10th of May 2013 and asked a general knowledge question prior to receiving the prize.

TEU

TEU

6PM concludes three Climate-HIV sales 6PM Holdings plc has successfully concluded the sale of three CareSolutions™ Climate– HIV management solutions to trusts that form part of the National Health Service in the UK. The CareSolutions™ Climate product is a specialised Electronic Care Record (ECR) system for HIV medicine. It makes it easier and safer to prescribe and document patient encounters through the ability to write clinic letters, code diagnoses, extract data for audit purposes, service planning, commissioning and research. The continuous development of Climate-HIV is a joint venture between North Middlesex University Hospital NHS Trust and 6PM plc.

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Back in December, the Deputy CEO of 6PM Holdings plc Steve Wightman had announced, in an interview with The Times, that 6PM was close to naming a new client for its Climate-HIV solution.

CEO of 6PM Holdings PLC Ivan Bartolo said: “While in December 2012 we had predicted one sale of this unique product, we can confirm that we have been entrusted with three projects giving us a great head start.”

6PM Holdings plc has also won a competitive bid in the UK and is now in the process to be awarded a major Integrated Records Management (IRM) project with one of the UK’s largest hospitals within the NHS. The contract value is worth over £2 million. Full

details of the contract will be released in due course.

The CEO of 6PM Holdings plc said: “The climate at 6PM is vibrant and positive. With our achievements with the CareSolutions™ Climate-HIV sales, the IRM Tender, a great IRM sales pipeline and our prospects for our CareSolutions™ Strokepad solution, we are very confident that by the end of this quarter we will achieve 50% of our entire orders target for 2013. 6PM is also growing its annuity business.”

“Our challenge now is to deliver our sales, continue to positively take our brand to market and complete our 2013 sales target by the end of June 2013,” Ivan Bartolo said.

TEU

MARCH 2013 | THE ECONOMIC UPDATE

Having Your Heart in the Business

TOP ENTREPRENUER AWARDS 2013

Dr. Beverly Cutajar

Company: ThinkTalent Ltd Job title/Description: Executive Director Professional Expertise: Talent Management, Leadership Development, Coaching, HR Operations, HR Projects Consultancy Quote: I keep on making what I can’t do yet in order to learn to be able to do it. Vincent Van Gogh

Beverly Cutajar thinks it’s fundamental to figure out how to grow the business in the medium and long term, so a big part of the job is resource allocation – making decisions on where to spend money and time. She maintains that coordination with both internal and external partners is also an important part of the job.

TEU: Can you offer a few key lessons that any business owner can -- and perhaps should -take to heart?

TESTIMONIALS

BC: In a world where change is the only constant, it is inevitable for every leader to look into innovative ways to sustain or grow the business, through a clear set of values, a focused vision and by spending time away from the daily activities so as to focus on creativity. However there is another side to success... and that relates to where our heart is in the business. To fulfil ThinkTalent’s business needs, I have set myself on a personal journey to develop a business concept that brings about excellence in leadership, ensuring that people feel part of the bigger picture as well as the success of the business, both locally and internationally.

“I have had the opportunity to work with Beverly and witness her develop her career over the past decade during which she has conducted various development programs for my management team.

Beverly has a very broad base of knowledge in the areas of leadership and management, and a strong sense of self ability and pleasant disposition. Her ability to assist people and organizations to grow, develop and transform, is key to her success.”

George Micallef Managing Director - Sunroute Hotels Ltd.

TEU: The founders of some socially-oriented start-ups have begun focusing on helping fellow entrepreneurs, while creating new business opportunities for themselves. What are your views on this?

BC: The reason why ThinkTalent exists boils down to our personal mission to help others get the best out of themselves, together with a great sense of motivation and willpower to be out there and help businesses succeed. Our positive outlook to tap into talent potential and bring about excellence in individuals and organizations has certainly created other business opportunities for ThinkTalent, as organizations call for further support upon realizing that there is no limit to how much they can evolve.

TEU: Failure is inevitable, but is there a right way to go wrong, and is an open mindset and a willingness to learn from mistakes the way forward?

BC: Our greatest learning experiences in life are usually attributed to our biggest failures. Some important values are certainly openness and discipline, with other factors such as planning and post project evaluations. Our responsibility as leaders to reengage organisations and individuals following failure is to help them bring about fulfillment through positive actions and to drive people’s focus to achieve personal greatness by addressing existing gaps and uncovering strengths.

TEU: How do you inspire others with your achievements and success?

BC: Personally, I inspire people best when I share my achievements and successes as well as my failures. I also feel that my positive outlook in finding solutions particularly in tough times is another factor that inspires people. One of my

personal achievements that inspired other leaders is the balance between being results focused and people focused, proving that in most cases, results can only be achieved through people.

TEU: Support and tolerance lead to growth and success. Do you agree?

BC: Support and tolerance are two very important values that should be embraced in every organisation, yet not as standalone values.

One of ThinkTalent’s missions is to encourage organisations to create a strong performance culture, leading every individual to find purpose and meaning and understand his or her own responsibilities in contributing to the overall success of the organisation. Based on that, employees are supported through mentoring, coaching and other initiatives in addressing areas for development and build on respective strengths.

TEU

ENTREPRENEUR DETAILS Achievements Co-founder of ThinkTalent Ltd 1. Conducted various leadership workshops amongst senior management teams in Malta and abroad 2. Coached various leaders at senior levels both in Malta and in other countries 3. Completed a Doctorate in Social Sciences specializing in HR Development 4. Nominated by the President of Malta, in his capacity as Chairperson of The Malta Community Chest Fund, to sit on the L-Istrina 2012 Core Team.

5. Chaired and appeared as guest speaker in leadership and management conferences 6. Guest presenter at the University of Leicester and appeared as guest lecturer at the University of Malta

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MARCH 2013 | THE ECONOMIC UPDATE

CULTURE & HERITAGE

Launch of New Cultural Web Site Flimkien għal Ambjent Aħjar launches Cultural Malta a new web site focusing on Malta’s rich historical, architectural and cultural heritage

F

limkien għal Ambjent Aħajr has just launched a new web site www.culturalmalta.org, under the patronage of the Hon. Dr. Mario de Marco, Minister for Tourism, the Environment and Culture.

Cultural Malta has been created with the aim of raising awareness of Malta’s history, architecture and culture both locally amongst the general public, but also overseas in an effort to attract more cultural tourism to Malta.

In view of FAA’s work to research and write a full range of articles especially for students, its high standards and the wide range of topics covered, the website has been approved by the Department of Education as an official resource that will contribute towards the teaching of history and culture to secondary school students. It will also be one of the first non-Ministry of Education websites to be integrated into the Fronter e-Learning platform.

Culturalmalta.org has also been endorsed and is being supported by the Malta Tourism Authority, Heritage Malta, Air Malta and MIA with whom the site will be hosting reciprocal links, allowing visitors to any of the sites to seek more information about Malta and hopefully attract more cultural tourists to Malta “As a heritage NGO, Flimkien għal Ambjent Aħajr has long felt that there was a shortage of high quality information on Malta’s cultural heritage and architecture”, said Ms Astrid Vella, FAA co-coordinator and spokesperson.

“Our new site features both introductory and detailed articles as well as timelines and interactive features that are sure to be of interest to a very wide audience. Our intention is

Article written for: The Economic Update by Ann Caruana Montaldo

for the web site to continue to grow on a regular basis and we take this opportunity to appeal to the public who may wish to contribute articles or photos to contact us on info@ culturalmalta.org.”

The website includes a gallery where, in addition to featuring historic old photographs, FAA is commissioning and uploading photos of Maltese furniture, art, traditional tools and transport. This FAA initiative aims to build up an archive of items held in public and private collections, which will be available for viewing, by the public, for interest or research. This ties in closely with the work of Patrimonju Fondazzjoni Malti, a partner in this website, which will also carry many of Patrimonju’s ‘Treasures of Malta’ articles.

In addition to articles on history, architecture, art and culture, the Cultural Malta website will also feature heritage buildings that have been converted to commercial enterprises such as hotels, restaurants, galleries etc. In this way FAA hopes to support those who have invested in heritage buildings by directing more traffic their way. By highlighting such success stories, FAA aims to convey the message that converting old buildings rather than demolishing them makes good business sense.

In his speech the Hon Mario de Marco stated: “This impressive and innovative website really covers the three remits that I am responsible for as Minister for Tourism, Culture and the Environment. FAA’s

efforts to attract cultural tourists to Malta is very much appreciated, as culturalmalta.org reflects the Malta Tourism Authority’s drive to boost tourism in the shoulder months, and will encourage tourists to explore the wealth of heritage that lies beyond Malta’s traditional tourist routes. More exposure to our priceless heritage is indeed commendable, and serves as a contribution towards the enhancement of our islands’ cultural tourism.”

For more information or to contribute to CulturalMalta.Org please email: info@culturalmalta.org TEU

Background The Cultural Malta web site was designed and built by John Spiteri Gingell, Team Leader of the Systems and Databases department at MITA, who has worked in information technology both locally and overseas, for the past twenty-three years. In 1995 he was directly involved in establishing the then named Management Systems Unit (MSU) as Malta’s first internet point of presence and authored the first web pages for the government of Malta.

He has since combined this powerful platform with his passion for history and culture to implement several websites as a hobby. Most notably amongst these is MilitaryArchitecture.com, in collaboration with Dr. Stephen C Spiteri, which has quickly established itself as one of the internet’s premier websites on Military Architecture and Fortifications. His latest project has been CulturalMalta.Org, which he established in conjunction with Flimkien għal Ambjent Aħjar.

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MARCH 2013 | THE ECONOMIC UPDATE

IT SOLUTIONS

Access business solutions – Beyond ERP

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As well as a thoroughly Within every organisation there is a wideproven business accounting solution that is highly functional and easy to use, the Access range of people who need quick and easy modular system boasts a number of systemaccess to key business information. wide benefits and will give you a fully connected that can be constantly tailored and Data such as time recording, expenses platform and expanded –now and as you grow. From complex purchasing must be instantly updated Corporate Brief Business Analytics, Dashboards and KPIs, throughout the day, with flexible procedures Access solutions can help you to cut through and controls that this Access istoaensure consulting, soft-happens. high-level critical information and present it in ware and solutions provider, a way that’s right for you. The fully functional Delivering information where it is needed: serving the mid-market.

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their staff are able to exercise better control over daily tasks, demonstrating higher levels of professionalism to their customers and clients.

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The award winning Access range of business solutions streamline your company’s operations and facilitate business growth

Highly configurable with easy-to-define rules to ensure the right information is captured, routed and approved, the solution makes use of organisational workflows to capture internal procedures with the required authorisation levels built-in. Alerts, sent to the desktop or mobile device of your staff, speed and complete the workflow process. Each form can encompass unlimited levels of approval and authorisation.

Data such as time recording, expenses, purchasing, project control can be instantly updated throughout the day, within flexible procedures and controls to ensure this happens accurately and efficiently.

Access Workflow can be used across a broad range of industries including consultancy, telecoms and IT, maintenance, engineering, architects, construction, government and health organisations.

TEU

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MARCH 2013 | THE ECONOMIC UPDATE

IT

bits & bytes Who we are and what we do?

bits & bytes is an established company specializing in computer hardware, point of sale and communication equipment.

We have been providing service since 1990 and have secured a reputation of honesty and reliability by providing consistency in quality and support. bits & bytes combines the best characteristics for retailers, business clients and home users.

We offer a range of computer hardware, peripherals, networking and communication products, necessary for the efficient and smooth running of a computer setup in any environment - office or home.

Choice and Availability

The huge range of products we stock is constantly being updated and expanded. We supply cables, KVM Switches, networking products, tools, add-on cards, hardware accessories, USB and FireWire devices.

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We have on stock the widest range of cables on the island and also supply adapters, data switches/buffers, POS equipment, accessories, media-storage and printer consumables.

Customer Service– “We Care”

Our partners and customers know how highly we value customer relations. For the past 22 years, our firm has always stood by its word.

Our success is based on this.

“We care” simply means that we fulfill all of our promises: competent technicians, deliveries that arrive on time and products that perform as they are supposed to. In short, our customer service policy is based on certain fundamental values of honesty, reliability and trust which are not very common in today’s business world. bits & bytes provide services and repairs for all types and brands of IT equipment.

TEU

For more information please contact us at info@bitsandbytesmalta.com or view our website www.bitsandbytesmalta.com.

MARCH 2013 | THE ECONOMIC UPDATE

IT

CISO

The Voice for Information Security

Business leaders have come to realise that their organisations’ dependency on information technology (I.T.) is now more prevalent than ever argues Donald Tabone, as data and information have become core assets without which an organisation cannot survive.

H

owever the risks associated with I.T. are not always appropriately recognised and often not addressed in a holistic manner. The lack of appreciation of such risks by some business leaders is in fact prompting organisations to assign the responsibility of information security to I.T. departments who are in effect in conflict when they attempt to balance the need to open up systems for operational and other uses, versus securing systems and data from misuse. Furthermore, people in I.T. departments are often more focused on securing technology rather than securing data and information!

Over the past few years, the large number of high profile organisations that have had their systems compromised by hacker groups such as Anonymous, has made businesses worldwide recognise the need to step up their information security efforts. It has also become critical for business leaders to supplement their core competencies and experience with a good understanding of the information security risks that their organisations inevitably face. The reason is that all facets of an organisation make use of information, and have major dependencies on such information and on the I.T. that holds and processes that information. With this in mind, the role of the Chief Information Security Officer (CISO) is to provide a voice at the highest levels of an organisation specifically to give direction and to define strategies for the reduction of reputational, financial and regulatory risks that come from weak information security.

The role of the CISO brings with it a number of significant challenges and responsibilities including the alignment of new (information security) technologies with the business strategy by translating business and regulatory requirements to policy, technical standards and controls.

This alignment also brings with it a better balance of risk, priorities and the associated trade-offs.

There are however other challenges for such a role to be adopted by organisations – the most important of which relate to the human element.

The first refers to organisational cultures which often act as barriers to the introduction of such a role. Such barriers highlight the importance of consensus and action by the business leaders in order to instil a security mindset across the organisation and to implement distinct roles that segregate information security from I.T. departments. The second concerns the definition of the required skill-set that such a role demands.

Together with the technical abilities, the individual taking on the CISO

Article written for: The Economic Update by Donald Tabone Associate Director at KPMG in Malta

Donald Tabone is an Associate Director at KPMG in Malta and Computer Forensics lecturer. Mr Tabone joined KPMG with over 15 years experience in the field of information technology during which time he has held several technical hands-on and managerial positions with both foreign and local organisations. Besides holding a number of certifications in information security and computer forensics, Donald holds an honours degree in computing and information systems as well as a masters in IT and telecommunications law from the University of Strathclyde.

The role of the CISO brings with it a number of significant challenges and responsibilities including the alignment of new (information security) technologies with the business strategy by translating business and regulatory requirements to policy, technical standards and controls. role must be capable of understanding the relevant business issues and transpose them into a technical definition. In this respect the CISO would need to strike the right balance between security and usability without losing sight of the business / technical alignment.

It is imperative that business leaders recognise the importance of data and information for the effective running of their organisations, and treat such data and information as key corporate assets that need to be protected.

Business leaders have no choice but to assume responsibility for such digital assets and once this concept is ingrained in the minds of all executives it positions CISOs as trusted advisors to the business leaders.

The sheer volume of digital data that is today captured and generated by most organisations creates huge challenges for the design and implementation of such protection and the CISO therefore has a critical role to assist with protecting value. The difficulty is in the placement of the CISO within the organisational structures and this will certainly vary from one business to another, suggesting that the role is very likely to evolve as the risks associated with information and technology continue to evolve and increase.

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middlesea sme insurance Policy Embarking or growing a business venture involves hard work, dedication and ongoing investment. Your hard-earned achievement should be accompanied by an insurance policy to help you safeguard yourself, your enterprise and your employees. Middlesea offers sme iNsurANce - a business solution to protect your success and entrepreneurial accomplishments.

For your tailor-made package, contact us today.

if it matters to you, it matters to us.

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COM171012 699 JOB 34955 10/12

Property and Trade contents Public and employers Liability Loss of income money and Personal Accident Fidelity Guarantee equipment Breakdown Annual Travel cover Business emergency Assistance

MARCH 2013 | THE ECONOMIC UPDATE

SECTOR GUIDES

FinanceMalta launch new ‘Sector Guides’ ahead of schedule based on unprecedented international demand for jurisdiction information.

FinanceMalta, the public-private partnership set up to promote Malta’s financial services sector, have launched five new Sector Guides in response to heavy international demand for information about Malta’s international financial centre (IFC).

T

he Sector Guides are a part of the PPP’s initiatives aimed to attract business to Malta via the sectordriven guides under five key sectors, namely: Credit & Financial Institutions, Insurance & Pensions, Investment Funds & Asset Management, Trusts & Foundations, and Wealth Management. Given the previous editions’ popularity and the fact that printed copies had almost run out in the first six months, FinanceMalta initiated the process to issue new updated versions to be made available at the earliest possible time.

The new versions of the guides have been produced for distribution to prospective overseas clients and institutions as an essential reference source on Malta’s IFC. These new ‘Sector Guides’ will act as a key tool in the promotion of Malta’s international finance industry and assist in generating new business in respective sectors via the relevant associations and FinanceMalta members who not only represent large domestic institutions, but also foreign firms set up in Malta

and small businesses some of which are local and now diversifying their operations in the finance sector.

The ‘Sector Guides’ provide an accurate and comprehensive picture of the key elements that influence business decision makers including regulation and oversight, service providers, taxation, business environment and lifestyle and will assist in refreshing the perceptions decision makers have of Malta’s IFC. Financial services are an important contributor to the Maltese economy. Malta is a financial gateway to Europe as its finance industry offers a number of attractions including a stable economy, liquid markets, skilled workforce, cost-efficient business infrastructure, and advanced IT support.

Maltese households and the local business sector enjoy the benefits of a flexible financial services industry, which now employs around 10,000 people as well as generating benefits in other parts of the economy such as tourism, real estate and other general commerce.

The Minister for the Economy, Investment

and Small Business, the Hon Dr Chris Cardona, who was also accompanied by Dr Edward Zammit Lewis, Parliamentary Secretary for Competitiveness and Economic Growth, said that “ Malta’s financial services industry has managed to register significant growth over the past years driven by a number of factors. These include amongst others the presence of a highly skilled labour force, a comprehensive legal and regulatory framework as well as a developed operational and supporting infrastructure”.

Hon Cardona also went on to say that “in sustaining this growth momentum, we have to carefully safeguard the industry’s reputation that has been built over the years which is critical for this industry to grow and prosper going forward”. As to FinanceMalta’s Sector Guides, Minister Cardona said that these are clearly important tools and supportive of the various other initiatives that have been organised by FinanceMalta so far and those planned going forward to promote Malta as an international financial centre”.

TEU

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MSV Business Protection Plans Three new Business Protection Plans to help you with your business financial planning.

The MSV Business Protection Plans have been specifically designed to ensure the financial well-being of your business.

Key Person Protection Shareholder & Partnership Protection Business Loan Protection To find out more...

For more details about the MSV Business Protection Plans, you may contact either MSV Life on freephone 8007 2220, your Insurance Broker, any of our Tied Insurance Intermediaries or you may visit any branch of Bank of Valletta p.l.c. or APS Bank.

COM 160112

Key Person Protection

Shareholder & Partnership Protection

Business Loan Protection

Registered Address: MSV Life p.l.c., Pjazza Papa Giovanni XXIII, Floriana, FRN 1420, Malta.

Postal Address: P.O. Box 54, Marsa, MRS 1000, Malta. Registration Number: C15722 Telephone: (+356) 2590 9000 Telefax: (+356) 2122 6429 Email: info@msvlife.com Website: www.msvlife.com MSV Life p.l.c. is authorised by the Malta Financial Services Authority to carry on long term business under the Insurance Business Act 1998.

MARCH 2013 | THE ECONOMIC UPDATE

FUND MANAGEMENT

With Profits Investments

Reassurance in Uncertain Times B Y S T U A R T FA I R B A I R N

During periods of market volatility and economic uncertainty it is natural for investors to re-evaluate their investments and to seek some form of reassurance. With Profit Funds provide clients with valuable protection and certain guarantees, whilst smoothing investment returns over the medium to long term.

What is a With Profit Fund?

A With Profit Fund is a low to medium risk investment fund managed by an insurance company. This provides the potential for growth whilst protecting your savings from short term market volatility. Your money is invested in a wide range of assets thereby reducing the risk associated with investing in a single asset class.

Your investment value builds up with the addition of bonuses which are usually added every year by the insurance company. This annual declaration of bonuses is known as ‘smoothing’, and protects the investor from the ups and downs normally associated with investing in stock markets. Once added, these bonuses cannot be removed and are seen as one of the attractions of With Profits investments. The guarantee provided by the insurance company is that they will return your original investment (after any expenses) plus all declared bonuses at maturity, or on death before maturity.

The bonus applied to your savings will vary from year to year depending on what returns the insurance company has made and their forecasts for future returns. They will always aim to pay a bonus, even if investment returns are negative, and as such will usually retain some of the investment profits in good years in order to ensure they can still pay a bonus in the not so good years.

When your savings mature there is the potential for a final additional bonus depending on how well the fund has performed compared to the bonuses already added to your account.

As a result of smoothing, the investment risk of With Profits is significantly lower than a direct investment in a single asset class.

Where is your money invested?

A With Profit Fund is designed to provide

steady returns through a diversified mix of assets and a smoothing process. The fund will typically invest in a broad range mix of assets, including, but not limited to: • Equities • Property • Government and Corporate Bonds • Cash and cash alternatives As an example, the underlying fund could look something like this:

Cash 5% Government Bonds 40%

Property 10% Emerging Market Equities 10%

Developed Market Equities 20% Corporate Bonds 15%

In this example 60% of the fund is invested in what are generally considered low to medium risk assets, such as Cash, Government Bonds and Corporate Bonds. These assets are to provide an element of security and stability, whilst the Equity holdings are designed to provide potentially greater returns. The insurance company will review the amounts allocated to each asset class on a regular basis and may change the holdings.

Who is With Profits suitable for?

With Profits may be suitable for you if you are looking for returns which are potentially

greater than those received from an average bank savings account or term deposit but you want to take less risk than investing all your money directly into equity and bond markets.

You should be able to invest your money for at least 5 years and are comfortable that you won’t receive a fixed or guaranteed rate of return like a term deposit because the level of future bonuses is not known.

What returns can you expect?

Bonuses are declared annually once the insurance company has evaluated the performance of the fund and taken other factors into account, such as future projections, liabilities and expenses. Because of the smoothing philosophy the bonuses added should not vary too much from year to year. As an example MSV Life plc has recently declared a bonus of 3.1% p.a. for certain clients in With Profits for 2012 and will be paying a final additional bonus of 0.75% for each year the savings are held over 10 years at maturity and death.

What tax is there?

Under current tax legislation the insurance company pays tax on its investments and there is no additional tax liability in the hands of the investor. This means that the bonus rate declared above of 3.1% is net of tax, which is the equivalent to 3.65% (assuming a 15% withholding tax).

To find out more about investing in a With Profits Fund you should speak to an authorised intermediary or broker.

TEU

Mr. Stuart Fairbairn is Chief Officer Sales Management ‘MSV Life p.l.c. is authorised by the Malta Financial Services Authority to carry on long term business under the Insurance Business Act 1998.’ Com No. 200313

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MARCH 2013 | THE ECONOMIC UPDATE

EXECUTIVE INTERVIEW

Passion, Hard Work and Deliverance

BY M A RT I N V E L L A

marketed throughout the Mediterranean region.

That proved to be very successful too. We saw the potential in this area that I strongly believe can be developed into a thriving Marina Industry. I am also involved in the Manoel Island marina, so geographically it makes life here much easier, and obviously it was a strategic move to engage and meet any potential clients.

During an in-depth interview with Eddie Woods, Managing Director of Trader Marine Yacht Services Ltd, set up in 1991,we discover how Mr Woods established himself as one of the leading exponents in the maritime industry especially in the yacht chartering and brokerage industry. In this interview Mr Woods discusses his experience within the sector, how his business evolved and how he has seen the area develop and grow to become an important sector in Malta’s economy.

TEU: Can you please give us a brief overview about yourself, your operations and your recent come back with Trader Marine?

EW: Firstly, you ask me about my come back with Trader Marine. I never leſt Trader Marine, which was my company from 1991, and whatever I was involved with from then until now was always through Trader Marine. I think that is something which needs to be made clear in the sense of the connections I had, whether it was chartering, brokerage, or representation of an overseas company. We established ourselves in 1991, with an office in Msida Creek, during the same time the marina was being developed. We 44 |

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TEU: the last few years have been challenging for the industry, to say the least. How does this sector operate in such a scenario?

Eddie Woods going over a prized possession

always wanted to be present there and in a very short number of years we established ourselves as a reputable company in chartering, brokerage and yacht management. Eventually we moved on to Portomaso because we saw the opportunities there. We moved in before the project was ready and we spent a good five years there. With the brands we were representing and the way we were handling operations, it turned out to be a very successful venture. At the time we were consolidating our position in Malta, whilst aiming to gain a leading position within the luxury yachts

EW: They say it has. However, as in any other business, industry trends change. In this case the whole world has suffered from a prolonged recession. What happened was that most of the boat builders in Europe were obviously feeling the pinch. Having accumulated a large stock of boats that they needed to move to keep their operations going, they introduced a trend of huge discounts. The client was still there but demanding a bigger discount. So we had to harness our business line on that basis. Anybody that came to us wanted to list a boat to sell, so we had to listen and say, “We understand you spent your money on it and we will look into the market price and come backto you and say; this is what we think you should charge for your boat”. And so it started moving in that direction and clients were requesting more value for their money.

MARCH 2013 | THE ECONOMIC UPDATE

EXECUTIVE INTERVIEW

TEU

Eddie Woods reminiscing on one of his classic yachts

TEU: When you look at the different boat lines, was there a strategic decision to retain Trader Marine, and how do you share those compliments with Trader Marine?

EW: Well, having gained a lot of experience with worldwide renowned brands, this propelled us to seek representation of other quality brands which today is in the pipeline.

Basically this is a tribute I attest to Trader Marine as my passion for the business. I have a history of boating going back to my childhood. I was involved in racing since the age of thirteen, I have always wanted to be in this business, and the fervour is still there. I think more then anything else, my company

I was involved in racing since the age of thirteen, I have always wanted to be in this business, and the fervour is still there

has contributed in securing investors and brought investment to my country.

TEU: Tell us a bit about your present and future plans. Are there plans to take on any other boat lines? If not immediately, would you rule it out in the future?

EW: I will never rule that out. In fact, as we speak, we are currently negotiating with a first-class brand. We believe that our growthand the way

we look aſter the client starts from the daya client enters our office and until the day his boat leaves.

Therefore, we deserve to add a high-quality brand to our portfolio. What we are doing is waiting for the dust to settle. The boating industry in slowly returning back again and you can monitor this by the result from factories in Northern Europe, and also the south of Europe, like Italy and France where the smaller boats are being constructed.

TEU: What are your product line, services and portfolio?

EW: People normally know what I do but they do not know everything. When I told you that we started in 1991, we started doing brokerage, chartering and www.maltaeconomicupdate.com

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MARCH 2013 | THE ECONOMIC UPDATE

EXECUTIVE INTERVIEW

Corporate Brief The new Trader Marine office in the Strand, Gzira, located very prominently on the water’s edge, makes it easily accessible.

With this setup Trader Marine can offer that luxury experience that one would expect when walking in to a yachting office.

Today the company has personnel exclusively dedicated to service the various aspects our activity that includes new boats, used boats, charters, servicing, yacht management, crew placement and various other ancillary services.

Editor’s Note

Eddie Woods making a point during the interview

We moved here because we saw the potential in this area that I strongly believe can be developed into a thriving Marina Industry

yacht management. That was maintained and carried forward. Now, of course being involved in the Marina, it is another compliment to the achievement list. What we have also done in the past six months is that we have actually signed a contract with a reputable Chinese company producing pontoons. The reason is because I believe in marina developments and I am looking into this activity, not necessarily in Malta. The next trend is the development of marinas, so we want to expand on that and presently we have some seriously interested customers. We are preparing various offers and at the same time we are looking at other developments. Once the designs for the yacht marina are completed we get involved.

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TEU: What competitive advantage do you have over the industry?

EW: First of all, we are very meticulous about the products that we list. When a client wants to sell his boat, we test it, we value it and we make sure that it is suitable for our market. We also evaluate our clients and determine what thebudget is, finding ways to fit their needs and wants into that budget. Our clients range from couples, to families. We know that with our experience we will be very close to provide them with the right boat at the right price.

TEU: Which area is your strongest?

EW: Chartering is relatively big. We are tying up a lot of people to charter their boats since we specialise in exclusive charters.

Eddie Woods is synonymous within the boating industry, particularly brokerage and chartering. Enjoying a lifetime knowledge of the maritime sector, Eddie made his presence felt in two of the most important and prestigious marinas on the island. Mr Woods successfully established a partnership with MIPS and has offered RYA courses that includes Practical Power Cruising, Practical Powerboat, Theoretical Shore Based and Sailing courses. He is Managing Director of Trader Marine.

TEU: If I want to go away for a weekend in Sicily, I just call you and you will provide it with a skipper and everything?

EW: Just call us, tell us what you want and we will provide you with all you need. We have a gorgeous boat that comes complete with a skipper, crew, and chef. We maintain exclusivity and confidentiality. Last year I had an executive board meeting on one of the boats, were those attending, had to fly in from abroad together with a whole entourage of staff. So it could also be executive charters, not just a funday. But in that case, we still seek to put the enjoyment element into it as well!

TEU

MARCH 2013 | THE ECONOMIC UPDATE

E

ntities are investing loads of money to keep their systems updated with their current business needs. This approach is highly recommended as it shows a sense of maturity by these entities not to allow systems to dictate how business practices are carried. Systems administrators involved in such process tend to ensure that data in such systems is protected. Simple mechanisms such as data back up on a frequent basis and user authentication with access policies are typically found in requirements lists when an entity is requesting a new system. Security measures like these must be

IT SECURITY

learn from our ancestors who fortified our island against our enemies. Such fortifications resisted the test of time simply because the security of the island was part of a plan and not some feature that was introduced at a later stage. From such lesson, security of information should be part of a plan which is regularly tested against old and new threats. This is the only way to ensure that such security measures will provide the necessary information when your entity is under attack. It is of most importance to train and test your employees to identify social engineering attacks. Social engineering uses social skills

SECURITY Flawed by design

by Duncan Dimech & Ana-Marija Zafirovska

operated by the entity, but in most cases of data theft, it has been found that such measures were operated properly but the culprit was difficult to identify.

When considering information security, one must not just look at implementing security measures which by today’s standards are considered to be poor and with no means of shining some light to what caused such issue. We must

such as telephone calls, fear and the knowledge of the unknown factor to extract sensitive information out of your employees. This technique, master minded by Kevin Mitnick, tends to be very successful in giving away your intellectual property when operated with skill. Very recently some people managed to steal servers from an airport which is not being mentioned for security reasons, by making believe everyone that they

Mr. Duncan Dimech, the Managing Director of EXOR Group Ltd, earned his Masters Degree with the University of Liverpool, home of 9 noble prize winners, and specialised in Information Security. Over the past 15 years, Mr. Dimech has been involved on a number of projects for local and international business entities and is leading a number of IT research projects funded by the European Union. Mr. Dimech is a Member of the British Computer Society and a visiting lecturer at the University of Malta.

Social engineering uses social skills such as telephone calls, fear and knowledge of the unknown factor to extract sensitive information out of your employees.

are going to take the server to a work shop for further attention. This is a clear example of social engineering into play. The only way to protect yourself against such threat is to test people on frequent bases and to ensure that your employees are checking what they are being told with the right person.

Many invest heavily in protecting their information from outside attacks. These types of attacks are normally carried out by hackers, who either for fun or for benefit will try to obtain your sensitive information. Unfortunately, many do not protect themselves against internal threats that are carried out by employees intentionally or not. The use of a proper audit system on top of your business solution is the feature not featured in many requests. The trust in employees is in most cases exaggerated. A proper audit log can be used to identify bad intentions from a particular employee who has been trusted with your sensitive data. If some legal action has been carried out by an employee, a proper audit log can be used to certify or dump the employee’s comments. In extreme cases, the audit log can be passed over to the police or lawyers, should legal action be taken against the employee. It is therefore of most importance that the audit log be constructed in such a way that it shows all of the actions carried by the employee and itself be protected.

The importance of building a secure system from day one is never over stressed. When doing so, we are protecting not just over investment, but also the livelihood of our employees and ourselves.

TEU

Ms. Ana-Marija Zafirovska, the Business Solutions Advisor at EXOR Group Ltd, earned her Bachelor’s Degree in Sociology with the Ss. Cyril and Methodius University of Skopje, as well as a Postgraduate Certificate in Marketing with The Chartered Institute of Marketing. Ms. Zafirovska was actively involved in the journalism sector at International levels for the past 3 years and is a researcher on a number of European Union funded projects.

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MARCH 2013 | THE ECONOMIC UPDATE

BANKING

HSBC Malta delivers a positive performance despite global and regional challenges HSBC Bank Malta p.l.c. delivered a positive performance for the year ended 31 December 2012. Reported profit before tax of €95m increased by 8% or €7m over prior year.

The main factors driving the improvement in profit before tax were a strong performance from the life insurance company reflecting a recovery in investment returns and available-for-sale gains as a result of the repositioning of the bond portfolio. This performance has more than offset the non-recurring gains made in 2011 on the sale of the card acquiring business and the refinement in the methodology used to calculate the present value of in-force long-term insurance policies.

All the three main business lines, Retail Banking and Wealth Management (RBWM), Commercial Banking (CMB) and Global Banking and Markets (GBM), were profitable in 2012.

Speaking during the announcement of the HSBC Malta results, Mark Watkinson, Director and Chief Executive Officer of HSBC Bank Malta, said: “HSBC Malta has delivered another positive set of results that saw pre-tax profit increase by 8% with a return on equity of 15.4%.

This performance was achieved in spite of the continued travails of the eurozone, a low interest rate environment, heightened competition and softer demand.”

“The bank’s capital and liquidity position remains strong.” He continued: “Despite all the current global and regional challenges, HSBC Malta has a clear strategy in place of assisting our customers, and Malta, to access broader global markets with faster growth, simplifying our business, improving the customer experience and driving greater organisational efficiency.”

Net interest income increased by 3% to €133m compared with €129m in 2011. Net fee and commission income fell to €30m in 2012 compared with €34m in 2011. Growth in fee income for payments and cash management was more than offset by lower card fees following the sale of the merchant card acquiring business in December 2011.

During 2012 there was a greater focus on strengthening the connectivity between GB&M and CMB and, as a result, foreign exchange (FX) revenues grew by €1m or 11% year on year. HSBC Life Insurance (Malta) Ltd reported a profit before tax of €18m compared with €11m in 2011 reflecting a recovery in investment returns.

Net other operating income of €3m compared with €24m in 2011. A net gain of €4m was reported on the disposal of available-for-sale securities compared to a net loss of €2m in 2011. Net impairments reduced from €8m to €6m in 2012. This was principally due to the non-recurrence of a €4m impairment taken on Greek government bonds held by the life insurance subsidiary in its available-for-sale bond portfolio in 2011. During 2012, following the Greek bonds restructuring programme, all Greek debt exposure was sold and no Southern European country government debt is now held in this portfolio.

Customer deposits rose by €114m during the year and stood at €4,517m

at year end, reflecting an increase in both corporate and institutional deposits. The bank’s liquidity position remains strong with an advancesto-deposits ratio of 74%, compared to 76% at 31 December 2011. The bank strengthened its capital ratio to 12.4% which comfortably exceeds the 8.0% minimum regulatory requirement.

Mr Watkinson said: “Looking ahead, 2013 is likely to be another difficult year and while the Maltese economy has proved to be very resilient in times of crisis, we need to remain vigilant. I would like to take this opportunity to thank our staff, directors and shareholders for their commitment, hard work and support in 2012.”

The Board is declaring a final gross dividend of 7.9 cent per share (5.1 cent net of tax). This will be paid on 27 April 2013 to shareholders who are on the bank’s register of shareholders at 19 March 2013.

TEU

Some Performance Highlights • Profit before tax of €95m for the year ended 31 December 2012 – an increase of €7m, or 8%, compared with €88m in 2011.

• Profit attributable to shareholders of €62m for the year ended 31 December 2012 – up €4m, or 7%, compared with €58m in 2011, resulting in earnings per share of 21.1 cent, up 7%.

• Total assets of €5,886m at 31 December 2012, up €61m, or 1.0%, compared with 31 December 2011.

• Customer accounts were €4,517m at 31 December 2012, an increase of €114m, or 3%, compared with 31 December 2011.

• Return on equity for the year ended 31 December 2012 was 15.4%, compared with 15.7% in 2011.

• Cost efficiency ratio for the year ended 31 December 2012 improved to 48.7%, compared with 50.4% in 2011.

• Capital adequacy ratio of 12.4% at 31 December 2012, compared with 11.6% at 31 December 2011. Core tier 1 ratio of 8.3% at 31 December 2012 compared with 7.4% as at 31 December 2011.

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MARCH 2013 | THE ECONOMIC UPDATE

INSURANCE

Insurance coverage for SMEs by Middlesea Insurance

Embarking or growing a business venture involves hard work, dedication and on-going investment. Your hard-earned achievement should be accompanied by an insurance policy that helps you safeguard yourself, your enterprise and your employees.

For small and medium sized enterprises, insurance may be regarded as an extra or unnecessary expense, with no immediate returns. However unforeseen circumstances might lead to financial losses, which are generally much bigger than the relatively low amount which one pays to be insured.

Therefore, insuring your business whatever its size, is not a luxury and nor should it be considered as optional.

Middlesea’s New Insurance Policy for SMEs, is an excellent business solution to protect your entrepreneurial accomplishments.

The Middlesea SME insurance policy includes a number of benefits to ensure that your business is properly covered if something goes wrong. These include: • full flexibility to increase cover limits or add on cover to suit your business’ unique needs; • cover for Property, Stock and other Trade Contents, Public and Products Liability, Employers Liability, Loss of Income, Money and Personal Accident Cover, Fidelity Guarantee, Equipment Breakdown as well as an Annual Travel Cover for you and your employees.

• Business Emergency Assistance to cater for all your emergency needs 24 hours a day 7 days a week through our call centre.

This new product gives you the flexibility to customise cover according to your business needs and Middlesea will assist you in building the ideal insurance solution for you.

The SME Insurance policy is the ideal insurance product for those catering establishments, retailers, professionals, offices, clinics and light manufacturing, which sell goods or provide a service from their premises.

Middlesea Insurance p.l.c.(C-5553) is authorised by the MFSA to carry on both Long-Term and General business under the Insurance Business Act,1998. COM No191012 700 TEU

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MARCH 2013 | THE ECONOMIC UPDATE

ARTS & CULTURE

Music from Lady Flora’s Notebook Music from Lady Flora’s Notebook is the much-anticipated forthcoming event at the stately and exclusive Villa Bologna in Attard on the 17th of April at 8pm. The event will feature the Ġukulari Ensemble, which is committed to reviving Maltese heritage music.

T

he 10th Anniversary Celebration of the Ġukulari Ensemble will feature Maltese Airs from the notebook of Lady Flora Hastings, daughter of the Governor of Malta (1824-26). The event will highlight another facet of Malta’s musical legacy, which has been discovered and researched by musicologist Anna Borg Cardona and will be performed by the Ġukulari Ensemble.

The Ġukulari Ensemble was formed by Anna Borg Cardona in 2002, with the specific aim of recording music researched and published in the book A Musical Legacy: Malta-related music found in foreign libraries. The Ensemble has since continued to perform at various venues reviving music ranging from formal dances of the knights of St John to music of the Maltese town dwellers, lively airs of the humble folk, as well as għana melodies. In 2005 the Ġukulari Ensemble went on to record a second CD of Maltese traditional music entitled Doqqli Daqqa! (Play me a tune!). They have been ambassadors of Malta’s music in Budapest, Vienna, Bologna, Spain and Portugal.

The Ġukulari feel a firm commitment to the revival of Malta’s music and musical instruments, all of which strengthen Malta’s musical identity. The members of the group are Anna Borg Cardona, Silvio Zammit, Ramona Zammit Formosa, Bettina Borg Cardona, Anne Marie Camilleri Podesta’ and John Cassola. The musicians generally perform in elegant 18th century costumes.

The concert is being organized by Barocco Foundation with the kind support of Elmo Insurance, Marsovin Wine and Casapinta Exhibitions and Events. Tickets for Music from Lady Flora’s Notebook are on sale from Barocco Foundation at 20 euro. Barocco Foundation can be contacted on 7968 0952 or email at bookings@baroccomalta. com or from Ceramica Shop at Villa Bologna. Tickets to this exclusive event are very limited; interested persons are asked to book early to avoid disappointment. Guests will be invited to a complimentary afterconcert excellent glass of Marsovin wine!

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Wrong Advice?

Professional Indemnity Insurance Should you go to work without it ?

Tel: 2131 9000 Email: info@firstunited.com.mt Web: www.firstunited.com.mt Firstunited Insurance Brokers Limited is regulated by the Malta Financial Services Authority

an insurance broker to smile about

MARCH 2013 | THE ECONOMIC UPDATE

TRAVEL

Air Malta Launches New Website Air Malta’s first flight took off on 1st April 1974.. The airline has been instrumental in opening up and connecting Malta to the rest of the world, diversifying and presenting new tourism market opportunities to and from the islands.

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ir Malta has launched a new website which fully integrates its mission to be an ambassador and guide for Malta. The website also includes a major overhaul to both the flight selection process and user experience. The site takes advantage of the latest cloud technology and is built for scalability and resilience. It is a further milestone in the airline’s efforts to restructure operations and to build a platform for an improved customer experience. Air Malta undertook a review of the online purchase process with a view to make it simpler, faster and more secure. To celebrate this launch, Air Malta will be offering a 25% discount on its published fares to/from its scheduled destinations. This offer will only be available for sale through its portal www.airmalta.com. It will open today, Wednesday 20th March 2013 at 00:00 am and will be available up to Thursday 21st March 2013 at 11:59 pm Malta time. Tickets purchased through this offer are valid for travel between 01st April and 30th June 2013. Certain conditions may apply.

More information may be obtained by visiting Air Malta’s website www.airmalta.com. The airline Is also aiming to increase personalisation for all users. This has been achieved through the integration of social media, the identification of the location of users, and the consolidation of the airline’s databases. Commenting on this launch, Philip Saunders, Air Malta’s Chief Commercial Officer said, “We are very excited

to launch this website. This project provides a platform for more services to be offered to make travel with Air Malta easier and more convenient.

We wanted our site to be the best in class, with simple and clear navigation and by personalising the experience by offering the most appropriate content to each and every user. Above all, we aim to be a showcase of our Islands by offering insight into our way of life, providing information on attractions for visitors, and communicating all that is special about Malta and Gozo. airmalta. com attracts over 15,000 daily visits with some 10,000 online bookings every month.” The site was soft-launched three weeks ago. During this period the airline has undertaken various upgrades and improvements aimed to provide a more user-friendly and smooth experience.

This has been independently verified by Google Analytics, the industry’s indicator of a website’s performance. The site’s functionality and usability has also been independently tested by a London-based testing company and the positive results received have confirmed the improvement registered. Ian Castillo, Managing Director of ICON, the company entrusted with airmalta. com’s development said: “With the launch of the new site, Air Malta has taken a major stride forward in making information available to its customers. We have improved the user experience on the site and brought technology, usability and efficiency closer to the passenger using a Content Delivery Network. This ensures high availability

and performance for the international users as content is served from data centres closer to their locality. We are proud to have worked on this exciting project.” The website has been built from scratch with a new content structure and contains hundreds of new content pages promoting Malta as the premier Mediterranean destination that it is. New languages have been added and the site is now available in seven languages (Maltese, English, German, Italian, French, Russian and Dutch) while the settings change based on the user’s browser language preferences. It has been re-designed to offer a one-stop-shop to customers through a range of online booking and payment facilities that include Air Malta flights, a wide selection of hotel accommodation in Malta, and car hire.

This has been further secured since all financial data passes through secure and encrypted connections.

With integrated social media and businessintelligence tools, Air Malta will also be able to customise visitor experiences allowing it to better shape its product-offering and convert visitors into loyal customers. Local firm ICON (www.icon.com.mt) were selected following a comprehensive request for information and a request for proposals procedure. Both local and foreign organisations have competed in this process which was headed by a team from the airline’s Commercial, IT and Project Management Offices.

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MARCH 2013 | THE ECONOMIC UPDATE

INSURANCE NEWS

GlobalCapital plc strengthens senior management team further with the appointment of Reuben Zammit as Chief Financial Officer.

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he Sector Guides are a part of the PPP’s initiatives aimed to attract business to Malta via the sectordriven guides under five key sectors, namely: Credit & Financial Institutions, Insurance & Pensions, Investment Funds & Asset Management, Trusts & Foundations, and Wealth Management. Given the previous editions’ popularity and the fact that printed copies had almost run out in the first six months, FinanceMalta initiated the process to issue new updated versions to be made available at the earliest possible time.

The new versions of the guides have been produced for distribution to prospective overseas clients and institutions as an essential reference source on Malta’s IFC. These new ‘Sector Guides’ will act as a key tool in the promotion of Malta’s international finance industry and assist in generating new business in respective sectors via the relevant associations and FinanceMalta members who not only represent large domestic institutions, but also foreign firms set up in Malta and small businesses some of which are local and now diversifying their operations in the finance sector.

The ‘Sector Guides’ provide an accurate and comprehensive picture of the key elements that influence business decision makers including regulation and oversight, service providers, taxation, business environment and lifestyle and will assist in refreshing the perceptions decision makers have of Malta’s IFC. Financial services are an important contributor to the Maltese economy. Malta is a financial gateway

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GlobalCapital plc’s new CFO, Reuben Zammit

The new versions of the guides have been produced for distribution to prospective overseas clients and institutions as an essential reference source on Malta’s IFC. to Europe as its finance industry offers a number of attractions including a stable economy, liquid markets, skilled workforce, cost-efficient business infrastructure, and advanced IT support.

Maltese households and the local business sector enjoy the benefits of a flexible financial services industry, which now employs around 10,000 people as well as generating benefits in other parts of the economy such as tourism, real estate and other general commerce.

The Minister for the Economy, Investment and Small Business, the Hon Dr Chris Cardona, who was also accompanied by Dr Edward Zammit Lewis, Parliamentary Secretary for Competitiveness and Economic Growth, said that “ Malta’s financial services industry has managed to register significant growth over the past years driven by a number of factors. These include amongst others the presence of a highly skilled labour force, a comprehensive legal and regulatory framework as well as a developed operational and supporting infrastructure”.

Hon Cardona also went on to say that “in

sustaining this growth momentum, we have to carefully safeguard the industry’s reputation that has been built over the years which is critical for this industry to grow and prosper going forward”. As to FinanceMalta’s Sector Guides, Minister Cardona said that these are clearly important tools and supportive of the various other initiatives that have been organised by FinanceMalta so far and those planned going forward to promote Malta as an international financial centre”.

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Corporate Brief GlobalCapital p.l.c. (The Group) is the result of a merger in 2003 between two leading financial services companies: Global Financial Services Group p.l.c. (providing Investment Services) and British American Insurance Co. (Mtius) Ltd (providing Life and Health Insurance Services).

Over the years GlobalCapital, as it is known today, has enjoyed rapid growth offering its services both in Malta and overseas. The Group has developed into a leading financial services provider in Malta operating through its various offices in Malta. With such a varied portfolio of services, the Group is in a position to cater for the diverse needs of its clients.

MARCH 2013 | THE ECONOMIC UPDATE

HEALTH & FITNESS

Strengthening Your Willpower “Muscle” Do you wish you would more often choose the healthy items at the breakfast buffet and ignore the pastries? Do you want to be able to stay on the treadmill for the time goal you set, even though each minute is a little harder than the last? Making healthy choices like these requires willpower, the ability to ignore temporary pleasure or discomfort to pursue a longer-term goal.

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esearcher Roy F. Baumeister, PhD, has found that willpower operates like a muscle. It can be strengthened, but also easily exhausted. The points below will help you to better understand how your willpower “muscle” works.

Increasing Willpower According to the physiology of fitness, temporarily exhausting a muscle should lead to increased muscle size or improved ability to use fuel. The same is true for willpower.

Try controlling one thing that you aren’t used to controlling, and aim to do it every day.

Like physical exercise, this act of self-control can be uncomfortable at first, but over time it is no longer a struggle. The willpower muscle has learned a new skill, and with practice, the act of self-control is less likely to deplete willpower. If all acts of willpower reflect a single strength, then training any individual act of self-control should strengthen all acts of self-control.

The Limits of Willpower Research shows that willpower is inherently limited. No matter how physically fit we are, exerting ourselves inevitably leads to exhaustion.

The same is true of inner strength: self-control depletes willpower in much the same way that

exercise temporarily depletes physical power.

Because willpower is limited, each act of self-control is a win-lose effort, helping in the immediate situation but making us more likely to lose control later. Refraining from gossiping at work makes it more difficult to hit the gym after work. Resisting the impulse to splurge at your favourite store makes it more difficult to turn down dessert. This means that it’s important to set priorities and to give ourselves a break on the things that aren’t at the top of the list.

Conserving Willpower How can you make healthy choices without depleting willpower? Margaret Moore, founder and chief executive officer of Wellcoaches® Corporation, advises planning in advance as a strategy for conserving willpower. “You don’t want to be standing in front of the fridge saying you don’t have a clue what to eat. The weakest moment of self-control is when you’re hungry and tired. Too much choice tends to overwhelm us. If you have to make a lot of choices, you’ll deplete your self-control.”

Likewise with exercise, when you’re feeling strong, set up a weekly date to meet a friend at the gym or go for a powerwalk together. Commit and just show up—no choice and no willpower needed.

EDITOR’S NOTE Richard Geres is an internationally certified Personal Trainer and Nutrition Specialist specialising in weight-management and functional fitness. Over the last 18years he has helped thousands of individuals achieve slimmer, fitter and healthier bodies through lifestyle modifications and personalised exercise programmes.

He can be contacted for seminars and individual consultations through his website on www.richardgeres.com.

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Willpower Basics The idea that willpower is inherently limited doesn’t mean you’re doomed to self-control failure. A strength model of willpower gives you a realistic way to plan for success. Try the following: • Because willpower is limited, it’s important to set reasonable goals and priorities. Conserve your willpower for what really matters.

• Forgive temporary setbacks. A single mistake doesn’t mean you are weak. It may just mean you’ve already succeeded to the limits of your current ability, and now you deserve a rest or reward to restore your strength.

• Recognize that willpower is not “all in the mind,” and supply your mind-body with the fuel it needs to face life’s challenges. This fuel includes rest, a healthy diet and a steady supply of positive experiences.

• Understand how the demands of your job, family and other relationships may interfere with your ability to stick with a health or fitness programme. Look for ways to reduce stress to support any major life change.

• Conserve or bypass willpower by focusing on other strengths: planning, commitment and positive motivation.

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MARCH 2013 | THE ECONOMIC UPDATE LIFESCIENCE

Europe’s largest Nanotechnology Conference EuroNanoForum 2013 – to take place in Dublin

Excellent science, Competitive industries, Better society.

18-20 june 2013 – Convention Centre Dublin

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he 6th biannual conference, EuroNanoForum 2013, will gather experts and decision-makers of the nanotechnology community to Dublin this June.

EuroNanoForum 2013 is the largest nanotechnology conference in Europe and will focus on the impact of nanotechnology in improving people’s lives, especially in the key societal sectors such as health, energy and environment. The event coincides with Nanotech Europe exhibition and the Nanoweek Ireland.

“The conference showcases innovation as a driver of economic growth. New technologies arising from nano-science and their applications are presented and potential new end products are discussed”, describes Herbert von Bose, Director, European Commission, DG Research & Innovation, Industrial Technologies.

The EuroNanoForum is a must for companies looking to exploit or learn how to exploit the latest nanotechnology developments, as well as an opportunity for researchers to discuss their visions for European industries and research in the future.

Nanotechnology and nano-materials have already made significant inroads to a vast range of applications and are used in everything from everyday applications to the lifesaving - from sunscreen to chemical catalysts which keep carpets stain free, to antibacterial agents and ground-breaking nanoparticle screening which detects changes in a person’s immune system that reflect the presence of cancer and infection to increasing energy efficiency in processes and products in industry and everyday life.

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This is only the beginning. Nanotechnology has been earmarked as one of Europe’s Key Enabling Technologies and will feature prominently in the forthcoming EU funding programme Horizon 2020, which will, amongst other things, strengthen the socially responsible development of nanotechnologies.

The conference will showcase nanotechnology innovations to 1,200 delegates from 50 countries with high profile speakers from industry, government and research, such as Shell, Nokia Research Laboratories, Intel, Philips Healthcare and Max-Planck Institute among others, discussing the economic and technological impact of nanotechnologies on European growth. On top of the substantial conference programme, the event will also provide a platform for innovative demos and prototypes of nanotechnologies to delegates and media.

Frank Ryan, CEO of Enterprise Ireland, says the EuroNanoForum is a great opportunity to showcase industry innovations and expertise to nanotechnology experts from all over the world. “Enterprise Ireland is delighted to be organising the EuroNanoForum in Ireland during the presidency of the European Council,” he commented. “Innovation is critical for economic growth and nanotechnology is a sector which offers endless possibilities. The focus of EuroNanoForum will strengthen the all-important link between industry and academia – a link that will ultimately help to underpin Ireland’s economic recovery”.

Leonard Hobbs, leader of European nanotechnology research program at Intel, states ”the decision to host such a major event in Ireland is a testament to the excellent nanotechnology

The Nanotech Europe exhibition will host a market place engaging clusters, companies, startups and spin-offs as well as technology transfer organisations, universities, EU-projects and EUinstitutions.

MARCH 2013 | THE ECONOMIC UPDATE LIFESCIENCE

cluster which now exists in Ireland, as represented most notably by the CRANN center at Trinity College Dublin and the Tyndall center at University College Cork. Intel has been an active collaborator in both centers for a number of years and has developed some key learnings in technologies which could extend Moore’s law into the next decade”.

The Convention Centre Dublin is set to become an innovation hub during the three day conference. Commenting on what to expect Pekka Koponen, CEO of Spinverse Ltd says, “Europe’s leading companies and researchers are showcasing their innovations at the event.

Participants range from global leaders like Intel to fast-growing companies such as thinfilm innovator Beneq. All understand that next stage of innovation is driven by partnerships that are created right here. I am happy also to see so many national and regional clusters representing their members, promoting their exports and attracting foreign investment”.

The Nanotech Europe exhibition will host a market place engaging clusters, companies, start-ups and spin-offs as well as technology transfer organisations, universities, EU-projects and EU-institutions. There will also be a special Irish Showcase for innovative

Irish companies and the Magical Materials Exhibition showcasing the properties of a range of interesting materials at the cutting edge of materials science.

The conference is organised by Enterprise Ireland and Spinverse Ltd and supported by the European Commission Directorate for Research and Innovation.

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For further information, please go to: www.ENF2013.eu Courtesy of Pekka Koponen www.maltaeconomicupdate.com

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MARCH 2013 | THE ECONOMIC UPDATE

NEWS MAKERS

University of Malta launches mobile dental clinic project

FinanceMalta launch 6th Annual Conference programme with a world-class lineup of top international speakers.

FinanceMalta, the public-private partnership set up to promote Malta’s international financial services sector, have launched the programme for their 6th Annual Conference being held in Malta on 26th April 2013 with the theme “Competing in Global Markets: The New Normal”.

An outstanding international speaker lineup for the event includes leading industry thought-leaders, researchers, practitioners, academics and authors such as Robert Priester, Executive Director, European Banking Federation, Judith Hardt, Federation of European Securities Exchanges, Brian Healy, Head of the European Wholesale Securities Market, Ireland, Professor Anthony Fisher, Professor Drew D. Markson from the Thomas Jefferson School of Law, California, Maria Xuereb, Partner Deloitte Hong Kong, Peter De Proft, Director General of the European Funds,and Asset Management Association (EFAMA), Alexander F. Wagner, Professor of Finance and Financial Markets at the University of Zurich, Mario Portelli Partner, PwC Bahrain, and Richard Ogden, Partner Ernst &Young, UK, amongst others.

The high-quality international speakers have achieved outstanding industry contributions and continue to wield considerable influence within the global financial services industry, bringing further reputational strength to Malta’s growing onshore EU jurisdiction

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FinanceMalta, the public-private partnership set up to promote Malta’s international financial services sector, have announced the programme for the 6th Annual Conference together with a world-class lineup of speakers including Maria Xuereb, Partner in the Global Financial Services Industry Group, Deloitte Touche Tohmatsu in Hong Kong since 1988.

The Faculty of Dental Surgery, University of Malta, will be setting up a mobile dental clinic to reach out to the Maltese in their respective community and provide oral health advice and dental care.

A first in Malta, the project forms part of University’s health outreach programme and is supported by the University’s Reseach Innovation and Development Trust (RIDT).

The Good Causes Fund, Cherubino Ltd, Suratek Equipment and Barthet Enterprises are the initial sponsors however the University is also discussing with other potential sponsors to complete the project.

The mobile dental clinic will be visiting localities across Malta and Gozo. The aim is to reach out to all sectors of society, including the underprivileged communities, the institutionalised, all schools including special needs schools, orphanages, the homebound elderly and all those who would otherwise depend on a third party to be able to access dental care.

The clinic will be equipped with modern facilities and it will be manned by staff members of the Faculty of Dental Surgery together with final year dental students.

The University’s RIDT was set up to bolster investment in research and innovation on a national level. For the University of Malta to fulfil its commitment to future research, a much greater support is needed from many stakeholders.

One can donate and get to know more about RIDT by visiting www.ridt.org.mt TEU

This day-long annual conference is a unique opportunity for the industry, government, regulators and, importantly, FinanceMalta’s corporate and affiliate members to engage with worldclass speakers and practitioners to discuss developments in international financial markets, assess new business opportunities for Malta’s practitioners and the industry’s increasing potential for growth as part of Malta’s growing financial services jurisdiction, and network with peers. For further information visit www.financemalta.org TEU

The University Rector Prof Juanito Camilleri (second left) and the Dean of the Faculty of Dental Surgery Prof Nikolai Attard (first left) together with the Faculty staff members and the project’s sponsors during the launch of the mobile dental clinic project.

Information and Technology risk management isn’t just about security and regulatory compliance. It is about making technology play its part in delivering business goals.

All major organisations have a critical dependency on their technology and the trust they place in their systems is constantly under threat from a complex landscape of technology risks. The media headlines of cyber attack, system and project failure, regulatory and compliance breaches and fraud bear witness to how often this trust is broken usually with huge financial and reputation impacts.

We help our clients to identify, remediate and prevent Information and Technology failures in order to improve business outcomes.

• We bring technology risk awareness to the boardroom • We provide insight from data and embed genuine technology risk management into organisations • Our tailored services keep information assets secure, systems functioning and controls operating effectively For more information kindly contact; Eric Muscat Partner, IT Advisory Donald Tabone Associate Director, IT Advisory kpmg@kpmg.com.mt www.kpmg.com.mt

© 2013 KPMG, a Maltese civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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