The Business Observer Newspaper - 9th April

INTERVIEW

Issue 23

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April 9, 2015

Distributed with Times of Malta

e head of Yachting Malta, Godwin Zammit, will seek quick wins from new racing events until more information has been gathered on the longer-term projects. see pages 10 and 11 >

NEWS e Mrieħel industrial estate has become an incongruent mix of industrial activity and financial services centres – and various planned office developments will only heighten the contrast. see pages 5 and 6 >

Only handful of companies won’t make energy audit deadline Vanessa Macdonald A handful of companies may not make the December 5 guideline for mandatory energy audits, unless they get them going soon.

Charles Buttigieg, the senior policy officer at the Sustainable Energy and Water Conservation Unit, said that around 50 companies in Malta fall into the category of non-SMEs, which need to have the audits – every four years – as part of the Energy Efficiency Directive.

Malta is one of the most advanced member states in terms of

preparation, according to Ing. Buttigieg, who recently returned from a conference in Riga, Latvia, where he was surprised to see how far behind most were.

Two courses were already held for around 30 energy auditors with a third about to start, which will add a further 16, which will be listed on the Malta Resources Authority website. A seminar was also held last December for the companies involved, and the unit has been liaising closely with the Malta Business Bureau since last summer to make sure stakeholders are kept up to date.

The advanced stage of preparations is also helped by the fact that there are only 50 companies which qualify – with a headcount of over 250 and an annual turnover of over €50 million – although this formula is complicated if a smaller local company is part of a large overseas subsidiary. And some of the 50 companies could be groups with a number of subsidiaries.

“Because Malta is so small it was very easy for us to make contact with many of them. But unfortunately, some of them are underestimating the amount of time it takes to carry out the audits – months in

some cases – and they may not get them done on time,” he warned.

There are three sectors that are particularly affected: hotels, the manufacturing sector and transport – which includes not only trucking firms but any firms with fleets of delivery vehicles. The guidance notes specify that to qualify for the audit, the entity would need to use over 50,000kwh, which means offices would not need any.

“We want to make the wisest possible use of resources and focus on high energy users,” Ing. Buttigieg Continued on page 3

INDUSTRY FOCUS Survival is all about adapting to changing circumstances and this certainly seems to be holding true for the shipping industry. see pages 8 and 9 >

CASE STUDY Regulatory and legislative changes and public pressure are mounting, making life much tougher for auditing and advisory firms, but Deloitte CEO Malcolm Booker is confident they will adapt. see pages 12 and 13 >

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Companies not obliged to act on auditors’ advice Continued from page 1

Medavia seeks Air Malta collaboration Chris Cauchi Medavia is to seek a possible collaboration with Air Malta to operate routes on the Maltese national airline’s behalf.

This possible collaboration between Medavia and Air Malta had already been explored close to nine years ago without any success.

This attempt is part of a restructuring plan by CEO Ramah Ettir aimed at moving away from the focus Medavia has always had on Libya, instead expanding its reach to the whole of the Mediterranean basin.

Mediterranean Aviation (Medavia) was set up in 1978 as a joint venture between the Maltese and Libyan governments. Its prime focus at the time was supporting

the Libyan oil industry, which had oilfields in remote areas of the Sahara desert.

The company employs 260 people, 60 of whom are stationed at Tripoli International Airport in a secure enclave, although the building and hangar there have been almost completely ransacked. The company has kept these 60 people on its payroll, even though there is currently no work for them.

With a diverse fleet of aircraft, the company is not as competitive as Mr Ettir would like it to be. As a result, Medavia is embarking on a fleet renewal programme, and is talking to various suppliers, including Bombardier, Franco-Italian turboprop manufacturer ATR and regional jet manufacturers such as Italo-Russian consortium Superjet

“With a diverse fleet of aircraft, the company is not as competitive as CEO Ramah Ettir would like it to be”

ONE OF THE TWO BEECH 1900DS CURRENTLY IN THE MEDAVIA FLEET. THE AIRCRAFT ARE KEPT BUSY FLYING TO MITIGA IN LIBYA ON BEHALF OF TWO MALTESE TRAVEL AGENTS. PHOTO: RICCARDO FLASK

International and Brazilian manufacturer Embraer.

Medavia is also seeking to get a Libyan Aircraft Operating Certificate (AOC), something Mr Ettir believes will be accomplished by the end of this year. He acknowledged that getting traffic rights in Libya will be more difficult than ever before. In Libya there are 28 AOCs, although not all are active.

For the past three years, Medavia has always closed its books in the red, something that had never happened in its 36-year history.

Mr Ettir is confident that the company should break-even this year and begin registering a small profit as from the coming financial year.

Chris Cauchi is a freelance aviation correspondent.

said. Although there are exceptions, many hotels need more energyefficient heating and cooling systems, as well as water management.

On the other hand, most manufacturing firms use huge amounts of energy and therefore already have extremely advanced energy-saving systems and do audits.

“We have exempted those who already have audits from having to repeat them. It would not make sense to add an additional burden,” he said.

Surprisingly, although the auditors will make recommendations, the companies are not obliged to act on them.

“This is one of the reasons that we are working so closely with the MBB as it is not in the companies’ interest to pay for an audit and then ignore recommendations which could save them money in the long term.

Although there will be quick wins, other recommendations will require mor investment. Upgrading to more energy-efficient systems does not come cheap but Ing. Buttigieg said there are funds available from the ERDF which could be used to carry out the recommendations.

The unit is focused on getting all the companies through the process, rather than on waving a stick. But there is no denying that the stick is there – fines up to €100,000 with a daily fine of €600 until compliance – and the European Commission would eventually check on progress.

“We are confident that the companies will be ready in time – as long as they do not drag their feet!” he said.

The guidance notes drawn up by the unit are available at www. energy.gov.mt/en/Pages/guidancenotes.aspx.

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MRIEĦEL’S GLEAMING OFFICES CONTRAST SHARPLY WITH THE SHABBY INDUSTRIAL ESTATE. PHOTOS: JASON BORG

Vision needed for Mrieħel With investments amounting to hundreds of millions of euros planned for Mrieħel, key stakeholders are calling for a longterm vision to solve the stark contrast emerging between the gleaming offices and the shabby industrial estate.

A number of key financial services providers are already headquartered in Mrieħel – Bank of Valletta and HSBC Bank Malta, big four firms PwC and Deloitte to name but a few – as well as the Malta Financial Services Authority, which moved

there in the early 1990s as the Company Registry and expanded.

However, these occupy the periphery, with an industrial area in the interior, which is a mixture of private land and land administered by Malta Industrial Parks.

“This mixed ownership presents some challenges when managing the site. However, we believe that through cooperation and the adoption of a ‘common good’ culture the challenges can be overcome,” MIP chairman Tony Zahra said.

“ere are a number of as yet undeveloped sites which have become all the more exciting since the area was included in Mepa’s high-rise policy”

“Certainly MIP is willing and ready to take the lead provided of course the private sector owners are also in agreement.”

Apart from the long-abandoned former Dowty site (earmarked for an activity similar to the food production plants nearby) there are a number of as yet undeveloped sites (see map on page 6) which have become all the more exciting since the area was included in Mepa’s high-rise policy.

Continued on page 6

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‘Area needs to be regenerated’ Continued from page 5 Mrieħel currently forms part of the Central Malta Local Plan.

The policy map, amended in 2012, sets out a range of land use designations for the industrial area, including Malta Industrial Parks land to the east, sites for SMEs which occupy the bulk of the land area, commercial areas facing the bypass, and areas for offices further east on the boundary with the residential area. Land is also safeguarded for infrastructure, currently occupied by the Civic Amenity site.

In 2012, parts of the site for SMEs fronting Mdina Road were changed to mixed use for commercial and industrial uses. The acceptable land use facing the residential area was also changed to a mixed use area from offices.

In the 2014 Strategic Plan for the environment and development, a proposal was made to convert Mrieħel into an enterprise hub, allowing a wider mix of enterprises aimed at regenerating the area.

There are already two major developments planned by Allied Group and the Farsons Group, as well as applications by Santal Properties Ltd for a 13-storey building, and a €70 million multihigh-rise project by Gasan Tumas.

Will financial services and other knowledge-based services crowd out the industrial activity – and if so, will it be a natural process or should it be instigated?

MFSA chairman Joe Bannister believes that the move to higher value-added will happen naturally, although he does not believe that Malta, due to its small size, needs to have a defined financial services area, as larger jurisdictions do.

“For employees, it makes sense to have various pockets dedicated to different sectors as it means instead of having everyone commute to one site, they can find one closer to where they live, reducing traffic and commuting time,” he said.

“There is now a lot more quality office space than there was, which is very important as financial serv-

A MAP OF MRIEĦEL INDUSTRIAL ESTATE.

“e area is unique because of the space available and its access to major road networks. But it clearly needs to be upgraded” ices companies cannot wait. My opinion is that it is better to avoid greenfield sites and to gradually redevelop existing ones. There are many examples overseas of the service sector taking over revived industrial areas like docks and warehouses. But this is not a process that happens overnight.”

Farsons Group chairman Louis Farrugia believes in a more proactive approach, saying that a long-term vision for Mrieħel is required.

“We have submitted a number of ideas to the government which are actively being followed. We certainly feel there is scope for a holistic regeneration and rehabilitation of the area which we believe is well placed to develop into a financial and commercial district. Indeed, the success of our own vision to convert and reuse the old Farsons brewery into a business park is dependent and closely tied to the successful regeneration of the wider Mrieħel area,” he said.

A spokesman for HSBC Bank Malta, whose headquarters are on the outskirts of the area, said that the bank welcomed any initiative that helps further strengthen Malta as an international hub.

“Mrieħel is central to the island and would be a good location for further development and investment,” he said.

Joe Gasan, the chairman of the Gasan Group, also believes that there is scope in Mrieħel for unique developments.

“The Tumas and Gasan Group intend to develop an iconic commercial business park. Our land, situated on three roads and overlooking the Mrieħel bypass will become a destination in its own right.

“We are currently waiting for planning permission and, once in hand, we will be able to give more details on the time frame of the development,” he said.

The problem is that just behind the corporate developments on the outer edge of the area, there is an industrial estate made up of dozens of companies plagued by poor infrastructure.

“I believe that industrial activity and corporate space could co-exist,” Alllied Group managing director Adrian Hillmann said, pointing out that both his group’s printing press and Farsons’ brewing were a case in point.

“However, we do need to ask what kind of industrial activity.

The area is unique because of the space available and its access to major road networks.

But it clearly needs to be upgraded. To function as a real services sector, it needs shops, food and beverage outlets, and good public transport connections. This is why a long-term vision is preferable,” he said.

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INDUSTRY FOCUS

Getting from A to B The shipping industry has been consolidating over the years, with the global downturn forcing shipping lines to consolidate – much as airlines code share. The Freeport recently announced that ships from two new alliances – called 2M and 3Ocean – would be calling in Malta, but the alliances also have an impact on those which do not.

“It is not feasible for every line to have a ship visiting every port, so alliances allow them to extend their reach in a sustainable way.

This has had a positive impact on choices for the Maltese, as it means the options go well beyond the actual lines which call in Malta,” the sales and marketing director of Sullivan Shipping, Chris Sullivan, said.

Sullivan Shipping represents South Korean line Hanjin Shipping which does not operate to Malta but it recently acquired slots with UASC, which is in turn one of the lines in the 3Ocean alliance calling in Malta.

“We are hoping that this will encourage them to consider coming to Malta through the alliance,” he said.

Over its 126-year-history, Sullivan Shipping has added various services, including air freight and introducing trucking services through French-owned Vectory two years ago.

“The economy has become more complex and you no longer have manufacturers who only use one type of freight. We wanted to make sure that we cater for all their needs,” he said, referring to the recent rebranding which put

the focus on the customer, rather than the various services.

The number of cargo vessels calling in Malta has declined over the past 10 years. In 2004, 3,719 vessels called here, compared with 2,762 in 2012, according to Transport Malta. However, the amount of TEUs handled at the Freeport has almost doubled during that time, from 1.5 million in 2004 to 2.8 million in 2013.

This is partly due to the fact that ever-larger vessels resulted in an increase in the gross tonnage from 123 million tonnes to 208 million tonnes.

In spite of the consolidation and improved accessibility, the industry is still besieged by complaints that it is more expensive to get merchandise from the port

to one’s warehouse than from Europe to Malta. Joe Gerada, the managing director at Thomas Smith, said this is often due to the fact that the price for moving cargo is wrongly perceived to be related to distance covered.

“Think of food in a restaurant or the price of clothes: are they related to the material used in their production? Has anyone found that taxes, airport charges and the taxi to the hotel end up being more expensive than a cheap flight?

“So is it with shipping. The ultimate price is influenced by the kind or mode of transport, the handling in various terminals, depots and ports, as well as the equipment used. The price is, like anywhere else, ultimately

“e industry is still besieged by complaints that it is more expensive to get merchandise from the port to one’s warehouse than from Europe to Malta”

dependent on supply and demand. And where there is competition and efficiency, it works one way, and where there is protection of old practices or inefficiencies, it works in a different way,” he said.

He also warned that ‘freight’ was a vague term not always fully appreciated.

“It means moving the cargo once loaded on a vessel from port A to port B, discharging the container from the ship utilising heavy equipment many times, shifting, loading on to a truck, transporting to customer premises, placing a container on ground at customer premises (again by heavy equipment), unpacking that container, returning the empty box to a port terminal

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by truck, placing it on the ground at the terminal, renting the container for extra days. All this adds up. Probably the actual voyage – sailing on the sea – is the most straightforward part of the exercise, and given large vessels with large economies of scale gives results in cheaper unit cost.”

Joe Bugeja, the general manager of Sullivan Maritime, also had something to say about the port, insisting that the port reform of 2006 did not create the ideal changes and improvements.

“We believe that there is always room for improvement in the current port charges systems and practices. Valletta Grand Harbour still suffers from a number of bottlenecks such as, old practices, lack of discipline and procedures, gate limitations and lack of quay space to organise professional cargo operations. The bottlenecks are also directly related to the lack of will from entities who are responsible for changes.

He also believes that these changes would affect prices, noting that Sullivan Maritime, as agents for Grimaldi Group, ensured that the freight rates from Europe to Malta for roll on/roll off cargo were kept very competitive.

“It is unfortunate that the regime of port tariffs and procedures applicable at our ports in terms of port regulations is not applicable to all operators and this is causing a very clear ‘unlevel playing field’ as well as ‘unfair competition’,” he said.

Jonathan Vella, CEO of Express Logigroup, also thinks that the charges should be lower.

“Valletta Gateway Terminal charges are, in my opinion as an operator, exorbitant. While appreciating that they provide a service to the RoRo industry, the level of service currently provided does not add up to the rates being charged to the freight operator – who in turn pass them on to the end customer.

“On the other hand, sea freight is deemed more expensive (when also comparing road freight transit time and volume capacity) due to the dollar exchange rate, local

port and delivery charges. However, one has to keep in mind that the infrastructure at Malta Freeport delivers an efficient and effective service both for local and transhipment. Moreover, forwarding rates have decreased over the past decade,” he said.

Looking ahead, Mr Gerada of Thomas Smith believes that Malta could exploit its opportunities as a distribution hub for major retailers/manufacturers, with much of the infrastructure already in place.

“Bureaucracy is sometimes an obstacle but the main problem we have – and will probably always have – is that the local market is too limited to complement the hub, which needs to justify itself purely as hub, with no help from hinterland,” he said.

The distribution hub concept could also be very exciting for road freight, which has more than doubled, from 31,000 trailers to 77,000 between 2004 and 2012.

Kevin Filletti, the sales manager of Attrans, agrees that Malta has considerable potential as a distribution hub: “Malta boasts the third largest port in the

“It is unfortunate that the regime of port tariffs and procedures is not applicable to all operators”

Mediterranean and an unrivalled geographic position. This allows Malta to act as a bridge between the EU and North Africa, making it the most compelling candidate for a European distribution hub.”

One of the two main types of warehouses would be a retail distribution hub which would principally distribute goods to retail

stores. The other option could be a cross-dock facility whereby goods are stored and made ready for export to other destinations or countries.

“Once you know which type you want, the second – and more important step – would be to identify what products would be placed in the warehouse and whether the building will need to be specialised in any way to accommodate the needs of the retailers or manufacturers.

“A popular infrastructure model used is the spoke-hub distribution model. This is a system of networks, structured like a chariot wheel, in which all traffic will move along the spokes connected to the hub at the centre.

The hub will be centralised, and in this way any complicated operations, such as the handling of goods or accounting, can be carried out at the hub.

“The spoke system is simple and new hubs can be created easily. Nevertheless, careful traffic analysis and precise timing are imperative in keeping the hub operating efficiently.

THE NUMBER OF CARGO VESSELS CALLING IN MALTA HAS DECLINED OVER THE PAST 10 YEARS.

Carmelo Caruana general manager Peter Bonavia was more hesitant, saying Malta had the potential to become a key distribution centre for major retailers and manufacturers – but only if the infrastructure supporting such a hub were constantly upgraded and sustained.

“Malta needs far more dedicated warehousing facilities, scalable technological capabilities, improved transport connectivity and higher quality roads, and a free-trade zone for customs. If the authorities are able to line up these key elements, Malta can be advantageously positioned in the region.”

It is not only sea freight and road freight that have changed.

The shift to e-mail has had a profound impact on postal traffic. In the five years between 2009 and 2014, total mail fell from 12.8 million to 10 million.

However, as one door closes, another opens, in this case for parcel post.

With more and more people buying online, the number of parcels almost doubled, from 18,000 in 2009 to 32,500 in 2014, and there has also been a huge increase in the number of mail and parcels dispatched by courier, from 108,000 in 2009 to 174,000 last year.

As they say: if you can’t beat them, join them. Since many online vendors do not ship directly to Malta, Maltapost introduced SendOn, a mail forwarding service which offers delivery from the UK to Malta.

“We’ve seen significant growth in the use of this service and this aligns well to the increase and demand for e-commerce. As the sector is constantly evolving, Maltapost is vigilant through research and customer feedback to ensure that the product we offer continues to meet customer shopping needs.

“We have exciting new enhancements planned for the near future for our customers,” Maltapost chief commercial officer Mark Vella said.

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INTERVIEW

The quest for fair winds

PHOTO: MARTINEZ STUDIO

Godwin Zammit has a pretty good idea what impact sailing has on Malta. He has been on the committee of the Royal Malta Yacht Club since 2000, and is now in his third year as club commodore.

He has seen the money poured into the island through the Rolex Middle Sea Race, organised by the club itself, and the RC44 race organised by Yachting Events Ltd, estimated to have left €1.6 million in the economy. And yet, the club believes there is more that could be done to promote the yachting industry in general and to put Malta on the map as a yachting destination. It held discussions with Parliamentary Secretary for sport Chris Agius and Adrian

Said from Projects Malta. The result was Yachting Malta, which hopes to do for the industry what Finance Malta does for financial services.

“The government wanted a partner and chose the yacht club because of its involvement with yachting as a non-profit organisation with experience in organising big races,” he said.

“But it is not only about organising races; there are other things we could be looking at like conferences and promotional events.”

The €210,000 funding being provided by the government will be used to promote initiatives in the industry, but although the board will have to approve proposals, it

“e club believes that there is more that could be done to promote the yachting industry in general and to put Malta on the map as a yachting destination” already seems clear a fair amount of the money will be initially be spent commissioning studies.

The board has representatives from Projects Malta and the yacht club, as well as representatives from Transport Malta, the Malta Tourism Authority and the sports sector.

Yachting is, of course, much wider than sailing. Apart from races and visiting yachts, the sector involves superyacht refits and repairs, registrations, and crewing. One of the biggest problems facing Mr Zammit is where to start. Yachting Malta needs information on all these aspects before

decisions can be taken and one of the first jobs will be to gather available information and to commission studies to fill the gaps. It hasn’t even got a business plan yet, preferring to talk to stakeholders and see what is really bothering them as well as what ideas they have.

There is some information out there. The Parliamentary Secretary for Competitiveness Jose Herrera recently said that there was an increase of 13.6 per cent in the registration of commercial yachts over the previous year. There were 292 privately registered yachts of over 24m and a further 160 commercially registered ones as of December 2014.

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Mr Zammit, like many others, believes that affluent yacht owners are a superb target market for everything from property to investment.

“Too many people associate the impact of a race in a limited way.

Of course, an event like the Middle Sea Race brings money from bringing over the boats and equipment, as well as the crews’ flights and accommodation.

There are also the race entry fees and sponsorship from abroad. But the owners are also very influential people and the impact of their contact with Malta is not always immediately obvious,” he said.

“The race has a huge following and the annual Rolex 25-minute video of the event is aired in full, several times, on international news channels.”

There has long been demand for smaller visiting yachts, which has been partially solved by adding pontoons at Msida Creek and at the club itself. Mr Zammit sees that demand could grow considerably but he is more concerned about getting larger yachts here, especially for refits or for wintering. These much more lucrative visits are being hindered by a variety of issues, including that their crews may prefer to be in Palma or Monaco. A more worrying one is that superyacht captains – who tend to take decisions on these aspects – have given feedback over the years that Malta may not provide all the technical services they require.

Stakeholders already do a fair share of marketing, whether putting up a stand at the Monaco Boat Show or bringing captains down for familiarisation visits.

After all, considerable amounts of money have been invested, in marinas and refit facilities, as well as engineering and technical services and the Nautical Institute. Mr Zammit stressed that the intention was not to reinvent the wheel but rather to ensure that the at times fragmented approach could be consolidated to generate new momentum and ideas.

As an example, he mentioned the Marsamxett breakwater, a long-awaiting development that has now been shoved into the lap of the Chinese government as a possible infrastructural partnership.

“The breakwater would make the whole of the creek an effective marina as without it the area is not completely comfortable in all conditions, except for the area beyond the Msida breakwater.

“However, one of the things that we lack in Malta are berths at the end of people’s gardens.

“The original brief for Manoel Island had envisaged this and it would be interesting to see if these materialise.

“Very high net individuals often have yachts – a few applicants of the citizenship scheme have already joined the yacht club,” he pointed out.

Apart from yachts and their needs, Malta can also look into crew training, building on what is being offered by the Nautical Institute.

“The institute tends to train people for commercial shipping, rather than superyachts, which need a large element of hospitality. Maybe

“Apart from yachts and their needs, Malta can also look into crew training” GODWIN ZAMMIT. PHOTO: MATTHEW MIRABELLI

it would be an idea for the Institute of Tourism Studies to look into this...” he mused.

The services required for the management of large yachts also require considerable study. For

example, there are complex arrangements for the payment of Vat, particular when a yacht

is used for charter, and other legal implications of aspects like choice of flag and financing, which require careful handling. There is clearly a lot to be done.

Some ideas are already taking shape, the quick wins being more events, such as an inshore regatta similar to Palma V ela, and a J70 sailing class championship.

“Effort in this area are more likely to have tangible results in the short term while the other broader initiatives look further ahead.

“Yachting Malta has been set up for two years initially. Let us start with that and then take it from there,” he said.

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Auditors are not forensic investigators – Booker Changes are in the pipeline which will have a dramatic impact on the way that auditing firms handle public-interest entities (PIEs) as from December 2016 – but Deloitte CEO Malcolm Booker is very wary about how this could work in practice.

According to the legislation, auditors would have to enter into a proactive discussion of audit matters, described by Deloitte’s practice director Bernard Scicluna in

Deloitte’s Transparency Report for 2014 as “a new era requiring the auditor to originate information about the audited PIE, in contrast to the current situation where auditors opine on information generated by management or those charged with governance”.

But Mr Booker does not believe that an auditor’s role is to be a watchdog for creditors, employees or anyone else that may be impacted by a company.

“Some of these frauds are very complex and very difficult to pick up, unless you can do forensic accounting and investigate. But then you have changed my role”

“There continues to be a gap in expectation between what auditors see as their liability zone and what regulators and the public view as the auditor’s responsibility.

“There have been high profile court cases which delved into this – and no doubt there will be others. It is very difficult to bridge that gap. Sometimes the press does not help as there is incorrect information and headlines which are

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not technically correct, especially when companies fail, or there are issues within a company.

“Our responsibilities are defined by law: our statutory obligation in terms of the Companies Act is towards the company’s shareholders. Clearly from our point of view, if you extend our liability to the whole world, it makes our job very difficult as we would really have to consider whether we want to do that kind of work,” he said.

There have been cases where auditors were given information which was untrue or only partly true, in which case, he stressed, the auditors were victims of fraud, just as anybody else was.

“Certainly, if the directors are acting in a fraudulent manner, it is going to be very difficult unless you have someone who goes in there with a forensic hat on. Some of these frauds are very complex and very difficult to pick up, unless you can do forensic accounting and investigate. But then you have changed my role.

“An auditor would simply not take on that responsibility unless he was compensated for it – and even then it might not be sufficient as you have exposed him to liability for everything.”

The rulebook for auditors is changing all the time. The current handbook is a staggering 900 pages long – and it keeps changing.

“It is not impossible but I do not think people appreciate how tough it is. Standards are getting more complicated and the bar is being raised all the time, all the time, all the time,” he said.

Audit is only part of Deloitte’s revenue – 31 per cent of its €21 million in 2014 – compared with 52 per cent for tax and legal services and 17 per cent of financial advisory services. Work for clients overseas is also increasingly important, representing 63 per cent of its revenue.

“Deloitte has always focused a little bit more on the prospects outside Malta rather than in Malta, and this year was no exception. We see huge opportunities doing work here for international

clients overseas as well as getting international clients here. It is all about selling product Malta. If Malta can offer them a good package then they are prepared to use Malta as a base. I am very optimistic and I think the perception outside Malta is good on the whole,” he said.

“Having said that, far too often people we speak to bring up the World Bank report which talks about the ease of doing business in the country. We really need to do something about that as Malta is not where it should be I know it is on the government’s agenda; I just hope they manage to do so sooner rather than later as it makes you feel very uncomfortable when you try to sell Malta and they bring it up. For me, improving our ranking is a priority.”

The tax advisory business is also becoming more and more complicated, with public outcry mounting as cases like Swissleaks bring into question

the role of banks in tax avoidance, and the European Commission trying to find ways to close the tax loopholes which have allowed global firms such as

Starbucks, Google and Amazon to avoid paying tax by carefully engineering their tax jurisdictions.

Mr Booker said there was a clear distinction between tax avoidance and tax evasion – and that the comments in some the file reviews relating to Swissleaks were clearly indicative of the latter. But he agrees that the debate has generated a call for tax morality.

“Irrespective of what the law permits you to do, is there an argument that asks whether it is the right thing to do?

“Certain aspects of tax planning are legal but are deemed to be very aggressive. People are now saying is there a moral argument in favour of paying your fair share of tax. Obviously that gets very complicated as it is very subjective.

At the very least we could have a bit more guidance as to what constitutes ‘tax morality’, what people feel is ‘crossing a line’,” he said thoughtfully.

Asked whether there might be any implication for Malta, he said it all depended on how aggressive tax practitioners were being in the advice given to foreigners considering relocation to Malta.

“There are various degrees of aggressive tax planning and the most extreme might not be

“e fundamental rule is that as an auditor you must be independent of your client”

DELOITTE CEO MALCOLM BOOKER

sustainable. Having said that, I would like to think that the Big Four in Malta do not give aggressive tax advice,” he said.

Regulators are putting more and more pressure on audit firms. Over the past few years, more and more limits were put on the amount of revenue a firm could derive from non-audit services if it were also the client’s auditor – particularly for PIEs. Deloitte said in its recently published transparency report that 39 per cent of its tax and financial advisory revenue came from non-audit clients.

“The fundamental rule is that as an auditor you must be independent of your client. The view was that if you derive a substantial amount of fees by providing other services to the audit client, it may impair your objectivity,” he explained.

With all these legislative and regulatory changes underway, Mr Booker believes that Deloitte will look very different in five years’ time.

“We are going to be more international than we are today. I think we will be stronger and more important as players within the financial services community as well as the community in a broader sense,” he said.

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e Business Observer is Malta’s leading business newspaper distributed with Times of Malta every fortnight.

Editorial Vanessa Macdonald, Head of Content (Business), Times of Malta.

EDITORIAL

Scoring an own goal on football rights Go has been proudly announcing that it won the exclusive rights to the UEFA Champions League for three more years – but its rival Melita is clearly less than amused.

It recently argued ( Sunday Times of Malta , March 29), that the fragmentation of sports content was creating an unnecessary burden on consumers. This argument has been simmering for years, since consumers found that they would have to subscribe to both providers if they wanted to watch all the football.

But is this only a consumer matter? Is there a sound business argument for or against this fragmentation?

When Go first started bidding against Melita for sport, there was a sound business case. It was trying to carve a market out of one that had been dominated by Melita for years.

With most channels, Go’s offering was matched by what Melita already did. It was only on sport that it could have such a compelling offering that customers would be lured from its rival. The point was not to make money off the sports channel itself – it almost certainly did not – but to get clients to switch provider. It was all about the bigger picture, pun intended.

Indeed, the auction process was a bloody one, with Go having to guess how desperately M elita wanted the rights – and ensure that its bid was comfortably ahead.

But this time around, the market is more mature. Does Go really need the exclusive sports content?

In June 2010, Go had 52,499 subscribers, compared with Melita’s 90,687, just 37 per cent of the market. By June 2014, the gap had narrowed considerably. Go held almost 47 per cent of the market, with Melita’s hold whittled down to 53 per cent.

It would appear that Go did not want to take any risks and had to assume that Melita would this time bid for the rights. This means it probably once again paid through the nose for content whose cost it would never hope to recoup through the premium paid for the sports channel.

Is the market saturated? Between June 2008 and 2010, the total number of TV subscribers grew from 129,801 to 143,186. In the two years until June 2014, the number only went up by 109, to 149,158.

A Broadcasting Authority survey in 2013 found that 32.6 per cent of the audience did not watch TV at all, over 60 per cent of them aged under 50. The sample was too small to reach any conclusions about sports content specifically – only 0.3 per cent were listed as watching Go Sports – but it is clear that there are thousands of people who are not willing to pay extra for premium content and who switched to Dreambox or satellite.

Melita has gone on the warpath, and has once again brought up the consumer aspect, calling on the authorities to intervene and establish a TV rights sharing protocol along the lines of those in other European jurisdictions.

If that happened here, Go would have no interest in bidding without a commercial gain from winning the rights. Likewise, Melita would be a fool to bid, knowing that it would have to sell the rights to Go. Taking this argument to the extreme, would we end up with no one bidding?

Is this in the consumers’ interest? One option would be for Melita and Go to submit a joint bid to both air all the football, admitting that there are now other more compelling reasons for customers to remain loyal.

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BUSINESS OPINION

Unclogging traffic arteries

Philip von Brockdorff Have you ever stopped to think about the impact of using your car?

Unlikely. What is probably weighing on your mind is how to avoid the heavy traffic and the quickest route to get to your destination. No doubt, each time you stop at the petrol station, you realise you’re spending hard earned cash to fill in the tank with petrol or diesel. That is money you could have spent elsewhere or perhaps saved.

But let’s face it. Given the chance, we would all like to own a car and that is the first thing our younger generation thinks of buying as they approach the age of 18.

Far-fetched? Not really. I recently asked my University honours students if they owned a car. They all do. True, they are fourth year students but their average age is 22, and you would not ask the same question in any university abroad and get the same answer.

The simple fact of life here on this tiny archipelago is that we are obsessed with our car. And we also tend to use cars intensively – which, of course, explains why our

roads cannot cope with the everincreasing number of cars.

Unsurprisingly, our rate of car ownership is the third highest in the European Union and the effects of this are beginning to tell.

Most of these effects are, as we economists define them, indirect or hidden. We do not necessarily pay a market price for them but they are costs nevertheless – an example being pollution.

According to the study I co-authored with Maria Attard and Frank Bezzina, colleagues at the University of Malta, these costs account for 4 per cent of our Gross Domestic Product. This is no small matter. In

THE 2015 COUNTRY REPORT ESTIMATES THAT WE LOSE ON AVERAGE 52 HOURS A YEAR ON OUR ROADS.

2012, the cost of accidents, air pollution, climate change effects, noise pollution and gridlock amounted to €274 million. These are all costs caused by our use of the car.

At this rate – and assuming the rate of car ownership reaches a peak at around 2030 – the external costs will rise to €317 million in 2020 and €322 million in 2030. Should we ignore these costs and do nothing?

So far that is precisely what we have done but with more cars on the road (at least till around 2030) driving on our roads will virtually grind to a halt.

Unsurprisingly, the 2015 Country report* published by the European

Commission in February identifies road traffic as major challenge for the Maltese economy .

Sooner rather than later, we need to become fully aware of the indirect and hidden effects I referred to earlier.

These effects impact our quality of life, our health, the climate, the value of our properties and increase the cost of doing business and of car use, as we spend more and more hours each year in gridlock.

The study estimated that we lose on average 52 hours a year on our roads. And that’s not factoring in delays at traffic lights and delays caused by accidents.

Of course, nobody in his or her right senses would suggest a ban on new or second-hand car sales but we cannot go on ignoring the facts.

We need solutions.

The study simulates a number of recommendations which could ease the current levels of car use and as a result reduce the external costs of transport. These recommendations include a modal shift of 20 per cent to public transport, fewer parents ferrying their kids to school and relying more on school transport, and more people buying electric cars. Though it is easier said than done, we really need to give public transport a second chance.

No effort should be spared by the new operator and the government to make public transport both reliable and efficient.

We simply have to get it right since without this modal shift, other measures to control traffic and congestion will not be enough to reverse the current trends.

So the next time you are about to turn on the engine of your car, stop and think about the consequences and consider whether you really need to use the car at all. You would contributing positively to reducing pollution, saving on time and fuel wasted, and last but not least reducing high stress and noise levels caused by congestion. *The study can be downloaded from http://ec.europa.eu/malta/

Philip von Brockdorff is the head of the Department of Economics at the University of Malta.

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APPOINTMENTS

Chamber elects president Anton Borg is the new president of the Malta Chamber of Commerce, Enterprise and Industry, elected by the new council.

Mr Borg is a past president of the Malta Federation of Industry which merged with the Malta Chamber of Commerce and Enterprise in 2009.

He also served as deputy president of the Malta Chamber in the outgoing council and represented the Malta Chamber on numerous boards including the Malta Council for Economic and Social Development, Malta Enterprise, Malta Industrial Parks and Malta Business Bureau, among others.

A certified accountant, he sat on the council of the Malta Institute of Accountants for 14 years, serving as president for two years. Mr Borg is a director of Elepac, Meritlink and Eurosupplies Ltd.

New appointment for KDM Travel The KDM Group of Companies has appointed Karl Schranz as general manager of KDM Travel.

He will be overseeing the operation as a whole, including the recently acquired Active Travel and the affiliation with HRG Group Worldwide.

Mr Schranz comes with extensive experience in the tourism and hospitality industry. Based at the group’s head office in San Ġwann, he will be working closely with the branch managers and travel consultants.

JZT appointed e Point chairman Joseph Zammit Tabona has been appointed chairman and nonexecutive director of Tigné Mall.

Mr Zammit Tabona is the special envoy to the Prime Minister for investment promotion. He has previous served as the Maltese High Commissioner to the UK, is the chairman of Valletta Cruise Port and a non-executive director of Medserv.

New CEO for Medavia Ramah Ettir has succeeded Abdulrazagh Zmirli as the chief executive officer of Medavia. Mr Zmirli was at the helm of the company for more than 24 years.

Mr Ettir qualified as an aircraft engineer in 1981 and worked for Libyan Arab Airlines and another airline before he joined Afriqiyah Airways in 2001 and climbed through the ranks to CEO. During the 2011 revolution, it was alleged that Afriqiyah aircraft was being used to transport mercenaries from West Africa to Libya and Mr Ettir immediately resigned.

Mediterranean Aviation (Medavia) was set up in 1978 as a joint venture between the Maltese and Libyan governments. It now employs 260 people.

Swissquote appoints senior executive officer Swissquote Financial Services (Malta) Ltd has appointed Andrew Zarb Mizzi as its new senior executive officer.

Mr Zarb Mizzi is an accomplished financial services professional, who held senior executive positions with leading firms operating within the Maltese investment services sector.

The Swissquote Group is a leading provider of financial services and online trading in Switzerland.

Swissquote has its headquarters in Gland, Switzerland, and offices in Zurich, Bern, Dubai, Malta,

London and Hong Kong and employs around 550 staff.

Custody services are offered through Swissquote Financial Services (Malta) Ltd.

Commercial manager for Multigas Legal executive for BOV Bank of Valletta has appointed Valerie Fiott as its new legal executive. Reporting directly to the chief executive officer, Dr Fiott will be the bank’s most senior executive within the bank’s legal arm.

Dr Fiott joined Bank of Valletta in 1996 and since then has occupied various roles within the bank’s legal office, including those of vetting and contract lawyer. She currently occupies the role of head of the bank’s Contracts Division.

Dr Fiott succeeds Michael Borg Costanzi, who will be taking up early retirement after a career spanning 35 years with Bank of Valletta.

Industrial and medical gas supplier Multigas has appointed Mark Asciak as commercial manager, taking over from Bernard Ferrante, who has retired after 37 years.

Holding a mechanical engineering degree and a Henley’s MBA, Ing. Asciak, 36, brings a blend of technical and commercial skills into the business.

Prior to this appointment, he held leadership and management positions in multinational companies. For the past eight years, he worked with Hetronic.

Officer for Maltapost Mark Vella has been appointed as the chief commercial officer of Maltapost, taking over from Daniel Grech, who has resigned.

Mr Vella had occupied the post of chief information officer since July 2014.

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STOCK MARKET REVIEW

e unexpected Q1 rally Edward Rizzo At the start of the New Year, probably few investors and market participants would have expected that during the first three months of 2015, various equities would have produced such significant doubledigit gains.

Although the MSE Share Index ‘only’ increased by 13.4 per cent during the first quarter of 2015, a deeper analysis of the components of the index shows the strong outperformance by a number of equities. In fact, it is quite remarkable that 12 equities posted double-digit gains in the first quarter of 2015 with three share prices registering performances in excess of 40 per cent.

The top performers are Malta International Airport plc and Plaza Centres plc, with gains of just over 46 per cent, each closely followed by Malita Investments plc with a share price appreciation of 45 per cent.

Many may question the reason for such strong increases in the share prices of these three companies. As explained in my article in mid-February titled ‘The search for yield’, following the significant decline in yields across the sovereign

and corporate bond markets as a result of the quantitative easing programme by the European Central Bank, investors are now turning their attention to the equity market for a better yield. In fact, the surge in the share price of the airport operator materialised after the company announced a 77.8 per cent increase in the final dividend to shareholders on February 25, following another record financial performance by the company with pre-tax profits climbing by 15 per cent to €26.1 million.

Plaza and Malita are two of the property companies with a business model that can produce sustainable dividends on an annual basis. The share prices of these two companies rallied again during the first quarter of the year following double-digit gains in 2014.

While the final dividend of Malita was only marginally higher, Plaza reported a double-digit growth in profits and on the back of this, dividends increased by 12.6 per cent.

The other property company with a similar business model, Tigné Mall plc, saw its share price rise by 25 per cent and this ‘under-performance’ compared to its peers is probably due to the fact that the company had not yet published its financial

statements by the quarter-end. In fact, Tigné Mall is due to publish its 2014 financial statements and announce its final dividend today.

The search for yield was not only evident among these equities but also spilled over on to other companies. This intensified in March with trading activity across the equity market surging to almost €9.8 million as investors also focused on other equities, including the two large retail banks which continue to dominate equity volumes. During the first three months of 2015, trading activity across the equity market amounted to €20.8 million, the busiest quarter since the first three months of 2008 when equity market volumes incidentally also amounted to €20.8 million.

Medserv plc ranks as the fourth best performer during the first quarter of 2015 with a share price rally of

31 per cent to a new record level of €1.90. The equity had performed positively in the run-up to the publication of the 2014 financial statements on March 23, as the market anticipated that the company will register improved profits and match the forecast of €2.2 million pre-tax profits that had been announced at the time of the second tranche of their bond issue in the first half of 2014.

The announcement on March 10 that the company was finally awarded the offshore maintenance contract of €4 million must have also positively impacted investor sentiment in recent weeks. The large part of the rally, however, took place immediately after the publication of the 2014 financial statements as the company reported that pretax profits exceeded projections and amounted to €3 million.

“It is quite remarkable that 12 equities posted double-digit gains in the first quarter of 2015”

Moreover, the upturn in the share price was also due to the fact that the payment of a net dividend of €0.056 per share is being recommended for shareholders’ approval during the upcoming annual general meeting. The substantial hike in dividend placed Medserv’s equity among the top dividend yielders in Malta.

One of the most unexpected developments in the first quarter of the year was the agreement between two hotel companies as International Hotel Investments plc announced that it agreed to acquire Island Hotels Group Holdings plc for a combination of €1 per share in cash and 0.246 IHI shares for each IHG share through the issuance of 9 million IHI shares to IHG shareholders. Both equities immediately rallied on the news and IHI closed the first quarter up 22.6 per cent, whereas Island Hotels gained 20 per cent. This transaction is expected to be finalised in the coming months.

Although the main focus during the first quarter was the search for yield across the equity market, the share price of Midi plc still advanced by 12.5 per cent, notwithstanding that the company has not

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STOCK MARKET REVIEW

declared any dividends to its shareholders since its Initial Public Offering. Instead, this share price responded positively to the announcement that the company is currently in discussions with various third parties who have expressed an interest to invest in the Manoel Island project and Midi confirmed that it intends to conclude an agreement with one of these parties. This confirms the increased responsiveness by the local equity market to companyspecific developments.

Another important development during the first three months of 2015 was the successful takeover of Crimsonwing plc by KPMG. An extraordinary general meeting is taking place on April 17, which will then lead to the delisting of the company’s shares from the Official List.

The only negative performer since the start of the year was Fimbank plc as its US dollar denominated equity lost 16.7 per cent to close at the $0.50 level after recovering from a fresh all-time low of $0.43. Sentiment towards the company remained negative at the start of the year in anticipation of the 2014 financial statements and following the credit rating downgrade

by Fitch. The international rating agency downgraded Fimbank’s rating to ‘BB-‘ from ‘BB’, citing the

significant deterioration of the bank’s asset quality, resulting in unstable and weak earnings.

Fimbank reported a pre-tax loss of $53 million for 2014.

While the equity market threw up some surprises during the first three months of the year, the extent of the continued positive performance of the bond market may also have caught many investors unaware.

The Rizzo Farrugia MGS Index climbed by a further 5.3 per cent with all the medium- and long-term Malta Government Stock prices rallying to consistent fresh record levels following the official announcement of the quantitative easing programme. Trading activity across the MGS market surged to an

all-time high of €143 million during the month of February but declined sharply to below €85 million following the huge over-subscription of the new 25-year issue and the resultant lack of supply on the secondary market.

On the other hand, the new issuance market for corporate bonds was much weaker than expected, especially after the Malta Stock Exchange published a tentative calendar revealing the potential of up to €172 million in new bond issues during the first six months of 2015.

While some may have been delayed due to the stringent requirements and time frames for preparing documentation and obtaining approval, others may have

been cancelled outright due to changing circumstances.

The demand for fixed interest securities by both retail and institutional investors was very evident again during the February MGS issue and hopefully various investment opportunities will hit the market during the second quarter to provide suitable avenues for the growing investor population.

The second quarter of the year will be dominated by the remaining full-year result announcements of Tigné Mall plc, RS2 Software plc, 6pm Holdings plc, MIDI plc and Global Capital plc which have to be published by the end of April.

However, the more important development for the equity market will be the interim financial statements as at March 31, of Bank of Valletta plc, especially following the surprise announcement last Thursday about the legal proceedings for €363 million instituted against the bank before an Italian court. Although BOV announced that it received a legal opinion clearly stating that there is no basis at law for the claim as it is completely unfounded, this major item is likely to dominate sentiment around the bank’s equity until further clarity is provided to the market at large.

Edward Rizzo is a director at Rizzo, Farrugia & Co. (Stockbrokers) Ltd.

Rizzo, Farrugia & Co. (Stockbrokers) Ltd (RFC) is a member of the Malta Stock Exchange and licensed by the Malta Financial Services Authority. This report has been prepared in accordance with legal requirements. It has not been disclosed to the company/s herein mentioned before its publication. It is based on public information only and is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The author and other relevant persons may not trade in the securities to which this report relates (other than executing unsolicited client orders) until such time as the recipients of this report have had a reasonable opportunity to act thereon. RFC, its directors, the author of this report, other employees or RFC on behalf of its clients, have holdings in the securities herein mentioned and may at any time make purchases and/or sales in them as principal or agent, and may also have other business relationships with the company/s. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Neither RFC, nor any of its directors or employees accept any liability for any loss or damage arising out of the use of all or any part thereof and no representation or warranty is provided in respect of the reliability of the information contained in this report. © 2015 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved

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BUSINESS UPDATES

KPMG Internal Audit Services: focus on value creation and risk Success in today’s complex and fast-paced business environment requires you to ensure that two elements are solidly embedded in your organisation. These two success factors are: value creation and effective risk management, control and governance. Setting up a cutting-edge Internal Audit function based on leading current practices is critical in achieving both. Gone are the days when your Finance Function can effectively perform what is required from an Internal Audit function today.

At KPMG, the focus on risk and value creation is central to our Internal Audit Service offering. Combined with our experience in providing such services to a number of organisations working in a wide spectrum of sectors, we thus provide you with more than run-of-the-mill Internal Audit

Services. In outsourcing your IA function to us, your organisation will also benefit from efficient resource usage, best practice methodology, as well as, guaranteed continuity.

But, as in anything that we do, our focus is our people.

Our multi-disciplinary team enables us to provide you with Internal Audit Services which are tailored to your needs. Your Internal Audit function needs to go beyond financial reporting and controls. Risk Management, IT and Data Management, Compliance and Regulation are amongst those areas which are becoming increasingly important to the Management of any organisation. Our Internal Audit teams thus include subject matter specialists which enable us to challenge, when required, your organisational set up in these diverse areas.

I have retired – time to move abroad Changes from April 6 will allow those people in the UK aged 55 and over to withdraw all the money from their pension scheme, with 25 per cent as a potentially tax-free lump sum. Alternatively, they can withdraw it in chunks with 25 per cent tax-free and the remainder taxed at their marginal rate.

Malta has actively set out its regime to encourage people to retire here with its Malta Retirement Programme (MRP).

By taking up the MRP, beneficiaries will be able to benefit from a tax rate of 15 per cent on any income arising outside Malta which is received in Malta.

To qualify for the scheme, the applicant must be an EU, EEA (Iceland, Norway and Liechtenstein) or Swiss national. You will also

need to either purchase or rent a property in Malta (€275,000 value or €9,600 a year rental) or Gozo (€250,000 value or €8,750 a year rental).

What is clear is that you should make no decision on what to do with your pension pot until you have sought professional financial advice. Your pension pot is supposed to be for life and you need to carefully invest your funds to be able to live the lifestyle you have always dreamed of.

Jan Bjorkmann, Blacktower Financial Management (International) Ltd, tel: 2149 6769; e-mail: info@blacktowerfm.com. Blacktower Financial Management (International) Ltd is licensed by the FSC Licence 00805B.

SHout – Spring Hunting Out – vote No on April 11 Mark Sultana On Saturday, we all have the chance to take part in a referendum to abolish spring hunting in Malta by voting No/Le. The referendum is happening because 10 per cent of Maltese voters asked for it by signing a petition. Now we have the power to decide whether spring hunting is abolished or not.

There are three very important reasons to vote No on April 11.

First, the birds that are shot in spring are making a long journey between Africa and mainland Europe to lay eggs and increase their numbers.

It makes no sense to kill the birds before they have had a chance to breed.

Secondly, the Maltese countryside is at its most beautiful in spring and should be free for us all to enjoy. Unfortunately, almost 80 per cent of the countryside can be used for hunting in spring.

This makes trying to go for a walk, jog or picnic impossible.

Third, the leaders of both political parties have made it very clear that everyone is free to vote according to their wishes.

How you vote is your choice. If enough people vote No, spring hunting will be abolished forever.

Use your vote wisely on April 11 – please vote No. Mark Sultana is a SHout spokesperson.

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BUSINESS UPDATES

Marking the first anniversary of the Vilhena HSBC Malta joins branches across the Global Balanced Multi-Manager Fund world for WWF’s Earth Hour 2015 Valletta Fund Management Ltd has announced that the Vilhena Global Balanced Multi-Manager Fund registered 15.4 per cent return to shareholders over one year from its inception in March 2014.

The Vilhena Global Balanced Multi-Manager Fund provides shareholders with the opportunity to invest in a balanced global portfolio of direct and indirect bonds and equities through collective investment schemes and can be accessed by a minimum amount of €2,500. Investors can also access the fund by investing a monthly minimum of €50. The fund, which is denominated in euro, distributes income* to shareholders twice a year, on April 30 and October 31.

Shareholders also have the opportunity to reinvest the distributed income.

The Vilhena Global Balanced Multi-Manager Fund is managed by Valletta Fund Management Ltd and sub-managed by Waverton Investment Management, winner of the Image and Reputation Award by Private Asset Managers Award in 2015.

Prospective investors will currently benefit from a discount on the up-front fee reduced to two per cent.

Speaking about the VFM Funds, Mark Agius, executive head of Valletta Fund Management, said: “The Vilhena Global Balanced Multi-Manager Fund is one of the investment funds within the Income and Growth category, which category provides investors with exposure to the domestic, Mediterranean and global markets. Our investment solutions are already extremely popular with investors with over €750 million invested across these funds as at February 28, 2015.’’

*The income that the assets of the fund generate in relation to their value or market, and the frequency of payment may vary and are not guaranteed. Past performance is not a guarantee to future performance. The value of the investment can go down as well as up and any initial charges may lower the amount invested and the amount received upon redemptions. Investments should be based on the full details of the Prospectus, Offering Supplement and the KIID which may be obtained from Valletta Fund Management Ltd (VFM), Bank of Valletta plc Branches/Investment Centres and other Licensed Financial Intermediaries. VFM is licensed to provide Investment Services in Malta by the MFSA. The Vilhena Funds SICAV plc is licensed by the MFSA and qualifies as a UCITS. Issued by VFM, TG Complex, Suite 2, Level 3, Brewery Street, Mrieħel, BKR 3000, Malta; tel: 2122 7311, fax: 2275 5661, e-mail: infovfm@bov.com, website: www.vfm.com.mt. Source: VFM

HSBC Malta participated in Earth Hour for the eighth consecutive year by switching off non critical lighting and airconditioning, leading to an estimated saving of 49kg of greenhouse gas emissions. This is equivalent to emissions by 37 households.

The bank joined counterpart offices in 35 countries that switched off their lights to show support for World Wildlife Fund’s (WWF) initiative.

WWF’s annual campaign once again called upon individuals and businesses across the world to switch off their lights for one hour on Saturday, March 28, at 8.30pm local time.

HSBC offices and branches in countries across the globe have been supporting Earth Hour since 2009. Thousands of HSBC employees around the world showed their personal support by participating in local Earth Hour events.

HSBC also sold 4,000 candles in aid of the WaterAid Ghana project which is part of the bank’s larger HSBC Water Programme. Additionally, the bank encouraged all schools in Malta to hold a lights-out event and was extremely

SCHOOLS AROUND MALTA WERE ENCOURAGED BY HSBC MALTA TO HOLD A LIGHTS-OUT EVENT IN CONJUNCTION WITH EARTH HOUR 2015.

pleased with their strong response in purchasing candles. Also complementing the event were dozens of scouts who walked from Tigné Point to St George Square, Valletta, where they lit 1,000 candles.

HSBC Group is committed to reducing its annual carbon emissions by one tonne per employee, from 3.5 in 2012 to 2.5 by 2020.

Express Trailers strengthens UK service with new Birmingham depot Express Trailers this week started operating a new weekly road freight service to Birmingham in the UK through a partnership agreement with Sheldon Clayton Logistic Group. Based in West Bromwich, Sheldon Clayton Logistics enjoys an excellent reach across all the Midlands area and operates daily connections to Ireland, Scotland and other islands.

Established 35 years ago, Sheldon Clayton Logistics offers complete multimodal logistics services including pallet storage, groupage services, freight forwarding, costeffective distribution and warehousing services.

David Fleri Soler, marketing and business development manager at Express Trailers, said: “This new collaboration not only complements our existing UK network in the Manchester and London areas, but supports our growing business in the UK’s Midlands region. Maltese importers and exporters with business links in this region can now work closer with their clients and help them achieve faster collection and delivery times.”

Customers may request more information by sending an e-mail to sales@expressgroup.com.