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Newsletter 5
MONTH YYYY

From The Editor

I believe few topics we have handled in this newsletter will be as controversial as the news item featured on page 2 of this issue.

The Bank of Valletta PLC, one of Malta’s largest banks has this week gone public with its new policies regarding its lending to local entrepreneurs.

These policies represent a revolutionary change from those policies we have been accustomed to, and needless to say, the local business community will be studying their repercussions for the months to come.

The ease with which one could obtain bank finance for any business venture was, undoubtedly, one of the major factors that fueled Malta’s great economic development these past 30 years. Another major factor was the inexpensive cost of such finance.

However, the indiscriminate application of such policies, without any real measures of viability of new projects was, in our opinion, an important contributor to the spectacular bankruptcies experienced during last year.

Therefore, these new policies, have been expected for some months.

Last month we also saw the chairman of HSBC (Malta) PLC go public on what he thinks on the local commercial environment and the traditional way the Maltese have been financing their business ventures. This bank has been implementing similar policies to those announced by their rival bank this week, for many months now.

We are confident that this new GET TOUGH policy by Malta’s leading banks will assist in putting local enterprise on a stronger financial footing in the long term. However, we expect to see quite a few casualties along the way.

Regards

George Farrugia

Using The Internet

An interesting web-site that can be useful to our clients and friends is the YELLOWPAGESMALTA.COM which is a directory of local businesess on the net.

We have found this site most useful, not only because it has the most comprehensive data base on local businesses, but also because its presents this in a very user friendly format. What's more, any search can be zoomed into, not only by subject, but also by location, eg …. You wish to find an accountant in NADUR , Gozo.

Of special interest is the Restaurants section, where this web page not only lists most of the local restaurants, but also includes their menu and prices. A local area map is also provided to help the user locate the restaurant of his/her choice.

We believe that this web page could be a very interesting marketing tool for our clients and friends, and judging from the hundreds of adverts on this site, many seem to have realised this already.

Get Touch Policies By B.O.V.

At a meeting held on 27th February, 2002 for accountants and other interested parties, Mr.Joseph F.X.Zahra, the Chairman of Bank of Valletta PLC, announced drastic changes to the bank’s lending policies.

Among the most important changes there is:

1. Adoption of MOODIES methodology and software for the assessment of risk presented by each individual client
2. Stricter criteria when evaluating proposals for new projects
3. Requirement of greater risk capital on the part of the investor in any new project
4. Interest rates that will vary in accordance with risk factor
5. Stricter deadlines for the submission of audited accounts by clients
6. New rules on property valuation to be taken as collateral

Mr.Zahra advised that these new policies are being implemented to bring the bank in line with new Central Bank of Malta guidelines and international policies.

All those present were made aware that the bank will be following the new policies on both new and existing facilities. Current clients will be required to come into line within a pre-determined deadline.

More details on this subject will be given in our next issue when hopefully, fuller details would have been officially published by the bank.

Servicing Local Councils

During the past 10 years our office has accumulated substantial expertise on the accounting and legal provisions stipulated by the LOCAL COUNCILS ACT 1993. During this period we have acted as Local Government auditors for 20 of the 56 local councils in Malta and Gozo. We have also carried out VALUE FOR MONEY AUDITS on 12 local councils and provided consultancy and accountancy services to many others.

This office has today, specialized software that can prepare the council’s financial statements in line with the financial regulations issued in terms of the same ACT. This software is an application of the SAGE ACCOUNTS PRODUCTION software that is already available on the local market and in use by many accountancy firms, including some of the big five.

We are pleased to report that this software is already being successfully used by some councils to meet the tight reporting deadlines imposed by the ACT, whilst several others are considering its benefits before taking a decision.

The advantages of using this software include:

• Imports trail balance directly from other SAGE accounting packages
• Does not require any specialized training on the part of the user
• Prints financial statements that are totally compliant with Local Councils Act at the touch of a button
• Dynamically adjusts financial statements after each adjustment made to the accounts
• Removes headaches imposed by tight reporting deadlines.

This software can also be adapted to print any other customised report from data originating from any SAGE accounting package, in any language.

Seminars

From this issue we shall start publishing details of seminars and courses that we believe would be of interest to our readers.

For the month of March, the MALTA EXORT TRADE CORPORATION (METCO) will be holding a very topical workshop called: EXPORT DEVELOPMENT PROGRAMME

This should be of interest to all those who are already exporting but especially to anyone planning to take his products or services to the international market.

This workshop is broken into four modules of 4 sessions each, lasting around 3 hours per session. Commencement date is set for the 12th March, 2002 and bookings are on first come first served basis.

The workshop will be held in the late afternoons and will average around 4 a month.

Further details and booking from METCO (info.tumetco.net)

Export Opportunities

Recently our office was approached by a local company that specializes in assisting Maltese businessmen in breaking into the overseas markets.

This company claims to have offices in several North African countries as well as in China and the mid-east. Its strongest presence, however, is in Tunisia where it has already assisted a number of Maltese companies to establish either a production base there, or else promote their products on that market.

Should any of our readers be interested in exploring this potential further, please send us an e-mail and we shall provide you with the exact contact details.

Mailing list

This publication is primarily intended for distribution to our clients, friends and
colleagues throughout the world.

Anyone wishing to receive a copy can drop us an e-mail at: infogfcomalta.com and we shall include his name on our e-mailing list.