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Grand Harbour Marina p.l.c.
Annual Report
2022
Company Registration Number: C 26891
Grand Harbour Marina p.l.c.
Page
Annual Report
Chairman’s Statement
1
Directors’ Report
5
Statement of the Directors’ Responsibilities
11
Directors’ Statement of Compliance with the
Code of Principles of Good Corporate Governance
12
Other Disclosures in terms of the Capital Markets Rules
23
Remuneration Report
25
Consolidated and Separate Financial Statements
Statement of financial position
28
Statement of profit or loss and other comprehensive income
29
Statement of changes in equity
30
Statement of cash flows
32
Notes to the financial statements
33
Independent Auditors’ Report
1
Grand Harbour Marina p.l.c.
Chairman’s Statement
Year Ended 31 December 2022
Overview
Summary of Group Results (assuming a proportional consolidation of the investment in joint venture)
2022
2021
Grand
Harbour
Marina
45%
Share of
IC Cesme
Combined
Grand
Harbour
Marina
45%
Share of
IC Cesme
Combined
€m
€m
€m
€m
€m
€m
Revenues
3.90
2.29
6.19
3.62
1.73
5.35
Operating profit
1.19
0.91
2.10
1.16
0.88
2.04
Profit before tax
0.49
2.00
2.49
0.40
(1.16)
(0.76)
Profit after tax
0.22
1.35
1.57
0.11
(0.88)
(0.77)
All figures above are shown before applying IFRS 11
Joint Arrangements
which would exclude the results of
the Group’s joint ventures from the detailed lines of the Statement of profit or loss and other comprehensive
income.
Grand Harbour Marina p.l.c. Consolidated
The Consolidated Financial Statements for the year ended 31 December 2022 include the 45% beneficial interest
of Grand Harbour Marina p.l.c. (“
GHM
” or the “
Company
”) in IC Cesme Marina Yatirim, Turizm ve Isletmeleri
Anonim Sirketi (“
IC Cesme
”), and the results of a wholly owned subsidiary, Maris Marine Limited (“
MML
”), the
latter being immaterial.
Total revenue at GHM increased from €3.62 million to €3.90 million, while the Group’s share of revenues at IC
Cesme increased to €2.29 million in 2022, compared to €1.73 million in 2021. Operating profit, Profit before tax
and Profit after tax at GHM increased by €0.03 million, €0.09 million and €0.11 million respectively compared to
2021. The Group’s share of operating profit, Profit before tax and Profit after tax at IC Cesme increased by
€0.03 million, €3.16 million and €2.23 million respectively.
Grand Harbour Marina
Annual Results
€m
2022
2021
2020
2019
2018
Marina operating revenues
3.9
3.6
4.1
4.1
4.7
Direct costs
(0.8)
(0.7)
(0.8)
(0.8)
(1.2)
Operating expenses
(1.5)
(1.3)
(1.3)
(1.6)
(1.9)
EBITDA
1.6
1.6
2.0
1.7
1.6
PBT
0.5
0.4
0.8
0.4
0.7
Net income
0.2
0.1
0.5
0.1
0.4
Capital expenditure
0.1
0.0
0.1
0.2
0.2
2
Grand Harbour Marina p.l.c.
Chairman’s Statement (continued)
Year Ended 31 December 2022
Grand Harbour Marina (continued)
Trading
Sales revenues in 2022 increased by €0.3 million when compared to 2021, as the Company experienced an
increase in superyacht traffic, superseding the low levels experienced in 2020 and 2021 due to the pandemic.
The Company registered EBITDA of €1.6 million, in line with last year. With net finance costs of €0.7 million
(primarily made up of €0.7 million bond interest cost, €0.4 million interest expense on lease liabilities less interest
income of €0.4 million) and depreciation of €0.4 million, the Company achieved a €0.5 million profit before tax
(2021: €0.4 million). GHM paid €0.7 million dividends during the year (2021: €nil).
Marketing and Corporate Social Responsibility
Grand Harbour Marina remains committed to its social responsibilities, conducting business in an ethical manner,
protecting the environment and positively contributing to the communities surrounding the marina. During
2022, the marina supported the Birgu Local Council with a sponsorship towards the Birgu Fest yearly highlight
event. The marina also co-sponsored the Birgu Children Christmas party and presented L-Istrina with a donation.
The company also hosted the Birgu Regatta rowing boats whilst the club building was being refurbished. During
September 2022, the company hosted ‘Rock the Fort’, an event organised by ‘Ten08’, a charitable NGO which
raised funds for ALS.
Three main international events were hosted, with the aim of promoting the Maltese islands. A sequence of the
Ridley Scott ‘Napoleon’ was shot at St Angelo wharf, the Baille de Suffren regatta which finished in Birgu and the
maxi yachts attending the Rolex Middle Sea race.
Valuation
The market capitalisation of GHM on the Malta Stock Exchange on 18 April 2023 amounted to €23.40 million (31
March 2022: €12.40 million).
3
Grand Harbour Marina p.l.c.
Chairman’s Statement (continued)
Year Ended 31 December 2022
IC Cesme
Annual Results (for 100% of the Marina)
€m
2022
2021
2020
2019
2018
Seaside revenues
2.8
2.2
2.0
2.3
2.3
Landside revenues
2.3
1.7
1.3
2.0
1.9
Total revenues
5.1
3.9
3.3
4.3
4.2
Direct costs
(0.6)
(0.3)
(0.2)
(0.3)
(0.3)
Operating expenses
(2.2)
(1.4)
(1.5)
(1.6)
(2.5)
EBITDA
2.3
2.2
1.6
2.4
1.4
PBT
4.5
(2.6)
(2.4)
0.1
0.4
Net income
3.0
(1.9)
(1.9)
0.1
-
Capital expenditure
0.1
0.2
-
0.1
0.1
Trading
IC Cesme Marina, the Company’s 45% joint venture with IC Holdings, improved performance on both seaside &
landside revenues, when compared to 2021 levels, whilst maintaining the 2021 occupancy rates and visitor
numbers, fully recovering from the pandemic-effected seasons of 2020 & 2021. However, despite the
government’s measures against inflation & foreign exchange rate increases (such as foreign exchange protection
accounts and its tax advantages, limitation on the foreign exchange accounts of the banks or reducing the central
banks interest rate), the negative trend continued in 2022 as the Turkish lira depreciated against the Euro
currency by 66.31% in yearly averages, with the highest recorded inflation rate in the past 25 years, reaching
72.31% on yearly average. With the competitive pricing and operational performance, both the landside and
seaside revenues exceeded last year’s results.
Revenues in 2022 increased by €1.2 million compared to 2021. The limitation of the yearly increase on the fixed
rents of the tenants’ contracts continued this year. Nevertheless, landside revenue increased by €0.6 million due
to the price increases of the tenants’ own products & services. On the seaside, revenues increased by €0.6 million,
due to the increase on berthing prices.
Direct costs increased by €0.3 million due to the unit cost increase on the energy prices. The EBITDA for 2022
amounts to €2.3 million. After deducting depreciation, IFRS16 related adjustment, finance costs, foreign
exchange losses and hyperinflationary adjustment, the Profit before tax amounts to €4.5 million (2021: €2.6
million loss before tax). Profit after tax of €3.0 million (2021: loss after tax of €1.9 million) reflected a tax charge
of €1.5 million (2021: €0.7 million). These results were mainly steered by the hyperinflationary adjustment as per
IAS 29, resulting in a gain of €3.5 million.
The Group’s 45% share of IC Cesme’s after tax profit of €1.3 million marked an increase over the 2021 share of
after-tax loss of €0.9 million, and this is included within its total share of profit of equity-accounted investees.
Marketing and Corporate Social Responsibility
Given the lack of European and international yacht traffic to the Turkish coast generally, IC Cesme management
has been focused on both retaining existing Turkish clients as well as attracting new ones. Although there
continues to be a high turnover of customers at IC Cesme Marina, with 96 boats leaving throughout 2022 mainly
due to changing location, the marina attracted 78 new boats during the year with over 48% being returning
customers or customers converting from seasonal contracts.
In the first quarter of 2022, Çeşme Marina hosted
‘Steve and Judy’, the beloved sailor couple of
Youtube
, together
with their sailing boat ‘Fair Isle’. The couple, who are former BBC reporters and cameramen, made videos
summarizing all the services they received in Çeşme Marina and featured them on their
Youtube
channel.
4
Grand Harbour Marina p.l.c.
Chairman’s Statement (continued)
Year Ended 31 December 2022
IC Cesme Marina (continued)
Marketing and Corporate Social Responsibility (continued)
In the second quarter of 2022, five leg races of the EAYK –
Çeşme Marina Winter Trophy were hosted by Çeşme
Marina. All award ceremonies and cocktails took place at Kepler Marin in Çeşme Marina. Two legs of the IOM
(International One Meter) Races, organized by EAYK –
Çeşme Marina and IOM Class Committee, took
place at
Çeşme Marina. The races were done with the participation of 16 racers from different cities such as İzmir,
İstanbul, Ankara, and Mersin. All the racing periods were shared on the social media accounts of Çeşme Marina.
Çeşme Marina was
delighted to receive the iconic Blue Flag which is one of the world’s most recognized volunteer
awards for beaches, marinas and sustainable boat tourism operators for its compliance specified criteria.
Çesme Marina started to implement the Compost Project which is newly added to its environmental projects by
gathering the grass, dry leaves, organic plant residues, tea pulp consumed daily in the office, and organic
vegetable and fruit wastes from the boutique hotel (Marina Residences) and businesses, etc. The project aims to
collect the products and turn them into compost to be used in the marina landscape.
Using the obtained compost formation in landscaping and garden maintenance, it is aimed to create benefits
within the marina again from the organic waste generated during the marina business processes.
In August 2022, the 7th Arkas Aegean Link Regatta took place in Cesme Marina, organized in cooperation
between Aegean Open Sea Yacht Club (EAYK), Cesme Marina and Arkas. In the race, 38 boats and around 300
racers participated in IRC and Support classes. Newly opened Çeşme Marina Yacht Club hosted the opening
cocktail of this event.
Between 22 and
25 September 2022, Çeşme
Marina hosted Big Fish Turkey (catch and release theme), which is
shown as one of the most important tournaments in Europe with a number of spectators and participants,
recording
55 boats, and 300 competitors. Regarding Çeşme Marina's social responsibilit
y sensitivity, Big Fish
Organization, in cooperation with İzmir Alsancak Rotaract Club, raised awareness about 'fishing with the
awareness of respecting nature' by donating the fish that could not be released to the child welfare institution.
Group Outlook
These results reflect the stability of our business model, in spite of the uncertainties caused by the coronavirus
pandemic and its aftermath, the Russian invasion of Ukraine, rising inflation, the earthquake in Turkey, and the
increase in interest rates. We monitor on an ongoing basis, the direct and indirect impacts of these situations on
our business model and cash flow generation.
The Board of Directors reaffirm the Group is well-positioned to honour its financial obligations as they fall due
and to meet the challenges posed by economic uncertainties.
We thank our partners in Turkey for the continued collaboration, First Eastern for their support, our employees
for their dedication, commitment and hard work, and our clients for the continued trust they place in us.
Signed by the Company’s Chairman, Lawrence Zammit, on 18 April 2023 as per Directors’ Declaration on ESEF
Annual Financial Report submitted in conjunction with the Annual Report Financial Statements 2022.
5
Grand Harbour Marina p.l.c.
Directors’ Report
Year Ended 31 December 2022
The directors have prepared this directors’ report for the Company in accordance with Article 177 of the
Companies Act, 1995 (Chapter 386, Laws of Malta) (the “
Act
”) including the further provisions as set out in the
Sixth Schedule to the Act.
Board of Directors
Lawrence Zammit (Chairman)
Franco Azzopardi
Victor Lap Lik Chu
Elizabeth Ka Yee Kan
Tarcisio Barbara (appointed on 28 June 2022)
Principal Activities
The principal activities of the Company and its joint venture are the acquisition, development, operation and
management of marinas. The Company is geared towards providing a high-quality service to yachts, with a
particular emphasis on superyachts, which by their very nature, demand high level marina related services.
Currently the Company owns the Grand Harbour Marina in Malta, and the 45% interest in IC Cesme in Turkey.
The marinas are operated and managed in association with the internationally well-known company Camper &
Nicholsons Marinas Limited (“
CNML
”), a company largely involved in the management and operation of marinas
worldwide.
The principal activity of each of the Company and its joint venture entity is therefore to seek prospective
customers to berth their vessels within the facilities at the Grand Harbour Marina in Vittoriosa, Malta, and at IC
Cesme respectively, and to service their respective existing customers by providing the high-quality service
required by both yacht owners and their crews.
Review of Business Development and Financial Position
The Chairman’s Statement reviews the development of the business of the Company and its joint venture for the
reporting year. The results of its operations are set out in the Statements of Profit or Loss and Other
Comprehensive Income.
The financial position at 31 December 2022, as disclosed in the Statement of Financial Position as at this date,
reflects a healthy state of affairs.
6
Grand Harbour Marina p.l.c.
Directors’ Report (continued)
Year Ended 31 December 2022
Future Developments
The directors continue to place emphasis on improving operating efficiency at both GHM and IC Cesme to
strengthen the sustainability of the Company.
Furthermore, the directors, despite these challenging times, have confidence that the investment in IC Cesme
will resume reaping benefits, thereby generating increasing value for the shareholders.
Principal Risks and Uncertainties
A financial risk management overview is given in note 29 to the financial statements and presents information
about the Company’s and Group’s exposure to risk, the objectives, policies and processes for measuring and
managing risk and the Company’s management of capital. Apart from the risks explained under that note which
also form an integral part of this report the Company is exposed to other principal business and operational risks
as explained below.
The financial performance of the Company partly depends on the timing, number and extent of berth sales.
Whereas the Company’s business model has been shifting towards a financial performance based on the
maximisation of marina occupancy and closer management of costs, there inevitably remains an exposure, to a
certain extent, to the risks associated with the trends and future outlook of the berth sale industry as a whole.
Inevitably, the Company is also exposed to competition from other marinas, locally and abroad. In addition, there
may be matters, outside the control of the Company which may have a negative impact on the development of
the marina, namely, the development of the surrounding areas.
Going Concern
The Directors have reviewed the Company’s budget for the next financial year. On the basis of this review, after
making enquiries, and in the light of the current financial position and the funding arrangements in place, the
directors confirm, in accordance with Capital Markets Rule 5.62, that they have a reasonable expectation that
the Company has adequate resources to continue in operational existence for the foreseeable future.
Dividends and Reserves
The company paid an interim dividend of €0.7m during 2022 (2021: no dividend payment).
The movements on reserves and the amounts carried forward to next year are as set out in the Statement of
Changes in Equity.
Auditors
Deloitte Audit Limited have expressed their willingness to continue in office. A resolution proposing the
reappointment of Deloitte Audit Limited as auditors of the Company will be submitted at the forthcoming Annual
General Meeting of the Company.
Subsequent events
Details of events occurring after the balance sheet date are disclosed in note 32 to the financial statements.
7
Grand Harbour Marina p.l.c.
Directors’ Report (continued)
Year Ended 31 December 2022
Disclosure in terms of the Capital Markets Rules
Pursuant to Capital Markets Rule 5.64
Share capital structure
The Company’s authorised and issued share capital is two million and four hundred thousand Euro (€2,400,000)
divided into twenty million (20,000,000) fully paid-up ordinary shares of a nominal value of twelve Euro cents
each (€0.12). All of the issued shares of the Company form part of one class of ordinary shares in the Company,
which shares are listed on the Malta Stock Exchange. All shares in the Company have the same rights and
entitlements and rank
pari passu
between themselves.
The following are highlights of the rights attaching to the shares:
Dividends:
The shares carry the right to participate in any distribution of dividend
declared by the Company;
Voting rights:
Each share is entitled to one vote at meetings of shareholders;
Pre-emption rights:
Subject to the limitations contained in the Memorandum and Articles of
Association, shareholders in the Company shall be entitled, in
accordance with the provisions of the Company’s Memorandum and
Articles of Association, to be offered any new shares to be issued by the
Company a right to subscribe for such shares in proportion to their then
current shareholding, before such shares are offered to the public or to
any person not being a shareholder;
Capital distributions:
The shares carry the right for the holders thereof to participate in any
distribution of capital made whether on a winding up or otherwise;
Transferability:
The shares are freely transferable in accordance with the rules and
regulations of the Malta Stock Exchange, applicable from time to time;
Other:
The shares are not redeemable and not convertible into any other form
of security;
Mandatory takeover bids:
Chapter 11 of the Capital Markets Rules, implementing the relevant
Squeeze-Out and Sell-Out Rules provisions of Directive 2004/25/EC of
the European Parliament and of the Council of 21 April 2004, regulates
the acquisition by a person or persons acting in concert of the control of
a company and provides specific rules on takeover bids, squeeze-out
rules and sell-out rules. The shareholders of the Company may be
protected by the said Capital Markets Rules in the event that the
Company is subject to a Takeover Bid (as defined therein). The Capital
Markets Rules may be viewed on the official website of the Malta
Financial Services Authority -
www.mfsa.com.mt
.
8
Grand Harbour Marina p.l.c.
Directors’ Report (continued)
Year Ended 31 December 2022
Disclosures in terms of the Capital Markets Rules (continued)
Pursuant to Listing Capital Markets 5.64 (continued)
Holdings in excess of 5% of the share capital
On the basis of information available to the Company as at the 31 December 2022, Camper & Nicholsons Marina
Investments Limited held 17,393,590 shares in the Company, equivalent to 86.97% of its total issued share
capital.
Other than the aforesaid, no person holds any shareholding in excess of 5% of the total issued share capital of
the Company.
Appointment/Replacement of Directors
In terms of the Memorandum and Articles of Association of the Company, the directors of the Company shall be
appointed by the shareholders in the annual general meeting as follows:
(a)
Any shareholder/s who in the aggregate hold not less than 200,000 shares having voting rights in the
Company shall be entitled to nominate a fit and proper person for appointment as a director of the Company.
The directors themselves or a committee thereof may make recommendations and nominations to the
shareholders for the appointment of directors at the next following annual general meeting.
(b)
Shareholders are granted a period of at least fourteen (14) days to nominate candidates for appointment as
Directors. Such notice may be given by the publication of an advertisement in at least two (2) daily
newspapers. All such nominations, including the candidate’s acceptance to be nominated as director, shall
on pain of disqualification be made on the form to be prescribed by the directors from time to time and shall
reach the Office not later than fourteen (14) days after the publication of the said notice (the “
Submission
Date
”); provided that the Submission Date shall not be less than fourteen (14) days prior to the date of the
meeting appointed for such election. Nominations to be made by the directors or any sub-committee of the
directors appointed for that purpose shall also be made by not later than the date established for the closure
of nominations to shareholders.
(c)
In the event that there are either less nominations than there are vacancies on the Board or if there are as
many nominations made as there are vacancies on the Board, then each person so nominated shall be
automatically appointed a director unless a shareholder demands that a vote be taken in respect of all or any
one or more of the nominees.
(d)
In the event that there are more nominations made, then an election shall take place. After the date
established as the closing date for nominations to be received by the Company for persons to be appointed
directors, the directors shall draw the names of each candidate by lot and place each name in a list in the
order in which they were drawn. The list shall be signed by the Chairman and the Company Secretary for
verification purposes.
9
Grand Harbour Marina p.l.c.
Directors’ Report (continued)
Year Ended 31 December 2022
Disclosures in terms of the Capital Markets Rules (continued)
Pursuant to Capital Markets Rule 5.64 (continued)
Appointment/Replacement of Directors (continued)
(e)
On the notice calling the annual general meeting at which an election of directors is to take place there shall
be proposed one resolution for the appointment of each candidate in the order in which the names were
drawn, so that there shall be as many resolutions as there are candidates. The directors shall further ensure
that any Member may vote for each candidate by proxy.
(f)
At the general meeting at which the election of directors is to take place the Chairman shall propose the
name of each candidate as a separate resolution and the shareholders shall take a separate vote for each
candidate (either by a show of hands or through a poll). Each shareholder shall be entitled, in the event of a
poll, to use all or part only of his votes on a particular candidate.
(g)
Upon a resolution being carried, the candidate proposed by virtue of that resolution shall be considered
elected and appointed a director. No further voting shall take place once enough resolutions have been
passed to ensure that all vacancies on the Board have been filled, even if there are still candidates with
respect to whom a resolution has not yet been called.
(h)
Shareholders may vote in favour or against the resolution for the appointment of a director in any election,
and a resolution shall be considered carried if it receives the assent of more than 50% of the shareholders
present and voting at the meeting.
(i)
Subject to the above, any vacancy among the directors may be filled by the co-option of another person to
fill such vacancy. Such co-option shall be made by the Board and shall be valid until the conclusion of the
next annual general meeting.
Procedures for amendment to the Memorandum and Articles of Association
In terms of the Companies Act, Cap 386 of the Laws of Malta, the Company may by extraordinary resolution at a
general meeting alter or add to its Memorandum or Articles of Association. An extraordinary resolution is one
where:
(a)
it has been taken at a general meeting of which notice specifying the intention to propose the text of the
resolution as an extraordinary resolution and the principal purpose thereof has been duly given;
(b) it has been passed by a shareholder or shareholders having the right to attend and vote at the meeting
holding in the aggregate not less than seventy-five per cent (75%) in nominal value of the shares issued by
the Company represented and entitled to vote at the meeting, and at least fifty-one per cent (51%) in
nominal value of all the shares issued by the Company and entitled to vote at the meeting.
If one of the aforesaid majorities is obtained but not both, another meeting shall be duly convened within 30
days to take a fresh vote on the proposed resolution. At the second meeting the resolution may be passed by a
shareholder or shareholders having the right to attend and vote at the meeting holding in the aggregate not less
than seventy-five per cent (75%) in nominal value of the shares issued by the Company represented and entitled
to vote at the meeting. However, if more than half in nominal value of all the shares issued by the Company
having the right to vote at the meeting is represented at that meeting, a simple majority in nominal value of such
shares so represented shall suffice.
10
Grand Harbour Marina p.l.c.
Directors’ Report (continued)
Year Ended 31 December 2022
Disclosures in terms of the Capital Markets Rules (continued)
Pursuant to Capital Markets Rule 5.64 (continued)
Board members’ powers
The directors are vested with the management of the Company, and their powers of management and
administration emanate directly from the Memorandum and Articles of Association and the law. The directors
are empowered to act on behalf of the Company and in this respect have the authority to enter into contracts,
sue and be sued in representation of the Company. In terms of the Memorandum and Articles of Association they
may do all such things that are not by the Memorandum and Articles of Association reserved for the Company in
general meeting.
In particular, the directors are authorised to issue shares in the Company with such preferred, deferred or other
special rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise as the
directors may from time to time determine, as long as such issue of equity securities falls within the authorised
share capital of the Company. Unless the shareholders otherwise approve in a general meeting, the Company
shall not, in issuing and allotting new shares:
(a)
allot any of them on any terms to any person unless an offer has first been made to each existing shareholder
to allot to him at least on the same terms, a proportion of the new shares which is as nearly as practicable
equal to the proportion in nominal value held by him of the aggregate shares in issue in the Company
immediately prior to the new issue of shares; and
(b)
allot any of them to any person upon the expiration of any offer made to existing shareholders in terms of
a) above. Any such shares not subscribed for by the existing shareholders may be offered for subscription to
the general public under the same or other conditions which however cannot be more favourable to the
public than offer made under (a).
Furthermore, the Company may, subject to such restrictions, limitations and conditions contained in the
Companies Act, acquire its own shares.
Save as otherwise disclosed herein, the provisions of Capital Markets Rules 5.64.2, 5.64.4 to 5.64.7, 5.64.10 and
5.64.11 are not applicable to the Company.
Signed on behalf of the Company’s Board of Directors on 18 April 2023 by Lawrence Zammit (Chairman) and
Franco Azzopardi (Director) as per Directors’ Declaration on ESEF Annual Financial Report submitted in
conjunction with the Annual Report Financial Statements 2022.
11
Grand Harbour Marina p.l.c.
Statement of the Directors’ Responsibilities
The directors are required by the Companies Act (Cap. 386) to prepare financial statements in accordance with
International Financial Reporting Standards as adopted by the EU which give a true and fair view of the state of
affairs of the Company and the Group at the end of each financial year, and of the profit or loss of the Company
and the Group for the year then ended.
In preparing the financial statements, the directors should:
•
select suitable accounting policies and apply them consistently;
•
make judgments and estimates that are reasonable; and
•
prepare the financial statements on a going concern basis, unless it is inappropriate to presume that the
Company and the Group will continue in business as a going concern.
The directors are responsible for ensuring that proper accounting records are kept which disclose with reasonable
accuracy at any time the financial position of the Company/Bank and the Group and which enable the directors
to ensure that the financial statements comply with the Companies Act (Cap. 386). This responsibility includes
designing, implementing and maintaining such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
The directors are also responsible for safeguarding the assets of the Company and the Group, and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
Additionally, the directors are responsible for:
•
the preparation and publication of the Annual Financial Report, including the consolidated financial
statements and the relevant tagging requirements therein, as required by Capital Markets Rule 5.56A,
in accordance with the requirements of the European Single Electronic Format Regulatory Technical
Standard as specified in the Commission Delegated Regulation (EU) 2020/815 (the “ESEF RTS”),
•
designing, implementing, and maintaining internal controls relevant to the preparation of the Annual
Financial Report that is free from material non-compliance with the requirements of the ESEF RTS,
whether due to fraud or error,
and consequently, for ensuring the accurate transfer of the information in the Annual Financial Report into a
single electronic reporting format.
Statement of responsibility pursuant to the Capital Market Rules issued by MFSA
In accordance with Capital Market Rule 5.68, we confirm that to the best of our knowledge:
a)
the financial statements give a true and fair view of the financial position of the Company and the Group
as at 31 December 2022 and of their financial performance and cash flows for the year then ended, in
accordance with International Financial Reporting Standards as adopted by the EU; and
b)
the Directors’ Report includes a fair review of the performance of the business and the financial
position of the Company and the Group, together with a description of the principal risks and
uncertainties that they face.
Signed on behalf of the Company’s Board of Directors on 18 April 2023 by Lawrence Zammit (Chairman) and
Franco Azzopardi (Director) as per Directors’ Declaration on ESEF Annual Financial Report submitted in
conjunction with the Annual Report Financial Statements 2022.
12
Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance
Introduction
Pursuant to the Capital Markets Rules issued by the Malta Financial Services Authority, the Company as a
company whose securities are listed on a regulated market should endeavour to adopt the Code of Principles of
Good Corporate Governance contained in Appendix 5.1 of the Capital Markets Rules (the “
Code
”). In terms of
Capital Markets Rule 5.94, the Company is obliged to prepare a report explaining how it has complied with the
Code. For the purposes of the Capital Markets Rules, the Company is hereby reporting on the extent of its
adoption of the Code.
The Company acknowledges that the Code does not dictate or prescribe mandatory rules but recommends
principles of good practice. However, the directors strongly believe that such practices are in the best interests
of the Company and its shareholders and that compliance with principles of good corporate governance is not
only expected by investors but also evidences the directors' and the Company's commitment to a high standard
of governance.
Good corporate governance is the responsibility of the Board, and in this regard the Board has carried out a
review of the Company’s compliance with the Code during the period under review. As demonstrated by the
information set out in this statement, the Company believes that it has, save as indicated herein the section
entitled “Non-Compliance with the Code”, throughout the accounting period under review, applied the principles
and complied with the provisions of the Code. In the Non-Compliance Section, the Board indicates and explains
the instances where it has departed from or where it has not applied the Code, as allowed by the Code.
Part 1: Compliance with the Code
Principle 1: The Board
The Board’s principal purpose is to provide the required leadership of the Company, to set the present and future
strategy of the Company and to ensure proper oversight and accountability.
The Board currently comprises four non-executive directors (including the Chairman) and one executive director,
namely Elizabeth Ka Yee Kan, who is the CEO of the Company. All of the directors were elected by the
shareholders in general meeting.
The directors,
inter alia,
exercise prudent and effective control, are accountable for their or their delegates’
actions or inactions, regularly review management performance and have a broad knowledge of the business of
the Group. The directors are aware of their statutory and regulatory requirements. They allocate sufficient time
to perform their responsibilities and regularly attend Board meetings.
The Board delegates specific responsibilities to the Audit Committee. Further details in relation to the
responsibilities of the Board and the Audit Committee are found in Principles 4 and 5 of this Statement
respectively.
Principle 2: Chairman and Chief Executive
During 2022, the chairmanship of the Company was vested with Mr Lawrence Zammit and the position of Chief
Executive Officer was occupied by Ms Elizabeth Ka Yee Kan. The roles of the Chief Executive Officer and of the
Chairman are separate from each other.
The Chairman is responsible to lead the Board and to set its agenda. The Chairman ensures that the Board’s
discussions on any issue put before it, go into adequate depth, that the opinions of all the directors are taken
into account, and that all the Board’s decisions are supported by adequate and timely information. The Chairman
was also entrusted to ensure that the Company’s executive and management team develop a strategy which is
agreed to by the Board. The Chief Executive Officer led the Company’s management team and ensured that the
Company is being managed in line with the strategies and policies set by the Board.
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Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
Part 1: Compliance with the Code (continued)
Principle 3: Composition of the Board
At the beginning of 2022, the Board was composed of four (4) directors, one (1) of whom had executive functions
whilst the remaining three (3) directors were non-executive. Currently – following the Company’s annual general
meeting held on 28 June 2022 - the Board comprises four (4) non-executive directors, including the Chairman
and one executive director, namely Elizabeth Ka Yee Kan, who is the CEO of the Company. The Board considers
that the size of the Board is appropriate. The combined and varied knowledge, experience and skills of the Board
members provide the balance of competences that are required, add value to the functioning of the Board and
give direction to the Company, in line with the strategies and policies set out by the Board itself.
Lawrence Zammit and Franco Azzopardi are considered to be independent. In determining the independence or
otherwise of its directors, the Board considered, amongst others, the principles relating to independence of
directors contained in the Code, the Company’s own practice as well as general principles of good practice.
Specifically, in determining both Mr. Zammit and Mr. Azzopardi’s independence, the Board considered the fact
that they have both respectively been directors of the Company for more than twelve consecutive years. In this
regard, the Board is of the view that both Mr Lawrence Zammit and Mr. Franco Azzopardi have always
respectively maintained their independence of judgment, objectively and independently assessing the
Company’s and management’s performance and that both Mr Zammit and Mr. Azzopardi are mindful of, and
intend on maintaining independence, professionalism and integrity in carrying out their duties, responsibilities
and providing judgement as directors of the Company.
The presence of the executive director on the Board is designed to ensure that the Board has direct access to the
individuals having the prime responsibility for the executive management of the Company and the
implementation of approved polices. Each non-executive director has submitted the declaration to the Board
declaring their independence as stipulated under code provision 3.4.
Principle 4: The Responsibilities of the Board
The Board has the first level responsibility for executing the four basic roles of Corporate Governance, namely
accountability, monitoring, strategy formulation and policy development.
In fulfilling its mandate, the Board assumes responsibility to:
a) establish appropriate corporate governance standards;
b) review, evaluate and approve, on a regular basis, long-term plans for the Company;
c) review, evaluate and approve the Company’s budgets and forecasts;
d) review, evaluate and approve major resource allocations and capital investments;
e) review the financial and operating results of the Company on the basis of key performance indicators
and benchmarking the Company’s results against industry norms;
f) ensure appropriate policies and procedures are in place to manage risks and internal control;
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Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
Part 1: Compliance with the Code (continued)
Principle 4: The Responsibilities of the Board (continued)
g) review, evaluate and approve the overall corporate organisation structure, the assignment of
management responsibilities and plans for senior management development;
h) review, evaluate and approve compensation to senior management; and
i) review periodically the Company’s objectives and policies relating to social, health and safety and
environmental responsibilities.
The Board has established a clear internal and external reporting system to ensure that the Board has access to
accurate, relevant and timely information. The Board has ensured that policies and procedures are in place to
maintain the highest standards of corporate conduct of the Company and its employees.
During its meetings the Board regularly discusses the directors’ statutory and fiduciary duties, the Company’s
operations and prospects, the skills and competence of senior management, the general business environment
and the Board’s expectations.
Principle 5: Board Meetings
For the period under review, the Board has implemented its policy to meet at least once every quarter. Board
meetings concentrate mainly on strategy, operational performance and financial performance of the Company.
After each Board meeting and before the next, Board minutes that faithfully record attendance, key issues and
decisions are sent to the directors. As a matter of practice, Board meetings are set well in advance of their due
date and each director is provided with detailed Board papers relating to each agenda item. Management
prepares detailed reviews for each Board meeting covering all aspects of the Company’s business.
During 2022, the Board met five (5) times. Meetings were attended as follows:
Members
No of Meetings held: (5)
Attended
Lawrence Zammit (Chairman)
5
Franco Azzopardi
5
Elizabeth Ka Yee Kan
5
Victor Lap Lik Chu
5
Tarcisio Barbara
2*
*Mr Tarcisio Barbara was appointed on the 28 June 2022.
The Board also delegates specific responsibilities to the management team of the Company and the Audit
Committee, which operates under its formal terms of reference.
15
Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
Part 1: Compliance with the Code (continued)
Principle 5: Board Meetings (continued)
Board Committees
Audit Committee
The Board delegates certain responsibilities to the Audit Committee, the terms of reference of which reflect the
requirements stipulated in the Capital Markets Rules, as amended by virtue of Directive (EU) 2017/828 of the
European Parliament and of the Council of 17 May 2017, amending Directive 2007/36/EC regarding the
encouragement of long-term shareholder engagement. As part of its terms of reference, the Audit Committee
has the responsibility to, if required, vet, approve, monitor and scrutinise Related Party Transactions, if any,
falling within the ambits of the Capital Markets Rules and to make its recommendations to the Board on any such
proposed Related Party Transactions. The Audit Committee also establishes internal procedures and monitors
these on a regular basis. The terms of reference for the Audit Committee are designed both to strengthen this
function within the Company and to widen the scope of the duties and responsibilities of this Committee.
The Committee also has the authority to summon any person to assist it in the performance of its duties, including
the Auditors of the Company who are invited to all relevant meetings.
For the period under review, the Audit Committee was composed of Franco Azzopardi (non-executive director
and Chairman of the Audit Committee), Lawrence Zammit (non-executive director and Chairman of the Company)
and Victor Lap Lik Chu (non-executive director). The Chairman of the Audit Committee is appointed by the Board
and is independent of the Company. Lawrence Zammit and Franco Azzopardi are independent. In assessing their
independence, the Board considered the criteria set out in Capital Markets Rule 5.119, including far as both
Lawrence Zammit and Franco Azzopardi are concerned, the fact that they have respectively served as directors
of the Company for more than twelve consecutive years.
During 2022, the Audit Committee met seven (7) times.
Members
No of Meetings held: (7)
Attended
Franco Azzopardi
7
Lawrence Zammit
7
Victor Lap-Lik Chu*
2
*
Mr. Chu also sits on the Board of Camper & Nicholsons Marina Investments Limited. Mr. Chu does not
participate in meetings which discuss and, where deemed appropriate, approve related party transactions.
16
Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
Part 1: Compliance with the Code (continued)
Principle 5: Board Meetings (continued)
Board Committees (continued)
Audit Committee (continued)
The Board considers Mr Franco Azzopardi to be independent and competent in accounting and/or auditing on
the basis that Mr Azzopardi qualified as an accountant in 1985 and received a Master of Science in Finance from
the University of Leicester in 2006. In accordance with Capital Markets Rule 5.118, the Board considers the three
Audit Committee members as having the required competence jointly as a Committee due to their professional
background and experience in the marina industry, as well as in other sectors, at both national and international
level.
Principle 6: Information and Professional Development
Senior Executive Management
The CEO is responsible for the implementation of the strategies set by the Board, management of the business
of the Company and to deliver the results. The CEO reports directly to the Board of the Company. The Company’s
senior management, including the CEO, is appointed by the Board.
The Board is responsible for setting the business strategy and overall corporate governance of the Company. The
General Manager, Chief Operating Officer and Chief Financial Officer of the Company attended meetings of the
Board as and when requested. The attendance of such persons during Board meetings is designed to ensure that
all the directors have direct access to the day-to-day management of the Company’s business and to,
inter alia
,
ensure that the policies and strategies adopted by the Board are successfully implemented by the Company.
On joining the Board, a director is provided with briefings by the Company’s senior management on the different
activities within the Company. Each director is made aware of the Company’s on-going obligations in terms of
the Companies Act (Cap. 386), the Capital Markets Rules and other relevant legislation. Directors have access to
the advice and services of the Company Secretary who is also the legal counsel to the Board and the Company in
order to ensure that each director is aware of his or her legal obligations. The Company is also prepared to bear
the expense incurred by the directors requiring independent professional advice should they judge it necessary
to discharge their responsibilities as directors. The Board actively also considers the professional and technical
development of all directors and senior management.
The Company recognises the need for a succession plan for the senior management of the Company. The marina
service agreement with CNML provides the necessary tool for succession planning purposes. The value added by
having this marina service agreement with CNML is the possibility for the Company to tap in on any additional
resources it may require from time to time. This serves the purpose of also ensuring the continuity of operations
of the marina. Appointments and changes to senior management are the responsibility of the CEO and are
approved by the Board.
Notwithstanding that the Board has established no formal system yet, the Board and the CEO ensure that the
staff morale is duly monitored at all times.
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Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
Part 1: Compliance with the Code (continued)
Principle 7: Evaluation of the Board’s Performance
With respect to the year under review, the Board undertook an evaluation of its own performance, the
Chairman’s performance and that of its Committees. The Board did not per se appoint a committee to carry out
this performance evaluation, but the evaluation exercise was conducted through a discussion at a meeting of the
Board of Directors. Whilst the Board continuously seeks ways how to reasonably improve its governance
structures, the feedback obtained to date was not such to require material changes to the Company’s corporate
governance structures.
Principle 8: Committees
Remuneration Committee
As is permitted in terms of provision 8.A.2 of the Code, on the basis of the fact that the remuneration of the
directors is not performance-related, the Company has not set up a remuneration committee. The functions
which would otherwise be carried out by such committee are carried out by the Board which in so doing,
benchmarks the directors’ remuneration against the market.
Principle 9: Relations with Shareholders and with the Market and Principle 10: Institutional Investors
The Board is of the view that over the period under review the Company has communicated effectively with the
market through a number of company announcements that it published informing the market of significant
events happening within the Company, as well as the keeping the market updated with the financial performance
of the Company.
The Company also communicates with its shareholders through its Annual General Meeting (further detail is
provided under the section entitled General Meetings). The Chairman arranges for all directors to attend the
annual general meeting and for the chairman of the Audit Committee to be available to answer questions, if
necessary. The Chairman also ensures that sufficient contact is maintained with major shareholders to
understand issues and concerns.
Apart from the annual general meeting, the Company intends to continue with its active communication strategy
in the market and shall accordingly continue to communicate with its shareholders and the market by way of the
Annual Report and Financial Statements, by publishing its results on a six-monthly basis during the year and
through the directors’ statements published on a six-monthly basis, and by company announcements to the
market in general. The Company recognises the importance of maintaining a dialogue with the market to ensure
that its strategies and performance are well understood and disclosed to the market in a timely manner.
The Company's website
(https://cnmarinas.com/grand-harbour-marina/notification-publication/) also contains
information about the Company and its business which is a source of further information to the market. Individual
shareholders can raise matters relating to their shareholding at any time throughout the year and are provided
with the opportunity to ask questions at the Annual General Meeting. Minority shareholders may requisition a
meeting of shareholders in accordance with applicable law.
Principle 11: Conflicts of Interest
The directors are aware that their primary responsibility is always to act in the interest of the Company and its
shareholders as a whole irrespective of who appointed them to the Board. Acting in the interest of the Company
includes an obligation to avoid conflicts of interest. The Board is aware of any interest directors may have in the
share capital of the Company.
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Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
Part 1: Compliance with the Code (continued)
Principle 11: Conflicts of Interest (continued)
In the case of conflicts, the Company has strict policies in place which are based on applicable laws, rules and
regulations and which allow it to manage such conflicts, actual or potential, in the best interest of the Company.
Principle 12: Corporate Social Responsibility
The team at the Grand Harbour Marina has continued to be committed to the social responsibilities, in particular
with regards to conducting business in an ethical manner, protecting the environment and positively contributing
to the communities it is part of.
Grand Harbour Marina remains committed to its social responsibilities, conducting business in an ethical manner,
protecting the environment and positively contributing to the communities surrounding the marina. During
2022, the marina supported the Birgu Local Council with a sponsorship towards the Birgu Fest yearly highlight
event. The marina also co-sponsored the Birgu Children Christmas party and presented L-Istrina with a donation.
The company also hosted the Birgu Regatta rowing boats whilst the club building was being refurbished. During
September 2022, the company hosted ‘Rock the Fort’, an event organised by ‘Ten08’, a charitable NGO who
raised funds for ALS.
Three main international events were hosted, with the aim of promoting the Maltese islands. A sequence of the
Ridley Scott ‘Napoleon’ was shot at St Angelo wharf, the Baille de Suffren regatta which finished in Birgu and the
maxi yachts attending the Rolex Middle Sea race.
Part 2: Non-Compliance with the Code
Principle 4: Code Provisions 4.2.7:
Code Provision 4.2.7 recommends “
the development of a succession policy for the future composition of the Board
of directors and particularly the executive component thereof, for which the Chairman should hold key
responsibility
”. In the context of the appointment of directors being a matter reserved exclusively to the
Company’s shareholders (except where the need arises to fill a casual vacancy), considering that every director
retires from office at the AGM, the Company does not consider it feasible to have in place such a succession
policy. However, the recommendation to have in place such a policy will be kept under review. An active
succession policy is however in place for senior executive positions in the Company.
Principle 7: Code Provision
Code Provision 7.1 recommends that
the board should appoint a committee chaired by a non-executive Director
in order to carry out a performance evaluation of its role
. The Board did not appoint an
ad hoc
committee to carry
out this performance evaluation. The Board believes that the size of the Company and the Board itself does not
warrant the establishment of a committee specifically for the purpose of carrying out a performance evaluation
of its role. Whilst the requirement under Code Provision 7.1 might be useful in the context of larger companies
having a more complex set-up and a larger Board, the size of the Company’s Board is such that it should enable
it to evaluate its own performance without the requirement of setting up an
ad hoc
committee for this purpose.
Additionally, the Board also notes that its performance is subject to the constant scrutiny of the Board itself, the
Company’s shareholders, the market and the rules by which the Company is regulated as a listed company.
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Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
Part 2: Non-Compliance with the Code
Principle 8B (Nomination Committee):
Pursuant to the Company’s Articles of Association, the appointment of directors to the Board is reserved
exclusively to the Company’s shareholders (in line also with general and commonly accepted practice in Malta).
Any shareholder/s who in the aggregate hold not less than 200,000 shares having voting rights in the Company
is entitled to nominate a fit and proper person for appointment as a director of the Company. Furthermore, in
terms of the Memorandum and Articles of Association of the Company, the directors themselves are entitled to
make recommendations and nominations to the shareholders for the appointment of directors at the next
following annual general meeting. Within this context, the Board believes that the setting up of a Nomination
Committee is not required since the Board itself has the authority to recommend and nominate directors.
Notwithstanding this, the Board will retain under review the issue relating to the setting up of a Nomination
Committee.
Principle 9: Code Provision 9.3:
The Company does not have a formal mechanism in place as required by Code provision 9.3 to resolve conflicts
between minority shareholders and controlling shareholders and no such conflicts have arisen.
Internal Control and Risk Management
The Board reviews and is ultimately responsible for the Com
pany's system of internal controls and for reviewing
its effectiveness. Such a system is designed to manage rather than eliminate risk to achieve business objectives,
and can provide only reasonable, and not absolute, assurance against normal business risks or loss.
The key features of the Company’s system of internal control are as follows:
Organisation
The Company operates through the management team of the Company. Such team
operates within clear reporting lines and delegation of powers granted by resolution
of the Board.
Control environment
The Company is committed to the highest standards of business conduct and seeks
to maintain these standards across all of its operations. Company policies and
employee procedures are in place for the reporting and resolution of improper
activities.
The Company has an appropriate organisational structure for planning, executing,
controlling and monitoring business operations in order to achieve Company
objectives.
Risk identification
Company management is responsible for the identification and evaluation of key
risks applicable to their respective areas of business
.
Financial reporting
Financial reporting procedures are in place to identify, control and report major risks.
The Board receives periodic management information giving comprehensive analysis
of financial and business performance against prior periods and current budgets.
20
Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
General Meetings and Shareholders’ Rights
Conduct of general meetings
It is only shareholders whose details are entered into the register of members on the record date that are entitled
to participate in the general meeting and to exercise their voting rights. In terms of the Capital Markets Rules,
the record date falls 30 days immediately preceding the date set for the general meeting to which it relates. The
establishment of a record date and the entitlement to attend and vote at general meeting does not, however,
prevent trading in the shares after the said date.
In order for business to be transacted at a general meeting, a quorum must be present. In terms of the articles
of association, 51% of the nominal value of the issued equity securities entitled to attend and vote at the meeting
constitutes a quorum. If within half an hour, a quorum is not present, the meeting shall stand adjourned to the
same day in the next week, at the same time and place or to such other day and at such other time and place as
the directors may determine. In any event, the adjourned meeting must be held at least ten days after the final
convocation is issued and no new item must put on the agenda of such adjourned meeting. If at the adjourned
meeting a quorum is not yet present within half an hour from the time appointed for the meeting, the member
or members present shall constitute a quorum. Generally, the chairman of the Board presides as chairman at
every general meeting of the Company. At the commencement of any general meeting, the chairman may,
subject to applicable law, set the procedure which shall be adopted for the proceedings of that meeting. Such
procedure is binding on the members.
If the meeting consents or requires, the chairman shall adjourn a quorate meeting to discuss the business left
unattended or unfinished. If a meeting is adjourned for 30 days or more, notice of the quorate meeting must be
given as in the case of an original meeting. Otherwise, it is not necessary to give any notice of an adjourned
meeting or of the business to be transacted at such quorate meeting.
At any general meeting a resolution put to the vote shall be determined and decided by a show of hands, unless
a poll is demanded before or on the declaration of the result of a show of hands by:
I.
the chairman of the meeting; or
II.
by at least three (3) members present in person or by proxy; or
III.
any member or members present in person or by proxy and representing not less than one tenth of the
total voting power of all members having the right to vote at that meeting; or
IV.
a member or members present in person or by proxy holding equity securities conferring a right to vote at
the meeting, being equity securities on which an aggregate sum has been paid up equal to not less than
one-tenth of the total sum paid up on all the equity securities conferring that right.
Unless a poll is so demanded, a declaration by the chairman that a resolution has on a show of hands been carried
or carried unanimously, or by a particular majority, or lost together with an entry to that effect in the minute
book, shall constitute conclusive evidence of the fact without need for further proof. If a resolution requires a
particular majority in value, in order for the resolution to pass by a show of hands, there must be present at that
meeting a member or members holding in the aggregate at least the required majority. A poll demanded on the
election of the chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other
question shall be taken at the discretion of the chairman. In the case of equality of votes, whether on a show of
hands or on a poll, the chairman has a second or casting vote. On a show of hands every member present in
person or by proxy shall have one vote, and on a poll every member shall have one vote for each equity security
carrying voting rights of which he is the holder provided that all calls or other sums presently payable by him in
respect of equity securities have been paid.
21
Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
General Meetings and Shareholders’ Rights (continued)
Proxy
Every member is entitled to appoint one person to act as proxy holder to attend and vote at a general meeting
instead of him. The proxy holder shall enjoy the same rights to participate in the general meeting as those to
which the member thus represented would be entitled. If a member is holding shares for and on behalf of third
parties, such member shall be entitled to grant a proxy to each of his clients or to any third party designated by
a client and the said member is entitled to cast votes attaching to some of the shares differently from the others.
In the case of voting by a show of hands, a proxy who has been mandated by several members and instructed to
vote by some shareholders in favour of a resolution and by others against the same resolution shall have one
vote for and one vote against the resolution.
The instrument appointing a proxy must be deposited at the office or by electronic mail at the address specified
in the notice convening the meeting not less than forty-eight (48) hours before the time for holding the meeting
or, in the case of a poll, not less than forty-eight (48) hours before the time appointed for the taking of the poll.
The same applies to the revocation of the appointment of a proxy.
A form of instrument of proxy shall be in such form as may be determined by the directors and which would allow
a member appointing a proxy to indicate how he would like his proxy to vote in relation to each resolution.
Including items on the agenda
A shareholder or shareholders holding not less than 5% of the issued share capital may include items on the
agenda of the general meeting and table draft resolutions for items included on the agenda of a general meeting.
Such right must be exercised by the shareholder at least 46 days before the date set for the general meeting to
which it relates.
Questions
Shareholders have the right to ask questions which are pertinent and related to the items on the agenda.
Electronic voting
In terms of the Articles of Association of the Company, the directors may establish systems to:
a)
allow persons entitled to attend and vote at general meetings of the Company to do so by electronic
means in accordance with the relevant provisions of the Capital Markets Rules; and
b)
allow for votes on a resolution on a poll to be cast in advance.
Where a shareholder requests the Company to publish a full account of a poll, the Company is required to publish
the information on its website not later than 15 days after the general meeting at which the result was obtained.
Further details on the conduct of a general meeting and shareholders’ rights are contained in the memorandum
and articles of association of the Company and in chapter 12 of the Capital Markets Rules.
22
Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
Remuneration Statement
As is permitted in terms of provision 8.A.2 of the Code, on the basis of the fact that the remuneration of the
directors is not performance-related, the Company has not set up a remuneration committee. The functions
which would otherwise be carried out by such Committee are carried out by the Board.
Remuneration Policy – Senior Executives
The Board determines the framework of the overall remuneration policy and individual remuneration
arrangements for its senior executives based on recommendations from the Compensation Committee of its
Parent company. The Board considers that these remuneration packages reflect market conditions and are
designed to attract appropriate quality executives to ensure the efficient management of the Company. During
the current year under review there have been no significant changes in the Company’s remuneration policy and
no significant changes are intended to be effected thereto in the year ahead. The terms and conditions of
employment of each individual within the executive team are set out in their respective indefinite contracts of
employment with the Company. None of these contracts contain provisions for termination payments and other
payments linked to early termination. The Company’s senior executives may be paid a bonus by the Company of
up to 10% of their respective salary. The payment of such bonus is based on the financial performance of the
Company.
Moreover, share options, pension schemes and profit sharing are currently not part of the Company’s
remuneration policy.
The Company has opted not to disclose the amount of remuneration paid to its senior executives on the basis
that it is commercially sensitive.
Remuneration Policy – Directors
The Board determines the framework of the remuneration policy for the members of the Board as a whole. The
maximum annual aggregate emoluments that may be paid to the directors is approved by the shareholders in
the Annual General Meeting. The financial statements disclose an aggregate figure in respect of the directors’
remuneration which, with respect to the period under review, amounted to thirty-eight thousand Euros (€38k)
(entirely representing a fixed remuneration)
.
As mentioned above, there are no share options and the directors
do not receive variable remuneration. Directors’ emoluments are designed to reflect the time committed by
directors to the Company’s affairs. The remuneration of the directors is not performance related.
Signed on behalf of the Company’s Board of Directors on 18 April 2023 by Lawrence Zammit (Chairman) and
Franco Azzopardi (Director) as per Directors’ Declaration on ESEF Annual Financial Report submitted in
conjunction with the Annual Report Financial Statements 2022.
23
Grand Harbour Marina p.l.c.
Other Disclosures in terms of the Capital Markets Rules
Pursuant to Listing Capital Markets 5.70
5.70.1
Material Contracts in relation to which a director of the Company was directly or indirectly
interested
Marina Services Agreement between the Company and Camper & Nicholsons Marinas Limited (“CNML”)
On the 1 July 2007, the Company entered into a Marina Service Agreement with CNML for an initial period of 3
years and which continues in force thereafter. CNML is entitled to receive from the Company the following
fees/charges:
1.
in respect of recruitment, operational services and auditing - 2.5% on the sum of the total amounts (gross
receipts) from the marina operations with a minimum payment of GBP18k per annum;
2.
sales and marketing - GBP3.2k per month and 2.5% on licences in excess of one year;
3.
commissioning - sums shall be agreed from time to time in connection with projects undertaken;
4.
project services - charges are agreed from time to time; and
5.
financial controller support - a rate of GBP48 per hour for actual time spent on GHM work.
Royalty Agreement between the Company and Camper & Nicholsons Marinas International Limited
The Company had formerly entered into an agreement with CNML. The agreement dated 1 April 2004 gives right
for the marina to use the name of “C&N” for its operations. CNML was entitled to branding charges of GBP1k per
month. This agreement had been replaced by an agreement dated 1 July 2007 between GHM and Camper &
Nicholsons (Designs) Limited. Under the terms of this agreement, GHM was obliged to pay Camper & Nicholsons
(Designs) Limited 0.25% of turnover as royalties with a minimum amount of GBP10k per annum. This agreement
was terminated on 19 December 2008 and replaced by another agreement with Camper & Nicholsons Marinas
International Limited. Under the terms of this new agreement the Company is obliged to pay Camper &
Nicholsons Marinas International Limited 1.50% of operating turnover as royalties.
Loans between the Company and Camper & Nicholsons Marina Investments Limited (“CNMIL” or the “Parent
Company”).
The Company entered into three loan agreements with CNMIL. By virtue of an agreement dated July 2022, the
Company rolled over the loan of €2,250k to the Parent Company, which rolled-over loan has an interest rate
payable to the Company of 4.50% per annum, and is now repayable by the 30 September 2024. By virtue of an
agreement dated 31 December 2022, the Company also rolled-over the loan of €600k to the Parent Company,
which rolled-over loan has an interest rate payable to the Company of 4% per annum, and is repayable by the 31
December 2024.
Additionally, by virtue of two loan notes, the Company granted in favour of Camper & Nicholsons Marinas Limited
(“
CNML
”), a company registered and incorporated in England, bearing company registration number 2764678,
and with its registered address at “35, Ballards Lane, London, N3 1XW, England”, two loans in an aggregate
amount of €2,682,000 (€450,000 under the first loan note, and an aggregate of €2,232,000 under the second
loan respectively) (the “
CNML
Loan Notes
”). The amounts due to the Company in terms of the CNML Loan Notes
bear interest at the fixed rate of 5% per annum. The first loan note is to be repaid in full, together with interest
by 31 March 2027; the second loan note is to be repaid in full, together with interest by 30 September 2028.
The following directors of the Company are also directors of Camper & Nicholsons Marina Investments Limited
and / or other companies forming part of the same group of companies:
Victor Lap Lik Chu
Elizabeth Ka Yee Kan
24
Grand Harbour Marina p.l.c.
Other Disclosures in terms of the Capital Markets Rules (continued)
Pursuant to Capital Markets Rule 5.70 (continued)
Pursuant to Capital Markets Rule 5.70.2
Company Secretary:
Dr Louis de Gabriele LL.D.
Registered Office of Company:
Vittoriosa Wharf
Vittoriosa BRG 1721
Malta
Telephone:
(+356) 21 800 700
25
Grand Harbour Marina p.l.c.
Remuneration Report
Year Ended 31 December 2022
This statement on the remuneration of Grand Harbour Marina p.l.c.’s (C 26891) (the “
Company
”) Board of
directors and Chief Executive Officer has been drawn up in compliance with the requirements of Chapter 12 of
the Capital Markets Rules, and contains information required by the provisions of Appendix 12.1 of the Capital
Markets Rules.
The Company’s remuneration of its board of directors is based on the remuneration policy adopted and approved
by the shareholders at the annual general meeting of 11 September 2021.
That policy is available for inspection
on the Company’s website at https://ghm.com.mt/static/23b6fcbc758c8567ad44fc92bb84a346/AGM-2021-
Remuneration-Policy.pdf
1.
The Remuneration Policy
The Company’s remuneration policy determines the basis for remuneration of all members of the board of
directors, and the Chief Executive Officer (“
CEO
”) of the Company.
It defines the principles and guidelines that
apply to both fixed and variable remuneration, including all bonuses and benefits, which can be awarded to
directors and, in the case of variable remuneration, indicate the relative proportion between fixed and variable
components.
The Company’s remuneration policy is intended as a measure to attract and retain suitable candidates for the
position of directors, calculated to provide the Company with the appropriate skills, technical knowledge
experience and expertise both for the determination of policies and strategies of the Company as well as the
supervisory role of the board, which in turn contributes to the performance of the Company. The CEO does not
get any form of remuneration from the Company.
The Policy was implemented without any deviations from the procedure for the implementation of the
remuneration policy as defined in Chapter 12 of the Capital Markets Rules. However, it is worth noting that whilst
the remuneration policy provides that the Board mandated the Compensation Committee established by Camper
& Nicholsons Marina Investments Limited (the Parent Company) to evaluate the remuneration of the senior
executives of the Company and formulate recommendations to the Board, by the end of 2021, the Board took
over this role and started benchmarking the remuneration of the directors against the market.
The overall remuneration of the board consists of two components which are designed to reflect the time
committed by the directors to the Company’s affairs:
•
The basic remuneration, consisting of fixed
honoraria
as sitting members of the board;
•
Additional remuneration where a member of the board is assigned additional duties to sit on or chair a
board committee.
2.
The Decision-making process with respect to remuneration
The aggregate emoluments that may be paid to the directors (excluding the CEO) is decided upon by the
shareholders in general meeting following a recommendation made to shareholders by the board.
The board then decides on the remuneration of the Chairman and the other non-executive directors consisting
of a fixed honorarium to each director.
The board also establishes and fixes the remuneration of the CEO with
respect to her executive role within the Company.
26
Grand Harbour Marina p.l.c.
Remuneration Report (continued)
Year Ended 31 December 2022
3.
Key principles of remuneration
During the period under review, the Board was composed of five (5) directors, one (1) of whom had executive
functions whilst the remaining four (4) directors were non-executive. Currently, the Board comprises four (4)
non-executive directors, including the Chairman, namely Lawrence Zammit, Victor Lap Lik Chu, Franco Azzopardi
and Tarcisio Barbara and one executive director, namely Elizabeth Ka Yee Kan, who is the CEO of the Company.
The aggregate remuneration approved by the shareholders for the financial year ended 31 December 2022 was
retained at a maximum of €232,937.
This includes the two components of remuneration.
The Chairman and the non-executive directors
Fixed component
The board believes that in line with local practice the fixed honorarium for non-executive directors is the principal
component that compensates directors for their contribution as members of the board.
The Chairman of the
board receives a higher honorarium in view of the role of acting as the most senior non-executive director on the
board and as the person responsible for chairing board meetings, co-ordinating board assignments, and generally
represents the Company in its interactions with the authorities and key stakeholders.
Non-executive directors who are also delegated to sit on a sub-committee of the board or otherwise chair such
sub-committee are paid fixed additional fixed honoraria for each such assignment.
None of the directors have service contracts with the Company and each non-executive director serves from one
annual general meeting to the next, when the appointment of directors is conducted at the annual general
meeting.
Accordingly, none of the non-executive directors have any entitlement to any compensation if they are
removed from office.
Such removal would require an ordinary resolution of the shareholders at a general
meeting.
The Directors are entitled to be paid travel and other reasonable expenses incurred by them in the performance
of their duties as directors.
The Company does not remunerate the Chairman or the other non-executive
directors in any other manner, nor does it provide any loans or other guarantees to them.
Variable component
In line with the Remuneration Policy approved by shareholders, the non-executive directors are not entitled to a
any form of variable remuneration.
Table 1 below shows the overall annual remuneration of non-executive:
Office
Fixed Honorarium
Additional Remuneration for
sitting on subcommittees
Total
€
€
€
Lawrence Zammit (Chairman)
22,000
3,000
25,000
Franco Azzopardi
10,000
3,000
13,000
Tarcisio Barbara
7,000
-
7,000
Victor Lap Lik Chu
nil
nil
nil
Table 1 - Remuneration of Non-Executive Directors
27
Grand Harbour Marina p.l.c.
Remuneration Report (continued)
Year Ended 31 December 2022
Executive Director
The Company has one executive, that is also appointed as member of the board (not
ex officio
).
The executive
director is the CEO.
Fixed Remuneration- Salary
The CEO does not get any form of remuneration from the Company.
Variable Remuneration- Bonus
The CEO does not get any form of remuneration from the Company.
There has been no change in the remuneration of directors over the course of the year 2022. In line with a
decreasing number of directors sitting on the Board of the Company, during the past five-years the aggregate
remuneration of directors decreased but the individual remuneration of the remaining directors remained
unchanged.
THIS REMUNERATION STATEMENT HAS BEEN PREPARED BY THE DIRECTORS AND IS SIGNED BY THE CHAIRMAN
AS AUTHORISED BY THE BOARD.
IN ACCORDANCE WITH CAPITAL MARKETS RULE 12.26N, THE EXTERNAL
AUDITORS HAVE CHECKED THAT ALL INFORMATION, REQUIRED IN TERMS OF APPENDIX 12.1 OF CHAPTER 12
OF THE CAPITAL MARKETS RULES, HAS BEEN INCLUDED.
Signed on behalf of the Company’s Board of Directors on 18 April 2023 by Lawrence Zammit (Chairman) and
Franco Azzopardi (Director) as per Directors’ Declaration on ESEF Annual Financial Report submitted in
conjunction with the Annual Report Financial Statements 2022.
28
Grand Harbour Marina p.l.c.
Statement of financial position
As at 31 December 2022
2022
2021
2022
2021
Group
Group
Company
Company
Note
€000
€000
€000
€000
ASSETS
Property, plant and equipment
16
4,243
4,565
4,243
4,565
Deferred costs on property, plant and
equipment
478
482
478
482
Right-of-use asset
21
5,133
5,260
5,133
5,260
Net investment lease receivable
21
-
1
-
1
Equity-accounted investee
18
3,648
714
2,174
2,174
Investment in debt securities
19
4,474
5,806
4,474
5,806
Loans to related parties
20
5,173
2,668
5,173
2,668
Non-current assets
23,149
19,496
21,675
20,956
Loans to related parties
20
308
3,248
308
3,248
Trade and other receivables
22
1,254
1,132
1,254
1,132
Cash and cash equivalents
23
4,031
2,466
4,031
2,466
Current assets
5,593
6,846
5,593
6,846
Total assets
28,742
26,342
27,268
27,802
EQUITY
Share capital
24
2,400
2,400
2,400
2,400
Exchange translation reserve
24
83
73
-
-
Fair value reserve
24
(209)
(12)
(209)
(12)
Retained earnings
2,172
(316)
781
1,217
Total equity attributable to equity holders
of the Company
4,446
2,145
2,972
3,605
LIABILITIES
Lease liability
21
6,217
6,159
6,217
6,159
Debt securities in issue
26
14,790
14,751
14,790
14,751
Deferred tax liabilities
15
790
921
790
921
Non-current liabilities
21,797
21,831
21,797
21,831
Lease liability
21
12
22
12
22
Bank overdraft
26
2
1
2
1
Taxation payable
15
-
100
-
100
Trade and other payables
27
1,452
1,200
1,452
1,200
Contract liabilities
28
1,033
1,043
1,033
1,043
Current liabilities
2,499
2,366
2,499
2,366
Total liabilities
24,296
24,197
24,296
24,197
Total equity and liabilities
28,742
26,342
27,268
27,802
The accompanying notes are an integral part of these financial statements. The financial statements on pages 28 to 100 were
approved and authorised for issue by the Board of Directors on 18 April 2023 and signed on behalf of the Company’s Board of
Directors by Lawrence Zammit (Chairman) and Franco Azzopardi (Director) as per Directors’ Declaration on ESEF Annual
Financial Report submitted in conjunction with the Annual Report Financial Statements 2022.
29
Grand Harbour Marina p.l.c.
Statement of profit or loss and other comprehensive income
For the year ended 31 December 2022
2022
2021
2022
2021
Group
Group
Company
Company
Note
€000
€000
€000
€000
Continuing operations
Revenue
10
3,902
3,621
3,902
3,621
Direct costs
11
(774)
(667)
(774)
(667)
Gross profit
3,128
2,954
3,128
2,954
Selling and marketing expenses
11
(45)
(26)
(45)
(26)
Administrative expenses:
Depreciation on plant and equipment
16
(276)
(276)
(276)
(276)
Depreciation on right-of-use-asset
21
(143)
(143)
(143)
(143)
Other administrative expenses
11
(1,486)
(1,252)
(1,486)
(1,252)
Operating profit
1,178
1,257
1,178
1,257
Impairment reversal/ (loss) on financial
assets
29
15
(98)
15
(98)
Finance income
13
412
329
412
329
Finance costs
13
(1,113)
(1,090)
(1,113)
(1,090)
(686)
(859)
(686)
(859)
Share of equity-accounted investee profit/
(loss), net of tax
18
1,334
(889)
-
-
Profit/ (loss) before tax
1,826
(491)
492
398
Income tax expense
15
(268)
(293)
(268)
(293)
Profit/ (loss) for the year attributable to
equity holders of the Company
1,558
(784)
224
105
Other comprehensive (loss)/ income:
Items that are or may be reclassified
subsequently to profit or loss
Monetary gain on restating non-monetary
items in line with IAS 29
18
1,590
-
-
-
Foreign currency translation differences
18
10
301
-
-
Unrealised fair value movement on
debt securities at fair value
through other comprehensive
income (FVOCI)
19
(199)
84
(199)
84
Cumulative movement in fair value of debt
securities disposed of during the year
reclassified to profit or loss
19
4
(5)
4
(5)
Expected credit losses on debt securities at
FVOCI
19
(2)
-
(2)
-
Other comprehensive income/ (loss) for
the year, net of tax attributable to equity
holders of the Company
1,403
380
(197)
79
Total comprehensive income/ (loss) for the
year attributable to equity holders of the
Company
2,961
(404)
27
184
Earnings per share (€)
14
0.078
(0.039)
The accompanying notes are an integral part of these financial statements.
30
Grand Harbour Marina p.l.c.
Statement of changes in equity
For the Year Ended 31 December 2022
Share
capital
Translation
reserve
Fair value
reserve
Retained
earnings
Total
€000
€000
€000
€000
€000
Group
Balance at 1 January 2021
2,400
(228)
(91)
468
2,549
Total comprehensive (loss)/ income:
Loss for the year
-
-
-
(784)
(784)
Other comprehensive income:
Foreign currency translation
differences
-
301
-
-
301
Unrealised fair value movement on debt
securities at fair value through other
comprehensive income
-
-
84
-
84
Cumulative movement in fair value of debt
securities disposed of during the year
reclassified to profit or loss
-
-
(5)
-
(5)
Other comprehensive income for the year
-
301
79
-
380
Total comprehensive income/ (loss) for
the year
-
301
79
(784)
(404)
Balance at 31 December 2021
2,400
73
(12)
(316)
2,145
Balance at 1 January 2022
2,400
73
(12)
(316)
2,145
Total comprehensive (loss)/ income:
Profit for the year
-
-
-
1,558
1,558
Other comprehensive income:
Monetary gain on restating non-monetary
items in line with IAS 29
-
-
-
1,590
1,590
Foreign currency translation
differences
-
10
-
-
10
Unrealised fair value movement on debt
securities
at
fair
value
through
other
comprehensive income
-
-
(199)
-
(199)
Cumulative movement in fair value of debt
securities
disposed of during the year
reclassified to profit or loss
-
-
4
-
4
Expected credit losses on debt securities at
FVOCI
-
-
(2)
-
(2)
Other comprehensive (loss)/ income for the
year
-
10
(197)
1,590
1,403
Total comprehensive (loss)/ income for the
year
-
10
(197)
3,148
2,961
Transactions with owners of the Company:
Dividends paid
-
-
-
(660)
(660)
Balance at 31 December 2022
2,400
83
(209)
2,172
4,446
The accompanying notes are an integral part of these financial statements.
31
Grand Harbour Marina p.l.c.
Statement of changes in equity (continued)
For the Year Ended 31 December 2022
Share
capital
Fair value
reserve
Retained
earnings
Total
€000
€000
€000
€000
Company
Balance at 1 January 2021
2,400
(91)
1,112
3,421
Total comprehensive income:
Profit for the year
-
-
105
105
Other comprehensive income:
Unrealised
fair
value
movement
on
debt
securities
at
fair
value
through
other
comprehensive income
-
84
-
84
Cumulative movement in fair value of debt
securities
disposed
of
during
the
year
reclassified to profit or loss
-
(5)
-
(5)
Other comprehensive income for the year
-
79
-
79
Total comprehensive income for the year
-
79
105
184
Balance at 31 December 2021
2,400
(12)
1,217
3,605
Balance at 1 January 2022
2,400
(12)
1,217
3,605
Total comprehensive (loss)/ income:
Profit for the year
-
-
224
224
Other comprehensive (loss)/ income:
Unrealised fair value movement on debt
securities at fair value through other
comprehensive income
-
(199)
-
(199)
Cumulative movement in fair value of debt
securities disposed of during the year
reclassified to profit or loss
-
4
-
4
Expected credit losses on debt securities at
FVOCI
-
(2)
-
(2)
Other comprehensive (loss)/ income for the
year
-
(197)
-
(197)
Total comprehensive (loss)/ income for the
year
-
(197)
224
27
Transactions with owners of the Company:
Dividends paid
-
-
(660)
(660)
Balance at 31 December 2022
2,400
(209)
781
2,972
The accompanying notes are an integral part of these financial statements.
32
Grand Harbour Marina p.l.c.
Statement of cash flows
For the Year Ended 31 December 2022
2022
2021
2022
2021
Group
Group
Company
Company
Note
€000
€000
€000
€000
Cash flows from operating activities
Profit/ (loss) for the year
1,558
(784)
224
105
Adjustments for:
-
-
Depreciation on plant and equipment
16
277
276
277
276
Depreciation on right-of-use assets
21
143
143
143
143
Change in expected credit losses on financial assets
29
(15)
98
(15)
98
Share of (profit)/ loss of equity-accounted investee,
net of tax
18
(1,334)
889
-
-
Net finance costs, excluding realised fair value gain
13
698
766
698
766
Net loss on assets retired
16
156
24
156
24
Tax expense
15
268
293
268
293
1,751
1,705
1,751
1,705
Changes in:
-
Trade and other receivables
(296)
663
(296)
663
-
Contract liabilities
(10)
(81)
(10)
(81)
-
Trade and other payables
250
(206)
250
(206)
Cash generated from operating activities
1,695
2,081
1,695
2,081
Interest paid on lease liabilities
21
(305)
(294)
(305)
(294)
Interest paid on debt securities in issue
(675)
(674)
(675)
(674)
Taxes paid
(500)
(755)
(500)
(755)
Net cash from operating activities
215
358
215
358
Cash flows from investing activities
Interest received on corporate debt securities
250
193
250
193
Acquisition of property, plant and equipment
16
(101)
(34)
(101)
(34)
Disposal of corporate debt securities
19
1,157
157
1,157
157
Principal received from related parties
31
515
157
515
157
Interest received from related parties
31
244
178
244
178
Proceeds from subleased properties
21
1
2
1
2
Net cash from investing activities
2,066
653
2,066
653
Cash flows used in financing activities
Dividends paid
24
(660)
-
(660)
-
Payment of lease liabilities
21
(57)
(74)
(57)
(74)
Net cash used in financing activities
(717)
(74)
(717)
(74)
Net increase in cash and cash equivalents
1,564
937
1,564
937
Cash and cash equivalents at 1 January*
2,465
1,528
2,465
1,528
Cash and cash equivalents at 31 December*
23
4,029
2,465
4,029
2,465
*Cash and cash equivalents include bank overdrafts that are repayable on demand and form an integral part of the Group’s
cash management.
The accompanying notes are an integral part of these financial statements.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
33
1
Reporting entity
Grand Harbour Marina p.l.c. (the “Company”) is a public listed company domiciled and
incorporated in Malta, with registration number C26891, and the registered office of which is
situated at Vittoriosa Wharf, Vittoriosa, Malta.
The consolidated financial statements of the Group as at and for the year ended 31 December
2022 comprise the Company and its subsidiary, (together referred to as the “Group”) and the
Group’s beneficial interest of 45% in a joint arrangement, IC Cesme Marina Yatirim, Turizm ve
Islemeleri Anonim Sirketi (“IC Cesme”). The Group is itself a subsidiary of Camper & Nicholsons
Marina Investments Limited (“CNMIL” or the “Parent Company”).
The principal activities of the
Group are the development operation and management of marinas.
2
Basis of accounting
Legal Notice 19 of 2009 as amended by Legal Notice 233 of 2016, Accountancy Profession
(Accounting and Auditing Standards) (Amendments) Regulations, 2016 (the “Regulation”), defines
compliance with generally accepted accounting principles and practice as adherence to
International Financial Reporting Standards (IFRS) as adopted by the EU for financial periods
starting on or after 1 January 2008. Article 4 of Regulation 1606/2002/EC requires that, for each
financial year starting on or after 1 January 2005, companies governed by the law of an EU Member
State shall prepare their consolidated financial statements in conformity with IFRS as adopted by
the EU if, at their reporting date, their securities are admitted to trading on a regulated market of
any EU Member State.
Consequently, the separate and the consolidated financial statements are prepared in conformity
with IFRS as adopted by the EU.
Details of the Group’s accounting policies are included in note 7.
3
Basis of measurement
The financial statements have been prepared on the historical cost basis except investments in
debt securities which are measured at fair value on each reporting date, and the investment in a
joint venture that is measured under the equity method.
Additionally, with effect from the current
year and as disclosed in note 6, the Group’s equity-accounted investee operates in a
hyperinflationary economy and its current year financial information has accordingly been
expressed in terms of the measuring unit current at the reporting date as a result of the effects of
inflation.
The financial statements have also been prepared on a going concern basis as explained below:
Going concern basis
The directors have, at the time of approving the financial statements, a reasonable expectation
that the Group has adequate resources to continue in operational existence for the foreseeable
future. Thus, they continue to adopt the going concern basis of accounting in preparing the
financial statements.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
34
4
Functional and presentation currency
These financial statements are presented in Euro (€), which is the Company’s functional currency.
All amounts have been rounded to the nearest thousand, unless otherwise indicated.
5
Use of judgements and estimates
In preparing these financial statements management has made judgements and estimates that
affect the application of the Group’s accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates
are recognised prospectively.
5.1
Judgements, assumptions and estimation uncertainties
Information about judgements, assumptions and estimation uncertainties that have the most
significant effects on the amounts recognised in the financial statements, is provided below:
-
As further described in note 18.4, in assessing impairment, management estimates the
recoverable amount of the Group’s investment in IC Cesme based on expected future cash
flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions
about future operating results and the determination of a suitable discount rate.
5.2
Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of fair
values, for both financial and non-financial assets and liabilities.
The Group regularly reviews significant unobservable inputs and valuation adjustments.
If third
party information is used to measure fair values, then the Group assesses the evidence obtained
from third parties to support the valuation in accordance with IFRSs as adopted by the EU.
Significant valuation issues are reported to the Group’s audit committee.
When measuring the fair value of an asset or a liability, the Group uses observable market data as
far as possible. Fair values are categorised into different levels in a fair value hierarchy based on
the inputs used in the valuation techniques as follows:
•
Level 1
: quoted prices (unadjusted) in active markets for identical assets or liabilities.
•
Level 2
: inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly (i.e. as price) or indirectly (i.e. derived from prices).
•
Level 3
: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
35
5
Use of judgements and estimates (continued)
5.2
Measurement of fair values (continued)
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the
fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level
of the fair values hierarchy as the lowest level input that is significant to the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred.
Further information about the
assumptions made in measuring fair values is included in notes 19 and 29.
5.3
Hyperinflation
The Group exercised judgement in determining whether the Turkish economy (being the economy
in the Group’s investment in joint venture, IC Cesme, operates), has become hyperinflationary in
2022, and consequently whether the functional currency of its joint venture is the currency of a
hyperinflationary economy.
Various characteristics of the economic environment of Turkey are considered. These
characteristics include, but are not limited to, whether:
•
the cumulative inflation rate over three years is approaching, or exceeds, 100%;
•
the general population prefers to keep its wealth in non-monetary assets or in a relatively
stable foreign currency;
•
prices are quoted in a relatively stable foreign currency;
•
sales or purchase prices take expected losses of purchasing power during a short credit
period into account; and
•
interest rates, wages and prices are linked to a price index.
The analysis of the cumulative inflation rate over three years resulted in the Group considering
whether Turkey’s economy was hyperinflationary. Based on the available information, the Group
concluded that this economy is currently hyperinflationary.
Management exercises judgement as to when a restatement of the financial statements of a Group
entity becomes necessary. Following management’s assessment, the Group’s investment in its
joint venture, IC Cesme, has been accounted for as an entity operating in a hyperinflationary
economy. As such, the investment in IC Cesme has been expressed in terms of the measuring unit
current at the reporting date. Further information is disclosed in notes 6 and 7.3.
6
Significant events
The Group’s equity-accounted investee, IC Cesme, operates in Turkey. The International Monetary
Fund, in its World Economic Outlook database on Turkey, reported a 3-year cumulative rate of
inflation of 74% and an annual rate of inflation of 36% as of December 2021, and in its latest
October 2022 World Economic Outlook report
forecasts an annual rate of inflation of 73% (2023:
37%) and a 3-year cumulative rate of inflation of 171% (2023: 223%). Further, the Turkish Statistical
Institute reported a 3-year cumulative rate of inflation of 156% as of December 2022.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
36
6
Significant events (continued)
The Group’s management considered the above events in light of the accounting rules for entities
operating in hyperinflationary economies and determined that the cumulative inflation rate over
three years provides evidence that the Turkish economy became hyperinflationary during 2022.
In view of this, Cesme’s financial position and performance as at 31 December 2022 are being
reported by applying
IAS 29 Financial Reporting in Hyperinflationary Economies
. The cumulative
impact of adjusting the Group’s result for the effects of hyperinflation is detailed in note 18.
Management has also assessed the impact of the Eastern Europe conflict and concluded that it
has no impact on the Group’s financial position.
7
Significant accounting policies
The Group has consistently applied the following accounting policies to all periods presented in
these financial statements.
7.1
Basis of consolidation
7.1.1
Business combinations
The Group accounts for business combinations using the acquisition method when control is
transferred to the Group (see note 7.1.2). The consideration transferred in the acquisition is
generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that
arises is tested annually for impairment (see note 7.13.2). Any gain on a bargain purchase is
recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if
related to the issue of debt or equity securities. The consideration transferred does not include
amounts related to the settlement of pre-existing relationships. Such amounts are generally
recognised in profit or loss.
Any contingent consideration is measured at fair value at the acquisition date. If an obligation to
pay contingent consideration that meets the definition of a financial instrument is classified as
equity, then it is not remeasured, and settlement is accounted for within equity. Otherwise, other
contingent consideration is remeasured at fair value at each reporting date and subsequent
changes in the fair values of the contingent consideration are recognised in profit or loss.
7.1.2
Interest in equity-accounted investees
The Group’s interests in equity-accounted investees comprises an interest in a joint venture.
A joint venture is an arrangement in which the Group has joint control, whereby the Group has
rights to the net assets of the arrangement, rather than rights to its assets and obligations for its
liabilities.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
37
7
Significant accounting policies (continued)
7.1
Basis of consolidation (continued)
7.1.2
Interest in equity-accounted investees (continued)
Interest in joint ventures is accounted for using the equity method in the consolidated financial
statements. They are recognised initially at cost, which includes transaction costs. Subsequent to
initial recognition, the consolidated financial statements include the Group’s share of the profit or
loss and other comprehensive income of equity-accounted investees, until the date at which
significant influence or joint control ceases. Appropriate adjustments to the Group’s share of the
joint venture’s profit or loss after acquisition are made in order to account for depreciation on the
depreciable assets based on their fair values at acquisition date.
Investments in equity-accounted investees are stated in the separate financial statements of the
Company at cost less impairment, if any. Any amounts advanced / incurred for which settlement
is neither planned nor likely to occur in the foreseeable future, are treated as an extension to the
Company’s net investment therein and included in the carrying amount.
7.1.3
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-
group transactions, are eliminated. Unrealised gains arising from transactions with equity-
accounted investees are eliminated against the investment to the extent of the Group’s interest in
the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the
extent that there is no evidence of impairment.
7.2
Foreign currency
7.2.1
Foreign currency transactions
Transactions in foreign currencies are translated into the respective functional currencies of Group
companies at the exchange rates at the date of the transactions. Monetary assets and liabilities
denominated in foreign currencies are translated into the functional currency at the exchange rate
at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a
foreign currency are translated into the functional currency at the exchange rate when the fair
value was determined. Non-monetary items that are measured based on historical cost in a foreign
currency are translated at the exchange rate at the date of the transaction.
Foreign currency
differences are generally recognised in profit or loss and presented within finance costs, unless
they relate to operating or investing activities.
7.2.2
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments
arising on acquisition, are translated into euro at the exchange rates at the reporting date. The
income and expenses of foreign operations are translated into euro at the exchange rates at the
dates of the transactions.
Foreign currency differences are recognised in OCI, and accumulated in the foreign currency
translation reserve, except to the extent that the translation difference is allocated to non-
controlling interests.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
38
7
Significant accounting policies (continued)
7.3
Hyperinflation
Where it has been determined that a Group entity or an equity-accounted investee has a functional
currency that is the currency of a hyperinflationary economy, the respective entity first applies the
requirements of
IAS 29, Financial Reporting in Hyperinflationary Economies
.
IAS 21, The Effects of
Changes in Foreign Exchange Rates
, which addresses the translation of the financial information
into the Group’s presentation currency, is only applied after the requirements of IAS 29 have been
complied with.
Under IAS 29, the financial statements of Group entities and equity-accounted investees whose
functional currencies are the currencies of hyperinflationary economies are adjusted in terms of
the measuring unit current at the end of the reporting period.
Comparative amounts for such
entities are, in accordance with IAS 29, also adjusted in the current year and remeasured in terms
of the measuring unit current at the end of the current reporting period.
The carrying amounts of non-monetary assets and liabilities are adjusted under IAS 29 to reflect
the change in the general price index from the date of acquisition to the end of the reporting
period. An impairment loss is recognised in profit or loss if the restated amount of a non-monetary
item exceeds its estimated recoverable amount. On initial application of hyperinflation accounting,
prior period financial information is also restated as if the economy had always been
hyperinflationary.
Gains or losses on the net monetary position are recognised in profit or loss.
All items recognised in the income statement are restated by applying the change in the general
price index from the dates when the items of income and expenses were initially earned or
incurred.
At the beginning of the first period of application, the components of equity, except retained
earnings, are restated by applying a general price index from the dates the components were
contributed or otherwise arose. These restatements are recognised directly in equity as an
adjustment to opening retained earnings. Restated retained earnings are derived from all other
amounts in the restated statement of financial position. If on initial application of hyperinflation
accounting the restated value of the non-monetary assets exceed their recoverable amount, the
initial adjustment is capped at the recoverable amount and the net increase is recorded directly in
retained earnings. At the end of the first period and in subsequent periods, all components of
equity are restated by applying a general price index from the beginning of the period or the date
of contribution, if later.
After having first applied IAS 29, the Group then applies IAS 21 to translate foreign currency
balances into its presentation currency (euro). Nevertheless, even though Group entities and
equity-accounted investees whose functional currencies are the currencies of hyperinflationary
economies restate their own comparative financial information as set out above, the Group does
not restate comparative amounts in its consolidated financial statements because the Group’s
presentation currency is that of a non-hyperinflationary economy. The Group’s comparative
financial information therefore remains unchanged from what it presented in the prior year’s
consolidated financial statements.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
39
7
Significant accounting policies (continued)
7.3
Hyperinflation (continued)
Differences between the comparative amounts as reported in the Group’s consolidated financial
statements, and as restated by Group entities and equity-accounted investees whose functional
currencies are the currencies of hyperinflationary economies, are recognised in the Group’s OCI
for the current year.
The Turkish economy has been classified as hyperinflationary with effect from 2022. Accordingly,
the results, financial position of the Group’s joint venture, IC Cesme, have been expressed in terms
of the measuring unit current at the reporting date. For further details, refer to notes 5.3 and 6.
7.4
Revenue from contracts with customers
Information about the Group’s accounting policies relating to contracts with customers is provided
in note 10.
7.5
Employee benefits
The Group contributes towards the State defined contribution plan in accordance with local
legislation and to which it has no commitment beyond the payment of contributions. Obligations
for contributions to the defined contribution plans are expensed as the related service is provided.
7.6
Government grants
The Group recognises a government grant related to the COVID-19 wage supplement. Such grant
compensates the Group for wages and salaries incurred and is offset against the related
expenditure in profit or loss on a systematic basis in the periods in which the related expenses are
recognised, as the conditions for receiving the grant are met during the same period in which the
related expenses have been recognised.
7.7
Finance income and finance costs
The Group and the Company’s finance income and finance costs include:
-
interest income on investments in debt securities and loans to related parties,
-
interest expense on the lease liability,
-
interest expense on bonds in issue,
-
interest expense on bonds in issue (including amortization of bond issue costs),
-
the net gain or loss on the disposal of investments in debt securities measured at FVOCI,
-
impairment losses (and reversals) on investments in debt securities carried at FVOCI and
-
foreign currency gains and losses on financial assets and liabilities, other than those of an
operating nature.
Interest income and interest expense is recognised using the effective interest method. The
‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or
receipts through the expected life of the financial instruments to:
-
the gross carrying amount of the financial asset; or
-
the amortised cost of the financial liability.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
40
7
Significant accounting policies (continued)
7.7
Finance income and finance costs (continued)
In calculating interest income and expense, the effective interest rate is applied to the gross
carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of
the liability.
However, for financial assets that have become credit impaired subsequent to initial recognition,
interest income is calculated by applying the effective interest rate to the amortised cost of the
financial asset. If the asset is no longer credit-impaired, then the calculation of interest income
reverts to the gross basis.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their
intended use or sale, are capitalised from the time that expenditure for these assets and borrowing
costs are being incurred and activities that are necessary to prepare these assets for their intended
use or sale are in progress. Borrowing costs are capitalised until such time as the assets are
substantially ready for their intended use or sale. Borrowing costs are suspended during extended
periods in which active development is interrupted. All other borrowing costs are recognised as an
expense in profit or loss in the period in which they are incurred.
7.8
Income tax
Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to
the extent that it relates to a business combination, or items recognised directly in equity or in
other comprehensive income.
7.8.1
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the
year and any adjustment to the tax payable or receivable in respect of previous years. The amount
of current tax payable or receivable is the best estimate of the tax amount expected to be paid or
received that reflects uncertainty related to income taxes, if any. It is measured using tax rates
enacted or substantively enacted at the reporting date. Current tax also includes any tax arising
from dividends.
7.8.2
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised for:
-
temporary differences on the initial recognition of assets or liabilities in a transaction that is
not a business combination and that affects neither accounting nor taxable profit or loss;
-
temporary differences related to investments in subsidiaries, associates and joint
arrangements to the extent that the Group is able to control the timing of the reversal of
temporary differences and it is probable that they will not reverse in the foreseeable future;
-
taxable temporary differences arising on the initial recognition of goodwill.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
41
7
Significant accounting policies (continued)
7.8
Income tax (continued)
7.8.2
Deferred tax (continued)
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible
temporary differences, to the extent that it is probable that future taxable profits will be available
against which they can be used. Future taxable profits are determined based on the reversal of
relevant taxable temporary differences.
If the amount of taxable temporary difference is
insufficient to recognise a deferred tax asset in full, then future taxable profits, adjusted for
reversals of existing temporary differences, are considered, based on the business plans for the
Company.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent
that it is no longer probable that the related tax benefit will be realised; such reductions are
reversed when the probability of future taxable profits improves.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the
extent that it has become probable that future taxable profits will be available against which they
can be used.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences
when they reverse, using tax rates enacted or substantively enacted at the reporting date. The
measurement of deferred tax reflects the tax consequences that would follow from the manner in
which the Group expects, at the reporting date, to recover or settle the carrying amount of its
assets and liabilities.
7.9
Property, plant and equipment
7.9.1
Recognition and measurement
Property, plant and equipment of the Group includes superyacht berths that have been completed
but not yet licensed (see below), pontoons, improvements to leased property, motor vehicles,
office equipment and assets in the course of construction.
Items of property, plant and equipment are measured at cost less accumulated depreciation and
any accumulated impairment losses. Cost includes expenditure that is directly attributable to the
acquisition of the asset. Any common costs incurred for the berths are allocated equally.
As part of its operating activities, Grand Harbour Marina p.l.c. licenses out superyacht berths,
typically for periods ranging between 25 to 30 years. The cost of such berths is apportioned
between that part attributable to the initial licensing period, which is recognised immediately in
profit or loss, and that part (the residual amount) attributable to the time period which extends
beyond the initial licensing period. The method of cost apportionment which is based on the
discounted revenue from each long-term sale represents a fair reflection of the pattern of future
economic benefits estimated to accrue from the licensing of such berths. The residual amount is
classified in the balance sheet as ‘deferred costs’ and included with non-current assets.
When parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
42
7
Significant accounting policies (continued)
7.9
Property, plant and equipment (continued)
7.9.1
Recognition and measurement (continued)
Property, plant and equipment are derecognised on disposal or when no future economic benefits
are expected from their use or disposal. The gain or loss on disposal of an item of property, plant
and equipment is determined by comparing the proceeds from disposal with the carrying amount
of property, plant and equipment, and is recognised net in profit or loss.
7.9.2
Assets under construction
Properties in the course of construction for production, supply or administrative purposes are
carried at cost, less any recognised impairment loss. Cost includes professional fees and, for
qualifying assets, borrowing costs capitalised in accordance with the Group’s accounting policy.
Depreciation of these assets, determined on the same basis as other property assets, commences
when the assets are ready for their intended use.
7.9.3
Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits
associated with the expenditure will flow to the Group and the cost can be measured reliably. The
cost of day-to-day servicing of property, plant and equipment are recognised in profit or loss as
incurred.
7.9.4
Depreciation
Depreciation is calculated to write off the cost of items of property, plant and equipment less their
estimated residual values using the straight-line method over their estimated useful lives and is
recognised in profit or loss. Significant components of individual assets are assessed, and if a
component has a useful life that is different from the remainder of that asset, that component is
depreciated separately. Berths developed and related improvements to leased property are
depreciated over the shorter of the lease term and the useful life of the buildings and
improvements, unless it is reasonably certain that the Group will obtain ownership of the land by
the end of the lease term. The estimated useful lives of property, plant and equipment for current
and comparative periods are as follows:
•
superyacht berths
50 years
•
landscaping costs
50 years
•
pontoon berths
25 years
•
improvements to leased property
10 years
•
utility modules and switchboards
10 years
•
cable infrastructure
10 years
•
motor vehicles, including shipping vessels
5 years
•
marine and office equipment
5 years
In note 16.1, landscaping costs, improvements to leased property and utility modules and
switchboards are classified under “Improvements to leased property, landscaping and
switchboards”, while cable infrastructure and marine and office equipment are classified under
“Cable infrastructure, marine & office equipment”.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
43
7
Significant accounting policies (continued)
7.9
Property, plant and equipment (continued)
7.9.4
Depreciation (continued)
Depreciation commences when the asset is available for use. Superyacht berths are depreciated
from the date of full construction up to the point in time when the long-term licensing contract is
signed with the licensee, at which time the carrying amount of such berths is apportioned and
accounted for as explained in note 7.9.1. Assets in the course of construction are not depreciated,
as explained in note 7.9.2.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and
adjusted if appropriate.
7.10
Financial instruments
7.10.1
Recognition and initial measurement
Financial assets and financial liabilities are initially recognised when the Group becomes a party to
the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or
financial liability is initially measured at fair value plus, for an item not at Fair Value through Profit
or Loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade
receivable without a significant financing component is initially measured at the transaction price.
7.10.2
Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI - debt
investment; FVOCI – equity investment; or FVTPL.
The classification of financial assets under IFRS
9
Financial Instruments
is generally based on the business model in which a financial asset is
managed and its contractual cash flows characteristics.
The Group has financial assets measured at amortised cost which comprise trade and other
receivables, loans to related parties and cash and cash equivalents.
The Group also has debt
instruments measured at FVOCI which comprise investments in corporate debt securities.
Financial assets are not reclassified subsequent to their initial recognition unless the Group
changes its business model for managing financial assets, in which case all affected financial assets
are reclassified on the first day of the first reporting period following the change in the business
model.
A financial asset is measured at amortised cost if it meets both of the following conditions and is
not designated as at FVTPL:
-
it is held within a business model whose objective is to hold assets to collect contractual cash
flows; and
-
its contractual terms give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
44
7
Significant accounting policies (continued)
7.10
Financial instruments (continued)
7.10.2
Classification and subsequent measurement (continued)
Financial assets (continued)
A debt investment is measured at FVOCI if it meets both of the following conditions and is not
designated as at FVTPL:
-
it is held within a business model whose objective is achieved by both collecting contractual
cash flows and selling financial assets; and
-
its contractual terms give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may
irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election
is made on an investment-by-investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are
measured at FVTPL. On initial recognition, the Group may irrevocably designate a financial asset
that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL
if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
The Group makes an assessment of the objective of the business model in which a financial asset
is held at a portfolio level because this best reflects the way the business is managed and
information is provided to management. The information considered includes the policies and
objectives for the portfolio and the operation of those policies in practice, how the performance
of the portfolio is evaluated and reported to Group management, the risks that affect the
performance of the business model and how those risks are managed and the frequency, volume
and timing of sales of financial assets in prior periods, the reasons for such sales and expectations
about future sales activity.
Transfers of financial assets to third parties in transactions that do not qualify for derecognition
are not considered sales for this purpose, consistent with the Group’s continuing recognition of
the assets.
Financial assets that are held for trading or are managed and whose performance is evaluated on
a fair value basis are measured at FVTPL.
Financial assets – Assessment whether contractual cash flows are solely payments of principal and
interest
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on
initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the
credit risk associated with the principal amount outstanding during a particular period of time and
for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit
margin.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
45
7
Significant accounting policies (continued)
7.10
Financial instruments (continued)
7.10.2
Classification and subsequent measurement (continued)
Financial assets – Assessment whether contractual cash flows are solely payments of principal and
interest (continued)
In assessing whether the contractual cash flows are solely payments of principal and interest, the
Group considers the contractual terms of the instrument. This includes assessing whether the
financial asset contains a contractual term that could change the timing or amount of contractual
cash flows such that it would not meet this condition.
In making this assessment, the Group considers:
-
contingent events that would change the amount or timing of cash flows;
-
terms that may adjust the contractual coupon rate, including variable-rate features;
-
prepayment and extension features; and
-
terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse
features).
A prepayment feature is consistent with the solely payments of principal and interest criterion if
the prepayment amount substantially represents unpaid amounts of principal and interest on the
principal amount outstanding, which may include reasonable additional compensation for early
termination of the contract.
Additionally, for a financial asset acquired at a discount or premium to its contractual par-amount,
a feature that permits or requires prepayment at an amount that substantially represents the
contractual par amount plus accrued (but unpaid) contractual interest (which may also include
reasonable additional compensation for early termination) is treated as consistent with this
criterion if the fair value of the prepayment feature is insignificant at initial recognition.
Financial assets – Subsequent measurement and gains and losses
Financial assets at FVTPL
These assets are subsequently measured at fair value. Net gains and losses, including any interest
or dividend income, are recognised in profit or loss.
Financial assets at amortised cost
These assets are subsequently measured at amortised cost using the effective interest method.
The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and
losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is
recognised in profit or loss.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
46
7
Significant accounting policies (continued)
7.10
Financial instruments (continued)
7.10.2
Classification and subsequent measurement (continued)
Debt investments at FVOCI
These assets are subsequently measured at fair value. Interest income calculated using the
effective interest method, foreign exchange gains and losses and impairment are recognised in
profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses
accumulated in OCI are reclassified to profit or loss.
Equity investments at FVOCI
These assets are subsequently measured at fair value. Dividends are recognised as income in profit
or loss unless the dividend clearly represents a recovery of part of the cost of the investment.
Other net gains and losses are recognised in OCI and are never reclassified to profit or loss.
Financial liabilities – Classification, subsequent measurement and gains and losses
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is
classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such
on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and
losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are
subsequently measured at amortised cost using the effective interest method. These financial
liabilities comprise bank loans and overdrafts, trade payables and debt securities in issue. Interest
expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on
derecognition is also recognised in profit or loss.
7.10.3
Derecognition
Financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the
financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction
in which substantially all of the risks and rewards of ownership of the financial asset are transferred
or in which the Group neither transfers nor retains substantially all of the risks and rewards of
ownership and it does not retain control of the financial asset.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged,
cancelled or expired. The Group also derecognises a financial liability when its terms are modified
and the cash flows of the modified liability are substantially different, in which case a new financial
liability based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished
and the consideration paid (including any non-cash assets transferred or liabilities assumed) is
recognised in profit or loss.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
47
7
Significant accounting policies (continued)
7.10
Financial instruments (continued)
7.10.4
Offsetting
Financial assets and financial liabilities are offset, and the net amount presented in the statement
of financial position when, and only when, the Group currently has a legally enforceable right to
set off the amounts and it intends either to settle them on a net basis or to realise the asset and
settle the liability simultaneously.
7.11
Provisions, contingent assets and contingent liabilities
Provisions are recognised if the Group has a present legal or constructive obligation as a result of
a past event, and it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made of the amount of the
obligation. Provisions are measured at the directors’ best estimate of the expenditure required to
settle the present obligation at the end of the reporting period. If the effect of the time value of
money is material, provisions are determined by discounting the expected future cash flows at a
pre-tax rate that reflects current market assessments of the time value of money and, where
appropriate, the risks specific to the liability. The unwinding of the discount is recognised as finance
cost. Provisions are not recognised for future operating losses.
Any reimbursement that the Group is virtually certain to collect from a third party with respect to
the obligation is recognised as a separate asset. However, this asset may not exceed the amount
of the related provision.
No provision is recognised if an outflow of economic resources as a result of present obligations is
not probable. Such events and conditions are disclosed as contingent liabilities unless the outflow
of resources is remote.
7.12
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
ordinary shares, net of any tax effects, are recognised as a deduction from equity. Income tax
relating to transaction costs of an equity transaction is accounted for in accordance with IAS 12
Income Taxes
.
7.13
Impairment
7.13.1
Non-derivative financial assets
Financial instruments
The Group recognises loss allowances for Expected Credit Losses (“ECLs”) on:
-
financial assets measured at amortised cost; namely trade and other receivables, lease
receivables, loans to related parties and cash at bank; and
-
debt investments measured at FVOCI, namely investments in corporate debt securities.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
48
7
Significant accounting policies (continued)
7.13
Impairment (continued)
7.13.1
Non-derivative financial assets (continued)
Financial instruments (continued)
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following,
which are measured at 12-month ECLs:
-
debt securities that are determined to have low credit risk at the reporting date; and
-
financial assets for which credit risk (i.e. the risk of default occurring over the expected life of
the financial instrument) has not increased significantly since initial recognition.
Loss allowances for trade and other receivables are always measured at an amount equal to
lifetime ECLs. For lease receivables, the Company applies the simplified approach above as its
accounting policy.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECLs, the Group considers reasonable and supportable
information that is relevant and available without undue cost or effort. This includes both
quantitative and qualitative information, based on the Group’s historical experience and informed
credit assessment and including forward-looking information. Forward-looking information
includes the future prospects of the industries in which the Company’s debtors operate, as well as
consideration of various external sources of actual and forecast economic information that relate
to the Company’s core operations. In assessing whether the credit risk on a financial instrument
has increased significantly since initial recognition, the Group compares the risk of a default
occurring on the financial instrument as at the reporting date with the risk of a default occurring
on the financial instrument as at the date of initial recognition.
The Group considers a financial asset to be in default when the debtor is unable to pay its credit
obligations to the Group in full. The Group rebuts the 90 days past due presumption since it has
reasonable and supportable information to demonstrate that a more lagging default criterion is
more appropriate.
The Group considers a debt security to have low credit risk when its credit risk rating is equivalent
to the globally understood definition of investment grade.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a
financial instruments.
12-month ECLs are the portion of ECLs that result from default events that are possible within the
12 months after the reporting date (or a shorter period if the expected life of the instrument is less
than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over
which the Group is exposed to credit risk.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
49
7
Significant accounting policies (continued)
7.13
Impairment (continued)
7.13.1
Non-derivative financial assets (continued)
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present
value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in
accordance with the contract and the cash flows that the Group expects to receive). ECLs are
discounted at the effective interest rate of the financial asset.
In the case of short-term, interest-
free financial assets, such as trade receivables, ECLs are not discounted.
If evidence of a significant increase in credit risk at the individual instrument level is not yet
available, the Group performs the assessment of significant increases in credit risk on a collective
basis by considering information on, for example, a group or sub-group of financial instruments.
Where the Company does not have reasonable and supportable information that is available
without undue cost or effort to measure lifetime ECL on an individual instrument basis, lifetime
ECL is measured on a collective basis. In such instances, the financial instruments are grouped on
the basis of shared credit risk characteristics.
Presentation of allowance for ECL in the statement of financial position
Loss allowances for financial assets measured at amortised cost are deducted from the gross
carrying amount of the assets. Impairment losses related to loans to related parties, cash at bank
and trade and other receivables, are presented separately in the statement of profit or loss and
other comprehensive income. For debt securities at FVOCI, the loss allowance is presented in profit
or loss below the Operating Profit line item and is recognised in OCI.
Write-off
The gross carrying amount of a financial asset is written off when the Group has no reasonable
expectations of recovering a financial asset in its entirety or a portion thereof. The Group
individually makes an assessment with respect to the timing and amount of write-off based on
whether there is a reasonable expectation of recovery. The Group expects no significant recovery
from the amount written off. However, financial assets that are written off could still be subject to
enforcement activities in order to comply with the Group’s procedures for recovery of amounts
due.
7.13.2
Non-financial assets
At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other
than deferred tax assets) to determine whether there is any indication of impairment. If any such
indication exists, then the asset’s recoverable amount is estimated.
Recoverable amount is estimated for the individual asset. For impairment testing, if it is not
possible to estimate the recoverable amount of the individual asset, assets are grouped together
into the smallest group of assets that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or CGUs.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
50
7
Significant accounting policies (continued)
7.13
Impairment (continued)
7.13.2
Non-financial assets (continued)
Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are
expected to benefit from the synergies of the combination. The recoverable amount of an asset or
CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the
estimated future cash flows, discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset
or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable
amount. Impairment losses are recognised in profit or loss. They are allocated first to reduce the
carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of
the other assets in the CGU on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is
reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation, if no impairment loss had been recognised.
7.13.3
Equity-accounted investees
The impairment assessment in respect of the Group’s investment in equity-accounted investees
comprises two successive steps:
(1)
apply the equity method to recognise the investor’s share of any impairment losses for
the investee’s identifiable assets: and
(2)
when there is an indication of a possible impairment, test the investment as a whole and
recognise any additional impairment loss.
An impairment loss in respect of an equity-accounted investee is measured by comparing the
recoverable amount of the investment with its’ carrying amount. An impairment loss is recognised
in profit or loss and is reversed if there has been a favourable change in the estimates used to
determine the recoverable amount.
7.14
Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract
is, or contains, a lease if the contract conveys the right to control the use of an identified asset for
a period of time in exchange for consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Group assesses whether:
-
the contract involves the use of an identified asset – this may be specified explicitly or
implicitly, and should be physically distinct or represent substantially all of the capacity of a
physically distinct asset. If the supplier has a substantive substitution right, then the asset is
not identified;
-
the Group has the right to obtain substantially all of the economic benefits from use of the
asset throughout the period of use; and
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
51
7
Significant accounting policies (continued)
7.14
Leases (continued)
-
the Group has the right to direct the use of the asset. The Group has this right when it has the
decision-making rights that are most relevant to changing how and for what purpose the
asset is used. In rare cases where the decision about how and for what purpose the asset is
used is predetermined, the Group has the right to direct the use of the asset if either:
-
the Group has the right to operate the asset; or
-
the Group designed the asset in a way that predetermines how and for what
purpose it will be used.
i.
As a lessee
At commencement or on modification of a contract that contains a lease component, the Group
allocates the consideration in the contract to each lease component on the basis of its relative
stand-alone prices.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or before the commencement date, plus any
initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset
or to restore the underlying asset or the site on which it is located, less any lease incentives
received. The lease term is determined as the non-cancellable period of a lease, together with
both:
(a) periods covered by an option to extend the lease if the lessee is reasonably certain to exercise
that option; and
(b) periods covered by an option to terminate the lease if the lessee is reasonably certain not to
exercise that option.
The right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the end of the lease term, unless the lease transfers ownership of the
underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset
reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be
depreciated over the useful life of the underlying asset, which is determined on the same basis as
those of property and equipment. In addition, the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The
estimated useful lives of right-of-use assets as at 31 December 2022 are as follows:
•
Properties
3 to 13 years
•
Water space
76 years from the balance sheet date
The lease liability is initially measured at the present value of the lease payments that are not paid
at the commencement date, discounted using the interest rate implicit in the lease or, if that rate
cannot be readily determined, the Group’s incremental borrowing rate. The Group uses its
incremental borrowing rate as the discount rate
.
The Group determines its incremental borrowing rate by obtaining interest rates from various
external financing sources, particularly the Group’s debt securities in issue and makes certain
adjustments to reflect the terms of the lease and type of the asset leased.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
52
7
Significant accounting policies (continued)
7.14
Leases (continued)
i.
As a lessee (continued)
Lease payments included in the measurement of the lease liability comprise the following:
-
fixed payments, including in-substance fixed payments;
-
variable lease payments that depend on an index or a rate, initially measured using the index
or rate as at the commencement date;
-
amounts expected to be payable under a residual value guarantee; and
-
the exercise price under a purchase option that the Group is reasonably certain to exercise,
lease payments in an optional renewal period if the Group is reasonably certain to exercise an
extension option, and penalties for early termination of a lease unless the Group is reasonably
certain not to terminate early.
Variable lease payments that do not depend on an index or rate (such as revenue-based payments)
are recognised as an expense as incurred (see note 11.1).
The lease liability is measured at amortised cost using the effective interest method. It is
remeasured when there is a change in future lease payments arising from a change in an index or
rate, if there is a change in the Group’s estimate of the amount expected to be payable under a
residual value guarantee, if the Group changes its assessment of whether it will exercise a
purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the
carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of
the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets that do not meet the definition of investment property,
and lease liabilities, separately in the statement of financial position.
ii.
As a lessor
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance
lease or an operating lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers
substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is
the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this
assessment, the Group considers certain indicators such as whether the lease is for the major part
of the economic life of the asset.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
53
7
Significant accounting policies (continued)
7.14
Leases (continued)
ii.
As a lessor (continued)
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the
sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-
of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease
is a short-term lease to which the Group applies the exemption described above, then it classifies
the sub-lease as an operating lease.
If an arrangement contains lease and non-lease components, then the Group applies IFRS 15 to
allocate the consideration in the contract.
The Group applies the derecognition and impairment requirements in IFRS 9 to the net investment
in the lease (see note 7.13). The Group further regularly reviews estimated unguaranteed residual
values used in calculating the gross investment in the lease.
The Group recognises lease payments received under operating leases as income on a straight-line
basis over the lease term.
Amounts due from lessees under a finance lease are presented in the statement of financial
position as receivables at the amount of the net investment in the lease and include initial direct
costs. Finance lease income is allocated to accounting periods so as to reflect a constant periodic
rate of return on the Company’s net investment in the finance lease.
7.15
Earnings per share
The Group presents basic earnings per share data for its ordinary shares. Basic earnings per share
is calculated by dividing the profit attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares outstanding during the period.
7.16
Segment reporting
Segment results that are reported to the CEO and the Board of Directors Grand Harbour Marina
p.l.c. (the Group’s chief operating decision makers), include items directly attributable to a
segment as well as those that can be allocated on a reasonable basis.
An operating segment is a component of an entity:
(a) that engages in business activities from which it may earn revenues and incur expenses;
(b) whose operating results are regularly reviewed by the chief operating decision maker to make
decisions about resources to be allocated to the segment and assess its performance; and
(c) for which discrete financial information is available.
7.17
Fair value measurement
‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date in the principal or, in
its absence, the most advantages market to which the Group has access at that date.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
54
7
Significant accounting policies (continued)
7.17
Fair value measurement (continued)
The fair value of a liability reflects its non-performance risk. Fair values have been determined
based on the following methods:
7.17.1
Non-derivative financial assets measured at amortised cost
The fair value of non-derivative financial assets measured at amortised cost is estimated at the
present value of future cash flows, discounted at the market rate of interest at reporting date.
7.17.2
Non-derivative financial liabilities measured at amortised cost
The fair value of non-derivative financial liabilities measured at amortised cost is calculated based
on the present value of future principal and interest cash flows, discounted at the market rate of
interest at the reporting date.
7.17.3
Debt instruments measured at FVOCI
The fair value of investments in corporate debt securities is based on quoted prices in active
markets for those same instruments.
7.18
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits and short-term highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value. Bank overdrafts that are repayable on demand and form an
integral part of the company’s cash management are included as a component of cash and cash
equivalents for the purpose of the statement of cash flows and are presented in current liabilities
on the statement of financial position.
8
International Financial Reporting Standards effective in the current year and
those in issue but not yet effective
8.1
International Financial Reporting Standards applicable during the current year
The following International Financial Reporting Standards were applicable during the current year:
•
Amendments to IAS 37 – Onerous contracts – cost of fulfilling a contract (effective for financial
years on or after 1 January 2022). The amendments deal with costs a company should include
as the cost of fulfilling a contract when assessing whether a contract is onerous.
•
Amendments to IFRS 3 – Reference to the conceptual framework (effective for financial years
on or after 1 January 2022). The amendments update an outdated reference in IFRS 3 without
significantly changing its requirements.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
55
8
International Financial Reporting Standards effective in the current year and
those in issue but not yet effective (continued)
8.1
International Financial Reporting Standards applicable during the current year (continued)
•
Amendments to IAS 16 – Property, plant and equipment – proceeds before intended use
(effective for financial years on or after 1 January 2022). The amendments address the
proceeds from selling items produced while bringing an asset into the location and condition
necessary for it to be capable of operating in the manner intended by management.
•
Amendments to IFRS 9 (as part of the 2018 – 2020 Annual Improvement cycle) – Financial
instruments (effective for financial years on or after 1 January 2022). The amendments clarify
which fees an entity includes when it applies the ’10 per cent test’ in assessing whether to
derecognise a financial liability.
•
Amendment to IFRS16 – COVID-19 – Related Rent Concessions beyond 30 June 2021
(effective for financial years on or after 1 April 2021, earlier application permitted).
8.2
International Financial Reporting Standards issued but not yet effective
Up to the date of approval of these financial statements, certain new standards, amendments and
interpretations to existing standards have been published but are not yet effective for the current
reporting period and which have not been adopted early.
The changes resulting from the following standards, interpretations and amendments are in the
process of being assessed by the directors to determine their applicability and potential effect on
the separate and consolidated financial statements of the Group:
•
Amendments to IAS 1 – Classification of Liabilities as Current or Non-Current (effective for
financial years on or after 1 January 2024 by virtue of the October 2022 Amendments) and
Non-Current Liabilities with Covenants. The amendments affect only the presentation of
liabilities in the statements of financial position and not the amount or timing of recognition
of any asset, liability income or expenses, or the information that entities disclose about those
items. The amendments:
a)
clarify that the classification of liabilities as current or non-current should be based on
rights that are in existence at the end of the reporting period and align the wording in
all affected paragraphs to refer to the "right" to defer settlement by at least twelve
months and make explicit that only rights in place "at the end of the reporting period"
should affect the classification of a liability, and covenants that need to be complied
with after the reporting period should not affect that classification;
b)
clarify that classification is unaffected by expectations about whether an entity will
exercise its right to defer settlement of a liability;
c)
make clear that settlement refers to the transfer to the counterparty of cash, equity
instruments, other assets or services; and
d)
Introduce additional presentation and disclosure requirements for liabilities that are
subject to covenants.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
56
8
Standards issued but not yet effective (continued)
8.2
International Financial Reporting Standards issued but not yet effective (continued)
•
Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting Policies
(effective for financial years on or after 1 January 2023). The amendments are intended to
help preparers in deciding which accounting policies to disclose in their financial statements.
Material accounting policy information is now required to be disclosed instead of significant
accounting policies. The amendments explain how an entity can identify material accounting
policy information and give examples of when accounting policy information is likely to be
material. Accounting policy information may be material due to its nature and is material if
users of an entity’s financial statements would need it to understand other material
information in financial statements.
In addition, IFRS Practice Statement 2 has been amended by adding guidance and examples
to explain and demonstrate the application of the ‘four-step materiality process’ to
accounting policy information in order to support the amendments to IAS 1.
•
Amendments to IAS 8 – Definition of Accounting Estimates (effective for financial years on or
after 1 January 2023). The changes to IAS 8 focus entirely on accounting estimates and
introduces a definition of “accounting estimates”; it also removes the explanation of what
constitutes a change in accounting estimates. Entities develop accounting estimates if
accounting policies require items in financial statements to be measured in a way that
involves measurement uncertainty. A change in accounting estimate that results from new
information or new developments is not the correction of an error and a change in an
accounting estimate may affect only the current period’s profit or loss, or the profit or loss of
both the current period and future periods.
•
Amendments to IAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single
Transaction (effective for financial years on or after 1 January 2023). The aim of the
amendments is to reduce diversity in the reporting of deferred tax on leases and
decommissioning obligations.
An entity applies the amendments to transactions that occur on or after the beginning of the
earliest comparative period presented. It also, at the beginning of the earliest comparative
period presented, recognises deferred tax for all temporary differences related to leases and
decommissioning obligations and recognises the cumulative effect of initially applying the
amendments as an adjustment to the opening balance of retained earnings (or other
component of equity, as appropriate) at that date.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
57
9
Operating segments
9.1
Information about reportable segments
Under the “management approach” to segment reporting, the Group has two reportable
segments, namely, the “Grand Harbour Marina” located in Malta, and the “IC Cesme Marina”
located in Turkey. These two geographically operating segments are managed separately as they
have their own resource and capital requirements. For each of the reporting segments, the Chief
Executive Officer and the Board of Directors reviews internally financial and operating reports on
a regular basis. The business operation in each of these two operating segments is the ownership
and operation of marina facilities providing berthing and ancillary services for yachts and
superyachts. Information regarding the result of each reporting segment is included in this note.
Performance is measured based on segment revenues and segment profit or loss before tax as
management believes that this information is most relevant in evaluating the result of both
segments relative to other entities that operate in the same industry. The amounts reported for IC
Cesme Marina reflect the full amount (100%) of its assets, liabilities, revenues and expenses prior
to the application of the equity method.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
58
9
Operating segments (continued)
9.1
Information about reportable segments (continued)
31 December 2022
Grand
Harbour
Marina
IC Cesme
Marina
Total
Reportable
Segments
€000
€000
€000
Reportable segment assets
27,268
15,705
42,973
Reportable segment non-financial
non-current assets
12,028
12,699
24,727
Reportable segment liabilities
(24,296)
(10,711)
(35,007)
Segment revenues- external
3,902
5,084
8,986
Finance income
412
157
569
Finance costs
(1,113)
(2,499)
(3,612)
Impairment reversal on financial assets
15
-
15
Depreciation
(420)
(208)
(628)
Direct costs
(774)
(628)
(1,402)
Selling, marketing and other
administrative expenses
(1,530)
(2,217)
(3,747)
Income tax expense
(268)
(1,457)
(1,725)
Capital expenditure
101
9,553
9,654
Reconciliation to Consolidated Amounts
Total
Reportable
Segments
Eliminations
Group
€000
€000
€000
Reportable segment assets
42,973
(14,231)
28,742
Reportable segment non-financial
non-current assets
24,727
(11,225)
13,502
Reportable segment liabilities
(35,007)
10,711
(24,296)
Segment revenues- external
8,986
(5,084)
3,902
Finance income
569
(157)
412
Finance costs
(3,612)
2,499
(1,113)
Impairment reversal on financial assets
15
-
15
Depreciation
(628)
208
(420)
Direct costs
(1,402)
628
(774)
Selling, marketing and other
administrative expenses
(3,747)
2,217
(1,530)
Income tax expense
(1,725)
1,457
(268)
Capital expenditure
9,654
(9,553)
101
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
59
Operating segments (continued)
9.1
Information about reportable segments (continued)
Reportable Group segment assets and non-financial non-current assets for 2022 are reconciled as
follows:
Assets
Non-financial
non-current
assets
€000
€000
Total reportable segments
42,973
24,727
Total assets of IC Cesme
(15,705)
(12,699)
Total assets of Grand Harbour Marina p.l.c.
27,268
12,028
Equity accounting (see note 18.2)
1,474
1,474
Consolidated assets
28,742
13,502
Reportable Group segment profit before tax for 2022 is reconciled as follows:
Grand
Harbour
Marina
IC Cesme
Marina
Total
Reportable
Segments
€000
€000
€000
Reportable profit before tax
492
4,450
4,942
Reconciliation to Consolidated Amounts
Total
Reportable
Segments
Eliminations
Group
€000
€000
€000
Reportable profit before tax
4,942
(3,116)
1,826
€000
Profit before tax
Total reportable segments
4,942
Total profit before tax of IC Cesme
(4,450)
Total profit before tax of Grand Harbour Marina
492
Share of profit of IC Cesme Marina
1,334
Consolidated profit before tax
1,826
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
60
9
Operating segments (continued)
9.1
Information about reportable segments (continued)
31 December 2021
Grand
Harbour
Marina
IC Cesme
Marina
Total
Reportable
Segments
€000
€000
€000
Reportable segment assets
27,802
9,504
37,306
Reportable segment non-financial
non-current assets
12,481
6,045
18,526
Reportable segment liabilities
(24,197)
(11,057)
(35,254)
Segment revenues- external
3,621
3,849
7,470
Finance income
329
83
412
Finance costs
(1,090)
(4,626)
(5,716)
Impairment loss on financial assets
(98)
-
(98)
Depreciation
(419)
(223)
(642)
Direct costs
(667)
(277)
(944)
Selling, marketing and other
administrative expenses
(1,278)
(1,389)
(2,667)
Income tax expense
(293)
634
341
Capital expenditure
34
159
193
Reconciliation to Consolidated Amounts
Total
Reportable
Segments
Eliminations
Group
€000
€000
€000
Reportable segment assets
37,306
(10,964)
26,342
Reportable segment non-financial
non-current assets
18,526
(7,505)
11,021
Reportable segment liabilities
(35,254)
11,057
(24,197)
Segment revenues- external
7,470
(3,849)
3,621
Finance income
412
(83)
329
Finance costs
(5,716)
4,626
(1,090)
Impairment loss on financial assets
(98)
-
(98)
Depreciation
(642)
223
(419)
Direct costs
(944)
277
(667)
Selling, marketing and other
administrative expenses
(2,667)
1,389
(1,278)
Income tax expense
341
634
(293)
Capital expenditure
193
(159)
34
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
61
9
Operating segments (continued)
9.1
Information about reportable segments (continued)
Reportable Group segment assets and non-financial non-current assets for 2021 are reconciled as
follows:
Assets
Non-financial
non-current
assets
€000
€000
Total reportable segments
37,306
18,526
Total assets of IC Cesme
(9,504)
(6,045)
Total assets of Grand Harbour Marina p.l.c.
27,802
12,481
Equity accounting (see note 18.2)
(1,460)
(1,460)
Consolidated assets
26,342
11,021
Reportable Group segment loss before tax for 2021 is reconciled as follows:
Grand
Harbour
Marina
IC Cesme
Marina
Total
Reportable
Segments
€000
€000
€000
Reportable profit/ (loss) before tax
398
(2,583)
(2,185)
Reconciliation to Consolidated Amounts
Total
Reportable
Segments
Eliminations
Group
€000
€000
€000
Reportable loss before tax
(2,185)
1,694
(491)
€000
Loss before tax
Total reportable segments
(2,185)
Total loss before tax of IC Cesme
2,583
Total profit before tax of Grand Harbour Marina
398
Share of loss of IC Cesme Marina
(889)
Consolidated loss before tax
(491)
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
62
10
Revenue
10.1
Revenue streams
The Company generates revenue primarily from berthing income on annual, seasonal and visitor
berthing contracts. Other income is generated through annual service charges to berth owners
and the provision of other ancillary services to marina customers, such as water and electricity.
During 2022 and 2021, the Company did not effect any berth sale.
2022
2021
€000
€000
Group and Company
Annual service charges to berth owners
451
436
Revenue from short-term berthing
2,645
2,409
Ancillary services
806
776
Total revenues
3,902
3,621
10.2
Disaggregation of revenue from contracts with customers
The following table disaggregates revenue recognised from contracts with customers into
appropriate categories, being annual, seasonal and visitor revenue streams for pontoons (i.e.,
boats under 27.99 metres) and superyachts (i.e., boats over 28 metres) respectively.
2022
2021
€000
€000
Revenue from contracts with customers:
Revenue generated from pontoons:
Annual contracts
1,443
1,453
Seasonal contracts
165
128
Visitor contracts
147
134
1,755
1,715
Revenue generated from superyachts:
Annual service charges to berth owners
451
436
Annual contracts
244
229
Seasonal contracts
164
158
Visitor contracts
482
307
1,341
1,130
Revenue from contracts with customers
3,096
2,845
Revenue from ancillary services
806
776
Total revenue as reported in note 10.1
3,902
3,621
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
63
10
Revenue (continued)
10.3
Contract balances
The following table provides information about receivables and contract liabilities from contracts
with customers.
2022
2021
Group and Company
€000
€000
Receivables, which are included in ‘trade and
other receivables’ (note 22.1)
685
582
Contract liabilities on trade receivables (note 28)
1,033
1,043
The above receivables mainly relate to trade receivables arising on trading operations, and the
contract liabilities relate to consideration received in advance from customers for berthing
contracts, for which revenue is recognised over time. The amount of €1,043k (2021: €1,101k)
recognised in contract liabilities at the beginning of the year has been recognised as revenue for
the year ended 31 December 2022.
As at reporting date, the Company did not have any contract assets as the Company’s rights to
consideration for satisfied performance obligations was fully completed and billed in full by the
reporting date.
10.4
Performance obligations and revenue recognition policies
Revenue is measured based on the consideration specified in the contract with a customer, and is
recognised when, or as, the Group satisfies a performance obligation by transferring a good or
service to a customer. Information about the nature and timing of the satisfaction of performance
obligations in contracts with customers, including significant payment terms and the related
revenue recognition policies are as follows in notes 10.4.1 and 10.4.2.
10.4.1
Licensing of long-term super-yacht berths
The Group recognises revenue at a point in time. To determine the point in time at which it satisfies
its performance obligations and transfers control of a good/service at a point in time, the Group
considers indicators of the transfer of control, which include the following:
-
the Group has a present right to payment for the asset i.e. if a customer is presently obliged to
pay for an asset;
-
the customer has legal title to the asset;
-
the Group has transferred physical possession of the asset;
-
the customer has the significant risks and rewards of the ownership of the asset; or
-
the customer has accepted the asset.
All these conditions may indicate that the customer has obtained the ability to direct the use of,
and obtain substantially all the remaining benefits from, the asset in exchange for consideration.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
64
10
Revenue (continued)
10.4
Performance obligations and revenue recognition policies (continued)
10.4.1
Licensing of long-term super-yacht berths (continued)
As per
IFRS 15 Revenue from Contracts with Customers
, any revenue from the licensing of long-
term super-yacht berths is recognised upon the signing of the licensing arrangements with the
berth holders, on the basis that such give rise to the sale of the Group’s right to the use of such
berths (recognised at a point in time i.e. when a berth holder obtains control of the berth space
through the execution of a public deed, which is the point in time when real rights are acquired by
the berth holder).
The Group shall adjust the consideration amount as per the contract for the effects of the time
value of money if the timing of payments agreed to by the parties provides the customer with a
significant benefit of financing the transfer of goods/services to the customer.
10.4.2
Short-term berthing
The Group recognises revenue over time, and satisfies its performance obligations and transfers
control of a good/service over time, if one of the following is met:
- the customer
simultaneously receives and consumes benefits provided by the Group's
performance as the Group performs; or
-
the Group's performance does not create an asset with an alternative use to the entity (such
assessment is made at contract inception) and the Group has an enforceable right to payment
for performance completed to date.
The Group earns income from services provided in respect of short-term berthing contracts, being
annual, seasonal and visitor contracts and includes also the relative service fees charged to berth
holders. The customer simultaneously receives and consumes the benefits of the Group’s
performance as it performs by making the berth available. The customer benefits from its service
of making the berth available evenly throughout the year i.e. the customer benefits from having
the berth available, regardless of whether the customer uses it or not. In such case, the best
measure of progress towards complete satisfaction of the performance obligation over time is a
time-based measure and revenue is thus recognised on a straight-line basis throughout the
berthing period. Consequently, such services are deemed to comprise a series of distinct services
treated as a single performance obligation satisfied over time. Accordingly, revenue is recognised
over the service period.
The Group adjusts the consideration amount as per the contract for the effects of the time value
of money if the timing of payments agreed to by the parties provides the customer with a
significant benefit of financing the transfer of goods/services to the customer.
As a practical expedient, the Group does not adjust the promised amount of consideration for the
effects of a significant financing component if the Group expects, at contract inception, that the
period between when the Group transfers a promised good/service to a customer and when the
customer pays for that good/service will be one year or less.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
65
10
Revenue (continued)
10.4
Performance obligations and revenue recognition policies (continued)
10.4.2
Short-term berthing (continued)
Costs an entity incurs to obtain a contract with a customer that it would not have incurred if the
contract had not been obtained (such as sales commission) shall be recognised as an asset if the
entity expects to recover those costs. Such asset may then be amortised on a systematic basis that
is consistent with the transfer to the customer of the goods/services to which the asset relates.
Any cash received in advance of the provision of services is recognised within the line item
‘Contract liabilities’.
11
Expenses
11.1
Expenses by nature
2022
2021
€000
€000
Group and company
Cost of sales:
Direct costs
774
667
Operating expenses:
Directors' remuneration (short
-term benefits)
42
38
Wages and salaries
620
590
Compulsory social security contributions
40
43
Selling and marketing expenses
45
26
Repairs and maintenance
65
60
Variable lease expense (see note 21.1.5)
87
62
Auditors’ remuneration (see note 12.1)
46
43
Net loss on asset write-off
156
12
Operator fees (see note 31.2)
197
183
Depreciation on plant and equipment (see note 16.1)
276
276
Depreciation on right-of-use asset (see note 21.1)
143
143
Other operating expenses
233
221
Total expenses recognised in statement of profit or loss
2,724
2,364
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
66
11
Expenses (continued)
11.1
Expenses by nature (continued)
The average number of persons employed during the year was as follows:
2022
2021
No.
No.
Group and company
Operating
18
19
Management and administration
5
5
23
24
12
Other operating expenses
12.1
Auditors’ remuneration
The following fees were charged by, and became payable to the Company’s auditors for services
rendered in connection with:
2022
2021
€000
€000
Group and company
Audit of the financial statements
42
39
Tax advisory services
3
3
Other assurance services
1
1
46
43
The
audit
fee
payable
to
IC
Cesme’s
auditors
for
2022
amounted
to
€10k
(2021: €10k), with the Group’s share of such audit fees being €4k (2021: €4k). No non-audit fees
were incurred by IC Cesme during 2022 (2021: €nil).
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
67
13
Net finance costs
2022
2021
€000
€000
Group and company
Finance income:
Interest income under the effective interest method on:
Loans to related parties - measured at amortised cost
210
145
Corporate debt securities - at FVOCI
202
179
Corporate debt securities- at FVOCI:
Gain on derecognition reclassified from OCI (see note 19.1)
-
5
Finance income
412
329
Finance costs:
Interest expense on financial liabilities measured at amortised
cost
(675)
(674)
Interest expense on lease liabilities (see note 21.1.2)
(393)
(376)
Amortisation of bond issue costs (see note 26.4)
(40)
(38)
Net foreign exchange losses
(1)
(2)
Corporate debt securities- at FVOCI:
Loss on derecognition reclassified from OCI (see note 19.1)
(4)
-
Finance costs
(1,113)
(1,090)
Net finance costs recognised in statement of profit or loss
(701)
(761)
14
Earnings per share
The calculation of basic earnings per share is based on the following profit attributable to ordinary
shareholders and the number of ordinary shares outstanding:
2022
2021
Group
Profit/ (loss) for the year, attributable to the owners of
the Company (in €000)
1,558
(784)
Number of ordinary shares of the Company (in thousands)
20,000
20,000
Earnings/ (Loss) per share (in €)
0.078
(0.039)
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
68
15
Income taxes
15.1
Amount recognised in profit or loss
Current tax is recognised at the corporate rate of 35% on the taxable income for the year from the
Company’s marina business activity. Deferred tax charges and credits relate to the marina business
activity.
2022
2021
€000
€000
Group and company
Current tax
Charge during the year
(399)
(365)
(399)
(365)
Deferred tax
Movement in temporary differences (see note 15.4)
131
72
131
72
Income tax expense on continuing operations recognised in
statement of profit or loss
(268)
(293)
15.2
Reconciliation of tax expense
The income tax expense and the result of the accounting profit multiplied by the Maltese tax rate
are reconciled as follows:
2022
2022
2021
2021
Group
Company
Group
Company
€000
€000
€000
€000
Profit/ (loss) before income tax
1,826
492
(491)
398
Tax using the domestic tax rate of
35%
(639)
(172)
172
(139)
Tax effect of:
•
Disallowable expenses
(96)
(96)
(154)
(154)
•
Share of profit/ (loss) of equity-
accounted investee
467
-
(311)
-
Income tax expense for the year
(268)
(268)
(293)
(293)
Share of profit/ (loss) of equity-accounted investee is not subject to tax.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
69
15
Income taxes (continued)
15.3
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Assets
Liabilities
Net
2022
2021
2022
2021
2022
2021
€000
€000
€000
€000
€000
€000
Plant and equipment
-
-
(1,173)
(1,243)
(1,173)
(1,243)
Right-of-use asset and net
investment receivable
383
322
-
-
383
322
Net deferred tax liabilities
383
322
(1,173)
(1,243)
(790)
(921)
15.4
Movement in temporary differences during the year
Balance 1
January
2022
Movement in
temporary
differences
Balance 31
December
2022
€000
€000
€000
Group and Company
Plant and equipment
(1,243)
70
(1,173)
Right-of-use
asset
and
net
investment
receivable
322
61
383
(921)
131
(790)
Balance 1
January
2021
Movement in
temporary
differences
Balance 31
December
2021
€000
€000
€000
Group and Company
Plant and equipment
(1,308)
65
(1,243)
Expected credit losses
14
(14)
-
Unrealised changes in fair value of corporate
debt securities
33
(33)
-
Right-of-use
asset
and
net
investment
receivable
268
54
322
(993)
72
(921)
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
70
16
Property, plant and equipment
16.1
Group and Company
Total
Superyacht berths
Pontoon berths
Improvements to
leased property,
landscaping &
switchboards
Motor vehicles,
including
shipping vessels
Cable
infrastructure,
marine & office
equipment
Assets in the
course of
construction
Cost
€000
€000
€000
€000
€000
€000
€000
Balance at 1 January 2021
9,528
4,302
3,520
892
55
586
173
Additions
34
-
10
6
10
8
-
Assets written off
(82)
-
(81)
-
-
(1)
-
Reclassifications
-
-
-
4
-
18
(22)
Balance at 31 December 2021
9,480
4,302
3,449
902
65
611
151
Balance at 1 January 2022
9,480
4,302
3,449
902
65
611
151
Additions
101
-
74
15
-
12
-
Assets written off
(175)
(40)
(21)
-
-
-
(114)
Balance at 31 December 2022
9,406
4,262
3,502
917
65
623
37
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
71
16
Property, plant and equipment (continued)
16.1
(continued)
Group and Company
Total
Superyacht berths
Pontoon berths
Improvements to
leased property,
landscaping &
switchboards
Motor vehicles,
including
shipping vessels
Cable
infrastructure,
marine & office
equipment
Assets in the
course of
construction
Accumulated depreciation and impairment
€000
€000
€000
€000
€000
€000
€000
Balance at 1 January 2021
4,697
1,245
2,243
654
48
507
-
Depreciation charged for the year
276
86
137
25
5
23
-
Assets written off
(55)
-
(54)
-
-
(1)
-
Reclassifications
(3)
-
-
-
-
(3)
-
Balance at 31 December 2021
4,915
1,331
2,326
679
53
526
-
Balance at 1 January 2022
4,915
1,331
2,326
679
53
526
-
Depreciation charged for the year
276
85
140
26
3
22
-
Assets written off
(28)
(14)
(14)
-
-
-
-
Balance at 31 December 2022
5,163
1,402
2,452
705
56
548
-
Carrying amounts
Balance at 1 January 2021
4,831
3,057
1,277
238
7
79
173
Balance at 31 December 2021
4,565
2,971
1,123
223
12
85
151
Balance at 31 December 2022
4,243
2,860
1,050
212
9
75
37
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
72
16
Property, plant and equipment (continued)
16.1
(continued)
In 2022, the company wrote-off CCTV cameras and transponders with a cost of €61k, segregated
between €40k and €21k classified under “Superyacht berths” and “Pontoon berths” respectively. The
company also wrote-off €114k on a project which was classified under “Assets in the course of
construction”. The loss from these write-offs is recognized as part of loss on asset write-off in note 11.
16.2
Area held under title of temporary sub-emphyteusis
The Company’s berths and base improvements are situated on an area held under title of temporary
emphyteusis. On the 2 June 1999, the Government of Malta entered into a deed of emphyteusis with
a consortium, by virtue of which, the consortium was granted rights over parcels of water space
measuring 1,410 square metres and situated at Cottonera Waterfront Vittoriosa, Malta, for an initial
period of 99 years.
On the 4 September 2001, a deed of sub-emphyteusis was entered into between the Company and the
consortium, whereby, by virtue of one part of this deed, the Company acquired, by the same title,
immovable rights over such water space for the unexpired period of the 99 years, subject to the
payment of an annual sub-ground rent (see note 21).
This water space is subject to a special legal hypothec in favour of the consortium, in respect of the
payment of annual and temporary ground rent (for the unexpired period) imposed on the property,
arising by virtue of the said deed of sub-emphyteusis.
16.3
Assets in the course of construction
Assets in the course of construction include capital expenditure on the International Ship and Port
Facility Security project (ISPS) and the marina reconfiguration project, which at the reporting date were
still under construction, and on which no depreciation costs have yet been incurred.
17
Investment in subsidiary
On 29 June 2011, the Company acquired from Camper & Nicholsons Marinas International Limited the
100% shareholding in Maris Marine Limited (“MML”) for a consideration of €115. This dormant
company is incorporated in the United Kingdom and the registered office of this subsidiary is situated
at ”5
th
Floor, Cording House, 34-35 St James’s Street, London, SW1A 1HD”. The reporting date of this
non-trading entity is 31 March.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
73
18
Equity-accounted investee
18.1
Cost of acquisition of joint venture
On the 17 March 2011, the Company entered into an agreement with its Parent company, as a result
of which the Company initially acquired the ownership of 19% in IC Cesme Marina Yatirim, Turizm ve
Isletmeleri Anonim Sirketi (“
IC Cesme
”), a company registered under the laws of Turkey, which
company owns and operates a marina in Turkey, and eventually the beneficial interest of 45% therein
through the acquisition of MML (see note 17), which held 26% therein for a total consideration of
€1,930k. During that year the Company made an additional shareholder’s contribution of €244k, which
amount has been capitalised as part of the Company’s net investment in the joint venture. The
registered address and principal place of business of IC Cesme is Musalla Mh. 1016 SK. No.8, Cesme,
Izmir, Turkey.
18.2
Carrying amount of investment in joint venture
2022
2022
2021
2021
Group
Company
Group
Company
€000
€000
€000
€000
Fair value of net identifiable assets at date of
acquisition
1,082
1,082
1,082
1,082
Goodwill inherent in the cost of investment
848
848
848
848
Consideration paid upon acquisition
1,930
1,930
1,930
1,930
Cumulative capital contributions
244
244
244
244
Cost of investment as at 31 December
2,174
2,174
2,174
2,174
Share of post-acquisition loss brought forward
(1,191)
(314)
Share of profit/ (loss) for the year
1,346
(877)
Hyperinflationary adjustment for the year
1,590
-
Depreciation of fair value uplift on acquisition
brought forward
(342)
(330)
Depreciation of fair value uplift on acquisition
for the year
(12)
(12)
Foreign currency translation brought forward
73
(228)
Foreign currency translation for the year
10
301
Equity accounted investee as at 31 December
3,648
714
IC Cesme, the only joint arrangement in which the Group participates, is principally engaged in the
operation of a marina in Turkey. IC Cesme is an unlisted joint arrangement and is structured as a
separate vehicle and the Group has a residual interest in its net assets. Accordingly, the Group has
classified the investment in IC Cesme as a joint venture which is equity accounted.
In accordance with the agreement under which IC Cesme is established, the Group and the other
investors to the joint venture agree to make additional contributions in proportion to their interests, if
required.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
74
18
Equity-accounted investee (continued)
18.3
Summary of financial information of joint venture
The Group’s share of profit in its equity accounted investee for the year, inclusive of the depreciation
of fair value uplift upon acquisition, amounted to €1,334k (2021: loss of €889k). This investee is not
listed and consequently no published price quotations are available. The reporting date of this entity is
31 December. The entity is exposed to the country risks relating to Turkey and other risks associated
with the trends and future outlook of the marina industry as a whole.
The following table summarises the financial information of IC Cesme based on its financial information
prepared in accordance with IFRS as adopted by the EU. The tables also reconcile the summarised
financial information to the carrying amount of the Group’s interest in IC Cesme, which is accounted
for using the equity method of accounting.
2022
2021
€000
€000
Non-current assets
12,699
7,454
Current assets (including cash and cash equivalent of €2,514k,
Dec 2021: €1,788k)
3,006
2,050
Non-current liabilities
(6,766)
(1,343)
Current liabilities (including trade and other payables and
provisions of €3,945k, Dec 2021: €9,714k)
(3,945)
(9,714)
IC Cesme net assets (liabilities) (100%) at 31 December
4,994
(1,553)
Group’s share of net assets (45%)
2,247
(699)
Fair value uplift on date of acquisition (less deferred tax impact)
907
907
Cumulative depreciation on fair value uplift, adjusted on
consolidation
(354)
(342)
Goodwill
848
848
Carrying amount of interest in joint venture, as per Statement of
financial position (see note 18.2)
3,648
714
Revenue
5,084
3,849
Operating expenses
(2,845)
(1,666)
Depreciation
(208)
(223)
Results from operating activities
2,031
1,960
Hyperinflationary adjustment for the year
4,761
-
Net finance costs (including interest expense of €210k, net foreign
exchange losses of €1,966k less interest income of €323k, Dec
2021: including interest expense of €180k, net foreign exchange
losses of €3,305k less interest income of €101k)
(2,342)
(4,543)
Profit/ (loss) before tax for the year
4,450
(2,583)
Taxation
(1,457)
634
Total comprehensive income/ (loss) (100%)
2,993
(1,949)
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
75
18
Equity-accounted investee (continued)
18.3
Summary of financial information of joint venture (continued)
2022
2021
€000
€000
Group’s share of total comprehensive income/ (loss) (45%)
1,346
(877)
Hyperinflationary adjustment
1,590
-
Depreciation on fair value uplift of depreciable assets
(12)
(12)
Share of profit of equity-accounted investee, net of tax, as per
statement of profit or loss and OCI
2,924
(889)
Foreign currency translation difference arising during the year
10
301
Change in carrying amount of interest in joint venture
2,934
(588)
18.4
Impairment assessment of investment in joint venture
As explained in note 18.1 the Company acquired its investment in IC Cesme Marina Yat
ı
r
ı
m Turizm ve
Isletmeleri A.S. (“IC Cesme”), a joint venture, in 2011. IC Cesme operates a marina with associated
landside property in the Izmir region of Turkey, held in terms of a Build-Operate-Transfer agreement
expiring in 2067.
In view of the geo-political status of the investee’s jurisdiction, the directors have estimated the
recoverable amount of the investment in IC Cesme and determined whether it exceeds the carrying
amount. This was estimated based on its value in use, which falls within Level 3 of the fair value
hierarchy. The value in use has been arrived at through the discounted cash flow valuation, by
estimating the free cash flow to the firm up until 2067 and discounting them back to the present value
by using the cost of capital as the discount rate.
The following were the assumptions included in the valuation:
(a)
Revenue- Year 1 revenue to be in line with budget prepared by IC Cesme’s management,
Years 2 to 4 revenue growth to be in line with Turkey’s inflation rate, then converge to the
risk-free rate up until Year 10, after which it will remain unchanged,
(b)
Operating margins- Year 1 operating margins to be in line with budget prepared by the IC
Cesme’s management, then converge to 25% up until Year 10, and thereafter remain
unchanged,
(c)
Reinvestment- Year 1 will be based on a sales-to-capital ratio of 8.00, with Years 2 to 5
based on a sales-to-capital ratio of 3.00, and a sales-to-capital ratio of 1.05 from Year 6
onwards, based on the industry average,
(d)
Tax rate- the tax rate will converge gradually from the current effective tax rate to the
marginal tax rate of the country in Year 10, and remain unchanged thereafter,
(e)
Cost of capital- the discount rate used will converge gradually to the cost of capital of a
mature and stable company in Year 10.
The estimated recoverable amount of the Company’s investment in IC Cesme’s net assets at Group and
Company level, exceeds its carrying amount.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
76
19
Investment in debt securities
19.1
2022
2021
Group and Company
€000
€000
Non-current corporate debt securities
Opening fair value
5,806
5,894
Disposals
(1,161)
(152)
Realised fair value loss/ (gain) on disposals
4
(5)
Net (decrease)/ increase in fair value, recognised in OCI
(195)
79
Unwinding of premium paid upon acquisition
20
(10)
Closing fair value
4,474
5,806
Impairment reversal on corporate debt securities, recognised in P&L
2
-
During 2022, the Company did not acquire any corporate debt securities (2021: €nil) and disposed of
€1,157k corporate debt securities held within the company’s investment portfolio (2021: €157k),
realising a fair value loss of €4k (2021: fair value gain of €5k), which was recycled from OCI to profit or
loss. The unrealised fair value loss of €195k (Dec 2021: unrealised fair value gain of €79k) on the
investment in debt securities held as at 31 December 2022 has been presented in OCI and included in
the fair value reserve.
As at 31 December 2022, the value of such investments, by reference to quoted market prices on the
Malta Stock Exchange, amounted to €4,474k (2021: €5,806k).
Such a value was classified as a Level 2
investment by reference to the fair value hierarchy.
Corporate debt securities at FVOCI have stated interest rates ranging from 3.25% to 6%, with maturity
dates ranging from 2023 to 2029.
19.2
The investments are considered to be held within a held to collect and sell business model consistent
with the Group’s continuing measurement of such investments (note 7.10.2).
19.3
Information about the Group’s exposure to credit and market risks for debt investments is disclosed in
notes 29.5.2 and 29.7 respectively.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
77
20
Loans to related parties
20.1
2022
2021
€000
€000
Group and Company
Loans to the Parent company, net of expected credit losses
(see note 20.2)
2,846
3,248
Loans to related parties, net of expected credit losses
(see note 20.3)
2,635
2,668
Total
5,481
5,916
At 1 January
5,916
6,172
Loan repayment (see notes 20.2 and 20.3)
(514)
(158)
Interest receivable
66
-
Reversal/(increase) in expected credit losses on loan to CNML
15
(98)
Increase in expected credit losses on loan to Parent company
(2)
-
Total
5,481
5,916
Non-current
5,173
2,668
Current
308
3,248
The loans receivable from related parties comprise:
-
Upstream loans to the Parent company; and
-
Loan notes related to cash pledges over IC Cesme’s borrowing arrangements.
20.2
Upstream loans to the Parent company
Upstream loans to the Parent company, Camper & Nicholsons Marinas Limited (“CNML”), amount to
€2,850k (2021: €3,250k), the details of which are as follows:
2022
2021
Amount
€000
Interest
p.a.
Maturity
date
Amount
€000
Interest
p.a.
Maturity
date
Loan Note 1
-
-
-
400
4.00%
31/12/2022
Loan Note 2
600
4.00%
31/12/2024
600
4.00%
31/12/2022
Loan Note 3
2,250
4.50%
30/09/2024
2,250
4.50%
30/09/2023
2,850
3,250
All loans to the parent company are unsecured. Related expected credit losses arising on these loans
are set out in note 29.5.3.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
78
20
Loans to related parties (continued)
20.3
Loan notes related to cash pledges over IC Cesme’s borrowing arrangements
The Company’s joint venture, IC Cesme had bank facilities that were guaranteed by IC Cesme’s
shareholders in proportion to their interest in IC Cesme.
In this respect, the Company had provided
cash collateral in the form of a cash pledge and it had lodged a sum with the Parent company in this
regard; €2,782k remained outstanding as at 31 December 2021.
During 2022, IC Cesme repaid €225k of its bank borrowings, and an amount of €115k (representing
GHM’s share of the cash pledge) was repaid to the company following a release of an equivalent
amount of the cash pledge.
IC Cesme’s remaining bank borrowings that were subject to this guarantee
were settled between February and August 2022 through the release of the above-mentioned cash
pledges in favour of IC Cesme’s lender.
As a result of the repayment and of a loan restructuring, the
cash pledge was refinanced as a loan receivable to the Company with the amount being due from
Camper & Nicholsons Marinas Limited (“CNML”), a fellow subsidiary of CNMIL.
The new loan is
constituted under two separate Loan Notes, the details of which are as follows:
31 Dec 2022
31 Dec 2021
Amount
€000
Interest
p.a.
Maturity
date
Amount
€000
Interest
p.a.
Maturity
date
Loan 1
112
5.00%
31/03/2023
Subloan 1
551
1.00%
03/02/2022
Loan 1
45
5.00%
31/03/2024
Subloan 2
360
1.50%
12/06/2022
Loan 1
45
5.00%
31/03/2025
Subloan 3
236
1.35%
21/06/2022
Loan 1
113
5.00%
31/03/2026
Subloan 4
180
1.35%
21/06/2022
Loan 1
135
5.00%
31/03/2027
Subloan 5
758
1.85%
13/07/2022
Loan 2
22
5.00%
31/03/2023
Subloan 6
180
1.85%
20/07/2022
Loan 2
113
5.00%
30/09/2023
Subloan 7
517
1.85%
10/08/2022
Loan 2
135
5.00%
31/03/2024
Loan 2
216
5.00%
30/09/2024
Loan 2
180
5.00%
31/03/2025
Loan 2
193
5.00%
30/09/2025
Loan 2
135
5.00%
31/03/2026
Loan 2
223
5.00%
30/09/2026
Loan 2
139
5.00%
31/03/2027
Loan 2
286
5.00%
30/09/2027
Loan 2
275
5.00%
31/03/2028
Loan 2
315
5.00%
30/09/2028
2,682
2,782
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
79
21
Leases
21.1
As a lessee
The Group leases water space under a deed of sub-emphyteusis (note 16.2) together with other
properties including offices and warehouses. Information about leases for which the Group is a lessee
is presented below.
21.1.1
Right-of-use asset
Water space
Other
Properties
Total
2022
2021
2022
2021
2022
2021
€000
€000
€000
€000
€000
€000
Group and company
Balance at 1 January
4,587
4,647
673
756
5,260
5,403
Recognition of right-of-use asset
-
-
6
-
6
-
Adjustment for inflation
-
-
10
-
10
-
Depreciation on right-of-use asset
(59)
(60)
(84)
(83)
(143)
(143)
Balance at 31 December
4,528
4,587
605
673
5,133
5,260
The additions to right-of-use assets during 2022 related to the renewal of a warehouse up until 31 May
2028.
21.1.2
Lease liability
The additions to lease liabilities during 2022 related to the renewal of a warehouse up until 31 May
2028. Lease liabilities included in the statement of financial position at 31 December are analysed as
follows:
2022
2021
€000
€000
Current
12
22
Non-current
6,217
6,159
6,229
6,181
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
80
21
Leases (continued)
21.1
As a lessee (continued)
21.1.2
Lease liability (continued)
Water space
Other
Properties
Total
2022
2021
2022
2021
2022
2021
€000
€000
€000
€000
€000
€000
Group and company
Balance at 1 January
5,452
5,370
729
803
6,181
6,173
Recognition of lease liability
-
-
6
-
6
-
Adjustment for inflation
-
-
10
-
10
-
Interest expense on lease
liabilities (see note 13)
343
336
50
40
393
376
Lease payments related to
the year (see note 21.1.5)
(254)
(254)
(107)
(114)
(361)
(368)
Balance at 31 December
5,541
5,452
688
729
6,229
6,181
The total cash outflows for leases amounts to €448k (2021: €430k).
21.1.3
Water space lease
On the 2 June 1999, the Government of Malta entered into a deed of emphyteusis with a consortium,
by virtue of which, the consortium was granted rights over parcels of water space measuring 1,410
square metres and situated at Cottonera Waterfront Vittoriosa, Malta, for an initial period of 99 years.
On the 4 September 2001, a deed of sub-emphyteusis was entered into between the Company and the
consortium, whereby, by virtue of one part of this deed, the Company acquired, by the same title,
immovable rights over such water space for the unexpired period of the 99 years, subject to the
payment of an annual sub-ground rent.
There are no covenants or restrictions imposed by the lease.
21.1.4
Property lease
The Group leases other properties, comprising two offices and four warehouses, with original lease
terms of eight to twenty-five years, with the remaining lease terms at 31 December 2022 of two to ten
years.
By virtue of the other part of the deed of sub-emphyteusis referred to in note 21.1.3, the Company was
assigned the right to develop, construct and install, own, operate, manage, control and promote a
marina and ancillary facilities, including the right to grant mooring and berthing rights to third parties
under such terms and conditions as it deems fit.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
81
21
Leases (continued)
21.1
As a lessee (continued)
21.1.5
Variable lease payments based on sales
Under the terms of a Development and Operations Agreement dated 30 June 2000 entered into with
the consortium, the Company is required to pay the consortium a yearly fee equivalent to 10% per
annum of adjusted revenue, subject to minimum and maximum limits. While the minimum lease
payments of the lease are included in the lease liability and the right-of-use asset, the variable lease
payments depending on sales are recognised in profit or loss in the period in which such sales are
recognised.
2022
2021
€000
€000
Leases with lease payments based on sales
Fixed payments on water space (see note 21.1.2)
254
254
Variable payments on water space (see note 11.1)
87
62
Total payments
341
316
21.1.6
Extension options
With respect to water space lease, the Company has the option to terminate the Development and
Operations Agreement during the 29
th
year from the date of the publication of the deed of sub-
emphyteusis (being the year 2030) by giving the consortium at least 12 months’ prior written notice.
The
extension
options
are
exercisable
only
by
the
Company
and
not
by
the
lessor.
The Company is reasonably certain not to exercise this option and as such the full term was taken in
the calculation of the lease liability.
21.2
As a lessor
Lease income from lease contracts in which the Group acts as a lessor is as below.
2022
2021
€000
€000
Net investment lease receivable
Group and Company
Balance at 1 January
1
3
Lease receipts related to the year
(1)
(2)
Balance at 31 December
-
1
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
82
22
Trade and other receivables
22.1
2022
2021
€000
€000
Group and Company
Trade receivables, excluding related parties
685
582
Amounts due from related parties (see notes 22.2 and 31.2)
37
109
Prepayments and other receivables
532
441
Balance at 31 December
1,254
1,132
22.2
Amounts due from related parties of €37k (2021: €9k) is receivable from First Eastern (Holdings) Limited
(which together with its wholly owned subsidiary, FE Marina Investments Limited, owns 99.58% of
Camper & Nicholsons Marina Investments Limited’s issued share capital) in relation to a 50% recharge
by the Company, of one of the Company’s executive’s salary. In 2021, this amount includes interest
receivable of €100k from parent company, Camper & Nicholsons Marina Investments Limited, is
unsecured, interest free and repayable on demand. For further details, see note 31.2.
22.3
Receivables are considered to be held within held-to-collect business model consistent with the Group’s
continuing measurement of such receivables (note 7.10.2).
22.4
Information about
the Group’s exposure to credit, market risks and impairment losses for trade and
other receivables are disclosed in notes 29.5.1 and 29.7 respectively.
23
Cash and cash equivalents
2022
2021
€000
€000
Group and Company
Cash in hand
3
3
Bank balances
4,029
2,464
4,032
2,467
Expected credit loss on cash and cash equivalents (see note 29.5)
(1)
(1)
Cash and cash equivalents in the statement of financial position
4,031
2,466
Bank overdraft used for cash management purposes (see note
26.3)
(2)
(1)
Cash and cash equivalents in the statement of cash flows
4,029
2,465

Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
83
24
Capital and reserves
24.1
Share capital
2022
2021
€000
€000
Authorised share capital
20,000,000 ordinary shares of €0.12 each
2,400
2,400
Issued share capital
20,000,000 ordinary shares of €0.12 each
2,400
2,400
24.2
Shareholders’ rights
Ordinary shareholders are entitled to dividends as declared from time to time and rank
pari passu
with
respect to any distribution, whether of dividends or capital, in a winding up or otherwise, and are
entitled to one vote per share at general meetings of the Company.
24.3
Exchange translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the
financial results of the joint arrangement from Turkish Lira into Euro. This reserve is not distributable.
24.4
Fair value reserve
The fair value reserve comprises the cumulative net change in fair value of corporate debt securities at
FVOCI until the assets are derecognised or reclassified. This amount is adjusted by the amount of loss
allowance. This reserve is not distributable.
24.5
Dividends
The amount of €0.7 million in dividends were declared by the Company for the year ended
31 December 2022 (2021: €nil), being a dividend per share of €0.033 (2021: €nil).
25
Capital management
The company’s objectives when managing capital are to safeguard its ability to continue as a going
concern and to maximise the return to stakeholders through the optimisation of the debt and equity
balance.
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. Management monitors the return on
capital, as well as the level of dividends to ordinary shareholders. Based on recommendations of the
directors, the company balances its overall capital structure through new share issues as well as the
issue of new debt or the redemption of existing debt.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
84
25
Capital management (continued)
The capital structure of the Group consists of the debt securities of €4,474k (2021: €5,806k) in
note 19 and items presented within equity in the statement of financial position, comprising of share
capital, exchange translation reserve, fair value reserve and retained earnings with a total of €4,446k
(2021: €2,145k).
The Group is not subject to any externally imposed capital requirements. There were no changes in the
Group’s approach to capital management during the year.
26
Loans and borrowings
26.1
This note provides information about the contractual terms of the Group’s interest-bearing borrowings
which are measured at amortised cost. For more information about the Company’s exposures to
liquidity and interest rate risks, see notes 29.6 and 29.7.2 respectively.
2022
2021
€000
€000
Non-current
Debt securities in issue (see note 26.4)
14,790
14,751
Current
Bank overdraft (see note 26.3)
2
1
26.2
Terms and repayment schedule
The terms and conditions of outstanding loans are as follows:
Nominal
int rate
Year of
maturity
2022
2021
Face
value
Carrying
amount
Face
value
Carrying
amount
€000
€000
€000
€000
Bank overdraft
4.85%
Repayable on
demand
-
2
-
1
Unsecured bond
4.50%
2027
15,000
14,790
15,000
14,751
Total interest-bearing liabilities
15,000
14,792
15,000
14,752
26.3
Bank overdraft
The bank overdraft represents the credit on the Company’s credit card as at 31 December, which is
repaid on a monthly basis. This overdraft is secured by a pledge of €7k over cash balances held by the
Company with HSBC Bank Malta plc. An additional €35k is pledged in favour of a guarantee with MEPA.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
85
26
Loans and borrowings (continued)
26.4
Debt securities in issue
The €15 million bond, issued by the Company in 2017, had a nominal value of €100 per bond and was
issued at par. The bond is subject to a fixed interest rate of 4.5% per annum payable semi-annually in
arrears on 22 February and 22 August of each year. All bonds are redeemable at par (€100 for each
bond) on the 23 August 2027.
The bonds are measured at the amount of net proceeds adjusted for the amortisation of the difference
between net proceeds and the bond redemption value using the effective interest method as follows:
2022
2021
€000
€000
Original face value of bonds issued
15,000
15,000
Gross amount of bond issue costs
(402)
(402)
Cumulative amortisation of gross amount of bond issue costs as at
1 January
152
115
Amortisation charge for the year (see note 13)
40
38
Unamortised bond issue costs as at 31 December
(210)
(249)
Amortised cost and closing carrying amount of the bond liability
14,790
14,751
The movement for the year comprises solely the amortization of bond issue costs.
The quoted market
price of the bonds on the Official List of the Malta Stock Exchange at 31 December 2022 was €98.00
(2021: €104.00).
27
Trade and other payables
27.1
2022
2021
€000
€000
Group and Company
Trade payables, excluding related parties
180
189
Amounts due to related parties (see notes 27.2 and 31.2)
86
93
Other trade payables (see note 27.4)
245
207
Accrued expenses
941
711
1,452
1,200
27.2
The amounts owed to the related parties are unsecured, interest free and repayable on demand.
27.3
Information about the Group’s exposures to liquidity and currency risks related to trade and other
payables is disclosed in notes 29.6 and 29.7.1 respectively.
27.4
Other trade payables relate to VAT payable by the Company as at 31 December 2022. This also include
bond interest of €68k and security deposits withheld from customers.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
86
28
Contract liabilities
28.1
2022
2021
€000
€000
Group and Company
Customer advances on berthing contracts (see note 28.2)
1,033
1,043
1,033
1,043
28.2
The contract liabilities relate to the consideration received in advance from customers for berthing
contracts, for which revenue is recognised over time. Furthermore, the transaction price allocated to
performance obligations that are unsatisfied (or partially unsatisfied) at the end of the year is largely in
relation to contracts with an original expected duration of one year or less.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
87
29
Financial instruments – fair values and risk management
29.1
Accounting classification and fair values
The following table shows the fair values of financial assets other than the investment in the joint venture and financial liabilities other than lease liabilities. It does
not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair
value.
Fair value measurement using:
31 December
Level 1
Level 2
Level 3
Total
Carrying amount
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
€000
€000
€000
€000
€000
€000
€000
€000
€000
€000
Group and company
Financial assets
Financial assets at FVOCI
Investment in corporate
debt securities
-
-
4,474
5,806
-
-
4,474
5,806
4,474
5,806
Financial assets at
amortised cost
Loans to related parties
-
-
5,481
5,916
-
-
5,481
5,916
5,481
5,916
Lease receivable
-
-
-
-
-
1
-
1
-
1
-
-
9,955
11,722
-
1
9,955
11,723
9,955
11,723
Financial liabilities at
amortised cost
Unsecured debt securities
in issue
-
-
(14,700)
(15,600)
-
-
(14,700)
(15,600)
(14,790)
(14,751)
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
88
29
Financial instruments – fair values and risk management (continued)
29.2
Measurement of fair values
Valuation techniques and significant unobservable inputs
At the end of the current and the comparative year, the carrying amount of trade receivables and cash
and cash equivalents is a reasonable approximation of their fair value due to their short-term
maturities.
At 31 December 2022, corporate debt securities at FVOCI with a carrying amount of €4,474k (2021:
€5,806k) were measured using level 2 of the fair value hierarchy, by referring to their respective quoted
prices in the local market.
At the end of the current and the comparative year, the carrying amount of trade and other payables,
and bank overdraft is a reasonable approximation of their fair value due to their short-term maturities.
At 31 December 2022, unsecured debt securities in issue were measured at amortised cost with a
carrying amount of €14,790k (2021: €14,751k). The fair value of this financial liability as at 31 December
2022 amount to €14,700k (2021: €15,600k) were measured using level 2 of the fair value hierarchy, by
referring to their respective quoted prices in the local market.
29.3
Financial risk management
The Group, from its use of financial instruments, has exposure to credit, liquidity, and market risks.
29.4
Risk management framework
The Company’s board of directors has overall responsibility for the establishment and oversight of the
Group’s risk management framework. The Group’s risk management policies are established to identify
and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor
risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect
changes in market conditions and the Group’s activities. The Group, through its training and
management standards and procedures, aims to develop a disciplined and constructive control
environment in which all employees understand their roles and obligations.
The Group’s audit committee oversees how management monitors compliance with the Group’s risk
management policies and procedures and reviews the adequacy of the risk management framework in
relation to the risks faced by the Group.
Where possible, the Group aims to reduce and control risk concentrations. Concentrations of financial
risk arise when financial instruments with similar characteristics are influenced in the same way by
changes in economic or other factors. The amount of the risk exposure associated with financial
instruments sharing similar characteristics is disclosed in more detail in the notes to the financial
statements.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
89
29
Financial instruments – fair values and risk management (continued)
29.5
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations and arises principally from the Group’s bank balances of €4,029k
(2021: €2,465k), receivables from customers of €685k
(2021: €582k), loans receivable from related
parties of €5,598k
(2021: €6,046k) and investments in debt securities of €4,389k
(2021: €5,806k). The
carrying amounts of financial assets represent the maximum credit exposure. Impairment losses/
reversal on financial assets recognised in the statement of profit or loss were as follows:
2022
2021
€000
€000
Impairment reversal on corporate debt securities at FVOCI (see note 29.5.2)
(2)
-
Impairment reversal/ (loss) on loan to CNML (see note 29.5.3)
(15)
98
Impairment loss on loan to Parent company (see note 29.5.3)
2
-
(15)
98
29.5.1
Trade receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each
customer. However, management also considers the factors that may influence the credit risk of its
customer base, including the default risk associated with the industry. Details of concentration of
revenue are included in note 10.2. The Group’s revenue is not concentrated in a small number of
customers but is rather dispersed on a large client base made up of local and foreign clients coming
from all over the world. Moreover, the Group limits its exposure to credit risk by entering into
agreements with clients requiring full payment in advance of their berthing period and having the right
to exercise a general lien in case of payment default.
The majority of the Group’s customers have been transacting with the Group for over five years, and
only 0.07% (2021: 0.08%) of these customers’ balances have been written off or are credit-impaired at
the reporting date. In monitoring customer credit risk, this historical information is used to estimate
the expected credit losses on trade receivables.
At 31 December 2022, the exposure to credit risk for trade receivables by type of counterparty was as
follows:
2022
2021
€000
€000
Individuals
115
89
Legal entities
308
335
Agents
262
158
685
582
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
90
29
Financial instruments – fair values and risk management (continued)
29.5
Credit risk (continued)
29.5.1
Trade receivables (continued)
The following table provides information about the ageing of trade receivables as at 31 December:
2022
2021
€000
€000
Current (not past due)
154
110
1–30 days past due
177
78
31–60 days past due
142
87
61–90 days past due
99
22
More than 90 days past due
113
285
685
582
29.5.1.1
ECL assessment for trade receivables
For trade receivables the Group and the Company have applied the simplified approach in IFRS 9 to
measure the loss allowance at lifetime ECL.
Where the Group has reasonable and supportable information that is available without undue cost or
effort to measure lifetime ECLs on an individual instrument basis, such an individual assessment is
carried out. Lifetime ECLs on the remaining financial assets are measured on a collective basis, using a
provision matrix, estimated based on historical credit loss experience based on the past due status of
the debtors. No individual assessment is made as at 31 December 2022.
Since loss rates are based on actual credit loss experience over the past five years, the Group’s weighted
average loss rate for its receivables is less than 0.07% (2021: 0.08%), and therefore no expected credit
losses for trade receivables are registered as at 31 December 2022 (2021: €nil).
29.5.2
Investment in corporate debt securities
The Group limits its exposure to credit risk on corporate debt securities by investing only in liquid debt
securities that have the healthiest interest coverage ratios and gearing ratios, such as the net debt to
EBITDA ratio. The Group then monitors market price of the companies in which the Group holds its
debt securities on the local stock exchange.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
91
29
Financial instruments – fair values and risk management (continued)
29.5
Credit risk (continued)
29.5.2
Investment in corporate debt securities (continued)
The Group concluded there was no significant change in credit risk on these financial assets and
therefore calculated loss allowance equal to 12-month ECLs. In the absence of individual investment
grades to local corporate debt issuers, in calculating the probability of default, the Group looked at the
credit rating enjoyed by the jurisdiction in which these corporate debt issuers operate, with Malta being
rated an A., despite remaining unchanged from the previous year, with the probability of default used
in calculating the ECLs of 0.03% (December 2021: 0.06%).
The Company measured loss allowance on the investment in corporate debt securities at an amount
equal to 12-month ECLs, which amounted to €2k (2021: €4k). The movement in loss allowance is
charged to profit or loss and is recognised in OCI.
The exposure to credit risk for debt securities at FVOCI, net of expected credit losses, at the reporting
date by geographic region was as follows:
2022
2021
€000
€000
Country
Malta
(see note 19)
4,474
5,806
29.5.3
Amount due from related parties
29.5.3.1 Amount due from CNML
In the opinion of the directors, the two loan notes to CNML of €2,748k (December 2021: €2,796k), on-
lent to IC Cesme, carry a significant credit risk due to the ongoing political uncertainty in Turkey, and
the devaluation of the Turkish Lira, being the functional currency of IC Cesme. The Group has therefore
measured loss allowance equal to lifetime ECLs, through a probability-weighted calculation based on
the following scenarios:
•
Base case- 50% weighting (2021: 50%)- the probability of default used in calculating the ECLs
on such loan would be equivalent to the current credit rating of Turkey, being B emerging,
resulting in a lifetime ECL of €112k, with the base-case weighting of €56k (2021: €74k);
•
Best case- 20% weighting (2021: 20%)- the probability of default used in calculating the ECLs
on such loan would be equivalent to one scale higher than the current credit rating of Turkey,
being B+ emerging, resulting in a lifetime ECL of €115k, with the best-case weighting of €23k
(2021: €10k); and
•
Worst case- 30% weighting (2021: 30%)- the probability of default used in calculating the ECLs
on such loan would be equivalent to one scale lower than the current credit rating of Turkey,
being B- emerging, resulting in a lifetime ECL of €113k, with the worst-case weighting of €34k
(2021: €44k).
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
92
29
Financial instruments – fair values and risk management (continued)
29.5
Credit risk (continued)
29.5.3
Amount due from related parties (continued)
29.5.3.1 Amount due from CNML (continued)
This totalled to a lifetime ECL of €113k (December 2021: €128k) (Stage 2). The difference in loss
allowance is deducted from the gross carrying amount of the asset and presented separately in the
statement of profit or loss under “Impairment loss on financial assets”.
The following table shows the movement in lifetime ECLs (not credit-impaired) that has been
recognised for the amount due from CNML:
2022
2021
€000
€000
Opening balance at 1 January 2022
128
30
Movement during the year
(15)
98
Closing balance at 31 December 2022
113
128
29.5.3.2 Amount due from Parent company
The loss allowance on the other loans to Parent company of €2,850k (December 2021: €3,250k) has
been measured at 12-month ECL, which amounted to €4k (December 2021: €2k) and has been included
in ”Loans to related parties” in the statement of financial position.
The exposure to credit risk for the loan to related parties at amortised cost, net of expected credit
losses, at the reporting date by geographic region was as follows:
2022
2021
€000
€000
Country
Turkey (see note 20.3)
2,642
2,668
Guernsey (see note 20.2)
2,846
3,248
5,488
5,916
29.5.3.3 Amount due from other Related Parties
Management does not expect to incur any losses on receivables from other related parties.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
93
29
Financial instruments – fair values and risk management (continued)
29.5
Credit risk (continued)
29.5.4
Cash and cash equivalents
The Group held cash and cash equivalents of €4,031k at 31 December 2022 (2021: €2,466k). The cash
and cash equivalents are held with HSBC Bank Malta plc and Bank of Valletta plc, with the latter being
an investment grade-rated banking institution having a short-term rating of A-3 as per Standard and
Poor’s (S&P’s) (2021: A-3).
Impairment on cash and cash equivalents has been measured on a 12-month expected loss basis and
reflects the short maturities of the exposures. The Group considers that its cash and cash equivalents
have low credit risk based on the external ratings of S&P’s. The loss allowance amounted to €1k
(December 2021: €1k). The difference in loss allowance, if any, is recognized under “Impairment loss
on financial asset” in the statement of profit or loss.
29.6
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated
with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when they are due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s reputation.
The Group monitors its cash flow requirements on a weekly basis and ensures that it has sufficient cash
on demand to meet expected operational expenses, including the servicing of financial obligations. This
excludes the potential impact of extreme circumstances that cannot reasonably be predicted.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
94
29
Financial instruments – fair values and risk management (continued)
29.6
Liquidity risk (continued)
The following are the contractual maturities of financial liabilities at the reporting date. The amounts are gross, undiscounted and include contractual interest
payments.
Carrying
amount
Contractual
cash flows
6 months
or less
6 - 12
months
1 - 5 years
Over 5
years
€000
€000
€000
€000
€000
€000
31 December 2022
Financial liabilities
Debt securities in issue (see note 26.4)
14,790
(18,375)
(340)
(335)
(17,700)
-
Bank overdraft (see note 26.3)
2
(2)
(2)
-
-
-
Trade and other payables (see note 27)
266
(266)
(266)
-
-
-
Lease liabilities (see notes 21.1.2 and 29.6.1)
6,229
(37,428)
(254)
(142)
(1,556)
(35,476)
21,287
(56,071)
(862)
(477)
(19,256)
(35,476)
31 December 2021
Financial liabilities
Debt securities in issue (see note 26.4)
14,751
(19,050)
(340)
(335)
(2,025)
(16,350)
Bank overdraft (see note 26.3)
1
(1)
(1)
-
-
-
Trade and other payables (see note 27)
282
(282)
(282)
-
-
-
Lease liabilities (see note 21.1.2)
6,181
(37,762)
(254)
(108)
(1,549)
(35,851)
21,215
(57,095)
(877)
(443)
(3,574)
(52,201)
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
95
29
Financial instruments – fair values and risk management (continued)
29.6.1
Maturity analysis of lease liabilities
Further information about the maturity of lease liabilities is provided in the table below:
2022
2021
€000
€000
Maturity analysis – contractual undiscounted cash flows
Less than 1 year
(396)
(362)
1 to 5 years
(1,556)
(1,549)
6 to 10 years
(1,838)
(1,921)
11 to 20 years
(3,362)
(3,318)
21 to 40 years
(8,312)
(8,204)
More than 40 years
(21,964)
(22,408)
Total undiscounted lease liabilities at 31 December
(37,428)
(37,762)
29.7
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates,
will affect the Group’s income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within acceptable parameters,
while optimising the return.
29.7.1
Currency risk
The Group’s exposure to currency risk is limited to expenses that are denominated in a currency other
than the Company’s functional currency, primarily the British Pound, on intra-group balances. The
Group is not exposed to exchange rate movements on the Turkish Lira other than in respect of the
following – (a) the Group’s share in translating the post-acquisition reserves of its equity-accounted
investee from TL to Euro and (b) the exchange differences arising in the books of the joint venture with
TL as its functional currency. The Group does not hedge against exchange gains or losses which may
arise on the realisation of amounts receivable and the settlement of amounts payable in foreign
currencies.
29.7.1.1
Exposure to currency risk and sensitivity analysis
The Company’s exposure to currency risk is immaterial.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
96
29
Financial instruments – fair values and risk management (continued)
29.7
Market risk (continued)
29.7.2
Interest rate risk
The Group adopts a policy of ensuring that the majority of its interest rate risk exposure is at a fixed
rate. This is achieved by entering into financial arrangements subject to fixed interest rates.
During the year ended 31 December 2017, the Company issued bonds at a fixed rate of 4.50%, while
between 2018 and 2020, the Company has invested in corporate debt securities, all at fixed rates
ranging from 3.25% to 6% (see note 19). In addition, the loans to related parties range between 4% and
5%. These loans are not subject to interest rate fluctuations.
29.7.2.1 Fair value sensitivity analysis for fixed-rate instruments
The Group does not account for any fixed-rate financial assets or financial liabilities, at FVTPL.
Therefore, a change in interest rates at the reporting date would not affect profit or loss.
A decrease/ (increase) of 100 basis points in interest rates would have increased/ (decreased) equity
by €132k/ (€124k) after tax (2021: €240k/ (€222k) after tax). This analysis assumes that all other
variables, in particular foreign currency exchange rates, remain constant.
30
Commitments
No capital commitments were authorised and contracted for, or yet to be contracted for, at the
reporting date and at the end of the comparative period.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
97
31
Related parties
31.1
Parent and ultimate controlling party
The Company is a subsidiary of Camper & Nicholsons Marina Investments Limited (“CNMIL”), the
registered office of which is situated at ”
The Albany, South Esplanade, St Peter Port, Guernsey GY1 1AQ”
.
The ultimate controlling party is Mr Victor Chu, the Chairman and principal shareholder of First Eastern
(Holdings) Limited, which together with its wholly owned subsidiary, FE Marina Investments Limited,
owns 99.58% of CNMIL’s issued share capital (Dec 2021: 99.58%). Both First Eastern (Holdings) Limited
and FE Marina Investments Limited are incorporated in Hong Kong. As of 18 April 2023, CNMIL holds
17,393,590 shares, equivalent to 86.97% of the Company’s total issued share capital.
As described in note 18, the Company holds an investment in a joint venture.
CNMIL prepares consolidated financial statements of the Group of which Grand Harbour Marina p.l.c.
forms part.
31.2
Related party relationships, transactions and balances
Companies forming part of the CNMIL Group are considered by the directors to be related parties as
these companies are ultimately owned by CNMIL and First Eastern (Holdings) Limited. The transactions
and balances with such parties were as follows:
2022
2021
€000
€000
First Eastern (Holdings) Limited
Balance receivable at 1 January
9
-
Recharge of expenses (see note 22.1)
37
18
Cash received
(9)
(9)
Balance receivable at 31 December
37
9
Camper & Nicholsons Marinas Investments Limited
Principal in respect of Cesme Cash Collateral (see note 20.3)
2,797
2,954
Principal received during the year
(115)
(157)
Principal reclassified to CNML
(2,682)
-
Interest accrued at beginning of the year
100
133
Interest accrued during the year
7
4
Interest received during the year
(107)
(37)
Subtotal
-
2,897
Principal in respect of Loan Note 1 (see note 20.2)
400
400
Principal received during the year
(400)
-
Interest accrued during the year
12
16
Interest received during the year
(12)
(16)
Subtotal
-
400
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
98
31
Related parties (continued)
31.2
Related party relationships, transactions and balances (continued)
2022
2021
€000
€000
Camper & Nicholsons Marinas Investments Limited (continued)
Principal in respect of Loan Note 2 (see note 20.2)
600
600
Interest accrued during the year
24
24
Interest received during the year
(24)
(24)
Subtotal
600
600
Principal in respect of Loan Note 3 (see note 20.2)
2,250
2,250
Interest accrued during the year
101
101
Interest received during the year
(101)
(101)
Subtotal
2,250
2,250
Balance receivable at 31 December
2,850
6,147
Balance receivable, excluding principal of €2,850k (2021: €6,047k)
at 31 December (see note 22.1)
-
100
Camper & Nicholsons Marinas Limited
Balance payable at 1 January
(45)
(34)
Recruitment and operational service fees
(100)
(90)
Sales and marketing fees
(45)
(45)
Management, finance and other related services and expenses
(11)
(13)
Cash paid
160
137
Subtotal
(41)
(45)
Principal reclassified from Parent company
2,682
-
Interest accrued during the year
73
-
Subtotal
2,755
-
Balance receivable/ (payable) at 31 December
2,714
(45)
Camper & Nicholsons Marinas International Limited
Balance payable at 1 January
(48)
(53)
Royalty fees (1.5% of revenue excluding direct costs of utilities) as per
Trade Mark License Agreement
(52)
(48)
Cash paid
48
53
Balance payable at 31 December (see note 27.1)
(52)
(48)
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2022
99
31
Related parties (continued)
31.3
Transactions with key management personnel
Other than the remuneration payable to the directors, there were no other transactions with key
management personnel. CEO remuneration is borne by a related party.
32
Subsequent events
No significant events have taken place since the financial reporting date that would have otherwise
required adjustment to or disclosure in these financial statements, other than the below events which
occurred in Turkey, therefore relating to the Group’s investment in IC Cesme:
-
The Law No. 7438 on Social Security and General Health Insurance and the Law No. 375 on the
Amendment of the Decree Law No. 375, which includes the regulation on Persons who Aged at
Retirement (EYT), entered into force after being published in the Official Gazette dated March 3,
2023 and numbered 32121. This issue is considered as a non-adjusting event after the reporting
period within the scope of IAS 10 Events After the Reporting Period.
-
Pursuant to the “Law on Restructuring of Certain Receivables and Amending Certain Laws”
published in the Official Gazette dated 12 March 2023 and numbered 32130, by showing in the
corporate tax return for 2022, it is ensured that a one-time additional tax of 10% is charged on the
exemptions and deductions made from corporate income, and on the tax bases subject to reduced
corporate tax, without being associated with the
period's income. This issue is considered as a non
-
adjusting event after the reporting period within the scope of IAS 10 Events After the Reporting
Period.
Studies on measuring the financial impact of the above events on the operations and financial position
of IC Cesme were still in progress as at the date of approval of these financial statements.
33
Litigation and claims
The Company’s joint venture, IC Cesme, is disputing a claim and lawsuit by a former tenant of Cesme
Marina, Bolluca Turizm Gida San. ve Dis Tic.Ltd.Sti., which started a legal case against IC Cesme after its
contract was terminated in 2011 due to the lack of rental payments. The Board of Directors of IC Cesme,
having consulted the company’s Attorney, consider that the claim is not valid. The Izmir 3rd Basic
Commercial Court dismissed the case and the claimant made an appeal to the Izmir Regional Court of
Justice which was also rejected. A further case from the same claimant was rejected by the Izmir 3rd
Basic Commercial Court on 16 October 2020 and the related decision finalized on 30 June 2021.
Claimant made an appeal which is being investigated by the 6th Law Office of the Izmir Regional Court
as file name 2022/4150E.
Based on the advice received, the probability of an outflow of resources embodying economic resources
to settle the obligation is highly improbable. Nevertheless, in the unlikely event that IC Cesme lost the
lawsuit, it would result in a liability of €330k (2021: €448k) with the Group’s share being €149k (2021:
€202k).
The Deloitte Malta firm consists of (i) Deloitte, a civil partnership regulated in terms of the laws of Malta, constituted between limited liability companies, operating at Deloitte Place, Triq L-Intornjatur,
Central Business District, CBD 3050 Malta and (ii) the affiliated operating entities: Deloitte Advisory and Technology Limited (C23487), Deloitte Audit Limited (C51312), Deloitte Corporate Services Limited
(C103276) and Deloitte Tax Services Limited (C51320), all limited liability companies registered in Malta with registered offices at Deloitte Place, Triq L-Intornjatur, Central Business District, CBD 3050 Malta.
Deloitte Corporate Services Limited is authorised to act as a Company Service Provider by the Malta Financial Services Authority. Deloitte Audit Limited is authorised to provide audit services in Malta in
terms of the Accountancy Profession Act. The Deloitte Malta firm is an affiliate of Deloitte Central Mediterranean S.r.l., a company limited by guarantee registered in Italy with registered number
09599600963 and its registered office at Via Tortona no. 25, 20144, Milan, Italy. For further details, please visit www.deloitte.com/mt/about.
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© 2023. For information, contact Deloitte Malta.
Independent auditor’s report
to the members of
Grand Harbour Marina p.l.c.
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Grand Harbour Marina p.l.c. (the Company) and the consolidated financial
statements of the Company and its subsidiaries (together, the Group), set out on pages 28 to 99, which comprise the
statements of financial position of the Company and the Group as at 31 December 2022, and the statements of profit or
loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Company and
the Group for the year then ended, and notes to the financial statements, including a summary of significant accounting
policies.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of Tramp plc and
the Group as at 31 December 2022, and of the Company’s and the Group’s financial performance and cash flows for the
year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European
Union and have been properly prepared in accordance with the requirements of the Maltese Companies Act (Cap. 386).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those
standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial Statements
section of our
report. We are independent of the Company and the Group in accordance with the International Ethics Standards Board
for Accountants’
International Code of Ethics for Professional Accountants including International Independence
Standards
(IESBA Code) together with the
Accountancy Profession (Code of Ethics for Warrant Holders) Directive
(Maltese
Code) that are relevant to our audit of the financial statements in Malta, and we have fulfilled our other ethical
responsibilities in accordance with the IESBA Code and the Maltese Code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion. In conducting our audit, we have remained
independent of the Company and the Group and have not provided any of the non-audit services prohibited by article
18A(1) of the Maltese Accountancy Profession Act (Cap. 281).
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Deloitte Audit Limited
Deloitte Place,
Triq L
-Intornjatur,
Central Business District,
CBD 3050
Malta
Tel: +356 2343 2000, 2134 5000
Fax: +356 2133 2606
info@deloitte.com.mt
www.deloitte.com/mt
Company Ref No: C51312
VAT Reg No: MT2013 6121
Exemption number: EXO2155
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Report on the Audit of the Financial Statements (continued)
Key Audit Matters (continued)
Recoverability of the investment in joint venture in both the individual and the consolidated financial statements
Under IFRSs, at each reporting date, the Company and Group are required to review the carrying amounts of its non-
financial assets to determine whether there are any indications of impairment. If any such indications exist, then the
asset’s recoverable amount is determined. An impairment loss is the amount by which the carrying amount of the
investment exceeds its recoverable amount.
As at 31 December 2022, the carrying amount of the investment in IC Cesme Marina Yatirim, Turizm ve Isletmeleri
Anonim Sirketi ("IC Cesme") amounted to EUR2.17 million in the individual financial statements of the Company
(measured at cost), and EUR3.65 million in the consolidated financial statements (measured using the equity method).
The economic risks associated with the jurisdiction where this joint venture is established constituted a triggering event
in terms of International Accounting Standard 36 -
Impairment of Assets
as at 31 December 2022. The directors have
tested the investment to determine whether the recoverable amount is at least equal to its carrying amounts in the
individual financial statements of the Company and in the consolidated financial statements.
Significant judgement is involved in determining the recoverable amount of this investment, primarily as that evaluation
includes the assessment of key assumptions underlying the recoverable amount, namely, in relation to the budgeted
EBITDA, the inflationary growth rate, the capitalisation rate, the weighted average cost of capital and the exit yield
applied. As further described in note 18.4 to the financial statements, in assessing impairment, the directors estimate the
recoverable amount of the Company’s and the Group’s investment in IC Cesme based on expected future cash flows, and
use a discounting rate to discount them. Estimation uncertainty relates to assumptions about future operating results
and the determination of a suitable discount rate.
Our audit procedures included:
•
Using an internal valuation expert to assist us in evaluating the year end impairment methodology and the key
assumptions and inputs used by the Company and the Group for this purpose;
•
Performing sensitivity analyses of key inputs in the impairment testing calculations;
•
Reviewing the impairment testing calculations for reasonability, mathematical accuracy and consistency.
We also focused on the adequacy of the Company’s and the Group’s disclosures included in note 18 to the financial
statements about those assumptions to which the outcome of the impairment test is most sensitive, that is, those that
have the most significant effect on the determination of the recoverable amount of the investment in joint venture.
The Company’s and the Group’s disclosures about the recoverability of the investment in joint venture are set out in note
18 to the financial statements, which explains that the directors have assessed that the estimated recoverable amount of
the investment in joint venture, exceeds its carrying amount at both Company and Group level.
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Report on the Audit of the Financial Statements (continued)
Key Audit Matters (continued)
Application of hyperinflationary accounting to the equity-accounted investment in joint venture in the consolidated
financial statements
Levels of inflation in Turkey have been high for some time, with significant monthly increases from December 2021 to
date resulting in inflation indices exceeding 100 per cent on a three year cumulative basis. This is considered one of the
characteristics of hyperinflation as per International Accounting Standard 29 -
Financial Reporting in Hyperinflationary
Economies
("IAS 29").
The Group’s equity-accounted joint venture, IC Cesme, operates in Turkey which is considered a hyperinflationary
economy for the purpose of IAS 29. As a result, the investment in IC Cesme has been expressed in terms of the measuring
unit current at the reporting date, being the Consumer Price Index as published by the Turkish Statistical Institute.
Nevertheless, even though IC Cesme, whose functional currency is the currency of a hyperinflationary economy, restated
its own comparative financial information as required by IAS 29, the Group is not required to restate its comparative
amounts in its consolidated financial statements because the Group’s presentation currency is that of a non-
hyperinflationary economy. Instead, the Group’s comparative financial information remains unchanged from that
presented in the prior year’s consolidated financial statements, however, the cumulative impact of the retranslation of a
foreign operation which has the functional currency of a hyperinflationary economy is recognised in the group's Other
Comprehensive Income for the current year, in line with the requirements of International Accounting Standard 21 -
The
Effects of Changes in Foreign Exchange Rates
("IAS 21"). This results in a gain on restating non-monetary items amounting
to EUR1.59 million, which is material to the consolidated financial statements.
Our audit procedures included:
•
Reviewing the characteristics of the economic environment of Turkey, including the cumulative inflation rate over the
last three years which approaches or exceeds 100%;
•
Reviewing the restatement of financial information of IC Cesme, restated using the applicable measuring unit, as
required by IAS 29; and
•
Reviewing, together with the involvement of internal financial reporting experts, the translation of the restated
financial information of IC Cesme and its presentation in the financial statements of Grand Harbour Marina plc, which
presents its financial statements in a presentation currency that is of a non-hyperinflationary economy, in accordance
with the applicable requirements of IAS 21 for the retranslation of a foreign operation which has the functional
currency of a hyperinflationary economy.
The Group’s disclosures about hyperinflation are set out in note 5.3 to the financial statements which explains the
judgement exercised in determining whether the Turkish economy has become hyperinflationary in 2022, in note 6 which
describes the events which led to the conclusion that Turkey became a hyperinflationary economy in 2022, and in note
18 which describes the financial impact on the consolidated financial statements.
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Report on the Audit of the Financial Statements (continued)
Other Information
The directors are responsible for the other information. The other information comprises the General information, the
Chairman’s Statement, the Directors’ Report, the Statement of Directors’ responsibilities, the Directors’ Statement of
Compliance with the Code of Principles of Good Corporate Governance, Other Disclosures in terms of the Capital Market
rules and the Remuneration Report required under Rule 12.26K of the Capital Markets Rules, which we obtained prior to
the date of this auditor’s report.
However, the other information does not include the individual and consolidated financial statements, our auditor’s
report and the relevant tagging applied in accordance with the requirements of the European Single Electronic Format, as
defined in our
Report on Other Legal and Regulatory Requirements.
Except for our opinions on the Directors’ Report in accordance with the Maltese Companies Act (Cap. 386) and on the
Directors’ Statement of Compliance with the Code of Principles of Good Corporate Governance and on the Remuneration
Report in accordance with the Capital Markets Rules issued by the Malta Financial Services Authority, our opinion on the
financial statements does not cover the other information and we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified
above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report in this regard.
With respect to the Directors’ Report, we also considered whether the Directors’ Report includes the disclosure
requirements of Article 177 of the Companies Act (Cap. 386), and the statement required by Rule 5.62 of the Capital
Markets Rules on the Company’s and the Group’s ability to continue as a going concern.
In accordance with the requirements of sub-article 179(3) of the Maltese Companies Act (Cap. 386) in relation to the
Directors’ Report on pages 5 to 10, in our opinion, based on the work undertaken in the course of the audit:
•
the information given in the Directors’ Report for the financial year for which the financial statements are prepared is
consistent with those financial statements; and
•
the Directors’ Report has been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company, the Group and their environment obtained in the
course of the audit, we have not identified any material misstatements in the Directors’ Report.
Responsibilities of the Directors and the Audit Committee for the Financial Statements
As explained more fully in the Statement of Directors’ responsibilities on page 11, the directors are responsible for the
preparation of financial statements that give a true and fair view in accordance with IFRSs as adopted by the European
Union and the requirements of the Maltese Companies Act (Cap. 386), and for such internal control as they determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
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Report on the Audit of the Financial Statements (continued)
Responsibilities of the Directors and the Audit Committee for the Financial Statements (continued)
In preparing the financial statements, the directors are responsible for assessing the Company’s and the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Company and/or the Group or to cease
operations, or have no realistic alternative but to do so.
The directors have delegated the responsibility for overseeing the Company’s and the Group’s financial reporting process
to the Audit Committee.
Auditor’s Responsibilities for the Audit of the Financial Statements
This report, including the opinions set out herein, has been prepared for the Company’s members as a body in
accordance with articles 179, 179A and 179B of the Companies Act (Cap. 386).
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions in
accordance with articles 179, 179A and 179B of the Companies Act (Cap. 386). Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
In terms of article 179A(4) of the Maltese Companies Act (Cap. 386), the scope of our audit does not include assurance on
the future viability of the Company and the Group or on the efficiency or effectiveness with which the directors have
conducted or will conduct the affairs of the Company and the Group. The financial position of the Company and/or the
Group may improve, deteriorate, or otherwise be subject to change as a consequence of decisions taken, or to be taken,
by the management thereof, or may be impacted by events occurring after the date of this opinion, including, but not
limited to, events of force majeure.
As such, our audit report on the Company’s and the Group’s historical financial statements is not intended to facilitate or
enable, nor is it suitable for, reliance by any person, in the creation of any projections or predictions, with respect to the
future financial health and viability of the Company and/or the Group, and cannot therefore be utilised or relied upon for
the purpose of decisions regarding investment in, or otherwise dealing with (including but not limited to the extension of
credit), the Company and/or the Group. Any decision-making in this respect should be formulated on the basis of a
separate analysis, specifically intended to evaluate the prospects of the Company and/or the Group and to identify any
facts or circumstances that may be materially relevant thereto.
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Report on the Audit of the Financial Statements (continued)
Auditor’s Responsibilities for the Audit of the Financial Statements (continued)
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company’s and the Group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
•
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s and the Group’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures
in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Company and/or the Group to cease to continue as a going concern. Accordingly, in
terms of generally accepted auditing standards, the absence of any reference to a material uncertainty about
the Company’s and/or the Group’s ability to continue as a going concern in our auditor’s report should not be
viewed as a guarantee as to the Company’s and/or the Group’s ability to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
•
Obtain sufficient appropriate audit evidence regarding the financial information of the Companies or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
For the avoidance of doubt, any conclusions concerning the adequacy of the capital structure of the Company, including
the formulation of a view as to the manner in which financial risk is distributed between shareholders and/or creditors
cannot be reached on the basis of these financial statements alone and must necessarily be based on a broader analysis
supported by additional information.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, related safeguards.
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Report on the Audit of the Financial Statements (continued)
Auditor’s Responsibilities for the Audit of the Financial Statements (continued)
From the matters communicated with the Audit Committee, we determine those matters that were of most significance
in the audit of the individual and consolidated financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
Report on Other Legal and Regulatory Requirements
Report on compliance of the Annual Financial Report with the requirements of the European Single Electronic Format
Regulatory Technical Standard as specified in the Commission Delegated Regulation (EU) 2019/815 (the "ESEF RTS”)
Pursuant to Capital Markets Rule 5.55.6 issued by the Malta Financial Services Authority, we have undertaken a
reasonable assurance engagement in accordance with the requirements of the
Accountancy Profession (European Single
Electronic Format) Assurance Directive
issued by the Accountancy Board in terms of the Accountancy Profession Act (Cap.
281), hereinafter referred to as the “ESEF Directive 6”, on the annual financial report of the Company and the Group for
the year ended 31 December 2022, prepared in a single electronic reporting format.
Solely for the purposes of our reasonable assurance report on the compliance of the annual financial report with the
requirements of the ESEF RTS, the “Annual Financial Report” comprises the Directors’ Report, the Statement of Directors’
responsibilities, the Corporate Governance Statement of Compliance, the annual financial statements, the prescribed
disclosures of material contracts, General Company Information, and the Independent auditor’s report, as set out in
Capital Markets Rules 5.55.
Responsibilities of the Directors for the Annual Financial Report
The directors are responsible for:
•
the preparation and publication of the Annual Financial Report, including the consolidated financial statements and
the relevant tagging requirements therein, as required by Capital Markets Rule 5.56A, in accordance with the
requirements of the ESEF RTS,
•
designing, implementing, and maintaining internal controls relevant to the preparation of the Annual Financial
Report that is free from material non-compliance with the requirements of the ESEF RTS, whether due to fraud or
error,
and consequently, for ensuring the accurate transfer of the information in the Annual Financial Report into a single
electronic reporting format.
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Report on Other Legal and Regulatory Requirements (continued)
Report on compliance of the Annual Financial Report with the requirements of the European Single Electronic Format
Regulatory Technical Standard as specified in the Commission Delegated Regulation (EU) 2019/815 (the "ESEF RTS”)
(continued)
Auditor’s responsibilities for the Reasonable Assurance Engagement
Our responsibility is to obtain reasonable assurance about whether the Annual Financial Report, including the
consolidated financial statements and the relevant electronic tags therein comply, in all material respects, with the ESEF
RTS, based on the evidence we have obtained. We conducted our reasonable assurance engagement in accordance with
the requirements of ESEF Directive 6.
The nature, timing and extent of procedures we performed, including the assessment of the risks of material non-
compliance with the requirements of the ESEF RTS, whether due to fraud or error, were based on our professional
judgement and included:
•
Obtaining an understanding of the Company’s and the Group’s internal controls relevant to the financial reporting
process, including the preparation of the Annual Financial Report, in accordance with the requirements of the ESEF
RTS, but not for the purpose of expressing an assurance opinion on the effectiveness of these controls.
•
Obtaining the Annual Financial Report and performing validations to determine whether the Annual Financial Report
has been prepared in accordance with the requirements of the technical specifications of the ESEF RTS.
•
Examining the information in the Annual Financial Report to determine whether all the required tags therein have
been applied and evaluating the appropriateness, in all material respects, of the use of such tags in accordance with
the requirements of the ESEF RTS.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our reasonable
assurance opinion.
Reasonable Assurance Opinion
In our opinion, the Annual Financial Report for the year ended 31 December 2022 has been prepared, in all material
respects, in accordance with the requirements of the ESEF RTS.
This reasonable assurance opinion only covers the transfer of the information in the Annual Financial Report into a single
electronic reporting format as required by the ESEF RTS, and therefore does not cover the information contained in the
Annual Financial Report.
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Report on Corporate Governance Statement of Compliance
Pursuant to Rule 5.94 of the Capital Markets Rules issued by the Malta Financial Services Authority, the directors are
required to include in the Company’s Annual Financial Report a Directors’ Statement of Compliance with the Code of
Principles of Good Corporate Governance explaining the extent to which they have adopted the Code of Principles of
Good Corporate Governance set out in Appendix 5.1 to Chapter 5 of the Capital Markets Rules, and the effective
measures that they have taken to ensure compliance with those principles.
The Corporate Governance Statement of
Compliance is to contain at least the information set out in Rule 5.97 of the Capital Markets Rules.
Our responsibility is laid down by Rule 5.98 of the Capital Markets Rules, which requires us to include a report to
shareholders on the Corporate Governance Statement of Compliance in the Company’s Annual Financial Report.
We read the Corporate Governance Statement of Compliance and consider the implications for our report if we become
aware of any information therein that is materially inconsistent with the financial statements or our knowledge obtained
in the audit, or that otherwise appears to be materially misstated.
We also review whether the Corporate Governance
Statement of Compliance contains at least the information set out in Rule 5.97 of the Capital Markets Rules.
We are not required to, and we do not, consider whether the directors’ statements on internal control cover all risks and
controls, or form an opinion on the effectiveness of the Company’s corporate governance procedures or its risk and
control procedures.
In our opinion, the Directors’ Statement of Compliance with the Code of Principles of Good Corporate Governance set out
on pages 12 to 22 has been properly prepared in accordance with the requirements of Rules 5.94 and 5.97 of the Capital
Markets Rules.
Report on Remuneration Report
Pursuant to Rule 12.26K of the Capital Markets Rules issued by the Malta Financial Services Authority, the directors are
required to draw up a Remuneration Report, whose contents are to be in line with the requirements listed in Appendix
12.1 to Chapter 12 of the Capital Markets Rules.
Our responsibility is laid down by Rule 12.26N of the Capital Markets Rules, which requires us to check that the
information that needs to be provided in the Remuneration Report, as required in terms of Chapter 12 of the Capital
Markets Rules, including Appendix 12.1, has been included.
In our opinion, the Remuneration Report set out on pages 25 to 27 includes the information that needs to be provided in
the Remuneration Report in terms of the Capital Markets Rules.
Matters on which we are required to report by exception under the Companies Act
Under the Companies Act (Cap. 386), we have responsibilities to report to you if in our opinion:
•
Proper accounting records have not been kept;
•
Proper returns adequate for our audit have not been received from branches not visited by us;
•
The financial statements are not in agreement with the accounting records and returns; or
•
We have been unable to obtain all the information and explanations which, to the best of our knowledge and
belief, are necessary for the purpose of our audit.
We have nothing to report to you in respect of these responsibilities.
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Auditor tenure
We were first appointed by the members of the Company to act as statutory auditor of the Company and the Group for
the financial year ended 31 December 2021. The period of total uninterrupted engagement as statutory auditor including
previous reappointments of the firm is 2 financial years.
Consistency of the audit report with the additional report to the Audit Committee
Our audit opinion is consistent with the additional report to the Audit Committee in accordance with the provisions of
Article 11 of the EU Audit Regulation No. 537/2014.
The audit was drawn up on 18 April 2023 and signed by:
Antoine Carabott as Director
in the name and on behalf of
Deloitte Audit Limited
Registered auditor
Central Business District, Birkirkara, Malta