Independence
We are independent of the
Group and the Parent Company in accordance with the International
Code of Ethics for Professional Accountants (including
International Independence Standards) issued by the International
Ethics Standards Board for Accountants (IESBA Code) together
with the ethical requirements of the Accountancy Profession (Code
of Ethics for Warrant Holders) Directive issued in terms of the
Accountancy Profession Act (Cap. 281) that are relevant to our
audit of the financial statements in Malta. We have fulfilled our
other ethical responsibilities in accordance with these
Codes.
To the best of our
knowledge and belief, we declare that non-audit services that we
have provided to the parent company and its subsidiaries are in
accordance with the applicable law and regulations in Malta and
that we have not provided non-audit services that are prohibited
under Article 18A of the Accountancy Profession Act (Cap.
281).
The non-audit services
that we have provided to the parent company and its subsidiaries,
in the period from 1 January 2024 to 31 December 2024, are
disclosed in note 9 to the financial statements.
Overview
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Overall group
materiality: €3,600,000, which represents 5%
of profit before tax.
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The audit carried out by
the group auditor covered the parent company and the three
subsidiaries consolidated as part of the Group.
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Recognition of
revenue
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As part of designing our audit, we
determined materiality and assessed the risks of material
misstatement in the financial statements. In particular, we
considered where the directors made subjective judgements; for
example, in respect of significant accounting estimates that
involved making assumptions and considering future events that are
inherently uncertain. As in all of our audits, we also addressed
the risk of management override of internal controls, including
among other matters consideration of whether there was evidence of
bias that represented a risk of material misstatement due to
fraud.
Materiality
The scope of our audit was
influenced by our application of materiality. An audit is designed
to obtain reasonable assurance whether the financial statements are
free from material misstatement. Misstatements may arise due to
fraud or error. They are considered material if individually or in
aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial
statements.
Based on our professional
judgement, we determined certain quantitative thresholds for
materiality, including the overall group materiality for the
financial statements as a whole as set out in the table below.
These, together with qualitative considerations, helped us to
determine the scope of our audit and the nature, timing and extent
of our audit procedures and to evaluate the effect of
misstatements, both individually and in aggregate on the financial
statements as a whole.
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Overall
group materiality
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€3,600,000
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How we
determined it
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5% of profit before
tax
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Rationale
for the materiality benchmark applied
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We chose profit before
tax as the benchmark because, in our view, it is the benchmark
against which the performance of the Group is most commonly
measured by users, and is a generally accepted benchmark. We chose
5% which is within the range of quantitative materiality thresholds
that we consider acceptable.
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We agreed with the Audit
Committee that we would report to them misstatements identified
during our audit above €180,000 as well as misstatements
below that amount that, in our view, warranted reporting for
qualitative reasons.
Key audit matters
Key audit matters are
those matters that, in our professional judgement, were of most
significance in our audit of the financial statements of the
current period. 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.
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Key audit
matter
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How our audit addressed
the key audit matter
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Recognition of revenue
Revenue recognition has
been selected as a key audit matter due to the significance of the
amount to the consolidated income statement of Malta International
Airport p.l.c.’s financial statements. Furthermore, the
matter requires significant audit attention due to the various
revenue streams and the manner in which each revenue stream is
computed. The determination of revenue is complex in nature and
treated as a significant risk in the audit. Revenue recognition is
governed by IFRS 15 ‘Revenue from contracts with
customers’ and IFRS 16 ‘Leases’.
For the year ended 31
December 2024 the Group’s revenue amounted to
€142,869,459 (2023: €120,247,948). Revenue is a key
driver of the profitability before tax of the Group, which for the
year ended 31 December 2024 amounted to €72,187,367
(2023: €62,248,619).
The Group generates
income from regulated revenue, unregulated revenue and leases.
Regulated revenue comprises income from aviation services which
arise from income from passenger services charges. Regulated
revenue also comprises aircraft landing and parking fees which are
based on maximum take-off weight and aircraft area.
Unregulated revenue consists of
security fees, PRM
(persons with reduced mobility) charges and income from ground
handling services which are also based on passenger numbers, and
maximum take-off weight. Unregulated revenue also comprises certain
car parking revenue, income from VIP services, recharges for
utilities as well as meteorological services, fuel throughput
charges, charges for the use of common areas and other
income. Revenue from leases reflects all
income from renting office, retail, food and beverage, and
advertising space including commissions based on sales as well as
income from renting certain car parks. The revenue recognition
accounting policies are disclosed in note 40 to these financial
statements.
Further detail covering
revenue can be found in note 6 to the financial
statements.
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We tested the
recognition of revenue as follows:
- We performed a
detailed understanding of the revenue process including an
understanding of the design and implementation of the manual and
automated controls surrounding revenue recognition.
- Our IT audit
specialists have directed their efforts at systems and business
processes that have a significant impact on financial reporting to
ensure an appropriate level of control operates within the IT
general control environment with targeted areas including overall
IT management and governance, access to programs and data, computer
operations, program changes and development. Furthermore, the IT
audit specialists ensured that an appropriate level of automated
and manual application controls are in place to support the
processing of transactions by the key financial systems.
- We reconciled revenue
streams, including airport regulated and unregulated revenue,
income from tenants through leasing and parking revenue, to
listings extracted from operating systems. These listings were
deemed to be key reports and therefore we performed testing on
these listings to obtain comfort on the accuracy and completeness
of these key reports. Key variables including passenger numbers,
maximum take-off weight (“MTOW”) figures and aircraft
parking area have been confirmed to third party supporting
documentation and certificates.
- We recomputed, based
on the key reports tested as per above and through the use of a
data science and analytics automation platform, the airport revenue
derived from airlines and ground handlers based on passenger
numbers, maximum take-off weight (“MTOW”) figures and
aircraft parking area.
- We tested relevant
manual controls, mainly cash reconciliations performed by car park
attendants and members of the finance team, relating to parking
revenue which includes revenue collected through cash.
- We tested a sample of
other revenue transactions by agreeing the revenue to supporting
documentation including contracts, invoices and cash receipts and
ensuring that revenue is recognised appropriately.
- We performed testing
surrounding revenue recognised in the last few days of 2024 and
initial days of 2025 to ensure that revenue is recognised in the
correct period.
Based on work carried
out as detailed in the paragraphs above, we found revenue
recognition to be appropriate and in line with the expected
treatment of IFRS 15 ‘Revenue from
contracts with customers’ and IFRS 16
‘Leases’.
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How we tailored our group audit
scope
We tailored the scope of our audit in
order to perform sufficient work to enable us to provide an opinion
on the financial statements as a whole, taking into account the
structure of the Group, the accounting processes and controls, and
the industry in which the Group operates.
The Group is composed of four
components: Malta International Airport p.l.c. (the parent company)
and its three wholly owned subsidiaries. We tailored the
scope of our audit in order to perform sufficient work to enable us
to provide an opinion on the financial statements as a whole,
taking into account the structure of the Group, the accounting
processes and controls, and the industry in which the Group
operates.
The directors are
responsible for the other information. The other information
comprises the General Information, the Directors’ Report, the
Statement of Directors’ Responsibilities, the Corporate
Governance - Statement of Compliance and the Remuneration Report
(but does not include the financial statements and our
auditor’s report thereon), which we obtained prior to the
date of this auditor’s report, and the Chairman’s
Message, the Chief Executive Officer’s Review, information on
strategy and employees, the Aviation Report, the Retail & Property
Report, the Corporate Responsibility Report, and supporting key
data, investments and outlook information, which is expected to be
made available to us after that date.
Our opinion on the
financial statements does not cover the other information and we do
not and will not express any form of assurance conclusion thereon
except as explicitly stated within the Report on other legal and
regulatory requirements.
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 on the other information that we obtained prior to
the date of this auditor’s report, 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.
When we read the
Chairman’s Message, the Chief Executive Officer’s
Review, information on strategy and employees, the Aviation Report,
the Retail & Property Report, the Corporate Responsibility Report,
and supporting key data, investments and outlook information, if we
conclude that there is a material misstatement therein, we are
required to communicate the matter to those charged with governance
in accordance with International Standards on Auditing.
Responsibilities of the directors and those charged
with governance for the financial statements
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 EU
and the requirements of the Maltese Companies Act (Cap. 386), and
for 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.
In preparing the financial
statements, the directors are responsible for assessing the
Group’s and the Parent Company’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 Group or the
Parent Company or to cease operations, or have no realistic
alternative but to do so.
Those charged with
governance are responsible for overseeing the Group’s
financial reporting process.
Auditor’s
responsibilities for the audit of the financial
statements
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 opinion. 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.
As part of an audit in
accordance with ISAs, we exercise professional judgement and
maintain professional scepticism throughout the audit. We
also:
● Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal
control.
● 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 Group’s and the Parent
Company’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
Group’s or the Parent Company’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 Group or the Parent Company to
cease 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.
● Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business units within the
Group as a basis for forming an opinion on
the consolidated financial statements. We are responsible for the
direction, supervision and review of the audit work
performed for purposes of the group audit. We
remain solely responsible for our audit opinion.
We communicate with those
charged with governance 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 those
charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and
communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where
applicable, actions taken to eliminate threats or safeguards
applied.
From the matters
communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the
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
with the requirements of the European Single Electronic Format
Regulatory Technical Standard (the “ESEF RTS”), by
reference to Capital Markets Rule 5.55.6
We have undertaken a
reasonable assurance engagement in accordance with the requirements
of Directive 6 issued by the Accountancy Board in terms of the
Accountancy Profession Act (Cap. 281) - the Accountancy Profession
(European Single Electronic Format) Assurance Directive (the
“ESEF Directive 6”) on the Annual Financial Report of
Malta International Airport p.l.c. for the year ended 31 December
2024, entirely prepared in a single electronic reporting
format.
Responsibilities of
the directors
The directors are
responsible for the preparation of the Annual Financial Report,
including the consolidated financial statements and the relevant
mark-up requirements therein, by reference to Capital Markets Rule
5.56A, in accordance with the requirements of the ESEF
RTS.
Our
responsibilities
Our responsibility is to
obtain reasonable assurance about whether the Annual Financial
Report, including the consolidated financial statements and the
relevant electronic tagging therein, complies 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.
Our procedures
included:
● Obtaining an understanding of the entity's financial
reporting process, including the preparation of the Annual
Financial Report, in accordance with the requirements of the ESEF
RTS.
● 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 taggings therein have been
applied and whether, in all material respects, they are 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 opinion.
Opinion
In our opinion, the
Annual Financial Report for the year ended 31 December 2024 has
been prepared, in all material respects, in accordance with the
requirements of the ESEF RTS.
Other reporting
requirements
The Annual Financial
Report and Financial Statements 2024 contains other areas
required by legislation or regulation on which we are required to
report. The Directors are responsible for these other
areas.
The table below sets out
these areas presented within the Annual Financial Report, our
related responsibilities and reporting, in addition to our
responsibilities and reporting reflected in the Other
information section of our report. Except as outlined in the
table, we have not provided an audit opinion or any form of
assurance.
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Area of the Annual
Financial Report and Financial Statements 2024 and the
related Directors’ responsibilities
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Our
responsibilities
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Our reporting
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Directors’
report and Statement of Directors’
Responsibilities
The Maltese Companies Act
(Cap. 386) requires the directors to prepare a Directors’
report, which includes the contents required by Article 177 of the
Act and the Sixth Schedule to the Act.
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We are required to
consider whether the information given in the Directors’
report for the financial year for which the financial statements
are prepared is consistent with the financial
statements.
We are also required to
express an opinion as to whether the Directors’ report has
been prepared in accordance with the applicable legal
requirements.
In addition, we are
required to state whether, in the light of the knowledge and
understanding of the Company and its environment obtained in the
course of our audit, we have identified any material misstatements
in the Directors’ report, and if so to give an indication of
the nature of any such misstatements.
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In our
opinion:
● the information
given in the Directors’ report for the financial year for
which the financial statements are prepared is consistent with the
financial statements; and
● the
Directors’ report has been prepared in accordance with the
Maltese Companies Act (Cap. 386).
We have nothing to report
to you in respect of the other responsibilities, as explicitly
stated within the Other information section.
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Corporate Governance
– Statement of Compliance
The Capital Markets Rules
issued by the Malta Financial Services Authority require the
directors to prepare and include in the Annual Financial Report a
Statement of Compliance with the Code of Principles of Good
Corporate Governance within Appendix 5.1 to Chapter 5 of the
Capital Markets Rules. The Statement’s required minimum
contents are determined by reference to Capital Markets Rule
5.97. The Statement provides explanations as to how the
Company has complied with the provisions of the Code, presenting
the extent to which the Company has adopted the Code and the
effective measures that the Board has taken to ensure compliance
throughout the accounting period with those Principles.
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We are required to report
on the Statement of Compliance by expressing an opinion as to
whether, in light of the knowledge and understanding of
the Company and its environment obtained in the course of the
audit, we have identified any material misstatements with respect
to the information referred to in Capital Markets Rules 5.97.4 and
5.97.5, giving an indication of the nature of any such
misstatements.
We are also required to
assess whether the Statement of Compliance includes all the other
information required to be presented as per Capital Markets Rule
5.97.
We are not required to,
and we do not, consider whether the Board’s statements on
internal control included in the Statement of Compliance 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.
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In our opinion, the
Statement of Compliance has been properly prepared in accordance
with the requirements of the Capital Markets Rules issued by the
Malta Financial Services Authority.
We have nothing to report
to you in respect of the other responsibilities, as explicitly
stated within the Other information section.
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Remuneration
Report
The Capital Markets Rules
issued by the Malta Financial Services Authority require the
directors to prepare a Remuneration report, including the contents
listed in Appendix 12.1 to Chapter 12 of the Capital Markets
Rules.
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We are required to
consider whether the information that should be provided within the
Remuneration report, as required in terms of Appendix 12.1 to
Chapter 12 of the Capital Markets Rules, has been
included.
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In our opinion, the
Remuneration report has been properly prepared in accordance with
the requirements of the Capital Markets Rules issued by the Malta
Financial Services Authority.
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Other matters on which
we are required to report by exception
We also have
responsibilities under the Maltese Companies Act (Cap. 386) to
report to you if, in our opinion:
●
adequate accounting records have not been kept, or
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.
●
we have not received all the information and
explanations which, to the best of our knowledge and belief,
we require for our audit.
We also have
responsibilities under the Capital Markets Rules to review the
statement made by the directors that the business is a going
concern together with supporting assumptions or qualifications as
necessary.
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We have nothing to report
to you in respect of these responsibilities.
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Other matter –
use of this report
Our report, including the
opinions, has been prepared for and only for the Parent
Company’s shareholders as a body in accordance with Article
179 of the Maltese Companies Act (Cap. 386) and for no other
purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where
expressly agreed by our prior written consent.
We were first appointed
as auditors of the Company on 11 May 2022. Our appointment
has been renewed annually by shareholder resolution representing a
total period of uninterrupted engagement appointment of 3
years.
Stephen Mamo
Principal
For and on behalf
of
PricewaterhouseCoopers
78, Mill Street
Zone 5, Central Business
District
Qormi
Malta
24 February
2025
