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

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.

Notes to the financial statements

For the Year Ended 31 December 2022

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.

 

 

 

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).

 

 

 

 

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.

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.

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.

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.

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.

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.

 

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.

 

 

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”.

 

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

 

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.

 

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.

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.

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.

 

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.

 

 

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

 

 

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

 

 

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

 

 

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)

 

 

 

 

 

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

 

 

 

 

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.

 

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.

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

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).

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)

 

 

 

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.

 

 

 

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)

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

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

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.

     

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.

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)

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.

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.

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.

 

 

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

 

 

 

 

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

 

 

 

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.

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

 

 

 

 

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

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.

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.

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.

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.

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)

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.

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

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.

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).

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.

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.

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)

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.

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.

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

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)