SP FINANCE P.L.C.
REPORT OF THE DIRECTORS
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Following a detailed assessment, the Board adopted these financial projections after concluding that they accurately reflect the financial results the Group is likely to derive from a realistically achievable, yet prudent, business scenario in the coming years.
In adopting these financial projections, the board also considered the excellent relationship the Group continues to enjoy with its bankers, evidenced this year by the extension of the COVID-19 loan repayment period from three to five years. The relationship with the banks spans several decades and suggests that additional finance, if needed, is likely to be forthcoming
Therefore, in terms of Capital Markets Rule 5.62, the Directors hereby state that these financial statements have been prepared on the going concern basis.
Loans between subsidiary companies
The proceeds from the bond issue of the 3 May 2019 were invested as €12,000,000 4.1% Cumulative Preference shares in its subsidiary SP Investments Limited. In turn, these proceeds were invested by SP Investments Limited in its subsidiaries, which are the companies operating the Group’s hotels, partly as Ordinary share capital and partly as loans.
As per section B5 of the Summary Note forming part of the Prospectus of the above-mentioned bond issue, the loans invested by SP Investments Limited in its subsidiaries were interest-free.
As from 1 January 2021, it was deemed beneficial to the Group that SP Investments Limited start charging interest on the loans to its subsidiaries at the rate of 8% per annum. The Group and the Company results are not negatively impacted by this change.
Results, Dividends and Reserves
The results for the year are set in the Statement of Profit and Loss and Other Comprehensive Income on page 10.
The Board does not propose the payment of a dividend.
The Group’s retained earnings as at 31 December 2022 amounted to negative €4,780,225 (2021: negative €2,227,322) while the Company’s retained earnings on the same date amounted to €169,919 (2021: €58,159).
Statement of Directors’ Responsibilities for the Financial Statements
The Companies Act (Chapter 386 of the Laws of Malta) requires the directors of SP Finance p.l.c. to prepare annual financial statements for each financial year which give a true and fair view of the state of affairs of the Group and the Company as at the end of the financial year and of the profit or loss for the year in accordance with the requirements of International Financial Reporting Standards as adopted by the European Union.
In preparing such financial statements, the Directors are required to:
-Adopt the going concern basis unless it is inappropriate to presume that the Group and the Company will continue in business;
-Select suitable accounting policies and apply them consistently from one accounting year to another;
-Make judgements and estimates that are reasonable and prudent; and
-Account for income and charges relating to the accounting year on the accruals basis.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time, the financial position of the Group and the Company and enable them to ensure that the financial statements have been properly prepared in accordance with the provisions of the Companies Act. The directors are also responsible for safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud, errors and other irregularities.
The financial statements of SP Finance p.l.c. and the Group for the year ended on 31 December 2022 are included in the Annual Report 2022, which is available on the Company’s website.