Company Registration Number: C 81622
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements
31 December 2022
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
Pages
Directors’ report 1 - 5
Corporate Governance - Statement of Compliance 6 - 9
Statement of financial position 10
Statement of comprehensive income 11
Statement of changes in equity 12
Statement of cash flows 13
Notes to the financial statements 14 - 29
Independent auditor’s report
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
1
Directors’ report
The directors present their report and the audited financial statements for the year ended 31 December
2022.
Principal activity
Virtu Finance p.l.c. (the “company”) is a public liability company and is a wholly owned subsidiary of Virtu
Holdings Limited. Its principal activity is to raise financial resources from capital markets to finance
operations and capital projects of the Virtu Group of companies.
Review of the business
During the year under review, the company registered a profit before tax amounting to €4,709 (2021:
€10,254). After allowing for taxation, the profit for the year amounted to €3,061 (2021: €6,665).
Financial performance
Revenue amounting to €1,098,200 (2021: €1,098,200) is generated from a facility fee and interest charged
on loans advanced to Virtu Maritime Limited. Financial costs comprise interest payable on the outstanding
bond issue and amortisation of the issue costs thereof amounting to €995,635 (2021: €993,376).
Administrative expenses mainly comprise directors’ emoluments amounting to €45,000 (2021: €45,000)
and legal and professional fees amounting to €43,953 (2021: €38,803).
The directors do not expect any significant changes in the company’s activities in the short-term period and
expect that the company will continue to register a surplus based on projections for the foreseeable future.
Financial position
The company’s statement of financial position is in the main made up of the 3.75% unsecured bonds in
issue of €25 million and a corresponding loan amounting to €24.4 million advanced to Virtu Maritime Limited,
the guarantor of this bond. The loan receivable and the bond issued during 2017 are classified in Virtu
Finance p.l.c.’s statement of financial position under non-current assets and non-current liabilities
respectively as at 31 December 2022 and 2021. Virtu Finance p.l.c.’s equity amounted to €530,156
(2021: €527,095).
Guarantor’s performance for 2022 and outlook for 2023
Virtu Maritime Limited (the Guarantor) is the holding company for the subsidiary companies forming part of
the Virtu Maritime Group (the “Group”) and does not itself carry on any trading activities. As such, the
principal activities and markets in which the Virtu Maritime Limited Group operates correspond to the
principal activities and markets of the subsidiary group companies.
During the year under review, these activities have consisted of a fast ferry service between Malta and Sicily
as well as the fast ferry service between Valletta and Mgarr, Gozo which was introduced during FY 2021.
The HSC Maria Dolores charter-hire activity between Morocco and Spain recommenced operations at the
end of April 2022, following a close to two-year suspension due to COVID-19 related regulations. Following
a scheduled major overhaul to her four engines at the end of 2021, and in order to cope with the sharp
increase experienced in passenger and vehicular demand as Covid restrictions were lifted, the HSC Jean
de la Valette was once again deployed as a second vessel on the Malta - Pozzallo route for much of the
year under review.
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Annual Financial Report and Financial Statements - 31 December 2022
2
Directors’ report - continued
Guarantor’s performance for 2022 and outlook for 2023 - continued
The consolidated financial statements for financial year ended 31 December 2022 (FY 2022) of the Virtu
Maritime Limited Group, the guarantor of the bonds issued by Virtu Finance p.l.c., show a net asset position
of €81.1 million (2021: €80.3 million) for the group and €69.8 million (2021: €69.8 million) for the company
as at 31 December 2022, mainly arising from the investment in subsidiaries forming part of the Virtu
Maritime Group amounting to €49.6 million (2021: €49.6 million). The consolidated loss before taxation of
the group for the year ended 31 December 2022 amounted to €0.79 million (2021: loss €6.4 million), whilst
cash generated from operations for the year amounted to €2.0 million (2021: €6.3 million). These results
are much in line with those forecast in the Financial Analysis Summary (FAS) that was published on 23
June 2022. For the reasons explained below, the significant increase in Revenues (€41.9 million vs €37.4
million included in the FAS) arose from higher ferry operation incomes but were absorbed by higher fuel
costs.
Demand for the Malta/Sicily high speed ferry services (both passenger and vehicular) recovered strongly
over FY 2022 as Covid related restrictions were lifted; passenger numbers for the year exceeded pre-
pandemic levels as did vehicular traffic across all categories (private cars, trailers and trucks/vans).
However, the benefits of higher revenues from this increased demand was countered by significantly
elevated operating costs arising from yet another unforeseen event – the war in Ukraine. Fuel costs soared
as a result of the imposition of sanctions and restrictions on exports. Volatility in the oil markets was extreme
as supply chains were disrupted and security of supply became uncertain.
Part of these increased fuel (bunker) costs were absorbed by the fuel surcharge mechanism that was in
place and a modest bunker rebate scheme that was authorised by the EU. However, at the height of the
volatile conditions in the summer of 2022, bunker prices reached levels that could not be passed on to
customers and operational losses were incurred in keeping the service going. Over the last quarter of 2022
and into 2023 bunker prices, although still elevated by historical standards, have moderated – and security
of supply concerns have eased somewhat as markets have adjusted to the reality of the situation in Ukraine.
The successful rechartering of the HSC Maria Dolores for 8 months of 2022 improved revenues for the
year. The Gozo route remained challenging during FY 2022. Although passenger numbers improved on the
back of increased tourist arrivals, operating costs were hit hard by the higher bunker costs referred to above.
Continuing overcapacity on the route remained problematic rendering the service uneconomic. Remedial
action has since been taken (fully effective FY 2023) with the public service nature of a fast, reliable and
frequent service between Valletta and Mgarr, Gozo being acknowledged. An EU approved Public Service
Obligation (PSO) agreement is currently being concluded in negotiation with the Ministry for Transport,
Infrastructure and Capital Projects. A new vessel (the Gozo Express) that is more suitable to the route in
question has been chartered from a related company and will be operational throughout 2023.
Outlook for 2023
The directors do not expect any significant changes in Virtu Finance p.l.c.’s activities in the short-term period
and are confident that the company will be able to honour its obligations as and when they fall due. Based
on projections for Virtu Finance p.l.c. that have been prepared, the company is expected to register a surplus
for the foreseeable future.
This expectation takes into account a detailed assessment reviewed by the directors relating to the
operations of the guarantor group. The Virtu Maritime Group’s operations for financial year 2023 (FY 2023)
are expected to benefit from the strong recovery in the tourism sector and the economy in general. The
Ukraine war will continue to bring uncertainty and volatility to the oil-related markets. However, markets
have adjusted to the reality of supply constraints and prices, though remaining elevated, are well below
peak 2022 levels. Security of supply has also improved.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
3
Directors’ report - continued
Outlook for 2023 - continued
Therefore, the expectation is that with the ongoing recovery in the tourism sector, strong freight related
demand, moderating volatility in the fuel markets, the conclusion of a PSO agreement relating to Gozo
operations, and a full year of the HSC Maria Dolores charter hire agreement in place, that FY 2023 should
see a return to more normalised levels of profitability and cash generation for the guarantor group. Forecasts
prepared by management show a return to profitability and resumed cash generation that should allow for
debt reduction to take place over the course of the year. These projections indicate that the Group will be
able to honour its obligations as and when they fall due.
Accordingly, the directors believe that the going concern assumption for the preparation of the financial
statements is appropriate and do not envisage any material uncertainty in this regard. Reference should
also be made to Note 1.1 to the financial statements.
Financial risk management
The company’s activities expose it to a variety of financial risks, including credit risk and liquidity risk.
Reference should be made to Note 2 to these financial statements for a detailed review of how the company
addresses such risks.
Results and dividends
The statement of comprehensive income is set out on page 11. The directors do not recommend the
payment of a dividend. The directors have proposed that the balance of retained earnings amounting to
€30,156 (2021: €27,095) be carried forward to the next financial year.
Directors
The directors of the company who held office during the year were:
Roderick Chalmers - Non-Executive, Independent Chairman
Kevin Valenzia - Non-Executive, Independent Director
Matthew Portelli - Executive Director
Stephanie Attard Montalto - Executive Director
Stefan Bonello Ghio - Non-Executive Director
The Board meets on a regular basis to discuss financial performance, financial position and other matters.
Statement of directors’ responsibilities for the financial statements
The directors are required by the Maltese Companies Act (Cap. 386) to prepare financial statements which
give a true and fair view of the state of affairs of the company as at the end of each reporting period and of
the profit or loss for that period.
In preparing the financial statements, the directors are responsible for:
• ensuring that the financial statements have been drawn up in accordance with International Financial
Reporting Standards as adopted by the EU;
• selecting and applying appropriate accounting policies;
• making accounting estimates that are reasonable in the circumstances;
• ensuring that the financial statements are prepared on the going concern basis unless it is
inappropriate to presume that the company will continue in business as a going concern.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
4
Directors’ report - continued
Statement of directors’ responsibilities for the financial statements - continued
The directors are also responsible for designing, implementing and maintaining internal control relevant to
the preparation and the fair presentation of the financial statements that are free from material
misstatement, whether due to fraud or error, and that comply with the Maltese Companies Act (Cap. 386).
They are also responsible for safeguarding the assets of the company and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
The financial statements of Virtu Finance p.l.c. for the year ended 31 December 2022 may be made
available on the company’s website. The directors are responsible for the maintenance and integrity of the
Annual Financial Report on the website in view of their responsibility for the controls over, and the security
of, the website. Access to information published on the company’s website is available in other countries
and jurisdictions, where legislation governing the preparation and dissemination of financial statements may
differ from requirements or practice in Malta.
Auditors
PricewaterhouseCoopers have indicated their willingness to continue in office and a resolution for their
re-appointment will be proposed at the Annual General Meeting.
Disclosure in terms of the Capital Markets Rules
Going concern statement pursuant to Capital Markets Rule 5.62
After making enquiries and having taken into consideration the future plans of the company (Note 1.1), the
directors have reasonable expectation that the company has adequate resources to continue in operational
existence for the foreseeable future. For this reason, it continues to adopt the going concern basis in the
preparation of the financial statements.
Principal risks and uncertainties faced by the company
The company’s main objective, as a finance company for the Virtu Maritime Group of companies, is to raise
funds, mainly from the capital markets, to finance the operations and capital projects of the Virtu Maritime
Group. In this context, the company’s ability to recover loans issued to its fellow subsidiary is dependent on
the performance of the companies within the Virtu Maritime Group to which amounts have been advanced
by the company. Further details of the performance of the guarantor group are provided in the review of the
guarantor’s performance for FY 2022 and the outlook for FY 2023 set out above.
Within this context, the directors have evaluated the risks faced by the various companies to which funds
have been advanced and continue to monitor closely the impact of events as they take place in the local
and global economy, and how these would affect the ability of the various companies within the group to
honour their financial commitments. On the basis of this analysis, the directors are of the view that all
amounts receivable by the company are fully recoverable.
In case of default by group companies to repay loans to Virtu Maritime Limited, Virtu Maritime Limited
guarantees to pay all amounts of principal and interest due by the issuer to the bondholders which remains
unpaid by the issuer.
A detailed review of the risk management policies employed by the company is included in Note 2 of these
financial statements.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
5
Directors’ report - continued
Disclosure in terms of the Capital Markets Rules - continued
Pursuant to Capital Markets Rule 5.64
Appointment and Replacement of Directors
Directors are appointed during the company’s Annual General Meeting for periods of one year, at the end
of which term they may stand again for re-election.
Board Member Powers
The powers of the Board members are contained in Articles 54-69 of the company’s Articles of Association.
No disclosures are being made pursuant to Capital Markets Rules 5.64.3, 5.64.4, 5.64.5, 5.64.6, 5.64.7 and
5.64.10 as these are not applicable to the company.
Contracts with Board Members and Employees
The company has no contract with any of its Board members that include a severance payment clause.
The company had no employees during the year ended 31 December 2022 and 2021 and non-executive
directors were paid €45,000 (2021: €45,000) for services rendered during the year. Each director received
an annual remuneration of €15,000 (2021: €15,000). The directors receive no further monetary and non-
monetary benefits from the company.
Pursuant to Capital Markets Rule 5.70.1
In the normal course of the company’s business, during 2017 the company advanced by way of loan, an
amount of €24,400,000 to Virtu Maritime Limited, the parent company of the Virtu Maritime Group, the
guarantor of the bond in issue by the company. Details of such contract is set out in note 4 to these financial
statements. No further advances were made to group entities during 2022 and 2021.
Pursuant to Capital Markets Rule 5.68
Statement by the Directors on the Financial Statements and Other Information included in the
Annual Financial Report
The directors declare that to the best of their knowledge, the financial statements included in the Annual
Financial Report are prepared in accordance with the requirements of International Financial Reporting
Standards as adopted by the EU and give a true and fair view of the assets, liabilities, financial position and
profit of the company and that this report includes a fair review of the development and performance of the
business and position of the company, together with a description of the principal risks and uncertainties
that it faces.
Signed on behalf of the Board of Directors on 28 April 2023 by Roderick Chalmers (Non-Executive,
Independent Chairman) and Stephanie Attard Montalto (Executive Director) as per the Directors'
Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Financial Report.
Registered office:
Virtu
Ta’ Xbiex Terrace,
Ta’ Xbiex
XBX 1034
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
6
Corporate Governance - Statement of Compliance
Introduction
The Capital Markets Rules issued by the Malta Financial Services Authority, require listed companies to
observe The Code of Principles of Good Corporate Governance (the “Code”). Although the adoption of the
Code is not obligatory, Listed Companies are required to include, in their Annual Financial Report, a
Directors’ Statement of Compliance which deals with the extent to which the company has adopted the
Code of Principles of Good Corporate Governance and the effective measures that the company has taken
to ensure compliance with the Code, accompanied by a report of the auditors thereon.
Compliance
Since its incorporation, the company’s principal activity was to raise funds mainly from the capital market to
finance the operations and capital projects of the Virtu Maritime Group.
In deciding on the most appropriate manner in which to implement the Principles, the Board of Virtu Finance
p.l.c. (the “Board”) has taken cognisance of its size, which inevitably impacts on the structures required to
implement the Principles without diluting the effectiveness thereof. The company does not have any
employees. Accordingly, some of the provisions of the Code are not applicable whilst others are applicable
to a limited extent.
Roles and responsibilities
The Board of Directors is responsible for devising a strategy, setting policies and the management of the
company. It is also responsible for reviewing internal control procedures, financial performance and
business risks facing the company. The Board is also responsible for decisions relating to the redemption
of the Bond and for monitoring that its operations are in conformity with the Prospectus and all relevant
rules and regulations.
Throughout the year under review, the Board regularly reviewed management performance. The company
has in place systems whereby the directors obtain timely information from the Virtu Maritime Group of
companies Chairman, not only at meetings of the Board but at regular intervals or when the need arises.
Complement of the Board of Directors
The Board is composed of two executive and three non-executive directors, as listed below.
Executive Directors
Matthew Portelli (appointed on incorporation)
Stephanie Attard Montalto (appointed on incorporation)
Non-Executive Directors
Roderick Chalmers (appointed on incorporation)
Stefan Bonello Ghio (appointed on incorporation)
Kevin Valenzia (appointed on 28 December 2021)
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Annual Financial Report and Financial Statements - 31 December 2022
7
Corporate Governance - Statement of Compliance - continued
Complement of the Board of Directors - continued
Kevin Valenzia, Stefan Bonello Ghio and Roderick Chalmers hold non-executive positions with Virtu
Maritime Limited, being a subsidiary of Virtu Holdings Limited and the guarantor of Virtu Finance p.l.c..
Matthew Portelli and Stephanie Attard Montalto are executive directors on Virtu Holdings Limited and on
other subsidiary companies of Virtu Holdings Limited. For the purpose of the provisions of the Code, the
Board considers , Kevin Valenzia and Roderick Chalmers as independent.
Directors are appointed during the company’s Annual General Meeting for periods of one year, at the end
of which term they may stand again for re-election. The Articles of Association of the company clearly set
out the procedures to be followed for the appointment of directors.
Internal Control
The Board is responsible for the company’s system of internal controls and for reviewing its effectiveness.
Such a system is designed to achieve business objectives and to manage rather than to eliminate the risk
of failure to achieve business objectives and can only provide reasonable assurance against material error,
losses or fraud.
Systems and procedures are in place for the company to control, report, monitor and assess risks and their
financial implications, and to take timely corrective actions where necessary. Regular financial budgets and
strategic plans are prepared, and performance against these plans is actively monitored and reported to
the directors on a regular basis.
The approval of credit to customers is made by the Group Financial Controller, in strict adherence to a
Board-approved limit. Proposals falling outside the limit are referred, together with the supporting
documentation and the Financial Controller’s recommendations, to the Board. The Board also approves,
after review and recommendation by the Audit Committee, the transfer of funds and other amounts payable
to companies within the same group and ensures that these are subject to terms and conditions which are
on an arm’s length basis.
Directors’ Attendance at Board Meetings
The Board believes that it has systems in place to fully comply with the principles of the Code. Directors
meet regularly, mainly to review the financial performance of the company and to review internal control
processes. Board members are notified of forthcoming meetings by the company Secretary with the issue
of an agenda and supporting Board papers, which are circulated well in advance of the meeting. All the
directors have access to independent professional advice at the company’s expense should they so require.
The Board met formally five times during the year under review. The number of board meetings attended
by directors for the year ended 31 December 2022 is as follows:
Members Attended
Matthew Portelli 5
Stephanie Attard Montalto 5
Roderick Chalmers 5
Stefan Bonello Ghio 5
Kevin Valenzia 5
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
8
Corporate Governance - Statement of Compliance - continued
Committees
The directors believe that, due to the company’s size and operation, the remuneration, evaluation and
nominations committees that are suggested in the Code are not required, and that the function of these can
efficiently be undertaken by the Board itself. However, the Board on an annual basis undertakes a review
of the remuneration paid to the directors and carries out an evaluation of their performance and that of the
Audit Committee. The shareholders approve the remuneration paid to the directors at the annual general
meeting.
Audit Committee
The Board established an Audit Committee (the “Committee”) and has formally set out Terms of Reference
as outlined in the Principles laid out in the Capital Markets Rules. The purpose of the Committee is to
protect the interest of the company’s shareholders, bond holders, and assist the directors in conducting
their role effectively. The Audit Committee also monitors the financial reporting process, the effectiveness
of internal control and the audit of the annual financial statements. Additionally, it is responsible for
monitoring the performance of the entities borrowing funds from the company, to ensure that budgets are
achieved and if not, that corrective action is taken as necessary. It also scrutinises and supervises related
party transactions for materiality and ensures that these are carried out at arm’s length basis. By a letter
dated 30
th
October 2017, the Listing Authority considered the Terms of Reference as having sufficient
safeguards to ensure the independence of the Audit Committee.
The Members of the Audit Committee are:
Roderick Chalmers - Chairman of the Audit Committee, Non-Executive, Independent Director
Kevin Valenzia - Non-Executive, Independent Director (appointed on 28 December 2021)
Stefan Bonello Ghio - Non-Executive Director
Mr Roderick Chalmers, Mr Kevin Valenzia and Mr Stefan Bonello Ghio are Certified Public Accountants.
The Committee met four times during the year ended 31 December 2022.
Remuneration Statement
In terms of the company’s Memorandum and Articles of Association, it is the shareholders of the company
in the General Meeting who determine the maximum annual aggregate remuneration of the directors. The
aggregate amount approved and paid to directors for this purpose during the year was €45,000.
None of the directors is employed or has a service contract with the company.
No part of the remuneration paid to the directors is performance based. None of the directors, in their
capacity as a Director of the company, is entitled to profit sharing, share options or pension benefits.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
9
Corporate Governance - Statement of Compliance - continued
Relations with bondholders and the market
The company publishes interim and annual financial statements and, when required, company
announcements. The Board feels these provide the market with adequate information about its activities.
Conflicts of Interest
On joining the Board and regularly thereafter, directors and officers of the company are informed and
reminded of their obligations on dealing in securities of the company within the parameters of law and
Capital Markets Rules. The company has also set reporting procedures in line with the Capital Markets
Rules, Code of Principles, and internal code of dealing.
Approved by the Board of Directors on 28 April 2023.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
10
Statement of financial position
As at 31 December
2022
2021
Notes
€
€
ASSETS
Non-current assets
Loans and receivables
4
24,400,000
24,400,000
Deferred tax asset
5
47,263
-
Total non-current assets
24,447,263
24,400,000
Current assets
Trade and other receivables
6
898,942
891,495
Cash and cash equivalents
7
88,632
7,905
Total current assets
987,574
899,400
Total assets
25,434,837
25,299,400
EQUITY AND LIABILITIES
Capital and reserves
Share capital
8
500,000
500,000
Retained earnings
30,156
27,095
Total equity
530,156
527,095
Non-current liabilities
Borrowings
9
24,678,339
24,620,204
Total non-current liabilities
24,678,339
24,620,204
Current liabilities
Trade and other payables
10
226,342
138,144
Current tax liabilities
-
13,957
Total current liabilities
226,342
152,101
Total liabilities
24,904,681
24,772,305
Total equity and liabilities
25,434,837
25,299,400
The notes on pages 14 to 29 are an integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board of Directors on 28 April
2023. The financial statements were signed on behalf of the Board of Directors by Roderick Chalmers
(Non-Executive, Independent Chairman) and Stephanie Attard Montalto (Executive Director) as per the
Directors' Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual
Financial Report.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
11
Statement of comprehensive income
Year ended 31 December
2022
2021
€
€
Interest and other related income
1,098,200
1,098,200
Interest payable and similar charges
(995,635)
(993,376)
Gross profit
102,565
104,824
Administrative expenses
(97,856)
(94,570)
Profit before tax
4,709
10,254
Tax expense
(1,648)
(3,589)
Profit for the year
3,061
6,665
Earnings per share
0.0061
0.0133
The notes on pages 14 to 29 are an integral part of these financial statements.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
12
Statement of changes in equity
Share
Retained
capital
earnings
Total
€
€
€
Balance at 1 January 2021
500,000
20,430
520,430
Comprehensive income
Profit for the year - total comprehensive income
-
6,665
6,665
Balance at 31 December 2021
500,000
27,095
527,095
Balance at 1 January 2022
500,000
27,095
527,095
Comprehensive income
Profit for the year - total comprehensive income
-
3,061
3,061
Balance at 31 December 2022
500,000
30,156
530,156
The notes on pages 14 to 29 are an integral part of these financial statements.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
13
Statement of cash flows
Year ended 31 December
Notes
2022
2021
€
€
Cash flows from operating activities
Cash generated from/(used in) operations
17
143,595
(6,084)
Tax (paid)/refund
(62,868)
633
Net cash generated from/(used in) operating activities
80,727
(5,451)
Net movement in cash and cash equivalents
80,727
(5,451)
Cash and cash equivalents at beginning of year
7,905
13,356
Cash and cash equivalents at end of year
7
88,632
7,905
The notes on pages 14 to 29 are an integral part of these financial statements.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
14
Notes to the financial statements
1. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set
out below. These policies have been consistently applied to the year presented, unless otherwise
stated.
1.1 Basis of preparation
These financial statements have been prepared in accordance with the requirements of
International Financial Reporting Standards (IFRSs) as adopted by the EU and with the
requirements of the Maltese Companies Act (Cap. 386). The financial statements have been
prepared under the historical cost convention.
The preparation of financial statements in conformity with IFRSs as adopted by the EU requires
the use of certain accounting estimates. It also requires directors to exercise their judgment in
the process of applying the company’s accounting policies (see Note 3 – Critical accounting
estimates and judgments).
Standards, interpretations and amendments to published standards effective in 2022
In 2022, the company adopted new standards, amendments and interpretations to existing
standards that are mandatory for the company’s accounting period beginning on 1 January 2022.
The adoption of these revisions to the requirements of IFRSs as adopted by the EU did not result
in substantial changes to the company’s accounting policies impacting the company’s financial
performance and position.
Standards, interpretations and amendments to published standards that are not yet effective
Certain new standards, amendments and interpretations to existing standards have been
published by the date of authorisation for issue of these financial statements that are mandatory
for the company’s accounting periods beginning after 1 January 2022. The company has not
early adopted these revisions to the requirements of IFRSs as adopted by the EU and the
company’s directors are of the opinion that, with the exception of the below pronouncements,
there are no requirements that will have a possible significant impact on the company’s financial
statements in the period of initial application.
Going concern
Virtu Finance p.l.c.’s (the Company) principal activity is to act as a finance company for the Virtu
Maritime Group of companies (the Group) and to assist in effectively and efficiently managing
the Group’s long terms capital requirements. In this context, the company’s ability to recover
loans issued to its fellow subsidiary is dependent on the performance of the operating companies
within the group to which amounts have been advanced.
The Virtu Maritime Group’s operations for FY 2022 reflected a recovery in the Malta/Sicily ferry
operations as Covid related restrictions were lifted and the tourist sector opened up. Improved
economic conditions also stimulated freight traffic. However, the impact of the Ukraine war
resulted in significantly higher fuel (bunker) costs which wholly eroded the benefits of higher
revenues. Improved market conditions resulted in the rechartering of the HSC Maria Dolores from
the end of April 2022. The Gozo high speed ferry operations remained problematic during FY
2022, but mitigating measures have since been taken that will benefit results going forward.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
15
1. Summary of significant accounting policies - continued
1.1 Basis of preparation - continued
Going concern - continued
Looking forward to FY 2023, the Virtu Maritime Group board envisages strong demand on the
Malta/Sicily route, a full year charter hire for HSC Maria Dolores and an improved result from the
Gozo operations. Volatility in the fuel market has moderated. Projections prepared by
management (and which have been reviewed by the Virtu Maritime and Virtu Finance boards of
directors) indicate profitability and cash generation to return to more normalised levels. Based on
this review, the boards of directors expect that the Virtu Maritime Group will be able to sustain its
operations over the next twelve months, will have adequate resources to continue in operation
for the foreseeable future and will be in a position to meet its obligations as and when they fall
due.
Accordingly, the Virtu Finance board of directors has concluded that there is no material
uncertainty in respect of going concern and based on the foregoing the directors believe that it is
appropriate to prepare these financial statements on a going concern basis.
1.2 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to
the chief operating decision-maker. The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating segments has been identified
as the board of directors that makes strategic decisions. The board of directors considers the
company to be made up of one segment, which is raising financial resources from capital markets
to finance the group’s working capital and other capital projects. The company’s main revenue
and expenses are generated in Malta and Sicily and revenue is mainly earned from other
companies forming part of the Virtu Maritime Group of companies.
1.3 Foreign currency translation
Functional and presentation currency
Items included in these financial statements are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The euro is the
company’s functional and presentation currency.
1.4 Financial assets
The comparative information provided continues to be accounted for in accordance with the
company’s previous years accounting policy.
Classification
The company classifies its financial assets as financial assets measured at amortised cost. The
classification depends on the entity’s business model for managing the financial assets and the
contractual terms of the cash flows. The company classifies its financial assets as at amortised
cost only if both the following criteria are met:
- The asset is held within a business model whose objective is to collect the contractual cash
flows, and;
- The contractual terms give rise to cash flows that are solely payments of principal and interest.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
16
1. Summary of significant accounting policies - continued
1.4 Financial assets - continued
Classification - continued
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.
In assessing whether the contractual cash flows are solely payments of principal and interest,
the company 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.
Recognition and measurement
Regular way purchases and sales of financial assets are recognised on the trade date, which is
the date on which the company commits to purchase or sell the asset. Financial assets are
derecognised when the rights to receive cash flows from the financial assets have expired or
have been transferred and the company has transferred substantially all the risks and rewards
of ownership.
At initial recognition, the company measures a financial asset at its fair value plus, in the case of
a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly
attributable to the acquisition of the financial asset.
Interest income on debt instruments measured at amortised cost from these financial assets is
included in finance income using the effective interest rate method. Any gain or loss arising on
derecognition of these instruments is recognised directly in profit or loss and presented in other
gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented
as a separate line item in the statement of comprehensive income.
Impairment
The company assesses on a forward-looking basis the expected credit losses (ECL) associated
with its debt instruments carried at amortised cost. The impairment methodology applied depends
on whether there has been a significant increase in credit risk. The company’s financial assets
are subject to the expected credit loss model.
Expected credit loss model
The company 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
• other debt securities and bank balances for which credit risk has not increased significantly
since initial recognition.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
17
1. Summary of significant accounting policies - continued
1.4 Financial assets - continued
Impairment - continued
Expected credit loss model - continued
When determining whether the credit risk of a financial asset has increased significantly since
initial recognition and when estimating ECLs, the company considers reasonable and
supportable information that is relevant and available without undue cost or effort. The company
assumes that the credit risk on a financial asset has increased significantly if it is more than 30
days past due, and it considers a financial asset to be in default when the borrower is unlikely to
pay its credit obligations to the company in full, without recourse by the company to actions such
as realising security (if any is held); or the financial asset is more than 90 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of
a financial instrument. 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 company is exposed to credit risk.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the
present value of all cash shortfalls. ECLs are discounted at the effective interest rate of the
financial asset.
At each reporting date, the company assesses whether financial assets carried at amortised cost
are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a
detrimental impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes observable data such as significant
financial difficulty of the borrower or issuer, or a breach of contract such as a default or being
more than 90 days past due.
Loss allowances for financial assets measured at amortised cost are deducted from the gross
carrying amount of the assets.
Simplified approach model
For trade receivables, the company applies the simplified approach required by IFRS 9, which
requires expected lifetime losses to be recognised from initial recognition of the receivables.
The expected loss rates are based on the payment profiles of sales over a period of 12 months
before 31 December 2022 or 1 January 2023, respectively, and the corresponding historical
credit losses experienced within this period. The historical loss rates are adjusted to reflect
current and forward-looking information on macroeconomic factors affecting the liability of the
customers to settle the receivable. Trade receivables are written off when there is no reasonable
expectation of recovery. Indicators that there is no reasonable expectation of recovery include,
among others, the probability of insolvency or significant financial difficulties of the debtor.
Impaired debts are derecognised when they are assessed as uncollectible.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
18
1. Summary of significant accounting policies - continued
1.5 Trade and other receivables
Trade receivables comprise amounts due from customers for merchandise sold or services
performed in the ordinary course of business. If collection is expected in one year or less (or in
the normal operating cycle of the business if longer), they are classified as current assets. If not,
they are presented as non-current assets.
Trade and other receivables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method.
Details about the company’s impairment policies and the calculation of loss allowance are
provided in Note 1.4.
1.6 Cash and cash equivalents
Cash and cash equivalents are carried in the statement of financial position at face value. In
the statement of cash flows, cash and cash equivalents include cash in hand, deposits held at
call with bank and bank overdrafts. Bank overdrafts, if any, are shown within borrowings.
1.7 Current and deferred tax
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or
loss, except to the extent that it relates to items recognised in other comprehensive income or
directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
Deferred tax is recognised, using the liability method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the financial statements.
However, deferred tax is not accounted for if it arises from initial recognition of an asset or liability
in a transaction other than a business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates (and
laws) that have been enacted or substantively enacted by the end of the reporting period and are
expected to apply when the related deferred tax asset is realised or the deferred tax liability is
settled.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets against current tax liabilities and when the deferred tax assets and liabilities
relate to income taxes levied by the same taxation authority on either the same taxable entity or
different taxable entities where there is an intention to settle the balances on a net basis.
1.8 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
new ordinary shares are shown in equity as a deduction, net of tax, from the proceeds.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
19
1. Summary of significant accounting policies - continued
1.9 Financial liabilities
The company recognises a financial liability in its statement of financial position when it becomes
a party to the contractual provisions of the instrument. The company’s financial liabilities are
classified as financial liabilities which are not at fair value through profit or loss (classified as
‘Other liabilities’). These financial liabilities are recognised initially at fair value, being the fair
value of consideration received, net of transaction costs that are directly attributable to the
acquisition or the issue of the financial liability. These liabilities are subsequently measured at
amortised cost. The company derecognises a financial liability from its statement of financial
position when the obligation specified in the contract or arrangement is discharged, is cancelled
or expires.
1.10 Borrowings
Borrowings are recognised initially at the fair value of proceeds received, net of transaction costs
incurred. Borrowings are subsequently carried at amortised cost; any difference between the
proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over
the period of the borrowings using the effective interest method. Borrowings are classified as
current liabilities unless the company has an unconditional right to defer settlement of the liability
for at least twelve months after the end of the reporting period.
Issue costs incurred in connection with the issue of the bonds include professional fees, publicity,
printing, listing, registration, underwriting, management fees, selling costs and other
miscellaneous costs.
1.11 Trade and other payables
Trade payables comprise obligations to pay for goods or services that have been acquired in the
ordinary course of business from suppliers. Accounts payable are classified as current liabilities
if payment is due within one year or less (or in the normal operating cycle of the business if
longer). If not, they are presented as non-current liabilities.
Trade and other payables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method.
1.12 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the statement of
financial position when there is a legally enforceable right to set off the recognised amounts and
there is an intention to settle on a net basis, or realise the asset and settle the liability
simultaneously.
1.13 Provisions
Provisions for legal claims are recognised when the company has a present legal or constructive
obligation as a result of past events, it is probable that an outflow of resources will be required to
settle the obligation, and the amount has been reliably estimated. Provisions are not recognised
for future operating losses.
Provisions are measured at the present value of the expenditures expected to be required to
settle the obligation using a pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the obligation. The increase in the provision due to
passage of time is recognised as interest expense.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
20
1. Summary of significant accounting policies - continued
1.14 Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods
and services in the ordinary course of the company’s activities. The company recognises
revenue when the amount of revenue can be reliably measured, it is probable that future
economic benefits will flow to the entity and when specific criteria have been met for each of the
company’s activities as described below.
(a) Interest income
Interest income is recognised for all interest-bearing instruments using the effective interest
method.
(b) Management fee income
Management fee income is recognised in the period to which such management services relate.
(c) Dividend income
Dividend income is recognised when the right to receive payment is established.
1.15 Dividend distribution
Dividend distribution to the company’s shareholders is recognised as a liability in the company’s
financial statements in the period in which the dividends are approved by the company’s
shareholders.
1.16 Earnings per share
The company presents basic earnings per share (EPS) data for its ordinary shares. Basic EPS
is calculated by dividing the profit or loss attributable to ordinary shareholders of the company by
the weighted average number of ordinary shares outstanding during the period.
2. Financial risk management
2.1 Financial risk factors
The company constitutes a financing special purpose vehicle whose bonds are matched by
equivalent amounts due from, and guaranteed by, Virtu Maritime Limited (a fellow subsidiary).
The company’s principal risk exposures relate to credit risk and liquidity risk. The company is not
exposed to currency risk and the directors deem interest rate risk exposure to be minimal due to
matching of its interest costs on borrowings with finance income from its loans and receivables
referred to above.
(a) Credit risk
Credit risk arises mainly from loans receivable from Virtu Maritime Limited (Note 4).
The company measures credit risk and expected credit losses using probability of default,
exposure at default and loss given default. Management consider both historical analysis and
forward-looking information in determining any expected credit loss.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
21
2. Financial risk management - continued
2.1 Financial risk factors - continued
(a) Credit risk - continued
The company’s exposure to credit risk is limited to the carrying amount of financial assets
recognised at the reporting date, as summarised below. The company’s exposures to credit risk
as at the end of the reporting periods are analysed as follows:
Financial assets measured at amortised cost
2022
2021
€
€
Loans receivable from fellow subsidiary (Note 4)
24,400,000
24,400,000
Amounts due from parent (Note 6)
879,060
871,623
Cash and cash equivalents (Note 7)
88,632
7,905
25,367,692
25,279,528
The maximum exposure to credit risk at the end of the reporting period in respect of the financial
assets mentioned above is equivalent to their carrying amount as disclosed in the respective
notes to the financial statements. The company does not hold collateral as security on its loans
receivable.
The company applies the low credit risk simplification for all instruments that are externally rated
at a rating of BBB- (or equivalent) or better; and the ECL provision for these instruments is
accordingly measured at an amount equivalent to the 12-month ECLs. The company thus applies
the simplification for its bank deposits.
As disclosed in Note 4, Virtu Maritime Limited has issued corporate guarantees with respect to
the company’s bonds. These borrowings have been loaned to Virtu Maritime Limited through the
issue of the company’s loans and receivables. Credit risk with respect to this receivable is limited
since there were no indications that Virtu Maritime Group is unable to meet its obligations. The
company applies the credit risk management policies described above; no losses have
historically been incurred on any of the company’s balances, and management has determined
that there has not been a significant increase in credit risk since origination. The ECL provision
for this instrument is accordingly also measured at an amount equivalent to the 12-month ECLs.
The company’s management has also determined that the macroeconomic situation of the Group
and the duration of the receivable is not changing, accordingly even after considering the
macroeconomic overlay onto the expectations of credit losses, the resulting impairment
allowance is immaterial to the company’s financial position and results.
At 31 December 2022, cash and cash equivalents are held with a local financial institution with a
credit rating of BBB- (2021: BBB-), and balances are callable on demand or within a maximum
period of one week. Management consider the probability of default to be close to zero as the
counterparty has a strong capacity to meet its contractual obligations in the near term. As a
result, no loss allowance has been recognised based on 12-month ECL as any such impairment
would be wholly insignificant to the company.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
22
2. Financial risk management - continued
2.1 Financial risk factors - continued
(b) Liquidity risk
The company is exposed to liquidity risk arising primarily from its ability to satisfy liability
commitments depending on cash inflows receivable in turn from the Virtu Maritime Group.
Management monitors liquidity risk by means of cash flow forecasts on the basis of expected
cash flows over a twelve-month period to ensure that no additional financing facilities are
expected to be required over the coming year. This process is performed through a rigorous
assessment of detailed cash flow projections of the fellow subsidiary where matching of cash
inflows and outflows arising from expected maturities of financial instruments are assessed on
an annual basis.
The carrying amounts of the company’s assets and liabilities are analysed into relevant maturity
groupings based on the remaining period at the end of the reporting period to the contractual
maturity date in the respective notes to the financial statements.
The company is exposed to liquidity risk in relation to meeting future obligations associated with
its financial liabilities, which comprise principally interest-bearing borrowings and trade and other
payables (refer to Notes 9 and 10). Prudent liquidity risk management includes maintaining
sufficient cash to ensure the availability of an adequate amount of funding to meet the company’s
obligations and ensuring that alternative funding is available when the bonds are due for
repayment.
The following table analyses the company’s financial liabilities into relevant maturity groupings
based on the remaining period at the reporting date to the contractual maturity date. The amounts
disclosed in the tables below are the contractual undiscounted cash flows. Balances due within
12 months equal their carrying balances, as the impact of discounting is not significant.
Due
Between
Carrying
Contractual
1 and 5
Over 5
amount
cash flows
years
years
€
€
€
€
31 December 2022
Unsecured bond
24,678,339
29,687,500
28,750,000
-
Trade and other payables
226,342
226,342
-
-
24,904,681
29,913,842
28,750,000
-
31 December 2021
Unsecured bond
24,620,204
30,625,000
3,750,000
25,937,500
Trade and other payables
138,144
138,144
-
-
24,758,348
30,763,144
3,750,000
25,937,500
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
23
2. Financial risk management - continued
2.2 Capital risk management
The company’s bonds are guaranteed by Virtu Maritime Limited (a fellow subsidiary). Related
finance costs are also guaranteed by this fellow subsidiary. The capital management of the
company therefore consists of a process of regularly monitoring the financial position of the
guarantor (Note 2.1).
2.3 Fair values of financial instruments
At 31 December 2022 the carrying amounts of receivables (net of impairment provisions if any)
and payables are assumed to approximate their fair values. The fair value of financial liabilities
for disclosure purposes is estimated by discounting the future contractual cash flows at the
current market interest rate that is available to the company for similar financial instruments.
As at the end of the reporting period, the fair values of financial assets and liabilities, approximate
the carrying amounts shown in the statement of financial position.
The fair value of non-current financial instruments for disclosure purposes is estimated by
discounting the future contractual cash flows at the current market interest rate that is available
to the company for similar financial instruments. The fair value of the company’s non-current
trade and other payables at the end of the reporting period is not significantly different from the
carrying amounts.
3. Critical accounting estimates and judgments
Estimates and judgments are continually evaluated and based on historical experience and other
factors including expectations of future events that are believed to be reasonable under the
circumstances. In the opinion of the directors, the accounting estimates and judgments made in
the course of preparing these financial statements are not difficult, subjective or complex to a
degree which would warrant their description as critical in terms of the requirements of IAS 1.
4. Loans and receivables
2022
2021
€
€
Non-current
Loan to fellow subsidiary
24,400,000
24,400,000
Loans receivable reflect the transfer of funds to Virtu Maritime Limited (a fellow subsidiary),
generated by the company from the issue of bonds (Note 9).
The proceeds from the issue of the bond are loaned to Virtu Maritime Limited to be advanced to
Virtu Wavepiercer Limited, solely for purposes of the part-financing of the acquisition of the vessel
acquired by the latter company. The loan to subsidiary is repayable over the period to 2027,
bears interest at 4.05% payable on the 1 September of each year.
Virtue Maritime Limited acts as a guarantor for the bond issue of the company.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
24
5. Deferred tax asset
2022
2021
€
€
At beginning of year
-
-
Credited to the income statement:
Under provision in prior year
48,911
-
Utilisation of deferred tax asset
(1,648)
-
At end of year
47,263
-
Deferred income taxes are calculated on all temporary differences under liability method using a
principal applicable tax rate of 35% (2021: 35%).
The balance at 31 December represents temporary differences on or attributable to:
2022
2021
€
€
Group relief
47,263
-
6. Trade and other receivables
2022
2021
€
€
Current
Amounts due from parent
879,060
871,623
Prepayments
19,882
19,872
898,942
891,495
Amounts due from parent are unsecured, interest free are repayable on demand.
The company’s exposure to credit and currency risks and impairment losses relating to trade and
other receivables are disclosed in Note 2.
7. Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents comprise the
following:
2022
2021
€
€
Cash at bank and other intermediaries
88,632
7,905
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
25
8. Share capital
2022
2021
€
€
Authorised
500,000 ordinary shares of €1 each
500,000
500,000
Issued and fully paid
500,000 ordinary shares of €1 each
500,000
500,000
The holders of ordinary shares are entitled to receive dividends as declared from time to time
and are entitled to one vote per share at meetings of the company. All shares rank equally with
regard to the company’s residual assets.
9. Borrowings
2022
2021
€
€
Non-current
250,000 3.75% Bonds of €100 each 2027
24,678,339
24,620,204
2022
2021
€
€
Face value
250,000 3.75% Bonds of €100 each 2027
25,000,000
25,000,000
Issue costs
(594,802)
(594,802)
Accumulated amortisation
273,141
215,006
Closing net book amount
(321,661)
(379,796)
Amortised cost and closing carrying amount
24,678,339
24,620,204
This note provides information about the contractual terms of the company’s borrowings. For
more information about the company’s exposure to interest rate and liquidity risk, refer to Note
2.
By virtue of an offering memorandum dated 30 October 2017, the company issued €25,000,000
bonds with a face value of €100 each. Interest on the 3.75% 2027 Bonds is payable annually in
arrears, on 30 November of each year. The bonds are redeemable at par and are due for
redemption on 30 November 2027. The bonds are guaranteed by Virtu Maritime Limited, which
has bound itself jointly and severally liable for the repayment of the bonds and interest thereon,
pursuant to and subject to the terms and conditions in the offering memorandum. The bonds
were admitted on the Official List of the Malta Stock Exchange on 7 December 2017. The quoted
market price as at 31 December 2022 for the bonds was €97.00 (2021: €103.00).
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
26
10. Trade and other payables
2022
2021
€
€
Current
Interest payable on bonds
79,623
79,623
Indirect taxes
7,875
-
Other payables
119,658
22,903
Accruals
19,186
35,618
226,342
138,144
Other payables are unsecured, interest free and repayable on demand.
The company’s exposure to currency and liquidity risks related to trade and other payables is
disclosed in Note 2.
11. Interest and other related income
2022
2021
€
€
Interest on loans due from fellow subsidiary
988,200
988,200
Facility fee due from fellow subsidiary
110,000
110,000
1,098,200
1,098,200
During the year all revenue was derived from the company’s fellow subsidiary.
12. Interest payable and similar charges
2022
2021
€
€
Interest payable on bonds
937,500
937,500
Amortisation of bond issue costs (Note 9)
58,135
55,876
995,635
993,376
13. Expenses by nature
2022
2021
€
€
Directors’ emoluments
45,000
45,000
Legal and professional fees
52,856
49,570
Total administrative expenses
97,856
94,570
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
27
13. Expenses by nature - continued
Auditor’s fees
Fees charged by the auditor for services rendered during the financial year relate to the
following:
2022
2021
€
€
Annual statutory audit
12,000
11,950
Tax advisory and compliance services
1,000
1,000
Total administrative expenses
13,000
12,950
14. Directors’ emoluments
2022
2021
€
€
Directors’ fees
45,000
45,000
15. Tax expense
2022
2021
€
€
Current tax expense
on taxable profit subject to tax at 35%
1,648
3,589
16. Earnings per share
Earnings per share is calculated by dividing the profit attributable to owners of the company by
the weighted average number of ordinary shares in issue during the year.
2022
2021
€
€
Net profit attributable to owners of the company
3,061
6,665
Weighted average number of ordinary shares in issue (Note 8)
500,000
500,000
Earnings per share (cents)
0.61
1.33
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
28
17. Cash generated from/(used in) operations
2022
2021
€
€
Profit before tax
4,709
10,254
Adjustments for:
Amortisation of bond issue costs
58,135
55,876
Finance costs
79,623
79,623
Changes in working capital:
Trade and other receivables
(7,447)
(81,206)
Trade and other payables
8,575
(70,631)
Cash generated from/(used in) operations
143,595
(6,084)
18. Related parties
The companies forming part of the Virtu Group of Companies are considered by the directors to
be related parties as these companies are ultimately owned by the Virtu Holdings Limited.
The company is a subsidiary of Virtu Holdings Limited, the ultimate parent company of the Virtu
Group. The registered office of both companies is situated at Virtu, Ta’ Xbiex Terrace, Ta’ Xbiex,
XBX 1034, Malta.
The main related party with whom transactions are entered into is Virtu Maritime Limited, the
guarantor of the borrowings (Note 9).
The following are the principal transactions that were carried out with related parties:
2022
2021
€
€
Income from goods and services
Finance income from fellow subsidiary (Note 11)
988,200
988,200
Facility fee from fellow subsidiary (Note 11)
110,000
110,000
Key management personnel compensation, consisting of directors’ remuneration, has been
disclosed in Note 14 to the financial statements.
Year end balances arising from related party transactions are disclosed in Notes 4 and 6 to the
financial statements.
VIRTU FINANCE P.L.C.
Annual Financial Report and Financial Statements - 31 December 2022
29
19. Statutory information
Virtu Finance p.l.c. is a limited liability company and is incorporated in Malta.
The ultimate and immediate parent company of Virtu Finance p.l.c. is Virtu Holdings Limited, a
company registered in Malta, with its registered address at Virtu, Ta’ Xbiex Terrace, Ta’ Xbiex,
XBX 1034, Malta.
The ultimate controlling parties of Virtu Holdings Limited are Mr Francis Portelli and Prof. John
Mark Portelli.

diagram

Independent auditor’s report

To the Shareholders of Virtu Finance p.l.c.

 

Report on the audit of the financial statements

Our opinion

 

In our opinion:

 

·       The financial statements give a true and fair view of the financial position of Virtu Finance p.l.c. (the Company) as at 31 December 2022, and of the company’s financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards (‘IFRSs’) as adopted by the EU; and

·       The financial statements have been prepared in accordance with the requirements of the Maltese Companies Act (Cap. 386).

 

Our opinion is consistent with our additional report to the Audit Committee.

What we have audited

Virtu Finance p.l.c.’s financial statements comprise:

·       the statement of financial position as at 31 December 2022;

·       the statement of comprehensive income for the year then ended;

·       the statement of changes in equity for the year then ended;

·       the statement of cash flows for the year then ended; and

·       the notes to the financial statements, which include significant accounting policies and other explanatory information.

 

Basis for opinion

 

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.

 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

 

We are independent of the company in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code) together with the ethical requirements of the Accountancy Profession (Code of Ethics for Warrant Holders) Directive issued in terms of the Accountancy Profession Act (Cap. 281) that are relevant to our audit of the financial statements in Malta. We have fulfilled our other ethical responsibilities in accordance with these Codes.

 

To the best of our knowledge and belief, we declare that non-audit services that we have provided to the company are in accordance with the applicable law and regulations in Malta and that we have not provided non-audit services that are prohibited under Article 18A of the Accountancy Profession Act (Cap. 281).

 

The non-audit services that we have provided to the company, in the period from 1 January 2022 to 31 December 2022, are disclosed in Note 13 to the financial statements.

 

Our audit approach

 

Overview

 

diagram

·       Overall materiality: €254,000, which represents 1% of total assets.

 

·       Recoverability of group balances

 
 
 

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we considered where the directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

 

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial statements as a whole, taking into account the structure of the company, the accounting processes and controls, and the industry in which the company operates.

 

Materiality

 

The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

 

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall materiality for the financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

 

Overall materiality

€254,000

How we determined it

1% of total assets

Rationale for the materiality benchmark applied

We chose total assets as the benchmark because, in our view, it is an appropriate measure for an entity which does not operate and that includes significant balances of assets and liabilities. We chose 1% which is within the range of quantitative materiality thresholds that we consider acceptable.

 

We agreed with the Audit Committee that we would report to them misstatements identified during our audit above €25,400 as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.

 

Key audit matters

 

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

 

Key audit matter

How our audit addressed the Key audit matter

Recoverability of group balances

 

Loans and receivables include funds advanced to Virtu Maritime Limited for the financing of the acquisition of a Fast Ferry by one of the subsidiaries of the Group. The loan bears interest at 4.05% and is repayable over the period to 2027 to enable Virtu Finance p.l.c. to repay the bond issued during 2017 which was obtained to finance the loan to the Group. Virtu Maritime Limited acts as the guarantor for the said bond.   

 

Loan balances due to the company from Virtu Maritime Limited as at 31 December 2022 amounted to €24.4m. Management assesses the recoverability of the loan by reference to the expected future cash flows of the Virtu Maritime Group.

 

The loans are the principal asset of the company, which is why we have given additional attention to this area.

 

Refer to Note 4 in the financial statements for further details covering the loan recoverable from a fellow subsidiary.

 

 

We have agreed the terms surrounding the loan to the supporting loan agreement.

 

We evaluated the suitability and appropriateness of the methodology of the cash flow model of the Virtu Maritime Group to assess the recoverability of the loan.

 

We checked the calculations used in the model for accuracy and the key inputs in the model were agreed to approved sources.

 

Management's cash flow forecasts used in the model were assessed by:

-    testing that the forecasts agreed to the most recent business plan which had been approved by the Board of Directors of the Virtu Maritime Group; and

-   considering current year Group’s performance against the plan and the reasons for any deviation also through discussion with management.

 

We also challenged the revenue and cost assumptions, taking into account market conditions including cost of fuel during the year.

 

Based on evidence and explanations obtained, we concur with management’s view with respect to the reasonability of conclusions surrounding recoverability of this loan.

 

The appropriateness of disclosures made in the financial statements in relation to loans and receivables from group companies was also reviewed.

 

Other information

 

The directors are responsible for the other information. The other information comprises the Directors’ report and the Corporate Governance – Statement of Compliance (but does not include the financial statements and our auditor’s report thereon).

 

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon except as explicitly stated within the Report on other legal and regulatory requirements.  

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

 

Responsibilities of the directors and those charged with governance for the financial statements

 

The directors are responsible for the preparation of financial statements that give a true and fair view in accordance with IFRSs as adopted by the EU and the requirements of the Maltese Companies Act (Cap. 386), and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

 

Those charged with governance are responsible for overseeing the company’s financial reporting process.

 

Auditor’s responsibilities for the audit of the financial statements

 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

 

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

 

·    Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

·   Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

·     Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

·     Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

·       Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

 

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

 

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

 

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

 

Report on other legal and regulatory requirements

Report on compliance with the requirements of the European Single Electronic Format Regulatory Technical Standard (the “ESEF RTS”), by reference to Capital Markets Rule 5.55.6

 

We have undertaken a reasonable assurance engagement in accordance with the requirements of Directive 6 issued by the Accountancy Board in terms of the Accountancy Profession Act (Cap. 281) - the Accountancy Profession (European Single Electronic Format) Assurance Directive (“the ESEF Directive 6”) on the Annual Financial Report of Virtu Finance p.l.c. for the year ended 31 December 2022, entirely prepared in a single electronic reporting format.       

 

Responsibilities of the directors

The directors are responsible for the preparation of the Annual Financial Report, including the financial statements, by reference to Capital Markets Rule 5.56A, in accordance with the requirements of the ESEF RTS.

Our responsibilities

Our responsibility is to obtain reasonable assurance about whether the Annual Financial Report, including the financial statements, complies in all material respects with the ESEF RTS based on the evidence we have obtained. We conducted our reasonable assurance engagement in accordance with the requirements of ESEF Directive 6.

Our procedures included:

·     Obtaining an understanding of the entity's financial reporting process, including the preparation of the Annual Financial Report in XHTML format.

·       Examining whether the Annual Financial Report has been prepared in XHTML format.

 

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion, the Annual Financial Report for the year ended 31 December 2022 has been prepared in XHTML format in all material respects.

 

Other reporting requirements

 

The Annual Financial Report and Financial Statements 2022 contains other areas required by legislation or regulation on which we are required to report.  The Directors are responsible for these other areas.

 

The table below sets out these areas presented within the Annual Financial Report, our related responsibilities and reporting, in addition to our responsibilities and reporting reflected in the Other information section of our report. Except as outlined in the table, we have not provided an audit opinion or any form of assurance.

 

Area of the Annual Financial Report and Financial Statements 2022 and the related Directors’ responsibilities

Our responsibilities

Our reporting

Directors’ report

The Maltese Companies Act (Cap. 386) requires the directors to prepare a Directors’ report, which includes the contents required by Article 177 of the Act and the Sixth Schedule to the Act.

We are required to consider whether the information given in the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements.     

 

We are also required to express an opinion as to whether the Directors’ report has been prepared in accordance with the applicable legal requirements.

 

In addition, we are required to state whether, in the light of the knowledge and understanding of the Company and its environment obtained in the course of our audit, we have identified any material misstatements in the Directors’ report, and if so to give an indication of the nature of any such misstatements.

In our opinion:

·       the information given in the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

·       the Directors’ report has been prepared in accordance with the Maltese Companies Act (Cap. 386).

 

We have nothing to report to you in respect of the other responsibilities, as explicitly stated within the Other information section.

 

Corporate Governance – Statement of Compliance

The Capital Markets Rules issued by the Malta Financial Services Authority require the directors to prepare and include in the Annual Financial Report a Statement of Compliance with the Code of Principles of Good Corporate Governance within Appendix 5.1 to Chapter 5 of the Capital Markets Rules.  The Statement’s required minimum contents are determined by reference to Capital Markets Rule 5.97.  The Statement provides explanations as to how the Company has complied with the provisions of the Code, presenting the extent to which the Company has adopted the Code and the effective measures that the Board has taken to ensure compliance throughout the accounting period with those Principles.

 

We are required to report on the Statement of Compliance by expressing an opinion as to whether,   in light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have identified any material misstatements with respect to the information referred to in Capital Markets Rules 5.97.4 and 5.97.5, giving an indication of the nature of any such misstatements.

 

We are also required to assess whether the Statement of Compliance includes all the other information required to be presented as per Capital Markets Rule 5.97.

 

We are not required to, and we do not, consider whether the Board’s statements on internal control included in the Statement of Compliance cover all risks and controls, or form an opinion on the effectiveness of the Company’s corporate governance procedures or its risk and control procedures.

In our opinion, the Statement of Compliance has been properly prepared in accordance with the requirements of the Capital Markets Rules issued by the Malta Financial Services Authority.

 

We have nothing to report to you in respect of the other responsibilities, as explicitly stated within the Other information section.

 

Other matters on which we are required to report by exception

We also have responsibilities under the Maltese Companies Act (Cap. 386) to report to you if, in our opinion:

·       adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us.

·       the financial statements are not in agreement with the accounting records and returns.

·       we have not received all the information and explanations  which, to the best of our knowledge and belief, we require for our audit.

 

We also have responsibilities under the Capital Markets Rules to review the statement made by the directors that the business is a going concern together with supporting assumptions or qualifications as necessary.

We have nothing to report to you in respect of these responsibilities.

Other matters - use of this report

 

Our report, including the opinions, has been prepared for and only for the Company’s shareholders as a body in accordance with Article 179 of the Maltese Companies Act (Cap. 386) and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior written consent.

 

Appointment

 

We were first appointed as auditors of the company for the period ended 31 December 2017.  Our appointment has been renewed annually by shareholder resolution representing a total period of uninterrupted engagement appointment of 6 years. The company became listed on a regulated market on 7 December 2017.

 

 

PricewaterhouseCoopers

78, Mill Street

Zone 5, Central Business District

Qormi

Malta

 

 

Stephen Mamo

Partner

 

28 April 2023