Grand Harbour Marina p.l.c.
Annual Report
2021
Company Registration Number: C 26891
Grand Harbour Marina p.l.c.
Page
Annual Report
Chairman’s Statement
1
Directors’ Report
5
Statement of the Directors’ Responsibilities
11
Directors’ Statement of Compliance with the
Code of Principles of Good Corporate Governance
12
Other Disclosures in terms of the Capital Markets Rules
23
Remuneration Report
25
Consolidated and Separate Financial Statements
Statement of financial position
28
Statement of profit or loss and other comprehensive income
29
Statement of changes in equity
30
Statement of cash flows
32
Notes to the financial statements
33
Independent Auditors’ Report
1
Grand Harbour Marina p.l.c.
Chairman’s Statement
Year Ended 31 December 2021
Overview
Summary of Group Results (assuming a proportional consolidation of the investment in joint venture)
2021
2020
Grand
Harbour
Marina
45%
Share of
IC Cesme
Combined
Grand
Harbour
Marina
45%
Share of
IC Cesme
Combined
€m
€m
€m
€m
€m
€m
Revenues
3.62
1.73
5.35
4.10
1.51
5.61
EBITDA
1.58
0.98
2.56
2.05
0.73
2.78
Profit before tax
0.40
(1.16)
(0.76)
0.81
(1.06)
(0.25)
Profit after tax
0.11
(0.88)
(0.77)
0.47
(0.85)
(0.38)
All figures above are shown before applying IFRS 11
Joint Arrangements
which would exclude the results of
the Group’s joint ventures from the detailed lines of the Statement of profit or loss and other comprehensive
income.
Grand Harbour Marina p.l.c. Consolidated
The Consolidated Financial Statements for the year ended 31 December 2021 include the 45% beneficial interest
of Grand Harbour Marina p.l.c. (“
GHM
” or the “
Company
”) in IC Cesme Marina Yatirim, Turizm ve Isletmeleri
Anonim Sirketi (“
IC Cesme
”), and the results of a wholly owned subsidiary, Maris Marine Limited (“
MML
”), the
latter being immaterial.
Total revenue at GHM decreased from €4.10 million to €3.62 million, while the Group’s share of revenues at IC
Cesme increased to €1.73 million in 2021, compared to €1.51 million in 2020. EBITDA, Profit before tax and Profit
after tax at GHM fell by €0.47 million, €0.41 million and €0.36 million respectively compared to 2020. The Group’s
share of EBITDA at IC Cesme increased by €0.25 million, while the share of Profit before tax and share of Profit
after tax contracted by €0.10 million and €0.03 million respectively.
Grand Harbour Marina
Annual Results
€m
2021
2020
2019
2018
2017
Marina operating revenues
3.6
4.1
4.1
4.7
4.1
Direct costs
(0.7)
(0.8)
(0.8)
(1.2)
(0.9)
Operating expenses
(1.3)
(1.3)
(1.6)
(1.9)
(1.9)
EBITDA
1.6
2.0
1.7
1.6
1.3
PBT
0.4
0.8
0.4
0.7
0.4
Capital expenditure
0.0
0.1
0.2
0.2
0.2
2
Grand Harbour Marina p.l.c.
Chairman’s Statement (continued)
Year Ended 31 December 2021
Grand Harbour Marina (continued)
Trading
Sales revenues in 2021 contracted by €0.5 million when compared to 2019 and 2020, as the Company suffered
numerous cancellations on superyacht visitors, following the legal notice issued on the 15 July 2021 requiring
unvaccinated people to present a negative-PCR test upon entry into Malta, in the absence of which a 14-day
mandatory quarantine would apply. The Company also experienced lower superyacht seasonal bookings during
the Winter period due to uncertainty of lockdowns.
The Company registered EBITDA of €1.6 million, lower than 2020 by €0.4 million, on the back of the
aforementioned fall in sales. With net finance costs of €0.8 million (primarily made up of €0.7 million bond
interest cost, €0.4 million interest expense on lease liabilities less interest receivable of €0.3 million) and
depreciation of €0.4 million, the Company achieved a €0.4 million profit before tax (2020: €0.8 million). GHM
paid no dividends during the year (2020: €nil).
Marketing and Corporate Social Responsibility
The team at the Grand Harbour Marina has continued to be committed to the social responsibilities, in particular
with regards to conducting business in an ethical manner, protecting the environment and positively contributing
to the communities it is part of.
During 2021 the Company supported the Birgu Local Council in presenting its residents with a publication of
historic photographs of the locality. The aim was to boost community moral during a time when most were
restricted at home. The Company also donated funds to “Beating Hearts Malta”, “Write Deal Association”,
“Puttinu Cares” and “Malta Community Chest Fund”.
Together with Transport Malta, the Company co-sponsored ‘Nettuno’, a production aired on the national
station “TVM”. The series was aimed at informing the general public on safety aspects when boating.
As done in previous years, the marina supported the Royal Malta Yacht Club during the 42
nd
edition of the Rolex
Middle Sea Race. The marina hosted several yachts participating in the race including Skorpios, Rambler and
Comanche. This regatta draws international attention, invaluable for both the marina as well as the island
promotion abroad.
Valuation
The market capitalisation of GHM on the Malta Stock Exchange on 18 April 2022 amounted to €12.40 million (31
March 2021: €13.20 million).
3
Grand Harbour Marina p.l.c.
Chairman’s Statement (continued)
Year Ended 31 December 2021
IC Cesme
Annual Results (for 100% of the Marina)
€m
2021
2020
2019
2018
2017
Seaside revenues
2.2
2.0
2.3
2.3
2.7
Landside revenues
1.7
1.3
2.0
1.9
2.1
Total revenues
3.9
3.3
4.3
4.2
4.8
Direct costs
(0.3)
(0.2)
(0.3)
(0.3)
(0.3)
Operating expenses
(1.4)
(1.5)
(1.6)
(2.5)
(3.7)
EBITDA
2.2
1.6
2.4
1.4
0.8
PBT
(2.6)
(2.4)
0.1
0.4
(0.3)
Capital expenditure
0.2
-
0.1
0.1
0.1
Trading
IC Cesme Marina, the Company’s 45% joint venture with IC Holdings, improved performance on both seaside &
landside revenues, when compared to 2020 levels, whilst maintaining the 2019 levels on the seaside revenues.
However, landside revenues were below 2019 levels due to the pandemic-related limitations established by the
government of Turkey until June 2021. Geo-political uncertainties throughout the year led to a further 30%
reduction in the average value of Turkish Lira against the Euro which changed from an average of 8.01 in 2020 to
10.44 in 2021.
Revenues in 2021 increased by €0.6 million from 2020. The imposed limitations due to the pandemic have
affected the travels & the visitor numbers of the marina. However, the season regained its strength once the
limitations were lifted in June 2021. This resulted in an increase in berthing as well as tenant revenues. However,
since Turkish regulation does not allow the tenant contracts to be in foreign currency, the strong season sales
was not reflected in Euro revenues due to the devaluation of the Turkish Lira during the year.
Operating expenses, excluding depreciation, decreased to €1.4 million, thanks to the weak Turkish currency
applied to local costs. After foreign exchange losses, net finance charges, depreciation, and IFRS 16 related costs
totalling €4.8 million, IC Cesme made a loss before tax of €2.6 million, compared to the loss before tax of €2.4
million in 2020. Loss after tax of €1.9 million (2020: loss after tax of €1.9 million) reflected a tax credit of €0.7
million (2020: €0.5 million tax credit). These results were mainly steered by the significant devaluation of the
Turkish Lira which increased the joint venture’s foreign exchange losses to €3.8 million during 2021 (2020: €2.8
million).
The Group’s 45% share of IC Cesme’s after tax loss of €0.88 million marked a marginal decrease over the 2020
share of after-tax loss of €0.85 million, and this is included within its total share of losses of equity-accounted
investees.
Marketing and Corporate Social Responsibility
Given the lack of European and international yacht traffic to the Turkish coast generally, IC Cesme management
has been focused on both retaining existing Turkish clients as well as attracting new ones. Although there
continues to be a high turnover of customers at IC Cesme Marina, with 119 boats leaving throughout 2021 mainly
due to changing location or sale of the boat, the marina attracted 126 new boats during the year with over 39%
being returning customers or customers converting from seasonal contracts.
The average berthing area of the
new berths was around 9% higher than the leavers, with the net gain of 7 boats.
4
Grand Harbour Marina p.l.c.
Chairman’s Statement (continued)
Year Ended 31 December 2021
IC Cesme Marina (continued)
Marketing and Corporate Social Responsibility (continued)
In September 2021, IC Cesme Marina supported again the Arkas Aegean Link Regatta which attracted a record
44 sailing yachts to the 2021 race with approximately 450 yacht crew taking part over 3 days of the Regatta.
In addition, it was awarded as The Best Aegean Super Yacht Marina by Acrew, as a leading superyacht marina
destination offering the best in service and facilities in the Aegean Sea in 2021. Cesme Marina has received a
second Green Apple Environment accolade (Europe Champion 2021) from The Green Apple Awards with the
ongoing Squid Nests, Trepang and Artificial Reef Projects.
Valuation
CBRE valued 100% of IC Cesme Marina at TL 230.3 million (€15.7 million) as at 31 December 2021, with the 2020
CBRE valuation being TL 143.7 million valuation (€15.9 million). This marginal decrease reflects adverse effects
brought about by the pandemic and the considerable loss of the Turkish Lira against all major currencies.
Group Outlook
Throughout the pandemic, and now against the backdrop of developments in the Russia-Ukraine conflict, the
Group’s focus has been to firmly monitor on an ongoing basis, the direct and indirect impacts of these situations
on its business model and cash flow generation.
Although 2021 has proven to be another challenging year, the Board of Directors reaffirm the Group is well-
positioned to honour its financial obligations as they fall due with particular reference to the interest payable on
the listed bonds, as well as bank borrowings and other related obligations.
Signed by the Company’s Chairman, Lawrence Zammit, on 18 April 2022 as per Directors’ Declaration on ESEF
Annual Financial Report submitted in conjunction with the Annual Report Financial Statements 2021.
5
Grand Harbour Marina p.l.c.
Directors’ Report
Year Ended 31 December 2021
The directors have prepared this directors’ report for the Company in accordance with Article 177 of the
Companies Act, 1995 (Chapter 386, Laws of Malta) (the “
Act
”) including the further provisions as set out in the
Sixth Schedule to the Act.
Board of Directors
Lawrence Zammit (Chairman)
Franco Azzopardi
Victor Lap Lik Chu
Elizabeth Ka Yee Kan
Principal Activities
The principal activities of the Company and its joint venture are the acquisition, development, operation and
management of marinas. The Company is geared towards providing a high-quality service to yachts, with a
particular emphasis on superyachts, which by their very nature, demand high level marina related services.
Currently the Company owns the Grand Harbour Marina in Malta, and the 45% interest in IC Cesme in Turkey.
The marinas are operated and managed in association with the internationally well-known company Camper &
Nicholsons Marinas Limited (“
CNML
”), a company largely involved in the management and operation of marinas
worldwide.
The principal activity of each of the Company and its joint venture entity is therefore to seek prospective
customers to berth their vessels within the facilities at the Grand Harbour Marina in Vittoriosa, Malta , and at IC
Cesme respectively, and to service their respective existing customers by providing the high-quality service
required by both yacht owners and their crews.
Review of Business Development and Financial Position
The Chairman’s Statement reviews the development of the business of the Company and its joint venture for the
reporting year. The results of its operations are set out in the Statements of Profit or Loss and Other
Comprehensive Income.
The financial position at 31 December 2021, as disclosed in the Statement of Financial Position as at this date,
reflects a healthy state of affairs.
6
Grand Harbour Marina p.l.c.
Directors’ Report (continued)
Year Ended 31 December 2021
Future Developments
The directors continue to place emphasis on improving operating efficiency at both GHM and IC Cesme to
strengthen the sustainability of the Company.
Furthermore, the directors, despite these challenging times, have confidence that the investment in IC Cesme
will resume reaping benefits, thereby generating increasing value for the shareholders.
Principal Risks and Uncertainties
A financial risk management overview is given in note 29 to the financial statements and presents information
about the Company’s and Group’s exposure to risk, the objectives, policies and processes for measuring and
managing risk and the Company’s management of capital. Apart from the risks explained under that note which
also form an integral part of this report the Company is exposed to other principal business and operational risks
as explained below.
The financial performance of the Company partly depends on the timing, number and extent of berth sales.
Whereas the Company’s business model has been shifting towards a financial performance based on the
maximisation of marina occupancy and closer management of costs, there inevitably remains an exposure, to a
certain extent, to the risks associated with the trends and future outlook of the berth sale industry as a whole.
Inevitably, the Company is also exposed to competition from other marinas, locally and abroad. In addition, there
may be matters, outside the control of the Company which may have a negative impact on the development of
the marina, namely, the development of the surrounding areas.
Going Concern
The Directors have reviewed the Company’s budget for the next financial year. On the basis of this review, after
making enquiries, and in the light of the current financial position and the funding arrangements in place, the
directors confirm, in accordance with Capital Markets Rule 5.62, that they have a reasonable expectation that
the Company has adequate resources to continue in operational existence for the foreseeable future.
Dividends and Reserves
There was no dividend payment during 2021 (2020: no dividend payment).
The movements on reserves and the amounts carried forward to next year are as set out in the Statement of
Changes in Equity.
Auditors
On the 15 December 2021, KPMG Malta notified the Company of their resignation from auditors. Concurrently
with their resignation, KPMG Malta confirmed that there was no circumstance around their resignation that
should be brought to the attention of the shareholders or creditors of the Company. On the 11 January 2022,
Deloitte Audit Limited were appointed as auditors of the Company up until the next Annual General Meeting of
the Company. A resolution proposing the reappointment of Deloitte Audit Limited as auditors of the Company
will be submitted at the forthcoming Annual General Meeting of the Company.
Subsequent events
Details of events occurring after the balance sheet date are disclosed in note 32 to the financial statements.
7
Grand Harbour Marina p.l.c.
Directors’ Report (continued)
Year Ended 31 December 2021
Disclosure in terms of the Capital Markets Rules
Pursuant to Capital Markets Rule 5.64
Share capital structure
The Company’s authorised and issued share capital is two million and four hundred thousand Euro (€2,400,000)
divided into twenty million (20,000,000) fully paid-up ordinary shares of a nominal value of twelve Euro cents
each (€0.12). All of the issued shares of the Company form part of one class of ordinary shares in the Company,
which shares are listed on the Malta Stock Exchange. All shares in the Company have the same rights and
entitlements and rank
pari passu
between themselves.
The following are highlights of the rights attaching to the shares:
Dividends:
The shares carry the right to participate in any distribution of dividend
declared by the Company;
Voting rights:
Each share is entitled to one vote at meetings of shareholders;
Pre-emption rights:
Subject to the limitations contained in the Memorandum and Articles of
Association, shareholders in the Company shall be entitled, in
accordance with the provisions of the Company’s Memorandum and
Articles of Association, to be offered any new shares to be issued by the
Company a right to subscribe for such shares in proportion to their then
current shareholding, before such shares are offered to the public or to
any person not being a shareholder;
Capital distributions:
The shares carry the right for the holders thereof to participate in any
distribution of capital made whether on a winding up or otherwise;
Transferability:
The shares are freely transferable in accordance with the rules and
regulations of the Malta Stock Exchange, applicable from time to time;
Other:
The shares are not redeemable and not convertible into any other form
of security;
Mandatory takeover bids:
Chapter 11 of the Capital Markets Rules, implementing the relevant
Squeeze-Out and Sell-Out Rules provisions of Directive 2004/25/EC of
the European Parliament and of the Council of 21 April 2004, regulates
the acquisition by a person or persons acting in concert of the control of
a company and provides specific rules on takeover bids, squeeze-out
rules and sell-out rules. The shareholders of the Company may be
protected by the said Capital Markets Rules in the event that the
Company is subject to a Takeover Bid (as defined therein). The Capital
Markets Rules may be viewed on the official website of the Malta
Financial Services Authority -
.
8
Grand Harbour Marina p.l.c.
Directors’ Report (continued)
Year Ended 31 December 2021
Disclosures in terms of the Capital Markets Rules (continued)
Pursuant to Listing Capital Markets 5.64 (continued)
Holdings in excess of 5% of the share capital
On the basis of information available to the Company as at the 31 December 2021, Camper & Nicholsons Marina
Investments Limited held 17,393,590 shares in the Company, equivalent to 86.97% of its total issued share
capital.
Other than the aforesaid, no person holds any shareholding in excess of 5% of the total issued share capital of
the Company.
Appointment/Replacement of Directors
In terms of the Memorandum and Articles of Association of the Company, the directors of the Company shall be
appointed by the shareholders in the annual general meeting as follows:
(a)
Any shareholder/s who in the aggregate hold not less than 200,000 shares having voting rights in the
Company shall be entitled to nominate a fit and proper person for appointment as a director of the Company.
The directors themselves or a committee thereof may make recommendations and nominations to the
shareholders for the appointment of directors at the next following annual general meeting.
(b)
Shareholders are granted a period of at least fourteen (14) days to nominate candidates for appointment as
Directors. Such notice may be given by the publication of an advertisement in at least two (2) daily
newspapers. All such nominations, including the candidate’s acceptance to be nominated as director, shall
on pain of disqualification be made on the form to be prescribed by the directors from time to time and shall
reach the Office not later than fourteen (14) days after the publication of the said notice (the “
Submission
Date
”); provided that the Submission Date shall not be less than fourteen (14) days prior to the date of the
meeting appointed for such election. Nominations to be made by the directors or any sub-committee of the
directors appointed for that purpose shall also be made by not later than the date established for the closure
of nominations to shareholders.
(c)
In the event that there are either less nominations than there are vacancies on the Board or if there are as
many nominations made as there are vacancies on the Board, then each person so nominated shall be
automatically appointed a director unless a shareholder demands that a vote be taken in respect of all or any
one or more of the nominees.
(d)
In the event that there are more nominations made, then an election shall take place. After the date
established as the closing date for nominations to be received by the Company for persons to be appointed
directors, the directors shall draw the names of each candidate by lot and place each name in a list in the
order in which they were drawn. The list shall be signed by the Chairman and the Company Secretary for
verification purposes.
9
Grand Harbour Marina p.l.c.
Directors’ Report (continued)
Year Ended 31 December 2021
Disclosures in terms of the Capital Markets Rules (continued)
Pursuant to Capital Markets Rule 5.64 (continued)
Appointment/Replacement of Directors (continued)
(e)
On the notice calling the annual general meeting at which an election of directors is to take place there shall
be proposed one resolution for the appointment of each candidate in the order in which the names were
drawn, so that there shall be as many resolutions as there are candidates. The directors shall further ensure
that any Member may vote for each candidate by proxy.
(f)
At the general meeting at which the election of directors is to take place the Chairman shall propose the
name of each candidate as a separate resolution and the shareholders shall take a separate vote for each
candidate (either by a show of hands or through a poll). Each shareholder shall be entitled, in the event of a
poll, to use all or part only of his votes on a particular candidate.
(g)
Upon a resolution being carried, the candidate proposed by virtue of that resolution shall be considered
elected and appointed a director. No further voting shall take place once enough resolutions have been
passed to ensure that all vacancies on the Board have been filled, even if there are still candidates with
respect to whom a resolution has not yet been called.
(h)
Shareholders may vote in favour or against the resolution for the appointment of a director in any election,
and a resolution shall be considered carried if it receives the assent of more than 50% of the shareholders
present and voting at the meeting.
(i)
Subject to the above, any vacancy among the directors may be filled by the co-option of another person to
fill such vacancy. Such co-option shall be made by the Board and shall be valid until the conclusion of the
next annual general meeting.
Procedures for amendment to the Memorandum and Articles of Association
In terms of the Companies Act, Cap 386 of the Laws of Malta, the Company may by extraordinary resolution at a
general meeting alter or add to its Memorandum or Articles of Association. An extraordinary resolution is one
where:
(a)
it has been taken at a general meeting of which notice specifying the intention to propose the text of the
resolution as an extraordinary resolution and the principal purpose thereof has been duly given;
(b) it has been passed by a shareholder or shareholders having the right to attend and vote at the meeting
holding in the aggregate not less than seventy-five per cent (75%) in nominal value of the shares issued by
the Company represented and entitled to vote at the meeting, and at least fifty-one per cent (51%) in
nominal value of all the shares issued by the Company and entitled to vote at the meeting.
If one of the aforesaid majorities is obtained but not both, another meeting shall be duly convened within 30
days to take a fresh vote on the proposed resolution. At the second meeting the resolution may be passed by a
shareholder or shareholders having the right to attend and vote at the meeting holding in the aggregate not less
than seventy-five per cent (75%) in nominal value of the shares issued by the Company represented and entitled
to vote at the meeting. However, if more than half in nominal value of all the shares issued by the Company
having the right to vote at the meeting is represented at that meeting, a simple majority in nominal value of such
shares so represented shall suffice.
10
Grand Harbour Marina p.l.c.
Directors’ Report (continued)
Year Ended 31 December 2021
Disclosures in terms of the Capital Markets Rules (continued)
Pursuant to Capital Markets Rule 5.64 (continued)
Board members’ powers
The directors are vested with the management of the Company, and their powers of management and
administration emanate directly from the Memorandum and Articles of Association and the law. The directors
are empowered to act on behalf of the Company and in this respect have the authority to enter into contracts,
sue and be sued in representation of the Company. In terms of the Memorandum and Articles of Association they
may do all such things that are not by the Memorandum and Articles of Association reserved for the Company in
general meeting.
In particular, the directors are authorised to issue shares in the Company with such preferred, deferred or other
special rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise as the
directors may from time to time determine, as long as such issue of equity securities falls within the authorised
share capital of the Company. Unless the shareholders otherwise approve in a general meeting, the Company
shall not, in issuing and allotting new shares:
(a)
allot any of them on any terms to any person unless an offer has first been made to each existing shareholder
to allot to him at least on the same terms, a proportion of the new shares which is as nearly as practicable
equal to the proportion in nominal value held by him of the aggregate shares in issue in the Company
immediately prior to the new issue of shares; and
(b)
allot any of them to any person upon the expiration of any offer made to existing shareholders in terms of
a) above. Any such shares not subscribed for by the existing shareholders may be offered for subscription to
the general public under the same or other conditions which however cannot be more favourable to the
public than offer made under (a).
Furthermore, the Company may, subject to such restrictions, limitations and conditions contained in the
Companies Act, acquire its own shares.
Save as otherwise disclosed herein, the provisions of Capital Markets Rules 5.64.2, 5.64.4 to 5.64.7, 5.64.10 and
5.64.11 are not applicable to the Company.
Signed on behalf of the Company’s Board of Directors on 18 April 2022 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 2021.
11
Grand Harbour Marina p.l.c.
Statement of the Directors’ Responsibilities
The directors are required by the Companies Act (Cap. 386) to prepare financial statements in accordance with
International Financial Reporting Standards as adopted by the EU which give a true and fair view of the state of
affairs of the Company and the Group at the end of each financial year, and of the profit or loss of the Company
and the Group for the year then ended.
In preparing the financial statements, the directors should:
•
select suitable accounting policies and apply them consistently;
•
make judgments and estimates that are reasonable; and
•
prepare the financial statements on a going concern basis, unless it is inappropriate to presume that the
Company and the Group will continue in business as a going concern.
The directors are responsible for ensuring that proper accounting records are kept which disclose with reasonable
accuracy at any time the financial position of the Company/Bank and the Group and which enable the directors
to ensure that the financial statements comply with the Companies Act (Cap. 386). This responsibility includes
designing, implementing and maintaining such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
The directors are also responsible for safeguarding the assets of the Company and the Group, and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
Additionally, the directors are responsible for:
•
the preparation and publication of the Annual Financial Report, including the consolidated financial
statements and the relevant tagging requirements therein, as required by Capital Markets Rule 5.56A,
in accordance with the requirements of the European Single Electronic Format Regulatory Technical
Standard as specified in the Commission Delegated Regulation (EU) 2019/815 (the “ESEF RTS”),
•
designing, implementing, and maintaining internal controls relevant to the preparation of the Annual
Financial Report that is free from material non-compliance with the requirements of the ESEF RTS,
whether due to fraud or error,
and consequently, for ensuring the accurate transfer of the information in the Annual Financial Report into a
single electronic reporting format.
Statement of responsibility pursuant to the Capital Market Rules issued by MFSA
In accordance with Capital Market Rule 5.68, we confirm that to the best of our knowledge:
a)
the financial statements give a true and fair view of the financial position of the Company and the Group
as at 31 December 2021 and of their financial performance and cash flows for the year then ended, in
accordance with International Financial Reporting Standards as adopted by the EU; and
b)
the Directors’ Report includes a fair review of the performance of the business and the financial
position of the Company and the Group, together with a description of the principal risks and
uncertainties that they face.
Signed on behalf of the Company’s Board of Directors on 18 April 2022 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 2021.
12
Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance
Introduction
Pursuant to the Capital Markets Rules issued by the Malta Financial Services Authority, the Company as a
company whose securities are listed on a regulated market should endeavour to adopt the Code of Principles of
Good Corporate Governance contained in Appendix 5.1 of the Capital Markets Rules (the “
Code
”). In terms of
Capital Markets Rule 5.94, the Company is obliged to prepare a report explaining how it has complied with the
Code. For the purposes of the Capital Markets Rules, the Company is hereby reporting on the extent of its
adoption of the Code.
The Company acknowledges that the Code does not dictate or prescribe mandatory rules but recommends
principles of good practice. However, the directors strongly believe that such practices are in the best interests
of the Company and its shareholders and that compliance with principles of good corporate governance is not
only expected by investors but also evidences the directors' and the Company's commitment to a high standard
of governance.
Good corporate governance is the responsibility of the Board, and in this regard the Board has carried out a
review of the Company’s compliance with the Code during the period under review. As demonstrated by the
information set out in this statement, the Company believes that it has, save as indicated herein the section
entitled “Non-Compliance with the Code”, throughout the accounting period under review, applied the principles
and complied with the provisions of the Code. In the Non-Compliance Section, the Board indicates and explains
the instances where it has departed from or where it has not applied the Code, as allowed by the Code.
Part 1: Compliance with the Code
Principle 1: The Board
The Board’s principal purpose is to provide the required leadership of the Company, to set the present and future
strategy of the Company and to ensure proper oversight and accountability.
The Board currently comprises three non-executive directors (including the Chairman) and one executive
director, namely Elizabeth Ka Yee Kan, who is the CEO of the Company. All of the directors were elected by the
shareholders in general meeting.
The directors,
inter alia,
exercise prudent and effective control, are accountable for their or their delegates’
actions or inactions, regularly review management performance and have a broad knowledge of the business of
the Group. The directors are aware of their statutory and regulatory requirements. They allocate sufficient time
to perform their responsibilities and regularly attend Board meetings.
The Board delegates specific responsibilities to the Audit Committee. Further details in relation to the
responsibilities of the Board and the Audit Committee are found in Principles 4 and 5 of this Statement
respectively.
Principle 2: Chairman and Chief Executive
During 2021, the chairmanship of the Company was vested with Mr Lawrence Zammit and the position of Chief
Executive Officer was occupied by Ms Elizabeth Ka Yee Kan. The roles of the Chief Executive Officer and of the
Chairman are separate from each other.
The Chairman is responsible to lead the Board and to set its agenda. The Chairman ensures that the Board’s
discussions on any issue put before it, go into adequate depth, that the opinions of all the directors are taken
into account, and that all the Board’s decisions are supported by adequate and timely information. The Chairman
was also entrusted to ensure that the Company’s executive and management team develop a strategy which is
agreed to by the Board. The Chief Executive Officer led the Company’s management team and ensured that the
Company is being managed in line with the strategies and policies set by the Board.
13
Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
Part 1: Compliance with the Code (continued)
Principle 3: Composition of the Board
At the beginning of 2021, the Board was composed of four (4) directors, one (1) of whom had executive functions
whilst the remaining three (3) directors were non-executive. Currently, the Board comprises three (3) non-
executive directors, including the Chairman and one executive director, namely Elizabeth Ka Yee Kan, who is the
CEO of the Company. The Board considers that the size of the Board is appropriate. The combined and varied
knowledge, experience and skills of the Board members provide the balance of competences that are required,
add value to the functioning of the Board and give direction to the Company, in line with the strategies and
policies set out by the Board itself.
Lawrence Zammit and Franco Azzopardi are considered to be independent. In determining the independence or
otherwise of its directors, the Board considered, amongst others, the principles relating to independence of
directors contained in the Code, the Company’s own practice as well as general principles of good practice.
Specifically, in determining Mr. Zammit’s independence, the Board considered the fact that he has been a
director of the Company for more than twelve consecutive years. In this regard, the Board is of the view that Mr
Lawrence Zammit has always maintained his independence of judgment, objectively and independently assessing
the Company’s and management’s performance and that Mr Zammit is mindful of, and intends on maintaining
independence, professionalism and integrity in carrying out his duties, responsibilities and providing judgement
as a director of the Company.
The presence of the executive director on the Board is designed to ensure that the Board has direct access to the
individuals having the prime responsibility for the executive management of the Company and the
implementation of approved polices. Each non-executive director has submitted the declaration to the Board
declaring their independence as stipulated under code provision 3.4.
Principle 4: The Responsibilities of the Board
The Board has the first level responsibility for executing the four basic roles of Corporate Governance, namely
accountability, monitoring, strategy formulation and policy development.
In fulfilling its mandate, the Board assumes responsibility to:
a) establish appropriate corporate governance standards;
b) review, evaluate and approve, on a regular basis, long-term plans for the Company;
c) review, evaluate and approve the Company’s budgets and forecasts;
d) review, evaluate and approve major resource allocations and capital investments;
e) review the financial and operating results of the Company on the basis of key performance indicators
and benchmarking the Company’s results against industry norms;
f) ensure appropriate policies and procedures are in place to manage risks and internal control;
14
Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
Part 1: Compliance with the Code (continued)
Principle 4: The Responsibilities of the Board (continued)
g) review, evaluate and approve the overall corporate organisation structure, the assignment of
management responsibilities and plans for senior management development;
h) review, evaluate and approve compensation to senior management; and
i) review periodically the Company’s objectives and policies relating to social, health and safety and
environmental responsibilities.
The Board has established a clear internal and external reporting system to ensure that the Board has access to
accurate, relevant and timely information. The Board has ensured that policies and procedures are in place to
maintain the highest standards of corporate conduct of the Company and its employees.
During its meetings the Board regularly discusses the directors’ statutory and fiduciary duties, the Company’s
operations and prospects, the skills and competence of senior management, the general business environment
and the Board’s expectations.
Principle 5: Board Meetings
For the period under review, the Board has implemented its policy to meet at least once every quarter. Board
meetings concentrate mainly on strategy, operational performance and financial performance of the Company.
After each Board meeting and before the next, Board minutes that faithfully record attendance, key issues and
decisions are sent to the directors. As a matter of practice, Board meetings are set well in advance of their due
date and each director is provided with detailed Board papers relating to each agenda item. Management
prepares detailed reviews for each Board meeting covering all aspects of the Company’s business.
During 2021, the Board met six (6) times. Meetings were attended as follows:
Members
No of Meetings held: (6)
Attended
Lawrence Zammit (Chairman)
6
Franco Azzopardi
6
Elizabeth Ka Yee Kan
6
Victor Lap Lik Chu
6
The Board also delegates specific responsibilities to the management team of the Company and the Audit
Committee, which operates under its formal terms of reference.
15
Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
Part 1: Compliance with the Code (continued)
Principle 5: Board Meetings (continued)
Board Committees
Audit Committee
The Board delegates certain responsibilities to the Audit Committee, the terms of reference of which reflect the
requirements stipulated in the Capital Markets Rules, as amended by virtue of Directive (EU) 2017/828 of the
European Parliament and of the Council of 17 May 2017, amending Directive 2007/36/EC regarding the
encouragement of long-term shareholder engagement. As part of its terms of reference, the Audit Committee
has the responsibility to, if required, vet, approve, monitor and scrutinise Related Party Transactions, if any,
falling within the ambits of the Capital Markets Rules and to make its recommendations to the Board on any such
proposed Related Party Transactions. The Audit Committee also establishes internal procedures and monitors
these on a regular basis. The terms of reference for the Audit Committee are designed both to strengthen this
function within the Company and to widen the scope of the duties and responsibilities of this Committee.
The Committee also has the authority to summon any person to assist it in the performance of its duties, including
the Auditors of the Company who are invited to all relevant meetings.
For the period under review, the Audit Committee was composed of Franco Azzopardi (non-executive director
and Chairman of the Audit Committee), Lawrence Zammit (non-executive director and Chairman of the Company)
and Victor Lap Lik Chu (non-executive director). The Chairman of the Audit Committee is appointed by the Board
and is independent of the Company. Lawrence Zammit and Franco Azzopardi are independent. In assessing their
independence, the Board considered the criteria set out in Capital Markets Rule 5.119, including as far as
Lawrence Zammit is concerned, the fact that he has been a director of the Company for more than twelve
consecutive years.
During 2021, the Audit Committee met six (6) times.
Members
No of Meetings held: (6)
Attended
Franco Azzopardi
6
Lawrence Zammit
6
Victor Lap-Lik Chu*
2
*
Mr. Chu also sits on the Board of Camper & Nicholsons Marina Investments Limited. Mr. Chu does not
participate in meetings which discuss and where deemed appropriate, approve related party transactions.
16
Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
Part 1: Compliance with the Code (continued)
Principle 5: Board Meetings (continued)
Board Committees (continued)
Audit Committee (continued)
The Board considers Mr Franco Azzopardi to be independent and competent in accounting and/or auditing on
the basis that Mr Azzopardi qualified as an accountant in 1985 and received a Master of Science in Finance from
the University of Leicester in 2006. In accordance with Capital Markets Rule 5.118, the Board considers the three
Audit Committee members as having the required competence jointly as a Committee due to their professional
background and experience in the marina industry, as well as in other sectors, at both national and international
level.
Principle 6: Information and Professional Development
Senior Executive Management
The CEO is responsible for the implementation of the strategies set by the Board, management of the business
of the Company and to deliver the results. The CEO reports directly to the Board of the Company. The Company’s
senior management, including the CEO, is appointed by the Board.
The Board is responsible for setting the business strategy and overall corporate governance of the Company. The
General Manager, Chief Operating Officer and Chief Financial Officer of the Company attended meetings of the
Board as and when requested. The attendance of such persons during Board meetings is designed to ensure that
all the directors have direct access to the day-to-day management of the Company’s business and to,
inter alia
,
ensure that the policies and strategies adopted by the Board are successfully implemented by the Company.
On joining the Board, a director is provided with briefings by the Company’s senior management on the different
activities within the Company. Each director is made aware of the Company’s on-going obligations in terms of
the Companies Act (Cap. 386), the Capital Markets Rules and other relevant legislation. Directors have access to
the advice and services of the Company Secretary who is also the legal counsel to the Board and the Company in
order to ensure that each director is aware of his or her legal obligations. The Company is also prepared to bear
the expense incurred by the directors requiring independent professional advice should they judge it necessary
to discharge their responsibilities as directors. The Board actively also considers the professional and technical
development of all directors and senior management.
The Company recognises the need for a succession plan for the senior management of the Company. The marina
service agreement with CNML provides the necessary tool for succession planning purposes. The value added by
having this marina service agreement with CNML is the possibility for the Company to tap in on any additional
resources it may require from time to time. This serves the purpose of also ensuring the continuity of operations
of the marina. Appointments and changes to senior management are the responsibility of the CEO and are
approved by the Board.
Notwithstanding that the Board has established no formal system yet, the Board and the CEO ensure that the
staff morale is duly monitored at all times.
17
Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
Part 1: Compliance with the Code (continued)
Principle 7: Evaluation of the Board’s Performance
With respect to the year under review, the Board undertook an evaluation of its own performance, the
Chairman’s performance and that of its Committees. The Board did not per se appoint a committee to carry out
this performance evaluation, but the evaluation exercise was conducted through a discussion at a meeting of the
Board of Directors. Whilst the Board continuously seeks ways how to reasonably improve its governance
structures, the feedback obtained to date was not such to require material changes to the Company’s corporate
governance structures.
Principle 8: Committees
Remuneration Committee
As is permitted in terms of provision 8.A.2 of the Code, on the basis of the fact that the remuneration of the
directors is not performance-related, the Company has not set up a remuneration committee. The functions
which would otherwise be carried out by such committee are carried out by the Board which in so doing,
benchmarks the directors’ remuneration against the market.
Principle 9: Relations with Shareholders and with the Market and Principle 10: Institutional Investors
The Board is of the view that over the period under review the Company has communicated effectively with the
market through a number of company announcements that it published informing the market of significant
events happening within the Company, as well as the keeping the market updated with the impact of the COVID-
19 pandemic on the operations and financial performance of the Company.
The Company also communicates with its shareholders through its Annual General Meeting (further detail is
provided under the section entitled General Meetings). The Chairman arranges for all directors to attend the
annual general meeting and for the chairman of the Audit Committee to be available to answer questions, if
necessary. The Chairman also ensures that sufficient contact is maintained with major shareholders to
understand issues and concerns.
Apart from the annual general meeting, the Company intends to continue with its active communication strategy
in the market and shall accordingly continue to communicate with its shareholders and the market by way of the
Annual Report and Financial Statements, by publishing its results on a six-monthly basis during the year and
through the directors’ statements published on a six-monthly basis, and by company announcements to the
market in general. The Company recognises the importance of maintaining a dialogue with the market to ensure
that its strategies and performance are well understood and disclosed to the market in a timely manner.
The Company's website (https://cnmarinas.com/grand-harbour-marina/notification%20&%20publication) also
contains information about the Company and its business which is a source of further information to the market.
Individual shareholders can raise matters relating to their shareholding at any time throughout the year and are
provided with the opportunity to ask questions at the Annual General Meeting. Minority shareholders may
requisition a meeting of shareholders in accordance with applicable law.
Principle 11: Conflicts of Interest
The directors are aware that their primary responsibility is always to act in the interest of the Company and its
shareholders as a whole irrespective of who appointed them to the Board. Acting in the interest of the Company
includes an obligation to avoid conflicts of interest. The Board is aware of any interest directors may have in the
share capital of the Company.
18
Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
Part 1: Compliance with the Code (continued)
Principle 11: Conflicts of Interest (continued)
In the case of conflicts, the Company has strict policies in place which are based on applicable laws, rules and
regulations and which allow it to manage such conflicts, actual or potential, in the best interest of the Company.
Principle 12: Corporate Social Responsibility
The team at the Grand Harbour Marina has continued to be committed to the social responsibilities, in particular
with regards to conducting business in an ethical manner, protecting the environment and positively contributing
to the communities it is part of.
During 2021 the Company supported the Birgu Local Council in presenting its residents with a publication of
historic photographs of the locality. The aim was to boost community moral during a time when most were
restricted at home. The Company also donated funds to “Beating Hearts Malta”, “Write Deal Association”,
“Puttinu Cares” and “Malta Community Chest Fund”.
Together with Transport Malta, the Company co-sponsored ‘Nettuno’, a production aired on the national
station “TVM”. The series was aimed at informing the general public on safety aspects when boating.
As done in previous years, the marina supported the Royal Malta Yacht Club during the 42
nd
edition of the Rolex
Middle Sea Race. The marina hosted several yachts participating in the race including Skorpios, Rambler and
Comanche. This regatta draws an international attention, invaluable for both the marina as well as the island
promotion abroad.
Part 2: Non-Compliance with the Code
Principle 4: Code Provisions 4.2.7:
Code Provision 4.2.7 recommends “
the development of a succession policy for the future composition of the Board
of directors and particularly the executive component thereof, for which the Chairman should hold key
responsibility
”. In the context of the appointment of directors being a matter reserved exclusively to the
Company’s shareholders (except where the need arises to fill a casual vacancy), considering that every director
retires from office at the AGM, the Company does not consider it feasible to have in place such a succession
policy. However, the recommendation to have in place such a policy will be kept under review. An active
succession policy is however in place for senior executive positions in the Company.
Principle 7: Code Provision
Code Provision 7.1 recommends that
the board should appoint a committee chaired by a non-executive Director
in order to carry out a performance evaluation of its role
. The Board did not appoint an
ad hoc
committee to carry
out this performance evaluation. The Board believes that the size of the Company and the Board itself does not
warrant the establishment of a committee specifically for the purpose of carrying out a performance evaluation
of its role. Whilst the requirement under Code Provision 7.1 might be useful in the context of larger companies
having a more complex set-up and a larger Board, the size of the Company’s Board is such that it should enable
it to evaluate its own performance without the requirement of setting up an
ad hoc
committee for this purpose.
Additionally, the Board also notes that its performance is subject to the constant scrutiny of the Board itself, the
Company’s shareholders, the market and the rules by which the Company is regulated as a listed company.
19
Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
Part 2: Non-Compliance with the Code
Principle 8B (Nomination Committee):
Pursuant to the Company’s Articles of Association, the appointment of directors to the Board is reserved
exclusively to the Company’s shareholders (in line also with general and commonly accepted practice in Malta).
Any shareholder/s who in the aggregate hold not less than 200,000 shares having voting rights in the Company
is entitled to nominate a fit and proper person for appointment as a director of the Company. Furthermore, in
terms of the Memorandum and Articles of Association of the Company, the directors themselves are entitled to
make recommendations and nominations to the shareholders for the appointment of directors at the next
following annual general meeting. Within this context, the Board believes that the setting up of a Nomination
Committee is not required since the Board itself has the authority to recommend and nominate directors.
Notwithstanding this, the Board will retain under review the issue relating to the setting up of a Nomination
Committee.
Principle 9: Code Provision 9.3:
The Company does not have a formal mechanism in place as required by Code provision 9.3 to resolve conflicts
between minority shareholders and controlling shareholders and no such conflicts have arisen.
Internal Control and Risk Management
The Board reviews and is ultimately responsible for the Company's system of internal controls and for reviewing
its effectiveness. Such a system is designed to manage rather than eliminate risk to achieve business objectives,
and can provide only reasonable, and not absolute, assurance against normal business risks or loss.
The key features of the Company’s system of internal control are as follows:
Organisation
The Company operates through the management team of the Company. Such team
operates within clear reporting lines and delegation of powers granted by resolution
of the Board.
Control environment
The Company is committed to the highest standards of business conduct and seeks
to maintain these standards across all of its operations. Company policies and
employee procedures are in place for the reporting and resolution of improper
activities.
The Company has an appropriate organisational structure for planning, executing,
controlling and monitoring business operations in order to achieve Company
objectives.
Risk identification
Company management is responsible for the identification and evaluation of key
risks applicable to their respective areas of business
.
Financial reporting
Financial reporting procedures are in place to identify, control and report major risks.
The Board receives periodic management information giving comprehensive analysis
of financial and business performance against prior periods and current budgets.
20
Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
General Meetings and Shareholders’ Rights
Conduct of general meetings
It is only shareholders whose details are entered into the register of members on the record date that are entitled
to participate in the general meeting and to exercise their voting rights. In terms of the Capital Markets Rules,
the record date falls 30 days immediately preceding the date set for the general meeting to which it relates. The
establishment of a record date and the entitlement to attend and vote at general meeting does not, however,
prevent trading in the shares after the said date.
In order for business to be transacted at a general meeting, a quorum must be present. In terms of the articles
of association, 51% of the nominal value of the issued equity securities entitled to attend and vote at the meeting
constitutes a quorum. If within half an hour, a quorum is not present, the meeting shall stand adjourned to the
same day in the next week, at the same time and place or to such other day and at such other time and place as
the directors may determine. In any event, the adjourned meeting must be held at least ten days after the final
convocation is issued and no new item must put on the agenda of such adjourned meeting. If at the adjourned
meeting a quorum is not yet present within half an hour from the time appointed for the meeting, the member
or members present shall constitute a quorum. Generally, the chairman of the Board presides as chairman at
every general meeting of the Company. At the commencement of any general meeting, the chairman may,
subject to applicable law, set the procedure which shall be adopted for the proceedings of that meeting. Such
procedure is binding on the members.
If the meeting consents or requires, the chairman shall adjourn a quorate meeting to discuss the business left
unattended or unfinished. If a meeting is adjourned for 30 days or more, notice of the quorate meeting must be
given as in the case of an original meeting. Otherwise, it is not necessary to give any notice of an adjourned
meeting or of the business to be transacted at such quorate meeting.
At any general meeting a resolution put to the vote shall be determined and decided by a show of hands, unless
a poll is demanded before or on the declaration of the result of a show of hands by:
I.
the chairman of the meeting; or
II.
by at least three (3) members present in person or by proxy; or
III.
any member or members present in person or by proxy and representing not less than one tenth of the
total voting power of all members having the right to vote at that meeting; or
IV.
a member or members present in person or by proxy holding equity securities conferring a right to vote at
the meeting, being equity securities on which an aggregate sum has been paid up equal to not less than
one-tenth of the total sum paid up on all the equity securities conferring that right.
Unless a poll is so demanded, a declaration by the chairman that a resolution has on a show of hands been carried
or carried unanimously, or by a particular majority, or lost together with an entry to that effect in the minute
book, shall constitute conclusive evidence of the fact without need for further proof. If a resolution requires a
particular majority in value, in order for the resolution to pass by a show of hands, there must be present at that
meeting a member or members holding in the aggregate at least the required majority. A poll demanded on the
election of the chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other
question shall be taken at the discretion of the chairman. In the case of equality of votes, whether on a show of
hands or on a poll, the chairman has a second or casting vote. On a show of hands every member present in
person or by proxy shall have one vote, and on a poll every member shall have one vote for each equity security
carrying voting rights of which he is the holder provided that all calls or other sums presently payable by him in
respect of equity securities have been paid.
21
Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
General Meetings and Shareholders’ Rights (continued)
Proxy
Every member is entitled to appoint one person to act as proxy holder to attend and vote at a general meeting
instead of him. The proxy holder shall enjoy the same rights to participate in the general meeting as those to
which the member thus represented would be entitled. If a member is holding shares for and on behalf of third
parties, such member shall be entitled to grant a proxy to each of his clients or to any third party designated by
a client and the said member is entitled to cast votes attaching to some of the shares differently from the others.
In the case of voting by a show of hands, a proxy who has been mandated by several members and instructed to
vote by some shareholders in favour of a resolution and by others against the same resolution shall have one
vote for and one vote against the resolution.
The instrument appointing a proxy must be deposited at the office or by electronic mail at the address specified
in the notice convening the meeting not less than forty-eight (48) hours before the time for holding the meeting
or, in the case of a poll, not less than forty-eight (48) hours before the time appointed for the taking of the poll.
The same applies to the revocation of the appointment of a proxy.
A form of instrument of proxy shall be in such form as may be determined by the directors and which would allow
a member appointing a proxy to indicate how he would like his proxy to vote in relation to each resolution.
Including items on the agenda
A shareholder or shareholders holding not less than 5% of the issued share capital may include items on the
agenda of the general meeting and table draft resolutions for items included on the agenda of a general meeting.
Such right must be exercised by the shareholder at least 46 days before the date set for the general meeting to
which it relates.
Questions
Shareholders have the right to ask questions which are pertinent and related to the items on the agenda.
Electronic voting
In terms of the Articles of Association of the Company, the directors may establish systems to:
a)
allow persons entitled to attend and vote at general meetings of the Company to do so by electronic
means in accordance with the relevant provisions of the Capital Markets Rules; and
b)
allow for votes on a resolution on a poll to be cast in advance.
Where a shareholder requests the Company to publish a full account of a poll, the Company is required to publish
the information on its website not later than 15 days after the general meeting at which the result was obtained.
Further details on the conduct of a general meeting and shareholders’ rights are contained in the memorandum
and articles of association of the Company and in chapter 12 of the Capital Markets Rules.
22
Grand Harbour Marina p.l.c.
Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance (continued)
Remuneration Statement
As is permitted in terms of provision 8.A.2 of the Code, on the basis of the fact that the remuneration of the
directors is not performance-related, the Company has not set up a remuneration committee. The functions
which would otherwise be carried out by such Committee are carried out by the Board.
Remuneration Policy – Senior Executives
The Board determines the framework of the overall remuneration policy and individual remuneration
arrangements for its senior executives based on recommendations from the Compensation Committee of its
Parent company. The Board considers that these remuneration packages reflect market conditions and are
designed to attract appropriate quality executives to ensure the efficient management of the Company. During
the current year under review there have been no significant changes in the Company’s remuneration policy and
no significant changes are intended to be effected thereto in the year ahead. The terms and conditions of
employment of each individual within the executive team are set out in their respective indefinite contracts of
employment with the Company. None of these contracts contain provisions for termination payments and other
payments linked to early termination. The Company’s senior executives may be paid a bonus by the Company of
up to 10% of their respective salary. The payment of such bonus is based on the financial performance of the
Company.
Moreover, share options, pension schemes and profit sharing are currently not part of the Company’s
remuneration policy.
The Company has opted not to disclose the amount of remuneration paid to its senior executives on the basis
that it is commercially sensitive.
Remuneration Policy – Directors
The Board determines the framework of the remuneration policy for the members of the Board as a whole. The
maximum annual aggregate emoluments that may be paid to the directors is approved by the shareholders in
the Annual General Meeting. The financial statements disclose an aggregate figure in respect of the directors’
remuneration which, with respect to the period under review, amounted to thirty-eight thousand Euros (€38k)
(entirely representing a fixed remuneration)
.
As mentioned above, there are no share options and the directors
do not receive variable remuneration. Directors’ emoluments are designed to reflect the time committed by
directors to the Company’s affairs. The remuneration of the directors is not performance related.
Signed on behalf of the Company’s Board of Directors on 18 April 2022 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 2021.
23
Grand Harbour Marina p.l.c.
Other Disclosures in terms of the Capital Markets Rules
Pursuant to Listing Capital Markets 5.70
5.70.1
Material Contracts in relation to which a director of the Company was directly or indirectly
interested
Marina Services Agreement between the Company and Camper & Nicholsons Marinas Limited (“CNML”)
On the 1 July 2007, the Company entered into a Marina Service Agreement with CNML for an initial period of 3
years and which continues in force thereafter. CNML is entitled to receive from the Company the following
fees/charges:
1.
in respect of recruitment, operational services and auditing - 2.5% on the sum of the total amounts (gross
receipts) from the marina operations with a minimum payment of GBP18k per annum;
2.
sales and marketing - GBP3.2k per month and 2.5% on licences in excess of one year;
3.
commissioning - sums shall be agreed from time to time in connection with projects undertaken;
4.
project services - charges are agreed from time to time; and
5.
financial controller support - a rate of GBP48 per hour for actual time spent on GHM work.
Royalty Agreement between the Company and Camper & Nicholsons Marinas International Limited
The Company had formerly entered into an agreement with CNML. The agreement dated 1 April 2004 gives right
for the marina to use the name of “C&N” for its operations. CNML was entitled to branding charges of GBP1k per
month. This agreement had been replaced by an agreement dated 1 July 2007 between GHM and Camper &
Nicholsons (Designs) Limited. Under the terms of this agreement, GHM was obliged to pay Camper & Nicholsons
(Designs) Limited 0.25% of turnover as royalties with a minimum amount of GBP10k per annum. This agreement
was terminated on 19 December 2008 and replaced by another agreement with Camper & Nicholsons Marinas
International Limited. Under the terms of this new agreement the Company is obliged to pay Camper &
Nicholsons Marinas International Limited 1.50% of operating turnover as royalties.
Loans between the Company and Camper & Nicholsons Marina Investments Limited (“CNMIL” or the “Parent
Company”).
The Company entered into three loan agreements with CNMIL. By virtue of the agreements dated 21 November
2016, 14 March 2017 and 25 September 2020, the Company issued loans of €400k, €600k and €2,250k
respectively to the Parent Company. The €400k and €600k loans have an interest rate payable to the Company
of 4% per annum, and are repayable by the 31 December 2022, whilst the €2,250k loan has an interest rate
payable to the Company of 4.50% per annum and is repayable by the 30 September 2022.
The following directors of the Company are also directors of Camper & Nicholsons Marina Investments Limited
and / or other companies forming part of the same group of companies:
Victor Lap Lik Chu
Elizabeth Ka Yee Kan
24
Grand Harbour Marina p.l.c.
Other Disclosures in terms of the Capital Markets Rules (continued)
Pursuant to Capital Markets Rule 5.70 (continued)
Pursuant to Capital Markets Rule 5.70.2
Company Secretary:
Dr Louis de Gabriele LL.D.
Registered Office of Company:
Malta
Telephone:
(+356) 21 800 700
25
Grand Harbour Marina p.l.c.
Remuneration Report
Year Ended 31 December 2021
This statement on the remuneration of Grand Harbour Marina p.l.c.’s (C 26891) (the “
Company
”) Board of
directors and Chief Executive Officer has been drawn up in compliance with the requirements of Chapter 12 of
the Capital Markets Rules, and contains information required by the provisions of Appendix 12.1 of the Capital
Markets Rules.
The Company’s remuneration of its board of directors is based on the remuneration policy adopted and approved
by the shareholders at the annual general meeting of 11 September 2021.
That policy is available for inspection
on the Company’s website at https://www.cnmarinas.it/static/23b6fcbc758c8567ad44fc92bb84a346/AGM-
2021-Remuneration-Policy.pdf
1.
The Remuneration Policy
The Company’s remuneration policy determines the basis for remuneration of all members of the board of
directors, and the Chief Executive Officer (“
CEO
”) of the Company.
It defines the principles and guidelines that
apply to both fixed and variable remuneration, including all bonuses and benefits, which can be awarded to
directors and, in the case of variable remuneration, indicate the relative proportion between fixed and variable
components.
The Company’s remuneration policy is intended as a measure to attract and retain suitable candidates for the
position of directors, calculated to provide the Company with the appropriate skills, technical knowledge
experience and expertise both for the determination of policies and strategies of the Company as well as the
supervisory role of the board, which in turn contributes to the performance of the Company. The CEO does not
get any form of remuneration from the Company.
The Policy was implemented without any deviations from the procedure for the implementation of the
remuneration policy as defined in Chapter 12 of the Capital Markets Rules. However, it is worth noting that whilst
the remuneration policy provides that the Board mandated the Compensation Committee established by Camper
& Nicholsons Marina Investments Limited (the Parent Company) to evaluate the remuneration of the senior
executives of the Company and formulate recommendations to the Board, by the end of 2021, the Board took
over this role and started benchmarking the remuneration of the directors against the market.
The overall remuneration of the board consists of two components which are designed to reflect the time
committed by the directors to the Company’s affairs:
•
The basic remuneration, consisting of fixed
honoraria
as sitting members of the board;
•
Additional remuneration where a member of the board is assigned additional duties to sit on or chair a
board committee.
2.
The Decision-making process with respect to remuneration
The aggregate emoluments that may be paid to the directors (excluding the CEO) is decided upon by the
shareholders in general meeting following a recommendation made to shareholders by the board.
The board then decides on the remuneration of the Chairman and the other non-executive directors consisting
of a fixed honorarium to each director.
The board also establishes and fixes the remuneration of the CEO with
respect to her executive role within the Company.
26
Grand Harbour Marina p.l.c.
Remuneration Report (continued)
Year Ended 31 December 2021
3.
Key principles of remuneration
During the period under review, the Board was composed of four (4) directors, one (1) of whom had executive
functions whilst the remaining three (3) directors were non-executive. Currently, the Board comprises three (3)
non-executive directors, including the Chairman (Victor Lap Lik Chu, Franco Azzopardi and Lawrence Zammit) 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 2021 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 remuneration of non-executive directors for the financial year ended 31
December 2021:
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
Victor Lap Lik Chu
nil
nil
nil
Table 1 - Remuneration of Non-Executive Directors
27
Grand Harbour Marina p.l.c.
Remuneration Report (continued)
Year Ended 31 December 2021
Executive Director
The Company has one executive, that is also appointed as member of the board (not
ex officio
).
The executive
director is the CEO.
Fixed Remuneration- Salary
The CEO does not get any form of remuneration from the Company.
Variable Remuneration- Bonus
The CEO does not get any form of remuneration from the Company.
There has been no change in the remuneration of directors over the course of the year 2021. In line with a
decreasing number of directors sitting on the Board of the Company, during the past five-years the aggregate
remuneration of directors decreased but the individual remuneration of the remaining directors remained
unchanged.
THIS REMUNERATION STATEMENT HAS BEEN PREPARED BY THE DIRECTORS AND IS SIGNED BY THE CHAIRMAN
AS AUTHORISED BY THE BOARD.
IN ACCORDANCE WITH CAPITAL MARKETS RULE 12.26N, THE EXTERNAL
AUDITORS HAVE CHECKED THAT ALL INFORMATION, REQUIRED IN TERMS OF APPENDIX 12.1 OF CHAPTER 12
OF THE CAPITAL MARKETS RULES, HAS BEEN INCLUDED.
Signed on behalf of the Company’s Board of Directors on 18 April 2022 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 2021.
28
Grand Harbour Marina p.l.c.
Statement of financial position
As at 31 December 2021
2021
2020
2021
2020
Group
Group
Company
Company
Note
€000
€000
€000
€000
ASSETS
Property, plant and equipment
16
4,565
4,831
Deferred costs on property, plant and
equipment
482
482
Right-of-use asset
21
5,260
5,403
Net investment lease receivable
21
1
3
Equity-accounted investee
18
2,174
2,174
Investment in debt securities
19
5,806
5,894
Loans to Parent company
20
2,668
4,242
Non-current assets
20,956
23,029
Loans to Parent company
20
3,248
1,930
Trade and other receivables
22
1,132
1,834
Cash and cash equivalents
23
2,466
1,528
Current assets
6,846
5,292
Total assets
27,802
28,321
EQUITY
Share capital
24
2,400
2,400
Exchange translation reserve
24
(228 )
-
-
Fair value reserve
24
(12 )
(91 )
(12)
(91)
Retained earnings
(316 )
1,217
1,112
Total equity attributable to equity holders
of the Company
3,605
3,421
LIABILITIES
Lease liability
21
6,159
6,020
Debt securities in issue
26
14,751
14,713
Deferred tax liabilities
15
921
993
Non-current liabilities
21,831
21,726
Lease liability
21
22
153
Bank overdraft
26
1
-
Taxation payable
15
100
491
Trade and other payables
27
1,200
1,406
Contract liabilities
28
1,043
1,124
Current liabilities
2,366
3,174
Total liabilities
24,197
24,900
Total equity and liabilities
27,802
28,321
The accompanying notes are an integral part of these financial statements. The financial statements on pages
28 to 99 were approved and authorised for issue by the Board of Directors on 18 April 2022 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 2021.
29
Grand Harbour Marina p.l.c.
Statement of profit or loss and other comprehensive income
For the year ended 31 December 2021
2021
2020
2021
2020
Group
Group
Company
Company
Note
€000
€000
€000
€000
Continuing operations
Revenue
10
3,621
4,098
Direct costs
11
(667 )
(834 )
(667)
(834)
Gross profit
2,954
3,264
Selling and marketing expenses
11
(26 )
(29 )
(26)
(29)
Administrative expenses:
Depreciation on plant and equipment
16
(276 )
(278 )
(276)
(278)
Depreciation on right-of-use-asset
21
(143 )
(109 )
(143)
(109)
Impairment loss on trade receivables
29
(3 )
-
(3)
Other administrative expenses
11
(1,252 )
(1,178 )
(1,252)
(1,178)
Operating profit
1,257
1,667
Impairment loss on financial assets
29
(98 )
(4 )
(98)
(4)
Finance income
13
329
261
Finance costs
13
(1,090 )
(1,118 )
(1,090)
(1,118)
(859 )
(861 )
(859)
(861)
Share of loss of equity-accounted
investee, net of tax
18
(889 )
(862 )
-
-
(Loss)/ profit before tax
(491 )
(56 )
398
806
Income tax expense
15
(293 )
(334 )
(293)
(334)
(Loss)/ profit for the year attributable to
equity holders of the Company
(784 )
(390 )
105
472
Other comprehensive income / (loss):
Items that are or may be reclassified
subsequently to profit or loss
Foreign currency translation differences
18
(131 )
-
-
Unrealised fair value movement on
debt securities at fair value
through other comprehensive
income (FVOCI)
19
(95 )
84
(95)
Cumulative movement in fair value of
debt securities disposed of during the
year reclassified to profit or loss
19
(5 )
(1 )
(5)
(1)
Expected credit losses on debt securities
at FVOCI
19
-
1
Other comprehensive income / (loss) for
the year, net of tax attributable to
equity holders of the Company
(226 )
79
(95)
Total comprehensive (loss) / income for
the year attributable to equity holders
of the Company
(404 )
(616 )
184
377
(Loss) / Earnings per share (€)
14
(0.039 )
(0.019 )
0.005
0.024
The accompanying notes are an integral part of these financial statements.
30
Grand Harbour Marina p.l.c.
Statement of changes in equity
For the Year Ended 31 December 2021
Share
capital
Translation
reserve
Fair value
reserve
Retained
earnings
Total
€000
€000
€000
€000
€000
Group
Balance at 1 January 2020
(97 )
Total comprehensive income / (loss):
Loss for the year
(390 )
(390 )
Other comprehensive income / (loss):
Foreign currency translation
differences
(131 )
(131 )
Unrealised fair value movement on debt
securities at fair value through other
comprehensive income
(95 )
(95 )
Cumulative movement in fair value of
debt securities disposed of during the
year reclassified to profit or loss
(1 )
(1 )
Expected credit losses on debt securities
at FVOCI
-
Other comprehensive loss for the year
-
(131 )
(95 )
(226 )
Total comprehensive loss for the year
(131 )
(95 )
(390 )
(616 )
Transfer from retained earnings
(48 )
(48 )
Balance at 31 December 2020
(228 )
(91 )
Balance at 1 January 2021
(228 )
(91 )
Total comprehensive income / (loss):
Loss for the year
(784 )
(784 )
Other comprehensive income / (loss):
Foreign currency translation
differences
Unrealised fair value movement on debt
securities at fair value through other
comprehensive income
Cumulative movement in fair value of
debt securities disposed of during the
year reclassified to profit or loss
(5 )
(5 )
Other comprehensive income for the
year
Total comprehensive income / (loss) for
the year
(784 )
(404 )
Balance at 31 December 2021
(12 )
(316 )
The accompanying notes are an integral part of these financial statements.
31
Grand Harbour Marina p.l.c.
Statement of changes in equity (continued)
For the Year Ended 31 December 2021
Share
capital
Fair value
reserve
Retained
earnings
Total
€000
€000
€000
€000
Company
Balance at 1 January 2020
2,400
4
640
3,044
Total comprehensive income / (loss):
Profit for the year
-
-
472
472
Other comprehensive income / (loss):
Unrealised fair value movement on debt
securities at fair value through other
comprehensive income
-
(95)
-
(95)
Cumulative movement in fair value of debt
securities disposed of during the year
reclassified to profit or loss
-
(1)
-
(1)
Expected credit losses on debt securities at
FVOCI
-
1
-
1
Other comprehensive loss for the year
-
(95)
-
(95)
Total comprehensive (loss)/ income for the
year
-
(95)
472
377
Balance at 31 December 2020
2,400
(91)
1,112
3,421
Balance at 1 January 2021
2,400
(91)
1,112
3,421
Total comprehensive income / (loss):
Profit for the year
-
-
105
105
Other comprehensive income / (loss):
Unrealised fair value movement on debt
securities at fair value through other
comprehensive income
-
84
-
84
Cumulative movement in fair value of debt
securities disposed of during the year
reclassified to profit or loss
-
(5)
-
(5)
Other comprehensive income for the year
-
79
-
79
Total comprehensive income for the year
-
79
105
184
Balance at 31 December 2021
2,400
(12)
1,217
3,605
The accompanying notes are an integral part of these financial statements.
32
Grand Harbour Marina p.l.c.
Statement of cash flows
For the Year Ended 31 December 2021
2021
2020
2021
2020
Group
Group
Company
Company
Note
€000
€000
€000
€000
Cash flows from operating activities
(Loss) / Profit for the year
(784 )
(390 )
105
472
Adjustments for:
Depreciation on plant and equipment
16
276
278
Depreciation on right-of-use assets
21
143
109
Increase in expected credit losses on financial assets
29
98
7
Share of loss of equity-accounted investee, net of tax
18
-
-
Net finance costs, excluding realised fair value gain
13
766
859
Loss on assets written-off
16
24
8
Tax expense
15
293
334
1,705
2,067
Changes in:
-
Trade and other receivables
(362 )
663
(362)
-
Contract liabilities
(81 )
(51 )
(81)
(51)
-
Trade and other payables
(206 )
(123 )
(206)
(123)
Cash generated from operating activities
2,081
1,531
Interest paid on lease liabilities
21
(294 )
(304 )
(294)
(304)
Interest paid on debt securities in issue
(674 )
(675 )
(674)
(675)
Taxes paid
(755 )
(263 )
(755)
(263)
Net cash from operating activities
358
289
Cash flows from investing activities
Interest received on corporate debt securities
193
166
Acquisition of property, plant and equipment
16
(34 )
(58 )
(34)
(58)
Acquisition of corporate debt securities
19
(474 )
-
(474)
Disposal of corporate debt securities
19
152
135
Realised fair value gain from disposal of corporate
debt securities
19
5
1
Principal received from related parties
31
157
-
Principal advanced to related parties
31
(2,754 )
-
(2,754)
Interest received from related parties
31
178
209
Proceeds from subleased properties
21
2
24
Net cash used in investing activities
(2,751 )
653
(2,751)
Cash flows from financing activities
Payment of lease liabilities
21
(74 )
(63 )
(74)
(63)
Net cash used in financing activities
(74 )
(63 )
(74)
(63)
Net decrease in cash and cash equivalents
(2,525 )
937
(2,525)
Cash and cash equivalents at 1 January*
1,528
1,528
4,053
Cash and cash equivalents at 31 December*
23
2,465
1,528
*Cash and cash equivalents include bank overdrafts that are repayable on demand and form an integral part of
the Group’s cash management.
The accompanying notes are an integral part of these financial statements.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
33
1
Reporting entity
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
2021 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
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.
The financial statements
have also been prepared on a going concern basis as explained below:
Going concern basis
The directors have, at the time of approving the financial statements, a reasonable expectation
that the Group has adequate resources to continue in operational existence for the foreseeable
future. Thus, they continue to adopt the going concern basis of accounting in preparing the
financial statements.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
34
4
Functional and presentation currency
These financial statements are presented in Euro (€), which is the Company’s functional currency.
All amounts have been rounded to the nearest thousand, unless otherwise indicated.
5
Use of judgements and estimates
In preparing these financial statements management has made judgements and estimates that
affect the application of the Group’s accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates
are recognised prospectively.
5.1
Judgements, assumptions and estimation uncertainties
Information about judgements, assumptions and estimation uncertainties that have the most
significant effects on the amounts recognised in the financial statements, is provided below:
As further described in note 18.4, in assessing impairment, management estimates the recoverable
amount of the Group’s investment in IC Cesme based on expected future cash flows, and uses an
interest rate to discount them. Estimation uncertainty relates to assumptions about future
operating results and the determination of a suitable discount rate.
5.2
Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of fair
values, for both financial and non-financial assets and liabilities.
The Group regularly reviews significant unobservable inputs and valuation adjustments.
If third
party information is used to measure fair values, then the Group assesses the evidence obtained
from third parties to support the valuation in accordance with IFRSs as adopted by the EU.
Significant valuation issues are reported to the Group’s audit committee.
When measuring the fair value of an asset or a liability, the Group uses observable market data as
far as possible. Fair values are categorised into different levels in a fair value hierarchy based on
the inputs used in the valuation techniques as follows:
•
Level 1
: quoted prices (unadjusted) in active markets for identical assets or liabilities.
•
Level 2
: inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly (i.e. as price) or indirectly (i.e. derived from prices).
•
Level 3
: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
35
5
Use of judgements and estimates (continued)
5.2
Measurement of fair values (continued)
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the
fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level
of the fair values hierarchy as the lowest level input that is significant to the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred.
Further information about the
assumptions made in measuring fair values is included in notes 19 and 29.
6
Significant events and transactions
The World Health Organisations declared COVID-19 a global health emergency on 30 January 2020.
During 2021, the Group has experienced the following disruptions to its operations due to the
pandemic:
•
Starting from 15 July 2021, prior to entering Maltese waters, unvaccinated people aboard
boats had to present a negative PCR test taken no more than 72 hours before their arrival. In
the absence of such test, it was mandatory to undergo a quarantine of 14 days at their
expense. This created disruptions for the yacht owners and crew, both from an administrative
and an economic perspective, which led to a vast amount of cancelled summer bookings, and
•
Significant uncertainty concerning the application of quarantine periods to boats entering
local waters and the long-term effects of the pandemic on the demand for the Group’s
services.
The effects of the global pandemic have impacted the Group’s consolidated financial statements
for the year ended 31 December 2021 and the comparative year, as follows:
•
The Group experienced a significant fall in superyacht visitors when compared to historical
periods. The Company also experienced a significant fall in summer bookings by superyacht
visitors, mainly emanating from the local authorities’ decision of applying a mandatory
quarantine period (in the absence of a PCR test) to any boats entering local waters;
•
Government grants- As of 8 March 2020, the Group started benefitting from a government
wage support scheme in response to the global pandemic. Included in profit or loss, and as
disclosed in note 11, is €65k (Dec 2020: €180k) of government grants obtained relating to a
wage support scheme. The Group has elected not to present this government grant separately
but has instead deducted the related expense “Wages and salaries” in accordance with
IAS 20
Accounting for Government Grants and Disclosure of Government Assistance
;
•
During June 2020, the sub-lease agreement on one office was terminated by the sub-lessee.
As at the reporting date, the office, on which the Company pays a head lease, is still vacant;
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
36
6
Significant events and transactions (continued)
•
IC Cesme’s landside revenues were below 2019 levels due to the pandemic-related limitations
established by the government of Turkey until June 2021. Such limitations have also affected
the travels & the visitor numbers of the marina.
•
The pandemic, together with other geo-political uncertainties, led to a further 30.3%
reduction in the average value of Turkish Lira against the Euro which changed from an average
of 8.01 in 2020 to 10.44 in 2021, resulting in an exchange loss of €3.8 million during the year
(with the Group’s share being €1.71 million), which was recognised in profit or loss by the joint
venture, and an exchange gain of €0.3 million recognised by the Group in other
comprehensive income from the translation of the joint venture’s financial statements to EUR.
Despite these challenges, the Group’s view is that the local tourism sector and the superyacht
traffic will recover to pre-covid levels over the medium term and will subsequently continue to
prosper.
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 7.12.2). 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
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group ‘controls’ an entity when it is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power over the entity. The financial statements of subsidiaries are
included in the consolidated financial statements from the date on which control commences until
the date on which control ceases.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
37
7
Significant accounting policies (continued)
7.1
Basis of consolidation (continued)
7.1.2
Subsidiaries (continued)
7.1.2.1
Investment in subsidiaries
In the separate financial statements, investments in subsidiaries are accounted for on the basis of
the direct equity interest and are stated at cost less any accumulated impairment losses. Dividends
from the investment are recognised in profit or loss.
7.1.3
Non-controlling interests (“NCI”)
NCI are measured at their proportionate share of the acquiree’s identifiable net assets at the
acquisition date. Changes in the Group’s interest in a subsidiary that do not result in a loss of
control are accounted for as equity transactions.
7.1.4
Loss of control
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the
subsidiary, and any related NCI and other components of equity. Any resulting gain or loss is
recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value
when control is lost.
7.1.5
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.
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 at 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.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
38
7
Significant accounting policies (continued)
7.1
Basis of consolidation (continued)
7.1.6
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 their 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 rate 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.
7.3
Revenue from contracts with customers
Information about the Group’s accounting policies relating to contracts with customers is provided
in note 10.
7.4
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.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
39
7
Significant accounting policies (continued)
7.5
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.
7.6
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 Parent company,
-
interest expense on the lease liability,
-
interest expense on bonds in issue,
-
amortised 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.
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.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
40
7
Significant accounting policies (continued)
7.7
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.
7.7.1
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.
Current tax assets and liabilities are offset only if certain criteria are met.
7.7.2
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.
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
individual subsidiaries in the Group.
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.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
41
7
Significant accounting policies (continued)
7.7
Income tax (continued)
7.7.2
Deferred tax (continued)
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. Deferred tax assets and liabilities are offset only if certain conditions are met.
7.8
Property, plant and equipment
7.8.1
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.
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 used 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.
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 the statements of profit or loss and
other comprehensive income.
7.8.2
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.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
42
7
Significant accounting policies (continued)
7.8
Property, plant and equipment (continued)
7.8.3
Subsequent expenditure (continued)
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.
7.8.4
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
generally 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”.
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 7.8.1. Assets in the course of construction are not depreciated,
as explained in note 7.8.2.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and
adjusted if appropriate.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
43
7
Significant accounting policies (continued)
7.9
Financial instruments
7.9.1
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.
7.9.2
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 Parent company 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.
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.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
44
7
Significant accounting policies (continued)
7.9
Financial instruments (continued)
7.9.2
Classification and subsequent measurement (continued)
Financial assets (continued)
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.
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.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
45
7
Significant accounting policies (continued)
7.9
Financial instruments (continued)
7.9.2
Classification and subsequent measurement (continued)
Financial assets – Assessment whether contractual cash flows are solely payments of principal and
interest (continued)
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.
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.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
46
7
Significant accounting policies (continued)
7.9
Financial instruments (continued)
7.9.2
Classification and subsequent measurement (continued)
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.
7.9.3
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.
The Group enters into transactions whereby it transfers assets recognised in its statement of
financial position but retains either all or substantially all of the risks and rewards of the transferred
assets. In these cases, the transferred assets are not derecognised.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged,
cancelled or expired. The Group also derecognises a financial liability when its terms are modified
and the cash flows of the modified liability are substantially different, in which case a new financial
liability based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished
and the consideration paid (including any non-cash assets transferred or liabilities assumed) is
recognised in profit or loss.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
47
7
Significant accounting policies (continued)
7.9
Financial instruments (continued)
7.9.4
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.
7.10
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.
7.11
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
.
7.12
Impairment
7.12.1
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 Parent company and cash at bank; and
-
debt investments measured at FVOCI, namely investments in corporate debt securities.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
48
7
Significant accounting policies (continued)
7.12
Impairment (continued)
7.12.1
Non-derivative financial assets (continued)
Financial instruments (continued)
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following,
which are measured at 12-month ECLs:
-
debt securities that are determined to have low credit risk at the reporting date; and
-
financial assets for which credit risk (i.e. the risk of default occurring over the expected life of
the financial instrument) has not increased significantly since initial recognition.
Loss allowances for trade and other receivables are always measured at an amount equal to
lifetime ECLs. For lease receivables, the Company applies the simplified approach above as its
accounting policy.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECLs, the Group considers reasonable and supportable
information that is relevant and available without undue cost or effort. This includes both
quantitative and qualitative information, based on the Group’s historical experience and informed
credit assessment and including forward-looking information. Forward-looking information
includes the future prospects of the industries in which the Company’s debtors operate, as well as
consideration of various external sources of actual and forecast economic information that relate
to the Company’s core operations. In assessing whether the credit risk on a financial instrument
has increased significantly since initial recognition, the Group compares the risk of a default
occurring on the financial instrument as at the reporting date with the risk of a default occurring
on the financial instrument as at the date of initial recognition.
The Group considers a financial asset to be in default when the debtor is unable to pay its credit
obligations to the Group in full. The Group rebuts the 90 days past due presumption since it has
reasonable and supportable information to demonstrate that a more lagging default criterion is
more appropriate.
The Group considers a debt security to have low credit risk when its credit risk rating is equivalent
to the globally understood definition of investment grade.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a
financial instruments.
12-month ECLs are the portion of ECLs that result from default events that are possible within the
12 months after the reporting date (or a shorter period if the expected life of the instrument is less
than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over
which the Group is exposed to credit risk.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
49
7
Significant accounting policies (continued)
7.12
Impairment (continued)
7.12.1
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 Parent company, 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.
7.12.2
Non-financial assets
At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other
than deferred tax assets) to determine whether there is any indication of impairment. If any such
indication exists, then the asset’s recoverable amount is estimated.
Recoverable amount is estimated for the individual asset. For impairment testing, if it is not
possible to estimate the recoverable amount of the individual asset, assets are grouped together
into the smallest group of assets that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or CGUs.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
50
7
Significant accounting policies (continued)
7.12
Impairment (continued)
7.12.2
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.
7.12.3
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.
7.13
Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract
is, or contains, a lease if the contract conveys the right to control the use of an identified asset for
a period of time in exchange for consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Group assesses whether:
-
the contract involves the use of an identified asset – this may be specified explicitly or
implicitly, and should be physically distinct or represent substantially all of the capacity of a
physically distinct asset. If the supplier has a substantive substitution right, then the asset is
not identified;
-
the Group has the right to obtain substantially all of the economic benefits from use of the
asset throughout the period of use; and
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
51
7
Significant accounting policies (continued)
7.13
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 2021 are as follows:
•
Properties
3 to 13 years
•
Water space
79 years from the balance sheet date
The lease liability is initially measured at the present value of the lease payments that are not paid
at the commencement date, discounted using the interest rate implicit in the lease or, if that rate
cannot be readily determined, the Group’s incremental borrowing rate. The Group uses its
incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various
external financing sources, particularly the Group’s debt securities in issue and makes certain
adjustments to reflect the terms of the lease and type of the asset leased.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
52
7
Significant accounting policies (continued)
7.13
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.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-
value assets and/or leases that have a lease term of 12 months or less. The Group recognises the
lease payments associated with these leases as an expense on a straight-line basis over the lease
term. As at reporting date, the Group had no similar lease contracts.
ii.
As a lessor
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance
lease or an operating lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers
substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is
the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this
assessment, the Group considers certain indicators such as whether the lease is for the major part
of the economic life of the asset.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
53
7
Significant accounting policies (continued)
7.13.1
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 7.12). 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.
7.14
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.
7.15
Segment reporting
Segment results that are reported to the CEO of Grand Harbour Marina p.l.c. (the Group’s chief
operating decision maker), 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.
7.16
Fair value measurement
‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date in the principal or, in
its absence, the most advantages market to which the Group has access at that date.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
54
7
Significant accounting policies (continued)
7.16
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:
7.16.1
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.
7.16.2
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.
7.16.3
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.
7.17
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
Standards issued 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 IFRS 16 as amended in March 2021 - Covid-19-Related Rent Concessions
beyond 30 June 2021
This Amendment provides lessees with an exemption from assessing whether a Covid-19-
related rent concession is a lease modification and extends the time period over which the
practical expedient is available for use. Neither the Company nor the Group have granted
Covid-19 related rent concessions and accordingly this Amendment did not affect these
financial statements.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
55
8
Standards issued but not yet effective (continued)
8.1
International Financial Reporting Standards applicable during the current year (continued)
•
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 as issued in August 2020 - Interest
Rate Benchmark Reform – Phase 2
Phase 2 of this project addresses issues that might affect financial reporting when an existing
interest rate benchmark is actually replaced. The changes relate to the modification of
financial assets, financial liabilities and lease liabilities, specific hedge accounting
requirements, and disclosure requirements applying IFRS 7 to accompany the amendments
regarding modifications and hedge accounting. In respect of the modification of financial
assets, financial liabilities and lease liabilities, the IASB introduces a practical expedient for
modifications required as a direct consequence of the IBOR reform and made on an
economically equivalent basis. A similar practical expedient is proposed for lessee accounting
applying IFRS 16. These amendments enable entities to reflect the effects of transitioning from
interbank offered rates (IBOR) to alternative benchmark interest rates (also referred to as ‘risk
free rates’ or RFRs) without giving rise to accounting impacts that would not provide useful
information to users of financial statements.
As disclosed in note 20, the Company’s joint venture, IC Cesme has a loan with Isbank in the
form of a Term Facility Agreement which as at 31 December 2021 amounts to €538k (2020:
€2,692k), subject to a nominal interest rate of six month Euribor plus 4.5%. The calculation
methodology of Euribor changed during 2019. In July 2019, the Belgian Financial Services and
Markets Authority granted authorisation with respect to Euribor under the European Union
Benchmarks Regulation. This allows market participants to continue to use Euribor for both
existing and new contracts and the Group expects that Euribor will continue to exist as a
benchmark rate for the foreseeable future. Except as disclosed in this paragraph, neither the
Company nor the Group have any other financial assets, financial liabilities or lease liabilities
with rates subject to the IBOR reform and accordingly this Amendment did not affect these
financial statements.
8.2
International Financial Reporting Standards issued but not yet effective
At the date of authorisation of these separate and consolidated financial statements, several new,
but not yet effective, Standards and amendments to existing Standards, and Interpretations have
been published by the IASB. None of these Standards or amendments to existing Standards have
been adopted early by the Group.
•
IAS 1 Amendments – Classification of Liabilities as Current and Non-current
The amendment affects only the presentation of liabilities in the statement of financial position
— not the amount or timing of recognition of any asset, liability income or expenses, or the
information that entities disclose about those items. They:
-
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;
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
56
8
Standards issued but not yet effective (continued)
8.2
International Financial Reporting Standards issued but not yet effective (continued)
•
IAS 1 Amendments – Classification of Liabilities as Current and Non-
current (continued)
-
clarify that classification is unaffected by expectations about whether an entity will
exercise its right to defer settlement of a liability; and
-
make clear that settlement refers to the transfer to the counterparty of cash, equity
instruments, other assets or services.
The changes in ‘Classification of Liabilities as Current or Non-current — Deferral of Effective
Date’ issued on 15 July 2020 defer the effective date of Classification of Liabilities as Current or
Non-current (Amendments to IAS 1) to annual reporting periods beginning on or after 1 January
2023.
•
IAS 8 Amendments – Definition of Accounting Estimates
This amendment was issued to distinguish between changes in accounting policies from
changes in accounting estimates. The amendment shall be effective for periods beginning on
or after 1 January 2023.
•
Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting Policies
The amendments are intended to help preparers in deciding which accounting policies to
disclose in their financial statements. The amendment shall be effective for periods beginning
on or after 1 January 2023.
•
IAS 12 Amendment – Deferred Tax related to Assets and Liabilities arising from a Single
Transaction
Prior to the amendments, there had been some uncertainty about whether the IAS 12
exemption from recognising deferred tax applied to transactions for which companies
recognise both an asset and liability, for example leases. The amendments clarify that the
exemption does not apply and that companies are required to recognise deferred tax on such
transactions. The amendments are effective for annual reporting period beginning on or after
1 January 2023.
The directors of the Company are in the process of assessing the potential impact, if any, of these
Standards on the separate and consolidated financial statements.
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
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
57
9
Operating segments (continued)
9.1
Information about reportable segments (continued)
have their own resource and capital requirements. For each of the reporting segments, the Chief
Executive Officer and the Board of Directors review 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.
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 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 trade receivables and
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)
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 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 trade receivables and
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)
Capital expenditure
193
(159)
34
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
58
9
Operating segments (continued)
9.1
Information about reportable segments (continued)
Reportable Group segment assets and liabilities for 2021 are reconciled as follows:
€000
Assets
Total assets of Grand Harbour Marina p.l.c.
27,802
Share of post-acquisition losses of joint-venture brought forward
(314)
Depreciation of fair value uplift on acquisition brought forward
(330)
Foreign exchange translation reserve of joint-venture brought forward
(228)
Share of loss of joint venture for the year
(877)
Depreciation of fair value uplift for the year
(12)
Foreign exchange translation differences for the year
301
Consolidated assets
26,342
Liabilities
Total liabilities of Grand Harbour Marina p.l.c.
(24,197)
Consolidated liabilities
(24,197)
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 profit before tax of Grand Harbour Marina
398
Share of loss of IC Cesme Marina
(889)
Consolidated loss before tax
(491)
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
59
9
Operating segments (continued)
9.1
Information about reportable segments (continued)
The comparative figures are analysed as follows:
31 December 2020
Grand
Harbour
Marina
IC Cesme
Marina
Total
Reportable
Segments
€000
€000
€000
Reportable segment assets
28,321
14,239
42,560
Reportable segment liabilities
(24,900)
(14,513)
(39,413)
Segment revenues- external
4,098
3,347
7,445
Finance income
261
20
281
Finance costs
(1,118)
(3,694)
(4,813)
Impairment loss on trade receivables and
financial assets
(7)
-
(7)
Depreciation
(387)
(304)
(691)
Direct costs
(834)
(249)
(1,083)
Selling, marketing and other
administrative expenses
(1,214)
(1,485)
(2,699)
Capital expenditure
58
19
77
Reconciliation to Consolidated Amounts
Total
Reportable
Segments
Eliminations
Group
€000
€000
€000
Reportable segment assets
42,560
(15,111)
27,449
Reportable segment liabilities
(39,413)
14,513
(24,900)
Segment revenues- external
7,445
(3,347)
4,098
Finance income
281
(20)
261
Finance costs
(4,813)
3,694
(1,119)
Impairment loss on trade receivables and
financial assets
(7)
-
(7)
Depreciation
(691)
304
(387)
Direct costs
(1,083)
249
(834)
Selling, marketing and other
administrative expenses
(2,699)
1,485
(1,214)
Capital expenditure
77
(19)
58
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
60
9
Operating segments (continued)
9.1
Information about reportable segments (continued)
Reportable Group segment assets and liabilities for 2020 are reconciled as follows:
€000
Assets
Total assets of Grand Harbour Marina p.l.c.
28,321
Share of post-acquisition profit of joint-venture brought forward
266
Share of post-acquisition translation reserve of joint-venture brought forward
(97)
Transfer to equity-accounted investee
(48)
Share of loss of joint venture for the year
(862)
Foreign exchange currency translation differences for the year
(131)
Consolidated assets
27,449
Liabilities
Total liabilities of Grand Harbour Marina p.l.c.
(24,900)
Consolidated liabilities
(24,900)
Reportable Group segment profit before tax for 2020 is reconciled as follows:
Grand
Harbour
Marina
IC Cesme
Marina
Total
Reportable
Segments
€000
€000
€000
Reportable profit/ (loss) before tax
806
(2,366)
(1,560)
Reconciliation to Consolidated Amounts
Total
Reportable
Segments
Eliminations
Group
€000
€000
€000
Reportable loss before tax
(1,560)
1,504
(56)
€000
Loss before tax
Total profit before tax of Grand Harbour Marina
806
Share of loss of IC Cesme Marina
(862)
Consolidated loss before tax
(56)
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
61
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 2021 and 2020, the Company did not affect any berth sale.
2021
2020
€000
€000
Group and Company
Annual service charges to berth owners
436
445
Revenue from short-term berthing
2,409
2,671
Ancillary services
776
982
Total revenues
3,621
4,098
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.
2021
2020
€000
€000
Revenue from contracts with customers:
Revenue generated from pontoons:
Annual contracts
1,453
1,537
Seasonal contracts
128
111
Visitor contracts
134
142
1,715
1,790
Revenue generated from superyachts:
Annual service charges to berth owners
436
444
Annual contracts
229
260
Seasonal contracts
158
378
Visitor contracts
307
244
1,130
1,326
Revenue from contracts with customers
2,845
3,116
Revenue from ancillary services
776
982
Total revenue as reported in note 10.1
3,621
4,098
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
62
10
Revenue (continued)
10.3
Contract balances
The following table provides information about receivables and contract liabilities from contracts
with customers.
2021
2020
Group and Company
€000
€000
Receivables, which are included in ‘trade and other receivables’ (note 22.1)
582
721
Contract liabilities on trade receivables (note 28)
1,043
1,124
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 €1,101k (2020: €1,136k)
recognised in contract liabilities at the beginning of the year has been recognised as revenue for
the year ended 31 December 2021. The remaining amount of €23k (2020: €23k) has been deferred
to 2022 as this consideration relates to berthing contracts spanning into the next financial year.
As at reporting date, the Company did not have any contract assets as the Company’s rights to
consideration for satisfied performance obligations was fully completed and billed in full by the
reporting date.
10.4
Performance obligations and revenue recognition policies
Revenue is measured based on the consideration specified in the contract with a customer, and is
recognised when, or as, the Group satisfies a performance obligation by transferring a good or
service to a customer. Information about the nature and timing of the satisfaction of performance
obligations in contracts with customers, including significant payment terms and the related
revenue recognition policies are as follows in notes 10.4.1 and 10.4.2.
10.4.1
Licensing of long-term super-yacht berths
The Group recognises revenue at a point in time. To determine the point in time at which it satisfies
its performance obligations and transfers control of a good/service at a point in time, the Group
considers indicators of the transfer of control, which include the following:
-
the Group has a present right to payment for the asset i.e. if a customer is presently obliged to
pay for an asset;
-
the customer has legal title to the asset;
-
the Group has transferred physical possession of the asset;
-
the customer has the significant risks and rewards of the ownership of the asset; or
-
the customer has accepted the asset.
All these conditions may indicate that the customer has obtained the ability to direct the use of,
and obtain substantially all the remaining benefits from, the asset in exchange for consideration.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
63
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 IAS 18, any revenue from the licensing of long-term super-yacht berths was 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. Similarly, under IFRS 15, revenue will
continue to be 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 should be 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 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.
As a practical expedient, the Group does not adjust the promised amount of consideration for the
effects of a significant financing component if the Group expects, at contract inception, that the
period between when the Group transfers a promised good/service to a customer and when the
customer pays for that good/service will be one year or less.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
64
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.
However, as a practical expedient, the Group will recognise the incremental costs of obtaining a
contract as an expense when incurred since the amortisation period of the asset that the Group
otherwise would have recognised is one year or less.
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
2021
2020
€000
€000
Group and company
Cost of sales:
Direct costs
667
834
Operating expenses:
Directors' remuneration (short-term benefits)
38
38
Wages and salaries (net of €65k (2020: €180k) government
grant as per note 6)
590
446
Compulsory social security contributions
43
46
Selling and marketing expenses
26
29
Repairs and maintenance
60
59
Variable lease expense (see note 21.1.5)
62
98
Auditors’ remuneration (see note 12.1)
43
49
Net loss on asset write-off
12
5
Operator fees (see note 31.2)
183
197
Depreciation on plant and equipment (see note 16.1)
276
278
Depreciation on right-of-use asset (see note 21.1)
143
109
Other operating expenses
221
240
Total expenses recognised in statement of profit or loss
2,364
2,428
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
65
11
Expenses (continued)
11.1
Expenses by nature (continued)
The average number of persons employed during the year was as follows:
2021
2020
No.
No.
Group and company
Operating
19
21
Management and administration
5
5
24
26
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:
2021
2020
€000
€000
Group and company
Audit of the financial statements
39
42
Tax advisory services
3
1
Other assurance services
1
6
43
49
The
audit
fee
payable
to
IC
Cesme’s
auditors
for
2021
amounted
to
€10k
(2020: €7k), with the Group’s share of such audit fees being €4k (2020: €3k). No non-audit fees
were incurred by IC Cesme during 2021 (2020: €nil).
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
66
13
Net finance costs
2021
2020
€000
€000
Group and company
Finance income:
Interest income under the effective interest method on:
Loans to Parent company - measured at amortised cost
145
90
Corporate debt securities - at FVOCI
179
170
Corporate debt securities- at FVOCI:
Gain on derecognition reclassified from OCI
5
1
Finance income
329
261
Finance costs:
Interest expense on financial liabilities measured at amortised
cost
(674)
(675)
Interest expense on lease liabilities (see note 21.1.2)
(376)
(382)
Reversal of interest income on lease receivable (see note 21.2)
-
(23)
Amortisation of bond issue costs (see note 26.4)
(38)
(36)
Net foreign exchange losses
(2)
(2)
Finance costs
(1,090)
(1,118)
Net finance costs recognised in statement of profit or loss
(761)
(857)
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:
2021
2021
2020
2020
Group
Company
Group
Company
€000
€000
€000
€000
(Loss)/ profit for the year, attributable
to the owners of the Company
(784)
105
(390)
472
Number of ordinary shares of the
Company (in thousands)
20,000
20,000
20,000
20,000
(Loss)/ Earnings per share (in €)
(0.039)
0.005
(0.019)
0.024
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
67
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.
2021
2020
€000
€000
Group and company
Current tax
Charge during the year
(365)
(490)
(365)
(490)
Deferred tax
Movement in temporary differences (see note 15.4)
72
156
72
156
Income tax expense on continuing operations recognised in
statement of profit or loss
(293)
(334)
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:
2021
2021
2020
2020
Group
Company
Group
Company
€000
€000
€000
€000
(Loss)/ profit before income tax
(491)
398
(56)
806
Tax using the domestic tax rate of
35%
172
(139)
20
(282)
Tax effect of:
•
Disallowable expenses
(154)
(154)
(52)
(52)
•
Share of loss of equity-
accounted investee
(311)
-
(302)
-
Income tax expense for the year
(293)
(293)
(334)
(334)
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
68
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
2021
2020
2021
2020
2021
2020
€000
€000
€000
€000
€000
€000
Plant and equipment
-
-
(1,243)
(1,308)
(1,243)
(1,308)
Expected credit losses
-
14
-
-
-
14
Unrealised changes in fair
value of corporate debt
securities
-
33
-
-
-
33
Right-of-use asset and net
investment receivable
322
268
-
-
322
268
Net deferred tax liabilities
322
315
(1,243)
(1,308)
(921)
(993)
15.4
Movement in temporary differences during the year
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)
Balance 1
January
2020
Movement in
temporary
differences
Balance 31
December
2020
€000
€000
€000
Group and Company
Plant and equipment
(1,368)
60
(1,308)
Expected credit losses
11
3
14
Unrealised changes in fair value of corporate
debt securities
-
33
33
Right-of-use
asset
and
net
investment
receivable
208
60
268
(1,149)
156
(993)
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
69
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 2020
9,485
4,299
3,521
890
47
574
154
Additions
58
3
14
2
8
12
19
Assets written off
(15)
-
(15)
-
-
-
-
Balance at 31 December 2020
9,528
4,302
3,520
892
55
586
173
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
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
70
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 2020
4,426
1,159
2,109
630
42
486
-
Depreciation charged for the year
278
86
141
24
6
21
-
Assets written off
(7)
-
(7)
-
-
-
-
Balance at 31 December 2020
4,697
1,245
2,243
654
48
507
-
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
-
Carrying amounts
Balance at 1 January 2020
5,059
3,140
1,412
260
5
88
154
Balance at 31 December 2020
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
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
71
16
Property, plant and equipment (continued)
16.1
(continued)
In 2021, the company replaced a substation, classified under the “Pontoon berths” category, which was
acquired in 2004 at a cost of €81k, and which at the time of the write-off had an accumulated
depreciation of €54k. Loss 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 fire pumps, 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 The White Building, 4 Cumberland Place, Southampton, SO15 2NP. The reporting date of this non-
trading entity is 31 March.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
72
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
2021
2021
2020
2020
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 1 January and 31
December
2,174
2,174
2,174
2,174
Share of post-acquisition (losses)/ profits
brought forward
(314)
536
Share of loss for the year
(877)
(850)
Depreciation of fair value uplift on acquisition
brought forward
(330)
(318)
Depreciation of fair value uplift on acquisition
for the year
(12)
(12)
Foreign currency translation brought forward
(228)
(97)
Foreign currency translation difference for the
year
301
(131)
Equity accounted investee as at 31 December
714
1,302
IC Cesme, the only joint arrangement in which the Group participates, is principally engaged in the
operation of a marina in Turkey. IC Cesme is an unlisted joint arrangement and is structured as a
separate vehicle and the Group has a residual interest in its net assets. Accordingly, the Group has
classified the investment in IC Cesme as a joint venture which is equity accounted.
In accordance with the agreement under which IC Cesme is established, the Group and the other
investors to the joint venture agree to make additional contributions in proportion to their interests, if
required.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
73
18
Equity-accounted investee (continued)
18.3
Summary of financial information of joint venture
The Group’s share of loss in its equity accounted investee for the year, inclusive of the depreciation of
fair value uplift upon acquisition, amounted to €889k (2020: profit of €862k). 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.
2021
2020
€000
€000
Non-current assets
7,454
10,881
Current assets (including cash and cash equivalent of €1,788k,
Dec 2020: €3,161k)
2,050
3,358
Non-current liabilities
(1,343)
(6,786)
Current liabilities (including trade and other payables and provisions
of €1,737K, Dec 2020: €1,893k)
(9,714)
(7,727)
IC Cesme net liabilities (100%) at 31 December
(1,553)
(274)
Group’s share of net liabilities (45%)
(699)
(123)
Fair value uplift on date of acquisition (less deferred tax impact)
907
907
Cumulative
depreciation
on
fair
value
uplift,
adjusted
on
consolidation
(342)
(330)
Goodwill
848
848
Carrying amount of interest in joint venture, as per Statement of
financial position (see note 18.2)
714
1,302
Revenue
3,849
3,347
Operating expenses
(1,666)
(1,735)
Depreciation
(223)
(304)
Results from operating activities
1,960
1,308
Net finance costs (including interest expense of €787k and net foreign
exchange losses of €3,839k less interest income of €83k, Dec 2020:
interest expense of €931k and net foreign exchange loss of €2,763k
less interest income of €20k)
(4,543)
(3,674)
Loss before tax for the year
(2,583)
(2,366)
Taxation credit
634
478
Total comprehensive income for the year (100%)
(1,949)
(1,888)
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
74
18
Equity-accounted investee (continued)
18.3
Summary of financial information of joint venture (continued)
2021
2020
€000
€000
Group’s share of total comprehensive income (45%)
(877)
(850)
Depreciation on fair value uplift of depreciable assets
(12)
(12)
Share of loss of equity-accounted investee, net of tax, as per
statement of profit or loss and OCI
(889)
(862)
Foreign currency translation difference arising during the year
301
(131)
Decrease in carrying amount of interest in joint venture, before
adjustment
(588)
(993)
Transfer to equity-accounted investee
-
(48)
Change in carrying amount of interest in joint venture
(588)
(1,041)
18.4
Impairment assessment of investment in joint venture
As explained in note 18.1 the Company acquired its investment in IC Cesme Marina Yatırım 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 in order to determine whether it exceeds the
carrying amount. The directors have included in their estimate of the recoverable amount analysis, the
value of the IC Cesme marina prepared by CBRE UK Limited, who are appointed throughout the CNMIL
Group to value the properties held.
The recoverable amount was estimated based on its fair value less costs of disposal. The fair value
measurement falls within Level 3 of the fair value hierarchy. The fair value of the property has been
arrived at by reference to its trading potential using both the market comparison and income
capitalisation valuation technique, whereby EBITDA for a reasonably efficient operator (“REO”) is
multiplied by a capitalisation multiple, and adjusted for other non-operating assets, net debt and a
discount for joint control.
EBITDA has been based on the 2021 actual performance for IC Cesme, adjusted for any normalisations
applicable to REO.
Adjusted EBITDA of year 2 to year 6 were also forecasted to grow at the expected
inflation rate of Turkey. At Exit, the adjusted EBITDA of year 6 has been capitalised at a rate of 7.75%
(2020: 7.69%) for the remainder of the term of 46 years (2020: 47 years) for the BOT contract giving a
capitalisation multiple of 12.90 (2020: 12.60).
The capitalisation rate was estimated on the basis of
market information on transactions involving marinas. The exit yield of 7.75% was added to the overage
in line with the average annual inflation rate of 13.25% to give a discount rate of 21%.
The estimated recoverable amount of the Company’s investment in IC Cesme’s net assets at Group and
Company level, exceeds its’ carrying amount.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
75
19
Investment in debt securities
19.1
2021
2020
Group and Company
€000
€000
Non-current corporate debt securities
Opening fair value
5,894
5,651
Acquisitions
-
474
Disposals
(152)
(135)
Realised fair value gain on disposals
(5)
(1)
Net increase/ (decrease) in fair value, recognised in OCI
79
(95)
Unwinding of premium paid upon acquisition
(10)
-
Closing fair value
5,806
5,894
Impairment loss on corporate debt securities, recognised in P&L
-
(1)
During 2021, the Company did not acquire any corporate debt securities (2020: €474k) and disposed of
€157k corporate debt securities held within the company’s investment portfolio (2020: €136k), realising
a fair value gain of €5k (2020: €1k), which was recycled from OCI to profit or loss. The unrealised fair
value gain of €79k (Dec 2020: unrealised fair value loss of €95k) on the investment in debt securities
held as at 31 December 2021 has been presented in OCI and included in the fair value reserve.
As at 31 December 2021, the value of such investments, by reference to quoted market prices on the
Malta Stock Exchange, amounted to €5,806k (2020: €5,894k).
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 7.9.2).
19.3
Information about the Group’s exposure to credit and market risks for debt investments is disclosed in
notes 29.5 and 29.7 respectively.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
76
20
Loans to Parent company
20.1
2021
2020
€000
€000
Group and Company
At 1 January
6,172
3,922
Loans (repaid)/ advanced (see notes 20.2 and 20.3)
(158)
2,254
Increase in expected credit losses
(98)
(4)
Total
5,916
6,172
Non-current
2,668
4,242
Current
3,248
1,930
These loans are denominated in Euros.
20.2
Related terms and conditions on cash pledged in favour of IC Cesme’s bankers, Isbank
The Company’s joint venture, IC Cesme has a loan with Isbank in the form of a Term Facility Agreement
which as at 31 December 2021 amounts to €538k (2020: €2,692k), repayable in semi-annual
instalments subject to a nominal interest rate of six month Euribor plus 4.5%. During the year, IC Cesme
repaid €2,154k from the loan (2020: €538k). The remaining balance is due to be repaid in July 2022.
In addition to the Term Facility referred to above, Isbank provides other sub-loans to IC Cesme in the
form of a General Cash and Non-Cash Credit Agreement (“Subordinated Loans) which as at 31
December 2021 amounts to €6,185k (2020: €6,525k), subject to nominal rates of interest ranging from
1% to 1.85%, with the various drawdowns maturing at different dates.
The Subordinated Loans, which are denominated in Euros, are secured by cash pledges by the
shareholders of IC Cesme. The cash pledge continues to be held in the name of the Company’s parent
(“CNMIL”), but in terms of the sale agreement, the Company has lodged an equivalent sum with CNMIL
in anticipation of Isbank agreeing to complete the legal formalities relating to this substitution, which
has not yet been completed. Accordingly, CNMIL acts as a guarantor and sponsor of IC Cesme’s
repayment obligations under the Term Facility and the Subordinated Loans to the extent of 45%
(reflective of the Company’s beneficial interest in IC Cesme) for any failure by IC Cesme to honour
repayments. In the meantime, the Company indemnified CNMIL in the event that Isbank enforces any
of its rights under the Term Facility and has irrevocably instructed and authorized the Company’s Parent
company to hold and apply the cash pledge in conformity with all the obligations under the Isbank
documents.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
77
20
Loans to Parent company (continued)
20.2
Related terms and conditions on cash pledged in favour of IC Cesme’s bankers, Isbank (continued)
Whereas up until the year ending 31 December 2020, Isbank was rolling forward the sub-loans when
they reached maturity, the bank’s internal policies were revised on the back of the changing global
economic climate. As such, in November 2021 IC Cesme was asked to affect a part-payment of €340k
on a maturing sub-loan amounting to €1,140k. The balance of €800k was rolled forward by Isbank to
June 2022. Furthermore, in February 2022 IC Cesme settled a maturing sub-loan of €1,225k through a
cash payment of €225k, with the balance being settled through part of the shareholder cash pledged
against this sub-loan (GHM’s 45% share being €450k). While the balance on this cash pledge was
released by Isbank to the shareholders (GHM’s 45% share: €101k), the said amount of shareholder cash
pledge directed towards the sub-loan settlement will be converted into a shareholder loan which terms
are currently under review. As such this will merely represent a reclassification of receivable at GHM
level.
As a result, the Company’s loan receivable from its Parent company, pledged in favour of Isbank for the
Subordinated Loans taken out, amounts to €2,783k (2020: €2,954k). The details of these sub-loans as
at 31 December 2021 are as follows:
2021
2020
Amount
€000
Interest
p.a.
Maturity
date
Amount
€000
Interest
p.a.
Maturity
date
Subloan 1
1,225
1.00%
03/02/2022
1,225
1.00%
03/02/2022
Subloan 2
800
1.50%
12/06/2022
1,140
1.50%
12/11/2021
Subloan 3
525
1.35%
21/06/2022
525
1.35%
21/06/2021
Subloan 4
400
1.35%
21/06/2022
400
1.35%
21/12/2021
Subloan 5
1,685
1.85%
13/07/2022
1,685
1.85%
13/07/2022
Subloan 6
400
1.85%
20/07/2022
400
1.85%
20/07/2022
Subloan 7
1,150
1.85%
10/08/2022
1,150
1.85%
10/08/2022
6,185
6,525
Moreover, the IC Cesme Board is currently reviewing its options in terms of the remaining sub-loans,
all of which mature in 2022, amongst which is the repayment thereof through the cash pledge, in line
with the approach taken with the sub-loan maturing in February 2022 as described above.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
78
20
Loans to Parent company (continued)
20.3
Related terms and conditions on other loans to Parent company
In addition to the above pledged loan between the Company and its parent company, additional
upstream loans to the Parent company amount to €3,250k (2021: €3,250k). The details of these loans
are as follows:
2021
2020
Amount
€000
Interest
p.a.
Maturity
date
Amount
€000
Interest
p.a.
Maturity
date
Loan Note 1
400
4.00%
31/12/2022
400
4.00%
31/12/2021
Loan Note 2
600
4.00%
31/12/2022
600
4.00%
31/12/2021
Loan Note 3
2,250
4.50%
30/09/2022
2,250
4.50%
30/09/2022
3,250
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.
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
2021
2020
2021
2020
2021
2020
€000
€000
€000
€000
€000
€000
Group and company
Balance at 1 January
4,647
4,706
756
444
5,403
5,150
Recognition of right-of-use asset
-
-
-
358
-
358
Adjustment for inflation
-
-
-
4
-
4
Depreciation on right-of-use asset
(60)
(59)
(83)
(50)
(143)
(109)
Balance at 31 December
4,587
4,647
673
756
5,260
5,403
There were no additions to the right-of-use assets during 2021.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
79
21
Leases (continued)
21.1
As a lessee (continued)
21.1.2
Lease liability
2021
2020
€000
€000
Maturity analysis- contractual undiscounted cash flows
Less than one year
(362)
(370)
One to five years
(1,549)
(1,527)
More than five years
(35,851)
(36,237)
Total undiscounted lease liabilities at 31 December
(37,762)
(38,134)
Lease liabilities included in the statement of financial position at 31 December are analysed as follows:
2021
2020
€000
€000
Current
22
153
Non-current
6,159
6,020
6,181
6,173
Water space
Other
Properties
Total
2021
2020
2021
2020
2021
2020
€000
€000
€000
€000
€000
€000
Group and company
Balance at 1 January
5,370
5,292
803
863
6,173
6,155
Adjustment for inflation
-
-
-
3
-
3
Interest expense on lease
liabilities (see note 13)
336
332
40
50
376
382
Lease payments related to
the year (see note 21.1.5)
(254)
(254)
(114)
(113)
(368)
(367)
Balance at 31 December
5,452
5,370
729
803
6,181
6,173
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.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
80
21
Leases (continued)
21.1
As a lessee (continued)
21.1.4
Property lease
The Group leases other properties, comprising two offices and four warehouses, with original lease
terms of sixteen to twenty-five years, with the remaining lease terms at 31 December 2021 of one to
eleven 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.
21.1.5
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.
2021
2020
€000
€000
Leases with lease payments based on sales
Fixed payments (see note 21.1.2)
254
254
Variable payments (see note 11.1)
62
98
Total payments
316
352
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.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
81
21
Leases (continued)
21.2
As a lessor
The Group also sub-leases a warehouse, classified as finance leases under IFRS 16 and presented as
“Net investment lease receivable” in the statement of financial position, as its agreement runs for the
remaining term of the head lease
, which expires in April 2022.
During June 2020, as disclosed in note 6, the sub-lease agreement on the office building was terminated
and an amount of €358k was re-classified under “right-of-use asset”. Given that such office building has
been idle since July 2020, the directors have estimated the recoverable amount of the right-of-use asset
specific to this office building in order to determine whether it exceeds the carrying amount. The
recoverable amount has been determined on the basis of a value-in-use calculation. The directors are
of the opinion that the Company will manage to sub-lease the property again as from 2023, at a lease
rental income which is comparable to that earned on the latest sub-lease agreement, now terminated.
On this basis, the estimated recoverable amount of the asset exceeds its’ carrying amount. The
directors are optimistic that given the efforts by management in actively marketing such office, and the
unique location of the office itself being situated in a heritage site with views of the Grand Harbour
Marina, the assumptions noted above are reasonable.
Lease income from lease contracts in which the Group acts as a lessor is as below.
2021
2020
€000
€000
Net investment lease receivable
Group and Company
Balance at 1 January
3
410
Derecognition of net investment lease receivable
-
(358)
Adjustment for inflation
-
(2)
Lease receipts related to the year
(2)
(24)
Reversal of unearned interest income on lease
receivable (see note 13)
-
(23)
Balance at 31 December
1
3
The following table sets out a maturity analysis of lease receivables, showing the undiscounted lease
payments to be received after the reporting date.
2021
2020
€000
€000
Maturity analysis- contractual undiscounted cash flows
Less than one year
1
3
One to five years
-
1
More than five years
-
-
Total undiscounted lease payments receivable at 31 December
1
4
Unearned finance income to be recognized in profit or loss
during the lease period
-
(1)
Balance at 31 December
1
3
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
82
22
Trade and other receivables
22.1
2021
2020
€000
€000
Group and Company
Trade receivables, excluding related parties
582
721
Amounts due from related parties (see notes 22.2 and 31.2)
109
633
Prepayments and other receivables
441
480
Balance at 31 December
1,132
1,834
22.2
Amounts due from related parties includes €9k 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, for the last quarter of the year. This amount, together with
the interest receivable of €100k (2020: €133k) from the parent company, Camper & Nicholsons Marina
Investments Limited, is unsecured, interest free and repayable on demand. For further details, see note
31.2.
During 2021, the amount of €500k loaned by the Company to its sister company ‘Camper & Nicholsons
Marinas International Limited’ to financially assist the latter in its working capital requirements, was
repaid in full.
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 7.9.2).
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 and 29.7 respectively.
23
Cash and cash equivalents
2021
2020
€000
€000
Group and Company
Cash in hand
3
3
Bank balances
2,464
1,526
2,467
1,529
Expected credit loss on cash and cash equivalents (see note 29.5)
(1)
(1)
Cash and cash equivalents in the statement of financial position
2,466
1,528
Bank overdraft used for cash management purposes (see note
26.3)
(1)
-
Cash and cash equivalents in the statement of cash flows
2,465
1,528
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
83
24
Capital and reserves
24.1
Share capital
2021
2020
€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
No dividends were declared by the Company for the year ended 31 December 2021 (2020: €nil)
25
Capital management
The company’s objectives when managing capital are to safeguard its ability to continue as a going
concern and to maximise the return to stakeholders through the optimisation of the debt and equity
balance.
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. Management monitors the return on
capital, as well as the level of dividends to ordinary shareholders. Based on recommendations of the
directors, the company balances its overall capital structure through new share issues as well as the
issue of new debt or the redemption of existing debt.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
84
25
Capital management (continued)
The capital structure of the company consists of the debt securities in note 19, cash and cash
equivalents as disclosed in note 23 and items presented within equity in the statement of financial
position.
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.
2021
2020
€000
€000
Non-current
Debt securities in issue (see note 26.4)
14,751
14,713
Current
Bank overdraft (see note 26.3)
1
-
26.2
Terms and repayment schedule
The terms and conditions of outstanding loans are as follows:
Nominal
int rate
Year of
maturity
2021
2020
Face
value
Carrying
amount
Face
value
Carrying
amount
€000
€000
€000
€000
Bank overdraft
4.85%
Repayable on
demand
-
1
-
-
Unsecured bond
4.50%
2027
15,000
14,751
15,000
14,713
Total interest-bearing liabilities
15,000
14,752
15,000
14,713
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 Malta plc. An additional €35k is pledged in favour of a guarantee with MEPA.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
85
26
Loans and borrowings (continued)
26.4
Debt securities in issue (continued)
By virtue of the Prospectus dated 26 June 2017, the Company announced the early redemption of the
7% unsecured €12 million bond issued in 2010, from the proceeds of a new unsecured bond for an
amount of €15 million, to which the existing bondholders and shareholders were given the option to
subscribe. The bond 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 proceeds from the bond issue, net of bond issue expenses of €0.4m, amounting to €14.6 million
will be used by the Company for the following purposes:
1.
€11 million already used for the redemption of the 7% unsecured bond;
2.
€3.5 million for further waterside investment within the Marina which is envisaged to take
place in two separate stages; and
3.
€50k for general corporate and operational purposes.
The bonds are measured at the amount of net proceeds adjusted for the amortisation of the difference
between net proceeds and the redemption value of the bonds using the effective interest method as
follows:
2021
2020
€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
115
79
Amortisation charge for the year (see note 13)
38
36
Unamortised bond issue costs as at 31 December
(249)
(287)
Amortised cost and closing carrying amount of the bond
liability
14,751
14,713
The bonds have been admitted to the Official List of the Malta Stock Exchange. The quoted market price
of the bonds at 31 December 2021 was €104.00 (2020: €101.50), which in the opinion of the directors
represented the fair value of these financial liabilities.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
86
27
Trade and other payables
27.1
2021
2020
€000
€000
Group and Company
Trade payables, excluding related parties
189
440
Amounts due to related parties (see notes 27.2 and 31.2)
93
87
Other trade payables (see note 27.4)
207
218
Accrued expenses
711
661
1,200
1,406
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 Group as at 31 December 2021.
28
Contract liabilities
28.1
2021
2020
€000
€000
Group and Company
Customer advances on berthing contracts (see note 28.2)
1,043
1,124
1,043
1,124
28.2
The contract liabilities relate to the consideration received in advance from customers for berthing
contracts, for which revenue is recognised over time. Furthermore, the transaction price allocated to
performance obligations that are unsatisfied (or partially unsatisfied) at the end of the year is largely in
relation to contracts with an original expected duration of one year or less.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
87
29
Financial instruments – fair values and risk management
29.1
Accounting classification and fair values
The following table shows the fair values of financial assets other than the investment in the joint venture and financial liabilities other than lease liabilities. It does
not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair
value.
Fair value measurement using:
31 December
Level 1
Level 2
Level 3
Total
Carrying amount
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
€000
€000
€000
€000
€000
€000
€000
€000
€000
€000
Group and company
Financial assets
Financial assets at FVOCI
Investment in corporate
debt securities
-
-
5,806
5,894
-
-
5,806
5,894
5,806
5,894
Financial assets at
amortised cost
Loans to Parent company
-
-
-
-
5,916
6,172
5,916
6,172
5,916
6,172
Lease receivable
-
-
-
-
1
3
1
3
1
3
-
-
5,806
5,894
5,917
6,175
11,723
12,069
11,723
12,069
Financial liabilities at
amortised cost
Unsecured debt securities
in issue
-
-
(15,600)
(15,225)
-
-
(15,600)
(15,225)
(14,751)
(14,713)
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
88
29
Financial instruments – fair values and risk management (continued)
29.2
Measurement of fair values
Valuation techniques and significant unobservable inputs
At the end of the current and the comparative year, the carrying amount of loans to parent company,
trade receivables and cash and cash equivalents is a reasonable approximation of their fair value due
to their short-term maturities.
Loans to parent company were measured using level 3 of the fair value hierarchy.
At 31 December 2021, corporate debt securities at FVOCI with a carrying amount of €5,806k (2020:
€5,894k) 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 2021, unsecured debt securities in issue were measured at amortised cost with a
carrying amount of €14,751k (2020: €14,713k). The fair value of this financial liability as at 31 December
2021 amount to €15,600k (2020: €15,225k) were measured using level 2 of the fair value hierarchy, by
referring to their respective quoted prices in the local market.
29.3
Financial risk management
The Group, from its use of financial instruments, has exposure to credit, liquidity, and market risks.
29.4
Risk management framework
The Company’s board of directors has overall responsibility for the establishment and oversight of the
Group’s risk management framework. The Group’s risk management policies are established to identify
and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor
risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect
changes in market conditions and the Group’s activities. The Group, through its training and
management standards and procedures, aims to develop a disciplined and constructive control
environment in which all employees understand their roles and obligations.
The Group’s audit committee oversees how management monitors compliance with the Group’s risk
management policies and procedures and reviews the adequacy of the risk management framework in
relation to the risks faced by the Group.
Where possible, the Group aims to reduce and control risk concentrations. Concentrations of financial
risk arise when financial instruments with similar characteristics are influenced in the same way by
changes in economic or other factors. The amount of the risk exposure associated with financial
instruments sharing similar characteristics is disclosed in more detail in the notes to the financial
statements.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
89
29
Financial instruments – fair values and risk management (continued)
29.5
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations and arises principally from the Group’s bank balances,
receivables from customers, loans receivable from the Parent company, lease receivables and
investments in debt securities. The carrying amounts of financial assets represent the maximum credit
exposure. Impairment losses on financial assets recognised in the statement of profit or loss were as
follows (see note 11.1):
2021
2020
€000
€000
Impairment loss on corporate debt securities at FVOCI (see note 29.5.2)
-
1
Impairment loss on cash pledged in favour of Isbank (see note 29.5.3)
98
3
Impairment loss on loans to Parent company (see note 29.5.3)
-
1
Reversal of Impairment loss on cash and cash equivalents (see note 29.5.4)
-
(1)
Impairment loss on trade receivables (see note 29.5.1)
-
3
98
7
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 0.08% (2020: 0.11%) of these customers’ balances have been written off or credit-impaired at the
reporting date. In monitoring customer credit risk, customers are grouped according to their credit
characteristics, including whether they are an individual or a legal entity, industry, trading history with
the Group and existence of previous financial difficulties.
At 31 December 2021, the exposure to credit risk for trade receivables by type of counterparty was as
follows:
2021
2020
€000
€000
Individuals
89
119
Legal entities
335
438
Agents
158
164
582
721
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
90
29
Financial instruments – fair values and risk management (continued)
29.5
Credit risk (continued)
29.5.1
Trade receivables (continued)
The following table provides information about the ageing of trade receivables as at 31 December:
2021
2020
€000
€000
Past due but not impaired
Current (not past due)
110
110
1–30 days past due
78
234
31–60 days past due
87
85
61–90 days past due
22
69
More than 90 days past due
285
223
582
721
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 2021.
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 0.08% (2020: 0.11%), and therefore no expected credit
losses for trade receivables are registered as at 31 December 2021 (2020: €nil). The impairment loss of
€3k in 2020 is related to a debtor which went bankrupt, and therefore the balance receivable was
written-off.
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 changes in credit risk by tracking published annual financial
statements of the companies in which the Group holds its debt securities, together with any significant
changes in prices of such debt securities on the local stock exchange.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
91
29
Financial instruments – fair values and risk management (continued)
29.5
Credit risk (continued)
29.5.2
Investment in corporate debt securities (continued)
The Group concluded there was no significant change in credit risk on these financial assets due to the
COVID-19 pandemic, 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, being Malta. The rating of A, despite remaining unchanged from the previous year, was
lowered to BBB for the purpose of this assessment to reflect the uncertainty brought about by the
COVID situation, hence maintaining the probability of default used in calculating the ECLs to 0.06%
(December 2020: 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 €4k (2020: €4k). The movement in loss allowance is
charged to profit or loss under administrative expenses 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:
2021
2020
€000
€000
Country
Malta
(see note 19)
5,806
5,894
29.5.3
Amount due from related parties
29.5.3.1 Amount due from Parent Company
In the opinion of the directors, the credit risk on the loans to the Parent Company of €2,796k (December
2020: €2,954k) pledged in favour of Isbank’s subordinated loan to Cesme has experienced a significant
increase due to the ongoing political uncertainty in Turkey, the COVID-19 pandemic 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 (2020: 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 €74k (2020: €7k);
•
Best case- 20% weighting (2020: 25%)- 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 BB- emerging, resulting in a lifetime ECL of €10k (2020: €1k); and
•
Worst case- 30% weighting (2020: 25%)- 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 €44k (€22k).
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
92
29
Financial instruments – fair values and risk management (continued)
29.5
Credit risk (continued)
29.5.3
Amount due from related parties (continued)
29.5.3.1 Amount due from Parent Company (continued)
This totalled to a lifetime ECL of €128k (December 2020: €30k) (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 loss allowance on the other loans to Parent company of €3,250k (December 2020: €3,250k) has
been measured at 12-month ECL, which amounted to €2k (December 2020: €2k) and has been included
in that financial statement caption. The COVID-19 pandemic did not affect the ECLs on this loan due to
the healthy asset value, cash flow and jurisdiction in which the Parent company operates.
The exposure to credit risk for the loan to Parent company at amortised cost, net of expected credit
losses, at the reporting date by geographic region was as follows:
2021
2020
€000
€000
Country
Turkey (see note 20.2)
2,668
2,924
Guernsey (see note 20.3)
3,248
3,248
5,916
6,172
The following table shows the movement in lifetime ECLs (not credit-impaired) that has been
recognised for the amount due from the Parent company on the cash pledged with Isbank:
2021
2020
€000
€000
Opening balance at 1 January 2021
30
27
Movement during the year
98
3
Closing balance at 31 December 2021
128
30
29.5.3.2 Amount due from other Related Parties
Management does not expect to incur any losses on receivables from other related parties.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
93
29
Financial instruments – fair values and risk management (continued)
29.5
Credit risk (continued)
29.5.4
Cash and cash equivalents
The Group held cash and cash equivalents of €2,466k at 31 December 2021 (2020: €1,528k). 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) (2020: A-2).
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 2020: €1k). The difference in loss allowance, if any, is recognized under “Impairment loss
on financial asset” in the statement of profit or loss.
29.5.5
Guarantees and letters of financial support
As explained in note 20.2, the Company has pledged the amount due by the Company’s parent as
security for funds borrowed.
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.
The Company mitigated losses emanating from the COVID-19 pandemic by focusing on alternative
targets and strategies, such as identifying cost-cutting opportunities including but not limited to local
marketing events, which used to be held on a weekly basis, and which were halted to prevent local
transmission of the pandemic. Apart from the internal change in strategies, the Company also availed
and benefitted from the wage subsidy programs (see notes 6 and 11.1).
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
94
29
Financial instruments – fair values and risk management (continued)
29.6
Liquidity risk (continued)
The following are the contractual maturities of financial liabilities at the reporting date. The amounts are gross, undiscounted and include contractual interest
payments.
Carrying
amount
Contractual
cash flows
6 months
or less
6 - 12
months
1 - 5 years
Over 5
years
€000
€000
€000
€000
€000
€000
31 December 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)
31 December 2020
Financial liabilities
Debt securities in issue (see note 26.4)
14,713
(19,725)
(340)
(335)
(2,700)
(16,350)
Trade and other payables (see note 27)
527
(527)
(527)
-
-
-
Lease liabilities (see note 21.1.2)
6,173
(38,133)
(254)
(115)
(1,527)
(36,237)
21,413
(58,385)
(1,121)
(450)
(4,227)
(52,587)
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
95
29
Financial instruments – fair values and risk management (continued)
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
TKL 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 EUR/GBP spot-rate as at 31 December 2021 is 0.8403 (2020: 0.8990). A reasonably possible
strengthening/ (weakening) of the Euro against the GBP at 31 December would have affected the
measurement of financial instruments denominated in a foreign currency and affected equity and profit
or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest
rates, remain constant.
Profit or loss
Equity, net of tax
Strengthening
Weakening
Strengthening
Weakening
€000
€000
€000
€000
31 December 2021
EUR (10% movement)
(4)
5
(4)
5
31 December 2020
EUR (10% movement)
(6)
7
(6)
7
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 the Parent company range between
4% and 4.50%, with the rates on the cash pledged in favour of Isbank ranging from 0.05% to 1%. These
are, therefore, not subject to interest rate fluctuations.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
96
29
Financial instruments – fair values and risk management (continued)
29.7
Market risk (continued)
29.7.2
Interest rate risk (continued)
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, and the
Group does not designate derivatives (interest rate swaps) as hedging instruments under a fair value
hedge accounting model. 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 €240k/ (€222k) after tax (2020: €243k/ (€225k) after tax). This analysis assumes that all other
variables, in particular foreign currency exchange rates, remain constant.
29.7.2.1 Cash flow sensitivity analysis for floating rate instruments
The Group is exposed to cash flow interest rate risk on cash at bank carrying a floating interest rate
based on deposit rates. A decrease/ (increase) of 100 basis points in interest rates would have
increased/ (decreased) the amount by €25k/ (€16k) after tax (2020: €15k/ (€10k) after tax). This analysis
assumes that all other variables remain constant.
29.8
Market price risk
The Group’s exposure to market price risk relates mainly to changes in the value of property, plant and
equipment (“marina assets”). Marinas and marina related real estate are inherently difficult to value
due to the individual nature and particular characteristics of each property. As a result, professional
valuations are subject to uncertainty and there can be no assurance that estimates resulting from the
valuation process will reflect the actual sale price achievable in the marketplace.
The market value of the marina assets, including that which is held through the Company’s investment
in the joint venture (IC Cesme), may be affected by general economic conditions, including changes in
interest rates, inflation, and changes in the political and the economic climate.
Operating income and capital values may also be affected by other factors specific to the marina
industry such as competition from other marina owners, the perceptions of berth holders (and
prospective berth holders) of the attractiveness, convenience and safety of marinas, and increases in
operating costs such as labour, maintenance and insurance etc. The Directors monitor market value by
having annual valuations carried out by CBRE UK Ltd.
30
Commitments
No capital commitments were authorised and contracted for, or yet to be contracted for, at the
reporting date and at the end of the comparative period.
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
97
31
Related parties
31.1
Parent and ultimate controlling party
The Company is a subsidiary of Camper & Nicholsons Marina Investments Limited (“CNMIL”), the
registered office of which is situated at Bordage House, Le Bordage, St Peter Port Guernsey GY1 1BU.
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 2020: 99.57%). Both First Eastern (Holdings) Limited
and FE Marina Investments Limited are incorporated in Hong Kong. As of 18 April 2022, 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:
2021
2020
€000
€000
First Eastern (Holdings) Limited
Balance receivable at 1 January
-
-
Recharge of expenses (see note 22.1)
18
-
Cash received
(9)
-
Balance receivable at 31 December
9
-
Camper & Nicholsons Marinas Investments Limited
Principal in respect of Cesme Cash Collateral (see note 20.2)
2,954
2,950
Principal (received)/advanced during the year
(157)
4
Interest accrued at beginning of the year
133
251
Interest accrued during the year
4
23
Interest received during the year
(37)
(141)
Subtotal
2,897
3,087
Principal in respect of Loan Note 1 (see note 20.3)
400
400
Interest accrued during the year
16
16
Interest received during the year
(16)
(16)
Subtotal
400
400
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
98
31
Related parties (continued)
31.2
Related party relationships, transactions and balances (continued)
2021
2020
€000
€000
Camper & Nicholsons Marinas Investments Limited (continued)
Principal in respect of Loan Note 2 (see note 20.3)
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 20.3)
2,250
-
Principal advanced during the year
-
2,250
Interest accrued during the year
101
28
Interest received during the year
(101)
(28)
Subtotal
2,250
2,250
Balance receivable at 31 December
6,147
6,337
Balance receivable, excluding principal of €6,047k (2020: €6,204k)
at 31 December (see note 22.1)
100
133
Camper & Nicholsons Marinas Limited
Balance payable at 1 January
(34)
(88)
As per Marina Services Agreement:
Recruitment, operational service fees (2.5% of revenue subject to a
minimum fee of GBP18k per annum)
(90)
(101)
Sales and marketing fees (fixed fee of GBP3.2k per month)
(45)
(43)
Management, finance and other related services and expenses
(13)
(10)
Cash paid
137
208
Balance payable at 31 December (see note 27.1)
(45)
(34)
Camper & Nicholsons Marinas International Limited
Balance payable at 1 January
(53)
(54)
Royalty fees (1.5% of revenue excluding direct costs of utilities) as
per Trade Mark License Agreement
(48)
(53)
Cash paid
53
54
Balance payable at 31 December (see note 27.1)
(48)
(53)
Balance receivable at 1 January
500
-
Principal (received)/ advanced
(500)
500
Balance receivable at 31 December
-
500
Grand Harbour Marina p.l.c.
Notes to the financial statements
For the Year Ended 31 December 2021
99
31
Related parties (continued)
31.3
Transactions with key management personnel
Other than the remuneration payable to the directors, there were no other transactions with key
management personnel.
32
Subsequent events
From 1 January 2022 to 18 April 2022, the Group recognised an additional €3k of government grants to
wage subsidy programs related to January to March 2022 payroll expenses.
In February 2022, IC Cesme settled a maturing sub-loan of €1,225k through a cash payment of €225k,
with the balance being settled through part of the shareholder cash pledged against this sub-loan
(GHM’s 45% share being €450k). While the balance on this cash pledge was released by Isbank to the
shareholders (GHM’s 45% share: €101k), the said amount of shareholder cash pledge directed towards
the sub-loan settlement will be converted into a shareholder loan which terms are currently under
review. As such this will merely represent a reclassification of receivable at GHM level.
The geopolitical situation in Eastern Europe intensified in late February 2022, with the commencement
of Russia’s military action against Ukraine. Political events and sanctions are continually changing and
differ across the globe. There is currently no indication that there will be a significant impact on the
company’s and the Group’s financial performance, financial position and cash flows. The situation
continues to be closely monitored by management to ensure that the interests of all its stakeholders
are safeguarded.
33
Litigation and claims
The Company’s joint venture, IC Cesme, is disputing a claim and lawsuit by a former tenant of Cesme
Marina, Bolluca Turizm Gida San. ve Dis Tic.Ltd.Sti., which started a legal case against IC Cesme after its
contract was terminated in 2011 due to the lack of rental payments. The Board of Directors of IC Cesme,
having consulted the company’s Attorney, consider that the claim is not valid. The Izmir 3rd Basic
Commercial Court dismissed the case and the claimant made an appeal to the Izmir Regional Court of
Justice which was also rejected. A further case from the same claimant was rejected by the Izmir 3rd
Basic Commercial Court on 16 October 2020 and the related decision finalized on 30 June 2021.
Claimant made an appeal which is being investigated by the 6th Law Office of the Izmir Regional Court
as file name 2021/4150E.
Based on the advice received, the probability of an outflow of resources embodying economic resources
to settle the obligation is highly improbable. Nevertheless, in the unlikely event that IC Cesme lost the
lawsuit, it would result in a liability of €448k (2020: €730k) with the Group’s share being €202k (2020:
€329k).
IC Cesme was disputing a claim and lawsuit by the Izmir Tax Inspection Board that it had incorrectly
calculated the useful lives of certain assets and therefore the depreciation charge for the years between
2010 and 2013 resulting in a claim for payment of €99k tax, including a €60k penalty. The decision of
Izmir 4th Tax Court was annulled in favour of the Company. The Council of State also approved the
court's annulment decision, and the decision was finalized in favour of IC Cesme, which freed it of the
total risk of €100k. The case was closed in May 2020.
Deloitte Audit Limited is a limited liability company registered in Malta with registered office at Deloitte Place, Triq L-Intornjatur, Central Business District, CBD 3050
Malta. Deloitte Audit Limited forms part of the Deloitte Malta firm. The Deloitte Malta firm consists of (i) Deloitte, a civil partnership regulated in terms of the laws of
Malta, constituted between limited liability companies, operating at Deloitte Place, Triq L-Intornjatur, Central Business District, CBD 3050 Malta and (ii) the affiliated
operating entities: Deloitte Services Limited (C51320), Deloitte Digital & Technology Limited (C70308), Deloitte Digital Limited (C23487), Deloitte Technology
Limited (C36094), Deloitte Audit Limited (C51312) and Malta International Training Centre Limited (C5663), all limited liability companies registered in Malta with
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© 2021. For information, contact Deloitte Malta.
Independent auditor’s report
to the members of
Grand Harbour p.l.c.
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Grand Harbour Marina p.l.c. (the Company) and the consolidated
financial statements of the Company and its subsidiary (together, the Group), set out on pages 28 to 99, which
comprise the Statements of Financial Position of the Company and the Group as at 31 December 2021, and the
Statements of Profit or Loss and other Comprehensive Income, Statements of Changes in Equity and Statements of
Cash Flows of the Company and the Group for the year then ended, and notes to the financial statements, including
a summary of significant accounting policies.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of Grand
Harbour Marina p.lc. and the Group as at 31 December 2021, and of the Company’s and the Group’s financial
performance and cash flows for the year then ended in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union and have been properly prepared in accordance with the
requirements of the Companies Act (Cap. 386).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under
those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the Company and the Group in accordance with the International
Ethics Standards Board for Accountants’
International Code of Ethics for Professional Accountants including
International Independence Standards
(IESBA Code) together with the
Accountancy Profession (Code of Ethics for
Warrant Holders) Directive
(Maltese Code) that are relevant to our audit of the financial statements in Malta, and
we have fulfilled our other ethical responsibilities in accordance with the IESBA Code and the Maltese Code. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. In
conducting our audit, we have remained independent of the Company and the Group and have not provided any of
the non-audit services prohibited by article 18A(1) of the Accountancy Profession Act (Cap. 281).
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified. The key audit matter described below pertains to
the audit of both the individual and the consolidated financial statements. This matter was 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 this matter.
Deloitte Audit Limited
Deloitte Place,
Triq L-Intornjatur,
Central Business District,
CBD 3050
Malta
Tel: +356 2343 2000, 2134 5000
Fax: +356 2133 2606
info@deloitte.com.mt
Company Ref No: C51312
VAT Reg No: MT2013 6121
Exemption number: EXO2155
101
Independent auditor’s report (continued)
to the members of
Grand Harbour p.l.c.
Report on the Audit of the Financial Statements (continued)
Key Audit Matters (continued)
Recoverability of the investment in joint venture
Under IFRSs, at each reporting date, the Company and Group are required to review the carrying amounts of its
non-financial assets to determine whether there are any indications of impairment. If any such indications exist,
then the asset’s recoverable amount is determined. An impairment loss is the amount by which the carrying
amount of the investment exceeds its recoverable amount.
As at 31 December 2020, the carrying amount of the investment in joint venture amounted to EUR2,174k in the
individual financial statements of the Company, and EUR714k in the consolidated financial statements. The risks
associated with the jurisdiction where the joint venture is established constituted a triggering event in terms of IAS
36
Impairment Assets
as at 31 December 2021. The directors have tested the investment to determine whether the
recoverable amount is at least equal to its carrying amount.
Significant judgement is involved in determining the recoverable amount of this investment, primarily as that
evaluation includes the assessment of key assumptions underlying the recoverable amount, namely, in relation to
the budgeted EBITDA, the capitalisation rate, the weighted average cost of capital and the exit yield applied, as
explained in note 18.4 to the financial statements, which are effected by expected future market or economic
conditions and are therefore subject to estimation uncertainty.
Our audit procedures included:
•
Using an internal valuation expert to assist us in evaluating the year end impairment methodology
and the
key assumptions and inputs used by the Company and Group for this purpose;
•
Performing sensitivity analysis of the impairment testing calculations in key inputs;
•
Reviewing the impairment testing calculations for reasonability, mathematical accuracy and consistency.
We also focused on the adequacy of the Company’s and Group’s disclosures included in note 18 to the financial
statements about those assumptions to which the outcome of the impairment test is most sensitive, that is, those
that have the most significant effect on the determination of the recoverable amount of the investment in joint
venture.
The Company’s and the Group’s disclosures about the recoverability of the investment in joint venture are set out
in Note 18 to the financial statements, which explains that the directors have assessed that the estimated
recoverable amount of the investment in joint venture’s net assets, exceeds its carrying amount at both Group and
Company level.
Other Information
The directors are responsible for the other information. The other information comprises the Chairman’s
Statement, the Directors’ Report, the Statement of the Directors on the Financial Statements and Other
information included in the Annual Report, Directors’ Statement of Compliance with the Code of Principles of Good
Corporate Governance, Other Disclosures in the Capital Market Rules, and the Remuneration Report required
under Rule 12.26K of the Capital Markets Rules, which we obtained prior to the date of this auditor’s report.
However, the other information does not include the individual and consolidated financial statements, our
auditor’s report and the relevant tagging applied in accordance with the requirements of the European Single
Electronic Format, as defined in our
Report on Other Legal and Regulatory Requirements
.
Except for our opinions on the Directors’ Report in accordance with the Companies Act (Cap. 386) and on the
Directors’ Statement of Compliance with the Code of Principles of Good Corporate Governance and on the
Remuneration Report in accordance with the Capital Markets Rules issued by the Malta Financial Services
Authority, our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
102
Independent auditor’s report (continued)
to the members of
Grand Harbour p.l.c.
Report on the Audit of the Financial Statements (continued)
Other information (continued)
With respect to the Directors’ Report, we also considered whether the Directors’ Report includes the disclosure
requirements of article 177 of the Companies Act (Cap. 386), and the statement required by Rule 5.62 of the Capital
Markets Rules on the Company’s and the Group’s ability to continue as a going concern.
In accordance with the requirements of sub-article 179(3) of the Companies Act (Cap. 386) in relation to the
Directors’ Report on pages 5 to 10, in our opinion, based on the work undertaken in the course of the audit:
•
the information given in the Directors’ Report for the financial year for which the financial statements are
prepared is consistent with those financial statements; and
•
the Directors’ Report has been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company, the Group and their environment obtained in the
course of the audit, we have not identified any material misstatements in the Directors’ Report.
Responsibilities of the Directors and the Audit Committee for the Financial Statements
As explained more fully in the Statement of Directors’ Responsibilities on page 11, the directors are responsible for
the preparation of financial statements that give a true and fair view in accordance with IFRSs as adopted by the
European Union and the requirements of the Companies Act (Cap. 386), and for such internal control as they
determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company’s and the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Company and/or the Group or
to cease operations, or have no realistic alternative but to do so.
The directors have delegated the responsibility for overseeing the Company’s and the Group’s financial reporting
process to the Audit Committee.
Auditor’s Responsibilities for the Audit of the Financial Statements
This report, including the opinions set out herein, has been prepared for the Company’s members as a body in
accordance with articles 179, 179A and 179B of the Companies Act (Cap. 386).
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions in
accordance with articles 179, 179A and 179B of the Companies Act (Cap. 386). Reasonable assurance is a high level
of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
In terms of article 179A(4) of the Companies Act (Cap. 386), the scope of our audit does not include assurance on
the future viability of the Company and the Group or on the efficiency or effectiveness with which the directors
have conducted or will conduct the affairs of the Company and the Group. The financial position of the Company
and/or the Group may improve, deteriorate, or otherwise be subject to change as a consequence of decisions
taken, or to be taken, by the management thereof, or may be impacted by events occurring after the date of this
opinion, including, but not limited to, events of force majeure.
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Independent auditor’s report (continued)
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Report on the Audit of the Financial Statements (continued)
Auditor’s Responsibilities for the Audit of the Financial Statements (continued)
As such, our audit report on the Company’s and the Group’s historical financial statements is not intended to
facilitate or enable, nor is it suitable for, reliance by any person, in the creation of any projections or predictions,
with respect to the future financial health and viability of the Company and/or the Group, and cannot therefore be
utilised or relied upon for the purpose of decisions regarding investment in, or otherwise dealing with (including but
not limited to the extension of credit), the Company and/or the Group. Any decision-making in this respect should
be formulated on the basis of a separate analysis, specifically intended to evaluate the prospects of the Company
and/or the Group and to identify any facts or circumstances that may be materially relevant thereto.
As part of an audit in accordance with ISAs, we exercise professional judgment 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 and the Group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
•
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s and the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company and/or the Group to cease to continue as a
going concern. Accordingly, in terms of generally accepted auditing standards, the absence of any
reference to a material uncertainty about the Company’s and/or the Group’s ability to continue as a going
concern in our auditor’s report should not be viewed as a guarantee as to the Company’s and/or the
Group’s ability to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
•
Obtain sufficient appropriate audit evidence regarding the financial information of the Companies or
business activities within the Group to express an opinion on the consolidated financial statements. We
are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
For the avoidance of doubt, any conclusions concerning the adequacy of the capital structure of the Company,
including the formulation of a view as to the manner in which financial risk is distributed between shareholders
and/or creditors cannot be reached on the basis of these financial statements alone and must necessarily be based
on a broader analysis supported by additional information.
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Independent auditor’s report (continued)
to the members of
Grand Harbour p.l.c.
Report on the Audit of the Financial Statements (continued)
Auditor’s Responsibilities for the Audit of the Financial Statements (continued)
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Audit Committee, we determine those matters that were of most
significance in the audit of the individual and consolidated financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
Report on compliance of the Annual Financial Report with the requirements of the European Single Electronic
Format Regulatory Technical Standard as specified in the Commission Delegated Regulation (EU) 2019/815 (the
"ESEF RTS”)
Pursuant to Capital Markets Rule 5.55.6 issued by the Malta Financial Services Authority, we have undertaken a
reasonable assurance engagement in accordance with the requirements of the
Accountancy Profession (European
Single Electronic Format) Assurance Directive
issued by the Accountancy Board in terms of the Accountancy
Profession Act (Cap. 281), hereinafter referred to as the “ESEF Directive 6”, on the annual financial report of the
Company and the Group for the year ended 31 December 2021, prepared in a single electronic reporting format.
Solely for the purposes of our reasonable assurance report on the compliance of the annual financial report with
the requirements of the ESEF RTS, the “Annual Financial Report” comprises the Directors’ Report, the Statement of
Directors’ responsibilities, the Directors’ Statement of Compliance with the Code of Principles of Good Corporate
Governance , the annual financial statements, the prescribed disclosures of material contracts, General Company
Information, and the Independent auditor’s report, as set out in Capital Markets Rules 5.55.
Responsibilities of the Directors for the Annual Financial Report
The directors are responsible for:
•
the preparation and publication of the Annual Financial Report, including the consolidated financial statements
and the relevant tagging requirements therein, as required by Capital Markets Rule 5.56A, in accordance with
the requirements of the ESEF RTS,
•
designing, implementing, and maintaining internal controls relevant to the preparation of the Annual Financial
Report that is free from material non-compliance with the requirements of the ESEF RTS, whether due to fraud
or error,
and consequently, for ensuring the accurate transfer of the information in the Annual Financial Report into a single
electronic reporting format.
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Independent auditor’s report (continued)
to the members of
Grand Harbour p.l.c.
Report on Other Legal and Regulatory Requirements (continued)
Report on compliance of the Annual Financial Report with the requirements of the European Single Electronic
Format Regulatory Technical Standard as specified in the Commission Delegated Regulation (EU) 2019/815 (the
"ESEF RTS”) (continued)
Auditor’s responsibilities for the Reasonable Assurance Engagement
Our responsibility is to obtain reasonable assurance about whether the Annual Financial Report, including the
consolidated financial statements and the relevant electronic tags therein comply, in all material respects, with the
ESEF RTS, based on the evidence we have obtained. We conducted our reasonable assurance engagement in
accordance with the requirements of ESEF Directive 6.
The nature, timing and extent of procedures we performed, including the assessment of the risks of material non-
compliance with the requirements of the ESEF RTS, whether due to fraud or error, were based on our professional
judgement and included:
•
Obtaining an understanding of the Company’s and the Group’s internal controls relevant to the financial
reporting process, including the preparation of the Annual Financial Report, in accordance with the
requirements of the ESEF RTS, but not for the purpose of expressing an assurance opinion on the effectiveness
of these controls.
•
Obtaining the Annual Financial Report and performing validations to determine whether the Annual Financial
Report has been prepared in accordance with the requirements of the technical specifications of the ESEF RTS.
•
Examining the information in the Annual Financial Report to determine whether all the required tags therein
have been applied and evaluating the appropriateness, in all material respects, of the use of such tags in
accordance with the requirements of the ESEF RTS.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our reasonable
assurance opinion.
Reasonable Assurance Opinion
In our opinion, the Annual Financial Report for the year ended 31 December 2021 has been prepared, in all material
respects, in accordance with the requirements of the ESEF RTS.
This reasonable assurance opinion only covers the transfer of the information in Annual Financial Report into a
single electronic reporting format as required by the ESEF RTS, and therefore does not cover the information
contained in the Annual Financial Report.
Report on Corporate Governance Statement of Compliance
Pursuant to Rule 5.94 of the Capital Markets Rules issued by the Malta Financial Services Authority, the directors
are required to include in the Company’s Annual Financial Report a Directors’ Statement of Compliance with the
Code of Principles of Good Corporate Governance explaining the extent to which they have adopted the Code of
Principles of Good Corporate Governance set out in Appendix 5.1 to Chapter 5 of the Capital Markets Rules, and the
effective measures that they have taken to ensure compliance with those principles.
The Directors’ Statement of
Compliance with the Code of Principles of Good Corporate Governance is to contain at least the information set out
in Rule 5.97 of the Capital Markets Rules.
Our responsibility is laid down by Rule 5.98 of the Capital Markets Rules, which requires us to include a report to
shareholders on the Directors’ Statement of Compliance with the Code of Principles of Good Corporate Governance
in the Company’s Annual Financial Report.
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Independent auditor’s report (continued)
to the members of
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Report on Corporate Governance Statement of Compliance (continued)
We read the Directors’ Statement of Compliance with the Code of Principles of Good Corporate Governance and
consider the implications for our report if we become aware of any information therein that is materially
inconsistent with the financial statements or our knowledge obtained in the audit, or that otherwise appears to be
materially misstated.
We also review whether the Directors’ Statement of Compliance with the Code of Principles
of Good Corporate Governance contains at least the information set out in Rule 5.97 of the Capital Markets Rules.
We are not required to, and we do not, consider whether the directors’ statements on internal control cover all
risks and controls, or form an opinion on the effectiveness of the Company’s corporate governance procedures or
its risk and control procedures.
In our opinion, the Directors’ Statement of Compliance with the Code of Principles of Good Corporate Governance
set out on pages 12 to 22 has been properly prepared in accordance with the requirements of Rules 5.94 and 5.97
of the Capital Markets Rules.
Report on Remuneration Report
Pursuant to Rule 12.26K of the Capital Markets Rules issued by the Malta Financial Services Authority, the directors
are required to draw up a Remuneration Report, whose contents are to be in line with the requirements listed in
Appendix 12.1 to Chapter 12 of the Capital Markets Rules.
Our responsibility is laid down by Rule 12.26N of the Capital Markets Rules, which requires us to check that the
information that needs to be provided in the Remuneration Report, as required in terms of Chapter 12 of the
Capital Markets Rules, including Appendix 12.1, has been included.
In our opinion, the Remuneration Report set out on pages 25 to 27 includes the information that needs to be
provided in the Remuneration Report in terms of the Capital Markets Rules.
Matters on which we are required to report by exception under the Companies Act
Under the Companies Act (Cap. 386), we have responsibilities to report to you if in our opinion:
•
Proper accounting records have not been kept;
•
Proper returns adequate for our audit have not been received from branches not visited by us;
•
The financial statements are not in agreement with the accounting records and returns; or
•
We have been unable to obtain all the information and explanations which, to the best of our knowledge
and belief, are necessary for the purpose of our audit.
We have nothing to report to you in respect of these responsibilities.
Auditor tenure
We were first appointed by the members of the Company to act as statutory auditor of the Company and the
Group for the financial year ended 31 December 2021. The period of total uninterrupted engagement as statutory
auditor since the Company became a public interest entity including previous reappointments of the firm is 1
financial year.
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Independent auditor’s report (continued)
to the members of
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Consistency of the audit report with the additional report to the Audit Committee
Our audit opinion is consistent with the additional report to the Audit Committee in accordance with the provisions
of Article 11 of the EU Audit Regulation No. 537/2014.
The audit report was drawn up on 18 April 2022 and signed by:
Antoine Carabott as Director
in the name and on behalf of
Deloitte Audit Limited
Registered auditor
Central Business District, Birkirkara, Malta
Explanation of change in name of reporting entity or other means of identification from end of preceding reporting period -