Company Registration No.:
C 27835
QAWRA PALACE P.L.C.
(FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report
and
Financial Statements
31 March 2023
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
CONTENTS
Page
General information
2
Directors' report
3 - 7
Statement of compliance with the principles of good corporate governance
8 - 12
Statement of comprehensive income
13
Statement of financial position
14
Statement of changes in equity
15
Statement of cash flows
16
Notes to the financial statements
17 - 35
Independent auditors' report
36 - 42
1
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
GENERAL INFORMATION
Registration
Qawra  Palace  p.l.c.
(formerly known  as  Mallard  Properties  Limited)  is  registered  in  Malta  as  a  public  limited
liability company under the Companies Act, (Cap. 386). The Company’s registration number is
C 27835
.
Directors
Edward Vella
Esther Vella
Victor Vella
Robert Ancilleri
(appointed on 14 November 2022)
Stephen Muscat (appointed on 14 November 2022)
Paul Muscat (appointed on 14 November 2022)
Company secretary
Jason Azzopardi (resigned on 24 October 2022)
Luca Vella
(appointed on 24 October 2022)
Registered office
Qawra Palace p.l.c.,
Qawra Palace Hotel,
Coast Road
St. Paul's Bay SPB 1902
Malta
Bankers
Bank of Valletta p.l.c.
58, Zachary Street
Valletta VLT 1130
Malta
Auditors
RSM Malta
Mdina Road
Zebbug
ZBG 9015
Malta
2
 
QAWRA PALACE P.L.C.
(FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
DIRECTORS' REPORT
The
Directors
present their
annual report and the audited financial statements of Qawra Palace p.l.c. (formerly
known as Mallard Properties Limited) ("the Company") for the
year
ended
31 March 2023
.
Principal activity
The  Company is  a  property holding  company whose  principal  objects  are  as  set  out  in  clause  four  (4)  of  its
Memorandum of Association – namely, to carry on the business of a property holding company and to construct,
maintain,  alter,  equip  or  convert  any buildings  or  amenities  as  may  be  required  in  connection  with  the
establishment of a hotel and/or tourist or leisure centre. The Company owns the Qawra Palace Hotel located on
the Qawra promenade.
Given that the Company is not a trading company, it is economically dependent on  the income it derives from
Mallard  Co.  Ltd.  (C  4758),  a  related  company ("Mallard"),  the  entity entrusted  with  the  management  and
operation of the Qawra Palace Hotel. The company gave monies on-lent to Mallard Co. Ltd. from the proceeds
of the Bond Issue (as described below and detailed in the Prospectus).
In March 2023, the Company raised €25 million from a public bond issue; specifically, the issue by the Company
of €25 million worth of 5.25% secured bonds 2033 (the “Bond Issue”) with a nominal value of €100 per bond and
issued at  par (the “Bonds”)  in terms of a prospectus dated 20  December 2022 (the “Prospectus”). The Bonds
were admitted to listing on the Official List of the Malta Stock Exchange with effect from 8 February 2023.
The bond subscriptions closed in March 2023 with the bonds being fully subscribed. The proceeds of the Bond
Issue are being utilised in line with the Prospectus dated 20 December 2022, with €16.4 million repaying existing
bank loans,  €6.7 million to  be passed on  by way of loan to  Mallard  Co. Ltd. to upgrade the existing hotel and
develop new amenities and catering outlets within the complex and  the remaining portion  of €1.9 million to be
allocated for general corporate funding purposes.
Review of the business
The  Company’s  total  assets  as  at  31  March  2023  stood  at  €85,073,068  (2022:  €50,935,777).  The  Company
reported  a  profit  before  tax  of
€21,328,281
for  the
year
ended
31  March  2023
(
2022
:
profit
before  tax
€2,155,751
). This was attributable to the revaluation of the property which has been recognised in the statement
of comprehensive income, resulting in a gain in fair value amounting to €21,529,971 (2022: €2,496,939).
Results and dividends
The  statement  of  comprehensive  income  is  set  out  on  page  13  below.  The  directors  do  not  recommend  the
payment of a  final  dividend  and  propose  that  the  balance  of  retained  earnings  of  the  Company amounting to
€51,335,740 (2022: €32,160,456) be carried forward to the next financial year.
Corporate social responsibility
As part of the Company's values, the  Board of Directors ("the Board") is committed to protect the surrounding
communities  and  environment.  The  Board  exercises  the  necessary oversights  to  ensure  that  Mallard  adopts
strategies  to  operate  in  a  responsible  manner.  The  board  is  committed  to  help  the  environment  by reducing
emission of gases, scaling up investment in low-carbon solutions and taking different initiatives to save energy.
3
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
DIRECTORS' REPORT
- continued
Corporate social responsibility - continued
The Board makes sure  that  the  related  company which  operates the Hotel and  from which  income is derived
adopts  rigorous  policies  and  procedures  that  ensure  adherence  to  the  various  rules  and  regulations.  It
complements  this  with  different  training  schemes  to  the  staff.  The  Company is  constatntly assured  that  all
members of staff of Mallard are up to date with latest developments and constantly prepare for regular visits and
audits that are carried out periodically to verify that the Hotel remains eco-compliant.
The Company is focused and  committed to  invest in  activities that preserve, protect and enhance nature over
the long-term. The Board continuously encourages all members forming part of Mallard to embrace this way of
life. The Board also supports initiatives such as the annual clean-up of the Qawra Coast area and encourages
staff  to  join  the  Company and  its  related  company in  their  activities  that  contribute  towards  the  well-being  of
society at large.
Principal risks and uncertainties
The  Company is  mainly dependent  on  the  operations  of  its  related  company,  Mallard  Co.  Ltd,  to  whom the
Company leases the hotel. The Qawra Palace Hotel is undergoing a major refurbishment and extension project
which is being carried out by the related company. The timely completion of this project is dependent on various
external  factors  and  third-party contractors.  Such  a  project  is  subject  to  a  number  of  specific  risks  including
delays, cost overruns and the inability to source adequate resources to complete the project. The full list of key
risks listed in the prospectus are still applicable.
Apart  from  the  above,  the  Company is  subject  to  various  other  risks  such  as  market,  economic,  credit  and
liquidity risks. The directors are confident that the Company has the right framework and the appropriate policies
and  procedures  in  place  to  mitigate  the  effects  that  the  aforementioned  risks  might  have  on  the  business.
Further information on financial risks is disclosed in Note 22 to the financial statements.
Events after the end of reporting period
No significant events have occurred after the end of the reporting period which require mention in this report.
Future developments
The
Company
is expected to earn rental income from its related company starting April 2023.
Outlook for 2024
The  Company is  optimistic  about  the  future  and  is  reassured  by the  fact  that  Mallard  is  on  track  with  the
projected results. This augurs well in ensuring that Mallard honours its financing and other commitments when
due.
The hotel opened its doors for business on 1 June 2023 selling slightly above 50% of the rooms available in its
first two weeks of operation and 400 rooms up till the end of June. Mallard is in an advanced phase of opening
another 100 rooms out of the remaining 171 rooms. These rooms should open for business and receive guests
on  1  August  2023.  Season  up  to  now  appears  buoyant  with  brisk  demand  and  room  rates  obtained  are
marginally higher than originally projected. Against this positive backdrop, the Company is ensured that Mallard
is doing its utmost to control costs particularly where salaries and food cost are concerned. Mallard has taken
various  initiatives  in  the  energy sector  including  the  installation  of  a  second  RO  plant,  state  of  the  art  air-
conditions and air handling units and kitchen equipment with newer energy saving models.
4
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
DIRECTORS' REPORT
- continued
Outlook for 2024 - continued
In order to control energy usage/wasted all of this equipment is controlled via BMS and RMS systems.
The Board is very optimistic  that in spite  of not meeting the target opening date of mid-April. Mallard shall still
manage to reach the financial targets set for the year ending 31 March 2024.
Disclosure of material contracts
The following contracts of a material nature have been entered into by the Company:
 Lease agreement with Mallard which will continue generating income as from 1 April 2023;
 BOV loans which were fully paid as of 31 March 2023; and
 Loan facility agreement with Mallard.
Company secretary and registered office
During the year ended 31 March 2023, Mr Jason Azzopardi served as company secretary and resigned from this
post  on  24  October  2022.  On  the  same  date,  Mr  Luca  Vella  was  appointed  as  company secretary.  The
Company's  registered  office  is  at
Qawra  Palace  p.l.c.,
Qawra  Palace  Hotel,
Coast  Road,
St.  Paul's  Bay SPB
1902, Malta.
Directors
The
Directors
who held office during the year under review were:
 Mr Edward Vella - Executive and Managing Director
 Ms Esther Vella - Executive Director
 Mr Victor Vella - Executive Director
 Mr Robert Ancilleri - Independent Non-Executive Director
 Mr Stephen Muscat - Independent Non-Executive Director
 Mr Paul Muscat - Independent Non-Executive Director
In  accordance  with  the
Company
’s  Memorandum  and  Articles  of  Association,  all  directors  except  for  the
Managing Director, shall retire from office at least once every three years, but shall be eligible for re-election.
Statement of
directors'
responsibilities
The  Directors  are  required  by the  Companies  Act  (Chapter  386  of  the  laws  of  Malta)  to  prepare  financial
statements which give a true and fair view of the state of affairs of the Company as at the end of each reporting
period and of the profit or loss for that period.
In preparing the financial statements, the
Directors
are
responsible for:
 ensuring  that  the  financial  statements  have  been  drawn  up  in  accordance  with  International  Financial
Reporting Standards as adopted by the EU;
 selecting and applying appropriate accounting policies;
 making accounting estimates and judgements that are reasonable in the circumstances;
 value separately the components of asset and liability items;
 report comparative figures corresponding to those of the preceeding accounting period; and
5
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
DIRECTORS' REPORT
- continued
Statement of
directors'
responsibilities - continued
In preparing the financial statements, the
Directors
are
responsible for - continued
 ensuring that the financial statements are prepared on the going concern basis unless it is inappropriate to
presume that the Company will continue in business as a going concern.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at
any time,  the  financial  position  of  the  Company and  to  enable  the  Directors  to  ensure  that  the  financial
statements comply with the Companies Act (Cap. 386). This responsibility includes designing, implementing and
maintaining  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,  and  that  comply with  the
Companies  Act.  They are  also  responsible  for  safeguarding  the  assets of the  Company and  hence  for  taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The financial statements of Qawra Palace p.l.c. (formerly known as Mallard Properties Limited) for the financial
year ended 31 March 2023 are included in the Annual Financial Report 2023, which will be made available on
the Company’s website. The directors are responsible for the maintenance and integrity of the Annual Financial
Report  on  the  website  in  view  of  their  responsibility for  the  controls  over,  and  the  security of,  the  website.
Access  to  information  published  on  the  Company’s  website  is  available  in  other  countries  and  jurisdictions,
where  legislation  governing  the  preparation  and  dissemination  of  financial  statements  may  differ  from
requirements or practice in Malta.
Statement by directors on the financial statements and other information included in the report
The directors confirm that, to the best of their knowledge:
 the financial  statements give a  true and fair  view of  the financial position  of the  Company as at 31 March
2023,  and  of  its  financial  performance  and  its  cash  flows  for  the  period  then  ended  in  accordance  with
International Financial Reporting Standards as adopted by the European Union and with the Companies Act
(Cap. 386); and
 the  annual  report  includes  a  fair  review  of  the  development  and  performance  of  the  business  and  the
position  of  the  Company,  together  with  a  description  of  the  principal  risks  and  uncertainties  that  the
Company faces.
Going concern statement pursuant to Capital Markets Rule 5.62
The Company has not generated revenue from rent during the financial year under review as the Company and
the related company agreed that no rent shall be charged for a period of three years ending 31 March 2023 in
view  of  the  effects  of  the  Covid-19.  As  a result, the Company registered an  operating  loss  of  €70,967 (2022:
€6,870). Mallard started paying interest on the loans advanced to it by the Company as from December 2022.
The losses incurred by the Company and the short-term cash flow requirements have been financed initially by
bank borrowings and  later, by the funds raised through the Bond issue. As explained in the ‘Outlook for 2024’
section of this report, the Company’s results for the year ending 31 March 2024 are expected to be positive, in
view that the  Company will start  earning rental  income given that  the hotel  operations have resumed,  and the
indications of its performance are good.
After making enquires and having taken into consideration the future plans of the Company, the directors have
reasonable expectation that  the Company has adequate resources to continue in operational existence for the
foreseeable  future.  For  this  reason,  they continue  to  adopt  the  going  concern  basis  in  the  preparation  of  the
financial statements.
6
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
DIRECTORS' REPORT
- continued
Structure of capital
The  Company has  an  authorised  and  issued  share  capital  of  1,000,000  ordinary shares  of  €2.329373  each
which  are  fully paid  up  with  a  nominal  value  of  €2.329373  each.  The  Company has  three  shareholders  with
shares held as summarised below:
Angelo Holdings Ltd - 45%
Charella Company Limited - 43%
Edoardo Company Limited - 12%
All ordinary shares are entitled to attend and vote at General meetings, whereupon each ordinary share shall be
entitled to one vote.  The ordinary shares in the Company shall rank pari passu for all intents and purposes at
law.  There  are  currently no  different  classes  of  ordinary shares  in  the  Company and  accordingly all  ordinary
shares  have  the  same  rights,  voting  rights  and  entitlements  in  connection  with  any distribution  whether  of
dividends or capital. There are no restrictions in the transfer of shares.
Subject to the Maltese Companies Act (Cap. 386), the Company may purchase its own equity securities.
Auditors
RSM Malta
,
Registered Auditors
,
have indicated their
willingness to continue in office and a resolution for their
re-appointment will be proposed at the Annual General Meeting.
Signed  on  behalf  of  the  Board  of  Directors  on  28  July 2023  by Edward  Vella  (Director)  and  Robert  Ancilleri
(Chairman) as per the Directors' Declaration on ESEF Annual Financial Report submitted in conjunction with the
Annual Financial Report.
7
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
STATEMENT OF COMPLIANCE WITH THE PRINCIPLES OF GOOD CORPORATE GOVERNANCE
Introduction
Qawra Palace p.l.c. (formerly known as Mallard Properties Limited) (the “Company”) is committed to observing
the  principles  of  transparency and  responsible  corporate  governance.  The  Board  considers  compliance  with
corporate governance principles to constitute an important means of maintaining the confidence of present and
future  shareholders,  bondholders,  creditors,  employees,  business  partners  and  the  general  public,  amongst
other  stakeholders.  Pursuant  to  the  requirements  of  the  Capital  Markets  Rules  issued  by the  Malta  Financial
Services  Authority, the  Company hereby reports  on  how  it  has  complied  with  the  Code  of  Principles  of  Good
Corporate  Governance  (the  “Code’’)  contained  in  Appendix  5.1  of  the  Capital  Markets  Rules  for  the  financial
period ended 31 March 2023, which report details the extent to which the Code has been adopted, as well as the
effective measures taken by the Company to ensure compliance with these Principles.
The  Board  recognises  that,  in  virtue  of  Capital  Markets  Rule  5.101,  the  Company is  exempt  from  the
requirement to disclose the information prescribed by Capital Markets Rules 5.97.1 to 5.97.3, 5.97.6 and 5.97.8.
Compliance with the Code
Principles 1 and 4 - The Board of Directors and its responsibilities
The  Board  is  responsible  for  overseeing  the  Company’s  strategic  planning  process,  as  well  as  reviewing  and
monitoring management’s execution of the corporate and business plans. The Board delegates certain powers,
authorities  and  discretions  to the Audit Committee, as  duly constituted  in  terms  of  the  Capital  Markets Rules.
The  role  and  competence  of  such  committee  are  regulated  in  furtherance  of  Terms  of  Reference  duly
implemented for the purpose and as further described hereunder.
The  Board  of  Directors  has  a  composition  that  ensures  that  the  Company is  led  by individuals  who  have  the
necessary skills and diversity of knowledge relative to the Company’s business. It considers strategic issues, key
projects and regularly monitors performance against delivery of the key targets of the annual strategic plans and
forecasts.
In fulfilling its mandate, the Board assumes responsibility for:
 reviewing  the  Company’s  strategy on  an  on-going  basis,  as  well  as  setting  the  appropriate  business
objectives;
 reviewing the effectiveness of the Company’s system of internal controls;
 implementing  an  appropriate  organisational  structure  for  planning,  executing,  controlling  and  monitoring
business operations in order to achieve the Company’s objectives;
 identifying and ensuring that significant risks are managed satisfactorily; and
 ensuring that Company policies are being rigorously observed.
Principle 2 - Chairman and Managing Director
The  roles  of  the  Chairman  and  Managing  Director  are  occupied  by separate  individuals,  whereby Mr  Edward
Vella, an executive director and joint founder of the Company, carries out the role of Managing Director, while Mr
Robert Ancilleri, an independent, non-executive director, acts as Chairman of the Board.
8
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
STATEMENT OF COMPLIANCE WITH THE PRINCIPLES OF GOOD CORPORATE GOVERNANCE -
continued
Compliance with the Code - continued
Principle 2 - Chairman and Managing Director - continued
The Chairman is responsible to lead the Board and set its agenda. The Chairman ensures that the Board is in
receipt of precise, timely and objective information, encourages active engagement by all members of the Board
for discussion and ensures effective communication with shareholders.
Principle 3 – Composition of the Board
The Memorandum of Association of the Company provides that the business and affairs of the Company shall
be managed and administered by a Board of not less than two (2) and not more than ten (10) Directors. Every
member of the Company holding at least ten percent (10%) of the Ordinary shares in the Company shall have
the right to appoint a Director to the Board. The remaining members of the Board shall be appointed by means
of an ordinary resolution taken in a general meeting.
As  at  the  date  of  this  statement  and  during  the  reporting  period  under  review,  the  Board  of  the  Company is
composed  of  the  six  (6)  individuals  listed  below,  who  are  collectively responsible  for  the  overall  direction  and
management of the Company. The Board currently consists of three (3) executive Directors, who are entrusted
with  the  Company’s  day-to-day management,  and  three  (3)  non-executive  Directors,  all  of  whom are  also
independent of the Company, whose main functions are to monitor the operations of the executive Directors and
their performance, as well as to review any proposals tabled by the executive Directors.
Executive Directors:
Edward Vella
Esther Vella
Victor Vella
Independent, non-executive Directors:
Robert Ancilleri - Chairman
Stephen Muscat
Paul Muscat
Luca Vella acts as company secretary to the Board of Directors, as well as secretary to the Audit Committee.
In  compliance  with  the  Capital  Markets  Rules,  the  Board  considers  that  the  independent,  non-executive
Directors  are  independent  of  management  and  free  from any significant business,  family or  other  relationship
with the Company, its controlling shareholders or its management that could materially interfere with the exercise
of their independent judgment. In assessing the independence of the independent, non-executive Directors, due
notice has been taken of Capital Markets Rule 5.119. The composition of the Board has a balance of knowledge
and  experience,  as  well  as  a  strong  non-executive  presence,  to  allow  continued  scrutiny of  performance,
strategy and governance.
Principle 5 – Board Meetings
Meetings  of  the  Board  are  held  as  frequently as  considered  necessary,  with  a  minimum of four  (4)  meetings
being  held  annually – since  the  listing  of  the  €25  million  worth  of  5.25%  secured  bonds  2033  issued  by the
Company, effective on 8 February 2023, up to the end of the reporting period, the Board met two (2) times, with
a  100%  attendance  of  the  directors  at  all  of  these  meetings. The  Board  members are notified  of  forthcoming
meetings at least  seven  (7) days before the said meeting. In addition, the notification includes the issue of an
agenda  and  any supporting  documentation  as  necessary,  in  order  to  ensure  that  all  meetings are  of  a  highly
effective  nature  and  all  participants  are  well  informed  and  able  to  effectively contribute  to  Board  decisions.
Attendance with regards to Board meetings is recorded in the minutes of the meetings. Minutes of all Board and
Audit Committee meetings are circulated to all members and kept on file by the Company Secretary.
9
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
STATEMENT  OF  COMPLIANCE  WITH  THE  PRINCIPLES  OF  GOOD  CORPORATE GOVERNANCE  -
continued
Compliance with the Code - continued
Principle 5 – Board Meetings - continued
Board and Audit Committee meetings are attended by both the Chief Executive Officer, Mr Carmel Pullicino, and
the Financial Controller, Mr Jason Azzopardi, in order for the Board of the Company to have direct access to the
financial operation and results of the Company. This is also intended to ensure that the policies and strategies
adopted by the Board are effectively implemented by the finance team and senior management.
The Board is headed by the Chairman, Mr Robert Ancilleri.
All  executive  Directors have more  than 20 years work experience at the  Company, whereas the  independent,
non-executive Directors have relevant experience related to the business in which the Company operates. The
remuneration of the Directors is reviewed periodically by the shareholders of the Company.
All Directors of the Company, including, therefore, the independent, non-executive Directors, have access to the
Company’s external legal and financial advisors who keep said Directors adequately informed of all statutory and
regulatory requirements connected to the business of the Company on an on-going basis.
Principle 6 – Information and Professional Development
The  Company firmly believes  in  the  professional  development  of  all  the  members  in  the  Company.  The
Managing Director is responsible for establishing and implementing incentives which are aimed to maintain and
recruit management personnel. Furthermore, regular training exercises are held for the Company’s executives to
keep  abreast  of  current  technological  and  hospitality standards  and  other  relevant  subject  matter  trends  and
practices. Directors are encouraged to talk directly to any member of management regarding any questions or
concerns the Directors  may  have. Senior management  are invited to  attend Board meetings from time to time
when and as appropriate.
Principle 8 – Committees
The Board delegates certain powers, authorities and discretions to the Audit Committee. The Company’s Board
has established an Audit Committee on the 9 February 2023 for the purposes of inter alia:
1. monitoring  the  financial  reporting  process  and  submitting  recommendations  or  proposals  to  ensure  its
integrity;
2. monitoring of the effectiveness of the Company’s internal quality control and risk management system;
3. making recommendations to the Board in relation to the appointment of the external auditor and to approve
the  remuneration  and  terms  of  engagement  of  the  external  auditor,  following  appointment  by the
shareholders during the Company’s annual general meeting;
4. reviewing and monitoring the external auditor’s independence;
5. evaluating the arm’s length nature of any proposed transactions to be entered into by the Company and a
related  party,  to  ensure  that  the  execution  of  such  transaction  is  at  arm’s  length,  conducted  on  a  sound
commercial basis and in the best interests of the Company; and
6. assessing any potential conflicts of interest between the duties of the Directors and their respective private
interests or duties unrelated to the Company, to ensure that any potential abuse is managed, controlled and
resolved in the best interests of the Company and according to law.
10
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
STATEMENT  OF  COMPLIANCE  WITH  THE  PRINCIPLES  OF  GOOD  CORPORATE GOVERNANCE  -
continued
Compliance with the Code - continued
Principle 8 – Committees - continued
As  indicated  above,  the  Company adopts  measures  in  line  with  the  Code  with  a  view  to  ensuring  that  the
relationship  with  its  shareholders  is  retained  at  arm’s  length,  including  adherence  to  rules  on  related  party
transactions set out in Chapter 5 of the Capital Markets Rules. Said rules require the vetting and approval of any
related  party transaction  by the  Audit  Committee,  which  is  constituted  in  its  entirety by  independent,  non-
executive Directors. Robert Ancilleri is the current chairman of the Audit Committee and all members of the Audit
Committee are designated as competent in accounting and/or auditing.
The Audit Committee has, pursuant to the relative terms of reference, been granted express powers to be given
access to the financial position of the Company and Mallard Co Limited (C 4758), the entity entrusted with the
management and operation of the Qawra Palace Hotel.
The Board has formally appointed the following three (3) individuals as the members of the Audit Committee:
Robert Ancilleri – Chairperson and independent, non-executive Director
Stephen Muscat – Independent, non-executive Director
Paul Muscat – Independent, non-executive Director
Audit Committee members are appointed for a one (1) year term of office. Such term is automatically renewed
for further periods of one (1) year each unless otherwise determined by the Board of Directors of the Company.
The Audit Committee meets at least four (4) times a year, with additional meetings to be called at the discretion
of the Chairperson of the Audit Committee. Since the listing of the €25 million 5.25% secured bonds 2033 issued
by the Company, effective on 8 February 2023, up to the end of the reporting period, the Audit Committee met
once (1), with 100% attendance of the Audit Committee members at this meeting. The Chairperson will also call
a  meeting  of  the  Audit  Committee  if  required  by any Committee  member,  by senior  management  or  by the
external  auditors  of  the  Company.  In  compliance  with  the  Capital  Markets  Rules,  all  members  of  the  Audit
Committee are  considered to be  independent members competent  in accounting and/or auditing matters. The
Company considers that  the  members  of the Audit  Committee have the  necessary experience, independence
and standing to hold office as members thereof.
Principle 9 - Relations with bondholders and with the Market
The Company is committed to having an open and communicative relationship with its bondholders. The market
is  kept  updated  with  all  relevant  information  concerning  the  Company via  the  publication  of  Company
Announcements in terms of the Capital Markets Rules and, furthermore, the Company regularly publishes such
information on its website to ensure continuous relations with the market.
Principle 11 - Conflicts of Interest
Directors are  expected to always act in the best  interests of the Company and  its shareholders and  investors.
Actual or potential conflicts of interest that may arise from time-to-time will need to be managed in accordance
with the procedures regulating conflicts of interest situations set out in the Company’s Articles of Association. In
this regard, Directors are required to inform the Board of any matter that may result or has already resulted in a
conflict of  interest. A record of such declaration is entered into the Company’s minute book and the conflicted
Director  shall  be precluded from voting  on  any resolution  concerning  a  matter in  respect of  which he/she  has
declared an interest. Unless the other non-conflicted Directors of the Company otherwise resolve, the conflicted
Director  shall:  (a)  not  be  counted  in  the  quorum  present  for  the  relevant  meeting;  (b)  not  participate  in  the
discussion concerning a matter in respect of which he has declared a direct or indirect interest; and (c) withdraw
from or, if applicable, not attend the meeting at which such matter is discussed.
11
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
STATEMENT  OF  COMPLIANCE  WITH  THE  PRINCIPLES  OF  GOOD  CORPORATE GOVERNANCE  -
continued
Compliance with the Code - continued
Principle 12 - Corporate Social Responsibility
The  Board  is  mindful  of  and  seeks  to  adhere  to  sound  principles  of  corporate  social  responsibility in  its
management practices. This helps the  Company develop strong relationships with its stakeholders and create
long-term  value  for  society and  its  business.  The  Company is  committed  to  play an  effective  role  in  society’s
sustainable development, whilst tangibly proving itself to be a responsible and caring citizen of the community in
which it operates. The Company continues to support a number of different local initiatives aimed at improving
the quality of life of the local communities it supports.
Remuneration Statement
In  terms  of  the  Memorandum  and  Articles  of  Association  of  the  Company,  the  aggregate  emoluments  of  all
Directors in any one financial year, and any increases thereto, shall be such amount as may, from time to time,
be  determined  by the  shareholders  in  general  meeting.  The  remuneration  of  Directors  is  a  fixed  amount  per
annum and does not include any variable component relating to profit sharing, share options or pension benefits.
For the financial year ended on 31 March 2023 the Company paid an aggregate of €15,750 to its Directors.
Non-compliance with the Code
Other than as stated below, the Company has fully implemented the principles set out in the Code.
Principle 7 – Evaluation of the Board’s Performance
Under the present circumstances, the Board does not consider it necessary to appoint a committee to carry out
a  performance evaluation of its role, as  the Board’s  performance is evaluated  on an  ongoing  basis by, and  is
subject to the constant scrutiny of the Board itself (three (3) directors of which are independent, non-executive
Directors), the Company’s shareholders, the market and all of the rules and regulations to which the Company is
subject as a company with its securities listed on a regulated market.
Principle 8 - Nomination Committee and Remuneration Committee
The Board considers that the size and operations of the Company do not warrant the setting up of remuneration
and nomination  committees. Given  that the Company does not have any employees or officers other  than the
Directors  and  the  company secretary,  it  is  not  considered  necessary for  the  Company to  maintain  a
remuneration committee. The Company does not believe it is necessary to establish a nomination committee as
appointments to the Board are determined by the shareholders of the Company in accordance with nomination
and  appointment  process  set  out  in  the  Company’s  Memorandum  and  Articles  of  Association.  The  Company
considers that the members of the Board possess the level of skill, knowledge and experience expected in terms
of the Code.
Principle 10 – Institutional Shareholders
The Company is ultimately privately held and has no institutional shareholders, therefore, Principle 10 does not,
at present, apply to the Company.
Signed  on  behalf  of  the  Board  of  Directors  on  28  July 2023  by Edward  Vella  (Director)  and  Robert  Ancilleri
(Chairman) as per the Directors' Declaration on ESEF Annual Financial Report submitted in conjunction with the
Annual Financial Report.
12
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
STATEMENT OF COMPREHENSIVE INCOME
Note
2023
€
2022
€
Rental income 4 - -
Administrative expenses (70,967) (6,870)
Operating loss
(70,967)
(6,870)
Change in fair value of investment properties 11
21,529,971
2,496,939
Impairment provision on receivable from related party 12 (40,707) (326,103)
Interest income 7 159,093 -
Interest expense 8 (249,109) (8,215)
Profit before tax 5
21,328,281
2,155,751
Taxation 9 (2,152,997) (249,694)
Profit for the financial
year
19,175,284
1,906,057
Total comprehensive income for the
year
19,175,284
1,906,057
Earnings per share
Basic
18  19.18  1.91
The notes on pages
17 - 35
are an integral part of the financial statements.
13
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
STATEMENT OF FINANCIAL POSITION
As at
31 March
Note
2023
€
2022
€
ASSETS
Non-current assets
Investment property
11
66,121,827 44,591,855
Intangible assets
10
1,180 -
Loans receivable
12
9,439,318 -
Total non-current assets
75,562,325
44,591,855
Current assets
Loans and other receivables
13
813,828 6,343,852
Cash held by trustee
8,618,062 -
Current tax receivable
5,136 -
Prepayments
15,447 -
Cash and cash equivalents
19
58,270 70
Total current assets
9,510,743
6,343,922
TOTAL ASSETS
85,073,068
50,935,777
EQUITY AND LIABILITIES
Capital and reserves
Share capital
14
2,329,373 2,329,373
Retained earnings
51,335,740 32,160,456
TOTAL EQUITY
53,665,113
34,489,829
Non-current liabilities
Borrowings
15
24,399,659 10,173,359
Deferred tax
16
6,612,183 4,459,186
Total non-current liabilities
31,011,842
14,632,545
Current liabilities
Current tax payable
- 92,804
Trade and other payables
17
396,113 289,115
Borrowings - Current portion
15
- 1,431,484
Total current liabilities
396,113
1,813,403
TOTAL LIABILITIES
31,407,955
16,445,948
TOTAL EQUITY AND LIABILITIES
85,073,068
50,935,777
The financial statements were approved and authorised for issue by the Board of Directors on
28 July 2023
. The
financial  statements  were  signed  on  behalf  of  the  Board  of  Directors  by Edward  Vella  (Director)  and  Robert
Ancilleri (Chairman) as per the Directors' Declaration on ESEF Annual Financial Report submitted in conjunction
with the Annual Financial Report.
The notes on pages
17 - 35
are an integral part of the financial statements.
14
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
STATEMENT OF CHANGES IN EQUITY
Share
capital
€
Retained
earnings
€
Total
equity
€
Financial year ended 31 March 2022
Balance at 1 April 2021 2,329,373 30,254,399 32,583,772
Total comprehensive income for the year:
Profit for the financial year
- 1,906,057 1,906,057
Balance as at
31 March 2022
2,329,373 32,160,456 34,489,829
Share
capital
€
Retained
earnings
€
Total
equity
€
Financial year ended 31 March 2023
Balance at 1 April 2022 2,329,373 32,160,456 34,489,829
Total comprehensive income for the year:
Profit for the financial year
- 19,175,284 19,175,284
Balance as at
31 March 2023
2,329,373 51,335,740 53,665,113
The notes on pages
17 - 35
are an integral part of the financial statements.
15
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
STATEMENT OF CASH FLOWS
Note
2023
€
2022
€
Cash from operating activities:
Profit before tax  21,328,281 2,155,751
Adjustment for:
Interest expense 249,109 8,215
Impairment loss 40,707 326,103
Interest income (159,093) -
Change in fair value of investment property
(21,529,971)
(2,496,939)
Amortisation of bond issuance costs 6,798 -
Amortisation of intangible assets 590 -
Loss
from operations
(63,579)
(6,870)
Movement in prepayments (15,447) -
Movement in cash held by trustee (8,618,062) -
Increase in trade and other payables 106,997 12,229
Cash
(used in)/from
operating activities
(8,590,091)
5,359
Interest paid (18,972) (8,215)
Payments of income taxes (97,940) (28,370)
Net cash flows
used in
operating activities
(8,707,003)
(31,226)
Cash flows from investing activities:
Payments to acquire intangible assets (1,770) -
Movement in balances with related company (3,790,908) (3,947,989)
Net cash flows
used in
investing activities
(3,792,678)
(3,947,989)
Cash flows from financing activities:
Proceeds from bonds net of bonds issuance cost 24,392,861 -
(Repayments)/ proceeds of bank loans
(11,604,843)
3,978,739
Payments of interest classified as financing (230,137) -
Net cash flows
generated from
financing activities
12,557,881
3,978,739
Net cash
increase/(decrease)
in cash and cash equivalents
58,200
(476)
Cash and cash equivalents at beginning of year
70 546
Cash and cash equivalents at end of year
19
58,270
70
The notes on pages 17 - 35 are an integral part of the financial statements.
16
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
1.
GENERAL INFORMATION
Qawra  Palace  p.l.c.
(formerly known  as  Mallard  Properties  Limited)  (“the  Company”)  is  a
public  limited
liability company
and  is  incorporated  in  Malta  with  its  registered  address  at
Qawra  Palace  p.l.c.,
Qawra
Palace Hotel,
Coast Road,
St. Paul's Bay SPB 1902
,
Malta
. The Company's bonds are listed on the main
market of the Malta Stock Exchange.
The Company owns the "Qawra Palace Hotel" which is leased to a related party company, who operates the
hotel.
The ownership of the Company's share capital and voting rights is such holdings that no particular individual
may be deemed to exercise ultimate control over the Company.
2.
SIGNIFICANT ACCOUNTING POLICIES
Basis of measurement and statement of compliance
The  financial  statements  of  the  Company have  been  prepared  in  accordance  with  International  Financial
Reporting  Standards  (IFRS)  as  adopted  by the  European  Union  (EU)  and  the  requirements  of  the
Companies Act (Cap. 386) enacted in Malta.
The  financial  statements  have  been  prepared  under  the  historical  cost  basis,  except  for  the  investment
property which is carried at fair value.
Going concern
As  at  31  March 2023, the  Company's current  assets  exceeded  its  current  liabilities  by €9,114,630 (2022:
€4,530,519).  This  reflects  the  active  efforts  undertaken  by the  directors  to  improve  the  liquidity of  the
Company. In assessing  the going concern  assumption, the directors of the Company have referred to the
cash  flow  forecast  of  the  Company for  2024.  The  cash  flow  forecast  assumes  that  the  Company will
generate  the  required  cash  flows  from  the  renting  of  the  hotel  to  its  related  company.  Based  on  the
foregoing, the directors believe that it is appropriate to prepare the financial statements on a going concern
basis.
Functional and presentation currency
The financial statements are presented in Euro (€) which is also the Company's functional currency.
New or revised standards, interpretations and amendments adopted
During  the  current  year,  the  Company has  adapted  a  number  of  new  standards  and  interpretations,  or
amendments  thereto,  issued  by the  International  Accounting  Standards  Board  and  International  Financial
Reporting Interpretations  Committee, and endorsed by the European Union, that are mandatorily effective
for accounting periods beginning on or after 1 April 2022. Their adoption has not had any material impact on
the disclosures or on the amounts reported in these financial statements.
17
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
- continued
2.
SIGNIFICANT ACCOUNTING POLICIES - continued
New or revised standards, interpretations and amendments adopted - continued
Annual Improvements to IFRS Standards 2018–2020
IFRS  9  Financial  Instruments  -  The  amendment  clarifies  that  in  applying  the  ‘10  per  cent’  test  to  assess
whether to derecognise a financial liability, an entity includes only fees paid or received between the entity
(the borrower) and the lender, including fees paid or received by either the entity or the lender on the other’s
behalf. The amendment is applied prospectively.
New or revised standards, interpretations and amendments issued but not yet effective
At the end  of the  reporting period,  certain  new standards,  interpretations or amendments  thereto, were in
issue but not yet effective for the current financial period. There have been no instances of early adoption of
standards,  interpretations  or  amendments  ahead  of  their  effective  date.  The  directors  anticipate  that  the
adoption of the new standards,  interpretations or amendments  thereto, will not  have a material impact on
the financial statements upon initial application, other than in the cases indicated below. The most relevant
changes are the below:
Amendments to IAS 1 – Classification of Liabilities as Current or Non-current
The amendments to IAS 1 affect only the presentation of liabilities as current or non-current in the statement
of financial position and not the amount or timing of recognition of any asset, liability, income or expenses,
or the information disclosed about those items. The amendments clarify that the classification of liabilities as
current or non-current is based on rights that are in existence at the end of the reporting period, specify that
classification is unaffected by expectations about whether an entity will exercise its right to defer settlement
of a  liability, explain that rights are  in existence if covenants are complied with at the end of the reporting
period, and introduce a definition of ‘settlement’ to make clear that settlement refers to the transfer to the
counterparty of  cash,  equity instruments,  other  assets  or  services.  The  amendments  are  applied
retrospectively for annual periods beginning on or after 1 January 2023, with early application permitted.
Amendments  to  IAS  1  Presentation  of  Financial  Statements  and  IFRS  Practice  Statement  2  Making
Materiality Judgements—Disclosure of Accounting Policies
The amendments  change the  requirements in IAS  1 with regard  to disclosure of accounting policies.  The
amendments  replace  all  instances  of  the  term  ‘significant  accounting  policies’  with  ‘material  accounting
policy information’.  Accounting  policy information  is  material  if,  when  considered  together  with  other
information included in an entity’s financial statements, it can reasonably be expected to influence decisions
that  the  primary users  of  general  purpose  financial  statements  make  on  the  basis  of  those  financial
statements.  The  supporting  paragraphs  in  IAS  1  are  also  amended  to  clarify that  accounting  policy
information that relates to immaterial transactions, other events or conditions is immaterial and need not be
disclosed. Accounting policy information may be material because of the nature of the related transactions,
other  events  or  conditions,  even  if  the  amounts  are  immaterial.  However,  not  all  accounting  policy
information relating to material transactions, other events or conditions is itself material. The IASB has also
developed guidance and  examples to explain  and demonstrate the application of the ‘four-step materiality
process’ described in IFRS Practice Statement 2. The amendments to IAS 1 are effective for annual periods
beginning on or after 1 January 2023, with earlier application permitted and are applied prospectively. The
amendments to IFRS Practice Statement 2 do not contain an effective date or transition requirements.
Amendments  to  IAS  8  Accounting  Policies,  Changes  in  Accounting  Estimates  and  Errors  -  Definition  of
Accounting Estimates
18
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
- continued
2.
SIGNIFICANT ACCOUNTING POLICIES - continued
New or revised standards, interpretations and amendments issued but not yet effective - continued
The amendments replace the definition of a change in accounting estimates with a definition of accounting
estimates.  Under the new definition, accounting  estimates  are  “monetary amounts in  financial  statements
that  are  subject  to  measurement  uncertainty”.  The  definition  of  a  change  in  accounting  estimates  was
deleted. However, the IASB retained the concept of changes in accounting estimates in the Standard with
the following clarifications:
 A  change  in  accounting  estimate  that  results  from  new  information  or  new  developments  is  not  the
correction of an error.
Amendments  to  IAS  8  Accounting  Policies,  Changes  in  Accounting  Estimates  and  Errors  -  Definition  of
Accounting Estimates - continued
 The  effects  of  a  change  in  an  input  or  a  measurement  technique  used  to  develop  an  accounting
estimate  are changes in accounting estimates  if  they do  not  result  from the correction  of  prior period
errors.
The IASB added two examples (Examples 4-5) to the Guidance on implementing IAS 8, which accompanies
the Standard.  The IASB has  deleted one example  (Example 3)  as it  could cause confusion  in light of the
amendments.  The  amendments  are  effective  for  annual  periods  beginning  on  or  after  1  January 2023 to
changes in accounting policies and changes in accounting estimates that occur on or after the beginning of
that period, with earlier application permitted.
Amendments to IAS 12 Income Taxes – Deferred Tax related to Assets and Liabilities arising from a Single
Transaction
The  amendments  introduce  a  further  exception  from  the  initial  recognition  exemption.  Under  the
amendments,  an  entity does  not  apply the  initial  recognition  exemption  for  transactions  that  give  rise  to
equal taxable and deductible temporary differences. Depending on the applicable tax law, equal taxable and
deductible temporary differences may arise on initial recognition of an asset and liability in a transaction that
is not a business combination and affects neither accounting nor taxable profit. For example, this may arise
upon  recognition  of  a  lease  liability and  the  corresponding  right-of-use  asset  applying  IFRS  16  at  the
commencement date of a lease. Following the amendments to IAS 12, an entity is required to recognise the
related  deferred tax asset and  liability, with the recognition of  any deferred  tax asset  being subject to  the
recoverability criteria in IAS 12. The amendments apply to transactions that occur on or after the beginning
of the earliest comparative period presented. In addition, at the beginning of the earliest comparative period
an entity recognises:
 A deferred tax asset (to the extent that it is probable that taxable profit will be available against which
the  deductible  temporary difference  can  be  utilised)  and  a  deferred  tax  liability for  all  deductible  and
taxable temporary differences associated with:
 Right-of-use assets and lease liabilities
 Decommissioning,  restoration  and  similar  liabilities  and  the  corresponding  amounts  recognised  as
part of the cost of the related asset
19
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
- continued
2.
SIGNIFICANT ACCOUNTING POLICIES - continued
New or revised standards, interpretations and amendments issued but not yet effective - continued
 The cumulative effect of initially applying the amendments as an adjustment to the opening balance of
retained earnings (or other component of equity, as appropriate) at that date
The  amendments  are  effective  for  annual  reporting  periods  beginning  on  or  after  1  January 2023,  with
earlier  application  permitted.  The  directors  of  the  Company anticipate  that  the  application  of  these
amendments  may  have  an  impact  on  the  Company's  financial  statements  in  future  periods  should  such
transactions arise.
Leases
The  Company assesses  at  contract  inception  whether  a  contract  is,  or  contains,  a  lease,  that  is,  if  the
contract  conveys  the  right  to  control  the  use  of  an  identified  asset  for  a  period  of  time  in  exchange  for
consideration.
The company as a lessor
Leases  in  which  the  Company does  not  transfer  substantially all  the  risks  and  rewards  incidental  to
ownership  of  an  asset  are  classified  as  operating  leases.  Rental  income  arising  is  accounted  for  on  a
straight-line basis over the lease term and is included in revenue in the statement of profit or loss due to its
operating nature. Initial  direct costs incurred in negotiating and  arranging an operating  lease are added  to
the carrying amount of the  leased asset  and recognised over the  lease term on the same basis as rental
income. Contingent rents are recognised as revenue in the period in which they are earned.
Interest income
Interest  income  is  recognised  when  the  inflow  of  economic  benefits  associated  with  the  transaction  is
probable  and  the  amount  of  income  can  be  measured  reliably.   Interest  income  is  accrued  on  a  time
proportion basis.
Intangible assets
An  intangible  asset  is  recognised  if  it  is  probable  that  the  expected  future  economic  benefits  that  are
attributable  to  the  asset  will  flow  to  the
Company
and  the  cost  of  the  asset  can  be  measured  reliably.
Intangible assets are initially measured at cost.
Expenditure on an intangible asset is recognised as an expense in the period when it is incurred unless it
forms part of the cost of the asset that meets the recognition criteria.
The  useful  life  of  intangible  assets  is  assessed  to  determine  whether  it  is  finite  or  indefinite.  Intangible
assets with a finite useful life are amortised over 3 years. Amortisation is charged to profit or loss so as to
write  off the cost  of  intangible  assets  less  any estimated residual  value,  over  their estimated useful  lives.
The  amortisation  method  applied,  the  residual  value  and  the  useful  life  are  reviewed,  and  adjusted  if
appropriate, at end of each reporting period.
20
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
- continued
2.
SIGNIFICANT ACCOUNTING POLICIES - continued
Investment property
Investment properties are freehold land and buildings held for long-term rental and capital appreciation that
are  not  occupied  by the  Company.  Investment  properties  are  initially recognised  at  cost,  including
transaction costs, and are subsequently remeasured at fair value. Movements in fair value are recognised
directly in profit or loss.
Investment  properties  are  derecognised  when  disposed  of  or  when  there  is  no  future  economic  benefit
expected. Transfers to and from investment properties to property, plant and equipment are determined by
a  change  in  use  of  owner-occupation.  The  fair  value  on  the  date  of  change  of  use  from  investment
properties to property, plant and equipment are used as deemed cost for the subsequent accounting. The
existing  carrying amount  of  property,  plant  and  equipment  is  used  for  the  subsequent  accounting  cost  of
investment properties on the date of change of use.
Transfers to and from investment properties from and to property, plant and equipment are determined by a
change in use of owner-occupation. The fair value on the date of change of use from investment properties
to  property,  plant  and  equipment  are  used  as  deemed  cost  for  the  subsequent  accounting.  The  existing
carrying amount of property, plant and equipment is used for the subsequent accounting cost of investment
properties on the date of change of use.
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability
or  equity instrument  of  another  entity.  Financial  assets  and  financial  liabilities  are  recognised  when  the
Company becomes a party to the contractual provisions of the financial instrument.
Financial  assets  are  derecognised  when  the  contractual  rights  to  the  cash  flows  from  the  financial  asset
expire, or when the financial asset and all substantial risks and rewards are transferred. Financial liabilities
are derecognised when they are extinguished, discharged, cancelled or expire.
Financial assets are classified at initial recognition in accordance with how they are subsequently measured,
as follows:
 financial assets at amortised cost;
 financial assets at fair value through other comprehensive income; and
 financial assets at fair value through profit or loss.
The Company’s financial assets are mainly financial assets at amortised cost.
Financial assets at amortised cost
On initial recognition, financial assets at amortised cost are recognised at fair value plus transaction costs
that are directly attributable to the acquisition of the financial asset. Discounting is omitted where the effect
of discounting is immaterial.
Financial  assets  at  amortised  cost  are  subsequently carried at  amortised  cost  using the effective interest
method  less  impairment  losses,  if  any.  Gain  or  losses  are  recognised  in  profit  or  loss  when  the  asset  is
derecognised, modified, or impaired.
21
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
- continued
2.
SIGNIFICANT ACCOUNTING POLICIES - continued
Financial instruments - continued
Financial assets at amortised cost - continued
The  Company’s  financial  assets  under  this  classification  include  loans  receivable,  other  receivables,  and
cash at banks.
Impairment of financial assets
The  Company recognises  an  allowance  for  expected  credit  losses  (ECLs)  on  debt  instruments  that  are
classified as financial assets at amortised cost. ECLs are based on the difference between the contractual
cash flows due in accordance with the contract and all the cash flows that the Company expects to receive,
discounted at an approximation of the original effective interest rate.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase
in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that
are  possible  within  the  next  12-months  (12-month  ECL).  For  those  credit  exposures  for  which  there  has
been  a  significant  increase  in  credit  risk  since  initial  recognition,  a  loss  allowance  is  required  for  credit
losses  expected  over  the  remaining  life  of  the  exposure,  irrespective  of  the  timing  of  the  default  (lifetime
ECL).
Financial  liabilities  are  classified  at  initial  recognition  in  accordance  with  how  they are  subsequently
measured, as follows:
 financial liabilities at amortised cost; and
 financial liabilities at fair value through profit or loss.
The Company’s financial liabilities are mainly financial liabilities at amortised cost.
Financial liabilities at amortised cost
Financial  liabilities  at  amortised  cost  are  initially recognised  at  fair  value,  net  of  transaction  cost  and  are
subsequently measured  at  amortised  cost using the  effective interest  method. All  interest-related charges
under the interest amortisation process are recognised in profit or loss.
On derecognition, the difference between the carrying amount of the financial liability (or part of a financial
liability)  extinguished  or  transferred  to  another  party and  the  consideration  paid,  including  any non-cash
assets transferred or liabilities assumed, are recognised in profit or loss.
Financial liabilities under this classification include borrowings and trade and other payables.
Offsetting financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount reported in the statement of financial position
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle
on a net basis, or realise the asset and settle the liability simultaneously.
22
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
- continued
2.
SIGNIFICANT ACCOUNTING POLICIES - continued
Cash and cash equivalents
Cash in hand and at banks and short-term deposits which are held to maturity are carried at cost.
Cash  and  cash  equivalents  are  defined  as  cash  in  hand,  demand  deposits  and  short-term,  highly liquid
investments  readily convertible  to  known  amounts  of  cash  and  subject  to  insignificant  risk  of  changes  in
value.
Ordinary shares
Ordinary shares are  classified as equity. Incremental costs directly attributable to issue  of ordinary shares
are recognised as a deduction from equity.
Tax
The tax charge/(credit) in the profit or loss for the year normally comprises current and deferred tax.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the
end of the reporting period.
Deferred income tax is provided using the liability method, for all temporary differences arising between the
tax bases of assets and liabilities and their carrying values for financial reporting purposes. The amount of
deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount
of assets and liabilities, based on tax rates that have been enacted or substantively enacted at the end of
the reporting period.
A  deferred  tax  asset  is  recognised  only to  the  extent  that  it  is  probable  that  future  taxable  profits  will  be
available  against  which  the  assets  can  be  utilised  and/or  sufficient  taxable  temporary differences  are
available.   Deferred  tax  assets  are  reduced  to  the  extent  that  is  no  longer  probable  that  the  related  tax
benefit will be realised.
Related parties
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party
or exercise significant influence over the other party in making financial and operating decisions. Parties are
also  considered  to  be  related  if  they are  subject  to  common  control  or  common  significant  influence.
Related parties may be individuals or corporate entities. Related party accounts are carried at cost, net of
any impairment charge.
Foreign currencies
Transactions  underlying  items  in  these  financial  statements  are  measured  in  the
Company
’s  functional
currency, which is the currency of the primary economic environment in which the entity operates.
Transactions  in  foreign  currencies  have  been  converted  into
Euro
at  the  rates  of  exchange  ruling  on  the
date  of  the  transaction.  Monetary assets  and  liabilities  denominated  in  foreign  currencies  have  been
translated into
Euro
at the rates of exchange ruling at the end of reporting period. All resulting differences
are taken to profit or loss.
23
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
- continued
2.
SIGNIFICANT ACCOUNTING POLICIES - continued
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on 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; and assumes that
the transaction will take place either in the principal market, or in the absence of a principal market, in the
most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or
liability,  assuming  they act  in  their  economic  best  interests.  For  non-financial  assets,  the  fair  value
measurement  is  based  on  its  highest  and  best  use.  Valuation  techniques  that  are  appropriate  in  the
circumstances and  for which sufficient data are available to measure fair value, are used,  maximising the
use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that
reflects  the  significance  of  the  inputs  used  in  making  the  measurements.  Classifications  are  reviewed  at
each reporting  date  and transfers  between levels are  determined based  on a reassessment of the lowest
level of input that is significant to the fair value measurement.
For  recurring  and  non-recurring  fair  value  measurements,  external  valuers  may  be  used  when  internal
expertise  is  either  not  available  or  when  the  valuation  is  deemed  to  be  significant.  External  valuers  are
selected based on market knowledge and reputation. Where there is a significant change in fair value of an
asset or liability from one period to another, an analysis is undertaken, which includes a verification of the
major inputs  applied  in  the  latest  valuation  and  a  comparison,  where  applicable,  with  external  sources  of
data.
Earnings per share
Earnings  per  share  have  been  calculated  using  the  weighted  average  number  of  ordinary shares
outstanding during the year. Diluted earnings per share are calculated using the weighted average number
of additional ordinary shares that would have been outstanding during the year assuming the conversion of
all dilutive potential ordinary shares.
3.
SIGNIFICANT JUDGEMENTS AND CRITICAL ESTIMATION UNCERTAINTIES
The preparation of financial statements in conformity with IFRS as adopted by the EU requires management
to  make  judgements,  estimates  and  assumptions  that  affect  the  application  of  policies  and  reported
amounts  of  assets and liabilities,  income and expenses.  The
directors have
considered the development,
selection and disclosure of the Company’s critical accounting policies and estimates and the application of
these  policies  and  estimates.  Estimates  and  judgements  are  continually evaluated  and  are  based  on
historical and other factors, including expectations of future events that are believed to be reasonable under
the circumstances.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates
are significant to the financial statements, are outlined below.
24
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
- continued
3.
SIGNIFICANT JUDGEMENTS AND CRITICAL ESTIMATION UNCERTAINTIES - continued
Fair value of investment property
Investment property is revalued annually to fair value by using valuations prepared by external independent
valuers.  These  valuations  are  based  upon  assumptions  including  future  rental  value,  anticipated  property
costs,  future  development  costs  and  the  appropriate  discount  rate.  Reference  is  also  made  to  market
evidence of transaction prices for similar properties. These estimates are subjective in nature and involve
uncertainties, and therefore, cannot be determined with precision.
Expected credit losses on loans receivable
In  assessing  the  recoverability of  the  amounts  owed  by the  fellow  subsidiary,  the  directors  took  into
consideration the expected future outcome of the fellow subsidiary.
When  measuring  the  expected  credit  losses  (ECL),  the  Company uses  reasonable  and  supportable
forward-looking information, which is based on assumptions for the future movement of different economic
drivers and how these drivers will affect each other.
Loss given  default is an  estimate of  the loss arising  on default.  It is based  on the  difference between the
contractual cash flows due and those that the lender would expect to receive, taking into account cash flows
from collateral and integral credit enhancements.
Probability of default constitutes a key input in measuring ECL. Probability of default is an  estimate of the
likelihood of default over a given time horizon, the calculation of which includes historical data, assumptions
and expectations of future conditions.
4.
REVENUE
There is no rental income for the years ended 31 March 2023 and 31 March 2022 as the Company and the
lessee (a related party) agreed that the Company shall not charge rental fees for the period of three years
commencing from 1 April 2020 to 31 March 2023 in view of the effects of COVID-19 on the operations and
results of the lessee.
5.
PROFIT BEFORE TAX
The profit before tax is stated after charging:
2023
€
2022
€
Amortisation of bond issuance costs
6,798 -
Amortisation of computer software
590 -
Auditor's remuneration
9,000 5,000
Directors' remuneration
15,750 -
25
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
- continued
5.
PROFIT BEFORE TAX - continued
Fees charged by the auditor for services rendered during the financial year are as follows:
2023
€
2022
€
Auditor's remuneration
9,000 5,000
Other assurance services
1,500 -
Tax compliance
500 200
11,000
5,200
6.
STAFF COSTS
Payroll costs for the
year
comprise of the following:
2023
€
2022
€
Directors' remuneration
15,750 -
The average number of persons employed by the
Company
during the
year
was 1 (2022: nil).
7.
INTEREST INCOME
2023
€
2022
€
Interest on related party loans
159,093 -
8.
INTEREST EXPENSE
2023
€
2022
€
Interest expense on bonds payable
230,137 -
Bank charges and interest
18,972 8,215
249,109
8,215
26
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
- continued
9.
TAXATION
The tax charged to profit or loss comprised of the following:
2023
€
2022
€
Current tax charge
- -
Deferred tax charge
2,152,997 249,694
2,152,997
249,694
The tax on the
Company
's
profit
before tax differs from the theoretical tax
expense
that would arise using
the applicable tax rate in Malta of 35% as follows:
2023
€
2022
€
Profit before tax
21,328,281 2,155,751
Theoretical tax expense at 35% expense at 35%
7,464,898 754,513
Tax effect of:
ECL disallowed for tax purposes
14,247 119,416
Difference between amortisation and capital allowances
52 -
Unutilised tax losses and capital allowances
56,293 -
Difference between 10% deferred tax on investment property
and 35% on gain in fair value
(5,382,493) (624,235)
2,152,997
249,694
At 31 March 2023, the Company had a potential deferred tax asset amounting to €56,293 emanating from
unutilised tax losses and capital allowances. This amount  has not been  recognised since the directors do
not consider it prudent to recognise such asset in view of the unpredictability of future profits against which
this may be utilised.
10.
INTANGIBLE ASSETS
Computer
software
€
Cost
Additions
1,770
Accumulated amortisation
Amortisation for the year
(590)
Net book value
At 31 March 2023
1,180
At 31 March 2022 -
27
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
- continued
11.
INVESTMENT PROPERTY
2023
€
2022
€
Opening balance
44,591,856 42,094,916
Change in fair value
21,529,971 2,496,939
66,121,827
44,591,855
The investment property is a hotel and is being operated by a fellow subsidiary and is carried at fair value.
There is no rental income for the years ended 31 March 2023 and 31 March 2022. The Company has not
incurred direct operating expenses arising from its investment property.
The fair value of the investment property as at 31 March 2023 and 31 March 2022 is based on valuations by
an independenct architect who has experience in the location and category of the investment property being
valued, as adjusted for the purposes of these financial statements as disclosed below:
2023
€
2022
€
Fair value as per architect's valuation as at end of year
84,469,528 56,938,165
Carrying amount of PPE as at end of year (i)
(18,347,701) (12,346,310)
66,121,827
44,591,855
i. The  carrying  amount  of  property,  plant  and  equipment  relates  to  the  cost  (less  accumulated
depreciation) of hotel assets incurred by the lessee (a related company) and recognised in its accounts.
Since this factor is being taken into consideration in determining the future rental charges to the lessee
and  since  the  architect's  valuation  considered  the  state  of  the  hotel  including  all  property,  plant  and
equipment held as at 31 March 2023 and 31 March 2022, respectively, the fair value of the investment
property has been adjusted as explained above.
The carrying amounts that would have been recognised had the land and buildings have been carried under
the cost model were as follows:
2023
€
2022
€
Cost
14,043,100 14,043,100
Accumulated depreciation
(2,078,788) (1,980,486)
11,964,312
12,062,614
The Company's investment property is used as a gurantee for a first ranking special hypotech in favour of
the  bank  and  a  second  ranking  special  hypothec  in  favour  of  the  Security Trustee  (for  the  benefit  of
Bondholders).
28
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
- continued
12.
LOANS RECEIVABLE
2023
€
2022
€
Loans receivable - non-current (i)
9,439,318 -
i. Loans  receivable  as  of  31  March  2022  were  non-interest  bearing  and  repayable  on  demand.  On  15
December 2022, the Company entered into a loan facility agreement with its fellow subsidiary, making
the loans receivable as of 31 March 2023 interest bearing, with final maturity date of 26 January 2037.
Interest  of  5.25%  per  annum is  to  be  paid  on  27  January of  every year  during  the  term  of  the
agreement. The Company's exposure to credit risk related to loans receivable is disclosed in Note
22
.
13.
LOANS AND OTHER RECEIVABLES
2023
€
2022
€
Loans receivable - current (i)
1,230,000 6,719,317
Impairment of loans to fellow subsidiary (ii)
(416,172) (375,465)
813,828
6,343,852
i. Loans  receivable  as  of  31  March  2022  were  non-interest  bearing  and  repayable  on  demand.  On  15
December 2022, the Company entered into a loan facility agreement with its fellow subsidiary, making
the loans receivable as of 31 March 2023 interest bearing, with final maturity date of 26 January 2037.
Interest  of  5.25%  per  annum is  to  be  paid  on  27  January of  every year  during  the  term  of  the
agreement.
ii. The Company recognised impairment provision on receivable from related party amounting to €40,707
during the year ended 31 March 2023 (2022: €326,103).
The Company's exposure to credit risk related to loans receivable is disclosed in Note
22
.
14.
SHARE CAPITAL
2023
€
2022
€
Authorised, issued and fully paid up
1,000,000 Ordinary Shares at €2.329373 each
2,329,373 2,329,373
The ordinary shares carry identical voting rights at general meeting of the
Company
, are equally entitled to
any distribution of dividends, and all classes of shares rank equally for any residual assets of the
Company
after the settlement of all liabilities in the event of the
Company
's winding up.
29
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
- continued
15.
BORROWINGS
2023
€
2022
€
Non-current portion
Bank loans (i)
- 10,173,359
€25,000,000 bonds, 5.25%, 2023-2033
(ii)
24,399,659 -
24,399,659
10,173,359
Current portion
Bank loans (i)
- 1,431,484
-
1,431,484
i. The Company's banking facilities were secured by general and special hypothecs over the Company's
assets including the investment property and guarantees given by a related party. Bank loans as at 31
March  2022  bore  interest  at  the  rate  of  250  and  375  basis  points  per  annum above  the  3  month
EURIBOR  rate. If the  3  month EURIBOR  fell below  0%,  the bank  would apply a rate of 250 and  375
basis points over 0% which would be the 'floor' until the 3 months EURIBOR rises again above the floor
rate. During the year, the Company fully paid its outstanding bank loans from the proceeds of its public
bonds.
ii. In  2023,  the  Company issued  an  aggregate  principal  amount  of  €25,000,000  secured  bonds  with  a
nominal amount value of €100 per bond issued at par and with a maturity date of 27 February 2033. The
bonds  are  secured  by a second  ranking  special  hypothec  granting  the  security trustee  a  right  of
preference  and  priority for  repayment  over  the  hypothecated  property.  The  amount  is  net  of  bond
issuance  cost  amounting  to  €607,139  with  amortisation  during  the  year  ended  31  March  2023
amounting to €6,798.
16.
DEFERRED TAX LIABILITY
Deferred taxes are calculated on all temporary differences under the liability method and are measured at
the  tax  rates  that  are  expected  to  apply to  the  period  when  the  asset  is  realised  or  the  liability is  settled
based on tax rates (and tax laws) that have been substantively enacted by the end of the reporting period.
The balance represents temporary difference attributable to:
2023
€
2022
€
Opening value of investment property
4,459,186 4,209,492
Movement for the year
2,152,997 249,694
Closing fair value of investment property
6,612,183
4,459,186
30
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
- continued
17.
TRADE AND OTHER PAYABLES
2023
€
2022
€
VAT payable
136,507 274,190
Accruals
256,144 14,925
FSS payable
3,462 -
396,113
289,115
18.
EARNINGS PER SHARE
Earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the
weighted average number of ordinary shares in issue during the year.
Basic earnings per share
2023 2022
Profit attributable to equity holders of the Company
€
19,175,284
€
1,906,057
Weighted average number of shares in issue
1,000,000 1,000,000
Basic and diluted earnings per share
€
19.18
€
1.91
The  Company has  no  instruments  or  arrangements  which  give  rise  to  potential  ordinary shares  and
accordingly diluted earnings per share is equivalent to basic earnings per share.
19.
CASH AND CASH EQUIVALENTS
Cash  and  cash  equivalents  consist  of  balances  with  banks.   Cash  and  cash  equivalents  included  in  the
statement of cash flows reconcile to the amounts shown in the statement of financial position as follows:
2023
€
2022
€
Bank balances
58,270 70
31
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
- continued
20.
RELATED PARTY TRANSACTIONS
The
Company
has  related  party relationships with  companies  under  common  control  and  over  which  the
directors exercise significant influence. Transactions are carried out with related parties on a regular basis
and in the ordinary course of the business. The following are the transactions with related parties during the
year:
2023
€
2022
€
Interest income:
Fellow subsidiary company
159,093 -
Loans:
Fellow subsidiary company
(584,433) -
Remunerations:
Directors' remuneration
15,750 -
The outstanding balances arising from the above transactions are disclosed in Notes
6
,
12
and
13
to these
financial statements.
21.
RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
The table below details changes in the Company’s liabilities arising from financing activities, including both
cash and non-cash changes. Liabilities arising from financing activities are those which cash flows were, or
future  cash flows will  be, classified in the Company's statement  of  cash  flow  as  cash flow  from financing
activities.
Balance at 1
April 2022
€
Net cash
proceeds/
(repayments)
€
Non-cash
changes
Effective
interest
€
Balance at
31 March
2023
€
Bank loans
11,604,843 (11,604,843) - -
€25,000,000 bonds, 5.25%, 2023-2033
- 24,162,724 236,935 24,399,659
11,604,843
12,557,881
236,935
24,399,659
Balance at 1
April 2021
€
Net cash
proceeds/
(repayments)
€
Non-cash
changes
Effective
interest
€
Balance at
31 March
2022
€
Bank loans
7,626,104 3,978,739 - 11,604,843
32
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
- continued
22.
FINANCIAL RISK MANAGEMENT
At year  end, the  Company's main financial assets  in the  statement of financial  position comprise of
loans
receivable and other receivables
. At year end, there were no off-balance sheet financial assets.
At  year  end,  the  Company's  main  financial  liabilities  in  the  statement  of  financial  position  comprise
borrowings, trade and other payables
. At year end, there were no off-balance sheet financial liabilities.
Exposure to
credit
and
liquidity
risks arise in the normal course of the company's operations.
Timing of cash flows
The presentation of the financial assets and liabilities under the current and non-current headings within the
statement of financial position
is intended to indicate the timing in which cash flows will arise.
Capital risk management
Qawra Palace p.l.c.
manages its capital to ensure that it will be able to continue as a going concern while
maximising  the  return  to  stakeholders  through  the  optimisation  of  the  debt  and  equity balance.   The
Company
’s strategy remains unchanged from
2022
.
The capital structure of the
Company
consists of debt, which includes the borrowings disclosed in Note
15
,
and equity attributable to equity holders, comprising issued share capital, reserves and retained earnings as
disclosed in Notes
14
to these financial statements and in the statement of changes in equity.
Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the
other party to incur a financial loss. Financial assets which potentially subject the company to concentrations
of credit risk consist principally of certain trade and other receivables and cash at bank.
The credit risk relating to cash at bank is considered to be low in view of management’s policy of placing it
with quality financial institutions.
The loans receivable  are mainly receivables from a fellow  subsidiary. Such financial assets are presented
net  of  an  allowance  for  doubtful  debts.  In  terms  of  IFRS  9,  the  company applies  an  ECL  model.  In  the
opinion  of  the  directors,  credit  risk  is  not  significant  as  the  balance  is  mainly a receivable  from  a  fellow
subsidiary which although is not currently in a liquidity position to repay the balance, expected future cash
flows of the related company are highly indicative that no credit loss would result. An impairment provision
(lifetime ECL) of €40,707 (2022: €326,103) on this balance, calculated in accordance with the requirements
of IFRS 9, has been charged to the statement of comprehensive income during the year ended 31 March
2023.  The  impairment  provision  against  this  balance  as  at  31  March  2023  amounts  to  €416,172  (2022:
€375,465). The directors assess the recoverability of this receivable on an ongoing basis.
Liquidity risk
Liquidity risk arises in the general funding of the
Company
’s activities and in the management of positions. It
includes  the  risk  that  obligations  cannot  be  met  as  and  when  they fall  due.  Liquidity risk  is  managed  by
maintaining significant levels of liquid funds, and identifying and monitoring changes in funding required to
meet business goals driven by management.
33
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
- continued
22.
FINANCIAL RISK MANAGEMENT - continued
Liquidity risk - continued
The  directors  monitor  the  liquidity risk  by forecasting  the  expected  cash  flows  in  order  to  ensure  that
adequate funding is in place for the Company to be in a position to meet its commitments as and when they
fall due. Moreover, financing from the parent company is readily available in order to support the Company
in meeting its obligations when they fall due.
The  following  table  analyses  the  Company's  contractual  cash  flow  maturities  of  the  Company's  financial
liabilities:
Trade and
other
payables
Bonds
payable
(including
interest) Bank loans
Total
Financial year ended 31 March 2023
Due within one year
139,969 1,424,297 - 1,564,266
Due after one year but within five years
- 5,253,596 - 5,253,596
Due after five years
- 31,569,692 - 31,569,692
139,969
38,247,585
-
38,387,554
Financial year ended 31 March 2022
Due within one year
274,190 - 1,431,484 1,705,674
Due after one year but within five years
- - 5,958,804 5,958,804
Due after five years
- - 4,214,555 4,214,555
274,190
-
11,604,843
11,879,033
Fair values
The  carrying  amounts  of  cash  at  bank,  other  receivables,  trade  and  other  payables  are  stated  their  face
values which approximates their fair values due to their short-term maturities.
The  carrying  amounts  of  loan  receivable  and  borrowings  are  stated  at  their  amortised  cost,  which  is
equivalent to their present values using the effective interest method and thus a reasonable approxiation of
the fair values as at the end of the reporting period.
34
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES LIMITED)
Annual Report and Financial Statements -
31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
- continued
23.
CONTINGENT LIABILITY
The  obligations  of  the  Company to  the  bondholders  under  the  bonds are secured  by means of a  special
hypothec.  Specifically,  the  Company shall,  pursuant  to  the  Deed  of  Hypothec,  constitute  in  favour  of  the
Security Trustee  (for the  benefit of bondholders) the Special Hypothec  over the hypothecated property for
the  full amount  of principal  and interest due  by the Company to the  bondholders in  respect of the  bonds.
The Special Hypothec may be enforced by the security trustee upon the bonds becoming immediately due
and payable  upon  an event  of default, following  which bondholders  shall be paid out of the Hypothecated
Property in  priority to  other  creditors,  save  for  any prior  ranking  security or  privilege  that  may  arise  by
operation of law.
24.
FAIR VALUE MEASUREMENT
The Company measures fair values using the fair value hierarchy that reflects the significance of the inputs
used in making the measurements:
Level  1:  Quoted  prices  (unadjusted)  in  active  markets  for  identical  assets  or  liabilities  that  the  entity can
access at the measurement date;
Level  2:  Valuation  techniques based on observable inputs,  either  directly (i.e. as prices)  or indirectly (i.e.,
derived  from  prices).  This  category includes  instruments  valued  using:  quoted  market  prices  in  active
markets  for  similar  instruments;  quoted  prices  for  identical  or  similar  instruments  in  markets  that  are
considered less than active; or other valuation techniques where all significant inputs are directly observable
from market data; and
Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments
where the valuation technique includes inputs not based on observable data and unobservable inputs have
a significant effect on the instruments valuation. This category includes instruments that are valued based
on quoted market prices for similar instruments where significant unobservable adjustments or assumptions
are required to reflect differences between the instruments.
Financial instruments
The  carrying  amounts  of  cash  at  banks,  trade  and  other  receivables  (excluding  prepayments),  other
financial  assets  at  amortised  cost,  trade  and  other  payables  (excluding  accruals),  and  other  financial
liabilities  at  amortised  cost  are  carried  at  their  present  values  using  the  effective  interest  method  (where
discounting is material) which is a reasonable approximation of their fair values as at period end.
Investment property
The fair  value of the investment property, appraised  by an independent valuer,  was determined based on
level  3  inputs.  These  level  3  inputs  include  future  rental  value,  anticipated  property costs,  future
developments and an appropriate discount rate.
35
 
36 
INDEPENDENT AUDITORS’ REPORT 
To the Shareholders of Qawra Palace p.l.c. 
Report on the Audit of the Financial Statements 
Opinion 
We have audited the accompanying financial statements of Qawra Palace p.l.c. ("the Company"), set 
out  on  pages  13  -  35,  which  comprise  the  statement  of  financial  position as  at  31  March  2023, the
statement of comprehensive income, statement of changes in equity and statement of cash flows for
the  year  then  ended,  and  notes  to  the  financial  statements,  including  a  summary  of  significant
accounting policies.  
In our opinion, the financial statements give a true and fair view of the financial position of the Company
as at 31 March 2023,  and  of its  financial performance  and its  cash flows for the year then ended  in
accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union
(EU), and have been properly prepared in accordance with the requirements of the Companies Act (Cap.
386).  
Our  opinion  is  consistent  with  the  additional  report  to  the  audit  committee  in  accordance  with  the 
provision of Article 11 of the EU Regulation No. 537/2014 on specific requirements regarding statutory
audits of public-interest entities. 
Basis for Opinion 
We  conducted  our  audit  in  accordance  with  International  Standards  on  Auditing  (ISA).  Our
responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit
of the Financial Statements section of our report. We are independent of the Company in accordance
with  the  ethical  requirements  of  both  the  International  Ethics  Standards  Board  for  Accountants'
International  Code  of  Ethics  for  Professional  Accountants  (including  International  Independence
Standards)  (IESBA  Code)  and  the  Accountancy  Profession  (Code  of  Ethics  for  Warrant  Holders)
Directive issued in terms of the Accountancy Profession Act (Cap. 281) in Malta that are relevant to our
audit of the financial statements, and we have fulfilled our other ethical responsibilities in accordance
with the IESBA Code and the Code of Ethics for Warrant Holders in Malta. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 
 
INDEPENDENT AUDITORS' REPORT - continued 
37 
Report on the Audit of the Financial Statements - continued 
Basis for Opinion - continued 
To the best of our knowledge and belief, we declare that non-audit services that we have provided to 
the Company are in accordance with the applicable laws and regulations in Malta and that we have not
provided any non-audit services that are prohibited under Article 18A of the Accountancy Profession Act
(Cap. 281).  
The non-audit services that we have provided to the Company during the year ended 31 March 2023 
are disclosed in Note 5 to the financial statements. 
Key Audit Matters 
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current year. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. 
Valuation of Investment Property 
The Company's investment property pertaining to the Qawra Palace Hotel located at Coast Road, St.
Paul's Bay SPB 1902 is carried at its fair value of €66,121,827. Valuation of this property is inherently
subjected to, among other factors, the individual nature of the property, its location, and the expected
future revenues to be derived from the property. 
The existence of significant estimates used to arrive at the fair value of the property, could result in a
potential  material  misstatement  by  virtue  of  the  inherent  uncertainties  underlying  the  estimations.
Consequently, specific audit focus and attention was given to this area. 
The fair value of the investment property as at 31 March 2023 and 31 March 2022 is based on valuations
by an independent architect who has experience in the location and category of the investment property
being valued, as adjusted for the purposes of these financial statements as discussed in Note 11. 
Our audit procedures in relation to the valuation of the investment property included, amongst others: 
•  Considering the objectivity, independence, competence and capabilities of the external valuer; 
•  Reviewing the methodology used by the external valuer and by management to estimate the
fair value of the investment property; 
•  Testing the mathematical accuracy of the calculations derived from the forecast model; and 
•  Assessing the key valuation inputs and assumptions used on which the forecasts were made.  
 
INDEPENDENT AUDITORS' REPORT - continued 
38 
Report on the Audit of Financial Statements - continued 
Key Audit Matters - continued 
Assessment of the Recoverability of Loans Receivable 
We identified the recoverability, and hence the valuation, of the loans receivable from a fellow subsidiary
as a key audit matter due to the significant degree of judgement made by management in assessing
whether such loans were subject to impairment and consequently in determining the extent of allowance
for expected credit losses ("ECL").  
As at 31 March 2023, the Company had loans receivable amounting to €10,669,318, in respect of which
an allowance for ECL of €416,172 was made.  
Our procedures in relation to the recoverability of receivables included: 
•  Reviewing the terms surrounding the agreements; 
•  Assessing the  financial  soundness of the fellow  subsidiary. In doing this,  we  referred  to the 
management accounts, the business plans and the projections made available to us; 
•  Understanding and evaluating the workings and assumptions underlying the assessment for the
loss allowance under IFRS 9; and 
•  Based on  evidence  and explanations  obtained,  we concur  with the management's  view  with
respect to the recoverability of the balances. 
Other Matter 
The financial statements of Qawra Palace p.l.c. (formerly known as Mallard Properties Limited) for the
year ended 31 March 2022 were audited by another auditor who expressed an unqualified opinion on
those financial statements on 15 March 2022. 
Other Information 
The Directors are responsible for the other information.  The other information comprises the general
information, the Directors’ report, and the statement of compliance with the principles of good corporate
governance. Our opinion on the financial statements does not cover the other information, including the
directors’ report. 
In connection with our audit of the financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed on the other information that we have obtained prior
to  the  date  of  this  auditors’  report,  we  conclude  that  there  is  a  material  misstatement  of  this  other 
information, we are required to report that fact. We have nothing to report in this regard. 
 
INDEPENDENT AUDITORS' REPORT - continued 
39 
Report on the Audit of Financial Statements - continued 
Other information - continued 
Under  Article  179(3)  of  the  Companies  Act  (Cap.  386),  we  are  required  to  consider  whether  the
information given in the directors’ report is compliant with the disclosure requirements of Article 177 of
the same Act.  
Based on the work we have performed, in our opinion: 
•  the directors’ report has been prepared in accordance with the Companies Act (Cap. 386); 
•  the  information  given  in  the  directors’  report  for  the  financial  year  on  which  the  financial
statements had been prepared is consistent with those in the financial statements; and 
•  in light of our knowledge and understanding of the Company and its environment obtained in
the course of the audit, we have not identified material misstatements in the directors’ report. 
Responsibilities  of  the  Directors  and  Those  Charged  with  Governance  for  the  Financial
Statements 
The directors are responsible for the preparation of financial statements that give a true and fair view in
accordance with IFRS as adopted by the EU and the requirements of the Companies Act (Cap. 386),
and for such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.  
In preparing the financial statements, the directors are responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Company or to
cease operations, or have no realistic alternative but to do so. 
Those  charged  with  governance  are  responsible  for  overseeing  the  Company's  financial  reporting
process. 
Auditors' Responsibilities for the Audit of the Financial Statements 
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that
includes our opinion.  Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements  can  arise  from  fraud  or  error  and  are  considered  material  if,  individually  or  in  the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements. 
 
INDEPENDENT AUDITORS' REPORT - continued 
40 
Report on the Audit of Financial Statements - continued 
Auditors' Responsibilities for the Audit of the Financial Statements - continued 
As  part  of  an  audit  in  accordance  with  ISAs,  we  exercise  professional  judgement  and  maintain
professional scepticism throughout the audit. We also:  
•  Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks,  and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of 
not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.  
•  Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting
and,  based  on  the  audit  evidence  obtained, whether  a  material  uncertainty  exists  related to
events or conditions that may cast significant doubt on the Company’s ability to continue as a 
going  concern.  If  we  conclude  that  a  material  uncertainty  exists,  we  are  required  to  draw
attention in our auditors’ 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 auditors’ report. However, future events or conditions
may cause the Company to cease to continue as a going concern.  
•  Obtain  an  understanding  of  internal  control  relevant  to  the  audit  in  order  to  design  audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control. 
•  Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors. 
•  Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation. 
We communicate  with those charged with governance regarding, among other matters, the planned
scope  and  timing  of  the  audit  and  significant  audit  findings,  including  any  significant  deficiencies  in
internal control that we identify during our audit. 
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards. 
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore
the  key  audit  matters.  We  describe  these  matters  in  our  auditor’s  report  unless  law  or  regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication. 
 
INDEPENDENT AUDITORS' REPORT - continued 
41 
Report on Other Legal and Regulatory Requirements 
Report on the Statement of Compliance with the Principles of Good Corporate Governance 
The  Capital  Markets  Rules  issued  by  the  Malta  Financial  Services  Authority  require  the  directors  to
prepare and include in their Annual Report a Statement of Compliance providing an explanation of the
extent  to  which  they  have  adopted  the  Code  of  Principles  of  Good  Corporate  Governance  and  the
effective measures that they have taken to ensure compliance throughout the accounting period with
those Principles. The Capital Markets Rules also require the auditor to include a report on the Statement
of Compliance prepared by the directors. 
We read the Statement of Compliance and consider the implications for our report if we become aware
of any apparent misstatements or material inconsistencies with the financial statements included in the
Annual Report. Our responsibilities do not extend to considering whether this statement is consistent
with any other information included in the Annual Report. 
We are  not required to, and  we do not, consider whether the Board’s statements on  internal control
included  in  the  Statement  of  Compliance  cover  all  risks  and  controls,  or  form  an  opinion  on  the
effectiveness of the Company's corporate governance procedures or its risk and control procedures.  
In our opinion, the Statement of Compliance with the Principles of Good Corporate Governance set out
on pages 8 - 12 has been properly prepared in accordance with the requirements of the Capital Markets
Rules issued by the Malta Financial Services Authority. 
Report  on  compliance  with  the  requirements  of  the  European  Single  Electronic  Format
Regulatory Technical Standard (the “ESEF RTS”), by reference to Capital Markets Rule 5.55.6 
We  have  undertaken  a  reasonable  assurance  engagement  in  accordance  with  the  requirements  of
Directive 6 issued by the Accountancy Board in terms of the Accountancy Profession Act (Cap. 281) - the
Accountancy Profession (European Single Electronic Format) Assurance Directive (the “ESEF Directive
6”) on the annual financial report of Qawra Palace plc (formerly known as Mallard Properties Limited)
for the year ended 31 March 2023, entirely prepared in a single electronic reporting format. 
Responsibilities of the directors  
The directors are responsible for the preparation of the annual financial report, including the financial
statements, by reference to Capital Markets Rule 5.56A, in accordance with the requirements  of the 
ESEF RTS. 
Auditors’ responsibilities  
Our responsibility is to obtain reasonable assurance about whether the annual financial report, including
the financial statements, 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. 
Our procedures included: 
•  Obtaining an understanding of the entity's financial reporting process, including the preparation
of the annual financial report, in XHTML format. 
•  Examining whether the annual financial report has been prepared in XHTML format. 
 
INDEPENDENT AUDITORS' REPORT - continued 
42 
Report  on  compliance  with  the  requirements  of  the  European  Single  Electronic  Format
Regulatory  Technical  Standard  (the  “ESEF  RTS”),  by  reference  to  Capital  Markets  Rule
5.55.6 - continued 
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion. 
Opinion 
In our opinion, the annual financial report for  the  year ended 31  March  2023  has  been  prepared  in
XHTML format in all material respects. 
Other matters on which we are required to report by exception 
Under the Companies Act (Cap. 386), we are also responsible to report to you if, in our opinion: 
•  Adequate accounting records have not been kept. 
•  The financial statements are not in agreement with the accounting records and returns. 
•  We have not received all the information and explanations we require for our audit. 
•  We  were  unable  to  obtain  all  the  information  and  explanations  which,  to  the  best  of  our
knowledge and belief, are necessary for the purposes of our audit. 
We also have responsibilities under the Capital Markets Rules to review the statement made by the
directors that the business is a going concern together with supporting assumptions or qualifications as
necessary. 
We have nothing to report in this regard. 
Appointment 
We were first appointed to act as auditors of the Company by the shareholders of the Company on 6
April  2023  for  the  year  ended  31  March  2023  at  the  Company's  general  meeting.  The  period  of 
uninterrupted engagement as statutory auditor of the Company is one financial period.  
RSM Malta 
Registered Auditors 
Mdina Road  
Zebbug ZBG 9015 
Malta 
Conrad Borg  
Principal 
28 July 2023 
 
QAWRA PALACE P.L.C. (FORMERLY KNOWN AS MALLARD PROPERTIES
LIMITED)
Supplementary Statement -
31 March 2023
ADMINISTRATIVE EXPENSES
2023
€
2022
€
Amortisation of bond issuance costs 6,798 -
Amortisation of intangible assets 590 -
Auditors' remuneration 9,000 5,000
Company registration fee 1,300 1,200
Consulting and professional fees 31,131 470
Directors' remuneration  15,750 -
Fines and penalties - 200
Repairs and maintenance 3,688 -
Subscriptions 2,710 -
70,967
6,870
I