ANNUAL FINANCIAL
REPORT 2022/23
FOR THE YEAR ENDED 31 JANUARY 2023
Photo by Joe Smith
ANNUAL REPORT 2022/23
TRIDENT ESTATES PLC
B
02—05
CHAIRMAN’S STATEMENT
06
DIRECTORS
07
SENIOR MANAGEMENT AND
BOARD COMMITTEES
08—16
CHIEF EXECUTIVE
OFFICER’S REVIEW
17—68
FINANCIAL STATEMENTS
18—20
DIRECTORS’ REPORT
21—26
CORPORATE GOVERNANCE
STATEMENT
27—30
REMUNERATION REPORT
31—32
STATEMENTS OF
FINANCIAL POSITION
33
STATEMENTS OF
COMPREHENSIVE INCOME
34
STATEMENTS OF
CHANGES IN EQUITY
35
STATEMENTS OF CASH FLOWS
36—60
NOTES TO THE
CONSOLIDATED FINANCIAL
STATEMENTS
61
SHAREHOLDER INFORMATION
CONTENTS
ANNUAL
FINANCIAL
REPORT
2022/23
01
ANNUAL REPORT 2022/23
TRIDENT ESTATES PLC
CHAIRMAN’S
STATEMENT
After three years of “virtual meetings” I am looking
forward to being able to address you in person at our
forthcoming Annual General Meeting which will be held on
16 June 2023. For the first time our AGM will be staged
at the recently completed Trident Park Conference Hall.
Indeed, our AGM will shortly be followed on 28
June by the official inauguration of the entire
project consisting of both The Brewhouse (a
Farsons Group project) and Trident Park.
We are of course most pleased and satisfied that
this ambitious and pioneering project is now
complete and open for business. Trident Park
is for M alta a unique environmentally friendly
business park development, with all the related
amenities sought after by discerning tenants. It
consists of newly built areas and the carefully
renovated spaces of the historic building that
was constructed over 70 years ago. The original
iconic façade has been painstakingly restored
as have the old Farsons’ main entrance and
board room, which now form part of the Trident
Park conference facility. This annual report
illustrates the various spaces and gardens within
the project that have been created with much
enlightened architectural thought and planning.
The design concept and resulting finished
project have been met with acclaim by both the
general public and many authoritative critics.
The overall aesthetics and environmental
features of the project have been well received
as has the “green” cooling technology used
in the building. The very high standards of
the design and finishings have been very
instrumental in attracting tenants to Trident
Park. As many of you will remember from past
annual reports, the overall design and oversight
of the project has been led by the renowned
and world-acclaimed architect Ian Ritchie. His
very high standards and meticulous attention
to detail have been unerring and can be readily
admired and appreciated in the finished project
with its seven sustainable, people and business
friendly office units separated by the carefully
designed garden areas that provide the light and
space so valued by our growing tenant roll.
Of course, the sheer size of the project involved
a large team of professionals with whom we
have been privileged to work over the past 10
years - which is when we first started working
on the concept stage of the master plan. It has
been a long journey that has required stamina,
determination, teamwork, resilience, focus and
clear thinking. I need not remind you all that
for nearly two and a half years from February
2020 we also had to face the challenges posed
by the COVID-19 pandemic, with all its resulting
negative consequences.
Notwithstanding all the inflationary pressures
arising from the aftermath of the pandemic and
the outbreak of the war in Ukraine, I am glad to
be able to report that the project was completed
at very close to the originally authorized budget.
Although the total capital spend exceeded
estimates by some 10%, much of the difference
can be attributed to additionally authorized
works that fell outside the scope of the initial
plans, and which were subsequently approved
as the project progressed. These variations have
ultimately served to benefit and improve the
design and project offering.
In his statement featured in this Annual Report,
our Chief Executive Officer, Charles Xuereb has
given details of the project work involved during
this final year of construction and finishings. On
behalf of the board, I wish to congratulate him
and his team for delivering the finished product
to the board’s satisfaction. This has been no
mean achievement, especially having to face the
constraints I have referred to above.
02 CHAIRMAN’S STATEMENT
ANNUAL REPORT 2022/23
TRIDENT ESTATES PLC
Chairman’s Statement .03
ANNUAL REPORT 2022/23
TRIDENT ESTATES PLC
CHAIRMAN’S STATEMENT 03
Photo by Joe Smith
04 CHAIRMAN’S STATEMENT
ANNUAL REPORT 2022/23
TRIDENT ESTATES PLC
The CEO also reports on the healthy demand
for the various spaces available for rent. At the
time of going to print we have registered signed
tenancy agreements amounting to an occupancy
level of 63%, which I regard as quite a remarkable
achievement given that the increase in supply of
office space may now exceed market demand.
This take up of space is indeed encouraging and
your board feels confident about the Group’s
prospects, particularly as we are also at this time
at various stages of negotiation with additional
prospective tenants.
The Group’s results for the year ended 31st January
2023 reflect this upward trend. Group Revenue
amounted to €2.4 million, more than twice last
year’s revenue of €1.1 million. The increase was
nearly all due to new tenancy agreements entered
into at Trident Park, which commenced operations
in the first quarter of the financial year. Earnings
before interest and tax amounted to €1 million,
substantially more than last year.
The bottom-line results after tax of €6.6 million
have been materially influenced by a fair value
gain after tax of €6.1 million on Trident House, an
investment property that currently houses the
operations of Quintano and Food Chain (Farsons
Group companies). The latter have given notice
that they intend to move out of the premises in
2026 and your board is considering potential
options for the site as part of a strategic review
that will cover the next phases of the Trident
Estates business plan. This review will of course
also include future capital requirements and how
these should be funded. As noted in the CEO’s
report, the potential of the Trident House site
has also been recognised by other third parties
and a number of enquiries and expressions of
interest have been received. These enquiries are
currently being assessed by the Board as part of
the strategic review referred to above.
The overall capital investment in the Trident Park
project (including land value) amounted to €66
million. As you will recall, this has been financed
by both shareholder capital and bank loans. The
current increase in interest rates resulting from the
high levels of inflation unleashed by Covid 19 and the
Ukraine war are a matter of concern, and we have
been in discussion with our bankers in this regard.
I would like to conclude by stating once again
that it is most satisfying to be able to report
that we have managed to deliver a most unique
project after many years of pursuing a vision that
demanded difficult decisions and risk taking.
Trident Park should not be regarded as a trading
asset but rather as a long-term capital investment
that your board believes has considerable
potential for appreciation over the medium to
long term. We have got off to an encouraging
start in FY 2023 in terms of attracting an
impressive list of prestigious tenants – and we
will seek to build on this momentum. We would
not have succeeded had it not been for the
quality of our management team and the team
of consultants who we engaged over the years.
There are many I should mention, however this
report would not be the correct medium in which
to do so. We are indebted to them all.
As noted above, we have applied considerable
resources towards the completion of the Trident
Park project. Rental revenue streams are now
starting to build nicely, but do not permit the
Board to recommend the payment of a dividend
for the financial year under review, particularly
as a significant proportion of the reported profit
for the year results from a revaluation uplift.
However, you can be sure that the question of the
declaration of dividends will be kept under regular
review as it is the wish of the Board to reward
the shareholders for the capital that they have
committed to the Group.
I wish to thank my fellow director colleagues
for their support and constant encouragement
throughout these past five years since T rident
entity in early 2018.
Our thanks are also due to our legal advisors
Mamo TCV and our auditors PwC.
Louis A. Farrugia
Chairman
19 May 2023
Photo by Joe Smith
CHAIRMAN’S STATEMENT 05
ANNUAL REPORT 2022/23
TRIDENT ESTATES PLC
DIRECTORS
FROM LEFT TO RIGHT – Ms Nadine Magro – Company Secretary, Mr Vincent Curmi – Vice Chairman, Mr Alberto Miceli Farrugia,
Mr Louis A. Farrugia – Chairman, Marquis Marcus John Scicluna Marshall, Mr Charles Borg,
Mr Roderick Chalmers, Mr Michael Farrugia, Prof.Avv. Alberto Stagno d’Alcontres
06 DIRECTORS
ANNUAL REPORT 2022/23
TRIDENT ESTATES PLC
SENIOR MANAGEMENT
AND BOARD COMMITTEES
Trident Team – Senior Management, Operations and Maintenance staff
SENIOR MANAGEMENT
Charles Xuereb
Chief Executive Officer
Dr Ing. Christopher Ciantar
Chief Operations Officer
Andrea Mangion
Financial Controller
AUDIT COMMITTEE
Roderick Chalmers
Chairman
Charles Borg
Vincent Curmi
Alberto Miceli Farrugia
RELATED PARTY
TRANSACTIONS COMMITTEE
Vincent Curmi
Chairman
Charles Borg
Alberto Miceli Farrugia
REMUNERATION COMMITTEE
Charles Borg
Chairman
Marquis Marcus John Scicluna Marshall
Prof.Avv. Alberto Stagno d’Alcontres
NOMINATION COMMITTEE
Louis A. Farrugia
Chairman
Marquis Marcus John Scicluna Marshall
Prof.Avv. Alberto Stagno d’Alcontres
BOARD PERFORMANCE
EVALUATION COMMITTEE
Vincent Curmi
Chairman
Charles Borg
Alberto Miceli Farrugia
SENIOR MANAGEMENT AND BOARD COMMITTEES 07
ANNUAL REPORT 2022/23
TRIDENT ESTATES PLC
CHIEF EXECUTIVE OFFICER’S
REVIEW
FINANCIAL RESULTS
Revenues for the Group for the financial year
under review amounted to €2,354,000, more
than double the turnover figure reported for the
previous year (FY2022: €1,128,000). This results
from new rental income coming on stream as
tenants gradually move into Trident Park.
Operating profits for the year amounted to
€1,267,000 (FY2022: €323,000). As a result of
a fair value gain of €6,749,000 (FY 2022: nil) on
our investment property portfolio (see below
for details), profit before taxation for the year
amounted to €7,486,000 (FY2022: €141,000). The
tax charge for the year amounted to €912,000
(FY2022: €78,000) and includes a deferred tax
charge on the fair value gain of €675,000.
COMPLETION OF THE WORKS
AND WELCOMING TENANTS
As noted above, FY2023 saw us race to the
finishing line in our efforts to complete the final
phases of the Trident Park development. Apart
from addressing the snagging lists that are
inevitable in a development of this magnitude, our
major efforts were directed at the completion of
the impressive Trident Park Conference Facility,
which included the restoration of the original (and
historic) Farsons Boardroom.
This facility welcomed its first guests on 25 March
2023, to compliments all round on the quality and
high standard of the offering, including the top
of the range hi-tech conference equipment that
has been installed, extending to a 15 square metre
LED screen. The Lewis V. Farrugia Boardroom has
been meticulously restored, as have the reception
area and foyer, with the original woodwork and
marble flooring being carefully restored and
re-laid. The entire area has been furnished with
bespoke pieces, and our impressive art collection
has been brought out of storage and rehung.
Another part of the proud Farsons industrial and
architectural heritage has been meticulously
brought back to life. Bookings for the facility are
gradually picking up momentum and we expect
them to be well used.
This last year also saw the management team
switch to operational mode as new tenants
took up occupancy, gradually populating the
campus. Strong technical support was provided
to incoming tenants and any initial teething
problems overcome. At the same time, the
completed development attracted a lot of interest
from prospective new tenants and many on site
viewings and presentations have been held.
The demand for space at Trident Park has
come from a wide spectrum of businesses and
institutions, and new tenants onboarded ranged
from financial services institutions, companies
operating in the insurance sector, regulatory
authorities, as well as property holding, gaming,
Edtech and software services and solutions
corporations. The wide variety of vibrant interest
I am pleased to present to you the Company’s annual report for
the financial year ended 31 January 2023 (FY2023). It has been
a year that has presented us with many challenges as we raced
to complete the final phases of the Trident Park project whilst at
the same time moving from capital works to operational mode as
we had the pleasure of welcoming a growing number of tenants to
our wonderful development. And as always, the other properties
in our quality portfolio also required ongoing attention.
08 CHIEF EXECUTIVE OFFICER’S REVIEW
ANNUAL REPORT 2022/23
TRIDENT ESTATES PLC
OPERATING PROFITS
0
€300,000
€600,000
€900,000
€1,200,000
€1,500,000
202320222021
REVENUE
202320222021
0
€500,000
€1,000,000
€1,500,000
€2,000,000
€2,500,000
PROFIT BEFORE TAX AND
FAIR VALUE MOVEMENTS
0
€200,000
€400,000
€600,000
€800,000
202320222021
ANNUAL REPORT 2022/23
TRIDENT ESTATES PLC
CHIEF EXECUTIVE OFFICER’S REVIEW 09
augurs well for the future of the development
– and for those tenants providing catering
and other support services within the overall
development, including at The Brewhouse.
Whereas we have undertaken a number of
low key marketing campaigns, we have found
that the unique features of the Trident Park
campus have very quickly marketed themselves,
and many enquiries have come via direct
calls. Furthermore, our existing tenants have
also been strong promoters of Trident Park,
offering positive words and encouragement to
prospective tenants concerning the facilities. I
would like to acknowledge and thank our tenants
for their support in this regard. Over the past
few months as space has been taken up, we have
witnessed a growing sense of community and
contentment among and between our tenants.
Due to the strong demand for smaller and
flexible office space, we elected to split up a
single floor plate into smaller cellular offices
to meet this requirement, where tenants can
enjoy the advantage of lockable offices whilst
sharing breakout space, kitchenette and
restrooms facilities with other tenants. We have
also thought about providing smaller meeting
rooms within the floor, a far less formal set-up
than that of our magnificent Boardroom. This
configuration has been much appreciated by
tenants and third parties alike, adding value to
Trident Park’s diverse offering. As a result of the
strong take up of this flexible space, a second
multiple tenancy floor is currently work in
progress and has been almost fully taken up.
Our F&B outlet, operated by the Vecchia Napoli
franchise, is reporting growing turnover since
opening in July last year, and our gym operators,
Truxton Fitness, are also providing similar
feedback as has The Brewhouse (Farsons Group
owned and operated). To further complement
the amenities available on campus to our
tenants, we were pleased to welcome the
setting up of a medical clinic, mainly providing
Photo by Joe Smith
10 CHIEF EXECUTIVE OFFICER’S REVIEW
ANNUAL REPORT 2022/23
TRIDENT ESTATES PLC
dentistry services, and complemented by a team of consultants and
physiotherapists offering their professional services from the same
clinic facilities.
The Trident Park childcare centre is also now in operation, providing the
requisite peace of mind and comfort to parents at Trident Park. Priority
is being given to parents of employees within Trident Park who can drop
off their children and proceed to their workplace.
The portfolio of quality tenants that we have managed to attract is
indeed impressive. As at the date of writing this report 63% of available
space has been signed up and we are in various stages of negotiation
with a number of prospective tenants. We look forward to welcoming
our new tenants and we are targeting a material increase in our
occupancy rate over the next year.
Sustainability
Feature
1
LIFESTYLE THAT
HARNESSES THE
ENVIRONMENT.
Naturally lit offices,
landscaped gardens
and open walkways
harness this principle.
Photo by Joe Smith
Photo by Joe Smith
CHIEF EXECUTIVE OFFICER’S REVIEW 11
ANNUAL REPORT 2022/23
TRIDENT ESTATES PLC
Photo by Joe Smith
Sustainability
Feature
2
ENVIRONMENTAL
AND CULTURAL
HERITAGE.
Preservation of our
landmark façade and
remain respectful of
proportions and height,
thereby minimising
adverse visual impact.
12 CHIEF EXECUTIVE OFFICER’S REVIEW
ANNUAL REPORT 2022/23
TRIDENT ESTATES PLC
PROOF OF CONCEPT
Last summer saw us put our cooling system
to the test. Any concerns as to whether the
technology of the Thermally Activated Building
System (TABS) would work were quickly allayed.
Temperatures were comfortably cool in the
sweltering heat and pleasantly warm on the
coldest of winter days that were experienced in
the last months of 2022. Temperature readings
have been taken on a daily basis and all the data
required for the system to function according to
specifications has been collected and stored.
Our gardens have also been caringly
landscaped, with detail as to colour and choice
of plants being curated. The burst of vivid
colours provided by Mother Nature has brought
life into our open spaces, a splendid contrast
against the pure white of the buildings, providing
a tranquil area for our tenants to wind down and
enjoy periods of calm and reflection.
PROJECT COST
The rapidly increasing construction costs
experienced by the industry over the past year
came as no surprise given the inflationary and
supply chain dislocation resulting from the
aftermath of Covid and the war in Ukraine.
There can be no doubt that the Trident Park
project costs would have been significantly
higher if we were to go to contract today.
It was indeed propitious that we were able to
contract and deliver much of the project ahead
of the onset of this significant inflationary surge.
Furthermore, whereas at first sight it would seem
that actual project costs overran approved budgets
by close to 10%, a material part of this seeming
overrun can be accounted for by approved works
that fell outside the original project plans and
scope – as well as the absorption of VAT on capital
expenditure incurred on office floor plates that
are leased to companies not registered under
Article 10 of the VAT Act. Taking these factors
into account, we have delivered the project at
close to originally targeted costs – a tribute to the
management team, our contractors and our many
professional advisers.
THE OFFICE MARKET
ENVIRONMENT
Although COVID-19 restrictions have been lifted
and we are reportedly back to ‘normality’, hybrid
work from home (WFH) practices remain a reality.
This is having a negative impact on the demand
for office space as businesses, institutions and
authorities reassess their long term space
requirements. Paradoxically this trend has turned
into a positive for Trident Park as tenants are at
the same time seeking better quality space, albeit
on a smaller scale. Our project ticks the boxes
for those seeking high-quality, technologically
efficient and environmentally-friendly office
space, filled with air, natural light and ventilation
– all whilst retaining flexibility in terms of
configuration requirements and with ample
amenities within the campus footprint.
GOING FORWARD
The project may be complete, but of course the
work is never finished as the reality of the day
to day operational and maintenance challenges
of a site of this size supplant the challenges
of capital construction works. The aspirational
item on our agenda is to strive to attain full
occupancy through attracting additional high-
quality tenants. And our top priority remains
to secure a smooth and efficient operational
structure to ensure that all our tenants enjoy
to their full satisfaction the attractions and
amenities of the Trident Park complex.
In an effort to contain high inflation the
European Central Bank (ECB) has over the
past year increased its key deposit rate from
zero to (effective 10 May 2023) 3.25% - and
this rate is expected to rise further in the short
term. These rate increases will certainly have
an impact on our borrowing costs, and we are
currently in discussions with our bankers in this
regard. Higher interest rates mean higher costs,
and these will certainly have an impact on our
earnings during FY 2024. The pace at which the
ECB can reduce rates will be largely dependent
on its efforts to bring inflation down to more
normalised levels.
Now that the capital works at Trident Park are
coming to a close and the office and related
amenities space is rapidly being taken up, I
would like to pay tribute to my team and the
many advisors who assisted us over the past
five years. It has required a huge effort during
difficult and testing times – and all can look on at
the magnificent and spectacular finished project
with a strong sense of pride and achievement.
Whilst there will now be a strong focus on the
operational requirements of Trident Park – the
management team in conjunction with the Board
are in the course of undertaking a comprehensive
strategic review of plans for the next phase of
growth for the Trident Estates group.
CHIEF EXECUTIVE OFFICER’S REVIEW 13
ANNUAL REPORT 2022/23
TRIDENT ESTATES PLC
Photo by Joe Smith
Sustainability
Feature
3
GREEN
CREDENTIALS.
Carefully selected
materials used during
construction and
finishing works to
ensure minimal impact
on the environment.
14 CHIEF EXECUTIVE OFFICER’S REVIEW
ANNUAL REPORT 2022/23
TRIDENT ESTATES PLC
OTHER DEVELOPMENTS
TRIDENT HOUSE
The Trident House premises on the outskirts
of Qormi are currently leased out to a related
entity, with the tenant expected to vacate the
premises by Q1 2026. Following a re-assessment
by the Board of the potential opportunities that
this site provides to the Group, the valuation of
the site has been prudently and conservatively
reassessed at €18 million – an increase of €6.75
million on the previous carrying value of the
property. This increase in fair value has been
recognised as a fair value gain in the FY2023
financial statements. The potential for the site has
also been recognised by other third parties and a
number of enquiries and expressions of interest
have been received. These enquiries are currently
being assessed by the Board as part of a strategic
review that is underway.
PIZZA HUT BISAZZA
Food Chain Ltd., as tenants of our property in
Bisazza Street, Sliema, operating as Pizza Hut,
submitted a formal request for early termination
of the lease which was due to expire in 2031,
quoting market challenges in the catering
sector. The search for a new tenant commenced
immediately and I am pleased to inform you that
an agreement has been signed with an unrelated
party on advantageous terms, and it is expected
that the new tenant will take possession of the site
in October 2023 in anticipation of commencing
operations there from January 2024
EX-KFC GZIRA
Although the possibility of development of the
former KFC Gzira site was thoroughly explored
by the Board, it was decided to defer capital
investment and development for the time being.
The premises have now been leased out to an
external third party for a di fermo period of five
years, automatically renewable for two consecutive
periods of 3 + 2 years, with the last period of two
years being renewable at our discretion.
CONCLUSION
As noted above, we have now shifted gear to the
operational and tenancy aspects of the business.
We are confident that the quality of the Trident Park
development as well as that of our other properties
allows us to compete in what is an increasingly
competitive market as a result of the attention given to
the unique combination of environmental credentials,
innovation, technical excellence, quality and service. We
are firm in our belief in the long-term potential of the
Trident Park project as is evident from the strong tenant
interest in the property. From the outset, we pledged
that we would aim for excellence. We are pleased to
inform you that we are in the final stages of BREEAM
accreditation, making us pioneers locally, and putting
us on the map at an international level.
I feel honoured to have been chosen to be at the helm
of this success story, and to have led our small and
very hard working team in delivering what was a vision
into the reality of what Trident Park is today – Malta’s
pre-eminent office address providing the unique
green office campus that meets the environmental
and amenity requirements that are increasingly
being demanded by discerning tenants. I must close
by thanking my team for their constant support,
commitment and energy, you, shareholders, for
believing in and pursuing this vision, and the Board of
Directors for their support and their faith in the team
that I have been privileged to lead.
CHIEF EXECUTIVE OFFICER’S REVIEW 15
ANNUAL REPORT 2022/23
TRIDENT ESTATES PLC
Photo by Joe Smith
Sustainability
Feature
4
SUSTAINABILITY.
INNOVATION.
COMFORT.
Pioneering innovative
technology to
provide comfortable
temperatures whilst
also reducing energy
consumption.
ANNUAL REPORT 2022/23
TRIDENT ESTATES PLC
16 CHIEF EXECUTIVE OFFICER’S REVIEW
CONSOLIDATED
FINANCIAL
STATEMENTS
2022/23
18—20
DIRECTORS’ REPORT
21—26
CORPORATE GOVERNANCE
STATEMENT
27—30
REMUNERATION REPORT
31—32
STATEMENTS OF
FINANCIAL POSITION
33
STATEMENTS OF
COMPREHENSIVE INCOME
34
STATEMENTS OF
CHANGES IN EQUITY
35
STATEMENTS OF CASH FLOWS
36—60
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
61
SHAREHOLDER INFORMATION
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
17
DIRECTORS’ REPORT
The Board of Directors is pleased to present their report and the Group’s audited
consolidated financial statements for the year ended 31 January 2023.
REVIEW OF THE BUSINESS
Trading Performance
The Group’s revenue for the year increased substantially to
€2,354,000 (2022: €1,128,000). This considerable increase in
revenue is primarily attributable to the commencement of the
Trident Park operation.
The Group’s operating costs increased to €1,141,000 (2022:
€805,000), accounting for the operational costs of Trident
Park. The Group’s finance costs increased to €530,000 (2022:
€182,000), with the increase being attributable to interest costs
incurred on the bank loan facilities no longer being capitalised from
the commencement of the second half of the financial year.
The Group registered a fair value gain on the Trident House property
of €6,748,000 and a corresponding deferred tax expense of €675,000.
Prior to any fair value gains, the Group registered a profit before
tax of €737,000 (2022: €141,000) and a net profit of €500,000
(2022: €63,000), with the increase in bottom-line profitability being
attributable to the commencement of operations at Trident Park. The
total comprehensive income for the year (including fair value gains)
amounted to €6,574,000 (2022: €63,000).
Shareholder’s equity as at the year-end amounted to €59.7 million
(2022: €53.1 million). The Group continued to draw down on
available bank facilities, resulting in bank borrowings increasing
from €16.8 million to €25.2 million in order to fund works on the
Trident Park development. As at year end, the Group had available
bank facilities totalling €3.3 million which are earmarked to finance
the completion of the Trident Park project.
Investments and property interests
Trident Park
The works carried out during the year primarily related to the
finishing, landscaping and addressing any snagging and remedial
works around the property. Works on the main board room and
conference facility were carried out in the second half of the
financial year and were completed in March 2023 immediately
following which the doors were opened for the first conference held
at Trident Park.
The first tenants at Trident Park moved in during the first quarter
of the financial year, with additional tenants taking up occupancy
over the course of the rest of the year. The general public was
also attracted to the property during the second half of the
financial year, with the eateries (Vecchia Napoli at Trident Park,
and Kettles and Cisk Tap at The Brewhouse) having opened their
doors to welcome customers in July 2022. The gym operators also
commenced their tenancy in November 2022 and began receiving
memberships from both the tenants at Trident Park and The
Brewhouse, as well as the general public.
Trident House
The Trident House property is one of the Group’s largest investment
properties in terms of land size, measuring 13,600 square metres.
Trident House currently houses the operations of Quintano Foods
Limited and Food Chain Limited (Farsons Group companies). These
tenants have given notice that they intend to vacate the premises
in 2026 and the board is considering potential options for the site
as part of a strategic review that will cover the next phases of the
Trident Estates business plan. The potential of the Trident House
site has also been recognised by other third parties and a number
of enquiries and expressions of interest have been received. These
enquiries are currently being assessed by the Board as part of the
strategic review that is underway.
Other properties
During the financial year, the Group recognised revenue for a full
year of occupancy from the Veranda (ex-Sardinella) property lease.
The KFC Gzira lease was extended until the third quarter of 2022,
following which the property was vacated by the lessee. In the
subsequent financial year, the Group signed on a new tenant with a
lease at a more favourable rate commencing from 1st July 2023. The
remainder of the Group’s rental portfolio remains fully let.
OUTLOOK FOR FINANCIAL YEAR
ENDING 31 JANUARY 2024
During the financial year ending 31 January 2024, the focus of
management will revolve around the operation of the Trident
Park property and, together with the Board, the completion of
the strategic review. Furthermore, management continues to be
actively handling enquiries and negotiating lease agreements with
prospective tenants.
18 DIRECTORS’ REPORT
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
The interest in commercial spaces has improved with a notable
increase in sign-ups during the first half of (calendar) 2023. The
unique selling proposition of Trident Park has attracted a range of
quality potential tenants and word-of-mouth recommendations
from existing tenants have also stimulated interest.
The demand for commercial property has changed considerably
over the past few years, particularly in the wake of the pandemic.
Companies have downsized their requirement for office space
following the increased adoption of work-from-home arrangements
with their employees. Furthermore, a significant portion of the
market remains underserved for sole practitioners and small
businesses looking to have an office in a prestigious address with an
array of amenities and accessible parking available. Management
has responded to the demand by providing finished, furnished and
fully serviced shared spaces to smaller but reputable tenants at
attractive rental rates. These shared tenancies have quickly been
taken up and management is now working on preparing additional
floors of shared tenancy spaces.
Despite the difficult overall business environment in which Trident
Park is operating, particularly with an increase in supply at the
upper end of office space market, the board and management are
highly encouraged by the very positive response from the market to
the Trident Park development and its amenities. The expectation is
that the occupancy rate will continue to grow over the forthcoming
year resulting in a satisfactory increase in rental revenues.
One negative development in store for FY 2024 relates to increased
borrowing costs. In an effort to contain the high levels of inflation being
experienced across the EU, the European Central Bank (ECB) has over
the past year raised its key deposit rate from zero to (effective 10 May
2023) 3.25%. This rate is expected to rise further over 2023 before
perhaps easing from 2024 and beyond. These rate increases will have
an impact on borrowing costs, and the Group is currently in discussions
with its bankers in this regard. Higher interest rates will have an impact
on earnings during FY 2024. The pace at which the ECB can reduce
rates will be largely dependent on the success of its efforts to bring
inflation down to more normalised levels.
FINANCIAL RISK MANAGEMENT
The Group’s and Company’s activities expose it to a variety of
financial risks, including market risk (including fair value interest
rate risk and cash flow interest rate risk), credit risk and liquidity
risk. Refer to Note 2 in these financial statements.
PROPERTY VALUE RISK AND EXPOSURE
TO GENERAL MARKET CONDITIONS
Property values, including the health of the commercial property
rental market, are affected by changing demand, changes in
general economic conditions, changing supply within a particular
area of competing space and attractiveness of real estate relative
to other investment choices. Other factors such as changes in
planning and tax laws, and interest and inflation rate fluctuations
would also have an impact on capital values and income streams
of properties. The Company monitors all these factors, and seeks
advice accordingly, as it manages its property portfolio.
DIVIDENDS AND RESERVES
The statements of comprehensive income are set out on page 33.
The Boad of Directors did not declare an interim dividend during
the year, and in view of the current stage of the finalisation of the
Trident Park project and the build-up of rental revenue streams
therefrom, do not believe that it would be appropriate or prudent to
recommend the declaration of a final dividend to the forthcoming
Annual General Meeting of the Company.
Retained profits carried forward at the reporting date amounted
to €5.4 million (2022: €4.9 million) for the Group and €5.1 million
(2022: €4.8 million) for the Company.
DIRECTORS
The Directors who held office during the year were:
Louis A. Farrugia – Chairman
Vincent Curmi – Vice Chairman
Alberto Miceli Farrugia
Prof.Avv. Alberto Stagno d’Alcontres
Charles Borg
Marquis Marcus John Scicluna Marshall
Michael Farrugia
Roderick Chalmers
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
FOR THE FINANCIAL STATEMENTS
The Directors are required by the Maltese Companies Act, 1995 to
prepare financial statements which give a true and fair view of the
state of affairs of the Group and the parent Company as at the end
of each reporting period and of the profit or loss for that period.
In preparing the financial statements, the Directors are responsible for:
• ensuring that the financial statements have been drawn up in
accordance with International Financial Reporting Standards as
adopted by the EU;
• selecting and applying appropriate accounting policies;
•
making accounting estimates that are reasonable in the circumstances;
• ensuring that the financial statements are prepared on the
going concern basis unless it is inappropriate to presume that
the Group and the parent Company will continue in business as
a going concern.
The Directors are also responsible for designing, implementing and
maintaining internal control as 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 Maltese Companies
Act, 1995. They are also responsible for safeguarding the assets of the
Group and the parent Company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
DIRECTORS’ REPORT 19
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
The financial statements of Trident Estates plc for the year ended
31 January 2023 are included in the Annual Report 2023, which is
available on the Company’s website. The Directors are responsible
for the maintenance and integrity of the Annual 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.
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 Group and the parent Company as at 31 January
2023, and of the financial performance and the cash flows for
the year then ended in accordance with International Financial
Reporting Standards as adopted by the EU; and
• the Annual Report includes a fair review of the development and
performance of the business and the position of the Group and the
parent Company, together with a description of the principal risks
and uncertainties that the Group and the parent Company face.
SHAREHOLDER REGISTER INFORMATION
PURSUANT TO CAPITAL MARKETS RULE 5.64
Share capital information of the Company is disclosed in Note 10 of
the financial statements on page 50.
The issued share capital consists of one class of ordinary shares
with equal voting rights attached and freely transferable.
The list of shareholders holding 5% or more of the equity share
capital is disclosed in this Annual Report.
Every shareholder owning twelve (12%) of the ordinary issued share
capital of the Company or more shall be entitled to appoint one
director for each and every twelve per cent (12%) of the ordinary share
capital owned by such shareholder and such shareholder may remove,
withdraw or replace such director at any time. Any appointment,
removal, withdrawal or replacement of a director to or from the Board
shall take effect upon receipt by the Board or the Company secretary
of a notice in writing to that effect from the shareholder owning twelve
per cent (12%) of the ordinary issued share capital of the Company or
more. Any remaining fractions will be disregarded in the appointment of
the said directors but may be used in the election of further directors at
an Annual General Meeting. The Chairman is appointed by the directors
from amongst the directors appointed or elected to the Board.
The rules governing the appointment, election or removal of directors
are contained in the Company’s Articles of Association, Articles 93 to
102. An extraordinary resolution approved by the shareholders in the
general meeting is required to amend the Articles of Association.
The powers and duties of directors are outlined in Articles 84 to 91 of
the Company’s Articles of Association. In terms of Article 12 of the said
Articles of Association, the Company may, subject to the provisions of
the Maltese Companies Act, 1995 acquire or hold any of its shares.
The Company does not have a Collective Agreement regulating
redundancies, early retirement, resignation or termination of
employment of employees. No employment contracts are in place
between the Company and its directors, except as disclosed in the
Remuneration Report.
It is hereby declared that, as at 31 January 2023, the Company is not
party to any significant agreement pursuant to Listing Rules 5.64.10.
Furthermore, the Board declares that the information required under
Listing Rules 5.64.5 and 5.64.7 is not applicable to the Company.
REMUNERATION REPORT
The Remuneration Report is set out on pages 27 to 30 of this
Annual Report and sets out details of the terms of reference and
membership of the Remuneration Committee and the Remuneration
strategy and policy of the Trident Group. The Remuneration Report
also sets out the required details of the remuneration paid to
Directors and the Group Chief Executive and of senior management.
In accordance with Capital Market Rules 12.26L and 12.26M, the
Remuneration Report will be subject to an advisory vote by the
Shareholders at the forthcoming Annual General Meeting (AGM)
and will be made available on the Company’s website for a period of
10 years thereafter. The contents of the Remuneration Report have
been reviewed by the external auditors to ensure that it confirms
with the requirements of the Capital Market Rules.
AUDITORS
The auditors, PricewaterhouseCoopers, have indicated their
willingness to continue in office, and a resolution for their re-
appointment will be proposed at the Annual General Meeting.
Signed on behalf of the Board of Directors on 19 May 2023 by
Louis A. Farrugia (Chairman) and Roderick Chalmers (Director) as per
the Directors’ Declaration on ESEF Annual Financial Report submitted
in conjunction with the Annual Financial Report.
Registered address:
Nadine Magro
Company Secretary
19 May 2023
20 DIRECTORS’ REPORT
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
CORPORATE GOVERNANCE STATEMENT
A. INTRODUCTION
This statement is being made by Trident Estates plc (“TE”)
pursuant to Listing Rules 5.94 and 5.97 issued by the Listing
Authority of the Malta Financial Services Authority and sets out the
measures taken to ensure compliance with the Code of Principles
of Good Corporate Governance (the Code) contained in Appendix
5.1 to Chapter 5 of the said rules. In terms of Listing Rule 5.94, TE
is obliged to prepare a report explaining how it has complied with
the Code.
TE acknowledges that the Code does not prescribe mandatory
rules but recommends principles so as to provide proper incentives
for the Board and TE’s management to pursue objectives that are
in the interests of the Company and its shareholders.
TE adheres to generally accepted standards of good corporate
governance encompassing the requirements for transparency,
proper accountability and the fair treatment of shareholders. The
Board has therefore endorsed the Code of principles and adopted
it. As demonstrated by the information set out in this statement,
together with the information contained in the Remuneration
Report, TE believes that it has, save as indicated in the section
entitled Non-compliance with the Code, applied the principles in
compliance with the provisions of the Code. In the Non-compliance
section, the Board indicates and explains the instances where it
has departed from or where it has not applied the Code, as allowed
by the Code.
B. COMPLIANCE WITH THE CODE
Principle 1: The Board
The Board’s role and responsibility is to provide the necessary
leadership, to set strategy and to exercise good oversight and
stewardship. In terms of the Memorandum of Association of TE, the
affairs of the Company are managed and administered by a board
composed of eight directors.
The Board is in regular contact with the Chief Executive Officer
through the Chairman in order to ensure that the Board is in
receipt of timely and appropriate information in relation to the
business of TE and management performance. This enables
the Board to contribute effectively to the decision-making
process, whilst at the same time exercising prudent and effective
controls. Directors are provided prior to each meeting with the
necessary information and explanatory data as may be required
by the particular item on the agenda. Comprehensive financial
statements are also provided as necessary. The Company uses
the services of external legal advisors. The Directors are entitled
to seek independent professional advice at any time at the
Company’s expense where necessary for the proper performance
of their duties and responsibilities.
The Board delegates specific responsibilities to a number of
committees, notably the Related Party Transactions Committee, the
Audit Committee, the Remuneration Committee, the Nomination
Committee and the Board Performance Evaluation Committee, each
of which operates under specific terms of reference. Further detail
in relation to the committees and the responsibilities of the Board is
found in Principles 4 and 5 of this statement.
Principle 2: Chairman and Chief Executive
Officer
The statute of TE provides for the Board to appoint from amongst
its Directors a Chairman and a Vice-Chairman.
The Chairman is responsible to lead the Board and set its agenda,
ensure that the Directors of the Board receive precise, timely
and objective information so that they can take sound decisions
and effectively monitor the performance of the Company, ensure
effective communication with shareholders and encourage active
engagement by all members of the Board for discussion of complex
or contentious issues.
The role of the Chief Executive Officer is to ensure effective overall
management and control of Group business and proper co-ordination
of the activities undertaken by the Group, and is responsible:
1. for the formulation and implementation of policies as approved
by the Board;
2. to achieve the objectives of the Group as determined by the Board;
3. to devise and put into effect such plans and to organise,
manage, direct and utilise the human resources available and
all physical and other assets of the Group so as to achieve the
most economically efficient use of all resources and highest
possible profitability in the interest of the shareholders and all
other stakeholders.
The Chief Executive Officer reports regularly to the Board on the
business and affairs of the Group and the commercial, economic
and other challenges facing it. He is also responsible to ensure
that all submissions made to the Board are timely, give a true and
correct picture of the issue or issues under consideration, and are
of high professional standards as may be required by the subject
matter concerned.
The Chairman also chairs a fortnightly Executive Committee
Meeting, during which operational issues are discussed.
The above arrangements provide sufficient delegation of powers
to achieve effective management. The organisational structure
ensures that decision making powers are spread wide enough
to allow proper control and reporting systems to be in place and
maintained in such a way that no one individual or small group of
individuals actually has unfettered powers of decision.
CORPORATE GOVERNANCE STATEMENT 21
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
Principle 3: Composition of the Board
Each member of the Board offers core skills and experience that are
relevant to the successful operation of the Company. Whilst relevance
of skills is key, a balance between skills represented is sought
through the work of the Nominations Committee to ensure that there
is an appropriate mix of members with diverse backgrounds.
The Board is composed of a Chairman, a Non-Executive Vice-
Chairman and six other Non-Executive Directors.
EXECUTIVE DIRECTORS
Mr Louis A. Farrugia – Chairman
NON-EXECUTIVE DIRECTORS
Mr Vincent Curmi – Vice Chairman
Mr Charles Borg
Mr Roderick Chalmers
Mr Michael Farrugia
Mr Alberto Miceli Farrugia
Marquis Marcus John Scicluna Marshall
Prof.Avv. Alberto Stagno d’Alcontres
The Chief Executive Officer attends all board meetings, albeit
without a vote, in order to ensure his full understanding and
appreciation of the Board’s policy and strategy, and so that he
can provide direct input to the Board’s deliberations. The Board
considers that the size of the Board, whilst not being large as to
be unwieldy, is appropriate, taking into account the size of the
Company and its operations. The combined and varied knowledge,
experience and skills of the Board members provide a balance of
competences that are required and add value to the functioning of
the Board and its direction to the Company.
It is in the interest of each of the three major shareholders (who are
the original promoters of the Company) to nominate as directors,
knowledgeable, experienced and diligent persons.
Apart from this, informal arrangements, which do not infringe on
their rights as shareholders, exist for consultation prior to any
changes in the membership of the Board, as well as to assist in the
identification of suitable persons who can be nominated for election
by the other shareholders at general meetings, and who can bring
in an independent viewpoint and particular knowledge to the
deliberations of the Board. Family relationships among Directors,
the Directors’ interest in the share capital of the Company as
disclosed in the Shareholder Information and the commonality of
Directors with Simonds Farsons Cisk plc (“SFC”) with which the
Company maintains contractual relationships, represent potential
conflicts of interest.
This notwithstanding, all Directors are considered to be
independent in that they do not hold any relationship with the
Company, a controlling shareholder or their management which
creates a conflict of interest such as to impair their judgement.
This has been ensured through the implementation of the
following measures:
i. Disclosure and Exclusion: a Director is obliged to disclose
any matter that may give rise to a potential or actual conflict.
Following this, the respective Director is excluded from any
deliberations and voting in respect of such matter.
ii. Related Party Transaction Committee: with regards to any
transactions which may be determined to be related party
transactions, such transactions are referred to and dealt by the
Related Party Transaction Committee (the “Committee”). As
with the situation at Board level, any Director who is a related
party with respect to a particular transaction is not permitted
to participate in the Committee’s deliberation and decision on
the transaction concerned. Furthermore, due to the fact that the
most common of matters in which a related party transaction
may arise would be in relation to a transaction with SFC, the
Committee is made up of Directors who are not common
directors on the boards of both SFC and the Company.
iii. Continuing Conflict: a Director having a continuing material
interest that conflicts with the interests of the Company
is obliged to take effective steps to eliminate the grounds
for conflict and should this not be possible, said Director is
encouraged to consider resigning.
iv. Separation of Family Interests: there are no ties or relationships
between management and the Directors
Principles 4 and 5: The Responsibilities of the
Board and Board Meetings
The Board meets regularly every month apart from other occasions
as may be needed. Individual directors, apart from attendance
at formal board meetings, participate in other ad hoc meetings
during the year as may be required, and are also active in board
sub-committees as mentioned further below, either to assure good
corporate governance, or to contribute more effectively to the
decision-making process.
Meetings held: ........................................................................................................12
Members Attended
Mr Louis A. Farrugia – Chairman ......................................................................12
Mr Vincent Curmi – Vice Chairman .................................................................12
Mr Charles Borg ..................................................................................................... 10
Mr Roderick Chalmers .........................................................................................12
Mr Michael Farrugia ...............................................................................................11
Mr Alberto Miceli Farrugia ...................................................................................11
Marquis Marcus John Scicluna Marshall ....................................................... 8
Prof. Avv. Alberto Stagno d’Alcontres ........................................................... 10
The Board, in fulfilling its mandate within the terms of the
Company’s Memorandum and Articles of Association, and
discharging its duty of stewardship of the Company and the Group,
assumes responsibility for the following:
22 CORPORATE GOVERNANCE STATEMENT
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
• reviewing and approving the business plan and targets that are
submitted by management, and working with management in
the implementation of the business plan;
• identifying the principal business risks for the Group and
overseeing the implementation and monitoring of appropriate
risk management systems;
• ensuring that effective internal control and management
information systems for the Group are in place;
• assessing the performance of the Group’s executive officers,
including monitoring the establishment of appropriate systems
for succession planning, and for approving the compensation
levels of such executive officers; and
• ensuring that the Group has in place a policy to enable it to
communicate effectively with shareholders, other stakeholders
and the public generally.
The Board is ultimately responsible for the Company’s system
of internal controls and for reviewing its effectiveness. Such a
system is designed to manage rather than eliminate risk to achieve
business objectives, and can provide only reasonable, and not
absolute, assurance against material error, losses or fraud.
Through the Audit Committee, the Board reviews the effectiveness
of the Company’s system of internal controls. In fulfilling its
responsibilities, the Board regularly reviews and approves various
management reports as well as annual financial plans, including
capital budgets. The strategy, processes and policies adopted for
implementation are regularly reviewed by the Board using key
performance indicators. To assist it in fulfilling its obligations, the
Board has delegated responsibility to the Chief Executive Officer.
Principle 6: Information and Professional
Development
The Chief Executive Officer is appointed by the Board and enjoys
the full confidence of the Board. The Chief Executive Officer,
although responsible for the recruitment and selection of senior
management, consults with the Board on the appointment of, and
on a succession plan for, senior management.
Training (both internal and external) of management and
employees is a priority, coordinated through the office of the Chief
Executive Officer. On joining the Board, a director is provided with
briefings by the Chairman and the Chief Executive Officer on the
activities of the Company’s business areas. Furthermore, all new
directors are offered a tailored induction programme. Directors
may, where they judge it necessary to discharge their duties as
directors, take independent professional advice on any matter
at the Company’s expense. Under the direction of the Chairman,
the Company Secretary’s responsibilities include ensuring
good information flows within the Board and its committees
and between senior management and Non-Executive Directors,
as well as facilitating induction and assisting with professional
development as required.
Directors have access to the advice and services of the Company
Secretary, who is responsible for ensuring adherence to board
procedures, as well as good information flows within the Board
and its committees. The Chairman ensures that board members
continually update their skills and the knowledge and familiarity
with the Company required to fulfil their role both on the Board and
on the Board committees.
The Company provides the necessary resources for developing and
updating its directors’ knowledge and capabilities. The Company
Secretary is responsible for advising the Board through the
Chairman on all governance matters.
Principle 7: Evaluation of the Board’s
Performance
The role of the Board Performance Evaluation Committee
chaired by a Non-Executive Director, is to deal with the Board’s
performance evaluation and identify ways how to improve the
Board’s effectiveness. The Board of Directors did not declare an
interim dividend during the year, and in view of the current stage
of the finalisation of the Trident Park project and the build-up of
rental revenue streams therefrom, do not believe that it would be
appropriate or prudent to recommend the declaration of a final
dividend to the forthcoming Annual General Meeting of
the Company. The Company Secretary discusses the results with
the Chairman of the Committee who then presents the same
to the Board together with initiatives undertaken to improve
the Board’s performance. The latest review has not resulted in
any material changes in the Company’s internal organisation or
in its governance structures. The Non-Executive Directors are
responsible for the evaluation of the Chairman of the Board.
Principle 8: Committees
Board Committees
The Board has set up the following subcommittees to assist it
in the decision-making process and for the purposes of good
corporate governance. The actual composition of these committees
is provided in the Annual Report, but as stated earlier, each of
the three major shareholders and the public shareholders are
represented as far as possible.
The Audit Committee’s primary objective is to protect the
interests of the Company’s shareholders and assist the directors in
conducting their role effectively so that the Company’s decision-
making capability and the accuracy of its reporting and financial
results are maintained at a high level at all times.
The Audit Committee is composed of four members – Mr Roderick
Chalmers (Chairman), Mr Vincent Curmi, Mr Alberto Miceli Farrugia
and Mr Charles Borg – all being Non-Executive Directors. All
directors on the Audit Committee are independent and, in the
opinion of the Board, are free from any significant business, family
or other relationship with the Company, its shareholders or its
management that would create a conflict of interest such as to
impair their judgement.
Mr Chalmers is a professional, qualified accountant with
competence in matters relating to accounting and auditing. The
Audit Committee as a whole has extensive experience in matters
relating to the Company’s area of operations, and therefore has the
relevant competence required under Listing Rule 5.118. The Audit
CORPORATE GOVERNANCE STATEMENT 23
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
Committee oversees the conduct of the external audits and acts to
facilitate communication between the Board, Management and the
external auditors.
The external auditors are invited to attend specific meetings of
the Audit Committee and are also entitled to convene a meeting
of the Committee if they consider that it is necessary so to do. The
Chairman, the Chief Executive Officer and the Financial Controller
are also invited to attend Audit Committee meetings. Members
of management may be asked to attend specific meetings at the
discretion of the Audit Committee.
During the year ended 31 January 2023, the Audit Committee held
four meetings.
The Related Party Transactions Committee is presided over
by the Non-Executive Vice Chairman and deals with and reports
to the Board on all transactions with related parties. In the case
of any director who is a related party with respect to a particular
transaction, such director does not participate in the Committee’s
deliberation and decision on the transaction concerned.
Control mechanisms relevant to the reporting of related party
transactions are in place to ensure that information is vetted and
collated on a timely basis, before reporting to the Related Party
Transactions Committee for independent and final review of the
transactions concerned.
The Remuneration Committee is dealt with under the
Remuneration Report which also includes the Remuneration
Statement in terms of Code Provisions 8.A.3 and 8.A.4.
The Nomination Committee chaired by the Chairman is entrusted
with leading the process for board appointments and to make
recommendations to it. Any proposal for the appointment of
a Director whether by the three major shareholders or by the
general meeting of shareholders should be accompanied by a
recommendation from the Board, based on the advice of the
Nomination Committee.
Every shareholder owning twelve percent (12%) of the ordinary
issued share capital or more, is entitled to appoint and replace a
director for each and every twelve (12%) of such shares, and the
remaining ordinary shares not so utilised are entitled to fill the
remaining unfilled posts of directors. Thus, each of the three major
shareholders who are named and whose holdings are listed in the
notes to the financial statements (page 69), normally each appoint
two directors for a total of six, the remaining two directors then
being elected by the general public shareholders.
Accordingly, no individual or small group of individuals will be in a
position to dominate the Board. The interests of the directors in the
shares of the Company are disclosed in this Annual Report.
Principles 9 and 10: Relations with Shareholders
and with the Market, and Institutional
Shareholders
The Company recognises the importance of maintaining a dialogue
with its shareholders and of keeping the market informed to ensure
that its strategies and performance are well understood.
The Board endeavours to protect and enhance the interests
of both the Company and its shareholders, present and future.
The Chairman ensures that the views of shareholders are
communicated to the Board as a whole.
The Board always ensures that all holders of each class of capital are
treated fairly and equally. The Board also acts in the context that its
shareholders are constantly changing and consequently, decisions
take into account the interests of future shareholders as well.
Shareholders appreciate the significance of participation in the
general meetings of the Company and particularly in the election
of directors. They hold directors to account for their actions, their
stewardship of the Company’s assets and the performance of
the Company.
The agenda for general meetings of shareholders and the conduct
of such meetings is arranged in such a manner to encourage valid
discussion and decision-taking.
The Chairman and the Chief Executive Officer also ensure that
sufficient contact is maintained with major shareholders to
understand issues and concerns.
The Company also communicates with its shareholders through
the Company’s Annual General Meeting (“AGM”) (further detail is
provided under the section entitled General Meetings).
The Chairman makes arrangements for the chairmen of the
Audit and Remuneration Committees to be available to answer
questions, if necessary.
Apart from the AGM, TE communicates with its shareholders by
way of the Annual Report and Financial Statements, by publishing
its results on an annual basis.
The Company’s website (www.tridentestatesplc.com) also contains
information about the Company and its business, including an
Investor Relations section.
In addition, the Company holds a meeting for stockbrokers
and financial intermediaries once a year to coincide with the
publication of its financial statements.
The Company Secretary maintains two-way communication
between the Company and its investors. Individual shareholders
can raise matters relating to their shareholdings and the business
of the Group at any time throughout the year and are given
the opportunity to ask questions at the AGM or submit written
questions in advance.
In terms of Article 51 of the Articles of Association of the Company
and Article 129 of the Maltese Companies Act, the Board may
call an extraordinary general meeting on the requisition of
shareholders holding not less than one tenth (1/10) of the paid-up
share capital of the Company. Minority shareholders are allowed to
formally present an issue to the Board.
In the event of conflicts arising between minority shareholders and
the three major shareholders, who are also the original promoters
of the Company, every effort shall be made to seek mediation.
24 CORPORATE GOVERNANCE STATEMENT
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
Principle 11: Conflicts of Interest
The Directors are strongly aware of their responsibility to act at
all times in the interest of the Company and its shareholders as a
whole and of their obligation to avoid conflicts of interest. The latter
may arise on specific matters. In such instances:
• a director is obliged to make full and frank disclosure with
respect to any matter where there is a potential or actual
conflict, whether such conflict arises from personal interests or
the interests of the companies in which such person is a director
or officer;
• the said director is excused from the meeting and accordingly is
not involved in the Company’s board discussion on the matter;
and
• the said director does not vote on any such matter.
A director having a continuing material interest that conflicts with
the interests of the Company, is obliged to take effective steps
to eliminate the grounds for conflict. In the event that such steps
do not eliminate the grounds for conflict then the director should
consider resigning.
On joining the Board and regularly thereafter, the directors
are informed of their obligations on dealing in securities of the
Company within the parameters of law, including the Listing Rules.
The directors’ interests in the share capital of the Company as
at 31 January 2023 and as at 30 April 2023 are disclosed in the
Shareholder Information.
Principle 12: Corporate Social Responsibility
The principal objective of the Company’s commitment to Corporate
Social Responsibility (CSR) is to provide support where possible
in aspects that include social, occupational, financial, cultural and
historical values.
C. NON-COMPLIANCE WITH THE CODE
Principle 4 (Code Provision 4.2.7):
This Code Provision recommends “the development of a
succession policy for the future composition of the Board and
particularly the executive component thereof, for which the
Chairman should hold key responsibility”. In the context of the
appointment of directors being a matter reserved exclusively to
TE’s shareholders (except where the need arises to fill a casual
vacancy) as explained under Principle 3 in Section B, and on the
basis of the Directors’ non-executive role, the Company does
not consider it feasible to have in place such a succession policy.
However, the recommendation to have in place such a policy will be
kept under review. An active succession policy is however in place
for senior executive positions in the Company including that of the
Chief Executive Officer.
D. INTERNAL CONTROL AND RISK
MANAGEMENT INTERNAL CONTROL
The key features of the Group’s system of internal control are
as follows:
Organisation:
The Board of Directors of the subsidiaries are made up of a
majority or all Board members of the Company and general and
common issues are discussed across the board.
Control Environment:
The Group is committed to the highest standards of business
conduct and seeks to maintain these standards across all of its
operations. Group policies and employee procedures are in place
for the reporting and resolution of fraudulent activities. The Group
has an appropriate organisational structure for planning, executing,
controlling and monitoring business operations in order to achieve
Group objectives.
Risk Identification:
Group management is responsible together with each Company’s
management, for the identification, evaluation, control and
reporting of major risks applicable to their areas of business.
Reporting:
The Group has implemented control procedures designed to
ensure complete and accurate accounting for financial transactions
and to limit the potential exposure to loss of assets or fraud.
Measures taken include physical controls, segregation of duties and
reviews by management.
On a monthly basis the Board receives a comprehensive analysis of
financial and business performance, including reports comparing
actual performance with budgets as well as analysis of any variances.
E. GENERAL MEETINGS
The manner in which the general meeting is conducted is outlined
in Articles 49 to 52 of the Company’s Articles of Association,
subject to the provisions of the Maltese Companies Act, 1995.
Save for the exceptional circumstances arising out of the legally
sanctioned delays allowed in times of the current pandemic, within
seven months of the end of the financial year, an Annual General
Meeting of shareholders is convened to consider the annual
consolidated financial statements, the directors’ and auditor’s
report for the year, to decide on dividends recommended by the
Board, to elect the directors and appoint the auditors. Prior to the
commencement of the Annual General Meeting, a presentation
is made to shareholders on the progress made and strategies
adopted during the year in the light of prevailing market and
economic conditions and the objectives set by the Board, and an
assessment on future prospects is given. The Group’s presence
on the worldwide web (www.tridentestatesplc.com) contains a
corporate information section.
CORPORATE GOVERNANCE STATEMENT 25
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
Apart from the above, the Group publishes its financial results
every six months, and from time to time issues public notices
regarding matters which may be of general interest or of material
importance to shareholders and the market in general, or which
may concern price sensitive issues.
At the time of the Annual General Meeting, the publication of
the six monthly report or significant events affecting the Group,
public meetings are held to which institutional investors, financial
intermediaries and brokers are invited to attend. Press releases are
also issued from time to time on the business activities of the Group.
All shareholders in the Shareholders’ Register on the Record Date
as defined in the Listing Rules, have the right to attend, participate
and vote at general meeting. A shareholder or shareholders
holding not less than 5% of the voting issued share capital may
request the Company to include items on the agenda of a general
meeting and/or table draft resolutions for items included in the
agenda of a general meeting. Such requests are to be received by
the Company at least forty-six (46) days before the date set for the
relative general meeting.
A shareholder who cannot participate in the general meeting
can appoint a proxy by written or electronic notification to the
Company. Every shareholder represented in person or by proxy is
entitled to ask questions which are pertinent and related to items
on the agenda of the general meeting and to have such questions
answered by the Directors or such persons as the Directors may
delegate for that purpose.
F. CODE OF CONDUCT
The Code of Conduct for TE employees was introduced in 2020.
The basic principles of the Company are a legacy of SFC and the
code reflects the same values of Success, Teamwork, Respect,
Integrity, Dynamism and Excellence which are abbreviated by the
acronym S.T.R.I.D.E.
TE’s reputation depends on how each of its employees conduct
themselves both individually and collectively as a company.
Therefore, the Code of Conduct is intended to serve as general
guidance for all employees who are expected to “do the right thing”
and to ensure the highest standards of integrity, mutual respect and
cordiality contributing to an ethical and professional environment.
The Code of Conduct makes it clear that the Board condemns any
form of bribery and corruption, improper payments as well as money-
laundering and has a zero-tolerance attitude to fraud malpractice and
wrongdoing, and a commitment to ethics and best practice.
TE employees have a responsibility to voice their concerns when
they suspect/know that their superiors/colleagues are involved in
something improper, unethical or inappropriate or have potentially
infringed the Code of Conduct. The Speak-Up policy was
established to ensure that all cases of suspected wrongdoing are
reported and managed in a timely and appropriate manner.
Signed by Louis A. Farrugia (Chairman) and Roderick Chalmers
(Director) on behalf of the Board on 19 May 2023
26 CORPORATE GOVERNANCE STATEMENT
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
REMUNERATION REPORT
1. TERMS OF REFERENCE AND MEMBERSHIP
The Remuneration Committee is composed of three independent
non-executive Directors. During the financial year ended 31 January
2023 (FY 2023), the Remuneration Committee was composed of
Mr Charles Borg (Chairman), Marquis Marcus John Scicluna Marshall
and Prof. Avv. Alberto Stagno d’Alcontres. The Committee met once
during the year with all members in attendance.
In terms of the Remuneration Policy of the Group, the Remuneration
Committee is responsible for reviewing and approving all
remuneration packages of Executive Directors. The Remuneration
Policy was approved by Shareholders at the 20th Annual General
Meeting held on 9 October 2020 with 33,496,250 votes in favour
and 3,657 votes against and can be found on the Group’s website
www.tridentestatesplc.com. Any material amendment to the
Remuneration Policy shall be submitted to a vote by the Annual
General Meeting before adoption and shall in any event be subject to
confirmation at least every four years.
As provided in the Remuneration Policy, the recommendations
of the Remuneration Committee are submitted to the Board for
consideration and final approval. Individual Executive Directors
recuse themselves from any participation in Board discussions
concerning their own remuneration as appropriate. The
Remuneration Committee is also responsible for drawing up and
proposing to the Company’s Board of Directors any amendments
thought necessary to the Remuneration Policy for consideration and
approval. Any amendments to the Remuneration Policy will require
the approval of Shareholders in the Annual General Meeting.
2. REMUNERATION STRATEGY AND POLICY
The strategy of the Trident Group is founded on developing and
managing quality property assets that create value to tenants and
provide a fair return to shareholders so as to ensure long-term
investment and profitable growth. It is believed that it is through
the implementation and observance of the above principles that the
Group will accomplish the vision of growing its business within the
local real estate sector.
The Trident Group has a small number of employees and a compact
management team. Notwithstanding the limited number of
personnel, in order to achieve the above strategic outcomes, it is
necessary that the Group attracts, retains and motivates the best
available talent at all levels – from the most recently recruited trainee
to members of the Board of Directors.
In order to be successful in this quest of attracting, retaining and
motivating best in class talent, it is essential that the Group’s
Remuneration Policy provides market-competitive salaries and
related benefits by reference to those provided by other entities
operating in the same market sector. There is therefore a clear
synthesis in the pay structures of all employees across the Group,
whether executive or otherwise, and the Board believes that this
approach serves the best long-term interests of all stakeholders.
The above principles apply equally to Remuneration Policy insofar
as Directors are concerned. However, there is a need to distinguish
between Executive and Non-Executive Directors, and further details
are provided below.
3. REMUNERATION POLICY –
EXECUTIVE DIRECTORS
Executive Directors are members of the Board who also have an
executive role in the day-to-day management of the Company
and the Group. For the purposes of this Remuneration Policy
and pursuant to Listing Rule 12.2A, the Chief Executive Officer is
considered to be an Executive Director of the Company.
Insofar as Executive Directors are concerned, remuneration is made
up of the following components:
(a) Fixed Pay - Fixed or Base salary (including statutory bonus) -
established by reference to the role, skills and experience of the
individual concerned and appropriate market comparatives.
(b) Variable Pay – which is made up of two components as follows:
i. Performance bonus – a variable component established by
reference to the attainment or otherwise of pre-established
quantitative targets.
ii. Discretionary bonus – also a variable component, established
by reference to the evaluation of qualitative goals which are
reviewed from time to time.
Where applicable, the variable components to the remuneration
awarded to Executive Directors are established from year to year
and the quantitative and qualitative targets included therein would
change from time to time depending on the circumstances of the
business. Typically, targets directed towards the long-term interest
and sustainability of the Company and the Group would include,
but are not limited to, the achievement of set completion dates and
cost targets on development projects together with rental take up
rates on completion, agreed profit or EBITDA targets, environmental
and other ESG goals, and the implementation of specifically defined
business initiatives.
There are no pre-set fixed relationships between fixed and variable
remuneration – and these would vary between Executive Directors
(and indeed senior management). Whereas quantitative awards are
usually formulaic in their calculation, discretionary and qualitative
awards necessarily involve the application of subjective judgment.
REMUNERATION REPORT 27
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
Other provisions that form part of the Directors’ Remuneration Policy
include the following:
• Claw Backs – there are no claw back provisions in place in respect
of variable salary awards.
• Benefits – which would comprise those benefits normally
available to senior executives comprising principally (a) the
provision of a suitable (taxed and insured) company car, (b)
standard executive health insurance and life assurance cover,
(c) mobile phone and allowance (d) other incidental benefits.
Executive Directors also receive an expense allowance in
reimbursement of certain expenses incurred in the execution of
their respective roles and duties.
• Share Option schemes – to date it has not been the policy of the
Group to introduce any form of share option scheme or other
executive share awards.
The Board believes that the above components of Executive
Director remuneration serve to contribute to the realization of the
Group’s long- term strategy and interest – and also serve to secure
alignment between the interests of the Executive Directors and that
of the Shareholders.
Members of the Board of Directors appointed under the provisions
of Article 96 retire from office at least once every three years but
remain eligible for re-appointment. Those members of the Board
elected under the provisions of Article 97 shall retire from office at
the end of the next Annual General Meeting following their election,
and also remain eligible for re-election. The CEO is engaged without
a fixed term contract. In terms of current labour regulations, the CEO
(and the senior management team) are all regarded as employees on
indefinite contracts.
4. REMUNERATION POLICY –
NON-EXECUTIVE DIRECTORS
Non-Executive Directors are those members of the Board who
do not have a role in the day-to-day executive management of
the Company and the Group. Remuneration for Non-Executive
Directors is determined by the Board of Directors as a whole and
takes into account the skills required and those levels prevailing in
the market for entities of a similar size and complexity.
The aggregate remuneration payable to Non-Executive Directors is
approved by Shareholders in the Annual General Meeting pursuant
to Article 81(1) of the Articles of Association of the Company and has
two components:
• A fixed or base Director’s fee which is established by reference to
those levels prevailing in the market for entities of a similar size
and complexity.
• Board Committee fee for membership of the various established
Board Committees. These Board Committee fees vary between
Committees depending upon the relative workloads and time
commitment involved, and the skill sets, experience and professional
knowledge required for the particular Committee concerned.
• From time-to-time circumstances may arise whereby the Board
of Directors (or members thereof) are faced in a particular year
with significantly higher and complex workloads than would be the
norm. In recognition of such circumstances, Board members may
be awarded an additional fixed fee on an exceptional basis. Such
additional awards would fall to be within the aggregate approved
amount by the general meeting in terms of Article 81(1) of the
Articles of Association of the Company.
Non-Executive Directors are not entitled to any contractual pension,
termination or retirement benefits. However, they may be reimbursed
certain expenses incurred in the discharge of their responsibilities.
28 REMUNERATION REPORT
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
5. REMUNERATION – DIRECTORS AND CHIEF EXECUTIVE OFFICER
The following table provides a summary of the remuneration for the year ended 31 January 2023 for each individual Director and for the
Chief Executive Officer.
Directors’ Emoluments
Year ended 31 January 2023
Board +
Committee fees
€
Fixed pay
€
Variable pay
€
Benefits +
allowances
€
Aggregate
€
Louis Farrugia
Chairman Executive
40,000 40,000
Charles Xuereb CEO 153,012 45,000 1,980 199,992
Vincent Curmi Vice Chairman
Non-Executive
27,000 27,000
Charles Borg Non-executive 21,000 21,000
Roderick Chalmers Non-executive 25,000 25,000
Michael Farrugia Non-executive 20,000 20,000
Alberto Miceli Farrugia Non-executive 22,000 22,000
Marquis Marcus J. Scicluna Marshall Non-executive 21,000 21,000
Prof. Avv. Alberto Stagno d’Alcontres Non-executive 21,000 21,000
Board related emoluments included in the above table requiring Shareholder approval under Article 81 total €197,000 (approved limit:
€300,000) and remained unchanged from 2018. In 2022, the Chief Executive Officer received a fixed pay of €152,239, a variable pay of
€38,334, and allowances of €1,980 (2021: €149,729, €38,334, €1,980 respectively).
6. SHAREHOLDER INVOLVEMENT
Pursuant to Article 81 of the Memorandum and Articles of
Association of the Company, remuneration (emoluments) payable
to Directors with regard to their membership of the Board of
Directors is always subject to the maximum aggregate limit
approved by the Shareholders in the Annual General Meeting. This
amount was fixed at an aggregate sum of €300,000 per annum at
the 18th Annual General Meeting held on 27 June 2018.
Whereas remuneration paid to Executive Directors by virtue of their
executive office (as opposed to membership of the Board) is not
subject to the maximum aggregate limit stipulated under Article 81
as described above, with effect from FY 2021 and pursuant to the
requirements of Capital Markets Rules, the Remuneration Report of
the Company shall form part of the Annual Report and shall provide
full details of remuneration paid to all Directors. In accordance with
Listing Rule 12.26L and 12.26M, the Remuneration Report will be
subjected to an advisory vote by the Shareholders at each Annual
General Meeting and shall be made available on the Company’s
website for a period of 10 years following the meeting.
7. SENIOR MANAGEMENT REMUNERATION
For the purposes of this Remuneration Report, “Senior
Management” shall mean the Chief Executive Officer, the Chief
Operating Officer and the Financial Controller. The Chief Executive
Officer is responsible for carrying out regular reviews of the
compensation structure pertaining to senior management in the
light of the Group’s performance, economic situation and market
trends. One of the main objectives is to recruit and retain executives
of high professional standards and competence who can enhance
the Group’s performance and assure the best operational and
administrative practices.
The Chief Executive Officer reports and makes recommendations
periodically to the Board and the Remuneration Committee on
the remuneration packages, including bonus arrangements, for
achieving pre–determined targets.
The Remuneration Committee is required to evaluate, recommend
and report on any proposals made by the Chief Executive Officer
relating to senior management remuneration and conditions
of service. The Committee considers that the current executive
management remuneration packages are based upon the
appropriate local market equivalents and are fair and reasonable
for the responsibilities involved. The Committee also believes that
the remuneration packages are such as to enable the Company to
attract, retain and motivate executives having the appropriate skills
and qualities to ensure the proper management of the organisation.
REMUNERATION REPORT 29
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
The Committee is also charged with considering and determining any
recommendations from management on requests for early retirement.
The terms and conditions of employment of senior executives
are set out in their respective contracts of employment with
the Company. As a general rule such contracts do not contain
provisions for termination payments and/or other payments linked
to early termination.
Senior management is eligible for an annual performance
bonus which is linked to agreed performance targets and their
achievement. The Remuneration Committee is of the view that
the relationship between fixed and variable remuneration and
performance bonus are reasonable and appropriate. There are no
claw-back provisions in respect of variable salary awards.
There are no executive profit sharing, share options or pension
benefit arrangements in place. Non–cash benefits to which Senior
Management are entitled comprise those normally available to
senior executives including the provision of a suitable taxed and
insured company car, executive health and life assurance cover, a
mobile phone package and other incidental corporate benefits.
During the year under review the total emoluments relating to the Group Senior Management members were as follows:
Senior management remuneration
Fixed pay
€
Variable pay
€
Benefits +
allowances
€
Aggregate
€
Senior management remuneration for year ended 31 January 2023 257,875 59,000 6,460 323,355
Senior management remuneration for year ended 31 January 2022 255,188 51,834 5,560 312,512
Senior management remuneration for year ended 31 January 2021 247,423 51,833 5,560 304,816
The above table includes the remuneration and related benefits awarded to the Group’s Senior Management team.
8. APPENDIX 12.1 OF THE CAPITAL MARKETS RULES
The following table presents the annual change of remuneration, of the company’s performance, and of average remuneration on a full-time
equivalent basis of the company’s employees (other than directors) over the two most recent financial years as per the requirements within
Appendix 12.1 of the Capital Market Rules.
2023 2022 2021
Change 2022
to 2023
Change 2021
to 2022
€’000 €’000 €’000 % %
Remuneration
Directors remuneration and committee allowances 197 197 197 – –
CEO's remuneration 200 193 190 4 2
Total employee remuneration excluding directors & CEO 354 365 306 (3) 19
Average employee remuneration 44 37 38 24 8
Company performance
Revenue 2,354 1,128 1,143 109 (1)
Profit after tax 6,574 63 550 10,435 (89)
Profit for the year excluding fair value movements 500 63 44 792 43
Value of investment property held under development – 54,909 38,955 (100) 41
Value of investment property held for commercial use 78,495 12,394 12,394 633 -
At this stage, the Group’s performance is primarily gauged on the progress made on the Trident Park development.
9. CONTENTS OF THE REMUNERATION REPORT
The contents of the Remuneration Report have been reviewed by the external Auditors to ensure that it conforms with the requirements of
Appendix 12.1 to Chapter 12 of the Listing Rules.
30 REMUNERATION REPORT
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
STATEMENTS OF FINANCIAL POSITION
As at 31 January
Group Company
2023 2022 2023 2022
Notes €’000 €’000 €’000 €’000
ASSETS
Non–current assets
Property, plant and equipment 4 89 51 72 51
Right-of-use assets 5 3,525 3,600 620 635
Investment property:
– held under development 6 – 54,909 – –
– held as commercial property 6 78,495 12,394 9,736 9,736
– held for future development 6 18,000 11,251 18,000 11,251
Investment in subsidiaries 7 – – 520 520
Deferred tax asset 12 336 292 – –
Total non-current assets 100,445 82,497 28,948 22,193
Current assets
Trade and other receivables 8 1,166 1,000 33,256 32,615
Advance payment 7 – – 951 951
Cash and cash equivalents 9 1,329 785 505 597
Total current assets 2,495 1,785 34,712 34,163
Total assets 102,940 84,282 63,660 56,356
STATEMENTS OF FINANCIAL POSITION 31
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
As at 31 January
Group Company
2023 2022 2023 2022
Notes €’000 €’000 €’000 €’000
EQUITY AND LIABILITIES
Capital and reserves
Share capital
Share premium
Fair value gains reserve 11 9,516 3,442 7,546 1,472
Retained earnings 5,374 4,874 5,051 4,767
Total equity 59,723 53,149 57,430 51,072
Non–current liabilities
Borrowings 15 23,701 16,771 – –
Lease liabilities 5 3,716 3,733 687 687
Deferred tax liabilities 12 3,040 2,365 2,773 2,098
Total and other payables 13 692 2,545 – –
Provision for liabilities and charges 14 1,299 – – –
Total non-current liabilities 32,448 25,414 3,460 2,785
Current liabilities
Borrowings 15 1,536 – – –
Trade and other payables 13 9,088 5,630 2,690 2,451
Lease liabilities 5 18 17 – –
Current tax liabilities 127 72 80 48
Total current liabilities 10,769 5,719 2,770 2,499
Total liabilities 43,217 31,133 6,230 5,284
Total equity and liabilities 102,940 84,282 63,660 56,356
The Notes on pages 36 to 60 are an integral part of these consolidated financial statements.
32 STATEMENTS OF FINANCIAL POSITION
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
STATEMENTS OF COMPREHENSIVE INCOME
Year ended 31 January
Group Company
2023 2022 2023 2022
Notes €’000 €’000 €’000 €’000
Revenue 16 2,354 1,128 830 762
Direct costs 17 (262 ) – – –
Administrative expenses 17 (879 ) (805 ) (299) (242)
Other operating income 54 – – –
Operating profit 1,267 323 531 520
Fair value gains on investment property 6 6,749 – 6,749 –
Finance costs 20 (530 ) (182 ) (34) (35)
Profit before tax 7,486 141 7,246 485
Tax expense 21 (912 ) (78 ) (888) (194)
Profit for the year 6,574 63 6,358 291
Basic and diluted earnings per share for the year
attributable to shareholders
The Notes on pages 36 to 60 are an integral part of these consolidated financial statements.
STATEMENTS OF COMPREHENSIVE INCOME 33
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
STATEMENTS OF CHANGES IN EQUITY
GROUP
Share
capital
Share
premium
Fair value
gains
reserve
Retained
earnings
Total
equity
Note €’000 €’000 €’000 €’000 €’000
Balance at 1 February 2021 42,000 2,833 3,442 4,811 53,086
Comprehensive income
Profit for the year – – – 63 63
Balance at 31 January 2022 42,000 2,833 3,442 4,874 53,149
Balance at 1 February 2022 42,000 2,833 3,442 4,874 53,149
Comprehensive income
Profit for the year – – – 6,574 6,574
Transactions with owners
T ransfer of fair value movements on investment
property, net of deferred tax 11 – – 6,074 (6,074 ) –
Balance at 31 January 2023 42,000 2,833 9,516 5,374 59,723
COMPANY
Share
capital
Share
premium
Fair value
gains
reserve
Retained
earnings
Total
equity
Note €’000 €’000 €’000 €’000 €’000
Balance at 1 February 2021 42,000 2,833 1,472 4,476 50,781
Comprehensive income
Profit for the year – – – 291 291
Balance at 31 January 2022 42,000 2,833 1,472 4,767 51,072
Balance at 1 February 2022 42,000 2,833 1,472 4,767 51,072
Comprehensive income
Profit for the year – – – 6,358 6,358
Transactions with owners
T ransfer of fair value movements on investment
property, net of deferred tax 11 – – 6,074 (6,074) –
Balance at 31 January 2023 42,000 2,833 7,546 5,051 57,430
The Notes on pages 36 to 60 are an integral part of these consolidated financial statements.
34 STATEMENTS OF CHANGES IN EQUITY
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
STATEMENTS OF CASH FLOWS
Year ended 31 January
Group Company
2023 2022 2023 2022
Notes €’000 €’000 €’000 €’000
Cash flows from operating activities
Cash generated from operations 22 1,824 553 160 1,090
Interest paid (349 ) (182 ) – –
Net income tax paid (226 ) (295 ) (181) (216)
Net cash generated from/(used in) operating activities 1,249 76 (21) 874
Cash flows from investing activities
Purchase of property, plant and equipment (56 ) (15 ) (37) (15)
Purchase of investment property including advanced payments (8,918 ) (15,546 ) – –
Net movements in advances to subsidiary – – – (1,517)
Net cash used in investing activities (8,974 ) (15,561 ) (37) (1,532)
Cash flows from financing activities
Proceeds from bank borrowings 8,466 14,564 – –
Principal elements of lease payments (197 ) (17 ) (34) (35)
Net cash generated from/(used in) financing activities 8,269 14,547 (34) (35)
Net movement in cash and cash equivalents 544 (938 ) (92) (693)
Cash and cash equivalents at beginning of year 785 1,723 597 1,290
Cash and cash equivalents at end of year 9 1,329 785 505 597
The Notes on pages 36 to 60 are an integral part of these consolidated financial statements.
STATEMENTS OF CASH FLOWS 35
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TRIDENT ESTATES PLC
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TRIDENT ESTATES PLC
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SHAREHOLDER INFORMATION
Directors’ interests in the share capital of the company
Ordinary shares held as
at 31 January 2023
Ordinary shares held as
at 30 April 2023
Mr Louis A. Farrugia 42,313 42,313
Mr Michael Farrugia 7,773 7,773
Prof. Avv. Alberto Stagno d’Alcontres 801 801
Directors’ interests listed above are inclusive of shares held in the name of the relative spouse and minor children as applicable.
Prof. Avv. Alberto Stagno d’Alcontres has a beneficial interest in M.S.M. Investments Limited through Miceli Holdings Limited and Medsea
Investments Limited. Mr Alberto Miceli Farrugia has a beneficial interest in M.S.M. Investments Limited through Bolina Holdings Limited and
Miceli Holdings Limited.
Mr Louis A. Farrugia has beneficial interest in Farrugia Investments Limited directly and through Farrugia Holdings Limited. Mr Michael
Farrugia has beneficial interest in Farrugia Investments Limited through Farrugia Holdings Limited.
Marquis Marcus John Scicluna Marshall has a direct beneficial interest in Sciclunas Estates Limited.
There has been no movement in the above stated shareholdings during the period from 31 January 2023 to 30 April 2023.
Shareholders holding 5% or more of the equity share capital as at 30 April 2023
Ordinary shares
Number of shares Percentage holding
M.S.M. Investments Limited 10,523,255 25.06%
Farrugia Investments Limited 10,471,062 24.93%
Sciclunas Estates Limited 10,453,489 24.89%
Shareholding details
As at 30 April 2023, the company’s issued share capital was held by the following shareholders:
Number of shareholders
Ordinary shares at €1.00 each 1,708
The holders of the Ordinary shares have equal voting rights.
Number of shareholders as at 30 April 2023
Number of shareholders Number of shares Percentage holding
Ordinary shares of €1.00 each
Up to 500 shares 521 121,806 0.29%
501 – 1,000 286 211,664 0.50%
1,001 – 5,000 622 1,410,422 3.36%
More than 5,000 279 40,256,111 95.85%
Totals 1,708 42,000,003 100.00%
Nadine Magro
Company Secretary
Trident Park, Notabile Gardens, No.4 – Level 2, Mdina Road, Zone 2, Central Business District, Birkirkara CBD 2010, Malta
Telephone (+356) 2381 4297
SHAREHOLDER INFORMATION 61
CONSOLIDATED FINANCIAL STATEMENTS 2022/23
TRIDENT ESTATES PLC
Independent auditor’s report
To the Shareholders of Trident Estates plc
Report on the audit of the financial statements
Our opinion
In our opinion:
· The Group financial statements and the Parent Company financial statements (the “financial statements”) of Trident Estates plc give a true and fair view of the Group and the Parent Company’s financial position as at 31 January 2023, and of their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards (‘IFRSs’) as adopted by the EU; and
· The financial statements have been prepared in accordance with the requirements of the Maltese Companies Act (Cap. 386).
Our opinion is consistent with our additional report to the Audit Committee.
What we have audited
Trident Estates plc’s financial statements comprise:
· the Consolidated and Parent Company statements of financial position as at 31 January 2023;
· the Consolidated and Parent Company statements of comprehensive income for the year then ended;
· the Consolidated and Parent Company statements of changes in equity for the year then ended;
· the Consolidated and Parent Company statements of cash flows for the year then ended; and
· the notes to the financial statements, which include significant accounting policies and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group and the Parent Company in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code) together with the ethical requirements of the Accountancy Profession (Code of Ethics for Warrant Holders) Directive issued in terms of the Accountancy Profession Act (Cap. 281) that are relevant to our audit of the financial statements in Malta. We have fulfilled our other ethical responsibilities in accordance with these Codes.
To the best of our knowledge and belief, we declare that non-audit services that we have provided to the parent company and its subsidiaries are in accordance with the applicable law and regulations in Malta and that we have not provided non-audit services that are prohibited under Article 18A of the Accountancy Profession Act (Cap. 281).
The non-audit services that we have provided to the parent company and its subsidiaries, in the period from 1 February 2022 to 31 January 2023, are disclosed in Note 17 to the financial statements.
Our audit approach
Overview
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· Overall Group materiality: €509,000, which represents approximately 0.5% of Total Assets |
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· The Group is composed of 5 reporting units all located in Malta.
· The Group engagement team carried out the audit of the financial statements of the Parent Company as well as the audit of the financial statements of all the subsidiaries of the Company. |
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· Valuation of Investment Property for Group and Company |
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the consolidated financial statements. In particular, we considered where the directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality for the consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
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Overall group materiality |
€509,000 |
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How we determined it |
Approximately 0.5% of total assets |
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Rationale for the materiality benchmark applied |
We chose total assets as the benchmark because, in our view, it is the benchmark against which the underlying value of real estate companies is most commonly measured by users and is a generally accepted benchmark. We chose 0.5% which is within the range of asset-based materiality thresholds that we consider appropriate. |
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above €48,500 as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
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Key audit matter |
How our audit addressed the Key audit matter |
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Valuation of Investment property for Group and Company
The Group’s and Company’s investment property portfolio has a carrying amount of €96.5 million and €27.7 million respectively as at 31 January 2023. This year’s valuation assessment was performed by management, who also based its valuation conclusions on the third-party valuers’ reports issued for 2021.
The valuation of the Group’s and Company’s investment property portfolio is inherently subjective due to, among other factors, the individual nature of each property, its location and, where applicable, the expected future rentals for that particular investment property. For investment property developed, factors taken into account include projected costs to completion, timing thereof and expected rental income.
As disclosed in note 6 to the financial statements, the valuations have been performed using the discounted cashflow approach or comparative sales approach, depending on the nature of the property.
The board of directors considered the valuation report as part of its overall responsibilities. The significance of the estimates and judgements involved, coupled with the fact that only a small percentage difference in individual property valuations, when aggregated, could result in a material misstatement, warrants specific audit focus in this area.
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We evaluated the methodology adopted in the valuations and the competence of the third-party valuers engaged in 2021, which included due consideration of their qualifications and expertise. We discussed with management, the valuation approaches adopted, the key valuation assumptions and other judgements made in arriving at their conclusions with respect to the property valuations.
We reviewed the valuation approaches adopted and underlying assumptions applied in the property valuations in order to assess the reasonableness of the fair value assigned to the properties. We engaged our own in-house experts to review the discounted cash flow valuations.
We reviewed the key parameters adopted by the Group/Company in these valuations including reconciling this data to underlying current lease agreements and compared the key parameters to those provided to the third-party valuers engaged in 2021.
For investment property where development is now substantially complete, we analysed costs incurred to date with related supporting documentation and assessed that the carrying value as at year end is supported by the projected cash flows to the completion of the said development.
We discussed the valuations with the directors and concluded, based on our work, that the Group’s and Company’s property valuations were within an acceptable range of values.
In addition, we evaluated the adequacy of the disclosures in Note 6 to the financial statements, including those regarding the key valuation assumptions applied in the property valuations. We discussed with management and obtained sufficient appropriate audit evidence to demonstrate that management’s assessment of the suitability of the inclusion of the valuation in the statement of financial position and disclosures made in the financial statements was appropriate.
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How we tailored our group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates.
The Group audit team performed all of this work by applying the overall Group materiality, together with additional procedures performed on the consolidation. This gave us sufficient appropriate audit evidence for our opinion on the Group financial statements as a whole.
Other information
The directors are responsible for the other information. The other information comprises all of the other information in the Annual Financial Report (but does not include the financial statements and our auditor’s report thereon).
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon except as explicitly stated within the Report on other legal and regulatory requirements.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors and those charged with governance for the financial statements
The directors are responsible for the preparation of financial statements that give a true and fair view in accordance with IFRSs as adopted by the EU and the requirements of the Maltese Companies Act (Cap. 386), and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the Parent 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 Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
· Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
· Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Parent Company’s internal control.
· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
· Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or the Parent Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group or the Parent Company to cease to continue as a going concern.
· Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
· Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on other legal and regulatory requirements
Report on compliance with the requirements of the European Single Electronic Format Regulatory Technical Standard (the “ESEF RTS”), by reference to Capital Markets Rule 5.55.6
We have undertaken a reasonable assurance engagement in accordance with the requirements of Directive 6 issued by the Accountancy Board in terms of the Accountancy Profession Act (Cap. 281) - the Accountancy Profession (European Single Electronic Format) Assurance Directive (the “ESEF Directive 6”) on the Annual Financial Report of Trident Estates plc for the year ended 31 January 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 consolidated financial statements and the relevant mark-up requirements therein, by reference to Capital Markets Rule 5.56A, in accordance with the requirements of the ESEF RTS.
Our responsibilities
Our responsibility is to obtain reasonable assurance about whether the Annual Financial Report, including the consolidated financial statements and the relevant electronic tagging therein, complies in all material respects with the ESEF RTS based on the evidence we have obtained. We conducted our reasonable assurance engagement in accordance with the requirements of ESEF Directive 6.
Our procedures included:
· Obtaining an understanding of the entity's financial reporting process, including the preparation of the Annual Financial Report, in accordance with the requirements of the ESEF RTS.
· Obtaining the Annual Financial Report and performing validations to determine whether the Annual Financial Report has been prepared in accordance with the requirements of the technical specifications of the ESEF RTS.
· Examining the information in the Annual Financial Report to determine whether all the required taggings therein have been applied and whether, in all material respects, they are in accordance with the requirements of the ESEF RTS.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion
In our opinion, the Annual Financial Report for the year ended 31 January 2023 has been prepared, in all material respects, in accordance with the requirements of the ESEF RTS.
Other reporting requirements
The Annual Financial Report 2023 contains other areas required by legislation or regulation on which we are required to report. The Directors are responsible for these other areas.
The table below sets out these areas presented within the Annual Financial Report, our related responsibilities and reporting, in addition to our responsibilities and reporting reflected in the Other information section of our report. Except as outlined in the table, we have not provided an audit opinion or any form of assurance.
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Area of the Annual Financial Report 2023 and the related Directors’ responsibilities |
Our responsibilities |
Our reporting |
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Directors’ report The Maltese Companies Act (Cap. 386) requires the directors to prepare a Directors’ report, which includes the contents required by Article 177 of the Act and the Sixth Schedule to the Act. |
We are required to consider whether the information given in the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements.
We are also required to express an opinion as to whether the Directors’ report has been prepared in accordance with the applicable legal requirements.
In addition, we are required to state whether, in the light of the knowledge and understanding of the Company and its environment obtained in the course of our audit, we have identified any material misstatements in the Directors’ report, and if so to give an indication of the nature of any such misstatements. |
In our opinion: · the information given in the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and · the Directors’ report has been prepared in accordance with the Maltese Companies Act (Cap. 386).
We have nothing to report to you in respect of the other responsibilities, as explicitly stated within the Other information section. |
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Corporate Governance Statement The Capital Markets Rules issued by the Malta Financial Services Authority require the directors to prepare and include in the Annual Financial Report a Statement of Compliance with the Code of Principles of Good Corporate Governance within Appendix 5.1 to Chapter 5 of the Capital Markets Rules. The Statement’s required minimum contents are determined by reference to Capital Markets Rule 5.97. The Statement provides explanations as to how the Company has complied with the provisions of the Code, presenting the extent to which the Company has adopted the Code and the effective measures that the Board has taken to ensure compliance throughout the accounting period with those Principles. |
We are required to report on the Statement of Compliance by expressing an opinion as to whether, in light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have identified any material misstatements with respect to the information referred to in Capital Markets Rules 5.97.4 and 5.97.5, giving an indication of the nature of any such misstatements.
We are also required to assess whether the Statement of Compliance includes all the other information required to be presented as per Capital Markets Rule 5.97.
We are not required to, and we do not, consider whether the Board’s statements on internal control included in the Statement of Compliance cover all risks and controls, or form an opinion on the effectiveness of the Company’s corporate governance procedures or its risk and control procedures. |
In our opinion, the Statement of Compliance has been properly prepared in accordance with the requirements of the Capital Markets Rules issued by the Malta Financial Services Authority.
We have nothing to report to you in respect of the other responsibilities, as explicitly stated within the Other information section. |
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Remuneration report The Capital Markets Rules issued by the Malta Financial Services Authority require the directors to prepare a Remuneration report, including the contents listed in Appendix 12.1 to Chapter 12 of the Capital Markets Rules. |
We are required to consider whether the information that should be provided within the Remuneration report, as required in terms of Appendix 12.1 to Chapter 12 of the Capital Markets Rules, has been included. |
In our opinion, the Remuneration report has been properly prepared in accordance with the requirements of the Capital Markets Rules issued by the Malta Financial Services Authority. |
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Other matters on which we are required to report by exception We also have responsibilities under the Maltese Companies Act (Cap. 386) to report to you if, in our opinion: · adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us. · the financial statements are not in agreement with the accounting records and returns. · we have not received all the information and explanations which, to the best of our knowledge and belief, we require for our audit. We also have responsibilities under the Capital Markets Rules to review the statement made by the directors that the business is a going concern together with supporting assumptions or qualifications as necessary. |
We have nothing to report to you in respect of these responsibilities. |
Other matter – use of this report
Our report, including the opinions, has been prepared for and only for the Parent Company’s shareholders as a body in accordance with Article 179 of the Maltese Companies Act (Cap. 386) and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior written consent.
Appointment
We were first appointed as auditors of the Company on 25 October 2000. Our appointment has been renewed annually by shareholder resolution representing a total period of uninterrupted engagement appointment of 22 years. The Company became listed on a regulated market on 30 January 2018.
PricewaterhouseCoopers
78, Mill Street
Zone 5, Central Business District
Qormi CBD 5090
Malta
David Valenzia
Partner
19 May 2023
