TIGNÉ MALL p.l.c. - 213800X8ISMGKCWU8848

Company Registration Number: C 35139

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements

31 December 2022

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

Pages

Directors’ report

1 - 6

Corporate Governance – Statement of compliance

7 - 16

RemNom Committee Report

17 - 22

Statement of financial position

23

Income statement

24

Statement of comprehensive income

24

Statement of changes in equity

25

Statement of cash flows

26

Notes to the financial statements

27 - 56

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

1

Directors’ report

The Directors present their report and the audited financial statements for the year ended 31 December

2022.

Principal activities

The Company’s principal activity is the ownership and management of 'The Point Shopping Mall' (the

Mall) and its car park.

Review of the business

Financial year 2022 has generally been a good year for the business.

Unlike previous years, the centre

operated uninterruptedly for the entire year and the effects of the COVID-19 pandemic started to wane.

Consumer demand gained momentum and incoming tourism numbers recovered well and quickly.

Logistical issues in retail have largely been ironed out and retailers received adequate stocks in good

time once again.

Managing human resources seems to have been the key challenge for the retail

industry during the period under review.

The Point is proud to have welcomed two important new key tenants during the year under review, SPAR

and Mavenry.

The former replaced Chain food store following a period of upgrading and refurbishment.

The Italian franchise has been received particularly well by the customer base at The Point and its

performance has been encouraging.

Mavenry now occupies the space previously taken up by

Debenhams, the British retail giant which anchored our business in its early stages and to whom we bade

a sad farewell in the previous year.

Mavenry is a totally new concept for the centre and marks its debut

into the premium-to-luxury segment of the retail market which hitherto, has been underserved in Malta.

No expense has been spared in the refurbishment of these outlets and we believe that this investment

continues to strengthen the brand mix at The Point, increasing its appeal as the retail destination of

choice for a far wider audience.

We wish them every success.

Our marketing strategy has adapted accordingly to reach out to these new market segments, promoting

the centre as a destination and a meeting place for a mosaic of patrons of various ethnicities, cultures

and age groups.

Our focus remains firmly set on reaching out to customers through traditional media

platforms and increasingly via the social media.

This customer-oriented focus has supported the

business well through 2022 and helped it deliver positive results.

The Mall traded at a robust level of

activity, tenant sales outperformed expectations and footfall was consistently robust.

The Company’s senior management team has compiled financial projections for the year ending 31

December 2023.

These comprise historical financial information up to the date of authorisation for issue

of these financial statements and forecast financial information for the rest of 2023.

These cash flow

projections show that the Company is expected to continue having sufficient liquidity and financial

resources to meet its ongoing obligations and expected cash outflows.

Based on the outcome of the cash flow projections referred to above, the Directors and senior

management consider the going concern assumption in the preparation of the Company’s financial

statements as appropriate as at the date of authorisation for issue of the 2022 financial statements.

They also believe that no material uncertainty that may cast significant doubt about the Company’s ability

to continue as a going concern exists as at that date.

As at 31 December 2022, the Company’s current liabilities exceeded its current assets by €0.9 million

(2021: €0.5 million).

During the year, the Company has addressed this position through a programme of

active liquidity management. In this context, the Company expects to continue generating significant net

cash inflows from its operations such that it will be in a position to steadily meet its operational current

liabilities on an ongoing basis.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

2

Directors’ report

– continued

Review of the business

- continued

Vision

The Company’s vision has remained consistent. Our aim is for The Point to remain the best shopping

mall destination in Malta offering an optimal customers’ experience to the visitors and sustainable returns

to its shareholders. It therefore continues to embrace a business strategy based on providing a

compelling retail destination, developing, and maintaining strong relationships with tenants, housing an

iconic mix of brands, delivering long-term, sustainable growth in net rental income and generating returns

for shareholders.

Going Green

As a leading retail destination, Tigné Mall plc is committed to providing a positive customer experience.

This needs to be attained in the context of Environment, Social and Corporate Governance (ESG)

obligations.

The Company believes it has a duty to ensure positive impact and growth for its stakeholders

including the community within which it operates, its tenants, its own people, as well as its business. In

support of this, the Company has already embarked on its journey to reduce its carbon footprint and has

taken various initiatives to reduce energy consumption across its operations.

Furthermore, it is in the

process of developing a comprehensive strategy for its operations to be compliant with ESG

requirements and the Board is being advised on the key issues in all three areas.

Trading performance

During 2022, the Company’s revenues amounted to €8.2 million, an increase of 22% over the previous

year and operating profits increased to €5.2 million (2021: €4.2 million).

Earnings before interest, tax and

depreciation increased to €7.3 million (2021: €6.1 million).

Finance costs decreased to €0.5 million

(2021: €0.6 million); of which €0.1 million relates to the interest charged to profit or loss on the lease

liability, which represents the present value of the remaining lease payments over the emphyteutical term,

in line with the terms of IFRS 16.

In line with previous years, the Company opted to be taxed at a final

withholding tax rate of 15% on its rental income. It consequently incurred an effective tax expense of €1.2

million (2021: €1million), ending the year with profits after tax of €3.8 million (2021: €2.8 million).

During the year under review the Company generated €7.5 million by way of cash flow from operating

activities.

This was mainly directed towards the repayment of bank borrowings, payment of dividend,

ongoing capital expenditure and the servicing of working capital requirements.

The Financial Risk Management note in the Financial Statements (note 2) explains the process of how

the Board identifies and manages its financial risks. The main categories of risk described in this Note are

market risk, credit risk and liquidity risk. The same note includes extensive detail of the processes

undertaken by the Company to manage these risks.

The Statement of Compliance with the Principle of Good Corporate Governance and RemNom

Committee Report in this Annual Financial Report, describes other non-financial key performance

indicators relevant to the Company, including information relating to employee matters.

Results and dividends

The financial results are set out on page 23. During the year a net interim dividend of €750,000 (2021:

€378,929) and a final net dividend of €750,000 were distributed to the shareholders (2021: €nil).

Subsequent to the end of the reporting period, the Directors recommend the payment of a final net

dividend of €765,000 in relation to the 2022 financial results.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

3

Directors’ report

- continued

Directors

The Directors of the Company who held office during the financial year ended 31 December 2022 were:

Joseph Zammit Tabona (Chairman)

David Demarco

Marzena Formosa

Caroline Buhagiar Klass – (resigned on 5 May 2022)

Chantelle Marie Coleiro – (appointed on 17 June 2022)

Albert Frendo

In accordance with the Company’s articles of association, the directors retire from office at the Annual

General Meeting and are eligible for re-election or re-appointment.

Statement of Directors’ responsibilities for the financial statements

The directors are required by the Maltese Companies Act (Cap. 386) to prepare financial statements

which give a true and fair view of the state of affairs of the Company as at the end of each reporting

period and of the profit or loss for that period.

In preparing the financial statements, the Directors are responsible for:

•

ensuring that the financial statements have been drawn up in accordance with International

Financial Reporting Standards as adopted by the EU;

•

selecting and applying appropriate accounting policies;

•

making accounting estimates that are reasonable in the circumstances;

•

ensuring that the financial statements are prepared on the going concern basis unless it is

inappropriate to presume that the Company will continue in business as a going concern.

The Directors are also responsible for designing, implementing and maintaining internal control relevant

to the preparation and the fair presentation of the financial statements that are free from material

misstatement, whether due to fraud or error, and that comply with the Maltese Companies Act (Cap. 386).

They are also responsible for safeguarding the assets of the Company and hence for taking reasonable

steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the Annual Financial Report on the

website in view of their responsibility for the controls over, and the security of, the website.

The financial

statements of Tigné Mall p.l.c. for the year ended 31 December 2022 are included in the Annual Financial

Report 2022, which is available for viewing or download on the Company’s 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 Company as at 31

December 2022, and of its financial performance and its cash flows for the year then ended in

accordance with International Financial Reporting Standards as adopted by the European Union

on the basis explained in note 1 to the financial statements; and

•

the Annual Financial Report includes a fair review of the development of the business and the

position of the Company, together with a description of the principal risks and uncertainties that

the Company face.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

4

Directors’ report

- continued

Information pursuant to Capital Markets Rule 5.64

Structure of Capital

The Company has an authorised share capital of 60,000,000 ordinary shares of €0.50 each and issued

and fully paid-up share capital of 56,400,000 ordinary shares with a nominal value of €0.50 each. The

Ordinary Shares rank

pari passu

amongst each other for all purposes. Each Ordinary Share is entitled to

one vote. There are currently no different classes of Ordinary Shares in the Company and accordingly all

Ordinary Shares have the same rights, voting rights and entitlements in connection with any distribution

whether of dividends or capital (on a winding up or otherwise). All the shares are freely transferable and

have been admitted to trading on the Malta Stock Exchange.

Appointment and removal of Directors

Article 95 of the Company’s Memorandum and Articles of Association states that at each Annual

General Meeting of the Company all the Directors shall retire from office. A Director retiring from office

shall retain office until the dissolution of such Meeting and a retiring Director shall be eligible for re-

election or re-appointment. The Directors shall be elected as provided in Article 99 of the Memorandum

and Articles of Association that is a maximum of 5 Directors shall be elected at each Annual General

Meeting (or at an Extraordinary General Meeting convened for the purpose of electing Directors). Voting

shall take place on the basis that every Member shall have 1 vote in respect of each ordinary share held

by him. A Member may use all his votes in favour of one candidate or may split his votes in any manner

he chooses amongst any two or more candidates. The Chairman of the Meeting shall declare elected

those candidates who obtain the greater number of votes on that basis. The Company’s Articles of

Association contain a provision whereby the Directors are entitled to appoint additional directors to the

Board where this would be to the benefit of the Company in view of their commercial knowledge and

experience.

Powers of Directors

The Directors are empowered to act on behalf of the Company and in this respect have the authority to

enter into contracts, sue and be sued in representation of the Company. In terms of the Memorandum

and Articles of Association they may transact all business of whatever nature not expressly reserved by

the Memorandum and Articles of Association to the shareholders in general meeting or by any provision

contained in any law for the time being in force.

General Meetings

The Company shall in each year hold a General Meeting as its Annual General Meeting in addition to

any other meetings in that year and not more than 15 months shall elapse between the date of one

Annual General Meeting of the Company and that of the next. All general meetings other than Annual

General Meetings shall be called Extraordinary General Meetings. The Directors may, whenever they

think fit, convene an Extraordinary General Meeting and Extraordinary General Meetings shall also be

convened on such requisition, or, in default, may be convened by such requisitions as provided by the

Companies Act. Any two Members of the Company may convene an Extraordinary General Meeting in

the same manner as nearly as possible as that in which meetings may be convened by the Directors.

A General Meeting of the Company shall be called by not less than 21 days’ notice in writing. The notice

shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is

given and shall specify the place, the day and the hour of meeting, the proposed agenda for the Meeting

and in case of special business, the general nature of the business to be considered as well as other

information. A notice calling an Annual General Meeting shall specify the meeting as such and a notice

convening a meeting to pass an Extraordinary Resolution as the case may be, shall specify the intention

to propose the resolution as such and the principal purpose thereof. A notice of General Meeting called

to consider extraordinary business shall be accompanied by a statement regarding the effect and scope

of any proposed resolution in respect of such extraordinary business.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

5

Directors’ report

- continued

Information pursuant to Capital Markets Rule 5.64

- continued

Any Member or Members holding not less than 5% in nominal value of all the shares entitled to vote at

the meeting may:

(a) request the Company to include items on the agenda of the General Meeting, provided that each

item is accompanied by a justification or a draft resolution to be adopted at the Annual General

Meeting; and

(b) table draft resolutions for items included in the agenda of a General Meeting. The request to put

items on the agenda of the General Meeting or the tabling of draft resolutions to be adopted at the

General Meeting shall be submitted to the Company (in hard copy or in electronic form to an email

address provided by the Company for the purpose) at least 46 days before the date set for the

General Meeting to which it relates and shall be authenticated by the person or persons making it.

An “Ordinary Resolution” means a resolution taken at a General Meeting of the Company passed by a

Member or Members having the right to attend and vote at such meeting holding in the aggregate more

than 50% in nominal value of the shares represented and entitled to vote at the meeting. An

“Extraordinary Resolution” means a resolution taken at a General Meeting of the Company of which

notice specifying the intention to propose the text of the resolution as an extraordinary resolution and the

principal purpose thereof has been duly given and passed by a number of Members having the right to

attend and vote at such meeting holding in the aggregate not less than 75% in nominal value of the

shares represented and entitled to vote at the meeting and at least 51% in nominal value of all the shares

entitled to vote at the meeting.

Directors’ interests in the Company’s share capital

The Company’s Directors do not have any direct or indirect interests in the share capital of the Company.

Registered Shareholders with 5% or more of the Company’s share capital

As at 31 December 2022

As at 17 April 2023

Ordinary

Shares

% Holding

Ordinary

Shares

% Holding

Mapfre MSV Life p.l.c.

20,000,000

35.46%

20,000,000

35.46%

Bank of Valletta p.l.c.

9,426,767

16.71%

9,426,767

16.71%

HSBC Bank Malta p.l.c. as

Custodian for HSBC Life Assurance

(Malta) Ltd.

7,227,000

12.81%

7,227,000

12.81%

Other matters

The Company has nothing to report in relation to the requirements of Capital Markets Rules 5.64.4,

5.64.5, 5.64.6, 5.64.7 and 5.64.10 since they do not apply to the Company. Information relating to the

requirements of Capital Markets Rule 5.64.11 is reflected in the RemNom Committee Report on page 17.

Information pursuant to Capital Markets Rule 5.70.1

In terms of Capital Markets Rule 5.70.1, the Company did not enter into any new material contracts.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

6

Directors’ report

- continued

Information pursuant to Capital Markets Rule 6.39

Remuneration Report

The Remuneration and Nominations Committee of the Board of Directors of the Company will be

submitting to the Shareholders at the next Annual General Meeting the Remuneration Report for the

financial year ending 31 December 2022 (the ‘Reporting Period’). In view of the fact that the Company

qualifies as a medium-sized undertaking for the purposes of Article 3(3) of Directive 3013/34/EU of the

European Parliament and of the Council of the 26 June 2013 on the annual financial statements,

consolidated financial statements and related reports of certain types of undertakings amending Directive

2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC

and 83/349/EEC, in accordance with Rule 12.26L of the Capital Markets Rules of the Malta Financial

Services Authority (‘Capital Markets Rules’), the Board of Directors will be submitting the Report before the

Annual General Meeting for discussion.

The Report is drawn up in accordance with, and in fulfilment of the provisions of Chapter 12 of the Capital

Markets Rules relating to the Remuneration Report and Section 8A of the Code of Principles of Good

Corporate Governance (Appendix 5.1 of the Capital Markets Rules) regarding the Remuneration

Statement.

The Report provides a comprehensive overview of the nature and quantum of remuneration paid to the

individual Directors and the Chief Executive Officer during the reporting period and details how this

complies with the Company’s Remuneration Policy. The Report is intended to provide increased corporate

transparency, increased accountability and a better shareholder oversight over the remuneration paid to

Directors and the Chief Executive Officer. The contents of this Remuneration Report have been reviewed

by the Company’s Auditors to ensure that the information required in terms of Appendix 12.1 of the Capital

Markets Rules has been included.

Going Concern

The Directors, as required by Capital Markets Rule 5.62 have considered the Company’s operational

performance, the statement of financial position as at year-end as well as the business plans for the

coming year, and they have a reasonable expectation that the Company has adequate resources to

continue in operational existence for the foreseeable future. For this reason, in preparing the financial

statements, they continue to adopt the going concern basis in preparing the financial statements.

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 17 April 2023 by Joseph Zammit Tabona (Chairman)

and David Demarco (Director) as per the Directors' Declaration on ESEF Annual Financial Report

submitted in conjunction with the Annual Financial Report.

Registered office:

The Point Shopping Mall

Management Suite

Tigné Point

Sliema TP01

Malta

17 April 2023

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

7

Corporate Governance – Statement of Compliance

A.

INTRODUCTION

Tigné Mall p.l.c. (the “Company”) is required to include a statement of compliance with the Code of

Principles of Good Corporate Governance (the “Code”) contained in Appendix 5.1 of the Capital Markets

Rules issued by the Malta Financial Services Authority. This statement is made in terms of Capital Markets

Rules 5.94 and 5.97.

The Board of Directors (“the Board”) believes that the adoption of these principles is in the best interest of

the Company, its shareholders and other stakeholders, since compliance with the Code is expected by

investors on the Malta Stock Exchange and further evidences the Directors' and the Company's

commitment to a high standard of corporate governance.

Good corporate governance is the responsibility of the Board, and in this regard, the Board has carried out

a review of the Company’s compliance with the Code. It has taken measures for the Company to comply

with the requirements of the Code to the extent that this is considered appropriate and complementary to

the size, nature and operations of the Company. Notwithstanding the fact that the Principles of Good

Corporate Governance are not mandatory, the Board has endorsed them and ensured their adoption, save

as indicated within the section entitled Non-Compliance with Code where the Board indicates and explains

the instances where it has departed from or where it has not applied the Code.

B.

COMPLIANCE WITH THE CODE

Principle 1: The Board

The Directors believe that for the period under review the Company has complied with the requirements of

this principle.

The overall management and policy setting of the Company is vested in the Board consisting of a

Chairman and four (4) Directors. The Board has provided the necessary leadership in the overall direction

of the Company and at the same time has adopted systems whereby it obtains timely information from the

Chief Executive Officer (the “CEO”) to ensure an open dialogue between the CEO and Directors on an

ongoing basis and not only at meetings of the Board.

All the Directors, individually and collectively, are of the appropriate calibre and have the necessary skills

and experience to contribute effectively to the decision-making process. The Board delegates specific

responsibilities to three committees, namely the Supervisory Committee, the Audit Committee and the

RemNom Committee, each of which operates under formal terms of reference approved by the Board.

Principle 2: Chairman and Chief Executive

In line with the requirements of Principle 2, the Company has segregated the functions of the Chairman

and the CEO. The Chairman is responsible to lead the Board and to set its agenda, ensuring that the

Board’s discussions on any issue put before it go into adequate depth, encouraging the involvement of all

Directors, and ensuring that all the Board’s decisions are supported by precise, timely and objective

information. The Chairman, together with the Supervisory Committee, ensures that the CEO implements

the strategy that is agreed to by the Board.

These positions have been defined with specific roles rendering them completely separate from one

another and are occupied by Mr. Joseph Zammit Tabona and Mr. Edwin Borg respectively.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

8

Corporate Governance – Statement of Compliance -

continued

B.

COMPLIANCE WITH THE CODE

- continued

Principle 2: Chairman and Chief Executive

- continued

The Board has delegated specific authority to the CEO to manage activities within the Company which

include, amongst others:

•

Implementation of policies as set by the Board;

•

Working towards objectives established by the Board;

•

Putting into effect plans to organise, direct and manage the human resources available to attain the

highest possible profitability and results in the interest of the Company’s shareholders and all other

stakeholders.

The role of the CEO is to plan, co-ordinate and control the daily operations of the Company through the

leadership and direction of the Company’s human resources. The CEO reports regularly to the Supervisory

Committee and the Board on the performance and affairs of the Company.

Together with the Chairman of the Board, the CEO represents the Company with third parties.

Principle 3: Composition of the Board

The size of the Board, whilst not being large as to be unwieldy, is appropriate for the requirements of the

Company’s business and conducive to good corporate governance. The combined and varied knowledge,

experience and skills of the Board members provides a robust framework for efficient decision-making,

supports the effective control and management of the Company’s affairs and contributes to the functioning

of the Board and its direction to the Company. The Board is composed entirely of non-executive Directors,

comprising independent non-executives, each of whom is able to add value and to bring independent

judgement to bear on the decision-making process.

The CEO attends all Board meetings, albeit without a vote, providing direct input into the Board’s

deliberations and gaining in-depth understanding of the Board’s policy and strategy in the process.

The following Directors served on the Board during the period under review:

Non-Executive Chairman

Mr. Joseph Zammit Tabona

Non-Executive Directors

David Demarco

Marzena Formosa

Caroline Buhagiar Klass – (resigned on 5 May 2022)

Chantelle Marie Coleiro – (appointed on 17 June 2022)

Albert Frendo

Pursuant to generally accepted practice, as well as the Company’s Articles of Association, the appointment

of Directors to the Board is reserved to the Company’s shareholders, except in so far as an appointment is

made to fill a vacancy on the Board, or the Board is of the opinion that it would be of benefit to the

Company if additional Directors are appointed in view of their commercial knowledge and experience.

Unless appointed for a shorter period, a Director shall hold office from the end of one Annual General

Meeting to the end of the next and a retiring Director shall be eligible for re-election or re-appointment.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

9

Corporate Governance – Statement of Compliance -

continued

B.

COMPLIANCE WITH THE CODE

- continued

Principle 3: Composition of the Board

- continued

Every shareholder owning twenty per cent (20%) of the ordinary share capital is entitled to appoint one

director for each twenty per cent (20%) shareholding. Furthermore, any excess fractional shareholding not

so utilised may participate in the voting for the election of other directors. Shareholders who own less than

twenty per cent (20%) of the ordinary share capital participate in the election of the Directors on the basis

that each shareholder shall have one vote in respect of each ordinary share held. The Chairman is elected

by a simple majority from amongst the Directors of the Company.

Principle 4: The Responsibilities of the Board

In fulfilling its mandate within the terms of the Company’s Memorandum and Articles of Association, the

Board of Directors assumes responsibility to:

a) establish corporate governance standards;

b) review, evaluate and approve the business plan and targets submitted by management and work

with management towards their successful implementation;

c) identify the principal business risks for the Company and oversee the implementation and

monitoring of appropriate risk management systems;

d)

ensure that effective internal control systems are in place and review their effectiveness;

e) review, evaluate and approve the overall corporate organisation structure, the assignment of

management responsibilities, the performance of senior management and plans for senior

management development including succession planning;

f)

review, evaluate and approve compensation strategy for senior management;

g) review periodically the Company’s objectives and policies relating to social, health and safety and

environmental responsibilities; and

h) ensure that the Company has in place a policy that enables it to communicate effectively with

shareholders, stakeholders and the public in general.

The Board supervises compliance with the Capital Markets Rules, including those pertaining to the

preparation and publication of the Annual Financial Report and Financial Statements. It approves the

Financial Statements for submission to the General Meeting of the shareholders and accordingly retains

direct responsibility for approving and monitoring:

(i)

the Business Plan for the Company;

(ii)

the Annual Financial Plans including capital budgets;

(iii)

the Annual Financial Statements;

(iv)

proposals to increase the issued capital and to materially increase or decrease the Company’s

funding; and

(v)

other resolutions which the Board may determine to be subjected to its approval from time to

time.

Any meeting that a Director wishes to initiate may be arranged through the Company Secretary. A Director

of the Company has access to the advice from internal and external sources which are deemed necessary

for carrying out the respective roles and responsibilities and the Company will bear the related expenses.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

10

Corporate Governance – Statement of Compliance -

continued

B.

COMPLIANCE WITH THE CODE

- continued

Principle 5: Board Meetings

The Board of Directors meets at least every quarter and on any other occasion as may be necessary.

Further to attending formal Board meetings, individual Directors participate in other

ad hoc

meetings during

the year as may be required. They are also active in Board sub-committees, either to assure good

corporate governance or to contribute to the Company’s decision-making process. Board meetings are

presided over by the Chairman and all Directors are allowed equal opportunity to voice and express their

views on matters relating to the Company and its business.

Six meetings of the Board of Directors were held during 2022 and attendance was as follows:

Board member

Attended

Joseph Zammit Tabona

6 (out of 6)

David Demarco

6 (out of 6)

Marzena Formosa

5 (out of 6)

Caroline Buhagiar Klass - (resigned on 5 May 2022)

1 (out of 1)

Chantelle Marie Coleiro – (appointed on 17 June 2022)

5 (out of 5)

Albert Frendo

5 (out of 6)

Principle 6: Information and Professional Development

The CEO is appointed by the Board and enjoys its full support and confidence. The recruitment and

selection of senior management is the responsibility of the CEO in consultation with the Board. Likewise,

the CEO consults with the Board on matters relating to succession planning for senior management within

the Company. The Board considers and discusses succession planning measures at all senior

management levels taking into account the size and depth of the management team of the Company, with

reliance on a limited number of officers.

Newly appointed Directors are provided with briefings by the CEO, the Company Secretary and also by

other members of management in respect to the operations of the Company. A comprehensive information

pack is handed over to a new Director following his appointment and this usually incorporates the

Memorandum and Articles of the Company, relevant legislation as well as rules and regulations. The

Directors have access to the advice and services of the Company Secretary who is responsible for

ensuring that Board procedures are adhered to. Additionally, Directors may seek independent professional

advice on any matter at the Company’s expense.

The Company ensures the personal development of Directors, management and employees by

recommending attendance to seminars, conferences as well as training programmes that are designed to

help improve the potential of its staff members whilst furthering the Company’s competitiveness.

Principle 7: Evaluation of Board’s Performance

During the year under review, the Board carried out an evaluation of its own performance together with that

of the Committees, the Chairman, the individual Directors and the CEO. Under the direction of the

Chairperson of the RemNom Committee, the evaluation process for the Board was conducted through a

comprehensive board effectiveness questionnaire, the results of which were discussed by the Chairperson

of the RemNom Committee and the Chairman of the Audit Committee. The review has not resulted in any

material changes in the Company’s internal organisation or in its governance structures.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

11

Corporate Governance – Statement of Compliance

-

continued

B.

COMPLIANCE WITH THE CODE

- continued

Principle 8: Committees

The Board has appointed the following Committees:

Audit Committee

For the year under review, the Audit Committee was composed of three non-executive Directors and had

the following members:

David Demarco (Chairman of the Committee)

Caroline Buhagiar Klass – (resigned on 5 May 2022)

Chantelle Marie Coleiro – (appointed on 17 June 2022)

Albert Frendo

In terms of Capital Markets Rule 5.118, Mr David Demarco is the Director whom the Board considers as

competent in accounting and auditing. Mr David Demarco is an independent non-executive Director and is

considered independent because he is free from any significant business, family or other relationship with

the Company or its management that may create a conflict of interest such as to impair his judgement. Mr

Demarco is also competent in accounting in terms of the Capital Markets Rules having previously occupied

and currently occupying senior positions with banking and other financial institutions.

For the purpose of Code Provision 3.2, the Board considers each of the other non-executive Directors as

independent within the meaning of the Code, notwithstanding their positions of senior executive officers

within other entities that are shareholders of the Company.

The Audit Committee is a committee appointed by the Board and is directly responsible and accountable to

the Board. The Audit Committee’s primary purpose is to:

(a) protect the interests of the Company’s shareholders; and

(b) 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 Board has set formal terms of reference for the Audit Committee that establish its composition, role

and function. The Board may change these terms of reference from time to time.

The main role and responsibilities of the Audit Committee are:

(a) to inform the Board of Directors of the outcome of the statutory audit and to explain how the statutory

audit contributed to the integrity of the Financial Statements and what the role of the audit committee

was in this process;

(b) to monitor the financial reporting process and to submit recommendations of proposals to ensure its

integrity;

(c)

to establish internal procedures and to monitor these on a regular basis;

(d) to monitor the effectiveness of the Company’s internal quality control and risk management systems

and, where applicable, its internal audit regarding the financial reporting without breaching its

independence;

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

12

Corporate Governance – Statement of Compliance -

continued

B.

COMPLIANCE WITH THE CODE

- continued

Principle 8: Committees

- continued

(e) to monitor the audit of the annual and consolidated financial statements, in particular, its performance,

taking into account any findings and conclusions by the competent authority pursuant to Article 26 (6)

of the Statutory Audit Regulation;

(f)

to review the additional report prepared by the statutory auditors or audit firm submitted to the Audit

Committee in terms of Article 11 of the Statutory Audit Regulation. The Audit Committee may disclose

the additional report to third parties in order to execute its functions in line with the terms of reference;

(g) to review and monitor the independence of the statutory auditors or audit firms in accordance with

Articles 22, 22a, 22b, 24a and 24b of the Directive 2006/43/EC on statutory audits of annual accounts

and consolidated accounts, amending Council Directive 78/660/EEC and 83/349/EEC and repealing

Council Directive 84/253/EEC and Article 6 of the Statutory Audit Regulation and in particular the

appropriateness of the provision of non-audit services to the audited entity in accordance with Article 5

of the Statutory Audit regulation;

(h) the responsibility for the procedure for the selection of statutory auditors or audit firms;

(i)

to recommend the statutory auditors or the audit firm to be appointed in accordance with Article 16 of

the Statutory Audit Regulation;

(j)

to review the Company’s internal financial control system and, unless addressed by a separate risk

committee or the Board itself, risk management systems; and

(k) reviewing the organisation of the internal audit function of the Company, including its plans, activities,

staffing and organisational structure.

The role of the Audit Committee with respect to related party transactions.

The Audit Committee shall be responsible for vetting and approving related party transactions.

The Audit Committee shall ensure that any such transactions are entered into at arm’s length and on a

normal commercial basis and shall give due consideration to:

-

the materiality of the transaction;

-

whether the transaction is in the ordinary course of the Company’s business;

-

whether the transaction gives rise to preferential treatment to the Related Party.

Should the Audit Committee deem that the related party transaction will have a material effect on the

Company’s business, the Company shall make a Company announcement which shall contain:

-

the nature and details of the transaction;

-

the name of the Related Party concerned; and

-

details of the nature and extent of the interest of the Related Party in the transaction.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

13

Corporate Governance – Statement of Compliance -

continued

B.

COMPLIANCE WITH THE CODE

- continued

Principle 8: Committees

- continued

Where the proposed related party transaction is not approved by the Audit Committee but the Company still

wants to proceed with the transaction, the Company shall:

-

make a Company Announcement with the details set out above;

-

send a circular to its shareholders; and

-

obtain the approval of its shareholders either prior to the transaction being entered into and where

applicable ensure that the Related Party itself abstains from voting on the relevant resolution.

During the general meeting convened for this purpose, the Board of directors of the Company shall

disclose the fact that the audit committee did not approve the related party transaction.

The Audit Committee met four times. The CEO, the Financial Controller and the External Auditors were

invited to attend relevant parts of such meetings. Attendance at the meetings was as follows:

Board member

Attended

David Demarco

4 (out of 4)

Caroline Buhagiar Klass - (resigned on 5 May 2022)

1 (out of 2)

Chantelle Marie Coleiro – (appointed on 17 June 2022)

2 (out of 2)

Albert Frendo

4 (out of 4)

Supervisory Committee

The Board delegates specified authority and accountability for the Company to the Supervisory Committee,

which is composed of Ms. Marzena Formosa (Chairperson of the Committee), Mr. Albert Frendo and Mr.

Edwin Borg. The Supervisory Committee supervises the management of the Company, to ensure the

attainment of its strategy and objectives.

The Supervisory Committee typically meets every month and the terms of reference of the Committee

envisage the execution of policy matters delegated by the Board to ensure the attainment of the

Company’s objectives.

RemNom Committee

A separate “RemNom Committee Report” features elsewhere in the Annual Financial Report in compliance

with the relevant Code provisions of the Principles of Good Corporate Governance.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

14

Corporate Governance – Statement of Compliance

-

continued

B.

COMPLIANCE WITH THE CODE

- continued

Principle 9 & 10: Relations with Shareholders and with the Market, and Institutional Investors

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. In the Board’s view,

the Company communicates effectively with shareholders by issuing two bi-annual Shareholders’

newsletters, publishing its results on a six-monthly basis during the year, by way of half yearly and annual

financial reports and financial statements, through Interim Directors’ Statements, through periodical

Company Announcements and through press releases in the local media to the market in general. The

financial results are available on the Company’s website www.thepointmalta.com, in the Investors

Relations Section. Within seven months of the end of the financial year, the annual general meeting of the

Shareholders is convened to consider the annual financial statements, the Directors’ and Auditors’ reports

for the year, to decide on any dividends recommended by the Board, to elect Directors, appoint auditors

and to set their respective remuneration. A presentation is given by the CEO of the Company showing how

the Company operated in the light of prevailing economic and market conditions, and an assessment on

future prospects is given. More information on Annual General Meetings is disclosed in the Directors’

Report.

The Chairman arranges for all Directors to attend the Annual General Meeting. As outlined below, the

Board has adopted rules whereby directors having conflicts of interest on any matters being discussed at

Board level disclose the conflict in a timely manner to the Board and the Director so conflicted will not be

allowed to vote on such matters.

Principle 11: Conflicts of Interest

The Directors are fully aware of their responsibility to act in the interest of the Company and its

shareholders at all times and of their obligation to avoid conflicts of interest. Such conflicts of interest

affecting Board members may, and do, arise on specific matters from time to time. In these instances, by

virtue of the Memorandum and Articles of Association:

•

a director is obliged to make full disclosure with respect to any matter where there is a potential or

a real conflict of interest, whether such conflict arises from personal interests or the interests of the

companies in which such person is a director or an officer;

•

the said director is excused from the meeting and consequently not involved in the Board’s

discussion on the matter; and

•

the said director does not vote on such matter.

The Memorandum and Articles of Association state that if any question arises at any meeting as to the

materiality of a Director’s interest or as to the entitlement of any Director to vote and such question is not

resolved by his voluntarily agreeing to abstain from voting, then such question shall be referred to the Audit

Committee and their ruling shall be final and conclusive.

Potential conflicts of interest may principally arise in relation to the leasing out of retail space and the

procurement of certain services.

In the event of a prospective lease the Chief Executive Officer negotiates with the prospective tenant to

ensure that a superior standard and type of tenant is taken on at the best possible terms and conditions.

The Supervisory Committee is responsible for the supervision of such process. In particular, it is

responsible for approving prospective tenants in principle, assisting and directing the CEO in negotiations

with tenants. Accordingly, leases for retail space within ‘The Point Shopping Mall’ are approved by the

Board on the advice of the Supervisory Committee.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

15

Corporate Governance – Statement of Compliance

-

continued

B.

COMPLIANCE WITH THE CODE

- continued

Principle 11: Conflicts of Interest

- continued

All contracts for goods and services and any other purchases are based upon the principle of competitive

bidding. The CEO negotiates with suppliers in order to ensure that the best quality goods and services are

procured by the Company at the best possible price. The Supervisory Committee is responsible to

supervise such procurement processes by assisting and directing the CEO in negotiations with contractors,

suppliers and service providers.

The Company has also implemented a clear and detailed policy in respect of dealings of Directors in the

Company’s shares, which policy is based on timely and comprehensive disclosures and notices, where and

if applicable in terms of the Capital Markets Rules.

The Audit Committee has the task to ensure that any potential conflicts of interest are resolved in the best

interest of the Company.

Principle 12: Corporate Social Responsibility

The Company recognises the importance of its role in the corporate social responsibility (CSR) arena and

works to meet the expectations of the community in this respect. Amongst the initiatives taken during the

year under review, the Company has endeavoured to meet its CSR obligations, in particular through:

•

its support for fundraising events for charitable institutions;

•

participation in recognised student-exchange programmes for the benefit of both local and foreign

students;

•

waste recycling initiatives; and

•

energy conservation initiatives.

C.

NON-COMPLIANCE WITH THE CODE

Principle 3: Composition of the Board

The Board is composed entirely of non-executive Directors, including independent non-executives.

However, the Board holds the opinion that it is of an adequate size and that the balance of skills and

experience is appropriate for the requirements of the Company. The attendance of the CEO at Board

meetings is deemed a sufficiently effective measure to ensure a balance of executive and non-executive

participation.

Principle 4: Succession policy for the future composition of the Board (Code Provision 4.2.7)

The Board notes that pursuant to the Company’s Memorandum and Articles of Association, the

appointment of Directors to serve on the Board of Directors is a matter which is entirely reserved to the

shareholders of the Company. As indicated in the statement of compliance, all newly appointed Directors

are given an adequate induction course in the operations, activities and procedures of the Company to be

able to carry out the function of a Director in an effective manner. The Board also notes the emphasis in

this Code provision on the executive component of the Board and points out that the Company’s Board is

composed entirely of non-executive members.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

16

Corporate Governance – Statement of Compliance

-

continued

C.

NON-COMPLIANCE WITH THE CODE

- continued

Principle 9: Relations with Shareholders and with the Market (Code Provision 9.3)

There are no procedures disclosed in the Company’s Memorandum or Articles as recommended in Code

Provision 9.3, to resolve conflicts between minority shareholders and controlling shareholders. No such

conflicts have arisen during the year under review.

D.

INTERNAL CONTROL AND RISK MANAGEMENT IN RELATION TO THE FINANCIAL

REPORTING PROCESS

The Board is ultimately responsible for the Company’s system of internal control and risk management and

for reviewing its effectiveness. Such a system is designed to manage, rather than eliminate, the risk of

failure to achieve business objectives, and can only provide a reasonable, as opposed to absolute,

assurance against material misstatement or loss.

The Company operates through the Board of Directors and the Supervisory Committee with clear reporting

lines and delegation of powers. The Board of Directors has adopted and implemented appropriate policies

and procedures to manage risks and internal control. The Supervisory Committee plans, executes, controls

and monitors business operations in order to achieve the set objectives.

The Directors, with the assistance of Management, are responsible for the identification, evaluation and

management of the key risks to which the Company may be exposed. The Company has clear and

consistent procedures in place for monitoring the system of internal financial controls. The Directors also

receive periodic management information giving comprehensive analysis of financial and business

performance including variances against the Company’s set targets. This process is applicable specifically

in relation to the Company’s financial reporting framework.

The Audit Committee reviews and assesses the effectiveness of the internal control systems, including

financial reporting, and determines whether significant internal control recommendations made by the

Auditors have been implemented. The Committee plays an important role in initiating discussions with the

Board with respect to risk assessment and risk management, reviews contingent liabilities and risks that

may be material to the Company.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

17

RemNom Committee Report

The Tigné Mall p.l.c. (the ‘Company’) Remuneration and Nominations Committee (the ‘Committee’) hereby

submits its Remuneration Report (‘Report’) for the financial year ending 31 December 2022 to the

Company’s shareholders.

The Report is drawn up in accordance with, and in fulfilment of the provisions of

Chapter 12 of the Capital Markets Rules issued by the Malta Financial Services Authority (‘Capital Markets

Rules’) relating to the Remuneration Report and Section 8A of the Code of Principles of Good Corporate

Governance (Appendix 5.1 of the Capital Markets Rules) regarding the Remuneration Statement.

Terms of Reference

The Committee, in its function as Remuneration Committee is tasked with the oversight of the Company’s

remuneration policy for its Directors and senior executives, being those persons reporting directly to the

Board of Directors. The Committee is responsible for making proposals to the Board on the individual

remuneration packages of its Directors and senior executives in line with the Company’s Remuneration

Policy.

It also monitors remuneration levels and structures with a view to ensure their continued alignment

with the Company’s business strategies, values and long-term interests. In addition, the Committee

evaluates, recommends and reports on proposals made by the Company’s Chief Executive Officer relating

to remuneration packages for senior executives.

Committee Membership and Meetings

The Committee is composed of three (3) non-executive Directors, Ms. Marzena Formosa (Chairperson until

15

th

June 2021 and continued as committee member), Mr David Demarco (appointed as committee

member on 15

th

June 2021) and Dr. Chantelle Coleiro (as Chairperson from 17

th

June 2022 and

succeeding Ms. Caroline Buhagiar Klass who resigned on 5 May 2022).

The Committee held nine meetings during the year under review, on 31

st

January 2022, 24

th

February

2022, 6

th

April 2022, 2

nd

4

th

10

th

, 22

nd

31

st

August 2022 and 21

st

October 2022, which were attended as

follows:

Member

Attended

Ms. Marzena Formosa

(appointed as member since 15

th

June 2021)

8 out of 9

Ms. Caroline Buhagiar Klass

(appointed Chairperson from 15

th

June 2021

until 5

th

May 2022 when she resigned)

3 out of 3

Mr. David Demarco

(appointed as member since 15

th

June 2021)

9 out of 9

Dr Chantelle Coleiro

(appointed Chairperson from 17

th

June 2022)

6 out of 6

Remuneration Policy

The Company’s latest Remuneration Policy for its Directors and Chief Executive Officer (the ‘Remuneration

Policy’) was approved by the shareholders at the Annual General Meeting held on 9

th

September 2020.

The resolution relating to the Remuneration Policy was passed with 46,924,788 votes in favour,

representing 100% of eligible votes.

As the resolution was approved by the required majority, the

Remuneration Policy was implemented in 2020. The policy is applicable for a maximum period of four

years.

The Company’s Remuneration Policy is designed such that the Company can attract, motivate and retain

the right individuals as would assist in the implementation of its business strategies for its long-term benefit

and sustainability. In line with the Company’s objectives of good governance, the Policy aims to deliver fair

and transparent remuneration to those persons charged with its management and administration.

The

Policy is based on a number of core principles, namely the creation of long-term value for the Company’s

shareholders, the motivation and retention of the Company’s management and the alignment of the

interests of the Company’s management with the interests of its shareholders.

The Company’s

Remuneration Policy is in line with the policy for the remuneration paid to Directors and senior executives

in the preceding financial period. The remuneration paid to the Directors and Chief Executive Officer during

the year under review is in conformity with the Company’s Remuneration Policy.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

18

RemNom Committee Report

- continued

Remuneration Policy

– continued

In 2022 non-material modifications to the Remuneration Policy were carried out to reflect mainly changes to

the designation of applicable rules, which have been renamed Capital Markets Rules and other minor

alterations to the text thereof. The revised Policy has been approved by the Board of Directors on 14 April

2022. The updated Policy is available for viewing on the Company’s website.

Remuneration Report for the year ended 31 December 2021

The Remuneration Report for the financial year ended 31 December 2021 was submitted to the

Shareholders at the Annual General Meeting held on the 17

th

June 2022 for an advisory vote.

The

Remuneration Report was approved with 49,861,057 votes in favour.

The outcome of this advisory vote

was taken into account by the Company in its implementation of the Remuneration Policy for the year

ended 31 December 2022 as explained in further detail below.

The Company has complied with the procedure for the implementation of the Remuneration Policy as set

out in Chapter 12 of the Capital Markets Rules issued by the Malta Financial Services Authority.

Directors’ Remuneration

The Company’s Board of Directors is composed entirely of non-executive Directors, including a non-

executive Chairman. None of the directors have a service contract with the Company.

In terms of the Company’s Articles of Association, the maximum annual aggregate emoluments payable to

the Board of Directors in any one financial year shall be determined by the Shareholders in General

Meeting.

In accordance with the Remuneration Policy, the Board, on the recommendation of the Committee, will

then allocate from such amount, a fixed fee to each member in recognition of the individual’s time

commitment, contribution and ongoing responsibilities towards the Company. Remuneration payable to

directors in their capacity as such, is not linked to the Company’s share price or performance and is

comparable to remuneration paid by companies of a similar size operating in a comparable business

environment. None of the Directors are entitled to profit sharing, share options, pension benefits,

termination payments or other similar remuneration.

The Company’s approach to the payment of such remuneration is that of motivating and retaining high

performing Directors by recognising and rewarding their contribution, which is critical to the implementation

of the Company’s long-term strategy.

For the year under review, it is noted that on 17

th

June 2022 the General Meeting approved an increase of

€60,000 to the maximum annual aggregate emoluments of Directors so that the new threshold of

aggregate emoluments of Directors is now set at €150,000. Despite the General meeting having approved

a threshold of €150,000 as aggregate emoluments for Directors, the aggregate amount of fees proposed

by the Committee and approved by the Board to be paid as emoluments in accordance with the

Remuneration Policy is below such threshold and amounted to €64,792 annually till 30

th

June 2022 and

subsequently increased to €113,000 annually with effect from 1

st

July 2022 onwards.

This was deemed to

be consistent with market practice and conducive to the achievement of the Company’s strategic

objectives.

It is also considered in line with the terms and objectives of the Remuneration Policy as it seeks

to better reflect the responsibilities assigned to each director and to take into account current market

remuneration levels. To better consider current market remuneration levels, in 2022, the Committee has

also obtained a report which presents the remuneration level of directors and Chief Executive Officers paid

by other listed companies in Malta and operating in different sectors, including the retail sector.

The

Committee considers that the revised total remuneration paid to Directors of the Company contributes

towards the long-term performance of the Company as it seeks to incentivise and promote commitment

towards achieving the best interests of the Company.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

19

RemNom Committee Report

- continued

Directors’ Remuneration

- continued

The Board of Directors has agreed to keep the current remuneration payable under review to ensure its

consistency with comparable market trends and commensurate with the duties and responsibilities of the

Directors.

Total emoluments received by Directors during the financial year 2022 for the purposes of Code Provision

8.A.5 are as follows:

-

Fixed remuneration

€64,792 (till 30

th

June 2022) and €113,000 (from 1

st

July 2022

onwards) (2021: €65,305)

-

Variable remuneration

None (2021: None)

-

Share Options

None (2021: None)

-

Others

None (2021: None)

In terms of the requirements within Appendix 12.1 of the Capital Markets Rules, the following table

presents the annual change of remuneration of the Directors and of the Chief Executive Officer, of the

Company’s performance, and of average remuneration on a full-time equivalent basis of the Company’s

employees (other than directors and Chief Executive Officer) over the two most recent financial years.

Aggregate remuneration

awarded

€

Percentage annual

change of

remuneration

%

Percentage annual

change of the

Company’s

performance

%

Percentage annual

change of the average

remuneration of the

Company’s employees

on full-time equivalent

basis

%

Edwin

Borg,

CEO

2022: €126,592

2021: €108,088

2020

:

€

107,705

2020 - 2021: 0.4%

2021 - 2022: 17.1%

2020 - 2021: 68%*

2021 - 2022: 31.4%*

2020 - 2021: 3%

2021 - 2022: 9.5%

*The percentage annual change of the Company’s performance included in the above table is based on the Company’s profit before

tax, as this has been deemed by management to be the most appropriate basis for measuring performance. The percentage annual

change of the Company’s performance appears to be elevated in view of the substantial impact of the pandemic on the Company’s

financial results for the year ended 31 December 2020, with subdued profits reported driven primarily by lease incentives granted to

tenants.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

20

RemNom Committee Report

- continued

Directors’ Remuneration

- continued

For the purposes of Appendix 12.1 of Chapter 12 of the Capital Markets Rules issued by the Malta

Financial Services Authority, the following were paid as Directors’ emoluments during the financial year

2022:

Board Member

Po

siti

on

Emo

l

uments received

2022

2021

202

0

Joseph Zammit Tabona

Chairman

€21,133

€14,266

€15,026

Marzena Formosa

Non-executive director

€17,833

€13,538

€15,962

David Demarco

Non-executive director

€16,821

€12,643

€14,032

Caroline Buhagiar Klass

(appointed on 1

st

April 2020 and

resigned on 5

th

May 2022)

Non-executive director

€4,330

€12,643

€8,700

Albert Frendo

(

appointed

on

1

5

th

June

202

1

)

Non-executive director

€16,351

€6,412

-

Joseph M. Zrinzo

(appointed on 9

th

September 2020 and

resigned on 15

th

June 2021)

Non-executive director

-

€5,803

€3,625

Alicia Agius Gatt

(

res

ign

ed

on

9

th

September

202

0

)

Non-executive director

-

-

€8,030

Muriel Rutland

(

res

igned

on

1

st

April

202

0

)

Non-executive director

-

-

€2,900

Chantelle Colerio

(

appointed

on

17

th

June

202

2

)

Non-executive director

€10,985

-

-

During the General Meeting on 17th June 2022, it was approved to increase threshold of aggregate

emoluments to Directors to €150,000. With effect from 1 July 2022, the fee levels attributable to the roles of

Chairman of the Board, Board members, Chairpersons of the Audit and other Committees, and members of

the Audit and other Committees have been revised upwards to reflect market practice and the level of

responsibilities allocated to such roles. This change is not related to the level of the Company’s financial

performance and accordingly the comparison between the annual changes in fees, the Company’s

financial performance and the average remuneration of the Company’s employees is not presented and not

considered relevant.

The amounts in respect of the financial year ended 31 December 2020 reflect one-

time adjustments and changes to the fee levels for the year ended 31 December 2021 are mainly

attributable to changes in the committees’ composition.

No non-cash benefits were offered to Directors during the year under review. Other than as set out above,

no compensation was paid to Caroline Buhagiar Klass as compensation in connection with the cessation of

her directorship.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

21

RemNom Committee Report

- continued

Chief Executive Officer’s Remuneration

The Company’s day to day administration and operations are managed by the Chief Executive Officer

(‘CEO’).

The Company’s Remuneration Policy with respect to the CEO is designed to attract and motivate

a qualified and experienced professional engaged by the Company to execute its business plans in a

highly competitive market.

In accordance with the Remuneration Policy, the CEO’s remuneration is made up of a fixed component

and a variable element.

The fixed component constitutes a basic remuneration awarded for the

performance of the CEO’s executive function, reflecting his experience and knowledge, together with the

responsibilities and assigned functions of this role.

This fixed component is not linked to variable

parameters or to the results achieved by the Company. The fixed element is also benchmarked to market

parameters taking into account remuneration for CEOs of entities with a similar size operating in a

comparable sector.

The variable element is structured as a performance bonus aimed at rewarding the CEO’s performance

with respect to the achievement of a set of financial and non-financial targets which contribute to the long-

term interests and sustainability of the Company.

These typically include EBIDTA-based targets, liquidity

levels, project realization and similar criteria.

These targets are established on an annual basis and may

vary from year to year depending on the circumstances of the Company’s operations at any given time.

Achievement of financial objectives is measured by a comparison of the targets set and the outcomes

realised.

Assessment of non-financial objectives is made by the Committee through a subjective

assessment of the CEO’s performance exercised in a reasonable manner. The variable element is

structured to provide an appropriate balance between the fixed and variable elements of the CEO’s

remuneration, such that the variable element represents a minor part of total remuneration as compared to

the fixed element. The Company does not have an option to reclaim back variable remuneration paid to the

CEO.

By way of non-cash benefits, the CEO is entitled to health insurance, professional indemnity insurance

cover and a fully expensed Company car.

The CEO is entitled to the equivalent of a full year’s pay, as severance payment, should within three years

following a change in control of the Company, his employment be terminated for reasons other than for any

of the specific causes set out in the contract of employment or by the executive himself in the cases set out

in the contract. The CEO’s contract of employment is indefinite.

Other than as stated above, the CEO is not entitled to profit sharing, share options, pension benefits or

other similar remuneration.

The Company’s approach with respect to the CEO’s remuneration is that in line with the Remuneration

Policy, it seeks to motivate and retain a qualified and experienced professional to execute the Company’s

short and longer term business plans in a competitive market and thereby grant such remuneration as is

commensurate with the functions assigned and the responsibilities attached to the role.

Between July and

September 2022 , an assessment was carried out by the Committee to review the competitiveness of the

CEO’s salary, taking into account benchmarking analysis conducted by external consultants. Following

such assessment, the Board agreed to increase CEO’s gross basic salary by €20,000 bringing the gross

basic salary to a total of €120,138 effective as from 1

st

July 2022; and to increase the CEO’s variable pay

percentage by 2% to bring it to a maximum of 15% payable in respect to his performance for the year

2022. The Board considers that the revised CEO’s remuneration package aligns to the Remuneration

Policy objectives and terms in that it seeks to better reflect his responsibilities and current market

remuneration levels. The Board also believes that the revised CEO’s remuneration package contributes to

the long-term performance of the Company as it seeks to incentivise and energise the role holder to

achieve the Company’s objectives and create sustainable future growth.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

22

RemNom Committee Report

- continued

Chief Executive Officer’s Remuneration

- continued

For the purposes of Appendix 12.1 of Chapter 12 of the Capital Markets Rules, the total emoluments

received by the CEO, for the financial year under review in accordance with the Company’s Remuneration

Policy consisted of a fixed remuneration of €100,138 annually up until 30

th

June 2022 and of €120,138

annually as adjusted upwards from 1

st

July 2022 (2021: €95,138) and a variable remuneration of €16,454

(2021: €12,950).

It is noted that the award of variable remuneration was predominantly based on the

achievement of financial and non-financial targets, including revenue and expenditure, footfall, retail

experience and adherence to Company policies.

Non-cash benefits for the year under review amounted to

€13,471.

Senior Executives’ Remuneration

For the purposes of this Remuneration Report, reference to Senior Executives shall mean the Chief

Executive Officer and the Financial Controller.

The Committee is tasked with recommending to the Board of Directors the appropriate remuneration

packages for Senior Executives.

In doing so, the Committee is mindful of the need to attract, retain and

motivate the right professionals. Base salaries are determined in accordance with the Company’s salary

structure for its senior management, paying due regard to market conditions and remuneration rates

offered by comparable organisations for comparable roles. The Company’s policy is such that none of the

Company’s senior management are entitled to any share options, profit sharing arrangements or pension

benefits.

It is the Company’s policy to engage its senior management on the basis of indefinite contracts of

employment after a period of probation, rather than on fixed term contracts. Accordingly, the applicable

notice periods, after probation, are those provided for in the relevant legislation.

The terms and conditions

of employment of senior management are specified in their respective indefinite contracts of employment.

The individual contracts of employment of Senior Executives, other than the CEO, do not contain

provisions for termination payments and/or other payments linked to early termination other than as may be

applicable in accordance with legal requirements.

Senior Executives are entitled to health and life insurance, reimbursement of telephone expenses and use

of a Company car.

Remuneration payable to senior management during the financial year ended 31 December 2022, which

comprises mainly fixed remuneration as per contractual arrangements, is not being disclosed as the

information is deemed to be of a commercially sensitive nature taking into account the fact that the senior

management team is composed of two individuals.

This Directors’ Remuneration Report, drawn up in accordance with the Capital Markets Rules, is being put

forward for a discussion at the advisory vote of the Annual General Meeting of the Company to be held in

2023.

The contents of this Remuneration Report have been reviewed by the external auditor to ensure that the

information required in terms of Appendix 12.1 of the Capital Markets Rules has been included.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

23

Statement of financial position

As

at 31 December

Notes

2

0

2

2

2021

€

€

ASSETS

Non

-

current assets

Property, plant and equipment

4

80,993,856

81,400,000

Right-of-use assets

5

3,890,1

21

3,940,872

Total non-current assets

84,883,977

85,340,872

Current assets

Trade and other receivables

6

3

,

600,716

2,981,236

Cash and cash equivalents

7

3,074,724

2,826,649

Total current assets

6,675,440

5,807,885

Total assets

91,

559,417

91,148,757

EQUITY AND

LIABILITIES

Capital and reserves

Share capital

8

27,

766,888

27,766,888

Revaluation reserve

9

19,

0

28,037

19,275,233

Retained earnings

12,

224,913

9,712,571

Total e

qu

ity

59,019,838

56,754,692

Non

-

current li

a

bilities

Trade and other payables

10

667,367

695,642

Borrowings

11

7,041,

192

10,011,094

Lease liabilities

12

4,225,088

4,167,270

Deferred tax liabilities

13

13,

004

,267

13,216,202

Total non-current liabilities

2

4,937,914

28,090,208

Current liabi

lities

Trade and other payables

10

4,327,71

0

3,531,832

Borrowings

11

1,944,0

37

1,787,234

Lease liabilities

12

88,803

88,803

Current tax liabilities

1

,241,115

8

95,

988

Total current liabilities

7,601,665

6,303,857

Total liabilities

3

2,539,579

34,

394,065

Total equity and liabilities

91,559,417

91,148,757

The accompanying notes are an integral part of these financial statements.

The financial statements were approved and authorised for issue by the Board of Directors on 17 April

2023. The financial statements were signed on behalf of the Board of Directors by Joseph Zammit Tabona

(Chairman) and David Demarco (Director) as per the Directors' Declaration on ESEF Annual Financial

Report submitted in conjunction with the Annual Financial Report.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

24

Income statement

Yea

r ended 3

1 December

Notes

20

2

2

2021

€

€

Revenue

14

8

,169,198

6,695,355

Cost of sales

15

(

2,337,748

)

(2,125,216)

Gross profit

5,8

31,450

4,570,139

Administrative and other expenses

15

(

582,09

7

)

(470,482)

Other operating income

17

-

122,000

Oper

ating profit

5,249,35

3

4,221,657

Finance income

18

2

,165

572

Finance costs

19

(

474,686)

(586,570)

Profit before tax

4,776,832

3,635,659

Tax expense

20

(1,011,686)

(821,470)

Pr

ofit for

the

year

3,765,146

2,814,189

Earning

s per share (

e

uro cen

t

s)

22

6

.

68

4.99

Statement of Comprehensive Income

Year ended

31 Dec

ember

Note

202

2

2021

€

€

Profit for the year

3,765

,146

2,814,189

Other comprehensive income:

Revaluation surplus on land and buildings

arising during the year, net of deferred tax

9

-

5,346,874

Other

comprehens

iv

e i

ncome for

the year,

net

of t

a

x

-

5,346,874

Total com

prehensive income for the year, net of

tax

3,765,146

8,

161,063

The accompanying notes are an integral part of these financial statements.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

25

Statement of changes in equity

Sh

ar

e

Revaluation

Re

taine

d

Notes

capital

re

serv

e

earnings

Tota

l

€

€

€

€

Balance at 1 January 2021

27,766,888

14,108,925

7,096,745

48,972,558

Comprehensive income

Profit for the year

-

-

2,814,189

2,814,189

Other comprehensive

income

Revaluation surplus on land and

buildings arising during the year,

net of deferred tax

9

-

5,346,874

-

5,346,874

Total other

comprehensive inc

o

me

-

5,3

4

6

,874

-

5,3

46

,874

Total comprehensive income

-

5,3

46

,874

2,814,189

8,1

61

,063

Transacti

on

s

with

owners

Dividends paid to shareholders

26

-

-

(378,929)

(378,929)

Total transac

tion

s

with o

wners

-

-

(378,9

29)

(378,929)

Other move

ments

Reclassification from revaluation

reserve to retained earnings

9

-

(180,566)

180,566

-

-

(180,566)

180,566

-

Balance as

at 31 December

2021

27,766

,888

1

9,275,233

9,

712,571

5

6,

7

54,

692

Bala

nce a

t

1 J

anuary 2022

27,766

,888

1

9,275,233

9,

712,571

5

6,

7

54,

692

Co

mprehensive income

Profit for the year

-

-

3,76

5,146

3,76

5,146

Total comprehensive income

-

-

3,765,146

3,76

5,146

Transacti

on

s

with

owners

Dividends paid to shareholders

26

-

-

(1,500,000)

(1,500,000)

Total transac

tion

s

with o

wners

-

-

(1,5

00,000)

(1,5

00,000)

Other move

ments

Reclassification from revaluation

reserve to retained earnings

9

-

(247,196)

247,196

-

-

(

247,196

)

247,196

-

Bal

ance as

at 31 December

202

2

27,766,888

19,

028,037

12,

224,913

59,019,838

The accompanying notes are an integral part of these financial statements.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

26

Statement of cash flows

Year ended 31 Dece

mber

Notes

202

2

2021

€

€

Cash flows from operating activities

Cash generated from operations

23

7,459,942

5,248,545

Interest paid

(328,065)

(441,905)

Interest received

2,165

572

Tax paid

(878,494)

(758,069)

Net cash generated from operations

6,255,548

4,049,143

Cash flows from investing activities

Purchase of property, plant and equipment

4

(1,605,571)

(217,628)

Net cash used in investing activities

(

1,605,571

)

(217,628)

Cash flo

ws fro

m f

inancin

g

activities

Dividends paid

26

(1,500,000)

(378,929)

Proceeds from bank borrowings

11

-

175,500

Repayment of bank borrowings

11

(2,813,099

)

(3,311,666)

Principal element of lease payments

12

(88,803)

(88,803)

Net

c

ash

used

in

fi

nan

cing ac

tiviti

es

(

4,401,902)

(3,603,898)

Net mov

ement in cash and cash equivalents

248,075

227,617

C

as

h and cash equiva

len

ts at

be

gi

nning

of year

2,82

6,649

2,599,032

Cash and cash equivalen

ts at end o

f year

7

3,074,724

2,826,649

The accompanying notes are an integral part of these financial statements.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

27

Notes to the financial statements

1.

Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out

below. These policies have been consistently applied to all the years presented, unless otherwise

stated.

1.1 Basis of preparation

Tigné Mall p.l.c. is a public limited liability Company with its principal activity being to own and

manage 'The Point Shopping Mall'.

The financial statements have been prepared in accordance with International Financial Reporting

Standards (IFRSs) as adopted by the EU and with the requirements of the Maltese Companies Act

(Cap. 386). They have been prepared under the historical cost convention, as modified by the fair

valuation of the land and buildings class of property, plant and equipment.

The preparation of financial statements in conformity with IFRSs as adopted by the EU requires the

use of certain accounting estimates. It also requires Directors to exercise their judgement in the

process of applying the Company’s accounting policies (see Note 3 - Critical accounting estimates

and judgements).

Appropriateness of the application of the going concern assumption in the preparation of the

financial statements

As at 31 December 2022, the Company’s current liabilities exceeded its current assets by €0.9

million (2021: €0.5 million). The Company has continued to manage this position during the course

of the current financial year through a programme of active liquidity management. In this context, the

Company expects to continue generating significant net cash inflows from its operations such that it

will be in a position to steadily meet its operational current liabilities on an ongoing basis.

The Company’s senior management team has compiled financial projections for the year ending 31

December 2023 taking into account the macroeconomic and geopolitical factors that are expected to

prevail during the forthcoming financial year, which factors were deemed to have insignificant effects

on the financial projections. The projections comprise historical financial information up to the date of

authorisation for issue of these financial statements and forecast financial information for the residual

period. Based on the outcome of the cash flow projections as referred to above, the Directors and

senior management consider the going concern assumption in the preparation of the Company’s

financial statements as appropriate as at the date of authorisation for issue of the 2022 financial

statements. They also believe that no material uncertainty that may cast significant doubt about the

Company’s ability to continue as a going concern exists as at that date.

Standards, interpretations and amendments to published standards effective in 2022

In 2022, the Company adopted amendments to existing standards that are mandatory for the

Company’s accounting period beginning on 1 January 2022.

The adoption of these revisions to the

requirements of IFRSs as adopted by the EU did not result in substantial changes to the Company’s

accounting policies impacting the Company’s financial performance and position.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

28

1.

Summary of significant accounting policies

- continued

1.1 Basis of preparation

- continued

Standards, interpretations and amendments to published standards that are not yet effective

Certain new standards, amendments and interpretations to existing standards have been published

by the date of authorisation for issue of these financial statements but are mandatory for the

Company’s accounting periods beginning after 1 January 2022. The Company has not early adopted

these revisions to the requirements of IFRSs as adopted by the EU and the Directors are of the

opinion that there are no requirements that will have a possible significant impact on the Company’s

financial statements in the period of initial application.

1.2

Foreign currency translation

(a)

Functional and presentation currency

Items included in these financial statements are measured using the currency of the primary

economic environment in which the entity operates (‘the functional currency’). The financial

statements are presented in euro, which is the Company’s functional and presentation currency.

(b)

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates

prevailing at the dates of the transactions or valuation where items are re-measured. Foreign

exchange gains and losses resulting from the settlement of such transactions and from the

translation at year-end exchange rates of monetary assets and liabilities denominated in foreign

currencies are recognised in profit or loss.

1.3 Property, plant and equipment

All property, plant and equipment is initially recorded at historical cost. Land and buildings,

comprising mainly ‘The Point Shopping Mall’, are shown at fair value less subsequent depreciation.

The fair value of ‘The Point Shopping Mall’ is based on the discounted cash flow valuation model.

Valuations are carried out on a regular basis such that the carrying amount of property does not

differ materially from that which would be determined using fair values at the end of the reporting

period. Any accumulated depreciation at the date of revaluation is eliminated against the gross

carrying amount of the asset, and the net amount is restated to the revalued amount of the asset.

All other property, plant and equipment is stated at historical cost less depreciation and impairment

losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Borrowing costs which are incurred for the purpose of acquiring or constructing a qualifying asset are

capitalised as part of its cost. Borrowing costs are capitalised while acquisition or construction is

actively underway. Capitalisation of borrowing costs is ceased once the asset is substantially

complete, and is suspended if the development of the asset is suspended.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as

appropriate, only when it is probable that future economic benefits associated with the item will flow

to the Company and the cost of the item can be measured reliably. The carrying amount of the

replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during

the financial period in which they are incurred.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

29

1.

Summary of significant accounting policies

- continued

1.3 Property, plant and equipment

- continued

Increases in the carrying amount arising on revaluation of land and buildings are credited to other

comprehensive income and shown as a revaluation reserve in shareholders’ equity. Decreases that

offset previous increases of the same asset are charged to other comprehensive income and debited

against the revaluation reserve directly in equity; all other decreases are charged to profit or loss.

Each year the difference between depreciation based on the revalued carrying amount of the asset

charged to profit or loss and depreciation based on the asset’s original cost is transferred from the

revaluation reserve to retained earnings.

Land and buildings are depreciated over the remaining term of the emphyteusis. Depreciation on

other assets is calculated using the straight-line method to allocate their cost or revalued amounts to

their residual values over their estimated useful lives, as follows:

%

Land and buildings

1

Electrical and plumbing installation

3 - 8

Plant, machinery and operational equipment

3 - 15

Fixtures and fittings

10 - 20

Office and computer equipment

20 - 33.33

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of

each reporting period. An asset’s carrying amount is written down immediately to its recoverable

amount if the asset’s carrying amount is greater than its estimated recoverable amount (Note 1.4).

Gains and losses on disposals of property, plant and equipment are determined by comparing the

proceeds with carrying amount and are recognised in profit or loss. When the revalued assets are

sold, the amounts included in the revaluation reserve relating to the assets are transferred to

retained earnings.

1.4 Impairment of non-financial assets

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in

circumstances indicate that the carrying amount may not be recoverable. An impairment loss is

recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.

The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.

For

the purposes of assessing impairment, assets are grouped at the lowest levels for which there are

separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill

that suffered an impairment are reviewed for possible reversal of the impairment at the end of each

reporting period.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

30

1.

Summary of significant accounting policies

- continued

1.5 Financial assets

1.5.1 Classification

The Company classifies its financial assets as measured at amortised cost only if both of the

following criteria are met:

- the asset is held within a business model whose objective is to collect the contractual cash flows,

and

- the contractual terms give rise to cash flows that are solely payments of principal and interest.

The Company’s financial assets comprise of trade and other receivables and cash and cash

equivalents in the statement of financial position (Note 1.6 and 1.7 respectively).

These financial

assets are held within a business model whose objective is to hold financial assets in order to collect

contractual cash flows (‘Hold to Collect’) and the contractual terms of the financial assets give rise to

cash flows that are SPPI, and accordingly subsequent to initial recognition are measures at

amortised cost.

These assets are included in current assets, except for maturities greater than

twelve months after the end of the reporting period which are classified as non-current assets.

1.5.2 Recognition and measurement

The Company recognises a financial asset in its statement of financial position when it becomes a

party to the contractual provisions of the instrument. Regular way purchases and sales of financial

assets are recognised on trade date, the date on which the Company commits to purchase or sell

the asset. Financial assets are derecognised when the rights to receive cash flows from the financial

assets have expired or have been transferred and the Company has transferred substantially all the

risks and rewards of ownership or has not retained control of the asset.

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a

financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly

attributable to the acquisition of the financial asset. Subsequent to initial recognition, financial assets

are measured at amortised cost if the financial asset is held within a business model whose objective

is to hold financial assets in order to collect contractual cash flows (‘Hold to Collect’) and the

contractual terms of the financial asset give rise to cash flows that are SPPI.

The amortised cost is

the amount at which the financial asset is measured at initial recognition minus the principal

repayments, plus or minus the cumulative amortisation using the effective interest method of any

difference between the initial amount and the maturity amount, and adjusted for any credit loss

allowance.

1.5.3 Impairment

The Company has two types of financial assets that are subject to the expected credit loss model:

- trade receivables in respect of lease income; and

- cash and cash equivalents.

IFRS 9 requires the measurement of credit loss allowances on financial instruments using the

expected credit loss (“ECL”) impairment model utilising a forward-looking approach that emphasises

shifts in the credit risk attached to a financial instrument, and consequently the probability of future

credit losses, even if no loss events have yet occurred.

IFRS 9 outlines a ‘three-stage’ model for

impairment based on changes in credit quality since initial recognition. The key driver of the

measurement of ECLs therefore relates to the level of credit risk for each exposure and, as a result,

an assessment of the change in credit risk over the expected life of an asset is a core element in

determining the staging criteria under IFRS 9.

The three stages under IFRS 9 are as follows:

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

31

1.

Summary of significant accounting policies

- continued

1.5 Financial assets

- continued

1.5.3 Impairment

- continued

Stage 1 - Financial instruments that have not had a significant increase in credit risk (SICR) since

initial recognition, or that have “low credit risk” at the reporting date are classified in Stage 1. 12-

month ECLs are recorded to measure the expected losses that result from default events that are

possible within 12 months after the reporting date;

Stage 2 - Financial instruments that have experienced a SICR since initial recognition are classified

in Stage 2. Lifetime ECLs are recorded to measure the expected losses that result from all possible

default events over the expected life of the financial instrument; and

Stage 3 - Financial instruments that demonstrate objective evidence of impairment, and which are

considered to be in default or credit-impaired, are classified in Stage 3, also requiring the

measurement of lifetime ECLs.

The Company applies the IFRS 9 simplified approach to measuring expected credit losses for trade

receivables which uses a lifetime expected loss allowance for all receivables. To measure the

expected credit losses, trade receivables are grouped based on shared credit risk characteristics and

the days past due.

The expected loss rates are based on the payment profiles and historical credit

losses of the Company.

The historical loss rates are adjusted to reflect current and forward looking information on

macroeconomic factors affecting the ability of the customers to settle the receivables.

Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that

there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to

engage in a repayment plan with the Company, and a failure to make contractual payments.

Impairment losses on trade receivables are presented as net impairment losses within operating

profit. Subsequent recoveries of amounts previously written off are credited against the same line

item.

1.6 Trade and other receivables

Trade receivables are amounts due from customers for services performed in the ordinary course of

business. They are generally due for settlement within 30 days and therefore are all classified as

current. Trade receivables are recognised initially at the amount of consideration that is

unconditional, unless they contain significant financing components when they are recognised at fair

value.

The Company holds the trade receivables with the objective to collect the contractual cash flows and

therefore measures them subsequently at amortised cost using the effective interest method.

Details about the Company’s impairment policies and the calculation of the loss allowance are

provided in note 1.5.3.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

32

1.

Summary of significant accounting policies

- continued

1.7 Cash and cash equivalents

In the statement of cash flows, cash and cash equivalents includes cash in hand and deposits held

at call with banks.

1.8 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new

shares are shown in equity as a deduction, net of tax, from the proceeds.

1.9 Trade and other payables

Trade and other payables are recognised initially at fair value and subsequently measured at

amortised cost using the effective interest method. Accounts payable are classified as current

liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

1.10 Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are

subsequently stated at amortised cost; any difference between the proceeds (net of transaction

costs) and the redemption value is recognised in profit or loss over the period of the borrowings

using the effective interest method. Borrowings are classified as current liabilities unless the

Company has an unconditional right to defer settlement of the liability for at least twelve months after

the reporting period.

1.11 Deferred Government grants

Grants from the government are recognised at their fair value where there is a reasonable assurance

that the grant will be received and the Company will comply with all attached conditions. Government

grants related to costs are deferred and recognised in profit or loss over the period necessary to

match them with the costs they are intended to compensate.

Government grants related to assets, i.e. in respect of the purchase of property, plant and

equipment, are included in liabilities as deferred government grants, and are credited to profit or loss

on a straight line basis over the expected lives of the related assets, presented within ‘Other

operating income’.

Grants related to income are presented as a deduction in reporting the related expense.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

33

1.

Summary of significant accounting policies

- continued

1.12 Current and deferred tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or

loss, except to the extent that it relates to items recognised in other comprehensive income or

directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in

equity respectively.

Deferred tax is recognised, using the liability method, on temporary differences arising between the

tax bases of assets and liabilities and their carrying amounts in the financial statements. However,

the deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a

transaction other than a business combination that at the time of the transaction affects neither

accounting, nor taxable profit or loss. Deferred tax is determined using tax rates (and laws) that have

been enacted or substantially enacted by the end of the reporting period and are expected to apply

when the related deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will

be available against which the temporary differences can be utilised.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current

tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to

income taxes levied by the same taxation authority on either the same taxable entity or different

taxable entities where there is an intention to settle the balances on a net basis.

1.13 Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods

and services in the ordinary course of the Company’s activities. Revenue is shown net of sales

taxes, rebates and discounts.

The Company recognises revenue when the amount of revenue can be reliably measured, it is

probable that future economic benefits will flow to the entity and when specific criteria have been met

as set out below.

Revenue from services is generally recognised in the period during which the services are provided,

based on the services performed to date as a percentage of the total services to be performed.

Accordingly, revenue is recognised by reference to the stage of completion of the transaction under

the percentage of completion method.

Rental income is recognised in profit or loss on a straight-line basis over the term of the lease.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

34

1.

Summary of significant accounting policies

- continued

1.14 Leases

1.14.1 Company is the lessee

IFRS 16 requires an entity to assess whether a contract is, or contains, a lease at the inception date.

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified

asset for a period of time in exchange for a consideration.

Leases are recognised as a right-of-use

asset and a corresponding liability at the commencement date, being the date at which the leased

asset is available for use by the Company.

Assets and liabilities arising from a lease are initially measured on a present value basis.

Lease

liabilities include the net present value of the following lease payments:

•

fixed payments (including in-substance fixed payments), less any lease incentives receivable;

•

variable lease payments that are based on an index or a rate, initially measured using the index or

rate as at the commencement date;

•

amounts expected to be payable by the Company using residual value guarantees;

•

the exercise price of a purchase option if the Company is reasonably certain to exercise that

option; and

•

payment of penalties for terminating the lease, if the lease term reflects the Company exercising

that option.

Lease payments to be made under reasonably certain extension options are also included in the

measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease.

If that rate cannot be

readily determined, which is generally the case for lessees, the lessee’s incremental borrowing rate

is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to

obtain an asset of similar value to the right-of-use asset in a similar economic environment with

similar terms, security and conditions.

To determine the incremental borrowing rate, the Company:

•

where possible, uses recent third-party financing received by the lessee as a starting point,

adjusted to reflect changes in financing conditions since third party financing was received; and

•

makes adjustments specific to the lease, term, country, currency and security.

Lease payments are allocated between principal and finance cost.

The finance cost is charged to

profit or loss over the lease period so as to produce a constant periodic rate of interest on the

remaining balance of the liability for each period.

Right-of-use assets are initially measured at ‘cost’ which, where applicable, comprises the following:

•

the amount of the initial measurement of lease liability;

•

any lease payments made at or before the commencement date less any lease incentives

received;

•

any initial direct costs; and

•

restoration costs.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

35

1.

Summary of significant accounting policies

- continued

1.14 Leases

- continued

1.14.1 Company is the lessee

- continued

Right-of-use assets linked to owner occupied property are subsequently measured at cost, less

accumulated depreciation and any accumulated impairment losses.

Right-of-use assets are

generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line

basis.

Payments associated with short-term leases and leases of low-value assets are recognised on a

straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of

12 months or less.

1.14.2 Company is the lessor

Lease income from operating leases where the Company is a lessor is recognised in income on a

straight-line basis over the lease term.

Initial direct costs incurred in obtaining an operating lease are

added to the carrying amount of the underlying asset and recognised as an expense over the lease

term on the same basis as lease income.

The respective leased assets are included in the balance

sheet based on their nature.

1.15 Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s

financial statements in the period in which the dividends are approved by the Company’s

shareholders.

2.

Financial risk management

2.1 Financial risk factors

The Company’s activities potentially expose it to a variety of financial risks: market risk (including

currency risk, fair value interest rate risk and cash flow interest rate risk), credit risk and liquidity risk.

The Company’s overall risk management, focuses on the unpredictability of financial markets and

seeks to minimise potential adverse effects on the Company’s financial performance. The

Company’s board of Directors provides principles for overall risk management, as well as policies

covering risks referred to above and specific areas such as investment of excess liquidity. The

Company did not make use of derivative financial instruments to hedge certain risk exposures during

the current and preceding financial years.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

36

2.

Financial risk management

- continued

2.1 Financial risk factors

- continued

(a)

Market risk

(i)

Foreign exchange risk

The Company’s revenues and operating expenditure together with its financial assets and liabilities,

including financing, are predominantly denominated in euro. Accordingly, the Company is not

significantly exposed to foreign exchange risk. A sensitivity analysis for foreign exchange risk

disclosing how profit or loss and equity would have been affected by changes in foreign exchange

rates that were reasonably possible at the end of the reporting period is not deemed necessary.

(ii)

Cash flow and fair value interest rate risk

The Company’s significant instruments which are subject to fixed interest rates comprise the

principal bank borrowings and deposits effected under operating lease arrangements. In this respect,

the Company is potentially exposed to fair value interest rate risk in view of the fixed interest nature

of these instruments, which are however measured at amortised cost and therefore any changes in

interest rates will not have an effect on profit or loss and equity. The Company’s cash flow interest

rate risk principally arises from specific bank borrowings issued at variable rates (Note 11).

Management monitors the impact of changes in market interest rates on amounts reported in the

profit or loss in respect of these latter instruments. Based on this analysis, management considers

the potential impact on profit or loss of a defined interest rate shift that is reasonably possible at the

end of the reporting period to be immaterial. The Company’s operating cash flows are substantially

independent of changes in market interest rates and accordingly the level of interest rate risk is

contained.

(b)

Credit risk

Credit risk arises from cash and cash equivalents (Note 7) and trade receivables (Note 6), which

constitute the Company’s financial assets that are subject to the expected credit loss model.

The

Company’s exposures to credit risk are analysed in the respective notes to the financial statements.

The maximum exposure to credit risk at the end of the reporting period in respect of these financial

assets is equivalent to their carrying amount. Except for the security deposits effected by tenants, the

Company does not hold any collateral as security in this respect.

The Company banks only with local financial institutions with high quality standard or rating. The

Company invoices its customers quarterly in advance and assesses the credit quality of its

customers taking into account financial position, past experience and other factors. It has policies in

place to ensure that sales of services are effected to customers with an appropriate credit history.

The Company monitors the performance of its receivables on a regular basis to identify expected

and incurred collection losses, which are inherent in the Company’s receivables, taking into account

historical experience in collection of accounts receivable. Management does not expect any material

losses from non-performance by its debtors except as outlined below.

The expected credit loss rates are based on the payment profiles of sales over the historical period

available to the Company.

Management also considers any adjustment to the historical loss rates to

reflect current and forward-looking information on macroeconomic factors affecting the ability of the

customers to settle the receivables.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

37

2.

Financial risk management

- continued

2.1 Financial risk factors

- continued

As of 31 December 2022, the amount of billed rental and service charges due from tenants in

respect of the previous twelve months was insignificant and accordingly no trade receivables were

deemed to be long outstanding or credit impaired. The balance due as at the end of year principally

represented billing in advance in respect of 2023 which was recovered by the time of issuance of

these financial statements.

Accordingly, the credit loss allowances in respect of trade receivables

are insignificant.

As at the end of the reporting period, the Company had past due, but not credit impaired, receivables

amounting to €400,040 (2021: €105,293). The Company manages credit exposures actively in a

practicable manner such that past due amounts receivable from customers are within controlled

parameters. The Company’s trade receivables, which are not credit impaired financial assets, are

principally debts in respect of transactions with customers for whom there is no recent history of

default. Management does not expect any material losses from non-performance by these

customers.

As outlined previously, the Company holds security deposits (Note 10) effected under operating

lease arrangements by a number of tenants, which contain the potential expected credit losses on

billing in advance.

In view of the nature of the Company’s activities, which constitute the operation of a shopping mall, a

limited number of customers constitute a major portion of the entity’s trade receivables (refer to Note

14). However, this does not give rise to heightened concentration risk in management’s view.

The Company’s receivables included amounts owed by related parties. Management monitors

related party credit exposures at individual entity level and ensures timely performance in the context

of overall liquidity management. The Company takes cognisance of the related party relationship

with these debtors and management does not expect any losses from non-performance or default.

While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the

identified expected credit loss was insignificant.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

38

2.

Financial risk management

- continued

2.1 Financial risk factors

- continued

(c)

Liquidity risk

The Company is exposed to liquidity risk in relation to meeting future obligations associated with its

financial liabilities, which comprise interest-bearing borrowings (Note 11), lease liabilities (Note 12)

and trade and other payables (Note 10). Prudent liquidity risk management includes maintaining

sufficient cash and committed credit lines to ensure the availability of an adequate amount of funding

to meet the Company’s obligations.

Management monitors liquidity risk by means of cash flow forecasts on the basis of expected cash

flows from operation of 'The Point Shopping Mall'. This includes reviewing the matching or otherwise

of expected cash inflows and outflows arising from expected maturities of financial instruments. On

the basis of the forecasts, management ensures that no additional financing facilities are expected to

be required.

As at 31 December 2021 and 2022, the Company had an unutilised banking facility for

the amount of €500,000.

As at 31 December 2022, the Company’s current liabilities exceeded its current assets by €0.9

million (2021: €0.5 million). The Company has continued to manage this position during the course

of the current financial year through a programme of active liquidity management.

The directors had

anticipated that this working capital shortfall position would continue to be managed in the immediate

future, on the basis of projections which had been prepared by management evidencing the

profitable rental income streams which were expected to flow to the Company in business as usual

circumstances.

The Company’s senior management team compiled detailed financial projections for the year ending

31 December 2023.

These comprise historical financial information up to the date of authorisation

for issue of these financial statements and forecast financial information for the residual period.

Based on the outcome of these cash flow projections the Directors and senior management also

consider the going concern assumption in the preparation of the Company’s financial statements as

appropriate as at the date of authorisation for issue of the 2022 financial statements.

They also

believe that no material uncertainty that may cast significant doubt about the Company’s ability to

continue as a going concern exists as at that date.

The Company’s trade and other payables with the exception of specific liabilities (refer to Note 10)

are entirely repayable within one year from the end of the reporting period. The following table

analyses the Company’s borrowings, lease liabilities and deposits arising under operating leases

classified as other payables into relevant maturity groupings based on the remaining period from the

end of the reporting period to the contractual maturity date. The amounts disclosed in the table are

the contractual undiscounted cash flows.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

39

2.

Financial risk management

- continued

2.1 Financial risk factors

- continued

Total

Carrying

L

ess than

Between 1

Between 2

Over

contractual

amount

1 year

and 2

years

and 5 years

5 years

c

ash

f

lows

€

€

€

€

€

€

31 December 2022

Borrowings

8

,

985

,229

2,182,027

1,689,923

5,192,238

645,337

9,709,525

Lease liabilities

4,313,891

237,453

239,963

919,330

20,175,104

21,571,850

Other payables

667,367

109,773

146,364

439,092

54,280

74

9

,509

13,966,487

2,529,253

2,076,250

6,550,660

20,874,721

32,030,884

Total

Carrying

L

ess than

Between 1

Between 2

Over

contractual

amount

1 year

and 2

ye

ars

and 5 years

5 years

c

ash

flows

€

€

€

€

€

€

31 December 2021

Borrowings

11,798,238

2,

198,490

2,

129

,886

6,

071,047

2,798,

278

13,197,701

Lease liabilities

4,256,073

235,424

237,453

852,999

19,324,088

20,649,964

Other payables

695,642

8,884

10

9

,773

439,092

200,644

758,393

16,749,9

53

2,

44

2,798

2,

477,112

7,

363,138

22,3

23,010

34,606,058

2.2 Capital risk management

The Company’s objectives when managing capital are to safeguard the Company’s ability to

continue as a going concern in order to provide returns for shareholders, and to maintain an optimal

capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the

Company may issue new shares or adjust the amount of dividends paid to shareholders.

The Company’s equity, as disclosed in the statement of financial position, constitutes its capital.

The

Company maintains the level of capital by reference to its financial obligations and commitments

arising from operational requirements.

The adequacy of the Company’s capital level as at the end of

the reporting period is reviewed in the context of the nature of the Company’s activities and the

extent of borrowings or debt. The aggregate of the Company’s bank borrowings, net of cash and

cash equivalents, and lease liabilities represents 15.2% of the Company’s equity as at 31 December

2022 (2021: 20.8%).

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

40

2.

Financial risk management

- continued

2.3 Fair values of financial instruments

The Company is required to disclose fair value measurements and disclosures by level of a fair value

measurement hierarchy for financial instruments (Level 1, 2 or 3). The different levels of the fair

value hierarchy are defined as fair values using:

•

Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).

•

Inputs other than quoted prices included within Level 1 that are observable for the asset or

liability either directly i.e. as prices, or indirectly i.e. derived from prices (Level 2).

•

Inputs for the asset or liability that are not based on observable market data i.e.

unobservable inputs (Level 3).

At 31 December 2022 and 2021 the carrying amount of financial instruments, comprising cash at

bank, receivables, payables, accrued expenses, short-term borrowings and other short-term

liabilities, is equivalent to their fair values in view of the nature of the instruments or their short-term

maturity. The fair value of the non-current financial liabilities, comprising borrowings, for disclosure

purposes is estimated by discounting the future contractual cash flows at the current market interest

rate that is available to the Company for similar financial instruments. The estimated fair value of the

Company’s bank borrowings (Note 11) as at the end of the reporting period is not materially different

from the carrying amounts. The current market interest rates utilised for discounting purposes, which

were almost equivalent to the respective instruments’ contractual interest rates, are deemed

observable and accordingly these fair value estimates have been categorised as Level 2.

3.

Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and based on historical experience and other

factors including expectations of future events that are believed to be reasonable under the

circumstances.

In the opinion of the Directors, the accounting estimates and judgements made in the course of

preparing these financial statements are not difficult, subjective or complex to a degree which would

warrant their description as critical in terms of the requirements of IAS 1.

As referred to in Note 4 to the financial statements, the Company’s land and buildings category of

property, plant and equipment is fair valued on the basis of professional advice, which considers the

cash flows emanating from the operation of the property and other key inputs, namely the discount

and growth rates.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

41

4.

Property, plant and equipment

Plant and

Office

other

equipment,

Land and

integral

furniture

buildings

assets

and fittings

Total

€

€

€

€

At

1 January 2021

Cost or valuation

67,456,666

16,655,705

1,947,476

86,059,847

Accumulated depreciation

(2,924,932)

(7,471,270)

(888,871)

(11,285,073)

Net book amount

6

4

,531,734

9,1

84,43

5

1,0

5

8,605

74,774,774

Year ended 31 December

2021

Opening net book amount

64,531,734

9,184,435

1,058,605

74,774,774

Additions

57,

92

4

78,629

81,075

217,628

Revaluation surplus arising

during the year (Note 9)

- impacts on cost or valuation

4,324,332

-

-

4,324,332

- impacts on accumulated

depreciation

3,901,628

-

-

3,901,628

Depreciat

ion charge

(976,696)

(725,753)

(115,913)

(1,818,362)

Closing net boo

k amount

71,

838,922

8,537,311

1,023,767

81,400,000

At 31 Decemb

er

2

021

Cost or valuation

71,838,922

16,734,334

2,028,551

90,601,807

Accumulated deprec

iation

-

(8,197,023)

(1,004,784)

(9,201,807)

Net book amount

71,838,

922

8,537,311

1,023,767

81,400,000

Year ended 31 December

2022

Opening net book amount

71,838,922

8,537,311

1,023,767

81,400,000

Additions

1,385,417

213,532

6,622

1,605,571

Depreciat

ion charge

(1,134,471)

(762,628)

(114,616)

(2,011,715)

Closing net book amount

72,089,868

7,988,215

915,773

80,993,856

At 31 December

202

2

Cost or valuation

73,224,339

16,947,866

2,035,173

92,207,378

Accumulated deprec

iation

(1,134,471)

(8,959,651)

(1,119,400)

(11,213,522)

Net book amount

7

2,089,868

7,988,215

915,773

80,993,856

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

42

4.

Property, plant and equipment

- continued

The Company operates The Point Shopping Mall, a fully serviced shopping mall, which activity

extends beyond the mere leasing out of retail space. The extent of the services provided is deemed

to be significant to the arrangement with the tenants as a whole. Accordingly, the shopping mall is

treated as property, plant and equipment under the requirements of IAS 16 rather than investment

property under IAS 40.

MIDI p.l.c. had granted the Property to the Company by title of temporary sub-emphyteusis in

October 2010, commencing from the date of the grant, for the remaining period out of the original

period of 99 years which commenced from 15 June 2000. The annual sub-ground rent consists of a

proportionate part of the original annual ground rent together with an increase of ground rent payable

to MIDI p.l.c. The increase of ground rent payable to MIDI p.l.c. is a nominal amount. The

proportionate part pertaining to the Property out of the original annual ground rent imposed on all of

the land granted by the Emphyteutical Deed is currently €76,000. This original ground rent will

increase in accordance with the terms of the Emphyteutical Deed on 1 April 2025 and on 1 April

2050. As security for the payment of the sub-ground rent and its proportionate share of the original

ground rent, the Company granted to MIDI p.l.c. a general hypothec on all its property present and

future in general and a special privilege on the Property.

Bank borrowings are secured on the Company’s property, plant and equipment (Note 11).

Fair value of land and buildings

The Company’s property (land and buildings comprising The Point Shopping Mall) was last revalued

by independent, professionally qualified valuers on 31 December 2021. This valuation had been

carried out by Archi+ (a firm of architects).

The book value of the property had been adjusted to the

revalued amount and the resultant revaluation surplus, net of applicable deferred taxes, had been

credited to the revaluation reserve in shareholders’ equity. The Directors have reviewed the carrying

amount of the property as at 31 December 2022 on the basis of management’s assessment as

further explained in the Note below under

Valuation processes.

No adjustments to the carrying

amount were deemed necessary as at that date as the estimated fair value was considered to

approximate the carrying amount.

The Company is required to analyse non-financial assets carried at fair value by level of the fair

value hierarchy within which the recurring fair value measurements are categorised in their entirety

(Level 1, 2 or 3). The different levels of the fair value hierarchy have been defined as fair value

measurements using:

•

Quoted prices (unadjusted) in active markets for identical assets (Level 1);

•

Inputs other than quoted prices included within Level 1 that are observable for the asset,

either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2);

•

Inputs for the asset that are not based on observable market data (that is, unobservable

inputs) (Level 3).

The recurring property fair value measurement, in relation to The Point Shopping Mall, uses

significant unobservable inputs and is accordingly categorised within Level 3 of the fair valuation

hierarchy.

The Company’s policy is to recognise transfers into and out of fair value hierarchy levels as of the

beginning of the reporting period. There were no transfers between different levels of the fair value

hierarchy during the years ended 31 December 2022 and 2021.

A reconciliation of the opening balance to the closing balance of non-financial assets for recurring

fair value measurements categorised within Level 3 of the fair value hierarchy is reflected in the table

above. The only movements reflect additions, revaluation surplus and depreciation charges for the

years ended 31 December 2022 and 2021.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

43

4.

Property, plant and equipment

- continued

Valuation processes

The valuation of the property is performed regularly by external independent, qualified valuers on the

basis of a model using discounted cash flows. The valuation model, the underlying inputs and the

assumptions are reviewed by the CEO and the Financial Controller. When the CEO (Chief Executive

Officer) and the Financial Controller consider that the valuation model, inputs to the model and

valuation assumptions are appropriate, the valuation is recommended to the audit committee. The

audit committee considers the valuation as part of its overall responsibilities.

At the end of every reporting period, the CEO (Chief Executive Officer) and the Financial Controller

assess whether any significant changes in actual circumstances, projected and registered income

streams, financial results and other factors have been experienced since the last external valuation.

The CEO and the Financial Controller report to the audit committee on the outcome of this

assessment.

As highlighted previously, the Company’s property (land and buildings comprising The Point

Shopping Mall) was last revalued by independent, professionally qualified valuers on 31 December

2021.

The valuation of the Point Shopping Mall was updated to reflect the actual and projected

earnings emanating from the operation of The Point Shopping Mall, by reassessing future cash flows

in order to reflect the current operating results and future projections, taking account of the current

tenant rental schedules. Discount rate assumptions had also been updated, primarily to reflect

movements in current market conditions and yields. Subsequent to this revaluation, The Point

Shopping Mall, which is accounted for as property, plant and equipment in the statement of financial

position, was carried at €81.4 million as at 31 December 2021. The resultant revaluation surplus

amounted to €5.3 million, net of applicable deferred taxes.

As at 31 December 2022, management has updated the valuation model utilised for the purposes of

the last external valuation, by reassessing the projected future free cash flows and the assumptions

in respect of the growth rate and the discount rate.

The carrying amount of the property as at 31

December 2022 approximated the estimated fair value emanating from management’s assessment

and accordingly no adjustments to the carrying value were deemed necessary.

Valuation techniques

The Level 3 fair valuation of The Point Shopping Mall was determined using discounted cash flow

(“DCF”) projections based on significant unobservable inputs. These inputs include:

Free cash flows after tax based on contracted and projected rental income streams covering the

remaining term of the sub-emphyteusis less operating expenditure

necessary to manage the shopping mall, comprising mainly marketing,

maintenance and similar expenses but p

rior to depreciation and financing

charges;

Growth rate

based on management’s estimated average growth of the Company’s

earnings levels over the remaining term of the sub-emphyteusis, mainly

determined by contractual and projected growth in rental income

streams;

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

44

4.

Property, plant and equipment

- continued

Discount rate

reflecting the current market assessment of the uncertainty in the amount

and timing of projected cash flows. The discount rate reflects the

estimated weighted average cost of capital that would be available to a

REO for financing such an operation. The discount rate is based on an

assumed debt to equity ratio; estimation of cost of equity is based on risk

free interest rates adjusted for country risk and equity risk premium

adjusted for entity-specific risk factor; estimation of cost of debt is based

on risk free interest rates adjusted for country risk and assumed credit

spread.

Information about fair value measurements using significant unobservable inputs (level 3)

The significant unobservable inputs applied in the property valuation are the following:

- Projected future free cash flows which average out at €6.6 million per annum over the next three

financial years;

- Growth rate at an approximate average of 3.2% reflecting principally the estimated projected

growth of the Company’s rental income streams;

- A discount rate of 9.2% applied in estimating the net present value of the projected future free cash

flows.

An increase in the projected levels of free cash flows after tax and in the growth rate would result in

an increased fair value of the property, whereas a higher discount rate would give rise to a lower fair

value.

Historical cost of land and buildings

If the land and buildings were stated on the historical cost basis, the amounts would be as follows:

20

2

2

2021

€

€

Cost

49,517,985

48,132,568

Accumulated depreciation

(9,646,786)

(8,512,315)

Net book amount

39,871,199

39,620,253

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

45

5.

Right-of-use assets

As explained in note 4, MIDI p.l.c. had granted the Property to the Company by title of temporary

sub-emphyteusis. The annual sub-ground rent consists of a proportionate part of the original annual

ground rent, which has been determined to fall within the scope of IFRS 16. Ground rent is also

payable on the same basis on the car parking spaces acquired by the Company during 2018.

Property

€

At

1 January

20

2

1

Cost

4,093,264

Accumulated depreciation

(101,641)

Net book amount

3,991,623

Year ended 31 December 202

1

Opening net book amount

3,991,623

Depreciation charge

(50,751)

Closing net book amount

3,940,872

At

31 December 20

2

1

Cost

4,093,264

Accumulated depreciation

(152,392)

Net book amount

3,940,872

Year ended 31 December 202

2

Opening net book amount

3,940,872

Depreciation charge

(50,751)

Closing net book amount

3,890,121

At

31 December 20

2

2

Cost

4,093,264

Accumulated depreciation

(203,143)

Net book

amount

3,890,121

There were no additions to right-of-use assets during the 2022 financial year.

Extension and termination options

Extension and termination options are included in the temporary emphyteusis agreement with the

Government of Malta, relating to The Point Shopping Mall. The extension and termination options

held are exercisable only by the respective lessor and not by the Company.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

46

6.

Trade and other receivables

20

2

2

2021

€

€

Current

Trade receivables - net of credit loss provisions

400,040

105,293

Trade receivables in respect of billing in advance

1,940,991

2,025,462

Other assets, prepayments and accrued income

1,259,685

850,481

3,600,716

2,981,236

7.

Cash and cash equivalents

For the purposes of the statement of cash flows, cash and cash equivalents comprise the following:

20

2

2

2021

€

€

Cash at bank and in hand

3,074,724

2,826,649

8.

Share capital

20

2

2

2021

€

€

A

uth

orised

60,000,000 ordinary shares of €0.50 each

30,000,000

30,000,000

Issued

56,400,000 ordinary shares of €0.50 each, fully paid up

(net of share issue costs)

27,766

,888

27,766,888

The amount presented in the statement of financial position in relation to issued share capital is net

of share issue expenses amounting to €433,112.

In accordance with the Company’s Memorandum and Articles of Association, each ordinary share

gives the right to one vote, participates equally in profits distributed by the Company and carries

equal rights.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

47

9.

Revaluation reserve

20

2

2

2021

€

€

Revaluation of land a

nd buildings

At beginning of year

19,2

75,233

14,108,925

Revaluation surplus arising during the year

-

8,225,960

Deferred income taxes on revaluation surplus

arising during the year

-

(2,879,086)

Transfer to retained earnings

(

247,196

)

(180,566)

At end of year

19,

028,037

19,275,233

The tax impact relating to components of other comprehensive income recognised during the current

and preceding financial years is presented in the table above. The revaluation reserve is non-

distributable.

10.

Trade and other payables

20

2

2

2021

€

€

Current

Trade payables

264,411

270,125

Other payables

304,444

318,695

Indirect taxation

678,936

619,976

Deferred income in respect of billing in advance

2,593,625

1,912,710

Accruals and other deferred income

486,29

4

410,326

4,327,71

0

3,531,832

Non

-

current

Other payables

667,367

695,642

Non-current other payables represent deposits effected under operating lease arrangements by a

number of tenants at ‘The Point Shopping Mall’. These amounts are refundable at the end of the

lease term and are subject to interest not exceeding 3% per annum.

11.

Borrowings

20

2

2

2021

€

€

Year ended 31 December

At beginning of year

11,798,328

14,934,494

Additions

-

175,500

Repayments

(2,813,099)

(3,311,666)

At end of year

8,985,229

11,798,328

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

48

11.

Borrowings

- continued

20

2

2

2021

€

€

Current

Bank loans

1,944,037

1,787,234

Non

-

current

Bank loans

7,041,192

10,011,094

Total borrowings

8,985

,229

11,798,328

Bank borrowings are secured by a general hypothec on the Company’s assets and by a special

hypothec over the title of temporary emphyteusis granted by the Government of Malta, expiring in

2099. This temporary emphyteusis commenced on 15 June 2000 over the parcel of land at Tigné

Point developed into the shopping mall (T2). Moreover, the bank borrowings are secured by a

pledge on the comprehensive insurance policy covering The Point shopping mall, which secures the

loans to the extent of those risks covered in the policy.

The weighted effective interest rates as at the end of the reporting period are as follows:

2022

2021

Bank loans

3.0%

3.0%

2022

2021

€

€

Maturity of bank borrowings:

Within one year

1,944,037

1,787,234

Between one and two years

1,500,000

1,794,600

Between two and five years

4,909,840

5,433,684

Over five years

631,352

2,782,810

8,985,229

11,798,328

At 31 December 2022 and 2021, the Company also had an unutilised overdraft facility amounting to

€500,000.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

49

12.

Lease liabilities

The lease liabilities associated with the recognised right-of-use assets are analysed below:

202

2

2021

€

€

Non

-

current

Property

4,225,088

4,167,270

Current

Pr

operty

88,

803

88,803

Total lease liabilities

4,313,891

4,256,073

The total cash outflows for leases, in respect of liabilities reflected above, in 2022 amounted to

€88,803 (2021: €88,803). The contractual undiscounted cash flows attributable to lease liabilities as

at 31 December 2022 are analysed in Note 2.1 c.

The movement in the carrying amount of these liabilities is analysed in the following table:

202

2

202

1

€

€

As

a

t

b

e

ginning of year

4,256,073

4,200,211

P

ayme

nts

(88,803)

(88,803)

Interest charge

(Note

19

)

14

6,621

144,665

As

at end of year

4,313,

8

91

4,256,073

The interest charge reflected in the table above is recognised in profit or loss.

The depreciation

charge in respect of the related right-of-use assets (Note 5) is also recognised in profit or loss.

Amounts recognised in profit or loss in respect of short-term lease arrangements are disclosed in

note 15 to the financial statements.

13.

Deferred taxation

Deferred income taxes are calculated on all temporary differences under the liability method using a

principal tax rate of 35% (2021: 35%). The movement on the deferred income tax account is

analysed as follows:

202

2

2021

€

€

At beginning of year

13,216,202

10,475,506

Tax relating to components of other comprehensive income:

- revaluation of land and buildings (Note 9)

-

2,879,086

Credited to profit or loss:

- differences between depreciation and capital

allowances on property, plant and equipment (Note 20)

(

152,034

)

(138,390)

- differences arising on fair valuation of property

(59,

901)

-

At end of year

13,004,267

13,216,202

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

50

13.

Deferred taxation

- continued

The deferred tax liability as at 31 December represents:

20

2

2

2021

€

€

Temporary differences arising on fair valuation of property

11,

347,035

11,406,936

Temporary differences arising between tax base and

carrying amount of property, plant and equipment

1,

657,232

1,809,266

13,004,267

13,216,202

The recognised deferred tax liabilities are expected to be settled principally after more than twelve

months from the end of the reporting period.

14.

Revenue

The Company’s revenue was principally derived from operating lease rental income attributable to

retail outlets in 'The Point Shopping Mall' together with the provision of related services, which

operation constitutes the sole operating segment of the Company. Revenues from transactions with

three customers amounting to €1,424,704, €999,170, and €996,387 (2021: €762,920, €696,654 and

€845,264) respectively, each represent more than 10% of the Company’s revenues. Variable rents

linked to tenant sales performance recognised in profit or loss during the current financial year

amounted to €510,018 (2021: €400,736).

Revenue from the car park operation during 2022

amounted to €414,483 (2021: €399,579).

On 11 March 2021, the Company had announced that in the light of the COVID-19 pandemic, The

Point Shopping Mall was closed for business in line with the directions given by the National Health

Authorities and its operations were principally suspended.

Following subsequent direction given by

the same National Health Authorities ‘The Point Shopping Mall’ re-opened for business on 26 April

2021. With a view to alleviating the business disruption experienced by the tenants, the Company

decided to accord rent relief to tenants within structured programmes without modifying the lease

agreements in place. To this effect, the Company established eligibility criteria for rent relief and

granted abatement selectively to qualifying tenants to the extent of €0.9m in relation to the financial

year ended 31 December 2021.

The concessions described above were deemed to be equivalent to partial waiver of lease payments

emanating from the currently applicable terms and conditions within the lease agreements, taking

into account the substance implied in the content of specific clauses within the agreements in place.

These concessions were not considered to have arisen out of a modification of the lease

agreements. The term of the respective leases remained unchanged and similarly the scope of the

lease was not modified. The amounts of the concessions have been treated as

negative variable

lease payments.

Consequently, the waived lease income arising from the relief given to tenants had

been recognised as a reduction in revenue during the financial period in which the condition that

triggered the reduced payments occurred, during the preceding financial year.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

51

15.

Expenses by nature

2

0

2

2

202

1

€

€

Employee ben

efit expen

se (Note 1

6

)

10

8

,303

6

7

,026

Directors’ fees

(Note

2

1

)

8

7

,453

65

,305

Depreciation of property, plant

and equi

pment

(

No

t

e 4)

2,011,715

1,818,

362

Depreciation of right

-

of

-

use assets (Note 5)

50,751

50,751

Adve

rtis

i

ng and bus

iness

promotion

expenses

90,357

100,000

Car park management fees

165,857

157,959

Service charge expenditure

–

short

fall

109

,424

98,1

43

Other exp

e

ns

es

295,98

5

238,

152

Total cost of sales and adm

inistrative and other expenses

2,91

9,84

5

2,5

95,69

8

Motor vehicle operating lease charges and similar expenses, prior to amounts recharged to tenants

as service charges, recognised in profit and loss during the current financial year amounted to

€23,546 (2021: €22,267). The lease agreements in place for motor vehicles are deemed to be short-

term arrangements for the purposes of IFRS 16.

Auditor’s fees

Fees charged by the audit firm for services rendered during the financial years ended 31 December

2022 and 2021 relate to the following:

20

2

2

2021

€

€

Annual statutory audit

3

7

,000

32,000

Other assurance services

-

8,000

Tax compliance and advisory services

2,870

2,150

3

9

,

8

7

0

4

2

,150

Other non-assurance services amounting to €9,500 (2021: nil) have been charged to the Company

by connected undertakings of the audit firm.

16.

Employee benefit expense

20

2

2

2021

€

€

Wages and salaries

33

1,093

273,356

Social security costs

14,707

14,075

34

5

,800

287,431

Less amounts recharged to tenants as service charges

(237,497)

(220,405)

10

8

,303

67,026

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

52

16.

Employee benefit expense

- continued

Average number of persons employed by the Company during the year:

20

2

2

2021

Operational

1

1

Administration

5

5

6

6

Wages and salaries within the table above are presented net of grants received from the

Government of Malta under the COVID-19 Wage Supplement Scheme amounting to €4,198 (2021:

€26,571). Grants related to income are presented as a deduction in reporting the related expense

which the grant is intended to compensate for.

17.

Other operating income

Other operating income relates to income received upon the termination of lease agreements during

the financial year ended 31 December 2021.

18.

Finance income

20

2

2

2021

€

€

Interest charged to debtors on overdue balances

2,165

572

19.

Finance costs

20

2

2

2021

€

€

Bank interest payable

296

,60

8

398,747

Interest on tenant deposits

12,408

27,329

Interest expense on lease liability (Note 12)

146,621

144,665

Other charges

19,04

9

15,829

474

,686

586,570

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

53

20.

Tax expense

20

2

2

2021

€

€

Current tax expense

1,223,6

21

959,860

Deferred tax credit (Note 13)

(211,9

35)

(138,390)

1,011,686

8

21,470

The tax on the Company’s profit before tax differs from the theoretical amount that would arise using

the basic tax rate applicable as follows:

2

0

2

2

2021

€

€

Profit befor

e t

a

x

4,776,832

3,635

,659

Tax

on profit at 35%

1,671,891

1,272,481

Tax

effect of:

Expenses not deductible for tax purposes

898,817

830,586

Application of tax rules for the leasing of

commercial tenements (see Note below)

(1,534,419)

(1,283,019)

Income not subject to tax

(17,089)

-

O

ther differences

(7,514)

1,42

2

Tax expen

se

1,011,686

821,470

Through the Budget Measures Implementation Act, 2016 (ACT No. XV of 2016), landlords were

granted the option of being taxed on rental income, derived from the leasing of any tenement

including commercial outlets and clubs, at a final withholding tax rate of 15% on the gross rental

income. The substance of the legislation is that although the Company continues to be subject to

income tax at the corporate tax rate of 35%, the effective tax rate in any given year is reduced to a

lower rate if a lower tax charge is produced by multiplying the gross rental income by 15%.

21.

Directors’ emoluments

20

2

2

2021

€

€

Directors’ fees

8

7

,453

65,305

22.

Earnings per share

20

2

2

2021

Net profit attributable to equity holders of the Company

3,76

5,146

2,814,189

Weighted average number of ordinary shares in issue

56,

400,000

56,400,000

Earnings per share (euro cents)

6

.68

4.99

The Company has no instruments or arrangements which give rise to dilutive potential ordinary

shares, and accordingly diluted earnings per share is equivalent to basic earnings per share.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

54

23.

Cash generated from operations

Reconciliation of operating profit to cash generated from operations:

20

2

2

202

1

€

€

Operating

profit

5,249,35

3

4,

221,657

Adjustments for:

Depreciation

of property,

plant and equipm

ent (Note 4)

2,011,715

1,8

18,362

Depreciation of right

-

of

-

use assets (Note 5)

50,751

50,751

Cha

nges in work

ing capital:

Trade and oth

e

r receivables

(

619,480

)

(768,809)

Trade and other

payables

767,60

3

(73,416)

Cash gene

rated from operations

7,459,94

2

5,

248,545

24.

Commitments

Operating lease commitments - where the Company is a lessor

The future minimum lease payments receivable under non-cancellable operating leases entered into

by the Company in relation to operations from The Point Shopping Mall are as follows:

20

2

2

202

1

€

€

Not later than 1 year

6,650,558

6,723,581

Later than 1 year and not later than 5 years

19,822,019

21,800,781

Later than 5 years

24,275,984

26,693,383

50,748,

56

1

55,217,745

The operating lease agreements entered into by the Company with the tenants of the shopping mall

typically run for a significant number of years. These contracts generally provide that the lease

payments increase by a predetermined percentage every year, which increases have been reflected

in the figures above. A significant number of these arrangements also provide for contingent rentals

based on outlet turnover levels.

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

55

24.

Commitments

- continued

Operating lease commitments - where the Company is a lessee

The future minimum lease payments payable under non-cancellable motor vehicle operating leases

and minimum payments under similar arrangements (maintenance services) are as follows:

20

2

2

202

1

€

€

Not later th

an 1 yea

r

19,140

19,14

0

Later than 1 year and not late

r t

han 5 years

23,640

42,780

42,780

61,920

The lease arrangements in place for motor vehicles fall within the definition of short-term leases for

the purposes of IFRS 16.

The Company has other commitments as referred to in Note 4.

25.

Related party transactions

Mapfre MSV Life p.l.c., HSBC Life Assurance Ltd and Bank of Valletta p.l.c., by virtue of the extent of

their shareholding in the Company, are considered to be related parties. All companies owned or

controlled by these entities, together with all companies forming part of the same groups of

companies of which the shareholders form part, are also deemed to be related parties.

Tigné Mall p.l.c.’s Directors (key management personnel), close members of their families and all

entities owned or controlled by these individuals, are considered to be related parties of Tigné Mall

p.l.c.

Principal balances held with parties considered as related parties

As at

31

December

20

2

2

2021

€

€

Bank borrowings

8,985,229

11,798,328

TIGNÉ MALL p.l.c.

Annual Financial Report and Financial Statements - 31 December 2022

56

25.

Related party transactions

– continued

Principal transactions with parties considered as related parties

Year ended

31

December

20

2

2

2021

€

€

Bank interest payable

(296,6

0

8

)

(398,747)

Bank charges

(18,67

3

)

(15,829)

Rental income

150

11,000

The Company also enters into other transactions with other related parties, such as the placement of

insurance risks, but the related transaction amounts are not considered to have a material impact on

the financial results and financial position of the Company.

Fees payable to the Directors are disclosed in note 21 to these financial statements.

In the opinion of the Directors, all related party transactions have been carried out on an arm’s length

basis taking cognisance of normal commercial terms.

26.

Dividends

A dividend in respect of the year ended 31 December 2022 of €0.013564 (2021: €0.013298) per

share, amounting to a net amount of €765,000 (2021: €750,000) was proposed by the Board of

Directors subsequent to the end of the reporting period.

The financial statements do not reflect the

dividend proposed after 31 December 2022, which will be recognised as an appropriation of retained

earnings during the financial year ending 31 December 2023.

During the current financial year, the

Company paid a net interim dividend of €750,000 (2021: €378,929) equivalent to €0.013298 (2021:

€0.006719) per ordinary share and also a final net dividend of €750,000 equivalent to €0.013298 per

ordinary share in respect of the prior period financial results as outlined previously.

27.

Statutory information

Tigné Mall p.l.c. is a public limited Company and is domiciled and incorporated in Malta, with its

registered address at Management Suite, The Point Shopping Mall, Pjazza Tigné Point, TP 01,

Malta. Its ordinary shares are listed on the Malta Stock Exchange.

Logo

Independent auditor’s report

To the Shareholders of Tigné Mall p.l.c.

Report on the audit of the financial statements

Our opinion

In our opinion:

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

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

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

What we have audited

Tigné Mall p.l.c.’s financial statements comprise:

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

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

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

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

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

Basis for opinion

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

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

Independence

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

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

The non-audit services that we have provided to the company, in the period from 1 January 2022 to 31 December 2022, are disclosed in note 15 to the financial statements.

Our audit approach

Overview

Diagram

· Overall materiality: €238,000, which represents 5% of the profit before tax for the year.

· Valuation of The Point Shopping Mall

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

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

Materiality

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

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

Overall materiality

€238,000

How we determined it

5% of the profit before tax for the year

Rationale for the materiality benchmark applied

We chose profit before tax as the benchmark because, in our view, it is the benchmark against which the performance of the Company is most commonly measured by users and is a generally accepted benchmark.

We selected 5%, which is within the range of quantitative materiality thresholds that we consider acceptable.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit above €23,800 as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.

Key audit matters

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

Key audit matter

How our audit addressed the Key audit matter

Valuation of The Point Shopping Mall

The Company’s main asset, ‘The Point Shopping Mall’, is measured at fair value, which is based on valuations commissioned by the Company’s Board of Directors and carried out by independent professionally qualified valuers. The valuations are determined on the basis of a model using discounted cash flow projections and these projections are based on a number of unobservable inputs. The Company’s property was last revalued by an independent professionally qualified valuer on 31 December 2021.

The key inputs in the valuation model include free cash flows after tax that are based on contracted and projected income streams less operating expenses covering the remaining term of the sub-emphyteusis, the growth rate applied to determine projected income streams and the discount rate.

At the end of every reporting period, the Company’s management assesses whether any significant changes have been experienced since the last external valuation and updates the valuation model. Such assessments are performed for the purpose of ascertaining whether the carrying amount of the property is significantly different from estimated fair value, by reviewing the continued applicability of cash flow projections and assumptions utilised in the most recent independent valuation model.

We focused on this area because of the significance of the carrying value of ‘The Point Shopping Mall’ in the Statement of the Financial Position and the judgemental nature of the assumptions used in the underlying valuation model.

Further disclosure is included in Note 3 (Critical accounting estimates and judgements) and Note 4 (Property, plant and equipment).

We reviewed the most recent valuation report prepared by independent, professionally qualified valuers, supporting the fair value of ‘The Point Shopping Mall’ and management’s assessment as at 31 December 2022 as to whether the cash flow projections and principal assumptions utilised in the most recent independent valuation report are still applicable as at the end of the current reporting period. We confirmed that the valuation approach utilised is suitable in accordance with the requirements of professional valuation standards. We assessed the competence of the external valuers, including consideration of their qualifications and expertise.

Our audit procedures included a review of the projected financial information prepared by management, which have been used within the valuation model. We agreed the projected financial information to the relevant inputs in the model, and to the extent possible, agreed these inputs to the terms of the current tenant rental schedules and other documentation. We tested the mathematical accuracy of the calculations within the model.

We engaged our own in-house valuation experts to critique and challenge the principal assumptions used in the valuation model, including the growth rate and discount rate, given that a marginal change in one of the inputs to the valuation model has a significant impact on the valuation.

We discussed the outcome of management’s assessment, indicating that there were no significant differences between the property’s carrying amount and its estimated fair value as at 31 December 2022, with the Audit Committee.

We concluded, based on our audit work, that the Company’s property carrying amount and accordingly the outcome of management’s assessment was within a reasonable range of values.

In addition, we evaluated the adequacy of the disclosures made in Notes 3 and 4 of the financial statements, including those regarding the principal assumptions.

Other information

The directors are responsible for the other information. The other information comprises the Directors’ report, the Corporate Governance – Statement of Compliance and the RemNom Committee Report (but does not include the financial statements and our auditor’s report thereon), which we obtained prior to the date of this auditor’s report, and the Chairman’s Statement and Chief Executive’s Review, which are expected to be made available to us after that date.

Our opinion on the financial statements does not cover the other information and we do not and will 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 on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

When we read the Chairman’s Statement and Chief Executive’s Review, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance in accordance with International Standards on Auditing.

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

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

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

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

Auditor’s responsibilities for the audit of the financial statements

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

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

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

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

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

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

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

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

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

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

Report on other legal and regulatory requirements

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

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

Responsibilities of the directors

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

Our responsibilities

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

Our procedures included:

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

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

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

Opinion

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

Other reporting requirements

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

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

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

Our responsibilities

Our reporting

Directors’ report

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

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

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

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

In our opinion:

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

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

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

Corporate Governance – Statement of Compliance

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

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

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

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

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

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

RemNom Committee 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.

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

Appointment

We were first appointed as auditors of the Company for the financial year ended 31 December 2005. Our appointment has been renewed annually by shareholder resolution representing a total period of uninterrupted engagement appointment of 18 years. The company became listed on a regulated market on 2 May 2013.

PricewaterhouseCoopers

78, Mill Street

Zone 5, Central Business District

Qormi

Malta

Fabio Axisa

Partner

17 April 2023