Company Registration Number: C 81622
VIRTU FINANCE P.L.C.
AnnualFinancial Reportand Financial Statements
31 December 2021
VIRTU FINANCE P.L.C.
Annual FinancialReport and Financial Statements - 31 December 2021
Pages
Directors’ report 1 - 6
Corporate Governance - Statement of Compliance 7 - 10
Statement of financial position 11
Statement of comprehensive income 12
Statement of changes in equity 13
Statement of cash flows 14
Notes to the financial statements 15 - 30
Independent auditor’s report
VIRTU FINANCE P.L.C.
Annual FinancialReport and Financial Statements - 31 December 2021
1
Directors’ report
Thedirectorspresenttheirreportandtheauditedfinancialstatementsfortheyearended31December
2021.
Principal activity
VirtuFinancep.l.c.(thecompany”) isapublicliabilitycompany andisa whollyowned subsidiaryof Virtu
HoldingsLimited.Itsprincipalactivityistoraisefinancialresourcesfromcapitalmarketstofinance
operations and capital projects of the Virtu Group of companies.
Review of the business
Duringtheyearunderreview,thecompanyregisteredaprofitbeforetaxamountingto10,254(2020:
8,843). After allowing for taxation, the profitfor the year amounted to 6,665 (2020: 5,748).
Financial performance
Revenue amountingto 1,098,200(2020: 1,098,200) isgeneratedfroma facilityfeeand interest charged
on loans advanced to Virtu Maritime Limited. Financial costs comprise interest payable on the outstanding
bondissueandamortisationoftheissuecoststhereofamountingto993,376(2020:991,204).
Administrativeexpensesmainlycomprisedirectors’emolumentsamountingto45,000(2020:45,000)
and legal and professional fees amounting to 49,570 (2020: 53,153).
The directorsdo notexpectany significantchangesinthecompany’sactivitiesintheshort-termperiodand
expect that thecompany will continue to register a surplus based on projections for the foreseeable future.
Financial position
Thecompany’sstatementoffinancialpositionisinthemainmadeupofthe3.75%unsecuredbondsin
issueof25millionandacorrespondingloanamountingto24.4millionadvancedtoVirtuMaritimeLimited,
theguarantorofthisbond. Theloanreceivableandthebondissuedduring2017areclassifiedinVirtu
Financep.l.c.’sstatementoffinancialpositionundernon-currentassetsandnon-currentliabilities
respectively as at31December 2021 and 2020.VirtuFinancep.l.c.’s equity amountedto 527,095(2020:
520,430).
Guarantor’s performance for2021 and outlookfor 2022
VirtuMaritimeLimitedistheholdingcompanyforthesubsidiarycompaniesformingpartoftheVirtuMaritime
Group (the “Group”) anddoes not itself carry on any trading activities. As such, the principal activities and
marketsinwhichtheVirtuMaritimeLimitedGroupoperatescorrespondtotheprincipalactivitiesand
markets of thesubsidiary group companies.
Duringtheyearunderreview,theseactivitieshaveconsistedofafastferryservicebetweenMaltaandSicily
aswell astheintroductionofafastferryservicebetweenVallettaandMgarr,Gozo.TheHSCMariaDolores
charter operationbetweenMoroccoand Spainremainedsuspendedduringtheyear becauseof COVID-19
relatedregulations,andtheHSCJeandelaValette,whichcameofftimecharteroperatingbetweenthe
islands of Trinidadand Tobago inearly2021was redeployedasasecondvesselonthe Malta-Pozzallo
route for part of the year.
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Annual FinancialReport and Financial Statements - 31 December 2021
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Directors’ report- continued
Guarantor’s performance for2021 and outlookfor 2022 - continued
Theconsolidatedfinancialstatementsforfinancialyearended31December2021(FY2021)oftheVirtu
MaritimeLimited Group,theguarantorof thebondsissuedbyVirtuFinancep.l.c.,showanetassetposition
of 80.3 million (2020: 86.6 million) for the group and69.8 million (2020: 69.8 million) for the company
asat31December2021,mainlyarisingfromtheinvestmentinsubsidiariesformingpartoftheVirtu
MaritimeGroup amountingto49.6million(2020:49.6million).Theconsolidated lossbeforetaxation of
thegroupfortheyearended31December2021(FY 2021)amountedto6.4million(2020:profitbefore
taxof4.5million),whilstcashgeneratedfromoperationsfortheyearamountedto6.3million(2020:
12.0million).TheseresultsaremuchinlinewiththoseforecastedintheFinancialAnalysisSummary
(FAS) that was published on17 June 2021.
AsanticipatedintheFY2020 AnnualReport andintheFAS,theVirtuMaritimeGroupoperations forthe
year continued to be adversely impacted by the developingepisodes ofthe COVID-19pandemic, resulting
in lower profits andcash generation whencomparedwith FY2019 andFY 2020.Whereasfreight traffic on
theMalta/SicilyrouteheldupwellshowingsomeimprovementoverFY2020volumes,touristand
passengercar trafficdid notreturn topre-pandemiclevels asa resultofcontinuingCOVID-19relatedtravel
and other restrictions.
Furthermore, the resultsfor theyear wereadversely impacted bytheHSC MariaDolores (which cameoff
charteron17March 2020)remainingin portfor thefull yearas aresultofallferrytrafficbetweenSpainand
Morocco remainingsuspended forCOVID-19relatedreasons.Advantage wastakenofthisperiodforthe
vessel to undertake an extensive refit in preparation for its return to operations immediately circumstances
andregulations sopermitted. InApril2022 anewthree-yearcharteragreement wasenteredintowiththe
previouscharterersforoperationbetweenMoroccoandSpainandtheMariaDoloresdepartedMaltafor
Tangier Ville on 24April 2022.
Witheffectfrom1June2021,theGovernmentofMaltaopeneduptheVallettaMgarrferryserviceto
competition,andtheVirtuMaritimeGroupdeployedtwovessels(theSanFrangiskandtheSanPawl)
charteredfromrelatedcompanies(thatformpartoftheVirtuHoldingsGroup)onthisservice. Tourist
arrivalsinMaltaremainedsubdued throughout2021duetoCOVID andpassengernumbersontheroute
werewellbelownormalised(pre-COVID)levels.Thisandovercapacityontherouterenderedtheservice
uneconomicat currentlevels.However, the VirtuMaritime Boardbelieves that thegroupshould participate
intheliberalisedserviceasitisoftheviewthatperformancewillimprovesignificantlyoncethetourist
economyrecovers.In the meantime,servicefrequencyon theroute isbeing rationalised,and anewvessel
(theGozoExpress)thatismoresuitedtotherouteinquestionhasbeenchartered(alsofromarelated
company) andwill be operatedin 2022.
Fuel pricesduring 2021 were at manageable levels,with periodic boutsof volatility.However, the conflict
inUkrainehasresultedinsignificantvolatilityintheoilmarketinearly2022andanappropriatefuel
surchargemechanismremainsin place.In anticipationofworld fuelpricesremainingvolatile,thegrouphad
hedgedalimitedproportionofexpectedconsumptionfor2021and2022.Thedirectorsareconsciousof
the impactof thecurrentconflictin EasternEurope on fuelprices andthe travel industry.However,it is still
tooearlytoevaluatethecommercialandfinancialimpactthatthiscrisismighthaveonthegroup,with
particular reference to the potential impact on the supplychain of oil and fuel products.
VIRTU FINANCE P.L.C.
Annual FinancialReport and Financial Statements - 31 December 2021
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Directors’ report- continued
Outlook for 2022
DespitethedisruptioncausedbytheCOVID-19pandemic,thedirectorsdonotexpectanysignificant
changes inVirtuFinance p.l.c.’s activities intheshort-term periodand areconfident thatthecompany will
beabletohonouritsobligationsasandwhentheyfalldue.BasedonprojectionsforVirtuFinancep.l.c.
that have been prepared, the company is expected to register a surplus for the foreseeable future.
Thisexpectationtakesintoaccountadetailedassessmentreviewedbythedirectorsrelatingtothe
operationsoftheguarantorgroup.Thesebaselinescenarioshavebeenpreparedadoptingprudentand
cautiousassumptionsthattakeintoaccounttheongoingdisruptionbeingcausedtothetouristand
travel/transportationsectorsbytheCOVID-19pandemicandtheperiodicchangestoregulationsarising
therefrom.The prudentbasecasescenario anticipatesanincrease intouristactivityon theMalta/Sicilyand
Malta/Gozoroutes,thedeploymentofHSCJeandelaValetteasasecondvesselonthePozzalloroute
and thereturnof theHSC Maria Dolores onthe Spain -Moroccoroute effective May 2022.The projections
alsotakeintoaccountprecautionary fundingarrangements thathaveorarebeingputinplaceinthelight
of ongoing uncertainties and disruptions to operations.
Notwithstandingtheprudentbasecaseassumptionsadopted,thescenarioprojectionsindicatethatthe
groupwillbeabletohonouritsobligationsasandwhentheyfalldue. Accordingly,thedirectorsconcur
withthegoingconcernassumptionforthepreparationofthesefinancialstatementsanddonotenvisage
anymaterialuncertaintyinthisregard.ReferenceshouldalsobemadetoNote1.1tothefinancial
statements.
Financial riskmanagement
Thecompany’sactivitiesexposeittoavarietyoffinancialrisks,includingcreditriskandliquidityrisk.
ReferenceshouldbemadetoNote2tothesefinancialstatementsforadetailedreviewofhowthecompany
addresses such risks.
Results and dividends
Thestatementofcomprehensiveincomeissetoutonpage12.Thedirectorsdonotrecommendthe
paymentofadividend.Thedirectorshaveproposedthatthebalanceofretainedearningsamountingto
27,095 (2020: 20,430) be carried forward to the next financialyear.
Directors
The directors ofthe company who held office during the year were:
Roderick Chalmers - Non-Executive, Independent Chairman
Charles Borg - Non-Executive, Independent Chairman (resignedon 29 November 2021)
Kevin Valenzia - Non-Executive, Independent Director (appointed on 28 December 2021)
Matthew Portelli - Executive Director
Stephanie Attard Montalto - Executive Director
Stefan Bonello Ghio- Non-Executive Director
The Board meets on aregular basis to discuss financial performance,financial position and other matters.
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Annual FinancialReport and Financial Statements - 31 December 2021
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Directors’ report- continued
Statement of directors’ responsibilities for the financialstatements
The directors arerequired by the MalteseCompanies Act(Cap. 386)to prepare financial statementswhich
give a true and fair viewof the stateof affairs of the company as at the end of eachreporting periodand of
the profit or loss for that period.
In preparing the financial statements, the directors are responsible for:
ensuring that the financialstatements have been drawnup in accordance withInternational Financial
Reporting Standards as adopted by the EU;
selecting and applying appropriate accounting policies;
making accountingestimates thatare reasonable in the circumstances;
ensuringthatthefinancialstatementsarepreparedonthegoingconcernbasisunlessitis
inappropriate to presume that the company willcontinue in business as a going concern.
The directors are alsoresponsible for designing, implementing and maintaining internal control relevant to
thepreparationandthe fairpresentationofthefinancialstatementsthat arefreefrom material
misstatement, whether due to fraud or error, and thatcomply with the Maltese Companies Act (Cap. 386).
Theyarealsoresponsibleforsafeguardingtheassetsofthecompanyandhencefortakingreasonable
steps for the prevention and detection of fraud and other irregularities.
ThefinancialstatementsofVirtuFinancep.l.c.fortheyearended31December2021maybemade
available on the company’s website. The directors are responsible for the maintenance and integrity of the
Annual Financial Report on the website in view of their responsibility for the controls over,and the security
of, thewebsite.Accesstoinformation publishedonthe company’swebsite isavailableinothercountries
andjurisdictions,wherelegislationgoverningthepreparationanddisseminationoffinancialstatementsmay
differ from requirements or practicein Malta.
Auditors
PricewaterhouseCoopers have indicated their willingness to continue in office and a resolution for their re-
appointment will be proposed atthe Annual General Meeting.
Disclosure in terms of the Capital Markets Rules
Going concern statement pursuant toCapital MarketsRule 5.62
After making enquiries and having taken into consideration the future plans of the company (note 1.1), the
directorshavereasonableexpectationthat thecompanyhasadequateresourcestocontinueinoperational
existencefor theforeseeable future.Forthisreason, itcontinuestoadoptthegoingconcernbasisinthe
preparation of the financial statements.
Principal risks and uncertainties faced bythe company
Thecompany’smainobjective,as afinancecompanyforthe VirtuMaritimeGroupof companies,istoraise
funds, mainlyfromthe capital markets, to financetheoperations andcapital projectsof theVirtuMaritime
Group.Inthiscontext,the company’sability torecover loans issuedtoitsfellowsubsidiaryis dependenton
the performance of the companies within the Virtu Maritime Group to which amounts have been advanced
by the company.
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Annual FinancialReport and Financial Statements - 31 December 2021
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Directors’ report- continued
Disclosure in terms of the Capital Markets Rules - continued
Principal risks and uncertainties faced bythe company - continued
As noted above, during 2021 the group’s business activitieshave consisted ofa fast ferry service between
MaltaandSicily as well astheintroductionofafastferryservicebetweenVallettaandMgarr,Gozo.The
HSCMariaDolorescharteroperationbetweenMoroccoandSpainremainsuspendedduringtheyear
becauseofCOVID-19relatedregulations,andtheHSCJeandelaValette,whichcameofftimecharter
operatingbetweenthe islandsof Trinidadand Tobagoin early 2021wasredeployedas asecondvesselon
the Malta -Pozzallo route forpart of the year. Further detailsare providedin the reviewof theguarantor’s
performance for 2021 and theoutlook for 2022 setout above.
Withinthiscontext,thedirectorshaveevaluatedtherisksfacedbythevariouscompaniestowhichfunds
havebeenadvancedandcontinuetomonitorcloselytheimpactofevents astheytakeplaceinthelocal
andglobal economy,andhowthesewouldaffecttheabilityofthevariouscompanieswithinthegroupto
honourtheirfinancialcommitments.Onthebasisofthisanalysis,thedirectorsareoftheviewthatall
amounts receivable by the company are fully recoverable.
IncaseofdefaultbygroupcompaniestorepayloanstoVirtuMaritimeLimited,VirtuMaritimeLimited
guarantees topay all amountsof principaland interestdue bythe issuer tothe bondholderswhichremains
unpaid by the issuer.
A detailed review ofthe risk management policies employed by the company is included in Note 2of these
financial statements.
Pursuant to Capital MarketsRule 5.64
Appointment andReplacement ofDirectors
Directors are appointed during the company’sAnnual General Meetingfor periodsof one year,atthe end
of which term they may standagain for re-election.
Board Member Powers
The powersof theBoard membersare contained inArticles54-69 ofthe company’sArticles ofAssociation.
NodisclosuresarebeingmadepursuanttoCapitalMarketsRules5.64.3,5.64.4,5.64.5,5.64.6,5.64.7and
5.64.10 as these are not applicable to the company.
Contracts with Board Members and Employees
ThecompanyhasnocontractwithanyofitsBoardmembersthatincludeaseverancepaymentclause.
Thecompanyhadnoemployeesduringthe yearended31December2021and2020andnon-executive
directors were paid 45,000 (2020: 45,000) for services rendered during the year. Each director received
anannualremunerationof15,000(2020:15,000).Thedirectorsreceivenofurthermonetaryandnon-
monetary benefits from the company.
Pursuant to Capital MarketsRule 5.70.1
Inthenormalcourseofthecompany’sbusiness,during2017thecompanyadvancedbywayofloan,an
amountof24,400,000toVirtuMaritimeLimited,theparentcompanyoftheVirtuMaritimeGroup,the
guarantorofthebondinissuebythecompany.Detailsofsuchcontractissetoutinnote4tothesefinancial
statements. No further advances were made to group entities during2021 and 2020.
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Annual FinancialReport and Financial Statements - 31 December 2021
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Directors’ report- continued
Disclosure in terms of the Capital Markets Rules - continued
Pursuant to Capital MarketsRule 5.68
StatementbytheDirectorsontheFinancialStatementsandOtherInformationincludedinthe
Annual FinancialReport
Thedirectorsdeclarethattothebestoftheirknowledge,thefinancialstatementsincludedintheAnnual
FinancialReportarepreparedinaccordancewiththerequirementsofInternationalFinancialReporting
Standardsas adoptedby theEU andgivea true andfairviewof theassets, liabilities,financialpositionand
profit of thecompany and thatthis report includes a fair review of the development and performanceof the
businessandpositionofthecompany,togetherwithadescriptionoftheprincipalrisksanduncertainties
that it faces.
SignedonbehalfoftheBoardofDirectorson28April2022byRoderickChalmers(Non-Executive,
IndependentChairman)andStephanieAttardMontalto(ExecutiveDirector)as pertheDirectors'
Declaration on ESEF AnnualFinancial Report submitted in conjunction with the Annual Financial Report.
Registered office:
Virtu
Ta’ Xbiex Terrace,
Ta’ Xbiex
XBX 1034
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Corporate Governance - Statement of Compliance
Introduction
TheCapitalMarketsRulesissuedbytheMaltaFinancialServicesAuthority,requirelistedcompaniesto
observeTheCodeofPrinciplesofGood CorporateGovernance(theCode”).Although theadoption ofthe
Codeisnotobligatory,ListedCompaniesarerequiredtoinclude,intheirAnnualFinancialReport,a
Directors’StatementofCompliancewhichdealswiththeextenttowhichthecompanyhasadoptedthe
CodeofPrinciples ofGoodCorporateGovernanceand theeffective measuresthatthecompanyhastaken
to ensure compliance with theCode, accompaniedby a reportof the auditors thereon.
Compliance
Since itsincorporation,the company’s principal activitywasto raise fundsmainlyfromthecapitalmarketto
finance the operations and capital projects of the Virtu Maritime Group.
IndecidingonthemostappropriatemannerinwhichtoimplementthePrinciples,theBoardofVirtuFinance
p.l.c. (the“Board”) hastaken cognisance ofits size, which inevitablyimpacts on the structures requiredto
implementthePrincipleswithoutdilutingtheeffectivenessthereof.Thecompanydoesnothaveany
employees. Accordingly,someof the provisionsof theCodeare notapplicablewhilst others are applicable
to a limited extent.
Roles and responsibilities
TheBoardofDirectorsisresponsiblefordevisingastrategy,settingpoliciesandthemanagement ofthe
company. Itisalsoresponsibleforreviewinginternalcontrolprocedures,financialperformanceand
business risks facing the company.The Board is also responsible for decisions relating to the redemption
oftheBondandformonitoringthatitsoperationsareinconformitywiththeProspectusandallrelevant
rules and regulations.
Throughoutthe yearunderreview,the Boardregularlyreviewedmanagementperformance.The company
hasinplacesystemswherebythedirectorsobtaintimelyinformationfromtheVirtuMaritimeGroupof
companies Chairman, not only at meetings of the Board butat regular intervals or when the need arises.
Complement of the Board of Directors
The Board is composed of twoexecutive and three non-executive directors, as listed below.
Executive Directors
Matthew Portelli (appointed on incorporation)
Stephanie Attard Montalto (appointedon incorporation)
Non-ExecutiveDirectors
Charles Borg (resigned on 29 November 2021)
Roderick Chalmers (appointed on incorporation)
Stefan Bonello Ghio(appointed on incorporation)
Kevin Valenzia (appointed on 28 December 2021)
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Corporate Governance - Statement of Compliance- continued
Complement of the Board of Directors- continued
KevinValenzia,StefanBonelloGhioandRoderickChalmersholdnon-executivepositionswithVirtu
MaritimeLimited,beingasubsidiaryofVirtuHoldingsLimitedandtheguarantorofVirtuFinancep.l.c..
MatthewPortelliandStephanieAttardMontaltoareexecutivedirectorsonVirtuHoldingsLimitedandon
othersubsidiarycompanies ofVirtuHoldings Limited.Charles Borgheldanon-executivepositionwithVirtu
MaritimeLimitedupuntilhisresignation.Forthepurposeofthe provisionsoftheCode,theBoardconsiders
Charles Borg, Kevin Valenziaand Roderick Chalmers as independent.
Directors are appointed during the company’sAnnual General Meetingfor periodsof one year,atthe end
of which term theymay stand again forre-election.The Articles of Association of the company clearly set
out the procedures to be followed for the appointment of directors.
Internal Control
The Board isresponsible for the company’s system of internal controls and for reviewing its effectiveness.
Such a system isdesigned to achieve business objectives and tomanage rather than to eliminate therisk
offailuretoachievebusinessobjectives andcanonlyprovidereasonableassuranceagainstmaterial error,
losses or fraud.
Systemsand proceduresarein placeforthecompanytocontrol,report,monitor andassess risksand their
financialimplications,and totake timelycorrectiveactionswhere necessary.Regular financialbudgets and
strategicplansareprepared,andperformanceagainsttheseplansisactivelymonitoredandreportedto
the directors on aregular basis.
TheapprovalofcredittocustomersismadebytheGroupFinancialController,instrictadherencetoa
Board-approvedlimit. Proposalsfallingoutsidethelimitarereferred,togetherwiththesupporting
documentation andtheFinancialController’srecommendations,totheBoard.TheBoardalso approves,
afterreviewandrecommendationby theAuditCommittee,the transferoffundsand otheramounts payable
to companies within the samegroup and ensures that these are subject to terms and conditions whichare
on an arm’s length basis.
Directors’ Attendance at Board Meetings
TheBoardbelievesthatithassystemsinplacetofullycomplywiththeprinciplesoftheCode.Directors
meetregularly,mainlytoreviewthefinancialperformanceofthecompanyandtoreviewinternalcontrol
processes.Board members are notified of forthcoming meetings by the company Secretary with the issue
ofanagendaandsupportingBoardpapers,whicharecirculatedwellinadvanceofthemeeting.Allthe
directorshaveaccesstoindependentprofessionaladviceatthecompany’sexpenseshouldtheysorequire.
The Board met formally four timesduring the year under review.The number of board meetings attended
by directors for theyear ended 31 December 2021 is as follows:
Members Attended
Matthew Portelli 4
Stephanie Attard Montalto 4
Roderick Chalmers 4
Charles Borg (resigned on 29 November 2021) 4
Stefan Bonello Ghio 4
Kevin Valenzia (appointed on 28 December 2021) -
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Corporate Governance - Statement of Compliance- continued
Committees
Thedirectorsbelievethat,duetothecompany’ssizeandoperation,theremuneration,evaluationand
nominationscommitteesthatare suggestedin theCodearenotrequired,and thatthe functionofthesecan
efficiently be undertaken by the Board itself.However, the Board on an annual basis undertakes a review
of the remuneration paid to the directors and carries out an evaluation of their performance and that of the
AuditCommittee.Theshareholdersapprovetheremunerationpaidtothedirectorsattheannualgeneral
meeting.
Audit Committee
The Board establishedan AuditCommittee(the“Committee”)andhas formallysetoutTermsofReference
asoutlinedinthePrincipleslaidoutintheCapitalMarketsRules. ThepurposeoftheCommitteeisto
protecttheinterestofthecompany’sshareholders,bondholders,andassistthedirectorsinconducting
their role effectively.TheAudit Committee also monitors the financial reporting process, the effectiveness
ofinternalcontrolandtheauditoftheannualfinancialstatements. Additionally,itisresponsiblefor
monitoringthe performance oftheentitiesborrowingfunds fromthe company,toensure thatbudgets are
achieved and ifnot, that corrective action is taken as necessary.It also scrutinises and supervises related
partytransactions formaterialityandensuresthatthesearecarried outatarm’slengthbasis.Byaletter
dated30
th
October2017,theListingAuthorityconsideredtheTermsofReferenceashavingsufficient
safeguards to ensure the independence of the Audit Committee.
The Members of the Audit Committee are:
Roderick Chalmers - Chairman ofthe Audit Committee,Non-Executive, IndependentDirector
Charles Borg - Non-Executive, Independent Director (resigned on 29 November 2021)
Kevin Valenzia - Non-Executive, Independent Director (appointed on 28 December 2021)
Stefan Bonello Ghio- Non-Executive Director
MrRoderickChalmers,MrKevinValenziaandMrStefanBonelloGhioareCertifiedPublicAccountants,
whilst Mr Charles Borg holds abanking degree and a Masters degree in financial legislation.
The Committee metfive timesduring the year ended31 December 2021.
Remuneration Statement
In terms of the company’s Memorandum and Articles of Association, it is the shareholders of the company
in the General Meeting who determine the maximum annual aggregate remuneration ofthe directors.The
aggregate amountapproved and paid to directors for this purpose during the year was45,000.
None of the directors is employed or has a service contractwith the company.
Nopartoftheremunerationpaidtothedirectorsisperformancebased. Noneofthedirectors,intheir
capacity as a Director of the company, is entitledto profit sharing, share options or pensionbenefits.
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Corporate Governance - Statement of Compliance- continued
Relations with bondholdersand the market
The company publishes interim and annual financial statements and, when required, company
announcements.The Board feels theseprovide the marketwith adequate information about its activities.
Conflicts of Interest
OnjoiningtheBoardandregularlythereafter,directorsandofficersofthecompanyareinformedand
remindedoftheirobligationsondealinginsecuritiesofthecompanywithintheparametersoflawand
CapitalMarketsRules. ThecompanyhasalsosetreportingproceduresinlinewiththeCapitalMarkets
Rules, Code of Principles, and internal code of dealing.
Approved by the Board of Directors on 28 April 2022.
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Annual FinancialReport and Financial Statements - 31 December 2021
11
Statement of financial position
As at 31 December
2021
2020
Notes
ASSETS
-
current assets
Loans and receivables
4
24,400,000
24,400,000
Total non
-
current assets
24,400,000
24,400,000
Current assets
Trade
and other receivables
5
891,495
810,289
Cash and cash equivalents
6
7,905
13,356
Total current assets
899,400
823,645
Total assets
25,299,400
25,223,645
EQUITY AND LIABILITIES
Capital and reserves
Share capital
7
500,000
500,000
Retained earnings
27,095
20,430
Total equity
527,095
520,430
-
current liabilities
Borrowings
8
24,620,204
24,564,328
Total non
-
current liabilities
24,620,204
24,564,328
Current liabilities
Trade and other payables
9
138,144
129,152
Current tax liabilities
13,957
9,735
Total current liabilities
152,101
138,887
Total liabilities
24,772,305
24,703,215
Total equity and liabilities
25,299,400
25,223,645
The notes on pages 15 to 30are an integral partof these financial statements.
The financial statements were approved and authorised for issue by the Board of Directors on 28 April
2022. The financial statements were signed on behalf of theBoard of Directors by Roderick Chalmers
(Non-Executive,IndependentChairman)andStephanieAttardMontalto(ExecutiveDirector)asperthe
Directors'DeclarationonESEFAnnualFinancialReportsubmittedinconjunctionwith theAnnual
Financial Report.
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Annual FinancialReport and Financial Statements - 31 December 2021
12
Statement of comprehensive income
Year ended 31 December
2021
2020
Notes
Interest and other related income
10
1,098,200
1,098,200
Interest payableand similar charges
11
(993,376)
(991,204)
Gross profit
104,824
106,996
Administrative expenses
12
(94,570)
(98,153)
Profit
before tax
10,254
8,843
Tax expense
14
(3,589)
(3,095)
Profit for the year
6,665
5,748
Earnings per share
15
0.0
133
0.0115
The notes on pages 15 to 30are an integral partof these financial statements.
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Annual FinancialReport and Financial Statements - 31 December 2021
13
Statement of changes in equity
Share
Retained
capital
earnings
Total
Balance at 1 January 2020
500,000
14,682
514,682
Comprehensive income
Profit for
the year
-
total comprehensive income
-
5,748
5,748
Balance at 31 December 2020
500,000
20,430
520,430
Balance at 1 January 2021
500,000
20,430
520,430
Comprehensive income
Profit for
the year
-
total comprehensive income
-
6,665
6,665
Balance at 31 December 202
1
500,000
27,095
527,095
The notes on pages 15 to 30are an integral partof these financial statements.
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Annual FinancialReport and Financial Statements - 31 December 2021
14
Statement of cash flows
Year ended 31 December
Notes
2021
2020
Cash flows from operatingactivities
Cash (used in)/generated fromoperations 16
(6,084)
2,867
refund
633
2,583
Net cash
(used in)
/generated from
operating activities
(5,451)
5,450
Net movement in cash and cash equivalents
(5,451)
5,450
Cash and cash equivalents atbeginning of year
13,356
7,906
Cash and cash equivalentsat end of year
6
7,905
13,356
The notes on pages 15 to 30are an integral partof these financial statements.
VIRTU FINANCE P.L.C.
Annual FinancialReport and Financial Statements - 31 December 2021
15
Notes to the financial statements
1. Summary of significant accounting policies
The principal accounting policies applied in the preparation ofthese financial statements are set
outbelow.Thesepolicieshavebeenconsistentlyappliedtotheyearpresented,unlessotherwise
stated.
1.1Basis of preparation
Thesefinancialstatementshavebeenpreparedinaccordancewiththerequirementsof
InternationalFinancialReportingStandards(IFRSs)asadoptedbytheEUandwiththe
requirementsoftheMalteseCompaniesAct(Cap.386). Thefinancialstatementshavebeen
prepared under the historicalcost convention.
The preparation of financial statements in conformity with IFRSs as adopted by the EU requires
theuseofcertain accountingestimates.Italsorequiresdirectorstoexercisetheirjudgmentin
theprocessofapplyingthecompany’saccountingpolicies(seeNote3Criticalaccounting
estimates and judgments).
Standards, interpretations and amendments to publishedstandards effective in 2021
In2021,thecompanyadoptednewstandards,amendmentsandinterpretationstoexisting
standardsthataremandatoryfor thecompany’saccountingperiodbeginningon1January2021.
Theadoptionoftheserevisionsto therequirementsofIFRSsas adoptedbytheEU didnotresult
insubstantial changestothecompany’saccountingpoliciesimpactingthecompany’sfinancial
performance andposition.
Standards, interpretations and amendments to publishedstandards that are notyet effective
Certainnewstandards,amendmentsandinterpretationstoexistingstandardshavebeen
published by the dateof authorisation for issue of these financial statements that are mandatory
forthecompany’saccountingperiodsbeginningafter1January2020. Thecompanyhasnot
earlyadoptedtheserevisionstotherequirementsofIFRSsasadoptedbytheEUandthe
company’sdirectorsareoftheopinionthat,withtheexceptionofthebelowpronouncements,
there are norequirements that will have a possiblesignificant impact on thecompany’s financial
statements in the period of initialapplication.
Going concern
Virtu Financep.l.c.’s (theCompany) principalactivity isto act asa financecompanyfor theVirtu
MaritimeGroupofcompanies(theGroup)andtoassistineffectivelyandefficientlymanaging
theGroup’slongtermscapitalrequirements.Inthiscontext,thecompany’sabilitytorecover
loansissuedtoits fellowsubsidiaryisdependenton theperformanceof theoperatingcompanies
within the group to which amounts have been advanced.
The VirtuMaritime Group operations for financialyear 2021(FY2021) continuedto beadversely
impactedbythedevelopingepisodesoftheCOVID-19pandemic, resultinginlowerprofitsand
cashgenerationwhencomparedwithFY2019andFY2020.Whereasfreighttrafficonthe
Malta/SicilyrouteheldupwellshowingsomeimprovementoverFY2020volumes,touristand
passengercartrafficdidnotreturntopre-pandemiclevelsasaresultofcontinuingCOVID-19
related travel andother restrictions.
VIRTU FINANCE P.L.C.
Annual FinancialReport and Financial Statements - 31 December 2021
16
1. Summary of significant accounting policies - continued
1.1Basis of preparation - continued
Going concern - continued
Furthermore,the resultsfor theyear wereadversely impacted by the HSCMaria Dolores (which
cameoffcharteron 17March 2020)remaining inportfor thefull yearasa resultofallferrytraffic
betweenSpainandMoroccoremainingsuspendedforCOVID-19relatedreasons.TheHSC
Jean delaVallette, previously operatingon charterinTrinidad andTobago, came offcharterin
February 2021 andwas redeployed asa second vesselon the Malta - Pozzallo route.
Witheffectfrom1June2021,theGovernmentofMaltaopeneduptheVallettaMgarrferry
servicetocompetition,andtheVirtuMaritimeGroupdeployedtwocharteredvesselsonthis
service. However,touristarrivalsinMaltaremainedsubduedthroughout2021.Thisand
overcapacity on the route rendered the service uneconomic atcurrent levels.
Sincetheoutbreakofthepandemicthe VirtuMaritimeGrouphasgiven,andwillcontinuetogive,
prioritytothehealthandsafetyofallofitspassengersandcrewandhasabidedbyandwill
continuetoabidebyalldirectivesissuedbythecompetentauthoritiesintheinterestofthe
generalpublic.Throughouttheyearthegroupremaineddedicatedtoprovidingongoing
transportationservices for the delivery of vital food and other essentials to Malta.
Since theoutbreak of thepandemic inearly 2020,all available measures weretakento contain
andmanagethefinancialimpactontheVirtuMaritimeGroup.Companieswithinthegroup
appliedforsuchfiscalassistanceaswasavailableundertheprogrammesannouncedby
government, andprecautionary cashconservation measures were implemented.Precautionary
additionalfundingarrangementswerearrangedand/orarebeingfinalisedinthelightofthe
ongoinguncertaintiesanddisruptionstooperations.Otheroperationalefficiencyandcost
containment initiatives were also implemented.
After making due enquiry and using the best judgement available at the time of approving these
financial statements, animpact assessmenthas been carried outby the Virtu Maritimeand Virtu
Financeboardsofdirectors,includingareviewofabaselinescenarioentailingtheadoptionof
prudent assumptions for assessing the operations, profitability and liquidity.
Therespectiveassumptionsfactor,interalia,anincreaseintouristactivityontheMalta/Sicily
andMalta/Gozoroutes,thedeploymentofHSCJeandelaValetteasasecondvesselonthe
Pozzallorouteandthe return oftheHSCMariaDoloresontheSpain-Morocco routeeffective
May 2022.Theprojectionsalsotake intoaccount precautionaryfunding arrangementsthathave
or are being put in place.
Based onthis reviewand themeasures takenas indicatedabove,the boardsofdirectors expect
thatthegroupwillbeabletosustainitsoperationsoverthenexttwelvemonths,willhave
adequateresourcestocontinueinoperationfortheforeseeablefuture andwillbeinaposition
tomeetitsobligationsasandwhentheyfalldue.Accordingly,forthesereasonstheVirtuMaritime
andVirtuFinanceboardsofdirectorshaveconcludedthatthereisnomaterialuncertaintyin
respectofgoingconcernandbasedontheforegoingthedirectorsthereforebelievethatit
remains appropriate to preparethese financial statements on agoing concern basis.
VIRTU FINANCE P.L.C.
Annual FinancialReport and Financial Statements - 31 December 2021
17
1. Summary of significant accounting policies - continued
1.2Segment reporting
Operating segmentsarereportedinamanner consistentwiththeinternalreportingprovidedto
thechiefoperatingdecision-maker.Thechiefoperatingdecision-maker, whoisresponsiblefor
allocating resources and assessing performance oftheoperating segmentshasbeen identified
astheboardofdirectorsthatmakesstrategicdecisions.Theboardofdirectorsconsidersthe
companytobemadeupofonesegment,whichisraisingfinancialresourcesfromcapitalmarkets
tofinancethegroup’sworkingcapitalandothercapitalprojects.Thecompany’smainrevenue
andexpensesaregeneratedinMaltaandSicilyandrevenueismainlyearnedfromother
companies forming part of theVirtu Maritime Group of companies.
1.3Foreign currency translation
Functional and presentation currency
Itemsincludedinthesefinancialstatementsaremeasuredusingthecurrencyoftheprimary
economicenvironmentinwhichtheentityoperates(‘thefunctionalcurrency’).Theeuroisthe
company’s functional and presentation currency.
1.4 Financial assets
Thecomparativeinformationprovidedcontinuestobeaccountedforinaccordancewiththe
company’s previous years accounting policy.
Classification
The companyclassifies its financialassetsas financialassets measuredat amortised cost.The
classification depends onthe entity’s business model formanaging thefinancial assetsand the
contractual termsof thecashflows. The companyclassifies its financial assets asatamortised
cost only if both the followingcriteria are met:
-Theassetisheldwithinabusinessmodelwhoseobjectiveistocollectthecontractualcash
flows, and;
-The contractual terms give rise tocash flows thatare solely paymentsof principaland interest.
Assessment whether contractual cash flows aresolely payments of principal and interest
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset
oninitialrecognition.‘Interest’isdefinedasconsiderationforthetimevalueofmoneyandfor
the creditrisk associated withthe principal amountoutstandingduring aparticularperiod oftime
and for otherbasiclendingrisks andcosts(e.g.liquidityrisk andadministrativecosts),as wellas
a profit margin.
Inassessingwhetherthecontractualcashflowsaresolelypaymentsofprincipalandinterest,
thecompanyconsidersthecontractualtermsofthe instrument.Thisincludesassessingwhether
thefinancialassetcontainsacontractualtermthatcouldchangethetimingoramountof
contractual cash flows such thatit would not meetthis condition.
VIRTU FINANCE P.L.C.
Annual FinancialReport and Financial Statements - 31 December 2021
18
1. Summary of significant accounting policies - continued
1.4 Financial assets - continued
Recognition andmeasurement
Regular way purchases and sales of financial assets arerecognised on the trade date, which is
thedateonwhichthecompanycommitstopurchaseorselltheasset.Financialassetsare
derecognisedwhentherightstoreceivecashflowsfromthefinancialassetshaveexpiredor
havebeentransferredandthecompanyhastransferredsubstantiallyalltherisksandrewards
of ownership.
At initialrecognition, the company measuresa financialasset atits fairvalue plus, inthe case of
a financial assetnot at fair value through profit or loss (FVPL),transaction costs that are directly
attributable to the acquisitionof the financial asset.
Interestincomeon debtinstrumentsmeasuredatamortisedcostfromthesefinancialassetsis
includedinfinanceincomeusingtheeffectiveinterestratemethod.Anygainorlossarisingon
derecognition of theseinstruments isrecognised directly in profit or lossandpresented in other
gains/(losses)togetherwithforeignexchangegainsandlosses.Impairmentlossesarepresented
as a separate line item in thestatement of comprehensive income.
Impairment
The company assesses on a forward-looking basis the expected credit losses (ECL) associated
withitsdebtinstrumentscarriedatamortisedcost.Theimpairmentmethodologyapplieddepends
onwhethertherehasbeenasignificantincreaseincreditrisk.Thecompany’sfinancialassets
are subject to the expected creditloss model.
Expected credit loss model
ThecompanymeasureslossallowancesatanamountequaltolifetimeECLs,exceptforthe
following, which are measured at12-month ECLs:
debt securities that are determined tohave low creditrisk at the reporting date; and
otherdebt securitiesand bank balancesfor whichcredit risk hasnotincreased significantly
since initial recognition.
Whendeterminingwhetherthecreditriskofafinancialassethasincreasedsignificantlysince
initial recognition and when estimating ECLs, the company considers reasonable and
supportableinformationthatisrelevantand availablewithoutundue costor effort.The company
assumesthat thecredit riskonafinancialassethasincreased significantlyifitismorethan30
days past due,and it considers a financial assetto be in default when theborrower is unlikely to
pay itscreditobligations tothe companyin full, withoutrecourseby thecompany toactionssuch
as realising security (if any isheld); or the financial asset is more than 90 days past due.
Lifetime ECLsare theECLs thatresult fromall possible default eventsover theexpected lifeof
afinancialinstrument.12-monthECLsaretheportionofECLsthatresultfromdefaultevents
thatare possiblewithin the12 monthsafterthereportingdate (orashorter period ifthe expected
life of the instrument is less than 12 months). The maximum period considered when estimating
ECLs is the maximum contractual period over which the company is exposed to credit risk.
ECLsareaprobability-weightedestimateofcreditlosses. Creditlossesaremeasuredasthe
presentvalueofallcashshortfalls.ECLsarediscountedattheeffectiveinterestrateofthe
financial asset.
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Annual FinancialReport and Financial Statements - 31 December 2021
19
1. Summary of significant accounting policies - continued
1.4 Financial assets - continued
Impairment - continued
Expected credit loss model - continued
Ateach reportingdate,thecompanyassesseswhetherfinancialassetscarriedatamortisedcost
arecredit-impaired.Afinancialassetis‘credit-impaired’whenoneormoreeventsthathavea
detrimentalimpactontheestimatedfuturecashflowsofthefinancialassethaveoccurred.
Evidencethatafinancialassetiscredit-impairedincludesobservabledatasuchassignificant
financialdifficultyoftheborrowerorissuer,orabreachofcontractsuchasadefaultorbeing
more than 90 days past due.
Lossallowancesforfinancialassetsmeasuredatamortisedcostaredeductedfromthegross
carrying amountof the assets.
Simplified approach model
Fortradereceivables,thecompanyappliesthesimplifiedapproachrequiredbyIFRS9,which
requires expected lifetime losses to be recognised from initial recognition of the receivables.
The expectedloss ratesare basedon thepayment profiles of sales over a period of 12months
before31December2021or1January2021,respectively,andthecorrespondinghistorical
creditlossesexperiencedwithinthisperiod.Thehistoricallossratesareadjustedtoreflect
currentandforward-lookinginformationonmacroeconomicfactorsaffectingtheliabilityofthe
customerstosettlethereceivable.Tradereceivablesarewrittenoffwhenthere is noreasonable
expectationofrecovery.Indicatorsthatthereisnoreasonableexpectation of recoveryinclude,
amongothers,theprobabilityofinsolvencyorsignificantfinancialdifficultiesofthedebtor.
Impaired debts arederecognisedwhen they are assessed as uncollectible.
1.5 Trade and other receivables
Tradereceivablescompriseamountsduefromcustomersformerchandisesoldorservices
performed in the ordinarycourse of business.If collection isexpected in one year or less(or in
thenormaloperatingcycleofthebusinessif longer),they areclassifiedas currentassets.If not,
they are presented as non-current assets.
Trade andother receivables are recognisedinitially at fair value and subsequently measured at
amortised cost using the effective interest method.
Detailsaboutthecompany’simpairmentpoliciesandthecalculationoflossallowanceare
provided in Note 1.4.
1.6 Current anddeferred tax
The taxexpense forthe yearcomprises current anddeferred tax.Tax isrecognised in profitor
loss,excepttotheextentthatitrelatestoitemsrecognisedinothercomprehensiveincomeor
directlyinequity. Inthiscase,thetaxisalsorecognisedinothercomprehensiveincomeor
directly in equity, respectively.
VIRTU FINANCE P.L.C.
Annual FinancialReport and Financial Statements - 31 December 2021
20
1. Summary of significant accounting policies - continued
1.6 Current anddeferred tax - continued
Deferred taxisrecognised, usingtheliability method,on temporarydifferences arising between
thetaxbasesofassetsandliabilitiesandtheircarryingamountsinthefinancialstatements.
However,deferred taxisnotaccountedforifitarisesfrom initialrecognitionofan assetor liability
inatransactionotherthanabusinesscombinationthatatthetimeofthetransactionaffects
neitheraccountingnortaxableprofitorloss. Deferredtaxisdeterminedusingtaxrates(and
laws) thathavebeenenactedor substantivelyenacted bythe endof thereportingperiodandare
expectedtoapplywhentherelateddeferredtaxassetisrealisedorthedeferredtaxliabilityis
settled.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profit
will be available against whichthe temporary differences can be utilised.
Deferredtaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttooffset
currenttaxassetsagainstcurrenttaxliabilitiesandwhenthedeferredtaxassetsandliabilities
relate to income taxes levied by the same taxation authority on either the same taxable entity or
different taxableentities where there is an intention to settle the balances on anet basis.
1.7 Share capital
Ordinarysharesareclassifiedasequity.Incrementalcostsdirectlyattributabletotheissueof
new ordinary shares are shown inequity as a deduction, net of tax, from the proceeds.
1.8 Financial liabilities
Thecompanyrecognisesafinancialliabilityin itsstatementoffinancialpositionwhenitbecomes
apartytothecontractualprovisionsoftheinstrument. Thecompany’sfinancialliabilitiesare
classifiedasfinancialliabilitieswhicharenotatfairvaluethroughprofitorloss(classifiedas
‘Otherliabilities’). Thesefinancialliabilitiesarerecognisedinitiallyatfairvalue,beingthefair
valueofconsiderationreceived,netoftransactioncoststhataredirectlyattributabletothe
acquisitionortheissueofthefinancialliability.Theseliabilitiesaresubsequentlymeasuredat
amortisedcost. Thecompanyderecognisesafinancialliabilityfromitsstatementoffinancial
position when the obligation specified in the contract or arrangement is discharged, is cancelled
or expires.
1.9 Borrowings
Borrowingsare recognised initially atthe fairvalueof proceedsreceived, netof transactioncosts
incurred. Borrowingsaresubsequentlycarriedatamortisedcost;anydifferencebetweenthe
proceeds (net of transaction costs) and the redemption value is recognised inprofit or loss over
theperiodoftheborrowingsusingtheeffectiveinterestmethod. Borrowingsareclassifiedas
currentliabilitiesunlessthe company hasan unconditionalright todefer settlementof theliability
for at least twelve months after the end of the reporting period.
Issuecostsincurredinconnectionwiththeissueof thebondsincludeprofessionalfees,publicity,
printing, listing, registration, underwriting, management fees, selling costs and other
miscellaneouscosts.
VIRTU FINANCE P.L.C.
Annual FinancialReport and Financial Statements - 31 December 2021
21
1. Summary of significant accounting policies - continued
1.10 Trade and other payables
Trade payablescompriseobligations topay forgoodsor servicesthathave been acquiredin the
ordinary course ofbusiness from suppliers.Accounts payableare classifiedas currentliabilities
ifpaymentisduewithinoneyearorless(orinthenormaloperatingcycleofthebusinessif
longer).If not, they are presented as non-current liabilities.
Tradeandotherpayablesarerecognisedinitiallyatfairvalueandsubsequentlymeasuredat
amortised cost using the effective interest method.
1.11 Offsettingfinancial instruments
Financialassetsandliabilitiesareoffsetandthenetamountreportedinthestatementof
financialpositionwhenthereisalegallyenforceablerighttosetofftherecognisedamountsand
thereisanintentiontosettleonanetbasis,orrealisetheassetandsettletheliability
simultaneously.
1.12 Provisions
Provisionsforlegalclaimsarerecognisedwhenthecompanyhas apresent legalor constructive
obligation as aresultof past events,it isprobablethat an outflow ofresources willberequired to
settletheobligation,andtheamount hasbeen reliablyestimated.Provisionsare notrecognised
for future operating losses.
Provisionsaremeasuredatthepresentvalueoftheexpendituresexpectedtoberequiredto
settletheobligationusingapre-taxratethatreflectscurrentmarketassessmentsofthetime
valueofmoneyandtherisksspecifictotheobligation. Theincreaseintheprovisiondueto
passage of time is recognisedas interest expense.
1.13 Revenue recognition
Revenuecomprisesthefairvalueoftheconsiderationreceivedorreceivableforthesaleofgoods
andservicesintheordinarycourseofthecompany’sactivities. Thecompanyrecognises
revenuewhentheamountofrevenuecanbereliablymeasured,itisprobablethatfuture
economic benefits willflow to the entity and whenspecific criteria have been met for eachof the
company’s activities as described below.
(a) Interest income
Interestincomeisrecognisedforallinterest-bearinginstrumentsusingtheeffectiveinterest
method.
(b) Managementfee income
Managementfee incomeis recognised inthe periodto whichsuch management services relate.
(c) Dividend income
Dividend income is recognisedwhen the right toreceive payment is established.
VIRTU FINANCE P.L.C.
Annual FinancialReport and Financial Statements - 31 December 2021
22
1. Summary of significant accounting policies - continued
1.14 Dividend distribution
Dividend distribution to the company’s shareholders is recognised as a liability in the company’s
financialstatementsintheperiodinwhichthedividendsareapprovedbythecompany’s
shareholders.
1.15 Earnings pershare
Thecompany presents basicearningspershare(EPS)dataforitsordinaryshares.BasicEPS
is calculatedbydividingtheprofitor loss attributableto ordinary shareholdersof thecompanyby
the weighted average numberof ordinary shares outstandingduring the period.
2. Financial riskmanagement
2.1 Financial risk factors
Thecompanyconstitutesafinancingspecialpurposevehiclewhosebondsarematchedby
equivalentamountsduefrom,andguaranteedby,VirtuMaritimeLimited(afellowsubsidiary).
The company’sprincipalrisk exposuresrelatetocreditriskand liquidityrisk.The companyis not
exposed tocurrencyrisk andthe directorsdeem interest raterisk exposureto beminimal dueto
matchingofitsinterestcostsonborrowingswithfinanceincomefromitsloansandreceivables
referred to above.
(a) Credit risk
Credit risk arises mainly from loans receivable from VirtuMaritime Limited (Note 4).
Thecompanymeasurescreditriskandexpectedcreditlossesusingprobabilityofdefault,
exposureatdefaultandlossgivendefault.Managementconsiderbothhistoricalanalysisand
forward-looking information in determining any expected creditloss.
Thecompany’sexposuretocreditriskislimitedtothecarryingamountoffinancialassets
recognised at the reporting date, as summarised below. The company’s exposures tocredit risk
as at the end ofthe reporting periods are analysed as follows:
Financial assetsmeasured at amortised cost
2021
2020
Loans receivable from fellow subsidiary (Note 4)
24,400,000
24,400,000
Amounts due
from
parent
(Note 5)
8
7
1,
623
791,527
Cash and cash equivalents (Note6)
7,905
13,356
2
5
,
279,528
25,204,883
The maximumexposure tocredit riskat the endofthe reporting period in respectofthe financial
assetsmentionedaboveisequivalenttotheircarryingamountasdisclosedintherespective
notes to the financial statements.The company does not hold collateral as security on its loans
receivable.
VIRTU FINANCE P.L.C.
Annual FinancialReport and Financial Statements - 31 December 2021
23
2. Financial riskmanagement - continued
2.1 Financial risk factors - continued
(a) Credit risk -continued
The company appliesthe low creditrisksimplificationfor all instrumentsthatare externally rated
ataratingofBBB-(orequivalent)orbetter;andtheECLprovisionfortheseinstrumentsis
accordinglymeasuredatanamountequivalenttothe12-monthECLs.Thecompanythusapplies
the simplification for its bankdeposits.
AsdisclosedinNote 4,VirtuMaritime Limitedhasissuedcorporateguaranteeswithrespectto
thecompany’sbonds.Theseborrowings have beenloanedtoVirtuMaritimeLimitedthroughthe
issueofthecompany’sloansandreceivables.Credit riskwithrespectto thisreceivableis limited
sincetherewerenoindicationsthatVirtuMaritimeGroupisunabletomeetitsobligations. The
companyappliesthecreditriskmanagementpoliciesdescribedabove;nolosseshave
historically beenincurred on any ofthe company’sbalances, andmanagement hasdetermined
thattherehas notbeenasignificantincrease increditrisksince origination. TheECL provision
for this instrument is accordingly alsomeasured atan amount equivalent to the12-month ECLs.
Thecompany’smanagementhasalsodeterminedthatthemacroeconomicsituationoftheGroup
andthedurationofthereceivableisnotchanging,accordinglyevenafterconsideringthe
macroeconomicoverlayontotheexpectationsofcreditlosses,theresultingimpairment
allowance is immaterial to the company’s financial position and results.
At31 December2021,cash andcashequivalentsare heldwith a local financialinstitutionwith a
creditratingofBBB-(2019: BBB-),andbalancesarecallableondemandorwithinamaximum
periodofoneweek.Management considertheprobability ofdefaulttobeclosetozeroas the
counterpartyhasastrongcapacitytomeetitscontractualobligationsinthenearterm. Asa
result, noloss allowancehas been recognisedbased on12-month ECL as any suchimpairment
would be wholly insignificant to the company.
(b) Liquidity risk
Thecompanyisexposedtoliquidityriskarisingprimarilyfromitsabilitytosatisfyliability
commitments depending on cash inflows receivable in turn from the Virtu Maritime Group.
Managementmonitorsliquidityriskbymeansofcashflowforecastsonthebasisofexpected
cashflowsoveratwelve-monthperiodtoensurethatnoadditionalfinancingfacilitiesare
expectedtoberequiredoverthecomingyear. Thisprocessisperformedthrougharigorous
assessmentofdetailedcashflowprojectionsofthefellowsubsidiarywherematchingofcash
inflowsandoutflowsarisingfromexpectedmaturitiesoffinancialinstrumentsareassessedon
an annual basis.
The carrying amounts ofthe company’s assets and liabilities are analysed into relevant maturity
groupingsbasedontheremainingperiodattheendofthereportingperiodtothecontractual
maturity date in therespective notes tothe financial statements.
The company is exposedto liquidity risk in relation tomeeting future obligations associated with
itsfinancialliabilities,which compriseprincipallyinterest-bearingborrowings andtrade andother
payables(refertoNotes8and9). Prudentliquidityriskmanagementincludesmaintaining
sufficientcashtoensure theavailabilityof anadequateamountoffundingtomeetthecompany’s
obligationsandensuringthatalternativefundingisavailablewhenthebondsareduefor
repayment.
VIRTU FINANCE P.L.C.
Annual FinancialReport and Financial Statements - 31 December 2021
24
2. Financial riskmanagement - continued
2.1 Financial risk factors - continued
(b) Liquidity risk –continued
Thefollowingtableanalysesthecompany’sfinancialliabilitiesintorelevantmaturitygroupings
basedontheremainingperiodatthereportingdatetothecontractualmaturitydate.Theamounts
disclosed inthetables below arethe contractual undiscounted cashflows. Balances due within
12 months equal their carrying balances, as the impact of discounting is notsignificant.
Due
Between
Carrying
Contractual
within
1 and 5
Over 5
amount
cash flows
one year
years
years
31 December 2021
Unsecured bond
24,620,204
30,625,000
937,500
3,750,000
25,937,500
Trade and other payables 138,144 138,144 138,144 - -
24,758,348
30,763,144
1,075,644
3,750,000
25,937,500
31 December 2020
Unsecured bond 24,564,328 31,562,500 937,500 3,750,000
26,875,000
Trade and other payables
129,152
129,152
129,152
-
-
24,693,480
31,691,652
1,066,652
3,750,000
26,875,000
2.2 Capital risk management
Thecompany’sbondsareguaranteedbyVirtuMaritimeLimited(afellowsubsidiary).Related
financecostsarealsoguaranteedbythisfellowsubsidiary.Thecapitalmanagementofthe
companythereforeconsistsofaprocessofregularlymonitoringthefinancialpositionofthe
guarantor (Note 2.1).
2.3 Fair values of financialinstruments
At 31December2021 thecarrying amountsofreceivables (netof impairmentprovisions if any)
andpayablesareassumedtoapproximatetheirfairvalues. Thefairvalue offinancial liabilities
fordisclosurepurposesisestimatedbydiscountingthefuturecontractualcashflowsatthe
current market interest rate that is available to the company for similar financial instruments.
Asat theendofthereportingperiod,thefairvaluesoffinancialassetsand liabilities,approximate
the carrying amounts shown in the statementof financial position.
Thefairvalueofnon-currentfinancialinstrumentsfordisclosurepurposesisestimatedby
discounting thefuture contractual cashflowsat thecurrentmarket interestratethat isavailable
tothecompanyforsimilarfinancialinstruments. Thefairvalueofthecompany’snon-current
tradeand otherpayables attheendofthe reporting period isnotsignificantlydifferent fromthe
carrying amounts.
VIRTU FINANCE P.L.C.
Annual FinancialReport and Financial Statements - 31 December 2021
25
3. Critical accountingestimates and judgments
Estimatesandjudgmentsarecontinuallyevaluatedandbasedonhistoricalexperienceandother
factorsincludingexpectationsoffutureeventsthatarebelievedtobereasonableunderthe
circumstances. In the opinion of the directors, the accounting estimates and judgments made in
thecourseofpreparingthesefinancialstatementsarenotdifficult,subjectiveorcomplextoa
degree which wouldwarrant their description as critical in terms of the requirements of IAS1.
4. Loans and receivables
2021
2020
-
current
Loan to fellow subsidiary
24,400,000
24,400,000
LoansreceivablereflectthetransferoffundstoVirtuMaritimeLimited(afellowsubsidiary),
generated by thecompany from the issue of bonds (Note 8).
The proceeds from the issue of the bond areloaned to Virtu Maritime Limited to be advancedto
VirtuWavepiercerLimited,solelyforpurposesofthepart-financingoftheacquisitionofthevessel
acquiredbythelattercompany. Theloantosubsidiaryisrepayableovertheperiodto2027,
bears interest at4.05% payable on the 1September ofeach year.
Virtue Maritime Limited acts as a guarantor for the bond issue ofthe company.
5. Trade and otherreceivables
2021
2020
Current
Amounts due
from
parent
871,623
791,527
Prepayments
19,872
18,762
891,495
810,289
Amounts due fromparent areunsecured, interest free are repayable on demand.
Thecompany’sexposuretocreditandcurrencyrisksandimpairmentlossesrelating totradeand
other receivables are disclosed in Note 2.
6. Cash and cash equivalents
Forthepurposesofthestatementofcashflows,cashandcashequivalentscomprisethe
following:
2021
2020
Cash at bank and other intermediaries
7,905
13,356
VIRTU FINANCE P.L.C.
Annual FinancialReport and Financial Statements - 31 December 2021
26
7. Share capital
2021
2020
Authorised
500,000 ordinary shares of 1 each
500,000
500,000
Issued and fullypaid
500,000 ordinary shares of
1 each
500,000
500,000
Theholdersofordinarysharesareentitledtoreceivedividendsasdeclaredfromtimetotime
and are entitled to one vote per share at meetings of the company.All shares rank equally with
regard to the company’s residualassets.
8. Borrowings
2021
2020
-
current
250,000 3.75% Bonds of
100 each 2017
-
2027
24,620,204
24,564,328
2021
2020
Face value
250,000 3.75% Bonds of
100 each 2017
-
2027
25,000,000
25,000,000
Issue costs
(594,802)
(594,802)
Accumulated amortisation
215,006
159,130
Closing net book amount
(379,796)
(435,672)
Amortised cost and closing carrying amount
24,620,204
24,564,328
Thisnoteprovidesinformationaboutthecontractualtermsofthecompany’sborrowings.For
moreinformation aboutthecompany’s exposuretointerest rate andliquidityrisk, referto Note
2.
By virtueof anoffering memorandumdated 30October2017,the companyissued 25,000,000
bonds with a face value of 100 each. Interest on the 3.75% 2027 Bonds is payable annually in
arrears,on30Novemberofeachyear.Thebondsareredeemableatparandareduefor
redemption on 30 November 2027. The bonds are guaranteed by Virtu Maritime Limited, which
has bound itself jointly and severally liable for the repayment of the bonds and interest thereon,
pursuanttoandsubjecttothetermsandconditionsintheofferingmemorandum.Thebonds
wereadmittedontheOfficialListoftheMaltaStock Exchangeon7December2017.Thequoted
market price as at31 December 2021 for the bondswas 103.00 (2020: 103.00).
VIRTU FINANCE P.L.C.
Annual FinancialReport and Financial Statements - 31 December 2021
27
9. Trade and otherpayables
2021
2020
Current
Interest payableon bonds
79,623
79,623
Other payables
22,903
20,752
Accruals
35,618
28,777
1
38,144
129,152
Other payables are unsecured,interest free and repayable on demand.
Thecompany’sexposuretocurrencyandliquidityrisksrelatedtotradeandotherpayablesis
disclosed in Note 2.
10. Interest and other related income
2021
2020
Interest on loans due
from fellow subsidiary
988,200
988,200
Facility fee due from fellow subsidiary
110,000
110,000
1,098,200
1,098,200
During the year allrevenue was derived from the company’s fellowsubsidiary.
11. Interest payable and similarcharges
2021
2020
Interest payableon bonds
937,500
937,500
Amortisation of bond issue costs (Note 8)
55,876
53,704
993,376
991,204
12. Expenses by nature
2021
2020
Directors’ emoluments
45,000
45,000
Legal and professional fees
49,570
53,153
Total administrative expenses
94,570
98,153
VIRTU FINANCE P.L.C.
Annual FinancialReport and Financial Statements - 31 December 2021
28
12. Expenses by nature - continued
Auditor’s fees
Feeschargedbytheauditorforservicesrenderedduringthefinancialyearrelatetothe
following:
2021
2020
Annual statutory audit
11,950
12,350
Tax advisory andcompliance services
1,000
1,000
Total administrative expenses
12,950
13,350
13. Directors’ emoluments
2021
2020
Directors’ fees
45,000
45,000
14. Tax expense
2021
2020
Current tax expense
on taxable profitsubject to taxat 35%
3,589
3,095
15. Earnings per share
Earningspershareiscalculatedbydividingtheprofitattributabletoownersofthecompanyby
the weighted average numberof ordinary shares in issue during theyear.
2021
2020
Net profit attributable to owners of the company
6,665
5,748
Weighted averagenumber of ordinary shares in issue (Note7)
500,000
500,000
Earnings per share (cents)
1.33
1.15
VIRTU FINANCE P.L.C.
Annual FinancialReport and Financial Statements - 31 December 2021
29
16. Cash (used in)/generated from operations
2021
2020
Profit before tax
10,254 8,843
Adjustments for:
Amortisation of bond issue costs 55,876 53,704
Finance costs
79,623
79,623
Changes in working capital:
Trade and other receivables
(81,206) (52,333)
Trade and other payables
(70,631) (86,970)
Cash
(used
in)
/generated from
operations
(6,084)
2,867
17. Related parties
The companies forming part of the Virtu Group of Companies are considered by the directors to
be related parties as these companies are ultimately ownedby the Virtu Holdings Limited.
The company is a subsidiary of Virtu Holdings Limited, the ultimate parent company of the Virtu
Group.Theregisteredofficeofbothcompaniesis situatedatVirtu,Ta’Xbiex Terrace,Ta’Xbiex,
XBX 1034, Malta.
ThemainrelatedpartywithwhomtransactionsareenteredintoisVirtuMaritimeLimited,the
guarantor of the borrowings (Note 8).
The following are the principaltransactions thatwere carried outwith related parties:
2021 2020
Income from goods and services
Finance income from fellow subsidiary (Note 10)
988,200
988,200
Facility fee from fellow subsidiary (Note 10)
110,000
110,000
Keymanagementpersonnelcompensation,consistingofdirectors’remuneration,hasbeen
disclosed in Note 13 to the financialstatements.
Year endbalancesarisingfromrelatedpartytransactionsaredisclosedin Notes 4,5 and9 tothe
financial statements.
VIRTU FINANCE P.L.C.
Annual FinancialReport and Financial Statements - 31 December 2021
30
18. Events after the endof the reporting period
Fuelpricesduring2021wereatmanageablelevels,withperiodicboutsofvolatility.However,
theconflictinUkrainehasresulted insignificantvolatilityintheoilmarketinearly2022andan
appropriatefuelsurchargemechanismremainsinplace.Inanticipationofworldfuelprices
remainingvolatile, theGrouphad hedged alimited proportionof expected consumptionfor2021
and 2022. The directors are conscious of the impact of the current conflict in Eastern Europe on
fuelpricesandthetravelindustry.However,itisstilltooearlytoevaluatethecommercialand
financial impact that this crisis might have on thegroup, withparticular reference to thepotential
impact on the supply chain ofoil and fuel products.
19. Statutory information
Virtu Finance p.l.c. isa limitedliability company and is incorporated inMalta.
TheultimateandimmediateparentcompanyofVirtuFinancep.l.c.isVirtuHoldingsLimited,a
companyregisteredinMalta,withitsregisteredaddressatVirtu,Ta’XbiexTerrace, Ta’Xbiex,
XBX 1034, Malta.
The ultimate controlling parties ofVirtu Holdings Limitedare Mr Francis Portelli and Prof.John
Mark Portelli.

PwC_fl_4cp.eps

Independent auditor’s report

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

 

Report on the audit of the financial statements

Our opinion

 

In our opinion:

 

·      The financial statements give a true and fair view of the financial position of Virtu Finance p.l.c. (the company) as at 31 December 2021, and of the company’s financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards (‘IFRSs’) as adopted by the EU; and

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

 

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

 

What we have audited

 

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

 

·         the statement of financial position as at 31 December 2021;

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

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

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

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

 

Basis for opinion

 

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

 

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

 

Independence

 

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

 

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

 

The non-audit services that we have provided to the company, in the period from 1 January 2021 to 31 December 2021, are disclosed in Note 12 to the financial statements.

 

Emphasis of matter

 

We draw attention to note 1.1 to these financial statements that explains the impact of and uncertainties relating to COVID-19 on the Group and therefore the Company. This matter is considered to be of fundamental importance to the users’ understanding of the financial statements due to its nature and significance. Our opinion is not modified in respect of this matter.

 

Our audit approach

 
Overview

 

img

·         Overall materiality: €263,000, which represents 1% of total assets.

 

 

 

 

 

 

 

·         Recoverability of group balances

 

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

 

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

 

Materiality

 

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

 

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

 

Overall materiality

€263,000

How we determined it

1% of total assets

Rationale for the materiality benchmark applied

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

 

We agreed with the Audit Committee that we would report to them misstatements identified during our audit above €13,100 as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.

 

Key audit matters

 

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

 

Key audit matter

How our audit addressed the Key audit matter

Recoverability of group balances

 

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

 

Loan balances due to the company from Virtu Maritime Limited as at 31 December 2021 amounted to €24.4m. Management assesses recoverability of the loan by reference to the expected future cash flows of the Virtu Maritime Group.

 

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

 

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

 

 

 

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

 

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

 

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

 

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

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

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

 

We also challenged the revenue growth assumptions and developments in the world economy during the year, specifically the impact that the COVID-19 pandemic had on the assumptions.

 

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

 

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

 

 

Other information

 

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

 

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

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

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

 

 

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

 

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

 

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

 

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

 

Auditor’s responsibilities for the audit of the financial statements

 

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

 

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

 

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

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

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

·     Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company’s ability to continue as a going concern. In particular, it is difficult to evaluate all of the potential implications that COVID-19 will have on the company’s business and the overall economy.

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

 

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

 

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

 

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

 

Report on other legal and regulatory requirements

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

 

We have undertaken a reasonable assurance engagement in accordance with the requirements of Directive 6 issued by the Accountancy Board in terms of the Accountancy Profession Act (Cap. 281) - the Accountancy Profession (European Single Electronic Format) Assurance Directive (“the ESEF Directive 6”) on the Annual Financial Report of Virtu Finance p.l.c. for the year ended 31 December 2021, 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 2021 has been prepared in XHTML format in all material respects.

Other reporting requirements

 

The Annual Financial Report and Financial Statements 2021 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 2021 and the related Directors’ responsibilities

Our responsibilities

Our reporting

Directors’ report

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

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

 

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

 

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

 

In our opinion:

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

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

 

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

 

Corporate Governance - Statement of Compliance

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

 

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

 

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

 

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

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

 

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

 

Other matters on which we are required to report by exception

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

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

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

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

 

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

 

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

 

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

 

Appointment

 

We were first appointed as auditors of the company for the period ended 31 December 2017.  Our appointment has been renewed annually by shareholder resolution representing a total period of uninterrupted engagement appointment of 5 years. The company became listed on a regulated market on 7 December 2017.

 

 

PricewaterhouseCoopers

78, Mill Street

Zone 5, Central Business District

Qormi

Malta

 

 

 

Stephen Mamo

Partner

 

28 April 2022