Company Registration Number: C 35139
TIGNÉ MALL p.l.c.
Annual Financial Report and Financial Statements
31 December 2023
TIGNÉ MALL p.l.c.
Annual Financial Report and Financial Statements - 31 December 2023
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 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 2023
1
Directors’ report
The Directors present their report and the audited financial statements for the year ended 31 December
2023.
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 2023 has been a very positive year for the business.
Malta’s tourism results for the year
showed a record number of inbound tourists, exceeding the 3 million mark, and also exceeding 2019
arrivals by 8.3%.
This, coupled with the general increase in the local population, has meant that
consumer demand experienced a period of sustained growth.
Aggregate like-for-like tenant turnover at
The Point has consequently been better than both 2022 and 2019.
Despite this, tenants continued to
report challenges on the human resources front during the period under review.
The introduction of Homemate, a leading home-improvement retailer, into our shopping centre during the
year under review, marks an important milestone in our centre’s journey. This strategic addition has not
only enriched our tenant mix but has also propelled the centre to full occupancy, a testament to our
commitment to delivering excellence in retail offerings. Homemate's presence has enhanced the diversity
and appeal of our shopping centre, attracting a broader range of customers seeking quality home
improvement products and ancillary products and services. Through collaborative marketing efforts and
synergistic partnerships, we have effectively leveraged the strength of our brand mix to drive foot traffic
and boost overall tenant sales performance. This successful integration underscores our ability to adapt
to evolving consumer preferences and solidifies our position as a premier destination for comprehensive
shopping experiences.
In the ever-changing retail landscape within which the business operates, our shopping centre has
achieved remarkable success through marketing strategies tailored to diverse customer segments. By
employing innovative marketing initiatives, we have effectively engaged with varied demographics,
capturing their attention and loyalty.
Through targeted campaigns, events, and digital outreach, we've
bolstered footfall, driving increased traffic through our doors. This surge in footfall, coupled with strategic
promotions and partnerships, has translated into substantial growth in turnover and profitability, marking
significant milestones for our company. Our commitment to understanding and connecting with our
customers on multiple levels has not only enhanced their shopping experience but also strengthened our
position as a premier destination for retail, leisure, and entertainment.
The Company’s senior management team has compiled financial projections for the year ending 31
December 2024.
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 2024.
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 2023 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 2023, the Company’s current liabilities exceeded its current assets by €0.07 million
(2022: €0.9 million).
During the year, the Company managed 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 able to steadily meet its operational current liabilities on an
ongoing basis.
TIGNÉ MALL p.l.c.
Annual Financial Report and Financial Statements - 31 December 2023
2
Directors’ report
– continued
Review of the business
- continued
Vision
In view of new developments in the shopping centre landscape, our company's vision for The Point
remains unwavering. Our goal persists in maintaining its status as Malta's premier shopping mall
destination, providing visitors with unparalleled experiences while ensuring sustainable returns for
shareholders. As we navigate the evolving market dynamics, our strategy evolves to encompass not only
the provision of a compelling retail destination but also proactive adaptation to emerging trends and
competition. This entails further strengthening relationships with tenants, curating an even more iconic
mix of brands, and innovating to deliver exceptional long-term growth in net rental income.
Additionally, we will continue to explore strategic growth opportunities, leveraging our expertise to
enhance shareholder value even in the context of increased competition. This vision reinforces our
commitment to excellence and resilience in an ever-changing retail landscape.
Environment, Social and Corporate Governance (ESG)
Tigné Mall plc’s commitment to providing a positive customer experience 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 taken
various initiatives to reduce energy consumption across its operations as it proceeds on its journey to
reduce the carbon footprint of the centre.
The Board is being advised on the key issues in all three areas.
Trading performance
During 2023, the Company’s revenues amounted to €8.5 million, an increase of 4% over the previous
year and operating profits increased to €5.4 million (2022: €5.2 million).
Earnings before interest, tax and
depreciation increased to €7.5 million (2022: €7.3 million).
Finance costs decreased to €0.4 million
(2022: €0.5 million); of which €0.15 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.
As in 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 €1.3
million (2022: €1.2 million), ending the year with profits after tax of €3.9 million (2022: €3.8 million).
During the year under review the Company generated €7 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 24. During the year a net interim dividend of €765,000 (2022:
€750,000) and a final net dividend of €765,000 (2022: €750,000) were distributed to the shareholders.
Subsequent to the end of the reporting period, the Directors recommend the payment of a final net
dividend of €815,000 in relation to the 2023 financial results.
TIGNÉ MALL p.l.c.
Annual Financial Report and Financial Statements - 31 December 2023
3
Directors’ report
- continued
Directors
The Directors of the Company who held office during the financial year ended 31 December 2023 were:
Joseph Zammit Tabona (Chairman)
David Demarco – (retired on 22 June 2023)
Marzena Formosa
Chantelle Marie Coleiro – (retired on 22 June 2023)
Albert Frendo
Suzanne Stafrace – (appointed on 22 June 2023 and resigned on 5 October 2023)
Etienne Sciberras – (appointed on 22 June 2023)
Michael Agius – (appointed on 11 January 2024)
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 2023 are included in the Annual Financial
Report 2023, 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 2023, 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 2023
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 94 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 98 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 one 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 2023
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 2023
As at 22 April 2024
Ordinary
Shares
% Holding
Ordinary
Shares
% Holding
Mapfre MSV Life p.l.c.
20,000,000
35.46%
20,000,000
35.46%
Marsamxett Properties Ltd
18,787,652
33.31%
22,158,008
39.29%
Until 8
October 2023, HSBC Bank Malta plc as Custodian for HSBC Life Assurance (Malta) Ltd, held
12.81% share in the Company and until 7 November 2023, Bank of Valletta plc held 16.7% share in the
Company
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 2023
6
Directors’ report
- continued
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
In 2023 the Company launched a process for the engagement of external auditors. The process was
overseen
by
the
Audit
Committee
and
resulted
in
a
recommendation
to
re-appoint
PricewaterhouseCoopers as the Company’s external auditors. The recommendation was approved by
the Board of Directors and their re-appointment as the Company’s external auditors will be proposed
to shareholders at the 2024 Annual General Meeting.
Signed on behalf of the Board of Directors on 22 April 2024 by Joseph Zammit Tabona (Chairman)
and Etienne Sciberras (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
22 April 2024
TIGNÉ MALL p.l.c.
Annual Financial Report and Financial Statements - 31 December 2023
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 business strategy of the Company is vested in the Board consisting of a
Chairman and three (3) 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 2023
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
Joseph Zammit Tabona
Non-Executive Directors
David Demarco – (retired on 22 June 2023)
Marzena Formosa
Chantelle Marie Coleiro – (retired on 22 June 2023)
Albert Frendo
Suzanne Stafrace – (appointed on 22 June 2023 and resigned on 5 October 2023)
Etienne Sciberras – (appointed on 22 June 2023)
Michael Agius – (appointed on 11 January 2024)
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. 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 2023
9
Corporate Governance – Statement of Compliance -
continued
B.
COMPLIANCE WITH THE CODE
- continued
Principle 3: Composition of the Board
- continued
At an election of directors, every shareholder shall have one (1) vote in respect of each ordinary share
held. A shareholder may use all his votes in favour of one candidate or may split the votes in any manner
amongst two or more candidates.
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 2023
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 scheduled Board meetings, individual Directors participate in other
ad hoc
meetings
which may be called 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.
Twelve meetings of the Board of Directors were held during 2023 and attendance was as follows:
Board member
Attended
Joseph Zammit Tabona
12 (out of 12)
David Demarco – (retired on 22 June 2023)
5 (out of 5)
Marzena Formosa
12 (out of 12)
Chantelle Marie Coleiro – (retired on 22 June 2023)
5 (out of 5)
Albert Frendo
11 (out of 12)
Suzanne Stafrace – (appointed on 22 June 2023
and resigned on 5 October 2023)
4 (out of 4)
Etienne Sciberras – (appointed on 22 June 2023)
7 (out of 7)
Michael Agius – (appointed on 11 January 2024)
0 (out of 0)
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, which typically includes the Memorandum
and Articles of Association of the Company, the Company’s policies and its latest published financial
statements, whether annual or half-yearly. 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
In early 2024 the Board carried out an evaluation of its own performance together with that of its
Committees, the Chairman and the individual directors. 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 analysed by the Chairperson of the RemNom
Committee and the Chairman of the Board of Directors and discussed by the Board. The review has not
resulted in any material changes to the Company’s internal organisation or in its governance structures.
TIGNÉ MALL p.l.c.
Annual Financial Report and Financial Statements - 31 December 2023
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) - (retired on 22 June 2023)
Chantelle Marie Coleiro - (retired on 22 June 2023)
Albert Frendo – (from 1 January to 22 June 2023, then re-appointed on 16 October 2023)
Etienne Sciberras (Chairman of the Committee) – (appointed on 22 June 2023)
Marzena Formosa – (appointed on 22 June 2023)
Suzanne Stafrace – (appointed on 22 June 2023 and resigned on 5 October 2023)
In terms of Capital Markets Rule 5.118, up until 22 June 2023, Mr David Demarco was the Director whom
the Board considered as competent in accounting and auditing. Following Mr Demarco’s retirement from
the Board of Directors, Mr Etienne Sciberras was appointed in his stead and was subsequently considered
by the Board to be the Director competent in accounting and auditing.
Mr Sciberras 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 Sciberras is also competent in accounting in terms of the Capital Markets Rules,
holding the relevant qualifications and currently occupying a senior position within a company operating in
the life insurance sector.
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 2023
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) to review 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, it shall proceed as required by the Capital Market Rules, and 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 2023
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 (Chairman of the Committee) - (retired on 22 June 2023)
2 (out of 2)
Chantelle Marie Coleiro - (retired on 22 June 2023)
2 (out of 2)
Albert Frendo – (from 1 January to 22 June 2023, then re-appointed on 16 October 2023) 2 (out of 2)
Etienne Sciberras (Chairman of the Committee) – (appointed on 22 June 2023)
2 (out of 2)
Marzena Formosa – (appointed on 22 June 2023)
2 (out of 2)
Suzanne Stafrace – (appointed on 22 June 2023 and resigned on 5 October 2023)
2 (out of 2)
Michael Agius – (appointed on 11 January 2024)
0 (out of 0)
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 up to 22 June 2023), Mr.
Albert Frendo (Chairperson of the Committee from 22 June 2023) 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 on pages 17 to 22 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 2023
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
thereon, to decide on any dividends recommended by the Board, to elect Directors, to 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 2023
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 as required
by applicable legislation.
On joining the Board and from time to time during the financial year,
Directors
are informed of their obligations on dealing in securities of the Company, as set out in the Capital Market
Rules and the Market Abuse Regulation.
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 2023
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 2023
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 2023 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
During the period 1 January 2023 until the 22 June 2023, the Committee was composed of Dr Chantelle
Coleiro as Chairperson and Ms Marzena Formosa and Mr David Demarco as members.
Following the
Company’s Annual General Meeting held on the 22 June 2023, the Committee was re-constituted such that
Ms Suzanne Stafrace was appointed Chairperson (until her resignation on the 5 October 2023) and Mr
Etienne Sciberras and Mr Albert Frendo were appointed members. Mr Etienne Sciberras was appointed
Chairperson of the Committee on the 16 October 2023.
The Committee held two meetings during the year under review, on the 6
th
March 2023 and 23
rd
August
2023, which were attended as follows:
Member
Attended
Dr. Chantelle Coleiro (until 22 June 2023)
1 out of 1
Ms. Marzena Formosa (until 22 June 2023)
1 out of 1
Mr. David Demarco (until 22 June 2023)
1 out of 1
Ms Suzanne Stafrace (between 22 June 2023 and 5 October 2023)
1 out of 1
Mr Etienne Sciberras (from 22 June 2023)
1 out of 1
Mr Albert Frendo (from 22 June 2023)
1 out of 1
Remuneration Policy
The Company’s 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 participating votes.
As the resolution was approved by the required majority, the
Remuneration Policy was implemented in 2020.
In 2022 non-material updates to the Remuneration Policy were carried out to reflect mainly changes to the
designation of the applicable rules, which were renamed Capital Markets Rules and other minor alterations
to the text thereof. The revised Policy was approved by the Board of Directors on 14 April 2022. The
updated Policy is available for viewing on the Company’s website.
TIGNÉ MALL p.l.c.
Annual Financial Report and Financial Statements - 31 December 2023
18
RemNom Committee Report - continued
In terms of the Capital Markets Rules, the Company is required to submit the Remuneration Policy to a
vote by the general meeting at least every four years.
Accordingly, the Committee will be submitting an
updated Remuneration Policy for the consideration and approval of the Company’s shareholders at the
2024 Annual General Meeting.
The Company’s Remuneration Policy is designed such that the Company can attract, motivate and retain
the right individuals as would assist the Company 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 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.
Remuneration Report for the year ended 31 December 2022
The Remuneration Report for the financial year ended 31 December 2022 was submitted for discussion at
the Annual General Meeting held on the 22
nd
June 2023. No questions relative to the said Remuneration
Report were received in advance, or raised at the Annual General Meeting.
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 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.
On 22 June 2023 the General Meeting set a threshold for maximum annual aggregate emoluments of
Directors at €150,000, in line with the previous year.
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 during the year under review amounted to €108,425. This was deemed to be consistent with market
practice and conducive to the achievement of the Company’s strategic objectives.
It is also considered as
being aligned 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. The
Committee considers that the 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 2023
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 2023 for the purposes of Code Provision
8.A.5 are as follows:
-
Fixed remuneration
€108,425 (2022: €87,453)
-
Variable remuneration
None (2022: None)
-
Share Options
None (2022: None)
-
Others
None (2022: 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 three most recent financial years.
*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 between 2020 and 2021 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 2023
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
2023:
*The percentage annual change of emoluments received for directors who were appointed or whose appointment was terminated
throughout the financial year has been calculated based on annualised emoluments.
TIGNÉ MALL p.l.c.
Annual Financial Report and Financial Statements - 31 December 2023
21
RemNom Committee Report - continued
Directors’ Remuneration
- continued
The General Meeting on 17th June 2022 approved resolution proposing an increase of the 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 were 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 Suzanne Stafrace as compensation in connection with the cessation of her
directorship.
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 EBITDA-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 qualitative
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 small 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 for an indefinite term.
Other than as stated above, the CEO is not entitled to profit sharing, share options, pension benefits or
other similar remuneration.
TIGNÉ MALL p.l.c.
Annual Financial Report and Financial Statements - 31 December 2023
22
RemNom Committee Report - continued
Chief Executive Officer’s Remuneration
- continued
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.
The Board
considers that the CEO’s remuneration package aligns to the Remuneration Policy objectives and current
market remuneration levels. The Board also believes that the CEO’s remuneration package contributes
towards incentivising the role holder to achieve the Company’s objectives and create sustainable future
growth.
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 €120,653 annually (2022: €110,138) and a variable
remuneration of €19,465 (2021: €16,454).
It is noted that the award of variable remuneration was
predominantly based on the achievement of financial and non-financial targets, including EBITDA-based
targets, liquidity levels, project realization and adherence to Company policies.
Non-cash benefits for the
year under review amounted to €14,286.
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 2023, 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 Annual General Meeting of the Company to be held in 2024.
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 2023
23
Statement of financial position
As at 31 December
Notes
2023
2022
€
€
ASSETS
Non-current assets
Property, plant and equipment
4
80,049,170
80,993,856
Right-of-use assets
5
4,682,514
3,890,121
Total non-current assets
84,731,684
84,883,977
Current assets
Trade and other receivables
6
4,207,221
3,600,716
Cash and cash equivalents
7
3,057,611
3,074,724
Total current assets
7,264,832
6,675,440
Total assets
91,996,516
91,559,417
EQUITY AND LIABILITIES
Capital and reserves
Share capital
8
27,766,888
27,766,888
Revaluation reserve
9
18,780,831
19,028,037
Retained earnings
14,883,751
12,224,913
Total equity
61,431,470
59,019,838
Non-current liabilities
Trade and other payables
10
612,849
667,367
Borrowings
11
5,541,192
7,041,192
Lease liabilities
12
4,335,863
4,225,088
Deferred tax liabilities
13
12,739,000
13,004,267
Total non-current liabilities
23,228,904
24,937,914
Current liabilities
Trade and other payables
10
4,444,345
4,327,710
Borrowings
11
1,500,000
1,944,037
Lease liabilities
12
89,865
88,803
Current tax liabilities
1,301,932
1,241,115
Total current liabilities
7,336,142
7,601,665
Total liabilities
30,565,046
32,539,579
Total equity and liabilities
91,996,516
91,559,417
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 22 April
2024. The financial statements were signed on behalf of the Board of Directors by Joseph Zammit Tabona
(Chairman) and Etienne Sciberras (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 2023
24
Income statement
Year ended 31 December
Notes
2023
2022
€
€
Revenue
14
8,516,318
8,169,198
Cost of sales
15
(2,389,833)
(2,337,748)
Gross profit
6,126,485
5,831,450
Administrative and other expenses
15
(754,525)
(582,097)
Operating profit
5,371,960
5,249,353
Finance income
17
7,156
2,165
Finance costs
18
(410,992)
(474,686)
Profit before tax
4,968,124
4,776,832
Tax expense
19
(1,026,492)
(1,011,686)
Profit for the year
3,941,632
3,765,146
Earnings per share (euro cents)
21
6.99
6.68
The accompanying notes are an integral part of these financial statements.
TIGNÉ MALL p.l.c.
Annual Financial Report and Financial Statements - 31 December 2023
25
Statement of changes in equity
Share
Revaluation
Retained
Notes
capital
reserve
earnings
Total
€
€
€
€
Balance at 1 January 2022
27,766,888
19,275,233
9,712,571
56,754,692
Comprehensive income
Profit for the year
-
-
3,765,146
3,765,146
Total comprehensive income
-
-
3,765,146
3,765,146
Transactions with owners
Dividends paid to shareholders
25
-
-
(1,500,000)
(1,500,000)
Total transactions with owners
-
-
(1,500,000)
(1,500,000)
Other movements
Reclassification from revaluation
reserve to retained earnings
9
-
(247,196)
247,196
-
-
(247,196)
247,196
-
Balance as at 31 December
2022
27,766,888
19,028,037
12,224,913
59,019,838
Balance at 1 January 2023
27,766,888
19,028,037
12,224,913
59,019,838
Comprehensive income
Profit for the year
-
-
3,941,632
3,941,632
Total comprehensive income
-
-
3,941,632
3,941,632
Transactions with owners
Dividends paid to shareholders
25
-
-
(1,530,000)
(1,530,000)
Total transactions with owners
-
-
(1,530,000)
(1,530,000)
Other movements
Reclassification from revaluation
reserve to retained earnings
9
-
(247,206)
247,206
-
-
(247,206)
247,206
-
Balance as at 31 December 2023
27,766,888
18,780,831
14,883,751
61,431,470
The accompanying notes are an integral part of these financial statements.
TIGNÉ MALL p.l.c.
Annual Financial Report and Financial Statements - 31 December 2023
26
Statement of cash flows
Year ended 31 December
Notes
2023
2022
€
€
Cash flows from operating activities
Cash generated from operations
22
6,954,572
7,459,942
Interest paid
(261,609)
(328,065)
Interest received
7,156
2,165
Tax paid
(1,230,942)
(878,494)
Net cash generated from operations
5,469,177
6,255,548
Cash flows from investing activities
Purchase of property, plant and equipment
4
(1,128,412)
(1,605,571)
Additions to right-of-use assets
5
(794,849)
-
Net cash used in investing activities
(1,923,261)
(1,605,571)
Cash flows from financing activities
Dividends paid
25
(1,530,000)
(1,500,000)
Repayment of bank borrowings
11
(1,944,037)
(2,813,099)
Principal element of lease payments
12
(88,992)
(88,803)
Net cash used in financing activities
(3,563,029)
(4,401,902)
Net movement in cash and cash equivalents
(17,113)
248,075
Cash and cash equivalents at beginning of year
3,074,724
2,826,649
Cash and cash equivalents at end of year
7
3,057,611
3,074,724
The accompanying notes are an integral part of these financial statements.
TIGNÉ MALL p.l.c.
Annual Financial Report and Financial Statements - 31 December 2023
27
Notes to the financial statements
1.
Summary of material accounting policy information
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 2023, the Company’s current liabilities exceeded its current assets by €0.07
million million (2022: €0.9 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 2024 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 2023 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 2023
In 2023, the Company adopted amendments to existing standards that are mandatory for the
Company’s accounting period beginning on 1 January 2023.
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 2023
28
1.
Summary of material accounting policy information
- continued
1.1 Basis of preparation
- continued
The following amendments became applicable for the current reporting period.
Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting Policies
The amendments are intended to help preparers in deciding which accounting policies to disclose in
their financial statements. The term ‘significant’ was replaced with ‘material’ in the context of
disclosing accounting policy information. In assessing the materiality of the accounting policy
information, the Company considers the size of transactions, other events or conditions and their
nature.
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 2023. 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
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.
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.
TIGNÉ MALL p.l.c.
Annual Financial Report and Financial Statements - 31 December 2023
29
1.
Summary of material accounting policy information
- continued
1.3 Property, plant and equipment
- continued
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.
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.
TIGNÉ MALL p.l.c.
Annual Financial Report and Financial Statements - 31 December 2023
30
1.
Summary of material accounting policy information
- continued
1.4 Financial assets
1.4.1 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 (Note 1.5) and cash and
cash equivalents in the statement of financial position. 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 measured 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.
1.4.2 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.
1.4.3 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 2023
31
1.
Summary of material accounting policy information
- continued
1.4 Financial assets
- continued
1.4.3 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.
1.5 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 1.4.3.
1.6 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.
TIGNÉ MALL p.l.c.
Annual Financial Report and Financial Statements - 31 December 2023
32
1.
Summary of material accounting policy information
- continued
1.7 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.
1.8 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.
1.9 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 2023
33
1.
Summary of material accounting policy information
- continued
1.10 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.
1.11 Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of 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.
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 2023
34
1.
Summary of material accounting policy information
- continued
1.12 Leases
1.12.1 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 2023
35
1.
Summary of material accounting policy information
- continued
1.12 Leases
- continued
1.12.1 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.
1.12.2 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.
1.13 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 2023
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 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’ is not exposed to cash flow
interest rate risk. The Company’s operating cash flows are substantially independent of changes in
market interest rates.
(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 2023
37
2.
Financial risk management
- continued
2.1 Financial risk factors
- continued
As of 31 December 2023, 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 2024 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 €177,422 (2022: €400,040). 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.
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 2023
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 2022 and 2023, the Company had an unutilised banking facility for
the amount of €500,000.
As at 31 December 2023, the Company’s current liabilities exceeded its current assets by €0.07
million (2022: €0.9 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 2024.
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.
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 effected under lease
arrangements 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 2023
39
2.
Financial risk management
- continued
2.1 Financial risk factors
- continued
Total
Carrying
Less than
Between 1
Between 2
Over
contractual
amount
1 year
and 2 years
and 5 years
5 years
cash flows
€
€
€
€
€
€
31 December 2023
Borrowings
7,041,192
1,689,923
1,643,732
4,193,843
-
7,527,498
Lease liabilities
4,425,728
242,835
310,263
926,632
20,107,074
21,586,804
Other payables
612,849
98,056
134,647
403,941
49,746
686,390
12,079,769
2,030,814
2,088,642
5,524,416
20,156,820
29,800,692
Total
Carrying
Less than
Between 1
Between 2
Over
contractual
amount
1 year
and 2 years
and 5 years
5 years
cash flows
€
€
€
€
€
€
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
749,509
13,966,487
2,529,253
2,076,250
6,550,660
20,874,721
32,030,884
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 11.5% of the Company’s equity as at 31 December
2023 (2022: 15.2%).