annualreport - Malta Financial Services Authority · CHAIRMAN’S STATEMENT continued TRIDENT...

2017/18FOR THE YEAR ENDED 31 JANUARY 2018

annualreport

annual report

2. Chairman’s Statement

4. Directors, Board Committees and Senior Management

6. ChiefExecutiveOfficer’sReview

13. Financial Statements

14. Directors’Report

17. CorporateGovernanceStatement

23. RemunerationReport

25. IndependentAuditor’sReport

30. Statements of Financial Position

32. Income Statements

33. Statements of Changes in Equity

35. StatementsofCashFlows

36. Notes to the Consolidated Financial Statements

63. Shareholder Information

contents

TheBrewery,MdinaRoad,Mrieħel,Birkirkara,BKR3000,Malta


annualreport

TRIDENT ESTATES PLC ANNUAL REPORT 2017/182 CHAIRMAN’S STATEMENT

chairman’s statementITGIVESMEMUCHPLEASURETOPRESENTTOYOUMYFIRSTSTATEMENTASCHAIRMANOFTRIDENTESTATESPLC(“TRIDENT”)ASALISTEDCOMPANY.PLANSFORTHESPIN-OFFOFSIMONDSFARSONSCISKPLC’S(“FARSONS”)NON-BREWERYPROPERTYASSETSHAVEBEENINTHEMAKINGFORANUMBEROFYEARS.CLEARLYITHASBEENACOMPLEXPROCESSWHICHREQUIREDSIGNIFICANTLOGISTICALPREPARATION.THERELOCATIONOFANUMBEROFOPERATIONSATFARSONS,ASWELLASFINANCIALANDFISCALAUTHORITYAPPROVAL,OURBANKER’SAPPROVALAND,NOTLEAST,THECONSENTOFOURSHAREHOLDERS.

Thestrategyofspinningoffofpropertiesworth€33millionwasconceivedtoensurethatanynewdevelopmentoftheseassetsand,inparticular,theredevelopmentoftheold1950Mrieħelbrewerybuilding,wasundertakenbyaseparatelygovernedandfundedentity.ThiswillallowfordedicatedmanagementfocusandallowtheBoardtomaximiseonthebestpossiblereturnontheinvestmentsbeingmadethroughsecuringtherightblendofskillsandexpertiseforwhatisessentiallyaverydifferentbusinessaltogetherfromthatofthefoodandbeveragesectorinwhichtheFarsonsGroupoperates.

OurnewlyappointedChiefExecutiveOfficer(CEO),CharlesXuerebdetailsinhisCEO’sReviewthestepstakenbyyournewlyappointedBoardofDirectorsalongwiththeBoardofFarsonstocompletethespin-off,whichculminatedinthedistributionbyFarsonsofanin-kinddividendtoitsshareholdersamountingto€37.2millionon21December2017.Byvirtueofthisin-kinddistribution,Farsons’entireshareholdinginTridentwasdistributedtoshareholdersonapro ratabasis.TheTridentshareswereadmittedtotheOfficialListoftheMaltaStockExchangeon30January2018,andwiththis,theprocessfortheestablishmentofaseparatelyownedandlistedentitywascompleted.

TRIDENT ESTATES PLC ANNUAL REPORT 2017/18 3CHAIRMAN’S STATEMENT continued

CharlesXuerebhasbeenactivelyinvolvedinthetransactionsandapprovalprocesshavingheldthepositionofChiefFinancialOfficerofFarsonsforthepast12years.HeisthereforewellqualifiedandhasthebackgroundknowledgetoserveinhisappointmentasCEOofournewlylistedCompany.Histaskisnowtoconsolidatehiscompetenttechnicalteamwhichwillberesponsiblefortransformingthe1950brewerybuildingintoabusinessparktobeknownas‘TridentPark’.

Icanstatethatheissettingabouthistaskwithfocus,vigouranddetermination,and,ashereportsinhisreview,workontheprojecthascommencedandistargetedtobeopenforbusinesswithinthreeyears.

ThetaskofyourBoardofDirectorsistoensurethattheplanspublishedintheListingProspectusremainontarget,andthatTridentParkisdeliveredtospecification,ontimeandonbudget.TheTridentParkprojectisbudgetedtocostintheregionof€45million,andistobefinancedpartlythrough(alreadyarranged)bankfundingandpartlythroughatwo-stagesharecapitalrightsissuethatwilltakeplaceduringthelastquarterof2019andin2020.Ourgearingratioisforecasttobe35%atitspeak,aconservativeratioforadevelopmentofthisnature.Ourbusinessplanassumesthattheofficemarketwillremainbuoyant,althoughwedoexpectcompetitiontointensifygiventhenumberofnewdevelopmentscurrentlyunderwayorunderconsideration.Itisalwaysdifficulttoforecastmarketconditionsthreeyearsdownthelineandaccordingly,itissensibletohaveasoundfundingmodelinplace.

Asshareholderswillrecollect,duetounforeseencircumstances,wedidhaveadelayinthegrantingofourplanningpermitforTridentPark.Quiteunexpectedly,thePlanningAuthorityBoard indicated that, contrary to the Planning Directorate’s

recommendation,amajorityofBoardmemberswouldvoteagainstthegrantingofthepermit.Thisdecisionwasreversedandthepermitwasunanimouslyapprovedatthenextmeetingafterfurthertechnicalsubmissionsandrepresentationsweremade to the relevant authorities.

Tridenthasanumberofvaluableanddevelopablepropertiesinprimelocations.AnumberofthesepropertiesareleasedouttoFoodChainLimited(aFarsonsGroupsubsidiary)andotherstothirdparties.Inhisreview,theCEOpointsoutthestrategicvalueoftheTridentGrouppropertyinMarsaknownasTridentHouse,whichiscurrentlyhousingtheoperationsofQuintanoFoodsLimitedandtherestaurantsupportcentreofFoodChainLimited.YourBoardwillinduecoursebelookingattheavailableoptionsforthissizeablesiteinalocationthatisbecomingcommerciallymoreimportant.

ThefinancialresultsfortheTridentGrouphavebeenconsolidatedintheIncomeStatementoftheFarsonsGroupaccountsforthefinancialyearendedJanuary2018forthe

lasttime.InthisAnnualReportwereproducetheconsolidatedTridentGroupresultsseparatelyforthefirsttime.Ourtotalrevenuesfortheyearamountedto€796,000,administrationandothercostsamountedto€359,000resultinginanetprofitbeforetaxationof€437,000.OurbusinessplanfortheGroupindicatesthatgoingforward,thenextthreeyears’incomefromcurrentleaseswillrisemodestly,whereasadministrationcostswillremainsteady.CapitalexpenditurewillbuildupoverthenextthreeyearsastheTridentParkdevelopmentgatherspace.

YourBoardhasalreadyindicatedintheProspectusthatitintendstopayregulardividendsifcircumstancespermit,evenbeforeTridentParkisfullyoperational.However,giventhatthespin-offandlistingtookplaceonlyafewmonthsago,norecommendationisbeingmadeforthepaymentofadividendattheforthcomingAnnualGeneralMeeting.

TheBoardofDirectorsofTridentiscomposedoftwomembersfromeachofthethreemainshareholdinggroupsandtwodirectorsrepresentingthepublicshareholders.Eachofthemainshareholdinggroupshaveproposedtheirdirectorswhohavebeendulyappointed.Companylawstipulatesthatwhereveravacancyarisesatboardlevelduringtheyear,theBoardofDirectorsdulyappointsapersontofillsuchavacancy.YourBoardappointedMrRoderickChalmersandMrCharlesBorgasDirectorsinSeptember2017andMarch2018respectively.WeareindeedprivilegedtohavetwogentlemenoftheirexperienceandcalibrejoinourBoardandwethankthemforacceptingdirectorshipatthiscrucial time.

AlthoughtoaverylargeextentFarsonsandTridenthavecommonshareholders,theyarenowseparateanddistinctgroupsthatarerunindependently.Clearly,anyongoingbusinessbetweentheGroupsneedstobeconductedonanarm’slengthbasisand,asChairmanofbothentities,youhavemyassurancethatpropergovernancesafeguardshavebeenputinplace.

WelookforwardtoasuccessfulcompletionofTridentParkandmanyyearsofsuccessfortheTridentGroupand itsstakeholders.

IwishtothankmyBoardcolleaguesfortheirsupportandcontributionduringthisverybusyyear.MysincerethanksalsogoestoCharlesXuerebwhoworkstirelesslytoensurethatTridentmovesaheadseamlessly,alongwithChiefOperationsOfficer,ChristopherCiantarandthetechnicalteam.Also,awordofthanksisduetoourlegaladvisorsMamoTCV,ourauditorsPricewaterhouseCoopersandourfinancialintermediaryRizzoFarrugiafortheircontinued valid advice.

TRIDENT ESTATES PLC ANNUAL REPORT 2017/184DIRECTORS, BOARD COMMITTEES, GROUP

EXECUTIVES & SENIOR MANAGEMENT

DIRECTORS

LouisA.Farrugia1

CHAIRMAN

VincentCurmi2

VICE CHAIRMAN

AlbertoMiceliFarrugia3

ProfAvv.AlbertoStagnod’Alcontres4

(APPOINTED 07/09/2017)

Charles Borg5


CharlesXuereb(RESIGNED 07/09/2017)

MarcantonioStagnod’Alcontres(RESIGNED 07/09/2017)

MarquisMarcusJohnSciclunaMarshall6

DrMaxGanado(APPOINTED 07/09/2017 AND RESIGNED 22/02/2018)

Michael Farrugia7


Paul Micallef

(RESIGNED 07/09/2017)

RobertFarrugia(RESIGNED 07/09/2017)

RoderickChalmers8(APPOINTED 07/09/2017)

KennethC.Pullicino9COMPANY SECRETARY

directors,board committees andsenior management

1 2 3 4

TRIDENT ESTATES PLC ANNUAL REPORT 2017/18 5DIRECTORS, BOARD COMMITTEES, GROUP EXECUTIVES & SENIOR MANAGEMENT continued

SENIORMANAGEMENT

CharlesXuerebCHIEF EXECUTIVE OFFICER

DrIng.ChristopherCiantarCHIEF OPERATIONS OFFICER

AndreaMangionFINANCIAL CONTROLLER

AUDITCOMMITTEE

RoderickChalmersCHAIRMAN

Charles Borg


VincentCurmi

AlbertoMiceliFarrugia(APPOINTED 22/02/2018)

ProfAvv.AlbertoStagnod’Alcontres(RESIGNED 22/02/2018)

RELATEDPARTYTRANSACTIONSCOMMITTEE

VincentCurmiCHAIRMAN

Charles Borg


AlbertoMiceliFarrugia

REMUNERATIONANDNOMINATIONCOMMITTEE

LouisA.FarrugiaCHAIRMAN

AlbertoMiceliFarrugia(RESIGNED 23/05/2018)

DrMaxGanado(RESIGNED 22/02/2018)

MarquisMarcusJohnSciclunaMarshall

ProfAvv.AlbertoStagnod’Alcontres(APPOINTED 23/05/2018)

5 6 7 8 9

TRIDENT ESTATES PLC ANNUAL REPORT 2017/186 CHIEF EXECUTIVE OFFICER’S REVIEW

chief executive officer’s review

Thestrategytospin-offthepropertyinterestsofSimondsFarsonsCiskplc(“SFC”)wasconceivedanumberofyearsago,andhasnowculminatedintheofficiallistingoftheordinarysharesoftheCompanyontheMaltaStockExchange.Tridentisnowoperatingasafullyindependententity,andisbeingequippedandresourcedtoenableittoclearlyfocusonmaximisingthevalueofitspropertyportfolio.

Restructuring and Spin-offInOctober2017,theDirectorsapprovedanincreaseinsharecapitalofTridentto30millionshareswithanominalvalueeachof€1.Theincreasewasimplementedasfollows:

a) There-designationoftheissuedsharecapitalbysub-dividing the then existing 20,630 ordinary shares from

anominalvalueof€232.937339eachinto4,805,498ordinaryshareshavinganominalvalueof€1each, allfullypaid-up;

b) Issuingof25,194,502newsharesofanominalvalueof€1each,allfullypaid-upandallottedinfavourofSFCbywayof(a)anissueforcashintheamountof€6,500,000,(b)thecapitalisationofanamountof€6,502,447duebyTridenttoSFC,and(c)thecapitalisationofafurther€12,192,055outofreserves.

Subsequenttothisrestructuring,on20December2017,the SFC Board declared an interim dividend amounting to

€37.2milliontobesettled‘inkind’,throughthedistributionofSFC’sentireshareholdinginTridentEstatesplctoSFC’sshareholders pro ratatothenumberofsharesheldbythe latter in SFC. The declaration of the interim dividend

followedtheapprovalbySFCshareholders,duringtheAnnualGeneralMeetingheldinJune2017,forthespin-offof SFC’s shareholding in Trident. Share transfer agreements

weremailedtoeachshareholder,whichqualifiedtheSFCshareholdertobecomeashareholderofTridentoncethe

DURINGTHELASTFINANCIALYEAR,ASERIESOFKEYMILESTONESWEREACHIEVED ONTHERESTRUCTURINGEXERCISEOFTRIDENTESTATESPLC“TRIDENT”ORTHE“COMPANY”,PREVIOUSLYKNOWNAS‘TRIDENTDEVELOPMENTSLIMITED’.

TRIDENT ESTATES PLC ANNUAL REPORT 2017/18 7CHIEF EXECUTIVE OFFICER’S REVIEW continued

saidagreementwasformallyendorsed.Anysharesthatwerenottransferred,giventhattherespectivesharetransferagreementswerenotreceivedbySFC,weresettledintrustwithAlterDomusTrusteeServices(Malta)Limited.Theseshareswillbetransferredtotherespectiveshareholdersuponcompletionoftherequireddocumentation.

AProspectus,preparedinconformitywiththerequirementsoftheMalteseCompaniesAct,(Cap.386)theFinancialMarketsActandtheListingRules,wasapprovedbytheListingAuthorityandpublishedon18December2017,thusauthorising the admission to listing of the Trident shares

ontheMaltaStockExchange.On30January2018TridentEstatesplcwasofficiallylistedontheExchangeandtradingcommencedonthefollowingday.

New Lease agreements with Food Chain LimitedEffective1February2017,newleaseagreementsrelatingtothepropertiesleasedtoandoperatedbySFC’ssubsidiarieswererenegotiated.

Initially,mostoftheTridentGroup’srevenueisexpectedtobegeneratedfrompropertiesleasedouttoSFCentities.ThisdependenceonSFCisexpectedtodiminishgraduallyovertimeasnewsourcesofrevenuearegeneratedthroughourplanneddevelopmentprojects.

InvestmentsTheprincipalinvestmentthattookplaceduringtheyearwastheacquisitionbyTridentParkLimited(asubsidiaryofTrident)oftheFarsonsBreweryfaçade,consistingofalandareaofapproximately14,700squaremeters.Anothertwoassetsweredivested,namelyasiteofcirca7,000squaremetersinTal-ĦandaqbySliemaFortCompanyLimited,andthetemporaryutiledominiumofablockofbuildingsinQormi.

Tridentalsoenteredintopromiseofsaleagreementstoacquiretheremaining50%shareholdinginSliemaFortCompanyLimitedandtoacquiretheutile dominium of

Fresco’sfromFoodChainLimited.TheformalsharetransfertogetherwiththeacquisitionofFresco’sare,inter alia,subjecttotheapprovalbytheCommissionerofLands.

Planning Permission for Trident ParkInMay2015,anapplicationforafulldevelopmentpermitofTridentParkwassubmittedtothePlanningAuthority(“PA”).Anunexpecteddelaywasencounteredwhen,inNovember2017,themajorityofthePAboardmembersindicatedtheirintentiontorejecttherecommendationmadebythePlanningDirectoratetograntthepermit.InviewofthesignificantuncertaintycausedbythisindicativedecisionofthePA,theSFCBoardplacedintoabeyancetheplantospin-offtheshareholdingbySFCinTridentandthesubsequentlistingofthesharesontheMaltaStockExchange.

However,followingfurthertechnicalsubmissionsandrepresentationsmadetothePlanningAuthority,unanimousapprovalwasgrantedbytheBoardoftheAuthorityon 7December2017.

The Trident Park ProjectKnownastheFarsons’breweryandpreviouslyhousingthebreweryandbottlingoperationsofSFC,TridentParkwillinvolvetheredevelopmentoftheiconic1950BrewerysiteintoastateoftheartofficecomplexthatwillclearlyestablishtheidentityofthenewCentralBusinessDistrict.

ItisfittingtoacknowledgethestrategicaspirationsoftheSFCBoard.Overanumberofyears,significantinvestmentsawtheBrewery’sproductionfacilitiesshiftgraduallytothesouthpartoftheMriehelsite.Thisshiftreleasedasignificantareaoflandinaprimesiteforcommercialdevelopmentinlinewiththenew‘commercial’zoningstatusofthisarea.Theconceptofabusinessparkwasformulatedovertime,anddrewontheoutcomeofvisitstoanumberofEuropeancountriesbytheGroup’sdirectorsandmanagementtoanalyseindustrialpropertyrehabilitationmodelsofthisnature.

Thedevelopmentwillconsistofsevenstate-of-theartlow-risebuildingsdesignedbyinternationallyrenownedBritishfirmIanRitchieArchitectsassistedbytheMaltesearchitecturalfirmTBAPeriti,withextensivelandscapedcourtyard gardens and direct access to outdoor circulation

spaceateachfloorlevel.Thedevelopmentoptimizesnaturallightingandventilation,minimisingthecarbonfootprintwhileprovidinganefficientandcontemporaryworkingatmosphere.Greatattentionisbeingdirectedtothestandardsofconstructionandtheefficiencyofthesystemstominimiseresourceconsumption.Thewholeambienceisdesignedtoberelaxedandthedevelopmentisrestrained,thusmaintainingthe integrity of the unique aesthetic quality of the structures

andthesurroundingbuiltenvironment.

TheTridentParkdevelopmentwillbealandmarkdevelopmentfollowingbestpracticesintermsofenvironmentallysustainabledesignandisaimingforBREEAMexcellentcertifications.Whileretainingtheoriginalandvisuallystrikingart-decoheritagefaçadeandtheprestigiousentranceandboardroominthecentreofthebuilding,thenewofficebuildingswillhaveaspaciousinterior,offeringmodernfacilitieswhichmeetthestrictestenvironmentalcodesandstandards.

Thedesignoftheofficeblocksutilisestheprincipleofathermallyactivatedbuildingsystem(knownasTABS)whichreliesonacombinationofventilation,deliveredusingaraisedfloorasaplenum,dehumidifiedfreshairsupply,andcooledceilings,thusprovidingauniquelylow-energysourceoflocalcooling.Indoortemperatureswillbecontrolledaccordingtotheestablishedadaptivecomfortapproachandchangeofseasons.Thisapproachrespondsbothtothephysiologicalandclothingadjustmentsthatwemakeinresponsetoseasonalchangesandallowsconsiderablesavingsinoperationalenergytobeachieved,whilstdeliveringaverycomfortableoverallexperienceforoccupants.

TRIDENT ESTATES PLC ANNUAL REPORT 2017/188 CHIEF EXECUTIVE OFFICER’S REVIEW continued


Eachfloorwillprovideanuninterruptedofficefloorreceivingnaturallightandairfromtheadjoininggardensateitherside.TheParkwillbeflankedbytheiconicSFCBrewhouse,apropertyownedbySFC,whichwillbeconvertedandrehabilitatedintoaunique,mixed-usedevelopmentofferingaVisitorCentreattractionwithasupportingrangeoffood,beverageandotherretailoutletsthatwillprovideasuperbsociallifestylefortenantsandvisitorsofTridentPark.

Office space demandUnlikemostotherEUcountries,thereislimitedpubliclyavailableinformationonthecommercialrealestatemarketinMalta.Incognisanceofthelackofreliablemarketdata,wecommissionedofficemarketstudiestobetterunderstandsupplyanddemandpatternsinthelocalmarket.Currently,theMalteseofficerentalmarketisbuoyant,withsignificantupwardrateandpricemovementsobservedoverrecentyears.Moreover,thereareasignificantnumberofnewdevelopmentprojectsinthepipeline.

Demandforofficespaceisdependentonvariousmacroand micro economic factors affecting the Maltese economy.

Malta’srealGDPgrowthratehasexceededtheEU-28averagegrowthoverthelast10-yearperiod.Thesuccessofourrealestatemarket,particularlythecommercialsector,isdependentonMalta’sabilitytocontinuetoattractForeignDirectInvestment(FDI).TheFDIstockpositionhasincreasedovertheyears,withasignificantproportionbeingattributabletofinancialandinsuranceactivities,bothservicesectorsthatrequirequalityofficespace.

ForeigninvestorenterpriseswillundoubtedlybeatargetmarketforTrident.However,wewillalsoseekadiversifiedmixoftenants,andthelocalmarketwillalsofeatureprominently.Inthecurrentlabourmarketconditionsattractingand,moreimportantly,retainingemployeesisbecomingevermorechallenging.Itistobeexpectedthatlocalcompanieswill seektoupgradethequalityoftheirworkspaceenvironment inanefforttoofferabetteroverallworkingexperiencetotheiremployees.

Employeewell-beingisstronglycorrelatedtoemployeeproductivityandperformance.Employeeswhoenjoytheirworkenvironmentsarefarmorelikelytobemoreengaged,productive,happyandhealthy.Ourvisionistoprovideaworkingenvironmentthatissecondtonone.Wehaveallocatedlargeareas,thatcouldotherwisehaveofferedfurtherworkspaces,tobeusedascourtyards/gardensandlandscaping,withageneraldevelopmentapproachthatgavemoreweighttoqualityratherthanquantity.WebelievethatthefacilitiesandthegreenerythatwillenhancethesurroundingworkingspaceswillgiveTridentParkacompetitiveedgeinattractingbusinessesthatareseekingquality and uniqueness.

TRIDENT ESTATES PLC ANNUAL REPORT 2017/1810 CHIEF EXECUTIVE OFFICER’S REVIEW continued

“FOREIGNCOMPANIESWILLUNDOUBTEDLYBEATARGETMARKET.YETASWESEEKDIVERSIFICATIONOFTHEMIXOFTENANTS,THELOCALMARKETWILLALSOFEATUREPROMINENTLY.ITISAFACTTHATRECRUITING,ANDMOREIMPORTANTLY,RETAININGEMPLOYEESISBECOMINGEVERMORECHALLENGING.HENCEITISNATURALLYEXPECTEDTHATLOCALCOMPANIESWOULDSEEKTOUPGRADETHEIRWORKSPACESTOOFFERABETTERWORKINGENVIRONMENTTOTHEIREMPLOYEES.”


Works on the Trident Park projectWorksonthedismantlingandclearingofthesiteisnowcomplete,andthecivilworkspackagehasbeenawardedtoC&FBuildingContractorsLimitedwhotookpossessionofthesiteinApril2018.Demolitionandexcavationareunderway,withconstructionenvisagedtocommenceduringthelastquarterofthisyear.Concurrently,theprocurementprocessfortheworkspackageonmechanicalandelectricalservicesandplantisexpectedtobeawardedduringthelastquarterof2018.Thefinishespackageisalsobeingdraftedandisexpectedtobepublishedbytheendoftheyear.

FundingThedevelopmentofTridentParkisbeingfundedthroughanappropriatemixofownfunds,debtandequityfinancing.Thedebtfinancingintheformofbankloanfacilitiesarealreadyinplace.Atthesametime,thethreeprincipalshareholdergroupshavealsosignedanundertakingagreementtotakeuptheirproportionateshareofatwo-stage€15millionrightsissuethatisplannedfor2019/2020andwhichwillpart-financethedevelopmentofTridentPark.

Trident HouseTridentHouseinMarsaisanotherpropertythattheBoardbelievesofferssignificantdevelopmentpotential.TheSFCGroup’sfoodimportationarmandtheheadofficeofthefranchisedfoodsbusinesscurrentlyoccupiesapproximatelyhalfofthefootprintofthissite,withtheremainingpartofthe

footprintcurrentlyvacant.Althoughadetailedstudyonthepotentialdevelopmentofthissitehasyettobeundertaken,itisevidentthatmuchdevelopmentistakingplaceinthisneighbourhood.

Scotsman Pub TheleaseofScotsmanPubexpiredinApril2018,andanewtenanttookoverthepropertyforaleaseperiodof10years.Someworksarebeingcarriedoutandthepremisesisscheduledtobereopenedwellintimeforthesummertrade.

Corporate Identity TheGroup’sCorporateidentityhasbeenbroughtinlinewithacontemporarybusinesslookandprovidesafreshandconfidentGroupidentity.Whilstbeingforward-lookingandcontemporaryinstyle,thenewidentitydrawsondifferentelementsthatprojectsanunparalleledhigh-qualityapproachtoourbusiness.

TRIDENT ESTATES PLC ANNUAL REPORT 2017/1812

financialstatementsConclusionTridentisnowwellplacedtoleverageitspropertyportfolioandtograduallyestablishitselfasaleadingdeveloperandproviderofhighqualitycommercialspace.Thecurrentportfolioofpropertiesoffersadiversifiedmixofredevelopmentopportunitiesthatareexpectedtoyieldlong–termcapitalgrowth,togetherwithmaturepropertiesthatareexpectedtoprovideanongoingrentalincomestream.Thismixwillprovidetheappropriateplatformforimplementingour strategic vision.

Themanyaccomplishmentsachievedoverthelastyearwouldnothavebeenpossiblewithouttheunwaveringdedicationofourteamandthatofourbusinesspartners.Inparticular, IwouldliketoextendmygratitudetoourBoardofDirectors,

ablychairedbyLouisFarrugia,fortheircontinuedguidance,andtoallmyteamforthestrongsupportthroughouttheyear.AwordofthanksisalsoduetotheFarsonsteam,ledbytheGroupChiefExecutiveNormanAquilina,fortheirsupportinsecuringthesmoothtransitionofseparatingTridentfromSFC,toourlegaladvisors,MamoTCV,ouradvisorsandauditorsPricewaterhouseCoopers,andourfinancialintermediaryRizzoFarrugia.

Weareconfidentthatwewillrisetothechallengesthatawaitus, and are determined to hold service excellence as one of

the core values that guide our endeavours. Our focus remains

setondeliveringaprestigious,efficientanddistinctiveprojectthatwillensuremaximumshareholderreturns.

CHIEF EXECUTIVE OFFICER’S REVIEW continued

Ian Ritchie Architects – The design team behind Trident Park.First trading session on the MSE – 31 January 2018.

Trident Park Project Team

financialstatementsANNUAL REPORT

2017/18

FOR THE YEAR ENDED 31 JANUARY 2018

TRIDENT ESTATES PLC ANNUAL REPORT 2017/1814 FINANCIAL STATEMENTS

directors’ reportTheDirectorspresenttheirreportandtheauditedconsolidatedfinancialstatementsfortheyearended 31January2018.

Principal activities TheCompanyisapropertyinvestmentcompanythatownsandmanages,directlyorindirectlythroughsubsidiarycompanies,propertyforrentalandinvestmentpurposes.Asnotedbelow,witheffectfromfinancialyear2019,theGroupwillalsobeinvolvedinundertakingthemajorTridentParkdevelopmentproject.

Review of the business

TRADING PERFORMANCE TheBoardofDirectorsispleasedtoannouncetheTridentGroup’s(hereinafter“Trident”)financialresultsfortheyearended31January2018.

Tridentgeneratedaprofitbeforetaxof€437,000,comparedtoaprofitbeforetaxof€5,081,000registeredduringthepreviousyear.Fairvaluegainsof€165,000recordedinthecurrentyearunderreviewweresignificantlylowerthantheincreaseinthefairvalueofinvestmentpropertyheldbytheGroupamountingto€4,667,000includedintheaccountsfortheyearended31January2017.Revenuesfromrentalincomeincreasedby9.5%andstoodat€796,000(2017:€727,000)followingtherenegotiationoftheleaseagreementswithFoodChainLimitedeffective1February2017.Goingforward,revenuesareexpectedtoincreasefollowingtheacquisitionofthecontrolovertheremaining50%ofthesharecapitalofSliemaFortCompanyLimited.Administrativeexpenses,primarilyrelatingtopayrollcosts,increasedcomparedtolastyeartoreflecttheneworganisationalsetupoftheGroup.

In2014theboardofSimondsFarsonsCiskplc(hereinafter“SFC”)confirmeditsintenttohiveoffthepropertyinterestsfromtheotherbusinessactivities,andeventuallyspin-offthissegmentintoaseparateanddistinctpubliccompany.Therestructuringprocesswascompletedduring2017afterSFC’sshareholdersapprovedthespin-offofTridentEstatesplcduringtheAnnualGeneralMeetingheldinJune2017.TheentireshareholdingheldbySFCinTridentwastransferredtoSFC’sshareholdersasaninterimdividendsettled‘inkind’proratatothenumberofsharesheldon21December2017.

FollowingtheapprovaloftheProspectusbytheListingAuthorityandpublishedon18December2017,anapplicationwasmadetotheListingAuthorityandtheMaltaStockExchangeforadmissionoftheCompany’sordinaryshares(the“Shares”)tolistingontheMaltaStockExchange.TheSharesweresubsequentlylistedontheMaltaStockExchangeon30January2018andtradingcommencedonthefollowingday.

INVESTMENTS AND PROPERTY INTERESTSTheprincipalhighlightoftheyearwastheacquisitionoftheFarsonsBreweryfaçade.On7December2017,theboardofthePlanningAuthorityunanimouslyapprovedthepermitforthecreationofabusinessparkalongMdinaRoad,MriehelconsistingofInternationalGradeAofficeswithlandscapedcourtyards,anaturallyventilatedmulti-levelcarparkforapproximately700cars,conferencefacilitiesandagymnasium,whichwillbeknownasTridentPark.This€45milliondevelopmentprojectwillseektoincludethetransformationofalistedindustrialbuildingwhilefollowingbestpracticeintermsofenvironmentallysustainabledesignandaimingforBREEAMexcellentcertifications.Thedesignhasbeencraftedtoproduceanarchitecturethatcomplementsandenhancesthescheduledporticoaswellasthememoryoftheindustrialheritageandwillprovidehighqualitycontemporaryworkspaces.Thecivilworkscontracthasbeenawardedanddevelopmentworkscommenced.Theprojectisscheduledtobecompletedwithin3years.

TheCompany’sthreeprincipalshareholdergroupshavesignedanundertakingagreementtotakeuptheirproportionalshareofatwo-stagerightsissueof€15millionplannedfor2019/2020,whichwillpart-financethedevelopmentalongwithbankfundingthathasbeensecured.

TridentalsodivesteditselfofonepropertyandenteredintopromiseofsaleagreementstoacquiretheremainingshareholdinginSliemaFortCompanyLimitedandtheutile

dominiumofapropertyfromFoodChainLimited.

INFLUENCING FACTORS AND PERFORMANCETheleaseagreementswithFoodChainLimited(arelatedpartyformingpartoftheSFCGroup)wererenegotiatedandrenewedonanarm’slengthbasis.Theagreementsregulatetermstypicalofleasearrangementssuchasdurationofthelease,useofpremises,improvementsandalterations,andrentpayable.

OUTLOOK FOR FINANCIAL YEAR ENDING 31 JANUARY 2019ThedevelopmentoftheTridentParkprojectwillbeTrident’sprincipalfocus.ThecivilworkscontracthasbeenawardedandsoftstrippingofthepremiseswascompletedinApril2018.Demolitionandexcavationworkshavecommenced.Theprocurementprocessfortheworkspackageonmechanicalandelectricalservicesandplantisexpectedtobeawardedshortly.

TRIDENT ESTATES PLC ANNUAL REPORT 2017/18FINANCIAL STATEMENTS continued 15

DIRECTOR’S REPORT continued

Financial risk managementTheGroup’sandCompany’sactivitiesexposeittoavarietyoffinancialrisks,includingmarketrisk(includingfairvalueandcashflowinterestraterisk),creditriskandliquidityrisk.RefertoNote2inthesefinancialstatements.

Property value risk and exposure to general market conditionsPropertyvalues,includingthehealthofthecommercialpropertyrentalmarket,areaffectedbychangingdemand,changesingeneraleconomicconditions,changingsupplywithinaparticularareaofcompetingspaceandattractivenessof real estate relative to other investment choices. Other

factorssuchaschangesinplanningandtaxlaws,andinterestandinflationratefluctuationswouldalsohaveanimpactoncapitalvaluesandincomestreamsofproperties.TheCompanymonitorsallthesefactors,andseeksadviceaccordingly,asitmanagesitspropertyportfolio.

Dividends and reservesTheincomestatementsaresetoutonpage32.

TheBoarddidnotdeclareaninterimdividendandwillnotberecommendingthepaymentofafinaldividend.

Retainedprofitscarriedforwardatthereportingdateamountedto€4.8million(2017:€4.7million)fortheGroupand€4.6million(2017:€4.7million)fortheCompany.

DirectorsTheDirectorswhoheldofficeduringtheyearwere:

LouisA.Farrugia–ChairmanVincentCurmi–ViceChairmanAlbertoMiceliFarrugiaProfAvv.AlbertoStagnod’Alcontres(appointed on 7 September 2017)

Charles Borg (appointed on 22 February 2018)

CharlesXuereb(resigned on 7 September 2017)

MarcantonioStagnod’Alcontres(resigned on 7 September 2017)

MarquisMarcusJohnSciclunaMarshallDrMaxGanado(appointed on 7 September 2017 and resigned on

22 February 2018)

Michael Farrugia (appointed on 7 September 2017)

Paul Micallef (resigned on 7 September 2017)

RobertFarrugia(resigned on 7 September 2017)

RoderickChalmers(appointed on 7 September 2017)

Statement of Directors’ responsibilities for the financial statementsTheDirectorsarerequiredbytheMalteseCompaniesAct,(Cap.386)topreparefinancialstatementswhichgiveatrueandfairviewofthestateofaffairsoftheGroupandtheParentCompanyasattheendofeachreportingperiodandoftheprofitorlossforthatperiod.

Inpreparingthefinancialstatements,theDirectorsareresponsiblefor:

• ensuringthatthefinancialstatementshavebeendrawnupinaccordancewithInternationalFinancialReportingStandardsasadoptedbytheEU;

• selectingandapplyingappropriateaccountingpolicies;• makingaccountingestimatesthatarereasonablein thecircumstances;

• ensuringthatthefinancialstatementsarepreparedonthegoingconcernbasisunlessitisinappropriatetopresumethattheGroupandtheParentCompanywillcontinueinbusinessasagoingconcern.

TheDirectorsarealsoresponsiblefordesigning,implementingandmaintaininginternalcontrolasnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror,andthatcomplywiththeMalteseCompaniesAct,(Cap.386).TheyarealsoresponsibleforsafeguardingtheassetsoftheGroupandtheParentCompanyandhencefortakingreasonablestepsforthepreventionand detection of fraud and other irregularities.

ThefinancialstatementsofTridentEstatesplcfortheyearended31January2018areincludedintheAnnualReport2018,whichispublishedinhard-copyprintedformandisavailableontheParentCompany’swebsite.TheDirectorsareresponsibleforthemaintenanceandintegrityoftheAnnualReportonthewebsiteinviewoftheirresponsibilityforthecontrolsover,andthesecurityof,thewebsite.AccesstoinformationpublishedontheParentCompany’swebsiteisavailableinothercountriesandjurisdictions,wherelegislationgoverningthepreparationanddisseminationoffinancialstatementsmaydifferfromrequirementsorpracticeinMalta.

TheDirectorsconfirmthat,tothebestoftheirknowledge:

• thefinancialstatementsgiveatrueandfairviewofthefinancialpositionoftheGroupandtheParentCompanyasat31January2018,andofthefinancialperformanceandthecashflowsfortheyearthenendedinaccordancewithInternationalFinancialReportingStandardsasadoptedbytheEU;and

• theAnnualReportincludesafairreviewofthedevelopmentandperformanceofthebusinessandthepositionoftheGroupandtheParentCompany,togetherwithadescriptionoftheprincipalrisksanduncertaintiesthattheGroupandtheParentCompanyface.

Going concern basisAftermakingenquiries,theDirectors,atthetimeofapprovingthefinancialstatements,havedeterminedthatthereisreasonableexpectationthattheGroupandtheParentCompanyhaveadequateresourcestocontinueoperating fortheforeseeablefuture.Forthisreason,theDirectors haveadoptedthegoingconcernbasisinpreparingthefinancialstatements.

TRIDENT ESTATES PLC ANNUAL REPORT 2017/18 FINANCIAL STATEMENTS continued16

DIRECTOR’S REPORT continued

Shareholder register information pursuant to Listing Rule 5.64SharecapitalinformationoftheCompanyisdisclosedinNote11ofthefinancialstatementsonpages51and52.

Theissuedsharecapitalconsistsofoneclassofordinaryshareswithequalvotingrightsattachedandfreelytransferable.

Thelistofshareholdersholdingfivepercent(5%)ormoreoftheequitysharecapitalisdisclosedinthisannualreport.

Everyshareholderowningtwelvepercent(12%)oftheordinaryissuedsharecapitaloftheCompanyormoreshallbeentitledtoappointonedirectorforeachandeverytwelvepercent(12%)oftheordinarysharecapitalownedbysuchshareholderandsuchshareholdermayremove,withdraworreplacesuchdirectoratanytime.Anyappointment,removal,withdrawalorreplacementofadirectortoorfromtheBoardofDirectorsshalltakeeffectuponreceiptbytheBoardofDirectorsortheCompanySecretaryofanoticeinwritingtothateffectfromtheshareholderowningtwelvepercent(12%)oftheordinaryissuedsharecapitaloftheCompanyormore.AnyremainingfractionswillbedisregardedintheappointmentofthesaiddirectorsbutmaybeusedintheelectionoffurtherdirectorsatanAnnualGeneralMeeting.TheChairmanisappointedbytheDirectorsfromamongsttheDirectorsappointedorelectedtotheBoard.

Therulesgoverningtheappointment,electionorremovalofdirectorsarecontainedintheCompany’sArticlesofAssociation,Articles93to101.AnextraordinaryresolutionapprovedbytheshareholdersinthegeneralmeetingisrequiredtoamendtheArticlesofAssociation.

ThepowersanddutiesofdirectorsareoutlinedinArticles84to91oftheCompany’sArticlesofAssociation.IntermsofArticle12ofthesaidArticlesofAssociation,theCompanymay,subjecttotheprovisionsoftheMalteseCompaniesAct,(Cap.386)acquireorholdanyofitsshares.

TheCompanydoesnothaveaCollectiveAgreementregulating redundancies, early retirement, resignation or

terminationofemploymentofemployees.NoemploymentcontractsareinplacebetweentheCompanyanditsdirectors,exceptasdisclosedintheRemunerationReport.

Itisherebydeclaredthat,asat31January2018,theCompanyisnotpartytoanysignificantagreementpursuanttoListingRules5.64.10.

Furthermore, the Board declares that the information

requiredunderListingRules5.64.5and5.64.7isnotapplicabletotheCompany.

AuditorsTheauditors,PricewaterhouseCoopers,haveindicatedtheirwillingnesstocontinueinoffice,andaresolutionfortheir re-appointmentwillbeproposedattheAnnualGeneralMeeting.

By order of the Board

Louis A. Farrugia Vincent CurmiChairman Vice Chairman

Registeredaddress:

TheBreweryMdinaRoadMrieħelBKR3000Malta

Telephone(+356)23814293Kenneth C. Pullicino Company Secretary

23May2018

corporate governance statement


A. Introduction ThisstatementisbeingmadebyTridentEstatesplc(“TE”)pursuanttoListingRules5.94and5.97issuedbytheListingAuthorityoftheMaltaFinancialServicesAuthorityandsetsoutthemeasurestakentoensurecompliancewiththeCodeofPrinciplesofGoodCorporateGovernance(“theCode”)containedinAppendix5.1toChapter5ofthesaidrules.IntermsofListingRule5.94,TEisobligedtoprepareareportexplaininghowithascompliedwiththeCode.Duringtheaccountingperiodunderreview,TEwasafullyownedsubsidiaryofSimondsFarsonsCiskplc,alistedentityontheMaltaStockExchangeandthereforedirectlysubjecttotheCodeduringtheyear.TEwasadmittedtotheMaltaStockExchangeon30January2018.ForthepurposesoftheListingRules,TEisherebyreportingontheextentthatitintendstoadopttheCodegoingforward.

TEacknowledgesthattheCodedoesnotprescribemandatoryrulesbutrecommendsprinciplessoastoprovideproperincentivesfortheBoardofDirectorsandTE’smanagementtopursueobjectivesthatareintheinterestsoftheCompanyanditsshareholders.TEadheredtogenerallyacceptedstandardsofgoodcorporategovernanceencompassingtherequirementsfortransparency,properaccountabilityandthefairtreatmentofshareholders.TheBoard of Directors has therefore endorsed the Code of

Principlesandadoptedit.

Asdemonstratedbytheinformationsetoutinthisstatement,togetherwiththeinformationcontainedintheRemunerationReport,TEbelievesthatithas,saveasindicatedinthesectionentitledNon-compliancewiththeCode,appliedtheprinciplesincompliancewiththeprovisionsoftheCode.IntheNon-compliancesection,theBoardindicatesandexplainstheinstanceswhereithasdepartedfromorwhereithasnotappliedtheCode,asallowedbytheCode.

B. Compliance with the Code

PRINCIPLE 1: THE BOARD TheBoard’sroleandresponsibilityistoprovidethenecessaryleadership,tosetstrategyandtoexercisegoodoversightandstewardship.IntermsoftheMemorandumofAssociationofTE,theaffairsoftheCompanyaremanagedandadministeredbyaboardcomposedofeightdirectors.

TheBoardisinregularcontactwiththeChiefExecutiveOfficerthroughtheChairmaninordertoensurethattheBoardisinreceiptoftimelyandappropriateinformationinrelationtothebusinessofTEandmanagementperformance.ThisenablestheBoardtocontributeeffectivelytothedecisionmakingprocess,whilstatthesametimeexercisingprudentandeffectivecontrols.

Priortoeachmeeting,theDirectorsareprovidedwiththenecessaryinformationandexplanatorydataasmayberequiredbytheparticularitemontheagenda.Comprehensivefinancialstatementsarealsoprovidedasnecessary.TheCompanyusestheservicesofexternallegaladvisors.TheDirectorsareentitledtoseekindependentprofessionaladviceatanytimeattheCompany’sexpense,wherenecessary,fortheproperperformanceoftheirdutiesandresponsibilities.

TheBoarddelegatesspecificresponsibilitiestoanumberofcommittees,notablytheRelatedPartyTransactionsCommittee,theAuditCommitteeandtheRemunerationandNominationCommittee,eachofwhichoperatesunderformaltermsofreferenceapprovedbytheBoard.FurtherdetailinrelationtothecommitteesandtheresponsibilitiesoftheBoardisfoundinPrinciples4and5ofthisstatement.

PRINCIPLE 2: CHAIRMAN AND CHIEF EXECUTIVE OFFICERThestatuteofTEprovidesfortheBoardtoappointfromamongstitsDirectors,aChairmanandaViceChairman.

TheChairmanisresponsibletoleadtheBoardandsetitsagenda, ensure that the Directors of the Board receive

precise,timelyandobjectiveinformationsothattheycantakesounddecisionsandeffectivelymonitortheperformanceoftheCompany,ensureeffectivecommunicationwithshareholdersandencourageactiveengagementbyallmembersoftheBoardfordiscussionofcomplexorcontentious issues.

corporate governance statement


CORPORATE GOVERNANCE STATEMENT ∙ B. COMPLIANCE WITH THE CODE continued

PRINCIPLE 2: CHAIRMAN AND CHIEF EXECUTIVE OFFICER continuedTheroleoftheChiefExecutiveOfficeristoensureeffectiveoverallmanagementandcontrolofGroupbusinessandproperco-ordinationoftheactivitiesundertakenbytheGroup,andisresponsible:

1. fortheformulationandimplementationofpoliciesasapprovedbytheBoard;

2. toachievetheobjectivesoftheGroupasdeterminedbytheBoardandaccordingly;

3. todeviseandputintoeffectsuchplansandtoorganise,manage,directandutilisethehumanresourcesavailableandallphysicalandotherassetsoftheGroupsoastoachievethemosteconomicallyefficientuseofallresourcesandhighestpossibleprofitabilityintheinterestoftheshareholdersandallotherstakeholders.

TheChiefExecutiveOfficerreportsregularlytotheBoardonthebusinessandaffairsoftheGroupandthecommercial,economicandotherchallengesfacingit.HeisalsoresponsibletoensurethatallsubmissionsmadetotheBoardaretimely,giveatrueandcorrectpictureoftheissueorissuesunderconsideration,andareofhighprofessionalstandardsasmayberequiredbythesubjectmatterconcerned.

TheChairmanalsochairsaweeklyExecutiveCommitteeMeeting,duringwhichoperationalissuesarediscussed.

Theabovearrangementsprovidesufficientdelegationofpowerstoachieveeffectivemanagement.Theorganisationalstructureensuresthatdecisionmakingpowersarespreadwideenoughtoallowpropercontrolandreportingsystemstobeinplaceandmaintainedinsuchawaythatnooneindividualorsmallgroupofindividualsactuallyhasunfetteredpowersofdecision.

PRINCIPLE 3: COMPOSITION OF THE BOARDEachmemberoftheBoardofferscoreskillsandexperiencethatarerelevanttothesuccessfuloperationoftheCompany.Whilstrelevanceofskillsiskey,abalancebetweenskillsrepresentedissoughtthroughtheworkoftheRemunerationand Nomination Committee to ensure that there is an

appropriatemixofmemberswithdiversebackgrounds.ThiscontributestodifferentviewpointsonkeyissuesinlinewiththediversitypolicyimplementedthroughouttheCompany.Diversityisrecognisedasbeingmorethanaquestionofage,genderoreducationalandprofessionalbackgrounds.

TheBoardiscomposedofaChairman,aNon-Executive ViceChairmanandsixotherNon-ExecutiveDirectors.

Executive DirectorsLouisA.Farrugia–Chairman

Non-Executive Directors–beforespin-offVincentCurmi–ViceChairmanAlbertoMiceliFarrugiaCharlesXuereb(resigned on 7 September 2017)

MarcantonioStagnod’Alcontres(resigned on 7 September 2017)

MarquisMarcusJohnSciclunaMarshallPaul Micallef (resigned on 7 September 2017)

RobertFarrugia(resigned on 7 September 2017)

Non-Executive Directors–afterspin-offVincentCurmi–ViceChairmanAlbertoMiceliFarrugiaProfAvv.AlbertoStagnod’Alcontres(appointed on 7 September 2017)

Charles Borg (appointed on 22 February 2018)

MarquisMarcusJohnSciclunaMarshallDrMaxGanado(appointed on 7 September 2017 and resigned

on 22 February 2018)

Michael Farrugia (appointed on 7 September 2017)

RoderickChalmers(appointed on 7 September 2017)

TheChiefExecutiveOfficerisinvitedtoattendboardmeetings, in order to ensure his full understanding and

appreciationoftheBoard’spolicyandstrategy,andsothathecanprovidedirectinputtotheBoard’sdeliberations.TheBoardconsidersthatthesizeoftheBoard,whilstnotbeinglargeastobeunwieldy,isappropriate,takingintoaccountthesizeoftheCompanyanditsoperations.Thecombinedandvariedknowledge,experienceandskillsoftheBoardmembersprovideabalanceofcompetencesthatarerequired,and add value to the functioning of the Board and its direction

totheCompany.

Itisintheinterestofeachofthethreemajorshareholders(whoaretheoriginalpromotersoftheCompany)tonominateasdirectors,knowledgeable,experiencedanddiligentpersons.Apartfromthis,informalarrangements,whichdonotinfringe on their rights as shareholders, exist for consultation

priortoanychangesinthemembershipoftheBoard,aswellastoassistintheidentificationofsuitablepersonswhocanbenominatedforelectionbytheothershareholdersatgeneralmeetings,andwhocanbringinanindependentviewpointandparticularknowledgetothedeliberationsoftheBoard.

AllDirectorsareconsideredindependentasnoshareholderhasacontrollinginterestandhasnorelationshipwithmanagement.

TheBoardhastakentheviewthatthelengthofserviceontheBoardandtheclosefamilytiesoftheChairmanintheCompanydonotundermineanyabilitytoconsiderappropriatelytheissueswhicharebroughtbeforetheBoard.ApartfrompossessingvaluableexperienceandwideknowledgeoftheCompanyanditsoperations,theBoardfeelsthattheChairmanisabletoexerciseindependentjudgementandisfreefromanyrelationshipwhichcanhinderhisobjectivity.



PRINCIPLES 4 AND 5: THE RESPONSIBILITIES OF THE BOARD AND BOARD MEETINGSTheBoardmeetsregularlyeverymonthapartfromotheroccasionsasmaybeneeded.Individualdirectors,apartfromattendanceatformalboardmeetings,participateinotheradhocmeetingsduringtheyearasmayberequired,andarealsoactiveinboardsub-committeesasmentionedfurtherbelow,eithertoassuregoodcorporategovernance,ortocontributemoreeffectivelytothedecision-makingprocess.

Meetings held: 7

Members AttendedLouisA.Farrugia–Chairman 7VincentCurmi–ViceChairman 7AlbertoMiceliFarrugia 6ProfAvv.AlbertoStagnod’Alcontres 6 (appointed on 7 September 2017)

CharlesXuereb(resigned on 7 September 2017) 1

MarcantonioStagnod’Alcontres(resigned on 7 September 2017) –MarquisMarcusJohnSciclunaMarshall 6DrMaxGanado(appointed on 7 September 2017) 5*

Michael Farrugia (appointed on 7 September 2017) 5

Paul Micallef (resigned on 7 September 2017) 1

RobertFarrugia(resigned on 7 September 2017) 1

RoderickChalmers(appointed on 7 September 2017) 6

*ofwhichonemeetingwasattendedbyanalternatedirector

TheBoard,infulfillingthismandatewithinthetermsoftheCompany’sMemorandumandArticlesofAssociation,anddischargingitsdutyofstewardshipoftheCompanyandtheGroup,assumesresponsibilityforthefollowing:

• reviewingandapprovingthebusinessplanandtargetsthataresubmittedbymanagement,andworkingwithmanagementintheimplementationofthebusinessplan;

• identifyingtheprincipalbusinessrisksfortheGroupandoverseeingtheimplementationandmonitoringofappropriateriskmanagementsystems;

• ensuring that effective internal control and management

informationsystemsfortheGroupareinplace;• assessingtheperformanceoftheGroup’sexecutiveofficers,includingmonitoringtheestablishmentofappropriatesystemsforsuccessionplanning,andforapprovingthecompensationlevelsofsuchexecutiveofficers;and

• ensuringthattheGrouphasinplaceapolicytoenableittocommunicateeffectivelywithshareholders,otherstakeholdersandthepublicgenerally.

TheBoardisultimatelyresponsiblefortheCompany’ssystemofinternalcontrolsandforreviewingitseffectiveness.Suchasystemisdesignedtomanageratherthaneliminaterisktoachievebusinessobjectives,andcanprovideonlyreasonable,andnotabsolute,assuranceagainstmaterialerror,lossesorfraud.ThroughtheAuditCommittee,theBoardreviewstheeffectivenessoftheCompany’ssystemofinternalcontrols.

Infulfillingitsresponsibilities,theBoardregularlyreviewsandapprovesvariousmanagementreportsaswellasannualfinancialplans,includingcapitalbudgets.Thestrategy,processesandpoliciesadoptedforimplementationareregularlyreviewedbytheBoardusingkeyperformanceindicators.Toassistitinfulfillingitsobligations,theBoardhasdelegatedresponsibilitytotheChiefExecutiveOfficer.

BOARD COMMITTEES

TheBoardhassetupthefollowingsub-committeestoassistitinthedecision-makingprocessandforthepurposesofgoodcorporategovernance.Theactualcompositionofthesecommitteesaregivenintheannualreport,butasstatedearlier,eachofthethreemajorshareholdersandthepublicshareholdersarerepresentedasfaraspossible.

AUDIT COMMITTEE

The Audit Committee’sprimaryobjectiveistoprotecttheinterestsoftheCompany’sshareholdersandassisttheDirectors in conducting their role effectively so that the

Company’sdecision-makingcapabilityandtheaccuracyofitsreportingandfinancialresultsaremaintainedatahighlevelat all times.

TheAuditCommitteeiscomposedoffourmembers– MrRoderickChalmers(whoisalsothechairmanoftheAuditCommittee),MrVincentCurmi,MrAlbertoMiceliFarrugiaandMrCharlesBorg–allbeingNon-ExecutiveDirectors.

AlldirectorsontheAuditCommitteeareindependentand,intheopinionoftheBoard,arefreefromanysignificantbusiness,familyorotherrelationshipwiththeCompany,itsshareholdersoritsmanagementthatwouldcreateaconflictofinterestsuchastoimpairtheirjudgement.MrChalmersisaprofessionalqualifiedaccountantwithcompetenceinmattersrelatingtoaccountingandauditing.TheAuditCommitteeasawholehasextensiveexperienceinmattersrelatingtotheCompany’sareaofoperations,andthereforehastherelevantcompetencerequiredunderListingRule5.118.

TheAuditCommitteeoverseestheconductoftheexternalauditsandactstofacilitatecommunicationbetweentheBoard, Management and the external auditors.

TheexternalauditorsareinvitedtoattendspecificmeetingsoftheAuditCommittee,andarealsoentitledtoconveneameeting of the committee if they consider that it is necessary.

TheChairman,theChiefExecutiveOfficerandtheFinancialControllerarealsoinvitedtoattendAuditCommitteemeetings.MembersofmanagementmaybeaskedtoattendspecificmeetingsatthediscretionoftheAuditCommittee.


PRINCIPLES 4 AND 5: THE RESPONSIBILITIES OF THE BOARD AND BOARD MEETINGS continued

REMUNERATION AND NOMINATION COMMITTEE

The Remuneration and Nomination Committee is chaired

byMrLouisA.Farrugiaandiscomposedoftwoothermembers–MarquisMarcusJohnSciclunaMarshalland ProfAvv.AlbertoStagnod’Alcontres.

TheRemunerationandNominationCommitteeisentrustedwithleadingtheprocessforboardappointments,reviewingnon-executivedirectors’remunerationandconditionsofserviceoftheChairman,ChiefExecutiveOfficerandseniormanagementandtoreportandmakerecommendationstothe Board. In the case of the Chairman or of any remuneration

to an individual Director for extra services, the interested

DirectorconcernedincludingtheChairman,apartfromnotvoting in terms of the TE statute, does not attend the meeting

duringthediscussionatcommitteeorboardlevelanddecisionsarethereforetakeninhis/herabsence.

AnyproposalfortheappointmentofaDirectorwhetherbythethreemajorshareholdersorbythegeneralmeetingofshareholdersshouldbeaccompaniedbyarecommendationfromtheBoard,basedontheadviceoftheRemunerationandNomination Committee.

TheRemunerationandNominationCommitteeisdealtwithunderPrinciple8undertheRemunerationReport,whichalsoincludestheRemunerationstatementintermsofCodeProvisions8.A.3and8.A.4.

RELATED PARTY TRANSACTIONS COMMITTEE

The Related Party Transactions Committeeispresided overbytheViceChairmananddealswithandreportsto theBoardonalltransactionswithrelatedparties.Inthe caseofanydirectorwhoisarelatedpartywithrespectto aparticulartransaction,suchdirectordoesnotparticipate inthecommittee’sdeliberationanddecisiononthetransaction concerned.

Controlmechanismsrelevanttothereportingofrelatedpartytransactionsareinplacetoensurethatinformationisvettedandcollatedonatimelybasis,beforereportingtotheRelatedPartyTransactionsCommitteeforindependentandfinalreviewofthetransactionsconcerned.

PRINCIPLE 6: INFORMATION AND PROFESSIONAL DEVELOPMENTTheChiefExecutiveOfficerisappointedbytheBoardandenjoysthefullconfidenceoftheBoard.TheChiefExecutiveOfficer,althoughresponsiblefortherecruitmentandselectionofseniormanagement,consultswiththeBoard ontheappointmentof,andonasuccessionplanfor, senior management.

Training(bothinternalandexternal)ofmanagementandemployeesisapriority,coordinatedthroughtheofficeoftheChiefExecutiveOfficer.

OnjoiningtheBoard,aDirectorisprovidedwithbriefingsbytheChairmanandtheChiefExecutiveOfficerontheactivitiesoftheCompany’sbusinessareas.Furthermore,allnewDirectorsareofferedatailoredinductionprogramme.

Directorsmay,wheretheyjudgeitnecessarytodischargetheirdutiesasdirectors,takeindependentprofessionaladviceonanymatterattheCompany’sexpense.

UnderthedirectionoftheChairman,theCompanySecretary’sresponsibilitiesincludeensuringgoodinformationflowswithintheBoardanditscommitteesandbetweenseniormanagementandnon-executivedirectors,aswellasfacilitatinginductionandassistingwithprofessionaldevelopmentasrequired.

Directors have access to the advice and services of the

CompanySecretary,whoisresponsibleforensuringadherencetoboardprocedures,aswellasgoodinformationflowswithintheBoardanditscommittees.

TheChairmanensuresthatboardmemberscontinuallyupdatetheirskillsandtheknowledgeandfamiliaritywiththeCompanyrequiredtofulfiltheirrolebothontheBoardandonboardcommittees.TheCompanyprovidesthenecessaryresourcesfordevelopingandupdatingitsdirectors’knowledgeandcapabilities.

TheCompanySecretaryisresponsibleforadvisingtheBoardthrough the Chairman on all governance matters.

PRINCIPLE 7: EVALUATION OF THE BOARD’S PERFORMANCE TheChairmanisentrustedtodealwiththeBoard’sperformanceevaluationandidentifywayshowtoimprovetheBoard’s effectiveness.

AnevaluationexercisewillbeconductedeverytwoyearsthroughaBoardEffectivenessQuestionnairepreparedbytheCompanySecretaryinliaisonwiththeChairman.TheCompanySecretarydiscussestheresultswiththeChairmanwhothenpresentsthesametotheBoardtogetherwithinitiativesundertakentoimprovetheBoard’sperformance.Duringtheintermediateyear,theChairmanundertakestoassesswhethershortcomingsidentifiedduringtheBoardperformanceevaluationprocesshavebeenaddressedandreportedaccordinglytotheBoard.TheNon-ExecutiveDirectorsareresponsiblefortheevaluationoftheChairmanof the Board.

PRINCIPLE 8: COMMITTEESTheRemunerationandNominationCommittee,chairedbytheChairmanisentrustedwithleadingtheprocessforboardappointmentsandtomakerecommendationstoit.AnyproposalfortheappointmentofaDirectorwhetherbythethreemajorshareholdersorbythegeneralmeetingofshareholdersshouldbeaccompaniedbyarecommendationfromtheBoard,basedontheadviceoftheNominationCommittee.




PRINCIPLE 8: COMMITTEES continuedEveryshareholderowningtwelvepercent(12%)ordinaryissuedsharecapitalormore,isentitledtoappointandreplaceaDirectorforeachandeverytwelvepercent(12%)ofsuchshares, and the remaining ordinary shares not so utilised are

entitledtofilltheremainingunfilledpostsofDirectors.Thus,eachofthethreemajorshareholderswhoarenamedandwhoseholdingsarelistedonpage60,normallyeachappointtwodirectorsforatotalofsix,theremainingtwodirectorsthenbeingelectedbythegeneralpublicshareholders.Accordingly,noindividualorsmallgroupofindividualswillbeinapositionto dominate the Board. The interests of the Directors in the

sharesoftheCompanyaredisclosedinthisannualreport.

PRINCIPLES 9 AND 10: RELATIONS WITH SHAREHOLDERS AND WITH THE MARKET, AND INSTITUTIONAL SHAREHOLDERSTheCompanyrecognisestheimportanceofmaintainingadialoguewithitsshareholdersandofkeepingthemarketinformedtoensurethatitsstrategiesandperformancearewellunderstood.TheBoardwillensuretheCompanywillcommunicateeffectivelywiththemarketthroughanumber ofcompanyannouncementsandpressreleases.

TheBoardendeavourstoprotectandenhancetheinterestsofboththeCompanyanditsshareholders,presentandfuture.TheChairmanensuresthattheviewsofshareholdersarecommunicatedtotheBoardasawhole.

TheBoardalwaysensuresthatallholdersofeachclassofcapitalaretreatedfairlyandequally.TheBoardalsoactsinthe context that its shareholders are constantly changing and,

consequently,decisionstakeintoaccounttheinterestsoffutureshareholdersaswell.

ShareholdersappreciatethesignificanceofparticipationinthegeneralmeetingsoftheCompanyandparticularlyintheelection of directors. They hold directors to account for their

actions,theirstewardshipoftheCompany’sassetsandtheperformanceoftheCompany.

The agenda for general meetings of shareholders and the

conduct of such meetings is arranged in such a manner to

encouragevaliddiscussionanddecision-taking.

TheChairmanandtheChiefExecutiveOfficeralsoensurethatsufficientcontactismaintainedwithmajorshareholdersto understand issues and concerns.

TheCompanyalsocommunicateswithitsshareholdersthroughtheCompany’sAnnualGeneralMeeting(“AGM”)(furtherdetailisprovidedunderthesectionentitled GeneralMeetings).

TheChairmanmakesarrangementsforthechairmenoftheAuditCommitteeandtheRemunerationandNominationCommitteetobeavailabletoanswerquestions,ifnecessary.

ApartfromtheAGM,TEintendstocommunicatewithitsshareholdersbywayofpublishinganInterimReportcoveringthefirstsixmonthsofthefinancialyearandbypublishingandsendingtheAnnualReportandFinancialStatementstotheshareholdersonanannualbasis.

TheCompany’swebsite(www.tridentestatesplc.com)alsocontainsinformationabouttheCompanyanditsbusiness,includinganInvestorRelationssection.

Inaddition,theCompanyholdsameetingforstockbrokersandfinancialintermediariesonceayeartocoincidewiththepublicationofitsfinancialstatements.

TheCompanySecretarywillmaintainatwo-waycommunicationbetweentheCompanyanditsinvestors.Individual shareholders can raise matters relating to their

shareholdingsandthebusinessoftheGroupatanytimethroughouttheyear,andaregiventheopportunitytoaskquestionsattheAGMorsubmitwrittenquestionsinadvance.

IntermsofArticle51oftheArticlesofAssociationoftheCompanyandArticle129oftheMalteseCompaniesAct,(Cap.386)theBoardmaycallanextraordinarygeneralmeetingon the requisition of shareholders holding not less than one

tenth(1/10)ofthepaid-upsharecapitaloftheCompany.Minorityshareholdersareallowedtoformallypresentanissueto the Board of Directors.

Intheeventofconflictsarisingbetweenminorityshareholdersandthethreemajorshareholders,whoarealsotheoriginalpromotersoftheCompany,everyeffortshallbemadetoseekmediation.

PRINCIPLE 11: CONFLICTS OF INTERESTTheDirectorsarestronglyawareoftheirresponsibilitytoactatalltimesintheinterestoftheCompanyanditsshareholdersasawholeandoftheirobligationtoavoidconflictsofinterest.Thelattermayariseonspecificmatters.Insuchinstances:

• aDirectorisobligedtomakefullandfrankdisclosurewithrespecttoanymatterwherethereisapotentialoractualconflict,whethersuchconflictarisesfrompersonalinterestsortheinterestsofthecompaniesinwhichsuchpersonisaDirectororofficer;

• the said Director is excused from the meeting and

accordinglyisnotinvolvedintheCompany’sboarddiscussiononthematter;and

• the said Director does not vote on any such matter.

ADirectorhavingacontinuingmaterialinterestthatconflictswiththeinterestsoftheCompany,isobligedtotakeeffectivestepstoeliminatethegroundsforconflict.IntheeventthatsuchstepsdonoteliminatethegroundsforconflictthentheDirector should consider resigning.

OnjoiningtheBoardandregularlythereafter,theDirectorsareinformedoftheirobligationsondealinginsecuritiesof theCompanywithintheparametersoflaw,includingtheListingRules.

TheDirectors’interestsinthesharecapitaloftheCompanyasat31January2018andasat23May2018aredisclosedintheShareholderInformationonpage63.

PRINCIPLE 12: CORPORATE SOCIAL RESPONSIBILITYTheprincipleobjectiveoftheCompany’scommitmenttoCorporateSocialResponsibility(“CSR”)istoprovidesupportwherepossibleinaspectsthatincludesocial,occupational,financial,culturalandhistoricalvalues.


C. Non-compliance with the Code

PRINCIPLE 4 (CODE PROVISION 4.2.7): ThisCodeProvisionrecommends“thedevelopmentofasuccessionpolicyforthefuturecompositionoftheBoardofDirectorsandparticularlytheexecutivecomponentthereof,forwhichtheChairmanshouldholdkeyresponsibility”.

InthecontextoftheappointmentofdirectorsbeingamatterreservedexclusivelytoTE’sshareholders(exceptwheretheneedarisestofillacasualvacancy)asexplainedunderPrinciple3inSectionB,andonthebasisoftheDirectors’non-executiverole,theCompanydoesnotconsideritfeasibletohaveinplacesuchasuccessionpolicy.However,therecommendationtohaveinplacesuchapolicywillbekeptunderreview.AnactivesuccessionpolicyishoweverinplaceforseniorexecutivepositionsintheCompanyincludingthatoftheGroupChiefExecutive.

D. Internal control and risk managementThekeyfeaturesoftheGroup’ssystemofinternalcontrolareasfollows:

Organisation:

TheCompanyanditssubsidiarieshavethesamedirectorsandtherespectiveCompanyissuesarediscussedduringBoardmeetingsoftheCompany.

Control Environment:

TheGroupiscommittedtothehigheststandardsofbusinessconductandseekstomaintainthesestandardsacrossallofitsoperations.Grouppoliciesandemployeeproceduresareinplaceforthereportingandresolutionoffraudulentactivities.TheGrouphasanappropriateorganisationalstructureforplanning,executing,controllingandmonitoringbusinessoperationsinordertoachieveGroupobjectives.

Risk Identification:Groupmanagementisresponsibletogetherwitheachcompany’smanagement,fortheidentification,evaluation,controlandreportingofmajorrisksapplicabletotheirareasofbusiness.

Reporting:

TheGrouphasimplementedcontrolproceduresdesignedtoensurecompleteandaccurateaccountingforfinancialtransactionsandtolimitthepotentialexposuretolossofassetsorfraud.Measurestakenincludephysicalcontrols,segregationofduties,reviewsbymanagementand internal audit.

Onamonthly,basistheBoardreceivesacomprehensiveanalysisoffinancialandbusinessperformance,includingreportscomparingactualperformancewithbudgetsaswellas analysis of any variances.

E. General meetingsThemannerinwhichthegeneralmeetingisconductedisoutlinedinArticles49to52oftheCompany’sArticlesofAssociation,subjecttotheprovisionsoftheMalteseCompaniesAct,(Cap.386).

Withinsevenmonthsoftheendofthefinancialyear,anAnnualGeneralMeetingofshareholdersisconvenedto

considertheannualconsolidatedfinancialstatements,thedirectors’andauditor’sreportfortheyear,todecideondividendsrecommendedbytheBoard,toelectthedirectorsandappointtheauditors.PriortothecommencementoftheAnnualGeneralMeeting,apresentationismadetoshareholdersontheprogressmadeandstrategiesadoptedduringtheyearinlightofprevailingmarketandeconomicconditionsandtheobjectivessetbytheBoard,andanassessmentonfutureprospectsisgiven.TheGroup’spresenceontheworldwideweb(www.tridentestatesplc.com)containsacorporateinformationsection.

Apartfromtheabove,theGroupwillpublishitsfinancialresultseverysixmonthsandfromtimetotimeissuespublicnoticesregardingmatterswhichmaybeofgeneralinterestorofmaterialimportancetoshareholdersandthemarketingeneral,orwhichmayconcernpricesensitiveissues.

AtthetimeoftheAnnualGeneralMeeting,thepublicationofthesix-monthlyreportorsignificanteventsaffectingtheGroup,publicmeetingsareheldtowhichinstitutionalinvestors,financialintermediariesandinventorybrokersareinvited to attend. Press releases are also issued regularly on

thebusinessactivitiesoftheGroup.

AllshareholdersregisteredintheShareholders’RegisterontheRecordDateasdefinedintheListingRules,havetherighttoattend,participateandvoteinthegeneralmeeting.Ashareholderorshareholdersholdingnotlessthanfivepercent(5%)ofthevotingissuedsharecapitalmayrequesttheCompanytoincludeitemsontheagendaofageneralmeetingand/ortabledraftresolutionsforitemsincludedintheagendaofageneralmeeting.SuchrequestsaretobereceivedbytheCompanyatleastforty-six(46)daysbeforethedatesetforthe relative general meeting.

AshareholderwhocannotparticipateinthegeneralmeetingcanappointaproxybywrittenorelectronicnotificationtotheCompany.Everyshareholderrepresentedinpersonorbyproxyisentitledtoaskquestionswhicharepertinentandrelated to items on the agenda of the general meeting and

tohavesuchquestionsansweredbytheDirectorsorsuchpersonsastheDirectorsmaydelegateforthatpurpose.

ApprovedbytheBoardofDirectorson23May2018andsignedonitsbehalfby:

Louis A. FarrugiaChairman

Vincent CurmiVice Chairman

CORPORATE GOVERNANCE STATEMENT continued

remuneration report


1. Terms of Reference and MembershipTheRemunerationandNominationCommitteeispresidedoverbytheChairmanoftheCompany.Itstermsofreferencearetoreviewfromtimetotimeandtoreportandmakerecommendationsonthenon-executivedirectors’remunerationgenerallyaswellastheconditionsofserviceoftheChairman,ChiefExecutiveOfficerandsenior management. In the case of the Chairman or of any

remuneration to an individual director for extra services, the

interesteddirectorconcernedincludingtheChairman,apartfromnotvotingintermsoftheTridentEstatesplc(“TE”)statute, does not attend the meeting during the discussion at

committeeorboardlevelanddecisionsarethereforetakeninhis/herabsence.

2. Meetings Duringtheyear,TEwasafullyownedsubsidiaryofSimondsFarsonsCiskplcandadmittedtoListingtotheMaltaStockExchangeon30January2018.

3. Remuneration Statement

3.1 SENIOR MANAGEMENTForthepurposesofthisRemunerationStatement,referencesto‘seniormanagement’shallmeantheChiefExecutiveOfficer,theChiefOperationsOfficerandtheFinancialController.

TheChiefExecutiveOfficerisresponsibletocarryoutregularreviewsofthecompensationstructurepertainingtoseniormanagementinlightoftheGroup’sperformance,economicsituationandmarkettrends.OneofthemainobjectivesistorecruitandretainexecutivesofhighprofessionalstandardsandcompetencewhocanenhancetheGroup’sperformanceandassurethebestoperationalandadministrativepractices.

TheChiefExecutiveOfficerreportsandmakesrecommendationsperiodicallytotheBoardontheremunerationpackage,includingbonusarrangementsforachievingpre-determinedtargets.

TheRemunerationandNominationCommitteeisrequiredtoevaluate,recommendandreportonanyproposalsmadebytheChiefExecutiveOfficerrelatingtomanagementremuneration and conditions of service. The Committee

considers that the current executive management

remunerationpackagesarebasedupontheappropriatelocalmarketequivalents,andarefairandreasonablefortheresponsibilitiesinvolved.TheCommitteealsobelievesthattheremunerationpackagesaresuchastoenabletheCompanytoattract,retainandmotivateexecutiveshavingtheappropriateskillsandqualitiestoensurethepropermanagement of the organisation.

TheCommitteeisalsochargedwithconsideringanddetermining any recommendations from the Chief Executive

Officeronrequestsforearlyretirement.

ThetermsandconditionsofemploymentofseniormanagementaresetoutintheirrespectivecontractsofemploymentwiththeCompany.Asageneralrule,suchcontractsdonotcontainprovisionsforterminationpaymentsandotherpaymentslinkedtoearlytermination.

Seniormanagementiseligibleforanannualperformancebonuswhichislinkedtoagreedperformancetargetsand their achievement.

InthecaseoftheChiefExecutiveOfficer,theRemunerationandNominationCommitteeisoftheviewthatthelinkagebetweenfixedremunerationandperformancebonusisreasonableandappropriate.

Therearenoprofitsharing,shareoptionsorpension benefitarrangements.

TheChiefExecutiveOfficeriseligibleforanannualbonusentitlementbyreferencetotheattainmentofpre-establishedobjectivesandtargetsasapprovedbytheRemunerationandNomination Committee.

Non-cashbenefitstowhichseniormanagementareentitledareprincipallytheuseofacompanycarandhealthinsurance.

remuneration report


REMUNERATION REPORT ∙ 3. REMUNERATION STATEMENT continued

3.2 DIRECTORS TheBoardiscomposedoftheChairmanandNon-ExecutiveDirectors. The determination of remuneration arrangements

forboardmembersisareservedmatterfortheBoardasawhole,followingthesubmissionofrecommendationsby the committee.

TheChairmanandDirectorsarenotemployedorhaveaservicecontractwiththeCompanyoranyofitssubsidiaries.

The remuneration of the Chairman and other Directors

isdeterminedonthebasisoftheirresponsibilities,timecommittedtotheGroup’saffairs,includingattendanceat

regularboardmeetings,servingonboardsofsubsidiariesandworkdoneinconnectionwiththevarioussub-committeesofwhichtheyaremembers.

ThereisnolinkagebetweentheremunerationandtheperformanceofDirectors.

NoDirector(includingtheChairman)isentitledtoprofitsharing,shareoptionsorpensionbenefits,andtherearenooutstandingloansorguaranteesprovidedbytheCompanyoranyofitssubsidiariestoanyDirector.

NoDirectorisentitledtoanynon-cashbenefits.

3.3 TOTAL EMOLUMENTSInaccordancewiththeCompany’sArticlesofAssociation,themaximumaggregateemolumentspayabletoallDirectorsinanyonefinancialyearandanyincreasesthereto,shallbesuchamountasmayfromtimetotimebedeterminedbytheshareholdersatageneralmeeting.Duringthefinancialyearended31January2018,Directorsandseniormanagementreceivedaggregateemolumentsamountingto€132,700.

NoneoftheDirectorshaveaservicecontractprovidingforbenefitsuponterminationofemploymentwiththeCompanyoranyofitssubsidiaries.

ThefollowingisanoutlineoftheDirectors’remunerationforthefinancialyearunderreview:

Directors’fees:€3,500Directors’otheremoluments:NoneDirectors’salary:None

VARIABLE AND NON-VARIABLE EMOLUMENTS OF DIRECTORS AND SENIOR MANAGEMENT

Fixed

RemunerationVariableRemuneration

ShareOptions Others

Senior

Management

€128,000 €1,200 None Non-cashbenefitsreferredtoaboveunder3.1

Directors €3,500 None None Non-cashbenefitsreferredtoaboveunder3.2


Independent auditor’s report TotheShareholdersofTridentEstatesplc

Report on the audit of the financial statements OUR OPINION

Inouropinion:• TridentEstatesplc’sGroupfinancialstatementsandParentCompanyfinancialstatements(the“financialstatements”)giveatrueandfairviewoftheGroup’sandtheParentCompany’sfinancialpositionasat31January2018,andoftheGroup’sandtheParentCompany’sfinancialperformanceandcashflowsfortheyearthenendedinaccordancewithInternationalFinancialReportingStandards(‘IFRSs’)asadoptedbytheEU;and

• ThefinancialstatementshavebeenpreparedinaccordancewiththerequirementsoftheMalteseCompaniesAct(Cap.386).OuropinionisconsistentwithouradditionalreporttotheAuditCommittee.

What we have auditedTridentEstatesplc’sfinancialstatements,setoutonpages30to62,comprise:• theConsolidatedandParentCompanystatementsoffinancialpositionasat31January2018;• theConsolidatedandParentCompanyincomestatementsfortheyearthenended;• theConsolidatedandParentCompanystatementsofchangesinequityfortheyearthenended;• theConsolidatedandParentCompanystatementsofcashflowsfortheyearthenended;and• thenotestothefinancialstatements,whichincludeasummaryofsignificantaccountingpolicies.

BASIS FOR OPINION

WeconductedourauditinaccordancewithInternationalStandardsonAuditing(ISAs).OurresponsibilitiesunderthosestandardsarefurtherdescribedintheAuditor’s Responsibilities for the Audit of the Financial Statementssectionofourreport.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.

IndependenceWeareindependentoftheGroupandtheParentCompanyinaccordancewiththeInternationalEthicsStandardsBoardforAccountants’CodeofEthicsforProfessionalAccountants(IESBACode)togetherwiththeethicalrequirementsoftheAccountancyProfession(CodeofEthicsforWarrantHolders)DirectiveissuedintermsoftheAccountancyProfessionAct(Cap.281)thatarerelevanttoourauditofthefinancialstatementsinMalta.WehavefulfilledourotherethicalresponsibilitiesinaccordancewiththeIESBACode.

Tothebestofourknowledgeandbelief,wedeclarethatnon-auditservicesthatwehaveprovidedtotheParentCompanyanditssubsidiariesareinaccordancewiththeapplicablelawandregulationsinMaltaandthatwehavenotprovidednon-auditservicesthatareprohibitedunderArticle18AoftheAccountancyProfessionAct(Cap.281).

Thenon-auditservicesthatwehaveprovidedtotheGroupanditssubsidiaries,intheperiodfrom1February2017to31January2018aredisclosedinNote16tothefinancialstatements.

OUR AUDIT APPROACHOverview

• OverallGroupmateriality:€199,000,whichrepresents0.5%ofTotalAssets

• TheGroupiscomposedof5reportingunitsalllocatedinMalta.

• TheGroupengagementteamcarriedouttheauditofthefinancialstatementsoftheParentCompanyaswellastheauditofthefinancialstatementsofallthesubsidiariesoftheCompany.

• Valuationofinvestmentproperty.

Materiality

Group scoping

Key audit matters


Independent auditor’s report continuedTotheShareholdersofTridentEstatesplc

Aspartofdesigningouraudit,wedeterminedmaterialityandassessedtherisksofmaterialmisstatementintheconsolidatedfinancialstatements.Inparticular,weconsideredwherethedirectorsmadesubjectivejudgements;forexample,inrespectofsignificantaccountingestimatesthatinvolvedmakingassumptionsandconsideringfutureeventsthatareinherentlyuncertain.Asinallofouraudits,wealsoaddressedtheriskofmanagementoverrideofinternalcontrols,includingamongothermattersconsiderationofwhethertherewasevidenceofbiasthatrepresentedariskofmaterialmisstatementduetofraud.

MaterialityThescopeofourauditwasinfluencedbyourapplicationofmateriality.Anauditisdesignedtoobtainreasonableassurancewhetherthefinancialstatementsarefreefrommaterialmisstatement.Misstatementsmayariseduetofraudorerror.Theyareconsideredmaterialifindividuallyorinaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisoftheconsolidatedfinancialstatements.

Basedonourprofessionaljudgement,wedeterminedcertainquantitativethresholdsformateriality,includingtheoverallGroupmaterialityfortheconsolidatedfinancialstatementsasawholeassetoutinthetablebelow.These,togetherwithqualitativeconsiderations,helpedustodeterminethescopeofourauditandthenature,timingandextentofourauditproceduresandtoevaluatetheeffectofmisstatements,bothindividuallyandinaggregateonthefinancialstatementsasawhole.

Overall Group materiality €199,000

How we determined it 0.5%ofTotalAssets

Rationale for the materiality benchmark applied

Wechosetotalassetsasthebenchmarkbecause,inourview,itisthebenchmarkagainstwhichtheunderlyingvalueofrealestatecompaniesismostcommonlymeasuredbyusers,andisagenerallyacceptedbenchmark.ItisalsoakeymeasurewhichisusedbytheBoardinassessingtheCompany’sfinancialposition.

Wechose0.5%,whichiswithintherangeofasset-basedmaterialitythresholdsthatweconsideracceptable.

WeagreedwiththeAuditCommitteethatwewouldreporttothemmisstatementsidentifiedduringourauditabove€10,000aswellasmisstatementsbelowthatamountthat,inourview,warrantedreportingforqualitativereasons.

Key audit matters Keyauditmattersarethosemattersthat,inourprofessionaljudgement,wereofmostsignificanceinourauditofthefinancialstatementsofthecurrentperiod.Thesematterswereaddressedinthecontextofourauditofthefinancialstatementsasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.

Key audit matter How our audit addressed the Key audit matter

Valuation of Investment property for Group and Company

RefertoNote5

ThevaluationoftheGroup’sinvestmentpropertyportfolioisinherentlysubjectivedueto,amongotherfactors,theindividualnatureofeachproperty,itslocationand,whereapplicable,theexpectedfuturerentalsforthatparticularinvestmentproperty.Forinvestmentpropertybeingdeveloped,factorstakenintoaccountincludeprojectedcoststocompletion,timingthereofandexpectedrentalincome.

ThevaluersusedbytheGrouphaveconsiderableexperienceinthelocalmarket,whichiswheretheentireGroup’sinvestmentpropertyissituated.

Weobtained,understoodandevaluatedthevaluation models used.

WeagreedthepropertyinformationutilisedinthevaluationtotheunderlyingpropertyrecordsheldbytheCompany.

Theauditteam,includingourvaluationexpertsassessedthereasonablenessoftheunobservableinputsusedindeterminingthevaluationsandtheappropriatenessoftheresulting fair values.

Wecomparedthesignificantinputsusedwithinthesalescomparisonapproach,i.e.thesalespricepercubicmetre,tobenchmarksforcomparablepropertieslocatedinproximity.



Key audit matter How our audit addressed the Key audit matter

AsdisclosedinNote5,theexternalvaluationshavebeenperformedusingavarietyofmethods,includingthesalescomparisonapproach,discountedcashflowapproachandcapitalisedrentalsapproach.Eachinvestmentpropertywasvaluedusingthemethodconsideredbytheexternalvaluerstobethemostappropriatevaluationmethodforthattype ofproperty.

TheBoardofDirectorsconsideredthevaluationreportaspartofitsoverallresponsibilities.

Thesignificanceoftheestimatesandjudgementsinvolved,coupledwiththefactthatonlyasmallpercentagedifferenceinindividualpropertyvaluations,whenaggregated,couldresultinamaterialmisstatement,warrantsspecificauditfocus in this area.

Wherethecapitalisedrentalsandthediscountedcashflowapproacheswereusedforcommercialpremises,weassessedtheadequacyoftherentalratepersquaremetre.Wehavealsoassessedthecapitalisationratebycomparingtheinvestmentyieldsusedbythevaluerstoanestimatedrangeofexpectedyields,determinedbyreferencetoavailablebenchmarks.

Forinvestmentpropertyunderdevelopment,weassessedtheunobservableinputsrelatingtodevelopmentcoststocompletion,timingthereof,annualisednetcashflowspersquaremetre,thecapitalisationrateandthereasonablenessofprojectedoccupancyrates.

Weheldmeetingswithmanagement,theauditcommitteeanddirectorsontheyear-endvaluationsandfoundthattheywereabletoprovideexplanationsandrefertoappropriatesupportingevidence.

How we tailored our Group audit scopeTheGroupiscomposedoffivereportingunitsalllocatedinMalta.Wetailoredthescopeofourauditinordertoperformsufficientworkonallcomponentstoenableustoprovideanopinionontheconsolidatedfinancialstatementsasawhole,takingintoaccountthestructureoftheGroup,theaccountingprocessesandcontrols,andtheindustryinwhichtheGroupoperates.

TheGroupauditteamperformedallofthisworkbyapplyingtheoverallGroupmateriality,togetherwithadditionalproceduresperformedontheconsolidation.ThisgaveussufficientappropriateauditevidenceforouropinionontheGroupfinancialstatementsasawhole.

OTHER INFORMATION

Thedirectorsareresponsiblefortheotherinformation.TheotherinformationcomprisestheChairman’sStatement,theChiefExecutiveOfficer’sReview,theDirectors’Report,theRemunerationReportandShareholderInformation(butdoesnotincludethefinancialstatementsandourauditor’sreportthereon).

Ouropiniononthefinancialstatementsdoesnotcovertheotherinformation,includingtheDirectors’Report.

Inconnectionwithourauditofthefinancialstatements,ourresponsibilityistoreadtheotherinformationidentifiedaboveand,indoingso,considerwhethertheotherinformationismateriallyinconsistentwiththefinancialstatementsorourknowledgeobtainedintheaudit,orotherwiseappearstobemateriallymisstated.

WithrespecttotheDirectors’Report,wealsoconsideredwhethertheDirectors’ReportincludesthedisclosuresrequiredbyArticle177oftheMalteseCompaniesAct(Cap.386).

Basedontheworkwehaveperformed,inouropinion:

• TheinformationgivenintheDirectors’Reportforthefinancialyearforwhichthefinancialstatementsarepreparedisconsistentwiththefinancialstatements;and

• theDirectors’ReporthasbeenpreparedinaccordancewiththeMalteseCompaniesAct(Cap.386).

Inaddition,inlightoftheknowledgeandunderstandingoftheCompanyanditsenvironmentobtainedinthecourseoftheaudit,wearerequiredtoreportifwehaveidentifiedmaterialmisstatementsintheDirectors’Reportandotherinformationthatweobtainedpriortothedateofthisauditor’sreport.Wehavenothingtoreportinthisregard.



RESPONSIBILITIES OF THE DIRECTORS AND THOSE CHARGED WITH GOVERNANCE FOR THE FINANCIAL STATEMENTS

ThedirectorsareresponsibleforthepreparationoffinancialstatementsthatgiveatrueandfairviewinaccordancewithIFRSsasadoptedbytheEUandtherequirementsoftheMalteseCompaniesAct(Cap.386),andforsuchinternalcontrolasthedirectorsdetermineisnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraud or error.

Inpreparingthefinancialstatements,thedirectorsareresponsibleforassessingtheGroup’sandtheParentCompany’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccountingunlessthedirectorseitherintendtoliquidatetheGrouportheParentCompanytoceaseoperations,orhavenorealisticalternativebuttodoso.

ThosechargedwithgovernanceareresponsibleforoverseeingtheGroup’sfinancialreportingprocess.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Ourobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditor’sreportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithISAswillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthese financialstatements.

AspartofanauditinaccordancewithISAs,weexerciseprofessionaljudgementandmaintainprofessionalscepticismthroughouttheaudit.Wealso:

• Identifyandassesstherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror,designandperformauditproceduresresponsivetothoserisks,andobtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.

• Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheGroup’sandParentCompany’sinternal control.

• Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelateddisclosuresmadebythedirectors.

• Concludeontheappropriatenessofthedirectors’useofthegoingconcernbasisofaccountingand,basedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtontheGroup’sortheParentCompany’sabilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,wearerequiredtodrawattentioninourauditor’sreporttotherelateddisclosuresinthefinancialstatementsor,ifsuchdisclosuresareinadequate,tomodifyouropinion.Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditor’sreport.However,futureeventsorconditionsmaycausetheGrouportheParentCompanytoceasetocontinueasagoingconcern.

• Evaluatetheoverallpresentation,structureandcontentofthefinancialstatements,includingthedisclosures,andwhetherthefinancialstatementsrepresenttheunderlyingtransactionsandeventsinamannerthatachievesfairpresentation.

• ObtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivitieswithintheGrouptoexpressanopinionontheconsolidatedfinancialstatements.Weareresponsibleforthedirection,supervisionandperformanceoftheGroupaudit.Weremainsolelyresponsibleforourauditopinion.

Wecommunicatewiththosechargedwithgovernanceregarding,amongothermatters,theplannedscopeandtimingoftheauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.

Wealsoprovidethosechargedwithgovernancewithastatementthatwehavecompliedwithrelevantethicalrequirementsregardingindependence,andtocommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,relatedsafeguards.

Fromthematterscommunicatedwiththosechargedwithgovernance,wedeterminethosemattersthatwereofmostsignificanceintheauditofthefinancialstatementsofthecurrentperiodandarethereforethekeyauditmatters.Wedescribethesemattersinourauditor’sreportunlesslaworregulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrarecircumstances,wedeterminethatamattershouldnotbecommunicatedinourreportbecausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefitsofsuchcommunication.



Report on other legal and regulatory requirements REPORT ON THE STATEMENT OF COMPLIANCE WITH THE PRINCIPLES OF GOOD CORPORATE GOVERNANCE

TheListingRulesissuedbytheMaltaListingAuthorityrequirethedirectorstoprepareandincludeintheirAnnualReportaStatementofComplianceprovidinganexplanationoftheextenttowhichtheyhaveadoptedtheCodeofPrinciplesofGoodCorporateGovernanceandtheeffectivemeasuresthattheyhavetakentoensurecompliancethroughouttheaccountingperiodwiththosePrinciples.

TheListingRulesalsorequiretheauditortoincludeareportontheStatementofCompliancepreparedbythedirectors.

WereadtheStatementofComplianceandconsidertheimplicationsforourreportifwebecomeawareofanyapparentmisstatementsormaterialinconsistencieswiththefinancialstatementsincludedintheAnnualReport.OurresponsibilitiesdonotextendtoconsideringwhetherthisstatementisconsistentwithanyotherinformationincludedintheAnnualReport.

Wearenotrequiredto,andwedonot,considerwhethertheBoard’sstatementsoninternalcontrolincludedintheStatementofCompliancecoverallrisksandcontrols,orformanopinionontheeffectivenessoftheCompany’scorporategovernanceproceduresoritsriskandcontrolprocedures.

Inouropinion,theStatementofCompliancesetoutonpages17to22hasbeenproperlypreparedinaccordancewiththerequirementsoftheListingRulesissuedbytheMaltaListingAuthority.

OTHER MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

Wealsohaveresponsibilities:

• undertheMalteseCompaniesAct(Cap.386)toreporttoyouif,inouropinion:• Adequateaccountingrecordshavenotbeenkept,orthatreturnsadequateforouraudithavenotbeenreceivedfrombranchesnotvisitedbyus.

• Thefinancialstatementsarenotinagreementwiththeaccountingrecordsandreturns.• Wehavenotreceivedalltheinformationandexplanationswerequireforouraudit.• Certaindisclosuresofdirectors’remunerationspecifiedbylawarenotmadeinthefinancialstatements,givingtherequiredparticularsinourreport.

• undertheListingRulestoreviewthestatementmadebythedirectorsthatthebusinessisagoingconcerntogetherwithsupportingassumptionsorqualificationsasnecessary.

Wehavenothingtoreporttoyouinrespectoftheseresponsibilities.

APPOINTMENT

WewerefirstappointedasauditorsoftheCompanyon25October2000.Ourappointmenthasbeenrenewedannuallybyshareholderresolutionrepresentingatotalperiodofuninterruptedengagementappointmentof17years.TheCompanybecamelistedonaregulatedmarketon30January2018.

PricewaterhouseCoopers78,MillStreetQormiMalta

David ValenziaPartner

23May2018


GROUP COMPANY

AS AT 31JANUARY

2018

ASAT31JANUARY

2017

AS AT 31JANUARY

2018

ASAT31JANUARY

2017

ASAT1FEBRUARY

2016

NOTES €’000 €’000 €’000 €’000(RESTATED)

€’000(RESTATED)

ASSETS

Non-current assetsProperty,plantandequipment 4 18 13 18 13 18Investmentproperty 5 33,043 21,014 9,180 13,285 17,968Investmentinsubsidiaries 6 – – 520 261 594Investment in associate 7 – 942 – 259 259Totalnon-currentassets 33,061 21,969 9,718 13,818 18,839

Current assetsTradeandotherreceivables 8 440 3,578 11,582 3,639 3,315

Advancepayment 6 – – 951 – –Current tax assets – 15 – 15 –Cash and cash equivalents 9 6,228 20 6,205 – –

6,668 3,613 18,738 3,654 3,315

Assetsclassifiedasheldforsale 10 – 2,545 10,200 8,640 –Total current assets 6,668 6,158 28,938 12,294 3,315

Total assets 39,729 28,127 38,656 26,112 22,154

statements of financial position


STATEMENTS OF FINANCIAL POSITION continued

GROUP COMPANY

AS AT 31JANUARY

2018

ASAT31JANUARY

2017

AS AT 31JANUARY

2018

ASAT31JANUARY

2017

ASAT1FEBRUARY

2016

NOTES €’000 €’000 €’000 €’000(RESTATED)

€’000(RESTATED)

EQUITY AND LIABILITIES

Capital and reservesSharecapital 11 30,000 4,805 30,000 4,805 4,805Fair value gains reserve 12 2,213 14,047 25 12,007 8,493Retainedearnings 4,841 4,686 4,634 4,675 4,011

Total equity 37,054 23,538 34,659 21,487 17,309

Non-current liabilitiesDeferredtaxliabilities 13 2,228 1,742 918 1,114 1,667

Otherpayables 14 150 – – – –Totalnon-currentliabilities 2,378 1,742 918 1,114 1,667

Current liabilitiesTradeandotherpayables 14 245 2,516 2,042 2,516 3,094Currenttaxliabilities 52 – 17 – 84

297 2,516 2,059 2,516 3,178

Liabilitiesdirectlyattributableto non-currentassetsheldforsale 10 – 331 1,020 995 –Totalcurrentliabilities 297 2,847 3,079 3,511 3,178

Total liabilities 2,675 4,589 3,997 4,625 4,845

Total equity and liabilities 39,729 28,127 38,656 26,112 22,154

TheNotesonpages36to62areanintegralpartoftheseconsolidatedfinancialstatements.

Thefinancialstatementsonpages30to62wereauthorisedforissuebytheBoardon23May2018andweresignedonitsbehalfby:

Louis A. Farrugia Vincent CurmiChairman Vice Chairman


YEAR ENDED 31 JANUARY

GROUP COMPANY

2018 2017 2018 2017

NOTES €’000 €’000 €’000 €’000(RESTATED)

Revenue 15 796 727 692 634

Cost of sales 16 (79) (106) (41) (43)Gross profit 717 621 651 591Administrativeexpenses 16 (461) (51) (460) (64)Operating profit 256 570 191 527

Fairvaluegainsoninvestmentproperty 5 165 4,667 – 3,957(Loss)/Gainondisposalofsubsidiaries 24 – (61) – 293Net income on acquisition of investment 17 11 – – –Share of results of associate 7 20 (23) – –Finance income 18 41 22 41 50

Finance costs 19 (56) (94) (56) (94)Profit before tax 437 5,081 176 4,733

Taxincome/(expense) 20 76 (724) (7) (555)Profit for the year 513 4,357 169 4,178

B asic and diluted earnings per share for the year attributable to shareholders 22 €0.045 €0.907


income statementsstatements of changes in equity


GROUP

SHARECAPITAL

FAIR VALUEGAINS RESERVE

RETAINEDEARNINGS

TOTALEQUITY

NOTES €’000 €’000 €’000 €’000

Balanceat31January2016 4,805 10,555 3,821 19,181

Profitfortheyear – – 4,357 4,357

N et transfers of fair value movements on

investmentproperty,netofdeferredtax 12 – 4,060 (4,060) –N et transfer of fair value movement related to investment

propertyheldbyassociate,netofdeferredtax 12 – (48) 48 –Transferoffairvaluegainsupondisposalofsubsidiary 12 – (520) 520 –Balanceat31January2017 4,805 14,047 4,686 23,538

Profitfortheyear – – 513 513

N et transfers of fair value movements on

investmentproperty,netofdeferredtax 12 – 148 (148) –Transferoffairvaluegainsupondisposalof investmentproperty 12 – 210 (210) –

– 358 155 513

Transactions with ownersIssueofnewshares 11 6,500 – – 6,500

Capitalisationofamountsduetopreviousowners 11 6,503 – – 6,503

Capitalisationofreserves 12 12,192 (12,192) – –25,195 (12,192) – 13,003

Balance at 31 January 2018 30,000 2,213 4,841 37,054

statements of changes in equity


STATEMENTS OF CHANGES IN EQUITY continued

COMPANY

SHARE CAPITAL

FAIR VALUE GAINS RESERVE

RETAINED EARNINGS

TOTAL EQUITY

NOTES €’000 €’000 €’000 €’000

Balanceat1February2016 – aspreviouslyreported 4,805 – 3,123 7,928 – effectofchangeinaccountingpolicy,netofdeferredtax(Note1.1.1) – 8,493 888 9,381

– as restated 4,805 8,493 4,011 17,309

Profitfortheyear – – 4,178 4,178N et transfers of fair value movements on investment

property,netofdeferredtax 12 – 3,514 (3,514) –– 3,514 664 4,178

Balanceat31January2017 4,805 12,007 4,675 21,487

Balanceat31January2017 – aspreviouslyreported 4,805 – 3,643 8,448 – effectofchangeinaccountingpolicy,netofdeferredtax(Note1.1.1) – 12,007 1,032 13,039

– as restated 4,805 12,007 4,675 21,487

Profitfortheyear – – 169 169T ransfer of fair value gains, net of deferred tax on

disposalofinvestmentproperty – 210 (210) –– 210 (41) 169

Transactions with ownersIssueofnewshares 11 6,500 – – 6,500

Capitalisationofamountsduetopreviousowners 11 6,503 – – 6,503

Capitalisationofreserves 12 12,192 (12,192) – –25,195 (12,192) – 13,003

Balance at 31 January 2018 30,000 25 4,634 34,659


statements of cash flows


YEAR ENDED 31 JANUARY

GROUP COMPANY

2018 2017 2018 2017

NOTES €’000 €’000 €’000 €’000(RESTATED)

C ash flows from operating activitiesCashgeneratedfrom/(usedin)operations 21 2,522 (343) (8,222) (370)Interest received 41 22 41 50

Interestpaid (56) (94) (56) (94)Incometaxpaid (145) (211) (145) (212)Netcashgeneratedfrom/(usedin)operatingactivities 2,362 (626) (8,382) (626)

C ash flows from investing activitiesPurchaseofproperty,plantandequipment 4 (10) – (10) –Purchaseofinvestmentproperty 5 (10,764) – – –Purchaseofsubsidiary 7 – – (951) (20)Acquisitionofinvestment,netofcashacquired 24 (928) – – –Proceedsfromdisposalofinvestmentproperty 2,545 – 2,545 –Proceedsfromdisposalofsubsidiaries 6 – 646 – 646

Netcash(usedin)/generatedfrominvestingactivities (9,157) 646 1,584 626

Cash flows from financing activitiesIncreaseinsharecapital 13,003 – 13,003 –Netcashgeneratedfromfinancingactivities 13,003 – 13,003 –

N et movement in cash and cash equivalents 6,208 20 6,205 –

C ash and cash equivalents at beginning of year 20 – – –

C ash and cash equivalents at end of year 9 6,228 20 6,205 –


statements of cash flows


1. Summary of significant accounting policiesTheprincipalaccountingpoliciesappliedinthepreparationoftheseconsolidatedfinancialstatementsaresetoutbelow.Thesepolicieshavebeenconsistentlyappliedtoalltheyearspresented,unlessotherwisestated.

1.1 BASIS OF PREPARATIONTheseconsolidatedfinancialstatementsincludethefinancialstatementsofTridentEstatesplcanditssubsidiaries.TheconsolidatedfinancialstatementshavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRSs)asadoptedbytheEUandtherequirementsoftheMalteseCompaniesAct,(Cap.386).Theyhavebeenpreparedunderthehistoricalcostconvention,asmodifiedbythefairvaluationofinvestmentpropertyandexceptasdisclosedintheaccountingpoliciesbelow.Unlessotherwisestated,allfinancialinformationpresentedhasbeenroundedtothenearest thousand.

ThepreparationoffinancialstatementsinconformitywithIFRSsasadoptedbytheEUrequirestheuseofcertainaccounting estimates. It also requires directors to exercise

theirjudgementintheprocessofapplyingtheGroup’saccountingpolicies(seeNote3–Criticalaccountingestimatesandjudgements).

Standards, interpretations and amendments to published

standards effective in 2018

In2018,theGroupadoptednewstandards,amendmentsandinterpretationstoexistingstandardsthataremandatoryfortheGroup’saccountingperiodbeginningon1February2018.TheadoptionoftheserevisionstotherequirementsofIFRSsasadoptedbytheEUdidnotresultinsubstantialchangestotheGroup’saccountingpolicies.

Standards, interpretations and amendments to published

standards that are not yet effective

Certainnewstandards,amendmentsandinterpretationstoexistingstandardshavebeenpublishedbythedateofauthorisationforissueofthesefinancialstatementsbutaremandatoryfortheGroup’saccountingperiodsbeginningafter1February2019.TheGrouphasnotearlyadoptedtheserevisionstotherequirementsofIFRSsasadoptedbytheEUandtheGroup’sdirectorsareoftheopinionthat,withtheexceptionofthebelowpronouncements,therearenorequirementsthatwillhaveapossiblesignificantimpactontheGroup’sfinancialstatementsintheperiodofinitialapplication.

IFRS9,‘Financialinstruments’,addressestheclassificationmeasurementandrecognitionoffinancialassetsandfinancialliabilities.IFRS9wasissuedinJuly2014andiseffectiveforaccountingperiodscommencingonorafter1January2018.TheGroupwilladoptthestandardwithadateofinitialapplicationof1February2018.

IFRS9replacestheguidanceinIAS39thatrelatestotheclassificationandmeasurementoffinancialinstruments.IFRS9retainsbutsimplifiesthemixedmeasurementmodelandestablishesthreeprimarymeasurementcategoriesforfinancialassets:amortisedcost,fairvaluethroughOCIandfairvaluethroughP&L.UnderIAS39,alltheGroup’sfinancialassets–whichcomprisetradeandotherreceivablesandcashandcashequivalents–areclassifiedwithintheloansandreceivablescategoryoffinancialassets.TheGrouphasdeterminedthatthesefinancialassetsmeettheconditionssetoutinIFRS9tocontinuetobemeasuredatamortisedcost.Otherthanamandatoryreclassificationfromloansandreceivablestofinancialassetsheldin‘holdtocollect’businessmodel,theadoptionofIFRS9willhavenoimpactontheGroup’sclassificationandmeasurementmodelforfinancialassets.

TherewillbenoimpactontheGroup’saccountingforfinancialliabilities,asthenewrequirementsonlyaffecttheaccountingforissuedfinancialliabilitiesthataredesignatedatfairvaluethroughprofitorlossandtheGroupdoesnothaveanysuchliabilities.ThederecognitionruleshavebeentransferredfromIAS39andhavenotbeenchanged.TheadoptionofIFRS9willaccordinglyhavenoimpactontheGroup’sfinancialliabilities.

ThestandardalsointroducesanewexpectedcreditlossesmodelforfinancialassetsthatreplacestheincurredlossimpairmentmodelusedinIAS39.ThisgenerallyresultsinacceleratingprovisionsforimpairmentascomparedtoIAS39.

TheGroupqualifiesforcertainsimplificationsaffordedinIFRS9inrecognisingimpairmentlosses.TheGroup’stradereceivablesdonotcontainsignificantfinancingcomponents,andaccordinglytheGroupisrequiredunderIFRS9toprovideforlifetimeexpectedcreditlossforalltradereceivables,irrespectiveofwhetherthesehavedemonstratedasignificantincreaseincreditrisk;theGroupwillestimatethelifetimeexpectedcreditlossusingaprovisionsmatrix.TheadoptionofIFRS9isnotexpectedtohaveasignificantimpactonthemeasurementofthesereceivables.ThedirectorsexpectthatimpairmentprovisionsonothertradereceivableswillincreaseupontheadoptionofIFRS9astheycurrentlydonotattractaprovisionunderIAS39;thedirectorsarepresentlyassessingtheresultantprovisionfromtheapplicationoftheprovisionsmatrix.

notes to the consolidated financial statements


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ∙ 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

1.1 BASIS OF PREPARATION continuedWithrespecttoitsamountsduefromrelatedparties,theGroupwillapplythegeneralmodelinIFRS9.Indeterminingwhetherasignificantincreaseincreditriskhasoccurred,theGrouptakesintoaccountthethirdparties’performanceandfinancialposition,aswellasexpectedfuturecash.Withrespecttotheseloans,theGroupisintheprocessofassessingandevaluatingtheimpactofIFRS9.

TheGroup’scashandcashequivalentsareheldwithlocalfinancialinstitutionswithhighqualitystandingorrating.TheGroupwillapplythelowcreditrisksimplificationallowedbyIFRS9,throughwhichsuchbalanceswillbeclassifiedwithin‘stage1’withouttherequirementtocarryoutanassessmentofwhethertherehasbeenasignificantincreaseincreditrisk.Underthepracticalexpedient,theGroupwillestimatethe12-monthexpectedcreditloss.ThedirectorshavehoweverdeterminedthatthehighqualityofthefinancialinstitutionsissuchthattheadoptionofIFRS9willnothaveamaterialimpactonthenetcarryingamountofthesefinancialassets.

Thenewstandardalsointroducesexpandeddisclosurerequirementsandchangesinpresentation.TheseareexpectedtochangethenatureandextentoftheGroup’sdisclosuresaboutitsfinancialinstrumentsparticularlyintheyearoftheadoptionofthenewstandard.

UnderIFRS16,‘Leases’,acontractis,orcontains,aleaseifthecontractconveystherighttocontroltheuseofanidentifiedassetforperiodoftimeinexchangeforconsideration.IFRS16requireslesseestorecognisealeaseliabilityreflectingfutureleasepaymentsanda‘right-of-useasset’forvirtuallyallleasecontracts;anoptionalexemptionisavailableforcertainleaseswhosetermisofnotmorethanoneyear,aswellasleasesoflow-valueassets.Thestandardiseffectiveforannualperiodsbeginningonorafter1January2019andalthoughearlierapplicationispermitted,theGroupdoesnotintendtoadoptthestandardearlierthanitsmandatoryeffectivedate.TheGrouphasnotyetdeterminedtowhatextentthesecommitmentswillresultintherecognitionofanassetandaliabilityforfuturepaymentsandhowthiswillaffecttheGroup’sprofitandclassificationofcashflows.Someofthecommitmentsmaybecoveredbytheexceptionforshort-termandlow-valueleasesandsomecommitmentsmayrelatetoarrangementsthatwillnotqualifyasleasesunderIFRS16.Atthisstage,theGroupisstillintheprocessofassessingandevaluatingtheimpactofIFRS16ontheGroup’soperatingleaseswheretheGroupisthelessee.

1.1.1 VOLUNTARY CHANGES IN ACCOUNTING POLICY AND DISCLOSURES

Duringthefinancialyear31January2018,theCompanychangedtheaccountingpolicywithrespecttosubsequentmeasurementofinvestmentpropertywherebytheseassetswillbesubsequentlymeasuredatfairvalueattheendofeachreportingperiod.Fairvalueisbasedonactivemarketsprices,adjusted,ifnecessary,foranydifferenceinthenature,locationorconditionofthespecificasset.GainsorlossesarisingfromchangesinthefairvalueofinvestmentpropertypolicyhasbeenappliedretrospectivelyinaccordancewiththerequirementsofIAS8,‘Accountingpolicies,changesinaccountingestimatesanderrors’.Accordingly,theCompany

adjustedtheopeningbalanceofeachaffectedcomponentofequityfortheearliestperiodpresentedinthesefinancialstatementsandothercomparativeamountsdisclosedforthecomparativeperiodpresentedasiftherevisedaccountingpolicyhasalwaysbeenapplied.Consequently,andinlinewiththerequirementsofIAS1,threestatementsoffinancialposition,beingasat1February2016,31January2017and 31January2018,arebeingpresented.

Priortothechangeinaccountingpolicy,investmentpropertywassubsequentlycarriedathistoricalcostlessaccumulateddepreciationandaccumulatedimpairmentlosses.Thecapitalisedcostsofbuildingwereamortisedover50yearsatmost,inaccordancewiththeirusefullives.Thefinancialimpactsofthischangeinaccountingpolicycomprisetheretrospectiverecognitionofafairvaluegainof€10.1million(Note5),ofadeferredtaxliabilityof€1.7million(Note13)andofthenetresultanteffectof€8.5millionwithinfairvaluegainsreserveasat1February2017(Note12).Thischangeinaccountingpolicyalsoneccessitatedthereversalofaccumulateddepreciationoninvestmentproperty.Theretrospectivederecognitionofaccumulateddepreciationamountedto€1.1million(Note5).InaccordancewiththerequirementsofIAS1,theNotesforinvestmentproperty,deferred tax and the fair value gains reserve include

informationasat31January2017and31January2018.

1.1.2 SIGNIFICANT TRANSACTIONS – RESTRUCTURING OF TRIDENT ESTATES PLC

FollowingtheapprovalbytheshareholdersofSimondsFarsonsCisk(theParent)attheAnnualGeneralMeetingheldon27June2017,itsBoardofDirectorscompletedthenecessaryarrangementsconcerningthespin-offofTridentEstatesplctotheParent’sshareholders.

On26October2017,anumberofpropertytransfersformingpartoftheGroup’srestructuringwereexecuted.ThesenamelyrelatedtotheacquisitionofthefaçadebytheGroup(Note5),thedisposalofnon-currentassetsheldbytheGrouptoitsParent(Note10)andtheacquisitionoftheremaining50%shareholdinginSliemaFortCompanyLimitedbytheCompany(Notes6and24).Onthesamedate,theParentrestructuredtheCompany’sshareholdingto€30,000,000toreflectitscapitalstructure(Note11)inpreparationforthespin-offoftheGroup.TheabovetransactionshadasignificantimpactontheaccountsoftheGroupandtheCompany.

PursuanttotheListingRules,on18December2017,theListingAuthorityauthorisedtheadmissibilitytolistingoftheTridentShares.On20December2017,theBoardofDirectorsoftheParentdeclaredanetinterimdividendof€37,211,000(equivalentto€1.2403667pershare)thatwassettledinkindthroughthedistributionoftheParent’sentireshareholdinginTridentEstatesplc(being30,000,000ordinarysharesofanominalvalueof€1pershare)totheParent’sshareholderspro ratatothenumberofsharesheldbytheminSimondsFarsonsCiskplcatcloseofbusinesson21December2017.TheTridentshareswereadmittedtotheOfficialListoftheMaltaStockExchangeon30January2018,andtradingcommencedonthefollowingday.



1.2 CONSOLIDATION

(A) SUBSIDIARIES

SubsidiariesareallentitiesoverwhichtheGrouphasthepowertogovernthefinancialandoperatingpoliciesgenerallyaccompanyingashareholdingofmorethanonehalfofthevotingrights.TheexistenceandeffectofpotentialvotingrightsthatarecurrentlyexercisableorconvertibleareconsideredwhenassessingwhethertheGroupcontrolsanotherentity.SubsidiariesarefullyconsolidatedfromthedateonwhichcontrolistransferredtotheGroup.Theyarede-consolidatedfromthedatethatcontrolceases.

TheGroupusestheacquisitionmethodofaccountingtoaccountforbusinesscombinations.Theconsiderationtransferredfortheacquisitionofasubsidiaryisthefairvaluesoftheassetstransferred,theliabilitiesincurredandtheequityinterestsissuedbytheGroup.Theconsiderationtransferredincludesthefairvalueofanyassetorliabilityresultingfromacontingentconsiderationarrangement.Acquisition-relatedcostsareexpensedasincurred.Identifiableassetsacquiredandliabilitiesandcontingentliabilitiesassumedinabusinesscombinationaremeasuredinitiallyattheirfairvaluesattheacquisitiondate.Onanacquisition-by-acquisitionbasis,theGrouprecognisesanynon-controllinginterestintheacquireeeitheratfairvalueoratthenon-controllinginterest’sproportionateshareoftheacquiree’snetassets.

The excess of the consideration transferred, the amount

ofanynon-controllinginterestintheacquireeandtheacquisition-datefairvalueofanypreviousequityinterestintheacquireeoverthefairvalueoftheGroup’sshareoftheidentifiablenetassetsacquiredisrecordedasgoodwill.Ifthisislessthanthefairvalueofthenetassetsofthesubsidiaryacquiredinthecaseofabargainpurchase,thedifferenceisrecogniseddirectlyinprofitorloss(Note1.8).

Inter-companytransactions,balancesandunrealisedgainsontransactionsbetweenGroupcompaniesareeliminated.Unrealisedlossesarealsoeliminatedunlessthetransactionprovidesevidenceofanimpairmentoftheassettransferred.AccountingpoliciesofsubsidiarieshavebeenchangedwherenecessarytoensureconsistencywiththepoliciesadoptedbytheGroup.

AlistingofthesubsidiariesissetoutinNote27tothe financialstatements.

(B) ASSOCIATES

AssociatesareallentitiesoverwhichtheGrouphas significantinfluencebutnotcontrol,generallyaccompanyingashareholdingofbetween20%and50%ofthevotingrights.Intheconsolidatedfinancialstatements,investmentsin associates are accounted for using the equity method of

accountingandareinitiallyrecognisedatcost.TheGroup’sinvestmentinassociatesincludesgoodwillidentifiedonacquisitionnetofanyaccumulatedimpairmentloss. SeeNote1.7fortheimpairmentofnon-financialassetsincludinggoodwill.

TheGroup’sshareofitsassociates’post-acquisitionprofitsorlosses is recognised in the income statement, and its share of

post-acquisitionothercomprehensiveincomeisrecognisedinothercomprehensiveincome.Thecumulativepost-acquisitionmovementsareadjustedagainstthecarryingamountoftheinvestment.WhentheGroup’sshareoflossesin an associate equals or exceeds its interest in the associate,

includinganyotherunsecuredreceivables,theGroupdoesnotrecognisefurtherlosses,unlessithasincurredobligationsormadepaymentsonbehalfoftheassociate.

UnrealisedgainsontransactionsbetweentheGroupanditsassociatesareeliminatedtotheextentoftheGroup’sinterestintheassociates.Unrealisedlossesarealsoeliminatedunlessthetransactionprovidesevidenceofanimpairmentoftheassettransferred.AccountingpoliciesofassociateshavebeenchangedwherenecessarytoensureconsistencywiththepoliciesadoptedbytheGroup.

Iftheownershipinterestinanassociateisreducedbutsignificantinfluenceisretained,onlyaproportionateshareoftheamountspreviouslyrecognisedinothercomprehensiveincomearereclassifiedtoprofitorlosswhereappropriate.

Dilution gains and losses arising in investments in associates

arerecognisedinprofitorloss.

ThesoleassociateoftheGroupisdisclosedinNote7tothefinancialstatements.

1.3 FOREIGN CURRENCY TRANSLATION

(A) FUNCTIONAL AND PRESENTATION CURRENCY

ItemsincludedinthefinancialstatementsofeachoftheGroup’sentitiesaremeasuredusingthecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates(‘thefunctionalcurrency’).TheconsolidatedfinancialstatementsarepresentedineurowhichistheGroup’spresentationcurrency.

(B) TRANSACTIONS AND BALANCES

Foreign currency transactions are translated into the

functionalcurrencyusingtheexchangeratesprevailingatthe dates of the transactions. Foreign exchange gains and

losses resulting from the settlement of such transactions and

from the translation at year end exchange rates of monetary

assetsandliabilitiesdenominatedinforeigncurrenciesarerecognisedinprofitorloss.

1.4 BUSINESS COMBINATIONSThe acquisition method of accounting is used to account

forallbusinesscombinations,regardlessofwhetherequityinstruments or other assets are acquired. The consideration

transferredfortheacquisitionofasubsidiarycomprisesthefairvaluesoftheassetstransferred,liabilitiesincurredtotheformerownersoftheacquiredbusiness,equityinterestsissuedbytheGroup,fairvalueofanyassetorliabilityresulting from a contingent consideration arrangement and

fairvalueofanypreexistingequityinterestinthesubsidiary.



1.4 BUSINESS COMBINATIONS continuedIdentifiableassetsacquiredandliabilitiesandcontingentliabilitiesassumedinabusinesscombinationare,withlimitedexceptions,measuredinitiallyattheirfairvaluesattheacquisitiondate.TheGrouprecognisesanynon-controllinginterestintheacquiredentityonanacquisition-by-acquisitionbasiseitheratfairvalueoratthenon-controllinginterest’sproportionateshareoftheacquiredentity’snetidentifiableassets.Acquisition-relatedcostsareexpensedasincurred.

The excess of the consideration transferred, the amount of

anynon-controllinginterestintheacquiredentity;andtheacquisition-datefairvalueofanypreviousequityinterestintheacquiredentityoverthefairvalueofthenetidentifiableassetsacquired,isrecordedasgoodwill.Ifthoseamountsarelessthanthefairvalueofthenetidentifiableassetsofthesubsidiaryacquired,thedifferenceisrecogniseddirectlyinprofitorlossasabargainpurchase.Wheresettlementofanypartofcashconsiderationisdeferred,theamountspayableinthefuturearediscountedtotheirpresentvalueasatthedateof exchange. The discount rate used is the entity’s incremental

borrowingrate,beingtherateatwhichasimilarborrowingcouldbeobtainedfromanindependentfinancierundercomparabletermsandconditions.

Ifthebusinesscombinationisachievedinstages,theacquisitiondatecarryingvalueoftheacquirer’spreviouslyheld equity interest in the acquiree is remeasured to fair value

attheacquisitiondate.Anygainsorlossesarisingfromsuchremeasurementarerecognisedinprofitorloss.

1.5 PROPERTY, PLANT AND EQUIPMENTProperty,plantandequipmentisinitiallyrecordedathistoricalcostandissubsequentlystatedlessdepreciation.Historicalcostincludesexpenditurethatisdirectlyattributabletotheacquisitionoftheitems.

Subsequentcostsareincludedintheasset’scarryingamountorrecognisedasaseparateasset,asappropriate,onlywhenitisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheGroupandthecostoftheitemcanbemeasuredreliably.Thecarryingamountofthereplacedpartisderecognised.Allotherrepairsandmaintenancearechargedtoprofitorlossduringthefinancialperiodinwhichthey are incurred.

Depreciationiscalculatedusingthestraight-linemethodto allocate their cost or revalued amounts to their residual

valuesovertheirestimatedusefullives,asfollows:

• Motorvehicles 20%• Computerequipment 25%

Theassets’residualvaluesandusefullivesarereviewed,andadjustedifappropriate,attheendofeachreportingperiod.

Anasset’scarryingamountiswrittendownimmediatelytoitsrecoverableamountiftheasset’scarryingamountisgreaterthanitsestimatedrecoverableamount(seeNote1.8).

Gainsandlossesondisposalsaredeterminedbycomparingtheproceedswithcarryingamountandarerecognisedinprofitorloss.

1.6 INVESTMENT PROPERTYPropertythatisheldforlong-termrentalyieldsorforcapitalappreciationorboth,andisnotoccupiedbytheGroup,isclassifiedasinvestmentproperty.Investmentpropertycomprisesfreeholdandleaseholdlandandbuildings,andlandandbuildingsheldunderlong-termoperatingleases.

Investmentpropertyismeasuredinitiallyatitshistoricalcost,includingrelatedtransactioncostsandborrowingcosts.Historicalcostincludesexpenditurethatisdirectlyattributabletotheacquisitionoftheitems.Borrowingcostswhichareincurredforthepurposeofacquiringorconstructingaqualifyinginvestmentpropertyarecapitalisedaspartofitscost.Borrowingcostsarecapitalisedwhileacquisitionorconstructionisactivelyunderway.Capitalisationofborrowingcostsisceasedoncetheassetissubstantiallycompleteandissuspendedifthedevelopmentoftheassetissuspendedannually.Fairvalueisbasedonactivemarketprices,adjusted,ifnecessary,foranydifferenceinthenature,locationorconditionofthespecificasset.Iftheinformationisnotavailable,theGroupusesalternativevaluationmethodssuchasrecentpricesonlessactivemarketsordiscountedcashflowprojections.

Thesevaluationsarereviewedannually.Investmentpropertythatisbeingredevelopedforcontinuinguseasinvestmentpropertyorforwhichthemarkethasbecomelessactivecontinuestobemeasuredatfairvalue.Fairvaluemeasurementonpropertyunderconstructionisonlyappliedifthefairvalueisconsideredtobereliablymeasurable.Thefairvalueofinvestmentpropertyreflects,amongotherthings,rentalincomefromcurrentleasesandassumptionsaboutrentalincomefromfutureleasesinthelightofcurrentmarketconditions.Thefairvaluealsoreflects,onasimilarbasis,anycashoutflowsthatcouldbeexpectedinrespectoftheproperty.

Subsequentexpenditureiscapitalisedtotheasset’scarryingamountonlywhenitisprobablethatfutureeconomicbenefitsassociatedwiththeexpenditurewillflowtotheGroupandthecostoftheitemcanbemeasuredreliably.Allotherrepairsandmaintenancecostsarechargedtoprofitorlossduringthefinancialperiodinwhichtheyareincurred.Whenpartofaninvestmentpropertyisreplaced,thecarryingamountofthereplacedpartisderecognised.

Thefairvalueofinvestmentpropertydoesnotreflectfuturecapitalexpenditurethatwillimproveorenhancethepropertyanddoesnotreflecttherelatedfuturebenefitsfromthisfutureexpenditureotherthanthosearationalmarketparticipantwouldtakeintoaccountwhendeterminingthevalueoftheproperty.

Changesinfairvaluesarerecognisedinprofitorloss.Investmentpropertiesarederecognisedeitherwhentheyhavebeendisposedoforwhentheinvestmentpropertyispermanentlywithdrawnfromuseandnofutureeconomicbenefitisexpectedfromitsdisposal.



1.6 INVESTMENT PROPERTY continuedIfaninvestmentpropertybecomesowner-occupied,itisreclassifiedasproperty,plantandequipment.Itsfairvalueatthedateofthereclassificationbecomesitscostforsubsequentaccountingpurposes.WhentheGroupdecidestodisposeofaninvestmentpropertywithoutdevelopment,theGroupcontinuestotreatthepropertyasaninvestmentproperty.Similarly,iftheGroupbeginstoredevelopanexistinginvestmentpropertyforcontinuedfutureuseasinvestmentproperty,itremainsaninvestmentpropertyduringtheredevelopment.

Ifanitemofproperty,plantandequipmentbecomesaninvestmentpropertybecauseitsusehaschanged,anydifferenceresultingbetweenthecarryingamountandthefairvalue of this item at the date of transfer is treated in the same

wayasarevaluationunderIAS16.Anyresultingincreaseinthecarryingamountofthepropertyisrecognisedinprofitorlosstotheextentthatitreversesapreviousimpairmentloss;withanyremainingincreaserecognisedinothercomprehensiveincome,directlytorevaluationsurpluswithinequity.Anyresultingdecreaseinthecarryingamountofthepropertyisinitiallychargedtoothercomprehensiveincomeagainstanypreviouslyrecognisedrevaluationsurplus,withanyremainingdecreasechargedtoprofitorloss.Uponthedisposalofsuchinvestmentproperty,anysurpluspreviouslyrecordedinequityistransferredtoretainedearnings;thetransferisnotmadethroughprofitorloss.

Whereaninvestmentpropertyundergoesachangeinuse,evidencedbycommencementofdevelopmentwithaviewtosale,thepropertyistransferredtoinventories.Aproperty’sdeemedcostforsubsequentaccountingasinventoriesisitsfair value at the date of change in use.

1.7 IMPAIRMENT OF NON-FINANCIAL ASSETSAssetsthathaveanindefiniteusefullifearenotsubjecttoamortisationandaretestedannuallyforimpairment.Assetsthataresubjecttoamortisationordepreciationarereviewedforimpairmentwhenevereventsorchangesincircumstancesindicatethatthecarryingamountmaynotberecoverable.Animpairmentlossisrecognisedfortheamountbywhichtheasset’scarryingamountexceedsitsrecoverableamount.Therecoverableamountisthehigherofanasset’sfairvaluelesscoststosellandvalueinuse.Forthepurposesofassessingimpairment,assetsaregroupedatthelowestlevelsforwhichthereareseparatelyidentifiablecashflows(cash-generatingunits).Non-financialassetsotherthangoodwillthatsufferedanimpairmentarereviewedforpossiblereversaloftheimpairmentattheendofeachreportingperiod.

1.8 FINANCIAL ASSETS

1.8.1 CLASSIFICATION

TheGroupclassifiesitsfinancialassets,(otherthaninvestmentsinassociates)intheloansandreceivablescategory.Theclassificationdependsonthepurposeforwhichthefinancialassetswereacquired.Managementdeterminestheclassificationofitsfinancialassetsatinitialrecognition.

Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.TheyarisewhentheGroupprovidesmoney,goodsorservicesdirectlytoadebtorwithnointentionoftradingtheasset.Theyareincludedincurrentassets,except

formaturitiesgreaterthantwelvemonthsaftertheendofthereportingperiod.Theseareclassifiedasnon-currentassets.TheGroup’sloansandreceivablescomprise‘tradeandotherreceivables’and‘cashandcashequivalents’inthestatementoffinancialposition(Notes1.9and1.11).

1.8.2 RECOGNITION AND MEASUREMENT

TheGrouprecognisesafinancialassetinitsstatementoffinancialpositionwhenitbecomesapartytothecontractualprovisionsoftheinstrument.Regularwaypurchasesandsalesoffinancialassetsarerecognisedonsettlementdate,whichisthedateonwhichanassetisdeliveredtoorbytheGroup.Anychangeinfairvaluefortheassettobereceivedisrecognisedbetweenthetradedateandsettlementdateinrespectofassetswhicharecarriedatfairvalueinaccordancewiththemeasurementrulesapplicabletotherespectivefinancialassets.

Loansandreceivablesareinitiallyrecognisedatfairvalueplustransactioncostsandaresubsequentlycarriedatamortisedcostusingtheeffectiveinterestmethod.Amortisedcostistheinitialmeasurementamountadjustedfortheamortisationofanydifferencebetweentheinitialandmaturityamountsusing the effective interest method. Financial assets are

derecognisedwhentherightstoreceivecashflowsfromthefinancialassetshaveexpiredorhavebeentransferredandtheGrouphastransferredsubstantiallyallrisksandrewardsofownershiporhasnotretainedcontroloftheasset.

1.8.3 IMPAIRMENT

TheGroupassessesattheendofeachreportingperiodwhetherthereisobjectiveevidencethatafinancialassetorgroupoffinancialassetsisimpaired.Afinancialassetoragroupoffinancialassetsisimpairedandimpairmentlossesareincurredonlyifthereisobjectiveevidenceofimpairmentas a result of one or more events that occurred after the

initialrecognitionoftheasset(a‘lossevent’)andthatlossevent(orevents)hasanimpactontheestimatedfuturecashflowsofthefinancialassetorgroupoffinancialassetsthatcanbereliablyestimated.TheGroupfirstassesseswhetherobjectiveevidenceofimpairmentexists.ThecriteriathattheGroupusestodeterminethatthereisobjectiveevidenceofanimpairmentlossinclude:

• significantfinancialdifficultyoftheissuerorobligor;• abreachofcontract,suchasadefaultordelinquencyininterestorprincipalpayments;

• itbecomesprobablethattheborrowerwillenterbankruptcyorotherfinancialreorganisation.

Forfinancialassetscarriedatamortisedcost,theamountofthelossismeasuredasthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflows(excludingfuturecreditlossesthathavenotbeenincurred)discountedatthefinancialasset’soriginaleffectiveinterest rate. The asset’s carrying amount is reduced and

theamountofthelossisrecognisedinprofitorloss.If,inasubsequentperiod,theamountoftheimpairmentlossdecreasesandthedecreasecanberelatedobjectivelytoaneventoccurringaftertheimpairmentwasrecognised(suchasanimprovementinthedebtor’screditrating),thereversalofthepreviouslyrecognisedimpairmentlossisrecognisedinprofitorloss.



1.9 TRADE AND OTHER RECEIVABLESTradereceivablescompriseamountsduefromcustomersforservicesperformedintheordinarycourseofbusiness.Ifcollectionisexpectedinoneyearorless(orinthenormaloperatingcycleofthebusinessiflonger),theyareclassifiedascurrentassets.Ifnot,theyarepresentedasnon-currentassets.

Tradeandotherreceivablesarerecognisedinitiallyatfairvalueandsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod,lessprovisionforimpairment(Note1.8.3).Thecarryingamountoftheassetisreducedthroughtheuseofanallowanceaccount,andtheamountofthelossisrecognisedinprofitorloss.Whenareceivableisuncollectible,itiswrittenoffagainsttheallowanceaccountfortradeandotherreceivables.Subsequentrecoveriesofamountspreviouslywrittenoffarecreditedagainstprofitorloss.

1.10 CURRENT AND DEFERRED TAX Thetaxexpensefortheperiodcomprisescurrentanddeferred tax. Tax is recognised in the income statements

excepttotheextentthatitrelatestoitemsrecogniseddirectlyinothercomprehensiveincome.Inthiscasethetaxisalsorecognisedinothercomprehensiveincome.

Currenttaxistheexpectedtaxpayableonthetaxableincomefortheyear,usingtaxratesenactedorsubstantivelyenactedatthereportingdate,andanyadjustmenttotaxpayableinrespectofpreviousyears.

Deferredtaxisrecognisedusingtheliabilitymethod,ontemporarydifferencesarisingbetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsinthefinancialstatements.However,deferredtaxliabilitiesarenotrecognisediftheyarisefromtheinitialrecognitionofgoodwill;deferred tax is not accounted for if it arises from initial

recognitionofanassetorliabilityinatransactionotherthanabusinesscombinationthatatthetimeofthetransactionaffectsneitheraccountingnortaxableprofitorloss.Deferredtaxisdeterminedusingtaxrates(andlaws)thathavebeenenactedorsubstantiallyenactedbytheendofthereportingperiodandareexpectedtoapplywhentherelateddeferredtaxassetisrealisedorthedeferredtaxliabilityissettled.

UnderthismethodtheGroupisrequiredtomakeaprovisionfordeferredtaxesonthefairvaluationofcertainnon-currentassets. Such deferred tax is charged or credited directly to the

fair value gains reserve.

Deferred tax assets are recognised only to the extent that it

isprobablethatfuturetaxableprofitswillbeavailableagainstwhichthetemporarydifferencescanbeutilised.

Deferredtaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttooffsetcurrenttaxassetsagainstcurrenttaxliabilitiesandwhenthedeferredtaxassetsandliabilitiesrelatetoincometaxleviedbythesametaxationauthorityoneitherthesametaxableentityordifferenttaxableentitieswherethereisanintentiontosettlethebalancesonanetbasis.

1.11 CASH AND CASH EQUIVALENTSCash and cash equivalents are carried in the statements of

financialpositionatfacevalue.Inthestatementsofcashflows,cashandcashequivalentsincludescashinhand,depositsheldatcallwithbanksandbankoverdrafts.Bank

overdraftsareshownwithinborrowingsincurrentliabilitiesinthestatementsoffinancialposition.

1.12 NON-CURRENT ASSETS HELD FOR SALENon-currentassetsheldforsaleareclassifiedasheldforsaleiftheircarryingamountwillberecoveredprincipallythroughasale/disposaltransaction,notthroughcontinuinguse.Theseassetsmaybeacomponentofanentity,adisposalgrouporanindividualnon-currentasset.Non-currentassets(classifiedasassetsheldforsale)arestatedatthelowerofcarryingamount and fair value less costs to sell if their carrying

amountisrecoveredprincipallythroughasaletransactionrather than through a continuing use.

1.13 SHARE CAPITALOrdinarysharesareclassifiedasequity.Incrementalcostsdirectlyattributabletotheissueofnewsharesareshowninequityasadeduction,netoftax,fromtheproceeds.Incrementalcostsdirectlyattributabletotheissueofnewsharesorfortheacquisitionofabusiness,areincludedinthecostofacquisitionaspartofthepurchaseconsideration.

DividenddistributiontotheGroup’sshareholdersisrecognisedasaliabilityintheGroup’sfinancialstatementsintheperiodinwhichthedividendsareapprovedbytheGroup’sshareholders.

1.14 BORROWINGSBorrowingsarerecognisedinitiallyatthefairvalueofproceedsreceived,netoftransactioncostsincurred.Borrowingsaresubsequentlycarriedatamortisedcost;anydifferencebetweentheproceeds(netoftransactioncosts)andtheredemptionvalueisrecognisedinprofitorlossovertheperiodoftheborrowingsusingtheeffectiveinterestmethod.BorrowingsareclassifiedascurrentliabilitiesunlesstheGrouphasanunconditionalrighttodefersettlementoftheliabilityforatleasttwelvemonthsaftertheendofthereportingperiod.

1.15 PROVISIONSProvisionsarerecognisedwhentheGrouphasapresentlegalorconstructiveobligationasaresultofpastevents,itisprobablethatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettletheobligation,andareliableestimateoftheamountoftheobligationcanbemade.

Provisionsaremeasuredatthepresentvalueoftheexpendituresexpectedtoberequiredtosettletheobligationusingapre-taxratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheobligation.Theincreaseintheprovisionduetopassageoftimeisrecognisedasfinancecost.

1.16 TRADE AND OTHER PAYABLESTradepayablescompriseobligationstopayforgoodsorservicesthathavebeenacquiredintheordinarycourseofbusinessfromsuppliers.Accountspayableareclassifiedascurrentliabilitiesifpaymentisduewithinoneyearorless(orinthenormaloperatingcycleofthebusinessiflonger).Ifnot,theyarepresentedasnon-currentliabilities.

Tradeandotherpayablesarerecognisedinitiallyatfairvalueandsubsequentlymeasuredatamortisedcostusingtheeffective interest method.


1.17 FINANCIAL LIABILITIESTheGrouprecognisesafinancialliabilityinitsstatementoffinancialpositionwhenitbecomesapartytothecontractualprovisionsoftheinstrument.TheGroup’sfinancialliabilitiesareclassifiedasfinancialliabilitieswhicharenotatfairvaluethroughprofitorloss(classifiedas‘Otherliabilities’)underIAS39.Financialliabilitiesnotatfairvaluethroughprofitorlossarerecognisedinitiallyatfairvalue,beingthefairvalueof consideration received, net of transaction costs that are

directlyattributabletotheacquisitionortheissueofthefinancialliability.Theseliabilitiesaresubsequentlymeasuredatamortisedcost.TheGroupderecognisesafinancialliabilityfromitsstatementsoffinancialpositionwhentheobligationspecifiedinthecontractorarrangementisdischarged,cancelledorexpired.

1.18 OFFSETTING FINANCIAL INSTRUMENTSFinancialassetsandliabilitiesareoffsetandthenetamountreportedinthestatementsoffinancialpositionwhenthereisalegallyenforceablerighttosetofftherecognisedamountsandthereisanintentiontosettleonanetbasis,orrealisetheassetandsettletheliabilitysimultaneously.

1.19 REVENUE RECOGNITIONRevenuecomprisesthefairvalueoftheconsiderationreceivedorreceivableforthesaleofgoodsandservicesintheordinarycourseoftheGroup’sactivities.Revenueisshownnetofvalue-addedtaxorothersalestaxes,returns,rebatesanddiscounts.Revenueisrecognisedasfollows:

(A) PROPERTY-RELATED INCOME

Rentalincomefrominvestmentpropertyisrecognisedinprofitorlossonastraightlinebasisoverthetermofthelease.Leaseincentivesgrantedarerecognisedasanintegralpartofthe total rental income, over the term of the lease.

(B) FINANCE INCOME

Financeincomeisrecognisedonatime-proportionbasisusingtheeffectiveinterestmethod.Whenareceivableisimpaired,theGroupreducesthecarryingamounttoitsrecoverableamount,beingtheestimatedfuturecashflowsdiscounted at the original effective interest rate of the

instrument,andcontinuesunwindingthediscountas financeincome.

1.20 OPERATING LEASESWhere a group is a lessor

Assetsleasedoutunderoperatingleasesareincludedininvestmentpropertyinthestatementsoffinancialposition.Theseassetsarefairvaluedannuallyonabasisconsistentwithsimilarlyownedinvestmentproperty.

1.21 BORROWING COSTSBorrowingcostswhichareincurredforthepurposeofacquiringorconstructingqualifyingproperty,plantandequipmentorinvestmentpropertyarecapitalisedaspartof

itscost.Borrowingcostsarecapitalisedwhileacquisitionorconstructionisactivelyunderway,duringtheperiodoftimethatisrequiredtocompleteandpreparetheassetforitsintendeduse.Capitalisationofborrowingcostsisceasedoncetheassetissubstantiallycompleteandissuspendedifthedevelopmentoftheassetissuspended.Allotherborrowingcostsareexpensed.Borrowingcostsarerecognisedforallinterest-bearinginstrumentsonanaccrualbasisusingtheeffectiveinterest method. Interest costs include the effect of amortising

anydifferencebetweeninitialnetproceedsandredemptionvalueinrespectoftheGroup’sinterest-bearingborrowings.

1.22 EARNINGS PER SHARETheGrouppresentsbasicearningspershare(EPS)dataforitsordinaryshares.BasicEPSiscalculatedbydividingtheconsolidatedprofitorlossattributabletoordinaryshareholdersoftheCompanybytheweightedaveragenumberofordinarysharesoutstandingattheendoftheperiod.

2. Financial risk management

2.1 FINANCIAL RISK FACTORSTheGroup’sactivitiespotentiallyexposeittoavarietyoffinancialrisks:marketrisk(includingfairvalueinterestrateriskandcashflowinterestraterisk),creditriskandliquidityrisk.TheGroup’soverallriskmanagementfocusesontheunpredictabilityoffinancialmarketsandseekstominimisepotentialadverseeffectsontheGroup’sfinancialperformance.TheGroup’sboardofdirectorsprovidesprinciplesforoverallGroupriskmanagement,aswellaspoliciescoveringrisksreferredtoaboveandspecificareassuchasinvestmentofexcessliquidity.TheGroupdidnotmakeuseofderivatefinancialinstrumentstohedgecertainriskexposuresduringthecurrentandprecedingfinancialyears.

(A) MARKET RISK

(i) Cash flow and fair value interest rate risk

Asat31January2018,theGroupandCompanyhavenosignificantinterest-bearingassetsthataresubjecttofloatingorfixedinterestrates.Inprioryear,theGroup’sfixedinterestinstrumentscomprisedofamountsduetothepreviousparent(Note14),whilebesidesthelatter,theCompany’sfixedinterestinstrumentsincludedamountsduefromsubsidiaries(Note8).TheseinstrumentsweremeasuredatamortisedcostandaccordinglytheGroupandtheCompanywerenotexposedtofairvalueinterestraterisk.Managementmonitorstheimpactofchangesinmarketinterestratesonamountsreportedintheincomestatementinrespectoftheseinstruments. Based on this analysis, management considers

thepotentialimpactonprofitorlossofadefinedinterestrateshiftthatisreasonablypossibleattheendofthereportingperiodtobeimmaterial.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ∙ 2. FINANCIAL RISK MANAGEMENT continued

(B) CREDIT RISK

TheGroup’sandCompany’screditriskarisesfromcashandcashequivalents,andamountsduefromrelatedpartiesandsubsidiariesrespectively.Thecarryingamountofthesefinancialassetsrepresentsthemaximumcreditexposure,whichattheendofthereportingperiodwas:

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000

Carrying amountsTradeandotherreceivables(Note8) 391 3,568 11,574 3,632

Cashandcashequivalents(Note9) 6,228 20 6,205 –6,619 3,588 17,779 3,632

TheGroupandtheCompanybankonlywithlocalfinancialinstitutionswithhighqualitystandingorrating.

TheGroup’sandtheCompany’soperationsareprincipallycarried out in Malta and their revenues originate from clients

basedinMalta.TheGrouppresentlyhasasmallnumberofclientsastenants,thesemainlyrelatetocompanieswithintheFarsonsGroup.TheGroupassessedtherespectivecreditriskandconcludedthatdespitethisconcentration,thesetenantsareabletohonourtheircontractualcommitments.However,incommonwithsimilarbusinessconcerns,thefailureofspecificlargecustomerscouldhaveamaterialimpactontheGroup’sresults.

TheCompany’sreceivablesincludesignificantamountsduefromsubsidiariesandrelatedpartiesformingpartoftheFarsonsGroup(seeNote8).TheGroup’sseniormanagementteammonitorsintra-groupcreditexposuresatindividualentitylevelonaregularbasisandensurestimelyperformanceoftheseassetsinthecontextofoverallGroupliquiditymanagement.TheGroupassessesthecreditqualityoftheserelatedpartiestakingintoaccountfinancialposition,performanceandotherfactors.TheGrouptakescognisanceoftherelatedpartyrelationshipwiththeseentitiesandmanagementdoesnotexpectanylossesfromnon-performanceordefault.

(C) LIQUIDITY RISK

TheGroupandCompanyareexposedtoliquidityriskinrelationtomeetingfutureobligationsassociatedwithitsfinancialliabilities,whichcompriseprincipallytradeandotherpayables,amountsowedtorelatedpartiesandsubsidiariesrespectively(refertoNote14).PrudentliquidityriskmanagementincludesmaintainingsufficientcashandcommittedcreditlinestoensuretheavailabilityofanadequateamountoffundingtomeettheCompany’sobligations.

Managementmonitorsliquidityriskbymeansofcashflowforecastsonthebasisofexpectedcashflowsoveratwelvemonthperiodandensuresthatadequatefinancingfacilitiesareinplaceforthecomingyear.ThecarryingamountsoftheGroup’sandCompany’sassetsandliabilitiesareallduewithinthenexttwelvemonths.

2.2 CAPITAL RISK MANAGEMENT TheGroup’sobjectiveswhenmanagingcapitalaretosafeguardtheGroup’sabilitytocontinueasagoingconcerninordertoprovidereturnsforshareholdersandbenefitsforotherstakeholdersandtomaintainanoptimalcapitalstructuretoreducethecostofcapital.

ThecapitaloftheGroupisnotmanagedwithaviewofmaintainingacontrolledrelationshipbetweencapitalandborrowingssincetheGroupdoesnothavelong-termborrowingsanditisthedirectors’viewthatequityisconsideredtobethecapitaloftheCompany.

Inordertomaintainoradjustthecapitalstructure,theGroupmayadjusttheamountofdividendspaidtoshareholders,issuenewsharesorsellassetstoreducedebt.

2.3 FAIR VALUES OF INSTRUMENTS NOT CARRIED AT FAIR VALUEAt31January2018and2017,thecarryingamountsofcashatbank,tradeandotherreceivablesandtradeandotherpayablesreflectedinthefinancialstatementsarereasonableestimatesoffairvalueinviewofthenatureoftheseinstrumentsortherelativelyshortperiodoftimebetweentheoriginationoftheinstrumentsandtheirexpectedrealisation.Thefairvalueofamountsowedbysubsidiarieswhicharecurrentorrepayableon demand is equivalent to their carrying amount.

Thefairvalueofnon-currentfinancialinstrumentsfordisclosurepurposesisestimatedbydiscountingthefuturecontractualcashflowsatthecurrentmarketinterestratethatisavailabletotheGroupforsimilarfinancialinstruments.ThefairvalueoftheGroup’snon-currentfloatinginterestratebankborrowingsattheendofthereportingperiodisnotsignificantlydifferentfromthecarryingamounts.

3. Critical accounting estimates and judgementsEstimatesandjudgementsarecontinuallyevaluatedandbasedonhistoricalexperienceandotherfactorsincludingexpectationsoffutureeventsthatarebelievedtobereasonableunderthecircumstances.

IntheopinionoftheDirectors,theaccountingestimatesandjudgementsmadeinthecourseofpreparingthesefinancialstatements,exceptasdisclosedinNote5,arenotdifficult,subjectiveorcomplextoadegreewhichwouldwarranttheirdescriptionascriticalintermsoftherequirementsofIAS1.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued

4. Property, plant and equipment

GROUP AND COMPANY

2018 2017

€’000 €’000

Year ended 31 JanuaryOpeningnetbookamount 13 18Additions 10 –Depreciation (5) (5)Closingnetbookamount 18 13

At 31 JanuaryCost or valuation 34 24

Accumulateddepreciationandimpairment (16) (11)Closing carrying amount 18 13

Depreciationchargeforthefinancialyearisincludedinoperatingexpenses.


5. Investment property

GROUP

2018 2017

€’000 €’000

Year ended 31 JanuaryOpeningnetbookamount 21,014 20,047

Fair value gains 165 4,667

Additions(Note1.1.2) 10,764 –Acquisitionofsubsidiary(Note24) 1,100 –Disposals – (1,155)Transfertoassetsheldforsale(Note10) – (2,545)Closing net book value 33,043 21,014

At 31 JanuaryCost 17,381 5,517

Fair value gains 15,662 15,497Net book amount 33,043 21,014

Propertyadditionsin2018relatetothetransferofthefaçadepropertyfromSimondsFarsonsCiskplctotheGroupinthelatterpartof2017aspartoftheGrouprestructuringandthespin-offprocessoftheGroup.

COMPANY

2018 2017

€’000 €’000

Year ended 31 JanuaryOpeningcarryingamountaspreviouslyreported 4,409 6,777

Effectofchangeinaccountingpolicy(Note1.1.1) 8,876 11,191Asrestated 13,285 17,968

Fair value gains – 3,957Transfertoassetsheldforsale(Note10) (4,105) (8,640)Closing net book value 9,180 13,285

At 31 JanuaryCost 3,897 4,409Fair value gains 5,283 8,876Net book amount 9,180 13,285



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ∙ 5. INVESTMENT PROPERTY continued

FAIR VALUE OF PROPERTYTheGroupisrequiredtoanalysenon-financialassetscarriedatfairvaluebylevelofthefairvaluehierarchywithinwhichthe recurring fair value measurements are categorised in their

entirety(level1,2or3).Thedifferentlevelsofthefairvaluehierarchyhavebeendefinedasfairvaluemeasurementsusing:

• Quotedprices(unadjusted)inactivemarketsforidenticalassets(Level1);

• InputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheasset,eitherdirectly(thatis,asprices)orindirectly(thatis,derivedfromprices)(Level2);

• Inputsfortheassetthatarenotbasedonobservablemarketdata(thatis,unobservableinputs)(Level3).

On31January2018,theDirectorsapprovedthevaluationsoftheGroup’sinvestmentpropertyafterassessingthevaluationsmadeduring2018bydulyappointedindependentcharteredarchitecturalfirms.Thesevaluationsweredeterminedonthebasisofopenmarketvaluesafterconsideringtheintrinsicvalueofthepropertyandnetpotentialreturns.In2017,thesevaluationsresultedinanincreaseinthevalueofpropertyclassifiedunderinvestmentpropertyby€4.6million.Whilein2018,thesevaluationsresultedinanincreaseinthevalueofpropertyclassifiedunderinvestmentpropertyby€165,000.

Alltherecurringpropertyfairvaluemeasurementsat 31January2018usesignificantunobservableinputsandareaccordinglycategorisedwithinlevel3ofthefairvaluationhierarchy.TheGroup’spolicyistorecognisetransfersinandoutoffairvaluehierarchylevelsasofthebeginningofthereportingperiod.Therewerenotransfersbetweendifferentlevels of the fair value hierarchy during the year ended

31January2018.

Areconciliationfromtheopeningbalancetotheclosingbalanceofinvestmentpropertyforrecurringfairvaluemeasurementscategorisedwithinlevel3ofthefairvaluehierarchy,isreflectedinthetableabove.Besidestheabove-notedfairvalueadjustments,theonlymovementsininvestmentpropertyreflectadditions,disposalsandtransferstonon-currentassetsheldforsalecategories(Note10).

VALUATION PROCESSESThevaluationsofthepropertiesareperformedregularlyonthebasisofvaluationreportspreparedbyindependentandqualifiedvaluers.Thesereportsarebasedonboth:

• informationprovidedbytheGroupwhichisderivedfromtheGroup’sfinancialsystemsandissubjecttotheGroup’soverallcontrolenvironment;and

• assumptionsandvaluationmodelsusedbythevaluers–theassumptionsaretypicallymarketrelated.Thesearebasedonprofessionaljudgementandmarketobservation.

Theinformationprovidedtothevaluers,togetherwiththeassumptionsandthevaluationmodelsusedbythevaluers,arereviewedbytheChiefExecutiveOfficer(CEO).Thisincludesareviewoffairvaluemovementsovertheperiod.WhentheCEOconsidersthatthevaluationreportisappropriate,thevaluationreportisrecommendedtotheBoard of Directors. The Board of Directors considers the

valuationreportaspartofitsoverallresponsibilities.

VALUATION TECHNIQUES Theexternalvaluationsofthelevel3propertyhavebeenperformedusingavarietyofmethods,includinganadjustedsalescomparisonapproach,capitalisedrentalsapproachandthediscountedcashflowapproach.Eachpropertywasvaluedusingthemethodconsideredbytheexternalvaluerstobethemostappropriatevaluationmethodforthattypeofproperty;themethod,togetherwiththefairvaluemeasurements,wasapprovedbytheBoardofDirectorsasdescribedabove.

Inviewofthelimitednumberofsalesofsimilarpropertiesinthelocalmarket,thevaluationshavebeenperformedusingunobservableinputs.ThesignificantinputtothesalescomparisonapproachisgenerallyasalespricepercubicmeterrelatedtotransactionsincomparablepropertieslocatedinproximitytotheGroup’sproperty,withsignificantadjustmentsfordifferencesinthesize,age,exactlocationandconditionoftheproperty.

Inthecaseofthecapitalisedrentalsapproach,thesignificantunobservableinputsincludearentalratepersquaremeter(alsoinrespectofcomparablepropertiesasdescribedinthecaseofthesalescomparisonapproach)andacapitalisationrate(appliedat5–6.8%).

Inthecaseofthefaçadeproperty,thediscountedprojectedcashflowsapproachwasappliedtakingintoconsiderationtheproposedprojectedplanssubmittedtotherelevantauthoritiesandprojectedtimeframes.Thesignificantunobservableinputsincludeannualisednetcashinflowspersquaremetre(drivenbypremiummarketrentablerates),anexpectedoccupancyrate,acapitalisationrate(appliedat6.4%),anddevelopmentcosts(basedonhighqualityfinishes).Theresultinggrossdevelopmentreturnhasbeensplitbetweendevelopmentreturn(assumedat11%)withtheresidualvalueattributedtotheCompanylandvalue.



VALUATION TECHNIQUES continued

INFORMATION ABOUT FAIR VALUE MEASUREMENTS USING SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)

GROUP

DESCRIPTION BY CLASS BASED ONHIGHEST AND BEST USE FAIR VALUE

VALUATIONTECHNIQUE

SIGNIFICANTUNOBSERVABLE

INPUT

RANGE OFUNOBSERVABLE

INPUTS

€’000 €

As at 31 January 2018

Currentuseascommercialpremises 12,079 Capitalisedrentalsapproach

Rentalratepersquare meter 80–200

Discounted cash

flowapproachRentalrateper

square meter 80–375

Developablelandformixed use/commercialuse

20,964 Capitalisedrentalsapproach


Salescomparisonapproach

Salespricepercubicmeter 175–250

Discounted cash



As at 31 January 2017

Currentuseascommercialpremises 10,814 Capitalisedrentalsapproach


Discounted cash



Developablelandformixed use/commercialuse

10,200 Capitalisedrentalsapproach


Salescomparisonapproach

Salespricepercubicmeter 175–250

Inthecaseofthesalescomparisonapproachandthecapitalisedrentalsapproach,thehigherthesalespricepercubicmetreortherentalratepersquaremetre,thehighertheresultantfairvaluation.Conversely,thelowertherequireddevelopmentcostpersquaremetreortherentalcapitalisationrate,thehighertheresultantfairvaluation.

Inrespectofthediscountedcashflowapproach,thehighertheannualizednetcashinflows,andgrowthrate,thehigherthefairvalue.Conversely,thelowerthediscountrate,theestimated

developmentcosts,andcapitalisationrateusedincalculatingtheannualizednetcashinflows,thehigherthefairvalue.

Thehighestandbestuseofpropertieswhicharedevelopableformixeduse/commercialusediffersfromtheircurrentuse.TheseassetsmainlycomprisepropertieswhicharecurrentlypartlyusedbytheGrouporwhicharecurrentlyvacant,andwhichwouldrequiredevelopmentorrefurbishmentinordertoaccessthemaximumpotentialcashflowsthatmaybegeneratedfromtheproperties’highestandbestuse.


VALUATION TECHNIQUES continuedThefollowingamountshavebeenrecognisedintheincomestatements:

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000(RESTATED)

Rentalincome 796 727 692 634

Directoperatingexpensesarisingfromrentalof investmentproperty (79) (106) (41) (43)

Iftheinvestmentpropertywerestatedonthehistoricalcostbasis,thecarryingamountswouldbestatedasfollows:

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000

As at 31 JanuaryCost 17,381 5,517 3,897 4,409Accumulateddepreciation (1,716) (978) (684) (605)Netbookamount 15,665 4,539 3,213 3,804

6. Investment in subsidiaries

COMPANY

2018 2017

€’000 €’000

Year ended 31 JanuaryOpeningnetbookamount 261 594Additions – 20

Transferofinvestmentinassociatefollowingsteppedacquisition(Notes7and24) 259 –Disposalofinvestment – (353)Closingnetbookamount 520 261

At 31 JanuaryCost and carrying amount 520 261


Duringthefinancialyear,theCompanyenteredintoapromiseofsaleagreementtoacquiretheremaining50%shareholdinginSliemaFortCompanyLimitedfromFoodChainLimited(arelatedparty).ThisagreementissubjecttoapprovalbytheLandsAuthorityaslandlordoftheleaseholdpropertyownedbythisassociate.Intermsoftheshareacquisitionagreement,the management and control of this associate is effectively

heldbytheCompanyandaccordinglythisinvestmentisbeingtreatedasaninvestmentinsubsidiaryinthebooksoftheCompanyandconsolidatedonalinebylinebasisintheGroupaccounts.TheCompanyhasmadeanadvancepaymentamountingto€951,000withrespecttothisacquisition. Thisamountisdisclosedasanadvancedpaymentundercurrent assets.

Duringfinancialyearending31January2017,theCompanydisposedofitsinvestmentsinPortanierWarehousesLimitedandGalleriaManagementLimitedtoitsultimateparentforaconsiderationamountingto€646,000.

Furthermore,infinancialyear2017,theCompanysubscribedonincorporationto99.9%ofthesharesissuedbyNeptunePropertiesLimitedandTridentParkLimitedforanaggregateamountof€20,000respectively.



7. Investment in associate

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000

Year ended 31 JanuaryOpeningandclosingbookamount 942 965 259 259Share of results of associate 20 (23) – –E ffect of derecognition of investment in associate

followingsteppedacquisition(Note24) (11) – – –Transferofinvestmentinassociatefollowingstepped acquisition(Notes6and24) (951) – (259) –Netbookvalue – 942 – 259

Duringthecurrentfinancialyear,theGroupandCompanyenteredintoapromiseofsaleagreementtoacquiretheremaining50%ofsharesinSliemaFortCompanyLimitedfromarelatedpartyforaconsiderationamountingto€951,000,whichwaspaidinadvance.DetailsofthesteppedacquisitionaredisclosedinNote24.

Detailsoftheformerassociateareshownbelow:

GROUP AND COMPANY

REGISTERED OFFICE CLASS OF SHARES HELD PERCENTAGE OF SHARES HELD

2018 2017

SliemaFortCompanyLimited TheBreweryMdinaRoadMrieħelMalta

Ordinary shares 100 50

8. Trade and other receivables

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000

CurrentAmountsduefromsubsidiaries – – 11,268 1,132

Amountsduefromrelatedparties 391 3,568 306 2,500

Indirect taxation 6 – – –Prepaymentsandaccruedincome 43 10 8 7

440 3,578 11,582 3,639

Amountsduefromsubsidiariesandrelatedpartiesareunsecured,interestfreeandarerepayableondemand.

In2017,amountsduefromsubsidiariesincludedanamountequivalentto€466,000thatwassubjecttoaninterestrateof4.75%.Interestonthisbalanceceasedtobeappliedduringthecourseoftheyear.


9. Cash and cash equivalentsForthepurposesofthestatementsofcashflows,thecashandcashequivalentsattheendofthereportingperiodcomprise thefollowing:

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000

Cashatbankandinhand 6,228 20 6,205 –

10. Non-current assets (and related liabilities) held for saleAsat31January2017,inpreparationforthenoted‘spin-off’,theGroupreclassifiedpropertyandrelatedliabilitiestothenon-currentassetcategoryasdisclosedbelow.TheseclassificationsreflecttherestructuringprocessapprovedbytheFarsonsGroupaimedatspinningoffitspropertysegmentwhichisincorporatedwithintheTridentGroup.On1March2017,thispropertywastransferredtotheCompany’spreviousParentforaconsiderationamountingto€2.5million.

GROUP

2018 2017

€’000 €’000

Non-current assetsAtbeginningoftheyear 2,545 –Transferfrominvestmentproperty – 2,545

Disposals(seenotebelowandNote1.1.2) (2,545) –Closing net book value – 2,545

Liabilities classified as held for saleAtbeginningoftheyear 331 –Deferredtaxattributabletonon-currentassetsheldforsale(Note13) – 331

Releaseofdeferredtaxfollowingdisposalofnon-currentassetsheldforsale(Note20) (331) –Liabilities directly attributable to non-current assets held for sale – 331



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ∙ 10.NON-CURRENT ASSETS (AND RELATED LIABILITIES) HELD FOR SALE continued

COMPANY

2018 2017

€’000 €’000

Non-current assetsAtbeginningoftheyear

– aspreviouslyreported 2,932 – – effectofchangeinaccountingpolicy(Note1.1.1) 5,708 –Asrestated 8,640 –

Transferfrominvestmentproperty(Note5) 4,105 8,640Disposals(seenotebelowandNote1.1.2) (2,545) –Closing net book value 10,200 8,640

At 31 JanuaryCost 1,524 2,932Fair value movements 8,676 5,708Carrying amount 10,200 8,640

Liabilities classified as held for saleAtbeginningoftheyear

– aspreviouslyreported – – – effectofchangeinaccountingpolicy(Note1.1.1) 995 –Asrestated 995 –

Deferredtaxattributabletonon-currentassetsheldforsale(Note13) 390 995Releaseofdeferredtaxfollowingdisposalofnon-currentassetsheldforsale(Note20) (365) –Closing net book value 1,020 995

During2017,theCompany’sBoardofDirectorsresolvedtotransferadditionalinvestmentpropertyhavingafairvalueof€6.1milliontooneofitsnewlyincorporatedsubsidiaries.In2018,furtherinvestmentpropertyonthesamesitehavingafairvalueof€4.1millionwasalsotransferredtonon-currentassetsheldforsaleasthispropertywillalsobetransferredtothesamesubsidiaryandaccordingly,thispropertyhasbeenclassifiedasnon-currentassetheldforsale.Thesetransfersareexpectedtobeexecutedin the coming 12 months.

11. Share capital

GROUP AND COMPANY

2018 2017

€’000 €’000

Authorised:20,630ordinarysharesof€232.937339each – 4,80550,000,000ordinarysharesof€1each 50,000 –

Issued and fully paid:20,630ordinarysharesof€232.937339each – 4,80530,000,000ordinarysharesof€1each 30,000 –


On26October2017,aspartoftherestructuringprocess,whichultimatelyledtothespin-offon30January2018ofTridentEstatesGroupfromtheFarsonsGroup,thefollowingshareholderapprovedtransactionswereundertaken:

(i) re-designationoftheissuedsharecapitaloftheCompanyfrom 20,630 ordinary shares of a nominal value of

€232.937339eachto4,805,498ordinarysharesofanominalvalueof€1each;

(ii) increaseoftheauthorisedsharecapitaloftheCompanyto50,000,000ordinarysharesof€1each;

(iii)increaseoftheissuedsharecapitaloftheCompanyto30,000,000ordinarysharesof€1each;

(iv)issueof25,194,502sharesof€1eachinfavourofSimondsFarsonsCiskplcbywayof:

• acashcontributionamountingto€6.5million;• capitalisationofreservesamountingto€12.2million

mainly emanating from the fair valuation of the

investmentpropertyheldbytheCompany(Note12);• capitalisationofamountsduebytheCompanytoSimondsFarsonsCiskplcamountingto€6.5million.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ∙ 11. SHARE CAPITAL continued

12. Fair value gains reserve

GROUP

2018 2017

€’000 €’000

Non-current assetsAtbeginningofyear,netofdeferredtax 14,047 10,555

Releaseoffairvaluegainsupondisposalofsubsidiaries – (520)Fairvaluemovementsoninvestmentproperty,netofdeferredtax 148 4,060

Fairvaluemovementrelatedtoinvestmentpropertyheldbyassociate – (48)Releaseoffairvaluegainupondisposalofinvestmentproperty 210 –Capitalisationofreserves(Note11) (12,192) –At 31 January 2,213 14,047

COMPANY

2018 2017

€’000 €’000

Non-current assetsAtbeginningoftheyear,netofdeferredtaxaspreviouslyreported – –Effectofchangeinaccountingpolicy,netofdeferredtax 12,007 8,493Asrestated,netofdeferredtax 12,007 8,493

Fair value gains for the year net of deferred tax – 3,514

Releaseoffairvaluegainsupondisposalofinvestmentproperty 210 –Capitalisationofreserves(Note11) (12,192) –At 31 January 25 12,007

ThefairvaluegainsreservewascreatedonthefairvaluationoftheGroup’sandCompany’sinvestmentpropertyandpropertyclassifiedasheldforsale.Relateddeferredtaxwasdebitedtothisreserve.

On26October2017,theshareholdersoftheCompanycapitalisedreservesamountingto€12.1millionaspartofthecapitalrestructuringprocessoftheCompanyinlieuofthespin-offtransaction(Note11).

Thisreserveisanon-distributablereserve.



13. Deferred taxationThemovementinthedeferredtaxaccountisasfollows:

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000

Atthebeginningoftheyearaspreviouslyreported 1,742 1,466 – –effectofchangeinaccountingpolicy – – 1,114 1,667

Asrestated 1,742 1,466 1,114 1,667

Acquisitionofsubsidiary(Note24) 427 – – –Debitedtoincomestatement(Note20) 59 607 194 442

Transferredtoliabilitiesclassifiedasheldforsale(Note10) – (331) (390) (995)At end of year 2,228 1,742 918 1,114

Thebalanceat31Januaryrepresentstemporarydifferencesonfairvaluationofinvestmentpropertyandpropertyclassifiedasheld for sale.

Deferredtaxesarecalculatedonalltemporarydifferencesundertheliabilitymethodandaremeasuredatthetaxratesthatareexpectedtoapplytotheperiodwhentheassetisrealisedortheliabilityissettledbasedontaxrates(andtaxlaws)thathavebeenenactedbytheendofthereportingperiod.Theprincipaltaxrateusedis35%(2017:35%),withtheexceptionofdeferredtaxationonthefairvaluationofnon-depreciablepropertywhichiscomputedonthebasisapplicabletodisposalsofimmovableproperty,thatis,ataxeffectof10%(2017:10%)ofthetransfervalue.

14. Trade and other payables

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000

Non-currentOtherpayables(Note24) 150 – – –

CurrentTradepayables 66 2 26 2

Amountsduetotheultimateparent – 2,461 – 2,480Amountsowedtosubsidiaries – – 1,899 –Indirect taxes and social security 18 20 9 13

Accrualsanddeferredincome 161 33 108 21

245 2,516 2,042 2,516

Totaltradeandotherpayables 395 2,516 2,042 2,516

Amountsowedtosubsidiariesandrelatedpartyareunsecured,interestfreeandarerepayableondemand.

Inprioryear,amountsduetotheultimatewereunsecured,repayableondemandandcarriedinterestat4.75%.Interestonthisbalanceceasedtobeappliedduringthecourseoftheyear.

Otherpayablesamountingto€150,000representsecuritydepositspaidbyatenantwhichwillberefundeduponterminationof lease agreement.



15. RevenueAlltheGroup’srevenue,whicharisessolelyinMalta,isderivedfromrentsreceivableonpropertiesrentedout.

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000

Rentalincome 796 727 692 634

16. Expenses by nature

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000

Depreciationofproperty,plantandequipment 5 5 5 5

Employeebenefitexpense 335 14 335 14

Propertyrent 79 106 41 43

Otherexpenses 121 32 120 45

Total cost of sales and administrative expenses 540 157 501 107

Includedintheaboveareexpensesamountingto€370,000(2017:€42,000)rechargedfromarelatedpartyinrespectofpayrollandotherexpenses.Directors’emolumentsandseniormanagers’amountingto€132,700(2017:€3,500)wereincludedintherecharged amount.

AUDITOR’S FEESFeeschargedbytheauditorforservicesrenderedduringthefinancialperiodsended31January2018and2017relateto thefollowing:

GROUP

2018 2017

€’000 €’000

Annualstatutoryaudit 33 24

Taxadvisoryandcomplianceservices 2 1

Other assurance services 11 –46 25



17. Net income on acquisition of investment

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000

E xcess of net assets acquired of the associate over consideration

paidandcarryingvalueofinvestment(Notes7and24) 11 – – –

18. Finance income

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000

Interestonamountsowedbyrelatedparty 21 – 21 –Interestonamountsowedbyfellowsubsidiaries – – – 28Interestonamountsowedbyassociate 20 22 20 22

41 22 41 50

19. Finance costs

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000

Interestonamountsduetorelatedparties 56 94 56 94



20. Tax (income)/expense

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000

Currenttaxexpense 196 117 178 113

Deferredtaxexpense(Note13) 59 607 194 442

Deferredtaxreleasesrelatedtothedisposalsof non-currentassets(Note10) (331) – (365) –

(76) 724 7 555

ThetaxontheGroup’sandCompany’sprofitbeforetaxdiffersfromthetheoreticalamountthatwouldariseusingthebasictaxrateasfollows:

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000(RESTATED)

Profitbeforetax 437 5,081 176 4,733

Taxonprofitat35% 153 1,778 62 1,657

Taxeffectof:Maintenanceallowanceonrentalincome (51) (45) (46) (41)Overprovisionfromprioryear – (37) – (37)Taxexemptgains – – – (1,487)Taxrulesapplicabletopropertyvalues (272) (1,026) (170) 442

Expensesnotallowablefortaxpurposes 94 54 161 21

Tax (income)/expense (76) 724 7 555



21. Cash generated from/(used in) operationsReconciliationofoperatingprofittocashgeneratedfrom/(usedin)operations:

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000(RESTATED)

Operatingprofit 256 570 191 527

Adjustmentsfor:Depreciationofproperty,plantandequipment 5 5 5 5

Changesinworkingcapital:Tradeandotherreceivables 5,071 (1,562) (7,943) (324)Tradeandotherpayables (2,810) 644 (475) (578)

Cash generated from/(used in) operations 2,522 (343) (8,222) (370)

22. Earnings per shareEarningspershareisbasedontheprofitforthefinancialyearattributabletotheshareholdersofTridentEstatesplcdividedbytheweightedaveragenumberofordinarysharesinissueduringtheyearandrankingfordividend.

GROUP

2018 2017

(RESTATED)

Profitsfromoperationsexcludingfairvaluemovements(€’000) 76 297Profitsfromfairvaluemovements(€’000) 437 4,060

Profitattributabletoshareholders(€’000) 513 4,357

Weightedaveragenumberofordinarysharesinissue(thousands) 11,501 4,805

Earningspershareattributabletoprofitsexcludingfairvaluemovements €0.007 €0.062Earningspershareattributabletofairvaluemovements €0.038 €0.845Earnings per share for the year attributable to shareholders €0.045 €0.907

Theweightedaveragenumberofordinarysharesfor2017wasrestatedtoreflectthere-designationofordinarysharesasstated in Note 11.



23. Commitments

CAPITAL COMMITMENTSCommitmentsforcapitalexpenditurerelatedtoinvestmentpropertynotprovidedforinthesefinancialstatementsareasfollows:

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000

Authorisedbutnotcontracted 45,000 – – –

TheaboveamountrelatestotheTridentParkprojectwhichisbudgetedtocostintheregionof€45million.Thisprojectwillbefinancedpartlythroughbankfundingwhichhasbeensecuredduringthecourseoftheyearandpartlythroughatwo-stagesharecapitalrightsissuethatwilltakeplaceduringthelastquarterof2019andin2020.Themajorshareholders(Note25)havesignedaletterofundertakingwiththeCompanycommittingtotakeuptheirrespectiveproportionsoftheaforementionedrightsissues.

OPERATING LEASE COMMITMENTS – WHERE A GROUP AND COMPANY ARE A LESSORTheseleasesprincipallyrelatetopropertyrentals.Thefutureminimumleasepaymentsreceivableundernon-cancellableoperatingleasesareasfollows:

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000

Not later than 1 year 962 133 687 82Laterthan1yearandnotlaterthan5years 2,636 380 1,239 75

Laterthan5years 248 210 – –3,846 723 1,926 157



24. Business combinations

ACQUISITION OF ENTITIES (AS PART OF THE SPIN-OFF PROCESS)Upto25October2017,theGroupheld50%ofthesharecapitalandcontrolinSliemaFortCompanyLimited.On26October2017,theGroupthroughtheParentCompany,acquiredthecontrolovertheremaining50%ofthesharecapitalofSliemaFortCompanyLimited,acompanyprincipallyinvolvedintheleasingofinvestmentproperty(Note6).Untilthedatecontrolwasobtained,theinvestmentinSliemaFortCompanyLimitedwasclassifiedasaninvestmentinassociateandmeasuredusingtheequitymethod(Note7).

Thefollowingtablesummarisestheestimatedfairvaluesoftheconsiderationpaid,previousheldequityinterest,theremaining50%shareholdingaswellastheassetsacquiredandliabilitiesassumedatthedateofacquisition.

2018

€’000

Consideration at date of acquisitionFairvalueofconsiderationpaid(Note1.1.2) 951Fairvalueofpreviouslyheldequityinterestbeforethebusinesscombination 951Total consideration 1,902

Recognised amounts of identifiable assets acquired and liabilities assumedInvestmentproperty(Note5) 1,100

Tradeandotherreceivables 1,934Cash and cash equivalents 23

Deferredtax(Note13) (427)Tradeandotherpayables (688)Current tax (18)Total identifiable net assets 1,924

Excess of net assets acquired over considerations paid 22

Asaresultoftheacquisition,theGroupisexpectingtofullybenefitfromtheleaseoftheCompany’sinvestmentpropertylocatedinahighlysoughtafterareainthenorthernharbourregionofMalta.Thisbusinesscombinationresultedinagainamountingto€22,000becausethefairvalueofassetsandliabilitiesacquiredexceededthetotalfairvalueoftheconsiderationpaid.TheGrouprecognisedalossof€11,000asaresultofmeasuringatfairvalueits50%equityinterestinthisentityheldbeforethebusinesscombination.ThenetgainsareincludedundernetincomeonacquisitionofinvestmentintheGroup’sincomestatementsfortheyearended31January2018.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ∙ 24. BUSINESS COMBINATIONS continued

DISPOSAL OF ENTITIES (AS PART OF THE SPIN-OFF PROCESS)InJanuary2017,theGroupsoldtwoofitssubsidiariesnamelyPortanierWarehousesLimitedandGalleriaManagementLimitedforatotalconsiderationof€646,000.ThesetransactionsformpartoftheGrouprestructuringprocessapprovedbytheFarsonsGroupaimedatspinningoffitspropertysegmentwhichisincorporatedwithintheTridentGroup.

Thefollowingtablesummarisesthecarryingvalueoftheassetsandliabilitiesdisposedattherespectivetransactiondateaswellastheresultingsurplusandshortfallaftertakingintoaccounttheabovenotedconsiderations.

2017

€’000

Carrying value of assets and liabilities disposedInvestmentproperty(Note5) 1,155

Tradeandotherreceivables 473

Tradeandotherpayables (921)Net assets disposed 707Considerationattributedtothedisposalofsubsidiaries (646)Net loss on disposal 61

TheGroupdidnotexecuteanyfurtherdisposalofbusinessesoroperationsfromthefinancialyear-enduptotheapprovalofthesefinancialstatements.

25. Related party transactionsUntil20December2017,TridentEstatesGroupformedpartoftheFarsonsGroup.On20December2017,SimondsFarsonsCiskplc,theCompany’sformerparentspunoffitsinvestmentintheCompanyand,on30January2018theCompanywaslistedontheMaltaStockExchange.Until20December2017,theDirectorsconsideredtheCompany’sformerparentSimondsFarsonsCiskplcanditssubsidiariesincludingtheTridentEstatesGroup,tobeaGroupuntilthedateofspin-off.Followingthespin-offdate,theseentitiesareconsideredtoberelatedpartiesduetocommondirectorsandthecommonshareholdingdisclosedbelow.Furthermore,thefollowingcompanies(andtheirrespectivesubsidiariesandjointly-controlledentities)areconsideredtoberelatedpartiesbyvirtueoftheirshareholdingintheCompany:

PERCENTAGE OF SHARES HELD

2018 2017

FarrugiaInvestmentsLimited 26.50 26.50

M.S.M.InvestmentsLimited 26.50 26.50

SciclunasEstatesLimited 26.32 26.32

Theremaining20.68%ofthesharesarewidelyheld.

Subsequenttotheyear-endandinlinewithArticle3.26oftheListingRules,theaboveshareholdershavereducedtheirshareholdingsasfollows:

PERCENTAGE OF SHARES HELD SUBSEQUENT TO YEAR-END

FarrugiaInvestmentsLimited 24.79M.S.M.InvestmentsLimited 25.06

SciclunasEstatesLimited 24.89


Thefollowingoperationaltransactionswerecarriedoutwithrelatedparties:

GROUP COMPANY

2018 2017 2018 2017

€’000 €’000 €’000 €’000

Income from goods and servicesFrom fellow subsidiaries–Rentalincome – – – 549–Interestincome – – – 28

From associate and subsidiaries

–Interestincome – 22 20 22

From related parties

–Rentalincome 721 587 617 ––Interestincome 21 – 21 –

742 609 658 599

Expenditure for goods and servicesFrom parent and related parties

–Interestexpense 56 94 56 94–Rechargedexpenses 370 42 370 42

426 136 426 136

Furthertotheabove,theGroupenteredintosignificanttransactionswithitsformerparentanditsGroupasdescribedin Note 1.1.2.

Keymanagementpersonnelcompensationfor2018and2017,consistingofdirectors’andseniormanagementremunerationwhichwasrechargedfromtheGroup’spreviousparent,isdisclosedasfollows:

GROUP

2018 2017

€’000 €’000

Directors 4 4

Senior Management 129 –133 4

Amountsduefrom/tofellowsubsidiariesaredisclosedinNotes8and14ofthesefinancialstatements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ∙ 25. RELATED PARTY TRANSACTIONS continued



26. Statutory informationTridentEstatesplcisapubliclimitedliabilitycompanyincorporatedinMalta.

27. Subsidiaries SubsidiariesandjointlycontrolledentitieswiththeGroupasat31January2018and2017werethefollowing:

GROUP AND COMPANY

REGISTERED OFFICE PRINCIPAL ACTIVITIES PERCENTAGE OF SHARES HELD

2018 2017

MensijaCateringCompanyLimited TheBrewery,MdinaRoad,Mrieħel

Propertyleasing 100 100

NeptunePropertiesLimited TheBrewery,MdinaRoad,Mrieħel

Non-operating 100 100

TridentParkLimited TheBrewery,MdinaRoad,Mrieħel

Propertydevelopmentand leasing

100 100

SliemaFortCompanyLimited TheBrewery,MdinaRoad,Mrieħel

Propertyleasing 100 50

28. Comparative informationComparativefiguresdisclosedinthemaincomponentsofthesefinancialstatementshavebeenreclassifiedtoconformwiththecurrentyear’spresentationformatforthepurposeoffairerpresentation.TheCompanyvoluntarilychangeditsaccountingpolicyoninvestmentproperty,witheffectfrom1February2017.Thishasnecessitatedtherestatementoftheopeningbalancesasat 1February2016.Thecomparativefinancialinformationfor2017hasbeenadjustedaccordingly.

TRIDENT ESTATES PLC ANNUAL REPORT 2017/18 63

TRIDENT ESTATES PLCSHAREHOLDER INFORMATION

DIRECTORS’ INTERESTS IN THE SHARE CAPITAL OF THE COMPANY

ORDINARY SHARES HELD AS AT 31 JANUARY 2018

ORDINARY SHARES HELD AS AT 23 MAY 2018

VincentCurmi 7,854 Nil

LouisA.Farrugia 30,223 30,223

Michael Farrugia 5,552 5,552

AlbertoMiceliFarrugia 16,996 Nil

MarquisMarcusJohnSciclunaMarshall 5,857 Nil

Prof.Avv.AlbertoStagnod’Alcontres 2,858 Nil

Directors’interestslistedaboveareinclusiveofsharesheldinthenameoftherelativespouseandminorchildrenasapplicable.

MrAlbertoMiceliFarrugiaandProf.Avv.AlbertoStagnod’AlcontreshaveabeneficialinterestinM.S.M.InvestmentsLimited. MrLouisA.Farrugiahasabeneficialinterestrepresentedby1shareinFarrugiaInvestmentsLimited.MrLouisA.Farrugiaand MrMichaelFarrugiarespectivelyhaveabeneficialinterestin25%andin12.5%ofthesharesinFarrugiaHoldingsLimitedwhichholdstherestofthesharesinFarrugiaInvestmentsLimitedapartfromdirectlyholding42,916sharesinTridentEstatesplc.MarquisMarcusJohnSciclunaMarshallhasabeneficialinterestinSciclunasEstatesLimited.Therehasbeennomovementintheabovestatedshareholdingsduringtheperiodfrom31January2018to23May2018.

SHAREHOLDERS HOLDING 5% OR MORE OF THE EQUITY SHARE CAPITAL AS AT 23 MAY 2018Ordinary shares

NUMBER OF SHARES PERCENTAGE HOLDING

FarrugiaInvestmentsLimited 7,436,414 24.79M.S.M.InvestmentsLimited 7,516,611 25.06

SciclunasEstatesLimited 7,466,778 24.89

SHAREHOLDING DETAILSAsat23May2018,theCompany’sissuedsharecapitalwasheldbythefollowingshareholders:

NUMBER OF SHAREHOLDERS

Ordinarysharesat€1each 1,462

The holders of the Ordinary shares have equal voting rights.

NUMBER OF SHAREHOLDERS AS AT 23 MAY 2018

NUMBER OF SHAREHOLDERS NUMBER OF SHARES PERCENTAGE HOLDING

Ordinarysharesof€1eachUpto500 435 106,235 0.35%501–1,000 292 216,682 0.72%1,001–5,000 543 1,204,618 4.02%More than 5,000 192 28,472,465 94.91%

1,462 30,000,000 100.00%

Kenneth C. PullicinoCompany Secretary

TheBrewery,MdinaRoad,MrieħelBKR3000,MaltaTelephone(+356)23814293

TheBrewery,MdinaRoad,Mrieħel,Birkirkara,BKR3000,Malta


annualreport

The Brewery, Mdina Road, Mrieħel, Birkirkara, BKR 3000, MaltaTel: +356 2381 4496 E-mail: [email protected]

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