Management (HK) Limited (“TMIHK”) and TMI Director 1 Limited. Further information regarding the basis of consolidation
and non-consolidation are detailed in note 2 (b) in the Notes of the Consolidated Financial Statements.
Group Overview
The Group’s Total Net Asset
Value (“NAV”) return per
Ordinary Share was +4.7%
1
(31 March 2022: +81.3%) for the
yearended 31 March 2023.
The Company’s Ordinary
Shares closed at a price of
US$1.12 on 31March 2023
(31 March 2022: US$1.42 per
Ordinary Share). The Company’s
total share price return per Ordinary
Share was -13.4%
1
(31March 2022:
+45.5%) for the year ended
31March 2023.
As at 31 March 2023,
the TMI
fleet consisted of 23 vessels
(31 March 2022: 31 vessels)
with a total market value of
US$373 million (31 March 2022:
US$546 million).
TMI fleet's average net time
charter rate at 31 March 2023
was approximately US$14,500
per day (31 March 2022: US$18,600
per day), with an average duration of
four months (31 March 2022: six
months) and generating an average
annualised unlevered return
2
of
17.5% (31 March 2022: 24%).
On 19 December 2022 the Group
completed a further acquisition of a 57.9%
stake in Grindrod at a price of US$21.00 per share. As at 31 March 2023
the Group’s total stake in Grindrod amounted to 83.2% (31 March 2022: 26.6%).
Key financial highlights in respect of Grindrod:
• At 31 March 2023, the Grindrod investment amounts to US$362.0 million held
through Good Falkirk (MI) Limited
• Grindrod’s fleet consisted of 28 vessels with a total market value of US$624
million
2
, including 15 Handysize Vessels and 13 Supramax/Ultramax
2
vessels
• Good Falkirk (MI) Limited received US$31.6 million by way of dividends from
Grindrod during the year to March 2023 including a special dividend of US$5.00
per share which was used to finance part of the December share acquisition
The combined fleets of TMI
and Grindrod numbered 51
vessels with a total market
value of US$997 million
2
. Of the
combined fleet, 38 are Handysize
3
vessels and 13 Supramax/Ultramax
2
vessels. The average age of the
combined fleet is 10 years
(31 March 2022: 11.4 years).
The Company declared dividends of 10.97 US cents per
Ordinary Share in the year ended 31 March 2023 (31 March 2022:
3.50 US cents). In addition, the Company declared an interim dividend on 27
April 2023 of 2 US cents per Ordinary Share in respect of the quarter ended
31 March 2023, which was paid on 31 May 2023. Dividend cover, excluding
the special dividend of 3.22 US cents per Ordinary Share paid in May 2022,
was 2.6x for the year ended 31 March 2023.
Group
1
overview
Key highlights
1
See “Alternative Performance Measures” on pages 89 – 91.
2
Inclusive of total market value of Grindrod fleet, not just the Group’s 83.2% stake.
3
See “Definitions and Glossary” on pages 92 – 93.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Group overview
Financial highlights
at 31 March 2023
Share price at period end
US$1.12 / £0.90
31 March 2022: US$1.42 / £1.09
Ongoing charges figure
1
1.1%
31 March 2022: 0.9%
1
Total ongoing charges, calculated in accordance with the AIC guidance, is for the consolidated group (the Company, TMI Advisors (UK) Limited (“TMIUK”), TMI Advisor
Pte. Limited (“TMI Singapore”), TMI Management (HK) Limited (“TMIHK”) and TMI Director 1 Limited) divided by the average NAV for the year. See “Alternative
Performance Measures” on pages 89 – 91.
2
See “Alternative Performance Measures” on pages 89 – 91.
Net assets
US$566,114,300
31 March 2022: US$575,248,769
Net asset value
per share
US$1.7144
31 March 2022: US$1.7420
Discount to net
asset value
2
(34.7%)
31 March 2022: (18.5%)
Total NAV return
2
4.7%
31 March 2022: 81.3%
At 31 March 2023, TMI gearing was US$222 million, representing a debt to gross asset ratio of 27.8%
2
. Taking
into account the debt at Grindrod of US$205 million, the combined debt to gross asset ratio was 39.0%
2
on a
“look-through” basis.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Page 3
I
Taylor Maritime Investments LimitedAnnual report and audited consolidated financial statements
Group overview
Summary information
Principal activity
The Company was registered in Guernsey under the Companies (Guernsey) Law, 2008 on 31 March 2021. The Company’s
registration number is 69031 and it is regulated by the Guernsey Financial Services Commission as a registered closed-
ended collective investment scheme pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 2020, the
Registered Collective Investment Scheme Rules 2021 and the Prospectus Rules 2021. The Company’s Ordinary Shares
were admitted to the premium listing segment of the Official List of the UK Listing Authority and began trading on the
Main Market of the London Stock Exchange (“LSE”) on 27 May 2021 (Stock Code TMI).
At 31 March 2023, the Company has a total of 330,215,878 Ordinary Shares in issue (31 March 2022: 330,215,878
Ordinary Shares), each with equal voting rights.
Investment objective
The Group’s investment objective is to provide investors with an attractive level of regular, stable and growing income
and the potential for capital growth through investing primarily in Geared Ships (Handysize and Supramax/Ultramax
types), usually employed, or to be employed, on fixed period Charters.
On 28 October 2022, the Company announced the results of an Extraordinary General Meeting (“EGM”) where a resolution
was passed for the Investment Policy of the Company to be amended. Details of the amendments to the Investment
Policy can be found on the Group’s website www.taylormaritimeinvestments.com, under the “investor centre/shareholder
information” section. The New Investment Policy, effective from 28 October 2022, is detailed on page 4.
The Group will target a Total NAV Return of 10% to 12% per annum (net of expenses and fees but excluding any tax
payable by Shareholders) over the medium to long term.
Dividend policy
The Company intends to pay dividends on a quarterly basis with dividends declared in January, April, July and October.
The Group is targeting stable cashflow generation with quarterly dividend payments of 2 US cents (31 March 2022: 1.75
US cents) per Ordinary Share representing an annual yield of 8 US cents per Ordinary Share per annum (31 March 2022:
7 US cents), with the intention to grow dividends.
Management
The Group is a self-managed investment entity led by a Board of Non-Executive and Executive Directors (the “Board” or
the ”Directors”) and a full time Executive Team (whose details appear on pages 28 – 29).
The Executive Team of experienced industry professionals led by Edward Buttery previously worked closely together at
the Commercial Manager, Taylor Maritime (HK) Limited. Established in 2014, Taylor Maritime (HK) Limited is a privately
owned management business with a seasoned team that includes the founders of dry bulk shipping company Pacific
Basin Shipping (listed in Hong Kong 2343.HK) and gas shipping company BW Epic Kosan (formerly Epic Shipping) (listed
in Oslo BWEK:NO). The Executive Team are based in Guernsey, London and Singapore.
Grindrod accounting treatment
The Consolidated Group’s interest in Grindrod is required to be accounted for through its “Investment in Holdco and SPVs”
1
,
and held through the subsidiary Good Falkirk (MI) Limited, and classified on the Consolidated Statement of Financial Position
through the “Financial asset at fair value through profit or loss”. The fair value movements associated with the Grindrod
investment being recognised as movements in the fair value of the Investment in Holdco and SPVs in the Consolidated
Statement of Comprehensive Income. Dividend income received for the Grindrod investment is recognised in the profit and
loss account of Good Falkirk (MI) Limited and consequently forms part of the fair value gain or loss for that SPV recognised in
the Investment in Holdco and SPVs. The dividend income is either retained at the Good Falkirk (MI) Limited level, or, if required,
is paid up through the Group and forms part of Dividend Income received by the Company from TMI Holdco Limited, see Note
7. Further details of the Grindrod accounting and valuation policy can be found in Notes 2 and 3.
Information provided in these financial statements regarding operating profit and available vessel days for the year to
31March 2023 relates to the TMI fleet operations only and does not incorporate the Grindrod fleet.
1
See “Note 2 b)” in the notes of the Consolidated Financial Statements for further details on the “Investment in Holdco and SPVs”.
Group overview
Investment policy
In order to achieve its investment objective, the Group will invest in
a diversified portfolio of vessels which will primarily be second-
hand, have historically demonstrated average yields in excess of
the Group’s target dividend yield and are capable of being acquired
at valuations that are expected to be below long-term average
prices or depreciated replacement cost (“DRC”).
The Group holds its shipping assets through Special Purpose
Vehicles (“SPVs”) which are wholly owned and controlled by the
Company and are held through an intermediate holding company
called TMI Holdco Limited (“Holdco”). The Company may acquire
vessels through asset purchases (in which case the vessel will be
transferred to an SPV) or through the acquisition of the relevant
vessel owning SPV. The Company may, in exceptional circumstances,
also invest in vessels through joint ventures with other parties or
other non-wholly owned structures, although, in such circumstances,
the Company will seek, wherever possible, to have a controlling
interest. The Company may also acquire interests (including minority,
majority and entire interests) in shipping businesses and companies
(“Target Companies”) whose business includes the ownership of
vessels provided that no single such investment in a Target
Company will exceed (i) 30 per cent of Gross Asset Value in the
case of a minority investment and (ii) 40 per cent of Gross Asset
Value in the case of an investment that confers majority or entire
ownership and where such investment exposure shall be reduced
to a maximum of 30 per cent of Gross Asset Value within 18
months of completion of an acquisition of an investment interest
that takes the Company’s total exposure to such investment to
more than 30 per cent of Gross Asset Value. No single vessel in the
relevant Target Company’s portfolio of vessels shall represent
more than 20 per cent of Net Asset Value.
The Group pursues a balanced employment strategy, comprising
short-term charters (less than 6 months), medium-term charters
(more than 6 months) and long-term charters (greater than a year)
and benefits from staggered renewals, with a view to flattening the
income curve.
For more information, please visit
www.taylormaritimeinvestments.com.
Key strategic objectives
The Group will realise its investment policy by applying the following
strategic objectives.
Acquisition Strategy – the Group has a selective growth strategy
focusing on accretive opportunities to increase shareholder
returns. Through the deep experience and longstanding industry
relationships of the Executive Team, the Group seeks to invest in
mainly Japanese second-hand vessels at below long-term average
prices and DRC to achieve an excellent rate of return over the
remaining life of its assets. Acquisition can be through direct
purchase or, if exceptional investment opportunities arise, through
joint ventures or other non-wholly owned structures or acquiring
interests in Target Companies.
The Group is currently focused on the geared dry bulk segment
given its favourable outlook resulting from an orderbook near a
historical low, effective and actual reduction of supply as gradual
introduction of emissions reduction targets is expected to accelerate
scrapping and lower average operating speeds, combined with a
positive demand growth environment. The tight supply side
situation is expected to prevail for the next two to three years as
orders in other segments consume shipyard capacity well into
2026 and uncertainty surrounding decarbonisation and its impact
on future ship designs discourages meaningful new ship ordering.
Income Strategy – to maintain a long-term stable income stream,
by diversifying charter contracts over different periods depending
on market conditions and limiting exposure to any one charter
counterparty while always maintaining prudent leverage (no long-
term structural debt) and cash management.
Sustainability Strategy – to ensure the long-term sustainability of
the fleet by integrating environmental factors into our fleet
maintenance and renewal strategy, and by ensuring, at a broader
level, that we are a responsible corporate citizen applying the
highest governance and social standards in all our operations and
interactions with stakeholders.
Dividend Strategy – The Company intends to pay regular dividends
on a quarterly basis with dividends declared in January, April, July
and October, currently with an annual dividend yield of 8 US cents per
share per annum with an intention to grow the dividend over time.
Gearing Strategy – The sustainable yield and returns are supported
by the Group’s commitment to a long-term ungeared approach with
access to a short-term revolving credit facility (“RCF”) to bridge
investments where appropriate and a commitment to limit
aggregate borrowings to a maximum of 25% of gross assets. This
maximum is subject to an increase in the gearing limit to 40% of
gross assets on a temporary basis, as approved by Shareholders in
October 2022, to facilitate the acquisition of Grindrod. Conditional
on the Group committing to reducing aggregated borrowing to no
more than 25% of gross assets within 18 months of entering into
the Grindrod acquisition facility.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic review
Chairman’s statement 6
Chief Executive Officer’s statement 8
Market review 10
Portfolio and operational review 14
Financial review 16
Environmental, Social and Governance review 18
Stakeholders report 21
Statement of principal risks and uncertainties 23
Going concern and viability statement 25
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Taylor Maritime Investments LimitedAnnual report and audited consolidated financial statements
Strategic review
Chairman’s statement
Dear Shareholders,
On behalf of the Board, I would like to thank you for your ongoing
support. This is the Group’s second Annual Report since its LSE
listing in May 2021. It has been a transformational year during
which the Group’s fleet has almost doubled in size as a result of
increasing its ownership to 83.2% of Grindrod, a major international
dry bulk shipping operator. We look forward to integrating and
aligning the TMI and Grindrod fleets over the coming financial year
as we seek to deliver commercial, technical and corporate synergies,
to the benefit of shareholders.
The past year has undoubtedly been challenging, given a combination
of macro-economic headwinds including the ongoing war in
Ukraine, the long lasting zero Covid policy in China and a sharply
inflationary environment. The Group have worked hard to temper
the effects of these economic challenges and, the Group’s TMI fleet
has outperformed the adjusted Baltic Handysize Index
1
, one of our
benchmarks, by an average of c.US$1,700 per day during the
period. This, combined with our segment’s focus on delivering
necessity commodities is testament to the effectiveness of our
strategic positioning in the geared dry bulk shipping sector and
active approach to asset management.
Long-term development of the Group
The Group’s strategy is to provide attractive levels of stable income
through its dividend with the potential for capital growth; the Group
seeks to maintain a responsible long-term capital structure and a
reinvestment) to drive shareholder value. During the year ended 31
March 2023, the Company’s NAV per share decreased by 3 US
cents to US$1.71 per share (31 March 2022: US$1.74). A decrease
of the fair value of the underlying SPV’s investments in shipping
assets over the year of US$0.19 per share contributed to this, which
was offset by underlying operating profits of US$0.27 per share
before dividend payments. The Total NAV Return for the year
including dividends was 4.7% (31 March 2022: 81%). The Company
delivered a dividend of 7.75 US cents per Ordinary Share (excluding
the special dividend of 3.22 US cents per Ordinary Share paid in
May 2022) during the year ended 31 March 2023 and I am pleased
to report that dividend cover for the financial year amounted to
2.6x
2
. This level of dividend cover resulted from robust earnings
from our fleet of vessels over the period enhanced by the Group‘s
active approach to asset management.
1
As the BHSI index has been based on a 38k dwt type since Jan 2020, the Company uses adjusted BHSI figures weighted on the average dwt of the Company's fleet
2
See “Alternative Performance Measures” on pages 89 – 91.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic review
There was significant investment activity during the year with the
acquisition of 57.9% ownership in Grindrod (resulting in 83.2%
ownership). The US$293 million investment was funded by a US$25
million special dividend received from Grindrod as part of the
transaction, US$150 million surplus cash from retained earnings and
US$119 million of debt. The Company continues to pay down that
debt in line with the Company’s strategy around de-gearing. This
acquisition will be transformational for the Group as a result of a
younger, more efficient overall fleet with enhanced scale, a larger
average carrying capacity and greater earnings capacity and
synergies. We also anticipate NAV and earnings accretion as a result
of the transaction.
Corporate Governance
At the conclusion of the Grindrod tender offer, our Chairman
Nicholas Lykiardopulo stepped down and I took over as Interim
Chairman. I would like to thank Nicholas for his tireless efforts and
dedication during an intensive, foundation laying period for the
Company. Following a thorough and competitive search process,
the Company has recently selected Henry Strutt to assume the
position of Chairman. Henry has extensive experience in the
investment trust sector and a background in corporate finance.
Henry will stand for re-election by shareholders at the AGM in
September 2023. I have no doubt that Henry will provide strong
stewardship for the Company and I look forward to remaining on
the Board as Senior Independent Director.
Sustainability and Decarbonisation
The Group has proactively taken steps necessary to ensure that its
fleet, managed by its external managers, is well prepared for the
IMO’s new decarbonisation regulations. Beyond that, we are also
looking where possible to collaborate with customers, industry
stakeholders and technology providers on new energy efficiency
and carbon reduction solutions, such as our successful trial of
biofuel onboard a Group vessel during the period.
The Group will be publishing its 2023 ESG Report in September
which will include a detailed account of the initiatives and measures
being taken to enable the gradual decarbonisation of the fleet.
Outlook
The Board is cognisant of the Company’s shares trading at a
material discount to NAV and the widening of the discount post
period, which to some degree is a function of the structural
headwinds facing the wider listed funds sector currently. The
Board’s strategic priority is to strengthen the balance sheet through
deleveraging which, we believe, should support a re-rating of the
Company’s shares. The Board keeps the use of free cash under
constant review and will continue to do so, always considering
carefully the Company’s buyback policy and an assessment of the
most accretive and strategic use of capital.
In the past two years, the Company has developed an attractive
portfolio of assets, and continues to deliver strong levels of regular
and stable dividend income, with the potential for capital growth, in
line with its strategy. The Grindrod transaction builds on this track
record, and as the Company continues with its vessel disposal
programme to reduce debt in accordance with its investment
policy, it should be well-positioned for the future as and when the
market fundamentals crystallise into an improved trading
environment as we expect.
I would like to thank all of our stakeholders for their support and
wish Henry all the best in his new role.
Frank Dunne
Senior Independent Director
and acting Interim Chair
1
26 July 2023
1
Acting Independent Interim Chair for the period 6 January 2023 to 31 May 2023.
Strategic reviewChairman’s statement continued
Page 7
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic review
Chief Executive Officer’s statement
Dear Shareholders,
Despite a challenging environment over the past year, I am pleased
that the Group’s TMI fleet of vessels have consistently delivered
index beating returns and I remain confident in the fundamentals
for the geared dry bulk sector for 2024 and 2025. While market
rates for our type of vessels as of June 2023 are still c.14%
1
higher
than the seasonal low in mid-February 2023, demand since then
has undoubtedly disappointed owing, in large part, to China’s
recovery having been slower than expected. Analysts continue to
expect targeted government stimulus measures to support the
goal of 5% GDP growth, which should start to support increase
demand for dry bulk goods, probably towards the latter part of
2023. The fact that asset values have remained firm relative to
charter rates in spite of a more volatile market is indicative of
positive forward sentiment looking to 2024 and beyond.
Financial Performance
Over the year, the Group delivered a Total NAV return of 4.7%,
including dividends paid, building on the particularly robust inaugural
period of shareholder returns following the Company’s IPO. The
dividend was well covered for the year at 2.6x (excluding the special
dividend). The Group’s profits for the year amounted to US$26.2
million. On a look-through basis
2
, this was generated from an
underlying gross operating profit of US$111.9 million, with revenue
made up of charter net income of US$151.9 million from our TMI
fleet and Grindrod dividend income of US$31.6 million before
deducting interest and capital expenditure relating to scheduled
dockings. TMI charter income (excluding the Grindrod fleet)
amounted to an average net charter rate of c.US$16,700 per day for
the year, representing an approximate 7% decrease from the previous
year. Our average net charter rate for the TMI fleet at the end of the
year was c.US$14,500 per day compared to c.US$18,600 per day at
the end of the previous period and compared to c.US$14,900 per day
at IPO. Unlevered gross average annualised yields for the TMI fleet
at the end of the period were healthy at 17.5%.
Market Review
The start of calendar year 2022 saw continued strength in the dry
bulk market with Handysize rates and asset values peaking around
the middle of the year. This was the result of resilient demand, port
congestion and limited new supply. The softening of rates and
asset values from July 2022 through to mid first quarter of calendar
year 2023 reflected volatility in demand due to various factors
including consistent tightening of the credit environment, a muted
China hamstrung by its zero-Covid policy and the war in Ukraine.
Grindrod
After careful consideration, the Group increased its investment in
Grindrod securing 83.2% ownership of the company by December
2022 compared to the Group’s initial 26.6% stake acquired in
January 2022. This transaction should be transformational for the
Company. The strategic path to the acquisition was paved by the
strategic timing of the Company’s listing and the high-quality fleet
it presented at IPO. The high level of cash generation from
operations, together with proceeds from vessel disposals at
attractive levels and the Group’s low debt policy from the outset
(which allowed the Group to fund a significant portion of the
acquisition with US$119 million of debt) enabled the Group to
complete a tender offer for Grindrod and make meaningful progress
thereafter to begin debt repayment. I believe the transaction was
well-timed and I am excited about the earnings and economies of
scale potential that will be unlocked from the integration projects
that are underway. I was appointed the CEO of Grindrod in March
2023 – combined with my role as CEO of the Group, this puts the
Group in the best position to ensure a cohesive strategy, commercial
vision and alignment between the two companies to achieve
compelling synergies for the benefit of our shareholders.
Debt
In line with our commitment to reduce debt, during the fourth quarter
of the financial year we sold three TMI ships (including the fully
insured vessel declared a constructive total loss in Ukraine)
contributing to US$37 million of repayments with a balance of
US$222 million at the end of the year. Since the year end, the
Company has made further progress to pay down debt with one
additional vessel sale completed and this will continue with the
Company maintaining a ready pipeline of sales candidates,
strategically selected based upon their age, size, and operational
efficiency. We are committed to reducing debt to gross assets as
much as possible, and even beyond the 25% target set out in our
investment policy. We are aware of the importance of paying off
existing debt even at the expense of fleet reduction. It is the
philosophy of management, enshrined in our investment policy, to
maintain a low debt capital structure, and to use debt selectively
where it provides flexibility to finance targeted investment at
opportunistic times. We will continue to focus on deleveraging our
balance sheet to ensure the Company’s resilience regardless of
market conditions and so that the Company can invest and return
excess cash to shareholders.
1
Source: Clarksons Research July 2023.
2
“Look-through basis” reflects the Group and SPV results on a consolidated basis, which comprises the Group and the underlying SPVs (see note 6 for list of SPVs). The
primary statements on pages 56 - 59, comprises the Group results only, where the SPVs look-through results are reflected through the “financial assets at fair value
through profit or loss”, see note 2 b) for “Basis of Preparation and Consolidation” for details on consolidation.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic reviewChief Executive Officer’s statement continued
Fleet
During the year, we completed a total of eight vessel disposals at
an average 83% IRR and 1.7x MOIC. The disposals realised on
average a sale price 6% above carrying value giving us confidence
in the valuations which underpin the Company’s NAV and
demonstrating historical liquidity in the S&P market for our type of
assets – a carefully assembled portfolio of ships. The wider
Group’s portfolio (including the Grindrod fleet) stood at 51 ships
(including four vessels with purchase options) at the end of the
year with a market value of just under US$1 billion. The Grindrod
investment has furthered our strategy to optimise the asset
portfolio, unique for being a homogenous, modern fleet of
predominantly Japanese built Handysize, Supramax and Ultramax
vessels. The combination of TMI and Grindrod vessels makes our
combined fleet one of the most attractive in today’s market.
Environmental Performance and Regulatory
Compliance
The roll out of our comprehensive fleet efficiency programme of
technical upgrades continued apace through 2022 in anticipation
of the IMO’s new environmental regulations, designed to deliver the
industry’s decarbonisation targets, coming into effect from 1
January 2023. This programme, combined with our investment in
Grindrod, and the divestment of older, less efficient Group vessels,
has set the Group on the right course for a reduction in the fleet’s
average carbon intensity.
The Group has taken further steps towards its longer-term ambition
of operating a zero-carbon fleet having contracted an ammonia-
ready, eco-design 40,000 dwt Handysize vessel to be delivered in
the first quarter of 2024.
Outlook
2023 is a year of being defensive and taking a cautious approach. We
expect Chinese demand to be muted and perhaps somewhat
improved towards the end of the calendar year before the Christmas
holidays. We see some de-stocking in China and therefore expect a
resumption of imports as part of a re-stocking program which should
result in improved rates. We expect the usual softness over the holiday
period including Chinese New Year followed by what we hope will be a
structural recovery, albeit a gentle one, in the Chinese economy, which
would be in line with Government statements that they are planning a
deep rooted, sustainable, long-term recovery - a departure from prior
policy decisions which were significantly more aggressive. We feel this
is positive for our company and allows for us to prudently consider our
long-term goals and how best to drive shareholder returns.
Our focus for this coming year, during the current demand environment,
has been heavily weighted towards preparing the balance sheet for
the long run through deleveraging (beyond our target of 25%) and
reducing interest rate costs and protecting our downside as well as
being prepared for potential structural upside in 2024 resulting from a
shortage of ships and an improvement in demand.
There are grounds for optimism, and we maintain a positive outlook
for China and India for 2024 driven by Chinese economic recovery
and India’s continued growth. This should result in an increase in
dry bulk demand boosted by China’s widely forecast demand
stimulus to support the Government target of 5% GDP growth.
Disappointing short-term demand data is overshadowing supply
data, supply of ships remains limited and over the medium to long-
term this is what drives our market. We are confident in the long-
term fundamentals for our sector.
Board composition
This year has also seen substantial developments in governance. As
previously announced, our Chairman Nicholas Lykiardopulo stepped
down during the year and I would like to thank him for his unrelenting
support and guidance in a formative period for the Company. In turn,
I would also like to thank Frank Dunne for taking on the role of Interim
Chair so willingly and capably and to welcome Henry Strutt as our
new Chair from 1 June 2023.
I am immensely grateful to the highly experienced management
teams I work with, as well as the wider teams underpinning the
Goup’s activities, including seafarers and shore-based staff and to all
of our stakeholders. I believe the Group has now put together one of
the most attractive fleets of modern Handysize, Supramax and
Ultramax vessels and I am confident in the future of geared dry bulk.
Edward Buttery
Chief Executive Officer
26 July 2023
Page 9
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Market summary
The strong market conditions of 2021, in which the Baltic Dry Index
(“BDI”) reached its highest level since 2008, carried over into the first
half of the 2022 calendar year. This was despite disruptions to
traditional trade routes caused by the Russia-Ukraine conflict. The
resulting reduction in Black Sea grain volumes were partly offset by
an increase in tonne miles as cargoes bound for European and
Mediterranean markets were replaced with sources from further
afield. Port congestion, which had built up in the wake of the
COVID-19 pandemic, began easing from June onwards and
coincided with a poor grain season exerting a drag on charter rates.
Market conditions gradually softened through the second half of the
2022 calendar year as macroeconomic headwinds accumulated
and a slowdown in China’s property and construction sectors amidst
the country's zero Covid policy impacted demand. Charter rates
strengthened considerably from mid-February 2023 as China, which
accounts for c.50% of the global dry bulk market, started showing
signs of an economic recovery after scaling back zero Covid
measures with analysts at the time forecasting the potential easing
of macroeconomic headwinds through 2023.
• The BHSI averaged over 1,500 for the first quarter of the period,
reaching a peak of 1,695, before gradually declining to 431 at the
end of January 2023. The index swiftly rose after the earlier-than-
usual Chinese New Year to reach 687 by the end of the period;
• The significant spread between supply growth and demand
growth that had re-emerged in 2021 reversed in 2022 due to
global economic headwinds, a slowdown in China, and port
decongestion during the second half of the calendar year;
• Demand is expected to re-enter positive growth territory in 2023
with minor bulk trade forecast to grow 2.4% in tonne mile terms
and overall dry bulk tonne miles to grow by 3.3%;
• While softening demand applied downward pressure on charter
rates from the second half of 2022, the Clarksons 10-year-old
benchmark valuation for a Handysize vessel was US$18.5 million
at the end of March 2023 reflecting no nominal change from 31
March 2022 – however implying a moderate decrease in asset
values given the change of the benchmark vessel from a 32k dwt
to a 37k dwt during the period
1
.
Strategic review
Market review
1
Clarksons basis for a 10 year old secondhand vessel was 32k dwt until the end of calendar year 2022 and 37k dwt from January 2023.
0
500
1,000
1,500
2,000
2,500
AprMayJunJulAugSepOctNovDecJanFebMar
201920202021
202220235Y Average
BALTIC HANDYSIZE INDEX (BHSI)
Page 10
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic reviewMarket review continued
Demand
• After growing 3.4% in 2022, the global economy, as forecast by
the IMF, is expected to grow by 2.8% in 2023 and then by 3.0
percent in 2024 with financial market jitters, high inflation and the
ongoing effects of Russia’s invasion of Ukraine cited as potential
impediments to a more robust recovery;
• Advanced economies are expected to see a pronounced slowdown
while emerging economies, which accounted for three quarters of
global dry bulk demand in 2022, are projected by the IMF to grow
by 3.9% in 2023, before accelerating to 4.2% in 2024;
• Tonne-mile demand contracted by -1.4% in 2022 according to
Clarksons as economic headwinds, easing port congestion and
a slowdown in China weighed heavily. Dry bulk tonne-mile
demand, however, is expected to recover in 2023 with a firm 3.3%
growth forecast (revised upwards from 1.5% midway through the
period) and c.2.5% growth in 2024;
• The combined minor bulk and grain trade, the principal cargoes
of Handysize and Ultramax vessels, contracted by -1.3% in 2022
in tonne-mile terms according to Clarksons, but is set to rebound
with growth forecast at 3.0% in 2023 and 3.9% in 2024;
• The historically strong market conditions that carried over into
the early part of the period began softening and rates came
under pressure from June 2022 onwards and gradually declined
as a result of port decongestion, macroeconomic headwinds
and a slowdown in China;
• Sentiment improved markedly late in 2022 as China began
relaxing zero-Covid policies and announced measures to
stimulate the economy. Following an earlier-than-usual Chinese
New Year, a historically soft period for dry bulk, rates strengthened
from mid-February with China initially showing early signs of an
economic recovery with the Baltic Handysize Index (“BHSI”)
rising c.60% to the end of the period.
1
Source: Clarksons Research July 2023.
GRAIN AND MINOR BULK TRADE DEVELOPMENT
(BILLION TONNE MILES)
1
0
5,000
10,000
15,000
20,000
World Seaborne Grain Trade (including Soybeans)
World Seaborne Minor Bulk Trade
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
MINOR BULK DEMAND (BN TONNE MILES) AND HANDY
FLEET SUPPLY GROWTH (DWT)
1
Fleet Supply YoY %
Minor Bulk Tonne-Mile Demand YoY %
1.5%
2.0%
2.5%
2.2%
1.7%
2.8%
3.3%
3.1%
1.3%
2.7%
6.9%
4.1%
0.5%0.4%
5.6%
-1.1%
2.4%
3.7%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
2016
2017
2018
2019
2020
2021
E-2022
F-2023
F-2024
Page 11
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic reviewMarket review continued
GEARED DRY BULK NEW ORDERS PER YEAR
1
Handysize
Supra/Ultramax
0
200
400
600
800
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
SUPRA/ULTRAMAX SUPPLY DEVELOPMENT
1
dwt m
3.9%
2.5%
3.7%
3.6%
2.9%
3.1%
3.0%
3.0%
-6.0
-2.0
2.0
6.0
10.0
20172018201920202021202220232024
DeliveriesDemolitionsYoY %
HANDYSIZE SUPPLY DEVELOPMENT
1
dwt m
2.5%
2.2%
1.7%
2.8%
3.3%
3.1%
1.3%
-6.0
-2.0
2.0
6.0
10.0
20172018201920202021202220232024
DemolitionsYoY %
2.0%.
Deliveries
Fleet supply
• Following several years of limited newbuild ordering, the dry bulk
orderbook remains at a near historical low of c.7% of the global
fleet as softening market conditions, newbuild price inflation
(Clarksons index rose by 37% between the end of 2020 and
August 2022, in part on higher steel prices) and unwinding port
congestion deterred meaningful new ordering activity through
the period;
• Limited slot availability at shipyards, which are generally fully
booked for the next 3 years with orders from other segments
dominating the delivery programme, and uncertainty of future
fuel choices and as-yet unavailable ship designs have further
limited supply;
• The introduction of new IMO regulations to reduce emissions,
which came into force on 1 January 2023, is expected to provide
further supply side pressure with compliance reducing effective
bulker supply by c.2.0-2.5% p.a. across 2023 and 2024, according
to some estimates, through slower operating speeds (evidence of
which has recently been reported by Clarksons) and retrofit time;
• The new environmental regulations along with more moderate
market conditions are also expected to act as a catalyst for
greater demolition of older, less efficient tonnage through 2023
and 2024 further impacting supply;
• The Handysize segment, which is the oldest of the dry bulk fleet,
is forecast to grow in 2023 by 3.1% and then by 1.3% in 2024. The
Supramax and Ultramax fleet is forecast to grow by 3.0% in 2023
and 3.0% in 2024.
1
Source: Clarksons Research July 2023.
Page 12
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic reviewMarket review continued
AGE PROFILE BY SEGMENT
1
>25 Years
>20 Years
>15 Years
Orderbook
9.3%
5.0%
4.4%
0.2%
15.9%
12.3%
13.6%
2.5%
28.0%
23.7%
26.8%
14.5%
9.2%
8.3%
8.9%
5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
HandysizeSupra/UltramaxPanamaxCapesize
AVERAGE DRY BULK SPEED
1
Dry-bulk av speed y-o-y change
Bulkcarrier Average Speed
10.0
10.5
11.0
11.5
12.0
12.5
-2.0%
-1.0%
0.0%
1.0%
2.0%
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Y-O-Y % Change
Outlook
While China's post-covid 'reopening' has been slower than
anticipated, many analysts still expect China's economy to grow by
more than 5% this year as the Government introduces further
policy support and the drag from the inventory cycle fades. Dry bulk
earnings are expected to improve as a result and asset values, after
moderating slightly post period end, should remain relatively firm
through the second half of 2023 given continued supply-side
pressure emanating from a near historically low orderbook and
forward. The Company maintains a positive outlook for 2024 and
2025 as supply tightens and demand growth is positive.
1
Source: Clarksons Research July 2023.
Page 13
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic review
Portfolio and operational review
Portfolio summary
• The Group successfully secured an 83.2% controlling stake in
Grindrod (Nasdaq:GRIN, JSE:GSH) at an average cost per share of
US$20.92 (vs implied NAV per share of US$21.70 at 31 December
2022 and US$22.36 per Grindrod share at 31 March 2023). With
this transaction, TMI has become a significant owner of high
quality, diversified geared dry bulk vessels;
• The acquisition is consistent with TMI’s strategy of seeking
accretive growth opportunities and increases the Group’s earning
power at a time when the Group anticipates a robust medium-
term earnings environment given the projected supply-demand
imbalance;
• At the time of deal close, the Company’s fleet had effectively
doubled with the combined TMI and Grindrod fleet numbering 58
vessels with a carrying capacity of c.2.4m dwt and a combined
average age of c.10 years;
• Prior to announcing the conditional cash offer for Grindrod, the
Company had received total dividends of US$1.31 per share from
its 26.6% stake in Grindrod (secured in January 2022) representing
a total of c.US$6.4 million;
• The Company received an additional US$5.00 per share Special
Dividend as part of the transaction representing a total of c.US$25
million, a yield of 28% on its initial investment;
• Through the period, the Group successfully completed eight
disposals (inclusive of vessel realised through constructive total
loss, see below) of predominantly older vessels in the Company’s
fleet with proceeds used to partly fund the acquisition of Grindrod
and its relatively newer fleet or to repay debt as the Company
embarked on a deleveraging programme in accordance with its
focus on ensuring a strong balance sheet and commitment to a
prudent capital structure;
• The average IRR for the eight disposals (inclusive of vessel realised
constructive total loss, see below) was 83% and at an average of
6% above carrying value;
• The TMI vessel that was unable to leave a Ukrainian port in the
Black Sea due to Russia's invasion of Ukraine was declared a
constructive total loss in February 2023 in accordance with the
terms and conditions of the Company’s marine insurance. The net
proceeds were received by TMI and covered the carrying value of
the vessel;
• The Company secured an attractive one-off opportunity to
contract an ammonia-ready, eco-design 40,000 dwt Handysize
newbuild from a top tier Japanese yard with a rare early delivery
window in Q1 of the 2024 calendar year (Japanese newbuild
contracts are now only deliverable in the second half of 2025). This
purchase is part of a limited renewal strategy and will serve to
lower the TMI fleet’s overall average age and enhance its ESG
credentials. At Grindrod, one vessel sale completed post the
closure of the deal offer, a 2015-built 60k dwt Ultramax, and a
further three vessels were contracted for sale during the period,
with one sale completing in April, and the other two sales expected
to complete by 30 June 2023;
• At 31 March 2023, the combined fleet consisted of 51 vessels
including chartered-in vessels with purchase options within the
Grindrod fleet;
• Post period, the Company agreed and completed the sale of a
2008 built 32k dwt Handysize vessel for net proceeds of US$11.7
million, generating an IRR of c.63% and MOIC of c.2.0x. As a result,
the fleet currently stands at 47 vessels, excluding chartered-in
vessels without purchase options, consisting of 34 Handysize
vessels and 13 Supramax/Ultramax vessels.
The Group’s Fleet List – delivered vessels as at 31 March 2023
Ship type
Number of
VesselsAverage Age DWT
Portfolio Weighting
(dwt)
Portfolio Weighting
(at fair value)
TMI Handysize2312 years772,60038%39%
GRIN
1
Handysize15
2
10 years497,40024%24%
GRIN Supra/Ultra9
3
6 years538,30026%26%
GRIN Chartered-in45 years246,00012%11%
Total5110 years2,054,300100%100%
1
Grindrod Shipping (“GRIN”).
2
Includes three vessels owned under financing arrangement.
3
Includes one vessel owned under financing arrangement.
Page 14
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
FLEET EMPLOYMENT RENEWAL
NET TIME CHARTER RATES PER DAY (US$)
1
39%
17%
26%
9%
9%
less 9k9k - 12k12k - 15k
15k - 18k18k - 21k21k or more
VESSEL CHARTERERS
1
78%
22%
Charterers with 1 vessel
Charterers > 2 vessels
AVERAGE CHARTER DURATION
1
78%
13%
9%
0-6 months6-12 months
12-24 months24 months+
AVERAGE ANNUALIZED UNLEVERED GROSS CASH YIELD (%)
1
9%
4%
13%
43%
30%
40% - 50%30% - 40%20% - 30%
10% - 20%<10%
Strategic reviewPortfolio and operational review continued
Employment and operations
• The TMI fleet’s (excluding the Grindrod fleet) average net time
charter rate at 31 March 2023 was c.US$14,500 per day, with an
average duration of four months and average annualized unlevered
gross return of 17.5%;
• This compares with an average net time charter rate of c.US$18,600
per day, with an average duration of 10 months and average
annualized unlevered gross return of 24% at the end of the last
financial period following a strong rebound in seaborne trade as
large parts of the global economy reopened in the wake of the
COVID-19 pandemic;
• Updating for new charters agreed post-period end, the fleet average
net charter rate is c.US$11,300 per day. The updated average
annualized unlevered gross cash yield for the fleet of 9.2% and the
updated average remaining charter duration is three months,
allowing an opportunity to capture longer period charters at higher
rates in anticipation of market strengthening and providing
optionality for possible asset disposals.
For the year ended 31 March 2023, the performance of Grindrod to 31
March 2023 has primarily been assessed on a dividend income and
fair value basis rather than an assessment of the underlying fleet
charter performance/metrics, and, as such, fleet charter details/
breakdowns are not provided in this year’s report.
1
All chart data at 31 March 2023.
Page 15
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic review
Financial review
Investment performance
• Net Asset Value (“NAV”) per ordinary share decreased by c1.7%
from US$1.74 to US$1.71 after dividends paid of US$36 million;
• In terms of underlying assets, as at 31 March 2023, TMI fleet
consisted of 23 vessels with a total market value of US$373
million. Grindrod fleet consisted of 28 vessels with a total market
value of US$624
1
million. The combined fleet for TMI and
Grindrod numbered 51 vessels with a total market value of
US$997 million
1
;
• On 28 July 2022, the Company declared an increase in its interim
dividend from 1.75 US cents per Ordinary Share to 2 US cents per
Ordinary Share for the period from 1 April 2022 to 30 June 2022,
representing an increase of 14% per share and reflecting a new
annualised dividend target for financial year 2022 of 8 US cents
per Ordinary Share. Total dividends of US$36.2 million was paid
in the financial year from 1 April 2022 to 31 March 2023. This
represents a total dividend paid of 10.97 US cents per Ordinary
Share for the financial year, comprising 1.75 US cents declared in
the last quarter of last financial year, 3.22 US cents of special
dividend declared for the last financial year and 2 US cents
declared for the quarters ending June 2022, September 2022
and December 2022. On 27 April 2023, the Company declared its
fourth interim dividend of 2 US cents per Ordinary Share for the
period from 1 January 2023 to 31 March 2023, the total dividend
of US$6.6 million was paid on 31 May 2023;
• Dividend Cover
2
for the financial year to 31 March 2023 was 2.6x
(inclusive of last financial year final quarter dividend of 1.75
cents paid in May 2022 but excluding the special dividend of 3.22
US cents paid in June 2022);
• The Group’s annualised ongoing charges ratio for the year ended
31 March 2023 was 1.1%.
Investment Performance - TMI information
Total Vessel days
4
For the year
ended
31 March 2023
9,742 days
US$ millions
31 March 2021
3
(date of
incorporation)
to 31 March
2022
7,502 days
US$ millions
Net charter revenue
5
151.89129.79
Dividend income31.563.70
Operating expenses
6
(71.54)(44.74)
Gross Operating Profit111.9188.75
Finance costs
7
(13.50)(3.66)
(Loss)/gain in capital values
8
(62.31)174.00
Portfolio profit36.10259.09
Group expenses
9
(9.94)(6.21)
Profit for the period (before tax)26.16252.88
The information above reflects the TMI results on a aggregated
basis including non-consolidated TMI subsidiaries (see note 6 for
list of TMI subsidiaries). Within the above table, Grindrod results
are reflected in “Dividend income” and “(Loss)/gains in capital
values” through Good Falkirk (MI) Limited. The primary statements
on pages 65 to 68 comprises the Consolidated Group results only,
where the SPVs look-through results are reflected through the
“financial assets at fair value through profit or loss”, see note 2 b)
for “Basis of Preparation and Consolidation” for details on
consolidation.
Financing
• TMI remains committed to a financially prudent approach,
maintaining a short-term revolving credit facility (“RCF”) of
US$160 million to support downside risk and selective growth
investment opportunities. On 11 October 2022, the Group took
up an Acquisition Facility (“AF”) of up to US$208.33 million to
part-finance the acquisition of Grindrod. The borrowers for the
RCF and AF are TMI Holdco Limited and Good Falkirk (MI)
Limited respectively: both are subsidiaries of the Company and
both loans are guaranteed by the Company, see note 13 for details;
• As at 31 March 2023, the total loans outstanding were US$222
million, comprising US$127 million of RCF and US$95 million of AF;
• TMI’s debt to gross assets ratio as at 31 March 2023 was 27.8%
2
.
1
Inclusive of total market value of Grindrod fleet, not just the Group’s 83.2% stake.
2
See “Alternative Performance Measures” on pages 89 – 91.
3
Company listed on the LSE’s premium segment and began trading on 27 May 2021.
4
Vessel days: Total number of days all vessels have been owned by the TMI Group over the financial year to 31 March 2023.
5
Net charter revenue: Charter income net of commissions and charter related costs.
6
Operating expenses: Expenses incurred during vessel operations and general administrative expenses incurred by the SPVs.
7
Finance costs: Includes loan interest and fees, offset by interest income.
8
(Loss)/gain in capital values: Non-cash fair value gains and losses from marking assets to market in accordance with the valuation policy of the Group.
9
Group expenses : Direct Consolidated Group costs and investment management overheads, as shown in the Consolidated Statement of Comprehensive Income on page 56.
Page 16
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
NAV PER ORDINARY SHARE BRIDGE FROM
1 APRIL 2022 TO 31 MARCH 2023
Profit for
the period
Fair value
loss
Dividend
paid
NAV
31/03/23
NAV
US$(0.27)US$(0.19)
US$(0.11)
US$1.71
US$1.74
1/4/2022
TMI GROUP NAV COMPONENTS AT 31 MARCH 2023
FMV–
TMI Fleet
FMV–
Grindrod
Debt
1
Net Current
Assets
NAV
31/03/2023
US$373m
US$1.13
US$362m
US$1.10
US$218m
(US$0.66)
US$49m
US$0.15
US$566m
US$1.71
Strategic reviewFinancial review continued
NAV valuation
• NAV per Ordinary Share decreased from US$1.74 at 31 March
2022 to US$1.71 at 31 March 2023 with US$0.27 contributed
from profit for the year from 1 April 2022 to 31 March 2023,
offset by (US$0.19) from fair value loss for the same period and
(US$0.11) of dividend paid during the period. Breakdowns of the
movements in the portfolio’s Net Asset Value and its component
parts are shown below;
• Total NAV return was 4.7% for the year, mainly due to decrease in
vessel values;
• Vessel asset valuations are undertaken on a quarterly basis and
are determined by taking the average of two independent broker
valuations. As the brokers’ valuations are prepared on a charter-
free basis, the Executive Team assesses the difference in value
arising from the contracted charter versus market rate, and,
where the difference is material, factors the adjustment into the
valuation (see pages 65 - 66 for additional details);
• An independent globally recognised accountancy firm (the
“Independent Valuer”), were engaged to value the Group’s
investment in Grindrod. The Independent Valuer adopted a
similar valuation approach to TMI by fair valuing the vessel
assets using the average of two independent broker valuations.
For the chartered-in vessels with purchase options, the options
were valued based on the present value of the difference between
the options exercised price and the average of two independent
broker valuations. For the difference in value arising from the
contracted charter-in versus market rate, the difference is
assessed similar to TMI as above and adjusted if the difference
is material. The Company’s investment in Grindrod carried a total
fair value of US$362 million as at 31 March 2023. For further
details on the valuation of Grindrod, see note 3 in the Notes to the
Consolidated Financial Statements.
1
Debt – net of loan financing fee.
Page 17
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic reviewFinancial review continued
Strategic review
Environmental, Social
and Governance review
Introduction
The Group’s Environmental, Social and Governance (“ESG”) strategy
and objectives are set and monitored by the ESG and Engagement
Committee which reports to the Board. The Board’s oversight and
composition of the ESG and Engagement Committee is covered on
pages 45 to 46. As an internally managed investment company, the
Executive Team works with the external technical managers,
commercial manager and other key stakeholders to progress the
Group’s decarbonisation priorities and other critical environmental,
social and governance objectives. The Group’s ESG policy, which is
reviewed by the Board at least annually, is published on the
Company’s website.
The Group’s dedicated ESG Taskforce is responsible for the
implementation of the Company’s ESG strategy and related
projects. The Taskforce comprises various subject matter experts
from different functions, including representatives from the TMI
Group’s commercial and technical manager.
The Group’s ESG approach is underpinned by six key ESG priorities, against which KPIs are measured and progress tracked.
v
Further details of the Group’s ESG initiatives and progress can be
found in the annual ESG report, available on the Company’s website:
https://taylormaritimeinvestments.com/. This report includes
disclosure of the Group’s scope 1, 2 and 3 greenhouse gas
emissions and broader ESG disclosure in line with some of the
principles of the Task Force on Climate-related Disclosure (“TCFD”),
the Sustainability Accounting Standard Board (“SASB”) and the
Global Reporting Initiative (“GRI”).
ESG policy alignment with Grindrod
After securing a controlling stake in Grindrod (Nasdaq:GRIN,
JSE:GSH) in December 2022, the Company has been working
closely with the Grindrod Board and Executive Team to align ESG
strategies and approaches of both companies. This includes align-
ment on company policies, climate risk management, decarbonisa-
tion initiatives, seafarer and employee wellbeing.
Progress on the Group’s ESG priorities
throughout the year:
1) Responsible investment:
Investment in Grindrod
Grindrod owns and operates a modern, diversified fleet of dry-bulk
vessels, predominantly Japanese-built and of relatively energy efficient
design, a key driver for our investment. The Grindrod fleet is highly
complementary to the Company’s existing fleet and improves the
overall environmental performance of both companies. Grindrod’s
larger Supramax and Ultramax vessels have lower carbon intensities
due to their larger carrying capacity. This has improved the overall
emissions profile (as measured by fuel consumption per dwt) of the
combined fleet. The Group actively tracks and monitors Grindrod’s
emissions, which are included in the Group’s GHG footprint under
scope 3, category 15 ‘Investments’.
Contracted vessel new building with ammonia-ready design
Several technologies are being considered by the broader shipping
industry to reduce the GHG emissions of the sector. Among them,
ammonia has been identified as a zero-carbon fuel that can enter
the market to help meet the GHG reduction target for 2050 set by
the IMO. Ammonia offers a zero-carbon tank-to-wake emissions
profile, regardless of the source of the fuel.
The Company secured an attractive opportunity to contract an
ammonia-ready, eco-design 40,000 dwt Handysize newbuild from
a top tier Japanese yard with an early delivery window in Q1 of the
2024 calendar year. This purchase is part of a limited renewal
strategy and will serve to lower the TMI fleet’s overall average age
and help achieves its net-zero target.
Divestment of less efficient vessels in the portfolio
During the period, the group completed eight asset disposals,
selected based on their age profile and relatively less favourable
environmental credentials. These divestments contributed to the
overall improvement in the average carbon intensity of the TMI fleet
by 18%, on an EEOI basis.
2) Climate change and environmental
management:
The Group aims to achieve a long-term target of running a zero-
emission fleet by 2050 and is a signatory to the Getting to Zero
Coalition’s “Call to Action for Shipping Decarbonisation”. Whilst the
Group evaluates low-carbon fuels and their commercial viability, it
is simultaneously looking at the existing fleet; how to improve fuel
efficiency and lower carbon intensity.
Progress on carbon intensity targets
The Group has a medium-term target of reducing carbon intensity by
40% by 2030, compared to a 2008 baseline, in line with IMO targets.
The emissions intensity of the fleet, as measured by the EEOI (“Energy
Efficiency Operational Indicator”) and AER (“Annual Efficiency Ratio”),
for FY23 improved by 18% and 1.4% respectively. This was primarily
driven by the divestment of less-efficient vessels, installation of energy
saving devices and other efficiency initiatives onboard.
1
Responsible
investment
2
Climate change
and environmental
managment
3
Onshore and at
sea safety
4
Compliance and
conduct
5
Community
and employee
engagement
6
Strong corporate
governance
Page 18
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic reviewEnvironmental, Social and Governance review continued
For both the EEOI and AER, the Company has limited influence over the
voyage parameters or cargo carriage element, as the Company’s
vessels are operated under a time-charter model. Therefore, the
Company is only able to influence the EEOI and AER metrics from a
technical point of view e.g. vessel/engine selection and fitting of ESDs.
FY22FY23
Y-o-Y
Improvement
Grindrod
Fleet
EEOI11.969.86
18%9.92
AER7.237.13
1.4%6.21
Use of biofuels onboard
Ongoing collaboration with customers and industry stakeholders is
key to achieving long-term decarbonisation goals. In September
2022 the Group completed its first biofuel trial onboard a Group
vessel in collaboration with a key customer.
The biofuel blend used in this voyage trial was B30 biofuel,
consisting primarily of reused cooking and other waste oils. The
biofuel was blended with VLSFO (“Very Low Sulphur Fuel Oil”). On a
well-to-wake emissions measurement basis, this generated a CO
2
saving of 26%, compared to consuming purely VLSFO.
The use of biofuel onboard is one of the interim steps identified by
the Group in achieving a long-term target of operating a net-zero
fleet by 2050. The positive results of the biofuel powered voyage
are promising in terms of biofuel serving as a viable interim fuel.
The Group will actively look to perform further trials and increase
the use of biofuel on voyages going forward.
Fleet-wide energy efficiency initiatives
Together with the Group’s commercial and technical managers, the
Group continues to roll out a comprehensive fleet efficiency
programme to improve vessel fuel efficiency, primarily focused on
retrofits at scheduled maintenance events. These technical
enhancements will increase the fuel efficiency of the fleet and
improve Energy Efficiency Existing Ship Index (“EEXI”) and Carbon
Intensity Indicator (“CII”) overall performance.
Throughout the period a further 12 vessels were fitted with energy
saving devices (“ESDs”) including propeller boss-cap fins, high
performance paints, LED lighting, pre-swirl ducts and fuel efficiency
monitoring systems. At period end, 85% of the of the total TMI fleet
have at least three ESDs installed, with a combined annual fuel
saving potential of ~10% per vessel.
Grindrod has also adopted the use of energy-efficiency technologies,
fitting ESDs across the fleet to increase fuel consumption efficiency,
including the installation of variable frequency drives, fins, rudder
bulbs and ducts. At the year-end, 88% of the owned Grindrod fleet
had at least two ESDs installed.
Other environmental initiatives
• Phasing out of single use plastics onboard: a ‘Plastics Free’
campaign has been rolled out across the fleet, with mineralised
water fountains and reusable water bottles successfully installed
and distributed fleet-wide, saving 15,000 plastic bottles from
being used and disposed of onboard monthly
• Ballast Water Management: at the end of the period, 95% of the
Company’s fleet was Ballast Water Treatment System fitted, in
compliance with the International Ballast Water Management
Convention, aimed at conserving marine biodiversity
• Vessel emissions measurements: daily monitoring of fleet
emissions including CO
2
, NOx and SOx emissions
Engagement with decarbonisation technology providers
The Group continues to engage with industry technology developers
of promising low/zero carbon technologies and fuels, such as
charterers utilising biofuels, carbon capture technology and wind
propulsion technology providers.
3) Onshore and at sea safety:
Safety procedures
In collaboration with TMI’s technical managers, TMI has fostered a
robust safety culture both onshore and offshore. TMI’s technical
managers have implemented a collection of safety procedures,
policies, and protocols on-board vessels, helping the crew mitigate
the daily risks faced during vessel operations. Vessel safety
performance is monitored by collecting and tracking performance
against a comprehensive list of industry KPIs and ensuring that any
significant incidents are reported upon with follow up actions
taken. During the year TMI recorded a 33% year on year improvement
of the TMI fleet's LTI ("Lost Time Incident rate"), from 0.85 to 0.67.
Security at sea
Seafarers of the dry bulk shipping industry are required to call a
wide-range of ports around the globe, some of which are located
remotely. Alongside the Group’s commercial and technical
managers, vessel positions are closely monitored to ensure the
necessary security steps are taken if vessels enter high-risk waters
or ports (e.g. threat of piracy, thieves). In higher risk jurisdictions,
the Group’s managers take extra precautions when a vessel is in
transit, such as crew safety briefings before entering high-risk
against the UK Code or the AIC Code are deemed to satisfy the
provisions of the Guernsey Code.
For the year ended 31 March 2023, the Company has complied
substantially with the Principles and Provisions of the AIC Code,
with the exception of that the Company did not have a Senior
Independent Director (“SID”) for part of the financial year as detailed
further below.
Senior Independent Director:
Frank Dunne was appointed as a non-executive Director and SID of
the Company on 31 October 2022. Mr Dunne retained the SID
position for the period from 31 October 2022 to 6 January 2023,
when Nicholas Lykiardopulo stepped down from his position as
Chair and resigned from the Board. With immediate effect, Frank
Dunne, was subsequently appointed as acting Interim Chair whilst
a recruitment process was conducted to seek a new permanent
Chair. On 1 June 2023, Henry Strutt was appointed as the new
Chair of the Board and Frank Dunne stepped down as acting Chair
resuming his position as the SID.
Issues that are not reported on in detail here are excluded because
they are deemed to be irrelevant to the Company.
The AIC Code is available on the AIC website (www.theaic.co.uk). It
includes an explanation of how the AIC Code adapts the Principles
and Provisions set out in the UK Code to make them relevant for
investment companies.
None of the requirements under LR 9.8.4 are applicable to the
Group, with the exception of LR 9.8.4 R (4) with regards to disclosing
details of any long-term incentive schemes and LR 9.8.4 R (10) (b)
with regards to disclosing any details of contracts of significance,
both are disclosed in Note 10 related parties and other key contacts.
Composition of the Board and independence
of Directors
As at 31 March 2023, the Board of Directors comprised four non-
executive and independent Directors, one non-executive non-
independent Director and an executive Director.
With the exception of Edward Buttery and Chris Buttery, all directors
are considered independent of the Executive Team, the Commercial
Manager and the Technical Manager. Edward Buttery is employed
as the Chief Executive Officer of the Group. Christopher Buttery,
Edward’s father, acts as a non-executive Director. Both have close
connections with the Commercial Manager and the Technical
Manager and are therefore not considered independent. The Board
reviews the independence of the Directors annually. The Directors’
biographies are disclosed on pages 28 – 29.
Under the terms of their appointment, all the Directors are subject
to re-election at the first AGM. Thereafter, in accordance with the
Company’s Articles of Incorporation, two Directors shall retire each
year and may offer themselves for re-election. However, in
accordance with the recommendations of the AIC code, the Board
has agreed that all directors will retire annually and, if appropriate,
seek re-election.
Board diversity
The Board brings deep experience from shipping and financial services
and, at the date of this report, in total 43% of the Board are female with
60% of the independent directors being female. The Board supports
the widening of its diversity, whilst ensuring the capabilities, experience
and background of each member remain appropriate to the Group and
continue to contribute to overall Board effectiveness. Further details of
the Board and Executive Team diversity is detailed in the Nomination
and Remuneration Committee Report.
The Board and Executive Team and our other advisers acknowledge
and adhere to the Market Abuse Regulation, which was
implemented on 3 July 2016.
Board evaluation
The Board has established a policy that it will undertake an external
evaluation every three years in accordance with the AIC Code and
internal evaluations in the other years. Internal evaluations are
based on questionnaires prepared by the Company Administrator.
The first internal evaluation questionnaires were completed in May
2022, the results of which are detailed further in the Nomination
and Remuneration Committee Report. The evaluation process on
an annual basis is led by the Chair of the Nomination and
Remuneration Committee.
The Board remains cognisant of the need to anticipate and respond
to evolving challenges, and therefore the governance framework in
place by the Company is subject to regular review to ensure it
remains appropriate in the context of the Company.
Governance
Corporate Governance
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
GovernanceCorporate Governance continued
Board values and culture
The Chair is responsible for setting the standards and values
expected of the Board, and the Board operates with the Company’s
core values of integrity, transparency and accountability with an aim
of maintaining a reputation for high standards in all areas of the
Group’s activities. The Board recognises the value and importance to
all stakeholders of organisations incorporating effective environmental,
social and governance policies as part of its day-to-day operations;
refer to pages 21 – 22 for additional information.
Through designing an effective ESG policy which reflects the Board’s
core values and the alignment of this with the Group’s business
operations, the Board seeks to promote a culture of openness and
constructive challenge amongst those responsible for taking key
decisions. The Group aspires to be a responsible corporate citizen,
committed to integrating environmental, social and governance
factors into the Group’s investment process. The aim is to engage
actively with shareholders to achieve our collective ESG
responsibilities and ambitions. The Group believes that the shipping
industry, irreplaceably serving the basic needs of global society, is in
a position to contribute positively to the United Nations Sustainable
Development Goals (“SDG”s). For further details see the ESG Review
on pages 18 – 20.
Directors’ and officers’ liability insurance
The Company maintains insurance in respect of directors’ and officers’
liability in relation to the Directors’ actions on behalf of the Group.
Relations with Shareholders
The Board believes that the maintenance of good relations and
understanding the views of Shareholders is important to the long-
term sustainable success of the Company and since launch the
Board has adopted a policy of actively engaging with major
Shareholders through a variety of means. Further information on
how the Company engages with shareholders can be found in the
Stakeholders report on pages 21 – 22.
Directors’ meetings and attendance
The table below shows the Directors’, who served during the year, attendance at Board and Committee meetings during the year ended 31
March 2023:
Number of
meetings
held
Frank
Dunne
Edward
Buttery
Helen
Tveitan
Trudi
Clark
Chris
Buttery
Sandra
Platts
Nicholas
Lykiardopulo
Board – scheduled41444443
Risk and Audit Committee6N/AN/A56N/A6N/A
Nomination and Remuneration Committee81N/A78N/A87
ESG and Engagement Committee41N/A44N/A43
In addition to the scheduled quarterly board and committee meetings detailed above, there were also fifteen ad hoc board meetings.
Governance
Corporate Governance
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
GovernanceCorporate Governance continued
Board responsibilities
The Board meets formally on a quarterly basis to review the overall
business activities of the Company and any matters specifically
reserved for its consideration. Standing agenda items considered at
all quarterly board meetings cover vessel portfolio performance,
chartering strategy, capital allocation and deployment, ESG matters,
NAV and share price performance, shareholder return metrics,
reviewing changes to the risk environment including the assessment
of emerging risks, investor relations and communications, peer
group information and industry issues. Consideration is also given to
administration and corporate governance matters, legislative
developments and, where applicable, reports are received from the
Board’s formally constituted committees.
The Directors also review the Group’s activities every quarter to
ensure that the Company adheres to its investment policy.
Additional ad hoc reports are received as required and Directors
have access at all times to the advice and services of the Company
Secretary, who is responsible for ensuring that the Board
procedures are followed, and that applicable rules and regulations
are complied with. The Board has adopted a schedule of matters
specifically reserved for its decision making and distinguishing
these from matters it has delegated to the Executive Team and
other key service providers.
Although no formal training is given to Directors by the Company,
the Directors are kept up to date on various matters such as
Corporate Governance issues through bulletins and training
materials provided from time to time by the Company Secretary,
the AIC and professional firms.
The Board actively monitors the level of the share price premium or
discount to determine what action, if any, is required.
Board Committees
Throughout the period a number of committees have been in place. All operate within clearly defined terms of reference. The committee
membership of the independent directors is detailed below:
Risk and Audit Committee
Trudi Clark Chair
Helen Tveitan
Sandra Platts
Frank Dunne (for the period 31 October 2022 to 6 January
2023, subsequently re-appointed on 1 June 2023)
Provides oversight and reassurance to the Board, specifically with regard to the
integrity of the Group’s financial reporting, audit arrangements, risk management
and internal control process and governance framework.
Nomination and Remuneration Committee
Sandra Platts Chair
Frank Dunne (appointed to committee on 25 January 2023)
Trudi Clark
Helen Tveitan
Nicholas Lykiardopulo (resigned 6 January 2023)
Henry Strutt (appointed 1 June 2023)
To review the structure, size and composition of the Board and consider
succession plans for the Board and the Executive Team.
To determine the remuneration policy, set the remuneration of the Board and the
Executive Team and to approve and oversee bonus and Long-term incentive plan
(“LTIP”) awards.
ESG and Engagement Committee
Helen Tveitan Chair
Frank Dunne (appointed to committee on 25 January
2023)
Trudi Clark
Sandra Platts
Nicholas Lykiardopulo (resigned 6 January 2023)
Manages any conflicts of interest in respect of the Group’s relationship with the
Executive Team, the Commercial Manager, the Technical Manager and other service
providers.
To guide supervise and support the Executive team in the implementation of the
Group’s ESG policy.
To evaluate the performance and terms of engagement of the key service
providers to the Group.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
GovernanceCorporate Governance continued
Management arrangements
The Executive Team
The biographies of the Executive Team are provided on page 30.
The services of the Executive Team are provided pursuant to an
intra group advisory and services agreement between TMIUK and
the Company dated 1 April 2022 (the “Advisory Agreement”). For
the period 31 March 2021 to 31 March 2022, the services of the
Executive Team were provided pursuant to an intra group advisory
and services agreement between TMIHK and the Company dated 6
May 2021. From 1 March 2022, Edward Buttery was employed
directly by the Company.
The Executive Team are responsible for the identification of
appropriate acquisition opportunities, conducting necessary due
diligence and making recommendations to the Board. They are also
responsible for the day-to-day management and review of
performance of the Group’s portfolio of investments, as well as the
Group’s daily and forecasted financial management. In liaison with
the Company’s service providers, the team handle investor relations,
reporting, risk management and monitoring of the external
commercial and technical managers of the Group’s vessels.
The Executive team have entered into employment agreements with
the Group, are paid a salary and are entitled to participate in the
Group’s annual bonus plan, the LTIP and the Deferred Bonus Plan
(“DBP”), see Report of the Nomination and Remuneration Committee.
Commercial Manager and Technical Manager
Under the Framework Management Agreement dated 6 May 2021
(the "Framework Management Agreement), Taylor Maritime (HK)
Limited ("TMHK") acts as Commercial Manager to the TMI fleet
and Tamar Ship Management ("Tamar") acts as technical manager
for a majority of the TMI fleet. Both are related parties (See note 10).
Administrator
Administration and Company Secretarial services are provided to
the Company by Sanne Fund Services (Guernsey) Limited (the
“Administrator”). The Administrator also assists the Company with
AIFMD, Common Reporting Standard and FATCA reporting.
A summary of the terms of employment and appointment of the
Executive Team, Commercial Manager, Technical Manager and the
Administrator, including details of applicable fees and notice of
termination periods, is set out in note 10 to the Consolidated
Financial Statements.
Internal control review and risk management
system
The Board of Directors is responsible for putting in place a system
of internal controls relevant to the Company and for reviewing the
effectiveness of those systems. The review of internal controls is
an ongoing process for identifying and evaluating the risks faced
by the Company, and which are designed to manage risks rather
than eliminate the risk of failure to achieve the Company’s objectives.
It is the responsibility of the Board, supported by the Risk and Audit
Committee, to undertake risk assessments and review the internal
controls in the context of the Company’s objectives that cover
business strategy, operational, compliance and financial risks
facing the Company. These internal controls are implemented by
the Executive Team, the Administrator and the Commercial
Manager. The internal controls implemented by the Commercial
Manager are overseen by the Chief Financial Officer (“CFO”) of the
Executive Team. The CFO is located in Singapore in close proximity
to the key members of the Commercial Manager's finance team.
The Board receives updates from the Executive Team and the
Administrator at quarterly Board meetings. The Board is satisfied
that the Executive Team, the Commercial Manager and the
Administrator has effective systems in place to control the risks
associated with the services that they are contracted to provide to
the Company and are therefore satisfied with the internal controls
of the Company. In addition, the Board notes that Grindrod has an
internal audit function, which is outsourced to a third party provider,
and is responsible for providing objective assurance on the
effectiveness of the company’s risk management, control, and
governance processes.
The Board of Directors considers the employment arrangements of
the Executive Team and the arrangements for provision of
Administration services to the Company on an on-going basis and
a formal review is conducted annually. As part of this review the
Board considered the quality of the personnel assigned to handle
the Company’s affairs, the investment process and the results
achieved to date.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
The Company has established a Nomination and Remuneration
Committee (the “Committee”) comprised of the independent
non-executive Directors of the Company. The Committee, chaired
by Sandra Platts, operates within clearly defined terms of reference
which are considered and are then referred to the Board for
approval. A copy of the terms of reference is available on the
Company’s website or upon request from the Company Secretary.
The main roles and responsibilities of the Committee with regards
to Nomination are to:
• regularly review the structure, size and composition of the Board
and make recommendations to the Board with regard to any
changes, based on merit and objective criteria (including skills,
knowledge and experience, and promoting diversity of gender,
social and ethnic backgrounds, cognitive and personal strengths);
• give full consideration to succession planning for Directors and
other senior executives in the course of its work, ensuring
effective plans are in place for orderly succession to the Board
and to oversee the development of a diverse pipeline for
succession, taking into account the challenges and opportunities
facing the Company, and the skills and expertise needed on the
Board in the future;
• keep under review the leadership needs of the organisation, both
executive and non-executive, with a view to ensuring the
continued ability of the organisation to compete effectively in the
market place;
• lead the process for appointments and be responsible for
identifying and nominating, for the approval of the Board,
candidates to fill Board vacancies as and when they arise.
The main roles and responsibilities of the Committee with regards
to Remuneration are to:
• determine and agree with the Board the framework or broad
policy for the remuneration of the Company’s Chair, executive
directors, non-executive directors, and such other members of
the management as it is designated to consider. No director or
Executive Team member shall be involved in any decisions as to
their own remuneration;
• in determining such policy, take into account all factors which it
deems necessary. The objective of such policy shall be to ensure
that members of the management of the Company are provided
with appropriate incentives to encourage and enhance performance
and are, in a fair and responsible manner, rewarded for their
individual contributions to the success of the Company;
• review the ongoing appropriateness and relevance of the
remuneration policy;
• supervise the Long Term Incentive Plan (“LTIP”), Annual Bonus
Plan and the Deferred Bonus Plan and any other similar plans or
schemes of the Company from time to time.
The Committee reports formally to the Board on its proceedings on
all matters within its duties and responsibilities and on how it has
discharged its responsibilities. The Committee meets at least twice
per year and at such other times as the Committee Chair shall
require. Other Directors and third parties may be invited by the
Committee to attend meetings as and when appropriate.
Activity
The Committee met eight times during the financial year and twice
following the year end. The principal matters considered at these
meetings included, but were not limited to:
• the review, evaluation of the composition of the Board and
appointment of a Senior Independent Director (“SID”);
• the review and consideration of Executive Team appointments
and structure;
• the consideration of proposals and approval of the Executive
Team remuneration package including;
– approval of Executive Team salaries for 2022/23 and 2023/24;
– awarding of shares under the terms of the LTIP for 2022/23
including the targets to be achieved for the awards to vest;
– review of the annual bonus awards based on results for the
year ended 31 March 2023, including consideration of whether
part to be awarded in the form of deferred shares;
– setting of the annual bonus targets for 2023/24
• to approve the Company’s annual staff plan and remuneration
budget;
• to oversee the recruitment of a replacement Chairman following
the resignation of Nicholas Lykiardopulo on 6 January 2023,
including appointing an external recruitment agent to assist the
Company in the selection process.
Board Composition
The Committee keeps under constant review the Board’s
composition, skills sets, experience and diversity. The Board
consists of seven members of which five are considered
independent. Six were appointed at IPO, Frank Dunne joined the
Board on 31 October 2022 as Senior Independent Director and has
also acted an interim chair following the resignation of Nicholas
Lykiardopulo on 6 January 2023. Following the year end, Henry
Strutt was appointed the new independent Chair and Frank Dunne
resumed is role as Senior Independent Director.
Chairman recruitment process
The process for the appointment of the Chairman was led by the
Chair of the Committee. In accordance with the Company’s policy,
the Committee engaged an independent external search firm,
Sapphire Partners Limited (“Sapphire”), to assist with the recruitment
process. Sapphire, who were selected following a competitive tender
process and have no connection to the Company or the individual
Directors, have extensive experience in recruiting for senior board
positions in the financial services industry.
The search process was designed to identify candidates who met the
Board’s desired criteria, including a strong track record of leadership at
a senior level; experience in a complex, regulated environment; and a
deep understanding of the financial services industry.
The search firm identified a number of potential candidates, all of
whom were assessed against the agreed criteria. The Committee
then conducted a series of interviews with a shortlist of three
candidates, before making a recommendation to the Board.
Governance
Report of the Nomination and
Remuneration Committee
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
GovernanceReport of the Nomination and Remuneration Committee continued
Following this process, Henry Strutt was appointed as Chairman
on 1 June 2023.
On appointment, Mr Strutt was also appointed as a member of the
Committee and the ESG & Engagement Committee, and Frank
Dunne recommenced his role as SID and re-joined the Risk and
Audit Committee.
Grindrod
As referred to previously in this annual report the Company
successfully completed the closure of its investment in Grindrod
on 19 December 2022. The Committee and the Board recommended
the appointment of six Directors to serve on the Grindrod Board
and all six Directors were assessed as independent directors in
accordance with the Singapore Code of Corporate Governance. In
addition, on 21 March 2023, the Company announced that Edward
Buttery would be appointed as joint CEO of both the Company and
Grindrod to focus on achieving strategic synergies between the
two companies. The Committee reviewed the recommendation
proposed by the Grindrod board concerning Mr Buttery’s remuneration
which is disclosed in the table on 38.
Board Tenure
The Board, in accordance with the AIC Code, has adopted the policy
to limit the tenure of Non-Executive Directors, including the Chair to
nine years.
Succession Planning
The Nomination and Remuneration Committee continues to
maintain and develop the Board’s succession planning arrangements
to ensure the arrangements remain effective, and that a diverse
pipeline for succession is maintained which remains aligned with the
Company’s and Group’s strategy and future leadership needs.
Diversity Policy
The Group is committed to treating all employees equally and
considers all aspects of diversity, including gender and ethnic
diversity, when considering recruitment at any level of the business.
All candidates are considered on merit and against objective
criteria, but having regard to the right blend of skills, experience and
knowledge at the Board and Executive level, and amongst our
employees generally.
Board diversity statement
The Company’s policy is the Board should have an appropriate level
of diversity, taking into account relevant skills, experience, gender,
social and ethnic backgrounds, cognitive and personal strengths.
The Directors’ biographies are disclosed on pages 28 – 29.
In accordance with the new requirements of the Listing Rules LR
9.8.6 R (9) and (11) (applicable for periods from 1 April 2022), the
Company is required to include a statement in the annual report
setting out whether it has met the following targets on Board
diversity as at 31 March 2023:
1) At least 40% of individuals on its board are women;
2) At least one of the senior board positions
1
is held by a woman; and
3) At least one individual on its board is from a minority ethnic
background.
The tables below set out the diversity information, which was
obtained through anonymous questionnaires provided by the
Company Secretary, for both the Board and the Executive Team as at
31 March 2023:
Gender identity or sex
Number of
Board
members
Percentage of
the Board
Number of
senior
positions on
the Board
Number in
Executive
Team
2
Percentage
of Executive
Team
Men350%2133%
Women350%3267%
Not specified/prefer not to say-----
Ethnic background
Number of
Board
members
Percentage of
the Board
Number in
Executive
Team
2
Percentage
of Executive
Team
White British or other White (including minority white groups)583%133%
Asian/Asian British117%133%
Mixed/Multiple Ethnic Groups--133%
Not specified/prefer not to say----
1
The Company considers the positions of Chief Executive Officer, Chairman, Senior Independent Director and the Chair of the Board Commitees to be senior
positions of the Board.
2
Mr Buttery is considered a member of the Executive Team, however, the diversity information for Mr Buttery is included as a member of the Board.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
GovernanceReport of the Nomination and Remuneration Committee continued
As disclosed above, the Board have taken account of the targets
set out in the FCA’s Listing Rules. For the Group, not all senior roles
come with Company Board appointments, for example the Chief
Financial Officer for the Group (the “CFO”), is employed by TMI
Advisor Pte. Limited in Singapore. This role is held by a woman of
Asian ethnicity. The roles of Chairman, CEO and SID do have
Company board appointments are all currently held by men.
However, the Board considers the Chairs of all the Board
Committees to be senior board positions and the above disclosures
have been made on this basis. The above information has been
provided by each Director and Executive Team member. Since 31
March 2023, Henry Strutt was appointed as Chair of the Board and
Frank Dunne stepped down as interim Chair resuming his position
as the SID on 31 May 2023. The above diversity analysis does not
include Mr Strutt, who did not serve as a Director during the year.
Board Evaluations
The Board, led by the Chair of the Nomination and Remuneration
Committee, conducted a formal internal evaluation of its
performance during the year ended 31 March 2023. The evaluation
was carried out using self-assessment questionnaires prepared by
the Company Secretary. The purpose of the evaluation was to
assess the effectiveness of the Board as a whole, the effectiveness
of the Chair, as well as the performance of individual directors.
The process involved a series of numerical gradings and options
for qualitative feedback and covered a range of areas, including:
• Board composition and diversity
• Board information, processes and procedures
• Board culture and dynamics
• Board accountability and effectiveness
• Risk management and oversight
• Strategy development and implementation
• Financial reporting and controls
• Stakeholder engagement and communication
The results of the evaluation confirmed that the Board continued to
operate effectively, and no significant failings or deficiencies were
identified. Feedback from the process provided valuable insight to
areas where further investigation may enhance the Board’s
effective operation and will form part of the Board’s agenda for the
coming year.
The Board remains committed to continuous improvement and
ensuring that it operates effectively and in the best interests of the
company and all key stakeholders.
Remuneration policy
At the Company’s Annual General Meeting (“AGM”) on 7 September
2022, ordinary resolutions were proposed to shareholders to
approve the Directors’ Remuneration Policy and the Directors’
Remuneration Report for the period 31 March 2021 (date of
incorporation) to 31 March 2022. Both resolutions had near
unanimous support with over 99% of votes at the meeting being
cast in favour. The Committee was pleased by the high level of
shareholder support for the Remuneration Policy and the
Remuneration Report.
The overall objective of our policy is to provide a straightforward
remuneration package which seeks to attract and retain personnel
with the skills, experience and qualifications needed to manage and
grow the business successfully and to enhance shareholder value.
The Committee has, in determining the policy and in its
consideration of remuneration in respect of 2023/24; had extensive
discussions and consulted various published surveys on executive
pay and Board fees for investment trusts and other listed
companies; as well as taken advice from the non-Executive Board
members who have knowledge of remuneration packages paid to
Executives in peer companies in the shipping industry.
UK Code
As an internally managed investment company, the AIC code states
that we should have regard to the provisions of Section 5 of the UK
Corporate Governance Code 2018 (the “UK code”).
We have considered the provisions of Section 5 of the UK Code and
believe we comply based on the following:
• We operate consistent pension arrangements over all our TMI
workforce, and from 2022/23 have offered a cash sum or cash
sum and contributions into a Government scheme to comply
with any local statutory requirements;
• LTIP awards vest after 3 years and the Executive Director from
2023/24 will be subject to a further two year holding period;
• All incentive awards include certain clawback provisions on
errors in assessing a performance condition;
• Although currently variable incentive schemes are only available
to the Executive Team, as the Group grows it is expected that
schemes will be extended to all employees;
• The Nomination and Remuneration Committee believes that
variable remuneration schemes are fair, align with the Group
performance and do not encourage inappropriate risk taking.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
GovernanceReport of the Nomination and Remuneration Committee continued
Directors’ Remuneration Policy – 2023/24
Shareholder approval will be sought at the forthcoming Annual General Meeting of the policy as set out below. Subject to shareholder
approval, the policy will take effect immediately after the Annual General Meeting and will apply to the 2023/24 financial year.
The number of deferred shares to be awarded to each member of
the Executive Team is to be determined using a five-day average of
the closing price of the Company’s Ordinary Shares prior to the date
of grant. An announcement confirming the number of deferred
shares awarded to each member of the Executive Team in respect
of the 2022/23 performance period will be released at the point of
vesting. The share awards will vest in equal instalments over 3
years commencing from the first anniversary of the award.
Director’s Remuneration in 2023/24
Executive Director
Change from 2022/23
financial period
Base
Salary
£530,000
The Executive
Director is also paid
to undertake the
CEO role of Grindrod
a base salary of
£350,000.
6.0% average increase has
been awarded to all employees
compared to the published UK
inflation figure of 10.3% at 31
March 2023.
Pension10.0% of Salary10% of Salary – No change from
prior year.
Annual
Bonus
Based on
performance for the
year 2023/24, shown
as a percentage of
base salary:
–30.0% based on net
asset total return of
10% of more;
– 50.0% based on
strategic objectives
in particular around
the integration of
Grindrod;
–10.0% based on
ESG targets;
–10.0% based
on personnel
development.
Based on performance for the year
2022/23, shown as a percentage
of base salary:
–45.0% based on net asset total
return of 10% of more;
–20.0% based on strategic
objectives;
–20.0% based on ESG targets;
–15.0% based on personnel
development.
The Committee assessed that the
achievement level of the above
objectives for year 2022/23 was
75%. Of which:
–50.0% cash - £187,500, will be
paid in cash; and
–50.0% shares -£187,500, will be
paid in shares (The share award
will vest in equal instalments over 3
years and are subject to a further 2
year hold period).
LTIPThe LTIP award
structure is currently
under review,
particularly as
regards the vesting
criteria. The Board
wishes to ensure that
the rules continue to
reward performance
but remain aligned
with investor returns.
Based on 3 years' performance
from the 1 April 2022:
- 80.0% based on annual total
NAV return
~ Threshold target 5.0%
~ Maximum target 12.0%
- 20.0% based on ESG targets
Non-Executive Directors
Fees
Chair £90,000
Director £60,000
Additional Fees
Risk and Audit Chair £10,000
ESG and Engagement Chair £7,500
Nomination & Remuneration Chair £7,500
No changes to non
executive director fees
are proposed this year.
Sandra Platts
Nomination and Remuneration Committee Chair
26 July 2023
Page 40
I
Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Governance
Report of the Risk and Audit Committee
The Company has established a Risk and Audit Committee with
formally delegated duties and responsibilities within written terms
of reference (which are available on the Company’s website and
from the Company Secretary).
Chair and membership
As at 31 March 2023, the Risk and Audit Committee comprised
Trudi Clark, Sandra Platts and Helen Tveitan. On 31 October 2022,
Frank Dunne was also appointed to the Risk and Audit Committee,
however, the period between 6 January 2023, on his appointment
as acting Interim Chair, he stepped down from his role on the Risk
and Audit Committee. Mr Dunne was subsequently re-appointed on
1 June 2023, when he stepped down from his role as Interim Chair.
All Committee members have competence relevant to the listed
investment funds sector in which the company operates. The
Committee is chaired by Trudi Clark, who is a Chartered Accountant.
She qualified in 1985 and was a senior Audit Manager at KPMG.
She held the position of Head of European Internal Audit for the
Bank of Bermuda and in 1995 moved to Schroders (C.I.) Limited as
Chief Financial Officer, before being promoted to Chief Executive
Officer in 2003. Trudi’s full biography can be found on page 29.
All members of the Committee are independent Directors; have no
present links with PricewaterhouseCoopers CI LLP, the Company’s
Auditor (the “Auditor” or “PwC); and are independent of the Executive
Team. The membership of the Risk and Audit Committee and
its terms of reference are kept under review. The Risk and
Audit Committee meets at least twice a year and with the Auditor
as appropriate.
Duties
The Risk and Audit Committee’s main role and responsibilities are
to provide advice to the Board on whether the Annual Report and
Audited Consolidated Financial Statements, taken as a whole, are
fair, balanced, and understandable and provide the information
necessary for Shareholders to assess the Group’s performance,
business model and strategy. The Risk and Audit Committee gives
full consideration and recommendation to the Board for the approval
of the contents of the Consolidated Financial Statements of the
Company, which includes reviewing the external auditor’s reports.
The other principal duties, amongst others, are to consider the
appointment of the external auditor, to discuss and agree with the
external auditor the nature and scope of the audit, to keep under
review the scope, results and effectiveness of the audit and the
independence and objectivity of the auditor, to review the external
auditor’s letter of engagement, the audit plan and management
letter, and to analyse the key procedures and controls adopted by
the Company’s service providers.
The Risk and Audit Committee is responsible for monitoring the
financial reporting process and the effectiveness of the Company’s
internal control and risk management systems. The Risk and Audit
Committee also focuses particularly on compliance with legal
requirements, accounting standards and the relevant Listing Rules
and ensuring that an effective system of internal financial and non-
financial controls is maintained.
Financial reporting and audit
The Risk and Audit Committee has an active involvement and
oversight in the preparation of both the Interim Report and
Unaudited Condensed Consolidated Financial Statements and the
Annual Report and Audited Consolidated Financial Statements and
in doing so is responsible for the identification and monitoring of
the key risks associated with the preparation of the Financial
Statements. The Risk and Audit Committee determine that the key
risk of material misstatement of the Group’s Consolidated Financial
Statements is related to the valuation of Company’s investments.
The significant issue identified in the preparation of these
Consolidated Financial Statements is the valuation of the
Company’s investment in Financial Assets at fair value through
profit or loss. This is the Company’s investment in Holdco and the
SPVs, which hold all of the underlying vessel assets including
through the SPV Good Falkirk (MI) Limited the 83.23% investment
in Grindrod . A summary of the action taken by the Committee to
satisfy itself as to the accuracy of the value and disclosures around
investments is summarised below.
Page 41
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
GovernanceReport of the Risk and Audit Committee continued
Significant Matters considered by the Risk and Audit Committee in relation to the Financial
statements
Fair value of Financial Assets at fair value through profit or loss
MatterAction
Fair value of the TMI fleet
1. Delivered Vessels
The fair value of delivered vessels represents US$373 million as at
31 March 2023. The fleet is valued by two independent ship valuation
brokers (Hartland Shipping Services Limited and Braemar ACM
Valuations Limited) on a charter free basis, with the arithmetical
mean of the two valuations taken as the balance sheet value. Such
valuations are subjective, requiring significant judgement by the
valuers. Errors in the valuation could have a material impact on the
Company’s net assets.
The Executive Team, review the outcomes of the valuation process
throughout the year and discuss with the brokers individual ship
valuations based upon their specialist knowledge of particular vessels.
At the reporting date the Risk and Audit Committee and other
members of the Board discuss in detail the independent ship brokers’
valuation in comparison to our in-house Executive Team views and
current market conditions and recent S & P activity.
In conjunction with the ESG and Engagement Committee, the Committee
consider the ongoing independence of the two external brokers.
2. Adjustments for Charter Leases
As the brokers’ valuations are prepared on a charter -free basis,
the Executive Team assesses any difference in value arising from
the contracted charter versus the market rate for those contracts
which have greater than 12 months to run from 31 March 2023.
If the difference is material, the valuation of the vessel is adjusted
accordingly.
The calculations prepared by the Executive Team are reviewed by
the Committee including a review of the market rate used which is
compared to FFA benchmark rates.
3. Undelivered vessels
Vessels sold but not yet delivered – valuation is the agreed selling
prices under the relevant memoranda of agreements, of these vessels.
Vessels purchased but not yet delivered – The vessels are valued
using the average of the two independent broker valuations and the
difference between this and the purchase price is recognised as a fair
value gain or loss in the relevant SPV.
Enquires of Executive Team to ensure that memoranda of agreements
(“MOAs”) and other sale documentation has been entered into and
that contract terms are binding.
This would be subject to the same scrutiny and procedures as when
determining the fair value of delivered vessel as described above.
4. Vessel under Construction
The fair value of the vessel under construction is determined based
on the difference in the net present value ("NPV") of future payments
in accordance with the terms of the original vessel construction
contract, and the prevailing market value for the vessel construction
contract, as determined by the independent ship valuation brokers,
for the new vessel at 31 March 2023.
In conjunction with the Executive Team, the Committee consider the
contract terms of the existing contract compared to current new build
price, as determined by the independent ship brokers’ valuation, whilst
also considering current capacity in shipyards for new construction
contracts. The conclusion was that, although market prices had fallen,
the availability of a build slot meant this was a valuable contract and
that the fair value was accurate.
5. Investment in Grindrod
The company investment 83.2% of the share capital is held via
the SPV Good Falkirk (MI) Limited and therefore it is valued as an
unquoted investment and a level 3 asset.
The fair value is determined on an adjusted net asset basis. Fair value
adjustments for the Grindrod vessel assets were established using a
similar valuation basis as for TMI’s vessel assets.
The Risk and Audit Committee on behalf of the board initially engage an
independent globally recognised accountancy firm (the “Independent
Accountancy firm”) to assess whether the Group, following the Grindrod
acquisition, still met the “Investment entity” definition in accordance with
IFRS 10 and, as a result, it was appropriate to value Good Falkirk (MI)
Limited on a fair value basis. In addition, the Independent Accountancy
firm were asked to assess whether using a look through to the net asset
values of Grindrod, adjusted for the fair value of the Grindrod’s vessel
assets, was consistent with IFRS standards and guidelines.
Following the Independent Accountancy firm’s assessment, the Board
concluded that the Group still met the “Investment entity” definition and
that the adjusted NAV basis was appropriate. Since the Grindrod value
is a significant portion of the overall NAV of the Company (47.7%), we
commissioned a second independent globally recognised accountancy
firm (the “Independent Valuer”) to provide us with an independent
valuation. The Independent Valuer adopted a primary adjusted net
asset approach looking to calculate a fair value basis NAV for Grindrod,
the primary approach was supported by a secondary income valuation
approach using a DCF model.
The Risk and Audit Committee reviewed the content of both reports as
well as the supporting calculations in detail with the executive team.
Page 42
I
Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
GovernanceReport of the Risk and Audit Committee continued
Based on the review and analysis described above, the Risk and
Audit Committee is satisfied that, as at 31 March 2023, the fair
values of Holdco and the SPVs, including the underlying vessel
assets held and the Investment In Grindrod by the SPVs, is
appropriately stated. As a result, the Risk and Audit Committee is
satisfied that as at 31 March 2023, as stated in the Consolidated
Financial Statements, the fair value of the Company’s investment in
Financial Assets at fair value through profit or loss is reasonable.
Other Matters considered by the Audit and
Risk Committee in relation to the Financial
statements
The Risk and Audit Committee reviewed the Company’s accounting
policies applied in the preparation of the Consolidated Financial
Statements, together with the relevant critical judgements,
estimates and assumptions made by the Board and, having
discussed matters with the Executive Team and Administrator,
determined that these were in compliance with International
Financial Reporting Standards (“IFRS”) as issued by the IASB and
were reasonable.
The Risk and Audit Committee also reviews the Company’s
financial reports as a whole to ensure that such reports
appropriately describe the Company’s activities and that all
statements contained in such reports are consistent with the
Company’s financial results and projections. Accordingly, the Risk
and Audit Committee was able to advise the Board that the Annual
Report and Audited Consolidated Financial Statements are fair,
balanced and understandable and provide the information
necessary for Shareholders to assess the Company’s performance,
business model and strategy.
Other Matters considered by the Risk and
Audit Committee in relation to the Financial
statements
External Auditor
The Risk and Audit Committee has responsibility for making a
recommendation on the appointment, re-appointment or removal
of the Auditor. PwC were appointed as Auditor at IPO. The Risk and
Audit Committee is currently considering statutory audit provision
across the Group and will make recommendations to the Board in
due course.
During the period under review, the Risk and Audit Committee
received and reviewed the audit plan and report from the Auditor.
To assess the effectiveness of the Auditor, the Risk and Audit
Committee reviewed:
• The Auditor’s fulfilment of the agreed audit plan and variations
from it, if any;
• The Auditor’s assessment of its objectivity and independence as
auditor of the Company;
• The Auditor’s report to the Risk and Audit Committee highlighting
their significant areas of focus in the conduct of their audit and
findings thereon that arose during the course of the audit; and
• Feedback from the Executive Team and Administrator evaluating
the performance of the audit team.
For the year ended 31 March 2023, the Risk and Audit Committee
was satisfied that there had been appropriate focus and challenge
on the primary areas of audit risk and assessed the quality of the
audit process as good.
Where non-audit services are to be provided to the Company by the
Auditor, full consideration of the financial and other implications on
the independence of the Auditor arising from any such engagement
will be considered before proceeding. All non-audit services are
pre-approved by the Risk and Audit Committee if it is satisfied that
relevant safeguards are in place to protect the Auditor’s objectivity
and independence.
To fulfil its responsibility regarding the independence of the Auditor,
the Risk and Audit Committee considered:
• a report from the Auditor describing its arrangements to identify,
report and manage any conflicts of interest; and
• the extent of non-audit services provided by the Auditor.
PwC provided both audit and non-audit services as listed below.
During this year ended 31 March 2023, PwC did not provide any
non-audit services. For the prior year, PwC confirmed that their
non-audit services did not impact their independence and provided
reasons for this. Furthermore, these non-audit services were in
compliance with the Financial Reporting Council’s Revised Ethical
Standard of 2019.
Page 43
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
GovernanceReport of the Risk and Audit Committee continued
Internal controls
As the Company’s investment objective is to invest all of its assets
into the Holdco and the SPVs, the Risk and Audit Committee, after
consultation with the Executive Team and Administrator, considers
the key risk of misstatement in its Financial Statements to be the
valuation of its investment in Holdco and the SPVs, but are also
mindful of the risk of the override of controls by the Executive Team
and the Administrator.
The Group also relies on the financial reporting from the Commercial
Manager in respect of the operation of its vessels. The Chief
Financial Officer, from the Executive Team, closely supervises the
reporting records and the financial internal controls in place at the
Commercial Manager. The Chief Financial Officer is located in
Singapore in close proximity to the key members of the Commercial
Manager’s finance team. The Commercial Manager financial
statements are audited on an annual basis with clean audit
opinions received to date, the latest being for the financial year
2021. Any issues identified would be escalated to the Risk and
Audit Committee. In addition, a due diligence visit will be undertaken
at a future date by members of the Risk and Audit Committee to
review the controls and procedures in place and to report back
to the Board.
The Risk and Audit Committee also considered the internal control
structure around Grindrod, the Chief Financial Officer has worked
closely with the financial team at Grindrod and an appropriate
system of reporting up to the Company’s Board has been put in
place of any material issues. The Risk and Audit Committee is also
mindful of the independent audit of Grindrod and also the
requirements concerning internal controls and the NASDAQ listing
rules. Grindrod has an outsourced internal audit function as well as
its own audit committee. In the coming months the Committee will
work with its counterpart in Grindrod to improve reporting on
internal controls.
Within TMI, the Executive Team and Administrator together
maintain a system of internal control on which they report to the
Board. The Board has reviewed the need for an internal audit
function and has decided that the systems and procedures
employed by the Executive Team and Administrator provide
sufficient assurance that a sound system of risk management and
internal control, which safeguards Shareholders’ investment and
the Company’s assets, is maintained. An internal audit function
specific to the Company is therefore considered unnecessary.
The Risk and Audit Committee is responsible for reviewing and
monitoring the effectiveness of the internal financial control
systems and risk management systems on which the Group is
reliant. These systems are designed to ensure proper accounting
records are maintained, that the financial information on which
business decisions are made and which is used in publications is
reliable, and that the assets of the Group are safeguarded. Such a
system of internal financial controls can only provide reasonable
and not absolute assurance against misstatement or loss.
In accordance with the guidance on risk management, internal
control and financial and business reporting published by the
Financial Reporting Council (the “FRC”) in September 2014, which
integrated the earlier guidance of the Turnbull Report, the Risk and
Audit Committee has reviewed the Group’s internal control
procedures. These internal controls are implemented by the
Executive Team and the Administrator and are considered by the
Risk and Audit Committee to be appropriate for the business of the
Group. The Risk and Audit Committee has performed reviews of
the internal financial control systems and risk management
systems during the period. The Risk and Audit Committee is
satisfied with the internal financial control systems of the Group.
Trudi Clark
Risk and Audit Committee Chair
26 July 2023
The following table summarises the remuneration paid to PwC for audit and non-audit services.
For the year ended
31 March 2023
£
31 March 2021 to
31 March 2022
£
Annual audit of the Company401,600275,730
Interim review of the Company45,00048,530
Annual audit of the TMI Advisors (UK) Limited-12,500
Total audit related services 446,600336,760
Total non-audit related services-139,000
Page 44
I
Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Governance
Report of the ESG and Engagement
Committee
Chair and membership
As at 31 March 2023, the ESG and Engagement Committee
comprised Helen Tveitan, Trudi Clark, Frank Dunne and Sandra
Platts and is chaired by Helen Tveitan. The ESG and Engagement
Committee meets at least twice a year.
The Company views environmental, social and governance
concerns as integral to its ethos and investment process. To ensure
this, the Company has established the ESG and Engagement
Committee to oversee sustainability initiatives and monitor and
report progress periodically.
The ESG and Engagement Committee oversees and reports on all
sustainability policies and initiatives ensuring that the Company
remains committed to responsible stewardship of its assets and
the environment.
The Company’s ESG policy and objectives are set and monitored by
our ESG and Engagement Committee which reports to the Board.
The Executive Team is responsible for ESG reporting to the ESG
and Engagement Committee and working with our external service
providers and other key stakeholders to progress our decarbonisation
priorities and other critical environmental, social and governance
objectives. See the “Environmental, Social and Governance Review”
on pages 18 – 20.
In addition, the ESG and Engagement Committee is responsible
for the regular review of the terms of the key service provider
agreements and assessing the performance of all the key service
providers.
Duties
Environmental, Social and Governance (“ESG”)
The ESG and Engagement Committee’s duties include, but are not
limited to:
• Guide, supervise and support the Executive Team in drafting, and
periodically reviewing, the ESG strategy which sets out the
guiding principles, objectives, strategic actions and policies with
respect to ESG matters;
• Assess ESG risks and opportunities for the Group, such
assessment to be carried out in alignment with chosen reporting
frameworks, including assessment of climate change risks;
• Monitor the Group’s adherence to concrete ESG objectives and
KPIs and oversee the reporting of these objectives and KPIs.
Through the Committee, the Directors continually monitor the
performance of the Group’s objectives and policies with respect to
ESG matters and a formal, detailed assessment of the performance
is undertaken on at least an annual basis.
Engagement
In addition, the ESG and Engagement Committee continually
monitors the performance and the continued appointment of all
key service providers and a formal, detailed assessment of the
performance and the terms of engagement of the Company’s key
service providers is undertaken on at least an annual basis to
ensure each remains fair and reasonable. This annual review process
includes two-way feedback, which provides the Board with an
opportunity to understand the views, experiences and any significant
issues encountered by service providers during the period.
The Directors recognise the importance of maintaining strong and
effective business relationships with the Company’s key service
providers and that high quality interaction with these stakeholders
is an important factor in successfully delivering the Board’s
strategy. The annual performance assessment conducted by the
ESG and Engagement Committee seeks to ensure that:
• the terms of engagement remain fair and reasonable and
reflective of the services performed in the context of the nature,
scale and complexity of the Company;
• strong alignment between the objectives of the service provider
and those of the Company;
• they have not been the subject of any adverse event which may
present additional risk to the Company;
• they remain appropriately incentivised to perform their duties to
a high standard; and
• their continued engagement remains in the best interests of the
Company as a whole.
Related party interests and oversight of the Implementation of
the Conflicts of Interest Policy
The ESG and Engagement Committee is responsible for ensuring
that the Group’s business is conducted fairly and with the highest
level of Governance. On behalf of the Board, it is responsible for
ensuring that all potential conflicts of interest are recognised,
logged and managed as follows:
• managing conflicts of interest between the Board, Executive
Team and the other Group parties;
• considering the application of the Related Party Rules as set out
in Chapter 11 of the Listing Rules to arrangements and
agreements between the Group, the Executive Team and any
other related parties from time to time;
• considering any points of conflict which may arise between the
providers of other services to the Company.
Page 45
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
GovernanceReport of the ESG and Engagement Committee continued
Main activities during the year
ESG Review
The ESG and Engagement Committee has monitored the progress
of the Company with respect to the various initiatives relating to the
ESG Policy which is published on the Company’s website. In
October 2022, the ESG and Engagement Committee was pleased
to present the Company’s first inaugural standalone ESG report,
covering the Group’s activity for the period between 27 May 2021
(listing date) and 31 March 2022.
During the reporting period, the ESG and Engagement Committee
undertook the following activities:
• Appointment of an independent assurance provider for our ESG
report: An independent third-party firm have been engaged to
review and verify the accuracy and completeness of data used in
our ESG report. The firm was selected based on its expertise in
sustainability reporting and assurance;
• Ongoing monitoring of the performance of the Technical Manager
and Commercial Manager in accordance with the oversight and
reporting framework established during the previous year;
• Environmental regulations: the ESG and Engagement Committee
received reporting from the Technical Manager to evaluate the
emissions performance of the Company’s vessels and ensure
that they are on track to meet incoming industry decarbonisation
regulations;
• ESG and Engagement appointed a consultant to support the
oversight and evaluation of the Company’s external technical
and commercial managers.
As part of the Company’s social commitment, the Company set a
charity budget of US$200,000 for the financial year. This is primarily
donated to charities and causes related to seafarers, but may also
be deployed to environmental causes and communities with which
the Company has involvement.
Service provider performance assessment
The ESG and Engagement Committee undertook its first annual
performance evaluation of all key service providers in May 2022
and sought feedback from the Directors and Executive Team
regarding the quality of service and the effectiveness of the working
relationships with each service provider.
Additionally, all key service providers completed a self-assessment
questionnaire requesting details of their internal control environment,
approach to cyber security, business continuity arrangements, key
staffing policies (including matters of diversity and vetting of new
staff), policies regarding environmental impact and climate change,
as well as their adherence to anti-bribery, modern slavery, criminal
finances and general data protection regulations.
The ESG and Engagement Committee was satisfied with the
performance of each of the Company’s key service providers and
no material actions arose as a result of the review.
Potential Conflicts of Interest Review
During the period the ESG and Engagement Committee considered
the terms of a vessel sale to a consortium which included two
individuals who were considered related parties to the Group under
the listing rules. Compliance with the rules was satisfactorily tested
by the Group’s brokers Jefferies, however for commercial reasons
the transaction did not proceed.
Helen Tveitan
ESG and Engagement Committee Chair
26 July 2023
Page 46
I
Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Governance
Directors’ report
The Directors of the Company are pleased to submit their Annual
Report and the Audited Consolidated Financial Statements (the
“Financial Statements”) for the year ended 31 March 2023. In the
opinion of the Directors, the Annual Report and Audited Consolidated
Financial Statements are fair, balanced and understandable and
provide the information necessary for shareholders to assess the
Group’s performance, business model and strategy.
The Company
The Company was incorporated and registered in Guernsey under
the Companies (Guernsey) Law, 2008 on 31 March 2021. The
Company’s registration number is 69031 and it is regulated by the
Guernsey Financial Services Commission as a registered closed-
ended collective investment scheme pursuant to the Protection of
Investors (Bailiwick of Guernsey) Law, 2020, the Registered
Collective Investment Scheme Rules 2021 and the Prospectus
Rules 2021. The Company’s Ordinary Shares were admitted to the
premium listing segment of the Official List of the UK Listing
Authority and began trading on the Main Market of the London
Stock Exchange (“LSE”) on 27 May 2021 (Stock Code TMI).
Results and Dividends
The results for the period are shown in the Consolidated Statement
of Comprehensive Income on page 56.
The Board declared dividends of US$36,235,666 during the year
ended 31 March 2023 (31 March 2022: 11,528,775) followed by an
additional dividend of US$6,604,318 declared on 27 April 2023 in
relation to the quarter ended 31 March 2023. Further details of
dividends declared or paid are detailed in note 4.
Independent Auditor
PricewaterhouseCoopers CI LLP (“PwC”) were appointed on 13
October 2021 and continued to serve as Auditor during the financial
period. The Audit and Risk Committee have recommended to the
Board that given the enlarged group following the purchase of the
majority stake in Grindrod, that both the TMI and Grindrod audits
are put out to tender.
Directors and Directors’ Interests
The Directors, all of whom, with the exception of Edward Buttery,
are non-executive, are listed on pages 28 – 29.
Edward Buttery has a service contract with the Company, details of
which are outlined in the Nomination and Renumeration Committee
Report on pages 35 – 40 and in note 10. No other Director has a service
contract with the Company and no such further contracts are proposed.
Each of the Non-Executive Directors is entitled to receive a fee from
the Company at such rate as may be determined in accordance with
the Articles. Details of the fees paid to the Non-Executive Directors
for the year ended 31 March 2023 are outlined in Nomination and
Renumeration Committee Report on pages 35 – 40.
The Directors had the following interests in the Company, held
either directly or beneficially:
Directors of
the Company31 March 202331 March 2022
Name
No. of
Ordinary
SharesPercentage
No. of
Ordinary
SharesPercentage
Frank Dunne
1
42,4160.01%N/AN/A
Edward Buttery
2
470,3440.12%454,750
3
0.14%
Christopher Buttery 800,7220.20%650,7220.20%
Trudi Clark 70,0000.02%50,0000.02%
Sandra Platts 42,2610.01%42,2610.01%
Helen Tveitan20,0000.01%20,0000.01%
Nicholas
Lykiardopulo
4
N/AN/A2,436,087
5
0.74%
Executive team members
Alexander Slee56,8960.02%56,8960.02%
Camilla Pierrepont192,9290.06%172,9410.05%
Substantial Shareholdings
As at 31 March 2023, being the date of the latest shareholder
analysis prior to the publication of these Consolidated Financial
Statements, the following shareholders had holdings in excess of
3% of the issued Ordinary Share capital:
Name
No. of
Ordinary
Shares
Percentage
of Ordinary
Shares
Christian Oldendorff
Schifffahrtsholding GmbH & Co KG
34,042,93110.31%
Fidelity International32,351,9729.80%
M&G Investments23,767,5287.20%
Waverton Investment
Management
21,309,9916.45%
West Yorkshire PF13,955,8994.23%
CG Asset Management12,661,5363.83%
Hawksmoor Investment
Management
11,517,1513.49%
1
Appointed 31 October 2022.
2
Also includes 85,344 Ordinary Shares held by a person closely associated to Edward Buttery.
3
Includes an adjustment of -95,482 to account for an over-statement identified during the period to Edward Buttery’s previously disclosed shareholding of 550,232.
Also includes 85,344 Ordinary Shares held by a person closely associated to Edward Buttery at 31 March 2022.
4
Resigned 6 January 2023.
5
610,000 Ordinary Shares owned directly, and 1,826,087 Ordinary Shares held by Local Resources Ltd, which forms part of the assets of an irrevocable discretionary
trust of which Nicholas Lykiardopulo is a beneficiary.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
GovernanceDirectors’ report continued
Related Parties
Details of transactions with related parties are disclosed in note 10
to these Financial Statements.
Regulatory Requirements
Since being admitted to the premium listing segment of the Official
List of the UK Listing Authority on 27 May 2021, the Company has
complied with the Prospectus Rules, the Disclosure Guidance and
Transparency Rules and the Market Abuse Directive (as implemented
in the UK through Financial Services and Markets Authority).
Alternative Investment Fund Managers
Directive (“AIFMD”)
AIFMD seeks to regulate alternative investment fund managers
(“AIFM”) and imposes obligations on managers who manage
alternative investment funds (“AIFs”) in the EU and who market
shares in such funds to EU investors. The Company is categorised
as a self-managed non-EEA AIF for the purposes of the AIFM
Directive, as a consequence the Company needs to comply with
various organisational, operational and transparency obligations.
The Company is categorised as a non-EU AIF and the Board of the
Company is a non-EU AIFM, therefore, it is not required to seek
authorisation under the AIFMD to market its shares. However,
following national transposition of the AIFMD in a given EU member
state, the marketing of ordinary shares in AIFs that are established
outside to investors in that EU member state will be prohibited unless
certain conditions are met. Certain of these conditions are outside
the Company’s control as they are dependent on the regulators of
the relevant third country and the relevant EU member state entering
into regulatory co-operation agreements with one another.
The Directors have appointed the Risk and Audit Committee to
manage the relevant disclosures to be made to investors and the
necessary regulators. On 20 April 2021, the FCA confirmed that the
Company was eligible to be marketed via the FCA’s National Private
Placement Regime and the Company complied with Article 22 and
23 of the AIFMD for the year ended 31 March 2023. During the year,
the Company was also authorised to market in Norway.
The Company issued a prospectus on 7 May 2021 and all matters
were disclosed to investors as required under Article 23 of AIFMD.
As the Board of the Company is the AIFM, the details of the
Company’s remuneration policy for the Directors is outlined in the
Nomination and Remuneration Report and accords with the
principles established by AIFMD.
Employee Engagement & Business
Relationships
During the year ended 31 March 2023, the Company had one direct
employee, Edward Buttery, and the Group have further employees
including those within the Executive Team, see the Nomination and
Remuneration Committee Report for further details of the employee
engagements. The Company conducts its core activities through
the Executive Team and third-party service providers. The Board
recognises the benefits of encouraging strong business
relationships with the Executive Team and the key service providers
and seeks to ensure each is committed to the performance of their
respective duties to a high standard and, where practicable, that
the Executive Team and the providers are motivated to adding
value within their sphere of activity. Details on the Board’s approach
to service provider engagement and performance review are
contained in the Stakeholders Report.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Governance
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report and
Consolidated Financial Statements in accordance with applicable
law and regulations. The Companies (Guernsey) Law, 2008 (the
“Company law”) requires the Directors to prepare financial
statements for each financial year. The Directors have elected to
prepare the Financial Statements in accordance with International
Financial Reporting Standards (“IFRS”) as issued by the IASB and
applicable law.
Under the Company law, the Directors must not approve the
Financial Statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Group and its profit or loss
for that year.
In preparing these Financial Statements, the Directors are required to:
• select suitable accounting policies and apply them consistently;
• make judgements and estimates that are reasonable, relevant
and reliable;
• state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the Financial Statements;
• assess the Company’s and Group’s ability to continue as a going
concern, disclosing, as applicable, matters related to going
concern; and
• use the going concern basis of accounting, unless they either
intend to liquidate the Company and Group or cease operations,
or have no realistic alternative but to do so.
The Directors are responsible for keeping proper accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and to enable them to ensure
that the Financial Statements comply with the Company law. They
are responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error,
and have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the Company
and to prevent and detect fraud and other irregularities.
The Directors who hold office at the date of approval of the
Directors’ Report confirm that, so far as they are aware, there is no
relevant audit information of which the Company’s Auditor is
unaware, and that each Director has taken all the steps they ought
to have taken as a director to make themselves aware of any
relevant audit information and for establishing that the Company’s
Auditor is aware of that information.
Responsibility statement of the Directors in
respect of the Annual Report
Each of the Directors who served during the year, who are listed on
pages 28 – 29, confirms to the best of their knowledge and belief
that:
• the Consolidated Financial Statements, prepared in accordance
with IFRS as issued by the IASB, give a true and fair view of the
assets, liabilities, financial position and profit of the Group; and
• the Annual Report includes a fair review of the development and
performance of the business during the period, and the position
of the Group at the end of the year, together with a description of
the principal risks and uncertainties that the Group faces.
The Directors consider that the Annual Report, comprising the
Financial Statements and the Group Overview, Strategic Overview
and Governance sections, taken as a whole, is fair, balanced and
understandable, and provides the information necessary for
Shareholders to assess the Company’s position and performance,
business model and strategy.
The Directors are also responsible for the maintenance and integrity
of the corporate and financial information included on the Company’s
website (www.taylormaritimeinvestments.com). Legislation in
Guernsey governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Signed on behalf of the Board by:
Frank Dunne
Senior Independent Director
and acting Interim Chair
1
26 July 2023
1
Acting Independent Interim Chair for the period 6 January to 31 May 2023.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Governance
Independent Auditor’s Report to the Members
of Taylor Maritime Investments Limited
Report on the audit of the consolidated
financial statements
Our opinion
In our opinion, the consolidated financial statements give a true and
fair view of the consolidated financial position of Taylor Maritime
Investments Limited (the “company”) and its subsidiaries (together
“the group”) as at 31 March 2023, and of their consolidated financial
performance and their consolidated cash flows for the year then
ended in accordance with International Financial Reporting
Standards and have been properly prepared in accordance with the
requirements of The Companies (Guernsey) Law, 2008.
What we have audited
The group’s consolidated financial statements comprise:
• the consolidated statement of financial position as at 31 March 2023;
• the consolidated statement of comprehensive income for the
year then ended;
• the consolidated statement of changes in shareholders’ equity
for the year then ended;
• the consolidated statement of cash flows for the year then
ended; and
• the notes to the consolidated financial statements, which include
significant accounting policies and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (“ISAs”). Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the
consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Independence
We are independent of the group in accordance with the ethical
requirements that are relevant to our audit of the consolidated
financial statements of the group, as required by the Crown
Dependencies’ Audit Rules and Guidance. We have fulfilled our
other ethical responsibilities in accordance with these requirements.
Our audit approach
Overview
Audit scope
•The Company is a closed-ended investment company, incorporated
in Guernsey, whose ordinary shares are admitted to trading on
the London Stock Exchange’s Main Market. The company is an
investment company led by a Board of Directors and an Executive
Team. The services of the Executive Team are provided pursuant
to an intragroup advisory and services agreement between the
company and a subsidiary;
• The group comprises both consolidated and unconsolidated
subsidiaries. As disclosed under note 2 to the consolidated
financial statements, the company meets the definition of
an ‘investment entity’ in accordance with IFRS 10 ‘Consolidated
Financial Statements’ and therefore, accounts for its subsidiaries,
with the exception of certain subsidiaries that are not themselves
investment entities, at fair value through profit or loss under IFRS
9 ‘Financial Instruments’. The company only consolidates those
subsidiaries that are not themselves investment entities and
whose main purpose is to provide services relating to the
company’s investment activities;
• We conducted our audit of the consolidated financial statements
in Guernsey, based on financial information provided by the
group’s service providers, Sanne Fund Services (Guernsey)
Limited (the “Administrator”) to whom the Board of Directors has
delegated the provision of certain functions and from Taylor
Maritime (HK) Limited (the “Commercial Manager”). The
Commercial Manager is responsible for maintaining the
accounting records for all subsidiaries of the company. We also
had significant interaction with the Executive Team in completing
aspects of our overall audit work;
• We tailored the scope of our audit and structured our audit team
to incorporate support from our PwC valuation experts, taking
into account the nature and industry sector of the assets held
within the investment portfolio; the involvement of third parties
referred to above and the accounting processes and controls.
Key audit matters
• Valuation of financial assets at fair value through profit or loss.
Materiality
• Overall group materiality: US$14.15 million (31 March 2022:
US$14.38 million) based on 2.5% of Net assets;
• Performance materiality: US$10.61 million (31 March 2022:
US$7.19 million).
The scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the consolidated
financial statements. In particular, we considered where the
directors made subjective judgements; for example, in respect of
significant accounting estimates that involved making assumptions
and considering future events that are inherently uncertain. As in all
of our audits, we also addressed the risk of management override
of internal controls, including among other matters, consideration
of whether there was evidence of bias that represented a risk of
material misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in the auditor’s
professional judgement, were of most significance in the audit of
the consolidated financial statements of the current period and
include the most significant assessed risks of material
misstatement (whether or not due to fraud) identified by the auditor,
including those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and directing the
efforts of the engagement team. These matters, and any comments
we make on the results of our procedures thereon, were addressed
in the context of our audit of the consolidated financial statements
as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
This is not a complete list of all risks identified by our audit.
Key audit matterHow our audit addressed the key audit matter
Valuation of financial assets at fair
value through profit or loss
Please refer to notes 2, 3 and 5 to the
consolidated financial statements.
The group’s financial assets at fair
value through profit or loss amounting
to USD556.74 million comprises the
group’s holding in an unconsolidated
subsidiary which further invests into
subsidiaries and ultimately invest into a
portfolio of shipping vessels and equity
securities in a listed shipping company
(“underlying investments”).
The underlying investments are valued
on methodologies considered to be
most appropriate by the Directors,
including fair values derived from
internal assessments prepared by
the Executive Team and fair values
determined by ship brokers or the
valuation expert engaged by the Board.
There is a risk that the fair valuation
of the underlying investments may be
materially misstated as these fair values
rely on the proper determination of an
appropriate valuation methodology,
the use of judgemental inputs as well
as the skills and knowledge of the
Executive Team and valuation experts/
ship brokers engaged by the Board.
The effects of geopolitical uncertainties
surrounding the conflict in Ukraine
and the increasing regulatory focus on
climate change have added uncertainty
that will need to be considered.
There is also an inherent risk that the
Executive Team or the Board may
unduly influence the independent ship
brokers or valuation experts in their
determination of the fair valuation of
these underlying investments.
For the other residual net assets
within the unconsolidated subsidiaries,
there is a risk that the valuation may
be materially misstated arising from
the misstatement of other assets or
liabilities.
This is a main area of focus for
stakeholders and a significant risk, and
accordingly this has been reported as a
key audit matter.
1. We assessed the accounting policy for investments, as set out in note 2 for compliance with
International Financial Reporting Standards (‘IFRS’);
2. We understood and evaluated the group’s controls over the valuation process and the areas
where significant judgements and estimates were made;
3. We attended relevant valuation meetings to understand and observe the company’s process of
challenging and approving the valuations prepared by the Executive Team and those prepared
by the independent valuation experts/ship brokers engaged by the Board;
4. For the valuation of the underlying shipping vessels held by the special purpose vehicles
(“SPVs”), we performed the following procedures:
• Assessed the terms of engagement, independence, objectivity, competence and expertise of
the ship brokers;
• Obtained and read the charter-free valuation reports issued by the ship brokers;
• Obtained and read the final report prepared by the Executive Team and examined the
Executive Team's calculations for the charter lease contract adjustments by comparing the
actual charter rates pertaining to each vessel to market charter rates in order to assess
the magnitude of the potential adjustments to the ship brokers' charter-free valuations.
We have also assessed whether the decision of the group not to adjust for charter leases
was appropriate by obtaining satisfactory explanations when challenging the assumptions
made by the Executive Team and corroborating the information provided against third party
sources where applicable;
• Performed back testing procedures through comparison of disposal proceeds for vessels
sold to the most recent ship valuation per the group’s records;
• Engaged PwC valuation experts, to assess the valuations for a sample of shipping vessels
and evaluate the reasonableness of the ship brokers' fair value;
• Due to the subjectivity involved in determining valuations for individual vessels and the
existence of alternative assumptions and valuation methods, we determined a range of
values from recent market transactions of similar vessels that were considered reasonable to
evaluate the valuations used by the Board; and
• Recalculated the arithmetic mean of the ship brokers’ valuation as per the group’s valuation
policy and tested the mathematical accuracy of the charter value adjustments.
5. For the valuation of the underlying equity securities of a listed shipping company held by an
SPV, we performed the following procedures:
• Assessed the valuation expert’s independence, qualifications, expertise and read their terms
of engagement with the group to determine whether there were any matters that might have
affected their objectivity or may have imposed scope limitations on their work;
• Obtained, read and discussed the report with the valuation expert and understood the
valuation approach taken for determining the fair value of the equity securities of the listed
shipping company;
• Engaged PwC valuation experts to provide audit support in evaluating, challenging and
concluding on the fair valuation of the listed securities. With the assistance of PwC valuation
experts, we have (a) assessed and challenged the appropriateness of the adopted valuation
methodology and cross-check used; and (b) challenged the significant judgements and
inputs used; and
• Tested the mathematical accuracy of the valuation model and corroborated a sample of
significant inputs into the model against third party sources where applicable, our view and
understanding of various economic indicators.
6. For the other residual net assets within the unconsolidated subsidiaries, we have performed the
following:
• Obtained and agreed independent bank and loan confirmations;
• Agreed a sample of material balances of other assets and liabilities to supporting
agreements and/or documentation;
• Performed searches for unrecorded liabilities;
• Obtained confirmations for the group’s ownership of the unconsolidated subsidiaries and
underlying investments; and
• Independently performed a completeness test of the unconsolidated subsidiaries’ general
ledgers and reviewed the aggregation of their trial balances.
Based on the audit work performed, we have nothing to report to those charged with governance.
GovernanceIndependent Auditor’s Report to the Members of Taylor Maritime
Investments Limited continued
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the consolidated
financial statements as a whole, taking into account the structure
of the group, the accounting processes and controls, the industry in
which the group operates, and we considered the risk of climate
change and the potential impact thereof on our audit approach.
We have considered whether the consolidated subsidiaries included
within the group comprise separate components for the purpose of
our audit scope. However, we have taken into account the group’s
financial reporting system and the related controls in place at the
Administrator and at the Commercial Manager and based on our
professional judgement have tailored our audit scope to account for
the group’s consolidated financial statements as a single component.
Scoping was performed at the group level, irrespective of whether
the underlying transactions took place within the company or within
any of the consolidated subsidiaries. Our testing was performed on
a consolidated basis using thresholds which are determined with
reference to the overall group performance materiality and the risks
of material misstatement identified. The group audit was led,
directed and controlled by PricewaterhouseCoopers CI LLP and we
were therefore not required to engage with component auditors.
Materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to
determine the scope of our audit and the nature, timing and extent
of our audit procedures on the individual financial statement line
items and disclosures and in evaluating the effect of misstatements,
both individually and in aggregate on the consolidated financial
statements as a whole.
Based on our professional judgement, we determined materiality
for the consolidated financial statements as a whole as follows:
Overall group
materiality
US$14.15 million (31 March 2022: US$ 14.38
million)
How we determined it2.5% of Net Assets
Rationale for
benchmark applied
We believe that Net Assets is the most
appropriate benchmark because this is the
key metric of interest to the members of
the Company. It is also a generally accepted
measure used for companies in this
industry.
We use performance materiality to reduce to an appropriately low
level the probability that the aggregate of uncorrected and
The Group’s investment objective is to provide investors with an attractive level of regular, stable and growing income and the potential for
capital growth through investing primarily in Geared Bulk Carrier vessels (Handysize and Supramax types), usually employed or to be employed
on fixed period Charters. The capital structure of the Company consists of equity attributable to equity holders, comprising issued share
capital as disclosed in note 12, retained earnings and other reserves.
The Group manages its capital to endeavour to ensure that its primary investment objective is met. It does this by investing available cash in
line with the Group’s investment policy as detailed on page 4.
At 31 March 2023, the TMI Group also have the following credit facilities:
• The Company (as corporate guarantor) and TMI Holdco Limited (as borrower) have a secured senior revolving credit facility for up to
US$160.0 million with Nordea Bank Abp, Filial i Norge as original lender (the “Lenders”), hedge counterparty, mandated lead arranger, and
bookrunner and as facility agent and security agent on behalf of the Lenders, dated 5 May 2021 (the“ Revolving Credit Facility” or “RCF”).
• The Company and TMI Holdco Limited (“Holdco”) (both corporate guarantors) and Good Falkirk (MI) Limited (“Good Falkirk”) (as
borrower) have entered into a Facility Agreement for up to US$208.3 million, relating to the acquisition of shares in Grindrod, with Nordea
Bank Abp, Filial i Norge (the “Bank”) as lender (the “Lender”), mandated lead arranger and bookrunner and as facility agent and security
agent on behalf of the Lenders, dated 11 October 2022. (see note 13 for further details).
10. Related parties and other key contacts
Executive Director and Non-Executive Directors
Total Non-Executive Directors’ fees for the period ended 31 March 2023 amounted to US$476,747 (31 March 2022: US$365,495), with
Non-Executive Directors’ expenses of US$6,332 (31 March 2022: US$5,506). At 31 March 2023, there were US$26,956 outstanding Non-
Executive Directors’ fees payable (31 March 2022: US$nil).
The Intra-group Advisory and Services Agreement
The services of the Executive Team are provided pursuant to an intra group advisory and services agreement between TMIUK and the
Company dated 1 April 2022 (the “Advisory Agreement”). For the prior period, the services of the Executive Team are provided pursuant to
an intra group advisory and services agreement between TMIHK and the company dated 6 May 2021, TMIHK was replaced by TMIUK on
1 April 2022. In accordance with the terms of the Advisory Agreement, TMIUK and TMI Singapore provide certain services to the Company,
including the sourcing of potential investments, the provision of investment recommendations to the Board and assisting with the
implementation of transactions approved by the Board (the “Services”). In consideration for the Services, the Company shall pay, or procure
that TMIUK is paid a fee of costs plus 10%
1
or such other, fees as may be agreed from time to time between the Company and TMIUK.
The Intra-group Advisory and Services Agreement is terminable upon 3 months’ notice by either party and in certain circumstances by
summary termination on notice. The Intra-group Advisory and Services Agreement contains mutual indemnities given by each party for
the benefit of the other.
Alexander Slee, Camilla Pierrepont and Yam Lay Tan (whose roles within the Executive Team are set out on pages 31 – 32) have employment
agreements with TMIUK and TMI Singapore (formerly with TMIHK) respectively, pursuant to which they will devote all of their working time
to the business of the Group. The members of the Executive Team are paid a salary and are entitled to participate in the Group’s annual
bonus plan, the LTIP and the DBP, see below.
Long-term Incentive Plan (“LTIP”)
The Group has an LTIP for certain employees of the Company, or any of its subsidiaries, which is equity settled. Ordinarily, awards will be
granted within six weeks of the Group’s results announcement for any period. The LTIP will include flexibility to grant awards at any other time
(subject to any dealing restrictions) when the Nomination and Remuneration Committee considers there to be exceptional circumstances.
Awards will vest three years from grant based on (i) the extent to which any applicable performance conditions have been met (see below)
and (ii) provided the participant is still employed in the Group.
1
As TMIUK is consolidated into these Financial Statements, as such, the 10% uplift is eliminated on consolidation.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Financial statementsNotes to the consolidated financial statements continued
10. Related parties and other key contacts continued
Awards will be granted subject to a performance conditions.
The fair value of share grants yet to vest is measured based on the grant date fair value over the vesting period. The fair value is recognised
over the expected vesting period. For the awards in 2021 and 2022 the terms and main assumptions, and the resulting fair value, are:
AssumptionsLTIP – August 22LTIP – August 21
Grant dates2 August 202226 August 2021
Share price at date of grantUS$1.46US$1.28
Total Share Awards2,088,9222,295,000
Performance period3 years3 years
Dividend per share overlayUS$0.020 per quarterUS$0.0175 per quarter
Fair valueUS$2,548,485US$2,455,650
Performance conditions 80% - average annual total NAV return
20% - ESG targets
100% - average annual total NAV return
Performance conditions met during the year:
- Average NAV return nil100%
- ESG target16%N/A
Share-based expense for the year -
based on performance conditions achieved
US$91,530US$818,550
For the year ended 31 March 2023, US$910,080 (31 March 2022: US$486,645) was recognised in the Consolidated Statement of
Comprehensive Income with a corresponding increase to “Other reserves” in the Consolidated Statement of Changes in Equity relating to
the fair value share-based awards.
Executive Team and other employee remuneration
Details of the remuneration is given in the nomination and remuneration committee report but the total charge for remuneration for the
year and accrued but unpaid bonus payment are as follows:
Charge for the period
For the year ended
31 March 2023
US$
31 March 2021 to
31 March 2022
US$
Edward Buttery (CEO and Executive Director)
– salary, bonus and other employment costs852,022911,172
Executive Team – salaries and bonuses2,414,3851,894,451
Executive Team – other employment costs399,250228,643
Other Group employees – salaries & other costs1,083,377103,518
Other Group employees – other employment costs182,774-
Total salaries bonus & other employment costs4,931,8083,137,784
Non-Executive Director fees & expenses (detailed above)476,747371,001
Total Director, Executive Team & employment costs5,408,5553,508,785
Share-based payments – equity settled (see “LTIP” above)910,080486,645
Total remuneration and fees6,318,6353,995,430
31 March 2023
US$
31 March 2022
US$
Outstanding fees
Salary, bonuses and other employment costs1,977,5151,701,603
Non-Executive Director fees26,956-
Total2,004,4711,701,603
The Nomination and Remuneration Committee retains flexibility to set different conditions in respect of future financial years if it sees fit.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Financial statementsNotes to the consolidated financial statements continued
10. Related parties and other key contacts continued
Annual Bonus and Deferred Bonus Plans
On 6 June 2023, the following annual bonus plans relating to the period ended 31 March 2023 were approved by the Board, to be paid 50%
in cash and 50% in Ordinary Shares of the Company (31 March 2022: 100% cash bonus), to the following members of the Executive Team:
Executive team 31 March 202331 March 2022
Edward ButteryGBP375,000GBP371,820
Total other Executive Team membersUS$966,000US$1,024,595
The 50% Ordinary Share awards will be granted in the post year end period, will vest in equal instalments over 3 years and, for Edward
Buttery only, the share awards will be subject to a further 2 year hold period.
Shares held by related parties
The shareholdings of the Directors’ and Executive Team in the Company were as follows:
Directors of the Company31 March 202331 March 2022
Name
No. of Ordinary
SharesPercentage
No. of Ordinary
SharesPercentage
Frank Dunne
1
42,4160.01%N/AN/A
Edward Buttery
2
470,3440.12%454,750
3
0.14%
Christopher Buttery 800,7220.24%650,7220.20%
Trudi Clark 70,0000.02%50,0000.02%
Sandra Platts 42,2610.01%42,2610.01%
Helen Tveitan20,0000.01%20,0000.01%
Nicholas Lykiardopulo
4
N/AN/A2,436,087
5
0.74%
Executive team members
Alexander Slee56,8960.02%56,8960.02%
Camilla Pierrepont192,9290.06%172,9410.05%
Other material contracts
Commercial Manager and Technical Manager
Under the Framework Management Agreement dated 6 May 2021 (the “Framework Management Agreement), Taylor Maritime (HK)
Limited (“TMHK”) acts as Commercial Manager and performs related activities, for the Group’s vessels, and Tamar Ship Management
Limited (“Tamar”) acts as Technical Manager for certain of the Group’s vessels. For the duration of the appointment of the managers to
the Group’s vessels, each vessel owning SPV is directed under the Framework Management Agreement to pay to the managers for their
services the remuneration set out in the Commercial Management Agreement or Technical Management Agreement, as the case may be.
The overall charges for the above-mentioned fees by TMHK and Tamar for the Group and the amounts due are as follows:
For the year ended
31 March 2023
US$
31 March 2021 to
31 March 2022
US$
Charge for the year/period
6
Office support fees paid to TMHK188,480276,000
Commercial management fees paid to TMHK5,827,5574,271,725
Technical management and additional services fees paid to Tamar4,271,9302,889,271
Total10,287,9677,436,996
There were no other fees outstanding at 31 March 2023 or 31 March 2022.
31 March 2023
US$
31 March 2022
US$
Outstanding fees
6
Commercial management fees payable to TMHK122,441221,434
Total122,441221,434
1
Appointed 31 October 2022.
2
Also includes 85,344 Ordinary Shares held by a person closely associated to Edward Buttery.
3
Includes an adjustment of -95,482 to account for an over-statement identified during the period to Edward Buttery’s previously disclosed shareholding of 550,232.
4
Resigned 6 January 2023.
5
610,000 Ordinary Shares owned directly, and 1,826,087 Ordinary Shares held by Local Resources Ltd, which forms part of the assets of an irrevocable discretionary
trust of which Nicholas Lykiardopulo is a beneficiary.
6
These charges are expensed and outstanding at the SPV level. These charges are, therefore, only reflected through “Financial assets at fair value through profit or
loss” in these consolidated financial statements.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Financial statementsNotes to the consolidated financial statements continued
10. Related parties and other key contacts continued
Administrator
Sanne Fund Services (Guernsey) Limited (“Sanne” or the “Administrator”) has been appointed as administrator and secretary to the
Company pursuant to the Administration Agreement dated 6 May 2021.
The Administrator will provide day-to-day administration services to the Company and is also responsible for the Company’s general
administrative and secretarial functions such as the calculation of the Net Asset Value and maintenance of the Company’s accounting and
statutory records. The Administrator is not a related party to the Group.
Under the terms of the Administration Agreement, the Administrator is entitled to administration fees charged as a fixed fee of £125,000
per annum for a Net Asset Value up to £200 million plus an incremental fee of 0.03 per cent per annum of Net Asset Value in excess of
£200 million, plus disbursements. This fee is calculated and payable quarterly in arrears.
The overall charge for the above-mentioned fees for the Company and the amounts due are as follows:
Charge for the year/period
1
For the year
ended
31 March 2023
US$
31 March 2021
to
31 March 2022
US$
Administration fees paid to Sanne311,136209,680
Outstanding fees
1
31 March 2023
US$
31 March 2022
US$
Administration fees payable to Sanne62,28663,684
11. Tax status
The Company is exempt from Guernsey income tax and is charged an annual exemption fee of £1,200 under The Income Tax (Exempt
Bodies) (Guernsey) Ordinance 1989. The subsidiaries are subject to taxation in the jurisdiction in which they operate.
For the year
ended
31 March 2023
US$
31 March 2021
to
31 March 2022
US$
Analysis of tax charge in the year/period
Current tax (adjustment)/charge (see note below)(49,602)69,970
Tax on profit on ordinary activities(49,602)69,970
31 March 2023
US$
31 March 2022
US$
Outstanding
Tax payable162,57469,890
1
These charges are expensed and outstanding within the consolidated Group and recognised in the Consolidated Statement of Comprehensive Income and
Consolidated Statement of Financial Position respectively.
Page 80
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Financial statementsNotes to the consolidated financial statements continued
11. Tax status continued
Factors affecting tax charge for the year
TMIUK
The tax assessed on TMIUK for the year to 31 March 2023 (31 March 2022: period 16 April 2021 to 31 March 2022) is the standard rate of
corporation tax in the UK applicable to the period of 19.0%.
For the year
ended
31 March 2023
US$
16 April 2021
to
31 March 2022
US$
Profit on ordinary activities before tax589,320161,018
Profit on ordinary activities multiplied by the rate of Corporation tax in UK applicable to the year of 19.0% 111,97130,593
Adjusted for:
Tax credit for share based payment (US$667,607 at 19%)(126,845)-
Adjustment for prior year over-provision(47,042)-
Tax (adjustment)/charge on ordinary activities, after adjustments, at 19.0% (61,916)30,593
TMI Singapore
The tax assessed on TMI Singapore for the year ended 31 March 2023 (31 March 2022: 20 December 2021 to 31 March 2022) is the
standard rate of corporation tax in Singapore applicable to the period of 17.0%.
For the year
ended
31 March 2023
US$
16 April 2021
to
31 March 2022
US$
Profit on ordinary activities before tax74,07836,851
Profit on ordinary activities multiplied by the rate of Corporation tax in Singapore applicable to the year of
17.0%
12,5936,265
Adjusted for:
Adjustment for prior year over-provision(3,205)-
Tax on ordinary activities, after adjustments, at 17.0% 9,3886,265
TMIHK
The tax assessed on TMIHK for the year ended 31 March 2023 (31 March 2022: period 15 April 2021 to 31 March 2022) is the lower rate
of corporation tax in HK applicable to the period of 8.25% (31 March 2022: Standard rate of 16.5%). TMIHK benefited from the 2-tier tax
rate system implemented by the Hong Kong government, which charges a lower tax rate of 8.25% on the first HKD 2 million of assessable
profits.
For the year
ended
31 March 2023
US$
16 April 2021
to
31 March 2022
US$
Profit on ordinary activities before tax-200,681
Profit on ordinary activities multiplied by the rate of Corporation tax in HK applicable to the year of
8.25/16.5%
-33,112
Adjusted for:
Adjustment for prior period over-provision2,926-
Tax on ordinary activities, after adjustments, at 8.25%/16.5% 2,92633,112
Total tax (adjustment)/charge for the year/period(49,602)69,970
Page 81
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Financial statementsNotes to the consolidated financial statements continued
12. Share capital
The Company’s Ordinary Shares are classified as equity. Incremental costs directly attributable to the issue of shares are recognised as a
deduction in equity and are charged to the share capital account, including the initial set up costs.
The authorised share capital of the Company is represented by an unlimited number of ordinary shares of nil par value and have the
following rights:
(a) Dividends: Shareholders of a particular class or tranche are entitled to receive, and participate in, any dividends or other distributions
relating to the assets attributable to the relevant class or tranche which are resolved to be distributed in respect of any accounting
period or other period, provided that no calls or other sums due by them to the Company are outstanding.
(b) Winding Up: On a winding up, the shareholders of a particular class or tranche shall be entitled to the surplus assets attributable to that
class or tranche remaining after payment of all the creditors of the Company.
(c) Voting: Subject to any rights or restrictions attached to any class or tranche of shares, at a general meeting of the Company, on a show
of hands, every holder of voting shares present in person or by proxy and entitled to vote shall have one vote, and on a poll every holder
of voting shares present in person or by proxy shall have one vote for each share held by him, but this entitlement shall be subject to
the conditions with respect to any special voting powers or restrictions for the time being attached to any class or tranche of shares
which may be subject to special conditions. Refer to the Memorandum and Articles of Incorporation for further details.
(d) Buyback: The Company may acquire its own shares (including any redeemable shares). Any shares so acquired by the Company may
be cancelled or held as treasury shares provided that the number of shares of any class held as treasury shares must not at any time
exceed ten per cent. (or such other percentage as may be prescribed from time to time by the States of Guernsey Committee for
Economic Development) of the total number of issued shares of that class. Any shares acquired in excess of this limit shall be treated
as cancelled.
Issued share capital
Ordinary Shares
31 March 202331 March 2022
Issued and fully paidSharesUS$SharesUS$
Share capital at the beginning of the year/period330,215,878333,479,334--
Ordinary Shares issues during the year/period--330,215,878
1
339,998,484
Ordinary Shares issue costs---(6,519,150)
Share capital at the end of the year/period330,215,878333,479,334330,215,878333,479,334
The total number of Ordinary Shares in issue, as at 31 March 2023 was 330,215,878 (31 March 2022: 330,215,878).
For the period 31 March 2021 to 31 March 2022, the issue of Ordinary Shares was used as part-consideration for certain vessel acquisitions,
as detail further below. The cash and non-cash Ordinary Share issues during the period can be summarised as follows:
31 March 2021
to
31 March 2022
US$
Cash Ordinary Shares issued during the period237,320,000
Non-cash Ordinary Shares issued during the period102,678,484
Total Ordinary Shares issued during the period339,998,484
At 31 March 2023, no (31 March 2022: 2,295,000 Ordinary Shares) additional Ordinary Shares have been reserved for issue in future
periods. At 31 March 2023, the Company’s Ordinary Shares were trading on the Main Market of the LSE at a discount to NAV and, as such,
all share awards under the LTIP and annual bonus scheme are expected to be purchased in the secondary market. At 31 March 2022,
2,295,000 Ordinary Shares were reserved for issue in future periods, see note 10 for details.
1
102,678,485 Ordinary Shares issued as part-finance for vessel acquisitions.
Page 82
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Financial statementsNotes to the consolidated financial statements continued
13. Loan and credit facilities
Revolving Credit Facility (“RCF”)
The Company (as corporate guarantor) and TMI Holdco Limited (“Holdco”) (as borrower) have entered into a secured senior revolving
credit facility for up to US$120 million with Nordea Bank Abp, Filial i Norge (the “Bank”) as original lender (the “Lenders”), hedge counterparty,
mandated lead arranger, and bookrunner and as facility agent and security agent on behalf of the Lenders, dated 5 May 2021, and in
addition, a Supplemental Agreement to document amendments to the Facilities Agreement dated 23 December 2021 with respect to the
upsizing of the Original Credit Loan Facilities to a total maximum commitment of US$160 million (the“ Revolving Credit Facility” or “RCF”).
Under the RCF, Holdco can draw loans in the period of three years from the date of Initial Admission (which may be extended to five years
in certain circumstances). Each tranche of loans drawn down shall be repaid within 18 months of draw-down.
Certain security in relation to the RCF is provided in favour of the Bank (in its capacity as security agent on behalf of the Lender). This security
includes a mortgage over certain vessels within the Group’s portfolio nominated by Holdco (“Collateral Vessels”) and a corporate guarantee
from each SPV owning a Collateral Vessel and from the Company to the Bank (in its capacity as security agent on behalf of the Lender).
At 31 March 2023, US$126.7 million (31 March 2022: US$140.0 million) had been drawn and was outstanding on the RCF.
Under the RCF, Holdco must adhere to the following financial covenants:
• Minimum cash and cash equivalents shall be at least US$5m plus US$250,000 per vessel owned or bareboat chartered by the Group;
• Adjusted Equity Ratio shall at all times be no less than 35% (31 March 2022: 45%) of the sum of the liabilities and “Adjusted Equity ”
1
.
The Holdco is also required to adhere to the following maintenance covenant:
• Aggregate Fair Market Value of all Collateral Vessels shall at all times be no less than 140% of the sum of the then outstanding principal.
During the year ended 31 March 2023, Holdco adhered to all the required financial covenants under the RCF.
Term Loan Facilities (“Term Loan”)
The Company and TMI Holdco Limited (“Holdco”) (as corporate guarantors) and Good Falkirk (MI) Limited (“Good Falkirk”) (as borrower)
have entered into a Facility Agreement for up to US$208.3 million, relating to the acquisition of shares in Grindrod, with Nordea Bank Abp,
Filial i Norge (the “Bank”) as lender (the “Lender”), mandated lead arranger and bookrunner and as facility agent and security agent on
behalf of the Lenders, dated 11 October 2022.
Under the Term Loan, in total Good Falkirk could borrow the lower of US$208.3 million or 55% of the aggregate of the adjusted market
value of the Grindrod Shares owned by Good Falkirk and the market value of the vessels subject to a mortgage under the Term Loan (the
“Term Loan Collateral Vessels”). Repayment of the Term Loan will be made by equal quarterly instalments commencing 9 months after
the initial borrowing date, each in an amount equal to the lower of US$25 million or 15% of the total outstanding Term Loan. The Term Loan
will be repaid in full 18 months after the Term Loan initial borrowing date of 30 November 2022.
Certain security is provided in relation to the Term Loan in favour of the Bank (in its capacity as security agent on behalf of the Lender).
This security includes a mortgage over certain vessels within the Group’s portfolio nominated by Holdco (“Term Loan Collateral Vessels”),
a first priority pledge of all Grindrod Shares owned by Good Falkirk and a corporate guarantee from each SPV owning a Collateral Vessel
and from the Company and Holdco to the Bank (in its capacity as security agent on behalf of the Lender).
On 30 November 2022, US$154.2 million of the Term Loan was drawn. During the period, US$58.7 million has been repaid and, at 31 March
2023, US$95.5 million was outstanding (31 March 2022: US$nil).
Under the Term Loan, Good Falkirk must adhere to the following financial covenants:
a)An Adjusted Equity
2
ratio of:
i. no less than 35% of the sum of the liabilities and Adjusted Equity on and from the Term Loan initial borrowing date until (and
including) the first anniversary date;
ii. no less than 40% of the sum of the liabilities and Adjusted Equity thereafter throughout the remainder of the security period.
b)Minimum Liquidity: Cash and cash equivalents of at least US$5 million plus an additional US$250,000 per vessel owned or bareboat
chartered by the Group.
During the year ended 31 March 2023, Good Falkirk adhered to all the required financial covenants under the Term Loan.
1
“Adjusted Equity”; means the total equity presented in the Group’s most recent consolidated financial statements by adjusting the vessels’ book values to their
current market values obtained through independent and reputable approved brokers. The ratio was adjusted to align with the covenants under the senior secured
credit facility (“Term Loan”), at no less than 35% from 4 January until 30 November 2023 and no less than 40% throughout the remainder of the security period.
2
“Adjusted Equity”; means the total equity presented in the Group’s most recent consolidated financial statements by adjusting the vessels’ book values to their
current market values obtained through independent and reputable approved brokers.
Page 83
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Financial statementsNotes to the consolidated financial statements continued
14. Earnings per share
For the year ended
31 March 2023
BasicDiluted
Weighted average number of shares330,215,878330,215,878
Profit for the periodUS$26,210,533US$26,210,533
Earnings per Ordinary ShareUS$0.0794US$0.0794
31 March 2021 to
31 March 2022
BasicDiluted
Weighted average number of shares314,422,685318,704,634
Profit for the periodUS$252,811,565 US$252,811,565
Earnings per Ordinary ShareUS$0.8041US$0.7932
Basic and diluted earnings per share are arrived at by dividing the profit for the financial year/period by, respectively, the weighted average
number of shares in issue and the weighted average number of shares plus the potential shares in issue. The reconciliation of the weighted
average number of shares used for the purposes of diluted earnings per share to the weighted average number of ordinary shares used in
the calculation of basic earnings per share is as follows:
31 March 2023
Number of
Shares
31 March 2022
Number of
Shares
Weighted average number of shares used in basic earnings per share330,215,878314,422,685
Number of potential shares deemed to be issued-4,281,949
Weighted average number of shares used in diluted earnings per share330,215,878318,704,634
For the year ended 31 March 2023, there is no difference between the basic and diluted earnings per share. The share awards under the
LTIP are not included in the calculation of diluted earnings per share because they are antidilutive for the year ended 31 March 2023. These
share awards could potentially dilute basic earnings per share in the future. At 31 March 2023, the Company’s Ordinary Shares were trading
on the Main Market of the LSE at a discount to NAV and, as such, all share awards under the LTIP and annual bonus scheme granted to
the Executive Team, see Note 10, are expected to be purchased in the secondary market. At 31 March 2022, 2,295,000 Ordinary Shares
were reserved for issue in future periods and the dilution arises from the share awards granted to the Executive Team in accordance with
the LTIP on the assumption that new Ordinary Shares would be issued.
15. Contingent liabilities and commitments
At 31 March 2023, the Company had the following commitments:
• RCF – US$126.7 million (31 March 2022: US$140.0 million drawn) had been drawn and was outstanding on the RCF. The Company acts
as corporate guarantor to Holdco in relation to the RCF, see note 13 for details;
• Term Loan – US$95.5 million (31 March 2022: US$nil) had been drawn and was outstanding on the Term Loan. The Company and TMI
Holdco act as corporate guarantor to Good Falkirk in relation to the Term Loan, see note 13 for details;
• Performance guarantee – the Company entered into a performance guarantee for a total commitment of US$35.0 million for the
underlying SPV which holds the contract for the Vessels under construction.
The Company had no other outstanding commitments or contingent liabilities.
Page 84
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Financial statementsNotes to the consolidated financial statements continued
16. NAV per ordinary share reconciliation
The following table shows a reconciliation between the NAV per Ordinary Share as presented in these Consolidated Financial Statements
and the NAV per Ordinary Share as published on the Main Market of the London Stock Exchange on 27 April 2023.
31 March 202331 March 2022
Published NAV per Ordinary ShareUS$1.7180US$1.7449
Adjusted for:
Movement in net gains on financial assets at fair value through profit or lossUS$(0.0036)-
Executive Team annual bonus plan-US$(0.0028)
Additional tax payable-US$(0.0001)
Financial Statements NAV per Ordinary ShareUS$1.7144US$1.7420
At 31 March 2023, the difference between the unaudited Published NAV per Ordinary Share and the Financial Statements NAV per Ordinary
Share were as a result of fair value adjustment to the Group’s investment in Grindrod following the finalisation of the independent valuation.
At 31 March 2022, the Board approved the annual bonus plan to the Executive Team on 6 May 2022. The annual bonus plan was in relation
to the Group’s performance for the financial period ended 31 March 2022 and as such were accrued in these Consolidated Financial
Statements.
17. Subsequent events
On 27 April 2023, the Company declared an interim dividend of 2.00 US cents per Ordinary Share in respect of the quarter to 31 March
2023, which was paid on 31 May 2023. The ex dividend date was 11 May 2023.
There were no other significant events since the period end which would require revision of the figures or disclosures in the Consolidated
Financial Statements.
Page 85
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Additional information
Assets and Liabilities information (look-through basis) – unaudited 87
Management and Administration 88
Appendix – Alternative performance measures – unaudited 89
Appendix – Definitions and glossary 92
Page 86
I
Taylor Maritime Investments Limited Annual Report and Audited Consolidated Financial Statements
Additional information
Assets and liabilities information
(look-through basis) – unaudited
As at 31 March 2023
Name (SPV)
Investment
in securities/
vessels at
FVTPL
US$
Other net
(liabilities)/
assets
US$
Total
financial
assets at
FVTPL
US$
TMI Holdco Limited
1
-(105,920,185)(105,920,185)
Other net liabilities-(105,920,185)(105,920,185)
Good Falkirk (MI) Limited
2
362,391,478(92,719,653)269,671,825
Investment in securities & other assets362,391,478(92,719,653)269,671,825
Good Grace (MI) Limited29,987,500811,89230,799,392
Good Uxbridge (MI) Limited19,942,500493,67020,436,170
Lucius (MI) Limited19,892,500443,39920,335,899
Forshall (MI) Limited19,882,500504,76120,387,261
Julius (MI) Limited19,862,500912,11520,774,615
Billy (MI) Limited18,132,500413,60318,546,103
Horatio (MI) Limited17,002,500185,69617,188,196
Junius (MI) Limited16,462,500494,55016,957,050
Good Edgehill (MI) Limited16,227,500523,34616,750,846
Good Duke (MI) Limited16,022,500724,24616,746,746
Decius (MI) Limited15,647,500949,09816,596,598
Cassius (MI) Limited15,497,500534,28616,031,786
Good Earl (MI) Limited14,622,500573,31115,195,811
Great Fox (MI) Limited14,537,500690,86515,228,365
Good Queen (MI) Limited14,432,500563,82414,996,324
Gaius (MI) Limited14,397,500450,85714,848,357
Gabinius (MI) Limited14,212,500840,06715,052,567
Good Heir (MI) Limited13,722,500458,07214,180,572
Good Fiefdom (MI) Limited13,692,500(290,374)13,402,126