Annual report and
audited consolidated
financial statements
For the year ended 31 March 2023
Taylor Maritime Investments Limited Annual report and audited consolidated financial statements for the year ended 31 March 2023
Contents
Group overview
Key highlights 1
Financial highlights 2
Summary information 3
Investment policy 4
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 and
emerging risks and uncertainties 23
Going concern and viability statement 25
Governance
Board of Directors 28
Executive team 30
Corporate Governance 31
Report of the Nomination
and Remuneration Committee 35
Report of the Risk and
Audit Committee 41
Report of the ESG and
Engagement Committee 45
Directors’ report 47
Statement of Directors’
responsibilities 49
Independent Auditor’s report 50
Financial statements
Consolidated statement
of comprehensiveincome 56
Consolidated statement
of changes in shareholders’ equity 57
Consolidated statement
of financial position 58
Consolidated statement of cash flows 59
Notes to the consolidated
financial statements 60
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
Taylor Maritime Investments Limited
Group definition
Taylor Maritime Investments Limited (the “Company”) and its subsidiaries as detailed in note 6 make up the group of
companies (the “Group”). For the purposes of the “Group Overview”, “Strategic Review” and “Governance” sections of
these financial statements “TMI” refers to the Company and its 100% owned subsidiaries, excluding the underlying
subsidiaries held by Grindrod Shipping Holdings Limited (“Grindrod”), as detailed in note 6. References to the TMI fleet of
vessels excludes the Grindrod fleet.
A 100% subsidiary of the Company, held via TMI Holdco Limited (“Holdco”), is Good Falkirk (MI) Limited which owns an 83.2%
stake in Grindrod, a dual NASDAQ and Johannesburg Stock Exchange listed shipping business (NASDAQ: GRIN, JSE: GSH).
References to the “Consolidated Group”, throughout these financial statements, consist of the Company and its four
wholly owned subsidiaries called TMI Advisors (UK) Limited (“TMI UK”), TMI Advisor Pte. Limited (“TMI Singapore”), TMI
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$1.714 4
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
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Group overview
Summary information
Principal activity
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 Limited Annual 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
selective growth strategy (through investment, divestment,
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 review Chairman’s statement continued
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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 review Chief 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
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2019 2020 2021
2022 2023 5Y Average
BALTIC HANDYSIZE INDEX (BHSI)
Page 10
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic review Market 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 review Market 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
2017 2018 2019 2020 2021 2022 2023 2024
Deliveries Demolitions YoY %
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
2017 2018 2019 2020 2021 2022 2023 2024
Demolitions YoY %
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.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic review Market 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%
Handysize Supra/Ultramax Panamax Capesize
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
environmental regulations gradually curbing supply growth going
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$11.7
million, generating an IRR of c.63% and MOIC of c.2.0x. As a result,
the fleet currently stands at 47 vessels, excluding chartered-in
vessels without purchase options, consisting of 34 Handysize
vessels and 13 Supramax/Ultramax vessels.
The Group’s Fleet List – delivered vessels as at 31 March 2023
Ship type
Number of
Vessels Average Age DWT
Portfolio Weighting
(dwt)
Portfolio Weighting
(at fair value)
TMI Handysize 23 12 years 772,600 38% 39%
GRIN
1
Handysize 15
2
10 years 497,400 24% 24%
GRIN Supra/Ultra 9
3
6 years 538,300 26% 26%
GRIN Chartered-in 4 5 years 246,000 12% 11%
Total 51 10 years 2,054,300 100% 100%
1
Grindrod Shipping (“GRIN”).
2
Includes three vessels owned under financing arrangement.
3
Includes one vessel owned under financing arrangement.
Page 14
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
FLEET EMPLOYMENT RENEWAL
NET TIME CHARTER RATES PER DAY (US$)
1
39%
17%
26%
9%
9%
less 9k 9k - 12k 12k - 15k
15k - 18k 18k - 21k 21k or more
VESSEL CHARTERERS
1
78%
22%
Charterers with 1 vessel
Charterers > 2 vessels
AVERAGE CHARTER DURATION
1
78%
13%
9%
0-6 months 6-12 months
12-24 months 24 months+
AVERAGE ANNUALIZED UNLEVERED GROSS CASH YIELD (%)
1
9%
4%
13%
43%
30%
40% - 50% 30% - 40% 20% - 30%
10% - 20% <10%
Strategic review Portfolio 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
151.89 129.79
Dividend income 31.56 3.70
Operating expenses
6
(71.54) (44.74)
Gross Operating Profit 111.91 88.75
Finance costs
7
(13.50) (3.66)
(Loss)/gain in capital values
8
(62.31) 174.00
Portfolio profit 36.10 259.09
Group expenses
9
(9.94) (6.21)
Profit for the period (before tax) 26.16 252.88
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 review Financial 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 review Financial 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
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic review Environmental, 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.
FY22 FY23
Y-o-Y
Improvement
Grindrod
Fleet
EEOI 11.96 9.86
18% 9.92
AER 7.23 7.13
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
ports, enhanced around-the clock deck inspections, anti-piracy
equipment, and war risk insurance cover.
4) Community and employee engagement:
Seafarer welfare and mental health
The Group works closely with its technical manager to ensure the
physical and mental wellbeing of seafarers onboard TMI Group
vessels. The Group offers seafarers 24/7 access to a remote/
telephone medical assistance for seafarers at sea, providing
immediate independent and professional medical advice. This
service is widely used across the fleet and is free to all seafarers
onboard Group vessels. The Group has recently completed a
programme of upgrading and enhancing accommodation and
welfare facilities onboard.
With the onset of the conflict in Ukraine, the Group has taken various
measures to support the welfare of both the seafarers and their
families affected by the conflict. Measures include a contribution to
the Seafarers International Relief Fund (“SIRF”), as well as an
organisation working to supply aid to those affected. The SIRF is
currently addressing basic human welfare – shelter, food, water,
transport and access to medical services, along with practical
financial help. Support for seafarers and their families is funded by
the SIRF and delivered by maritime charities, trade unions and other
not for profit organisations working in various countries. The Group
continues to monitor the safety and well-being of the Russian and
Ukrainian crew members on board Group vessels.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic review Environmental, Social and Governance review continued
Cadet training programmes
In collaboration with the Group’s technical manager, the Group has
sponsored trainee cadets onboard the Group’s vessels as part of
their cadet training programmes, giving junior seafarers the
opportunity to gain valuable experience and training onboard.
Throughout the period, 18 cadets joined Group vessels, with more
expected to join in the following year.
Community support
The Group has allocated a budget of $200,000 per annum, dedicated
towards supporting causes that align with the Group’s values and
operations. This includes supporting local welfare initiatives, seafarer
wellbeing and maritime ecosystem conservation.
5) Compliance and conduct:
Environmental regulations compliance
2023 brought a new phase of environmental regulations designed
to deliver the industry’s decarbonisation targets. Together with the
Group’s commercial and technical managers, the Group has
analysed the impact of the new EEXI and CII regulations on the
fleet, shore-side teams and existing internal systems and
processes. The Group has proactively taken the necessary steps to
meet or exceed compliance through a combination of technical
enhancements and operations measures across the fleet. Both the
TMI and Grindrod fleets are on track to be 100% compliant with the
EEXI regulation and aim to achieve at least a “C” average fleet CII
rating by the end of 2023.
The Group has also made the necessary preparations for the
upcoming EU ETS (“European Union Emissions Trading System”), a
regional compliance carbon emissions scheme which will include
the shipping industry as of 1 January 2024. Under the EU ETS,
Group vessels will be liable to surrender allowances in line with
carbon emissions emitted within EU waters.
Sanctions compliance
The Group monitors the sanction regimes enacted by the UK, EU,
US and the UN. Along with the Group’s service providers, strict
policies are maintained and we do not carry out business with
sanctioned parties.
The Group works closely with its Commercial Manager to ensure
that there are robust screening procedures in place with prospective
counterparties and that all charter parties exclude sanctioned
parties.
6) Strong Corporate governance
Robust governance is embedded in the Group’s constitution as a
Guernsey investment company listed on the Premium Segment of
the London Stock Exchange. ESG is integral to the Group’s central
governance framework. The Group’s ESG strategy is steered by the
independent Board ESG & Engagement committee, which meets at
least twice a year.
Further details on the Group’s governance can be found in the
Governance section of this report (pages 31 – 34) and the Group’s
latest ESG report.
Anti-bribery and corruption:
The Group takes a zero-tolerance approach to bribery and corruption,
in adherence to the UK Anti-Bribery Act 2010. A key component of this
approach is the Group’s Commercial Manager’s membership of the
Maritime Anti-Corruption Network, leading industry efforts to enforce
zero tolerance for facilitation payments and corrupt practices. The
network of over 165 shipping companies works collectively towards
ending maritime corruption and fostering fair trade.
Group policies:
The Board has established a comprehensive set of policies
concerning the Company’s governance, to ensure strong corporate
ethics and sensible business values. The Group has a small group of
employees and conducts a substantial part of its business through
key service providers; hence these service providers have been
requested to confirm their own policies and procedures, which are
then crosschecked with the Group’s. Policies include anti-Bribery and
Corruption, code of ethics, modern slavery, whistleblowing, sanctioned
and high-risk jurisdictions, conflict of interest, prevention of tax
evasion, diversity and inclusion and end of vessel recycling policy.
All Group policies have been approved by the Board and are
reviewed on an annual basis to ensure they include any recent
regulatory developments.
Board of Directors
ESG & Engagement
Committee
ESG Steering Group
ESG Taskforce
(Members include
representatives from the
Group Commercial Manager
and Technical Manager)
Industry Associations
Board
Board
sub-committees
Executive Team
Led by DCEO
Management
Quarterly Quarterly Quarterly Quarterly
TMI ESG Governance Structure
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Section 172
Whilst directly applicable to companies incorporated in the UK, the
Board recognises the intention of the AIC Code that matters set out
in section 172 of the Companies Act, 2006 are reported. The Board
strives to understand the views of the Group’s key stakeholders and
to take these into consideration as part of its discussions and
decision-making process.
Whilst the primary duty of the Directors is owed to the Company as
a whole, all Board discussions involve careful consideration of the
longer-term consequences of any decisions and their implications
for stakeholders. Particular consideration is given to the continued
alignment of interests between the activities of the Company and
those that contribute to delivering the Board’s strategy, which
include the Executive Team, Group employees, the Company
Secretary, recipients of the Company’s capital and providers of
long-term debt finance.
The Board’s commitment to maintaining high-standards of
corporate governance; its policy for active shareholder engagement,
combined with the Directors’ duties enshrined in Company law; the
constitutive documents; the Disclosure Guidance and Transparency
Rules; and the Market Abuse Regulation, ensure that Shareholders
are provided with frequent and comprehensive information
concerning the Company and its activities.
Group engagement with stakeholders
The Board of Directors recognise their individual and collective duty
to act in good faith and in a way that is most likely to promote the
success of the Company for the benefit of its members as a whole,
whilst also having regard, amongst other matters, to the Company’s
key stakeholders and the likely consequences of any decisions
taken during the year.
Below we have identified our principal stakeholder groups, how we
engage with these stakeholders, the outcome of these
engagements and how this impacts our Group strategy and
performance, operational matters, financing strategy, dividend
policy and our ESG strategy.
Internal/
External
Stakeholder
Group
Engagement
and key outputs
Engagement
Channel
External
Shareholders/
Investors
The Board and Executive Team hold meetings and regularly engage with our
shareholders and investors on the robustness of our company strategy, our ESG
priorities and our performance.
Our two-way communication with our investors/shareholders means that they are
able to provide useful challenges and feedback, and in turn we provide them with
the information needed to make informed investment decisions.
Maintaining close engagement with our shareholders on Group strategy and ESG
priorities is of paramount importance to us. We take onboard feedback from
our investors regarding performance expectations, dividend policies and ESG
strategies and ensure that these are met as a minimum requirement.
Shareholders also have the opportunity to engage with the Board directly the
Annual General Meeting (“AGM”) each year.
• Annual, Interim &
Quarterly reporting
• Annual General Meetings
(“AGM”)
• Individual investor and
analyst meeting/calls
• Press releases
• Website updates
Service
Providers
We work closely with our service providers, including our commercial and
technical managers, inputting into ESG projects, vessel decarbonisation strategy
and environmental policy compliance and overall smooth operations of the fleet.
Our joint ‘ESG Taskforce’ provides a collaborative touch point for us to work
on these initiatives, driving our collective ESG agenda and implementation and
tracking of KPIs.
For more detail on the activities of the Taskforce, please refer to the
Company’s ESG Report, which can be found on the Company website,
taylormaritimeinvestments.com. The FY23 ESG Report is expected to be
published by October 2023.
• Daily contact regarding
the commercial and
technical management
of Group vessels
• Bi-weekly joint ‘ESG
Taskforce’
Customers Together with our Service Providers we maintain close relationships with our
customers, ensuring our vessels are leading in terms of performance and service.
We seek regular feedback from our customers to ensure we are constantly
improving our customer offer.
• Day-to-day chartering
enquiries and fixing
• Informal meetings
• Customer events
• Service feedback
Strategic review
Stakeholders report
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic review Stakeholders report continued
Internal/
External,
continued
Stakeholder
Group
Engagement
and key outputs
Engagement
Channel
External,
continued
Administrator,
professional
advisors
Close engagement with our administrator and our professional advisors allows us
to keep abreast of regulatory developments and advise on the appropriate way in
which we should respond.
• Ongoing communication
and weekly touch-points
Corporate
Broker, PR
advisor
Our PR advisors and corporate broker provide us with key advice on capital
markets strategy, and investor priorities including around ESG.
• Ongoing communication
and weekly touch-points
Communities The Group and its Service Providers recognise the need to provide positive social
impact to communities and operate in a responsible and ethical way.
We continually look for organisations to support and local initiatives which align
with our values.
• Active participation in
seafarer communities
through training
programmes
• Supporting charitable
initiatives that align with
our values
Regulators and
authorities
The Group and its Service Providers contribute to the wider shipping community
and play a role in the international dialogue with legislators and other industry
bodies.
We ensure the Group is compliant with all existing regulations, and engage with
professional advisers with regards to any future regulations impacting the Group.
• Formal meetings
Industry
Associations
and bodies
The Group and its Service Providers actively participate in several industry
associations bodies, spanning seafarer welfare efforts, decarbonisation
alignment and general shipping forums.
• Industry coalitions
• I ndustry association
membership
Internal
Board of
Directors
Our Board is ultimately responsible for setting the strategic direction of the Group
and monitoring performance.
The Nomination and Remuneration Committee has responsibility to assist with
the composition of the Board, performance of Board members, induction of new
directors, appointment of committee members and succession planning for the
directors and other senior executives.
• Quarterly Board meeting
• Quarterly Board
committee meetings
TMI Employees The Executive Team and their support teams are key to our success and we want
them to succeed both as individuals and as a team.
The Executive Team strive to maintain a fair and equal workplace, as well as
providing the opportunity for employees to grow and develop.
The Executive Team maintain an open-door policy with all employees.
• Town hall meetings
• Daily interactions
between colleagues and
management
• Training programs
• Open-door policy
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic review
Statement of principal and emerging
risks and uncertainties
Principal risks
The key risks which the Board considers have been faced by the Group during the financial period are detailed in the table below.
Risk/description Control / Mitigation
Market Risk – Stable
Downturn in global demand for shipping – the demand for shipping
may decline either because of a reduction in international trade or
decline in world GDP having an impact on the achievable charter rates
and the resale value of vessels.
Impacts our Acquisition and Income Strategy
Diversification of fleet and Charter lengths and Charterer quality –
This risk cannot be mitigated but the impact can be reduced by
diversification of the age and type of vessels in the fleet; and by good
research into market and technical developments within shipping to
anticipate future demand and supply. In addition, controls are in place
to ensure careful management of charter income by both quality of
charterer and also by duration of fixed term charters.
Market, ESG and Governance Risk – Stable
Change in regulation as the shipping industry moves to reduce
GHG emissions – with increasing momentum towards zero carbon
shipping through rules and market-based measures, some of the fleet
may be rendered less competitive or obsolete over time.
Impacts our Acquisition Strategy and Sustainability Strategy
Reduction of existing fleet emissions and research into new low
emissions technology – In the medium term this risk is mitigated
through acquisition of relatively fuel-efficient vessels and the identification
and sale of older, less fuel-efficient, vessels in the fleet. A key mitigation
over the last 12 months has been the acquisition of the controlling interest
in Grindrod which has a younger more fuel-efficient fleet. In addition,
TMI works with the commercial and technical managers to reduce the
GHG intensity of existing fleet via technical and operational measures.
Implementation of regulation and market-based measures may be
phased in over several years, providing an opportunity to manage the
impact gradually by spread of scheduling of dry dockings to enable
controlled upgrades. The Group is heavily engaged within the industry
in order to maximise visibility on the regulatory pathway, and in cross
industry efforts to develop low/zero carbon ship solutions.
Market Risk – Increased
The Company’s Ordinary Shares trade on the LSE at a discount
to NAV – if the Company’s Ordinary Shares trade at a persistent
discount this may lead to the Company not being attractive to
investors and also leave the Company exposed to a hostile takeover
bid and unable to raise funds.
Impacts our Acquisition and Income Strategy
Active share buyback policy and good investor relations – Persistent
discounts often arise because the investment objective is not clearly
understood by the market or the investor profile is too concentrated
towards large institutional investors, resulting in thin trading volume.
The Board has been building a strong investor relations team and PR
presence to raise TMI’s profile with retail investors and build better
understanding amongst potential investors of the future opportunities
for a shipping fund.
The Board discusses at each Board meeting the level of discount at
which TMI’s shares trade and whether a buying back of its own shares
would be a good use of available cash as opposed to investing in new
ships, reducing gearing or returning capital via dividends to all shareholders.
Risks and uncertainties
The Board is responsible for and has in place a rigorous risk
management framework and risk matrix to identify, assess, mitigate,
manage and review and monitor those risks. This is all reviewed at
least twice a year by the Board, in conjunction with the Risk and Audit
Committee, and on a much more frequent basis by the Executive Team.
The Board has categorised the risks the Group faces into four
broad areas Market Risks, Operational Risks, ESG Risks as well as
Financial Risks, and have carried out a robust assessment of each
risk area and its potential impact on the performance of the Group
including risks that would threaten its business model, future
performance, solvency and liquidity.
The Board pays regard to any emerging risks. The Board is
constantly alert to the identification of any emerging risks, in
discussion with the Executive Team. The Board will then assess the
likelihood and impact of any such emerging risks, and will discuss
and agree appropriate strategies to mitigate and/or manage the
identified risks. Emerging risks are managed through discussion of
their likelihood and impact at Board meetings at least twice a year.
Should an emerging risk be determined to have any potential impact
on the Group, appropriate mitigating measures and controls are agreed.
The Board considers the main emerging risk facing the Group is:
• ongoing market and economic risks arising from global market
instability and high inflation which directly affect shipping and
the global economy.
In respect of the Group’s system of internal controls and reviewing
its effectiveness, the Directors:
• are satisfied that they have carried out a robust assessment of
the emerging and principal Risks facing the Company and the
Group, including those that would threaten its business model,
future performance, solvency or liquidity; and
• have reviewed the effectiveness of the risk management and
internal control systems including material financial, operational
and compliance controls (including those relating to the financial
reporting process) and no significant failings or weaknesses
were identified.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic review Statement of principal and emerging risks and uncertainties continued
Risk/description, continued Control / Mitigation, continued
Operational Risk – Stable
The threat of cyber risk is increasing globally and the Group, with
its outsourced model, is heavily dependent on third party providers
Impacts operational strategy
Reliance on third party service providers – A successful cyber-attack
on the Group or a key third party service provider would materially
interrupt the Group’s business operations and potentially carry
financial consequences. The ESG and Engagement Committee, as
part of its annual review, will request information about what security
arrangements are in place and will assess their adequacy.
In addition, the Group has engaged a third party service provider to
implement a comprehensive cyber security program that includes regular
vulnerability assessments, system monitoring, and employee training.
Market and Liquidity Risk – Increased
Instability of global monetary policy which may lead to high interest
rates and turbulent foreign exchange rates – Changes in global
monetary policy leading to fluctuating foreign exchange rates, high
interest rates which may seriously depress profitability and increase
the potential default rate of charterers.
Further the impact of increasing interest rates impacts the cost of
gearing for the Company which impacts on the Company’s liquidity
profile.
Charter policy and prudent cash management – The Group
minimises its exposure to currency by predominantly operating in
USD. It undertakes credit checks on charterers and sets limits on
exposure to any one charterer basis a periodic internal credit review.
The Company has access to a revolving credit facility secured
against ships, however, it is only used mainly to bridge single vessel
acquisition financing and working capital needs in the short term.
Longer term structural gearing is not within investment policy. For the
acquisition of Grindrod, the Group took up new credit facility with the
intention of deleveraging in the short-term through vessel sales and
available surplus cashflows.
The Company maintains cash buffer reserves in case of downturns in
the market.
ESG Risk - Stable
Pollution Damage – The Group may be exposed to substantial
risks of loss, including financial loss and reputational damage,
from a vessel owned by the Group being involved in an incident of
environmental damage, contamination or pollution.
Impacts our Income and Sustainability Strategy
Pollution Damage mitigation measures – The Company has
established an ESG and Engagement Committee to oversee ESG
matters including the performance of our vessels’ commercial and
technical management, to mitigate the risk of non-compliance with
regulations leading to a breach of environmental regulations.
All of the Group’s vessels comply with regulations set out by the
International Maritime Organisation and coastal states.
The Group ensures that a proactive safety culture is promoted by the
technical managers, reducing the risk of accidents and pollution. In the
event that pollution does occur, vessels are adequately insured through
Protection and Indemnity mutual clubs for environmental loss.
Financial Risk - Increased
Liquidity Risk – The income of the Group is subject to variation and a
significant downturn in the charter spot rate could mean a significant
shortfall in cash and also cash reserves may become constrained if
Grindrod and other SPVs are unable to pay regular dividends up to
through the Group.
Impacts our Income Strategy
Liquidity requirement modelling – The Group models under various
stress tests the future liquidity depending on various market charter
rates and dividend levels from Grindrod. The Group also ensures it
keeps appropriate cash buffers. In addition, the Group has a secured
Revolving Credit Facility to meet any temporary cash flow shortfalls.
Operational Risk - Stable
Integration of Grindrod – The Company has a detailed plan to
integrate the fleet and operations of Grindrod into the wider Group.
The Company plans may be subject to delays because of unexpected
legal or regulatory hurdles which may result in not all cost savings
and planned efficiencies being realized on a timely basis.
Impacts our income and capital strategy
The Company has developed detailed plans covering all aspects of
the integration which are reviewed by the Board at the quarterly
meetings and are also developed in co-operation with the independent
board of Grindrod. Additionally, Edward Buttery has been appointed
joint CEO of both Grindrod and TMI to oversee the integration. At all
stages external advisors and consultants have been appointed to
ensure that all potential issues are recognised and dealt with.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic review
Going concern and viability statement
Going Concern
The Group has considerable financial resources, and after making
enquiries, the Directors, at the time of approving the Consolidated
Financial Statements, have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for a period of at least 12 months from the date of approval of
these Consolidated Financial Statements.
The Group maintains a portfolio of vessels which are expected to
generate enough cash flows to pay on-going expenses and returns
to Shareholders. As part of their consideration of the appropriateness
of adopting the going concern basis, the Directors have considered
the cash position, the performance of the portfolio and they have
carried out a robust assessment of the Group’s solvency and liquidity
position using a scenario analysis on possible outcomes.
The Board also consider factors that may impact future
performance, including the potential impact on markets and supply
chains of geo-political risks such as the current crisis in Ukraine,
continuing macro-economic factors and possible rising rates of
inflation in the forthcoming year. The Board will continue to monitor
these events, however, at this stage they are not expected to have
a detrimental impact the performance of the Group. See the
“Market review” section on pages 10 – 13 for further details.
Following the assessments and considerations detailed above, the
Board have concluded that it is appropriate to adopt the going
concern basis in the preparation of these Consolidated Financial
Statements, as the Group has adequate financial resources to
meet its liabilities as they fall due for at least the 12-month period
from the date of the approval of the Consolidated Financial
Statements.
Viability Statement
The Board has evaluated the long-term prospects of the Group,
beyond the 12-month time horizon assumption within the going
concern framework.
Our review is conducted over a three-year period ending on 31
March 2026, which aligns with the nature of the shipping industry
and our Group’s operational cycle. The Group’s business model is
anchored on global shipping and logistics, an industry that can be
affected by global economic shifts and geopolitical uncertainties.
Yet, considering the Group’s robust financial status as of 31 March
2023, alongside a thorough review of stress case scenarios, we
have a reasonable expectation that the company will continue to
operate and meet its liabilities.
The Directors have selected a three-year window for evaluating the
potential impact to the Group on the following basis:
1. A key risk facing the Group is a downturn in the global demand
for shipping, this in turn will be driven by global macro-economic
factors which are difficult to model beyond the medium term.
Changes in the economic landscape would impact the value of
the fleet as well as the likely charter income.
2. Changes in regulation to meet the demands of climate change
are evolving rapidly, making longer term predictions difficult.
3. TMI’s current debt facilities, see note 13 for further details, are
set to mature in May 2024, as per the facility terms, with extension
options on the RCF of up to two, one year extensions till May
2026. We expect a debt restructuring will conclude shortly that
will combine the current facilities into a single Revolving Credit
Facility (RCF) with a 42-month maturity.
4. The Group’s charter contracts usually span less than three years.
5. Integration of Grindrod is a crucial process an orderly plan to
optimise synergies in Grindrod's fleet and operations with the
wider Group. While we may encounter unexpected legal or
regulatory obstacles leading to delays, the realization of cost
savings and efficiency improvements is expected within the
three-year period.
On a quarterly basis the Board routinely reviews the future financial
model of the Group for 36 months including daily cash breakeven,
liquidity and debt positions under both a base and a stress case
scenario. The results of which are to establish any obvious stress
points on the key metrics of cash breakeven, liquidity and debt.
The key variable in these models is charter rates. The daily charter
rate is set based on the current average for a TMI Handysize vessel
of c.US$11,000 per day, which is based on the charters fixed for the
period April to June 2023. In a stress case scenario, this average
charter rate experiences a significant decrease of c.30%, translating
into a decline from the current rate to c.US$8,000. This depressed
rate is assumed to continue for one year before returning to the
current rate of c.US$11,000 for financial years 2025 and 2026. The
reduction is deemed reasonable based on Clarksons recent
historical data from periods of extreme stress for TMI’s segment of
the shipping industry, noting that these periods have historically
endured for shorter periods than the time modelled. The same
percentage reduction from the base rate is assumed for both
Handysize and Supramax vessels. It is also assumed that income
is impacted by increased commercial off-hire days in the stress
scenario which are assumed to be double when compared to the
base case.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Strategic review Going concern and viability statement continued
Changes in fleet value are assumed to follow from impacted
charter rates and also play a critical role in these models. In the
stress case scenario, the decrease in the market value of the
vessels is expected to align to the fall in charter rates of c.30%.
After this decrease, the market value is projected to remain steady
in line with depreciation over the subsequent three years.
In terms of vessel sales, the existing policy to sell older ships
continues, with a select number of vessels from the fleet marked
for sale in the initial year in order to generate sale proceeds to
continue deleveraging and achieve other strategic targets. In the
stress case scenario, where charter rates are depressed for one
year before reverting to current levels for the next two years, it is
assumed that more vessel sales are executed within the three-year
period, with the average selling price reduced in line with charter
rate and fleet value reductions.
Inflation rate assumptions are also incorporated, with both the
operating expenditure and selling, general, and administrative
expenditure (SGA) considered and, for the stress case scenario, are
assumed to maintain an annual inflation rate rise of 5%. The
financial models also include the TMI and Grindrod fleet integration
which is underway, and which is projected to result in considerable
annual cost savings. For modelling purposes, it is assumed that the
process of fully integrating Grindrod will be accomplished by the
close of 2024.
The assumptions explained above consider a stressed case
scenario in which the market is poor over the next three years:
depressed for a full year before recovering to current levels which
are below historical averages. It is assumed that interest rates
remain high in an ongoing elevated inflationary environment. Under
these stressed conditions, the Group has a credible strategy.
Through the integration of TMI and Grindrod fleets, strategic fleet
management, restructured loan facilities, and targeted vessel
sales, the Group can navigate a period of greater volatility in the
shipping market.
Finally, the Group continually reviews its cash reserving policy in
respect of dry-docking costs and replacement reserves and ring
fences such reserves to ensure that it maintains adequate cash
levels to maintain the future operations of the Group. The shifting
focus towards lowering emissions and improving the efficiency of
existing vessels requires increased capex investment in retrofitting
the fleet with new technology. These additional costs have been
factored into the Group's dry-docking costs and vessel budgets.
The Group’s ships are readily realisable in the market and the
Directors believe the Group would be able to sell ships from the
fleet to repay the loan facility if required. In addition, to breach Loan
to Value (“LTV”) covenants of the current facility would require a
substantial fall of greater than 44% in the market value of the ships
in the collateral pool.
Based on the assessments made and in the context of the Group’s
business model, strategy and operational arrangements set out
above, the Directors have a reasonable expectation that the Group
will be able to continue in operations and meet its liabilities as they
fall due over the three years to March 2026. For this reason, the
Board also considers it is appropriate to continue adopting the
going concern basis in preparing the Annual Report and
Consolidated Financial Statements as disclosed in the Directors
Report.
The Strategic Review taken as a whole was approved by the Board
of Directors on 26 July 2023:
Frank Dunne
Senior Independent Director
and acting Interim Chair
1
1
Acting Independent Interim Chair for the period 6 January 2023 to 31 May 2023.
Page 26
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Governance
Board of Directors 28
Executive team 30
Corporate Governance 31
Report of the Nomination and Remuneration Committee 35
Report of the Risk and Audit Committee 41
Report of the ESG and Engagement Committee 45
Directors’ report 47
Statement of Directors’ responsibilities 49
Independent Auditor’s report 50
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Governance
Board of Directors
Henry Strutt, Independent Chair
– appointed 1 June 2023
Henry Strutt has extensive experience in the investment banking,
fund management and financial advisory sectors. After qualifying
as a Chartered Accountant, he spent over twenty years with the
Robert Fleming Group, working in the fund management, corporate
finance and broking divisions. He spent seventeen years in the Far
East, in Hong Kong and Tokyo, working for Jardine Fleming, the
Robert Fleming Group’s Asian/Australasian joint venture with
Jardine Matheson. He became Executive Chairman of the Jardine
Fleming Group in 1996, subsequently returning to London where he
was appointed joint Chief Executive of the Robert Fleming Group’s
Investment Banking Division, responsible for global broking,
securities trading, capital markets, corporate finance and banking.
Following the sale of the Robert Fleming group to Chase Manhattan,
he worked in an executive and non-executive capacity in various
fund management and financial advisory businesses. He was a
non-executive Director of Smith & Williamson Holdings (now Evelyn
Partners), for over ten years and a non- executive Director of
Harrods Bank (now Tandem Bank) for two years. He is currently
Chairman of Edinburgh Worldwide Investment Trust plc, a listed
investment trust, and a non-executive Director of New Waves
Solutions, part of the Belgian DEME group (dredging and offshore
marine services). He was appointed a Deputy Lieutenant of Suffolk
in 2012.
Other listed Directorships: Chairman of Edinburgh Worldwide
Investment Trust plc.
Frank Dunne, Senior Independent Director
– appointed 31 October 2022. Served as Interim Chair for the
period 6 January 2023 to 1 June 2023.
Frank Dunne has over 40 years’ legal experience, specialising in
maritime law and transactions involving major international
shipping finance lenders, commercial shipping transactions for
major international shipowners, joint ventures, charter structures,
new building contracts, and ship (and corporate) acquisitions. Mr
Dunne was a Partner of Watson Farley & Williams from 1982 and
served as Chairman from 2004 to 2017 during a major period of
global expansion for the firm. He established Watson Farley &
Williams presence in Greece and remains a prominent figure in
Greek shipping and finance circles. In 2011 he was named
“Maritime Lawyer of the Year” by leading sector publication Lloyd’s
List, and has been described by Chambers UK as providing “great
support in dealing with syndicates of banks” and “…good at advising
on complex issues with high interests at stake and is highly
respected.” He is a qualified solicitor and holds an MA from
Cambridge University.
Other listed Directorships: None.
Edward Buttery, Chief Executive Officer
Edward Buttery joined the Supramax trading desk at Clarksons
shipbrokers in 2005 after attending Oxford University. He went on
to be a chartering manager at Pacific Basin between 2006 and
2008. He served as the Deputy COO of dry bulk shipping operator
Asia Maritime Pacific from 2008 to 2010. During this time he sat
the Institute of Chartered Ship broker’s examinations for which he
was awarded prizes including the President’s prize for best overall
results globally. Having gained a foundation in chartering he
embarked on a Masters degree in Shipping, Trade and Finance at
CASS Business school in London where he graduated with Merit.
From there he joined the shipping team at Nordea Bank, lending
senior debt to global shipping companies with a presence in Asia.
He left Nordea to begin the work to set up what would become
Taylor Maritime. Mr Buttery was winner of the Seatrade Asia Young
Person of the Year award in 2017.
Other listed Directorships: Mr Buttery was appointed Chief
Executive Officer and Executive Director of Grindrod with effect
from 1 April 2023.
Christopher Buttery, Non-Executive Director
Christopher Buttery has over 40 years of experience in the shipping
industry. He graduated from University College, Oxford, with a
honours degree in Modern History and began his shipping career
with Jardine, Matheson & Company Limited followed by Continental
Grain. Chris later co-founded the original Pacific Basin business in
1987 with Belgian Shipping Partners which he listed on NASDAQ in
1994, and he re-established the current Pacific Basin in 1998 with
Paul Over, which Goldman Sachs listed on the HKSE in 2004. He
held various Executive positions at Pacific Basin including CEO,
Deputy Chairman and Chairman until June 2007.
Mr Buttery has been Non-Executive Director of Fleming Japanese
Smaller Companies Ltd, Ton Poh Emerging Companies Thailand,
Senhouse Asia (now Waverton Asset Management) and firstly
Chairman and then Non-Executive Director of Epic Gas Pte; also
Non-Executive Director of The China Navigation Company and
Swire Bulk Shipping Pte. He is currently Chairman of Taylor
Maritime Company, and a Director of the Hong Kong Maritime
Museum. He was a Trustee of the Hong Kong WWF for ten years.
Other listed Directorships: None.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Governance
Governance Board of Directors continued
Trudi Clark, Independent Non-Executive
Director
Trudi Clark graduated in Business Studies and qualified as a
Chartered Accountant with Robson Rhodes in Birmingham before
moving to Guernsey with KPMG in 1987. After 10 years in public
practice, she was recruited by the Bank of Bermuda as Head of
European Internal Audit, later moving into corporate banking. In
1995 she joined Schroders in the Channel Islands as CFO. She was
promoted in 2000 to Banking Director and Managing Director in
2003. From 2006 to 2009, Ms Clark established a family office,
specialising in alternative investments. In recent years she returned
to public practice specialising in corporate restructuring services,
establishing the Guernsey practice of David Rubin & Partners
Limited. Since 2018 Ms Clark has concentrated on a portfolio of
Non-Executive Director appointments for companies both listed
and non-listed investing in property, private equity and other assets.
Other Listed Directorships: Balanced Commercial Property Trust
Ltd (retired on 31 May 2023), The Schiehallion Fund Limited and NB
Private Equity Partners Limited.
Sandra Platts, Independent Non-Executive
Director
Sandra Platts is a resident of Guernsey and holds a Master’s in
Business Administration. Mrs. Platts joined Kleinwort Benson (CI)
Ltd in 1986 and was appointed to the board in 1992. She undertook
the role of Chief Operating Officer for the Channel Islands business
and in 2000 for the Kleinwort Benson Private Bank Group – UK and
Channel Islands. In January 2007, she was appointed to the
position of Managing Director of the Guernsey Branch of Kleinwort
Benson and was responsible for a strategic change programme as
part of her role as Group Chief Operating Officer. Mrs. Platts also
held directorships on the strategic holding board of the KB Group,
as well as sitting on the Bank, Trust Company and Operational
Boards. She resigned from these boards in 2010.
Other Listed Directorships: Mrs Platts is a Senior Independent
Non-Executive Director at Sequoia Economic Infrastructure Fund,
Investec Bank (Channel Islands) Limited and Marble Point Loan
Financing Limited.
Helen Tveitan, Independent Non-Executive
Director
Helen Tveitan is Chairman and Chief Executive Officer of
Carisbrooke Shipping Holdings Ltd, a specialist owner / operator of
mini bulk and project cargo ships controlling a fleet of 30 ships.
From 2007 and prior to her CEO appointment, she served as Non-
Executive Director for the company. Ms Tveitan has worked in the
shipping industry since 1992 and started her career in ship finance
with DVB Nedship Bank for whom she started the branch office in
London in 1996. From 2001 onwards, she has held several positions
as Finance Director for shipping companies, most notably for
Eastern Bulk between 2010 and 2017. Helen has served as Non-
Executive Director for Ardmore Shipping Corporation, a tanker
owner listed on NYSE, since 2018. She is an economist, having
graduated from Rotterdam’s Erasmus University in 1992.
Other Listed Directorships: Ardmore Shipping Corporation.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Governance
Executive team
The Executive Team are responsible for the identification of
appropriate acquisition opportunities, conducting necessary due
diligence and making recommendations to the Board. The
Executive Team will also monitor the performance of the Group’s
portfolio and, in liaison with the Group’s service providers, handle
investor relations, reporting, risk management and monitoring of the
external commercial and technical managers of the Group’s vessels.
The Executive Team are as follows:
Alexander Slee, Deputy Chief Executive Officer
Alexander Slee has spent the last 15 years in the shipping industry.
After starting his career in the investment banking division of
Citigroup in London, he joined Pacific Basin Shipping in Hong Kong
in 2006 where he worked in a variety of corporate and divisional
management roles. From 2010 he was General Manager of Vanship
Holdings, a privately owned tanker and bulker ship owning
company, and Group Strategy Director at Univan Ship Management,
where he was closely involved in its merger with Anglo-Eastern
Ship Management. He joined Taylor Maritime in 2016 where he has
held the role of Deputy CEO. Mr. Slee holds a BA in Classics from
Oxford University and has attended a management programme at
INSEAD. He has served as a member of the Executive Committee
of the Hong Kong Shipowners Association.
Camilla Pierrepont, Head of Investor Relations
Camilla Pierrepont joined Taylor Maritime in 2018 as Group
Strategy Director. Ms. Pierrepont has held various strategy and
investment roles over the last 16+ years. Prior to joining the Taylor
Maritime Group, Ms. Pierrepont spent 2 years as Portfolio Manager
at Blenheim Chalcot (London), a venture capital firm. Previously,
she spent 4 years with shipping company, Epic Gas Pte (London &
Singapore) as Head of Strategic Development. Prior to Epic, Ms.
Pierrepont was a Senior Strategy Manager in the Strategy and
Corporate Development Team at Microsoft (Seattle) for 3 years. She
started her career as an analyst at Monitor Deloitte (London) after
gaining a BA in Chinese Studies from Oxford University in 2004. She
was also Founding Trustee of Spark + Mettle from 2011 to 2015, a
UK charity supporting young people in the pursuit of their life goals.
Yam Lay Tan, Chief Financial Officer
Yam Lay Tan graduated with an Accountancy degree from Nanyang
Technological University of Singapore (NTU) in 1993. She has been
a member of the Institute of Singapore Chartered Accountants
since 1994 and is a Chartered Accountant. Prior to joining Taylor
Maritime Group in 2019, Ms. Tan was a General Manager, Finance
of Epic Gas Ltd. for 6 years. Within the Epic Group she served as the
director and company secretary of more than 40 companies. Prior
to Epic, Ms. Tan held senior finance positions in security, IT,
semiconductor and service companies.
Carl Ackerley, Chief Operating Officer
Carl Ackerley has over 30 years’ experience in the shipping industry
having become a member of the Baltic Exchange as a shipbroker in
1989. From 1989 – 2001 Carl worked as a broker in London,
Johannesburg and Melbourne before moving on to the principal
side. From 2001 to 2006, he worked with Furness Withy Australia
(FWA) before joining Pacific Basin where he worked from 2006-
2010. While at Pacific Basin, Carl headed the group’s Atlantic desk of
the new Supramax division, based in London, before transferring to
Melbourne to become General Manager of Pacific Basin Australia.
In 2010, Carl joined Island View Shipping (IVS), a division of
Grindrod Shipping Pte Ltd, where he established the Supramax
division and developed the commercial management of the IVS
Handysize fleet and third-party vessels. Carl was appointed Chief
Operating Officer for Grindrod in March 2021 and Chief Operating
Officer of Taylor Maritime Investments with effect from 1 July 2023.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Compliance
The Board places a high degree of importance on ensuring that
high standards of corporate governance are maintained and has
considered the principles and provisions of the AIC Code of
Corporate Governance issued in February 2019 (the “AIC Code”),
effective for financial periods beginning on or after 1 January 2019.
The AIC Code addresses the Principles and Provisions set out in
the UK Corporate Governance Code (the “UK Code”) in addition to
setting out additional Principles and Provisions on issues that are
of specific relevance to the Company. The Board considers that
reporting against the Principles and Provisions of the AIC Code ,
which has been endorsed by the Financial Reporting Council and
the Guernsey Financial Services Commission, will provide more
relevant information to shareholders.
The Board has also taken note of the Finance Sector Code of
Corporate Governance issued by the Guernsey Financial Services
Commission (the “Guernsey Code”). The Guernsey Code provides a
governance framework for GFSC licensed entities, authorised and
registered collective investment schemes. Companies reporting
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
Governance Corporate 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 – scheduled 4 1 4 4 4 4 4 3
Risk and Audit Committee 6 N/A N/A 5 6 N/A 6 N/A
Nomination and Remuneration Committee 8 1 N/A 7 8 N/A 8 7
ESG and Engagement Committee 4 1 N/A 4 4 N/A 4 3
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
Governance Corporate 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
Governance Corporate 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
Governance Report 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
Men 3 50% 2 1 33%
Women 3 50% 3 2 67%
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) 5 83% 1 33%
Asian/Asian British 1 17% 1 33%
Mixed/Multiple Ethnic Groups - - 1 33%
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.
Page 36
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Governance Report 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.
Page 37
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Governance Report 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.
Executive Director’s Remuneration Policy Table – 2023/24
Base Salary
Purpose A base salary to attract and retain Executive Director with skills, experience and qualifications needed to manage and
grow the business successfully.
Operation The base salary is reviewed annually with changes effective 1 April. When setting base salaries the Committee will
consider relevant market data, as well as the scope of the role and the individual’s skill and experience.
Maximum No absolute maximum has been set for the Executive Director’s base salary.
Any increase is approved by the Nomination and Remuneration committee based on changes in the scale of the role
and also market salary information.
Grindrod Renumeration The Executive Director is paid to undertake the joint CEO role a base salary of GBP350,000. He receives no other
additional incentives or awards from Grindrod.
Pension
Purpose Required in industry standards and legislation.
Operation Until such time as the Group establishes its own pension plan a cash element of the salary is paid to the employee in
lieu of pension contributions.
Maximum A rate of 10% of base salary is paid to all employees including the Executive Director.
Annual Bonus and Deferred Bonus Plans
Purpose A short-term incentive to reward the Executive Director on meeting the Group’s annual financial and strategic targets
and on their own personal performance.
Operation The Committee may determine that up to 50% of the annual bonus will be paid in Company shares. Bonus allocated
in the form of shares will be deferred for three years with the shares vesting in three equal instalments at the
anniversary of the award, followed by a two year hold period.
Maximum The maximum permitted under the rules will be 100% of base salary.
Performance
Measures
That annual bonus is based on a range of financial, strategic, ESG operational and individual targets. The specific
targets and weightings will be determined each year by the Committee.
Clawback Clawback provisions may be applied in the event of a material misstatement or an error in assessing a performance
condition or material misconduct on behalf of the award holder.
Long-term incentive plan
Purpose A long-term incentive plan to align the Executive Director’s performance with those of shareholders and to promote
the long-term sustainable of the Company.
Operation Awards are granted annually usually in the form of a conditional share award or nil cost option.
Awards will vest at the end of a three-year period subject to meeting the performance conditions and continuing
employment, followed by a two year hold period.
Maximum Annual awards with a maximum of up to 200% of base salary may be made, although awards are not expected to be
above 150% of base salary.
Performance
Measures
Vesting conditions will be subject to performance conditions as determined by the Committee on an annual basis.
The 2022/23 awards were based on two performance criteria:
1. Average annual total NAV return for a three-year period (80%). For threshold levels of performance 30% of the
awards vest rising on a straight-line basis to 100% for maximum performance; and
2. Reaching ESG targets over a three year period (20%).
The 2023/24 award vesting criteria is currently under review by the Board in conjunction with the Committee and
external advisors. The results of this review will be announced shortly.
Clawback Clawback provisions may be applied in the event of a material misstatement or an error in assessing a performance
condition or material misconduct on behalf of the award holder.
Fees
Purpose To provide competitive directors fees.
Operation Annual fee for the Chair and an annual base fee for other Non-Executive Directors.
Additional fees for those Directors with additional responsibilities such as chairing a committee or acting as a Senior
Independent Director or for a specific project.
Annual fees paid quarterly in arrears.
Non-Executive Directors are not eligible for receive share options or other performance related remuneration.
Non-Executive Directors are entitled to reimbursement of reasonable expenses.
Maximum The Company’s Articles set an annual limit for the total of Non-Executive Directors’ remuneration of £500,000.
Clawback Clawback provisions may be applied in the event of a material misstatement or an error in assessing a performance
condition or material misconduct on behalf of the award holder.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Governance Report of the Nomination and Remuneration Committee continued
Letters of Appointment
All the non-executive Directors were appointed as Directors by
letters of appointment.
Each Director’s appointment letter provides that, upon the
termination of their appointment, they must resign in writing and all
records remain the property of the Company. The Directors’
appointments can be terminated in accordance with the Articles
and without compensation. The Articles provide that the office of
director shall be terminated by, among other things: (a) written
resignation; (b) unauthorised absences from board meetings for
twelve months or more; (c) unanimous written request of the other
directors; and (d) an ordinary resolution of the Company.
Under the terms of their appointment, each Director is subject to
re-election at the AGM on an annual basis. The Company may
terminate the appointment of a Director immediately on serving
written notice and no compensation is payable upon termination of
office as a director of the Company becoming effective. No non-
executive Director has a service contract with the Company, nor are
any such contracts proposed.
Service Contracts
The Executive Director has a service contract with the Company
containing the remuneration elements set out within this policy.
There is no fixed length of service and a notice period of 12 months.
The Executive Director’s service contract is available for inspection
at the Company’s registered office.
Policy for other members of the Executive
Team
Remuneration for other members of the executive follow the same
principles as for the Executive Director with a significant element of
remuneration being linked to performance measures. The
Committee review the pay awards to members of the Executive
team in consultation with the Executive Director annually.
Total remuneration for the year ended 31 March 2023
The table below sets out the total remuneration receivable by each Director who held office during the year ended 31 March 2023.
Name
Salary/
Fee
£’000
Additional
Fee
£’000
Pension
Salary
Supplement
£’000
Total
Fixed
£’000
(A)
Annual
Bonus
£’000
Total
Variable
£’000
(B)
Total
£’000
(A) + (B)
Total
$’000
Executive Director
Edward Buttery 500 - 50 550 375 375 925 1,083
Non-Executive Directors
Frank Dunne (Chair)
1
38 - 38 - - 38 46
Christopher Buttery 60 - - 60 - - 60 72
Trudi Clark 70 20 - 90 - - 90 109
Sandra Platts 67.5 - - 67.5 - - 67.5 81
Helen Tveitan 67.5 - - 67.5 - - 67.5 81
Nicholas Lykiardopulo
2
69.8 - - 69.8 - - 69.8 82
Total 872.8 20 50 942.8 375 375 1,317.8 1,554
The additional fee received by Trudi Clark was an extra one-off
payment of £20,000 for additional duties and services provided in
connection to the Company’s audit and the Grindrod acquisition.
Mr Buttery is employed directly by the Company and received a
basic annual salary of £500,000 for the year ended 31 March 2023
(31 March 2022: £371, 820).
Annual Bonus for 2022/2023
On 6 June 2023, the Committee approved an annual bonus payable
to Mr Edward Buttery of £375,000 (31 March 2022: £371,820), which
is based on an assessment of 75% of his performance criteria being
met as detailed further in the table below. Of the £375,000 annual
bonus award, 50% is payable in cash and 50% payable in Ordinary
Shares. The share awards will vest in equal instalments over 3 years
commencing from the first anniversary of the award and are subject
to a further 2 year holding period.
Long Term Incentive Plan (“LTIP”)
2022/23 2021/22
Date of Grant 2 August 2022 26 August 2021
Vesting Date 1 August 2025 25 August 2024
Vesting Criteria 80% average annual total
NAV return for period
from 1 April 2022 to 31
March 2025
(see table below)
100% average annual
total NAV return for the
period from IPO to 31
March 2024
(see table below)
LTIP contingent
Share award
642,629 750,000
1
Appointed 31 October 2022.
2
Resigned 6 January 2023.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Governance Report of the Nomination and Remuneration Committee continued
The LTIP award which is linked to the average Total NAV return
vests based on the following table.
Average annual total NAV Return % of award which vests
Less than 5% 0%
5% 30%
6% 40%
7% 50%
8% 60%
9% 70%
10% 80%
11% 90%
12% or more 100%
The ESG targets include various objectives in line with the Group’s
ESG commitments on responsible investments, climate change,
environmental management, compliance & conduct, community
engagement and corporate governance.
Performance Grants to Other Members of the
Executive Team
Other members of the Executive Team were awarded by the
Committee annual bonuses and long-term incentive awards on the
same terms as those awarded to Mr Buttery as follows:
2022/23 2021/22
Bonus Awards US$966,000 US$966,000
2 August 2022
26 August
2021
LTIP contingent share award 1,446,293
Ordinary Shares
1,545,000
Ordinary Shares
Of the US$966,000 2022/23 bonus awards to the other Executive
Team members, 50% was payable in cash and 50% payable in
Ordinary Shares (2021/22 bonus awards: 100% cash).
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.
Pension 10.0% of Salary 10% 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).
LTIP The 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
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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.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Governance Report 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
Matter Action
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.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Governance Report 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.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Governance Report 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 Company 401,600 275,730
Interim review of the Company 45,000 48,530
Annual audit of the TMI Advisors (UK) Limited - 12,500
Total audit related services 446,600 336,760
Total non-audit related services - 139,000
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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.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Governance Report 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
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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
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 Company 31 March 2023 31 March 2022
Name
No. of
Ordinary
Shares Percentage
No. of
Ordinary
Shares Percentage
Frank Dunne
1
42,416 0.01% N/A N/A
Edward Buttery
2
470,344 0.12% 454,750
3
0.14%
Christopher Buttery 800,722 0.20% 650,722 0.20%
Trudi Clark 70,000 0.02% 50,000 0.02%
Sandra Platts 42,261 0.01% 42,261 0.01%
Helen Tveitan 20,000 0.01% 20,000 0.01%
Nicholas
Lykiardopulo
4
N/A N/A 2,436,087
5
0.74%
Executive team members
Alexander Slee 56,896 0.02% 56,896 0.02%
Camilla Pierrepont 192,929 0.06% 172,941 0.05%
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
34,042,931 10.31%
Fidelity International 32,351,972 9.80%
M&G Investments 23,767,528 7.20%
Waverton Investment
Management
21,309,991 6.45%
West Yorkshire PF 13,955,899 4.23%
CG Asset Management 12,661,536 3.83%
Hawksmoor Investment
Management
11,517,151 3.49%
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
Governance Directors’ 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 matter How 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.
Governance Independent 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 it 2.5% 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
undetected misstatements exceeds overall materiality. Specifically,
we use performance materiality in determining the scope of our
audit and the nature and extent of our testing of account balances,
classes of transactions and disclosures, for example in determining
sample sizes. Our performance materiality was 75% (31 March
2022: 50%) of overall materiality, amounting to US$10.61 million
(31 March 2022: US$7.19 million) for the group financial
statements.
In determining the performance materiality, we considered a
number of factors – the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls - and
concluded that an amount at the upper end of our normal range
was appropriate.
We agreed with the Risk and Audit Committee that we would report
to them misstatements identified during our audit above US$707,500
(31 March 2022: US$719,000) as well as misstatements below that
amount that, in our view, warranted reporting for qualitative reasons.
Reporting on other information
The other information comprises all the information included in the
Annual Report and Audited Consolidated Financial Statements (the
“Annual Report”) but does not include the consolidated financial
statements and our auditor’s report thereon. The directors are
responsible for the other information.
Our opinion on the consolidated financial statements does not
cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the consolidated financial
statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our
knowledge obtained in the audit, or otherwise appears to be
materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to
report based on these responsibilities.
Responsibilities for the consolidated
financial statements and the audit
Responsibilities of the Directors for the consolidated
financial statements
As explained more fully in the Statement of Directors’
Responsibilities, the directors are responsible for the preparation of
the consolidated financial statements that give a true and fair view
in accordance with International Financial Reporting Standards,
the requirements of Guernsey law and for such internal control as
the directors determine is necessary to enable the preparation of
consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
Governance Independent 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
In preparing the consolidated financial statements, the Directors
are responsible for assessing the group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
the directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
consolidated financial statements
Our objectives are to obtain reasonable assurance about whether
the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue
an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated
financial statements.
Our audit testing might include testing complete populations of
certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number
of items for testing, rather than testing complete populations. We
will often seek to target particular items for testing based on their
size or risk characteristics. In other cases, we will use audit
sampling to enable us to draw a conclusion about the population
from which the sample is selected.
As part of an audit in accordance with ISAs, we exercise professional
judgement and maintain professional scepticism throughout the
audit. We also:
• Identify and assess the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal control;
• Obtain an understanding of internal control relevant to the audit
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the group’s internal control;
• Evaluate the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related
disclosures made by the Directors;
• Conclude on the appropriateness of the directors’ use of the
going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the
group’s ability to continue as a going concern over a period of at
least twelve months from the date of approval of the consolidated
financial statements. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to
the related disclosures in the consolidated financial statements
or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events or conditions
may cause the group to cease to continue as a going concern;
• Evaluate the overall presentation, structure and content of the
consolidated financial statements, including the disclosures, and
whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves
fair presentation;
• Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities within
the group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for
our audit opinion.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of
the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Use of this report
This report, including the opinions, has been prepared for and only
for the members as a body in accordance with Section 262 of The
Companies (Guernsey) Law, 2008 and for no other purpose. We do
not, in giving these opinions, accept or assume responsibility for
any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
Governance Independent 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
Report on other legal and regulatory
requirements
Company Law exception reporting
Under The Companies (Guernsey) Law, 2008 we are required to
report to you if, in our opinion:
• we have not received all the information and explanations we
require for our audit;
• proper accounting records have not been kept; or
• the consolidated financial statements are not in agreement with
the accounting records.
We have no exceptions to report arising from this responsibility.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in
relation to going concern, longer-term viability and that part of the
corporate governance statement relating to the company’s compliance
with the provisions of the UK Corporate Governance Code specified
for our review. Our additional responsibilities with respect to the
corporate governance statement as other information are described
in the Reporting on other information section of this report.
The company has reported compliance against the 2019 AIC Code
of Corporate Governance (the “Code”) which has been endorsed by
the UK Financial Reporting Council as being consistent with the UK
Corporate Governance Code for the purposes of meeting the
company’s obligations, as an investment company, under the
Listing Rules of the FCA.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the corporate
governance statement, included within the Strategic Review is
materially consistent with the consolidated financial statements
and our knowledge obtained during the audit, and we have nothing
material to add or draw attention to in relation to:
• The Directors’ confirmation that they have carried out a robust
assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal
risks, what procedures are in place to identify emerging risks and
an explanation of how these are being managed or mitigated;
• The Directors’ statement in the consolidated financial statements
about whether they considered it appropriate to adopt the going
concern basis of accounting in preparing them, and their
identification of any material uncertainties to the group’s ability
to continue to do so over a period of at least twelve months from
the date of approval of the consolidated financial statements;
• The Directors’ explanation as to their assessment of the group’s
prospects, the period this assessment covers and why the period
is appropriate;
• The Directors’ statement as to whether they have a reasonable
expectation that the company will be able to continue in operation
and meet its liabilities as they fall due over the period of its
assessment, including any related disclosures drawing attention
to any necessary qualifications or assumptions.
Our review of the Directors’ statement regarding the longer-term
viability of the group was substantially less in scope than an audit
and only consisted of making inquiries and considering the
directors’ process supporting their statements; checking that the
statements are in alignment with the relevant provisions of the
Code; and considering whether the statement is consistent with
the consolidated financial statements and our knowledge and
understanding of the group and its environment obtained in the
course of the audit.
In addition, based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the corporate
governance statement is materially consistent with the
consolidated financial statements and our knowledge obtained
during the audit:
• The Directors’ statement that they consider the Annual Report,
taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess
the group’s position, performance, business model and strategy;
• The section of the Annual Report that describes the review of
effectiveness of risk management and internal control systems;
• The section of the Annual Report describing the work of the Risk
and Audit Committee.
We have nothing to report in respect of our responsibility to report
when the directors’ statement relating to the company’s compliance
with the Code does not properly disclose a departure from a
relevant provision of the Code specified under the Listing Rules for
review by the auditors.
Other matter
In due course, as required by the Financial Conduct Authority
Disclosure Guidance and Transparency Rule 4.1.14R, these
consolidated financial statements will form part of the ESEF-
prepared annual financial report filed on the National Storage
Mechanism of the Financial Conduct Authority in accordance with
the ESEF Regulatory Technical Standard (“ESEF RTS”). This
auditor’s report provides no assurance over whether the annual
financial report will be prepared using the single electronic format
specified in the ESEF RTS.
Evelyn Brady
For and on behalf of PricewaterhouseCoopers CI LLP
Chartered Accountants and Recognised Auditor
Guernsey, Channel Islands
26 July 2023
Governance Independent 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
Financial statements
Financial statements
Consolidated statement of comprehensiveincome 56
Consolidated statement of changes in shareholders’ equity 57
Consolidated statement of financial position 58
Consolidated statement of cash flows 59
Notes to the consolidated financial statements 60
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Financial statements
Financial statements
Consolidated statement of
comprehensiveincome
For the year ended 31 March 2023
Note
For the
year ended
31 March 2023
US$
31 March 2021
(date of incorporation)
to 31 March 2022
US$
Income
Net (loss)/gain on financial assets at fair value
through profit or loss
5 (6,376,717 ) 245,569,999
Dividend income 7 42,617,271 13,572,934
Other income 24,166 -
Net foreign exchange losses (159,326 ) (55,479 )
Total income 36,105,394 259,087,454
Expenses
Director, Executive Team and employee costs 10 5,408,555 3,508,785
Share-based payment – equity settled 10 910,080 486,645
Audit and interim review fees 490,161 481,987
PR and investor consultancy fees 286,935 326,107
Legal and professional fees 795,979 292,682
Office support fees 435,562 276,000
Administration fees 10 311,136 209,680
Travel and marketing fees 567,484 189,340
Other expenses 738,571 434,693
Total expenses 9,944,463 6,205,919
Profit for the year/period before tax 26,160,931 252,881,535
Tax adjustment/(charge) 11 49,602 (69,970 )
Profit for the year/period after tax 26,210,533 252,811,565
Other comprehensive income
Items that might be reclassified to profit or loss
Foreign currency adjustment on translation to presentation currency (19,416 ) -
Total comprehensive income for the year/period 26,191,117 252,811,565
Earnings per Ordinary Share for profit attributable to the Ordinary Equity
holders of the Company:
Basic earnings per Ordinary Share 14 0.0794 0.8041
Diluted earnings per Ordinary Share 14 0.0794 0.7932
All items in the above statement are derived from continuing operations. All income is attributable to the Ordinary Shares of the Company.
The accompanying notes on pages 60 – 85 form an integral part of the Consolidated Financial Statements.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Financial statements
Consolidated statement of changes
in shareholders’ equity
For the year ended 31 March 2023
Note
Share capital
US$
Retained
earnings
US$
Foreign
currency
translation
reserve
US$
Other reserves
US$
Total equity
US$
At 1 April 2022 333,479,334 241,282,790 - 486,645 575,248,769
Total comprehensive income:
Profit for the financial period after tax - 26,210,533 - - 26,210,533
Other comprehensive income - - (19,416 ) - (19,416 )
Total comprehensive income for the year - 26,210,533 (19,416 ) - 26,191,117
Transactions with Shareholders:
Dividends paid during the period 4 - (36,235,666 ) - - (36,235,666 )
Equity-settled share-based awards 10 - - - 910,080 910,080
Total transactions with Shareholders - (36,235,666 ) - 910,080 (35,325,586 )
At 31 March 2023 333,479,334 231,257,657 (19,416 ) 1,396,725 566,114,300
Note
Share capital
US$
Retained
earnings
US$
Foreign
currency
translation
reserve
US$
Other reserves
US$
Total equity
US$
At 31 March 2021 - - - - -
Total comprehensive income:
Profit for the financial period - 252,811,565 - - 252,811,565
Total comprehensive income for the period - 252,811,565 - - 252,811,565
Transactions with Shareholders:
Issue of Ordinary Shares during the
period, net of issue costs
12 333,479,334 - - 333,479,334
Dividends paid during the period 4 - (11,528,775 ) - - (11,528,775 )
Equity-settled share-based awards 10 - - - 486,645 486,645
Total transactions with Shareholders 333,479,334 (11,528,775 ) - 486,645 322,437,204
-
At 31 March 2022 333,479,334 241,282,790 - 486,645 575,248,769
The accompanying notes on pages 60 – 85 form an integral part of the Consolidated Financial Statements.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Financial statements
Consolidated statement of financial position
At 31 March 2023
Note
31 March 2023
US$
31 March 2022
US$
Non-current assets
Financial assets at fair value through profit or loss 5 556,738,240 574,114,9 22
Property, plant & equipment 557,089 -
Total non-current assets 557,295,329 574,114,922
Current assets
Cash and cash equivalents 11,199,937 3,382,410
Trade and other receivables 554,224 56,821
Total current assets 11,754,161 3,439,231
Total assets 569,049,490 577,554,153
Current liabilities
Trade and other payables 8 2,935,190 2,305,384
Total current liabilities 2,935,190 2,305,384
Net assets 566,114,300 575,248,769
Equity
Share capital 12 333,479,334 333,479,3 34
Retained earnings 231,257,657 241,282,790
Foreign currency translation reserve (19,416 ) -
Other reserves 1,396,725 486,645
Total equity 566,114,300 575,248,769
Number of Ordinary Shares 12 330,215,878 330,215,878
Net asset value per Ordinary Share 1.7144 1.7420
The Consolidated Financial Statements on pages 56 to 85 were approved and authorised for issue by the Board of Directors on 26 July
2023 and signed on its behalf by:
Frank Dunne
Senior Independent Director
and acting Interim Chair
1
The accompanying notes on pages 60 – 85 form an integral part of the Consolidated Financial Statements.
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
Financial statements
Consolidated statement of cash flows
For the year ended 31 March 2023
Note
For the year ended
31 March 2023
US$
31 March 2021
(date of incorporation)
to 31 March 2022
US$
Cash flows from operating activities
Profit for the year/period after tax 26,210,533 252,811,565
Adjustments for:
Net loss/(gain) on financial assets at fair value through profit or loss 5 6,376,717 (245,569,999 )
Equity-settled share based awards 10 910,080 486,645
Net foreign exchange losses 159,326 55,479
Increase in trade and other receivables (497,403 ) (56,821 )
Increase in trade and other payables 629,806 2,305,384
Return of capital 5 10,999,965 -
Purchase of investments
1
5 - (225,866,439 )
Net cash flow used in operating activities 44,789,024 (215,834,186 )
Cash flows from investing activities
Purchase of property, plant & equipment (557,089 ) -
Net cash flow used in investing activities (557,089 ) -
Cash flows from financing activities
Proceeds from Ordinary Share issuance
2
12 - 237,320,000
Ordinary Share issue costs 12 - (6,519,150 )
Dividends paid 4 (36,235,666 ) (11,528,775 )
Net cash flow from financing activities (36,235,666 ) 219,272,075
Net increase in cash and cash equivalents 7,996,269 3,437,889
Cash and cash equivalents at beginning of year/period 3,382,410 -
Effect of foreign exchange rate changes during the year/period (178,742 ) (55,479 )
Cash and cash equivalents at end of year/period 11,199,937 3,382,410
The accompanying notes on pages 60 – 85 form an integral part of the Consolidated Financial Statements.
1
Excludes non-cash transactions. For details, refer to note 5.
2
Excludes non-cash transactions. For details, refer to note 12.
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Financial statements
Notes to the consolidated financial
statements
For the year ended 31 March 2023
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Taylor Maritime Investments Limited Annual report and audited consolidated financial statements
Financial statements Notes to the consolidated financial statements continued
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Financial statements Notes to the consolidated financial statements continued
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4. Dividends payable
The Company intends to pay dividends on a quarterly basis with dividends declared in January, April, July and October.
The Company declared the following dividends per Ordinary Share during the year ended 31 March 2023:
Period to Payment date
Dividend rate
per Share
(cents)
Net dividend
payable (US$) Record date Ex-dividend date
31 March 2022 19 May 2022 1.75 5,756,913 29 April 2022 28 April 2022
31 March 2022 10 June 2022 3.22 10,613,920 20 May 2022 19 May 2022
30 June 2022 24 August 2022 2.00 6,609,233 5 August 2022 4 August 2022
30 September 2022 25 November 2022 2.00 6,652,667 4 November 2022 3 November 2022
31 December 2022 28 February 2023 2.00 6,602,933 10 February 2023 9 February 2023
Subsequent to the year end
1
, the Company also declared the following dividends:
Period to Payment date
Dividend rate
per Share
(cents)
Net dividend
payable (US$) Record date Ex-dividend date
31 March 2023 31 May 2023 2.00 6,604,318 12 May 2023 11 May 2023
2.00 6,604,318
The Company declared the following dividends per Ordinary Share during the period from 31 March 2021 (date of incorporation) to 31
March 2022:
Period to Payment date
Dividend rate
per Share
(cents)
Net dividend
payable (US$) Record date Ex-dividend date
30 September 2021 24 November 2021 1.75 5,755,209 5 November 2021 4 November 2021
31 December 2021 23 February 2022 1.75 5,773,566 3 February 2022 4 February 2022
Dividends on Ordinary Shares are declared in US Dollar and paid, by default, in US Dollar. However, Shareholders can elect to receive
dividends in Sterling by written notice to the Registrar (such election to remain valid until written cancellation or revocation is given to the
Registrar). The date on which the US Dollar/Sterling exchange rate for the relevant dividend is set will be announced on the London Stock
Exchange at the time the dividend is declared and a further announcement will be made once such exchange rate has been determined.
Under Guernsey law, companies can pay dividends in excess of accounting profit provided they satisfy the solvency test prescribed by the
Companies (Guernsey) Law, 2008. The solvency test considers whether a company is able to pay its debts when they fall due, and whether
the value of a company’s assets is greater than its liabilities.
Total dividends payable as at 31 March 2023 were US$nil (31 March 2022: US$nil).
1
In accordance with IAS 10, dividends declared after the reporting period are not recognised as a liability at 31 March 2022.
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Additional information
Assets and Liabilities information (look-through basis) – unaudited 87
Management and Administration 88
Appendix – Alternative performance measures – unaudited 89
Appendix – Definitions and glossary 92
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Additional information
Assets and liabilities information
(look-through basis) – unaudited
As at 31 March 2023
Name (SPV)
Investment
in securities/
vessels at
FVTPL
US$
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 assets 362,391,478 (92,719,653) 269,671,825
Good Grace (MI) Limited 29,987,500 811,892 30,799,392
Good Uxbridge (MI) Limited 19,942,500 493,670 20,436,170
Lucius (MI) Limited 19,892,500 443,399 20,335,899
Forshall (MI) Limited 19,882,500 504,761 20,387,261
Julius (MI) Limited 19,862,500 912,115 20,774,615
Billy (MI) Limited 18,132,500 413,603 18,546,103
Horatio (MI) Limited 17,002,500 185,696 17,188,196
Junius (MI) Limited 16,462,500 494,550 16,957,050
Good Edgehill (MI) Limited 16,227,500 523,346 16,750,846
Good Duke (MI) Limited 16,022,500 724,246 16,746,746
Decius (MI) Limited 15,647,500 949,098 16,596,598
Cassius (MI) Limited 15,497,500 534,286 16,031,786
Good Earl (MI) Limited 14,622,500 573,311 15,195,811
Great Fox (MI) Limited 14,537,500 690,865 15,228,365
Good Queen (MI) Limited 14,432,500 563,824 14,996,324
Gaius (MI) Limited 14,397,500 450,857 14,848,357
Gabinius (MI) Limited 14,212,500 840,067 15,052,567
Good Heir (MI) Limited 13,722,500 458,072 14,180,572
Good Fiefdom (MI) Limited 13,692,500 (290,374) 13,402,126
Hosidius (MI) Limited 13,362,500 (222,358) 13,140,142
Good Titan (MI) Limited 12,825,000 654,599 13,479,599
Great Ewe (MI) Limited 12,462,500 368,954 12,831,454
Good Stag (MI) Limited 10,012,500 226,126 10,238,626
Good Viscount (MI) Limited - 8,841,995 8,841,995
Vessels at FVTPL & other assets 372,840,000 20,146,600 392,986,600
Totals 735,231,478 (178,493,238) 556,738,240
1
Includes net assets/(liabilities) of dormant subsidiaries.
2
This SPV holds the investment in Grindrod Shipping and associated subsidiaries, see note 6 for company list.
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Additional information
Management and administration
Directors
Henry Strutt (Chair, Independent Non-Executive Director) – appointed 1 June 2023
Frank Dunne (Senior Independent Director, Independent Non-Executive Director) – appointed 31 October 2022
1
Edward Buttery (Chief Executive Officer)
Helen Tveitan (Independent Non-Executive Director)
Trudi Clark (Independent Non-Executive Director)
Christopher Buttery (Non-Executive Director)
Sandra Platts (Independent Non-Executive Director)
Nicholas Lykiardopulo (former Chair, Independent Non-Executive Director) – resigned 6 January 2022
Registered Office and Business Address Administrator and Secretary
Guernsey GY1 2HL
Commercial Manager Registrar
Taylor Maritime (HK) Limited Computershare Investor Services (Guernsey) Limited
26/F, Vertical Square 1st Floor, Tudor House
Wong Chuk Hang Le Bordage
Hong Kong St Peter Port
Guernsey GY1 1DB
Legal Advisers in Guernsey Legal Advisers in United Kingdom
Carey Olsen (Guernsey) LLP Norton Rose Fullbright LLP
Carey House 3 More London Riverside
Les Banques London SE1 2AQ
St Peter Port
Guernsey GY1 4BZ
Principal Bankers Independent Auditor
EFG Bank, Cayman Branch PricewaterhouseCoopers CI LLP
9 Forum Lane, Suite 3208 Royal Bank Place
Camana Bay 1 Glategny Esplanade
PO Box 10360 St Peter Port
Grand Cayman KY1-1003 Guernsey GY1 4ND
Sole Global Co-Ordinator, Sponsor Independent Ship Valuer
and Sole Bookrunner Hartland Shipping Services Limited
Jefferies International Limited 28 Bedford Street
100 Bishopsgate Covent Garden
London EC4N 4JL London WC2E 9ED
Independent Ship Valuer
Braemar ACM Valuations Limited
One Strand
Trafalgar Square
London WC2N 5HR
1
Appointed as Senior Independent Director on 31 October 2023. Subsequently, served as Interim Chair for the period 6 January 2023 to 1 June 2023.
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Additional information
Appendix: Alternative performance
measures – unaudited
Alternative Performance Measures used in the Consolidated Financial Statements
• Annualised Unlevered Return
Calculated based on annualised unlevered operating cash flow of the underlying SPVs (net time charter revenue less operating
expenditure, selling, general & administrative expenses and drydocking accrual) divided by the fair value of the vessel.
• Debt over gross assets ratio
Debt over gross assets ratio is a leverage ratio that indicates the percentage of assets that are being financed with debt. The calculations
below, show the ratios for TMI Group only and the combined look-through information, which includes Grindrod’s gross assets and
debt at 83.2%.
At 31 March 2023
TMI Group
Look- through
(including Grindrod)
Debt US$222.2 million US$428.8 million
Gross Assets US$800.3 million US$1,101.0 million
27.8% 39.0%
• Discount to NAV
Discount to NAV to the amount, expressed as a percentage, by which the share price is less than the NAV per share.
At 31 March 2023 At 31 March 2022
NAV per ordinary share (a) US$1.7144 US$1.7420
Share price per ordinary share (b) US$1.1200 US$1.4200
Discount amount (c = b – a) (c) (US$0.5944) (US$0.3220)
Discount to NAV (d = (c / a) x 100) (d) (34.7%) (18.49%)
• Dividend yield
The dividend yield is a financial ratio that shows how much the Company has paid out in dividends during the year ended 31 March
2023 (prior period: 31 March 2021 to 31 March 2022) relative to its IPO price of US$1.00 per Ordinary Share.
• Dividend cover
Dividend cover is the ratio of the Group’s cash flow divided by its total dividend payments, and is used as a measure of the extent to
which a company is able to generate sufficient cash flow to pay its dividends. This is calculated based on adjusted EBITDA of the
underlying SPVs for the financial year to 31 March 2023 (EBITDA excluding net changes in fair value of financial assets) less interest
expenses and docking capital expenditure for the financial year to 31 March 2023 divided by dividend for the financial year. The
calculations below show the dividend cover of dividends declared in the financial year, exclusive of the special dividend of 3.22 US
cents declared in May 2022.
US$ million
Adjusted Group EBITDA, inclusive of underlying SPVs 101.70
Interest expense (13.70)
Docking capital expenditure (20.70)
Net cash income (a) 67.30
Dividends paid (b) 25.62
Dividend cash cover (c = a / b) (c) 2.6x
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Additional information Appendix – Alternative performance measures –
unaudited continued
Dividend cover for the financial period 31 March 2021 (date of incorporation) to 31 March 2022. The calculations below show the dividend
cover of dividends declared in the financial period and also the calculation for the dividend cover inclusive of the quarterly dividend
declared in April 2022 and the special dividend declared in May 2022.
US$ million
(excluding
post period
end
dividends)
US$ million
(including
April 2022
quarterly
dividend
1
)
US$ million
(including
May 2022
special
dividend
2
)
Adjusted Group EBITDA, inclusive of underlying SPVs 82.56 82.56 82.56
Interest expense (3.67) (3.67) (3.67)
Docking capital expenditure (3.84) (3.84) (3.84)
Net cash income (a) 75.05 75.05 75.05
Dividends paid (b) 11.53 17.31 27.96
Dividend cash cover (c = a / b) (c) 6.5x 4.3x 2.7x
• Internal rate of return (“IRR”)
Internal rate of return is a calculation of the retrospective annualised profitability of a vessel investment over the period the vessel was
owned, the IRR being the discount rate that would make the net present value of the actual cashflows from the investment equal to
zero. This provides a useful measure of the profitability of an investment.
• Multiple on Invested Capital (“MOIC”) is a measure how much value an investment has generated. MOIC is a gross metric,
meaning that it is calculated before fees and expressed as a multiple of the original investment.
• Ongoing charges ratio (“OCR”)
The ongoing charges ratio of an investment company is the annual percentage reduction in shareholder returns as a result of recurring
operational expenditure. Ongoing charges are classified as those expenses which are likely to recur in the foreseeable future, and
which relate to the operation of the Group, excluding investment transaction costs, gains or losses on investments and performance
fees and the costs associated with any LTIP award. The OCR is calculated as the total ongoing charges for a period divided by the
average net asset value over that period/year.
Ordinary Shares
For the year ended
31 March 2023
US$
For the period
31 March 2021 to
31 March 2022
US$
Total expenses 9,944,463 6,205,919
Non-recurring expenses (3,462,430) (2,137,659)
Total ongoing expenses 6,482,033 4,068,260
Annualised total ongoing expenses 6,482,033 4,161,439
Average NAV 567,382,681 448,409,788
Ongoing charges ratio (using AIC methodology) 1.1% 0.9%
1
Exclusive of May 2022 special dividend.
2
Inclusive of April 2022 quarterly dividend and May 2022 special dividend.
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Additional information Appendix – Alternative performance measures –
unaudited continued
• Total NAV/share price return
Total NAV return/share price return are calculations showing how the NAV and share price per share has performed over a period of
time, taking into account dividends paid to shareholders. It is calculated on the assumption that dividends are reinvested at the prevailing
NAV on the last day of the month that the shares first trade ex-dividend. This provides a useful measure to allow shareholders to
compare performances between investment funds where the dividend paid may differ.
For the year ended
31 March 2023
Total NAV
return
Total share
price return
Opening NAV/share price per share (a) US$1.7420 US$1.4200
Closing NAV/share price per share (b) US$1.7144 US$1.1200
Dividends paid (c) US$0.1097 US$0.1097
Return for the period (d = ((b+c) - a) (d) US$0.0821 (US$0.1903)
Total NAV/share price return (e = (d / a) x 100) (e) 4.7% (13.4%)
For the period 31 March 2021
to 31 March 2022
Total NAV
return
Total share
price return
Opening NAV/share price per share (a) US$0.9800 US$1.0000
Closing NAV/share price per share (b) US$1.7420 US$1.4200
Dividends paid (c) US$0.0350 US$0.0350
Return for the period (d = ((b+c) - a) (d) US$0.7970 US$0.4550
Total NAV/share price return (e = (d / a) x 100) (e) 81.3% 45.5%
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AER Annual Efficiency Ratio. A carbon intensity metric taking into account the cargo carrying capacity of
the ship
Formula = (Fuel consumed x emission factors)/(Deadweight capacity x distance travelled)
BDI Baltic Dry Index
BHSI Baltic Handysize Index is a measure of the strength of spot freight earnings for smaller dry bulk
vessels, currently based on a standard 38,000 dwt bulk carrier (since 2 Jan 2020). It reflects average
spot market TCE earnings across several representative routes
BHSI TCA The daily time charter average value for a basket of routes in the dry bulk shipping market representative
of Handysize vessels, calculated from reports of an independent international board of Panellists
BWMS Ballast Water Management System
Charter Free Value The resale value attributed to a ship free of any pre-existing charter contracts
Commercial Manager The Commercial Manager is appointed under the Framework Agreement and is responsible for
seeking and negotiating employment, post fixture operations, collection of hire, procuring and
arranging marine insurances, keeping books of account relating to SPVs, assisting in company
secretarial matters, maintaining SPV bank accounts, and monitoring of the technical managers
on behalf of the Company
COVID-19 Pandemic The outbreak of the infectious disease known as COVID-19, the spread of which was declared as
a transnational and continental pandemic by the World Health Organisation on 11 March 2020
DBP The deferred bonus plan
DRC Depreciated Replacement Cost refers to the theoretical value of a second-hand ship based on
prevailing newbuilding price depreciated to current age
DWT Deadweight tonnage, the measure of how much weight a ship can carry. It is the sum of the weights
of cargo, fuel, fresh water, ballast water, provisions, passengers, and crew
EEOI Energy Efficiency Operational Index. A carbon intensity metric taking into account actual cargo carried
Formula = (Fuel consumed x emission factors)/(Cargo carried x distance travelled)
FFA Forward freight agreement, being derivatives used for hedging against the freight market exposure
FRC The UK Financial Reporting Council
Framework Management
Agreement
The overall framework management agreement between TMI Holdco Limited, a subsidiary of the
Company and the Commercial Manager and Technical Manager
Geared Ships Vessels equipped with cranes for loading and un-loading cargoes i.e., Handysize and Supramax
vessels
Grindrod Grindrod Shipping Holdings Ltd, a dual NASDAQ and Johannesburg Stock Exchange listed shipping
business (NASDAQ: GRIN, JSE: GSH “Grindrod”), is an international shipping company which owns an
attractive, modern fleet of predominantly geared dry bulk vessels
Gross Assets The aggregate of the fair value of all underlying vessels and all other assets of the Group in
accordance with the Group’s usual accounting policy
Group The Company and any Group Companies from time to time
Group Companies Subsidiaries of the Company from time to time (including Holdco and the SPVs), see note 6.
Handysize A dry bulk carrier with a capacity between 10,000 and 44,999 DWT (10,000 DWT to 39,999 DWT for
vessels built prior to 2014) for the purposes of quoted market data. The Group’s target size range is
28,000 to 39,999 DWT
IFRS International Financial Reporting Standards
IMO International Maritime Organisation
Additional information
Appendix – Definitions and glossary
The following definitions apply throughout this document unless the context requires otherwise:
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Additional information Appendix – Definitions and glossary continued
IPO Initial Public Offering
ISM Code International Safety Management Code
KPIs Key performance indicators
Listing Rules The listing rules made by the FCA pursuant to Part VI of FSMA
LTIP The long term incentive plan is the Company’s policy which rewards the executive team for reaching
specific goals that lead to increased shareholder value
Net Asset Value or NAV The value, as at any date, of the assets of the Company after deduction of all liabilities of the
Company and in relation to a class of Shares in the Company, the value, as at any date of the assets
attributable to that class of Shares after the deduction of all liabilities attributable to that class of
Shares determined in accordance with the accounting policies adopted by the Company from time-
to-time
Net Time Charter Rate The rate of hire for a Time Charter, net of commissions
Net Zero According to the IPCC definition, net zero CO2 emissions are achieved when anthropogenic CO2
emissions are balanced globally by anthropogenic CO2 removals over a specified period
NOx Nitrous Oxides
PSC deficiencies ratio Port State Control deficiencies ratio
Formula = No. of PSC deficiencies/no. of PSC inspections
Related Party A related party is a person or entity that is related to the Group.
SASB Sustainability Accounting Standards Board
Scope 1, 2 and 3 emissions Greenhouse gas emissions as defined by the Greenhouse Gas Protocol. Scope 1 and 2 emissions
relate to direct emissions from owned or controlled sources. Scope 2 emissions cover indirect
emissions from the generation of purchased electricity, steam, heating or cooling. Scope 3 emissions
include all indirect emissions that occur in an entity’s value chain
Seed Assets The 23 individual vessels which were acquired by the Group at the IPO date
SOLAS Safety of Life at Sea Convention
SOx Sulphur oxide
Spot Charter A Charter where the shipowner hires his vessel to the charterer for just a single voyage, carrying a
designated quantity of cargo
SPV or Special Purpose
Vehicle
Corporate entities, formed and wholly owned (directly or indirectly) by the Company, specifically
to hold one or more vessels, and including (where the context permits) any intermediate holding
company of the Company
Supramax A dry bulk carrier with a capacity between 40,000 to 64,999 DWT for the purposes of quoted market
data. The Group’s target size range is between 50,000 and 64,999 DWT
TCFD Taskforce Climate Related Disclosure
Technical Manager Tamar Ship Management Limited. Appointed by the Group under the Framework Agreement are
responsible for the ensuring vessels’ compliance with flag state law and applicable regulations;
arranging and supervising asset maintenance; and arranging crewing
Time Charter The hiring of a ship for a specific period of time. The charterer is responsible for cargo, itinerary and
bears the voyage related costs including fuel. The shipowner supplies the ship and the crew
UN SDGs United Nations Sustainable Development Goals
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Registered Office
c/o Sanne Fund Services (Guernsey) Limited
1 Royal Plaza
Royal Avenue
St Peter Port
Guernsey
GY1 2HL
www.taylormaritimeinvestments.com