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MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
DIRECTORS’ REPORT AND FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
Company Registration Number 401997
1
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
DIRECTORS’ REPORT AND FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
CONTENTS PAGE(S)
Directors and other information 1
Directors' report 2 - 7
Directors’ responsibilities statement 8 - 9
Independent auditor’s report 10 - 17
Consolidated statement of comprehensive income 18
Consolidated statement of financial position 19
Company statement of financial position 20
Consolidated statement of changes in equity 21
Company statement of changes in equity 21
Consolidated statement of cash flow 22
Notes to the consolidated financial statements 23 – 58
1
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
DIRECTORS AND OTHER INFORMATION
Directors Mr. Peter Blessing (Irish)
Mr. Alan Geraghty (Irish)
Administrator and Wilmington Trust SP Services (Dublin) Limited
Company Secretary Fourth Floor
3 George’s Dock
IFSC
Dublin 1
Registered Office Fourth Floor
3 George’s Dock
IFSC
Dublin 1
Banker Citibank N.A.
25 Canada Square
Canary Wharf, London, E14 5LB
United Kingdom
Solicitors Clifford Chance
10 Upper Bank Street
London E14 5JJ
United Kingdom
A&L Goodbody
25/28 North Wall Quay
IFSC, Dublin 1
Independent Auditor Deloitte Ireland LLP
Chartered Accountants and Statutory Audit Firm
Deloitte & Touche House
29 Earlsfort Terrace
Dublin 2
Trustee Citigroup Trustee Company Limited
Citigroup Centre, Canada Square
Canary Wharf
London E14 5LB
United Kingdom
Fund Manager Navegator – SGFTC, SA
Rua Castilho, 20
Lisbon, Portugal
Custodian, Servicer Banco Comercial Portugues, S.A.
and Arranger Praca D. Joao I, 28
Oporto, Portugal
Swap Counterparty Credit Agricole, Corporate & Investment Bank
9 quai du Président Paul Doumer
92920 Paris La Défense Cedex
Paris, France
2
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
DIRECTORS' REPORT
FINANCIAL YEAR ENDED 31 DECEMBER 2023
The Directors hereby present their report and the consolidated financial statements of Magellan
Mortgages No.3 Public Limited Company (the “Company”) and subsidiary (collectively as the
“Group”) for the financial year ended 31 December 2023.
Principal activities, business review and future developments
The Company was incorporated in Ireland on 11 May 2005 as Magellan Mortgages No. 3 PLC.
The principal activity of the Company is the investment in a portfolio of mortgage receivables in
Portugal, through the purchase of 100% of the units in the subsidiary, Fundo de Titularização de
Créditos Magellan Tres (FTC) (the “Fund”), a Portuguese securitisation fund. The portfolio consists
of loans originated by Banco Comercial Português S.A. (“BCP”) (the “Arranger”, the “Servicer” and
the “Custodian”). The Fund acquired the receivables from BCP and through the subscription in the
units of the Fund, the Company has ultimate ownership in the assets of the Fund. The investment in
the units of the Fund is hereafter referred to as “Investment in Subsidiary Undertaking”.
The transaction is financed through the issuance of six classes of mortgage backed floating rate notes,
Classes A, B, C, and D (the “Senior Notes”) to an aggregate amount of €1,500,000,000 and Class E
and F Notes (together with the Senior Notes, the “Notes”). All of the Notes are listed on the Main
Securities Market of Euronext Dublin. The repayment of principal and interest on the Notes is linked
to the performance of the portfolio of the mortgage receivables.
The Fund has a narrow and well-defined objective to manage its portfolio and is operating for the sole
benefit of its Unitholders. The Fund is not permitted to issue additional units nor acquire additional
assets. It is managed by a fund management company in Portugal, Navegator – SGFTC, SA (the
“Fund Manager”). The Fund Manager acts on behalf of the Unitholders and provides supervisory
services such as supervising the acquisition of the assets, notification of the borrowers in the event of a
mortgage asset sale notification event, issuance of the units and determination of the unit distribution.
In accordance with Portuguese Securitisation Law and Fund Regulations (the “Regulations”), a
Portuguese securitisation fund must be administered, managed and represented by a local licensed
fund manager. The Regulations require that (i) the fund is managed by a fund manager, (ii) a servicer
is appointed to collect and manage the portfolio and (iii) a custodian holds the portfolio on behalf of
the fund. The Fund Manager acts on behalf of the Fund and for the sole benefit of the Unitholders and
is required to perform and execute all acts to ensure the proper administration of the Fund.
The Company has entered into an interest rate swap agreement with Credit Agricole (the “Swap
Counterparty”) in order to reduce the risk of a mismatch between the income received on the fund
units and the interest payable on the Notes.
The Company owns 100% of the units issued by the Fund. As such, the Directors of the Company
have prepared consolidated financial statements incorporating the Fund’s results (see note 2 for further
information on basis of consolidation).
3
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
DIRECTORS' REPORT (continued)
FINANCIAL YEAR ENDED 31 DECEMBER 2023
Principal activities, business review and future developments (continued)
2023 saw an uplift in performance despite elevated levels of volatility in global financial markets
driven by two main catalysts – global inflation and the on-going Russia-Ukraine war. Central Banks
around the world continued to raise benchmark interest rates in response to an increased cost of goods.
The on-going Russia-Ukraine conflict remains a contentious geopolitical risk between the US &
China, and their respective allies.
However, on a positive note the prolonged contraction in economic conditions which arose as a result
of COVID-19; specifically in the form of potential defaults and insolvencies of debtors with reduced
amounts paid to the Fund and/or delays in payments being received appears to have eased. This is
evidenced by the increased level of interest income in the period as detailed below. In addition to the
improved performance the limited recourse nature of the assets and the fact that the repayment of
principal and interest on the Notes is directly linked to the performance of the portfolio of mortgage
receivables and any reduction in income will be offset by the corresponding reduction in interest
expense, therefore ensures the impact of any disruptive event will be negligible.
The Company’s Key Performance Indicators for the current financial reporting year improved when
compared against those of the previous year. Interest income for 2023 increased by 290% compared to
the same period last year (€7.77m in 2023 compared to €1.99m in 2022). Favourable indicators are
evident, such as the number of delinquent loans has decreased, the LTV of the Company remained
consistent, the cash balance of the Company has also remained consistent for the year 2023 and the
allowance for impairment decreased by €245,649 (2022: decreased by €53,165).
During the financial year, the Group made no profit or loss (2022: €Nil).
Key performance indicators
2023
€
2022
€
Interest income
7,773,187
1,994,181
Interest expense
(7,107,130)
(2,948,614)
Financial Assets at amortised cost
173,224,094
202,206,220
Debt securities issued
177,059,370
206,245,719
Mortgage Portfolio:
2023
2022
Weighted average interest rate
4.796%
2.692%
Number of loans
6,238
6,973
Present LTV (outstanding loan amount/initial valuation)
39.4%
41.7%
Original LTV (initial loan amount/initial valuation)
73.2%
74.7%
Portfolio Trigger Event (maximum 4.5%): Arrears ratio
0.02%
0.04%
These consistent trends have continued into 2024 with the Company’s Key Performance Indicators up
to February 2024 appearing to be consistent with the same period last year. Favourable indicators are
evident, such as the decrease in the number of delinquent loans, down 15 when you compare figures
from February 2023 versus February 2024. The LTV of the Company has remained consistent, 39.4%
in February 2024 versus 41.7% in February 2023. Additionally, the cash balance of the Company has
remained consistent for the year - €9.12m as at February 2024 versus €9.04m as at February 2023. The
Directors expect the current level of activity to continue in the foreseeable future. The Company will
continue to utilise the collections from the fully amortised mortgage loan portfolio to redeem the
outstanding loan notes during the lifetime of the transaction.
4
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
DIRECTORS' REPORT (continued)
FINANCIAL YEAR ENDED 31 DECEMBER 2023
Going Concern
Based on the value of the assets, the limited recourse nature of the debt securities and the performance
of the Company during the financial year as well as post year-end, it is the Directors’ opinion the
going concern basis which underlies these financial statements continues to apply and will remain
valid for a period of at least 12 months from the date of signing.
Principal risks and uncertainties
In accordance with the requirement to analyse the principal risks and uncertainties facing the future
development of the Group, the following have been identified:
• Market risk including interest rate risk
• Credit risk
• Operational risk
• Liquidity and cashflow risk
• Concentration risk
The Directors have analysed these and other risks and appropriate methods are in place to manage and
control these risks and these are discussed in Note 21 to the financial statements.
In relation to credit risk, the Directors and Management (“Management” being the term used when
referring to the Administrator, Fund Manager, Trustees, Servicer, etc.) of the Company monitor the credit
quality of Citibank N.A, the Banker, as reported by Standard and Poors, Moody’s or Fitch. If the credit
quality or the financial position of the Banker deteriorates significantly, the Directors may consider
moving the cash holdings to another bank. Please refer to Note 21 of the financial statements for further
detail.
The Servicer monitors the loan to value ratios, mortgage arrears balances and related ratios and the
number of loans in arrears. The loan to value ratio is a mathematical calculation which expresses the
current principal balance of a mortgage as a percentage of the total initial value of the property. The
Directors of the Company place reliance on this information to manage the credit risk exposure of
Financial Assets at amortised cost.
31 December 2023
31 December 2022
Present loan to value ratio (percentage)
39.4%
41.7%
Mortgage loans in arrears (> 30 days)
€9,840,882
€10,612,457
No. of loans in arrears
305
320
Results and dividends
The Group’s trading results for the financial year, and the Group and Company's financial position at
the end of the financial year are shown in the financial statements. The Directors have not
recommended the payment of a dividend for the financial year ended 31 December 2023 (2022: €Nil).
Interim dividends paid during the financial year amounted to €Nil (2022: €Nil).
Directors, secretary and their interests
The Company had the following Directors as at 31 December 2023:
• Mr. Peter Blessing
• Mr. Alan Geraghty
There were no changes in the Directors or secretary during the financial year and up to the date of this
report.
5
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
DIRECTORS' REPORT (continued)
FINANCIAL YEAR ENDED 31 DECEMBER 2023
Directors, secretary and their interests (continued)
The Directors and secretary who held office on 31 December 2023 did not hold any shares in, or
debentures or loan stock of, the Company or Group on that date, at the beginning of the financial year
or during the financial year. There are no contracts or arrangements of any significance in relation to
the business of the Company in which the Director’s had any interests as defined in the Companies
Act 2014, at any time during the financial year ended 31 December 2023.
Political donations
The Electoral Act 1997 (as amended by the Electoral Amendment Political Funding Act, 2012)
requires companies to disclose all political donations over €200 in aggregate made during a financial
year. The Directors on enquiry have satisfied themselves that no such donations in excess of this
amount have been made by the Group or Company during the financial year ended 31 December
2023. This disclosure is made solely in relation to Irish political donations.
Significant subsequent events
There were no significant subsequent events since the financial year end up to the date of approval of
the financial statements requiring disclosure or amendment to these financial statements.
Accounting records
The Directors consider that they have complied with the requirements of Sections 281 to 285 of the
Companies Act 2014 with regard to adequate accounting records by employing service providers with
accounting personnel with the appropriate expertise. The accounting records of the Group and the
Company are held at the registered office, Fourth Floor, 3 George’s Dock, IFSC, Dublin 1.
Independent auditor
The independent auditor, Deloitte Ireland LLP, Chartered Accountants and Statutory Audit Firm, has
informed the Company that this will be the final year in which they will remain in office in accordance
with Section 383(2) of the Companies Act 2014. The independent auditor was appointed on 1 March
2017. A new independent auditor will be appointed subsequent to signing of the 2023 financial
statements.
Statement of relevant audit information
Each director at the date of approval of this report confirms that:
• so far as the directors are aware, there is no relevant audit information of which the Company’s
auditor is unaware; and
• the directors have taken all steps that they ought to have taken as a director in order to make
themselves aware of any relevant audit information and to establish that the Company’s
auditor is aware of this information.
Directors’ Compliance Statement
The Directors acknowledge that they are responsible for securing compliance by the Company of its
relevant obligations as set out in the Companies Act 2014 (the “Relevant Obligations”).
The Directors further confirm that there is a Compliance Policy Statement in place setting out the
Company’s policies which, in the Directors’ opinion, are appropriate to ensure compliance with the
Company’s Relevant Obligations.
6
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
DIRECTORS' REPORT (continued)
FINANCIAL YEAR ENDED 31 DECEMBER 2023
Directors’ Compliance Statement (continued)
The Directors also confirm that appropriate arrangements and structures are in place which, in the
Directors’ opinion, are designed to secure material compliance with the Company’s Relevant
Obligations. During the financial year ended 31 December 2023, the Directors conducted a review of
the arrangements and structures in place. In discharging their responsibilities under Section 225 of the
Companies Act 2014, the Directors relied on the advice of persons who the Directors believe have the
requisite knowledge and experience to advise the Company on compliance with its Relevant
Obligations.
Corporate Governance Statement
Introduction
The Company is subject to and complies with the Companies Act 2014 and the Listing Rules of
Euronext Dublin. The Company does not apply additional requirements in addition to those required
by the above. Each of the service providers engaged by the Company is subject to their own corporate
governance requirements.
Financial reporting process
The Board of Directors ("the Board") is responsible for establishing and maintaining adequate internal
control and risk management systems of the Company in relation to the financial reporting process.
Such systems are designed to manage rather than eliminate the risk of failure to achieve the
Company's financial reporting objectives and can only provide reasonable and not absolute assurance
against material misstatement or loss.
The Board has established processes regarding internal control and risk management systems to ensure
its effective oversight of the financial reporting process. These include appointing the Administrator,
Wilmington Trust SP Services (Dublin) Limited, to maintain the accounting records of the Group and
the Company independent of the Arranger and the Custodian. The Administrator is contractually
obliged to assist the Group and the Company to maintain adequate accounting records as required by
the corporate administration agreement. To that end, the Administrator performs reconciliations of its
records to those of the Arranger and the Custodian.
The Board evaluates and discusses significant accounting and reporting issues as the need arises. From
time to time, the Board also examines and evaluates the Administrator's financial accounting and
reporting routines and monitors and evaluates the external auditor’s performance, qualifications and
independence.
Risk assessment
The Board is responsible for assessing the risk of irregularities whether caused by fraud or error in
financial reporting and ensuring the processes are in place for the timely identification of internal and
external matters with a potential effect on financial reporting. The Board has also put in place
processes to identify changes in accounting rules and recommendations and to ensure that these
changes are accurately reflected in the Group and the Company's financial statements.
Control activities
The control structures in place within the Company, employed by the relevant service providers,
include appropriate division of responsibilities and specific control activities aimed at detecting or
preventing the risk of significant deficiencies in financial reporting for every significant account in the
financial statements and the related notes in the Company's annual report.
7
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
DIRECTORS' REPORT (continued)
FINANCIAL YEAR ENDED 31 DECEMBER 2023
Corporate Governance Statement (continued)
Monitoring
The Board has an annual process to ensure that appropriate measures are taken to consider and address
the shortcomings identified and measures recommended by the independent auditor.
Capital structure
No person has a significant direct or indirect holding of securities in the Company. No person has any
special rights of control over the Company's share capital. There are no restrictions on voting rights.
With regard to the appointment and replacement of Directors, the Company is governed by its Articles
of Association, the Companies Act 2014 and the Listing Rules of Euronext Dublin. The Articles of
Association themselves may be amended by special resolution of the shareholders.
Powers of Directors
The Board is responsible for managing the business affairs of the Company in accordance with the
Articles of Association. The Directors may delegate certain functions to the Administrator and other
parties, subject to supervision and direction by the Directors. The Directors have delegated the day to
day administration of the Company to the Administrator.
The Articles of Association provide that the Directors may exercise all the powers of the Company to
borrow money, to mortgage or charge its undertaking, property or any part thereof and may delegate
these powers to the Arranger.
Audit Committee
The sole business of the Company relates to the investment in a portfolio of mortgage receivables in
Portugal which is funded by issuing loan notes. Under Section 1551(11) (c) of the Companies Act
2014, such a Company may avail itself of an exemption from the requirement to establish an audit
committee.
Given the contractual obligations of the Administrator and the limited recourse nature of the securities
issued by the Company, the Board has concluded that there is currently no need for the Company to
have a separate audit committee in order for the Board to perform effective monitoring and oversight
of the internal control and risk management systems of the Company in relation to the financial
reporting process. Accordingly, the Company has availed itself of the exemption under Section
1551(11) (c) of the Companies Act 2014.
Signed on behalf of the board
_________________________ _________________________
MR. A. GERAGHTY MR. P. BLESSING
Director Director
Date: 30 April 2024
8
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
DIRECTORS’ RESPONSIBILITIES STATEMENT
The Directors are responsible for preparing the Directors’ Report and the Group and Company
financial statements in accordance with applicable law and regulations.
Irish company law requires the directors to prepare Group and Company financial statements for each
financial year. Under that law, the Directors have prepared the Group financial statements in
accordance with International Financial Reporting Standards (“IFRS”) as adopted by the EU and
applicable law, and have elected to prepare the Company financial statements in accordance with FRS
102 the Financial Reporting Standard applicable in the UK and Republic of Ireland issued by the
Financial Reporting Council.
Under the law, the Directors must not approve the Group and the Company financial statements unless
they are satisfied that they give a true and fair view of the assets, liabilities and financial position as at
the end of the financial year of the Group and the Company respectively and in the case of the Group
financial statements, the profit or loss of the Group for the financial year.
In preparing these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether the financial statements have been prepared in accordance with applicable
accounting standards and identify the standards in question, subject to any material departures
from those standards being disclosed and explained in the notes to the financial statements;
and
• prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Group and Company will continue in business.
The Directors are responsible for ensuring that the company keeps or causes to be kept adequate
accounting records which correctly explain and record the transactions of the company, enable at any
time the assets, liabilities, financial position and profit or loss of the company to be determined with
reasonable accuracy, enable them to ensure that the financial statements and directors’ report comply
with the Companies Act 2014, the Transparency (Directive 2004/109/EC) Regulations 2007 (as
amended) and the Listing Rules of Euronext Dublin and enable the financial statements to be audited.
They have general responsibility for taking such steps as are reasonably open to them to safeguard the
assets of the Group and of the Company, and to prevent and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Company’s website. Legislation in Ireland governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
9
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
DIRECTORS’ RESPONSIBILITIES STATEMENT (continued)
Responsibility Statement, in accordance with the Transparency Regulations
Each of the Directors, whose names and functions are listed on page 1 confirm that, to the best of each
person’s knowledge and belief:
• The Group and Company financial statements, prepared in accordance with IFRS as adopted
by the EU and FRS 102 respectively, give a true and fair view of the assets, liabilities and
financial position of the Group and Company at 31 December 2023 and the Group’s result for
the financial year then ended; and
• The Directors’ Report contained in the Annual Report includes a fair review of the
development and performance of the business and the position of the Group and Company,
together with a description of the principal risks and uncertainties that they face.
Signed on behalf of the board
_________________________ _________________________
MR. A. GERAGHTY MR. P. BLESSING
Director Director
Date: 30 April 2024
Continued on next page/
Deloitte Ireland LLP
Chartered Accountants &
Statutory Audit Firm
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
MAGELLAN MORTGAGES NO. 3 PLC
Report on the audit of the financial statements
Opinion on the financial statements of Magellan Mortgages No. 3 PLC (the ‘company’)
In our opinion the group and company financial statements:
give a true and fair view of the assets, liabilities and financial position of the group and company as at 31 December 2023
and of the result of the group for the financial year then ended; and
have been properly prepared in accordance with the relevant financial reporting frameworks and, in particular, with the
requirements of the Companies Act 2014 and, as regards the group financial statements, Article 4 of the IAS Regulation.
The financial statements we have audited comprise:
The group financial statements:
the Consolidated Statement of Comprehensive Income;
the Consolidated Statement of Financial Position;
the Consolidated Statement of Changes in Equity;
the Consolidated Statement of Cash Flow; and
the related notes 1 to 25, including a summary of material accounting policies as set out in note 5.
The company financial statements:
the Statement of Financial Position;
the Statement of Changes in Equity; and
the related notes 1 to 25, including a summary of material accounting policies as set out in note 5.
The relevant financial reporting framework that has been applied in the preparation of the group financial statements is the
Companies Act 2014 and International Financial Reporting Standards as adopted by the European Union (“IFRS”) (“the relevant
financial reporting framework”). The relevant financial reporting framework that has been applied in the preparation of the company
financial statements is the Companies Act 2014 and FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of
Ireland’ issued by the Financial Reporting Council (“the relevant financial reporting framework”).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our
responsibilities under those standards are described below in the “Auditor's responsibilities for the audit of the financial statements”
section of our report.
We are independent of the group and company in accordance with the ethical requirements that are relevant to our audit of the
financial statements in Ireland, including the Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority
(IAASA), as applied to public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
/Continued from previous page
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
MAGELLAN MORTGAGES NO. 3 PLC
Continued on next page/
Summary of our approach
Key audit matters
The key audit matters that we identified in the current year were:
Valuation of financial assets at amortised cost – Impairment calculation
Within this report, any new key audit matters are identified with and any key audit matters which
are the same as the prior year identified with .
Materiality
The group materiality that we used in the current year was €1.77m which was determined on the
basis of 1% of Debt securities issued.
The company materiality that we used in the current year was €1.77m which was determined on the
basis of 1% of Debt securities issued.
Scoping
We focused our audit scope, and the extent of our testing, based on our assessment of the risks of
material misstatement and of the materiality determined.
Significant changes in
our approach
There were no significant changes to our approach which we feel require disclosure.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the group and company’s ability to continue to adopt the going concern basis of
accounting included:
As part of our risk assessment procedures, obtaining an understanding of the director’s process for determining the
appropriateness of the going concern basis of accounting;
Holding discussions with management on the directors’ going concern assessment, including understanding the impact of
market activity and other external factors;
Challenging the directors’ conclusions on the going concern basis of accounting by assessing:
o the current year financial performance and the year-end financial position of the company;
o the limited recourse nature of the company’s financial liabilities, and the operation of the priorities of payment
during the financial year;
o the redemption clauses applicable to the financial liabilities; and
Evaluating the adequacy of the relevant disclosures made in the financial statements
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the group and company's ability to continue as a going concern for a period
of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of
this report.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current financial year and include the most significant assessed risks of material misstatement (whether or not due
to fraud) we identified, 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 were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
/Continued from previous page
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
MAGELLAN MORTGAGES NO. 3 PLC
Continued on next page/
Valuation of financial assets at amortised cost – Impairment calculation
Key audit matter
description
For the financial year ended 31 December 2023 the value of the financial assets at amortised cost is
€173,224,094.
The valuation of such financial assets at amortised cost is considered a key audit matter as they are
valued at amortised cost and need to be assessed for impairment at each reporting date.
The determination of an appropriate impairment charge requires a significant amount of management
judgment over key assumptions and relies on available data.
There is a risk that provisions for impairment of the financial assets at amortised cost do not represent
an appropriate estimate of the losses to be incurred.
Refer also to notes 5, 13 and 21 in the financial statements.
How the scope of our
audit responded to the
key audit matter
With the assistance of the component audit team, the following procedures were performed over the
valuation of financial assets at amortised cost:
We obtained an understanding and assessed the design and implementation of the key
controls that have been implemented over the valuation process of the financial assets at
amortised cost;
We challenged whether the valuation policy adopted for the financial instruments is in line
with IFRS;
We obtained direct confirmation by Banco Comercial Português S.A. (BCP) regarding the
composition of the mortgage loan portfolio as at 31 December 2023 including outstanding
capital, accrued interest, overdue capital and interest and impairment provisions;
We performed an analysis of the reconciliation between the accounting records of the group
and the information contained in the mortgage loan portfolio received from BCP, including
information regarding the changes in portfolio and the amounts transferred by BCP to the
group bank accounts;
We gained an understanding of the expected credit loss model (per IFRS 9) used to calculate
the impairment. Understanding the inputs into the model and controls in place in relation to
the calculation. We tested the inputs into the expected credit loss model including the
Probability of Default, Exposure at Default and Loss Given Default;
We assessed the classification of loans as stage 1, stage 2 or stage 3 (per IFRS 9);
We performed a recalculation of the loan impairment losses calculated by the Originator on
a sample basis in order to conclude about its reasonableness;
We performed analytical procedures on the general provision for loan losses;
We tested the information provided by the Originator on a sample basis; and
We obtained from the Originator the loan portfolio information about credit exposures,
impairment, risk parameters and technical documentation regarding the impairment model.
/Continued from previous page
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
MAGELLAN MORTGAGES NO. 3 PLC
Continued on next page/
Our audit procedures relating to these matters were designed in the context of our audit of the financial statements as a whole, and
not to express an opinion on individual accounts or disclosures. Our opinion on the financial statements is not modified with respect
to any of the risks described above, and we do not express an opinion on these individual matters.
Our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of
our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements
Company financial statements
Materiality
€1.77m (2022 : €2.06m)
€1.77m (2022 : €2.06m)
Basis for
determining
materiality
1% of Debt securities issued
1% of Debt securities issued
Rationale for the
benchmark
applied
We have considered the Debt securities issued to be
the critical component for determining materiality
because the main objective of the company is to
provide investors with a long term risk adjusted
return. We have considered quantitative and
qualitative factors such as understanding the entity
and its environment, history of misstatements,
complexity of the company, reliability of control
environment.
We have considered the Debt securities issued to be
the critical component for determining materiality
because the main objective of the company is to
provide investors with a long term risk adjusted
return. We have considered quantitative and
qualitative factors such as understanding the entity
and its environment, history of misstatements,
complexity of the company, reliability of control
environment.
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and
undetected misstatements exceed the materiality for the financial statements as a whole.
Debt securities issued
€177.06m
Group materiality €1.77m
Component materiality
€1.77m
Reporting threshold to
those charged with
governance €0.09m
Debt securities issued
Group Materiality
/Continued from previous page
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
MAGELLAN MORTGAGES NO. 3 PLC
Continued on next page/
Group financial statements
Company financial statements
Performance
materiality
80% (2022: 80%) of group materiality
80% (2022: 80%) of company materiality
Basis and rationale
for determining
performance
materiality
In determining performance materiality, we considered the following factors:
our understanding of the company;
the quality of the company's Internal Control environement and whether we are able to rely on
controls; and
our expectations in relation to misstatements in the current period.
We agreed with the Board of Directors that we would report to them all audit differences in excess of €0.09m (2022 : €0.1m) as well
as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Board of
Directors on disclosure matters that we identified when assessing the overall presentation of the financial statements.
An overview of the scope of our audit
Our audit is a risk based approach taking into account the structure of the company, types of financial instruments, the involvement
of the third party service providers, the accounting processes and controls in place, and the industry in which the company
operates.
We have conducted our audit based on the books and records maintained by the corporate administrator, Wilmington Trust SP
Services (Dublin) Limited. We focused our audit scope, and the extent of our testing, based on our assessment of the risks of
material misstatement and of the materiality determined. Audit work to respond to the risks of material misstatement was
performed directly by the audit engagement team.
Other information
The other information comprises the information included in the Directors’ Report and Audited Financial Statements, other than the
financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the
Directors’ Report and Audited Financial Statements.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in
our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify
such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view and otherwise comply with the Companies Act 2014, and for
such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
/Continued from previous page
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
MAGELLAN MORTGAGES NO. 3 PLC
Continued on next page/
In preparing the financial statements, the directors are responsible for assessing the group and company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group and company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of the financial statements is located on IAASA’s website at:
https://iaasa.ie/publications/description-of-the-auditors-responsibilities-for-the-audit-of-the-financial-statements. This description
forms part of our auditor’s report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below.
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws
and regulations, we considered the following:
the nature of the industry and sector, control environment and business performance including the design of the
Company;
results of our enquiries of management, and the Board of Directors about their own identification and assessment of the
risks of irregularities;
any matters we identified having obtained and reviewed the company’s documentation of their policies and procedures
relating to:
o identifying, evaluating and complying with laws and regulations and whether they were aware of any instances
of non-compliance;
o detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or
alleged fraud;
o the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
the matters discussed among the audit engagement team and relevant internal specialists, including valuations regarding
how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and
identified the greatest potential for fraud in the following areas:
Revenue recognition; and
Valuation of financial assets at amortised cost- Impairement calculation
In common with all audits under ISAs (Ireland), we are also required to perform specific procedures to respond to the risk of
management override.
We also obtained an understanding of the legal and regulatory frameworks that the group operates in, focusing on provisions of those
laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements.
The key laws and regulations we considered in this context included the Companies Act 2014 and the relevant tax legislation.
/Continued from previous page
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
MAGELLAN MORTGAGES NO. 3 PLC
Continued on next page/
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but
compliance with which may be fundamental to the group’s ability to operate or to avoid a material penalty. These included the listing
rules of Euronext Dublin.
Audit response to risks identified
As a result of performing the above, we identified Valuation of financial assets at amortised cost- Impairment calculation as a key
audit matter related to the potential risk of fraud or non-compliance with laws and regulations. The key audit matters section of our
report explains the matter in more detail and also describes the specific procedures we performed in response to that key audit
matter.
In addition to the above, our procedures to respond to risks identified included the following:
o reviewing the financial statement disclosures and testing to supporting documentation to assess compliance
with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
o enquiring of management, legal counsel concerning actual and potential litigation and claims;
o performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of
material misstatement due to fraud;
o in addressing the risk of fraud through management override of controls, testing the appropriateness of journal
entries and other adjustments; assessing whether the judgements made in making accounting estimates are
indicative of a potential bias; and evaluating the business rationale of any significant transactions that are
unusual or outside the normal course of business.
o in addressing the risk of fraud in revenue recognition, recalculating the interest income by reference to the
underlying mortgage portfolio balance and tracing the interest income balance to the investor reports on a
sample basis.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team
members including internal specialists and significant component audit teams, and remained alert to any indications of
fraud or non-compliance with laws and regulations throughout the audit.
Report on other legal and regulatory requirements
Opinion on other matters prescribed by the Companies Act 2014
Based solely on the work undertaken in the course of the audit, we report that:
We have obtained all the information and explanations which we consider necessary for the purposes of our audit.
In our opinion the accounting records of the company were sufficient to permit the financial statements to be readily and
properly audited.
The company balance sheet are in agreement with the accounting records.
In our opinion the information given in the directors' report is consistent with the financial statements and the directors’
report has been prepared in accordance with the Companies Act 2014.
Corporate Governance Statement required by the Companies Act 2014
We report, in relation to information given in the Corporate Governance Statement on pages 6 to 7 that:
In our opinion, based on the work undertaken during the course of the audit, the information given in the Corporate Governance
Statement pursuant to subsection 2(c) of section 1373 of the Companies Act 2014 is consistent with the company’s statutory financial
statements in respect of the financial year concerned and such information has been prepared in accordance with the Companies
Act 2014.
Based on our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not
identified any material misstatements in this information.
/Continued from previous page
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
MAGELLAN MORTGAGES NO. 3 PLC
Matters on which we are required to report by exception
Based on the knowledge and understanding of the group and company and its environment obtained in the course of the audit, we
have not identified material misstatements in the directors' report.
We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to report to you if, in our opinion,
the disclosures of directors’ remuneration and transactions specified by law are not made.
Other matters which we are required to address
We were appointed by the Board of Directors on 1 March 2017 to audit the financial statements for the financial year 31 December
2017. The period of total uninterrupted engagement including previous renewals and reappointment of the firm is 7 years, covering
the years ending 31 December 2017 to 31 December 2023.
The non-audit services prohibited by IAASA’s Ethical Standard were not provided and we remained independent of the parent
company in conducting the audit.
Our audit opinion is consistent with the additional report to the Board of Directors we are required to provide in accordance with ISA
(Ireland) 260.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Section 391 of the Companies Act 2014. Our
audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we
have formed.
John McCarroll
For and on behalf of Deloitte Ireland LLP
Chartered Accountants and Statutory Audit Firm
Deloitte & Touche House, 29 Earlsfort Terrace, Dublin 2
30/04/2024
18
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
Year Ended
Year Ended
31 December
31 December
2023
2022
OPERATING INCOME
Note
€
€
Interest income
6
7,773,187
1,994,181
Interest expense
7
(7,107,130)
(2,948,614)
Net (loss)/gain from derivative financial instruments
8
(471,847)
1,387,550
194,210
433,117
Administrative expenses
9
(439,779)
(486,039)
Decrease in allowance for impairment
13
245,649
53,165
OPERATING PROFIT BEFORE TAXATION
80
243
Tax on profit on ordinary activities
10
(80)
(243)
PROFIT FOR THE FINANCIAL YEAR
-
-
Other comprehensive income
-
-
TOTAL COMPREHENSIVE INCOME FOR THE
FINANCIAL YEAR
-
-
19
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December
31 December
2023
2022
ASSETS
Note
€
€
Financial assets measured at amortised cost
Financial Assets at amortised cost
13
173,224,094
202,206,220
Other receivables
14
377,190
583,903
Cash and cash equivalents
12
15,315,750
14,988,285
Financial assets at fair value through profit or loss
188,917,034
217,778,408
Derivative assets
11
799,934
2,986,122
TOTAL ASSETS
189,716,968
220,764,530
LIABILITIES
Financial liabilities falling due within one year
Other payables
15
12,617,598
14,478,811
12,617,598
14,478,811
Financial liabilities: Due after one year
Debt securities issued
16
177,059,370
206,245,719
177,059,370
206,245,719
TOTAL LIABILITIES
189,676,968
220,724,530
EQUITY
Share capital
19
40,000
40,000
Retained earnings
-
-
TOTAL EQUITY
40,000
40,000
TOTAL LIABILITIES AND EQUITY
189,716,968
220,764,530
These financial statements were approved by the Board of Directors on 30 April 2024 and are signed
on their behalf by:
_________________________ _________________________
MR. A. GERAGHTY MR. P. BLESSING
Director Director
20
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December
31 December
2023
2022
Note
€
€
ASSETS
Non-current assets
Investment in subsidiary undertaking
13
177,967,828
207,515,609
177,967,828
207,515,609
Current assets
Other receivables
14
1,765,122
1,109,720
Derivative assets
11
799,934
2,986,122
Cash and cash equivalents
12
9,117,941
9,043,126
11,682,997
13,138,968
TOTAL ASSETS
189,650,825
220,654,577
LIABILITIES
Financial liabilities falling due within one year
Other payables
15
12,551,455
14,368,858
12,551,455
14,368,858
Financial liabilities: Due after one year
Debt securities issued
16
177,059,370
206,245,719
177,059,370
206,245,719
TOTAL LIABILITIES
189,610,825
220,614,577
EQUITY
Share capital
19
40,000
40,000
Retained earnings
-
-
TOTAL EQUITY
40,000
40,000
TOTAL LIABILITIES AND EQUITY
189,650,825
220,654,577
The profit for the financial year ended 31 December 2023 for the Company was €Nil (2022: €Nil).
These financial statements were approved by the Board of Directors on 30 April 2024 and are signed
on their behalf by:
_________________________ _________________________
MR. A. GERAGHTY MR. P. BLESSING
Director Director
21
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FINANCIAL YEAR ENDED 31 DECEMBER 2023
Share
Retained
Capital
Earnings
Total
€
€
€
Balance as at 1 January 2023
40,000
-
40,000
Profit for the year
-
-
-
Other comprehensive income
-
-
-
Total comprehensive income for the year
-
-
-
Balance as at 31 December 2023
40,000
-
40,000
Balance as at 1 January 2022
40,000
-
40,000
Profit for the year
-
-
-
Other comprehensive income
-
-
-
Total comprehensive income for the year
-
-
-
Balance as at 31 December 2022
40,000
-
40,000
COMPANY STATEMENT OF CHANGES IN EQUITY
FINANCIAL YEAR ENDED 31 DECEMBER 2023
Share
Capital
Retained
Earnings
Total
€
€
€
Balance as at 1 January 2023
40,000
-
40,000
Profit for the year
-
-
-
Other comprehensive income
-
-
-
Total comprehensive income for the year
-
-
-
Balance as at 31 December 2023
40,000
-
40,000
Balance as at 1 January 2022
40,000
-
40,000
Profit for the year
-
-
-
Other comprehensive income
-
-
-
Total comprehensive income for the year
-
-
-
Balance as at 31 December 2022
40,000
-
40,000
22
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
CONSOLIDATED STATEMENT OF CASH FLOW
FINANCIAL YEAR ENDED 31 DECEMBER 2023
Year Ended
Year Ended
31 December
31 December
2023
2022
Note
€
€
CASH FLOWS FROM OPERATING ACTIVITIES
Operating results before taxation
80
243
Adjustments for
(Decrease) in allowance for impairment of loans
13
(245,649)
(53,165)
Interest income
6
(7,773,187)
(1,994,181)
Interest expense
7
7,105,541
2,945,516
Amortisation of issue cost
7
1,589
3,098
Unrealised loss/(gain) on fair value of interest rate swaps
1,673,645
(181,235)
762,019
720,276
Decrease/(Increase) in other receivables
206,712
(401,845)
Decrease in other payables
(47,049)
(69,122)
Tax paid
(80)
(243)
Net cash inflow from operating activities
921,602
249,066
Cash flows from investing activities
Principal receipts from mortgage receivables
13
29,227,775
28,843,618
Interest received
8,285,731
1,812,804
Net cash inflow from investing activities
37,513,506
30,656,422
Cash flows from financing activities
Redemption of debt securities issued
16
(29,187,938)
(27,848,358)
Interest paid
(8,919,706)
(2,352,784)
Net cash outflow from financing activities
(38,107,644)
(30,201,142)
Net increase in cash and cash equivalents
327,465
704,346
Cash and cash equivalents 1 January
12
14,988,285
14,283,939
Cash and cash equivalents 31 December
12
15,315,750
14,988,285
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
23
1. General
Magellan Mortgages No.3 Public Limited Company (the “Company”) was incorporated in Ireland
on 11 May 2005 as a public limited company with registered number 401997. The Company’s
registered address is Fourth Floor, 3 George’s Dock, IFSC, Dublin 1.
The Company has a subsidiary as at 31 December 2023 and 31 December 2022 and, therefore, the
Company has prepared consolidated financial statements incorporating the subsidiary’s results.
The Company’s ownership is in the following subsidiary:
Name of Subsidiary
Country of
Registered
Nature of the
% Ownership
Incorporation
Address
Business
Fundo de Titularizacao
Portugal
SGFTC, SA
Securitisation vehicle
100% of the
de Creditos Magellan
Rua Castilho, 20
investing in a
units issued by
Tres (the “Fund”)
Lisbon, Portugal
portfolio of mortgage
the Fund
receivables in
Portugal
2. Basis of preparation
(a) Statement of Compliance
The Group financial statements have been prepared in accordance with International Financial
Reporting Standards (“IFRS”) and its interpretations as adopted by the EU. The financial
statements are also prepared in accordance with the Companies Act 2014, the rules applying to
debt listed on Main Securities Market of Euronext Dublin and Article 4 of the IAS Regulation.
The Company financial statements have been prepared in accordance with FRS 102 “The Financial
Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) as issued by the
Financial Reporting Council and the Companies Act 2014.
The Group’s and Company’s financial statements for the financial year ended 31 December 2023
and 31 December 2022 have been prepared on a going concern basis. The Directors anticipate
that the Financial Assets at amortised cost will continue to generate enough cash flow on an on-
going basis to meet the Group and the Company’s liabilities as they fall due. The Notes in issue
as at 31 December 2023 will mature in 2058. For these reasons, the Directors believe that the
going concern basis is appropriate.
In accordance with Section 304(2) of the Companies Act 2014, a separate statement of profit and
loss for the Company has not been presented. A single statement approach is adopted in
presenting a statement of comprehensive income. Also, an exemption has been taken in relation to
not being required to present a cash flow statement for the Company.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
24
2. Basis of preparation (continued)
(b) Basis of consolidation
The Group financial statements include the financial statements of the Company and its
subsidiary undertaking made up to the end of the financial year in accordance with IFRS.
A subsidiary is an entity controlled by the Company in accordance with IFRS 10 “Consolidated
Financial Statements” (“IFRS 10”). The financial statements of the subsidiary are included in the
consolidated financial statements from the date that control commences until the date that control
ceases. Financial statements of the subsidiary are made up to the reporting date.
All significant intra-group transactions and balances are eliminated on consolidation.
To meet the definition of a subsidiary under the Companies Act 2014 the Fund (the “lower
company”) is considered a subsidiary of Company (the “superior company”) if per section 7
(2)(b) the superior company has the right to exercise a dominant influence over it (i) by virtue of
provisions contained in the lower company’s constitution; or (ii) by virtue of a control contract.
To meet the definition of a subsidiary under the single control model of IFRS 10, the investor has
to control the investee. Control involves power, exposure to variability of returns and a linkage
between the two:
(i) The investor has existing rights that give it the ability to direct the relevant activities that
significantly affect the investee’s returns;
(ii) The investor has exposure or rights to variable returns from its involvement with the
investee; and
(iii) The investor has the ability to use its power over the investee to affect the amount of the
investor’s returns.
For the purposes of making this IFRS 10 assessment of power in (i) above, the ‘relevant
activities’ are the credit management activities of the mortgage asset portfolio as these are the
activities that significantly affect investor returns. These activities are performed by the Servicer,
as agent, effectively for the Company. The Fund consists of a fixed pool of assets and is not
permitted to acquire any additional assets, other than in the event of asset substitutions.
Accordingly, the deal structure is not a revolving transaction and therefore no decisions on re-
investment arise.
The relevant activities of the Fund are considered the key decisions that need to be made
regarding the mortgage asset portfolio, in particular the managing of the credit risk arising from
the mortgage receivables including the enforcement procedures to be implemented in relation to
defaulted loans. Power over the relevant activities is determined by contractual agreements
between the Fund and the Servicer and in accordance with the Regulations of funds in Portugal.
The Fund has a narrow and well-defined objective and is operated for the sole benefit of the
Unitholders. Applying the principal versus agent guidance in IFRS 10, the Directors consider that
the Servicer is an agent acting on behalf of the Company and that the Company has effectively
delegated power over the relevant activities when it made its investment in the Units of the Fund.
Furthermore, IFRS 10 requires that where an entity is a parent in line with the Standard, it
assesses whether it meets the definition of an Investment Entity (“IE”). If the parent meets the IE
definition, it shall not consolidate its subsidiary: instead, it is required to measure its investment
in a subsidiary at fair value through profit or loss.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
25
2. Basis of preparation (continued)
(b) Basis of consolidation (continued)
In determining whether the Company met the definition of an IE as set out in IFRS 10, the
Directors considered all facts and circumstances of the Company, including its purpose and
design.
The Directors are of the opinion that:
• The Company is a parent as the Fund qualifies as a subsidiary under IFRS 10; and
• The Company does not qualify as an IE as it does not meet one of the three mandatory
characteristics, namely that which is set out in IFRS 10.27(c) requiring the measurement
and evaluation of the performance of substantially all of its investment on a fair value
basis. The Company invests all monies received from its investors via its subsidiary, the
Fund. The Fund has invested in a portfolio of mortgage loan assets which are then
managed to earn returns for the investors. The Servicer does not obtain or report fair
value information to the Group with a view to use that as a primary measurement
attribute to evaluate the performance of the Financial Assets at amortised cost and
making investment decisions. The Company does not provide its investors with fair value
information on a routine basis other than as required by IFRS 13 in its annual financial
statements. Financial Assets at amortised cost are measured on an amortised cost basis as
set out in Note 5 (c) of the Group’s accounting policy.
3. Operating Segments
The standard on segmental reporting puts emphasis on the “management approach” to reporting on
operating segments. An operating segment is a component of the Company that engages in
business activities from which it may earn revenue and incur expenses. The Group is engaged as
one segment which involves investment in a portfolio of mortgage receivables in Portugal financed
through the issue of debt securities. The Directors perform regular reviews of the operating results
of the Group and make decisions using financial information at the Group level considering it as
one entity. Accordingly, the Directors believe that the Company has only one reportable operating
segment. The Directors are responsible for ensuring that the Company carries out business
activities in line with transaction documents. They may delegate some of the day-to-day
management of the business to other parties both internal and external to the Company. The
decisions of such parties are reviewed on a regular basis to ensure compliance with the policies and
legal responsibilities of the Directors.
4. New standards, amendments or interpretations
The following new standards, amendments and annual improvements became effective as of 1
January 2023:
• Amendment to IAS 8: Accounting policies, Changes in Accounting Estimates and
Errors: Definition of Accounting Estimates (issued on 12 February 2021)
• Amendments to IAS 12: Income Taxes: Deferred Tax related to Assets and Liabilities
arising from a Single Transaction
• Amendments to IAS 12 Income taxes: International Tax Reform – Pillar Two Model
Rules (issued on 23 May 2023)
• Amendment to IFRS 17: Insurance Contracts - Initial Application of IFRS 17 and IFRS
9 – Comparative Information
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
26
4. New standards, amendments or interpretations (continued)
• IFRS 17 Insurance Contracts (issued on 18 May 2017); including Amendments to IFRS
17 (issued on 25 June 2020)
• Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting
Policies
The adoption of the new standards, interpretations and amendments have had no material impact
on the financial statements of the Group in the year of the initial application.
Standards issued but not yet effective
The standards and interpretations that are issued, but not yet effective, up to the date of issuance of
the Group’s financial statements are disclosed below.
Standards,
Narrative
Effective Date:
Interpretations
Annual periods
and amendments
beginning on or
after
IFRS 16 Leases
Lease Liability in a Sale and Leaseback
1 January 2024
IAS 1 Presentation of
Financial Statements
Classification of Liabilities as Current or Non-current
1 January 2024
Amendments to IAS 21
The Effects of Changes in Foreign Exchange Rates: Lack of
1 January 2024
Exchangeability (issued on 15 August 2023)
Amendments to IAS 7 &
Disclosures: Supplier Finance Arrangements (issued on 25
1 January 2024
IFRS 7
May 2023)
Amendments to IFRS 10
& IAS 28
Sales or Contribution of Assets between an Investor and its
Associate or Joint Venture
**
**In December 2015, the IASB postponed the effective date of this amendment indefinitely
pending the outcome of its research project on the equity method of accounting.
The Directors anticipate that the adoption of the new standards, interpretations and amendments
that were in issue at the date of authorisation of these financial statements, but not yet effective,
will have no material impact on the financial statements of the Group in the year of the initial
application.
5. Summary of accounting policies
The accounting policies set out below have been applied consistently in preparing the Group’s and
Company’s financial statements for the financial year ended 31 December 2023 and the
comparative information presented in these financial statements for the financial year ended 31
December 2022.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
27
5. Summary of accounting policies (continued)
(a) Functional and presentation currency
These financial statements are presented in euro which is the Company’s and its subsidiary’s
functional currency. Functional currency is the currency of the primary economic environment in
which the entity operates. The issued share capital of the Company and its subsidiary is
denominated in euro and the debt securities issued by the Company are also denominated in euro.
The Directors of the Company believe that the euro most faithfully represents the economic effects
of the underlying transactions, events and conditions. All figures presented in euro are rounded to
the nearest euro.
(b) Financial instruments
The financial instruments held by the Group and Company include the following:
i. Financial Assets at amortised cost
ii. Derivative financial instruments
iii. Other receivables
iv. Debt securities issued
v. Other payables
Categorisation
The Group and Company measure derivative financial instruments at fair value through profit or
loss. Financial Assets at amortised cost and debt securities issued are measured at amortised
cost. Other receivables and other payables are also measured at amortised cost.
Recognition and initial measurement
The Group initially recognises all financial assets and liabilities on the trade date at which the
Group becomes a party to the contractual provisions of the instruments adjusted for initial direct
costs in the case of instruments not being subsequently measured at fair value through profit or
loss. Purchases and sales of financial assets and financial liabilities are recognised using trade date
accounting.
From trade dates, any gains and losses arising from changes in fair value of the financial assets or
financial liabilities measured at fair value through profit or loss are recorded through profit or loss
in the statement of comprehensive income. Financial assets and financial liabilities not categorised
as at fair value through profit or loss are subsequently measured at amortised cost.
Derecognition
The Group derecognises a financial asset when the contractual rights to the cash flows from the
asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in
a transaction in which substantially all the risks and rewards of ownership of the financial asset are
transferred, and does not retain control of the financial asset. Any interest in transferred financial
assets that is created or retained by the Group is recognised as a separate asset or liability. The
Group derecognises a financial liability when its contractual obligations are discharged or
cancelled or expired.
Loans written-off
The Group write off a loan when it does not have reasonable expectations of recovering a
financial asset in its entirety or a portion thereof. Write-offs occur after all the recovery actions
developed by the Group prove to be fruitless. There have been no write-offs to date.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
28
5. Summary of accounting policies (continued)
(b) Financial instruments (continued)
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement
of financial position when, and only when, the Group has a current legally enforceable right to set
off the amounts and intends either to settle on a net basis or to realise the asset and settle the
liability simultaneously. Income and expenses are presented on a net basis only when permitted
by the accounting standards, or for gains and losses arising from a group of similar transactions.
Fair value measurement
‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date in the principal or, in its
absence, the most advantageous market to which the Group has access at that date. The fair value
of a liability reflects its non-performance risk.
When available, the Group measures the fair value of an instrument using the quoted price in an
active market for that instrument. A market is regarded as ‘active’ if transactions for the asset or
liability take place with sufficient frequency and volume to provide pricing information on an
ongoing basis. The Group measures instruments quoted in an active market at the mid-price.
If there is no quoted price in an active market, the Group uses valuation techniques that maximise
the use of relevant observable inputs and minimise the use of unobservable inputs. The fair value
of the financial instruments may be estimated by the directors based on values obtained from
brokers and specialist pricing vendors who may use a variety of valuation techniques such as
discounted cash flow techniques, option pricing models or any other valuation techniques that
provides an estimate of prices obtained should the investment be traded. If other independent
prices were available for the financial instruments, the valuation may be different to those
presented and those differences could be material. Valuation techniques include net present value
techniques, the discounted cash flow method, comparison to similar instruments for which
market observable prices exist, and valuation models. The Group and Company uses widely
recognised valuation models for determining the fair value of common and simpler financial
instruments like interest rate swaps, for which inputs into models are market observable. The
chosen valuation technique incorporates all of the factors that market participants would take into
account in pricing a transaction.
(c) Financial Assets at amortised cost
A financial asset is measured at amortised cost if it meets both of the following conditions and is
not designated as at FVTPL:
- it is held within a business model whose objective is to hold assets to collect contractual
cash flows; and
- its contractual terms give rise on specified dates to cash flows that are solely payments
of principal and interest (“SPPI”).
They are classified as Financial Assets at amortised cost and are initially measured at fair value
adjusted for initial direct costs and subsequently measured at amortised cost adjusted for any
allowance for impairment.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
29
5. Summary of accounting policies (continued)
(c) Financial Assets at amortised cost (continued)
The amortised cost of the financial asset is the amount at which the financial asset is measured at
initial recognition, minus principal repayments, plus or minus the cumulative amortisation using
the effective interest rate method of any difference between the initial amount recognised and the
maturity amount minus any reduction for impairment. Impairment allowances are made to reduce
the value of the loans and the notes. Write-offs occur where there is no longer any likelihood of
further recovery of the balance.
(d) Investment in subsidiary undertaking
The investment in subsidiary undertaking represents an investment in Fundo de Titularização de
Créditos Magellan Dois (FTC) (the “Fund”) which is principally backed by a pool of mortgage
receivables. The investment in the subsidiary is held at cost less impairment.
The assets of the Fund comprise of cash at bank, interest receivable and the mortgage loans less
allowance for impairment. To the extent mortgages are prepaid and repaid, these repayments are
used to repay the Company’s unit investment.
(e) Impairment
The impairment model adopted under IFRS 9 requires the recognition of expected credit losses on
all financial assets measured at amortised cost or at fair value through other comprehensive income
(“FVOCI“).
In particular, IFRS 9:
– Requires more timely recognition of expected credit losses using a three-stage approach.
For financial assets where there has been no significant increase in credit risk since
origination, an allowance for 12 months expected credit losses is required. For financial
assets where there has been a significant increase in credit risk or where the asset is credit
impaired, an allowance for lifetime expected credit losses is required;
– The assessment of whether credit risk has increased significantly since origination is
performed for each reporting period by considering the change in risk of default occurring
over the remaining life of the financial instrument, rather than by considering an increase
in expected credit losses;
– The assessment of credit risk, and the estimation of expected credit losses, are required to
be unbiased and probability weighted. They should incorporate all available information
which is relevant to the assessment, including information about past events, current
conditions and reasonable and supportable forecasts of future events and economic
conditions at the reporting date. In addition, the estimation of expected credit losses should
take into account the time value of money. As a result, the recognition and measurement of
impairment is now more forward-looking. The resulting credit impairment charge will tend
to be more volatile. It will also tend to result in an increase in the total level of credit loss
allowances, since all financial assets will be assessed for at least 12 month expected credit
losses and the population of financial assets to which lifetime expected credit losses apply
is likely to be larger.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
30
5. Summary of accounting policies (continued)
(e) Impairment (continued)
Expected credit losses
Expected credit losses are estimates of credit losses that are determined as follows:
Financial assets with no signs of impairment at the reporting date: the present value of the
difference between the contractual cash flows and the cash flows that the Group expects to receive;
• Financial assets with impairment at the reporting date: the difference between the gross
book value and the present value of the estimated cash flows;
• Unused credit commitments: the present value of the difference between the resulting
contractual cash flows if the commitment is made and the cash flows that the Group
expects to receive;
• Financial guarantees: the current value of the expected repayments less the amounts that
the Group expects to recover.
The main inputs used to measure ECLs basis should include the following variables:
• Probability of Default – PD;
• Loss Given Default – LGD; and
• Exposure at Default – EAD.
These parameters are obtained through internal statistical models and other relevant historical data,
considering the already existing regulatory models adapted to the requirements of IFRS 9. The
Group also uses models to forecast the evolution of the most relevant parameters to the expected
credit losses, namely probability of default, which incorporate forward-looking information. This
incorporation of forward-looking information is carried out in the relevant elements considered for
the calculation of expected credit losses.
PDs are estimated based on a certain historical period and will be calculated based on statistical
models. These models are based on internal data including both quantitative and qualitative
factors. If there is a change in the risk of the counterparty or exposure, the estimate of the
associated PD will also vary. The PDs will be calculated considering the contractual maturities of
exposures.
The risk grades are a highly relevant input for determining the PDs associated with each exposure.
Group collects performance and default indicators about their credit risk exposures with analysis
by types of customers and products.
LGD is the magnitude of the loss that is expected to occur if exposure goes into default. The
Group estimates the LGD parameters based on the historical recovery rates after entry into
counterparty defaults. The LGD models consider the associated collaterals, the counterparty
activity sector, the default time, as well as the recovery costs. In the case of contracts secured by
real estate, it is expected that the LTV (loan-to-value) ratios are a parameter of high relevance in
the determination of LGD.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
31
5. Summary of accounting policies (continued)
(e) Impairment (continued)
The EAD represents the expected exposure if the exposure and / or customer defaults. The Group
obtains the EAD values from the counterparty's current exposure and potential changes to its
current value as a result of the contractual conditions, including amortizations and prepayments.
For commitments and financial guarantees, the value of the EAD will consider both the amount of
credit used and the expectation of future potential value that may be used in accordance with the
agreement.
As described above, with the exception of financial assets that consider a 12-month PD as they do
not present a significant increase in credit risk, the Group will calculate the ECL value considering
the risk of default during the maximum contractual maturity period of the contract, even if, for the
purpose of risk management, it is considered to be a longer period. The maximum contractual
period shall be considered as the period up to the date on which the Group has the right to require
payment or end the commitment or guarantee.
The PD point in time (“PDpit”) considered for the determination of the probability of performing
exposures at the reference date becoming defaulted exposures considers the expected values (in
each scenario considered in the ECL calculation) for a set of macroeconomic variables.
These relationships were developed specifically based on Banco Comercial Portugues, S.A’s (“the
Bank”) historical information on the behaviour of this parameter in different economic scenarios
and are different by customer segment and risk grade.
(f) Derivative financial instruments
Derivative financial instruments comprise all derivative assets and liabilities that are used to
economically hedge the interest rate risk arising from the Financial Assets at amortised cost. Such
derivatives are not formally designated into a qualifying hedge relationship and therefore all
changes in fair value are recognised immediately through profit or loss in the statement of
comprehensive income in the net gain or loss on derivative financial instruments. Please refer to
Note 5(j) for further information. Derivatives are included in assets when their fair value is
positive and liabilities when their fair value is negative unless the conditions for offset are met.
See page 28 for separate policy on offset.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
32
5. Summary of accounting policies (continued)
(g) Debt securities issued
The debt securities issued are initially measured at fair value, which usually equates to the Notes
proceeds adjusted for incremental direct costs. Subsequently, they are carried at amortised cost
using the effective interest rate method. The issuance costs are amortised through profit or loss in
the statement of comprehensive income in line with the redemptions of the underlying Notes on
an effective yield basis as part of the interest expense line. These costs are fully amortised by the
earliest date at which the option to redeem the Notes may be exercised. The carrying amount of
the debt is increased by the issuance cost in respect of the reporting period and reduced by
payments in respect of the debt in that period.
Premiums on the issue of the debt securities are added to the principal balance on the Notes and
are accounted for using the effective interest rate method with reference to the earliest date at
which the option to redeem the Notes may be exercised.
(h) Embedded derivative in Class F Note
Derivatives may be embedded in another contractual arrangement (a “host contract”). The Group
accounts for an embedded derivative separately from the host contract when the host contract is a
liability and not itself carried at fair value through profit or loss, the terms of the embedded
derivative would meet the definition of a derivative if it was contained in a separate contract, and
the economic characteristics and risks of the embedded derivative are not closely related to the
economic characteristics and risks of the host contract. However, embedded derivatives with risks
and characteristics closely related to those of the host contracts are not separated and are
measured as part of the overall amortised cost of the related instrument. The Group presents the
embedded derivative in its statement of financial position as a single contractual agreement.
(i) Interest income and expense
Interest income on Financial Assets at amortised cost and interest expense on debt securities
issued are recognised using the effective interest rate method. Income on the investment in
subsidiary undertaking is recorded when the right to receive the income is established.
The effective interest rate method is a method of calculating the amortised cost of a financial
asset or a financial liability and of allocating the interest income or interest expense over the
relevant financial period. The effective interest rate is the rate that exactly discounts estimated
future cash flows (payments and receipts) through the expected life of the financial instrument or,
when appropriate, a shorter financial period to the gross carrying amount of the financial asset or
to the amortised cost of a financial liability. When calculating the effective interest rate, the
Company estimates cash flows considering all contractual terms of the financial instrument but
does not consider future credit losses. The calculation includes all fees paid and received between
parties to the contract that are an integral part of the effective interest rate, transaction costs and
all other premiums or discounts.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
33
5. Summary of accounting policies (continued)
(j) Net gain/(loss) from derivative financial instruments
Net gain/(loss) from derivative financial instruments relates to derivative financial instruments
held by the Company for risk management purposes and includes realised and unrealised fair
value changes and settlements. It also includes fair value changes to a derivative which is
embedded in Class F notes.
(k) Other income and expenses
All other income and expenses are accounted for on an accruals basis.
(l) Taxation
Income tax expense comprises of current and deferred tax. Income tax expense is recognized in the
statement of comprehensive income except to the extent that it relates to items recognised directly
in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates
applicable to the Group’s activities enacted or substantively enacted at the reporting date, and
adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of all temporary differences that have originated but not
reversed at the reporting date. Provision is made at the rates expected to apply when the temporary
differences reverse. Temporary differences are differences between the Group’s taxable profits and
its results as stated in the financial statements that arise from the inclusion of gains and losses in
taxable profits in periods different from those in which they are recognised in the financial
statements.
A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the
basis of all available evidence, it can be regarded as more likely than not that there will be suitable
taxable profits from which the future reversal of the underlying temporary differences can be
deducted.
(m) Cash and cash equivalents
Cash and cash equivalents includes cash held with banks and highly liquid financial assets with
original maturities of less than three months, which are subject to insignificant risk of changes in
their fair value and are used by the Group in the management of its short term commitments.
Cash and cash equivalents are carried and measured at amortised cost in the statement of
financial position.
(n) Foreign currency transaction
Transactions in foreign currencies are translated to the relevant entity’s functional currency (i.e.
euro) at exchange rates at the dates of the transactions. Monetary assets and liabilities
denominated in foreign currencies at the reporting date are retranslated to the functional currency
at the exchange rate at that date. The foreign currency gain or loss on monetary items is the
difference between amortised costs in the functional currency at the beginning of the period,
adjusted for effective interest and payments during the period, and amortised cost in foreign
currency translated at the exchange rate at the end of the period. Foreign currency differences
arising on retranslation are recognised through profit or loss in the statement of comprehensive
income and are included under administrative expenses.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
34
5. Summary of accounting policies (continued)
(o) Share Capital
Share capital is issued in euro and has been determined to be classified as equity.
(p) Use of significant accounting judgements and estimates
The preparation of the financial statements requires management to make judgments, estimates
and assumptions that may affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates
and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognized in the period in which the estimate is revised and in any future periods affected.
Allowance for impairment is a significant estimate.
The classification and measurement of financial assets depends on the results of the SPPI test
(analysis of the characteristics of the contractual cash flows to determine if they correspond only
to payments of principal and interest on the outstanding capital) and the test of the business model.
- Significant accounting judgements
The Group determines the business model at a level that reflects how financial asset groups are
managed together to achieve a specific business objective. This evaluation requires judgment,
since the following aspects, among others, have to be considered: the way in which the
performance of assets is evaluated; the risks that affect the performance of the assets and the way
these risks are managed; and how asset managers are rewarded.
The Group monitors the financial assets measured at amortized cost that are derecognised prior to
their maturity to understand the underlying reasons for their disposal and to determine whether
they are consistent with the purpose of the business model defined for those assets. This
monitoring is part of a process of continuous evaluation made by the Group of the business model
of the financial assets that remain in the portfolio, to determine if it is adequate and, if it is not, if
there was a change in the business model and consequently a prospective change classification of
these financial assets.
- Key sources of estimation uncertainty
The use of estimates and assumptions is an integral part of recognising amounts in the financial
statements that mostly relate to the determination of loss allowance on financial instruments
involves judgments and estimates regarding, among others, the following:
Significant increase in credit risk
Loss allowances correspond to the expected credit losses on a 12-month for the assets in stage 1
and the expected credit losses considering the probability of a default event occurring at some
point up to the maturity date of the instrument financial assets for assets in stages 2 and 3. An asset
is classified in stage 2 whenever there is a significant increase in its credit risk since its initial
recognition. In assessing the existence of a significant increase in credit risk, the Group considers
qualitative and quantitative information.
In estimating expected credit losses, the Group uses reasonable and sustainable forecasting
information that is based on assumptions about the future evolution of different economic drivers
and how each of the drivers impacts the remaining drivers.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
35
5. Summary of accounting policies (continued)
(p) Use of significant accounting judgements and estimates (continued)
- Key sources of estimation uncertainty (continued)
Probability of default
The probability of default represents a determining factor in the measurement of expected credit
losses. The probability of default corresponds to an estimate of the probability of default in a given
time period, which is calculated on the basis of historical data, assumptions and expectations about
future conditions.
Loss given default
It corresponds to a loss estimate in a default scenario. It is based on the difference between the
contractual cash flows and those that the Bank expects to receive, through the cash flows
generated by the customers' business or credit collaterals. The calculation of the estimate of loss
given default based on, among other aspects, the different recovery scenarios, historical
information, the costs involved in the recovery process and the estimation of the valuation of
collaterals associated with credit operations.
Fair value of derivative financial instruments
Fair values are based on listed market prices if available, otherwise fair value is determined either
by dealer price quotations (either for that transaction or for similar instruments traded) or by
pricing models, based on net present value of estimated future cash flows which considers the
market conditions for the underlying instruments, time value, yield curve and volatility factors.
These pricing models may require assumptions or judgments in estimating their fair values.
Consequently, the use of a different model or of different assumptions or judgments in applying a
particular model could result in different results from the ones reported.
(q) Significant areas of estimation, uncertainty and critical judgments
In particular, information about significant areas of estimation, uncertainty and critical judgments
in applying accounting policies that have the most significant effect on the amount recognized in
the financial statements are described in notes 5(b), 5(e) and 21 (f).
6. Interest income
Year Ended
Year Ended 31
31 December
December
2023
2022
€
€
Interest income on Financial Assets at amortised cost
7,773,187
1,994,181
7,773,187
1,994,181
7. Interest expense
Year Ended
Year Ended
31 December
31 December
2023
2022
€
€
Interest (expense) on debt securities issued
(7,105,541)
(2,945,516)
Amortisation of issue costs on debt securities issued
(1,589)
(3,098)
(7,107,130)
(2,948,614)
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
36
8. Net (loss)/gain from derivative financial instruments
Year Ended
Year Ended
31 December
31 December
2023
2022
€
€
Coupon income
1,714,341
1,141,724
Unrealised (loss)/profit on fair value of interest rate swaps
(2,186,188)
245,826
(471,847)
1,387,550
9. Administrative expenses
Year Ended
Year Ended
31 December
31 December
2023
2022
€
€
Fund servicer, custodian and other fees
(280,574)
(336,733)
Transaction manager fees
(9,733)
(11,144)
Corporate service provider fees
(22,376)
(25,141)
Auditor’s remuneration
(80,749)
(63,263)
Other expenses
(46,347)
(49,758)
(439,779)
(486,039)
The Company has no employees and the Directors received no remuneration for their services for
the financial year ended 31 December 2023 (2022: €Nil). The Company paid the Administrator
fees in the amount of €1,000 (2022: €1,000) for making directors available to the Company. No
amounts are payable to the Arranger or the Administrator or anyone else for making directors
available to the Company as at 31 December 2023 (2022: €Nil).
Company:
Year Ended
Year Ended
31 December
31 December
2023
2022
€
€
Audit of entity financial statements
22,540
20,500
Other assurance services
-
4,500
Tax advisory fees
5,695
5,200
Non audit services
-
-
28,235
27,750
Group:
Year Ended
Year Ended
31 December
31 December
2023
2022
€
€
Audit of the group financial statements
5,000
4,500
Other assurance services
32,400
13,500
Tax advisory fees
1,000
1,000
Non audit services
-
-
38,400
19,000
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
37
10. Tax on profit on ordinary activities
This Company qualifies as a special purpose vehicle under Section 110, Taxes Consolidation Act
1997. As such, the profits charged to corporation tax are computed in accordance with the
provisions applicable to Schedule D Case I which is taxed at the passive rate of 25%.
There is no Irish tax liability due as there are no gains or losses arising during the financial year.
The subsidiary has incurred Portuguese tax of €80 at the Fund level (2022: €243).
Taxation
Year Ended
Year Ended
31 December
31 December
2023
2022
€
€
Portuguese tax
80
243
Factors affecting tax charge for the year
Corporation taxation has been calculated based on the results for
for the year and the resulting taxation charges are as follows:
Accounting profit
-
-
Tax at Irish passive rate 25%
-
-
Portuguese tax at fund level
80
243
Current tax charge
80
243
11. Derivative financial instruments
As of 31 December 2023, the Company’s and Group’s holdings in derivative financial
instruments were as specified in the table below:
As of 31 December 2022, the Company’s and Group’s holdings in derivative financial
instruments were as specified in the table below:
Type of contract
Currency
Expiration
Notional
Fair value
Fair value
assets
(liabilities)
€
€
€
Interest rate swap
Euro
May 2058
191,460,277
799,934
-
Type of contract
Currency
Expiration
Notional
Fair value
Fair value
assets
(liabilities)
€
€
€
Interest rate swap
Euro
May 2058
210,109,356
2,986,122
-
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
38
11. Derivative financial instruments (continued)
Under the interest rate swap agreements with Credit Agricole, on each interest payment date,
until the earlier of the date of maturity of the Notes or the date of the early repayment of the
Notes, (a) the Company will pay to the Swap Counterparty certain amounts calculated by
reference to (i) the relevant weighted average EURIBOR interest rates applicable in respect of
the mortgage loans determined by deducting the weighted average spread and 12.5 basis points
from the weighted average rate of the mortgage loans in respect of which no payment is more
than 90 days overdue as at the beginning of each relevant Collection Period and (ii) a notional
amount equal to the Aggregate Principal Outstanding Balance of such mortgage loans as at the
beginning of the relevant Collection Period and (b) the Swap Counterparty will pay to the
Company certain amounts calculated by reference to the EURIBOR rate applicable to the Senior
Notes on a notional amount equal to the Aggregate Principal Outstanding Balance of such
mortgage loans as at the beginning of the relevant Collection. The fair value of the derivative
financial instrument has been calculated by the swap counterparty in accordance with the fair
value measurement detailed in note 5(b).
12. Cash and cash equivalents
Group
Company
Group
Company
31 December
31 December
31 December
31 December
2023
2023
2022
2022
€
€
€
€
Cash and cash equivalents
15,315,750
117,941
14,988,285
43,126
Cash reserve account
-
9,000,000
-
9,000,000
Total
15,315,750
9,117,941
14,988,285
9,043,126
All of the Group’s and Company’s cash balances are held with Citibank N.A., London branch.
As at the financial year end, the cash reserve account had a balance of €9,000,000 (2022:
€9,000,000). The cash reserve account may be used to reduce or eliminate any shortfall
between the revenue received and the expense payable (including interest expense) on any
particular interest payment date.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
39
13. Financial Assets at amortised cost/Investment in subsidiary undertaking
Group
Company
Group
Company
31 December
31 December
31 December
31 December
2023
2023
2022
2022
€
€
€
€
Financial assets at amortised cost
173,224,094
-
202,206,220
-
Investment in subsidiary undertaking
-
177,967,828
-
207,515,609
173,224,094
177,967,828
202,206,220
207,515,609
Movements during the year:
At start of year
Principal
211,503,720
221,254,401
240,347,338
249,782,575
Impairment
(9,297,500)
(13,738,792)
(9,350,665)
(13,791,957)
Net balance at start of year
202,206,220
207,515,609
230,996,673
235,990,618
Redemptions
(29,227,775)
(29,793,430)
(28,843,618)
(28,528,173)
Reversal of ECL
245,649
245,649
53,165
53,165
Net balance at end of year
173,224,094
177,967,828
202,206,220
207,515,609
Principal
182,275,945
191,460,971
211,503,720
221,254,401
Impairment
(9,051,851)
(13,493,143)
(9,297,500)
(13,738,792)
173,224,094
177,967,828
202,206,220
207,515,609
The subsidiary undertaking of the Company is Fundo de Titularização de Créditos Magellan Tres
(FTC), a Portuguese securitisation fund, organised under the laws of the Portuguese Republic. The
Company purchased 100% of the units in the subsidiary.
The mortgage receivables comprise of first ranking mortgages on Portuguese real estate. As at the
financial year end, the weighted average interest rate and the weighted average remaining term of the
mortgage portfolio is 4.796% (2022: 2.692%) and 16.24 years (2022: 16.91 years) respectively.
Payments on the underlying mortgages are received on a monthly basis.
The Notes issued by the Company are principally secured by way of a first fixed security over the
entire mortgage portfolio.
Refer to note 21(d) for maturity analysis.
14. Other receivables
Group
Company
Group
Company
31 December
31 December
31 December
31 December
2023
2023
2022
2022
€
€
€
€
Accrued interest
225,259
1,677,850
122,944
734,525
Overdue interest
64,659
-
85,764
-
Other debtors
87,272
87,272
375,195
375,195
377,190
1,765,122
583,903
1,109,720
Management is of the opinion that no ECL is required for other receivables.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
40
15. Other payables
Group
Company
Group
Company
31 December
31 December
31 December
31 December
2023
2023
2022
2022
€
€
€
€
Interest payable on the Notes
12,545,474
12,545,474
14,359,638
14,359,638
Accrued expenses
7,465
5,981
33,409
9,220
Sundry creditors
64,659
-
85,764
-
12,617,598
12,551,455
14,478,811
14,368,858
16. Debt securities issued
Group
Company
Group
Company
31 December
31 December
31 December
31 December
2023
2023
2022
2022
Debt Securities issued
€
€
€
€
(see note (a) below)
177,059,370
177,059,370
206,245,719
206,245,719
(a) The Notes comprise:
177,059,370
177,059,370
206,245,719
206,245,719
Amount owing to noteholders
177,060,861
177,060,861
206,248,799
206,248,799
Unamortised issue costs
(1,491)
(1,491)
(3,080)
(3,080)
177,059,370
177,059,370
206,245,719
206,245,719
(b) Analysed as follows –
Group/Company:
Gross
Proceeds
Issue Costs
Net Proceeds
At the date of issue
€
€
€
Class A
1,413,750,000
(1,564,421)
1,412,185,579
Class B
33,750,000
(37,347)
33,712,653
Class C
15,750,000
(17,429)
15,732,571
Class D
36,750,000
(40,667)
36,709,333
Class E
19,600,000
(21,689)
19,578,311
Class F
250,000
(277)
249,723
1,519,850,000
(1,681,830)
1,518,168,170
2023
Cumulative
Cumulative
31 December
Net Proceeds
Redemptions
Amortisation
2023
€
€
€
€
Class A
1,412,185,579
(1,249,543,949)
1,564,194
164,205,824
Class B
33,712,653
(28,818,079)
37,263
4,931,837
Class C
15,732,571
(13,448,435)
17,390
2,301,526
Class D
36,709,333
(31,379,687)
40,537
5,370,183
Class E
19,578,311
(19,600,000)
21,689
-
Class F
249,723
-
277
250,000
1,518,168,170
(1,342,790,150)
1,681,350
177,059,370
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
41
16. Debt securities issued (continued)
2022
Cumulative
Cumulative
Cumulative
31 December
Net Proceeds
Redemptions
Amortisation
2022
€
€
€
€
Class A
1,412,185,579
(1,222,436,706)
1,562,702
191,311,575
Class B
33,712,653
(28,003,894)
37,225
5,745,984
Class C
15,732,571
(13,068,482)
17,372
2,681,461
Class D
36,709,333
(30,493,130)
40,496
6,256,699
Class E
19,578,311
(19,600,000)
21,689
-
Class F
249,723
-
277
250,000
1,518,168,170
(1,313,602,212)
1,679,740
206,245,719
(c) The movement on the
Notes during the year was:
Group
Company
Group
Company
31 December
31 December
31 December
31 December
2023
2023
2022
2022
€
€
€
€
As at start of the year
206,245,719
206,245,719
234,090,979
234,090,979
Redeemed
(29,187,938)
(29,187,938)
(27,848,358)
(27,848,358)
Amortised issue cost to
177,057,781
177,057,781
206,242,621
206,242,621
profit or loss
1,589
1,589
3,098
3,098
As at end of the year
177,059,370
177,059,370
206,245,719
206,245,719
Maturity analysis:
> 5 years
177,059,370
177,059,370
206,245,719
206,245,719
177,059,370
177,059,370
206,245,719
206,245,719
The Notes are due in May 2058 and the maturity analysis is based on contractual maturity. Refer
to note 21(d) for maturity analysis.
The Notes issued by the Company are limited recourse due to which each class of Noteholder
has the right to receive funds generated from the collateral assets to the extent that funds are
available and the right of each class of Noteholder to receive funds is governed by the priority
order of payments. Accordingly, the Company’s obligation to Noteholders is limited to the net
proceeds upon realisation of the collateral. Should the net proceeds be insufficient to make all
payments due in respect of the Notes, the deficit is borne by the Noteholders according to the
established priorities.
The Notes comprised, at issue, of €1,413.75m Class A Notes, €33.75m Class B Notes, €15.75m
Class C Notes, €36.75m Class D Notes, €19.6m Class E Notes and €0.25m Class F Notes.
• The Class A Notes bear interest at a margin of 26bps per annum over three-month
EURIBOR.
• The Class B Notes bear interest at a margin of 38bps per annum over three-month
EURIBOR.
• The Class C Notes bear interest at a margin of 58bps per annum over three-month
EURIBOR.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
42
16. Debt securities issued (continued)
• The Class D Notes bear interest at a margin of 106bps per annum over three-month
EURIBOR.
• The Class E Notes bear interest at a margin of 150bps per annum over three-month
EURIBOR.
• The Class F Notes receive interest based on the remaining income of the Company after
expenses.
All classes of Notes issued are collectively linked to the performance of the entire mortgage
portfolio. Prior to each Interest Payment Date, the Company receives available distribution
amounts in respect of the Collection Period and then makes payments as outlined in the
Offering Circular.
There is a priority of payments for the principal and interest in relation to Class A being the
most senior and then followed by Classes B, C, D, E with F being the most junior tranche. The
swap counterparty has priority of payment over the Noteholders.
The Directors consider that the timing of the repayment of the Notes is uncertain given that the
timing of such payments is dependent on the receipt of interest and principal amounts yielded by
the assets. The Notes are subject to mandatory redemption in part at each interest payment date
in an amount equal to the principal received or recovered in respect of the mortgage assets.
The Company has the option to redeem the Notes in whole at certain points in time dependent
upon various factors. The Company may redeem the Notes in whole, if not otherwise redeemed,
at any interest payment date following this date. If not otherwise redeemed, purchased or
cancelled, the Notes will be redeemed at their principal amount outstanding on the last interest
payment date falling due in May 2058.
The Notes issued by the Company are principally secured by way of a first fixed security over
the entire mortgage portfolio. The Notes are listed on the Main Securities Market of Euronext
Dublin.
The ratings of the Notes are:
31 December 2023
Class A
Class B
Class C
Class D
Class E
Class F
Standard & Poor’s
A
A
A
BB+
NR
NR
Moody’s
A1
Baa3
Ba2
B2
NR
NR
31 December 2022
Class A
Class B
Class C
Class D
Class E
Class E
Standard & Poor’s
A
A
A
BB+
NR
NR
Moody’s
A1
Baa3
Ba2
B2
NR
NR
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
43
17. Embedded derivative
The Directors have determined that an embedded derivative exists in respect of the Class F
Note. The return on the Class F Note is linked to the return on the mortgage receivables.
Furthermore, all interest amounts payable by the Company under the Class F Notes will be
subordinated to the payment of principal and interest under the Senior Notes and Class E Notes
and it will only be payable to the extent that the Company has sufficient funds available for the
purpose.
However, it is the view of the Directors of the Company that the economic characteristics and
risks of the embedded derivative are closely related to the economic characteristics and risks of
the host contract; therefore, the embedded derivative is not separated from the host contract.
The Class F Notes receive interest based on the remaining income of the Company after
expenses.
During the financial year, a sum of €2,714,755 (2022: €1,991,368) was paid to the Class F
Noteholders.
18. Accounting categorisations and fair values of financial assets and liabilities
Group
Fair value
Fair value
through profit
through profit
or loss
Amortised
Fair value
or loss
Amortised
Fair value
2023
cost 2023
2023
2022
cost 2022
2022
Financial assets at amortised
€
€
€
€
€
€
cost
Cash and cash equivalents
-
15,315,750
15,315,750
-
14,988,285
14,988,285
Financial Assets at amortised
cost
-
173,224,094
166,199,481
-
202,206,220
190,598,698
Other receivables
-
377,190
377,190
-
583,903
583,903
Financial assets at fair value
through profit or loss
-
188,917,034
181,892,421
-
217,778,408
206,170,886
Derivative assets
799,934
-
799,934
2,986,122
-
2,986,122
Financial liabilities at
amortised cost
799,934
188,917,034
182,692,355
2,986,122
217,778,408
209,157,008
Debt securities issued
-
177,059,370
170,074,757
-
206,245,719
194,678,197
Other payables
-
12,617,598
12,617,598
-
14,478,811
14,478,811
-
189,676,968
182,692,355
-
220,724,530
209,157,008
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
44
18. Accounting categorisations and fair values of financial assets and liabilities (continued)
Company
Fair value
Fair value
through profit
through profit
or loss
Amortised
Fair value
or loss
Amortised
Fair value
2023
cost 2023
2023
2022
cost 2022
2022
Financial assets at amortised
€
€
€
€
€
€
cost
Cash and cash equivalents
-
9,117,941
9,117,941
-
9,043,126
9,043,126
Investment in subsidiary
-
177,967,828
170,943,215
-
207,515,609
195,908,087
Other receivables
-
1,765,122
1,765,122
-
1,109,720
1,109,720
Financial assets at fair value
through profit or loss
-
188,850,891
181,826,278
-
217,668,455
206,060,933
Derivative assets
799,934
-
799,934
2,986,122
-
2,986,122
Financial liabilities at
amortised cost
799.934
188,850,891
182,626,212
2,986,122
217,668,455
209,047,055
Debt securities issued
-
177,059,370
170,074,757
-
206,245,719
194,678,197
Other payables
-
12,551,455
12,551,455
-
14,368,858
14,368,858
-
189,610,825
182,626,212
-
220,614,577
209,047,055
19. Share capital
Group
Company
Group
Company
31 December
31 December
31 December
31 December
2023
2023
2022
2022
Authorised
€
€
€
€
40,000
Ordinary shares
of €1 each
Alotted, called up and fully paid
40,000
40,000
40,000
40,000
40,000
Ordinary shares
of €1 each
40,000
40,000
40,000
40,000
There are no restrictions on voting rights and the Company does not have any external capital
requirements.
20. Related party and certain other transactions
Group and Company
Transactions with Wilmington Trust SP Services (Dublin) Limited
The Company has entered into a Corporate Services Agreement (“CSA”) with Wilmington Trust
SP Services (Dublin) Limited for the provision of corporate services. P Blessing and A Geraghty,
the directors of the Company, are also directors of Wilmington Trust SP Services (Dublin) Limited.
Under the terms of the CSA, €22,376 (2022: €25,141) was paid to Wilmington Trust SP Services
(Dublin) Limited for these services during the year. The Company paid the Administrator fees in
the amount of €1,000 (2022: €1,000) for making directors available to the Company. The
services are provided under normal commercial terms.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
45
20. Related party and certain other transactions (continued)
Company
Transactions with Fundo de Titularização de Créditos Magellan Tres (FTC)
The Company has invested in the subsidiary undertaking. During the financial year, interest
income of €6,283,467 (2022: €1,141,724) has been paid to the Company. This income is
calculated in accordance with the requirements of the prospectus. At the financial year end, the
investment in subsidiary undertaking balance was €177,967,828 (2022: €207,515,609).
21. Financial risk management
The Company was incorporated for the purpose of participating in the securitization of a portfolio
of mortgage receivables which was financed by the issue of notes. The Company is not engaged in
any other activities.
Risk management framework
The Board of Directors has overall responsibility for the establishment and oversight of the
Company’s risk management framework.
The risk profile of the Company is such that market, credit, liquidity and other risks of the Financial
Assets at amortised cost and derivative financial instruments held for risk management purposes by
the Company are borne fully by the holders of debt securities issued.
The Group and Company have exposure to the following risks from their use of financial
instruments:
(a) Market risk;
(b) Credit risk;
(c) Operational risk;
(d) Liquidity and cashflow risk; and
(e) Concentration risk.
This note presents information about the Group’s and Company’s exposure to each of the above
risks, the Company’s objectives, policies and processes for measuring and managing risks.
(a) Market risk
Market risk is the risk that changes in market prices, such as interest rates, will affect the
Company’s income or the value of its holding of financial instruments and it also includes other
price risks. Interest rate risks are economically hedged through the interest rate swap agreement.
The objective of market risk management is to manage and control market risk exposures within
acceptable parameters while optimising the return on risk.
Market risk embodies the potential for both gains and losses and includes interest rate risk and price
risk.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
46
21. Financial risk management (continued)
(a) Market risk (continued)
(i) Interest rate risk
At the reporting date, the interest rate profile of the financial assets and liabilities was:
Interest rate risk table - Group
Non interest
Fixed
Floating
bearing
Total
31 December 23
31 December 23
31 December 23
31 December 23
€
€
€
€
Assets
-
189,339,778
377,190
189,716,968
Liabilities
-
(177,059,370)
(12,617,598)
(189,676,968)
Cumulative interest risk
-
12,280,408
(12,240,408)
40,000
The weighted average interest rate of the assets was 4.796%. The weighted average interest rate of
the liabilities was 4.2938%. The weighted average maturity period for both the assets and liabilities
was 16.24 years.
Interest rate risk table - Group
Non interest
Fixed
Floating
bearing
Total
31 December 22
31 December 22
31 December 22
31 December 22
€
€
€
€
Assets
-
220,180,627
583,903
220,764,530
Liabilities
-
(206,245,719)
(14,478,811)
(220,724,530)
Cumulative interest risk
-
13,934,908
(13,894,908)
40,000
The weighted average interest rate of the assets was 2.692%. The weighted average interest rate of
the liabilities was 2.0898%. The weighted average maturity period for both the assets and liabilities
was 16.91 years.
Interest rate risk table - Company
Non interest
Fixed
Floating
bearing
Total
31 December 23
31 December 23
31 December 23
31 December 23
€
€
€
€
Assets
-
187,885,703
1,765,122
189,650,825
Liabilities
-
(177,059,370)
(12,551,455)
(189,610,825)
Cumulative interest risk
-
10,826,333
(10,786,333)
40,000
The weighted average interest rate of the assets was 4.796%. The weighted average interest rate of
the liabilities was 4.2938%. The weighted average maturity period for both the assets and liabilities
was 16.24 years.
Interest rate risk table – Company
Fixed
Floating
Non interest
Total
31 December
31 December
bearing
31 December
22
22
31 December 22
22
€
€
€
€
Assets
-
219,544,857
1,109,720
220,654,577
Liabilities
-
(206,245,719)
(14,368,858)
(220,614,577)
Cumulative interest risk
-
13,299,138
(13,259,138)
40,000
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
47
21. Financial risk management (continued)
(a) Market risk (continued)
(i) Interest rate risk (continued)
The weighted average interest rate of the assets was 2.692%. The weighted average interest rate of
the liabilities was 2.0898%. The weighted average maturity period for both the assets and liabilities
was 16.91 years.
Sensitivity analysis
The Company entered into an interest rate swap to mitigate the interest rate risk associated with the
debt securities issued by the Company. The Company is not exposed to the risk as any shortfall will
be borne by the Noteholders in accordance with the priority of payments. However, the Noteholders
are exposed to any shortfall due to the limited recourse nature of the debt securities issued.
A change of 100 basis points in interest rates at the reporting date would have (increased)/ decreased
interest expense by the below amount. For variable instruments, this analysis assumes that all other
variables remain constant. The analysis is performed on the same basis for 2022.
Group
Company
Group
Company
Increase
Increase
Decrease
Decrease
31 December 2023
€
€
€
€
Debt securities issued
(1,768,109)
(1,768,109)
1,768,109
1,768,109
Group
Company
Group
Company
Increase
Increase
Decrease
Decrease
31 December 2022
€
€
€
€
Debt securities issued
(2,059,988)
(2,059,988)
2,059,988
2,059,988
The coupon rate for the debt securities issued have a floor of zero, and the coupon rate will not result
in negative (interest) cash flows for the Noteholders, therefore representing a saving on interest
expense.
(ii) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in foreign exchange rates. The debt securities issued by the Company
are denominated in Euro. The financial assets of the Group and Company are also denominated in
Euro and, therefore, the Group and Company are not exposed to any material currency exchange
fluctuations. Hence, no sensitivity exchange analysis has been presented.
(iii) Price risk
Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices (other than those arising from interest rate risk or currency
risk), whether those changes are caused by factors specific to the individual financial instrument
or its issuer, or factors affecting all similar financial instruments traded in the market.
Other price risk may include risks such as equity price risk, commodity price risk, prepayment
risk (i.e. the risk that one party to a financial asset will incur a financial loss because the other
party repays earlier or later than expected), and residual value risk.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
48
21. Financial risk management (continued)
(a) Market risk (continued)
(iii) Price risk (continued)
In relation to the Group’s portfolio of mortgage loans, this is not subject to equity price risk,
commodity price risk and residual value risk. In relation to prepayment risk, the Directors do not
consider this to be a significant risk from the perspectives of either (i) the Noteholders, as the
portfolio is 100% floating rate (3-month Euribor based) or (ii) the Company itself, as any
fluctuation in the value of the loans held by the Company is borne by the Noteholders and/or
Swap Counterparty.
(b) Credit risk
Credit risk is the risk of financial loss to the Company if the counterparty to a financial instrument
fails to meet its contractual obligations and arises principally from the Company’s linked assets. The
policy of the Company in relation to credit risk is to expose itself to the credit risk in relation to
mortgage receivables; however, ultimately this risk is borne by the Noteholders. The Directors
consider this risk to be of an acceptable nature. During the life of the transaction, the Originator is
able to modify the terms and conditions of some of the loans on a limited basis or substitute some
loans. These changes may have an impact on the risk profile of the pool. The Originator’s ability to
make changes to the terms and conditions of the loans securitised is limited by permitted variations.
The Directors confirm that no asset substitution have occurred during 2023 and 2022.
Any reduction in the value of the mortgage receivables will be matched by a reduction in the
repayment obligations on the Notes.
The Company has set out the methodologies used and judgements exercised in determining its
expected credit loss (“ECL”) for financial year to 31 December 2023, as previously explained in
Note 5 above.
The following table summarises the movement in loss allowance of the Group split by stage for the
financial year ended 31 December 2023.
Stage 1
Stage 2
Stage 3
Total
€
€
€
€
Balance at
01/01/2023
(6,902)
(83,927)
(9,206,671)
(9,297,500)
Impairment losses /
(6,467)
5,686
246,430
245,649
change in loss
allowance
Balance at
31/12/2023
(13,369)
(78,241)
(8,960,241)
(9,051,851)
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
49
21. Financial risk management (continued)
(b) Credit risk (continued)
The following table summarises the movement in impairment loss allowance of the Group split by
stage for the financial year ended 31 December 2022.
Stage 1
Stage 2
Stage 3
Total
€
€
€
€
Balance at
01/01/2022
(3,682)
(46,412)
(9,300,571)
(9,350,665)
Impairment losses /
(3,220)
(37,515)
93,900
53,165
change in loss
allowance
Balance at
31/12/2022
(6,902)
(83,927)
(9,206,671)
(9,297,500)
The following table summarises the analysis by stage of the mortgage receivables and associated
loss allowance of the Group as at 31 December 2023.
Stage 1
Stage 2
Stage 3
Total
€
€
€
€
Gross loans and
advances to
customers
148,678,315
23,372,469
10,225,161
182,275,945
Impairment
(13,369)
(78,241)
(8,960,241)
(9,051,851)
provisions/loss
allowance
Carrying amount
148,664,946
23,294,228
1,264,920
173,224,094
Loss allowance
0.01%
0.34%
87.63%
4.97%
coverage rate
The following table summarises the analysis by stage of the mortgage receivables and associated
loss allowance of the Group as at 31 December 2022.
Stage 1
Stage 2
Stage 3
Total
€
€
€
€
Gross loans and
advances to
customers
174,868,576
25,431,861
11,203,283
211,503,720
Impairment
(6,902)
(83,927)
(9,206,671)
(9,297,500)
provisions/loss
allowance
Carrying amount
174,861,674
25,347,934
1,996,612
202,206,220
Loss allowance
0.00%
0.00%
82.17%
4.39%
coverage rate
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
50
21. Financial risk management (continued)
(b) Credit risk (continued)
As at 31 December 2023, the Group had financial assets exposed to credit risk with a total
carrying amount of €189,716,968 (2022: €220,764,530). The majority of the credit risk relates to
Financial Assets at amortised cost of €173,224,094 (2022: €202,206,220) and the Group has
appointed Banco Comercial Portugues, S.A. as Servicer to manage this risk on behalf of the
Group. As at 31 December 2023, the Company had financial assets exposed to credit risk with a
total carrying amount of €189,650,825 (2022: €220,654,577). The majority of the credit risk relates
to the investment in subsidiary undertaking of €177,967,828 (2022: €207,515,609) and the Company
has appointed Banco Comercial Portugues, S.A. as Servicer of the underlying asset of the Fund to
manage this risk on behalf of the Company.
As at 31 December 2023, the following table includes the fair value of the collaterals (not limited
by the value of the collateral) associated to the loans portfolio by segment:
31 December 2023
Mortgage loans
Fair Value
Real Estate
< 0.5m
Number
6,238
Value (€)
173,578,964
As at 31 December 2022, the following table includes the fair value of the collaterals (not limited
by the value of the collateral) associated to the loans portfolio by segment:
31 December 2022
Mortgage loans
Fair Value
Real Estate
< 0.5m
Number
6,973
Value (€)
202,500,984
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
51
21. Financial risk management (continued)
(b) Credit risk (continued)
The analysis of the Financial Assets at amortised cost/investment in subsidiary undertaking is as
follows:
2023
2022
Mortgage Portfolio:
Weighted average interest rate
4.796%
2.692%
Number of loans
6,238
6,973
Present LTV (outstanding loan amount/initial valuation)
39.4%
41.7%
Original LTV (initial loan amount/initial valuation)
73.2%
74.7%
Portfolio Trigger Event (maximum 4.5%): Arrears ratio
0.02%
0.04%
Mortgages loans in arrears (> 30 days)
€9,840,882
€10,612,457
No. of loans in arrears
305
320
Mortgage loans in arrears (>30 days)
2023
2022
€
€
30 – 59 days
347,828
384,888
60 – 89 days
74,277
152,653
90 – 179 days
273,400
324,997
180 – 269 days
15,904
237,213
270 – 365 days
17,251
71,098
> 365 days
9,112,222
9,441,608
9,840,882
10,612,457
Loan portfolio by interest rate
31 December 2023
Loans average residual
% of Total
Type of Loans
maturity (years)
Interest rate
amount
Mortgage
16.05
Less than 1%
1.40%
Mortgage
15.30
From 1% to 2%
3.16%
Mortgage
15.41
From 2% to 3%
1.08%
Mortgage
16.91
From 3% to 4%
0.40%
Mortgage
16.28
= or > 5%
93.96%
Total
100.00%
Loan portfolio by interest rate
31 December 2022
Loans average residual
% of Total
Type of Loans
maturity (years)
Interest rate
amount
Mortgage
18.32
Less than 1%
2.75%
Mortgage
17.10
From 1% to 2%
22.84%
Mortgage
16.77
From 2% to 3%
57.71%
Mortgage
16.94
From 3% to 4%
16.11%
Mortgage
16.12
= or > 5%
0.59%
Total
100.00%
The mortgage loans are secured by Portuguese residential assets.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
52
21. Financial risk management (continued)
(b) Credit risk (continued)
Loan portfolio by residual maturity
31 December 2023
Loans average
% of Total
Originator
residual maturity
No. of loans
Notional amount
Banco Comercial Português
Less than 5 years
621
3.03%
Banco Comercial Português
From 5 to 10 years
1,461
17.27%
Banco Comercial Português
From 10 to 15 years
1,342
20.16%
Banco Comercial Português
From 15 to 20 years
1,356
26.43%
Banco Comercial Português
= or > 25 years
1,519
33.11%
Total
6,299
100.00%
Loan portfolio by residual maturity
31 December 2022
Loans average
% of Total
Originator
residual maturity
No. of loans
Notional amount
Banco Comercial Português
Less than 5 years
618
2.32%
Banco Comercial Português
From 5 to 10 years
1,098
10.43%
Banco Comercial Português
From 10 to 15 years
2,018
26.62%
Banco Comercial Português
From 15 to 20 years
1,012
17.34%
Banco Comercial Português
= or > 25 years
2,305
43.29%
Total
7,051
100.00%
Cash at bank
The Group’s and Company’s cash balances are held mainly with Citibank N.A. London Branch
which is rated A+ by Standard and Poor’s in 2023 and A+ in 2022.
Swap counterparty credit rating
The long term Standard & Poor’s rating for the swap counterparty (Credit Agricole) is A (2022: A).
(c) Operational risk
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated
with the Group’s and Company’s processes, personnel and infrastructure, and from external factors
other than credit, market and liquidity issues such as those arising from legal and regulatory
requirements to corporate behaviour.
Operational risks arise from all of the Group’s and Company’s operations. The Company was
incorporated with the purpose of engaging in those activities outlined in the preceding paragraphs.
All corporate management and administration functions are outsourced to Wilmington Trust SP
Services (Dublin) Limited.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
53
21. Financial risk management (continued)
(d) Liquidity and cashflow risk
Liquidity risk is the risk that the Group and Company will encounter difficulties in meeting
obligations arising from its financial liabilities that are settled by delivering cash or another
financial asset or that such obligations will have to be settled in a manner disadvantageous to the
Company. The Company’s approach to managing liquidity is to ensure, as far as possible, that it
will always have sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to the Group’s
reputation.
The Company’s obligations under the Notes are limited to the expected receipts of accrued interest
and proceeds from the redemption of the mortgage receivables. There were no liquidity issues
experienced by the Group, Company or Swap Counterparty in respect of meeting obligations to the
Noteholders or the Swap Counterparty.
The following are the contractual maturities of financial liabilities including undiscounted
interest payments.
2023
Group
Gross
Carrying
contractual
Less than
One to
Two to five
More than
amount
cash flows
one year
two years
years
five years
Debt securities
issued
177,059,370
438,179,982
7,591,925
7,591,925
22,775,774
400,220,358
Other payables
12,617,598
12,617,598
12,617,598
-
-
-
189,676,968
450,797,580
20,209,523
7,591,925
22,775,774
400,220,358
Company
Gross
Carrying
contractual
Less than
One to
Two to five
More than
amount
cash flows
one year
two years
years
five years
Debt securities issued
177,059,370
438,179,982
7,591,925
7,591,925
22,775,774
400,220,358
Other payables
12,551,455
12,551,455
12,551,455
-
-
-
189,676,968
450,731,427
20,143,380
7,591,925
22,775,774
400,220,358
2022
Group
Gross
Carrying
contractual
Less than
One to
Two to five
More than
amount
cash flows
one year
two years
years
five years
Debt securities
issued
206,245,719
374,882,454
4,304,987
4,304,987
12,914,959
353,357,521
Other payables
14,478,811
14,478,811
14,478,811
-
-
-
220,724,530
389,361,265
18,783,798
4,304,987
12,914,959
353,357,521
Company
Gross
Carrying
contractual
Less than
One to
Two to five
More than
amount
cash flows
one year
two years
years
five years
Debt securities issued
206,245,719
374,882,454
4,304,987
4,304,987
12,914,959
353,357,521
Other payables
14,368,858
14,368,858
14,368,858
-
-
-
220,614,577
389,251,312
18,673,845
4,304,987
12,914,959
353,357,521
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
54
21. Financial risk management (continued)
(e) Concentration risk
All of the Financial Assets at amortised cost are mortgage receivables secured on residential
properties located in Portugal.
(f) Fair values
The Group’s and Company’s derivative financial assets are carried at fair value in the statement
of financial position. Usually, the fair value of the financial instruments can be reliably
determined within a reasonable range of estimates. The carrying amounts of all the Group’s and
Company’s financial assets and financial liabilities along with their fair values are disclosed in
Note 18.
Determining fair values
The determination of fair value for measurement and disclosure of financial assets and liabilities
for which there is no observable market price requires the use of valuation techniques as
described in accounting policy 5(b) under the sub-heading “Fair value measurement”. For
financial instruments that trade infrequently and have little price transparency, fair value is less
objective, and requires varying degrees of judgement depending on liquidity, concentration,
uncertainty of market factors, pricing assumptions and other risks affecting the specific
instrument.
The Group’s and Company’s accounting policy on fair value measurements is discussed under
accounting policy 5(b) under the sub-heading “Fair value measurement”.
Fair Value Hierarchy
The Group and Company measure fair values using the following hierarchy of inputs:
Level 1 Quoted market price (unadjusted) in an active market for an identical instrument.
Level 2 Valuation techniques based on observable inputs, either directly (i.e. quoted prices) or
indirectly (i.e. derived by prices). This category includes instruments valued using: quoted market
prices in active markets for similar instruments; quoted prices for similar instruments in markets
that are considered less than active; or other valuation techniques where all significant inputs are
directly or indirectly observable from market data.
Level 3 Valuation techniques using significant unobservable inputs. This category includes all
instruments where the valuation technique includes inputs not based on observable data and the
unobservable inputs could have a significant effect on the instrument’s valuation. This category
includes instruments that are valued based on quoted prices for similar instruments where
significant unobservable adjustments or assumptions are required to reflect differences between
the instruments.
The table below analyses financial instruments measured at fair value at the reporting date by the
level of fair value in the fair value hierarchy into which the fair value measurement is categorised.
The amounts are based on the values recognised in the statement of financial position. All fair
value measurements below are recurring.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
55
21. Financial risk management (continued)
(f) Fair values (continued)
Group/Company
Financial instruments not measured at fair value
The financial instruments not measured at fair value through profit or loss include financial assets
and financial liabilities whose carrying amounts approximate fair value and financial instruments
measured at amortised cost.
The following table sets out the fair values of financial instruments not measured at fair value and
analyses them by the level in the fair value hierarchy into which each fair value measurement is
categorised.
Group
Total
Total fair
carrying
Level 1
Level 2
Level 3
value
amount
2023
2023
2023
2023
2023
Financial assets
€
€
€
€
€
Cash and cash
15,315,750
-
-
15,315,750
15,315,750
equivalents
Financial Assets at
amortised cost
-
-
166,199,481
166,199,481
173,224,094
Other receivables
-
377,190
-
377,190
377,190
15,315,750
377,190
166,199,481
181,892,421
188,917,034
Financial liabilities
Debt securities issued
-
(169,848,401)
(226,356)
(170,074,757)
(177,059,370)
Other payables
-
(12,617,598)
-
(12,617,598)
(12,617,598)
-
(182,465,999)
(225,776)
(182,692,355)
(189,676,968)
Level 1
Level 2
Level 3
Total Fair Value
31 December 2023
2023
2023
2023
2023
€
€
€
€
Derivative assets
-
799,934
-
799,934
Total
-
799,934
-
799,934
Level 1
Level 2
Level 3
Total Fair Value
31 December 2022
2022
2022
2022
2022
€
€
€
€
Derivative assets
-
2,986,112
-
2,986,112
Total
-
2,986,112
-
2,986,112
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
56
21. Financial risk management (continued)
(f) Fair values (continued)
Financial instruments not measured at fair value (continued)
Group
Total
Total fair
carrying
Level 1
Level 2
Level 3
value
amount
2022
2022
2022
2022
2022
Financial assets
€
€
€
€
€
Cash and cash
14,988,285
-
-
14,988,285
14,988,285
equivalents
Financial Assets at
amortised cost
-
-
190,598,698
190,598,698
202,206,220
Other receivables
-
583,903
-
583,903
583,903
14,988,285
583,903
190,598,698
206,170,886
217,778,408
Financial liabilities
Debt securities issued
-
(194,452,420)
(225,776)
(194,678,196)
(206,245,719)
Other payables
-
(14,478,811)
-
(14,478,811)
(14,478,811)
-
(208,931,231)
(225,776)
(209,157,007)
(220,724,530)
Company
Total
Total fair
carrying
Level 1
Level 2
Level 3
value
amount
2023
2023
2023
2023
2023
Financial assets
€
€
€
€
€
Cash and cash
9,117,941
-
-
9,117,941
9,117,941
equivalents
Investment in subsidiary
-
-
170,943,216
170,943,216
177,967,828
undertaking
Other receivables
-
1,765,122
-
1,765,122
1,765,122
9,117,941
1,765,122
170,943,216
181,826,279
188,850,891
Financial liabilities
Debt securities issued
-
(169,848,401)
(226,356)
(170,074,757)
(177,059,370)
Other payables
-
(12,551,455)
-
(12,551,455)
(12,551,455)
-
(182,399,856)
(226,356)
(182,626,212)
(189,610,825)
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
57
21. Financial risk management (continued)
(g) Fair values (continued)
Financial instruments not measured at fair value (continued)
Company
Total
Total fair
carrying
Level 1
Level 2
Level 3
value
amount
2022
2022
2022
2022
2022
Financial assets
€
€
€
€
€
Cash and cash
9,043,126
-
-
9,043,126
9,043,126
equivalents
Investment in subsidiary
-
-
195,908,087
195,908,087
207,515,609
undertaking
Other receivables
-
1,109,720
-
1,109,720
1,109,720
9,043,126
1,109,720
195,908,087
206,060,933
217,668,455
Financial liabilities
Debt securities issued
-
(194,452,420)
(225,776)
(194,678,196)
(206,245,719)
Other payables
-
(14,368,858)
-
(14,368,858)
(14,368,858)
-
(208,821,278)
(225,776)
(209,047,054)
(220,614,577)
The Group and Company determined the fair value of the Financial Assets at amortised cost held
as representing the difference between the fair values of the other net assets of the Company on
the basis of the principle that the cash flows arising from the assets are fully attributable to the
Group’s liability holders, the Noteholders, except for the €40,000 set aside in respect of the fully
paid-up share capital.
For the most senior tranches of debt securities, Class A, Class B, Class C and Class D, the Group
and Company has determined the fair value of the debt securities held with reference to quoted
prices in markets that are not active, that is, markets in which there are few transactions for the
liability. The fair value of the Class F notes have been determined by an internal model using
unobservable inputs.
The debt securities issued have been classified as both Level 2 and Level 3. The most senior
tranches of debt securities, which are listed, Class A, Class B, Class C and Class D have been
classified as Level 2. Class F has been classified as Level 3.
The other receivables and other payables have been classified under Level 2. Due to their short-
term nature, the Directors are of the view that the carrying values approximate the fair values.
MAGELLAN MORTGAGES NO.3 PUBLIC LIMITED COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2023
58
22. Ultimate controlling parties
The sole shareholder is Wilmington Trust SP Services (Dublin) Limited who holds all 40,000
shares of the Company in trust for charity under the terms of a declaration of trust.
The trustee has appointed a Board of Directors to run the day to day activities of the Company.
The Board have considered the issue as to who is the ultimate controlling party of the Company.
It has determined that the control of the day to day activities rests with the Board. The Board is
composed of two directors, Alan Geraghty and Peter Blessing, both of whom are directors of
Wilmington Trust SP Services (Dublin) Limited, being the entity that acts as administrator of the
Company.
23. Capital management
Share Capital of €40,000 was issued in line with Irish Company Law and is not used for financing
the investment activities of the Group.
The Group is not subject to any other externally imposed capital requirements.
24. Subsequent events
There were no significant subsequent events since the financial year end up to the date of
approval of the financial statements requiring disclosure or amendment to these financial
statements.
25. Approval of the financial statements
The Board of Directors approved these financial statements on 30 April 2024.