48510040FDCT4Q97XG852022-01-012022-12-3148510040FDCT4Q97XG852022-12-3148510040FDCT4Q97XG852021-12-3148510040FDCT4Q97XG852020-12-31ifrs-full:IssuedCapitalMember48510040FDCT4Q97XG852020-12-31ifrs-full:OtherReservesMember48510040FDCT4Q97XG852020-12-31ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember48510040FDCT4Q97XG852020-12-31ifrs-full:RetainedEarningsMember48510040FDCT4Q97XG852020-12-3148510040FDCT4Q97XG852021-01-012021-12-31ifrs-full:IssuedCapitalMember48510040FDCT4Q97XG852021-01-012021-12-31ifrs-full:OtherReservesMember48510040FDCT4Q97XG852021-01-012021-12-31ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember48510040FDCT4Q97XG852021-01-012021-12-31ifrs-full:RetainedEarningsMember48510040FDCT4Q97XG852021-01-012021-12-3148510040FDCT4Q97XG852021-12-31ifrs-full:IssuedCapitalMember48510040FDCT4Q97XG852021-12-31ifrs-full:OtherReservesMember48510040FDCT4Q97XG852021-12-31ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember48510040FDCT4Q97XG852021-12-31ifrs-full:RetainedEarningsMember48510040FDCT4Q97XG852022-01-012022-12-31ifrs-full:IssuedCapitalMember48510040FDCT4Q97XG852022-01-012022-12-31ifrs-full:OtherReservesMember48510040FDCT4Q97XG852022-01-012022-12-31ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember48510040FDCT4Q97XG852022-01-012022-12-31ifrs-full:RetainedEarningsMember48510040FDCT4Q97XG852022-12-31ifrs-full:IssuedCapitalMember48510040FDCT4Q97XG852022-12-31ifrs-full:OtherReservesMember48510040FDCT4Q97XG852022-12-31ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember48510040FDCT4Q97XG852022-12-31ifrs-full:RetainedEarningsMemberiso4217:EUR
THE ONA P.L.C.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31st DECEMBER 2022
Company No. C- 101370
THE ONA P.L.C.
CONTENTS
_______________________________________________________________________________________
PAGE
Report of the directors
1 to 4
Statement of compliance with principles of good corporate governance
5 to 7
Statement of profit or loss and other comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 to 41
Independent auditors’ report
42 to 48
THE ONA P.L.C.
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2022
_____________________________________________________________________________________________
______________________________________________________________________________________________________
1
______________________________________________________________________________________________________
2
Bond Issue
In terms of the Prospectus dated 31st May 2022, the Company had offered for subscription an amount of €16 million 4.50% Secured Bonds 2028 - 2034 of a nominal value of €100 per Bond issued at par. The Bonds were fully subscribed and admitted to the Official List of the Malta Stock Exchange p.l.c. with effect from 21st June 2022. The Ona Property Development Ltd., The Ona Real Estate Ltd. and The Ona Hospitality Ltd. acted as guarantors of this bond issue (the “Guarantor”).
In accordance with the Prospectus, the proceeds from the bond issue were utilised by the Group to finance the acquisition, construction, development and finishing of the Hotel project, a 4-star hotel in Paceville to be operated as a “AC Hotels by Marriott” hotel.
Review of business
The Hotel
Works on the development and finishing of the hotel progressed well and within the scheduled time frames. The hotel is scheduled to open its doors in Quarter 2 of 2023.
Property development projects
The Marsascala Project - Waterbank
As at 31 December 2022, 13 residential units were contracted while the remaining three units were subject to promise of sale agreements. Revenue generated from the sold units amounted to €4.24 million (€0.94 million in FY2021 and €3.30 million in FY2022). TOPD expects to generate €1.25 million from the last three units.
The Qawra project – Eden Grove
As at 31 December 2022, 13 units forming part of the Qawra Project were sold during the year for the consideration of €2.65 million. The remaining two units were subject to a promise of sales agreement and have an aggregate value of €0.5 million.
The Birkirkara project
Demolition and excavation works were completed in FY2022. Development works relating to the Birkirkara Project commenced in Q1 2023 and are expected to be completed by Q2 2024.
The Mellieha project
On 14 December 2021, the Group entered into a promise of sale agreement for the purchase of the Mellieha site, which it intends to develop into two semi-detached terraced houses. The Group expects to conclude the acquisition of the Mellieha Site in Q2 2023.
The St Paul’s Bay Project
In Q1 2022, the Group entered into four promise of sale agreements for the purchase of the St Paul’s Bay site, which it intends to develop into 39 residential units and 35 lock-up garages. The Group expects to conclude the acquisition of the St Paul’s Bay Site in Q2 2023.
The Mosta project
In Q2 2022, the Group entered into a promise of sale agreement for the purchase of the Mosta site, which it intends to develop into 12 residential units and 2 lock-up garages. The Group expects to conclude the acquisition of the Mosta Site in Q2 2023.
Principal risks and uncertainties
Although the development works of the hotel and the afore-mentioned projects are progressing as planned, the Company is still subject to several financial risk factors including the market, economic, counter-party, credit and liquidity risks amongst others that may affect the projects and their timely completion.
THE ONA P.L.C.
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2022
_____________________________________________________________________________________________
______________________________________________________________________________________________________
3
Additionally, the directors are monitoring closely inflationary risks resulting from the conflict in Ukraine and the aftermath of the COVID pandemic. The directors are confident that the company has robust measures in place to mitigate the likely possible effects of inflationary pressures. Where possible, the board provides principles for the overall risk management as well as policies to mitigate these risks in the most prudent way.
Results and dividends
The results for the period ended 31st December 2022 are shown in the income statement on Page 8. The Group registered a Profit of €1,177,323 (2021 - Profit of €3,360,001), while the Company registered a Profit of €26,650.
The Directors do not recommend the payment of a final dividend.
Directors
The directors of the Company who held office during the year were:
George Muscat (Chairperson)
Cliona Muscat (Executive Director)
Francis X. Gouder (Non-Executive Director)
Alfred Attard (Non-Executive Director)
Dr Ann Marie Agius (Non-Executive Director)
The Company’s Articles of Association do not require any directors to retire.
Company secretary
The Company's Secretary is Mr Justin Cutajar.
Statement of Directors’ responsibilities
The directors are required by the Companies Act (Chap. 386) to prepare financial statements in accordance with International Financial Reporting Standards as adopted by the EU which give a true and fair view of the state of affairs of the parent company and the group at the end of each financial year and of the profit or loss of the parent company and the group for the year then ended. In preparing the financial statements, the directors are responsible to:
-Ensure that the financial statements have been drawn up in accordance with International Financial Reporting Standards as adopted by the European Union;
-adopt the going concern basis unless it is inappropriate to presume that the company will continue in business;
-make judgements and estimates that are reasonable and prudent;
-account for income and charges relating to the accounting period on the accruals basis;
-report comparative figures corresponding to those of the preceding accounting period.
The directors are also responsible for ensuring that proper accounting records are kept which disclose with reasonable accuracy at any time the financial position of the parent company and the group and which enable the directors to ensure that the financial statements comply with the Companies Act (Chap. 386). This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements
that are free from material misstatement, whether due to fraud or error. The directors are also responsible for safeguarding the assets of the company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
THE ONA P.L.C.
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2022
_____________________________________________________________________________________________
______________________________________________________________________________________________________
4
The Annual report and consolidated financial statements of The Ona p.l.c. for the period ending 31 December 2022 are made available on the company’s website. The directors are responsible for the maintenance and integrity of the financial statements on the website, in view of their responsibility for the controls over, and the security of, the website. Access to information published on the Company’s website is available in other countries and jurisdictions, where legislation governing the preparation and dissemination of financial statements may differ from requirements or practice in Malta.
Statement by the Directors pursuant to Listing Rule 5.68
The directors declare that to the best of their knowledge, the financial statements prepared in accordance with the applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the parent company and its subsidiaries included in the consolidation taken as a whole, and that this report includes a fair review of the performance of the business and the position of the Company and its subsidiaries included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
Going Concern statement pursuant to Listing Rule 5.62
The directors, at the time of approving the financial statements, consider the going concern assumption in the preparation of the financial statements as appropriate as at the date of authorisation and believe that no material uncertainty that may cast significant doubt about the company’s and the group’s ability to continue as a going concern exists as at that date.
Auditor
VCA Certified Public Accountants have expressed their willingness to continue in office and a resolution proposing their reappointment will be put before the members at the next annual general meeting.
Signed on behalf of the Board of Directors on 28 April 2023 by Mr. George Muscat (Chairman) and Ms. Cliona Muscat (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Financial Report.
THE ONA P.L.C.
STATEMENT OF COMPLIANCE WITH PRINCIPLES OF GOOD CORPORATE GOVERNANCE
FOR THE YEAR ENDING 31 DECEMBER 2022
_____________________________________________________________________________________________
______________________________________________________________________________________________________
5
1. Introduction
Pursuant to the requirements of the Listing Rules issued by the Listing Authority of the Malta Financial Services Authority, The Ona p.l.c. hereby reports on the extent to which the company has adopted the “Code of Principles of Good Corporate Governance” (the “Code”) appended to Chapter 5 of the Listing rules as well as the measures adopted to ensure compliance with these same principles.
The Ona p.l.c. acts as a finance company to the Group and as such has minimal operations. Its primary function is the lending and monitoring of the proceeds of the public bond to the Group. The Ona p.l.c. has no employees other than the directors and the company secretary.
2. Compliance with the Code
The Board of Directors of The Ona p.l.c. (The Company) believe in the adoption of the Code and has endorsed it except where the size and/or circumstances of the company are deemed by the Board not to warrant the implementation of specific recommendations.
Additionally, the Board recognises that, by virtue of Listing Rule 5.101, the company is exempt from making available the information required in terms of Listing Rules 5.97.1 to 5.97.3, 5.97.6 to 5.97.8.
Moreover, the Board also acknowledges that the requirements emanating from Directive 2014/95/EU as published in Circular 05/16 – Transposition of Directive 2014/95/EU do not apply to the company since it does not classify as a ‘large
company’ under the definition of the Directive.
3. The Board of Directors
The board of directors is responsible for the Company’s affairs, for the overall direction of the company and being
dynamically involved in supervising the systems of control and financial reporting.
The Board meets at least four times annually and is currently composed of five members, three of whom are independent from the Company or related parties.
As at date of this statement, the Board of Directors is composed as follows:
George Muscat (Chairperson)
Cliona Muscat (Executive Director)
Francis X. Gouder (Non-Executive Director)
Alfred Attard (Non-Executive Director)
Dr Ann Marie Agius (Non-Executive Director)
There is no CEO role required in the Company due to the nature of the Company and as such the board carries out the
policy decisions regarding the Company.
THE ONA P.L.C.
STATEMENT OF COMPLIANCE WITH PRINCIPLES OF GOOD CORPORATE GOVERNANCE
FOR THE YEAR ENDING 31 DECEMBER 2022
_____________________________________________________________________________________________
______________________________________________________________________________________________________
6
4. Committees
i. Audit Committee
In accordance with the Listing Rules, The Ona p.l.c. has established an Audit Committee, which terms of reference are based on the principles set out by the said Listing Rules. The Audit Committee is entirely composed of independent, non-executive directors. At present, Francis X. Gouder acts as chairperson, whilst Alfred Attard and Dr Ann Marie Agius act as members. In compliance with the Listing Rules, Alfred Attard is the independent Non- Executive Director who is competent in accounting and auditing matters having previously served in various senior posit ions in several financial institutions.
The committee’s primary object is to assist the board in fulfilling its supervisor and monitoring responsibility by reviewing the company’s financial statements and disclosures, monitoring the system of internal control established by management as well as the audit process. The audit committee formally convened two times during the financial period ending 31st December 2022.
ii. Remuneration and Nomination Committees
Under present circumstances, the board does not consider it necessary to appoint a remuneration committee and a nomination committee as decisions on these matters are taken at shareholder level and by the board itself.
iii. Evaluation of the board’s performance
Under present circumstances, the board does not consider it necessary to appoint a committee to carry out a performance evaluation of its role as the board’s performance is constantly under the scrutiny of the shareholders of the company.
5. Remuneration Statement
In terms of Rule 8.A.4 of the Code of Principles of Good Corporate Governance contained in Appendix 5.1 of the Listing Rules of the Listing Authority (the “Code”), the Company is to include a remuneration statement in its annual report which should include details of the remuneration policy of the Company in respect of the financial packages of members of the Board of Directors of the Company.
The remuneration payable to directors of the Company consists of fixed remuneration only. No part of the remuneration paid to the directors is performance-based and none of the directors (in their capacity as directors of the Company) are entitled to profit-sharing, share options or pension benefits. The directors do not receive any form of monetary or non monetary perks or benefits. There were no changes to this policy from the previous year and the Company does not intend to change the policy in the foreseeable future.
Remuneration paid to the Directors by the subsidiaries of the Company for the period from 15th May 2022 to 31st
December 2022 amounted to €11,268 (2021 - NIL).
6. Internal Control
While the Board is ultimately responsible for the company’s internal controls as well as their effectiveness, authority to operate the company is delegated to the Executive Directors. The company’s system of internal controls has been drawn up through the Internal Control Manual to manage risks in the most appropriate manner. Procedures are in place for the Company to control, monitor and assess risks and their implications through ongoing cash flow monitoring reports and strategic plans which are presented to the Executive Directors.
THE ONA P.L.C.
STATEMENT OF COMPLIANCE WITH PRINCIPLES OF GOOD CORPORATE GOVERNANCE
FOR THE YEAR ENDING 31 DECEMBER 2022
_____________________________________________________________________________________________
______________________________________________________________________________________________________
7
7. Relations with the bondholders and the market
The market and bondholders alike are kept up to date with all relevant information, the Annual Report and Financial statements, as well as, via company announcements made through the Malta Stock Exchange and on the company’s website.
8. Institutional shareholders
This principle is not applicable since the company has no institutional shareholders.
9. Conflicts of interest
The directors always act in the interest of the Company and its shareholders. If any director has a conflict of interest, he will not be allowed to vote on the matter at hand. Furthermore, the board of directors and management of the company is in compliance with the obligations towards the rules of Insider Dealing.
10. Corporate Social Responsibility
The Group adhered to accepted principles of corporate social responsibility in its day to day practices by acting ethically in the day to day management of the business and strives to improve the quality of life of the workforce as well as of the society at large. The Group also regularly supports charitable causes.
Signed on behalf of the Board of Directors on 28 April 2023 by Mr. George Muscat (Chairperson) and Ms. Cliona Muscat (Director).
THE ONA P.L.C.
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
_____________________________________________________________________________________________
______________________________________________________________________________________________________
8
Revenue
Property sales
4
5,960,500
940,000
-
Interest income
5
-
-
447,839
5,960,500
940,000
447,839
Costs
Direct costs
9
(136,729)
(35,650)
-
Cost of sales
9
(4,331,125)
(695,362)
-
Gross profit
1,492,646
208,988
447,839
Administrative expenses
9
(51,323)
(28,185)
(21,025)
Other operating income
7
104,210
255,770
-
Gain on sale of fixed assets
12
-
2,744,895
-
Earnings before interest, tax and depreciation
1,545,533
3,181,468
426,814
Finance costs
8
(48,120)
(88,307)
(413,806)
Gains on financial instrument at FVOCI reclassified to profit or loss upon derecognition
19
13,195
-
13,195
Investment income
6
21
18
5,000
Gain on revaluation of investment property
25
-
836,052
-
Profit before taxation
1,510,629
3,929,231
31,203
Tax charge
11
(333,306)
(569,230)
(4,553)
Profit after taxation
1,177,323
3,360,001
26,650
Total comprehensive income for the year
1,177,323
3,360,001
26,650
Profit attributable to:
Equity holders of the Company
1,177,323
3,360,001
26,650
Group
Group
Company
(11 months)
2022
2021
2022
€
€
€
Notes
THE ONA P.L.C.
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
_____________________________________________________________________________________________
______________________________________________________________________________________________________
9
Group
Group
Company
2022
2021
2022
ASSETS
Notes
€
€
€
Non-current assets
Property, plant and equipment
13
5,081
10,161
-
Property, plant and equipment under development
14
18,756,400
-
-
Investment property
15
2,700,000
2,700,000
-
Investment in subsidiaries
16
-
-
4,062,486
Trade and other receivables
18
-
-
14,376,923
21,461,481
2,710,161
18,439,409
Current assets
Inventories
17
3,599,455
5,026,641
-
Trade and other receivables
18
2,140,487
3,091,278
3,724,614
Financial assets through OCI
19
-
-
-
Cash at bank and in hand
27
2,296,435
1,015,834
1,314,625
8,036,377
9,133,753
5,039,239
TOTAL ASSETS
29,497,858
11,843,914
23,478,648
EQUITY AND LIABILITIES
Equity
Called up issued share capital
24
7,271,693
301,200
7,271,693
Other reserves
26
(3,386,933)
-
373,153
Fair value gain reserve
25
836,052
836,052
-
Retained earnings
3,728,200
2,550,877
26,650
Total equity
8,449,012
3,688,129
7,671,496
Liabilities
Non-current liabilities
Long term borrowings
23
17,333,273
2,495,483
15,406,456
Other financial liabilities
21
-
268,229
-
Deferred tax liability
28
216,000
216,000
-
17,549,273
2,979,712
15,406,456
Current liabilities
Short term borrowings
23
57,500
317,274
-
Other financial liabilities
21
245,983
3,347,009
-
Trade and other payables
20
3,145,701
1,460,568
396,143
Current tax liability
22
50,389
51,222
4,553
3,499,573
5,176,073
400,696
Total liabilities
21,048,846
8,155,785
15,807,152
TOTAL EQUITY AND LIABILITIES
29,497,858
11,843,914
23,478,648
The financial statements were approved and authorised for issue by the Board of Directors on 28 April 2023 The financial statements were signed on behalf of the Board of Directors by Ms. Cliona Muscat (Director) and Mr. George Muscat (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Report and Financial Statement.
THE ONA P.L.C.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
_____________________________________________________________________________________________
______________________________________________________________________________________________________
10
______________________________________________________________________________________________________
11
Group
Group
Company
2022
2021
2022
Cash flows from operating activities
€
€
€
Profit before taxation
1,510,629
3,929,231
31,203
Adjustments for:
Depreciation
5,081
5,081
-
Profit on disposal of assets
-
(2,744,895)
-
Gain on revaluation of investment property
-
(836,052)
-
Amortisation of bond issue costs
25,806
-
25,806
Operating profit before working capital changes
1,541,516
353,365
57,009
Movement in inventory
1,427,186
(2,631,496)
-
Movement in receivables
1,026,390
(2,955,655)
-
Movement in payables
1,685,133
1,401,368
396,142
Cash generated from/(used in) operations
5,680,225
(3,832,418)
453,151
Income tax paid
(334,139)
(291,221)
-
Net cashflows generated from/(used in) operating activities
5,346,086
(4,123,639)
453,151
Cash flows from investing activities
Proceeds from sale of fixed assets
-
5,000,000
-
Payments to acquire property, plant and equipment under development
(18,756,400)
-
-
Net cashflows (used in)/generated from investing activities
(18,756,400)
5,000,000
-
Cash flows from financing activities
Cash issue of shares pre-capital reorganisation
                  2,400 
-
1,200
Movement in related party balances
 (343,829)
136,797
(154,049)
Movement in shareholders' loans
              480,134 
-
-
Movement in other loans
-
584,111
-
Movement in bank loans
(812,892)
(770,395)
-
Bonds proceeds
        16,000,000 
-
16,000,000
Bond proceeds advanced to subsidiaries
-
-
(14,366,328)
Payment of bond issue costs
(619,349)
-
(619,349)
Net cash generated from/(used in) financing activities
14,706,464
(49,487)
861,474
Net movement in cash and cash equivalents
1,296,150
826,874
1,314,625
Cash and cash equivalents at the beginning of the year
1,000,285
173,411
-
Cash and cash equivalents at the end of the year
27
2,296,435
1,000,285
1,314,625
THE ONA P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
_____________________________________________________________________________________________
______________________________________________________________________________________________________
12
1.Basis of preparation
Reporting entity
The Ona p.l.c. (the ‘Company’) is a public limited liability which was incorporated in Malta on 20 January 2022. The Company’s registration number is C-101370 and the Company’s registered office is GAP Holdings Head Office, Ċensu Scerri Street, Tignè, Sliema SLM 3060 
The Ona p.l.c. and its subsidiaries referred to as ‘the Group’ principal activities include the rental and acquisition of immovable properties for development and sale.
The consolidated financial statements include the financial statements of The Ona p.l.c. and its subsidiaries. The Company and the subsidiaries are together referred to as ‘the Group’.
  
The financial statements of the Company and the consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and in accordance with the requirements of the Companies Act (Cap. 386). 
These financial statements have been prepared under the historical cost convention basis as modified by the fair valuation of the investment property. The functional currency of the Company is the Euro which is also the presentation currency of the Group.  
Going concern basis
These financial statements have been prepared under the historical cost basis and on the going concern basis.
As at date of signing these financial statements, bases on the information currently available, the Directors confirm that they have reasonable expectation that the Group and the Company have adequate resources to continue in operation for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing these financial statements.
Group reorganisation
The Company was incorporated on 20 January 2022 under the terms of the Maltese Companies Act, 1995. On 28th April 2022, the Company acquired 100% direct shareholding in The Ona Property Development Ltd. and 100% direct shareholding in The Ona Real Estate Ltd. The Ona Property Development Ltd. and The Ona Real Estate Ltd. were already in existence and operating. The substance of the acquisition was that of a group restructuring by virtue of which the Company became the new parent company of the Group. This transaction has been accounted for in the consolidated financial statements as a reorganisation, and these have been compiled as though The Ona p.l.c. was already the parent Company of the Group from incorporation.
The accounting policies are consistent with the policies previously adopted by The Ona p.l.c.’s subsidiaries except for reorganisation between Group entities under common control are accounted for using the reorganisation method of accounting. Under the reorganisation method of accounting, assets and liabilities are incorporated at the predecessor carrying values, which are the carrying amounts of assets and liabilities of the acquired entity’s pre organisation financial statements. No goodwill arises in reorganisation accounting, and any difference between the consideration given and the aggregate book value of the assets and liabilities of the acquired entity is included in equity. The financial statements incorporate the acquired entities’ full year results, including comparatives, as if the pre-reorganisation structure was already in place at the commencement of the comparative period. As a result of this group restructuring, the Company became the new parent company of the Group.
Standards, interpretations and amendments to published standards effective in 2022
In 2022, the Group adopted new standards, amendments and interpretations to existing standards that are mandatory for the Group’s accounting period beginning on 1 January 2022.
Other accounting amendments effective as from 1 January 2022 did not have a significant impact on the Group’s financial results, position, cashflows and accounting policies. 
THE ONA P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
_____________________________________________________________________________________________
______________________________________________________________________________________________________
13
1.Basis of preparation (continued)
2.Principal accounting policies
A summary of the more important accounting policies, which have been applied consistently, is set out below:
Basis of consolidation
(i) Subsidiaries
A subsidiary is an entity that is controlled by the Company. The Company controls an investee when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
The Group financial statements include the financial statements of the parent Company and all its subsidiaries. The results of the subsidiaries acquired or disposed of during the period are included in the Group statement of profit or loss and other comprehensive income from the date of their acquisition or up to date of their disposal.
Profit or loss and each component of OCI are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses, cash flows and any unrealised gains relating to transactions between members of the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises the related assets (including any goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value.
In the Company’s financial statements, investments in subsidiaries are accounted for on the basis of the direct equity interest and are stated at pre organisation amounts less any accumulated impairment losses. Dividends from the investment are recognised in profit or loss. 
Property, plant & equipment
The cost of an item of property, plant and equipment is recognised as an asset when it is probable that the future economic benefits that are associated with the asset will flow to the entity and the cost can be measured reliably. Property, plant and equipment are initially measured at cost comprising the purchase price, any costs directly attributable to bringing the assets to a working condition for their intended use, and the costs of dismantling and removing the item and restoring the site on which it is located. Subsequent expenditure is capitalised as part of the cost of property, plant and equipment only if it enhances the economic benefits of an asset in excess of the previously assessed standard of performance, or it replaces or restores a component that has been separately depreciated over its useful life.
After initial recognition, property, plant and equipment is carried under the cost model, that is at cost less any accumulated depreciation and any accumulated impairment losses.
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2.Principal accounting policies (continued)
Depreciation is calculated to write down the carrying amount of the asset on a systematic basis over its expected useful life. Depreciation of an asset begins when it is available for use and ceases at the earlier of the date that the asset is classified as held for sale or the date that the asset is derecognised. The depreciation charge for each period is recognised in profit or loss.
The rates of depreciation used for other items of property, plant and equipment are the following:
Years
Immovable property
50
Air conditioners
6
Freehold land is not depreciated as it is deemed to have an indefinite life. The depreciation method applied, the residual value and the useful life are reviewed, and adjusted if appropriate, at the end of each reporting period.
The depreciation method applied, the residual value and the useful life are reviewed on a regular basis and when necessary, revised with the effect of any changes in estimate being accounted for prospectively. 
Property, plant and equipment are derecognised on disposal or when no future economic benefits are expected from their use or disposal. Gains and losses arising from derecognition represent the difference between the net proceeds (if any) and the carrying amount and are included in profit or loss in the period of derecognition.
Investment property
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Group, is classified as investment property. Investment property comprises freehold and leasehold land and buildings, and land and buildings held under long-term operating leases.
Investment property is initially measured at cost, including transaction costs. Subsequent to initial recognition, investment property is stated at fair value at the end of the reporting period. Gains or losses arising from changes in the fair value of investment property are recognised in profit or loss in the period in which they arise. Fair value is based on active market prices, adjusted, if necessary, for difference in the nature, location or condition of the specific asset. If this information is not available, the Group uses alternative valuation methods such as recent prices on less active markets or discontinued cash flow projections. These valuations are reviewed periodically by the Group directors.
The fair value of investment property reflects, among other factors, rental income from current leases and assumptions about rental income from future leases in the light of current market conditions. The fair value also reflects, on a similar basis, any cash outflows that could be expected in respect of the property.
Subsequent expenditure is charged to the asset’s carrying amount only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the profit loss account during the financial period in which they are incurred.
If an investment property becomes owner-occupied, it is reclassified as property, plant and equipment, and its fair value at the date of reclassification becomes its cost for accounting purposes. Property that is being constructed or developed for future use as investment property is classified as property, plant and equipment and is stated at cost until construction or development is complete, at which time it is reclassified and subsequently accounted for as investment property.
THE ONA P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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2.Principal accounting policies (continued)
An item of property, plant and equipment becomes