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THE ONA P.L.C.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31st DECEMBER 2023
Company No. C- 101370
THE ONA P.L.C.
CONTENTS
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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 48
Independent auditors’ report
49 to 55
THE ONA P.L.C.
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2023
_____________________________________________________________________________________________
______________________________________________________________________________________________________
1
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2
the Group are: (i) to hold investment property for rental; (ii) to acquire new sites for residential properties for resale; (iii) to develop and construct properties acquired; and (iv) the operation of the Hotel. The directors do not envisage any changes to the company’s and group’s principal activities in the foreseeable future.
Bond Issue
As at 31st December 2023, the Group had a public listed Bond in issue, namely The Ona p.l.c. €16 million 4.50% Secured Bonds 2028 - 2034 of a nominal value of €100 per Bond issued at par. The Bond was issued pursuant to a Prospectus dated 31st May 2022 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”).
Notes Issue
On 26th June 2023 The Ona p.l.c. issued €5,000,000 6.5% Unsecured Notes 2028 of a nominal value of €1,000 per Note, issued and redeemable at par. The Notes were fully subscribed. In accordance with the Prospectus dated 1st June 2023, the proceeds from the Notes issue were utilised by the Group to finance its property development projects.
Review of business
AC Hotel by Marriott
The 4-star Hotel having 106 rooms and forming part of the “AC by Marriott Hotels" chain of hotels opened its doors on 23rd May 2023 had a very good performance during the period ended 31st December 2023.
Property development projects
The Marsascala Project - Waterbank
As at 31 December 2023, 15 residential units were contracted while the remaining one unit was subject to promise of sale agreement. Revenue generated from the sold units amounted to €5.10 million (€0.94 million in FY2021, €3.30 million in FY2022 and €0.86 million in FY2023). TOPD expects to generate €0.32 million from the last three units.
The Birkirkara project
Development works relating to the Birkirkara Project were 75% completed by 31st December 2023 and are expected to be completed by Q2 2024. TORE expects to generate circa €6.5 million in revenue from this project.
The St Paul’s Bay Project
On 11th October 2023 TOPD acquired the site at St Paul’s Bay and works started during Q1 2024. This project, which comprises 39 residential units and 35 lock-up garages/parking spaces is expected to be completed by Q2 2025.
The Mosta project
On 14th September 2023 TOPD acquired the site at Mosta and works started during Q4 2023. This project, which comprises 12 residential units and 2 lock-up garages/parking spaces is expected to be completed by Q4 2024.
Other developments
The Ona Property Development Ltd. does not have plans to have direct involvement in property development, once current projects are completed. However, in February 2023 a new company was formed by the name of ACMUS Group Limited in which The Ona Property Development Ltd. has 49.99% shareholding. This joint venture entity is with JUEL Group plc.
ACMUS Group Limited’s objective is that of property development and as at 31st December 2023 it acquired two sites one in Mgarr and another in St. Julians. Both projects are at the initial stages of development. The company has entered into Promise of Sale agreements to acquire other properties, some of which will have the final deeds signed in 2024.
THE ONA P.L.C.
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2023
_____________________________________________________________________________________________
______________________________________________________________________________________________________
3
Principal risks and uncertainties
The Company is dependant on the performance of its subsidiaries.
The Company is the finance and holding Company of the Group and does not carry out any trading activities of its own. The Company is therefore dependent on the performance and financial position of its subsidiaries and associate undertakings. In the event that any subsidiary and/or associate underperforms in any one financial year or otherwise experiences adverse fluctuations or volatility in cash flows, liquidity strains or other financial difficulties, such underperformance or adverse financial position would adversely affect the operational and financial results of the Group as a whole and consequently, that of the Company.
As a holding Company, the majority of the Company’s income consists of the dividends and interest on loan receivables it receives from its subsidiaries. The payment of receivables and distribution of dividends is dependent on the cash flows and earnings of the relevant subsidiary.
The business activities carried out by the Group companies are subject to market, economic and financial risks which are mitigated in the most prudent way. These risks are addressed in note 30 to these financial statements.
Results and dividends
The results for the period ended 31st December 2023 are shown in the income statement on Page 8. The Group registered a Profit of €323,151 (2022 - Profit of €1,177,323), while the Company registered a Profit of €13,356 (2022 - €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 (Chairman - deceased on 22 September 2023)
Cliona Muscat (Executive Director)
Justin Cutajar (Executive Director – appointed on 22 September 2023)
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 Dr Karen Coppini.
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;
THE ONA P.L.C.
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2023
_____________________________________________________________________________________________
______________________________________________________________________________________________________
4
-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 Annual report and consolidated financial statements of The Ona p.l.c. for the period ending 31 December 2023 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 29 April 2024 by Mr. Justin Cutajar (Director) 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 2023
_____________________________________________________________________________________________
______________________________________________________________________________________________________
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:
Cliona Muscat (Executive Director)
Justin Cutajar (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 2023
_____________________________________________________________________________________________
______________________________________________________________________________________________________
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, Francis X. Gouder and Alfred Attard are the independent Non- Executive Director who are both competent in accounting and auditing matters having previously served in various senior positions 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 four times during the financial period ending 31st December 2023.
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 1st Jan 2023 to 31st
December 2023 amounted to €18,000 (2022 - €11,268).
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 2023
_____________________________________________________________________________________________
______________________________________________________________________________________________________
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 29 April 2024 by Mr. Justin Cutajar (Director) 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 2023
_____________________________________________________________________________________________
______________________________________________________________________________________________________
8
Revenue
Revenue
4
3,646,721
5,960,500
-
-
Interest income
5
-
-
1,017,280
447,839
3,646,721
5,960,500
1,017,280
447,839
Costs
Direct costs
9
(715,585)
(136,729)
-
-
Cost of sales
9
(793,636)
(4,331,125)
-
-
Gross profit
2,137,500
1,492,646
1,017,280
447,839
Administrative expenses
9
(655,795)
(46,242)
(59,379)
(21,025)
Other operating income
7
120,460
104,210
-
-
Earnings before interest, tax and depreciation
1,602,165
1,550,614
957,901
426,814
Depreciation and amortisation
(511,336)
(5,081)
-
-
Finance costs
8
(536,140)
(48,120)
(959,797)
(413,806)
Gains on financial instrument at FVOCI reclassified to profit or loss upon derecognition
18
-
13,195
-
13,195
Investment income
6
22
21
-
5,000
Dividend income
6
17,164
17,164
Share of loss in associate
15
(33,119)
-
-
-
Profit before taxation
538,756
1,510,629
15,268
31,203
Tax charge
11
(215,605)
(333,306)
(1,912)
(4,553)
Profit after taxation
323,151
1,177,323
13,356
26,650
Total comprehensive income for the year
323,151
1,177,323
13,356
26,650
Profit attributable to:
Equity holders of the Company
323,151
1,177,323
13,356
26,650
Group
Group
Company
Company
(12 months)
(11 months)
2023
2022
2023
2022
Notes
THE ONA P.L.C.
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
_____________________________________________________________________________________________
______________________________________________________________________________________________________
9
Group
Group
Company
Company
2023
2022
2023
2022
ASSETS
Notes
Non-current assets
Property, plant and equipment
12
25,285,517
5,081
-
-
Property, plant and equipment under development
13
-
18,756,400
-
-
Deferred tax asset
27
-
-
663
-
Investment property
14
2,700,000
2,700,000
-
-
Investment in associate
15
1,623,279
-
-
Investment in subsidiaries
15
-
-
4,062,486
4,062,486
Trade and other receivables
17
-
-
19,491,929
14,376,923
29,608,796
21,461,481
23,555,078
18,439,409
Current assets
Inventories
16
9,174,505
3,599,455
-
-
Trade and other receivables
17
1,053,451
2,140,487
3,493,493
3,724,614
Financial assets through OCI
18
991,504
-
991,504
-
Cash at bank and in hand
1,460,387
2,296,435
552,860
1,314,625
12,679,847
8,036,377
5,037,857
5,039,239
TOTAL ASSETS
42,288,643
29,497,858
28,592,935
23,478,648
EQUITY AND LIABILITIES
Equity
Called up issued share capital
23
7,271,693
7,271,693
7,271,693
7,271,693
Other reserves
25
(3,386,933)
(3,386,933)
373,153
373,153
Fair value gain reserve
24
836,052
836,052
-
-
Retained earnings
4,051,351
3,728,200
40,006
26,650
Total equity
8,772,163
8,449,012
7,684,852
7,671,496
Liabilities
Non-current liabilities
Long term borrowings
22
26,474,373
17,333,273
20,331,765
15,406,456
Deferred tax liability
27
324,081
216,000
-
-
26,798,454
17,549,273
20,331,765
15,406,456
Current liabilities
Short term borrowings
22
1,446,124
57,500
-
-
Other financial liabilities
20
276,338
245,983
-
-
Trade and other payables
19
4,976,012
3,145,701
574,835
396,143
Current tax liability
21
19,552
50,389
1,483
4,553
6,718,026
3,499,573
576,318
400,696
Total liabilities
33,516,480
21,048,846
20,908,083
15,807,152
TOTAL EQUITY AND LIABILITIES
42,288,643
29,497,858
28,592,935
23,478,648
The financial statements were approved and authorised for issue by the Board of Directors on 29 April 2024 The financial statements were signed on behalf of the Board of Directors by Ms. Cliona Muscat (Director) and Mr. Justin Cutajar (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 2023
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______________________________________________________________________________________________________
10
ShareOtherFair valueRetained
CapitalReservesGain reserveEarningsTotal
Group
As at 1 January 2022301,200-836,0522,550,8773,688,129
Comprehensive income
Profit for the period---1,177,3231,177,323
301,200-836,0523,728,2004,865,452
Transactions with owners
Issue of share capital 1,200---1,200
Capitalisation of loans 3,581,160---3,581,160
3,582,360---3,582,360
Adjustments relating to reorganisation
Cash issue of shares of subsidiary before reorganisation1,200---1,200
Reorganisation of group3,386,933(3,386,933)---
3,388,133(3,386,933)--1,200
Balance at 31 December 20227,271,693(3,386,933)836,0523,728,2008,449,012
Comprehensive income
Profit for the period---323,151323,151
Balance at 31 December 20237,271,693(3,386,933)836,0524,051,3518,772,163
ShareOtherFair valueRetained
CapitalReservesGain reserveEarningsTotal
Company