CPHCL FINANCE P.L.C.

 

Annual Financial Report and Financial Statements

For the period ended 31 December 2025

 

 

 

 

Company registration number C 25104

Contents

Directors’ report  

 

Statement by the directors on the financial statements and other information included in the annual financial report

 

Directors’ statement of compliance with the Code of Principles of Good Corporate Governance

 

Other disclosures in terms of Capital Markets Rules

 

Statement of total comprehensive income

 

Statement of financial position

 

Statement of changes in equity

 

Statement of cash flows

 

Notes to the financial statements

 

Independent auditor’s report

 

 

Directors’ report

 

The directors present their report of CPHCL Finance p.l.c. (the “Company”), for the period ended 31 December 2025.

 

Principal activities

 

The principal activity of the Company is to finance the ownership, development and operation of hotels, resorts and leisure facilities, forming part of the CPHCL Group, of which it is a member.

 

The Company is a special purpose vehicle set up for financing transactions of CPHCL Group. It raised such finance mainly through the issue of bonds, which are quoted on the Malta Stock Exchange and guaranteed by CPHCL Company Limited, (CPHCL), to whom the proceeds from their issue have been advanced.

 

Review of the business

 

During the period under review, The Board approved a change of year-end from 28 February to 31 December. These financial statements cover a ten-month period from 1 March 2025 to 31 December 2025. During the financial period under review, the Company registered a profit of €19,030. The Company’s financial position as at 31 December 2025 is set out in the statement of financial position.

 

By virtue of a prospectus dated 12 November 2025, the company successfully issued €45,000,000 5.35% unsecured bonds maturing in 2035. €40,000,000 of the proceeds were utilised by the Company to purchase the maturing 2016 Bonds for cancellation and for the purpose of redeeming any exchangeable bonds remaining in issue as at the redemption date of 12 April 2026 as disclosed in more detail in Note 12. The remaining balance was used to finance existing and prospective capital expenditure projects to be undertaken by CPHCL Group.

 

The corresponding loan to the parent company CPHCL is subject to a fixed interest rate of 5.55% per annum paid annually, with the principal amount repayable by not later than 11 December 2035.

 

The finance income and finance costs for the period amounted to €1,559,605 and €1,461,749 respectively.

 

Results and dividends

The financial results of the company are set out in the statement of comprehensive income.  The directors do not recommend the payment of a dividend. The directors propose that the balance of retained earnings amounting to €46,775 to be carried forward to the next financial year.  

 

Guarantor’s performance for 2025

The financial statements of CPHCL, the guarantor of the bonds issued by the company show a net asset position of €998.7 million as at 31 December 2025.   

 

The Guarantor’s financial results for the period ended 31 December 2025 show a profit after tax of €34.6 million. 

 

 

Directors

 

The following have served as directors of the Company:

 

Mr Frank Xerri de Caro (Chairman) – resigned 23 January 2026

Mr Mario P. Galea

Mr Alfred Camilleri – resigned 23 January 2026

Mr Jean Pierre Schembri (appointed Chairman from 23 January 2026)

Ms Rachel Stilon

Mr Michel Cordina – appointed 23 January 2026

Dr Luca Vella – appointed 23 January 2026

 

 

In accordance with the Company’s Articles of Association, the present directors remain in office.

 

Events after the end of the reporting period

 

No adjusting or significant non-adjusting events have occurred between the reporting date and the date of authorisation.

 

Future developments

 

The Company intends to continue acting as a finance company on behalf of its parent company, CPHCL Company Limited.

 

Risk and uncertainties

 

The main risk of the Company is that CPHCL, as borrower, does not repay its loans and interest. The Directors of the Company are provided with oversight of CPHCL’s cash flow forecasts on a regular basis enabling them to monitor the evolution of these cash flows. The most significant financial risks as well as risk management policies are included in Note 16 of these financial statements.

 

 

Going concern statement pursuant to Capital Markets Rule 5.62

 

After making due enquiries, the directors have a reasonable expectation, at the time of approving the financial statements, that the company has adequate resources to continue in operational existence for the foreseeable future.  For this reason, the directors continue to adopt the going concern basis in preparing the financial statements.

 

Furthermore, the Boards of Directors of CPHCL Finance plc. are comfortable with the state and performance of the guarantor and the guarantor’s ability and commitment to support the company if the need arises.

 

 

 

Statement of directors’ responsibilities

 

The directors are required by the Maltese Companies Act (Cap. 386), to prepare financial statements which give a true and fair view of the state of affairs of the company as at the end of each reporting period and of the profit or loss for that period. 

 

 In preparing the financial statements, the directors are responsible for: 

 

•

ensuring that the financial statements have been drawn up in accordance with International Financial Reporting Standards as adopted by the EU;

•

selecting and applying appropriate accounting policies;

•

making accounting estimates that are reasonable in the circumstances;

•

ensuring that the financial statements are prepared on the going concern basis unless it is inappropriate  to presume that the company will continue in business as a going concern.

 

The directors are also responsible for designing, implementing and maintaining 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, and that comply with the Maltese Companies Act (Cap. 386).  They 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 financial statements of CPHCL Finance p.l.c. for the period ended 31 December 2025 are included in the Annual Financial Report 2025, which is made available on the company’s website. The directors are responsible for the maintenance and integrity of the Annual Financial Report on the website in view of their responsibility for the controls over, and the security of, the website.  Access to information published on the Organisation’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. 

 

The directors confirm that, to the best of their knowledge: 

 

•

the financial statements give a true and fair view of the financial position of the company as at 31 December  2025,  and  of  its  financial  performance  and  its  cash  flows  for  the  period  then  ended,  in accordance with International Financial Reporting Standards as adopted by the EU; and

•

the Directors’ Report includes a fair review of the development and performance of the business and the position of the company, together with a description of the principal risks and uncertainties that the company faces.

 

Auditor

 

A resolution proposing the appointment of the auditor of the Company will be submitted at the forthcoming Annual General Meeting.

 

Signed on behalf of the Board of Directors on 28 April 2026 by Jean Pierre Schembri (Chairman) and Mario Galea (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Financial Report.

 

Registered Office:

22, Europa Centre

John Lopez Street

Floriana FRN 1400

Malta

 

 

 

Statement by the directors on the financial statements and other information included in the annual financial report

 

Pursuant to Capital Markets Rule 5.68, we, the undersigned, declare that to the best of our knowledge, the financial statements included in the Annual Financial Report, and prepared in accordance with the requirements of International Financial Reporting Standards as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Company, and that this report includes a fair review of the development and performance of the business and position of the Company, together with a description of the principal risks and uncertainties that it faces.

 

Directors’ statement of compliance with the Code of Principles of Good Corporate Governance

 

Listed companies are subject to The Code of Principles of Good Corporate Governance (the “Code”). The adoption of the Code is not mandatory, but listed companies are required under the Capital Markets Rules issued by MFSA to include a Statement of Compliance with the Code in their Annual Financial Report, accompanied by a report of the independent auditor.

 

The board of directors (the “directors” or the “board”) of CPHCL Finance p.l.c. (the “Company”) restate their support for the Code and note that the adoption of the Code has resulted in positive effects to the Company.

 

The board considers that during the reporting period, the Company has been in compliance with the Code to the extent that was considered adequate with the size and operations of the Company. Instances of divergence from the Code are disclosed and explained below.

 

COMPLIANCE WITH THE CODE

 

Principles 1 and 4: The board

 

The board of directors is entrusted with the overall direction and management of the Company, including the establishment of strategies for future development, and the approval of any proposed acquisitions by the Company in pursuing its investment strategies.

 

Its responsibilities also involve the oversight of the Company’s internal control procedures and financial performance, and the review of business risks facing the Company, ensuring that these are adequately identified, evaluated, managed and minimised. All the directors have access to independent professional advice at the expense of the Company, should they so require.

 

Further to the relevant section in Appendix 5.1 to the Capital Markets Rules the board of directors acknowledge that they are stewards of the Company’s assets and their behaviour is focused on working with management to enhance value to the shareholders.

 

The board is composed of persons who are fit and proper to direct the business of the Company with the shareholders as the owners of the Company.

 

All directors are required to:

 

•

Exercise prudent and effective controls which enable risk to be assessed and managed to achieve continued prosperity to the company;

•

Be accountable for all actions or non-actions arising from discussion and actions taken by them or their delegates;

•

Determine the Company’s strategic aims and the organizational structure;

•

Regularly review management performance and ensure that the Company has the appropriate mix of financial and human resources to meet its objectives and improve the economic and commercial prosperity of the company;

•

Acquire a broad knowledge of the business of the Company;

•

Be aware of and be conversant with the statutory and regulatory requirements connected to the business of the Company;

•

Allocate sufficient time to perform their responsibilities; and

•

Regularly attend meetings of the board. 

 

In terms of Capital Markets Rules 5.117 – 5.134 the board has established an Audit Committee to monitor the Company’s present and future operations, threats and risks in the external environment and current and future strengths and weaknesses. The Audit Committee ensures that the Company has the appropriate policies and procedures in place to ensure that the Company maintains the highest standards of corporate conduct, including compliance with applicable laws, regulations, business and ethical standards. The Audit Committee has a direct link to the board and is represented by the Chairman of the Audit Committee in all board meetings.

 

Audit committee

 

The Audit Committee’s primary objective is to assist the board in fulfilling its oversight responsibilities over the financial reporting processes, financial policies and internal control structure. The committee is made up of a majority of non-executive directors and reports directly to the board of directors. The committee oversees the conduct of the internal and external audits and acts to facilitate communication between the board, management and, upon the direct request of the Audit Committee, the internal audit team and the external auditor.

 

During the period under review, the committee met four times. The internal and external auditors were invited to attend these meetings. The number of Audit Committee meetings attended by members for the period under review is as follows:

 

Mr Alfred Camilleri

3

Mr Frank Xerri de Caro

3

Mr Mario P. Galea

4

 

Mr Mario P. Galea, a non-executive director, acts as Chairman, whilst Mr Frank Xerri de Caro and Mr Alfred Camilleri acted as members. Ms Krystle Ellul acts as secretary to the committee.

 

The board of directors, in terms of Capital Markets Rule 5.118, has indicated Mr Mario P. Galea as the independent non-executive member of the Audit Committee who is considered to be competent in accounting and/or auditing in view of his considerable experience at a senior level in the banking field.

 

The Audit Committee is also responsible for the overview of the internal audit function. The role of the internal auditor is to carry out systematic risk-based reviews and appraisals of the operations of the Company (as well as of the subsidiaries and associates of the Group) for the purpose of advising management and the board, through the Audit Committee, on the efficiency and effectiveness of management policies, practices and internal controls. The function is expected to promote the application of best practices within the organisation.

 

The directors are fully aware that the close association of the Company with CPHCL Company Limited and its other subsidiaries is central to the attainment by the Company of its investment objectives and implementation of its strategies. The Audit Committee ensures that transactions entered into with related parties are carried out on an arm’s length basis and are for the benefit of the Company, and that the Company and its subsidiaries accurately report all related party transactions in the notes to the financial statements.

 

Pursuant to Articles 16 and 17 of Title III of the provisions of the Statutory Audit Regulations, the Audit committee has been entrusted with overseeing the process of appointment of the statutory auditors or audit firms.

 

 

Principle 2: Chairman and chief executive

 

Until 23 January 2026, the role of Chairman of the Board of Directors was carried out by Mr Frank Xerri de Caro, an independent, non-executive director. As from 23 January 2026, the role of Chairman of the Board of Directors is carried out by Mr Jean Pierre Schembri, an executive director. The role of Chief Executive Officer is carried out by Ms Rachel Stilon, an executive director.

 

The Chairman is responsible to:

 

•

Lead the Board and set its agenda;

•

Ensure that the directors of the board receive precise, timely and objective information so that they can take sound decisions and effectively monitor the performance of the company;

•

Ensure effective communication with shareholders; and

•

Encourage active engagement by all members of the board for discussion of complex or contentious issues.

 

Principle 3: Composition of the board

 

The board of directors consists of two executive directors and three non-executive directors. The present mix of executive and non-executive directors is considered to create a healthy balance and serves to unite all shareholders’ interests, whilst providing direction to the Company’s management to help maintain a sustainable organisation.

 

The non-executive directors constitute a majority on the board and their main functions are to monitor the operations of the executive directors and their performance as well as to analyse any investment opportunities that are proposed by the executive directors. In addition, the non-executive directors have the role of acting as an important check on the possible conflicts of interest of the executive directors, which may exist as a result of their dual roles as executive directors of the Company and their roles as officers of the Company’s parent company, CPHCL Company Limited, and its other subsidiaries.

For the purpose of Capital Markets Rules 5.118 and 5.119, Mr Frank Xerri de Caro (until 23 January 2026), Mr Mario Galea, Dr Luca Vella (from 23 January 2026) and Mr Michel Cordina (from 23 January 2026) are the non-executive directors who are deemed independent. The board believes that the independence of its directors is not compromised because of long service or the provision of any other service to CPHCL Group. Each director is mindful of maintaining independence, professionalism and integrity in carrying out his duties, responsibilities and providing judgement as a director of the Company.

The board considers that none of the independent directors of the Company:

 

a)

are or have been employed in any capacity by the Company;

b)

have or have had, over the past three years, a significant business relationship with the Company;

c)

have received or receives significant additional remuneration from the Company in addition to its director’s fee;

d)

have close family ties with any of the Company’s executive directors or senior employees; and

e)

have been within the last three years an engagement partner or a member of the audit team or past external auditor of the Company.

 

Each of the Directors hereby declares that he undertakes to:

 

a)

maintain in all circumstances his independence of analysis, decision and action;

b)

not to seek or accept any unreasonable advantages that could be considered as compromising his independence; and

c)

clearly express his opposition in the event that he finds that a decision of the Board may harm the Company.

 

The board is made up as follows:

Executive directors

Date of first appointment

Mr Jean Pierre Schembri

17 February 2025

Ms Rachel Stilon

3 April 2023

 

 

Non-executive directors

Date of first appointment

Mr Alfred Camilleri

4 August 2022 (resigned 23 January 2026)

Mr Frank Xerri de Caro

25 April 2005 (resigned 23 January 2026)

Mr Mario P. Galea

15 February 2017

Dr Luca Vella

23 January 2026

Mr Michel Cordina

23 January 2026

 

Ms Krystle Ellul acts as secretary to the board of directors.

 

In accordance with the requirements of the Articles of Association, the term of office of the directors lapsed at the Annual General Meeting held on 29 April 2025, at which date they were re-appointed for a further term.

 

Principle 5: Board meetings

 

The board met four times during the period under review. The number of board meetings attended by directors for the period under review is as follows:

 

Mr Alfred Camilleri

3

Mr Frank Xerri de Caro

3

Mr Mario P. Galea

4

Mr Jean Pierre Schembri

4

Ms Rachel Stilon

4

 

Principle 6: Information and professional development

 

The Company ensures that it provides directors with relevant information to enable them to effectively contribute to board decisions. The Company is committed to provide adequate and detailed induction training to directors who are newly appointed to the Board. The Company pledged to make available to the directors all training and advice as required.

 

Principle 8: Committees

 

Remuneration and Nomination committee

 

The size and structure of the Company and its management are such that, in the opinion of the directors, the establishment of an ad hoc remuneration committee is not warranted. Remuneration policies have therefore been retained within the remit of the Board itself.

 

The Board discusses, reviews and approves the remuneration arrangements of all the directors at least on an annual basis taking cognisance of the contribution of the individual director and effectiveness achieved.

 

The Board takes on the role of periodically assessing the skills, knowledge and experience of individual directors necessary for the board to have the appropriate level of skill, competence and experience that would endow the board with the requisite collective knowledge and skill necessary for the proper functioning of the Company and its oversight by the Board.

 

Principle 9: Relations with shareholders and with the market

 

The Company is highly committed to having an open and communicative relationship with its bondholders and investors. In this respect, over and above the statutory and regulatory requirements relating to the Annual General Meeting, the publication of interim and annual financial statements, the Company seeks to address the diverse information needs of its bondholders and investors by providing the market with regular, timely, accurate, comparable and comprehensive information. 

 

Principle 10: Institutional shareholders

 

The Company ensures that it is constantly in close touch with its principal institutional investors. The Company is aware that institutional investors who are mainly bondholders have the knowledge and expertise to analyse market information and make their independent and objective conclusions of the information available.

 

Institutional investors are expected to give due weight to relevant factors drawn to their attention when evaluating the Company’s governance arrangements in particular those relating to board structure and composition and departure from the Code of Corporate Governance.

 

Principle 11: Conflicts of interest

 

The directors are fully aware of their obligations regarding dealings in securities of the Company as required by the Capital Markets Rules in force during the year.  Moreover, they are notified of blackout periods, prior to the issue of the Company’s interim and annual financial information, during which they may not trade in the Company’s bonds.

 

None of the other Directors of the Company have any interest in the shares of the Company or the Company’s subsidiaries or investees or any disclosable interest in any contracts or arrangements either subsisting at the end of the last financial year or entered into during this financial year, except for as disclosed in Note 15.3.

 

Principle 12: Corporate social responsibility

 

The Company understands that it has an obligation towards society at large to put into practice sound principles of Corporate Social Responsibility (CSR). This responsibility is carried out by its parent company, CPHCL.

 

NON-COMPLIANCE WITH THE CODE

 

Principle 7: Evaluation of the board’s performance

 

Under the 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 always under the scrutiny of the shareholders. The size of the Company’s Board is such that it should enable it to evaluate its own performance without the requirement of setting up an ad-hoc committee for this purpose. The Board shall retain this matter under review over the coming year.

 

Principle 8: Remuneration committee

 

8A. The Board considers that the size and operations of the Company as well as the Board itself, do not warrant the setting up of a remuneration committee to establish the remuneration packages of individual directors. Rather, the Board relies on the constant scrutiny of the Board itself, the Company’s shareholders, the market, and the rules by which the company is regulated as a listing company.

 

8B. The Board considers that the size and operations of the Company do not warrant the setting up of a nomination committee as appointments to the Board are determined by the shareholders of the Company in accordance with the appointment process set out in the Company’s Memorandum and Articles of Association. The Company considers that the members of the Board possess the level of skill, knowledge and experience expected in terms of the Code. Notwithstanding this, the Board intends to keep under review the matter relating to the setting up of a nomination committee.

 

 

Other disclosures in terms of Capital Markets Rules

 

Pursuant to Capital Markets Rule 5.97.6

 

General Meetings

 

The general meeting is the highest decision making body of the Company and is regulated by its Articles of Association. All shareholders registered on the register of members of the Company on a particular record date are entitled to attend and vote at general meetings. A general meeting is called by fourteen days’ notice, which notice must specify the place, day and hour of the meeting, and in case of extraordinary business, the general nature of that business, and shall be accompanied by a statement regarding the effect and scope of such extraordinary business.

 

The quorum of shareholders required is not less than fifty-one per cent (51%) of the nominal value of the share capital in respect of which holders thereof are entitled to attend and vote at the meeting. Voting at any general meeting takes place by a show of hands or a poll where this is demanded. Subject to any rights or restrictions for the time being attached to any class or classes of shares, on a show of hands each shareholder is entitled to one vote and on a poll each shareholder is entitled to one vote for each share carrying voting rights of which he is a holder. Shareholders who cannot participate in the general meeting may appoint a proxy by written notification to the Company in accordance with the Articles of Association of the Company. The instrument of proxy shall be in such form as to allow the shareholder appointing a proxy to indicate how he / she would like his proxy to vote in relation to each resolution. The instrument appointing the proxy shall be deemed to confer authority to demand or join in demanding a poll insofar as the appointed proxy attends the meeting or any adjournment thereof.

 

Statement by the directors pursuant to Capital Markets Rule 5.70.1

 

Contracts of significance with parent company

 

In 2025, the Company provided its parent company, CPHCL Company Limited with a loan, the funds of which were obtained through a bond issued on the Malta Stock Exchange.

 

Pursuant to Capital Markets Rule 5.70.2

 

Company secretary and registered office

 

Krystle Ellul

22 Europa Centre, Floriana FRN 1400, Malta

Telephone (+356) 21 233 141

 

 

 

 

Statement of total comprehensive income

Period from 1 March 2025 to

Year ended

31 December 2025

28 February 2025

Notes

€

€

 

 

Finance income

5

1,559,605

1,780,000

Finance costs

5

(1,461,749)

(1,700,000)

 

 

Net interest earned

97,856

80,000

 

 

Administrative expenses

6

(44,576)

(48,287)

 

 

Profit before tax

53,280

31,713

Tax expense

7

(34,250)

(28,000)

 

 

Profit for the period and total comprehensive income

`19,030

3,713

 

 

 

The notes to the financial statements are an integral part of these financial statements.

 

Statement of financial position

 

31 December

28 February

2025

2025

Notes

€

€

ASSETS

Non-current

 

 

Loans owed by parent company

8

45,000,000

39,910,000

 

 

Total non-current assets

45,000,000

39,910,000

 

 

Current

 

 

Loans owed by parent company

8

12,638,000

-

Other receivables

9

1,767,174

1,983,897

Cash and cash equivalents

10

73,682

79,826

 

 

Total current assets

14,478,856

2,063,723

 

 

 

 

 

 

Total assets

59,478,856

41,973,723

 

 

 

 

 

 

EQUITY

 

 

Share capital

11

250,000

250,000

Retained earnings

46,775

27,745

 

 

Total equity

296,775

277,745

 

 

Non-current liabilities

 

 

Bonds in issue

12

45,000,000

40,000,000

 

 

Total non-current liabilities

 

45,000,000

40,000,000

 

 

 

Current liabilities

 

 

Bonds in issue

12

12,728,000

-

Payables

13

1,454,081

1,695,978

 

 

Total liabilities

59,182,081

41,695,978

 

 

 

 

 

 

Total equity and liabilities

59,478,856

41,973,723

 

The notes to the financial statements are an integral part of these financial statements

 

The financial statements were approved and authorised for issue by the Board of Directors on 28 April 2026. The financial statements were signed on behalf of the Board of Directors by Jean Pierre Schembri (Chairman) and Mario P. Galea (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Financial Report.

 

Statement of changes in equity

 

 

 

Share

Retained

 

 

 

capital

earnings

Total

 

 

€

€

€

 

 

 

 

 

At 1 March 2024

 

250,000

24,032

274,032

 

 

 

 

 

Comprehensive income:

 

 

 

 

Profit for the year

 

-

3,713

3,713

 

 

 

 

 

Total comprehensive income for period

 

-

3,713

3,713

 

 

 

 

 

At 28 February 2025

 

250,000

27,745

277,745

 

 

 

 

 

 

 

 

 

 

At 1 March 2025

 

250,000

27,745

277,745

 

 

 

 

 

Comprehensive income:

 

 

 

 

Profit for the year

 

-

19,030

19,030

 

 

 

 

 

Total comprehensive income for period

 

-

19,030

19,030

 

 

 

 

 

At 31 December 2025

 

250,000

46,775

296,775

 

 

The notes to the financial statements are an integral part of these financial statements.

 

Statement of cash flows

 

 

 

 

 

 

 

 

 

 

Period from 1 March 2025 to

Year ended

 

 

31 December 2025

28 February 2025

 

Notes

€

€

 

 

 

 

Cash flows from operating activities

 

 

 

Cash used in operating activities

14

(40,772)

(27,031)

Tax paid

 

(45,372)

(36,632)

 

 

 

 

Net cash used in operating activities

 

(86,144)

(63,663)

 

 

 

 

Cash flows from investing activities

 

 

 

Interest received

 

1,780,000

1,781,944

 

 

 

 

Net cash generated from investing activities

 

1,780,000

1,781,944

 

 

 

 

Cash flows from financing activities

 

 

 

Interest paid

 

(1,700,000)

(1,700,000)

 

 

 

 

Net cash used in financing activities

 

(1,700,000)

(1,700,000)

 

 

 

 

Net change in cash and cash equivalents

 

(6,144)

18,282

 

 

 

 

Cash and cash equivalents at beginning of year

 

79,826

61,544

 

 

 

 

Cash and cash equivalents at end of year

10

73,682

79,826

 

 

 

 

 

The notes to the financial statements are an integral part of these financial statements.

 

Notes to the financial statements

 

 

1.       General information

 

CPHCL Finance p.l.c. (the ‘Company') is a public limited company incorporated and domiciled in Malta. The address of the company’s registered office and principal place of business is 22, Europa Centre, Floriana, FRN 1400, Malta. The Company is a fully owned subsidiary of CPHCL Company Limited (CPHCL) C257 of the same address.

 

 

2.       Nature of operations

 

The principal activity of CPHCL Finance p.l.c. is to finance the ownership, development, operation and financing of hotels, resorts and leisure facilities, forming part of CPHCL Group, of which it is a member.

 

 

3.       Summary of material accounting policies

 

This note provides a list of the material accounting policies adopted in the preparation of these financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated.

 

3.1      Basis of preparation

 

The board approved a change of year end to 31 December, therefore these financial statements have been prepared for a period of ten months from 1 March 2025 to 31 December 2025. The comparative financial statements have been prepared for a period of 12 months from 1 March 2024 to 28 February 2025.

 

These financial statements, covering the financial period from 1 March 2025 to 31 December 2025 are prepared in accordance with the requirements of International Financial Reporting Standards (IFRS) as adopted by the EU and with the requirements of the Maltese Companies Act (Cap. 386). These financial statements have been prepared under the historical cost basis, unless otherwise stated in the accounting policies.

 

The preparation of financial statements in conformity with IFRSs as adopted by the EU requires the use of certain accounting estimates. It also requires directors to exercise their judgement in the process of applying the Company’s accounting policies (see Note 4 – Critical accounting estimates and judgements).

 

The individual financial statements of the Company are incorporated in the group financial statements of CPHCL, the immediate parent. These consolidated financial statements are prepared in accordance with IFRS and are available for public use.

 

New standards and interpretations not yet adopted

 

Certain new standards, amendments and interpretations to existing standards have been published by the date of authorisation for issue of these financial statements but are not yet effective for the Company’s current accounting period.

 

The Company has not early adopted these revisions to the requirements of IFRSs as adopted by the EU, and the Directors are of the opinion that there are no requirements which will have a material impact on the Company’s financial statements in the period of initial application, other than what is described below.

 

IFRS 18 ‘Presentation and Disclosure in Financial Statements’ (effective for annual periods beginning on or after 1 January 2027)

 

IFRS 18 (issued on 9 April 2024) was endorsed for use in the European Union on 16 February 2026 and is set to replace IAS 1 Presentation of Financial Statements, introducing new requirements that will help to achieve comparability of the financial performance of similar entities and provide more relevant information and transparency to users. Even though IFRS 18 will not impact the recognition or measurement of items in the financial statements, its impacts on presentation and disclosure are expected to be pervasive, particularly those related to the statement of financial performance. IFRS 18 will also require the disclosure of management-defined performance measures within the financial statements.

 

Management is currently assessing the implications of applying IFRS 18 on the Group and Company’s financial statements.

 

The new standard will be applicable from its mandatory effective date of 1 January 2027, with retrospective application, meaning that comparative information will be restated to reflect the new presentation and disclosure requirements introduced

 

3.2         Foreign currency translation

 

(a)     Functional and presentation currency

 

The company’s financial results and financial position are measured in the functional currency, i.e. euro (€), which is the currency of the primary economic environment in which the company operates. These financial statements are presented in euro (€), i.e. the presentation currency, which is the currency in which the company’s share capital is denominated.

 

(b)     Transactions and balances

 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of profit or loss.

 

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the statement of profit or loss within ‘finance income or expense’.

 

3.3       Finance income and costs

 

Finance income and costs are recognised in profit or loss for all interest-bearing instruments as it accrues using the effective interest rate method.

 

Finance income and costs are recognised as they accrue, unless collectability in doubt.

 

3.4      Financial assets

 

3.4.1   Classification

 

The company classifies its financial assets in the following measurement category:

 

-

those to be measured at amortised cost.

 

The classification of debt instruments depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.

 

The Company reclassifies debt investments when and only when its business model for managing those assets changes.

 

3.4.2   Recognition and derecognition

 

The Company recognises a financial asset in its statement of financial position when it becomes a party to the contractual provisions of the instrument.

 

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.

 

3.4.3   Measurement

 

At initial recognition, the Company measures a financial asset at its fair value.

 

Debt instruments

 

Subsequent measurement of debt instruments depends on the Company’s business model for managing the asset and the cash flow characteristics of the asset. The Company’s debt instruments principally comprise loans and advances to other undertakings.

 

The Company classifies its debt instruments using the following measurement category:

 

•

Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other operating expenses together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the statement of profit or loss.

 

3.4.4   Impairment

 

The company assesses on a forward-looking basis the expected credit losses (ECL) associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. The company’s financial assets are subject to the expected credit loss model.

 

Expected credit loss model

 

The company measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12-month ECLs:

 

•

debt securities that are determined to have low credit risk at the reporting date; and

•

other debt securities and bank balances for which credit risk has not increased significantly since initial recognition

 

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the company considers reasonable and supportable information that is relevant and available without undue cost or effort. The company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due, and it considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the company in full, without recourse by the company to actions such as realising security (if any is held); or the financial asset is more than 90 days past due.

 

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. 12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months). The maximum period considered when estimating ECLs is the maximum contractual period over which the company is exposed to credit risk.

 

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls. ECLs are discounted at the effective interest rate of the financial asset.

 

At each reporting date, the company assesses whether financial assets carried at amortised cost are credit impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit impaired includes observable data such as significant financial difficulty of the borrower or issuer, or a breach of contract such as a default or being more than 90 days past due.

 

Loss allowance for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

 

3.4.5   Cash and cash equivalents

 

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes deposits held at call with financial institutions.

 

3.4.6 Receivables

 

Receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

 

3.5      Financial liabilities

 

The Company recognises a financial liability in its statement of financial position when it becomes a party to the contractual provisions of the instrument. Financial liabilities not at fair value through profit or loss are recognised initially at fair value, being the fair value of consideration received, net of transaction costs that are directly attributable to the acquisition or the issue of the financial liability. These liabilities are subsequently measured at amortised cost. The Company derecognises a financial liability from its statement of financial position when the obligation specified in the contract or arrangement is discharged, is cancelled or expires.

 

3.5.1   Payables

 

These amounts represent liabilities for goods and services provided to the company prior to the end of financial period which are unpaid.  Payables are presented as current liabilities unless payment is not due within 12 months after the reporting period.  They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

 

3.5.2   Borrowings

 

Borrowings consisting of bonds in issue are recognised initially at the fair value of proceeds received. They are subsequently carried at amortised cost.

 

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period.

 

3.6     Income tax

 

The income tax expense for the year is the tax payable on the current year’s taxable income based on the current laws of Malta adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

 

Current tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

 

 

4.       Critical accounting estimates and judgements

 

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Company’s accounting policies.

 

The company has committed to finance the parent by distributing the funds received from the bond via a loan with the same repayment terms; refer to note 8. Judgements are made to assess the market related rate of these loan commitments, the expected credit loss on default and the probability of default. 

 

Estimates and judgements are continually evaluated and based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances.

 

In the opinion of the directors, the accounting estimates and judgements made in the course of preparing these financial statements are not difficult, subjective or complex to a degree which would warrant their description as critical in terms of the requirements of IAS 1.

 

 

5.         Finance income and costs

 

Finance income and costs consist of the following:

 

Period from 1 March to 31 December

2025

Year ended

28 February

2025

 

€

€

 

 

 

Interest charged on loans owed by parent company

1,559,605

1,780,000

Finance income

1,559,605

1,780,000

 

 

 

Interest on bonds

(1,461,749)

(1,700,000)

Finance costs

(1,461,749)

(1,700,000)

 

 

 

 

6.       Expenses by nature

 

 

Period from 1 March to 31 December 2025

Year ended

28 February

2025

 

€

€

 

 

 

Directors’ remuneration

17,069

21,000

Other expenses

27,507

27,287

 

44,576

48,287

 

 

 

Auditor’s fees

 

Fees charged by the auditor for services rendered during the financial period ended 31 December 2025 and year ended 28 February 2025 relate to the following:

 

 

Period from 1 March to 31 December 2025

Year ended

28 February

2025

 

€

€

 

 

 

Annual statutory audit

13,100

12,800

Other assurance services

5,900

5,700

 

19,000

18,500

 

 

 

During the current year, fees in relation to non-assurance services amounting to €1,000 (Feb 2025: €1,000) have been charged by connected undertakings of the Company’s auditor.

 

 

7.       Tax expense

 

The relationship between the expected tax expense based on the effective tax rate of the Company at 35% (28 February 2025: 35%) and the tax expense actually recognised in the statement of total comprehensive income can be reconciled as follows:

 

 

Period from 1 March to 31 December 2025

Year ended

28 February

2025

 

€

€

 

 

 

Profit before tax

53,280

31,713

Tax on profit at 35%

(18,648)

(11,100)

 

 

 

Tax effect of:

 

 

Disallowed expenses

(15,602)

(16,900)

Actual tax expense

(34,250)

(28,000)

 

Comprising:

 

 

Current tax

(34,250)

(28,000)

 

 

 

 

8.       Loans owed by parent company

 

 

 

 

 

31 December

28 February

 

Security

Interest rate

Repayable by

2025

2025

 

 

 

 

€

€

 

 

 

 

 

 

Loan VI

None

4.45%

5 April 2026

12,638,000

39,910,000

Loan VII

None

5.55%

11 December 2035

45,000,000

-

 

 

 

 

 

 

 

The interest rate on loan VI remained unchanged during the year at 4.45% (28 February 2025: 4.45%).   Loan VI was fully repaid by the due date.

 

Loan VII was issued during the current year, at an interest rate of 5.55%

 

The loans rank pari passu, without any priority or preference within all other present and future unsecured and unsubordinated obligations of the parent company, to which the loans have been advanced.

 

 

9.       Other receivables

 

 

31 December

28 February

 

2025

2025

 

€

€

Current

 

 

Amounts owed by parent company

380,624

376,953

Accrued interest income

1,386,550

1,606,944

Financial assets

1,767,174

1,983,897

 

 

 

Total receivables

1,767,174

1,983,897

 

 

 

The carrying value of financial assets is considered a reasonable approximation of fair value.

The terms and conditions of interest receivable are disclosed in Note 8.

 

The amounts owed by parent company are unsecured, interest free and repayable on demand.

 

 

10.      Cash and cash equivalents

 

Cash and cash equivalents in the statement of financial position and statement of cash flows include the following component:

 

 

31 December

28 February

 

2025

2025

 

€

€

 

 

 

Cash at bank

73,682

79,826

 

 

 

 

11.      Share capital

 

            The share capital of CPHCL Finance p.l.c. consists of fully paid ordinary shares with a par value of €1 each. All shares are equally eligible to receive dividends and the repayment of capital and represent one vote at the shareholders’ meeting of CPHCL Finance p.l.c.

 

 

31 December

28 February

 

2025

2025

 

€

€

 

 

 

Shares issued and fully paid

 

 

250,000 ordinary shares of € 1 each

250,000

250,000

 

 

 

Shares authorised

 

 

2,500,000 ordinary shares of € 1 each

2,500,000

2,500,000

 

 

12.      Bonds in issue

 

 

 

 

31 December

28 February

 

Interest rate

Repayable by

2025

2025

 

 

 

€

€

 

 

 

 

 

Bond V

4.25%

12 April 2026

12,728,000

40,000,000

Bond VI

5.35%

18 December 2035

45,000,000

-

 

 

 

57,728,000

40,000,000

 

 

 

 

 

The bond issue costs on the bonds have been borne by the parent company.

 

CPHCL, the guarantor, is jointly and severally with the company guaranteeing  the  repayment  of  the  nominal  value  of  the  bonds  on  the  redemption date and  of the interest amounts of the  bonds on each interest payment date.  The guarantor irrevocably and unconditionally guarantees the due and punctual performance of all the obligations undertaken by the company under the bonds.

 

The carrying value of the bonds in issue is considered a reasonable approximation of their fair values. The quoted market price as at 31 December 2025 for Bond V was €99.95 (as at 28 February 2025: €100.00). The quoted market price as at 31 December 2025 for Bond VI was €101.49.

 

During the year, the company issued Bond VI. These bonds were made available for subscription (i) to holders of Bond V by means of an exchange offer, and (ii) through an intermediaries offer. Bond V bondholders were able to subscribe for the new bonds by surrendering their respective holdings. An amount of €12,728,000 of Bond V was not subscribed for via the exchange offer and was held to maturity by the existing bondholders. This balance of bond V was fully repaid upon maturity.

 

At the end of the reporting period, bonds having a face value of €79,100 were held by company directors and persons closely associated with them, whilst bonds with a face value of €23,500 were held by directors of the guarantors and persons closely associated with them.  

 

 

13.      Payables

 

Payables recognised in the statement of financial position can be analysed as follows:

 

 

31 December

28 February

 

2025

2025

 

€

€

 

 

 

Current

 

 

Accrued interest on bonds in issue

1,268,138

1,506,389

Other accruals

23,894

29,517

Other payables

162,049

160,072

 

1,454,081

1,695,978

 

 

 

The carrying value of these financial liabilities is considered a reasonable approximation of fair value.

 

 

14.      Cash flow adjustments and changes in working capital

 

The following non-cash flow adjustments and adjustments for changes in working capital have been effected to profit before tax to arrive at operating cash flows:

 

 

31 December

28 February

 

2025

2025

 

€

€

 

 

 

Operating profit

53,280

31,713

 

 

 

Adjustments:

 

 

Interest income

(1,559,605)

(1,780,000)

Interest expense

1,461,749

1,700,000

 

 

 

Changes in working capital:

 

 

Change in receivables and other financial assets

(3,671)

26,389

Change in payables

7,475

(5,132)

 

 

 

Cash used in operations

(40,772)

(27,031)

 

 

 

 

15.      Related party transactions

 

The Company’s related parties include its parent company, fellow subsidiaries, key management personnel (the directors) and all other parties forming part of CPHCL Group.

Unless otherwise stated, none of the transactions incorporates special terms and conditions and no guarantees were given or received. Outstanding balances are usually settled in cash.

 

15.1   Transactions with key management personnel

 

Other than the remuneration paid to the directors included in note 6, there were no other transactions with key management personnel.

 

15.2   Transactions with parent company

 

Transactions with the parent company are included in note 5 whilst balances are shown separately in notes 8 and 9.

 

15.3    The individual Directors’ holdings in the bonds were as follows:

 

Mr Frank Xerri De Caro held 11,700 units in the €40 million bond, which were fully rolled over into the €45 million bond. The Director held 20,000 units in the €45 million bond as at 31 December 2025.

 

Ms Rachel Stilon held 6,900 units in the €40 million bond, which were fully rolled over into the €45 million bond. The Director held 17,400 units in the €45 million bond as at 31 December 2025.

 

As at 31 December 2025, Mr Michel Cordina held 20,700 units in the €45 million bond.

 

 

16.      Financial instruments risk

 

Risk management objectives and policies

 

The company’s activities potentially expose it to a variety of financial risks: market risk (including fair  value interest rate risk), credit risk and liquidity risk. The company’s overall risk management focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the company’s financial performance. The Board provides principles for overall risk management, as well as policies covering risks referred to above and specific areas such as investment of excess liquidity.

 

The company did not make use of derivative financial instruments to hedge certain risk exposures during the current and preceding financial years.

 

16.1   Credit risk

 

Credit risk primarily arises from loans receivable from the parent company, other receivables and cash and cash equivalents.    

 

The maximum credit  exposure to  credit risk at the  end of the  reporting period  in respect of  the company’s financial assets is equivalent to their carrying amount, which is analysed as follows:

 

 

 

 

31 December

28 February

 

Notes

2025

2025

 

 

€

€

Financial assets at amortised cost - carrying amounts

 

 

 

Loans owed by parent company – non-current

8

45,000,000

39,910,000

Loans owed by parent company – current

8

12,638,000

-

Other receivables

9

1,767,174

1,983,897

Other financial assets

 

-

-

Cash and cash equivalents

10

73,682

79,826

 

 

 

 

 

 

59,478,856

41,973,723

 

 

 

 

 

The maximum exposure to credit risk at the end of the reporting period in respect of these financial assets  is  equivalent  to  their carrying amount.  The  company  does  not  hold  any  collateral  in  this respect, except as disclosed in Note 12 to the financial statements

 

Cash and cash equivalents 

 

The company’s cash and cash equivalents are held with local financial institutions with high quality standing or rating and are due to be settled on demand. Management considers the probability of default to be very low as the financial institutions have a strong capacity to meet their contractual obligations  in  the  near  term.  As  a  result,  while  cash  and  cash  equivalents  are  subject  to  the impairment requirements of IFRS 9, the identified impairment loss is insignificant.

 

Loans and related interest receivable from parent company

 

The company’s receivables mainly include loans and advances to the company’s parent together with the related interest thereon. The company monitors intra-group credit exposures at individual entity level on a regular basis and ensures timely performance of these assets in the context of overall Group liquidity management. The company assesses the credit quality of related parties taking into account financial position, performance and other factors.  The company takes cognisance of the related party relationship and the directors not expect any significant losses from non-performance or default.   

 

Loans  receivable  from  parent  company are  categorised  as  Stage  1  for  IFRS  9  purposes  (i.e. performing) in view of the factors highlighted above. The expected credit loss allowance on such loans are based on a 12 month probability of default capturing 12 months expected losses and hence are considered insignificant.

 

The  company’s  other  receivables  mainly  include  interest  receivable  in  respect  of  the  advances referred to previously.  Expected credit losses are based on the assumption that repayment of this interest  is  demanded  at  the  reporting  date.    Accordingly,  the  expected  credit  loss  allowance attributable to such balances is insignificant. 

 

16.2   Liquidity risk

 

The company is exposed to liquidity risk in relation to meeting future obligations associated with its financial  liabilities,  which  comprise  principally  the  bonds  issued  to  the  general  public  and  other payables  (refer  to  Notes  12  and  13  respectively).  Prudent  liquidity  risk  management  includes maintaining sufficient cash and liquid assets  to  ensure the  availability  of  an adequate  amount of funding to meet the company’s obligations.     

 

The company’s liquidity risk is managed actively by ensuring that cash inflows arising from expected maturities of the company’s advances to the parent company and fellow subsidiary effected out of the bond issue proceeds, together with any related interest receivable, match the cash outflows in respect of the company’s bond borrowings, covering principal and interest payments as reflected in the table below.

 

The following table analyses the company’s financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the tables below are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances, as the impact of discounting is not significant. 

 

 

Current

Non-current

 

within 6

months

6 to 12

months

1 to 5

years

later than

5 years

31 December 2025

€

€

€

€

 

 

 

 

 

Bonds in issue

12,728,000

 

-

45,000,000

Interest on bonds in issue

1,181,201

2,407,500

7,222,500

14,445,000

Payables

185,943

-

-

-

 

 

 

 

 

 

14,095,144

2,407,500

7,222,500

59,445,000

 

 

 

 

 

 

 

Current

Non-current

 

within 6

months

6 to 12

months

1 to 5

years

later than

5 years

28 February 2025

€

€

€

€

 

 

 

 

 

Bonds in issue

-

-

40,000,000

-

Interest on bonds in issue

1,700,000

-

1,700,000

-

Payables

189,589

-

-

-

 

 

 

 

 

 

1,889,589

-

41,700,000

-

 

 

 

 

 

The above amounts reflect the contractual undiscounted cash flows, which may differ from the carrying values of the liabilities at the reporting date.

 

16.3   Market risk

 

(i)  Foreign exchange risk 

 

The company is not exposed to foreign exchange risk because its principal assets and liabilities are denominated  in  euro.  The  company’s  interest  income,  interest  expense  and  other  operating expenses are also denominated in euro.  Accordingly, a sensitivity analysis for foreign exchange risk disclosing how profit or loss and equity would have been affected by changes in foreign exchange rates that were reasonably possible at the end of the reporting period is not deemed necessary. 

 

(ii)  Fair value interest rate risk 

 

In view of the nature of its operations, the company’s transactions mainly consist of earning interest income on advances effected from the proceeds of the bond issue and of servicing its borrowings. The company’s significant interest-bearing instruments, comprising advances to the parent company and bonds issued to the general public, are subject to fixed interest rates. The company has secured a spread between the return on its investments and its cost of borrowings.  Accordingly, the company is not exposed to cash flow interest rate risk but is potentially exposed to fair value interest rate risk in view of the fixed interest nature of its instruments, which are however measured at amortised cost. 

 

The company’s operating income and cash flows are substantially independent of changes in market interest rates and on this basis, the directors consider the potential impact on profit or loss of a defined  interest  rate  shift  that  is  reasonably  possible  at  the  end  of  the  reporting  period  to  be insignificant.

 

1 6.4   Fair values of financial instruments

 

At 31 December 2025, the carrying amounts of cash at bank, current loans receivable, other receivables, payables and accrued expenses approximated their fair values due to the nature or short-term maturity of these instruments. The fair values of the non-current interest bearing loans receivable were not significantly different from their carrying amounts at the end of the reporting period based on discounted cash flows using market interest rates prevailing at the end of the respective financial period. The current market interest rates utilised for discounting purposes, which were almost equivalent to the respective instruments’ contractual interest rates, are deemed observable and accordingly these fair value estimates have been categorised as Level 2 within the fair value measurement hierarchy required by IFRS 7, ‘Financial instruments: Disclosures’. Information on the fair value of the company’s bonds issued to the general public is disclosed in Note 12 to the financial statements. The fair value estimate in this respect is deemed Level 1 as it constitutes a quoted price in an active market. 

 

16.5    Categories of financial assets and liabilities

 

The carrying amounts presented in the statement of financial position relate to the following categories of financial assets and liabilities:

 

 

Notes

31 December

28 February

 

 

2025

2025

 

 

€

€

Financial assets measured at amortised cost

 

 

 

Non-current

 

 

 

-       Loans owed by parent company

8

45,000,000

39,910,000

 

 

 

 

Current

 

 

 

-       Loans owed by parent company

8

12,638,000

-

-       Other receivables

9

1,767,174

1,983,897

-       Other financial assets

 

-

-

-       Cash and cash equivalents

10

73,682

79,826

 

 

 

 

 

 

 

 

 

 

59,478,856

41,973,723

 

 

 

 

Financial liabilities measured at amortised cost

 

 

 

Non-current

 

 

 

-       Bonds in issue

12

45,000,000

40,000,000

 

 

 

 

Current

 

 

 

-       Bonds in issue

12

12,728,000

-

-       Payables

13

1,454,081

1,695,978

 

 

 

 

 

 

59,182,081

41,695,978

 

 

 

 

1 6.6    Reconciliation of liabilities arising from financing activities

 

The table below details changes in the company’s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those which cash flows were, or future cash flows will be, classified in the company’s statements of cash flow as cash flows from financing activities.

 

 

 

 

Balance at 1 March 2025

Cash flow from financing activities

Non-cash flows from financing activities

    Balance as at 31 December 2025

31 December 2025

               €

           €

               €

               €

 

 

 

 

 

Bonds in issue

40,000,000

-

17,728,000

57,728,000

Accrued interest on bonds in issue

1,506,389

(1,700,000)

1,461,749

1,268,138

 

 

 

 

 

 

41,506,389

(1,700,000)

19,189,749

58,996,138

 

 

 

 

 

 

17.      Capital management policies and procedures

 

The board’s objective is to raise funds through the issue of bonds to the general public, as may be required by the parent company from time to time.

 

The Company is not subject to externally imposed capital requirements.

 

 

18.      Events after the end of the reporting period

 

No adjusting or significant non-adjusting events have occurred between the reporting date and the date of authorisation for issue of these financial statements.

 

 

 

 

 

 

 

PwC Logo
Independent auditor’s report

To the Shareholders of CPHCL Finance p.l.c.

Report on the audit of the financial statements

Our opinion

In our opinion:

·      The financial statements give a true and fair view of the financial position of CPHCL Finance p.l.c. (the Company) as at 31 December 2025, and of the company’s financial performance and cash flows for the period then ended in accordance with International Financial Reporting Standards (‘IFRSs’) as adopted by the EU; and

·      The financial statements have been prepared in accordance with the requirements of the Maltese Companies Act (Cap. 386).

Our opinion is consistent with our additional report to the Audit Committee.

What we have audited

CPHCL Finance p.l.c.’s financial statements comprise:

·      the statement of total comprehensive income for the period ended 31 December 2025;

·      the statement of financial position as at 31 December 2025;

·      the statement of changes in equity for the period then ended;

·      the statement of cash flows for the period then ended; and

·      the notes to the financial statements, comprising material accounting policy information and other explanatory information.

 

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

 

Independence

We are independent of the company in accordance with the ethical requirements of the Accountancy Profession (Code of Ethics for Warrant Holders) Directive issued in terms of the Accountancy Profession Act (Cap. 281)  that are relevant to audits of financial statements of an EU Public Interest Entity in Malta and the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code) as applicable to audits of financial statements of public interest entities. We have also fulfilled our other ethical responsibilities in accordance with these Codes.

 

To the best of our knowledge and belief, we declare that non-audit services that we have provided to the company are in accordance with the applicable law and regulations in Malta and that we have not provided non-audit services that are prohibited under Article 18A of the Accountancy Profession Act (Cap. 281).

 

The non-audit services that we have provided to the company, in the period from 1 March 2025 to 31 December 2025, are disclosed in Note 6 to the financial statements.

 

Our audit approach

Overview

Materiality

Overall materiality: €446,000, which represents 0.75% of total assets.

Key audit matters

Recoverability of balance with parent company.


As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we considered where the directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial statements as a whole, taking into account the structure of the company, the accounting processes and controls, and the industry in which the company operates.

Materiality

The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall materiality for the financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

Overall materiality

€446,000

 

How we determined it

0.75% of total assets

 

Rationale for the materiality benchmark applied

      We chose total assets as the benchmark because, in our view, it is an appropriate measure for this type of entity. We chose 0.75% which is within the range of quantitative materiality thresholds that we consider acceptable.

 

 

We agreed with the Audit Committee that we would report to them misstatements identified during our audit above €44,600 as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. 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.

Key audit matter

How our audit addressed the key audit matter

Recoverability of balance with parent company

Loans and receivables include loan balances with the parent company, CPHCL Company Limited, amounting to €57,638,000 (net) as at 31 December 2025. Refer to Note 8.

 

As explained in accounting policy Note 3.4, the recoverability of the loan is assessed at the end of each year.

 

The loans represent the principal asset of the Company, which is why we have given additional attention to this area.

 

 

We have agreed the terms surrounding the loans to the supporting loan agreements and agreed the outstanding balances as at period end with results of procedures carried out at a Group level.

 

We have assessed the financial soundness of the parent company, CPHCL Company Limited, which is also the guarantor of the company’s bond. In doing this, we made reference to the management accounts for the current year, the audit procedures carried out on the consolidated financial statements of the Group, cash flow projections and other information.

 

Based on the evidence and explanations obtained, we consider management’s view on the recoverability of the loans to be reasonable.

 

 

Other information

The directors are responsible for the other information. The other information comprises the Directors’ report, the Statement by the directors on the financial statements and other information included in the annual financial report, the Directors’ statement of compliance with the Code of Principles of Good Corporate Governance and the Other disclosures in terms of Capital Markets Rules (but does not include the financial statements and our auditor’s report thereon).

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon except as explicitly stated within the Report on other legal and regulatory requirements. 

In connection with our audit of the financial statements, our responsibility is to read the other information identified above 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, 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 the directors and those charged with governance for the financial statements

The directors are responsible for the preparation of financial statements that give a true and fair view in accordance with IFRSs as adopted by the EU and the requirements of the Maltese Companies Act (Cap. 386), 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.

In preparing the financial statements, the directors are responsible for assessing the 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 company or to cease operations, or have no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the company’s financial reporting process.

 

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 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.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

·      Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

·      Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

·      Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

·      Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

·      Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

 

Report on other legal and regulatory requirements

Report on compliance with the requirements of the European Single Electronic Format Regulatory Technical Standard (the “ESEF RTS”), by reference to Capital Markets Rule 5.55.6

We have undertaken a reasonable assurance engagement in accordance with the requirements of Directive 6 issued by the Accountancy Board in terms of the Accountancy Profession Act (Cap. 281) - the Accountancy Profession (European Single Electronic Format) Assurance Directive (“the ESEF Directive 6”) on the Annual Financial Report of CPHCL Finance p.l.c. for the period ended 31 December 2025, entirely prepared in a single electronic reporting format.      

Responsibilities of the directors

The directors are responsible for the preparation of the Annual Financial Report, including the financial statements, by reference to Capital Markets Rule 5.56A, in accordance with the requirements of the ESEF RTS.

Our responsibilities

Our responsibility is to obtain reasonable assurance about whether the Annual Financial Report, including the financial statements, complies in all material respects with the ESEF RTS based on the evidence we have obtained. We conducted our reasonable assurance engagement in accordance with the requirements of ESEF Directive 6.

Our procedures included:

·      Obtaining an understanding of the entity's financial reporting process, including the preparation of the Annual Financial Report in XHTML format.

·      Examining whether the Annual Financial Report has been prepared in XHTML format.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion, the Annual Financial Report for the period ended 31 December 2025 has been prepared in XHTML format in all material respects.

 

Other reporting requirements

The Annual Financial Report and Financial Statements 2025 contains other areas required by legislation or regulation on which we are required to report.  The Directors are responsible for these other areas.

 

The table below sets out these areas presented within the Annual Financial Report, our related responsibilities and reporting, in addition to our responsibilities and reporting reflected in the Other information section of our report. Except as outlined in the table, we have not provided an audit opinion or any form of assurance.

 

Area of the Annual Financial Report and Financial Statements 2025 and the related Directors’ responsibilities

Our responsibilities

Our reporting

Directors’ report

The Maltese Companies Act (Cap. 386) requires the directors to prepare a Directors’ report, which includes the contents required by Article 177 of the Act and the Sixth Schedule to the Act.

We are required to consider whether the information given in the Directors’ report for the financial period for which the financial statements are prepared is consistent with the financial statements.  

 

We are also required to express an opinion as to whether the Directors’ report has been prepared in accordance with the applicable legal requirements.


In addition, we are required to state whether, in the light of the knowledge and understanding of the Company and its environment obtained in the course of our audit, we have identified any material misstatements in the Directors’ report, and if so to give an indication of the nature of any such misstatements.

 

In our opinion:

●     the information given in the Directors’ report for the financial period for which the financial statements are prepared is consistent with the financial statements; and

●     the Directors’ report has been prepared in accordance with the Maltese Companies Act (Cap. 386).

 

We have nothing to report to you in respect of the other responsibilities, as explicitly stated within the Other information section.

 

Directors’ statement of compliance with the Code of Principles of Good Corporate Governance

 

The Capital Markets Rules issued by the Malta Financial Services Authority require the directors to prepare and include in the Annual Financial Report a Statement of Compliance with the Code of Principles of Good Corporate Governance within Appendix 5.1 to Chapter 5 of the Capital Markets Rules.  The Statement’s required minimum contents are determined by reference to Capital Markets Rule 5.97.  The Statement provides explanations as to how the Company has complied with the provisions of the Code, presenting the extent to which the Company has adopted the Code and the effective measures that the Board has taken to ensure compliance throughout the accounting period with those Principles.

 

We are required to report on the Statement of Compliance by expressing an opinion as to whether, in light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have identified any material misstatements with respect to the information referred to in Capital Markets Rules 5.97.4 and 5.97.5, giving an indication of the nature of any such misstatements.

We are also required to assess whether the Statement of Compliance includes all the other information required to be presented as per Capital Markets Rule 5.97.

We are not required to, and we do not, consider whether the Board’s statements on internal control included in the Statement of Compliance cover all risks and controls, or form an opinion on the effectiveness of the Company’s corporate governance procedures or its risk and control procedures.

In our opinion, the Statement of Compliance has been properly prepared in accordance with the requirements of the Capital Markets Rules issued by the Malta Financial Services Authority.

 

We have nothing to report to you in respect of the other responsibilities, as explicitly stated within the Other information section.

 

Other matters on which we are required to report by exception

We also have responsibilities under the Maltese Companies Act (Cap. 386) to report to you if, in our opinion:

●     adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us.

●     the financial statements are not in agreement with the accounting records and returns.

●     we have not received all the information and explanations  which, to the best of our knowledge and belief, we require for our audit.

 

We also have responsibilities under the Capital Markets Rules to review the statement made by the directors that the business is a going concern together with supporting assumptions or qualifications as necessary.

We have nothing to report to you in respect of these responsibilities.

 

Other matter - use of this report

Our report, including the opinions, has been prepared for and only for the Company’s shareholders as a body in accordance with Article 179 of the Maltese Companies Act (Cap. 386) and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior written consent.

 

Appointment

We were first appointed as auditors of the Company on 20 July 2015.  Our appointment has been renewed annually by shareholder resolution representing a total period of uninterrupted engagement appointment of 11 years.

 

Lucienne Pace Ross

Principal

For and on behalf of

PricewaterhouseCoopers
 78, Mill Street
Zone 5, Central Business District
Qormi

Malta
28 April 2026