|
Reg. No. C 75875
GAP GROUP P.L.C.
ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
31st DECEMBER 2025
CONTENTS
Corporate Governance - Statement of Compliance Income Statement & Statement of Comprehensive Income Statement of Financial Position Statement of Changes in Equity Notes to the Financial Statements
Readers are reminded that the official Annual Financial Report 2025, authorized for issue by the Board of Directors, is in European Single Electronic Format (ESEF) and is published on https://www.gap.com.mt/investor-information/ . A copy of the Independent auditor's report issued on the official statutory Annual Financial Report 2025, is included within these printed documents and comprises the auditor's 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.
DIRECTORS' REPORT
FOR THE YEAR ENDED 31st DECEMBER 2025
The directors present their annual report and the audited parent company financial statements together with the group’s consolidated financial statements (the “financial statements”) of Gap Group p.l.c. for the year ended 31st December 2025.
Principal Activities
The principal activity of Gap Group p.l.c. is to hold investments in subsidiary companies and to raise financial resources from the capital markets to finance its investments and the property development projects of its subsidiaries. The principal activity of the Group is to acquire, develop and dispose of immovable property and to construct, develop and enter into arrangements with contractors and other service providers in connection with its properties. The directors do not envisage any changes to the company’s and group’s principal activities in the foreseeable future.
Review of business
Works on the developments progressed well and within the scheduled time frames. The Group continued to sign new preliminary agreements at a steady pace whilst a promising number of contracts from its various projects were signed during the financial period under review. During 2026 the group will focus its resources to deliver the last remaining project, which is Pier Points in Marsaskala.
The Group generated a gross profit of €9,853,168 during 2025 (2024: €20,195,429). The Group’s net profit for the year 2025 amounted to €6,875,725 (2024: €14,346,213). The Company generated a net profit of €92,474 in 2025 (2024: €130,792).
Fairwinds
The Fairwinds development in Luqa consists of 268 apartments, spread over 21 blocks and 302 garages. By the end of the year, all the remaining stock of properties has been sold.
Mulberry Park
Works on the Mulberry Park in Qawra started in December 2020 and were fully complete during 2023. The project consists of 93 apartments and 158 garages.
As at the end of the year, the company has contracted all the residential units and 104 garages.
The company held 54 garages in stock, 26% of which were subject to a promise of sale agreement.
The Pantheon
Works on The Pantheon development in Mosta started in December 2020 and the project which is split in 3 different Zones was completed in 2023. The project consists of 114 residential units and 158 garages. As at 31 December 2025, out of the 114 residential units, 113 units have been contracted and last unit was subject to a promise of sale agreement. This means that 100% of the units were committed.
By the end of 2025 the company has also contracted 107 garages and held 51 in stock, 16% of which were subject to a promise of sale agreement.
Seaberry Park
Works on Seaberry Park development in Qawra started in early 2022 and were fully completed by the end of 2023. The project consists of 113 units and 185 garages.
As at 31 December 2025, all units have been sold (contracted).
By the end of 2025 the company has also contracted 110 garages and held 75 in stock, 15% of which were subject to a promise of sale agreement.
Sunflower Living
During 2023, the company acquired a plot of land in Qawra through one of its subsidiaries. The project consists of 59 units and 59 garages.
As at 31 December 2025, 57 units were contracted and the remaining 2 units were subject to a promise of sale agreement.
By the end of 2025 the company has also contracted 43 garages and held 16 in stock, 56% of which were subject to a promise of sale agreement.
Pier Points
Works on Pier Points in Marsaskala commenced in January 2023 and are advancing at a steady pace. The project was split in 3 different zones and the last zone should be 100% complete by the end of 2026.
The first phase of the project was launched on the market in July 2025.
As at 31 December 2025, out of the 57 residential units that were placed on the market, 46 units were under promise of sale agreement and 11 units were stock.
Bonds in issue
At the end of the year, the company had one bond in issue, namely the GAP Group p.l.c. 4.75% Secured Bonds 2025 - 2027.
During 2025, the company purchased back bonds from the 4.75% Secured Bond 2025-2027 which amounted to €3,211,700. The company also opted for an early redemption and resolved to redeem 35% of the principle held as at 21 November 2025. The early redemption option was exercised on 22 December 2025, and the company redeemed bonds amounting to €6,933,200.
As at 31 December 2025 the aggregate amount of bonds in issue amounted to €12,855,100.
Reserve Account
Pursuant to the bond prospectus of the 4.75% Secured Bonds 2025 - 2027 a reserve account had been created by the Security Trustee to cover for the redemption of the bond. All sales of units forming part of the hypothecated property in favour of the bond issue shall be made on condition that these units are freed from hypothecary rights and privileges against an agreed amount from the sale proceeds being deposited in the said Reserve Accounts.
By 31 December 2025, the Reserve Account of the 4.75% Secured Bonds 2025 - 2027 carried a balance of €50,000, in view that no contracts have been signed yet from the Pier Points project. Sale contracts are expected to start being signed during the second quarter of 2026.
Principal risks and uncertainties
Although the development works of the afore-mentioned projects and the securing of new sales by way of preliminary agreements are progressing as planned, the company is still subject to several financial risk factors including the market, economic, counter-party, credit and liquidity risks amongst others that may affect the projects and their timely completion. Additionally, the directors are monitoring closely inflationary risks resulting from the conflict in Ukraine and from the recent war taking place in the Middle-East. The directors are confident that the company has robust measures in place to mitigate the likely possible effects of inflationary pressures. Where possible, the board provides principles for the overall risk management as well as policies to mitigate these risks in the most prudent way.
Strategy risk
Risk management falls under the responsibility of the board of directors. The board is continuously analysing its risks management strategy to ensure that risks are adequately identified and managed. The audit committee regularly reviews the risk profile adopted by the board of directors.
Operational risks
The company is a holding company, thus its income is derived from dividends and interest income charged to its subsidiaries. During the year ended, no dividends were received. The company is heavily dependent on the performance of its subsidiaries. The management regularly reviews the financial performance of the subsidiaries to ensure that there is sufficient liquidity to sustain its operations.
Legislative risks
The company is governed by a number of laws and regulations. Failure to comply could have financial and reputational implications and could materially affect the company’s ability to operate. The company has embedded operating policies and procedures to ensure compliance with existing legislation.
Directors and Secretaries
The directors of the Company who held office during the year were:
Paul Attard (Executive Director and Company Secretary) Adrian Muscat (Executive Director) Francis Gouder (Non-Executive Director) Mark Castillo (Non-Executive Director) Dr Chris Cilia (Non-Executive Director) Justin Cutajar (Executive Director)
The Company’s Articles of Association do not require any directors to retire.
The Company's Secretary is Mr Paul Attard.
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 company at the end of each financial year and of the profit or loss of the company for the year then ended. In preparing the financial statements, the directors should:
The financial statements of GAP Group p.l.c. for the year ended 31 December 2025 are included in the Annual Report 2025, which is published in hard-copy printed form and is available on the Company’s website. The Directors are responsible for the maintenance and integrity of the Annual 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 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.
The directors are responsible for ensuring that proper accounting records are kept which disclose with reasonable accuracy at any time the financial position of the company 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.
Additionally, the directors are responsible for:
Statement by the Directors pursuant to Capital Markets Rule 5.68
We, the undersigned, declare that to the best of our knowledge, the financial statements prepared in accordance with the International Financial Reporting Standards (IFRS Accounting Standards), as adopted by the European Union (EU) and with the Maltese Companies Act (Cap. 386), give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the Group 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 the Group 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 Capital Markets Rule 5.62
The Directors have reviewed the Company’s and the Group’s operational cash flow forecasts. Based on this review, after making enquiries, and in the light of the current financial position, the existing banking facilities and other funding arrangements, the Directors confirm, in accordance with Capital Markets Rule 5.62, that they have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future.
Statement by the Directors pursuant to Capital Markets Rule 5.70.1
As at the year end the group had entered into capital commitments with various contractors for the development of various projects and entered into promise of sale agreements in connection with the sales of immovable properties of such projects.
Auditor
The auditor of the company, TACS Malta Limited has expressed its 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 27 April 2026 by Mr. Paul Attard (Director) and Mr. Adrian Muscat (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Financial Report.
Registered office:
PLAN GROUP HEAD OFFICE, Triq il- Wirt Naturali, Bahar ic- Caghaq, Naxxar
CORPORATE GOVERNANCE - STATEMENT OF COMPLIANCE
1. Introduction
Pursuant to the Capital Markets Rules issued by the Listing Authority of the Malta Financial Services Authority, GAP Group p.l.c. is hereby reporting on the extent of its adoption of the Code of Principles of Good Corporate Governance contained in Appendix 5.1 of the Capital Markets Rules.
GAP Group 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. GAP Group p.l.c. has no employees other than the directors and the company secretary.
2. Compliance with the Code
The Board of Directors of GAP Group 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 Capital Markets Rule 5.101, the company is exempt from making available the information required in terms of Capital Markets 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 six 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:
Paul Attard (Executive Director and Company Secretary) Adrian Muscat (Executive Director) Justin Cutajar (Executive Director) Francis Gouder (Non-Executive Director) Mark Castillo (Non-Executive Director) Dr Chris Cilia (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.
4. Committees
i. Audit Committee
In accordance with the Capital Markets Rules, GAP Group p.l.c. has established an Audit Committee, which terms of reference are based on the principles set out by the said Capital Markets Rules. The Audit Committee is entirely composed of independent, non-executive directors. At present, Francis X. Gouder acts as chairperson, whilst Mark Castillo and Dr Chris Cilia LLD act as members. In compliance with the Capital Markets Rules, Francis X. Gouder is the independent Non-Executive Director who is competent in accounting and auditing matters having previously served in various senior positions in several financial institutions.
The directors are fully aware that the close association of the Company with Gap Group 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.
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
Pursuant to the Company’s Memorandum and Articles of Association, the maximum annual aggregate emoluments that may be paid to the directors is approved by the shareholders in the General Meeting. Furthermore, the remuneration of the directors is a fixed amount per annum and does not include any variable component relating to profit sharing, share options or pension benefits.
During the year, the directors received emoluments amounting in total to €168,000 (2024 - €167,288).
6. Internal Control and Risk Management in relation to the Financial Reporting Process
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.
7. Relations with the bondholders and with 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.
8. Institutional shareholders
This principle is not applicable since the company has no institutional shareholders.
9. Conflicts of interest
The Audit Committee has the task to ensure that any potential conflicts of interest are resolved in the best interests of the Company. 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.
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 27 April 2026 by Mr. Paul Attard (Director) and Mr. Adrian Muscat (Director).
The accounting policies and explanatory notes form an integral part of the consolidated and separate financial statements.
The accounting policies and explanatory notes form an integral part of the consolidated and separate financial statements.
The accounting policies and explanatory notes form an integral part of the consolidated and separate financial statements.
The accounting policies and explanatory notes form an integral part of the consolidated and separate financial statements.
NOTES TO THE FINANCIAL STATEMENTS – 31 ST DECEMBER 2025
1. Summary of material accounting policies
The material accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all periods presented, unless otherwise stated.
1.1 Basis of preparation
These financial statements have been prepared in accordance with the requirements of International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and with the requirements of the Maltese Companies Act, 1995. The financial statements have been prepared under the historical cost convention, except as disclosed below.
Going Concern
As at 31 December 2025, the Company has debt securities in issue amounting to €12.86 million bearing interest of 4.75% per annum, payable annually every 22 December, and can be redeemed at any date until 22 December 2027, subject to giving a 30-day prior notice to bondholders. GAP Zonqor Limited provided a corporate guarantee to affect the due and punctual performance of all payment obligations undertaken by the Company. The ability of the Company to meet its obligations both in terms of servicing its debt and ultimately repaying the bondholders on the redemption date is dependent on the ability of the Company to collect amounts due from its subsidiary. The remaining bond balance together with its debt servicing obligations, will be paid from sales proceeds which are expected to be received during the course of 2026.
The Group has prepared projections for the coming 24-month period ending 31 December 2027, based on forecasts which factor in the current macro-economic environment resulting from a combination of inflation and increase in importation costs, uncertainties regarding future developments and those inherent to the specific industry in which these companies operate. These forecasts project positive cash flows for the Group throughout. At the end of the current financial year, the Group has forecasted a cash reserve of around €10 million. The Directors of the Group have concluded that GAP Group should be able to ensure that it does meet its commitments both financial and otherwise, and hence, the Group’s obligations to bondholders and third parties should be met in full. In this respect, the Directors of the Group have assessed that the Group is expected to have the necessary funds to finance the payment of bond interest falling due in December 2026 and going forward. On this basis, the Board continues to adopt the going concern basis in preparing the Group’s and the Company’s financial statements and considers that there are no material uncertainties which may cast doubt about the ability of the Group and the Company to continue operating as a going concern.
Critical accounting estimates and judgements
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 judgements in the process of applying the Group’s accounting policies. 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.
Standards, interpretations and amendments to published standards effective in 2025
The Group adopted new standards, amendments and interpretations to existing standards that are mandatory for the Group’s accounting period beginning on 1st January 2025. The adoption of these revisions to the requirements of IFRSs as adopted by the EU did not result in substantial changes to the Group’s accounting policies.
Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by the Group
At the date of authorisation of these financial statements, certain new standards, and amendments to existing standards have been published by the IASB that are not yet effective, and have not been adopted early by the Group.
The Group has not early adopted these revisions to the requirements of the IFRSs as adopted by the EU and the Directors are of the opinion that there are no requirements which will have a possible material impact on the Group’s and 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 period 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 of measurement of items in the financial statements, its impacts on presentation and disclosure are expected to be pervasive, in particular 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 detailed implications of applying the new standard on the Group’s 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.
1.2 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments has been identified as the board of directors, responsible for making strategic decisions. The board of directors considers the Company to be made up of one segment, that is raising financial resources from capital markets to finance the capital projects of the Company. All the Company’s revenue and expenses are generated in Malta and revenue is mainly earned from the development of immovable property.
1.3 Foreign currency translation
(a) Functional and presentation currency
Items included in these Financial Statements are measured using the currency of the primary economic environment in which the entity operates (the functional currency). These Financial Statements are presented in Euro, which is the company’s functional currency and presentation currency.
(b) Transactions and Balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the dates of the transactions. 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 comprehensive income. Translation differences on non-monetary items, such as equities, are reported as part of the fair value gain or loss.
1.4 Financial Instruments
1.4.1 Financial Instruments Classification
The Group classifies its financial assets as measured at amortised cost, as designated at fair value through other comprehensive income (FVOCI) and as designated at fair value through profit or loss (FVTPL). The classification is based on the business model in which a financial asset is managed and its contractual cash flows.
The group classified its financial liabilities at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables (both measured at amortised cost) or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company’s financial liabilities include debt securities in issue.
1.4.2 Recognition and measurement
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated at FVTPL:
A debt instrument is measured at FVOCI only if it meets both of the following conditions and is not designated as FVTPL:
On initial recognition of an equity investment that is not held-for-trading, the Group may irrevocably elect to present subsequent changes in fair value in OCI. This election is made on an investment-by-investment basis.
All other financial assets are classified as measured at FVTPL.
In addition, on initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
After initial recognition, financial liabilities are subsequently measured at amortised cost using the effective interest (‘EIR’) method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as interest expense in the statement of profit or loss.
1.4.3 Derecognition
The Company derecognises a financial asset when:
The company enters into transactions whereby it transfers assets recognised in its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognised.
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expired. The Company also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.
1.4.4 Impairment
The Group 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:
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due date and it considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held) or the financial asset is more than 90 days past due date.
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 Group is exposed to credit risk.
ECLs are 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 difficult of the borrower or issuer or a breach of contract such as default or being more than 90 days past due date.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
Simplified approach model
For loans and trade and other receivables, the Group applies the simplified approach required by IFRS 9, which required expected lifetime losses to be recognised from initial recognition of the receivables.
The expected loss rates are based on the payment profiles of sales over a period of 12 months before 31 December 2025 or 1 January 2025 respectively and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the liability of the customers to settle the receivable. Receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, among others, the probability of insolvency or significant financial difficulties of the debtor. Impaired debts are derecognised when they are assessed as uncollectible.
1.5 Consolidation
Subsidiary undertakings, which are those companies in which the Group, directly or indirectly, has an interest of more than one half of the voting rights or otherwise has power to govern the financial and operating policies have been consolidated. Subsidiaries are consolidated from the date on which effective control is transferred to the Group and are no longer consolidated from the date of disposal. Inter-company transactions, balances and unrealised gains on transactions between subsidiaries are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. The Group financial statements include the financial statements of the parent Company and all its subsidiaries.
The Company acquired the shares in its subsidiaries during the period ended 31st December 2016 and the period ended 31st December 2019. The subsidiaries acquired during the years 2016 and 2019 were acquired at the net asset value of the subsidiaries existing and adjusted with the increase in the value of the immovable property arising from a revaluation of the immovable property at market value. The Company incorporated two subsidiaries in the Group in 2021 and 2022.
In the Company's financial statements investments in subsidiaries are accounted for on the basis of the direct equity interest and are stated at cost less any accumulated impairment losses. Dividends from investments are recognised in the profit or loss.
The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred in the acquisition is measured at fair value as are the identifiable net assets acquired.
1.6 Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.
1.7 Offsetting financial instruments
Financial assets and liabilities are offset, and the net amount is reported in the statement of financial position when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.
1.8 Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is possible that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.
1.9 Revenue and cost recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Company’s activities. Revenue is shown net of value added tax, returns, rebates and discounts. The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and when the specific criteria have been met as described below.
Sales of property are recognised when the significant risks and rewards of ownership of the property being sold effectively transferred to the buyer. This is generally considered to occur at the later of the contract of sale and the date when all the Company’s obligations relating to the property are completed and the possession of the property can be transferred in the manner stipulated by the contract of sale. Amounts received in respect of sales that have not yet been recognised in the financial statements, due to the fact that the significant risks and rewards of ownership still rest with the company, are treated as payments received on account and presented within trade and other payable.
Other operating income consisting of the following is recognised on an accruals basis: Interest
Dividends receivable are accounted for on a cash basis
Costs are recognised when the related goods and services are sold, consumed or allocated, or when their future useful lives cannot be determined.
1.10 Borrowing costs
Borrowing costs directly attributable to the acquisition and construction of property are capitalised as part of the cost of the project and are included in its carrying amount. Capitalisation of borrowing costs ceases when substantially all the activities necessary to prepare any distinct part of the project for its sale or intended use is completed. Borrowing costs which are incurred for the purpose of acquiring or constructing qualifying property, plant and equipment or investment property are capitalized as part of its cost. Borrowing costs are capitalized which acquisition or construction is actively underway and cease once the asset is substantially complete, or suspended if the development of the asset is suspended. All other borrowing costs are recognized as an expense in the profit and loss account in the period as incurred.
1.11 Trade and other payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.
Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
1.12 Other financial liabilities
Other financial liabilities are recognized initially at fair value of proceeds received, net of transaction costs incurred. Other financial liabilities are subsequently measured at amortised cost using the effective interest method unless the effect of discounting is immaterial. Any difference between the proceeds, net of transaction costs, and the settlement or redemption of other borrowings is recognised in profit or loss over the term of the borrowings, unless the interest on such borrowings is capitalised in accordance with the company’s accounting policy on borrowing costs.
Repurchases of Bonds issued by the company - If the company repurchases a part of a financial liability, the company allocates the previous carrying amount of the financial liability between the part that continues to be recognised and the part that is derecognised based on the relative fair values of those parts on the date of the repurchase. The difference between the carrying amount allocated to the part derecognised and the consideration paid, including any non-cash assets transferred or liabilities assumed, for the part derecognised shall be recognised in profit or loss.
1.13 Property, plant and equipment
All property, plant and equipment are initially recorded at cost and subsequently stated at cost less depreciation.
Cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. Expenditure on repairs and maintenance of property, plant and equipment is recognised as an expense when incurred.
Property, plant and equipment are stated at cost or valuation less accumulated depreciation. Depreciation is provided for on the straight-line method in order to write off cost over the expected useful economic lives of the assets as follows:
The assets' residual values and useful lives are reviewed and adjusted if appropriate, at each statement of financial position date.
Gains and losses on disposal of property, plant and equipment are determined by comparing proceeds with the carrying amount, and are taken into account in determining operating profit.
An asset's carrying amount is written down immediately to its recoverable amount if its carrying amount is greater than its estimated recoverable amount.
1.14 Inventory – Development project
The main object of the Company is the development of land acquired for development and resale. This development is intended in the main for resale purposes, and is accordingly classified in the financial statements as Inventory. Any elements of a project which are identified for business operation or long-term investment properties are transferred at their carrying amount to Property, plant and equipment or investment properties when such identification is made and the cost thereof can reliably be segregated.
The development is carried at the lower of cost and net realisable value. Cost comprises the purchase cost of acquiring the land together with other costs incurred during its subsequent development, including:
The purchase cost of acquiring the land represents the cash equivalent of the contracted price. This was determined at date of purchase by discounting to present value the future cash outflows comprising the purchase consideration.
Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses.
As stated in note 1.5 the Group accounts for business combinations using the acquisition method. Accordingly, at group level, the identifiable net assets acquired, including inventory held by the newly-acquired subsidiary, are measured at fair value as at date of acquisition of subsidiary. Therefore, at consolidated group level, inventory cost represents the fair value of inventory held by the acquired subsidiary as at date of acquisition of subsidiary, together with additional development and borrowing costs incurred following date of acquisition.
1.15 Cash and cash equivalents
Cash and cash equivalents as shown in the cashflow statement comprise cash in hand and deposits repayable on demand less bank overdrafts. Bank overdrafts are included in the statement of financial position as borrowings under current liabilities.
1.16 Current and deferred tax
The tax expense for the period comprises current and deferred tax. 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.
Deferred tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balance on a net basis.
1.17 Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s financial statements in the period in which the dividends are approved by the Company’s shareholders.
2. Financial risk management
2.1 Financial risk factors
The Group’s activities potentially expose it to a variety of risks: market risk, economic risk, counter-party risk, credit risk and liquidity risk. Where possible, the board provides principles for overall risk management, as well as policies to mitigate these risks in the most prudent way.
(i) The Group is subject to market and economic conditions generally
The Group is subject to the general market and economic risks that may have a significant impact on the projects of the subsidiaries, the timely completion of the said projects and budgetary constraints. These include factors such as the state of the local property market, inflation, and fluctuations in interest rates, exchange rates, property prices and other economic and social factors affecting demand for real estate generally. If general economic conditions and property market conditions experience a downturn which is not contemplated in the Group’s planning during the construction and completion of the projects, this shall have an adverse impact on the financial condition of the Group and the ability of the Company to meet its obligations.
(ii) The property market is a very competitive market that can influence the sales of units in the Projects
The real estate market in Malta is very competitive in nature. An increase in supply and/or a reduction in demand in the property segments in which the Group operates and targets to sell the remaining units in stock and the properties being developed, may cause sales of units forming part of the projects to sell at prices which are lower than is being anticipated by the Group or that sales of such units are in fact slower than is being anticipated. If these risks were to materialise, particularly if due to unforeseen circumstances there is a delay in the tempo of sales envisaged by the Group, they could have a material adverse impact on the Group and the Issuer’s ability to meet its obligations.
(iii) The Group depends on third parties in connection with its business, giving rise to counterparty risks
The Group relies upon third-party service providers such as architects, building contractors and suppliers for the construction and completion of each of the projects of its subsidiaries. The Group has engaged the services of third party contractors for the development of the projects including, excavation, construction and finishing of the developments in a timely manner and within agreed cost parameters. This gives rise to counter-party risks in those instances where such third parties do not perform in line with the Group’s expectations and in accordance with their contractual obligations. If these risks were to materialise, the resulting development delays in completion could have an adverse impact on the Group’s businesses, and their respective financial condition, results of operations and prospects, that could have a material adverse impact on the Issuer’s ability to meet its obligations.
(iv) Material risks relating to real estate development may affect the economic performance and value of the Projects
There are several factors that commonly affect the real estate development industry, many of which are beyond the Group’s control, and which could adversely affect the economic performance and value of the Group’s projects. Such factors include:
(v) The Group may be exposed to environmental liabilities attaching to real estate property
The Group may become liable for the costs of removal, investigation, or remediation of any hazardous or toxic substances that may be located on, or in or which may have migrated from, a property owned or occupied by it, which costs may be substantial. The Group may also be required to remove or remedy any hazardous substances that it causes or knowingly permits at any property that it owns or may in future own. Laws and regulations, which may be amended over time, may also impose liability for the presence of certain materials or substances or the release of certain materials or substances into the air, land or water or the migration of certain materials or substances from a real estate investment, including asbestos, and such presence, release or migration could form the basis for liability to third parties for personal injury or other damages. These environmental liabilities, if realised, could have an adverse effect on the Group’s operations and financial position.
(vi) Property valuations may not reflect actual market values
The valuations of the properties on which the share acquisitions were based were prepared by an independent qualified architect in accordance with the valuation standards published by the Royal Institution of Chartered Surveyors (RICS). In providing a market value of the respective properties, the independent architect has made certain assumptions which ultimately may cause the actual values to be materially different from any future values that may be expressed or implied by such forward-looking statements or anticipated on the basis of historical trends as reality may not match the assumptions. There can be no assurance that such property valuations and property-related assets will reflect actual market values.
(vii) General exposure to funding risks
The funding of each project is partly dependent on the proceeds from the gradual sale of the units in each development. If the projected sale of the units is not attained or is delayed, the Group may well not have sufficient funds to complete all the projects within the projected time-frames or to pay the contractors for works performed.
(viii) The Group may be exposed to cost overruns and delays in completion of the projects
Each of the projects being undertaken by the Group is prone to certain risks inherent in real estate development, most notably the risk of completing each project within its scheduled completion date and within the budgeted cost for that development. If either or both risks were to materialise they could have a significant impact on the financial condition of the respective subsidiary and/or the Group, and the ability of the latter to meet its obligations. The risks of delays and cost overruns, could cause actual sales revenues and costs to differ from those projected and which are affected, amongst others, by factors attributable to counter-parties, general market conditions, and competition which are beyond the Group’s control. Delays in the time scheduled for completion of one or more of the projects may also cause significant delays in the tempo of the sales forecasted by the Group for units within the Project or Projects affected by such delay, which can have a significant adverse impact on the Group’s financial condition and cash flows. Similarly, if any one or more of the projects were to incur significant cost overruns that were not anticipated, the Group may have difficulties in sourcing the funding required for meeting such cost overruns and therefore may risk not completing one or more of the projects, which shall have a material adverse impact on the cash flows generated from sales of units in that Project and a material adverse impact on the financial condition of the specific subsidiary and ultimately the Issuer. The directors are closely monitoring closely inflationary risks resulting from the conflict in Ukraine and the Middle East.
(ix) Foreign Exchange risk
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities which are denominated in a currency that is not the entity's functional currency. As at reporting date, the Group has no currency risk since all assets and liabilities are denominated in Euro.
(x) Fair value interest rate risk
The Group is exposed to risks associated with the effects of fluctuations in the prevailing levels of the market interest rates on its interest bearing financial instruments.
As at the reporting date, the Company holds available for sale investments which are limited to Corporate bonds and bank deposits. The 4.75% Secured Bonds 2025 – 2027 which represent about 100% of the Group’s third-party borrowings are subject to fixed interest rates. Based on the above, the board considers the potential impact on profit or loss of a defined interest rate shift at the reporting date to be quite contained.
(xi) Liquidity risk
The Group is exposed to liquidity risk in relation to meeting future obligations associated with its financial liabilities, which comprise principally trade and other payables and borrowings. Prudent liquidity risk management includes maintaining sufficient cash to ensure the availability of an adequate amount of funding to meet the Company's financial obligations and to safeguard the Group’s ability to continue as a going concern, in particular to complete of the Group’s projects in a timely manner.
In the next 12 months, the Group requires to raise further funding to finish its ongoing projects. The funding should be available from own Reserves. In the absence of that, the Group will seek bank finance. There is no certainty that the Group will be able to obtain the full capital it requires, and this may effect the ability of the Group to deliver these projects on time.
Notwithstanding these challenges, the company has ample experience in the industry and has always managed to obtain the appropriate funding and completed projects within pre-determined time-frames.
Maturity analysis
The Group’s trade and other payables with the exception of specific liabilities (refer to Note 10) are entirely repayable within one year from the end of the reporting period. The following table analyses the Group’s borrowings, lease liabilities and deposits arising under operating leases classified as other payables into relevant maturity groupings based on the remaining period from the end of the reporting period to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
(xii) Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern; to maximise the return to stakeholders through the optimisation of the debt and equity balance and to comply with the requirements of the Prospectus issued in relation to the 4.75% Secured Bonds 2025 – 2027.
The capital structure consists of items presented within equity in the statement of financial position. The company monitors the level of debt against total capital on an ongoing basis.
(xiii) Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument leading to a financial loss.
The Group is not significantly exposed to credit risk arising in the course of its principal activity relating to the sale of residential units in view of the way promise of sale agreements are handled through receipt of payments on account at established milestones up to delivery. The Group monitors the performance of the purchases throughout the term of the related agreement in relation to meeting contractual obligations and ensures that contract amounts are fully settled prior to delivery of the residential unit.
Credit risk mainly arises from financial assets held in the Reserve Account, cash and cash equivalents and available for sale investments. Credit risk relating to financial assets is addressed through careful selection of the issuers of securities bought by the Company. All such transactions have been carried out solely by the Company’s stockbroker (and Sponsor/Manager of the 4.75% Secured Bonds 2025-2027). During the year under review, the available for sale investments were limited to purchases in reliable Corporate Bonds - €2.5 Million (2024 - €3.8 Million) whilst the cash at Bank was held with local quality financial institutions - €10.3 Million (2024 - €9.7 Million). The Reserve Account is administered by the Security Trustee of the 4.75% Secured Bonds 2025 – 2027. Bonds issues and funds are held in a bank account of high standing.
Furthermore, the Group manages its credit risk exposure in relation to receivables from fellow companies in an active manner, at arm’s length and with accrued interest charges thereon. The Board retains direct responsibility for affecting and monitoring the investments made by the fellow companies. The Board considers these receivables to be fully performing and recoverable.
(xiv) Amounts owed by related parties and other receivables
The Group’s and the Company’s receivables also include amounts owed by related parties forming part of the Gap Group, associates and other related parties (refer to Note 12). The Group’s treasury monitors intra-Group credit exposures on a regular basis and ensures timely performance of these assets in the con text of overall Group liquidity Management. The Group assesses the credit quality of these related parties taking into account financial position, performance and other factors. The Group takes cognisance of the related party relationship with these entities and Management does not expect any losses from non-performance or default. With respect to the Group’s and the Company’s current amounts owed by related parties and other receivables, since such balances are repayable on demand, expected credit losses are based on the assumption that repayment of the balance is demanded at the reporting date. In this respect, the directors considered such balances to have low credit risk and a low risk of default. Accordingly, the expected credit loss allowance attributable to amounts owed by related parties and other receivables was deemed immaterial as at 31 December 2025 and 2024.
3. Revenue
Revenue represents the sale of property held for development and resale, and is made up as follows:
4. Profit/(loss) for the year
Profit for the year is stated after charging:
No non-audit fees have been provided by the auditor to the Group and Company.
5. Employees
6. Directors’ emoluments
7. Finance costs
8. Finance income
9. Tax expense
The parent Company and Group’s income tax charge for the year has been arrived at as follows:
The accounting profits and the tax charge for the year are reconciled as shown hereunder:
10. Fair value adjustment
11. Property, plant and equipment
12. Investments in subsidiary undertakings
Geom Developments Limited (C50805) is the parent company of Gap Group Finance Limited (C54352) which is the parent company of Manikata Holdings Limited (C53818) and Gap Properties Limited (C47928). The Group owns all the shares with the exception of a few shares which are owned by third parties. The amount attributable to the minority interest is reflected in note 24.
The principal activity of all the subsidiaries, except for Gap Group Contracting Limited, is the acquisition of property for development and resale. The activity of Gap Group Contracting Limited is to provide services to the entities within the Group related to their trading activity.
13. Investments
14. Other financial assets
At 31st December 2025, the amount due by Gap Holdings Limited of €2,773,669 (2024 - €2,666,989) is non-interest bearing and is expected to be repaid by December 2027. The nominal amount of the loan is €3,000,000.
The amount due by Gap Holdings Limited of €3,498,437 (2024 - €4,992,000) is expected to be repaid by December 2027 and is unsecured. The amount receivable bears interest at 4.0% per annum.
The amount receivable from third party was received during the year.
15. Reserve Account
16. Inventory – Development project
17. Trade and other receivables
The amounts due from parent company, subsidiaries and related parties are interest free and repayable on demand. The balances were analysed to test aging, ECL tables and allowances movements in note 2.1 (xiv).
18. Cash and cash equivalents
Cash and cash equivalents included in the cash flow statement comprise:
19. Share capital
20. Earnings per share
Earnings per share is calculated by dividing the result attributable to owners of the Company by the weighted average number of ordinary shares in issue during the year.
The company has not issued any dilutive instruments in the past, and therefore the basic and diluted earnings per share are equal.
21. Subordinated shareholders’ loan – Quasi equity
The shareholders’ loan, classified as “Subordinated shareholders’ loan-Quasi equity” was advanced to the company by the shareholders in connection with the raising of funds through the first bond issue (see note 23). The amount is interest free and is only repayable to the shareholders after the settlement of the amount due to the Bond holders.
22. Revaluation reserve
23. Borrowings
Gap Mellieha (I) Limited had a bank loan of NIL (2024 - €5,320,020) which bore interest at 4.5% per annum. The loan was repaid during the year from sales proceeds of immovable property.
The facilities were secured by a general and special hypothecs on the immovable properties of the relative subsidiaries.
Debt securities in issue
The bonds are measured at the amount of net proceeds adjusted for the amortisation of the difference between the net proceeds and the redemption value of such bonds, using effective yield method as follows:
The effective interest rates at the end of the year were as follows:
During the current year, the 4.75% Secured Bonds 2025-2027 amounting to €12,855,100 were classified as current.
During the year 2025, the company purchased back bonds from the 4.75% Secured Bond 2025-2027 which amounted to €3,211,700. The company also opted for an early redemption and resolved to redeem 35% of the principle held as at 21 November 2025. The early redemption option was exercised on 22 December 2025, and the company redeemed bonds amounting to €6,933,200.
On 5 December 2022, GAP Group p.l.c. issued up to 23,000,000 4.75% Secured Bonds 2025-2027 of a nominal value of €100 per Bond issued at par. The bond interest is payable annually in arrears on 21 December. The bonds are redeemable at par and are due for redemption at any date falling between 22 December 2025 and 21 December 2027, at the sole option of the Issuer, by giving not less than 30 days’ notice. The bonds are guaranteed by GAP Zonqor Limited, which has bound itself for the payment of the bonds and interest thereon, pursuant to and subject to the terms and conditions in the Prospectus. The bonds have been admitted to the Stock exchange on 29 December 2024. The quoted market price as at 31 December 2025 for the bonds was €100.00. In the opinion of the directors, these market prices fairly represent the fair value of these financial liabilities.
24. Trade and other payables
The amounts due to subsidiaries are interest free and repayable on demand.
25. Transactions with related parties
All companies forming part of Gap Group p.l.c. are considered by the directors to be part of the Group. Companies having the same shareholders and directors are considered by the directors to be related parties. During the course of the year, the Company and the Group entered into transactions with related undertakings all of which arise in the ordinary course of business. The related party transactions were:
26. Contingent liabilities
One of the Group’s subsidiaries, Geom Developments Limited, is party to a pending court case which may give rise to litigation costs estimated at approximately €75,000. Based on legal advice obtained, no provision has been recognised as the obligation is not considered probable at this stage. Accordingly, the possible obligation has been disclosed as a contingent liability.
27. Commitments
As at December 2025, the Group has entered into promise of sale agreements with advance deposits amounting to €1,070,050 (2024 - €1,220,480). These agreements are expected to generate sales amounting to €10,700,500 (2024 - €12,204,800).
As at 31 December 2025, the Group had bank guarantees amounting to €265,424 (2024- €271,936) in favour of third parties.
28. Statutory information
Gap Group
p.l.c. is a
The parent
company of Gap Group p.l.c is
29. Events after reporting period
The Directors have assessed events occurring after the reporting date and up to the date of authorisation of these financial statements. Based on this assessment, no events have occurred that require adjustment to, or disclosure in, the financial statements for the year ended 31 December 2025, in accordance with the requirements of IAS 10 Events After the Reporting Period.
Independent auditor's reportTo the Shareholders of Gap Group p.l.c.
Report on the Audit of the Financial Statements for the year ended 31st December 2025.Opinion
I have audited the parent company financial statements and the consolidated financial statements (the “financial statements”) of Gap Group plc (the “Company”) and its subsidiaries together (the “Group”), set on pages 10 to 43 which comprise the statement of financial position as at 31st December 2025 and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the consolidated financial statements including a Summary of material accounting policies.
In my opinion, the accompanying financial statements give a true and fair view of the financial position of Gap Group p.l.c. and its Group as at 31st December 2025, and of the Company’s and its Group’s financial performance and their cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and have been properly prepared in accordance with the requirements of the Companies Act (Cap. 386).
Basis for Opinion
I conducted my audit in accordance with International Standards on Auditing (ISAs). My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.
I am independent of the Company and the Group in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to my audit of the financial statements in accordance with the Accountancy Profession (Code of Ethics for Warrant Holders) Directive issued in terms of the Accountancy Profession Act (Cap.281) in Malta, and I have fulfilled my other ethical responsibilities in accordance with these requirements and the IESBA Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.
Key Audit Matters
Key audit matters are those matters that, in my professional judgment, were of most significance in the audit of the financial statements for the current period. These matters were addressed within the context of the audit as a whole and contributed to forming my opinion on the financial statements. I do not provide a separate opinion on these matters.
Valuation of inventory
The Group consists of companies holding immovable property for development and resale. Bonds were issued to the public to enable the Company to acquire shares of property development companies and to provide further finance to the subsidiaries to carry on further development. At 31st December 2025, the carrying amount of immovable property held by the Group as inventory represented 58% of total assets. The carrying value of inventories as at 31st December 2025 is explained in note 16 which discloses the composition of the Inventories. At year end, the directors assess whether inventory is carried at the lower of cost and net realisable value.
Inventory valuation has been identified as a key audit matter because of the significance of the carrying value of inventories in the Group’s Statement of Financial Position and the judgmental nature of the assumptions used by the directors in the assessment described above.
My audit procedures included:
Based on my audit work, I concluded that the inventories were fairly stated.
Recoverability of Loans Receivable from Related Companies
The loans receivable from related companies, disclosed in Notes 14 and others, represent a significant portion of the Company’s total assets as of 31 December 2025. These loans are classified as financial assets at amortised cost and measured using the effective interest method, subject to impairment. The Company recognises an allowance for expected credit losses based on anticipated cash flows.
The recoverability of these loans is considered a key audit matter due to:
To assess the recoverability of loans receivable, I performed the following procedures:
I also assessed the relevance and adequacy of disclosures regarding loans receivable from related companies presented in Notes 1.4 and 14 of the financial statements. My findings support that the disclosures are adequate, and there are no material misstatements concerning recoverability.
I have no key audit matters to report regarding my audit of the parent financial statements.
Other information
The directors are responsible for the other information. The other information comprises the Directors’ Report, the Statement of Compliance with the Principles of Good Corporate Governance and the Statement of the Directors’ Responsibilities, but does not include the financial statements and my auditor’s report thereon.
My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon.
In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or my knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I 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 and fair presentation of the financial statements in accordance with IFRSs as adopted by the EU, 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 and the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s and the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
My 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 my 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, I exercise professional judgment and maintain professional scepticism throughout the audit. I also:
I 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 I identify during my audit.
I also provide those charged with governance with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, I determined those matters that are of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in my auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in my 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 RequirementsReport 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
I 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
Responsibilities of the directors
The directors are responsible for the preparation of the Annual Financial Report, including the consolidated financial statements and the relevant mark-up requirements therein, by reference to Capital Markets Rule 5.56A, in accordance with the requirements of the ESEF RTS.
My responsibilities
My responsibility is to obtain reasonable assurance about whether the Annual Financial Report, including the consolidated financial statements and the relevant electronic tagging therein comply in all material respects with the ESEF RTS based on the evidence I have obtained. I conducted my reasonable assurance engagement in accordance with the requirements of ESEF Directive 6.
My procedures included:
I believe that the evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.
Opinion
In my opinion, the Annual Financial Report for the year ended 31 December 2025 has been prepared in accordance with the ESEF RTS in all material aspects.
Matters of which I am required to report by the Companies Act
Directors’ report
I am required to express an opinion as to whether the directors' report has been prepared in accordance with the applicable legal requirements. In my opinion, the directors' report has been prepared in accordance with the Companies Act.
In addition, based on the knowledge and understanding of the Company and its environment obtained during the audit, I am required to report if I have identified material misstatements in the Directors' report. I have nothing to report in this regard.
Other requirements
I also have responsibilities under the Companies Act to report if, in my opinion:
I have nothing to report to you in respect of these responsibilities.
Appointment
I was appointed as the statutory auditor by the directors of the Company with effect from 20th November 2020. The total uninterrupted engagement period as statutory auditor amounts to 5 years.
Consistency with the additional report to the audit committee
My audit opinion on the financial statements expressed herein is consistent with the additional report to the audit committee of the Company, which was issued on 27 April 2026.
Non-audit services
No prohibited non-audit services referred to in Article 18A(1) of the Accountancy Profession Act, Cap. 281 of the Laws of Malta were provided by me to the Company, and I remain independent of the Company as described in the Basis for opinion section of my report. No other services besides statutory audit services and services disclosed in the annual report and in the financial statements were provided by me to the Company.
Corporate Governance Statement
The Capital Markets Rules issued by the Malta Financial Services Authority (MFSA) require the directors to prepare and include in their annual report a statement of compliance, providing an explanation of the extent to which they have adopted the Code of Principles of Good Corporate Governance and the effective measures taken to ensure compliance throughout the accounting period with those principles. The Capital Markets Rules also require me, as the auditor, to include a report on the statement of compliance prepared by the directors.
I am also required to express an opinion as to whether, in light of the knowledge and understanding of the Company and its environment obtained during the audit, I have identified material misstatements with respect to the information referred to in Capital Markets Rules 5.97.4 and 5.97.5. I read the statement of compliance and consider its implications for my report if I become aware of any apparent misstatements or material inconsistencies with the financial statements included in the annual report. My responsibilities do not extend to considering whether this statement is consistent with other information included in the annual report.
I am not required to, and I 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 governance procedures or its risk and control procedures.
In my opinion:
Under the Capital Markets Rules, I also have a responsibility to review the statement made by the directors, set out on pages 5 - 6, that the business is a going concern, together with supporting assumptions or qualifications as necessary.
I have nothing to report to you in respect of these responsibilities.
This copy of the audit report has been signed by Pamela Fenech (Director) for and on behalf of
TACS Malta Limited Certified Public Accountant Registered Auditor
1, Tal-Providenza Mansions, Main Street, Balzan, Malta Date : 27 th April 2026
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
