Company registration no.: C 82098
Annual Report
and
Consolidated Financial Statements
31 December 2022
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
CONTENTS
Pages
General information
3
Directors' report
4 - 7
Statement of compliance with the principles of good corporate governance
8 - 11
Statements of comprehensive income
12
Statements of financial position
13
Statements of changes in equity
14
Statements of cash flows
15
Notes to the financial statements
16 - 47
Independent auditor's report 48 - 55
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2
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JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
GENERAL INFORMATION
Registration
Directors
Josef Dimech
Jesmond Manicaro (appointed on 7 September 2022)
Stephen Muscat
Jonathan Pace (appointed on 7 September 2022)
Stanley Portelli
Gaetano Vella (resigned on 7 September 2022)
Company secretary
Malcolm Falzon (appointed on 1 February 2023)
Jesmond Manicaro (resigned on 1 February 2023)
Registered office
Bankers
Bank of Valletta p.l.c. Izola Bank p.l.c.
58, Zachary Street 53/58, East Street
Valletta VLT 1130 Valletta VLT 1251
Malta Malta
Auditors
RSM Malta
Mdina Road
Zebbug ZBG 9015
Malta
JD Capital PLC isregistered in Malta as apublic limited liability company under the Companies Act (Cap. 386).
The Company's registration number is C 82098.
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3
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JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
DIRECTORS' REPORT
Principal activity
Performance review
As
at
31
December
2022,
the
Group's
total
assets
amounted
to
€57,486,130
(2021:
€47,280,206)
and
net
assets amounted to €16,805,112 (2021: €16,586,795).
The directors submit their report and the audited financial statements of JD Capital PLC ("the Company")
and the audited consolidated financial statements of the Company and its subsidiaries (together, "the
Group") for the year ended 31 December 2022.
The Company's principal activity is to act as a holding company and to provide financing to its subsidiaries.
The
Group
is
engaged
in
the
business
of
providing
aluminium,
steel,
wrought
iron,
large
scale
glass
formats,
and stainless-steel works, as well as the construction of steel structures. The Group also holds an
investment property.
During the year under review, the Group made a profit before tax of €417,526 (2021: €468,117). For the
same year, the Company made a loss before tax of €237,189 (2021: €3,649).
As
at
31
December
2022,
the
Company's
total
assets
amounted
to
€21,212,341
(2021:
€12,644,562)
and
net assets amounted to €7,258,642 (2021: €7,495,632).
During 2022, a war between Ukraine & Russia was registered. The Company has not made any sales
overseasanditdoes nothaveanycontracts for rawmaterials in Ukraineor Russia. Furthermore, noneof
the Company's clients, which are Malta-based have suspended their projects or cancelled orders.
Meanwhile, management has assessed that the war has resulted in an increase in raw material prices
around Europe, however this has not left any outstanding impact on the financial statements nor any
outstandinguncertaintieswithrespecttoeventsorconditionswhichmayimpacttheCompanyunfavourably
as at the reporting period or subsequently as a result of a prolonged war.
Despite
these
significant
challenges,
coupled
with
a
decrease
in
revenue
of
27%
when
compared
to
the
previous year, the Group still managed to obtain positive results as it was able to: (1) increase its profit
beforetaxasapercentageoverrevenue from2.9%to 3.5%,(2)theGroup’stotal assetshaveincreasedto
a total valueof €57.5mfrom€47.3mwhen compared to 2021. Thisrepresents an increase of21.6%, and (3)
ithasdrasticallyimproveditscashflowpositionasitendedthefinancialyearwithapositive cash andcash
equivalents balance of €882,676 when compared with a negative position of €140,054 in 2021.
The Grouphas aclear financial frameworkand remains highly disciplinedand focusedon itscash-flows and
on increasing its working capital to ensure that it can continue with its targeted investments in order to
remain competitive and relevant in the short to medium term thus, securing the Group’s future.
The board of directors is confident that the Group’s disciplined and focused approach, together with
remainingsensitivetoindustry trendsandbeingresponsivetoinvestmentopportunities,will ensurethatthe
Group will remain at the forefront of the construction industry and thus remain relevant in the short to
medium term.
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4
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JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
DIRECTORS' REPORT - continued
Results and dividends
Principal risks and uncertainties
Disclosures of material matters
JD Capital p.l.c. has the following 3 material contracts:
i. €4.9m loan given to JD Operations Limited. This relates to the Prospects bond obtained in 2018;
ii.
iii.
Company Secretary and Registered Office
Financial risk management
Events after the end of the reporting period
The Groupis exposedto credit,liquidity,and interestrate risks.Theseare furtheranalysed in Note 31 inthe
financial statements.
Theresultsfortheyear are setoutinthe statementsof comprehensiveincomeon page12.Duringtheyear
ended 31 December 2022, the directors do not recommend the payment of a dividend (2021: NIL).
The
Group
is
mainly
dependent
on
the
operations
of
one
of
its
subsidiaries,
JD
Operations
Limited,
its
main
lineof business beingthe installationandmanufacture of aluminium apertures,steel structures and large-
scale glass formats. The full list of key risks listedin the base prospectus are stillapplicable.To mitigate
suchrisktheCompanyisdiversifying itsbusinesslinesaspertheBaseProspectusissuedtothepublicon
3
rd
October 2022
.
Apart from the above, the Group is subject to various other risks such as market, economic, credit and
liquidity risks thatmayaffecttheGroup’sprojects andtheirtimelycompletions.Thedirectors areconfident
thattheCompanyhastherightframework andtheappropriatepoliciesandproceduresinplacetomitigate
the effects that the aforementioned risks might have on the business.
€3.6mloangrantedtoJD OperationsLimitedas workingcapital. ProceedsobtainedbyJD capitalp.l.c.
from bond issue in November 2022
€5m loan agreement with JD Operations Limited for the redevelopment of the Hal-Far factory. Again,
proceeds obtain by JD Capital p.l.c. from the bond issue that took place in November 2022.
During the year ended 31 December 2022 Dr Jesmond Manicaro served as company secretary and
resigned from this post on 01 February 2023. On the same date Mr. Malcolm Falzon was appointed as
company secretary. The Company's registered office is HHF 303 Industrial Estate, Hal Far, Birzebbugia
BBG 3000, Malta.
There are no events after the end of the reporting period which require mention in this report.
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5
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JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
DIRECTORS' REPORT - continued
Going concern
Future developments
The directors do not foresee any changes in the operating activities for the forthcoming year.
Directors
During the year ended 31 December 2022, the directors were as listed on page 3.
Statement of directors' responsibilities
In preparing the financial statements, the directors are required to:
•
•
select suitable accounting policies and apply them consistently;
•
make judgements and estimates that are reasonable and prudent;
•
account for income and charges relating to the accounting period on accruals basis;
•
value separately the components of asset and liability items;
•
report comparative figures corresponding to those of the preceding accounting period; and
•
As at 31 December 2022, the Group’s current assets exceeded its current liabilitiesby €8,776,912(2021:
2,398,389).
The directors, at the time of approvingthefinancialstatements, have determined thatthere is reasonable
expectation that the Group and the Company have adequate resources to continue operating for the
foreseeablefutureandforthisreason,thedirectorshaveadoptedthegoingconcernbasisinpreparingthe
financial statements.
In accordance with the Company's Memorandumand Articles ofAssociation, thepresent directorsremainin
office, but shall retire from office at least once every three years. However, they shall be eligible for re-
election.
TheCompaniesAct(Cap.386),enactedinMalta,requiresthedirectorstopreparefinancialstatementsfor
each financialyear which give atrueand fairview ofthe financialposition ofthe Company andoftheGroup
as at year end and of their profit or loss for the year then ended.
adopt thegoing concernbasisunless itisinappropriate topresumethat theCompanyand theGroupwill
continue in business;
preparethefinancialstatementsinaccordancewithgenerally acceptedaccountingprinciplesasdefined
in the Companies Act (Cap. 386) and in accordance with the provision of the same Act.
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6
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JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
DIRECTORS' REPORT - continued
Statement of directors' responsibilities - continued
Auditors
Statement by directors on the financial statements and other information included in the report
The directors declare that to the best of their knowledge:
•
•
Signed on behalf of the Board of Directors on 25 April 2023 by Josef Dimech (Director) and Stephen Muscat
(Director) as per the Director's Declaration on ESEF Annual Financial Report submitted in conjunction with
the Annual Financial Report.
The directors are responsible for keeping proper accounting records which disclose with reasonable
accuracyatany timethefinancialpositionoftheCompanyandoftheGroupandtoenablethemtoensure
that the financial statements comply with the Companies Act (Cap. 386). This responsibility includes
designing, implementing and maintaining 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. The directors are also responsible for safeguarding the assets of the Companyand of the
Group and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
RSMMalta,RegisteredAuditors, haveexpressedtheirwillingnesstocontinueinofficeandaresolution for
their reappointment will be proposed at the Annual General Meeting.
the financialstatementsgive a trueand fairview ofthe financialposition and financial performanceof the
Group andoftheCompany andhave been preparedin accordancewith International Financial Reporting
Standards (IFRS) as adopted by the European Union and with the Companies Act (Cap 386); and
this
report
includes
a
fair
review
of
the
development
and
performance
of
the
business
and
positions
of
the
Groupandof theCompany,togetherwithadescriptionoftheprincipalrisks anduncertaintiesthatthey
face.
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7
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JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
STATEMENT OF COMPLIANCE WITH THE
PRINCIPLES OF GOOD CORPORATE GOVERNANCE
PART I - Compliance with the Code
Principle 1: The Board
Principle 2: Chairman and Chief Executive
Principle 3: Composition of the Board
The Board of the Company who served during the year until 31 December 2022 was as follows:
Directors
Mr. Josef Dimech
Executive Director
Mr. Jonathan Pace
Executive Director
(as from 07 September 2022)
Dr. Stanley Portelli
Non-executive Director
Mr. Gaetano Vella
Non-executive Director
(up until 07 September 2022)
Mr. Stephen Muscat
Non-executive Director
Dr. Jesmond Manicaro
Non-executive Director
(as from 07 September 2022)
Company secretary
Dr. Jesmond Manicaro
(up until 01 February 2023)
JD Capital PLC ("the Company") is committed to observing the principles of transparent and responsible
corporategovernance.The Boardconsiders compliancewithcorporategovernanceprinciplestoconstitute
animportantmeansofmaintainingtheconfidenceofpresentand futurebondholders,creditors,employees,
business partners andthe public. Pursuant to the Capital MarketRules, the Company is hereby presenting a
statementofcompliancewith theCodeof PrinciplesofGood Corporate Governance(“thePrinciples” or“the
Code”) for theyearended 31 December 2022,which detailstheextent to which thePrinciples havebeen
adopted, as well as the effective measures taken by the Company to ensure compliance with these
Principles.Other thanasstated in PartTwo below,the Companyhas fullyimplemented the Principlesset
out in the Code.
The
composition
of
the
Board
of
Directors
ensures
that
the
Company
is
led
by
individuals
who
have
the
necessary skills and diversity of knowledge. The Board considers strategic issues, key projectsand regularly
monitors performance against delivery of the key targets of the Group’s business plan.
The Company has noemployees. Mr JosefDimech,an Executive Director ofthe Company, is alsothe Chief
Executive Officer of the Company’s main subsidiary.
The
Board
considers
that
the
non-executive
directors
are
independent
of
management
and
free
from
any
business or other relationship that could materially interfere with the exercise of their independent
judgement.Themembers oftheBoardhavethebalanceofknowledgeandexperienceaswellasastrong
non-executive presence to allow continued scrutiny of performance, strategy, and governance.
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8
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JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
STATEMENT OF COMPLIANCE WITH THE
PRINCIPLES OF GOOD CORPORATE GOVERNANCE - continued
PART I - Compliance with the Code - continued
Principle 3: Composition of the Board - continued
The Board considers that none of the independent Directors of the Company:
• is or has been employed in any capacity by the Company;
•
has or has had, over the past three years, a significant business relationship with the Company;
•
•
has close family ties with any of the Company’s executive directors or senior employees; and
•
Each of the independent Directors hereby declares that he undertakes to:
•
maintain in all circumstances his independence of analysis, decision and action;
•
•
clearly express his opposition in the event that he finds that a decision of the Board may harm the Company.
Principle 4: The Responsibilities of the Board
Principle 5: Board Meetings
The Board has met ten times during the year. All Directors were present on all these meetings.
For the purpose of the Capital Market Rules, the non-executive directors are deemed independent. Each
directorismindfulofmaintainingindependence, professionalism,andintegrity incarrying outhisduties and
responsibilities, whilst providing judgement as a director of the Company.
has received or receives significant additionalremuneration fromthe Company in addition to his director’s
fee;
has been within the last three years an engagement partner or a member of the audit team or past
external auditor of the Company.
not seek or accept any unreasonable advantages that could be considered as compromising his
independence; and
The
Board
has
responsibility
for
overseeing
the
strategic
planning
process
and
reviewing
and
monitoring
management’s execution of the corporate and group business plan. The Board delegates certain powers,
authorities and discretions to the audit committee. The role and competence of such committee is further
described in Principle 8 hereunder.
The
Board
meets
at
least
six
times
a
year
unless
further
meetings
are
required
in
accordance
with
the
needs
of the Company. The Board has a schedule of matters reserved for it to discuss.
Each
Director
is
expected
to
attend
all
meetings
of
the
Board
and
Board
committees
of
which
the
Director
is
a member.TheBoardrecognisesthat occasionalmeetingsmayneed tobescheduled on shortnoticewhen
the participation ofaDirectorisnotpossible andthat conflictsmay arise fromtimeto timethat will prevent a
Directorfrom attendingorparticipatingina regularlyscheduledmeeting. However,theBoard expectsthat
each Director will make every possible effort to keep such absences to a minimum.
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9
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JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
STATEMENT OF COMPLIANCE WITH THE
PRINCIPLES OF GOOD CORPORATE GOVERNANCE - continued
PART I - Compliance with the Code - continued
Principle 6: Information and Professional Development
Principle 7: Evaluation of the Board’s Performance
Principle 8: Committees
The Board delegates certain powers, authorities and discretions to the audit committee.
Audit Committee
The audit committee comprises of the following independent, non-executive Directors:
Mr. Stephen Muscat
Chairman
Dr. Stanley Portelli
Member
Dr. Jesmond Manicaro
Member
The audit committee met four times during the year. All members were present on all these meetings.
Principles 9 and 10: Relations with Bondholders and with the Market and Institutional Shareholders
The Company issues company announcements to keep the market informed of the group developments.
The
Company
firmly
believes
in
the
professional
development
of
all
the
members
of
the
Board.
The
CEO
and Senior management of the subsidiary are invited to attend Board meetings from time to time when
The
Board
and
each
of
its
committees
perform
an
annual
self-evaluation
of
their
performance
through
a
series of questionnaires, the results of which are analysed accordingly.
The
audit
committee’s
primary
role
is
to
support
the
main
Board
in
terms
of
quality
control
of
the
Company’s
financial reports, its internal controls and in managing the Board’s relationships with the external auditors.
In compliancewith the CapitalMarketRules, Mr. Stephen Muscat is the independent, non-executiveDirector
who is competent in accounting and/or auditing matters in view of his considerable experience as a
warranted Certified Public Accountant.
The
Company
is
committed
to
having
an
open
and
communicative
relationship
with
its
bondholders.
The
Board believes that bondholders should have an opportunity to send communications to the Board. Any
communicationfromabondholder to the Board generallyor a particular Director should be in writing,signed,
contain the number of bonds held in the sender’s name and should be delivered to the attention of the
company secretary at the registered office of the Company.
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10
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JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
STATEMENT OF COMPLIANCE WITH THE
PRINCIPLES OF GOOD CORPORATE GOVERNANCE - continued
PART I - Compliance with the Code - continued
Principle 11: Conflicts of Interest
Principle 12: Corporate Social Responsibility
PART II - Non-compliance with the Code
Principle 7: Evaluation of the Board’s Performance
Principle 8: Committees
The Memorandum and Articles of Association of the Company regulates the appointment of Directors.
The
Directors
should
always
act
in
the
best
interest
of
the
Company
and
its
shareholders
and
investors.
The
proceduresinternally followed by theBoardreflecthow sensitive suchsituations, ifandwhen they arise,are
considered by the Company. In accordance with the provisions of the Articles of Association of the
Company,anyactual,potentialorperceivedconflictofinterestmustbeimmediatelydeclaredbyaDirector
to the other membersof theBoard, who then (also possibly through a referral to the audit committee)decide
onwhethersucha conflictexists. Inthe eventthattheBoardperceivessuchinterest tobe conflictingwith
theDirector’sduties,theconflictedDirectorisrequiredtoleavethemeetingandboththediscussiononthe
matter and the vote, if any, on the matter concerned are conducted in the absence of the conflicted Director.
The
Company
remains
committed
to
being
a
responsible
company
and
making
a
positive
contribution
to
societyand the environment. This helps the Group developstrong relationshipswithits stakeholders, and
createlong-termvalueforsocietyanditsbusiness.TheGroupiscommitted toplay aleadingandeffective
roleinMalta’s sustainabledevelopmentwhilst tangibly provingitselftobearesponsibleandcaringentity of
the community in whichit operates. The Group continues to support a number of different local initiatives
aimed at improving the quality of life of the local communities it supports.
Even
though
the
Board
undertook
a
self-evaluation
of
its
own
performance,
it
did
not
appoint
an
ad
hoc
committee to carry out such evaluation. The Board believes that the outcome of such self-assessment
exercise currently provides the deliverables needed.
The
Board
believes
that
the
setting
up
of
a
Nomination
Committee
and
a
Remuneration
Committee
is
currently not suited to the Company as envisaged by the spirit of the Code.
This
statement
of
compliance
with
the
principles
of
good
corporate
governance
has
been
approved
by
the
Board of Directors and signed on its behalf by:
Signed on behalf of the Board of Directors on 25 April 2023 by Josef Dimech (Director) and Stephen Muscat
(Director) as per the Director's Declaration on ESEF Annual Financial Report submitted in conjunction with
the Annual Financial Report.
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11
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JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
STATEMENTS OF COMPREHENSIVE INCOME
2022
2021
2022
2021
Notes
€
€
€
€
Revenue 5 11,831,725 16,268,211 - -
Cost of sales (10,705,255 ) (14,448,372 ) - -
Gross profit 1,126,470 1,819,839 - -
Selling and distribution expenses (140,999 ) (151,333 ) - -
Administrative expenses (1,013,528 ) (807,288 ) (275,392) (72,149)
Other income 6 213,496 293,852 - -
Operating profit/(loss) 7 185,439 1,155,070 (275,392) (72,149)
Revaluation of investment property 14 971,285 - - -
Finance and dividend income 9 41,899 205,822 342,299 318,500
Finance costs 10 (723,655 ) (583,652 ) (292,936) (250,000)
Other losses 11 (1,721 ) (11,700 ) - -
(55,721 ) (297,423 ) (11,160) -
Profit/(loss) before tax 417,526 468,117 (237,189) (3,649)
Tax credit/(charge) 12 (199,209 ) (308,719 ) 199 (66,429)
Profit/(loss) for the year 218,317 159,398 (236,990) (70,078)
Other comprehensive income
Owners of the Company 218,317 159,398 (236,990) (70,078)
Owners of the Company 218,317 8,016,198 (236,990) (70,078)
Basic earnings/(loss) per share
Total comprehensive income/(loss)
for the year
Group
Company
Movement in expected credit loss
provision
Items that will not be reclassified
subsequently to profit or loss
Revaluation of land and buildings, net of
tax
Profit/(loss) for the year
attributable to:
Total comprehensive income/(loss)
attributable to:
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12
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JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
STATEMENTS OF FINANCIAL POSITION
2022
2021
2022
2021
Notes
€
€
€
€
ASSETS
Non-current assets
Property, plant and equipment
13
-
-
Investment property
14
-
-
Intangible asset
15
-
-
Investment in subsidiaries
16
7,502,400
7,502,400
Financial assets at amortised cost
17
7,004,388
4,884,810
Trade and other receivables
19
-
-
Deferred tax asset
12
-
-
14,506,788
12,387,210
Current assets
Financial assets at amortised cost
17
45,400
55,780
Inventories
18
-
-
Contract assets
20
-
-
Trade and other receivables
19
6,650,166
201,367
Cash and cash equivalents
28
9,987
205
6,705,553
257,352
TOTAL ASSETS
21,212,341
12,644,562
EQUITY AND LIABILITIES
Capital and reserves
Share capital
Revaluation reserve
22
Retained earnings/(Accumulated losses)
(288,058)
(51,068)
TOTAL EQUITY
7,258,642
7,495,632
Non-current liabilities
Borrowings
24
13,625,498
4,916,640
Lease liabilities
25
-
-
Trade and other payables
27
-
-
Deferred tax liabilities
12
-
-
Non-current tax liabilities
-
-
13,625,498
4,916,640
Current liabilities
Borrowings
24
237,962
3,592
Lease liabilities
25
-
-
Contract liabilities
26
-
-
Current tax liabilities
-
47,950
Trade and other payables
27
90,239
180,748
328,201
232,290
TOTAL LIABILITIES
13,953,699
5,148,930
TOTAL EQUITY AND LIABILITIES
21,212,341
12,644,562
Group
Company
The financial statements were approved and authorised for issue by the Board of Directors on 25 April 2023.
The financial statements were signed on behalf of the Board of Directors by Josef Dimech (Director) and
Stephen Muscat (Director) as per the Directors' Declaration on ESEF Annual Financial Report submitted in
conjunction with the Annual Financial Report.
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13
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JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
STATEMENTS OF CHANGES IN EQUITY
Share
Other
Revaluation
Retained
capital
equity
Reserve
earnings
Total
€
€
€
€
€
Balance at 1 January 2021
Profit for the financial year
Other comprehensive income
Balance at 31 December 2021 7,546,700 - 7,856,800 1,183,295 16,586,795
Balance at 1 January 2022
Profit for the financial year
Balance at 31 December 2022 7,546,700 - 7,856,800 1,401,612 16,805,112
Share
Other
Revaluation
Retained
capital
equity
Reserve
earnings
Total
€
€
€
€
€
Balance at 1 January 2021
245,100
7,301,600
-
19,010
7,565,710
7,301,600 (7,301,600) - - -
Loss for the financial year
-
-
-
(70,078)
(70,078)
Balance at 31 December 2021 7,546,700 - - (51,068) 7,495,632
Balance at 1 January 2022
7,546,700
-
-
(51,068)
7,495,632
Loss for the financial year
-
-
-
(236,990)
(236,990)
Balance at 31 December 2022 7,546,700 - - (288,058) 7,258,642
Total comprehensive loss for the year:
Group
Financial period ended
31 December 2021:
Share capital increase in exchange for
non-cash consideration
Total comprehensive income for the
year:
Financial year ended
31 December 2022:
Total comprehensive income for the
year:
Company
Financial period ended
31 December 2021:
Share capital increase in exchange for
non-cash consideration
Total comprehensive loss for the year:
Financial year ended
31 December 2022:
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14
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JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
STATEMENTS OF CASH FLOWS
2022
2021
2022
2021
Notes
€
€
€
€
Cash flows from operating activities
Profit before tax
(237,189)
(3,649)
Adjustments for:
Finance costs
10
292,310
250,000
Depreciation
13
-
-
Movement in impairment on financial assets
(49,883 )
11,160
-
Amortisation of bond issue costs
86,254
10,670
Loss on disposal of motor vehicles
11
-
-
Gain on revaluation of investment
property
(971,285 )
-
-
Finance and dividend income
9
(41,899 )
(205,789 )
(342,299)
(318,500)
Cash used in operations before
working capital changes
(189,764)
(61,479)
Increase in inventories
(154,334 )
-
-
Increase in trade and other receivables
and contract assets
(9,548,656 )
(7,130,580 )
(6,438,419)
(550)
Increase/(Decrease) in trade and other
payables and contract liabilities
(3,369)
15,156
Cash (used in)/from operations
(7,271,281 )
(1,668,509 )
(6,631,552)
(46,873)
Interest paid
-
-
Interest received
342,299
318,500
Taxes paid
(220,476 )
(59,802 )
(47,751)
(18,908)
Net cash flows (used in)/from operating
activities
(7,491,757 )
(1,728,311 )
(6,337,004)
252,719
Cash flows from investing activities
Payments for additions of:
Property, plant and equipment
(143,540 )
(216,846 )
-
-
Investment property
(531 )
-
-
Receipt from disposal of motor vehicles
-
-
Net receipts from loans
-
-
Movement in amounts due from subsidiary,
parent company and related company
Net cash flows used in from investing
activities
(185,883 )
(2,130,738)
(2,726)
Cash flows from financing activities
Proceeds from bank borrowings
-
-
Issuance of bond
8,622,604
-
Repayment of bank borrowings
(2,855,514 )
(1,680,382 )
-
-
Interest paid
(629,690 )
(406,760 )
(379,450)
(250,000)
Interest paid on lease liabilities
(175,136 )
(176,892 )
-
-
Payments on finance leases
(36,442 )
(34,248 )
-
-
Movement in amounts due to subsidiary,
ultimate shareholder and related company
Net cash flows from/(used in) financing
activities
8,477,524
(250,000)
Net cash movement during the year
(150,557 )
9,782
(7)
Cash and cash equivalents at
beginning of year
(140,054 )
205
212
Cash and cash equivalents at
end of year 28 882,676 (140,054 ) 9,987 205
Significant non-cash transactions are disclosed in Note 29 to the financial statements
Group
Company
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15
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Annual Report and Consolidated Financial Statements - 31 December 2022
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16
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17
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Annual Report and Consolidated Financial Statements - 31 December 2022
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18
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25
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Annual Report and Consolidated Financial Statements - 31 December 2022
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Annual Report and Consolidated Financial Statements - 31 December 2022
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29
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30
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Annual Report and Consolidated Financial Statements - 31 December 2022
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31
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Annual Report and Consolidated Financial Statements - 31 December 2022
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32
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Annual Report and Consolidated Financial Statements - 31 December 2022
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Annual Report and Consolidated Financial Statements - 31 December 2022
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35
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Annual Report and Consolidated Financial Statements - 31 December 2022
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38
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Annual Report and Consolidated Financial Statements - 31 December 2022
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Annual Report and Consolidated Financial Statements - 31 December 2022
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44
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Annual Report and Consolidated Financial Statements - 31 December 2022
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45
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Annual Report and Consolidated Financial Statements - 31 December 2022
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46
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JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
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47
_____________________________________
INDEPENDENT AUDITORS' REPORT
To the Shareholders of JD Capital PLC
Report on the Audit of the Financial Statements
Opinion
Basis for Opinion
WehaveauditedtheaccompanyingfinancialstatementsofJDCapitalPLC(“theCompany”)andthe
consolidatedfinancialstatementsoftheCompany anditssubsidiaries(together,“theGroup”),setout
onpages12- 47,which comprisethestatements offinancialposition as at31December 2022,the
statements ofcomprehensiveincome,statementsofchangesinequityandstatementsofcashflows
for the year then ended, and notes to the financial statements, including a summary of significant
accounting policies.
In
our
opinion,
the
financial
statements
give
a
true
and
fair
view
of
the
financial
position
of
the
Company and of the Group as at 31 December 2022, and of their financial performance and cash
flows fortheyearthenendedinaccordancewith InternationalFinancialReportingStandards("IFRS")
asadoptedbythe EuropeanUnion("EU"), andhavebeen properlypreparedinaccordance withthe
requirements of the Companies Act (Cap. 386).
Our report is consistent with the additional report to the audit committee in accordance with the
provision of Article 11 of the EU Regulations No. 537/2014 on specific requirements on statutory
audits of public-interest entities.
We conducted our audits in accordance with International Standards on Auditing ("ISA"). Our
responsibilities under those standards are further described in the Auditors’ Responsibilities for the
AuditoftheFinancialStatements sectionofourreport.WeareindependentoftheCompanyandthe
Group in accordance with the ethical requirements of both the International Ethics Standards Board
for Accountants’ International Code of Ethics for Professional Accountants (including International
Independence Standards) (IESBA Code) and theAccountancy Profession(Codeof Ethics for Warrant
Holders) Directive issued in terms of the Accountancy Profession Act (Cap. 281) in Malta that are
relevant to our audits of thefinancial statements,and we have fulfilledour otherethical responsibilities
in accordance with these requirements and the IESBA Code and the Code of Ethics for Warrant
HoldersinMalta.We believethattheauditevidencewehave obtainedissufficientandappropriate to
provide a basis for our opinion.
48
INDEPENDENT AUDITORS' REPORT - continued
Report on the Audit of the Financial Statements - continued
Basis for Opinion - continued
Key Audit Matters
Revenue from contracts with customers
Valuation of investment property
Our audit procedures included, amongst others, the following:
•
•
• Testing the mathematical accuracy of the calculations derived from the forecast model.
•
Considering the objectivity, independence, competence and capabilities of the external valuer.
Tothebestofourknowledgeandbelief,wedeclarethatnon-auditservicesthatwehaveprovidedto
theGroupareinaccordance withthe applicable lawsandregulations inMaltaandthatwehavenot
providedanynon-audit services thatareprohibitedunderArticle18Aofthe AccountancyProfession
Act (Cap. 281).
Thenon-auditservicesthatwehaveprovidedtotheGroupduringtheyeararedisclosedinNote7in
the financial statements.
Keyauditmattersarethosemattersthat,inourprofessionaljudgement,wereofmostsignificancein
our audit of the financial statements of the current period. These matters were addressed in the
context ofour audit ofthefinancial statementsasa whole,andin formingour opinion thereon,and we
do not provide a separate opinion on these matters.
Revenue
is
determined
through
the
estimation
of
the
stage
of
completion
and
the
expected
outcome
of the project. Given this estimation process, it is possible that changes in future conditions could
require a change in the recognised amount of revenue.
Our audit procedures included an analysis of contracts, bills of quantities prepared by third parties
and/or project supervisors, project costs and budgets and/or any other relevant assessments as
provided by management.
The Group's investment property pertaining to a land in Birkirkara is carried at fair value of
€5,494,000. Valuation of this property is inherently subjected to, among other factors, the individual
nature of the property, its location, and the expected future revenues to be derived from the property.
The
existence
of
significant
estimates
used
to
arrive
at
the
fair
value
of
the
property,
could
result
in
a
potential material misstatement by virtue of the inherent uncertainties underlying the estimations.
Consequently,specificauditfocusandattentionwasgiventothisarea.Thevaluationoftheproperty
was performed by management on the basis of valuation reports prepared by an independent
qualified architect.
Assessing the valuation inputs and assumptions used on which the forecasts were made.
Assessing the key valuation inputs and assumptions used on which the forecasts were made.
49
INDEPENDENT AUDITORS' REPORT - continued
Report on the Audit of the Financial Statements - continued
Key Audit Matters - continued
Valuation of property, plant and equipment
Our audit procedures included, amongst others, the following:
•
•
• Testing the mathematical accuracy of the calculations derived from the forecast model.
•
Assessment of the recoverability of receivables
Our audit procedures included, amongst others, the following:
•
•
•
•
Reviewing the terms surrounding the agreements.
The Group’s industrial buildings carried at fair value relate to the emphyteusis on the factory in Hal
Far. Thishada carryingamount of€19,335,671 asatyear-end.Valuationofthispropertyisinherently
subjectedto,amongotherfactors,theindividualnatureoftheproperty,itslocation,andtheexpected
future revenues to be derived from the property.
The
existence
of
significant
estimates
used
to
arrive
at
the
fair
value
of
the
property,
could
result
in
a
potential material misstatement by virtue of the inherent uncertainties underlying the estimations.
Consequently,specificauditfocusandattentionwasgiventothisarea.Thevaluationoftheproperty
was performed by management on the basis of valuation reports prepared by an independent
qualified architect.
Considering the objectivity, independence, competence and capabilities of the external valuer.
Reviewing the methodology used by the external valuer and by management to estimate the fair
value of the industrial buildings.
Assessing the key valuation inputs and assumptions used on which the forecasts were made.
Weidentifiedtherecoverabilityoftheaccountsreceivableasakeyauditmatterduetothesignificant
degree of judgements made by management in assessing the impairment of the receivables and
consequently, in determining the extent of allowance for expected credit losses ("ECL").
As at 31 December 2022, the Group had a loan receivable and amounts due from the parent company
totalling to €1,712,531, amounts due from a related company of €5,331,980, other receivables from
third party amounting to €6,438,239, and trade receivables and contract assets totalling €9,985,368.
Assessing the financial soundness of the third party and the parent company taking into account
their business plans and strategies.
Understanding and evaluating the workings and assumptions underlying the assessments for the
loss allowances under IFRS 9.
Basedonevidenceandexplanationsobtained,weconcurwithmanagement'sviewwithrespectto
the recoverability of the balances.
50
INDEPENDENT AUDITORS' REPORT - continued
Report on the Audit of the Financial Statements - continued
Other Information
Based on the work we have performed, in our opinion:
• the directors’ report has been prepared in accordance with the Companies Act (Cap. 386);
•
•
Inpreparingthefinancialstatements,thedirectorsareresponsibleforassessingtheCompany’sand
theGroup'sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoing
concern and using the going concernbasis of accounting unless thedirectorseither intendto liquidate
the Company and/or the Group or to cease operations, or have no realistic alternative but to do so.
Thedirectorsareresponsiblefortheotherinformation. Theotherinformationcomprises thegeneral
information, the directors’ report and the statement of compliance with the principles ofgood corporate
governance. Ouropiniononthefinancialstatementsdoesnotcovertheotherinformation,exceptas
explicitly stated under 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
appearsto bematerially misstated. If, basedon thework we have performedon theother information
that we have obtained prior to the date of this auditors’ report, we conclude that there is a material
misstatement of this other information, we are required to reportthat fact. We have nothing toreport in
this regard.
Under Article 179(3) of the Companies Act (Cap. 386), we are required to consider whether the
informationgivenin the directors’reportis compliant with thedisclosure requirementsof Article177of
the same Act.
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
inlightofourknowledgeandunderstandingoftheCompanyandtheGroup,andtheirenvironment
obtained inthecourseoftheaudit,wehavenotidentifiedmaterial misstatementsin thedirectors’
report.
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 IFRS as adopted by the EU and the requirements of the Companies Act (Cap.
386), and forsuch internalcontrol as thedirectorsdetermine isnecessary to enable thepreparationof
financial statements that are free from material misstatement, whether due to fraud or error.
Thosechargedwithgovernanceareresponsibleforoverseeingthefinancial reportingprocess ofthe
Group and the Company.
51
INDEPENDENT AUDITORS' REPORT - continued
Report on the Audit of the Financial Statements - continued
Auditors’ 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 auditors’ report
thatincludesouropinion. Reasonableassuranceisahighlevelofassurance,butisnotaguarantee
that an audit conducted in accordance with ISAs will alwaysdetect a material misstatement when it
exists. Misstatements can arise fromfraudorerror andareconsidered material if,individually or inthe
aggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenon
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
detectingamaterialmisstatementresulting fromfraudishigher than for one resulting fromerror, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditprocedures
thatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinion onthe
effectiveness of the Company and the Group’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
conditionsthatmaycastsignificantdoubtontheCompanyandtheGroup’sabilitytocontinueasa
going concern. If we conclude that a material uncertainty exists, we are requiredto draw attention in
ourauditors’reporttotherelateddisclosuresinthefinancialstatementsor,ifsuchdisclosuresare
inadequate,tomodifyouropinion.Ourconclusionsarebasedontheauditevidenceobtainedupto
the date of our auditors’ report. However, future events or conditions may cause the Company
and/or the Group to cease to continue as a going concern.
evaluate the overall presentation, structure and content of the financial statements, including the
disclosures,andwhetherthefinancialstatementsrepresenttheunderlyingtransactionsandevents
in a manner that achieves fair presentation.
obtain sufficient appropriate audit evidence regarding the financial information of the entities or
businessactivitieswithintheGroup toexpressanopiniononthe consolidatedfinancialstatements.
We are responsible for the direction, supervision and performance of the groupaudit. Weremain
solely responsible for our audit opinion.
52
INDEPENDENT AUDITORS' REPORT - continued
Report on the Audit of the Financial Statements - continued
Auditors’ Responsibilities for the Audit of the Financial Statements - continued
Report on Other Legal and Regulatory Requirements
Report on the Statement of Compliance with the Principles of Good Corporate Governance
From the matters communicated with the directors, 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 auditors’ 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.
Wecommunicatewiththedirectorsregarding,amongothermatters,theplannedscopeandtimingof
theauditandsignificantauditfindings,includingany significantdeficienciesininternalcontrolthatwe
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirementsregarding independence, and communicate with them allrelationships andother matters
that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
The Capital Market Rules issued by the Malta Financial Services Authority requires the directors to
prepare and include in their Annual Report a Statement of Compliance providing explanation of the
extent to which they have adopted the Code of Principles of Good Governance and the effective
measures that they have taken to ensure compliance throughout the year with those principles.
The CapitalMarket Rulesalsorequirethe auditorsto reporton theStatement ofCompliance prepared
by the directors.
We read the Statement of Compliance and consider the implications for our report if we become
aware of any apparent misstatements or material inconsistencies with the financial statements
included in the Annual Report. Our responsibilities do not extend to considering whether this
statement is consistent with any other information included in the Annual Report.
We are not required to, and wedo not,consider whethertheBoard’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 ouropinion, the Statement of Compliance withthePrinciples of GoodCorporate Governancehas
been properly prepared in accordance with the requirementsof the Capital Market Rulesissuedby the
Malta Financial Services Authority.
53
INDEPENDENT AUDITORS' REPORT - continued
Report on Other Legal and Regulatory Requirements - continued
Responsibilities of the directors
Auditors’ responsibilities
Our procedures included:
•
•
•
Opinion
examining the information in the annual financial report to determine whether all the required
taggings therein have been applied and whether, in all material respects, they are in accordance
with the requirements of the ESEF RTS.
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
Directive6issuedby theAccountancyBoardintermsoftheAccountancyProfessionAct(Cap.281)-
the Accountancy Profession (European Single Electronic Format) Assurance Directive (the “ESEF
Directive6”)ontheannualfinancialreportofJDCapitalPLCfortheyearended31December2022,
entirely prepared in a single electronic reporting format.
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.
Our responsibility is to obtain reasonable assurance about whether the annual financial report,
including theconsolidated financial statements and the relevant electronic tagging therein complyin
allmaterialrespectswith theESEF RTSbasedontheevidencewe have obtained.We conductedour
reasonable assurance engagement in accordance with the requirements of ESEF Directive 6.
obtaining an understanding of the entity's financial reporting process, including the preparation of
the annual financial report, in accordance with the requirements of the ESEF RTS.
obtaining the annual financial report and performing validations to determine whether the annual
financial report has been prepared in accordance with the requirements of the technical
specifications of the ESEF RTS.
Webelievethattheevidencewe have obtainedissufficientandappropriatetoprovideabasisforour
opinion.
Inouropinion,theannualfinancialreportfortheyearended31December2022hasbeenprepared,
in all material respects, in accordance with the requirements of the ESEF RTS.
54
INDEPENDENT AUDITORS' REPORT - continued
Report on Other Legal and Regulatory Requirements - continued
Other Matters on which we are Required to Report by Exception
• proper accounting records have not been kept; or
• returns have not been received from branches we have not visited; or
• the financial statements are not in agreement with the accounting records and returns; or
•
We have nothing to report in this regard.
Appointment
This copy of the audit report has been signed by:
Conrad Borg
(Principal)
for and on behalf of
RSM Malta
Registered Auditors
25 April 2023
Under the Companies Act (Cap. 386), we are required to report to you if in our opinion:
we were unable to obtain all the information and explanations which, to the best of our knowledge
and belief, are necessary for the purposes of our audit.
We also have responsibilities under the Capital Market Rules to review the statement made by the
directors thatthebusiness isa going concern togetherwith supporting assumptions orqualifications
as necessary.
We were first appointed to act as statutory auditors of the Company by the shareholders of the
Company on 18 June 2018 for the period ended 31 December 2018, and we were subsequently
reappointedbythe shareholdersattheCompany'sgeneralmeetingforthefinancialyearsthereafter.
The period of uninterrupted engagement as statutory auditor of the Company is five financial periods.
55
