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Registration number C 12271
AX GROUP P.L.C.
Annual Report and Consolidated and Separate
Financial Statements
For the year-ended 31 October 2025
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
Contents
Page
Directors, Officers and Other Information
1
Directors’ Report
2 – 18
Statement of Directors’ Responsibilities
19
Corporate Governance – Statement of Compliance
20 – 22
Statements of Profit or Loss and Other Comprehensive Income
23
Statements of Financial Position
24 – 25
Statements of Changes in Equity
26 – 27
Statements of Cash Flows
28
Notes to the Financial Statements
29 – 80
Independent Auditor’s Report
81 – 88
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
1
Directors, Officers and Other Information
Registration:
AX Group p.l.c. was registered in Malta as a public limited liability company under the Companies Act, Cap. 386 of the Laws of Malta on 18 January 1991, with the registration number C 12271.
Directors:
Mr Angelo Xuereb
Ms Denise Xuereb
Ms Claire Xuereb
Mr Josef Formosa Gauci
Mr Christopher Paris
Mr John Soler
Mr Michael Warrington
Mr Tonio Fenech (appointed on 11 November 2025)
Secretary:
Dr Edmond Zammit Laferla
Registered office:
AX Group
AX Business Centre
Triq id-Difiza Civili
Mosta, MST 1741
Malta
Country of incorporation:
Malta
Company registration number:
C 12271
Auditors:
Ernst & Young Malta Limited
Regional Business Centre
Achille Ferris Street
Msida, MSD 1751
Malta
Principal bankers:
Bank of Valletta p.l.c.
58, Zachary Street,
Valletta, VLT 1130
Malta
Legal adviser:
Dr David Wain
AX Group
AX Business Centre
Triq id-Difiza Civili
Mosta, MST 1741
Malta
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
2
Directors’ Report
The Directors present their annual report and the audited consolidated and separate financial statements (“the financial statements”) of AX Group p.l.c. (“the Company”) and its subsidiaries (collectively “the Group” or “AX Group”) for the year-ended 31 October 2025.
Principal Activities
The AX Group is primarily engaged in four main business sectors namely; Care, Construction, Hospitality, Real Estate and Development and is also involved in renewable energy.
Performance Review
Company
The Company generated revenues of EUR9,350,675 (2024: EUR13,523,836). This included management fees of EUR2,478,903 (2024: EUR2,217,237), dividends received from subsidiaries of EUR6,656,447 (2024: EUR11,171,486) and rental income of EUR215,325 (2024: EUR135,113). Staff costs incurred amounted to EUR4,658,404 (2024: EUR3,870,169) and operating costs incurred amounted to EUR1,429,334 (2024: EUR1,574,254).
Moreover, during 2025, the Company disposed of EUR4,051,200 (2024: EUR6,169,000) of its holding of AX Real Estate p.l.c. debt instruments, incurring a realised loss of EUR324,908 (2024: EUR595,563). The remaining debt instruments held were remeasured at fair value at year end, resulting in an increase in fair value of EUR303,242 (2024: EUR435,447).
Operating profit of the Company amounted to EUR2,514,638 (2024: EUR9,406,580).
During the year, finance costs rose to EUR3,970,946 (2024: EUR3,716,351), primarily due to higher interest charges on intra-group loans. Conversely, finance income increased by EUR393,341, largely driven by higher interest rates on intra-group lending.
The profit for the year amounted to EUR3,595,957 (2024: EUR9,642,214).
Group
During the current year, the Group registered total revenue of EUR130,909,881 (2024: EUR83,343,606).
The Group’s primary growth during the year was driven by the signing of the first contracts of sale of the Verdala Terraces residential units, generating revenue of EUR34,619,600 from property sales. Additionally, further promise of sale agreements were entered into for these units, further strengthening the outlook for the coming year.
The Hospitality division delivered an outstanding performance, with revenues increasing by EUR7,719,818 compared to 2024. The strongest growth came from Qawra, where the hotel continues to build on the momentum since its reopening in 2023. Both Sliema and Valletta also surpassed their budgeted revenue targets. Additionally, the Hospitality division welcomed the Verdala Wellness Hotel, which opened in August 2025. In its first three months, the hotel has made encouraging progress, successfully attracting occupancy and steadily positioning itself as a premier five-star wellness destination in Malta.
The Care division recorded an 8.2% increase in revenue compared to the prior year. Independent apartments at Hilltop Gardens maintained full occupancy throughout the year, while the Care Home operated at near-full occupancy for most of the period. Improved cost management and revenue growth enabled the division to surpass its budgeted operating profit.
The Construction division has increased its revenue from third-party work by EUR5,581,754 compared to last year. The division has successfully secured numerous contracts for the current year and beyond. The Construction division was still involved in the Verdala project during the current year. The main third-party projects during the current year included construction and finishing works for the Schengen Arrivals Extension at the Malta International Airport, the construction of the St. John Co-Cathedral Annex, construction of a warehouse complex for Quintano and construction works on an office block in Mosta.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
3
Directors’ Report – continued
Performance Review - continued
Group – continued
In February 2025, the Group signed a promise of sale agreement for the acquisition of a plot of land in Marsa. The final deed is expected to be signed in 2026.
In March 2025, the Group entered into another promise of sale agreement to acquire a parcel of land in Naxxar, situated adjacent to the Hilltop Complex.
The Group reported a share of results from associates and joint ventures of EUR1,536,535 (2024: EUR2,104,953). This reflects the Group’s investment in Hardrocks Estates Limited, Valletta Cruise Port p.l.c. and Imselliet Solar Limited, entities in which the Group has a non-controlling interest.
Operating costs rose to EUR58,986,307 in 2025, compared to EUR27,362,043 in 2024. This increase primarily reflects the cost of property sold during the year, amounting to EUR24,124,089, as well as the Group’s expanded operations. Staff costs also grew by 13% compared to the prior year. The higher operating and personnel expenses are consistent with the increased activity within the Hospitality and Construction divisions.
The depreciation of property, plant, and equipment experienced a EUR1,856,277 increase over last year, primarily driven by substantial investments in the development of the AX ODYCY Hotel and Lido in Qawra as well as the newly opened Verdala Wellness Hotel in Rabat.
The Group achieved a significant improvement in profitability, reporting an operating profit of EUR24,723,319 in 2025, more than doubling the EUR11,477,584 recorded in 2024. This strong performance reflects the successful execution of the Group’s strategic initiatives, including robust revenue growth across all divisions, as well as the planned contribution from property sales.
Finance costs increased by EUR1,473,032 over the previous year reflecting the interest on the bank loan obtained for the Verdala development which was being capitalised in the prior year.
The Group’s profit before taxation for the year amounted to EUR16,857,617 (2024: EUR5,812,014).
Other comprehensive income amounted to EUR6,914,379 in 2025, compared to EUR5,753,886 in the prior year. This increase primarily reflects gains on property revaluations, net of deferred tax, driven largely by the Qawra properties. The uplift in valuations is attributable to the strong and improving performance of the AX ODYCY Hotel and Lido.
As at year-end, the AX Group’s equity stood at EUR272,489,211 (2024: EUR248,829,558).
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
4
Directors’ Report – continued
Performance Review - continued
Financial Key Performance Indicators
*The Group measures Adjusted Earnings before Interest, Tax, Depreciation and Amortisation (“Adjusted EBITDA”) as operating profit after adjusting for gain/(loss) on revaluation of investment properties, movement in fair value of financial asset, (loss)/gain on disposal of financial asset and depreciation. This key performance indictor is not defined by International Financial Reporting Standards but can be directly calculated with reference to the Statement of Profit or Loss.
Going Concern
Having made an appropriate assessment of going concern as discussed in Note 2.1 to these financial statements, the Directors, at the time of approving these financial statements, have determined that there is reasonable expectation that the Group and the Company have adequate resources to continue operating for the foreseeable future. For this reason, these financial statements have been prepared on a going concern basis which assumes that the Group and the Company will continue in operational existence for the foreseeable future and will meet their financial obligations as and when they fall due.
Principal Risks and Uncertainties
The Company is exposed to risks inherent to its operation, with the main risks summarized as follows:
1.Strategy risk
Risk management falls under the responsibility of the Board of Directors (“the Board”). The Board is continuously analysing its risk management strategy to ensure that risk is adequately identified and managed. The Audit Committee regularly reviews the risk profile adopted by the Board.
2.Operational risks
The Company’s revenue is mainly derived from dividend income, interest charges and rental income charged to related parties and hence the Company is heavily dependent on the performance of the AX Group. The Company regularly reviews the financial performance of the AX Group of companies to ensure that there is sufficient liquidity to sustain its operations.
3.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.
Financial Risk Management and Exposures
Note 34 to the financial statements provides a detailed analysis of the financial risk to which the Group and the Company are exposed.
Group
Company
2025
2024
2025
2024
EUR
EUR
EUR
EUR
Revenue and other operating income
131,130,355
83,550,472
9,416,153
13,576,106
Adjusted EBITDA*
35,823,179
24,033,119
3,328,415
8,131,683
Operating profit
24,723,319
11,477,584
2,514,638
9,406,580
Net finance costs
(9,402,237)
(7,770,523)
(606,571)
(745,317)
Profit after tax
17,385,475
5,067,350
3,595,957
9,642,214
Earnings per share
13.22
3.82
-
-
Total equity and liabilities
529,386,806
513,112,469
205,546,346
196,602,536
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
5
Directors’ Report – continued
Dividends and Reserves
During the year, AX Real Estate p.l.c., a subsidiary of the Company, declared dividends amounting to EUR640,201 due to non-controlling interest. The Directors intend to distribute a further gross dividend amounting to EUR629,347, equivalent to EUR0.02586 per ordinary share due to non-controlling interest.
Events After the Reporting Period
The Group has undergone a shareholding restructuring process. As part of this process, as at 17 November 2025, the existing shareholders of the Company transferred their shareholdings to a newly incorporated limited liability company, ARCD Holding Limited, registered in Malta. Subsequently, on 5 December 2025, ARCD Holding Limited transferred all of its shareholding in AX Group p.l.c. to AX Ventures Limited, another newly incorporated limited liability company registered in Malta, which has become the new immediate parent company of AX Group p.l.c. The ultimate beneficial ownership remains unchanged, as the same shareholders continue to hold their interests above the new intermediate holding company.
Directors
In accordance with the Company’s Articles of Association, the present Directors remain in office.
Auditors
Ernst & Young Malta Limited have expressed their willingness to continue in office and a resolution for their re-appointment will be proposed at the Annual General Meeting.
STATEMENT ON NON-FINANCIAL INFORMATION
Basis of Preparation
In line with Directive 2014/95/EU and pursuant to Article 177 of the Companies Act, Cap. 386 of the Laws of Malta, and in terms of the Sixth Schedule to the Act, the Directors hereby report on the impact of the Group’s activities on environmental, social and employee matters, respect for human rights, and anti-corruption and bribery matters. The reporting scope corresponds to that used in the financial statements.
This non-financial statement, presented as the Group’s Sustainability Report, has been prepared in alignment with the “Guidelines on non-financial reporting (methodology for reporting non-financial information)” (2017/C 215/01). The statement is structured in a way to focus on topics that have been deemed material by the Group. These include Climate Change, Water and Marine Resources, Resource Use and Circular Economy and Own Workforce.
Our Business Model
Founded in 1975 by Chairman Angelo Xuereb, AX Group started as a civil engineering firm and has since evolved into one of Malta’s leading diversified organisations operating across four key sectors: Hospitality, Care, Construction and Real Estate and Development. AX Group’s diversified ecosystem enables it to serve a broad range of customers and stakeholders while contributing to sustainable value creation for the communities in which it operates.
The Hospitality division, consisting of nine licensed accommodation establishments, is the Group’s primary source of revenue. In August 2025, the Group launched its latest project, The Verdala Wellness Hotel, offering Malta’s first dedicated wellness hotel. Significant progress was made toward obtaining GSTC certification for several of its hotels, reinforcing the Group’s commitment to internationally recognised standard.
Complementing the Group’s Hospitality operations is AX Construction, which delivers a diverse portfolio of services ranging from civil engineering, structural works and finishing, restoration and heritage projects. Throughout the reporting period, the Group worked on several landmark projects including restoration works at the Jesuit’s Church in Valletta, civil and finishing works for the new Schengen Arrivals Extension at Malta International Airport, and the extension and restoration of the St. John’s Co-Cathedral.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
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Directors’ Report – continued
STATEMENT ON NON-FINANCIAL INFORMATION – continued
Our Business Model - continued
The Care sector provides accommodation, assisted living, and other care services to the retiring and elderly community through Hilltop Gardens Retirement Village and Simblija Care Home, based in Naxxar. The Revive Physiotherapy and Aquatic Centre, based within the same complex, offers holistic care to residents and third parties, collectively offering a comprehensive set of care facilities for residents and visitors alike.
Through strategic investments, the Development division identifies opportunities to invest in and develop residential, commercial, and mixed-use property projects. The Real Estate and Development division manages a portfolio of properties aimed at generating stable rental income. In addition, the Group holds equity investments in Valletta Cruise Port p.l.c., a port operations company and Imselliet Solar Limited, which operates solar farms.
Environmental Matters
Climate Change
The Group’s operational scale and reliance on energy, goods and services result in a carbon footprint that underscores Climate Change as a material topic for the organisation. Over the reporting period, notable progress has been made in energy and carbon emissions quantification, as a first step towards a better understanding of footprint and its optimisation, as well as several actions which have been implemented across its operations.
Energy
During the reporting period, AX Group consumed 13,530 MWh of electricity, the majority (~86%) of which was consumed by the Group’s Hospitality operations. Given the scale of electricity use, the Group closely monitors its consumption through multiple channels, primarily through utility bills. Several projects were carried out during the reporting period related to energy efficiency, such as the upgrading of lighting in kitchens, balconies and corridors at the Sliema properties saving 27 MWh and 9.62 tCO ₂ eq per year.
Description
Value
Total Electrical Energy Consumed by AX Group
13,530 MWh/MVAh
Total Renewable Energy generated by AX Group 1
2,996 MWh
Total Energy Generated from of fossil fuels
24,188 GJ
1 AX Group owns 33% of the Imselliet and Hilltop plants, and 100% of Skyline plant.
Carbon Footprint
During the reporting period, the Group advanced the quantification of its carbon footprint in line with the Greenhouse Gas (GHG) Protocol. As data quality improves, the Group will be better positioned to assess potential approaches for future carbon-related planning. At this stage, no formal carbon-reduction targets have been set.
Scope
Category
Emissions (tCO 2 eq)
1
Combustion Emissions
1,735
2
Electricity Consumption
5,262
3.1
Operational Goods and Services
24,200
3.2
Capital Goods and Services
7,500
3.3
Fuel and Energy Related Activities
447
3.5
Waste Generated in Operations
423
3.7
Employee Commuting
795
3.13
Downstream Leased Assets
446
3.15
Investments
653
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
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Directors’ Report – continued
STATEMENT ON NON-FINANCIAL INFORMATION – continued
Environmental Matters - continued
Climate Change - continued
Carbon Footprint – continued
Despite significant progress in quantifying emissions, gaps in data quality and availability persist, compromising the quality and scope of carbon emission calculations. Most Scope 3 emissions shown above, which depend on the value chain and a number of third parties, are provided as indicative figures, rather than precise calculations. Such limitations are due to the lack of supplier‑specific disclosures, and the reliance on industry average data rather than supplier specific ones. To address these constraints, the Group is strengthening asset‑level registers and metering, enhancing supplier engagement to obtain product‑level footprints, and automating data‑collection processes, steps that will improve completeness and accuracy and enable a more reliable understanding of the Group’s carbon footprint to inform future target‑planning.
Water Consumption
In a similar manner to energy, the Group’s extensive operations, particularly within the Hospitality division, result in a significant volume of water consumption.
Source / Destination
Volume
Mains Supplied Water (WSC)
140,000m 3
Other sources - Bowser / Seawater Desalination
13,000m 3
The Group has already implemented several concrete measures to improve water efficiency across its operations. As part of ongoing efforts to obtain and maintain sustainability certifications, the Group’s hotels have introduced initiatives such as linen re-use programmes, with estimated water savings of around 1,200m³ of water and 1,575kg of detergent per annum. Similarly, AX Care operations have undertaken improvements to their water efficiency, particularly by using 4675m 3 of second-class water in the laundry machines.
Circular Economy
As highlighted in earlier sections, waste has been identified as a material topic for the Group. Throughout 2025, the Group continued to strengthen its waste reporting and management processes. While progress has been made, certain data gaps and quality constraints remain. To further improve data integrity, the Group is evaluating the introduction of better weighing systems aimed at reducing measurement errors and manual handling of such data while enhancing transparency of our impacts.
Waste Category
Estimated Weight (Tonnes)
Construction Waste
2,966
Mixed Waste (including Municipal waste)
794
Organic Waste
570
Mixed Recyclables (including Glass)
335
Oil / Grease Waste
14
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
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Directors’ Report – continued
STATEMENT ON NON-FINANCIAL INFORMATION – continued
Environmental Matters - continued
Circular Economy - continued
During the current year, in its Sliema Hotels, the Group replaced single use laundry bags with durable alternatives, avoiding approximately 9,600 bags annually; switched to electric chafing dishes, eliminating around 23,500 alcohol fuel cans (~2 tonnes of metal) and reducing fuel and disposal costs.
Group Environmental Policies
During the current year, the Group upheld its ECO agenda, which was introduced a few years ago, to encourage more sustainable behaviours across its entities. While no formal monitoring is yet in place, managers rely on anecdotal evidence to assess whether our efforts are contributing to a reduction in the Group’s environmental impact. Simultaneously, significant work was also carried out on the Group’s Sustainability Policy with the aim of being launched in the next financial year.
Employee Matters
During the current year, the Group carried out an extensive review of its policies, to streamline processes across the Group’s operations. This work, coordinated by the HR department, is an ongoing process and aims to harmonise previously fragmented policies into core employee-related policy clusters, consolidating guidance on recruitment, employment terms, workplace behaviour, employee welfare, performance management and operational procedures.
Our Workforce
AX Group’s workforce is made up of circa 1,300 employees, originating from 73 countries. Approximately 80% of the workforce are foreign nationals. The Hospitality division employs the largest share (65%) of the Group’s employees, followed by the Construction division. Most of the employees (77%) are directly employed with the Group while the remaining 23% are sub-contracted through employment agencies. 0.15% of the Group’s employees are registered with the Commission for Rights of Persons with Disability. In terms of age distribution, around 61% of employees are between 30 and 50 years old and the average employee age is 36 years old. During the year, two males and two females made use of parental leave, while 625 employees took a total of 29,700 hours of sick leave.
Staff Wellbeing
It is the Group’s priority to ensure the wellbeing of its staff. Beyond providing safe and secure working conditions, the Group prides itself in providing a positive and healthy environment for its employees. Beyond providing fair wages and working conditions, the Group offers flexible working arrangements aimed at improving employees’ work-life balance. The Company does not tolerate any form of bullying, harassment or unfair treatment.
Excellence of employees is celebrated through the annual AX Awards, performance bonuses and gifts to celebrate key employee milestones. Team-building events, recreational activities, and commemorative gatherings are organised regularly for all employees with the aim of fostering collaboration and boosting morale. The Group offers several benefits to its staff including health insurance for employees with subsidies for dependants, complimentary mental wellness sessions, free and subsidised gym memberships, discounts on AX Hotels products and services and various affiliated outlets and partner organisations.
Staff Training and Development
During the current year, employees completed 26,900 hours of training, averaging 20 hours of training per person. Through the close collaboration with the HR teams across the Group operations, skill gaps are identified and training pathways are designed for all operations to ensure consistent, high-quality staff development.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
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Directors’ Report – continued
STATEMENT ON NON-FINANCIAL INFORMATION – continued
Employee Matters – continued
Staff Training and Development – continued
The AX Academy, launched in mid-2025 is the Group’s cornerstone for continuous learning and equal opportunities, structured across three levels: CORE (foundational training, compulsory Health and Safety, values and culture), PRO (industry specific and professional skills across employment law, digital marketing, tech/finance, construction trades and machinery, and care practices), and ADVANCE (leadership development, team leadership, change management, strategic thinking, emotional intelligence and advanced digital/AI). Delivery blends external training partners with internal subject matter experts; to uphold quality, internal trainers receive accredited certification in instructional techniques.
Health, Safety and Workplace Incidents
The Group prides itself in taking a proactive approach to safeguarding employee well-being and maintaining a safe working environment. As a result, during the current year, no serious incidents or injuries were recorded. Health and Safety measures are coordinated across the Group by the respective operations and include mandatory Health and Safety training for all staff, with specialised modules for high-risk roles, regular drills and Health and Safety Policy updates and internal inspection and compliance checks.
Despite the numerous measures and efforts made to avoid injuries, the nature of the Group’s operations still exposes workers to residual risks. The Group has developed a comprehensive Incident Reporting System over the years to monitor and analyse workplace incidents across its operations. Whenever an incident involving staff occurs, both the Occupational Health and Safety Authority (“OHSA”) and the respective insurance providers are promptly notified. In cases when OHSA conducts on-site inspections, the Group ensures full cooperation and compliance with any requests for further investigation. Beyond regulatory compliance, the Group is committed to learning from each incident and implementing practical measures to reduce the likelihood of recurrence.
In addition, given the inherent health and safety risks associated with the construction industry, the Group’s executive team introduced a monitoring tool to continuously track health and safety performance across its construction sites. Prepared by an independent health and safety officer, the tool provides regular insights into site conditions and performance, enabling management to take timely and appropriate action whenever required.
Employee Feedback
In 2025, AX Group undertook a comprehensive Employee Engagement Survey to gain a clear, data-driven understanding of engagement levels, workplace culture and the overall employee experience. Beyond diagnosing organisational challenges, the survey served as a meaningful way to show employees that their voices matter, offering a safe and anonymous platform for honest feedback and reinforcing a culture of appreciation and transparency. It also allowed to explore how employees perceive leadership, communication, support, recognition, wellbeing and overall working conditions, helping the organisation identify what is strengthening or undermining engagement across units.
Ultimately, the survey’s purpose was to guide targeted actions that build a more connected, supportive and people centred workplace. The 2025 Employee Engagement Survey was delivered through a structured collaboration between AX Group and an external specialist partner, who designed, administered and analysed the survey to ensure full confidentiality and methodological integrity. The external partner developed multilingual online and printed tools, while AX supported accessibility, communications and participation across all business units. This rigorous and inclusive approach resulted in an 82% participation rate and provided robust insights into guiding AX Group’s People Strategy.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
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Directors’ Report – continued
STATEMENT ON NON-FINANCIAL INFORMATION – continued
Social Matters
The Group plays an active role in supporting both local and national communities. Through a range of outreach programs, Corporate Social Responsibility (“CSR”) initiatives and other engagement efforts, the Group places strong emphasis on fostering positive relationships with its stakeholders and contributing to societal wellbeing.
Affected Communities
Community Initiatives
Throughout the year, the Group gave priority to reaching out to communities and helping wherever possible, through fundraising, donations, CSR activities and collaborations with voluntary organisations. Some of the main community initiatives from the current year include the following:
•Supported the restoration of Palazzo San Paolo’s historic façade in Rabat, preserving Malta’s architectural heritage
•Donated women’s items and clothing to Dar Merħba Bik
•Donated items to the YMCA Charity Shop and AAA pet sanctuary
•Supported the Island Sanctuary through volunteer efforts and a financial donation
•Organised a tree planting and watering activity in collaboration with Coast is Clear
•Volunteered at the Soup Kitchen in Valletta
•Volunteered at the Wardija School
•Curated visits for various students (primary/secondary/post-secondary/tertiary) at AX Group operations.
AX Foundation
In 2025, the AX Foundation continued its mission to promote inclusion and support individuals with invisible disabilities through a series of impactful initiatives. We organized specialist training sessions and a national conference to help employers and professionals adopt best practices for employing neurodivergent individuals. Beyond awareness, the Foundation funded calming and therapeutic spaces in schools and supported projects that provide consistent psychotherapy for children in residential care.
Celebrating resilience remained a priority, with the AX Ability Award recognizing individuals who have overcome invisible challenges and contributed to advancing disability rights. Through the AX Staff Solidarity Fund, we provided over EUR42,000 in assistance to employees and their families during times of serious health or financial hardship.
Our efforts were sustained through fundraising initiatives such as hotel room and food and beverage donation schemes, community events such as the AX Group Football Tournament, and employee contributions matched by AX Group. These initiatives collectively raised tens of thousands of euros, ensuring the sustainability of both the General Fund and the Staff Solidarity Fund.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
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Directors’ Report – continued
STATEMENT ON NON-FINANCIAL INFORMATION – continued
Governance Matters
Business Conduct
Leadership
The Executive Management Team (“EMT”) is comprised of 6 females and 5 males, while the Board of Directors is composed of 2 females and 6 males. All members of these bodies are Maltese nationals. The Group’s leadership has zero tolerance towards bribery and corruption, reflected in the Group’s policies and Code of Ethics. As a result, during the reporting period, no instances of bribery or corruption were identified or recorded.
Upholding Good Governance and Ethical Standards
A cornerstone of the Group’s governance framework is the Employee Code of Conduct, which outlines the principles for effective, ethical and positive behaviour across the Group. This code ensures that all employees uphold the highest standards of integrity and professionalism, reinforcing our commitment to responsible and ethical business practices. The Group’s internal auditor, who reports regularly to the Audit Committee, supports this function and ensures that all our internal controls are adhered to.
Governance of ESG Matters
The Group’s ESG governance operates across complementary tiers to ensure clear accountability and strategic alignment. At the operational level, top management including any supporting operation-level committees oversee day‑to‑day ESG responsibilities, including progress toward certification (e.g. GSTC in hotels), delivery of sustainability targets and implementation of initiatives.
The Group’s Sustainability Office serves as the central coordination point for legally mandated ESG disclosures, and supports the development of Group‑wide sustainability initiatives. Oversight of the Sustainability Office rests with the Managing Director of Finance & Administration, a member of the EMT, ensuring that ESG developments and risks are communicated at the highest level. During the reporting period, the Sustainability Office’s capacity was increased through the recruitment of a full-time ESG Analyst.
The Group’s ESG Committee, coordinated by the Sustainability Office and composed of cross‑functional representatives from all divisions, provides a strategic forum to review best practices, engage stakeholders, assess performance and recommend policies that drive long‑term sustainable value creation.
As a founding and active member of the Malta ESG Alliance (“MESGA”), the Group contributed to raising awareness and driving positive change across the corporate landscape through this collaborative platform.
IT Governance
During this year, the IT Department continued to strengthen AX Group’s technological capabilities through a series of strategic initiatives. The Infrastructure Team enhanced cybersecurity by upgrading firewalls and commenced the migration of user accounts to secure cloud locations, delivering improved identity management and secure, flexible access while reducing reliance on physical infrastructure.
The Business Transformation Team maintained its focus on monitoring and optimising processes to drive operational efficiency, streamline workflows and promote digital-first practices throughout the Group. The IT Support Team consolidated previously separate operations into a unified structure, improving responsiveness and service quality while encouraging teamwork and enhancing digital skills among employees.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
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Directors’ Report – continued
STATEMENT ON NON-FINANCIAL INFORMATION – continued
Governance Matters – continued
IT Governance – continued
In addition, the newly established Data and Analytics Team began planning for a centralised Data Warehouse and the introduction of robust data governance frameworks, enabling more effective use of information, supporting informed decision-making and ensuring compliance with data standards.
Furthermore, AX Group formed an AI Task Force, bringing together members from across the organisation to identify, develop and implement AI-driven projects. This initiative aims to leverage artificial intelligence to enhance operational efficiency, improve customer experiences and unlock new opportunities for innovation across all business units.
Collectively, these initiatives have reinforced security, enhanced efficiency and laid the foundation for data-driven and AI-enabled growth, aligning with AX Group’s long-term strategic objectives.
EU Taxonomy Disclosure
In accordance with Article 8 of the EU Taxonomy Regulation and Article 10(2) of the Disclosures Delegated Act (Commission Delegated Regulation (EU) 2021/2178), AX Group is required to disclose information about how and to what extent the Group’s activities qualify as environmentally sustainable. Furthermore, the regulation requires the disclosure of Key Performance Indicators (“KPIs”), namely, the proportion of revenue (“Turnover”), capital expenditures (“CapEx”) and operating expenditure (“OpEx”) which are considered as eligible and/or aligned in terms of the EU Taxonomy. The Group also discloses qualitative information (according to Section 1.2 of Annex I of the Disclosures Delegated Act).
For financial year 2025, reporting undertakings are permitted to continue applying the EU Taxonomy reporting rules in place prior to the amendments introduced by the revised EU Taxonomy Delegated Act. In line with this option, AX Group p.l.c. has elected to apply the non‑amended reporting framework applicable until 31 December 2025, applying those rules in full in accordance with the “all‑or‑nothing” principle. This disclosure is provided for transparency purposes and reflects the clarification issued by the European Commission in its published FAQ (QANDA/25/1726, point 11), which confirms that undertakings choosing not to apply the revised Delegated Act for FY2025 must specify within their sustainability‑related contextual information which set of reporting rules they have applied.
The EU Taxonomy is supplemented by delegated acts which establish ‘technical screening criteria’. These criteria define the specific requirements and thresholds for an activity to be considered as “significantly contributing” to a sustainability objective and “does not significantly harm” the other objectives.
Regulation Reference
Regulation Name
2021/2178
Disclosures Delegated Act (DDA)
2021/2139
Climate Delegated Act (CDA)
2022/1214
Complementary Climate Delegated Act (CCDA)
2023/2485
Amended Climate Delegated Act (ACDA)
2023/2486
Environmental Delegated Act (EDA)
2026/73
Delegated Act amending the DDA, CDA and EDA
Identifying Eligible Activities
To identify business activities that may be in scope of the Regulation, the Group relied on the EU Taxonomy package including the delegated acts referred to above. The eligibility assessment was carried out using a combination of granular data on the Group’s activities, assets, and financial information, complemented by a review of officially assigned NACE codes for its subsidiaries. Initially, economic activities were classified as eligible or non-eligible based on their correspondence with the NACE codes referenced in the delegated acts discussed above.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
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EU Taxonomy Disclosure – continued
Identifying Eligible Activities – continued
The main assumptions applied during this assessment is the adequacy and relevance of the NACE classification system in capturing all pertinent economic activities, as well as its alignment with current business practices. Following this thorough review, the following taxonomy-eligible economic activities were identified for the financial year ending 31 October 2025:
NACE Code
Economic Activity
CDA Ref.
EDA Ref.
Objective
F41
Construction
7.1
3.1
CCM, CCA, CE
L68
Real Estate & Development
7.7
CCM, CCA
Q87
Residential Care Activities
12.1
CCA
I55
Hotels and Similar Accommodation
2.1
BIO
The Group determined that none of its eligible economic activities qualify as ‘enabling’ or ‘transitional’ under the EU Taxonomy. Furthermore, in compliance with Article 8 of the Disclosures Delegated Act (as amended), disclosures were prepared regarding Taxonomy-aligned, eligible, and non-eligible economic activities, excluding those referenced in Sections 4.26–4.31 of Annexes I and II to the Climate Delegated Act, as these did not apply to the Group’s operations.
Additionally, while the EU Taxonomy allows the inclusion of certain OpEx and CapEx related to eligible or aligned activities in KPI calculations, no such expenditures were recorded as of 31 October 2025. Financial data was utilized to calculate relevant KPIs, as outlined in the Key Performance Indicators.
Determination of Alignment
Following the identification of eligible economic activities, the Group assessed these for “Taxonomy Alignment” through a sequential process, where each step is contingent on the successful completion of the previous one. The process comprised the:
1.Assessment of Substantial Contribution to the Taxonomy’s environmental objectives, based on the Technical Screening Criteria (“TSC”) set out in the delegated acts,
2.Confirmation of “Do No Significant Harm” (“DNSH”) compliance,
3.Confirmation of adherence to Minimum Social Safeguards,
4.Calculation of KPIs reflecting the proportion of aligned versus non-aligned eligible activities across turnover, CapEx and OpEx.
It was determined that none of the Group’s activities met the Technical Screening Criteria for substantial contribution (Step 1). Under the Taxonomy framework, all criteria must be satisfied for an activity to be considered aligned. Failure to meet any one condition results in non-alignment. Consequently, for the current reporting year, Taxonomy-aligned activities accounted for 0% of turnover, CapEx and OpEx.
This outcome highlights the significant gap between eligibility and alignment, reflecting the more stringent requirements for alignment. The Group remains committed to addressing these gaps by implementing processes to capture the necessary data in line with the Climate and Environmental Delegated Acts.
Key Performance Indicators
The Group’s Taxonomy disclosures have been prepared in accordance with the Disclosures Delegated Act, as amended by Annex II of the Environmental Delegated Act, and are based on the same consolidation principles applied in the Group’s financial reporting under IFRS to ensure comparability. KPIs are presented at Group level and reflect the consolidated financial results.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
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EU Taxonomy Disclosure – continued
Key Performance Indicators – continued
The evaluation of eligibility and calculation of KPIs for Taxonomy reporting was performed through a structured approach:
1.Determining denominators for the three required KPIs (Turnover, CapEx and OpEx) by extracting consolidated figures from the Group’s financial reporting system (as defined in Section 1.1.1.2.1 of the Disclosures Delegated Act (2021/2178)).
2.Calculating numerators for all identified eligible sub-activities within the Group, based on revenues, capital expenditures and operating expenses linked to Taxonomy-eligible activities (as defined in Section 1.1.1.2.2 of the Disclosures Delegated Act (2021/2178)).
Disclosure Approach
The information regarding eligibility and alignment is presented in the format required by the Disclosures Delegated Act, as amended by Annex II of the Environmental Delegated Act. Since none of the Group’s eligible activities met all alignment criteria, the quantitative tables focus exclusively on eligibility. Activities have been classified as follows:
•EL: Taxonomy-eligible for the relevant objective
•N/EL: Taxonomy-non-eligible for the relevant objective
All economic activities have been considered, as materiality does not apply under the Delegated Act. Where an activity contributes substantially to more than one environmental objective, the higher percentage is reported to avoid double counting. Eligible and non-eligible activities aggregate to 100%.
Based on the above considerations and methodology, the tables below show the actual KPIs related to the EU Taxonomy, including comparatives.
KPIs
Turnover
CapEx
OpEx
Financial Year
2025
2024
2025
2024
2025
2024
Taxonomy Eligible – Aligned
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Taxonomy Eligible – Not Aligned
99.3%
99.0%
91.6%
99.5%
93.4%
90.6%
Non-Eligible
0.7%
1.0%
8.4%
0.5%
6.6%
9.4%
TOTAL
100%
100%
100%
100%
100%
100%
The KPIs are based on the following figures:
KPIs
Turnover
CapEx
OpEx
Financial Year
2025
2024
2025
2024
2025
2024
EUR
EUR
EUR
EUR
EUR
EUR
Taxonomy Eligible – Aligned
-
-
-
-
-
-
Taxonomy Eligible – Not Aligned
130,007,365
82,471,971
34,561,945
41,893,320
89,054,805
53,935,273
Non-Eligible
902,516
871,635
3,157,363
222,760
6,252,371
5,582,080
TOTAL
130,909,881
83,343,606
37,719,308
42,116,080
95,307,176
59,517,353
For the financial year-ended 31 October 2025, the Group’s taxonomy-eligible activities remained comparable to the previous year.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
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EU Taxonomy Disclosure – continued
Key Performance Indicators – continued
In terms of the Disclosures Delegated Act, the above information shall be presented in the following format:
(1)Turnover KPIs
Substantial Contribution Criteria
DNSH Criteria
Economic Activities
Code
Absolute Turnover
Proportion of Turnover
2025
Climate Change Mitigation
Climate Change Adaptation
Water and mineral resources
Circular Economy
Pollution
Biodiversity and Ecosystems
Climate Change Mitigation
Climate Change Adaptation
Water and mineral resources
Circular Economy
Pollution
Biodiversity and Ecosystems
Minimum Safeguards
Proportion of Taxonomy Aligned /Eligible Turnover 2024
Category
Enabling / Transitional Activity
(E/T)
EUR
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
A. TAXONOMY ELIGIBLE ACTIVITIES
A.1. Taxonomy-aligned
Turnover of A.1
-
0%
0%
0%
0%
0%
0%
0%
0%
A.2 Taxonomy-Eligible but not Taxonomy-Aligned
Construction
CCM7.1
CCA7.1 CE3.1
17,155,240
13.1%
EL
EL
N/EL
EL
N/EL
N/EL
13.9%
Real Estate and Development
CCM7.7
CCA7.7
36,062,400
27.6%
EL
EL
N/EL
N/EL
N/EL
N/EL
2.9%
Other Residential Care Activities
CCA12.1
7,775,755
5.9%
N/EL
EL
N/EL
N/EL
N/EL
N/EL
8.6%
Hotels and Similar Accommodation
BIO2.1
69,013,970
52.7%
N/EL
N/EL
N/EL
N/EL
N/EL
EL
73.6%
Turnover of A.2
130,007,365
99.3%
99.0%
Total (A) = (A.1 + A.2)
130,007,365
99.3%
99.0%
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy Non-Eligible Activities
902,516
0.7%
1.0%
TOTAL TURNOVER (A+B)
130,909,881
100.0%
100%
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
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STATEMENT ON NON-FINANCIAL INFORMATION - continued
EU Taxonomy Disclosure – continued
Key Performance Indicators – continued
(2)CapEx KPIs
Substantial Contribution Criteria
DNSH Criteria
Economic Activities
Code
Absolute CAPEX
Proportion of CAPEX
2025
Climate Change Mitigation
Climate Change Adaptation
Water and mineral resources
Circular Economy
Pollution
Biodiversity and Ecosystems
Climate Change Mitigation
Climate Change Adaptation
Water and mineral resources
Circular Economy
Pollution
Biodiversity and Ecosystems
Minimum Safeguards
Proportion of Taxonomy Aligned /Eligible CAPEX 2024
Category
Enabling / Transitional Activity
(E/T)
EUR
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
A. TAXONOMY ELIGIBLE ACTIVITIES
A.1. Taxonomy-aligned
CAPEX of A.1
-
0%
0%
0%
0%
0%
0%
0%
0%
A.2 Taxonomy-Eligible but not Taxonomy-Aligned
Construction
CCM7.1
CCA7.1 CE3.1
231,963
0.6%
EL
EL
N/EL
EL
N/EL
N/EL
0.6%
Real Estate and Development
CCM7.7
CCA7.7
28,401,901
75.3%
EL
EL
N/EL
N/EL
N/EL
N/EL
89.5%
Other Residential Care Activities
CCA12.1
177,705
0.5%
N/EL
EL
N/EL
N/EL
N/EL
N/EL
0.4%
Hotels and Similar Accommodation
BIO2.1
5,750,376
15.2%
N/EL
N/EL
N/EL
N/EL
N/EL
EL
9.0%
CAPEX of A.2
34,561,945
91.6%
99.5%
Total (A) = (A.1 + A.2)
34,561,945
91.6%
99.5%
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy Non-Eligible Activities
3,157,363
8.4%
0.5%
TOTAL CAPEX (A+B)
37,719,308
100.0%
100%
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
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Directors’ Report – continued
STATEMENT ON NON-FINANCIAL INFORMATION - continued
EU Taxonomy Disclosure – continued
Key Performance Indicators – continued
(3)OpEx KPIs
Substantial Contribution Criteria
DNSH Criteria
Economic Activities
Code
Absolute CAPEX
Proportion of CAPEX
2025
Climate Change Mitigation
Climate Change Adaptation
Water and mineral resources
Circular Economy
Pollution
Biodiversity and Ecosystems
Climate Change Mitigation
Climate Change Adaptation
Water and mineral resources
Circular Economy
Pollution
Biodiversity and Ecosystems
Minimum Safeguards
Proportion of Taxonomy Aligned /Eligible OPEX 2024
Category
Enabling / Transitional Activity
(E/T)
EUR
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
A. TAXONOMY ELIGIBLE ACTIVITIES
A.1. Taxonomy-aligned
OPEX of A.1
-
0%
0%
0%
0%
0%
0%
0%
0%
A.2 Taxonomy-Eligible but not Taxonomy-Aligned
Construction
CCM7.1
CCA7.1 CE3.1
16,151,823
16.9%
EL
EL
N/EL
EL
N/EL
N/EL
15.9%
Real Estate and Development
CCM7.7
CCA7.7
26,336,771
27.6%
EL
EL
N/EL
N/EL
N/EL
N/EL
2.8%
Other Residential Care Activities
CCA12.1
5,792,807
6.1%
N/EL
EL
N/EL
N/EL
N/EL
N/EL
9.5%
Hotels and Similar Accommodation
BIO2.1
40,773,404
42.8%
N/EL
N/EL
N/EL
N/EL
N/EL
EL
62.5%
OPEX of A.2
89,054,805
93.4%
90.6%
Total (A) = (A.1 + A.2)
89,054,805
93.4%
90.6%
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
B. OpEx of Taxonomy Non-Eligible Activities
6,252,371
6.6%
9.4%
TOTAL OPEX (A+B)
95,307,176
100.0%
100.0%
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
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Directors’ Report – continued
STATEMENT ON NON-FINANCIAL INFORMATION – continued
EU Taxonomy Disclosure – continued
Reconciliation
The Group’s consolidated net turnover captured in the denominator of the KPI amounting to EUR130,909,881 (2024: EUR83,343,606) reconciles with the amount disclosed in the ‘Revenue’ financial statement line item included in the ‘Statements of Profit or Loss and Other Comprehensive Income’ in the consolidated financial statements included in this annual report.
The Group’s total CapEx captured in the denominator of the KPI can be reconciled to the consolidated financial statements of the Group included in this annual report, by reference to the respective disclosures capturing the additions for property, plant and equipment, investment property and inventories.
Capex Reconciliation
2025
2024
Note
EUR
EUR
CapEx per KPI denominator
37,719,308
42,116,079
Additions as per consolidated financial statements relating to:
Property, plant and equipment
15
20,592,358
22,757,034
Investment properties
16
2,980,898
2,101,426
Inventories relating to Verdala terraces*
14,146,052
17,257,619
37,719,308
42,116,079
*The figure presented pertains to the additions made to the Verdala Terraces project during the current year. This amount is included within Inventories (Note 21) in the consolidated financial statements. Furthermore, it also includes the transfer from inventory to property, plant and equipment and the transfer from inventory to investment properties, as illustrated in both the Property, Plant, and Equipment (Note 15) and Investment Properties (Note 16) sections of the consolidated financial statements.
The Group’s consolidated OpEx captured in the denominator of the KPI of EUR95,307,176 (2024: EUR59,517,353) reconciles with the summation of the amounts disclosed in the ‘Operating costs’ and ‘Staff costs’ financial statement line items included in the ‘Statements of Profit or Loss and Other Comprehensive Income’ in the consolidated financial statements included in this annual report.
Signed on behalf of the Board of Directors on 20 February 2026 by Mr Angelo Xuereb and Mr Michael Warrington as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Financial Report 2025.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
19
Statement of Directors’ Responsibilities
The Directors are required by the Companies Act, Cap. 386 of the Laws of Malta 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 Group and the Company at the end of each financial year and of the profit or loss of the Group and the Company for the year then ended. In preparing the financial statements, the Directors should:
-adopt the going concern basis unless it is inappropriate to presume that the Group and the Company will continue in business;
-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 the accruals basis;
-value separately the components of asset and liability items; and
-report comparative figures corresponding to those of the preceding accounting period.
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, Cap. 386 of the Laws of Malta. 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 Group and the Company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
20
Corporate Governance – Statement of Compliance
Pursuant to Capital Market Rule 5.97 issued by the Malta Financial Services Authority, the Company is hereby reporting on the extent of its adoption of “the Code of Principles of Good Corporate Governance” (the “Code”) previously established by the Malta Stock Exchange. The Board has reviewed its Corporate Governance practices and an explanation of how the Principles of Good Governance have been applied is contained in this report.
The Company acts as the ultimate holding company to the AX Group of companies and does not itself carry on any trading activities other than for the purpose of funding the Group as and when the demands of its business so requires, and accordingly is economically dependent on the subsidiaries.
Compliance
Although the adoption of the Code is not mandatory, the Board has considered the principles embodied in the Code and has noted the Code’s recommended practices aimed towards the fulfilment of these same principles. The Board has also taken into account the nature of the Company’s structure, business activities and operations and in the light of such considerations it has formulated the view that the Company was generally in compliance with the Code throughout the period.
The Board
The Board of Directors of AX Group p.l.c. (the “Board”) is currently made up of eight Directors, four of whom are independent from the Company or any related Group Company. Pursuant to generally accepted practices, as well as the Company’s Articles of Association, the appointment of Directors to the Board is reserved exclusively to the Company’s shareholders.
The present Directors are Mr Angelo Xuereb, Ms Denise Xuereb, Ms Claire Xuereb, Mr Tonio Fenech, Mr Josef Formosa Gauci, Mr Christopher Paris, Mr John Soler and Mr Michael Warrington. Messrs Fenech, Formosa Gauci, Paris and Soler are independent Non-Executive Directors.
In the opinion of the Board, the independent Non-Executive Directors are free from significant business, family or other relationship with the Group, its shareholders or its management, that would create a conflict of interest such as to impair their judgement.
Mr Angelo Xuereb has been appointed as Chairman of the Board and Mr Michael Warrington as the Chief Executive Officer and Deputy Chairman of the Company. Mr Kenneth Abela has resigned from his post of Chief Executive Officer Designate in September 2025.
The Board acknowledges its statutory mandate to conduct the administration and management of the Company. The Board’s functions are governed by Chapter 5 of the Capital Market Rules and the Code of Corporate Governance for Listed Entities.
The Board is also responsible for ensuring that the Company installs and operates effective internal control and management information systems and that it communicates effectively with the market.
The Board met seven times during the year under review. The Board has a formal schedule of matters reserved to it for decision. Directors receive board and committee papers 10 days in advance of meetings and have access to the advice and services of the Company Secretary. Directors may, in the furtherance of their duties, take independent professional advice on any matter at the Company’s expense.
The Company, due to its continuous oversight and communication with its shareholders, has not established a performance evaluation committee chaired by a Non-Executive Director in order to carry out a performance evaluation of its role.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
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Corporate Governance – Statement of Compliance – continued
Audit Committee
The Committee is chaired by Mr John Soler, and its other members are Mr Josef Formosa Gauci and Mr Christopher Paris. Mr Josef Formosa Gauci is considered by the Board to be competent in accounting and auditing in terms of the Capital Market Rules. As described above, all three Directors are independent Non-Executive Directors.
The Company Secretary acts as secretary to the committee which also receives the assistance of the Group Chief Executive Officer, Mr Michael Warrington, the Group Managing Director of Finance and Administration, Mr Albert Bonello and the Group Internal Auditor, Ms Isabelle Spiteri.
The Audit Committee met eight times during the year under review.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee (the “RemNom Committee”) is composed of Mr Josef Formosa Gauci (Chairperson), Mr Christopher Paris and Mr John Soler, all of which are independent Non-Executive Directors.
In its function as remuneration committee, the RemNom Committee is charged with the oversight of the remuneration policies implemented by the Group with respect to its senior management.
In its function as nominations committee, the RemNom Committee is charged with enhancing the quality of nominees to the Board and ensuring the integrity of the nominating process and with proposing the remuneration package of Directors and senior executives of the Group.
The RemNom Committee met two times during the year under review.
Dealings by Directors and Senior Officers
Conscious of its responsibility for monitoring dealings by Directors and senior officers in the Company’s securities, the Board approved a Code of Conduct for Securities Transactions by Directors, Executives and Employees in compliance with Capital Market Rules 5.102 to 5.116. The code provides guidance to the Company’s officers and serves as a minimum standard of good practice when dealing in the Company’s securities.
During the year under review, there were no transactions in the Company’s securities involving Directors or any of the Company’s employees in possession of unpublished price-sensitive information.
Internal Control
The Board is ultimately responsible for the Company’s system of internal control and for reviewing its effectiveness. However, such a system is designed to manage rather than eliminate the risk of failure to achieve objectives, and can provide only reasonable, and not absolute, assurance against material misstatement or loss.
A policy is in place, laying down the minimum required reports that should be made available to the Board in order to keep it informed in a structured and systematic manner on the operational and financial performance of the Company.
Institutional Shareholders
The Company is privately held and has no institutional shareholders.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
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Corporate Governance – Statement of Compliance – continued
Risk Identification
Management is responsible for the identification and evaluation of key risks applicable to their areas of business. Risks may be associated with a variety of internal or external sources including control breakdowns, disruption in information systems, competition, natural catastrophe and regulatory requirements.
The Board is responsible to review its risk management policies and strategies and oversee their implementation to ensure that identified operational risks are properly assessed and managed.
Directors’ Remuneration
The Board determines the remuneration of the Directors. The Directors’ and senior executives’ annual remuneration for the financial year under review, as approved by the Board, amounted to EUR2,622,233. This is a fixed remuneration and there are no variable elements or share options included. For the purposes of clarity, although several Directors sit on various committees of the Company, such Directors did not receive extra remuneration for occupying such roles during the year under review.
Commitment to Maintain an Informed Market
The Company recognises the importance of maintaining a dialogue with its stakeholders to ensure that its strategies and performance are understood. The Company communicates with stakeholders by way of the Annual Report and Financial Statements and by publishing its results on a six-monthly basis during the year, as well as through company announcements to the market in general.
The Board has also implemented an Investor Relations Program, which aims at giving Bondholders rewards to be used within the Group to foster loyalty. This program, which is managed by AX Group p.l.c. executives, includes the issue of the AX Investors Loyalty Card and the periodic dissemination of the AX Group Newsletter.
Corporate Social Responsibility
The Company is conscious of its responsibility towards the society in which it operates. It promotes environmentally friendly measures such as the reduction in the Company’s carbon footprint as well as encourages its employees to lead a healthy and active lifestyle. More information on environmental, social and governance matters is found in the Statement of Non-Financial Information in the Directors’ Report.
Signed on behalf of the Board of Directors on 20 February 2026 by Mr Angelo Xuereb and Mr Michael Warrington as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Financial Report 2025.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
23
Statements of Profit or Loss and Other Comprehensive Income
The notes on pages 29 to 80 form an integral part of these financial statements

|  | Group | Company
| Notes | 2025 | 2024 | 2025 | 2024
|  | EUR | EUR | EUR | EUR
Revenue | 7 | 130,909,881 | 83,343,606 | 9,350,675 | 13,523,836
Other operating income |  | 220,474 | 206,866 | 65,478 | 52,270
Operating costs | 11 | (58,986,307) | (27,362,043) | (1,429,334) | (1,574,254)
Staff costs | 8 | (36,320,869) | (32,155,310) | (4,658,404) | (3,870,169)
Depreciation | 15,17 | (11,934,199) | (10,077,922) | (659,257) | (569,050)
Gain/(loss) on fair valuation of investment properties | 16 | 834,339 | (2,477,613) | (132,854) | (200,000)
Gain on fair value of financial asset | 20 | - | - | 303,242 | 435,447
(Loss)/gain on disposal of financial assets |  | - | - | (324,908) | 1,608,500
Operating profit |  | 24,723,319 | 11,477,584 | 2,514,638 | 9,406,580
Share of results of associates and joint ventures | 19 | 1,536,535 | 2,104,953 | - | -
Finance income | 9 | 72,735 | 231,417 | 3,364,375 | 2,971,034
Finance costs | 10 | (9,474,972) | (8,001,940) | (3,970,946) | (3,716,351)
Profit before taxation |  | 16,857,617 | 5,812,014 | 1,908,067 | 8,661,263
Taxation | 13 | 527,858 | (744,664) | 1,687,890 | 980,951
Profit for the year |  | 17,385,475 | 5,067,350 | 3,595,957 | 9,642,214
Attributable to: |  |  |  |  |
Owners of the parent |  | 15,397,937 | 4,449,620 | - | -
Non-controlling interest |  | 1,987,538 | 617,730 | - | -
|  | 17,385,475 | 5,067,350 | - | -
Basic earnings per share | 14 | 13.22 | 3.82 | - | -
Other comprehensive income |  |  |  |  |
Other comprehensive income that will not be reclassified to profit or loss in subsequent periods |  |  |  |  |
Gain on property revaluations | 15 | 9,605,072 | 7,072,651 | - | -
Taxation | 13 | (2,690,693) | (1,318,765) | - | -
Other comprehensive income net of tax |  | 6,914,379 | 5,753,886 | - | -
Total comprehensive income |  | 24,299,854 | 10,821,236 | 3,595,957 | 9,642,214
Attributable to: |  |  |  |  |
Owners of the parent |  | 22,312,316 | 10,203,506 | - | -
Non-controlling interest |  | 1,987,538 | 617,730 | - | -
Total comprehensive income |  | 24,299,854 | 10,821,236 | 3,595,957 | 9,642,214

AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
24
Statements of Financial Position

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
| Notes | EUR | EUR | EUR | EUR
ASSETS |  |  |  |  |
Non-current assets |  |  |  |  |
Property, plant and equipment | 15 | 368,736,539 | 343,800,766 | 1,129,104 | 935,592
Investment properties | 16 | 59,828,214 | 61,443,002 | 12,106,934 | 9,592,854
Right-of-use assets | 17 | 3,821,302 | 3,706,899 | 4,627,574 | 4,944,268
Net investment in the lease | 17 | - | - | 813,252 | 1,063,394
Investment in subsidiaries | 18 | - | - | 89,451,933 | 87,866,933
Investments in associates and joint ventures | 19 | 9,738,721 | 8,645,937 | - | -
Loans receivable | 20 | 388,892 | 388,892 | 68,178,188 | 62,485,306
Financial assets | 20 | - | - | 7,332,434 | 11,080,392
|  | 442,513,668 | 417,985,496 | 183,639,419 | 177,968,739
Current assets |  |  |  |  |
Inventories | 21 | 55,263,599 | 66,234,134 | 3,239,354 | 3,179,131
Trade and other receivables | 22 | 21,016,378 | 17,707,222 | 17,363,196 | 12,542,163
Net investment in the lease | 17 | - | - | 250,142 | 240,350
Current tax asset |  | - | 616,471 | 757,863 | 2,488,557
Cash at bank and in hand | 23 | 10,593,161 | 10,569,146 | 296,372 | 183,596
|  | 86,873,138 | 95,126,973 | 21,906,927 | 18,633,797
Total assets |  | 529,386,806 | 513,112,469 | 205,546,346 | 196,602,536

AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
25
Statements of Financial Position – continued

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
| Notes | EUR | EUR | EUR | EUR
EQUITY AND LIABILITIES |  |  |  |  |
Capital and reserves |  |  |  |  |
Share capital | 25 | 1,164,688 | 1,164,688 | 1,164,688 | 1,164,688
Revaluation reserve | 25 | 218,384,813 | 214,005,845 | 3,789,682 | 3,886,290
Other reserves |  | 616,095 | 616,095 | 285,342 | 285,342
Retained earnings | 25 | 38,862,580 | 20,929,232 | 101,969,079 | 98,276,514
|  | 259,028,176 | 236,715,860 | 107,208,791 | 103,612,834
Non-controlling interest |  | 13,461,035 | 12,113,698 | - | -
Total equity |  | 272,489,211 | 248,829,558 | 107,208,791 | 103,612,834
Non-current liabilities |  |  |  |  |
Trade and other payables | 26 | 11,523,722 | 12,517,872 | 1,224,981 | 1,399,991
Bank borrowings | 27 | 53,890,517 | 63,621,749 | - | -
Other financial liabilities | 28 | - | - | 15,391,959 | 3,912,273
Debt securities in issue | 29 | 94,529,311 | 90,671,876 | 64,289,834 | 64,186,996
Non-current lease liabilities | 17 | 3,439,657 | 3,622,187 | 5,274,629 | 5,705,411
Deferred tax liabilities | 30 | 17,149,141 | 20,549,360 | 361,623 | 333,633
|  | 180,532,348 | 190,983,044 | 86,543,026 | 75,538,304
Current liabilities |  |  |  |  |
Trade and other payables | 26 | 42,584,863 | 39,522,736 | 2,335,067 | 1,704,479
Bank borrowings | 27 | 28,801,274 | 29,903,372 | - | -
Other financial liabilities | 28 | 732,395 | 8,449 | 5,976,847 | 12,282,994
Debt securities in issue | 29 | 3,911,729 | 3,810,761 | 3,084,349 | 3,089,469
Current tax liability |  | 304,921 | - | - | -
Current lease liabilities | 17 | 30,065 | 54,549 | 398,266 | 374,456
|  | 76,365,247 | 73,299,867 | 11,794,529 | 17,451,398
Total liabilities |  | 256,897,595 | 264,282,911 | 98,337,555 | 92,989,702
Total equity and liabilities |  | 529,386,806 | 513,112,469 | 205,546,346 | 196,602,536

The notes on pages 29 to 80 form an integral part of these financial statements.
The financial statements on pages 23 to 80 have been authorized for issue by the Board of Directors on 20 February 2026 and were signed on its behalf by Mr Angelo Xuereb and Mr Michael Warrington as per Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Report 2025.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
26
Statements of Changes in Equity
GROUP
Attributable to
equity
Non-
Share
Revaluation
Other
Retained
holders of
controlling
capital
reserve
reserves
earnings
the parent
interest
Total
EUR
EUR
EUR
EUR
EUR
EUR
EUR
At 31 October 2023
1,164,688
209,785,089
616,095
19,235,716
230,801,588
12,738,710
243,540,298
Profit for the year
-
-
-
4,449,620
4,449,620
617,730
5,067,350
Other comprehensive income for the year, net of tax
-
5,753,886
-
-
5,753,886
-
5,753,886
Total comprehensive income for the year
-
5,753,886
-
4,449,620
10,203,506
617,730
10,821,236
Dividends (Note 25)
-
-
-
(5,000,000)
(5,000,000)
(531,976)
(5,531,976)
Derecognition of non-controlling interest
-
-
-
710,766
710,766
(710,766)
-
Fair value movement of investment properties, net of tax
-
(1,533,130)
-
1,533,130
-
-
-

At 31 October 2024 | 1,164,688 | 214,005,845 | 616,095 | 20,929,232 | 236,715,860 | 12,113,698 | 248,829,558
Profit for the year | - | - | - | 15,397,937 | 15,397,937 | 1,987,538 | 17,385,475
Other comprehensive income for the year, net of tax | - | 6,914,379 | - | - | 6,914,379 | - | 6,914,379
Total comprehensive income for the year | - | 6,914,379 | - | 15,397,937 | 22,312,316 | 1,987,538 | 24,299,854
Dividends (Note 25) | - | - | - | - | - | (640,201) | (640,201)
Fair value movement of investment properties, net of tax | - | (2,535,411) | - | 2,535,411 | - | - | -
At 31 October 2025 | 1,164,688 | 218,384,813 | 616,095 | 38,862,580 | 259,028,176 | 13,461,035 | 272,489,211

AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
27
Statements of Changes in Equity – continued
COMPANY
The notes on pages 29 to 80 form an integral part of these financial statements.
Share
Revaluation
Other
Retained
capital
reserve
reserve
earnings
Total
EUR
EUR
EUR
EUR
EUR
At 31 October 2023
1,164,688
4,066,290
285,342
93,454,300
98,970,620
Profit for the year
-
-
-
9,642,214
9,642,214
Total comprehensive income for the year
-
-
-
9,642,214
9,642,214
Dividends (Note 25)
-
-
-
(5,000,000)
(5,000,000)
Fair value movement of investment properties, net of tax
-
(180,000)
-
180,000
-
At 31 October 2024
1,164,688
3,886,290
285,342
98,276,514
103,612,834
Profit for the year
-
-
-
3,595,957
3,595,957
Total comprehensive income for the year
-
-
-
3,595,957
3,595,957
Fair value movement of investment properties, net of tax
-
(96,608)
-
96,608
-
At 31 October 2025
1,164,688
3,789,682
285,342
101,969,079
107,208,791
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
28
Statements of Cashflows

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
| Notes | EUR | EUR | EUR | EUR
Cash flows from operating activities |  |  |  |  |
Profit before taxation |  | 16,857,617 | 5,812,014 | 1,908,067 | 8,661,263
Adjustments for: |  |  |  |  |
Depreciation | 15,17 | 11,934,199 | 10,077,922 | 659,257 | 569,050
Dividend receivable | 7 | - | - | (6,656,447) | (11,171,486)
Share of results of associates and joint ventures | 19 | (1,536,535) | (2,104,953) | - | -
Movement in fair value of investment properties | 16 | (834,339) | 2,477,613 | 132,854 | 200,000
Movement in fair value of financial asset | 20 | - | - | (303,242) | (435,447)
Loss/(gain) on disposal of financial asset |  | - | - | 324,908 | (1,608,500)
Gain on termination of lease |  | - | - | (52,978) | -
Movement in expected credit loss | 11 | (100,283) | (81,134) | 20,223 | 44,358
Movement in provision for litigation |  | - | (46,666) | - | -
Movement in provision for obsolete stock |  | - | (15,669) | - | -
Other short-term employee benefits | 8 | 1,140,214 | 1,453,447 | 400,453 | 137,153
Issue cost amortisation | 10 | 174,641 | 179,102 | 102,838 | 102,838
Interest expense | 10 | 9,165,177 | 7,527,230 | 3,868,108 | 3,613,513
Interest income | 9 | (72,735) | (231,417) | (3,364,375) | (2,971,034)
Operating profit/(loss) before working capital changes |  | 36,727,956 | 25,047,489 | (2,960,334) | (2,858,292)
Movement in inventories | 15,16,21 | 9,794,038 | (17,116,963) | (60,223) | -
Movement in trade and other receivables |  | (6,879,310) | (5,976,238) | (2,182,143) | (651,284)
Movement in trade and other payables |  | 1,116,597 | 10,036,753 | (2,131,489) | (22,837,600)
Cash flows from/(used in) operating activities |  | 40,759,281 | 11,991,041 | (7,334,189) | (26,347,176)
Interest paid |  | (9,344,003) | (6,176,939) | (3,197,379) | (862,500)
Interest received | 9 | 72,735 | 231,417 | 19,448 | 68,737
Taxation (paid)/credit received |  | (4,641,662) | 475,553 | 1,297,393 | 1,707,812
Net cash flows from/(used in) operating activities |  | 26,846,351 | 6,521,072 | (9,214,727) | (25,433,127)
Cash flows from investing activities |  |  |  |  |
Purchase of property, plant and equipment |  | (18,681,716) | (23,188,224) | (510,454) | (134,089)
Payments to acquire investment properties |  | (630,898) | (2,217,282) | (296,934) | -
Dividends received | 19 | 443,751 | 1,348,025 | - | -
Disposal of financial assets |  | - | - | 3,726,292 | 7,776,780
Movement in loan to subsidiary |  | - | - | 7,041,319 | 7,352,705
Net cash flows (used in)/from investing activities |  | (18,868,863) | (24,057,481) | 9,960,223 | 14,995,396
Cash flows from financing activities |  |  |  |  |
Bank loan drawdowns |  | 10,779,574 | 19,973,917 | - | -
Bank loan repayments |  | (22,345,496) | (7,765,529) | - | -
Proceeds from debt securities in issue |  | 3,682,794 | 5,050,011 | - | 10,924,704
Payment of lease liabilities | 17 | (162,735) | (174,953) | (632,720) | (343,220)
Dividends to non-controlling interest |  | (640,201) | (531,976) | - | -
Net cash flows (used in)/from financing activities |  | (8,686,064) | 16,551,470 | (632,720) | 10,581,484
Net movement in cash and cash equivalents |  | (708,576) | (984,939) | 112,776 | 143,753
Cash and cash equivalents at beginning of year | 9,344,746 | 10,329,685 | 183,596 | 39,843
Cash and cash equivalents at end of year | 23 | 8,636,170 | 9,344,746 | 296,372 | 183,596

The notes on pages 29 to 80 form an integral part of these financial statements
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
29
Notes to the Financial Statements
1.GENERAL INFORMATION
AX Group p.l.c. (C 12271) is a public limited liability company incorporated in Malta. The Company is the parent company of the Group, which is mainly involved in the provision of hospitality and entertainment services, care services, construction and property development. The Company’s registered office is at AX Group, AX Business Centre, Triq id-Difiza Civili, Mosta, MST 1741, Malta.
2.BASIS OF PREPARATION
The financial statements have been prepared in accordance with the requirements of the International Financial Reporting Standards (IFRSs) as adopted by the EU and the requirements of the Companies Act, Cap. 386 of the Laws of Malta.
The financial statements have been prepared on a historical cost basis, except for investment properties (Note 16), land and buildings (Note 15) and investment in debt securities (Note 20) which are stated at fair value. The preparation of financial statements in conformity with IFRSs as adopted by the EU requires the use of certain accounting estimates. It also requires the Directors to exercise their judgement in the process of applying the Group and the Company’s accounting policies. Material accounting policies are disclosed in Note 4 and significant accounting judgments, estimates and assumptions are disclosed in Note 5 to these financial statements.
These financial statements are presented in Euro (EUR) which is the Group and the Company’s functional currency. The accounting policies set out below have been applied consistently to all periods presented in these financial statements.
2.1 Going concern
Profitability
The Group registered total revenue of EUR130,909,881, representing an increase of EUR47,566,275 over last year and has reported an adjusted EBITDA of EUR35,823,179 (2024: EUR24,033,119) which reconciles to the Group’s operating profit after adjusting for fair value gain/(loss) of investment properties, movement in fair value of financial assets, (loss)/gain on disposal of financial asset, and depreciation on the Statement of Profit or Loss.
Financial Position
As at 31 October 2025, the Company’s current assets exceeded its current liabilities by EUR10,112,398 (2024: EUR1,182,399). Given the nature of the Company and its function within the Group, of which it is the ultimate parent company, the Company is dependent on the Group for financial support.
As at 31 October 2025, the Group’s current assets exceeded its current liabilities by EUR10,507,891 (2024: EUR21,827,106) whereas the Group’s total assets exceeded its total liabilities by EUR272,489,211 (2024: EUR248,829,558).
As described below, management has prepared a cashflow forecast for the AX Group, considering events and transactions that have occurred shortly after year-end or are expected to occur in the forthcoming eighteen month period, and has concluded that as a result of the strength of the Group’s financial position and performance and availability of financing, the AX Group will be able to sustain its operations over the foreseeable future in a manner that is cash flow positive.
Accordingly, based on information available at the time of approving these financial statements, the Directors have reasonable expectation that the Group and the Company will be able to meet all their obligations as and when they fall due over the foreseeable future and therefore, that the going concern basis adopted for the preparation of these consolidated and separate financial statements is appropriate.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
30
Notes to the Financial Statements – continued
2.BASIS OF PREPARATION - continued
2.1 Going concern - continued
Liquidity and Capital Funding
During the year, management took various steps to retain a high level of liquidity in line with the Group’s policy. As at reporting date, the Group had aggregate sanctioned banking facilities of EUR101,802,013 (2024: EUR113,497,761) of which EUR19,112,873 (2024: EUR19,977,729) were undrawn banking facilities.
As at reporting date and up to the date of this report, the Group was in compliance with all financial and non-financial covenants stipulated in the bank loans’ sanction letters. Furthermore, the Group is anticipated to continue adhering to these covenants throughout the period covered by the cash flow forecast.
On 3 September 2025, the Company obtained a EUR10 million loan facility from a local bank for general corporate funding. It is expected that the amount will be fully utilised in 2026.
As at 31 October 2025, the Group’s gearing ratio stood at 47% (2024: 50%). It should be noted that the Group is not required to maintain a sinking fund in relation to its borrowings.
The Group will be investing an estimated EUR70 million to EUR80 million to complete the second phase of the Qawra project, which includes the demolition and reconstruction of AX Sunny Coast Resort & Spa and the redevelopment of AX Sunny Coast Lido and Luzzu Complex. Currently, the Group is in advanced discussions with local banks to secure additional loan facilities, which discussions are anticipated to be finalized within the coming months.
Additionally, management’s forecast is based on the assumption that upon its redemption date being 20 December 2026, the 3.25% 2026 Unsecured Bond issued by the Company will be either repaid or rolled over. This repayment is expected to be funded through internally generated cashflows or, if required, through additional financing, including the issuance of a new bond by AX Group p.l.c.
Cashflow Forecast
Management has prepared a cashflow forecast covering 18 months from year-end, considering significant events and transactions that have occurred or are expected to occur subsequent to period end. The base case scenario contemplates the Group FY2026 budget prepared by the various divisions of the Group.
Revenue from the Hospitality division is expected to grow further in 2026, primarily driven by the continued strong performance of the Qawra Hotels, which has consistently exceeded budgeted targets and is projected to maintain this positive trend. The Verdala Wellness Hotel, which commenced operations in August 2025, will record its first full year of activity, further strengthening the division’s results. The Care sector delivered excellent results in 2025 and is anticipated to deliver similar levels of activity in the coming year. The Construction division remains supported by multiple third-party contracts already secured for 2026, providing a solid pipeline of work. Management is actively implementing measures aimed at improving productivity and efficiency within this division. Additionally, the Group successfully closed a significant number of sales contracts for the Verdala residential development during 2025 and holds a substantial number of units under promise of sale, which are expected to be realised through final deeds in 2026. Management also expects a continued effort to place further units under promise of sale during 2026, expected to be realized through final deeds in 2026 and 2027.
The cash flow forecast also prudently factors in the potential impact of inflationary pressures on the Group’s operating costs. It includes planned capital expenditure associated with the completion of the Verdala project, the commencement of phase 2 of the Qawra project, as well as the development of a select number of projects considered critical to the Group’s long-term strategy. Management is also considering the servicing of current and projected debt, including debt at variable rates and contractual loan covenants.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
31
Notes to the Financial Statements – continued
2.BASIS OF PREPARATION - continued
2.2 Going concern - continued
Cashflow Forecast – continued
Management has simulated a stress-tested scenario to assess the Group’s resilience and ability to handle unforeseen challenges. Under all scenarios tested, the Group is expected to continue to have sufficient liquidity relative to the funding available to it.
The Group has also identified a contingency plan aimed at generating further liquidity should the events that are expected to occur do not materialize and, with the contingency plan in place, management is confident that the Group will continue to have sufficient liquidity to operate in the foreseeable future. The contingency plan includes the possibility of obtaining additional bank financing, guaranteed by unencumbered assets owned by the Group as well as the disposal of some non-core immovable property.
3.BASIS OF CONSOLIDATION
Subsidiaries are those companies in which the Group, directly or indirectly, has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights.
The consolidated financial statements comprise the financial statements of AX Group p.l.c. (“the Company”) and its subsidiaries (“the Group”) as at 31 October 2025. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if, and only if, the Group has:
-Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee)
-Exposure, or rights, to variable returns from its involvement with the investee
-The ability to use its power over the investee to affect its returns
Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
-The contractual arrangement(s) with the other vote holders of the investee
-Rights arising from other contractual arrangements
-The Group’s voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of OCI are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
32
Notes to the Financial Statements – continued
3.BASIS OF CONSOLIDATION – continued
These consolidated financial statements comprise the Company and its subsidiaries, namely:

| Group % of equity and voting rights held
| 2025 | 2024
AX Construction Limited | 100 | 100
AX Developments Limited ** | 100 | -
AX Finance Limited | 100 | 100
AX Hotel Operations p.l.c. | 100 | 100
AX IP Holdings Ltd ** | 100 | -
AX Investments p.l.c. (merged into AX Finance Limited) | - | 100
AX Port Holding Company Limited | 100 | 100
AX Port Investments Company Limited | 100 | 100
Central Leisure Developments Limited * | 100 | 100
Heritage Developments Limited * | 100 | 100
Hilltop Gardens Retirement Village Limited | 100 | 100
Hilltop Management Services Limited | 100 | 100
AX Business Park Limited | 100 | 100
Palazzo Merkanti Leisure Limited * | 100 | 100
Renewables Limited | 100 | 100
Royal Hotels Limited * | 100 | 100
Simblija Developments Limited * | 100 | 100
Skyline Developments Limited * | 100 | 100
Suncrest Hotels p.l.c.* | 100 | 100
Palazzo Lucia Limited | 100 | 100
Verdala Mansions Limited | 100 | 100
AX Real Estate p.l.c. | 91.13 | 91.13
Engage People Limited | 100 | 100
Verdala Terraces Limited | 100 | 100

* AX Group p.l.c. being the ultimate parent company of these entities through direct ownership of their immediate parent, AX Real Estates p.l.c.
** These are new companies incorporated during the year.
The registered address of all subsidiaries is AX Group, AX Business Centre, Triq id-Difiza Civili, Mosta MST 1741, Malta.
The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
AX GROUP P.L.C.
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Notes to the Financial Statements – continued
4.SUMMARY OF MATERIAL ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied in the financial statements presented, unless otherwise stated.
4.1 Standards, interpretations and amendments to published standards endorsed by the European Union effective in the current year
The accounting policies adopted are consistent with those of the previous financial year, except for the following amendments to IFRS effective during the year:
-Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements (issued on 25 May 2023) (effective for financial year beginning on or after 1 January 2024)
-Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (issued on 22 September 2022) (effective for financial year beginning on or after 1 January 2024)
-Amendments to IAS 1 Presentation of Financial Statements:
i.Classification of Liabilities as Current or Non-Current (issued on 23 January 2020 (effective for financial year beginning on or after 1 January 2024));
ii.Classification of Liabilities as Current or Non-Current – Deferral of Effective Date (issued on 15 July 2020) (effective for financial year beginning on or after 1 January 2024); and
iii.Non-Current Liabilities with Covenants (issued on 31 October 2022) (effective for financial year beginning on or after 1 January 2024)
The changes resulting from the above standards, interpretations and amendments are not expected to have a material effect on the financial statements of the Company and the Group.
AX GROUP P.L.C.
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Notes to the Financial Statements – continued
4.SUMMARY OF MATERIAL ACCOUNTING POLICIES – continued
4.2 Standards, interpretations and amendments to published standards as adopted by the EU which are not yet effective
Up to date of approval of these financial statements, certain new standards, amendments and interpretations to existing standards have been published but which are not yet effective for the current reporting year and which the Group has not early adopted but plans to adopt upon their effective date. The new and amended standards follow:
-Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (issued on 15 August 2023) (effective for financial year beginning on or after 1 January 2025)
-Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS9 and IFRS7 (issued on 30 May 2024) (effective for financial year beginning on or after 1 January 2026)
-Contracts Referencing Nature-dependent Electricity – Amendments to IFRS9 and IFRS7 (issued on 18 December 2024) (effective for financial year beginning on or after 1 January 2026)
-Annual Improvements Volume 11 (issued on 18 July 2024) (effective for financial year beginning on or after 1 January 2026)
The changes resulting from these standards, interpretations and amendments are not expected to have a material effect on the financial statements of the Company and the Group.
4.3 Standards, interpretations and amendments that are not yet endorsed by the European Union
These are as follows:
-IFRS 19 Subsidiaries without Public Accountability: Disclosures (issued on 9 May 2024) (effective for financial year beginning on or after 1 January 2027)
-IFRS 18 Presentation and Disclosure in Financial Statements (issued on 9 April 2024) (effective for financial year beginning on or after 1 January 2027)
-Amendments to IAS21 The Effects of Changes in Foreign Exchange Rates: Translation to a Hyperinflationary Presentation Currency (issued on 13 November 2025) (effective for financial year beginning on or after 1 January 2027)
-Amendments to IFRS19 Subsidiaries without Public Accountability: Disclosures (issued on 21 August 2025) (effective for financial year beginning on or after 1 January 2027)
The Company and the Group are still assessing the impact that these new standards will have on the financial statements.
AX GROUP P.L.C.
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Notes to the Financial Statements – continued
4.SUMMARY OF MATERIAL ACCOUNTING POLICIES – continued
4.4 Revenue from contracts with customers
Revenue includes all revenues from the ordinary business activities of the Group and is recorded net of value added tax. Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when (or as) it satisfies a performance obligation by transferring control of a promised good or service to the customer. The Group has generally concluded that it is the principal in its revenue arrangements.
The Group recognises revenue from the following major sources:
i.Sale of goods
ii.Provision of hospitality services primarily accommodation in hotels and boutique properties and catering services offered by the Group outlets and provision of accommodation services within a retirement home, independent living facilities and other ancillary services
iii.Construction, turnkey and restoration works of residential, commercial and industrial properties
iv.Sale of inventory property – completed property and property under development
i.Sale of goods
The Group, through its subsidiaries, sells food and beverage products and care items directly to customers through its own outlets. Revenue is recognised when control of the goods has transferred, being at the point the customer purchases the goods at the outlet or property. Customers do not have the right of return and no warranties are given on the items sold.
ii.Provision of services - Hospitality and Care
The Group, through various subsidiaries, provides hospitality and care services.
Revenue from Hospitality includes revenue from accommodation, foods and beverage services and other ancillary services. Each of the services rendered is recognised at a point in time when transferring control of the contracted service to the customer.
Revenue from care services includes revenue recognised over time on a systematic basis based on the period consumed as a proportion of the total contractual period for: (i) revenue from Hilltop Gardens Retirement Village consisting of revenue from self-catering apartments and penthouses that are occupied by tenants for definite periods and (ii) revenue from Simblija Care Home consisting of revenue from stays for short-term respite care, convalescence and post-operative recovery and intensive nursing care to the more dependent elderly residents; and revenue recognised at a point in time when transferring control of the contracted service to the customer – related to ancillary services provided at Simblija Care Home and other amenities.
iii.Provision of services – Construction
The Group provides construction related works to its customers. Revenue from construction works is recognised over time, based on the proportion of works performed to date. The Directors consider that this input method is an appropriate measure of the progress towards complete satisfaction of these performance obligations under IFRS15. The Group becomes entitled to invoice customers for construction works, when a third-party assessor signs off a certificate confirming the achievement of a milestone.
iv.Sale of inventory property – Completed property and property under development
The sale of completed property constitutes a single performance obligation and the Group has determined that this is satisfied at the point in time when control transfers. For unconditional exchange of contracts, this generally occurs when legal title transfers to the customer. For conditional exchanges, this generally occurs when all significant conditions are satisfied. Payments are received when legal title transfers.
AX GROUP P.L.C.
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Notes to the Financial Statements – continued
4.SUMMARY OF MATERIAL ACCOUNTING POLICIES – continued
4.5 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised from the time that expenditure for these assets and borrowing costs are being incurred and activities that are necessary to prepare these assets for their intended use or sale are in progress. Borrowing costs are capitalised until such time as the assets are substantially ready for their intended use or sale. Other borrowing costs are recognised as an expense in the profit and loss in the period in which they are incurred.
4.6 Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Company and Group as a lessee
A single recognition and measurement approach for all leases is applied, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
i.Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:

Group |  |
Hospitality | - | 38 to 111 years
Company |  |
Offices | - | 20 years
Hospitality | - | 15 to 20 years

If ownership of the leased asset is transferred to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment.
AX GROUP P.L.C.
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4.SUMMARY OF MATERIAL ACCOUNTING POLICIES – continued
4.6 Leases - continued
Company and Group as a lessee – continued
ii.Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
The Group’s lease liabilities are detailed in Note 17.
Group as lessor
Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in Revenue in the statement of profit or loss and other comprehensive income due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income.
4.7 Taxation
i.Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted at the reporting date in the country where the Group operates and generates taxable income.
Current income tax is charged or credited to profit or loss. Current income tax relating to items realized directly in equity is realized in equity and not in the statement of profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
The charge for current tax is based on the taxable result for the period. The taxable result for the period differs from the result as reported in profit or loss because it excludes items which are non-assessable or disallowed and it further excludes items that are taxable or deductible in other periods.
AX GROUP P.L.C.
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4.SUMMARY OF MATERIAL ACCOUNTING POLICIES – continued
4.7 Taxation - continued
ii.Deferred income tax
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax liabilities are realized for all taxable temporary differences and deferred tax assets are realized to the extent that it is probable that taxable profits will be available against which the deductible temporary differences can be realized.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to settle its current tax assets and liabilities on a net basis.
4.8 Fair value measurement
The Group and the Company measure non-financial assets such as investment properties, land and buildings and financial assets such as investment in debt securities in issue at fair value at each balance sheet date.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
-Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities
-Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
-Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
AX GROUP P.L.C.
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4.SUMMARY OF MATERIAL ACCOUNTING POLICIES – continued
4.9 Investment in subsidiaries
Subsidiaries are all entities over which the investor has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.
Company
Investments in subsidiaries are initially recognized at cost, being the fair value of the consideration given, including acquisition charges associated with the investment. Subsequent to initial recognition, the investments are measured at cost less any accumulated impairment losses.
4.10 Investment in associates and joint ventures
The Group holds an interest in a joint venture, Hardrocks Estates Limited, and an interest in associates, Valletta Cruise Port p.l.c. and Imselliet Solar Limited.
The financial statements of Hardrocks Estates Limited are prepared for the same reporting period as the Group whilst those of Valletta Cruise Port p.l.c. and Imselliet Solar Limited have different reporting periods. The accounting policies of all companies are aligned with those of the Group. Therefore, no adjustments are made when measuring and recognising the Group’s share of the profit or loss of the investees after the date of acquisition.
Group
The considerations made in determining significant influence or joint control are similar to those necessary to determine control over subsidiaries. The Group’s investment in its associate and joint venture are accounted for using the equity method.
Under the equity method, the investment in an associate or a joint venture is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group’s share of net assets of the associate or joint venture since the acquisition date. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is not tested for impairment separately. The statement of profit or loss reflects the Group’s share of the results of operations of the associate or joint venture after adjustments to align the accounting policies of the Group, from the date that significant influence commences until the year-ended 31 October 2025.
Company
Investments in associates and joint ventures are initially recognized at cost. The Company subsequently measures the investments in associates and joint ventures at cost less any accumulated impairment losses.
AX GROUP P.L.C.
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Notes to the Financial Statements – continued
4.SUMMARY OF MATERIAL ACCOUNTING POLICIES – continued
4.11 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
i.Financial assets
Initial recognition and measurement
The Group classifies its financial assets, at initial recognition, as subsequently measured at amortised cost, and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.
Subsequent measurement
For purposes of subsequent measurement, the Group classifies its financial assets in the following categories:
-Financial assets at amortised cost (debt instruments)
-Financial assets at fair value through profit or loss
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost (debt instruments) are the most relevant to the Group. The Group measures financial assets at amortised cost if both of the following conditions are met:
-The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
-The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the effective interest rate (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
The Company and the Group’s debt instruments at amortised cost includes loans and receivables, trade and other receivables and cash and cash equivalents.
AX GROUP P.L.C.
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Notes to the Financial Statements – continued
4.SUMMARY OF MATERIAL ACCOUNTING POLICIES – continued
4.11 Financial instruments – continued
i.Financial assets – continued
Subsequent measurement – continued
Financial assets at fair value through profit or loss
Financial assets that do not meet the criteria for being measured at amortised cost are measured at fair value through profit or loss (FVTPL), specifically, debt instruments that do not meet the amortised cost criteria are classified as at FVTPL.
Financial assets measured at FVTPL are subsequently measured at fair value at the end of each reporting period, with any fair value gains or losses including foreign exchange gains and losses, recognised in profit or loss.
Interest income is disclosed within the line item Finance income. Fair value gains and losses are recognised within the line items Gain on fair value of financial asset. The Company holds investment in debt securities which falls in this category.
ii.Financial liabilities
Initial recognition and measurement
The Group’s financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings or payables, 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 Group’s financial liabilities include loans and borrowings and trade and other payables.
Subsequent measurement
For purposes of subsequent measurement, the Group’s financial liabilities are classified at amortised cost (loans and borrowings).
Financial liabilities at amortised cost (loans and borrowings)
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the 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 Finance costs in the statement of profit or loss.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
AX GROUP P.L.C.
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4.SUMMARY OF MATERIAL ACCOUNTING POLICIES – continued
4.11 Financial instruments – continued
iii.Impairment of financial assets
The Group assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, there is objective evidence of impairment as a result of one or more events that has occurred since the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses (“ECLs”) which uses a lifetime expected loss allowance for all trade receivables and contract assets.
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
iv.Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
4.12 Impairment of non-financial assets
All other assets are tested for impairment in terms of this accounting policy except for inventory and investment properties measured at fair value.
At the end of each reporting period, the carrying amount of assets, including cash-generating units, is reviewed to determine whether there is any indication or objective evidence of impairment, as appropriate, and if any such indication or objective evidence exists, the recoverable amount of the asset is estimated. An impairment loss is the amount by which the carrying amount of an asset exceeds its recoverable amount.
Impairment losses are recognised immediately in profit or loss, unless the asset is carried at a revalued amount, in which case, the impairment loss is recognised in other comprehensive income to the extent that the impairment loss does not exceed the amount in the revaluation surplus for that asset.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss has been recognised.
AX GROUP P.L.C.
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Notes to the Financial Statements – continued
4.SUMMARY OF MATERIAL ACCOUNTING POLICIES – continued
4.13 Property, plant and equipment
Property, plant and equipment other than land and buildings are initially recorded at cost. These are subsequently stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price and any directly attributable cost of preparing the asset for its intended use.
Property, plant and equipment are derecognised on disposal or when no future economic benefits are expected from their use or disposal. Gains or losses arising from derecognition represent the difference between the net disposal proceeds, if any, and the carrying amount, and are included in profit or loss in the period of derecognition.
Depreciation is provided on the below items, at rates intended to write down the cost less residual value of the assets over their expected useful lives. The annual rates used, which are consistent with those applied in the previous year, are as follows:

Improvements | 10% per annum
Furniture, fixtures and fittings | 5% - 50% per annum
Computer equipment | 16% - 20% per annum
Plant and machinery | 5% - 20% per annum

Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying amount and are taken into consideration in determining the operating profit. The residual useful lives of the assets are reviewed and adjusted as appropriate, at each financial reporting date. The carrying amount of an asset is written down immediately to its recoverable amount if the carrying amount of the asset is greater than its estimated recoverable amount.
Subsequent costs are included in the carrying amount of the asset or recognized as separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the Group during the financial period in which they are incurred.
4.14 Revaluation of land and buildings
Land and buildings are held for use in the production or supply of goods or services or for administrative purposes. Subsequent to initial recognition, land and buildings are stated at revalued amount at the date of the revaluation less any subsequent accumulated depreciation and subsequent impairment losses. Revaluations are made for the entire class of land and buildings and with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using revaluations at the date of the statement of financial position. Any accumulated depreciation at the date of the revaluation is eliminated against the gross carrying amount of the asset.
Any revaluation increase arising on the revaluation is credited to the revaluation reserve unless it reverses a revaluation decrease for the same asset previously recognised in the profit and loss, in which case, the increase is credited to profit and loss to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation is recognised in profit and loss to the extent that it exceeds the balance, if any, held in the revaluation reserve relating to a previous revaluation of that asset.
An annual transfer from the asset revaluation surplus to retained earnings is made for the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset’s original cost. Additionally, accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Upon disposal, any revaluation surplus relating to the particular asset being sold is transferred to retained earnings.
Depreciation commences when the depreciable assets are available for use and is charged to profit or loss so as to write off the cost/revalued amount, less any estimated residual value, over their estimated useful lives, using the straight-line method, on the following bases:

Buildings | 2% per annum

AX GROUP P.L.C.
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4.SUMMARY OF MATERIAL ACCOUNTING POLICIES – continued
4.15 Investment properties
Investment properties are properties held to earn rentals or for capital appreciation or both. Investment properties are recognized as an asset when it is probable that the future economic benefits that are associated with the investment properties will flow to the entity and the cost can be measured reliably.
Investment properties are initially measured at cost, including transaction costs, less impairment losses. Subsequent to initial recognition, investment properties are stated at fair value, which reflects market conditions at the reporting date. Gains or losses arising from changes in fair values of investment properties are included in profit and loss in the period in which they arise, including the corresponding tax effect. Fair values are determined by a professionally qualified architect/surveyor on the basis of market values.
Investment properties are derecognized either when they have been disposed of (i.e., at the date the recipient obtains control) or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit and loss in the period of derecognition. The amount of consideration to be included in the gain or loss arising from the derecognition of investment properties is determined in accordance with the requirements for determining the transaction price in IFRS 15.
Transfers are made to (or from) investment properties only when there is a change in use. For transfer from investment properties to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. If owner-occupied property becomes an investment property, the Group accounts for such property in accordance with the policy stated under property, plant and equipment up to the date of change in use.
4.16 Inventories
Inventories are valued at the lower of cost and net realisable value. Cost is determined on a weighted average cost basis. Net realisable value is the price at which stocks can be sold in the course of business less anticipated costs of selling. Provision is made where necessary for obsolete, slow moving and defective stock.
Property held for development and re-sale is stated at the lower of cost and net realisable value. The cost includes the purchase price of the property and development costs incurred to date. Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing and selling.
The cost of development and common costs are apportioned on the basis of the costs absorbed during the stage of development and the cost of land is apportioned on the basis of the floor area.
Cost incurred in bringing each property to its present location and condition includes:
-Freehold and leasehold rights for land
-Amounts paid to contractors for development
-Planning and design costs, costs of site preparation, professional fees for legal services, property transfer taxes, development overheads and other related costs
When an inventory property is sold, the carrying amount of the property is recognised as an expense in the period in which the related revenue is recognised. The carrying amount of inventory property recognised in profit or loss is determined with reference to the directly attributable costs incurred on the property sold and an allocation of any other related costs based on the relative size of the property sold.
4.17 Cash and cash equivalents
Cash and cash equivalents are defined as cash in hand, demand deposits and short term, highly liquid investments readily convertible to known amounts of cash and subject to significant risk of changes in value. For the purpose of the statement of cashflows, cash and cash equivalents consist of cash in hand and deposits at banks, net of outstanding overdrafts.
AX GROUP P.L.C.
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Notes to the Financial Statements – continued
4.SUMMARY OF MATERIAL ACCOUNTING POLICIES – continued
4.18 Ordinary shares and dividends
Ordinary shares are classified as equity. Incremental costs directly attributable to issue of ordinary shares are recognized as a deduction from equity.
Dividends to holders of equity instruments are recognised as liabilities in the period in which they are declared. Dividends to holders of equity instruments are debited directly in equity.
4.19 Related parties
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. Related party accounts are carried at cost, net of any impairment charge.
AX GROUP P.L.C.
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Notes to the Financial Statements – continued
5.SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
In preparing the financial statements, the Directors are required to make judgements, estimates and assumptions that affect reported income, expenses, assets, liabilities and disclosure of contingent assets and liabilities. Use of available information and application of judgment are inherent in the formation of estimates. Actual results in the future could differ from such estimates and the differences may be material to the financial statements. These estimates are reviewed on a regular basis and, if a change is needed, it is accounted for in the year the changes become known.
Except for the below, in the opinion of the Directors, the accounting estimates, assumptions 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 significant in terms of the requirements of IAS 1 (revised) - ‘Presentation of financial statements’.
Judgements
In the process of applying the Group’s accounting policies, the Directors have made the following judgements:
Recoverability of deferred tax assets
Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon likely timing and level of future taxable profits together with future tax planning strategies (Note 30).
Deferred tax on revalued land and buildings
The Group’s own-use land and buildings within property, plant and equipment are measured at revalued amounts under IAS16. In the financial statements of the property-owning subsidiaries, these land and buildings were classified as investment property at fair value, and the resulting deferred tax liability was measured on the basis that the value of these assets will be recovered through sale (rather than through use) under the rebuttable presumption in IAS12. In Malta, the income tax rate applicable to benefits generated through operating the asset (recovery through use) is 35%, while that applicable on sale of property is 8% or 10% on the sales proceeds.
Judgement is required in preparing these financial statements to determine whether the Group will recover the value of the land and buildings through use or through sale, or partially through use and sale. During 2021, management of the property-owning subsidiaries entered into contracts with other group subsidiaries for a period of twenty years for the management and operation of the assets. This is part of a restructuring exercise in line with the updated strategy of the Group. As a result, the Group has reassessed the expected manner of recovery of these property, plant and equipment. In making this assessment, management made an estimation of the amount relating to non-depreciable assets, being land carried at fair value, where the deferred tax on revaluation assumes recovery through sale. For the depreciable portion, an estimation of the period over which management expects to recover the property, plant and equipment through use was made at the remaining number of years from the duration of the contract. The remaining balance beyond the period of use was assumed to be recovered through sale.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
47
Notes to the Financial Statements – continued
5. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS – continued
Estimates
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year, are described below. Estimates underlying the Group and the Company’s use of the going concern assertion are described in Note 2.1 to these financial statements.
Fair value of land and buildings and investment properties
The Group and the Company use the services of professional valuers to revalue the land and buildings and investment properties. The professional valuers take into account market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group and the Company’s land and buildings and investment properties are revalued by independent professional qualified valuers on a rotation basis. In the years in which an independent valuation is not obtained, management reperforms fair valuations of the properties by verifying and updating all major inputs to the last independent valuation report prepared by an external independent valuer. Internal methods are therefore aligned with those used by external valuers. On a yearly basis, management assesses each property’s change in value to determine whether the change is reasonable and holds discussions with the independent valuer, as necessary.
The highest and best use of a non-financial asset takes into account the use of the asset that is physically possible, legally permissible and financially feasible, as follows:
-A use that is physically possible, takes into account the physical characteristics of the asset that market participants would take into account when pricing the asset (e.g. the location or size of a property).
-A use that is legally permissible takes into account any legal restrictions on the use of the asset that market participants would take into account when pricing the asset (e.g. the zoning regulations applicable to a property).
-A use that is financially feasible takes into account whether a use of the asset that is physically possible and legally permissible generates adequate income or cash flows (taking into account the costs of converting the asset to that use) to produce an investment return that market participants would require from an investment in that asset put to that use.
The Group and the Company use valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimising the use of unobservable inputs. As described in Note 16, the Group and the Company use valuation techniques that include inputs that are not always based on observable market data in order to estimate the fair value of land and building and investment properties. Note 16 provides detailed information regarding these valuation methods and the key assumptions used in performing such valuations.
Provision for expected credit losses of trade receivables
The entity applies the simplified model of recognising lifetime expected credit losses for all trade receivables as these items do not have a significant financing component. In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess shared credit risk characteristics. They have been grouped based on the days past due and also according to the geographical location of customers.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
48
Notes to the Financial Statements – continued
6.SEGMENT INFORMATION
For management purposes, the Group is organised into business units based on its products and services and has five reportable segments, as follows:
-Hospitality
The Hospitality segment operates a portfolio of hotel properties located in Valletta, Sliema, Qawra and Rabat. Revenue generated by the Hospitality operating segment includes revenue from accommodation, foods and beverage services and other ancillary services. Revenue from food and beverage is recognised at the point of sale, whereas accommodation revenue is recognised progressively over the duration of the guests’ stay.
-Construction
This operating segment undertakes construction projects with an emphasis on civil engineering works, turnkey assignments and restoration works, rendering services to both third party customers as well as companies forming part of the Group. Revenue from construction works is recognised over time, based on the proportion of works performed to date. The Directors consider that this input method is an appropriate measure of the progress towards complete satisfaction of these performance obligations under IFRS15. The Group becomes entitled to invoice customers for construction works, when a third-party assessor signs off a certificate confirming the achievement of a milestone.
-Care
The Care operating segment encompasses Hilltop Gardens Retirement Village and Simblija Care Home, which offer tailor-made packages covering different levels of long-term and short-term care. Revenue generated from care services includes (a) revenue recognised over time on a systematic basis based on the period consumed as a proportion of the total contractual period for: (i) revenue from Hilltop Gardens Retirement Village consisting of revenue from self-catering apartments and penthouses that are occupied by tenants for definite periods and (ii) revenue from Simblija Care Home consisting of revenue from stays for short-term respite care, convalescence and post-operative recovery and intensive nursing care to the more dependent elderly residents; and (b) revenue recognised at a point in time when transferring control of the contracted service to the customer – related to ancillary services provided at Simblija Care Home and other amenities.
-Real Estate and Development
The Group earns revenue from acting as a lessor in operating leases which do not transfer substantially all of the risks and rewards incidental to ownership of investment properties. Rental income arising from operating leases on investment properties is accounted for on a straight-line basis over the lease term and is included in revenue in the statement of profit or loss due to its operating nature, except for contingent rental income which is recognised when it arises. Initial direct costs incurred in negotiating and arranging an operating lease are recognised as an expense over the lease term on the same basis as the lease income.
The sale of completed property constitutes a single performance obligation and the Group has determined that this is satisfied at the point in time when control transfers. For unconditional exchange of contracts, this generally occurs when legal title transfers to the customer. For conditional exchanges, this generally occurs when all significant conditions are satisfied. Payments are received when legal title is transferred.
-Administration, Finance and Investment
The administration, finance and investment segment comprise of a number of entities whose principal activity is that of either holding investments in associate undertakings or acting as a financing arm for the Group.
No operating segments have been aggregated to form the above reportable operating segments.
The Chief Operating Decision Maker (“CODM”) of the Group is deemed to be the Board of Directors, who monitors the operating results of the business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the consolidated financial statements. The Group’s financing (including finance costs, finance income and other income) and income taxes are managed on a group basis and are not allocated to operating segments.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
49
Notes to the Financial Statements – continued
6.SEGMENT INFORMATION – continued
Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties. Intra-segment revenues are eliminated upon consolidation and reflected below.
Segments for the year-ended 31 October 2025

| Hospitality | Construction | Care | Real estate and Development | Admin,Finance and Investment | Adjustments and Eliminations | Consolidated
| EUR | EUR | EUR | EUR | EUR | EUR | EUR
External customers | 69,012,054 | 17,155,240 | 7,775,755 | 36,061,818 | 905,014 | - | 130,909,881
Inter-segment | - | 3,185,805 | 57,125 | 36,056,577 | 9,846,190 | (49,145,697) | -
Revenue | 69,012,054 | 20,341,045 | 7,832,880 | 72,118,395 | 10,751,204 | (49,145,697) | 130,909,881
Other operating Income | - | 1,432 | 11,831 | 194,709 | 65,478 | (52,976) | 220,474
Other operating costs | (29,252,748) | (12,974,299) | (2,225,363) | (22,374,144) | (1,439,238) | 9,279,485 | (58,986,307)
Staff costs | (21,909,926) | (7,156,628) | (3,563,890) | (325,235) | (4,842,617) | 1,477,427 | (36,320,869)
Adjusted EBITDA | 17,849,380 | 211,550 | 2,055,458 | 49,613,725 | 4,534,827 | (38,441,761) | 35,823,179
Depreciation | (3,885,779) | (306,476) | (71,336) | (532) | (328,809) | (7,341,267) | (11,934,199)
Gain/(loss) on revaluation | - | - | - | 967,193 | (132,854) | - | 834,339
Operating profit |  |  |  |  |  |  | 24,723,319
Share of results of associates and joint ventures |  |  |  |  |  |  | 1,536,535
Net finance costs |  |  |  |  |  |  | (9,402,237)
Profit before tax |  |  |  |  |  |  | 16,857,617
Taxation |  |  |  |  |  |  | 527,858
Profit for the year |  |  |  |  |  |  | 17,385,475
Segment assets | 190,574,014 | 19,180,185 | 53,429,307 | 609,119,716 | 243,008,455 | (585,924,871) | 529,386,806
Segment liabilities | (183,277,850) | (17,599,303) | (62,548,597) | (314,454,063) | (114,435,564) | 435,417,782 | (256,897,595)

AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
50
Notes to the Financial Statements – continued
6.SEGMENT INFORMATION – continued
Segments for the year-ended 31 October 2024

| Hospitality | Construction | Care | Real estate and Development | Admin,Finance and Investment | Adjustments and Eliminations | Consolidated
| EUR | EUR | EUR | EUR | EUR | EUR | EUR
External customers | 61,300,161 | 11,573,486 | 7,203,940 | 2,424,579 | 841,440 | - | 83,343,606
Inter-segment | - | 6,443,338 | - | 31,299,755 | 15,554,685 | (53,297,778) | -
Revenue | 61,300,161 | 18,016,824 | 7,203,940 | 33,724,334 | 16,396,125 | (53,297,778) | 83,343,606
Other operating Income | - | 23,392 | 35,346 | 95,858 | 52,270 | - | 206,866
Other operating costs | (25,083,042) | (10,788,747) | (1,712,377) | (1,309,291) | (1,589,826) | 13,121,240 | (27,362,043)
Staff costs | (19,946,846) | (5,948,306) | (3,939,352) | (329,095) | (3,991,023) | 1,999,312 | (32,155,310)
Adjusted EBITDA | 16,270,273 | 1,303,163 | 1,587,557 | 32,181,806 | 10,867,546 | (38,177,226) | 24,033,119
Depreciation | (2,951,725) | (289,446) | (34,098) | (532) | (240,479) | (6,561,642) | (10,077,922)
Loss on revaluation | - | - | - | (2,277,613) | (200,000) | - | (2,477,613)
Operating profit |  |  |  |  |  |  | 11,477,584
Share of results of associates and joint ventures |  |  |  |  |  |  | 2,104,953
Net finance costs |  |  |  |  |  |  | (7,770,523)
Profit before tax |  |  |  |  |  |  | 5,812,014
Taxation |  |  |  |  |  |  | (744,664)
Profit for the year |  |  |  |  |  |  | 5,067,350
Segment assets | 171,172,506 | 18,094,792 | 53,447,203 | 515,103,207 | 235,165,341 | (479,870,580) | 513,112,469
Segment liabilities | (165,582,402) | (16,077,945) | (63,910,305) | (242,296,299) | (106,284,199) | 329,868,239 | (264,282,911)

AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
51
Notes to the Financial Statements – continued
7.REVENUE
Revenue by category of activity:

| Group | Company
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
Construction works and building materials | 17,155,240 | 11,573,486 | - | -
Hospitality and entertainment | 68,706,161 | 60,986,343 | - | -
Care | 7,551,655 | 6,976,408 | - | -
Sale of property and real estate | 34,619,600 | 1,119,628 | - | -
Rental income | 2,190,034 | 1,951,219 | 215,325 | 135,113
Management services | 687,191 | 736,522 | 2,478,903 | 2,217,237
Dividend receivable (Note 23) | - | - | 6,656,447 | 11,171,486
| 130,909,881 | 83,343,606 | 9,350,675 | 13,523,836

Construction works and building materials, hospitality and entertainment, care, sale of property and real estate and management services fall under IFRS15 and are recognised as follows:
Timing of revenue recognition
Group

| 2025 | 2024
| EUR | EUR
At a point in time |  |
Sale of property and real estate | 34,619,600 | 1,119,628
Hospitality and entertainment | 26,628,478 | 23,007,414
Care | 2,486,818 | 2,228,547
| 63,734,896 | 26,355,589
Over time |  |
Construction works and building materials | 17,155,240 | 11,573,486
Hospitality and entertainment | 42,077,683 | 37,978,929
Care | 5,064,837 | 4,747,861
Management services | 687,191 | 736,522
| 64,984,951 | 55,036,798

AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
52
Notes to the Financial Statements – continued
8.STAFF COSTS

| Group | Company
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
Personnel costs |  |  |  |
Wages and salaries | 30,914,591 | 27,424,666 | 4,370,954 | 3,839,119
Social security costs | 1,926,311 | 1,783,587 | 150,188 | 130,543
| 32,840,902 | 29,208,253 | 4,521,142 | 3,969,662
Subcontracted labour | 3,817,179 | 3,492,922 | - | -
Salaries capitalised (i) | (1,477,426) | (1,999,312) | - | -
Salaries recharged to subsidiaries | - | - | (263,191) | (236,646)
Other short-term employee benefits (ii) | 1,140,214 | 1,453,447 | 400,453 | 137,153
| 36,320,869 | 32,155,310 | 4,658,404 | 3,870,169

(i)Capitalised salaries mostly relate to work performed on the redevelopment of the Verdala Site.
(ii)Other short-term employee benefits relate to a provision for a retention bonus programme which is applicable to all staff members subject to achieving certain criteria. This incentive aims to reward loyal and committed employees for their extended tenure with the Group.
The average number of employees (including the Directors) during the year were:

| Group | Company
| 2025 | 2024 | 2025 | 2024
Management and administration | 233 | 184 | 64 | 55
Operations and distribution | 900 | 819 | - | -
| 1,133 | 1,003 | 64 | 55

9.FINANCE INCOME

| Group | Company
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
Interest income on loans and receivables | 72,735 | 231,417 | 19,448 | 68,737
Interest income on loans to subsidiary | - | - | 2,969,258 | 2,314,511
Interest on net investment in the lease | - | - | 47,775 | 57,184
Interest income on investments | - | - | 327,894 | 530,602
| 72,735 | 231,417 | 3,364,375 | 2,971,034

AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
53
Notes to the Financial Statements – continued
10.FINANCE COSTS

| Group | Company
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
Interest on bank loans and overdrafts | 4,687,418 | 3,068,590 | - | -
Interest on debt securities in issue | 4,269,486 | 4,363,429 | 3,197,379 | 3,205,257
Interest on lease liabilities | 208,273 | 95,211 | 253,104 | 275,062
Interest on amounts payable to subsidiary | - | - | 417,625 | 133,194
Amortisation of bond issue costs | 174,641 | 179,102 | 102,838 | 102,838
Bank loan fees | 135,154 | 295,608 | - | -
| 9,474,972 | 8,001,940 | 3,970,946 | 3,716,351

11.OPERATING COSTS

| Group | Company
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
Auditors’ remuneration |  |  |  |
For audit services – statutory audit | 250,000 | 220,000 | 70,000 | 55,200
For non-audit services | 27,480 | 8,800 | 14,780 | 400
Stock consumed | 8,903,621 | 7,773,936 | - | -
Cost of constructing property sold | 24,124,089 | 208,617 | - | -
Construction costs | 10,115,343 | 5,182,861 | - | -
Movement in allowance for expected credit losses | (100,283) | (81,134) | 20,223 | 44,358
Water and electricity | 2,735,609 | 2,570,218 | 25,178 | 9,375
Repairs and maintenance | 1,103,713 | 797,601 | 61,478 | 83,361
Professional fees | 1,066,491 | 980,549 | 424,937 | 468,343
Commissions | 3,992,615 | 3,200,307 | 9,924 | 11,290
Cleaning | 977,968 | 851,080 | 8,800 | 5,577
Advertising and marketing | 601,435 | 583,310 | 94,170 | 184,951
Insurance | 420,909 | 568,031 | 73,591 | 73,265
Bank charges | 98,065 | 117,312 | 7,636 | 12,685
Licences and permits | 282,060 | 228,339 | 4,756 | -
Printing and stationery | 220,128 | 229,937 | 24,676 | 66,845
Entertainment | 392,115 | 358,786 | - | 12,180
Recruitment and other staff related expenses | 607,868 | 591,784 | 191,466 | 10,714
Other administrative costs | 3,167,081 | 2,971,709 | 397,719 | 535,710
| 58,986,307 | 27,362,043 | 1,429,334 | 1,574,254

AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
54
Notes to the Financial Statements – continued
12.KEY MANAGEMENT PERSONNEL COMPENSATION

| Group | Company
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
Directors’ compensation |  |  |  |
Short-term benefits | 1,364,562 | 1,319,761 | 1,364,562 | 1,276,761
Other key management personnel compensation |  |  |  |
Salaries and social security contributions | 1,257,671 | 1,203,053 | 652,783 | 699,287

13.TAXATION

| Group | Company
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
Current income tax |  |  |  |
-for the year | 5,563,053 | 1,870,237 | - | -
-losses surrendered to subsidiaries | - | - | (1,715,880) | (792,022)
Deferred tax through profit or loss | (6,090,912) | (1,125,573) | 27,990 | (188,929)
Income tax (credit)/charge | (527,859) | 744,664 | (1,687,890) | (980,951)
Deferred tax through other comprehensive income | 2,690,693 | 1,318,765 | - | -

| Group | Company
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
Profit before taxation | 16,857,617 | 5,812,014 | 1,908,067 | 8,661,263
-Tax thereon at 35% | 5,900,166 | 2,034,205 | 667,823 | 3,031,442
Tax effect of: |  |  |  |
Income not subject to tax | (537,787) | (736,734) | (2,329,757) | (3,271,948)
Lower rate of tax on immoveable property fair value | (219,658) | (309,186) | - | -
Lower rate of tax on rental, sale of property and other income | (10,314,139) | (1,784,491) | (15,073) | 60,542
Disallowed expenses | 4,643,559 | 1,540,870 | - | -
Other permanent differences | - | - | (10,883) | (800,987)
Income tax (credit)/charge for the year | (527,859) | 744,664 | (1,687,890) | (980,951)

AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
55
Notes to the Financial Statements – continued
14.EARNINGS PER SHARE
The earnings per share has been calculated on the Group’s profit for the year attributable to the owners of the parent of EUR15,397,937 (2024: EUR4,449,620) divided by the weighted average number of ordinary shares in issue during the year.
Group

| 2025 | 2024
| EUR | EUR
Weighted average number of shares in issue (Note 25) | 1,164,688 | 1,164,688
| EUR | EUR
Basic earnings per share | 13.22 | 3.82

AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
56
Notes to the Financial Statements – continued
15.PROPERTY, PLANT AND EQUIPMENT

Group | Land and buildings | Improvements | Plant and machinery | Motor vehicles | Furniture, fixtures and equipment | Total
| EUR | EUR | EUR | EUR | EUR | EUR
Fair value/Cost |  |  |  |  |  |
At 01.11.2023 | 282,204,879 | 29,333 | 33,731,944 | 890,268 | 62,857,228 | 379,713,652
Additions | 11,695,029 | - | 5,445,852 | 53,723 | 5,562,430 | 22,757,034
Revaluation | 7,072,651 | - | - | - | - | 7,072,651
Other transfer (ii) | (3,509,948) | - | - | - | - | (3,509,948)
At 31.10.2024 | 297,462,611 | 29,333 | 39,177,796 | 943,991 | 68,419,658 | 406,033,389
Additions | 7,366,756 | - | 5,650,832 | 384,885 | 7,189,885 | 20,592,358
Revaluation | 9,605,072 | - | - | - | - | 9,605,072
Transfer (i) | 5,430,025 | - | - | - | 1,176,497 | 6,606,522
Other transfer (ii) | (3,827,210) | - | - | - | - | (3,827,210)
At 31.10.2025 | 316,037,254 | 29,333 | 44,828,628 | 1,328,876 | 76,786,040 | 439,010,131
Depreciation |  |  |  |  |  |
At 01.11.2023 | 74,141 | 29,333 | 17,437,849 | 733,901 | 37,438,362 | 55,713,586
Provision for the year | 3,435,807 | - | 2,202,667 | 25,313 | 4,365,198 | 10,028,985
Other transfer (ii) | (3,509,948) | - | - | - | - | (3,509,948)
At 31.10.2024 | - | 29,333 | 19,640,516 | 759,214 | 41,803,560 | 62,232,623
Provision for the year | 3,934,438 | - | 2,405,666 | 103,013 | 5,425,062 | 11,868,179
Other transfer (ii) | (3,827,210) | - | - | - | - | (3,827,210)
At 31.10.2025 | 107,228 | 29,333 | 22,046,182 | 862,227 | 47,228,622 | 70,273,592
Net book value |  |  |  |  |  |
At 31.10.2025 | 315,930,026 | - | 22,782,446 | 466,649 | 29,557,418 | 368,736,539
Net book value |  |  |  |  |  |
At 31.10.2024 | 297,462,611 | - | 19,537,280 | 184,777 | 26,616,098 | 343,800,766
Net book value |  |  |  |  |  |
At 31.10.2023 | 282,130,738 | - | 16,294,095 | 156,367 | 25,418,866 | 324,000,066

(i)Details of the transfer to property, plant and equipment
The transfer of property, plant and equipment resulted from a change in use, following management’s assessment of whether the property meets, or ceases to meet, the definition of property, plant and equipment.

| Group | Company
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
Transfer from inventories to furniture, fixtures and equipment following a change in policy | 1,176,497 | - | - | -
Transfer from investment property with a view to be occupied by the Group | 5,430,025 | - | - | -

(ii)This transfer relates to accumulated depreciation at the date of revaluation, eliminated against the gross carrying amount for the asset.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
57
Notes to the Financial Statements – continued
15.PROPERTY, PLANT AND EQUIPMENT – continued
Group – continued
Valuation of land and buildings
The Group’s land and buildings are revalued by independent professional qualified valuers on a rotation basis. In the years in which an independent valuation is not obtained, management reperforms fair valuations of the properties by verifying and updating all major inputs to the last independent valuation report prepared by an external independent valuer. Internal methods are therefore aligned with those used by external valuers. On a yearly basis, management assesses each property’s change in value to determine whether the change is reasonable and holds discussions with the independent valuer, as necessary.
The surplus on revaluation was transferred to the revaluation reserve. Note 16 provides detailed information regarding the key assumptions used in performing such revaluation.
The carrying amount of land and buildings, had they been measured at cost, would have amounted to EUR120,620,420 (2024: EUR111,210,782).
Company
Furniture, fittings, and equipment
Motor vehicles
Total
EUR
EUR
EUR
Cost
At 01.11.2023
2,592,662
488,411
3,081,073
Additions
145,090
-
145,090
Disposals
-
(11,000)
(11,000)
At 31.10.2024
2,737,752
477,411
3,215,163
Additions
143,033
367,420
510,453
Disposals
-
-
-
At 31.10.2025
2,880,785
844,831
3,725,616
Depreciation
At 01.11.2023
1,592,480
458,628
2,051,108
Provision for the year
219,391
9,072
228,463
At 31.10.2024
1,811,871
467,700
2,279,571
Provision for the year
234,386
82,555
316,941
At 31.10.2025
2,046,257
550,255
2,596,512
Net book value
At 31.10.2025
834,528
294,576
1,129,104
Net book value
At 31.10.2024
925,881
9,711
935,592
Net book value
At 31.10.2023
1,000,182
29,783
1,029,965
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
58
Notes to the Financial Statements – continued
16.INVESTMENT PROPERTIES

| Group | Company
| EUR | EUR
Fair value |  |
At 31 October 2023 | 61,703,333 | 9,792,134
Additions | 2,101,426 | 720
Fair value loss | (2,477,613) | (200,000)
Transfers from inventory (i) | 115,856 | -
At 31 October 2024 | 61,443,002 | 9,592,854
Additions | 2,980,898 | 2,646,934
Fair value gain/(loss) | 834,339 | (132,854)
Transfer to property, plant and equipment (Note15) | (5,430,025) | -
At 31 October 2025 | 59,828,214 | 12,106,934

The transfers (to) / from property, plant and equipment, inventory and investment property held for sale relate to the transfer of properties resulting from a change in use, following management’s assessment of whether the property meets, or ceases to meet, the definition of investment property.
(i)Details of the transfers from inventory

| Group | Company
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
Transfer from inventory with a view to earn rentals or for capital appreciation | - | 115,856 | - | -
| - | 115,856 | - | -

AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
59
Notes to the Financial Statements – continued
16.INVESTMENT PROPERTIES – continued
Valuation process
The Group’s land and buildings are classified as either property, plant and equipment or investment property depending on their intended use. Land and buildings are revalued by independent professionally qualified architects or surveyors on a rotation basis. The architects are qualified and has experience in the category of investment properties being valued. The valuation models applied are in accordance with that recommended by the International Valuation Standards Committee and are consistent with the principles in IFRS 13.
In the years in which an independent valuation is not obtained, management reperforms fair valuations of the properties by verifying and updating all major inputs to the last independent valuation report prepared by an external independent valuer. Internal methods are therefore aligned with those used by external valuers. On a yearly basis, management assesses each property’s change in value to determine whether the change is reasonable and holds discussions with the independent valuer, as necessary.
Climate-related considerations
For investment properties measured at fair value and land and buildings at revalued amount, the Group considers the effect of physical and transition climate-related risks and whether these could impact the value of the Group’s properties.
Management has evaluated potential climate-related risks that could impact the value of the Group’s land and buildings and investment properties, and these considerations have been included within the valuation process. These include possible physical risks from climate-change such as potential damage from extreme weather events, or transitional risks such as changes in property attractiveness due to shifting climate conditions and increasing requirement for energy efficiency of buildings.
Management has concluded that, based on the information currently available as factored in the cashflow forecasts, these potential climate-related risks are not expected to have a material impact on the value of the Group’s land and buildings and investment properties.
The Group remains vigilant and committed to continuously monitoring these climate-related considerations and will adjust the land and buildings and investment property valuations as necessary to reflect any significant changes in these risks or in their potential impact on the Group.
Changes in valuation techniques
The valuation technique used to determine the fair value of the Verdala serviced apartments was changed from the residual method approach in the prior year to the income capitalisation approach in the current year. This was deemed to be the most appropriate approach by the independent valuer and it aligns with the intended use of the property to be operated as serviced apartments annexed to the hotel.
The change in valuation method is applied prospectively since it presents a change in estimate.
The Group applied the same valuation techniques used in the previous year for the rest of the properties.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
60
Notes to the Financial Statements – continued
16.INVESTMENT PROPERTIES – continued
Highest and best use
The current use of the Group and the Company’s investment properties measured at fair value is considered to be the highest and best use except for part of Palazzo Capua which management intends to refurbish and lease as office space. The Group has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.
Fair value hierarchy
The Group and Company’s property is classified as Level 3 in the fair value hierarchy. The different levels in the fair value are defined in Note 4.8.
The Group and Company’s policy is to recognise transfers into and out of fair value hierarchy levels as of the date of the event or change in circumstances that caused the transfer. There were no transfers between levels during the year.
All gains and losses for recurring fair value measurements categorised within Level 3 of the fair value hierarchy, recorded in the Group’s Statement of Profit or Loss and Other Comprehensive Income, amount to a net gain of EUR10,439,411 (2024: EUR2,477,613). The Company recorded a loss on fair value measurements amounting to EUR132,854 (2024: EUR200,000). These are attributable to changes in unrealised gains or losses relating to investment property held at the end of the reporting period.
Group
Details of the investment properties and land and buildings and information about their fair value hierarchy as at the end of the year:
(i)Investment Properties

Type of Property | Level 3 | Total | Date of Valuation
| EUR | EUR
Land | 19,055,945 | 19,055,945 | 31/10/2022
Commercial property | 9,208,773 | 9,208,773 | 31/10/2024
Commercial property | 20,198,496 | 20,198,496 | 31/10/2025
Residential | 11,365,000 | 11,365,000 | 31/10/2025
Total | 59,828,214 | 59,828,214 |

(ii)Land and Buildings

Type of Property | Level 3 | Total | Date of Valuation
| EUR | EUR
Commercial property | 309,047,254 | 309,047,254 | 31/10/2025
Commercial property | 6,990,000 | 6,990,000 | 31/10/2024
Total | 316,037,254 | 316,037,254 |

AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
61
Notes to the Financial Statements – continued
16.INVESTMENT PROPERTIES – continued
Group – continued
Valuation techniques used to derive Level 3 fair value
For investment properties categorised under Level 3 of the fair value hierarchy, the valuation was determined by a combination of the market approach, the replacement cost approach and the income capitalisation approach as applicable.
(i)Investment Properties

Type of Property | Valuation Technique | Inputs | Sensitivity
Commercial property amounting to EUR2,210,000 (2024: EUR2,210,000) | Income capitalisation approach | The valuation relies on estimated commercial rental rates and yearly return of the various components of the existing building capitalised at a rate of 7% (2024: 7%). Annual rental rate of EUR350 per sqm (2024: EUR350) is assumed and EUR276,000 (2024: EUR276,000) for the ancillary property. | The higher the capitalisation rate, the lower the fair value. The higher the rental income and growth rate the higher the fair value.
Commercial property amounting to EUR13,851,010 (2024: EUR13,187,881) | Income capitalisation approach | The inputs used to calculate the total value of the property is an annual return in the range of EUR55 and EUR419 per square meter (2024: in the range of EUR40 and EUR268) at a capitalisation rate of 5.8%-6% (2024: 6%). | The higher the capitalisation rate, the lower the fair value. The higher the rental income and growth rate the higher the fair value.
Land amounting to EUR19,055,945(2024: EUR19,008,995) | Income capitalisation approach | The inputs used to calculate the total value of the property on completion is an annual return of EUR145 per square meter (2024: EUR145) at a capitalisation rate of 7% (2024: 7%) less costs to implement. | The higher the capitalisation rate, the lower the fair value. The higher the annual return per square meter the higher the fair value.
Commercial property amounting to EUR6,998,773(2024: EUR6,922,722) | Income capitalisation approach | The inputs used to calculate the total value of the property is an annual return of EUR205 (2024: EUR205) per square meter at a capitalisation rate of 5.5% (2024: 6.5%) less costs to implement. | The higher the capitalisation rate, the lower the fair value. The higher the annual return per square meter the higher the fair value.
Residential property amounting to EUR1,760,000 (2024: EUR612,000) | Market approach | The valuation of investment property is based on market rates for comparable advertised properties taking into account the size, fit out of the subject units, location of the property and current situation of the residential and commercial property market. | The higher the market rates, the higher the fair value.
Residential property amounting to EUR4,030,000 (2024: EUR5,319,379) | Replacement cost approach | This method takes into account the actual physical building fabric constituting the facility, together with an estimated land value. The valuation relies on estimated going rates of the various components of the existing building. | The higher the rates for construction, finishings, services and fittings the higher the fair value.
Residential property amounting to EUR5,575,000 (2024 EUR5,984,000) | Market approach | The valuation of investment property is based on market rates for comparable advertised properties taking into account the size, fit out of the subject units, location of the property and current situation of the residential and commercial property market. | The higher the market rates, the higher the fair value.
Commercial property amounting to EUR2,646,934 | Market approach | Market transaction. | The higher the market rates, the higher the fair value
Commercial property amounting to EUR3,700,552 (2024: EUR3,700,000) | Income capitalisation approach | The inputs used to calculate the total value of the property is an annual return of EUR47-EUR187 per square meter (2024: EUR100-EUR300) at a capitalisation rate of 5.8% (2024: 5.5%). | The higher the capitalisation rate, the lower the fair value. The higher the rental income and growth rate the higher the fair value.

AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
62
Notes to the Financial Statements – continued
16.INVESTMENT PROPERTIES – continued
Group – continued
Valuation techniques used to derive Level 3 fair value – continued
(ii)Land and Buildings

Type of Property | Valuation Technique | Inputs | Sensitivity
Commercial property amounting to EUR9,078,841* (2024: EUR8,231,321) | Income capitalisation approach | The inputs used to calculate the total value of the property is an annual return in the range of EUR110 and EUR169 per square meter (2024: EUR40 and EUR270 per square meter) at a capitalisation rate of 5.8% (2024: 5.75% to 6%). | The higher the capitalisation rate, the lower the fair value. The higher the rental income and growth rate the higher the fair value.
Commercial property amounting to EUR45,221,191(2024: EUR42,918,024) | Average of profits method; income capitalisation approach and replacement cost approach | Profits method: stabilised EBIDTA of EUR1,905,366 (2024: EUR1,601,381), capitalisation yield of 5.5% (2024: 5.5%), land appreciation of 4.5% per annum (2024: 4.5%), discount rate for commercial property sale at termination 5% (2024: 5%) and EBITDA multipliers ranging between 11.5X to 16X (2024: 11.5X to 16X).Income capitalisation approach: stabilised EBIDTA of EUR1,905,366 (2024: EUR1,601,381), capitalisation yield of 5.5% (2024: 5.5%), land appreciation of 4.5% per annum (2024: 4.5%), discount rate for commercial property sale at termination 5% (2024: 5%) and discount rate for future income ranging 7.5%-11.83% (2024: 7.5%-11.83%).Replacement cost approach: This method takes into account the actual physical building fabric constituting the facility, together with an estimated land value. The valuation relies on estimated going rates of the various components of the existing building. | Profits method: The higher the EBITDA and capitalisation yield, the higher the fair value.Income capitalisation approach: The higher the EBITDA and capitalisation yield, the higher the fair value. Replacement cost approach: The higher the rates for construction, finishings, services and fittings, the higher the fair value.
Commercial property amounting to EUR11,773,650* (2024: EUR6,622,583) | Income capitalisation approach | Income capitalisation approach: total projected stabilised EBITDA of EUR2,756,973 (2024: EUR2,049,732) using an average growth of 3% (2024: 3%) and discount rate of future income of 10.5-11.83% (2024: 11.83%). | The higher the capitalisation rate, the lower the fair value. The higher the rental income and growth rate the higher the fair value.
Commercial property amounting to EUR231,262,208 (2024: EUR219,753,362) | Income capitalisation approach | Income capitalization approach: total average projected stabilised EBITDA of EUR28,263,000 (2024: EUR24,695,000) using an average growth of 2%-3% (2024: 3%), discount rate of 9.48%-10.5% (2024: 9.48%-11%). | The higher the EBITDA and capitalisation yield, the higher the fair value.
Commercial property amounting to EUR11,711,364 (2024: EUR12,947,321) | Income capitalisation approach** | The inputs used to calculate the total value of the property is an average annual net return of EUR188 per square meter at a capitalisation rate of 6%. | The higher the capitalisation rate, the lower the fair value. The higher the rental income and growth rate the higher the fair value.

AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
63
Notes to the Financial Statements – continued
16.INVESTMENT PROPERTIES – continued
Group – continued
Valuation techniques used to derive Level 3 fair value – continued
(ii)Land and Buildings – continued

Type of Property | Valuation Technique | Inputs | Sensitivity
Commercial property amounting to EUR6,990,000 (2024: EUR6,990,000) | Income capitalisation approach | The valuation relies on estimated commercial rental rates and yearly return of the various components of the existing building capitalised at a rate of 7% (2024: 7%). Annual rental rate of EUR350 per sqm (2024: EUR350 per sqm) is assumed and EUR276,000 (2024: EUR276,000) for the ancillary property. | The higher the capitalisation rate, the lower the fair value. The higher the rental income and growth rate the higher the fair value.

*During the year, EUR5,430,025 was transferred from investment property to owner-occupied property as disclosed in Details of the transfers (to)/from property, plant and equipment in Note 15.
**During the year, the valuation technique used to determine the revalued amount of this commercial property was changed as disclosed in Changes in valuation techniques in Note 16.
Company
Details of the investment properties and information about their fair value hierarchy as at the end of the year:
Type of Property
Level 3
Total
Date of
EUR
EUR
Valuation
Commercial property
6,346,934
6,346,934
31/10/2025
Residential
5,760,000
5,760,000
31/10/2025
Total
12,106,934
12,106,934
Valuation techniques used to derive Level 3 fair value
For investment properties categorised under Level 3 of the fair value hierarchy, the valuation was determined by a combination of the market approach and the income capitalisation approach as applicable.
Type of Property
Valuation Technique
Inputs
Sensitivity
Commercial property amounting to EUR3,700,000 (2024: EUR3,700,000)
Income capitalisation approach
The inputs used to calculate the total value of the property is an annual return of EUR47-EUR187 per square meter (2024: EUR100-EUR300) at a capitalisation rate of 5.8% (2024: 5.5%).
The higher the capitalisation rate, the lower the fair value. The higher the rental income and growth rate the higher the fair value.
Residential property amounting to EUR4,000,000 (2024: EUR5,280,854)
Replacement cost approach
This method takes into account the actual physical building fabric constituting the facility, together with an estimated land value. The valuation relies on estimated going rates of the various components of the existing building.
The higher the rates for construction, finishings, services and fittings the higher the fair value.
Commercial property amounting to EUR2,646,934
Market approach
Market transaction.
The higher the market rates, the higher the fair value
Residential property amounting to EUR1,760,000 (2024: EUR612,000)
Market approach
The valuation of investment property is based on market rates for comparable advertised properties taking into account the size, fit out of the subject units, location of the property and current situation of the residential and commercial property market.
The higher the market rates, the higher the fair value.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
64
Notes to the Financial Statements – continued
17.LEASES
Group as a lessor
The operating leases relating to investment properties owned by the Group have terms between 1 and 20 years. The lessee does not have the option to purchase the property at the expiry of the lease period. The income earned under the operating lease amounted to EUR2,190,034 (2024: EUR1,951,219).
At the end of the reporting period, the lessee had outstanding commitments under non-cancellable operating leases, which fall due as follows:

| 2025 | 2024
| EUR | EUR
Within one year | 1,616,654 | 1,713,726
Between two and five years | 3,434,095 | 4,143,948
Over five years | 673,664 | 839,450
| 5,724,413 | 6,697,124

Group and Company as a lessee
The Company has lease contracts with its subsidiaries for its Head Office and a sublease contract for Palazzo Capua. The lease contracts have terms between ten to twenty years.
In 2025, the Company terminated its lease agreement with its subsidiary, AX Construction Limited, for the use of a warehouse. During the same year, the Company entered into a new lease arrangement with Skyline Developments Limited, another subsidiary, for car spaces and a garage located at its Head Office in Mosta.
Furthermore, on 21 November 2024, AX Hotel Operations p.l.c., a subsidiary of the Group, was formally recognised by the Lands Authority as the new emphyteuta of land in Valletta for the remaining term of the 45-year temporary emphyteusis that commenced on 12 December 2017. This recognition effectively terminated the previous lease agreement with the former emphyteuta for the same property.
On 22 October 2024, Palazzo Merkanti Limited, a subsidiary of the Group, was formally recognised by the Lands Authority as the new emphyteuta of land in Valletta, which includes the Roselli Hotel, for the remaining term of the 150-year temporary emphyteusis which commenced on 24 May 1985.
Moreover, during 2024, the Group entered into a new lease agreement that grants the Group temporary emphyteusis on the land where the Qawra Lido, operated by the Group’s Hospitality division, is located, for a term of sixty-five years.
The carrying amounts of right-of-use assets recognised and the movements during the year are as follows:

| Group | Company
| EUR | EUR
Opening balance at 1 November 2023 | 393,679 | 5,284,855
Recognition of a new lease | 3,362,158 | -
Depreciation on right-of-use assets | (48,938) | (340,587)
Closing balance at 31 October 2024 | 3,706,899 | 4,944,268
Recognition of a new lease | 542,184 | 412,221
Termination of lease | (361,761) | (386,599)
Depreciation on right-of-use assets | (66,020) | (342,316)
Closing balance at 31 October 2025 | 3,821,302 | 4,627,574

AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
65
Notes to the Financial Statements – continued
17.LEASES - continued
Group and Company as a lessee – continued
The carrying amounts of lease liabilities and the movements during the year are as follows:

| Group | Company
| EUR | EUR
Opening balance at 1 November 2023 | 394,321 | 6,436,150
Recognition of new lease | 3,362,157 | -
Accretion of interest | 95,211 | 275,062
Amounts set-off in respect of payments | (174,953) | (631,345)
Closing balance at 31 October 2024 | 3,676,736 | 6,079,867
Current | 54,549 | 374,456
Non-current | 3,622,187 | 5,705,411
Closing balance at 31 October 2024 | 3,676,736 | 6,079,867
Recognition of new lease | 122,184 | 412,221
Termination of lease | (374,736) | (439,577)
Accretion of interest | 208,273 | 253,104
Amounts set-off in respect of payments | (162,735) | (632,720)
Closing balance as at 31 October 2025 | 3,469,722 | 5,672,895
Current | 30,065 | 398,266
Non-current | 3,439,657 | 5,274,629
Closing balance as at 31 October 2025 | 3,469,722 | 5,672,895

The Company subleases the Palazzo Capua to a subsidiary. As a result, the Company has a net investment in the lease of EUR1,063,394 (2024: EUR1,303,744), out of which EUR250,142 (2024: EUR240,350) is a current balance.
18.INVESTMENT IN SUBSIDIARIES
Company
Cost
EUR
At 1 November 2023
82,472,590
Disposal (Note i)
(3,605,657)
Increase in capital contributions (Note ii)
9,000,000
At 31 October 2024
87,866,933
New investments (Note iii)
20,000
Increase in capital contributions (Note ii)
1,565,000
At 31 October 2025
89,451,933
These financial statements comprise the results and position of the Group and the Company at 31 October 2025, which is a common year-end of all subsidiaries forming part of the Group. The list of consolidated subsidiaries is disclosed in Note 3.
(i)During 2024, the Company sold two of its subsidiaries, AX Investments p.l.c. and Harbour Connections Limited, to AX Finance Limited and Verdala Mansions Limited, two other subsidiaries, respectively. The Company sold the shares held in AX Investments p.l.c. for a consideration of EUR4,999,996. The cost as at the date of disposal amounted to EUR2,795,933, resulting in a gain on disposal of investment in subsidiary amounting to EUR2,204,063. The Company sold the shares held in Harbour Connections Limited at cost, for an amount of EUR768,474. Moreover, Prime Buildings Limited, another subsidiary of the Company, was dissolved and consequently voluntarily wound up. The cost of the Company’s investment in Prime Buildings Limited as at the date of liquidation amounted to EUR41,250. Upon liquidation, the minority interest waived their right for the share capital and dividend distribution in favour of the Company (Note 4).
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
66
Notes to the Financial Statements – continued
18.INVESTMENT IN SUBSIDIARIES – continued
Company – continued
(ii)During the year, the Company made capital contributions of EUR1,565,000 (2024: EUR9,000,000) in subsidiaries (Note 33).
(iii)During the year, two new companies were incorporated, AX Developments Limited and AX IP Holdings Limited. Both companies are incorporated in Malta with registered office at AX Group, AX Business Centre, Triq id-Difiza Civili, Mosta, MST 1741, Malta.
19.INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
Group

| EUR
At 31 October 2023 | 7,889,009
Share of results | 2,104,953
Dividends | (1,348,025)
At 31 October 2024 | 8,645,937
Share of results | 1,536,535
Dividends | (443,751)
At 31 October 2025 | 9,738,721

The Group has a 36% interest and voting rights in Valletta Cruise Port p.l.c. (2024: 36%), 33% interest and voting rights in Imselliet Solar Limited (2024: 33%) and 50% interest and voting rights in Hardrocks Estates Limited (2024: 50%). The entities are privately owned entities registered and operating in Malta and are not listed on any public exchange. The Group’s interest in Valletta Cruise Port p.l.c., Imselliet Solar Limited and Hardrocks Estates Limited is accounted for using the equity method in the consolidated financial statements.
The Group’s carrying amount of the investments includes goodwill amounting to EUR1,449,613 (2024: EUR1,449,613) resulting upon acquisition of an interest at an amount higher than its book value.
The following table illustrates the summarised financial information of the Group’s investment in these entities:

| 2025 | 2024
| EUR | EUR
Current assets | 8,586,917 | 7,253,566
Non-current assets | 50,811,849 | 52,100,417
Current liabilities | 6,993,772 | 8,274,608
Non-current liabilities | 29,774,750 | 31,482,206
Revenue | 20,507,046 | 19,659,547
Profit for the year | 4,324,264 | 5,577,772

The associates had no contingent liabilities or capital commitments at 31 October 2025 and 31 October 2024.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
67
Notes to the Financial Statements – continued
20.LOANS RECEIVABLE AND OTHER FINANCIAL ASSETS
Group

| Loans receivable from shareholders | Loans receivable from other related party | Total
| EUR | EUR | EUR
At 31 October 2023 | 1,275,155 | 900,000 | 2,175,155
Repayment of loan | (886,263) | (900,000) | (1,786,263)
At 31 October 2024 | 388,892 | - | 388,892
Repayment of loan | - | - | -
At 31 October 2025 | 388,892 | - | 388,892

Loans to shareholders are unsecured, bear an interest rate of 5% and are repayable by 31 December 2027. The entity determines the expected credit loss allowance on these loans based on a probability of default of 0.16% and a loss given default of 100%.
Company
Loans Receivable
Investment in debt securities
EUR
EUR
Cost
Fair Value
At 1 November 2023
42,836,082
16,813,945
New loan origination
19,082,269
-
Repayment of loan
(886,263)
-
Interest on loans transferred from current
1,551,389
-
Disposal of debt securities
-
(6,169,000)
Fair value movement
-
435,447
At 31 October 2024
62,583,477
11,080,392
New loan origination
2,810,442
-
Interest on loan
2,896,446
-
Disposal of debt securities
-
(4,051,200)
Fair value movement
-
303,242
At 31 October 2025
68,290,365
7,332,434
Expected credit loss
At 1 November 2023
56,271
-
Movement for the year
41,900
-
At 31 October 2024
98,171
-
Movement for the year
14,006
-
At 31 October 2025
112,177
-
Net book value
At 31 October 2025
68,178,188
7,332,434
Net book value
At 31 October 2024
62,485,306
11,080,392
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
68
Notes to the Financial Statements – continued
20.LOANS RECEIVABLE AND OTHER FINANCIAL ASSETS - continued
Company – continued
Loans receivable
Loans receivable include loans to shareholders amounting to EUR388,892 (2024: EUR388,892) which are unsecured, bear an interest rate of 5% and are repayable by 31 December 2027. The remaining balance relates to subsidiary undertaking loans, which are unsecured, carry interest at of 5.03% to 6.25% (2024: 4.82% to 6.25%) and are repayable between 31 October 2029 to 31 October 2033. The entity determines the expected credit loss allowance on the Group undertakings loans based on a probability of default of 0.16% and a loss given default of 100%.
Investment in debt securities
These relate to the allocation of EUR21,645,400 of bonds issued by AX Real Estate p.l.c. to the Company through the part conversion of the existing intra-group loan in 2022. Fair values of these debt instruments are determined by reference to published price quotations in an active market. The carrying amount of the debt securities held at 31 October 2025 amounted to EUR7,863,200 (2024: EUR11,914,400).
21.INVENTORIES

| Group | Company
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
Property held for development and re-sale | 54,270,813 | 64,304,393 | 3,239,354 | 3,179,131
Raw materials and consumables | 992,786 | 1,929,741 | - | -
| 55,263,599 | 66,234,134 | 3,239,354 | 3,179,131

During the current year, EUR33 million (2024: EUR8 million) was recognised as an expense for inventories carried at cost. This is recognised as part of operating expenses (Note 11).
Capitalised borrowing costs
In 2024, the Group capitalised borrowing costs amounting to EUR1,445,247 into inventory in relation to the Verdala residential project.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
69
Notes to the Financial Statements – continued
22.TRADE AND OTHER RECEIVABLES

| Group | Company
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
Trade receivables (i) | 8,518,605 | 6,599,302 | 42,917 | 72,171
Provision for doubtful debts (i) | (248,786) | (215,266) | - | -
Allowance for ECL on trade receivables (i) | (136,176) | (234,554) | - | -
| 8,133,643 | 6,149,482 | 42,917 | 72,171
Amounts owed by associates (ii) | 27 | 115,102 | - | -
Amounts owed by other related parties (ii) | 60,131 | 41,587 | 49,846 | 38,549
Amounts owed by subsidiaries (ii) | - | - | 13,862,959 | 7,484,382
Shareholders’ current account (ii) | 4,072,257 | 2,240,833 | 3,160,379 | 2,236,623
Allowance for ECL on balances owed by related parties | - | - | (17,557) | (11,340)
Advanced payments to suppliers (iii) | 95,554 | 1,415,992 | 10,750 | -
Indirect taxation | - | 486,040 | - | -
Other receivables | 4,411,022 | 3,270,480 | 2,875 | 2,371,000
Prepayments and accrued income | 4,243,744 | 3,987,706 | 251,027 | 350,779
| 21,016,378 | 17,707,222 | 17,363,196 | 12,542,163

(i)Trade and other receivables are non-interest bearing and repayable on 60 day terms.
Impairment of financial assets – trade receivables
The entity applies the simplified model of recognising lifetime expected credit losses for all trade receivables as these items do not have a significant financing component. In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess shared credit risk characteristics. They have been grouped based on the days past due and also according to the geographical location of customers. The expected credit losses for trade receivables as at 31 October 2025 was determined as follows:
2025

|  | Current | >30 days | >60 days | >90 days | >180 days | >365 days | Total
Expected credit loss rate | % | 0.02-1.25 | 0.04-1.81 | 0.07-16.77 | 0.11-29.10 | 0.39-33.18 | 100 |
Gross carrying amount | EUR | 5,812,856 | 1,180,664 | 964,561 | 34,362 | 341,751 | 184,411 | 8,518,605
Lifetime expected credit loss | EUR | 25,193 | 20,847 | 26,142 | 19,964 | 12,780 | 31,250 | 136,176
Provision for doubtful debts | EUR | - | - | - | - | 248,786 | - | 248,786

2024

|  | Current | >30 days | >60 days | >90 days | >180 days | >365 days | Total
Expected credit loss rate | % | 0.02-1.25 | 0.04-1.95 | 0.07-94.66 | 0.11-100 | 0.39-100 | 100 |
Gross carrying amount | EUR | 2,813,220 | 1,489,271 | 734,497 | 565,076 | 465,071 | 532,167 | 6,599,302
Lifetime expected credit loss | EUR | 56,933 | 24,133 | 20,470 | 53,879 | 49,381 | 29,758 | 234,554
Provision for doubtful debts | EUR | - | - | - | - | 215,266 | - | 215,266

(ii)Amounts owed by associates, other related parties, subsidiaries and shareholders are unsecured, interest-free and have no fixed date of repayment. Amounts owed by associates represent dividends receivable.
(iii)Advanced payments to suppliers relate to preliminary payments executed by the Group to suppliers in respect of its ongoing projects as per contract terms. The Group has already settled these payments, and it is expected that the counterparties will fulfil their contractual obligations as a compensation for these advances.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
70
Notes to the Financial Statements – continued
23.CASH AND CASH EQUIVALENTS
Cash and cash equivalents included in the cash flow statement comprise the following:

| Group | Company |
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
Cash at bank and in hand | 10,593,161 | 10,569,146 | 296,372 | 183,596
Bank overdrafts (Note 27) | (1,956,991) | (1,224,400) | - | -
| 8,636,170 | 9,344,746 | 296,372 | 183,596

The Group and the Company engaged in the following significant non-cash operating, investing and financing activities during the year:

| Group | Company
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
Non-cash operating activities |  |  |  |
Property sold to shareholder (Note 33) | - | 1,000,000 | - | -
Non-cash financing activities |  |  |  |
Dividend declared by Company | - | 5,000,000 | - | 5,000,000
Dividend declared by subsidiary (Note 7) | - | - | 6,656,447 | 11,171,486
Increase in capital contribution (Note 18) | - | - | 1,565,000 | 9,000,000

24.CONSTRUCTION CONTRACTS
As at year-end, retentions held by customers for contract works amounted to EUR3,018,364 (2024: EUR2,453,027).
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
71
Notes to the Financial Statements – continued
25.CALLED UP ISSUED SHARE CAPITAL
Company and Group

| 2025 | 2024
| EUR | EUR
Authorised |  |
300,000,000 ordinary shares of EUR1 each | 300,000,000 | 300,000,000
Called up issued and fully paid up |  |
1,164,688 (2024: 1,164,688) ordinary shares of EUR1 each | 1,164,688 | 1,164,688

Each ordinary share gives the right to one vote, participates equally in profits distributed by the Company and carries equal rights upon the distribution of assets by the Company in the event of a winding up.
Revaluation reserve
The Company’s revaluation reserve arises on the revaluation of investment properties and land and buildings net of deferred tax. When the revalued property is sold, the portion of the property revaluation reserve that relates to that asset, and is effectively realised, is transferred directly to retained earnings.
Retained earnings
The reserve represents accumulated retained profits that are available for distribution to the Company’s shareholders.
Dividend paid
During the year, AX Real Estate p.l.c., a subsidiary of the Company, declared interim dividends amounting to EUR640,201 (2024: EUR531,976) due to non-controlling interest.
In September 2024, the Company paid an interim dividend of EUR4.29 per ordinary share, amounting to EUR5,000,000.
26.TRADE AND OTHER PAYABLES

| Group | Company
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
Trade payables (i) | 13,365,286 | 11,271,918 | 155,513 | 103,190
Other payables | 4,587,424 | 6,879,162 | 2,273,502 | 2,417,397
Indirect taxation and social security | 1,319,724 | - | 351,881 | 220,187
Accruals and deferred income (ii) | 34,836,151 | 33,889,528 | 779,152 | 363,696
| 54,108,585 | 52,040,608 | 3,560,048 | 3,104,470
Current | 42,584,863 | 39,522,736 | 2,335,067 | 1,704,479
Non-current | 11,523,722 | 12,517,872 | 1,224,981 | 1,399,991
| 54,108,585 | 52,040,608 | 3,560,048 | 3,104,470

AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
72
Notes to the Financial Statements – continued
26.TRADE AND OTHER PAYABLES - continued
(i)Trade payables are non-interest bearing and repayable within a 60-day term.
(ii)Accruals and deferred income relate to EUR11.6 million (2024: EUR12.7 million) upfront receipts from retirement home residents which will be recognised as revenue when the performance obligation is satisfied; deposits received on properties sold under a promise of sale amounting to EUR7.4 million (2024: EUR8.1 million) and other accruals in the normal course of business.
27.BANK BORROWINGS

| Group | Company
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
Bank loans | 80,734,800 | 92,300,721 | - | -
Bank overdrafts (Note 23) | 1,956,991 | 1,224,400 | - | -
| 82,691,791 | 93,525,121 | - | -

Bank loans and overdrafts are repayable as follows:

| Group | Company
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
On demand or within one year | 28,801,274 | 29,903,372 | - | -
Between two and five years | 23,355,079 | 24,321,821 | - | -
After five years | 30,535,438 | 39,299,928 | - | -
| 82,691,791 | 93,525,121 | - | -
Current | 28,801,274 | 29,903,372 | - | -
Non-current | 53,890,517 | 63,621,749 | - | -
| 82,691,791 | 93,525,121 | - | -

During the year, the Company obtained a sanctioned letter from a local banking institution for a loan of EUR10 million to be used for general corporate funding. Term of the loan is of 7 years from first drawdown. The loan is undrawn as at year-end.
The Group has aggregate bank facilities of EUR101,802,013 (2024: EUR113,497,761) of which EUR19,112,873 (2024: EUR19,977,729) were undrawn as at the reporting date. These facilities are secured by general hypothecs over the group assets, by special hypothecs over various immovable properties, by pledges over various insurance policies and by personal guarantees of the ultimate controlling party. They bear interest of 3.9% to 6% per annum (2024: 3.9% to 6%).
Bank borrowings amounting to EUR41.9 million are subject to annual covenant tests at 31 October, including minimum Debt Service Coverage Ratio (“DSCR”) and interest coverage ratios and a maximum debt‑to‑equity ratio. Based on the Group’s current financial position and forecasts, management has no indications of difficulty in complying with these covenants.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
73
Notes to the Financial Statements – continued
28.OTHER FINANCIAL LIABILITIES

| Group | Company
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
Amounts owed to subsidiaries (i) | - | - | 21,239,501 | 16,048,941
Amounts owed to shareholders (ii) | - | - | 129,305 | 146,326
Amounts owed to other related parties (iii) | 732,395 | 8,449 | - | -
Total other financial liabilities | 732,395 | 8,449 | 21,368,806 | 16,195,267
Current | 732,395 | 8,449 | 5,976,847 | 12,282,994
Non-current | - | - | 15,391,959 | 3,912,273
Total other financial liabilities | 732,395 | 8,449 | 21,368,806 | 16,195,267

(i)Amounts owed to subsidiaries classified as current are unsecured, interest free and have no fixed date of repayment. Amounts owed to subsidiaries classified as non-current are unsecured, bear an interest rate of 5.2% and are repayable by 31 December 2030.
(ii)Amounts owed to shareholders are unsecured, interest free and have no fixed date of repayment.
(iii)Amounts owed to other related parties are unsecured, interest-free and have no fixed date of repayment.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
74
Notes to the Financial Statements – continued
29.DEBT SECURITIES IN ISSUE
Group and Company
In November 2023, AX Group p.l.c. issued an aggregate principal amount of EUR40,000,000 bonds (2023-2033), having a nominal value of EUR100 each, bearing interest at the rate of 5.85% per annum, to redeem the EUR40 million AX Investments p.l.c. bond which matured on 6 March 2024. These bonds are unsecured and subject to the terms and conditions in the prospectus dated 26 September 2023. The bonds are listed on the Official Companies List of the Malta Stock Exchange. The quoted market price as at 31 October 2025 for the 5.85% bonds (2023 – 2033) was EUR103.3 (2024: EUR106). The fair value of the bond as at 31 October 2025 amounted to EUR41,320,000 (2024: EUR42,400,000). The carrying value of the bond as at 31 October 2025 amounted to EUR39,442,720 (2024: EUR39,376,862). Interest on the bonds is due and payable annually in arrears on 7 November of each year at the above-mentioned rate.
During 2022, AX Real Estate p.l.c., a subsidiary of the Company, issued an aggregate principal amount of EUR40,000,000 (2022 – 2032), having a nominal value of EUR100 each, bearing interest at the rate of 3.5% per annum. These bonds are unsecured and subject to the terms and conditions in the prospectus dated 6 December 2021. The bonds are listed on the Official Companies List of the Malta Stock Exchange. The quoted market price as at 31 October 2025 for the 3.5% bonds (2022 – 2032) was EUR93.25 (2024: EUR93). The fair value of the bonds as at 31 October 2025 amounted to EUR37,300,000 (2024: EUR37,200,000). The carrying value of the bond as at 31 October 2025 amounted to EUR39,639,847 (2024: EUR39,611,543). The amount is made up of the bond issue of EUR18,354,600 net of the bond issue costs which are being amortised over the lifetime of the bonds and of EUR21,645,400 which were assigned to AX Group p.l.c. as described above. Interest on the bonds is due and payable annually in arrears on 7 February of each year at the above-mentioned rate.
During 2020, AX Group p.l.c. issued an aggregate principal amount of EUR25,000,000 bonds, split in two tranches of EUR15,000,000 (2020 – 2026) and EUR10,000,000 (2020 – 2029), having a nominal value of EUR100 each, bearing interest at the rate of 3.25% and 3.75% respectively per annum. These bonds are unsecured and subject to the terms and conditions in the prospectus dated 22 November 2019. The bonds are listed on the Official Companies List of the Malta Stock Exchange. The quoted market price as at 31 October 2025 for the 3.25% bonds (2020 – 2026) was EUR99.1 (2024: EUR97.99) and for the 3.75% bonds (2020 – 2029) was EUR99 (2024: EUR95). The fair value of the bonds as at 31 October 2025 amounted to EUR14,865,000 (2024: EUR14,698,500) and EUR9,900,000 (2024: EUR9,500,000) respectively, which amounts to an aggregated fair value of EUR24,765,000 (2024: EUR24,198,500). The carrying value of the bonds as at 31 October 2025 amounted to EUR24,847,114 (2024: EUR24,810,134). The amount is made up of the bond issue of EUR25,000,000 net of the bond issue costs which are being amortised over the lifetime of the bonds.
As at year-end, the Group had a balance of EUR94,529,311 (2024: EUR90,671,876) from the bond issues. The fair value of the bonds issued as at 31 October 2025 amounted to EUR103,385,000 (2024: EUR104,295,500). The amount is made up of the bond issues of EUR97,136,800 net of bond issue costs which are being amortised over the life of the bonds.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
75
Notes to the Financial Statements – continued
29.DEBT SECURITIES IN ISSUE – continued
Group

| 2025 | 2024
| EUR | EUR
At beginning of year | 90,671,876 | 85,442,763
Bonds issued during the year (Note i) | 3,682,794 | 45,739,007
Bond matured during the year | - | (40,000,000)
Bond issue costs | - | (688,996)
Bond issue costs amortisation for the year | 174,641 | 179,102
| 94,529,311 | 90,671,876
Accrued interest | 3,911,729 | 3,810,761
At end of year | 98,441,040 | 94,482,637
Current | 3,911,729 | 3,810,761
Non-current | 94,529,311 | 90,671,876
| 98,441,040 | 94,482,637

(i)Bonds issued during the year relate to the sale of EUR3.7 million of AX Real Estate p.l.c. debt instruments by AX Group p.l.c. in the secondary market. Bonds issued during 2024 relate to new bond issue of EUR40 million issued by AX Group p.l.c. and sale of EUR5.7 million of AX Real Estate p.l.c. debt instruments by AX Group p.l.c. in the secondary market.
Company
2025
2024
EUR
EUR
At beginning of year
64,186,996
24,773,154
Bonds issued during the year
-
40,000,000
Bond issue costs
-
(688,996)
64,186,996
64,084,158
Bond issue costs amortised for the year
102,838
102,838
64,289,834
64,186,996
Accrued interest
3,084,349
3,089,469
At end of year
67,374,183
67,276,465
Current
3,084,349
3,089,469
Non-current
64,289,834
64,186,996
67,374,183
67,276,465
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
76
Notes to the Financial Statements – continued
30.DEFERRED TAX LIABILITIES
As at year-end, unabsorbed tax losses and other temporary differences for which no asset is recognised in the Group amounted to EUR8,523,792 (2024: EUR8,586,157).

| Group | Company
| 2025 | 2024 | 2025 | 2024
| EUR | EUR | EUR | EUR
Arising on: |  |  |  |
Excess of capital allowances over depreciation | (10,590) | (62,679) | (272,216) | (282,730)
Provision for doubtful debts | (239,908) | (251,958) | (45,407) | (38,329)
Provision for obsolete stock | (9,842) | (9,842) | - | -
Unabsorbed tax losses and capital allowances | (11,509,336) | (9,747,018) | (239,567) | (120,159)
Revaluation of land and buildings and investment properties | 28,949,557 | 30,567,489 | 912,488 | 716,000
Net lease position | (30,740) | 53,368 | 6,325 | 58,851
| 17,149,141 | 20,549,360 | 361,623 | 333,633

31.CONTINGENT LIABILITIES
At 31 October 2025, various guarantees were given in favour of third parties amounting to EUR1,383,707 (2024: EUR1,251,742) for which no provision has been made in these financial statements.
32.CAPITAL COMMITMENTS
Commitments for capital expenditure with respect to the development and completion of a number of projects stood as follows:

| 2025 | 2024
| EUR | EUR
Authorised and contracted | 18,496,922 | 18,088,909
Authorised but not contracted | 11,217,157 | 14,113,587

AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
77
Notes to the Financial Statements – continued
33.RELATED PARTIES
As at 31 October 2025, the ultimate controlling party of the Group is Mr Angelo Xuereb, who held 55% of the voting rights of the Company.
Group
All entities in which Mr Xuereb has control, has significant influence or is a member of the key management personnel are considered to be “related parties” in these financial statements. Related parties also comprise of key management who have the ability to control or exercise a significant influence in financial and operating decisions.
Transactions with related parties
The Group entered into transactions with related parties as follows:

| 2025 | 2024
| EUR | EUR
Management services (Note 7) | 687,191 | 736,522
Dividend issued to shareholders (Note 25) | - | 5,000,000
Property sold to shareholder (Note 23) | - | 1,000,000

Balances with related parties
Balances with related parties are disclosed in Note 20, Note 22 and Note 28.
Company
All subsidiaries of AX Group p.l.c. are deemed to be related parties in these financial statements.
Transactions with related parties
The Company entered into transactions with related parties as follows:
2025
2024
EUR
EUR
Management services (Note 7)
2,478,903
2,217,237
Dividend received from subsidiaries (Note 7)
6,656,447
11,171,486
Dividend issued to shareholders (Note 25)
-
5,000,000
Interest receivable from subsidiaries (Note 9)
2,969,258
2,314,511
Interest payable to subsidiaries (Note 10)
417,625
133,194
Recharge of salaries (Note 8)
263,191
236,646
Increase in capital contribution (Note 18)
1,565,000
9,000,000
Balances with related parties
Balances with related parties are disclosed in Note 18, Note 20, Note 22 and Note 28.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
78
Notes to the Financial Statements – continued
34.RISK MANAGEMENT OBJECTIVES AND POLICIES
The most significant financial risks to which the Group and the Company are exposed to are described below.
The Group and the Company are exposed to credit risk, liquidity risk and market risk through its use of financial instruments which result from its operating, investing and financing activities. The Group and the Company’s risk management is coordinated by the Directors and focuses on actively securing the Group and the Company’s short term to medium term cash flows by minimising the exposure to financial risks.
Credit risk
The Group and the Company’s credit risk is limited to the carrying amount of financial assets recognised at the date of the statement of financial position, which are disclosed in Notes 20 and 22.
The Group and the Company continuously monitor defaults of customers and other counterparts and incorporate this information into their credit risk controls. The Group and the Company’s policy is to deal with creditworthy counterparties.
None of the Group and the Company’s financial assets are secured by collateral or other credit enhancements.
The credit risk for liquid funds is considered to be negligible, since the counterparties are reputable institutions with high quality external credit ratings.
Quoted investments are acquired after assessing the quality of the relevant investments. Cash is placed with reliable financial institutions.
Liquidity risk
The Group and the Company’s exposure to liquidity risk arises from its obligations to meet financial liabilities, which comprise debt securities, trade and other payables and other financial liabilities. Prudent liquidity risk management includes maintaining sufficient cash and committed credit facilities to ensure the availability of an adequate amount of funding to meet the Group and the Company’s obligations when they become due.
At 31 October 2025 and 31 October 2024, the contractual maturities on the financial liabilities of the Company and the Group were as summarised below. Contractual maturities reflect gross cash flows, which may differ from the carrying values of financial liabilities at the date of the statement of financial position.
Group

2025 | Less than 6 months | From 6 to 12 months | From 1 to 5 years | More than 5 years | Total
| EUR | EUR | EUR | EUR | EUR
Bank borrowings | 19,304,458 | 10,647,006 | 30,949,982 | 34,662,769 | 95,564,215
Debt securities in issue | 1,973,556 | 1,973,556 | 38,950,944 | 69,783,822 | 112,681,878
Lease liabilities | 141,522 | 17,835 | 666,961 | 17,815,081 | 18,641,399
Other payables | 17,952,710 | - | - | - | 17,952,710
Total | 39,372,246 | 12,638,397 | 70,567,887 | 122,261,672 | 244,840,202

2024 | Less than 6 months | From 6 to 12 months | From 1 to 5 years | More than 5 years | Total
| EUR | EUR | EUR | EUR | EUR
Bank borrowings | 20,047,400 | 12,286,362 | 33,979,729 | 44,382,844 | 110,696,335
Debt securities in issue | 1,973,556 | 1,973,556 | 29,813,444 | 86,328,044 | 120,088,600
Lease liabilities | 156,703 | 33,016 | 778,994 | 17,984,528 | 18,953,241
Other payables | 18,151,078 | - | - | - | 18,151,078
Total | 40,328,737 | 14,292,934 | 64,572,167 | 148,695,416 | 267,889,254

AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
79
Notes to the Financial Statements – continued
34.RISK MANAGEMENT OBJECTIVES AND POLICIES – continued
Financial Guarantee
For each financial guarantee contract issued, the Group has to determine the amount of expected credit loss in accordance with IFRS 9. The Company provided a financial guarantee to secure the banking facilities of subsidiaries for an amount of EUR8,118,360. Management has carried out an assessment on the loans receivable provided by the Issuer to other related parties which has been quantified as not material. Accordingly, the financial guarantee in the Company is deemed not to be material.
Foreign currency risk
Foreign currency transactions arise when the Group and the Company enter into transactions denominated in a foreign currency. Foreign currency transactions mainly comprise transactions in US Dollars and GB Pounds.
The risk arising from foreign currency transactions is managed by regular monitoring of the relevant exchange rates. The Directors consider foreign exchange risk exposure not to be material and accordingly a sensitivity analysis disclosing how profit or loss and other comprehensive income would change as a result of a reasonable possible shift in foreign exchange rates, is not considered necessary.
Interest rate risk
The Group and the Company’s exposure to interest rate risk is limited to the variable interest rates on borrowings. This applies to all of the Group’s bank borrowings as per Note 27 whose applicable interest rates are linked to either the 3-month Euribor or the bank’s base rate. Based on observations of current market conditions, the Directors consider an upward or downward movement in interest of between 1% to 2% to be reasonably possible. However, the potential impact of such a variance is considered immaterial.
35.CAPITAL MANAGEMENT
For the purpose of the Group and the Company’s capital management, capital includes issued capital and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Group’s and the Company’s capital maximise the shareholder value.
The Group and the Company manage their capital structure and make adjustments in light of changes in economic conditions. To maintain and adjust the capital structure, the Group and the Company may adjust the dividend payment to shareholders or issue new debt. The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group includes within net debt interest bearing loans and borrowings, trade and other payables and other financial liabilities less cash and cash equivalents.
Group

| 2025 | 2024
| EUR | EUR
Interest bearing loans and borrowings (Note 17, 27, 29) | 184,602,553 | 191,684,494
Other financial liabilities (Note 28) | 732,395 | 8,449
Trade and other payables (Note 26) | 54,108,585 | 52,040,608
Less: cash and cash equivalents (Note 23) | (10,593,161) | (10,569,146)
Net Debt | 228,850,372 | 233,164,405
Equity (Note 25) | 1,164,688 | 1,164,688
Other reserves | 257,863,489 | 235,551,172
Total capital | 259,028,177 | 236,715,860
Capital and net debt | 487,878,549 | 469,880,265
Gearing ratio | 46.9% | 49.6%

No changes were made in the objectives, policies and processes for managing capital during the years ended 31 October 2025 and 2024.
AX GROUP P.L.C.
Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2025
80
Notes to the Financial Statements – continued
36.SUBSEQUENT EVENTS
Dividend
The Directors intend to distribute a further gross dividend amounting to EUR629,347, equivalent to EUR0.02586 per ordinary share due to non-controlling interest.
Shareholding Structure
The Group has undergone a shareholding restructuring process. As part of this process, as at 17 November 2025, the existing shareholders of the Company transferred their shareholdings to a newly incorporated limited liability company, ARCD Holding Limited, registered in Malta. Subsequently, on 5 December 2025, ARCD Holding Limited transferred all of its shareholding in AX Group p.l.c. to AX Ventures Limited, another newly incorporated limited liability company registered in Malta, which has become the new immediate parent company of AX Group p.l.c. The ultimate beneficial ownership remains unchanged, as the same shareholders continue to hold their interests above the new intermediate holding company.
Ernst & Young Malta Limited
Regional Business Centre
Achille Ferris Street
Msida MSD 1751, Malta
Tel: +356 2134 2134
Fax: +356 2133 0280
ey.malta@mt.ey.com
ey.com
81
A member firm of Ernst & Young Global Limited.
Registered in Malta No: C30252
INDEPENDENT AUDITOR’S REPORT
to the Shareholders of AX Group p.l.c.
Report on the audit of the financial statements
Opinion
We have audited the consolidated and separate financial statements of AX Group p.l.c. (the “Company”) and its subsidiaries (the “Group”), set on pages 23 to 80, which comprise the consolidated and separate statements of financial position as at 31 October 2025, and the consolidated and separate statements of profit or loss and other comprehensive income, the consolidated and separate statements of changes in equity and the consolidated and separate statements of cash flows for the year then ended, and notes to the consolidated and separate financial statements, including material accounting policy information.
In our opinion, the accompanying consolidated and separate financial statements give a true and fair view of the financial position of the Group and the Company as at 31 October 2025, and of their financial performance and their cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU (“IFRS”) and the Companies Act, Cap. 386 of the Laws of Malta (the “Companies Act”).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) and the Companies Act. Our responsibilities under those standards and under the Companies Act are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group and the Company in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) as issued by the International Ethics Standards Board of Accountants (IESBA Code), as applicable to audits of financial statements of public interest entities, together with the ethical requirements that are relevant to our audit of the financial statements of public interest entities in accordance with the Accountancy Profession (Code of Ethics for Warrant Holders) Directive issued in terms of the Accountancy Profession Act, Cap. 281 of the Laws of Malta. We have also fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
82
A member firm of Ernst & Young Global Limited.
Registered in Malta No: C30252
INDEPENDENT AUDITOR’S REPORT
to the Shareholders of AX Group p.l.c.
Report on the audit of the financial statements
Key audit matters incorporating the most significant risks of material misstatements, including assessed risk of material misstatements due to fraud
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current year. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For the matter below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matter below, provide the basis for our audit opinion on the accompanying financial statements.
Fair value of land and buildings classified as property, plant and equipment, and investment properties
The Group’s land and buildings classified as property, plant and equipment, which are being further described in Notes 4.13, 4.14, 5, 15 and 16 to the accompanying financial statements, account for 60% of the Group’s total assets as at 31 October 2025. Land and buildings are measured at fair value at the date of revaluation, less any subsequent accumulated depreciation and impairment losses.
The Group also holds investment properties, which are being further described in Notes 4.15, 5 and 16 to the accompanying financial statements, accounting for 11% of total assets of the Group as at 31 October 2025. Investment properties are stated at fair value, which reflects market conditions at the reporting date.
The Group uses the services of professional qualified and independent valuers to revalue the land and buildings classified as property, plant and equipment, and the investment properties, on the basis of assessments of the fair value of the property in accordance with international valuation standards. The valuations are arrived at by a combination of the income capitalization approach, the replacement cost approach and the market approach as applicable.
In the years in which an independent valuation is not obtained, management reperforms fair valuations of the properties by verifying and updating all major inputs to the last independent valuation report prepared by an external independent valuer. Internal methods are therefore aligned with those used by external valuers. On a yearly basis, management assesses each property’s change in value to determine whether the change is reasonable and holds discussions with the independent valuer, as necessary.
The valuation of property at fair value is highly dependent on estimates and assumptions such as:
•the capitalisation rate, rental income and respective growth rate under the income capitalisation approach;
•the estimated land value and going rates for construction, finishing, services and fittings under the replacement cost approach; and
•the market prices for comparable advertised properties under the market approach.
83
A member firm of Ernst & Young Global Limited.
Registered in Malta No: C30252
INDEPENDENT AUDITOR’S REPORT
to the Shareholders of AX Group p.l.c.
Report on the audit of the financial statements
Key audit matters incorporating the most significant risks of material misstatements, including assessed risk of material misstatements due to fraud – continued
Fair value of land and buildings classified as property, plant and equipment, and investment properties – continued
Therefore, due to the significance of the balances and the estimation uncertainty involved in the fair value of properties, we have considered the fair value of land and buildings classified as property, plant and equipment, and investment properties as a key audit matter.
Our audit procedures over the fair value of land and buildings classified as property, plant and equipment, and investment properties included amongst others:
•evaluating the design and implementation of key controls over the Group’s property valuation process by inquiring with the valuation process owners;
•performing tests relating to the valuation of the Group’s property, focusing on management reviews over the property valuations by inspecting management analysis and minutes of meetings of the board and audit committee where such valuation was discussed;
•obtaining an understanding of the scope of work of the professional valuers by reviewing the available valuation reports and considered the independence and expertise thereof;
•obtaining an understanding of the process followed by management in the years where an independent valuation is not obtained and an update is performed internally;
•including a valuation specialist on our team to assist us in assessing the appropriateness of the valuation approaches applied, as well as evaluating the reasonability and validity of key assumptions and estimates used in the valuations by comparing to independent sources and relevant market data and conditions; and
•performing procedures over the accuracy and completeness of the inputs used in the valuations in the light of our understanding of the business and industry developments, historical data and other available information.
We also assessed the relevance and adequacy of disclosures relating to the Group’s fair value of land and buildings classified as property, plant and equipment, and investment properties presented in Notes 4.13, 4.14, 4.15, 5, 15 and 16 to the accompanying financial statements.
84
A member firm of Ernst & Young Global Limited.
Registered in Malta No: C30252
INDEPENDENT AUDITOR’S REPORT
to the Shareholders of AX Group p.l.c.
Report on the audit of the financial statements
Other information
The Directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon other than our reporting on other legal and regulatory requirements.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors and those charged with governance for the financial statements
The Directors are responsible for the preparation and fair presentation of the financial statements in accordance with IFRS and the requirements of the Companies Act 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 Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group and the Company or to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s and the Company’s financial reporting process.
85
A member firm of Ernst & Young Global Limited.
Registered in Malta No: C30252
INDEPENDENT AUDITOR’S REPORT
to the Shareholders of AX Group p.l.c.
Report on the audit of the financial statements
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
•identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
•obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Company’s internal control;
•evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors;
•conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group and the Company to cease to continue as a going concern;
•evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation;
•plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group as a basis for forming an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
86
A member firm of Ernst & Young Global Limited.
Registered in Malta No: C30252
INDEPENDENT AUDITOR’S REPORT
to the Shareholders of AX Group p.l.c.
Report on the audit of the financial statements
Auditor’s responsibilities for the audit of the financial statements - continued
We also provide those charged with governance with a statement that we 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 our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on other legal and regulatory requirements
Matters on which we are required to report by the Companies Act
Directors’ report
We are required to express an opinion as to whether the Directors’ report has been prepared in accordance with the applicable legal requirements. In our opinion the Directors’ report has been prepared in accordance with the Companies Act.
In addition, in the light of the knowledge and understanding of the Group and the Company and their environment obtained in the course of the audit, we are required to report if we have identified material misstatements in the Directors’ report. We have nothing to report in this regard.
Other requirements
We also have responsibilities under the Companies Act to report if in our opinion:
•proper accounting records have not been kept;
•proper returns adequate for our audit have not been received from branches not visited by us;
•the financial statements are not in agreement with the accounting records;
•we have not received all the information and explanations we require for our audit.
We have nothing to report to you in respect of these responsibilities.
Appointment
We were appointed as the statutory auditor by the General Meeting of Shareholders of the Company on 28 October 2020. The total uninterrupted engagement period as statutory auditor, including previous renewals and reappointments amounts to 6 years.
Consistency with the additional report to the audit committee
Our 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 the same date as this report.
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 us to the Group and the Company and we remain independent of the Group and the Company as described in the Basis for opinion section of our report. No other services besides statutory audit services and services disclosed in the annual report and in the financial statements, were provided by us to the Group and the Company and its controlled undertakings.
87
A member firm of Ernst & Young Global Limited.
Registered in Malta No: C30252
INDEPENDENT AUDITOR’S REPORT
to the Shareholders of AX Group p.l.c.
Report on other legal and regulatory requirements
Report on compliance with the requirements of the European Single Electronic Format Regulatory Technical Standard (the “ESEF RTS”), by reference to Capital Markets Rule 5.55.6
We have undertaken a reasonable assurance engagement in accordance with the requirements of Directive 6 issued by the Accountancy Board in terms of the Accountancy Profession Act (Cap. 281) - the Accountancy Profession (European Single Electronic Format) Assurance Directive (the “ESEF Directive 6”) on the annual financial report of the Group and the Company for the year ended 31 October 2025, entirely prepared in a single electronic reporting format.
Responsibilities of the Directors
The Directors are responsible for the preparation of the annual financial report, including the 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 responsibilities
Our responsibility is to obtain reasonable assurance about whether the annual financial report, including the consolidated and separate financial statements and the relevant electronic tagging therein comply in all material respects with the ESEF RTS based on the evidence we have obtained. We conducted our reasonable assurance engagement in accordance with the requirements of ESEF Directive 6.
Our procedures included:
•Obtaining an understanding of the entity's financial reporting process, including the preparation of the annual financial report, in 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.
•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.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion
In our opinion, the annual financial report for the year ended 31 October 2025 has been prepared, in all material respects, in accordance with the requirements of the ESEF RTS.
88
A member firm of Ernst & Young Global Limited.
Registered in Malta No: C30252
INDEPENDENT AUDITOR’S REPORT
to the Shareholders of AX Group p.l.c.
Report on other legal and regulatory requirements
Matters on which we are required to report by the Capital Markets Rules
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 that they have taken to ensure compliance throughout the accounting period with those Principles.
The Capital Markets Rules also require the auditor to include a report on the statement of compliance prepared by the Directors. We are also required to express an opinion as to whether, in the light of the knowledge and understanding of the Group and the Company and its environment obtained in the course of the audit, we have identified material misstatements with respect to the information referred to in Capital Market Rules 5.97.4 and 5.97.5.
We read the statement of compliance and consider the implication 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 the other information included in the annual report.
We are not required to, and we do not, consider whether the Board’s statements on internal control included in the statement of compliance cover all risks and controls, or form an opinion on the effectiveness of the Company’s governance procedures or its risk and control procedures.
In our opinion:
•the corporate governance statement set out on pages 20 to 22 has been properly prepared in accordance with the requirements of the Capital Markets Rules issued by the MFSA
•in the light of the knowledge and understanding of the Company and the Group and its environment obtained in the course of the audit the information referred to in Capital Market Rules 5.97.4 and 5.97.5 are free from material misstatement
Other requirements
Under the Capital Markets Rules we also have the responsibility to review the statement made by the Directors, set out on page 19, that the business is a going concern, together with supporting assumptions or qualifications as necessary.
We have nothing to report to you in respect of these responsibilities.
The partner in charge of the audit resulting in this independent auditor’s report is
Christopher Balzan for and on behalf of
Ernst & Young Malta Limited
Certified Public Accountants
20 February 2026