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Company Registration No.: C 82218
Stivala Group Finance p.l.c.
Annual Report and Consolidated Financial Statements
for the year ended
31 December 2025
Contents Page
Chairman’s Statement 1 - 3
Directors' Report 4 - 10
Corporate Governance - Statement of Compliance 11 – 19
Other Disclosure in Terms of Capital Market Rules 20
Independent Auditor's Report 21 - 28
Consolidated Statement of Profit or Loss and
Other Comprehensive Income 29 - 30
Consolidated Statement of Financial Position 31 - 32
Consolidated Statement of Changes in Equity 33 - 35
Consolidated Statement of Cash Flows 36 - 37
Notes to the Consolidated Financial Statements 38 - 100
1
Stivala Group Finance p.l.c.
Chairman’s Statement
for the year ended 31 December 2025
Dear Shareholders and Stakeholders,
2025 was an important year of consolidation and further accomplishments for our Group. We once
again demonstrated our resolve and our commitment to performing at the highest levels and to
exceeding expectations.
Looking ahead to 2026 – People and Organisation
Looking ahead, our people agenda for 2026 is focused on strengthening delivery through an updated
organisational structure and the standardisation of processes across all roles. Clear roles,
responsibilities and reporting lines are being established to improve accountability, consistency and
decision-making across the Group.
To reinforce leadership capacity and prepare for the forecasted growth in 2026, we have strengthen our
Senior Management team by employing a new General Manager and a new Marketing Manager, and
we look forward to the commencement of a new Revenue Manager for ST Hotels Ltd. This new role
will strengthen revenue management capability and support sharper forecasting, pricing discipline and
performance optimisation across the hotel portfolio.
We are further strengthening the Human Resources function across the group by launching a dedicated
Learning and Development department to provide structured guidance on career pathways and to
formalise procedures across all sectors. This will help ensure consistent standards, clearer progression
opportunities and stronger support for employees at every level. We expect these initiatives to
contribute positively to employee retention and to sustaining higher standards across our operations.
Similarly, we are still waiting for the appeals process to be concluded in the Chalet project, which we
want to restore to its former glory, making it again a vibrant centre of Sliema life.
In 2025 the inbound tourism sector continued to grow to record levels, and demand for our services
increased accordingly. That said, we continue to monitor trends closely, because demand alone is not
a sufficient measure of success. Developments on the international scene are closely monitored by the
Board of Directors.
We are also closely reviewing conditions in the office and commercial rental market. The environment
has become more challenging, and we view this as an opportunity—and an incentive—to invest in
higher quality materials and finishes as clients become more discerning and have a wider range of
options available to choose from.
In 2025, we completed the Group’s largest hotel to date, the Novotel, comprising 293 rooms. This
supports exponential growth in the Group’s tourism operations. The works were carried out within
budget and, although we opened slightly behind schedule (Q3 2025), we are excited to welcome the
first of what we hope will be many Accor-branded hotels within the Group.
During the year, our acquisition strategy focused primarily on sites at the perimeter of our existing
assets. This deliberate approach is intended to consolidate our property footprint and increase the value
of these holdings when brought forward for redevelopment.
A second project with Accor Group is planned as a Mövenpick-branded hotel on the site of the existing
Sliema Hotel on the strand. Works started in 2025, with completion and operations anticipated by the
end of the first quarter of 2027.
2
Stivala Group Finance p.l.c.
Chairman’s Statement
for the year ended 31 December 2025
In all current and future projects, the Group is applying the highest energy-efficiency and
environmental sustainability standards. We have invested considerable resources to align our
operations and reporting beyond minimum ESG requirements, and we are now moving from policy
development to practical implementation—embedding these standards into everyday operations.
These achievements have been made possible by the dedication and hard work of our employees at all
levels and from all walks of life, together with the continued efforts of the Board of Directors. We will
continue to pursue our objectives with discipline and ambition.
We thank all stakeholders who are assisting us in our success.
ESG Reporting
Environmental, Social, and Governance (ESG) Statement
As part of our ongoing commitment to sustainable and responsible business practices, Stivala Group
has embarked on its ESG journey in alignment with the Corporate Sustainability Reporting Directive
(CSRD) and the European Sustainability Reporting Standards (ESRS). This marks a key step in
enhancing the Group’s transparency, accountability, and resilience amid evolving stakeholder
expectations and regulatory developments.
Laying the Foundation: Double Materiality Assessment
In 2025, the Group continued to discuss and test in order to develop and understand our current
position under Double Materiality, and we hope to finalise this work by the end of 2026.
Key Findings:
1. Strengths and Opportunities
Our strong market presence, regulatory experience, and diversified portfolio provide a solid foundation
for sustainable development. Growing demand for eco-friendly hospitality and real estate solutions
presents a significant opportunity to enhance our ESG performance. Investments in renewable energy,
energy efficiency, and proactive stakeholder engagement drive long-term value while strengthening
community trust.
2. Challenges and Evolving Risks
We acknowledge the need to enhance transparency in sustainability reporting and governance
practices. Reliance on traditional energy and evolving regulations pose challenges requiring strategic
adaptation. Climate change impacts, resource scarcity, and rising community expectations necessitate
a proactive approach to ESG risk management.
3. Stakeholder Insights and Expectations
Our engagement with investors, partners, communities, suppliers, employees, and customers
reinforced the importance of governance transparency, regulatory compliance, climate action,
responsible waste management, and fair labour practices. Sustainable hospitality experiences, ethical
business conduct, and proactive community engagement remain central to stakeholder expectations.
3
Stivala Group Finance p.l.c.
Chairman’s Statement
for the year ended 31 December 2025
4. Financial and Impact Materiality
The assessment identified key sustainability topics with significance from both a financial and impact
perspective. From a financial materiality standpoint, the most significant areas identified are topics
which are critical to the Group’s operational resilience, legal obligations, and long-term value creation.
From an impact materiality perspective, the assessment highlighted the importance of areas which
reflect the potential influence of the Group’s activities on the environment and society and reflect our
environmental and social responsibilities.
Our Commitment to ESG Progress
Stivala Group is embedding ESG into the core of its operations and decision-making processes. The
insights gained through the double materiality assessment will inform the next phase, which will focus
on addressing ESG data and reporting gaps in order to achieve full ESRS compliance. By investing in
sustainable practices, enhancing governance systems, and engaging openly with stakeholders, we aim
to build a more resilient, transparent, and responsible organisation for the future.
Sincerely,
Mr. Martin John Stivala
Chairman, Stivala Group
Stivala Group Finance p.l.c. and its subsidiaries
4
Stivala Group Finance p.l.c.
Directors' Report
for the year ended 31 December 2025
The Board of Directors are hereby presenting their annual report together with the audited financial
statements of the Group and the Company for the year ended 31 December 2025.
Principal activities
The principal activity of the Company is to act as a finance and investment company, in particular the
financing or re-financing of the funding requirements of related companies within the Stivala Group.
The principal activities of the Group relate to the property letting, development and hospitality. The
Group owns and leases a number of commercial, residential and office properties. These include
apartments and various hotels namely Bayview Hotel, Blubay Apartments, Blubay Suites, Sliema
Hotel, Azur Hotel and ST Tower, majority of which are situated in Gzira and Sliema.
Review of business
The Company registered a profit before tax of €5,082,783 during the year ended 31 December 2025
(2024: €21,377,739).
The Group registered a consolidated profit before tax of €18,923,438 during the year ended 31 December
2025 (2024: €43,932,176).
Given the Group’s and Company’s financing structure and the positive net assets position of the Group
and the Company at the end of the financial year, the Directors consider the Group’s and Company’s
state of affairs as at the close of the financial year to be satisfactory.
Performance
The Company's revenue amounting to €7,545,140 (2024: €23,854,283) is derived from dividends
receivable from its subsidiary. The major cost of the Company is the bond interest payable amounting
to €2,347,500 (2024: €2,347,500). The Company registered a profit after taxation of €4,987,399 (2024:
€21,165,743) and as at year end, its total equity amounted to net asset of €2,922,344 (2024: €2,084,695).
The Group's revenue for the year amounts to €32,989,800 (2024: €29,475,844). The main revenue streams
of the group are hospitality and rental income. The rental income is slightly higher compared with prior
year while a significant 15% increase was noted for the hospitality industry due to lifting of covid-19
restrictions. After deducting the main expenses being the cost of sales and distribution costs related to
hospitality as well as administrative expenses, the Group registered an operating profit of €18,509,724
(2024: incurred an operating profit of €47,800,328).
Note: 2024 profit of €50.3M included a one-off €30M intangible asset recognition. Underlying
performance in 2025 reflects strong operational growth.
5
Stivala Group Finance p.l.c.
Directors' Report
for the year ended 31 December 2025
The Bond Issue
By virtue of the prospectus dated 25 September 2017 and 18 July 2019, the Company issued 45,000,000
4% secured bonds with a face value of €100 each, redeemable at par on 18 October 2027 and 15,000,000
3.65% secured bonds with a face value of €100 each, red eemable at par on 29 July 2029, respectively.
The funds received were intended for further purchase and development of its properties, in line with
the Group's vision of continuous business expansion.
Principal risks and uncertainties
The Directors are aware of the various risks faced by the Group as a result of its diversified business
lines primarily on hospitality and property development and letting. A number of measures are in place
to ensure that such risks and uncertainties are maintained at acceptable levels and are in line with the
Group’s risk strategy of sustainable, long-term growth and profitability.
The key risks faced by the group include credit risk, strategic risk, operational risk, liquidity risk and
legislative risks. Together with other risks and uncertainties inherent in the business, these require
strong capital management as safeguard against competent authority requirements and unfavourable
events. Given such, the Group regularly reviews operational and capital targets against actual and
forecast business levels to minimise such risks if necessary, to the most considerable level possible in
the interest of institutional stakeholders.
The main types of risk types are outlined hereunder:
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or
customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating
activities and from its financing activities including deposits with banks.
Customer credit risk is managed by the Group's management subject to the Group's established policy,
procedures and control relating to customer credit risk management. Credit quality of a customer is
assessed based on each customer's credit limits. Outstanding customer receivables are regularly
monitored. An impairment analysis is performed on each reporting date in accordance with the
guidelines set in IFRS 9 Financial Instruments Standard. The Group exercises a prudent credit control
policy, and accordingly, it is not subject to any significant exposure or concentration of credit risk. The
Group banks only with local financial institutions with high quality standard or rating. The Group's
operations are principally carried out in Malta and most of the Group's revenue originates from clients
based in Malta.
Strategic risk
This risk relates to the value of Group's assets and local property market in general.
The Group has strict guidelines and engages competent professionals on quality and valuation of its
investment properties and property, plant and equipment. The Group's properties are rented out to
various tenants, except for those sites where development is in progress. The Group currently has lease
agreements with in-substance fixed rental receivables in place after the non-cancellable period, which
will protect the Group from unforeseen circumstances and inflation. The Group ensures to implement
sound capital management policies and flexible cash flow as disclosed below under liquidity risk, to
mitigate such risk.
6
Stivala Group Finance p.l.c.
Directors' Report
for the year ended 31 December 2025
Operational risk
Operational risk maybe defined as the risk of losses arising from defects or failures in its internal
processes, people, systems or external events including risks related to fraud, technological and
conduct risk.
Operational risk is inherent in all processes, systems and activities of the Group. As such, all employees
are responsible for managing and controlling operational risks associated with their own activities and
business processes where they are involved. The Group, in terms of operational risk management and
control, continues to identify, evaluate and mitigate such risks, regardless if these actually occurred or
not. The Group also assesses at each reporting date (unless immediate evaluation is necessary) areas of
concern for improvement to minimise such operational risks, arising due to the volatile results of each
year's operations.
During the year, the Group implemented an updated organisational structure designed to strengthen
accountability and execution across the business. A key focus has been the standardisation of processes
across all functions and roles, with clear role definitions, reporting lines, and responsibilities
established to support consistent decision-making and performance management.
In line with this approach, the Group appointed a new General Manager and a new Marketing Manager
to further reinforce operational leadership and commercial focus. Looking ahead, the Group expects a
new Revenue Manager for ST Hotels to commence shortly, which will enhance revenue management
capability and support improved forecasting, pricing discipline, and performance optimisation across
the hotel portfolio.
The Group is also establishing a dedicated Learning and Development function. This initiative will
provide structured guidance on career pathways, introduce formalised procedures and role-based
standards across all sectors, and support the continued professional development of employees at all
levels. Management expects these measures to contribute positively to employee engagement and
retention, while sustaining high service and operational standards across the Group.
Operational risk is inherent in all processes, systems and activities of the Group. As such, all employees
are responsible for managing and controlling operational risks associated with their own activities and
business processes where they are involved. The Group continues to identify, evaluate and mitigate
such risks, regardless of whether these have occurred. The Group also assesses, at each reporting date
(unless immediate evaluation is necessary), areas of concern and opportunities for improvement to
minimise operational risks arising, including those linked to volatility in annual results.
Liquidity risk
The Group is exposed to liquidity risk in relation to meeting future obligations associated with its
financial liabilities. Prudent liquidity risk management includes maintaining sufficient cash and
committed credit lines to ensure the availability of an adequate amount of funding to meet the Group's
obligations.
The Group is heavily dependent on the operations of the hotels it owns and the rental market. It
regularly reviews the financial performance of its revenue streams in order to ensure that there is
sufficient liquidity to sustain its operations. Cost cut practices have also been continuously
implemented.
Legislative risks
The Group is governed by a number of laws and regulations. Failure to comply could have financial
and reputational implications and could materially affect the group's ability to operate. The Group has
embedded operating policies and procedures to ensure compliance with existing legislation.
7
Stivala Group Finance p.l.c.
Directors' Report
for the year ended 31 December 2025
The Group may also be subject to reputation and litigation risk as a result of its course of actions and
operations. This may pose significant effect on the Group’s and the various stakeholders’ wellbeing, if
ignored. The Board of Directors exercises the highest levels of ethical behaviour possible through a
number of appropriate policies, procedures and controls, implemented on its day to day operations.
The hotel industry globally is marked by strong and increasing consolidation and many of the Group’s
current and potential competitors may thus have bigger name recognition, larger customer bases and
greater financial and other resources than the companies within the Group. In response to this, the
Group and the Company's hotels have undergone renovations that would cater the taste of the majority,
still being offered at the most affordable cost.
Financial risk management and exposures
Note 31 Financial Risk Management to these financial statements provide details in connection with
the Company’s use of financial instruments, its financial risk management objectives and policies and
the financial risks to which it is exposed.
Events after reporting period
People and Organisation
Looking ahead, the Group could eventually result in certain holiday apartments being redirected into
longer-term rental stock, slightly easing tightness. However, the Group’s people agenda for 2026 is
focused on strengthening delivery through an updated organisational structure and the
standardisation of processes across all roles. Clear roles, responsibilities and reporting lines are being
established to improve accountability, consistency and decision-making across the organisation.
To reinforce leadership capacity, the Group looks forward to the commencement of a new Revenue
Manager for ST Hotels in the near term. This role is expected to strengthen revenue management
capability and support improved forecasting, pricing discipline and performance optimisation across
the hotel portfolio.
The Group is also establishing a dedicated Learning and Development department to provide
structured guidance on career pathways and to formalise procedures across all sectors. This will help
ensure consistent standards, clearer progression opportunities and stronger support for employees at
every level. Management expects these initiatives to contribute positively to employee retention and to
sustaining high standards across operations appointed a new General Manager and a new Marketing
Manager. In addition, the Group’s hotels met budget expectations for the first four months of operation,
and we will continue to monitor the situation and react accordingly.
In summary: hotels and tourism may see a short-lived boost from market reallocation, but there is a
medium-term risk of slower growth or yield compression; residential rentals remain underpinned by
a tight market and steady foreign demand, though higher financing costs and global sentiment could
moderate rent growth; and commercial real estate (offices and shopping) is supported by scarce land
and strong service-sector demand.
8
Stivala Group Finance p.l.c.
Directors' Report
for the year ended 31 December 2025
Future developments
Despite the economic uncertainties caused by high inflation and elevated interest rates, The Group
began 2025 on a strong note, with hospitality revenue surpassing budgeted expectations. This
impressive start highlights the resilience of the Group’s diversified business model, which has enabled
it to thrive even in challenging economic conditions. Meanwhile, the property letting and development
sectors continued to operate steadily, providing a stable foundation for sustained growth.
The notable upturn in 2025 demonstrates the enduring trust and loyalty of The Group’s customers. This
trust is a reflection of the quality of service and innovative offerings that have become synonymous
with The Group’s brand. In response to this success, The Group has reaffirmed i ts commitment to
investing in key sectors, including tourism, accommodation, and residential development. These
investments are driven by the Group’s strategic vision of not only maintaining but also expanding its
market presence.
Among the year’s most significant projects was the Novotel Hotel, the largest hotel for the Group and
the first Accor-branded hotel in the portfolio. This state-of-the-art 14-floor structure provides a
meaningful uplift for the tourism sector and includes a restaurant and bar and a gym overlooking
Sliema harbour. Its 293 rooms and 4-star status support diversification and demonstrate the Group’s
operational know-how within the tourism sector.
Looking ahead to 2026 and 2027, the Group is preparing to introduce Malta’s first Mövenpick Hotel, a
significant milestone for the country’s hospitality industry. This five-star property is set to open in the
first quarter of 2027 and will align with Möven pick’s brand reputation for comfort, modernity, and
sustainability. By bringing this renowned global brand to Malta, the Group aims to diversify the
country’s tourism offerings and strengthen its position in the international travel market.
In addition to the Mövenpick Hotel, the Group will also be looking forward to the opening and
operation of another commercial premises, Charlie’s Business Centre. The business centre will host
large modern office spaces over eight floors, positioned strategically between Valletta and Sliema,
offering views over Marsamxett Harbour, Msida and Manoel Island.
In addition to these high-profile developments, The Group is pursuing other exciting projects, such as
the Sliema Chalet project and the Fisheries project in Valletta waterfront. The Chalet project promises
to set new standards for luxury and sophistication in catering establishments, while the Fisheries
project reflects a commitment to integrating sustainable practices with hospitality development. These
initiatives showcase The Group’s focus on balancing economic growth with environmental and social
responsibility.
The Group’s optimistic outlook for 202 6 is underpinned by its robust strategic framework, which
emphasizes adaptability and a proactive response to market trends. By monitoring shifts in consumer
behaviour and industry dynamics, The Group ensures its offerings remain relevant and competitive.
This approach has been instrumental in navigating the challenges posed by inflationary pressures and
fluctuating interest rates.
Investment in technology and innovation is another cornerstone of The Group’s success. By leveraging
cutting-edge solutions, the Group enhances operational efficiency and customer experiences across all
its business segments. This commitment to digital transformation positions The Group as a leader in
adopting advanced technologies within its industry.
Sustainability and community engagement are integral to The Group’s philosophy. From energy-
efficient building designs to supporting local communities through employment and outreach
programs, The Group is dedicated to making a positive impact beyond its commercial activities. These
efforts reflect a broader commitment to promoting long-term social and environmental well-being.
9
Stivala Group Finance p.l.c.
Directors' Report
for the year ended 31 December 2025
In conclusion, the Group’s achievements and ambitious plans for 2026 reflect its resilience, innovation,
and strategic foresight. The completion of the Novotel Hotel and the ongoing development of the
Mövenpick Hotel in Sliema are examples of how the Group is shaping the future of tourism,
accommodation, and property development. Alongside initiatives like the Chalet and Fisheries
projects, these efforts highlight the Group’s commitment to excellence and its role as a key driver of
economic growth.
As the year progresses, The Group remains confident in its ability to navigate challenges and capitalize
on opportunities. With a strong focus on customer satisfaction, sustainability, and innovation, The
Group is well-positioned to achieve remarkable milestones and make lasting contributions to the
industries it serves.
Dividends and Reserves
The results for the year are set in the Consolidated Statement of Comprehensive Income on page 29 and
30.
The Board of Directors did issue a dividend this year amounting to €4,149,750. (2024: 12,000,000), net
of taxation. Retained profits carried forward at the reporting date amounted to €109,294,191 (2024:
€97,251,669) for the Group and retained earnings of €2,663,540 (2024: retained earnings of €1,825,891)
for the Company.
Directors
The Directors of the Company since the beginning of the year up to the date of this report were:
Mr. Ivan Stivala - Chairman and Executive Director
Mr. Michael Stivala - CEO and Executive Director
Mr. Martin John Stivala - Executive Director
Dr. Ann Marie Agius - Non-Executive Director
Mr. Francis Gouder - Non-Executive Director
Mr. Jean Paul Debono - Non-Executive Director
Company Secretary
Ms. Antoinette Scerri
Remuneration committee and corporate governance
During the period under review, the functions of the Remuneration Committee were carried out by the
Board of Directors in view of the fact that the remuneration of Directors is not performance related.
Statement of Directors’ Responsibilities for the financial statements
The Directors are required by the Maltese Companies Act, 1995 (Cap.386) to prepare financial
statements in accordance with International Financial Reporting Standards as adopted by the EU which
give a true and fair view of the state of affairs of the Company as at the end of each reporting period
and of the profit or loss for that period.
In preparing such financial statements, the Directors are responsible for:
- ensuring that the financial statements have been drawn up in accordance with International Financial
Reporting Standards as adopted by the EU;
- selecting and applying consistently appropriate accounting policies;
- making accounting estimates that are reasonable in the circumstances; and
- ensuring that the financial statements are prepared on the going concern basis unless it is
inappropriate to presume that the Company will continue in business as a going concern.
The Directors are also responsible for designing, implementing and maintaining internal control as
necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error, and that comply with the Maltese Companies Act, 1995 (Cap. 386). They
are also responsible for safeguarding the assets of the Group and the parent Company and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
10
Stivala Group Finance p.l.c.
Directors' Report
for the year ended 31 December 2025
The financial statements of Stivala Group Finance p.l.c. for the year ended 31 December 2025 are
included in the Annual Report 2025, which is published in hard-copy printed form and is available on
the Company’s website. The Directors are responsible for the maintenance and integrity of the Annual
Report on the website in view of their responsibility for the controls over, and the security of, the
website. Access to information published on the Company’s website is available in other countries and
jurisdictions, where legislation governing the preparation and dissemination of financial statements
may differ from requirements or practice in Malta.
Additionally, the directors are responsible for:
- the preparation and publication of the Annual Financial Report, including the consolidated financial
statements and the relevant tagging requirements therein, as required by Capital Markets Rule 5.56A,
in accordance with the requirements of ESEF RTS,
- designing, implementing, and maintaining internal controls relevant to the preparation of the Annual
Financial Report that is free from material non-compliance with the requirements of the ESEF RTS,
whether due to fraud or error, and consequently, for ensuring the accurate transfer of the information
in the Annual Financial Report into a single electronic reporting format.
Statement of responsibility pursuant to the Capital Market Rules issued by Malta Financial Services
Authority
The Directors confirm that in accordance with the Capital Market Rules, to the best of their knowledge:
- the financial statements give a true and fair view of the financial position of the Group and the
Company as at 31 December 2025, and of the financial performance and the cash flows for the year
then ended in accordance with International Financial Reporting Standards as adopted by the
European Union; and
- the Directors' Report includes a fair review of the performance of the business and the financial
position of the issuer and the undertakings included in the consolidation taken as a whole, together
with a description of the principal risks and uncertainties that the Group and the Company face.
Going concern – Capital Markets Rules 5.62
Having made an appropriate assessment of going concern as discussed in Note 2.1 to these financial
statements, the financial statements of the Group and the Company are prepared on a going concern
basis. The Directors regard that pursuant to Capital Markets Rule 5.62, this is appropriate, after due
consideration of the Group’s and Company's financial support from the shareholder and ultimate
beneficial owners. Specifically, the Directors have prepared financial and capital plans for the next
eleven years which show that the Group and the Company is in a position to continue operating as a
going concern for the foreseeable future. These plans take into account risks and uncertainties facing
the Group and the Company, including but not limited to, the effect of the completion of divestment of
major shareholder’s interest in the Group and the Company, as announced last 27 April 2021.
Auditors
Pursuant to the Company’s statutory obligations in terms of Companies Act and Capital Market Rules,
the appointment of the auditors and the authorisation of the Directors to set their remuneration will be
proposed and approved at the Company’s AGM. HLB CA F alzon have expressed their willingness to
continue in office.
These financial statements were approved for issue by the Board of Directors on 28 April 2026 and
signed on its behalf by Mr. Michael Stivala (CEO) and Mr. Ivan Stivala (Director) as per the
Directors’ Declaration on ESEF Annual Financial Reports submitted in conjunction with the Annual
Financial Report 2025.
11
Stivala Group Finance p.l.c.
Corporate Governance Statement
for the year ended 31 December 2025
Introduction
Pursuant to the Capital Markets Rules issued by the Malta Financial Services Authority (the “Rules“),
Stivala Group Finance p.l.c. (“the Company”) should endeavour to adopt the Code of Principles of
Good Corporate Governance contained in Appendix 5.1 to Ch apter 5 of the Rules (“the Code”) and
accordingly, in terms of Rule 5.94, the Company is hereby reporting on the extent of its adoption of the
Code, with respect to the financial year under review.
The Company became subject to the principles when its bonds were admitted to capital market and
subsequent trading on the Malta Stock Exchange. Accordingly this report of the Company on this
matter covers the whole year.
The Company acknowledges that although the Code does not dictate or prescribe mandatory rules,
compliance with the principles of good corporate governance recommended in the Code is in the best
interests of the Company, its shareholders and other stakeholders.
The Company has only issued debt securities which have been admitted to trading on the Malta Stock
Exchange, and accordingly, in terms of Rule 5.101, is exempt from reporting on the matters prescribed
in Rules 5.97.1 to 5.97.3, 5.97.6 and 5.97.7 in this co rporate governance statement (the "Statement”). It
is in the light of this exemption afforded to the Company by virtue of Rule 5.101, that the directors of
the Company are herein reporting on the corporate governance of the Company.
General
Good corporate governance is the responsibility of the Board of Directors of the Company (“the Board”)
as a whole, and has been and remains a priority for the Company. In deciding on the most appropriate
manner in which to implement the Code, the Board took cognisance of the Company’s size, nature and
operations, and formulated the view that the adoption of certain mechanisms and structures which
may be suitable for companies with extensive operations may not be appropriate for the Company.
The limitations of size and scope of operations inevitably impact on the structures required to
implement the Code, without however diluting the effectiveness thereof.
The Board considers that, to the extent otherwise disclosed herein, the Company has generally been in
compliance with the Principles throughout the year under review.
This Statement shall now set out the structures and processes in place within the Company and how
these effectively achieve the goals set out in the Code for the year under review. For this purpose, this
Statement will make reference to the pertinent principles of the Code and then set out the manner in
which the Board considers that these have been adhered to.
For the avoidance of doubt, reference in this Statement to compliance with the principles of the Code
means compliance with the Code’s main principles and the Code provisions.
Compliance with the Code
The Directors believe that for the financial year under review the Company has generally complied
with the requirements for each of these principles. Further information in this respect is provided
hereunder.
12
Stivala Group Finance p.l.c.
Corporate Governance Statement
for the year ended 31 December 2025
Principle One - The Board
The Directors report that for the financial year under review, the Directors have provided the necessary
leadership in the overall direction of the Company and have performed their responsibilities for the
efficient and smooth running of the Company with honesty, competence and integrity. The Board is
composed of members who are competent and proper to direct the business of the Company with
honesty, competence and integrity. All the members of the Board are fully aware of, and conversant
with, the statutory and regulatory requirements connected to the business of the Company. The Board
is accountable for its performance and that of its delegates to shareholders and other relevant
stakeholders.
The Board has throughout the period under review provided the necessary leadership in the overall
direction of the Company, and has adopted prudent and effective systems which ensure an open
dialogue between the Board and Senior Management.
The Company has a structure that ensures a mix of Executive and Non-Executive Directors and that
enables the Board to have direct information about the Company’s performance and business activities.
Principle Two - Chairman and CEO
The position of the Chairman and that of the CEO are occupied by different individuals. There is a clear
division of responsibilities between the running of the Board and the CEO's responsibility in managing
the Group's business. This separation of roles of the Chairman and CEO avoids concentration of
authority and power in one individual and differentiates leadership of the Board from the running of
the business.
The role of Chairman exercises independent judgement and is responsible to lead the Board and set its
agenda, whilst also ensuring that the Directors receive precise, timely and objective information so that
they can take sound decisions and effectively monitor the performance of the Company. The Chairman
is also responsible for ensuring effective communication with shareholders and encouraging active
engagement by all members of the Board for discussion of complex or contentious issues. The Board
believes that these functions have been conducted in compliance with the dictates of Code provision
2.2. The role of CEO is then accountable to the Board for all business operations of the Company.
Principle Three - Composition of the Board
The Board is composed of 6 members, with 3 Executive and 3 Non-Executive Directors. The Board is
responsible for the overall long-term strategy and general policies of the Company, of monitoring the
Company’s systems of control and financial reporting and that it communicates effectively with the
market as and when necessary.
The CEO provides the rest of the Directors with access to the information on the Company’s financial
position and systems. He acts as the main point of communication between the Board and overall
corporate operations as he is responsible for proper implementation of sustainable business solutions,
effective framework of internal controls over risk in relation to the business and strategic goals devised
by the Board.
The Board of Directors consists of the following:
Mr. Ivan Stivala - Chairman and Executive Director
Mr. Michael Stivala - CEO and Executive Director
Mr. Martin John Stivala - Executive Director
Dr. Ann Marie Agius - Non-Executive Director
Mr. Francis Gouder - Non-Executive Director
Mr. Jean Paul Debono - Non-Executive Director
13
Stivala Group Finance p.l.c.
Corporate Governance Statement
for the year ended 31 December 2025
In accordance with the provisions of the Company’s Articles of Association, the appointment of
Directors to the Board is exclusively reserved to the Company’s shareholders, except in so far as
appointment is made by the Board to fill a casual vacancy, which appointment would be valid until the
conclusion of the next annual general meeting ("AGM") of the Company following such an
appointment. In terms of the Articles of Association, a director shall hold office for a period of one (1)
year from the date of appointment. Provided that no appointment may be made for a period exceeding
three (3) years. Notwithstanding the period for which a director has been appointed, on the lapse of
such period, a director will be eligible for re-appointment. Dr. Ann Marie Agius, Mr. Francis Gouder
and Mr. Jean Paul Debono are considered by the Board to be independent non-executive members of
the Board, in that they have no involvement or relationship with the Company or with the majority
shareholders.
None of the independent Non-Executive Directors:
a) are or have been employed in any capacity with the Company and/or the Group;
b) have or had a significant business relationship with the Company and/or the Group;
c) has received or receives significant additional remuneration from the Company and/or the
Group;
d) has close family ties with any of the Company’s executive Directors or senior employees;
e) has served on the board for more than twelve consecutive years; or
f) is or has been within the last three years an engagement partner or a member of the audit
team of the present or former external auditor of the Company and/or the Group.
Each Non-Executive Director has declared in writing to the Board that he/she undertakes:
a) to maintain in all circumstances his independence of analysis, decision and action;
b) not to seek or accept any unreasonable advantages that could be considered as compromising
his/her independence; and
c) to clearly express his/her opposition in the event that he finds that a decision of the Board
may harm the Company.
Principle Four - The Responsibilities of the Board
The Board acknowledges its statutory mandate to conduct the administration and management of the
Company. The Board, in fulfilling this mandate and discharging its duty of stewardship of the
Company, assumes responsibility for the Company’s strategy and d ecisions with respect to the issue,
servicing and redemption of its bonds in issue, and for monitoring that its operations are in conformity
with its commitments towards bondholders, shareholders, and all relevant laws and regulations. The
Board is also responsible for ensuring that the Company establishes and operates effective internal
control and management information systems and that it communicates effectively with the market.
The Executive Officers of the Company may be asked to attend board meetings or general meetings of
the Company, although they do not have the right to vote thereat until such time as they are also
appointed to the Board. The rest of the Directors may entrust to and confer upon the CEO any of the
powers exercisable by them upon such terms and conditions and with such restrictions as they may
think fit, and either collaterally with or to the exclusion of their own powers, and may from time to
time revoke, withdraw, alter or vary all or any of such powers.
14
Stivala Group Finance p.l.c.
Corporate Governance Statement
for the year ended 31 December 2025
In fulfilling its mandate, the Board:
a) has a clearly-defined Company strategy, policies, management performance criteria and
business policies which can be measured in a precise and tangible manner;
b) has established a clear internal and external reporting system so that the Board has continuous
access to accurate, relevant and timely information such that the Board can discharge its duties,
exercise objective judgment on corporate affairs and take pertinent decisions to ensure that an
informed assessment can be made of all issues facing the board;
c) establishes an Audit Committee in terms of Capital Market Rules 5.117 – 5.134;
d) continuously assesses and monitors the Company`s present and future operations,
opportunities, threats and risks in the external environment and current and future strengths
and weaknesses;
e) evaluates management’s implementation of corporate strategy and financial objectives, and
regularly reviews the strategy, processes and policies adopted for implementation using key
performance indicators so that corrective measures can be taken to address any deficiencies
and ensure the future sustainability of the Company; and
f) ensures that the Company has appropriate policies and procedures in place to assure that the
Company and its employees maintain the highest standards of corporate conduct, including
compliance with applicable laws, regulations, business and ethical standards.
As part of succession planning, the Board ensure that the Company implements appropriate schemes
to recruit, retain and motivate employees and Senior Management. Directors are entitled to seek
independent professional advice at any time on any aspect of their duties and responsibilities, at the
Company’s expense.
The Audit Committee
The Audit Committee’s primary objective is to assist the Board in fulfilling its responsibilities: in
dealing with issues of risk, control and governance; and review the financial reporting processes,
financial policies and internal control structure. During the financial year under review, the Audit
Committee met 5 times.
Although the Audit Committee is set up at the level of the Company its main tasks are also related to
the activities of the subsidiary, sub- subsidiaries and operational companies.
The Board has set formal terms of establishment and the terms of reference of the Audit Committee
that establish its composition, role and function, the parameters of its remit as well as the basis for the
processes that it is required to comply with. The Audit Committee is a sub-committee of the Board and
is directly responsible and accountable to the Board. The Board reserves the right to change these terms
of reference from time to time.
Furthermore, the Audit Committee has the role and function of scrutinising and evaluating any
proposed transaction to be entered into by the Company and a related party, to ensure that the
execution of any such transaction was at arm’s length and on a comm ercial basis and ultimately in the
best interests of the Company.
The Audit Committee is composed of 3 independent, Non-Executive Directors:
• Mr. Francis Gouder – Chairman of Audit Committee and Member
• Dr. Ann Marie Agius – Member
• Mr. Jean Paul Debono – Member
15
Stivala Group Finance p.l.c.
Corporate Governance Statement
for the year ended 31 December 2025
Principle Five - Board meetings
The Directors meet regularly to dispatch the business of the Company. The Directors are notified of
forthcoming meetings by the Company Secretary with the issue of an agenda and supporting board
papers, which are circulated in advance of the meeting. Minutes are prepared during Board meetings
recording faithfully attendance, and resolutions taken at the meeting. These minutes are subsequently
circulated to all Directors as soon as practicable after the meeting. The Chairman ensures that all
relevant issues are on the agenda supported by all available information, whilst encouraging the
presentation of views pertinent to the subject matter and giving all Directors every opportunity to
contribute to relevant issues on the agenda. The agenda on the Board seeks to achieve a balance between
long-term strategic and short-term performance issues.
The Board meets as often and as frequently required in line with the nature and demands of the
business of the Company. Directors attend meetings on a frequent and regular basis and dedicate the
necessary time and attention to their duties as Directors of the Company. The Board met 6 times during
the financial year under review. The following Directors attended meetings as follows:
Mr. Ivan Stivala – Chairman and Executive Director - 6 meetings
Mr. Michael Stivala – CEO and Executive Director - 6 meetings
Mr. Martin John Stivala – Executive Director - 6 meetings
Dr. Ann Marie Agius - Non-Executive Director - 6 meetings
Mr. Francis Gouder - Non-Executive Director - 6 meetings
Ms. Jean Paul Debono - Non-Executive Director - 6 meetings
Business at the Company’s AGM will cover the Annual Report and Financial Statements, the
declaration of dividends if any, election of directors and the approval of their remuneration,
appointment of the auditors and the authorisation of the directors to se t the auditors’ fees.
Shareholders’ meetings are called with enough notice to enable the use of proxies to attend, vote and
abstain. The Company recognises the importance of maintaining dialogue with its shareholders to
ensure its strategies and performanc e.
Principle Six - Information and Professional Development
The Directors believe that for the financial year under review they conducted sufficient professional
development for its officers. The Company will continue with this commendable practice. As part of
succession planning and employee retention, the Board ensure that the Company implements
appropriate schemes to recruit, retain and motivate employees and Senior Management and keep a
high morale amongst employees.
Principle Seven - Evaluation of the Board's performance
The current composition of the Board allows for a cross-section of skills and experience and achieves
the appropriate balance required for it to function effectively. During the year, the Directors carried out
a self-evaluation performance analysis, including the Chairman and/or the CEO. The results of this
analysis did not require any material changes in the Company’s corporate governance structure.
16
Stivala Group Finance p.l.c.
Corporate Governance Statement
for the year ended 31 December 2025
Principle Eight – Committees
Principle Eight A of the Code deals with the establishment of a remuneration committee for the
Company aimed at developing policies on remuneration for Directors and Senior Executives and
devising appropriate remuneration packages.
In view of the size and type of operation of the Company, the Board does not consider the Company to
require the setting up of a remuneration committee, and the Board itself carries out the functions of the
remuneration committee specified in, and in accordance with, Principle Eight A of the Code, given that
the remuneration of Directors is not performance-related.
The Board has established a remuneration policy for Directors and Senior Executives, underpinned by
formal and transparent procedures for the development of such a policy and the establishment of the
remuneration packages of individual Directors.
The Board confirms that there have been no changes in the Company’s remuneration policy during the
year under review and the Company does not intend to effect any changes in its remuneration policy
for the following financial year.
The maximum annual aggregate emoluments that may be paid to the Directors is, pursuant to the
Company’s Memorandum and Articles of Association, approved by the shareholders in general
meeting.
The Board is composed exclusively of executive and non-executive Directors. The determination of
remuneration arrangements for board members is a reserved matter for the Board as a whole.
During the financial year under review, Mr. Michael Stivala, Mr. Ivan Stivala and Mr. Martin John
Stivala each held an indefinite full-time contract of service with ST Hotels Ltd.
The remuneration policy for Directors has been consistent since inception; no Director (including the
Chairman) is entitled to profit sharing, share options or pension benefits. There is no linkage between
the remuneration and the performance of Directors. A fixed honorarium is payable at each financial
year to the Non-Executive Directors.
For the financial year under review the aggregate remuneration of the Directors of the Company and
the Group (where the Company forms part) were as follows:
Fixed remuneration from Company €45,000
Fixed remuneration from Sub-subsidiary €32,307
Principle Eight B of the Code deals with the formal and transparent procedure for the appointment of
Directors.
In view of the size and type of operation of the Company, the Board does not consider the Company to
require the setting up of a nomination committee. Reference is also made to the information provided
under the subheading ‘Principle Three’ above, which pr ovides for a formal and transparent procedure
for the appointment of new Directors to the Board.
Principle Nine - Relations with shareholders and with the market
Pursuant to the Company’s statutory obligations in terms of the Companies Act (Cap. 386 of the Laws
of Malta) and the Capital Market Rules issued by the Malta Financial Services Authority, the Annual
Report and Financial Statements, the election of Directors and approval of Directors’ fees, the
appointment of the auditors and the authorisation of the Directors to set the auditors’ fees, and other
special business, are proposed and approved at the Company’s AGM.
With respect to the Company’s bondholders and the market in general, during the financial year under
review, there was no need to issue any Company announcements to the market.
17
Stivala Group Finance p.l.c.
Corporate Governance Statement
for the year ended 31 December 2025
The Company’s Articles of Association allow minority shareholders to call special meetings on matters
of importance to the Company, provided that the minimum threshold of ownership established in the
Articles of Association is met.
Principle Ten - Relations with Institutional shareholders
The Directors are of the view that this Principle is not applicable to the Company.
Principle Eleven - Conflicts of Interest
Principle Eleven deals with conflicts of interest and the principle that Directors should always act in
the best interests of the Company
All of the Directors of the Company, except for Dr. Ann Marie Agius, Mr. Francis Gouder and Mr. Jean
Paul Debono are Executive Officers of the Company. The other Executive Directors have a direct
beneficial interest in the share capital of the Company, and as such are susceptible to conflicts arising
between the potentially diverging interests of the shareholders and the Company. During the financial
year under review, no private interests or duties unrelated to the Company were disclosed by the
Directors which were or could have been likely to place any of them in conflict with any interests in, or
duties towards, the Company.
The Audit Committee has the task to ensure that any potential conflicts of interest are resolved in the
best interests of the Company. Furthermore, in accordance with the provisions of article 145 of the
Companies Act (Cap. 386 of the Laws of Malta), every Director who is in any way, whether directly or
indirectly, interested in a contract or proposed contract with the Company is under the duty to fully
declare his interest in the relevant transaction to the Board at the first possible opportunity and he will
not be entitled to vote on matters relating to the proposed transaction and only parties who do not have
any conflict in considering the matter will participate in the consideration of the proposed transaction.
Principle Twelve - Corporate Social Responsibility
Principle Twelve encourages Directors of listed companies to adhere to accepted principles of corporate
social responsibility
The Company seeks to adhere to sound Principles of Corporate Social Responsibility in its management
practices, and is committed to enhance the quality of life of all stakeholders and of the employees of the
Company and the Group.
The Board is strongly committed to the environment, and to the welfare of the community in which we
operate. All directors are mindful that sustainable development and environmental protection are
critical, both for the success of our tourism and development activities, and for the benefit of our
community’s quality of life. To this end, the Group has taken initiatives to minimise its consumption of
natural resources, reduce its generation of waste, and to incorporate sustainability principles and
attractive design in its developments.
In carrying on its business the Group is fully aware and at the forefront to preserving the environment
and continuously review its policies aimed at respecting the environment and encouraging social
responsibility and accountability.
18
Stivala Group Finance p.l.c.
Corporate Governance Statement
for the year ended 31 December 2025
Internal Control
The Board is ultimately responsible for the Company’s system of internal controls and for reviewing
its effectiveness. The Directors are aware that internal control systems are designed to manage, rather
than eliminate, the risk of failure to achieve business objectives, and can only provide reasonable, and
not absolute, assurance against normal business risks.
During the financial year under review the Company operated a system of internal controls which
provided reasonable assurance of effective and efficient operations covering all controls, including
financial and operational controls and compliance with laws and regulations. Processes are in place for
identifying, evaluating and managing the significant risks facing the Company.
Other key features of the system of internal control adopted by the Company in respect of its own
internal control as well as the control of its subsidiaries and affiliates are as follows:
Risk identification
The Board, with the assistance of the management team of the Company, is responsible for the
identification and evaluation of key risks applicable to the areas of business in which the Company and
its subsidiaries are involved. These risks are assessed on a continual basis and any potential exposure
is discussed regularly at Board and management level, with a view to mitigation thereof, where
possible.
Information and communication
Periodic strategic reviews which include consideration of long-term financial projections and the
evaluation of business alternatives are regularly convened by the Board. Regular budgets are prepared
and performance against these plans is actively monitored and reported to the Board.
In conclusion, the Board considers that the Company has generally been in compliance with the
Principles throughout the period under review as befits a company of this size and nature.
19
Stivala Group Finance p.l.c.
Corporate Governance Statement
for the year ended 31 December 2025
Non-compliance with the principles and the reasons therefor have been identified below.
Code Provision
Explanation
4.2.7 – The Responsibilities of the Board and
Board Meetings
The Board has not formally developed a succession
policy for the future composition of the Board of
Directors as recommended by Code Provision 4.2.7. In
practice, however, the Board is actively engaged in
succession planning and involved in ensuring that
appropriate schemes to recruit, retain and motivate
employees and Senior Management are in place.
7.1 – Evaluation of the Board’s performance
The Board has not appointed a committee for the
purpose of undertaking an evaluation of the Board’s
performance. The Board believes that the size of the
Company and the Board itself does not warrant the
establishment of a committee specifically for the
purpose of carrying out a performance evaluation of its
role. The size of the Board is such that it should enable
it to evaluate its own performance without the
requirement of setting up an ad-hoc committee for this
purpose. The Board shall retain this matter under
review over the coming year.
8B - Committees
The Board has not appointed a Nominations
Committee, particularly of the appointment process
being specifically set out in the Articles of Association.
The Board, however, intends to keep under review the
utility and possible advantages of having a
Nominations Committee and following an evaluation
may, if the need arises, make recommendations to the
shareholders for a change to the Articles of Association.
Approved by the Board on 28 April 2026 and signed on its behalf by:
_______________________________ _______________________________
Mr. Michael Stivala Mr. Ivan Stivala
CEO and Director Director
20
Stivala Group Finance p.l.c.
Other Disclosure in Terms of Capital Market Rules
for the year ended 31 December 2025
Shareholder register information pursuant with Capital Market Rule 5.64
- Structure of Capital
The Company has an authorised share capital of €500,000 Ordinary Shares of €1 each and issued and
fully paid up share capital of €258,804 with a nominal value of €1 each. Each Ordinary Share is entitled
to one vote. The Ordinary Shares in the Company shall rank pari passu for all intents and purposes at
law. There are currently no different classes of Ordinary Shares in the Company and accordingly all
Ordinary Shares have the same rights, voting rights and entitlements in connection with any
distribution whether of dividends or capital.
- Appointment and removal of Directors
Article 55.1A of the Company’s Memorandum and Articles of Association states that a shareholder
holding not less than 25% of the issued share capital of the Company having voting rights or a number
of shareholders who between them hold not less than 25% of the issued share capital of the Company
having voting rights ("a qualifying shareholder") shall be entitled to appoint (1) director for every such
qualifying shareholding, by letter addressed to the Company. Any shareholder who does not qualify
to appoint directors in terms of the provisions of paragraph (a) of this sub-article 55.1, and who has not
aggregated his holdings with those of other shareholders for the purposes of appointing a director(s)
pursuant thereto shall be entitled to participate and vote in an election of directors to take place once
in every year at the Annual General Meeting of the Company.
The Chairman shall be appointed by the directors at their first meeting following the annual general
meeting in each year, save for the first chairman who shall retain the post of chairman until such time
as he resigns or is earlier removed in accordance with the provisions of the articles regulating the
removal of directors.
Any director may be removed at any time by the Company in general meeting. The director who is to
be removed shall be given opportunity of making representations to the general meeting at which a
resolution for his removal is to be taken.
- Powers of Directors
Subject to applicable provisions of the Articles, the directors may exercise all the powers of the
Company to borrow money and to hypothecate or charge its undertaking, property and uncalled
capital or any part thereof, and to issue equity securities and debt securities on such terms, in such
manner and for such consideration as they think fit, whether outright or as security for any debt,
liability or obligation of the Company or of any third party. Provided that the members in general
meeting may, from time to time, restrict and limit the aforesaid powers of the directors, in such manner
as they may deem appropriate.
- General Meetings
Subject to the provisions of the Act, the Company shall in each year hold an annual general meeting at
such time and place as the directors shall appoint. All general meetings other than the annual general
meetings shall be called extraordinary general meetings. The Directors may convene an extraordinary
general meeting whenever they think fit. Extraordinary general meetings may also be convened on
such requisition, or in default, may be convened by such requisitionists, as provided by the Act. If at
any time, there are not in Malta sufficient directors capable of acting to form a quorum, any director, or
any two members of the Company, may convene an extraordinary general meeting in the same manner,
as nearly as possible, as that in which meetings may be convened by the Directors.
21
Independent Auditor's Report
to the shareholders of Stivala Group Finance p.l.c.
Report on the Financial Statements for the year ended 31 December 2025
Opinion
We have audited the individual financial statements of Stivala Group Finance p.l.c. (“the Company”)
and the consolidated financial statements of the Company and its subsidiaries (together, “the Group”),
set out on pages 29 to 100, which comprise the consolidated statement of financial position as at 31
December 2025, consolidated statement of comprehensive income, consolidated statement of changes
in equity and the consolidated statement of cash flows for the year then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements give a true and fair view of the financial position
of the Group and the Company as at 31 December 2025, and of the Group’s and the Company’s financial
performance and cash flows for the year then ended in accordance with International Financial
Reporting Standards as adopted by the European Union and have been properly prepared in
accordance with the requirements of the Companies Act, Cap. 386 of the Laws of Malta.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Group in accordance
with the International Ethics Standards Board for Accountants' Code of Ethics for Professional
Accountants (IESBA Code), together with the ethical requirements that are relevant to our audit of the
financial statements in accordance with the Accountancy Profession (Code of Ethics for Warrant
Holders) Directive issued in terms of the Accountancy Profession Act (Cap.281) in Malta, and we have
fulfilled our other ethical responsibilities in accordance with the IESBA code. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, we declare that 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 Company and the Group and we remain independent of the Company and the Group. No
other services besides statutory audit services as disclosed in the annual report in note 7 to the financial
statements were provided by us to the Company and its controlled undertakings.
22
Independent Auditor's Report
to the shareholders of Stivala Group Finance p.l.c.
Key Audit Matters
Key audit matters are those matters that in our professional judgement were of most significance in our
audit of the financial statements of the current period. These matters where addressed in the context of
our audit of the financial statements as a whole and in forming our opinion thereon.
We do not provide a separate opinion on these matters.
1. Valuation of Investment property
Risk description
The Group’s investment property comprises of Offices, Commercial and Residential premises,
amounting to €229,966,355 as disclosed in Note 17. This represents 41% of the Company's total
assets as of 31 December 2025. A full revaluation assessment was carried out last year on all
the properties in accordance with accounting policy(s). Valuation reports were obtained from
third party qualified valuers for all of the Group’s properties, classified as investment propert y.
The valuation of the Group’s property portfolio is inherently subjective due to, among other
factors, the individual nature of each investment property, its location and the expected future
returns. Due to the significance of this investment property, and the dependency of the
Company on this asset, we have considered that this is a key audit matter.
How the scope of our audit responded to the risk
Our procedures in relation to the valuation of the properties included:
- Reviewing the methodologies used by the external valuers and by management to estimate
the fair value for all properties. We confirmed that the valuation approach for each property
was suitable for use in determining the carrying value of properties as at 31 December 20 25.
- Testing the mathematical accuracy of the calculations derived from each model.
- Assessing the key inputs in the calculations such as revenue growth and discount rate, by
reference to management’s forecasts, rental agreements for investment property, data external
to the Group and our own expertise.
- Considering the appropriateness of the fair values estimated by the external valuers based on
our knowledge of the industry.
- Considering the potential impact of reasonably possible changes in the key assumptions
underlying the valuations. We challenged the Company’s valuations to assess whether they
fell within a reasonable range of the expectations developed. Management were able to provide
explanations and refer to appropriate supporting evidence.
We have also assessed the relevance and adequacy of the disclosures relating to this investment
property in accounting policy note(s) and in note 17 to the financial statements.
Findings
The result of our testing was satisfactory and we concur that the valuations of the investment
property are appropriate.
23
Independent Auditor's Report
to the shareholders of Stivala Group Finance p.l.c.
Other Information
The Directors are responsible for the other information. The other information comprises of the
Chairman’s Statement, Directors' Report and Corporate Governance Statement of Compliance.
Our opinion on the financial statements does not cover this information. Except for our opinion on the
Directors’ Report in accordance with the Companies Act, Cap. 386 of the Laws of Malta and on the
Corporate Governance Statement of Compliance in accordance with the Capital Market Rules issued
by the Malta Financial Services Authority, our opinion on the financial statements does not cover the
other information and we do not express any form of assurance conclusion thereon.
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.
With respect to the Directors' Report, we also considered whether the Directors' Report includes the
disclosures required by Article 177 of the Companies Act, Cap. 386 of the Laws of Malta. Based on the
work we have performed, in our opinion:
- the information given in the Directors' Report for the year ended 31 December 2025 is
consistent with the financial statements; and
- the Directors' Report has been prepared in accordance with the Companies Act, Cap. 386 of
the Laws of Malta.
In addition, in light of the knowledge and understanding of the Company and the Group 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 and other information that we obtained prior to the
date of this auditor’s report. Based on the work we have performed, we have nothing to report in this
regard.
24
Independent Auditor's Report
to the shareholders of Stivala Group Finance p.l.c.
Responsibilities of the Directors and the Audit Committee for the financial statements
The Directors are responsible for the preparation of the financial statements that give a true and fair
view in accordance with the International Financial Reporting Standards as adopted by the European
Union, and for such internal controls 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 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 or to cease
operations, or have no realistic alternative to do so. 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.
The Directors have delegated the responsibility for overseeing the Company's financial reporting
process to the Audit Committee.
Auditors' Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an 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.
25
Independent Auditor's Report
to the shareholders of Stivala Group Finance p.l.c.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
- Identify and assess the risk 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 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 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 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.
- Obtain sufficient appropriate evidence regarding the financial information of the entities or
business activities within the Group to express 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 the Audit Committee regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the Audit Committee 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 our independence, and where applicable related
safeguards.
From the matters communicated with the Audit Committee, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditors' report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication. There are no
such undisclosed matters.
26
Independent Auditor's Report
to the shareholders of Stivala Group Finance p.l.c.
Report on other legal and regulatory requirements
The Annual Report and Consolidated Financial Statements of Stivala Group Finance p.l.c. for the year
ended 31 December 2025 contains other areas required by legislation on which we are required to
report. The directors are responsible for these other areas.
Report on the Statement of Compliance with the Principles of Good Corporate Governance
The Capital Market Rules issued by the Malta Financial Service Authority require the directors to
prepare and include in their Annual Report a Corporate Governance Statement 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 with those
Principles.
The Capital Market 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 Corporate Governance Statement cover all the risks and controls, or form an opinion
on the effectiveness of the Company's corporate governance procedures or its risks and control
procedures.
In our opinion:
- the Corporate Governance Statement set out on pages 11 to 19 has been properly prepared in
accordance with the requirements of the Capital Market Rules 5.94 and 5.97.
- 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.
Under the Capital Market Rules we also have the responsibility to:
- review the statement made by the Directors, set out on pages 4 to 10, 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.
27
Independent Auditor's Report
to the shareholders of Stivala Group Finance p.l.c.
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) A ssurance Directive (the “ESEF
Directive 6”) on the Annual Financial Report of Stivala Group Finance p.l.c. for the year ended 31
December 2025, entirely prepared in a single electronic reporting format.
Responsibilities of the directors
The directors are responsible for the preparation of the Annual Financial Report, including the
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 financial statements and the relevant electronic tagging therein, complies in
all material respects with the ESEF RTS based on the evidence we have obtained. We conducted our
reasonable assurance engagement in accordance with the requirements of ESEF Directive 6.
Our procedures included:
- Obtaining an understanding of the entity's financial reporting process, including the preparation of
the Annual Financial Report, in 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; and
- 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 December 2025 has been prepared,
in all material respects, in accordance with the requirements of the ESEF RTS.
28
Independent Auditor's Report
to the shareholders of Stivala Group Finance p.l.c.
Other matters on which we are required to report by exception under the Companies Act
We also have responsibilities:
- under the Maltese Companies Act (Cap. 386) to report to you if, in our opinion:
- adequate accounting records have not been kept, or that returns adequate for our audit have
not been received from branches not visited by us;
- the financial statements are not in agreement with the accounting records and returns;
- we have not received all the information and explanations we require for our audit; and
- certain disclosures of Directors' remuneration specified by law are not made in the financial
statements, giving the required particulars in our report.
We have nothing to report to you in respect of these responsibilities.
Appointment and audit tenure
We were first appointed by those charged with governance to act as statutory auditor by the board of
Directors on 12 October 2020. Our appointment has been renewed annually by shareholder resolution
representing a total uninterrupted engagement of 6 years.
Consistency of the audit report 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 in accordance with the provisions of article 11 of the EU Audit Regulation No.
537/2014, which was issued on the same date as this report.
The partner in charge of the audit resulting in this independent auditor's report is
Fiona Buttigieg for and on behalf of
HLB CA Falzon
Registered Auditors
28 April 2026
29
Stivala Group Finance p.l.c.
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
for the year ended 31 December 2025

| Note | The Group |  | The Company |
|  | 202 5 | 202 4 | 202 5 | 202 4
|  | € | € | € | €
Revenue from contracts with customers | 6 | 22,069,218 | 19,192,150 | - | -
Rental income | 23 | 10,920,582 | 10,283,694 | - | -
Revenue |  | 32,989,800 | 29,475,844 | - | -
Cost of sales and services | 7 | (9,567,862) | (8,197,792) | - | -
Gross profit |  | 23,421,938 | 21,278,052 | - | -
Distribution and selling costs | 7 | (194,613) | (132,059) | - | -
Administrative expenses | 7 | (9,158,380) | (9,648,241) | (58,487) | (69,044)
Other operating income | 8 | 4,440,779 | 36,302,576 | 3,630 | -
Operating profit/(loss) |  | 18,509,724 | 47,800,328 | (54,857) | (69,044)
Change in fair value of investment properties | 17 | 4,512,600 | 209,000 | - | -
Share in profit/(loss) of associates | 15 | (154,706) | 25,742 | - | -
Dividends income |  | 287,568 | 277,125 | 7,545,140 | 23,854,283
Finance and similar income |  | 20,000 | 20,000 | - | -
Finance costs | 10 | (4,251,748) | (4,400,019) | (2,407,500) | (2,407,500)
Profit/(loss) before tax |  | 18,923,438 | 43,932,176 | 5,082,783 | 21,377,739
Income tax credit | 12 | 1,420,427 | 6,399,557 | (95,384) | (211,996)
Profit/(loss) for the year |  | 20,343,865 | 50,331,733 | 4,987,399 | 21,165,743

The notes on page 38–100 form part of these financial statements.
30
Stivala Group Finance p.l.c.
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
for the year ended 31 December 2025

| Note | The Group |  | The Company |
|  | 202 5 | 202 4 | 202 5 | 202 4
|  | € | € | € | €
Profit/(loss) for the year |  | 20,343,865 | 50,331,733 | 4,987,399 | 21,165,743
Other comprehensive |  |  |  |  |
income |  |  |  |  |
Items that will not be subsequently reclassified to profit or loss: |  |  |  |  |
Change in fair value of property, plant and equipment due to revaluation, net of deferred tax | 27 | 11,784,745 | - | - | -
Total comprehensive income/(loss) for the year |  | 32,128,610 | 50,331,733 | 4,987,399 | 21,165,743
Earnings/(loss) per share (cents) |  |  |  |  |
- Basic profit/(loss) for year attributable to ordinary equity holders of the parent | 26 | 78.61 | 194.48 | 19.27 | 81.78

The notes on page 38–100 form part of these financial statements.
31
Stivala Group Finance p.l.c.
Consolidated Statement of Financial Position
for the year ended 31 December 2025

| Note | The Group |  | The Company |
|  | 202 5 | 202 4 | 202 5 | 202 4
|  | € | € | € | €
ASSETS |  |  |  |  |
Non-current a ssets |  |  |  |  |
Property, plant & equipment | 13 | 220,385,411 | 183,159,731 | - | -
Intangible assets | 18 | 66,643,656 | 66,540,477 | - | -
Investment in subsidiaries | 14 | - | - | 60,004,872 | 60,004,872
Investment in associates | 15 | 151,369 | 306,078 | - | -
Investment property | 17 | 229,966,356 | 221,191,006 | - | -
Right-of-use assets | 23 | 109,056 | 152,297 | - | -
Deferred taxation | 24 | 18,494,450 | 16,756,099 | 127,822 | 223,206
Total non-cu rrent assets |  | 535,750,298 | 488,105,688 | 60,132,694 | 60,228,078
Current asset s |  |  |  |  |
Inventories | 19 | 53,099 | 22,417 | - | -
Property held-for-sale | 20 | 2,435,817 | 4,235,816 | - | -
Trade and other receivables | 21 | 5,225,728 | 3,130,161 | 649 | -
Current tax |  |  |  |  |
recoverable | 12 | - | - | 22,095 | 22,095
Other financial assets | 16 | 10,784,898 | 13,671,083 | 10,962,203 | 7,983,898
Cash and cash equivalents | 28 | 6,595,934 | 1,454,965 | - | 4,011
Total current a ssets |  | 25,095,476 | 22,514,442 | 10,984,947 | 8,010,004
Total asset s |  | 560,845,774 | 510,620,130 | 71,117,641 | 68,238,082

The notes on page 38–100 form part of these financial statements.
32
Stivala Group Finance p.l.c.
Consolidated Statement of Financial Position
for the year ended 31 December 2025

| Note | The Group |  | The Company |
|  | 202 5 | 202 4 | 202 5 | 202 4
EQUITY AND |  |  |  |  |
LIABILITIES |  | € | € | € | €
Equity |  |  |  |  |
Issued capital | 25 | 258,804 | 258,804 | 258,804 | 258,804
Revaluation reserve | 27 | 277,289,381 | 261,353,044 | - | -
Retained earnings |  | 109,294,191 | 97,251,669 | 2,663,540 | 1,825,891
Total equit y |  | 386,842,376 | 358,863,517 | 2,922,344 | 2,084,695
Non-current |  |  |  |  |
liabilities |  |  |  |  |
Interest bearing loans and borrowings | 16 | 95,469,487 | 93,107,559 | 59,910,000 | 59,850,000
Finance lease liability | 16, 23 | 94,231 | 129,497 | - | -
Deferred taxation | 24 | 48,050,326 | 33,629,848 | - | -
Total non-cu rrent |  |  | 126,866,904 | 59,910,000 | 59,850,000
liabilities |  | 143,614,044 |  |  |
Current liabi lities |  |  |  |  |
Current borrowings | 16 | 18,047,672 | 9,358,520 | 7,373,085 | 5,439,181
Finance lease liability | 16, 23 | 35,266 | 42,863 | - | -
Trade and other payables | 22 | 12,274,675 | 15,456,585 | 912,212 | 864,206
Current tax due | 12 | 31,741 | 31,741 | - | -
Total current liabilities |  | 30,389,354 | 24,889,709 | 8,285,297 | 6,303,387
Total liabilit ies |  | 174,003,398 | 151,756,613 | 68,195,297 | 66,153,387
Total equit y and |  |  |  |  | 68,238,082
liabilities |  | 560,845,774 | 510,620,130 | 71,117,641 |

The notes on page 38–100 form part of these financial statements.
These financial statements set out on pages 29 to 100 were approved and authorized for issue by the
Board of Directors and signed on its behalf on 28 April 2026 by. Mr. Michael Stivala (CEO) and Mr.
Ivan Stivala (Director) as per the Directors’ Declaration on ESEF Annual Financial Reports submitted
in conjunction with the Annual Financial Report 2025.
33
Stivala Group Finance p.l.c.
Consolidated Statement of Changes in Equity
for the year ended 31 December 2025

| The Group |  |  |
| Issued capital | Revaluation reserve | Retained earnings | Total Equity
| € | € | € | €
Balance as at 1 |  |  |  |
January 2024 | 255,000 | 261,160,764 | 67,112,217 | 328,527,981
Issuance of share capital | 3,804 | - | - | 3,804
Profit for the year | - | - | 50,331,733 | 50,331,733
Total comprehensive income for the yea r | - | - | 50,331,733 | 50,331,733
Transfer of fair gain on investment property, net of deferred tax (no te 27) | - | 192,281 | (192,281) | -
Dividends distributed (note 13) | - | - | (20,000,000) | (20,000,000)
Balance a s at 31 December 20 24 | 258,804 | 261,353,045 | 97,251,669 | 358,863,517

34
Stivala Group Finance p.l.c.
Consolidated Statement of Changes in Equity
for the year ended 31 December 2025

| The Group |  |  |
| Issued capital | Revaluation reserve | Retained earnings | Total Equity
| € | € | € | €
Balance as at 1 |  |  |  |
January 2025 as previously reported | 258,804 | 261,353,045 | 97,251,669 | 358,863,517
Profit for the year | - | - | 20,343,865 | 20,343,865
Other comprehensive income (note 27) | - | 11,784,745 | - | 11,784,745
Total comprehensi ve | - | 11,784,745 | 20,343,865 |
income for the yea r |  |  |  | 32,128,610
Transfer of fair gain on investment property, net of deferred ta x (note 27) | - | 4,151,593 | (4,151,593) | -
Dividends distributed(note 13) | - | - | (4,149,750) | (4,149,750)
Balance a s at 31 December 20 25 | 258,804 | 277,289,383 | 109,294,191 | 386,842,376

The notes on page 38–100 form part of these financial statements.
35
Stivala Group Finance p.l.c.
Statement of Changes in Equity
for the year ended 31 December 2025
The Company
Issued capital
Retained
earnings
Total
Equity
€
€
€
Balance as at 1 January 2024
255,000
660,148
915,148
Issuance of share capital
3,804
-
3,804
Profit for the year
-
21,165,743
21,165,743
Total comprehensive loss for the year
-
21,825,891
22,084,695
Dividends distributed (note 13)
-
(20,000,000)
(20,000,000)
Balance as at 31 December 2024
258,804
1,825,891
2,084,695
Balance as at 1 January 2025
258,804
1,825,891
2,084,695
Profit for the year
-
4,987,399
4,987,399
Total comprehensive income for the
year
-
6,813,290
6,813,290
Dividends distributed (note 13)
-
(4,149,750)
(4,149,750)
Balance as at 31 December 2025
258,804
2,663,540
2,922,344
The notes on page 38–100 form part of these financial statements.
36
Stivala Group Finance p.l.c.
Consolidated Statement of Cash Flows
for the year ended 31 December 2025

| Note | The Group |  | The Company |
|  | 202 5 | 2024 | 2025 | 2024
|  | € | € | € | €
Cash flows from operating activities |  |  |  |  |
Profit/(loss) before tax |  | 18,923,438 | 43,932,176 | 5,082,783 | 21,377,739
Adjustments fo r: |  |  |  |  |
Change in fa ir value of investm ent propert ies | 17 | (4,512,600) | (209,000) | - | -
Share in profit/(loss) of ass ociates | 15 | 154,711 | (25,742) | -- |
Depreciation of right-of-u se assets and property, p lant and |  |  |  |  |
equipment | 7 | 2,546,042 | 5,915,334 | -- |
Amortisation of intangible ass ets | 18 | 54,871 | 15,359 | - | -
Provision fo r expected credit losses (ECL) | 7, 8 | (344,878) | (4,196,830) | (3,630) | 31,705
Dividends income |  | (287,568) | (277,125) | (7,545,140) | (23,854,283)
Finance and s i milar income |  | (20,000) | (20,000) | - | -
Finance costs | 10 | 4,093,785 | 4,400,019 | 2,407,500 | 2,407,500
Working capita l changes: |  |  |  |  |
Increase in inve ntories | 19 | (30,682) | 3,139 | - | -
Decrease / (in crease) in prope r ty held-for-sale | 20 | 1,799,998 | 483,813 | - | -
Decrease / (in crease) in receivables |  | (2,215,769) | 2,948,813 | (649) | -
(Decrease) / inc rease in payab l es |  | 2,318,525 | 4,451,664 | 48,006 | 7,075
Interest paid on overdraft |  | - | (4,232) | - | -
Taxation paid | 12 | 567,005 | (1,240,502) | - | (854,283)
Taxation refunde d | 12 | (840,140) | (19,173) | - | 854,283
Net cash generated from / (used in) operating activities |  | 22,206,738 | 56,157,713 | (11,130) | (30,264)

The notes on page 38–100 form part of these financial statements.
37
Stivala Group Finance p.l.c.
Consolidated Statement of Cash Flows
for the year ended 31 December 2025

| Note | The Group |  | The Company |
|  | 202 5 | 2024 | 2025 | 2024
|  | € | € | € | €
Cash flows from investing activities |  |  |  |  |
Payments to acqu i re non-curren t intangible assets | 18 | (4,228,456) | (30,046,236) | - | -
Payments to acqu i re prope rty, plant and equipment | 13 | (21,598,105) | (8,393,195) | - | -
Payments to acqu i re investmen t property | 17 | (4,262,750) | (9,338,206) | - | -
Receipts from disp osal of non-current financial assets | 14 | - | - | (2,974,675) | (8,005,201)
Dividends receive d |  | 287,568 | 277,125 | - | -
Advances from d i rectors |  | (633,369) | (633,369) | - | -
Net cash (used in) / generated from investing activities |  | (30,345,112) | (48,133,881) | (2,974,675) | (8,005,201)
Cash flows from financing activities |  |  |  |  |
Issuance of sh are capital | 22 | - | 3,804 | - | 3,804
Equity dividends paid |  | (4,149,750) | (20,000,000) | - | -
(Repayments t o)/advances fr o m banks loans |  | 63,718 | 13,465,352 | - | -
Advances fr om subsidiary co mpany |  | - | - | - | 23,476,711
Advances fr om/(to) other related companies |  | 7,177,906 | 2,074,988 | - | -
Advances to asso c iates |  | (605,704) | 816,362 | - | -
Repayment of lease liabilities | 23 | (132,281) | (138,042) | - | -
Advances to o ther companies |  | 11,633 | 19,226 | - | -
Payments to sha r eholder |  | - | - | (2,215,965) | (13,095,624)
Interest paid on b o nds | 10 | (2,347,500) | (2,347,500) | (2,347,500) | (2,347,500)
Net cash (used in) / generated from financing activities |  | 18,022 | (6,105,810) | (4,563,465) | 8,037,391
Movement of ECL on cash in banks | 28 | 2,261 | 65 | - | -
Net movement in cash and cash equivalents |  | (8,210,352) | 1,918,022 | (7,549,270) | 1,926
Cash and cash equivalents at beginning of year |  | (210,996) | (2,129,083) | 4,011 | 2,085
Cash and cash equivalents at end of year | 28 | (8,419,087) | (210,996) | (7,545,259) | 4,011

The notes on page 38–100 form part of these financial statements.
38
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
1. Corporate information
The consolidated financial statements of Stivala Group Finance p.l.c. and its subsidiaries (“the
Group”) for the year ended 31 December 202 5 were authorized for issue in accordance with a
resolution of the Directors on 28 April 2026.
Stivala Group Finance p.l.c. (“the Company”) with registration no. of C 82218 is a limited liability
company listed on the Malt a Stock Exchange and is incorporated in Malta, under t he Companies
Act, Ca p. 386 of the Laws of M alta. The Company is a holding c ompan y of the Carmelo Stivala
Group Limited, which is mainly involved to act as a holding company and to rent out properties
to its subsidiaries for hospitality and property development/letting purposes. Its registered office
is at 143, The Strand, Gzira, Malta.
2. Significant accounting policies
2.1 Basis of preparation and consolidation
Basis of preparation
These financial statements are prepared under the historical cost convention, as modified by the
measurement of investment properties and buildings under property, plant and equipment in
accordance with the requirements of the International Financial Reporting Standards (IFRS) as
adopted by the European Union and in compliance with the Companies Act, Cap. 386 of the Laws
of Malta. The consolidated financial statements are presented in Euro (€), which is the functional
currency of the Group.
Further information concerning fair value, fair value hierarchy and transfers therein are outlined
in detail in notes 2.21 to the financial statements.
Consolidation
The consolidated financial statements comprise the financial statements of the Company and its
subsidiaries as at 31 December 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
39
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
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.
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.
2.2 Current versus non-current classification
The Group presents assets and liabilities in the statement of financial position based on current/non-
current classification. An asset is current when it is:
- Expected to be realised or intended to be sold or consumed in the normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realised within twelve months after the reporting date; or
- Cash and cash equivalents unless restricted from being exchanged or used to settle a liability for
at least twelve months after the reporting date.
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in the normal operating cycle;
- It is held primarily for the purpose of trading;
- It is due to be settled within twelve months after the reporting date; or
- There is no unconditional right to defer the settlement of the liability for at least twelve months
after the reporting date.
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
2.3 Investment in associate
An associate is an entity over which the group has significant influence but not control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Significant influence
is also the power to participate in the financial and operating policy decisions of the investee, but
is not control or joint control over those policies.
The considerations made in determining significant influence are similar to those necessary to
determine control over subsidiaries. The Group’s investment in its associate are accounted for using
the equity method.
Under the equity method, the investment in an associate 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 since the acquisition date. Goodwill relating to the associate is included in the carrying
amount of the invest ment and is not tested f or impairment sepa rately.
40
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
The statement of profit or loss reflects the Group’s share of the results of operations of the associate.
In addition, when there has been a change recognised directly in the equity of the associate, the
Group recognises its share of any changes, when applicable, in the statement of changes in equity.
Unrealised gains and losses resulting from transactions between the Group and the associate are
eliminated to the extent of the interest in the associate.
The aggregate of the Group’s share of profit or loss of an associate is shown on the face of the
statement of profit or loss outside operating profit and represents profit or loss after tax and
noncontrolling interests in the subsidiaries of the associate.
The financial statements of the associate are prepared for the same reporting period as the Group.
When necessary, adjustments are made to bring the accounting policies in line with those of the
Group.
After application of the equity method, the Group determines whether it is necessary to recognise
an impairment loss on its investment in its associate. At each reporting date, the Group determines
whether there is objective evidence that the investment in the associate is impaired. If there is such
evidence, the Group calculates the amount of impairment as the difference between the recoverable
amount of the associate and its carrying value, and then recognises the loss within ‘Share of profit
of an associate’ in the statement of profit or loss.
Upon loss of significant influence over the associate, the Group measures and recognises any
retained investment at its fair value. Any difference between the carrying amount of the associate
upon loss of significant influence or joint control and the fair value of the retained investment and
proceeds from disposal is recognised in profit or loss.
2.4 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.
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as financial assets measured at amortized cost,
fair value through profit or loss (FVTPL) and fair value through other comprehensive income
(FVOCI). All financial assets are recognized initially at fair value plus, in the case of financial assets
not recorded at FVTPL, transaction costs that are attributable to the acquisition of the financial
asset.
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. Trade receivables that do not contain a significant financing component or for which the
Group has applied the practical expedient are measured at the transaction price determined under
IFRS 15. Refer to the accounting policies in section 2.16 (Revenue from contracts with customers).
In order for a financial asset to be classified and measured at amortised cost or FVOCI, it needs to
give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal
amount outstanding. This assessment is referred to as the SPPI test and is performed at an
instrument level. Financial assets with cash flows that are not SPPI are classified and measured at
fair value through profit or loss, irrespective of the business model.
The Group’s business model for managing financial assets refers to how it manages its financial
assets in order to generate cash flows. The business model determines whether cash flows will
result from collecting contractual cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time frame established
by regulation or convention in the market place (regular way trades) are recognised on the trade
date, i.e., the da te that the Group commit s to purchas e or sell the asset.
41
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
Subsequent measurement
For purposes of subsequent measurement, financial assets in these financial statements are
classified in four categories:
- financial assets at amortised cost (debt instruments)
- financial assets at FVOCI with recycling of cumulative gains and losses (debt instruments)
- financial assets designated at FVOCI with no recycling of cumulative gains and losses upon
derecognition (equity instruments)
- financial assets at FVTPL
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the effective interest (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 Group’s financial assets at amortised cost include cash in banks, trade and other receivables,
and receivables from associates, directors and other related undertakings which are included under
current financial assets.
Financial assets at FVOCI (debt instruments)
For debt instruments at FVOCI, interest income, foreign exchange revaluation and impairment
losses or reversals are recognised in the statement of profit or loss and computed in the same
manner as for financial assets measured at amortised cost. The remaining fair value changes are
recognised in OCI. Upon derecognition, the cumulative fair value change recognised in OCI is
recycled to profit or loss.
As at 31 December 2025 and 2024, the Group has no debt instruments at FVOCI.
Financial assets designated at FVOCI (equity instruments)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity
instruments designated at FVOCI when they meet the definition of equity under IAS 32 Financial
Instruments: Presentation and are not held for trading. The classification is determined on an
instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are
recognised as other income in the statement of profit or loss when the right of payment has been
established, except when the Company benefits from such proceeds as a recovery of part of the cost
of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated
at FVOCI are not subject to impairment assessment.
As at 31 December 2025 and 2024, the Group has no equity instruments at FVOCI.
Financial assets at FVTPL
Financial assets at FVTPL are carried in the statement of financial position at fair value with net
changes in fair value recognised in the statement of profit or loss.
This category includes derivative instruments and listed equity investments which the Group had
not irrevocably elected to classify at FVOCI. Dividends on listed equity investments are recognised
as other income in the statement of profit or loss when the right of payment has been established.
A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is
separated from the host and accounted for as a separate derivative if: the economic characteristics
and risks are not closely related to the host; a separate instrument with the same terms as the
embedded derivative would meet the definition of a derivative; and the hybrid contract is not
measured at fair value through profit or loss. Embedded derivatives are measured at fair value
with changes in fair value recognised in profit or loss. Reassessment only occurs if there is either a
change in the terms of the contract that significantly modifies the cash flows that would otherwise
be required or a reclassification of a financial asset out of the fair value through profit or loss
category.
As at 31 December 2025 and 2024, the Group has no financial assets at FVTPL.
42
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a Group of similar
financial assets) is primarily derecognised (i.e., removed from the Group’s statement of financial
position) when:
- the rights to receive cash flows from the asset have expired; or
- the Group has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under
a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the
risks and rewards of the asset, or (b) the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into
a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and
rewards of ownership. When it has neither transferred nor retained substantially all of the risks
and rewards of the asset, nor transferred control of the asset, the Group continues to recognise the
transferred asset to the extent of its continuing involvement. In that case, the Group also recognises
an associated liability. The transferred asset and the associated liability are measured on a basis
that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured
at the lower of the original carrying amount of the asset and the maximum amount of
consideration that the Group could be req uired to repay.
Impairment
Further disclosures relating to impairment of financial assets are also provided in notes 3 and 31
to the consolidated financial statements.
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not
held at fair value through profit or loss. ECLs are based on the difference between the contractual
cash flows due in accordance with the contract and all the cash flows that the Company expects to
receive, discounted at an approximation of the original effective interest rate.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant
increase in credit risk since initial recognition, ECLs are provided for credit losses that result from
default events that are possible within the next 12-months (a 12-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since initial recognition, a
loss allowance is required for credit losses expected over the remaining life of the exposure,
irrespective of the timing of the default (a lifetime ECL).
For trade receivables, 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.
For cash in bank, other receivables, receivables from associates, directors and other related
undertakings, the Group applies a general approach in calculating ECLs. Therefore, the Group
tracks changes in credit risk, and recognises a loss allowance based on either 12-month ECLs or
lifetime ECLs, depending on whether there has been a significant increase in credit risk on the
financial instrument since initial recognition. This is being done by considering the change in the
risk of default occurring over the remaining life of the financial instrument. The key elements in
the calculation of ECLs are the Probability of Default (PD), Exposure at Default (EAD) and Loss
Given Default (LGD).
43
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
The following are the key elements in the calculation of ECLs:
a. Probability of Default
(PD)
The PD is an estimate of the likelihood of default over a given time
horizon. A default may only happen at a certain time over the
assessed period, if the financial asset has not been previously
derecognised.
b. Exposure at Default
(EAD)
The EAD is an estimate of the exposure at a future default date,
taking into account expected changes in the exposure after the
reporting date.
c. Loss Given Default
(LGD)
The LGD is an estimate of the loss arising in the case where a default
occurs at a given time. It is based on the difference between the
contractual cash flows due and those that the lender would expect to
receive.
The mechanics of the ECL method are summarised below:
Stage 1:
The 12-month ECL is calculated as the portion of lifetime ECL that
represent the ECL that result from default events on a financial
instrument that are possible within the 12 months after the reporting
date. The Group calculates the 12-month ECL allowance based on the
expectation of a default occurring in the 12 months following the
reporting date. These expected 12-month default probabilities are
applied to a forecast EAD and multiplied by the expected LGD.
Stage 2:
When a financial asset has shown a significant increase in credit risk
since origination, the Group records an allowance for the lifetime
ECL. The mechanics are similar to those explained above, but PDs
and LGDs are estimated over the lifetime of the instrument.
Stage 3:
For financial asset considered as credit-impaired, the Group
recognises the lifetime ECL. The method is similar to that for Stage 2
financial assets, with the PD set at 100%.
The Group considers a financial asset in default when contractual payments are 90 days past due.
However, in certain cases, the Group may also consider a financial asset to be in default when
internal or external information indicates that the Group is unlikely to receive the outstanding
contractual amounts in full before taking into account any credit enhancements held by the Group.
A financial asset is written off when there is no reasonable expectation of recovering the contractual
cash flows.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, loans and
borrowings or as derivatives designated as hedging instruments in an effective hedge, as
appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings
and payables, net of directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables, loans and borrowings including
bank overdrafts.
Subsequent measurement
For purposes of subsequent measurement, financial liabilities are classified in two categories:
- financial liabilities at FVTPL
- financial liabilities at amortised cost (loans and borrowings)
44
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
Financial liabilities at FVTPL
Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities
designated upon initial recognition as at FVTPL.
Financial liabilities are classified as held for trading if they are incurred for the purpose of
repurchasing in the near term. This category also includes derivative financial instruments entered
into by the Group that are not designated as hedging instruments in hedge relationships as defined
by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are
designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the statement of profit or loss.
Financial liabilities designated upon initial recognition at FVTPL are designated at the initial date
of recognition, and only if the criteria in IFRS 9 are satisfied. The Group has not designated any
financial liability at FVTPL as at 31 December 2025 and 2024.
Financial liabilities at amortised cost (loans and borrowings)
This is the category most relevant to the Group. 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.
This category generally applies to interest-bearing loans and borrowings. For more information,
refer to notes 16 and 31 to the consolidated financial statements.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as the derecognition of the original liability
and the recognition of a new liability. The difference in the respective carrying amounts is
recognised in the statement of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the 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.
45
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
2.5 Property, plant and equipment
Commercial and residential properties included in buildings are stated in the statement of financial
position at its revalued amount, being the fair value at the date of revaluation. Revaluations are
performed with sufficient regularity such that the carrying amount does not differ materially from
those that would be determined using fair values at each reporting date.
A revaluation surplus is recorded in OCI and credited to the revaluation reserve in equity.
However, to the extent that it reverses a revaluation deficit of the same asset previously recognised
in profit or loss, the increase is recognised in profit and loss. A revaluation deficit is recognised in
the statement of profit or loss, except to the extent that it offsets an existing surplus on the same
asset recognised in the revaluation reserve.
Property, plant and equipment, except for revalued buildings, are stated at cost less accumulated
depreciation. Depreciation is calculated using the straight-line method to write off the cost of
property, plant and equipment less any residual value over the expected useful lives.
The annual rates used for this purpose, which are consistent with those used in the previous year,
are as follows:
Buildings
2%
Motor vehicles
20%
Kitchen equipment
16.67%
Computer equipment
25%
Plant and machinery
10%
Furniture, fittings and office equipment
10%
Electrical installations
6.67%
Energy saving equipment
16.67%
Depreciation methods, useful life and residual values are reassessed at each reporting date.
An item of property, plant and equipment is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition
of the asset (calculated as the difference between the net disposal proceeds and the carrying amount
of the asset) is included in the statement of profit or loss and other comprehensive income when
the asset is derecognised.
2.6 Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The useful lives of
intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are
amortised over the useful economic life and assessed for impairment whenever there is an
indication that the intangible asset may be impaired. The amortisation period and the amortisation
method for an intangible asset with a finite useful life are reviewed at least at each reporting date.
Changes in the expected useful life or the expected pattern of consumption of future economic
benefits embodied in the asset are considered to modify the amortisation period or method, as
appropriate, and are treated as changes in accounting estimates. The amortisation expense on
intangible assets with finite lives is recognised in the profit or loss in the expense category that is
consistent with the function of the intangible assets. These costs are amortised using a straight line
method as follows:
Computer software
25%
Gains or losses arising from derecognition of an intangible asset are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognised in
statement of profit or loss and other comprehensive income when the asset is derecognised.
46
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
2.7 Investment property
Property that is held for long-term rental yields or for capital appreciation or both, and is not
occupied by the Group, is classified as investment property. Investment property comprises
freehold land and buildings held under long-term operating leases.
Investment property is measured initially at its historical cost, including related transaction costs
and borrowing costs (if any). Historical cost includes expenditure that is directly attributable to the
acquisition of the items. Borrowing costs which are incurred for the purpose of acquiring or
constructing a qualifying investment property are capitalised as part of its cost. Borrowing costs
are capitalised while acquisition or construction is actively underway. Capitalisation of borrowing
costs is ceased once the asset is substantially complete and is suspended if the development of the
asset is suspended. After initial recognition, investment property is carried at fair value
representing open market value determined periodically. Fair value is based on active market
prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific
asset. If the information is not available, the Group uses alternative valuation methods such as
recent prices on less active markets or discounted cash flow projections.
These valuations are reviewed annually. Investment property that is being redeveloped for
continuing use as investment property or for which the market has become less active continues to
be measured at fair value. Fair value measurement on property under construction is only applied
if the fair value is considered to be reliably measurable. The fair value of investment property
reflects, among other things, rental income from current leases and assumptions about rental
income from future leases in the light of current market conditions. The fair value also reflects, on
a similar basis, any cash outflows that could be expected in respect of the property.
Subsequent expenditure is capitalised to the asset's carrying amount only when it is probable that
future economic benefits associated with the expenditure will flow to the Group and the cost of the
item can be measured reliably. All other repairs and maintenance costs are charged to profit or loss
during the financial period in which they are incurred. When part of an investment property is
replaced, the carrying amount of the replaced part is derecognised.
The fair value of investment property does not reflect future capital expenditure that will improve
or enhance the property and does not reflect the related future benefits from its future expenditure
other than those a rational market participant would take into account when determining the value
of the property.
Changes in fair value are recognised in profit or loss and transferred to "Revaluation reserve" under
equity. Investment properties are derecognised either when they have been disposed of or when
the investment property is permanently withdrawn from use and no future economic benefit is
expected from its disposal. The difference between the net disposal proceeds and the carrying
amount of the asset is recognised in profit or loss in the period of derecognition.
If an investment property becomes owner-occupied, it is reclassified as property, plant and
equipment. Its fair value at the date of the reclassification becomes its cost for subsequent
accounting purposes. When the Group decides to dispose of an investment property without
development, the Group continues to treat the property as an investment property. Similarly, if
the Group begins to redevelop an existing investment property for continued future use as
investment property, it remains an investment property during the redevelopment.
47
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
If an item of property, plant and equipment and property held-for-sale becomes an investment
property because its use has changed, any difference resulting between the carrying amount and
the fair value of this item at the date of transfer is treated in the same way as revaluation under IAS
16. Any resulting increase in the carrying amount of the property is recognised in statement of
comprehensive income to the extent that it reverses a previous impairment loss; with any
remaining increase recognised in other comprehensive income, directly to revaluation surplus with
equity. Any resulting decrease in the carrying amount of the property is initially charged to other
comprehensive income against any previously recognised revaluation surplus, with any remaining
decrease charged to the profit or loss. Upon the disposal of such investment property, any surplus
previously recorded in equity is transferred to retained earnings; the transfer is not made through
statement of comprehensive income.
2.8 Inventories
Inventories are valued at the lower of cost and net realisable value.
The cost of inventories comprises the invoiced value of goods sold and other direct costs and is
determined by first-in first-out method.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated
costs of completion and the estimated costs neces sary to make the sa le.
2.9 Property held-for-sale
Property held-for-sale is included in the financial statements at the lower of cost and net realisable
value. Cost comprises the purchase price of acquiring the property and other costs incurred to
develop the property. Net realisable value is the estimated selling price in the ordinary course of
business, less estimated costs of completion and the estimated costs necessary to make the sale.
2.10 Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at banks and in
hand, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash on hand
and banks as defined above, net of outstanding bank overdrafts as they are considered an integral
part of the Group's cash management.
2.11 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares are shown in equity as a deduction, net of tax, from the proceeds.
2.12 Dividend distribution
Dividend distribution to the Group's shareholders is recognised as a liability in the Group's
financial statements in the period in which the dividends are approved by the Group's
shareholders.
2.13 Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary
course of business from suppliers. Accounts payable are classified as current liabilities if payment
is due within one year or less. If not, they are presented as non-current liabilities.
Trade and other payables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method.
48
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
2.14 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result
of past events, it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate of the amount of the obligation can be made.
Provisions are measured at the present value of the expenditures expected to be required to settle
the obligation using a pre-tax rate that reflects current market assessments of the time value of
money and the risks specific to the obligation. The increase in the provision due to the passage of
time is recognised as interest expense.
2.15 Foreign currencies
Items included in the financial statements of each of the Group's entities are measured using the
currency of the primary economic environment in which the entity operates (the functional
currency). The consolidated financial statements are presented in euro, which is the Company's
functional and presentation currency.
Foreign currency translations are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions or valuation where items are re-measured. Foreign
exchange gains and losses resulting from the settlement of such transactions and from the
translation at year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in profit or loss. All foreign exchange gains and losses are presented in
the income statement within 'Other operating charges'.
2.16 Revenue recognition
Revenue from contracts with customers (under IFRS 15)
Revenues include all revenues from the ordinary business activities of the group and are recorded
net of value added tax. They are recognised in accordance with the provision for goods or services
provided that collectability of the consideration is probable.
Revenue mainly represents income earned for accommodation, food and beverage and other
services. The Group also sold property through barter during the year. The Group recognizes
revenue when or as it satisfies a performance obligation by transferring control of a product or
service to a customer.
Sale/barter of property for resale
Revenue from sale/barter of real property is recognised at the point in time when control of asset
is transferred to the customer, generally upon signing of deed of sale where the customer obtains
legal title to the property. Total fund is paid in full on date of deed.
Revenue from accommodation
Revenue from accommodation is recognised over a period of time. The customers get the benefits
(i.e. control over the promise) with every passing day of each year’s stay at the Group's hotel rooms.
The revenue stream therefore meets the conditions for revenue recognition over time (i.e. stage of
completion), and revenue is accordingly recognised on a daily basis of accommodation or equally
amortised over the period of stay of the customer.
The performance obligation is to provide accommodation services as and when customers make
use of the services. The transaction price follows a fee structure which is known at the date of
booking or consumption of service and thus no significant estimates are required in this respect.
49
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
Revenue from food and beverage, and other services
Revenue from services is generally recognized in the accounting period in which the services are
rendered, by reference to completion of the specific transaction assessed on the basis of the actual
service provided as a proportion of the total services to be provided. Revenue arising from these
activities is recognised when the service is performed and/or when the goods (primarily food and
beverage relating to restaurant and/or bar sales) are supplied upon performance of the service.
Each of the services rendered is assessed to be a distinct performance obligation, and if applicable,
the Group allocates the transaction price to each of the services rendered to the customer on a
relative basis, based on their stand-alone selling price. Normally, the transaction price follows a fee
structure which is known at the date of consumption of service and thus no significant estimates
are required in this respect.
The Group considers whether there are other promises in the contract that are separate
performance obligations to which a portion of the transaction price needs to be allocated (if there
is any).
In determining the transaction price, the Group considers the effects of variable consideration,
existence of significant financing component, non-cash consideration, and consideration payable
to the customer (if there is any).
i) Variable consideration
If the consideration in a contract includes a variable amount, the Group estimates the amount of
consideration to which it will be entitled in exchange for transferring the goods to the customer.
The variable consideration is estimated at contract inception and constrained until it is highly
probable that a significant revenue reversal in the amount of cumulative revenue recognised will
not occur when the associated uncertainty with the variable consideration is subsequently resolved.
As at 31 December 2025 and 2024, variable consideration would be the amount refunded to a
customer if the customer cancels the booking within the window provided by the hotel. In this case,
the Group uses the 'most likely amount' approach since it has only 2 possible outcome, which is i f
the customer will cancel the booking or not. The amount of variable consideration on refundable
amounts to customer is not that significant as at year end. Should there have been discounts or
concessions for goods and services, these have been already established with customer at the
inception of the contract, thus are not considered contingent as the amounts agreed are fixed or
unavoidable.
Overall, aside from the above mentioned, there are no other known factors or events that could
make the consideration to be variable as at the current financial year end. The validity of this
assessment is reassessed at each reporting date.
ii) Significant financing component
The Company applies the practical expedient for short-term advances received from customers.
That is, the promised amount of consideration is not adjusted for the effects of a significant
financing component if the period between the transfer of the promised good or service and the
payment is one year or less. As at each year end, the contract liabilities (if there is any) were
normally recognised as revenue within 1 year. The validity of this assessment is reassessed at each
reporting date.
iii) Non-cash consideration
The Group does not receive non-cash considerations from customers for the sale of goods and
services.
iv) Consideration payable to customer
There is no consideration payable to a customer that can be applied against amounts owed to the
Group.
As at 31 December 2025 and 2024, upfront fees and pre-production fees are not applicable.
50
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
Contract balances
Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the
customer. If the company performs by transferring goods or services to a customer before the
customer pays consideration or before payment is due, a contract asset is recognised for the earned
consideration that is conditional.
It is very unlikely for the company to have contract assets since the collection of payment must be
completed immediately after the company performs the service or goods/services and before the
customer leaves the hotel's premises. This leaves no obligation on the part of the customer to pay
further consideration.
Trade receivables
A receivable represents the company’s right to an amount of consideration that is unconditional
(i.e., only the passage of time is required before payment of the consideration is due).
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the hotel
has received consideration, or for which an amount of consideration is due from the customer. It is
noted that in extremely rare situations, customers contracts contain a right to right to terminate for
convenience, where amounts paid by the customer are refundable. In these situations, the customer
has paid for future goods or services, but because of the termination clause an agreement does not
exist and thus the Hotel does not have an obligation to transfer goods or services except as the
customer requests (i.e. doesn’t terminate).
Cost to obtain a contract
The Group applies the optional practical expedient to immediately expense costs to obtain a
contract if the amortisation period of the asset that would have been recognised is one year or less.
As such, payments of commissions to sales agencies which constitute relatively small amounts are
immediately recognised as an expense in the consolidated statement of profit or loss and
comprehensive income.
Other revenue sources (not within the scope of IFRS 15)
The following recognition criteria must also be met before revenue is recognised:
Rental income
This relates to the rental income from the rental of immovable property in the ordinary cause of the
Group's activities. For operating leases, it is recognised at profit or loss on a straight-line basis over
the term of the lease and is stated net of value added tax.
Dividend income
Revenue from dividend income is recognised on the date the Group's right to receive payment is
established.
Interest income
Interest income is accounted for when it is probable that the economic benefits associated with the
transaction will flow to the Group and these can be measured reliably. Interest income is recognised
on an accrual or time proportion basis.
Other operating income
Other operating income are accounted for when it is probable that the economic benefits associated
with the transaction will flow to the Group and these can be measured reliably.
51
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
2.17 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.
The Group as a lessee
The Group applies a single recognition and measurement approach for all leases, 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 recognised, initial direct costs
incurred, and lease payments made at or before the commencement date less 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:
Buildings
5 - 11 years
Furniture and Fittings
5 years
If ownership of the leased asset transfers 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. Refer to the accounting policies in section
2.22 (Impairment of non-financial assets).
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 included in Interest-bearing loans and borrowings (see note 16).
52
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
iii) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases (i.e., those
leases that have a lease term of 12 months or less from the commencement date and do not contain
a purchase option). It also applies the lease of low-value assets recognition exemption to leases of
assets that are considered to be low value (if there is any). Lease payments on short-term leases and
leases of low value assets are recognised as expense on a straight-line basis over the lease term.
The Group as a 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 recognised over the lease term on the same basis as rental income. Contingent rents are
recognised as revenue in t he period in whic h they are ea rned.
2.18 Assets held for distribution to owner
In accordance with IFRS 5, a non-current asset (or disposal group) is classified as held for
distribution to owners when the entity is committed to distribute the asset (or disposal group) to
the owners.
For this to be the case, the assets must be available for immediate distribution in their present
condition and the distribution must be highly probable. For the distribution to be highly probable,
actions to complete the distribution must have been initiated and should be expected to be
completed within one year from the date of classification.
Actions required to complete the distribution should indicate that it is unlikely that significant
changes to the distribution will be made or that the distribution will be withdrawn. The probability
of shareholders’ approval (if required in the jurisdiction) should be considered as part of the
assessment of whether the distribution is highly probable.
Non-current assets and disposal groups classified as held for distribution to owner are measured
at the lower of their carrying amount and fair value less costs to distribute. Costs to distribute are
the incremental costs directly attributable to the disposal of an asset (disposal group), excluding
finance costs and income tax expense.
There are a number of asset categories that are excluded from measurement requirements of IFRS
5, although disclosure requirements still need to be complied with. Among these exclusions, the
most relevant to the Company is "Non-current assets that are accounted for in accordance with the
fair value model (IAS 40 Investment Property)" which will be subsequently measured under the
same accounting policy as before the classification.
In prior year, assets classified as held for distribution to owner are presented separately as current
items in the statement of financial position. Additional disclosures are provided in note 22.
2.19 Taxation
The tax expense for the year comprises current and deferred tax. Tax is recognized in profit or loss,
except when it relates to items recognized in other comprehensive income or directly in equity, in
which case it is also dealt with in other comprehensive income or in equity, as appropriate.
Current income tax
Current income tax assets and liabilities for the current period are measured at the amount expected
to be recovered 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. Current income
tax relating to items recognised directly in equity is recognised in equity and not in profit or loss.
53
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
Deferred income tax
Deferred tax is provided using the liability method on temporary differences at the reporting date
between the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes.
Deferred tax liabilities are recognised for all temporary differences, except when the deferred tax
liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is
not a business combination and, at the time of the transaction, affects neither the accounting profit
nor taxable profit or loss.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of
unused tax credits and unused tax losses, to the extent probable that taxable profit will be available
against which the deductible temporary differences, and the carry forward of unused tax credits
and unused tax losses can be utilised, except when the deferred tax asset relating to the deductible
temporary differences arises from the initial recognition of an asset or liability in a transaction that
is not a business combination and, at the time of the transaction, affects neither the accounting profit
nor taxable profit or loss.
Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profits will allow the deferred tax asset to be
recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have
been enacted or substantively enacted at each reporting date.
Value Added Tax
Revenue, expenses and assets are recognised net of Value Added Tax, except:
- where the Value Added Tax incurred on a purchase of assets or services is not recoverable from
the taxation authority, in which case Value Added Tax is recognised as part of the acquisition of
the asset or as part of the expense item, as applicable;
- where receivables and payables that are stated with the amount of Value Added Tax included.
The net amount of Value Added Tax recoverable from, or payable to, the taxation authority is
included as part of receivables or payables in the statement of financial position.
2.20 Retirement benefits
The Group contributes towards the state pension fund in accordance with local legislation. The
only obligation of the Group is to make the required contribution and carries no further legal or
construction obligations to make further payments if the fund does not have sufficient assets to pay
all of the employees' entitlements to post-employment benefits. Costs are expensed in the year in
which they are incurred.
2.21 Fair value measurements and valuation processes
The Group measures non-financial assets such as buildings under property, plant and equipment
and investment property at fair value at each reporting date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between the market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either (a) in the principal market for the asset or liability or (b) in the absence
of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or liability is measured using the assumptions that market participants
would use when pricing the asset or liability, assuming that market participants act in their
economic best interest.
54
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
A fair value measurement of 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 at fair value, maximising the use of relevant observable
inputs and minimising the use of unobservable inputs.
Information about the valuation techniques and inputs used in determining the fair value of
buildings and investment properties are disclosed in notes 13, 17 and 31 respectively.
2.22 Impairment of non-financial assets
The Group assesses, at each reporting date, whether there is an indication that an asset may be
impaired. If any indication exists, or when annual impairment testing for an asset is required, the
Group estimates the asset’s recoverable amount. An asset’s r ecoverable amount is the higher of an
asset’s or CGU’s fair value less costs of disposal and its value in use. The recoverable amount is
determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets. When the carrying amount of an asset
or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset. In determining fair value less costs of disposal, recent market
transactions are taken into account. If no such transactions can be identified, an appropriate
valuation model is used. These calculations are corroborated by valuation multiples, quoted share
prices for publicly traded companies or other available fair value indicators.
The Group bases its impairment calculation on most recent budgets and forecast calculations,
which are prepared separately for each of the Group’s CGUs to which the individual assets are
allocated. These budgets and forecast calculations generally cover a period of five years. A long-
term growth rate is calculated and applied to project future cash flows after the fifth year.
Impairment losses of continuing operations are recognised in the statement of profit or loss in
expense categories consistent with the function of the impaired asset, except for properties
previously revalued with the revaluation taken to OCI. For such properties, the impairment is
recognised in OCI up to the amount of any previous revaluation.
For assets excluding goodwill, an assessment is made at each reporting date to determine whether
there is an indication that previously recognised impairment losses no longer exist or have
decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount.
A previously recognised impairment loss is reversed only if there has been a change in the
assumptions used to determine the asset’s recoverable amount since the last impairment loss was
recognised. The reversal is limited so that the carrying amount of the asset does not exceed its
recoverable amount, nor exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is
recognised in the statement of profit or loss unless the asset is carried at a revalued amount, in
which case, the reversal is treated as a revaluation increase.
Goodwill is tested for impairment annually and when circumstances indicate that the carrying
value may be impaired.
Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group
of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its
carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot
be reversed in future periods.
Intangible assets with indefinite useful lives are tested for impairment annually at the CGU level,
as appropriate, a nd when circumstances i ndicate that the ca rrying value may be impaired.
55
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
2.23 Government grants
Government grants are recognised where there is reasonable assurance that the Group will comply
with the conditions attaching to them and that the grants will be received.
Government grants related to income are recognised in profit or loss on a systematic basis over the
periods in which the Company recognises as expenses the related costs for which the grants are
intended to compensate. Specifically, the government grants related to assets, whose primary
condition is that the Group should purchase, construct or otherwise acquire noncurrent assets are
recognised as deferred income in the statement of financial position and transferred to profit or loss
on a systematic and rational basis over the useful lives of the related assets.
Government grants that are receivable as compensation for expenses or losses already incurred or
for the purpose of giving immediate financial support to the Group with no future related costs are
recognised in profit or loss in the period in which they become receivable.
2.24 Borrowing costs
Borrowing costs which are incurred for the purpose of acquiring or constructing qualifying
property, plant and equipment are capitalised as part of its cost. Borrowing costs are capitalised
while acquisition or construction is actively underway, during the period of time that is required
to complete and prepare the asset for its intended use. Capitalisation of borrowing costs is ceased
once the asset is substantially complete and is suspended if the development of the asset is
suspended. All other borrowing costs are expensed. Borrowing costs are recognised for all interest-
bearing instruments on any accrual basis using the effective interest method. Interest costs include
the effect of amortising any difference between initial net proceeds and redemption value in respect
of the Group's interest-bearing borrowings.
2.25 Segment reporting
The Group determines and presents operating segments based on the information that internally
is provided to the Board of Directors, which is the Group's chief operating decision-maker in
accordance with the requirements of IFRS 8 'Operating Segments'.
An operating segment is a component of the Group that engages in business activities from which
it may earn revenues and incur expenses, including revenues and expenses that relate to
transactions with any of the Group's other components, and for which discrete financial
information is available. An operating segment's operating results are reviewed regularly by the
Board of Directors to make decisions about resources to be allocated to the segment and to assess
its performance executing the function of the chief operating decision-maker.
56
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
3. Critical accounting estimates and judgements
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 judgement 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 in the period the changes become known.
The most significant judgement and estimates are as follows:
Judgments
In the process of applying the Group’s accounting policies, management has made the following
judgements, which have the most significant effect on the amounts recognised in the consolidated
financial statements:
Determining the lease term of contracts with renewal and termination options – Group as lessee
The Group determines the lease term as the non-cancellable term of the lease, together with any
periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any
periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.
The Group has lease contracts that include extension and termination options. The Group applies
judgement in evaluating whether it is reasonably certain whether or not to exercise the option to
renew or terminate the lease. That is, it considers all relevant factors that create an economic
incentive for it to exercise either the renewal or termination. After the commencement date, the
Group reassesses the lease term if there is a significant event or change in circumstances that is
within its control and affects its ability to exercise or not to exercise the option to renew or to
terminate.
The Group does not include the renewal periods as part of the lease term for leases of assets with
non-cancellable periods as these are not reasonably certain to be exercised. The effect of covid-19
pandemic also contributes to this uncertainty. Furthermore, the periods covered by termination
options are included as part of the lease term only when they are reasonably certain not to be
exercised.
Property lease classification – Group as lessor
The Group has entered into commercial and residential property leases on its investment property
and property, plant and equipment portfolio. The Group has determined, based on an evaluation
of the terms and conditions of the arrangements, such as the lease term not constituting a major
part of the economic life of the properties and the present value of the minimum lease payments
not amounting to substantially all of the fair value of the properties, that it retains substantially all
the risks and rewards incidental to ownership of these properties and accounts for the contracts as
operating leases.
Recognition of deferred tax assets
The extent to which deferred tax assets can be recognized is based on an assessment of the
probability that future taxable income will be available against which the deductible temporary
differences and tax loss carry-forward can be utilized. In addition, significant judgement is
required in assessing the impact of any legal or economic limits or uncertainties in various tax
jurisdictions.
57
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
Estimates and assumptions
Fair value of investment property and property, plant and equipment
The Group carries its investment property at fair value, with changes being recognised in profit or
loss, while it carries its buildings within property, plant and equipment at fair value, with changes
being recognised in other comprehensive income. These are based on market valuations performed
by independent professional architect at least every three years. In a year when market valuations
are not performed by the independent professional architect, an internal assessment of the fair
value of investment property and property, plant and equipment are performed to reflect market
conditions at the year-end date by the management. The Management has assessed the valuation
of properties as at 31 December 2024 by reference to value of similar properties in the market as
well as the management's expert knowledge of the industry being in property sector for more than
20 years.
Impairment of non-financial assets
Impairment exists when the carrying value of an asset or CGU exceeds its recoverable amount,
which is the higher of its fair value less costs of disposal and its value in use. The fair value less
costs of disposal calculation is based on available data from binding sales transactions, conducted
at arm’s length, for similar assets or observable market prices less incremental costs of disposing of
the asset. The value in use calculation is based on a discounted cash flow (DCF) model. The cash
flows are derived from the budget for the next five years and do not include restructuring activities
that the Group is not yet committed to or significant future investments that will enhance the
performance of the assets of the CGU being tested. The recoverable amount is sensitive to the
discount rate used for the DCF model as well as the expected future cash-inflows and the growth
rate used for extrapolation purposes. These estimates are most relevant to goodwill recognised by
the Group.
Provision for ECL on trade receivables
Upon adoption of IFRS 9, provision for ECL is maintained at a level considered adequate to provide
for potentially uncollectible receivables. For trade receivables, the Company applies the Simplified
Approach designed to identify potential charges to the allowance and is performed on a continuous
basis throughout the period. For the year ended 31 December 2025, the increase in provision for
ECL on trade receivables amounted to €140,258 (2024: increase of €61,392) (note 30).
The Group uses a provision matrix to calculate ECLs for trade receivables. The provision rates are
based on days past due for groupings of various customer segments that have similar loss patterns
(i.e., by geography, product type, customer type and rating).
The provision matrix is initially based on the Group’s historical observed default rates. The Group
calibrates the matrix to adjust the historical credit loss experience with forward-looking
information. For instance, if forecast economic conditions (i.e., gross domestic product) are
expected to deteriorate over the next year which can lead to an increased number of defaults in the
manufacturing sector, the historical default rates are adjusted. At every reporting date, the
historical observed default rates are updated and changes in the forward-looking estimates are
analysed.
The assessment of the correlation between historical observed default rates, forecast economic
conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in
circumstances and of forecast economic conditions. The Group’s histo rical credit loss experience
and forecast of economic conditions may also not be representative of customer’s actual default in
the future. The information about the ECLs on the Company's trade receivables is disclosed in notes
21 and 31.
58
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
Provision for ECL on other financial assets
The measurement of the Group's ECL on cash in banks, receivables from associates and other
related undertakings is a function of the PD, LGD and the EAD. These financial assets are measured
under Stage 1 of the impairment model, and therefore ECLs are calculated on 12-month basis.
Elements of the ECL model which are considered accounting judgments and estimates include:
- The Group's internal credit grading model, which assigns PDs to the individual grades
- The Group’s criteria for assessing if there has been a significant increase in credit risk and so
allowances should be measured on a liftetime ECL basis and the qualitative assessment
- Development of ECL models, including the various formulas and the choice of inputs
- Determination of associations between macroeconomic scenarios and, economic inputs, and
the effect on PDs, EADs and LGDs
- Selection of forward-looking macroeconomic scenarios and their probability weightings, to
derive the economic inputs into the ECL models
'It is the Group’s policy to regularly review its model in the context of actual loss experience and
adjust when necessary.
Leases - Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its
incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the
Group would have to pay to borrow over a similar term, and with a similar security, the funds
necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic
environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires
estimation when no observable rates are available (such as for subsidiaries that do not enter into
financing transactions) or when they need to be adjusted to reflect the terms and conditions of the
lease (for example, when leases are not in the subsidiary’s functional currency). The Group estimates
the IBR using observable inputs (such as market interest rates or rates from bank sanction letters)
when available and is required to make certain entity-specific estimates (such as the subsidiary’s
stand-alone credit rating).
In the opinion of the management, except for the above, 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’.
59
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
4. Application of New and Revised IFRS
4.1 New and Revised IFRS effective for current year
The Company applied for the first time certain standards and amendments, which are effective for
annual periods beginning on or after 1 January 2025. The Company has not early adopted any other
standard, interpretation or amendment that has been issued but is not yet effective.
The nature and the impact of each new standard and amendment is described below:
Lack of exchangeability – Amendments to IAS 21
An entity should assess whether a currency is exchangeable and how it should determine a spot
exchange rate when exchangeability is lacking. The amendments also require disclosure of
information that enables users of its financial statements to understand how the currency not being
exchangeable into the other currency affects, or is expected to affect, the entity’s financial
performance, financial position and cash flows.
These amendments had no impact on the financial statements of the Company. The Company
intends to use the practical expedients in future periods if they become applicable.
4.2 Standards issued but not yet effective
The standards and interpretations that are issued, but not yet effective, up to the date of issuance
of the Company’s financial statements are disclosed below. The Company intends to adopt these
standards, if applicable, when they become effective.
Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7
In December 2024, the IASB issued Amendments to IFRS 9 and IFRS 7 - Contracts Referencing
Nature-dependent Electricity. The amendments apply only to contracts that reference nature-
dependent electricity; the amendments:
▪ Clarify the application of the ‘own-use’ requirements for in-scope contracts
▪ Amend the designation requirements for a hedged item in a cash flow hedging relationship for
in-scope contracts
▪ Add new disclosure requirements to enable investors to understand the effect of these contracts
on a company’s financial performance and cash flows
Annual Improvements to IFRS Accounting Standards - Volume 11
In July 2024, the IASB issued nine narrow scope amendments as part of its periodic maintenance of
IFRS accounting standards. The amendments include clarifications, simplifications, corrections or
changes to improve consistency in IFRS 1 First-time Adoption of International Financial Reporting
Standards, IFRS 7 Financial instruments: Disclosure and its accompanying Guidance on
implementing IFRS 7, IFRS 9 Financial Instruments, IFRS 10 Consolidated Financial Statements and
IAS 7 Statements of Cash Flows.
Amendments to the Classification and Measurement of Financial Instruments—Amendments to
IFRS 9 and IFRS 7
In May 2024, the IASB issued Amendments to IFRS 9 and IFRS 7, Amendments to the Classification
and Measurement of Financial Instruments (the Amendments). The Amendments include:
60
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
▪ A clarification that a financial liability is derecognised on the ‘settlement date’ and the
introduction of an accounting policy choice (if specific conditions are met) to derecognise financial
liabilities settled using an electronic payment system before the settlement date
▪ Additional guidance on how the contractual cash flows for financial assets with environmental,
social and corporate governance (ESG) and similar features should be assessed
▪ Clarifications on what constitute ‘non-recourse features’ and what are the characteristics of
contractually linked instruments
▪ The introduction of disclosures for financial instruments with contingent features and additional
disclosure requirements for equity instruments classified at fair value through other
comprehensive income (OCI)
The above amendments will take effect for annual reporting periods starting on or after 1 January
2026. The Company does not intend to early adopt these pronouncements. Management has
reviewed the forthcoming changes and considered their relevance to the Company’s operations,
financial position, and reporting processes. For those standards expected to be applicable, the
Company has commenced an assessment of the potential impact. At this stage, no material effects
on the Company’s financial statements are anticipated. Where the impact of a standard cannot yet
be reasonably estimated, the Company will provide updated disclosures as the effective date
approaches.
IFRS 18 Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of Financial Statements.
IFRS 18 introduces new requirements for presentation within the statement of profit or loss,
including specified totals and subtotals. Furthermore, entities are required to classify all income
and expenses within the statement of profit or loss into one of five categories: operating, investing,
financing, income taxes and discontinued operations, whereof the first three are new.
The standard requires disclosure of newly defined management-defined performance measures,
subtotals of income and expenses, and it also includes new requirements for aggregation and
disaggregation of financial information based on the identified ‘roles’ of the primary financial
statements (PFS) and the notes.
In addition, narrow-scope amendments have been made to IAS 7 Statement of Cash Flows, which
include changing the starting point for determining cash flows from operations under the indirect
method, from ‘profit or loss’ to ‘operating profit or loss’ and removing the optionality around
classification of cash flows from dividends and interest. In addition, there are consequential
amendments to several other standards.
The Company is currently working to identify all impacts the amendments will have on the
primary financial statements and notes to the financial statements. The initial expected material
impacts on Company’s financial statements are, as follows:
▪ New disclosure will be added: (a) management-defined performance measures; (b) specified
expense by nature if expenses are presented by function in the operating category of the statement
of profit or loss; and (c) a reconciliation for each line item in the statement of profit or loss between
the restated amounts presented applying IFRS 18 and the amounts previously presented applying
IAS 1.
▪ Interest paid will be classified in the investing activities and financing activities, respectively, on
the statement of cash flows.
IFRS 18, and the amendments to the other standards, are effective for reporting periods beginning
on or after 1 January 2027. The Company does not intend to early adopt these pronouncements.
61
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
IFRS 19 Subsidiaries without Public Accountability: Disclosures
In May 2024, the IASB issued IFRS 19, which allows eligible entities to elect to apply its reduced
disclosure requirements while still applying the recognition, measurement and presentation
requirements in other IFRS accounting standards. To be eligible, at the end of the reporting period,
an entity must be a subsidiary as defined in IFRS 10, cannot have public accountability and must
have a parent (ultimate or intermediate) that prepares consolidated financial statements, available
for public use, which comply with IFRS accounting standards.
IFRS 19 will become effective for reporting periods beginning on or after 1 January 2027.
62
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
5. Segment information
For management purposes, the Group is organised into business units based on its products and
services and has two reportable segments, as follows:
Holding
This serves as the finance arm of the Group and the principal vehicle for
further expansion of the Group's hospitality business and mixed-use
developments.
Property
development and
letting
This segment carries works such as construction, plumbing, electrical and
others to bring various properties in a state that can be leased to third
parties. In relation to this, the Group leases out various freehold
commercial and residential properties to third parties.
Hospitality and
Entertainment
This segment includes hotel operations such as accommodation, food and
beverage and other related services. The Group owns various hotels and
apartment suites namely Bayview Hotel, Blubay Apartments, Blubay
Suites, Sliema Hotel and Azur Hotel.
Management monitors the operating results of its 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.
63
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
5. Segment information (continued)
Inter-segment transactions, assets and liabilities are eliminated upon consolidation and reflected in the ‘eliminations’ column.
Year ended 31 December
2025
Holding
Property
development and
letting
Hospitality and
Entertainment
Total segments
Eliminations
Consolidated
€
€
€
€
€
External customers
-
11,420,582
33,348,013
44,768,595
(11,778,795)
32,989,800
Inter-segment
7,545,140
20,915,581
-
28,460,721
(28,460,721)
-
Total revenue
7,545,140
32,336,163
33,348,013
73,229,316
(40,239,516)
32,989,800
Income/(expenses)
Finance and similar income
-
918,491
20,000
938,491
(918,491)
20,000
Finance cost
(2,407,500)
(986,056)
(3,044,538)
(6,438,014)
2,186,266
(4,251,748)
Depreciation and amortisation
-
(346)
(5,588,943)
(5,589,289)
2,988,375
(2,600,914)
Share in loss of associates
-
-
(154,706)
(154,706)
-
(154,706)
Income tax expense
(95,384)
(7,515,024)
6,616,422
(993,986)
2,414,413
1,419,852
Segment profit before tax
5,082,783
49,029,994
4,127,706
58,240,483
(30,317,045)
18,923,438
Total assets
71,117,641
535,791,984
185,331,085
792,240,710
(231,394,936)
560,845,774
Total liabilities
68,195,297
81,874,992
80,764,543
230,834,832
(56,831,434)
174,003,398
Other disclosures
Capital expenditure
-
25,860,855
-
25,860,855
-
25,860,855
64
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
Year ended 31 December
2024
Holding
Property
development and
letting
Hospitality and
Entertainment
Total segments
Eliminations
Consolidated
€
€
€
€
€
External customers
-
10,742,160
29,887,443
40,629,603
(11,153,759)
29,475,844
Inter-segment
23,854,283
29,133,982
-
52,988,265
(52,988,265)
-
Total revenue
23,854,283
39,876,142
29,887,443
93,617,868
(64,142,024)
29,475,844
Income/(expenses)
Finance and similar income
-
1,168,403
20,000
1,188,403
(1,168,403)
20,000
Finance cost
(2,407,500)
(1,162,540)
(3,332,799)
(6,902,839)
2,502,820
(4,400,019)
Depreciation and amortisation
-
(346)
(5,488,756)
(5,489,102)
(441,591)
(5,930,693)
Share in loss of associates
-
-
25,742
25,742
-
25,742
Income tax expense
(211,996)
(4,034,014)
10,738,770
6,492,760
(93,203)
6,399,557
Segment profit before tax
21,377,739
68,548,972
3,791,960
93,718,671
(49,786,495)
43,932,176
Total assets
68,238,082
500,380,263
170,208,656
738,827,001
(228,206,871)
510,620,130
Total liabilities
66,153,387
77,314,452
74,703,918
218,171,757
(66,415,144)
151,756,613
Other disclosures
Capital expenditure
-
17,731,401
-
17,731,401
-
17,731,401
Capital expenditure consists of additions to property, plant and equipment, and investment properties.
65
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
6. Revenue from contracts with customers
The Group's hospitality revenue is derived locally from the operations of the hotels in Malta.
Disaggregated revenue information
Set out below is the disaggregation of the Group's revenue from contracts with customers:
2025
2024
€
€
Type of goods or service
Hospitality and Entertainment (note 5)
Accommodation
19,802,619
17,043,044
Food and beverage
1,548,014
1,473,547
Other services
218,585
217,183
21,569,218
18,733,684
Property development and letting (note 5)
Sale/barter of property for resale
500,000
458,466
22,069,218
19,1912,150
Timing of revenue recognition
Services/goods transferred at a point in
time
2,266,599
2,149,106
Services transferred over time
19,802,619
17,043,044
22,069,218
19,192,150
Performance obligations
Information about the Group’s performance obligations are summarised below:
Accommodation
The performance obligation is satisfied upon rendering the service over time as the hotel's
customers consume and receive the benefit from these services on each day/throughout their stay
until checkout. The payment (which is equal to the transaction price established at the time of
booking) is generally due immediately on the day of checkout before the customer leaves the
hotel's premises.
Food, beverage and other services
The performance obligation is satisfied at a point in time upon availment of service by the
customer. The payment (which is equal to the transaction price established at the time of
availment) is generally due immediately upon completion of services before the customer leaves
the hotel's premises.
The Group assesses that there are no other premises in the contract of sale that are separate
performance obligations to which a portion of transaction price needs to be allocated. The
transaction price, which is equal to the cash selling price indicated in the sales invoices issued, is
therefore allocated to only one performance obligation.
Sale/barter of property for resale
The performance obligation is satisfied at the point in time when control of the asset is transferred
to the customer, generally upon signing of deed of sale where the customer obtains legal title to
the property. The normal credit term is 30 to 90 days from date of deed.
The Group assesses that there are no other promises in the contract of sale/barter of properties
held-for-sale that are separate performance obligations to which a portion of the transaction price
needs to be allocated. The transaction price, which is equal to the selling price indicated in the
deed of sale/barter signed by both parties, is therefore allocated to only one performance
obligation. The Group assesses that there exist no variable considerations and consideration
payable to the customer relating to the sale/barter of properties held-for-sale.
There are no contract liabilities or remaining performance obligations as at 31 December 2025 and
2024.
66
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
7. Expenses
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Cost of sales
Direct wages (note 11)
3,211,054
2,666,296
-
-
Commissions
2,160,189
2,109,772
-
-
Repairs and maintenance
508,842
774,227
-
-
Cost of goods sold (note 19)
1,415,313
1,273,029
-
-
Staff costs
51,428
23,325
-
-
Licenses and permits
19,555
2,588
-
-
Utilities
1,924,751
1,061,471
-
-
Transport
116,483
136,673
-
-
Fuel
160,247
150,411
-
-
9,567,862
8,197,792
-
-
Distribution and selling costs
Advertising and promotions
194,613
132,059
-
-
Administrative expenses
Depreciation (notes 13 and 23)
2,546,043
5,915,334
-
-
Amortisation (note 18)
54,871
15,359
-
-
Directors' remuneration (note
11)
77,307
64,100
45,000
43,500
Office salaries (note 11)
867,815
731,109
-
-
Social security contributions (note 11)
43,306
34,060
-
-
Auditors' remuneration
23,168
23,168
10,360
10,360
Provision for ECL (notes 16, 21 and 31)
1,997,811
486,423
-
10,901
Legal and professional fees
579,687
636,007
1,666
2,652
Rent (note 24)
65,955
100,268
-
-
Computer maintenance
232,908
116,207
-
-
Bank charges
553,192
257,906
661
750
Insurance
160,207
130,565
-
-
Motor vehicle expenses
89,773
95,947
-
-
Other administrative expenses
1,866,337
1,041,788
800
881
9,158,380
9,648,241
58,487
69,044
67
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
Auditor's fees
Fees charged by the auditor for services rendered during the financial years ended 31 December
2025 and 2024 relate to the following:
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Annual statutory audit
22,168
22,168
9,360
9,030
ESEF Review
1,000
1,000
1,000
1,000
Compliance services
-
-
250
330
23,168
23,168
10,610
10,360
8. Other operating income
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Recharge of utilities to tenants
1,092,191
846,052
-
-
Condominium fees & other charges
606,059
456,400
-
-
Decrease in provision for estimated
credit losses (notes 16, 21 and 31)
2,338,167
4,683,253
3,630
-
Management fees
952,555
657,660
-
-
Profit on recognition of intangible asset
-
30,000,000
-
-
Miscellaneous income
(548,193)
(340,789)
-
-
4,440,779
36,302,576
3,630
-
9. Finance and similar income
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Interest from banks
20,000
20,000
-
-
10. Finance costs
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Interest on bank overdrafts
-
4,232
-
-
Interest on bonds and
amortisation of bond issue cost
2,407,500
2,407,500
2,407,500
2,407,500
Interest on bank loans
1,6870,402
1,980,568
-
-
Interest on lease liability (note
24)
5,883
7,719
-
-
Other interest
157,963
-
-
-
4,251,748
4,400,019
2,407,500
2,407,500
68
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
11. Staff costs and employee information
Staff costs for the year comprised the following:
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Wages and salaries
(including Directors’
remuneration) (note 7)
4,156,176
3,461,505
45,000
43,500
Social security contributions
(note 7)
43,306
34,060
-
-
4,199,482
3,495,565
45,000
43,500
The average number of persons (including Directors) employed by the company during the year was
as follows:
The Group
The Company
2025
2024
2025
2024
No.
No.
No.
No.
Operational
139
152
-
-
Administration
19
19
-
-
158
171
-
-
12. Income tax
Tax expense on profit on ordinary activities
Provision for income tax has been made at the rate of 35% on the chargeable income for the year
except for investment income which is charged at the rates of 15% and 35% and for proceeds from
sale of property taxable at 5% and 8% final withholding tax.
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Income tax expense:
Tax at source
840,140
854,283
-
-
Current tax charge
(1,070,140)
(912,017)
-
-
Final withholding tax at 15%
(43,135)
(41,569)
-
-
Total current tax expense
(273,135)
(99,303)
-
-
Consideration payable by the
company in respect of the tax benefit,
attaching to tax losses surrendered
by a subsidiary company under the
Group Relief provisions of the
Income Tax Act
575
-
-
-
Deferred taxation (note 25):
Credit for the year
1,692,987
6,498,860
(95,384)
(211,996)
Income tax (expense)/credit for the year
1,420,427
6,399,557
(95,384)
(211,996)
69
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
12. Income tax (continued)
Tax reconciliation
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Profit before tax
18,923,438
43,932,176
5,082,783
21,377,739
Taxation charge thereon
6,623,203
15,376,262
1,778,974
7,482,209
Tax effect of:
- expenses not allowed for tax purposes
8,257,945
7,368,255
863,095
866,790
- income not allowed for tax purposes
(8,161,571)
(16,037,824)
(2,642,069)
(8,348,999)
- income taxed at different rates
311,873
(2,039,717)
-
-
- unabsorbed capital allowances
(6,846,516)
(5,220,494)
-
-
- investment tax credit
(609,942)
(592,484)
-
-
- unabsorbed tax losses
(3,990,310)
(3,990,310)
-
-
- change in the fair value of
investment property
1,049,898
73,150
-
-
- effect of adoption of IFRS 16
1,288,237
(2,267,878)
-
-
- provision for estimated credit losses
561,373
719,487
-
-
- deferred taxation
95,384
211,996
95,384
211,996
Income tax credit for the year
(1,420,426)
(6,399,557)
95,384
211,996
Current taxation
Taxation due/(recoverable) is made up as follows:
The Group
The Company
2025
2024
2025
2024
€
€
€
€
As at 1 January
31,741
1,453,504
(22,095)
(22,095)
Under provision of tax in prior years
-
(19,419)
-
-
Income tax expense
273,135
99,303
-
-
Tax refund/(excess) tax refund in prior
year
(840,140)
246
-
854,283
(535,264)
1,533,634
(22,095)
832,188
Payments:
Provisional tax
-
(1,141,199)
-
-
Final withholding tax at 5% and 8%
(230,000)
(57,734)
-
-
Tax at source
797,005
(41,569)
-
(854,283)
567,005
(1,240,502)
-
(854,283)
Reclassification to accrual:
Final withholding tax at 15%
-
(261,391)
-
-
As at 31 December
31,741
31,741
(22,095)
(22,095)
70
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
13. Property, plant and equipment
The Group
Fair value
The fair value of the freehold buildings as at 31 December 2025 is based on a valuation carried out
by an independent architect on 31 December 2025 for properties pledged to secure borrowings and
for the consideration of wear and tear. The Group assessed that there are no conditions that would
significantly increase or decrease the fair value of assets determined on 31 December 2025. The
architect is qualified and has experience in valuation of properties of similar locations and
categories. As at 31 December 2025, management assessed whether there are any significant
changes to the significant inputs of the valuation. The fair value movement were credited to other
comprehensive income and subsequently transferred to revaluation reserve under equity.
Owner-occupied property is disclosed in property, plant and equipment as Buildings.
These consist mainly of residential and commercial buildings with a carrying amount of
€25,911,228 (2024: €24,825,898), had these assets been carried at cost less accumulated depreciation.
As at 31 December 2025 and 2024, these properties have been categorised to fall within level 2 of
the fair value hierarchy. The different levels in the fair value hierarchy have been defined in note
32. The Group policy is to recognise transfers into and out of fair value hierarchy levels as of date
of the event of change in circumstances that caused the transfer. There were no transfers between
levels during the year. For all properties, their current use equates to the highest and best use.
For properties categorised under Level 2 of the fair value hierarchy as at 31 December 2025 and
2024, the following techniques and inputs were used:
Type of property
Technique
Inputs
Commercial properties
Market approach
Value of the properties are based on
the selling price of similar types of
properties.
Residential properties
Market approach
71
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
13. Property, plant and equipment
The Group
Buildings
Motor
Vehicles
Kitchen
equipment
Computer
equipment
Plant and
machinery
Furniture, fittings
and office
equipment
Electrical
installations
Energy
saving
equipment
Total
€
€
€
€
€
€
€
€
€
Cost / Valuation
As at 1 January 2024
168,349,895
633,084
223,283
534,555
1,972,386
14,667,118
9,252,969
1,335,957
196,969,247
Additions
5,254,479
62,808
3,150
4,618
16,454
1,047,343
1,966,991
37,352
8,393,195
As at 31 December 2024
173,604,374
695,892
226,433
539,173
1,988,840
15,714,461
11,219,960
1,373,309
205,362,442
Additions
13,725,558
39,850
238,050
207,648
184,013
3,749,768
3,353,019
100,199
21,598,105
Revaluation surplus (note 27)
14,184,823
-
-
-
-
-
-
-
14,184,823
As at 31 December 2025
201,514,755
735,742
464,483
746,821
2,172,853
19,464,229
14,572,979
1,473,508
241,145,370
Depreciation
As at 1 January 2024
-
556,839
116,277
404,572
874,685
8,572,669
4,500,480
1,313,493
16,339,015
Charge for the year
3,945,554
51,203
30,728
50,314
140,258
894,341
737,025
14,273
5,863,696
As at 31 December 2024
3,945,554
608,042
147,005
454,886
1,014,943
9,467,010
5,237,505
1,327,766
22,202,711
Charge for the year
-
41,094
67,071
100,875
158,658
1,269,656
834,802
30,646
2,502,802
Revaluation surplus (note 28)
(3,945,554)
-
-
-
-
-
-
-
(3,945,554)
As at 31 December 2025
-
649,136
214,076
555,761
1,173,601
10,736,666
6,072,307
1,358,412
20,759,959
Net book amount
As at 31 December 2024
169,658,820
87,850
79,428
84,287
973,897
6,247,451
5,982,455
45,543
183,159,731
As at 31 December 2025
201,514,755
86,606
250,407
191,060
999,252
8,727,563
8,500,672
115,096
220,385,411
72
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
14. Investment in subsidiaries
The Company
2025
2024
€
€
Cost
As at 1 January and 31 December
60,004,872
60,004,872
As at 31 December 2025, the Company held the following equity interests:
Undertaking / Registered Office
Number, class and
Percentage
of
nominal value
issued
shares
of shares held
held
Subsidiary
Carmelo Stivala Group Limited
4,872 Ordinary shares,
100%
ST Group Head Office, Novotel Hotel Level 2, 60,
60,000,000 Redeemable
Preference Shares,
100%
The Sir Frederick C. Ponsonby,
of €1 each
Gzira, Malta
fully paid up
The subsidiary was engaged in renting out properties to related parties. It is a holding company.
The Company also acts as a guarantor to the bonds issued by Stivala Group Finance p.l.c..
Sub-subsidiaries
ST Hotels Ltd.
500,000 Ordinary shares,
100%
ST Group Head Office, Novotel Hotel Level 2, 60
of €1 each
The Sir Frederick C. Ponsonby,
fully paid up
Gzira, Malta
The subsidiary was engaged in operating hotels and hostels. It also rents out properties.
ST Properties Ltd
1,200 Ordinary shares,
100%
ST Group Head Office, Novotel Hotel Level 2, 60
of €1 each
The Sir Frederick C. Ponsonby,
fully paid up
Gzira, Malta
The subsidiary is principally engaged in renting out properties.
ST Group Investments Limited
1200 Ordinary shares,
100%
ST Group Head Office, Novotel Hotel Level 2, 60
of €1 each
The Sir Frederick C. Ponsonby,
fully paid up
Gzira, Malta
The subsidiary used to be engaged in holding investments.
15. Investment in associates
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Cost
As at 1 January
306,076
280,334
-
-
Share in loss
(154,706)
25,742
-
-
As at 31 December
151,370
306,076
-
-
73
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
As at 31 December 2025, the Company (through its subsidiary) held the following equity interests:
Undertaking / Registered Office
Number, class and
Percentage
of
nominal value
issued
shares
of shares held
held
2Associates
Civala Limited
600 Ordinary shares,
50%
Vincenti Buildings,
of €1 each
25/25 Strait Street
20% paid up
Valletta VLT 1432, Malta
The associate has been engaged to acquire and hold assets of whatsoever nature, whether movable
or immovable, corporal or incorporal, whether by way of title, real or personal, or on behalf of
others.
Platinum Developments Ltd
600 Ordinary shares,
50%
ST Group Head Office, Novotel Hotel Level 2, 60
of €1 each
The Sir Frederick C. Ponsonby,
20% paid up
Gzira, Malta
The associate is principally engaged to act as building developers, contractors, designers and
ancillary services to building industry.
Sliema Creek Lido Limited
500 'B' Ordinary shares,
33%
The Waterfront Hotel
of €1 each
Triq ix-Xatt
fully paid up
Sliema, SLM 1028, Malta
The associate was engaged in operation of a lido..
Aqualuna Lido Ltd
500 'B' Ordinary shares,
33%
The Waterfront Hotel
of €1 each
Triq ix-Xatt
fully paid up
Sliema, SLM 1028, Malta
The associate will be engaged in operation of a lido.
Summarised financial information of the associates, based on their latest audited financial
statements, and reconciliation with the carrying amount of the investments in the consolidated
financial statements are set out below. The amounts presented are extracted from the most updated
and available financial statements of the associates as at and for the year ended:
Undertaking
Accounting period
Civala Limited
31 December 2025
Platinum Developments Ltd
31 December 2025
Sliema Creek Lido Limited
31 December 2025
Aqualuna Lido Ltd
31 December 2025
74
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
15. Investment in associates (continued)
The aggregate capital and reserves as at the end of the under mentioned accounting period and the results for the said period of the Company were as
follows:
Civala Limited
Platinum
Developments Limited
Sliema Creek Lido
Ltd
Aqualuna Lido Ltd
Total
2025
2024
2025
2024
2025
2024
2025
2024
2025
2024
Percentage ownership interest
50%
50%
50%
50%
33%
33%
33%
33%
Non-current assets
-
-
17,822,707
7,772,193
413
458
152,821
122,550
17,975,941
7,895,201
Current asset
240
240
740,503
560,902
168,601
200,868
622,293
557,464
1,531,637
1,319,474
Non-current liabilities
-
-
(5,610,473)
(1,950,000)
-
-
-
-
(5,610,473)
(1,950,000)
Current liabilities
(14,419)
(13,274)
(5,897,000)
(5,773,185)
(167,566)
(200,738)
(772,086)
(678,136)
(6,851,071)
(6,665,333)
Net Asset (Liability) (100%)
(14,179)
(13,034)
7,055,737
609,910
1,448
588
3,028
1,878
7,046,034
599,342
Group's share on net asset
(liability)
(7,090)
(6,517)
3,527,870
304,956
483
196
999
620
3,522,262
299,255
Adjustments
7,090
6,517
120
120
17
304
(499)
(120)
6,728
6,821
Group's carrying amount of the
investment
-
-
3,527,990
305,076
500
500
500
500
3,528,990
306,076
Net Asset (liabilities) include
(100%):
Cash and cash equivalent
240
240
88,521
55,051
5,227
65,210
99,133
437,827
193,121
558,328
Revenue and other income
-
-
354,852
363,307
157,000
156,500
1,856,104
1,763,623
2,367,956
2,283,430
Cost of sale
-
-
-
-
(150,000)
(150,056)
(395,351)
(377,889)
(545,351)
(527,945)
Other expense
(1,145)
(1,832)
(641,104)
(311,823)
(5,507)
(5,125)
(596,899)
(552,768)
(1,244,655)
(871,548)
(Loss)/profit before tax
(1,145)
(1,832)
(286,252)
51,484
1,493
1,319
863,854
832,966
577,950
883,937
Income tax expense
-
-
(23,160)
-
(538)
-
(129,406)
(123,110)
(153,104)
(123,110)
Total comprehensive
(loss)/profit (100%)
(1,145)
(1,832)
(309,412)
51,484
955
1,319
734,448
7099,856
424,846
760,827
Group’s share of (loss)/profit for
the year
-
-
(154,706)
25,742
318
440
242,368
234,252
87,980
260,434
Prior year losses taken up this
year
-
-
305,075
279,333
(318)
(440)
(242,368)
(234,252)
62,389
44,641
Group’s share in profit at year
end
-
-
150,369
305,075
-
-
-
-
150,369
305,075
75
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
16. Financial assets and financial liabilities
16.1 Financial assets
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Debt instruments at
amortised cost:
Current assets
Trade receivables - net of ECL
(note 21)
1,577,018
1,122,784
-
-
Other receivables - net of ECL
(note 21)
379,801
408,640
-
-
Total trade and other receivables
1,956,819
1,531,424
-
-
Other financial assets
Loans to subsidiary undertakings
- net of ECL
-
-
10,962,203
7,983,898
Loans to associates - net of ECL
5,290,628
4,573,494
-
-
Loans to other related
undertakings - net of ECL
5,103,925
8,695,611
-
-
Loans to other parties - net of ECL
390,345
401,978
-
-
Total other financial assets
10,784,898
13,671,083
10,962,203
7,983,898
Total debt instruments at
amortised cost
12,741,171
15,202,507
10,962,203
7,983,898
All of the above debt instruments at amortised cost are interest free, unsecured and repayable on
demand. The Group's exposure to credit risk related to these financial assets is disclosed in note 31.
As at the reporting date, these financial assets were fully performing and hence do not contain
impaired assets. However, due to the implementation of IFRS 9, the assets are measured at
amortised cost and estimated credit losses have to be calculated.
Allowance for ECL on loans to associates, other related undertakings and other parties amounted
to €271,207, €2,409,418 and €222,880 (2024: €276,857, €3,034,764 and €82,680), respectively.
Movement in the allowance forms part of the total provision for ECL reported in the statement of
profit or loss and other comprehensive income.
76
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
16.2 Financial liabilities: Loans and borrowings
The Group
The Company
Interest rate
Maturity
2025
2024
2025
2024
Current loans and borrowings
€
€
€
€
Bank overdrafts (notes 31)
4% - 5%
on demand
2,225,195
452,911
119
-
Bank loans (notes 31)
2.50% - 4%
2025 - 2035
5,379,611
6,468,0479
-
-
Loans from associate (note 31)
no interest
on demand
105,780
-
-
-
Amount due to other related undertakings
no interest
on demand
10,337,086
2,437,530
7,372,966
-
Proposed dividend
no interest
on demand
-
-
-
5,439,181
Finance lease liability (note 31)
3.25% - 3.99%
2023 - 2029
35,266
42,863
-
-
18,082,938
9,401,383
7,373,085
5,439,181
Non-current loans and borrowings
450,000 and 150,000 (€100 face value) secured bonds
3.65% - 4%
2027 - 2029
59,910,000
59,850,000
59,910,000
59,850,000
Bank loans (notes 31)
2.50% - 4%
2025 - 2035
35,559,487
33,257,559
-
-
Finance lease liability (note 31)
3.25% - 3.99%
2023 - 2029
94,231
129,497
-
-
95,563,718
93,237,056
59,910,000
59,850,000
Other Financial Liabilities at amortised cost, other than loans and borrowings
Trade and other payables (note 23)
12,274,673
15,456,585
912,212
864,206
77
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
16. Financial assets and financial liabilities (continued)
16.2 Financial liabilities: Loans and borrowings (continued)
The Company
The secured bonds are measured at the amount of the net proceeds adjusted for the amortisation of
the difference between the net proceeds and the redemption value of the bonds, using effective yield
method as follows:
2025
2024
€
€
Face value of the secured bonds
60,000,000
60,000,000
Unamortised bond issue cost
(90,000)
(150,000)
Amortised cost
59,910,000
59,850,000
By virtue of the prospectus dated 25 September 2017 and 18 July 2019, the Company issued
45,000,000 4% secured bonds with a face value of €100 each, redeemable at par on 18 October 2027
and 15,000,000 3.65% secured bonds with a face value of €100 each, red eemable at par on 29 July
2029, respectively. The amount is made up of the two bond issues of €45 million and €15 million
respectively, net of the bond issue costs which are being amortised over the lifetime of the bonds.
These bonds are guaranteed by Carmelo Stivala Group Limited, which bound itself jointly and
severally liable with the issuer. The bonds are secured by a first-ranking special hypothec over
various guarantor's property, and pledge on various insurance proceeds (notes 13 and 17), pursuant
to and subject to the terms and conditions in the prospectus.
The bond bear interest rate of 4.00% per annum on the nominal value payable annually in arrears
every 18th of October with respect to the €45 million bond issue and 3.65% per annum on the
nominal value payable annually in arrears every 18th of July with re spect to the €15 million bond
issue.
The bonds are listed on the Official Companies List of the Malta Stock Exchange. The quoted market
prices as at 31 December 2025 for the secured bonds was €98.01 and €96.01 (2024: €99.50 and €98.90),
respectively, which in the opinion of the Directors fairly represents the fair value of these financial
liabilities and which is considered to be a Level 1 valuation within the fair value hierarchy.
The Group
The bank overdraft and bank loans bear interest ranging between 4% to 5% per annum (2024: 4% to
5%). These facilities are secured by a general hypothec over the Group’s assets, special hypothec and
guarantees over some of the Group’s immovable properties, by joint and several personal
guarantees and by pledge over the Group’s insurance policies.
The bank overdrafts are repayable on demand. Information about the contractual terms of the
Group's loans including interest are disclosed in note 29.
The loans from associate are unsecured, interest-free and repayable on demand.
78
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
16. Financial assets and financial liabilities (continued)
16.2 Financial liabilities: Loans and borrowings (continued)
The interest rate exposures of borrowings are as follows:
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Total borrowings:
At fixed rates
103,203,790
100,200,909
59,910,119
59,850,000
Effective interest rates:
Bank overdrafts
4% - 5%
4% - 5%
-
-
Bank loans
2.50% - 4%
2.50% - 4%
-
-
450,000 (€100 face value)
secured bonds 2027
4.00%
4.00%
4.00%
4.00%
150,000 (€100 face value)
secured bonds 2029
3.65%
3.65%
3.65%
3.65%
Lease liability
3.25% - 3.99%
3.25% - 3.99%
-
-
This note provides information about the Company's borrowings. For more information about the
Company's exposure to interest rate and liquidity risk, see note 29.
17. Investment property
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Valuation
As at 1 January
221,191,006
213,443,800
-
-
Additions
4,262,749
9,338,206
-
-
Transfer to property held-for-
sale (note 20)
-
(1,800,000)
-
-
Change in fair value
4,512,600
209,000
-
-
Disposals
-
-
-
-
As at 31 December
229,966,355
221,191,006
-
-
Fair value
Market valuations are performed by independent professional architects every three years or
earlier whenever their fair values differ materially from their carrying amounts. In the year when
a market valuation is not performed, an assessment of the fair value is performed to reflect market
conditions at the year-end date.
79
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
17. Investment property (continued)
The fair value of the Group's investment properties as at 31 December 2025 is based on a valuation
carried out by an independent architect on 31 October 2023 for properties pledged to secure
borrowings for all remaining properties as at year end. The Group assessed that there are no
conditions that would significantly increase or decrease the fair value of assets determined on 31
December 2025. The architect is qualified and has experience in valuation of properties of similar
locations and categories. As at 31 December 2025, management also assessed whether there are
any significant changes to the significant inputs of the valuation. The fair value movement were
credited to profit or loss and subsequently transferred to revaluation reserve under equity.
As at 31 December 2025 and 2024, these properties have been categorised to fall within level 2 of
the fair value hierarchy. The different levels in the fair value hierarchy have been defined in note
31. The Group policy is to recognise transfers into and out of fair value hierarchy levels as of date
of the event of change in circumstances that caused the transfer. There were no transfers between
levels during the year. For all properties, their current use equates to the highest and best use.
Reconciliation of fair value:
Office
properties
Commercial
properties
Residential
properties
Total
€
€
€
€
As at 1 January 2024
69,868,332
71,761,633
71,813,835
213,443,800
Additions
2,803,267
2,911,278
3,623,661
9,338,206
Transfer to property held-for-
sale (note 20)
-
-
(1,800,000)
(1,800,000)
Fair value change recognised in
profit or loss
-
50,000
159,000
209,000
As at 31 December 2024
72,671,599
74,722,911
73,796,496
221,191,006
Additions
1,387,120
1,049,937
1,825,692
4,262,749
Fair value change recognised in
profit or loss
2,477,409
815,481
1,219,710
4,512,600
As at 31 December 2025
76,536,128
76,588,329
76,841,898
229,966,355
For investment properties categorised under Level 2 of the fair value hierarchy as at 31 December
2025 and 2024, the following techniques and inputs were used:
Type of property
Technique
Inputs
Commercial properties
Market approach
Value of the properties are based
on the selling price of similar types
of properties.
Residential properties
Market approach
Office properties
Market approach
As at year end, the Company did not ha ve preliminary agreements for contractual agreements for
the acquisition of investment property.
As at year end, the Company had investment property with a carrying amount of €64,500,000
(2024: €64,425,000) pledged to secure borrowings.
80
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
18. Intangible assets
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Cost - Computer Software
As at 1 January
186,233
139,997
-
-
Additions
158,050
46,236
-
-
As at 31 December
344,283
186,233
-
-
Amortisation
As at 1 January
145,756
130,397
-
-
Charge for the year
54,871
15,359
-
-
As at 31 December
200,627
145,756
-
-
Net book amount
As at 1 January
40,477
9,600
-
-
As at 31 December
143,656
40,477
-
-
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Cost - Brand name
As at 1 January
66,500,000
36,500,000
-
-
Additions
-
30,000,000
-
-
As at 31 December
66,500,000
66,500,000
-
-
Amortisation
Charge for the year
-
-
-
-
As at 31 December
-
-
-
-
Net book amount
As at 1 January
66,500,000
36,500,000
-
-
As at 31 December
66,500,000
36,500,000
-
-
Total intangible assets
As at 1 January
66,540,477
36,509,600
-
-
As at 31 December
66,643,656
66,540,477
-
-
81
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
19. Inventories
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Goods held for resale
53,099
22,417
-
-
During 2025, €1,415,313 (2024: €1,273,029) was recognised as an expense during the year and included
in cost of sales (note 7).
20. Property held-for-sale
The Group
The Company
2025
2024
2025
2024
Cost
€
€
€
€
As at 1 January
4,235,816
2,919,629
-
-
Transfer from investment
property (note 17)
-
1,800,000
-
-
Disposals
(1,799,999)
(483,813)
-
-
As at 31 December
2,435,817
4,235,816
-
-
In 2025, the Group sold properties for resale costing €1,799,999 and sale value consideration of
€2,300,000. The profit from these transactions were shown in the statement of profit or loss and other
comprehensive income under revenue from contracts with customers (note 6).
82
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
21. Trade and other receivables
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Current
Trade receivables
1,797,195
1,202,703
-
-
Amounts owed by directors
-
-
-
-
Amounts owed by ultimate
beneficial owners
2,366,127
-
-
-
Other receivables
380,629
409,526
649
-
Other advances
831,949
1,513,909
-
-
Accrued rental income
70,833
50,833
-
-
Indirect taxation
-
-
-
-
Prepayments and accrued income
-
33,997
-
-
5,446,733
3,210,968
649
-
Allowance for ECL on (note 31):
Trade receivables
(220,177)
(79,919)
-
-
Amounts owed by directors
-
-
-
-
Other receivables
(828)
(886)
-
-
(221,005)
(80,805)
-
-
Total trade and other
receivables
5,225,728
3,130,163
649
-
Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days.
The amounts owed by related parties are unsecured, interest free and repayable on demand.
Other advances include advance deposits on purchase of properties.
Set out below is the movement in the allowance for ECL on trade and other receivables:
The Group
The Company
2025
2024
2025
2024
€
€
€
€
As at 1 January
80,805
102,796
-
10,402
Provision for ECL (note 7)
140,200
(21,991)
-
(10,402)
As at 31 December
221,005
80,805
-
-
83
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
22. Trade and other payables
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Current
Amount received in advance
39,525
9,141
-
-
Trade payables
3,519,944
2,928,586
-
1,036
Amounts due to associate
-
5,439,181
-
-
Other payables
2,966,354
2,029,654
22,257
16,461
Indirect taxes and Social Security
Contributions
2,252,941
1,950,281
-
-
Accruals
2,000,805
1,188,231
889,955
846,709
Deferred rental income
1,495,104
1,911,511
-
-
Total trade and other payables
12,274,673
15,456,585
912,212
864,206
Trade payables are non-interest bearing and are normally settled between 30 to 90 days. Other
payables which includes refundable security and other deposits to tenants.
Indirect taxes and social security contributions included due from prior years, which are being paid
in instalments in accordance with the agreements entered by the Group with Commission for
Revenue.
The Group's exposure to liquidity risk related to trade and other payables is disclosed in note 29.
23. Leases
23.1 The Group as a lessee
The Group has lease contracts for various buildings and furniture and fittings used in its
operations. Leases of building has lease terms of 5 to 11 years, while furniture and fittings have
lease terms of 5 years. The Group’s obligations under its leases are secured by the lessor’s title to
the leased assets. Generally, the Group is not restricted from subleasing the leased assets (except
when otherwise agreed with the lessor in special terms) and effecting major structural or layout
alterations on the leased premises.
The Group has a lease contract which includes in-substance fixed payments. The Group has no
lease contracts containing variable lease payments that depend on an index or a rate, residual value
guarantees and sales and leaseback transactions.
The Group has leases of garage with lease term of 12 months or less. The Group applies the ‘short -
term lease’ recognition exemption for this lease. There are no other leases qualifying for short term
or low value asset recognition exemptions applicable to the Company.
84
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
23. Leases (continued)
23.1 The Group as a lessee (continued)
Set out below are the carrying amounts of the Group's right-of-use assets recognised and the
movements during the period:
Buildings
Furnitures
and
Fittings
Total
€
€
€
As at 1 January 2024
201,575
2,359
203,934
Depreciation expense (note 7)
(49,280)
(2,359)
(51,639)
As at 31 December 2024
152,295
-
152,295
Depreciation expense (note 7)
(43,241)
-
(43,241)
As at 31 December 2025
109,054
-
109,054
Set out below are the carrying amounts of lease liabilities included under interest-bearing loans
and borrowings (note 16) and the movements during the period:
The Group
The Company
2025
2024
2025
2024
€
€
€
€
As at 1 January
172,360
225,046
-
-
Payments
(48,746)
(60,405)
-
-
Accretion of interest (note 9)
5,883
7,719
-
-
As at 31 December
129,497
172,360
-
-
Current
35,266
42,863
-
-
Non-current
94,231
129,497
-
-
The maturity analys is of lease liabilit ies are disclosed in note 3 1.
85
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
23. Leases (continued)
23.1 The Group as a lessee (continued)
The following are the amounts recognised in profit or loss:
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Depreciation expense of right-
of-use assets
43,241
51,639
-
-
Interest expense on lease
liabilities
5,883
7,719
-
-
Expense relating to short-term
leases and leases of low-value
assets (included in
administrative expenses) (note
7)
65,955
100,268
-
-
Total amount recognised in
profit or loss
115,079
159,626
-
-
The Group had total cash outflows for leases of €48,746 in 2025 (€60,405 in 2024). In 2025, same as
2024, there is no non-cash addition to right-of-use assets and lease liabilities.
23.2 The Group as a lessor
The Group has entered into operating leases on its property portfolio consisting of certain
commercial and residential buildings (see notes 13 and 17). These leases have terms of between 1
and 3 years for the non-cancellable portion, while up to 8 years for the cancellable portion
thereafter. All leases include a clause to enable upward revision (usually 10%) of the rental charge
at various intervals on a cumulative basis (in-substance fixed payments) as a precaution to
prevailing market conditions throughout the whole lease term. The Group is not exposed to
foreign currency risk as a result of the lease arrangements, as all leases are denominated in euro.
Rental income recognised by the Group during the year is €10,920,582 (2024: €10,283,694).
Future minimum rentals receivable under non-cancellable operating leases as at 31 December are
as follows:
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Within one year
11,864,596
4,971,033
-
-
After one year but not
more than five years
31,593,537
8,002,498
-
-
More than five years
8,315,587
2,414,854
-
-
51,773,720
15,388,385
-
-
86
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
24. Deferred taxation
Deferred tax liability
The Group
The Company
2025
2024
2025
2024
€
€
€
€
As at 1 January
(33,629,848)
(30,409,757)
-
-
(Charge)/Credit in profit or loss
(note 11)
2,946,224
(16,720)
-
-
Charge in other comprehensive
income
(17,366,702)
(3,203,371)
-
-
As at 31 December
(48,050,326)
(33,629,848)
-
-
The balance represents:
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Tax effect of temporary
differences relating to:
Asset revaluations
(48,050,326)
(33,629,848)
-
-
Deferred tax asset
The Group
The Company
2025
2024
2025
2024
€
€
€
€
As at 1 January
16,756,098
10,240,518
223,206
435,202
Credit/(charge) in profit or loss
(note 11)
1,738,351
6,515,580
(95,384)
(211,996)
As at 31 December
18,494,449
16,756,098
127,822
223,206
The balance represents:
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Tax effect of temporary differences
relating to:
Excess of capital allowances over
depreciation
6,531,713
5,363,138
-
-
Unabsorbed capital allowances
6,846,516
5,220,494
-
-
Unrelieved tax losses
4,111,946
4,206,060
121,636
215,750
Allowance for estimated credit
losses
193,515
1,173,236
6,186
7,456
Leases
200,819
200,688
-
-
Investment tax credit
609,940
592,482
-
-
18,494,449
16,756,098
127,822
223,206
Deferred income taxes are calculated on all temporary differences under the liability method and are
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 (and tax laws) that have been enacted by the end of the reporting
period. The principal tax used is 35% (2024: 35%) with the exception of deferred taxation on the fair
valuation of non-depreciable investment property which is computed on the basis applicable to
disposals of immovable property that is tax effect of 8% (2024: 8%) of the transfer value.
87
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
The Group and the Company did not have unrecognised deferred income tax assets that could be
carried forward against future taxable income as at 31 December 2025 and 31 December 2024.
25. Share capital
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Authorised:
500,000 Ordinary shares of
€1 each
500,000
500,000
500,000
500,000
Issued and fully paid up:
255,000 Ordinary shares of
€1 each
258,804
255,000
258,804
255,000
Each ordinary share gives the right to one vote, participates equally in profits distributed by the
company and carries equal rights upon distribution of assets by the company in the event of winding
up. See note 22 for more information on the reduction of issued share capital of the Group and the
Company.
26. Earnings per share
Earnings per share is based on the profit for the year attributable to the owners of the Group divided
by the weighted average number of ordinary shares in issue during the year.
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Profit for the year attributable to
shareholders:
- Basic profit/(loss) for year
attributable to ordinary equity
holders of the parent
20,343,865
50,331,733
4,987,399
21,165,743
Weighted average number of
ordinary shares in issue (note 25)
258,804
255,000
258,804
255,000
Earnings/(loss) per share (cents)
- Basic profit/(loss) for year
attributable to ordinary equity
holders of the parent
78.61
194.48
19.27
81.78
There is no difference between the basic and diluted earnings per share as the Group and Company
has no potential dilut ive ordinary shares.
88
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
27. Revaluation reserve
The Group
The Company
2025
2024
2025
2024
€
€
€
€
As at 1 January
261,353,044
261,160,764
-
-
Revaluation of property, plant
and equipment, net of
deferred tax (note 13 and 24)
11,784,745
-
-
-
Revaluation of investment
property, net of deferred tax
(note 17 and 24)
4,151,592
192,280
-
-
As at 31 December
277,289,381
261,353,044
-
-
The revaluation reserve comprises the revaluation of property, plant and equipment and
investment properties, net of deferred taxation due to change in fair market value which are
unrealised at the reporting date. The change in fair value of investment properties are transferred
from retained earnings to this reserve since these gains are not considered by the directors to be
available for distribution. Upon disposal of the respective investment property, realised fair value
gains are transferred back to retained earnings. This reserve is a non-distributable reserve.
28. Cash and cash equivalents
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Cash at banks and in
hand
6,598,604
1,455,374
-
4,011
Allowance for ECL
(2,670)
(409)
-
-
Bank overdrafts (note 16)
(2,225,195)
(452,911)
(119)
-
As at 31 December
4,370,739
1,002,054
(119)
4,011
Set out below is the movement in the allowance for ECL on cash in banks:
The Group
The Company
2025
2024
2025
2024
€
€
€
€
As at 1 January
409
344
-
-
Provision for ECL (note 7)
2,261
65
-
-
As at 31 December
2,670
409
-
-
89
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
29. Financial risk management objectives and policies
The Group's principal financial assets comprise trade and other receivables, loans receivable and
cash and cash equivalents. Its principal financial liabilities comprise trade and other payables,
borrowings and lease liabilities.
The Group is exposed to market risk, credit risk, liquidity risk, fair value risk and capital risk
management.
The Board of Directors reviews and agrees policies for managing each of these risks which are
summarised below.
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in market prices. Market prices comprise four types of risk: interest rate risk,
currency risk, commodity price risk and other price risk. Financial instruments affected by market
risk include borrowi ngs. The Group is o nly exposed to interes t rate risk.
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will
fluctuate because of changes in market interest rates.
Except as disclosed in note 16, the Group's borrowings are non-interest bearing. Borrowings issued
at fixed rates consist primarily of bank loans, 3.65% and 4% secured bonds which are carried at
amortised cost and therefore do not expose the Group to cash flow and fair value interest rate risk.
The Company's exposure to interest rate risk is limited to the variable interest rates on bank
overdraft and bank loans. Based on observations of current market conditions, the directors
consider an upward or downward movement in interest of 1% to be reasonable possible. However,
the potential impact of such movement is considered immaterial. As a result, the Company is not
subject to significant amounts of risk due to fluctuations on the prevailing levels of market interest
rates.
90
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
29. Financial risk management objectives and policies (continued)
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or
customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating
activities (primarily trade receivables and contract assets) and from its financing activities including
deposits with banks and loans to related undertakings.
Customer credit risk is managed by the Group's management subject to the Group's established policy,
procedures and control relating to customer credit risk management. Credit quality of a customer is
assessed based on each individual's credit limits. Outstanding customer receivables are regularly
monitored. An impairment analysis is performed at the reporting date on an individual basis. The
Group exercises a prudent credit control policy, and accordingly, it is not subject to any significant
exposure or concentration of credit risk.
The Group banks only with local financial institutions with high quality standard or rating. The Group's
operations are principally carried out in Malta and most of the Group's revenue originates from clients
based in Malta.
91
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
29. Financial risk management objectives and policies (continued)
Set out below is the information about the credit risk exposure on the Group and Company's financial assets and contract assets subject to ECL under
IFRS 9.
31 December 2025
The Group
Trade
receivables
(notes 16 and
21)
Loans to other
related
undertakings
(note 16)
Loans to
associates
(notes 16 and
21)
Loans to other
party
(note 16)
Other
receivables
(notes 16 and
21)
Amounts owed
by directors
(notes 16 and 21)
Cash and cash
equivalents
(note 31)
Total
Approach in measuring ECL
Simplified
General
General
General
General
General
General
Probability of default
15%
3.19% - 75%
4.84% - 100%
1%
0.06% - 1%
1.00%
0.15%
Loss given default
N/A
100%
100%
75%
100%
100%
45%
Estimated gross carrying
amount at default
1,447,964
8,774,349
5,710,014
250,000
253,544
-
6,598,604
Allowance for ECL
220,177
2,557,597
271,207
1,875
828
-
2,670
3,054,354
(Decrease) / increase in
provision for ECL (note 7)
140,258
(477,167)
(5,650)
-
(58)
-
2,261
(340,356)
31 December 2024
The Group
Trade
receivables
(notes 16 and
21)
Loans to other
related
undertakings
(note 16)
Loans to
associates
(notes 16 and
21)
Loans to other
party
(note 16)
Other
receivables
(notes 16 and
21)
Amounts owed
by directors
(notes 16 and 21)
Cash and cash
equivalents
(note 31)
Total
Approach in measuring ECL
Simplified
General
General
General
General
General
General
Probability of default
0% - 32.26%
4.84% - 100%
1.34% - 100%
1%
0.70% - 1%
1%
0.06%
Loss given default
N/A
100%
100%
75%
100%
100%
45%
Estimated gross carrying amount
at default
718,503
10,971,613
5,630,114
250,000
238,090
-
14,335
Allowance for ECL
79,919
3,034,764
276,857
1,875
886
-
409
3,394,710
Increase in provision for ECL
(note 7)
61,392
(4,175,429)
525
-
(964)
(82,419)
65
(4,196,830)
92
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
29. Financial risk management objectives and policies (continued)
31 December 2025
The Company
Loans to subsidiary
(note 16)
Amounts owed by
directors
(notes 16 and 21)
Total
Approach in measuring ECL
General
General
Probability of default
0.57%
0.70%
Loss given default
90.27%
100%
Estimated gross carrying amount at default
10,979,876
-
Allowance for ECL
17,673
-
17,673
Increase in provision for ECL(note 7)
(3,630)
-
(3,630)
31 December 2024
The Company
Loans to subsidiary
(note 16)
Amounts owed by
directors
(notes 16 and 21)
Total
Approach in measuring ECL
General
General
Probability of default
0.57%
0.70%
Loss given default
90.04%
100%
Estimated gross carrying amount at default
8,005,201
-
Allowance for ECL
21,303
-
21,303
Decrease in provision for ECL (note 8)
21,303
(10,402)
10,901
93
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
29. Financial risk management objectives and policies (continued)
Liquidity risk
The Group is exposed to liquidity risk in relation to meeting future obligations associated with its
financial liabilities. Prudent liquidity risk management includes maintaining sufficient cash and
committed credit lines to ensure the availability of an adequate amount of funding to meet the
Group's obligations.
The table below summarises the maturity profile of the Group’s financial liabilities based on
contractual undiscounted payments.
As at 31 December 2025
The Group
Less than
1 year
1 to 5
years
> 5 years
Total
€
€
€
€
Bank overdrafts
2,225,195
-
-
2,225,195
Bank loans
6,274,177
22,9956,764
16,180,989
45,411,930
Finance lease liabilities
39,692
99,230
-
138,922
4.00% secured bonds and
interest
-
-
44,970,000
44,970,000
3.65% secured bonds and
interest
-
-
14,940,000
14,940,000
Trade and other payables
12,274,673
-
-
12,274,673
Other financial liabilities
10,442,866
-
-
10,442,866
31,256,603
23,055,994
76,090,989
119,960,720
As at 31 December 2024
The Group
Less than
1 year
1 to 5
years
> 5 years
Total
€
€
€
€
Bank overdrafts
452,911
-
-
452,911
Bank loans
6,874,894
19,244,434
17,432,129
43,551,457
Finance lease liabilities
48,746
138,922
-
187,668
4.00% secured bonds and
interest
-
-
44,865,000
44,865,000
3.65% secured bonds and
interest
-
-
14,985,000
14,985,000
Trade and other payables
15,456,585
-
-
15,456,585
Loans from associate (note
31)
-
-
-
-
Other financial liabilities
2,437,530
-
-
2,437,530
25,270,666
19,383,356
77,282,129
121,936,151
94
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
29. Financial risk management objectives and policies (continued)
Liquidity risk (continued)
The below table shows gross undiscounted cash flows for lease liabilities and bank loans. The
following shows the corresponding reconciliation of those amounts to the carrying amount (net
present value):
As at 31 December 2025
The Group
Bank loans
Less than
1 year
1 to 5
years
> 5 years
Total
Gross payments
6,274,177
22,956,764
16,180,989
45,411,930
Finance charges
(894,566)
(2,862,613)
(715,653)
(4,472,832)
Carrying amount (net
present value)
5,379,611
20,094,151
15,465,336
40,939,098
The Group
Lease liabilities
Less than
1 year
1 to 5
years
> 5 years
Total
Gross payments
39,692
99,230
-
138,922
Finance charges
(4,426)
(4,999)
-
(9,425)
Carrying amount (net
present value)
35,266
94,231
-
129,497
As at 31 December 2024
The Group
Bank loans
Less than
1 year
1 to 5
years
> 5 years
Total
Gross payments
6,874,894
19,244,434
17,432,129
43,551,457
Finance charges
(406,815)
(2,236,073)
(1,182,931)
(3,825,819)
Carrying amount (net
present value)
6,468,079
17,008,361
16,249,198
39,725,638
The Group
Lease liabilities
Less than
1 year
1 to 5
years
> 5 years
Total
Gross payments
48,746
138,922
187,668
Finance charges
(5,882)
(9,426)
-
(15,308)
Carrying amount (net
present value)
42,864
129,496
-
172,360
95
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
29. Financial risk management objectives and policies (continued)
Liquidity risk (continued)
As at 31 December 2025
The Company
Less than
1 year
1 to 5
years
> 5 years
Total
€
€
€
€
4.00% secured bonds and interest
-
-
44,970,000
44,970,000
3.65% secured bonds and interest
-
-
14,940,000
14,940,000
Trade and other payables
912,212
-
-
912,212
912,212
-
59,910,000
60,822,212
As at 31 December 2024
The Company
Less than
1 year
1 to 5
years
> 5 years
Total
€
€
€
€
4.00% secured bonds and interest
-
-
44,865,000
44,865,000
3.65% secured bonds and interest
-
-
14,925,000
14,925,000
Trade and other payables
864,206
-
-
864,206
864,206
-
59,850,000
60,714,206
Fair value risk
As at 31 December 2025 and 2024, the carrying amounts of trade and other receivables, other
financial assets (loans and receivables), cash and cash equivalents, trade and other payables and
current borrowings reflected in the financial statements are reasonable estimates of fair value i n
view of the nature of these instruments or the relatively short period of time between the
origination of the instruments and their expected realisation. The fair values of non-current
borrowings are not materially different from their carrying amounts in the statement of financial
position.
The Group used the following hierarchy for determining and disclosing the fair value of
investment property.
Level 1: quoted(unadjusted) prices in active markets for identical assets or liabilities;
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair
value are observable, either directly or indirectly; and
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that
are not based on observable market data.
96
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
Fair value measureme nt hierarchy:
The Group
Level 1
Level 2
Level 3
Total
€
€
€
€
As at 31 December 2025
Investment property
Commercial properties
-
76,588,329
-
76,588,329
Residential properties
-
76,841,898
-
76,841,898
Offices
-
76,536,128
-
76,536,128
-
229,966,355
-
229,966,355
Property, plant and
equipment
Commercial properties
-
157,245,736
-
157,245,736
Residential properties
-
44,269,019
-
44,269,019
-
201,514,755
-
201,514,755
There were no transfers between level classifications of investment property and property, plant
and equipment during 2024.
The Group
Level 1
Level 2
Level 3
Total
€
€
€
€
As at 31 December 2024
Investment property
Commercial properties
-
74,722,911
-
74,722,911
Residential properties
-
73,796,496
-
73,796,496
Offices
-
72,671,599
-
72,671,599
-
221,191,006
-
221,191,006
Property, plant and
equipment
Commercial properties
-
129,723,238
-
129,723,238
Residential properties
-
43,881,136
-
43,881,136
-
173,604,374
-
173,604,374
As at 31 December 2025 and 2024, there are no properties owned by the Company.
Capital Risk management
Capital includes the equity attributable to the ultimate shareholders of the Group.
The primary objective of the Group's capital management is to ensure that it maintains healthy
capital ratios in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it in light of changes in
economic conditions. To maintain or adjust the capital structure, the Group may adjust the
dividend payment to the shareholders, return capital to the shareholders or issue new shares.
97
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
No changes were made in the objectives, policies or processes for managing capital during the
years ended 31 December 2025 and 2024.
The Group
The Company
2025
2024
2025
2024
€
€
€
€
Interest-bearing loans and other
borrowings
113,517,159
102,466,079
67,283,085
65,289,181
Trade and other payables (note
23)
12,274,675
15,456,585
912,212
864,206
Finance lease liability (note 24)
129,497
172,360
-
-
Less: cash and cash equivalents
(6,595,934)
(1,454,965)
-
(4,011)
Net debt
119,325,397
116,640,059
68,195,297
66,149,376
Equity
386,842,376
358,863,517
2,922,344
2,084,695
Net debt to equity ratio
0.34:1
0.34:1
(-66.68):1
(-66.68):1
No changes were made in the objectives, policies or processes for managing capital during the
years ended 31 December 2025 and 2024.
30. Events after the reporting date
People and Organisation
Looking ahead, the Group could eventually result in certain holiday apartments being redirected
into longer-term rental stock, slightly easing tightness. However, the Group’s people agenda for
2026 is focused on strengthening delivery through an updated organisational structure and the
standardisation of processes across all roles. Clear roles, responsibilities and reporting lines are
being established to improve accountability, consistency and decision-making across the
organisation.
To reinforce leadership capacity, the Group looks forward to the commencement of a new Revenue
Manager for ST Hotels in the near term. This role is expected to strengthen revenue management
capability and support improved forecasting, pricing discipline and performance optimisation
across the hotel portfolio.
The Group is also establishing a dedicated Learning and Development department to provide
structured guidance on career pathways and to formalise procedures across all sectors. This will
help ensure consistent standards, clearer progression opportunities and stronger support for
employees at every level. Management expects these initiatives to contribute positively to
employee retention and to sustaining high standards across operations appointed a new General
Manager and a new Marketing Manager. In additio n, the Group’s hotels met budget expectations
for the first four months of operation, and we will continue to monitor the situation and react
accordingly.
In summary: hotels and tourism may see a short-lived boost from market reallocation, but there is
a medium-term risk of slower growth or yield compression; residential rentals remain
underpinned by a tight market and steady foreign demand, though higher financing costs and
global sentiment could moderate rent growth; and commercial real estate (offices and shopping)
is supported by scarce land and strong service-sector demand.
98
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
31. Supplemental cash flow information
Changes in liabilities arising from financing activities
The Group
1 January
2025
Cash flows
Non-cash
changes
31 December
2025
€
€
€
€
Bank overdrafts
452,911
1,722,284
-
2,225,195
Bank loans
39,725,638
1,213,460
-
40,939,098
4% and 3.65% secured bonds
59,850,000
-
60,000
59,910,000
Loans from associate
-
105,780
-
105,780
Shareholders' loans
-
-
-
-
Amount due to related
undertakings
-
-
10,337,086
10,337,086
Finance lease liability (notes 16,
24 and 31)
172,360
(48,746)
5,883
129,497
Total liabilities from
financing activities
100,200,909
3,042,778
10,402,969
113,646,656
The Group
1 January
2024
Cash flows
Non-cash
changes
31 December
2024
€
€
€
€
Bank overdrafts
2,859,195
(2,406,284)
-
452,911
Bank loans
32,471,514
7,254,124
-
39,725,638
4% and 3.65% secured bonds
59,790,000
-
60,000
59,850,000
Shareholders' loans
-
-
-
-
Loans from associate
124
(124)
-
-
Finance lease liability (notes 16,
24 and 31)
225,044
(60,405)
7,721
172,360
Amounts due to related
undertakings
3,125,848
-
(688,318)
2,437,530
Total liabilities from
financing activities
98,471,725
4,787,311
(620,597)
102,638,439
99
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
Non-cash changes refer to accumulated amortization of bond issue cost, accretion of interest
expense on finance lease liability, and additional lease liability recognised during the year.
The Company
1 January
2025
Cash flows
Non-cash
changes
31
December
2025
€
€
€
€
Proposed dividends
5,439,181
(7,373,085)
-
7,373,085
4% and 3.65% secured bonds
59,850,000
-
60,000
59,910,000
Loans from subsidiary
undertakings
-
6,705,000
(6,705,000)
-
Total liabilities from
financing activities
65,289,181
(668,085)
(6,645,000)
67,283,085
1 January
2024
Cash flows
Non-cash
changes
31
December
2024
€
€
€
€
Proposed dividends
-
5,439,181
-
5,439,181
4% and 3.65% secured bonds
59,790,000
-
60,000
59,850,000
Loans from subsidiary
undertakings
377,571
22,622,429
(23,000,000)
-
Total liabilities from
financing activities
60,167,571
28,061,610
(22,940,000)
65,289,181
Non-cash changes refer to accumulated amortization of bond issue cost and loss incurred on
owner's divestiture recognised during the year.
32. Contingent liabilities
Some of the companies within the group (where the Company forms part as an ultimate parent
company) are engaged in various legal proceedings. As at approval date of these financial
statements, it is difficult to predict exposures of the Group; hence no provision has been made in
the consolidated financial statements accordingly.
100
Stivala Group Finance p.l.c.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2025
33. Related party transactions
The Company
The following table provides the total amount of transactions that have been entered into with
related parties for the relevant financial year.
Expenses
recharge to
(from)
related
parties
Dividend
income
Interest
income
Amount
owed by
(to) related
parties
€
€
€
€
Subsidiary of the Company:
Carmelo Stivala
Group Limited
2025
-
7,545,140
-
10,979,876
2024
-
23,854,283
-
-
Sub-subsidiaries of the Company:
ST Hotels Ltd.
2025
(45,000)
-
-
-
2024
(43,500)
-
-
-
Terms and conditions of transactions with related parties
The sales to and purchases from related parties are made on terms equivalent to those that prevail
in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free
and settlement occurs in cash. There have been no guarantees provided or received for any related
party receivables or payables. For the year ended 31 December 2025, the Group recorded
impairment of receivables relating to amounts owed by other related undertakings disclosed in
notes 16, 21 and 31, in compliance with IFRS 9. This assessment will be undertaken each financial
year through examining the financial position of the related party and the market in which the
related party operates together with other historical data on recovery of amounts due.
34. Ultimate controlling parties
Stivala Group Finance p.l.c., the ultimate parent company, is a public limited company
incorporated in Malta.
The Company's registered office is ST Group Head Office, Novotel Hotel, Level 2, 60, Triq Sir
Frederick C. Ponsonby, Gzira, GZR 1070, Malta. The Company's share capital is fully owned by
Carmelo Stivala Trustee Limited acting as a trustee, on behalf of the ultimate beneficial owners
which are Mr. Michael Stivala, Mr. Ivan Stivala and Martin John Stivala.