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1923 Investments p.l.c.

Report & Consolidated Financial Statements

31 December 2022

Company Registration Number: C 63261

Contents

Directors’ report

Statement of responsibility pursuant to the Capital Markets Rules

Corporate governance – Statement of compliance

Other disclosures in terms of capital markets rules

Statements of profit or loss and other comprehensive income

Statements of financial position

Statement of changes in equity – the group

Statement of changes in equity – the company

Statements of cash flows

Notes to the financial statements

Independent auditor’s report

# Directors’ report The directors present their report together with the audited financial statements of 1923 Investments p.l.c. (the Company) and the consolidated financial statements of the Group of which it is the parent, for the year ended 31 December 2022. Principal activities The Company acts as an investment company and service provider to its subsidiary undertakings. The group is engaged in (i) the sale and distribution of Apple Products and third party electronic products as an Apple Premium Reseller, (ii) the sale, maintenance and servicing of information technology solutions, security systems and provides electronic payment solutions, (iii) providing road, sea and air logistics services including the provision of ship-to-ship transfer services and LNG terminal management. Through the incorporation of E-Lifecycle Holdings GmbH during the current year, operating under the iRiparo and UZED brands, the Group offers high quality mobile device repair and the sale of refurbished phones and of accessories in Germany but the service will be extended to a number of other European countries in the near future. Performance review – The Group During the year under review, the consolidated revenue increased by 35.2% to € 232,714,394 (2021: € 172,154,948). The increase in revenue was driven by (i) organic revenue growth of 44.5%, amounting to € 55,847,490 primarily due to strong performance at iSpot, (ii) an increase of 13.4% in revenue amounting to € 4,155,687 in the Logistics sector, (iii) slight increase in revenue at Harvest Technology p.l.c. (‘Harvest’) from €15,747,511 registered in 2021 to €16,275,659 generated in 2022. In 2022, the Group registered an operating profit of € 12,061,076 (2021: € 10,483,284) on revenue of € 232,714,394 (2021: € 172,154,948), resulting in an increase in the operating profit margin from 6.1% in 2021 to 5.2% during 2022. The Group registered a profit before tax of € 9,430,624 (2021: € 8,316,511). The Group’s net assets at the end of 2022 amounted to € 59,536,589 (2021: € 52,831,260). In 2022, the increase in Net Asset Value is mainly attributable to the increase in profitability, amounting to € 6,705,329 (2021: € 7,257,204). It is pertinent to note that as a result of a weaker Polish Zloty (PLN) against the Euro closing at PLN 4.6808 at 31 December 2022 (2021: PLN 4.5969) and a stronger US Dollar (USD) against the Euro of USD 1.0666 at 31 December 2022 (2021: USD 1.1326), the translation reserve had a positive impact of € 666,338 (2021: € 1,641,334). While this movement arises since the reporting currency is different from the functional currency, all efforts are made by management to mitigate against adverse foreign currency variances arising from exposure to different currencies. Non-controlling interest increased from € 4,964,072 to € 5,039,034 being the share of profitability of Harvest not owned by the Company. The Group measures the achievement of its objectives through the use of the following other key performance indicators. Financial The Group’s current ratio (“current assets divided by current liabilities) currently stands at 1.02 (2021: 1.04). The Group uses this indicator as a measure of liquidity. The Group measures its performance based on EBITDA. EBITDA is defined as the Group’s profit before depreciation, amortisation, net finance expense and taxes. During the year under review, EBITDA increased by € 1,969,666 to € 19,736,539 from € 17,766,873 in 2021. The Group’s EBITDA margin decreased to 8.5% (2021: 10.3%). The return on average capital employed represents the profit on ordinary activities before finance costs and exceptional items but including share of results of joint ventures, divided by the average of opening and closing tangible net worth. The Company ensures that this capital is used as effectively as possible. The return on average capital employed increased from 11.2% to 11.6% during the year under review due to an increase in profitability. The Group’s gearing ratio has increased slightly to 42% (2021: 40%). Interest cover remained stable at 5.1 times compared to 5.1 times in 2021. Performance review – The Company as a stand-alone entity The Company earned revenue and investment income of € 1,110,000 and € 6,368,299 respectively (2021: revenue of € 1,010,000 and investment income of € 5,427,126). The Company registered a profit before tax of € 2,729,784 (2021: € 1,714,710). The net assets of the Company at the end of 2022 amounted to € 53,172,550 (2021: € 51,437,979). Group performance review – non-financial iSpot iSpot reported a strong year, both financially but also through improved customer engagement. During 2022, iSpot reported a 4 5% (2021: 19%) increase in organic revenue and € 2,313,990 (2021: € 2,774,313) increase in pre-tax profit. Footfall traffic within the stores increased by 28 % over 202 1 due to the removal of Covid-19 restrictions, increased in-store marketing campaigns and more outlets being opened during the year. Furthermore, iSpot experienced (i) increased e-commerce sales; and (ii) high conversion rate and significantly higher basket spend. The conversion rate, which measures the percentage of actual purchases compared to customers entering the store, amounted to 12.2 % and the average basket spend increased by 9.1 % to € 299 compared to €274 in 2021. Revenue from e-commerce increased by 30 % compared to 2021. Increased traffic and number of completed orders did not affect the quality-of-service delivery resulting in a high Net Promoter Score of 85% vs 81 % achieved in 2021. Observing the performance of brick-and-mortar stores in Poland, iSpot management decided to continue growing this channel with the opening of four additional stores, in Zielona Góra, in Gorzów, in Tarnów and Janki (Warsaw) . Furthermore, iSpot opened one additional service point in the South of Poland - Katowice . On 31 March 2023, iSpot Poland acquired 100% of the shares in Cortland Sp. z o.o, (“Cortland”). Cortland is the second largest Apple Premium Retailer in Poland and operated 16 outlets across Poland which are in locations that are complementary to those currently operated by iSpot. Through this new acquisition, iSpot also acquired a strong B2B franchise and plans to grow the combined business further through synergies and a tailored focus on its corporate and individual customers. Harvest Technology plc During the year under review, Harvest Technology registered an operating profit of € 2,089,978 (2021: € 4,007,506) on revenue of € 16,275,659 (2021: € 15,747,511). After accounting for net finance costs and taxation, the Group registered a profit for the year of € 1,341,370 (2021: € 2,693,519). During 2022, Apco Systems Limited reported a decrease in the transaction value processed through its gateway. The decrease was primarily due to the increased regulatory scrutiny and additional licensing requirements mandated on online gaming operators which impacted our large clients and the commissions receivable from partnering banks. Furthermore, the payment gateway is undergoing significant investment to upgrade the system to a cloud-based gateway. The development of the new gateway is highly demanding as it requires the company to operate and maintain two payment gateways in parallel. The new gateway is expected to be operational in the second half of 2023. At Apco, the key development is in new products and services primarily in Electrical Vehicle (EV) charging and Unmanned Aerial Vehicle (UAV) where Apco Limited has already been awarded new contracts. These two new products present an opportunity to further develop its internationalisation strategy. IT Services provider, PTL Limited, recorded higher revenue than the previous year due to the recognition of hardware and software licenses revenue related to the two main projects carried out successfully by the team for the Maltese public sector. Going forward, the key focus will be on expanding the service offering both locally and internationally. During 2022, the management team has been developing new relationships with prospective partners, in various countries, where PTL’s expertise in Health, Border Security and Financial Services is attracting interest from various stakeholders. Hili Logistics In the Logistics industry, following the Russia and Ukraine war, the market continues to be challenging and highly competitive. Despite the challenges posed during 2022 as a result of the sanctions and restrictions imposed by certain countries, agency business volumes at Carmelo Caruana Company Limited were in line with those performed in 2021. The Free-Trade Zone warehouse business continued to perform well in 2022. CMA-CGM Malta Agency Ltd experienced better performance in 2022, recording revenue growth of 6% which reached € 8,148,073 (2021: € 7,694,580). Profit after tax amounted to € 1,636,145 (2021: € 1,390,686). The demand for the STS services is predominately driven by the volume of oil traded amongst oil majors, independent traders, and also by production where local port infrastructure is unable to accommodate large tankers. In 2022, STS Marine Solutions reported revenue which increased by 14.4% to € 18,313,119 compared to € 16,008,764 in 2021. The management team remains focussed on submitting competitive tenders, concluding long term contracts and securing new STS operations in the Oil and LNG space in the US, Asia, North Africa and Europe. ALLcom, a freight forwarding company and provider of warehousing in Poland, saw better performance due to higher freight rates in 2022 compared to 2021. The profit before tax increased by 88% to reach € 612,764 in 2022 (2021: €325,226). During the year, part of the warehouse in Bolszewo was refurbished. E-Lifecycle Holdings GmbH Following the incorporation of the company in Germany on 28 June 2022, the company is investing to develop the business supported by a team of core management specialising in finance, HR, operations, marketing, warehousing, and most importantly building a pipeline of outlets to be opened in 2023. By the end of 2022, 2 outlets were opened, whilst by the end of the first quarter of 2023, a total of 7 outlets were operating in Germany. During 2022, the company incurred a loss amounting to €732,467. Principal risks and uncertainties The Board as a whole, including the Audit Committee members, consider the nature and extent of the risk management framework and risk profile that is acceptable to the Board. The Audit Committee regularly reviews the work carried out by Internal Audit, and ensure any weaknesses identified are remedied so as not to pose a risk to the Group. 1923 Investments has established strategic relationships with its key suppliers. These relationships support 1923 Investments’ product and service offerings, and sales activities generally. There is no guarantee that 1923 Investments will be able to maintain these alliances, enter into further alliances or that existing suppliers will not enter into relationships with 1923 Investments’ competitors. The loss of any of these relationships, in particular, the agreement with Apple that authorises iSpot Poland Sp z.o.o to engage in the sale and distribution of Apple products as an Apple Premium Reseller in Poland, could have a material adverse effect on 1923 Investments’ business, results of operations and financial condition. Additionally, the Group has alliances with shipping companies which will expire in 2023. The expiry of these alliances and agreements, if not renegotiated, may have a significant impact on the results of the logistics and transport business. Financial risk management Note 41 to the financial statements provides details in connection with the Group’s use of financial instruments, its financial risk management objectives and policies and the financial risks to which it is exposed. Non-financial statement In line with the Directive 2014/95/EU and pursuant to Article 177 of the Companies Act (CAP. 386), and in terms of the Sixth Schedule of the Act, the Directors of 1923 Investments plc. are hereby reporting the impact of its activities on environmental, social and employee matters, respect for human rights, anti-corruption and bribery matters. 1. Our Business Model The Group operates four main business activities, which are (i) the sale of retail and IT solutions in Poland predominately as an Apple Premium Reseller, (ii) the sale of payment processing services, the provision of IT solutions and security systems, (iii) the provision of road, sea and air logistics services; and (iv) provision of Ship-to-Ship transfers of oil and LNG, terminal Management and consultancy services. These activities are undertaken by separate subsidiaries, as explained in the annual financial statements. The Group’s iSpot Poland Sp z.o.o retail business in Poland offers an extensive range of Apple products dedicated accessories, technical services and other software in Poland. Under a Master Franchise Agreement with iRiparo, E-Lifecycle Holdings GmbH operaring under the iRiparo and Uzed brands is opening stores dedicated to high quality mobile device repair and the sale of refurbished phones and of accessories in 31 European countries, starting from Germany. E-Lifecycle Holdings GmbH operates in adherence to the principles of the circular economy – the circulation of products and materials, the elimination of waste and the regeneration of materials. Harvest Technology plc’s (Harvest) business line in Malta is a multi-brand information technology solutions provider to businesses and the public sector. In addition, Harvest, through APCO Systems Limited operates a payments solutions provider offering e-commerce processing services for retailers and internet-based merchants together with the provision of a wide range of automation and security solutions catering to the banking, retail, fuel and other sectors. Harvest is currently seeking further internationalization of its services in Europe and other continents where it already has a connection. Through its wide range of services and experience in technology, the Group is positioned to continue to develop and offer a wide range of solutions to its customers and to assure a high quality of services to its customers. Hili Logistics Limited is the logistics division continues to provide its transport and logistics services through its long-standing experience in the sector and its continued support and excellent relationship with its business partners. Hili Logistics is the shareholder of Carmelo Caruana Co. Ltd (CCCL), ALLcom and STS Marine Solutions Limited (STSMS).
• | CCCL is a Maltese company principally focused on warehousing, agency services and ship-to-ship operation services.
• | ALLcom was es tablished in 1995 and is a freight forwarding company. ALLcom provides warehousing and supports customers in diverse sectors in Poland.
• | STSMS is a world leading ship-to-ship service provider with over 30 years of experience in transferring crude oil, refined petroleum products, LPG and LNG, the Group’s core activities comprise oil, gas and LNG support operations, LNG terminal management, emergency support services and consultancy. Guardian LLC owns a vessel and provides services to STSMS.
2. Environmental Matters As a Group we are committed to environmental responsibility, and all subsidiaries within the Group have a role to play in living up to that commitment. We are aware that our operations have both a direct and indirect impact on our surrounding environment and therefore we place great importance in taking actions to mitigate such impacts. Efforts are being made on areas where the Group can have significant impact on critical environmental issues, including climate change, natural resource conservation and waste management. The Group invests in innovations that can improve our environmental footprint, besides collaborating with other organizations to raise environmental awareness and work with key suppliers to promote environmentally responsible practices in their operations. 2.1 Carbon emissions and other pollutants 1923 Investments management understand that environmental responsibility transcends our direct operations; thereby, as a Group we make sure to partner with suppliers who place great focus on minimising their carbon footprint and consequentially their environmental impact. In 2021, iSpot commenced to partially source its energy requirement from utility companies which generate electricity from renewable energy (not fossil fuel). In 2022, 19% of the electricity demand of 5 stores was covered by renewable electricity and a similar share is envisaged for 2023. During 2022, iSpot has also introduced a cycle-to-work benefit, incentivizing employees to use bikes over cars on their daily commute to work. Carmelo Caruana Co. Ltd (CCCL) plans to replace present vehicles with greener ones upon contract expiry. From an operational point of view, the company seeks to engage contractors with the most modern and safest equipment on the market. In the meantime, the employees also try to consolidate trips via land or sea avoiding unnecessary emissions and promote shortest transit trips. CCCL abides with local port notices and makes sure to inform all of its clients before any of their vessels call Malta. This includes consumption of fuel and switching to lower-sulphur content fuel as early as possible. STSMS maintains an Environmental Aspect and Impact Register through which data relating to environmental impact is measured and analyzed for objectives and targets to be set. The Reduction of impact targets and objectives are in respect of the following areas: surface water, ground water, soil, air, natural resources, waste, legal and other requirements, public/customer relations and accidental release of product spills. Operational, terminal and office activities were assessed and the areas impacted are; air, natural resources, waste and accidental release. The Register has assessed the Aspects and implemented controls to reduce the scores accordingly. All data is recorded on the HSE Document SharePoint with trends and information shared throughout STSMS via different means i.e., booklets, presentations, graphs etc. Guardian LLC vessel is periodically maintained to ensure Health and Safety standards. The routes are planned in a way to be fuel efficient and pollute less. Harvest Technology are evaluating changing their car fleet (leased) to hybrid and/or electric vehicles to further reduce carbon emissions. They are also offering increased opportunity for remote working – further reducing the carbon footprint of operations. All companies also encourage employees to car pool whenever possible. This will help decrease air pollution and associated health costs. Having less cars on the road means reduced emissions and enhanced air quality. In particular, we have a “Corporate and Social Responsibility Policy” to enforce our commitment to protect the environment. 2.2 Natural resource conservation iSpot has continued its tree-seeding actions for employees, the “przygarnij złomka” initiative (refurbishment of computers for schools), and trade-in in stores to reduce circulating machines (both iphones, ipads and macs). In 2021 iSpot planted 1400 m2 of trees as part of the “forest forever” project. In 2022, 1522 contracts were signed remotely, which will translate into planting 1522 m2 of trees in the same project. 2.3 Resource use and circular economy STSMS has recently reviewed their “Rubber Hose Age Policy” to support prolonging the hose life. This allows for a reduction in natural resource utilization, as well as the reduction in disposal and overall environmental impact. Most of the STS equipment such as rubber hoses and fenders has a shelf life as recommended by the manufacturers. Over the last couple of years, STSMS and CCCL have embarked on surveying exercises to extend the life of the assets whenever possible rather than immediate disposal. On other occasions, when the life of such assets could not be extended the company has sold at reduced costs or donated such equipment to entities that had use for such equipment without jeopardising the environment. Most recently the company has also opted to invest in equipment (hoses) with longer operational life. The company also makes sure to make the necessary maintenance and certification to all the equipment. STSMS operates a KPI relating to recycling and repurposing the fenders used in the STS operations to support environmental objectives. CCCL sold expired fenders and hoses which have exceeded their life span for operational purposes. Such assets were still in good condition and could be utilised by other parties as opposed to disposing of them. CCCL has replaced equipment with a longer life span, thus prolonging the life of the asset and reducing the disposal frequency required upon expired equipment. iSpot has also embarked into an exercise of redesigning the packaging of its B-brand to eliminate foil and reduce plastic of its packaging. iSpot is planning to recycle used marketing materials into gadgets, bags for Employees. During 2022, iSpot introduced an electronic exchange of documents between shops and the warehouse, which significantly reduced paper folding. In addition, a cardboard cutter was purchased for the warehouse, this creating a new process through which the utilities of the cartons are reduced and can be used as the filler to secure the goods sent from the warehouse. At iSpot, in 2021 we saw the introduction of a totally paper-free Leasing Process (with no paper documentation as well as an agreement with supplier to plant 1m 2 of forest for each agreement signed by the customer). iSpot introduced reusable cartons for their online store, enabling customers to return their goods (if and when necessary) in the same packaging as that acquired. The back-office of 1923 Investments and its subsidiaries put particular focus on saving paper and minimizing printed material. 2.4 Waste management We feel that it is our duty to operate as part of the local community in order to keep the countries where we operate tidy. Subsidiaries within the Group are enrolled in local programmes for waste collection, separation and recycling of waste. iSpot introduced re-cycling measures in the head office (previously unavailable) and is now separating organic material, paper, plastic, metal and glass. At the level of CCCL, informing all clients before any of their vessels call Malta helps improve water ballast practices, deployment of oil booms and encourage clients to dispose segregated waste to authorized waste companies. CCCL also encourages its employees to separate waste by providing segregated bins for recyclable materials and waste. Furthermore, the company engages the services of a recycling company to recycle paper. In addition to what is stated above, STSMS disposes old IT equipment that has been replaced or decommissioned and that will not be used in the future in compliance with the WEEE regulations, and an appropriate waste transfer note is obtained. STSMS ensures that sensitive or confidential information contained on any IT devices is protected or removed as appropriate. STS Transfer hoses are disposed of, via local entities for recycling and a waste transfer note is obtained. In line with the STSMS ISO14001 certification, the STSMS “Environmental Management Plan” details the aspects and impacts, commitment to legislation, auditing and recording and evaluating of environmental performance. This is audited on a yearly basis and is awarded for the recognition that the Companies Environmental Management section of its Integrated Management System conforms with the Standard by identifying, managing, monitoring and controlling environmental processes. ALLcom who have implemented full waste segregation at their offices, are registered in BDO database (database for products, packages and waste management), and have an agreement with third-party organizations for utilization of paper and plastic foil. Plastic and paper waste is being collected separately on monthly basis. 2.5 Energy efficiency In terms of energy efficiency, the Group implements modern technology throughout its business divisions, with the installation of energy management systems, automatic light switches and movement detectors together with the use of energy efficient equipment and LED lighting in its buildings. Harvest Technology are reporting consumption of energy usage with a commitment to improve this metric going forward. In an effort to increase the employees’ climate awareness and consciousness, 1923 Investments plc and its subsidiaries adopt temperature regulation while employees are advised to switch off air-condition systems when not needed as well as switching off unnecessary lighting. In most common parts, our offices have installed motion sensor lighting to allow for an overall reduction in energy usage. 3. Social and Employee Rights 3.1 Employee wellbeing We strongly believe that our employees deserve to be treated with fairness, respect and dignity, providing equal opportunity for employees and applicants. All of the Group’s employees have the right to work in a place that is free from harassment, intimidation or abuse, sexual or otherwise, or acts or threats of physical violence. We also encourage our employees to have a healthy work-life balance, which will not only make them happier and more productive but would also help in leading healthier and more fulfilling lives. At 1923 Investments and its subsidiaries, employees make use of state-of-the-art recreational areas and are promoting working on hybrid basis (working from office versus working from home). iSpot is currently offering psychological emergency support (regardless of cause) and allocates funds for social or medical emergencies. iSpot is planning to extend the benefit of psychological support to psychotherapeutic support throughout Poland and subsidise psychiatric consultations. Furthermore, iSpot welcomes all maternity, paternity and parental leaves and supports its employees during those important moments (gifts for mothers/fathers). STSMS Equality Policies ensure that all employees are entitled to work in a violence and harassment free environment. This is subsequently supported by the Company’s “Bullying and Harassment Policy”. STSMS “Corporate and Social Responsibility Policy” covers their commitment to looking after employees and human rights. Mental health wellbeing has been a focal point for STSMS post COVID, STSMS have operated on knowledge sharing during STSMS safety meetings, and sharing bulletins highlight not only the free support services, but the Company Support Mental Health Program. STSMS displays this information through the office for ease of access to this information. ALLcom management cherish the work-life balance principle of its employees. Furthermore, at 1923 Investments and all subsidiaries, employees have been equipped to work from home where possible. This approach started during COVID and was continued in 2022. Flexible working hours are offered when necessary. 3.2 Health and Safety of our Employees We are committed to providing a safe and healthy working environment for our employees, requiring all employees to abide by safety rules and practices and to take the necessary precautions to protect themselves and their fellow employees. We continue to integrate Health and Safety in our policies and premises, ensuring that our employees and our clients health is safeguarded. Moreover for everyone’s safety, employees must immediately report accidents and unsafe practices or conditions to their immediate supervisors. We do our utmost to work in a safe environment free of workplace hazards, violence, threats of violence, intimidation and personnel under the influence of alcohol or illegal drugs. We strictly prohibit any verbal abuse, threatening behavior, or conduct that may endanger persons or property, including possession of any unauthorized firearm or other weapon on our property. Our policies on Health and Safety and Alcohol and Drug Abuse provide more information and guidance. STSMS has a digital reporting platform for audit, accident, and best practice information, this is accessible to partners and contractors to ensure all inputs to the overall Company success are operating as one. STSMS operates a stringent investigation procedure, with a database of qualified investigators noted to carry out investigations. The results of all health and safety investigations are discussed during monthly safety meetings. KPI’s and targets are set by the Senior Management Team for proactive safety reporting to ensure that the statistical data can be analyzed, and measures can be put in place to protect the employees. Health and Safety Audits are carried out annually on procedures and in each remote location to assess compliance with STSMS safety standards and appropriate health and safety legislation. Mental health wellbeing has also been a focal point for STSMS post COVID, STSMS have operated on knowledge sharing during STSMS safety meetings, and sharing bulletins highlight not only the free support services, but the Company Support Mental Health Program. STSMS displays this information through the office for ease of access to this information. From a Health and Safety perspective, iSpot is auditing all stores, warehouses, service centre and head office all year round to ensure 100% compliance with government regulations. At iSpot employees are provided regular courses on first aid in life-threatening emergencies. ALLcom uses an external company that is responsible for identification of health and safety hazards, implementation of adequate procedures, remediate actions, staff training and application of monitoring controls. All employees are trained on health and safety procedures. The staff is also included in the long term first aid training curriculum. Fire drills are performed regularly by the administrators of the offices. 3.3 Employee long-term development The Group provides various opportunities, nurtures talent, provides support to develop leaders and rewards achievement. Performance evaluation systems are employed across the Group by applying career progression mechanisms and by rewarding achievements. All subsidiaries within 1923 Investments promote continuous development programmes through sponsorship, conduct talent assessments following the performance review process to ensure succession planning and career growth. For example, ALLcom provides specific tax, customs, accounting and HR trainings for the employees. Regular English lessons are offered to most of the staff. Annual Performance Review is being performed along with constructive feedback. Remuneration levels and promotions are based on individual performance, skills and responsibilities and are in no way linked to other personal factors. Whether at iSpot, STSMS, CCCL, ALLcom or Harvest Technologies management believe that on-the-job training is an important aspect of total training and management ensures that work is allocated to expose individuals to a range of tasks that will assist in their personal development. Every possible assistance is given to employees to share information and experiences and to learn from each other. Furthermore, training and succession planning were primary focus of iSpot in 2022. The company offered multiple workshops and training related to advancing careers (for example iSpot Heroes, iLeader+ (for Retail staff) and iSpot Managers Masterclass (for HQ, Service and Warehouse). iSpot introduced comprehensive and clear succession planning in Service department as well as in Retail outlets. iSpot is planning to introduce an internal mentoring and coaching programme to share knowledge, experience and expertise for employees within the organisation. 3.4 Equality, diversity and inclusion at the workplace The Group believes that a team of individuals with diverse backgrounds and experiences, working together in an environment that fosters respect and drives high levels of engagement, is essential to its continuing business success. We are committed to diversity and equal opportunities for everyone, respecting the unique attributes and perspectives of every employee, and we rely on these diverse perspectives to help the Group build and improve the relationships with customers and business partners. The Group embraces the diversity of its employees, customers and business partners, and we work hard to make sure everyone within the Group feels welcome. The Group provides equal treatment and equal employment opportunity without regard to race, colour, religion, sex, age, national origin, disability, sexual orientation, gender identity or any other basis protected by law. As per our policy on Equal Opportunities and Sexual Harassment, employees respect the rights of fellow colleagues to fair treatment and equal opportunity, free from discrimination and unlawful harassment or retaliation. We avoid any comments or behaviour toward others that may reasonably be regarded as harassment, or as reflecting bias on the basis of any protected category including, but not limited to, race, religion, national origin, age, sex, sexual orientation or disability. STSMS employs Mooring Masters of different nationalities for carrying out work in various locations around the world, and have a mixed gender head office with 66% male and 34% female. As of the end of December 2022, at ALLcom out of a total of 39 employees, 23 are women (59%) with 4 women having a managerial position (36%), including the managing director. 3.5 Support to the Community The Group takes its corporate social responsibility very seriously and engages with its social partners and the community in general to give back through community involvement and the protection of the environment through the creation and realisation of advanced technology systems. The Group’s history has shown a proven contribution towards society by enhancing the quality of life of its customers and the general public alike. In 2021, iSpot supported “Wielka Orkiestra Świątecznej pomocy” charity as well as “iSpot heros” through donations made for initiatives brought up by its employees. Each employee at CCCL can opt to donate a small amount from each salary payment to the Ronald McDonald House Charity (RMHC). This encourages employees to give back to the community and contribute to the wellbeing of the recipients of the charity. At iSpot, in 2022 a volunteer programme was conducted in which all employees had to opportunity to help people at 3 foundations in Poland. STSMS encourage employees to use an annual allowance per employee of 2 days per year to use for supporting agreed community events / fund raising events with worthwhile local causes and/or charities (some restrictions include that eligible organisation must be registered charities, supporting local communities and demonstrating financial responsibility). During 2022, ALLcom continued its commitment to support charity actions for local community, through donations and employees activities (e.g. organization of a food collection for the poor and homeless, collection of clothes for orphanages, etc.). Our employees are also collecting plastic bottle tops for charitable purposes. 4. Respect for Human Rights The Group conducts its activities in a manner that respects human rights, taking the responsibility seriously to act with due diligence to avoid infringing on the human rights of others and addressing any impact on human rights if they occur. The Group’s commitment to respect human rights is defined in the code of business conduct, which applies to all employees of the Group. Group employees are trained annually on the standard of business conduct. Employees conduct all aspects of our business in an ethical manner that reflects our dedication to integrity, honesty and fairness. At all times, they are to obey the laws of the jurisdictions where we conduct business. Our Code of Business Conduct and ethics provide more information and guidance and is available in English and Polish so that it is communicated and understood by everyone in different countries. 5. Anti-corruption and bribery matters The Group’s employees must comply with the Group Code of Conduct and Whistle-blower Policy to ensure that all employees are discouraged from any corrupt practices or bribery as well as are incentivized to report any such activities in a direct line with the responsible Group supervisor, without fearing reprisals. Every employee is introduced to these policies upon employment and are mandatory to be adhered to it. The Group prohibits all forms of bribery or kickbacks as detailed in the Code of Conduct. All employees, representatives and business partners must fully comply with anti-bribery legislation. To comply with the Group policy and anti-bribery laws, no employee should ever offer, directly or indirectly, any form of gift, entertainment or anything of value to any government official or his or her representatives. The Group is committed to complying with the applicable laws in all countries where it does business. It adopts an anti-corruption policy which sets forth its commitment to ensuring that it carries out business in an ethical manner and abides by all applicable anti-bribery and anti-corruption laws in the countries in which it operates by, among other things, prohibiting the giving or receiving of improper payments in the conduct of its business, and by discouraging such behaviour by its business partners. All employees must also comply with the Anti-Corruption Policy to ensure that corrupt practices are deterred, allowing the company and its people to operate with integrity. Employees and Directors should also not accept gifts or other things of value from suppliers or others that we do business with that are unlawful, improper or outside the bounds of company guidelines 6. EU Taxonomy Disclosure The EU Taxonomy establishes an EU classification system for ecologically sustainable economic activities (EU Taxonomy). It is the European Union’s core tool to channel capital flows towards sustainable investments and to create market transparency. It encourages an increased flow of investments to where they are most needed for sustainable development. In accordance with Article 8 of the European Regulation 2020/852 (EU Taxonomy Regulation) and Article 10(2) of the Disclosures Delegated Act ( Commission Delegated Regulation (EU) 2021/2178), 1923 Investments plc (or “the Group”) is subject to the obligation to disclose the part of its 2022 revenue, its capital expenditures, and operating expenses which is considered “eligible” as well as “aligned” under the EU Taxonomy of sustainable activities. Furthermore, the Group will disclose qualitative information (according to Section 1.2 of Annex I of the Disclosures Delegated Ac t as of January 2022) . A Taxonomy-eligible economic activity means an economic activity that is included in the delegated acts supplementing the Taxonomy Regulation . Taxonomy-aligned activities, are eligible activities, which in addition meet the technical screening criteria (significant contribution), do not significant harm and comply with minimum social standards. At this point, the EU regulation is in force for objectives related to climate mitigation and climate adaptation , with further delegated acts detailing requirements on other four environmental objectives (water, biodiversity, circular economy and pollution prevention) to be published at a later stage. Identifying eligible activities In order to identify business activities that may be in scope of the European Taxonomy Regulation, the Group relied on the EU Taxonomy Climate Delegated Act ( Commission Delegated Regulation (EU) 2021/2139) supplementing Regulation (EU) 2020/852, in particular Annex 1 & 2 and the EU Taxonomy Compass. In a first step, the eligible and non-eligible activities were identified based on the officially-assigned NACE codes of the Group’s subsidiaries in a top-down approach. [1] In case the NACE code was reflected in the EU Taxonomy on sustainable activities, the activity descriptions were assessed against the actual activities carried out by the entities to further verify and confirm eligibility. EU taxonomy activities, which have not been assigned a NACE code in the EU Taxonomy Compass/delegated acts (e.g. Storage of Hydrogen or restoration of wetlands) were assessed based on the activity description only. Identified relevant activities within the EU Taxonomy, based on NACE code basis, are the following:
NACE | Activity stated in Taxonomy Climate Delegated Act | Dimension
52.2.2 | 6.10. Sea and coastal freight water transport, vessels for port operations and auxiliary activities | Climate mitigation
52.2.2 | 6.12. Retrofitting of sea and coastal freight and passenger water transport | Climate mitigation
52.2.2 | 6.12. Retrofitting of sea and coastal freight and passenger water transport | Climate adaptation
62 | 8.2. Computer programming, consultancy and related activities | Climate adaptation
62 | 8.2. Data-driven solutions for GHG emissions reductions | Climate mitigation
65.1 | 10.1. Non-life insurance: underwriting of climate related perils | Climate adaptation
6 1 | 8.2. Data-driven solutions for GHG emissions reductions | Climate mitigation
After reviewing the actual activities carried out by the respective entities, and assessing them in line with the more detailed EU Taxonomy descriptions, it was decided that the activities under NACE 62, 61 as well as 65.1 should not be considered eligible . This assessment has also been based on the Commission Notice on the interpretation of certain legal provisions of the Disclosures Delegated Act under Article 8 of EU Taxonomy Regulation on the reporting of eligible economic activities and assets (2022/C 385/01), in particular Question 5 on eligibility of climate adaptation-related economic activities. Thus, the final list of eligible activities is shown below:
NACE | Activity stated in Taxonomy Climate Delegated Act | Dimension
52.2.2 | 6.10. Sea and coastal freight water transport, vessels for port operations and auxiliary activities | Climate mitigation
However, in addition to the core economic activities, also certain OpEx and CapEx that is channeled into Taxonomy-eligible or aligned activities, can be included in the calculations, as referenced in Annex I of the Disclosures Delegated Act ( Commission Delegated Regulation (EU) 2021/2178) . With regard to the above, potentially eligible spend related to sales and installation of electric vehicle charging equipment (Installation, maintenance and repair of charging stations for electric vehicles in buildings and parking spaces attached to buildings, climate change mitigation & adaptation). C alculation of eligibility KPIs In a second step, the three eligibility KPIs (turnover, Opex, Capex) were calculated based on the EU Taxonomy regulation and Disclosures Delegated Act (Section 1.1 of Annex I – KPIs of non-financial undertakings) and its definition of the denominator and numerator of the required KPIs. This step consisted of: (a) Extracting the denominators for the 3 KPIs for the Group from the financial reporting system (b) Calculating the numerators for all identified eligible sub-activities within the Group and its subsidiaries based on Turnover, Capex and Opex . These non-financial statement disclosures are based on the same consolidation principles that have been applied in the Group’s financial reporting under the applicable accounting principles, in order to ensure comparability of this reporting with the Group's financial information. The following definitions were applied:
| Turnover | Capex | Opex
Numerator | Revenues derived from products and/or services associated with EU taxonomy eligible activities. | Capital expenditures that: · relates to assets or processes associated with the EU taxonomy eligible activities; · are part of a plan to expand taxonomy-eligible economic activities, or; · that enable taxonomy-eligible activities to become taxonomy-aligned. | Operating expenses that are related to assets or processes associated with the EU taxonomy-eligible activities. This also includes some operational costs (maintenance & repairs) related to operation of the vessel under activity 6.10. which was extracted from the “cost of sales” of those entities.
Denominator | Total consolidated r evenues accounted for in the Consolidated Income Statement under IFRS (included in Note 6 in the Financial Statements) | Total Capex consisting of a dditions to tangible and intangible assets accounted for in the Consolidated Financial Statements under IFRS during the financial year, considered before depreciation, amortisation and any re-measurements, excluding Goodwill (included in Notes 16 and 17 in the Financial Statements , Balance Sheet ). | Total OPEX consists of the total cost of sales and operating costs, but excluding the cost of Sales for iSpot since it is a material amount related to the purchase of electronic goods for resale.
Note: In 2022 additional CAPEX or OPEX spent apart from the ones deriving from core eligible economic activities was identified . Relevant spent in qualifying areas related to sales and installation of EV charging infrastructure. Based on the above criteria the following KPIs were derived: Table 1:
| Turnover | CAPEX | OPEX
Nominator ( €) | 569,801 | n.a. | 345,901
Denominator ( €) | 232,714,394 | 4,738,733 | 36,199,391
Taxonomy-Eligible Activities (%) | 0.24% | 0% | 0.96 %
C alculation of alignment KPIs In a next step alignment for the identified eligible activities related to NACE 52.2.2 as well as the two identified expenditures in qualifying areas was assessed. T he eligible project spend and eligible activities under NACE 52.2.2 were not considered aligned due to the absence of a robust climate risk and vulnerability assessment which contributed to the failure to fully satisfy the Technical Screening Criteria (TSC) and/or the Do No Significant Harm (DNSH) criteria. Hence, it was concluded that none of the eligible activities or expenditures is to be considered aligned. Based on the above conclusions the following alignment KPIs were derived: Table 2:
| Turnover | CapEx | OpEx
Nominator ( €) | 0 | 0 | 0
Denominator ( €) | 232,714,394 | 4,738,733 | 36,199,391
Taxonomy- Aligned Activities (%) | 0% | 0% | 0%
The presented KPIs can also be found in Annex 1, where Turnover, CapEx and OpEx KPIs for 1923 Investments plc are presented in the templates provided in Annex II of regulation EU 2021/2178. Additional Qualitative Disclosures According to Art. 10.2 of EU 2021/2178 companies shall be disclosing the qualitive information referred to in Section 1.2 of Annex I in addition to the quantitative information above (KPIs of non-financial undertakings). No changes to the accounting policy (1.2.1) have taken place compared to the previous reporting year double counting has been avoided as for example eligible spend was only counted towards one environmental dimension (in case several were applicable). With regard to the required contextual information (1.2.3) no major changes of eligibility and alignment KPIs during the reporting period have taken place despite the incorporation of a new legal entity (E-Lifecycle Holding GmbH) in October 2022. As the activities of this entity were neither eligible nor aligned, this change did not impact the overall KPIs. Summary and Outlook For the 2022 reporting year, the complete reporting requirements of the EU Taxonomy w ere applicable for the first time. Thus, in 2022, we did not only report on the Taxonomy eligible activities but also, where applicable, assess ed their alignment with the Taxonomy principles such as the substantial contribution criteria (Technical Screening Criteria), the Do es No t Significant Harm Criteria and respect for minimum social standards. As expected, b ased a substantial contribution or Does Not Significant Harm criteria less activities were aligned versus eligible which is mostly due to the requirement to perform a robust climate risk and vulnerability assessment. In the future the Commission is expec ted to adopt the d elegated acts related to the remaining four environmental objectives; thus going forward we will also assess and report on those activities. Irrespective of the above Taxonomy disclosures with regard to the Group’s direct economic activity, the Group remains committed to its priority sustainability issues. 7. Concluding remarks Moving forward the Directors are of the firm belief that having good social, environmental and governance structures support the Group’s strategy and its reputation and enables the good quality of services and products offered. Therefore, the company will continue putting such matters high on our agenda, making sure that such measures bring a tangible positive change to the environment, employees and society as a whole. The Group is also looking into the upcoming commitments related to the newly-enacted Corporate Sustainability Reporting Directive (CSRD). In view of the fact that the Company will be required to report in line with CSRD during financial year 2024, the Company will be launching and implementing initiatives during 2023 which include:
• | To seek to practice the values of care through social inclusion during our recruitment process, whereby giving career opportunities to people with special needs;
• | Similar to what we have already implemented in our warehousing sector at Carmelo Caruana Co. Ltd, we shall seek to provide career opportunities and train unskilled workers by providing them with opportunities to learn on the job;
• | All staff to perform 2 days each year as voluntary work at a charity organisation (still to be determined) as part of our corporate social responsibility targets;
• | To promote flexibility at the workplace by introducing a policy where employees can work up to one day from home every week (2 days in HQ of iSpot), depending on the type of work (unless it is client facing such as at iSpot);
• | To promote the use of electric / zero emission cars which can be purchased or leased at each of our subsidiaries.
Annex 1 Proportion of turnover from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2022. Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities - dsclosure covering year 2022. Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2022. Significant judgements and estimates Note 4 to the financial statements provides details in connection with the inherent uncertainties that surround the preparation of the financial statements which require significant estimates and judgements. Results and dividends The results for the year ended 31 December 2022 are shown in the statements of profit or loss and other comprehensive income. The Group’s profit after tax was € 7,246,014 (2021: € 5,838,440), whilst the Company’s profit after tax was € 2,519,578 (2021 € 1,719,387). During 2022, a management fee amounting to € 600,000 was charged by the parent company (2021: € 600,000). In December 2022, a dividend of €785,007 was declared and paid to the parent company (2021: Nil). Likely future business developments The directors of 1923 Investments p.l.c. are of the view that there are a number of investment opportunities in the retail sector, technology sector and logistics sector. iSpot has also embarked into an annual target of increasing 2 new outlets in Poland to speed up its organic growth initiatives. Through a larger network following the acquisition of Cortland Sp. Z.o.o., management is envisaging to operate 47 outlets in Poland and strengthen the B2B business sector. Through the sale of B-brand and third party products to all outlets operated by iSpot and Cortland, it is expected that the service and product offering will be more complete and customer driven. 1923 Investments plc is also planning to further expand its retail sector in Europe. Through its subsidiary E-Lifecycle Holdings GmbH, a company registered in Germany in June 2022, 1923 Investments plc endevours to be a leading European retailer supplying refurbished phones, highquality mobile device repair and accessories. Under the terms of the agreement, the Company has the right to launch the brand across 31 countries in Europe. iRiparo is already present in European markets, with 380 stores across Italy, France, and Spain. The Company has launched its iRiparo operation in Germany and has opened 2 outlets by end of 2022. E-Lifecycle Holdings GmbH plans to open more outlets in Germany and launch the business in Romania by end of 2023. Each investment opportunity that will arise during the course of the year will be thoroughly explored and evaluated with a view to continue to grow its business portfolio in line with the Company’s strategy. Whilst the situation remains fluid and future events may have an adverse effect on the Group’s future profitability, liquidity and financial position, the medium-term outlook remains cautiously optimistic. The directors consider that the year-end financial position of the Group was satisfactory however future performance might be negatively affected due to the geopolitical situation in Europe, especially if this spreads beyond Ukraine. Post balance sheet events By way of a company announcement issued on 31 March 2023, 1923 Investments plc through iSpot Poland Sp. z o.o entered into a share purchase agreement to purchase 100% of the shares issued in the capital of Cortland Sp. z o.o, (“Cortland”). The consideration paid upon execution of the SPA amounts to PLN 198,600,000 equivalent to €42,800,000 and is subject to a subsequent adjustment calculated in a manner specified in the SPA. The overall terms of the SPA are considered customary for a transaction of this size and nature. The total gross assets and the profits before tax of Cortland as at the 31 December 2022, as per its audited financial statements drawn up in accordance with Polish GAAP, are reported as PLN69,480,000 and PLN 35,263,000, respectively, equivalent to €14,840,000 and €7,530,000, respectively. There were no other adjusting or significant non-adjusting events that have occurred between the end of the reporting period and the date of authorisation by the board. Directors The following have served as directors of the Company during the period under review: Mr Charles Borg – Chairman Mr Carmelo sive Melo Hili Mr Dorian Desira Mr Karl Fritz Dr Annabel Hili (appointed on 20 September 2022) Dr Ann Fenech In accordance with the Company’s Articles of Association, the present directors remain in office. Going concern After making due enquiry and using the best judgment available at the time of approving these financial statements, an impact assessment has been carried out by the Board, including a review of different service level and cash flow scenarios. Based on this review and the measures taken as indicated above, the Board expects that the Group will be able to sustain its operations over the next twelve months, and to meet its obligations as and when they fall due. Accordingly, for these reasons the Board is of the opinion that it remains appropriate to adopt the going concern basis in the preparation of these financial statements. Disclosure of information to the auditor At the date of making this report the directors confirm the following:
- | As far as each director is aware, there is no relevant information needed by the independent auditor in connection with preparing the audit report of which the independent auditor is unaware, and
- | Each director has taken all steps that they ought to have taken as a director in order to make themselves aware of any relevant information needed by the independent auditor in connection with preparing the report and to establish that the independent auditor is aware of that information.
Statement of directors’ responsibilities The Companies Act, Cap 386 requires the directors to prepare financial statements for each financial period which give a true and fair view of their state of affairs of the Group and the Company as at the end of the reporting period and of the profit or loss of their operations for that period. In preparing those financial statements, the directors are required to:
- | adopt the going concern basis unless it is inappropriate to presume that the Company will continue in business;
- | select suitable accounting policies and then apply them consistently;
- | make judgements and estimates that are reasonable and prudent;
- | account for income and charges relating to the accounting period on the accruals basis; and
- | value separately the components of asset and liability items.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company, and to enable them to ensure that the financial statements have been properly prepared in accordance with the Companies Act, Cap 386. This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. They are also responsible for safeguarding the assets of the Group, and for taking reasonable steps for the prevention and detection of fraud and other irregularities. Auditor Grant Thornton have intimated their willingness to continue in office. A resolution to reappoint Grant Thornton as auditor of the Company will be proposed at the forthcoming annual general meeting. Signed on behalf of the Board of Directors on 20 April 2023 by Mr. Charles Borg (Chairman and Director) and Mr. Dorian Desira (Director) as per the Directors' Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Financial Report. Registered address: Nineteen Twenty-Three Valletta Road Marsa MRS 3000 Malta 20 April 2023 # Statement of responsibility pursuant to the Capital Markets Rules issued by the Malta Financial Services Authority We confirm that to the best of our knowledge:
a. | In accordance with the Capital Markets Rule 5.68, the financial statements give a true and fair view of the financial position of the Company and its Group as at 31 December 2022 and of their financial performance and cash flows for the year then ended, in accordance with International Financial Reporting Standards as adopted by the EU; and
b. | In accordance with the Capital Markets Rules, the Directors’ report includes a fair review of the performance of the business and the 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 they face.
Signed on behalf of the Board of Directors on 20 April 2023 by Mr. Charles Borg (Chairman and Director) and Mr. Dorian Desira (Director). # Corporate governance – Statement of compliance Introduction Pursuant to the Capital Markets Rules as issued by the Malta Financial Services Authority, 1923 Investments p.l.c. (the ‘company’) is hereby reporting on the extent of its adoption of the Code of Principles of Good Corporate Governance (the ‘Principles’) contained in Appendix 5.1 of the Capital Markets Rules. The Board acknowledges that the Code does not dictate or prescribe mandatory rules but recommends principles of good practice. Nonetheless, the Board strongly believes that the Principles are in the best interest of the shareholders and other stakeholders since they ensure that the Directors, Management and employees of the Group adhere to internationally recognised high standards of Corporate Governance. The Group currently has a corporate decision-making and supervisory structure that is tailored to suit the Group’s requirements and designed to ensure the existence of adequate checks and balances within the Group, whilst retaining an element of flexibility, particularly in view of the size of the Group and the nature of its business. The Group adheres to the Principles, except for those instances where there exist particular circumstances that warrant non-adherence thereto, or at least postponement for the time being. Additionally, the Board recognises that, by virtue of Capital Markets Rule 5.101, the Company is exempt from making available the information required in terms of Capital Markets Rules 5.97.1 to 5.97.3; 5.97.6 and 5.97.8. The Board of Directors The Board of Directors of the Company is responsible for the overall long-term direction of the Group, in particular in being actively involved in overseeing the systems of control and financial reporting and that the Group communicates effectively with the market. The Board of Directors meets regularly, with a minimum of four times annually, and is currently composed of six Members, three of which are completely independent from the Company or any other related companies. For the purpose of the Capital Markets rules, Mr Charles Borg, Dr Ann Fenech and Mr Karl Fritz are independent non-executive directors of the Company. Furthermore, Dr Annabel Hili was appointed Director on 20 September 2022. Non-Executive Directors Mr Carmelo sive Melo Hili Mr Dorian Desira Dr Annabel Hili (appointed on 20 September 2022) Independent Non-Executive Directors Mr Charles Borg (Chairman) Dr Ann Fenech Mr Karl Fritz The Board Meetings are attended by the Chief Executive Officer of the group in order for the Board to understand the operations of the group. The Chief Executive Officer is joined by the Chief Financial Officer of the Group in order for the Board to have direct access to the financial operation of the Group. This is intended to, inter alia, ensure that the policies and strategies adopted by the Board are effectively implemented. The remuneration of the board is reviewed periodically by the shareholders of the Company. The Company ensures that it provides directors with relevant information to enable them to effectively contribute to board decisions. The directors are fully aware of their duties and obligations, and whenever a conflict of interest in decision making arises, they refrain from participating in such decisions. Audit Committee The Terms of Reference of the Audit Committee are modelled on the principles set out in the Capital Markets Rules. The Audit Committee assists the Board in fulfilling its supervisory and monitoring responsibility by reviewing the Group financial statements and disclosures, monitoring the system of internal control established by management as well as the audit processes. The Board of Directors established the Audit Committee, which meets regularly, with a minimum of four times annually, and is currently composed of the following individuals: Mr Karl Fritz (Chairman) Dr Ann Fenech Mr Dorian Desira To satisfy the requirement established by the Capital Markets Rules, the Audit Committee is composed of non-executive directors, the majority of which being independent. Mr Dorian Desira is a non-executive director and holds the position of Chief Financial Officer of the parent company. The Board considers Mr Karl Fritz to be competent in accounting and/or auditing in terms of the Capital Markets Rules. Furthermore, the Board considers that the Audit Committee, as a whole, to have relevant competence in the sector the Company is operating. The Audit Committee met four times during 2021 and seven times during 2022. Communication with and between the Secretary, top level management and the Committee is ongoing and considerations that required the Committee’s attention were acted upon between meetings and decided by the Members (where necessary) through electronic circulation and correspondence. Internal Control While the Board is ultimately responsible for the Group’s internal controls as well as their effectiveness, authority to operate the Group is delegated to the Chief Executive Officer. The Group’s system of internal controls is designed to manage all the risks in the most appropriate manner. However, such controls cannot provide an absolute elimination of all business risks or losses. Therefore, the Board, inter alia, reviews the effectiveness of the Group’s system of internal controls in the following manner:
1. | Reviewing the Group’s strategy on an on-going basis as well as setting the appropriate business objectives in order to enhance value for all stakeholders;
2. | Implementing an appropriate organisational structure for planning, executing, controlling and monitoring business operations in order to achieve Group objectives;
3. | Appointing and monitoring the Chief Executive Officer whose function is to manage the operations of the Group;
4. | Identifying and ensuring that significant risks are managed satisfactorily; and
5. | Company policies are being observed.
Corporate Social Responsibility The Board is mindful of and seeks to adhere to sound principles of Corporate Social Responsibility in their daily management practices, which is also extended throughout the Company’s subsidiary companies. There is continuing commitment to operate the business ethically at all times, at the same time as contributing to economic development whilst improving the quality of life of its employees and their families together with the local community and society at large. In carrying on its business, the Group is fully aware of its obligation to preserving the environment and has, in fact, put in place a number of policies aimed at respecting the environment and reducing waste. Relations with the market The market is kept up to date with all relevant information, and the Company regularly publishes such information on its website to ensure consistent relations with the market. Non-compliance with the code Principle 7: Evaluation of the board’s performance Under the present circumstances, the Board does not consider it necessary to appoint a committee to carry out a performance evaluation of its role as the Board’s performance is always under scrutiny of the shareholders of the Company. Principle 8: Committees Under the present circumstances the Board does not consider it necessary to appoint a remuneration committee and a nomination committee as decisions on these matters are taken at shareholder level. Principle 10: Institutional shareholders This principle is not applicable since the Company has no institutional shareholders. Signed on behalf of the Board of Directors on 20 April 2023 by Mr. Charles Borg (Chairman and Director) and Mr. Dorian Desira (Director). # Other disclosures in terms of Capital Markets Rules Statement by the directors pursuant to Capital Markets Rule 5.70.1 Contracts of significance Loan agreements with subsidiaries and related parties The Company has loans payable and receivable to/from subsidiaries and related parties, which are disclosed in the financial statements. Rental agreements with related parties The subsidiaries of 1923 Investments p.l.c. have entered into rental agreements with a related party. The agreed rates have been set on an arms’ length basis. Pursuant to Capital Markets Rule 5.70.2 Company secretary and registered office Adrian Mercieca (appointed on 1 July 2022) Nineteen Twenty-Three Valletta Road Marsa MRS 3000 Malta Signed on behalf of the Board of Directors on 20 April 2023 by Mr. Charles Borg (Chairman and Director) and Mr. Dorian Desira (Director).

# Statements of profit or loss and other comprehensive income
| Notes | The group | The group | The company | The company
|  | 2022 | 2021 | 2022 | 2021
|  | € | € | € | €
Revenue | 6 | 232,714,394 | 172,154,948 | 1,110,000 | 1,010,000
Cost of sales |  | (200,457,517) | (144,995,947) | - | -
Gross profit |  | 32,256,877 | 27,159,001 | 1,110,000 | 1,010,000
Other operating income | 7 | 91,158 | 94,471 | - | -
Administrative expenses |  | (20,286,959) | (16,770,188) | (2,206,601) | (1,830,422)
Operating profit (loss) |  | 12,061,076 | 10,483,284 | (1,096,601) | (820,422)
Investment income | 8 | 66,091 | 73,141 | 6,368,299 | 5,427,126
Finance costs | 9 | (3,911,870) | (3,585,314) | (2,541,914) | (2,891,994)
Other income |  | 85,599 | 430 | - | -
Gain on termination of leases |  | - | 521,088 | - | -
Share of profit in associates | 21 | 801,711 | 684,324 | - | -
Share of results in joint ventures | 21 | 328,017 | 139,558 | - | -
Profit before tax | 10 | 9,430,624 | 8,316,511 | 2,729,784 | 1,714,710
Tax (expense) credit | 13 | (2,184,610) | (2,478,071) | (210,206) | 4,677
Profit for the year |  | 7,246,014 | 5,838,440 | 2,519,578 | 1,719,387
Other comprehensive income |  |  |  |  |
Items that may be reclassified subsequently to profit or loss |  |  |  |  |
Exchange differences on translating foreign operations |  | 666,338 | 1,641,334 | - | -
Total comprehensive income |  | 7,912,352 | 7,479,774 | 2,519,578 | 1,719,387
Profit attributable to: |  |  |  |  |
Owners of the company |  | 6,749,036 | 4,840,636 | 2,519,578 | 1,719,387
Non-controlling interest |  | 496,978 | 997,804 | - | -
|  | 7,246,014 | 5,838,440 | 2,519,578 | 1,719,387
Total comprehensive income attributable to: |  |  |  |  |
Owners of the company |  | 7,415,374 | 6,481,970 | 2,519,578 | 1,719,387
Non-controlling interest |  | 496,978 | 997,804 | - | -
|  | 7,912,352 | 7,479,774 | 2,519,578 | 1,719,387

# Statements of financial position
| Notes | The group | The group | The company | The company
|  | 2022 | 2021 | 2022 | 2021
|  | € | € | € | €
Assets |  |  |  |  |
Non-current |  |  |  |  |
Goodwill | 15 | 63,283,683 | 62,888,958 | - | -
Intangible assets | 16 | 12,077,990 | 12,062,520 | 10,082 | -
Plant and equipment | 17 | 13,663,641 | 11,370,166 | 12,329 | 3,721
Right-of-use assets | 18 | 11,020,282 | 11,499,407 | - | -
Investment in subsidiaries | 20 | - | - | 68,041,520 | 66,832,577
Investment in associates | 21 | 830,726 | 715,015 | - | -
Investment in joint ventures | 21 | 1,381,659 | 1,053,642 | 682,375 | 682,375
Other investment | 22 | 1,149,977 | 1,149,977 | - | -
Loans and receivables | 23 | 9,418,878 | 1,744,946 | 26,750,380 | 23,828,586
Deferred tax assets | 36 | 1,945,153 | 1,560,180 | 285,806 | 305,939
|  | 114,771,989 | 104,044,811 | 95,782,492 | 91,653,198
Current |  |  |  |  |
Inventories | 24 | 19,061,454 | 11,094,070 | - | -
Loans and receivables | 23 | 5,294 | 3,027,735 | 5,051,486 | 9,801,147
Contract assets | 6 | 483,471 | 662,843 | - | -
Other assets | 25 | 2,670,065 | 2,288,380 | 179,840 | 160,779
Trade and other receivables | 26 | 13,965,459 | 17,097,854 | 95,750 | 86,609
Cash and cash equivalents | 27 | 10,312,277 | 9,666,172 | 727,660 | 1,297,371
Current tax assets |  | 2,368,401 | 1,805,232 | 1,353,991 | 1,056,908
|  | 48,866,421 | 45,642,286 | 7,408,727 | 12,402,814
Total assets |  | 163,638,410 | 149,687,097 | 103,191,219 | 104,056,012
Equity |  |  |  |  |
Share capital | 28 | 52,135,000 | 52,135,000 | 52,135,000 | 52,135,000
Other equity | 29 | (4,741,736) | (4,741,736) | 154,629 | 154,629
Retained earnings |  | 10,520,184 | 4,556,155 | 882,921 | -851,650
Translation reserve | 30 | (3,415,893) | (4,082,231) | - | -
Attributable to equity holders of the parent |  | 54,497,555 | 47,867,188 | 53,172,550 | 51,437,979
Non-controlling interest |  | 5,039,034 | 4,964,072 | - | -
Total equity |  | 59,536,589 | 52,831,260 | 53,172,550 | 51,437,979
Liabilities |  |  |  |  |
Non-current |  |  |  |  |
Debt securities in issue | 31 | 35,839,176 | 35,758,272 | 35,839,176 | 35,758,272
Borrowings | 32 | 6,319,288 | 6,748,228 | 5,227,616 | 6,748,228
Lease liabilities | 19 | 7,913,227 | 8,882,191 | - | -
Trade and other payables | 33 | 730,282 | 239,197 | - | -
Other financial liabilities | 35 | 4,114,275 | 211,779 | 4,863,789 | 2,282,655
Deferred tax liabilities | 36 | 1,236,674 | 1,263,011 | - | -
|  | 56,152,922 | 53,102,678 | 45,930,581 | 44,789,155
Current |  |  |  |  |
Borrowings | 32 | 6,980,055 | 1,476,571 | 1,524,683 | 1,476,571
Lease liabilities | 19 | 3,651,700 | 3,034,583 | - | -
Trade and other payables | 33 | 32,836,912 | 30,572,267 | 1,017,035 | 701,377
Contract liabilities | 34 | 3,716,777 | 4,110,716 | - | -
Other financial liabilities | 35 | - | 3,572,545 | 1,546,370 | 5,650,930
Current tax liability |  | 763,455 | 986,477 | - | -
|  | 47,948,899 | 43,753,159 | 4,088,088 | 7,828,878
Total liabilities |  | 104,101,821 | 96,855,837 | 50,018,669 | 52,618,033
Total equity and liabilities |  | 163,638,410 | 149,687,097 | 103,191,219 | 104,056,012

The financial statements were approved and authorised for issue by the Board of Directors on 20 April 2023. The financial statements were signed on behalf of the Board of Directors by Mr. Charles Borg (Chairman and Director ) and Mr. Dorian Desira (Director) as per the Directors' Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Financial Report.

# Statement of changes in equity – the group
| Share capital | Other equity | Retained earnings | Translation reserve | Attributable to equity holders of the parent | Non-controlling interest | Total equity
| € | € | € | € | € | € | €
At 1 January 2021 | 49,575,000 | (2,181,736) | (568,366) | (5,723,565) | 41,101,333 | 4,472,723 | 45,574,056
Transactions with owners: |  |  |  |  |  |  |
Dividend paid to minority interest | - | - | - | - | - | (506,455) | (506,455)
| - | - | - | - | - | (506,455) | (506,455)
Profit for the year | - | - | 4,840,636 | - | 4,840,636 | 997,804 | 5,838,440
Other comprehensive income for the year | - | - | - | 1,641,334 | 1,641,334 | - | 1,641,334
Total comprehensive income | - | - | 4,840,636 | 1,641,334 | 6,481,970 | 997,804 | 7,479,774
Other Movements | - | - | 283,885 | - | 283,885 | - | 283,885
Capitalisation of loan from parent | 2,560,000 | (2,560,000) | - | - | - | - | -
At 31 December 2021 | 52,135,000 | (4,741,736) | 4,556,155 | (4,082,231) | 47,867,188 | 4,964,072 | 52,831,260
At 1 January 2022 | 52,135,000 | (4,741,736) | 4,556,155 | (4,082,231) | 47,867,188 | 4,964,072 | 52,831,260
Transactions with owners: |  |  |  |  |  |  |
Dividend paid | - | - | (785,007) | - | (785,007) | (422,016) | (1,207,023)
| - | - | (785,007) | - | (785,007) | (422,016) | (1,207,023)
Profit for the year | - | - | 6,749,036 | - | 6,749,036 | 496,978 | 7,246,014
Other comprehensive income for the year | - | - | - | 666,338 | 666,338 | - | 666,338
Total comprehensive income | - | - | 6,749,036 | 666,338 | 7,415,374 | 496,978 | 7,912,352
At 31 December 2022 | 52,135,000 | (4,741,736) | 10,520,184 | (3,415,893) | 54,497,555 | 5,039,034 | 59,536,589

Retained earnings include current and prior period results as disclosed in the statements of profit or loss and other comprehensive income.
Retaind earnings include an amount of € 1,945,153 (2021: € 1,560,180) relating to deferred tax assets which are undistributable in terms of the Companies Act, Cap 386.

# Statement of changes in equity – the company

| Share capital | Other equity | Retained earnings (accumulated losses) | Total
| € | € | € | €
At 1 January 2021 | 49,575,000 | 2,714,629 | (2,571,037) | 49,718,592
Profit for the year | - | - | 1,719,387 | 1,719,387
Total comprehensive Income | - | - | 1,719,387 | 1,719,387
Capitalisation of loan from parent | 2,560,000 | (2,560,000) | - | -
At 31 December 2021 | 52,135,000 | 154,629 | (851,650) | 51,437,979
At 1 January 2022 | 52,135,000 | 154,629 | (851,650) | 51,437,979
Profit for the year | - | - | 2,519,578 | 2,519,578
Total comprehensive Income | - | - | 2,519,578 | 2,519,578
Dividend | - | - | (785,007) | (785,007)
At 31 December 2022 | 52,135,000 | 154,629 | 882,921 | 53,172,550

Retained earnings include current and prior period results as disclosed in the statements of profit or loss and other comprehensive income.

# Statements of cash flows
| Notes | The group | The group | The company | The company
|  | 2022 | 2021 | 2022 | 2021
|  | € | € | € | €
Operating activities |  |  |  |  |
Profit before tax |  | 9,430,624 | 8,316,511 | 2,729,784 | 1,714,710
Adjustments | 37 | 9,039,366 | 8,291,752 | (3,821,788) | (2,532,385)
Net changes in working capital | 37 | (10,382,831) | 5,302,210 | 311,106 | (251,052)
Interest paid |  | (2,919,367) | (3,110,700) | (2,297,670) | (2,373,871)
Tax paid |  | (3,830,196) | (3,482,218) | - | -
Tax refunded |  | 448,085 | 509,681 | 448,085 | 509,680
Net cash generated from (used in) operating activities |  | 1,785,681 | 15,827,236 | (2,630,483) | (2,932,918)
Investing activities |  |  |  |  |
Payments to acquire plant and equipment | 17 | (4,738,734) | (3,603,029) | (12,769) | (2,508)
Payments to acquire intangible assets | 16 | (757,855) | (772,951) | (10,520) | -
Proceeds from disposal of plant and equipment |  | 113,542 | 66,232 | - | -
Interest received |  | - | - | 178,360 | 98,169
Investment in subsidiary undertakings |  | - | (1,099,977) | (1,208,943) | -
Net advances (to)/from subsidiaries |  | - | - | (2,000,000) | 2,953,308
Repayment to joint venture |  | - | - | - | (155,717)
Repayment from/(advances to) parent company |  | 3,000,000 | (3,000,000) | 3,000,000 | (3,000,000)
Repayment to parent company |  | - | - | - | (24,172)
Payments from (to) related companies |  | - | - | - | 113,178
Dividends received from subsidiaries |  | - | - | 4,142,225 | 3,212,615
Dividends received from associates |  | 686,000 | 465,500 | - | -
Dividend received from joint ventures |  | - | 51,747 | - | -
Net cash (used in) generated from investing activities |  | (1,697,047) | (7,892,478) | 4,088,353 | 3,194,873
Financing activities |  |  |  |  |
Dividends paid |  | (1,207,023) | (506,455) | (785,007) | -
Repayment of loan to related parties |  | (3,500,000) | (7,500,000) | (3,500,000) | (7,500,000)
Advances from parent company |  | 4,000,000 | - | 4,000,000 | -
Loans/advances by subsidiary |  | - | - | 2,429,926 | 2,000,000
Advances to subsidiary |  | - | - | (2,700,000) | -
Proceeds from bank loans and other facilities | 32 | 1,845,950 | 6,430,000 | - | 6,430,000
Repayments of bank loans |  | (1,472,500) | (603,771) | (1,472,500) | (311,574)
Payments for lease obligations to third parties |  | (3,100,863) | (2,181,147) | - | -
Payments for lease obligations to related companies |  | (258,715) | (247,071) |  |
Interest paid on leasing arrangements with third parties |  | (426,661) | (271,670) |  |
Interest paid on leasing arrangements related company |  | (23,811) | (49,495) |  |
Net cash (used in) generated from financing activities |  | (4,143,623) | (4,929,609) | (2,027,581) | 618,426
Net change in cash and cash equivalents |  | (4,054,989) | 3,005,149 | (569,711) | 880,381
Cash and cash equivalents, beginning of year |  | 9,666,172 | 6,661,023 | 1,297,371 | 416,990
Cash and cash equivalents, end of year | 27 | 5,611,183 | 9,666,172 | 727,660 | 1,297,371

# Notes to the financial statements
1 Nature of operations
The principal activities of the group are the sale and distribution of Apple Products as an Apple Premium Reseller, as well as the sale, maintenance and servicing of information technology solutions, security systems and provides electronic payment solutions. As from 1 January 2018, the group was also engaged in providing road, sea and air logistics services in Malta and in Poland. On 30 April 2020, the company purchased a Ship to Ship business from Teekay Tankers Limited to strengthen its presence in the logistics sector. In June 2022, E-Lifecycle Holdings GmbH was incorporated in Germany to operate under the iRiparo and Uzed brands, offering high quality mobile device repair and the sale of refurbished phones and of accessories. With this latest addition, the Group continues to adhere to the principles of the circular economy – the circulation of products and materials, the elimination of waste and the regeneration of materials. The company acts as an investment company and service provider to its subsidiary undertakings.

2 General information, statement of compliance with IFRS and going concern assumption
The company was incorporated on 23 December 2013 as a holding company. The registered address and principal place of business of the company is Nineteen Twenty-Three, Valletta Road, Marsa MRS 3000, Malta.
The company is a public company whose bonds are publicly listed and traded on the Malta Stock Exchange.
The financial statements of the company and the consolidated financial statements of the group have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and as adopted by the European Union (EU), and in accordance with the Companies Act, Cap 386.
The financial statements are presented in euro (€), which is also the functional currency of the company and the group.

3 New or revised Standards or Interpretations
3.1 | New standards adopted as at 1 January 2022
Some accounting pronouncements which have become effective from 1 January 2022 and have therefore been adopted do not have a significant impact on the company’s financial results or position. Accordingly, the company has made no changes to its accounting policies in 2022.
Other Standards and amendments that are effective for the first time in 2022 and could be applicable to the company are: • Reference to the Conceptual Framework (Amendments to IFRS 3) • COVID-19 – Related Rent Concessions beyond 30 June 2021 (Amendments to IFRS 16) • Property, Plant and Equipment: Proceeds Before Intended Use (Amendments to IAS 16) • Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37) • Annual Improvements (2018-2020 Cycle): – Fees in the ‘10 per cent’ Test for Derecognition of Liabilities (Amendments to IFRS 9) – Lease Incentives (Amendments to IFRS 16) These amendments are not applicable to the entity or do not have a significant impact on these financial statements and therefore no additional disclosures have been made.
Some accounting pronouncements which have become effective from 1 January 2022 and have therefore been adopted do not have a significant impact on the company’s financial results or position. Accordingly, the company has made no changes to its accounting policies in 2022.
3.2 | Standards, amendments and Interpretations to existing Standards that are not yet effective and have not been adopted early by the group
At the date of authorisation of these financial statements, several new, but not yet effective, Standards and amendments to existing Standards, and Interpretations have been published by the IASB. None of these Standards or amendments to existing Standards have been adopted early by the company.
Other Standards and amendments that are not yet effective and have not been adopted early by the company include: • Classification of Liabilities as Current or Non-current (Amendments to IAS 1) • Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) • Deferred Tax related to Assets and Liabilities from a Single Transaction • Disclosure of Accounting Policies (Amendments to IAS 1) • Definition of Accounting Estimates (Amendments to IAS 8) These amendments are not expected to have a significant impact on the financial statements in the period of initial application and therefore no disclosures have been made.

4 Summary of accounting policies
4.1 Overall considerations
The consolidated financial statements have been prepared using the significant accounting policies and measurement bases summarised below.

The consolidated financial statements have been prepared from the financial statements of the companies comprising the group as detailed in notes to the consolidated financial statements.

4.2 Presentation of financial statements
The consolidated financial statements are presented in accordance with IAS 1 Presentation of Financial Statements (IAS 1).
4.3 Basis of consolidation
The group financial statements consolidate those of the parent company and all of its subsidiaries as of 31 December 2022. The parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. The subsidiaries have a reporting date of 31 December .
All transactions and balances between group companies are eliminated on consolidation, including unrealised gains and losses on transactions between group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment losses from the group perspective. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.
4.4 Business combinations
The group applies the acquisition method in accounting for business combinations. The consideration transferred by the group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.
The group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree’s financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.

4.5 Investment in subsidiaries
Investment in subsidiaries is included in the company’s statement of financial position at cost less any impairment loss that may have arisen. Income from investment is recognised only to the extent of distributions received by the company from post-acquisition profits. Distributions received in excess of such profits are regarded as a recovery of the investment and are recognised as a reduction of the cost of the investment.
At the end of each reporting period, the company reviews the carrying amount of its investment in subsidiaries to determine whether there is any indication of impairment and, if any such indication exists, the recoverable amount of the investment is estimated. An impairment loss is the amount by which the carrying amount of an investment exceeds its recoverable amount. The recoverable amount is the higher of fair value less costs to sell and value in use. An impairment loss that has been previously recognised is reversed if the carrying amount of the investment exceeds its recoverable amount. An impairment loss is reversed only to the extent that the carrying amount of the investment does not exceed the carrying amount that would have been determined if no impairment loss had been previously recognised. Impairment losses and reversals are recognised immediately in profit or loss.
4.6 Investment in associates and joint ventures
An associate is an entity over which the company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
A joint arrangement is an arrangement of which two or more parties have joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.
The results and assets and liabilities of associates/joint ventures are incorporated in these consolidated financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, investments in associates/joint ventures are initially recognised at cost and adjusted thereafter for the post-acquisition change in the group’s share of net assets of the associates/joint ventures, less any impairment in the value of individual investments.
When the group’s share of losses of an associate/joint venture exceeds the group’s interest in that associate/joint venture (which includes any long-term interests that, in substance, form part of the group’s net investment in the associate/joint venture), the group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.
Any excess of the cost of acquisition over the group’s share of the net fair value of the identifiable assets and liabilities of an associate/joint venture recognised at the date of acquisition is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the group’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognised immediately in profit or loss.

4.7 Acquisition of entities and businesses under common control
The acquisition of subsidiaries under common control is accounted for under the principles of predecessor accounting as from the date these subsidiaries are acquired by the holding company’s parent at their previous carrying amounts of assets and liabilities included in the consolidated financial statements of the company’s parent. Differences on acquisition between the consideration given in exchange for the acquired entities and the amounts at which the assets and liabilities of the acquired are initially recognised are included within equity.
4.8 Acquisition of subsidiaries
The acquisition of subsidiaries that are not under common control is accounted for by applying the acquisition method. The consideration is measured as the aggregate of the fair values, at the date of exchange of assets given, liabilities incurred or assumed, and equity instruments issued by the acquirer in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred, except for costs to issue debt or equity securities.
The acquiree’s identifiable assets and liabilities that meet the conditions for recognition are recognised at their fair values at the acquisition date, except as specifically required by other IFRS as adopted by the EU. A contingent liability assumed in a business combination is recognised at the acquisition date if there is a present obligation that arises from past events and its fair value can be measured reliably.
The results of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Where necessary, in preparing these consolidated financial statements, appropriate adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by group entities. Intra-group balances, transactions, income and expenses are eliminated on consolidation.
4.9 Goodwill
Goodwill arising in a business combination that is accounted for using the acquisition method is recognised as an asset at the date that control is acquired. Goodwill is measured as the excess of (a) the aggregate of: (i) the consideration transferred; (ii) the amount of any non-controlling interests in the acquiree; and (iii) in a business combination achieved in stages, the acquisition-date fair value of the acquirer’s previously held equity interest in the acquiree; and (b) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.
The goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Any gain on a bargain purchase, after reassessment, is recognised immediately in profit or loss.
4.10 Non-controlling interest
Non-controlling interests in the acquiree that are present ownership interests and entitle their shareholders to a proportionate share of the entity’s net assets in the event of liquidation, may be initially measured either at the present ownership interests proportionate share in the recognised amounts of the acquiree’s identifiable net assets or at fair value. The choice of measurement basis is made on an acquisition-by-acquisition basis. After initial recognition, non-controlling interests in the net assets consist of the amount of those interests at the date of the original business combination and the non-controlling interests’ share of changes in equity since the date of the combination. Non-controlling interests in the net assets of consolidated subsidiaries are presented separately from the holding company’s owners’ equity therein. Non-controlling interests in the profit or loss and other comprehensive income of consolidated subsidiaries are also disclosed separately. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

4.11 Revenue recognition
Revenue for the group arises mainly from the sale and distribution of Apple Products as an Apple Premium Reseller, as well as from the sale, maintenance and servicing of information technology solutions, security systems and providing electronic payment solutions. The group is also engaged in providing road, sea and air logistics services in Malta and in Poland. The group is also engaged in selling and repairing used electronic devices and accessories in Germany.
To determine whether to recognise revenue, the group follows a 5-step process: 1. Identifying the contract with a customer 2. Identifying the performance obligations 3. Determining the transaction price 4. Allocating the transaction price to the performance obligations 5. Recognising revenue when/as performance obligation(s) are satisfied.
The group often enters into transactions involving a range products and services, as described above. In all cases, the total transaction price for a contract is allocated amongst the various performance obligations based on their relative stand-alone selling prices. The transaction price for a contract excludes any amounts collected on behalf of third parties.
Revenue is recognised either at a point in time or over time, when (or as) the group satisfies performance obligations by transferring the promised goods or services to its customers.
The group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as contract liabilities in the statement of financial position (see note 34). Similarly, if the group satisfies a performance obligation before it receives the consideration, the group recognises either a contract asset or a receivable in its statement of financial position, depending on whether something other than the passage of time is required before the consideration is due.
Sale and distribution of Apple products
Revenue from the sale of Apple products for a fixed fee is recognised when or as the group transfers control of the assets to the customer. Amounts receivable for products transferred are due upon receipt by the customer, which is usually immediately upon the sale of the product to the customer. Control for these products is transferred at the point in time and occurs when the customer takes undisputed delivery of the goods.
The group provides a basic one year product warranty on its Apple products sold to customers. Under the terms of this warranty, customers can return the product for repair or replacement if it fails to perform in accordance with published specifications. The standard warranty does not provide a service which enhances, or is in any way or manner an addition to the standard assurance to the product performance. These warranties are accounted for under IAS 37. Repairs and Maintenance of used electronic devices Revenue from the repair of any type of smartphone and tablet is recognised when our technicians provide such service to the customer, which is usually provided within 24 hours. Sale and repair of Uzed electronic devices Revenue from the sale of used electronic products within our Uzed brand for a fixed fee is recognised when or as the group transfers control of the assets to the customer. Amounts receivable for products transferred are due upon receipt by the customer, which is usually immediately upon the sale of the product to the customer. Control for these products is transferred at the point in time and occurs when the customer takes undisputed delivery of the goods.
Sale of information technology solutions, security systems and other machinery
Revenue from the sale of information technology solutions, security systems and other machinery for a fixed fee is recognised when or as the group transfers control of the assets to the customer. Invoices for products and services transferred are due upon receipt by the customer, which is usually upon the sale of the product to the customer and installation of the items or products sold. Control for these products is usually transferred at the point in time and occurs when the customer takes undisputed delivery of the goods.

When such items are either customised or sold together with significant integration services, the goods and services represent a single combined performance obligation over which control is considered to transfer over time. This is because the combined product is unique to each customer (has no alternative use) and the group has an enforceable right to payment for the work completed to date. Revenue for these performance obligations is recognised over time as the customisation or integration work is performed, using the cost-to-cost method to estimate progress towards completion. As costs are generally incurred uniformly as the work progresses and are considered to be proportionate to the entity’s performance, the cost-to-cost method provides a faithful depiction of the transfer of goods and services to the customer.
Each major contract is nevertheless evaluated for revenue recognition on its own and the group determines when control is effectively transferred depending on the specific circumstances.
For sales of software that are neither customised by the group nor subject to significant integration services, the licence period commences upon delivery. For sales of software subject to significant customisation or integration services, the licence period begins upon commencement of the related services.
Maintenance and servicing
The group enters into fixed price maintenance contracts with its customers for terms between one and three years in length. Customers are required to pay either quarterly or yearly in advance for each respective service period and the relevant payment due dates are specified in each contract.
The group enters into agreements with its customers to perform regularly scheduled maintenance services on the various goods purchased from the group. Revenue is recognised over time based on the ratio between the number of hours of maintenance services provided in the current period and the total number of such hours expected to be provided under each contract. This method best depicts the transfer of services to the customer because: (a) details of the services to be provided are specified as part of the agreed maintenance program relative to the maintenance requirements of the items sold, and (b) the group has a long history of providing these services to its customers, allowing it to make reliable estimates of the total number of hours involved in providing the service.
Consulting and development of IT systems
The group enters into contracts for the design, development and installation of IT systems in exchange for a fixed fee and recognises the related revenue over time. Due to the high degree of interdependence between the various elements of these projects, they are accounted for as a single performance obligation. When a contract also includes promises to perform after-sales services, the total transaction price is allocated to each of the distinct performance obligations identifiable under the contract on the basis of its relative stand-alone selling price.
To depict the progress by which the group transfers control of the systems to the customer, and to establish when and to what extent revenue can be recognised, the group measures its progress towards complete satisfaction of the performance obligation by comparing actual hours spent to date with the total estimated hours required to design, develop, and install each system. The hours-to-hours basis provides the most faithful depiction of the transfer of goods and services to each customer due to the group’s ability to make reliable estimates of the total number of hours required to perform, arising from its significant historical experience constructing similar systems.
Most such arrangements include detailed customer payment schedules. When payments received from customers exceed revenue recognised to date on a particular contract, any excess (a contract liability) is reported in the statement of financial position (see note 34).

The construction of IT systems normally takes 10 – 12 months from commencement of design through to completion of installation. As the period of time between customer payment and performance will always be one year or less, the group applies the practical expedient in IFRS 15.63 and does not adjust the promised amount of consideration for the effects of financing.
In obtaining these contracts, the group incurs some incremental costs. As the amortisation period of these costs, if capitalised, would be less than one year, the group makes use of the practical expedient in IFRS 15.94 and expenses them as they incur. Such incremental costs are not considered to be material.
Payment gateway
The group enters into transactions with parties for the access to a payment gateway. The group’s revenue is mainly derived from the actual volume of traffic on the payment gateway and on other fixed charges. The price is agreed and established with the customer in written contracts and is allocated to the performance obligation accordingly. Prices are based on established amounts for such services. The transaction price for a contract excludes any amounts collected on behalf of third parties.
Road, sea and air logistics services
Revenue from the provision of road, sea and air logistics services for an agreed price is recognised when or as the group completes delivery to the customer. Invoices for services rendered are due upon completion of the contracted service, which is usually immediately upon delivery to the customer. Control for these products is transferred at the point in time and occurs when the customer takes undisputed delivery of the goods on which the transportation service has been provided.
Ship-to-ship services
Revenue is recognised from the provision of support services for Ship-to-Ship (STS) cargo transfer operations, mainly oil and gas. In most instances, an STS operation takes between 24 and 48 hours to be completed, revenue is recognised upon completion of the operation.
Terminal management and consultancy services
Revenue arises from Liquefied Natural Gas (LNG) terminal management, emergency support services and consultancy. The performance obligations within these contracts typically consist of technical management and provision of consultancy. The performance obligations are satisfied concurrently, and consecutively rendered over the duration of the management contract over time. These are measured using the time elapsed from commencement of the contract. Consideration generally consists of fixed monthly management fees. Any costs incurred on behalf of the client are reimbursed. Management fees are invoiced monthly.
4.12 Interest and dividends
Interest income and expenses are reported on an accrual basis using the effective interest method. These are reported within ‘investment income’ and ‘finance costs’.
Dividends are recognised at the time the right to receive payment is established.
4.13 Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the service as incurred .

4.14 Borrowing costs
Borrowing costs include the costs incurred in obtaining external financing. Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised from the time that expenditure for these assets and borrowing costs are being incurred and activities that are necessary to prepare these assets for their intended use or sale are in progress. Borrowing costs are capitalised until such time as the assets are substantially ready for their intended use or sale. Borrowing costs are suspended during extended periods in which active development is interrupted. All other borrowing costs are recognised as an expense in profit or loss in the period in which they are incurred.
4.15 Employee benefits
The group contributes towards the state pension in accordance with local legislation. The only obligation of the group is to make the required contributions. Costs are expensed in the period in which they are incurred.
4.16 Foreign currency translation
Foreign currency transactions and balances
Foreign currency transactions are translated into the functional currency of the respective group entity using the exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such transactions and from the remeasurement of monetary items denominated in foreign currency at year-end exchange rates are recognised in the profit or loss.
Non-monetary items are not retranslated at the year-end and are measured at historical cost (translated using the exchange rates at the transaction date), except for non monetary items measured at fair value which are translated using the exchange rates at the date when fair value was determined.
In the group’s financial statements, all assets, liabilities and transactions of group entities with a functional currency other than the Euro are translated into Euro upon consolidation. The functional currency of the entities in the group has remained unchanged during the reporting period.
On consolidation, assets and liabilities have been translated into Euro at the closing rate at the reporting date. Income and expenses have been translated into Euro at the average rate over the reporting period. Exchange differences are charged or credited to other comprehensive income and recognised in the translation reserve in equity. On disposal of a foreign operation, the related cumulative translation differences recognised in equity are reclassified to profit or loss and are recognised as part of the gain or loss on disposal.

4.17 Intangible assets
An intangible asset is recognised if it is probable that the expected future economic benefits that are attributable to the asset will flow to the company and the cost of the asset can be measured reliably.
Intangible assets are initially measured at cost, being the fair value at the acquisition date for intangible assets acquired in a business combination. Expenditure on an intangible asset is recognised as an expense in the period when it is incurred unless it forms part of the cost of the asset that meets the recognition criteria or the item is acquired in a business combination and cannot be recognised as an intangible asset, in which case it forms part of goodwill at the acquisition date.
The useful life of intangible assets is assessed to determine whether it is finite or indefinite. Intangible assets with a finite useful life are amortised. Amortisation is charged to profit or loss so as to write off the cost of intangible assets less any estimated residual value, over their estimated useful lives. The amortisation method applied, the residual value and the useful life are reviewed, and adjusted if appropriate, at the end of each reporting period.
Intangible assets are derecognised on disposal or when no future economic benefits are expected from their use or disposal. Gains or losses arising from derecognition represent the difference between the net disposal proceeds, if any, and the carrying amount, and are included in profit or loss in the period of derecognition.
Patents and trademarks
Patents and trademarks are classified as intangible assets. After initial recognition, patents and trademarks are carried at cost less any accumulated amortisation and any accumulated impairment losses. Patents and trademarks are amortised on a straight-line basis over ten years.
Internally developed software and acquired licences
Expenditure on the research phase of projects to develop new customised software is recognised as an expense as incurred.
Costs that are directly attributable to a project’s development phase are recognised as intangible assets, provided they meet the following recognition requirements: • the development costs can be measured reliably • the project is technically and commercially feasible • the group intends to and has sufficient resources to complete the project • the group has the ability to use or sell the software • the software will generate probable future economic benefits.
Development costs not meeting these criteria for capitalisation are expensed as incurred.
Directly attributable costs include employee costs incurred on software development along with an appropriate portion of relevant overheads and borrowing costs.

All finite-lived intangible assets, including capitalised internally developed software, are accounted for using the cost model whereby capitalised costs are amortised on a straight-line basis over their estimated useful lives. Residual values and useful lives are reviewed at each reporting date. In addition, they are subject to impairment testing as described in note 4.21. The following useful lives are applied:

| Years |
Internally developed software and acquired licences | 3 – 10 |
Patents and trademarks | 7 – 10 |

| Any capitalised internally developed software that is not yet complete is not amortised but is subject to impairment testing as described in note 4.21.
| Amortisation is included within depreciation, amortisation and impairment of non-financial assets.
| Subsequent expenditures on the maintenance of computer software and brand names are expensed as incurred.
| 4.18 Plant and equipment
| The group’s plant and equipment are classified into the following classes – improvements to premises, equipment, motor vehicles and furniture, fixtures and fittings.
| Plant and equipment are initially measured at cost. Subsequent costs are included in the asset’s carrying amount when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. Expenditure on repairs and maintenance of plant and equipment is recognised as an expense when incurred.
| Plant and equipment are stated at cost less any accumulated depreciation and any accumulated impairment losses.
| Plant and equipment are derecognised on disposal or when no future economic benefits are expected from their use or disposal. Gains or losses arising from derecognition represent the difference between the net disposal proceeds, if any, and the carrying amount, and are included in profit or loss in the period of derecognition.
| Depreciation
Depreciation commences when the depreciable assets are available for use and is charged to profit or loss so as to write off the cost, less any estimated residual value, over its estimated useful lives, using the straight-line method, on the following bases:

| Years |
Improvements to premises | 2.5 – 5 |
Equipment | 10 – 33 |
Motor vehicles | 10 – 25 |
Furniture, fixtures and fittings | 10 – 25 |
The depreciation method applied, the residual value and the useful life are reviewed, and adjusted if appropriate, at the end of each reporting period.
4.19 Right-of-use assets
In the case of right-of-use assets, expected useful lives are determined by reference to comparable owned assets or the lease term, if shorter. Material residual value estimates and estimates of useful life are updated as required, but at least annually. For leases on buildings, the right-of-use assets are being amortised over the lease term.

4.20 Leases |
Measurement and recognition of leases
At lease commencement date, the group recognises a right-of-use asset and a lease liability on the statement of financial position. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received).
The group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The group also assesses the right-of-use asset for impairment when such indicators exist.
At the commencement date, the group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the group’s incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed) and payments arising from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero.
The group has elected to account for short-term leases using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term.
On the consolidated statement of financial position, the group has opted to disclose right-of-use assets and lease liabilities as separate financial statement line items.

4.21 Impairment testing of intangible assets and plant and equipment For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its recoverable amount. The recoverable amount is the greater of its fair value less costs to sell and its value in use. To determine the value in use, the group’s management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. Discount factors are determined individually for each cash-generating unit and reflect their respective risk profiles as assessed by the group’s management.

Impairment losses are recognised immediately in profit or loss. Impairment losses for cash-generating units are charged pro rata to the assets in the cash-generating unit. All assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. An impairment charge that has been recognised is reversed if the cash-generating unit’s recoverable amount exceeds its carrying amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
4.22 Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the group and the company become a party to the contractual provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with IFRS 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable).
Financial assets, other than those designated and effective as hedging instruments, are classified into the following categories: • amortised cost • fair value through profit or loss (FVTPL) • fair value through other comprehensive income (FVOCI).
In the periods presented, the group and the company do not have any financial assets categorised as FVTPL and FVOCI.
The classification is determined by both: • the entity’s business model for managing the financial asset • the contractual cash flow characteristics of the financial asset.
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs or investment income, except for impairment of trade receivables which is presented within administrative expenses.
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVTPL): • they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows • the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. The group’s cash and cash equivalents, loans and receivables, contract assets and trade and most other receivables fall into this category of financial instruments.
Financial assets at fair value through profit or loss (FVTPL)
Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to collect and sell’ are categorised at fair value through profit and loss. Further, irrespective of business model financial assets whose contractual cash flows are not solely payments of principal and interest are accounted for at FVTPL. All derivative financial instruments fall into this category, except for those designated and effective as hedging instruments, for which the hedge accounting requirements apply.
Assets in this category are measured at fair value with gains or losses recognised in profit or loss. The fair values of financial assets in this category are determined by reference to active market transactions or using a valuation technique where no active market exists.
As already indicated above, the group held no financial assets at fair value through profit or loss.
Financial assets at fair value through other comprehensive income (FVOCI)
Financial assets at FVOCI are classified accordingly if the assets meet the following conditions: • they are held under a business model whose objective it is “hold to collect” the associated cash flows and sell, and • the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Any gains or losses recognised in other comprehensive income will be recycled upon derecognition of the asset.
As already indicated above, the group held no financial assets at fair value through other comprehensive income.
Impairment of financial assets
IFRS 9’s impairment requirements use forward-looking information to recognise expected credit losses – the ‘expected credit loss (ECL) model’. Instruments within the scope of the new requirements included loans and other debt-type financial assets measured at amortised cost and FVOCI (the group had no debt-type financial assets at FVOCI), trade receivables, contract assets recognised and measured under IFRS 15 and loan commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit or loss (the group had no financial guarantee contracts).
The group considers a broad range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made between: • financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk (‘Stage 1’) and • financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date.
’12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised for the second category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life of the financial instrument.
Trade and other receivables and contract assets
The group makes use of a simplified approach in accounting for trade and other receivables as well as contract assets and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating, the group uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix.
The group assess impairment of trade receivables on a collective basis as they possess shared credit risk characteristics they have been grouped based on the days past due. Refer to note 41.2 for a detailed analysis of how the impairment requirements of IFRS 9 are applied.
Classification and measurement of financial liabilities
The group’s financial liabilities include debt securities in issue, borrowings, lease liabilities and trade and other payables and other financial liabilities.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the group designates a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss (other than derivative financial instruments that are designated and effective as hedging instruments). The group does not hold derivatives and financial liabilities designated at FVTPL.
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included within finance costs or investment income.
4.23 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is calculated using the weighted average method for the retail and IT solutions in Poland and the first in first out method for the technology division in Malta, and comprises expenditure incurred in acquiring the inventories and other costs incurred in bringing the inventories to their present location and condition. The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and an appropriate proportion of production overheads based on the normal level of activity. Net realisable value represents the estimated selling price in the ordinary course of business less the estimated costs of completion and the costs to be incurred in marketing, selling and distribution.
4.24 Income taxes
Current and deferred tax is recognised in profit or loss, except when it relates to items recognised in other comprehensive income or directly in equity, in which case the deferred tax is also dealt with in other comprehensive income or in equity, as appropriate.
Current tax is based on the taxable result for the period. The taxable result for the period differs from the result as reported in profit or loss because it excludes items which are non-assessable or disallowed and it further excludes items that are taxable or deductible in other periods. It is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets, including deferred tax assets for the carry forward of unused tax losses and unused tax credits, are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.
Deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill. Deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither accounting profit nor taxable profit.
Deferred tax liabilities are not recognised for taxable temporary differences arising on investments in subsidiaries/associates/interests in joint arrangements where the company is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are recognised for deductible temporary differences arising on investments in subsidiaries/associates/interests in joint arrangements where it is probable that taxable profit will be available against which the temporary difference can be utilised and it is probable that the temporary difference will reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be utilised.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted by the end of the reporting period.
Current tax assets and liabilities are offset when the group has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Deferred tax assets and liabilities are offset when the group entities have a legally enforceable right to set off its current tax assets and liabilities and the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
4.25 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits. Bank overdrafts that are repayable on demand and form an integral part of the group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows and are presented as borrowings in current liabilities in the statement of financial position.

4.26 Equity and reserves
Share capital represents the nominal value of shares that have been issued.
Retained earnings (accumulated losses) include all current and prior period results as disclosed in the consolidated statement of profit or loss and other comprehensive income less dividend distributions.
Translation reserve comprises foreign currency translation differences arising from the translation of financial statements of the group’s entities denominated in foreign currencies.
Dividend distributions payable to equity shareholders are included with short-term financial liabilities when the dividends are approved in general meeting prior to the end of the reporting period.
4.27 Provisions and contingent liabilities
Provisions for legal disputes, onerous contracts or other claims are recognised when the group and the company have a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic resources will be required from the group and the company and amounts can be estimated reliably. Timing or amount of the outflow may still be uncertain.
Restructuring provisions are recognised only if a detailed formal plan for the restructuring has been developed and implemented, or management has at least announced the plan’s main features to those affected by it. Provisions are not recognised for future operating losses.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Provisions are discounted to their present values, where the time value of money is material.
Any reimbursement that the group can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.
In those cases where the possible outflow of economic resources as a result of present obligations is considered improbable or remote, no liability is recognised.
4.28 Significant management judgement in applying accounting policies and estimation uncertainty
When preparing the financial statements management undertakes a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.
Significant management judgements
The following are the judgements made by management in applying the accounting policies of the group that have the most significant effect on the financial statements.
Recognition of service and contract revenues
As revenue from after-sales maintenance agreements and consulting and development of systems contracts is recognised over time, the amount of revenue recognised in a reporting period depends on the extent to which the performance obligation has been satisfied. For after-sales maintenance agreements this requires an estimate of the quantity of the services to be provided, based on historical experience with similar contracts. In a similar way, recognising revenue for consulting and development of systems contracts also requires significant judgment in determining the estimated number of hours required to complete the promised work when applying the hours-to-hours method described in note 4.11. Management however considers that any variance in estimates on ongoing contracts would be insignificant to the group.
Capitalisation of internally developed software
Distinguishing the research and development phases of a new customised software project and determining whether the recognition requirements for the capitalisation of development costs are met requires judgement. After capitalisation, management monitors whether the recognition requirements continue to be met and whether there are any indicators that capitalised costs may be impaired (see note 4.17).
Recognition of deferred tax assets
The extent to which deferred tax assets can be recognised 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-forwards can be utilised. In addition, significant judgement is required in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions (see note 4.24).
Estimation uncertainty
Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Actual results may be substantially different.
Impairment of intangible assets including goodwill and tangible assets
An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows (see note 4.21). In the process of measuring expected future cash flows management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary, and may cause significant adjustments to the group’s assets within the next financial year.
In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.
The group tests goodwill and intangible assets with an indefinite useful life annually for impairment or more frequently if there are indications that goodwill or intangibles might be impaired. Determining whether the carrying amounts of these assets can be realised requires an estimation of the recoverable amount of the cash generating units. The value in use calculation requires the directors to estimate the future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value.
Goodwill arising on a business combination is allocated, to the cash-generating units (“CGUs”) that are expected to benefit from that business combination.
Furthermore, following an in-depth review of the projections, management opted to include an execution risk premium (based on their professional judgement) to mitigate the current forecasting uncertainty and to obtain added comfort that the carrying value of the intangible assets is indeed recoverable.

At 31 December 2022, goodwill of the group was allocated as follows:
• | € 18,014,054 (2021: € 21,529,049) to the polish subsidiary iSpot Poland Sp. Z.o.o. which operates the Apple Premium Reseller Business.
• | € 3,860,898 (2021: € 3,860,898) to APCO Systems Limited which operates the electronic payment gateway.
• | € 2,168,112 (2021: € 2,168,112) to APCO Limited which operates in the business of selling and maintenance of IT solutions and security systems.
• | € 1,464,477 (2021: € 1,464,477) to PTL Limited which operates in the business of selling and maintenance of IT solutions and security systems.
• | € 37,776,143 (2021: € 33,866,423) to Hili Logistics group which operates in the business of providing road, sea and air logistics services.
For further analysis of the movement within goodwill, refer to note 15 of these financial statements. |
CGU – Retail and IT Solutions (Poland) |
The recoverable amount of the CGUs is determined from the value in use calculation. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. The directors estimate discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market. |
The assessment of recoverability of the carrying amount of goodwill and intangible assets with indefinite useful life includes:
• | forecasted cash flow projections for the next three years and projection of terminal value using the perpetuity method;
• | growth rates to perpetuity of 2.1%; and
• | use of 13.1% (pre-tax) (2021: 13.1%) to discount the projected cash flows to net present values
Based on the above assessment, the directors expect the carrying amount of goodwill and intangible assets with an indefinite useful life to be recoverable. |
CGU – Payment Processing Services
The recoverable amount of the CGUs is determined from the value in use calculation. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. The directors estimate discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.
The assessment of recoverability of the carrying amount of goodwill and intangible assets with indefinite useful life includes:
• | forecasted cash flow projections for the next three years and projection of terminal value using the perpetuity method;
• | growth rates to perpetuity of 2% (2021: 2%); and
• | use of 26.8% (pre-tax) (2021: 13.1 - 15.0%) to discount the projected cash flows to net present values
Based on the above assessment, the directors expect the carrying amount of goodwill and intangible assets with an indefinite useful life to be recoverable.
CGU – IT Solutions and Security Systems
The recoverable amount of the CGUs is determined from the value in use calculation. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. The directors estimate discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.
The assessment of recoverability of the carrying amount of goodwill and intangible assets with indefinite useful life includes:
• | forecasted cash flow projections for the next three years and projection of terminal value using the perpetuity method;
• | growth rates to perpetuity of 2% (2021: 2%); and
• | use of 18.6% – 20.5% (pre-tax) (2021: 14.4% - 19.3%) to discount the projected cash flows to net present values
Based on the above assessment, the directors expect the carrying amount of goodwill and intangible assets with an indefinite useful life to be recoverable.
CGU – Hili Logistics group
The directors of Hili Logistics group consider that the logistics business represents one single, consistent and homogenous operating segment. In defining this assumption for the purpose of testing goodwill for impairment, the directors consider that although the entity has essentially three operating interests, each component on its own is not representative of a separate component of the group’s operations. Moreover decisions about resource allocation are made for the logistics operations of Malta, Poland and the UK as a whole. Furthermore the directors consider that the acquired STS business is closely linked to the STS operations in Malta and taking advantage of a number of synergies which are being experienced around the following areas: Package offering where Carmelo Caruana Company Limited and STS Marine Solutions Ltd are in a better position to offer a single package to STS clients acting as one stop shop. This also brings a number of opportunities to cross-sell other services for vessel owners;
• | Carmelo Caruana Company Limited through its STS function and agency can work closely and share market intelligence with STS Marine Solutions Ltd leading to the introduction of new contacts thereby increasing market share;
• | Pricing and joint marketing can target a wider spectrum of clients; and
• | Sharing of market intelligence as well as resources will automatically bring along opportunities for cost savings and avoidance of being out-priced in a particular territory.
In view of the above, the directors consider the logistics business to be one cash-generating unit (CGU).
The recoverable amount of the CGUs is determined from the value in use calculation. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. The directors estimate discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.
The assessment of recoverability of the carrying amount of goodwill and the investments held by the company includes:
• | forecasted cash flow projections for the next three years and projection of terminal value using the perpetuity method;
• | growth rates of 2.0% (2021: 2.1%); and
• | use of 8.6% - 12.4% (pre-tax) (2021: 11.4% - 15.5%) to discount the projected cash flows to net present values
Following a review of the carrying amount of this CGU by the directors during 2022, the directors have concluded that no impairment is necessary.
Useful lives of depreciable assets
Management reviews the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets to the group. Actual results, however, may vary due to technical obsolescence.
Inventories
Management estimates the net realisable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realisation of these inventories may be affected by future technology or other market-driven changes that may reduce future selling prices.
Business combinations
Management uses valuation techniques when determining the fair values of certain assets and liabilities acquired in a business combination (see note 4.4).

5 Segment reporting
The group operates four (2021: four) business activities which are the sale of retail and IT solutions in Poland predominately as an Apple Premium Reseller, the sale of payment processing services, the provision of IT solutions and security systems and the provision of road, sea and air logistics services.
Each of these operating segments is managed separately as each of these lines requires local resources. All inter segment transfers for management services are carried out on a cost basis.
The accounting policy for identifying segments is based on internal management reporting information that is regularly reviewed by the chief operating decision maker.
Revenue reported below represents revenue generated from external customers. There were no intersegment sales in the year. The group’s reportable segments under IFRS 8 are direct sales attributable to each line of business.
The group operated in three principal geographical areas – Malta (country of domicile), UK, Germany and Poland. The sale of payment processing services and the provision of IT solutions and security systems are derived mainly from Malta whilst the sale of Apple products is derived from Poland and the sale and repair of used electronic deivices is derived from Germany. The provision of road, sea and air logistics services is carried out in Malta, UK and in Poland.
In 2022 and 2021, the group did not have any clients which individually represented 10% or more of the total revenue of the group.
As at the end of the reporting period the total amount of intangible assets and plant and equipment amounted to € 12,077,990 (2021: € 12,062,520) and € 13,663,641 (2021: € 11,370,166), respectively.
Measurement of operating segment profit or loss, assets and liabilities
Segment profit represents the profit earned by each segment after allocation of central administration costs and finance costs based on services and finance provided. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.
The accounting policies of the reportable segments are the same as the group’s accounting policies described in note 4.

Reconciliations of reportable segment revenues, profit or loss, assets and liabilities to consolidated totals are reported below:
Profit and loss before tax
| 2022 | 2021
| € | €
Total profit for reportable segments | 12,117,777 | 12,567,258
Unallocated amounts: |  |
Interest expense | (1,147,231) | (1,303,212)
Other unallocated amounts | (1,539,922) | (2,947,535)
| 9,430,624 | 8,316,511
Assets
| 2022 | 2021
| € | €
Total assets for reportable segments | 124,376,750 | 102,050,640
Elimination of receivables | (73,824,490) | (69,873,110)
Unallocated amounts: |  |
Goodwill | 63,283,683 | 62,888,956
Intangible assets | 10,044,178 | 10,218,294
Plant and equipment | 1,977,500 | 1,966,991
Right-of-use assets | 412,383 | 686,089
Loans and receivables | 31,342,146 | 33,771,206
Deferred tax assets | 402,499 | 420,692
Trade and other receivables | 421,496 | 1,882,031
Cash and cash equivalents | 1,468,576 | 2,406,555
Current tax assets | 1,890,775 | 1,560,607
Other unallocated amounts | 1,842,914 | 1,708,146
| 163,638,410 | 149,687,097
Liabilities
| 2022 | 2021
| € | €
Total liabilities for reportable segments | 92,826,290 | 78,444,200
Elimination of liabilities | (40,872,776) | (39,030,763)
Unallocated amounts: |  |
Debt securities in issue | 35,839,176 | 35,758,272
Other financial liabilities | 8,843,159 | 10,916,585
Bank Loans | 4,906,349 | 8,224,799
Lease liabilities | 430,043 | 688,760
Deferred tax liabilities | 371,910 | 371,910
Current tax liabilities | 6,957 | 2,374
Trade and other payables | 1,654,244 | 1,383,232
Other unallocated amounts | 96,469 | 96,468
| 104,101,821 | 96,855,837

The group’s revenue and results from continuing operations from external customers and information about it assets and liabilities by reportable segment are detailed below: |
| Retail and IT solutions (Poland and Germany) | Payment processing services | IT Solutions and security systems | Land, sea and air logistics services | Total | Unallocated | Eliminations and adjustments | Consolidated
| € | € | € | € | € | € | € | €
2022 |  |  |  |  |  |  |  |
Revenue | 193,403,333 | 4,604,475 | 12,491,266 | 35,046,902 | 245,545,976 | 1,977,720 | (14,809,302) | 232,714,394
Profit before tax | 6,231,404 | 1,527,941 | 1,139,956 | 3,218,476 | 12,117,777 | 6,530,985 | (9,218,138) | 9,430,624
Depreciation and amortisation | 4,208,384 | 430,667 | 166,861 | 1,381,494 | 6,187,406 | 287,534 | (26,996) | 6,447,944
Segment assets | 90,049,392 | 3,580,621 | 9,584,110 | 21,162,627 | 124,376,750 | 142,488,751 | (103,227,091) | 163,638,410
Capital expenditure | 2,589,304 | 349,698 | 61,677 | 2,467,649 | 5,468,328 | 28,261 | - | 5,496,589
Segment liabilities | 61,123,358 | 1,638,130 | 6,996,634 | 23,068,168 | 92,826,290 | 53,653,608 | (42,378,077) | 104,101,821
Income tax expense | (1,367,946) | (560,865) | (378,517) | (808,994) | (3,116,322) | (1,449,726) | 2,381,438 | (2,184,610)
2021 |  |  |  |  |  |  |  |
Revenue | 133,128,371 | 7,392,971 | 9,653,463 | 30,891,215 | 181,066,020 | 1,735,498 | (10,646,570) | 172,154,948
Profit before tax | 4,661,916 | 3,681,137 | 1,235,369 | 2,988,836 | 12,567,258 | 5,883,694 | (10,134,441) | 8,316,511
Depreciation and amortisation | 3,959,504 | 415,595 | 257,720 | 1,181,786 | 5,814,605 | 179,742 | (56,449) | 5,937,898
Segment assets | 70,967,272 | 4,029,437 | 9,891,162 | 17,162,769 | 102,050,640 | 144,076,943 | (96,440,486) | 149,687,097
Capital expenditure | 2,176,551 | 285,553 | 18,557 | 1,887,801 | 4,368,462 | 7,516 | (24,523) | 4,351,455
Segment liabilities | 48,528,449 | 2,054,220 | 7,765,122 | 20,096,413 | 78,444,204 | 56,974,022 | (38,562,389) | 96,855,837
Income tax expense | 1,020,154 | 1,293,895 | 342,870 | 760,552 | 3,417,471 | 1,758,682 | (2,698,082) | 2,478,071

6 Revenue
Revenue represents the amount receivable for goods sold and services rendered during the period from continuing operations, net of any indirect taxes as follows:
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Sale and distribution of Apple products | 178,286,710 | 122,579,592 | - | -
Sale of IT related products | 6,433,480 | 3,535,325 | - | -
Logistics and transport services | 35,046,902 | 30,891,215 | - | -
Rendering of services and development | 4,964,894 | 5,608,400 | - | -
Maintenance, support and servicing | 4,081,716 | 3,327,688 | - | -
Payment gateway services | 3,780,692 | 6,092,728 | - | -
Management fees | 120,000 | 120,000 | 1,110,000 | 1,010,000
| 232,714,394 | 172,154,948 | 1,110,000 | 1,010,000
Assets related to contracts with customers include amounts that the group expects to receive from performance obligations that have been satisfied before it receives the consideration and has not invoiced such amounts by the end of the year.
The sale and distribution of Apple products occurs in Poland. IT related products comprises the sale of information technology systems, security systems and other sale of products related to the technology business and is generated mainly from the Maltese operations of the group, with some projects being executed internationally. Logistics and transport services income is generated from Malta, UK and Poland with each contributing to the extent of 8%, 8% and 84% respectively (2021: Malta, UK and Poland, 11%, 9% and 80% respectively). All other revenue included in the above analysis is generated from the Maltese operations.
Other information concerning the types of contracts and contract durations, as relevant, are provided in notes 4.11 and 34.
Revenue from sales under the above activities are direct sales to customers with only a very insignificant amount being generated through intermediaries.
The following are the amounts recognised as contract assets at the end of the reporting periods presented:
|  |  | The group | The group
|  |  | 2022 | 2021
|  |  | € | €
Contract assets relating to rendering of services and development |  |  | 363,758 | 457,912
Contract assets relating to commission income accrued on gateway |  |  | 119,713 | 204,931
|  |  | 483,471 | 662,843
No single contract asset at 31 December 2022 and 31 December 2021 exceeded 10% of the total contract asset at that date. The assessment of credit losses on balances of contract assets at 31 December 2022 and 2021 did not result in any material amount and considered by management to be insignificant.
Since the start of the conflict in Ukraine, management has suspended certain business transactions to abide by US and European sanctions. Though this will have a temporary financial impact, management is taking appropriate measures to mitigate any loss in business with new contracts in the US, Europe, Asia and North Africa.

Unsatisfied long-term performance obligations
The following aggregated amounts of transaction prices relate to the performance obligations from existing contracts that are unsatisfied or partially unsatisfied as at 31 December 2022:
| 2023 | 2024 | 2025 | Later
| € | € | € | €
Sale of goods | 2,748,438 | 1,055,459 | 1,057,638 | -
Consulting services and development | 589,521 | 120,000 | - | -
Maintenance and servicing | 2,330,053 | 2,167,819 | 2,197,320 | 343,357
Logistics and transport services | 2,859,880 | 2,859,880 | 2,859,880 | -
Total revenue expected to be recognised | 8,527,892 | 6,203,158 | 6,114,838 | 343,357
The comparative information as at the end of the previous reporting period ending 31 December 2021 was as follows:
| 2022 | 2023 | 2024 | Later
| € | € | € | €
Sale of goods | 3,629,901 | 416,927 | 517,979 | -
Consulting services and development | 612,528 | - | - | -
Maintenance and servicing | 2,603,094 | 2,231,747 | 2,068,431 | 222,372
Logistics and transport services | 2,377,915 | 2,377,915 | 2,377,915 | 2,377,915
Total revenue expected to be recognised | 9,223,438 | 5,026,589 | 4,964,325 | 2,600,287
As at 31 December 2021 two major contracts that had been awarded in quarter four of 2021 to one of Harvest’s subsidiaries, are still expected to be completed over the following four years and expected to be realized as disclosed in the table presented above. With the exception of such contracts, all long-term performance obligations at 31 December 2021 that were expected to materialise in 2022 were completed and invoiced in full during the year under review. In addition, another subsidiary of the Harvest group was awarded a major contract during 2022 and is expected to be recognized in full during 2023.

7 Other operating income
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Other operating income | 91,158 | 94,471 | - | -

8 Investment income
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Interest income from ultimate parent | 35,795 | 51,822 | 35,795 | 51,821
Interest income from other related parties | 30,296 | 21,319 | 1,255,038 | 1,554,423
Dividends from subsidiaries | - | - | 5,077,466 | 3,820,882
| 66,091 | 73,141 | 6,368,299 | 5,427,126
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Comprising: |  |  |  |
Investment and other income | 66,091 | 73,141 | 6,368,299 | 5,427,126
| 66,091 | 73,141 | 6,368,299 | 5,427,126

9 Finance costs
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Interest on bank borrowings | 469,869 | 150,106 | 297,992 | 94,456
Interest on bonds | 1,836,000 | 1,836,000 | 1,836,000 | 1,836,000
Interest expense for leasing arrangements | 450,970 | 321,165 | - | -
Other interest payable | 541,352 | 277,514 | - | -
Intra-group interest payable | 186,995 | 677,068 | 229,952 | 747,549
Other finance costs | 345,780 | 242,557 | 97,066 | 64,219
Unrealised exchange losses | - | - | - | 68,866
Amortisation of bond issue costs | 80,904 | 80,904 | 80,904 | 80,904
| 3,911,870 | 3,585,314 | 2,541,914 | 2,891,994

10 Profit before tax
The profit before tax is stated after charging/(crediting):
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Depreciation and amortisation (notes 16 and 17) | 3,168,959 | 2,856,614 | 4,601 | 2,747
Depreciation on right-of-use assets (note 18) | 3,278,985 | 3,081,284 | - | -
Bad debts written off | 67,939 | - | - | -
Increase/(decrease) in provision for bad debts | 64,039 | (282,861) | - | -
Increase in provision for inventories | 63,559 | 121,300 | - | -
Net exchange differences | 119,852 | 50,118 | 170,633 | 133,084
The analysis of the amounts that are payable to the auditors and that are required to be disclosed, are as follows:
Group
Total remuneration payable to the parent company’s auditors in respect of the audit of the financial statements and the undertakings included in the consolidated financial statements amounted to € 100,414 (2021: € 93,132) and the remuneration payable to the other auditors in respect of the audits of the undertakings included in the consolidated financial statements amounted to € 63,884 (2021: € 62,796). Other fees payable to the parent company’s auditors for non-audit services, namely the review of interim financial information performed at one of the subsidiaries within the group, tax services and other fees, amounted to € 24,450 (2021: € 22,333).
Holding company
Total remuneration payable to the parent company’s auditors for the audit of the company’s financial statements amounted to € 8,950 (2021: € 8,700). There are no other fees payable to the parent company’s auditors for non-audit services other than other assurance services and tax advisory services.

11 Key management personnel compensation
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Directors’ compensations |  |  |  |
Short term benefits: |  |  |  |
Fees | 167,381 | 392,470 | 98,000 | 109,227
Management remuneration | 2,004,702 | 2,208,740 | - | -
| 2,172,084 | 2,601,210 | 98,000 | 109,227
Directors’ compensations |  |  |  |
Short term benefits: |  |  |  |
Salaries and social security contributions | 268,816 | 489,445 | - | -
Total key management personnel compensation |  |  |  |
Short term benefits | 2,440,900 | 3,090,655 | 98,000 | 109,227

12 Employee remuneration
Expenses recognised for staff costs are analysed below:

| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Wages and salaries | 19,890,636 | 16,860,559 | 1,090,922 | 718,227
Social security costs | 1,638,433 | 1,435,560 | 14,925 | 14,925
Maternity fund contributions | 9,806 | 8,907 | 743 | 449
| 21,538,875 | 18,305,026 | 1,106,590 | 733,601
Capitalised wages | (529,855) | (411,653) | - | -
Recharges from/ (to) related parties | 36,390 | 30,145 | - | (4,500)
| 21,045,410 | 17,923,518 | 1,106,590 | 729,101
The average number of persons employed during the year by the group excluding executive directors, was made up of:

|  |  | The group
|  |  | 2022 | 2021
Operations |  |  | 466 | 457
Administration |  |  | 159 | 148
|  |  | 625 | 605

13 Tax expense
The major components of tax expense and the reconciliation of the expected tax expense (income) based on the effective tax rate of the group and the company at 35% (2021: 35%) and the reported tax expense (income) in the statements of profit or loss and other comprehensive income are as follows:
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Profit before tax | 9,430,624 | 8,316,511 | 2,729,783 | 1,714,710
Tax rate | 35% | 35% | 35% | 35%
Expected tax expense | 3,300,718 | 2,910,779 | 955,424 | 600,149
Tax effect of: |  |  |  |
Different tax rates of subsidiaries operating in other jurisdictions | (1,064,002) | (1,041,801) | - | -
Adjustment for local tax credits | - | - | - | -
Over provision of tax in prior year | - | - | - | -
Deferred tax not recognised | 46,897 | (7,778) | - | -
Non-taxable income | 776,368 | 336,484 | - | -
Disallowed expenses | (286,332) | (327,804) | (745,218) | (604,826)
Loss on foreign investment | - | 379,105 | - | -
Exchange Differences | (775,109) | - | - | -
Unabsorbed tax losses | (5,366) | (26,292) | - | -
Permanent differences | 191,436 | 255,378 | - | -
Actual tax expense (income), net | 2,184,610 | 2,478,071 | 210,206 | (4,677)

| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Comprising: |  |  |  |
Current tax expense | 2,572,178 | 1,846,961 | 190,073 | -
Foreign tax expense | 23,742 | 81,953 | - | -
Deferred tax (income) expense | (411,310) | 61,150 | 20,133 | (4,677)
Investment tax credit | - | 488,007 | - | -
Over provision of tax in prior year | - | - | - | -
| 2,184,610 | 2,478,071 | 210,206 | (4,677)
Refer to note 36 for information on the deferred tax movements of the group and the company.

14 Dividends
In December 2022, 1923 Investments declared and paid a dividend of €785,007 to Hili Ventures.

15 Goodwill
The movements in the carrying amount of goodwill are as follows:
|  |  |  | The group
|  |  |  | €
At 1 January 2021 |  |  |  | 61,690,558
Effect of exchange differences on retranslation of goodwill on foreign subsidiaries |  |  |  | 1,198,400
At 31 December 2021 |  |  |  | 62,888,958
At 1 January 2022 |  |  |  | 62,888,958
Effect of exchange differences on retranslation of goodwill on foreign subsidiaries |  |  |  | 394,725
At 31 December 2022 |  |  |  | 63,283,683
Carrying amount |  |  |  |
At 31 December 2021 |  |  |  | 62,888,958
At 31 December 2022 |  |  |  | 63,283,683

16 Intangible assets – The group
|  |  |  | €
Gross carrying amount |  |  |  |
At 1 January 2021 |  |  |  | 12,994,494
Additions |  |  |  | 772,951
Disposals |  |  |  | (545)
Effect of foreign exchange differences |  |  |  | 73,408
At 31 December 2021 |  |  |  | 13,840,308
At 1 January 2022 |  |  |  | 13,840,308
Additions |  |  |  | 757,855
Disposals |  |  |  | (644)
Effect of foreign exchange differences |  |  |  | (199,880)
At 31 December 2022 |  |  |  | 14,397,639
|  |  |  | €
Amortisation |  |  |  |
At 1 January 2021 |  |  |  | 1,305,021
Provision for the year |  |  |  | 470,094
Released on disposal |  |  |  | (545)
Effect of foreign exchange differences |  |  |  | 3,218
At 31 December 2021 |  |  |  | 1,777,788
At 1 January 2022 |  |  |  | 1,777,788
Provision for the year |  |  |  | 550,207
Released on disposal |  |  |  | (644)
Effect of foreign exchange differences |  |  |  | (7,702)
At 31 December 2022 |  |  |  | 2,319,649
Carrying amount |  |  |  |
At 31 December 2021 |  |  |  | 12,062,520
At 31 December 2022 |  |  |  | 12,077,990
The amortisation charge was included in administrative expenses.
Intangible assets include separately identified intangible assets acquired during 2014 as part of the business combinations amounting to € 12,000,000 which have been recognised separately from goodwill. Intangible assets were adjusted downwards by € 192,178 (2021: upwards by € 70,190) following the fluctuations of the Polish Zloty from the date of acquisition to the balance sheet date.

These intangible assets relate to:
· Apple Premium Reseller operations operating under the brand iSpot together with related contracts – € 10,034,095 (2021: € 10,214,239). The useful life of this asset is considered to be indefinite as there was no foreseeable limit to the period over which the asset is expected to generate net cash inflows. In arriving at this conclusion management considered such factors as the stability of the industry and changes in the demand for such products. This assessment is reassessed periodically. · APCO’s payment gateway system – € 1,000,000. The useful life of this asset was considered to be finite due to possible technological obsolescence and is being amortised on a straight line basis. Until 31 December 2014, the group was amortising the intangible asset over 3 years. Following the knowledge generated, the group re-assessed the remaining useful life of the asset to be 10 years. Had the group not re-assessed the remaining useful life, the additional amortisation for the years 2015, 2016 and 2017 would have amounted to € 233,000 annually more. This asset would have been fully amortised by 31 December 2017 had the group not re-assessed the remaining useful life. As from 2018, the yearly amortisation on this asset amounts to € 89,855. The amortisation charge for the year is included within administrative expenses.
Intangible Assets – The company At 1 January 2022 |  |  |  | -
Additions |  |  |  | 10,520
At 31 December 2022 |  |  |  | 10,520
|  |  |  | €
Amortisation |  |  |  |
At 1 January 2022 |  |  |  | -
Provision for the year |  |  |  | 438
At 31 December 2022 |  |  |  | 438
Carrying amount |  |  |  |
At 31 December 2021 |  |  |  | -
At 31 December 2022 |  |  |  | 10,082

17 Plant and equipment – The group
| Improvements to premises | Equipment | Motor vehicles | Furniture, fixtures and fittings | Total
| € | € | € | € | €
Cost |  |  |  |  |
At 1 January 2021 | 5,993,528 | 10,050,173 | 264,844 | 4,504,682 | 20,813,227
Additions | 321,294 | 2,606,682 | 11,439 | 663,614 | 3,603,029
Disposals for the year | (175,152) | (781,179) | - | (119,780) | (1,076,111)
Effect of foreign currency exchange differences | (18,491) | 380,283 | (1,084) | (26,573) | 334,135
At 31 December 2021 | 6,121,179 | 12,255,959 | 275,199 | 5,021,943 | 23,674,280
At 1 January 2022 | 6,121,179 | 12,255,959 | 275,199 | 5,021,943 | 23,674,280
Additions | 616,244 | 4,057,306 | 14,406 | 50,778 | 4,738,734
Disposals for the year | (124,368) | (583,310) | - | (2,862) | (710,540)
Effect of foreign currency exchange differences | (44,251) | 572,737 | (2,550) | (1,043) | 524,893
At 31 December 2022 | 6,568,804 | 16,302,692 | 287,055 | 5,068,816 | 28,227,367
Depreciation |  |  |  |  |
At 1 January 2021 | 3,365,250 | 3,534,808 | 219,909 | 3,636,353 | 10,756,320
Charge for the year | 317,158 | 1,576,670 | 22,914 | 469,778 | 2,386,520
Released on disposal | (166,472) | (696,547) | - | (90,625) | (953,644)
Effect of foreign currency exchange differences | 9,090 | 99,172 | (535) | 7,191 | 114,918
At 31 December 2021 | 3,525,026 | 4,514,103 | 242,288 | 4,022,697 | 12,304,114
At 1 January 2022 | 3,525,026 | 4,514,103 | 242,288 | 4,022,697 | 12,304,114
Charge for the year | 249,340 | 2,298,732 | 25,671 | 45,009 | 2,618,752
Released on disposal | (124,368) | (470,668) | - | (2,088) | (597,124)
Effect of foreign currency exchange differences | (35,386) | 276,220 | (1,802) | (1,048) | 237,984
At 31 December 2022 | 3,614,612 | 6,618,387 | 266,157 | 4,064,570 | 14,563,726
Carrying amount |  |  |  |  |
At 31 December 2021 | 2,596,153 | 7,741,856 | 32,911 | 999,246 | 11,370,166
At 31 December 2022 | 2,954,192 | 9,684,305 | 20,898 | 1,004,246 | 13,663,641

Plant and equipment – The company
|  |  |  | €
Gross carrying amount |  |  |  |
At 1 January 2021 |  |  |  | 8,866
Additions |  |  |  | 2,508
At 31 December 2021 |  |  |  | 11,374
At 1 January 2022 |  |  |  | 11,374
Additions |  |  |  | 12,769
At 31 December 2022 |  |  |  | 24,143
Depreciation |  |  |  |
At 1 January 2021 |  |  |  | 4,906
Provision for the year |  |  |  | 2,747
At 31 December 2021 |  |  |  | 7,653
At 1 January 2022 |  |  |  | 7,653
Provision for the year |  |  |  | 4,161
At 31 December 2022 |  |  |  | 11,814
Carrying amount |  |  |  |
At 31 December 2021 |  |  |  | 3,721
At 31 December 2022 |  |  |  | 12,329
The depreciation charge was included in administrative expenses.

18 Right-of-use assets – The group

The following assets have been recognised as right-of-use assets of the group:

| Buildings | Motor vehicles | IT equipment | Total
| € | € | € | €
Gross carrying amount |  |  |  |
At 1 January 2021 | 13,925,654 | 540,032 | 48,110 | 14,513,796
Additions | 6,832,959 | 494,171 | - | 7,327,130
Disposals | - | (8,968) | - | (8,968)
Termination of leases | (3,592,688) | (183,696) | (48,110) | (3,824,494)
Foreign currency exchange differences | (1,302) | (73) | - | (1,375)
At 31 December 2021 | 17,164,623 | 841,466 | - | 18,006,089
At 1 January 2022 | 17,164,623 | 841,466 | - | 18,006,089
Additions | 2,881,856 | 125,875 | - | 3,007,731
Termination and expiry of leases | (6,908) | (61,533) | - | (68,441)
Foreign Currency Exchange differences | (268,669) | - | - | (268,669)
At 31 December 2022 | 19,770,902 | 905,808 | - | 20,676,710
Depreciation |  |  |  |
At 1 January 2021 | 5,680,951 | 234,979 | 43,089 | 5,959,019
Provision for the year | 2,828,650 | 252,634 | - | 3,081,284
Termination of leases | (2,339,173) | (150,538) | (43,089) | (2,532,800)
Foreign currency exchange differences | (762) | (59) | - | (821)
At 31 December 2021 | 6,169,666 | 337,016 | - | 6,506,682
At 1 January 2022 | 6,169,666 | 337,016 | - | 6,506,682
Provision for the year | 3,183,527 | 95,458 | - | 3,278,985
Termination and expiry of leases | (3,337) | (45,509) |  | (48,846)
Foreign currency exchange differences | (80,393) | - | - | (80,393)
At 31 December 2022 | 9,269,463 | 386,965 | - | 9,656,428
Carrying amount |  |  |  |
At 31 December 2021 | 10,994,957 | 504,450 | - | 11,499,407
At 31 December 2022 | 10,501,439 | 518,843 | - | 11,020,282
The depreciation charge on right-of use assets was included in administrative expenses.
The group has elected to disclose right-of-use assets separately in these financial statements. The information pertaining to the gross carrying amount, depreciation recognised during the year and other movements in right-of-use assets is included in the above table. Information pertaining to lease liabilities and their corresponding maturities are disclosed separately in note 19. Information about the accounting policy for the measurement and recognition of leases is disclosed in note 4.20.
The weighted average incremental borrowing rates applied to lease liabilities recognised under IFRS 16 was 3% on leases in Poland for the retail and IT solutions and 3.93% on leases in Malta and Poland for all other operations until 2021. There were no additions to right-of-use assets for buildings in Malta during the current reporting period (2021: € 648,765). Additions of buildings amounting to € 1,803,857 (2021: € 6,149,945) made during the year comprise of additions in the Apple retail business in Poland at a rate of 6.3%. These additions include the signing of new contracts for the lease of outlets at iSpot. Additions of buildings amounting to € 1,077,999 made during the year comprise of additions in E-Lifecycle Holdings GmbH in Germany at a rate of 3.93%. The incremental borrowing rate will be re-assessed every time a new lease is entered into by the group and the corresponding right-of-use asset recognised. New leases are assessed on a case-by-case basis.
Most of the buildings leased by the group in Malta and the logistics business in Poland had similar remaining lease terms and utilised in a similar economic and commercial environment.

In addition, the group has financed all of its obligations internally and has therefore not been subject to market fluctuations in the interest rate from its borrowings with third-parties. The group does not expect these rates to vary significantly in the foreseeable future. Motor vehicles and IT equipment classified under right-of-use assets, are not considered by the group to be significant and therefore their initial measurement was not subject to a high degree of uncertainty.

19 Leases – The group
Lease liabilities are presented in the statement of financial position as follows:
|  | 2022 | 2021
|  | € | €
Current: |  |  |
Lease liability |  | 3,651,700 | 3,034,583
Non-current: |  |  |
Lease liability |  | 7,913,227 | 8,882,191
|  | 11,564,927 | 11,916,774
The group has leases for its buildings, motor vehicles and IT equipment. With the exception of short-term leases and variable lease payments, each lease is included in the statement of financial position as a right-of-use asset and a lease liability. The group does not have any leases of low-value underlying assets which do not depend on an index or a rate (such as lease payments based on a percentage of group sales). The company classifies its right-of-use assets in a consistent manner to its plant and equipment as applicable.
Each lease generally imposes a restriction that, unless there is a contractual right for the group to sublet the asset to another party, the right-of-use asset can only be used by the group. Leases are either non-cancellable or may only be cancelled by incurring a substantive termination fee. The group is prohibited from selling or pledging the underlying leased assets as security. For leases over buildings, the group must keep those properties in a good state of repair and return the properties in their original condition at the end of the lease. Further, the group must insure items under lease and incur maintenance fees on such items in accordance with the lease contracts.
The range of the remaining lease term of the group’s buildings is 1 – 9 years (2021: 1 – 9 years), whilst the range of the remaining lease term of both motor vehicles and IT equipment is 1 – 6 years (2021: 1 - 4 years).
The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 31 December 2022 were as follows:
| Minimum lease payments |
|  | Later than one year |  |
| Not later than one | but not later than | Later than |
| year | five years | five years | Total
| € | € | € | €
31 December 2022 |  |  |  |
Lease payments | 4,245,798 | 8,567,531 | 210,690 | 13,024,019
Finance charges | (703,415) | (745,004) | (10,673) | (1,459,092)
Net present values (note 38) | 3,542,383 | 7,822,527 | 200,017 | 11,564,927
Further to the above, note 38 details changes in the company’s and the group’s liabilities arising from financing activities including both cash and non-cash changes. Future minimum lease payments at 31 December 2021 were as follows:
| Minimum lease payments
| Not later than one year | Later than one year but not later than five years | Later than five years | Total
| € | € | € | €
31 December 2021 |  |  |  |
Lease payments | 3,678,636 | 9,569,282 | 345,832 | 13,593,750
Finance charges | (644,053) | (1,011,093) | (21,830) | (1,676,976)
Net present values (note 38) | 3,034,583 | 8,558,189 | 324,002 | 11,916,774
Lease payments not recognised as liabilities One of the Maltese subsidiaries has a short-term lease with a third party for the use of warehousing space in Malta. The contract is renewable every year and can be terminated by either of the parties with a short period of notice. As a result, management considers this lease to be a short-term lease for the purposes of IFRS 16. Payments made under short term leases are expensed on a straight-line basis. The group also leases certain properties in Poland whereby it is committed to pay monthly payments to lessors based on the sales of each particular shop. This is considered as variable lease payments and therefore not permitted to be recognised a lease liability and is expensed as incurred. The lease expense recognised in the consolidated statement of profit or loss and other comprehensive income of the group for the year is as follows:
| 2022 | 2021
| € | €
Short-term leases of warehouse | 248,535 | 240,142
Variable lease payments | 763,591 | 402,270
| 1,012,126 | 642,412

20 Investment in subsidiaries
20.1 The company
| 2022 | 2021
| € | €
At 1 January | 66,832,577 | 66,832,577
Additions through the setting up of a new company | 1,208,743 | -
Additions as a result of increase in share capital of subsidiary | 200 | -
At 31 December | 68,041,520 | 66,832,577

On 28 June 2022, the company incorporated a subsidiary, E-Lifecycle Holdings GmbH, with an initial investment of €1,178,500 and capitalised costs amounting to €30,243. The transfer of €1,178,500 as disclosed above, was effected through a cash consideration.

20.2 The group
1923 Investments p.l.c. has investments in the following subsidiaries:
Name of subsidiary | Place of incorporation | Proportion ownership interest | Holding | Portion voting power held | Principal activity
|  | 2022 | 2021 |  | 2022 | 2021 |
|  | % | % |  | % | % |
Harvest Technology p.l.c | Malta | 62.95 | 62.95 | Direct | 62.95 | 62.95 | Holding company
iSpot Poland Sp. z o.o | Poland | 100 | 100 | Direct | 100 | 100 | Sale of retail and IT solutions
Hili Logistics Limited | Malta | 100 | 100 | Direct | 100 | 100 | Holding company
E-Lifecycle Holdings GmbH | Germany | 100 | - | Direct | 100 | - | Sale of retail and IT solutions
PTL Limited | Malta | 100 | 100 | Indirect | 100 | 100 | Sale of IT solutions and security systems
APCO Limited | Malta | 100 | 100 | Indirect | 100 | 100 | Sale of IT solutions and security systems
APCO Systems Limited | Malta | 100 | 100 | Indirect | 100 | 100 | Payment processing services
APCOPAY Ireland Limited | Ireland | 100 | 100 | Indirect | 100 | 100 | Payment processing services
APCOPAY Greece S.A. | Greece | 100 | - | Indirect | 100 | - | The sale of a payment gateway service
PTLtech (Mauritius) Limited | Mauritius | 100 | - | Indirect | 100 | - | The sale of IT solutions and security systems
SAD Sp. z o.o | Poland | 100 | 100 | Indirect | 100 | 100 | Sale of retail and IT solutions
iSpot Premium Romania | Romania | 100 | 100 | Indirect | 100 | 100 | Sale of retail and IT solutions
Ipsyon Ltd | Malta | 100 | 100 | Indirect | 100 | 100 | Holding of intellectual property
Carmelo Caruana Company Limited | Malta | 100 | 100 | Indirect | 100 | 100 | Warehousing and ship-to-ship operations
STS Marine Solutions Limited | Jersey | 100 | 100 | Indirect | 100 | 100 | Holding company
Carmelo Caruana Marine Solutions Limited (struck-off) | UK | N/A | 100 | Indirect | N/A | 100 | Holding company
STS Marine Solutions (UK) Limited | UK | 100 | 100 | Indirect | 100 | 100 | Backoffice services
STS Marine Solutions (Bermuda) Limited | Bermuda | 100 | 100 | Indirect | 100 | 100 | Ship-to ship operations
SPT Marine Transfer Services Limited | Bermuda | 100 | 100 | Indirect | 100 | 100 | Terminal management
Guardian L.L.C. | Marshall Islands | 100 | 100 | Indirect | 100 | 100 | Operation of vessel
Allcom Sp. z.o.o. | Poland | 100 | 100 | Indirect | 100 | 100 | Shipping and freight forwarding

Information about direct subsidiaries of the company is as follows: |
Name of company | Registered office | Capital and reserves at 31 December | Profit/(loss) for the year ended 31 December |
|  | 2022 | 2021 | 2022 | 2021 |
|  | € | € | € | € |
Harvest Technology p.l.c | Nineteen Twenty Three, Valletta Road, Marsa, MRS 3000 Malta | 12,747,416 | 12,992,832 | 893,616 | 2,286,300 |
iSpot Poland Sp. z o.o | UL. Pulawska 2, 02-566 Warsaw, Poland | 23,734,229 | 21,574,000 | 4,894,088 | 3,516,000 |
iSpot Premium Romania | 1st District, 246 B Floreasca street, Shopping Centre Promenada, first floor Unit no. 1F-055, Bucharest, Romania | (335,663) | (333,083) |  |  |
(2,533) | (9,128) |
Hili Logistics Limited | Nineteen Twenty Three, Valletta Road, Marsa, MRS 3000 Malta | 34,042,856 | 33,791,833 | 1,676,023 | 119,325 |
E-Lifecycle Holdings GmbH | Spedition str. 21 40221 Dusseldorf Germany | 824,772 | - | (550,228) | - |
The company also has indirect investments in subsidiaries as follows: |
Name of company | Registered office |
PTL Limited | Nineteen Twenty Three, Valletta Road, Marsa, MRS 3000 Malta |
APCO Limited | Nineteen Twenty Three, Valletta Road, Marsa, MRS 3000 Malta |
APCO Systems Limited | Nineteen Twenty Three, Valletta Road, Marsa, MRS 3000 Malta |
APCOPAY Ireland Limited | Commercial House, Millbank Business Centre, Lucan, Dublin, K78, X5W6, Ireland |
APCO Greece S.A. | Municipality of Marousi of Attica, Prefecture, Greece |
PTLtech (Mauritius) Limited | Pope Hennesy Street, Suite 602, 6 th Floor, Hennesy Tower, Port Louis Mauritius |
Ipsyon Ltd | Nineteen Twenty Three, Valletta Road, Marsa, MRS 3000 Malta |
Carmelo Caruana Company Limited | Nineteen Twenty Three, Valletta Road, Marsa, MRS 3000 Malta |
Allcom Sp. z o.o. | ul. Mariacka 9, 81-383 Gdynia, Poland |
STS Marine Solutions (UK) Limited | 1, The Cloisters, Sunderland, Tyne & Wear, United Kingdom, SR2 7BD |
STS Marine Solutions Limited | PO Box 536, 13-14, Esplanade, St. Helier, Jersey JE4 5UR |
STS Marine Solutions (Bermuda) Limited | Appleby, Canon’s Court , 22 Victoria Street, Hamilton, Bermuda, HM 12 |
SPT Marine Transfer Services Limited | Appleby, Canon’s Court , 22 Victoria Street, Hamilton, Bermuda, HM 12 |
Guardian L.L.C. | Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands |

21 Investments accounted for using the equity method
The group’s investments accounted for using the equity method comprise:
| The group | The group
| 2022 | 2021
| € | €
Investment in associates | 830,726 | 715,015
Investment in joint ventures | 1,381,659 | 1,053,642
| 2,212,385 | 1,768,657
21.1 Investment in associates
The group’s investment in associate undertakings is analysed below:
| The group | The group
| 2022 | 2021
| € | €
At 1 January | 715,015 | 496,191
Share of profits and losses | 801,711 | 684,324
Dividends from associate | (686,000) | (465,500)
At 31 December | 830,726 | 715,015
The group has investment in associates through Hili Logistics Limited as follows:

Name of company | Proportion of ownership interest | Capital and reserves at 31 December | Profit/(loss) for the year ended 31 December
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021
| % | % | € | € | € | €
CMA CGM Agency Malta Ltd | 49 | 49 | 1,694,371 | 1,473,796 | 1,636,145 | 1,396,580

The net accumulated interest in the net assets of CMA CGM Agency Malta Limited amount to € 830,726 as at 31 December 2022 (2021: € 715,015).
The registered office of the above associates is Nineteen Twenty-Three, Valletta Road, Marsa, Malta.
21.2 Investment in joint ventures
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
At 1 January | 1,053,642 | 965,831 | 682,375 | 682,375
Share of profits and losses | 328,017 | 139,558 | - | -
Dividends from joint ventures | - | (51,747) | - | -
At 31 December | 1,381,659 | 1,053,642 | 682,375 | 682,375

The group has joint venture investments in iCentre Hungary Kft and Hili Salomone Company Limited through Harvest Technology p.l.c. as follows:

Name of company | Proportion of ownership interest | Capital and reserves at 31 December | Profit/(loss) for the year ended 31 December
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021
| % | % | € | € | € | €
Hili Salomone Company Limited | N/A | N/A | N/A | N/A | N/A | N/A
iCentre Hungary Kft | 50 | 50 | 1,623,594 | 1,070,006 | 656,034 | 279,117

The registered office of Hili Salomone Company Limited was Nineteen Twenty-Three, Valletta Road, Marsa, Malta. The company was struck off on 10 December 2021.
The company holds 50% directly in iCentre Hungary Kft. The registered office of iCentre Hungary Kft is Bécsi út 77-79, 1036 Budapest, Hungary.
Summarised financial information in respect of joint ventures is set out below:
| The group | The group
| 2022 | 2021
| € | €
Carrying asset amount | 1,381,659 | 1,053,642
Group’s share of total profit / total comprehensive income | 328,017 | 139,558
Included in the investment in joint ventures, is an investment of € 1,381,659 (2021: € 1,053,642) pertaining to the investment in iCentre Hungary Kft. A summary of the financial information of this joint venture is set out below:
| The group | The group
| 2022 | 2021
| € | €
Current assets | 3,563,883 | 3,737,258
Non-current assets | 570,006 | 471,312
Current liabilities | (2,494,233) | (3,171,687)
Net assets | 1,639,656 | 1,036,883
Revenue | 21,328,508 | 14,258,023
Expenses | (20,722,265) | (13,978,906)
Profit for the year (net of tax) | 656,034 | 279,117
Group’s share of total profit / total comprehensive income | 328,017 | 139,558

# 22 Other investment
| The group | The group
| 2022 | 2021
| € | €
As at 1 January | 1,149,977 | 50,000
Additions | - | 1,099,977
Ast at 31 December | 1,149,977 | 1,149,977
During 2021, Harvest Technology p.l.c. made an additional investment in Thought3D Limited amounting to € 99,977. Additionally, during 2021, one of the subsidiaries of 1923 Investments Plc has invested an amount of € 1,000,000 in shares issued by Hili Properties p.l.c., a public listed company on the Malta Stock Exchange and a related company within the Hili Ventures Limited group.

# 23 Loans and receivables
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Loans receivable from ultimate parent | 3,734 | 3,021,075 | - | 3,016,562
Loans receivable from subsidiaries | - | - | 31,800,306 | 30,609,375
Loans receivable from other related parties | 1,506,982 | 137,792 | 1,560 | 3,796
Other receivables | 7,913,456 | 1,613,814 | - | -
| 9,424,172 | 4,772,681 | 31,801,866 | 33,629,733
Comprising: |  |  |  |
Non-current |  |  |  |
Loans receivable from subsidiaries | - | - | 26,750,380 | 23,828,586
Loans receivable from other related parties | 1,505,422 | 131,132 | - | -
Other receivables | 7,913,456 | 1,613,814 | - | -
| 9,418,878 | 1,744,946 | 26,750,380 | 23,828,586
Current |  |  |  |
Loans receivable from ultimate parent | 3,734 | 3,021,075 | - | 3,016,562
Loans receivable from subsidiaries | - | - | 5,049,926 | 6,780,789
Loans receivable from other related parties | 1,560 | 6,660 | 1,560 | 3,796
| 5,294 | 3,027,735 | 5,051,486 | 9,801,147
Loans issued to ultimate parent, subsidiaries, other related parties and associate bear an interest of 4.5% (2021: 4.5%) per annum. Though these loans have no fixed date for repayment, they are not expected to be realised within 12 months of the end of the reporting year. Non-Current Other Receivables amounting to €7,913,456 includes an amount receivable from Polish Tax Office in relation to VAT paid on account of tax proceedings for February and March to July 2015 periods amounting to € 7,608,977 . If the case resolution is favourable for SAD, this amount of VAT paid will be returned along with the interest.

24 Inventories
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Contracts in progress | 1,836,181 | 852,112 | - | -
Finished goods and goods held for resale | 17,013,585 | 10,157,295 | - | -
Fuel | 211,688 | 84,663 | - | -
| 19,061,454 | 11,094,070 | - | -

The amount of inventories recognised as an expense during the year amounted to € 159,235,434 (2021: € 109,019,332). |
Write-downs of inventories recognised in the consolidated statement of profit or loss and other comprehensive income during the year amounted to € 6,643 (2021: (€ 99,881)) and are included with cost of sales.

25 Other assets
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Prepayments | 2,670,065 | 2,288,380 | 179,840 | 160,779
| 2,670,065 | 2,288,380 | 179,840 | 160,779

26 Trade and other receivables
Trade and other receivables consist of the following:
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Trade receivables – gross | 11,364,804 | 13,603,885 | - | -
Allowance for expected losses | (318,630) | (254,591) | - | -
Trade receivables – net | 11,046,174 | 13,349,294 | - | -
Amount owed by ultimate parent | 8,691 | 53,764 | - | -
Amounts owed by associates | - | 306,716 | - | -
Amounts owed by other related parties | 850,121 | 1,431,424 | - | -
Other receivables | 82,968 | 259,352 | - | -
Accrued income | 78,975 | 365,974 | - | -
Financial assets | 12,066,929 | 15,766,524 | - | -
Other receivables | 1,898,530 | 1,331,330 | 95,750 | 86,609
Trade and other receivables – current | 13,965,459 | 17,097,854 | 95,750 | 86,609
The carrying value of financial assets is considered a reasonable approximation of fair value.
No interest is charged on trade and other receivables.
Amounts owed by ultimate parent, associates and other related parties are unsecured, interest free and repayable on demand.
Note 41.2 includes disclosures relating to the credit risk exposures and analysis relating to the allowance for expected credit losses.

27 Cash and cash equivalents
Cash and cash equivalents include the following component:
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Cash and bank balances | 10,312,277 | 9,666,172 | 727,660 | 1,297,371
Cash and cash equivalents in the statements of financial position | 10,312,277 | 9,666,172 | 727,660 | 1,297,371
Bank overdrafts | (4,701,094) | - | - | -
Cash and cash equivalents in the statements of cash flows | 5,611,183 | 9,666,172 | 727,660 | 1,297,371
The group and the company did not have any restrictions on its cash at bank as at the end of the reporting period. Any interest earned on cash at bank is based on market rates.
28 Share capital
The share capital of 1923 Investments p.l.c. consists only of ordinary shares with a par value of € 1. All shares are equally eligible to receive dividends and repayment of capital and represent one vote at the shareholders’ meeting of the company.
| 2022 | 2021
| € | €
Shares issued and fully paid at 31 December |
52,135,000 (2021: 52,135,000) ordinary shares of € 1 each | 52,135,000 | 52,135,000
| 52,135,000 | 52,135,000
Shares authorised at 31 December |  |
70,000,000 ordinary shares of € 1 each | 70,000,000 | 70,000,000
During 2021, an amount of € 2,560,000, which was advanced by Hili Ventures Limited and which was included with equity (refer to note 29), was capitalised through the issue of € 2,560,000 ordinary shares of € 1 each on 27 April 2021.

29 Other equity
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Other equity | 4,741,736 | 4,741,736 | (154,629) | (154,629)
Total other equity | 4,741,736 | 4,741,736 | (154,629) | (154,629)
On 30 December 2013, the company, through its direct subsidiary, Harvest Technology p.l.c., acquired 100% interest in PTL Limited, 50% interest in Hili Salomone Company Limited and 33% interest in Smart Technologies Limited from a related party, Hili Company Limited. Both Hili Company Limited and 1923 Investments p.l.c. have the same parent company, Hili Ventures Limited.
The acquisition of the subsidiary, PTL Limited, and its underlying subsidiaries by the company falls outside the scope of International Financial Reporting Standard 3 – Business Combinations (“IFRS 3”) because the transaction merely represents a group reorganisation and because in terms of paragraph 2(c) of IFRS 3, the acquisition of these entities by the company is a combination of businesses under common control in which all the combining entities are ultimately controlled by the same party, Hili Ventures Limited, both before and after the business combination and that control is not transitory.
The difference of € 1,367,314 between consideration for the acquired entities of € 3,551,791 and the amounts at which the assets and liabilities of the acquired entities were recognised of € 2,184,477 are included in equity in terms of predecessor accounting.
On 22 December 2016, Harvest Technology p.l.c. eliminated € 1,754,051 of its accumulated losses through a reduction of its share premium account of the same amount. At consolidated level, this is included in equity. During 2017, the € 1,754,051 reduction in share premium took effect and was eliminated against losses.
During 2017, the interest in Smart Technologies Limited was disposed of by the group and an amount of € 300,000 previously recognized in other equity was eliminated.
On 2 December 2017, Hili Logistics Limited eliminated € 2,075,000 of its accumulated losses through a reduction of its share premium account of the same amount. At consolidation level, this is included in equity.
The group and the company also recognised a total amount of € 154,629 with other equity representing the value of services provided by an officer of the group during 2018 and 2017.
An amount of €2,560,000 was was part of the other equity of the group and which related to an advancement by the parent company was capitalised during 2021 (refer to note 28).

30 Translation reserve
The group’s foreign operations expose the group to exchange movements in other comprehensive income.
The movement for the year was mainly attributable to a weaker Polish Zloty (PLN) against the euro closing at PLN 4.6808 at 31 December 2022 (2021: PLN 4.5969) and the US Dollar (USD) against the euro of USD 1.0666 at 31 December 2022 (2021: USD 1.1326). This resulted in a positive impact of € 666,338 (2021: positive impact of € 1,641,334).

31 Debt securities in issue
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
5.1% unsecured bonds redeemable 2024 | 35,839,176 | 35,758,272 | 35,839,176 | 35,758,272
| 35,839,176 | 35,758,272 | 35,839,176 | 35,758,272
In December 2014, the company issued 360,000 5.1% unsecured bonds of a nominal value of € 100 per bond. The bonds are redeemable at their nominal value on 4 December 2024.
Interest on the bonds is due and payable annually on 4 December of each year.
The bonds are listed on the Official List of the Malta Stock Exchange. The carrying amount of the bonds is net of direct issue costs of € 160,821 (2021: € 241,725) which are being amortised over the life of the bonds. The market value of debt securities on the last trading day before the statement of financial position date was € 36,180,000 (2021: € 36,720,000).

32 | Borrowings
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Bank overdrafts | 4,701,094 | - | - | -
Bank loans | 8,598,249 | 8,224,799 | 6,752,299 | 8,224,799
| 13,299,343 | 8,224,799 | 6,752,299 | 8,224,799
Comprising: |  |  |  |
Non-current liabilities |  |  |  |
Bank loans | 6,319,288 | 6,748,228 | 5,227,616 | 6,748,228
| 6,319,288 | 6,748,228 | 5,227,616 | 6,748,228
Current liabilities |  |  |  |
Bank overdrafts | 4,701,094 | - | - | -
Bank loans | 2,278,961 | 1,476,571 | 1,524,683 | 1,476,571
| 6,980,055 | 1,476,571 | 1,524,683 | 1,476,571

Bank overdrafts and loans are repayable as follows:
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
On demand or within one year | 7,028,943 | 1,476,571 | 1,573,571 | 1,476,571
Second to fifth year | 6,216,843 | 6,473,408 | 5,125,171 | 6,473,408
More than five years | 53,557 | 274,820 | 53,557 | 274,820
| 13,299,343 | 8,224,799 | 6,752,299 | 8,224,799
Harvest Technology p.l.c. has three overdraft facilities in two of its subsidiaries amounting to €1,070,000 secured by general hyotechs over present and future assets of the Harvest group and bear interest between 3.5% and 5.5%.
During 2020, 1923 Investments p.l.c. obtained a loan with a local bank for € 2,250,000. Another loan was obtained with this same bank during 2021 for € 430,000. This loan is unsecured and ranks with priority to all other general creditors of the company. At 31 December 2022, the balance of the loans amounted to € 1,499,025 (2021: € 1,807,129) and € 362,754 (2021: € 417,670) respectively, included with the balance of bank loans above. The loans are payable by quarterly installments of € 91,045 and € 17,208 respectively, bear interest at 3.75% plus 3 month Euribor per annum and repayable in full within 7 years of drawdown. This loan is unsecured and ranks with priority to all other general creditors of the company. In December 2021, 1923 Investments plc obtained a loan from another local bank for € 6,000,000. The loan is payable by quarterly instalments of € 330,860 and bears interest at 3.75% per annum plus 3 month Euribor per annum and repayable in full within 5 years from drawdown. At 31 December 2022, the balance of the loans amounted to € 4,890,520 (2021: € 6,000,000). This loan was granted under a first General Hypotech of € 6,000,000 over all assets present and future, whilst ranking with priority to all other general creditors of the company.
As at 31 December 2022, Carmelo Caruana Company Limited’s banking facilities comprise overdraft facilities of € 686,350 (2021: € 686,350). The bank overdrafts bear effective interest at the rate of 4.85% and 5.15% (2021: 4.85% and 5.15%). The company’s banking facilities also include a special guarantee facility of €339,433 (2021: nil) and a structured trade finance facility of €2,561,759 (2021: nil). By 31 December 2022, Carmelo Caruana Company Limited had utilised a total of € 1,845,950 of the structured trade facility. This facility is denominated in US Dollars. The facility is repayable by a bullet payment of US Dollars 200,000, 180 days from drawdown. A second bullet payment of US Dollars 200,000 is repayable 1 year from drawdown and subsequently monthly repayments for the following four years.The structured trade finance facility bears an effective interest at the rate of 8.25% (2021: nil). These banking facilities are secured by special and general hypothecs on the assets of Carmelo Caruana Company Limited and by guarantees given by the directors.
Harvest had no borrowings or overdrawn bank facilities at 31 December 2022 (2021: €Nil). At the end of the current reporting period, Harvest had three overdraft facilities in two of its subsidiaries amounting to €1,070,000 secured by general hypotechs over present and future assets of the Harvest pillar and bear interest between 3.5% and 5.5%.
The group’s overdraft facility in Poland for Allcom Sp. z.o.o. bears variable interest rate of 8.13% (2021: 1.4%) per annum. It is secured on the bank guarantee issued by Bank Gospodarstwa Krajowego from de minimis support.
The group’s banking facilities for iSpot Poland Sp. z.o.o. includes an overdraft facility of PLN 8,000,000 (€1,709,110) and Import Loan facilities of PLN 25,000,000 (€5,340,967) and a receivable financing of PLN 3,000,000 (€640,916).
Furthermore mBank is providing a Guarantee Line of PLN72,000,000 consisting of:
• | Guarantee line including rent guarantees of PLN 6,000,000;
• | SBDC of PLN 30,000,000 issued for Apple Distribution International;
• | Guarantee line for suppliers of PLN 36,000,000
The above facilities are secured by:
• | Registered pledge on iSpot inventories worth at least PLN 30,000,000 (pledge amount equalling 150% of the limit amount);
• | Corporate guarantee issued by 1923 Investments plc up to a maximum amount of PLN 36,000,000;
• | Confirmed assignment of receivable on account of card payments from eService;
• | Blank promissory note.

33 | Trade and other payables
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Trade payables | 20,400,676 | 18,404,342 | 58,797 | 42,039
Amounts payable to parent company | 8,759 | 1,276 | - | -
Amounts payable to related parties | 24,162 | 53 | - | -
Other payables | 259,575 | 1,429,754 | 182,241 | 184,503
Accrued expenses | 6,160,599 | 5,645,103 | 775,997 | 474,835
Financial liabilities | 26,853,771 | 25,480,528 | 1,017,035 | 701,377
Other creditors | 5,716,937 | 4,308,377 | - | -
Deferred income | 996,486 | 1,022,559 | - | -
Trade and other payables | 33,567,194 | 30,811,464 | 1,017,035 | 701,377
Comprising: |  |  |  |
Non-current payables |  |  |  |
Trade and other payables | 730,282 | 239,197 | - | -
Current payables |  |  |  |
Trade and other payables | 32,836,912 | 30,572,267 | 1,017,035 | 701,377
The carrying values of financial liabilities are considered to be a reasonable approximation of fair value.
No interest is charged on trade and other payables.

34 Contract liabilities
| The group | The group
| 2022 | 2021
| € | €
Deferred service income on rendering of services and development | 627,978 | 314,046
Deferred service income on maintenance, support and servicing | 1,471,418 | 2,154,388
Deferred service income on other gateway income and access fees | 74,746 | 95,356
Deferred service income on licences | - | 80,428
Deferred income on sale of information technology solutions | 1,542,635 | 1,466,498
| 3,716,777 | 4,110,716
Deferred service income represents customer payments received or due in advance of performance (contract liabilities) that are expected to be recognised as revenue in the future. As described in note 4.11, maintenance, servicing and support contracts are entered into for periods between 1 and 5 years. On the other hand, consultancy and development of IT systems are usually completed within 12 months. Nevertheless, the Group may occasionally have projects for consultancy and development of IT systems that span over more than 12 months.
Two new major contracts were awarded to one of Harvest’s subsidiaries in quarter four of 2022 which are expected to be completed over the next five years. The movement in Contract liabilities illustrated above, substantially pertains to invoices raised before the year-end for works to be carried out in the future, in relation to these contracts.

35 | Other financial liabilities
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Amounts owed to ultimate parent | 4,114,275 | 239,026 | 4,037,480 | 27,213
Amounts owed to joint venture | - | - | - | -
Amounts owed to other related parties | - | 3,545,298 | 2,372,679 | 3,545,322
Amounts owed to subsidiaries | - | - | - | -
Amounts owed to group companies | - | - | - | 4,361,050
| 4,114,275 | 3,784,324 | 6,410,159 | 7,933,585
Comprising: |  |  |  |
Non-current liabilities |  |  |  |
Other financial liabilities | 4,114,275 | 211,779 | 4,863,789 | 2,282,655
Current liabilities |  |  |  |
Other financial liabilities | - | 3,572,545 | 1,546,370 | 5,650,930
The terms and conditions of amounts owed to the parent and other related parties are disclosed in note 39.

# 36 Deferred tax assets and liabilities
Deferred tax arising from temporary differences are summarised as follows:

The group |  | 1 Jan 2022 | Recognised in profit or loss | 31 Dec 2022
|  | € | € | €
Deferred tax assets arising on: |  |  |  |
Plant and equipment |  | 219,560 | (36,707) | 182,853
Unabsorbed capital allowances |  | 118,474 | (604) | 117,870
Unabsorbed tax losses |  | 87,022 | 96,386 | 183,408
Provisions |  | 762,107 | 245,429 | 1,007,536
Other temporary differences |  | 373,017 | 80,469 | 453,486
Total |  | 1,560,180 | 384,973 | 1,945,153
Deferred tax liabilities arising on: |  |  |  |
Intangible assets |  | (281,594) | (20,366) | (301,960)
Plant and equipment |  | (424,988) | 35,163 | (389,825)
Provisions |  | (168,745) | (1,623) | (170,368)
Other temporary differences |  | (387,684) | 13,163 | (374,521)
Total |  | (1,263,011) | 26,337 | (1,236,674)

At 31 December 2022, the deferred tax asset recognised amounting to € 1.9 million (2021: € 1.6 million), comprises of an amount of € 0.4 million (2021: € 0.4 million) arising in the Harvest Technology division, € 0.9 million (2021: € 0.8 million) in the iSpot division, € 0.1 million (2021: € 0.1 million) in the Hili Logistics division and € 0.3 million (2021: € 0.3 million) in 1923 Investments Plc and € 0.2 million in E-Lifecycle Holdings GmbH.
With respect to the deferred tax asset balance arising in all divisions, the group has sufficient information to conclude that all of the deferred tax assets will be recovering in the future.
With respect to the iSpot division, the results continue to show significant growth in profitability which re-assures the directors of the company that the deferred tax asset balance will be recovered in the foreseeable future. The directors also believe that the growth trajectory at iSpot will continue in the foreseeable future.

Deferred taxes for the period 2021 can be summarised as follows:

The group |  | 1 Jan 2021 | Recognised in profit or loss | 31 Dec 2021
|  | € | € | €
Deferred tax assets arising on: |  |  |  |
Plant and equipment |  | 204,124 | 15,436 | 219,560
Unabsorbed capital allowances |  | 125,467 | (6,993) | 118,474
Unabsorbed tax losses |  | 137,837 | (50,815) | 87,022
Provisions |  | 803,616 | (41,509) | 762,107
Other temporary differences |  | 336,840 | 36,177 | 373,017
Total |  | 1,607,884 | (47,704) | 1,560,180
Deferred tax liabilities arising on: |  |  |  |
Intangible assets |  | (292,351) | 10,757 | (281,594)
Plant and equipment |  | (446,858) | 21,870 | (424,988)
Provisions |  | (130,910) | (37,835) | (168,745)
Other temporary differences |  | (379,446) | (8,238) | (387,684)
Total |  | (1,249,565) | (13,446) | (1,263,011)
The company |  | 1 Jan 2022 | Recognised in profit or loss | 31 Dec 2022
|  | € | € | €
Deferred tax assets arising on: |  |  |  |
Unabsorbed capital allowances |  | 2,417 | 3,031 | 5,448
Provisions |  | 221,705 | 59,723 | 281,428
Plant and equipment |  | 261 | (1,329) | (1,068)
Unabsorbed tax losses |  | 81,556 | (81,558) | (2)
Total |  | 305,939 | (20,133) | 285,806
Deferred taxes for the comparative period 2021 can be summarised as follows:
|  | 1 Jan 2021 | Recognised in profit or loss | 31 Dec 2021
|  | € | € | €
Deferred tax assets arising on: |  |  |  |
Unabsorbed capital allowances |  | 1,421 | 996 | 2,417
Provisions |  | 197,601 | 24,104 | 221,705
Plant and equipment |  | 295 | (34) | 261
Unabsorbed tax losses |  | 101,945 | (20,389) | 81,556
Total |  | 301,262 | 4,677 | 305,939
See note 13 for information on the group’s and company’s tax expense.

37 | Cash flow adjustments and changes in working capital
The following non-cash flow adjustments and adjustments for changes in working capital have been made to profit before tax to arrive at operating cash flow:
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Adjustments: |  |  |  |
Depreciation and amortisation | 3,168,959 | 2,856,614 | 4,599 | 2,747
Depreciation on right-of-use assets | 3,278,985 | 3,081,284 | - | -
Exchange differences | - | - | - | 68,866
Bad debts written off | 67,939 | 192,096 | - | -
Bond amortisation costs | 80,904 | 80,904 | 80,904 | 80,904
Movement in provision for doubtful debts | 64,039 | (282,861) | - | -
Related party interest income | (66,091) | (73,141) | - | -
Share of profit of associated undertakings | (801,711) | (684,324) | - | -
(Loss)/Gain on termination of leases | 19,595 | (521,088) | - | -
(Profit) loss on disposal of intangibles and property, plant and equipment | (126) | 56,235 | - | -
Share of profits in joint ventures | (328,017) | (139,558) |  | -
Impairment of investment in subsidiaries | - | - | - | -
Inventory writeoffs and provision movements | 70,202 | 221,181 | - | -
Interest on leasing arrangements | 450,472 | 321,165 | - | -
Interest payable | 3,034,216 | 3,183,245 | 2,363,944 | 2,678,005
Lease payments waived by lessors | - | - | - | -
Other finance costs | - | - | 97,064 | 64,219
Dividends receivable | - | - | (5,077,466) | (3,820,882)
Interest income | - | - | (1,290,833) | (1,606,244)
| 9,039,366 | 8,291,752 | (3,821,788) | (2,532,385)
Working capital: |  |  |  |
Change in inventories | (8,037,586) | (1,623,251) | - | -
Change in trade and other receivables | (5,260,964) | (5,559,772) | (13,200) | 149,861
Change in trade and other payables | 3,130,286 | 8,603,029 | 324,306 | (400,913)
Change in contract assets | 179,372 | 1,086,734 | - | -
Changes in contract liabilities | (393,939) | 2,795,470 | - | -
| (10,382,831) | 5,302,210 | 311,106 | (251,052)

38 | Reconciliation of liabilities arising from financing activities
The table below details changes in the company’s and the group’s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the consolidated Statement of Cash Flows as cash from financing activities.
The group | Notes | Balance at 31 December 2021 | Cash flows | Other non-cash changes | Balance at 31 December 2022
|  | € | € | € | €
Leases | 19 | 11,916,774 | (3,810,050) | 3,458,203 | 11,564,927
Bank loans | 32 | 8,224,799 | 373,450 | - | 8,598,249
Amounts owed to other related parties | 35 | 3,500,000 | 500,000 | - | 4,000,000
|  | 23,641,573 | (2,936,600) | 3,458,203 | 24,163,176

During 2022, the group recognised additional lease liabilities amounting to € 3,007,731. Total cash payments made on leases during the year amounted to € 3,810,050 (inclusive of interest). The interest expense during the year amounted to € 450,472. In addition, the group had other non-cash movements amounting to € 19,595 relating to the termination of leases as disclosed in note 18. The interest, together with the additions and termination of leases recognised during the year, represent the non-cash movements of € 3,458,203 presented above for leases.
The table below details changes in the group’s liabilities arising from financing activities for the preceding accounting period:

The group | Notes | Balance at 31 December 2020 | Cash flows | Other non-cash changes | Balance at 31 December 2021
|  | € | € | € | €
Leases | 19 | 8,839,612 | (2,749,383) | 5,826,545 | 11,916,774
Bank loans | 32 | 2,398,570 | 5,826,229 | - | 8,224,799
Amounts owed to other related parties | 35 | 11,000,000 | (7,500,000) | - | 3,500,000
|  | 22,238,182 | (4,423,154) | 5,826,545 | 23,641,573

During 2021, the group recognised additional lease liabilities amounting to € 7,327,130. Total cash payments made on leases during the year amounted to € 2,749,383 (inclusive of interest). The interest expense during the year amounted to € 321,165. In addition, the group had other non-cash movements amounting to € 1,821,750 relating to the termination of leases as disclosed in note 18. The interest, together with the additions and termination of leases recognised during the year, represent the non-cash movements of € 5,826,545 presented above for leases.

The company | Notes | Balance at 31 December 2021 | Cash flows | Other non-cash changes | Balance at 31 December 2022
|  | € | € | € | €
Bank loans | 32 | 8,224,799 | (1,472,500) | - | 6,752,299
Amounts owed to other related parties | 35 | 3,500,000 | 500,000 | - | 4,000,000
|  | 11,724,799 | (972,500) | - | 10,752,299

The table below details changes in the company’s liabilities arising from financing activities for the preceeding accounting period:

The company | Notes | Balance at 31 December 2020 | Cash flows | Other non-cash changes | Balance at 31 December 2021
|  | € | € | € | €
Bank loans | 32 | 2,106,373 | 6,118,426 | - | 8,224,799
Amounts owed to other related parties | 35 | 11,000,000 | (7,500,000) | - | 3,500,000
|  | 13,106,373 | (1,381,574) | - | 11,724,799

39 | Related party transactions
1923 Investments p.l.c. is the parent company of the subsidiary undertakings highlighted in note 20. The parent company of 1923 Investments p.l.c. is Hili Ventures Limited which is incorporated in Malta. The registered office of Hili Ventures Limited, being the undertaking which draws up the consolidated financial statements of the smallest body of undertakings of which 1923 Investments p.l.c. forms part as a subsidiary undertaking, is Nineteen Twenty-Three, Valletta Road, Marsa, MRS 3000, Malta, from where the above consolidated financial statements may be obtained.
During the year under review, the group entered into transactions with related parties as set out below:
| 2022 | 2021
The group | Related party activity | Total activity |  | Related party activity | Total activity |
| € | € | % | € | € | %
Revenue: |  |  |  |  |  |
Related party transactions with: |  |  |  |  |
Ultimate parent company | 162,441 |  |  | 92,310 |  |
Group Companies | 81,016 |  |  | 100,364 |  |
Other related parties | 294,432 |  |  | 376,188 |  |
| 537,889 | 232,714,394 | 1 | 568,862 | 172,154,948 | 1
Cost of sales: |  |  |  |  |  |
Related party transactions with: |  |  |  |  |
Ultimate parent company | 15,898 |  |  | 1,210 |  |
Group Companies | - |  |  | 110 |  |
Other related parties | 3,402 |  |  | (4,380) |  |
| 19,300 | 200,457,517 | 1 | (3,060) | 144,955,947 | 1
Administrative expenses: |  |  |  |  |  |
Related party transactions with: |  |  |  |  |
Ultimate parent company | 600,490 |  |  | 613,623 |  |
Group Companies | - |  |  | 319,981 |  |
Other related parties | 45,841 |  |  | - |  |
| 646,331 | 20,286,959 | 3 | 933,604 | 16,770,188 | 6
Investment income: |  |  |  |  |  |
Related party transactions with: |  |  |  |  |
Parent company | 35,795 |  |  | 51,822 |  |
Other related parties | 30,296 |  |  | 21,319 |  |
| 66,091 | 66,091 | 100 | 73,141 | 73,141 | 100
Finance cost: |  |  |  |  |  |
Related party transactions with: |  |  |  |  |
Parent company | 100,972 |  |  | - |  |
Group Companies | - |  |  | 40,963 |  |
Other related party | 90,783 |  |  | - |  |
| 191,755 | 3,911,870 | 5 | 40,963 | 3,585,314 | 1
The company |  |  |  |  |  |
Revenue: |  |  |  |  |  |
Related party transactions with: |  |  |  |  |
Other related parties | 1,110,000 |  |  | 1,010,000 |  |
| 1,110,000 | 1,110,000 | 100 | 1,010,000 | 1,010,000 | 100
Investment income: |  |  |  |  |  |
Related party transactions with: |  |  |  |  |
Ultimate parent | 35,795 |  |  | 51,821 |  |
Subsidiaries | 1,255,038 |  |  | 1,554,423 |  |
Subsidiaries (dividends) | 5,077,466 |  |  | 3,820,882 |  |
| 6,368,299 | 6,368,299 | 100 | 5,427,126 | 5,427,126 | 100
Administrative expenses: |  |  |  |  |  |
Related party transactions with: |  |  |  |  |
Ultimate parent company | 600,000 |  |  | 600,000 |  |
| 600,000 | 2,206,601 | 28 | 600,000 | 1,830,422 | 33
Finance cost: |  |  |  |  |  |
Related party transactions with: |  |  |  |  |
Ultimate parent company | 100,972 |  |  | - |  |
Subsidiaries | 61,042 |  |  | 70,169 |  |
Other related parties | 67,938 |  |  | 677,380 |  |
| 229,952 | 2,541,914 | 9 | 747,549 | 2,891,994 | 26

# 40 Contingent liabilities
During the year, one of the Group’s subsidiaries within the Harvest Technologies Group had issued special guarantees totalling € Nil (2021: € 146,189) in favour of third parties in relation to the major overseas technology implementation project carried out in collaboration with IBM in Mauritius. The same subsidiary also had guarantees amounting to €572,570 (2021: € 1,216,289) to third parties in Malta as collateral for liabilities. SAD sp. z o.o. (“SAD”), a Polish subsidiary of iSpot sp. z o.o. (“iSpot”), is subject to tax proceedings regarding the correctness of its VAT settlements for February 2015 and for March to July 2015. In the statement of grounds, the Polish tax authorities (“TA”) invoked SAD’s alleged failure to exercise due diligence in verifying its contractors. Regarding the tax proceedings for February 2015, on 25 April 2019, the TA issued a decision in which it denied SAD the right to deduct VAT in the amount of PLN 6,031,627 (equivalent to €1,288,589) and determined an additional amount of VAT liability of PLN 2,604,732 (equivalent to €556,472). With respect to the tax proceedings for March to July 2015, on 17 November 2021, the TA issued a decision in which it determined SAD’s VAT liability of PLN 16,891,886 (equivalent to €3,608,760). In order to avoid being charged further interest, the Management Board of SAD decided to deposit an amount equivalent to the VAT being claimed by the Polish Tax Authority , resulting from the February as well as the March to July 2015 assessments. On 23 December 2022, SAD paid an amount of PLN 27,478,176 (equivalent to €5,870,402) to the tax authorities, which consisted of the VAT liability for the February as well as the March-July 2015 assessments in the amount of PLN 15,525,829 (equivalent to € 3,316,918) plus interest, in addition to amounts already paid. The total value of assets subject to both proceedings for February 2015 and March to July 2015 in SAD’s books is PLN 35,616,100 (equivalent to € 7,608,977) as at the balance sheet date is shown in note 23 to these financial statements. For both proceedings, SAD disagrees with the position of the TA and appealed the decisions. Counterparty verification procedures applied by SAD in 2015 were not less strict than those used in 2012-2013 and it worth noting that, following tax proceedings for Q4 2012 and for May to June 2013, the TA stated that SAD exercised due diligence in verifying its contractors. On 30 January 2023, the Provincial Administrative Court in Warsaw issued a positive judgement in favour of SAD on points of administrative procedures in which it obliged the Director of the Tax Administration Chamber in Warsaw to assess whether the statute of limitations was effectively suspended in the case and provided the Tax Administration Chamber until 20 March 2023 to appeal the case. No appeal had been lodged by the set date. The tax authorities will have to collect new evidence to support their standpoint and if they do not, they will not be able to successfully challenge SAD’s VAT settlements. In the opinion of SAD management and its tax advisers and based on the positive judgement above, it is more likely than not that the tax disputes will be settled in favour of SAD, as in the case of previous audits covering such transactions; provided no new evidence from fiscal penal proceedings (suggesting the SAD’s participation in VAT fraud) is included in the case file. If the case resolution is favourable for SAD , the amount deposited will be returned along with the interest.
One of the group’s subsidiaries under the Apple retail business division in Poland signed an agreement with mBank on line guarantees and letters of credit in the amount of PLN 72,000,000 equivalent to € 15.381,986 (2021: € 15,662,729).
At the end of the reporting period, one of the group’s subsidiaries within the Hili Logistics division, together with other related parties provided guarantees in the amount of € 3,218,000 (2021: € 3,184,666) in relation to bank facilities granted. In the directors’ opinion no provision is required against such amounts as the principal borrowers are either not expected to default or such facilities are secured by property, plant and equipment or other guarantors.
At 31 December 2022, the group had an overdraft facility through Allcom, one of its subsidiaries in Poland, as disclosed in note 33 which was secured with a statement on the de minimis aid issued by BGK Bank (Bank Gospodarstwa Krajowego) that amounts to 80% of the facility limit amounting to PLN 1,600,000, equivalent to € 341,822 (2021: PLN 1,600,000, equivalent to € 348,061) and a blank promissory note in favour of Santander Bank Polska S.A.
Allcom has also provided a guarantee for a total of PLN 1,800,000, equivalent to € 384,550 (2021: PLN 1,800,000, equivalent to € 391,568) to the customs office in Poland, through a financial institution in the same country, to secure customs payments realised on behalf of its clients. The guarantee is secured on the company’s property in Bolszewo as contractual mortgage on perpetual usufruct of land and buildings for a total of PLN 2,340,000 (€ 499,915). There was no utilisation of the guarantee as at the end of the reporting periods.
No further material claims are to date known to exist against the company.

41 | Financial instrument risk
Risk management objectives and policies
The group is exposed to various risks in relation to financial instruments. The group’s financial assets and financial liabilities by category are summarised in note 41.4. The main types of risks are market risk, credit risk and liquidity risk.
The group’s risk management is coordinated by the directors and focuses on actively securing the group's short to medium term cash flows by minimising the exposure to financial risks.
The objectives, policies and processes for managing financial risks and the methods used to measure such risks are subject to continual improvement and development. Where applicable, any significant changes in the group’s exposure to financial risks or the manner in which the group manages and measures these risks are disclosed below.
Where possible, the group aims to reduce and control risk concentrations. Concentration of financial risk areas when financial instruments with similar characteristics are influenced in the same way by changes in economic or other factors. The amount of the risk exposure associated with financial instruments sharing similar characteristics is disclosed in more detail in the notes to the consolidated financial statements.
The group does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant financial risks to which the group is exposed are described below.
41.1 | Market risk analysis
Foreign currency risk
Foreign currency transactions arise when the group buys or sells goods or services whose price is denominated in a foreign currency, borrows or lends funds when the amounts payable or receivable are denominated in a foreign currency or acquires or disposes of assets, or incurs or settles liabilities, denominated in a foreign currency. Foreign currency transactions comprise mainly transactions in PLN, USD, GBP and RON .
The risk arising from foreign currency transactions is managed by regular monitoring of the relevant exchange rates and management’s reaction to material movements thereto.
Interest rate risk
The group and the company have debt securities in issue with a fixed coupon as disclosed in note 31, loans and receivables with a fixed coupon as disclosed in note 23, and cash at bank with a floating coupon as disclosed in note 27. The group has taken out interest bearing loans as disclosed in notes 32 and 35. The interest rates thereon and the terms of such borrowings and loans are disclosed accordingly.
The company and the group are exposed to cash flow interest rate risk on borrowings and debt instruments carrying a floating interest.
Management monitors the movement in interest rates and, where possible, reacts to material movements in such rates by adjusting its selling prices or by restructuring its financing structure.
The carrying amounts of the group’s and company’s financial instruments carrying a rate of interest at the end of the reporting period are disclosed in the notes to the financial statements.

41.2 | Credit risk analysis
Credit risk is the risk that a counterparty fails to discharge an obligation to the group. The group is exposed to credit risk from financial assets including cash and cash equivalents held at banks, trade and other receivables and loans and receivables. The group’s maximum exposure to credit risk is limited to the carrying amount of financial assets recognised at the reporting date, as summarised below:
| Notes | The group | The group | The company | The company
|  | 2022 | 2021 | 2022 | 2021
|  | € | € | € | €
Classes of financial assets - carrying amounts: |  |  |  |  |
Financial assets measured at amortised cost: |  |  |  |  |
Loans and receivables | 23 | 9,424,172 | 4,772,681 | 31,801,866 | 33,629,733
Trade and other receivables | 26 | 13,965,459 | 15,766,524 | - | -
Cash and cash equivalents | 27 | 10,312,277 | 9,666,172 | 727,660 | 1,297,371
|  | 33,701,908 | 30,205,377 | 32,529,526 | 34,927,104
Credit risk management
The credit risk is managed both at the level of each individual subsidiary as well as on a group basis, based on the group’s credit risk management policies and procedures.
Loans and receivables and certain trade receivables comprise amounts due from related parties. The group and company’s concentration to credit risk arising from these receivables are considered limited as there were no indications that these counterparties are unable to meet their obligations. Management considers these to be of good credit quality. Management does not consider loans and receivables to have deteriorated in credit quality and the effect of management’s estimate of the 12-month credit loss has been determined to be insignificant to the results of the group and the company.
The group and the company hold money exclusively with institutions having high quality external credit ratings. The cash and cash equivalents held with such banks at 31 December 2022 and 2021 are callable on demand. The banks with whom cash and cash equivalents are held form part of two international groups with an A credit rating by Standard and Poor’s and similar high ratings by other agencies. The group also holds cash with a local bank having a credit rating of BBB- by Standard and Poor’s. Cash held by the group with other local banks for which no credit rating is available are not significant. Management considers the probability of default from such banks to be close to zero and the amount calculated using the 12-month expected credit loss model to be very insignificant. Therefore, based on the above, no loss allowance has been recognised by the group and the company.
The group assesses the credit quality of its customers by taking into account their financial standing, past experience and other factors, such as bank references and the customers’ financial position.
Management is responsible for the quality of the group’s credit portfolios and has established credit processes involving delegated approval authorities and credit procedures, the objective of which is to build and maintain assets of high quality.
Individual risk limits are set in accordance with limits set by the board. The utilisation of credit limits is regularly monitored. Each new individual customer is analysed individually for creditworthiness before the company’s standard payment and delivery terms and conditions are offered. Purchase limits are established for each customer, which represents the maximum open amount without requiring approval from management. Customers that fail to meet the group’s benchmark creditworthiness may transact with the group only on a prepayment basis.

The group’s policy is to deal only with credit worthy counterparties. The credit terms is generally between 30 and 90 days. The credit terms for customers as negotiated with customers are subject to an internal approval process as abovementioned. The ongoing credit risk is managed through regular review of ageing analysis, together with credit limits per customer.
Trade receivables consist of a large number of customers in various industries and mainly in three geographical areas, namely in Malta, U.K. and Poland.
The Expected Credit Loss (ECL) at 31 December 2022 and 2021 was estimated based on a range of forecast economic scenarios as at that date.
Security
The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the group’s and the company’s maximum exposure to credit risk, without taking account of the value of the collateral obtained. Guarantees are disclosed in notes 32 and contingent liabilities are disclosed in note 40
In addition, the group does not hold collateral relating to other financial assets (eg derivative assets, cash and cash equivalents held with banks).
Trade receivables
The group applies the IFRS 9 simplified model of recognising lifetime expected credit losses for all trade receivables as these items do not have a significant financing component.
In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess shared credit risk characteristics. They have been grouped based on the days past due and also according to the geographical location of customers.
The expected loss rates are based on the payment profile for sales over the past 36 months before 31 December 2022 and 2021 respectively as well as the corresponding historical credit losses during that period. The historical rates are adjusted to reflect current and forwarding looking macroeconomic factors affecting the customer’s ability to settle the amount outstanding. The group has identified gross domestic product (GDP) and unemployment rates of the countries in which the customers are domiciled to be the most relevant factors and accordingly adjusts historical loss rates for expected changes in these factors. However given the short period exposed to credit risk, the impact of these macroeconomic factors has not been considered significant within the reporting period.
In addition to the above assessments on the recoverability and expected credit loss provisions on trade and other financial assets, the group has considered the effects of Covid-19 on the economies in which its customers are based, comprising mainly Malta, Poland and the UK, where significant business is being conducted. It has also taken into consideration the financial position of, and risk exposure to, large customers in order to determine whether the group’s credit risk has increased as a result of the pandemic. There are no particular indicators that suggest that the assessment of the expected credit risk model adopted by the group materially varies from expectations of collectability and previous patterns of payments from such customers. Furthermore, management has assessed the probability of default of significant amounts due from large customers individually, and consider such risk to be low in view of the creditworthiness of such customers. While the group continues to closely monitor all of its financial assets at more frequent intervals as a result of such events, management considers that the level of ECL provisions at period end remains adequate.

Trade receivables are written off (ie derecognised) when there is no reasonable expectation of recovery. Failure to make payments within 365 days from the invoice date and failure to engage with the group on alternative payment arrangement amongst others is considered indicators of no reasonable expectation of recovery.
On the above basis the expected credit loss for trade receivables as at 31 December 2022 and 31 December 2021 was determined as follows:

| Current | More than 30 days | More than 60 days | More than 90 days | Total
31 December 2022 |  |  |  |  |
Expected credit loss rate (%) | 0.15% | 0.72% | 6.96% | 8.80% | -
Gross carrying amount (€) | 5,028,034 | 2,856,507 | 845,613 | 2,634,650 | 11,364,804
Lifetime expected credit loss (€) | 7,380 | 20,443 | 58,857 | 231,950 | 318,630
31 December 2021 |  |  |  |  |
Expected credit loss rate (%) | 0.18% | 1.39% | 3.58% | 11.26% | -
Gross carrying amount (€) | 9,814,478 | 1,577,539 | 441,093 | 1,770,774 | 13,603,884
Lifetime expected credit loss (€) | 17,551 | 21,925 | 15,798 | 199,317 | 254,591

Changes in expected credit loss rates between reporting periods is attributable to change in circumstances, past ageing information, revised history of loss occurrences and actual losses recognised in the current year. The group however experiences very low levels of actual impairments arising from non-performing trade receivables and consequently management considers the lifetime expected credit losses to be adequate to the business of the group. The closing balance of the trade receivables loss allowance as at 31 December 2022 and 2021 reconciles with the trade receivables loss allowance opening balance as follows:
| The group | The group
| 2022 | 2021
| € | €
Opening loss allowance as at 1 January | 254,591 | 537,452
Loss allowance recognised (reversal of allowance) during the year | 594,788 | (65,973)
Reversal of loss allowance on impaired receivables written off | (5,516) | (192,096)
Reversal of allowance for credit losses no longer required | - | (24,792)
Loss allowance as at 31 December | 843,863 | 254,591

41.3 Liquidity risk
The group and company’s exposure to liquidity risk arises from its obligations to meet its financial liabilities, which comprise debt securities in issue, borrowings, trade and other payables and other financial liabilities (see notes 31, 32, 33 and 35). Prudent liquidity risk management includes maintaining sufficient cash to ensure the availability of an adequate amount of funding to meet the group’s and company’s obligations when they become due.
Liquidity risk is that the group and the company might be unable to meet its obligations. The group and the company manage their liquidity needs by monitoring scheduled debt servicing payments for long-term financial liabilities as well as forecast cash inflows and outflows due in day-to-day business. The data used for analysing these cash flows is consistent with that used in the contractual maturity analysis below. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis. Long-term liquidity needs for a 180-day and a 360-day lookout period are identified monthly. Net cash requirements are compared to available borrowing facilities in order to determine headroom or any shortfalls. This analysis shows that available borrowing facilities are expected to be sufficient over the lookout period.
The group’s and company’s objective is to maintain cash to meet their liquidity requirements for 30-day periods at a minimum. This objective was met for the reporting period. Funding for long-term liquidity needs is additionally secured by an adequate amount of committed credit facilities and the ability to sell long-term financial assets.
The following maturity analysis for financial liabilities shows the remaining contractual maturities using the contractual undiscounted cash flows on the basis of the earliest date on which the group and the company can be required to pay. The analysis includes both interest and principal cash flows:
The group
31 December 2022 | On demand or within 1 year | 1 - 2 years | 2 - 5 years | More than 5 years | Total
Non-derivative financial liabilities |  |  |  |  |
Non-interest bearing | 26,123,489 | - | - | - | 26,123,489
Fixed rate instruments | 4,114,961 | 44,662,612 | 3,504,505 | 53,559 | 52,335,637
Variable-rate instruments | 4,701,094 | - | - | - | 4,701,094
| 34,939,544 | 44,662,612 | 3,504,505 | 53,559 | 83,160,220
31 December 2021 |  |  |  |  |
Non-derivative financial liabilities |  |  |  |  |
Non-interest bearing | 25,313,875 | 239,197 | - | - | 25,553,072
Fixed rate instruments | 6,812,571 | 3,577,642 | 42,779,569 | 274,820 | 53,444,602
Variable-rate instruments | - | - | - | - | -
| 32,126,446 | 3,816,839 | 42,779,569 | 274,820 | 78,997,674
The company
31 December 2022 |  |  |  |  |
Non-derivative financial liabilities |  |  |  |  |
Non-interest bearing | 1,017,035 | - | - | - | 1,017,035
Fixed rate instruments | 4,907,053 | 43,494,145 | 4,330,814 | 53,559 | 52,785,571
| 5,924,088 | 43,494,145 | 4,330,814 | 53,559 | 53,802,606
31 December 2021 |  |  |  |  |
Non-derivative financial liabilities |  |  |  |  |
Non-interest bearing | 773,921 | - | - | - | 773,921
Fixed rate instruments | 8,812,571 | 3,365,839 | 42,779,569 | 2,557,475 | 57,515,454
| 9,586,492 | 3,365,839 | 42,779,569 | 2,557,475 | 58,289,375

41.4 Summary of financial assets and financial liabilities by category
The carrying amounts of the group’s financial assets and financial liabilities as recognised at the end of the reporting period may also be categorised as follows. See note 4.22 for explanations about how the category of financial instruments affects their subsequent measurement.
| The group | The group | The company | The company
| 2022 | 2021 | 2022 | 2021
| € | € | € | €
Non-current assets |  |  |  |
Loans and receivables | 9,418,878 | 1,744,946 | 26,750,380 | 23,828,586
Current assets |  |  |  |
Loans and receivables | 5,294 | 3,027,735 | 5,051,486 | 9,801,147
Trade and other receivables | 13,965,459 | 15,766,524 | - | -
Cash and cash equivalents | 10,312,277 | 9,666,172 | 727,660 | 1,297,371
| 24,283,030 | 28,460,431 | 5,779,146 | 11,098,518
Non-current liabilities |  |  |  |
Debt securities in issue | 35,839,176 | 35,758,272 | 35,839,176 | 35,758,272
Borrowings | 6,319,288 | 6,748,228 | 5,227,616 | 6,748,228
Trade and other payables | 730,282 | 239,197 | - | -
Other financial liabilities | 4,114,275 | 211,779 | 4,863,789 | 2,282,655
| 47,003,021 | 42,957,476 | 45,930,581 | 44,789,155
Current liabilities |  |  |  |
Borrowings | 6,980,055 | 1,476,571 | 1,524,683 | 1,476,571
Trade and other payables | 26,853,771 | 25,480,527 | 1,017,035 | 701,377
Other financial liabilities | - | 3,572,545 | 1,546,370 | 5,650,930
| 33,833,826 | 30,529,643 | 4,088,088 | 7,828,878
41.5 Financial instruments measured at fair value
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities • Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly • Level 3: unobservable inputs for the asset or liability.
At 31 December 2022 and 2021, except for debt securities in issue as disclosed in note 31, the carrying amounts of financial assets and financial liabilities classified with current assets and current liabilities respectively approximated their fair values due to the short-term maturities of these assets and liabilities.
The fair values of the debt securities in issue is as disclosed in note 31. The fair values of other non-current financial liabilities and the non-current loans and receivables are not materially different from their carrying amounts due to the fact that the interest rates are considered to represent market rates at the year-end or because they are repayable on demand. The fair values of the financial assets and financial liabilities included in the level 2 category above have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparties.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the company determines when transfers are deemed to have occurred between Levels in the hierarchy at the end of each reporting period.
The following table provides an analysis of financial instruments that are not measured subsequent to initial recognition at fair value, other than those with carrying amounts that are reasonable approximations of fair value, and other than investments in subsidiaries, associates and joint ventures, grouped into Levels 1 to 3.
The group
31 December 2022 | Level 1 | Level 2 | Level 3 | Total | Carrying amount
| € | € | € | € | €
Financial assets |  |  |  |  |
Loans and receivables |  |  |  |  |
Receivables from related parties | - | 9,424,172 | - | 9,424,172 | 9,424,172
| - | 9,424,172 | - | 9,424,172 | 9,424,172
Financial liabilities at amortised cost |  |  |  |  |
Related party loans | - | 4,114,275 | - | 4,114,275 | 4,114,275
Bank overdrafts and loans | - | 13,299,343 | - | 13,299,343 | 13,299,343
Debt securities in issue | 36,180,000 | - | - | 36,180,000 | 35,839,176
| 36,180,000 | 17,413,618 | - | 53,593,618 | 53,252,794
31 December 2021 |  |  |  |  |
Financial assets |  |  |  |  |
Loans and receivables |  |  |  |  |
Receivables from related parties | - | 4,772,681 | - | 4,772,681 | 4,772,781
| - | 4,772,681 | - | 4,772,681 | 4,772,681
Financial liabilities at amortised cost |  |  |  |  |
Related party loans | - | 3,784,324 | - | 3,784,324 | 3,784,324
Bank overdrafts and loans | - | 8,224,799 | - | 8,224,799 | 8,224,799
Debt securities in issue | 36,720,000 | - | - | 36,720,000 | 35,758,272
| 36,720,000 | 12,009,123 | - | 48,729,123 | 47,767,395

The company
31 December 2022 | Level 1 | Level 2 | Level 3 | Total | Carrying amount
| € | € | € | € | €
Financial assets |  |  |  |  |
Loans and receivables |  |  |  |  |
Receivables from related parties | - | 31,801,866 | - | 31,801,866 | 31,801,866
| - | 31,801,866 | - | 31,801,866 | 31,801,866
Financial liabilities at amortised cost |  |  |  |  |
Related party loans | - | 6,410,159 | - | 6,410,159 | 6,410,159
Bank Loans | - | 6,752,299 | - | 6,752,299 | 6,752,299
Debt securities in issue | 36,180,000 | - | - | 36,180,000 | 35,839,176
| 36,180,000 | 13,162,458 | - | 49,342,458 | 49,001,634
31 December 2021 |  |  |  |  |
Financial assets |  |  |  |  |
Loans and receivables |  |  |  |  |
Receivables from related parties | - | 33,629,733 | - | 33,629,733 | 33,629,733
| - | 33,629,733 | - | 33,629,733 | 33,629,733
Financial liabilities at amortised cost |  |  |  |  |
Related party loans | - | 7,933,585 | - | 7,933,585 | 7,933,585
Bank Loans | - | 8,224,799 | - | 8,224,799 | 8,224,799
Debt securities in issue | 36,720,000 | - | - | 36,720,000 | 35,758,272
| 36,720,000 | 16,158,384 | - | 52,878,384 | 51,916,656

42 | Capital risk management
The group’s and the company’s objectives when managing capital are to safeguard its ability to continue as a going concern and to maximise the return to stakeholders through the optimisation of the debt and equity balance.
The capital structure of the group and the company consists of debt, which includes the debt securities in issue, borrowings and other financial liabilities disclosed in notes 31, 32 and 35, cash and cash equivalents as disclosed in note 27 and of items presented within equity in the statement of financial position.
The group’s directors manage the capital structure and make adjustments to it, in light of changes in economic conditions. The capital structure is reviewed on an ongoing basis. Based on recommendations of the directors, the group balances its overall capital structure through the payments of dividends, new share issues as well as the issue of new debt or the redemption of existing debt.

43 | Post reporting date events
On 31 st March 2023, iSpot has wholly acquired Cortland Sp. Z.o.o. at an acquisition price of € 42,800,000. Cortland is an Applie Premim Reseller with a chain of 16 stores around Poland and a staff complement of 180 employees. The combined business will boast a network of 47 Apple Premium Resellers and service points in some of the best locations in major Polish cities, with a team of 600 people. Both iSpot and Cortland are enjoying strong sales growth, and so this is an exciting time and an opportunity to maximise our commercial potential. There were no other significant adjusting or non-adjusting events that have occurred between the end of the reporting period and the date of authorisation by the board.

44 Immediate and ultimate parent company and controlling party
The immediate and ultimate parent company of 1923 Investments p.l.c. is Hili Ventures Limited. The registered office of Hili Ventures Limited is Nineteen Twenty Three, Valletta Road, Marsa, MRS 3000, Malta.
The directors consider the ultimate controlling party to be Mr Carmelo (sive Melo) Hili, who, through his interest in Hili Ventures Limited, as of 31 December 2022 holds 100% (2021: 100%) of the voting rights in 1923 Investments p.l.c.

#

# # Independent auditor’s report To the shareholders of 1923 Investments p.l.c. Report on the audit of the financial statements Opinion We have audited the financial statements of 1923 Investments p .l.c. (the “Company”) and of the Group of which it is the parent, which comprise the statements of financial position as at 31 December 2022, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information. In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company and the Group as at 31 December 2022, and of their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) , and have been properly prepared in accordance with the requirements of the Companies Act, Cap. 386 (the “Act”). Our opinion is consistent with our additional report to the audit committee. 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 Company and the Group in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements of the Accountancy Profession (Code of Ethics for Warrant Holders) Directive issued in terms of the Accountancy Profession Act, Cap. 281 that are relevant to our audit of the financial statements in Malta. We have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. In conducting our audit we have remained independent of the Company and the Group and have not provided any of the non-audit services prohibited by article 18A of the Accountancy Profession Act, Cap. 281. The non-audit services that we have provided to the Company and the Group during the year ended 31 December 2022 are disclosed in note 10 to the financial statements. 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 and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Impairment testing of goodwill and intangible assets in the consolidated financial statements Key audit matter Goodwill with a carrying amount of € 63.3 million and intangible assets having a carrying amount of € 12.1 million as at 31 December 2022 are included on the Group’s Statement of Financial Position as at that date. Management is required to perform an assessment at least annually to establish whether goodwill and intangible assets that have an indefinite useful life should continue to be recognised, or if any impairment is required. The assessment was performed at the lowest level at which the Group could allocate and assess goodwill, which is referred to as a cash generating unit (‘CGU’). The impairment assessment was based on the calculation of a value-in-use for each of the CGUs. This calculation was based on estimated future cash flows for each CGU, including assumptions concerning revenue growth, profit margins, weighted average cost of capital and effective tax rates. Estimating future profitability requires the directors to apply significant judgements which include estimating future taxable profits, long term growth and discount rates. The estimation of future cash flows and the level to which they are discounted is inherently uncertain and requires judgement. We focussed on this area because of the significance of the amounts of goodwill and intangible assets with indefinite useful life acquired in business combinations made by the Group up to 31 December 2022 which are recognised at balance sheet date. Moreover, the directors’ assessment process is complex and highly judgmental and is based on assumptions which are affected by expected future market or economic conditions. How the key audit matter was addressed in our audit We evaluated the suitability and appropriateness of the impairment methodology applied by management and engaged our internal valuation specialist resources to assess the reliability of the directors’ forecasts and to challenge the methodology used and the underlying assumptions. We concluded that the parameters utilised were reasonable. We communicated with management and those charged with governance and noted that they were able to provide satisfactory responses to our questions. We also assessed the adequacy of the disclosures made in notes 4.28 of the financial statements relating to goodwill including those regarding the key assumptions used in assessing its carrying amount. Those disclosures specifically explain that the directors have assessed the carrying amount of goodwill and intangible assets with an indefinite useful life as at 31 December 2022 and concluded that no impairment charge in the value of the goodwill was required. The directors concluded that the carrying amount of intangible assets with an indefinite useful life is recoverable and consequently no impairment charge is required. Assessment of carrying amount of investments in subsidiaries and other investments in the Company’s financial statements Key audit matter During the year ended 31 December 2022 management carried out an assessment to establish whether the carrying amount of investments in subsidiaries and other investments in the financial statements of the Company at 31 December 2022 should continue to be recognised, or if any impairment is required. We focussed on this area because of the significance of the investments in subsidiaries which at 31 December 2022, amounted € 68 million. Moreover, the directors’ assessment process is complex and highly judgmental and is based on assumptions, such as forecast growth rates, profit margins, weighted average cost of capital and effective tax rate, which are affected by expected future market or economic conditions. How the key audit matter was addressed in our audit We evaluated the suitability and appropriateness of the impairment methodology applied by management and engaged our internal valuation specialist resources to assess the reliability of the directors’ forecasts and to challenge the methodology used and the underlying assumptions. We concluded that the parameters utilised were reasonable. We communicated with management and those charged with governance and noted that they were able to provide satisfactory responses to our questions. We also assessed the adequacy of the disclosures made in note 4.28 of the financial statements relating to investments including those regarding the key assumptions used in assessing its carrying amount. Those disclosures specifically explain that the directors have assessed the carrying amount of investments as at 31 December 2022 and concluded that no impairment charge in the company’s investments in subsidiaries was required. Other information The directors are responsible for the other information. The other information comprises (i) the Directors’ report, (ii) the Statement of responsibility pursuant to the Capital Market Rules issued by the Malta Financial Services Authority, (iii) the Corporate Governance statement and (iv) the Other Disclosures in terms of the Capital Market Rules which we obtained prior to the date of this auditor’s report, but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information, including the Directors’ report. In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect to the Directors’ report, we also considered whether the Directors’ report includes the disclosures required by Article 177 of the Act. Based on the work we have performed, in our opinion:
• | Non-financial statement in the Directors’ report:
- | The Directors’ report includes non-financial information in line with the requirements of paragraphs 8 and 11 of the Sixth Schedule to the Act. The proviso to sub-article 179(3) of the Act requires us to check whether such information is provided, but not to express any comment thereon.
• | Information in the Directors’ report other than the non-financial statement:
- | The information given in the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements, and the Directors’ report has been prepared in accordance with the Act. 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. We have nothing to report in this regard.
Responsibilities of the directors those charged with governance for the financial statements The directors are responsible for the preparation of financial statements that give a true and fair view in accordance with IFRS as adopted by the EU and are properly prepared in accordance with the provisions of the Act, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Company’s and the Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s and the Group’s financial reporting process. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with the ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
- | Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s and Group’s internal control.
- | Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- | Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s and 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, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company’s or the Group’s ability to continue as a going concern. In particular, it is difficult to evaluate all the potential implications that the current conflict in Ukraine may have on the Group’s business.
- | 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 and opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with the relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefit of such communication. Reports on other legal and regulatory requirements Report on compliance with the requirements of the European Single Electronic Format Regulatory Technical Standard (the “ESEF RTS”), by reference to Capital Markets Rule 5.55.6 We have undertaken a reasonable assurance engagement in accordance with the requirements of Directive 6 issued by the Accountancy Board in terms of the Accountancy Profession Act (Cap. 281) - the Accountancy Profession (European Single Electronic Format) Assurance Directive (the “ESEF Directive 6”) on the Report and Consolidated Financial Statements of 1923 Investments p.l.c. for the year ended 31 December 2022, entirely prepared in a single electronic reporting format. Responsibilities of the directors The directors are responsible for the preparation of the Report and 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 Report and 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 Report and Consolidated Financial Statements , in accordance with the requirements of the ESEF RTS.
- | Obtaining the Report and Consolidated Financial Statements and performing validations to determine whether the Report and Consolidated Financial Statements have been prepared in accordance with the requirements of the technical specifications of the ESEF RTS.
- | Examining the information in the Report and Consolidated Financial Statements 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 Report and Consolidated Financial Statements for the year ended 31 December 2022 has been prepared, in all material respects, in accordance with the requirements of the ESEF RTS. Report on the Statement of Compliance with the Principles of Good Corporate Governance The Capital Market Rules require the directors to prepare and include in their Annual Report a Statement of Compliance providing an explanation of the extent to which they have adopted the Code of Principles of Good Corporate Governance and the effective measures that they have taken to ensure compliance throughout the accounting period with those Principles. The Capital Market Rules also require us, as the auditor of the Company, to include a report on the Statement of Compliance prepared by the directors. We read the Statement of Compliance with the Code of Principles of Good Corporate Governance and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements included in the Annual Report. Our responsibilities do not extend to considering whether this statement is consistent with any other information included in the Annual Report. We are not required to, and we do not, consider whether the Board’s statements on internal control included in the Statement of Compliance with the Code of Principles of Good Corporate Governance cover all risks and controls, or form an opinion on the effectiveness of the Company’s corporate governance procedures or its risk and control procedures. In our opinion, the Corporate governance statement has been properly prepared in accordance with the requirements of the Capital Market Rules. Other matters on which we are required to report by exception We also have responsibilities
• | under the 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
- | certain disclosures of directors’ remuneration specified by law are not made in the financial statements, giving the required particulars in our report.
• | in terms of Capital Market Rules to review the statement made by the Directors that the business is a going concern together with supporting assumptions or qualifications as necessary.
We have nothing to report to you in respect of these responsibilities. Auditor tenure We were first appointed as auditors of the Company and the Group on 14 November 2017. Our appointment has been renewed annually by a shareholders’ resolution representing a total period of uninterrupted engagement appointment of six years. The engagement partner on the audit resulting in this independent auditor’s report is Mark Bugeja. Grant Thornton Fort Business Centre Triq L-Intornjatur, Zone 1 Central Business District Birkirkara CBD 1050 Malta Mark Bugeja Partner 20 April 2023

[1] Note: At the time of reporting, the official NACE codes for E-Lifecycle Holding GmbH had not yet been officially assigned, thus relevant NACE codes based on the general economic activities performed were utilized for the purpose of taxonomy reporting.