391200C8XW0F6K1ROJ82 2022-01-01 2022-12-31 391200C8XW0F6K1ROJ82 2022-12-31 391200C8XW0F6K1ROJ82 2021-01-01 2021-12-31 391200C8XW0F6K1ROJ82 2021-12-31 391200C8XW0F6K1ROJ82 2020-01-01 2020-12-31 391200C8XW0F6K1ROJ82 2020-12-31 391200C8XW0F6K1ROJ82 2022-01-01 2023-12-31 391200C8XW0F6K1ROJ82 2023-12-31 391200C8XW0F6K1ROJ82 2021-01-01 2022-12-31 391200C8XW0F6K1ROJ82 2020-01-01 2021-12-31 391200C8XW0F6K1ROJ82 2021-01-01 2021-12-31 ifrs-full:RetainedEarningsMember 391200C8XW0F6K1ROJ82 2021-01-01 2021-12-31 ifrs-full:OtherReservesMember 391200C8XW0F6K1ROJ82 2021-01-01 2021-12-31 ifrs-full:OtherEquityInterestMember 391200C8XW0F6K1ROJ82 2022-01-01 2022-12-31 ifrs-full:OtherReservesMember 391200C8XW0F6K1ROJ82 2022-12-31 ifrs-full:RetainedEarningsMember 391200C8XW0F6K1ROJ82 2021-01-01 2021-12-31 ifrs-full:IssuedCapitalMember 391200C8XW0F6K1ROJ82 2022-01-01 2022-12-31 ifrs-full:RetainedEarningsMember 391200C8XW0F6K1ROJ82 2022-01-01 2022-12-31 ifrs-full:OtherEquityInterestMember 391200C8XW0F6K1ROJ82 2020-12-31 ifrs-full:RetainedEarningsMember 391200C8XW0F6K1ROJ82 2021-12-31 ifrs-full:OtherReservesMember 391200C8XW0F6K1ROJ82 2021-12-31 ifrs-full:RetainedEarningsMember 391200C8XW0F6K1ROJ82 2020-12-31 ifrs-full:OtherReservesMember 391200C8XW0F6K1ROJ82 2020-12-31 ifrs-full:OtherEquityInterestMember 391200C8XW0F6K1ROJ82 2021-12-31 ifrs-full:IssuedCapitalMember 391200C8XW0F6K1ROJ82 2022-01-01 2022-12-31 ifrs-full:IssuedCapitalMember 391200C8XW0F6K1ROJ82 2022-12-31 ifrs-full:OtherReservesMember 391200C8XW0F6K1ROJ82 2022-12-31 ifrs-full:IssuedCapitalMember 391200C8XW0F6K1ROJ82 2020-12-31 ifrs-full:IssuedCapitalMember 391200C8XW0F6K1ROJ82 2022-12-31 ifrs-full:OtherEquityInterestMember 391200C8XW0F6K1ROJ82 2021-12-31 ifrs-full:OtherEquityInterestMember ISO4217:EUR ISO4217:EUR xbrli:shares
Company registration no.: C 82098
JD CAPITAL PLC
Annual Report
and
Consolidated Financial Statements
31 December 2022
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
CONTENTS
Pages
General information
3
Directors' report
4 - 7
Statement of compliance with the principles of good corporate governance
8 - 11
Statements of comprehensive income
12
Statements of financial position
13
Statements of changes in equity
14
Statements of cash flows
15
Notes to the financial statements
16 - 47
Independent auditor's report 48 - 55
_____________________________________
_____________________________________
2
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
GENERAL INFORMATION
Registration
Directors
Josef Dimech
Jesmond Manicaro (appointed on 7 September 2022)
Stephen Muscat
Jonathan Pace (appointed on 7 September 2022)
Stanley Portelli
Gaetano Vella (resigned on 7 September 2022)
Company secretary
Malcolm Falzon (appointed on 1 February 2023)
Jesmond Manicaro (resigned on 1 February 2023)
Registered office
HHF 303 Industrial Estate
Hal Far
Birzebbugia BBG 3000
Malta
Bankers
Bank of Valletta p.l.c. Izola Bank p.l.c.
58, Zachary Street 53/58, East Street
Valletta VLT 1130 Valletta VLT 1251
Malta Malta
Auditors
RSM Malta
Mdina Road
Zebbug ZBG 9015
Malta
JD Capital PLC isregistered in Malta as a public limited liability company under the Companies Act (Cap. 386).
The Company's registration number is C 82098.
_____________________________________
_____________________________________
3
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
DIRECTORS' REPORT
Principal activity
Performance review
As
at
31
December
2022,
the
Group's
total
assets
amounted
to
€57,486,130
(2021:
€47,280,206)
and
net
assets amounted to €16,805,112 (2021: €16,586,795).
The directors submit their report and the audited financial statements of JD Capital PLC ("the Company")
and the audited consolidated financial statements of the Company and its subsidiaries (together, "the
Group") for the year ended 31 December 2022.
The Company's principal activity is to act as a holding company and to provide financing to its subsidiaries.
The
Group
is
engaged
in
the
business
of
providing
aluminium,
steel,
wrought
iron,
large
scale
glass
formats,
and stainless-steel works, as well as the construction of steel structures. The Group also holds an
investment property.
During the year under review, the Group made a profit before tax of €417,526 (2021: €468,117). For the
same year, the Company made a loss before tax of €237,189 (2021: €3,649).
As
at
31
December
2022,
the
Company's
total
assets
amounted
to
€21,212,341
(2021:
€12,644,562)
and
net assets amounted to €7,258,642 (2021: €7,495,632).
During 2022, a war between Ukraine & Russia was registered. The Company has not made any sales
overseasanditdoes nothaveanycontracts for rawmaterials in Ukraineor Russia. Furthermore, noneof
the Company's clients, which are Malta-based have suspended their projects or cancelled orders.
Meanwhile, management has assessed that the war has resulted in an increase in raw material prices
around Europe, however this has not left any outstanding impact on the financial statements nor any
outstandinguncertaintieswithrespecttoeventsorconditionswhichmayimpacttheCompanyunfavourably
as at the reporting period or subsequently as a result of a prolonged war.
Despite
these
significant
challenges,
coupled
with
a
decrease
in
revenue
of
27%
when
compared
to
the
previous year, the Group still managed to obtain positive results as it was able to: (1) increase its profit
beforetaxasapercentageoverrevenue from2.9%to 3.5%,(2)theGroup’stotal assetshaveincreasedto
a total valueof €57.5mfrom€47.3mwhen compared to 2021. Thisrepresents an increase of21.6%, and (3)
ithasdrasticallyimproveditscashflowpositionasitendedthefinancialyearwithapositive cash andcash
equivalents balance of €882,676 when compared with a negative position of €140,054 in 2021.
The Grouphas aclear financial frameworkand remains highly disciplinedand focusedon itscash-flows and
on increasing its working capital to ensure that it can continue with its targeted investments in order to
remain competitive and relevant in the short to medium term thus, securing the Group’s future.
The board of directors is confident that the Group’s disciplined and focused approach, together with
remainingsensitivetoindustry trendsandbeingresponsivetoinvestmentopportunities,will ensurethatthe
Group will remain at the forefront of the construction industry and thus remain relevant in the short to
medium term.
_____________________________________
_____________________________________
4
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
DIRECTORS' REPORT - continued
Results and dividends
Principal risks and uncertainties
Disclosures of material matters
JD Capital p.l.c. has the following 3 material contracts:
i. €4.9m loan given to JD Operations Limited. This relates to the Prospects bond obtained in 2018;
ii.
iii.
Company Secretary and Registered Office
Financial risk management
Events after the end of the reporting period
The Groupis exposedto credit,liquidity,and interestrate risks.Theseare furtheranalysed in Note 31 inthe
financial statements.
Theresultsfortheyear are setoutinthe statementsof comprehensiveincomeon page12.Duringtheyear
ended 31 December 2022, the directors do not recommend the payment of a dividend (2021: NIL).
The
Group
is
mainly
dependent
on
the
operations
of
one
of
its
subsidiaries,
JD
Operations
Limited,
its
main
lineof business beingthe installationandmanufacture of aluminium apertures,steel structures and large-
scale glass formats. The full list of key risks listedin the base prospectus are stillapplicable.To mitigate
suchrisktheCompanyisdiversifying itsbusinesslinesaspertheBaseProspectusissuedtothepublicon
3
rd
October 2022
.
Apart from the above, the Group is subject to various other risks such as market, economic, credit and
liquidity risks thatmayaffecttheGroup’sprojects andtheirtimelycompletions.Thedirectors areconfident
thattheCompanyhastherightframework andtheappropriatepoliciesandproceduresinplacetomitigate
the effects that the aforementioned risks might have on the business.
€3.6mloangrantedtoJD OperationsLimitedas workingcapital. ProceedsobtainedbyJD capitalp.l.c.
from bond issue in November 2022
€5m loan agreement with JD Operations Limited for the redevelopment of the Hal-Far factory. Again,
proceeds obtain by JD Capital p.l.c. from the bond issue that took place in November 2022.
During the year ended 31 December 2022 Dr Jesmond Manicaro served as company secretary and
resigned from this post on 01 February 2023. On the same date Mr. Malcolm Falzon was appointed as
company secretary. The Company's registered office is HHF 303 Industrial Estate, Hal Far, Birzebbugia
BBG 3000, Malta.
There are no events after the end of the reporting period which require mention in this report.
_____________________________________
_____________________________________
5
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
DIRECTORS' REPORT - continued
Going concern
Future developments
The directors do not foresee any changes in the operating activities for the forthcoming year.
Directors
During the year ended 31 December 2022, the directors were as listed on page 3.
Statement of directors' responsibilities
In preparing the financial statements, the directors are required to:
•
•
select suitable accounting policies and apply them consistently;
•
make judgements and estimates that are reasonable and prudent;
•
account for income and charges relating to the accounting period on accruals basis;
•
value separately the components of asset and liability items;
•
report comparative figures corresponding to those of the preceding accounting period; and
•
As at 31 December 2022, the Group’s current assets exceeded its current liabilitiesby €8,776,912(2021:
2,398,389).
The directors, at the time of approvingthefinancialstatements, have determined thatthere is reasonable
expectation that the Group and the Company have adequate resources to continue operating for the
foreseeablefutureandforthisreason,thedirectorshaveadoptedthegoingconcernbasisinpreparingthe
financial statements.
In accordance with the Company's Memorandumand Articles ofAssociation, thepresent directorsremainin
office, but shall retire from office at least once every three years. However, they shall be eligible for re-
election.
TheCompaniesAct(Cap.386),enactedinMalta,requiresthedirectorstopreparefinancialstatementsfor
each financialyear which give atrueand fairview ofthe financialposition ofthe Company andoftheGroup
as at year end and of their profit or loss for the year then ended.
adopt thegoing concernbasisunless itisinappropriate topresumethat theCompanyand theGroupwill
continue in business;
preparethefinancialstatementsinaccordancewithgenerally acceptedaccountingprinciplesasdefined
in the Companies Act (Cap. 386) and in accordance with the provision of the same Act.
_____________________________________
_____________________________________
6
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
DIRECTORS' REPORT - continued
Statement of directors' responsibilities - continued
Auditors
Statement by directors on the financial statements and other information included in the report
The directors declare that to the best of their knowledge:
•
•
Signed on behalf of the Board of Directors on 25 April 2023 by Josef Dimech (Director) and Stephen Muscat
(Director) as per the Director's Declaration on ESEF Annual Financial Report submitted in conjunction with
the Annual Financial Report.
The directors are responsible for keeping proper accounting records which disclose with reasonable
accuracyatany timethefinancialpositionoftheCompanyandoftheGroupandtoenablethemtoensure
that the financial statements comply with the Companies Act (Cap. 386). This responsibility includes
designing, implementing and maintaining such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error. The directors are also responsible for safeguarding the assets of the Companyand of the
Group and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
RSMMalta,RegisteredAuditors, haveexpressedtheirwillingnesstocontinueinofficeandaresolution for
their reappointment will be proposed at the Annual General Meeting.
the financialstatementsgive a trueand fairview ofthe financialposition and financial performanceof the
Group andoftheCompany andhave been preparedin accordancewith International Financial Reporting
Standards (IFRS) as adopted by the European Union and with the Companies Act (Cap 386); and
this
report
includes
a
fair
review
of
the
development
and
performance
of
the
business
and
positions
of
the
Groupandof theCompany,togetherwithadescriptionoftheprincipalrisks anduncertaintiesthatthey
face.
_____________________________________
_____________________________________
7
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
STATEMENT OF COMPLIANCE WITH THE
PRINCIPLES OF GOOD CORPORATE GOVERNANCE
PART I - Compliance with the Code
Principle 1: The Board
Principle 2: Chairman and Chief Executive
Principle 3: Composition of the Board
The Board of the Company who served during the year until 31 December 2022 was as follows:
Directors
Mr. Josef Dimech
Executive Director
Mr. Jonathan Pace
Executive Director
(as from 07 September 2022)
Dr. Stanley Portelli
Non-executive Director
Mr. Gaetano Vella
Non-executive Director
(up until 07 September 2022)
Mr. Stephen Muscat
Non-executive Director
Dr. Jesmond Manicaro
Non-executive Director
(as from 07 September 2022)
Company secretary
Dr. Jesmond Manicaro
(up until 01 February 2023)
JD Capital PLC ("the Company") is committed to observing the principles of transparent and responsible
corporategovernance.The Boardconsiders compliancewithcorporategovernanceprinciplestoconstitute
animportantmeansofmaintainingtheconfidenceofpresentand futurebondholders,creditors,employees,
business partners andthe public. Pursuant to the Capital MarketRules, the Company is hereby presenting a
statementofcompliancewith theCodeof PrinciplesofGood Corporate Governance(“thePrinciples” or“the
Code”) for theyearended 31 December 2022,which detailstheextent to which thePrinciples havebeen
adopted, as well as the effective measures taken by the Company to ensure compliance with these
Principles.Other thanasstated in PartTwo below,the Companyhas fullyimplemented the Principlesset
out in the Code.
The
composition
of
the
Board
of
Directors
ensures
that
the
Company
is
led
by
individuals
who
have
the
necessary skills and diversity of knowledge. The Board considers strategic issues, key projectsand regularly
monitors performance against delivery of the key targets of the Group’s business plan.
The Company has noemployees. Mr JosefDimech,an Executive Director ofthe Company, is alsothe Chief
Executive Officer of the Company’s main subsidiary.
The
Board
considers
that
the
non-executive
directors
are
independent
of
management
and
free
from
any
business or other relationship that could materially interfere with the exercise of their independent
judgement.Themembers oftheBoardhavethebalanceofknowledgeandexperienceaswellasastrong
non-executive presence to allow continued scrutiny of performance, strategy, and governance.
_____________________________________
_____________________________________
8
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
STATEMENT OF COMPLIANCE WITH THE
PRINCIPLES OF GOOD CORPORATE GOVERNANCE - continued
PART I - Compliance with the Code - continued
Principle 3: Composition of the Board - continued
The Board considers that none of the independent Directors of the Company:
• is or has been employed in any capacity by the Company;
•
has or has had, over the past three years, a significant business relationship with the Company;
•
•
has close family ties with any of the Company’s executive directors or senior employees; and
•
Each of the independent Directors hereby declares that he undertakes to:
•
maintain in all circumstances his independence of analysis, decision and action;
•
•
clearly express his opposition in the event that he finds that a decision of the Board may harm the Company.
Principle 4: The Responsibilities of the Board
Principle 5: Board Meetings
The Board has met ten times during the year. All Directors were present on all these meetings.
For the purpose of the Capital Market Rules, the non-executive directors are deemed independent. Each
directorismindfulofmaintainingindependence, professionalism,andintegrity incarrying outhisduties and
responsibilities, whilst providing judgement as a director of the Company.
has received or receives significant additionalremuneration fromthe Company in addition to his director’s
fee;
has been within the last three years an engagement partner or a member of the audit team or past
external auditor of the Company.
not seek or accept any unreasonable advantages that could be considered as compromising his
independence; and
The
Board
has
responsibility
for
overseeing
the
strategic
planning
process
and
reviewing
and
monitoring
management’s execution of the corporate and group business plan. The Board delegates certain powers,
authorities and discretions to the audit committee. The role and competence of such committee is further
described in Principle 8 hereunder.
The
Board
meets
at
least
six
times
a
year
unless
further
meetings
are
required
in
accordance
with
the
needs
of the Company. The Board has a schedule of matters reserved for it to discuss.
Each
Director
is
expected
to
attend
all
meetings
of
the
Board
and
Board
committees
of
which
the
Director
is
a member.TheBoardrecognisesthat occasionalmeetingsmayneed tobescheduled on shortnoticewhen
the participation ofaDirectorisnotpossible andthat conflictsmay arise fromtimeto timethat will prevent a
Directorfrom attendingorparticipatingina regularlyscheduledmeeting. However,theBoard expectsthat
each Director will make every possible effort to keep such absences to a minimum.
_____________________________________
_____________________________________
9
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
STATEMENT OF COMPLIANCE WITH THE
PRINCIPLES OF GOOD CORPORATE GOVERNANCE - continued
PART I - Compliance with the Code - continued
Principle 6: Information and Professional Development
Principle 7: Evaluation of the Board’s Performance
Principle 8: Committees
The Board delegates certain powers, authorities and discretions to the audit committee.
Audit Committee
The audit committee comprises of the following independent, non-executive Directors:
Mr. Stephen Muscat
Chairman
Dr. Stanley Portelli
Member
Dr. Jesmond Manicaro
Member
The audit committee met four times during the year. All members were present on all these meetings.
Principles 9 and 10: Relations with Bondholders and with the Market and Institutional Shareholders
The Company issues company announcements to keep the market informed of the group developments.
The
Company
firmly
believes
in
the
professional
development
of
all
the
members
of
the
Board.
The
CEO
and Senior management of the subsidiary are invited to attend Board meetings from time to time when
The
Board
and
each
of
its
committees
perform
an
annual
self-evaluation
of
their
performance
through
a
series of questionnaires, the results of which are analysed accordingly.
The
audit
committee’s
primary
role
is
to
support
the
main
Board
in
terms
of
quality
control
of
the
Company’s
financial reports, its internal controls and in managing the Board’s relationships with the external auditors.
In compliancewith the CapitalMarketRules, Mr. Stephen Muscat is the independent, non-executiveDirector
who is competent in accounting and/or auditing matters in view of his considerable experience as a
warranted Certified Public Accountant.
The
Company
is
committed
to
having
an
open
and
communicative
relationship
with
its
bondholders.
The
Board believes that bondholders should have an opportunity to send communications to the Board. Any
communicationfromabondholder to the Board generallyor a particular Director should be in writing,signed,
contain the number of bonds held in the sender’s name and should be delivered to the attention of the
company secretary at the registered office of the Company.
_____________________________________
_____________________________________
10
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
STATEMENT OF COMPLIANCE WITH THE
PRINCIPLES OF GOOD CORPORATE GOVERNANCE - continued
PART I - Compliance with the Code - continued
Principle 11: Conflicts of Interest
Principle 12: Corporate Social Responsibility
PART II - Non-compliance with the Code
Principle 7: Evaluation of the Board’s Performance
Principle 8: Committees
The Memorandum and Articles of Association of the Company regulates the appointment of Directors.
The
Directors
should
always
act
in
the
best
interest
of
the
Company
and
its
shareholders
and
investors.
The
proceduresinternally followed by theBoardreflecthow sensitive suchsituations, ifandwhen they arise,are
considered by the Company. In accordance with the provisions of the Articles of Association of the
Company,anyactual,potentialorperceivedconflictofinterestmustbeimmediatelydeclaredbyaDirector
to the other membersof theBoard, who then (also possibly through a referral to the audit committee)decide
onwhethersucha conflictexists. Inthe eventthattheBoardperceivessuchinterest tobe conflictingwith
theDirector’sduties,theconflictedDirectorisrequiredtoleavethemeetingandboththediscussiononthe
matter and the vote, if any, on the matter concerned are conducted in the absence of the conflicted Director.
The
Company
remains
committed
to
being
a
responsible
company
and
making
a
positive
contribution
to
societyand the environment. This helps the Group developstrong relationshipswithits stakeholders, and
createlong-termvalueforsocietyanditsbusiness.TheGroupiscommitted toplay aleadingandeffective
roleinMalta’s sustainabledevelopmentwhilst tangibly provingitselftobearesponsibleandcaringentity of
the community in whichit operates. The Group continues to support a number of different local initiatives
aimed at improving the quality of life of the local communities it supports.
Even
though
the
Board
undertook
a
self-evaluation
of
its
own
performance,
it
did
not
appoint
an
ad
hoc
committee to carry out such evaluation. The Board believes that the outcome of such self-assessment
exercise currently provides the deliverables needed.
The
Board
believes
that
the
setting
up
of
a
Nomination
Committee
and
a
Remuneration
Committee
is
currently not suited to the Company as envisaged by the spirit of the Code.
This
statement
of
compliance
with
the
principles
of
good
corporate
governance
has
been
approved
by
the
Board of Directors and signed on its behalf by:
Signed on behalf of the Board of Directors on 25 April 2023 by Josef Dimech (Director) and Stephen Muscat
(Director) as per the Director's Declaration on ESEF Annual Financial Report submitted in conjunction with
the Annual Financial Report.
_____________________________________
_____________________________________
11
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
STATEMENTS OF COMPREHENSIVE INCOME
2022
2021
2022
2021
Notes
€
€
€
€
Revenue 5 11,831,725 16,268,211 - -
Cost of sales (10,705,255) (14,448,372) - -
Gross profit 1,126,470 1,819,839 - -
Selling and distribution expenses (140,999) (151,333) - -
Administrative expenses (1,013,528) (807,288) (275,392) (72,149)
Other income 6 213,496 293,852 - -
Operating profit/(loss) 7 185,439 1,155,070 (275,392) (72,149)
Revaluation of investment property 14 971,285 - - -
Finance and dividend income 9 41,899 205,822 342,299 318,500
Finance costs 10 (723,655) (583,652) (292,936) (250,000)
Other losses 11 (1,721) (11,700) - -
(55,721) (297,423) (11,160) -
Profit/(loss) before tax 417,526 468,117 (237,189) (3,649)
Tax credit/(charge) 12 (199,209) (308,719) 199 (66,429)
Profit/(loss) for the year 218,317 159,398 (236,990) (70,078)
Other comprehensive income
- 7,856,800 - -
218,317 8,016,198 (236,990) (70,078)
Owners of the Company 218,317 159,398 (236,990) (70,078)
Owners of the Company 218,317 8,016,198 (236,990) (70,078)
Basic earnings/(loss) per share 23 0.03 0.03 (0.03) (0.01)
Total comprehensive income/(loss)
for the year
Group
Company
Movement in expected credit loss
provision
Items that will not be reclassified
subsequently to profit or loss
Revaluation of land and buildings, net of
tax
Profit/(loss) for the year
attributable to:
Total comprehensive income/(loss)
attributable to:
_____________________________________
_____________________________________
12
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
STATEMENTS OF FINANCIAL POSITION
2022
2021
2022
2021
Notes
€
€
€
€
ASSETS
Non-current assets
Property, plant and equipment
13
22,811,710
23,627,306
-
-
Investment property
14
5,494,000
4,522,715
-
-
Intangible asset
15
224,497
224,497
-
-
Investment in subsidiaries
16
-
-
7,502,400
7,502,400
Financial assets at amortised cost
17
1,663,556
1,618,922
7,004,388
4,884,810
Trade and other receivables
19
2,313,207
1,084,518
-
-
Deferred tax asset
12
-
-
-
-
32,506,970
31,077,958
14,506,788
12,387,210
Current assets
Financial assets at amortised cost
17
5,394,194
3,150,896
45,400
55,780
Inventories
18
1,364,007
1,529,296
-
-
Contract assets
20
6,516,976
4,514,034
-
-
Trade and other receivables
19
10,812,500
6,646,982
6,650,166
201,367
Cash and cash equivalents
28
891,483
361,040
9,987
205
24,979,160
16,202,248
6,705,553
257,352
TOTAL ASSETS
57,486,130
47,280,206
21,212,341
12,644,562
EQUITY AND LIABILITIES
Capital and reserves
Share capital
21
7,546,700
7,546,700
7,546,700
7,546,700
Revaluation reserve
22
7,856,800
7,856,800
Retained earnings/(Accumulated losses)
1,401,612
1,183,295
(288,058)
(51,068)
TOTAL EQUITY
16,805,112
16,586,795
7,258,642
7,495,632
Non-current liabilities
Borrowings
24
17,049,983
7,397,971
13,625,498
4,916,640
Lease liabilities
25
3,446,530
3,492,124
-
-
Trade and other payables
27
3,564,311
3,898,722
-
-
Deferred tax liabilities
12
1,638,230
1,592,788
-
-
Non-current tax liabilities
459,192
507,947
-
-
26,158,246
16,889,552
13,625,498
4,916,640
Current liabilities
Borrowings
24
3,085,932
3,602,339
237,962
3,592
Lease liabilities
25
45,156
36,004
-
-
Contract liabilities
26
2,889,500
2,212,033
-
-
Current tax liabilities
1,071,911
1,080,212
-
47,950
Trade and other payables
27
7,430,273
6,873,271
90,239
180,748
14,522,772
13,803,859
328,201
232,290
TOTAL LIABILITIES
40,681,018
30,693,411
13,953,699
5,148,930
TOTAL EQUITY AND LIABILITIES
57,486,130
47,280,206
21,212,341
12,644,562
Group
Company
The financial statements were approved and authorised for issue by the Board of Directors on 25 April 2023.
The financial statements were signed on behalf of the Board of Directors by Josef Dimech (Director) and
Stephen Muscat (Director) as per the Directors' Declaration on ESEF Annual Financial Report submitted in
conjunction with the Annual Financial Report.
_____________________________________
_____________________________________
13
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
STATEMENTS OF CHANGES IN EQUITY
Share
Other
Revaluation
Retained
capital
equity
Reserve
earnings
Total
€
€
€
€
€
Balance at 1 January 2021
245,100
7,301,600
-
1,023,897
8,570,597
7,301,600 (7,301,600) - - -
Profit for the financial year
-
-
-
159,398
159,398
Other comprehensive income
-
-
7,856,800
-
7,856,800
Balance at 31 December 2021 7,546,700 - 7,856,800 1,183,295 16,586,795
Balance at 1 January 2022
7,546,700
-
7,856,800
1,183,295
16,586,795
Profit for the financial year
-
-
-
218,317
218,317
Balance at 31 December 2022 7,546,700 - 7,856,800 1,401,612 16,805,112
Share
Other
Revaluation
Retained
capital
equity
Reserve
earnings
Total
€
€
€
€
€
Balance at 1 January 2021
245,100
7,301,600
-
19,010
7,565,710
7,301,600 (7,301,600) - - -
Loss for the financial year
-
-
-
(70,078)
(70,078)
Balance at 31 December 2021 7,546,700 - - (51,068) 7,495,632
Balance at 1 January 2022
7,546,700
-
-
(51,068)
7,495,632
Loss for the financial year
-
-
-
(236,990)
(236,990)
Balance at 31 December 2022 7,546,700 - - (288,058) 7,258,642
Total comprehensive loss for the year:
Group
Financial period ended
31 December 2021:
Share capital increase in exchange for
non-cash consideration
Total comprehensive income for the
year:
Financial year ended
31 December 2022:
Total comprehensive income for the
year:
Company
Financial period ended
31 December 2021:
Share capital increase in exchange for
non-cash consideration
Total comprehensive loss for the year:
Financial year ended
31 December 2022:
_____________________________________
_____________________________________
14
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
STATEMENTS OF CASH FLOWS
2022
2021
2022
2021
Notes
€
€
€
€
Cash flows from operating activities
Profit before tax
417,526
468,117
(237,189)
(3,649)
Adjustments for:
Finance costs
10
717,686
583,652
292,310
250,000
Depreciation
13
955,115
831,760
-
-
Movement in impairment on financial assets
(49,883)
297,423
11,160
-
Amortisation of bond issue costs
86,254
10,670
86,254
10,670
Loss on disposal of motor vehicles
11
1,721
11,700
-
-
Gain on revaluation of investment
property
(971,285)
-
-
-
Finance and dividend income
9
(41,899)
(205,789)
(342,299)
(318,500)
Cash used in operations before
working capital changes
1,115,235
1,997,533
(189,764)
(61,479)
Increase in inventories
165,289
(154,334)
-
-
Increase in trade and other receivables
and contract assets
(9,548,656)
(7,130,580)
(6,438,419)
(550)
Increase/(Decrease) in trade and other
payables and contract liabilities
996,851
3,618,872
(3,369)
15,156
Cash (used in)/from operations
(7,271,281)
(1,668,509)
(6,631,552)
(46,873)
Interest paid
-
-
-
-
Interest received
-
-
342,299
318,500
Taxes paid
(220,476)
(59,802)
(47,751)
(18,908)
Net cash flows (used in)/from operating
activities
(7,491,757)
(1,728,311)
(6,337,004)
252,719
Cash flows from investing activities
Payments for additions of:
Property, plant and equipment
(143,540)
(216,846)
-
-
Investment property
-
(531)
-
-
Receipt from disposal of motor vehicles
2,300
2,300
-
-
Net receipts from loans
-
2,348,591
-
-
Movement in amounts due from subsidiary,
parent company and related company
(44,643)
(591,296)
(2,130,738)
(2,726)
Net cash flows used in from investing
activities
(185,883)
1,542,218
(2,130,738)
(2,726)
Cash flows from financing activities
Proceeds from bank borrowings
3,766,758
2,437,692
-
-
Issuance of bond
8,622,604
-
8,622,604
-
Repayment of bank borrowings
(2,855,514)
(1,680,382)
-
-
Interest paid
(629,690)
(406,760)
(379,450)
(250,000)
Interest paid on lease liabilities
(175,136)
(176,892)
-
-
Payments on finance leases
(36,442)
(34,248)
-
-
Movement in amounts due to subsidiary,
ultimate shareholder and related company
7,790
(103,874)
234,370
-
Net cash flows from/(used in) financing
activities
8,700,370
35,536
8,477,524
(250,000)
Net cash movement during the year
1,022,730
(150,557)
9,782
(7)
Cash and cash equivalents at
beginning of year
(140,054)
10,503
205
212
Cash and cash equivalents at
end of year 28 882,676 (140,054) 9,987 205
Significant non-cash transactions are disclosed in Note 29 to the financial statements
Group
Company
_____________________________________
_____________________________________
15
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
2. GOING CONCERN
3. SIGNIFICANT ACCOUNTING POLICIES
Statement of compliance and basis of measurement
Presentation and functional currencies
These financial statements are presented in Euro (
€) which is also the Company's functional currency.
New or revised standards, interpretations, or amendments adopted
Thesefinancialstatements arepreparedinaccordancewithInternationalFinancialReportingStandards
("IFRS")asadoptedby theEuropeanUnion("EU")andcomplywiththerequirementsoftheCompanies
Act (Cap. 386)enacted in Malta. Thesefinancialstatementshave been preparedunder thehistorical cost
convention, except for the investment property and industrial buildings which are carried at fair value.
The Group has adopted several amendments issued by the International Accounting Standards Board
("IASB")andtheIFRSInterpretationsCommitteeandendorsedbytheEU.Theadoptionofthesenew or
revised standards, interpretations and amendments did not have a material impact on these financial
statements.
JDCapital PLC("theCompany") isapubliclimitedliabilitycompanyincorporatedanddomiciledinMalta.
The Company's registered office is HHF 303 Industrial Estate, Hal Far, Birzebbugia BBG 3000, Malta.
The principal activity of the Company is to act as a holding company and to provide financing to its
subsidiaries. The Company together with its subsidiaries ("the Group”) is engaged in the business of
providingaluminium,steel,wroughtiron,largescaleglassformats, andstainless-steelworks,aswellas
the construction of steel structures. The Group also holds an investment property.
JD Holdings Limited, alimited liabilitycompany incorporated and domiciledin Malta,is theultimate parent
oftheGroupandoftheCompany.JosefDimech,aresidentinMalta,istheultimatebeneficialownerof
the Group and of the Company.
As at 31 December 2022, the Group's current assets exceeded its current liabilities by €10,456,388
(2021:€2,398,389).This reflectstheactiveefforts undertakenbythedirectorsto improvetheliquidityof
the Group. The directors are confident that the positive results obtained, together with the business
strategy thatisbeingimplemented,will improvetheliquidityoftheGroup.Thiswill ensurethattheGroup
willbe able to fund its commitmentsas and when the needarisesto enable the Group to realise its assets
and discharge its liabilities in the normal courseofbusiness. On the above basis, the directors considered
it appropriate to prepare the financial statements of the Company and the Group on a going concern
basis.
_____________________________________
_____________________________________
16
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
3. SIGNIFICANT ACCOUNTING POLICIES - continued
Annual Improvements to IFRS Standards 2018–2020
Amendments to IAS 16 Property, Plant and Equipment – Proceeds before intended use
Amendments to IAS 37 Onerous Contracts – Cost of Fulfilling a Contract
Amendments to IFRS 3 Reference to the Conceptual Framework
New or revised standards, interpretations, or amendments not yet effective
IFRS
9
Financial
Instruments
-
The
amendment
clarifies
that
in
applying
the
‘10
per
cent’
test
to
assess
whether to derecognise a financial liability,an entityincludes onlyfees paid or received betweenthe
entity (the borrower)and thelender, includingfeespaidorreceivedby either theentity orthelender on
the other’s behalf. The amendment is applied prospectively.
The amendments prohibit deducting from the cost of an item of property, plant and equipment any
proceeds fromselling items produced beforethat asset isavailable for use,i.e. proceedswhile bringing
the asset to the location and condition necessary for it to be capable of operating in the manner
intended bymanagement.Consequently, an entityrecognises suchsales proceedsand related costs in
profit orloss.The entitymeasures thecost of those items in accordance withIAS 2 Inventories.The
amendments alsoclarifythemeaningof'testingwhetheranassetisfunctioningproperly'. IAS16now
specifiesthisasassessingwhetherthetechnicalandphysicalperformance oftheassetissuchthatit
is capable of being used in the production or supplyof goods or services, for rental to others, or for
administrative purposes. If not presented separately in the statement of comprehensive income, the
financial statements shall disclose the amounts of proceeds and cost included in profit or loss that
relatetoitemsproducedthatarenotanoutputoftheentity’s ordinary activities,andwhichlineitem(s)
in the statement of comprehensive income include(s) such proceeds and cost.
Theamendments specifythatthecostoffulfillingacontractcomprises thecoststhatrelatedirectly to
the contract.Coststhatrelatedirectly to a contractconsist ofboththe incrementalcostsoffulfilling that
contract (examples would be direct labour or materials) and an allocation of other costs that relate
directly tofulfilling contracts(anexamplewould be theallocation ofthedepreciation chargeforan item
of property, plant and equipment used in fulfilling the contract).
The
Group
has
adopted
the
amendments
to
IFRS
3
Business
Combinations
for
the
first
time
in
the
current year. The amendments update IFRS 3 so that it refers to the 2018 Conceptual Framework
insteadofthe1989Framework.TheyalsoaddtoIFRS3arequirementthat,forobligationswithinthe
scopeofIAS 37Provisions, ContingentLiabilities and Contingent Assets,an acquirerapplies IAS37to
determinewhetheratthe acquisitiondateapresentobligationexists asaresultof pastevents.Fora
levy that would be within the scope of IFRIC 21 Levies, the acquirer applies IFRIC 21 to determine
whethertheobligating eventthatgivesrisetoaliability topay thelevy hasoccurredbytheacquisition
date.
Several
other
new
and
revised
standards,
interpretations,
or
amendments,
not
early
adopted
by
the
Group,wereinissueandendorsedby theEU, butnotyet effectiveforthecurrentfinancialperiod.The
directorsare ofthe opinion that the adoption ofthese standards,interpretations oramendmentswillnot
have a material impact on these financial statements. The most relevant changes are the below:
_____________________________________
_____________________________________
17
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
3. SIGNIFICANT ACCOUNTING POLICIES - continued
New or revised standards, interpretations, or amendments not yet effective - continued
Amendments to IAS 1 – Classification of Liabilities as Current or Non-current
•
•
The amendments to IAS 1 affect only the presentation of liabilities as current or non-current in the
statementoffinancialposition and nottheamountortimingofrecognitionofany asset, liability,income
or expenses, or the information disclosed about those items. The amendments clarify that the
classification ofliabilitiesascurrentornon-currentis basedonrightsthatareinexistenceattheend of
the reporting period, specify that classification is unaffectedby expectations about whether an entity will
exercise its right to defer settlement of a liability,explainthat rights are in existence if covenantsare
compliedwith attheendofthereportingperiod, andintroduceadefinition of‘settlement’ tomakeclear
that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or
services. The amendments are applied retrospectively for annual periods beginning on or after 1
January 2023, with early application permitted.
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making
Materiality Judgements—Disclosure of Accounting Policies
The amendments change the requirements in IAS 1 with regard to disclosure of accounting policies.
The amendments replace all instances of the term ‘significant accounting policies’ with ‘material
accounting policy information’. Accounting policy information is material if, when considered together
with other information included in an entity’s financial statements, it can reasonably be expected to
influence decisions that the primary users ofgeneral purpose financial statements makeon the basis of
those financial statements. The supporting paragraphs in IAS 1 are also amended to clarify that
accounting policy information that relates to immaterial transactions, other events or conditions is
immaterial and neednot be disclosed.Accounting policyinformation may be material because of the
nature of the related transactions, other events or conditions, even if the amounts are immaterial.
However, not all accounting policy information relating to material transactions, other events or
conditions is itself material. The IASB has also developed guidance and examples to explain and
demonstratetheapplication ofthe‘four-stepmateriality process’describedinIFRSPractice Statement
2. TheamendmentstoIAS 1 are effective forannual periods beginningon or after1 January 2023,with
earlier application permitted and are applied prospectively. The amendments to IFRS Practice
Statement 2 do not contain an effective date or transition requirements.
Amendments to IAS8AccountingPolicies, ChangesinAccountingEstimates andErrors- Definition of
Accounting Estimates
The amendments replace the definition of a change in accounting estimates with a definition of
accounting estimates. Under the new definition, accounting estimates are “monetary amounts in
financial statements that are subject to measurement uncertainty”. The definition of a change in
accountingestimates wasdeleted.However,theIASBretained theconcept ofchangesinaccounting
estimates in the Standard with the following clarifications:
Achangeinaccountingestimatethatresultsfromnewinformationornew developmentsisnotthe
correction of an error.
The effects of a change in an input or a measurement technique used to develop an accounting
estimate arechanges in accounting estimatesifthey do not result fromthecorrection ofprior period
errors.
_____________________________________
_____________________________________
18
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
3. SIGNIFICANT ACCOUNTING POLICIES - continued
New or revised standards, interpretations, or amendments not yet effective - continued
•
•
Thecumulativeeffectof initially applyingtheamendmentsasanadjustmentto theopening balance
of retained earnings (or other component of equity, as appropriate) at that date
Amendments to IAS8AccountingPolicies, ChangesinAccountingEstimates andErrors- Definition of
Accounting Estimates
The IASB added two examples (Examples 4-5) to the Guidance on implementing IAS 8, which
accompanies the Standard. The IASB has deleted one example (Example 3) as it could cause
confusioninlightoftheamendments. Theamendments areeffectivefor annualperiodsbeginningon
or after 1 January2023 to changes in accounting policies and changes in accounting estimates that
occur on or after the beginning of that period, with earlier application permitted.
Amendmentsto IAS12 IncomeTaxes –Deferred Tax relatedto Assets andLiabilitiesarisingfrom a
Single Transaction
The
amendments
introduce
a
further
exception
from
the
initial
recognition
exemption.
Under
the
amendments,anentity doesnotapply the initialrecognition exemptionfortransactionsthatgiveriseto
equal taxable and deductible temporarydifferences.Depending on the applicable tax law,equal taxable
and deductible temporary differences may arise on initial recognition of an asset and liability in a
transaction that is not a business combination and affects neither accounting nor taxable profit. For
example, this may arise upon recognition of a lease liabilityand the corresponding right-of-use asset
applying IFRS 16 at the commencement date of a lease. Following the amendments to IAS 12, an
entity is required to recognise the related deferred tax asset and liability,with the recognition of any
deferred tax asset being subject to the recoverability criteria in IAS 12. The amendments apply to
transactions that occur on or after the beginning of the earliest comparative period presented. In
addition, at the beginning of the earliest comparative period an entity recognises:
A deferred tax asset (to the extent that it is probable that taxable profit will be available against
which the deductible temporary difference can be utilised) and a deferred tax liability for all
deductible and taxable temporary differences associated with:
– Right-of-use assets and lease liabilities
– Decommissioning,restoration andsimilarliabilities and thecorresponding amountsrecognisedas
part of the cost of the related asset
Theamendmentsareeffectiveforannualreportingperiodsbeginningonorafter1January 2023,with
earlier application permitted. The directors of the Group anticipate that the application of these
amendmentsmay have an impactonthe Company's financialstatementsin futureperiodsshould such
transactions arise.
_____________________________________
_____________________________________
19
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
3. SIGNIFICANT ACCOUNTING POLICIES - continued
New or revised standards, interpretations, or amendments not yet effective - continued
Basis of consolidation
Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and
The amendments toIFRS10 andIAS28 deal withsituations wherethere is a sale or contribution of
assetsbetweenaninvestorand itsassociateorjointventure.Specifically,theamendments statethat
gainsorlossesresultingfrom thelossofcontrolof asubsidiarythatdoesnotcontainabusinessina
transaction with an associate or a joint venture that is accounted for using the equity method, are
recognised in the parent’s profit or loss onlyto the extent of the unrelated investors’interests in that
associate orjointventure. Similarly, gains andlossesresulting fromthe remeasurementof investments
retained in any formersubsidiary (that hasbecomeanassociateora jointventure thatisaccountedfor
using the equitymethod) to fair value are recognised in the former parent’s profit or loss only to the
extentof theunrelatedinvestors’interestsinthenewassociateorjoint venture.The effective dateof
the amendments has yet to be set by the IASB; however, earlier application of the amendments is
permitted. Thedirectorsofthe Groupanticipate that the application oftheseamendmentsmayhave an
impact on the Group's consolidated financial statements in future periods should such transactions
arise.
The
consolidated
financial
statements
incorporate
the
revenues
and
expenses,
cash
flows,
assets
and
liabilities of theCompany andofitssubsidiaries. Subsidiaries arecompaniesoverwhich the Grouphas
control,directly orindirectly. TheGroupcontrolsanentitywhentheGroupisexposedto,orhasrights
to, variablereturns fromits involvement withthe entityand has theabilityto affect thosereturns through
itspowertodirecttheactivities oftheentity. Subsidiariesarefully consolidatedfromthedateon which
control is transferred to the Group.
Theseconsolidatedfinancialstatementscomprise theCompanyanditssubsidiaries.Subsidiaries that
were consolidated are listed in Note 16 to these financial statements.
Intra-group
transactions,
balances
and
unrealised
gains
on
transactions
between
companies
within
the
Groupareeliminated.Unrealisedlossesare alsoeliminatedunlessthetransactionprovidesevidence
of impairment of the asset transferred. Accounting policies of subsidiaries are consistent with the
policies adopted by the Group.
The
acquisition
of
subsidiaries
is
accounted
for
using
the
acquisition
method
of
accounting.
A
change
in
ownership interest, without the loss of control, is accounted for as an equity transaction, where the
differencebetweentheconsiderationtransferredand thebookvalue ofthe shareofthe non-controlling
interest acquired is recognised directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the
consolidated statement of comprehensive income, consolidated statement of financial position and
consolidated statement of changes in equity of the Group.
When
the
Group
loses
control
over
a
subsidiary,
it
derecognises
the
assets
including
goodwill,
liabilities
and non-controlling interest in the subsidiary and other related component of equity. The Group
recognises the fair value of the consideration received and the fair value of any investment retained
together with any gain or loss in profit or loss. Any interest retained is measured at fair value when
control is lost.
_____________________________________
_____________________________________
20
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
3. SIGNIFICANT ACCOUNTING POLICIES - continued
Foreign currencies
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Interest income
Other income
Other income is recognised when it is received or when the right to receive payment is established.
Finance costs
Revenue
is
recognised
at
an
amount
that
reflects
the
consideration
to
which
the
Group
is
expected
to
beentitledwhenoraseachperformanceobligation issatisfiedinamannerthatdepicts thetransferto
the customer of the goods or services promised. Specifically, revenue from contracts to provide
services is recognised over time as the services are rendered based on an amount that depicts the
progress towards complete satisfaction of the performance obligation.
Transactions in foreign currencies are translated to the respective functional currencies of Group
companies at exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies have been translated into Euro (€) at
the rates of exchange ruling at the end of reporting period. All resulting differences are taken to profit or
loss.
The
consideration
relates
to
the
transaction
price
or
a
portion
of
the
transaction
price
allocated
to
each
performance obligation as defined in the contract with the customer.
The
transaction
price
may
include
variable
consideration
and
the
time
value
of
money.
Variable
consideration within the transaction price, if any, reflectsconcessionsprovided to thecustomersuch as
discounts, rebates and refunds, any potential bonuses receivable from the customer and any other
contingent events.
Interest
income
is
recognised
as
interest
accrues
using
the
effective
interest
method.
This
is
a
method
of calculating the amortised cost of a financial asset and allocating the interest income over the relevant
periodusingtheeffective interest rate, whichis the rate that exactlydiscounts estimated future cash
receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
Finance coststhat are attributable to the acquisition, construction or production of a qualifyingasset are
capitalisedaspartofthatasset.Allotherfinancecostsarerecognisedinprofitorlossintheperiodin
which they are incurred.
_____________________________________
_____________________________________
21
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
3. SIGNIFICANT ACCOUNTING POLICIES - continued
Tax
The tax charge/(credit) in the profit or loss normally comprises current and deferred tax.
Intangible asset
Intellectual property
Intellectual property has an indefinite useful life.
Investment property
Current tax isthe expected taxpayableon thetaxable incomefor theperiod, usingtax ratesenacted at
the end of the reporting period, and any adjustments to tax payable in respect of previous years.
Deferredincometaxisprovided using the liabilitymethod,foralltemporary differencesarising between
the tax bases of assets and liabilities and their carrying values for financial reporting purposes. The
amount of deferred tax providedis based on the expected manner of realisation or settlement of the
carryingamount of assets and liabilities,based on tax rates that have been enacted or substantively
enacted at the end of the reporting period.
A
deferred
tax
asset
is
recognised
only
to
the
extent
that
it
is
probable
that
future
taxable
profits
will
be
availableagainst which the assets can be utilised and/or sufficient taxable temporary differences are
available.Deferredtaxassets arereducedtotheextentthatisnolongerprobablethattherelatedtax
benefit will be realised.
An intangible asset acquired as part of a business combination, other than goodwill, is initially
measuredatfairvalueatthedateoftheacquisition. Anintangibleassetacquiredseparatelyisinitially
recognisedatcost.Anindefinite lifeintangible assetis notamortisedandis subsequentlymeasuredat
cost less any impairment. A finite life intangible asset is subsequently measured at cost less
amortisationandanyimpairment. Onderecognition,gainsorlossesarerecognisedinprofitorlossas
the difference between net disposal proceeds and the carrying amount of the intangible asset. The
methodandusefullivesoffinitelifeintangibleassetsarereviewedannually. Changesintheexpected
pattern of consumption or useful life are accounted for prospectively by changing the amortisation
method or period.
Investment property, which is property held to earn rentals and/or for capital appreciation, including
property under construction for such purposes, is initially measured at cost, including transaction costs.
Subsequent
to
initial
recognition,
an
investment
property
is
carried
at
fair
value,
and
unlike
operational
properties,it is notdepreciated. Achange inthefairvalueofaninvestment propertyisrecognisedin
profit or loss in the period in which they arise.
An
investment
property
is
derecognised
upon
disposal
or
when
the
investment
property
is
permanently
withdrawnfrom use and no future economic benefits are expected from the disposal. Anydifference
betweenthenetdisposalproceedsandthecarryingamountoftheassetisincludedinprofitorlossin
the period in which the property is derecognised.
_____________________________________
_____________________________________
22
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
3. SIGNIFICANT ACCOUNTING POLICIES - continued
Investment property - continued
Property, plant and equipment
%
Industrial building 1.5
Machinery 20
Office furniture 10
Motor vehicles 20
Electronic equipment 25
Electric hand tools 20
Transfers
to
and
from
investment
properties
to
property,
plant
and
equipment
are
determined
by
a
change in use of owner-occupation. The fair value on the date of change of use from investment
properties to property, plant and equipment is used as deemed cost for the subsequent accounting.
Theexisting carryingamountof property,plantandequipmentisused for thesubsequentaccounting
cost of investment properties on the date of change of use.
An item of property, plant and equipment is initially measured at cost. Cost includes the purchase
pricesandotherexpendituresdirectly attributabletobringingtheassetto thelocation andcondition for
itsintendeduse.Subsequentexpenditurerelatingtotheassetiscapitalisedasadditionalcostwhenit
results inan increase inthe future economic benefits tobe obtainedfrom theasset, inexcess of the
originally assessed standard of performance, and will flow back to the Group. All other subsequent
expenditure is recognised in profit or loss.
After
initial
recognition
an
item
of
property,
plant
and
equipment,
other
than
industrial
buildings,
is
carried at cost less accumulated depreciation and impairment losses, if any.
Afterinitialrecognition,industrialbuildingsarecarriedatarevaluedamount,beingitsfairvalueatthe
date of revaluation less subsequent depreciation and impairment, provided that fair value can be
measured reliably.
Depreciation is calculatedon a straight-line basis to writeoff the cost ofeach itemof property, plant and
equipment over their expected useful lives as follows:
The residual values, estimated useful lives and depreciation methods are reviewed, and adjusted if
appropriate, at each reporting date.
Revaluation
of
industrial
buildings
is
performed
frequently
if
market
factors
indicate
a
material
change
in fair value. Increases in carrying amounts arising from revaluation are recognised in other
comprehensive income and accumulated under a revaluation reserve in equity, unless they offset
previousdecreasesinthecarryingamountsof thesame asset, inwhichcase, theyare recognisedin
profit or loss. Decreases in carrying amounts that offset previous increases of the same asset are
recognisedagainstthe revaluationreserve.All otherdecreasesincarrying amountsarerecognisedas
a loss in the statement of comprehensive income.
Industrialbuildingsandplantandequipmentunderleasearedepreciatedovertheunexpiredperiodof
the lease or the estimated useful life of the assets, whichever is shorter.
_____________________________________
_____________________________________
23
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
3. SIGNIFICANT ACCOUNTING POLICIES - continued
Property, plant and equipment - continued
Leases
Right-of-use asset
Lease liabilities
Investment in subsidiaries
Lease
liabilities
are
measured
at
amortised
cost
using
the
effective
interest
method.
The
carrying
amounts are remeasured if there is a change in the following: future lease payments arising from a
changeinanindexorarateused; residualguarantee;leaseterm; certaintyof apurchaseoptionand
termination penalties. When a lease liability is remeasured, an adjustment is made to the
correspondingright-ofuseasset,orto profitor loss if thecarryingamount of theright-of-use asset is
fully written down.
An
item
of
property,
plant
and
equipment
is
derecognised
upon
disposal
or
when
there
is
no
future
economic benefit to the Group. Gains and losses between the carrying amount and the disposal
proceedsaretakentoprofitorloss.Any revaluation surplusreserverelatingtotheitemdisposedofis
transferred directly to retained profits.
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is
measured atcost, whichcomprises theinitialamount oftheleaseliability, adjustedfor, asapplicable,
anyleasepaymentsmadeatorbeforethecommencement datenetofanyleaseincentivesreceived,
anyinitialdirect costs incurred, and, except where included in the cost of inventories,an estimate of
costsexpectedto beincurredfordismantlingandremovingthe underlying asset,and restoringthe site
or asset.
The
Group
has
elected
not
to
recognise
a
right-of-use
asset
and
corresponding
lease
liability
for
short-
termleases withtermsof12monthsorlessand leasesoflow-valueassets.Lease paymentson these
assets are expensed to profit or loss as incurred.
A
lease
liability
is
recognised
at
the
commencement
date
of
a
lease.
The
lease
liability
is
initially
recognised at the present value of the lease payments to be made over the term of the lease,
discountedusingtheinterestrateimplicitintheleaseor,ifthatratecannotbereadily determined,the
consolidated entity's incrementalborrowing rate.Leasepaymentscompriseoffixedpaymentslessany
lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the
exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The
variableleasepaymentsthatdonotdepend onanindexorarateareexpensed intheperiodinwhich
they are incurred.
Right-of-use assets are depreciatedon astraight-linebasis overthe unexpiredperiod of the lease or
the estimated useful life of the asset, whichever is the shorter. Where the Group expects to obtain
ownership ofthe leasedassetatthe endoftheleaseterm,the depreciation isover itsestimateduseful
life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease
liabilities.
Subsidiariesare companies over whichtheCompanyhas control,directlyorindirectly.TheCompany
controlsanentitywhenitisexposedto,orhasrightsto,variablereturnsfrom itsinvolvementwiththe
entity and has the ability to affect those returns through its power to direct the activities of the entity.
_____________________________________
_____________________________________
24
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
3. SIGNIFICANT ACCOUNTING POLICIES - continued
Investment in subsidiaries - continued
Impairment of non-financial assets
Financial instruments
Financial assets
•
financial assets at amortised cost;
•
•
The Group and the Company’s financial assets are mainly financial assets at amortised cost.
Financial assets at amortised cost
Financial
assets
at
amortised
cost
are
financial
assets
that
are
held
within
the
business
model
whose
objective is to collect contractual cash flows (“hold to collect”) and the contractual terms give rise to
cash flows that are solely payments of principal and interest.
Investmentin subsidiariesinthestatementoffinancialpositionoftheCompanyarestatedatcostless
any accumulated impairment losses.
The
carrying
amounts
of
non-financial
assets
are
reviewed
at
the
end
of
reporting
period
to
determine
whether there is any indication of impairment. If any such indication exists, the asset’s recoverable
amountisestimated.Therecoverableamountiscalculated asthepresentvalueoftheexpectedfuture
cash flows, discounted at the original effective interest rate inherent in the assets. The recoverable
amount of the assets is the greater of their net selling price and value in use.
An impairmentlossisrecognisedwhenever thecarrying amountofan assetoritscash-generating unit
exceeds its recoverable amount. Impairment losses are recognised in profit or loss.
In
respect
of
the
Group’s
assets,
an
impairment
loss
is
reversed
if
there
has
been
a
change
in
the
estimatesusedtodeterminethe recoverableamount.Animpairmentlossis reversedonly to the extent
that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, if no impairment loss had been recognised.
A financial instrument is any contract that gives rise to a financial asset of one entityand a financial
liabilityor equityinstrument of another entity. Financial assets and financial liabilities are recognised
when the Company becomes a party to the contractual provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows fromthe financial asset
expire, or when the financial asset and all substantial risks and rewards are transferred. Financial
liabilities are derecognised when they are extinguished, discharged, cancelled or expired.
Financial assets are classified at initial recognition in accordance with how they are subsequently
measured, as follows:
financial assets at fair value through other comprehensive income; and
financial assets at fair value through profit or loss.
_____________________________________
_____________________________________
25
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
3. SIGNIFICANT ACCOUNTING POLICIES - continued
Financial instruments - continued
Financial assets at amortised cost - continued
Impairment of financial assets
On initial recognition, financial assets at amortised cost are recognised at fair value plus transaction
coststhataredirectly attributable totheacquisitionofthefinancial asset.Discounting isomittedwhere
the effect of discounting is immaterial.
Financial assets at amortised cost are subsequently carried at amortised cost using the effective
interestmethodlessimpairmentlosses, ifany. Gain orlossesarerecognisedinprofitor losswhen the
asset is derecognised, modified, or impaired.
The Group and the Company’s financial assets under this classification include cash and cash
equivalents, contract assets, trade and other receivables and loans to related companies.
The Group andtheCompanyrecognisesan allowancefor expectedcredit losses(ECLs)onfinancial
assets that are measured at amortised cost. Equity instruments are not subject to impairment
assessment.
ECLs are based on the difference between the contractual cash flows due in accordance with the
contract and all the cash flows thattheGroup and the Company expect to receive, discounted at an
approximation of the original effective interest rate.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant
increase in credit risk since initial recognition, ECLs are provided for credit losses that result from
defaulteventsthatarepossiblewithin thenext12-months(12-monthECL). Forthose creditexposures
forwhich therehasbeen asignificantincreasein creditrisksince initial recognition, alossallowanceis
requiredforcreditlossesexpectedovertheremaininglifeoftheexposure,irrespectiveofthetimingof
the default (lifetime ECL).
TheGroupandtheCompanyconsidersafinancialassetindefaultwhencontractualpaymentsare90
dayspast due. However,incertain cases, the Company may also consider a financial asset to bein
default wheninternal or external information indicates that the Group and the Company is unlikelyto
receive the outstanding contractual amounts in full. A financial asset is written off when there is no
reasonableexpectationofrecoveringthecontractualcashflowsandusually occurswhenpastduefor
more than one year and not subject to enforcement activity.
For trade receivables and contract assets, the Company applies a simplified approach to measuring
ECLs which recognises lifetime ECLs. The ECLs on these financial assets are estimated using a
provision matrixbasedontheCompany’s historicalcreditlossexperience,adjustedforforward-looking
factors specific to the debtors and the economic enviro nm ent.
_____________________________________
_____________________________________
26
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
3. SIGNIFICANT ACCOUNTING POLICIES - continued
Financial instruments - continued
Financial liabilities
•
•
The Group and the Company’s financial liabilities are mainly financial liabilities at amortised cost.
Financial liabilities at amortised cost
Financial liabilities at amortised cost - continued
Offsetting of financial assets and financial liabilities
Contract assets
Cash and cash equivalents
Financialliabilitiesatamortised cost are initiallyrecognisedat fair value,netof transaction costs and
are subsequentlymeasured at amortised cost using the effective interest method. Allinterest-related
charges under the interest amortisation process are recognised in profit or loss.
Financial liabilities are classified at initial recognition in accordance with how they are subsequently
measured, as follows:
financial liabilities at amortised cost; and
financial liabilities at fair value through profit or loss.
On derecognition, the difference between the carrying amount of the financial liability (or part of a
financialliability) extinguishedortransferredtoanotherpartyandtheconsiderationpaid,includingany
non-cash assets transferred or liabilities assumed, are recognised in profit or loss.
Financial liabilities under this category include borrowings, contract liabilities and trade and other
payables.
Financial assets and liabilities are offset and the net amount reported in the statement of financial
position when there is a legally enforceable right to set off the recognised amounts and there is an
intention to settle on a net basis, or realise the asset and settle the liability simultaneously.
Contractassetsare recognisedwhentheGrouphastransferredgoodsorservices tothecustomerbut
wheretheGroupisyettoestablish anunconditional righttoconsideration.Contractassetsaretreated
as financial assets for impairment purposes.
Cash and cash equivalents include cash in hand, demand deposits and short-term, highly liquid
investments readily convertibletoknown amountsofcash and subjectto insignificant riskof changes in
value. Cash and cash equivalents are carried at cost.
For thepurposes of the statement of cash flows,cash and cash equivalentsconsist ofcash inhand,
cash at banks and bank overdraft.
_____________________________________
_____________________________________
27
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
3. SIGNIFICANT ACCOUNTING POLICIES - continued
Share capital
Borrowings
Contract liabilities
Related parties
Fair value measurement
When
an
asset
or
liability,
financial
or
non-financial,
is
measured
at
fair
value
for
recognition
or
disclosurepurposes,thefairvalue isbasedonthe pricethat wouldbereceived tosellanassetorpaid
to transfer a liabilityin an orderly transaction between market participants at the measurement date;
andassumesthatthetransactionwilltakeplaceeither:intheprincipalmarket; orintheabsenceofa
principal market, in the most advantageous market.
Ordinarysharesareclassifiedasequity. Incremental costsdirectlyattributabletotheissueofordinary
shares are recognised as a deduction from equity.
Borrowingsareinitially recognisedatfairvaluelesstransactioncostsandaresubsequently measured
at amortised cost using the effective interest method.
Contract
liabilities
represent
the
Group's
obligation
to
transfer
goods
or
services
to
a
customer
and
are
recognisedwhenacustomerpays consideration,orwhentheGrouprecognisesareceivabletoreflect
its unconditional right to consideration (whichever is earlier) before the Group has satisfied its
performance obligation in a contract with the customer.
Parties
are
considered
to
be
related
if
one
party
has
the
ability,
directly
or
indirectly,
to
control
the
other
partyorexercisesignificantinfluenceovertheotherpartyinmakingfinancialandoperatingdecisions.
Partiesarealsoconsideredtoberelatediftheyaresubjecttocommon controlorcommon significant
influence. Related parties may be individuals or corporate entities.
Fair
value
is
measured
using
the
assumptions
that
market
participants
would
use
when
pricing
the
asset or liability,assuming theyact intheir economic best interests. For non-financial assets, the fair
valuemeasurement isbasedonitshighestandbestuse.Valuationtechniquesthatareappropriatein
thecircumstancesandforwhichsufficientdataisavailable tomeasurefairvalue,isused,maximising
the use of relevant observable inputs and minimising the use of unobservable inputs.
Assets
and
liabilities
measured
at
fair
value
are
classified
into
three
levels,
using
a
fair
value
hierarchy
that reflects the significance of the inputs used in making the measurements. Classifications are
reviewedat each reporting date and transfers between levels are determined based on a reassessment
of the lowest level of input that is significant to the fair value measurement.
For
recurring
and
non-recurring
fair
value
measurements,
external
valuers
may
be
used
when
internal
expertiseiseithernotavailableorwhen thevaluation isdeemedtobesignificant.Externalvaluersare
selectedbasedonmarket knowledgeandreputation.Where thereisasignificantchangeinfairvalue
of an asset or liability from one period to another, an analysis is undertaken, which includes a
verificationofthemajorinputsappliedinthelatestvaluation andacomparison,whereapplicable, with
external sources of data.
_____________________________________
_____________________________________
28
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
3. SIGNIFICANT ACCOUNTING POLICIES - continued
Earnings per share
4. SIGNIFICANT JUDGEMENTS AND CRITICAL ESTIMATION UNCERTAINTIES
Revenue from contracts with customers
Expected credit losses
Fair value of investment property and industrial buildings
The Group uses a provision matrix to calculate ECLs for trade receivables and contract assets. The
provision rates are based on days past due for various customer segments that have similar loss
patterns.
The provision matrix is initially based on the Group’s historical observed default rates. The Group
calibratesthe matrix toadjust the historical creditlosses experience withforward-looking information.
Forinstance, ifforecasteconomicconditions(i.e.,grossdomesticproduct)areexpectedtodeteriorate
overthenextyear, leadingtoapotential increasednumberofdefaults inthemanufacturingsector,the
historical default rates are adjusted. At everyreporting date, the historical observed default rates are
updated and changes in the forward-looking estimates are analysed.
Investmentproperty and industrial buildings are revalued to fairvalue by using either internal valuations
or valuations preparedby external independent valuers. These valuations arebased upon assumptions
includingfuturerentalvalue,anticipatedpropertycosts, future developmentcosts andtheappropriate
discountrate. Reference is also made to market evidenceof transaction prices for similar properties.
These estimates are subjective in nature and involve uncertainties and matters of significant
judgements and, therefore, cannot be determined with prec ision.
Basic
earnings
per
share
is
calculated
by
dividing
the
profit
for
the
period
attributable
to
ordinary
equity
holders of the Company by the weighted average number of ordinary shares outstanding during the
period.
The
preparation
of
these
financial
statements
in
accordance
with
IFRS
as
adopted
by
the
EU
requires
the directors to make judgements, estimates and assumptions that affect the reported amounts of
assets, liabilities, revenue, and expenses in the financial statements.These judgements,estimates and
assumptions,which arecontinually evaluated, arebasedonhistoricalexperienceandonothervarious
factors,includingexpectationsoffutureevents,thatthedirectorsbelievedtobereasonableunderthe
circumstances.Theresulting accounting judgementsand estimateswill seldomequal the related actual
results.Thejudgementsandestimates thataresignificanttothesefinancialstatementsarediscussed
below.
Management determines revenue through the estimation of the stage of completion and expected
outcome of the project. Given this estimation process, it is possible that changes in the future
conditions could require a change in the recognised amount of revenue.
_____________________________________
_____________________________________
29
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
4. SIGNIFICANT JUDGEMENTS AND CRITICAL ESTIMATION UNCERTAINTIES - continued
Incremental borrowing rate
Impairment of non-financial assets
Ukraine war
5. REVENUE
2022
2021
€
€
Revenue from contracts with customers
11,831,725
16,268,211
6. OTHER INCOME
2022
2021
€
€
Management fees
213,496
275,595
Wage supplements
-
5,250
Refunds
-
6,233
Others
-
6,774
213,496
293,852
Where theinterestrateimplicitin aleasecannotbereadily determined,anincrementalborrowingrateis
estimated to discount future lease payments to measure the present value of the lease liability at the
lease commencement date. Such a rate is based on what the Group estimates it would have to paya
thirdpartyto borrowthe funds necessaryto obtainan asset of a similar valueto the right-of-use asset,
with similar terms, security and economic environm ent.
The Group assesses impairment of non-financial assetsat eachreportingdatebyevaluatingconditions
specific to the Group and to the particular asset that may lead to impairment. If an impairment trigger
exists,therecoverableamountoftheassetisdetermined.Thisinvolvesfairvaluelesscostsofdisposal
or value-in-use calculations,which incorporate a number of key estimates and assumptions.The directors
assessedthattheproperty,plantandequipment,intangibleassets andinventoriesoftheGrouparenot
impaired as at 31 December 2022 and 2021.
Duringtheyear,awarbetweenUkraineandRussiawasregistered.TheGrouphasnotmadeany sales
overseas anditdoes nothave any contractsforraw materialsinUkraine orRussia.Furthermore,none of
the Group's clients, which are Malta-based have suspended their projects or cancelled orders.
Meanwhile, managementhas assessedthatthewarhasresultedinanincreaseinrawmaterialpricesall
around Europe, owever this has not left any outstanding impact on the financial statements nor any
outstandinguncertaintieswithrespecttoeventsorconditionswhichmayimpacttheGroupunfavourable
as at the reporting period or subsequently as a result of a prolonged war.
Group
Group
_______________________________________
_______________________________________
30
________________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
7. OPERATING PROFIT/(LOSS)
Operating profit/(loss) is stated after charging:
2022
2021
2022
2021
€
€
€
€
Staff costs (see Note 8) 3,305,601 3,900,499 - -
Directors' remuneration (see Note 8) 268,744 277,663 - -
Directors' fees 36,217 35,931 27,073 26,887
Auditors' remuneration:
- Statutory audit 34,903 33,239 14,868 14,160
- Review services (interim reports) 2,596 2,360 2,596 2,360
- Tax compliance services 1,100 1,100 472 472
- Other assurance services 250 - -
- Other non-assurance services 950 500 - -
Depreciation (see Note 13) 955,115 831,760 - -
8. STAFF COSTS
2022
2021
2022
2021
€
€
€
€
Directors' remuneration 266,068 274,997 - -
Social security costs and maternity fund 2,676 2,666 - -
268,744 277,663 - -
Salaries and wages 3,087,386 3,655,925 - -
Social security costs and maternity fund 218,215 244,574 - -
3,305,601 3,900,499 - -
9. FINANCE AND DIVIDEND INCOME
2022
2021
2022
2021
€
€
€
€
Interest on loans receivable
41,899
205,789
342,299
318,500
Bank interest
-
33
-
-
41,899
205,822
342,299
318,500
Group Company
Group Company
TheaveragenumberofpersonsemployedbytheGroupduringtheyearwere100productionpersonnel
and 8 administrative personnel (2021: 124 and 7, respectively).The Company has no employees of its
own.
Group Company
_______________________________________
_______________________________________
31
________________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
10. FINANCE COSTS
2022
2021
2022
2021
€
€
€
€
Interest on bonds payable
292,310
250,000
292,310
250,000
Interest on bank borrowings
205,672
134,010
-
-
Interest on lease liabilities
175,136
176,892
-
-
Interest on late payments
44,568
22,750
458
-
Bank interest
168
-
168
-
Interest on hire of equipment
5,801
-
-
-
723,655
583,652
292,936
250,000
11.
OTHER LOSSES
12. TAX
2022
2021
2022
2021
€
€
€
€
Current tax
153,966
384,686
-
20,157
Adjustment of prior period current tax
(199)
46,272
(199)
46,272
Deferred tax credit
45,442
(122,239)
-
-
199,209
308,719
(199)
66,429
2022
2021
2022
2021
€
€
€
€
Profit/(loss) before tax 417,526
468,117
(237,189)
(3,649)
Tax at statutory rate of 35%
146,134
163,841
(83,016)
(1,277)
Adjustments for:
- non-taxable income (22,905) (72,026)
(8,330)
-
- non-deductible expenses 488,650 428,180
91,346
25,252
- adjustment of prior period current tax (199) 46,272
(199)
46,272
- absorbed capital allowances (132,543) (131,491)
-
-
Other temporary differences - (122,239)
-
-
Other differences 17,463 (3,818)
-
(3,818)
Non-taxable gain on fair value (260,430)
236,170
308,719
(199)
66,429
Group Company
During the year-ended31 December 2022,theGroup disposed of some vehicles resulting ina loss on
disposal amounting to €1,721 (2021: €11,700).
Tax expense for the period is comprised of the following:
Group Company
Thetaxontheprofits/(loss) atstatutoryrateof35% reconcilestothetaxexpense/(credit)fortheperiod
as follows:
Group Company
_______________________________________
_______________________________________
32
________________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
12. TAX - continued
The movement in deferred tax for the year is analysed as follows:
2022
2021
2022
2021
€
€
€
€
At the beginning of year
(1,592,788)
(355,027)
-
-
Credited to profit or loss
(45,442)
122,239
-
-
Revaluation Reserve
(1,360,000) -
-
(1,638,230)
(1,592,788)
-
-
2022
2021
2022
2021
€
€
€
€
Tax effect of temporary differences
arising from:
- revaluation gain
(79,520)
- Expected credit losses
14,575
104,098
-
-
- Accrued interest receivable
19,503
18,141 -
-
(45,442)
122,239
-
-
Paymentsamountingto€189,931weremadeafteryear-end topartially settletheamountoutstandingof
income tax payable as at year-end.
Group Company
Deferred income taxes are calculated on all temporary differences under the liability method using a
principal rate of 35%. The deferred tax credit for the year represents:
Group Company
_______________________________________
_______________________________________
33
________________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
13.
PROPERTY, PLANT AND EQUIPMENT
Right-of-use
asset
Industrial
buildings
Machinery
Office
furniture
Motor
vehicles
Electronic
equipment
Electric hand
tools
Total
€
€
€
€
€
€
€
€
Year ended 31 December 2021:
Cost
Opening balance 3,621,065 11,246,057 1,004,435 105,271 706,517 69,598 224,117 16,977,060
Additions - 104,110 25,544 8,745 42,279 11,735 24,433 216,846
Revaluation increase recognised in equity - 8,840,194 - - - - - 8,840,194
Disposals - - - - (35,000) - - (35,000)
Closing balance 3,621,065 20,190,361 1,029,979 114,016 713,796 81,333 248,550 25,999,100
Accumulated depreciation
Opening balance 174,816 641,184 513,812 26,172 412,296 48,742 120,618 1,937,640
Depreciation 113,972 287,588 205,996 11,402 142,759 20,333 49,710 831,760
Disposals - - - - (21,000) - - (21,000)
Reversal of depreciation - (376,606) - - - - - (376,606)
Closing balance 288,788 552,166 719,808 37,574 534,055 69,075 170,328 2,371,794
Carrying amount at 31 December 2021 3,332,277 19,638,195 310,171 76,442 179,741 12,258 78,222 23,627,306
Year ended 31 December 2022:
Cost
Opening balance 3,621,065 20,190,361 1,029,979 114,016 713,796 81,333 248,550 25,999,100
Additions - 123,294 - 5,485 - 4,192 10,569 143,540
Disposals - - - - (15,500) (1,228) - (16,728)
Closing balance 3,621,065 20,313,655 1,029,979 119,501 698,296 84,297 259,119 26,125,912
Accumulated depreciation
Opening balance 288,788 552,166 719,808 37,574 534,055 69,075 170,328 2,371,794
Depreciation 113,973 425,818 205,996 11,950 139,659 5,895 51,824 955,115
Disposal - - - - (12,400) (307) - (12,707)
Closing balance 402,761 977,984 925,804 49,524 661,314 74,663 222,152 3,314,202
Carrying amount at 31 December 2022 3,218,304 19,335,671 104,175 69,977 36,982 9,634 36,967 22,811,710
Group
__________________________________________________________
____________________________________________________
34
__________________________________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
14. INVESTMENT PROPERTY
2022
2021
€
€
Fair value 5,494,000 4,522,715
Movements in investment property during the period were as follows:
2022
2021
€
€
Opening balance
4,522,715
4,522,184
Additions from subsequent expenditures
-
531
Revaluation gain
971,285
-
Ending balance
5,494,000
4,522,715
Refer to Note 33 to these financial statements for the fair value measurement.
15. INTANGIBLE ASSET
16.
INVESTMENT IN SUBSIDIARIES
Ownership
2022 2021
Subsidiary
Country
%
€
€
JD Birkirkara Limited Malta 100
4,001,200
4,001,200
JD Operations Limited Malta 100
3,501,200
3,501,200
7,502,400
7,502,400
Group
The Group’s investment property consists of land in Birkirkara, Malta. The fair value of the investment
propertyas at 31 December 2022 amounts to €5,494,000 (2021: €4,522,715). The carryingamountof the
investment property which would have been included in the financial statements had it been carried at
cost is €4,022,715 (2021: €4,022,715).
The fair value of the investment propertywas appraised byanindependentarchitectand was based upon
assumptions including future rental value, anticipated property costs, future developments and an
appropriate discount rate. The valuation has been based on proprietary databases of prices of
transactions for properties of similar nature, location and condition.
The valuation was carried out by a qualified independent architect with the last professional valuation
carried out on 01 September 2022.
The investmentproperty is serving as asecurity by means ofa hypothecforbankingfacilities ofa related
company.
The Group's intangibleasset pertains to the intellectual propertyright to use the business brand, logo,
and tradename 'JSDimech'. The directors are of the opinion that this has an indefinite useful life.
The followingare the subsidiaries of the Group with the corresponding shareholding percentage of the
Group and the amount of the investment carried in the Company's statement of financial position:
Company
_____________________________________
_____________________________________
35
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
16.
INVESTMENT IN SUBSIDIARIES - continued
Net assets
Profit/(Loss)
Subsidiary
€
€
JD Birkirkara Limited 5,009,601 880,739
JD Operations Limited 12,012,919 (436,592)
17. FINANCIAL ASSETS AT AMORTISED COST
2022
2021
2022
2021
€
€
€
€
Non-current
Loan to a subsidiary (i)
-
-
7,004,388
4,884,810
Loan to ultimate parent (ii)
1,663,556
1,618,922
-
-
1,663,556
1,618,922
7,004,388
4,884,810
Current
Amounts owed by subsidiaries (iv)
-
-
-
10,380
Amounts owed by ultimate parent (iv)
48,975
45,794
45,400
45,400
Amounts owed by a related company (iv)
5,331,980
1,646,026
-
-
Other receivables (iii)
13,239
1,459,076
-
-
5,394,194
3,150,896
45,400
55,780
i.
ii.
iii.
iv.
Thefollowing tablesummarizesthefinancialinformationoftheCompany'ssubsidiariesasat andforthe
year ended 31 December 2022.
Group Company
The loan to a subsidiary is split as follows:
€4,900,000whichisunsecured,earns interestat6.5%perannum andisrepayablebynotlaterthan
30 September 2027.
€2,130,738 whichisunsecured,earnsinterestat6.35%perannumandisrepayable by notlaterthan
25 November 2032.
Interestincomefortheperiodfromtheseloans amountedto€342,299(2021:€318,500).Theamount
is net of €26,350 expected credit losses (2021: €15,190).
The loan to ultimate parent is unsecured, bears interest at 4.5% per annum and is repayableby 1
October 2024. The amount is stated net of expected credit loss of €3,465 (2021: €3,456).
The other receivables are stated net of expected credit losses of €41 (2021: €4,585). These are
unsecured, interest free.
Theamountsowed by subsidiaries, ultimateparentandrelatedcompany areunsecured,interest-free,
and repayable on demand. The amounts owed by a related company is stated net of €17,022
expected credit losses (2021: €5,119).
_____________________________________
_____________________________________
36
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
18. INVENTORIES
2022
2021
€
€
Raw materials
1,350,088
1,468,103
Work-in-progress
13,919
61,193
1,364,007
1,529,296
19. TRADE AND OTHER RECEIVABLES
2022
2021
2022
2021
€
€
€
€
Non-current
Trade receivable (i)
2,313,207
1,084,518
-
-
Current
Trade receivables (i)
4,019,148
5,560,227
-
-
Other receivables
6,425,000
-
6,425,000
-
Prepayments
368,352
1,086,755
-
-
Accrued interest income (ii)
-
-
225,166
201,367
10,812,500
6,646,982
6,650,166
201,367
i.
ii. Accrued interest income relates to the interest on the loan to a subsidiary.
20. CONTRACT ASSETS
2022
2021
€
€
At 1 January
4,514,034
1,984,147
Additions
2,017,053
2,698,382
Movement in provision for expected credit losses
(14,111)
(168,495)
At 31 December
6,516,976
4,514,034
Contract assets are stated net of expected credit losses of €146,392 (2021: €237,885).
Group
Group Company
Trade receivables are stated net of allowance for expected credit losses amounting to €336,120
(2021: €301,878). Expected credit losses recognised for the year amounted to €34,242 (2021:
€139,576). The non-current portion comprises of the following:
€761,596 repayable in principal repayments of €27,200 per month.
€1,357,593 repayable in principal repayments of €33,112 per month.
€201,108 repayable in principal repayments of €39,641 per month.
Group
_____________________________________
_____________________________________
37
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
21. SHARE CAPITAL
2022
2021
€
€
Authorised share capital
7,543,621 Ordinary shares of
€1 each
7,543,621
7,543,621
3,079 Ordinary A shares of
€1 each
3,079
3,079
7,546,700
7,546,700
Issued share capital
7,543,621 Ordinary shares of
€1 each
7,543,621
7,543,621
3,079 Ordinary A shares of
€1 each
3,079
3,079
7,546,700
7,546,700
The holders of "Ordinary" shares have all the rights in the Company.
22. REVALUATION RESERVE
2022
2021
€
€
Increase in fair value of land
7,856,800
9,216,800
Deferred tax element (Note 12)
-
(1,360,000)
7,856,800
7,856,800
23. EARNINGS/(LOSS) PER SHARE
2022
2021
2022
2021
Profit for the period attributable
to owners of the Company
€218,317
€159,398
(
€236,990)
(€70,078)
Weighted average number of
ordinary shares
7,543,621
5,464,014
7,543,621
5,464,014
Basic earnings per share €0.03
€0.03
(€0.03)
(€0.01)
Group
Group and Company
Theholdersof"Ordinary A" sharesshall notbeentitled toanyrightsin theCompany, andshall therefore
notbeentitledtovoteatanygeneralmeetingoftheCompany.However, theyhavetherighttoreturnof
capital on their shares upon liquidation of the Company.
During the year ended 31 December 2022, the Company did not declare any dividends (2021: NIL).
In 2021, the Company increased its authorised and issued shares by €7,301,600 through the
capitalisation of debt classified as other equity.
Thisamountrepresents themovement inthefair valueof the land,classifiedunderproperty,plantand
equipment.
Group Company
The
Group
or
the
Company
has
no
potential
ordinary
shares
that
would
cause
the
dilution
of
basic
earnings/(loss) per share.
_____________________________________
_____________________________________
38
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
24. BORROWINGS
2022
2021
2022
2021
€
€
€
€
Non-current
€14,000,000 bonds, 4.85%, unsecured (i)
13,625,498
4,916,640
13,625,498
4,916,640
Bank loan I (ii)
417,367
554,697
-
-
Bank loan II (iii)
244,582
838,634
-
-
Revolving facility (iv)
2,762,536
1,088,000
-
-
Amounts due to the ultimate
shareholder (vi)
-
-
-
-
17,049,983
7,397,971
13,625,498
4,916,640
Current
Bank loan I (ii)
137,707
134,310
-
-
Bank loan II (iii)
594,297
577,243
-
-
Revolving facility (iv)
2,327,676
2,380,037
-
-
Bank overdraft
8,807
501,094
-
-
Amounts due to subsidiaries (vi)
-
-
234,370
-
Amounts due to related company (v)
17,445
9,655
3,592
3,592
3,085,932
3,602,339
237,962
3,592
i.
ii.
iii.
iv.
v.
Group Company
Duringtheyear,theCompanyissuedanewtrancheofbondsamountingto€14,000,000.Thebonds
will mature on 25 November 2032 with annual interest payments every 25th of November until
maturity.Theamountpresentedisnetofunamortisedbondissuecostsof€374,502(2021:€83,360).
InterestexpenseonthebondsfortheyearareasdisclosedinNote10tothesefinancialstatements.
Thefairvalue ofthebonds forevery €100bondasat31December2022 was€99.99 (2021:€100).A
bond exchange offer was accepted by all prior bondholders whereby the 50,000 securities with a
nominalvalueof€100wereexchangedto50,000securitieswithanominalvalueof€100inthenew
tranche. Additionally a premium of €2 per bond was paid by the Company amounting to €100,000.
Bank loan Ipertains to aloan with a localbankunder theMalta Development Bank'sCOVID-19 Assist
Program.The loan shall bearinterest at a fixedrate of2.5% perannumforthefirsttwo years fromthe
takeupoftheloanandthereafterattherateoftheaggregateofthemarginof2.75% perannumand
thethree-month EURIBOR.The loanisrepayableoveraperiodof sixyearsinclusiveofa 12-month
moratoriumon theprincipal and six-monthson interest. Following the moratorumperiod, the loanshall
be repayablein 60 monthlyinstalments of €12,500. The loanis secured bya first generalhypothec
over the Company's assets and guarantee by the ultimate shareholder.
Bank loan II is a loan with another local bank taken as well under the Malta Development Bank's
COVID-19 Assist Programand is fullyutilised as atyear-end. The loan shall bear interest at the rate of
the aggregate of the margin of 3.15% per annum and the three-month EURIBOR. The loan is
repayablein monthly instalments of €50,917 beginning December 2020 until May 2024. The loan is
secured by a first special hypothec for the amount of €200,000 over the Company assets.
Therevolvingfacility bearsinterestattherateof5%perannumplusthe12-monthEURIBORandis
repayable in accordance with the term sheet as agreed with the bank for each drawdown. The
revolving facility is of €6,000,000.
Theamountsduetosubsidiariesandrelatedcompanyareunsecured,interest-free,andrepayable on
demand.
_____________________________________
_____________________________________
39
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
25. LEASE LIABILITIES
2022
2021
€
€
Due after more than five years
9,859,203
10,082,085
Due after one year but within five years
887,972
883,412
Due within one year
218,322
211,140
Total gross lease liabilities
10,965,497
11,176,637
Discounting
(7,473,811)
(7,648,509)
Present value of lease liabilities 3,491,686
3,528,128
Non-current
3,446,530
3,492,124
Current
45,156
36,004
3,491,686
3,528,128
Movements in lease liabilitiies during the year were as follows:
2022
2021
€
€
At 1 January
3,528,128
3,562,376
Accretion of interest
175,136
176,892
Lease payment
(211,578)
(211,140)
At 31 December 3,491,686
3,528,128
The following were the amounts recognised in profit or loss relating to leases:
2022
2021
€
€
Depreciation charge
113,973
113,972
Interest expense
175,136
176,892
289,109
292,885
26. CONTRACT LIABILITIES
2022
2021
€
€
At 1 January
2,212,033
696,385
Additions
1,659,578
1,752,718
Payments received in advance
522,115
459,315
Transfers to revenue
(1,504,226)
(696,385)
At 31 December 2,889,500
2,212,033
Group
The Group's lease liabilities pertainto the lease of industrial property under a temporary emphytheusisfor
aperiodof 65yearsfrom 8March 2018andtheleaseofacommerial property(includinggarage)for a
periodof12yearsfrom1October2019.TheGroup'sobligations undertheseleasesaresecuredbythe
lessor's title over the property. Generally, the Group is restricted from sub-leasing the property.
Group
Group
Group
_____________________________________
_____________________________________
40
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
27. TRADE AND OTHER PAYABLES
2022
2021
2022
2021
€
€
€
€
Non-current
Trade payables
347,196
740,755
-
-
Indirect taxes and social
security contribution (i)
3,217,115
3,157,967
-
-
3,564,311
3,898,722
-
-
Current
Trade payables
4,282,763
3,639,670
3,905
10,083
Accrued expenses
898,453
742,178
86,334
170,665
Indirect taxes and social
security contribution (i)
2,249,057
2,491,423
-
-
7,430,273
6,873,271
90,239
180,748
i.
28. CASH AND CASH EQUIVALENTS
2022
2021
2022
2021
€
€
€
€
Cash on hand
6,951
467
-
-
Cash at bank
884,532
360,573
9,987
205
Bank overdraft
(8,807)
(501,094)
-
-
882,676
(140,054)
9,987
205
29. SIGNIFICANT NON-CASH TRANSACTIONS
Group Company
Group Company
Payments amountingto€447,396were madeafteryear-end topartially settletheamountoutstanding
of indirect taxes and social security contributions as at year-end.
Cashandcash equivalentsin thestatements of financialpositionis comprised of cash at banks. Cash
andcashequivalents inthestatementsoffinancialpositionreconcilestothecashandcashequivalents
in the statements of cash flows as follows:
There were no significant non-cash transactions during the year.
_____________________________________
_____________________________________
41
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
30. RELATED PARTY DISCLOSURES
The following summarises the transactions with related parties that transpired during the period:
2022
2021
2022
2021
€
€
€
€
Related company
Revenue from contracts
6,259,259
1,689,325
-
-
Recharges
789,885
318,126
-
-
Management fees
213,496
275,595
-
-
Net advances paid
2,200,841
-
-
-
Ultimate parent company
Interest income
41,643
189,461
-
-
Net advances paid
6,131
-
-
-
Ultimate shareholder
Net advances paid
457,635
103,874
-
-
Subsidiaries
Interest income
-
-
342,299
318,500
Dividends received - net
-
-
-
-
Recharges
-
-
(12,913)
(12,727)
Net advances paid
-
-
1,885,292
(15,453)
31. FINANCIAL RISK MANAGEMENT
Exposure to credit, liquidity, and interest rate risks arise from the Group's activities.
At year end, theGroup'smainfinancial assetson thestatement offinancial position is comprisedofcash
atbanks,tradeandotherreceivables(excludingprepaymentsandaccruedincome), andotherfinancial
assets at amortised cost. There were no off-balance sheet financial assets.
TheCompanycarriesouttransactionswithrelatedpartiesonaregularbasisandintheordinarycourse
of the business.
Group Company
The outstanding amounts arising from transactions with related parties and the related terms and
conditions are disclosed in Notes 17 and 24 to these financial statements.
At year end, the Group's main financial liabilitieson the statement of financial positionis comprised of
trade and other payables (excluding accruals), and borrowings. There were nooff-balancesheet financial
liabilities.
_____________________________________
_____________________________________
42
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
31. FINANCIAL RISK MANAGEMENT - continued
Timing of cash flows
Capital risk management
Credit risk
The presentation of the financial assets and liabilities listed above under the current and non-current
headingswithin thestatementsoffinancialposition isintended toindicatethetiminginwhichcashflows
will arise.
TheGroupmanages itscapitaltoensurethatitwillbeabletocontinueasagoingconcernandcomply
with the requirements of the prospectus issued in relation to the bonds while maximising the return to
stakeholders through the optimisation of the debt and equity balance.
The
capital
structure
of
the
Group
consists
of
equity
attributable
to
equity
holders
comprising
issued
share capital, reserves, and borrowings as disclosed in Notes 21, 22, 23 and 24 to these financial
statements and in the statements of changes in equity.
Credit risk refers to the risk that a counterparty in the financial assets will default on its contractual
obligations resultinginfinanciallosstotheGrouportheCompany. TheGroup obtainsguaranteeswhere
appropriate to mitigate credit risk. The maximum exposure to credit risk at the reporting date to
recognisedfinancialassetsisthecarryingamount,netofanyprovisionsforimpairmentofthoseassets,
asdisclosedinthestatementoffinancialpositionandnotestothefinancial statements.TheGroupdoes
not hold any collateral.
TheGrouphasadoptedalifetimeexpectedlossallowanceinestimatingexpectedcreditlossestotrade
receivables and contract assets through the use of a provision matrix using fixed rates of credit loss
provisioning.Theseprovisions are considered representativeacrossall customersofthe Group based on
recent sales experience, historical collection rates and forward-looking information that is available.
Expected credit losses recognised on trade receivables and contract assets amounted to €482,512
(2021:
€539,763).
Generally, trade receivables are written off when there is no reasonable expectation of recovery.
Indicators of this include the failure of a debtor to engage in a repayment plan, no active enforcement
activity and a failure to make contractual payments for a period greater than one year.
As at 31 December2022, the Group has a credit riskconcentration with the ultimate parent companyand
athirdparty whichaccountedfor8%and0%(2021:14%and12%)oftheGroup'stotal financialassets,
respectively. TheGrouprecognisedexpectedcreditlossesonthesefinancialassetsasat31December
2022 amounting to €3,465 and €41 (2021: €3,456 and €4,585), respectively.
As at 31 December2022, the Company has a credit riskconcentration with a subsidiary whichaccounted
for52%(2021:99%)oftheCompany'stotalfinancialassets.Expectedcredit lossesrecognisedfor this
balance as at 31 December 2022 amounted to €26,350 (2021: €15,190).
Thecreditriskrelatingtocashat bankis consideredto belowinview ofmanagement’spolicy ofplacing
it with reputable financial institutions.
_____________________________________
_____________________________________
43
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
31.
FINANCIAL RISK MANAGEMENT - continued
Credit risk related to trade receivables are as follows:
Gross
amount
ECL
Carrying
amount
€
€
€
Current
3,918,339 (10,602) 3,907,737
30 to 89 days
30,450 (9,019) 21,431
90 to 179 days
145,891 (79,631) 66,260
180 to less than 1 year
108,414 (86,814) 21,600
More than 1 year
2,465,381 (150,054) 2,315,327
6,668,475 (336,120) 6,332,355
Current
5,122,005 (100,368) 5,021,637
30 to 89 days
105,785 (22,283) 83,502
90 to 179 days
120,258 (62,560) 57,698
180 to less than 1 year
1,568,797 (102,985) 1,465,812
More than 1 year
29,777 (13,681) 16,096
6,946,622 (301,877) 6,644,745
Liquidity risk
Within
Between
More than
12 months
1-5 years
5 years
€
€
€
31 December 2022
Bonds payable (including interest) 66,970 2,716,000 18,074,000
Amounts due to a related company 17,445 - -
Trade payables (excluding accrued interest) 5,114,246 347,196 -
Indirect taxes and social security contribution 2,249,057 2,839,071 378,044
Revolving facility 2,327,676 2,762,536 -
Bank Loans 732,004 661,949 -
Lease liabilities 45,156 221,682 3,225,298
10,552,554 9,548,434 21,677,342
31 December 2021
31 December 2022
TheGroupis exposedto liquidity riskinrelationtomeetingfutureobligationsassociated withitsfinancial
liabilities. Prudent liquidity risk management includes maintaining sufficient liquid assets and available
borrowing facilities to be able to pay debts as and when they become due and payable.
The directors manage liquidity risk by maintaining adequate cash reserves and available borrowing
facilitiesbycontinuouslymonitoringactualandforecastcashflowsandmatching thematurityprofilesof
financial assets and liabilities.
The following table details the undiscounted contractual cash flows arising from the Group's financial
liabilities:
Group
_____________________________________
_____________________________________
44
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
31. FINANCIAL RISK MANAGEMENT - continued
Liquidity risk - continued
Within
Between
More than
12 months
1-5 years
5 years
€
€
€
31 December 2021
Bonds payable (including interest) 154,110 1,000,000 5,750,000
Amounts due to a related company 9,655 - -
Trade payables (excluding accrued interest) 7,276,163 3,564,311 -
Indirect taxes and social security contribution 2,491,423 1,878,963 569,624
Revolving facility 2,380,037 652,800 435,200
Bank Loans 711,553 1,262,685 131,042
Lease liabilities 211,140 883,412 10,082,085
13,234,081 9,242,171 16,967,951
Within
Between
More than
12 months
1-5 years
5 years
€
€
€
31 December 2022
Bonds payable (including interest) 66,970 2,716,000 18,074,000
Amounts due to related company 3,592 - -
Amounts due to group companies 234,370 - -
Trade and other payables (excluding accrued interest) 23,269 - -
328,201 2,716,000 18,074,000
31 December 2021
Bonds payable (including interest) 154,110 1,000,000 5,750,000
Amounts due to related company 3,592 - -
Trade and other payables (excluding accrued interest) 26,638 - -
184,340 1,000,000 5,750,000
Interest rate risk
Interestraterisk istherisk thatthefairvalueoffuturecashflows ofafinancialinstrument willfluctuate
because of changes in market interest rates.
The Group's interest rate risk arises from the bank overdraft and revolvingfacility whichare subject to
varying interest rates accordingtorevisions tothebank'sbaserate.Interestrate onthebondspayableis
fixed whilethe other financialliabilitiesare interest-free, thus, interest rate risk does not applyto these
financial instruments.
Group
Company
_____________________________________
_____________________________________
45
_____________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
32. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
Amounts
Amounts
Bank loans and
due to a related
due to ultimate
revolving
Lease
Other
company
shareholder
facility
Bonds
liabilities
payables
Total
€
€
€
€
€
€
€
31 December 2022:
Beginning balance
9,655
-
5,572,921
4,916,640
3,528,128
154,110
14,181,454
Cash flows from financing activities
7,790
-
706,429
8,622,604
(211,578)
(424,875)
8,700,370
Net non-cash changes
-
-
204,815
86,254
175,136
337,735
803,940
Balance at 31 December 2022 17,445 - 6,484,165 13,625,498 3,491,686 66,970 23,685,764
31 December 2021:
Beginning balance
9,655
453,430
4,815,611
4,905,970
3,562,376
154,110
13,901,152
Cash flows from financing activities
-
(103,874)
694,508
-
(211,140)
(343,958)
35,536
Net non-cash changes
-
(349,556)
62,802
10,670
176,892
343,958
244,766
Balance at 31 December 2021 9,655 - 5,572,921 4,916,640 3,528,128 154,110 14,181,454
Amounts
Amounts
Bank loans and
due to, subsidiaries and
due to ultimate
revolving
Lease
Other
Total
a related company
shareholder
facility
Bonds
liabilities
payables
€
€
€
€
€
€
€
31 December 2022:
Beginning balance
3,592
-
-
4,916,640
-
154,110
5,074,342
Cash flows from financing activities
234,370
-
-
8,622,604
-
(379,450)
8,477,524
Net non-cash changes
-
-
-
86,254
-
292,310
378,564
Balance at 31 December 2022 237,962 - - 13,625,498 - 66,970 13,930,430
31 December 2021:
Beginning balance
3,592
-
-
4,905,970
-
154,110
5,063,672
Cash flows from financing activities
-
-
-
-
-
(250,000)
(250,000)
Net non-cash changes
-
-
-
10,670
-
250,000
260,670
Balance at 31 December 2021 3,592 - - 4,916,640 - 154,110 5,074,342
Liabities arising from financing activities are those for which cash flows were, or future cash flows will be classified in the Company's statement of cash
flows as cash flows used in financing activities.
Group
Company
_____________________________________
________________________________________
46
________________________________________
JD CAPITAL PLC
Annual Report and Consolidated Financial Statements - 31 December 2022
NOTES TO THE FINANCIAL STATEMENTS - continued
33. FAIR VALUE MEASUREMENT
Financial instruments
Investment property
Industrial buildings
Thefairvalueoftheindustrialbuildings,appraisedbyanindependentvaluer,wasdeterminedbasedon
level 3 inputs. These level 3 inputs include future rental value, anticipated property costs, future
developments and an appropriate discount rate.
TheGroupmeasures fairvaluesusingthefairvaluehierarchythatreflectsthesignificanceoftheinputs
used in making the measurements:
Level1:Quotedprices (unadjusted)inactivemarkets for identicalassets orliabilitiesthattheentitycan
access at the measurement date;
Level2:Valuationtechniquesbasedonobservableinputs,either directly(i.e.asprices)orindirectly (i.e.,
derived from prices). This category includes instruments valued using: quoted market prices in active
markets for similar instruments; quoted prices for identical or similar instruments in markets that are
considered less than active; or other valuation techniques where all significant inputs are directly
observable from market data; and
Level 3: Valuation techniques using significant unobservable inputs. This category includes all
instruments where the valuation technique includes inputs not based on observable data and
unobservable inputs have a significant effect on the instruments valuation. This category includes
instruments that are valued based on quoted market prices for similar instruments where significant
unobservable adjustments or assumptions are required to reflect differences between the instruments.
The carrying amounts of cash at banks, trade and other receivables (excluding prepayments), other
financial assets at amortised cost, trade and other payables (excluding accruals), and other financial
liabilitiesatamortisedcost arecarriedattheirpresentvaluesusingtheeffective interestmethod(where
discounting is material) which is a reasonable approximation of their fair values as at period end.
Thefairvalue oftheinvestment property, appraisedby anindependent valuer, wasdeterminedbased on
level 3 inputs. These level 3 inputs include future rental value, anticipated property costs, future
developments and an appropriate discount rate.
_____________________________________
_____________________________________
47
_____________________________________
INDEPENDENT AUDITORS' REPORT
To the Shareholders of JD Capital PLC
Report on the Audit of the Financial Statements
Opinion
Basis for Opinion
WehaveauditedtheaccompanyingfinancialstatementsofJDCapitalPLC(“theCompany”)andthe
consolidatedfinancialstatementsoftheCompany anditssubsidiaries(together,“theGroup”),setout
onpages12- 47,which comprisethestatements offinancialposition as at31December 2022,the
statements ofcomprehensiveincome,statementsofchangesinequityandstatementsofcashflows
for the year then ended, and notes to the financial statements, including a summary of significant
accounting policies.
In
our
opinion,
the
financial
statements
give
a
true
and
fair
view
of
the
financial
position
of
the
Company and of the Group as at 31 December 2022, and of their financial performance and cash
flows fortheyearthenendedinaccordancewith InternationalFinancialReportingStandards("IFRS")
asadoptedbythe EuropeanUnion("EU"), andhavebeen properlypreparedinaccordance withthe
requirements of the Companies Act (Cap. 386).
Our report is consistent with the additional report to the audit committee in accordance with the
provision of Article 11 of the EU Regulations No. 537/2014 on specific requirements on statutory
audits of public-interest entities.
We conducted our audits in accordance with International Standards on Auditing ("ISA"). Our
responsibilities under those standards are further described in the Auditors’ Responsibilities for the
AuditoftheFinancialStatements sectionofourreport.WeareindependentoftheCompanyandthe
Group in accordance with the ethical requirements of both the International Ethics Standards Board
for Accountants’ International Code of Ethics for Professional Accountants (including International
Independence Standards) (IESBA Code) and theAccountancy Profession(Codeof Ethics for Warrant
Holders) Directive issued in terms of the Accountancy Profession Act (Cap. 281) in Malta that are
relevant to our audits of thefinancial statements,and we have fulfilledour otherethical responsibilities
in accordance with these requirements and the IESBA Code and the Code of Ethics for Warrant
HoldersinMalta.We believethattheauditevidencewehave obtainedissufficientandappropriate to
provide a basis for our opinion.
48
INDEPENDENT AUDITORS' REPORT - continued
Report on the Audit of the Financial Statements - continued
Basis for Opinion - continued
Key Audit Matters
Revenue from contracts with customers
Valuation of investment property
Our audit procedures included, amongst others, the following:
•
•
• Testing the mathematical accuracy of the calculations derived from the forecast model.
•
Considering the objectivity, independence, competence and capabilities of the external valuer.
Tothebestofourknowledgeandbelief,wedeclarethatnon-auditservicesthatwehaveprovidedto
theGroupareinaccordance withthe applicable lawsandregulations inMaltaandthatwehavenot
providedanynon-audit services thatareprohibitedunderArticle18Aofthe AccountancyProfession
Act (Cap. 281).
Thenon-auditservicesthatwehaveprovidedtotheGroupduringtheyeararedisclosedinNote7in
the financial statements.
Keyauditmattersarethosemattersthat,inourprofessionaljudgement,wereofmostsignificancein
our audit of the financial statements of the current period. These matters were addressed in the
context ofour audit ofthefinancial statementsasa whole,andin formingour opinion thereon,and we
do not provide a separate opinion on these matters.
Revenue
is
determined
through
the
estimation
of
the
stage
of
completion
and
the
expected
outcome
of the project. Given this estimation process, it is possible that changes in future conditions could
require a change in the recognised amount of revenue.
Our audit procedures included an analysis of contracts, bills of quantities prepared by third parties
and/or project supervisors, project costs and budgets and/or any other relevant assessments as
provided by management.
The Group's investment property pertaining to a land in Birkirkara is carried at fair value of
€5,494,000. Valuation of this property is inherently subjected to, among other factors, the individual
nature of the property, its location, and the expected future revenues to be derived from the property.
The
existence
of
significant
estimates
used
to
arrive
at
the
fair
value
of
the
property,
could
result
in
a
potential material misstatement by virtue of the inherent uncertainties underlying the estimations.
Consequently,specificauditfocusandattentionwasgiventothisarea.Thevaluationoftheproperty
was performed by management on the basis of valuation reports prepared by an independent
qualified architect.
Assessing the valuation inputs and assumptions used on which the forecasts were made.
Assessing the key valuation inputs and assumptions used on which the forecasts were made.
49
INDEPENDENT AUDITORS' REPORT - continued
Report on the Audit of the Financial Statements - continued
Key Audit Matters - continued
Valuation of property, plant and equipment
Our audit procedures included, amongst others, the following:
•
•
• Testing the mathematical accuracy of the calculations derived from the forecast model.
•
Assessment of the recoverability of receivables
Our audit procedures included, amongst others, the following:
•
•
•
•
Reviewing the terms surrounding the agreements.
The Group’s industrial buildings carried at fair value relate to the emphyteusis on the factory in Hal
Far. Thishada carryingamount of€19,335,671 asatyear-end.Valuationofthispropertyisinherently
subjectedto,amongotherfactors,theindividualnatureoftheproperty,itslocation,andtheexpected
future revenues to be derived from the property.
The
existence
of
significant
estimates
used
to
arrive
at
the
fair
value
of
the
property,
could
result
in
a
potential material misstatement by virtue of the inherent uncertainties underlying the estimations.
Consequently,specificauditfocusandattentionwasgiventothisarea.Thevaluationoftheproperty
was performed by management on the basis of valuation reports prepared by an independent
qualified architect.
Considering the objectivity, independence, competence and capabilities of the external valuer.
Reviewing the methodology used by the external valuer and by management to estimate the fair
value of the industrial buildings.
Assessing the key valuation inputs and assumptions used on which the forecasts were made.
Weidentifiedtherecoverabilityoftheaccountsreceivableasakeyauditmatterduetothesignificant
degree of judgements made by management in assessing the impairment of the receivables and
consequently, in determining the extent of allowance for expected credit losses ("ECL").
As at 31 December 2022, the Group had a loan receivable and amounts due from the parent company
totalling to €1,712,531, amounts due from a related company of €5,331,980, other receivables from
third party amounting to €6,438,239, and trade receivables and contract assets totalling €9,985,368.
Assessing the financial soundness of the third party and the parent company taking into account
their business plans and strategies.
Understanding and evaluating the workings and assumptions underlying the assessments for the
loss allowances under IFRS 9.
Basedonevidenceandexplanationsobtained,weconcurwithmanagement'sviewwithrespectto
the recoverability of the balances.
50
INDEPENDENT AUDITORS' REPORT - continued
Report on the Audit of the Financial Statements - continued
Other Information
Based on the work we have performed, in our opinion:
• the directors’ report has been prepared in accordance with the Companies Act (Cap. 386);
•
•
Inpreparingthefinancialstatements,thedirectorsareresponsibleforassessingtheCompany’sand
theGroup'sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoing
concern and using the going concernbasis of accounting unless thedirectorseither intendto liquidate
the Company and/or the Group or to cease operations, or have no realistic alternative but to do so.
Thedirectorsareresponsiblefortheotherinformation. Theotherinformationcomprises thegeneral
information, the directors’ report and the statement of compliance with the principles ofgood corporate
governance. Ouropiniononthefinancialstatementsdoesnotcovertheotherinformation,exceptas
explicitly stated under the Report on Other Legal and Regulatory Requirements
.
In connection with our audit of the financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise
appearsto bematerially misstated. If, basedon thework we have performedon theother information
that we have obtained prior to the date of this auditors’ report, we conclude that there is a material
misstatement of this other information, we are required to reportthat fact. We have nothing toreport in
this regard.
Under Article 179(3) of the Companies Act (Cap. 386), we are required to consider whether the
informationgivenin the directors’reportis compliant with thedisclosure requirementsof Article177of
the same Act.
the information given in the directors’ report for the financial period for which the financial
statements are prepared is consistent with the financial statements; and
inlightofourknowledgeandunderstandingoftheCompanyandtheGroup,andtheirenvironment
obtained inthecourseoftheaudit,wehavenotidentifiedmaterial misstatementsin thedirectors’
report.
Responsibilities
of
the
Directors
and
Those
Charged
with
Governance
for
the
Financial
Statements
The
directors
are
responsible
for
the
preparation
of
financial
statements
that
give
a
true
and
fair
view
in accordance with IFRS as adopted by the EU and the requirements of the Companies Act (Cap.
386), and forsuch internalcontrol as thedirectorsdetermine isnecessary to enable thepreparationof
financial statements that are free from material misstatement, whether due to fraud or error.
Thosechargedwithgovernanceareresponsibleforoverseeingthefinancial reportingprocess ofthe
Group and the Company.
51
INDEPENDENT AUDITORS' REPORT - continued
Report on the Audit of the Financial Statements - continued
Auditors’ Responsibilities for the Audit of the Financial Statements
•
•
•
•
•
•
Our
objectives
are
to
obtain
reasonable
assurance
about
whether
the
financial
statements
as
a
whole
are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report
thatincludesouropinion. Reasonableassuranceisahighlevelofassurance,butisnotaguarantee
that an audit conducted in accordance with ISAs will alwaysdetect a material misstatement when it
exists. Misstatements can arise fromfraudorerror andareconsidered material if,individually or inthe
aggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenon
the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
identify
and
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detectingamaterialmisstatementresulting fromfraudishigher than for one resulting fromerror, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditprocedures
thatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinion onthe
effectiveness of the Company and the Group’s internal control.
evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
conclude
on
the
appropriateness
of
the
directors’
use
of
the
going
concern
basis
of
accounting
and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditionsthatmaycastsignificantdoubtontheCompanyandtheGroup’sabilitytocontinueasa
going concern. If we conclude that a material uncertainty exists, we are requiredto draw attention in
ourauditors’reporttotherelateddisclosuresinthefinancialstatementsor,ifsuchdisclosuresare
inadequate,tomodifyouropinion.Ourconclusionsarebasedontheauditevidenceobtainedupto
the date of our auditors’ report. However, future events or conditions may cause the Company
and/or the Group to cease to continue as a going concern.
evaluate the overall presentation, structure and content of the financial statements, including the
disclosures,andwhetherthefinancialstatementsrepresenttheunderlyingtransactionsandevents
in a manner that achieves fair presentation.
obtain sufficient appropriate audit evidence regarding the financial information of the entities or
businessactivitieswithintheGroup toexpressanopiniononthe consolidatedfinancialstatements.
We are responsible for the direction, supervision and performance of the groupaudit. Weremain
solely responsible for our audit opinion.
52
INDEPENDENT AUDITORS' REPORT - continued
Report on the Audit of the Financial Statements - continued
Auditors’ Responsibilities for the Audit of the Financial Statements - continued
Report on Other Legal and Regulatory Requirements
Report on the Statement of Compliance with the Principles of Good Corporate Governance
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditors’ report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Wecommunicatewiththedirectorsregarding,amongothermatters,theplannedscopeandtimingof
theauditandsignificantauditfindings,includingany significantdeficienciesininternalcontrolthatwe
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirementsregarding independence, and communicate with them allrelationships andother matters
that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
The Capital Market Rules issued by the Malta Financial Services Authority requires the directors to
prepare and include in their Annual Report a Statement of Compliance providing explanation of the
extent to which they have adopted the Code of Principles of Good Governance and the effective
measures that they have taken to ensure compliance throughout the year with those principles.
The CapitalMarket Rulesalsorequirethe auditorsto reporton theStatement ofCompliance prepared
by the directors.
We read the Statement of Compliance and consider the implications for our report if we become
aware of any apparent misstatements or material inconsistencies with the financial statements
included in the Annual Report. Our responsibilities do not extend to considering whether this
statement is consistent with any other information included in the Annual Report.
We are not required to, and wedo not,consider whethertheBoard’s statements on internal control
included in the Statement of Compliance cover all risks and controls, or form an opinion on the
effectiveness of the Company’s corporate governance procedures or its risk and control procedures.
In ouropinion, the Statement of Compliance withthePrinciples of GoodCorporate Governancehas
been properly prepared in accordance with the requirementsof the Capital Market Rulesissuedby the
Malta Financial Services Authority.
53
INDEPENDENT AUDITORS' REPORT - continued
Report on Other Legal and Regulatory Requirements - continued
Responsibilities of the directors
Auditors’ responsibilities
Our procedures included:
•
•
•
Opinion
examining the information in the annual financial report to determine whether all the required
taggings therein have been applied and whether, in all material respects, they are in accordance
with the requirements of the ESEF RTS.
Report on compliance with the requirements of the European Single Electronic Format
Regulatory Technical Standard (the “ESEF RTS”), by reference to Capital Markets Rule 5.55.6
We have undertaken a reasonable assurance engagement in accordance with the requirements of
Directive6issuedby theAccountancyBoardintermsoftheAccountancyProfessionAct(Cap.281)-
the Accountancy Profession (European Single Electronic Format) Assurance Directive (the “ESEF
Directive6”)ontheannualfinancialreportofJDCapitalPLCfortheyearended31December2022,
entirely prepared in a single electronic reporting format.
The directors are responsible for the preparation of the annual financial report, including the
consolidated financial statements and the relevant mark-up requirements therein, by reference to
Capital Markets Rule 5.56A, in accordance with the requirements of the ESEF RTS.
Our responsibility is to obtain reasonable assurance about whether the annual financial report,
including theconsolidated financial statements and the relevant electronic tagging therein complyin
allmaterialrespectswith theESEF RTSbasedontheevidencewe have obtained.We conductedour
reasonable assurance engagement in accordance with the requirements of ESEF Directive 6.
obtaining an understanding of the entity's financial reporting process, including the preparation of
the annual financial report, in accordance with the requirements of the ESEF RTS.
obtaining the annual financial report and performing validations to determine whether the annual
financial report has been prepared in accordance with the requirements of the technical
specifications of the ESEF RTS.
Webelievethattheevidencewe have obtainedissufficientandappropriatetoprovideabasisforour
opinion.
Inouropinion,theannualfinancialreportfortheyearended31December2022hasbeenprepared,
in all material respects, in accordance with the requirements of the ESEF RTS.
54
INDEPENDENT AUDITORS' REPORT - continued
Report on Other Legal and Regulatory Requirements - continued
Other Matters on which we are Required to Report by Exception
• proper accounting records have not been kept; or
• returns have not been received from branches we have not visited; or
• the financial statements are not in agreement with the accounting records and returns; or
•
We have nothing to report in this regard.
Appointment
This copy of the audit report has been signed by:
Conrad Borg
(Principal)
for and on behalf of
RSM Malta
Registered Auditors
25 April 2023
Under the Companies Act (Cap. 386), we are required to report to you if in our opinion:
we were unable to obtain all the information and explanations which, to the best of our knowledge
and belief, are necessary for the purposes of our audit.
We also have responsibilities under the Capital Market Rules to review the statement made by the
directors thatthebusiness isa going concern togetherwith supporting assumptions orqualifications
as necessary.
We were first appointed to act as statutory auditors of the Company by the shareholders of the
Company on 18 June 2018 for the period ended 31 December 2018, and we were subsequently
reappointedbythe shareholdersattheCompany'sgeneralmeetingforthefinancialyearsthereafter.
The period of uninterrupted engagement as statutory auditor of the Company is five financial periods.
55