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Company Registration No.: C 82098
JD CAPITAL PLC
Annual Financial Report
and
Consolidated Financial Statements
31 December 2023
1
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
CONTENTS
Pages
General information
2
Directors' report
3 - 8
Statement of compliance with the principles of good corporate governance
9 - 13
Statements of profit or loss and other comprehensive income
14
Statements of financial position
15 - 16
Statements of changes in equity
17 - 18
Statements of cash flows
19 - 20
Notes to the financial statements
21 - 59
Independent auditors' report
60 - 67
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
GENERAL INFORMATION
2
Registration
JD Capital plc is registered in Malta as a public limited liab ility company under the Maltese Companies Act (Cap.
386). The Company’s registration number is C 82098.
Directors
Josef Dimech
Jesmond Manicaro
Stephen Muscat
Jonathan Pace
Stanley Portelli
Company secretary
Malcolm Falzon (appointed on 1 February 2023)
Jesmond Manicaro (resigned on 1 February 2023)
Registered office and principal place of business
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
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
DIRECTORS' REPORT
3
The directors present their Annual Financial 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 2023.
Principal activities
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.
On the 20 of November 2023, the Company incorporated a new subsidiary, JD Real Estate Development Ltd,
which shall be engaged in the business of property development for resale as well as property development to
be held as investment property.
Review of the business
The Group’s and Company's performance is satisfactory, and the directors expect that the present level of
activity will remain positive in the foreseeable future. The Group’s level of business activity during the financial
year increased when compared to the previous year.
Revenue
Revenue for the year under review amounts to €12.97 million (2022: €11.83 million) for the Group.
EBITDA
The Group's EBITDA (earnings before interest, tax, depreciation and amortisation) for the year amounts to
€2.05 million (2022: €2.04 million) with adjusted EBITDA, that is, EBITDA before movement in expected credit
losses and fair value movements amounting to €2.01 million (2022: €1.13 million).
EBIT
The Group's EBIT for the year amounts to €1.40 million (2022: €1.10 million)
Investment in non-current assets
During the year, the Group initiated the development of the site at Hal Far. Works certified by an independent
architect by year end amount to €4 million. In the financial statements, development costs are being captured in
the carrying amount of the right-of-use asset. Apart from the development costs at the Hal Far site, the group
acquired other assets for the amount of €0.037 million (2022: €0.02 million).
In quarter 4 of 2023, the Group also engaged the contractors for the excavation works at the Birkirkara site.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
DIRECTORS' REPORT - continued
4
Review of the business - continued
Equity
JD Holdings Limited owns 99.96% shareholding of the Group's share capital.
The Group’s equity includes a share capital of €7.55 million (2022: €7.55 million) made up of 7,546,700 ordinary
shares of €1.00 each. Capital contribution reserves for the year amounted to €3.20 million (2022: Nil). The
capital contribution reserve represents a gratuitous capital contribution by JD Holdings Limited. Revaluation
reserves which at Group level arise on the revaluation of the land at the Hal Far site held as right-of-use amount
to €8.16 million (2022: €7.86 million). Retained earnings held by the Group amount to €1.43 million (2022: €1.40
million). The total equity of the Group is €20.34 million (2022: €16.81 million).
The Company’s equity includes a share capital of €7.55 million (2022: €7.55 million) made up of 7,546,700
ordinary shares of €1.00 each. Capital contribution reserves for the year amounted to €3.20 million (2022: Nil).
The capital contribution reserve represents a gratuitous capital contribution by JD Holdings Limited.
Accumulated losses held by the Company amount to €0.54 million (2022: €0.29 million). The total equity of the
Company is €10.21 million (2022: €7.26 million).
Total assets
The Group’s total assets amount to €76.33 million (2022: €57.49 million).
The Company’s total assets amount to €35.55 million (2022: €21.21 million).
Other considerations
During the year, the Group saw a change in its senior management structure. In April 2023, the Group
appointed Mr. Robert Zammit Lucas as the new Chief Financial Officer of the Group following the resignation of
Mr. Franklin Schembri. In June 2023 after decades of success and growth of the JD Group under the executive
leadership of Mr. Josef Dimech, with a view to strengthening the corporate governance structure of the Group
and the Company, the board of directors of the Company appointed Mr. Franco Azzopardi as the Group’s Chief
Executive Officer. As a result of such appointment, Mr. Dimech relinquished his position as the Chief Executive
Officer of the JD Group, retaining his position as Executive Director of the Company, and responsible for
business development. The new management team has been chosen to amongst others, spearhead the
diversification plan of the Group.
Results and dividends
The results for the year are set out in the statements of profit or loss and other comprehensive income on page
14. During the year ended 31 December 2023, the directors do not recommend the payment of a dividend. The
retained earnings of the Group and the accumulated losses of the Company amounting to €1,431,417 and
€537,993 respectively shall be carried forward.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
DIRECTORS' REPORT - continued
5
Principal risks and uncertainties
The Group is currently mainly dependent on the operations of one of its subsidiaries, JD Operations Limited, its
main line of business being the installation and manufacture of aluminium apertures, steel structures and
large-scale glass formats. The full list of key risks listed in the base prospectus are still applicable. To mitigate
such risks the Group is diversifying its business lines as per the Base Prospectus issued to the public on 3
October 2022.
Apart from the above, the Group is subject to various other risks such as market, economic, credit and liquidity
risks that may affect the Group’s projects and their timely completions. The directors are confident that the
Company has the right framework and the appropriate policies and procedures in place to mitigate the effects
that the aforementioned risks might have on the business.
Disclosures of material matters
JD Capital p.l.c. has the following 5 material contracts:
i. €4.9m loan given to JD Operations Limited. This relates to the Prospects bond obtained in 2018;
ii. €3.6m loan granted to JD Operations Limited as working capital. Proceeds obtained by JD Capital plc from
bond issue in November 2022;
iii. €5m loan agreement with JD Operations Limited for the redevelopment of the Hal Far factory. Again,
proceeds obtained by JD Capital plc from the bond issue that took place in November 2022;
iv. €4m loan given to JD Birkirkara Limited for the development of the Birkirkara Office Complex. JD Capital plc
obtained the loan funds from the series 2 bonds, issued in July 2023; and
v. €7m loan agreement with JD Operations Limited for the development of the Hal Far site. JD Capital plc
obtained the loan funds from the series 2 bonds issued in July 2023.
Company secretary and registered office
During the year ended 31 December 2023, Dr Jesmond Manicaro resigned from company secretary on 1
February 2023. On the same date, Dr. Malcolm Falzon was appointed as company secretary. The Company's
registered office is HHF 303 Industrial Estate, Hal Far, Birzebbugia, BBG 3000, Malta.
Financial risk management
The Group is exposed to a variety of financial risks, including market risk, credit risk and liquidity risk. These are
further analysed in Note 32 in the financial statements.
Events after the end of reporting period
On 14 December 2023, the Company announced that a prospectus relating to the issue of a maximum of
€5,000,000 7.25% secured callable notes redeemable between 2025 - 2027 at the discretion of the Company, of
a nominal value of €1,000 per note was approved by the Malta Financial Services Authority. On 19 January
2024, the Company announced that the offer has been fully subscribed to.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
DIRECTORS' REPORT - continued
6
Events after the end of reporting period - continued
On 12 February 2024, the Company announced that as specified in the registration documentation forming part
of the prospectus dated 12 December 2023, published by the Company in respect of the secured callable notes
issue, the Company through its wholly owned subsidiary JD Real Estate Development Limited, acquired from
third party vendors with the intention to hold as an investment property, the properties known as Ta’ Monita
Residence, Marsascala. The properties are situated in a special designated area, thereby exempt from the
restrictions to acquisition which non-Maltese and non-EU nationals are subject to. The acquired properties have
a potential of further developable area of circa 6,600 square metres of residential apartments and circa 2,100
square metres of underlying basement garages.
Going concern
During 2023, the war between Ukraine and Russia continued to escalate. Similar to the previous year, the
Group has not made any sales overseas and it does not have any contracts for raw materials in Ukraine or
Russia. Furthermore, none of the Group's clients, which are Malta-based have suspended their projects or
cancelled orders.
2023 saw the emergence of another conflict in the Middle East in the Gaza area. The Group has not made any
sales nor does it source any of its raw materials from this region. Furthermore, none of the Group’s clients are
directly linked to these two countries and as a result, management has assessed that such political factors will
not affect the Group’s performance for the foreseeable future. Furthermore, as a consequence of the conflict in
the Middle East, Yemen’s Houthi rebels began attacking vessels in the Red Sea. In response, shipping
companies have altered their routes to avoid the Suez Canal and the Red Sea. This again did not impact the
operations as the Group’s main suppliers are located in mainland Europe.
However, these two conflicts continued to exacerbate the levels of economic uncertainty. These new conditions
triggered new spiraling inflationary pressures across the world and pushed central banks to increase interest
rates to manage demand with a view to curb inflation. In March 2023, the international financial sector was hit by
a number of adverse developments in the banking industry which compounded the levels of economic
uncertainty. In light of the above, the Group continues to monitor its cash flow projections to assess the effect of
the unfolding economic developments on its operations.
The directors, at the time of approving the financial statements, have determined that there is reasonable
expectation that the Group and the Company have adequate resources to continue operating for the
foreseeable future and for this reason, the directors have adopted the going concern basis in preparing the
financial statements.
Future developments
The Company is not envisaging any changes in operating activities for the forthcoming year.
Directors
The directors of the Company who held office during the year are listed on page 2.
In accordance with the Company's Memorandum and Articles of Association, the present directors remain in
office, but shall retire from office at least once every three years. However, they shall be eligible for re-election.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
DIRECTORS' REPORT - continued
7
Statement of directors' responsibilities
The Companies Act (Cap. 386), enacted in Malta, requires the directors to prepare financial statements for each
financial year which give a true and fair view of the financial position of the Group and of the Company as at the
end of the financial year and of the profit or loss for that year.
In preparing the financial statements, the directors are responsible for:
• adopting the going concern basis unless it is inappropriate to presume that the Company and the Group
will continue in business as going concern;
• selecting suitable accounting policies and applying them consistently;
• making judgements and accounting estimates that are reasonable and prudent;
• accounting for income and charges relating to the accounting period on the accrual basis;
• valuing separately the components of asset and liability items;
• report comparative figures corresponding to those of the preceding accounting period; and
• preparing the financial statements in accordance with International Financial Reporting Standards (IFRS
Accounting Standards) as adopted by the EU.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at
any time the financial position of the Company and of the Group and to enable them to ensure that the financial
statements comply with the Maltese 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 Group and Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The financial statements of JD Capital plc for the year ended 31 December 2023 are included in the Annual
Financial Report 2023, which is available on the Company’s website. The directors are responsible for the
maintenance and integrity of the Annual Financial Report on the website in view of their responsibility for the
controls over, and the security of, the website. Access to information published on the Company’s website is
available in other countries and jurisdictions, where legislation governing the preparation and dissemination of
financial statements may differ from requirements or practice in Malta.
Additionally, the directors are responsible for:
• the preparation and publication of the Annual Financial Report, including the consolidated financial
statements and the relevant tagging requirements therein, as required by Capital Markets Rule 5.56A, in
accordance with the requirements of the European Single Electronic Format Regulatory Technical Standard
as specified in the Commission Delegated Regulation (EU) 2019/815 (the “ESEF RTS”);
• designing, implementing and maintaining internal controls relevant to the preparation of the Annual Financial
Report that is free from material non-compliance with the requirements of the ESEF RTS, whether due to
fraud or error; and
• for ensuring the accurate transfer of the information in the Annual Financial Report into a single electronic
format.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
DIRECTORS' REPORT - continued
8
Auditors
RSM Malta, Registered Auditors, have expressed their willingness to continue in office and a resolution for their
reappointment will be proposed at the Annual General Meeting.
Statement of responsibility pursuant to the Capital Market Rules issued by MFSA
The directors declare that to the best of their knowledge:
• In accordance with Capital Market Rule 5.68, the financial statements give a true and fair view of the
financial position of the Group and the Company as at 31 December 2023, and of the financial
performance and cash flows for the year then ended in accordance with International Financial
Reporting Standards (IFRS Accounting Standards) as adopted by the European Union and with the
Maltese Companies Act (Cap 386); and
• In accordance with the Capital Market Rules, the Directors’ Report includes a fair review of the
development and performance of the business and the position of the Group and the Company,
together with a description of the principal risks and uncertainties that the Group and the Company face.
Signed on behalf of the Board of Directors on 24 April 2024 by Josef Dimech (Director) and Stephen Muscat
(Director) as per Director's Declaration on ESEF Annual Financial Report submitted in conjunction with the
Annual Financial Report 2023.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
9
STATEMENT OF COMPLIANCE WITH THE PRINCIPLES OF GOOD CORPORATE
GOVERNANCE
JD Capital PLC ("the Company") is committed to observing the principles of transparent and responsible
corporate governance. The Board considers compliance with corporate governance principles to constitute an
important means of maintaining the confidence of present and future bondholders, creditors, employees,
business partners and the public. Pursuant to the Capital Market Rules, the Company is hereby presenting a
statement of compliance with the Code of Principles of Good Corporate Governance (“the Principles” or “the
Code”) for the year ended 31 December 2023, which details the extent to which the Principles have been
adopted, as well as the effective measures taken by the Company to ensure compliance with these Principles.
Other than as stated in Part Two below, the Company has fully implemented the Principles set out in the Code.
PART I - Compliance with the Code
Principle 1: The Board
The overall management and policy setting of the Company is vested in a Board of Directors consisting of five
(5) Directors, including the Chairman.
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 projects and regularly
monitors performance against delivery of the key targets of the Group’s business plan.
Principle 2: Chairman and Chief Executive
The positions of the Chairman of the Board and that of the Chief Executive Officer (CEO) are vested in separate
individuals.
Up to 11 June 2023, the role of Chief Executive Officer of the Group was held by Mr. Josef Dimech, an
Executive Director of the Company. As from 12 June 2023, the Group appointed Mr. Franco Azzopardi to fulfill
the role of Chief Executive Officer of the Group and Company.
The responsibilities of Chairman are vested in Mr. Stephen Muscat.
Principle 3: Composition of the Board
The Board of the Company who served during the year until 31 December 2023 was as follows:
Directors
Mr. Stephen Muscat Chairman and Non-executive Director
Mr. Josef Dimech Executive Director
Mr. Jonathan Pace Executive Director
Dr. Stanley Portelli Non-executive Director
Dr. Jesmond Manicaro Non-executive Director
Company secretary
Dr. Malcolm Falzon
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.
The members of the Board have the balance of knowledge and experience as well as a strong non-executive
presence to allow continued scrutiny of performance, strategy, and governance.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
10
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
For the purpose of the Capital Market Rules, the non-executive directors are deemed independent. Each
director is mindful of maintaining independence, professionalism, and integrity in carrying out his duties and
responsibilities, whilst providing judgement as a director of the Company.
The Board considers that none of the independent non-executive 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 received or receives significant additional remuneration from the Company in addition to their director’s
fee;
• has close family ties with any of the Company’s executive directors or senior employees; and
• has been within the last three years an engagement partner or a member of the audit team or past external
auditor of the Company.
Each of the independent Directors hereby declares that he undertakes to:
• maintain in all circumstances his independence of analysis, decision and action;
• not seek or accept any unreasonable advantages that could be considered as compromising his
independence; and
• 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
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 requires that management report
back on any issues noted as the need arises and periodically in relation to the Company's performance. 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.
Principle 5: Board Meetings
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. The Board recognises that occasional meetings may need to be scheduled on short notice when the
participation of a Director is not possible and that conflicts may arise from time to time that will prevent a
Director from attending or participating in a regularly scheduled meeting. However, the Board expects that each
Director will make every possible effort to keep such absences to a minimum.
The Board has met eight times during the year. All Directors were present on all these meetings.
Principle 6: Information and Professional Development
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 appropriate.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
11
STATEMENT OF COMPLIANCE WITH THE PRINCIPLES OF GOOD CORPORATE
GOVERNANCE - continued
PART I - Compliance with the Code - continued
Principle 7: Evaluation of the Board’s Performance
The Board and its sub-committee being the Audit committee, informally evaluate their performance on on an
annual basis. This assessment led to a change in the Corporate Governance structure during 2023 as explained
in Principle 2. Under the present circumstances, the Board does not consider it necessary to appoint a
committee to carry out a performance evaluation.
Principle 8: Committees
The Board delegates certain powers, authorities and discretions to the audit committee.
Remuneration Committee
As is permitted in terms of provision 8.A.2 of the Code, on the basis of the fact that the remuneration of the
directors is not performance-related, the Company has not set up a remuneration committee. Instead, the
functions of the Remuneration Committee are vested in the Board, which itself establishes the remuneration
policies of the Company.
Nomination Committee
The Board of Directors considers that the size and operation of the Company does not warrant the setting up of
a nomination committee and will not be incorporating a nomination committee. Appointments to the Board of
Directors are determined by the holders of the ordinary shares in accordance with the Company’s Memorandum
and Articles of Association. The Company considers that the members of the Board possess the level of skill,
knowledge and experience expected in terms of the Code.
Audit Committee
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.
The audit committee comprises of the following independent, non-executive Directors:
Mr. Stephen Muscat Chairman
Dr. Stanley Portelli Member
Dr. Jesmond Manicaro Member
In compliance with the Capital Market Rules, Mr. Stephen Muscat is the independent, non-executive Director
who is competent in accounting and/or auditing matters in view of his considerable experience as a warranted
Certified Public Accountant.
The audit committee met four times during the year. All members were present on all these meetings.
The Group engaged an outsourced Internal Audit Function.
Principles 9 and 10: Relations with Bondholders and with the Market and Institutional Shareholders
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
communication from a bondholder to the Board or to 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 in general.
The Company issues company announcements to keep the market informed of Group developments. The
Company's website also contains information about the Group and its business, including an Investor Relations
Section. During 2023 the company issued 16 announcements.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
12
STATEMENT OF COMPLIANCE WITH THE PRINCIPLES OF GOOD CORPORATE
GOVERNANCE - continued
PART I - Compliance with the Code - continued
Principle 11: Conflicts of Interest
The Directors should always act in the best interest of the Company and its shareholders and investors. The
procedures internally followed by the Board reflect how sensitive such situations, if and when they arise, are
considered by the Company. In accordance with the provisions of the Articles of Association of the Company,
any actual, potential or perceived conflict of interest must be immediately declared by a Director to the other
members of the Board, who then (also possibly through a referral to the audit committee) decide on whether
such a conflict exists. In the event that the Board perceives such interest to be conflicting with the Director’s
duties, the conflicted Director is required to leave the meeting and both the discussion on the matter and the
vote, if any, on the matter concerned are conducted in the absence of the conflicted Director.
Principle 12: Corporate Social Responsibility
The Company remains committed to being a responsible company and making a positive contribution to society
and the environment. This helps the Group develop strong relationships with its stakeholders, and create
long-term value for society and its business. The Group is committed to play a leading and effective role in
Malta’s sustainable development whilst tangibly proving itself to be a responsible and caring entity of the
community in which it 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.
PART II - Non-compliance with the Code
Principle 7: Evaluation of the Board’s Performance
Even though the Board informally evaluated its performance, it did not appoint an ad hoc committee to carry out
such evaluation. The Board believes that the outcome of such an exercise currently provides the deliverables
needed.
Principle 8: Committees
The Memorandum and Articles of Association of the Company regulates the appointment of Directors.
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.
PART III - Internal Control and Risk Management in relation to the Financial Reporting Process
The Board, supported by the Audit Committee is ultimately responsible for the Group’s system of internal control
and risk management and for reviewing its effectiveness. Such a system is designed to manage rather than
eliminate the risk of failure to achieve business objectives, and can only provide a reasonable, as opposed to
absolute assurance against material misstatement or loss.
The Company operates through the Board of Directors and senior management with clear reporting lines and
delegation of powers. The Board of Directors has adopted and implemented appropriate policies and
procedures to manage risks and internal control. Senior management plans, executes, controls and monitors
business operations in order to achieve the set objectives.
The Directors, with the assistance of senior management, are responsible for the identification, evaluation and
management of the key risks to which the Company may be exposed. The Company has in place clear and
consistent procedures in place for monitoring the system of internal financial controls. The Directors also receive
periodic management information giving comprehensive analysis of financial and business performance
including variances against the Group’s set targets.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
13
STATEMENT OF COMPLIANCE WITH THE PRINCIPLES OF GOOD CORPORATE
GOVERNANCE - continued
PART III - Internal Control and Risk Management in relation to the Financial Reporting Process -
continued
The Audit Committee supported by the internal audit function, reviews and assesses the effectiveness of the
internal control systems, including financial reporting, and determines whether significant internal control
recommendations made by internal and external auditors have been implemented. The Committee plays an
important role in initiating discussions with the Board with respect to risk assessment and risk management and
reviews contingent liabilities and risks that may be material to the Group.
PART IV - General Meetings
General meetings are called and conducted in accordance with the provisions contained in the Company’s
Articles of Association and in accordance with any applicable laws or regulations as may be applicable from
time to time. As outlined previously, information on General Meetings is found in the Directors’ Report.
The report above is a summary of the views of the Board on the Company’s compliance with the Code.
Generally, the Board is of the opinion that, in the context of the applicability of the various principles of the Code
to the Company and in the context of the Company’s business operations and save as indicated herein in the
section entitled “Non-Compliance” the Company has applied the principles and has complied with the Code
throughout the financial year under review. The Board shall keep these principles under review and shall
monitor any developments in the Company’s business to evaluate the need to introduce new corporate
governance structures or mechanisms as and when the need arises.
Signed on behalf of the Board of Directors on 24 April 2024 by Josef Dimech (Director) and Stephen Muscat
(Director).
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the year ended 31 December
14
Group
Company
Notes
2023
€
2022
€
2023
€
2022
€
Revenue
4
12,965,375
11,831,725
-
-
Cost of sales
(10,650,049)
(10,705,255)
-
-
Gross profit
2,315,326
1,126,470
-
-
Selling and distribution expenses
(180,256)
(140,999)
-
-
Administrative expenses
(1,013,330)
(1,013,528)
(302,200)
(275,392)
Other income
5
239,322
213,496
-
-
Operating profit/(loss)
6
1,361,062
185,439
(302,200)
(275,392)
Gain on fair value movement
13
-
971,285
-
-
Interest income
8
51,321
41,899
1,072,591
342,299
Finance costs
9
(1,188,976)
(723,655)
(977,356)
(292,936)
Other losses
10
-
(1,721)
-
-
Expected credit loss provision
movement
35,948
(55,721)
(42,970)
(11,160)
Profit/(loss) before tax
259,355
417,526
(249,935)
(237,189)
Taxation (charge)/credit
11
(229,550)
(199,209)
-
199
Profit/(loss) for the year
29,805
218,317
(249,935)
(236,990)
Other comprehensive income:
Items that will not be reclassified
subsequently to profit or loss
Revaluation of land and buildings, net
of tax
22
308,899
-
-
-
Other comprehensive income for
the year
308,899
-
-
-
Total comprehensive income/(loss)
for the year
338,704
218,317
(249,935)
(236,990)
Profit/(loss) for the year
attributable to:
Owners of the Company
29,805
218,317
(249,935)
(236,990)
Total comprehensive income/(loss)
attributable to:
Owners of the Company
338,704
218,317
(249,935)
(236,990)
Basic earnings/(loss) per share
24
0.004
0.029
(0.033)
(0.031)
The notes on pages 21 to 59 are an integral part of these consolidated financial statements.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
STATEMENTS OF FINANCIAL POSITION
As at 31 December
15
Group
Company
Notes
2023
€
2022
€
2023
€
2022
€
ASSETS
Non-current assets
Property, plant and equipment
12
28,008,219
22,811,710
-
-
Investment property
13
5,734,292
5,494,000
-
-
Intangible assets
14
224,497
224,497
-
-
Investments in subsidiaries
15
-
-
10,703,600
7,502,400
Financial assets at amortised cost
16
1,713,858
1,663,556
22,291,991
7,004,388
Trade and other receivables
19
-
2,313,207
-
-
Total non-current assets
35,680,866
32,506,970
32,995,591
14,506,788
Current assets
Financial assets at amortised costs
16
9,224,971
5,394,194
7,013
45,400
Inventories
17
1,563,290
1,364,007
-
-
Contract assets
18
11,140,846
6,516,976
-
-
Trade and other receivables
19
18,331,746
10,812,500
2,550,184
6,650,166
Cash at bank and in hand
20
384,212
891,483
-
9,987
Total current assets
40,645,065
24,979,160
2,557,197
6,705,553
TOTAL ASSETS
76,325,931
57,486,130
35,552,788
21,212,341
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
16
STATEMENTS OF FINANCIAL POSITION - continued
As at 31 December
Group
Company
Notes
2023
€
2022
€
2023
€
2022
€
EQUITY AND LIABILITIES
Capital and reserves
Share capital
21
7,546,700
7,546,700
7,546,700
7,546,700
Revaluation reserve
22
8,165,699
7,856,800
-
-
Other reserves
23
3,200,000
-
3,200,000
-
Retained earnings/(Accumulated losses)
1,431,417
1,401,612
(537,993)
(288,058)
TOTAL EQUITY
20,343,816
16,805,112
10,208,707
7,258,642
Non-current liabilities
Borrowings
25
28,850,855
17,049,983
24,470,890
13,625,498
Lease liabilities
26
3,395,551
3,446,530
-
-
Trade and other payables
27
1,684,944
3,564,311
-
-
Deferred tax liabilities
2,643,640
1,638,230
-
-
Non-current tax liabilities
243,374
459,192
-
-
Total non-current liabilities
36,818,364
26,158,246
24,470,890
13,625,498
Current liabilities
Borrowings
25
2,809,413
3,085,932
446,835
237,962
Lease liabilities
26
50,958
45,156
-
-
Contract liabilities
28
4,185,471
2,889,500
-
-
Current tax payable
951,718
1,071,911
-
-
Trade and other payables
27
11,166,191
7,430,273
426,356
90,239
Total current liabilities
19,163,751
14,522,772
873,191
328,201
TOTAL LIABILITIES
55,982,115
40,681,018
25,344,081
13,953,699
TOTAL EQUITY AND LIABILITIES
76,325,931
57,486,130
35,552,788
21,212,341
The notes on pages 21 to 59 are an integral part of these consolidated financial statements.
The financial statements on pages 14 to 59 were approved and authorised for issue by the Board of Directors
on 24 April 2024. The financial statements were signed on behalf of the Company’s 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 2023.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
STATEMENTS OF CHANGES IN EQUITY
17
Group
Notes
Share
capital
€
Revaluation
reserve
€
Other
reserves
€
Retained
earnings/
(Accumulated
losses)
€
Total
€
Balance at 1 January 2022
7,546,700
7,856,800
-
1,183,295
16,586,795
Total comprehensive income for
the year:
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
Balance at 1 January 2023
7,546,700
7,856,800
-
1,401,612
16,805,112
Comprehensive income:
Profit for the financial year
-
-
-
29,805
29,805
Other comprehensive income:
Items that will not be reclassified
subsequently to profit or loss
Revaluation of land and building,
net of deferred tax
12
-
308,899
-
-
308,899
Total comprehensive income
-
308,899
-
29,805
338,704
Transactions with owners:
Capitalisation of amounts with
shareholder
23
-
-
3,200,000
-
3,200,000
Total transactions with owners
-
-
3,200,000
-
3,200,000
Balance at 31 December 2023
7,546,700
8,165,699
3,200,000
1,431,417
20,343,816
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
18
STATEMENTS OF CHANGES IN EQUITY - continued
Company
Note
Share
capital
€
Other
reserves
€
Retained
earnings/
(Accumulated
losses)
€
Total
€
Balance at 1 January 2022
7,546,700
-
(51,068)
7,495,632
Total comprehensive loss for the year:
-
Loss for the financial year
-
-
(236,990)
(236,990)
Balance at 31 December 2022
7,546,700
-
(288,058)
7,258,642
Balance at 1 January 2023
7,546,700
-
(288,058)
7,258,642
Comprehensive income:
Loss for the financial year
-
-
(249,935)
(249,935)
Total comprehensive income
-
-
(249,935)
(249,935)
Transactions with owners:
Capitalisation of amounts with shareholder
23
-
3,200,000
-
3,200,000
Total transactions with owners
-
3,200,000
-
3,200,000
Balance at 31 December 2023
7,546,700
3,200,000
(537,993)
10,208,707
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
STATEMENTS OF CASH FLOWS
For the year ended 31 December
19
Group
Company
Note
2023
€
2022
€
2023
€
2022
€
Cash flows from operating activities:
Profit/(loss) before tax
259,355
417,526
(249,935)
(237,189)
Adjustments for:
Finance costs
1,188,976
717,686
977,356
292,310
Depreciation on property, plant and
equipment
653,735
955,115
-
-
Movement in impairment of financial
assets
(35,948)
(49,883)
42,970
11,160
Amortisation of bond issue costs
34,452
86,254
34,451
86,254
Loss on disposal of motor vehicles
-
1,721
-
-
Gain on revaluation of investment
property
-
(971,285)
-
-
Finance and dividend income
(51,321)
(41,899)
(1,072,591)
(342,299)
Cash generated from/(used in)
operations before working capital
changes
2,049,249
1,115,235
(267,749)
(189,764)
(Increase)/decrease in inventories
(199,283)
165,289
-
-
(Increase)/decrease in trade and other
receivables and contract assets
(7,793,631)
(9,548,656)
6,415,606
(6,438,419)
Increase/(decrease) in trade and other
payables and contract liabilities
3,226,069
996,851
37,761
(3,369)
Cash (used in)/generated from
operating activities
(2,717,596)
(7,271,281)
6,185,618
(6,631,552)
Interest received
1,019
-
756,967
342,299
Interest paid
(65,253)
-
-
-
Taxes paid
(430,131)
(220,476)
-
(47,751)
Net cash flows (used in)/generated
from operating activities
(3,211,961)
(7,491,757)
6,942,585
(6,337,004)
Cash flows from investing activities:
Payments to acquire property, plant and
equipment
(4,669,058)
(143,540)
-
-
Payments to acquire investment
property
(240,292)
-
-
-
Receipt from disposal of motor vehicles
-
2,300
-
-
Movement in amounts due from
subsidiary, parent company and
related company
(631,107)
(44,643)
(15,292,186)
(2,130,738)
Net cash flows used in investing
activities
(5,540,457)
(185,883)
(15,292,186)
(2,130,738)
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
STATEMENTS OF CASH FLOWS - continued
For the year ended 31 December
Group
Company
Note
2023
€
2022
€
2023
€
2022
€
20
Cash flows from financing activities:
Proceeds from bank borrowings
499,972
3,766,758
-
-
Issuance of bond
8,810,941
8,622,604
8,810,941
8,622,604
Repayment of bank borrowings
-
(2,855,514)
-
-
Interest paid
(1,026,435)
(629,690)
(679,000)
(379,450)
Interest paid on lease liabilities
(173,143)
(175,136)
-
-
Payments on finance leases
(45,177)
(36,442)
-
-
Movement in amounts due to subsidiary,
ultimate shareholder and related
company
121,211
7,790
207,584
234,370
Net cash flows generated from
financing activities
8,187,369
8,700,370
8,339,525
8,477,524
Net cash (decrease)/increase in cash
and cash equivalents
(565,049)
1,022,730
(10,076)
9,782
Cash and cash equivalents at
beginning of year
882,676
(140,054)
9,987
205
Cash and cash equivalents at end of
year
20
317,627
882,676
(89)
9,987
The notes on pages 21 to 59 are an integral part of these consolidated financial statements.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS
21
1. GENERAL INFORMATION
JD Capital plc ("the Company") is a public limited liability company incorporated and domiciled in Malta with
registration number C 82098. The Company's registered address 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
providing aluminium, steel, wrought iron, large scale glass formats, and stainless-steel works, as well as the
construction of steel structu res. The Group als o holds an investment pro perty.
JD Holdings Limited, a limited liability company incorporated and domiciled in Malta, is the ultimate parent
of the Group and of the Company. Josef Dimech, a resident in Malta, is the ultimate beneficial owner of the
Group and of the Co mpany.
2. MATERIAL ACCOUNTING POLICY INFORMAT ION
The accounting policies that are material to the consolidated financial statements are set out below. The
accounting policies adopted are consistent with those of the previous financial year, unless otherwise
stated.
Basis of preparation
These financial statements are prepared in accordance with International Financial Reporting Standards
(IFRS Accounting Standards) as adopted by the European Union ("EU") and comply with the requirements
of the Companies Act (Cap. 386) enacted in Malta. These financial statements have been prepared under
the historical cost convention, except for, the revaluation of investment property and certain classes of
property, plant and e quipment.
Presentation and functio nal currency
These financial statements are presented in Euro (€) which is also the Group's and Company's functional
currency.
New or amended a ccounting stand ards and interpr etations adopted
The following amended standards became applicable for the current reporting period.
Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting Policies
The amendments are intended to help preparers in deciding which accounting policies to disclose in their
financial statements. The term ‘significant’ was replaced with ‘material’ in the context of disclosing
accounting policy information. In assessing the materiality of the accounting policy information the Group
considers the size of transa ctions, other events or c onditions and their nat ure.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
2. MATERIAL ACCOUNTING POLICY INFORMAT ION - continu ed
New or amended a ccounting stand ards and interpr etations adopted - con tinued
22
Amendments to IAS 12 – Deferred tax related to Assets and Liabilities arising from a Single Transaction
Prior to the amendments, there had been some uncertainty about whether the IAS 12 exemption from
recognising deferred tax applied to transactions for which the Group recognises both an asset and liability,
for example leases. The amendments clarify that the exemption does not apply and that the Group is
required to recognise deferred tax on such transactions. The Group now discloses the deferred tax on lease
liabilities and right-of-use assets separately arising from the application of IFRS 16.
The Group adopted all of the new or amended Accounting Standards and Interpretations issued by the
International Accounting Standards Board (‘IASB’) and the IFRS Interpretations Committee and endorsed
by the EU that are mandatory for the current reporting period. The adoption of these amendments to the
requirements of IFRS Accounting Standards as adopted by the EU did not result in substantial changes to
the Group’s accounting policies impacting t he Group’s financial perfor mance and posit ion.
New or amended a ccounting stand ards and interpr etations issued but no t yet effective
At the end of the reporting period, certain new standards, interpretations or amendments thereto, were in
issue and endorsed by the EU, but not yet effective for the current financial period. There have been no
instances of early adoption of standards, interpretations or amendments ahead of their effective date. The
directors anticipate that the adoption of the new standards, interpretations or amendments thereto, will not
have a material imp act on the financ ial statements upo n initial application.
Basis of consolidation
The consolidated financial statements incorporate the revenues and expenses, cash flows, assets and
liabilities of the Company and of its subsidiaries. Subsidiaries are companies over which the Group has
control, directly or indirectly. The Group controls an entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power to
direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from the date that control ceases.
These consolidated financial statements comprise the Company and its subsidiaries. Subsidiaries that were
consolidated are listed in Note 15 to these financial statements.
Intra-group transactions, balances and unrealised gains on transactions between companies within the
Group are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence 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
difference between the consideration transferred and the book value of the share of the non-controlling
interest acquired is recogn ised directly in eq uity attributable to the parent.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
2. MATERIAL ACCOUNTING POLICY INFORMAT ION - continu ed
Basis of consolidation - continu ed
23
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. Losses incurred by the Group are attributed to the
non-controlling interest in full, even if that results in a deficit balance.
Where the Group loses control over a subsidiary, it derecognises the assets, liabilities and non-controlling
interest in the subsidiary. 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.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and
the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the
Group’s share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair
value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is
recognised directly in profit or loss.
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be
entitled when or as each performance obligation is satisfied in a manner that depicts the transfer to 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.
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, reflects concessions provided to the customer such as
discounts, rebates and refunds, any potential bonuses receivable from the customer and any other
contingent events.
Interest income
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
period using the effective interest rate, which is the rate that exactly discounts estimated future cash
receipts through the exp ected life of the financia l asset to the net carr ying amount of the financial asset.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
2. MATERIAL ACCOUNTING POLICY INFORMAT ION - continu ed
24
Tax
The tax charge/(credit) in the profit or loss for the year comprises current and deferred tax. Tax is
recognised in profit or loss except to the extent that it relates to items recognised in other comprehensive
income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the
end of the reporting period, and any adjustments to tax payable in respect of previous years.
Deferred income tax is provided using the balance sheet liability method, for all temporary differences
arising between the tax bases of assets and liabilities and their carrying values for financial reporting
purposes. The amount of deferred tax provided is based on the expected manner of realisation or
settlement of the carrying amount of assets and liabilities, based on tax rates that have been enacted or
substantively enacted at the end of the reporting period and are expected to apply when the related
deferred tax assets is realised or the deferred tax liability is settled.
Under this method, the Group is required to make provision for deferred income taxes on the revaluation of
certain property assets and provisions on the difference between the carrying value for financial reporting
purposes and their tax base.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be
available against which the assets can be utilised and/or sufficient taxable temporary differences are
available. Deferred tax assets are reduced to the extent that is no longer probable that the related tax
benefit will be realised.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current
tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they
relate to the same taxable authority on either the same taxable entity or different taxable entities which
intend to settle simu ltaneously.
Intangible assets
An intangible asset acquired as part of a business combination, other than goodwill, is initially measured at
fair value at the date of the acquisition. An intangible asset acquired separately is initially recognised at
cost. The Group's intangible asset has an indefinite useful life, is not amortised but is subsequently
measured at cost less any impairment. On derecognition, any gains or losses are recognised in profit or
loss as the difference be tween net disposa l proceeds and the carr ying amount of the intangible ass et.
Investment prop erty
Investment property principally comprises of freehold land held for long-term rentals or for capital
appreciation or both, and that is not occupied by the Group. Investment property, including property under
construction for such purposes, is initially recognized at historical cost, including transaction costs and
borrowing costs. Historical cost includes expenditure that is directly attributable to the acquisition of the
items. Borrowing costs which are incurred for the purpose of acquiring or constructing a qualifying
investment property are capitalised as part of its cost. Borrowing costs are capitalised while acquisition or
construction is actively underway. Capitalisation of borrowing costs is ceased once the asset is substantially
complete and is suspe nded if the dev elopment of the as set is suspended.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
2. MATERIAL ACCOUNTING POLICY INFORMAT ION - continu ed
Investment prop erty - continu ed
25
After initial recognition, investment property is carried at fair value, representing open market value
determined annually. Fair value is based on active market prices, adjusted, if necessary, for any difference
in the nature, location or condition of the specific asset. If the information is not available, the Group uses
alternative valuation methods such as recent prices on less active markets or discounted cash flow
projections. Movements in fair value are recognised directly to profit or loss in the period in which they arise.
Subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that future
economic benefits associated with the expenditure will flow to the Group and the cost of the item can be
measured reliably. All other repairs and maintenance costs are charged to profit or loss during the financial
period in which they are incurred. When part of an investment property is replaced, the carrying amount of
the replaced part is derecognised.
The fair value of investment property does not reflect future capital expenditure that will improve or enhance
the property and does not reflect the related future benefits from this future expenditure other than those a
rational market participant would take into account when determining the value of the property.
An investment property is derecognised upon disposal or when the investment property is permanently
withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss
arising on derecognition of the property (calculated as the difference between the net disposal proceeds
and the carrying amount of the asset) is included in profit or loss in the year in which the property is
derecognised.
Property, plant and equipment
The Group's property plant and equipment are classified in the following classes: land and buildings,
machinery, office furniture, motor vehicles, electronic equipment and electric hand tools. Land and buildings
within property, plant and equipment, are held on temporary emphyteusis and are considered as
right-of-use assets in terms of IFRS 16. The accounting policy for right-of-use-assets is included below in
the section entitled ‘Leases’.
All property, plant and equipment is initially recorded at historical cost. Subsequent to initial recognition,
property, plant and equipment are stated at cost less any accumulated depreciation and any accumulated
impairment losses, except for land and buildings which are accounted for under the revaluation model. The
revalued amount is based on periodic valuations by external independent valuers, less subsequent
depreciation and impairment, if any. The valuations are undertaken if there is a material change in the
revalued amount relative to the carrying amount. Any accumulated depreciation at the date of revaluation is
eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued
amount of the asset. Increases in the carrying amounts arising on revaluation of land and buildings are
credited in other comprehensive income through to the revaluation surplus reserve in equity. Any
revaluation decrements are initially taken in other comprehensive income through to the revaluation surplus
reserve to the extent of any previous revaluation surplus of the same asset. Thereafter the decrements are
taken to profit or loss.
All other property, plant and equipment is stated at historical cost less accumulated depreciation and
impairment. Historical cost includes the purchase prices and other expenditures directly attributable to
bringing the asset t o the location and condit ion for its intend ed use.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
2. MATERIAL ACCOUNTING POLICY INFORMAT ION - continu ed
Property, plant and equ ipment - continued
26
Subsequent expenditure relating to an asset is capitalised as additional cost only when it is probably that
future economic benefits will flow back to the Group, in excess of the originally assessed standard of
performance, and the cost of the item can be measured reliably. All other repairs and maintenance are
charged to profit or loss during the financial period in which they are incurred.
Depreciation
Depreciation commences when the depreciable assets are available for use and is charged to profit or loss,
so as to the right of the cost less any estimated residual value, over the estimated useful lives (unless this
exceeds the end of any applicable leases or emphyteusis, in which the accounting policy in the Section
entitled ‘Leases’ applies), using the straight line method on the following bases:
%
Land and buildings
by equal installments over the
remaining term of the emphyteusis
Machinery
20
Office furniture
10
Motor vehicles
20
Electronic equipment
25
Electric hand tools
20
Right-of-use assets are depreciated over the shorter period of the lease term and the useful life of the
underlying asset. The depreciation method applied, the residual value and the useful life are reviewed at
each financial year end and adjusted prospectively, as appropriate.
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 proceeds
are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred
directly to retained pr ofits.
Leases
IFRS 16 requires an entity to assess whether a contract is, or contains, a lease at the inception date. A
contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for a consideration. Leases are recognised as a right-of-use asset and a
corresponding liability at the commencement date, being the date at which the leased asset is available for
use by the Group.
Right of use-assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use assets are
measured under the rev aluation model.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
2. MATERIAL ACCOUNTING POLICY INFORMAT ION - continu ed
Leases - continued
27
Right of use-assets - continued
Right-of-use assets are subsequently depreciated on a straight-line basis over the unexpired period of the
lease or the estimated useful life of the asset, whichever is the shorter. Where the Group expects to obtain
ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life.
Right-of use assets are subject to impairment.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets
are expensed to profit or loss as incurred.
Lease liabilities
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, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental
borrowing rate. Lease payments comprise of fixed payments less any 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 variable lease payments that do not depend on a
index or a rate are expensed in the period in which they are incurred.
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 change in an
index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination
penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use
asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
Investment in sub sidiaries
Subsidiaries are companies over which the Company has control, directly or indirectly. The Company
controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power to direct the activities of the entity.
Investment in subsidiaries in the statement of financial position of the Company are stated at cost less any
accumulated impairment losses. Provisions are recorded where, in the opinion of the directors, there is an
impairment in value. Where there has been an impairment in the value of an investment, it is recognised as
an expense in the period in which the diminution is identified.
Provisions are recorded where, in the opinion of the directors, there is an impairment in value. Where there
has been an impairment in the value of an investment, it is recognised as an expense in the period in which
the diminution is ident ified.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
2. MATERIAL ACCOUNTING POLICY INFORMAT ION - continu ed
28
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability
or equity instrument of another entity. Financial assets and financial liabilities are recognised when the
Group becomes a party to the contractual provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset
expire, or when the financial asset and all substantial risks and rewards are transferred. Financial liabilities
are derecognised when they are extinguished, discharged, cancelled or expired.
Financial assets
Financial assets are classified at initial recognition in accordance with how they are subsequently
measured, as follows:
• financial assets at amortised cost;
• financial assets at fair value through other comprehensive income; and
• financial assets at fair value through profit or loss.
The Group’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.
On initial recognition, financial assets at amortised cost are recognised at fair value plus transaction costs
that are directly attributable to the acquisition of the financial asset. Discounting is omitted where the effect
of discounting is immaterial.
Financial assets at amortised cost are subsequently carried at amortised cost using the effective interest
method less impairment losses, if any. Gain or losses are recognised in profit or loss when the asset is
derecognised, modified, or impaired.
The Group’s financial assets under this classification include cash and cash equivalents contract assets,
trade and other receivables and loans to related companies.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the Group has transferred substantially all the risks and rewards of ownership. When there
is no reasonable expect ation of recover ing part or all of a financ ial asset, its carry ing value is written off.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
2. MATERIAL ACCOUNTING POLICY INFORMAT ION - continu ed
Financial instruments - co ntinued
29
Imp airment of financ ial assets
The Group recognises an allowance for expected credit losses (ECLs) on financial assets that are
measured at amortised cost. ECLs are based on the difference between the contractual cash flows due in
accordance with the contract and all the cash flows that the Group expects to receive, discounted at an
approximation of the original effective interest rate. The resulting impairment allowance is insignificant to
the Group's financial position and results.
For trade receivables, the Group applies a simplified approach to measuring ECLs which uses a lifetime
expected loss allowance. The ECL is estimated using a provision matrix based on the Group's historical
credit loss experience, adjusted for forward-looking factors specific to the debtors.
For related parties, the Group applies the general approach if the financial asset is determined to have low
credit risk at the reporting date where the credit risk has not increased significantly since initial recognition.
The financial asset is deemed to have low credit risk if there is low risk of default and the debtor has a
strong capacity to meet its contractual obligations in the near term.
While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified
impairment losses are insignificant.
Financial liabilities
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.
The Group’s financial liabilities are mainly financial liabilities at amortised cost.
Financial liabilities at amortised cost
Financial liabilities at amortised cost are initially recognised at fair value, net of transaction costs and are
subsequently measured at amortised cost using the effective interest method. All interest related charges
under the interest amortisation process are recognised in profit or loss.
The Group derecognises a financial liability from its statement of financial position when the obligation
specified in the contract or arrangement is discharged, is cancelled or expires. On derecognition, the
difference between the carrying amount of the financial liability (or part of a financial liability) extinguished or
transferred to another party and the consideration paid, including any non-cash assets transferred or
liabilities assumed, are recognised in profit or loss.
Financial liabilities under t his category inc lude borrowings, contract l iabilities and trade and other payables.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
2. MATERIAL ACCOUNTING POLICY INFORMAT ION - continu ed
30
Co ntract assets
Contract assets are recognised when the Group has transferred goods or services to the customer but
where the Group is yet to establish an unconditional right to consideration. Contract assets are treated as
financial assets for impa irment purposes.
Inventories
Raw materials and work in progress are stated at the lower of cost and net realisable value. Cost comprises
of direct materials and delivery costs, direct labour, import duties and other taxes, and an appropriate
proportion of variable and fixed overhead expenditure based on normal operating capacity. Costs of
purchased inventory are determined after deducting rebates and discounts received or receivable and are
assigned on a weighted average basis.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the sale. Write-down to the net realisable
value is recognised in prof it or loss.
Contract liabilities
Contract liabilities represent the Group's obligation to transfer goods or services to a customer and are
recognised when a customer pays consideration, or when the Group recognises a receivable to reflect its
unconditional right to consideration (whichever is earlier) before the Group has satisfied its performance
obligation in a contract w ith the customer.
Fair value measu rement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date; and assumes that
the transaction will take place either: in the principal market; or in the absence of a principal market, in the
most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming they act in their economic best interests. For non-financial assets, the fair value
measurement is based on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data is available to measure fair value, is used, 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 reviewed at
each reporting date and transfers between levels are determined based on a reassessment of the lowest
level of input that is sign ificant to the fair value m easurement.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
2. MATERIAL ACCOUNTING POLICY INFORMAT ION - continu ed
Fair value measu rement - con tinued
31
For recurring and non-recurring fair value measurements, external valuers may be used when internal
expertise is either not available or when the valuation is deemed to be significant. External valuers are
selected based on market knowledge and reputation. Where there is a significant change in fair value of an
asset or liability from one period to another, an analysis is undertaken, which includes a verification of the
major inputs applied in the latest valuation and a comparison, where applicable, with external sources of
data.
3. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
Estimates and judgments are continually evaluated and based on historical experience and other factors
including expectations of future events that are believed to be reasonable under the circumstances. In the
opinion of the directors, with the exception of the below and the fair valuation of investment property and
the revaluation of the land and buildings category within property, plant and equipment (Notes 12 and 13),
the accounting estimates and judgments made in the course of preparing these financial statements are not
difficult, subjective or complex to a degree which would warrant their description as critical in terms of their
requirements of IAS 1.
Effect of inflation
The Harmonised Index of Consumer Prices inflation in 2023 reached 5.6% despite the energy prices being
kept at 2020 levels by government intervention. Inflation in 2024 is forecasted to ease to 2.9% which is still
slightly higher than the EU average of 2.7%. Whilst there is a correlation between interest rates and
inflation, the Group’s exposure to the interest rate risk is limited to variable interest rates on
borrowings. This applies to the Group’s bank borrowings whose applicable interest rates are linked to the
bank’s base rate. However, this is not applicable to the issuer’s bond interest rate, which is fixed and is not
effected by inflation or changes in interest rates. Thus, inflationary pressures on interest rates are deemed
to have a minimal impact on the Group’s finances.
Inflationary pressures are deemed to have minimal impact on the Group’s operation. This is because most
contracts span over a 1 year period and thus, at budgeting stage, any forecasted inflation spikes in the cost
of raw material are captured and reflected in the contracted prices with clients. This enables the Group to
safeguard its profit m argins and contrib utions towards fixed cos ts.
4. REVENUE
Group
2023
€
2022
€
Revenue from contracts with customers
12,965,375
11,831,725
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
32
5. OTHER INCOME
Group
2023
€
2022
€
Management fees
235,882
213,496
Other
3,440
-
239,322
213,496
6. OPERATING PROFIT/(LOSS)
The operating profit/(loss) is stated after charging:
Group
Company
2023
€
2022
€
2023
€
2022
€
Employee benefit expense (Note 7)
3,462,497
3,597,649
145,020
27,073
Directors' remuneration
252,638
290,801
50,583
12,913
Directors' fees
56,050
14,160
56,050
14,160
Auditors' remuneration:
- Statutory audit
40,072
34,903
15,611
14,868
- Review services (interim reports)
2,714
2,596
2,714
2,596
- Tax compliance services
1,298
1,100
472
472
- Other assurance services
1,770
250
1,770
-
- Other non-assurance services
4,967
950
2,360
-
Depreciation charge (Note 12)
653,735
942,408
-
-
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
33
7. EMPLOY EE BENEFIT EXPEN SE
Group
Company
2023
€
2022
€
2023
€
2022
€
Employee benefit expense
3,153,809
3,292,688
38,387
-
Directors' remuneration
252,638
290,801
50,583
12,913
Director's fees
56,050
14,160
56,050
14,160
3,462,497
3,597,649
145,020
27,073
Employee benefit expense incurred during the year were as follows:
Group
Company
2023
€
2022
€
2023
€
2022
€
Directors' remuneration
Directors' remuneration
330,678
288,125
-
-
Social security costs and maternity fund
2,764
2,676
-
-
333,442
290,801
-
-
(Less)/add recharges
(80,804)
-
50,583
12,913
252,638
290,801
50,583
12,913
Employee benefit expenses
Salaries and wages
2,908,325
3,074,473
-
-
Social security costs and maternity fund
189,985
218,215
-
-
3,098,310
3,292,688
-
-
Add recharges by related company
126,826
-
38,387
-
Capitalised salaries
(71,327)
-
-
-
3,153,809
3,292,688
38,387
-
Directors' fees
Directors' fees
56,050
14,160
23,600
14,160
Add recharges by related company
-
-
32,450
-
56,050
14,160
56,050
14,160
3,462,497
3,597,649
145,020
27,073
The average number of persons employed by the Group during the year were 77 production personnel and
7 administrative personnel (2022: 100 and 8, respectively). The Company has no employees of its own.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
34
8. INTEREST INCOME
Group
Company
2023
€
2022
€
2023
€
2022
€
Interest on loans receivable
51,321
41,899
1,072,591
342,299
9. FINANCE COSTS
Group
Company
2023
€
2022
€
2023
€
2022
€
Interest on bonds payable
436,530
292,310
977,356
292,310
Interest on bank borrowings
360,666
205,672
-
-
Interest on lease liabilities
173,143
175,136
-
-
Interest on late payment
218,637
44,568
-
458
Bank interest
-
168
-
168
Interest on hire of equipment
-
5,801
-
-
1,188,976
723,655
977,356
292,936
10. OTHER LOSSES
During the year ended 31 December 2023, the Group had no disposals of property, plant and equipment
(2022: loss on disposal of €1,721).
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
35
11. TAXATION
The tax charged/(credited) to profit or loss comprised of the following:
Group
Company
2023
€
2022
€
2023
€
2022
€
Current tax
96,427
233,486
-
-
Adjustment of prior period current tax
-
(199)
-
(199)
Deferred tax credit
133,123
(34,078)
-
-
229,550
199,209
-
(199)
The tax on the Group and the Company’s profit/(loss) before ta x differs from the theoretical tax
charge/(credit) that would arise using the applicable tax rate in Malta of 35% as follows:
Group
Company
2023
€
2022
€
2023
€
2022
€
Profit/(loss) before tax
259,355
417,526
(249,935)
(237,189)
Theoretical tax expense/(credit) at 35%
90,774
146,134
(87,477)
(83,016)
Tax effect of:
Non-taxable income
(110,468)
(22,905)
(110,468)
(8,330)
Non-deductible expenses
304,164
318,124
197,945
91,346
(Over)/under provision
(39,314)
18,286
-
(199)
Temporary differences on investment property
14,019
(260,430)
-
-
Temporary differences on lease
(166,547)
-
-
-
Temporary difference on interest income
136,922
-
-
-
229,550
199,209
-
(199)
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
11. TAXATION - continued
36
Deferred income taxes are calculated on all temporary differences under the liability method using a
principal tax rate of 35% (2022: 35%), with the exception of deferred taxation on the revaluation of property,
plant and equipment and the fair value measurement of investment property which is computed utilising a
tax rate of 8% (2022: 8%) on the basis applicable to property disposals. The movement on the deferred
income tax account is analysed as follows:
Opening
balance
€
Recognised
in profit or
loss
€
Recognised
in equity
€
Closing
balance
€
As at 31 December 2023
Arising on temporary differences:
Property, plant & equipment
-
136,147
-
136,147
Lease liabilities
-
(166,547)
-
(166,547)
Provision for impairment of receivables
(213,026)
12,582
-
(200,444)
Interest accrued
51,736
136,922
-
188,658
(161,290)
119,104
-
(42,186)
Arising on:
Revaluation of right of use assets
1,360,000
-
872,287
2,232,287
Fair value measurement of investment property
439,520
14,019
-
453,539
1,799,520
14,019
872,287
2,685,826
As at 31 December 2022
Arising on temporary differences:
Provision for impairment of receivables
(193,523)
(19,503)
-
(213,026)
Interest accrued
66,311
(14,575)
-
51,736
(127,212)
(34,078)
-
(161,290)
Arising on:
Revaluation of right of use assets
1,360,000
-
-
1,360,000
Fair value measurement of investment property
360,000
79,520
-
439,520
1,720,000
79,520
-
1,799,520
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
37
12. PROPERTY, PLANT AND EQUIPMENT
Group
Land and
buildings
€
Machinery
€
Office
furniture
€
Motor
vehicles
€
Electronic
equipment
€
Electric
hand tools
€
Total
€
Year ended 31 December 2023
Opening net book value
22,553,975
104,175
69,977
36,982
9,634
36,967
22,811,710
Additions
4,631,561
14,185
1,436
-
5,883
15,993
4,669,058
Revaluation surplus
1,181,186
-
-
-
-
-
1,181,186
Depreciation for the year
(539,957)
(62,518)
(12,094)
(14,256)
(6,381)
(18,529)
(653,735)
27,826,765
55,842
59,319
22,726
9,136
34,431
28,008,219
As at 31 December 2023
Cost
27,826,765
1,044,164
120,937
698,296
90,180
275,112
30,055,454
Accumulated depreciation
-
(988,322)
(61,618)
(675,570)
(81,044)
(240,681)
(2,047,235)
27,826,765
55,842
59,319
22,726
9,136
34,431
28,008,219
Year ended 31 December 2022
Opening net book amount
22,970,472
310,171
76,442
179,741
12,258
78,222
23,627,306
Additions
123,294
-
5,485
-
4,192
10,569
143,540
Disposals
-
-
-
(15,500)
(1,228)
-
(16,728)
Depreciation for the year
(539,791)
(205,996)
(11,950)
(127,259)
(5,588)
(51,824)
(942,408)
22,553,975
104,175
69,977
36,982
9,634
36,967
22,811,710
As at 31 December 2022
Cost
23,934,720
1,029,979
119,501
698,296
84,297
259,119
26,125,912
Accumulated depreciation
(1,380,745)
(925,804)
(49,524)
(661,314)
(74,663)
(222,152)
(3,314,202)
22,553,975
104,175
69,977
36,982
9,634
36,967
22,811,710
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
12. PROP ERTY, PLANT AND EQUIPMENT - continued
38
The right-of-use asset emanates from two lease agreements pertaining to an office and land and buildings.
The carrying amount that would have been recognised had the land and buildings been carried under the
cost model is €18,031,412 (2022: €13,550,495).
During the year ended 31 December 2023, the Group capitalised borrowing costs amounting to €432,333.
Refer to Note 34 for f urther information on f air value measurem ent.
13. INVESTMENT PROPERTY
Group
2023
€
2022
€
At 1 January
Cost
4,022,715
4,022,184
Fair value gains
1,471,285
500,000
Carrying amount
5,494,000
4,522,184
Year ended 31 December
Opening balance
5,494,000
4,522,184
Additions
240,292
531
Fair value adjustments
-
971,285
Closing carrying amount
5,734,292
5,494,000
At 31 December
Cost
4,263,007
4,022,715
Fair value gains
1,471,285
1,471,285
Carrying amount
5,734,292
5,494,000
During the year ended 31 December 2023, the Group capitalised borrowing costs amounting to €108,493.
The fair value measurement relating to investment property is disclosed in Note 32. The investment
property is serving as a security by means o f a hypothec for bankin g facilities of a related co mpany.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
39
14. INTANGIBLE ASSETS
Group
Intellectual
property
€
Cost
Opening balance
224,497
Balance at 31 December 2023
224,497
Carrying amount
At 31 December 2022
224,497
At 31 December 2023
224,497
The Group's intangible asset pertains to the intellectual property right to use the business brand, logo, and
tradename 'JSDimech'. T he directors are of the opinion that t his has an indefin ite useful life.
15. INVESTMENTS IN SUBSIDIARIES
The following are 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:
Country
Ownership
%
2023
€
2022
€
Subsidiary
JD Operations Limited
Malta
100
3,501,200
3,501,200
JD Birkirkara Limited (i)
Malta
100
4,001,200
4,001,200
JD Real Estate Development Ltd. (ii)
Malta
100
3,201,200
-
10,703,600
7,502,400
i. On 13 March 2018, the Company entered into an agreement with JD Birkirkara Limited by virtue of
which the loan of €3,801,200 was capitalised as capital contribution.
ii. On 28 May 2023, the Company entered into an assignment of receivable agreement with JD Real
Estate Development Ltd. amounting to €3,200,000 which was assigned by way of a gratuitous capital
contribution.
The following table summarizes the financial information of the Company's subsidiaries as at and for the
year ended 31 December 2023.
Net assets
€
Profit/(loss)
€
JD Operations Limited
12,594,984
273,166
JD Birkirkara Limited
4,984,973
(24,628)
JD Real Estate Development Ltd.
3,198,800
-
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
40
16. FINANCIAL ASSETS AT AMORTISED COST
Group
Company
2023
€
2022
€
2023
€
2022
€
Non-current
Loans to subsidiaries (i)
-
-
22,291,991
7,004,388
Loan to ultimate parent company (ii)
1,713,858
1,663,556
-
-
1,713,858
1,663,556
22,291,991
7,004,388
Current
Amounts owed by ultimate parent company (iv)
463,713
48,975
7,013
45,400
Amounts owed by ultimate beneficial owner (v)
686,025
457,635
-
-
Amounts owed by related companies (iv)
4,875,233
4,874,345
-
-
Other receivables (iii)
3,200,000
13,239
-
-
9,224,971
5,394,194
7,013
45,400
i. The loans to subsidiaries are split as follows:
€4,900,000 which is unsecured, earns interest at 6.5% per annum and is repayable by not later than 30
September 2027.
€3,600,000 which is unsecured, earns interest at 6.35% per annum and is repayable by not later than
25 November 2032.
€4,999,561 which is unsecured, earns interest at 6.35% per annum and is repayable by not later than
25 November 2032.
€6,862,625 which is unsecured, earns interest at 7.5% per annum and is repayable by not later than 19
July 2033.
€1,999,125 which is unsecured, earns interest at 7.5% per annum and is repayable by not later than 19
July 2033.
Interest income for the period from these loans amounted to €1,072,591 (2022: €342,299). The amount
is net of €69,320 expected credit losses (2022: €26,350).
i. The loan to ultimate parent is unsecured, bears interest at 4.5% per annum and is repayable by 1
October 2024. The amount is stated net of expected credit loss of €3,465 (2022: €3,465).
ii. The other receivables were stated net of expected credit losses of €41 in 2022. These were unsecured
and interest free.
iii. The amounts owed by ultimate parent and related companies are unsecured, interest-free, and
repayable on demand. These are stated net of €15,260 expected credit losses (2022: €15,603).
iv. The amounts owed by ultimate beneficial owner are stated net of expected credit losses of €2,133
(2022: €1,419) and are u nsecured, interes t free and repayab le on demand.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
41
17. INVENTORIES
Group
2023
€
2022
€
Raw materials
1,380,206
1,350,088
Work in progress
183,084
13,919
1,563,290
1,364,007
18. CONTRACT ASSETS
Group
2023
€
2022
€
At 1 January
6,516,976
4,514,034
Additions
4,511,046
2,017,053
Movement in provision for expected credit losses
112,824
(14,111)
At 31 December
11,140,846
6,516,976
Contract assets are state d net of expected cr edit losses of €139,172 (2022: €251,996).
19. TRADE AND OTHER RECEIVABLES
Group
Company
2023
€
2022
€
2023
€
2022
€
Non-current
Trade receivables (i)
-
2,313,207
-
-
Current
Trade receivables (i)
5,529,430
4,019,148
-
-
Accrued Income (ii)
-
-
540,790
225,166
Prepayments
10,797,418
368,352
9,394
-
Other receivable
2,004,898
6,425,000
2,000,000
6,425,000
18,331,746
10,812,500
2,550,184
6,650,166
i. Trade receivables are stated net of allowance for expected credit losses amounting to €412,666 (2022:
€336,120). Expected credit losses recognised for the year amounted to €76,456 (2022: €34,242). The
non-current portion comprised of the following:
€761,596 was repayable in principal repayments of €27,200 per month.
€1,357,593 was repayable in principal repayments of €33,112 per month.
€201,108 was repayab le in principal repaym ents of €39,641 per mon th.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
19. TRADE A ND OTHER R ECEIVABLES - continued
42
i. Accrued interest income relates to the interest on the loan to two subsidiaries.
The Group's and Company's exposure to credit and currency risk relating to financial assets at amortised
cost are disclosed in Note 32.
20. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash and balances with banks. Cash and cash equivalents included
in the statement of cash flows reconcile to the amounts shown in the statement of financial position as
follows:
Group
Company
2023
€
2022
€
2023
€
2022
€
Cash in hand
5,069
6,951
-
-
Cash at bank
379,143
884,532
-
9,987
Bank overdraft
(66,585)
(8,807)
(89)
-
317,627
882,676
(89)
9,987
21. SHARE CAPITAL
Group and Company
2023
€
2022
€
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.
The holders of "Ordinary A" shares shall not be entitled to any rights in the Company, and shall therefore
not be entitled to vote at any general meeting of the Company. However, they have the right to return of
capital on their shares upon liquidation of the Company.
During the year ended 3 1 December 20 23, the Comp any did not declare any dividends.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
43
22. REVALUATION RESERVE
The property, plant and equipment revaluation surplus is used to record increments and decrements on the
revaluation of non-current assets.
Group
2023
€
2022
€
As at 1 January
7,856,800
7,856,800
Revaluation surplus
1,181,186
-
Deferred tax element (Note 11)
(872,287)
-
8,165,699
7,856,800
The revaluation reserv e is non-d istributable.
23. OTHER RESERVES
The Company entered into an assignment of receivable agreement with JD Holdings Limited amounting to
€3.2 million, which is being assigned by way of a gratuitous capital contribution. In line with IAS 32 such
amounts fall under the definition of equity and are therefore classified in these financial statements as a
component of equity.
24. EARNINGS/(LOSS) PER SHARE
Group
Company
2023
2022
2023
2022
Profit/(loss) for the period attributable to owners
of the Company
€29,805
€218,317
(€249,935)
(€236,990)
Weighted average number of ordinary shares
7,543,621
7,543,621
7,543,621
7,543,621
Basic earnings per share
€0.004
€0.029
(€0.033)
(€0.031)
The Group or the Company has no potential ordinary shares that would cause the dilution of basic
earnings/(loss) per share.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
44
25. BORROWINGS
Group
Company
2023
€
2022
€
2023
€
2022
€
Non-current
€14,000,000 bonds, 4.85%, unsecured (i)
13,655,465
13,625,498
13,655,465
13,625,498
€11,000,000 bonds, 6%, unsecured (ii)
10,815,425
-
10,815,425
-
Bank loan I (iii)
290,512
417,367
-
-
Bank loan II (iv)
-
244,582
-
-
Revolving facility (vi)
4,089,453
2,762,536
-
-
28,850,855
17,049,983
24,470,890
13,625,498
Current
Bank loan I (iii)
140,745
137,707
-
-
Bank loan II (iv)
255,555
594,297
-
-
Bank loan III (v)
1,500,000
-
-
-
Revolving facility (vi)
707,872
2,327,676
-
-
Bank overdraft
66,585
8,807
89
-
Amounts due to subsidiaries (vii)
-
-
441,954
234,370
Amounts due to related company (vii)
138,656
17,445
4,792
3,592
2,809,413
3,085,932
446,835
237,962
i. During the year ended 31 December 2022, the Company issued tranche 1 of a new series of bonds,
series 1, amounting to €14,000,000. The bonds will mature on 25 November 2032 with annual interest
payments every 25th of November until maturity. The amount presented is net of unamortised bond
issue costs of €344,878 (2022: €374,502). Interest expense on the bonds for the year are as disclosed
in Note 9 to these financial statements. The fair value of the bonds for every €100 bond as at 31
December 2023 was €99.99 (2022: €99.99). A bond exchange offer was accepted by all prior
bondholders whereby the 50,000 securities with a nominal value of €100 were exchanged to 50,000
securities with a nominal value of €100 in the new tranche. Additionally, a premium of €2 per bond was
paid by the Company amounting to €100,000.
ii. During the year ended 31 December 2023 the Company issued tranche 2 of series 1 bonds, amounting
to €11,000,000. The bonds will mature on 19 July 2033 with annual interest payments every 19th of
July until maturity. The amount presented is net of unamortised bond issue costs of €184,575 (2022:
Nil). Interest expense on the bonds for the year are as disclosed in Note 9 to these financial statements.
The fair value of the bonds for every €100 bond as at 31 December 2023 was €101.5.
iii. Bank loan I pertains to a loan with a local bank under the Malta Development Bank's COVID-19 Assist
Program. The loan shall bear interest at a fixed rate of 2.5% per annum for the first two years from the
take up of the loan and thereafter at the rate of the aggregate of the margin of 2.75% per annum and
the three-month EURIBOR. The loan is repayable over a period of six years inclusive of a 12-month
moratorium on the principal and six-months on interest. Following the moratorium period, the loan shall
be repayable in 60 monthly installments of €12,500. As from November 2023 the monthly installments
were increased to €13,250. The loan is secured by a first general hypothec over the Company's assets
and guarantee by th e ultimate shareho lder.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
25. BORRO WINGS - continu ed
45
iv. Bank loan II is a loan with another local bank taken as well under the Malta Development Bank's
COVID-19 Assist Program and is fully utilised as at year-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 repayable
in monthly installments 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.
v. Bank loan III pertains to a loan with a local bank. This is to be repaid by November 2024 and is subject
to 5.65% interest. The loan is secured by a joint and several guarantee amounting to €1,500,000
provided by the ultimate beneficial owner.
vi. The revolving facility is secured by title transfer, bears interest at the rate of 5% per annum plus the
12-month EURIBOR and is repayable in accordance with the term sheet as agreed with the bank for
each drawdown. The revolving facility is of €6,000,000. Subsequent to year end the facility was
re-financed with the below terms:
€200,000 to serve as an overdraft facility
€4,500,000 to be repaid in monthly installment of €52,000 inclusive of interest in the first 2 years and
monthly installment of €89,015 inclusive of interest for the following 4 years.
vii. The amounts due to subsidiaries and related company are unsecured, interest-free, and repayable on
demand.
The interest rate exposure of the borrowings is as follows:
2023
€
2022
€
At fixed rates
26,607,388
14,206,824
At floating rates
5,052,880
5,929,091
31,660,268
20,135,915
The carrying amount of the Group's borrowings are denominated in Euro. The weighted average effective
interest rate at the end of the reporting periods are as follows:
2023
%
2022
%
At fixed rates
3.62
3.37
At floating rates
7.71
6.71
As the end of the reporting period the Group had general banking facilities and loan facilities with the major
local banks amounting to €9.9 million (2022: €1.2 million). As at 31 December 2023, the Group had not yet
utilised €8.6 million (2022: €0.9 million) of total facilities.
The Group's and Company's exposure to liquidity and interest risk relating to borrowings are disclosed in
Note 32.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
46
26. LEASE LIABILITIES
Group
2023
€
2022
€
Due after more than five years
9,625,947
9,859,203
Due after one year but within five years
899,072
887,972
Due within one year
221,697
218,322
Total gross lease liabilities
10,746,716
10,965,497
Discounting
(7,300,207)
(7,473,811)
Present value of lease liabilities
3,446,509
3,491,686
Non-current
3,395,551
3,446,530
Current
50,958
45,156
3,446,509
3,491,686
The Group's lease liabilities pertain to the lease of land and buildings under a temporary emphyteusis for a
period of 65 years from 8 March 2018 and the lease of a commercial property (including garage) for a
period of 12 years from 1 October 2019. The Group's obligations under these leases are secured by the
lessor's title over the property. Generally, the Group is restricted from sub-leasing the property.
Group
2023
€
2022
€
At 1 January
3,491,686
3,528,128
Accretion of interest
173,143
175,136
Lease payments
(218,320)
(211,578)
At 31 December
3,446,509
3,491,686
The following were the amounts recognised in profit or loss relating to leases:
Group
2023
€
2022
€
Depreciation charge
114,370
113,973
Interest expense
173,143
175,136
287,513
289,109
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
47
27. TRADE AND OTHER PAYABLES
Group
Company
2023
€
2022
€
2023
€
2022
€
Non-current
Trade payables
186,311
347,196
-
-
Indirect taxes and social security contribution (i)
1,498,633
3,217,115
-
-
1,684,944
3,564,311
-
-
Current
Trade payables
7,477,014
4,282,763
44,335
3,905
Accruals
2,077,884
898,453
382,021
86,334
Indirect taxes and social security contribution (i)
1,611,293
2,249,057
-
-
11,166,191
7,430,273
426,356
90,239
The Group's and Company's exposure to liquidity and interest risk relating to trade payables are disclosed
in Note 32.
28. CONTRACT LIABILITIES
Group
2023
€
2022
€
At 1 January
2,889,500
2,212,033
Additions
1,859,300
1,659,578
Payments received in advance
1,253,229
522,115
Transfer to revenue
(1,816,558)
(1,504,226)
4,185,471
2,889,500
29. SIGNIFICANT NON-CASH TRANSACTIONS
There were no significant non-cash transactions during the year.
30. RELATED PARTY TRANSACTIONS
The Group has related party relationships with companies over which directors exercise significant
influence and with companies under common control. During the year, related parties have extended funds
to the Group for it to be able to meet its obligations as well as paid expenses on behalf of related parties.
During the year the Group also incurred interest on its borrowings from a related party which were
capitalised as part of the asset under construction. Transactions are carried out with related parties on a
regular basis and in the ordinary course of th e business.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
30. RELATE D PARTY TRANS ACTIONS - continu ed
48
The following summarises the transactions with related parties that transpired during the period:
Group
Company
2023
€
2022
€
2023
€
2022
€
Related company
Revenue from contracts
2,524,569
6,259,259
-
-
Cost of sales
(2,282,787)
1,919,969
-
-
Net recharges
(600,906)
789,885
-
-
Management fees
198,755
213,496
-
-
Net advances paid
(731,977)
(2,200,841)
-
-
Ultimate parent company
Interest income
50,302
41,643
-
-
Net recharges
46,022
-
-
-
Net advances paid
(390,025)
(6,131)
-
-
Ultimate shareholder
Net advances paid
(295,147)
(457,635)
-
-
Subsidiaries
Interest income
-
-
1,072,591
342,299
Recharges
-
-
121,833
(12,913)
Net advances paid
-
-
(15,330,573)
1,885,292
The outstanding amounts arising from transactions with related parties and the related terms and conditions
are disclosed in Notes 1 6 and 25 to these financial statemen ts.
31. CAPITAL COMMITMENTS
Group
2023
€
2022
€
Contracted but not provided for
Property, plant & equipment
7,280,560
-
Investment property
3,824,759
-
11,105,319
-
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
49
32. FINANCIAL RISK MANAG EMENT
The Group's activities potentially expose it to a variety of financial risks: market risk (including interest rate
risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial
performance of the Group. The Group did not make use of derivative financial instruments to hedge certain
risk exposures during the current and preceding financial periods.
The Group uses different methods to measure different types of risk to which it is exposed. These methods
include sensitivity analysis in the case of interest rate risks and ageing analysis for credit risk.
Risk management is carried out by senior finance executives ('finance') under policies approved by the
Board of Directors ('the Board'). These policies include identification and analysis of the risk exposure of the
group and appropriate procedures, controls and risk limits.
Market risk
Cash flow and fair value interest rate risk
The Group's significant instruments which are subject to fixed interest rates comprise of borrowings (Note
25). In this respect, the Group is potentially exposed to fair value interest rate risk in view of the fixed nature
of these instruments, which are however measured at amortised cost.
The Group’s interest rate risk principally arises from bank borrowings issued at variable rates (Note 25)
which expose the Group to cash flow interest rate risk. The Group uses a sensitivity analysis technique that
measures the change in the fair value and cash flows of the Group’s financial instruments at the reporting
date for hypothetical changes in the relevant market risk variables. The amounts generated from the
sensitivity analysis are forward-looking estimates of market risk assuming certain market conditions. Actual
results in the future may differ materially from those projected results due to the inherent uncertainty of
global financial markets. Management considers the potential impact on profit or loss of a defined interest
rate shift that is reasonably possible at the end of the reporting period to be immaterial. Up to the end of the
reporting period, the Group did not have any hedging arrangements with respect to the exposure of floating
interest rate risk.
The Group has considerable bank borrowings issued at fixed rates (Note 25). These bank loans do not
expose the Group to cash flow interest rate ris k.
Credit risk
Credit risk refers to the risk that a counterparty in the financial assets will default on its contractual
obligations resulting in financial loss to the Group.
The Group obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to credit
risk at the reporting date to recognised financial assets is the carrying amount, net of any provisions for
impairment of those assets, as disclosed in the statement of financial position and notes to the financial
statements. The Group does not hold any collateral.
The Group's credit risk arises on cash and cash equivalents, deposits with banks, loans and receivables,
advances to related parties as well as credit exposure to customers, including outstanding receivables and
committed transactions. the carrying amount of financial assets represents the maximum credit exposure.
The maximum exposure t o credit risk at the reporting date w as:
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
32. FINANCIAL RISK MANAGEMENT - continued
Credit risk - con tinued
50
Group
Company
2023
€
2022
€
2023
€
2022
€
Trade receivables
5,529,430
6,332,355
-
-
Other receivable
5,204,898
6,438,239
2,000,000
6,425,000
Amounts due from related companies
4,875,233
4,874,345
-
-
Loans to subsidiaries
-
-
22,291,991
7,004,388
Amounts due from ultimate parent company
463,713
48,975
7,013
45,400
Loan due from ultimate parent
1,713,858
1,663,556
-
-
Amounts due from ultimate beneficial owner
686,025
457,635
-
-
18,473,157
19,815,105
24,299,004
13,474,788
The Group banks only with local financial institutions with high quality standing or rating. The Group's
operations are principally carried out in Malta. The Group has no concentration of credit risk that could
materially impact the sustainability of its operations.
Impairment of financial assets
The Group and Company's financial assets, trade receivables and contract assets, as well as cash and
cash equivalents, are subject to the IFRS 9' expected credit loss model. Financial assets subject to IFRS
9's expected credit loss model principally comprise loans and amounts advanced to subsidiaries, ultimate
parent and related parties, as disclosed in Note 16.
Trade receivables and contract assets
Carrying amounts for trade receivables are stated net of expected credit losses. In measuring the expected
credit losses, the customers have been assessed on a collective basis as they possess shared credit risk
characteristics. They have been based on the days past due.
Other receivables
The Group and Company's financial assets include significant loans and amounts due from subsidiaries,
ultimate parent, immediate parent and a related company, arising from transactions with these entities.
Management monitors intra-group and related party credit exposure at individual entity level and ensures
timely performance in the context of overall group liquidity management.
Cash at bank
The Group cash is placed with reputable financial institutions, such that management does not expect any
institution to fail to meet repayments of amounts held in the name of the companies within the Group. While
cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified
impairment loss was insignificant.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
32. FINANCIAL RISK MANAG EMENT - cont inued
Credit risk - con tinued
51
Credit risk related to trade receivables are as follows:
Gross
amount
€
ECL
€
Carrying
amount
€
31 December 2023
Current
5,310,466
(28,636)
5,281,830
30 to 89 days
123,339
(39,830)
83,509
90 to 179 days
39,928
(22,160)
17,768
180 to less than 1 year
379,348
(233,025)
146,323
More than 1 year
89,016
(89,016)
-
5,942,097
(412,667)
5,529,430
31 December 2022
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
Liquidity risk
The Group is exposed to liquidity risk in relation to meeting future obligations associated with its financial
liabilities. Prudent liquidity risk management includes maintaining sufficient 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 facilities
by continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial
assets and liabilities.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
32. FINANCIAL RISK MANAG EMENT - cont inued
Liquidity risk - con tinued
52
The following table details the undiscounted contractual cash flows arising from the Company's financial
liabilities:
Weighted
average
interest rate
%
1 year or
less
€
Between 1
and 2
years
€
Between 2
and 5
years
€
Over 5
years
€
Remaining
contractual
maturities
€
31 December 2023
Non-interest bearing
-
Amounts due to
related company
-
4,792
-
-
-
4,792
Amounts due to
group companies
-
441,954
-
-
-
441,954
Trade and other
payables (excluding
accrued interest)
-
44,335
-
-
-
44,335
Interest bearing fixed
rate
Bonds payable
(including interest)
5.43
1,339,000
1,339,000
4,017,000
31,016,000
37,711,000
1,830,081
1,339,000
4,017,000
31,016,000
38,202,081
Weighted
average
interest rate
%
1 year or
less
€
Between 1
and 2
years
€
Between 2
and 5
years
€
Over 5
years
€
Remaining
contractual
maturities
€
31 December 2022
Non-interest bearing
Amounts due to
related company
-
3,592
-
-
-
3,592
Amounts due to
group companies
-
234,370
-
-
-
234,370
Trade and other
payables (excluding
accrued interest)
-
3,905
-
-
-
3,905
Interest bearing fixed
rate
Bonds payable
(including interest)
4.85
679,000
679,000
2,037,000
17,395,000
20,790,000
920,867
679,000
2,037,000
17,395,000
21,031,867
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
32. FINANCIAL RISK MANAG EMENT - cont inued
Liquidity risk - con tinued
53
The following table details the undiscounted contractual cash flows arising from the Group's financial
liabilities:
Weighted
average
interest rate
%
1 year or
less
€
Between 1
and 2
years
€
Between 2
and 5
years
€
Over 5
years
€
Remaining
contractual
maturities
€
31 December 2023
Non-interest bearing
Trade payables
-
7,477,014
186,311
-
-
7,663,325
Indirect taxes and
social security
contributions
-
1,611,293
474,252
837,917
186,464
3,109,926
Amounts due to
related company
-
138,656
-
-
-
138,656
Interest bearing -
fixed
Bonds
5.43
1,339,000
1,339,000
4,017,000
31,016,000
37,711,000
Bank borrowings
5.44
1,702,306
159,000
143,800
-
2,005,106
Lease liabilities
5.00
221,697
278,767
677,375
9,626,406
10,804,245
Interest bearing -
variable
Revolving facility
5% plus
12-month
EURIBOR
572,000
624,000
3,204,540
1,068,180
5,468,720
Borrowings
3% plus
3-month
EURIBOR
268,178
-
-
-
268,178
13,330,144
3,061,330
8,880,632
41,897,050
67,169,156
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
32. FINANCIAL RISK MANAG EMENT - cont inued
Liquidity risk - con tinued
54
Weighted
average
interest rate
%
1 year or
less
€
Between 1
and 2
years
€
Between 2
and 5
years
€
Over 5
years
€
Remaining
contractual
maturities
€
31 December 2022
Non-interest bearing
Trade payables
-
4,282,763
347,196
-
-
4,629,959
Indirect taxes and
social security
contributions
-
2,249,057
785,309
2,053,762
378,044
5,466,172
Amounts due to
related company
-
17,445
-
-
-
17,445
Interest bearing -
fixed
Bonds
4.85
679,000
679,000
2,037,000
17,395,000
20,790,000
Bank borrowings
5.25
151,500
159,000
302,800
-
613,300
Lease liabilities
5.00
218,322
221,697
666,275
9,986,400
11,092,694
Interest bearing -
variable
Revolving facility
5% plus
12-month
EURIBOR
2,380,037
326,400
326,400
435,200
3,468,037
Bank borrowings
3% plus
3-month
EURIBOR
614,622
268,178
-
-
882,800
10,592,746
2,786,780
5,386,237
28,194,644
46,960,407
Fair value of financ ial instruments
The carrying amounts of cash at bank, receivables (net of impairment provisions, if any), payables,
borrowings and lease liabilities reflected in the financial statements are reasonable estimates of the fair
value in view of the nature of these instruments or the relatively short period of time between the origination
of the instruments and their exposed realisation. The fair value of financial liabilities for disclosure purposes
is estimated by discounting the future contractual cash flows at the current market interest rate that is+
available to the group for similar financial instruments.
As at the end of the reporting period, the fair value of financial assets and liabilities approximate the
carrying amounts s hown in the statement of fi nancial position.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
32. FINANCIAL RISK MANAG EMENT - cont inued
55
Timing of cash flows
The presentation of the financial assets and liabilities listed above under the current and non-current
headings within the statements of financial position is intended to indicate the timing in which cash flows will
arise.
Capital risk management
The Group manages its capital to ensure that it will be able to continue as a going concern and comply 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, 24 and 25 to these financial statements and
in the statements of ch anges in equity.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
56
33. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
Group
Amounts due to a
related company,
shareholder and
ultimate parent
€
Bank loans
and revolving
facility
€
Bonds
€
Lease
liabilities
€
Other
payables
€
Total
€
31 December 2023
Beginning balance
17,445
6,484,165
13,625,498
3,491,686
66,970
23,685,764
Cash flow from financing activities
121,211
152,537
8,321,000
(218,320)
-
8,376,428
Net non-cash changes
-
347,435
2,524,392
173,143
-
3,044,970
Balance at 31 December 2023
138,656
6,984,137
24,470,890
3,446,509
66,970
35,107,162
31 December 2022
Beginning balance
9,655
5,572,921
4,916,640
3,528,128
154,110
14,181,454
Cash flow 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
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
33. RECONCILI ATION OF LIA BILITIES ARISING FRO M FINANCING ACT IVITIES - continued
57
Company
Amounts due to
subsidiaries and a
related company
€
Bank loans
and revolving
facility
€
Bonds
€
Lease
liabilities
€
Other
payables
€
Total
€
31 December 2023
Beginning balance
237,962
-
13,625,498
-
66,970
13,930,430
Cash-flow from financing activities
207,584
-
8,321,000
-
-
8,528,584
Net non-cash changes
1,200
-
2,524,392
-
-
2,525,592
Balance at 31 December 2023
446,746
-
24,470,890
-
66,970
24,984,606
31 December 2022
Beginning balance
3,592
-
4,916,640
-
154,110
5,074,342
Cash-flow 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
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
58
34. FAIR VALUE MEASUREMENT
The Group's land and buildings and investment property are held for long-term yields or for capital
appreciation purposes. The Group utilises the rental income approach as a valuation method to determine
the fair value of other property and investment property as at 31 December and the market value basis in
relation to land.
The Group is required to analyse non-financial assets carried at fair value by level of the fair value
hierarchy.
The following table details the Group's assets and liabilities, measured or disclosed at fair value, using a
three-level hierarchy, based on the lowest level of input that is significant to the entire fair value
measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
Level 1
€
Level 2
€
Level 3
€
Total
€
31 December 2023
Assets
Land and buildings
-
-
27,826,765
27,826,765
Investment property - land
-
-
5,734,292
5,734,292
Total assets
-
-
33,561,057
33,561,057
The Group’s policy is to recognise transfers into and out of fair value hierarchy levels as of the beginning of
the reporting period. There were no transfers between levels during the financial year.
A reconciliation from the opening balance to the closing balance of land and buildings for recurring fair
value measurements categorised within Level 3 of the value hierarchy, is reflected in Notes 12 and13.
Valuation processes
The Group’s property is valued by the directors, generally taking cognisance of professional advice from
independent professionally qualified valuers who hold a recognised relevant professional qualification and
have the necessary experience in the location and segments of the property being valued.
When external valuations are carried out in accordance with this process, the valuer reports directly to the
directors and discussions on the valuation technique, the model utilised and its results, including an
evaluation of the inputs to the valuation model, are held at management level. A new valuation is typically
commissioned to an external valuer, whenever, in the opinion of the directors, new circumstances arise
which may suggest th at a material c hange in value in the underlying pro perty has occurr ed.
JD CAPITAL PLC
Annual Financial Report and Consolidated Financial Statements - 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS - continued
34. FAIR VALU E MEASUREM ENT - continued
59
Valuation techniques
The valuation of land is determined on the basis of the market value basis. The significant input to this
approach is a sales price per square metre related to transactions of comparable land to the Group’s
property discounted as a consequence of the land being on temporary emphyteusis.
The valuation of the other property and investment property is determined on the basis of rental income
streams per square metre, by reference to the rental income of comparable properties within close
proximity. This value is adjusted taking into consideration the permits and existing commitments.
The level 3 assets unobservable inputs and sensitivity are as follows:
Description
Fair value as at 31
December 2023
Valuation
technique
Significant unobservable
inputs
€
Land
26,642,621
Market value
Average sales price per square
metre of €1,350
Other property
1,184,144
Rental income
Average rate per square metre of
€244 and a discount rate of 6.77%
Investment property
5,734,292
Rental income
Average €220 to €500 per square
meter and a discount r ate of 6.25%
INDEPENDENT AUDITORS' REPORT
RSM Malta
Mdina Road,
Ħaż-Żebbuġ, Malta
ZBG 9015
T +356 2278 7000
www.rsm.com.mt
60
RSM Malta is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM
network. Each member of the RSM network is an independent accounting and consulting firm, which practices in its own
right. The RSM network is not itself a separate legal entity in any jurisdiction.
To the Shareholders of JD Capital plc
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of JD Capital plc ("the Company") and the
consolidated financial statements of the Company and its subsidiaries (together, "the Group"), set out
on pages 14 - 59, which comprise the statements of financial position as at 31 December 2023, the
statements of profit or loss and other comprehensive income, statements of changes in equity and
statements of cash flows for the year then ended, and notes to the financial statements, including a
summary of material accounting policy information.
In our opinion, the financial statements give a true and fair view of the financial position of the Group
and the Company as at 31 December 2023, and of their financial performance and their cash flows for
the year then ended in accordance with International Financial Reporting Standards (IFRS Accounting
Standards) as adopted by the European Union (EU), and have been properly prepared in accordance
with the requirements of the Maltese Companies Act (Cap. 386).
Our opinion 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.
Basis for Opinion
We conducted our audits in accordance with International Standards on Auditing ("ISA"). Our
responsibilities under those standards are further described in the A uditors’ Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Group and the
Company in accordance with the 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 the Accountancy Profession (Code of Ethics for Warrant
Holders) Directive issued in terms of the Accountancy Profession Act (Cap. 281) in Malta that are
relevant to our audit of the financial statements, and we have fulfilled our other ethical responsibilities
in accordance with these requirements and the IESBA Code and the Code of Ethics for Warrant
Holders in Malta. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
INDEPENDENT AUDITORS' REPORT - continued
61
To the Shareholders of JD Capital plc
Report on the Audit of the Financial Statements - continued
Basis for Opinion - continued
To the best of our knowledge and belief, we declare that non-audit services that we have provided to
the Company and its subsidiaries are in accordance with the applicable laws and regulations in Malta
and that we have not provided any non-audit services that are prohibited under Article 18A of the
Accountancy Profession Act (Cap. 281).
The non-audit services that we have provided to the Group during the year are disclosed in Note 6 in
the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current year. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Valuation of investment property relating to the Group
The Group's investment property pertaining to land in Birkirkara is carried at fair value of €5,734,292.
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, specific audit focus and attention was given to this area. The valuation of the property
was performed by management on the basis of valuation reports prepared by an independent qualified
architect.
Our audit procedures included, amongst others, the following:
• Considering the objectivity, independence, competence and capabilities of the external valuer.
• Assessing the valuation inputs and assumptions used on which the forecasts were made.
• Testing the mathematical accuracy of the calculations derived from the forecast model.
• Assessing the key valuation inputs and assumptions used on which the forecasts were made.
INDEPENDENT AUDITORS' REPORT - continued
62
To the Shareholders of JD Capital plc
Report on the Audit of the Financial Statements - continued
Key Audit Matters - continued
Valuation of property, plant and equipment relating to the Group
The Group’s land and buildings carried at fair value relate to two lease agreements. These had a
carrying amount of €27,826,765 as at year-end. 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, specific audit focus and attention was given to this area. The valuation of the property
was performed by management on the basis of valuation reports prepared by an independent qualified
architect.
Our audit procedures included, amongst others, the following:
• 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.
• Testing the mathematical accuracy of the calculations derived from the forecast model.
• Assessing the key valuation inputs and assumptions used on which the forecasts were made.
Assessment of the recoverability of receivables relating to the Group
We identified the recoverability of the related party receivables as a key audit matter due to the
significant 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 2023, the Group had a loan receivable and amounts due from the parent company
totalling to €2,177,571 and amounts due from related companies of €5,561,258.
Our audit procedures included, amongst others, the following:
• Reviewing the terms surrounding the agreements.
• Assessing the financial soundness of the parent company and related companies 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.
INDEPENDENT AUDITORS' REPORT - continued
63
To the Shareholders of JD Capital plc
Report on the Audit of the Financial Statements - continued
Other Information
The directors are responsible for the other information. The other information comprises the general
information and the directors’ report, and statement of compliance with the principles of good
corporate governance, but does not include the financial statements and our auditors report thereon.
Our opinion on the financial statements does not cover the other information, and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears
to be materially misstated. If, based on the work we have performed on the other 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 report that fact. We have nothing to report in
this regard.
Under Article 179(3) of the Maltese Companies Act (Cap. 386), we are required to consider whether
the information given in the directors’ report is compliant with the disclosure requirements of Article
177 of the same Act.
Based on the work we have performed, in our opinion:
• the directors’ report has been prepared in accordance with the Maltese Companies Act (Cap.
386);
• the information given in the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
• in light of our knowledge and understanding of the Group and the Company and their
environment obtained in the course of the audit, we have not identified material misstatements
in the directors’ 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 Accounting Standards as adopted by the EU and the requirements of the
Maltese Companies Act (Cap. 386), and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the
Company's ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to liquidate
the Group or the Company or to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the financial reporting process of the
Group and the Company.
INDEPENDENT AUDITORS' REPORT - continued
64
To the Shareholders of JD Capital plc
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 that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group's and the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s and the
Company's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditors’ report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditors’ report.
However, future events or conditions may cause the Group and the Company to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
INDEPENDENT AUDITORS' REPORT - continued
65
To the Shareholders of JD Capital plc
Report on the Audit of the Financial Statements - continued
Auditors' Responsibilities for the Audit of the Financial Statements - continued
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provided those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and communicate with them all relationships
and other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the financial statements of the current year 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.
Report on Other Legal and Regulatory Requirements
Report on the Statement of Compliance with the Principles of Good Corporate Governance
The Capital Market Rules issued by the Malta Financial Services Authority require the directors to
prepare and include in their Annual Financial Report a Statement of Compliance with the Code of
Principals of Good Corporate Governance within Appendix 5.1 to Chapter 5 of the Capital Market
Rules. The Statement’s required minimum contents are determined by reference to Capital Markets
Rule 5.97. The Statement provides explanations as to how the Company has complied with the
provisions of the Code, presenting the extent to which the Company has adopted the Code and the
effective measures the Board has taken to ensure compliance throughout the accounting period with
those Principles.
The Capital Market Rules also require the auditor to report on the Statement of Compliance 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 Financial Report with respect to the information referred to in the Capital Market Rules 5.97.4
and 5.97.5. We also assessed whether the Statement of Compliance includes all the other information
required to be presented as per Capital Market Rules 5.97. Our responsibilities do not extend to
considering whether this statement is consistent with any other information included in the Annual
Financial Report.
We are not required to, and we do not, consider whether the Board’s statements on internal control
included in the Statement of Compliance cover all risks and controls, or form an opinion on the
effectiveness of the Company’s corporate governance procedures or its risk and control procedures.
In our opinion, the Statement of Compliance with the Principles of Good Corporate Governance has
been properly prepared in accordance with the requirements of the Capital Market Rules issued by the
Malta Financial Services Authority.
INDEPENDENT AUDITORS' REPORT - continued
66
To the Shareholders of JD Capital plc
Report on Other Legal and Regulatory Requirements - continued
Report on compliance with the requirements of the European Sing le Electronic Format
Regulatory Technical Standard (the “ESEF RTS”), by reference to Capital Markets Rule 5.55.6
We have undertaken a reasonable assurance engagement in accordance with the requirements of
Directive 6 issued by the Accountancy Board in terms of the Accountancy Profession Act (Cap. 281) -
the Accountancy Profession (European Single Electronic Format) Assurance Directive (the “ESEF
Directive 6”) on the annual financial report of JD Capital p.l.c. for the year ended 31 December 2023,
entirely prepared in a single electronic reporting format.
Responsibilities of the directors
The directors are responsible for the preparation of the annual financial report, including the
consolidated financial statements and the relevant mark-up requirements therein, by reference to
Capital Markets Rule 5.56A, in accordance with the requirements of the ESEF RTS.
Auditors’ responsibilities
Our responsibility is to obtain reasonable assurance about whether the annual financial report,
including the consolidated financial statements and the relevant electronic tagging therein complies in
all material respects with the ESEF RTS based on the evidence we have obtained. We conducted our
reasonable assurance engagement in accordance with the requirements of ESEF Directive 6.
Our procedures included:
• obtaining an understanding of the entity's financial reporting process, including the preparation of
the annual financial report, in accordance with the requirements of the ESEF RTS.
• obtaining the annual financial report and performing validations to determine whether the annual
financial report has been prepared in accordance with the requirements of the technical
specifications of the ESEF RTS.
• examining the information in the annual financial report to determine whether all the required
taggings therein have been applied and whether, in all material respects, they are in accordance
with the requirements of the ESEF RTS.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Opinion
In our opinion, the Annual Financial Report for the year ended 31 December 2023 has been prepared,
in all material respects, in accordance with the requirements of the ESEF RTS.
INDEPENDENT AUDITORS' REPORT - continued
67
To the Shareholders of JD Capital plc
Report on Other Legal and Regulatory Requirements - continued
Other Matters on which we are Required to Report by Exception
Under the Maltese Companies Act (Cap. 386), we are required to report to you if in our opinion:
• proper accounting records have not been kept; or
• proper returns adequate for our audit 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 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 that the business is a going concern together with supporting assumptions or qualifications
as necessary.
We have nothing to report to you in respect of these responsibilities.
Appointment
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
reappointed by the shareholders at the Company's general meeting for the financial years thereafter.
The period of uninterrupted engagement as statutory auditor of the Company is six financial years.
This copy of the audit report has been signed by:
Conrad Borg (Principal)
for and on behalf of
RSM Malta
Registered Auditors
24 April 2024