GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
Reg. No. C 75875
GAP GROUP P.L.C.
ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
31st DECEMBER 2024
CONTENTS PAGE
Directors' Report 1 - 6
Corporate Governance - Statement of Compliance 7 - 9
Income Statement & Statement of Comprehensive Income 10
Statement of Financial Position 11
Statement of Changes in Equity 12
Statement of Cash Flows 13
Notes to the Financial Statements 14 - 42
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
1
DIRECTORS' REPORT
FOR THE YEAR ENDED 31st DECEMBER 2024
The directors present their annual report and the audited parent company financial statements together
with the group’s consolidated financial statements (the “financial statements”) of Gap Group p.l.c. for the
year ended 31st December 2024.
Principal Activities
The principal activity of Gap Group p.l.c. is to hold investments in subsidiary companies and to raise
financial resources from the capital markets to finance its investments and the property development
projects of its subsidiaries. The principal activity of the Group is to acquire, develop and dispose of
immovable property and to construct, develop and enter into arrangements with contractors and other
service providers in connection with its properties. The directors do not envisage any changes to the
company’s and group’s principal activities in the foreseeable future.
Review of business
Works on the developments progressed well and within the scheduled time frames. The Group continued
to sign new preliminary agreements at a steady pace whilst a promising number of contracts from its
various projects were signed during the financial period under review. During 2025 the group will focus its
resources to deliver the last two remaining projects; Sunflower Living in Qawra and Pier Points in
Marsaskala.
The Group generated a gross profit of €20,195,429 during 2024 (2023: €15,203,248). The Group’s net profit
for the year amounted to €14,346,213 (2023: €9,696,517). The Company generated a net profit of €130,792
in 2024 (2023: €170,447).
Fairwinds
The Fairwinds development in Luqa consists of 268 apartments, spread over 21 blocks. By the end of the
year, all the blocks were fully complete. During the year under review, the company contracted the last
remaining unit.
At the end of the year, the company held 2 garages in stock, which were subject to a promise of sale
agreement.
Mulberry Park
Works on the Mulberry Park in Qawra started in December 2020 and progressed at a steady pace. The
project consists of 93 residential units and was completed during 2023.
As at the end of the year, the company has contracted all the residential units and 83 garages.
The company held 68 garages in stock, 13% of which were subject to a promise of sale agreement.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
2
DIRECTORS' REPORT – continued
Review of business – continued
The Pantheon
Works on The Pantheon development in Mosta started in December 2020 and the project which is split in
3 different Zones consists of 114 residential units.
As at year end, all zones were 100% complete.
As at 31 December 2024, out of the 114 residential units, 100 units have been contracted and a further 14
units were subject to a promise of sale agreement. This means that 100% of the units were committed,
out of which 88% have been contracted.
By the end of 2024 the company has also contracted 88 garages and held 70 in stock, 26% of which were
subject to a promise of sale agreement.
Seaberry Park
Works on Seaberry Park development in Qawra started in early 2022 and were fully completed by the end
of 2023. The project consists of 113 units and 185 garages.
As at 31 December 2024, 108 units have been sold (contracted) and another 5 units were subject to a
promise of sale agreement. This means that 100% of the units have been committed, 96% of which have
been contracted.
By the end of 2024 the company has also contracted 76 garages and held 109 in stock, 12% of which were
subject to a promise of sale agreement.
Sunflower Living
During 2023, the company acquired a plot of land in Qawra through one of its subsidiaries. The project
consists of 59 units and 59 garages.
As at the end of 2024, construction was 100% complete, whereas finishes were in an advanced stage of
completion.
The project was launched in June 2024 and by the end of the reporting year, 51 units and 22 garages were
subject to a promise of sale agreement.
Pier Points
Works on Pier Points in Marsaskala commenced in January 2023 and are advancing according to schedule.
As at the end of December 2024, excavation was 100% complete, construction was 72% complete whereas
finishes were 30% complete.
The first phase of the project is expected to be launched on the market in Q2 2025.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
3
DIRECTORS' REPORT – continued
Bonds in issue
At the end of the year, the company had one bonds in issue, namely the GAP Group p.l.c. 4.75% Secured
Bonds 2025 - 2027.
On 11 April 2024, the company redeemed in full the remaining balance of the GAP Group p.l.c. 3.7%
Secured Bonds 2023- 2025, amounting to €5,792,000. Furthermore, on 30 December 2024, the company
redeemed in full the remaining balance of the Gap Group p.l.c. 3.9% Secured Bonds 2024 – 2026,
amounting to €15,472,000.
As at 31 December 2024 the aggregate amount of bonds in issue amounted to €22,857,686 being the Gap
Group p.l.c. 4.75% Secured Bonds 2025–2027.
Reserve Account
Pursuant to the bond prospectus of the 4.75% Secured Bonds 2025 – 2027, a reserve account had been
created by the Security Trustee to cover for the redemption of the three bonds. All sales of units forming
part of the hypothecated property in favour of the bond issue shall be made on condition that these units
are freed from hypothecary rights and privileges against an agreed amount from the sale proceeds being
deposited in the said Reserve Accounts.
By 31 December 2024, the Reserve Account of the 4.75% Secured Bonds 2025 - 2027 carried a balance of
€50,000.
Principal risks and uncertainties
Although the development works of the afore-mentioned projects and the securing of new sales by way of
preliminary agreements are progressing as planned, the company is still subject to several financial risk
factors including the market, economic, counter-party, credit and liquidity risks amongst others that may
affect the projects and their timely completion. Additionally, the directors are monitoring closely
inflationary risks resulting from the conflict in Ukraine and the Middle-East. The directors are confident
that the company has robust measures in place to mitigate the likely possible effects of inflationary
pressures. Where possible, the board provides principles for the overall risk management as well as
policies to mitigate these risks in the most prudent way.
Strategy risk
Risk management falls under the responsibility of the board of directors. The board is continuously
analysing its risks management strategy to ensure that risks are adequately identified and managed. The
audit committee regularly reviews the risk profile adopted by the board of directors.
Operational risks
The company is a holding company, thus its income is derived from dividends and interest income charged
to its subsidiaries. During the year ended, no dividends were received. The company is heavily dependent
on the performance of its subsidiaries. The management regularly reviews the financial performance of the
group companies to ensure that there is sufficient liquidity to sustain its operations.
Legislative risks
The company is governed by a number of laws and regulations. Failure to comply could have financial and
reputational implications and could materially affect the company’s ability to operate. The company has
embedded operating policies and procedures to ensure compliance with existing legislation.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
4
DIRECTORS' REPORT – continued
Directors
The directors of the Company who held office during the year were:
Paul Attard (Executive Director and Company Secretary)
Adrian Muscat (Executive Director)
Francis Gouder (Non-Executive Director)
Mark Castillo (Non-Executive Director)
Dr Chris Cilia (Non-Executive Director)
Justin Cutajar (Non-Executive Director)
The Company’s Articles of Association do not require any directors to retire.
The Company's Secretary is Mr Paul Attard.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
5
DIRECTORS' REPORT – continued
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are required by the Companies Act (Chap. 386) to prepare financial statements in accordance
with International Financial Reporting Standards as adopted by the EU which give a true and fair view of
the state of affairs of the company at the end of each financial year and of the profit or loss of the company
for the year then ended. In preparing the financial statements, the directors should:
• Ensure that the financial statements have been drawn up in accordance with International
Financial Reporting Standards as adopted by the European Union;
• adopt the going concern basis unless it is inappropriate to presume that the company will continue
in business;
• value separately the components of asset and liability items;
• select suitable accounting policies and apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• account for income and charges relating to the accounting period on the accruals basis;
• report comparative figures corresponding to those of the preceding accounting period.
The financial statements of GAP Group p.l.c. for the year ended 31 December 2024 are included in the
Annual Report 2024, which is published in hard-copy printed form and is available on the Company’s
website. The Directors are responsible for the maintenance and integrity of the Annual Report on the
website in view of their responsibility for the controls over, and the security of, the website. Access to
information published on the Company’s website is available in other countries and jurisdictions, where
legislation governing the preparation and dissemination of financial statements may differ from
requirements or practice in Malta.
The directors are responsible for ensuring that proper accounting records are kept which disclose with
reasonable accuracy at any time the financial position of the company and which enable the directors to
ensure that the financial statements comply with the Companies Act (Chap. 386). This responsibility
includes designing, implementing and maintaining internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error. The directors are also responsible for safeguarding the assets of the company, and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
Statement by the Directors pursuant to Listing Rule 5.68
We, the undersigned, declare that to the best of our knowledge, the financial statements prepared in
accordance with the applicable accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and its subsidiaries included in the consolidation taken
as a whole, and that this report includes a fair review of the performance of the business and the position
of the Company and its subsidiaries included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face.
Going Concern statement pursuant to Listing Rule 5.62
Based on the outcome of cash flow projections which factor for possible strain on the property market
resulting from inflationary pressures resulting from conflicts in East Europe and the Middle East , the
Directors consider the going concern assumption in the preparation of the financial statements as
appropriate as at the date of authorisation and believe that no material uncertainty that may cast
significant doubt about the company’s and the group’s ability to continue as a going concern exists as at
that date.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
6
DIRECTORS' REPORT – continued
STATEMENT OF DIRECTORS’ RESPONSIBILITIES – continued
Statement by the Directors pursuant to Listing Rule 5.70.1
As at the year end the group had entered into capital commitments with various contractors for the
development of various projects and entered into promise of sale agreements in connection with the sales
of immovable properties of such projects.
Auditor
The auditor of the company, TACS Malta Limited has expressed its willingness to continue in office and a
resolution proposing his reappointment will be put before the members at the next annual general
meeting.
Signed on behalf of the Board of Directors on 25 April 2025 by Mr. Paul Attard (Director) and Mr. Adrian
Muscat (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in
conjunction with the Annual Financial Report.
Registered office:
PLAN GROUP HEAD OFFICE,
Triq il- Wirt Naturali,
Bahar ic- Caghaq,
In- Naxxar
Date : 25 April 2025
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
7
CORPORATE GOVERNANCE - STATEMENT OF COMPLIANCE
Corporate governance - Statement of compliance
1.Introduction
Pursuant to the Listing Rules issued by the Listing Authority of the Malta Financial Services Authority, GAP
Group p.l.c. is hereby reporting on the extent of its adoption of the Code of Principles of Good Corporate
Governance contained in Appendix 5.1 of the Capital Market Rules.
GAP Group p.l.c. acts as a finance company to the Group and as such has minimal operations. Its primary
function is the lending and monitoring of the proceeds of the public bond to the Group. GAP Group p.l.c.
has no employees other than the directors and the company secretary.
2. Compliance with the Code
The Board of Directors of GAP Group p.l.c. (The Company) believe in the adoption of the Code and has
endorsed it except where the size and/or circumstances of the company are deemed by the Board not to
warrant the implementation of specific recommendations.
Additionally, the Board recognises that, by virtue of Listing Rule 5.101, the company is exempt from making
available the information required in terms of Listing Rules 5.97.1 to 5.97.3, 5.97.6 to 5.97.8.
Moreover, the Board also acknowledges that the requirements emanating from Directive 2014/95/EU as
published in Circular 05/16 – Transposition of Directive 2014/95/EU do not apply to the company since it
does not classify as a ‘large company’ under the definition of the Directive.
3. The Board of Directors
The board of directors is responsible for the Company’s affairs, for the overall direction of the company
and being dynamically involved in supervising the systems of control and financial reporting.
The Board meets at least four times annually and is currently composed of six members, three of whom
are independent from the Company or related parties.
As at date of this statement, the Board of Directors is composed as follows:
Paul Attard (Executive Director and Company Secretary)
Adrian Muscat (Executive Director)
Justin Cutajar (Non-Executive Director)
Francis Gouder (Non-Executive Director)
Mark Castillo (Non-Executive Director)
Dr Chris Cilia (Non-Executive Director)
There is no CEO role required in the Company due to the nature of the Company and as such the board
carries out the policy decisions regarding the Company.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
8
CORPORATE GOVERNANCE - STATEMENT OF COMPLIANCE – continued
4. Committees
i. Audit Committee
In accordance with the Listing Rules, GAP Group p.l.c. has established an Audit Committee, which terms of
reference are based on the principles set out by the said Capital Market Rules. The Audit Committee is
entirely composed of independent, non-executive directors. At present, Francis X. Gouder acts as
chairperson, whilst Mark Castillo and Dr Chris Cilia LLD act as members. In compliance with the Capital
Market Rules, Francis X. Gouder is the independent Non-Executive Director who is competent in accounting
and auditing matters having previously served in various senior positions in several financial institutions.
The committee’s primary object is to assist the board in fulfilling its supervisor and monitoring
responsibility by reviewing the company’s financial statements and disclosures, monitoring the system of
internal control established by management as well as the audit process. The audit committee formally
convened four times during the financial period ending 31st December 2024.
ii. Remuneration and Nomination Committees
Under present circumstances, the board does not consider it necessary to appoint a remuneration
committee and a nomination committee as decisions on these matters are taken at shareholder level and
by the board itself.
iii. Evaluation of the board’s performance
Under present circumstances, the board does not consider it necessary to appoint a committee to carry
out a performance evaluation of its role as the board’s performance is constantly under the scrutiny of the
shareholders of the company.
5. Remuneration Statement
In terms of Rule 8.A.4 of the Code of Principles of Good Corporate Governance contained in Appendix 5.1
of the Listing Rules of the Listing Authority (the “Code”), the Company is to include a remuneration
statement in its annual report which should include details of the remuneration policy of the Company in
respect of the financial packages of members of the Board of Directors of the Company.
The remuneration payable to directors of the Company consists of fixed remuneration only. No part of the
remuneration paid to the directors is performance-based and none of the directors (in their capacity as
directors of the Company) are entitled to profit-sharing, share options or pension benefits. The directors
do not receive any form of monetary or non-monetary perks or benefits. There were no changes to this
policy from the previous year and the Company does not intend to change the policy in the foreseeable
future.
Remuneration paid to the Directors by the subsidiaries of the Company for the period from 1st January
2024 to 31st December 2024 amounted to €167,288.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
9
CORPORATE GOVERNANCE - STATEMENT OF COMPLIANCE – continued
6. Internal Control
While the Board is ultimately responsible for the company’s internal controls as well as their effectiveness,
authority to operate the company is delegated to the Executive Directors. The company’s system of
internal controls has been drawn up through the Internal Control Manual to manage risks in the most
appropriate manner. Procedures are in place for the Company to control, monitor and assess risks and
their implications through ongoing cash flow monitoring reports and strategic plans which are presented
to the Executive Directors.
7. Relations with the market
The market and bondholders alike are kept up to date with all relevant information, the Annual Report and
Financial statements, as well as, via company announcements made through the Malta Stock Exchange.
8. Institutional shareholders
This principle is not applicable since the company has no institutional shareholders.
9. Conflicts of interest
The directors always act in the interest of the Company and its shareholders. If any director has a conflict
of interest, he will not be allowed to vote on the matter at hand. Furthermore, the board of directors and
management of the company is in compliance with the obligations towards the rules of Insider Dealing.
10. Corporate Social Responsibility
The Group adhered to accepted principles of corporate social responsibility in its day to day practices by
acting ethically in the day to day management of the business and strives to improve the quality of life of
the workforce as well as of the society at large. The Group also regularly supports charitable causes.
Signed on behalf of the Board of Directors on 25 April 2025 by Mr. Paul Attard (Director) and Mr. Adrian
Muscat (Director).
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
10
STATEMENT OF PROFIT & LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31
ST
DECEMBER 2024
Group Company
Notes 2024 2023 2024 2023
€ € € €
Revenue 3 48,181,299 42,763,849 - -
Cost of sales (27,985,870 ) (27,560,601 ) - -
Gross Profit 20,195,429 15,203,248 - -
A
dministrative expenses (2,494,000 ) (2,454,611 ) (224,767) (298,648)
Operating profit / (loss) 4 17,701,429 12,748,637 (224,767) (298,648)
Finance costs 7 (66,715 ) (348,848 ) (2,183,979) (3,263,913)
Finance income 8 448,252 599,107 2,565,516 3,760,730
Loss on disposal of fixed
asset
(27,880 )
-
-
Other income 71,000 - - -
Profit before taxation 18,126,086 12,998,896 156,770 198,169
T
ax expense 9 (3,779,873 ) (3,303,379 ) (25,978) (27,722)
Profit for the year 14,346,213 9,695,517 130,792 170,447
OTHER COMPREHENSIVE INCOME
Other comprehensive income
Reserve arising on revaluation of
investments and amortised cost of
interest free long term loan
receivable
150,700
36,750
Other comprehensive income for the
year
150,700
36,750
Total Comprehensive income 14,599,489 9,830,899 281,492 207,197
Earnings per share 5.74 3.88 0.05 0.07
The notes on pages 14 to 42 are an integral part of these financial statements.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
11
STATEMENT OF FINANCIAL POSITION – 31
ST
DECEMBER 2024
Group Company
Notes 2024 2023 2024 2023
€ € € €
ASSETS
Non-current Assets
Property, plant and equipment 11 1 27,161 1 1
Investment in subsidiaries 12 - - 34,344,774 34,344,774
Investments 13 3,751,000 3,600,300 3,751,000 3,600,300
Other financial assets 14 9,842,989 10,286,219 7,176,000 7,721,806
Total Non-Current Assets 13,593,990 13,913,680 45,271,775 45,666,881
Current Assets
Inventory – Development project
16 49,771,608 62,197,149 - -
Trade and other receivables 17 11,973,135 11,184,898 39,388,784 47,399,568
Cash and cash equivalents 18 9,702,839 11,311,636 3,952,564 5,486,724
Current tax assets - - - -
Total Current Assets 71,447,582 84,693,683 43,341,348 52,886,292
Total Assets 85,041,572 98,607,363 88,613,123 98,553,173
EQUITY AND LIABILITIES
Capital and Reserves
Share capital 19 2,500,000 2,500,000 2,500,000 2,500,000
Subordinated shareholders’
loan – Quasi equity
21
2,500,000
2,500,000
Revaluation reserve 22 539,960 286,684 (96,978) (247,678)
Retained earnings 45,176,255 30,830,042 6,814,804 6,684,012
Total equity 50,716,215 36,116,726 11,717,826 11,436,334
Non-current liabilities
Bank loans
23 - 3,726,241 - -
Other financial liabilities 24 4,907 4,907 - -
Debt securities in issue 23 7,857,686 22,715,374 7,857,686 22,715,374
Total non-current liabilities 7,862,593 26,446,522 7,857,686 22,715,374
Current liabilities
Bank loans 23 5,320,020 1,879,395 - 1,879,395
Debt securities in issue 23 15,000,000 26,759,793 15,000,000 26,759,793
Trade and other payables 24 6,078,289 7,296,129 205,813 241,338
Other financial liabilities 24 - - 53,740,635 35,385,433
Current tax liability 64,455 108,798 91,163 135,506
Total Current liabilities 26,462,764 36,044,115 69,037,611 64,401,465
Total liabilities 34,325,357 62,490,637 76,895,297 87,116,839
Total equity and liabilities 85,041,572 98,607,363 88,613,123 98,553,173
The notes on pages 14 to 42 are integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board of Directors on 25 April 2025.
The financial statements were signed on behalf of the Board of Directors by Mr. Adrian Muscat (Director) and
Mr. Paul Attard (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in
conjunction with the Annual Financial Report.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
12
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31
ST
DECEMBER 2024
Notes
Share
Capital
Quasi
Equity
Revaluation
Reserve
Retained
Earnings
Total
€ € € € €
Group
Balance at 1
st
January
2023
Comprehensive income
Profit for the year - - - 9,695,517 9,695,517
Revaluation reserve 22 - - 135,382 - 135,382
Balance at 31
st
December 2023
Balance at 1
st
January
2024
Comprehensive income
Profit for the year - - - 14,346,213 14,346,213
Revaluation reserve 22 - - 253,276 - 253,276
Balance at 31
st
December 2024
Company
Balance at 1
st
January
2023
2,500,000
2,500,000
(284,428)
6,513,565
11,229,137
Comprehensive income
Profit for the year - - - 170,447 170,447
Revaluation reserve 22 - - 36,750 - 36,750
Balance at 31
st
December 2023
2,500,000
2,500,000
(247,678)
6,684,012
11,436,334
Balance at 1
st
January
2024
2,500,000
2,500,000
(247,678)
6,684,012
11,436,334
Comprehensive income
Profit for the year - - - 130,792 130,792
Revaluation reserve 22 - - 150,700 - 150,700
Balance at 31
st
December 2024
2,500,000
2,500,000
(96,978)
6,814,804
11,717,826
The notes on pages 14 to 42 are an integral part of these financial statements.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
13
STATEMENT OF CASH FLOW
FOR THE YEAR ENDED 31
ST
DECEMBER 2024
Group Company
2024 2023 2024 2023
Notes
€ € € €
Cash flows from operating activities
Net profit before taxation 18,126,086 12,998,896 156,770 198,169
Adjustments for:
Depreciation 11 - 18,821 - -
Finance income 8 (448,252 ) (599,107 ) (2,565,516) (3,760,730)
Finance costs 7 66,715 348,848 2,183,979 3,263,913
Loss on disposal of assets 27,880 - - -
Fair value gain on interest-free long term
receivable
150,700
36,750
Other income (71,000 ) - - -
Operating profit / (loss) before working
capital changes
(74,067)
(261,898)
Trade and other receivables 17 (374,562 ) 468,214 (111,796) (279,022)
Inventory – Development Project 16 12,425,541
(13,049,792 ) - -
Trade and other payables 24 (1,217,841 ) (110,719 ) (35,526) (8,729)
Cash generated from / (used in)
operations
(221,389)
(549,649)
Finance costs 7 (66,715 ) (348,848 ) (2,183,979) (3,263,913)
Income tax paid (3,824,215 ) (3,180,083 ) (70,321) 95,574
Other income 71,000 - - -
Net cash from/ (used in) operating
activities
(3,318,388 )
(2,475,689)
(3,717,988)
Cash flows from investing activities
Purchase of fixed assets 11 (720 ) (2,489 ) - -
Investments (net) 13 (150,700 ) 4,463,250 (150,700) 4,463,250
Finance income 8 448,252 599,107 2,565,516 3,760,730
Net cash from investing activities 296,832 5,059,868 2,414,816 8,223,980
Cash flows from financing activities
Parent Company 17 - (9,803,007 ) - (6,061,216)
Related parties 25 (413,675 ) 5,377,688 26,477,783 1,506,660
Bank loans (net) 23 (285,616 ) 1,895,270 (1,879,395) (1,830,971)
Bonds and debentures 23 (26,617,481 ) (23,110,680 ) (26,617,481) (23,110,680)
Other financial assets 14 443,230 696,426 545,806 795,058
Net cash (used in) financing activities
(26,873,542 )
(24,944,303 )
(1,473,287)
(28,701,149)
Movement in cash and cash equivalents (1,608,797 ) (23,202,823 ) (1,534,160) (24,195,157)
Cash and cash equivalents at beginning
of the year
5,486,724
29,681,881
Cash and cash equivalents at end of the
year
Note 18
3,952,564
5,486,724
The notes on pages 14 to 42 are an integral part of these financial statements.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
14
NOTES TO THE FINANCIAL STATEMENTS – 31
ST
DECEMBER 2024
1 Summary of material accounting policies
The material accounting policies adopted in the preparation of these financial statements are set out
below. These policies have been consistently applied to all periods presented, unless otherwise stated.
1.1 Basis of preparation
These financial statements have been prepared in accordance with the requirements of International
Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and with the requirements
of the Maltese Companies Act, 1995. The financial statements are prepared under the historical cost
convention, except as disclosed in the accounting policies below.
The financial statements have been prepared on a going concern basis, which assumes that the
Company will continue in operational existence for the foreseeable future. The Directors have, at the
time of approving the financial statements, a reasonable expectation that the Company has adequate
resources to continue in operation for at least twelve months from the end of the reporting period.
Accordingly, the financial statements do not include any adjustments that would result if the Company
were unable to continue as a going concern.
Critical accounting estimates and judgements
The preparation of financial statements in conformity with IFRSs as adopted by the EU requires the use of
certain accounting estimates. It also requires directors to exercise their judgements in the process of
applying the Group’s accounting policies. Estimates and judgements 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, the accounting estimates and judgements made in the course of preparing
these financial statements are not difficult, subjective or complex to a degree which would warrant their
description as critical in terms of the requirements of IAS 1.
Standards, interpretations and amendments to published standards effective in 2024
The Group adopted new standards, amendments and interpretations to existing standards that are
mandatory for the Group’s accounting period beginning on 1st January 2024. The adoption of these
revisions to the requirements of IFRSs as adopted by the EU did not result in substantial changes to the
Group’s accounting policies.
Standards, amendments and interpretations to existing standards that are not yet effective and have
not been adopted early by the Group
At the date of authorisation of these financial statements, certain new standards, and amendments to
existing standards have been published by the IASB that are not yet effective, and have not been adopted
early by the Group.
Management anticipates that all relevant pronouncements will be adopted in the Group’s accounting
policies for the first period beginning after the effective date of the pronouncement. The Group does not
expect that new standards, interpretations and amendments will have a material impact on the Group’s
financial statements.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
15
NOTES TO THE FINANCIAL STATEMENTS – 31
ST
DECEMBER 2024
1 Summary of material accounting policies
– continued
1.2 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources
and assessing performance of the operating segments has been identified as the board of directors,
responsible for making strategic decisions. The board of directors considers the Company to be made up
of one segment, that is raising financial resources from capital markets to finance the capital projects of
the Company. All the Company’s revenue and expenses are generated in Malta and revenue is mainly
earned from the development of immovable property.
1.3 Foreign currency translation
(a) Functional and presentation currency
Items included in these Financial Statements are measured using the currency of the primary economic
environment in which the entity operates (the functional currency). These Financial Statements are
presented in Euro, which is the company’s functional currency and presentation currency.
(b) Transactions and Balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the statement of comprehensive income. Translation
differences on non-monetary items, such as equities, are reported as part of the fair value gain or loss.
1.4 Financial Instruments
1.4.1 Financial Instruments Classification
The Group classifies its financial assets as measured at amortised cost, as designated at fair value through
other comprehensive income (FVOCI) and as designated at fair value through profit or loss (FVTPL). The
classification is based on the business model in which a financial asset is managed and its contractual cash
flows.
The group classified its financial liabilities at initial recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings, payables (both measured at amortised cost) or as
derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs. The Company’s financial liabilities include debt
securities in issue
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
16
NOTES TO THE FINANCIAL STATEMENTS – 31
ST
DECEMBER 2024
1 Summary of material accounting policies – continued
1.4 Financial instruments (continued)
1.4.2 Recognition and measurement
A financial asset is measured at amortised cost if it meets both of the following conditions and is not
designated at FVTPL:
i. the asset is held within a business model whose objective is to hold assets to collect
contractual cash flows; and
ii. the contractual terms of the financial asset give rise on specified dates to cash flows that are
Solely Payments of Principle and Interest (“SPPI”).
A debt instrument is measured at FVOCI only if it meets both of the following conditions and is not
designated as FVTPL:
i. the asset is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets; and
ii. the contractual terms of the financial asset give rise on specified dates to cash flows that are
SPPI.
On initial recognition of an equity investment that is not held-for-trading, the Group may irrevocably elect
to present subsequent changes in fair value in OCI. This election is made on an investment-by-investment
basis.
All other financial assets are classified as measured at FVTPL.
In addition, on initial recognition, the Group may irrevocably designate a financial asset that otherwise
meets the requirements to be measured at amortised cost or at FVOCI at FVTPL if doing so eliminates or
significantly reduces an accounting mismatch that would otherwise arise.
After initial recognition, financial liabilities are subsequently measured at amortised cost using the
effective interest (‘EIR’) method. Gains and losses are recognised in profit or loss when the liabilities
are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by
taking into account any discount or premium on acquisition and fees or costs that are an integral part
of the EIR. The EIR amortisation is included as interest expense in the statement of profit or loss
1.4.3 Derecognition
The Company derecognises a financial asset when:
• The contractual right to the cash flows from the financial asset expire ; or
• It transfers the rights to receive the contractual cash flows in a transaction which either:
- Substantially all of the risks and rewards of ownership of the financial assets are transferred; or
- The Company neither transfers nor retains substantially all of the risks and rewards of ownership
and it does not retain control of the financial asset.
The company enters into transactions whereby it transfers assets recognised in its statement of financial
position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these
cases, the transferred assets are not derecognised.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
17
NOTES TO THE FINANCIAL STATEMENTS – 31
ST
DECEMBER 2024
1 Summary of material accounting policies – continued
1.4 Financial instrments - continued
1.4.3 Derecognition
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled,
or expired. The Company also derecognises a financial liability when its terms are modified and the cash
flows of the modified liability are substantially different, in which case a new financial liability based on the
modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the
consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit
or loss.
1.4.4 Impairment
The Group assesses on a forward-looking basis the expected credit losses (ECL) associated with its debt
instruments carried at amortised cost. The impairment methodology applied depends on whether there
has been a significant increase in credit risk. The company’s financial assets are subject to the expected
credit loss model.
Expected credit loss model
The company measures loss allowances at an amount equal to lifetime ECLs, except for the following, which
are measured at 12-month ECLs:
i. debt securities that are determined to have low credit risk at the reporting date; and
ii. other debt securities and bank balances for which credit risk has not increased significantly
since initial recognition.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECLs, the Group considers reasonable and supportable information that
is relevant and available without undue cost or effort. The Group assumes that the credit risk on a financial
asset has increased significantly if it is more than 30 days past due date and it considers a financial asset to
be in default when the borrower is unlikely to pay its credit obligations to the Group in full, without
recourse by the Group to actions such as realising security (if any is held) or the financial asset is more than
90 days past due date.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial
instrument: 12-month ECLs are the portion of ECLs that result from default events that are possible within
the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less
than 12 months). The maximum period considered when estimating ECLs is the maximum contractual
period over which the Group is exposed to credit risk.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
18
NOTES TO THE FINANCIAL STATEMENTS – 31
ST
DECEMBER 2024
1 Summary of material accounting policies – continued
1.4 Financial assets - continued
1.4.4 Impairment – continued
ECLs are probability-weighted estimate of credit losses. Credit losses are measured as the present value of
all cash shortfalls. ECLs are discounted at the effective interest rate of the financial asset.
At each reporting date, the company assesses whether financial assets carried at amortised cost are credit-
impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on
the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is
credit-impaired includes observable data such as significant financial difficult of the borrower or issuer or
a breach of contract such as default or being more than 90 days past due date.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying
amount of the assets.
Simplified approach model
For loans and trade and other receivables, the Group applies the simplified approach required by IFRS 9,
which required expected lifetime losses to be recognised from initial recognition of the receivables.
The expected loss rates are based on the payment profiles of sales over a period of 12 months before 31
December 2024 or 1 January 2024 respectively and the corresponding historical credit losses experienced
within this period. The historical loss rates are adjusted to reflect current and forward-looking information
on macroeconomic factors affecting the liability of the customers to settle the receivable. Receivables are
written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable
expectation of recovery include, among others, the probability of insolvency or significant financial
difficulties of the debtor. Impaired debts are derecognised when they are assessed as uncollectible.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
19
NOTES TO THE FINANCIAL STATEMENTS – 31
ST
DECEMBER 2024
1 Summary of material accounting policies – continued
1.5 Consolidation
Subsidiary undertakings, which are those companies in which the Group, directly or indirectly, has an
interest of more than one half of the voting rights or otherwise has power to govern the financial and
operating policies have been consolidated. Subsidiaries are consolidated from the date on which effective
control is transferred to the Group and are no longer consolidated from the date of disposal. Inter-
company transactions, balances and unrealised gains on transactions between group companies are
eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies adopted by the Group. The Group financial
statements include the financial statements of the parent Company and all its subsidiaries.
The Company acquired the shares in its subsidiaries during the period ended 31st December 2016 and the
period ended 31st December 2019. The subsidiaries acquired during the years 2016 and 2019 were
acquired at the net asset value of the subsidiaries existing and adjusted with the increase in the value of
the immovable property arising from a revaluation of the immovable property at market value. The
Company incorporated two subsidiaries in the Group in 2021 and 2022.
In the Company's financial statements investments in subsidiaries are accounted for on the basis of the
direct equity interest and are stated at cost less any accumulated impairment losses. Dividends from
investments are recognised in the profit or loss.
The Group accounts for business combinations using the acquisition method when control is transferred
to the Group. The consideration transferred in the acquisition is measured at fair value as are the
identifiable net assets acquired.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
20
NOTES TO THE FINANCIAL STATEMENTS – 31
ST
DECEMBER 2024
1 Summary of material accounting policies – continued
1.6 Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares
are shown in equity as a deduction, net of tax, from the proceeds.
1.7 Offsetting financial instruments
Financial assets and liabilities are offset, and the net amount is reported in the statement of financial
position when there is a legally enforceable right to set off the recognised amounts and there is an intention
to settle on a net basis, or realise the asset and settle the liability simultaneously.
1.8 Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of
past events, it is possible that an outflow of resources embodying economic benefits will be required to
settle the obligation, and a reliable estimate of the amount of the obligation can be made.
1.9 Revenue and cost recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and
services in the ordinary course of the Company’s activities. Revenue is shown net of value added tax,
returns, rebates and discounts. The Company recognises revenue when the amount of revenue can be
reliably measured, it is probable that future economic benefits will flow to the entity and when the specific
criteria have been met as described below.
Sales of property are recognised when the significant risks and rewards of ownership of the property being
sold effectively transferred to the buyer. This is generally considered to occur at the later of the contract
of sale and the date when all the Company’s obligations relating to the property are completed and the
possession of the property can be transferred in the manner stipulated by the contract of sale. Amounts
received in respect of sales that have not yet been recognised in the financial statements, due to the fact
that the significant risks and rewards of ownership still rest with the company, are treated as payments
received on account and presented within trade and other payable.
Other operating income consisting of the following is recognised on an accruals basis:
Interest
Dividends receivable are accounted for on a cash basis
Costs are recognised when the related goods and services are sold, consumed or allocated, or when their
future useful lives cannot be determined.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
21
NOTES TO THE FINANCIAL STATEMENTS – 31
ST
DECEMBER 2024
1 Summary of material accounting policies – continued
1.10 Borrowing costs
Borrowing costs directly attributable to the acquisition and construction of property are capitalised as part
of the cost of the project and are included in its carrying amount. Capitalisation of borrowing costs ceases
when substantially all the activities necessary to prepare any distinct part of the project for its sale or
intended use is completed. Borrowing costs which are incurred for the purpose of acquiring or constructing
qualifying property, plant and equipment or investment property are capitalized as part of its cost.
Borrowing costs are capitalized which acquisition or construction is actively underway and cease once the
asset is substantially complete, or suspended if the development of the asset is suspended. All other
borrowing costs are recognized as an expense in the profit and loss account in the period as incurred.
1.11 Trade and other payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course
of business from suppliers. Accounts payable are classified as current liabilities if payment is due within
one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as
non-current liabilities.
Trade and other payables are recognised initially at fair value and subsequently measured at amortised
cost using the effective interest method.
1.12 Other financial liabilities
Other financial liabilities are recognized initially at fair value of proceeds received, net of transaction costs
incurred. Other financial liabilities are subsequently measured at amortised cost using the effective interest
method unless the effect of discounting is immaterial. Any difference between the proceeds, net of
transaction costs, and the settlement or redemption of other borrowings is recognised in profit or loss over
the term of the borrowings, unless the interest on such borrowings is capitalised in accordance with the
company’s accounting policy on borrowing costs.
Repurchases of Bonds issued by the company - If the company repurchases a part of a financial liability, the
company allocates the previous carrying amount of the financial liability between the part that continues
to be recognised and the part that is derecognised based on the relative fair values of those parts on the
date of the repurchase. The difference between the carrying amount allocated to the part derecognised
and the consideration paid, including any non-cash assets transferred or liabilities assumed, for the part
derecognised shall be recognised in profit or loss.
1.13 Property, plant and equipment
All property, plant and equipment are initially recorded at cost and subsequently stated at cost less
depreciation.
Cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are
included in the asset’s carrying amount when it is probable that future economic benefits associated with
the item will flow to the company and the cost of the item can be measured reliably. Expenditure on repairs
and maintenance of property, plant and equipment is recognised as an expense when incurred.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
22
NOTES TO THE FINANCIAL STATEMENTS – 31
ST
DECEMBER 2024
1 Summary of material accounting policies – continued
1.13 Property, plant and equipment – continued
Property, plant and equipment are stated at cost or valuation less accumulated depreciation. Depreciation
is provided for on the straight-line method in order to write off cost over the expected useful economic
lives of the assets as follows:
| Years | |
| Tools | 4 |
| Computer & Office Equip. | 4 |
| Motor Vehicles | 5 |
| Furniture & Fittings | 10 |
The assets' residual values and useful lives are reviewed and adjusted if appropriate, at each statement of
financial position date.
Gains and losses on disposal of property, plant and equipment are determined by comparing proceeds with
the carrying amount, and are taken into account in determining operating profit.
An asset's carrying amount is written down immediately to its recoverable amount if its carrying amount
is greater than its estimated recoverable amount.
1.14 Inventory - Development project
The main object of the Company is the development of land acquired for development and resale. This
development is intended in the main for resale purposes, and is accordingly classified in the financial
statements as Inventory. Any elements of a project which are identified for business operation or long-
term investment properties are transferred at their carrying amount to Property, plant and equipment or
investment properties when such identification is made and the cost thereof can reliably be segregated.
The development is carried at the lower of cost and net realisable value. Cost comprises the purchase cost
of acquiring the land together with other costs incurred during its subsequent development, including:
(i) The cost incurred on development works, including demolition, site clearance, excavation,
construction, etc., together with the costs of ancillary activities such as site security.
(ii) The cost of various design and other studies conducted in connection with the project,
together with all other expenses incurred in connection therewith.
(iii) Any borrowing costs, including imputed interest, attributable to the development phases of
the project.
The purchase cost of acquiring the land represents the cash equivalent of the contracted price. This was
determined at date of purchase by discounting to present value the future cash outflows comprising the
purchase consideration.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
23
NOTES TO THE FINANCIAL STATEMENTS – 31
ST
DECEMBER 2024
1 Summary of material accounting policies – continued
1.14 Inventory - Development project - continued
Net realisable value is the estimated selling price in the ordinary course of business, less the costs of
completion and selling expenses.
As stated in note 1.5 the Group accounts for business combinations using the acquisition method.
Accordingly, at group level, the identifiable net assets acquired, including inventory held by the newly-
acquired subsidiary, are measured at fair value as at date of acquisition of subsidiary. Therefore, at
consolidated group level, inventory cost represents the fair value of inventory held by the acquired
subsidiary as at date of acquisition of subsidiary, together with additional development and borrowing
costs incurred following date of acquisition.
1.15 Cash and cash equivalents
Cash and cash equivalents as shown in the cashflow statement comprise cash in hand and deposits
repayable on demand less bank overdrafts. Bank overdrafts are included in the statement of financial
position as borrowings under current liabilities.
1.16 Current and deferred tax
The tax expense for the period 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.
Deferred tax is recognised, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred
tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred tax is not
accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by
the end of the reporting period and are expected to apply when the related deferred tax asset is realised
or the deferred tax liability is settled.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes
levied by the same taxation authority on either the same taxable entity or different taxable entities where
there is an intention to settle the balance on a net basis.
1.17 Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s financial
statements in the period in which the dividends are approved by the Company’s shareholders.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
24
NOTES TO THE FINANCIAL STATEMENTS – 31
ST
DECEMBER 2024
2 Financial risk management
2.1 Financial risk factors
The Group’s activities potentially expose it to a variety of risks: market risk, economic risk, counter-party
risk, credit risk and liquidity risk. Where possible, the board provides principles for overall risk
management, as well as policies to mitigate these risks in the most prudent way.
(i) The Group is subject to market and economic conditions generally
The Group is subject to the general market and economic risks that may have a significant impact on the
projects of the subsidiaries, the timely completion of the said projects and budgetary constraints. These
include factors such as the state of the local property market, inflation, and fluctuations in interest rates,
exchange rates, property prices and other economic and social factors affecting demand for real estate
generally. If general economic conditions and property market conditions experience a downturn which is
not contemplated in the Group’s planning during the construction and completion of the projects, this shall
have an adverse impact on the financial condition of the Group and the ability of the Company to meet its
obligations.
(ii) The property market is a very competitive market that can influence the sales of units in the Projects
The real estate market in Malta is very competitive in nature. An increase in supply and/or a reduction in
demand in the property segments in which the Group operates and targets to sell the remaining units in
stock and the properties being developed, may cause sales of units forming part of the projects to sell at
prices which are lower than is being anticipated by the Group or that sales of such units are in fact slower
than is being anticipated. If these risks were to materialise, particularly if due to unforeseen circumstances
there is a delay in the tempo of sales envisaged by the Group, they could have a material adverse impact
on the Group and the Issuer’s ability to meet its obligations.
(iii) The Group depends on third parties in connection with its business, giving rise to counterparty risks
The Group relies upon third-party service providers such as architects, building contractors and suppliers
for the construction and completion of each of the projects of its subsidiaries. The Group has engaged the
services of third party contractors for the development of the projects including, excavation, construction
and finishing of the developments in a timely manner and within agreed cost parameters. This gives rise to
counter-party risks in those instances where such third parties do not perform in line with the Group’s
expectations and in accordance with their contractual obligations. If these risks were to materialise, the
resulting development delays in completion could have an adverse impact on the Group’s businesses, and
their respective financial condition, results of operations and prospects, that could have a material adverse
impact on the Issuer’s ability to meet its obligations.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
25
NOTES TO THE FINANCIAL STATEMENTS – 31
ST
DECEMBER 2024
2 Financial risk management – continued
2.1 Financial risk factors – continued
(iv) Material risks relating to real estate development may affect the economic performance and value of
the Projects
There are several factors that commonly affect the real estate development industry, many of which are
beyond the Group’s control, and which could adversely affect the economic performance and value of the
Group’s projects. Such factors include:
- changes in European and global economic conditions;
- changes in the general economic conditions in Malta;
- general industry trends, including the cyclical nature of the real estate market;
- changes in local market conditions, such as an oversupply of similar properties;
- a reduction in demand for real estate or change of local preferences and tastes;
- possible structural and environmental problems;
- changes in the prices, supply of raw materials;
- acts of nature that may damage any of the properties or delay development thereof.
(v) The Group may be exposed to environmental liabilities attaching to real estate property
The Group may become liable for the costs of removal, investigation, or remediation of any hazardous or
toxic substances that may be located on, or in or which may have migrated from, a property owned or
occupied by it, which costs may be substantial. The Group may also be required to remove or remedy any
hazardous substances that it causes or knowingly permits at any property that it owns or may in future
own. Laws and regulations, which may be amended over time, may also impose liability for the presence
of certain materials or substances or the release of certain materials or substances into the air, land or
water or the migration of certain materials or substances from a real estate investment, including asbestos,
and such presence, release or migration could form the basis for liability to third parties for personal injury
or other damages. These environmental liabilities, if realised, could have an adverse effect on the Group’s
operations and financial position.
(vi) Property valuations may not reflect actual market values
The valuations of the properties on which the share acquisitions were based were prepared by an
independent qualified architect in accordance with the valuation standards published by the Royal
Institution of Chartered Surveyors (RICS). In providing a market value of the respective properties, the
independent architect has made certain assumptions which ultimately may cause the actual values to be
materially different from any future values that may be expressed or implied by such forward-looking
statements or anticipated on the basis of historical trends as reality may not match the assumptions. There
can be no assurance that such property valuations and property-related assets will reflect actual market
values.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
26
NOTES TO THE FINANCIAL STATEMENTS – 31
ST
DECEMBER 2024
2 Financial risk management – continued
2.1 Financial risk factors – continued
(vii) General exposure to funding risks
The funding of each project is partly dependent on the proceeds from the gradual sale of the units in each
development. If the projected sale of the units is not attained or is delayed, the Group may well not have
sufficient funds to complete all the projects within the projected time-frames or to pay the contractors for
works performed.
(viii) The Group may be exposed to cost overruns and delays in completion of the projects
Each of the projects being undertaken by the Group is prone to certain risks inherent in real estate
development, most notably the risk of completing each project within its scheduled completion date and
within the budgeted cost for that development. If either or both risks were to materialise they could have
a significant impact on the financial condition of the respective subsidiary and/or the Group, and the ability
of the latter to meet its obligations. The risks of delays and cost overruns, could cause actual sales revenues
and costs to differ from those projected and which are affected, amongst others, by factors attributable to
counter-parties, general market conditions, and competition which are beyond the Group’s control. Delays
in the time scheduled for completion of one or more of the projects may also cause significant delays in
the tempo of the sales forecasted by the Group for units within the Project or Projects affected by such
delay, which can have a significant adverse impact on the Group’s financial condition and cash flows.
Similarly, if any one or more of the projects were to incur significant cost overruns that were not
anticipated, the Group may have difficulties in sourcing the funding required for meeting such cost
overruns and therefore may risk not completing one or more of the projects, which shall have a material
adverse impact on the cash flows generated from sales of units in that Project and a material adverse
impact on the financial condition of the specific subsidiary and ultimately the Issuer. The directors are
closely monitoring closely inflationary risks resulting from the conflict in Ukraine and the Middle East.
(ix) Foreign Exchange risk
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities
which are denominated in a currency that is not the entity's functional currency. As at reporting date, the
Group has no currency risk since all assets and liabilities are denominated in Euro.
(x) Fair value interest rate risk
The Group is exposed to risks associated with the effects of fluctuations in the prevailing levels of the
market interest rates on its interest bearing financial instruments.
As at the reporting date, the Company holds available for sale investments which are limited to Corporate
bonds and bank deposits. The 4.75% Secured Bonds 2025 – 2027 and bank borrowings which represent
about 100% of the Group’s third-party borrowings are subject to fixed interest rates. Based on the above,
the board considers the potential impact on profit or loss of a defined interest rate shift at the reporting
date to be quite contained.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
27
NOTES TO THE FINANCIAL STATEMENTS – 31
ST
DECEMBER 2024
2 Financial risk management – continued
2.1 Financial risk factors – continued
(xi) Liquidity risk
The Group is exposed to liquidity risk in relation to meeting future obligations associated with its financial
liabilities, which comprise principally trade and other payables and borrowings. Prudent liquidity risk
management includes maintaining sufficient cash to ensure the availability of an adequate amount of
funding to meet the Company's financial obligations and to safeguard the Group’s ability to continue as a
going concern, in particular to complete of the Group’s projects in a timely manner.
In the next 12 months, the Group requires to raise further funding to finish its ongoing projects. The funding
should be available from own Reserves. In the absence of that, the Group will seek bank finance. There is
no certainty that the Group will be able to obtain the full capital it requires, and this may effect the ability
of the Group to deliver these two projects on time.
Notwithstanding these challenges, the company has ample experience in the industry and has always
managed to obtain the appropriate funding and completed projects within pre-determined time-frames.
Maturity analysis
The Group’s trade and other payables with the exception of specific liabilities (refer to Note 10) are entirely
repayable within one year from the end of the reporting period. The following table analyses the Group’s
borrowings, lease liabilities and deposits arising under operating leases classified as other payables into
relevant maturity groupings based on the remaining period from the end of the reporting period to the
contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
| CARRYING | |||||
| AMOUNT | |||||
| LESS THAN 1 | |||||
| YEAR | |||||
| BETWEEN 1 AND | |||||
| 2 YEARS | |||||
| BETWEEN 2 AND | |||||
| 5 YEARS | |||||
| TOTAL | |||||
| CONTRACTUAL | |||||
| CASH FLOWS | |||||
| € | € | € | € | € | |
| 31st December | |||||
| 2024 | |||||
| Bank loans | 5,320,000 | 5,439,700 | - | - | 5,439,700 |
| Debt securities | 22,857,686 | 16,092,500 | 8,190,000 | - | 24,282,500 |
| Other payables | 6,078,289 | 6,078,289 | - | - | 6,078,289 |
| CARRYING | |||||
| AMOUNT | |||||
| LESS THAN 1 | |||||
| YEAR | |||||
| BETWEEN 1 AND | |||||
| 2 YEARS | |||||
| BETWEEN 2 AND | |||||
| 5 YEARS | |||||
| TOTAL | |||||
| CONTRACTUAL | |||||
| CASH FLOWS | |||||
| € | € | € | € | € | |
| 31st December | |||||
| 2023 | |||||
| Bank loans | 5,605,636 | 2,157,490 | 3,810,081 | - | 5,967,571 |
| Debt securities | 49,475,169 | 28,731,096 | 23,807,876 | - | 52,538,972 |
| Other payables | 7,296,129 | 7,296,129 | - | - | 7,296,129 |
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
28
NOTES TO THE FINANCIAL STATEMENTS – 31
ST
DECEMBER 2024
2 Financial risk management – continued
2.1 Financial risk factors – continued
(xii) Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern; to maximise the return to stakeholders through the optimisation of the debt and equity balance
and to comply with the requirements of the Prospectus issued in relation to the 3.7% Secured Bonds 2023-
2025, the 3.9% Secured Bonds 2024 – 2026 and the 4.75% Secured Bonds 2025 – 2027.
The capital structure consists of items presented within equity in the statement of financial position. The
company monitors the level of debt against total capital on an ongoing basis.
(xiii) Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument leading
to a financial loss.
The Group is not significantly exposed to credit risk arising in the course of its principal activity relating to
the sale of residential units in view of the way promise of sale agreements are handled through receipt of
payments on account at established milestones up to delivery. The Group monitors the performance of
the purchases throughout the term of the related agreement in relation to meeting contractual obligations
and ensures that contract amounts are fully settled prior to delivery of the residential unit.
Credit risk mainly arises from financial assets held in the Reserve Account, cash and cash equivalents and
available for sale investments. Credit risk relating to financial assets is addressed through careful selection
of the issuers of securities bought by the Company. All such transactions have been carried out solely by
the Company’s stockbroker (and Sponsor/Manager of the 3.7% Secured Bonds 2023-2025 and the 3.9%
Secured Bonds 2024–2026 and the 4.75% Secured Bonds 2025-2027). During the year under review, the
available for sale investments were limited to purchases in reliable Corporate Bonds - €3.8 Million (2023 -
€8.1 Million) whilst the cash at Bank was held with local quality financial institutions - €11.9 Million (2023
- €29.7 Million). The Reserve Account is administered by the Security Trustee of the 4.75% Secured Bonds
2025 – 2027. Bonds issues and funds are held in a bank account of high standing.
Furthermore, the Group manages its credit risk exposure in relation to receivables from fellow companies
in an active manner, at arm’s length and with accrued interest charges thereon. The Board retains direct
responsibility for affecting and monitoring the investments made by the fellow companies. The Board
considers these receivables to be fully performing and recoverable.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
29
NOTES TO THE FINANCIAL STATEMENTS – 31
ST
DECEMBER 2024
3 Revenue
Revenue represents the sale of property held for development and resale, and is made up as follows:
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Sale of property held for Development and | ||||
| resale | ||||
| 48,181,299 | ||||
| 42,763,849 | ||||
| - | ||||
| - | ||||
| 48,181,299 | 42,763,849 | |||
| - | - |
4 Operating profit/(loss)
Operating profit/(loss) for the year is stated after charging:
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Directors’ fees (Note 6) | 167,288 | 184,525 | - | 18,000 |
| Employment costs (Note 5) | 162,655 | 824,522 | 38,000 | 100,000 |
| Depreciation (Note 11) | - | 18,821 | - | - |
| Audit fees – Annual statutory audit | 52,092 | 54,575 | 16,697 | 14,830 |
5 Employees
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Employment costs comprise: | ||||
| Wages and salaries - administration | 84,900 | 232,887 | 38,000 | 93,858 |
| Wages and salaries – allocated to cost of sales | 73,284 | 548,163 | - | - |
| Social security costs – administration | 2,821 | 12,516 | - | 6,142 |
| Social security costs – allocated to cost of sales | 1,650 | 30,956 | - | - |
| 162,655 | 824,522 | 38,000 | 100,000 | |
| The average weekly number of persons | ||||
| employed by the Group during the year was: | ||||
| 7 | ||||
| 21 | ||||
| - | ||||
| - |
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
30
NOTES TO THE FINANCIAL STATEMENTS – 31
ST
DECEMBER 2024
6 Directors’ emoluments
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Directors’ salary – allocated to cost of sales | 149,288 | 166,525 | - | - |
| Directors’ Remuneration | 18,000 | 18,000 | 18,000 | 18,000 |
| 167,288 | 184,525 | 18,000 | 18,000 |
7 Finance costs
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Interest and amortisation costs | 66,715 | 348,848 | 2,183,979 | 3,263,913 |
| 66,715 | 348,848 | 2,183,979 | 3,263,913 | |
| Finance costs allocated to cost of sales (Inventories | ||||
– | ||||
| Property development) | ||||
| At 1 | ||||
| st | ||||
| January | 2,733,260 | 2,674,066 | - | - |
| Interest capitalised during the year | 2,324,123 | 3,436,709 | - | - |
| At 31 | ||||
| st | ||||
| December | (3,424,081) | (2,733,260) | - | - |
| Charge of capitalised interest for the year | 1,633,302 | 3,377,515 | - | - |
8 Finance income
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Interest receivable from related parties | 192,000 | 200,838 | 192,000 | 200,838 |
| Interest receivable from group companies | - | - | 2,117,264 | 3,161,623 |
| Interest receivable from investments | 256,252 | 398,269 | 256,252 | 398,269 |
| 448,252 | 599,107 | 2,565,516 | 3,760,730 |
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
31
NOTES TO THE FINANCIAL STATEMENTS - 31st DECEMBER 2024
9 Tax expense
The parent Company and Group’s income tax charge for the year has been arrived at as follows:
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Current income tax | ||||
| Income tax on taxable income at 15% | 32,168 | 21,668 | 21,668 | 21,668 |
| Income tax subject to final tax of 5% and 8% on | ||||
| sales of immovable property | ||||
| 3,743,395 | ||||
| 3,275,657 | ||||
| - | ||||
| - | ||||
| Income tax subject to 35% | 4,310 | 6,054 | 4,310 | 6,054 |
| Tax charge | 3,779,873 | 3,303,379 | 25,978 | 27,722 |
The accounting profits and the tax charge for the year are reconciled as shown hereunder:
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Net profit for the year | 18,126,086 | 12,998,896 | 156,770 | 198,169 |
| Income tax thereon at 35% | 6,344,130 | 4,549,614 | 54,870 | 69,359 |
| Deferred tax not accounted for | 7,390 | (7,278) | - | - |
| Difference arising from interest received | (42,892) | (28,891) | (28,892) | (28,891) |
| Expenses disallowed for tax purposes | 275,852 | 324,156 | - | - |
| Difference arising on income subject to 5-8% | ||||
| withholding tax on sales of immovable | ||||
| property | ||||
| (2,804,607) | ||||
| (1,664,199) | ||||
| - | ||||
| - | ||||
| Difference arising on adjustment to | ||||
| revaluation of inventories | ||||
| - | ||||
| 142,723 | ||||
| - | ||||
| - | ||||
| Exempt income | - | (12,746) | - | (12,746) |
| 3,779,873 | 3,303,379 | 25,978 | 27,722 |
10 Fair value adjustment
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Difference arising on amortised cost on | ||||
| interest free loan given to Gap Holdings | ||||
| Limited (Note 14) | ||||
| Amount as at 31 | ||||
| st | ||||
| December | 2,666,989 | 2,564,413 | - | - |
| Amount as at 1 | ||||
| st | ||||
| January | (2,564,413) | (2,465,781) | - | - |
| 102,576 | 98,632 | - | - |
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
32
NOTES TO THE FINANCIAL STATEMENTS - 31st DECEMBER 2024
11 Property, plant and equipment
| Group | |||||
| Tools | |||||
| Computer & | |||||
| Office | |||||
| Equipment | |||||
| Motor | |||||
| Vehicles | |||||
| Furniture & | |||||
| Fittings | |||||
| Total | |||||
| € | € | € | € | € | |
| Cost | |||||
| At 1 | |||||
| st | |||||
| January 2024 | 4,098 | 38,012 | 67,208 | 1,283 | 110,601 |
| Additions during the year | - | 720 | - | - | 720 |
| Disposals | (4,098) | (38,732) | (57,208) | (1,283) | (101,321) |
| At 31 | |||||
| st | |||||
| December 2024 | - | - | 10,000 | - | 10,000 |
| Depreciation | |||||
| At 1 | |||||
| st | |||||
| January 2024 | 3,046 | 16,549 | 63,333 | 512 | 83,440 |
| Charge for the year | - | - | - | - | - |
| Released – disposal | (3,046) | (16,549) | (53,334) | (512) | (73,441) |
| At 31 | |||||
| st | |||||
| December 2024 | - | - | (9,999) | - | 9,999 |
| Net book value | |||||
| At 31 | |||||
| st | |||||
| December 2024 | - | - | 1 | - | 1 |
| At 31 | |||||
| st | |||||
| December 2023 | 1,052 | 21,463 | 3,875 | 771 | 27,161 |
| Company | ||
| Motor | ||
| Vehicles | ||
| Total | ||
| € | € | |
| Cost | ||
| At 1 | ||
| st | ||
| January 2024 | 10,000 | 10,000 |
| Additions during the year | - | - |
| At 31 | ||
| st | ||
| December 2024 | 10,000 | 10,000 |
| Depreciation | ||
| At 1 | ||
| st | ||
| January 2024 | 9,999 | 9,999 |
| Charge for the year | - | - |
| At 31 | ||
| st | ||
| December 2024 | 9,999 | 9,999 |
| Net book value | ||
| At 31 | ||
| st | ||
| December 2024 | 1 | 1 |
| At 31 | ||
| st | ||
| December 2023 | 1 | 1 |
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
33
NOTES TO THE FINANCIAL STATEMENTS - 31st DECEMBER 2024
12 Investments in subsidiary undertakings
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Shares in subsidiary undertakings | ||||
| Geom Developments Limited (C50805) - 2,000 ordinary | ||||
| shares of €1 each representing 100 % holding (PLAN | ||||
| Group Head Office, Triq il-Wirt Naturali, Bahar ic-Caghaq, | ||||
| Naxxar. ) | ||||
| - | ||||
| - | ||||
| 10,580,444 | ||||
| 10,580,444 | ||||
| Geom Holdings Limited (C64409) - 1,997 ordinary shares | ||||
| of €1 each representing 100 % holding (PLAN Group Head | ||||
| Office, Triq il-Wirt Naturali, Bahar ic-Caghaq, Naxxar. ) | ||||
| - | ||||
| - | ||||
| 2,651,130 | ||||
| 2,651,130 | ||||
| Gap Gharghur Limited (C72015) - 320,000 ordinary | ||||
| shares of €1 each representing 100 % holding (PLAN | ||||
| Group Head Office, Triq il-Wirt Naturali, Bahar ic-Caghaq, | ||||
| Naxxar. ) | ||||
| - | ||||
| - | ||||
| 3,838,626 | ||||
| 3,838,626 | ||||
| Gap Mellieha (I) Limited (C72013) - 1,200 ordinary shares | ||||
| of €1 each representing 100 % holding (PLAN Group Head | ||||
| Office, Triq il-Wirt Naturali, Bahar ic-Caghaq, Naxxar. ) | ||||
| - | ||||
| - | ||||
| 4,487,174 | ||||
| 4,487,174 | ||||
| Gap Group Contracting Limited (C75879) - 1,200 ordinary | ||||
| shares of €1 each representing 100 % holding (PLAN | ||||
| Group Head Office, Triq il-Wirt Naturali, Bahar ic-Caghaq, | ||||
| Naxxar. ) | ||||
| - | ||||
| - | ||||
| 1,200 | ||||
| 1,200 | ||||
| Gap Luqa Limited (C32225) - 600 ordinary shares of €2.33 | ||||
| each representing 100 % holding (PLAN Group Head | ||||
| Office, Triq il-Wirt Naturali, Bahar ic-Caghaq, Naxxar. ) | ||||
| - | ||||
| - | ||||
| 12,775,000 | ||||
| 12,775,000 | ||||
| Gap QM Limited (C96686) - 5,000 ordinary shares of €1 | ||||
| each representing 100 % holding (PLAN Group Head | ||||
| Office, Triq il-Wirt Naturali, Bahar ic-Caghaq, Naxxar. ) | ||||
| - | ||||
| - | ||||
| 5,000 | ||||
| 5,000 | ||||
| Gap Qawra Limited(C100513) - 5,000 ordinary shares of | ||||
| €1 each representing 100 % holding (PLAN Group Head | ||||
| Office, Triq il-Wirt Naturali, Bahar ic-Caghaq, Naxxar. ) | ||||
| - | ||||
| - | ||||
| 5,000 | ||||
| 5,000 | ||||
| Gap Zonqor Limited (C103533) – 1,200 ordinary shares of | ||||
| €1 each representing 100% holding (PLAN Group Head | ||||
| Office, Triq il-Wirt Naturali, Bahar ic-Caghaq, Naxxar. ) | ||||
| - | ||||
| - | ||||
| 1,200 | ||||
| 1,200 | ||||
| Total | - | - | 34,344,774 | 34,344,774 |
Geom Developments Limited (C50805) is the parent company of Gap Group Finance Limited (C54352) which is
the parent company of Manikata Holdings Limited (C53818) and Gap Properties Limited (C47928). The Group
owns all the shares with the exception of a few shares which are owned by third parties. The amount attributable
to the minority interest is reflected in note 24.
The principal activity of all the subsidiaries, except for Gap Group Contracting Limited, is the acquisition of
property for development and resale. The activity of Gap Group Contracting Limited is to provide services to the
entities within the Group related to their trading activity.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
34
NOTES TO THE FINANCIAL STATEMENTS - 31st DECEMBER 2024
13 Investments
| Investments - FVOCI | ||||
| Interest rate | Redemption | |||
| date | ||||
| Group | Company | |||
| 2024 | ||||
| € | € | |||
| Corporate Bonds | 3.25% | 2026 | 250,000 | 250,000 |
| Corporate Bonds | 3.85% | 2028 | 686,000 | 686,000 |
| Corporate Bonds | 3.65-3.80% | 2029 | 2,815,000 | 2,815,000 |
| 3,751,000 | 3,751,000 |
| Investments - FVOCI | ||||
| Interest rate | Redemption | |||
| date | ||||
| Group | Company | |||
| 2023 | ||||
| € | € | |||
| Corporate Bonds | 3.25-3.75% | 2026 | 248,300 | 248,300 |
| Corporate Bonds | 3.85% | 2028 | 637,000 | 637,000 |
| Corporate Bonds | 3.65-3.80% | 2029 | 2,715,000 | 2,715,000 |
| 3,600,300 | 3,600,300 |
14 Other financial assets
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Amount receivable from Gap Holdings Limited - | ||||
| Maturity date 2027 | ||||
| 2,666,989 | ||||
| 2,564,413 | ||||
| - | ||||
| - | ||||
| Amount receivable from Gap Holdings Limited - | ||||
| Maturity date 2027 | ||||
| 4,992,000 | ||||
| 5,221,806 | ||||
| 4,992,000 | ||||
| 5,221,806 | ||||
| Amount receivable from third party | ||||
| 2,184,000 | ||||
| 2,500,000 | ||||
| 2,184,000 | ||||
| 2,500,000 | ||||
| 9,842,989 | 10,286,219 | 7,176,000 | 7,721,806 |
At 31st December 2024, the amount due by Gap Holdings Limited of €2,666,989 (2023 - €2,564,413) is non-
interest bearing and is expected to be repaid by December 2027 (2023 - December 2026). The nominal amount
of the loan is €3,000,000.
The amount due by Gap Holdings Limited of €4,992,000 (2023 - €5,221,806) is expected to be repaid by
December 2027 and is unsecured. The amount receivable bears interest at 4.0% per annum (2023 – 4.0% per
annum).
The amount receivable from third party matures on 31 March 2027 and bears interest at 5% per annum.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
35
NOTES TO THE FINANCIAL STATEMENTS - 31st DECEMBER 2024
15 Reserve Account
| The Reserve fund is made up as follows: | ||
| 2024 | 2023 | |
| € | € | |
| Amount held by the trustee as part of the Investments listed under | ||
| Investments (See Note 13) held for the redemption of the 2023 and 2024 | ||
| Bond | ||
| - | ||
| 3,600,300 | ||
| Amount held by the trustee for redemption of the bonds (See Note 18) | 50,000 | 5,130,508 |
| Amount advanced to the issuer | - | 2,316,000 |
| 50,000 | 11,046,808 |
16 Inventory – Development project
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Property cost of land and development costs | 46,347,527 | 59,463,889 | - | - |
| Capitalised borrowing costs (See Note 7) | 3,424,081 | 2,733,260 | - | - |
| 49,771,608 | 62,197,149 | - | - |
17 Trade and other receivables
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Amounts receivable | 354,595 | 91,830 | - | - |
| Amounts due from Parent Company | 9,803,007 | 9,803,007 | 6,061,216 | 6,061,216 |
| Amounts due from group companies | - | - | 32,181,332 | 40,303,913 |
| Amounts due from related parties | 1,357,987 | 944,312 | 688,690 | 688,690 |
| Accrued interest receivable | 457,546 | 345,749 | 457,546 | 345,749 |
| 11,973,135 | 11,184,898 | 39,388,784 | 47,399,568 |
The amounts due from parent company, group companies and related parties are interest free and repayable
on demand.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
36
NOTES TO THE FINANCIAL STATEMENTS – 31
st
DECEMBER 2024
18 Cash and cash equivalents
Cash and cash equivalents included in the cash flow statement comprise:
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Cash in hand | ||||
| 322,187 | 146,910 | - | - | |
| Bank deposits | ||||
| 9,380,652 | 11,164,726 | 3,952,564 | 5,486,724 | |
| 9,702,839 | 11,311,636 | 3,952,564 | 5,486,724 | |
| 9,702,839 | 11,311,636 | 3,952,564 | 5,486,724 |
19 Share capital
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Authorised | ||||
| 2,500,000 Ordinary shares of €1 each | ||||
| 2,500,000 | 2,500,000 | 2,500,000 | 2,500,000 | |
| 2,500,000 | 2,500,000 | 2,500,000 | 2,500,000 | |
| Issued and fully paid up | ||||
| 2,500,000 Ordinary shares of €1 each | ||||
| 2,500,000 | 2,500,000 | 2,500,000 | 2,500,000 | |
| 2,500,000 | 2,500,000 | 2,500,000 | 2,500,000 |
20 Earnings per share
Earnings per share is calculated by dividing the result attributable to owners of the Company by the weighted
average number of ordinary shares in issue during the year.
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Profit for the year | ||||
| 14,346,213 | 9,695,517 | 130,792 | 170,447 | |
| Weighted average share in issue | ||||
| 2,500,000 | 2,500,000 | 2,500,000 | 2,500,000 | |
| Earnings per share | ||||
| 5.74 | 3.88 | 0.05 | 0.07 |
The company has not issued any dilutive instruments in the past, and therefore the basic and diluted earnings
per share are equal.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
37
NOTES TO THE FINANCIAL STATEMENTS - 31st DECEMBER 2024
21 Subordinated shareholders’ loan – Quasi equity
| Group & Company | ||
| 2024 | 2023 | |
| € | € | |
| Shareholders’ loan | 2,500,000 | 2,500,000 |
| 2,500,000 | 2,500,000 |
The shareholders’ loan, classified as “Subordinated shareholders’ loan-Quasi equity” was advanced to the company
by the shareholders in connection with the raising of funds through the first bond issue (see note 23). The amount is
interest free and is only repayable to the shareholders after the settlement of the amount due to the Bond holders.
22 Revaluation reserve
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Gain on amortisation of long term interest free loan | ||||
| receivable | ||||
| 636,938 | ||||
| 534,362 | ||||
| - | ||||
| - | ||||
| (Loss) on revaluation of investments at year end | ||||
| rates | ||||
| (96,978) | ||||
| (247,678) | ||||
| (96,978) | ||||
| (247,678) | ||||
| 539,960 | 286,684 | (96,978) | (274,678) |
23 Borrowings
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Short term – falling due within one year | ||||
| Bank loans | 5,320,020 | 1,879,395 | - | 1,879,395 |
| Total short term borrowings | 5,320,020 | 1,879,395 | - | 1,879,395 |
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Long term – falling due after one year | ||||
| Bank loans | - | 3,726,241 | - | - |
The parent company has a bank loan facility of NIL (2023 - €1,879,395) which bore interest at 5.2%.
Gap Mellieha (I) Limited has a bank loan of €5,320,020 (2023 - €3,726,241) which bears interest at 4.5% per annum.
The loan is repayable by the year 2025 from sales proceeds of immovable property.
The facilities were secured by a general and special hypothecs on the immovable properties of the relative subsidiaries.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
38
NOTES TO THE FINANCIAL STATEMENTS - 31st DECEMBER 2024
23 Borrowings – continued
Debt securities in issue
The bonds are measured at the amount of net proceeds adjusted for the amortisation of the difference between the net proceeds
and the redemption value of such bonds, using effective yield method as follows:
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Face value | ||||
| 3.7% Secured Bonds 2023-2025 | ||||
| - | 5,899,500 | - | 5,899,500 | |
| 3.9% Secured Bonds 2024-2026 | ||||
| - | 21,000,000 | - | 21,000,000 | |
| 4.75% Secured Bonds 2025-2027 | ||||
| 23,000,000 | 23,000,000 | 23,000,000 | 23,000,000 | |
| 23,000,000 | 49,899,500 | 23,000,000 | 49,899,500 | |
| Amortised Cost | ||||
| Issue of bond costs | ||||
| 426,938 | 846,054 | 426,938 | 846,054 | |
| Issue of bond costs amortised | ||||
| (284,624) | (421,721) | (284,624) | (421,721) | |
| 142,314 | 424,333 | 142,314 | 424,333 | |
| Amortised cost | ||||
| 22,857,686 | 49,475,167 | 22,857,686 | 49,475,167 |
The effective interest rates at the end of the year were as follows:
| Face value | ||
| 2024 | 2023 | |
| € | € | |
| Secured Bonds 2023 | - | 4.25% |
| Secured Bonds 2023-2025 | - | 3.70% |
| Secured Bonds 2024-2026 | - | 3.90% |
| Secured Bonds 2025-2027 | 4.75% | 4.75% |
During the current year, part of the 4.75% Secured Bonds 2025-2027 amounting to €15,000,000 were classified as
current. The rest of the amount was classified as non-current.
On 11 April 2024, 3.70% Secured Bonds 2023-2025 were redeemed in full.
On 30 December 2024, 3.90% Secured Bonds 2024-2026 were redeemed in full.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
39
NOTES TO THE FINANCIAL STATEMENTS - 31st DECEMBER 2024
23 Borrowings – continued
On 5 December 2022, GAP Group p.l.c. issued up to 23,000,000 4.75% Secured Bonds 2025-2027 of a nominal value
of €100 per Bond issued at par. The bond interest is payable annually in arrears on 21 December. The bonds are
redeemable at par and are due for redemption at any date falling between 22 December 2025 and 21 December 2027,
at the sole option of the Issuer, by giving not less than 30 days’ notice. The bonds are guaranteed by GAP Zonqor
Limited, which has bound itself for the payment of the bonds and interest thereon, pursuant to and subject to the
terms and conditions in the Prospectus. The bonds have been admitted to the Stock exchange on 29 December 2023.
The quoted market price as at 31 December 2024 for the bonds was €100.99. In the opinion of the directors, these
market prices fairly represent the fair value of these financial liabilities.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
40
NOTES TO THE FINANCIAL STATEMENTS - 31st DECEMBER 2024
24 Trade and other payables
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Trade and other payables | ||||
| Trade creditors and accruals | ||||
| 4,813,550 | 5,076,227 | 205,813 | 241,338 | |
| Advance deposits received on promise of sale | ||||
| agreements | ||||
| 1,220,480 | ||||
| 2,167,213 | ||||
| - | ||||
| - | ||||
| Other taxation | ||||
| 44,259 | 52,689 | - | - | |
| 6,078,289 | 7,296,129 | 205,813 | 241,338 | |
| Other Financial liabilities | ||||
| Amounts due to group companies | ||||
| - | - | 53,740,635 | 35,385,433 | |
| - | - | 53,740,635 | 35,385,433 | |
| Non-current liabilities | ||||
| Minority interests | ||||
| 4,907 | 4,907 | - | - | |
| 4,907 | 4,907 | - | - | |
| Total trade and other creditors | ||||
| 6,083,196 | 7,301,036 | 53,946,448 | 35,626,771 |
The amounts due to subsidiaries are interest free and repayable on demand.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
41
NOTES TO THE FINANCIAL STATEMENTS - 31st DECEMBER 2024
25 Transactions with related parties
All companies forming part of Gap Group p.l.c. are considered by the directors to be part of the Group.
Companies having the same shareholders and directors are considered by the directors to be related parties.
During the course of the year, the Company and the Group entered into transactions with related undertakings
all of which arise in the ordinary course of business. The related party transactions were :
| Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| € | € | € | € | |
| Other financial assets | ||||
| Amounts receivable from other related parties | ||||
| 7,658,989 | 7,786,219 | 4,992,000 | 5,221,806 | |
| Trade and other receivables | ||||
| Amounts due from group companies | ||||
| - | - | 32,181,332 | 40,303,913 | |
| Amounts due from parent company | ||||
| 9,803,007 | 9,803,077 | 6,061,216 | 6,061,216 | |
| Amounts due from related parties | ||||
| 1,357,987 | 944,312 | 688,690 | 688,690 | |
| Finance income | ||||
| Interest receivable from group companies | ||||
| - | - | 2,117,264 | 3,161,623 | |
| Interest receivable from related parties | ||||
| 182,000 | 200,838 | 192,000 | 200,838 | |
| Other financial liabilities | ||||
| Amounts due to group companies | ||||
| - | - | 53,740,635 | 35,385,433 |
26 Contingent liabilities
One of the companies within the Group, Geom Developments Limited is involved in a pending court case which
might lead to litigation costs amounting to circa Eur75,000. Consequently, this was disclosed as a contingent
liability.
27 Commitments
As at December 2024, the Group has entered into promise of sale agreements with advance deposits amounting
to €1,220,480 (2023 - €2,167,213). These agreements are expected to generate sales amounting to €12,204,800
(2023 - €21,628,130).
As at 31 December 2024, the Group had bank guarantees amounting to €271,936 (2023- €269,985) in favour of
third parties
.
GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31
st
December 2024
_________________________________________________________________________________
42
NOTES TO THE FINANCIAL STATEMENTS - 31st DECEMBER 2024
28 Statutory information
Group Head Office, Triq il-Wirt Naturali, Bahar ic-Caghaq, Naxxar.
The parent company of Gap Group p.l.c is Gap Group Investments II Limited , a company registered in Malta,
with its registered address at PLAN Group Head Office, Triq il-Wirt Naturali, Bahar ic-Caghaq, Naxxar.
There is no ultimate controlling party as none of the shareholders hold more than 50% of the voting shares in
the company.
29 Events after reporting period
The Directors have assessed events occurring after the reporting date and up to the date of authorisation of
these financial statements. Based on this assessment, no events have occurred that require adjustment to, or
disclosure in, the financial statements for the year ended 31 December 2024, in accordance with the
requirements of IAS 10 Events After the Reporting Period.
