SP Finance plc - 391200ZCN16YSPNKID89

SP FINANCE P.L.C.

REPORT OF THE DIRECTORS

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Directors:-

Mr. Joseph Casha

Mrs. Josephine Casha

Dr. Alex Perici Calascione – Non-executive director

Dr. Reuben Debono – Non-executive director

Mr. Mark Anthony Grech – Non-executive director

Secretary:-

Dr. Andrea Micallef

Bankers:-

HSBC Bank Malta p.l.c.

Business Bank Centre

Mill Street,

Qormi

Registered Office:-

89,

The Strand,

Sliema, Malta.

The Directors hereby present their annual report together with the audited financial statements of SP Finance p.l.c. (the “Company”) for the year ended on 31 December 2024.

The Directors also present their annual report together with the audited financial statements of the SP Finance p.l.c. Group (the “Group”) which comprises the Company and its fully owned subsidiaries, namely SP Investments Limited (Reg. No. C-89468), Med Asia Branding Ltd. (formerly Pebbles St Julians Limited) (Reg. No. C-89612), Pebbles Resort Limited (Reg. No. C-89613), Sea Pebbles Limited (Reg. No. C-6138) and Med Asia Operations Limited (Reg. No. C-103605) for the year ended on 31 December 2024. The latter company became part of the Group in February 2023 upon the acquisition of all its shares by Sea Pebbles Limited.

Principal Activities

The Company’s principal activity is to act as the parent and investment holding company of the Group.

The Group’s principal activities consist in the ownership and operation of the Pebbles Boutique Aparthotel in Sliema and the operation of the Pebbles Resort hotel in St. Paul’s Bay. Since 1 April 2023 the Group, through its subsidiary Med Asia Operations Limited operates a number of catering and entertainment establishments namely the MedAsia Fusion Lounge in Sliema, the MedAsia Playa in Sliema, The MedAsia Golden Sands in Golden Bay, the Noodle Box in Sliema and all the bar and restaurant establishments located in the Pebbles Resort in St. Paul’s Bay.

The Group, through its subsidiary Med Asia Branding Limited, also holds intellectual property rights.

Bond Issue

In terms of the Prospectus dated 8 April 2019 the Company had offered for subscription an amount of €12 million 4% Secured Bonds 2029 of a nominal value of €100 per Bond issued at par. The Bonds were fully subscribed and admitted to the Official List of the Malta Stock Exchange p.l.c. with effect from 3 May 2019. Sea Pebbles Limited acted as guarantor of this bond issue (the “Guarantor”).

In accordance with the Prospectus, the proceeds from the bond issue were utilized by the Group to acquire properties connected with its current hotel operations and planned expansion projects, to refurbish and upgrade the San Pawl Hotel (now Pebbles Resort) and to repay an outstanding bank financing facility.

Review of Business

The Group registered a profit before tax of €763,709 (2023: Loss of €426,234) after taking into consideration: (a) a reversal of a prior year impairment in the carrying value of the right of use asset and property, plant and equipment in Pebbles Resort Limited amounting to €1,026,316, (b) an impairment in the value of goodwill in Med Asia Operations Limited amounting to €455,000 and (c) an impairment in the value of intangible property in Med Asia Branding Limited amounting to €175,000.

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The Group’s revenue in 2024 amounted to €9,872,283 (2023: €10,521,305). The decrease in revenue is principally due to the closure and demolition of the Pebbles Boutique Aparthotel in Sliema which is being rebuilt into a Class 3B Hotel with a total of 109 suites and ancillary facilities. This hotel’s revenue in 2024 amounted to €11,990 (2023: €1,454,966). This decrease in revenue was partly offset by increases in revenue achieved by Pebbles Resort Limited (€4,609,375 in 2024 compared to €3,912,192 in 2023) and by Med Asia Operations Limited (€5,807,934 in 2024 compared to €5,448,205 in 2023).

The Company registered a profit before tax of €38,987 (2023: Profit of €4,728).

Financial Position

As at 31 December 2024 the Group’s total asset base stood at €44,778,235 (2023: €43,257,858). The Group’s current assets amounted to €4,896,514 (2023: €3,242,917) while current liabilities amounted to €8,144,240 (2023: €6,556,989). The Group’s non-current liabilities stood at €17,517,026 (2023: €18,793,695), mostly consisting of bond borrowings amounting to €12,000,000.

Business Update

As stated above, the Pebbles Boutique Aparthotel in Sliema was closed throughout 2024 resulting in a loss of revenue to the Group of approximately €1.44 million and a loss of profit before tax of €0.19 million. In March 2025 the Planning Authority granted a full development permission to Sea Pebbles Limited to construct a Class 3B Hotel with a total of 109 suites and ancillary facilities including a Class 4D restaurant. The demolition of the site during 2024 was carried out at a slower pace than anticipated due to the complexity of the work involved and the fact that the site is in a tourist area, thus subject to restrictions on when demolition works can be carried out. As a result of these delays, the hotel is now expected to re-open in mid-2026.

The Pebbles Resort in St. Paul’s Bay, which during the summer months operates as a music hotel under the ‘Bora Bora Ibiza Malta’ franchise continued to perform well. Its revenue increased from €3,912,192 in 2023 to €4,609,375 in 2024 (+18%) while it managed to turn a loss before tax in 2023 of €411,050 to a profit before tax of €1,246,412 in 2024, partly due to a reversal of a prior year impairment in the carrying value of the right of use asset and property, plant and equipment of €1,026,316.

The financial results of Med Asia Operations Limited, which operates the Group’s various catering and entertainment establishments, were worse than projected. While revenue grew by 6.6% from €5,448,205 in 2023 to €5,807,934 in 2024, this results from the fact that the establishments were taken over by the Group on 1 April 2023, thus the 2024 figures include a full year while the 2023 figures relate to nine months’ operations. The company realized a loss before tax of €97,837 in 2024 compared to a profit before tax of €422,737 in 2023. This deterioration in profitability is principally attributable to the inclusion of the loss-making months of January to March in 2024 and to a one-off impairment of goodwill amounting to €455,000. In addition, profit margins were less than forecast due to continuing inflationary pressures on inputs, mainly wages and food items.

Med Asia Branding Limited, which holds the intellectual property rights relating to the MedAsia brand, achieved its revenue targets for the year. However, its profitability was negatively impacted by a one-time impairment in the value of its intellectual property rights, which, on a stand-alone basis, amounted to €370,000. As a result, the company made a loss before tax of €91,317 in 2024 compared to a profit of €278,824 in 2023.

Events after the Reporting Period

On 12 March 2025, the Planning Authority granted a full development permission to Sea Pebbles Limited to construct a Class 3B Hotel with a total of 109 suites and ancillary facilities including a Class 4D restaurant on the company’s site on the Sliema – Gzira seafront. The new hotel is expected to welcome its first guests in mid-2026 and once fully operational is expected to generate revenue and profits well in excess of what was generated by the much smaller Pebbles Boutique Aparthotel.

Key Risks – General

The Group’s business activities consist of the provision of tourist accommodation and the operation of catering and entertainment establishments. Such hospitality operations are subject to external factors, many of which are common to the hospitality industry, and beyond the Group’s control, including: (i) general market and economic conditions in the countries from which tourists originate; (ii) increased risk of recession resulting from the current trade war between the United States and its main trading partners (iii) susceptibility to local competition; (iv) impact of geo-political instability due to ongoing armed

SP FINANCE P.L.C.

REPORT OF THE DIRECTORS

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conflicts in Eastern Europe and the Middle East; (v) outbreaks of pandemics that may restrict international travel and (vi) increases in operating costs.

While negative trends in any of these areas, if they materialize, would unavoidably impact on the Group’s operations and business, it is considered that the Group’s decades-long presence and experience operating in this sector renders it sufficiently resilient to overcome any challenges it may face.

Key Risks – Specific

As stated above, the Group has embarked on a multi-million-euro project to transform the now demolished Pebbles Boutique Aparthotel in Sliema into a much larger hotel which is expected to be completed in mid-2026. The new hotel, when operational, is expected to generate significantly higher revenues and profitability compared to the hotel which operated on the same site until December 2023.

The principal risks which have been identified with this project are:

•Cost overruns. The directors consider this to be a low to medium risk since most works contracts are in place and that construction works will be carried out mostly by related companies outside the Group.

•Delay in completion date. The directors consider that a significant delay in the completion date is a low to medium risk since most construction work will be carried out by related companies outside the Group and therefore within the operational control of the ultimate shareholders.

•Change in market conditions prevalent when the hotel reopens. This is considered as a low risk by the directors in view of the current robustness of the Maltese tourism industry, the hotel’s prime location and the excellent customer reviews it has always received.

•Project financing. This project is being currently financed by the Group’s cash generation and by related companies outside the Group. In addition, in April 2025, a local financial institution which has a long-standing relationship with the Group has issued a sanction letter to cover the project’s completion cost. The directors consider the risk that the Group has insufficient financing to complete the project to be low.

Statement pursuant to Capital Markets Rule 5.62

Rule 5.62 of the Capital Markets Rules requires the directors to make a statement that the business is a going concern with supporting assumptions or qualifications as necessary.

In preparing this statement the directors considered the following factors:

In general, Malta’s tourism sector in 2024 and the first few months of 2025 has continued to show signs of robustness and steady growth. Industry experts and government sources are projecting that tourist arrivals in 2025 will surpass the record numbers achieved in 2024. As a Group that operates in the hospitality industry (tourist accommodation and catering and entertainment establishments) this augurs well that in the foreseeable future the Group will be operating in a robust and flourishing tourism industry.

More specifically, the Group’s financial position improved significantly in 2024 compared to 2023 and prior years and for the first time it managed to record a profit before tax notwithstanding that one of the two hotels it operates was closed throughout the year. The investment made in the music hotel concept under which the Pebbles Resort operated during the summer months since 2022 is bearing fruit, enabling the company to provide a unique experience that distinguishes it from other hotels, thus securing higher occupancy levels at better rates compared to competitor hotels in the surrounding area.

The directors also considered realistic the financial projections presented by management, which indicate that the Group is likely to generate sufficient financial resources through its operations to permit it to continue in operational existence for the foreseeable future.

Therefore, in terms of Capital Markets Rule 5.62, the Directors hereby state that these financial statements have been prepared on the going concern basis.

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REPORT OF THE DIRECTORS

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Loans between subsidiary companies

The proceeds from the bond issue of the 3 May 2019 were invested as €12,000,000 4.1% Cumulative Preference shares in its subsidiary SP Investments Limited. In turn, these proceeds were invested by SP Investments Limited in its subsidiaries, which are the companies operating the Group’s hotels, partly as Ordinary share capital and partly as loans.

As per section B5 of the Summary Note forming part of the Prospectus of the above-mentioned bond issue, the loans invested by SP Investments Limited in its subsidiaries were interest-free.

As from 1 January 2021, it was deemed beneficial to the Group that SP Investments Limited start charging interest on the loans to its subsidiaries at the rate of 8% per annum. Following a share reduction of €2,500,000 by Sea Pebbles Limited which came into effect on the 30 December 2022, and the conversion of the €2,500,000 to a loan from SP Investments Limited to its subsidiary Sea Pebbles Limited, the interest rate charged by SP Investments Limited to Sea Pebbles Limited was reduced to 6.5% per annum starting from 1 January 2023. The Group and the Company results are not negatively impacted by these changes.

Results, Dividends and Reserves

The results for the year are set in the Statement of Profit and Loss and Other Comprehensive Income on page 10.

The Board does not propose the payment of a dividend.

The Group’s retained earnings as at 31 December 2024 amounted to negative €3,851,054 (2023: negative €4,913,848) while the Company’s retained earnings on the same date amounted to €198,334 (2023: €172,992).

Statement of Directors’ Responsibilities for the Financial Statements

The Companies Act (Chapter 386 of the Laws of Malta) requires the directors of SP Finance p.l.c. to prepare annual financial statements for each financial year which give a true and fair view of the state of affairs of the Group and the Company as at the end of the financial year and of the profit or loss for the year in accordance with the requirements of International Financial Reporting Standards as adopted by the European Union.

In preparing such financial statements, the Directors are required to:

•Adopt the going concern basis unless it is inappropriate to presume that the Group and the Company will continue in business;

•Select suitable accounting policies and apply them consistently from one accounting year to another;

•Make judgements and estimates that are reasonable and prudent; and

•Account for income and charges relating to the accounting year on the accruals basis.

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group and the Company and enable them to ensure that the financial statements have been properly prepared in accordance with the provisions of the Companies Act. The directors are also responsible for safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud, errors and other irregularities.

The financial statements of SP Finance p.l.c. and the Group for the year ended on 31 December 2024 are included in the Annual Report 2024, which is available on the Company’s website.

Statement of Responsibility pursuant to the Capital Markets Rule 5.68

The directors confirm that, to the best of their knowledge:

•The financial statements give a true and fair view of the financial position of the Company and the Group as at 31 December 2024, and of the financial performance and the cash flows for the year then ended, in accordance with International Financial Reporting Standards as adopted by the European Union; and

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REPORT OF THE DIRECTORS

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•The Annual Report includes a fair review of the development and performance of the business and the position of the Company and the Group, together with a description of the principal risks and uncertainties that the Company and the Group face.

Statement pursuant to Capital Markets Rule 5.70.1

Sea Pebbles Limited has entered into a contract with Sea Pebbles Construction Limited (C 103112), a company outside the Group whose directors are Mr. Joseph Casha and Mrs. Josephine Casha, for the construction and finishing works at the site of the former Pebbles Boutique Aparthotel in Sliema. During 2024 Sea Pebbles Construction Limited undertook demolition and excavation works at this site.

Auditors

VCA Certified Public Accountants have intimated their willingness to continue in office. A resolution for their reappointment will be proposed at the Annual General Meeting.

Signed on behalf of the Board of Directors on 30 April 2025 by Mr. Joseph Casha (Director) and Mrs. Josephine Casha (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Report and Financial Statement

SP FINANCE P.L.C.

STATEMENT OF COMPLIANCE WITH PRINCIPLES OF GOOD CORPORATE GOVERNANCE

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Introduction

Pursuant to the Listing Rules as issued by the Listing Authority of the Malta Financial Services Authority, S.P. Finance p.l.c. (the ‘company’ or the ‘Issuer’) is hereby reporting on the extent of its adoption of the Code of Principles of Good Corporate Governance (the ‘Principles’) contained in Appendix 5.1 of the Listing Rules as well as the measures adopted to ensure compliance with these same Principles.

Since its inception, the company’s principal activity was to raise funds from the capital market to finance the operations of other group companies forming part of the Sea Pebbles Group (the ‘Group’)

The Board of Directors acknowledges that the Code does not dictate or prescribe mandatory rules but recommends principles of good practice. Nonetheless, the Board strongly believes that the Principles are in the best interest of the shareholders and other stakeholders since they ensure that the Directors, and Management of the company adhere to internationally recognised high standards of Corporate Governance.

The company currently has a corporate decision-making and supervisory structure that is tailored to suit the company’s requirements and designed to ensure the existence of adequate checks and balances within the company, whilst retaining an element of flexibility, particularly in view of the size of the company and the nature of its business. The company adheres to the Principles, except for those instances where there exist particular circumstances that warrant non-adherence thereto, or at least postponement for the time being.

Additionally, the Board recognises that, by virtue of 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 and 5.97.8.

Roles and Responsibilities

The Board acknowledges its statutory mandate to conduct the administration and management of the Company. The Board, in fulfilling its mandate and discharging its duties assumes responsibility for:

1.the Company’s strategy and decisions with respect to the issue, servicing and redemption of its bonds; and

2.monitoring that its operations are in conformity with its commitments towards bondholders, shareholders and all relevant laws and regulations.

3.ensuring that the Company installs and operates effective internal control and management systems and that it communicates effectively with the market.

The Board of Directors

The Board of Directors of the company is responsible for the overall long-term direction of the company, in particular in being actively involved in overseeing the systems of control and financial reporting and that the company communicates effectively with the market. The Company has in place systems whereby the directors obtain timely information not only at meetings of the Board but at regular intervals or when the need arises.

Directors are appointed during the Company’s Annual General Meeting for periods of one year, at the end of which term they may stand again for re-election. The Articles of Association of the Company clearly set out the procedures to be followed in the appointment of directors.

Apart from setting the strategy and direction of the Company, the Board retains direct responsibility for approving and monitoring:

1.that the proceeds of the bonds are applied for the purposes for which they were sanctioned as specified in the prospectus of the bonds issued;

2.the proper utilization of the resources of the Company;

3.the annual report and financial statements, the relevant public announcements and the Company’s compliance with its continuing obligations under the Listing Rules.

SP FINANCE P.L.C.

STATEMENT OF COMPLIANCE WITH PRINCIPLES OF GOOD CORPORATE GOVERNANCE

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Complement of the Board

The Board of Directors meets regularly, with a minimum of four times annually, and is currently composed of five Members, three of which are completely independent from the company or any other related companies and therefore free of any significant business relationship, family or other relationships with the Issuer, its controlling shareholders or the management, that creates a conflict of interest such as to impair their judgement.

The activities of the Board are exercised in a manner designed to ensure that it can effectively supervise the operations of the Company and protect the interests of bondholders and the shareholders. During the current financial period, meetings of the Board were held as frequently as considered necessary.

Corporate Governance - Statement of Compliance (continued)

The Board members are notified of forthcoming meetings by the Company secretary (Dr. Andrea Micallef) with the issue of an agenda and necessary supporting documentation which are then discussed during the Board meetings.

During the financial year under review, the Board met formally five times and was always attended by more than 75% of the Officers of the Company.

Dr. Alex Perici Calascione, Mr. Mark Grech and Dr. Reuben Debono are the independent non-executive directors of the company.

Executive Directors

Josephine Casha

Joseph Casha

Independent, Non-Executive Directors

Dr. Alex Perici Calascione

Dr. Reuben Debono

Mr. Mark Grech

The remuneration of the Board is reviewed periodically by the shareholders of the company. The company ensures that it provides Directors with relevant information to enable them to effectively contribute to Board decisions.

The Directors are fully aware of their duties and obligations and should a conflict of interest in decision making ever to arises, the current internal policy of the Company is such as to ensure that the particular Director refrains from participating in such decisions. The Board member concerned shall not take part in the assessment by the Board as to whether a conflict of interest exists. A Director shall not vote in respect of any contract, arrangement, transaction or proposal in respect of which he has a material interest.

Risk Management and Internal Control

The company’s system of internal controls is designed to manage all the risks in the most appropriate manner. However, such controls cannot provide an absolute elimination of all business risks or losses. Therefore, the Board, inter alia, reviews the effectiveness of the company’s system of internal controls in the following manner:

1. Reviewing the company’s strategy on an on-going basis as well as setting the appropriate

business objectives in order to enhance value for all stakeholders;

2. Implementing an appropriate organisational structure for planning, executing, controlling and monitoring business operations in order to achieve company objectives;

3. Identifying and ensuring that significant risks are managed satisfactorily; and

4. Company policies are being observed.

SP FINANCE P.L.C.

STATEMENT OF COMPLIANCE WITH PRINCIPLES OF GOOD CORPORATE GOVERNANCE

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Audit Committee

The Board of Directors of the Company has established an Audit Committee in accordance with the requirements of the Listing Rules issued by the Listing Authority. The Audit Committee’s primary objective is to assist the Board in fulfilling its responsibilities relating to risk, control and governance, as well as to review the financial reporting process and the process for monitoring compliance with applicable laws and regulations.

The Audit Committee is a sub-committee of the Board constituted to fulfil an overseeing role in connection with the quality and integrity of the Company’s financial statements. In performing its duties, the Audit Committee maintains effective working relationships with the Board of Directors, management and the external auditors of the Company. The Committee also has the function of scrutinising and evaluating any proposed transaction to be entered into by the Company and a related party, to ensure that the execution of any such transaction is at arm’s length and on a commercial basis ultimately in the interest of the

Company.

The Board has set formal Terms of Reference of the Audit Committee that establish its composition, role and scope. The Board reserves the right to amend these Terms of Reference from time to time. The Terms of Reference of the Audit Committee are modeled on the principles set out in the Listing Rules 5.117 – 5.134A.

The Audit Committee assists the Board in fulfilling its supervisory and monitoring responsibility by reviewing the company financial statements and disclosures, monitoring the system of internal control established by management as well as the audit processes. The Audit Committee is a subcommittee of the Board and is directly responsible and accountable to the Board.

In terms of the Maltese Companies Act (Chap. 386) and the Malta Financial Services Authority Listing Rules, the financial statements of SP Finance plc are subject to annual audit by its external auditors. Moreover the Audit Committee has direct access to the external auditors of the Company, who attend the meeting at which the Company’s financial statements are approved.

The Audit Committee, which meets regularly, with a minimum of four times annually, is currently composed of the following individuals:

Mr. Mark Grech (Chairman)

Dr. Alex Perici Calascione

Dr. Reuben Debono

This current complement addresses the requirement established by the Listing Rules that the Audit Committee is composed of non-executive directors, the majority of which being independent.

The Board considers Mr. Mark Grech to be competent in accounting and auditing matters in terms of the Listing Rules. Mr Mark Grech is considered as an independent director since he is free of any significant business, family or other relationship with the Company, its controlling shareholders or the management of either, that could create a conflict of interest such as to impair his judgement. Furthermore, the Board considers that the Audit Committee, as a whole, to have relevant competence in the sector the company is operating.

The Audit Committee was formally set up on the 6th November 2019. Communication with and between the Secretary, top level management and the Committee is ongoing and considerations that required the Committee’s attention were acted upon between meetings and decided by the Members (where necessary) through electronic circulation and correspondence.

Relations with the market

The market is kept up to date with all relevant information, and the company regularly publishes such information on its website to ensure consistent relations with the market.

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STATEMENT OF COMPLIANCE WITH PRINCIPLES OF GOOD CORPORATE GOVERNANCE

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Committees

The directors believe that, due to the Company’s size and operation, the remuneration. Evaluation and nominations committees that are suggested by the Code are not required and that the function of these can effectively be undertaken by the Board itself. However the Board is tasked to review on an annual basis, the remuneration paid to the directors and to carry out an evaluation of their performance and that of the Audit Committee. The shareholders approve the remuneration paid to the directors at the annual general meeting of the Company.

Remuneration Statement

Pursuant to the Company’s Memorandum and Articles of Association, the maximum annual aggregate emoluments that may be paid to the directors is determined by the Company further to a General Meeting during which the proposed aggregate emoluments or an increase in the maximum limit of such aggregate emoluments shall be proposed. Furthermore, the remuneration of directors is a fixed amount per annum and does not include any variable component relating to profit sharing, share options or pension benefits. During the year under review, the directors received emoluments amounting in total to €24,000.

Conclusion

The Board considers that, to the extent otherwise disclosed herein, the Company was generally in compliance with the Principles throughout the period under review as befits a company of its size and nature.

SP FINANCE P.L.C.

STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2024

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Group

Company

2024

2023

2024

2023

Notes

€

Revenue	4	9,872,283	10,521,305	492,000	492,000
Costs
Cost of sales	7	(6,899,455)	(7,625,393)	(34,185)	(33,938)
Gross profit		2,972,828	2,895,912	457,815	458,062
Administrative expenses	7	(342,171)	(403,436)	(88,828)	(123,334)
Other operating income	5	55,303	146,963	150,000	150,000
(Loss) on sale of property, plant & equipment	11	(246,267)	(618,810)	-	-
Earnings before interest, tax and depreciation		2,439,693	2,020,629	518,987	484,728
Depreciation and amortisation	11,14	(1,455,984)	(1,486,455)	-	-
Operating profit/(loss)		983,709	534,174	518,987	484,728
Finance costs	6	(616,316)	(938,185)	(480,000)	(480,000)
Reversal of Impairment of non-financial instruments	9	1,026,316	-	-	-
Impairment of intangible assets	13	(630,000)	-	-	-
Write off of amounts receivable		-	(22,223)	-	-
Profit/(loss) before taxation		763,709	(426,234)	38,987	4,728
Tax credit/(expense)	10	299,090	292,611	(13,645)	(1,655)
Profit/(loss) for the year – Total comprehensive income/(loss)		1,062,799	(133,623)	25,342	3,073
(Loss)/Profit attributable to:Equity holders of the Company		1,062,799	(133,623)	25,342	3,073

SP FINANCE P.L.C.

STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2024

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		Group	Group	Company	Company
		2024	2023	2024	2023
Assets	Notes	€	€	€	€
Non-current assets
Property, Plant and equipment	11	24,984,616	25,640,105	-	-
PPE under development	12	704,470	-	-	-
Intangible assets	13	3,620,104	4,103,104
Right-of-use assets	14	2,723,750	2,699,698	-	-
Investment property	15	5,959,912	6,004,491	-	-
Investment in subsidiary	16	-	-	19,097,783	19,097,783
Financial assets at amortised cost	17	-	-	12,000,000	12,000,000
Deferred tax asset	20	1,888,869	1,488,093	-	-
Trade and other receivables	19	-	79,450	-	-
		39,881,721	40,014,941	31,097,783	31,097,783
Current assets
Trade and other receivables	19	4,585,511	2,977,532	997,058	597,786
Inventories	18	111,017	116,884	-	-
Cash at bank and in hand		52,178	148,501	14,756	2,983
Current tax asset	22	147,808	-	-	-
		4,896,514	3,242,917	1,011,814	600,769
Total Assets		44,778,235	43,257,858	32,109,597	31,698,552

SP FINANCE P.L.C.

STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2024

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		Group	Group	Company	Company
		2024	2023	2024	2023
Equity and liabilities	Notes	€	€	€	€
Equity
Called up issued share capital	24	250,000	250,000	250,000	250,000
Share premium	24	17,750,000	17,750,000	17,750,000	17,750,000
Revaluation reserve	25	14,799,920	14,799,920	-	-
Fair value gain reserve	26	2,938,013	2,938,013	-	-
Other reserve	27	(12,769,910)	(12,916,911)	1,098,983	1,098,983
Retained earnings		(3,851,049)	(4,913,848)	198,334	172,992
Total equity		19,116,974	17,907,174	19,297,317	19,271,975
Liabilities
Non-current liabilities
Borrowings	23	12,037,046	12,236,892	12,000,000	12,000,000
Lease liability	14	3,201,338	4,279,307	-	-
Deferred tax liability	20	2,278,642	2,277,496	-	-
		17,517,026	18,793,695	12,000,000	12,000,000
Current liabilities
Trade and other payables	21	5,315,732	4,006,075	796,980	424,922
Current income tax liability	22	378,072	129,723	15,300	1,655
Borrowings	23	1,503,146	1,818,989	-	-
Lease liability	14	947,285	602,202	-	-
		8,144,235	6,556,989	812,280	426,577
Total liabilities		25,661,261	25,350,684	12,812,280	12,426,577
Total equity and liabilities		44,778,235	43,257,858	32,109,597	31,698,552

The financial statements were approved and authorised for issue by the Board of Directors on 30 April 2025. The financial statements were signed on behalf of the Board of Directors by Mr. Joseph Casha (Director) and Mrs. Josephine Casha (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Report and Financial Statement.

SP FINANCE P.L.C.

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Group

Share Capital

€

Share premium

€

Revaluation reserve

€

Fair Value gain reserve

€

Other

reserve

€

Retained earnings

€

Total

€

Balance at 1 January 2023	250,000	17,750,000	14,799,920	2,938,013	(17,531,725)	(4,780,225)	13,425,983
Capitalisation Reserve – note 27	-	-	-	-	4,614,814	-	4,614,814
Comprehensive income
Loss for the year	-	-	-	-	-	(133,623)	(133,623)
Balance at 31 December 2023	250,000	17,750,000	14,799,920	2,938,013	(12,916,911)	(4,913,848)	17,907,174

Transactions with owners in their capacity as owners
Capital contribution – Note 27	-	-	-	-	147,001	-	147,001
Comprehensive income
Profit for the year	-	-	-	-	-	1,062,799	1,062,799
Balance at 31 December 2024	250,000	17,750,000	14,799,920	2,938,013	(12,769,910)	(3,851,049)	19,116,974

Company

Capital

Premium

Other

Reserve

Retained Earnings

Total

€

Balance at 31 December 2023

250,000

17,750,000

1,098,983

169,919

19,268,902

Comprehensive income

Profit for the year

3,073

Balance at 31 December 2023

250,000

17,750,000

1,098,983

172,992

19,271,975

Comprehensive income

Profit for the year

25,342

Balance at 31 December 2024

250,000

17,750,000

1,098,983

198,334

19,297,317

SP FINANCE P.L.C.

STATEMENT OF CASHFLOWS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

		Group	Group	Company	Company
		2024	2023	2024	2023
Cashflow from operating activities		€	€	€	€
Profit/ (loss) before taxation		763,709	(426,234)	38,897	4,728
Adjustments for:
Depreciation and amortisation	12,14	1,455,984	1,486,455	-	-
Finance costs	6	584,730	906,603	480,000	480,000
Reversal of impairment on PPE and ROU	9	(1,026,316)	-	-	-
Amortisation of bond issue costs	6	31,582	31,582	-	-
Dividend income	4	-	-	(492,000)	(492,000)
Impairment on goodwill and intangible		630,000
Loss on disposal of PPE	11,15	246,267	618,810	-	-
Operating profit/(loss) before working capital changes		2,685,956	2,617,216	26,897	(7,272)
Movement in receivables/related company balances	19	132,856	-	(399,272)	3,042
Movement in inventories	18	5,867	(9,005)	-	-
Movement in payables	21	1,071,238	2,233,151	372,148	(7,790)
Cash generated from/(used in) operations		3,895,917	4,841,362	(227)	(12,020)
Income tax refund		-	-	-	-
Interest paid		(630,920)	(593,404)	(480,000)	(480,000)
Net cashflows generated from/(used in) operating activities		3,264,997	4,247,958	(480,227)	(492,020)
Cashflows from investing activities
Payments to acquire property, plant and equipment	12	(358,197)	(179,825)	-	-
Consideration paid on business combination		-	(650,000)	-	-
Net dividends received	4	-	-	492,000	492,000
Net cashflows (used in)/generated from investing activities		(358,197)	(829,825)	492,000	492,000
Cashflow from financing activities
Advances to related party outside group		(1,422,961)	(2,185,364)	-	-
Movement in bank loans	23	(641,463)	(621,545)	-	-
Movement in third party borrowings	23	40,568	(333,332)	-	-
Lease liability payments	14	(1,032,890)	(671,403)	-	-
Net cash used in financing activities		(3,056,746)	(3,811,644)	-	-
Net movement in cash and cash equivalents		(149,946)	(393,511)	11,773	(20)
Cash and cash equivalents at the beginning of the year		(728,694)	(335,183)	2,983	3,003
Cash and cash equivalents at the end of the year	29	(878,640)	(728,694)	14,756	2,983

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

1.Basis of preparation

Reporting entity

SP Finance p.l.c. (the ‘Company’) is a public limited liability company which was incorporated in Malta on 19 November 2018. The Company’s registration number is C-89462 and the Company’s registered office is 89, the Strand, Sliema, Malta.

SP Finance p.l.c. and its subsidiaries’ (the ‘Group’) principal activities include the ownership, rental, development and operation of hotels, the operations of catering and entertainment establishments and the ownership of intellectual property rights.

The consolidated financial statements include the financial statements of the Company and its subsidiaries.

The financial statements of the Company and the consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and in accordance with the requirements of the Companies Act (Cap. 386).

These financial statements have been prepared under the historical cost convention basis as modified by the fair valuation of the land and buildings class of property, plant and equipment and investment property. The functional currency of the Company is the Euro which is also the presentation currency of the Group.

Assessment of the appropriateness of the going concern assumption

The Group’s financial results for the year ended on 31 December 2024 show a substantial improvement over the results obtained in the prior year, even though one of its two hotels was closed during the whole of 2024, due to its demolition and reconstruction as a much bigger hotel. Gross accommodation revenue of Pebbles Resort hotel was €4,609,375, which represents an 18% increase over the revenue figure of €3,912,192 achieved in 2023.

Income from the catering business which the Group took over as from 1 April 2023 grew by 6.6% from €5,448,205 in 2023 to €5,807,934 in 2024, partly because the results of 2024 included a full year compared to nine months in 2023.

The positive financial results for 2024 resulted in improvements in the Group’s gearing, liquidity and other relevant accounting ratios.

With a view to determining the appropriateness of preparing the financial statements on a going concern basis, the directors requested management to prepare realistic yet prudent financial projections for 2025 and beyond, by considering the following relevant matters, among others:

•The loss of accommodation revenue from the Pebbles Boutique Aparthotel until mid-2026 while it is being re-constructed into a much larger hotel.

•The capital expenditure that is being spent in connection with this project.

•The encouraging revenue achieved by Pebbles Resort in the first quarter of 2025 and the solid bookings for the rest of the year, which augur well for improved results compared to the already better results achieved in 2024.

•The fact that negotiations with a local bank to finance a significant portion of the Sliema project were successful and a sanction letter was issued in April 2025.

•A payment program with certain privileged creditors has been finalized on terms that the Group can adhere to.

The Directors are conscious that any financial projections presented to it include judgements and assumptions which at this stage remain subject to underlying uncertainty, both in view of general risks as well as risks that are specific to the Group and the sectors in which it operates, as identified in more detail in the Directors Report.

Following a detailed evaluation of the judgments and assumptions taken into account in the preparation of these financial projections, these were considered to be realistic yet prudent and were thus adopted by the Board.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Basis of preparation (continued)

The directors concluded that the Group is likely to generate sufficient financial resources through its operations and external sources as to permit it to continue in operational existence for the foreseeable future.

Accordingly, based on the outcome of the financial projections in a prudent scenario as referred to above, the Directors consider the going concern assumption in the preparation of the Group’s financial statements as appropriate as at the date of authorisation for issue of the 2024 financial statements.

Standards, interpretations and amendments to published standards effective in 2024

In 2024, the Group adopted new standards, amendments and interpretations to existing standards that are mandatory for the Group’s accounting period beginning on 1 January 2024. The Group has applied the following standards and amendments for the first time for its annual reporting period commencing from 1 January 2024:

i.Classification of Liabilities as Current or Non-Current and Non-current liabilities with covenants – Amendments to IAS

ii.Lease Liability in Sale and Leaseback – Amendments to IFRS 16; and

iii.Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7

The amendments listed above did not have any impact to the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.

Standards, interpretations and amendments to published standards that are not yet effective

Certain new accounting standards and amendments to accounting standards have been published that are not mandatory for 31 December 2024 reporting periods and have not been early adopted by the Company. The Company’s assessment of the impact of these new standards and amendments is set out below

Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7

(effective for annual periods beginning on or after 1 January 2026)

On 30 May 2024, the IASB issued targeted amendments to IFRS 9 and IFRS 7 to respond to recent questions arising in practice, and to include new requirements not only for financial institutions but also for corporate entities. These amendments:

-clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system;

-clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion;

-add new disclosures for certain instruments with contractual terms that can change cashflows (such as some financial instruments with features linked to the achievement of environment, social and governance targets); and

-update the disclosures for equity instruments designated at fair value through other comprehensive income (FVOCI)

The Group and the Company do not expect these amendments to have a material impact on its operations or financial statements. The group will apply the new standard from its mandatory effective date

IFRS 18 Presentation and Disclosure in Financial Statements (effective for annual periods beginning on or after 1 January

2027)

IFRS 18 will replace IAS 1 Presentation of financial statements, introducing new requirements that will help to achieve comparability of the financial performance of similar entities and provide more relevant information and transparency to users. Even though IFRS 18 will not impact the recognition or measurement of items in the financial statements, its impacts on presentation and disclosure are expected to be pervasive, in particular those related to the statement of financial performance and providing management-defined performance measures within the financial statements. Management is currently assessing the detailed implications of applying the new standard on the Group’s and the Compny’s consolidated financial statements.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Basis of preparation (continued)

The group will apply the new standard from its mandatory effective date of 1 January 2027. Retrospective application is required, and so the comparative information for the financial year ending 31 December 2026 will be restated in accordance with IFRS 18.

2.Material accounting policies

A summary of the more important accounting policies, which have been applied consistently, is set out below:

Basis of consolidation

Subsidiaries

A subsidiary is an entity that is controlled by the Company. The Company controls an investee when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

The Group financial statements include the financial statements of the parent Company and all its subsidiaries. The results of the subsidiaries acquired or disposed of during the period are included in the Group statement of profit or loss and other comprehensive income from the date of their acquisition or up to date of their disposal.

Profit or loss and each component of OCI are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses, cash flows and any unrealised gains relating to transactions between members of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

If the Group loses control over a subsidiary, it derecognises the related assets (including any goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value.

In the Company’s financial statements, investments in subsidiaries are accounted for on the basis of the direct equity interest and are stated at the pre organisation book value less any accumulated impairment losses. Dividends from the investment are recognised in profit or loss.

Intangible assets

Goodwill

Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill is not amortised, but it is tested for impairment annually, or more frequent if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which

the goodwill arose. The units or group of units are identified at the lowest level at which goodwill is monitored for internal management purposes, being the operating segments.

Trademark – Intellectual property

An acquired intangible asset is recognised only if it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably. An intangible asset is initially measured at cost, comprising its purchase price and any direct attributable cost of preparing the asset for its intended use.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Material accounting policies (continued)

Intangible assets are subsequently carried at cost less any accumulated amortisation and any accumulated impairment losses. Amortisation is calculated to write down the carrying amount of the intangible asset using the straight-line method over its expected useful life. Amortisation of an asset begins when it is available for use and ceases at the earlier of the date that the asset is classified as held for sale (or included in disposal group that is classified as held for sale) or the date that the asset is derecognised. Intangible assets are tested for impairment annually and amortised accordingly.

Property, plant & equipment

Property, plant and equipment are initially measured at cost and subsequently, land and buildings are stated at market value, based on valuations by external independent valuers, less depreciation. Revaluations are carried out at regular intervals, but at least every five years, unless the directors consider it appropriate to have an earlier revaluation, such that the carrying amount of property does not differ materially from that which would be determined using fair values at the end of the reporting period. Any accumulated depreciation at the date of the revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Plant and equipment are stated at historical cost less depreciation. Assets in the course of construction for production, supply or administrative purposes are classified as property, plant and equipment under development and are carried at cost, less any identified impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the company's accounting policy on borrowing costs. Depreciation of these assets, on the same basis as other property assets, commences when the assets are available for use.

Costs include 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 Group

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.

Any revaluation increase arising on the revaluation is recognised in other comprehensive income and accumulated in equity under the heading of revaluation surplus unless it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is credited to profit or loss to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation is recognised in profit or loss to the extent that it exceeds the balance, if any, held in the revaluation surplus relating to a previous revaluation of that asset. When the asset is derecognised, the attributable revaluation remaining in the revaluation surplus is transferred to retained earnings.

Property, plant and equipment are derecognised on disposal or when no future economic benefits are expected from their use or disposal. Gains or losses arising from derecognition represent the difference between the net disposal proceeds, if any, and the carrying amount, and are included in profit or loss in the period of derecognition. On disposal of a revalued asset, amounts in the revaluation reserve relating to that asset are transferred to retained earnings.

Depreciation commences when the depreciable assets are available for use and is charged to profit or loss so as to write off the cost or revalued amount, less any estimated residual value, over their estimated useful lives, using the straight-line method, on the following bases:

Freehold buildings	2%
Electrical installations	10%
Furniture, fixtures and fittings	5%-10%
Equipment	10%
Motor vehicles	20%
Computer equipment	10%
Catering equipment	16.7%
Other fixed assets	10%

Freehold land is not depreciated as it is deemed to have an indefinite life. The depreciation method applied, the residual value and the useful life are reviewed, and adjusted if appropriate, at the end of each reporting period.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Material accounting policies (continued)

Investment property

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Group, is classified as investment property. Investment property comprises freehold and leasehold land and buildings, and land and buildings held under long-term operating leases.

Investment property is initially measured at cost, including transaction costs. Subsequent to initial recognition, investment property is stated at fair value at the end of the reporting period. Gains or losses arising from changes in the fair value of

investment properties are recognised in profit or loss in the period in which they arise. Fair value is based on active market prices, adjusted, if necessary, for difference in the nature, location or condition of the specific asset. If this information is not available, the Group uses alternative valuation methods such as recent prices on less active markets or discontinued cash flow projections. These valuations are reviewed periodically by the Group directors.

The fair value of investment property reflects, among other factors, rental income from current leases and assumptions about rental income from future leases in the light of current market conditions. The fair value also reflects, on a similar basis, any cash outflows that could be expected in respect of the property.

Subsequent expenditure is charged to the asset’s carrying amount only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the profit loss account during the financial period in which they are incurred.

If an investment property becomes owner-occupied, it is reclassified as property, plant and equipment, and its fair value at the date of reclassification becomes its cost for accounting purposes. Property that is being constructed or developed for future use as investment property is classified as property, plant and equipment and is stated at cost until construction or development is complete, at which time it is reclassified and subsequently accounted for as investment property.

An item of property, plant and equipment becomes an investment property because its use has changed, any difference resulting between the carrying amount and the fair value of this item at the date of transfer is recognised in equity as a

revaluation of property, plant and equipment under IAS 16. However, if a fair value gain reverses a previous impairment loss, the gain is recognised in the income statement.

Investment property is derecognised on disposal or when it is permanently withdrawn from use and no future economic benefits are expected from its disposal. Gains or losses on derecognition represent the difference between the net disposal proceeds, if any, and the carrying amount and are recognised in profit or loss in the period of derecognition.

Financial instruments

Financial assets

Recognition and derecognition

The Group recognises a financial asset initially at fair value in its statement of financial position when it becomes a party to the contractual provisions of the instrument. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Material accounting policies (continued)

Classification and subsequent measurement

-Debt instruments

Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. The Group’s and the Company’s debt instruments principally comprise loans and advances to other undertakings and investments.

The Group’s debt instruments are subsequently measured at either amortised cost, at fair value through other comprehensive income, or at fair value through profit or loss.

The Group reclassifies debt investments when and only when its business model for managing those assets changes.

-Financial assets measured at amortised cost

Debt instruments that meet the following conditions are subsequently measured at amortised cost when:

- The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance, measured in accordance with the Group’s accounting policy ‘Impairment of financial assets’ further below.

Changes in the carrying amount of financial assets carried at amortised cost, as a result of foreign exchange gains or losses, impairment gains or losses and interest income are recognised in profit or loss. On derecognition, any difference between the carrying amount and the consideration received is recognised in profit or loss and is presented separately in the line item ‘Gains and losses arising from the derecognition of financial assets measured at amortised cost’.

Impairment of financial assets

In terms of IFRS 9, the Group and the Company applies an expected credit loss (“ECL”) model. The Group and the Company has to assess on a forward-looking basis the expected credit loss associated with its debt instruments carried at amortised cost and fair value through other comprehensive income.

For trade and other receivables, the Group applies the simplified approach and recognises lifetime ECL. The ECLs on these financial assets are estimated using a provision matrix based on the respective Companies’ historical credit loss experience based on the past due status of the debtors, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date.

For all other financial instruments, the Group and the Company uses the general approach, which requires an assessment as to whether the counterparty has experienced a significant increase in credit risk since initial recognition. This assessment forms the basis as to whether lifetime ECL should be recognised and is based on significant increases in the likelihood or risk of a default occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the reporting date or an actual default occurring. As at reporting date, the credit risk on the Group’s and the

Company’s financial instruments has not increased significantly since initial recognition and consequently the Group and the Company measures the loss allowance at an amount equal to 12-month ECL (‘12m ECL’).

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Material accounting policies (continued)

Financial liabilities

The Group recognises a financial liability on its statement of financial position when it becomes a party to the contractual provision of the instrument. The Group’s financial liabilities are classified as financial liabilities which are not at fair value through profit or loss. These financial liabilities are recognised initially at fair value, being the fair value of consideration received, net of transactions costs that are directly attributable to the acquisition or the issue of the financial liability. These liabilities are subsequently measured at amortised cost. The Group derecognises a financial liability from its statement of financial position when the obligation specified in the contract or arrangement is discharged, cancelled or expired.

Modifications to existing financial liabilities are accounted for as an extinguishment of the original liability and the recognition of a new financial liability if the modification represents a substantial modification. The Group considers that the terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid, is at least 10% different from the discounted present value of the remaining cash flow of the original financial liability.

Where modifications to financial liabilities are not substantial, the Group discounts the present value of the revised cash flows using the original effective interest rate. The difference between the revised present value and the carrying amount of the original financial liability is recognised in profit or loss at the date of the modification.

Trade and other receivables

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are generally due for settlement within 90 days and therefore are all classified as current. Trade receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant financing components, when they are recognised at fair value. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method. Details about the Group’s impairment policies and the calculation of the loss allowance are provided in policy ‘Impairment of financial assets’.

Trade and other payables

Trade payables are classified within current liabilities unless payment is not due within 12 months from the reporting period. They are initially recognised at fair value and are subsequently measured at amortised cost using the effective interest method.

Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any difference between the proceeds and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method, unless the effect of discounting is immaterial.

Borrowings are classified as current liabilities unless the companies within the Group have an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

Subsequent to initial recognition, interest-bearing bank overdrafts are carried at face value in view of their short-term maturities.

Ordinary shares issued by the Company Ordinary shares issued by the Company are classified as equity instruments.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Material accounting policies (continued)

Cash and cash equivalents and bank deposits

Cash and cash equivalents comprise cash in hand, demand deposits and short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts that are repayable on demand and form an integral part of the company’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows and are presented in current liabilities on the statement of financial position. Bank deposits that the directors do not consider a component of cash equivalents, are presented separately in the statement of financial position.

Provisions

Provisions are recognised when the Group’s companies have a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the directors’ best estimate of the expenditure required to settle the present obligation at the balance sheet date. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Provisions are not recognised for future operating losses.

Impairment of non-financial assets

All non-financial assets are tested for impairment except for investment property measured at fair value through profit or loss. At each balance sheet date, the carrying amount of assets is reviewed to determine whether there is any indication or objective evidence of impairment, as appropriate, and if any such indication or objective evidence exists, the recoverable amount of the asset is estimated. An impairment loss is the amount by which the carrying amount of an asset exceeds its recoverable amount.

The recoverable amount is the higher of fair value (which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date) less costs of disposal and value in use (which is the present value of the future cash flows expected to be derived, discounted using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset). Where the recoverable amount is less than the carrying amount, the carrying amount of the asset is reduced to its recoverable amount, as calculated. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units).

Impairment losses are recognised immediately in the income statement, unless the asset is carried at a revalued amount, in which case, the impairment loss is recognised in other comprehensive income to the extent that the impairment loss does not exceed the amount in the revaluation surplus for that asset.

An impairment loss recognised in a prior year is reversed if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised.

Where an impairment loss is subsequently reversed, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years.

Revenue recognition

Revenue includes all revenues from the ordinary business activities of the Group and is recorded net of value added tax. Revenue is measured based on the consideration specified in a contract with customer and excludes amounts collected on behalf of third parties. The Group recognizes revenue when (or as) it satisfies performance obligation by transferring control of a promised good or service to the customer.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Material accounting policies (continued)

Hospitality

Revenue from hospitality includes revenue from accommodation and other ancillary services. The substantial majority of services are provided to customers during their stays in the Group’s hotels, and, depending on the type of booking, some services, would generally be amalgamated into one ‘contract’ (for example, bed and breakfast).

Catering

The Group through its subsidiary, sells food and beverage products directly to customers through its own outlets. Revenue is recognized when control of the good has transferred, being at the point the customer purchases the goods at the outlet of the property. Customers do not have the right of return.

Dividends received

Dividends income from investment is recognised when the shareholders’ right to receive payment has been established.

Management services

The Company provides management services to its subsidiaries. Such services have been assessed to fall within scope of the IFRS 15 series guidance such that they are recognised as one performance obligation over time during the contract term.

Borrowing costs

Borrowing costs include the costs incurred in obtaining external financing. Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised from the time that expenditure for these assets and borrowing costs are being incurred and activities that are necessary to prepare these assets for their intended use or sale are in progress. Borrowing costs are capitalised until such time as the assets are substantially ready for their intended use or sale. Borrowing costs are suspended during extended periods in which active development is interrupted. All other borrowing costs are recognised as an expense in profit or loss in the period in which they are incurred.

Leases

Where the Group is a lessee, with the exception of short-term leases and leases of low value assets, the Group recognises a right-of-use asset and a corresponding liability at the date at which a leased asset is available for use by the Group. Further details on the Group’s accounting policy, and a summary of its leasing arrangements as a lessee is described in note 14.

Lease income from operating leases where the Group or the Company is a lessor is recognised in income on a straight-line basis over the lease term. Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and recognised as expense over the lease term on the same basis as lease income. The respective assets leased out under operating leases are included in investment property in the balance sheet.

Modifications to operating leases where the Group is the lessor are accounted for as a new lease from the effective date of the modification, considering any prepaid or accrued payments relating to the original lease as part of the lease payments for the new lease.

Taxation

Current and deferred tax is recognised in profit or loss, except when it relates to items recognised in other comprehensive income or directly in equity, in which case the current and deferred tax is also dealt with in other comprehensive income or in equity, as appropriate.

Current tax is based on the taxable result for the period. The taxable result for the period differs from the result as reported in profit or loss because it excludes items which are non-assessable or disallowed and it further excludes items that are taxable or deductible in other periods. It is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Material accounting policies (continued)

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax

bases used in the computation of taxable profit. However, deferred tax is not accounted for if it arises from the 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 substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is settled.

The deferred tax liability in relation to investment property that is measured at fair value is determined assuming the property will be recovered entirely through sale.

Deferred tax in relation to the revaluation of land and buildings is charged or credited to other comprehensive income (to the extent that the revaluation is recognised in other comprehensive income). For buildings, deferred tax is recognised on the basis that the tax will be recovered through use (i.e., the corporate rate of tax in Malta), whilst land is expected to be recovered through sale. Deferred income tax on the difference between the actual depreciation on the property and the equivalent depreciation based on the historical cost of the property is realised through the income statement.

Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets, including deferred tax assets for unused tax losses and unused tax credits carried forward, are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences (or the unused tax losses and unused tax credits) can be utilised to the period when the asset is realised or the liability is settled based on the tax rates that have been enacted by the balance sheet date. Deferred tax assets and liabilities are offset when the Group’s companies have a legally enforceable right to settle its current tax assets and liabilities on a net basis.

Foreign currencies

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Euro, which is the Company’s functional and presentation currency. Transactions denominated in currencies other than the functional currency are translated at the exchange rates ruling on the date of transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are re-translated to the functional currency at the exchange rate ruling at year-end. Exchange differences arising on the settlement and on the re-translation of monetary items are recognised in profit or loss. Non-monetary assets and liabilities denominated in currencies other than the functional currency that are measured at fair value are re-translated using the exchange rate ruling on the date the fair value was determined. Non-monetary assets and liabilities denominated in currencies other than the functional currency that are measured in terms of historical cost are not re-translated. Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period.

Related parties

Related parties are those persons or bodies of persons having relationships with the Company as defined in International Accounting Standard No. 24.

Government grants

Grants from government are recognised at their fair value when there is a reasonable assurance that the grant will be received, and the Group will comply with all attached conditions.

Government grants related to income are recognised in profit or loss over the periods necessary to match them with the related costs which they are intended to compensate, on a systematic basis. Such grants are presented as part of profit or loss.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Material accounting policies (continued)

Government grants related to assets are presented in the statement of financial position by deducting the grant in arriving at the carrying amount of the asset. The grant is recognised as income over the life of the depreciable asset by way of a reduced depreciation charge.

Reorganisation between group entities

Reorganisations between group entities under common control are accounted for using the reorganisation method of accounting. Under this method, assets and liabilities are incorporated at the predecessor carrying values, which are the carrying amounts of assets and liabilities of the acquired entity as recognised and measured in that entity’s financial statements before reorganisation. No goodwill arises in reorganisation accounting, and any difference between the consideration given and the aggregate book value of the assets and liabilities of the acquired entity, is included in equity. The financial statements incorporate the acquired entity’s full year results, including comparatives, as if the post-reorganisation structure was already in place at the commencement of the comparative period.

3.Critical accounting estimates and judgements

In preparing the financial statements, the Directors are required to make judgements, estimates and assumptions that affect reported income, expenses, assets, liabilities and disclosure of contingent assets and liabilities. Use of available information and application of judgement are inherent in the formation of estimates. Actual results in the future could differ from such estimates and the differences may be material to the financial statements. These estimates are reviewed on a regular basis and, if a change is needed, it is accounted for in the year the changes become known.

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 Group’s directors, except as follows, 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 IAS1 (revised).

Judgement

In the process of applying the Group’s accounting policies, the Directors have made the following judgement:

Recoverability of deferred tax assets

Deferred tax assets are recognised for all unused tax losses and capital allowances to the extent that it is probable that taxable profits will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon likely timing and level of future taxable profits.

Estimates

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing material adjustment to the carrying amount of assets and liabilities within the next financial year, are described below. Estimates underlying the Group and the Company’s use of the going concern assertion are described in note 1 to these financial statements.

Fair value of land and buildings and investment properties

The Group’s property, plant and equipment and investment property are measured at fair value. In estimating the fair value of these assets, the Group uses the market comparison approach which obtains market-observable data to the extent that it is available. The Group engages third party qualified valuers to perform the valuation.

Information about the valuation techniques and inputs used in determining the fair value of these assets are disclosed in note 11 to these financial statements.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Critical accounting estimates and judgements (continued)

Impairment on right of use assets and property, plant and equipment.

The directors have exercised significant judgement in assessing the carrying value of right-of-use (ROU) assets and the related property, plant and equipment (PPE). As part of the Group's ongoing impairment review process, a reassessment was performed during the year to evaluate the recoverable amount of these assets in light of updated operational and financial projections.

Based on the improved economic outlook and revised cash flow forecasts, management concluded that indicators of impairment identified in prior years no longer exist for certain ROU assets and associated PPE. As a result, the Group has reversed previously recognised impairment losses amounting to €1,026,316, reflecting the revised recoverable amount determined using a value-in-use approach.

This reversal of impairment is considered a significant estimate due to the inherent uncertainty involved in forecasting future cash flows and determining appropriate discount rates.

Expected credit loss allowances on loans and advances.

Credit loss allowance represent management’s best estimate of expected credit losses in the financial assets subject to IFRS 9 impairment requirements at the balance sheet date. In this respect, the directors are required to exercise judgement in defining what is considered to be a significant increase in credit risk and in making assumptions and estimates to incorporate relevant information about past events, current conditions and forecasts of economic conditions. The Group and the Company use the PD (Probability of default), LGD (Loss Given Default) and EAD (Exposure at Default) models in assessing loans and receivables and the provision matrix model for trade receivables to support the measurement of ECL. The resultant ECL under both methods were deemed to be immaterial, as disclosed in note 33.

Key assumptions used for value in use calculations

The Group tests whether goodwill and intellectual property have suffered any impairment on an annual basis or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. As at reporting date the Directors conducted an impairment review of the Group’s goodwill and intellectual property balances in accordance with IAS 36 ‘Impairment of Assets’.

The impairment assessment involved estimating the recoverable amount of the cash-generating units (CGUs) to which goodwill is allocated, using a value-in-use model based on future cash flow projections and discount rates. Due to weaker-than-expected performance and a reassessment of future growth assumptions, it was determined that the carrying value of goodwill and the intellectual property exceeded its recoverable amount.

As a result, an impairment charge of €630,000 was recognised in the year ended 31 December 2024. This impairment reflects a revised view of the CGU's expected performance and risk profile. Given the estimation uncertainty involved, including assumptions around future cash flows, growth rates and discount rates, the impairment of goodwill and intellectual property is considered a critical accounting estimate.

Lease term

In determining the lease term management considers all facts and circumstances that create an economic incentive to exercise extension option. Extension options are only included in lease term if the lease is reasonably certain to be extended.

4.Segment information and revenue from contracts with customers

4.1.Segment information

This note discloses information regarding the Group’s reportable segments. The Company is not required to and does not present segment information. However, it presents the information on its revenue from contracts with customers in note 4.2.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Segment information and revenue from contracts with customers (continued)

The standard requires a “management approach” under which segment information is presented on the same basis as that used for internal reporting purposes. The Group’s CODM, consisting of the board of directors and the chief executive officers and chief financial officer examine the Group’s performance namely from an industry/product perspective and has identified two reportable segments – hospitality and entertainment and other related operations.

The CODM assesses performance based on the measure of EBITDA (earnings before interest, tax, depreciation and amortisation) and revenue of the operating segments.

The Group is not required to report a measure of total assets and liabilities for each reportable segment since such amounts are not regularly provided to the CODM. Additionally, since all of the Group’s non-current assets are located in Malta, the geographical information that would have otherwise been required by IFRS 8, is not presented in these consolidated financial statements.

2024	Hospitality Operations	CateringOperations	IntellectualProperty	Unallocated	Total
	€	€	€	€	€
Revenue	4,621,366	5,814,034	290,702	-	10,726,102
Less: inter-segment sales		(563,117)	(290,702)		(853,819)
	4,621,366	5,250,917	-	-	9,872,283
Segment profit/ (loss)	790,213	1,978,921	(8,317)	(130,160)	2,630,657
Other operating income	55,303	-	-	-	55,303
Loss on sale of fixed assets	(246,267)	-	-	-	(246,267)
Group EBITDA	599,249	1,978,921	(8,317)	(130,160)	2,439,693
Depreciation and amortisation	(1,126,718)	(329,266)	-	-	(1,455,984)
Finance costs	(353,485)	(107,412)	(1,665)	(153,754)	(616,316)
Reversal of impairment of PPE	1,026,316	-	-	-	1,026,316
Impairment of intangible	-	(260,000)	(370,000)	-	(630,000)
Profit/(Loss) before tax	145,362	1,282,243	(379,982)	(283,914)	763,709
Tax charge	455,759	(126,277)	(8,349)	(22,043)	299,090
Profit/(Loss) for the year	601,121	1,155,966	(388,331)	(305,957)	1,062,799
Segment assets non-current	35,099,745	3,178,751	1,603,225	-	39,881,721
Segment assets current	1,303,473	3,524,055	52,267	16,719	4,896,514
	36,403,218	6,702,806	1,655,492	16,719	44,778,235
Segment liabilities non-current	4,995,236	521,790	-	12,000,000	17,517,026
Segment liabilities current	4,096,296	3,544,140	77,868	425,931	8,144,235
	9,091,532	4,065,930	77,868	12,425,931	25,661,261

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Segment information and revenue from contracts with customers (continued)

Segment information

2023	Hospitality Operations	CateringOperations	IntellectualProperty	Unallocated	Total
	€	€	€	€	€
Revenue	5,789,462	5,448,205	287,964	-	11,525,631
Less: inter-segment sales	(422,308)	(326,709)	(255,309)	-	(1,004,326)
	5,367,154	5,121,496	32,655	-	10,521,305
Segment profit/ (loss)	1,458,407	1,170,240	26,831	(163,002)	2,492,476
Other operating income	146,963	-	-	-	146,963
Loss on sale of fixed assets	(618,810)	-	-	-	(618,810)
Group EBITDA	986,560	1,170,240	26,831	(163,002)	2,020,629
Depreciation and amortisation	(1,239,470)	(246,985)	-	-	(1,486,455)
Finance costs	(401,475)	(56,710)	-	(480,000)	(938,185)
Modification loss on financial liability	(22,223)	-	-	-	(22,223)
Profit/(Loss) before tax	(676,608)	866,545	26,831	(643,002)	(426,234)
Tax charge	453,920	(148,045)	(3,316)	(9,948)	292,611
Profit/(Loss) for the year	(222,688)	718,500	23,515	(652,950)	(133,623)
Segment assets non-current	34,366,578	3,870,138	1,778,225	-	40,014,941
Segment assets current	1,259,414	1,882,547	95,644	5,312	3,242,917
	35,625,992	5,752,685	1,873,869	5,312	43,257,858
Segment liabilities non-current	6,315,122	478,573	-	12,000,000	18,793,695
Segment liabilities current	4,143,077	1,944,974	30,823	438,115	6,556,989
	10,458,199	2,423,547	30,823	12,438,115	25,350,684

4.2Revenue from contracts with customers

i.Disaggregation of revenue from contracts with customers

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Hospitality segment	4,621,366	5,367,154	-	-
Catering segment	5,250,917	5,121,496	-	-
Royalty fees	-	32,655	-	-
Dividends received from subsidiaries	-	-	492,000	492,000
	_________9,872,283_________	_________10,521,305_________	_________492,000_________	_________492,000_________

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Segment information and revenue from contracts with customers (continued)

ii.Liabilities related to contracts with customers

The Group has recognised the following liabilities relating to contracts with customers:

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Contract liabilities
Advance deposits – hospitality (note 21)	243,433	112,866	-	-
Total contract liabilities	_________243,433_________	_________112,866_________	_________-_________	_________-_________

No revenue recognised in the current year which relates to carried forward contract liabilities.

5.Other operating income

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Service charge	55,303	60,200	150,000	150,000
Rental income	-	86,763	-	-
	_________55,303_________	_________146,963_________	_________150,000_________	_________150,000 _________

6.Finance costs

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Interest on overdraft	43,776	33,726	-	-
Interest on bank borrowings	22,091	41,935	-	-
Other interest	85,053	37,742	-	-
Bond interest	133,810	480,000	480,000	480,000
Interest on lease liability	300,004	313,200	-	-
Bond issue costs	31,582	31,582	-	-
	_________616,316_________	_________938,185_________	_________480,000_________	_________480,000_________

As part of the ongoing development of property, plant and equipment, borrowing costs amounting to €346,190 have been capitalised during the financial year. The capitalised interest relates to qualifying assets under construction in accordance with IAS 23 Borrowing Costs. These costs have been included in the carrying amount of assets under development at the reporting date.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

7.Expenses by nature

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Direct costs	3,494,865	4,775,610	985	738
Wages and salaries	2,446,201	1,571,165	9,200	9,200
Directors’ remuneration	146,357	195,025	24,000	24,000
Utility expenses	379,529	425,534	-	-
Repairs and maintenance	408,557	504,059	-	-
Other expenses	366,117	557,436	88,828	123,334
	_________7,241,626_________	_________8,028,829_________	_________123,013_________	_________157,272_________

Profit before tax for the Group is stated after charging the following fees in relation to services provided by the external auditors of the Group.

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Total remuneration payable to the auditors for:
Audit services	66,753	25,150	25,150	25,150
Audit services charged by the component auditor	-	39,733	-	-
	_________66,753_________	_________64,883_________	_________25,150_________	_________25,150_________

8.Staff costs and employee information

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Wages and salaries (including directors)	2,446,201	1,639,111	33,200	33,200
Social security costs	146,357	127,079	-	-
	_________2,592,558_________	_________1,766,190_________	_________33,200_________	_________33,200_________

The average number of persons employed during the year, including directors, was made up as follows:

	Group	Group	Company	Company
	2024	2023	2024	2023
	Number	Number	Number	Number
Operations and administrations	130	124	-	-
Directors	2	2	2	2
	_________132_________	_________126_________	_________2_________	_________2_________

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

9.Reversal of impairment on non-financial instruments

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Reversal of impairment charge on ROU (note 14)	579,426	-	-	-
Reversal of impairment charge on PPE (note 11)	446,890	-		-
	_________1,026,316_________	_________-_________	_________-_________	_________-_________

10.Tax (credit)/expense

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Deferred tax credit	(399,629)	(306,740)	-	-
Current tax charge	100,539	14,129	13,645	1,655
	_________(299,090)_________	_________(292,611)_________	_________13,645_________	_________1,655_________

The tax expense and the tax charge using the statutory income tax rate of 35% are reconciled as follows:

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Profit/ (Loss) before taxation	763,709__________	(426,239)__________	38,987__________	4,728__________
Tax (credit)/ charge at 35%	267,298	(149,184)	13,645	1,655
Depreciation charges not deductible by way of capital allowances	(570,914)	(140,074)	-	-
Expenses disallowed for tax purposes	6,626	515	-	-
Additional allowable deductions	-	-	-	-
Fiscal consolidation adjustments	-	-	-	-
Income taxed at reduced rates	(2,100)	(3,868)	-	-
Tax effect of non-taxable income	-	-	-	-
Tax (credit)/expense	_________(299,090)_________	_________(292,611)_________	_________13,645_________	_________1,655_________

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

________________________________________________________________________________________________________________________________________

__________________________________________________________________________________________________________________________________________________

11.Property, Plant & Equipment

Group	Land &Buildings	MotorVehicles	Equipment	ElectricalInstallations	Furniture,& Fittings	ComputerEquipment	CateringEquipment	Other fixed	Total
	€	€	€	€	€	€	€	€	€
Cost/ Valuation
As at 1 January 2023	24,493,080	16,400	1,873,841	1,187,530	3,200,413	34,755	-	211,983	31,018,002
Acquired on businesscombinations	-	-	194,641	-	414,330	-	445,321	-	1,054,292
Additions	27,800		57,585		74,177	1,419	18,378	466	179,825
Disposals	-	-	(506,420)	(233,477)	(1,251,283)	-	-	-	(1,991,180)
As at 31 December 2023	24,520,880	16,400	1,619,647	954,053	2,437,637	36,174	463,699	212,449	30,260,939
Additions	-	-	50,099	10,677	42,180	3,975	-	-	106,931
Reversal of impairment	446,790	-	-	-	-	-	-	-	446,790
Transfer of PPE under dev	(110,420)	-	-	-	-	-	-	-	(110,420)
Disposals on demolition of buildings	(608,100)	-	-	-	-	-	-	-	(608,100)
As at 31 December 2024	24,249,150	16,400	1,669,746	964,730	2,479,817	40,149	463,699	212,449	30,096,140
Depreciation
As at 1 January 2023	1,927,799	12,500	830,573	669,532	1,455,091	25,063	-	121,119	5,041,677
Charge for the year	251,212	2,600	192,341	89,501	318,847	3,655	57,962	35,409	951,527
Released on disposal	-	-	(443,958)	(187,786)	(740,626)	-	-	-	(1,372,370)
As at 31 December 2023	2,179,011	15,100	578,956	571,247	1,033,312	28,718	57,962	156,528	4,620,834
Charge for the year	251,212	1,300	273,250	70,319	246,107	2,683	16,822	35,409	897,102
Released on disposal	(406,412)	-	-	-	-	-	-	-	(406,412)
As at 31 December 2024	2,023,811	16,400	852,206	641,566	1,279,419	31,401	74,784	191,937	5,111,524
Net Book Value
As at 31 December 2024	22,225,339	-	817,540	323,164	1,200,398	8,748	388,915	20,512	24,984,616
As at 31 December 2023	22,341,869	1,300	1,040,691	382,806	1,404,325	7,456	405,737	55,921	25,640,105

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Property, Plant & Equipment (continued)

Fair value of property

The Group is required to analyse non-financial assets carried at fair value by level of the fair value hierarchy within which, the recurring fair value measurements are categorised in their entirety (Level 1, 2 or 3). The different levels of the fair value hierarchy have been defined as fair value measurements using:

•Quoted prices (unadjusted) in active markets for identical assets (Level 1).

•Inputs other than quoted prices included within Level 1 that are observable for the asset, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).

•Inputs for the asset that are not based on observable market data (that is, unobservable inputs) (Level 3).

The Group’s land and buildings, within property, plant and equipment consists principally of hotel properties that are owned and managed by the Group’s subsidiaries. The Group’s investment property comprises mainly of two outlets and a guest house property that are held for long term rental yields or for capital appreciation or both and are measured at fair value on annual basis as required by IAS 40 (note 15).

All the recurring property fair value measurements at 31 December 2024 and 2023, as applicable, use significant unobservable inputs and are accordingly categorised within Level 3 of the fair valuation hierarchy.

The Group’s policy is to recognise transfers into and out of fair value hierarchy levels as of the beginning of the reporting period. There were no transfers between different levels of the fair value hierarchy during the current and preceding financial years.

A reconciliation from the opening balance to the closing balance of property for recurring fair value measurement categorised within level 3 of the fair value hierarchy, for the current and preceding financial years, is reflected in the table above and in note 15 for investment property.

Valuation techniques

The Group obtains independent valuations for its freehold land and buildings at least every five years. In addition to the revaluations carried out on hotel properties, the Group’s investment properties, which comprise two restaurant outlets and a guest house are measured by an independent valuer on an annual basis as required by IAS 40.

At the end of each reporting period, the directors update their assessment of the fair value of each property, taking into account the most recent independent valuations. The directors determine a property’s value within a range of reasonable fair value estimates. The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the directors consider information from a variety of sources.

Reversal of impairment

During the year, the Group performed a review of the carrying amounts of the right-of-use (ROU) assets (note 14) and related items of property, plant and equipment that had been subject to impairment in prior reporting years. Following this review, the Directors determined that the circumstances that led to the original impairment no longer existed.

As part of the impairment reversal assessment, the Directors carried out a discounted cash flow (DCF) analysis to estimate the recoverable amounts of the affected assets. The analysis reflected updated financial forecasts, improved operating performance, and management’s revised expectations regarding future cash flows and utilisation of the assets.

Based on this analysis, the Group concluded that the recoverable amount of the ROU assets and related PPE exceeded their carrying value, resulting in the reversal of previously recognised impairment losses of €1,026,316 (€579,426 related to ROU asset and €446,790 relating to items of PPE). The reversal has been recognised in the income statement for the year ended 31 December 2024.

The key assumptions used in the DCF model included a discount rate of 8.9% and forecast cash flows over a period of 5 years which is the period of the lease term.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Property, Plant & Equipment (continued)

Valuation processes

In 2024, the directors carried an assessment for those properties measured in accordance with the revaluation model under IAS 16 for property, plant and equipment and IAS 40 for Investment property, to determine whether a material shift in fair value has occurred.

Where management, through its assessment, concludes that the fair value of hotel properties differs materially from its carrying amount, and at least every 5 years, an independent valuation report prepared by third party qualified valuers, is performed. The report is based on information provided by the Group, publicly available information and the expert valuer’s knowledge and experience in the field. The information provided to the valuers, together with the assumptions and the valuation models used by the valuer, are reviewed by the directors. This includes a review of the fair value movement over the period. The directors consider whether the valuation report is appropriate in order to revalue the Group’s property.

The Group’s property (land and buildings together with all other integral assets) and investment property were last revalued on 31 December 2018 and reflected in the Group’s financial statements. The valuations were again obtained by the independent professional qualified valuer on 31 December 2024 and 2023. The land and buildings together with all other integral assets were valued by Perit Colin Zammit (a firm of architects and civil engineers). The external valuations of the property as at 31 December 2018 - 2024 as applicable, have been performed using the comparison market approach and Level 3 inputs of the fair valuation hierarchy.

In view of a limited number of properties with similar characteristics, the valuations have been performed using unobservable inputs. The significant inputs to the approach used is a sales price per square metre related to transactions in comparable properties located in proximity to the respective property, with adjustments for differences in the size and condition of the property. As at 31 December 2024, the resultant fair value did not differ materially from the book values of the property.

Information about fair value measurements using significant unobservable inputs (Level 3)

-Group	Fair value at		Valuation technique	Unobservable inputs	Relationship of unobservable inputs to fair value
-	31 Dec	31 Dec
-	2024	2023
-Description	€	€
Property, plant, and equipment
Hotel properties	20,864,158	21,221,241	Comparison Approach	Sales price per square metre	The higher the sales price per square metre the higher the fair value
				* €5,500
PPE under development	704,470	-
Investment propertiesLeased buildings	5,959,512	6,004,491	Comparison Approach	Sales price per square metre	The higher the sales price per square metre the higher the fair value
				* €5,800

*These inputs represent the range of inputs used in the external valuation carried out as at 31 December 2024 and 2023.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Property, Plant & Equipment (continued)

Historical cost basis of properties

If the cost model had been used, the carrying amounts of the revalued properties classified as property, plant and equipment would be €8,413,846 (2023: €8,578,645). The revalued amounts include a revaluation surplus net of tax of €14,799,920 before tax (2023: €14,799,920), which is not available for distribution to the shareholders of SP Finance P.L.C.

Use as collateral

Land and buildings held by the Group, with a carrying amount of €13.8m (2023: €13.8m) are pledged as security for non-current borrowings.

12.PPE under development

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
At 1 January	-	-	-	-
Transfer from PPE (note 11)	110,420
Additions	594,050	-	-	-
At 31 December	_________704,470_________	_________-_________	_________-_________	_________-_________

During the current financial year, one of the Group’s subsidiaries commenced the redevelopment of the Sliema hotel. In line with the applicable accounting standards, and specifically IAS 16 Property, Plant and Equipment, the costs incurred in relation to this project are being classified under "PPE under development" in line with IAS 16 Property, Plant and Equipment.

Accordingly, the carrying amount previously recognised under completed property, plant and equipment has been reclassified to a separate category PPE under development to reflect the ongoing nature of the development. These costs primarily include construction, architectural and professional fees and finance costs as well as other directly attributable expenses necessary to bring the asset to its intended use.

Capitalisation of costs will continue until the asset is ready for its intended operational use, at which point the balance will be transferred to the relevant PPE category and depreciation will commence.

13.Intangible assets

	Goodwill	IntellectualProperty	Total
	€	€	€
Group
At 1 January 2024	2,317,829	1,785,275	4,103,104
Impairment charge – Note	(455,000)	(175,000)	(630,000)
Additions	147,000	-	147,000
At 31 December 2024	__________2,009,829_________	__________1,610,275_________	__________3,620,104_________

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Intangible assets (continued)

Impairment Charge

The Group conducts an annual impairment review of goodwill and indefinite-lived intangible assets in accordance with IAS 36 Impairment of Assets, or more frequently when indicators of impairment arise. During the current year, the directors identified such indicators and carried out an impairment assessment of the cash-generating units (CGUs) within the catering division.

The recoverable amount was determined using a fair value less costs of disposal approach, applying an EBITDA multiple valuation methodology. This method involved applying a market-derived EBITDA multiple to the forecast earnings of the CGUs, adjusted for working capital requirements and non-operational assets.

The key assumptions used in the valuation included:

-EBITDA forecasts based on the most recent management-approved budgets and operational expectations

-EBITDA multiples derived from comparable companies in the sector, ranging between 4x – 7x, adjusted for entity-specific risk factors

-Minor adjustments for estimated selling costs, where applicable

As a result of this analysis, an impairment charge of €630,000 was recognised against goodwill and intangible assets associated with underperforming CGUs within the catering segment. The impairment has been recorded in the consolidated income statement for the year ended 31 December 2024

The valuation technique used involves significant judgement, particularly in the selection of appropriate multiples and the reliability of forecasted EBITDA, and is therefore subject to estimation uncertainty.

14.Leases

This note provides information for leases where the Group is a lessee. For leases where the Group is a lessor, see note 15 to these financial statements.

i.Amounts recognised in the balance sheet

The balance sheet shows the following amounts relating to leases:

	Group
	2024	2023
	€	€
Right-of-use assets
Land and buildings	2,115,536	1,895,911
Equipment	424,690	579,479
Furniture & fittings	183,524	224,308
	2,723,750	2,699,698
Lease liabilities
Current	947,285	602,202
Non-current	3,201,338	4,279,307
	4,148,623	4,881,509

During the current year end, the Directors reversed impairment of the Right-of-use (ROU) of €579,426. Refer to note 11 for methodology and process applied in assessing the carrying value as at 31 December 2024. As at 31 December 2024, the carrying value is recognised at its original cost on initial recognition less accumulated depreciation.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Leases (continued)

ii.Amounts recognised in the statement of profit or loss

The statement of profit or loss shows the following amounts relating to leases:

	Group
	2024	2023
	€	€
Depreciation charge of right-of-use assets
Land and buildings	353,754	353,754
Equipment	158,195	134,242
Furniture & fittings	46,932	46,932
	558,881	534,928
Reversal of impairment	(579,426)	-
Interest expense (included in finance cost – note 6)	300,004	313,200

The total cash outflow for leases in 2024 was €1,011,389 (2023: €648,821).

iii.The Group’s leasing activities and how these are accounted for

The Group leases land, buildings, equipment and furniture. The Group’s rental contracts are for fixed periods of 5 to 10 years, but may have extension options as described in (v) below.

Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.

Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

•Fixed payments (including in-substance fixed payments), less any lease incentives receivable;

•Variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the commencement date;

•Amounts expected to be payable by the Group under residual value guarantees;

•The exercise price of a purchase option if the Group is reasonably certain to exercise that option; and

•Payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Leases (continued)

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is the case for leases in the Group except for furniture leases and some equipment leases, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

To determine the incremental borrowing rate, the Group:

•Where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received; and

•Makes adjustments specific to the lease, e.g., term and security.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets are measured at cost comprising the following:

•The amount of the initial measurement of lease liability; and

•Any lease payments made at or before the commencement date less any lease incentives received.

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life. While the Group revalue its land and buildings that are presented within property, plant and equipment, it has chosen not to do so for the right-of-use land and buildings held by the Group.

Payments associated with short-term leases and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.

iv.Variable lease payments

The Group’s leases do not contain variable payment terms.

v.Extension and termination options

Extension and termination options are included in the Group’s property leases. These are used to maximise operational flexibility in terms of managing the assets used in the Group’s operations. The extension and termination options held are exercisable only by the Group and not by the respective lessor.

The Group has an option to extend the present leases of land and building for an additional 5 years, however, this has not been reflected in the right-of-use asset or in the lease liability since the Group is currently not reasonably certain that the option for this extension will be exercised. When the Group determines that it is reasonably certain that the option will be exercised, the right-of-use asset and corresponding lease liability will be adjusted for in the Group financial statements.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

15.Investment property

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
At the beginning of the year	6,004,491	6,004,491	-	-
Disposal on demolition of buildings	(44,579)	-	-	-
At the end of the year	_________5,959,912_________	_________6,004,491_________	_________-_________	_________-_________

Investment property is valued annually on 31 December at fair value comprising open market value approved by the directors on the basis of a professional valuation prepared by an independent architect. Fair value disclosures are included in note 11.

i.Amounts recognised in profit or loss for investment properties.

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Rental income from lease	-	22,500	-	-
	_________	_________	_________	_________

ii.Lease arrangements

The Group’s investment properties are leased to tenants with rentals payable on a monthly or quarterly basis. Lease payments for some contracts include fixed annual increases, but there are no variable lease payments that depend on an index. Lease arrangements were terminated in 2023, and the property is part of the ongoing construction in Sliema for a hotel and ancillary facilities.

16.Investment in subsidiary

Company	Shares in subsidiary	Total
	€	€

At 1 January 2024	19,097,783	19,097,783
Additions	-	-
At 31 December 2024	_________19,097,783_________	_________19,097,783_________

The investment in subsidiary is accounted for using the reorganisation method of accounting and therefore reflects the Net Asset Value of the pre-existing assets and liabilities acquired. Refer to accounting policies “Reorganisation between group entities” and note 28.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Investment in subsidiary (continued)

By virtue of a share purchase agreement signed on 23 February 2023, the Group acquired 100% of the share capital of Med Asia Operations Limited C-103605 for a consideration of €1 per share.

All subsidiary undertakings are included in the consolidation and are accounted for on the basis of direct equity interest and are stated at the pre organisation value less any accumulated impairment losses.

The Directors considered the recoverability of the investment in its subsidiary SP Investments taking into consideration the acquisition of operations and branding post year end as disclosed in note 1 and 33 to these financial statements and concluded that the recoverable amount exceeds the carrying value as at 31 December 2023 and therefore no impairment is required.

Shares in subsidiaries represent the following investments:

Company	Registered address	Principal Activity	2024% Holding	2023%Holding
SP Investments Limited	89, The Strand, Sliema	Holding Company	100%	100%
Sea Pebbles Limited	89, The Strand, Sliema	Hospitality operations	100%	100%
Pebbles Resort Limited	89, The Strand, Sliema	Hospitality operations	100%	100%
Med Asia Operations Ltd	89, The Strand, Sliema	Catering operations	100%	100%
Med Asia Branding Ltd (previously named Pebbles St. Julians Limited)	89, The Strand, Sliema	Holder of Intellectual Property	100%	100%

17.Financial assets at amortised costs

		Group	Group	Company	Company
		2024	2023	2024	2023
		€	€	€	€
Non-Current
Redeemable preference shares	Note i	-	-	12,000,000	12,000,000
		_________-_________	_________-_________	_________12,000,000_________	_________12,000,000_________

i.Redeemable preference shares

This investment represents 100% holding of the 4.1% non-voting, cumulative redeemable preference shares. These preference shares are redeemable within a period of up to 30 years of their allotment. The subsidiary has the right to redeem all or part of the said preference shares on any date it chooses within the aforesaid thirty-year period with the mutual consent of the Company. Provided that the directors of each of the issuer and the subsidiary have undertaken that the redemption of any of the preference shares is to occur subject to the proceeds thereof being held by the Company.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

18.Inventories

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Acquired on business combination	-	107,879	-	-
Food and beverage	111,017	9,005	-	-
	_________111,017_________	_________116,884_________	_________-_________	_________-_________

19.Trade and other receivables

		Group	Group	Company	Company
		2024	2023	2024	2023
		€	€	€	€
Non-Current
Amounts due by commonly controlled entities	Note ii	-_________	79,450_________	-_________	-_________
Current
Trade receivables		607,905	585,097	-	-
Other receivables		768,453	27,400	-	-
VAT refundable		21,858	29,316	-	-
Amounts owed by subsidiary	Note i	-	-	995,186	595,914
Amounts due by commonly controlled entities	Note ii	3,150,582	2,225,869	-	-
Prepayments and accrued income		36,713	109,850	1,872	1,872
		_________4,585,511_________	_________2,977,532_________	_________997,058_________	_________597,786_________

i.Amounts owed by subsidiary

Amounts owed by subsidiary are unsecured, interest free and repayable on demand.

The Group and the Company assess whether any loss allowance is required on its financial assets as set out in the accounting policies and note 33.

ii.Amounts due by commonly controlled entities

Amounts due by commonly controlled entities are unsecured and interest free. The balance is repayable in accordance with the signed repayment agreement in place.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

20.Deferred taxation

Deferred taxes are calculated on all temporary differences under the liability method using a principal tax rate of 35% / 10% (2023 – 35% / 10%). The movement in the deferred tax account is as follows:

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
At the beginning of the year	(789,403)	(1,096,143)	-	-
Recognised in profit or loss:
Movement in unabsorbed tax losses and capital allowances	450,048	235,480	-	-
Movement in excess of capital allowances over depreciation	(570)	(26,215)	-	-
Movement in effect of provisions	-	24,568	-	-
Amortisation on bond issue costs amortisation	11,053	11,053	-	-
Movement in effect of leases	(60,901)	61,854	-	-
At the end of the year	_________(389,773)_________	_________(789,403)_________	_________-_________	_________-_________
Effect recognised in:
Deferred tax movements recognised in profit & loss (note 10)	399,629	306,740	-	-
	_________399,629_________	_________306,740_________	_________-_________	_________-_________

The following amounts are shown in the balance sheet:

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Deferred tax assets
Unabsorbed tax losses and capital allowances	1,045,117	579,113	-	-
Effect of leases accounting under IFRS 16	702,733	763,634	-	-
Effect of provisions	39,961	39,961	-	-
	_________1,787,811_________	_________1,382,708_________	_________-_________	_________-_________
Deferred tax liabilities
Effect of excess of capital allowances over depreciation	131,858	148,384	-	-
Effect due to amortisation of bond issue costs	(47,902)	(58,955)	-	-
Effect due to revaluation of Land & Buildings	(1,880,400)	(1,880,400)	-	-
Effect due to revaluation of Investment Property	(381,140)	(381,140)	-	-
	_________(2,177,584)	_________(2,172,111)	_________-	_________-
	_________(389,773)_________	_________(789,403)_________	_________-_________	_________-_________

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Deferred taxation (continued)

Presented in the balance sheet as follows:

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Deferred tax asset	1,888,869	1,488,093	-	-
Deferred tax liability	(2,278,642)	(2,227,496)	-	-
	_________(389,773)_________	_________(789,403)_________	_________-_________	_________-_________

At 31 December 2024 the Group had a deferred tax asset of €444,060 (2023: €811,115) emanating from unabsorbed capital allowances. The crystallisation of this asset remains doubtful given the expected pattern of income in the future years and has therefore not been recognised.

21.Trade and other payables

		Group	Group	Company	Company
		2024	2023	2024	2023
		€	€	€	€
Trade payables		1,611,548	1,203,624	11,175	24,058
Indirect taxes		2,300,273	1,584,428	17,026	18,781
Amounts owed to commonly controlled entities and related entities	Note i	378,992	170,464	409,461	-
Accruals		751,590	934,693	359,318	382,083
Deferred income and advanced deposits		243,433	112,866	-	-
Amounts due to shareholders/ directors		29,896	-
		_________5,315,732_________	_________4,006,075_________	_________796,980_________	_________424,922_________

i.Amounts due to commonly controlled entities and related entities

Amounts due to commonly controlled entities and related entities are unsecured, interest free and repayable on demand.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

22.Current income tax (liability)/ asset

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Balance as the beginning of the year	(129,723)	(115,594)	(1,655)	-
Provision for the year	(100,541)	(14,129)	(13,645)	(1,655)
Balance at the end of the year	_________(230,264)_________	_________(129,723)_________	_________(15,300)_________	_________(1,655)_________
Balance sheet allocation
Asset	147,808	-	-	-
Liability	(378,072)	(129,723)	(15,300)	(1,655)
	_________(230,264)_________	_________(129,723)_________	_________(15,300)_________	_________(1,655)_________

23.Borrowings

		Group	Group	Company	Company
		2024	2023	2024	2023
		€	€	€	€
Falling due within a year
Bank overdrafts	Note i	930,818	877,195	-	-
Bank borrowings	Note ii	405,657	641,790	-	-
Third party borrowings	Note iii	166,671	300,004	-	-
		_________1,503,146_________	_________1,818,989_________	_________-_________	_________-_________
Falling due after more than one year
Bank borrowings	Note ii	-	405,329	-	-
Bonds	Note iv	11,863,145	11,831,563	12,000,000	12,000,000
Third party borrowings	Note iii	173,901	-	-	-
		_________12,037,046	_________12,236,892	_________12,000,000	_________12,000,000
Total borrowings		_________13,540,192_________	_________14,055,881_________	_________12,000,000_________	_________12,000,000_________

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Borrowings (continued)

The debts securities are disclosed at the value of the proceeds less the net book amount of the transaction costs as follows:

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Face value of bonds
Bonds	12,000,000_________	12,000,000_________	12,000,000_________	12,000,000_________
Issue costs	(315,822)	(315,822)	-	-
Accumulated amortisation	178,965	147,387	-	-
Net book amount	_________(136,857)	_________(168,435)	_________-	_________-
Amortised cost	_________11,863,143_________	_________11,831,565_________	_________12,000,000_________	_________12,000,000_________

(i)The Group’s bank overdraft facilities as at 31st December 2024 amounted to €1,000,000 (2023: €1,000,000). The Company does not have a facility. The Group’s overdrafts are secured by general hypothecs and special hypothecs over the Group’s assets, guarantees over related party assets and by pledges over various insurance policies.

(ii)The Group’s bank loan facilities are secured by general hypothecs and special hypothecs over the Group’s assets, guarantees over related party assets and by a guarantee provided by Malta Development Bank (MDB).

(iii)The third-party loan relates to capital expenditure which is being repaid in quarterly instalments of €100,000. This loan is unsecured and interest-free.

(iv)By virtue of the Prospectus dated 8 April 2019, SP Finance p.l.c. issued for subscription by the general public 120,000 secured bonds having a nominal value of €100 each for an aggregate principal amount of €12,000,000. These bonds have been issued at par.

The bonds are subject to a fixed interest rate of 4% per annum payable on the 3 May of each year up to redemption date. All bonds, unless previously purchased and cancelled, will be redeemed on 3 May 2029.

The bonds are subject to the terms and conditions in the prospectus and are listed on the Malta Stock Exchange. The quoted market price as at 31st December 2024 for the 4% secured Bonds was €98 (2023: €99). The directors are of the opinion that this price represents the fair value of these liabilities; as at balance sheet date, the fair value of the bonds therefore amounts to €11,760,000 (2023: €11,880,000). The fair value calculation is classified within Level 1 of IFRS 13’s fair value hierarchy.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Borrowings (continued)

	Group	Group	Company	Company
	2024	2023	2024	2023
Interest rate exposure:	€	€	€	€
At floating rates	1,336,475	1,924,314	-	-
At fixed rates	11,863,145	11,831,563	12,000,000	12,000,000
Interest free	340,572	300,004	-	-
Total borrowings	_________13,540,192_________	_________14,055,881_________	_________12,000,000_________	_________12,000,000_________

	Group	Group	Company	Company
	2024	2023	2024	2023
Weighted average effective interest rates	%	%	%	%
At the balance sheet date:
Bank overdrafts	5.85	5.85	-	-
Bank loans	3.10	3.10	-	-
Bond	4.00	4.00	4.00	4.00

	Group	Group	Company	Company
	2024	2023	2024	2023
Maturity of long-term borrowings:	€	€	€	€
Between 2 and 5 years	173,901	242,519	-	-
Over 5 years	11,863,145	11,994,373	12,000,000	12,000,000
	_________12,037,046_________	_________12,236,892_________	_________12,000,000_________	_________12,000,000_________

Collateral granted in favour of the security trustee

Security for the fulfilment of the Company’s obligations in term of the bond issue is to grant in favour of the security trustee for the benefit of the bond holders, a first ranking special hypothec over the security property for the sum of €12,000,000 and interest thereon and charges in connection therewith, to be constituted by the Guarantor in favour of the security trustee for the benefit of the beneficiaries by virtue of the Security Trust Deed dated 24 April 2019.

Compliance with loan covenants

The Group has complied with the financial covenants of its bank loans during both periods presented.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

24.Share capital and share premium

Details of share capital for Company as at 31 December 2024	Issues shares	SharePremium
	€	€
Authorised, issued and fully paid up
250,000 Ordinary shares of €1 each 100% paid up	250,000	-
Shares issues at premium on capital re-organisation (Note 28)	-	17,750,000
	_________250,000_________	_________17,750,000_________

Details of share capital for Company as at 31 December 2024	Issues shares	SharePremium
	€	€
Authorised, issued and fully paid up
250,000 Ordinary shares of €1 each 100% paid up	250,000	-
Shares issues at premium on capital re-organisation (Note 28)	-	17,750,000
	_________250,000_________	_________17,750,000_________

25.Revaluation reserve

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
At the beginning of the year	14,799,920	14,799,920	-	-
At the end of the year	_________14,799,920_________	_________14,799,920_________	_________-_________	_________-_________

The revaluation reserve was created on the revaluation of the Group’s property plant and equipment. The revaluation reserve is a non-distributable reserve.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

26.Fair value gain reserve

This reserve represents changes in fair value, net of deferred tax, on the investment properties held by the Group for long-term rental yields. Movement in fair values are presented in profit or loss as part of ‘fair value gains on investment property’. Information about the valuation process of the investment property is disclosed in note 11 to these financial statements.

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
At the beginning of the year	2,938,013	2,938,013	-	-
At the end of the year	_________2,938,013_________	_________2,938,013_________	_________-_________	_________-_________

This reserve is a non-distributable reserve.

27.Other reserves

	Capital RedemptionReserve	CapitalisationReserve	Total
	€	€	€
Group
At 1 January 2023	17,531,725	(4,614,814)	12,916,911
At 31 December 2023	__________17,531,725	__________(4,614,814)	__________12,916,911
Capitalisation of loans	-	(147,001)	(147,001)
At 31 December 2024	__________17,531,725_________	__________(4,761,815)_________	__________12,769,910_________

Capital Redemption

Reserve

Total

€

Company

At 1 January 2023

1,098,983

At 31 December 2023

__________

1,098,983

__________

1,098,983

At 31 December 2024

__________

1,098,983

_________

__________

1,098,983

_________

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Other reserves (continued)

Capital Redemption Reserve

Reserve created upon reorganisation of Group. Refer to note 28 “Group reorganisation” for details of creation of this reserve.

Capitalisation Reserve

This amount represents contribution by related parties outside the Group.

On 1 April 2023, the Group’s subsidiaries acquired the ‘Med Asia’ brand and the Catering business from a related party outside the Group. By virtue of signed agreement between the subsidiary and the related party outside the group, it was agreed that €4.9m of the amounts payable created upon acquisition of the brand and the various catering businesses will be payable at the discretion of the Group.

28.Group Reorganisation

On 28 November 2018, the Company acquired 100% of the share capital of SP Investments Limited through an exchange of shares for a consideration of 10,000 100% paid up Ordinary shares of €1 each with a premium of €17,750,000. SP Investment Limited’s shareholders prior to this transaction became shareholders of the Company, and this reorganisation has been recognised in accordance with the accounting policy applicable to such transactions.

The following table summarises the consideration paid by the Company and the amounts of assets acquired, and liabilities assumed, that were recognised in the consolidated statement of financial position as at 28 November 2018, being the date of the legal reorganisation:

Group
	2024	2023
Consideration	€	€
As at the beginning of the year	17,531,725	17,531,725
	__________	__________
Other reserves created upon reorganisation	17,531,725	17,531,725
	__________	__________

Company

Consideration

€

Non-cash consideration

17,998,800

Recognised amounts of identifiable assets acquired, and liabilities assumed

Net assets acquired

(19,097,783)

Equity adjustments:

Other reserves created upon reorganisation

(1,098,983)

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

29.Cash and cash equivalents

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Cash at bank and in hand	52,178	148,501	14,756	2,983
Overdraft	(930,818)	(877,195)	-	-
At the end of the year	_________(878,640)_________	_________(728,694)_________	_________14,756_________	_________2,983_________

The balances of cash and cash equivalents are available for use by the Group and the Company in their entirety.

30.Related party transactions

During the course of the year the Group and the Company entered into transactions with related parties. These transactions have been carried at arm's length. The related party transactions in question were:

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Revenue
Subsidiaries
Service charge	-	-	150,000	150,000
Dividends received	-	-	492,000	492,000
Commonly controlled entities
Revenue	-	117,479	-	-
Royalties	-	32,652	-	-
Other operating income
Commonly controlled entities
Rental income	-	61,500	-	-
Service fee	28,728	94,623	-	-
Other operating expenses
Commonly controlled entities
Direct costs	-	117,882	-	-
Non-current assets
Property, plant and equipment
Construction works	200,000	-	-	-
Business Combination transactions
Consideration for acquisition of catering business and trade marks	-	5,264,815	-	-

Key management personnel include the board of directors. Key management compensation, consisting of directors’ remuneration, has been disclosed in note 8 to the financial statements.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

31.Commitments

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Authorised but not contracted	4,122,846	-	-	-
Contracted but nor provided for	2,673,000	180,000	-	-

Financing

The contracted commitment is with a related party outside the Group. The value of works carried will be financed through a bank loan granted after year end.

32.Contingent liabilities

As at 31 December 2024 the Group provided general and special hypothecs over the Group’s immovable property to the amount of €1,390,000 (2023: €1,390,000) to various related undertakings outside the Group.

The Group is engaged in legal action in respect of a number of claims against it. The Group is restricting those claims and in some instances is issuing counterclaims. No provision has been made in these financial statements in respect of these actions.

33.Financial risk management

The Group’s activities potentially expose it to a variety of financial risks on its financial assets and financial liabilities. The key components of financial risks to the Group are: market risk (namely, cash flow interest rate risk and fair value interest rate risk), credit risk and liquidity risk. The Group’s overall risk management focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

Market risk

Market risk is the risk that changes in market prices, such as interest rates, and quoted prices, will affect the Group’s income or financial position. The objective of the Group’s market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

Cash flow and fair value interest rate risk

The Group’s interest rate risk arises on its interest-bearing borrowings and deposits held with banks. Borrowings issued at variable rates, comprising bank borrowings, expose the Group to cash flow interest rate risk. The Group’s bank borrowings are subject to an interest rate that varies according to revisions made to the Bank’s Base Rate and three-month Euribor. The directors monitor the level of floating rate borrowings as a measure of cash flow risk taken on.

The Group has adopted a cautious risk policy with regards to interest rate fluctuation through the issue of a €12,000,000 ten-year bond incurring interest of 4%. Debt securities issued at fixed rates and bank deposits expose the Group to fair value interest rate risk.

Bank deposits and borrowings are carried at amortised cost. Accordingly, a shift in interest rates would not have an impact on profit or loss.

A shift in interest rates on borrowings at variable rates will however have an impact on profit or loss. The directors consider the potential impact on the Group’s profit or loss of a defined interest rate shift of 1.5%, that is reasonably possible, at the end of the reporting period keeping all other variables constant, to amount to +/- €20,047 (2023: +/- €28,900).

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Financial risk management (continued)

Credit risk

Credit risk arises from cash and cash equivalents, deposits with banks and credit risk exposures to customers, including outstanding receivables and committed transactions. The carrying amount of the financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Carrying amounts
Financial assets at amortised cost	-	-	12,000,000	12,000,000
Amounts due by commonly controlled entity	3,150,582	2,305,319	-	-
Trade and other receivables	1,434,929	751,663	997,058	597,786
Cash at bank and in hand	52,178	148,501	14,756	2,983
	_________4,637,689_________	_________3,205,483_________	_________13,011,814_________	_________12,600,769_________

Financial assets at amortised cost comprise of investment in preference shares in subsidiary company as described in note 17. These loans are secured and the failure of the related undertaking could have an impact on the Company’s results.

The Group’s Companies bank only with local financial institutions with high quality standing or rating. The Group has no concentration of credit risk that could materially impact on the sustainability of its operations. However, in common with similar business concerns, the failure of specific large customers could have a material impact on the Group’s results.

The Group assesses the credit quality of its customers taking into account financial position, past experience and other factors. Standard credit terms are in place for individual clients, however, wherever possible, new corporate customers are analysed individually for creditworthiness before the Group’s standard payment and service delivery terms and conditions are offered. The Group’s review includes external credit worthiness databases when available.

Impairment of financial assets

The Group and the Company have three types of financial assets that are subject to the expected credit loss model:

•Trade receivables and accrued income relating to the provision of services;

•Financial assets at amortised cost for Company, comprising investment in preference shares in subsidiary undertaking;

•Other financial assets at amortised costs comprising loans receivable from related parties outside the group; and

•Cash and cash equivalents.

Trade receivables and accrued income

The Group applies the IFRS 9 simplified approach to measure expected credit losses which uses a lifetime expected loss allowance for all trade receivables and accrued income.

To measure the expected credit losses, trade receivables and accrued income have been grouped based on shared credit risk characteristics and the days past due. The Group has concluded that the expected loss rates for trade receivables are a reasonable approximation of the loss rates for the accrued income since they have substantially the same characteristics.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Financial risk management (continued)

The expected loss rates are based on the payment profiles of sales over a period of 12 months before 31 December 2024 and 31 December 2023 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 ability of the customers to settle the receivables.

Based on the assessment carried out in accordance with the above methodology, the identified expected credit loss allowance on trade receivables and accrued income, was deemed immaterial. The movement in loss allowances as at 31 December 2024 and 2023 is also deemed immaterial by management. On this basis, the information pertaining to loss rates and loss allowances in the Group’s provisions matrix, which would have otherwise been required by IFRS 7, is not presented as at 31 December 2024 and 2023.

Trade receivables and accrued income are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group, and a failure to make contractual payments for a period of greater than 1 year past due.

Financial assets at amortised costs

As disclosed above, the Company’s main exposures are a loan to the Company’s subsidiary, representing the advance of the bonds raised by the Company invested as redeemable preference shares. The Company’s management monitor intra-group credit exposures on a regular basis and ensure timely performance of these assets in the context of its overall liquidity management. The loss allowances for these financial assets are based on assumptions about risk of default and expected loss rates. The Company’s management uses judgement in making these assumptions, based on the counterparty’s past history, existing market conditions, as well as forward-looking estimates at the end of each reporting period.

The Directors assessed recoverability of these balances by leveraging on cash flow projections prepared by the respective counterparties. The cash flow projections, which stretch over the term of the loan, consider whether the counterparty could meet its obligations under different, forward-looking scenarios.

After taking into account the results of their assessment, together with the fact that the counterparty has met its obligations as and when due, the resultant impairment charge required was deemed immaterial, and accordingly is not recognised in these financial statements.

Other financial assets at amortised cost

The Group’s other financial assets at amortised cost which are subject to IFRS 9’s general impairment model comprise of loan advanced to a related undertaking outside the Group.

The Group monitors intra-group credit exposures at individual entity level on a regular basis and ensure timely performance of these assets in the context of its overall liquidity management. The loss allowances for these financial assets are based on assumptions about risk of default and expected loss rates. The Company’s management uses judgement in making these assumptions, based on the counterparty’s past history, existing market conditions, as well as forward-looking estimates at the end of each reporting period.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Financial risk management (continued)

Where the counterparties’ financial position suggests that it does not have sufficient liquid assets at balance sheet date to repay the loan if this is demanded, the probability of default is deemed to be 100%. Given that the related party relationships of such balances are between entities under common control, the directors assess the loss given default of the balance by analysing recovery strategies that the Group would allow, taking cognisance of such related party relationship. These recovery strategies typically include a projection of the net cash flows emanating from allowing the counterparty to operate, incorporating multiple forward-looking scenarios that take into account all reasonable and supportable information available to the Group. The assessment also considered the possibility of refinancing and the value of properties owned by the Group with specific emphasis on the properties held by virtue of the Security Trust Deed dated 24 April 2019. In making this analysis, the Group also takes into account any support of shareholders in place.

After making this analysis, the directors concluded that the resulting loss-given-default rates are low, such that when applied to the PD x LGD x EAD methodology to calculate the IFRS 9 ECL allowance, the resulting impairment charge required was deemed to be immaterial.

Cash at bank

The Group’s cash is placed with reputable financial institutions, such that management does not expect any institution to fail to meet repayments of amounts held in the name of the companies within the Group. While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment loss was insignificant.

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 interest-bearing borrowings disclosed in note 23. Prudent liquidity risk management includes maintaining sufficient cash and committed credit lines to ensure the availability of an adequate amount of funding to meeting the Group’s obligations.

The directors monitor liquidity risk by means of cash flow forecasts on the basis of expected cash flows over a twelve-month period, in order to ensure that adequate funding is in place in order for the Group to be in a position to meet its commitments as and when they will fall due. In response to the possible future liquidity constraints, the Directors and the Group’s senior management undertook a number of measures. The impact of these measures on the consolidated financial statements include:

-Negotiations with a local bank to finance a portion of the Sliema project have been completed with a sanction letter issued on 25 April 2025.

-A payment program with certain privileged creditors is currently being finalized and based on informal indications, the terms are not unduly onerous on the Group.

-Repayments by related companies outside the Group depends on the conclusion of promises of sale of properties that are already in place.

Accordingly, based on the outcome of the cash flow projections in a prudent scenario as referred to, the Directors consider the going concern assumption in the preparation of the Group’s financial; statements as appropriate as at the date of authorisation for issue of the 2024 financial statements.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Financial risk management (continued)

The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the end of the reporting period to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

	Group	Group	Company	Company
	2024	2023	2024	2023
	€	€	€	€
Within one year
Trade and other payables	5,315,732	4,006,075	424,922	424,922
Bank overdraft	930,818	877,195	-	-
Bank borrowings	515,281	665,184	-	-
Third party borrowings	166,671	300,000	-	-
Bonds	480,000	480,000	480,000	480,000
Lease liability	1,184,486	1,011,389	-	-
	_________8,592,988_________	_________7,339,843_________	_________904,922_________	_________904,922_________
Between 2 – 5 years
Bank borrowings	-	409,775	-	-
Third party borrowings	173,901	-	-	-
Bonds	1,920,000	1,920,000	1,920,000	1,920,000
Lease liabilities	3,590,267	4,425,820	-	-
	_________5,684,168_________	_________6,755,595_________	_________1,920,000________	_________1,920,000________
Over 5 years
Bonds	12,000,000	12,480,000	12,000,000	12,480,000
Lease liabilities	15,600	364,533	-	-
	________12,015,600________	________12,844,533________	_________12,000,000_________	_________12,480,000_________
Total	26,292,756_________	26,939,971_________	14,824,922_________	15,304,922_________

The amount of trade and other payables, for both the Group and the Company, classified as repayable within one year in the table above, are contractually repayable on demand.

Financial instruments not measured at fair value

At 31 December 2024 and 31 December 2023, the carrying amounts of payables, receivables and short-term borrowings approximated their fair values due to the short-term maturities of these assets and liabilities. The fair values of long-term borrowings, together with the related fair value disclosures, are presented in note 23.

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

34.Capital management

The Group’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may issue new shares or adjust the amount of dividends paid to shareholders.

The capital structure of the Group consists of net debt (borrowings as presented in note 23 after deducting cash and bank balances, presented in note 29) and equity of the Group (comprising issued capital, reserves and retained earnings as presented in the Statement of Changes in Equity).

The Group monitors the capital structure on a monthly basis by monitoring the balances of assets and liabilities.

35.Cash flow information

Reconciliation of liabilities arising from financing activities

The table below details changes in the Company’s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Statement of Cash Flows as cash flows from financing activities.

Group	As atDecember2023	Cashflows	OtherLiabilityRelatedChanges	As at 31December2024
	€	€	€	€
Bank borrowings	1,047,119	(641,463)	-	405,657
Third party loans	300,004	40,568	-	340,572
Bonds	11,831,563	-	31,582	11,863,145
Lease liability	4,881,509	(1,032,890)	300,004	4,148,623
	_________18,060,195_________	_________(1,633,785)_________	_________331,586_________	_________16,757,997_________

Group	As atDecember2022	Cashflows	OtherLiabilityRelatedChanges	As at 31December2023
	€	€	€	€
Bank borrowings	1,668,664	(621,545)	-	1,047,119
Third party loans	633,334	(333,330)	-	300,004
Bonds	11,799,981	-	31,582	11,831,563
Lease liability	4,691,043	(671,403)	861,869	4,881,509
	_________18,793,022_________	_________(1,626,278)_________	_________893,451_________	_________18,060,195_________

SP FINANCE P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

_____________________________________________________________________________________________

______________________________________________________________________________________________________

Cash flow information (continued)

Company

As at 31

December

2024

Cashflows

Other

Liability

changes

As at 31

December

2024

€

Bonds

12,000,000

_________

12,000,000

_________

12,000,000

_________

Company

As at 31

December

2023

Cashflows

Other

Liability

changes

As at 31

December

2023

€

Bonds

12,000,000

_________

12,000,000

_________

12,000,000

_________

36.Statutory information

SP Finance P.L.C. is a limited liability Company and is incorporated in Malta.

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF

SP FINANCE P.L.C.

______________________________________________________________________________________________________

Report on the Audit of the Financial Statements

Opinion

We have audited the consolidated and stand-alone parent company financial statements of SP Finance p.l.c. set out on pages 10 to 57 which comprise the consolidated and parent company statement of financial position as at 31 December 2024, and the consolidated and parent company statement of profit and loss and comprehensive income, changes in equity and cashflow for the year then ended including a summary of significant accounting policies.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and the Company as at 31 December 2024, and of their financial performance and their cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU and have been prepared in accordance with the requirements of the Companies Act (Cap. 386), enacted in Malta.

Our opinion is consistent with our additional report to the audit committee.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group and the Parent Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in accordance with the Accountancy Profession (Code of Ethics for Warrant Holders) Directive issued in terms of the Accountancy Profession Act (Cap. 281) in Malta, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code.

To the best of our knowledge and belief, we declare that non-audit services that we have provided to the Group and the Company are in accordance with the applicable law and regulations in Malta and that we have not provided non-audit services that are prohibited under Article 18A of the Accountancy Profession Act (Cap. 281).

The non-audit services that we have provided to the Group and the Company are disclosed in note 7 to the financial statements.

Our Audit Approach

Overview

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we considered where the directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF

SP FINANCE P.L.C.

______________________________________________________________________________________________________

Materiality

The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for materiality as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedure and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

Materiality

€245,000

How we determined it

2.5% of turnover

Rationale for the materiality benchmark applied

We selected turnover as the materiality benchmark and saw the effect on the Group’s results. In our view, the turnover of the Group is considered the most appropriate measure of the success of the Group in generating enough profits to service its annual obligations towards the bond holders. We chose 2.5%, which is within the range of acceptable quantitative materiality thresholds in auditing standards.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit above €12,250 as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Going concern assessment

Risk Description

Management is required to assess the Group’s ability to continue as a going concern for a period of at least twelve months from the date of approval of the financial statements. This involves making assumptions regarding future cash flows, the timing of the recoverability of receivables, the availability of funding, and agreements with privileged creditors.

Given the significant judgment involved and the potential impact on the basis of preparation of the financial statements, we considered going concern to be a key audit matter.

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF

SP FINANCE P.L.C.

______________________________________________________________________________________________________

Going concern assessment

How the scope of our audit responded to the risk

At the reporting date, the Group had net current liabilities of €3.2 million and significant receivables from related parties amounting to €3.15 million. In addition, the Group had outstanding obligations to privileged creditors of €2.3 million and was reliant on securing external financing of €8.3 million to complete the Sliema project. These factors, when considered collectively, gave rise to underlying uncertainty as to the likelihood of the Group’s ability to continue as a going concern and meet its obligations as they fall due, and we therefore, considered going concern to be a key audit matter.

The directors prepared prudent cash flow forecasts covering the period through to December 2026. They also obtained a sanction letter from Bank of Valletta p.l.c., confirming the approval of a loan facility amounting to €8.3 million to finance the Sliema project. Furthermore, they secured confirmation regarding the recoverability of the related party receivable and reached arrangements with privileged creditors for the settlement of the majority of outstanding balances.

Our audit procedures in relation to the going concern assessment included:

-Obtaining and evaluating management’s cash flow forecasts covering the going concern assessment period and assessing the key assumptions, particularly those relating to the timing and collection of receivables from related parties and the projected costs and funding requirements for the Sliema project;

-Assessing the recoverability of related party receivables, including discussions with management regarding the financial position of counterparties and review of supporting documentation;

-Reviewing the sanction letter obtained on 25th April 2025 with Bank of Valletta p.l.c. to assess the likelihood and timing of securing the €8.3 million in external financing;

-Assessing the completeness of obligations to privileged creditors and the terms of repayment;

-Assessed cash liquidity for the interest on the bond issued which is due in May 2025.

-Considering subsequent events and post-year-end performance, including the Group’s ability to generate operating cash flows and meet short-term liabilities;

-Evaluating the adequacy and appropriateness of the disclosures in the financial statements relating to going concern.

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF

SP FINANCE P.L.C.

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Fair valuation of property, plant and equipment, investment property and right-of-use asset

Risk Description

The Group’s land and buildings classified as property, plant and equipment, investment property and right-of-use asset which are being further described in Notes 11,14 and 15 to the accompanying financial statements, account for 75% of total assets as at 31 December 2024. Land and buildings and right-of-use asset are measured at fair value at the date of revaluation, less any subsequent accumulated depreciation. Investment properties are stated at fair value, which reflects market conditions at the reporting date.

Due to the significance of the balances and the estimation uncertainty involved in the fair valuation of properties, we have considered the fair valuation of land and buildings classified as property, plant and equipment, investment properties and right-of-use asset as a key audit matter.

Valuation of property, plant and equipment, investment property and right-of-use asset

How the scope of our audit responded to the risk

The Group’s property comprises 2 hotels; one owned which is current being constructed to a larger hotel and one leased from third parties and operated by the Group. The valuation of the Group’s property portfolio is inherently subjective due to, among other factors, the individual nature of each property, its location and the expected future returns.

Management have carried out a re-assessment, using a professional valuer, for its owned properties classified as investment property amounting to €6m and classified within property, plant and equipment amounting to €21m, to determine whether a material shift in fair value would have occurred during 2024. The valuation reports by the third-party valuer as at 31 December 2023 and 2024 are computed using the comparison market approach and Level 3 inputs of the fair valuation hierarchy.

The second hotel operated by the Group is held under an operating lease and therefore classified as Right-of-use asset (ROU). The ROU asset amounting to €2.7m and its improvements and movables amounting to an additional €3.2m classified within property, plant and equipment were assessed using discounted cashflows (DCF) which resulted in a reversal of an impairment of €1M. The valuation of property at fair value is highly dependent on estimates and assumptions including, the capitalisation rate, operating results and respective growth rate under this income capitalisation approach.

-Considered the objectivity, independence, competence and capabilities of the external valuer.

-Reviewed the methodologies used by the external valuer and by the directors to estimate the fair value.

-Considered the appropriateness of the fair values estimated by the external valuers based on our knowledge of the industry.

-Assessed the key inputs in the calculations of the DCF presented such as revenue growth and discount rate, by reference to management’s forecasts, data external to the Group and our own expertise.

-Testing the mathematical accuracy of the calculations derived from each model.

-Assessing the adequacy and appropriateness of the related disclosures in the financial statements in accordance with the applicable financial reporting framework.

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF

SP FINANCE P.L.C.

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Fair valuation of intangible assets

Risk Description

The Group’s intangible assets, including goodwill and intellectual property, are significant to the consolidated financial statements. At 31 December 2024, the carrying amount of intangible assets was €3.6 million, representing 8% of total assets.

Valuation and impairment of intangible assets

How the scope of our audit responded to the risk

The valuation of intangible assets requires management to make significant judgments and estimates, particularly in relation to:

-The identification of cash-generating units (CGUs);

-Future cash flow projections;

-The selection of appropriate EBITDA multiples;

-The assessment of useful lives.

Given the inherent uncertainty involved in forecasting future cash flows and the sensitivity of the valuation to changes in key assumptions, we considered this area to be a key audit matter. As a result of this analysis, an impairment charge of €630K was recognised against goodwill and intangible assets associated with underperforming CGUs within the catering segment.

Our procedures in relation to the valuation and impairment assessment of intangible assets included:

-Understanding and evaluating management’s process for identifying CGUs and performing impairment assessments;

-Testing the mathematical accuracy of the discounted cash flow models used by management;

-Evaluating the reasonableness of key assumptions, used in EBITDA multiples and assessment of useful lives by comparing them to historical multiples used, industry benchmarks, and market data;

-Assessing the adequacy and appropriateness of the related disclosures in the financial statements in accordance with the applicable financial reporting framework.

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF

SP FINANCE P.L.C.

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Significant Financing Transactions

Risk Description

The principal activity of the Company, SP Finance p.l.c. is to raise financial resources from the capital market to finance the capital projects of the companies forming part of SP Group. These debt securities are guaranteed by the subsidiary, Sea Pebbles Limited, and further secured by a grant in favour of the security trustee for the benefit of the bond holders, a first

Risk Description

ranking special hypothec over the security property for the sum of €12,000,000. The funds received from the debt securities in issue have been invested in €12m cumulative redeemable preference shares in SP Investments Limited. The recoverability of the financial asset at amortised cost and the debt servicing thereon is dependent on the generation of profits from the operating subsidiaries of SP Investments Limited.

Recoverability of Parent Company bond proceeds invested in its Subsidiary Company SP Investments Ltd

How the scope of our audit responded to the risk

Financial assets at amortised costs includes proceeds from the bond issue which were invested through cumulative redeemable preference shares in the subsidiary SP investments Limited. Investment in preference shares as at 31 December 2024 amounted to €12 million.

The eventual redemption of this investment of €12m will be used to repay the principal amount of the bond, which is why we have given additional attention to this area. On an annual basis the Company is principally dependent on the receipt of dividend payments from this financial asset to maintain its debt financing.

The Group’s subsidiaries operate in Hospitality and Catering business. The directors have assessed the recoverability of the Company’s investment in its subsidiary companies.

The assessment was based on the estimated operating results of the subsidiaries, including the operations acquired by the group in 2023.

The financial asset at amortised cost is subject to impairment testing in accordance with the expected credit loss model in terms of IFRS9.

We have agreed the terms of its financial asset to supporting documentation.

We have assessed the financial situation of Sea Pebbles Ltd “the Guarantor” and the Group subsidiaries. In doing this, we made reference to the latest audited financial statements, cash flow projections, forecasts and other prospective information made available to us. We performed additional audit work on the assumptions, conditions and relevant risk assessments used by the directors. We reviewed the forecasted financial position of the Group for the possibility of refinancing in the longer term. We assessed the fair value of the properties owned by the Group with specific emphasis on the properties held by virtue of the Security Trust Deed dated 24 April 2019.

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF

SP FINANCE P.L.C.

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Other Information

The directors are responsible for the other information. The other information comprises the directors’ report and the Statement of Compliance with the Principles of Good Corporate Governance. Except for our opinions on the directors’ report in accordance with the Companies Act (Cap.386) and on the Corporate Governance Statement of Compliance in accordance with the Capital Markets Rules issued by the Maltese Financial Services Authority, our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

With respect to the Directors’ Report, we also considered whether the Directors’ Report includes the disclosures required by Article 177 of the Maltese Companies Act (Cap. 386). Based on the work we have performed, in our opinion:

-the information given in the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-the directors’ report has been prepared in accordance with the Maltese Companies Act (Cap.386).

In addition, in light of the knowledge and understanding of the Group and the Company and its environment obtained in the course of the audit, we are required to report if we have identified material misstatements in the directors’ report. We have nothing to report in this regard.

Responsibilities of the Directors and those charged with governance for the financial statements

The directors are responsible for the preparation of the financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the EU, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group’s and Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group and the Company or to cease operations, or has no realistic alternative but to do so.

The directors have delegated the responsibility for overseeing the Group’s and the Company’s financial reporting process to the Audit Committee.

Auditor’s Responsibilities for the Audit Committee

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

-Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF

SP FINANCE P.L.C.

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appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

-Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

-Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

-Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Group’s and the Company’s ability to continue as a going concern.

-Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Audit Committee, we determine those matters that were of most significance in the audit of the financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

Report on compliance with the requirements of the European Single Electronic Format Regulatory Technical Standard (the “ESEF RTS”), by reference to Capital Market Rule 5.55.6

We have undertaken a reasonable assurance engagement in accordance with the requirements of Directive 6 issued by the Accountancy Board in terms of the Accountancy Profession Act (Cap. 281) - the Accountancy Profession (European Single Electronic Format) Assurance Directive (“the ESEF Directive 6”) on the Annual Financial Report of SP Finance p.l.c. for the year ended 31 December 2023, entirely prepared in a single electronic reporting format.

Responsibilities of the directors

The directors are responsible for the preparation of the annual financial report, including the consolidated financial statements and the relevant mark-up requirements therein, by reference to Capital Markets Rule 5.56A, in accordance with the requirements of the ESEF RTS.

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF

SP FINANCE P.L.C.

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Our responsibilities

Our responsibility is to obtain reasonable assurance about whether the annual financial report including the consolidated financial statements and the relevant electronic tagging therein comply in all material respects with the ESEF RTS based on the evidence we have obtained. We conducted our reasonable assurance engagement in accordance with the requirements of ESEF Directive 6.

Our procedures included:

Obtaining an understanding of the entity’s financial reporting process, including the preparation of the annual financial report, in accordance with the requirements of the ESEF RTS.

Obtaining the annual financial report and performing validations to determine whether the annual financial report has been prepared in accordance with the requirements of the technical specifications of the ESEF RTS.

Examining the information in the annual financial report to determine whether all the required tagging therein have been applied and whether, in all material respects, they are in accordance with the requirements of the ESEF RTS.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion, the annual financial report for the year ended 31 December 2024 has been prepared, in all material respects, in accordance with the requirements of the ESEF RTS.

Report on Corporate Governance Statement of Compliance

The Capital Markets Rules issued by the Malta Financial Services Authority require the directors to prepare and include in their Annual Report a Statement of Compliance providing an explanation of the extent to which they have adopted the Code of Principles of Good Corporate Governance and the effective measures that they have taken to ensure compliance throughout the accounting period with those Principles.

The Capital Markets Rules also require the auditor to include a report on the Statement of Compliance prepared by the directors.

We read the Statement of Compliance and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements included in the Annual Report. Our responsibilities do not extend to considering whether this statement is consistent with any other information included in the Annual Report.

We are not required to, and we do not, consider whether the Board’s statements on internal control included in the Statement of Compliance cover all risks and controls, or form an opinion on the effectiveness of the Company’s corporate governance procedures or its risk and control procedures.

In our opinion, the Statement of Compliance set out on pages 6 to 9 has been properly prepared in accordance with the requirements of the Capital Markets Rules issued by the Malta Financial Services Authority.

We also have responsibilities:

•Under the Maltese Companies Act (Cap. 386) we are required to report to you if, in our opinion:

-We have not received all the information and explanations we require for our audit.

-Adequate accounting records have not been kept, or that returns adequate for our audit have not been received from branches not visited by us.

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF

SP FINANCE P.L.C.

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-The financial statements are not in agreement with the accounting records and returns.

•Under the Capital Markets Rules to review the statement made by the directors that the business is a going concern together with supporting assumptions or qualifications as necessary.

We have nothing to report to you in respect of these responsibilities.

Other matter – use of this report

Our report, including the opinions, has been prepared for and only for the Parent Company’s shareholders as a body in accordance with Article 179 of the Maltese Companies Act (Cap. 386) and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior written consent.

Appointment

We were first appointed as auditors of the Group and the Company for the financial period ended 31 December 2019. Our appointment has been renewed by shareholders resolution representing a total period of uninterrupted appointment of 6 years.

This copy of the audit report has been signed by:

MICHAEL CURMI

for and on behalf of

VCA CERTIFIED PUBLIC ACCOUNTANTS

30 April 2025