The Ona p.l.c. - 48510040FDCT4Q97XG85

THE ONA P.L.C.

REPORT OF THE DIRECTORS

FOR THE YEAR ENDED 31 DECEMBER 2023

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Directors:-

Ms. Cliona Muscat

Mr. George Muscat – deceased on 22 September 2023

Mr. Justin Cutajar – appointed on 22 September 2023

Dr. Ann Marie Agius - Non-Executive Director

Mr. Alfred Attard - Non-Executive Director

Mr. Francis X Gouder - Non-Executive Director

Company secretary:

Ms. Karen Coppini – appointed on 10 July 2023

Mr. Justin Cutajar – resigned on 10 July 2023

Company number:

C-101370

Registered Office:

AC Hotel St. Julians

13, Lourdes Lane

San Giljan, STJ 3311

Malta

Bankers:

APS Bank p.l.c.

APS Centre

Tower Street,

Birkirkara, Malta

Bank of Valletta p.l.c.

58, Zachary Street,

Valletta, Malta

MeDirect Bank (Malta) p.l.c.

The Centre,

Tignè Point,

Sliema, Malta

Izola Bank P.L.C

53/58 East Street,

Valletta, Malta

Auditors:

VCA Certified Public Accountants

Finance House, First Floor,

Princess Elizabeth Street

Ta’ Xbiex XBX 1102

Malta

The Directors hereby present their annual report together with the audited financial statements of The Ona p.l.c. (the “Company”) for the period ended on 31 December 2023.

The Directors also present their annual report together with the audited financial statements of The Ona p.l.c. Group (the “Group”) which comprises the Company and its fully owned subsidiaries, namely The Ona Property Development Ltd. (Reg. No. C-82490), The Ona Real Estate Ltd. (Reg. No. C-83842) and The Ona Hospitality Ltd. (Reg. No. C-101371) for the year ended on 31 December 2023.

Principal Activities

The principal activity of The Ona p.l.c. is to hold investments in subsidiary companies and to raise financial resources from the capital markets to finance its investments and the property development projects of its subsidiaries. The principal activities of

THE ONA P.L.C.

REPORT OF THE DIRECTORS

FOR THE YEAR ENDED 31 DECEMBER 2023

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the Group are: (i) to hold investment property for rental; (ii) to acquire new sites for residential properties for resale; (iii) to develop and construct properties acquired; and (iv) the operation of the Hotel. The directors do not envisage any changes to the company’s and group’s principal activities in the foreseeable future.

Bond Issue

As at 31st December 2023, the Group had a public listed Bond in issue, namely The Ona p.l.c. €16 million 4.50% Secured Bonds 2028 - 2034 of a nominal value of €100 per Bond issued at par. The Bond was issued pursuant to a Prospectus dated 31st May 2022 and admitted to the Official List of the Malta Stock Exchange p.l.c. with effect from 21st June 2022. The Ona Property Development Ltd., The Ona Real Estate Ltd. and The Ona Hospitality Ltd. acted as guarantors of this bond issue (the “Guarantor”).

Notes Issue

On 26th June 2023 The Ona p.l.c. issued €5,000,000 6.5% Unsecured Notes 2028 of a nominal value of €1,000 per Note, issued and redeemable at par. The Notes were fully subscribed. In accordance with the Prospectus dated 1st June 2023, the proceeds from the Notes issue were utilised by the Group to finance its property development projects.

Review of business

AC Hotel by Marriott

The 4-star Hotel having 106 rooms and forming part of the “AC by Marriott Hotels" chain of hotels opened its doors on 23rd May 2023 had a very good performance during the period ended 31st December 2023.

Property development projects

The Marsascala Project - Waterbank

As at 31 December 2023, 15 residential units were contracted while the remaining one unit was subject to promise of sale agreement. Revenue generated from the sold units amounted to €5.10 million (€0.94 million in FY2021, €3.30 million in FY2022 and €0.86 million in FY2023). TOPD expects to generate €0.32 million from the last three units.

The Birkirkara project

Development works relating to the Birkirkara Project were 75% completed by 31st December 2023 and are expected to be completed by Q2 2024. TORE expects to generate circa €6.5 million in revenue from this project.

The St Paul’s Bay Project

On 11th October 2023 TOPD acquired the site at St Paul’s Bay and works started during Q1 2024. This project, which comprises 39 residential units and 35 lock-up garages/parking spaces is expected to be completed by Q2 2025.

The Mosta project

On 14th September 2023 TOPD acquired the site at Mosta and works started during Q4 2023. This project, which comprises 12 residential units and 2 lock-up garages/parking spaces is expected to be completed by Q4 2024.

Other developments

The Ona Property Development Ltd. does not have plans to have direct involvement in property development, once current projects are completed. However, in February 2023 a new company was formed by the name of ACMUS Group Limited in which The Ona Property Development Ltd. has 49.99% shareholding. This joint venture entity is with JUEL Group plc.

ACMUS Group Limited’s objective is that of property development and as at 31st December 2023 it acquired two sites – one in Mgarr and another in St. Julians. Both projects are at the initial stages of development. The company has entered into Promise of Sale agreements to acquire other properties, some of which will have the final deeds signed in 2024.

THE ONA P.L.C.

REPORT OF THE DIRECTORS

FOR THE YEAR ENDED 31 DECEMBER 2023

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Principal risks and uncertainties

The Company is dependant on the performance of its subsidiaries.

The Company is the finance and holding Company of the Group and does not carry out any trading activities of its own. The Company is therefore dependent on the performance and financial position of its subsidiaries and associate undertakings. In the event that any subsidiary and/or associate underperforms in any one financial year or otherwise experiences adverse fluctuations or volatility in cash flows, liquidity strains or other financial difficulties, such underperformance or adverse financial position would adversely affect the operational and financial results of the Group as a whole and consequently, that of the Company.

As a holding Company, the majority of the Company’s income consists of the dividends and interest on loan receivables it receives from its subsidiaries. The payment of receivables and distribution of dividends is dependent on the cash flows and earnings of the relevant subsidiary.

The business activities carried out by the Group companies are subject to market, economic and financial risks which are mitigated in the most prudent way. These risks are addressed in note 30 to these financial statements.

Results and dividends

The results for the period ended 31st December 2023 are shown in the income statement on Page 8. The Group registered a Profit of €323,151 (2022 - Profit of €1,177,323), while the Company registered a Profit of €13,356 (2022 - €26,650).

The Directors do not recommend the payment of a final dividend.

Directors

The directors of the Company who held office during the year were:

George Muscat (Chairman - deceased on 22 September 2023)

Cliona Muscat (Executive Director)

Justin Cutajar (Executive Director – appointed on 22 September 2023)

Francis X. Gouder (Non-Executive Director)

Alfred Attard (Non-Executive Director)

Dr Ann Marie Agius (Non-Executive Director)

The Company’s Articles of Association do not require any directors to retire.

Company secretary

The Company's Secretary is Dr Karen Coppini.

Statement of Directors’ responsibilities

The directors are required by the Companies Act (Chap. 386) to prepare financial statements in accordance with International Financial Reporting Standards as adopted by the EU which give a true and fair view of the state of affairs of the parent company and the group at the end of each financial year and of the profit or loss of the parent company and the group for the year then ended. In preparing the financial statements, the directors are responsible to:

-Ensure that the financial statements have been drawn up in accordance with International Financial Reporting Standards as adopted by the European Union;

THE ONA P.L.C.

REPORT OF THE DIRECTORS

FOR THE YEAR ENDED 31 DECEMBER 2023

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-adopt the going concern basis unless it is inappropriate to presume that the company will continue in business;

-make judgements and estimates that are reasonable and prudent;

-account for income and charges relating to the accounting period on the accruals basis;

-report comparative figures corresponding to those of the preceding accounting period.

The directors are also responsible for ensuring that proper accounting records are kept which disclose with reasonable accuracy at any time the financial position of the parent company and the group and which enable the directors to ensure that the financial statements comply with the Companies Act (Chap. 386). This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. The directors are also responsible for safeguarding the assets of the company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Annual report and consolidated financial statements of The Ona p.l.c. for the period ending 31 December 2023 are made available on the company’s website. The directors are responsible for the maintenance and integrity of the financial statements on the website, in view of their responsibility for the controls over, and the security of, the website. Access to information published on the Company’s website is available in other countries and jurisdictions, where legislation governing the preparation and dissemination of financial statements may differ from requirements or practice in Malta.

Statement by the Directors pursuant to Listing Rule 5.68

The directors declare that to the best of their knowledge, the financial statements prepared in accordance with the applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the parent company and its subsidiaries included in the consolidation taken as a whole, and that this report includes a fair review of the performance of the business and the position of the Company and its subsidiaries included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

Going Concern statement pursuant to Listing Rule 5.62

The directors, at the time of approving the financial statements, consider the going concern assumption in the preparation of the financial statements as appropriate as at the date of authorisation and believe that no material uncertainty that may cast significant doubt about the company’s and the group’s ability to continue as a going concern exists as at that date.

Auditor

VCA Certified Public Accountants have expressed their willingness to continue in office and a resolution proposing their reappointment will be put before the members at the next annual general meeting.

Signed on behalf of the Board of Directors on 29 April 2024 by Mr. Justin Cutajar (Director) and Ms. Cliona Muscat (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Financial Report.

THE ONA P.L.C.

STATEMENT OF COMPLIANCE WITH PRINCIPLES OF GOOD CORPORATE GOVERNANCE

FOR THE YEAR ENDING 31 DECEMBER 2023

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1. Introduction

Pursuant to the requirements of the Listing Rules issued by the Listing Authority of the Malta Financial Services Authority, The Ona p.l.c. hereby reports on the extent to which the company has adopted the “Code of Principles of Good Corporate Governance” (the “Code”) appended to Chapter 5 of the Listing rules as well as the measures adopted to ensure compliance with these same principles.

The Ona p.l.c. acts as a finance company to the Group and as such has minimal operations. Its primary function is the lending and monitoring of the proceeds of the public bond to the Group. The Ona p.l.c. has no employees other than the directors and the company secretary.

2. Compliance with the Code

The Board of Directors of The Ona p.l.c. (The Company) believe in the adoption of the Code and has endorsed it except where the size and/or circumstances of the company are deemed by the Board not to warrant the implementation of specific recommendations.

Additionally, the Board recognises that, by virtue of Listing Rule 5.101, the company is exempt from making available the information required in terms of Listing Rules 5.97.1 to 5.97.3, 5.97.6 to 5.97.8.

Moreover, the Board also acknowledges that the requirements emanating from Directive 2014/95/EU as published in Circular 05/16 – Transposition of Directive 2014/95/EU do not apply to the company since it does not classify as a ‘large

company’ under the definition of the Directive.

3. The Board of Directors

The board of directors is responsible for the Company’s affairs, for the overall direction of the company and being

dynamically involved in supervising the systems of control and financial reporting.

The Board meets at least four times annually and is currently composed of five members, three of whom are independent from the Company or related parties.

As at date of this statement, the Board of Directors is composed as follows:

Cliona Muscat (Executive Director)

Justin Cutajar (Executive Director)

Francis X. Gouder (Non-Executive Director)

Alfred Attard (Non-Executive Director)

Dr Ann Marie Agius (Non-Executive Director)

There is no CEO role required in the Company due to the nature of the Company and as such the board carries out the

policy decisions regarding the Company.

THE ONA P.L.C.

STATEMENT OF COMPLIANCE WITH PRINCIPLES OF GOOD CORPORATE GOVERNANCE

FOR THE YEAR ENDING 31 DECEMBER 2023

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4. Committees

i. Audit Committee

In accordance with the Listing Rules, The Ona p.l.c. has established an Audit Committee, which terms of reference are based on the principles set out by the said Listing Rules. The Audit Committee is entirely composed of independent, non-executive directors. At present, Francis X. Gouder acts as chairperson, whilst Alfred Attard and Dr Ann Marie Agius act as members. In compliance with the Listing Rules, Francis X. Gouder and Alfred Attard are the independent Non- Executive Director who are both competent in accounting and auditing matters having previously served in various senior positions in several financial institutions.

The committee’s primary object is to assist the board in fulfilling its supervisor and monitoring responsibility by reviewing the company’s financial statements and disclosures, monitoring the system of internal control established by management as well as the audit process. The audit committee formally convened four times during the financial period ending 31st December 2023.

ii. Remuneration and Nomination Committees

Under present circumstances, the board does not consider it necessary to appoint a remuneration committee and a nomination committee as decisions on these matters are taken at shareholder level and by the board itself.

iii. Evaluation of the board’s performance

Under present circumstances, the board does not consider it necessary to appoint a committee to carry out a performance evaluation of its role as the board’s performance is constantly under the scrutiny of the shareholders of the company.

5. Remuneration Statement

In terms of Rule 8.A.4 of the Code of Principles of Good Corporate Governance contained in Appendix 5.1 of the Listing Rules of the Listing Authority (the “Code”), the Company is to include a remuneration statement in its annual report which should include details of the remuneration policy of the Company in respect of the financial packages of members of the Board of Directors of the Company.

The remuneration payable to directors of the Company consists of fixed remuneration only. No part of the remuneration paid to the directors is performance-based and none of the directors (in their capacity as directors of the Company) are entitled to profit-sharing, share options or pension benefits. The directors do not receive any form of monetary or non monetary perks or benefits. There were no changes to this policy from the previous year and the Company does not intend to change the policy in the foreseeable future.

Remuneration paid to the Directors by the subsidiaries of the Company for the period from 1st Jan 2023 to 31st

December 2023 amounted to €18,000 (2022 - €11,268).

6. Internal Control

While the Board is ultimately responsible for the company’s internal controls as well as their effectiveness, authority to operate the company is delegated to the Executive Directors. The company’s system of internal controls has been drawn up through the Internal Control Manual to manage risks in the most appropriate manner. Procedures are in place for the Company to control, monitor and assess risks and their implications through ongoing cash flow monitoring reports and strategic plans which are presented to the Executive Directors.

THE ONA P.L.C.

STATEMENT OF COMPLIANCE WITH PRINCIPLES OF GOOD CORPORATE GOVERNANCE

FOR THE YEAR ENDING 31 DECEMBER 2023

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7. Relations with the bondholders and the market

The market and bondholders alike are kept up to date with all relevant information, the Annual Report and Financial statements, as well as, via company announcements made through the Malta Stock Exchange and on the company’s website.

8. Institutional shareholders

This principle is not applicable since the company has no institutional shareholders.

9. Conflicts of interest

The directors always act in the interest of the Company and its shareholders. If any director has a conflict of interest, he will not be allowed to vote on the matter at hand. Furthermore, the board of directors and management of the company is in compliance with the obligations towards the rules of Insider Dealing.

10. Corporate Social Responsibility

The Group adhered to accepted principles of corporate social responsibility in its day to day practices by acting ethically in the day to day management of the business and strives to improve the quality of life of the workforce as well as of the society at large. The Group also regularly supports charitable causes.

Signed on behalf of the Board of Directors on 29 April 2024 by Mr. Justin Cutajar (Director) and Ms. Cliona Muscat (Director).

THE ONA P.L.C.

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2023

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Revenue

3,646,721

5,960,500

Interest income

1,017,280

447,839

3,646,721

5,960,500

1,017,280

447,839

Costs

Direct costs

(715,585)

(136,729)

Cost of sales

(793,636)

(4,331,125)

Gross profit

2,137,500

1,492,646

1,017,280

447,839

Administrative expenses

(655,795)

(46,242)

(59,379)

(21,025)

Other operating income

120,460

104,210

Earnings before interest, tax and depreciation

1,602,165

1,550,614

957,901

426,814

Depreciation and amortisation

(511,336)

(5,081)

Finance costs

(536,140)

(48,120)

(959,797)

(413,806)

Gains on financial instrument at FVOCI reclassified to profit or loss upon derecognition

13,195

Investment income

5,000

Dividend income

17,164

Share of loss in associate

(33,119)

Profit before taxation

538,756

1,510,629

15,268

31,203

Tax charge

(215,605)

(333,306)

(1,912)

(4,553)

Profit after taxation

323,151

1,177,323

13,356

26,650

Total comprehensive income for the year

323,151

1,177,323

13,356

26,650

Profit attributable to:

Equity holders of the Company

323,151

1,177,323

13,356

26,650

Group

Company

(12 months)

(11 months)

2023

2022

2023

2022

€

Notes

THE ONA P.L.C.

STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2023

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Group

Company

2023

2022

2023

2022

ASSETS

Notes

€

Non-current assets

Property, plant and equipment

25,285,517

5,081

Property, plant and equipment under development

18,756,400

Deferred tax asset

663

Investment property

2,700,000

Investment in associate

1,623,279

Investment in subsidiaries

4,062,486

Trade and other receivables

19,491,929

14,376,923

29,608,796

21,461,481

23,555,078

18,439,409

Current assets

Inventories

9,174,505

3,599,455

Trade and other receivables

1,053,451

2,140,487

3,493,493

3,724,614

Financial assets through OCI

991,504

Cash at bank and in hand

1,460,387

2,296,435

552,860

1,314,625

12,679,847

8,036,377

5,037,857

5,039,239

TOTAL ASSETS

42,288,643

29,497,858

28,592,935

23,478,648

EQUITY AND LIABILITIES

Equity

Called up issued share capital

7,271,693

Other reserves

(3,386,933)

373,153

Fair value gain reserve

836,052

Retained earnings

4,051,351

3,728,200

40,006

26,650

Total equity

8,772,163

8,449,012

7,684,852

7,671,496

Liabilities

Non-current liabilities

Long term borrowings

26,474,373

17,333,273

20,331,765

15,406,456

Deferred tax liability

324,081

216,000

26,798,454

17,549,273

20,331,765

15,406,456

Current liabilities

Short term borrowings

1,446,124

57,500

Other financial liabilities

276,338

245,983

Trade and other payables

4,976,012

3,145,701

574,835

396,143

Current tax liability

19,552

50,389

1,483

4,553

6,718,026

3,499,573

576,318

400,696

Total liabilities

33,516,480

21,048,846

20,908,083

15,807,152

TOTAL EQUITY AND LIABILITIES

42,288,643

29,497,858

28,592,935

23,478,648

The financial statements were approved and authorised for issue by the Board of Directors on 29 April 2024 The financial statements were signed on behalf of the Board of Directors by Ms. Cliona Muscat (Director) and Mr. Justin Cutajar (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Report and Financial Statement.

THE ONA P.L.C.

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2023

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	Share	Other	Fair value	Retained
	Capital	Reserves	Gain reserve	Earnings	Total
Group	€	€	€	€	€

As at 1 January 2022	301,200	-	836,052	2,550,877	3,688,129
Comprehensive income
Profit for the period	-	-	-	1,177,323	1,177,323
	301,200	-	836,052	3,728,200	4,865,452
Transactions with owners
Issue of share capital	1,200	-	-	-	1,200
Capitalisation of loans	3,581,160	-	-	-	3,581,160
	3,582,360	-	-	-	3,582,360
Adjustments relating to reorganisation
Cash issue of shares of subsidiary before reorganisation	1,200	-	-	-	1,200
Reorganisation of group	3,386,933	(3,386,933)	-	-	-
	3,388,133	(3,386,933)	-	-	1,200
Balance at 31 December 2022	7,271,693	(3,386,933)	836,052	3,728,200	8,449,012

Comprehensive income
Profit for the period	-	-	-	323,151	323,151
Balance at 31 December 2023	7,271,693	(3,386,933)	836,052	4,051,351	8,772,163

	Share	Other	Fair value	Retained
	Capital	Reserves	Gain reserve	Earnings	Total
Company	€	€	€	€	€

As at 20 January 2022

Comprehensive income

Profit for the period

26,650

Total Comprehensive income

26,650

Transactions with owners

Issue of share capital

1,200

Capitalisation of loans

3,581,160

3,582,360

Adjustments relating to reorganisation

Reorganisation of group

3,689,333

373,153

4,062,486

Balance at 31 December 2022

7,271,693

373,153

26,650

7,671,496

Comprehensive income

Profit for the period

13,356

11,002

Balance at 31 December 2023

7,271,693

373,153

40,006

7,684,852

THE ONA P.L.C.

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2023

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Group

Company

2023

2022

2023

2022

Cash flows from operating activities

€

Profit before taxation

538,756

1,510,629

15,268

31,203

Adjustments for:

Depreciation

511,336

5,081

Finance costs

469,676

22,314

893,333

388,000

Amortisation of key money

(8,750)

Amortisation of bond issue costs

66,464

25,806

66,464

25,806

Share of loss in Associate

33,119

Operating profit before working capital changes

1,610,601

1,563,830

975,065

445,009

Movement in inventory

(5,575,050)

1,427,186

Movement in receivables

1,087,037

1,026,390

231,121

Movement in payables

1,697,905

1,685,133

37,537

8,142

Cash generated from operations

(1,179,507)

5,702,539

1,243,723

453,151

Income tax paid

(138,361)

(334,139)

(5,644)

Interest paid

(857,747)

(22,314)

(893,333)

Net cashflows (used in)/ generated from operating activities

(2,175,615)

5,346,086

344,746

453,151

Cash flows from investing activities

Payments to acquire property, plant and equipment and PPE under development

(6,647,302)

(18,756,400)

Investment in FI held at FVOCI

(991,504)

Investment in associate

(1,656,398)

Net cashflows (used in) investing activities

(9,295,204)

(18,756,400)

(991,504)

Cash flows from financing activities

Cash issue of shares pre-capital reorganisation

2,400

1,200

Movement in related party balances

(343,829)

(5,115,007)

(154,049)

Movement in shareholders' loans

30,355

480,134

Repayment of bank borrowings

(28,862)

(812,892)

Net bank borrowings

3,988,304

Bonds proceeds

5,000,000

16,000,000

5,000,000

16,000,000

Advanced from third parties

291,250

Bond proceeds advanced to subsidiaries

(14,366,328)

Payment of bond issue costs

(619,349)

Net cash generated from/ (used in) financing activities

9,281,047

14,706,464

(115,007)

861,474

Net movement in cash and cash equivalents

(2,189,772)

1,296,150

(761,765)

1,314,625

Cash and cash equivalents at the beginning of the year

2,296,435

1,000,285

1,314,625

Cash and cash equivalents at the end of the year

106,663

2,296,435

552,860

1,314,625

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

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1.Basis of preparation

Reporting entity

The Ona p.l.c. (the ‘Company’) is a public limited liability which was incorporated in Malta on 20 January 2022. The Company’s registration number is C-101370 and the Company’s registered office is AC Hotel St. Julians, 13, Lourdes Lane, San Giljan STJ 3311, Malta

The Ona p.l.c. and its subsidiaries referred to as ‘the Group’ principal activities include the rental and acquisition of immovable properties for development and sale.

The consolidated financial statements include the financial statements of The Ona p.l.c. and its subsidiaries. The Company and the subsidiaries are together referred to as ‘the Group’.

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 are prepared in Euro currency which is the Group’s and Company’s functional and presentation currency.

Basis of measurement

These financial statements have been prepared under the historical cost basis as modified by the fair valuation of the land and buildings class of investment property and financial assets at fair value through other comprehensive income.

Going concern basis

As at the date of signing these financial statements, based on the information currently available, the Directors confirm that they have reasonable expectation that the Group and the Company have adequate resources to continue in operation for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing these financial statements.

Group reorganisation

The Company was incorporated on 20 January 2022 under the terms of the Maltese Companies Act, 1995. On 28th April 2022, the Company acquired 100% direct shareholding in The Ona Property Development Ltd. and 100% direct shareholding in The Ona Real Estate Ltd. The Ona Property Development Ltd. and The Ona Real Estate Ltd. were already in existence and operating. The substance of the acquisition was that of a group restructuring by virtue of which the Company became the new parent company of the Group. This transaction has been accounted for in the consolidated financial statements as a reorganisation, and these have been compiled as though The Ona p.l.c. was already the parent Company of the Group from incorporation.

The accounting policies are consistent with the policies previously adopted by The Ona p.l.c.’s subsidiaries except for reorganisation between Group entities under common control are accounted for using the reorganisation method of accounting. Under the reorganisation method of accounting, assets and liabilities are incorporated at the predecessor carrying values, which are the carrying amounts of assets and liabilities of the acquired entity’s pre organisation financial statements. 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 entities’ full year results, including comparatives, as if the pre-reorganisation structure was already in place at the commencement of the comparative period. As a result of this group restructuring, the Company became the new parent company of the Group.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

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1.Basis of preparation (continued)

Standards, interpretations and amendments to published standards effective in 2023

In 2023, the Group adopted new standards, amendments and interpretations to existing standards that are mandatory for the Group’s accounting period beginning on 1 January 2023. The Group has applied the following standards and amendments for the first time for its annual reporting period beginning 1 January 2023. The Group has applied the following standards and amendmnents for the first time for its annual reporting period commencing from 1 January 2023:

i.Definition of accounting estimates – amendments to IAS 8

ii.Deferred tax relating to Assers and Liabilities arising from a single transactions – amendmends to IAS 12

iii.Disclosure of accounting polivies – Amendments to IAS 1 and IFRS Practice Statement 2

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

The adoption of these revisions to the requirements of IFRS as adopted b the EU did not result in substantial changes to the Group and Company’s accounting policies.

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

Certain new standards, amendments and interpretations to existing standards have been published by the date of authorisation for issue of these financial statements but are mandatory for the Group’s and the Company’s accounting periods beginning after 1st January 2024. The Group has not early adopted these revisions to the requirements of IFRS’s as adopted by the EU and the Company’s directors are of the opinion that there are no requirements that will have a possible significant impact on the Group’s and the Company’s financial statements in the period of initial application.

2.Material accounting policies

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

Basis of consolidation

i.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.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

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2.Material accounting policies (continued)

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

ii.Associates

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor a joint venture. Significant influence is the power to participate in the financial and operating policy decision of the investee but is not control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in these financial statements suing the equity method of accounting.

iii.Equity method

Under the equity method of accounting, an investment in an associate is recognised initially in the consolidated statement of financial position at cost and adjusted thereafter to recognise the Group’s share of the profit or loss and other comprehensive income of the associate. When the Group’s share of losses of an associate exceeds the Group’s interest in that associate or joint venture, the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. The financial results of associates and joint ventures are taken from the latest audited financial statements.

When a Group entity transacts with an associate or joint venture of the Group, profits and losses resulting from the transactions with the associate or joint venture are recognised in the Group’s consolidated financial statements only to the extent of interests in the associate or joint venture that are not related to the Group.

The requirements of IAS 36 are applied to determine whether it is necessary to recognise any impairment loss with respect to the Group’s investment in an associate or joint venture. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with IAS 36 as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount.

In the Company’s financial statements, investments in associates and joint ventures are accounted for on the basis of the direct equity interest and are stated at cost less any accumulated impairment losses. Dividends from the investment are recognised in profit or loss.

Property, plant & equipment

The cost of an item of property, plant and equipment is recognised as an asset when it is probable that the future economic benefits that are associated with the asset will flow to the entity and the cost can be measured reliably. Property, plant and equipment are initially measured at cost comprising the purchase price, any costs directly attributable to bringing the assets to a working condition for their intended use, and the costs of dismantling and removing the item and restoring the site on which it is located. Subsequent expenditure is capitalised as part of the cost of property, plant and equipment only if it enhances the economic benefits of an asset in excess of the previously assessed standard of performance, or it replaces or restores a component that has been separately depreciated over its useful life.

After initial recognition, property, plant and equipment is carried under the cost model, that is at cost less any accumulated depreciation and any accumulated impairment losses.

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.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

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2.Material accounting policies (continued)

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:

The rates of depreciation used for other items of property, plant and equipment are the following:

	Years
Land Buildings	50
Furniture, fixtures & fittings	10
Equipment	15
Computer Equipment	4-6
Other fixed assets	5-10

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.

The depreciation method applied, the residual value and the useful life are reviewed on a regular basis and when necessary, revised with the effect of any changes in estimate being accounted for prospectively.

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 property 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.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

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2.Material accounting policies (continued)

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.

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.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

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2.Material accounting policies (continued)

Financial assets measured at amortised cost (continued)

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’.

Financial assets measured at fair value through other comprehensive income

Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses, which are recognised in profit or loss.

When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other operating income/(losses), and impairment expenses are presented as separate line item in the statement of profit or loss, when material.

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 and the Company 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. The impact on the Group and the Company of this change in the impairment model is not significant in view of the high quality of the counterparties to which the Group and the Company is exposed to credit risk, and the loss allowance is not material.

For all other financial instruments, 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’).

Financial liabilities

The Group recognizes 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 amortized cost. The Group derecognizes a financial liability from its statement of financial position when the obligation specified in the contract or arrangement is discharged, cancelled or expired.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

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2.Material accounting policies (continued)

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.

Inventories

The main object of the Group is the development of land acquired for development and resale. This development is intended in the main for resale purposes and is accordingly classified in the financial statements as Inventory. Any elements of a project which are identified for business operation or long-term investment properties are transferred at their carrying amount to Property, plant and equipment or investment properties when such identification is made, and the cost thereof is made and the cost thereof can reliably be segregated.

The development is carried at the lower of cost and net realisable value. Cost comprises the purchase cost and net realisable value. Cost comprises the purchase cost of acquiring the land together with other costs incurred during the subsequent development, including:

(i)The cost incurred on development works, including demolition, site clearance, excavation, construction, etc., together with the costs of ancillary activities such as site security.

(ii)The cost of various design and other studies conducted in connection with the project, together with all other expenses incurred in connection therewith.

(iii)Any borrowing costs, including imputed interest, attributable to the development phases of the project.

The purchase cost of acquiring the land represents the cash equivalent of the contracted price. This was determined at date of purchase by discounting to present value the future cash outflows comprising the purchase consideration.

Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses.

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.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

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2.Material accounting policies (continued)

Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized 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.

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand 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.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

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2.Material accounting policies (continued)

Impairment of non-financial assets (continued)

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 and cost recognition

Property sales

Sales of property are recognised when the significant risks and rewards of ownership of the property being sold effectively transferred to the buyer. This is generally considered to occur at the later of the contract of sale and the date when all the company's obligations relating to the property are completed and the possession of the property can be transferred in the manner stipulated by the contract of sale. Amounts received in respect of sales that have not yet been recognised in the financial statements, due to the fact that the significant risks and rewards of ownership still rest with the company, are treated as payments received on account and presented within trade and other payable.

Hospitality

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

Each of the services rendered is assessed to be a distinct performance obligation, and if applicable, the Group allocates the transaction price to each of the services rendered to the customer on a relative basis, based on their sand alone selling price. Revenue from such operations is recognized over time since the customer benefits as the Group is performing; the majority of the revenue relates to accommodation (ie. The amount allocated to such performance obligation is recognized over the customer’s stay at the hotel).

Other operating income

Other operating income consisting of the following is recognised on an accruals’ basis:

- Rental income

Costs

Costs are recognised when the related goods and services are sold, consumed or allocated, or when their future useful lives cannot be determined.

Dividends income

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

Interest income

Interest income is recognised when the inflow of economic benefits associated with the transaction is probable and the amount of income can be measured reliably. Interest income is recognised on an accrual or time proportion basis.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

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2.Material accounting policies (continued)

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.

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.

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.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

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2.Material accounting policies (continued)

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.

Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (“CODM”).

The board of The Ona p.l.c., (“the Board”) assess the financial performance and position of the Group and make strategic decisions. The Board has been identified as being the CODM.

Related parties

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

3.Critical accounting estimates and judgements

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).

Fair value measurement and valuation processes

The Group’s investment property is 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.

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 ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

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.

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 other related operations and property 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.

4.2 Revenue from contracts with customers

2023	Hospitality Operations	Property Trading	Unallocated	Total
	€	€	€	€
Revenue	3,262,721	384,000	-	3,646,721
Segment Profit	1,392,393	89,312	-	1,481,705
Other operating income	-	120,460	-	120,460
Group EBITDA	1,392,393	209,772	-	1,602,165
Depreciation and amortisation	-	-	(511,336)	(511,336)
Finance costs	-	-	(536,140)	(536,140)
Interest income	-	-	22	22
Dividend income	-	-	17,164	17,164
Share of loss in associate	-	-	(33,119)	(33,119)
Profit before taxation	1,392,393	209,772	(1,063,409)	538,756
Taxation	-	-	(215,605)	(215,605)
Profit for the year	1,392,393	209,772	(1,279,014)	323,151
Segment assets – Non-current	25,285,517	4,323,279	0	29,608,796
Segments assets - Current	446,311	9,384,192	2,849,344	12,679,847
	25,731,828	13,707,471	2,849,344	42,288,643
Segment liabilities – Non current	291,250	6,176,102	20,331,102	26,798,454
Segments liabilities - Current	3,300,688	2,821,764	595,574	6,718,026
	3,591,938	8,997,866	20,926,676	33,516,480

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

4.Segment information and revenue from contracts with customers (continued)

Segment information (continued)

2022	Hospitality Operations	Property Trading	Unallocated	Total
	€	€	€	€
Revenue	-	5,960,500	-	5,960,500
Segment Profit	-	1,446,404	-	1,446,404
Other operating income	-	104,210	-	104,210
Group EBITDA	-	1,550,614	-	1,550,614
Depreciation and amortisation	-	-	(5,081)	(5,081)
Finance costs	-	-	(48,120)	(48,120)
Gains on financial instrument at FVOCI reclassified to profit or loss upon derecognition			13,195	13,195
Interest income	-	-	21	21
Profit before taxation	-	1,550,614	(39,985)	1,510,629
Taxation	-	-	(333,306)	(333,306)
Profit for the year	-	1,550,614	(373,291)	1,177,323
Segment assets – Non current	18,756,400	2,705,081	-	21,461,481
Segments assets - Current	1,438,597	4,343,340	2,254,440	8,036,377
	20,194,997	7,048,421	2,254,440	29,497,858
Segment liabilities – Non current	-	2,142,816	15,406,457	17,549,273
Segments liabilities - Current	1,905,268	1,015,696	578,609	3,499,573
	1,905,268	3,158,512	15,985,066	21,048,846

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

4.Segment information and revenue from contracts with customers (continued)

Revenue from contracts with customers

i.Disaggregation of revenue from contracts with customers

Group	Group	Company	Company
		(12 months)	(11 months)
2023	2022	2023	2022
€	€	€	€

Real estate segment
Sale of property held for development and resale	384,000	5,960,500		-
Hospitality segment
Accomodation and related services	2,921,538	-	-	-
Other services	341,183	-	-	-
Interest income	-	-	1,017,280	447,839
	3,646,721	5,960,500	1,017,280	447,839

ii.Liabilities related to contracts with customers

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

Group	Group	Company	Company
2023	2022	2023	2022
€	€	€	€

Contract liabilities
Advanced deposits – Real estate segment (note 20)	-	323,850	-	-
Deferred income – Accomodation and related services	25,745	-	-	-
	25,745	323,850	-	-

iii.Revenue that was included in advanced deposits at the beginning of the period

	Group	Group	Company	Company
	2023	2022	2023	2022
	€	€	€	€
Property trading operators	323,850	-	-	-

5.Interest income

The amounts recognised within this line item includes interest income recognised using the effective interest method on loans advanced to the Company’s subsidiaries. The effective interest rate on the instrument is 5.3% on €16,000,000 first bond issue and 7.2% on €5,000,000 second bond issue. Details of bonds in issue in note 22.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

6.Investment income

Group	Group	Company	Company
		(12 months)	(11 months)
2023	2022	2023	2022
€	€	€	€

Interest income	22	21	-	-
Dividend income	17,164	-	17,164	5,000
	17,186	21	17,164	5,000

7.Other operating income

Group	Group	Company	Company
		(12 months)	(11 months)
2023	2022	2023	2022
€	€	€	€

Rental income – note 14

120,460

104,210

8.Finance costs

Group	Group	Company	Company
		(12 months)	(11 months)
2023	2022	2023	2022
€	€	€	€

Included in profit or loss
Interest on bond (i)	415,833	-	893,333	388,000
Interest on bank borrowings	53,843	22,314	-	-
Bond issue costs	66,464	25,806	66,464	25,806
	536,140	48,120	959,797	413,806
Interest capitalised in statement of financial position
Bond interest included in Property, plant and equipment	477,500	-	-	-
Bond interest included in Property, plant and equipment under development	-	388,000	-	-
Bank interest and charges included in inventory	298,565	60,917	-	-
	776,065	448,917	-	-

(i) Interest on bond

This amount represents interest expense on the debt securities in issue, as set out in note 21 to these financial statements.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

9.Expenses by nature

Group	Group	Company	Company
		(12 months)	(11 months)
2023	2022	2023	2022
€	€	€	€

Cost of development	77,017	4,331,125	-	-
Direct costs	715,585	136,729	-	-
Wages and salaries	529,565	-	-	-
Directors’ remuneration	84,860	11,268	18,000	11,268
Utility expenses	120,723	-	-	-
Franchise fees	89,393	-	-	-
Repairs and maintenance	31,677	-	-	-
Other expenses	516,196	34,974	41,379	9,757
	2,165,016	4,514,096	59,379	21,025

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
		(12 months)	(11 months)
2023	2022	2023	2022
€	€	€	€

Annual statutory audit	18,650	16,000	6,400	6,400
Tax compliance services	2,000	2,000	500	500
	20,650	18,000	6,900	6,900

10.Staff costs and employee information

Group	Group	Company	Company
		(12 months)	(11 months)
2023	2022	2023	2022
€	€	€	€

Gross wages, salaries and director’s fees	574,839	11,268	18,000	11,268
Social security cost	39,586	-	-	-
	614,425	11,268	18,000	11,268

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

Group	Group	Company	Company
		(12 months)	(11 months)
2023	2022	2023	2022
Number	Number	Number	Number

Administrative	3	-	-	-
Operational	15	-	-	-
Directors	5	5	5	5
	23	5	5	5

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

11.Tax charge

Group	Group	Company	Company
		(12 months)	(11 months)
2023	2022	2023	2022
€	€	€	€

Deferred tax charge	108,081	-	(663)	-
Current tax charge	107,524	333,306	2,575	4,553
	215,605	333,306	1,912	4,553

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

	Group	Group	Company	Company
			(12 months)	(11 months)
	2023	2022	2023	2022
	€	€	€	€
Profit for the year	538,756	1,510,629	15,268	31,203
Tax at the applicable rate of 35%	188,565	528,720	5,344	10,921
Tax effect of:
Deferred tax movement not recognised	(42)	(21,018)	-	-
Exempt income	(3,063)	(4,618)	-	(6,368)
Depreciation charge not deductible for tax purposes by way of capital allowances	1,778	1,778	-	-
Expenses disallowed for tax purposes	55,590	16,637	-	-
Difference arising on income subject to different tax rates	(48,159)	(209,137)	(3,432)	-
Difference arising on interest capitalised	20,936	20,944	-	-
Tax charge for the year	215,605	333,306	1,912	4,553

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

12.Property, plant and equipment

	Improvement to premises	Furniture, fixtures and fittings	Plant & Machinery	Computer equipment	Other fixed assets	Total
Group		€	€	€	€	€
Cost
At 1st January 2022	-	-	-	-	30,483	30,483
Additions	-	-	-	-	-	-
At 1st January 2023	-	-	-	-	30,483	30,483
Reclassified from PPE under development	18,464,562	3,211,911	369,315	346,438	3,399,544	25,791,770
Additions	-	-	-	-	-	-
At 31st December 2023	18,464,562	3,211,911	369,315	346,438	3,430,027	25,822,253
Depreciation
At 1st January 2022	-	-	-	-	20,321	20,321
Charge for the year	-	-	-	-	5,081	5,081
At 1st January 2023	-	-	-	-	25,402	25,402
Charge for the year	79,337	187,361	39,063	50,522	155,051	511,334
At 31st December 2023	79,337	187,361	39,063	50,522	180,453	536,736
Net Book Value
At 31 December 2023	18,385,225	3,024,550	330,252	295,916	3,249,574	25,285,517
At 31 December 2022	-	-	-	-	5,081	5,081

Use as colleteral

Land and Buildings held by the Group, with a carrying value of €16m (2021: €16m) are pledges as security for non-current borrowings

13.Property, plant and equipment under development

Group	Group	Company	Company
2023	2022	2023	2022
€	€	€	€

Cost
At 1 January	18,756,400	-	-	-
Additions	7,035,370	18,756,400	-	-
Transfer to property, plant and equipment	(25,791,770)	-	-	-
At 31 December	-	18,756,400	-	-

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

14.Investment property

Group	Group	Company	Company
2023	2022	2023	2022
€	€	€	€

At Fair value
At 1 January	2,700,000	2,700,000	-	-
At 31 December	2,700,000	2,700,000	-	-

Measuring investment property at fair value

Investment property principally land and buildings, are held for long-term rental yields and are not occupied by the Group. These are valued annually on 31 December comprising open market value approved by the directors on the basis of a professional valuation prepared by an independent architect.

Significant estimate - 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 investment property comprises 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.

Property fair value measurements at 31 December 2023 and 2022, 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 note 24 to these financial statements.

Valuation techniques

The Group’s investment property is measured by an independent valuer on an annual basis as required by IAS 40.

The investment property are valued using a capitalisation rate approach, whereby the rental price per square meter is used as the measure to calculate the property’s net operating income.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

14.Investment property (continued)

Valuation processes

The Group engages an external, independent valuer to determine the fair value of the property at the end of every financial year. The Group’s investment property comprises of a leased showroom.

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

2023

2022

-Description

€

Investment properties

Leased buildings

2,700,000

Comparison Approach

Sales price

per square

metre

The higher the sales price per square metre the higher the fair value

€2.8k/sqm

*These inputs represent the range of inputs used in the external valuation carried out as at 31 December 2023 and 2022.

Presenting cashflows

The Group classifies cashflows to acquire or construct investment property as investing cashflows and rental inflows as operating cashflows

Amounts recognised in profit or loss for investment properties

Group	Group	Company	Company
		(12 months)	(11 months)
2023	2022	2023	2022
€	€	€	€

Rental income from lease

120,460

104,210

Lease arrangements.

The Group’s investment property is leased to tenants under operating leases with rentals payable on a quarterly basis. Lease payments include fixed annual increases, but there are no variable lease payments that depends on an index.

Use as collateral

Investment property held by the Group, with a carrying amount of €2,700,000 (2022: €2,700,000) are pledged as security for bank borrowings.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

15.Interest in subsidiaries and associates

Interest in associates

		Group	Group	Company	Company
				(12 months)	(11 months)
		2023	2022	2023	2022
		€	€	€	€
At 1 January		-	-	-	-
Acquisition of shares in associate		2,500	-	-	-
Capital contribution advances	Note	1,653,898	-	-	-
Share of operating losses (after tax)		(33,119)	-	-	-
At 31 December		1,623,279	-	-	-
Net assets		3,246,544	-	-	-
Group share of net assets		1,623,279	-	-	-

During the current financial year the Group advanced the amount of €1,653,898 as a capital contribution to its associate; Acmus Limited. This amount is receivable at the discretion of the Associate.

Interest in subsidiaries

On 28 April 2022, the Company acquired 100% of the share capital of The Ona Property Hospitality Ltd., 100% of the share capital of The Ona Property Development Ltd. and 100% of the share capital of The Ona Real Estate Ltd. through an exchange of shares for a consideration of 1,200 100% paid up Ordinary shares of €1 each, 100% paid up Ordinary shares of €1 each and 300,000 100% paid up Ordinary shares of €1 each, respectively.

Shares in subsidiaries	Total
€	€

Company
At 1st January 2023	4,062,486	4,062,486
At 31 December 2023	4,062,486	4,062,486

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.

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

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

15.Interest in subsidiaries and associates (continued)

Shares in subsidiaries and associate undertaking represent the following investments:

2023

2022

Company

Relationship

Registered address

Principal Activity

% Holding

%Holding

The Ona Hospitality Ltd.

Subsidiary

AC Hotel St. Julians

13, Lourdes Lane

San Giljan, STJ 3311

Non-operating

100%

The Ona Property Development Ltd.

Subsidiary

AC Hotel St. Julians

13, Lourdes Lane

San Giljan, STJ 3311

Real estate operations

100%

The Ona Real Estate Ltd.

Subsidiary

AC Hotel St. Julians

13, Lourdes Lane

San Giljan, STJ 3311

Real estate & Hospitality operations

100%

Acmus Limited

Associate

Juel Group, Avian Hill, Triq l-Is[anjulett C/W Triq il-Gallina, Kappara

Real estate operations

49.99%

16.Inventories

	Group	Group	Company	Company
	2023	2022	2023	2022
	€	€	€	€
Property cost of land and development costs	8,624,376	3,310,412	-	-
Capitalised borrowing costs	550,129	289,043	-	-
	9,174,505	3,599,455	-	-

Inventores consist of land acquired for development and resale. Inventory is carried at the lower of cost and net realisable value. Cost comprises the purchase cost of acquiring the land and other costs incurred during the subequent development.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

17.Trade and other receivables

		Group	Group	Company	Company
		2023	2022	2023	2022
		€	€	€	€
Non-Current
Loans and receivables
Amounts due from subsidiaries	i	-	-	19,491,929	14,376,923

		Group	Group	Company	Company
		2023	2022	2023	2022
		€	€	€	€
Current
Trade and other receivables
Amounts due from subsidiaries	i	-	-	3,460,438	3,723,414
Amounts owed by commonly controlled entities	ii	833,050	92,488	-	-
Trade receivables		9,070	-	-	-
Other receivables		61,276	211,426	21,567	1,200
Prepayments and accrued income	iii	75,258	1,684,611	11,488	-
Deferred costs		-	27,989	-	-
Indirect tax refundable		74,797	123,973	-	-
		1,053,451	2,140,487	3,493,493	3,724,614

i.Amounts due from subsidiaries

By virtue of the Prospectus dated 31st May 2022, The Ona p.l.c. issued for subscription by the general public 160,000

Secured bonds having a nominal value of €100 each for an aggregate principal amount of €16,000,000. (Refer to note 22.)

During the financial year, The Ona P.L.C issued 5,000 unsecured notes having a nominal value of €1,000 per note up to an aggregate amount of €5,000,000.

€20,530,000 these amounts have been loaned to the Company’s subsidiaries as follows:

-€15,680,000 at an annual rate of 5.3%, out of which €15,655,000 have been advanced as at 31 December 2023 (2022: €14,376,923). These loans are secured and to be repaid in fully by 21 June 2034.

-€4,850,000 at an annual rate of 7.2%, out of which €3,836,929 have been advanced as at 31 December 2023. These loans are unsecured and to be repaid in full by 2028.

The Company’s subsidiaries, the guarantors in respect of the Company’s bond issue have undertaken to pay all amounts

of principal and interest that will become due and payable by the Company to the bondholders.

The carrying amount of the loans is considered a reasonable approximation of its fair value.

No loss allowance has been recognised as any such impairment would be insignificant (Refer to note 30).

The remaining receivable balance of €3,460,438 is interest free, unsecured and repayable on demand as per loan agreements in place.

ii.Amounts due from commonly controlled entities

These amounts are interest free, unsecured and repayable on demand.

iii.Prepayments and accrued income

In the prior year, the majority of these balances relates to deposits paid on work or acquisition of properties.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

18.Financial assets at fair value through other comprehensive income

Financial assets at fair value through other comprehensive income (FVOCI) comprise of debt investments in listed bonds in the local market. On disposal of these investments, any related balance within the FVOCI reserve is reclassified to profit and loss within ‘Gains/(Losses) reclassified to profit or loss’ upon derecognition of the financial instrument.

Group	Group	Company	Company
2023	2022	2023	2022
€	€	€	€

At 1 January	-	-	-	-
Additions	2,989,339	2,307,433	2,989,339	-
Fair value recognized in comprehensive income	-	13,195	-	-
Derecognition of debt investment	(2,013,905)	(2,307,433)	(2,013,905)	-
Gain reclassified to profit and loss upon derecongition	-	(13,195)	-	-
Dividends received	16,070	-	16,070	-
At 31 December	991,504	-	991,504	-

19.Trade and other payables

Group	Group	Company	Company
2023	2022	2023	2022
€	€	€	€

Trade payables	1,869,755	153,452	-	-
Capital creditors	1,866,643	1,905,269
Accruals	921,202	749,276	574,835	396,143
Deferred income	197,955	8,391	-	-
Indirect tax payable	10,280	5,469	-	-
Accruals and deferred income	110,177	-	-	-
Advanced deposits	-	323,850	-	-
	4,976,012	3,145,701	574,835	396,143

20.Other financial liabilities

Group	Group	Company	Company
2023	2022	2023	2022
€	€	€	€

Other financial liabilities - Current
Shareholders’ current accounts (i)	276,338	245,983	-	-

(i) Shareholders’ current accounts

The balances owed to shareholders are unsecured, interest free and repayable on demand.

During the prior year, the amount of €3,581,160 was capitalised to share capital as part of group restructuring.

Refer to note 1 to the financial statements.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

21.Current tax liability

	Group	Group	Company	Company
	2023	2022	2023	2022
	€	€	€	€
At 1 January	50,389	51,222	4,553	-
Charge for the year	107,524	333,306	2,574	4,553
Tax payment	(138,361)	(334,139)	(5,644)	-
At 31 December	19,552	50,389	1,483	4,553

22.Borrowings

Group	Group	Company	Company
2023	2022	2023	2022
€	€	€	€

Current
Bank loans (i)	92,400	57,500	-	-
Bank overdraft	1,353,724	-	-	-
	1,446,124	57,500	-	-

	Group	Group	Company	Company
	2023	2022	2023	2022
	€	€	€	€
Non-current
Bank loans (i)	5,851,358	1,926,817	-	-
Bonds (ii)	20,331,765	15,406,456	20,331,765	15,406,456
Third party loans	291,250	-	-	-
	26,474,373	17,333,273	20,331,765	15,406,456

Total borrowings

27,920,497

17,390,773

20,331,765

15,406,456

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
	2023	2022	2023	2022
	€	€	€	€
Face value of bonds
Bonds	21,000,000	16,000,000	21,000,000	16,000,000
Issue costs	(760,505)	(619,350)	(760,505)	(619,350)
Accumulated amortisation	92,270	25,806	92,270	25,806
Net book amount	(668,235)	(593,544)	(668,235)	(593,544)
Amortised cost	20,331,765	15,406,456	20,331,765	15,406,456

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

22.Borrowings (continued)

i.Bank loans and overdraft

The Group’s bank loan facilities as at 31st December 2023 amounted to €9,143,555 (2022: €1,984,316) and overdraft facility of €1,353,724 (2022: nil), out of which the amount of €3,199,797 is not yet utilised as at 31 December 2023.

These facilities are secured by general hypothecs and special hypothecs over the Group’s assets and guaranteed by the subsidiaries and its shareholders, which have bound themselves jointly and severally liable for the repayment of the loans and the interest thereon, pursuant and subject to the terms and conditions in the sanction letter.

Repayment of these loans is to be made from proceeds derived from the sale of properties as laid out in the repayment terms in the sanction letters.

ii.Bonds

By virtue of the Prospectus dated 31st May 2022, The Ona p.l.c. issued for subscription by the general public 160,000 secured bonds having a nominal value of €100 each for an aggregate principal amount of €16,000,000. These bonds have been issued at par.

The bonds are subject to a fixed interest rate of 4.5% per annum payable on the 21 of June of each year up to redemption date. All bonds, unless previously purchased and cancelled, will be redeemable at par on 21 June 2034 or, at the sole option of the Group, any date falling between 21 June 2028 and 20 June 2034.

During the financial year, The Ona P.L.C issued 5,000 unsecured notes at par having a nominal value of €1,000 per note up to an aggregate amount of €5,000,000. These unsecured notes are subject to a fixed interest rate of 6.5% per annum payable annually on 23 June of each year. The redemption date of these unsecured notes is 23 June 2028.

The €16m bonds are subject to the terms and conditions in the prospectus and are listed on the Malta Stock Exchange. The €5m unsecured participation notes are transferable but not traded on any regulated market or other trading facility. These are subject to the terms and conditions in the prospectus dated 1 June 2023.

Quoted Market Price

Group	Group	Company	Company
2023	2022	2023	2022
€	€	€	€

€16,000,000 secured bond	98	99	98	99
€5,000,000 unsecured notes	Not traded	-	Not traded	-

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 €15,680,000 (2022: €15,840,000). The fair value calculation is classified within Level 1 of IFRS 13’s fair value hierarchy.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

22.Borrowings (continued)

Group	Group	Company	Company
2023	2022	2023	2022
€	€	€	€

Interest rate exposure:

At floating rates

7,588,732

1,984,317

At fixed rates

20,331,765

15,406,456

20,331,765

15,406,456

27,920,497

17,390,773

20,331,765

15,406,456

Group

Company

2023

2022

2023

2022

Weighted average effective interest rates
At the balance sheet date:
Bank loans	4.26	4.3	-	-
Bond	4.98	4.50	4.98	4.50
	Group	Group	Company	Company
	2023	2022	2023	2022
	€	€	€	€
Maturity of long-term borrowings:
Between 1 and 5 years	8,440,531	1,811,816	4,873,696	-
Over 5 years	18,033,842	15,521,457	15,458,069	15,406,456
	26,474,373	17,333,273	20,331,765	15,406,456

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 €16,000,000 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 31st May 2022.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

23.Share capital

Group	Group	Company	Company
2023	2022	2023	2022
€	€	€	€

Authorised share capital
301,200 Ordinary shares of € each	-	-	-	-
9,999,999 “A” Ordinary shares of €1 each	9,999,999	9,999,999	9,999,999	9,999,999
1 “B” Ordinary shares of €1 each	1	1	1	1
	10,000,000	10,000,000	10,000,000	10,000,000
Issued share capital
301,200 Ordinary shares of € each	-	-	-	-
7,271,692 “A” Ordinary shares of €1 each	7,271,692	7,271,692	7,271,692	7,271,692
1 “B” Ordinary shares of €1 each	1	1	1	1
	7,271,693	7,271,693	7,271,693	7,271,693

The Ordinary “A” shares issued by the Company rank pari passu in all respects.

By virtue of a group restructuring carried out in April 2022 accounted for under the capital reorganisation method in these financial statements The Company acquired 100% share capital of the Ona Real Estate Ltd., The Ona Property Development Ltd. and The Ona Hospitality Ltd. through an exchange of shares for a consideration of 7,270,493 100% paid up ordinary shares of €1 per share. Refer to note 25 for details of the Group reorganisation.

The following table shows the movement in the issued share capital of the Group and the Company.

Group	Group	Company	Company
2023	2022	2023	2022
€	€	€	€

		-		-
At 1 January	7,271,693	301,200	7,271,693
Cash issue of shares: The Ona p.l.c.	-	1,200	-	1,200
Cash issue of shares of The Ona Hospitality Ltd.	-	1,200	-	-
Reorganisation of group	-	3,386,933	-	3,689,333
Capitalisation of shareholder’s loans	-	3,581,160	-	3,581,160
At 31 December	7,271,693	7,271,693	7,271,693	7,271,693

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

24.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 15 to these financial statements.

Group	Group	Company	Company
2023	2022	2023	2022
€	€	€	€

At 1 January

836,052

At 31 December

836,052

The fair value reserve is a non-distributable reserve

25.Group reorganisation

On 28th April 2022, the Company acquired 100% of the share capital of the Ona Real Estate Ltd., The Ona Property Development Ltd. and The Ona Hospitality Ltd. through an exchange of shares for a consideration of 7,270,493 100% paid up ordinary shares of €1 per share.

Following this transaction, the shareholders of The Ona Real Estate Ltd. and The Ona Property Development Ltd. increased their shareholding in 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 April 2022, being the date of the legal reorganisation:

2023/2022

€

Consideration
Company
Non-cash consideration	3,689,333
Total consideration	3,689,333
Recognised amounts of identifiable assets acquired, and liabilities assumed
Net assets acquired	4,062,486
	4,062,486

Equity adjustments:
Other reserves created upon reorganisation: Company	(373,153)
	3,689,333
Investment in subsidiaties before reorganisation	(302,400)
Other reserves reversed upon reorganisation: Group	3,386,933

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

26.Cash and cash equivalents

Group	Group	Company	Company
2023	2022	2023	2022
€	€	€	€

Cash at bank and in hand	1,435,387	982,763	527,860	953
Security trust (i)	25,000	1,313,672	25,000	1,313,672
Bank overdraft (note 22)	(1,353,724)	-	-	-
	106,663	2,296,435	552,860	1,314,625

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

(i) Security trust

This amount represents proceeds from the issuance of the Secured Bonds held by the Security Trustee. These proceeds are released in accordance with the terms listed on the Security trust deed dated 31st May 2022 and at the satisfaction of The Company and the respective Guarantor.

27.Deferred tax liability/ (asset)

Deferred taxes are calculated on all temporary differences under the liability method using a principal tax rate of 35%/ 10% (2022: 35%/10%). The movement in the deferred tax account is as follows:

Group	Group	Company	Company
2023	2022	2023	2022
€	€	€	€

Balance as the beginning of the year	216,000	216,000	-	-
Recognised in profit and loss
Movement in effect of capital allowances over depreciation	364,639	-	-	-
Movement in absorbed tax losses and capital allowances	(256,558)	-	(663)	-
	108,081	-	(663)	-
Balance at the end of the year	324,081	216,000	(663)	-

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

28.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
	2023	2022	2023	2022
	€	€	€	€
Revenue
Interest income	-	-	1,017,280	447,839
Dividends received	-	-	-	5,000
	-	-	1,017,280	452,839
Loan to related parties outisde the Group	650,882	-	-	-
Assignment of loans
Assignment of loans from related party outside Group to shareholder	-	3,581,162	-	-
Assignment of loans from subsidiaries to Parent	-	-	-	(3,581,162)
Transactions with owners
Capitalisation of loans	-	3,581,162		3,581,162

On 19th April 2022, by virtue of a Group restructuring accounted for under the reorganisation method in these financial statements (refer to note 25 to the financial statements), the Group companies assigned the amount of €3,581,162 previously classified as borrowings repayable in full at the option of the lender within 30 days from receipt of notice, owed to related parties outside Group to the ultimate shareholder.

Consequently, these loans were assigned to the new Parent company on 19th April 2022 which resulted in Parent Company becoming the new debtor of the shareholder. This payable balance was subsequentely capitalised to ordinary shareholding on 27th April 2022. Refer to note 1 to these financial statements.

The Key management personnel include the board of directors. Key management compensation, consisting of directors’ remuneration, has been disclosed in note 10 to the financial statements.

29.Commitments

Capital expenditure:

Commitments for capital expenditure not provided for in these financial statements are as follows:

Group	Group	Company	Company
2023	2022	2023	2022
€	€	€	€

Authorised but not contracted		-	-
Contracted but not provided for	3,519,887	10,220,568	-

The above commitments are going to be financed through bank borrowings sanctioned as at year end not yet utilised

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

30.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. 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 €16,000,000 twelve-year bond incurring interest of 4.50% and €5,000,000 five-year bond incurring interest at 6.5%. Debt securities issued at fixed rates expose the Group to fair value interest rate risk.

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 +/- €113,830 (2022 at 1.5% shift: +/- €30,000).

Credit risk

Credit risk arises from cash and cash equivalents, funds held by the Security trustee 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
2023	2022	2023	2022
€	€	€	€

Carrying amounts
Amounts due from subsidiaries	-	-	22,952,367	18,100,337
Amounts due from commonly controlled entity	833,050	92,488
Trade and other receivables	220,401	2,047,999	33,055	1,200
At 31 December	1,053,451	2,140,487	22,985,422	18,101,537

Financial assets at amortised cost comprise of loans to subsidiary companies as described in note 18 to the financial statements. 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 ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

30.Financial risk management (continued)

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 and other receivables;

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

•Cash and cash equivalents; and

•Financial assets held at FVOCI

Trade and other receivables

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.

The expected loss rates are based on the payment profiles of sales over a period of 12 months before 31 December 2023 and 31 December 2022 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 2023 and 2022 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 2023 and 2022.

Trade receivables and other receivables 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 and security notes raised by the Company loaned to its subsidiaries. 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.

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.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

30.Financial risk management (continued)

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.

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.

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 notes 20 and 23 to the financial statements. 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.

Based on the outcome of the cash flow, 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 2022 financial statements.

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.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

30.Financial risk management (continued)

Group	Group	Company	Company
2023	2022	2023	2022
€	€	€	€

Within one year
Trade and other payables	4,976,012	3,145,701	574,385	396,142
Current income tax liability	19,552	50,389	1,483	4,553
Bond interest	1,045,000	720,000	1,045,000	720,000
Other financial liabilities	276,338	245,983	-	-
Bank loan	313,951	144,310	-	-
	6,630,853	4,306,383	1,621,318	1,120,695

Between 2 - 5 years
Other financial liabilities	-	-	-	-
Bank loan	6,246,802	1,972,757	-	-
Bond	9,180,000	2,880,000	9,180,000	2,880,000
	15,426,802	4,852,757	9,180,000	2,880,000

Over 5 years
Bank loan	-	124,304		-
Bond interest and principal	20,320,000	21,040,000	20,320,000	21,040,000
	20,320,000	21,164,304	20,320,000	21,040,000
Total	42,377,655	29,935,444	31,121,318	25,040,695

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 2023 and 31 December 2022, 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 22.

31.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 22 after deducting cash and bank balances, presented in note 26) 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.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

32.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 at 1 January 2023	Cash flows	Other liability related changes	As at 31 December 2023
	€	€	€	€

Bank borrowings	1,984,317	3,959,441		5,943,758
Bonds	15,406,456	4,925,309	-	20,331,765
Third party loans	-	300,000	(8,750)	291,250
	17,390,773	9,184,750	(8,750)	26,566,773

Group	As at 1 January 2022	Cash flows	Other liability related changes	As at 31 December 2022
	€	€	€	€

Bank borrowings	2,797,208	(812,891)	-	1,984,317
Related party borrowings	-
Bonds	-	15,406,456	-	15,406,456
	2,797,208	14,593,565	-	17,390,773

Company

As at 1 January 2023

Cash flows

Other liability related changes

As at 31 December 2023

€

Bonds

15,406,456

4,925,309

20,331,765

Company

As at 1 January 2022

Cash flows

Other liability related changes

As at 31 December 2022

€

Bonds

15,406,456

33.Fair values

At 31 December 2023 and 31 December 2022, the carrying amounts of financial assets and financial liabilities classified with current assets and current liabilities respectively, approximated their fair values due to the short-term maturities of these assets and liabilities.

THE ONA P.L.C.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

_____________________________________________________________________________________________

______________________________________________________________________________________________________

34.Comparative figures

Certain comparative figures have been changed to comply with the current year’s presentation.

35.Statutory information

The Ona p.l.c. is a limited liability Company and is incorporated in Malta.

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF

THE ONA 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 The Ona p.l.c. set out on pages 8 to 48 which comprise the consolidated and parent company statement of financial position as at 31 December 2023, 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 2023, 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).

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF

THE ONA P.L.C.

__________________________________________________________________________________________________

______________________________________________________________________________________________________

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.

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

€90,000

How we determined it

2% 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%, 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 €650 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 matter described below to be the key audit matter to be communicated in our report.

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF

THE ONA P.L.C.

__________________________________________________________________________________________________

______________________________________________________________________________________________________

Risk Description

The principal activity of the Company, The Ona p.l.c. is to raise financial resources from the capital market to finance the capital projects of the companies forming part of The Ona Group. These debt securities are guaranteed by the subsidiaries of the Company, and the hotel property held by one of the subsidiaries. The funds received from the debt securities in issue have been advanced to its subsidiaries, The One Real Estates Limited and The Ona Hospitality Limited, under similar duration and terms, with a higher lending rate in order for The Ona p.l.c. to cover its operating expenses. The recoverability of the loan advanced to The Ona Real Estates Limited and the debt servicing thereon is dependant on the success of the operations of the subsidiary within the Group.

How the scope of our audit responded to the risk

Recoverability of Parent Company bond proceeds loaned to its Subsidiary Companies, The Ona Real Estates Limited and The Ona Hospitality Limited

How the scope of our audit responded to the risk

Loans and receivables include funds advanced to the subsidiary companies, The Ona Real Estates Ltd, The Ona Hospitality Limited and The Ona property development, who are the guarantors of the bonds issued by the Company. Loan balances with this related party as at 31 December 2023 amounted to €19.4 million (2022: 14.4 million).

As explained in accounting policy Note 2, the recoverability of these loans is assessed at the end of each financial year.

These loans are a significant asset of the Company, which has similar duration and terms to the bond issue, which is why we have given additional attention to this area.

We have agreed the terms of these loans to supporting loan agreements.

We have assessed the financial soundness of the subsidiary company, The Ona Real Estates Ltd, which is also the guarantor of the Company’s bonds. In doing this, we made reference to the latest audited financial statements, cash flow projections, forecasts and other prospective information made available to us.

The results of our testing were satisfactory and the amount advanced to the subsidiary companies are appropriately recorded in the financial statements and disclosed in Note 18

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.

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF

THE ONA P.L.C.

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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 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.

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF

THE ONA P.L.C.

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-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 The Ona P.L.C for the year ended 31 December 2022, entirely prepared in a single electronic reporting format.

Responsibilities of the directors

The directors are responsible for the preparation of the 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

THE ONA 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 2023 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 5 to 7 has been properly prepared in accordance with the requirements of the Capital Markets Rules issued by the Malta Financial Services Authority.

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF

THE ONA P.L.C.

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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.

-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.

Appointment

We were first appointed as auditors of the Group and the Company for the financial period ended 31 December 2023. Our appointment has been renewed by shareholders resolution representing a total period of uninterrupted appointment of 2 years.

This copy of the audit report has been signed by:

MICHAEL CURMI

for and on behalf of

VCA CERTIFIED PUBLIC ACCOUNTANTS

29 April 2024