Company Registration Number: C87384
EXALCO FINANCE p.l.c.
Annual Financial Report and Financial Statements
31 December 2024
EXALCO FINANCE p.l.c.
Annual Financial Report and Financial Statements - 31 December 2024
Pages
Directors’ report 1 - 4
Corporate governance - Statement of compliance 5 - 16
Statement of financial position 17 - 18
Statement of comprehensive income 19
Statement of changes in equity 20
Statement of cash flows 21
Notes to the financial statements 22 - 34
Independent auditor’s report 35 - 44
EXALCO FINANCE p.l.c.
Annual Financial Report and Financial Statements - 31 December 2024
1
Directors’ report
The directors present their Annual Financial Report and the audited financial statements for the year ended
31 December 2024.
Principal activities
The company’s principal activity is to carry on the business of a finance company, by raising funds to finance
the operations and capital projects of Exalco Properties Limited, a main company forming part of Exalco
Group.
Review of business
During the period under review, the company registered a profit before taxation amounting to €65,129
(2023: €57,749). After allowing for taxation, the profit for the period amounted to €42,515 (2023: €37,537).
Financial performance
Finance income amounting to €760,314 (2023: €756,152) is generated from a facility fee and interest
charged on the loan advanced to the company’s fellow subsidiary, Exalco Properties Limited. Financial
costs comprise interest payable on the outstanding bond issue and amortisation of the issue costs thereof
amounting to €630,000 (2023: €630,000). Administrative expenses mainly representing compliance costs,
together with directors’ and professional fees amounted to €65,185 (2023: €68,403).
Financial position
The company’s balance sheet is primarily made up of the 4% secured bonds in issue of €15 million and a
corresponding loan advanced to Exalco Properties Limited, the guarantor of this bond. The loan receivable
and the bond issued during 2018 are classified in the company’s balance sheet under non-current assets
and non-current liabilities respectively as at 31 December 2024 and 2023. The company’s equity as at the
end of the financial year amounted to €465,022 (2023: €422,507).
Guarantor’s performance for 2024
The financial statements of Exalco Properties Limited, the guarantor of the bonds issued by the company
show a net asset position of €54.7 million as at 31 December 2024 (2023: €52.9 million).
The Guarantor’s financial results for the year ended 31 December 2024 show a profit after tax of €2.4 million
compared to a €2.2 million profit after tax registered during the 2023 financial year.
The 2024 financial results are positively impacted by revenue generated of €5.6 million compared to €5.3
million generated in 2023. The increase in revenue is mainly attributable to a number of revised rental
contracts in line with market rates.
Outlook for 2025
The directors do not expect any significant changes in the company’s activities in the short-term period and
expect that the company will be able to honour its obligations with particular reference to the interest payable
on its listed bonds and is expected to register a surplus based on its projections for the foreseeable future.
This assessment takes into account a detailed cash flow assessment made by its guarantor when assessing
its ability to operate as a going concern in the coming year.
EXALCO FINANCE p.l.c.
Annual Financial Report and Financial Statements - 31 December 2024
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Directors’ report - continued
Outlook for 2025 - continued
Management shall continue to attentively monitor ongoing developments, conscious of the fact that in
unprecedented times such as these the situation may deteriorate rapidly and for prolonged periods of time.
Management remains committed to take all appropriate steps to mitigate the potential negative impact that
may be felt by the company and its operations as a consequence of any unforeseen circumstance.
Financial risk management
The company’s activities expose it to a variety of financial risks, including credit risk and liquidity risk. Refer
to Note 2 to these financial statements.
Results and dividends
The statement of comprehensive income is set out on page 19. The directors do not recommend the
payment of a dividend. Profits carried forward at the reporting date amounted to €215,022 (2023: €172,507).
Directors
The directors of the company who held office during the year were:
Alexander Montanaro
Jean Marc Montanaro
Michael Montanaro
Mario P. Galea
Dr. Kevin Dingli
Lawrence Zammit
The company’s Articles of Association did not require the directors to retire in the year under review.
EXALCO FINANCE p.l.c.
Annual Financial Report and Financial Statements - 31 December 2024
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Directors’ report - continued
Statement of directors’ responsibilities for the financial statements
The directors are required by the Companies Act (Cap. 386 of the laws of Malta), to prepare financial
statements which give a true and fair view of the state of affairs of the company as at the end of each
reporting period and of the profit or loss for that period.
In preparing the financial statements, the directors are responsible for:
• ensuring that the financial statements have been drawn up in accordance with International Financial
Reporting Standards as adopted by the EU;
• selecting and applying appropriate accounting policies;
• making accounting estimates that are reasonable in the circumstances; and
• ensuring that the financial statements are prepared on the going concern basis unless it is inappropriate
to presume that the company will continue in business as a going concern.
The directors are also responsible for designing, implementing and maintaining 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, and that comply with the Companies Act. They 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 financial statements of Exalco Finance p.l.c. for the year ended 31 December 2024 are included in the
Annual Financial Report 2024 which may be accessed on the Exalco Group’s website. The directors are
responsible for the maintenance and integrity of the Annual Financial Report on the website in view of their
responsibility for the controls over, and the security of, the website. Access to information published on the
Group’s website is available in other countries and jurisdictions, where legislation governing the preparation
and dissemination of financial statements may differ from requirements or practice in Malta.
The directors confirm that, to the best of their knowledge:
• the financial statements give a true and fair view of the financial position of the company as at 31
December 2024, and of the financial performance and the cash flows for the year then ended in
accordance with International Financial Reporting Standards as adopted by the EU; and
• the Annual Financial Report includes a fair review of the development and performance of the
business and the position of the company, together with a description of the principal risks and
uncertainties that the company and the guarantor face.
Going concern statement pursuant to Capital Markets Rule 5.62
After making the enquiries considered necessary and appropriate, the directors, at the time of approving
the financial statements, have determined that it is reasonable to assume that the company has adequate
resources to continue operating for the foreseeable future. For this reason, the directors have adopted the
going concern basis in preparing the financial statements.
EXALCO FINANCE p.l.c.
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Directors’ report - continued
Auditors
PricewaterhouseCoopers have indicated their willingness to continue in office and a resolution for their re-
appointment will be proposed at the Annual General Meeting.
Signed on behalf of the Board of Directors on 7 April 2025 by Alexander Montanaro (Chairman) and Jean
Marc Montanaro (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in
conjunction with the Annual Financial Report.
Registered office:
Exalco Finance p.l.c.
Cornerstone Business Centre
Level 4
16 September Square
Mosta MST 1180
Malta
Telephone (+356) 2142 4430
EXALCO FINANCE p.l.c.
Annual Financial Report and Financial Statements - 31 December 2024
5
Corporate governance - Statement of compliance
1. Introduction
Pursuant to the Capital Markets Rules issued by the Malta Financial Services Authority (“MFSA”),
Exalco Finance p.l.c. should endeavour to adopt the Code of Principles of Good Corporate
Governance contained in Appendix 5.1 to Chapter 5 of the Capital Markets Rules (the “Code”). In
terms of Capital Markets Rule 5.94, the company hereby reports on the extent of its adoption of the
principles of the Code for the financial period being reported upon.
The company acknowledges that the Code does not dictate or prescribe mandatory rules, but
recommends principles of good practice. However, the directors strongly believe that such practices
are generally in the best interests of the company and its shareholders and that compliance with the
principles of good corporate governance is not only expected by investors but also evidences the
directors’ and the company’s commitment to a high standard of good governance.
Good corporate governance is the responsibility of the board of directors of the company (the “Board
of Directors” or the “Board”), and in this regard the Board has carried out a review of the company’s
compliance with the Code for the financial period being reported upon.
2. General
The company’s governance lies principally with its Board, which is responsible for the overall
determination of the company’s policies and business strategies. The company’s principal activity is
the carrying on the business of a finance company; the company does not itself carry on any trading
activities apart from the raising of capital and advancing thereof to Exalco Properties Limited, a
private limited liability company registered in Malta with company number C11273 having its
registered office at Cornerstone Business Centre, Level 4, 16th September Square, Mosta, MST
1180, Malta, in its capacity as the guarantor (the “Guarantor”) of the €15,000,000 4% secured bonds
of a nominal value of €100 (the “Bonds”), as and when the demands of its business so requires. The
Guarantor’s principal activity, in turn, revolves around the acquisition of real estate for long-term
investment purposes, the development and re-development of those properties and their conversion
into commercial properties, and thereafter, the provision of property management services.
The company has adopted a corporate decision-making and supervisory structure that is tailored to
suit its requirements and designed to ensure the existence of adequate controls and procedures
within the company, whilst retaining an element of flexibility essential to allow the company to react
promptly and efficiently to circumstances arising in respect of its business, taking into account its size
and the economic conditions in which it operates. The directors are of the view that it has employed
structures which are most suitable and complementary for the size, nature and operations of the
company. Accordingly, in general the directors believe that the company has adopted appropriate
structures to achieve an adequate level of good corporate governance, together with an adequate
system of control in line with the company’s requirements.
This corporate governance statement (the “Statement”) will now set out the structures and processes
in place within the company and explains how these effectively achieve the goals set out in the Code.
For this purpose, this Statement will make reference to the pertinent principles of the Code and then
set out the manners in which the directors believe that these have been adhered to. Where the
company has not complied with any of the principles of the Code, this Statement will provide an
explanation for the non-compliance.
It is to be noted that reference in this Statement to compliance with the principles of the Code means
compliance with the Code’s main principles and provisions.
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Corporate governance - Statement of compliance - continued
3. Compliance with the Code
Principles One to Five
Principles One to Five of the Code deal fundamentally with the role of the Board and of the
Directors.
The directors believe that for the period under review the company has generally complied with the
requirements for each of these principles.
Principle One: The Board
The Board is composed of members who are fit and proper to direct the business of the company
with honesty, competence and integrity. All the members of the Board are fully aware of, and
conversant with, the statutory and regulatory requirements connected to the business of the
company. The Board is accountable to relevant stakeholders for its performance and that of its
delegates.
The Board is responsible for determining the company’s strategic aims and organisational structure,
whilst ensuring that the company has the appropriate mix of financial and human resources to meet
its objectives and improve its performance.
The Board consists of a mix of executive and non-executive directors that enables the Board, and
particularly the non-executive directors, to have direct information about the company's performance
and business activities.
Principle Two: Chairman and Chief Executive
Alexander Montanaro was appointed as the Chairman of the Board for the period under review. The
Chairman’s main function is to lead the Board and set its agenda, a function which the Board believes
has been conducted in compliance with the dictates of Code Provision 2.2. The Chairman is also
responsible to ensure that the Board receives precise, timely and objective information in order for
the directors to take sound decisions and effectively monitor the performance of the company. The
Chairman ensures that there is effective communication with stakeholders and, during board
meetings, that there is active engagement by all directors for the discussion of complex and/or
contentious issues. The Board considers that notwithstanding that the Chairman is not an
independent director as recommended by the Code, the means for addressing potential conflicts of
interest are suitably addressed in the statute of the company and terms of reference of the Audit
Committee of the company. Furthermore, the Board considers the present Chairman to be fit and
proper to occupy the role.
In terms of Article 74.1 of the Articles of Association of the company, the Board of Directors may from
time to time appoint one or more executive directors to the office of Chief Executive Officer of the
company, and on such terms as they think fit. As at the end of the period under review, the Board
has not appointed a Chief Executive Officer.
Principle Three: Composition of the Board
The composition of the Board, in line with the requirements of Principle Three of the Code, is
composed of executive and non-executive directors, including independent non-executives, as
follows:
Alexander Montanaro Executive Director & Chairman
Jean Marc Montanaro Executive Director
Michael Montanaro Executive Director
Lawrence Zammit Independent Non-Executive Director
Mario P. Galea Independent Non-Executive Director
Kevin Dingli Independent Non-Executive Director
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Corporate governance - Statement of compliance - continued
Appointment and Removal of Directors
Pursuant to generally accepted practices, as well as the company’s Articles of Association, the
appointment of directors to the Board is reserved exclusively to the company’s shareholders, except
in so far as an appointment is made to fill a vacancy on the Board, which may be filled by co-option,
made by the Board.
The Articles of Association regulate the appointment of directors. Any one or more shareholders who
in aggregate hold not less than 100,000 shares having voting rights in the company are entitled to
nominate fit and proper persons having the appropriate level and mix of skills, knowledge and
experience required for appointment to the Board, for appointment as directors of the company. In
addition, recommendations and nominations may be made by the Board itself for consideration by
the shareholders at the annual general meeting of the company.
As referred to in Principle Eight B of this Statement hereunder, the Board believes that the setting up
of a Nominations Committee is not required at this point in time in view of the fact that the Board itself
has the authority to recommend and nominate directors. The Board however intends to keep under
review the possibility of having a Nominations Committee in due course.
A director may be removed at any time by the ordinary resolution of the shareholders of the company,
or in any of the specific instances set out in the Articles of Association of the company.
Independence of Non-Executive Directors
In line with supporting principle 3 (iii) of main Principle Three, at least one third of the Board consists
of non-executive directors. The non-executive directors play an important role in overseeing
executive directors and management, ensuring a system of checks and balances and contributing to
the strategic direction of the company in an objective manner.
For the purposes of Code Provision 3.2, the Board considers each of the non-executive directors as
independent within the meaning of the Code.
None of the non-executive directors:
(a) are or have been employed in any capacity by the company;
(b) receive significant additional remuneration from the company;
(c) have close family ties with any of the executive members of the Board;
(d) have been within the last three years an engagement partner or a member of the audit team of
the present or past external auditor of the company; and
(e) have a significant business relationship with the company.
In terms of Code Provision 3.4, each non-executive director has declared in writing to the Board that
he undertakes:
• to maintain in all circumstances his independence of analysis, decision and action;
• not to seek or accept any unreasonable advantages that could be considered as compromising
his independence; and
• to clearly express his opposition in the event that he finds that a decision of the Board may
harm the company.
Each non-executive director has complied with such an undertaking for the period under review.
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Corporate governance - Statement of compliance - continued
Principle Four: The Responsibilities of the Board
In terms of Principle Four, it is the Board’s responsibility to ensure a system of accountability,
monitoring, strategy formulation and policy development.
The Board of the company is entrusted with the overall direction, administration and management of
the company and meets on a regular basis to discuss and take decisions on matters concerning the
strategy, operational performance and financial performance of the company. The Board may also
delegate specific responsibilities to ad-hoc Committees as may be required from time to time, and in
the period under review, the Board has maintained an Audit Committee.
Role and Responsibilities of the Board
The role of the Board is exercised in a manner designed to ensure that it can function independently
of management and effectively supervises the operations of the company. At each of its meetings,
the Board is presented with monthly or quarterly (as applicable) management accounts covering the
period since the preceding board meeting.
In fulfilling its mandate, the Board assumes responsibility to:
a) establish appropriate corporate governance standards;
b) review, evaluate and approve, on a regular basis, long-term plans for the company;
c) review, evaluate and approve the company’s budgets and forecasts;
d) review, evaluate and approve major resource allocations and capital investments;
e) review the financial and operating results of the company;
f) ensure appropriate policies and procedures are in place to manage risks and internal control;
g) review, evaluate and approve the overall corporate organisation structure, the assignment of
management responsibilities and plans for senior management development including
succession;
h) review, evaluate and approve compensation to senior management; and
i) review periodically the company’s objectives and policies relating to social, health and safety
and environmental responsibilities.
In fulfilling its responsibilities, the Board continuously assesses and monitors the company’s present
and future operations, opportunities, threats and risks in the external environment, and its current
and future strengths and weaknesses. The Board evaluates and reviews the implementation of the
business and financial strategy of the company.
In ensuring compliance with other statutory requirements and with continuing listing obligations, the
Board is advised directly, as appropriate, by its appointed legal and other advisors. Directors are
entitled to seek independent professional advice at any time on any aspect of their duties and
responsibilities, at the company’s expense.
The Board does not consider it necessary to constitute separate committees to deal, inter alia, with
item (h) above, as might be appropriate in a larger company. The Board believes that the size of the
company and the Board itself does not warrant the setting up of an ad hoc committee to establish the
remuneration packages of individual directors and relies on the constant scrutiny of the Board itself,
the company’s shareholders, the market and the rules by which the company is regulated as a listed
company. The Board shall retain this matter under review over the coming year.
During the financial year under review, the Board held four (4) meetings.
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Corporate governance - Statement of compliance - continued
The Audit Committee
In line with the requirements of the Capital Markets Rules, the company has established an Audit
Committee.
Composition of the committee
The members of the Audit Committee for the period under review were Mario P. Galea, Lawrence
Zammit, and Kevin Dingli, all occupying a non-executive director role within the company. During the
year under review, Lawrence Zammit occupied the post of Chairman of the Audit Committee. Such
role is subject to rotation between the members on an annual basis. For the financial year ending 31
December 2025, Mario P. Galea shall be occupying such post of Chairman of the Audit Committee.
Mario P. Galea is the Audit Committee member who is considered to be competent in accounting
and/or auditing in terms of Capital Markets Rule 5.117. The Directors believe that all three Audit
Committee members satisfy the independence criteria as they are independent within the meaning
of the Code as explained above in this Statement.
Duties and responsibilities
The Audit Committee’s primary objective is to assist the Board in fulfilling its oversight responsibilities
over the financial reporting processes, financial policies and internal control structure. The Audit
Committee reports directly to the Board. Briefly, the Audit Committee is expected to deal with and
advise the Board on:
a. its monitoring responsibility over the financial reporting processes, financial policies and
internal control structures;
b. maintaining communications on such matters between the Board, management and the
external auditors; and
c. preserving the company’s assets by assessing the company’s risk environment and
determining how to deal with those risks.
Related party transactions
In addition, the Audit Committee has the role and function of evaluating any proposed transaction to
be entered into by the company and, or the Guarantor, and a related party (which term shall have the
same meaning as in the international accounting standards adopted in accordance with Regulation
(EC) No. 1606/2002 of the European Parliament and of the Council) to ensure that the execution of
any such transaction is at arm’s length, on a commercial basis and ultimately in the best interests of
the company.
Any proposed transaction which the company and, or the Guarantor wishes to enter into and which
satisfies either of the following conditions shall be referred to the Audit Committee for its consideration
and approval:
(i) transactions which clearly fall within the ambit of the Capital Markets Rules as related party
transactions and which are not the subject of an exemption therefrom;
(ii) transactions in respect of which management is not certain as to whether they fall within the
ambits of the Capital Markets Rules as related party transactions or in respect of which there
is uncertainty as to whether any one or more exemptions should apply to the proposed
transactions.
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Corporate governance - Statement of compliance - continued
The Audit Committee - continued
Related party transactions - continued
At the meeting convened for this purpose, the Audit Committee shall consider the proposed
transaction and first determine whether it is a transaction that falls within the ambit of the applicable
Capital Markets Rules and, if it so determines, shall then consider the merits of the proposed
transaction.
In its evaluation of the proposed transaction, the Audit Committee is at all times guided by the best
interests of the company and its general body of shareholders taken as a whole. The Audit Committee
reports to the Board on its findings and makes its recommendations to the Board as to whether the
transaction should be entered into in the first place and to make such further recommendations as to
any matters that, in the opinion of the Audit Committee, need to be reviewed or improved in the
proposed transaction or any of its terms so as to ensure that the best interests of the company and,
or the Guarantor are properly safeguarded.
Oversight role
The Audit Committee of the company has a crucial role in monitoring the activities and conduct of
business of the Guarantor, insofar as these may affect the ability of the company to fulfil its obligations
in terms of the Bonds. Such role is specified in the Audit Committee’s Terms of Reference and also
forms the subject of a contractual undertaking by the company in favour of the Guarantor in terms of
the loan agreement relative to the bond proceeds, pursuant to which the Guarantor has vested the
Audit Committee of the company with certain monitoring functions in light of the company’s economic
dependence on the Guarantor.
The Audit Committee also oversees the conduct of the external audit and facilitates communication
between the company’s Board, management and external auditors. When the Audit Committee’s
monitoring and review activities reveal cause for concern or scope for improvement, it shall make
recommendations to the Board on the action needed to address the issue or make improvements.
Conflicts of interest
Furthermore, the Audit Committee is vested with the task of ensuring that any potential conflicts of
interest between the duties of the directors and their respective private interests or duties unrelated
to the company are resolved in the best interests of the company.
Terms of reference
The terms of reference of the Audit Committee, approved by the Board, are modelled on the
recommendations of the Capital Market Rules.
Committee meetings
The Audit Committee shall meet at least four (4) times a year, with additional meetings to be called
upon at the discretion of the Chairman of the Audit Committee. In the period under review, the Audit
Committee met four (4) times.
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Corporate governance - Statement of compliance - continued
Principle Five: Board Meetings
The Board believes that it complies fully with the requirements of this principle and the relative Code
Provisions, in that it has systems in place to ensure the reasonable notice of meetings of the Board
and the circulation of discussion papers in advance of meetings so as to provide adequate time to
Directors to prepare themselves for such meetings. Minutes of Board meetings record attendance,
discussions and resolutions. These minutes are circulated to all Directors as soon as practicable after
the meeting, for approval.
The Board meets as often and as frequently required in line with the nature and demands of the
business of the company. Directors attend meetings on a frequent and regular basis and dedicate
the necessary time and attention to their duties as directors of the company. The following reports
the attendance at board meetings of each of the Directors during the period under review:
Alexander Montanaro Executive Director & Chairman [4]
Jean Marc Montanaro Executive Director [4]
Michael Montanaro Executive Director [4]
Lawrence Zammit Non-Executive Director [4]
Mario P. Galea Non-Executive Director [4]
Kevin Dingli Non-Executive Director [4]
The Chairman ensures that all issues relevant to long-term strategic and short-term performance of
the company are placed on the agenda of Board meetings and, for the purpose of discussion thereon,
are supported by all available information, whilst encouraging the presentation of views pertinent to
the subject matter and giving all directors every opportunity to contribute to the discussion.
Principle Six: Information and Professional Development
The Board believes that this principle has been duly complied with for the period under review. The
Board actively engages with the Guarantor’s management team, which is effectively composed of
the three executive directors of the company, in the review of their and the Guarantor’s performance.
The Board ensures that all directors are supplied with precise, timely and clear information so as to
enable them to effectively contribute to board decisions in line with the high standards expected of
them.
Directors have access to the advice and services of the Company Secretary who is also the legal
counsel to the Board and the company, in order to ensure that each director is aware of his legal and
fiduciary obligations. The company is also prepared to bear the expense incurred by the directors
requiring independent professional advice should they judge it necessary to discharge their
responsibilities as directors. The company pledges to make available to the directors all training and
advice as required.
Principle Seven: Evaluation of the Board’s performance
The Board is of the view that over the period under review, all members of the Board, individually and
collectively, have contributed to proceedings in line with the required levels of diligence and skill. In
addition, the Board believes that its current composition endows the Board with a cross-section of
skills and experience and achieves the appropriate balance required for it to function effectively. The
Board considers its own performance, and that of the Audit Committee having oversight of the
underlying business conducted by the Guarantor, as satisfactory and not meriting a revision to the
company’s corporate governance structures.
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Corporate governance - Statement of compliance - continued
Principle Eight: Committees
Principle Eight A of the Code deals with the establishment of a Remuneration Committee for
the company aimed at developing policies on remuneration for Directors and senior
executives and devising appropriate remuneration packages.
The size and structure of the company and its management are such that, in the opinion of the
directors, the establishment of an ad hoc Remuneration Committee is not warranted. Remuneration
policies have therefore been retained within the remit of the Board itself.
Remuneration Statement
In terms of Article 63 of the Articles of Association of the company, the aggregate emoluments of all
directors in any one financial year, and any increases thereto, shall be such amount as may from
time to time be determined by the company in general meeting.
The aggregate amount of remuneration paid to all directors of the company for the period under
review was €30,000. Each director received an annual remuneration of €5,000.
All of the directors are party to a service contract with the company, setting out their respective roles
and responsibilities, and applicable remuneration.
Principle Eight B of the Code deals with the requirement of a formal and transparent procedure
for the appointment of Directors.
Nominations Committee
The Board believes that the main principle has been duly complied with to the extent that the Articles
of Association establish a formal and transparent procedure for the appointment and nomination of
Directors, and provide for the establishment of the Nominations Committee. The company has
however so far not established a Nominations Committee as suggested by the Code.
The Board takes on the role of periodically assessing the skills, knowledge and experience of
individual directors necessary for the board to have the appropriate level of skill, competence and
experience that would endow the board with the requisite collective knowledge and skill necessary
for the proper functioning of the company and its oversight by the Board of Directors.
Principles Nine and Ten: Relations with Shareholders and with the Market, and Institutional
Shareholders
The company is highly committed to having an open and communicative relationship with its
investors. The publication of interim and annual financial statements and ongoing company
announcements keep bondholders informed on developments relevant to their investment.
Specifically with respect to the latter, the Board serves the legitimate interests of the company, and
ensures that the company communicates with the market effectively and in a timely manner through
a number of company announcements that it publishes, informing the market of significant events
relevant to the company and its business. The company recognises the importance of maintaining a
dialogue with the market to ensure that its strategies and performance are well understood and
disclosed to the market in a timely manner.
As a source of further information to the market, the company’s website
(http://www.exalcogroup.com/investor-relations/) also contains information about the company and
its business and developments.
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Corporate governance - Statement of compliance - continued
Principle Eleven: Conflicts of Interest
It is the practice of the Board that when a potential conflict of interest arises in connection with any
transaction or other matter, the potential conflict of interest is declared so that steps may be taken to
ensure that such items are appropriately addressed. The steps taken will depend on the
circumstances of the particular case, and may include the setting up of ad-hoc committees of
independent Directors that would assist and monitor management as appropriate in the execution of
specific transactions. By virtue of the Memorandum and Articles of Association, the Directors are
obliged to keep the Board advised, on an ongoing basis, of any interest that could potentially conflict
with that of the company. The Board member concerned shall not take part in the assessment by the
Board as to whether a conflict of interest exists. A director shall not vote in respect of any contract,
arrangement, transaction or proposal in which he has material interest in accordance with the
Memorandum and Articles of Association. The Board believes that this is a procedure that achieves
compliance with both the letter and rationale of principle eleven.
In situations giving rise to potential conflicts of interest, the conflicted Directors are to act in
accordance with the majority decision of those Directors who are not conflicted in the proposed
contract, transaction or arrangement, and in line with the advice of outside legal counsel where such
is solicited.
Related Party Transactions
Other than what is disclosed on page 33 Note 16, the Directors are not aware of any related party
transactions having been entered into by the company up until the period under review.
Principle Twelve: Corporate Social Responsibility
The Directors are committed to high standards of ethical conduct and to contribute to the
development of the local community and society at large. The company recognises the importance
of its role in the corporate social responsibility arena and seeks to ensure that in its operations the
environment is respected. The Directors are also aware of the importance of having good relations
with stakeholders and strive to work together with them in order to invest in human capital and safety
issues and to adopt environmentally friendly responsible practices.
EXALCO FINANCE p.l.c.
Annual Financial Report and Financial Statements - 31 December 2024
14
Corporate governance - Statement of compliance - continued
4. Non-Compliance with the Code
The directors set out below the Code Provisions with which the company does not comply and an
explanation as to the reasons for such non-compliance:
Code Provision
Explanation
2.1, 6.4, 6.5
Although the Articles of Association of the company allow for the
appointment of a Chief Executive Officer, in light of the nature of the
company’s business no such appointment has been considered
necessary to date. In addition, the division of responsibilities between
the Chairman and Chief Executive Officer has not been set out in
writing as required in terms of Code Provision 2.1, given that no such
need arises in light of the fact that no Chief Executive Officer of the
company has been appointed as aforesaid. Consequently, Code
Provisions 6.4 and 6.5, which set out the responsibilities of the Chief
Executive Officer, are not considered applicable at this point in time.
2.3
With respect to Code Provision 2.3, the Board notes that the Chairman
is also an executive member of the Board. However, the Board is of
the view that this function of the Chairman does not impinge on his
ability to exercise independent judgement with respect to decisions of
the Board.
4.2
The Board has not formally developed a succession policy for the
future composition of the Board of Directors as recommended by Code
Provision 4.2.7.
7.1
The Board has not appointed a committee for the purpose of
undertaking an evaluation of the Board’s performance in accordance
with the requirements of Code Provision 7.1. The Board believes that
the size of the company and the Board itself does not warrant the
establishment of a committee specifically for the purpose of carrying
out a performance evaluation of its role. Whilst the requirement under
Code Provision 7.1 might be useful in the context of larger companies
having a more complex set-up and a larger Board, the size of the
company’s Board is such that it should enable it to evaluate its own
performance without the requirement of setting up an ad-hoc
committee for this purpose. The Board shall retain this matter under
review over the coming year.
8A
The Board has not appointed a Remuneration Committee in line with
Code Provision 8A. The Board believes that the size of the company
and the Board itself does not warrant the setting up of an ad hoc
committee to establish the remuneration packages of individual
directors, and relies on the constant scrutiny of the Board itself, the
company’s shareholders, the market and the rules by which the
company is regulated as a listed company. In addition, the Board took
into consideration the fact that the remuneration of the Board is not
performance related. The Board intends to keep under review the
utility and possible benefits of having a Remuneration Committee in
due course.
EXALCO FINANCE p.l.c.
Annual Financial Report and Financial Statements - 31 December 2024
15
Corporate governance - Statement of compliance - continued
4. Non-Compliance with the Code - continued
Code Provision
Explanation
8B
The Board has not appointed a Nominations Committee in line with
Code Provision 8B. Pursuant to the company’s Articles of Association,
the appointment of directors to the Board may be made by nominations
made by any one or more shareholders who in aggregate hold not less
than 100,000 shares having voting rights in the company or the Board
(or Nominations Committee) itself may make recommendations and
nominations of fit and proper persons to the shareholders for the
appointment of directors at the annual general meeting. Within this
context, the Board believes that the setting up of a Nominations
Committee is not required since the Board itself has the authority to
recommend and nominate directors. Notwithstanding this, the Board
intends to keep under review the matter relating to the setting up of a
Nominations Committee.
9.3
9.4
There are no formal procedures in place within the company for the
resolution of conflicts between minority and controlling shareholders,
nor does the Memorandum and Articles of Association of the company
contemplate any mechanism for arbitration in these instances.
However, in light of the fact that, at present, the minority shareholder
of the company is also a member of the board of directors of the
majority shareholder of the company, and considering the position
indicated below with respect to Code Provision 9.4, the Board does
not consider there to be an imminent need for the establishment of
such formal procedures.
The company does not have a policy in place to allow minority
shareholders to present an issue to the Board. In practice, however,
the open channel of communication between the company and
minority shareholders via the Office of the Company Secretary is such
that any issue that may merit bringing to the attention of the Board may
be transmitted via the Company Secretary, who is in attendance at all
meetings of the Board of Directors. Furthermore, the company
considers that in light of both its present shareholding structure and
the fact that the minority shareholder is represented on the Board of
Directors of the company, the concerns sought to be addressed by this
particular policy are, in practice, duly addressed.
EXALCO FINANCE p.l.c.
Annual Financial Report and Financial Statements - 31 December 2024
16
Corporate governance - Statement of compliance - continued
5. Internal Control
The Board is ultimately responsible for the company’s system of internal controls and for reviewing
its effectiveness. Such a system is designed to manage rather than eliminate risk to achieve business
objectives, and can provide only reasonable, and not absolute, assurance against normal business
risks or loss.
Through the Audit Committee, the Board reviews the effectiveness of the companyʼs system of
internal controls. The key features of the company’s system of internal control are as follows:
Organisation
The company operates through the Board with clear reporting lines and delegation of powers.
Control Environment
The company is committed to the highest standards of business conduct and seeks to maintain these
standards across all its operations. Company policies and procedures are in place for the reporting
and resolution of improper activities.
The company has an appropriate organisational structure for planning, executing, controlling and
monitoring business operations in order to achieve its objectives.
Risk Identification
Management is responsible for the identification and evaluation of key risks applicable to their
respective areas of business.
6. General meetings
The general meeting is the highest decision making body of the company and is regulated by its
Articles of Association. All shareholders registered on the register of members of the company on a
particular record date are entitled to attend and vote at general meetings. A general meeting is called
by twenty-one (21) days’ notice, which notice must specify the place, day and hour of the meeting,
and in case of special business, the general nature of that business, and shall be accompanied by a
statement regarding the effect and scope of such special business. The notice period may be reduced
to 14 days if certain conditions are satisfied.
The quorum of shareholders required is not less than fifty-one (51%) of the nominal value of the
issued share capital in respect of which holders thereof are entitled to attend and vote at the meeting.
Voting at any general meeting takes place by a show of hands or a poll where this is demanded.
Subject to any rights or restrictions for the time being attached to any class or classes of shares, on
a show of hands each shareholder is entitled to one vote and on a poll each shareholder is entitled
to one vote for each share carrying voting rights of which he is a holder. Shareholders who cannot
participate in the general meeting may appoint a proxy by written or electronic notification to the
company. Appointed proxy holders enjoy the same rights to participate in the general meeting as
those to which the shareholder they represent is entitled. Every shareholder represented in person
or by proxy is entitled to ask questions which are pertinent and related to the items on the agenda of
the general meeting and to have such questions answered by the directors or such persons as the
directors may delegate for such person.
The directors’ statement of responsibilities for preparing the financial statements is set out on page
3.
Approved by the Board of Directors on 7
th
April, 2025.
17
Statement of financial position
As at
As at
31 December
31 December
Notes
2024
2023
€
€
ASSETS
Non-current assets
Loan receivable from fellow subsidiary
4
15,251,500
15,251,500
Total non-current assets
15,251,500
15,251,500
Current assets
Trade and other receivables
5
253,998
253,833
Cash and cash equivalents
6
110,968
35,564
Total current assets
364,966
289,397
Total assets
15,616,466
15,540,897
18
Statement of financial position - continued
As at
As at
31 December
31 December
Notes
2024
2023
€
€
EQUITY AND LIABILITIES
Capital and reserves
Share capital
7
250,000
250,000
Retained earnings
214,840
172,507
Total equity
464,840
422,507
Non-current liabilities
Borrowings
8
14,892,500
14,862,500
Total non-current liabilities
14,892,500
14,862,500
Current liabilities
Trade and other payables
9
259,126
255,890
Total current liabilities
259,126
255,890
Total liabilities
15,151,626
15,118,390
Total equity and liabilities
15,616,466
15,540,897
The notes on pages 22 to 34 are an integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board of Directors on 7 April 2025.
The financial statements were signed on behalf of the Board of Directors by Alexander Montanaro (Chairman)
and Jean Marc Montanaro (Director) as per the Directors’ Declaration on ESEF Annual Financial Report
submitted in conjunction with the Annual Financial Report.
19
Statement of comprehensive income
Year ended
Year ended
31 December
31 December
Notes
2024
2023
€
€
Finance income
10
760,314
756,152
Finance costs
11
(630,000)
(630,000)
Net interest income
130,314
126,152
Administrative expenses
12
(65,185)
(68,403)
Profit before tax
65,129
57,749
Tax expense
13
(22,796)
(20,212)
Profit for the period - total comprehensive income
42,333
37,537
The notes on pages 22 to 34 are an integral part of these financial statements.
20
Statement of changes in equity
Share
Retained
capital
earnings
Total
€
€
€
Balance at 1 January 2023
250,000
134,970
384,970
Comprehensive income
Profit for the year - total comprehensive income
-
37,537
37,537
Balance at 31 December 2023
250,000
172,507
422,507
Balance at 1 January 2024
250,000
172,507
422,507
Comprehensive income
Profit for the year - total comprehensive income
-
42,333
42,333
Balance at 31 December 2024
250,000
214,840
464,840
The notes on pages 22 to 34 are an integral part of these financial statements.
21
Statement of cash flows
Year ended
Year ended
31 December
31 December
Notes
2024
2023
€
€
Cash flows from operating activities
Cash used in operations
15
(84,910)
(88,845)
Interest received
10
760,314
756,152
Interest paid
11
(600,000)
(600,000)
Net cash generated from operating activities
75,404
67,307
Cash flows from investing activities
Advances of loan to fellow subsidiary
-
(80,000)
Net cash used in investing activities
-
(80,000)
Net movement in cash and cash equivalents
75,404
(12,693)
Cash and cash equivalents at beginning of year
35,564
48,257
Cash and cash equivalents at end of year
6
110,968
35,564
The notes on pages 22 to 34 are an integral part of these financial statements.
22
Notes to the financial statements
1. Summary of material accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
1.1 Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the EU and the requirements of the Companies Act, 1995. They have
been prepared under the historical cost convention.
The preparation of financial statements in conformity with IFRSs as adopted by the EU requires the use
of certain accounting estimates. It also requires directors to exercise their judgement in the process of
applying the company’s accounting policies (Note 3 – Critical accounting estimates and judgements).
Standards, interpretations and amendments to published standards effective in 2024
In 2024, the company adopted new standards, amendments and interpretations to existing standards
that are mandatory for the company’s accounting period beginning on 1 January 2024. The adoption of
these revisions to the requirements of IFRS as adopted by the EU did not result in substantial changes
to the company’s accounting policies impacting the company’s financial performance and position.
Standards, interpretations and amendments to published standards that are not yet effected
Certain new standards, amendments and interpretations to existing standards have been published by
the date of authorisation for issue of these financial statements, that are mandatory for the company’s
accounting periods beginning after 1 January 2024. The Company has not early adopted these revisions
to the requirements of IFRSs as adopted by the EU and the Directors are of the opinion that there are no
requirements which will have a possible material impact on the Company’s financial statements in the
period of initial application, other than what is described below.
IFRS 18 ‘Presentation and Disclosure in Financial Statements’ (effective for annual periods beginning on
or after 1 January 2027)
IFRS 18 (issued on 9 April 2024) is yet to be endorsed for use in the EU however it is set to replace IAS
1 Presentation of financial statements, introducing new requirements that will help to achieve
comparability of the financial performance of similar entities and provide more relevant information and
transparency to users. Even though IFRS 18 will not impact the recognition or measurement of items in
the financial statements, its impacts on presentation and disclosure are expected to be pervasive, in
particular those related to the statement of financial performance. IFRS 18 will also require the disclosure
of management-defined performance measures within the financial statements.
Management is currently assessing the detailed implications of applying the new standard on the Group’s
and Company’s financial statements. The new standard will be applicable from its mandatory effective
date of 1 January 2027, subject to endorsement for use in the EU, with retrospective application.
1.2 Financial assets
(a) Trade and other receivables
Trade receivables comprise amounts due from fellow subsidiary for services performed in the ordinary
course of business. If collection is expected in one year or less (or in the normal operating cycle of the
business if longer), they are classified as current assets. If not, they are presented as non-current assets.
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised
cost using the effective interest method, less provision for impairment. Details about the company’s
impairments policies and the calculation of loan allowance are provided in Note 1.2.3.
23
1. Summary of material accounting policies - continued
1.2 Financial assets - continued
(b) Cash and cash equivalents
Cash and cash equivalents are carried in the statement of financial position at face value. In the
statement of cash flows, cash and cash equivalents includes deposits held at call with banks.
1.2.1 Classification
The company classifies its financial assets as financial assets measured at amortised costs. The
classification depends on the entity’s business model for managing the financial assets and the
contractual terms of the cash flows. The company classifies its financial assets as at amortised cost only
if both the following criteria are met:
- The asset is held within a business model whose objective is to collect the contractual cash flows, and
- The contractual terms give rise to cash flows that are solely payments of principal and interest.
Assessment whether contractual cash flows are solely payments of principal and interest
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial
recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk
associated with the principal amount outstanding during a particular period of time and for other basic
lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the
company considers the contractual terms of the instrument. This includes assessing whether the
financial asset contains a contractual term that could change the timing or amount of contractual cash
flows such that it would not meet this condition.
1.2.2 Recognition and measurement
Regular way purchases and sales of financial assets are recognised on the trade date, which is the date
on which the company commits to purchase or sell the asset. Financial assets are derecognised when
the rights to receive cash flows from the financial assets have expired or have been transferred and the
company has transferred substantially all the risks and rewards of ownership.
At initial recognition, the company measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable
to the acquisition of the financial asset.
Interest income on debt instruments measured at amortised cost from these financial assets is included
in finance income using the effective interest rate method. Any gain or loss arising on derecognition of
these instruments is recognised directly in profit or loss and presented in other gains/(losses) together
with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the
statement of profit or loss.
1.2.3 Impairment
The company assesses on a forward-looking basis the expected credit losses (ECL) associated with its
debt instruments carried at amortised cost. The impairment methodology applied depends on whether
there has been a significant increase in credit risk. The company’s financial assets are subject to the
expected credit loss model.
24
1. Summary of material accounting policies - continued
1.2 Financial assets - continued
1.2.3 Impairment - continued
Expected credit loss model
The company measures loss allowances at an amount equal to lifetime ECLs, except for the following,
which are measured at 12-month ECLs:
• debt securities that are determined to have low credit risk at the reporting date; and
• other debt securities and bank balances for which credit risk has not increased significantly since
initial recognition.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECLs, the company considers reasonable and supportable information
that is relevant and available without undue cost or effort. The company assumes that the credit risk on
a financial asset has increased significantly if it is more than 30 days past due, and it considers a financial
asset to be in default when the borrower is unlikely to pay its credit obligations to the company in full,
without recourse by the company to actions such as realising security (if any is held); or the financial
asset is more than 90 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial
instrument. 12-month ECLs are the portion of ECLs that result from default events that are possible
within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is
less than 12 months). The maximum period considered when estimating ECLs is the maximum
contractual period over which the company is exposed to credit risk.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present
value of all cash shortfalls. ECLs are discounted at the effective interest rate of the financial asset.
At each reporting date, the company assesses whether financial assets carried at amortised cost are
credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental
impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial
asset is credit-impaired includes observable data such as significant financial difficulty of the borrower or
issuer, or a breach of contract such as a default or being more than 90 days past due.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying
amount of the assets.
1.3 Financial liabilities
The company recognises a financial liability in its statement of financial position when it becomes a party
to the contractual provisions of the instrument. The company’s financial liabilities are classified as
financial liabilities which are not at fair value through profit or loss (classified as ‘Other liabilities’). These
financial liabilities are recognised initially at fair value, being the fair value of consideration received, net
of transaction costs that are directly attributable to the acquisition or the issue of the financial liability.
These liabilities are subsequently measured at amortised cost. The company derecognises a financial
liability from its statement of financial position when the obligation specified in the contract or
arrangement is discharged, is cancelled or expires.
1. Summary of material accounting policies - continued
25
1.3 Financial liabilities - continued
(a) Borrowings
Borrowings are recognised initially at the fair value of proceeds received, net of transaction costs
incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds
(net of transaction costs) and the redemption value is recognised in profit or loss over the period of the
borrowings using the effective interest method.
Issue costs incurred in connection with the issue of the bond include professional fees, publicity, printing,
listing, registration, underwriting, management fees, selling costs and other miscellaneous costs.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer
settlement of the liability for at least twelve months after the reporting period.
(b) Trade and other payables
Trade payables comprise obligations to pay for services that have been acquired in the ordinary course
of business from suppliers. Accounts payable are classified as current liabilities if payment is due within
one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as
non-current liabilities.
Trade and other payables are recognised initially at fair value and subsequently measured at amortised
cost using the effective interest method.
1.4 Current and deferred tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss,
except to the extent that it relates to items recognised in other comprehensive income or directly in equity.
In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
Deferred tax is recognised, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred
tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than
a business combination that at the time of the transaction affects neither accounting nor taxable profit or
loss. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively
enacted by the end of the reporting period and are expected to apply when the related deferred tax asset
is realised or the deferred tax liability is settled.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes
levied by the same taxation authority on either the same taxable entity or different taxable entities where
there is an intention to settle the balances on a net basis.
26
1. Summary of material accounting policies - continued
1.5 Finance income and costs
Finance income and costs are recognised in profit or loss for all interest-bearing instruments on a time-
proportion basis using the effective interest method. Finance costs include the effect of amortising any
difference between net proceeds and redemption value in respect of the company’s borrowings. Finance
income and costs are recognised as they accrue, unless collectability is in doubt.
2. Financial risk management
2.1 Financial risk factors
The company constitutes a financing special purpose vehicle whose bond is matched by equivalent
amounts due from, and guaranteed by, Exalco Properties Limited (a fellow subsidiary). The company’s
principal risk exposures relate to credit risk and liquidity risk. The company is not exposed to currency
risk and the directors deem interest rate risk exposure to be minimal due to matching of its interest costs
on borrowings with finance income from its loan receivable from fellow subsidiary referred to above.
(a) Credit risk
The company measures credit risk and expected credit losses using probability of default, exposure at
default and loss given default. Management consider both historical analysis and forward-looking
information in determining any expected credit loss.
The company’s exposure to credit risk is limited to the carrying amount of financial assets recognised at
the reporting date, as summarised below. The company’s exposures to credit risk as at the end of the
reporting period are analysed as follows:
Financial assets measured at amortised cost
2024
2023
€
€
Loan receivable from fellow subsidiary (Note 4)
15,251,500
15,251,500
Interest receivable from fellow subsidiary (Note 5)
246,500
246,322
Cash and cash equivalents (Note 6)
110,968
35,564
15,608,968
15,533,386
The company does not hold collateral as security on its loan from fellow subsidiary. Yet as disclosed in
Note 8, Exalco Properties Limited has issued corporate guarantees with respect to the company’s bond.
Furthermore, the guarantor has investment property with a carrying amount of €25,484,630 secured by
special hypothec in favour of the trustee of the corporate bonds. These borrowings have been loaned to
Exalco Properties Limited through the issue of a loan.
In 2024, the company assessed on a forward-looking basis the expected credit losses associated with
its debt instruments carried at amortised cost. These instruments are considered to have low credit risk,
and the loss allowance recognised during the period was therefore limited to 12 months expected losses.
Management consider ‘low credit risk’ for instruments, which have a low risk of default, and the issuer
has a strong capacity to meet its contractual cash flow obligations in the near term. In case of the loans
issued to the guarantor, the assessment takes into consideration the financial position, performance and
other factors of the guarantor of the bonds. Management monitors intra-group credit exposures on a
regular basis and ensures timely performance of these assets in the context of overall Group liquidity
management.
27
2. Financial risk management - continued
2.1 Financial risk factors - continued
(a) Credit risk - continued
The company take cognisance of the related party relationship with this entity and management does not
expect any further credit losses from non-performance or default beyond what was accounted for in 2018
which amounted to €28,500.
The company banks only with local financial institutions with high quality standing or rating. Management
consider the probability of default to be close to zero as the counterparties have a strong capacity to
meet their contractual obligations in the near term. As a result, no loss allowance has been recognised
based on 12-month expected credit losses, as any such impairment would be wholly insignificant to the
company.
(b) Liquidity risk
The company is exposed to liquidity risk arising primarily from its ability to satisfy liability commitments
depending on cash inflows receivable in turn from Exalco Properties Limited.
Management monitors liquidity risk by means of cash flow forecasts on the basis of expected cash flows
over a twelve month period to ensure that no additional financing facilities are expected to be required
over the coming year. This process is performed through a rigorous assessment of detailed cash flow
projections of the fellow subsidiary where matching of cash inflows and outflows arising from expected
maturities of financial instruments are assessed on an annual basis.
The carrying amounts of the company’s assets and liabilities are analysed into relevant maturity
groupings based on the remaining period at the end of the reporting period to the contractual maturity
date in the respective notes to the financial statements.
The following table analyses the company’s financial liabilities into relevant maturity groupings based on
the remaining period at the statement of financial position date to the contractual maturity date. The
amounts disclosed in the table are the contractual discounted cash flows. Balances due within twelve
months equal their carrying balances, as the impact of discounting is not significant.
Carrying
Contractual
Within
One to
amount
cash flows
one year
five years
€
€
€
€
31 December 2024
Bonds 2018 - 2028
14,892,500
17,150,137
600,000
16,550,137
Trade and other payables
259,126
259,126
259,126
-
15,151,626
17,409,263
859,126
16,550,137
31 December 2023
Bonds 2018 - 2028
14,862,500
17,751,781
601,644
17,150,137
Trade and other payables
255,890
255,890
255,890
-
15,118,390
18,007,671
857,534
17,150,137
2.2 Capital risk management
The company’s bond is guaranteed by Exalco Properties Limited (a fellow subsidiary) and secured by
two of its properties. Related finance costs are also guaranteed by this fellow subsidiary. The capital
management of the company therefore consists of a process of regularly monitoring the financial position
of the guarantor (Note 2.1).
28
2. Financial risk management - continued
2.3 Fair values of financial instruments
Financial instruments not carried at fair values
At 31 December 2024 the carrying amounts of receivables (net of impairment provisions if any) and
payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure
purposes is estimated by discounting the future contractual cash flows at the current market interest rate
that is available to the company for similar financial instruments.
As at the end of the reporting period, the fair values of financial assets and liabilities, approximate the
carrying amounts shown in the statement of financial position.
The fair value of non-current financial instruments for disclosure purposes is estimated by discounting
the future contractual cash flows at the current market interest rate that is available to the company for
similar financial instruments. The fair value of the company’s non-current trade and other payables at
the end of the reporting period is not significantly different from the carrying amounts.
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 company directors, the accounting estimates and judgements made in the course of
preparing these financial statements are not difficult, subjective or complex to a degree which would
warrant their description as critical in terms of the requirements of IAS 1.
4. Loan receivable from fellow subsidiary
2024
2023
€
€
Loan receivable from fellow subsidiary
At beginning of year
15,251,500
15,171,500
Additions
-
80,000
At end of year
15,251,500
15,251,500
At 31 December
Cost
15,280,000
15,280,000
Loss allowance
(28,500)
(28,500)
Net book amount
15,251,500
15,251,500
4. Loan receivable from fellow subsidiary - continued
29
Loan receivable from fellow subsidiary reflect the transfer of funds to Exalco Properties Limited generated
by the company from its bonds. The loan allowance of €28,500 represents the amount that the company
recognised as an expected credit loss provided under IFRS 9.
Weighted average effective interest rate as at 31 December:
2024
2023
Loan to fellow subsidiary
4.0%
4.0%
The company’s exposure to credit and interest rate risks related to investments is disclosed in Note 2.
Maturity of loan receivable from fellow subsidiary:
2024
2023
€
€
Less than 5 years
15,251,500
15,251,500
The loan receivable from fellow subsidiary matures within five years on August 2028.
5. Trade and other receivables
2024
2023
€
€
Current
Prepayments
7,498
7,511
Accrued income
246,500
246,322
253,998
253,833
Accrued income includes interest due and accrued as at the end of the reporting period on the loan
advanced by the company.
The company’s exposure to credit and liquidity risk related to trade and other receivables is disclosed in
Note 2.
6. Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents comprise the following:
2024
2023
€
€
Cash and cash equivalents
110,968
35,564
30
7. Share capital
2024
2023
€
€
Authorised, issued and fully paid up
250,000 ordinary shares of €1 each
250,000
250,000
8. Borrowings
2024
2023
€
€
Non-current
150,000 4.0% bonds 2018 - 2028
14,892,500
14,862,500
The bonds are measured at the amount of the net proceeds adjusted for the amortisation of the difference
between the net proceeds and the redemption value of such bond, using the effective yield method as
follows:
2024
2023
€
€
Face value
150,000 4.0% bonds 2018 - 2028
15,000,000
15,000,000
Issue costs
(300,000)
(300,000)
Accumulated amortisation
192,500
162,500
Closing net book amount
(107,500)
(137,500)
Amortised cost at 31 December
14,892,500
14,862,500
The interest rate exposure of the borrowings of the company was as follows:
2024
2023
€
€
Total borrowings:
At fixed rates
14,892,500
14,862,500
The effective interest rates as at the end of the reporting period were as follows:
2024
2023
€
€
Bonds 2018 – 2028
4.3%
4.3%
This note provides information about the contractual terms of the company’s borrowings. For more
information about the company’s exposure to interest rate and liquidity risk, refer to Note 2.
31
8. Borrowings - continued
By virtue of an offering memorandum dated 31 July 2018 the company issued €150,000 bonds with a
face value of €100 each. The bond’s interest is payable annually on 20 August, starting from 20 August
2019. The bonds are redeemable at par and are due for redemption on 20 August 2028. The bonds are
guaranteed by Exalco Properties Limited, which has bound itself jointly and severally liable for the
payment of the bonds and interest thereon, pursuant to and subject to the terms and conditions in the
offering memorandum. Furthermore, the guarantor has investment property with a carrying amount of
€25,484,630 secured by special hypothec in favour of the trustee of the corporate bonds. The bonds
have been admitted on the Official List of the Malta Stock Exchange on 21 August 2018. The quoted
market price as at 31 December 2024 for the bonds was €99.99 (2023: €99.50). In the opinion of the
directors these market prices fairly represent the fair value of these financial liabilities.
9. Trade and other payables
2024
2023
€
€
Current
Amount owed to fellow subsidiary
22,796
20,212
Accruals and deferred income
236,330
235,678
Trade and other payables
259,126
255,890
Amount owed to fellow subsidiary is unsecured, interest free and repayable on demand.
The company’s exposure to liquidity risk related to trade and other payables is disclosed in Note 2.
10. Finance income
2024
2023
€
€
Interest on loan to fellow subsidiary
620,100
618,683
Facility fee receivable
140,214
137,469
760,314
756,152
11. Finance costs
2024
2023
€
€
Coupon interest payable on bonds
630,000
630,000
32
12. Expenses by nature
Administrative expenses are classified by their nature as follows:
2024
2023
€
€
Listing and related compliance costs
34,651
37,249
Directors’ fees (Note 14)
30,000
30,000
Other expenses
534
1,154
65,185
68,403
Auditor’s fees
Fees charged by the auditor for services rendered during the year relate to the following:
2024
2023
€
€
Annual statutory audit
8,400
8,000
Tax advisory and compliance services
885
685
9,285
8,685
13. Tax expense
2024
2023
€
€
Current tax expense:
group relief
22,796
20,212
The tax on the company’s profit before tax differs from the theoretical amount that would arise using the
basic tax rate as follows:
2024
2023
€
€
Profit before tax
65,129
57,749
Tax on profit at 35%
22,796
20,212
33
14. Directors’ emoluments
2024
2023
€
€
Directors’ fees
30,000
30,000
15. Cash used in operations
Reconciliation of profit before tax to cash used in operations:
2024
2023
€
€
Profit before tax
65,129
57,749
Adjustment for:
Amortisation of bond issue costs
30,000
30,000
Finance income
(760,314)
(756,152)
Finance costs
600,000
600,000
Changes in working capital:
Trade and other receivables
(165)
(625)
Trade and other payables
(19,560)
(19,817)
Cash used in operations
(84,910)
(88,845)
Net debt reconciliation
All the movements in the company’s net debt related only to cash flow movements and disclosed as part
of the financing activities in the statement of cash flows on page 21.
16. Related party transactions
The company forms part of the Exalco Group of Companies. All companies forming part of the Exalco
Group are related parties since these companies are all ultimately owned by Exalco Holdings Limited
which is considered by the directors to be the ultimate controlling party. Trading transactions between
these companies include items which are normally encountered in a group context. The Group is
ultimately fully owned by members of the Montanaro family, who are therefore considered to be related
parties. The main related party with whom transactions are entered into is Exalco Properties Limited,
the guarantor of the borrowings (Note 8).
34
16. Related party transactions - continued
The following are the principal transactions that were carried out with related parties:
2024
2023
€
€
Finance income from fellow subsidiary (Note 10)
620,100
618,683
Facility fee from fellow subsidiary (Note 10)
140,214
137,469
760,314
756,152
Key management personnel compensation, consisting of directors’ remuneration, has been disclosed in
Note 14 to the financial statements.
Year end balances arising from related party transactions are disclosed in Notes 4 and 9 to the financial
statements.
17. Statutory information
Exalco Finance p.l.c. is a public limited liability company and is incorporated in Malta.
The ultimate and immediate parent company of Exalco Finance p.l.c. is Exalco Holdings Limited, a
company registered in Malta, with its registered address at Cornerstone Business Centre, Level 4, 16
September Square, Mosta, Malta.
The ultimate controlling parties of Exalco Holdings Limited are the members of the Montanaro family.
