COMPANY ANNOUNCEMENT

Harvest Technology p.l.c.

Approval of Interim Financial Statements and

Business Update

Date of Announcement

9 August 2023

Reference No:

50/2023

Capital Markets Rules:

5.16.20

QUOTE

Approval of interim financial statements

Further to the meeting of the Board of Directors of Harvest Technology p.l.c. (C 63276) (the "Company") held today the 9 August, 2023, the Board of Directors of the Company approved the Company's interim financial statements for the six-month period ended 30 June, 2023. A copy of the Company's interim financial statements is attached to the present company announcement and may also be viewed on the Company's website on https://harvest.tech/financial-statements/.

Update to the market

The Board of Directors notes that the unaudited consolidated net profit before tax of the Company and its subsidiaries (the "Group") in H1, 2023 amounted to circa €0.3 million. Based on updated forecasts, and as detailed during the Company's Annual General Meeting held on 27 June 2023, the Group is expected to achieve higher revenues in 2023 versus the prior year. The profit before tax for the year ending 31 December 2023 is expected to be circa €1.4 million.

The Board of Directors is pleased to announce that on 30 June 2023, APCOPAY's new cloud-based payment platform received a certificate of compliance confirming that the solution meets the Payment Card Industry Data Security Standard v4.0 to the highest Level 1 service provider criteria. This is an important milestone in the launch of the new payment platform later in 2023. Moreover, APCOPAY has also increased its efforts to strengthen and diversify its sales pipeline through various initiatives.

On the other hand, in the first six months of the year, the retail and IT solutions segment reported a decline in revenues, compared to the previous year. During the first half of 2022, this segment had been

positively impacted by the completion of a number of significant projects, which bolstered the segment's profitability. With regards to 2023, there is an optimistic outlook for the second half of the year, as both APCO Limited and PTL Limited are anticipated to finalise their ongoing projects, which would be expected to translate into higher revenue and profit recognition.

The Group remains committed to further investment in the organic growth of its various businesses, with a notable focus on expanding the payment processing business and internationalising the retail and IT solutions segment.

UNQUOTE

Malcolm Falzon

Company Secretary

Harvest Technology p.l.c.

Interim Financial Report

For the period 1 January to 30 June 2023

Company Registration Number: C 63276

Harvest Technology p.l.c.

2

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

Interim Directors' Report

Pursuant to Listing Rules 5.75.2 for period 1 January to 30 June 2023

The directors present the interim report, together with the unaudited interim condensed financial statements ("the condensed interim financial statements") of the company and its subsidiaries (the "Group") for the period 1 January to 30 June 2023.

Principal activities

The principal activity of the parent company is that of acting as a holding company. The Group is mainly involved in the sale, maintenance and servicing of information technology solutions, security systems, and to provide electronic payments solutions.

Business model

Harvest Technology p.l.c. is a multi-brand information technology solutions provider to businesses and the public sector. In addition, Harvest Technology p.l.c. Group is a payments solutions provider offering e- commerce processing services for retailers and internet-based merchants together with the provision of a wide range of automation and security solutions catering to the banking, retail, law enforcement and other sectors.

Through the wide range of services and experience in technology, the Group is positioned to continue to develop and offer a broad range of state-of-the-art solutions and assure an excellent quality of service to its customers.

Performance review

The published figures have been extracted from the unaudited management financial statements for the half- year ended 30 June 2023 and its comparative period in 2022.

The Group

During the period under review, the Group registered an operating profit of €299,452 (1 January to 30 June 2022: € 1,121,232) on revenue of €7,197,859 (1 January to 30 June 2022: € 8,291,071). The profit before tax for the period amounted to €289,367 (1 January to 30 June 2022: € 1,105,383). After accounting for other items of income, net finance costs and taxation, the Group registered a profit for the period of €183,225 (1 January to 30 June 2022: € 721,555). The Group's net assets at 30 June 2023 amounted to €13,670,040 (31 December 2022: €13,600,797).

The payment processing services segment experienced a notable decline in revenue and profitability when compared to the same period in 2022. This is primarily attributable to a sharp drop in processing of certain gaming merchants due to changes in regulation. The drop in processing for such clients started in the first quarter of 2022 and given the current circumstances, it is highly unlikely that the company will be able to recover the lost revenue in 2023. It is pertinent to note that the processing for clients that were not impacted by the change in regulation has increased year on year.

Despite these challenges the company is actively taking measures to improve its situation and over the past 12 months has invested significantly in its platform infrastructure. The Board of Directors is pleased to announce that on 30 June 2023, APCOPAY's new cloud-based payment platform received a certificate of compliance

Harvest Technology p.l.c.

3

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

confirming that the solution meets the Payment Card Industry Data Security Standard v4.0 to the highest Level 1 service provider criteria.

This is an important milestone in the launch of the new payment platform later in 2023. Moreover, APCOPAY has also increased its efforts to strengthen and diversify its sales pipeline through various initiatives.

In the first six months, the retail and IT solutions segment reported a decline in revenues, compared to the previous year. During the first half of 2022, this segment had been positively impacted by the completion of a number of significant projects, which bolstered the segment's profitability. With regards to 2023, there is an optimistic outlook for the second half of the year, as both APCO Limited and PTL Limited are anticipated to finalise their ongoing projects, which would be expected to translate into higher revenue and profit recognition.

Additionally, it is worth noting that during the first half of 2022, the company benefited from favourable foreign exchange differences when converting from USD to Euro resulting in higher gross profit compared to 2023.

The Group remains committed to further investment in the organic growth of its various businesses, with a notable focus on expanding the payment processing business and internationalising the retail and IT solutions segment.

The Company

The Company earned investment income and management fees of €615,261 and € 236,010 respectively (2022:

  • 1,076,708 and € 231,811, respectively). After accounting for finance income, finance costs and administrative expenditure, the Company registered a profit after tax of €136,092 (1 January to 30 June 2022: €439,981). The net assets of the Company at 30 June 2023 amounted to €12,769,605 (31 December 2022: €12,747,416).

Results and dividends

The results for the period ended 30 June 2023 are shown in the statements of profit or loss on page 5. The Group's profit for the period after taxation was €183,225 (1 January to 30 June 2022: € 721,555).

During the period under review, the directors proposed a final net dividend of €113,903, equivalent to €0.005 per share for financial year ending 31 December 2022. This was paid by the company on 5 May 2023.

Likely future business developments

The directors consider that the period-end financial position was satisfactory.

Post balance sheet events

There have been no significant post-interim balance sheet events.

Harvest Technology p.l.c.

5

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

Condensed Statements of Profit or Loss for the period ended 30 June 2023

The group

The group

The company

The company

1 January to

1 January to

1 January to

1 January to

30 June 2023

30 June 2022

30 June 2023

30 June 2022

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Revenue

7,197,859

8,291,071

241,821

237,361

Cost of sales

(4,578,429)

(4,974,405)

-

-

Gross profit

2,619,430

3,316,666

241,821

237,361

Administrative expenses

(2,319,978)

(2,195,434)

(633,768)

(631,692)

Operating profit / (loss)

299,452

1,121,232

(391,947)

(394,331)

Investment income

-

-

615,261

1,076,708

Finance income

1,028

-

-

4,462

Finance costs

(11,113)

(15,849)

(5,757)

(9,884)

Profit before tax

289,367

1,105,383

217,557

676,955

Tax expense

(106,142)

(383,828)

(81,465)

(236,974)

Profit for the year

183,225

721,555

136,092

439,981

Earnings per share

0.008

0.032

-

-

Harvest Technology p.l.c.

6

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

Condensed Statements of financial position

The group

The group

The company

The company

30 June 2023

31 December

30 June 2023

31 December

Notes

(Unaudited)

2022 (Audited)

(Unaudited)

2022 (Audited)

€

€

€

€

Assets

Non-current

Goodwill

6

7,493,487

7,493,487

-

-

Intangible assets

7

1,156,808

1,120,625

4,100

-

Plant and equipment

156,652

128,555

75,346

4,627

Right-of-use assets

8

452,448

555,875

214,738

322,107

Investment in subsidiaries

-

-

11,119,823

11,119,723

Other investments

149,977

149,977

149,977

149,977

Deferred tax assets

517,374

475,515

119,900

113,574

9,926,746

9,924,034

11,683,884

11,710,008

Current

Inventories

1,711,009

2,558,962

-

-

Contract assets

366,683

483,471

-

-

Other assets

161,663

86,219

48,474

6,072

Trade and other receivables

9

2,595,331

4,671,093

487,051

197,479

Current tax assets

556,500

801,021

349,903

536,785

Cash and cash equivalents

10

2,983,045

2,716,977

576,697

726,830

8,374,231

11,317,743

1,462,125

1,467,166

Total assets

18,300,977

21,241,777

13,146,009

13,177,174

Harvest Technology p.l.c.

8

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

Statement of changes in equity - the group

Share

Retained

Total

capital

Other equity

earnings

equity

€

€

€

€

At 1 January 2022

11,390,318

(2,821,365)

4,829,506

13,398,459

Dividends

-

-

(455,759)

(455,759)

Transactions with owners

-

-

(455,759)

(455,759)

Profit for the period

-

-

721,555

721,555

Total comprehensive income

-

-

721,555

721,555

At 30 June 2022

11,390,318

(2,821,365)

5,095,302

13,664,255

At 1 January 2023

11,390,318

(2,821,165)

5,031,644

13,600,797

Dividends

-

-

(113,982)

(113,982)

Transactions with owners

-

-

(113,982)

(113,982)

Profit for the period

-

-

183,225

183,225

Total comprehensive income

-

-

183,225

183,225

At 30 June 2023

11,390,318

(2,821,165)

5,100,887

13,670,040

Harvest Technology p.l.c.

9

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

Statement of changes in equity - the company

Retained

Share capital

earnings

Total equity

€

€

€

At 1 January 2022

11,390,318

1,602,514

12,992,832

Dividends

-

(455,613)

(455,613)

Transactions with owners

-

(455,613)

(455,613)

Profit for the period

-

439,981

439,981

Total comprehensive income

-

439,981

439,981

At 30 June 2022

11,390,318

1,586,882

12,977,200

At 1 January 2023

11,390,318

1,357,098

12,747,416

Dividends

-

(113,903)

(113,903)

Transactions with owners

-

(113,903)

(113,903)

Profit for the period

-

136,092

136,092

Total comprehensive income

-

136,092

136,092

At 30 June 2023

11,390,318

1,379,287

12,769,605

Harvest Technology p.l.c.

10

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

Condensed Statements of Cash Flows for the period ended 30 June 2023

The group

The group

The company The company

1 January to

1 January to

1 January to

1 January to

30 June 2023

30 June 2022

30 June 2023

30 June 2022

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

€

€

€

€

Operating activities

Profit before tax

289,367

1,105,383

217,557

676,955

Adjustments

412,504

457,290

(482,152)

(959,923)

Net changes in working capital

60,505

360,564

(276,870)

(272,825)

Tax paid

(322,582)

(356,064)

-

-

Tax refunded

431,037

180,555

314,432

180,555

Net cash generated from (used in) operating

activities

870,831

1,747,728

(227,033)

(375,238)

Investing activities

Payments to acquire property, plant and

(72,948)

(23,866)

(89,882)

(4,025)

equipment

Payments to acquire intangible assets

(245,575)

(175,294)

(4,920)

-

Payment to acquire other investments

-

-

(100)

-

Dividends received from subsidiaries

-

-

399,920

699,860

Net cash (used in) generated from investing

activities

(318,523)

(199,160)

305,018

695,835

Harvest Technology p.l.c.

11

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

Condensed Statements of Cash Flows for the period ended 30 June 2023

The group

The group

The company The company

1 January to

1 January to

1 January to

1 January to

30 June 2023

30 June 2022

30 June 2023

30 June 2022

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

€

€

€

€

Financing activities

Payments for lease obligations to third parties

(51,659 )

(45,888)

-

-

Payments for lease obligations to related Company

(108,458)

(102,900)

(108,458)

(102,900)

Interest paid on leasing arrangements with third

parties

(5,356)

(4,601)

-

-

Interest paid on leasing arrangements with a related

Company

(5,757)

(9,884)

(5,757)

(9,884)

Interest received

-

-

-

4,462

Interest paid on other financial liabilities

(1,028)

(1,364)

-

-

Dividends paid

(113,982)

(455,759)

(113,903)

(455,613)

Net cash used in financing activities

(286,240)

(620,396)

(228,118)

(563,935)

Net change in cash and cash equivalents

266,068

928,172

(150,133)

(243,338)

Cash and cash equivalents, beginning of period

2,716,977

2,999,405

726,830

1,071,116

Cash and cash equivalents, end of period

2,983,045

3,927,577

576,697

827,778

Harvest Technology p.l.c.

12

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

Notes to the financial statements

1 Nature of operations

The principal activities of the Group are the sale, maintenance and servicing of information technology solutions, security systems and operates an electronic payment gateway.

2 General information and basis of preparation

The company was incorporated on 23 December 2013 as a holding company. The registered address and principal place of business of the company is Nineteen Twenty-Three, Valletta Road, Marsa MRS 3000, Malta.

The condensed consolidated interim financial statements as at end of 30 June 2023 has been prepared in accordance with International Financial Reporting Standards as adopted by the EU applicable to interim financial reporting (International Accounting Standard 34, "Interim Financial Reporting"). The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2022, which have been prepared in accordance with IFRS as adopted by the EU.

3 New or revised Standards or Interpretations

3.1 New standards, amendments and interpretations adopted as at 1 January 2023

Some accounting amendments which have become effective from 1 January 2023 and have been adopted by the Group and the company do not have a significant impact on the Group and Company's financial results or position. Accordingly, the Group and the Company have made no changes to its accounting policies in 2023.

3.2 Standards, amendments and Interpretations to existing Standards that are not yet effective and have not been adopted early by the Group

Several new, but not yet effective, standards, amendments to existing standards, and interpretations have been published by the IASB. None of these standards, amendments or Interpretations have been adopted early by the Group and the Company.

Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the effective date of the pronouncement. New standards, amendments and interpretations neither adopted nor listed by the Group and the Company have not been disclosed as they are not expected to have a material impact on the Group and Company's financial statements.

Harvest Technology p.l.c.

13

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

4 Segment reporting

The Group operates two business activities which are the sale of payment processing services and the provision of IT solutions and security systems. Each of these operating segments is managed separately as each of these lines requires different resources. All inter segment transfers for management services are carried out on a cost basis.

The accounting policy for identifying segments is based on internal management reporting information that is regularly reviewed by management.

Revenue reported below represents revenue generated from external customers. There were no intersegment sales in the year. The Group's reportable segments under IFRS 8 are direct sales attributable to each line of business.

The sale of payment processing services and the provision of IT solutions and security systems are derived from Malta, EU and non-EU countries.

During the first six months of 2023, the Group did not have any clients or contracts which individually represented 10% or more of the total revenue of the Group. In 2022, the Group had one significant contract where revenue exceeded 10% of total revenues. The total revenue on this contract recognised during the period amounted to € 1,378,000 and represented 17% of the revenue for the six months ended 30 June 2022.

As at the end of the reporting period the total amount of intangible assets (including goodwill) and plant and equipment amounted to € 8,650,295 - unaudited (31 December 2022: €8,614,112 - audited) and € 156,652 - unaudited (31 December 2022 - audited: €128,555) respectively.

Measurement of operating segment profit or loss, assets, and liabilities

Segment profit represents the profit earned by each segment after allocation of central administration costs and finance costs based on services and finance provided. This is the measure reported to management for the purposes of resource allocation and assessment of segment performance.

Harvest Technology p.l.c.

14

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

Reconciliations of reportable segment revenues, profit or loss, assets and liabilities to consolidated totals are reported below:

Profit and loss before tax

1 January to

1 January to

30 June 2023

30 June 2022

(Unaudited)

(Unaudited)

€

€

Total profit for reportable segments

673,572

1,491,635

Unallocated amounts:

Other unallocated amounts

(384,205)

(386,252)

289,367

1,105,383

Assets

30 June

31 December

2023

2022

(Unaudited)

(Audited)

€

€

Total assets for reportable segments

10,645,498

13,164,734

Elimination of receivables

(1,864,194)

(1,431,494)

Unallocated amounts:

Plant and equipment

75,346

4,627

Goodwill

7,493,487

7,493,487

Intangible assets

4,100

-

Other investments

149,977

149,977

Trade and other receivables

535,525

161,150

Cash and cash equivalents

576,697

726,830

Deferred tax

119,900

113,574

Current tax asset

349,903

536,785

Right-of-use-asset

214,738

322,107

18,300,977

21,241,777

Liabilities

30 June

31 December

2023

2022

(Unaudited)

(Audited)

€

€

Total liabilities for reportable segments

6,118,727

8,642,716

Elimination of liabilities

(1,864,194)

(1,431,494)

Unallocated amounts:

Trade and other payables

146,862

91,758

Lease liability

229,542

338,000

4,630,937

7,640,980

Harvest Technology p.l.c.

15

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

The Group's revenue and results from continuing operations from external customers and information about it assets and liabilities by reportable segment are detailed below:

Payment

Eliminations

processing

Retail and IT

and

services

solutions

Total

Unallocated

adjustments

Consolidated

€

€

€

€

€

€

1 January to 30 June 2023

Revenue

2,120,168

5,456,281

7,576,449

5,811

(384,401)

7,197,859

Profit before tax

497,741

175,831

673,572

217,557

(601,762)

289,367

Depreciation and amortisation

228,510

70,140

298,650

127,352

(13,498)

412,504

Income tax expense

176,335

63,683

240,018

81,465

(215,341)

106,142

Segment assets

3,510,680

7,134,818

10,645,498

13,146,010

(5,490,531)

18,300,977

Capital expenditure

248,008

15,426

263,434

94,802

(39,713)

318,523

Segment liabilities

1,653,965

4,464,762

6,118,727

376,404

(1,864,194)

4,630,937

1 January to 30 June 2022

Revenue

2,641,488

6,118,143

8,759,631

5,550

(474,110)

8,291,071

Profit before tax

1,022,312

469,323

1,491,635

676,955

(1,063,207)

1,105,383

Depreciation and amortisation

201,861

31,171

233,032

3,994

(13,498)

223,528

Income tax expense

359,560

164,143

523,703

236,974

(376,849)

383,828

Segment assets

3,580,622

9,584,113

13,164,735

2,057,450

6,019,592

21,241,777

Capital expenditure

349,698

62,196

411,894

4,971

-

416,865

Segment liabilities

1,638,130

6,996,635

8,634,764

437,709

(1,431,494)

7,640,980

Harvest Technology p.l.c.

16

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

5 Dividends

During the period under review, the directors proposed a final net dividend of € 113,903 equivalent to € 0.005 per share. This was paid by the company on 5 May 2023. During the prior period a final net dividend of € 455,613 (€ 0.020 per share) was paid on 29 April 2022.

6

Goodwill

The movements in the carrying amount of goodwill are as follows:

The group

€

At 1 January 2022

7,493,487

At 31 December 2022

7,493,487

At 1 January 2023

7,493,487

At 30

June 2023

7,493,487

Carrying amount

At 31

December 2022

7,493,487

At 30

June 2023

7,493,487

An impairment loss is recognised for the amount by which the asset's or cash-generating unit's carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary, and may cause significant adjustments to the Group's assets within the next financial year.

In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.

The Group tests goodwill semi-annually for impairment, or more frequently if there are indications that goodwill or intangibles might be impaired. Determining whether the carrying amounts of goodwill can be realised requires an estimation of the recoverable amount of the cash generating units. The value in use calculation requires the directors to estimate the future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value.

Goodwill arising on a business combination is allocated, to the cash-generating units ("CGUs") that are expected to benefit from that business combination.

At 30 June 2023, goodwill was allocated as follows:

  • € 3,860,898 (at 31 December 2022: € 3,860,898) to APCO Systems Limited which operates the electronic payment gateway.
  • € 2,168,112 (at 31 December 2022: € 2,168,112) to APCO Limited which operates in the business

of selling and maintenance of IT solutions and security systems.

  • € 1,464,477 (at 31 December 2022: € 1,464,477) to PTL Limited business.

Harvest Technology p.l.c.

17

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

CGU - Payment Processing Services

The recoverable amount of the CGUs is determined from the value in use calculation. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. The directors estimate discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.

The assessment of recoverability of the carrying amount of goodwill and intangible assets with indefinite useful life includes:

  • forecasted cash flow projections for the next three years and projection of terminal value using the perpetuity method;
  • growth rates to perpetuity of 2% (2022: 2%); and
  • use of 26.8% (pre-tax) (2022: 26.8%) to discount the projected cash flows to net present values

Based on the above assessment, the directors expect the carrying amount of goodwill to be recoverable.

CGU - IT Solutions and Security Systems

The recoverable amount of the CGUs is determined from the value in use calculation. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. The directors estimate discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.

The assessment of recoverability of the carrying amount of goodwill and intangible assets with indefinite useful life includes:

  • forecasted cash flow projections for the next three years and projection of terminal value using the perpetuity method;
  • growth rates to perpetuity of 2% (2022: 2%); and
  • use of 21.5% (pre-tax) (2022: 18.6% - 20.5%) to discount the projected cash flows to net present values

Based on the above assessment, the directors expect the carrying amount of goodwill to be recoverable.

Harvest Technology p.l.c.

18

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

7

Intangible assets

Total

The group

€

Gross carrying amount

At 1 January 2022

2,863,927

Additions

345,010

At 31 December 2022

3,208,937

Gross carrying amount

At 1 January 2023

3,208,937

Additions

245,575

At 30 June 2023

3,454,512

Amortisation

At 1 January 2022

1,687,032

Provision for the year

401,280

At 31 December 2022

2,088,312

At 1 January 2023

2,088,312

Provision for the period

209,392

At 30 June 2023

2,297,704

Carrying amount

At 31 December 2022

1,120,625

At 30 June 2023

1,156,808

The amortisation charge was included in administrative expenses.

Intangible assets include the payment gateway together with development costs, software, licences etc.

The Group tests intangible assets with an indefinite useful life annually for impairment or more frequently if there are indications that intangibles might be impaired. Determining whether the carrying amounts of these assets can be realised requires an estimation of the recoverable amount of the cash generating units. The value in use calculation requires the directors to estimate the future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value.

Based on the assessments carried out as disclosed in note 6, the directors expect the carrying amount of intangible assets with an indefinite useful life to be recoverable.

Harvest Technology p.l.c.

19

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

7

Intangible assets - continued

Total

The company

€

Gross carrying amount

At 1 January 2022

41,550

Additions

-

At 31 December 2022

41,550

At 1 January 2023

41,550

Additions

4,920

At 30 June 2023

46,470

Amortisation

At 1 January 2022

37,495

Provision for the year

4,055

At 31 December 2022

41,550

At 1 January 2023

41,550

Provision for the period

820

At 30 June 2023

42,370

Carrying amount

At 31 December 2022

-

At 30 June 2023

4,100

Harvest Technology p.l.c.

20

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

8 Right-of-use assets

The following assets have been recognised as right-of-use assets of the Group:

Buildings

Motor vehicles

Total

The group

€

€

€

Gross carrying amount

At 1 January 2022

644,214

536,275

1,180,489

Additions

-

89,707

89,707

Termination of lease

-

(61,533)

(61,533)

At 31 December 2022

644,214

564,449

1,208,663

At 1 January 2023

644,214

564,449

1,208,663

Additions

-

54,834

54,834

At 30 June 2023

644,214

619,283

1,263,497

Depreciation

At 1 January 2022

107,369

284,170

391,539

Provision for the year

214,738

92,020

306,758

Termination of lease

-

(45,509)

(45,509)

At 31 December 2022

322,107

330,681

652,788

At 1 January 2023

322,107

330,681

652,788

Provision for the period

107,369

50,892

158,261

At 30 June 2023

429,476

381573

811,049

Carrying amount

At 31 December 2022

322,107

233,768

555,875

At 30 June 2023

214,738

237,710

452,448

The following assets have been recognised as right-of-use assets of the Company:

Buildings

The Company

€

Gross carrying amount

At 1 January 2022

644,214

At 31 December 2022

644,214

At 1 January 2023

644,214

At 30 June 2023

644,214

Depreciation

At 1 January 2022

107,369

Provision for the year

214,738

At 31

December 2022

322,107

At 1 January 2023

322,107

Provision for the period

107,369

At 30

June 2023

429,476

Carrying amount

At 31

December 2022

322,107

At 30

June 2023

214,738

Harvest Technology p.l.c.

21

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

The depreciation charge on right-of-use assets was included in administrative expenses.

The Group and the Company have elected to disclose right-of-use assets separately in these financial statements. The information pertaining to the gross carrying amount, depreciation recognised during the year and other movements in right-of-use assets is included in the above tables.

The weighted average incremental borrowing rate applied to lease liabilities recognised under IFRS 16 is 3.93%. The incremental borrowing rate will be re-assessed every time a new lease is entered into by the Group and the corresponding right-of-use asset recognised. New leases are assessed on a case-by-case basis.

At 30 June 2023, the Group's leases compromise of its office space and car park lease and its motor vehicles.

9 Trade and other receivables

Trade and other receivables consist of the following:

The group

The group

The company

The company

30 June

31 December

30 June

31 December

2023

2022

2023

2022

(Unaudited)

(Audited)

(Unaudited)

(Audited)

€

€

€

€

Trade receivables - gross

2,217,610

4,660,852

-

-

Allowance for expected credit losses

(245,490)

(237,928)

-

-

Trade receivables - net

1,972,120

4,422,924

-

-

Amounts owed to ultimate parent

10,216

-

-

-

Amounts owed by parent company

12,391

8,691

-

-

Amounts owed by subsidiaries

-

-

449,508

189,715

Advance payments

6,623

6,623

-

-

Other receivables

449,269

81,037

27,833

7,764

Amounts owed by other related parties

132,724

110,407

1,529

-

Financial assets

2,583,343

4,629,682

478,870

197,479

Other receivables

11,988

41,411

8,181

-

Trade and other receivables - current

2,595,331

4,671,093

487,051

197,479

The carrying value of financial assets is considered a reasonable approximation of fair value. No interest is charged on trade and other receivables.

Amounts owed by ultimate parent and other related parties are unsecured, interest free and repayable on demand.

Harvest Technology p.l.c.

22

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

10 Cash and cash equivalents

Cash and cash equivalents include the following component:

Cash and bank balances

Cash and cash equivalents in the Statements of cash flows and the statements of financial position

The group

The group

The company

The company

30 June

31 December

30 June

31 December

2023

2022

2023

2022

(Unaudited)

(Audited)

(Unaudited)

(Audited)

€

€

€

€

2,983,045

2,716,977

576,697

726,830

2,983,045

2,716,977

576,697

726,830

The Group did not have any restrictions on its cash at bank as at the end of the reporting period.

11

Trade and other payables

The group

The group

The company

The company

30 June

31 December

30 June

31 December

2023

2022

2023

2022

(Unaudited)

(Audited)

(Unaudited)

(Audited)

€

€

Trade payables

610,771

1,157,432

27,566

1,612

Amounts payable to ultimate parent

6,059

-

6,059

-

Amounts payable to related parties

399

32,306

-

8,759

Other payables

6,763

15,991

Accrued expenses

1,007,124

980,733

113,237

73,300

Financial liabilities

1,631,116

2,186,462

146,862

83,671

Other creditors

298,232

811,998

-

8,087

Trade and other payables - current

1,929,348

2,998,460

146,862

91,758

The carrying values of financial liabilities are considered to be a reasonable approximation of fair value.

No interest is charged on trade and other payables.

Harvest Technology p.l.c.

23

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

12 Related party transactions

Harvest Technology p.l.c. is the parent company of the Group comprising PTL Limited, APCO Limited, APCO Systems Limited and Ipsyon Limited. The majority shareholder of Harvest Technology p.l.c. is 1923 Investments p.l.c. which is incorporated in Malta which is in turn owned by Hili Ventures Limited. The registered office of 1923 Investments p.l.c. and Hili Ventures Limited, is Nineteen Twenty Three, Valletta Road, Marsa, MRS 3000, Malta.

During the year under review, the Group entered into transactions with related parties as set out below:

1 January to 30 June 2023

1 January to 30 June 2022

(Unaudited)

(Unaudited)

Related

Related

party

Total

party

Total

activity

activity

activity

activity

Unaudited

Unaudited

Unaudited

Unaudited

€

€

%

€

€

%

Revenue:

Related party transactions with:

Ultimate parent

45,980

-

-

24,581

-

-

Parent company

32,034

-

-

19,162

-

-

Other related parties

235,151

-

-

151,188

-

-

313,165

7,197,859

4.35%

194,931

8,291,071

2.35%

Cost of sales:

Related party transactions with:

-

-

-

-

-

-

Other related parties

-

-

-

-

-

-

-

4,578,429

0.00%

-

4,974,405

0.00%

Administrative expenses:

Related party transactions with:

Ultimate parent

5,159

-

-

294

-

-

Parent company

704

-

-

1680

-

-

Other related parties

127,574

-

-

113,092

-

-

133,437

2,619,430

5.09%

115,066

2,195,434

5.24%

Finance cost:

Related party transactions with:

Other related parties

5,757

-

-

9,884

-

-

5,757

11,113

51.80%

9,884

15,849

79.30%

Harvest Technology p.l.c.

24

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

12 Related party transactions - continued

1 January to 30 June 2023

1 January to 30 June 2022

(Unaudited)

(Unaudited)

Related

party

Total

Related

activity

activity

party

Total

The company

Unaudited

Unaudited

activity

activity

€

€

%

€

€

%

Revenue:

Related party transactions with:

Subsidiaries

241,821

237,361

241,821

241,821

100%

237,361

237,361

100%

Administrative expenses:

Related party transactions with:

Ultimate parent

5,159

268

Parent company

15

Other related parties

124,253

121,274

129,427

633,768

20%

121,542

631,692

19%

Finance income:

Related party transactions with:

Subsidiaries

-

-

4,462

-

-

0%

4,462

4,462

100%

Finance cost:

Related party transactions with:

Other related parties

5,757

-

-

9,884

-

-

5,757

5,757

100%

9,884

9,884

100%

Other related parties consist of related parties other than the parent, entities with joint control or significant influence over the company, subsidiaries, joint ventures in which the company is venture and key management personnel of the company or its parent company.

The directors consider the ultimate controlling party to be Mr Carmelo (sive Melo) Hili, who, through his interest in Hili Ventures Limited, holds 62.98% (June 2022: 62.98 %) of the voting rights in Harvest Technology p.l.c.

No expense has been recognised in the period for impairments in respect of amounts due by related parties and there are no provisions for impairment in respect of outstanding amounts due by related parties.

Harvest Technology p.l.c.

25

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

13 Financial instrument risk

Risk management objectives and policies

The Group is exposed to various risks in relation to financial instruments.

The Group's risk management is coordinated by the directors and focuses on actively securing the Group's short to medium term cash flows by minimising the exposure to financial risks.

The objectives, policies and processes for managing financial risks and the methods used to measure such risks are subject to continual improvement and development. Where applicable, any significant changes in the Group's exposure to financial risks or the manner in which the Group manages and measures these risks are disclosed below. Any re-assessment of risk considered by management to be of significance has been disclosed in the appropriate risk analysis below.

13.1 Market risk analysis Foreign currency risk

Foreign currency transactions arise when the Group buys or sells goods or services whose price is denominated in a foreign currency, borrows or lends funds when the amounts payable or receivable are denominated in a foreign currency or acquires or disposes of assets, or incurs or settles liabilities, denominated in a foreign currency. Foreign currency transactions comprise mainly transactions in USD and GBP.

The Group is not expected to have significant movements on exchange as it continues to monitor and manage its risks closely to minimise any impact from currency movements. In view of the Group's significant transactions being carried out in the US Dollar on one of its international projects, it matches inflows and outflows using the US Dollar to minimise the impact of currency movements on its financial performance and cash flows. As a result, management does not expect to have significant currency movements on such transactions.

Interest rate risk

The Group has loans and receivables and other financial liabilities with a fixed coupon. The Group also has cash at bank which is not subject to significant fluctuations in interest rates.

As a result, the Group is not exposed to significant interest rate risk as most of its interest bearing receivables and payables are either subject to a fixed interest rate or to a rate which is not considered by management to be subject to significant fluctuations until full settlement of the borrowings, which comprise mainly borrowings from bank.

13.2 Credit risk analysis

Credit risk is the risk that a counterparty fails to discharge an obligation to the Group. The Group is exposed to credit risk from financial assets including cash and cash equivalents held at banks, loans and receivables, trade and other receivables.

Credit risk management

The credit risk is managed both at the level of each individual subsidiary as well as on a Group basis, based on the Group's credit risk management policies and procedures.

Loans and receivables and certain trade receivables comprise amounts due from related parties. The Group and company's concentration to credit risk arising from these receivables are considered limited as there were no indications that these counterparties are unable to meet their obligations. Management considers these to be of good credit quality.

Harvest Technology p.l.c.

26

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

The Group and the company hold money exclusively with institutions having high quality external credit ratings. The cash and cash equivalents held with such banks at 30 June 2023 and 31 December 2022 are callable on demand. One of the banks with whom cash and cash equivalents are held forms part of an international Group with an A credit rating by Standard and Poor's and similar high ratings by other agencies. The Group also holds cash with a local bank having a credit rating of BBB- by Standard and Poor's. Cash held by the Group with other local banks for which no credit rating is available are not significant. Management considers the probability of default from such banks to be close to zero and the amount calculated using the 12-month expected credit loss model to be very insignificant. Therefore, based on the above, no loss allowance has been recognised by the Group and the company.

The Group assesses the credit quality of its customers by taking into account their financial standing, past experience and other factors, such as bank references and the customers' financial position.

Management is responsible for the quality of the Group's credit portfolios and has established credit processes involving delegated approval authorities and credit procedures, the objective of which is to build and maintain assets of high quality.

Individual risk limits are set in accordance with limits set by the board. The utilisation of credit limits is regularly monitored. Each new individual customer is analysed individually for creditworthiness before the company's standard payment and delivery terms and conditions are offered. Purchase limits are established for each customer, which represents the maximum open amount without requiring approval from management. Customers that fail to meet the Group's benchmark creditworthiness may transact with the Group only on a prepayment basis.

The Group's policy is to deal only with credit worthy counterparties. The credit terms is generally between 30 and 90 days. The credit terms for customers as negotiated with customers are subject to an internal approval process as abovementioned. The ongoing credit risk is managed through regular review of ageing analysis, together with credit limits per customer.

Trade receivables consist of a large number of customers in various industries and mainly in Malta. At 30 June 2023 and 31 December 2022, the Group also had a significant financial asset on its ongoing project in Mauritius as contract assets.

The Expected Credit Loss (ECL) at 30 June 2023 and 31 December 2022 was estimated based on a range of forecast economic scenarios as at that date.

Trade receivables

The Group applies the IFRS 9 simplified model of recognising lifetime expected credit losses for all trade receivables as these items do not have a significant financing component.

In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess shared credit risk characteristics. They have been grouped based on the days past due and also according to the geographical location of customers.

The expected loss rates are based on the payment profile for sales over the past 36 months before 30 June 2023 and 31 December 2022 respectively as well as the corresponding historical credit losses during that period. The historical rates are adjusted to reflect current and forward looking macroeconomic factors affecting the customer's ability to settle the amount outstanding. The Group has identified gross domestic product (GDP) and unemployment rates of the countries in which the customers are domiciled to be the most relevant factors and accordingly adjusts historical loss rates for expected changes in these factors. However given the short period exposed to credit risk, the impact of these macroeconomic factors has not been considered significant within the reporting period.

Harvest Technology p.l.c.

27

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

There are no particular indicators that suggest that the assessment of the expected credit risk model adopted by the Group materially varies from expectations of collectability and previous patterns of payments from such customers. While the Group continues to closely monitor all of its financial assets at more frequent intervals as a result of such events, management considers that the level of ECL provisions at period end remains adequate.

13.3 Liquidity risk

The Group's exposure to liquidity risk arises from its obligations to meet its financial liabilities, which comprise trade and other payables and other financial liabilities. Prudent liquidity risk management includes maintaining sufficient cash to ensure the availability of an adequate amount of funding to meet the Group's and company's obligations when they become due.

Management considers that the Group is not exposed to a significant amount of liquidity risk as it continues to efficiently manage its liquidity needs on a timely basis. The Group has not encountered any particular difficulties to collect amounts due from customers and collections remain within expectations as explained above.

13.4 Financial instruments measured at fair value

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

  • Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
  • Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
  • Level 3: unobservable inputs for the asset or liability.

At 30 June 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 fair values of non-current financial liabilities and the non-current loans and receivables are not materially different from their carrying amounts due to the fact that the interest rates are considered to represent market rates at the year-end or because they are repayable on demand. The fair values of the financial assets and financial liabilities included in the level 2 category above have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparties.

Fair value 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.

For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the company and the Group determine when transfers are deemed to have occurred between Levels in the hierarchy at the end of each reporting period.

Harvest Technology p.l.c.

28

Condensed Consolidated Interim Financial Statements

For the period 1 January to 30 June 2023

14 Contingent liabilities and guarantees

At 30 June 2023, the group's subsidiaries had guarantees amounting to € 690,379 (at 31 December 2022: €572,570) in favour of third parties on major projects being executed in Malta.

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Harvest Technology PLC published this content on 09 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 August 2023 13:40:02 UTC.