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Company Registration No. C 56012
VBL PLC
Annual Financial Report
and
Consolidated Financial Statements
31 December 2024
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
1
CONTENTS
Pages
General information 2
Directors’ report 3 - 10
Remuneration report and statement of the Directors 11 - 13
Statement by the Directors on Compliance with the Code of Principles of
Good Corporate Governance 14 - 21
Statement of comprehensive income 22
Statement of financial position 23
Statement of changes in equity 24
Statement of cash flows 25
Notes to the consolidated financial statements 26 - 50
Independent auditor’s report 51 - 57
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
2
GENERAL INFORMATION
Registration
VBL Plc is registered in Malta as a public limited liability company under the Maltese Companies Act (Cap. 386).
The company’s registration number is C 56012. Since last publication, there were no changes to the name of the
reporting entity.
Place of domiciliation
Malta
Principal place of business
Malta
Directors
Dr. Andrei Imbroll
Dr. Geza Szephalmi
Mr. Julian Tzvetkov
Mr. Artur Haze
Mr. David Galea Souchet
Ms. Isabella Vella
Dr. John Attard
Company secretaries
Dr. Joseph Borg Bartolo and Dr. Mikiel Calleja
Registered office and principal place of business
54, Marsamxett Road
Valletta VLT 1852
Malta
Principal bankers
Bank of Valletta p.l.c.
184, Triq In-Naxxar
San Gwann SGN 9030
Malta
Auditors
RSM Malta
Mdina Road
Zebbug ZBG 9015
Malta
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
3
DIRECTORS’ REPORT
The Directors present their annual financial report and audited consolidated financial statements of VBL Plc (“the
Company”) and its subsidiaries (together, “the Group” or the “VBL Group”) for the year ended 31 December 2024.
Principal activities
The Company and its fully owned subsidiaries forming the VBL Group, are involved in property ownership and
the full process of real estate acquisitions, integrated real estate development, property management, operations,
utilisation (rental) and disposal of properties. The Group’s main market of operation is Valletta, which is a
UNESCO world heritage site, and is a protected, unique and fortified city, the political and administrative centre
of Malta.
During the course of over ten years of operations, the Group has established itself as one of the largest and most
active investors in immovable property in Valletta (based on the number of owned, acquired and developed units,
and the number of operated/managed properties in Valletta). VBL Group has a successful track record of
identifying, acquiring, developing and managing real estate all around Valletta.
The Group’s principal areas of activities are as follows:
A. Property ownership, regeneration and maintenance.
B. Identification and acquisition of real estate assets in the city of Valletta, and the consolidation of acquired
properties to achieve sizeable development projects, spanning the planning and permitting stage to the
preparation and development of the projects.
C. Execution, on a project-by-project basis, of the restructuring, conceptualisation, re-development, re-
generation and renovation of acquired real estate assets, including regeneration and improvement of related
areas, neighbourhoods or districts of the city, improving overall quality of life for the local community and
residents, creating modern, liveable community areas and supporting development of social and cultural
activities.
D. Operation and management of commercial and residential real estate assets with a view to generating a
growing recurring rental income; or sale, and occasionally management for the new owners, of the
re-developed assets, where the commercial opportunity to dispose of the asset secures higher margins than
its on-going operation. This operational area also includes the management of other third-party real estate
assets for accommodation, commercial and office space and the provision of professional operation and
management of established hotels and hostels, by leveraging on VBL’s existent operational structures and
highly skilled management team, while providing high value-added services and overall solution to owners
of such assets.
The Group has developed fully integrated professional skills and management structure with large range of in-
house capabilities in each of the principal activities undertaken by the Group, ranging from the asset acquisition,
asset regeneration/renovation/development, management and operation activities. The Group has established
and operates a vertically integrated business process, based on a very well defined and focused target market,
where it has proven skills to deliver on all aspects the whole cycle, whereby ensuring the high quality of products
and/or services based on established in-house systems and structures, supported by a selection of trusted long-
term business partners and sub-contractors to ensure efficiency and to reduce dependency on more vulnerable,
short-term commerc ial relations, thus also e nsuring tha t maximum benefit is d erived from all margi ns.
Review of Business Development and Financial Position of the financial year 2024
The financial performance of the Group has remained stable and has shown continuous growth from the previous
years. During the reporting period, the Group managed to increase its revenues compared to the previous year,
resulting in a 25% increase in 2024, whilst operational profitability, i.e. Operational EBITDA, at €1,163,203 up
from €532,254 and Operational EBITDA Margin at 29% up from 16%, showing significant growth. The Group’s
operations continue to be dependent on overall market trends, such as global economy trends, airline seat
capacity, consumer price changes, services inflation and labour market supply challenges. During the reporting
period, the Group has remained successful in terms of progressing with the implementation of its announced
strategy, renovation programme and - as part of its hospitality operations - consolidation of the Valletta hospitality
market adding new units to its hospitality operations, both third party managed and own developed units. The
Group has retained focus on its core market, Valletta.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
4
DIRECTORS’ REPORT - continued
Review of Business Development and Financial Position of the financial year 2024 - continued
In the reporting period, the Group has continued to progress with its development programme, which has resulted
into €2,558,543 of Investment Income, as the balance of fair value movement of individual portfolio assets and
an overall significant increase in the book value of Investment Properties amounting to €6,223,406.
The proportion of renovated operational assets continues to grow, however it remains relatively low compared to
the Group’s total owned portfolio. As of 31 December 2024, only about 30% of the Group’s owned assets, based
on square meters, were operational and revenue generating. The remaining part of the Group owned assets are
under development or are being prepared for development, which projects significant growth opportunities in the
coming years, result from the conversion of the owned non-performing assets into renovated, revenue generating
properties. In the course of the current business year, the development activity of the Group was progressing to
plan and additional unconverted assets were transformed to operational properties, adding over 500 square
meters to the developed operational portfolio of revenue generating assets, in addition to several other ongoing
development projects. During the year, the Group has also signed a 30-year lease agreement with Ruby Hotels
Ltd., an international hospitality operator, in relation to the future operation of the Group’s current flagship project
under development.
The Group continued using its long-term banking development financing facility, in line with the progress of the
development programme. The Group’s leverage and unused bond proceeds, however remains very low (ca
28.3%), as a result of the conservative management approach. In line with previously disclosed plans and the
growth projections and the progress of the development programme, the Group has raised €10,000,000 through
the issue of a secured, redeemable bond.
The core activity and the most significant value driver for the Group is real estate acquisitions and development,
which accounts for the most significant value changes in the Group’s accounts. The Group therefore – similarly
to its peer companies – assesses and reflects the investment income right under total revenues but shown as a
separate line, which in the reporting period has reached €2,558,543 (2023 Investment income was €2,042,475).
Investment properties fair value and net book value does not take into account the potential value of the property
at completion. Investment income reflects only the value changes from completed development or other market
adjustment in the reporting period. Project value discounts are not reflected before final completion and handover
of the development, which would then be supported by third-party independent valuation.
ACTUAL
ACTUAL
VARIANCE
Jan - Dec
Jan - Dec
2024 ACTUAL VS 2023
ACTUAL
2024
2023
€
€
€
%
Revenue
4,065,367
3,245,679
819,688
25%
Investment Income
2,558,543
2,042,475
516,068
25%
Cost of Sales
(1,702,351)
(1,696,305)
(6,046)
0.4%
Gross Profit
4,921,559
3,591,849
1,329,710
37%
GOP Margin
74%
68%
6%
Other Operating Income
21,673
28,403
(6,730)
(24%)
Total Operating Costs
(1,221,486)
(1,045,523)
(175,963)
17%
EBITDA
3,721,746
2,574,729
1,147,017
45%
EBITDA Margin
56%
49%
7%
EBITDA (Operational)
1,163,203
532,254
630,949
119%
EBITDA Margin (Operational)
29%
16%
13%
Notes: Operational EBITDA and Operational EBITDA margin is calculated without investment income.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
5
DIRECTORS’ REPORT - continued
Dividends and Reserves
Dividend payment for the year ended 31 December 2024, will be considered and proposed by the Directors for
the decision of the Annual General Meeting. During the reporting period, a total dividend of €200,000 was
distributed to the shareholders for the year ended 31 December 2023 (corresponding to 0.0803 Euro Cents per
share).
The Directors have proposed the balance of retained earnings amounting to €16,496,908 (2023: €14,179,889)
be carried forward to the next financial year.
Listed Company Status
VBL Plc. as the principal company of the Group is a listed entity at the Malta Stock Exchange (“MSE”). In the
reporting year, there was no change in the number of the issued ordinary shares.
As at 31 December 2024, 100% of the Group’s equity and issued share capital is listed on the MSE with a total
number of shares in issue of 249,179,183. All shares of the Group are ordinary shares, with nominal value of
€0.20 each, and have the same shareholders’ rights.
The authorised share capital of the Group is €66,000,000.
Events After the End of the Reporting Period
There were no specific, materially important, events affecting the Group or its long-term outlooks, which occurred
since the end of the reporting year. The long-term effects of the current global economic situation, global
uncertainties and challenges might have an impact on the Group’s long-term business and development strategy.
Future Developments
The Group plans to continue its dynamic growth by implementing its declared strategy and announced
development programme of its owned assets, as well as improve further the operational economies and utilisation
of its already developed assets in line with its long-term business strategy and financial plans. The Group’s
renovation and regeneration programme of converting its owned assets into modernised, revenue generating
properties, continues. The Group consistently builds and maintains a proprietary pipeline on the Valletta real-
estate market. The Group’s acquisition focus remains highly opportunistic and is more pronounced towards larger
assets or landmark properties. The Group has proven experience in unlocking complex and difficult ownership
situations, which remains a key driver of future growth in value. The applied business strategy of the Group
ensures acquisition of complex properties at attractive terms, not generally available on the market. Identified
pipeline deals are not reflected in the current valuation of the assets, while they represent a significant additional
value potential. Further growth in the Group’s revenues and assets value shall be achieved through realisation
of the existing proprietary pipeline. Implementation of the acquisition and development strategy is dependent of
the available investment resources and other market factors.
Ongoing developments are valued on a project value basis, where the full value of the asset would be realised
upon final completion of the projects. The ongoing and planned development projects of the Group is projected
to result in significant property value increase upon completion of the regeneration projects, in the mid-term and
long-term, in line with the specific project execution plans announced and updated by the Group, from time to
time.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
6
DIRECTORS’ REPORT - continued
Financial Risk Management
The Group is exposed to a variety of financial risks, including - among others - market risk, credit risk and liquidity
risk. The Group’s overall risk management program focuses on the unpredictability of the external market factors
and the financial markets and seeks to minimise potential adverse effects on the Group's financial performance.
The Group uses different methods to assess different types of risks to which it is exposed. These methods include
sensitivity analysis, assumption modelling and ageing analysis for credit risk. Risk management is carried out by
executive management under policies adopted by the Group. These policies include identification and analysis
of the Group and appropriate procedures, controls and risk limits.
Environmental, Social and Governance (ESG) responsibility and commitment
The Group and its stakeholders, including directors, management, employees and investors, are increasingly
emphasising the importance of enforcing environmentally and socially responsible, ethical and sustainable
business practices. As part of this effort, the Group has established a dedicated leadership team, which is
knowledgeable about ESG priorities and can provide continuous guidance and coordinated efforts to all
stakeholder in shaping up the corporate culture, internal and external processes where th e Group has influence,
raising the ESG awareness on its core market of operation, and demonstrating a genuine commitment to ethical
and sustainable business practices, along with emphasising environmental and social ethical behaviour. The
Group’s declared commitment to improving all areas of the business, environmental and social ecosystem of the
Group, is aiming to contribute to a better future, while ensuring preservation of the architectural, environment and
historical values, together with ensuring the long-term sustainability and profitability of its operations, based on
the implementation of the defined business strategy. As a result, during the reporting period, the Group has
increased its efforts and awareness of the ESG issues, understanding how essential they are to effectively
navigate the Group and its business in this evolving landscape and ensure the long-term success of the Group.
The Group has been assessing and responding to all three ESG pillars.
Of the three pillars, the most sector specific in the Group’s case is clearly sustainability and the environmental
considerations, both in Development and Real Estate Management, Hospitality fields.
1. Environmental – 3R Methodology (Reduce-Reuse-Recycle), is the heart of Group’s decision-making
process.
In the phase of Development, the key focus areas are:
a. Avoiding green-field development and new construction, using mainly traditional and where
possible recycled construction materials, avoiding taking up new areas and spaces;
b. Regeneration of existing floor slabs reduces the concrete requirements across all of the Group’s
development projects;
c. Applying traditional old Maltese tiles sourced from within the Group’s own portfolio are reused in
all development projects;
d. Restore and reuse wooden beams which are found in historical properties playing a major part
of Group’s recycling program;
e. Reduction of construction waste by repurposing of existing building structure;
f. Storage and eventual reuse of old limestone, traditional Maltese cement tiles, xorok (stone slabs),
wooden aperture and other reusable materials;
In the field of Real Estate Management, Hospitality, the key focus areas are:
g. Reduce and eliminate where possible the use of single-use plastic, installation and application
of dispensers, reusable inventory and alike;
h. Preservation and conservation, with furniture relocation scheme implemented within the Group’s
portfolio, allowing reuse of old traditional furniture based on property class;
i. Recycling of obsolete apertures into artistic elements within the portfolio;
j. Introduction of RMS (room management system) to reduce power requirements in all newer
developments; and
k. Application of energy management systems, flow control and similar practices, reducing energy
and water wastage.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
7
DIRECTORS’ REPORT - continued
Environmental, Social and Governance (ESG) responsibility and commitment - continued
2. Social
a. Equal treatment within workforce, whether own or outsourced;
b. Diversity of nationalities, 10 plus nationalities in workforce at all times both local, EU or non-EU;
c. Gender neutral Human Resources (HR) and management setup; and
d. Corporate culture built on open door policy, equality, fairness and transparency.
3. Governance
a. The Company as a listed entity, is under the supervision of the MFSA (Malta Financial
Supervisory Authority);
b. Transparency is in the focus;
c. Follows corporate best practices, rules and regulations;
d. As a public company, follows General Data Protection Regulation (GDPR) and Anti-Money
Laundering (AML) international standards; and
e. The Group has no political engagements.
Going Concern
Currently, the Directors are of the opinion that even though the global and local market trends might deliver
turbulent short- and mid-term forecast, over the long run Management do not see any going concern issues. The
Group’s financial performance is expected to keep on benefitting from its existing inflation-resistant portfolio of
prime real estate assets, located in the historic city of Valletta, which is providing excellent positions for delivering
a solid and sustainable long-term growth. The Group remains on the path of development and growth resulting
from the implementation of its conservative business and financial strategy and ongoing development
programme. The Directors assumed that core market of operation, the industry and the general economic
environment will remain stabilised in mid to long term and the Group’s financial results will keep on following this
trend.
The ongoing renovation and regeneration projects are progressing as expected, coping with the industry specific
issues and managing the interim delays and are expected to be successfully concluded generally in line with the
project completion schedules in the coming years, as communicated by the Group, subject to the current, known
market risks and economic factors remaining constant or improving further.
The Group’s current low level of indebtedness and the structure of the long-term development loans, provide for
a better than average resistance to internal and external industrial or financial challenges, while the increasing
inflationary and interest rate pressure is mostly affecting companies with a less strong balance sheet and less
resistant asset base.
The current economic landscape and market conditions on the core market of the Group present new
opportunities, which the Group plans to continue to explore, aiming to further enhance its core product, together
with maintaining its very clear strategy and focus.
The Directors expect that under the currently known market conditions on the local or international landscape
and expected business developments, the Group will not face a going concern issue.
Principal Risks and Uncertainties
The key risk factors the Group is facing, have been categorised under five main categories, according to whether
the risk factors relate to:
(i.) risks relating to the acquisition and disposal of immovable property;
(ii.) risks relating to construction and development of immovable property;
(iii.) risks relating to management and operation of immovable property;
(iv.) risks related to the change of interest rates and the conditions of financing deriving from the overall global
economy, local financial market, global and European inflationary environment and Euro-based interest
rates; and
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
8
DIRECTORS’ REPORT - continued
Principal Risks and Uncertainties - continued
(v.) risks relating to the general business and operations of the Group, including global political and economic
instability, cyber threats, or supply chain risks. This category of risk factors is intended to encapsulate
those risk factors that concern the day-to-day operations and activities of the Group, regardless of the
line of operations concerned and are, therefore, considered to apply equally to each of the individual
business lines referred to in categories (i) to (iii). In addition, the Board of Directors considers that in view
of the concentration of the Company’s immovable properties in Valletta, it is appropriate to identify those
specific risks that are attributable to, or associated with, the market for immovable property situated in
Valletta, taking into account the unique characteristics of the Valletta market, its historic and
political/administrative background. Those risks relating specifically to the Valletta immovable property
market that are identifiable at the date hereof have been included within the main categories referred to
above respectively.
If any of the risks described were to materialise and could not be mitigated under reasonable terms, they could
have a serious effect on the Group’s financial results, financial condition, operational performance, business
and/or trading prospects. The risks and uncertainties discussed above are those identified as such by the Board
of Directors as at the date of this Report, but these risks and uncertainties may not be the only ones that the
Group faces or could face. Additional risks and uncertainties, including any which the Board of Directors are not
currently aware of, or that the Board of Directors currently deem immaterial or remote, individually or cumulatively,
may well result in a material impact on the financial results, financial condition, operational performance, and/or
trading and development activities of the Group.
Shareholding Structure of the Group Pursuant to Capital Markets Rule 5.64
The issued share capital of the Group as at the date of this report is 249,179,183 ordinary shares with a nominal
value of €0.20 per share. All shares are listed on the Malta Stock Exchange and hold the same rights.
The Group’s shareholders holding 5% or more in direct or indirect shareholding are:
Shareholder's Name
Number of Shares
(owned directly)
VBLM Limited
46,000,010
Artur Haze
44,010,815
Geza Szephalmi
40,433,395
Andrei Imbroll
36,919,655
Sorbusenco Enterprises Limited
22,635,560
Petrolsped (Malta) Ltd
14,997,045
Julian Tzvetkov
12,005,245
VBLM Limited is a management company, which has entered into a Management Services Agreement with the
Group, pursuant to which VBLM Limited provides the Group with, inter alia, senior executive and strategic
management and other support services. There are no restrictions on the transfer of shares of the Company, nor
other limitations on the holding of securities or the need to obtain the approval of the Company or other holders
of securities.
Powers of the Board Members Pursuant to Capital Markets Rule 5.64.9
The powers of the Directors are outlined in Article 49 of the Articles of Association of the Group.
Disclosure of Material Contracts Pursuant to Capital Markets Rule 5.70.1
The Group is party to a number of material value contracts, including contracts entered into in connection with
the acquisition or disposal of real estate assets, the renovation or development of real estate assets, and the
subsequent lease and operating agreements in connection with real estate assets, which are considered
contracts in the ordinary course of business. All of those contracts have been entered into in the ordinary course
of the Group’s business and are considered to be at arm’s length and un der the general business and ethical
standards applied by peer companies, globally.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
9
DIRECTORS’ REPORT - continued
Disclosure of Material Contracts Pursuant to Capital Markets Rule 5.70.1 - continued
As at the date of this Report, the Board of Directors considers that the only material contract entered into outside
the ordinary course of business of the Group is the Management Services Agreement with VBLM Limited, a
structure in place since the establishment of the VBL Group, and details of which have been disclosed by the
Group in various communications and also published in Section 4.3 of the Registration Document (Prospectus),
dated 04 October 2024 and further detailed in the Directors’ Remuneration Report section of this document.
Company Secretary and Registered Office of the Company Pursuant to Capital Markets Rule 5.70.2
Dr. Joseph Borg Bartolo and Dr. Mikiel Calleja
54, Marsamxett Road, Valletta VLT 1852 Malta
Statement of Responsibility Pursuant to Capital Markets Rule 5.68
The Directors declare that to the best of their knowledge, the consolidated financial statements included in the
Annual Financial Report are prepared in accordance with the requirements of International Financial Reporting
Standards as adopted by the European Union, as amended from time to time and these statements give in all
material aspects a true and fair view of the assets, liabilities, financial position and results of the Group and that
this report includes a fair review of the development and performance of the business and position of the Group,
together with a description of the principal risks and uncertainties that it faces.
Indemnification of the Directors and Senior Management by the Annual General Meeting
In line with standard international practices and Article 148 of the Maltese Companies Act, since inception, the
Group’s Directors propose to the Annual General Meeting of the Group, a resolution on the indemnification of the
Directors and Senior Management, related to the year of reporting, to indemnify the members of the Board of
Directors and Senior Management of the Group from liabilities and expenses to which any such person(s) may
become a party as a result of such individual’s acts carried out for and on behalf of the Group, or any of its
associated companies, or affiliates, limitedly in so far as such acts are carried out in the individual’s capacity as
a Director or Senior Manager, as applicable.
The purpose of such resolution, in line with the applicable Maltese laws and governance standards, is to obtain
shareholder approval in order to allow for an indemnity to be provided by the Group to the directors and senior
management. Such indemnification, as per law, is excluding the cases of fraud, criminal act, gross negligence
and alike. This, if proposed and consecutively approved by the Annual General Meeting of the Group, would
result in the said person/s being protected (within the limits of the applicable Maltese laws) for any liabilities and
expenses that may arise as a result of their duties being exercised for and on behalf of the Group or associated
companies, or affiliates.
Board of Directors
The Board of Directors of the Company currently consists of the following Directors:
Dr. Geza Szephalmi, Chairman and Executive Director
Dr. Andrei Imbroll, Executive Director
Mr. Julian Tzvetkov, Executive Director
Dr. John Attard, Non-Executive Director, Member of the Audit Committee
Mr. David Galea Souchet, Non-Executive Director, Chairman of the Audit Committee
Mr. Artur Haze, Non-Executive Director, Member of the Audit Committee
Ms. Isabella Vella, Non-Executive Director, Member of the Audit Committee
Under the provisions of the Company’s Memorandum and Articles of Association, the appointment of the directors
happens at the Company’s General Meeting.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
10
DIRECTORS’ REPORT - continued
Auditors
A proposal will be submitted to the Annual General Meeting to re-appoint RSM Malta as Auditor to the Group for
year 2025 and to set their remuneration for the period.
Statement of Directors’ responsibilities for the financial statements
The Maltese Companies Act (Cap. 386), requires the Directors to prepare consolidated financial statements for
each financial year which give a true and fair view of the financial position of the Group as at the end of the
financial year and of the profit or loss for that year.
In preparing the consolidated financial statements, the Directors are responsible for:
▪ adopting the going concern basis unless it is inappropriate to presume that the Group will continue in business
as a going concern;
▪ selecting suitable accounting policies and applying them consistently;
▪ making judgements and accounting estimates that are reasonable and prudent;
▪ accounting for income and charges relating to the accounting period on accrual basis;
▪ valuing separately the components of asset and liability items;
▪ reporting comparative figures corresponding to those of the preceding accounting period; and
▪ preparing the consolidated financial statements in accordance with International Financial Reporting
Standards (IFRS Accounting Standards) as adopted by the European Union (EU).
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at
any time the financial position of the Group and to enable the Directors to ensure that the consolidated financial
statements comply with the Maltese Companies Act (Cap. 386). This responsibility includes designing,
implementing and maintaining such internal control as the Directors determine is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud
or error. The Directors are also responsible for safeguarding the assets of the Group and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
Additionally, the Directors are responsible for:
• the preparation and publication of the Annual Financial Report, including the consolidated financial
statements and the relevant tagging requirements therein, as required by Capital Markets Rule 5.56A, in
accordance with the requirements of the European Single Electronic Format Regulatory Technical
Standard as specified in the Commission Delegated Regulation (EU) 2019/815 (the “ESEF RTS”)
• designing, implementing and maintaining internal controls relevant to the preparation of the Annual
Financial Report that is free from material non-compliance with the requirements of the ESEF RTS,
whether due to fraud or error, and consequently, for ensuring the accurate transfer of the information in
the Annual Financial Report into a single electronic format.
Signed on behalf of the Board of Directors on 24 April 2025 by Julian Tzvetkov (Director) and Dr. Andrei Imbroll
(Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the
Annual Financial Report and Consolidated Financial Statements.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
11
REMUNERATION REPORT AND STATEMENT OF THE DIRECTORS
In line with the Capital Markets Rules (the “Rules”), as set out in Chapter 12 of the Rules, the Group is subject to
draw up a Remuneration Report in line with the requirements as detailed in the Appendix 12.1 of Chapter 12,
providing an overview of the remuneration to the directors of the Group.
The Group is also subject to the Code of Principles (the “Code”) forming part of the Capital Markets Rules, and
in terms of the respective Rule (8.A.4) the Company is to include a Remuneration Statement in its Annual
Financial Report with the details of the remuneration policy of the Group and the remuneration of the Directors.
In terms of the effective Remuneration Policy of the Group (“Remuneration Policy”), and the principles
presented in the Listing Prospectus, and in alignment and compliance with the relevant and applicable guidelines,
the Board has reviewed the principles and the relevant guidelines and has concluded that based on the
significance of the Company in terms of its size and that of its operations, clients, the structure of its internal
organisation, and the nature, scope and complexity of the activities of the Group, this Policy does not require a
separate Remuneration Committee to be set-up and the responsibilities attributed to overseeing the
Remuneration Policy of the Group shall be performed by the Board of Directors. This Remuneration Policy is
reviewed regularly or as required and any material amendments thereto shall be submitted to the General Meeting
of the Company for adoption. In the reporting period, there were no changes to the Remuneration Policy.
Remuneration related to the Directors, in accordance with the Remuneration Policy
Directors’ Fee
The resolution by the Shareholders of the Company at the Annual General Meeting held on 26 July 2024,
approving the aggregate total annual remuneration of the Board of Directors, set the directors’ fees for one year
at a total of €84,000.
The directors’ fees are defined as a fixed annual amount and are reviewed and approved at the Annual General
Meeting of the Company.
The total directors’ fees paid during the financial year 2024 to the Board of Directors was €76,049. According to
the existing Remuneration Policy, the Directors are not entitled to variable fee or other remuneration or benefits
related to their directors’ position within the Group or from any undertakings belonging to the same Group,
meaning a parent undertaking and any subsidiary undertaking.
The Directors of the Group have not been granted any shares or shares options in the reporting period, as part
of their remuneration.
After an assessment of the market conditions and the particularities of the Group, the Directors have concluded
that the remuneration of the Board of Directors of the Group is considered to be in line with the size of its
operations and general applicable industry standards, and the nature, scope and complexity of its activities and
in compliance with the Remuneration Policy with no deviations from the procedure for the implementation of the
Remuneration Policy.
The Remuneration Policy of the Company is unchanged since its introduction at the Company’s Annual General
Meeting in 2022, and since there were no changes to remuneration structure of the directors. At the 2024 Annual
General Meeting (“AGM”) of the Company, the aggregate gross total remuneration of the Board of Directors of
the Company was set at €84,000 for one year. This reflects a change in the gross directors’ remuneration,
previously fixed at €70,000 in year 2021, for the aggregate gross total remuneration of the Board of Directors, by
€14,000.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
12
REMUNERATION REPORT AND STATEMENT OF THE DIRECTORS - continued
Remuneration related to the Directors, in accordance with the Remuneration Policy - continued
Directors’ Fee - continued
In accordance with Capital Markets Rules, Appendix 12.1 it is hereby disclosed that in the reporting period:
- No remuneration is received by the directors from any undertaking belonging to the same group
(parent and subsidiary)
- No share options were granted or offered to directors and CEO or other executives of the Group;
- No variable remuneration is part of the directors’ remuneration and there is no possibility to reclaim
variable remuneration (if any);
- No deviations from the procedure for the implementation of the Remuneration Policy are relevant in
the reporting period.
Executive Management and Services
Since its foundation, the Group has been managed by a dedicated management company, VBLM Ltd (“VBLM”).
As declared before and presented by the Group, VBLM is also a significant shareholder of the Company and is
itself owned, managed and controlled by the Executive Directors of the Company. Its sole activity is the
management of the Group.
The provision of management services by VBLM to the Group is based on the existing and established practice
and structure dating back to foundation of the Group and has been formalised by means of a management and
services agreement (“Management Services Agreement”) entered into between VBLM and the principal company
of the VBL Group. The nature and content of this relationship and the Agreement itself has been described in
detail in the Listing Prospectus. Pursuant to the Management Services Agreement, VBLM provides the Company
and its subsidiaries with executive, operational and strategic management and support services.
The Management Services Agreement is aimed at ensuring that the Senior Executive Management team, which
has steered the Company in attaining successful growth and development since the inception of the Group more
than a decade ago, and who have been key to establishing sound and stable operations that has resulted in the
prevailing financial and strategic market positioning of the Group, are aligned with the Shareholders’ and Group’s
interests and remains fully committed to deliver the strategic objectives of the Group in line with announced
growth and development plans. This element of continuity is considered by the Board of Directors to be in the
best interest of the Group, supporting the continuation and evolvement of its existing well-established structure,
and to further implement the Group’s business strategy and growth, while mitigating risks associated with key
personnel and senior management. The existing Management Services Agreement has been extended and is
now effective until 31 December 2027. Additional details on the Management Services Agreement were
presented in the Group’s prior communication, including the Prospectus dated 4
th
October 2024 (section 4.3. of
the Registration Document).
The remuneration payable by the Group to VBLM under the Management Services Agreement is comprised of a
combination of fixed and variable parts, consisting of a Retainer Fee (fixed annual fee, adjusted annually in line
with the official inflation index published by the NSO), a Variable Fee (ranging from 50% to 100% of the Retainer
Fee, and linked to achievement of pre-defined specific tasks, which is only payable following evaluation and
approval by the non-executive Directors); and a Performance Fee (related to the achievement of the mid- and
long-term value growth realised by the Group, as described in detail in the Listing Prospectus). The terms and
conditions of the Management Services Agreement, evaluation and the payable Variable and Performance fees
is monitored and controlled by the non-Executive Directors of the Group. An evaluation and assessment of the
Variable and Performance Fee has been carried out by the Group’s Audit Committee and Non-Executive
Directors, prior to the extension of the term of the Management Services Agreement for the years 2021 to 2023.
It has been established that a Variable Fee equivalent to 40% of the fixed fee has been achieved by the VBLM.
No Performance Fee has been achieved nor is payable for the period.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
13
REMUNERATION REPORT AND STATEMENT OF THE DIRECTORS - continued
Executive Management and Services - continued
During 2024, the Retainer Fee due to VBLM for the executive, operational and strategic management and
services provided to the Group was €446,212 (2023: €400,000), exclusive of VAT. At the end of the Management
Services Contract term, a Variable Fee amounting to €493,325 equivalent to 40% of the fixed fee has been
achieved by VBLM and inflation adjustment covering the period of years 2021 to 2023 were established. No
Performance Fee has been achieved nor is payable for the period.
Other than the directors’ fees and the management services fee, the Group does not provide any other pay,
remuneration or alike to its directors for their services. Any changes to the terms of the existing Management
Services Agreement are subject to the vetting and approval of the Audit Committee and the non-executive
directors of the Group.
The contents of this Remuneration Report have been checked by the Auditors of the Group.
Signed on behalf of the Board of Directors on 24 April 2025 by Julian Tzvetkov (Director) and Dr. Andrei Imbroll
(Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the
Annual Financial Report and Consolidated Financial Statements.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
14
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE
The Group is subject to the Code of Principles of Good Corporate Governance
1
(the “Code”) forming part of the
Capital Markets Rules. Listed companies are required under the Capital Markets Rules issued by the Malta
Financial Services Authority to include a Statement of Compliance with the Code in their Annual Financial Report,
accompanied by a report of the independent auditors.
The Board of Directors of the Group (“BOD”, “Board” or “Directors”) restate their support for the Code and
consider that they have taken such measures as are necessary in order for the Group to comply with the
requirements of the Code to the extent that these were considered appropriate and complementary to the size,
nature and operations of the Group.
Basic Principles, in Compliance with Code Provisions:
1. The managing body of the Group is an effective Board in terms of Code Provision 1, which is responsible for
accountability, monitoring, strategy formulation and policy development as specified in Code Provision 4;
2. The Chairman of the Board does not also occupy the role of Chief Executive Officer, as envisaged in Code
Provision 2;
3. The Board is composed of seven directors, including four (4) non-executives of whom three (3) are
independent in terms of Code Provision 3; thus retaining a healthy mix between executive and non-executives
in the composition of the Board of Directors. In the reporting period, the Board is composed of seven
Directors, with four (4) non-executives of whom three (3) are independent;
4. Members of the Board of Directors are all seasoned professionals, with significant local and international
professional track record, including that of directors of other listed companies, and proven experience in
applying the highest level of corporate governance standards and best management practices, obtained in
running large public and private companies;
5. The Board of Directors meets regularly and all Directors are given ample opportunity to discuss the agenda
and convey their opinions as specified in Code Provision 5;
6. The Group recognises the importance of professional development and seeks to ensure that there are
adequate schemes in place for professional development of management and employees in accordance with
Code Provision 6;
7. Of the members of the Board of Directors, the Audit Committee has been set up, consisting of four (4)
members. This body has the task, inter alia, of managing conflicts of interest in terms of Code Provision 11.
Conflicts of interest are also managed in terms of the Group's Articles of Association and the Terms of
Reference of the Audit Committee;
8. The Group has not appointed a Remuneration Committee. The Board believes that the size of the Group and
the Board itself does not warrant the setting up of an ad hoc committee to establish the remuneration
packages of individual directors, as all directors are remunerated equally for their directorship, and relies on
the constant scrutiny of the Board itself, the Group’s shareholders, the nature and the size of the Group, as
well as the market and the rules by which the Group is regulated as a listed company. The Board shall retain
this matter under review over the coming years;
9. The Nomination Committee has been appointed by the Board of Directors with majority of non-executive
directors, as members. The Nomination Committee is responsible to run a transparent nomination process
for the election/re-election of any members, as required, and as detailed and specified in the Memorandum
and Articles of Association.
10. The Group recognises the importance of its role in the corporate social, health and environmental
responsibility arena and seeks to ensure that in its development projects and ongoing operations are
respectful and it is committed to comply with the expected ESG principles and directions. 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, health and safety issues and to adopt sustainable and environmentally
responsible practices, in line with Code Provision 12;
1
https://www.mfsa.mt/wp-content/uploads/2019/02/Code-of-Principles-of-Good-Corporate-Governance-for-Listed-Entities.pdf
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
15
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Basic principles, in Compliance with Code provisions: - continued
11. Pursuant to the Group's statutory obligations, the annual financial report and financial statements, declaration
of dividends, election of directors and appointment of auditors and authorisation of the directors to set the
auditor’s fees are proposed and approved at the Group's Annual General Meeting. The Board of Directors
properly serves the legitimate interests of all shareholders and is accountable to all shareholders, particularly
through the representation of the shareholders on the Board itself. This ensures compliance with Code
Provision 9.
In the light of the factors mentioned above, the Board is of the view that the Group is in compliance with the Code.
Specific Corporate Governance principles
The Group, its Directors, its Management and Employees believe that good corporate governance is a key
element for sustainable business success and supporting the integrity and efficiency of the Company and its
Subsidiaries, operations and long-term success. The Group is committed to establishing, maintaining and
following strong corporate governance principles and best management practices in line with best local and
international practices, as a basic requirement for delivering the Group’s planned financial and business goals,
achieving its expected business potential, and protecting the Group’s investors, employees, partners, customers
and reputation.
The Group’s Directors are committed to ensure the openness and willingness to establish and follow the basic
principles set by the best international practices in corporate governance, regularly disclose financial performance
figures which are truthful and accurate, provide timely and accurate information about the Group’s goals, activities
and strategy to the investors and business partners. This is considered key in allowing the market to be able to
assess and evaluate the various foreseeable or unpredicted risks and issues related to the implementation of the
Group’s business strategy. Among others, the Group has adopted and follows the basic principles of the Code,
in order to establish strong business and governance ethics and apply those in its daily practice.
The five key specific principles adopted by Group’s governing bodies are:
i. Fairness - Fair and ethical behaviour in all dealings is fundamental to the success of Group’s business.
Today, the Group already has an established image and proven operational principles of which a
fundamental part is to act and deal in a fair and correct manner. As a result, the Group enjoys the
trust and support of its partners, peers, customers and suppliers. The Group is committed to continue
acting in accordance with the highest ethical and professional standards.
ii. Accountability - The Board’s and management’s commitment to accountability refers to the obligation
and responsibility of the Group to always act responsibly and be able to give clear explanations or
rationale for the Group’s actions and conduct.
iii. Responsibility - The Board of Directors and management are given authority, as defined in the Articles
and relevant regulations, to act on behalf of the Group, therefore they accept full responsibility for the
powers that they are given and the authority that they exercise.
iv. Transparency - This is a key principle of responsible behaviour and good governance expected by a
number of stakeholders, particularly the shareholders. The Board of Directors and Management
ensure that the various bodies or structures of the Group operate and act in a transparent and
accountable manner, provide timely and accurate reporting, and address in an open and transparent
manner any issues or matters which are faced by the Group.
v. Corporate Social and Environmental Responsibility - In addition to the above four basic corporate
governance principles, the Board of Directors and Management seek to adopt and follow the
increasingly important principles of the corporate social and environmental responsibility in the day-
to-day management practices at the Group.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
16
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Administrative, Management and Supervisory Bodies and Senior Management
The Board
The Group is managed by the Board of Directors consisting of not less than 4 (four) and not more than 8 (eight)
Directors. Since the last Annual General Meeting, there have been seven Directors, of which four are non-
executive, all of whom are entrusted with the overall direction, administration and management of the Group.
Each Director declares that he/she undertakes to:
i. maintain in all circumstances his/her independence of analysis, decision and action;
ii. not to seek or accept any unreasonable advantages that could be considered as compromising his/her
independence; and
iii. clearly express his/her opposition in the event that he/she finds that a decision of the Board may harm
the Group.
As of 31 December 2024, the Board of Directors of the Group consists of the following persons:
Name
Designation
Dr. Geza Szephalmi
Chairman and Executive Director
Dr. Andrei Imbroll
Chief Executive Officer and Executive Director
Julian Tzvetkov
Chief Financial Officer and Executive Director
Artur Haze
Non-executive Director, member of the Audit Committee
David Galea Souchet
Independent, Non-executive Director, Chairman of the Audit Committee
Isabella Vella
Independent, Non-executive Director and member of the Audit Committee
Dr. John Attard
Independent, Non-executive Director, member of the Audit Committee
As of 31 December 2024, the Company Secretaries appointed are Dr. Joseph Borg Bartolo and Dr. Mikiel Calleja.
Board Meetings
During year 2024, there have been 8 board meetings held and several decision makings in writing. At the Annual
General Meeting of the Group, the previous directors have been re-elected and there was no change in the
compositions of the Board of Directors.
The number of Board meetings attended by Directors for the year under review is as follows:
Members Attended
Andrei Imbroll 8
Artur Haze 8
David Galea Souchet 8
Geza Szephalmi 8
Isabella Vella 8
Julian Tzvetkov 8
John Attard 8
Information and professional development
The Group ensures that it provides its Directors with the necessary detailed and relevant information to enable
them effectively contribute to board decisions. The Group is committed to provide any additional analysis, data,
adequate and detailed information to its Directors, as that might be required to allow for efficient and relevant
discussions prior to decision making. The Group pledges to make available to the Directors all information as
required.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
17
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Appointment and Removal of Directors
The Directors of the Group are appointed at the General Meeting by the Shareholders in accordance with the
provisions of the Articles of Association of the Group. The procedure for the appointment of Directors shall be as
detailed and described in the Articles.
The Group shall grant a period of at least 14 days to Shareholders holding in aggregate 10% or more of the
Shares to nominate one candidate for appointment as Director for every 10% held as aforesaid. All such
nominations, including the candidate’s acceptance to be nominated as director, shall on pain of disqualification
be made on the form to be prescribed by the Directors from time to time and shall reach the Company not later
than 14 days after delivery of the said notice.
Whenever in terms of these Articles, an election is necessary amongst candidates nominated for appointment as
Directors, such election shall be conducted in the manner prescribed by the Articles or in such manner as close
as practicably possible thereto as the Directors may consider equitable in the circumstances.
Any Director may be removed at any time by the Group in General Meeting pursuant to the provisions of Article
140 of the Act. Without prejudice to the provisions of the Act, the office of a Director shall ipso facto be vacated:
- if, by notice in writing to the Group, he/she resigns from the office of Director; or
- if he/she violates in a proven way the declaration of secrecy required of him/her under the Articles and
the Board of Directors pass a resolution that he/she has so violated the declaration of secrecy; or
- if he/she is prohibited by or under any law from being a Director; or
- if he/she is removed from office pursuant to the Articles or the Act.
A retiring Director shall be eligible for re-election or re-appointment.
Powers of Directors
The Directors are empowered to act on behalf of the Group in accordance with the Memorandum and Articles of
Association, which powers may be widened or restricted from time to time by the Shareholders in General
Meeting.
The general administration and management of the Group is entrusted with the Board of Directors, who are
empowered and authorised to delegate any of its functions relating to the Group to members of the Group’s
management. The executive directors of the Company are entrusted with the executive management functions,
including the management of the day-to-day operations, as defined in the Articles and described below.
Any one or more members of the Board of Directors may also occupy the position of Chief Executive Officer of
the Group and may also occupy the position of members of the board of directors of subsidiaries or affiliate
companies of the Group from time to time.
Evaluation of the Board’s Performance
According to the statutes of the Group and the relevant regulations, the Board regularly undertakes an annual
evaluation of its performance and of its committees. The performance evaluation of each Board member shall be
done by the Board of Directors, excluding the Board member being evaluated. The Chairman takes action on the
result of the performance evaluation process in order to ascertain the strengths and to address the weaknesses,
and reports to the Board and where appropriate to the Annual General Meeting of the Group.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
18
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Remuneration of Directors
The remuneration of the Directors in any one financial year, and any changes thereto, is determined by the
General Meeting of the Group.
For the current reporting year under review, the Directors are each entitled to a gross annual remuneration of
€12,000, following the decision of the Annual General Meeting, held on 26
July 2024.
Executive Directors
The Group currently has three Executive Directors, which are organised and operated under the regulations of
the Group’s Memorandum and Articles of Association and are members of the Executive Committee (“EC”) of the
Group, represented by the Chairman. Any two of the three Executive Directors acting jointly together have
representation and execution rights on behalf of the Group to the extent permitted and as defined by the
Memorandum of Association of the Group. In this respect, and in line with the good governance standards and
internal control procedures implemented by the Group, the Memorandum of Association ties the legal
representation and the signatory rights of the Group to predefined monetary threshold, with enhanced safeguards
applicable to transactions of higher monetary value. The Group applies a dual signatory policy as determined in
the Articles of the Group and other relevant Group regulations.
Any one Executive Director of the Group shall represent the Group in judicial proceedings, as defined in the
Articles, provided that no proceedings may be instituted by the Group without the approval of the Board of
Directors of the Group. The Executive Directors are also members of the Executive Committee of the Company.
Chief Executive Officer
In terms of Article 65 of the Articles of Association, the Directors may from time to time appoint any person to the
office of Chief Executive Officer (CEO) of the Group for such period and on such terms as they deem fit.
The Directors may entrust to and confer upon a CEO any of the powers exercisable by them upon such terms
and conditions and with such restrictions as they may deem fit and may from time to time revoke, withdraw, alter
or vary all or any of such powers.
Currently, the Executive Directors, among which the CEO was nominated, are nominated and provided under the
Management Services Agreement with VBLM, which is a continuous arrangement dating back to the
establishment of the Group and the details of which have been explained in the various Group’s communications,
including the Prospectus dated 4
th
October 2024.
The CEO is responsible for the Group’s operative management and direction in accordance with the Articles, and
the directions of the Executive Committee, the resolutions of the Board of Directors and the resolutions adopted
by the General Meeting. The CEO has the responsibility to decide on the Group’s organisational structure and
relevant internal rules and regulations according to the Articles of the Group.
Declaration
None of the Directors, members of the board committees or members of management have, in the last five years:
- been the subject of any convictions in relation to fraudulent offences;
- been associated in any form with bankruptcies, receiverships or liquidations (other than voluntary) or
companies put into administration in respect of entities in respect of which they were members of
administrative, management or supervisory bodies, partners with unlimited liability (in the case of a
limited partnership with a share capital), founders or members of senior management;
- been the subject of any official public incrimination and/or sanctions by statutory or regulatory
authorities (including designated professional bodies);
- been disqualified by a court from acting as a member of the administrative, management or
supervisory bodies of a company or from acting in the management or conduct of the affairs of any
company.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
19
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Board Practices
The Directors have constituted the following committees, the terms of reference of which are determined by the
Board from time to time with the purpose of fulfilling the below mentioned purposes:
Audit Committee
The primary objective of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities over
the financial reporting processes, the audit process, financial policies and internal control structure, also overview
the Group’s system of internal controls and compliance with laws and regulations, as well as to ensure compliance
with the relevant regulations of the Capital Markets Rules. The Audit Committee of the Group is elected among
the Board members, as defined in the Articles and relevant regulations. The Audit Committee oversees the
conduct of the annual audit process, and acts to facilitate communication between the Board, the Management
and the Group’s appointed auditors.
As at the date of this Report, the Audit Committee is composed of four members – Mr. David Galea Souchet
(Chairman), Ms. Isabella Vella, Mr. Artur Haze, and Dr. John Attard. Mr. David Galea Souchet, Mr. Artur Haze
and Dr. John Attard are the Audit Committee members who are considered by the Board of Directors to be
competent in accounting and/or auditing in terms of the Capital Markets Rules. The Committee is responsible for
reviewing the financial reporting processes and policies, the system of internal control, management of financial
risk, audit process, any transactions with related parties and the Group’s process for monitoring compliance with
laws and regul ations. 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.
The Audit Committee has the task to ensure that any potential conflicts of interest are resolved in the best interests
of the Group. Its primary objective is to assist the Board in dealing with issues of risk, control and governance
and in reviewing the Group’s reporting processes, financial policies and internal control structure.
The Audit Committee’s main role and responsibilities are:
a. to review procedures and assess the effectiveness of the internal control systems, including financial
reporting;
b. to assist the Board in monitoring the integrity of the financial statements, the internal control structures, the
financial reporting processes and financial policies of the Group;
c. to make recommendations to the Board in relation to the appointment of the external auditor and to approve
the remuneration and terms of engagement of the external auditor following appointment by the shareholders
in general meeting;
d. to monitor and review the external audit functions, including the external auditor’s independence, objectivity
and effectiveness;
e. to monitor and review the internal procedures and to monitor these on a regular basis;
f. to establish and maintain access between the internal and external auditor’s of the Group and to ensure that
this is open and constructive;
g. to review and challenge where necessary, the actions and judgements of management, in relation to the
interim (if applicable) and annual financial statements before submission to the Board, focusing particularly
on:
i. critical accounting policies and practices and any changes in them;
ii. decisions requiring a major element of judgement;
iii. the extent to which the financial statements are affected by any unusual transactions in the year and
how they are disclosed;
iv. the clarity of disclosures and compliance with International Financial Reporting Standards;
v. significant adjustments resulting from the audit;
vi. compliance with stock exchange (as applicable) and other legal requirements; and
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
20
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Audit Committee - continued
vii. reviewing the Group’s statement on Corporate Governance prior to endorsement by the Board;
h. to gain an understanding of whether significant internal control recommendations made by internal and
external auditors have been implemented by management;
i. to establish and exercise oversight upon the internal audit function of the Group, and to review its plans,
activities, staffing and organisational structure;
j. to monitor the statutory audit of the annual and consolidated accounts;
k. to discuss Group policies with respect to risk assessment and risk management, review contingent liabilities
and risks that may be material to the Group; and
l. to consider other matters that are within the general scope of the Committee that are referred to it by the
Board of Directors.
During 2024, the Audit Committee met 7 times in person or via video conference, out of which 2 meetings the
Group’s appointed auditors were present and attended the meetings.
The number of Audit Committee meetings attended by Members for the year under review is as follows:
Members Attended
Artur Haze 7
David Galea Souchet 7
Isabella Vella 7
John Attard 6
Nomination Committee
The Board of Directors has formed a nomination committee, which was functional in the reporting period. The
forming and operation of the Nomination Committee was in compliance with the principle of the Code. The
proposals of the nomination committee were put forward for decisions of the Board of Directors and presented to
the shareholders, accordingly.
Executive Management Committee (EMC)
The Executive Management Committee is the main operational body of the Group, ensuring smooth and efficient
day-to-day operations and control, in line with the strategic operational decisions of the Board. The EMC consists
of the Executive Directors, senior management including the CEO, CFO and COO and any other managers of
the Group as might be appointed to the EMC, from time to time.
The EMC is represented at the Board of Directors by the Chief Executive Officer. Within the EMC, there is a clear
division of responsibilities between the members, covering all areas of the executive responsibility for the running
of the Group’s business. The EMC ensures that no one individual or small group of individuals has an unlimited
power of decision in day-to-day operations.
Relations with Shareholders and with the Market
The Group is highly committed to having an open and communicative relationship with all its shareholders and
other stakeholders. In this respect, over and above the statutory and regulatory requirements relating to the
Annual General Meeting, the publication of financial statements and Group announcements, the Group seeks to
keep an updated and informative website, and to address any information needs of the shareholders, in various
ways.
The Group has announced a Shareholders’ Loyalty Programme which is regularly updated and communicated
with the Shareholders. Currently, the Group is in the process of reviewing and expanding its Shareholders’ Loyalty
Programme, aiming to improve and increase benefits for its shareholders.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
21
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Relations with Shareholders and with the Market - continued
In line with its public status and relevant regulation, the Group regularly releases its financial reports and group
announcements, which are published through the Malta Stock Exchange, and are simultaneously published on
the Investors’ section of the Group’s website.
Conflict of Interest
The Board is fully aware of its obligations regarding dealings in securities of the Group as required by the Capital
Markets Rules and the related disclosures in case of such dealings. Related party transactions and dealings are
also disclosed as required, in compliance with the applicable rules and also disclosed in the relevant section of
the Annual Consolidated Financial Statements.
Signed on behalf of the Board of Directors on 24 April 2025 by Julian Tzvetkov (Director) and Dr. Andrei Imbroll
(Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the
Annual Financial Report and Consolidated Financial Statements.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
22
STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December

|  | 20 24 | 20 23
| Notes | € | €
Revenue | 3 | 4,065,367 | 3,245,679
Investment income | 4 | 2,558,543 | 2,042,475
Cost of sales | 5 | (1,702,351) | (1,696,305)
Gross profit |  | 4,921,559 | 3,591,849
Other operating income | 6 | 21,673 | 28,403
Administrative expenses | 5 | (1,221,486) | (1,045,523)
Earnings before interest, tax, depreciation and amortisation |  | 3,721,746 | 2,574,729
Depreciation and amortisation | 5 | (466,397) | (312,661)
Operating income |  | 3,255,349 | 2,262,068
Interest income | 7 | 17,677 | 10,067
Receivable written off | 5 | - | (20,358)
Finance costs | 8 | (327,210) | (230,736)
Profit before income tax |  | 2,945,816 | 2,021,041
Income tax expense | 9 | (463,798) | (321,970)
Profit for the year |  | 2,482,018 | 1,699,071
Other comprehensive loss: |  |  |
Items that may be reclassified subsequently to profit or loss |  |  |
Revaluation of financial assets at FVOCI, net of tax | - | (8,818) |
Total comprehensive income for the year |  | 2,473,200 | 1,699,071
Earnings per share | 25 | 0.0100 | 0.0068

The notes on pages 26 to 50 are an integral part of these consolidated financial statements.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
23
STATEMENT OF FINANCIAL POSITION
As at 31 December

|  |  | 20 24 | 20 23
|  | Notes | € | €
ASSETS |  |  |  |
Non-current assets |  |  |  |
Intangible assets |  | 10 | 53,201 | 96,409
Property, plant and equipment |  | 11 | 735,562 | 800,035
Investment properties |  | 12 | 83,351,369 | 77,127,963
Investment in a subsidia | ry | 13 | 1,200 | 1,200
Financial assets at fair value through other comprehensive income |  | 14 | 3,898,107 | -
Deferred tax assets |  | 16 | 373,926 | 142,114
|  |  | 88,413,365 | 78,167,721
Current assets |  |  |  |
Financial assets at fair value through other comprehensive income |  | 14 | 5,207,067 | -
Inventory |  |  | 2,162 | 1,551
Current tax receivable |  |  | 3,402 | -
Loans receivable |  | 15 | 126,228 | 119,961
Trade and other receivables |  | 17 | 540,117 | 261,771
Cash and cash equivalents |  | 18 | 1,085,931 | 931,866
|  |  | 6,964,907 | 1,315,149
TOTAL ASSETS |  |  | 95,378,272 | 79,482,870
EQUITY AND LIABILITIES |  |  |  |
Capital and reserves |  |  |  |
Share capital |  | 19 | 49,835,837 | 49,835,837
Share premium |  | 19 | 1,085,638 | 1,085,638
Other reserves |  | 19 | 298,327 | 329,895
General reserves |  | 19 | 1,218 | 1,218
Retained earnings |  | 19 | 16,496,908 | 14,179,889
TOTAL EQUITY |  |  | 67,717,928 | 65,432,477
Non-current liabilities |  |  |  |
Borrowings |  | 20 | 18,545,962 | 7,842,118
Lease liabilities |  | 21 | 1,361,732 | 270,639
Deferred tax liability |  | 22 | 5,049,095 | 4,373,858
Trade and other payables |  | 23 | 122,729 | 106,485
|  |  | 25,079,518 | 12,593,100
Current liabilities |  |  |  |
Income tax payable |  |  | 25,669 | -
Borrowings |  | 20 | 590,709 | 428,513
Lease liabilities |  | 21 | 233,653 | 16,152
Trade and other payables |  | 23 | 1,730,795 | 1,012,628
|  |  | 2,580,826 | 1,457,293
TOTAL LIABILITIES |  |  | 27,660,344 | 14,050,393
TOTAL EQUITY AND LIABILITIES |  |  | 95,378,272 | 79,482,870

The notes on pages 26 to 50 are an integral part of these consolidated financial statements.
Signed on behalf of the Board of Directors on 24 April 2025 by Julian Tzvetkov (Director) and Dr. Andrei Imbroll (Director)
as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Financial
Report and Consolidated Financial Statements.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
24
STATEMENT OF CHANGES IN EQUITY

|  |  | capital Share | premium Share | reserves Other | reserves General | Retained earnings | Total
|  |  | € | € | € | € | € | €
Balance at 1 January 2023 |  |  | 49,608,529 | 1,017,446 | 352,646 | 1,218 | 12,625,816 | 63,605,655
Total comprehensive income |  |  |  |  |  |  |  |
- Profit for the year |  |  | - | - | - | - | 1,699,071 | 1,699,071
Transactions with owners in their capacity as owners |  |  |  |  |  |  |  |
- Issuance of shares |  |  | 227,308 | 68,192 | - | - | 295,500 | -
- Dividends declared during the period (Note | 19 | ) | - | - | - | - | (180,000) | (180,000)
|  |  | 227,308 | 68,192 | - | - | (180,000) | 115,500
Transfer from revaluation reserve to retained earnings, |  |  |  |  |  |  |  |
net of deferred tax |  |  | - | - | (22,751) | - | 35,002 | 12,251
Balance at 31 December 2023 |  |  | 49,835,837 | 1,085,638 | 329,895 | 1,218 | 14,179,889 | 65,432,477
Balance at 1 January 2024 |  |  | 49,835,837 | 1,085,638 | 329,895 | 1,218 | 14,179,889 | 65,432,477
Comprehensive income |  |  |  |  |  |  |  |
- Profit for the year |  |  | - | - | - | - | 2,482,018 | 2,482,018
Other comprehensive income |  |  |  |  |  |  |  |
Items that will be reclassified subsequently to profit or loss |  |  |  |  |  |  |  |
- Revaluation of financial assets at FVOCI |  |  | - | - | (8,818) | - | (8,818) | -
Transactions with owners in their capacity as owners |  |  |  |  |  |  |  |
- Dividends declared during the period (Note | 19 | ) | - | - | - | - | (200,000) | (200,000)
Transfer from revaluation reserve to retained earnings, |  |  |  |  |  |  |  |
net of deferred tax |  |  | - | - | (22,750) | - | 35,001 | 12,251
Balance at 31 December 2024 |  | 67,717,928 | 49,835,837 | 1,085,638 | 298,327 |  | 1,218 | 16,496,908

The notes on pages 26 to 50 are an integral part of these consolidated financial statements.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
25
STATEMENT OF CASH FLOWS
for the year ended 31 December

|  | 2024 |  | 2023
| Notes |  | € | €
Cash flows from operating activities |  |  |  |
Profit before tax |  | 2,945,816 |  | 2,021,041
Depreciation and amortisation | 5 | 466,397 |  | 312,661
Amortisation of bond issuance costs |  | 6,008 |  | -
Receivable written off | 5 |  | - | 20,358
Investment income | 4 | (2,558,543) |  | (2,042,475)
Interest income | 7 | (17,677) |  | (10,067)
Interest expense | 8 | 327,210 |  | 230,736
Cash flows generated before working capital changes |  | 1,169,211 |  | 532,254
Increase in inventories |  | (611) |  | (375)
(I ncrease)/decrease in trade and other receivables |  | (270,339) |  | 190,985
Increase/(decrease) in trade and other payables |  | 686,540 |  | (216,103)
Withholding taxes paid |  | (650) |  | -
Net cash flows generated from operating activities |  | 1,584,151 |  | 506,761
Cash flows from investing activities |  |  |  |
Purchase of intangible assets | 10 |  | - | (25,000)
Purchase of property, plant and equipment | 11 | (9,002) |  | (22,650)
Proceeds from sale of investment property |  |  | - | 467,100
Acquisition of investment properties |  | (2,332,376) |  | (965,597)
Purchase of financial assets at FVOCI | 14 | (9,113,992) |  | -
Net cash flows used in investing activities | (11,455,370) |  |  | (546,147)
Cash flows from financing activities |  |  |  |
Net proceeds from issuance of share capital |  |  | - | 295,500
Proceeds from bond issuance |  | 9,640,997 |  | -
Interest paid on borrowings |  | (412,855) |  | (514,481)
Dividends paid | 19 | (199,845) |  | (180,000)
Movement in borrowings | 20 | 1,165,986 |  | 55,374
Principal lease payments | 21 | (94,823) |  | (13,000)
Interest paid on leases | 21 | (74,176) |  | (19,489)
Net cash flows generated from/(used in) financing activities | 10,025,284 |  |  | (376,096)
Net increase/(decrease) in cash and cash equivalents |  | 154,065 |  | (415,482)
Cash and cash equivalents at the beginning of the y | ear | 931,866 |  | 1,347,348
| 18 |  |  | 931,866
Cash and cash equivalents at end of year |  | 1,085,931 |  |

The notes on pages 26 to 50 are an integral part of these consolidated financial statements.
Significant non-cash transactions
During the year ended 31 December 2024, there were additions to right-of-use assets and lease liabilities
amounting to €1,403,417.
During the year ended 31 December 2023, the Group did not have any significant non-cash transactions.
VBL Plc
Annual Financial Report and Financial Statements - 31 December 2024
26
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. MATERIAL ACCOUNT ING POLICY INFORMATION
The accounting policies that are material to the financial statements are set out below. The accounting
policies set out below have been applied consistently to all periods presented in these financial statements.
Basis of preparation
These consolidated financial statements are prepared under the historical cost convention, except for
revaluation of investment properties that are measured at fair value at end of each reporting period. These
consolidated financial statements are prepared in accordance with the provisions of the Maltese Companies
Act (Cap. 386) and with the requirements of International Financial Reporting Standards (“IFRS Accounting
Standards”) as ad opted by the European Union (‘EU’).
The preparation of consolidated financial statements requires the use of certain critical accounting
estimates. It also requires management to exercise its judgment in the process of applying the Group’s
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the consolidated financial statements are disclosed in
Note 2 to these cons olidated financial st atements.
Functional and presentation currency
The consolidated financial statements are presented in Euro (€) which is the Group’s functional and
presentation currency.
New or amended standards, interpretations and amendments adopted
The Group adopted all new or amended accounting standards and interpretations issued by the
International Accounting Standards Board (‘IASB’) and the IFRS Interpretations Committee and endorsed
by the EU that are mandatory for the current reporting period. The adoption of these amendments to the
requirements of IFRS Accounting Standards as adopted by the EU did not result in substantial changes to
the Group’s accou nting policies impacti ng the G roup’s financia l performance and position.
New or amended standards, interpretations and amendments issued but not yet effective
At the end of the reporting period, certain new standards, interpretations or amendments thereto, were in
issue and endorsed by the EU, but not yet effective for the current financial period. There have been no
instances of early adoption of standards, interpretations or amendments ahead of their effective date. The
directors anticipate that the adoption of the new standards, interpretations or amendments thereto, will not
have a material imp act on the financ ial statements upo n initial application.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
27
1. MATERIAL ACCOUNT ING POLICY INFORMATION - continued
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and all its active
subsidiaries that it controls. Subsidiaries are companies in which the Company, directly or indirectly, has
an interest of more than one half of the voting rights or otherwise has the power to exercise control over
the operations, is exposed, or has rights, to variable returns from its involvement with the investee, and has
the ability to use its power to affect its returns.
These consolidated financial statements comprise the Company and its wholly-owned active subsidiary,
VREM Limited. Silver Horse Block Limited is an inactive project company, not consolidated and has no
material impact on the consolidated financial statements.
The financial statements of the subsidiaries are prepared for the same reporting year as the Company,
using uniform accounting policies for like transactions and other events in similar circumstances. When
necessary, adjustments are made to the financial statements of the subsidiaries to bring their accounting
policies in line with the Group’s accounting policies. All material intragroup assets and liabilities, equity,
income, expenses, and cash flows relating to transactions between members of the Group are eliminated
in full on consolidation.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable for the value of goods
sold and services provided, net of sales rebates and taxes in the normal course of business, net of value
added tax and discounts where applicable. Revenue from contracts with customers – paid as service fee
income, revenues from construction or other similar services – is assessed by the nature of the specific
contribution and evaluated based on the underlying business and accounting factors and recognised under
the principles of IFRS 15.
Revenue is recognised to the extent that it is probable that future economic benefits will flow to the Group
and these can be measured reliably. The following specific recognition criteria must also be met before
revenue is recognised:
Sale of investment property
Sale of investment property is recognised when the significant risks and rewards of ownership of the
property being sold are effectively transferred to the buyer. This is generally considered to occur at the later
of the contract of sale and the date when all the Group's obligations relating to the property are completed
and the possession of the property can be transferred in the manner stipulated by the contract of sale.
Rental income
Rental income from investment properties is recognised in profit or loss on a straight-line basis over the
term of the lease.
Service fee income
Revenue from a contract to provide services is recognised over time as the services are rendered based
on the amount that depicts the progress towar ds complete satisfact ion of the perfor mance obligation.
Tax
Income tax on profit or loss for the year comprises current and deferred tax. Income tax is recognised in
profit or loss, except to the extent that it relates to items recognised directly to equity, in which case it is
recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantially enacted at the end of the reporting period, and any adjustment to tax payable in respect of
previous year s.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
28
1. MATERIAL ACCOUNT ING POLICY INFORMATION - continued
Tax - continued
Deferred tax is provided using the liability method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. The following temporary differences are not provided for: goodwill not deductible for tax
purposes, the initial recognition of assets and liabilities that affect neither accounting nor taxable profits,
and differences relating to investments in subsidiaries to the extent that they will probably not reverse in
the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation
or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially
enacted at the end of the reporting period.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be
available against which the unused tax losses and credits can be utilised. Deferred tax assets are reduced
to the extent that it is no longer prob able that the relat ed tax benefit will b e realised.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses to
date. Cost includes expenditure directly attributable to the acquisition of the items as well as transfers from
equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant
and equipment.
Depreciation is provided on all items of property, plant and equipment, except freehold land and assets
under construction, at rates calculated to write off the cost less residual value of each asset over its
expected useful life, as fo llows:
Building improvements
2% Straight Line
Office equipment
20% Straight Line
Furniture and fixtures
20% Straight Line
Other assets
20% Straight Line
Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying
amount and are taken into account in determining operating profit. The residual values and useful lives of
the assets are reviewed and adjusted as appropriate, at each end of the reporting period. The carrying
amount of an asset is written down immediately to its recoverable amount.
Subsequent costs are included in the carrying amount of the asset or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to
the income stateme nt during the financial peri od in which they are incurred.
Investment properties
Investment properties are properties held to earn rentals or for capital appreciation or both. Investment
properties are recognised as an asset when it is probable that the future economic benefits that are
associated with the investment properties will flow to the entity and the cost can be measured reliably.
Investment properties are measured initially at cost, including related transaction costs. After initial
recognition, investment properties are carried at fair value at the date of the valuation, less any subsequent
accumulated depreciation (Note 12). Gains and losses arising from changes in fair values are recorded in
profit or loss.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
29
1. MATERIAL ACCOUNT ING POLICY INFORMATION - continued
Investment properti es - continued
The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties
in an arm’s length transaction. The estimation of fair values does not assume that either the underlying
assets are marketed for sale at the reporting date or that there is an intention to sell it in the near future.
The objective is to estimate the exchange price at which hypothetical market participants would agree to
transact.
The fair value of investment properties is largely based on estimates using property appraisal techniques
as outlined in Note 12 to these consolidated financial statements. Such estimates are inherently subjective
and actual values can only be determined in a sales transaction.
Investment properties are derecognised on disposal or when it is permanently withdrawn from use and no
future economic benefits are expected from its disposal proceeds, if any, and the carrying amount and are
recognised in profit or loss in the period of derecognition.
Depreciation commences when the depreciable assets are available for use and is charged to profit or loss
so as to write off the fair valued amount, less any estimated residual value, over their estimated useful lives,
on the following basis:
Improvements
2% Straight Line
Furniture, fixtures and fittings
20% Straight Line
If an investment properties become owner occupied, it is reclassified as property, plant and equipment and
its cost or fair value at the reclassification date becomes its cost for accounting purposes. Property that is
being constructed or developed for future use as investment properties are classified as property, plant and
equipment and stated at cost until development is complete. Thereafter it is classified and accounted for
as an investment properties.
If an item of property, plant and equipment becomes an investment properties because its use has changed,
any difference resulting between the carrying amount and the fair value of this item at the date of transfer
is recognised in equity as a revaluation of property, plant and equipment under International Accounting
Standards (‘IAS’) 16. However, if a fair value gain reverses a previous impairment loss, the gain is
recognised in the profit or loss.
Intangible assets
Trademark and licences
Trademarks and licences are valued at cost. Trademarks and licences have a definite useful life and are
carried at cost less accumulated amortisation. Amortisation is calculated to write off the cost in equal annual
instalments over their estimated useful life of 10 years.
Non-compete rights
The non-compete rights are valued at cost and are amortised over a period of 5 years.
Brand
The value of brand name is recognised following acquisition. Brand name acquired over the past period
(together with other assets, in complex transaction), has been valued to assess the actual incremental
value it provides to the Group’s operations and its value has been based on estimated income. The brand
name is being amort ised over 5 years.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
30
1. MATERIAL ACCOUNT ING POLICY INFORMATION - continued
Investment in subsidiaries
Subsidiaries are all those entities over which the Group has control, i.e., when the Group is exposed to, or
has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity.
Investment in subsidiaries is initially recognised at cost, being the fair value of the consideration given,
including acquisition costs and are subsequently carried at cost less accumulated impairment losses, if any.
Dividend income is rec ognised when the Grou p’s right to rec eive payment is estab lished.
Financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the instrument. Financial assets and financial liabilities are initially recognised at their fair
value plus directly attributable transaction costs for all financial assets or financial liabilities not classified at
fair value through profit or loss.
Financial assets and financial liabilities are offset, and the net amount presented in the statement of
financial position when the Group has a legally enforceable right to set off the recognised amounts and
intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Financial assets are derecognised when the contractual rights to the cash flows from the financial assets
expire or when the entity transfers the financial asset and the transfer qualifies for derecognition.
Financial liabilities are derecognised when they are extinguished. This occurs when the obligation specified
in the contract is discharged, cancelled or expires.
An equity instrument is any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue
costs.
Debt instruments are recognis ed as Fair Value through Other Comprehensive Income (“FVOCI”) depending
on the Group's business model and aligns with the guidance of IFRS 9, specifically paragraph 4.1.2A. The
financial assets are classified as FVOCI if the Group’s business model is to hold the financial assets both
to collect contractual cash flows and the financial assets pass the SPPI test (cash flows of the bond
represent only principal repayment and interest on the principal amount outstanding.
Changes in the fair value are recorded in Other Comprehensive Income. Upon derecognition, the
cumulative fair value change in other comprehensive income is recognised in profit or loss.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) on financial assets that are measured
at amortised cost. Equity instruments are not subject to impairment assessment.
ECLs are based on the difference between the contractual cash flows due in accordance with the contract
and all the cash flows that the Group expects to receive, discounted at an approximation of the original
effective interest rat e.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
31
1. MATERIAL ACCOUNT ING POLICY INFORMATION - continued
Financial instruments - continued
Impairment of financial assets - continued
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase
in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that
are possible within the next 12-months (12-month ECL). For those credit exposures for which there has
been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses
expected over the remaining life of the exposure, irrespective of the timing of the default (lifetime ECL).
For trade receivables, the Group applies a simplified approach to measuring ECLs which recognises lifetime
ECLs. The ECLs on these financial assets are estimated using a provision matrix based on the Group’s
historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the
economic environment.
Segment reporting
The Board of Directors determines the operating segments in accordance with the requirements of IFRS 8
‘Operating Segments’.
An operating segment is a component that engages in business activities from which it may earn revenues
and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s
other components, and for which discrete financial information is available. An operating segment’s
operating results are reviewed regularly by the Board of Di rectors. The Board of Directors considers the
Company to be mad e up of one oper ating segment.
Leases
IFRS 16 requires an entity to assess whether a contract is, or contains, a lease at the inception date. A
contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for
a period of time in exchange for a consideration. Leases are recognised as a right-of-use asset and a
corresponding liability at the commencement date, being the date at which the leased asset is available for
use by the Group.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured
at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease
payments made at or before the commencement date net of any lease incentives received, any initial direct
costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be
incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Subsequent to initial recognition, right-of-use asset is measured under the revaluation model. The revalued
amount is based on periodic valuations by external independent valuers, less subsequent depreciation and
impairment, if any. The valuations are undertaken if there is a material change in the revalued amount
relative to the carrying amount. Any accumulated depreciation at the date of revaluation is eliminated
against the gross carrying amount of the asset and the net amount is restated to the revalued amount of
the asset. Increases in the carrying amounts arising on revaluation of land and buildings are credited in
other comprehensive income through to the revaluation surplus reserve in equity. Any revaluation
decrements are initially taken in other comprehensive income through to the revaluation surplus reserve to
the extent of any previous revaluation surplus of the same asset. Thereafter, the decrements are taken to
profit or loss.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
32
1. MATERIAL ACCOUNTING POLICY INFORMATION - continued
Leases - continued
Right-of-use assets - continued
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership
of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of
use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets
are expensed to profit or loss as incurred.
Lease liability
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised
at the present value of the lease payments to be made over the term of the lease, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, the entity's incremental
borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable
lease payments that depend on an index or a rate, amounts expected to be paid under residual value
guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to
occur, and any anticipated termination penalties. The variable lease payments that do not depend on an
index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts
are remeasured if there is a change in the following: future lease payments arising from a change in an
index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination
penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use
asset, or to profit or loss if the carrying amount of the r ight-of-use ass et is fully written down.
2. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
In the application of the Group’s accounting policies, which are described in Note 1 to these consolidated
financial statements, the management is required to make judgments, estimates and assumptions that
affect the reported amounts of assets and liabilities that are not readily apparent from other sources. The
estimates and assumptions are based on historical and other factors, including expectations of future
events that are believed to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects both current
and future periods.
In the opinion of the Directors, with the exception of the fair valuation of investment properties (Note 12),
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 IA S 1.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
33
3. REVENUE

|  | 2 02 | 4 | 2023
|  |  | € | €
Rental income |  | 3,485,950 |  | 2,992,992
Service fee incom e |  | 297,297 |  | -
Management f | ees | 72,6 | 77 | 89,974
Other revenue |  | 209,443 |  | 162,713
|  | 4,065,367 |  | 3,245,679

4. INVESTMENT INCO ME

| 2024 | 2023
| € | €
Increase in fair value o f investment propert ies | 2,558,543 | 1,965,338
Realised gain on sa le of investment prop erty | - | 77,137
| 2,558,543 | 2,042,475

The €2,558,543 (2023: €1,965,338) relates to an increase in fair value of investment properties resulting
from concluded acquisitions, ongoing development activity and applicable adjustments, which are
considering property specific conditions, na mely development proj ect status or operatio nal conditions.
5. EXPENSES BY NAT URE

|  |  | 2024 | 2023
|  |  | € | €
Direct costs | 1,702,351 |  |  | 1,696,305
Employee benefit exp ense (i) | 555,918 |  |  | 566,414
Directors’ fees | 76,049 |  |  | 64,883
Audit | or | ’ | s remunerat ion: |
Audit fee | 18, | 50 | 0 | 18,500
Other non-assuranc e services |  | 950 |  | 950
Depreciation and amort isation | 466,397 |  |  | 312,661
Other administrative exp enses | 570,069 |  |  | 394,776
Receivable written off |  |  | - | 20,358
| 3,390,234 |  |  | 3,074,847

(i) Employee benefit exp ense includes the following:

| 202 4 | 2023
| € | €
Salaries and wages | 631,480 | 502,344
Social security and maternity fund contributions | 37,597 | 28,990
Outsourced personnel | - | 144,004
Capitalised salaries | (113,159) | (108,924)
| 555,918 | 566,414
Average number of employees | 24 | 17

During the year 2024, staff salaries of €113,159 have been capitalised to investment properties
(2023: €108,924).
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
34
6. OTHER OPERATING INCOME

2 02 | 4 | 202 | 3
| € |  | €
Miscellaneous income | 21,673 | 28,403 |

7. INTEREST INCOM E

| 2024 | 2023
| € | €
Loan interest | 13,901 | 10,067
Bank interest | 3,776 | -
| 17,677 | 10,067

8. FINANCE COST S

| 2024 |  | 2023
|  | € | €
Interest on bank l oan | 163,248 |  | 207,609
Interest on bonds | 89,786 |  | -
Interest on lease liab ilities | 74,1 | 76 | 19,489
Other finance costs |  | - | 3,638
| 327,210 |  | 230,736

9. INCOME TAX EXPENSE
Tax is provided for at the rate of 35% for Group profits, except for certain bank interest receivable which is
taxed at 15% and sal e of property which is taxed at 5%.

| 2024 | 2023
| € | €
Current year tax |  |
Income tax on the taxa ble income for th e year | 7,472 | 18,197
Final withholding tax | 650 | -
Deferred tax |  |
Movement in deferre d tax asset (Note 1 6) | (231,812) | 83,337
Movement in deferre d tax liability (Note 2 2) | 675,237 | 208,185
Movement in revalu ation reserve | 12,251 | 12,251
| 463,798 | 321,970

VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
35
9. INCOME TAX EXPENSE - continued
Tax applying the statutory domestic income tax rate and the income tax expense for the year are reconciled
as follows:

| 2 024 | 2023
| € | €
Profit on ordinary activ ities before tax | 2,945,816 | 2,021,041
Theoretical tax expens e at 35% | 1,031,036 | 707,364
Tax effect of: |  |
Expenses disallowab le for tax purposes | 3 28,252 | 302,474
Movement in the effect of fair value gain o n investment propert ies | (895,490) | (687,868)
| 463,798 | 321,970

10. INTANGIBLE ASSETS

| Non-compete |  |  |
| Licences | rights | Brand | Total
| € | € | € | €
Cost |  |  |  |
At 1 January 2024 | 349 | 150,000 | 66,000 | 216,349
Additions | - | - | - | -
At 31 December 202 4 | 349 | 150,000 | 66,000 | 216,349
Provision for diminution value |  |  |  |
At 1 January 2024 | 340 | 90,000 | 29,600 | 119,940
Amortisation for the y ear | 8 | 30,000 | 13,200 | 43,208
At 31 December 202 4 | 348 | 120,000 | 42,800 | 163,148
Net book value |  |  |  |
At 31 December 202 3 | 9 | 60,000 | 36,400 | 96,409
At 31 December 202 4 | 1 | 30,000 | 23,200 | 53,201

11. PROPERTY, PLANT AND EQUIPMENT

|  | Building |  | Furniture |  |  |  |  |
| Right- | of | - | improve- | Office | and | Other |  |
| use assets | ments | equipment |  | fixtures | assets | Total |  |
| € | € |  | € | € | € |  |  | €
Cost |  |  |  |  |  |  |  |  |
At 1 January 20 | 24 | 1,035,369 | 100,806 | 41,566 | 43,104 | 252,531 | 1,473,376 |  |
Additions | - | - | 2,39 | 6 | - | 6,606 | 9,00 |  | 2
At 31 December 20 | 24 | 1,035,369 | 100,806 | 43,962 | 43,104 | 259,137 | 1,482,378 |  |
Depreciation |  |  |  |  |  |  |  |  |
At 1 January 20 | 24 | 368,128 | 22,854 | 37,463 | 26,825 | 218,071 | 673,341 |  |
Charge for the year | 46,019 | 2,017 | 5,85 | 1 | 1,256 | 18,332 | 73, | 47 | 5
At 31 December 202 4 | 414,147 | 24,871 | 43,314 |  | 28,081 | 236,403 | 746,816 |  |
Net book value |  |  |  |  |  |  |  |  |
At 31 December 20 | 23 | 667,241 | 77,952 | 4,103 | 16,279 | 34,460 | 800,035 |  |
At 31 December 2 0 | 24 | 621,222 | 75,935 | 648 | 15,023 | 22,734 | 735,562 |  |

VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
36
12. INVESTMENT PROP ERTIES

Investment | Right- | of | -u se
| assets | properties | Total
| € | € | €
Fair value |  |  |
At 1 January 2024 | 1,047,377 | 77,345,771 | 78,393,148
Additions | 1,414,182 | 2,600,395 | 4,014,577
Fair value movement | 364,020 | 2,194,523 | 2,558,543
At 31 December 202 4 | 2,825,579 | 82,140,689 | 84,966,268
Provision |  |  |
At 1 January 2024 | 112,377 | 1,152,808 | 1,265,185
Depreciation | 151,332 | 198,382 | 349,714
At 31 December 202 4 | 263,709 | 1,351,190 | 1,614,899
Net book value |  |  |
At 31 December 202 3 | 935,000 | 76,192,963 | 77,127,963
At 31 December 202 4 | 2,561,870 | 80,789,499 | 83,351,369

Depreciation relates to the depreciation of improvements and furniture currently included in Investment
Properties. The depreciable amount is allocated on a systematic basis to each accounting period over its
useful life.
Lessor commitments

20 | 24 | 202 | 3
| € |  | €
Minimum lease comm itments receivable but n ot recognised in the |  |  |
financial statements: |  |  |
1 year or less | 490,997 | 372,545 |
Between 1 and 2 years | 502,311 | 384,607 |
Between 2 and 3 years | 432,792 | 384,752 |
Between 3 and 4 years | 421,655 | 390,053 |
Between 4 and 5 years | 305,686 | 331,575 |
Over 5 years | 803,559 | 763,847 |
2,957,000 |  | 2,627,379 |

Fair value of investment properties
The book value of the property held by the Group has been increased by €2,558,543 (2023: €1,965,338)
to reflect the established fair value as at 31 December 2024, reflecting several different factors and
adjustments to the individual property values, including the downward adjustment to certain property
categories resulting from the market changes and developments of the past two years, and reflecting
improvements and additions to the portfolio during the year, resulting from the acquisition and development
activity of the Group.
It is important to note that the Group has not recognised any value over the costs incurred for its contracts
and promises of sale of property which have not yet been fully acquired, but binding contracts are existing,
and is conservatively left out of the book value of the Group.
The Group considers that the current macroeconomic conditions (e.g. high interest rates, yields and
vacancy expectations) are properly re flected in its fair value measureme nts.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
37
12. INVESTMENT PROPERTIES - continued
Valuation process
As is usually done by the Group, on an annual basis, during the reporting year it has carried out a full
property valuation exercise, performed by an independent professional valuer to assess the market value
of its assets, whether these are owned or leased. The report was prepared by Edwin Mintoff Architects
(EMA) in their capacity of a warranted architect and civil engineers, as independent asset valuers. This full
valuation report was prepared on a market value basis, based on the principles defined by the Royal
Institute of Chartered Surveyors (‘RICS’) Standards and applicable adjustments, which are made for
property specific conditions, namely development project status or operational conditions and completed in
January 2025, as part of the annual asset valuation exercise.
On this basis, the Board of Directors has made its own assessment which has considered the overall
valuation values of the independent report but was also assessing the various specific developments and
adjusted for property-specific status of the ongoing development projects, as well as the investment value
potential for the Group’s asset portfolio. The assessment of the fair market value of the Group’s asset
portfolio performed by the Board of Directors as at the end of the reporting period is considered conservative
and is based on careful assessment of the available independent valuation report, market information and
consideration of the actual market conditions and forecasts.
Valuation techniques
It should be noted that the actual price (liquidation value) which the Group might obtain, if forced to sell all
properties in the short term, might be lower than the estimated figures accepted as fair market value of the
specific assets, as this is usual in similar cases. In addition, there are several risks and discount factors
associated specifically with the nature and operation of the Group’s strategy and its line of business, which
were taken into account in establishing the fair market value of the properties and related assets reflected
in the Directors assessment, namely:
- Ability to match the forecasted schedule and development budgets;
- Securing the necessary finance for all development related expenses (beyond the currently available
funds) for all the projects within a short time frame might prove difficult;
- Securing the necessary development and operational permits within a relatively short time frame for
all the planned development projects might not materialize in time, resulting in delays or undue strain
on resources and finance and overall increased development costs and delayed proceeds from
operation;
- Finding prospective buyers or partners or operators for some or all the projects within a short time
frame might not be possible at the forecasted terms and conditions;
- The development and execution risks required to make some of these properties operational
(particularly the Silver Horse Block Phase 2 project) are considered high; and
- The impact of changing general market conditions and regulatory risks associated with the operation
of finished and managed properties is a risk itself.
For investment properties categorised under Level 3 of the fair value hierarchy, the valuation is based on
a comparative valuation methodology, and in certain cases, discounted cash flow valuation methodology,
as detailed below. The annual Directors’ valuation is based on the independent valuer’s estimated market
values, and where applicable specific (usually reflecting discounts) adjustments are applied reflecting
specific property/development characteristics.
For the residential and commercial properties under comparative approach, this is a relative valuation
method in which one compares the current value of a property to another with similar characteristics. This
method involves comparing the subject property with similar properties that have been recently sold and
those that are currently being offered for sale in the vicinity of other comparable localities. The
characteristics, merits and demerits of these properties are considered, and appropriate adjustments
thereof are then made to arrive at the value of the subject property. The higher the comparable market
rates, the higher the fair value of the prop erty.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
38
12. INVESTMENT PROPERTIES - continued
Valuation techniques - continued
The fair value of the Silver Horse Block Phase 2, a property currently in advanced stage of development,
is determined based on project value, using various approaches, including a discounted cashflow method.
The discounted cashflow method is based on assumptions, which consider the specific terms of the signed
conditional lease agreement, assessment of the estimated development costs and discounts the projected
revenue streams to a present value using a typical market discount rate. The applied discount rate in this
case is 6%, reflecting current market conditions and parameters. The higher the discount rate, the lower
the fair value.
Directors’ assessment
As of the end of year 2024, the Directors’ Valuation Report of the Group represents conservatively updated
values for each of the assets of the Group, but adjusted for the specific status and conditions of the
developments, related to some properties which are under renovation/development or are in preparation
stage expecting future renovation. In such cases, the valuation typically reflects discounts for risks and
specific factors. Values of such projects are reviewed annually and adjustments are reflected to consider
changes in legal status (tenants’ contracts), development status and other project specific factors. In such
cases, typically, previously applied discounts are partially or fully released in line with the applicable
valuation principles and professional recommendations. Applied valuation principles and practices are in
line with the relevant recommendations of the Kamara tal-Periti (KtP) and usually applied, standard
international industry practices.
Nevertheless, based on independent experts’ opinions and other available information, the Directors remain
of the opinion that the Valletta property market is significantly less vulnerable to the short-term volatility
than other property markets in Malta and there is no material adverse change experienced in market values
as of the date of this report.
Given the above, as of 31 December 2024, the Directors approved a total value of the properties of the
Group amounting to €8 3,351,369 (2023: €77,127,963). It is to be noted that the Directors established their
valuation report considering the recommendations of the independent, third-party valuer’s report for
adjustments of the fair market value in specific assets of the Group’s owned properties, as a result of the
market changes and current conditions experienced in the Valletta property market. Projects under
development or projects completed but not yet operational at the time of the valuation were reflected based
on the actual estimated project value, at the time, with values of fully developed assets to be realised at full
completion.
The Directors have also confirmed that the long-term operational expectations remain materially unchanged
in terms of projected long-term achievable revenues and operational profitability from operation of the fully
developed assets of the Group.
The Group applies IFRS 16 which permits the recognition of leased properties in the statement of financial
position. Also, the Group considers managed properties at the same approach as leased, based on the
long-term contracts with owners and de facto control of these properties, where this is relevant and/or
applicable.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
39
13. INVESTMENT IN SUBSI DI ARY

Subsidiary | Registered addres s | Class of shares | % of ownership |
|  |  | 2024 | 2023
Silver Horse Block Ltd | 54, Marsamxett Roa d Valletta VLT 1853 Malta | Ordinary Shares | 100 | 100

Silver Horse Block Ltd is at present a SPV designated for future use, related to the Company’s operations
or development projects, currently holding no material assets, not carrying any activity and therefore being
inactive. The Group recognises the investment in Silver Horse Block Ltd at its cost of €1,200 (immaterial
subsidiary for the group and hence, not consolidated).
The following table summarises the financial information of the Group’s subsidiar y as at and for the year
ended 31 December 2024.

| Capital and |  |  |  | Profit
| reserves |  |  | € | €
Subsidiary Silver Horse Block Ltd | r 1, es | 2 | 00 r | e | -

14. FINANCIAL ASSET S AT FAIR VAL UE THROUGH O THER COMPR EHENSIVE INCO ME (“FVOCI”)

|  | 2024 | 2023
Quoted debt instrument s |  | € | €
Additions during th e year Movement in fair va lue | 9,113,992 | (8,818) | - -
Balance as at 31 Dec ember | 9,105,174 |  | -

| 2024 | 2023
| € | €
Non-current | 3,898,107 | -
Current | 5,207,067 |
| 9,105,174 | -

-
7,8 4 2,1 1 8
The Company’s financial assets are quoted debt instruments. The fair value movement of the financial
assets amounting to €8,818 is recognised in other comprehensive income and reflected as fair value
reserve.
15. LOAN RECEIVABLE

3 | 2024 | 202
| € | €
Loan to third-party (i) | 126,228 | 119,961

(i) The loan receivable bears 6% interest rate per annum. The loan was not repaid during the year,
because the parties have agreed and subsequently entered into an agreement, which will provide a
repayment of the full loan amount to the Group through cooperation in utilisation of the commercial
premises of the debtor. The details of the commercial cooperation are to be finalised based on the
existing agreement, and the rent due is to be set off as collections on account of the loan and related
receivables.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
40
16. DEFERRED TAX ASSETS
The asset for deferred t ax is analysed as fo llows:

2 0 | 24 | 202 | 3
| € |  | €
Excess of capital allow ances over depreciati on | (1 84,459) | (82,340) |
Unabsorbed tax losses and capital allowa nces | - | 124,077 |
Lease liabilities | 558,385 | 100,377 |
373,926 |  | 142,114 |

Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to set off the
recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
Provision was made for deferred tax for all temporary differences, except of fair value adjustment for
investment properties, on the basis of the liability method using a principal tax rate of 35%. The deferred
tax asset movement is made up of:

|  |  | 2024 | 2023
|  |  | € | €
Balance at beginning of t he year |  |  | 142,114 | 225,451
Movement in the ex cess of capital allowances over depreciation |  |  | (102,119) | (10,031)
Movement in unabs orbed tax losses an d capital allow ances |  |  | (124,077) | (173,683)
Movement | in | lease liabilities | 458,008 | 100,377
Balance at end of year |  |  | 373,926 | 142,114

17. TRADE AND OTHER RECEIVABLES

| 2024 | 2023
| € | €
Trade receivables (i) | 238,668 | 214,364
VAT refundable | 158,149 | -
Prepayments and acc rued income | 99,585 | 52,970
Accrued interest | 27,136 | -
Advances to employees | 15,815 | -
Other receivables | 39,819 | 33,492
| 579,172 | 300,826
Provision for expecte d credit losses | (39,055) | (39,055)
| 540,117 | 261,771

(i) Trade receivables are non-interest bearing and are generally on a 30-day term.
The Group’s exposure to credit risk and impairment losses relating to trade and other receivables is
disclosed in Note 2 6.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
41
18. CASH AND CASH EQUIVALENTS
Cash and cash equivalents included in the statement of cash flows comprise the following statement of
financial position amounts:

| 2 0 24 | 2023
| € | €
Cash at banks | 1,08 4,951 | 931,866
Cash in hand | 980 | -
| 1,085,931 | 931,866

The Group invested its temporary available free cash reserves in quoted debt instruments and are treated
as financial assets at FVOCI in accordance with IFRS 9 and in line with the Group’s declared policy for
utilisation and investme nt of liquidity reserv es, as disclosed in Not e 14.
19. SHARE CAPITAL AND RESERVES

|  | 2024 | 2023
|  | € | €
Share Capital |  |  |
Authorised: |  |  |
330,000,000 Ordinary shares of €0.20 each |  | 66,000,000 | 66,000,000
Issued and fully paid: |  |  |
249,179,183 Ordinary | shares of €0.20 each | 49,835,837 | 49,835,837

The issued share capital of the Group currently consists of 249,179,183 ordinary shares of €0.20 each. The
authorised share capital currently consists of 330,000,000 ordinary shares of €0.20 each.
As at 31 December 2024, the market price of the ordinary shares on the Malta Stock Exchange (“MSE”)
was €0.19 each (based on the last trading of shares prior to the end of the year). The trading volume of
the Group’s shares on MSE is very low compared to the total value of outstanding shares, the free float
and the total asset value, and therefore it is considered non-representative as an indication of fair market
value of the Group.
The Ordinary shares of the Group participate equally in any payment of dividends or any distribution and
return of capital and carry identical rights and voting rights, as specified in the Memorandum and Articles
of Association the Group.
The following describes the nature and purpose of each reserve within equity:

Share premium | The amount subscr ibed for share capital in exc ess of par value.
General reserve | The amount of the iss ued s hare capital r eduction after the res tructuring of
| the Group co mpleted in 2019, retained i n the Group, not distributed to the
| shareholders.
Other reserves | Non-distributable reserves for fair value revaluation on the office building
| and financial assets at FVO CI
Retained earnings | All other net earni ngs or profit after ac counting for dividends.

During the year ended 31 December 2024, dividends amounting to €200,000 (0.0803 Euro Cents per
ordinary share) (202 3: €180,000) were declared.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
42
20. BORROWINGS

| 2024 | 2023
| € | €
Non-current |  |
Bank borrowings (i) | 8,898,957 | 7,842,118 7,8 4 2,1 1 8
Bonds payable (ii) | 9,647,005 | -
| 18,545,962 | 7,842,118
Current |  |
Bank borrowings (i) | 590,709 | 428,513

(i) The Company obtained a bank loan under the MDB-guarantee scheme provided to support businesses
following the Covid-19 outbreak, which had in the previous periods a subsidised interest rate, in
compliance with the MDB loan programme and relevant EU regulations. Currently, effective interest
rates are at market terms. The loan is being amortised as planned.
During 2022, the Company secured a long-term loan facility of €14,500,000, structured to reflect the
Company’s financing needs, and to secure the necessary long-term funding for its development and
acquisitions programme. This loan facility is repayable over a period of 15 years, and is structured into
specific, dedicated utilisation purposes. The facility is drawdown in relation with the executed
development and regeneration works. During 2023, the Group has also secured a short-term revolving
overdraft credit facility, which is currently unutilised. During the year 2024, the Company continued
utilising the facility, as per planned schedule, while significant portion of the development loan facility
remain unutilised.
The long-term development bank loan facility is covered under one overall agreement with the bank,
but structured to reflect the designated use of funds. Repayment terms, applicable interest and actual
repayment amounts are defined accordingly. Repayment amounts are based on a “scaletta repayment
schedule”, reflecting the Group’s development process, following a 2-year moratorium period and are
being repaid in monthly fixed instalments, inclusive of interest. Within the repayment period, the monthly
instalments will be gradually increased, and remain inclusive of interest, until the full final repayment.
The Group’s long-term debt repayment obligations and other relevant parameters are presented in
greater details in the Prospectus dated 4
th
October 2024. Further details on the loan repayment timing
and expected cash-flows are presented in Note 26.
The loan facilities are secured by a general hypothec over the Company’s assets, and special
hypothecs over the properties developed under the long-term development facility.
The applicable costs of the development banking facilities (e.g. processing fees, commitment fees,
legal and professional fees directly related to the facility), were partially recognised in the Statement of
Comprehensive Income during the year, in line with the applicable accounting standards, and partially
capitalised on Investment Properties, as considered capital expenditure related to development of the
Company’s properties. The amount of borrowing costs capitalised during the year ended 31 December
2024 was €280,976 (2023: €377,581). The carrying amounts of the bank borrowings are reasonable
approximations of their fair value.
The loan repayments during the year amounted to €1,454,671 (2023: €312,640). Total interest expense
on bank loans recognise d in the profit or loss are disclosed in Note 8 to these financ ial state ments.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
43
20. BORROWINGS - continued
(ii) On 1 November 2024, the Company successfully issued a €10,000,000, 5.2% secured bonds 2030-
2034 with a nominal exchange value of €100 per bond. The bonds were fully subscribed and will mature
on 25 October 2034 with interest payments due annually, every 25th of October until maturity. The
amount presented in the statement of financial position is net of unamortised bond issue costs
amounting to €352,995. Interest expense on bonds for the year are as disclosed in Note 8 to these
financial statements. Accrued interest payable as at 31 December 2024 is disclosed in Note 23 to these
financial statements. The fair value of the bonds for every €100 bo nd as at 31 December 2024 was
€102.
21. LEASE LIABILITIES
The Group leases properties which are utilised in the operations or operated as investment properties,
under agreements of between ten to twenty-five years, in some cases with options to extend. The lease
contracts have various esc alation claus es. O n renewal, the ter ms of the leases are rene gotiated.

| 2 024 | 2023
| € | €
Minimum lease paym ents |  |
Due after more than five y ears | 1,406,615 | 277,709
Due after one year but within five years | 716,617 | 128,038
Due within one year | 309,801 | 34,796
Total gross lease liabi lities | 2,433,033 | 440,543
Discounting | (837,648) | (153,752)
Present value of leas e liabilities | 1,595,385 | 286,791

Movements in lease liabilities during the year are as follows:

| 2024 | 2023
| € | €
At 1 January | 286,791 | 299,791
Additions | 1,403,417 | -
Interest expense | 74,176 | 19,489
Gross lease payments | (168,999) | (32,489)
At 31 December | 1,595,385 | 286,791

| 2024 | 2023
| € | €
Non-current portion | 1,361,732 | 270,639
Current portion | 233,653 | 16,152
At 31 December | 1,595,385 | 286,791

The following were the amounts recognised in profit or loss relating to leases:

20 | 24 | 202 | 3
| € |  | €
Depreciation | 197,351 | 56,724 |
Interest expense | 74,176 | 19,489 |
271,527 |  | 76,213 |

VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
44
22. DEFERRED TAX LIABILIT IES

|  |  | 2 024 | 2023
|  |  | € | €
Effect of fair value movem ent on investment propert ies |  |  | 4,776,423 | 4,290,677
Right- | of | -use assets | 272,672 | 83,181
|  |  | 5,049,095 | 4,373,858

Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to set off the
recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
Provision was made for deferred tax for all temporary differences on the basis of the liability method using
a principal tax rate at 35%/5%.

|  |  |  |  | 2024 | 2023
|  |  |  |  | € | €
Balance at beginning of t he year |  |  |  |  | 4,373,858 | 4,165,673
Movement of investme nt properti es fair value |  |  |  |  | 485,746 | 125,004
Movement | in | r ight- | of | -use assets | 189,491 | 83,181
Balance at end of year |  |  |  |  | 5,049,095 | 4,373,858

The Group is calculating its deferred tax liability on investment properties at 5%, being the rate applied if it
had to sell its properties within 5 years of acquisition.
23. TRADE AND OTHER PAYABLES

|  | 2024 | 2023
|  | € | €
Non-current |  |  |
Deposits on lease agre ements | 122,729 |  | 106,485
Current |  |  |
Trade payables (ii) | 159,922 |  | 255,087
Accruals and other pay ables | 1,470,4 | 13 | 691,678
Deposits on propert ies |  | 3,487 | 3,574
Bond interest payable | 83,778 |  | -
Dividend payable |  | 155 | -
Contract liabilities | 13,040 |  | 11,904
Amounts owed to shar eholder (iii) |  | - | 34,000
Amounts owed to t hird parties (i) |  | - | 16,385
| 1,730,795 |  | 1,012,628

(i) The amounts owed to third parties represent ed - among others - balances due arising from the
purchase of properties. The balance payable is reflected in the Group’s accounts.
(ii) Trade payables are non-interest bearing and are normally on 30 to 60 day term.
(iii) The amounts owed to shareholder were fees owed for executive management services based on
a service contract. These were unsecured, interest-free, and repayable on demand.
The Group’s exposure to liquidity risk relating to trade and other payables is disclosed in Note 26.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
45
24. RELATED PARTY TRANSACTIONS AND DISCLOSURES
The Group has related party relationships with some of its investors and companies over which the
Directors exercise significant influence. Transactions are carried out with related parties on a regular basis
and in the ordinary course of the business.
In the opinion of the Directors, there is no ultimate controlling party of the Group, since no shareholder of
VBL Plc has more than 25% of voting rights.
During the year ended 31 December 2024, transactions related to VBLM Limited are included in the related
party transactions as detailed below.
During the year, the Group entered into transacti ons with related part ies as set bel ow.

| 2 024 | 2023
| € | €
Capitalised property developmen t expenses - VBLM | 757,762 | 300,000
Management fees ex penses - VBLM | 252,587 | 100,000
Directors travel reimburs ement | 2,277 | 2,015
Rental revenue - Go ld Landlord | - | 5,098

The outstanding amounts arising from transactions with the related parties are disclosed in Note 23 to these
consolidated financ ial statements.
25. EARNINGS PER SHARE
Earnings per share is calculated by dividing the profit attributable to equity holders of the Group by the
weighted average number of ordinary shares in issue during the year.

|  | 2024 | 2023
Profit attributable to e quity holders of the Grou p | €2, 482,018 |  | €1,699,071
Weighted average nu mber of shares in issu e | 249,179,183 |  | 248,048,873
|  | 8 |
Basic and diluted e arnings per share |  | €0.0100 | €0.0068

The Group has no instruments or arrangements which give rise to potential ordinary shares and accordingly
diluted earnings per share is equivalent to basic earnings per share.
26. FINANCIAL RISK MANAGEMENT
The Group's activities potentially expose it to a variety of financial risks such as market risk (including equity
price change risk and interest rate risk), credit risk, and liquidity risk. The Group's overall risk management
program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects
on the Group 's financial performance. The Group did not make use of derivative financial instruments to
hedge certain risk exposure during the current and preceding financial periods.
The Group uses different methods to measure different types of risk to which it is exposed. These methods
include sensitivity analysis in the case of variable interest rate risks or applying fixed interest rates, and
ageing analysis for cred it risk.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
46
26. FINANCIAL RISK MANAG EMENT - continued
Risk management is carried out by senior finance executive (‘finance’) under policies approved by the
Directors. These policies include identification and analysis of the Group and appropriate procedures,
controls and risk limits.
Market risk
Market risk is the risk that changes in market prices (e.g. foreign exchange rates, interest rates and equity
prices) will affect the Group’s income or the value of its holdings of financial instruments.
The Group’s currency of operation is Euro, all revenues and payables are defined, contracted and
accounted in Euro.
The Group is exposed to changes in equity prices and interest rates.
Equity price change risk
The Group is exposed to changes in equity prices (“price risk") in respect of its listed shares, which is not
a Group-specific risk, but it is a risk of the equity investors and shareholders. Therefore, the price risk is a
relevant risk from the point of view of the Group’s shareholders (investors), holding the listed securities.
The price risk is significantly dependent on the local and global stock market’s specifics, the equity trading
trends, actual trading volumes and other specifics of the equity market at the Malta Stock Exchange (MSE),
and it is less dependent on the Group’s actual financial or market performance. It is to be noted that the
average trading volume of Group’s shares on the stock exchange is very low, both compared to the Group’s
total equity and property value. During the reporting year 2024, the Group’s revenues, overall financial
performance and asset values have improved significantly, while the share prices have decreased amidst
low trading volume compared to the Group’s actual book value. Therefore, the actual changes in equity
prices are considered not representative of the Group’s actual market or asset value.
The investments in listed equity securities are considered as long-term strategic investment and are
regulated and monitored by local authorities, including MFSA, and EU level regulation and authorities. The
Directors continuously monitor the stock prices of the Group and assess the impact of potential stock price
changes to the Group.
While the experienced trading volumes and cumulative trade in the Group’s shares during the year were
very low compared to the Group’s book value, the following table illustrates the theoretical sensitivity and
change of market capita lisation to a possi ble change in mark et price.

|  |  | Inc rease/ |
|  |  | (decrease) | Increase/
|  |  | in profit | (decrease)
|  | Change | for the year | in equity
|  | € | € | €
202 | 4 | (0.04) | - | (9,967,167)
202 | 3 | (0.04) | - | (9,967,167)

VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
47
26. FINANCIAL RISK MANAG EMENT - continued
Interest rate risk
The interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Group was exposed to changes in market interest rates
through a small portion of its bank borrowings which incurred variable interest rates during year 2024.
However, during the reporting year, the Company’s long-term borrowings have been serviced at fixed
interest rate, in line with the negotiated terms with the lenders. This has reduced the Group’s exposure to
short-term market volatilities and interest rate volatility, and has secured a stable and predictable
environment for the Group’s debt service obligations. Management considers the potential impact on profit
or loss of a defined interest rate shift that is reasonably possible at the end of the reporting period to be
immaterial.
Credit risk
Financial assets which potentially subject the Group to concentrations of credit risk consist principally of
cash at bank and receivables. The Group's cash is placed with quality financial institutions as well as it
limits the amount of credit exposure with any one financial institution, to the extent possible. The Group has
appropriate policies to ensure that sales of properties and provision of services are made to customers with
appropriate credit history, or where this is not possible or practical, alternative risk mitigating practices are
applied. In this respect, credit risk with respect to receivables is monitored continuously and the Group
places a specific provision on any debt on which there is doubt of recoverability. Bad debts are therefore
negligible, and, in this respect, the Group has no significant concentration of credit risk. The Group’s
calculated expected cr edit losses is immater ial.

2023 | 202 | 4
| € | €
Financial assets |  |
Financial assets at F VOCI | 9,105,174 | -
Loan receivable | 126,228 | 119,961
Trade and other receivab les | 540,117 | 261,771
Cash at banks | 1,084,951 | 931,866

Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity by maintaining adequate reserves and banking facilities to meet its abilities when due, under both
normal and stressed conditions. The Directors do not foresee and are unaware of any circumstances
whereby the Group would not honour its commitment.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
48
26. FINANCIAL R ISK MANAG EMENT - continued
Liquidity risk - continued
Unused borrowing faci lities as at 31 December w ere as follows:

| 2 024 | 2023
| € | €
Bank overdrafts | 500,000 | 500,000
Bank borrowings | 5,729,018 | 7,292,651
| 6,229,018 | 7,792,651

|  | Within o ne |  |  |  |  | One to five | More than |
|  |  |  |  | year |  |  | years | five years
|  |  |  |  |  |  | € | € | €
202 | 4 |  |  |  |  |  |  |  |
Financial liabilities: |  |  |  |  |  |  |  |  |
Bonds payable |  |  | 425,364 |  |  |  | 2,085,424 | 12,605,434 |
z Bank borrowings |  | 1,019,718 |  |  |  |  | 3,228,674 | 9,002,894 |
Lease liabilities |  |  | 309,801 |  |  |  |  | 716,617 | 1,406,615
Trade and other payab les | - | 1,0 | 159,922 | 1 | 9,7 | 1 | 8 | - | -
|  | 1,9 14,805 |  |  |  |  | 6,030,715 | 23,014,943 |
202 | 3 |  |  |  |  |  |  |  |
Financial liabilities: |  |  |  |  |  |  |  |  |
Bank borrowings |  |  |  | 817,864 |  |  | 1,861,769 | 8,274,182 |
Lease liabilities |  |  |  |  | 34,796 |  |  | 132,238 | 277,709
Trade and other payab les |  |  |  | 30 | 5,472 |  |  | - | -
|  | 1,158,132 |  |  |  |  | 1,994,007 | 8,551,891 |

Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents, the availability
of funding through an adequate amount of credit facilities and the ability to close out market positions.
The timing and volume of the loan repayment cashflows are dependent on the actual timing of the loan
utilisation, drawdowns and other relevant conditions. The options are considered in the Group’s presented
financial projections and regularly updated to reflect the facts. The cash-flows related to the bond issue are
also detailed in further detail in the Prospectus dated 4
th
October 2024.
Capital risk management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern
and to maximise the return to stakeholders through the optimisation of the debt and equity balance.
The capital structure of the Group consists mainly of cash and cash equivalents as disclosed in
Note 18, items presented within equity in the statement of financial position and borrowings as disclosed in
Note 19 and Note 20, resp ectively.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
49
26. FINANCIAL RISK MANAGEMENT - continued
Capital risk management - continued
The Group's Directors manage the Group’s capital structure and make adjustments to it, in the light of
changes in economic conditions and according to the originally disclosed strategy. The Group’s capital
structure is reviewed on an ongoing basis. Based on recommendations of the Directors, the Group aims to
balance its overall capital structure through the payments of dividends, new share issues as well as the
issue of new debt or the redemption of existing debt. The Group monitors its capital structure and targets
to maintain at all times a healthy gearing ratio. This ratio is calculated as total net borrowings divided by
total capital. The Group considers total capital to be equity and total net borrowings, adjusted for deferred
tax liabilities.
As part of this process, the Group has declared and continues to explore and perform a comprehensive
evaluation of strategic financing options and initiatives to unlock and maximise shareholder value going
forward. This ongoing process includes considering a number of possible strategic options, including the
possibility of raising further capital from strategic and/or financial investors or carrying out equity
transactions, including options which might result in a change to the shareholding or capital structure of the
Group. Any decisions on the selection of specific strategic options are made regularly and adequately
communicated to the market, under the applicable rules and regulations.
The Group's over all business and development str ategy remains unchan ged from the pri or year.
27. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
The table below details the changes in the Group’s liabilities arising from financing activities, including both
cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were,
or future cash flows will be, classified in the Group’s statement of cash flows as cash flows from financing
activities.

| B onds | Bank | Lease |  |
| payable | borrowings | liabilities |  |
| (Note 20) | (Note 20) | (Note 21) |  | Total
| € | € | € |  | €
Balance at 01 January 2024 | - | 8,270,631 | 286,791 | 8,557,422 |
Drawdowns | - | 1,563,818 | - | 1,563,818 |
Repayments | - | (397,832) | (94,823) | (492,655) |
Interest paid | - | (412,855) | (74,176) | (4 | 87,031)
Proceeds from iss uance net of b ond |  |  |  |  |
issue costs | 9,640,997 | - | - | 9,640,997 |
Non-cash transactions: |  |  |  |  |
Additions | - | - | 1,403,417 | 1,403,417 |
Interest expense | - | 163,248 | 74,176 |  | 237,424
Amortisation of bond iss uance costs | 6,008 | - | - |  | 6,008
Capitalised borrowing costs | - | 280,976 | - |  | 280,976
Other movements | - | 21,680 | - |  | 21,680
Balance at 31 Decemb er 2024 | 9,647,005 | 9,489,666 | 1,595,385 | 20,732,056 |

VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
50
27. RECONCILIATION OF LIABILITIES ARI SING FROM FINANCING ACTIVITI ES - continu ed

| B ank | Lease |
| borrowings | liabilities |
| (Note 20) | (Note 21) | Total
| € | € | €
Balance at 01 January 2023 | 8,215,257 | 299,791 | 8,515,048
Drawdowns | 368,014 | - | 368,014
Repayments | (312,640) | (13,000) | (325,640)
Interest paid | (514,481) | (19,489) | (533,970)
Non-cash transactions: |  |  |
Interest expense | 207,609 | 19,489 | 227,098
Accrued interest | (70,709) | - | (70,709)
Capitalised borrowing costs | 377,581 | - | 377,581
Balance at 31 Decemb er 2023 | 8,270,631 | 286,791 | 8,557,422

28. FAIR VALUE MEASUREMENT
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 financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the
degree to which the inputs to the fair value measurements are observable and the significance of the inputs
to the fair value measurement in its entirety, which are described as follows:
- Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity
can access at the measurement date;
- Level 2: Inputs, other than quoted prices included within Level 1, that are observable for the asset
or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
- Level 3: Unobservable inputs for the asset or liability.
There were no transfers between levels during the year.
The valuation of investment properties at fair value is categorised as Level 3. Details of the valuation
techniques are disc losed in Note 1 2 to these consoli dated financial stateme nts.
29. CAPITAL COMMITMENTS
The Company’s investment and development programme has been regularly communicated to the market
and updated though regular company announcements and other communication. Nevertheless, the
Company’s mid-term projected capital commitments remain largely unchanged. These have been detailed
in the Company’s Listing Prospectus under the chapter of Prospective Financial Information, issued in
August 2021 and subsequently detailed in the Company’s bond prospectus published in October 2024 and
reflects the Directors expectation with respect to the future operations and project development of the
Company. Regular updates and adjustments to these plans are performed and communicated to align the
plans to the market reality and actual conditions, while the overall strategy remains unchanged. The basis
of preparation and key underlying assumptions, financial and development plans, are also detailed in the
prospectus, monitored and updated regularly. As of the end of the reporting period, these are materially
unchanged and imp lemented along the or iginally projected timefra mes.
RSM Malta is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network.
Each member of the RSM network is an independent accounting and consulting firm which practices in its own right.
The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Malta
Mdina Road,
Ħaż-Żebbuġ, Malta
ZBG 9015
T: 356 2278 7000
www.rsm.com.mt
51
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of VBL Plc
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the accompanying consolidated financial statements of VBL Plc (“the Company”) and
its subsidiaries (together, “the Group”) set out on pages 22 to 50, which comprise the consolidated
statement of financial position as at 31 December 2024, the consolidated statement of comprehensive
income, consolidated statement of changes in equity and consolidated statement of cash flows for the
year then ended, and notes to the financial statements, including a summary of material accounting
policy information.
In our opinion, the consolidated financial statements give a true and fair view of the financial position of
the Group as at 31 December 2024, and of its financial performance and its cash flows for the year then
ended in accordance with International Financial Reporting Standards (IFRS Accounting Standards) as
adopted by the European Union (EU), and have been properly prepared in accordance with the
requirements of the Maltese Companies Act (Cap. 386).
Our opinion is consistent with our additional report to the Audit Committee in accordance with the
provision of Article 11 of the EU Regulation No. 537/2014 on specific requirements regarding statutory
audits of public-interest entities.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Financial Statements section of our report. We are independent of the Group in accordance with
the ethical requirements of both the International Ethics Standards Board for Accountants’ International
Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA
Code) and the Accountancy Profession (Code of Ethics for Warrant Holders) Directive issued in terms
of the Accountancy Profession Act (Cap. 281) in Malta that are relevant to our audit of the financial
statements, and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code
and the Code of Ethics for Warrant Holders in Malta. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, we declare that non-audit services that we have provided to
the Group are in accordance with the applicable laws and regulations in Malta and that we have not
provided any non-audit services that are prohibited under Article 18A of the Accountancy Profession Act
(Cap 281).
The non-audit services that we have provided to the Group are disclosed in Note 5 to these consolidated
financial statements.
52
INDEPENDENT AUDITOR’S REPORT - continued
To the Shareholders of VBL Plc
Report on the Audit of the Consolidated Financial Statements - continued
Key Audit Matters
Key audit matters are those matters that, in our professional judgement were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of
our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Valuation of Investment Properties
The Group’s investment properties are carried at fair value of €83,351,369 as at 31 December 2024.
Further detail is included in Note 12 to these consolidated financial statements.
The existence of significant estimates used to arrive at the fair value of the property, could result in a
potential material misstatement by virtue of the inherent limitations underlying the estimations.
Consequently, specific audit focus and attention was given to this area. The valuation of the property
was performed by management on the basis of valuation reports prepared by an independent qualified
valuer and the Board of Directors’ assessment which considers various specific developments and
adjusted for property-specific status of the ongoing development projects, as well as the investment
value potential for the VBL asset portfolio.
Audit Response
We understood and evaluated the assessment performed by management on the basis of the
revaluations performed by a professional qualified valuer and the Board of Directors’ assessment to
ascertain the fair value of the investment properties.
Our audit procedures included amongst others:
• Considering the objectivity, independence, competence and capabilities of the external valuer.
• Considering the objectivity, competence and capabilities of the management and directors.
• Reviewing the methodology used by the external valuer and management to estimate the value of
the property.
• Assessing and challenging the significant unobservable inputs and assumptions that were applied
in the valuations made.
• Assessing the reasonableness of the valuations by reference to market evidence of transactions
for similar properties.
• Conducting discussions with the independent professional valuer, management and directors.
We concluded, based on our audit work, that the outcome of the assessment is reasonable.
In addition, we reviewed the adequacy of disclosures made in Note 12 to these consolidated financial
statements and concluded that these are adequate.
53
INDEPENDENT AUDITOR’S REPORT - continued
To the Shareholders of VBL Plc
Report on the Audit of the Consolidated Financial Statements - continued
Other Information
The directors are responsible for the other information. The other information comprises the general
information, directors’ report, remuneration report and statement of the directors and statement by the
directors on compliance with the Code of Principles of Good Corporate Governance, but does not
include the consolidated financial statements and our auditor’s report thereon. Our opinion on the
financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon, except as explicitly stated within the Report on Other Legal and Regulatory
Requirements.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information identified above and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears
to be materially misstated. If, based on the work we have performed on the other information that we
have obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report in this regard.
Under Article 179(3) of the Maltese Companies Act (Cap. 386), we are required to consider whether the
information given in the directors’ report is compliant with the disclosure requirements of Article 177 of
the same Act.
Based on the work we have performed, in our opinion:
• the directors’ report has been prepared in accordance with the Maltese Companies Act (Cap. 386);
• the information given in the directors’ report for the financial year for which the consolidated
financial statements are prepared is consistent with the consolidated financial statements; and
• in light of our knowledge and understanding of the Company and its environment obtained in the
course of the audit, we have not identified material misstatements in the directors’ report.
Responsibilities of the Directors for the Consolidated Financial Statements
The directors are responsible for the preparation of consolidated financial statements that give a true
and fair view in accordance with IFRS Accounting Standards as adopted by the EU and the requirements
of the Maltese Companies Act (Cap. 386), and for such internal control as the directors determine is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to liquidate
the Group or to cease operations, or have no realistic alternative but to do so.
The directors have delegated the responsibility for overseeing the Group's financial reporting process
to the Audit Committee.
54
INDEPENDENT AUDITOR’S REPORT - continued
To the Shareholders of VBL Plc
Report on the Audit of the Consolidated Financial Statements - continued
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s a bility to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
Evaluate the overall presentation, structure, and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
55
INDEPENDENT AUDITOR’S REPORT - continued
To the Shareholders of VBL Plc
Report on the Audit of the Financial Statements - continued
Auditor’s Responsibilities for the Audit of the Financial Statements - continued
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore
the key audit matters. We describe these matters in ou r auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
Report on the Statement of Compliance with the Code of Principles of Good Corporate
Governance
The Capital Market Rules issued by the Malta Financial Services Authority require the directors to
prepare and include in their Annual Report a Statement of Compliance with the Code of Principals of
Good Corporate Governance within Appendix 5.1 to Chapter 5 of the Capital Market Rules. The
Statement’s required minimum contents are determined by reference to Capital Markets Rule 5.97. The
Statement provides explanations as to how the Company has complied with the provisions of the Code,
presenting the extent to which the Company has adopted the Code and the effective measures the
Board has taken to ensure compliance throughout the accounting period with those Principles.
The Capital Markets Rules also require the auditor to include a report on the Statement of Compliance
prepared by the directors.
We read the Statement of Compliance and consider the implications for our report if we become aware
of any apparent misstatements or material inconsistencies with the financial statements included in the
Annual Report with respect to the information referred to in the Capital Market Rules 5.97.4 and 5.97.5.
We also assessed whether the Statement of Compliance includes all the other information required to
be presented as per Capital Market Rules 5.97. Our responsibilities do not extend to considering
whether this statement is consistent with any other information included in the Annual Report.
We are not required to, and we do not, consider whether the Board’s statements on internal control
included in the Statement of Compliance cover all risks and controls, or form an opinion on the
effectiveness of the Group’s corporate governance procedures or its risk and control procedures. In our
opinion, the Statement of Compliance with the Principles of Good Corporate Governance set out on
pages 14 to 21 has been properly prepared in accordance with the requirements of the Capital Markets
Rules issued by the Malta Financial Services Authority.
56
INDEPENDENT AUDITOR’S REPORT - continued
To the Shareholders of VBL Plc
Report on Other Legal and Regulatory Requirements - continued
Report on the Remuneration Statement
The Capital Markets Rules issued by the Malta Financial Services Authority requires the directors to
prepare a remuneration statement. We are required to consider whether the information that should be
provided under the Remuneration Statement has been included.
In our opinion, the Remuneration Statement has been properly prepared in accordance with the
requirements of the Capital Markets Rules issued by the Malta Financial Services Authority.
Report on compliance with the requirements of the European Single Electronic Format
Regulatory Technical Standard (the “ESEF RTS”), by reference to Capital Markets Rule 5.55.6
We have undertaken a reasonable assurance engagement in accordance with the requirements of
Directive 6 issued by the Accountancy Board in terms of the Accountancy Profession Act (Cap. 281) –
the Accountancy Profession (European Single Electronic Format) Assurance Directive (the “ESEF
Directive 6”) on the annual financial report of VBL plc for the year ended 31 December 202 4, entirely
prepared in a single electronic reporting format.
Responsibilities of the directors
The directors are responsible for the preparation of the annual financial report, including the
consolidated financial statements and the relevant mark-up requirements therein, by reference to
Capital Markets Rule 5.56A, in accordance with the requirements of the ESEF RTS.
Auditor’s responsibilities
Our responsibility is to obtain reasonable assurance about whether the annual financial report, including
the consolidated financial statements and the relevant electronic tagging therein comply in all material
respects with the ESEF RTS based on the evidence we have obtained. We conducted our reasonable
assurance engagement in accordance with the requirements of ESEF Directive 6.
Our procedures included:
• Obtaining an understanding of the entity’s financial reporting process, including the preparation of
the annual financial report, in accordance with the requirements of the ESEF RTS.
• Obtaining the annual financial report and performing validations to determine whether the annual
financial report has been prepared in accordance with the requirements of the technical
specifications of the ESEF RTS.
• Examining the information on the annual financial report to determine whether all the required
taggings therein have been applied and whether, in all material respects, they are in accordance
with the requirements of the ESEF RTS.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
57
INDEPENDENT AUDITOR’S REPORT - continued
To the Shareholders of VBL Plc
Report on Other Legal and Regulatory Requirements - continued
Opinion
In our opinion, the annual financial report for the year ended 31 December 2024 has been prepared, in
all material respects, in accordance with the requirements of the ESEF RTS.
Other matters on which we are required to report by exception
Under the Maltese Companies Act (Cap. 386), we are required to report to you if, in our opinion:
• proper accounting records have not been kept; or
• proper returns adequate for our audit have not been received from branches we have not visited;
or
• the consolidated financial statements are not in agreement with the accounting records and returns;
or
• we were unable to obtain all the information and explanations which, to the best of our knowledge
and belief, are necessary for the purposes of our audit.
We also have responsibilities under the Capital Markets Rules to review the statement made by the
directors that the business is a going concern together with supporting assumptions or qualifications as
necessary.
We have nothing to report to you in respect of these responsibilities.
Appointment
We were first appointed to act as auditors of the Group by the shareholders of the Company on 14
December 2021 for the year ended 31 December 2021, and we were subsequently reappointed by the
shareholders at the Company’s general meeting for the financial year thereafter. The period of
uninterrupted engagement as statutory auditor of the Group is four financial periods.
RSM Malta
Registered Auditors
Mdina Road
Zebbug ZBG 9015
Malta
Conrad Borg
Principal
24 April 2025