SD Finance plc - 549300OYE47PF4MSZ102

SD FINANCE plc

Annual Financial Report and Financial Statements - 31st March 2025

SD FINANCE plc

Annual Financial Report and Financial Statements

31 March 2025

Company Registration Number: C 79193

SD FINANCE plc

Annual Financial Report and Financial Statements - 31st March 2025

Contents

Pages

Directors’ report

1 – 5

Corporate Governance – Statement of Compliance

6 – 9

Statement of financial position

Statement of total comprehensive income

Statement of changes in equity

Statement of cash flows

Notes to the financial statements

14 – 28

Independent auditor’s report

29 - 37

Directors’ report

The Directors present their report and the audited financial statements for the year ended 31 March 2025.

Principal activities

The principal activity of SD Finance plc (the “Company” or the “Issuer”) is to carry on the business by raising funds to finance the operations and capital projects of the companies forming part of the db Group (the “Group”).

Review of business

During the year under review, finance income on loans and ancillary revenue (in the form of renewal fees – see Note 4) from SD Holdings Limited, the guarantor of the Company’s bonds, and Seabank Hotel and Catering Limited and Hotel San Antonio Limited (fellow subsidiaries), amounted to €3.1 million (2024: €3.1 million), whilst interest expense on bonds totalled €2.93 million (2024: €2.93 million).

Administrative expenses mainly representing listing and compliance costs, together with Directors’ and professional fees amounted to €133,912 (2024: €126,696). Profit for the year after tax remained consistent with prior year at €4,036 (2024: €5,021).

The Company’s balance sheet is primarily made up of the bond issue for €65 million (classified as non-current liabilities) and the loans receivable from SD Holdings Limited, Seabank Hotel and Catering Limited, and Hotel San Antonio Limited (classified as non-current assets). SD Finance plc’s equity as at year end is stated at €298,946 (2024: €294,910) primarily made up of the initial share capital funds.

The Company recognises that the key risk and uncertainty of its business is that of the potential non-fulfilment by the borrowers (noted above) of their obligations.

Guarantor’s performance for 2025 and outlook for 2026

The db Group owned by SD Holdings Limited, as guarantor to the bond issue, experienced continued growth in revenues and profitability.

In September 2024, db Group expanded its hospitality footprint with the full acquisition of the Porto Azzurro Hotel in Xemxija, St Paul’s Bay, rebranding it as Xemxija Bay Hotel. The Group, through SD Holdings, secured the remaining two-thirds of the property for €8 million, having already owned a one-third stake. The 110-room, three-star hotel generates approximately €1.43 million in annual revenue and €350,000 in EBITDA. This move strengthens db’s presence in the mid-scale segment and aligns with its strategy of value-accretive acquisitions.

During current financial year the group has acquired the Franchise Rights over C&R Cafe and started operating the Naxxar outlet 1st March 2025.

In October 2024, db Group commenced structural works on the Hard Rock Hotel Malta at St George’s Bay, marking a major milestone in its flagship development. The 5-star hotel will feature 394 rooms and 25 suites, many with private pools and sea views, and will incorporate restored 19th-century British military quarters. Alongside the hotel, two ORA Residences towers—ORA W and ORA E—are under construction, designed as vertical gardens by renowned landscape architect Laura Gatti. As of June 2025, the towers had reached Levels 8 and 9 respectively, with 91% of units sold. The development also includes St George’s Mall, a 20,000 sqm retail and entertainment complex, which was 90% complete by mid-2025 and is set to become a landmark destination by 2026.

Directors’ report - continued

Review of business - continued

Guarantor’s performance for 2025 and outlook for 2026 - continued

In 2025, the db Group entered into a strategic joint venture with RAK Hospitality Holding LLC, an entity owned by the Investment and Development Office of the Government of Ras Al Khaimah, to establish HR Hotel FZ LLC. This newly formed company will spearhead the development of Hard Rock Hotel & Residences in Ras Al Khaimah. Slated to open in 2028, the project marks Hard Rock International’s debut in the Middle East and will be situated on a prime beachfront site within the emirate’s Beach District, directly opposite Al Marjan Island. The development will comprise approximately 300 hotel rooms and 400 branded residences, supported by a comprehensive suite of five-star amenities including diverse dining venues, a rooftop bar, conference and event facilities, a beach club, swimming pools, a fully equipped gym, and a premium spa.

The Health care arm of the group continued increasing its operations over this financial year which proved the demand for the services offered within this sector, the guarantor has also notified that it has successfully finalized negotiations with its JV Partner to sell off the shares within the Healthcare arm to be able to focus on its core business activity that of Hospitality and expansion of its operations in overseas investments expanding further into the property development sector. This strategic decision shows the groups vision to continue its rapid expansion within the hospitality and property development sectors both locally and internationally.

As at 31 March 2025, the Group still has a substantial cash reserve of over €89.5 million.

The Group has also prepared projections for the coming 2 years, based on historical financial information and forecasts, but factoring in the improved results of the past year. The Group does not anticipate any material impact on its results from ongoing major geopolitical events, as its direct business exposure to the affected areas is negligible. Nonetheless, the Group continues to monitor the broader implications of these developments on global markets and supply chains. Continued increases in the price of goods and services is the principal challenge that the Group’s entities have experienced during the current financial year. The projections contemplate the existence of a significant liquidity buffer at the end of the year and the Directors feel confident that with the measures taken and the secured financing arrangements, the Group shall overcome any potential further disruptions. On this basis, the Directors are of the opinion that there are no material uncertainties which may cast significant doubt about the ability of the Group to continue operating as a going concern.

Issuer’s outlook for the financial year ending 2026

The Company paid its bondholders the full interest that was due in April 2025. Furthermore, in view of the measures undertaken by the Group, the projections outlined above and the cash reserves available to the Group, the Directors are of the opinion that the Issuer will have the necessary funds to finance the interest falling due in April 2026 and going forward. The Board of the Issuer, having reviewed the Group’s cashflow forecast, further confirms this statement.

Directors’ report - continued

Review of business - continued

Principal risks and uncertainties

Financial risk management

The Company’s activities expose it to a variety of financial risks, including credit risk and liquidity risk. Refer to Note 2 to these financial statements.

Results and dividends

The Company’s financial results are set out on page 10. The Directors do not recommend the payment of a dividend.

The Directors propose that the balance of retained earnings amounting to €48,946 (2024: €44,910) be carried forward to the next financial year.

Directors

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

Silvio Debono Robert Debono

Alan Debono (appointed 25th April 2025)Arthur Gauci (resigned 25th April 2025)Philip Micallef Vincent Micallef Stephen Muscat

With effect from 25th of April 2025, Arthur Gauci has stepped down from the position of Non-Executive Director of the Company. On the same date, Alan Debono has been appointed as Executive Director of the Company.

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

Statement of Directors’ responsibilities for the financial statements

The Directors are required by the Companies Act (Cap. 386) of the Laws of Malta to prepare financial statements which give a true and fair view of the state of affairs of the Company as at the end of each reporting year and of the profit or loss for that period.

In preparing the financial statements, the Directors should:

select suitable accounting policies and apply them consistently;

ensure that the financial statements have been drawn up in accordance with International Financial Reporting Standards as adopted by the EU and the Companies Act (Cap. 386) of the Laws of Malta;

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

value separately the components of asset and liability items;

report comparative figures corresponding to those of the preceding accounting period;

make judgments and estimate that are reasonable; and

prepare the financial statement on a going concern basis, unless it is inappropriate to presume that the Company will continue in business as a going concern.

Directors’ report - continued

Statement of Directors’ responsibilities for the financial statements - continued

The Directors are responsible for ensuring that proper accounting records are kept which disclose with reasonable accuracy at any time the financial position of the Company and which enable the Directors to ensure that the financial statements comply with the Companies Act (Cap. 386) of the Laws of Malta. This responsibility includes designing, implementing, and maintaining such internal control as the Directors determine is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. The Directors are also responsible for safeguarding the assets of the Company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Annual Financial Report 2025, which includes the Directors’ report and financial statements of SD Finance plc for the year ended 31 March 2025 are available on the db Group website.

The Directors are responsible for the maintenance and integrity of the Annual Financial Report on the website in view of their responsibility for the controls over, and the security of, the website. Access to information published on the Group’s website is available in other countries and jurisdictions, where legislation governing the preparation and dissemination of financial statements may differ from requirements or practice in Malta.

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

the financial statements give a true and fair view of the financial position of the Company as at 31 March 2025, and of the financial performance and the cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU; and

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

Going concern statement pursuant to Capital Markets rule 5.62

After making enquiries, the Directors, at the time of approving the financial statements, have determined that it is reasonable to assume that the Company has adequate resources to continue operating for the foreseeable future. For this reason, the Directors have adopted the going concern basis in preparing the financial statements.

Auditors

Ernst & Young Malta (EY Malta) has been appointed as auditors of the Company for the audit of the current financial year ended 31 March 2025.

Signed on behalf of the Board of Directors on 28 July 2025 by Robert Debono (Director) and Stephen Muscat (Director) as per the Directors' Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Financial Report.

Directors’ report - continued

Registered office

Seabank Hotel

Marfa Road

Mellieha

MLH 9064

Malta

Telephone

(+356) 2289 1000

Company secretary

Dr. Shaheryar Ghaznavi

_________________________ _________________________

Robert DebonoStephen Muscat

DirectorDirector

Corporate Governance – Statement of Compliance

Introduction

Pursuant to the requirements of the Capital Markets Rules issued by the Listing Authority of the Malta Financial Services Authority, SD Finance plc (the “Company” or the “Issuer” – a fully owned subsidiary of SD Holdings Limited) hereby reports on the extent to which the Company has adopted The Code of Principles of Good Corporate Governance (the “Code”) appended to Chapter 5 of the Capital Markets Rules as well as the measures adopted to ensure compliance with these same Principles.

Since its incorporation, the Company’s principal activity is to raise funds from the capital market to finance the operations of other group companies forming part of db Group (the “Group”).

The Company acknowledges that although the Code does not dictate or prescribe mandatory rules, compliance with the principles of good corporate governance recommended in the Code is in the best interests of the Company, its shareholders, and other stakeholders. In deciding on the most appropriate manner in which to implement the Principles, the Board of SD Finance plc (the “Board”) has taken cognisance of its size, which inevitably impacts on the structures required to implement the Principles without diluting the effectiveness thereof. The Company does not have any employees.

The Board considers that, to the extent otherwise disclosed herein, the Company was generally in compliance with the Principles throughout the year under review.

Roles and responsibilities

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

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

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

The Board is also responsible for ensuring that the Company installs and operates effective internal control and management information systems and that it communicates effectively with the market.

The Board of Directors

Principles One to Five of the Code deal fundamentally with the role of the Board of Directors.

The Board is composed of six members made up of two executive and four non-executive directors as of 31 March 2025. The two Executive Directors, Mr Silvio Debono and Mr Robert Debono, occupy various senior executive and directorship positions within the Group. The three Non-Executive Independent Directors are Mr Philip Micallef, Dr Vincent Micallef and Mr Stephen Muscat. With effect from 25th of April 2025, Arthur Gauci, who was also a Non-Executive Director, has stepped down from the position of Non-Executive Director of the Company. On the same date, Alan Debono has been appointed as Executive Director of the Company.

The three remaining Non-Executive Independent Directors are considered by the Board as independent directors since they are free of any significant business relationship, family or other relationships with the Issuer, its controlling shareholder, or the management of either, that creates a conflict of interest such as to impair their judgement.

Corporate Governance – Statement of Compliance - continued

The Board of Directors - continued

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

The Board members are notified of forthcoming meetings by the Company secretary (Dr Shaheryar Ghaznavi) with the issue of an agenda and supporting documents as necessary which are then discussed during the Board meetings.

The Board does not consider it necessary to institute separate committees for remuneration and nomination, as would be appropriate in an operating company. During the current financial year, the Board met three times and was attended by more than 75% of the Officers of the Company. During this year, the Board did not undertake a performance evaluation of its role in accordance with Article 7 of the Corporate Governance Code but intends to do so in the coming year.

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

•the direct supervision, supported by expert professional advice as appropriate, on the issue and listing of bonds;

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

•the proper utilisation of the resources of the Company;

•the annual financial report and financial statements, the relevant public announcements and the Company’s compliance with its continuing listing obligations.

Remuneration statement

The Board confirms that the maximum annual aggregate emoluments that may be paid to the Directors pursuant to the Company’s Memorandum and Articles of Association, was approved by the shareholders at the Annual General Meeting. None of the non-executive Directors has service contracts with the Company. Furthermore, the remuneration of two of the independent non-executive Directors is a fixed honorarium of €10,000 each per annum and for the other independent non-executive Director, a fixed honorarium of €13,000 per annum. The director’s fees of the other non-executive Director who serves as a consultant within the Group are being recharged to the Company by the Group and is paid to a fellow subsidiary (see Note 16). The fixed remuneration as the Company’s Directors also covers their services as the Company’s Audit Committee. The executive Directors do not earn any fixed honorarium from the Company but have an indefinite full-time contract of service with the companies forming part of the db Group.

None of the Directors have any variable component remuneration relating to profit sharing, share options or pension benefits from the Company.

The Board further confirms that the Company does not intend to effect any changes to its remuneration policy for the following year.

Corporate Governance – Statement of Compliance - continued

Risk management and internal control

The Board is ultimately responsible for the Company’s system of internal controls and for reviewing its effectiveness. The Directors are aware that internal control systems are designed to manage, rather than eliminate, the risk of failure to achieve business objectives, and can only provide reasonable, and not absolute, assurance against normal business risks.

During the financial year under review the Company operated a system of internal controls which provided reasonable assurance of effective and efficient operations covering all controls, including financial and operational controls and compliance with laws and regulations. Processes are in place for identifying, evaluating, and managing the significant risks facing the Company.

The Board recognizes that the Company must manage a range of risks in the course of its activities and in this respect maintains a sound risk management and internal control system which includes the determination of the nature and extent of the risks it is willing to take in achieving its strategic objectives.

The Board, in this financial period, established a formal and transparent arrangement to apply risk management and internal control principles, as well as maintaining an appropriate relationship with the Company’s auditors.

The Board is adjourned periodically of the financial affairs and operational developments of the group entities to whom the Issuer has advanced the proceeds from the bond issue.

Audit Committee

During the current financial year, the Audit Committee met four times with 100% attendance.

The Audit Committee’s primary objective is to assist the Board in fulfilling its responsibilities relating to risk, control, and governance as well as to review the financial reporting processes. The Board has set formal terms of reference of the Audit Committee that establish its composition, role, and functions. The Audit Committee is a subcommittee of the Board and is directly responsible and accountable to the Board. The Board reserves the right to change these terms of reference from time to time.

Furthermore, the Audit Committee has the role and function of scrutinizing and evaluating any proposed transaction to be entered into by the Company and a related party, to ensure that the execution of any such transaction is at arm’s length and on a commercial basis and ultimately in the best interests of the Company.

As required by the Companies Act (Cap. 386) of the Laws of Malta and the Listing Authority Capital Markets Rules, the financial statements of SD Finance plc are subject to annual audit by its external auditors. Moreover, the Audit Committee has direct access to the external auditors of the Company, who attend the Board meetings at which the Company’s financial statements are approved.

The Audit Committee is composed of three independent non-executive directors, in accordance with Capital Markets Rule 5.117. The members of the Audit Committee are Mr Stephen Muscat, Mr Philip Micallef and Mr Vincent Micallef. Mr Stephen Muscat, who also acts as the Chairman of the Audit Committee, is a Certified Public Accountant and is considered by the Board to be both independent and competent in accounting as required in terms of the Capital Markets Rules.

Corporate Governance – Statement of Compliance - continued

Relations with bond holders and the market

Pursuant to the Company’s statutory obligations in terms of the Companies Act (Cap. 386) of the Laws of Malta and the Listing Authority Capital Markets Rules, the Annual Financial Report and Financial Statements, the election of directors and approval of Directors’ fees, the appointment of the auditors and the authorisation of the directors to set the auditors’ fees, and other special business, are proposed and approved at the Company’s Annual General Meeting.

The Company communicates with its bondholders by publishing its interim results for a six-month period during the year and by way of publication of the full year Audited Financial Statements. The Financial Analysis Summary is also published in September. Additionally, during the current financial period, the Company organised a specific session for Financial Intermediaries to explain the Company’s results and those of the Group. During the period April 2024 to March 2025, the Company issued eight company announcements. The Board deems that it is providing the market with adequate information about its activities through these channels.

In this respect, the Directors are of the view that Principle Ten of the Code of Corporate Governance is not applicable to the Company.

Other information

In view of the size and type of operations of the Company, the Board does not consider the Company to require the setting up of a nomination committee.

During the financial year under review, no private interests or duties unrelated to the Company were disclosed by the Directors which were or could have been likely to place any of them in conflict with any interests in, or duties towards the Company.

The Company is a member of the db Group, which group has its own program for Corporate Social Responsibility initiatives.

Conclusion

The Board considers that the Company has generally been in compliance with the Principles throughout the year under review as befits a company of this size and nature.

Approved by the Board on 28 July 2025.

_________________________ _________________________

Robert DebonoStephen Muscat

DirectorDirector

Statement of financial position

as at 31 March

2025

2024

Note

€

ASSETS

Non-current assets

Loans receivable

64,332,686

Current assets

Receivables

67,523

204,279

Cash and cash equivalents

3,390,700

3,149,230

Total current assets

3,458,223

3,353,509

Total assets

67,790,909

67,686,195

EQUITY AND LIABILITIES

Capital and reserves

Share capital

250,000

Retained earnings

48,946

44,910

Total equity

298,946

294,910

Non-current liabilities

Borrowings

64,890,518

64,780,119

Current liabilities

Borrowings

2,570,454

2,576,324

Payables

29,810

33,266

Current tax liabilities

1,181

1,576

Total current liabilities

2,601,445

2,611,166

Total liabilities

67,491,963

67,391,285

Total equity and liabilities

67,790,909

67,686,195

The accompanying notes on pages 14 to 28 are an integral part of these financial statements.

The financial statements were approved and authorised for issue by the Board of Directors on 28 July 2025. The financial statements were signed on behalf of the Board of Directors by Robert Debono (Director) and Stephen Muscat (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Financial Report.

_________________________ _________________________

Robert DebonoStephen Muscat

DirectorDirector

Statement of total comprehensive income

for the year ended 31 March

2025

2024

Note

€

Finance income

3,069,268

3,059,494

Finance costs

(2,929,146)

(2,925,074)

Net interest income

140,122

134,420

Administrative expenses

(133,912)

(126,696)

Profit before tax

6,210

7,724

Tax expense

(2,174)

(2,703)

Profit for the year

4,036

5,021

Other comprehensive income

Total comprehensive income for the year

4,036

5,021

The accompanying notes on pages 14 to 28 are an integral part of these financial statements.

Statement of changes in equity

for the year ended 31 March

Retained

Capital

Earnings

Total

€

Balance at 1 April 2023

250,000

39,889

289,889

Profit for the year

5,021

Other comprehensive income

Total comprehensive income

5,021

Balance at 31 March 2024

250,000

44,910

294,910

Profit for the year

4,036

Other comprehensive income

Total comprehensive income

4,036

Balance at 31 March 2025

250,000

48,946

298,946

The accompanying notes on pages 14 to 28 are an integral part of these financial statements.

Statement of cash flows

for the year ended 31 March

2025

2024

Note

€

Cash flows from operating activities

Interest received

3,202,695

3,026,179

Interest paid

(2,824,616)

(2,818,352)

Cash paid to service providers

(134,040)

(129,881)

Tax paid

(2,569)

(712)

Net cash generated from operating activities

241,470

77,234

Cash flows used in investing activities

Net cash used in investing activities

Cash flows from financing activities

Net cash generated from financing activities

Net movement in cash and cash equivalents

241,470

77,234

Cash and cash equivalents at beginning of the year

3,149,230

3,071,996

Cash and cash equivalents at end of the year

3,390,700

3,149,230

The accompanying notes on pages 14 to 28 are an integral part of these financial statements.

Notes to the financial statements

1.Summary of material accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to the year presented, unless otherwise stated.

1.1 Basis of preparation

These financial statements have been prepared in accordance with the requirements of International Financial Reporting Standards (IFRSs) as adopted by the EU and with the requirements of the Companies Act (Cap. 386) of the Laws of Malta. The financial statements have been prepared under the historical cost convention.

The preparation of financial statements in conformity with IFRSs as adopted by the EU requires the use of certain accounting estimates. It also requires directors to exercise their judgment in the process of applying the Company’s accounting policies (see Note 3 – Significant accounting estimates and judgments).

Standards, interpretations and amendments to published standards as endorsed by the European Union effective in the current year

During the current financial year, the Company adopted amendments to existing standards that are mandatory for the Company’s accounting period beginning on 1 April 2024. The adoption of these revisions to the requirements of IFRSs as adopted by the EU did not result in substantial changes to the Company’s accounting policies impacting the Company’s financial performance and position.

Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (issued on 22 September 2022)

Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (issued on 23 January 2020), Classification of Liabilities as Current or Non-current - Deferral of Effective Date (issued on 15 July 2020), and Non-current Liabilities with Covenants (issued on 31 October 2022)

Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements (issued on 25 May 2023)

The adoption of these standards and amendments did not have any material impact on the other disclosures or on the amounts reported in these financial statements.

Standards, interpretations and amendments to published standards as endorsed by the European Union but are not yet effective

Up to the date of approval of these financial statements, the following new standards and amendments to existing standards have been published but are not yet effective for the current reporting year and which the Company has not adopted early but plans to adopt upon their effective date.

Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (effective for annual reporting periods beginning on or after 1 January 2025) - The amendments will require companies to provide more useful information in their financial statements when a currency cannot be exchanged into another currency.

Notes to the financial statements - continued

1.Summary of material accounting policies - continued

1.1 Basis of preparation - continued

Standards, interpretations and amendments to published standards as endorsed by the European Union but are not yet effective - continued

Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7 (effective for annual reporting periods beginning on or after 1 January 2026) - The amendments clarify the requirements in areas where new issues have emerged since IFRS 9 was issued including classification of financial assets with environmental, social and corporate governance and similar features, and settlement of liabilities through electronic payment system.

Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7 (issued on 18 December 2024)

Annual Improvements Volume 11 (issued on 18 July 2024)

None of these new standards or amendments are expected to have significant impact on the financial position or performance of the Company.

Standards, interpretations and amendments that are not yet endorsed by the European Union, are not yet effective and not early adopted

Certain new standards, amendments and interpretations to existing standards have been published by the date of authorisation for issue of these financial statements but are not yet endorsed by the European Union. In the opinion of the Directors, the adoption of these standards will not have significant impact on the financial statements of the Company.

IFRS 19 Subsidiaries without Public Accountability: Disclosures (issued on 9 May 2024)

IFRS 18 Presentation and Disclosure in Financial Statements (issued on 9 April 2024)

Geopolitical events

The Company has considered the ongoing major geopolitical events in the preparation of the financial statements of the Company and determined that these events do not have a significant impact on the Company's operations, financial position, or performance for the reporting period. There are no material uncertainties related to these geopolitical events that would require additional disclosures or adjustments to the financial statements.

1.2 Foreign currency translation

Functional and presentation currency

Items included in these financial statements are measured using the currency of the primary economic environment in which the Company operates (‘the functional currency’). The financial statements are presented in Euro which is the Company’s functional and presentation currency.

1.3 Financial assets

1.3.1 Classification

The Company classifies its financial assets as financial assets measured at amortised cost. The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows. The Company classifies its financial assets as at amortised cost only if both the following criteria are met:

-The asset is held within a business model whose objective is to collect the contractual cash flows, and

-The contractual terms give rise to cash flows that are solely payments of principal and interest.

Notes to the financial statements - continued

1.Summary of material accounting policies - continued

1.3 Financial assets - continued

1.3.1 Classification - continued

Assessment of whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular year of time and for other basic lending risks and costs (e.g., liquidity risk and administrative costs), as well as a profit margin that is consistent with the basic lending arrangement.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition.

The Company’s financial assets include cash and cash equivalents, receivables and loans receivable.

1.3.2 Initial recognition and measurement

The Company recognises a financial asset in its statement of financial position when it becomes a party to the contractual provisions of the instrument.

At initial recognition, the Company measures a financial asset at its fair value plus transaction costs that are directly attributable to the acquisition of the financial asset.

1.3.3 Subsequent measurement

Financial assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss. Impairment losses are presented as a separate line item in the statement of profit or loss.

1.3.4 Derecognition

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.

1.3.5 Expected credit losses

The Company assesses on a forward-looking basis the expected credit losses (ECL) associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. The Company’s financial assets are subject to the expected credit loss model.

Notes to the financial statements - continued

1.Summary of material accounting policies - continued

1.3 Financial assets - continued

1.3.5 Expected credit losses - continued

Expected credit loss model

The Company measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12-month ECLs:

debt securities that are determined to have low credit risk at the reporting date; and

other debt securities and bank balances for which credit risk has not increased significantly since initial recognition.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due, and it considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realising security (if any is held); or the financial asset is more than 90 days past due.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. 12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter year if the expected life of the instrument is less than 12 months). The maximum year considered when estimating ECLs is the maximum contractual year over which the company is exposed to credit risk.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls. ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable data such as significant financial difficulty of the borrower or issuer, or a breach of contract such as a default or being more than 90 days past due.

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

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

For the cash and cash equivalents, receivables, and loans receivable, the expected credit losses are immaterial.

1.4 Receivables

Receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less expected credit loss allowances.

Receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant financing components, when they are recognised at fair value. The Company holds the receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method.

Notes to the financial statements - continued

1.Summary of material accounting policies - continued

1.5 Cash and cash equivalents

Cash and cash equivalents are carried in the statement of financial position at face value. In the statement of cash flows, cash and cash equivalents include cash in hand and deposits held at call with banks with original maturity of less than three months.

1.6 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of tax, from the proceeds.

1.7 Financial liabilities

The Company recognises a financial liability in its statement of financial position when it becomes a party to the contractual provisions of the instrument. The Company’s financial liabilities are classified as at amortised cost (classified as ‘Other liabilities’) under IFRS 9. Financial liabilities at amortised cost are recognised initially at fair value, being the fair value of the consideration received, net of transaction costs that are directly attributable to the acquisition or the issue of the financial liability. These liabilities are subsequently measured at amortised cost. The Company derecognises a financial liability from its statement of financial position when the obligation specified in the contract or arrangement is discharged, is cancelled, or expires.

The Company’s financial liabilities include borrowings and payables.

1.8 Borrowings

Borrowings are recognised initially at the fair value of proceeds received net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the year of the borrowings using the effective interest method. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period.

Transaction costs are incremental costs that are directly attributable to the issue of the financial liability and are those costs that would not have been incurred if the Company had not issued the financial instrument.

1.9 Payables

Payables comprise obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

1.10 Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

Notes to the financial statements - continued

1.Summary of material accounting policies - continued

1.11 Current tax

The tax expense for the year is comprised of current tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is recognised in other comprehensive income or directly in equity, respectively.

1.12 Interest income and expense

Interest income and expense are recognised in profit or loss for all interest-bearing financial instruments using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Company estimates cash flows considering all contractual terms of the financial instrument but does not consider future credit losses. The calculation includes all fees and transaction costs paid or received between the parties to the contract that are an integral part of the effective interest rate method. Accordingly, interest expense includes the effect of amortising any difference between net proceeds and redemption value in respect of the Company’s interest-bearing borrowings.

1.13Fair 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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

-In the principal market for the asset or liability, or

-In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.

Notes to the financial statements - continued

1.Summary of material accounting policies - continued

1.14Reclassification

Certain balances in the comparative statement of financial position and supporting note disclosures (see Note 8 and Note 9) have been reclassified to conform to the presentation used in the statement of financial position as of 31 March 2025. The reclassification did not affect the total assets, total liabilities and total equity in the statement of financial position as of 31 March 2024, 31 March 2023 and 01 April 2023.

2.Financial risk management

2.1 Financial risk factors

The Company constitutes a financing special purpose vehicle whose bond proceeds were advanced to SD Holdings Limited (parent undertaking), Hotel San Antonio Limited and Seabank Hotel and Catering Limited (both fellow subsidiaries of the Issuer). The Company’s principal risk exposures relate to credit risk and liquidity risk. The Company is not exposed to currency risk and the Directors deem interest rate risk exposure to be minimal due to the matching of its interest costs on the bonds with its interest income from its loans and receivables referred to above.

(a) Credit risk

Credit risk primarily arises from loans receivable from SD Holdings Limited, Hotel San Antonio Limited and Seabank Hotel and Catering Limited (Note 4), receivables (Note 5) and cash and cash equivalents (Note 6). These financial assets potentially subject the Company to concentrations of credit risk.

The maximum exposure to credit risk at the end of the reporting year in respect of the Company’s financial assets is equivalent to their carrying amount, which is analysed as follows:

2025

2024

€

Financial assets measured at amortised cost:

Loans receivable from parent undertaking and fellow subsidiaries (Note 4)

64,332,686

Receivables (Note 5)

67,509

200,936

Cash and cash equivalents (Note 6)

3,390,700

3,149,230

67,790,895

67,682,852

Cash and cash equivalents

The Company’s cash and cash equivalents are held with a local financial institution with high quality standing or rating and are due to be settled on demand. Management considers the probability of default to be close to zero as the financial institutions have a strong capacity to meet their contractual obligations in the near term. As a result, while cash and cash equivalents are subject to the impairment requirements of IFRS 9, the identified impairment loss is insignificant.

Loans receivable and other amounts owed by related parties

The Company’s loans receivable consists of advances to related parties forming part of the db Group (refer to Note 4), which advances have been effected out of the Company’s bond issue proceeds. The Company monitors intra-group credit exposures on a regular basis and ensures timely performance of these assets in the context of overall group liquidity management. The Guarantor in relation to the bond issue (SD Holdings Limited) is in fact one of the borrowers. The Company assesses the credit quality of db Group taking into account financial position, performance, and other factors. The Company takes cognisance of the related party relationship with these entities and management does not expect any losses from non-performance or default.

Notes to the financial statements - continued

2.Financial risk management - continued

2.1 Financial risk factors - continued

(a) Credit risk - continued

Loans receivable and other amounts owed by related parties - continued

Loans receivable from related parties are categorised as Stage 1 for IFRS 9 purposes (i.e., performing) in view of the factors highlighted above. The expected credit loss allowances on such loans are based on the 12-month probability of default, capturing 12-month expected losses. On 31 March 2025, the Company’s Directors reviewed the Company’s financial assets particularly the loans advanced to related parties (see Note 4). In view of the respective entities’ history, results to date, gearing ratios and reserves, as well as forward looking estimates, the Directors applied judgement in determining the appropriate expected credit loss provisions as a result of adopting the expected future loss framework under IFRS 9.

Following the assessment of the Directors, all the Company’s financial assets are considered to have low credit risk and a low risk of default. In this respect, the loss allowance was deemed immaterial to be recognised in the balance sheet as at 31 March 2025.

The Company’s other receivables mainly include interest receivable from the Company’s parent and other related parties in respect of the advances referred to previously. Since such balances are repayable on demand, expected credit losses are based on the assumption that repayment of the balance is demanded at the reporting date. Accordingly, the expected credit loss allowance attributable to such balances is insignificant.

Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company’s performance to developments affecting a particular industry.

The receivables from related parties present a potential concentration risk. These receivables are primarily from entities operating in the same industry and geographical location, which may expose the Company to heightened risks associated with economic fluctuations, industry-specific downturns, and regulatory changes.

Identified concentrations of credit risks are controlled and managed accordingly.

(b) Liquidity risk

The Company is exposed to liquidity risk in relation to meeting future obligations associated with its financial liabilities, which comprise principally the bonds issued to the general public and other payables (refer to Notes 8 and 9 respectively). Prudent liquidity risk management includes maintaining sufficient cash and liquid assets to ensure the availability of an adequate amount of funding to meet the Company’s obligations.

The Company’s liquidity risk is managed actively by ensuring that cash inflows arising from expected maturities of the Company’s advances to related parties effected out of the bond issue proceeds, together with any related interest receivable, match the cash outflows in respect of the Company’s bond borrowings, covering principal and interest payments, as referred to in Note 8 and reflected in the table below.

Notes to the financial statements - continued

2.Financial risk management - continued

2.1 Financial risk factors - continued

(b) Liquidity risk - continued

The following table analyses the Company’s financial liabilities into relevant maturity groupings based on the remaining year at the reporting date to the contractual maturity date. The amounts disclosed in the tables below are the contractual undiscounted future cash flows. Balances due within 12 months equal their carrying balances, as the impact of discounting is not significant.

Within 1 year

Between 1 and 2 years

Between 2 and 5 years

Over

5 years

Total

€

31 March 2025

Borrowings

2,827,500

67,827,500

70,655,000

Payables

29,810

2,857,310

67,827,500

70,684,810

31 March 2024

Borrowings

2,827,500

67,827,500

73,482,500

Payables

33,266

2,860,766

2,827,500

67,827,500

73,515,766

2.2 Capital risk management

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

The Company’s equity, as disclosed in the statement of financial position, constitutes its capital. The Company maintains its level of capital by reference to its financial obligations and commitments arising from operational requirements. Taking cognisance of the nature of the Company’s assets, backing the Company’s principal borrowings, the Capital level at the end of the reporting year is deemed adequate by the Directors.

2.3 Fair values of financial instruments

At 31 March 2025, the carrying amounts of cash at bank, receivables, payables and accrued expenses approximated their fair values due to the nature or short-term maturity of these instruments. The loans to parent and fellow subsidiaries have a fair value of approximately €60,757,363 as at 31 March 2025, compared to a carrying amount of €64,332,686. The fair values were calculated based on cash flows discounted using a current lending rate for similar instruments at the reporting date. They are classified as Level 3 fair values in the fair value hierarchy required by IFRS 7, ‘Financial instruments: Disclosures’ due to the inclusion of unobservable inputs including counterparty credit risk. Information on the fair value of the Company’s bonds issued to the general public is disclosed in Note 8 to the financial statements. The fair value estimate in this respect is deemed Level 1 as it constitutes a quoted price in an active market.

Notes to the financial statements - continued

3.Significant accounting estimates and judgments

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Use of available information and application of judgement are inherent in the formation of estimates. Actual results in the future could differ from such estimates and the differences may be material to the financial statements. These estimates are reviewed on a regular basis and, if a change is needed, it is accounted for in the year the changes are known.

Except for the below, in the opinion of the Directors, the accounting judgments, estimates and assumptions made in the course of preparing these financial statements are not difficult, subjective, or complex to a degree which would warrant their description as critical in terms of the requirements of IAS 1.

Provision for expected credit losses of loans receivable

The Company assesses the credit risk of loans receivable for significant increase since initial recognition at the reporting date. If there is a significant increase in credit risk, lifetime ECL is recognised. The principle of significant deterioration in credit risk is achieved by performing an assessment to compare the risk of default occurring at the reporting date with the risk of default occurring at the date of initial recognition, by reference to an analysis of the financial performance and position of related party borrowers. The assessment of ECLs is a significant estimate since the amount thereof is sensitive to changes in circumstances and of forecast economic conditions. As at 31 March 2025, the ECL was deemed immaterial to be recognised on the loans receivable.

4.Loans receivable

2025

2024

€

Non-current

Loan to parent

1,488,101

Loans to fellow subsidiaries

62,844,585

64,332,686

The loans receivable represents the proceeds from the bond issue (see Note 8) which have been advanced by the Company to SD Holdings Limited (the Company’s parent undertaking and guarantor of the bonds) and to Hotel San Antonio Limited and Seabank Hotel and Catering Limited (both fellow subsidiaries of the Issuer). The principal purposes for these advances were the re-financing of existing banking facilities of the respective borrower, the financing of the redemption of certain redeemable preference shares of Seabank Hotel and Catering Limited, and for the general corporate funding purposes of the db Group as the need arises in the ordinary course of business.

These loans are subject to interest at a fixed interest rate of 4.55% (2024: 4.55%), with an additional renewal fee, which is charged on the loans at a floating rate at the discretion of the Directors of the Issuer. As at the end of the reporting period, the element of the floating rate interest was 0.22% (2024: 0.23%). Renewal fees recognised as part of Finance income amounted to €142,131 (2024: €132,357) (see Note 10). The loans are unsecured and repayable by not later than 10 April 2027.

Notes to the financial statements - continued

5.Receivables

2025

2024

€

Current

Amounts owed by parent

1,632

4,757

Amounts owed by fellow subsidiaries

65,877

196,179

Prepayments

3,343

67,523

204,279

Amounts owed by parent and fellow subsidiaries pertains to accrued renewal fees which are repayable every 10th April of each year (see Note 16).

6.Cash and cash equivalents

For the purposes of the statement of cash flows, cash and cash equivalents comprise of the following:

2025

2024

€

Cash at bank

3,390,700

3,149,230

7.Share capital

2025

2024

€

Authorised

250,000 ordinary shares of €1 each

250,000

Issued and fully paid

250,000 ordinary shares of €1 each

250,000

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company’s residual assets.

8.Borrowings

2025

2024

€

Non-current

650,000 4.35% Bonds 2017-2027

64,890,518

64,780,119

Current

650,000 4.35% Bonds 2017-2027

(106,712)

(97,958)

Accrued interest payable

2,677,166

2,674,282

2,570,454

2,576,324

67,460,972

67,356,443

The current portion of the bonds represents unamortised bond issue costs which will be amortised in the next 12 months.

Notes to the financial statements – continued

8.Borrowings - continued

As of 31 March 2025, the comparative balances of the accrued interest payable have been reclassified as part of Borrowings under the current classification to conform with IFRS 9 amortised cost basis. This reclassification did not affect the total assets, total liabilities and total equity in the statement of financial position as of 31 March 2024.

The bonds are measured at the amount of the net proceeds adjusted for the amortisation of the difference between the net proceeds and the redemption value of such bonds, using the effective yield method as follows:

2025

2024

€

Original face value of bonds issued

65,000,000

Gross amount of bond issue costs

(924,036)

Accumulated amortization

707,842

606,197

Unamortised bond issue costs

(216,194)

(317,839)

Amortized cost and closing carrying amount of the bonds

64,783,806

64,682,161

By virtue of an offering memorandum dated 27 March 2017, the Company issued €65,000,000 bonds with a face value of €100 each. The bonds have a coupon interest of 4.35% which is payable annually in arrears, on 25 April of each year. The bonds are redeemable at par and are due for redemption on 25 April 2027. The bonds are guaranteed by SD Holdings Limited, which has bound itself jointly and severally liable with the issuer, for the repayment of the bonds and interest thereon, pursuant to and subject to the terms and conditions in the offering memorandum. There are no guarantee fees charged by SD Holdings Limited to the Company. The bonds were admitted on the Official List of the Malta Stock Exchange on 4 May 2017. The quoted market price as at 31 March 2025 for the bonds was €99.5 (2024: €99). The fair value of these financial liabilities as at 31 March 2025 amounts to €64,675,000 (2024: €64,350,000).

In accordance with the provisions of the prospectus, the proceeds from the bond issue have been advanced by the Company to related parties (refer to Note 4).

Notes to the financial statements - continued

9.Other payables and accruals

Amounts owed to fellow subsidiaries pertain to Director’s fees recharged by the Group (refer to Note 16).

As discussed in Note 8, the comparative balances of the accrued interest payable have been reclassified as part of Borrowings under the current classification to conform with IFRS 9 amortised cost basis. This reclassification did not affect the total assets, total liabilities and total equity in the statement of financial position as of 31 March 2024.

10.Finance income

11.Finance costs

2025

2024

€

Current

Other accruals

21,605

19,470

Amounts owed to fellow subsidiaries

4,593

10,557

Other payables

3,612

3,239

29,810

33,266

2025

2024

€

Interest income on loan advanced to parent:

Fixed interest income

67,708

Variable renewal fee

3,341

3,117

Interest income on loans advanced to fellow subsidiaries:

Fixed interest income

2,859,429

Variable renewal fee

138,790

129,240

3,069,268

3,059,494

2025

2024

€

Nominal interest on bonds

2,827,500

Amortization of bond issue costs

101,646

97,574

2,929,146

2,925,074

Notes to the financial statements - continued

12.Expenses by nature

Auditor’s fees

Fees charged by the auditor for services rendered during the financial years ended 31 March 2025 and 2024 relate to the following:

During the current year, fees in relation to non-assurance services amounting to €1,000 (2024: €1,000) have been charged by connected undertakings of the Company’s auditor, in respect of tax advisory and compliance services.

13.Directors’ emoluments

14.Tax expense

The tax on the Company’s profit before tax is the same as the theoretical amount that would arise using the basic tax rate as follows:

2025

2024

€

Directors’ fees (Note 13)

43,073

43,064

Listing and related compliance costs

46,909

46,710

Legal and professional fees

39,330

32,207

Other expenses

4,600

4,715

Total administrative expenses

133,912

126,696

2025

2024

€

Annual statutory audit

15,500

15,000

2025

2024

€

Directors’ fees

43,073

43,064

2025

2024

€

Current taxation

Current tax expense

2,174

2,703

2025

2024

€

Profit before tax

6,210

7,724

Tax on profit at 35%

2,174

2,703

Notes to the financial statements - continued

15.Net debt reconciliation

Net debt pertains to the Company’s borrowings which include the principal of the bonds net of unamortised bond issue costs and the related interest payable. Other than as disclosed in Note 8 ‘Borrowings’ with respect to the amortisation of bond issue costs and payment of interest, there were no further movements in the Company’s net debt.

16.Related parties

The Company forms part of the db Group of Companies. All companies forming part of the db Group are related parties since these companies are all ultimately owned by SD Holdings Limited.

Transactions with companies forming part of db Group principally include loans advanced during prior periods, as disclosed in Note 4 to the financial statements. Interest income and renewal fees earned from these loans, which are repayable every 10th April of each year, is disclosed in Note 10. Other year end balances with related parties are disclosed separately in Note 5 and Note 9 and such balances are unsecured, interest free and repayable on demand.

Part of the Director’s fees are being recharged to the Company by the Group and is paid to a fellow subsidiary (see Note 13). The Group also provides certain accounting and management services to the Company that is not being recharged to the Company.

Key management personnel comprises the Directors of the Company. Key management personnel compensation, consisting of remuneration to the Company’s Directors, has been disclosed in Note 13.

17.Subsequent events

There were no other events subsequent to year end which would require adjustment to or disclosure in the annual financial statements of the Company.

18.Statutory information

SD Finance plc is a limited liability company and is incorporated in Malta, with its registered address at Seabank Hotel, Marfa Road, Mellieha, MLH 9064, Malta.

The immediate and ultimate parent company of SD Finance plc is SD Holdings Limited, a company registered in Malta, with its registered address at db Seabank Resort & Spa, Marfa Road, Mellieha Bay, Mellieha, MLH 9064, Malta.

The ultimate beneficial owner of SD Holdings Limited is Silvio Debono and Veronica Debono.

Ernst & Young Malta Limited

Regional Business Centre

Achille Ferris Street

Msida MSD 1751, Malta

Tel: +356 2134 2134

Fax: +356 2133 0280

ey.malta@mt.ey.com

ey.com

A member firm of Ernst & Young Global Limited.

Registered in Malta No: C30252

INDEPENDENT AUDITOR’S REPORT

to the Shareholders of S.D. Finance plc

Report on the audit of the financial statements

Opinion

We have audited the financial statements of S.D. Finance plc (the “Company”), set on pages 10 to 28, which comprise the statement of financial position as at 31 March 2025, and the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policies information.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as at 31 March 2025, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU (“IFRS”), and the Companies Act, Cap. 386 of the Laws of Malta (the “Companies Act”).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) and the Companies Act. Our responsibilities under those standards and under the Companies Act are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) as issued by the International Ethics Standards Board of Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in accordance with the Accountancy Profession (Code of Ethics for Warrant Holders) Directive issued in terms of the Accountancy Profession Act, Cap. 281 of the Laws of Malta, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

A member firm of Ernst & Young Global Limited.

Registered in Malta No: C30252

INDEPENDENT AUDITOR’S REPORT

to the Shareholders of S.D. Finance plc

Report on the audit of the financial statements - continued

Key audit matters incorporating the most significant risks of material misstatements, including assessed risk of material misstatements due to fraud

Key audit matters are those matters that, in our professional judgment, 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. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.

Recoverability of loans receivable from related parties

The loans receivable represent advances to SD Holdings Limited (the Parent of the Company and the Guarantor of the bonds issued by the Company) amounting to Eur1.5m and to Seabank Hotel and Catering Limited and Hotel San Antonio Limited (fellow subsidiaries) amounting to Eur62.8m.

As disclosed in Note 1.3.5 and Note 3 to the financial statements, the Company assesses whether the loans receivable are impaired at each reporting date.

Reasons for designation as a KAM

The loans receivable which were financed through the bond issue are the primary asset of the Company, comprising 95% of the total assets of the Company.

Audit procedures

Our audit procedures over the recoverability of loans receivable from related parties included amongst others:

Obtaining and agreeing the salient terms and conditions to the underlying loan agreements supporting the loans receivable from the Company’s parent and from fellow subsidiaries;

Assessing the reasonableness of key assumptions and considerations in assessing the recoverability of loans receivable including amongst others analysis of the latest financial information of the borrowers and the cashflow forecasts prepared by management;

Assessing the relevance and adequacy of disclosures relating to the Company’s recoverability of loans receivable from related partes presented in Note 1.3.5 and Note 3 to the financial statements.

A member firm of Ernst & Young Global Limited.

Registered in Malta No: C30252

INDEPENDENT AUDITOR’S REPORT

to the Shareholders of S.D. Finance plc

Report on the audit of the financial statements - continued

Other information

The Directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the 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 other than our reporting on other legal and regulatory requirements.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, 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.

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

The Directors are responsible for the preparation and fair presentation of the financial statements in accordance with IFRS and the requirements of the Companies Act and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

A member firm of Ernst & Young Global Limited.

Registered in Malta No: C30252

INDEPENDENT AUDITOR’S REPORT

to the Shareholders of S.D. Finance plc

Report on the audit of the financial statements - continued

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

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

evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors;

conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern;

evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation;

A member firm of Ernst & Young Global Limited.

Registered in Malta No: C30252

INDEPENDENT AUDITOR’S REPORT

to the Shareholders of S.D. Finance 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 to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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

A member firm of Ernst & Young Global Limited.

Registered in Malta No: C30252

INDEPENDENT AUDITOR’S REPORT

to the Shareholders of S.D. Finance plc

Report on other legal and regulatory requirements

Matters on which we are required to report by the Companies Act

Directors’ report

We are required to express an opinion as to whether the Directors’ report has been prepared in accordance with the applicable legal requirements. In our opinion the Directors’ report has been prepared in accordance with the Companies Act.

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

Other requirements

We also have responsibilities under the Companies Act to report if in our opinion:

proper accounting records have not been kept;

the financial statements are not in agreement with the accounting records and returns;

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

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

Appointment

We were appointed as the statutory auditor on 29 October 2024. The total uninterrupted engagement period as statutory auditor, including renewals and reappointments amounts to two years.

Consistency with the additional report to the audit committee

Our audit opinion on the financial statements expressed herein is consistent with the additional report to the audit committee of the Company which was issued on the same date as this report.

Non-audit services

No prohibited non-audit services referred to in Article 18A(1) of the Accountancy Profession Act, Cap. 281 of the Laws of Malta were provided by us to the Company and we remain independent of the Company as described in the Basis for opinion section of our report.

No other services besides statutory audit services and services disclosed in the annual report and in the financial statements, were provided by us to the Company.

A member firm of Ernst & Young Global Limited.

Registered in Malta No: C30252

INDEPENDENT AUDITOR’S REPORT

to the Shareholders of S.D. Finance plc

Report on other legal and regulatory requirements - continued

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 the Company for the year ended 31 March 2025, 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 financial statements, by reference to Capital Markets Rule 5.56A, in accordance with the requirements of the ESEF RTS.

Our responsibilities

Our responsibility is to obtain reasonable assurance about whether the annual financial report, including the financial statements, 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 XHTML format.

•Examining whether the annual financial report has been prepared in XHTML format.

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

Opinion

In our opinion, the annual financial report for the year ended 31 March 2025 has been prepared in XHTML format in all material respects.

A member firm of Ernst & Young Global Limited.

Registered in Malta No: C30252

INDEPENDENT AUDITOR’S REPORT

to the Shareholders of S.D. Finance plc

Report on other legal and regulatory requirements

Matters on which we are required to report by the Capital Markets Rules

Corporate governance statement

The Capital Markets Rules issued by the Malta Financial Services Authority (“MFSA”) require the Directors to prepare and include in their annual report a statement of compliance providing an explanation of the extent to which they have adopted the Code of Principles of Good Corporate Governance and the effective measures that they have taken to ensure compliance throughout the accounting period with those Principles.

The Capital Markets Rules also require the auditor to include a report on the statement of compliance prepared by the Directors. We are also required to express an opinion as to whether, in the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have identified material misstatements with respect to the information referred to in Capital Markets Rules 5.97.4 and 5.97.5.

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

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

In our opinion:

the corporate governance statement set out on pages 6 to 9 has been properly prepared in accordance with the requirements of the Capital Markets Rules issued by the MFSA

in the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit the information referred to in Capital Markets Rules 5.97.4 and 5.97.5 are free from material misstatement

A member firm of Ernst & Young Global Limited.

Registered in Malta No: C30252

INDEPENDENT AUDITOR’S REPORT

to the Shareholders of S.D. Finance plc

Other requirements

Under the Capital Markets Rules, we also have the responsibility to review the statement made by the Directors, set out on page 4, 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.

The partner in charge of the audit resulting in this independent auditor’s report is

Christopher Portelli for and on behalf of

Ernst & Young Malta Limited

Certified Public Accountants

28 July 2025