Company Registration No. C 56012
Annual Report
and
Consolidated Financial Statements
31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
1
CONTENTS
Pages
General information 2
Directors’ report 3 - 8
Remuneration report and statement of the Directors 9 - 11
Statement by the Directors on Compliance with the Code of Principles of
Good Corporate Governance 12 - 19
Statement of comprehensive income 20
Statement of financial position 21
Statement of changes in equity 22
Statement of cash flows 23
Notes to the consolidated financial statements 24 - 46
Independent auditors’ report 47 - 53
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
2
GENERAL INFORMATION
Registration
VBL Plc is registered in Malta publ ic limited liability comp any under the Companies Act (Cap. 386). The
company’s registration number is C 56012. Since l ast publication , there were no chang es to the name o f the
Place of domiciliation
Malta
Principal place of business
Malta
Directors
Dr. Andrei Imbroll
Dr. Geza Szephalmi
Mr. Julian Tzvetkov
Mr. Arthur Haze
Mr. David Galea Souchet
Ms. Isabella Vella
Dr. Csaba Bato (retired on 20 April 2022)
Company secretaries
Dr. Joe Borg Bartolo and Dr. Mikiel Calleja (appointed on 1 March 2022)
Dr. David Meli (resigned on 1 March 2022)
Registered office
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 Report and Consolidated Financial Statements - 31 December 2022
3
DIRECTORS’ REPORT
The Directors present their annual report and the audited consolidated financial statements of VBL Plc (“the
Company”) and its subsidiaries (together, “the Group” or the “VBL Gro up
Review of Business Development and Financial Position of the Financial Year 2022
The financial performance of the Group has remained stable and has shown fast recovery from the previous
years, which were significantly impacted by the implications of the uncertainty of COVID-19 restrictions and
limitations. In the first 4 months of the reporting year, the operations were still impacted by restricted travel and
other government restrictions impacting operations, however, once these were removed, a fast recovery in all
areas of operations was realised. During the reporting period, the Group managed to increase significantly its
rental revenues compared to the previous year, resulting in more than doubling 2021 revenues, whilst both the
operational profitability and EBITDA volume have also shown significant growth. The Group’s operations were
still dependent on overall market trends, such as airline seat capacity limitations, consumer prices, services
inflation and labour market supply challenges.
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
4
DIRECTORS’ REPORT - continued
Review of Business Development and Financial Position of the Financial Year 2022 - continued
During the reporting period, the Group has remained successful in terms of consolidation of the Valletta hospitality
market adding new 3rd party managed units to its hospitality operations. The Group has retained focus on its
core market, by restructuring its acquisitions and asset base. The Group has continued its expansion into the
hotel management segment in 2022, as continuous demand from owners of smaller establishments is ever
increasing.
In the reporting period, the Group has concluded and obtained ownership and possession of a new landmark
asset, the Coliseum Shopping Arcade (also known as “the Coliseum") together with overlaying property, which
has resulted in significant increase in the value of Investment Property.
In the last quarter of 2022, the Group has obtained a long-term bank financing facility, structured to meet the
development financing needs and tailored to the Group’s cash-flow generation ability, and thus allowing the VBL
to enter its most intense development phase since inception.
The core activity and the most significant value driver for the VBL 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 under the total revenues,
which in the reporting period has reached €6,874,185 (2021: €6,342,211), representing a 8% growth.
Overall, the financial performance of the Group resulted in consolidated revenues of €2,316,112
(2021: €1,063,113) and a consolidated EBITDA of €7,132,976 (2021: €6,517,684). EBITDA adjusted to reflect
operations shows an increase of 47% in the reporting period amounting to €258,791 (2021: €175,473) and profit
after tax on the Group’s activities for the year amounted to €6,323,035 after tax (2021: €5,791,177).
ACTUAL
ACTUAL
VARIANCE
Jan - Dec
Jan - Dec
2022 ACTUAL VS 2021
ACTUAL
2022
2021
€
€
€
%
Revenue
2,316,112
1,063,113
1,252,999
118%
Investment Income
6,874,185
6,342,211
531,974
8%
Cost of Sales
(1,168,215)
(511,643)
(656,572)
128%
Gross Profit/(Loss)
8,022,082
6,893,681
1,128,401
16%
GOP Margin
87%
93%
(6%)
Other Operating Income
8,230
174,483
(166,253)
(95%)
Total Operating Costs
(897,336)
(550,480)
(346,856)
63%
EBITDA
7,132,976
6,517,684
615,292
9%
EBITDA Margin
78%
88%
(10%)
EBITDA (Operational)
258,791
175,473
83,318
47%
EBITDA Margin (Operational)
11%
17%
(6%)
Notes
(1) Operational EBITDA and Operational EBITDA margin is calculated without investment income.
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
5
DIRECTORS’ REPORT - continued
Dividends and Reserves
A final dividend of €180,000 is proposed by the Directors for the year 2022, which corresponds to 0.0726 Euro
Cents per share dividend. A total dividend of €160,000 was distributed to the shareholders for the year ended 31
December 2021 (corresponding to 0.065 Euro Cents per share).
Listed Company Status and New Share Issue
VBL Plc., as the principal company of the VBL Group, is a listed entity at the Malta Stock Exchange (“MSE”). In
the reporting year, there was a new share issue of 3,571,428 shares allocated as non-cash consideration for the
acquisition of an investment property.
As at 31 December 2022, 100% of the Group’s equity and issued share capital is listed on the MSE, with total
number of shares in issue standing at 248,042,645. All shares of the Group are ordinary shares, with nominal
value of €0.20 cents each, and have the same shareholders’ rights.
The authorised share capital of the Group remains unchanged at €66,000,000.
Events After the End of Reporting Period
There were no specific materially important events affecting the Group’s long-term outlooks which occurred since
the end of the accounting year. The long-term effects however of the current global economic situation, war in
Ukraine, post-pandemic effects and related local and global restrictions might have a continuing impact on the
VBL Group’s business recovery to pre-pandemic levels in the course of year 2023.
Future Developments
The VBL Group plans to continue its dynamic growth by implementing its announced development programme
of its owned assets that have full development permits in hand, as well as improve further the utilisation of
developed assets in line with its long-term business strategy and financial plans.
Going Concern Statement Pursuant to Capital Markets Rule 5.62
Currently, the Directors are of the opinion that the global and local market trends deliver a turbulent short- and
mid-term forecast. The Group’s financial performance will benefit 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 long-term growth. The Group is on the path of quick recovery from the short-term impact of the pandemic
related restrictions and consecutive operational interruptions, while it is assumed that the general economic
environment will stabilise in mid to long term and the Group’s results will keep on following this trend.
The currently ongoing development projects are expected to continue as communicated, subject to the current
known market and economic factors remaining constant or improved.
The current relatively low level of the Group’s total debt compared to the Group’s (total) assets and the existence
of unencumbered properties 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 present new opportunities, which the VBL Group plans
to continue to explore, to further enhance its core product together with maintaining its very clear strategy and
unique market focus.
Directors expect that the Group will not face a going concern issue due to current market conditions on the local
or international landscape.
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
6
DIRECTORS’ REPORT - continued
Principal Risks and Uncertainties
The key risk factors VBL 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 relating to the change of interest rates and the conditions of financing deriving from the overall
global economy, local financial market, European inflationary environment, and Euro-based
interest rates and
(v) risks relating to the general business and operations of the Group. The latter 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 Group’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 of the Group.
Board of Directors
The Board of Directors of the Group currently consists of the following Directors:
Dr. Andrei Imbroll, Chairman and Executive Director
Dr. Geza Szephalmi, Executive Director
Mr. Julian Tzvetkov, Executive Director
Ms. Isabella Vella, Non-Executive Director, Chairperson of the Audit Committee
Mr. Arthur Haze, Non-Executive Director, Member of the Audit Committee
Mr. David Galea Souchet, Non-Executive Director, Member of the Audit Committee
Dr. Csaba Bato, formerly a Non-Executive Director and Chairperson of the Audit Committee has retired from
this position at the annual general meeting, held on the 20th April 2022.
Under the provisions of the Group’s Memorandum and Articles of Association, the appointment of directors
happens at the Group’s general meeting.
Auditors
A proposal will be submitted to the Annual General Meeting to re-appoint RSM Malta as Auditor to the Group for
year 2023 and to set their remuneration for the period.
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
7
DIRECTORS’ REPORT - continued
Statement of directors’ responsibilities
The Companies Act (Cap. 386), enacted in Malta, 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 required to:
▪ adopt the going concern basis unless it is inappropriate to presume that the Group will continue in business;
▪ select suitable accounting policies and apply them consistently;
▪ make judgements and estimates that are reasonable and prudent;
▪ account for income and charges relating to the accounting period on accrual basis;
▪ value separately the components of asset and liability items;
▪ report comparative figures corresponding to those of the preceding accounting period; and
▪ prepare the consolidated financial statements in accordance with generally accepted accounting principles
as defined in the Companies Act (Cap. 386) and in accordance with the provision of the same Act.
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 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.
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 248,042,645 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
Raniark Limited
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.
Shareholders holding 10% or more direct shareholding are locked-in from trading with their shares for a period of
24 months from the date of Listing, as this is described in detail and defined in the Prospectus published by the
Group, dated 23 July 2021.
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
8
DIRECTORS’ REPORT - continued
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 under the general business and ethical
standards applied by peer companies, globally.
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, details
of which have been published in Section 4.5 of the Registration Document (Prospectus), published by the Group
on the 23 July 2021.
Company Secretary and Registered Office of the Company Pursuant to Capital Markets Rule 5.70.2
Dr. Joe 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 Report are prepared in accordance with the requirements of International Financial Reporting Standards
as adopted by the European Union and 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.
Explanatory Note to the Special Business Proposed to the Annual General Meeting of the Company
Proposed Ordinary Resolution – Special Business – Indemnification of the Directors and Senior
Management
Text of the Ordinary Resolution:
“It is hereby approved to indemnify the members of the Board of Directors and Senior Management of the
Company 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 Company, or any of its associated companies, subsidiaries
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”.
Explanatory Note: The purpose of this resolution is to obtain shareholder approval in order to allow for an
indemnity to be provided by the Company to directors and senior management of the Company. This results in
the said person/s being protected (within the limits of the law) for any liabilities and expenses that may arise as a
result of their duties being exercised for and on behalf of the Company or associated companies, subsidiaries or
affiliates.
Signed on behalf of the Group’s Board of Directors on 21 April 2023 by Dr. Andrei Imbroll (Director, Chairman
of the Board) and Dr. Geza Szephalmi (Director) asper the Directors’ Declaration on ESEF Annual Financial
Report submitted in conjunction with the Annual Report and Consolidated Financial Statements.
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
9
REMUNERATION REPORT AND STATEMENT OF THE DIRECTORS
In line with the Capital Markets Rules (“Rules”), as set out in Chapter 12 of the Rules, the Company is subject to
drawing up a Remuneration Report in line with the requirements as detailed in the Appendix 12.1 of the Chapter
12, providing an overview of the remuneration to directors of the Company.
The Company 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
Report with the details of the remuneration policy of the Company and the remuneration of the Directors.
In terms of the effective Remuneration Policy of the Company (“Remuneration Policy”), and the principles
presented in the Company’s IPO Listing Prospectus dated 23
rd
July 2021, and in alignment and compliance with
the MFSA Guidelines
1
, the Board has reviewed the principles and the relevant guidelines and has concluded that
based on the assessment made of the size, the internal organisation, and the nature, scope and complexity of
the activities of the Company, 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
Company, the Company does not require a separate Remuneration Committee to be set-up and the
responsibilities attributed to overseeing the Remuneration Policy of the Company 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 as per the relevant regulations. In line with the relevant Rules, the
existing Remuneration Policy of the Company has been presented to the Shareholders, and approved on the 20
th
April 2022. In the reporting period there were no changes to the Remuneration Policy.
In accordance with the Code provisions 8.A.4.7, the following contracts are in place with each Director, with the
following terms, based on which the received fixed remuneration of each director is as per below:
Name of Director
Contract type
Signed / Valid
Annual fee in 2022
Dr. Andrei Imbroll
Director Service Agreement
14 Jan, 2021
Until the Director is in office
€10,000 gross
Dr. Geza Szephalmi
Director Service Agreement
14 Jan, 2021
Until the Director is in office
€10,000 gross
Mr. Julian Tzvetkov
Director Service Agreement
14 Jan, 2021
Until the Director is in office
€10,000 gross
Mr. Arthur Haze
Director Service Agreement
14 Jan, 2021
Until the Director is in office
€10,000 gross
Mr. David Galea Souchet
Director Service Agreement
14 Jan, 2021
Until the Director is in office
€10,000 gross
Ms. Isabella Vella
Director Service Agreement
14 Jan, 2021
Until the Director is in office
€10,000 gross
The foregoing amounts are all fixed remuneration. There are no variable remuneration considerations nor share
options. Remuneration paid to Directors is not performance-related.
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 20 April 2022,
approved the aggregate total annual remuneration of the Board of Directors, set the directors’ fee for one year at
a total of €70,000.
1
https://www.mfsa.mt/wp-content/uploads/2019/02/Code-of-Principles-of-Good-Corporate-Governance-for-Listed-
Entities.pdf, Code provisions 8.A.2
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
10
REMUNERATION REPORT AND STATEMENT OF THE DIRECTORS – continued
Remuneration related to the Directors, in accordance with the Remuneration Policy - continued
Directors’ Fee - continued
The Company being listed in October 2021, the reporting period ending 31 December 2022 is the first full year
since listing. The directors’ fee is a fixed fee and there has been no change in the individual directors’
remuneration with regards to the fixed fee in the reporting period. There are no variable remuneration
considerations nor share options payable under the directors’ agreements executed.
The total directors’ fees paid during the financial year 2022 to the Board of Directors was €65,000. According to
the existing Policy, the Directors are not entitled to other remuneration or benefits related to their directors’
position within the Company from any parent or sister company in their capacity as directors. Under the disclosure
requirements pursuant to Capital Market Rules 8.A.5., it is hereby reported that the Directors of the Company
have not been granted any shares or shares options, pension benefits, termination payments, annual bonus
schemes and similar, from the Company in the reporting period.
After an assessment of the market conditions and the particularities of the Company, the Directors have
concluded that the remuneration of the Board of Directors of the Company 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 Company considers that the total remuneration paid to Directors contributes
towards the long-term performance of the Company as it incentivises and promotes their commitment towards
achieving the best interests of the Company.
Since the current period is the first reporting period following the adoption of the Remuneration Policy by the
Company’s annual general meeting in 2022, the comparative analysis required by Appendix 12.2 of the Capital
Markets Rules paragraph (b) cannot be presented to the shareholders yet.
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 Company;
- 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
Executive management services are provided to the Company under a management agreement, with a dedicated
management company, which remains unchanged to the previous reporting period and has been introduced in
detail in the Listing Prospectus dated 27
th
July 2021 and further disclosed below.
Since its foundation, the VBL Group has been managed by a dedicated management company, VBLM Ltd
(“VBLM”). As declared before and presented in the Listing Prospectus, 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 VBL Group.
The provision of management services by VBLM to the VBL Group is based on the existing and established
practice 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.
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
11
REMUNERATION REPORT AND STATEMENT OF THE DIRECTORS - continued
Executive Management and Services - continued
The remuneration payable by the Company 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 Company, 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 Company.
The Management Services Agreement is aimed at ensuring that the senior Executive Management team, which
has steered VBL in attaining successful growth and development since the inception of the VBL Group 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 Company, are aligned with the Shareholders’ and Company’s
interests and remains fully committed to deliver the strategic objectives of the Company 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 Company and the VBL Group, supporting the continuation and evolvement of its existing well-
established structure, and to further implement the Company’s business strategy and growth, while mitigating
risks associated with key personnel and senior management. The current Management Services Agreement is
effective as from 1st January 2021 and is valid for period of three years. This agreement may be extended
thereafter, subject to agreement between the parties.
For the purposes of the Remuneration Statement and in accordance with the Capital Market Rule provision 8.A.5
and for the purposes of provisions 8.4.8 and 8.4.9., in accordance with the disclosures made in the Prospectus,
and based on the Management Services Agreement, during 2022, the total emoluments paid by the Company
were a fixed fee paid to VBLM for the executive, operational and strategic management and other services
provided to the Company of €400,000 exclusive of VAT. No variable fee has been paid in the reporting period,
nor any shares or shares options granted or due, no pension benefits, no other termination payments or similar
are due from the Company in the reporting period.
Other than the directors’ fee and the management services fee, the Company does not provide any other pay,
remuneration or alike to its directors for their services. Any changes to the terms of the Management Services
Agreement are subject to the vetting and approval of the Audit Committee and the non-executive directors of the
Company.
In terms of Chapter 12, the contents of the remuneration report have been checked by the Auditors of the
Company.
Signed on behalf of the Group’s Board of Directors on 21 April 2023 by Dr. Andrei Imbroll (Director, Chairman
of the Board) and Dr. Geza Szephalmi (Director) asper the Directors’ Declaration on ESEF Annual Financial
Report submitted in conjunction with the Annual Report and Consolidated Financial Statements.
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
12
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 (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 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 originally 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. Following the annual general meeting the number of directors
was six, with one non-executive director not continuing in office;
4. Members of the Board of Directors are all seasoned professionals, with significant local and international
professional track record and proven experience in applying the highest level of corporate governance
standards, 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, previously consisting of four
(4) members. In the reporting year, following the annual general meeting, the Audit Committee members
were three (3). 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;
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 market and the rules by which the
Group is regulated as a listed Group. 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. 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
environmentally responsible practices, in line with Code Provision 12;
11. Pursuant to the Group's statutory obligations, the annual report and financial statements, declaration of
dividends, election of directors and appointment of auditors and authorisation of the directors to set the
auditors' 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.
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
13
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Specific Corporate Governance principles
The Group, its Directors, its Management and Employees believe that good corporate governance is a key
element for business success and supporting the integrity and efficiency of the Group and its Subsidiaries,
operations and long-term success. VBL is committed to establishing, maintaining and following strong corporate
governance principles 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 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 VBL’s governing bodies are:
i. Fairness - Fair and ethical behaviour in all dealings is fundamental to the success of VBL’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, VBL 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 VBL 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 VBL 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 Report and Consolidated Financial Statements - 31 December 2022
14
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 six directors, of which three 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.
The Board of Directors of the Group consists of the following persons:
Name
Designation
Andrei Imbroll
Chairman and Executive Director
Geza Szephalmi
Chief Executive Officer and Executive Director
Julian Tzvetkov
Chief Operating Officer and Executive Director
Isabella Vella
Independent non-executive Director and member of
the Audit Committee, Chairperson
Artur Haze
Non-executive Director, member of the Audit
Committee
David Galea Souchet
Independent, Non-executive Director, member of the
Audit Committee
Dr Csaba Bato acted as a non-executive director of the Group as well as Chairperson of the Audit Committee
until 20 April 2022, when he had retired and ceased to be a member of the Board of Directors.
At the end of the reporting period, the Secretaries appointed are Dr Joe Borg Bartolo and Dr Mikiel Calleja.
Board Meetings
During the year 2022, there have been 5 (five) Board meetings held in person and several decision by written
resolution. The number of Board members has reduced in number from seven to six as of 20 April 2022.
The number of Board meetings attended by Directors for the year under review is as follows:
Members Attended
Andrei Imbroll 5
Geza Szephalmi 5
Julian Tzvetkov 5
Artur Haze 5
David Galea Souchet 5
Isabella Vella 5
Csaba Bato 2 (retired from Board on 20 April 2022)
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
15
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Information and Professional Development
The Group ensures that it provides its Directors with relevant information to enable them effectively contribute to
board decisions. The Group is committed to provide adequate and detailed information to its Directors who are
newly appointed to the Board. The Group pledges to make available to the Directors all information as required.
Appointment and Removal of Directors
The Directors of the Group are appointed 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. Such notice may
be given by the publication of an advertisement in at least two daily newspapers. 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 Office 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 resigns from the office of director; or
- if he violates in a proven way the declaration of secrecy required of him under the Articles and the Board
of Directors pass a resolution that he has so violated the declaration of secrecy; or
- if he is prohibited by or under any law from being a director;
- if he 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 executive functions relating to the Group to members of the
Group’s management.
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.
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
16
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Evaluation of the Board’s Performance
The Board 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 AGM.
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.
At the time of the current reporting year under review, the Directors are each entitled to a gross annual
remuneration of €10,000 from the date of the appointment.
Executive Directors
The Executive Directors 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, provided that no
proceedings may be instituted by the Group without the approval of the Board of Directors of the Group.
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. In the
current reporting period, Dr Geza Szephalmi continued to occupy the post of CEO of the Group.
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 CEO and the executive management are functions which are provided under the Management
Services Agreement with VBLM, as it has been detailed in this report and the Listing Prospectus of the Group
dated 23 July 2021.
The CEO is responsible for the Group’s operative management and direction in accordance with the Articles, the
resolutions adopted by the general meeting and the Board of Directors. The CEO has the right to decide on the
Group’s organisational structure and internal rules and regulations according to the Articles of the Group.
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
17
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Declaration
None of the Directors, members of the board committees or members of management have, in the last five
years:
i. been the subject of any convictions in relation to fraudulent offences;
ii. 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;
iii. been the subject of any official public incrimination and/or sanctions by statutory or regulatory
authorities (including designated professional bodies);
iv. 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.
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, financial policies and internal control structure. The first Audit Committee of the
Group was established by the Annual General Meeting of the Shareholders held on 23 March 2021, and the
members have been elected among the Board members, as defined in the Articles and relevant regulation. The
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.
The Audit Committee is composed of three members - Ms Isabella Vella (Chairperson), Mr Artur Haze, and Mr
David Galea Souchet. Mr Artur Haze and Mr David Galea Souchet 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 regulations. 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 also oversees the conduct of the annual financial audit and facilities communication between the
Group’s Board, management and appointed auditors.
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;
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
18
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Audit Committee - continued
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 auditors 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
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 2022, the Audit Committee met 7 times in person or via video conference, out which on 3 meetings were
with 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
Csaba Bato 4 (retired from Board on 20 April 2022)
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.
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
19
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Executive Management Committee (EMC)
The Executive Management Committee consists of the CEO, the Executive Board Members and any other
managers of the Group appointed by the CEO to the EMC.
The EMC 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 is responsible to, and reports to
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. In this
respect, over and above the statutory and regulatory requirements relating to the Annual General Meeting, the
publication of consolidated 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.
Since the Group was listed on the Malta Stock Exchange in 2021, the required financial reports and Group
announcements are regularly issued and published through the Malta Stock Exchange, at 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 required disclosures in case of such dealings. Related party contracts and dealings
are disclosed regularly as required by the applicable rules and presented in the Annual Financial Statements as
well.
Signed on behalf of the Group’s Board of Directors on 21 April 2023 by Dr. Andrei Imbroll (Director, Chairman
of the Board) and Dr. Geza Szephalmi (Director) as per the Directors’ Declaration on ESEF Annual Financial
Report submitted in conjunction with the Annual Report and Consolidated Financial Statements.
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
20
STATEMENT OF COMPREHENSIVE INCOME
2022
2021
Notes
€
€
Revenue
3
Investment income
5
Cost of sales
8
(1,168,215 )
(511,643 )
Gross profit
Other operating income
4
Administrative expenses
8
(897,336 )
(550,480 )
Earnings before interest, tax, depreciation and amortisation
Depreciation and amortisation
8
(280,459 )
(300,894 )
Operating income
Interest income
6
Impairment on inventory
8
(65,618 )
Finance costs
7
(190,446 )
(138,286 )
Profit before income tax
Income tax expense
9
(280,502 )
(290,626 )
Profit for the year
Total comprehensive income for the year
Earnings per share
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
21
STATEMENT OF FINANCIAL POSITION
2022
2021
Notes
€
€
ASSETS
Non-current assets
Intangible assets
12
Property, plant and equipment
13
Investment properties
14
Investment in a subsidiary
15
Loans receivable
Deferred tax assets
10
Current assets
Non-current asset held for sale
16
Inventory
17
Current tax receivable
Trade and other receivables
18
Cash and cash equivalents
19
TOTAL ASSETS
EQUITY AND LIABILITIES
Capital and reserves
Share capital
Share premium
Other reserves
20
General reserves
20
Retained earnings
20
TOTAL EQUITY
Non-current liabilities
Borrowings
21
Lease liabilities
22
Deferred tax liability
11
Trade and other payables
23
Current liabilities
Borrowings
21
Lease liabilities
22
Trade and other payables
23
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
Signed on behalf of the Group’s Board of Directors on 21 April 2023 by Dr. Andrei Imbroll (Director, Chairman
of the Board) and Dr. Geza Szephalmi (Director) as per the Directors’ Declaration on ESEF Annual Financial
Report submitted in conjunction with the Annual Report and Consolidated Financial Statements.
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
22
STATEMENT OF CHANGES IN EQUITY
Share
capital
Share
premium
Other
reserves
General
reserves
Retained
earnings
Total
€
€
€
€
€
€
Balance at 1 January 2021
Total comprehensive income
- Profit for the year
Transactions with owners
- Issuance of shares
- Conversion of borrowings to shares
- Dividends declared during the period (Note 20)
(150,000 )
(150,000 )
(150,000 )
Transfer from revaluation reserve to retained
earnings, net of deferred tax
(22,751 )
Balance at 31 December 2021
Balance at 1 January 2022
Total comprehensive income
- Profit for the year
Transactions with owners
- Issuance of shares
- Dividends declared during the period (Note 20)
(160,000 )
(160,000 )
(160,000 )
Transfer from revaluation reserve to retained
earnings, net of deferred tax
(22,751 )
Balance at 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
23
STATEMENT OF CASH FLOWS
2022
2021
Notes
€
€
Cash flows from operating activities
Profit before tax
Depreciation and amortisation
8
Provision for expected credit losses
18
Investment income
5
(6,874,185 )
(6,342,211 )
Impairment on inventory
8
Gain on disposal of subsidiary
4
(174,483 )
Interest income
6
(7,084 )
(3,299 )
Interest expense
7
Cash generated before working capital changes
Increase in inventories
(271,176 )
Increase in trade and other receivables
(22,225 )
(1,136,762 )
Increase in trade and other payables
Net cash generated/(used in) operating activities
(919,475 )
Cash flows from investing activities
Purchase of intangible assets
12
(150,000 )
Purchase of property, plant and equipment
13
(14,664 )
(43,864 )
Proceeds from sale of investment
Proceeds from sale of investment property
14
Acquisition of investment properties
14
(6,278,086 )
(174,630 )
Acquisition of a subsidiary
(66,517 )
Movement in loans receivable
(104,171 )
Net cash used in investing activities
(5,442,750 )
(339,182 )
Cash flows from financing activities
Net proceeds from issuance of share capital
Interest paid
(170,214 )
(80,790 )
Withholding tax paid
9
(8,000 )
Dividends paid
(160,000 )
(150,000 )
Movement in borrowings
Payment of lease liabilities
22
(31,675 )
(31,555 )
Net cash generated from financing activities
Net (decrease)/increase in cash and cash equivalents
(600,444 )
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at end of year
19
Significant non-cash transactions
During the year ended 31 December 2022, the Group issued 3,571,428 €0.20 par value ordinary shares at €0.28 each
amounting to €999,999 as non-cash consideration for the acquisition of an investment property.
During the year ended 31 December 2021, the convertible loans paid to the Group in cash before the listing, amounting to
€1,815,000, and the interest accrued thereon amounting to €36,575, were converted into ordinary shares in accordance with
the original loan agreements, as described in the Prospectus dated 23 July 2021.
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
24
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
VBL Plc
Annual Report and Consolidated Financial Statements - 31 December 2022
47
INDEPENDENT AUDITORS’ 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 20 - 46, which comprise the consolidated
statement of financial position as at 31 December 2022, 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 significant accounting
policies.
In our opinion, the consolidated financial statements give a true and fair view of the financial position of
the Group as at 31 December 2022, and of the Group’s financial performance and cash flows for the
year then ended in accordance with International Financial Reporting Standards (IFRS) as adopted by
the European Union (EU), and have been properly prepared in accordance with the requirements of the
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 Auditors’ 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 8 to these consolidated
financial statements.
48
INDEPENDENT AUDITORS’ REPORT - continued
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 €73,663,640 as at 31 December 2022.
Further detail is included in Note 14 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 14 to these consolidated financial
statements and concluded that these are adequate.
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INDEPENDENT AUDITORS’ REPORT - continued
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 by the directors on compliance with
the Code of Principles of Good Corporate Governance. Our opinion on the financial statements does
not cover the other information.
In connection with our audit of the 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 auditors’ 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 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 Companies Act (Cap. 386);
• the information given in the directors’ report for the financial year on which the financial statements
are had been prepared is consistent with the 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 as adopted by the EU and the requirements of the 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.
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INDEPENDENT AUDITORS’ REPORT - continued
Report on the Audit of the Consolidated Financial Statements - continued
Auditors’ 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 auditors’
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 ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’
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 auditors’ 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.
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INDEPENDENT AUDITORS’ REPORT - continued
Report on the Audit of the Financial Statements - continued
Auditors’ Responsibilities for the Audit of the Financial Statements - continued
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors 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 our auditors’ 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 Markets Rules issued by the Malta Financial Services Authority require the directors to
prepare and include in their Annual Report a Statement of Compliance providing an explanation of the
extent to which they have adopted the Code of Principles of Good Corporate Governance and the
effective measures that they have taken to ensure compliance throughout the accounting period with
those Principles. The Capital Markets Rules also require the auditor to include a report on the Statement
of Compliance prepared by the directors.
We read the Statement of Compliance and consider the implications for our report if we become aware
of any apparent misstatements or material inconsistencies with the consolidated financial statements
included in the Annual Report. Our responsibilities do not extend to considering whether this statement
is consistent with any other information included in the Annual Report.
We are not required to, and we do not, consider whether the Board’s statements on internal control
included in the Statement of Compliance cover all risks and controls, or form an opinion on the
effectiveness of the Company's corporate governance procedures or its risk and control procedures. In
our opinion, the Statement of Compliance with the Principles of Good Corporate Governance set out on
pages 12 – 19 has been properly prepared in accordance with the requirements of the Capital Markets
Rules issued by the Malta Financial Services Authority.
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INDEPENDENT AUDITORS’ REPORT - continued
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 2022, entirely
prepared in a single electronic reporting format.
Responsibilities of the directors
The directors are responsible for the preparation of the annual financial report, including the
consolidated financial statements, by reference to Capital Markets Rule 5.56A, in accordance with the
requirements of the ESEF RTS.
Auditors’ responsibilities
Our responsibility is to obtain reasonable assurance about whether the annual financial report, including
the consolidated 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 December 2022 has been prepared in
XHTML format in all material respects.
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INDEPENDENT AUDITORS’ REPORT - continued
Report on Other Legal and Regulatory Requirements - continued
Other matters on which we are required to report by exception
Under the 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 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 in this regard.
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 two financial periods.
RSM Malta
Registered Auditors
Mdina Road
Zebbug ZBG 9015
Malta
Conrad Borg
Principal
21 April 2023
