Company Registration No. C 56012
VBL PLC
Annual Financial Report
and
Consolidated Financial Statements
31 December 2025
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
1
CONTENTS
| Pages | |
| General information | 2 |
| Directors’ report | 3 - 16 |
| Remuneration report and statement of the Directors | 17 - 19 |
| Statement by the Directors on Compliance with the Code of Principles of Good Corporate Governance | 20 - 28 |
| Statement of comprehensive income | 29 |
| Statement of financial position | 30 |
| Statement of changes in equity | 31 |
| Statement of cash flows | 32 |
| Notes to the consolidated financial statements | 33 - 59 |
| Independent auditor’s report | 60 - 66 |
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
2
GENERAL INFORMATION
Registration
The company’s registration number is C 56012. Since last publication, there were no changes to the name of the
Place of domiciliation
Malta
Principal place of business
Malta
Directors
Dr. Andrei Imbroll
Mr. Artur Haze
Dr. Geza Szephalmi
Mr. David Galea Souchet
Mr. Julian Tzvetkov
Ms. Isabella Vella
Dr. John Attard (appointment expired on 31 July 2025)
Company secretaries
Dr. Joseph Borg Bartolo and Dr. Mikiel Calleja
Registered office and principal place of business
Principal bankers
Bank of Valletta p.l.c.
184, Triq In-Naxxar
San Gwann SGN 9030
Malta
Auditor
RSM Malta
Mdina Road
Zebbug ZBG 9015
Malta
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
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DIRECTORS’ REPORT
The Directors present their annual financial report and audited consolidated financial statements of VBL Plc (“the
Company”) and its subsidiaries (together, “the Group” or the “VBL Group”) for the year ended 31 December 2025.
Review of Business Development and Financial Position of the financial year 2025
The Group’s financial performance remained stable during the reporting period and continued to build on the
growth achieved in previous years. In 2025, the Group delivered strong revenue growth, with revenues increasing
by 15% compared to the prior year. This improvement translated into a significant enhancement in operational
profitability, with Operational EBITDA rising to €1,730,148 from €1,163,203 in the previous year, while the
Operational EBITDA margin increased to 37% from 29%.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
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DIRECTORS’ REPORT - continued
Review of Business Development and Financial Position of the financial year 2025 - continued
The Group’s operations continue to be influenced by broader market dynamics, including global economic
conditions, airline seat capacity, changes in consumer prices, services inflation and labour market quality and
supply challenges. Notwithstanding these external factors, the Group successfully progressed with the
implementation of its strategic initiatives during the reporting period. This includes the continued execution of its
renovation programme and the further consolidation of its presence within the Valletta hospitality market through
the addition of new units to its hospitality portfolio.
Throughout the year, the Group maintained a clear strategic focus on its core market of Valletta, strengthening
its position while delivering on its planned growth objectives.
In the reporting period, the Group has continued to progress with its development programme, which has resulted
into €1,423,803 of Investment Income for the period (2024: €2,558,543), as the balance of fair value movement
of individual portfolio assets and an overall significant increase in the book value of Investment Properties
amounting to €3,952,558.
The proportion of renovated operational assets continues to grow, however it remains relatively low compared to
the Group’s total owned portfolio, a position which will change considerably upon completion of the ongoing
developments. As of 31 December 2025, only about 30% of the Group’s owned assets, based on square meters,
were operational and revenue generating. The remaining part of the Group owned assets are under development
or are being prepared for development, which projects significant growth opportunities in the coming years,
resulting from the conversion of the owned non-performing assets into renovated, revenue generating properties.
In the course of the current business year, the development activity of the Group was progressing overall in line
with previously declared plans and additional unconverted assets were transformed to operational properties,
adding circa 300 square meters to the developed operational portfolio of revenue generating assets, in addition
to several other ongoing development projects. During the year, the Group has also continued the renovation and
conversion of the Silver Horse Block Phase 2 (“SHB2”) property, for which a Full Development Permit (“FDP”)
has been secured for an 88-room four-star hotel including Tourism Compliance Certification issued by the Malta
Tourism Authority (“MTA”). Achievement of this key milestone was crucial for the Group to continue its course
towards opening the first international hotel brand in Valletta. As previously announced, the completion of the
SHB2 property is scheduled for the second half of year 2026, with the interim project development delays and
usual complications resulting from the nature of the renovation and regeneration of old, historic properties
expected to be largely resolved during the process. With the expected handover of the Group’s current flagship
project, and the revenue generation expected from this asset, the Group’s financial and operational profile is
projected to further improve and strengthen, maintaining the delivery of the long-term plans and projections.
The Group continued using its long-term banking development financing facility and the redeemable bond
financing raised in prior periods, in line with the progress of the development programme. The unused bond
proceeds were temporarily utilised as defined in the bond prospectus. The Group’s overall leverage, however,
remains very low. Third-party borrowings ratio remains at approximately 28%, as a result of the conservative
management approach.
The core activity and the most significant value driver for the Group is real estate acquisitions and development,
which accounts for the most significant value changes in the Group’s accounts. The Group therefore – similarly
to its peer companies – assesses and reflects the investment income as a separate line item right under total
revenues. In the reporting period, Investment Income has reached €1,423,803 (2024: Investment income was
€2,558,543), the year-on-year difference being due to the project development particularities, and in line with
expectations.
The current development cycle, including the Group’s current flagship project, SHB2, considerable square meters
to be completed and handed over to operations beyond year 2025, in line with earlier disclosed plans. Thus, the
significant development works carried out in 2025 on the Group’s asset portfolio will contribute to the investment
property fair value development and growth of the net book value, upon completion and handover of the ongoing
development projects.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
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DIRECTORS’ REPORT - continued
Review of Business Development and Financial Position of the financial year 2025 - continued
Investment property fair value and net book value is a reflection of the property’s current state and thus, does not
take into account the potential value of the property at completion.
| ACTUAL Jan - Dec 2025 | ACTUAL Jan - Dec 2024 | VARIANCE2025 ACTUAL VS 2024 ACTUAL € % | ||
| € | € | |||
| Revenue | 4,693,410 | 4,065,367 | 628,043 | 15% |
| Investment Income | 1,423,803 | 2,558,543 | (1,134,740) | (44%) |
| Cost of Sales | (1,725,784) | (1,702,351) | (23,433) | 1% |
| Gross Profit | 4,391,429 | 4,921,559 | (530,130) | (11%) |
| GOP Margin | 72% | 74% | (2%) | |
| Other Operating Income | 20,800 | 21,673 | (873) | (4%) |
| Total Operating Costs | (1,257,668) | (1,221,486) | (36,182) | 3% |
| EBITDA | 3,154,561 | 3,721,746 | (567,185) | (15%) |
| EBITDA Margin | 52% | 56% | (5%) | |
| EBITDA (Operational) | 1,730,758 | 1,163,203 | 567,555 | 49% |
| EBITDA Margin (Operational) | 37% | 29% | 8% |
Notes: Operational EBITDA and Operational EBITDA margin is calculated without investment income.
The Group’s Annual Consolidated Audited Accounts for the year ended 31 December 2025 show several
variances compared to the projections included in the Prospectus dated October 2024. Variances exceeding 10%
are primarily attributable to the accelerated implementation of the Group’s development and property
regeneration plan, improved operational efficiencies, management actions and favourable market conditions.
Conversely, lower than projected liabilities and borrowings reflect delayed payments and the slower utilisation of
available financing facilities during the period.
Key positive variances compared to the projections include higher investment income (+21%), significantly lower
cost of sales (-17%), and consequently stronger gross profit (+29%) and EBITDA (+37%). In addition, other
operating income (+108%), interest income (+69%) and profit before tax (+46%) exceeded projections, while
administrative expenses (+13%), depreciation and amortisation (+40%) and finance costs (+22%) were
higher than anticipated, largely reflecting increased activity and investment in development and regeneration
projects.
On the balance sheet, total liabilities (-11%) and borrowings (-14%) were below projections, primarily due to
the slower drawdown of financing facilities. Overall, the Group delivered stronger than projected profitability,
driven by enhanced operational performance and effective execution of its strategic initiatives.
Dividends and Reserves
During the year ended 31 December 2025, gross dividends amounting to €220,000 (0.08829 euro cents per
ordinary share) (2024: €200,000) were declared, while actual net dividends paid during the year amounted to
€209,000 (2024: €200,000).
The Directors have proposed the balance of retained earnings amounting to €17,896,814 (2024: €16,496,908)
be carried forward to the next financial year.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
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DIRECTORS’ REPORT - continued
Listed Company Status
VBL Plc., as the principal company of the Group, is a listed entity at the Malta Stock Exchange (“MSE”). In the
reporting year, there was no change in the number of the issued ordinary shares.
As at 31 December 2025, 100% of the Group’s equity and issued share capital is listed on the MSE with a total
number of shares in issue of 249,179,183. All shares of the Group are ordinary shares, with nominal value of
€0.20 each, and have the same shareholders’ rights.
The authorised share capital of the Group is €66,000,000.
Events After the End of the Reporting Period
There were no specific, materially important, events affecting the Group or its long-term outlooks, which occurred
since the end of the reporting year. The long-term effects and uncertainties of the current global political and
economic situation are currently not considered quantifiable, however, global security and geopolitical
uncertainties and challenges might have an impact on the Group’s long-term business and development strategy.
The Directors’ current view is that, despite the current global economic situation, the niche market in which the
Group operates, and the specific characteristics of the Group’s property portfolio remains a competitive advantage
and supports the adopted long-term business strategy.
Future Developments
The Group remains committed to sustaining its already proven dynamic growth trajectory through the continued
implementation of its declared strategy and the execution of its announced development programme relating to
its owned assets.
Chart 1: Revenue Growth Trajectory of VBL Group
Source: VBL Group’s Accounts
€ 0.55
€ 1.06
€ 2.32
€ 3.25
€ 4.07
€ 4.69
€ -
€ 0.50
€ 1.00
€ 1.50
€ 2.00
€ 2.50
€ 3.00
€ 3.50
€ 4.00
€ 4.50
€ 5.00
2020A 2021A 2022A 2023A 2024A 2025A
Millions
VBL Consolidated Group Revenues
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
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DIRECTORS’ REPORT - continued
Future Developments - continued
Alongside the possible future expansion of its asset base, the Group continues to focus on further enhancing
operational efficiencies and optimising the utilisation of its already developed properties, in line with its long-term
business strategy and financial objectives.
The Group’s ongoing renovation and regeneration programme remains a key driver of value creation. Through
this programme, the Group continues to convert historic properties within its Valletta-based portfolio into
modernised, revenue-generating rental assets, while preserving their architectural and cultural heritage. These
initiatives not only strengthen the Group’s increasingly diversified operational platform but also support the
sustainable revitalisation of Valletta’s historic urban environment.
In parallel, the Group continues to actively build and maintain a proprietary pipeline of opportunities within the
Valletta real estate market, which represents a strong foundation for future growth. The Group’s acquisition
strategy remains highly selective and opportunistic, with a particular focus including larger or landmark properties
that offer substantial redevelopment and value creation potential.
Over time, the Group has developed significant expertise in identifying and unlocking complex ownership and
development situations, particularly in historically sensitive urban environments. This capability represents a key
competitive advantage and continues to serve as an important driver of the Group’s future growth and value
creation. The Group’s proven track record enables it to acquire properties with complex ownership or structural
characteristics at attractive terms that are typically not accessible through the open market.
Importantly, a number of identified opportunities within the Group’s proprietary acquisition pipeline are not
currently reflected in the valuation of the Group’s existing asset portfolio (similarly to the proprties on promise of
sale status), yet they represent meaningful additional value potential once executed. The successful realisation
of these opportunities is expected to contribute further to the expansion of the Group’s asset base and revenue
generation capacity.
Looking ahead, the Group expects further growth in both revenues and asset values through the progressive
realisation of this proprietary pipeline, supported by the continued implementation of its acquisition, development
and operational strategy. The timing and scale of these initiatives remain dependent on available investment
resources, financing conditions and prevailing market dynamics.
Ongoing development projects within the Group’s portfolio are currently valued on a project value basis,
considering the current development status and not reflecting the anticipated value of the assets upon full
completion. As regeneration works progress and projects reach completion, the Group expects to unlock
significant additional property value. Based on current development plans and execution timelines, these projects
are projected to deliver meaningful increases in property value over the medium to long term, in line with the
specific project milestones and updates periodically communicated by the Group.
Overall, the Group remains confident that the consistent execution of its strategy, together with its established
presence in the Valletta market and its growing development pipeline, positions it well to continue delivering
sustainable growth and long-term value creation for its stakeholders.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
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DIRECTORS’ REPORT - continued
Financial Risk Management
The Group is exposed to a range of financial risks arising from its operations and financing activities, including,
among others, market risk, credit risk and liquidity risk. The Group’s risk management framework seeks to identify,
monitor and manage these risks in order to minimise potential adverse effects on the Group’s financial
performance and financial position.
The Group’s overall risk management approach focuses on the potential volatility and unpredictability of external
market conditions and core operational and financial markets. Accordingly, management continuously monitors
the developments in the economic and financial environment and implements appropriate measures aimed at
mitigating the potential impact of such risks on the Group’s operations.
The Group applies a variety of analytical tools and methods to assess the different types of financial risks to which
it is exposed. These include, among others, sensitivity analysis, scenario and assumption modelling, and ageing
analysis in relation to credit exposures. Such analyses assist management in evaluating potential risk exposures
and in determining appropriate mitigation strategies.
Responsibility for the implementation of the Group’s risk management framework rests with executive
management, operating under policies and procedures approved by the Group. These policies provide guidance
on the identification, assessment and monitoring of financial risks, while also establishing appropriate internal
controls, risk management procedures and exposure limits.
Through this structured risk management approach, the Group aims to maintain prudent financial management
and operational environment, while supporting the sustainable growth and further development of its operations.
Environmental, Social and Governance (ESG) responsibility and commitment
ESG Commitment and Approach
The Group recognises that sustainable and responsible business practices are fundamental to the long-term
resilience, competitiveness and value creation of its operations. Environmental, Social and Governance (“ESG”)
considerations therefore form an integral part of the Group’s strategic decision-making, operational management
and corporate culture.
The Board of Directors, management team, employees and investors increasingly recognise the importance of
embedding environmentally and socially responsible, ethical and sustainable practices across the Group’s
activities. In response, the Group has established a dedicated internal leadership structure responsible for
overseeing ESG-related matters, ensuring that sustainability considerations are integrated into operational and
strategic planning.
This leadership structure coordinates ESG initiatives across the Group’s key business areas — development,
real estate management and hospitality operations — while promoting awareness and engagement among
employees, contractors, partners and other stakeholders. The Group aims to demonstrate a genuine commitment
to responsible business conduct by continuously strengthening internal policies, improving operational processes
where the Group has influence, and contributing to greater ESG awareness within its core market of operation.
The Group’s ESG strategy is guided by three principal objectives:
Preserving environmental and architectural heritage, particularly within historic urban areas such as
Valletta;
Promoting responsible and inclusive workplace practices across its workforce and supply chain; and
Maintaining strong corporate governance and regulatory compliance as a publicly listed company
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
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DIRECTORS’ REPORT - continued
Environmental, Social and Governance (ESG) responsibility and commitment - continued
ESG Commitment and Approach - continued
These objectives support the Group’s broader mission of contributing to a sustainable economic and social
ecosystem while ensuring the long-term sustainability and profitability of its operations.
During the reporting period, the Group continued to strengthen its awareness and assessment of ESG-related
risks and opportunities, recognising their increasing importance in navigating an evolving regulatory environment
and supporting long-term corporate success.
Environmental Responsibility
Environmental considerations are particularly relevant to the Group given the nature of its activities in property
restoration, development, real estate management and hospitality operations, especially within historically
sensitive urban environments.
The Group’s environmental strategy is centred on the 3R methodology — Reduce, Reuse and Recycle — which
guides the design, development and operational management of its properties.
The Group places strong emphasis on adaptive reuse of existing buildings, minimising environmental impact
while preserving the architectural and cultural heritage of the properties under its management.
Sustainable Development Practices
Within the development phase, the Group focuses primarily on restoration and regeneration projects rather than
greenfield construction. Key environmental initiatives include:
Prioritising restoration and adaptive reuse of existing buildings, thereby avoiding greenfield
development and avoiding additional land consumption;
Limiting new construction materials use through the regeneration and strengthening of existing
structural elements, including floor slabs and load-bearing structures;
Reuse of traditional Maltese architectural materials, including historic cement tiles, limestone blocks
and stone slabs (xorok) recovered from renovation works;
Restoration and reuse of original wooden beams and structural timber elements found within historical
properties;
Reduction of construction waste through the repurposing and integration of existing structural
components wherever feasible;
Storage and reuse of recovered materials, including limestone, xorok (traditional Maltese stone slabs),
wooden apertures and traditional tiles, which are systematically catalogued and reused across the
Group’s projects.
These practices significantly reduce construction waste, lower the environmental footprint of development
projects and contribute to the preservation of Malta’s architectural heritage.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
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DIRECTORS’ REPORT - continued
Environmental, Social and Governance (ESG) responsibility and commitment – continued
Sustainable Property and Hospitality Management
Environmental management continues throughout the operational lifecycle of the Group’s properties. Key
operational initiatives include:
Reduction and gradual elimination of single-use plastics across hospitality operations through increasing
introduction of refillable dispensers and reusable guest amenities, aiming to achieve total replacement of
single use plastics;
Furniture conservation and relocation programmes, allowing restored traditional furniture to be reused
across the Group’s portfolio;
Creative repurposing of obsolete architectural elements, such as apertures and wooden frames, into
artistic and decorative features;
Installation of Room Management Systems (RMS) in newer developments, allowing automated control
of lighting, heating and cooling systems;
Implementation of energy management systems designed to optimise electricity consumption;
Water conservation initiatives, including the installation of flow-control devices and water efficiency
measures;
Use of energy-efficient lighting systems and operational practices aimed at reducing unnecessary energy
consumption.
These initiatives collectively support the Group’s objective of reducing resource consumption and improving
operational efficiency while maintaining high hospitality standards.
Social Responsibility
The Group recognises that its workforce, service providers and local communities are fundamental to the
sustainable development of its business.
The Group therefore strives to maintain a working environment based on fairness, professional knowledge and
skills, transparency and supporting ongoing professional development, while ensuring that workplace standards
are consistently applied across both directly employed and outsourced personnel.
Key characteristics of the Group’s workforce include:
Representation of more than ten nationalities, including Maltese, EU and non-EU employees;
An open and transparent recruitment process and management structure, with employment decisions
based on merit and professional competence;
Equal treatment across all employment levels regardless of nationality, status, background or
employment arrangement.
The Group considers cultural diversity to be a valuable asset that enhances service quality, operational flexibility
and innovation.
Workplace Culture and Employee Engagement
The Group actively promotes a corporate culture built on professional knowledge and ethics, skills, openness,
fairness and mutual respect.
Key principles guiding workplace practices include:
An open-door management policy encouraging transparent communication between employees and
management;
Equal opportunities for career development and professional advancement;
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
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DIRECTORS’ REPORT - continued
Environmental, Social and Governance (ESG) responsibility and commitment - continued
Workplace Culture and Employee Engagement - continued
Ongoing training and professional development programmes, particularly in hospitality service standards,
property management, health and safety practices and sustainability awareness;
Maintenance of a safe and healthy working environment across construction, development and hospitality
operations;
Respectful integration of employees from different cultural backgrounds within a collaborative workplace
environment.
The Group believes that maintaining a supportive and inclusive workplace contributes significantly to employee
retention, service quality and long-term operational stability.
Community and Cultural Heritage
The Group’s activities are closely connected to the preservation of Malta’s architectural and cultural heritage,
particularly within Valletta and surrounding historic areas.
Through its property restoration projects, the Group contributes to:
The preservation of historically significant buildings;
The revitalisation of historic urban environments;
The sustainable development of tourism infrastructure in culturally sensitive areas.
These initiatives contribute positively to the wider community and support the long-term attractiveness of Malta’s
tourism sector and the promotion of the Maltese Heritage.
Governance
Strong corporate governance is fundamental to maintaining investor confidence, ensuring regulatory compliance
and supporting the long-term sustainability of the Group.
As a publicly listed entity, the Company operates within a strict regulatory framework and adheres to recognised
corporate governance principles and best practices.
The Company is regulated by the Malta Financial Services Authority (MFSA), which oversees financial markets
and listed entities in Malta.
Corporate Governance Framework
The Group maintains a governance framework designed to ensure accountability, transparency and effective
oversight. Key governance principles include:
Clear organisational structures and defined decision-making responsibilities;
Board-level oversight of strategic and operational matters;
Internal policies and procedures designed to ensure compliance with regulatory requirements;
Regular financial reporting and transparent communication with shareholders and investors.
The Group continuously seeks to strengthen its governance framework in line with evolving regulatory
expectations and market practices.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
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DIRECTORS’ REPORT - continued
Environmental, Social and Governance (ESG) responsibility and commitment – continued
Regulatory Compliance
The Group maintains strict compliance with applicable regulatory and legal requirements, including:
The General Data Protection Regulation (GDPR), ensuring the protection and responsible handling of
personal data;
International standards relating to Anti-Money Laundering (AML) and counter-terrorist financing;
Corporate governance rules applicable to listed entities.
Internal procedures are in place to ensure that all employees and business partners adhere to applicable laws,
regulations and ethical standards.
Ethical Conduct and Political Neutrality
The Group maintains a strong commitment to ethical business conduct and responsible corporate behaviour. Key
governance principles include:
Transparent financial and operational reporting;
Ethical conduct across all business activities;
Compliance with applicable laws and regulatory standards;
A strict policy of political neutrality, with the Group maintaining no political affiliations or engagements.
Planned Future Direction
The Group recognises that ESG considerations will continue to grow in importance for investors, regulators and
stakeholders. Accordingly, the Group remains committed to strengthening its ESG practices, improving internal
monitoring processes and enhancing transparency in its sustainability reporting.
By integrating ESG considerations into its long-term strategy, the Group aims to contribute to sustainable
economic development, preserve Malta’s architectural heritage and create lasting value for shareholders,
employees and the communities in which it operates.
Outlook and Going Concern
The Directors are currently of the opinion that, despite potential short- to medium-term volatility in both global and
local markets, the Group remains a going concern over the long term. Management expects the Group’s financial
performance to continue benefiting from its resilient portfolio of prime real estate assets in the historic city of
Valletta, which provides strong positions for sustainable, long-term growth, continuing building on the same trend
of the past years. The Group’s development and growth trajectory is supported by its conservative business and
financial strategy, alongside the ongoing execution of its declared development programme. The Directors
anticipate that the core markets, industry dynamics, and general economic environment will remain stable over
the medium to long term, despite the current global uncertainties, enabling the Group’s financial performance to
follow a consistent and positive trend.
Ongoing renovation and regeneration projects are progressing in line with expectations, effectively managing
sector-specific challenges and interim delays. These projects are generally forecasted to conclude according to
communicated schedules over the coming years, subject to successfully overcoming the challenges arising from
the nature of the Group’s core business – regeneration and renovation of historic assets in a World heritage
environment - and the prevailing market risks and economic conditions remaining stable or improving.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
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DIRECTORS’ REPORT - continued
Outlook and Going Concern - continued
The Group’s conservative leverage, low indebtedness, and structured long-term development financing provide
strong resilience against internal and external industry or financial pressures. Current inflationary and interest
rate trends disproportionately impact companies with weaker balance sheets and less robust asset bases,
positioning the Group advantageously in comparison.
The prevailing economic and market conditions may also present new opportunities, which the Group intends to
pursue to enhance its core offerings, while maintaining a clear strategic focus.
Based on the current known market environment and anticipated business developments, the Directors are
confident that the Group will continue to operate as a going concern.
Principal Risks and Uncertainties
The key risk factors the Group is facing, have been categorised under five main categories, according to whether
the risk factors relate to:
(i.) risks relating to the acquisition and disposal of immovable property;
(ii.) risks relating to construction and development of immovable property;
(iii.) risks relating to management and operation of immovable property;
(iv.) risks related to the change of interest rates and the conditions of financing deriving from the overall global
economy, local financial market, global and European inflationary environment and Euro-based interest
rates; and
(v.) risks relating to the general business and operations of the Group, including global political and economic
instability, cyber threats, geopolitical or supply chain risks. This category of risk factors is intended to
encapsulate those risk factors that concern the day-to-day operations and activities of the Group,
regardless of the line of operations concerned and are, therefore, considered to apply equally to each of
the individual business lines referred to in categories (i) to (iv).
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 and development activities of the Group.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
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DIRECTORS’ REPORT - continued
Shareholding Structure of the Group Pursuant to Capital Markets Rule 5.64
The issued share capital of the Group as at the date of this report is 249,179,183 ordinary shares with a nominal
value of €0.20 per share. All shares are listed on the Malta Stock Exchange and hold the same rights.
The Group’s shareholders holding 5% or more in direct or indirect shareholding are:
| Shareholder's Name | Number of Shares (owned directly) |
| VBLM Limited | 46,000,010 |
| Artur Haze | 44,010,815 |
| Geza Szephalmi | 40,433,395 |
| Andrei Imbroll | 36,945,655 |
| Sorbusenco Enterprises Limited | 22,635,560 |
| Petrolsped (Malta) Ltd | 14,997,045 |
| Julian Tzvetkov | 12,005,245 |
VBLM Limited is a management company, which has entered into a Management Services Agreement with the
Group, pursuant to which VBLM Limited provides the Group with, inter alia, senior executive and strategic
management and other support services. There are no restrictions on the transfer of shares of the Company, nor
other limitations on the holding of securities or the need to obtain the approval of the Company or other holders
of securities.
Rules Governing the Amendment of the Memorandum and Articles of Association Pursuant to Capital
Markets Rule 5.64.8
An amendment to the Memorandum and Articles of Association would require an extraordinary resolution, which
must be passed by shareholders holding:
- Not less than seventy-five per cent (75%) in nominal value of the shares represented and entitled to vote
at the meeting; and
- At least fifty-one per cent (51%) in nominal value of all the shares entitled to vote at the meeting.
If one of the above majorities is obtained but not both, another meeting must be convened within 30 days to take
a fresh vote. At that second meeting, the resolution may be passed by shareholders holding not less than 75% in
nominal value of the shares represented and entitled to vote. However, if more than half in nominal value of all
shares having the right to vote is represented at that meeting, a simple majority of such shares represented shall
suffice.
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, rental 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, a
structure in place since the establishment of the VBL Group, and details of which have been disclosed by the
Group in various communications and also published in Section 4.3 of the Registration Document (Prospectus),
dated 04 October 2024 and further detailed in the Directors’ Remuneration Report section of this document.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
15
DIRECTORS’ REPORT - continued
Company Secretary and Registered Office of the Company Pursuant to Capital Markets Rule 5.70.2
Dr. Joseph Borg Bartolo and Dr. Mikiel Calleja
54, Marsamxett Road, Valletta VLT 1853 Malta
Statement of Responsibility Pursuant to Capital Markets Rule 5.68
The Directors declare that to the best of their knowledge, the consolidated financial statements included in the
Annual Financial Report are prepared in accordance with the requirements of International Financial Reporting
Standards (“IFRS”) as adopted by the European Union (“EU”), as amended from time to time and these
statements give in all material aspects a true and fair view of the assets, liabilities, financial position and results
of the Group and that this report includes a fair review of the development and performance of the business and
position of the Group, together with a description of the principal risks and uncertainties that it faces.
Indemnification of the Directors and Senior Management by the Annual General Meeting
In line with standard international practices and Article 148 of the Maltese Companies Act, and the relevant
European and international corporate governance practices, since inception, the Directors propose to the Annual
General Meeting of the Group, a resolution on the indemnification of the Directors and Senior Management,
related to the year of reporting, to indemnify the members of the Board of Directors and Senior Management of
the Group from liabilities and expenses to which any such person(s) may become a party as a result of such
individual’s acts carried out for and on behalf of the Group, or any of its associated companies, or affiliates,
limitedly in so far as such acts are carried out in the individual’s capacity as a Director or Senior Manager, as
applicable.
The purpose of such resolution, in line with the applicable Maltese laws and corporate governance standards, is
to obtain shareholder approval in order to allow for an indemnity to be provided by the Group to the directors and
senior management. Such indemnification, as per law, is excluding the cases of fraud, criminal act, gross
negligence and alike. This, if proposed and consecutively approved by the Annual General Meeting of the Group,
would result in the said person/s being protected (within the limits of the applicable Maltese laws) for any liabilities
and expenses that may arise as a result of their duties being exercised for and on behalf of the Group or
associated companies, or affiliates.
Board of Directors
The Board of Directors of the Company currently consists of the following Directors:
Mr. Artur Haze, Non-Executive Director, Member of the Audit Committee
Mr. David Galea Souchet, Non-Executive Director, Chairman of the Audit Committee
Dr. Andrei Imbroll, Executive Director
Dr. Geza Szephalmi, Chairman and Executive Director
Mr. Julian Tzvetkov, Executive Director
Ms. Isabella Vella, Non-Executive Director, Member of the Audit Committee
Under the provisions of the Company’s Memorandum and Articles of Association, the appointment of the Directors
happens at the Company’s General Meeting.
Auditors
A proposal will be submitted to the Annual General Meeting to re-appoint RSM Malta as Auditor to the Group for
year 2026 and to set their remuneration for the period.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
16
DIRECTORS’ REPORT - continued
Statement of Directors’ responsibilities for the financial statements
The Maltese Companies Act (Cap. 386), requires the Directors to prepare consolidated financial statements for
each financial year which give a true and fair view of the financial position of the Group as at the end of the
financial year and of the profit or loss for that year.
In preparing the consolidated financial statements, the Directors are responsible for:
adopting the going concern basis unless it is inappropriate to presume that the Group will continue in business
as a going concern;
selecting suitable accounting policies and applying them consistently;
making judgements and accounting estimates that are reasonable and prudent;
accounting for income and charges relating to the accounting period on accrual basis;
valuing separately the components of asset and liability items;
reporting comparative figures corresponding to those of the preceding accounting period; and
preparing the consolidated financial statements in accordance with International Financial Reporting
Standards (IFRS Accounting Standards) as adopted by the European Union (EU).
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at
any time the financial position of the Group and to enable the Directors to ensure that the consolidated financial
statements comply with the Maltese Companies Act (Cap. 386). This responsibility includes designing,
implementing and maintaining such internal control as the Directors determine is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud
or error. The Directors are also responsible for safeguarding the assets of the Group and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
Additionally, the Directors are responsible for:
the preparation and publication of the Annual Financial Report, including the consolidated financial
statements and the relevant tagging requirements therein, as required by Capital Markets Rule 5.56A, in
accordance with the requirements of the European Single Electronic Format Regulatory Technical
Standard as specified in the Commission Delegated Regulation (EU) 2019/815 (the “ESEF RTS”)
designing, implementing and maintaining internal controls relevant to the preparation of the Annual
Financial Report that is free from material non-compliance with the requirements of the ESEF RTS,
whether due to fraud or error, and consequently, for ensuring the accurate transfer of the information in
the Annual Financial Report into a single electronic format.
Signed on behalf of the Board of Directors on 29 April 2026 by Mr. Julian Tzvetkov (Director) and Dr. Andrei
Imbroll (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction
with the Annual Financial Report and Consolidated Financial Statements.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
17
REMUNERATION REPORT AND STATEMENT OF THE DIRECTORS
In line with the Capital Markets Rules (the “Rules”), as set out in Chapter 12 of the Rules, the Group is subject to
draw up a Remuneration Report in line with the requirements as detailed in the Appendix 12.1 of Chapter 12,
providing an overview of the remuneration to the directors of the Group.
The Group is also subject to the Code of Principles (the “Code”) forming part of the Capital Markets Rules, and
in terms of the respective Rule (8.A.4) the Company is to include a Remuneration Statement in its Annual
Financial Report with the details of the remuneration policy of the Group and the remuneration of the Directors.
In terms of the effective Remuneration Policy of the Group (“Remuneration Policy”), and the principles presented
in the Listing Prospectus, and in alignment and compliance with the relevant and applicable guidelines, the Board
has reviewed the principles and the relevant guidelines and has concluded that based on the significance of the
Company in terms of its size and that of its operations, clients, the structure of its internal organisation, and the
nature, scope and complexity of the activities of the Group, this Policy does not require a separate Remuneration
Committee to be set-up and the responsibilities attributed to overseeing the Remuneration Policy of the Group
shall be performed by the Board of Directors. This Remuneration Policy is reviewed regularly or as required and
any material amendments thereto shall be submitted to the General Meeting of the Company for adoption. In the
reporting period, there were no changes to the Remuneration Policy.
Remuneration related to the Directors, in accordance with the Remuneration Policy
Directors’ Fees
The resolution by the Shareholders of the Company at the Annual General Meeting held on 31st July 2025,
approving the aggregate total annual remuneration of the Board of Directors, set the directors’ fees for one year
at a total of €72,000.
The directors’ fees are defined as a fixed annual amount and are reviewed and approved at the Annual General
Meeting of the Company.
The total directors’ fees paid during the financial year 2025 to the Board of Directors was €79,000, reflecting the
number of directors in office. According to the existing Remuneration Policy, the Directors are not entitled to
variable fee or other remuneration or benefits related to their directors’ position within the Group or from any
undertakings belonging to the same Group, meaning a parent undertaking and any subsidiary undertaking.
The Directors of the Group have not been granted any shares or shares options in the reporting period, as part
of their remuneration.
After an assessment of the market conditions and the particularities of the Group, the Directors have concluded
that the remuneration of the Board of Directors of the Group is considered to be in line with the size of its
operations and general applicable industry standards, and the nature, scope and complexity of its activities and
in compliance with the Remuneration Policy with no deviations from the procedure for the implementation of the
Remuneration Policy.
The Remuneration Policy of the Company is unchanged since its introduction at the Company’s Annual General
Meeting in 2022, and since there were no changes to remuneration structure of the directors. At the 2025 Annual
General Meeting (“AGM”) of the Company, the aggregate gross total remuneration of the Board of Directors of
the Company was set at €72,000 for one year. This reflects no change in the gross directors’ remuneration from
the previous year, but is a reduction in total amount from the previous years, reflecting the actual number of
directors in office.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
18
REMUNERATION REPORT AND STATEMENT OF THE DIRECTORS - continued
Remuneration related to the Directors, in accordance with the Remuneration Policy - continued
Directors’ Fees - continued
In accordance with Capital Markets Rules, Appendix 12.1 it is hereby disclosed that in the reporting period:
- No remuneration is received by the directors from any undertaking belonging to the same group (parent
and subsidiary)
- No share options were granted or offered to directors and CEO or other executives of the Group;
- No variable remuneration is part of the directors’ remuneration and there is no possibility to reclaim
variable remuneration (if any);
- No deviations from the procedure for the implementation of the Remuneration Policy are relevant in the
reporting period.
Executive Management and Services
Since its foundation, the Group has been managed by VBLM Ltd (“VBLM”), a dedicated management
company. As declared before and presented by the Group, VBLM is a significant shareholder of the Company
and is owned, managed, and controlled by the Executive Directors of the Group. Its core activity is the
management of the Group.
The provision of management services by VBLM reflects the long-established structure in place since the
Group’s inception. This arrangement is formalised through a management services agreement (“Management
Services Agreement”), entered into between VBLM and the principal company of the VBL Group. The nature
of this relationship and the key terms of the Agreement are described in detail in the Listing Prospectus. Under
the Agreement, VBLM provides executive, operational, and strategic management and support services to the
Company and its subsidiaries.
The purpose of the Management Services Agreement is to ensure continuity of the Senior Executive
Management team that has successfully led the Group’s growth and development for over a decade. This
team has been instrumental in establishing stable operations and achieving the Group’s current financial
performance and strategic market position. The Agreement aligns management’s interests with those of the
Shareholders and the Group, while securing their continued commitment to delivering the Group’s strategic
objectives and growth plans.
The existing Management Services Agreement has been extended and is currently effective until 31 December
2027. Additional details on the Management Services Agreement were presented in the Group’s prior
communication, including the Prospectus dated 4
th
October 2024 (section 4.3. of the Registration Document).
The remuneration payable by the Group to VBLM under the Management Services Agreement is comprised
of a combination of fixed and variable parts, consisting of a Retainer Fee (fixed annual fee, adjusted annually
in line with the official inflation index published by the NSO), a Variable Fee (ranging from 50% to 100% of the
Retainer Fee, and linked to achievement of pre-defined specific tasks, which is only payable following
evaluation and approval by the non-executive Directors); and a Performance Fee (related to the achievement
of the mid- and long-term value growth realised by the Group, as described in detail in the Listing Prospectus).
The terms of the Agreement, including the evaluation and approval of the Variable and Performance Fees, are
monitored and overseen by the non-executive Directors. An evaluation and assessment of the Variable and
Performance Fee is carried out by the Group’s Audit Committee and Non-Executive Directors periodically and
is the basis of establishing any variable fee payable under the Management Services Agreement. No
Performance Fee has been achieved nor is payable for the past periods.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
19
REMUNERATION REPORT AND STATEMENT OF THE DIRECTORS - continued
Executive Management and Services - continued
During 2025, the Retainer Fee due to VBLM for the executive, operational and strategic management and
services provided to the Group was €453,753 (2024: €446,212), exclusive of VAT. At the end of the Management
Services Contract term, a Variable Fee amounting to €272,252 equivalent to 60% of the fixed fee has been
achieved by VBLM and inflation adjustment covering the year 2024. No Performance Fee has been achieved nor
is payable for the period.
Other than the directors’ fees and the management services fee, the Group does not provide any other pay,
remuneration or alike to its Directors for their services. Any changes to the terms of the existing Management
Services Agreement are subject to the vetting and approval of the Audit Committee and the non-Executive
Directors of the Group.
The contents of this Remuneration Report have been checked by the Auditors of the Group.
Signed on behalf of the Board of Directors on 29 April 2026 by Mr. Julian Tzvetkov (Director) and Dr. Andrei
Imbroll (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction
with the Annual Financial Report and Consolidated Financial Statements.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
20
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE
The Group is subject to the Code of Principles of Good Corporate Governance
1
(the “Code”) forming part of the
Capital Markets Rules. Listed companies are required under the Capital Markets Rules issued by the Malta
Financial Services Authority to include a Statement of Compliance with the Code in their Annual Financial Report,
accompanied by a report of the independent auditors.
The Board of Directors of the Group (“BOD”, “Board” or “Directors”) restate their support for the Code and consider
that they have taken such measures as are necessary in order for the Group to comply with the requirements of
the Code to the extent that these were considered appropriate and complementary to the size, nature and
operations of the Group.
Basic Principles, in Compliance with Code Provisions:
1. The managing body of the Group is an effective Board in terms of Code Provision 1, which is responsible for
accountability, monitoring, strategy formulation and policy development as specified in Code Provision 4;
2. The Chairman of the Board does not also occupy the role of Chief Executive Officer, as envisaged in Code
Provision 2;
3. The Board is composed of six directors, including three (3) non-executives, of whom two (2) are independent
in terms of Code Provision 3; thus retaining a healthy mix between executive and non-executives in the
composition of the Board of Directors. In the reporting period, the Board is composed of six Directors, with
three (3) non-executives, of whom two (2) are independent;
4. Members of the Board of Directors are all seasoned professionals, with significant local and international
professional track record, including that of directors of other listed companies, and proven experience in
applying the highest level of corporate governance standards and best management practices, obtained in
running large public and private companies;
5. The Board of Directors meets regularly and all Directors are given ample opportunity to discuss the agenda
and convey their opinions as specified in Code Provision 5;
6. The Group recognises the importance of professional development and seeks to ensure that there are
adequate schemes in place for professional development of management and employees in accordance with
Code Provision 6;
7. Of the members of the Board of Directors, the Audit Committee has been set up, consisting of three (3)
members. This body has the task, inter alia, of managing conflicts of interest in terms of Code Provision 11.
Conflicts of interest are also managed in terms of the Group's Articles of Association and the Terms of
Reference of the Audit Committee;
8. The Group has not appointed a Remuneration Committee. The Board believes that the size of the Group and
the Board itself does not warrant the setting up of an ad hoc committee to establish the remuneration
packages of individual directors, as all directors are remunerated equally for their directorship, and relies on
the constant scrutiny of the Board itself, the Group’s shareholders, the nature and the size of the Group, as
well as the market and the rules by which the Group is regulated as a listed company. The Board shall retain
this matter under review over the coming years;
9. The Nomination Committee has been appointed by the Board of Directors with majority of non-executive
directors, as members. The Nomination Committee is responsible to run a transparent nomination process
for the election/re-election of any members, as required, and as detailed and specified in the Memorandum
and Articles of Association.
10. The Group recognises the importance of its role in the corporate social, health and environmental
responsibility arena and seeks to ensure that in its development projects and ongoing operations are
respectful and it is committed to comply with the expected ESG principles and directions. The Directors are
also aware of the importance of having good relations with stakeholders and strive to work together with them
in order to invest in human capital, health and safety issues and to adopt sustainable and environmentally
responsible practices, in line with Code Provision 12;
1
https://www.mfsa.mt/wp-content/uploads/2019/02/Code-of-Principles-of-Good-Corporate-Governance-for-Listed-Entities.pdf
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
21
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Basic principles, in Compliance with Code provisions: - continued
11. Pursuant to the Group's statutory obligations, the annual financial report and consolidated financial
statements, declaration of dividends, election of directors and appointment of auditors and authorisation of
the directors to set the auditor’s fees are proposed and approved at the Group's Annual General Meeting.
The Board of Directors properly serves the legitimate interests of all shareholders and is accountable to all
shareholders, particularly through the representation of the shareholders on the Board itself. This ensures
compliance with Code Provision 9.
In the light of the factors mentioned above, the Board is of the view that the Group is in compliance with the Code.
Specific Corporate Governance Principles
The Group, its Directors, its Management and Employees believe that good corporate governance is a key
element for sustainable business success and supporting the integrity and efficiency of the Company and its
Subsidiaries, operations and long-term success. The Group is committed to establishing, maintaining and
following strong corporate governance principles and best management practices in line with best local and
international practices, as a basic requirement for delivering the Group’s planned financial and business goals,
achieving its expected business potential, and protecting the Group’s investors, employees, partners, customers
and reputation.
The Group’s Directors are committed to ensure the openness and willingness to establish and follow the basic
principles set by the best international practices in corporate governance, regularly disclose financial performance
figures which are truthful and accurate, provide timely and accurate information about the Group’s goals, activities
and strategy to the investors and business partners. This is considered key in allowing the market to be able to
assess and evaluate the various foreseeable or unpredicted risks and issues related to the implementation of the
Group’s business strategy. Among others, the Group has adopted and follows the basic principles of the Code,
in order to establish strong business and governance ethics and apply those in its daily practice.
The five key specific principles adopted by Group’s governing bodies are:
i. Fairness - Fair and ethical behaviour in all dealings is fundamental to the success of Group’s business.
Today, the Group already has an established image and proven operational principles of which a
fundamental part is to act and deal in a fair and correct manner. As a result, the Group enjoys the trust
and support of its partners, peers, customers and suppliers. The Group is committed to continue acting
in accordance with the highest ethical and professional standards.
ii. Accountability - The Board’s and management’s commitment to accountability refers to the obligation
and responsibility of the Group to always act responsibly and be able to give clear explanations or
rationale for the Group’s actions and conduct.
iii. Responsibility - The Board of Directors and management are given authority, as defined in the Articles
and relevant regulations, to act on behalf of the Group, therefore they accept full responsibility for the
powers that they are given and the authority that they exercise.
iv. Transparency - This is a key principle of responsible behaviour and good governance expected by a
number of stakeholders, particularly the shareholders. The Board of Directors and Management
ensure that the various bodies or structures of the Group operate and act in a transparent and
accountable manner, provide timely and accurate reporting, and address in an open and transparent
manner any issues or matters which are faced by the Group.
v. Corporate Social and Environmental Responsibility - In addition to the above four basic corporate
governance principles, the Board of Directors and Management seek to adopt and follow the
increasingly important principles of the corporate social and environmental responsibility in the day-
to-day management practices at the Group.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
22
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
General Meetings
A General Meeting is conducted in conformity with the Articles of Association of the Group.
The Ordinary Business conducted at the Annual General Meeting consists of receiving or adoption of the Annual
Financial Statements, the Declaration of a Dividend, the Appointment and Remuneration of Directors, the
Appointment of the External Auditors, as well as the Authority to the Board to fix the external Auditors’
emoluments.
All shareholders on the shareholders register on the record date as defined in the Capital Markets Rules, have
the right to attend, participate and vote at the General Meeting.
A member or members holding not less than five per cent (5%) of the voting issued share capital of the Group
may:
a. request the Group to include items on the agenda of the General Meeting provided that each item is
accompanied by a justification or a draft resolution to be adopted at the General Meeting; and
b. table draft resolution for items included in the agenda of a General Meeting. Such requests are to be
received by the Group at least forty-six (46) days before the date set for the relative General Meeting.
Every person entered into the register of members shall be entitled to appoint only one (1) person to act as proxy
holder to attend and vote at a General Meeting instead of him. The proxy holder shall enjoy the same rights to
speak and ask questions in the General Meeting as those to which the member thus represented would be
entitled.
Administrative, Management and Supervisory Bodies and Senior Management
The Board
The Group is managed by the Board of Directors consisting of not less than 4 (four) and not more than 8 (eight)
Directors. Since the last Annual General Meeting, there have been seven Directors, of which four are non-
executive, all of whom are entrusted with the overall direction, administration and management of the Group.
Each Director declares that he/she undertakes to:
i. maintain in all circumstances his/her independence of analysis, decision and action;
ii. not to seek or accept any unreasonable advantages that could be considered as compromising his/her
independence; and
iii. clearly express his/her opposition in the event that he/she finds that a decision of the Board may harm
the Group.
As of 31 December 2025, the Board of Directors of the Group consists of the following persons:
| Name | Designation |
| Dr. Geza Szephalmi | Chairman and Executive Director |
| Dr. Andrei Imbroll | Chief Executive Officer and Executive Director |
| Julian Tzvetkov | Chief Financial Officer and Executive Director |
| Artur Haze | Non-executive Director, member of the Audit Committee |
| David Galea Souchet | Independent, Non-executive Director, Chairman of the Audit Committee |
| Isabella Vella | Independent, Non-executive Director and member of the Audit Committee |
Note that Mr. John Attard served as independent, non-executive director and member of the Audit Committee
until 31
St
July 2025.
As of 31 December 2025, the Company Secretaries appointed are Dr. Joseph Borg Bartolo and Dr. Mikiel Calleja.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
23
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Internal Control and Risk Management Systems
The Board of Directors is ultimately responsible for the Group’s system of internal management controls and for
reviewing its effectiveness. The Directors recognise that such 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 material misstatement or loss.
During the financial year under review, the Group maintained a system of internal management controls aimed
at safeguarding assets, ensuring the reliability of financial reporting, and promoting compliance with applicable
laws and regulations. These controls encompass financial, operational, and compliance processes, supported by
established policies and procedures. The Board, through regular reporting and oversight, monitors the
effectiveness of these controls and ensures that appropriate measures are in place to address identified risks.
Management is responsible for the day-to-day management of risks, while the Board retains overall oversight to
ensure that risks are managed within acceptable parameters.
The Audit Committee, appointed by the Board, reviews the effectiveness of the internal control systems and
provides independent assurance to the Board on matters relating to financial reporting and risk management. It
also monitors the integrity of the consolidated financial statements and any related disclosures issued by the
Group.
Board Meetings
During year 2025, there have been 6 board meetings held and several decision makings in writing. At the Annual
General Meeting of the Group, the previous directors have been re-elected and there was no change in the
compositions of the Board of Directors.
The number of Board meetings attended by Directors for the year under review is as follows:
| Members | Attended |
| Andrei Imbroll | 6 |
| Artur Haze | 6 |
| David Galea Souchet | 6 |
| Geza Szephalmi | 6 |
| Isabella Vella | 6 |
| Julian Tzvetkov | 5 |
| John Attard | 3 |
Information and professional development
The Group ensures that it provides its Directors with the necessary detailed and relevant information to enable
them effectively contribute to board decisions. The Group is committed to provide any additional analysis, data,
adequate and detailed information to its Directors, as that might be required to allow for efficient and relevant
discussions prior to decision making. The Group pledges to make available to the Directors all information as
required.
Appointment and Removal of Directors
The Directors of the Group are appointed at the General Meeting by the Shareholders in accordance with the
provisions of the Articles of Association of the Group. The procedure for the appointment of Directors shall be as
detailed and described in the Articles.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
24
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Appointment and Removal of Directors - continued
The Group shall grant a period of at least 14 days to Shareholders holding in aggregate 10% or more of the
Shares to nominate one candidate for appointment as Director for every 10% held as aforesaid. All such
nominations, including the candidate’s acceptance to be nominated as director, shall on pain of disqualification
be made on the form to be prescribed by the Directors from time to time and shall reach the Company not later
than 14 days after delivery of the said notice.
Whenever in terms of these Articles, an election is necessary amongst candidates nominated for appointment as
Directors, such election shall be conducted in the manner prescribed by the Articles or in such manner as close
as practicably possible thereto as the Directors may consider equitable in the circumstances.
Any Director may be removed at any time by the Group in General Meeting pursuant to the provisions of Article
140 of the Act. Without prejudice to the provisions of the Act, the office of a Director shall ipso facto be vacated:
- if, by notice in writing to the Group, he/she resigns from the office of Director; or
- if he/she violates in a proven way the declaration of secrecy required of him/her under the Articles and
the Board of Directors pass a resolution that he/she has so violated the declaration of secrecy; or
- if he/she is prohibited by or under any law from being a Director; or
- if he/she is removed from office pursuant to the Articles or the Act.
A retiring Director shall be eligible for re-election or re-appointment.
Powers of Directors
The Directors are empowered to act on behalf of the Group in accordance with the Memorandum and Articles of
Association, which powers may be widened or restricted from time to time by the Shareholders in General
Meeting.
The general administration and management of the Group is entrusted with the Board of Directors, who are
empowered and authorised to delegate any of its functions relating to the Group to members of the Group’s
management. The executive directors of the Company are entrusted with the executive management functions,
including the management of the day-to-day operations, as defined in the Articles and described below.
Any one or more members of the Board of Directors may also occupy the position of Chief Executive Officer of
the Group and may also occupy the position of members of the board of directors of subsidiaries or affiliate
companies of the Group from time to time.
Evaluation of the Board’s Performance
According to the statutes of the Group and the relevant regulations, the Board regularly undertakes an annual
evaluation of its performance and of its committees. The performance evaluation of each Board member shall be
done by the Board of Directors, excluding the Board member being evaluated. The Chairman takes action on the
result of the performance evaluation process in order to ascertain the strengths and to address the weaknesses,
and reports to the Board and where appropriate to the Annual General Meeting of the Group.
Remuneration of Directors
The remuneration of the Directors in any one financial year, and any changes thereto, is determined by the
General Meeting of the Group.
For the current reporting year under review, the Directors are each entitled to a gross annual remuneration of
€12,000, following the decision of the Annual General Meeting, held on 31
July 2025.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
25
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Executive Directors
The Group currently has three Executive Directors, which are organised and operate under the regulations of the
Group’s Memorandum and Articles of Association and are members of the Executive Committee (“EC”) of the
Group, represented by the Chairman. Any two of the three Executive Directors acting jointly together have
representation and execution rights on behalf of the Group to the extent permitted and as defined by the
Memorandum of Association of the Group. In this respect, and in line with the good governance standards and
internal control procedures implemented by the Group, the Memorandum of Association ties the legal
representation and the signatory rights of the Group to predefined monetary threshold, with enhanced safeguards
applicable to transactions of higher monetary value. The Group applies a dual signatory policy as determined in
the Articles of the Group and other relevant Group regulations.
Any one Executive Director of the Group shall represent the Group in judicial proceedings, as defined in the
Articles, provided that no proceedings may be instituted by the Group without the approval of the Board of
Directors of the Group. The Executive Directors are also members of the Executive Committee of the 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.
The Directors may entrust to and confer upon a CEO any of the powers exercisable by them upon such terms
and conditions and with such restrictions as they may deem fit and may from time to time revoke, withdraw, alter
or vary all or any of such powers.
Currently, the Executive Directors, among which the CEO was nominated, are nominated and provided under the
Management Services Agreement with VBLM, which is a continuous arrangement dating back to the
establishment of the Group and the details of which have been explained in the various Group’s communications,
including the Prospectus dated 4
th
October 2024.
The CEO is responsible for the Group’s operative management and direction in accordance with the Articles, and
the directions of the Executive Committee, the resolutions of the Board of Directors and the resolutions adopted
by the General Meeting. The CEO has the responsibility to decide on the Group’s organisational structure and
relevant internal rules and regulations according to the Articles of the Group.
Declaration
None of the Directors, members of the board committees or members of management have, in the last five years:
- been the subject of any convictions in relation to fraudulent offences;
- been associated in any form with bankruptcies, receiverships or liquidations (other than voluntary) or
companies put into administration in respect of entities in respect of which they were members of
administrative, management or supervisory bodies, partners with unlimited liability (in the case of a
limited partnership with a share capital), founders or members of senior management;
- been the subject of any official public incrimination and/or sanctions by statutory or regulatory
authorities (including designated professional bodies);
- been disqualified by a court from acting as a member of the administrative, management or
supervisory bodies of a company or from acting in the management or conduct of the affairs of any
company.
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:
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
26
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Audit Committee
The primary objective of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities over
the financial reporting processes, the audit process, financial policies and internal control structure, also overview
the Group’s system of internal controls and compliance with laws and regulations, as well as to ensure compliance
with the relevant regulations of the Capital Markets Rules. The Audit Committee of the Group is elected among
the Board members, as defined in the Articles and relevant regulations. The Audit Committee oversees the
conduct of the annual audit process, and acts to facilitate communication between the Board, the Management
and the Group’s appointed auditors.
As at the date of this Report, the Audit Committee is composed of four members – Mr. David Galea Souchet
(Chairman), Ms. Isabella Vella, and Mr. Artur Haze. Mr. David Galea Souchet, Mr. Artur Haze and Dr. John Attard
are the Audit Committee members who are considered by the Board of Directors to be competent in accounting
and/or auditing in terms of the Capital Markets Rules. The Audit 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’s main role and responsibilities are:
a. to review procedures and assess the effectiveness of the internal control systems, including financial
reporting;
b. to assist the Board in monitoring the integrity of the financial statements, the internal control structures, the
financial reporting processes and financial policies of the Group;
c. to make recommendations to the Board in relation to the appointment of the external auditor and to approve
the remuneration and terms of engagement of the external auditor following appointment by the shareholders
in general meeting;
d. to monitor and review the external audit functions, including the external auditor’s independence, objectivity
and effectiveness;
e. to monitor and review the internal procedures and to monitor these on a regular basis;
f. to establish and maintain access between the internal and external auditor’s of the Group and to ensure that
this is open and constructive;
g. to review and challenge where necessary, the actions and judgements of management, in relation to the
interim (if applicable) and annual financial statements before submission to the Board, focusing particularly
on:
i. critical accounting policies and practices and any changes in them;
ii. decisions requiring a major element of judgement;
iii. the extent to which the financial statements are affected by any unusual transactions in the year and
how they are disclosed;
iv. the clarity of disclosures and compliance with International Financial Reporting Standards;
v. significant adjustments resulting from the audit;
vi. compliance with stock exchange (as applicable) and other legal requirements; and
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
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
27
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Audit Committee - continued
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 2025, the Audit Committee met 5 times in person or via video conference, out of which during 2 meetings
the Group’s appointed auditors were present and attended the meetings.
The number of Audit Committee meetings attended by Members for the year under review is as follows:
| Members | Attended |
| Artur Haze | 5 |
| David Galea Souchet | 5 |
| Isabella Vella | 5 |
| John Attard | 3 |
Nomination Committee
The Board of Directors has formed a nomination committee, which was functional in the reporting period. The
forming and operation of the Nomination Committee was in compliance with the principle of the Code. The
proposals of the nomination committee were put forward for decisions of the Board of Directors and presented to
the shareholders, accordingly.
Executive Management Committee (EMC)
The Executive Management Committee (“EMC”) is the main operational body of the Group, ensuring smooth and
efficient day-to-day operations and management control, in line with the strategic operational decisions of the
Board. The EMC consists of the Executive Directors, senior management including the Group’s CEO, CFO and
COO, and any other managers of the Group as might be appointed to the EMC, from time to time.
The EMC is represented at the Board of Directors by the Chief Executive Officer. Within the EMC, there is a clear
division of tasks and responsibilities between the EMC members, covering all areas of the operational
responsibility for the day-to-day operations and 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 remains firmly committed to fostering a transparent, open and constructive relationship with its
shareholders, investors and the wider market. The Board recognises that clear, timely and accessible
communication is fundamental to maintaining investor confidence and ensuring that shareholders are adequately
informed about the Group’s strategy, performance and governance.
In addition to complying with all statutory and regulatory requirements governing shareholder communications,
including the convening of the Annual General Meeting (“AGM”), the publication of the Annual Financial Report
and the periodic Financial Statements, and the issuance of adequate official company announcements, the Group
actively seeks to enhance the quality and accessibility of information provided to shareholders and other
stakeholders.
The AGM remains an important forum through which shareholders are able to engage directly with the Board and
senior management. It provides shareholders with the opportunity to receive direct updates on the Group’s
performance and strategic direction, as well as to raise questions and express their views. The Group encourages
shareholder participation at the AGM and values the constructive dialogue that this interaction facilitates.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
28
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE CODE OF PRINCIPLES OF
GOOD CORPORATE GOVERNANCE - continued
Relations with Shareholders and with the Market - continued
Beyond the AGM, the Group endeavours to maintain ongoing communication with its shareholders through a
variety of channels. The Group’s website serves as a central information platform where shareholders and market
participants can access key corporate information, financial reports, relevant news, regulatory announcements
and other relevant updates. The website is updated as required to ensure that investors have timely access to
accurate and comprehensive information regarding the Group’s activities and performance.
As part of its commitment to strengthening engagement with its investor base, the Group has also introduced a
Shareholders’ Loyalty Programme (“SLP”). This initiative is designed to recognise and reward the continued
support of shareholders while fostering a closer relationship between the Group and its investor community. The
programme is regularly reviewed and updated, with communications issued to shareholders to ensure they
remain informed of available benefits and developments. During the period under review, the Group continued
its initiative to widen and expand the Shareholders’ Loyalty Programme, with the objective of enhancing its
structure and broadening the range of benefits available to participating shareholders.
In line with its status as a publicly listed company and in compliance with the applicable regulatory framework,
the Group ensures that all financial reports, company announcements and other disclosures required under the
Capital Markets Rules are issued in a timely and transparent manner. These announcements are published
through the Malta Stock Exchange and are simultaneously made available on the Investors’ section of the Group’s
website, ensuring equal and immediate access to information for all market participants.
Conflict of Interest
The Board of Directors remains fully aware of its responsibilities in relation to the proper management and
disclosure of conflicts of interest, particularly in relation to dealings in the securities of the Group. The Directors
and other persons discharging managerial responsibilities are required to comply with the applicable provisions
of the Capital Markets Rules governing transactions in the Group’s securities and the related disclosure
obligations.
The Group has established appropriate procedures to ensure that any dealings in the Group’s securities by
Directors or other relevant persons are carried out in accordance with the applicable regulatory framework and
are duly disclosed when required.
Furthermore, transactions with related parties are conducted in accordance with the relevant regulatory
requirements and governance standards. Such transactions are appropriately reviewed and disclosed in line with
the applicable rules, and detailed information regarding related party transactions is provided in the relevant
section of the Annual Consolidated Financial Statements included in this Annual Financial Report. In addition to
prior information disclosed, specific section detailing the Management Services Agreement arrangements is
dedicated in Group’ Annual Financial Report, to ensure transparency of the relationship of the parties and their
duties and responsibilities, presenting that though this agreement executive management’s interests are fully
aligned with those of the Shareholders and the Group.
Through these measures, the Board seeks to ensure that the Group maintains high standards of transparency,
accountability and integrity in its dealings with shareholders and the market
Signed on behalf of the Board of Directors on 29 April 2026 by Mr. Julian Tzvetkov (Director) and Dr. Andrei
Imbroll (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction
with the Annual Financial Report and Consolidated Financial Statements.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
29
STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December
| Notes | 2025 | 2024 | |
| € | € | ||
| Revenue | 3 | ||
| Investment income | 4 | ||
| Cost of sales | 5 | ( | ( |
| Gross profit | |||
| Other operating income | 6 | | |
| Administrative expenses | 5 | ( | ( |
| Earnings before interest, tax, depreciation and amortisation | |||
| Depreciation and amortisation | 5 | ( | ( |
| Operating income | |||
| Interest income | 7 | | |
| Gain on disposal of financial assets | | ||
| Finance costs | 8 | ( | ( |
| Profit before income tax | |||
| Income tax expense | 9 | ( | ( |
| Profit for the year | |||
| Other comprehensive loss: | |||
| Items that may be reclassified subsequently to profit or loss Revaluation of financial assets at FVOCI, net of tax | | ( | |
| Total comprehensive income for the year | |||
| Earnings per share |
The notes on pages 33 to 59 are an integral part of these consolidated financial statements.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
30
STATEMENT OF FINANCIAL POSITION
As at 31 December
| Notes | 2025 | 2024 | |
| € | € | ||
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 10 | ||
| Property, plant and equipment | 11 | ||
| Investment properties | 12 | ||
| Investment in a subsidiary | 13 | ||
| Financial assets at fair value through other comprehensive income | 14 | ||
| Deferred tax assets | 16 | ||
| Current assets | |||
| Financial assets at fair value through other comprehensive income | 14 | ||
| Inventory | |||
| Current tax receivable | |||
| Loans receivable | 15 | ||
| Trade and other receivables | 17 | ||
| Cash and cash equivalents | 18 | ||
| TOTAL ASSETS | |||
| EQUITY AND LIABILITIES | |||
| Capital and reserves | |||
| Share capital | |||
| Share premium | |||
| Other reserves | 19 | ||
| General reserves | 19 | ||
| Retained earnings | 19 | ||
| TOTAL EQUITY | |||
| Non-current liabilities | |||
| Borrowings | 20 | ||
| Lease liabilities | 21 | ||
| Deferred tax liability | 22 | ||
| Trade and other payables | 23 | ||
| Current liabilities | |||
| Income tax payable | |||
| Borrowings | 20 | ||
| Lease liabilities | 21 | ||
| Trade and other payables | 23 | ||
| TOTAL LIABILITIES | |||
| TOTAL EQUITY AND LIABILITIES |
The notes on pages 33 to 59 are an integral part of these consolidated financial statements.
Signed on behalf of the Board of Directors on 29 April 2026 by Mr. Julian Tzvetkov (Director) and Dr. Andrei Imbroll
(Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual
Financial Report and Consolidated Financial Statements.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
| STATEMENT OF CHANGES IN EQUITY | Sharecapital | Sharepremium | Otherreserves | Generalreserves | Retainedearnings | Total |
| € | € | € | € | € | € | |
| Balance at 1 January 2024 | | | | | ||
| Total comprehensive income - Profit for the year | | | | |||
| Other comprehensive income | ||||||
| Items that will be reclassified subsequently to profit or loss - Revaluation of financial assets at FVOCI | | ( | | ( | ||
| Transactions with ownersin their capacity as owners - Dividends declared during the period (Note 19) | | | | ( | ( | |
| Transfer from revaluation reserve to retained earnings, net of deferred tax | ( | | | |||
| Balance at 31 December 2024 | ||||||
| Balance at 1 January 2025 | | | | | ||
| Comprehensive income - Profit for the year | | | | | ||
| Other comprehensive incomeItems that will be reclassified subsequently to profit or loss - Revaluation of financial assets at FVOCI | | | | | ||
| Transactions with owners in their capacity as owners - Dividends declared during the period (Note 19) | | | | ( | ( | |
| Transfer from revaluation reserve to retained earnings, net of deferred tax | ( | | | |||
| Balance at 31 December 2025 |
31
The notes on pages 33 to 59 are an integral part of these consolidated financial statements.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
32
STATEMENT OF CASH FLOWS
for the year ended 31 December
| Notes | 2025 | 2024 | |
| € | € | ||
| Cash flows from operating activities | |||
| Profit before tax | |||
| Depreciation and amortisation | 5 | ||
| Amortisation of bond issuance costs | |||
| Investment income | 4 | ( | ( |
| Interest income | 7 | ( | ( |
| Interest expense | 8 | ||
| Cash flows generated before working capital changes | |||
| Decrease/(increase) in inventories | ( | ||
| Increase in trade and other receivables | ( | ( | |
| (Decrease)/increase in trade and other payables | ( | ||
| Taxes paid | ( | ( | |
| Net cash flows generated from operating activities | |||
| Cash flows frominvesting activities | |||
| Purchase of property, plant and equipment | 11 | ( | ( |
| Acquisition of investment properties | ( | ( | |
| Purchase of financial assets at FVOCI | 14 | ( | ( |
| Redemptions of financial assets at FVOCI | 14 | - | |
| Net cash flows generatedfrom/(used in)investing activities | ( | ||
| Cash flows from financing activities | |||
| Proceeds from bond issuance | |||
| Interest paidon borrowings | ( | ( | |
| Dividends paid | 19 | ( | ( |
| Movement in borrowings | 20 | ||
| Principal lease payments | 21 | ( | ( |
| Interest paid on leases | 21 | ( | ( |
| Net cash flows (used in)/generated fromfinancing activities | ( | ||
| Net (decrease)/increasein cash and cash equivalents | ( | ||
| Cash and cash equivalents at the beginning of theyear | |||
| Cash and cash equivalents at end of year | 18 |
The notes on pages 33 to 59 are an integral part of these consolidated financial statements.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
1. MATERIAL ACCOUNTING POLICY INFORMATION - continued
| Building improvements | 2% Straight Line |
| Office equipment | 20% Straight Line |
| Furniture and fixtures | 20% Straight Line |
| Other assets | 20% Straight Line |
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
1. MATERIAL ACCOUNTING POLICY INFORMATION - continued
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
1. MATERIAL ACCOUNTING POLICY INFORMATION - continued
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
1. MATERIAL A CCOUNTING POLICY INFOR MATION - co ntinued
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
| 2025 | 2024 | |
| € | € | |
| Rental income | 3,726,675 | 3,485,950 |
| Service fee income | 469,756 | 297,297 |
| Management fees | 70,978 | 72,677 |
| Other revenue | 426,001 | 209,443 |
| 4,693,410 | 4,065,367 |
| 2025 | 2024 | |
| € | € | |
| Increasein fair value of investment properties | 1,423,803 | 2,558,543 |
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
| 2025 | 2024 | |
| € | € | |
| Direct costs | 1,725,784 | 1,702,351 |
| Employee benefit expense(i) | 655,120 | 555,918 |
| Directors’ fees | 79,000 | 76,049 |
| Auditor’s remuneration: | ||
| Audit fee | 22,500 | 18,500 |
| Other non-assurance services | 1,850 | 950 |
| Management fees from related party | 181,502 | 252,587 |
| Other administrative expenses | 317,696 | 317,482 |
| 3,626,592 | 3,390,234 |
| 2025 | 2024 | |
| € | € | |
| Salaries and wages | 737,160 | 631,480 |
| Social security and maternity fund contributions | 39,245 | 37,597 |
| Capitalised salaries | (121,285) | (113,159) |
| 655,120 | 555,918 | |
| Average number of employees | 25 | 24 |
| 2025 | 2024 | |
| € | € | |
| Miscellaneous income | 20,800 | 21,673 |
| 2025 | 2024 | |
| € | € | |
| Interest on financial assets at FVOCI | 80,281 | - |
| Loan interest | 29,232 | 13,901 |
| Bank interest | 7,134 | 3,776 |
| 116,647 | 17,677 |
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
| 2025 | 2024 | |
| € | € | |
| Interest on bank and other loans | 177,381 | 163,248 |
| Interest on bonds | 555,457 | 89,786 |
| Interest on lease liabilities | 82,529 | 74,176 |
| 815,367 | 327,210 |
| 2025 | 2024 | |
| € | € | |
| Current year tax | ||
| Income tax on the taxable income for the year | 135,767 | 7,472 |
| Final withholding tax | 1,070 | 650 |
| Deferred tax | ||
| Movement in deferred tax asset (Note 16) | 59,695 | (231,812) |
| Movement in deferred tax liability (Note 22) | 79,361 | 675,237 |
| Movement in revaluation reserve | 12,251 | 12,251 |
| 288,144 | 463,798 |
| 2025 | 2024 | |
| € | € | |
| Profit on ordinary activities before tax | 1,862,049 | 2,945,816 |
| Theoretical tax expense at 35%Tax effect of: | 651,717 | 1,031,036 |
| Effect of different tax rate used for interest income | (1,427) | (5,537) |
| Effect of different tax rate used in fair value gain on investment | (355,303) | (409,744) |
| Other movement | (6,843) | (151,957) |
| 288,144 | 463,798 |
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
| Licences | Non-competerights | Brand | Total | |
| € | € | € | € | |
| Cost | ||||
| At 1 January 2025 | 349 | 150,000 | 66,000 | 216,349 |
| Additions | - | - | - | - |
| At 31 December 2025 | 349 | 150,000 | 66,000 | 216,349 |
| Provision for diminutionvalue | ||||
| At 1 January 2025 | 348 | 120,000 | 42,800 | 163,148 |
| Amortisation for the year | 1 | 30,000 | 13,200 | 43,201 |
| At 31 December 2025 | 349 | 150,000 | 56,000 | 206,349 |
| Net book value | ||||
| At 31 December 2024 | 1 | 30,000 | 23,200 | 53,201 |
| At 31 December 2025 | - | - | 10,000 | 10,000 |
| Right-of-use assets | Buildingimprove-ments | Officeequipment | Furnitureandfixtures | Otherassets | Total | |
| € | € | € | € | € | € | |
| Cost | ||||||
| At 1 January 2025 | 1,035,369 | 100,806 | 43,962 | 43,104 | 259,137 | 1,482,378 |
| Additions | - | - | 17,349 | 4,222 | - | 21,571 |
| At 31 December 2025 | 1,035,369 | 100,806 | 61,311 | 47,326 | 259,137 | 1,503,949 |
| Depreciation | ||||||
| At 1 January 2025 | 414,147 | 24,871 | 43,314 | 28,081 | 236,403 | 746,816 |
| Charge for the year | 51,816 | 2,016 | 3,867 | 1,726 | 13,646 | 73,071 |
| At 31 December 2025 | 465,963 | 26,887 | 47,181 | 29,807 | 250,049 | 819,887 |
| Net book value | ||||||
| At 31 December 2024 | 621,222 | 75,935 | 648 | 15,023 | 22,734 | 735,562 |
| At 31 December 2025 | 569,406 | 73,919 | 14,130 | 17,519 | 9,088 | 684,062 |
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
| Right-of-use assets | Investment properties | Total | |
| € | € | € | |
| Fair value | |||
| At 1 January 2025 | 2,825,579 | 82,140,689 | 84,966,268 |
| Additions | 433,727 | 2,621,896 | 3,055,623 |
| Fair value movement | 93,013 | 1,330,790 | 1,423,803 |
| At 31 December 2025 | 3,352,319 | 86,093,375 | 89,445,694 |
| Provision | |||
| At 1 January 2025 | 263,709 | 1,351,190 | 1,614,899 |
| Depreciation | 272,682 | 254,186 | 526,868 |
| At 31 December 2025 | 536,391 | 1,605,376 | 2,141,767 |
| Net book value | |||
| At 31 December 2024 | 2,561,870 | 80,789,499 | 83,351,369 |
| At 31 December 2025 | 2,815,928 | 80,789,499 | 87,303,927 |
| 2025 | 2024 | |
| € | € | |
| Minimum lease commitments receivable but not recognised in the financial statements: | ||
| 1 year or less | 512,644 | 490,997 |
| Between 1 and 2 years | 466,284 | 502,311 |
| Between 2 and 3 years | 406,258 | 432,792 |
| Between 3 and 4 years | 334,574 | 421,655 |
| Between 4 and 5 years | 240,640 | 305,686 |
| Over 5 years | 562,823 | 803,559 |
| 2,523,223 | 2,957,000 |
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
12. INVESTMENT PROPERTIES - continued
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
12. INVESTM ENT PROPERTI ES - continued
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
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47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
| Subsidiary | Registered address | Class of shares | % of ownership | |
| 2025 | 2024 | |||
| Silver Horse | 54, Marsamxett Road | Ordinary Shares | 100 | 100 |
| Block Ltd | Valletta VLT 1853, Malta |
| Capital and reserves | Profit | |
| € | € | |
| Subsidiary | ||
| Silver Horse Block Ltd | 1,200 | - |
| 2025 | 2024 | |
| € | € | |
| Quoted debt instruments | ||
| Balance as at 1 January | 9,105,174 | - |
| Additions during the year | 2,096,027 | 9,113,992 |
| Redemptions during the year | (5,205,654) | - |
| Movement in fair value | 48,797 | (8,818) |
| Balance as at 31 December | 6,044,344 | 9,105,174 |
| 2025 | 2024 | |
| € | € | |
| Non-current | - | 3,898,107 |
| Current | 6,044,344 | 5,207,067 |
| 6,044,344 | 9,105,174 |
| 2025 | 2024 | |
| € | € | |
| Loan to third-party(i) | 132,478 | 126,228 |
(i) The loan receivab le bears 6% interest rat e per annum. The loan was not repa id during the year ,
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
| 2025 | 2024 | |
| € | € | |
| Excess of capital allowances over depreciation | (295,817) | (184,459) |
| Unamortised bond issue costs | 111,137 | - |
| Lease liabilities | 498,911 | 558,385 |
| 314,231 | 373,926 |
| 2025 | 2024 | |
| € | € | |
| Balance at beginning of the year | 373,926 | 142,114 |
| Movement in the excess of capital allowances over depreciation | (111,358) | (102,119) |
| Movement in unamortised bond issue costs | 111,137 | - |
| Movement in unabsorbed tax losses and capital allowances | - | (124,077) |
| Movement in lease liabilities | (59,474) | 458,008 |
| Balance at end of year | 314,231 | 373,926 |
| 2025 | 2024 | |
| € | € | |
| Trade receivables (i) | 216,967 | 238,668 |
| VAT refundable | 182,080 | 158,149 |
| Prepayments and accrued income | 91,640 | 99,585 |
| Accrued interest | 21,233 | 27,136 |
| Accrued service fee | 267,053 | - |
| Advances to employees | 37,665 | 15,815 |
| Other receivables | 105,902 | 39,819 |
| 922,540 | 579,172 | |
| Provision for expected credit losses | (39,055) | (39,055) |
| 883,485 | 540,117 |
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
| 2025 | 2024 | |
| € | € | |
| Cash at banks | 1,077,494 | 1,084,951 |
| Cash in hand | 943 | 980 |
| 1,078,437 | 1,085,931 |
| 2025 | 2024 | |
| € | € | |
| Share Capital | ||
| Authorised:330,000,000 Ordinary shares of €0.20 each | 66,000,000 | |
| 66,000,000 | ||
| Issued and fully paid:249,179,183 Ordinary shares of €0.20 each | 49,835,837 | 49,835,837 |
| Share premium | The amount subscribed for share capital in excess of par value. |
| General reserve | The amount of the issued share capital reduction after the restructuring of the Group completed in 2019, retained in the Group, not distributed to theshareholders. |
| Other reserves | Non-distributable reserves for fair value revaluation on theoffice building and financial assets at FVOCI |
| Retained earnings | All other net earnings or profit after accounting for dividends. |
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
| 2025 | 2024 | |
| € | € | |
| Non-current | ||
| Bank borrowings (i) | 8,903,837 | 8,898,957 |
| Bonds payable (ii) | 9,682,462 | 9,647,005 |
| 18,586,299 | 18,545,962 | |
| Current | ||
| Bank borrowings (i) | 871,850 | 590,709 |
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
20. BORROWINGS - continued
| 2025 | 2024 | |
| € | € | |
| Minimum lease payments | ||
| Due after more than five years | 1,329,565 | 1,406,615 |
| Due after one year but within five years | 504,827 | 716,617 |
| Due within one year | 353,474 | 309,801 |
| Total gross lease liabilities | 2,187,866 | 2,433,033 |
| Discounting | (762,409) | (837,648) |
| Present value of lease liabilities | 1,425,457 | 1,595,385 |
| 2025 | 2024 | |
| € | € | |
| At 1 January | 1,595,385 | 286,791 |
| Additions | 68,902 | 1,403,417 |
| Interest expense | 82,529 | 74,176 |
| Gross lease payments | (321,359) | (168,999) |
| At 31 December | 1,425,457 | 1,595,385 |
| 2025 | 2024 | |
| € | € | |
| Non-current portion | 1,134,044 | 1,361,732 |
| Current portion | 291,413 | 233,653 |
| At 31 December | 1,425,457 | 1,595,385 |
| 2025 | 2024 | |
| € | € | |
| Depreciation | 324,498 | 197,351 |
| Interest expense | 82,529 | 74,176 |
| 407,027 | 271,527 |
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
| 2025 | 2024 | |
| € | € | |
| Effect of fair value movement on investment properties | 4,919,450 | 4,776,423 |
| Right-of-use assets | 209,006 | 272,672 |
| 5,128,456 | 5,049,095 |
| 2025 | 2024 | |
| € | € | |
| Balance at beginning of the year | 5,049,095 | 4,373,858 |
| Movement of investment properties fair value | 143,027 | 485,746 |
| Movement in right-of-use assets | (63,666) | 189,491 |
| Balance at end of year | 5,128,456 | 5,049,095 |
| 2025 | 2024 | |
| € | € | |
| Non-current | ||
| Deposits on lease agreements | 137,030 | 122,729 |
| Current | ||
| Trade payables (i) | 308,949 | 159,922 |
| Accruals(ii) | 546,497 | 1,222,594 |
| Deposits on properties | 9,449 | 3,487 |
| Bond interest payable | 89,613 | 83,778 |
| Dividendspayable | 19,115 | 155 |
| Contract liabilities | 15,807 | 13,040 |
| Other payables | 53,469 | 247,819 |
| 1,042,899 | 1,730,795 |
(i) Trade payabl es are non-inter est bearing and are normally on 30 to 60 day term.
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
| 2025 | 2024 | |
| € | € | |
| Capitalised property development expenses-VBLM | 544,504 | 757,762 |
| Management fees expenses-VBLM | 181,501 | 252,587 |
| Directors travel reimbursement | 1,333 | 2,277 |
| 2025 | 2024 | |
| Profit attributable to equity holders of the Group | €1,573,905 | €2,482,018 |
| Weighted average number of shares in issue | 249,179,183 | 249,179,183 |
| Basic and diluted earnings per share | €0.0063 | €0.0100 |
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
| Change | Increase/(decrease)in profitfor the year | Increase/(decrease)in equity | |
| € | € | € | |
| 2025 | (0.04) | - | (9,967,167) |
| 2024 | (0.04) | - | (9,967,167) |
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
26. FINANCIAL R ISK MANAGEMENT - continued
| 2025 | 2024 | |
| € | € | |
| Financial assets | ||
| Financial assets at FVOCI | 6,044,344 | 9,105,174 |
| Loan receivable | 132,478 | 126,228 |
| Trade and other receivables | 883,485 | 540,117 |
| Cash at banks | 1,077,494 | 1,084,951 |
| 2025 | 2024 | |
| € | € | |
| Bank overdrafts | 500,000 | 500,000 |
| Bank borrowings | 4,871,896 | 5,729,018 |
| 5,371,896 | 6,229,018 |
| Within one year | One to five years | More than five years | |
| € | € | € | |
| 2025 | |||
| Financial liabilities: | |||
| Bonds and interest payable | 425,364 | 2,085,424 | 12,084,435 |
| Bank borrowings | 1,171,108 | 5,722,515 | 5,368,222 |
| Lease liabilities | 353,474 | 504,827 | 1,329,565 |
| Trade and other payables | 855,446 | - | - |
| 2,805,392 | 8,312,766 | 18,782,222 |
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
26. FINANCIAL RISK MANAGEMENT - continued
Liquidity risk - continued
| Within oneyear | One to fiveyears | More thanfive years | |
| € | € | € | |
| 2024 | |||
| Financial liabilities: | |||
| Bonds and interest payable | 425,364 | 2,085,424 | 12,605,434 |
| Bank borrowings | 1,019,718 | 3,228,674 | 9,002,894 |
| Lease liabilities | 309,801 | 716,617 | 1,406,615 |
| Trade and other payables | 1,382,516 | - | - |
| 3,137,399 | 6,030,715 | 23,014,943 |
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
| Bonds payable(Note 20) | Bank borrowings (Note 20) | Leaseliabilities(Note 21) | Total | |
| € | € | € | € | |
| Balance at 01 January 2025 | 9,647,005 | 9,489,666 | 1,595,385 | 20,732,056 |
| Drawdowns | - | 857,071 | - | 857,071 |
| Repayments | - | (571,048) | (238,830) | (809,878) |
| Interest paid | - | (449,657) | (82,529) | (532,186) |
| Non-cash transactions: | ||||
| Additions | - | - | 68,902 | 68,902 |
| Interest expense | - | 176,771 | 82,529 | 259,300 |
| Amortisation of bond issuance costs | 35,457 | - | - | 35,457 |
| Capitalised borrowing costs | - | 317,228 | - | 317,228 |
| Other movements | - | (44,344) | - | (44,344) |
| Balance at 31 December 2025 | 9,682,462 | 9,775,687 | 1,425,457 | 20,883,606 |
| Bonds payable(Note 20) | Bank borrowings (Note 20) | Leaseliabilities(Note 21) | Total | |
| € | € | € | € | |
| Balance at 01 January 2024 | - | 8,270,631 | 286,791 | 8,557,422 |
| Drawdowns | - | 1,563,818 | - | 1,563,818 |
| Repayments | - | (397,832) | (94,823) | (492,655) |
| Interest paid | - | (412,855) | (74,176) | (487,031) |
| Proceeds from issuance net of bond issue costs | 9,640,997 | - | - | 9,640,997 |
| Non-cash transactions: | ||||
| Additions | - | - | 1,403,417 | 1,403,417 |
| Interest expense | - | 163,248 | 74,176 | 237,424 |
| Amortisation of bond issuance costs | 6,008 | - | - | 6,008 |
| Capitalised borrowing costs | - | 280,976 | - | 280,976 |
| Other movements | - | 21,680 | - | 21,680 |
| Balance at 31 December 2024 | 9,647,005 | 9,489,666 | 1,595,385 | 20,732,056 |
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
VBL Plc
Annual Financial Report and Consolidated Financial Statements - 31 December 2025
__________________________________________________________________________________________
59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
28. FAIR VALUE MEASUREMENT - continued
| Property | Unobservable input | Sensitivity |
| Silver Horse Block Phase 2 | Discount rate | A 0.5% change in discount rate would increase/ decrease the fair value by approximately €1.1 million (4%) |
| Growth rate | A 0.5% change in growth rate would increase/ decrease the fair value by approximately €1.4 million (5%) |
RSM Malta is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network.
Each member of the RSM network is an independent accounting and consulting firm which practices in its own right.
The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Malta
Mdina Road,
Ħaż-Żebbu
ġ, Malta
ZBG 9015
T: 356 2278 7000
www.rsm.com.mt
60
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of VBL Plc
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the accompanying consolidated financial statements of VBL Plc (“the Company”) and
its subsidiaries (together, “the Group”) set out on pages 29 to 59, which comprise the consolidated
statement of financial position as at 31 December 2025, 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 consolidated financial statements, including a summary of material
accounting policy information.
In our opinion, the consolidated financial statements give a true and fair view of the financial position of
the Group as at 31 December 2025, and of its financial performance and its cash flows for the year then
ended in accordance with International Financial Reporting Standards (IFRS Accounting Standards) as
adopted by the European Union (EU), and have been properly prepared in accordance with the
requirements of the Maltese Companies Act (Cap. 386).
Our opinion is consistent with our additional report to the Audit Committee in accordance with the
provision of Article 11 of the EU Regulation No. 537/2014 on specific requirements regarding statutory
audits of public-interest entities.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Financial Statements section of our report. We are independent of the Group in accordance with
the ethical requirements of both the International Ethics Standards Board for Accountants’ International
Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA
Code) and the Accountancy Profession (Code of Ethics for Warrant Holders) Directive issued in terms
of the Accountancy Profession Act (Cap. 281) in Malta that are relevant to our audit of the consolidated
financial statements, and we have fulfilled our other ethical responsibilities in accordance with the IESBA
Code and the Code of Ethics for Warrant Holders in Malta. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, we declare that non-audit services that we have provided to
the Group are in accordance with the applicable laws and regulations in Malta and that we have not
provided any non-audit services that are prohibited under Article 18A of the Accountancy Profession Act
(Cap 281).
The non-audit services that we have provided to the Group are disclosed in Note 5 to these consolidated
financial statements.
61
INDEPENDENT AUDITOR’S REPORT - continued
To the Shareholders of VBL Plc
Report on the Audit of the Consolidated Financial Statements - continued
Key Audit Matters
Key audit matters are those matters that, in our professional judgement were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in
the context of our audit of the consolidated 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 €87,303,927 as at 31 December 2025.
Further detail is included in Note 12 to these consolidated financial statements.
The existence of significant estimates used to arrive at the fair value of the property, could result in a
potential material misstatement by virtue of the inherent limitations underlying the estimations.
Consequently, specific audit focus and attention was given to this area. The valuation of the property
was performed by management on the basis of valuation reports prepared by an independent qualified
valuer and the Board of Directors’ assessment which considers various specific developments and
adjusted for property-specific status of the ongoing development projects, as well as the investment
value potential for the VBL asset portfolio.
Audit Response
We understood and evaluated the assessment performed by management on the basis of the
revaluations performed by a professional qualified valuer and the Board of Directors’ assessment to
ascertain the fair value of the investment properties.
Our audit procedures included amongst others:
Considering the objectivity, independence, competence and capabilities of the external valuer.
Considering the objectivity, competence and capabilities of the management and directors.
Reviewing the methodology used by the external valuer and management to estimate the value of
the property.
Assessing and challenging the significant unobservable inputs and assumptions that were applied
in the valuations made.
Assessing the reasonableness of the valuations by reference to market evidence of transactions
for similar properties.
Conducting discussions with the independent professional valuer, management and directors.
We concluded, based on our audit work, that the outcome of the assessment is reasonable.
In addition, we reviewed the adequacy of disclosures made in Note 12 to these consolidated financial
statements and concluded that these are adequate.
62
INDEPENDENT AUDITOR’S REPORT - continued
To the Shareholders of VBL Plc
Report on the Audit of the Consolidated Financial Statements - continued
Other Information
The directors are responsible for the other information. The other information comprises the general
information, directors’ report, remuneration report and statement of the directors and statement by the
directors on compliance with the Code of Principles of Good Corporate Governance, but does not
include the consolidated financial statements and our auditor’s report thereon. Our opinion on the
consolidated financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon, except as explicitly stated within the Report on Other Legal and
Regulatory Requirements.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information identified above and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If, based on the work we have performed on the other
information that we have obtained prior to the date of this auditor’s report, we conclude that there is a
material misstatement of this other information, we are required to report that fact. We have nothing to
report in this regard.
Under Article 179(3) of the Maltese Companies Act (Cap. 386), we are required to consider whether the
information given in the directors’ report is compliant with the disclosure requirements of Article 177 of
the same Act.
Based on the work we have performed, in our opinion:
• the directors’ report has been prepared in accordance with the Maltese Companies Act (Cap. 386);
• the information given in the directors’ report for the financial year for which the consolidated
financial statements are prepared is consistent with the consolidated financial statements; and
• in light of our knowledge and understanding of the Company and its environment obtained in the
course of the audit, we have not identified material misstatements in the directors’ report.
Responsibilities of the Directors for the Consolidated Financial Statements
The directors are responsible for the preparation of consolidated financial statements that give a true
and fair view in accordance with IFRS Accounting Standards as adopted by the EU and the requirements
of the Maltese Companies Act (Cap. 386), and for such internal control as the directors determine is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to liquidate
the Group or to cease operations, or have no realistic alternative but to do so.
The directors have delegated the responsibility for overseeing the Group's financial reporting process
to the Audit Committee.
63
INDEPENDENT AUDITOR’S REPORT - continued
To the Shareholders of VBL Plc
Report on the Audit of the Consolidated Financial Statements - continued
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s 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 consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
Evaluate the overall presentation, structure, and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
64
INDEPENDENT AUDITOR’S REPORT - continued
To the Shareholders of VBL Plc
Report on the Audit of the Consolidated Financial Statements - continued
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements - continued
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore
the key audit matters. We describe these matters in 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.
Report on Other Legal and Regulatory Requirements
Report on the Statement of Compliance with the Code of Principles of Good Corporate
Governance
The Capital Market Rules issued by the Malta Financial Services Authority require the directors to
prepare and include in their Annual Report a Statement of Compliance with the Code of Principals of
Good Corporate Governance within Appendix 5.1 to Chapter 5 of the Capital Market Rules. The
Statement’s required minimum contents are determined by reference to Capital Markets Rule 5.97. The
Statement provides explanations as to how the Company has complied with the provisions of the Code,
presenting the extent to which the Company has adopted the Code and the effective measures the
Board has taken to ensure compliance throughout the accounting period with those Principles.
The Capital Markets Rules also require the auditor to include a report on the Statement of Compliance
prepared by the directors.
We read the Statement of Compliance and consider the implications for our report if we become aware
of any apparent misstatements or material inconsistencies with the consolidated financial statements
included in the Annual Report with respect to the information referred to in the Capital Market Rules
5.97.4 and 5.97.5. We also assessed whether the Statement of Compliance includes all the other
information required to be presented as per Capital Market Rules 5.97. Our responsibilities do not extend
to considering whether this statement is consistent with any other information included in the Annual
Report.
We are not required to, and we do not, consider whether the Board’s statements on internal control
included in the Statement of Compliance cover all risks and controls, or form an opinion on the
effectiveness of the Group’s corporate governance procedures or its risk and control procedures. In our
opinion, the Statement of Compliance with the Principles of Good Corporate Governance set out on
pages 20 to 28 has been properly prepared in accordance with the requirements of the Capital Markets
Rules issued by the Malta Financial Services Authority.
65
INDEPENDENT AUDITOR’S REPORT - continued
To the Shareholders of VBL Plc
Report on Other Legal and Regulatory Requirements - continued
Report on the Remuneration Statement
The Capital Markets Rules issued by the Malta Financial Services Authority requires the directors to
prepare a remuneration statement. We are required to consider whether the information that should be
provided under the Remuneration Statement has been included.
In our opinion, the Remuneration Statement has been properly prepared in accordance with the
requirements of the Capital Markets Rules issued by the Malta Financial Services Authority.
Report on compliance with the requirements of the European Single Electronic Format
Regulatory Technical Standard (the “ESEF RTS”), by reference to Capital Markets Rule 5.55.6
We have undertaken a reasonable assurance engagement in accordance with the requirements of
Directive 6 issued by the Accountancy Board in terms of the Accountancy Profession Act (Cap. 281) –
the Accountancy Profession (European Single Electronic Format) Assurance Directive (the “ESEF
Directive 6”) on the annual financial report of VBL plc for the year ended 31 December 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
consolidated financial statements and the relevant mark-up requirements therein, by reference to
Capital Markets Rule 5.56A, in accordance with the requirements of the ESEF RTS.
Auditor’s responsibilities
Our responsibility is to obtain reasonable assurance about whether the annual financial report, including
the consolidated financial statements and the relevant electronic tagging therein comply in all material
respects with the ESEF RTS based on the evidence we have obtained. We conducted our reasonable
assurance engagement in accordance with the requirements of ESEF Directive 6.
Our procedures included:
• Obtaining an understanding of the entity’s financial reporting process, including the preparation of
the annual financial report, in accordance with the requirements of the ESEF RTS.
• Obtaining the annual financial report and performing validations to determine whether the annual
financial report has been prepared in accordance with the requirements of the technical
specifications of the ESEF RTS.
• Examining the information on the annual financial report to determine whether all the required
taggings therein have been applied and whether, in all material respects, they are in accordance
with the requirements of the ESEF RTS.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
66
INDEPENDENT AUDITOR’S REPORT - continued
To the Shareholders of VBL Plc
Report on Other Legal and Regulatory Requirements - continued
Opinion
In our opinion, the annual financial report for the year ended 31 December 2025 has been prepared, in
all material respects, in accordance with the requirements of the ESEF RTS.
Other matters on which we are required to report by exception
Under the Maltese Companies Act (Cap. 386), we are required to report to you if, in our opinion:
• proper accounting records have not been kept; or
• proper returns adequate for our audit have not been received from branches we have not visited;
or
• the consolidated financial statements are not in agreement with the accounting records and returns;
or
• we were unable to obtain all the information and explanations which, to the best of our knowledge
and belief, are necessary for the purposes of our audit.
We also have responsibilities under the Capital Markets Rules to review the statement made by the
directors that the business is a going concern together with supporting assumptions or qualifications as
necessary.
We have nothing to report to you in respect of these responsibilities.
Appointment
We were first appointed to act as auditors of the Group by the shareholders of the Company on 14
December 2021 for the year ended 31 December 2021, and we were subsequently reappointed by the
shareholders at the Company’s general meeting for the financial year thereafter. The period of
uninterrupted engagement as statutory auditor of the Group is five financial periods.
RSM Malta
Registered Auditors
Mdina Road
Zebbug ZBG 9015
Malta
Conrad Borg
Principal
29 April 2026