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Company Registration No.: C 5067 # Hal Mann Vella Group p.l.c. Annual Report and Consolidated Financial Statements for the year ended 31 December 2025
Contents
Chairman’s Statement
Directors' Report
Corporate Governance - Statement of Compliance
Independent Auditors' Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
# Chairman’s Statement for the year ended 31 December 2025 The financial year ended 31 December 2025 marks another year of stable performance for the Group, underscoring the strength and resilience of our business. Despite operating in an environment characterised by evolving economic conditions, cost pressures, and ongoing labour market challenges in Malta, the Group continued to perform steadily, supported by the discipline we demonstrate in managing our operations and investments. Our performance during the year reflects the value of our balanced business model. Through our three core segments of Manufacturing and Contracting, Property Letting, and Property Development, we maintain a diversified structure that enables us to navigate market dynamics while sustaining consistent results for the Group. Our performance During the year, the Group continued to focus on operational efficiency, prudent financial management, and the careful execution of its strategy. Our Manufacturing and Contracting segment remained the principal driver of activity, supported by continued demand for high-quality stone and related products, as well as our ability to deliver complex and flagship projects that showcase the Group’s technical capabilities and commitment to quality. The Property Letting segment once again delivered a stable contribution to the Group’s performance. Our portfolio of commercial properties continues to provide predictable income streams, reinforcing the stability that this segment brings to the Group’s overall financial position. Activity within the Property Development segment remained measured and selective, focusing on carefully chosen projects and maintaining prudent exposure to development risk. Across all segments, our results were achieved in evolving economic conditions marked by wage pressures, skills shortages, and persistent cost inflation. Through careful cost management, strategic investment, and a strong focus on productivity, the Group remained well positioned to address these challenges while maintaining steady financial performance. The trust placed in us by our customers remains central to our success. Our long-standing relationships, built on quality, reliability, and professionalism, continue to provide the foundation for our continued growth and reputation in the market. Corporate Social Sustainability We remain committed to conducting our operations in a responsible and sustainable manner. Over recent years, the Group has implemented a number of initiatives aimed at reducing its environmental footprint, including the use of renewable energy through solar panels, water recycling systems across our facilities, and the adoption of more efficient technologies within our operations. These measures continue to support our efforts to operate more sustainably while maintaining operational efficiency. At the same time, we continue to foster a workplace culture that prioritises safety, inclusion, and well being. Our progress would not have been possible without the dedication and professionalism of our people. We continue to invest in their development, recognising that their expertise, integrity and customer focus are the foundation of our success. Looking Forward Looking ahead, global and local economic conditions remain subject to elevated levels of uncertainty. We are however confident that with the investments that we made in recent years we are well positioned to navigate these challenges. We remain committed to building on our solid foundations by continuing to invest in our capabilities, strengthening our relationships with customers and partners, and pursuing sustainable growth opportunities as they arise. I would like to express my sincere appreciation to my colleagues on the Board of Directors, the Management team, and all our employees for their continued dedication and professionalism. I also extend my gratitude to our customers, partners, and investors for the trust they place in the Group. Their continued support remains fundamental as we work together to build a strong and sustainable future. _______________________________ Mr. Martin Vella Chairman # Directors' Report for the year ended 31 December 2025 The Board of Directors are hereby presenting their annual report together with the audited financial statements of the Group and the Company for the year ended 31 December 2025. Principal activities The principal activity of the Company is to hold assets for the Group and also acts as the financing arm of the Group. The principal activities of the Group relate to the manufacture and business of stone, marble and granite as well as the manufacture of terrazzo and pre-cast elements. The Group owns and leases a number of commercial properties and is also involved in property development and resale. Review of business During the financial year ended 31 December 2025, the Group registered a solid improvement in its core operating activity, with total revenue increasing to €31.96 million from €27.05 million in 2024, representing growth of approximately 18%. This increase was primarily driven by higher revenue from the manufacturing and contracting segment, complemented by stable rental income. Gross profit rose to €11.15 million (2024: €9.90 million), maintaining a consistent margin despite higher cost of sales, which increased in line with revenue growth. Increase in Administrative expenses were primarily driven by salaries whereas year-on-year depreciation charge was higher as it continues to reflect the ongoing investments. Operating profit for the year amounted to €5.81 million, compared to €5.65 million in 2024. The prior year’s result included a non-recurring gain from the disposal of investment property. The Group registered a profit before tax of €2.079 million (2024: €4.052 million), with the variance largely attributable to the absence of prior year fair value gains of investment properties and a non-recurring profit from the disposal of investment property. The Company registered a profit before tax of €1.09 million during the year ended 31 December 2025 (2024: €1.17). The Group’s total assets stood at €131.96 million (2024: €138.16 million). Equity strengthened to €57.37 million (2024: €53.88 million), supported by retained earnings. The Bond Issue In terms of a prospectus dated 28 June 2024 the Company issued €23 million 5.35% secured bonds of a nominal value of €100 per bond, issued at par (ISIN: MT0000811217). The 5.35% bonds shall be redeemed on 26 July 2034 provided that the Company reserves the right to redeem on an earlier redemption date. Principal risks and uncertainties The Directors are aware of the various risks faced by the Group as a result of its well diversified business lines primarily on manufacturing and property development. A number of measures are in place to ensure that such risks and uncertainties are maintained at acceptable levels and are in line with the Group’s risk strategy of sustainable, long-term growth and profitability. Our principal risks have not changed this year. The key risks faced by the Group include credit risk, strategic risk, operational risk, liquidity risk, and reputational risk. Together with other risks and uncertainties inherent in the business, these require strong capital management as safeguard against competent authority requirements and unfavourable events. Given such, the Group regularly reviews operational and capital targets against actual and forecast business levels to minimise such risks if necessary, to the most considerable level possible in the interest of institutional stakeholders. The main types of risk types are outlined hereunder: Credit risk Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities and from its financing activities including deposits with banks. Customer credit risk is managed by the Group's management subject to the Group's established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on each customer's credit limits. Outstanding customer receivables are regularly monitored. An impairment analysis is performed on each reporting date in accordance with the guidelines set in IFRS 9 Financial Instruments Standard. The Group maintains a prudent credit control policy, ensuring minimal exposure to significant credit risk or concentration. Banking relationships are exclusively with reputable local financial institutions that meet high-quality standards or ratings. Given that the Group primarily operates in Malta, the majority of its revenue is generated from clients within the local market. Strategic risk This risk relates to the value of Group's assets and local property market in general. The Group has strict guidelines and engages competent professionals on quality and valuation of its investment properties. The Group's properties are rented out to various tenants, except for those sites where development is in progress. The Group currently has long term lease agreements with in-substance fixed rental receivables in place, which will protect the Group from unforeseen circumstances and inflation. The Group ensures to implement sound capital management policies and flexible cash flow as disclosed below under liquidity risk, to mitigate its risks. Operational risk Operational risk maybe defined as the risk of losses arising from defects or failures in its internal processes, people, systems or external events including risks related to fraud, technological and conduct risk. Operational risk is inherent in all processes, systems and activities of the Group. As such, all employees are responsible for managing and controlling operational risks associated with their own activities and business processes where they are involved. Project management is carried out by competent professionals and surveyors in the field for each site with ongoing projects. The Group, in terms of operational risk management and control, continues to identify, evaluate and mitigate such risks, regardless, if these actually occurred or not. The Group also assesses at each reporting date (unless immediate evaluation is necessary) areas of concern for improvement to minimise such operational risks, arising due to the volatile results of each year's operations. Liquidity risk The Group is exposed to liquidity risk in relation to meeting future obligations associated with its financial liabilities. Prudent liquidity risk management includes maintaining sufficient cash and committed credit lines to ensure the availability of an adequate amount of funding to meet the Group's obligations. Geopolitical and macroeconomic risks Globally, countries and businesses are experiencing a heightened degree of geopolitical complexity and tension. Key sources of uncertainty arise from the ongoing Russia-Ukraine war and the escalation of conflicts in the Middle East which could lead to supply chain disruptions and increased supplier pricing. Provided that the situation does not deteriorate further or expand, no material impact on the Group’s activities or financial results for 2026 is currently expected. Management continues to monitor these developments and will assess, as appropriate, their potential impact on the business. Financial risk management and exposures Note 34 Financial Risk Management to these financial statements provide details in connection with the Company’s use of financial instruments, its financial risk management objectives and policies and the financial risks to which it is exposed. Events after the financial reporting date All events occurring after the balance sheet date until the date of authorisation for issue of these financial statements and that are relevant for valuation and measurement as at 31 December 2025 for the Group and the Company are included in these consolidated financial statements. Future Developments Activity within the Group’s manufacturing division is expected to remain robust in 2026, supported by ongoing participation in a number of significant projects. While this provides a positive backdrop for the year, management remains attentive to margin pressures stemming from continued industry challenges, and the potential impact of the escalating geopolitical conflicts particularly increased shipping costs and disruptions to supply chain. Within the investment property segment, the portfolio is set to expand with the anticipated completion of an additional property during the year. Rental income streams are expected to remain stable, as additional revenues are expected to commence in the following financial year. The property development segment is presently undergoing a transitional period, with existing projects progressing through their construction phases. These developments are expected to remain ongoing throughout the current financial year, with no material contribution from this segment anticipated in the period. Overall, the Group expects the year to be characterised by steady operational activity, coupled with a measured approach to managing costs and advancing ongoing investments. This balanced positioning is intended to support continuity in performance while laying the groundwork for future growth as current development projects reach completion. Dividends and Reserves The results for the year are set in the Consolidated Statement of Comprehensive Income on pages 29 and 30. The Board of Directors does not propose the payment of a dividend in order to further strengthen the financial position of the Group. Retained profits carried forward at the reporting date amounted to €23,009,321 (2024: €19,524,980) for the Group and €5,524,300 (2024: €4,751,736) for the Company. Directors The Directors of the Company since the beginning of the year up to the date of this report were:
Mr. Martin Vella - Chairman
Mr. Mark Vella - Director
Mr. Joseph Vella - Director
Mr. Mario Galea - Independent Non-Executive Director
Dr. Arthur Galea Salomone - Independent Non-Executive Director
Ms. Miriam Schembri - Non-Executive Director
Company Secretary
Dr. Louis de Gabriele
Remuneration committee and corporate governance During the period under review, the functions of the Remuneration Committee were carried out by the Board of Directors in view of the fact that the remuneration of Directors is not performance related. Statement of Directors’ Responsibilities for the financial statements The Directors are required by the Maltese Companies Act, 1995 (Cap.386) to prepare financial statements in accordance with International Financial Reporting Standards as adopted by the EU which give a true and fair view of the state of affairs of the Group and the Company as at the end of each reporting period and of the profit or loss for that period. In preparing such financial statements, the Directors are responsible for:
- | ensuring that the financial statements have been drawn up in accordance with International Financial Reporting Standards as adopted by the EU;
- | selecting and applying consistently appropriate accounting policies;
- | making accounting estimates that are reasonable in the circumstances; and
- | ensuring that the financial statements are prepared on the going concern basis unless it is inappropriate to presume that the Company will continue in business as a going concern.
The Directors are also responsible for designing, implementing and maintaining internal control as necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and that comply with the Maltese Companies Act, 1995 (Cap. 386). They are also responsible for safeguarding the assets of the Group and the parent Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The financial statements of Hal Mann Vella Group p.l.c. for the year ended 31 December 2025 are included in the Annual Report 2025, which is published in hard-copy printed form and is available on the Company’s website. The Directors are responsible for the maintenance and integrity of the Annual Report on the website in view of their responsibility for the controls over, and the security of, the website. Access to information published on the Company’s website is available in other countries and jurisdictions, where legislation governing the preparation and dissemination of financial statements may differ from requirements or practice in Malta. Statement of responsibility pursuant to the Capital Markets Rules of the Malta Financial Services Authority The Directors confirm that, to the best of their knowledge:
• | the financial statements give a true and fair view of the financial position of the Group and the Company as at 31 December 2025, and of the financial performance and the cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union; and
• | in accordance with the Capital Markets Rules, the Directors' Report includes a fair review of the development and performance of the business and the position of the Group and the Company, together with a description of the principal risks and uncertainties that the Group and the Company face.
Going Concern The Directors, as required by the Capital Markets Rule 5.62, have considered the Company’s operating performance, the balance sheet at year-end, as well as the business and financial plan for the coming year, and they have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, in preparing the financial statements, they continue to adopt the going concern basis in preparing the financial statements. Shareholder register information pursuant with Capital Markets Rule 5.64
- | Structure of Capital
The Company has an authorised share capital of €5,000,000 Ordinary Shares of €1 each and issued and fully paid up share capital of €4,999,820 with a nominal value of €1 each. Each Ordinary Share is entitled to one vote. The Ordinary Shares in the Company shall rank pari passu for all intents and purposes at law. There are currently no different classes of Ordinary Shares in the Company and accordingly all Ordinary Shares have the same rights, voting rights and entitlements in connection with any distribution whether of dividends or capital.
- | Appointment and removal of Directors
Article 55.1 of the Company’s Memorandum and Articles of Association states that the Directors of the Company shall be appointed by the Members in the annual general meeting (AGM) of the Company. An election of the Directors shall take place every year. All Directors, except a managing director (if any), shall retire from office every 3 years, but shall be eligible for re-election. The Directors shall be elected as provided in Article 55.1.1 & 55.1.2 of the Memorandum and Articles of Association, that any Member or number of Members who in the aggregate hold not less than 200,000 shares having voting rights in the Company shall be entitled to nominate a fit and proper person for appointment as director of the Company. In addition to the nominations that may be made by Members pursuant to the provisions of Article 55.1.1, the Directors themselves or a committee appointed for the purpose by the Directors, may make recommendation and nominations to the Members for the appointment of Directors at the next following AGM.
- | Powers of Directors
The powers and duties of Directors are outlined in the Company’s Articles of Association.
- | General Meetings
The Company shall in each year hold a General Meeting as its AGM in addition to any other meetings in that year. All general meetings other than annual general meetings shall be called extraordinary general meetings. The Directors may convene an extraordinary general meeting whenever they think fit. If at any time there are not sufficient Directors capable of acting to form a quorum for a meeting of the Directors, any Director, or any two Members of the Company holding at least 10% of the Equity Securities conferring a right to attend and vote at general meetings of the Company, may convene an extraordinary general meeting in the same manner, as nearly as possible, as that in which meetings may be convened by the Directors and shall give notice thereof. A General Meeting of the Company shall be called by not less than 14 days notice in writing. The notice shall be exclusive of the day on which it is served or deemed to be served and of the day for which it was given and shall specify the place, the day and the hour of the meeting, and in case of special business, the general nature of that business, and shall be accompanied by a statement regarding the effect and scope of any proposed resolution in respect of such special business.
- | Auditors
Pursuant to the Company’s statutory obligations in terms of Companies Act and Capital Markets Rules, the appointment of the auditors and the authorisation of the Directors to set their remuneration will be proposed and approved at the Company’s AGM. HLB CA Falzon have expressed their willingness to continue in office. These financial statements were approved and authorized for issue by the Board of Directors and signed on its behalf on 17 April 2026 by Mr. Martin Vella (Chairman) and Mr. Mark Vella (Director) as per the Directors' Declaration on ESEF Annual Financial Reports submitted in conjunction with the Annual Financial Report 2025 Registered Office The Factory, Mosta Road, Lija Malta # Corporate Governance Statement for the year ended 31 December 2025 Introduction Pursuant to the Capital Markets Rules issued by the Malta Financial Services Authority (the “Rules”), Hal Mann Vella Group p.l.c. (“the Company”) should endeavour to adopt the Code of Principles of Good Corporate Governance contained in Appendix 5.1 to Chapter 5 of the Rules (“the Code”). In terms of Rule 5.94, the Company is hereby reporting on the extent of its adoption of the Code, with respect to the financial year under review. This report covers the period commencing 1 January 2025 and ending 31 December 2025. The Company became subject to the Rules when its bonds were admitted to listing and subsequent trading on the Official List of the Malta Stock Exchange. The Company acknowledges that although the Code does not dictate or prescribe mandatory rules, compliance with the principles of good corporate governance recommended in the Code is in the best interests of the Company, its shareholders, bondholders and other stakeholders, and that compliance with the Code, is not only expected by investors but also evidences the directors' and the Company's commitment to maintaining a high standard of good governance. The Company has only issued debt securities and has not issued equity securities. Accordingly, in terms of Rule 5.101, the Company is exempt from reporting on the matters prescribed in Rules 5.97.1 to 5.97.3, 5.97.6 and 5.97.8 in this corporate governance statement (the "Statement”) but may do so on a best-effort basis. This Statement is to be construed accordingly. General Good corporate governance is the responsibility of the Board of Directors of the Company (“the Board”) as a whole and has been and remains a priority for the Company. In deciding on the most appropriate manner in which to implement the Code, the Board took cognisance of the Company’s size, nature and operations, and formulated the view that the adoption of certain mechanisms and structures which may be suitable for companies with extensive operations may not be appropriate for the Company. The Company has adopted a corporate decision-making and supervisory structure that is tailored to suit its requirements and designed to ensure the existence of adequate controls and procedures within the group of companies of which it forms part; the Hal Mann Vella Group (the “Group”). The Board is of the view that it has employed structures which are most suitable and complementary for the size, nature and operations of the Company The Board considers that, to the extent otherwise disclosed herein, the Company has generally been in compliance with the principles set out in the Code throughout the year under review. This Statement shall now set out the structures and processes in place within the Company and how these effectively achieve the principles set out in the Code for the year under review. For this purpose, this Statement will make reference to the pertinent principles of the Code and then set out the manner in which the Board considers that these have been adhered to. Where the Company has not complied, this Statement will provide an explanation for non-compliance. For the avoidance of doubt, reference in this Statement to compliance with the principles of the Code means compliance with the Code’s main principles and the Code provisions. Compliance with the Code
| Principle One - The Board
The Board reports that for the financial year under review, the directors of the Company have provided the necessary leadership in the overall direction of the Company and have performed their responsibilities for the efficient and smooth running of the Company with honesty, competence and integrity. The Board has adopted prudent and effective systems which ensure an open dialogue between the Board and senior management. The Board is composed of fit and proper members who are competent and proper to direct the business of the Company with honesty, competence and integrity. All the members of the Board are fully aware of, and conversant with, the statutory and regulatory requirements connected to the business of the Company. The Board is accountable for its performance and that of its delegates to shareholders and other relevant stakeholders. The Board has a structure that ensures a mix of executive and non-executive directors and that enables the Board to have direct information about the Company’s performance and business activities.
| Principle Two - Chairman and Chief Executive Officer (CEO)
The position of the Chairman and that of the CEO are occupied by different individuals. There is a clear division of responsibilities between the running of the Board and the CEO's responsibility in managing the Company's business. The separation of roles of the Chairman and CEO avoids concentration of authority and power in one individual, and differentiates the leadership of the Board, from the running of the business. The CEO is then accountable to the Board for all business operations of the Company. The CEO provides the directors with access to information on the Company’s financial position and systems. He acts as the main point of communication between the Board and overall corporate operations as he is responsible for proper implementation of sustainable business solutions, effective framework of internal controls over risk in relation to the business and strategic goals devised by the Board. The Chairman exercises independent judgement and is responsible to lead the Board and set its agenda, whilst also ensuring that the directors receive precise, timely and objective information so that they can take sound decisions and effectively monitor the performance of the Company. The Chairman is also responsible for ensuring effective communication with shareholders and other stakeholders and encouraging active engagement by all members of the Board for discussion of complex or contentious issues. The Board believes that these functions have been conducted by the Chairman in compliance with Code provision 2.2.
| Principle Three - Composition of the Board
The Board is composed, in line with the requirements of Code provision 3, of a mix of executive and nonexecutive directors, including independent non-executives. During the period under review, the Board was composed of six members, with three executive and three non-executive directors, two of whom are independent from the Company. The Board is responsible for the overall long-term strategy and general policies of the Company, of monitoring the Company’s systems of internal control, managing the Company's exposure to financial risk, financial reporting, and ensuring effective communication with the market, as and when necessary. The Board consists of the following:
Mr. Martin Vella - Director and Chairman
Mr. Mark Vella - Executive Director
Mr. Joseph Vella - Executive Director
Mr. Mario Galea - Independent Non-Executive Director
Dr. Arthur Galea Salomone - Independent Non-Executive Director
Ms. Miriam Schembri - Non-Executive Director
In accordance with the provisions of the Company’s articles of association, the appointment of directors to the Board is exclusively reserved to the Company’s shareholders, except in so far as appointment is made by the Board to fill a casual vacancy, which appointment would be valid until the next annual general meeting (“AGM”) of the Company, following such an appointment. In terms of the Company's articles of association a director shall hold office for a period of three years from the date of his appointment. Dr. Arthur Galea Salomone and Mr. Mario Galea are considered by the Board to be independent non-executive members of the Board. Ms. Miriam Schembri on the other hand, is also a non-executive member of the Board, however, is not independent. None of the independent non-executive directors:
a) | are or have been employed in any capacity with the Company and/or the Group
b) | have or had a significant business relationship with the Company and/or the Group
c) | has received or receives significant additional remuneration from the Company and/or the Group;
d) | has close family ties with any of the Company’s executive Directors or senior employees
e) | has served on the board for more than twelve consecutive years; or
f) | is or has been within the last three years an engagement partner or a member of the audit team of the present or former external auditor of the Company and/or the Group
In terms of Code provision 3.4, each non-executive director of the Board has declared in writing to the Board that he/she undertakes:
a) | to maintain in all circumstances his independence of analysis, decision and action;
b) | not to seek or accept any unreasonable advantages that could be considered as compromising his/her independence; and
c) | to clearly express his/her opposition in the event that he finds that a decision of the Board may harm the Company
| Principle Four - The Responsibilities of the Board
In terms of Principle Four, it is the Board’s responsibility to ensure a system of accountability, monitoring, strategy formulation and policy development. The Board acknowledges its statutory mandate to conduct the administration and management of the Company. The Board, in fulfilling this mandate and discharging its duty of stewardship of the Company, meets on a regular basis, with such meetings usually focusing on business strategy, operational and financial performance, and assumes responsibility for the Company’s strategy and decisions with respect to the issue, servicing and redemption of its bonds in issue, and for monitoring that its operations are in conformity with its commitments towards bondholders, shareholders, and all relevant laws and regulations. The Board is also responsible for ensuring that the Company establishes and operates effective internal control and management information systems and that it communicates effectively with the market. The executive officers of the Company may be asked to attend Board meetings or general meetings of the Company, although they do not have the right to vote thereat until such time as they are also appointed to the Board. The rest of the directors may entrust to and confer upon the CEO any of the powers exercisable by them upon such terms and conditions and with such restrictions as they may think fit, and either collaterally with or to the exclusion of their own powers, and may from time to time revoke, withdraw, alter or vary all or any of such powers. In fulfilling its mandate, the Board:
a) | has a clearly-defined Company strategy, policies, management performance criteria and business policies which can be measured in a precise and tangible manner;
b) | has established a clear internal and external reporting system so that the Board has access to accurate, relevant and timely information such that the Board can discharge its duties, exercise objective judgment on corporate affairs and take pertinent decisions to ensure that an informed assessment can be made of all issues facing the board;
c) | establishes an Audit Committee in terms of Rules 5.117 – 5.134;
d) | continuously assesses and monitors the Company`s present and future operations, opportunities, threats and risks in the external environment and current and future strengths and weaknesses;
e) | evaluates management’s implementation of the Company's policies, corporate strategy and financial objectives, and regularly reviews the strategy, processes and policies adopted for implementation using key performance indicators so that corrective measures can be taken to address any deficiencies and ensure the future sustainability of the Company; and
f) | ensures that the Company has appropriate policies and procedures in place to assure that the Company and its employees maintain the highest standards of corporate conduct, including compliance with applicable laws, regulations, business and ethical standards.
As part of succession planning, the Board ensures that the Company implements appropriate schemes to recruit, retain and motivate employees and senior management. In ensuring compliance with other statutory requirements and with continuing listing obligations, the Board is advised directly, as appropriate, by its appointed legal and other advisors. The directors are entitled to seek independent professional advice at any time on any aspect of their duties and responsibilities, at the Company’s expense. The Audit Committee The Company has established an audit committee (the “Audit Committee”) in line with the requirements of the Rules. The Audit Committee’s primary objective is to assist the Board in fulfilling its responsibilities: in dealing with issues of risk, control and governance; and to monitor and review the financial reporting processes, financial policies and internal control structure of the Company. Related Party Transactions In addition, the Audit Committee also has the role and function to scrutinize and evaluate any proposed transaction to be entered into by the Company and a “Related Party” (which term shall have the same meaning as in the international accounting standards adopted in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council). to ensure that the execution of any such transaction is at arm’s length, on a commercial basis and ultimately in the best interests of the Company. Although the Audit Committee is set up at Company level, its remit extends to the activities of the subsidiaries and operational companies of the Group. Any proposed transaction which the Company wishes to enter into, and which satisfies either of the following conditions is referred to the Audit Committee for its consideration and approval:
(a) | transactions which clearly fall within the ambit of the Rules as “Related Party Transactions” and which are not the subject of an exemption therefrom;
(b) | transactions which management is not certain as to whether they fall within the ambits of the Rules as “Related Party Transactions” or where there is uncertainty as to whether any one or more exemptions should apply to the proposed transactions.
At the meeting convened for this purpose, the Audit Committee considers the proposed transaction and first determines whether it is a transaction that falls within the ambit of the applicable Rules and, if it so determines, then considers the merits of the proposed transaction. In determining whether a transaction falls to be classified as a “Related Party Transaction”, the Audit Committee adopts a substance over form approach and assesses the transaction according to the specific circumstances and characteristics. In its evaluation of the proposed transaction, the Audit Committee is at all times guided by the best interests of the Company and its general body of shareholders taken as a whole. The Audit Committee reports to the Board on its findings and make its recommendations to the Board as to whether the transaction should be entered into in the first place and to make such further recommendations as to any matters that, in the opinion of the Audit Committee need to be reviewed or improved in the proposed transaction or any of its terms to ensure that the best interests of the Company are properly safeguarded. Conflicts of interest Furthermore, the Audit Committee is vested with the task of ensuring that any potential conflicts of interest between the duties of the directors and their respective private interests or duties unrelated to the Company are resolved in the best interests of the Company. Audit Committee Meetings During the financial year under review, the Audit Committee met seven times. Terms of reference The Board has set formal terms of establishment and reference of the Audit Committee that establish its composition, role and function, the parameters of its remit as well as the basis for the processes that it is required to comply with. The Audit Committee is a sub-committee of the Board and is directly responsible and accountable to the Board. The Board reserves the right to change these terms of reference from time to time. Composition The Audit Committee is composed of three non-executive directors, two of whom are also independent:
• Dr. Arthur Galea Salomone – Member
• Mr. Mario Galea – Member
• Ms. Miriam Schembri – Member
Mr. Mario Galea is a non-executive director and a qualified accountant, who the Board considers as independent and competent in accounting as required in terms of the Rules.
| Principle Five - Board meetings
The Board meets regularly to dispatch the business of the Company. The directors are notified in advance of forthcoming meetings so as to provide adequate time to directors to prepare themselves for such meetings. Notification thereof, together with the issue of an agenda and supporting board papers, which are circulated in advance of the meeting, is carried out by the company secretary of the Company. Minutes are prepared during Board meetings recording faithfully attendance, and resolutions taken at the meeting. These minutes are subsequently circulated to all directors as soon as practicable after the meeting. The Chairman ensures that all relevant issues are on the agenda supported by all available information, whilst encouraging the presentation of views pertinent to the subject matter and giving all directors every opportunity to contribute to relevant issues on the agenda. The agenda on the Board seeks to achieve a balance between long-term strategic and short-term performance issues. The Board meets as often and as frequently required in line with the nature and demands of the business of the Company. Directors attend meetings on a frequent and regular basis and dedicate the necessary time and attention to their duties as directors of the Company. The Board met seven times during the financial year under review. The following directors attended meetings as follows:
| Mr. Martin Vella – Chairman - seven meetings
| Mr. Mark Vella – Director - seven meetings
| Mr. Joseph Vella – Director - seven meetings
| Mr. Mario Galea - Independent Non-Executive Director - seven meetings
| Dr. Arthur Galea Salomone - Independent Non-Executive Director - five meetings
| Ms. Miriam Schembri - Non-Executive Director - seven meetings
Shareholders’ influence is exercised at the AGM of the Company, which is the highest decision-making body of the Company. All shareholders have the right to participate and to vote in the meeting. Shareholders who cannot participate in the meeting can be represented by a proxy. Business at the Company’s AGM will cover the annual report and financial statements, the declaration of dividends if any, election of directors and the approval of their remuneration, appointment of the auditors and the authorisation of the directors to set the auditors’ fees. Shareholders’ meetings are called with enough notice to enable the use of proxies to attend, vote and abstain. The Company recognises the importance of maintaining dialogue with its shareholders to ensure its strategies and performance. The Board believes that it fully complies with the requirements of this Principle Five and the relative Code provisions.
| Principle Six - Information and Professional Development
The Board routinely assesses the need for further training of its members with a view to ensuring that the directors possess the necessary knowledge and skill to fulfil their function. During the year under review, no specific training was deemed necessary and thus provided to the Board. Whilst no specific training was provided to the Board over the course of the year under review, the Board continuously evaluates whether any further training is required for its members and, or a specific member or committee, from time to time, and expects to schedule training on regulatory developments and ongoing obligations in the near future. The CEO is responsible for the recruitment and appointment of senior management, and, in the performance of his role as CEO, ensures that the following systems are in place:
• | a system providing for the development and training of management and employees generally so that the Company remains competitive in the markets in which it operates;
• | a system to provide additional training for individual directors where necessary;
• | a system to monitor management and staff morale; and
• | a system to establish a succession plan for senior management.
| Principle Seven - Evaluation of the Board's performance
The current composition of the Board allows for a cross-section of skills and experience and achieves the appropriate balance required for it to function effectively. During the year, the directors carried out a self evaluation performance analysis. The self-evaluation performance analysis was also carried out by the CEO. The results of this analysis did not require any material changes in the Company’s corporate governance structure.
| Principle Eight - Committees
Principle Eight A of the Code deals with the establishment of a remuneration committee for the Company aimed at developing policies on remuneration for directors and senior executives and devising appropriate remuneration packages. In view of the size and the operations of the Company, the Board does not consider the Company to require the setting up of a remuneration committee, and, in accordance with Code Principle 8.A.2, the Board itself carries out the functions of the remuneration committee specified in, and in accordance with, Principle Eight A of the Code, given that the remuneration of directors is not performance-related. The Board has established a remuneration policy for directors and senior executives of the Company, underpinned by formal and transparent procedures for the development of such a policy and the establishment of the remuneration packages of individual directors. The Board confirms that there have been no changes in the Company’s remuneration policy during the year under review and the Company does not intend to effect any changes in its remuneration policy for the following financial year. The maximum annual aggregate emoluments that may be paid to the directors of the Company is, pursuant to the Company’s memorandum and articles of association, approved by the shareholders in general meeting. The Board is composed exclusively of executive and non-executive directors. The determination of remuneration arrangements for board members is a reserved matter for the Board as a whole. During the financial year under review, Mr. Martin Vella, Mr. Mark Vella and Mr. Joseph Vella each held an indefinite full-time contract of service with Hal Mann Vella Limited. The remuneration policy for directors has been consistent since inception; no director (including the Chairman) is entitled to profit sharing, share options or pension benefits. There is no linkage between the remuneration and the performance of directors. A fixed honorarium is payable at each financial year to the non-executive directors of the Company. For the financial year under review the aggregate remuneration of the directors of the Company was as follows:
Fixed remuneration from Company | €27,000
Fixed remuneration from Subsidiaries | €303,789
Principle Eight B of the Code deals with the formal and transparent procedure for the appointment of directors. In view of the size and type of operation of the Company, the Board does not consider the Company to require the setting up of a nomination committee. Reference is also made to the information provided under the subheading ‘Principle Three’ above, which provides for a formal and transparent procedure for the appointment of new directors to the Board.
| Principle Nine - Relations with shareholders and with the market
Pursuant to the Company’s statutory obligations in terms of the Companies Act (Cap. 386 of the laws of Malta) and the Rules, the annual report and financial statements, the election of directors and approval of directors’ fees, the appointment of the auditors and the authorisation of the directors to set the auditors’ fees, and other special business, are proposed and approved at the Company’s AGM. With respect to the Company’s bondholders and the market in general, company announcements are issued as and when required in terms of the Rules. During the year under review, eight company announcements were issued. The Company’s articles of association allow minority shareholders to call special meetings on matters of importance to the Company, provided that the minimum threshold of ownership established in the Company's articles of association is met.
| Principle Ten - Relations with Institutional shareholders
The directors are of the view that this Principle is not applicable to the Company.
| Principle Eleven - Conflicts of Interest
Principle Eleven of the Code deals with conflicts of interest and the principle that directors should always act in the best interests of the Company All of the directors of the Company, except for Ms. Miriam Schembri, Dr. Arthur Galea Salomone and Mr. Mario Galea are executive officers of the Company. The executive directors have a direct beneficial interest in the share capital of the Company, and as such are susceptible to conflicts arising between the potentially diverging interests of the shareholders and the Company. During the financial year under review, no private interests or duties unrelated to the Company were disclosed by the directors which were or could have been likely to place any of them in conflict with any interests in, or duties towards, the Company. The Audit Committee has the task to ensure that any potential conflicts of interest are resolved in the best interests of the Company. Furthermore, in accordance with the provisions of article 145 of the Companies Act (Cap. 386 of the laws of Malta), every director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the Company is under the duty to fully declare his interest in the relevant transaction to the Board at the first possible opportunity and he will not be entitled to vote on matters relating to the proposed transaction and only parties who do not have any conflict in considering the matter will participate in the consideration of the proposed transaction.
| Principle Twelve - Corporate Social Responsibility
Principle Twelve of the Code encourages directors of listed companies to adhere to accepted principles of corporate social responsibility The Company seeks to adhere to sound principles of corporate social responsibility in its management practices and is committed to high standards of ethical conduct and to contribute to the development of the well-being of employees and their families as well as the local community and society at large. The Board is mindful of the environment and its responsibility within the community in which it operates. To this end the Company, and other Group companies have taken initiatives such as; investment in renewable energy; implementation of water management systems within its operations and manufacturing companies to curtail waste and better manage the use of water. Furthermore, the Group also seeks to minimise waste by seeking to deploy what are by products of its manufacturing, in its terrazzo line ensuring a cheaper product complimentary to its social policy of reducing waste. In carrying on its business, the Group is fully aware and at the forefront to preserving the environment and continuously review its policies aimed at respecting the environment and encouraging social responsibility and accountability. Internal Control The Board is ultimately responsible for the Company’s system of internal controls and for reviewing its effectiveness. The directors of the Company are aware that internal control systems are designed to manage, rather than eliminate, the risk of failure to achieve business objectives of the Company, and can only provide reasonable, and not absolute, assurance against normal business risks. During the financial year under review, the Company operated a system of internal controls which provided reasonable assurance of effective and efficient operations covering all controls, including financial and operational controls and compliance with laws and regulations. Processes are in place for identifying, evaluating and managing the significant risks faced by the Company. Other key features of the system of internal control adopted by the Company in respect of its own internal control as well as the control of its subsidiaries and affiliates are as follows: Risk identification The Board, with the assistance of the management team of the Company, is responsible for the identification and evaluation of key risks applicable to the areas of business in which the Company and its subsidiaries are involved. These risks are assessed on a continual basis and any potential exposure is discussed regularly at Board and management level, with a view to the mitigation thereof, where possible. Information and communication Periodic strategic reviews which include consideration of long-term financial projections, and the evaluation of business alternatives are regularly convened by the Board. Regular budgets are prepared and performance against these plans is actively monitored and reported to the Board. In conclusion, the Board considers that the Company has generally been in compliance with the principles of the Code throughout the period under review as befits a company of its size and nature. Non-compliance with the principles of the Code and the reasons therefor have been identified below.
Code Provision | Explanation
4.2.7 | The Board has not formally developed a succession policy for the future composition of the Board as recommended by Code provision 4.2.7. In practice, however, the Board is actively engaged in succession planning and involved in ensuring that appropriate schemes to recruit, retain and motivate employees and senior management are in place.
7.1 | The Board has not appointed a committee for the purpose of undertaking an evaluation of the Board’s performance. The Board believes that the size of the Company and the Board itself does not warrant the establishment of a committee specifically for the purpose of carrying out a performance evaluation of its role. The size of the Board is such that it should enable it to evaluate its own performance without the requirement of setting up an ad-hoc committee for this purpose. The Board shall retain this matter under review over the coming year.
8A | The Board considers that the size and operations of the Company as well as the Board itself, do not warrant the setting up of a remuneration committee to establish the remuneration packages of individual directors. Rather, the Board relies on the constant scrutiny of the Board itself, the Company’s shareholders, the market, and the Rules. Furthermore, the Board itself carries out the functions of the remuneration committee in accordance with the Code, given that the remuneration of directors is not performance-related.
8B | The Board has not appointed a nominations committee, particularly in view of the appointment process specifically set out in the Company's articles of association. The Board, however, intends to keep under review the utility and possible advantages of having a nominations committee and following an evaluation may, if the need arises, make recommendations to the shareholders for a change to the Company's articles of association for such purpose.
Approved by the Board of Directors and signed on its behalf on 17 April 2026 by Mr. Martin Vella (Chairman) and Mr. Mark Vella (Director). # Independent Auditors' Report to the shareholders of Hal Mann Vella Group p.l.c. Report on the Financial Statements for the year ended 31 December 2025 Opinion We have audited the individual financial statements of Hal Mann Vella Group p.l.c. (“the Company”) and the consolidated financial statements of the Company and its subsidiaries (together, “the Group”), set out on pages 29 to 110, which comprise the statement of financial position as at 31 December 2025, statement of profit and loss and comprehensive income, statement of changes in equity and the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and the Company as at 31 December 2025, and of the Group’s and the Company’s financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and have been properly prepared in accordance with the requirements of the Companies Act, Cap. 386 of the Laws of Malta. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code), together with the ethical requirements that are relevant to our audit of the financial statements in accordance with the Accountancy Profession (Code of Ethics for Warrant Holders) Directive issued in terms of the Accountancy Profession Act (Cap.281) in Malta, and we have fulfilled our other ethical responsibilities in accordance with the IESBA code. 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 company are in accordance with the applicable law and regulations in Malta and that we have not provided 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 company, in the period from 1 January 2024 to 31 December 2025, are disclosed in Note 7 to the financial statements. Key Audit Matters Key audit matters are those matters that in our professional judgement were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our audit opinion thereon. We are not required to and we do not provide a separate opinion on these matters.
1. |  | Investment property valuations
|  | Risk description
|  | The Group carries its investment property at fair value, with changes in fair value being recognised in the statement of profit or loss and other comprehensive income. Fair value is based on market valuation performed by independent professional architects. The last market valuation was performed on 30 December 2024. Investment property's market value amounted to €54,623,596 as at 31 December 2025 (2024: €51,778,837).
|  | The Company's policy is to revalue buildings by not later than every 2 years and immediately if circumstances warrant such a revaluation.
|  | Estimating the fair value is a complex process involving a number of judgements and estimates regarding various inputs. Consequently, we have determined the valuation of the investment property to be a key audit matter.
|  | Relevant references in the annual report and financial statements:
|  | - Accounting policy: notes 2.6 and 2.20
|  | - Note on Investment Property: note 17
|  | - Judgements in applying accounting policies and key sources of estimation uncertainty: Note 3
|  | How the scope of our audit responded to the risk
|  | We obtained an understanding of the Group’s process for determining fair value measurements and disclosures and the relevant control procedures. We assessed inherent and control risk related to the fair value measurements and disclosures and evaluated whether the fair value measurements and disclosures are in accordance with the Group’s financial reporting framework and are consistently applied.
|  | We evaluated the professional competence and independence of the architects engaged by the Group. We assessed whether the scope of the architects’ work was adequate for the purpose of our audit. We evaluated the assumptions and the basis of valuation and the completeness of information used by the architects. We assessed whether the architects’ report is complete and reasonable and whether all pertinent information therein is properly reflected in the financial statements.
2. |  | Recoverability of deferred tax asset
|  | Risk description
|  | As at 31 December 2025, the Group has recognised a deferred tax asset amounting to €2,395,945 (2024: €2,982,482) arising primarily from deductible temporary differences in respect of unabsorbed capital allowances, unutilized tax losses and investment tax credit that it believes are recoverable. The recoverability of recognised deferred tax asset is in part dependent on the Group’s ability to generate future taxable profits sufficient to utilise deductible temporary differences and tax losses. We have determined this to be a key audit matter, due to the fact that it depends on the amount and timing of future taxable profits and the reversal of temporary difference.
|  | Relevant references in the annual report and financial statements:
|  | - Accounting policy: notes 2.18 |
|  | - Note on Deferred Tax: note 25
|  | - Judgments in applying accounting policies and key sources of estimation uncertainty: Note 3
|  | How the scope of our audit responded to the risk
|  | We ensured that IAS 12 Income Taxes has been correctly applied in respect of deferred tax, paying particular attention to the following situations: (a) the revaluation of an asset; (b) the disposal of an asset and (c) unabsorbed capital allowances and unutilized tax losses (d) investment tax credits and (e) leases.
|  | We assessed the accuracy of forecast future taxable profits by evaluating historical forecasting accuracy and comparing assumptions with our expectations of those assumptions derived from our understanding obtained during the audit.
3. |  | Impairment of net asset value of intercompanies
|  | Risk description
|  | As at 31 December 2025 management carried out an assessment to establish whether the carrying amount of investment in subsidiaries and loan due from subsidiaries (the net investment in subsidiaries) amounting to €9,080,343 as shown in note 13 respectively of the financial statements of the company at that date should continue to be recognised, or if any impairment is required.
|  | How the scope of our audit responded to the risk
|  | - We evaluated the suitability and appropriateness of the impairment methodology applied by management.
|  | - We inquired of management the basis used to make judgements in applying the methodology in use.
|  | - We also assessed the directors' conclusion that the carrying amount of the investment in subsidiary and loan due from subsidiaries are recoverable.
4. |  | Judgement reached to reasses the ECL
|  | Risk description
|  | Estimated credit loss balance for Hal Mann Vella Group p.l.c amounted to €383,068 as at 31 December 2025. This was estimated by management upon external independent experts advice.
|  | How the scope of our audit responded to the risk |
|  | We evaluated the suitability and methodology applied and the reasonableness of the probability of default, loss given default, and discount rates used by the company for the year using the financial position of receivables and intercompany balances as at year end.
Other Information The Directors are responsible for the other information. The other information comprises of the Chairman’s Statement, Directors' Report and Corporate Governance Statement of Compliance. Our opinion on the financial statements does not cover this information. Except for our opinion on the Directors’ Report in accordance with the Companies Act, Cap. 386 of the Laws of Malta and on the Corporate Governance Statement of Compliance in accordance with the Capital Markets Rules issued by the Malta Financial Services Authority, our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect to the Directors' Report, we also considered whether the Directors' Report includes the disclosures required by Article 177 of the Companies Act, Cap. 386 of the Laws of Malta. Based on the work we have performed, in our opinion:
| - | the information given in the Directors' Report for the year ended 31 December 2025 is consistent with the financial statements; and
| - | the Directors' Report has been prepared in accordance with the Companies Act, Cap. 386 of the Laws of Malta.
In addition, in light of the knowledge and understanding of the Group and its environment, obtained in the course of the audit, we are required to report if we have identified material misstatements in the Directors' Report. Based on the work we have performed, we have nothing to report in this regard. Responsibilities of the Directors and the Audit Committee for the financial statements The Directors are responsible for the preparation of the financial statements that give a true and fair view in accordance with the International Financial Reporting Standards as adopted by the European Union, and for such internal controls as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Directors are responsible for assessing the 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 to do so. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The Directors have delegated the responsibility for overseeing the Company's financial reporting process to the Audit Committee. Auditors' Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable Assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. In terms of article 179A(4) of the Companies Act (Cap.386), the scope of our audit does not include assurance on the future viability of the audited entity or on the efficiency or effectiveness with which the Directors have conducted or will conduct the affairs of the entity. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
| - | Identify and assess the risk of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.
| - | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
| - | Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.
| - | Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the 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 financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
| - | Obtain sufficient appropriate 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.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear our independence, and where applicable related safeguards. From the matters communicated with the Audit Committee, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. There were no such undisclosed matters. Report on other legal and regulatory requirements The Annual Report and Financial Statements of Hal Mann Vella Group p.l.c. for the year ended 31 December 2025 contains other areas required by legislation on which we are required to report. The Directors are responsible for these other areas. Report on the Statement of Compliance with the Principles of Good Corporate Governance The Capital Markets Rules issued by the Malta Financial Services Authority require the Directors to prepare and include in their annual report a Corporate Governance Statement providing an explanation of the extent to which they have adopted the Code of Principles of Good Corporate Governance and the effective measures that have taken to ensure compliance with those Principles. The Capital Markets Rules also require the auditor to include a report on the Corporate Governance Statement prepared by the Directors. We read the Corporate Governance Statement and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements included in the annual report. 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 Corporate Governance Statement cover all risks and controls, or form an opinion on the effectiveness of the Company’s corporate governance procedures or its risk and control procedures. In our opinion, the Corporate Governance Statement set out on pages 10 to 20 has been properly prepared in accordance with the requirements of the Capital Markets Rules 5.94 and 5.97. 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 Report and Financial Statements of Hal Mann Vella Group p.l.c. 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 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. Our responsibilities Our responsibility is to obtain reasonable assurance about whether the Annual Report, including the consolidated Financial Statements and the relevant electronic tagging therein, complies 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 Report, in accordance with the requirements of the ESEF RTS;
| - | obtaining the Annual Report and performing validations to determine whether the Annual Report has been prepared in accordance with the requirements of the technical specifications of the ESEF RTS;
| - | examining the information in the Annual 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. Opinion In our opinion, the Annual 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 Companies Act We also have responsibilities:
- | under the Maltese Companies Act (Cap. 386) to report to you if, in our opinion:
| - | adequate accounting records have not been kept, or that returns adequate for our audit have not been received from branches not visited by us;
| - | the financial statements are not in agreement with the accounting records and returns;
| - | we have not received all the information and explanations we require for our audit; and
| - | certain disclosures of Directors' remuneration specified by law are not made in the financial statements, giving the required particulars in our report.
- | 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. Audit Tenure We were first appointed as auditors of the Group on 18 April 2017. Our appointment has been renewed annually by shareholder resolution representing a total period of uninterrupted engagement appointment of 9 years. The Company became listed on a regulated market on 11 November 2014. Consistency of the audit report with the additional report to the Audit Committee Our audit opinion is consistent with the additional report to the Audit Committee in accordance with the provisions of article 11 of the EU Audit Regulation No. 537/2014. This copy of the audit report has been signed by:
The partner in charge of the audit resulting in this independent auditors' report is Fiona Buttigieg for and on behalf of
HLB CA Falzon
Registered Auditors
17 April 2026
# Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 December 2025
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
| Note | € |  | € |  | € |  | €
Revenue from contracts with customers | 6 | 29,339,544 |  | 24,482,062 |  | - |  | -
Rental income | 17,24 | 2,618,619 |  | 2,565,856 |  | 916,347 |  | 866,531
Revenue |  | 31,958,163 |  | 27,047,918 |  | 916,347 |  | 866,531
Cost of sales and services | 7 | (20,806,955) |  | (17,152,041) |  | - |  | -
Gross profit |  | 11,151,208 |  | 9,895,877 |  | 916,347 |  | 866,531
Distribution and selling costs | 7 | (83,028) |  | (131,591) |  | - |  | -
Administrative expenses | 7 | (5,501,055) |  | (5,268,350) |  | (668,078) |  | (269,931)
Other operating charges | 7 | (31,384) |  | - |  | (15,600) |  | -
Other operating income | 8 | 279,726 |  | 1,156,450 |  | 281,818 |  | 414,264
Operating profit |  | 5,815,467 |  | 5,652,386 |  | 514,487 |  | 1,010,864
Depreciation | 7 | (1,843,826) |  | (1,757,724) |  | (33,012) |  | (31,812)
Profit on sale of quoted equity securities | 16 | - |  | 63,779 |  | - |  | 63,779
Profit on sale of investment property | 17 | - |  | 1,144,296 |  | - |  | -
Change in fair value of investment properties | 17 | - |  | 1,387,784 |  | - |  | 765,929
Share in profit of joint ventures | 15 | - |  | 109,996 |  | - |  | -
Dividends income |  | 529,868 |  | - |  | 955,475 |  | -
Finance and similar income | 9 | 17,195 |  | 129,663 |  | 1,318,671 |  | 1,081,903
Finance costs | 10 | (2,439,541) |  | (2,677,986) |  | (1,668,374) |  | (1,721,156)
Profit before tax |  | 2,079,163 |  | 4,052,194 |  | 1,087,427 |  | 1,169,507
Income tax (expense)/credit | 12 | 1,405,178 |  | (1,757,476) |  | (314,683) |  | (631,340)
Profit for the year |  | 3,484,341 |  | 2,294,718 |  | 772,564 |  | 538,167
Other comprehensive income |  |  |  |  |  |  |  |
Items that will not be reclassified to profit and loss: |  |  |  |  |  |  |  |
Revaluation surplus on property, plant and equipment, net of deferred tax | 28 | - |  | (499,731) |  | - |  | -
Items that may be reclassified subsequently to profit or loss: |  |  |  |  |  |  |  |
Equity-accounted investees – share of OCI | 15,29 | - |  | (19) |  | - |  | -
Debt instruments at fair value through other comprehensive income: |  |  |  |  |  |  |  |
- change in fair value, net of deferred tax | 29 | - |  | (63,779) |  | - |  | (63,779)
Total comprehensive income for the year |  | 3,484,341 |  | 1,731,189 |  | 772,564 |  | 474,388
Earnings per share (cents) |  |  |  |  |  |  |  |
- Basic profit for year attributable to ordinary equity holders of the parent | 27 | 0.70 |  | 0.46 |  | 0.15 |  | 0.11
# Consolidated Statement of Financial Position
as at 31 December 2025
|  | The Group |  | The Company
| Note | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
ASSETS |  |  |  |  |  |  |  |
Non-current assets |  |  |  |  |  |  |  |
Property, plant & equipment | 13 | 38,037,512 |  | 37,705,234 |  | 127,146 |  | 124,523
Investment in subsidiaries | 14.1 | - |  | - |  | 9,080,343 |  | 9,080,343
Investment in joint ventures | 15 | 1,662,573 |  | 1,677,573 |  | 120 |  | 15,720
Other non-current financial assets | 16 | 14,966 |  | 15,000 |  | 18,028,535 |  | 12,954,781
Investment property | 17 | 54,623,596 |  | 51,778,837 |  | 36,203,032 |  | 37,875,351
Right-of-use assets | 24 | 6,705,161 |  | 6,969,688 |  | - |  | -
Deferred taxation | 25 | 2,395,945 |  | 2,982,482 |  | 811,439 |  | 799,600
Goodwill | 18 | 62,888 |  | 62,888 |  | - |  | -
Investment in subsidiary held-for-distribution |  | - |  | 124,000 |  | - |  | -
Total non-current assets |  | 103,502,641 |  | 101,315,702 |  | 64,250,615 |  | 60,850,318
Current assets |  |  |  |  |  |  |  |
Inventories | 19 | 4,631,469 |  | 4,356,477 |  | - |  | -
Property held-for-sale | 20 | 4,323,890 |  | 5,200,026 |  | - |  | -
Trade and other receivables | 21 | 12,091,801 |  | 16,133,342 |  | 10,441,372 |  | 7,762,799
Contract assets | 22 | 4,361,520 |  | 2,295,441 |  | - |  | -
Other current financial assets | 16 | - |  | 91,000 |  | - |  | -
Cash and cash equivalents | 33 | 3,049,973 |  | 8,772,414 |  | 294,311 |  | 428,752
Total current assets |  | 28,458,653 |  | 36,848,700 |  | 10,735,683 |  | 8,191,551
Total assets |  | 131,961,294 |  | 138,164,402 |  | 74,986,298 |  | 69,041,869
EQUITY AND LIABILITIES |  |  |  |  |  |  |  |
Equity |  |  |  |  |  |  |  |
Issued capital | 26 | 4,999,820 |  | 4,999,820 |  | 4,999,820 |  | 4,999,820
Revaluation reserve on property, plant and equipment | 28 | 24,392,854 |  | 24,392,854 |  | - |  | -
Fair value reserve | 29 | 1,453 |  | 1,453 |  | - |  | -
Revaluation reserve on investment property | 30 | 4,310,969 |  | 4,310,969 |  | 17,790,559 |  | 17,790,559
Capital redemption reserve | 31 | 47,852 |  | 47,852 |  | - |  | -
Incentives and benefits reserves | 32 | 604,060 |  | 604,060 |  | - |  | -
Retained earnings |  | 23,009,321 |  | 19,524,980 |  | 5,524,300 |  | 4,751,736
Total equity |  | 57,366,329 |  | 53,881,988 |  | 28,314,679 |  | 27,542,115
Non-current liabilities |  |  |  |  |  |  |  |
Interest bearing loans and borrowings | 16 | 40,778,566 |  | 39,490,710 |  | 28,451,131 |  | 27,156,790
Finance lease liability | 16,24 | 7,951,999 |  | 8,100,126 |  | 804,190 |  | 802,728
Deferred taxation | 25 | 5,021,624 |  | 7,841,789 |  | 2,984,266 |  | 3,117,327
Total non-current liabilities |  | 53,752,189 |  | 55,432,625 |  | 32,239,587 |  | 31,076,845
Current liabilities |  |  |  |  |  |  |  |
Current borrowings | 16 | 7,629,329 |  | 10,174,952 |  | 8,723,767 |  | 7,939,507
Finance lease liability | 16,24 | 97,221 |  | 21,912 |  | 39,500 |  | 39,500
Trade and other payables | 23 | 11,987,025 |  | 17,080,746 |  | 5,160,181 |  | 1,723,967
Current tax due | 12 | 1,129,201 |  | 1,572,179 |  | 508,584 |  | 719,935
Total current liabilities |  | 20,842,776 |  | 28,849,789 |  | 14,432,032 |  | 10,422,909
Total liabilities |  | 74,594,965 |  | 84,282,414 |  | 46,671,619 |  | 41,499,754
Total equity and liabilities |  | 131,961,294 |  | 138,164,402 |  | 74,986,298 |  | 69,041,869
These financial statements were approved and authorized for issue by the Board of Directors and signed on its behalf on 17 April 2026 by Mr. Martin Vella (Chairman) and Mr. Mark Vella (Director) as per the Directors' Declaration on ESEF Annual Financial Reports submitted in conjunction with the Annual Financial Report 2025

# Consolidated Statement of Changes in Equity
for the year ended 31 December 2025
| The Group
| Issued capital | Revaluation reserve on property, plant and equipment | Revaluation reserve on investment property | Revaluation reserve on financial assets | Retained earnings | Incentives and benefits reserves | Capital redemption reserve | Total Equity
| € | € | € | € | € | € | € | €
Balance as at 1 January 2024 | 4,999,820 | 24,892,585 | 7,673,906 | 65,251 | 13,304,994 | 604,060 | 47,852 | 51,588,468
Transfer to retained earnings | - | - | - | - | 562,331 | - | - | 562,331
Balance as at 1 January 2024 (adjusted) | 4,999,820 | 24,892,585 | 7,673,906 | 65,251 | 13,867,325 | 604,060 | 47,852 | 52,150,799
Profit for the year | - | - | - | - | 2,294,718 | - | - | 2,294,718
Other comprehensive income (note 29) | - | (499,731) | - | (63,798) | - | - | - | (563,529)
Total comprehensive income for the year | - | (499,731) | - | (63,798) | 2,294,718 | - | - | 1,731,189
Transfer (from) to retained earnings (notes 16 and 29) | - | - | (4,285,122) | - | 4,285,122 | - | - | -
Transfer of fair value gain on investment property, net of deferred tax (note 30) | - | - | 922,185 | - | (922,185) | - | - | -
Balance as at 31 December 2024 | 4,999,820 | 24,392,854 | 4,310,969 | 1,453 | 19,524,980 | 604,060 | 47,852 | 53,881,988
Balance as at 1 January 2025 | 4,999,820 | 24,392,854 | 4,310,969 | 1,453 | 19,524,980 | 604,060 | 47,852 | 53,881,988
Profit for the year | - | - | - | - | 3,484,341 | - | - | 3,484,341
Balance as at 31 December 2025 | 4,999,820 | 24,392,854 | 4,310,969 | 1,453 | 23,009,321 | 604,060 | 47,852 | 57,366,329
| The Company |  |  |
| Issued capital | Revaluation reserve on property, plant and equipment | Revaluation reserve on financial assets | Retained earnings | Total Equity |  |  |
| € | € | € | € | € |  |  |
Balance as at 1 January 2024 | 4,999,820 | 63,779 | 17,374,969 | 4,629,159 | 27,067,727 |  |  |
Profit for the year | - | - | - | 538,167 | 538,167 |  |  |
Other comprehensive loss | - | (63,779) | - | - | (63,779) |  |  |
Total comprehensive income for the year | - | (63,779) | - | 538,167 | 474,388 |  |  |
Transfer of fair value gain on investment property, net of deferred tax (note 30) | - | - | 415,590 | (415,590) | - |  |  |
Balance as at 31 December 2024 | 4,999,820 | - | 17,790,559 | 4,751,736 | 27,542,115 |  |  |
Balance as at 1 January 2025 | 4,999,820 | - | 17,790,559 | 4,751,736 | 27,542,115 |  |  |
Profit for the year | - | - | - | 772,564 | 772,564 |  |  |
Other comprehensive income | - | - | - | - | - |  |  |
Total comprehensive income for the year | - | - | - | 772,564 | 772,564 |  |  |
Balance as at 31 December 2025 | 4,999,820 |  | 17,790,559 | 5,524,300 | 28,314,679 |  |  |
# Consolidated Statement of Cash Flows
as at 31 December 2025
|  | The Group |  | The Company
| Note | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Cash flows from operating activities |  |  |  |  |  |  |  |
Profit before tax |  | 2,079,163 |  | 4,052,194 |  | 1,087,247 |  | 1,169,507
Adjustments for: |  |  |  |  |  |  |  |
Change in fair value of investment properties | 17 | - |  | (1,387,784) |  | - |  | (765,929)
Share in profit of joint ventures | 15 | - |  | (109,996) |  | - |  | -
Depreciation of right-of-use assets and property, plant and equipment | 13, 24 | 1,843,826 |  | 1,757,724 |  | 33,012 |  | 31,812
Profit on sale of quoted equity securities | 1 16 6 | - |  | (63,779) |  | - |  | (63,779)
Provision for expected credit losses (ECL) | 34 | 30,883 |  | 225,537 |  | 23,454 |  | (260,625)
Provision for impairment of investment in joint venture | 7 | 15,600 |  | (1,083) |  | 15,600 |  | -
Profit on sale of investment properties | 17 | - |  | (1,144,296) |  | - |  | -
Dividends income |  | (529,868) |  | - |  | (955,475) |  | -
Finance and similar income | 9 | (17,195) |  | (3,602) |  | (1,318,671) |  | (1,081,903)
Finance costs | 10 | 2,439,541 |  | 2,677,986 |  | 1,668,374 |  | 1,721,156
Working capital changes: |  |  |  |  |  |  |  |
Increase in inventories | 19 | (274,994) |  | (161,534) |  | - |  | -
Decrease in property held-for-sale | 20 | 876,136 |  | 133,727 |  | - |  | -
Increase in contract assets | 22 | (2,118,627) |  | (627,491) |  | - |  | -
Increase/(decrease) in receivables | 21 | 4,716,355 |  | 403,353 |  | 1,333,204 |  | (733,438)
Increase/(decrease) in payables | 23 | (5,071,797) |  | 1,537,914 |  | 4,426,135 |  | 437,404
Receipts from related undertakings |  | - |  | 169,853 |  | - |  | -
Interest received from banks | 9 | 12,893 |  | 3,602 |  | - |  | -
Interest paid on overdraft | 10 | (85,249) |  | (112,744) |  | - |  | -
Taxation paid | 12 | (1,572,648) |  | (1,406,441) |  | (670,935) |  | (87,759)
Taxation refunded | 12 | 2,936 |  | 31,808 |  | - |  | -
Net cash generated from operating activities |  | 2,346,955 |  | 5,974,948 |  | 5,641,945 |  | 366,446
Cash flows from investing activities |  |  |  |  |  |  |  |
Payments to acquire property, plant and equipment | 13 | (1,912,028) |  | (2,639,561) |  | (35,635) |  | (33,000)
Payments to acquire investment property | 17 | (2,844,759) |  | (5,035,765) |  | (2,681) |  | (3,613,324)
Payments to acquire financial assets |  | - |  | - |  | - |  | (124,000)
Receipts from sale of equity instruments |  | - |  | 309,868 |  | - |  | 459,868
Dividends received |  | 529,868 |  | - |  | 955,475 |  | -
(Advances to)/receipts from group companies |  | - |  | - |  | (5,073,754) |  | 5,398,245
Payments to acquire right-of-use assets | 24 | (45,046) |  | - |  | - |  | -
Finance income | 9 | - |  | - |  | 1,318,671 |  | 1,081,903
Net cash used in investing activities |  | (4,271,965) |  | (7,365,458) |  | (2,837,924) |  | 3,169,692
Cash flows from financing activities |  |  |  |  |  |  |  |
Repayment/advances of bank loans and part of bond | 16,24 | 1,346,190 |  | 3,039,204 |  | 1,012,018 |  | (11,301,663)
Advances for the repayment of bond | 16 | - |  | 7,000,000 |  | - |  | 7,000,000
Other loans advanced/ (repayment) of other loans) | 16 | - |  | - |  | 135,057 |  | -
(Repayment to)/advances from related companies |  | - |  | - |  | (1,797,807) |  | 2,533,153
Advances from related companies | 16 | - |  | (414,630) |  | 104,380 |  | 191,732
(Repayment to)/advances from joint ventures | 21 | (479,522) |  | (191,004) |  | (589,107) |  | 55,180
Repayment of principal portion of lease liability | 24 | (72,818) |  | (418,177) |  | (39,500) |  | (39,500)
Interest paid on bonds | 16,24 | (1,269,972) |  | (1,566,986) |  | (1,269,972) |  | (1,566,986)
Interest paid on bank loans and other interest | 16,24 | (968,867) |  | (631,940) |  | (398,365) |  | (154,170)
Net cash from/(used in) financing activities |  | (1,444,989) |  | 6,816,467 |  | (2,843,296) |  | (3,282,254)
Effect of ECL on cash in banks |  | (9,012) |  | (9,712) |  | 77 |  | (110)
Net movement in cash and cash equivalents |  | (3,369,999) |  | 5,425,957 |  | (39,275) |  | 253,884
Cash and cash equivalents at beginning of year |  | 3,658,161 |  | (1,758,084) |  | 333,198 |  | 79,424
Cash and cash equivalents at end of year | 33 | 279,150 |  | 3,658,161 |  | 294,000 |  | 333,198

# Notes to the Consolidated Financial Statements for the year ended 31 December 2025 1. Corporate Information The consolidated financial statements of Hal Mann Vella Group p.l.c. and its subsidiaries (“the Group”) for the year ended 31 December 2025 were authorized for issue in accordance with a resolution of the Directors on 17 April 2026. Hal Mann Vella Group p.l.c. (“the Company”) is a public limited liability company incorporated in Malta, under the Companies Act, Cap. 386 of the Laws of Malta. The Company is principally a finance and investment company in connection with the ownership, development, operation and financing of the business activities of Hal Mann Vella Group of companies. Its registered office is at The Factory, Mosta Road, Lija, Malta. 2. Significant accounting policies 2.1 Basis of preparation and consolidation Basis of preparation These financial statements are prepared under the historical cost convention, as modified by the measurement of investment property, land and buildings classified as property, plant and equipment and financial assets at fair value and are in accordance with the requirements of the International Financial Reporting Standards (IFRS) as adopted by the European Union and comply with the Companies Act, Cap. 386 of the Laws of Malta. The consolidated financial statements are presented in Euro (€), which is the functional currency of the Group. Consolidation The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 31 December 2025. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has:
- | Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee)
- | Exposure, or rights, to variable returns from its involvement with the investee
- | The ability to use its power over the investee to affect its returns
Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
- | The contractual arrangement(s) with the other vote holders of the investee
- | Rights arising from other contractual arrangements
- | The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. Goodwill is initially measured as the excess of the aggregate of the consideration transferred, the amount of any non-controlling interests in the acquiree and the acquisition date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired. If this aggregate is less than the fair value of the identifiable net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units (CGUs) that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill has been allocated to a CGU and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the CGU retained. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value. 2.2 Current versus non-current classification The Group presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is:
- | Expected to be realised or intended to be sold or consumed in the normal operating cycle;
- | Held primarily for the purpose of trading;
- | Expected to be realised within twelve months after the reporting date; or
- | Cash and cash equivalents unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.
All other assets are classified as non-current. A liability is current when:
- | It is expected to be settled in the normal operating cycle;
- | It is held primarily for the purpose of trading;
- | It is due to be settled within twelve months after the reporting date; or
- | There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting date.
The Group classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities. 2.3 Investment in joint venture The Group has an interest in joint ventures. A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. The Group recognises its interest in the joint-venture using the equity method. Investments in joint ventures are included in the Group’s statement of financial position at cost and adjusted thereafter for the post-acquisition change in the share of net assets. The statement of profit or loss and other comprehensive income includes the share of profit or loss in joint venture. 2.4 Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity of another entity. Financial assets Initial recognition and measurement Financial assets are classified, at initial recognition, as financial assets measured at amortized cost, fair value through profit or loss (FVTPL) and fair value through other comprehensive income (FVTOCI). All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at FVTPL, transaction costs that are attributable to the acquisition of the financial asset. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at FVTPL, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under IFRS 15. Refer to the accounting policies in section 2.15 (Revenue from contracts with customers). In order for a financial asset to be classified and measured at amortised cost or FVTOCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at FVTPL, irrespective of the business model. The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset. Subsequent measurement For purposes of subsequent measurement, financial assets in these financial statements are classified in four categories:
- | financial assets at amortised cost (debt instruments)
- | financial assets at FVTOCI with recycling of cumulative gains and losses (debt instruments)
- | financial assets designated at FVTOCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)
- | financial assets at FVTPL
Financial assets at amortised cost (debt instruments) Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The Group’s financial assets at amortised cost include bank term deposits, trade receivables, and receivables from joint ventures and other related undertakings which are included both under current and non-current financial assets. Financial assets at FVTOCI (debt instruments) For debt instruments at FVTOCI, interest income, foreign exchange revaluation and impairment losses or reversals are recognised in the statement of profit or loss and computed in the same manner as for financial assets measured at amortised cost. The remaining fair value changes are recognised in OCI. Upon derecognition, the cumulative fair value change recognised in OCI is recycled to profit or loss. As at 31 December 2025 and 2024, the Group has no debt instruments at FVTOCI. Financial assets designated at FVTOCI (equity instruments) Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments designated at FVTOCI when they meet the definition of equity under IAS 32 Financial Instruments: Presentation and are not held for trading. The classification is determined on an instrument-by-instrument basis. Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in the statement of profit or loss when the right of payment has been established, except when the Company benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at FVTOCI are not subject to impairment assessment. The Group elected to classify irrevocably its equity investments under this category. Financial assets at FVTPL Financial assets at FVTPL are carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss. This category includes derivative instruments and listed equity investments which the Group had not irrevocably elected to classify at FVTOCI. Dividends on listed equity investments are recognised as other income in the statement of profit or loss when the right of payment has been established. A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if: the economic characteristics and risks are not closely related to the host; a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss category. As at 31 December 2025 and 2024, the Group has no financial assets at FVTPL. Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a Group of similar financial assets) is primarily derecognised (i.e., removed from the Group’s statement of financial position) when:
- | the rights to receive cash flows from the asset have expired; or
- | the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of its continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. Impairment Further disclosures relating to impairment of financial assets are also provided in notes 3 and 34 to the consolidated financial statements. The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at FVTPL. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate. ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). For lease receivables and majority of trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. For cash in bank, contract assets and amounts due from joint ventures and other related undertakings, the Group applies a general approach in calculating ECLs. Therefore, the Group tracks changes in credit risk, and recognises a loss allowance based on either 12-month ECLs or lifetime ECLs, depending on whether there has been a significant increase in credit risk on the financial instrument since initial recognition. This is being done by considering the change in the risk of default occurring over the remaining life of the financial instrument.
The following are the key elements in the calculation of ECLs:
a. Probability of Default (PD) | The PD is an estimate of the likelihood of default over a given time horizon. A default may only happen at a certain time over the assessed period, if the financial asset has not been previously derecognised.
b. Exposure at Default (EAD) | The EAD is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date.
c. Loss Given Default (LGD) | The LGD is an estimate of the loss arising in the case where a default occurs at a given time. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive.
The mechanics of the ECL method are summarised below:
Stage 1: | The 12-month ECL is calculated as the portion of lifetime ECL that represent the ECL that result from default events on a financial instrument that are possible within the 12 months after the reporting date. The Group calculates the 12-month ECL allowance based on the expectation of a default occurring in the 12 months following the reporting date. These expected 12-month default probabilities are applied to a forecast EAD and multiplied by the expected LGD.
Stage 2: | When a financial asset has shown a significant increase in credit risk since origination, the Group records an allowance for the lifetime ECL. The mechanics are similar to those explained above, but PDs and LGDs are estimated over the lifetime of the instrument.
Stage 3: | For financial asset considered as credit-impaired, the Group recognises the lifetime ECL. The method is similar to that for Stage 2 financial assets, with the PD set at 100%.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, loans and borrowings or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts. Subsequent measurement For purposes of subsequent measurement, financial liabilities are classified in two categories:
- | Financial liabilities at FVTPL
- | Financial liabilities at amortised cost (loans and borrowings)
Financial liabilities at FVTPL Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at FVTPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the statement of profit or loss. Financial liabilities designated upon initial recognition at FVTPL are designated at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied. The Group has not designated any financial liability at FVTPL as at 31 December 2025 and 2024. Financial liabilities at amortised cost (loans and borrowings) This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss. This category generally applies to interest-bearing loans and borrowings. For more information, refer to notes 16 and 34 to the consolidated financial statements. Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss. Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. 2.5 Property, plant and equipment Land and buildings are stated in the statement of financial position at its revalued amount, being the fair value at the date of revaluation. Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from those that would be determined using fair values at each reporting date. The Company carries its investment property at fair value, with changes being recognised in profit or loss. This is based on market valuations performed by independent professional architect at least every two years. In a year when market valuations are not performed by the independent professional architect, an assessment of the fair value of investment property is performed to reflect market conditions at the year-end date. An increase in the carrying amount arising on the revaluation of such land and buildings is recognised in the consolidated statement of profit or loss and other comprehensive income and afterwards held in the revaluation reserve on property, plant and equipment relating to a previous revaluation of that asset. Freehold land is not depreciated as it deemed to have an indefinite life. Property, plant and equipment, except for revalued land and buildings, are stated at cost less accumulated depreciation. Depreciation charge is provided from the month of acquisition until the month in which the asset is disposed of or scrapped. Depreciation is calculated using the reducing balance method to allocate the cost of the assets to their residual values over their estimated useful lives, as follows:
Buildings | nil
Electrical installations and fittings |  | 6.67% and 20%
Renewable energy equipment | 6.67%
Plant and machinery |  | 10%
Furniture and fittings | 10%
Improvements to premises |  | 10%
Air-conditioning equipment | 16.67%
Tools |  | 20%
Exhibits |  | 20%
Exhibition stand and site offices |  | 20% and 25%
Motor vehicles | 20%
Computer equipment and software |  | 25%
Office equipment |  | 25%
Telecommunications equipment |  | 25%
Computers and electronic equipment |  | 25%
Depreciation methods, useful life and residual values are reassessed at each reporting date. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss and other comprehensive income when the asset is derecognised. 2.6 Investment property Property that is held for long-term rental yields or for capital appreciation or both, and is not occupied by the Group, is classified as investment property. Investment property comprises freehold and leasehold land and buildings held under long-term operating leases. Investment property is measured initially at its historical cost, including related transaction costs and borrowing costs. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Borrowing costs which are incurred for the purpose of acquiring or constructing a qualifying investment property are capitalised as part of its cost. Borrowing costs are capitalised while acquisition or construction is actively underway. Capitalisation of borrowing costs is ceased once the asset is substantially complete and is suspended if the development of the asset is suspended. After initial recognition, investment property is carried at fair value representing open market value determined periodically. Fair value is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. If the information is not available, the Group uses alternative valuation methods such as recent prices on less active markets or discounted cash flow projections. These valuations are reviewed on a regular basis (usually every two years). Investment property that is being redeveloped for continuing use as investment property or for which the market has become less active continues to be measured at fair value. Fair value measurement on property under construction is only applied if the fair value is considered to be reliably measurable. The fair value of investment property reflects, among other things, rental income from current leases and assumptions about rental income from future leases in the light of current market conditions. The fair value also reflects, on a similar basis, any cash outflows that could be expected in respect of the property. Subsequent expenditure is capitalised to the asset's carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to profit or loss during the financial period in which they are incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised. The fair value of investment property does not reflect future capital expenditure that will improve or enhance the property and does not reflect the related future benefits from its future expenditure other than those a rational market participant would take into account when determining the value of the property. Changes in fair value are recognised in profit or loss and transferred to "Revaluation reserve on investment property" under equity. Investment properties are derecognised either when they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of derecognition. If an investment property becomes owner-occupied, it is reclassified as property, plant and equipment. Its fair value at the date of the reclassification becomes its cost for subsequent accounting purposes. When the Group decides to dispose of an investment property without development, the Group continues to treat the property as an investment property. Similarly, if the Group begins to redevelop an existing investment property for continued future use as investment property, it remains an investment property during the redevelopment. If an item of property, plant and equipment and property held-for-sale becomes an investment property because its use has changed, any difference resulting between the carrying amount and the fair value of this item at the date of transfer is treated in the same way as revaluation under IAS 16. Any resulting increase in the carrying amount of the property is recognised in statement of comprehensive income to the extent that it reverses a previous impairment loss; with any remaining increase recognised in other comprehensive income, directly to revaluation surplus with equity. Any resulting decrease in the carrying amount of the property is initially charged to other comprehensive income against any previously recognised revaluation surplus, with any remaining decrease charged to the profit or loss. Upon the disposal of such investment property, any surplus previously recorded in equity is transferred to retained earnings; the transfer is not made through statement of comprehensive income. 2.7 Inventories Inventories are valued at the lower of cost and net realisable value. Cost is determined on the weighted average cost method. The cost of finished goods comprises design costs, raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity). It excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. 2.8 Property held-for-sale Property held-for-sale is included in the financial statements at the lower of cost and net realisable value. Cost comprises the purchase price of acquiring the property and other costs incurred to develop the property. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. 2.9 Cash and cash equivalents Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand, which are subject to an insignificant risk of changes in value. For the purpose of the statement of cashflows, cash and cash equivalents consist of cash in hand and at bank as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group's cash management. 2.10 Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds. 2.11 Dividend distribution Dividend distribution to the Group's shareholders is recognised as a liability in the Group's financial statements in the period in which the dividends are approved by the Group's shareholders. 2.12 Trade payables Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. 2.13 Provisions Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as interest expense. 2.14 Foreign currencies Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in euro, which is the Company's functional and presentation currency. Foreign currency translations are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. All foreign exchange gains and losses are presented in the income statement within 'Other income' or 'Other expenses'. 2.15 Revenue recognition Revenue from contracts with customers (under IFRS 15) 'The Group's principal activities relate to the manufacture and business of stones, marbles, granites, patterned tiles, terrazzo and precast related products, as well as supply, installation, operation and maintenance of photovoltaic (PV) systems. The Group is also involved in property development and resale. Revenue from contracts is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects in exchange for those goods or services. The Group has generally concluded that it is the principal in its revenue arrangements, because it typically controls the goods or services before transferring them to the customer. Revenue is recognized to the extent that it is probable that future economic benefits will flow to the Group and these can be measured reliably. 'The Group's revenue recognition is straight-forward, hence no significant accounting judgement, estimates and assumptions (i.e., in terms of estimating variable considerations and stand-alone selling price) are involved. Sale of stones, marbles, granites, patterned tiles, terrazzo and precast related products 'Revenue from sale of manufactured construction materials is recognised at the point in time when control of asset is transferred to the customer, generally on delivery of products at the customer's location. The normal credit term is 30 to 90 days upon delivery. Sale of electricity generated from PV panels Revenue from sale of electricity is recognised at the point in time when control of the asset is transferred to the sole customer (i.e., Enemalta p.l.c.), generally upon exportation of the generated electricity to the solar grid. Enemalta p.l.c. pays the Group feed-in tariff (i.e., a tariff which is paid to a producer of electricity for the amount of electricity generated and exported to the electricity grid) based on the actual meter readings. In the case where the amount due to the Group from the electricity exported by the PV system exceeds the invoiced amount for the consumption of electricity for a particular billing period that is due to Enemalta p.l.c., such amount will be carried forward in the form of a credit note. When two consecutive scheduled bills based on actual meter readings are shown to be in credit, Enemalta p.l.c. is obliged to pay the Group the credit within 60 days of the date of the second scheduled bill. Sale of properties 'Revenue from sale of real properties is recognised at the point in time when control of asset is transferred to the customer, generally upon signing of deed of sale where the customer obtains legal title to the property. Total fund is paid in full on date of deed. Rendering of general construction and other services The Group recognises revenue from construction and other services over time because the Group's performance creates or enhances an asset that the customer controls as the asset is enhanced or created. In some cases, the customer simultaneously receives and consumes the benefits provided to them as the Group performs. The Group uses an input method in measuring progress of the services since there is a direct relationship between the Group’s effort (i.e., based on the costs incurred to date) and the transfer of service to the customer. The input method is implemented by first estimating the inputs required such as labor and other overheads, etc. to complete the service. The Group recognises revenue on the basis of the efforts expended to date relative to the total expected inputs to complete the service. The normal credit term is 30 to 90 days upon issuance of invoice. Further, the Group provides services that are either sold separately or bundled together with the sale of tiles, marble stones and granites to a customer. Contracts for bundled sales of tiles, marble stones, granites and services are comprised of two performance obligations because the promise to transfer tiles, marbles, granites and provide services are capable of being distinct and separately identifiable. Accordingly, the Group allocates the transcation price based on the relative stand-alone selling prices of tiles, marbles, granites and services. 'In determining the transaction price, the Group considers the effects of variable consideration, existence of significant financing component, non-cash consideration, and consideration payable to the customer. i) Variable consideration If the consideration in a contract includes a variable amount, the Group estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. In general, contracts for the sale of tiles, marble stones and granites do not provide customers with a right to return the goods; hence, no refund liability is recognised. In cases of discounts and/or price concessions for good and services, such are already established with the customer at the inception of the contract, thus, are not considered contingents as the amounts agreed are fixed and unavoidable. As at and for the years ended 31 December 2025 and 2024, there are no known factors or events which could make the consideration to be variable. The validity of this assessment is reassessed at each reporting date. ii) Significant financing component In most cases, the Group has contract assets wherein payment for goods and services rendered is not due from the customer until the full services agreed upon are completed. A contract asset is recognised over the period in which the services are performed to represent the Company's right to consideration for the services performed to date. Generally, it is the customer's preference to withhold payments to ensure that all performance obligations are performed as specified in the contract. This falls under one of the exemptions of 'significant financing component' - i.e., the difference between the promised consideration and the cash selling price of the goods or services is due to something other than financing. Further, the Group applies the practical expedient for short-term advances received from customers - i.e., the promised amount of consideration is not adjusted for the effects of a significant financing component if the period between the transfer of the promised goods or service and the payment is one year or less. As at and for the years ended 31 December 2025 and 2024, the contract liabilities are subsequently recognised as revenue within one year. iii) Non-cash consideration The Group does not receive non-cash considerations from customers for the sale of goods and services. iv) Consideration payable to customer The Group exports solar energy generated from PV panels to a customer who also supplies electricity to the Group for consumption. The consideration payable to a customer is accounted for as a reduction of the transaction price unless the payment to the customer is in exchange for a distinct good or service that the customer transfers to the Group. Contract balances Contract assets A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional. Trade receivables A receivable represents the company’s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Contract liabilities A contract liability is the obligation to transfer goods or services to a customer for which the company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the company performs under the contract (i.e., transfers control of the related goods or services to the customer). Cost to obtain a contract The Group applies the optional practical expedient to immediately expense costs to obtain a contract if the amortisation period of the asset that would have been recognised is one year or less. As such, payments for designers which constitute a relatively small amounts are immediately recognised as an expense in the consolidated statement of profit or loss and other comprehensive income. Other revenue sources (not within the scope of IFRS 15) The following recognition criteria must also be met before revenue is recognised: Rental income This relates to the rental income from the rental of immovable property in the ordinary couse of the Group's activities. For operating leases, it is recognised at profit or loss on a straight-line basis over the term of the lease and is stated net of value added tax. For finance leases, it is recognised at balance sheet as a lease receivable and amortised using effective interest method over the lease term. Dividend income Revenue from dividend income is recognised on the date the Group's right to receive payment is established. Interest income Interest income is accounted for when it is probable that the economic benefits associated with the transaction will flow to the Group and these can be measured reliably. Interest income is recognised on an accrual or time proportion basis. Other operating income Other operating income are accounted for when it is probable that the economic benefits associated with the transaction will flow to the Group and these can be measured reliably. 2.16 Leases The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group as a lessee The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. i) Right-of-use assets The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:
Hotel |  |  |  | 15 years
Industrial buildings |  |  |  | 15 to 65 years
Offices |  |  |  | 3 to 15 years
If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. Refer to the accounting policies in section 2.21 (Impairment of non-financial assets). ii) Lease Liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. The Group’s lease liabilities are included in Interest-bearing loans and borrowings (see note 16). iii) Short-term leases and leases of low-value assets The Group applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of assets that are considered to be low value. Lease payments on short-term leases and leases of lowvalue assets are recognised as expense on a straight-line basis over the lease term. The Group as a lessor Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss and other comprehensive income due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned. 2.17 Government grants Government grants are recognised where there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in their period in which they become receivable. 2.18 Taxation The tax expense for the year comprises current and deferred tax. Tax is recognized in profit or loss, except when it relates to items recognized in other comprehensive income or directly in equity, in which case it is also dealt with in other comprehensive income or in equity, as appropriate. Current income tax Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted, at the reporting date. Current income tax relating to items recognised directly in equity is recognised in equity and not in profit or loss. Deferred income tax Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised for all temporary differences, except when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except when the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at each reporting date. Value Added Tax Revenue, expenses and assets are recognised net of Value Added Tax, except:
- | where the Value Added Tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case Value Added Tax is recognised as part of the acquisition of the asset or as part of the expense item, as applicable;
- | where receivables and payables that are stated with the amount of Value Added Tax included.
The net amount of Value Added Tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position. 2.19 Borrowing cost Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing costs which are incurred for the purpose of acquiring or constructing qualifying property, plant and equipment or investment property, are capitalised as part of its cost. Borrowing costs are capitalised while acquisition or construction is actively underway, during the period of time that is required to complete and prepare the asset for its intended use. Capitalisation of borrowing costs is ceased once the asset is substantially complete and is suspended if the development of the asset is suspended. All other borrowing costs are expensed. Borrowing costs are recognised for all interest-bearing instruments on an accrual basis using the effective interest method. Interest costs include the effect of amortising any difference between the initial net proceeds and redemption value in respect of interest-bearing borrowings. 2.20 Fair value measurements and valuation processes The Group measures non-financial assets such as land and buildings and investment property at fair value at each reporting date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either (a) in the principal market for the asset or liability or (b) in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure at fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. Information about the valuation techniques and inputs used in determining the fair value of the equity at FVTOCI, land and building and investment property is disclosed in notes 13, 16 and 17, respectively. 2.21 Impairment of non-financial assets The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators. The Group bases its impairment calculation on most recent budgets and forecast calculations, which are prepared separately for each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. A long-term growth rate is calculated and applied to project future cash flows after the fifth year. Impairment losses of continuing operations are recognised in the statement of profit or loss in expense categories consistent with the function of the impaired asset, except for properties previously revalued with the revaluation taken to OCI. For such properties, the impairment is recognised in OCI up to the amount of any previous revaluation. For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit or loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase. Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods. Intangible assets with indefinite useful lives are tested for impairment annually at the CGU level, as appropriate, and when circumstances indicate that the carrying value may be impaired. 3. Critical accounting estimates and judgements In preparing the financial statements, the Directors are required to make judgments, estimates and assumptions that affect reported income, expenses, assets, liabilities and disclosure of contingent assets and liabilities. Use of available information and application of judgment are inherent in the formation of estimates. Actual results in the future could differ from such estimates and the differences may be material to the financial statements. These estimates are reviewed on a regular basis and if a change is needed, it is accounted in the period the changes become known. The most significant judgment and estimates are as follows: Judgments In the process of applying the Group’s accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognised in the consolidated financial statements: Determining the lease term of contracts with renewal and termination options – Group as lessee The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Group has several lease contracts that include extension and termination options. The Group applies judgment in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate. The Group includes the renewal period as part of the lease term for leases of assets with shorter non-cancellable period (i.e., three to five years). The Group typically exercises its option to renew for these leases because there will be a significant negative effect on production if a replacement asset is not readily available. The renewal periods for leases of assets with longer non-cancellable periods (i.e., 10 to 15 years) are not included as part of the lease term as these are not reasonably certain to be exercised. Furthermore, the periods covered by termination options are included as part of the lease term only when they are reasonably certain not to be exercised. Property lease classification – Group as lessor The Group has entered into commercial property leases on its investment property portfolio. The Group has determined, based on an evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a major part of the economic life of the commercial property and the present value of the minimum lease payments not amounting to substantially all of the fair value of the commercial property, that it retains substantially all the risks and rewards incidental to ownership of these properties and accounts for the contracts as operating leases. Property lease classification – Group as intermediate lessor The Group has entered into property leases on its right of use asset meeting the definition of investment property. Based on an evaluation of the terms and conditions of the arrangements, the Group has determined that it has the right to use the underlying asset for a period of time which is long term, and the sublease is not for all of the remaining term of the head lease. Then, the intermediate lessor, in effect has not transferred that right to another party and accounts for the contracts as operating leases. During the term of the sublease, the intermediate lessor recognises a depreciation charge for the right-of-use asset, interest on the lease liability and lease income from the sublease. Fair value of investment property The Group carries its investment property at fair value, with changes being recognised in profit or loss. This is based on market valuations performed by independent professional architect at least every two years. In a year when market valuations are not performed by the independent professional architect, an internal assessment of the fair value of investment property is performed to reflect market conditions at the year-end date. The last market valuations were performed in December 2024 and the Group recognized fair values of investment property in note 17 to the financial statements. Fair value of equity instruments designated at FVTOCI When the fair values of financial assets and financial liabilities recorded in the statement of financial position cannot be measured based on quoted prices in active markets, their fair value is measured using other valuation techniques including the net value asset method. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions relating to these factors could affect the reported fair value of financial instruments. See note 34 for further disclosures. Recognition of deferred tax assets The extent to which deferred tax assets can be recognized is based on an assessment of the probability that future taxable income will be available against which the deductible temporary differences and tax loss carry-forward can be utilized. In addition, significant judgement is required in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions. Estimates and assumptions Impairment of non-financial assets Impairment exists when the carrying value of an asset or CGU exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs of disposing of the asset. The value in use calculation is based on a discounted cash flow (DCF) model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the performance of the assets of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to goodwill recognised by the Group. Provision for ECL on trade receivables and lease receivables The Group uses a provision matrix to calculate ECLs for trade receivables and lease receivables. The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns (i.e., by geography, product type, customer type and rating). The provision matrix is initially based on the Group’s historical observed default rates. The Group calibrates the matrix to adjust the historical credit loss experience with forward-looking information. For instance, if forecast economic conditions (i.e., gross domestic product) are expected to deteriorate over the next year which can lead to an increased number of defaults in the manufacturing sector, the historical default rates are adjusted. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed. The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Group’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future. Provision for ECL on other financial assets The measurement of the Group's ECL on cash in banks, contracts assets, and amounts due from joint ventures and other related undertakings is a function of the PD, LGD and the EAD. These financial assets are measured under Stage 1 of the impairment model, and therefore ECLs are calculated on 12-month basis. Elements of the ECL model which are considered accounting judgments and estimates include:
- | The Group's internal credit grading model, which assigns PDs to the individual grades
- | The Group’s criteria for assessing if there has been a significant increase in credit risk and so allowances should be measured on a lifetime ECL basis and the qualitative assessment
- | Development of ECL models, including the various formulas and the choice of inputs
- | Determination of associations between macroeconomic scenarios and, economic inputs, and the effect on PDs, EADs and LGDs
- | Selection of forward-looking macroeconomic scenarios and their probability weightings, to derive the economic inputs into the ECL models
It is the Group’s policy to regularly review its model in the context of actual loss experience and adjust when necessary. Leases - Estimating the incremental borrowing rate The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary’s functional currency). The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary’s stand-alone credit rating). In the opinion of the management, except for the above, the accounting estimates, assumptions and judgements made in the course of preparing these financial statements are not difficult, subjective or complex to a degree which would warrant their description as significant in terms of the requirements of IAS 1 (revised) – ‘Presentation of Financial Statements’. 4. Application of New and Revised IFRS 4.1 New and amended standards and interpretations The Company applied for the first time certain standards and amendments, which are effective for annual periods beginning on or after 1 January 2025. The Company has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective. The nature and the impact of each new standard and amendment is described below: Lack of exchangeability – Amendments to IAS 21 An entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users of its financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entity’s financial performance, financial position and cash flows. These amendments had no impact on the financial statements of the Company. The Company intends to use the practical expedients in future periods if they become applicable. 4.2 Standards issued but not yet effective The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective. Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7 In December 2024, the IASB issued Amendments to IFRS 9 and IFRS 7 - Contracts Referencing Nature-dependent Electricity. The amendments apply only to contracts that reference nature-dependent electricity; the amendments:
• | Clarify the application of the ‘own-use’ requirements for in-scope contracts
• | Amend the designation requirements for a hedged item in a cash flow hedging relationship for in-scope contracts
• | Add new disclosure requirements to enable investors to understand the effect of these contracts on a company’s financial performance and cash flows
Annual Improvements to IFRS Accounting Standards - Volume 11 In July 2024, the IASB issued nine narrow scope amendments as part of its periodic maintenance of IFRS accounting standards. The amendments include clarifications, simplifications, corrections or changes to improve consistency in IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 7 Financial instruments: Disclosure and its accompanying Guidance on implementing IFRS 7, IFRS 9 Financial Instruments, IFRS 10 Consolidated Financial Statements and IAS 7 Statements of Cash Flows. Amendments to the Classification and Measurement of Financial Instruments—Amendments to IFRS 9 and IFRS 7 In May 2024, the IASB issued Amendments to IFRS 9 and IFRS 7, Amendments to the Classification and Measurement of Financial Instruments (the Amendments). The Amendments include:
• | A clarification that a financial liability is derecognised on the ‘settlement date’ and the introduction of an accounting policy choice (if specific conditions are met) to derecognise financial liabilities settled using an electronic payment system before the settlement date
• | Additional guidance on how the contractual cash flows for financial assets with environmental, social and corporate governance (ESG) and similar features should be assessed
• | Clarifications on what constitute ‘non-recourse features’ and what are the characteristics of contractually linked instruments
• | The introduction of disclosures for financial instruments with contingent features and additional disclosure requirements for equity instruments classified at fair value through other comprehensive income (OCI)
The above amendments will take effect for annual reporting periods starting on or after 1 January 2026. The Company does not intend to early adopt these pronouncements. Management has reviewed the forthcoming changes and considered their relevance to the Company’s operations, financial position, and reporting processes. For those standards expected to be applicable, the Company has commenced an assessment of the potential impact. At this stage, no material effects on the Company’s financial statements are anticipated. Where the impact of a standard cannot yet be reasonably estimated, the Company will provide updated disclosures as the effective date approaches. IFRS 18 Presentation and Disclosure in Financial Statements In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of Financial Statements. IFRS 18 introduces new requirements for presentation within the statement of profit or loss, including specified totals and subtotals. Furthermore, entities are required to classify all income and expenses within the statement of profit or loss into one of five categories: operating, investing, financing, income taxes and discontinued operations, whereof the first three are new. The standard requires disclosure of newly defined management-defined performance measures, subtotals of income and expenses, and it also includes new requirements for aggregation and disaggregation of financial information based on the identified ‘roles’ of the primary financial statements (PFS) and the notes. In addition, narrow-scope amendments have been made to IAS 7 Statement of Cash Flows, which include changing the starting point for determining cash flows from operations under the indirect method, from ‘profit or loss’ to ‘operating profit or loss’ and removing the optionality around classification of cash flows from dividends and interest. In addition, there are consequential amendments to several other standards. The Company is currently working to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements. The initial expected material impacts on Company’s financial statements are, as follows:
• | Rental income, change in fair value from investment properties and share of profit or an associate and a joint venture will be classified in the investing category within the statement of profit or loss.
• | New disclosure will be added: (a) management-defined performance measures; (b) specified expense by nature if expenses are presented by function in the operating category of the statement of profit or loss; and (c) a reconciliation for each line item in the statement of profit or loss between the restated amounts presented applying IFRS 18 and the amounts previously presented applying IAS 1.
• | Interest received and interest paid will be classified in the investing activities and financing activities, respectively, on the statement of cash flows.
IFRS 18, and the amendments to the other standards, are effective for reporting periods beginning on or after 1 January 2027. The Company does not intend to early adopt these pronouncements. IFRS 19 Subsidiaries without Public Accountability: Disclosures In May 2024, the IASB issued IFRS 19, which allows eligible entities to elect to apply its reduced disclosure requirements while still applying the recognition, measurement and presentation requirements in other IFRS accounting standards. To be eligible, at the end of the reporting period, an entity must be a subsidiary as defined in IFRS 10, cannot have public accountability and must have a parent (ultimate or intermediate) that prepares consolidated financial statements, available for public use, which comply with IFRS accounting standards. IFRS 19 will become effective for reporting periods beginning on or after 1 January 2027. 5. Segment information For management purposes, the Group is organised into business units based on its products and services and has two reportable segments, as follows:
Property Development and Letting | This segment carries works in the building industry, including construction works, plumbing and electrical and to operate as turnkey contractors. Also in this segment, the Group leases out offices and residential building to third parties. The Group owns one hotel namely the Huli Hotel with an underlying Bistro Restaurant. The hotel as well as the restaurant are leased out to third parties.
Manufacturing, Products and General Contracting Services | This segment includes the companies responsible for manufacturing and exports. This segment includes specialising in the manufacture of stone elements, arranging logistics, plant hire, deliveries, and supplies and subcontracting work. Also, coordination of orders for customers for products and services is done.
Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the consolidated financial statements. Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties. Inter-segment transactions, assets and liabilities are eliminated upon consolidation and reflected in the ‘eliminations’ column.
The Group
Year ended 31 December 2025 | Property development and Letting | Manufacturing and general contracting services | Total segments | Eliminations | Consolidated
| € | € | € | € | €
External customers | 6,826,439 | 25,131,724 | 31,958,163 | - | 31,958,163
Inter-segment | 705,015 | 9,704,360 | 10,409,375 | (10,409,375) | -
Total revenue | 7,531,454 | 34,836,084 | 42,367,538 | (10,409,375) | 31,958,163
Income/(expenses) |  |  |  |  |
Finance and similar income | 1,335,866 | 35,543 | 1,371,409 | (1,354,214) | 17,195
Finance cost | (2,456,333) | (1,472,195) | (3,928,528) | 1,488,987 | (2,439,541)
Depreciation of property, plant and equipment | (33,537) | (1,545,763) | (1,579,300) |  | (1,579,300)
Income tax expense | (917,010) | 2,360,796 | 1,443,786 | (38,608) | 1,405,178
Segment profit before tax (note 8) | 2,331,034 | 273,857 | 2,604,891 | (525,728) | 2,079,163
Total assets | 133,411,675 | 53,589,175 | 187,000,850 | (55,039,556) | 131,961,294
Total liabilities | 73,902,562 | 48,229,736 | 122,132,298 | (47,537,332) | 74,594,965
Other disclosures |  |  |  |  |
Interest in joint ventures | 120 | - | 120 | 1,662,453 | 1,662,573
Capital expenditure | 7,394,228 | 1,912,028 | 9,306,256 | - | 9,306,256
The Group
Year ended 31 December 2024 | Property development and Letting | Manufacturing and general contracting services | Total segments | Eliminations | Consolidated
| € | € | € | € | €
External customers | 4,576,856 | 22,471,062 | 27,047,918 | - | 27,047,918
Inter-segment | 680,828 | 8,531,369 | 9,212,197 | (9,212,197) | -
Total revenue | 5,257,684 | 31,002,431 | 36,260,115 | (9,212,197) | 27,047,918
Income/(expenses) |  |  |  |  |
Finance and similar income | 1,085,505 | 166,603 | 1,252,108 | (1,122,445) | 129,663
Finance cost | (2,614,280) | (1,449,835) | (4,064,115) | 1,386,129 | (2,677,986)
Depreciation of property, plant and equipment | (32,395) | (1,461,679) | (1,494,074) | - | (1,494,074)
Share in profit of joint ventures | 109,996 | - | 109,996 | - | 109,996
Income tax expense | (1,258,888) | (483,134) | (1,742,022) | (15,454) | (1,757,476)
Segment profit before tax | 3,522,943 | 209,057 | 3,732,000 | 320,194 | 4,052,194
Total assets | 123,365,624 | 52,233,776 | 175,599,399 | (37,434,998) | 138,164,402
Total liabilities | 65,270,535 | 49,618,007 | 114,888,542 | (30,606,127) | 84,282,415
Other disclosures |  |  |  |  |
Interest in joint ventures | 15,720 | - | 15,720 | 1,661,852 | 1,677,572
Capital expenditure | 6,364,295 | 2,639,561 | 9,003,856 | - | 9,003,856
Capital expenditure consists of additions of property, plant and equipment, and investment properties.
6. Revenue from contracts with customers Disaggregated revenue information Set out below is the disaggregation of the Group's revenue from contracts with customers:
| For the year ended 31 December 2025
| Manufacturing and general contracting services |  | Property development |  | Total
| € |  | € |  | €
Type of goods or service |  |  |  |  |
Sale of stones, marbles, granites, patterned tiles, terrazzo and precast related products | 11,956,021 |  | - |  | 11,956,021
Sale of electricity generated from PV panels | 271,502 |  | - |  | 271,502
Rendering of general construction and other services | 12,904,201 |  | - |  | 12,904,201
Sale of properties | - |  | 4,207,820 |  | 4,207,820-
| 25,131,724 |  | 4,207,820 |  | 29,339,544
Geographical markets |  |  |  |  |
Local | 24,792,902 |  | 4,207,820 |  | 29,000,722
Foreign | 338,822 |  | - |  | 338,822
| 25,131,724 |  | 4,207,820 |  | 29,339,544
Timing of revenue recognition |  |  |  |  |
Goods transferred at a point in time | 12,227,523 |  | 4,207,820 |  | 16,435,343
Services transferred over time | 12,904,201 |  | - |  | 12,904,201
| 25,131,724 |  | 4,207,820 |  | 29,339,544
| For the year ended 31 December 2024
| Manufacturing and general contracting services |  | Property development |  | Total
| € |  | € |  | €
Type of goods or service |  |  |  |  |
Sale of stones, marbles, granites, patterned tiles, terrazzo and precast related products | 4,196,319 |  | - |  | 4,196,319
Sale of electricity generated from PV panels | 274,624 |  | - |  | 274,624
Rendering of general construction and other services | 18,000,119 |  | - |  | 18,000,119
Sale of properties | - |  | 2,011,000 |  | 2,011,000
| 22,471,062 |  | 2,011,000 |  | 24,482,062
Geographical markets |  |  |  |  |
Local | 22,469,179 |  | 2,011,000 |  | 24,480,179
Foreign | 1,883 |  | - |  | 1,883
| 22,471,062 |  | 2,011,000 |  | 24,482,062
Timing of revenue recognition |  |  |  |  |
Goods transferred at a point in time | 4,470,943 |  | 2,011,000 |  | 6,481,943
Services transferred over time | 18,000,119 |  | - |  | 18,000,119
| 22,471,062 |  | 2,011,000 |  | 24,482,062
Set out below is the reconciliation of the revenue from contracts with customers with the amounts disclosed in the segment information (see note 5):
|  | For the years ended 31 December
|  | 2025 |  | 2025 |  | 2024 |  | 2024
|  | Manufacturing and general contracting services |  | Property development |  | Manufacturing and general contracting services |  | Property development
|  | € |  | € |  | € |  | €
Revenue |  |  |  |  |  |  |  |
External customer |  | 25,131,724 |  | 4,207,820 |  | 22,471,062 |  | 2,011,000
Inter-segment |  | 9,704,360 |  | - |  | 8,531,369 |  | -
|  | 34,836,084 |  | 4,207,820 |  | 31,002,431 |  | 2,011,000
Inter-segment adjustments and eliminations |  | (9,704,360) |  | - |  | (8,531,369) |  | -
Total revenue from contracts with customers |  | 25,131,724 |  | 4,207,820 |  | 22,471,062 |  | 2,011,000
Contract balances |  |  |  |  |  |  |  |
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Trade receivables - net of ECL (note 21) | 4,557,418 |  | 8,957,002 |  | - |  | -
Contract assets - net of ECL (note 22) | 4,361,520 |  | 2,295,441 |  | - |  | -
In 2025, €100,739 was recognised as reversal of excess provision for ECL on trade receivables (2024: provision expense of €110,931), see notes 21 and 34. Contract assets relate to revenue earned from ongoing construction services and finishing works. As such, the balances of this account vary and depend on the number of ongoing construction services at the end of the year. In 2025, allowance for ECL on contract assets increased by €331,490 (2024: increased by €46,107). Performance obligations Information about the Group’s performance obligations are summarised below: Stones, marbles, granites, patterned tiles, terrazzo and precast related products The performance obligation is satisfied upon delivery of stones, marbles, granites, patterned tiles, terrazzo and precast related products; and payment is generally due within 30 to 90 days from delivery. The performance obligation to deliver stones, marbles, granites, patterned tiles, terrazzo and precast related products with a manufacturing lead time of one month has only one payment option. The customer pays the transaction price equal to the cash selling price within 30 to days upon delivery of the goods. This results to no significant financing component for those contracts. The Group assesses that there are no other promises in the contract of sale of stones, marbles, granites, patterned tiles, terrazzo and precast related products that are separate performance obligations to which a portion of the transaction price needs to be allocated, such as warranties and customer loyalty points. The transaction price, which is equal to the selling price indicated in the sales invoices issued, is therefore allocated to only one performance obligation. The Group assesses that there exist no variable considerations, non-cash consideration and consideration payable to the customer relating to the sale of stones, marbles, granites, patterned tiles, terrazzo and precast related products. Electricity generated from PV panels The performance obligation is satisfied upon exportation of the generated electricity to the solar grid. In the case where the amount due to the Group from the electricity exported by the PV system exceeds the invoiced amount for the consumption of electricity for a particular billing period that is due to the customer, such amount will be carried forward in the form of a credit note. When two consecutive scheduled bills based on actual meter readings are shown to be in credit, Enemalta plc is obliged to pay the Group the credit within 60 days of the date of the second scheduled bill. The Group assesses that there are no other promises in the contract of sale of electricity that are separate performance obligations to which a portion of the transaction price needs to be allocated. The transaction price, which is equal to the selling price indicated in the sales invoices issued, is therefore allocated to only one performance obligation. The Group assesses that there exist no variable considerations, and non-cash consideration payable to the customer relating to the sale of electricity. The consideration payable to a customer who also supplies electricity to the Group for consumption is accounted for as a reduction of the transaction price unless the payment to the customer is in exchange for a distint good or service that the customer transfers to the Group. General construction and other services The performance obligation is satisfied over-time and payment is generally due upon completion of projects and acceptance of the customer. In some contracts, short-term advances are required before the construction is provided. The Group uses an input method in measuring progress of the services since there is a direct relationship between the Group’s effort (i.e., based on the costs incurred to date) and the transfer of service to the customer. The input method is implemented by first estimating the inputs required such as labor and other overheads, etc. to complete the service. The Group recognises revenue on the basis of the efforts expended to date relative to the total expected inputs to complete the service. The normal credit term is 30 to 90 days upon issuance of invoice. Further, the Group provides services that are either sold separately or bundled together with the sale of tiles, marble stones and granites to a customer. Contracts for bundled sales of tiles, marble stones, granites and services are comprised of two performance obligations because the promise to transfer tiles, marbles, granites and provide services are capable of being distinct and separately identifiable. Accordingly, the Group allocates the transcation price based on the relative stand-alone selling prices of tiles, marbles, granites and services. Properties held-for-sale The performance obligation is satisfied at the point in time when control of the asset is transferred to the customer, generally upon signing of deed of sale where the customer obtains legal title to the property. The normal credit term is 30 to 90 days from date of deed. The Group assesses that there are no other promises in the contract of sale of properties held-for-sale that are separate performance obligations to which a portion of the transaction price needs to be allocated. The transaction price, which is equal to the selling price indicated in the deed of sale signed by both parties, is therefore allocated to only one performance obligation. The Group assesses that there exist no variable considerations, noncash consideration and consideration payable to the customer relating to the sale of properties held-for-sale. As at 31 December 2024 and 2023, the transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) amounted to nil. 7. Expenses by nature
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Cost of sales |  |  |  |  |  |  |  |
Direct wages (note 11) |  | 3,783,488 |  | 3,601,654 |  | - |  | -
Social security contributions (note 11) |  | 247,318 |  | 246,270 |  | - |  | -
Cost of property sold (note 20) |  | 3,586,432 |  | 1,462,255 |  | - |  | -
Onsite expenditure |  | 197,166 |  | 123,164 |  | - |  | -
Cost of goods sold (note 19) |  | 12,545,999 |  | 11,287,762 |  | - |  | -
Other direct costs |  | 446,552 |  | 430,936 |  | - |  | -
|  | 20,806,955 |  | 17,152,041 |  | - |  | -
Distribution and selling costs |  |  |  |  |  |  |  |
Advertising and promotions |  | 47,885 |  | 77,342 |  | - |  | -
Other distribution costs |  | 35,143 |  | 54,249 |  | - |  | -
|  | 83,028 |  | 131,591 |  | - |  | -
Administrative expenses
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Directors' remuneration (note 11) |  | 330,789 |  | 329,973 |  | 27,000 |  | 27,000
Office salaries (note 11) |  | 2,372,315 |  | 2,073,883 |  | - |  | -
Social security contributions and |  |  |  |  |  |  |  |
maternity (note 11) |  | 189,134 |  | 154,765 |  | - |  | -
Auditors' remuneration |  | 39,254 |  | 38,104 |  | 4,300 |  | 4,300
Provision for ECL (notes 16, 21, 22 |  | 30,883 |  | 225,537 |  | 23,454 |  | (260,625)
and 33) |  |  |  |  |  |  |  |
Legal and professional fees |  | 570,818 |  | 460,186 |  | 400,507 |  | 240,717
Repairs and maintenance |  | 477,916 |  | 486,616 |  | - |  | -
Rent (note 24) |  | 35,423 |  | 8,500 |  | 29,615 |  | 1,989
Utilities |  | 229,475 |  | 309,008 |  | 476 |  | 541
Information and communication technology fees |  | 118,997 |  | 75,736 |  | 54,353 |  | -
Insurance |  | 337,864 |  | 268,815 |  | 12,231 |  | 23,049
Motor vehicle expenses |  | 20,670 |  | 9,169 |  | - |  | -
Donations |  | 64,716 |  | 47,824 |  | - |  | -
Other administrative expenses |  | 682,801 |  | 780,234 |  | 116,142 |  | 232,960
|  | 5,501,055 |  | 5,268,350 |  | 668,078 |  | 269,931
Other operating charges
Provision for impairment of investment |  |  |  |  |  |  |  |
in joint venture |  | 15,600 |  | - |  | 15,600 |  | -
Others |  | 15,784 |  | - |  | - |  | -
|  | 31,384 |  | - |  | 15,600 |  | -
Depreciation
Depreciation (cost of sales) |  | 717,126 |  | 722,308 |  | - |  | -
Depreciation (distribution and selling costs) |  | 42,609 |  | 82,829 |  | - |  | -
Depreciation (administrative expenses) |  | 1,084,091 |  | 952,587 |  | 33,012 |  | 31,812
|  | 1,843,826 |  | 1,757,724 |  | 33,012 |  | 31,812
Auditors' fees Fees charged by the auditors for services rendered during the financial years ended 31 December 2025 and 2024 relate to the following:
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Annual statutory audit |  | 39,254 |  | 38,104 |  | 4,300 |  | 4,300
Other non-audit fees Fees charged by the auditor for non-audit services rendered are included in Legal and Professional fees, and are the following:
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Tax advisory and compliance |  | 1,800 |  | 1,800 |  | 200 |  | 200
Other non-assurance services |  | 15,240 |  | 15,240 |  | 15,240 |  | 15,240
|  | 17,040 |  | 17,040 |  | 15,440 |  | 15,440
8. Other operating income
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Other income from construction works |  | 5,074 |  | 24,485 |  | - |  | -
Income from government grants |  | 33,720 |  | - |  | - |  | -
Exchange fluctuation |  | - |  | 13,976 |  | - |  | -
Works and installations |  | - |  | 7,952 |  | - |  | -
Gain on assignment of property |  | - |  | 25,000 |  | - |  | -
Income from expense recharge to subsidiaries |  | - |  | - |  | 281,818 |  | 407,268
Others (note 5) |  | 240,932 |  | 1,085,037 |  | - |  | 6,996
|  | 279,726 |  | 1,156,450 |  | 281,818 |  | 414,264
9. Finance and similar income
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Other interest income |  | 15,044 |  | 126,061 |  | - |  | -
Interest from banks |  | 2,151 |  | 3,602 |  | - |  | -
Interest from related and subsidiary undertakings |  | - |  | - |  | 1,318,671 |  | 1,081,903
|  | 17,195 |  | 129,663 |  | 1,318,671 |  | 1,081,903
10. Finance costs
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Bank overdraft interest |  | 85,249 |  | 112,744 |  | - |  | 2,496
Interest on bonds and amortisation of bond issue cost |  | 1,269,972 |  | 1,566,986 |  | 1,269,972 |  | 1,566,986
Bank loan interest |  | 758,905 |  | 631,940 |  | 357,403 |  | 110,667
Interest on finance lease liability (note 24) |  | 317,783 |  | 317,001 |  | 40,962 |  | 41,005
Other interest |  | 7,632 |  | 49,315 |  | 37 |  | 2
|  | 2,439,541 |  | 2,677,986 |  | 1,668,374 |  | 1,721,156
11. Staff costs and employee information Staff costs for the year comprised the following:
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Wages and salaries (including Directors’ remuneration) (note 7) |  | 6,486,592 |  | 6,005,510 |  | 27,000 |  | 27,000
Social security contributions (note 7) |  | 436,452 |  | 401,035 |  | - |  | -
|  | 6,923,044 |  | 6,406,545 |  | 27,000 |  | 27,000
The average number of persons (including Directors) employed by the company during the year was as follows:
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | No. |  | No. |  | No. |  | No.
Operational |  | 157 |  | 131 |  | - |  | -
Administration |  | 62 |  | 63 |  | 3 |  | 3
Distribution |  | 16 |  | 13 |  | - |  | -
|  | 235 |  | 207 |  | 3 |  | 3
12. Income tax Tax expense on profit on ordinary activities Provision for income tax has been made at the rate of 35% on the chargeable income for the year except for investment income which is charged at the rates of 15% and 35% and for proceeds from sale of property taxable at 8% and 5% final withholding tax.
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Income tax expense: |  |  |  |  |  |  |  |
Tax at source |  | (272,809) |  | - |  | (272,809) |  | -
Current tax charge |  | (314,826) |  | (458,309) |  | (155,036) |  | (193,925)
Final withholding tax at 15% |  | (343,108) |  | (323,719) |  | (31,738) |  | (28,181)
Final withholding tax at 8% |  | (184,810) |  | (312,800) |  | - |  | -
Final withholding tax at 10% |  | - |  | (700,000) |  | - |  | -
Total current tax expense |  | (1,115,553) |  | (1,794,828) |  | (459,583) |  | (222,106)
Deferred taxation (note 25): |  |  |  |  |  |  |  |
Credit/ (charge) for the year |  | 2,520,731 |  | 37,352 |  | 114,900 |  | (409,234)
Income tax expense for the year |  | 1,405,178 |  | (1,757,476) |  | (314,683) |  | (631,340)
Tax reconciliation
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Profit before tax |  | 2,079,163 |  | 4,052,194 |  | 1,087,247 |  | 1,169,507
Taxation charge thereon |  | 727,707 |  | 1,418,268 |  | 380,536 |  | 409,327
Tax effect of: |  |  |  |  |  |  |  |
- excess of carrying amount of property, plant and equipment over tax base |  | (20,560) |  | 190,374 |  | - |  | -
- expenses not allowed for tax purposes |  | 42,501 |  | 197,956 |  | 701,878 |  | 165,299
- income not allowed for tax purposes |  | (1,229) |  | (131,096) |  | - |  | -
- income taxed at different rates |  | (1,624,447) |  | 264,402 |  | (622,831) |  | (84,445)
- unabsorbed capital allowances |  | (38,393) |  | (38,315) |  | - |  | -
- unabsorbed capital losses |  | (10,885) |  | 3,295 |  | - |  | -
- change in the fair value of investment property |  | - |  | (262,971) |  | - |  | (268,075)
- effect of adoption of IFRS 16 |  | (80,903) |  | (110,263) |  | - |  | -
- deferred tax charge |  | (398,970) |  | 225,826 |  | (144,900) |  | 409,234
Income tax (credit)/expense for the year |  | (1,405,178) |  | 1,757,476 |  | 314,683 |  | 631,340
Current taxation Taxation due/recoverable is made up as follows:
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
As at 1 January |  | 1,572,179 |  | 1,151,983 |  | 719,935 |  | 585,588
Income tax expense |  | 1,115,553 |  | 1,794,828 |  | 459,583 |  | 222,106
Tax refund |  | 2,936 |  | 31,808 |  | - |  | -
|  | 2,690,668 |  | 2,978,619 |  | 1,179,518 |  | 807,694
Payments: |  |  |  |  |  |  |  |
Settlement tax |  | (636,405) |  | (69,922) |  | (366,387) |  | (59,578)
Final withholding tax |  | (527,918) |  | (1,336,519) |  | (31,738) |  | (28,181)
Tax at source |  | (397,144) |  | - |  | (272,809) |  | -
|  | (1,561,467) |  | (1,406,440) |  | (670,934) |  | (87,759)
As at 31 December |  | 1,129,201 |  | 1,572,179 |  | 508,584 |  | 719,935
13. Property, plant and equipment The Group Fair value Freehold land and buildings were revalued on 30 December 2024. An independent valuation of the freehold land and buildings was performed by independent professional architects. The valuation for this commercial building was determined by the market comparison method. It has been categorised to fall within Level 2 of the fair value hierarchy. There were no transfers between levels during the year. The different levels in fair value hierarchy have been defined in note 34. As at 31 December 2025, management also assessed whether there are any significant changes to the significant inputs of the valuation. If these assets were included in the financial statements at cost, their carrying amounts would have been €4,901,223 (2024: €4,913,058).

Owner-occupied property is disclosed in property, plant and equipment as leasehold industrial buildings
| The Group
| Freehold land and buildings | Plant and machinery | Tools | Computer equipment and software | Office equipment | Air-conditioning equipment | Tele- communications | Furniture and fittings | Motor vehicles
| € | € | € | € | € | € | € | € | €
Cost / Valuation |  |  |  |  |  |  |  |  |
As at 1 January 2024 | 24,255,653 | 9,979,432 | 236,600 | 594,390 | 57,979 | 46,485 | 12,528 | 767,271 | 1,406,137
Additions | - | 1,108,582 | 45,170 | 34,650 | - | 2,769 | - | 2,585 | 12,976
Write-off | - | - | - | - | - | - | - | (8,711) | -
Revaluation surplus (note 28) | (543,186) | - | - | - | - | - | - | - | -
As at 31 December 2024 | 23,682,467 | 11,088,014 | 281,770 | 629,040 | 57,979 | 49,254 | 12,528 | 761,145 | 1,419,133
Additions | - | 403,899 | 55,556 | 35,635 | 450 | 4,071 | - | 5,862 | 97,033
Reclassification | - | - | - | (450) | - | - | - | - | -
As at 31 December 2025 | 23,682,467 | 11,491,913 | 337,326 | 664,225 | 58,429 | 53,325 | 12,528 | 767,007 | 1,516,146
Depreciation |  |  |  |  |  |  |  |  |
As at 1 January 2024 | 19,422 | 3,629,487 | 179,358 | 441,660 | 57,149 | 36,130 | 10,278 | 604,799 | 1,017,941
Charge for the year | - | 712,542 | 9,766 | 34,327 | - | 2,813 | 459 | 41,602 | 78,300
Released on disposals | - | - | - | - | - | - | - | (1,742) | -
As at 31 December 2024 | 19,422 | 4,342,029 | 189,124 | 475,987 | 57,149 | 38,943 | 10,737 | 644,659 | 1,096,241
Charge for the year | - | 698,868 | 18,924 | 35,206 | 14 | 2,934 | 205 | 33,554 | 38,261
As at 31 December 2024 | 19,422 | 5,040,897 | 208,048 | 511,193 | 57,163 | 41,877 | 10,942 | 678,213 | 1,134,502
Net book amount |  |  |  |  |  |  |  |  |
As at 31 December 2024 | 23,663,045 | 6,745,985 | 92,646 | 153,053 | 830 | 10,311 | 1,791 | 116,486 | 322,872
As at 31 December 2025 | 23,663,045 | 6,451,016 | 129,278 | 153,032 | 1,266 | 11,448 | 1,586 | 88,794 | 381,644
| The Group |
| Improvements to premises | Exhibition stand and site offices | Renewable energy | Electrical installations and fittings | Exhibits | Computers and electronic equipment | Total |
| € | € | € | € | € | € | € |
Cost / Valuation |  |  |  |  |  |  |  |
As at 1 January 2024 | 7,083,531 | 159,756 | 1,776,220 | 32,769 | 357,406 | 416,943 | 47,153,100 |
Additions | 1,234,179 | 67,370 | - | - | - | 131,280 | 2,639,561 |
Write-off | - | - | - | - | - | - | (8,711) |
Disposals | - | - | - | - | - | - | (543,186) |
As at 31 December 2024 | 8,317,710 | 227,126 | 1,776,220 | 32,769 | 357,406 | 548,223 | 49,240,764 |
Additions | 1,088,808 | 28,382 | 3,372 | - | - | 188,960 | 1,912,028 |
Reclassification | - | - | - | - | - | - | (450) |
As at 31 December 2025 | 9,406,518 | 255,508 | 1,779,592 | 32,769 | 357,406 | 737,183 | 51,152,342 |
Depreciation |  |  |  |  |  |  |  |
As at 1 January 2024 | 2,271,053 | 148,802 | 931,172 | 32,769 | 296,258 | 367,797 | 10,044,075 |
Charge for the year | 456,905 | 27,696 | 78,289 | - | - | 50,498 | 1,493,197 |
Released on disposals | - | - | - | - | - | - | (1,742) |
As at 31 December 2024 | 2,727,958 | 176,498 | 1,009,461 | 32,769 | 296,258 | 418,295 | 11,535,530 |
Charge for the year | 620,437 | 19,670 | 71,039 | - | - | 40,188 | 1,579,300 |
As at 31 December 2025 | 3,348,395 | 196,168 | 1,080,500 | 32,769 | 296,258 | 458,483 | 13,114,830 |
Net book amount |  |  |  |  |  |  |  |
As at 31 December 2024 | 5,589,752 | 50,628 | 766,759 | - | 61,148 | 129,928 | 37,705,234 |
As at 31 December 2025 | 6,058,123 | 59,340 | 699,092 | - | 61,148 | 278,700 | 38,037,512 |

The Company
|  | Computer software |  | Total
|  | € |  | €
Cost |  |  |  |
As at 1 January 2024 |  | 156,267 |  | 156,267
Additions |  | 33,000 |  | 33,000
As at 31 December 2024 |  | 189,267 |  | 189,267
Additions |  | 35,635 |  | 35,635
As at 31 December 2025 |  | 224,902 |  | 224,902
Depreciation |  |  |  |
As at 1 January 2024 |  | 32,932 |  | 32,932
Charge for the year |  | 31,812 |  | 31,812
As at 31 December 2024 |  | 64,744 |  | 64,744
Charge for the year |  | 33,012 |  | 33,012
As at 31 December 2025 |  | 97,756 |  | 97,756
Net book amount |  |  |  |
As at 31 December 2024 |  | 124,523 |  | 124,523
As at 31 December 2025 |  | 127,146 |  | 127,146
14. Investment in subsidiaries
|  | The Company
|  | 2025 |  | 2024
|  | € |  | €
Cost |  |  |  |
As at 31 December |  | 9,080,343 |  | 9,080,343
14.1 As at 31 December 2025, the Company held the following equity interests:
Undertaking / Registered Office |  |  |  | Number, class and |  | Percentage of
|  |  |  |  | nominal value |  | issued shares
|  |  |  |  | of shares held |  | held
|  |  |  |  |  |  |  |  | 2025 (2024)
Mavina Holiday Complex Ltd |  | 2,998 Ordinary shares |  | 99.93%
The Factory, |  | of €2.329373 each |  |
Mosta Road, |  | fully paid up |  |
Lija LJA 9016 |  |  |  |  |  |
The subsidiary is engaged in the letting of one hotel and restaurant.
Sudvel Limited |  | 214,650 Ordinary shares |  | 100%
Hal Mann Vella, The Factory, |  | of €2.329373 each |  |
Mosta Road, |  | fully paid up |  |
Lija LJA 9016 |  |  |  |  |  |
The subsidiary is principally engaged in the finance and holding of immovable property. The company also acts as a guarantor to the bond issued by Hal Mann Vella Group p.l.c.
Hal Mann International Limited |  | 5,000,000 Ordinary shares |  | 100%
Hal Mann, The Factory, |  | of €1 each |  |
Mosta Road, |  | fully paid up |  |
Lija, LJA 9016 |  |  |  |  |  |
The subsidiary is engaged in manufacturing and assembling marble and stone related products and the purchase of materials required for the manufacturing activity of the company.
Hal Mann Properties Ltd |  | 101,000 Ordinary shares |  | 99.99%
Mosta Road, |  | of €2.329373 each |  |
Lija, LJA 9016 |  | fully paid up |  |
The subsidiary is engaged in dealing in immovable property.
Halmann Solar Limited |  | 150,000 Ordinary shares |  | 100%
The Factory, |  | of €1 each |  |
Mosta Road, |  | fully paid up |  |
Lija LJA 9016 |  |  |  |
The subsidiary is engaged in the supply, installation, operation and maintenance of photovoltaic systems in Malta.
Hal Mann (Letting) Ltd |  | 1,000,000 Ordinary shares |  | 100%
Hal Mann, The Factory, |  | of €1 each |  |
Mosta Road, |  | fully paid up |  |
Lija, LJA 9016 |  |  |  |  |  |
The subsidiary is engaged in letting of movable and immovable property.
Hal Mann Vella Limited |  | 2,000,000 Ordinary shares |  | 100%
Hal Mann, The Factory, |  | of €1 each, |  |
Mosta Road, |  | fully paid up |  |
Lija, LJA 9016 |  |  |  |  |  |
The subsidiary is engaged in transportation on land and delivery of all matters relating to the construction industry and retail of terrazzo, marble, granite, tiles, parquet and turnkey projects and related activities.
HMK Limited |  | 1,200 Ordinary shares |  | 100%
The Factory, |  | of €1 each, |  |
Mosta Road, |  | fully paid up |  |
Lija, LJA 9016 |  |  |  |  |  |
The Company is engaged in the importation, supply, selling and/or assembly of prefabricated structures and material relating to prefabricated structures and raised flooring.
CDK Limited |  | 435,000 Ordinary shares |  | 100%
The Factory, |  | of €1 each, |  |
Mosta Road, |  | fully paid up |  |
Lija, LJA 9016 |  |  |  |  |  |
This subsidiary, which was acquired on 24th October 2024, is engaged in manufacture, produce, selling and distributing, development and maintenace of software. The intention of the Group is to liquidate this subsidiary within the forseeable future, realising at least the carrying amount at which the investment is shown in the Statement of Financial Position.
15. Investment in joint ventures
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Cost |  |  |  |  |  |  |  |
As at 1 January |  | 1,665,160 |  | 1,555,183 |  | 15,720 |  | 15,720
Share in profit |  | - |  | 109,996 |  | - |  | -
Share in other comprehensive income |  | - |  | 19 |  | - |  | -
Written off due to liquidation |  | (15,000) |  | - |  | - |  | -
As at 31 December |  | 1,650,160 |  | 1,665,160 |  | 15,720 |  | 15,720
Provision for impairment |  |  |  |  |  |  |  |
As at 1 January |  | 12,413 |  | 11,330 |  | - |  | -
Impairment for the year |  | - |  | 1,083 |  | 15,600 |  | -
As at 31 December |  | 12,413 |  | 12,413 |  | 15,600 |  | -
Net book amount |  |  |  |  |  |  |  |
As at 1 January |  | 1,677,573 |  | 1,566,513 |  | 15,720 |  | 15,720
As at 31 December |  | 1,662,573 |  | 1,677,573 |  | 120 |  | 15,720
As at 31 December 2025, the Company held the following equity interests:
Undertaking / Registered Office |  |  |  | Number, class and |  | Percentage of
|  |  |  |  | nominal value |  | issued shares
|  |  |  |  | of shares held |  | held
|  |  |  |  |  |  |  |  | 2021 (2020)
Hal Mann Holdings Ltd |  | 600 ‘Y’ Ordinary shares |  | 50%
Hal Mann Vellsix Offices 159, |  | of €2.329373 each |  |
St Paul Street, |  | 20% paid up |  |
Mgarr |  |  |  |
The joint venture is engaged in subscribing for, purchase or otherwise acquire and hold shares or other interests in, or securities of any other company. It was also involved in leasing or renting buildings and any other works in the building industry. The joint venture has been non-trading after the demerger of the Group.
HMK International Ltd, |  | 15,000 ‘A’ Ordinary shares |  | 50%
Mosta Road, |  |  |  |  | of €1 each |  |
Lija LJA 9016 |  | fully paid |  |
The joint venture is mainly engaged in the importation, supply, selling and/or assembly of prefabricated structures and material relating to prefabricated structures and supply of raised flooring. The joint venture also trades in building materials and acts as a turnkey contractor. The joint venture is currently undergoing liquidation, and the investment therein has been fully written off.
Zokrija Limited |  | 600 'B' Ordinary shares, |  | 50%
Hal Mann, The Factory, |  | of €1 each, |  |
Mosta Road, |  | fully paid up |  |
Lija LJA 9016 |  |  |  |  |  |
The joint venture has been principally engaged in purchasing and selling, developing and improving land and building for investment purposes or otherwise, and to charge and grant rights and interests of any kind in or over such land or building or any part thereof. As at 31 December 2025, the Group’s investment in the joint venture, Zokrija Limited, has been fully written off.
Undertaking |  |  |  |  | Accounting period
Hal Mann Holdings Ltd |  |  |  | 31 December 2024
HMK International Ltd (in the process of liquidation) |  |  |  | 31 December 2024
Zokrija Limited (impaired) |  |  |  | 31 December 2025

The aggregate capital and reserves as at the end of the under mentioned accounting period and the results for the said period of the Company were as follows:
| Hal Mann Holdings Ltd |  | HMK International Ltd |  | Zokrija Limited |  | Total
| 2025 | 2024 |  | 2025 | 2024 |  | 2025 | 2024 |  | 2025 | 2024
Percentage ownership interest | 50% | 50% |  | 50% | 50% |  | 50.00% | 50.00% |  |  |
Non-current assets | 113,875 | 113,875 |  | 59,900 | 52,400 |  | - | - |  | 173,775 | 166,275
Current asset | 815,171 | 815,171 |  | 569,079 | 569,079 |  | 8,217 | 8,217 |  | 2,499,683 | 2,499,683
Current liabilities | (884,488) | (884,488) |  | (6,806) | (6,806) |  | (33,044) | (33,044) |  | (929,346) | (929,346)
Net Asset (100%) | 44,558 | 44,558 |  | 622,173 | 614,673 |  | (24,827) | (24,827) |  | 1,744,112 | 1,736,612
Group's share on net asset | 22,279 | 22,279 |  | 311,087 | 307,337 |  | (12,414) | (12,414) |  | 872,056 | 868,306
Adjustments | 943,612 | 943,612 |  | (15,510) | 3,240 |  | 12,414 | 12,414 |  | 790,516 | 809,266
Group's carrying amount of the investment | 965,891 | 965,891 |  | 295,577 | 310,577 |  | - | - |  | 1,662,572 | 1,677,572
Net assets include (100%): |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalent | 219,918 | 219,918 |  | - | 8,463 |  | - | 8,217 |  | 377,403 | 394,083
Non-current financial assets | 113,875 | 113,875 |  | - | - |  | - | - |  | 113,875 | 113,875
Revenue and other income | - | - |  | - | 270,575 |  | - | - |  | - | 270,575
Depreciation | - | - |  | - | (110) |  | - | - |  | - | (110)
Other expense | - | - |  | - | (46,742) |  | - | (2,165) |  | - | (48,907)
Profit before tax | - | - |  | - | 223,723 |  | - | (2,165) |  | - | 221,558
Income tax expense | - | - |  | - | (1,567) |  | - | - |  | - | (1,567)
Other comprehensive income (OCI) | - | - |  | - | (39) |  | - | - |  | - | (39)
Total comprehensive income (100%) | - | - |  | - | 222,117 |  | - | (2,165) |  | - | 219,952
Group’s share of profit for the year | - | - |  | - | 111,078 |  | - | (1,083) |  | - | 109,995
Group’s share of OCI | - | - |  | - | (20) |  | - | - |  | - | (20)
Group’s share of profit/(loss) for the year | - | - |  | - | 111,059 |  | - | (1,083) |  | - | 109,976

16. Financial assets and financial liabilities 16.1 Financial assets
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Debt instruments at amortised cost: |  |  |  |  |  |  |  |
Bank term deposit |  | - |  | 91,000 |  | - |  | -
Trade receivables - net of ECL (note 21) |  | 4,557,418 |  | 8,957,002 |  | 72,469 |  | 141,390
Amounts owed by subsidiary undertakings - net of ECL (note 21) |  | - |  | - |  | 8,988,323 |  | 6,499,281
Amounts owed by joint ventures - net of ECL (note 21) |  | 497,091 |  | 17,569 |  | 479,522 |  | -
Amounts owed by other related undertakings - net of ECL (note 21) |  | - |  | 30,725 |  | - |  | -
Loans to subsidiary undertakings - net |  | - |  | - |  | 18,013,569 |  | 12,939,781
Loans to joint ventures - net of ECL |  | 14,966 |  | 15,000 |  | 14,966 |  | 15,000
Total debt instruments at amortised cost |  | 5,069,475 |  | 9,111,296 |  | 27,568,849 |  | 19,595,452
Total financial assets |  | 5,069,475 |  | 9,111,296 |  | 27,568,849 |  | 19,595,452
Total current |  | 5,054,509 |  | 9,096,296 |  | 9,540,314 |  | 6,640,671
Total non-current |  | 14,966 |  | 15,000 |  | 18,028,535 |  | 12,954,781
Current portion of debt instruments at amortised cost include bank term deposit, trade receivables and amounts owed by subsidiary undertakings, joint ventures and other related undertakings which are interest free, unsecured and payable on demand. Loans to subsidiary undertakings classified as debt instruments at amortised cost bear interest of 5.3% per annum, unsecured and have no fixed repayment date. Loans to joint ventures and other related undertakings classified as debt instruments at amortised cost are interest free, unsecured and have no fixed repayment date. No allowance for ECL was recorded on loans to joint ventures. Equity instruments designated at FVOCI consist of investments in shares of a non-listed company, the carrying amounts of which are assessed to be reasonable approximations of their fair values. 16.2 Financial liabilities: Loans and borrowings
|  |  | The Group | The Company
| Interest Rate | Maturity | 2025 | 2024 | 2025 | 2024
Current loans and borrowings |  |  | € | € | € | €
300,000 (€100 face value) secured bonds 2014-2024 | 5% | 2024 | 221,100 | 343,100 | 221,100 | 343,100
Bank overdrafts (note 34) | 2.35%-4.65% | on demand | 2,770,823 | 5,114,253 | 311 | 95,554
Bank loans | 2.50%-5.50% | 2025 | 2,711,369 | 2,537,858 | 799,924 | 600,000
Amounts due to subsidiary undertakings | no interest | on demand | - | - | 6,585,377 | 5,624,423
Amounts due to joint ventures | no interest | on demand | 96,190 | 297,514 | 96,190 | 205,775
Amount due to other related undertakings | no interest | on demand | 156,251 | 208,631 | 156,251 | 206,041
Shareholders' loans | no interest | on demand | 1,673,596 | 1,673,596 | 864,614 | 864,614
Finance lease liability (note 24) | 4.41%-4.89% | 2025 | 97,221 | 21,912 | 39,500 | 39,500
|  |  | 7,726,550 | 10,196,864 | 8,763,267 | 7,979,007
Non-current loans and borrowings |  |  |  |  |  |
230,000 (€100 face value) secured bonds 2024-2034 | 5.35% | 2034 | 23,000,000 | 22,387,294 | 23,000,000 | 22,387,294
Bank loans | 2.50%-5.50% | 2025-2030 | 15,560,750 | 14,885,600 | 3,233,315 | 2,551,680
Shareholders' loan | 5.00% | indefinite | 2,117,816 | 2,117,816 | 2,117,816 | 2,117,816
Loans due to other parties | 5.00% | 2027 | 100,000 | 100,000 | 100,000 | 100,000
Finance lease liability (note 24) | 4.41%-4.89% | 2033-2080 | 7,951,999 | 8,100,126 | 804,190 | 807,728
|  |  | 48,730,565 | 47,590,836 | 29,255,321 | 27,959,518
Other Financial Liabilities at amortised cost, other than loans and borrowings |  |  |  |  |  |
Trade and other payables (note 23) |  |  | 11,987,025 | 17,080,746 | 5,160,181 | 1,723,967
Total current (note 23) |  |  | 11,987,025 | 17,080,746 | 5,160,181 | 1,723,967
Total non-current (note 23) |  |  | - | - | - | -
The Company The amounts owed to subsidiary undertakings and joint ventures are unsecured, interest free and have no fixed repayment date. The shareholders’ loans amounting to €2,117,816 (2024: €2,117,816) and loans from other parties of €100,000 (2024: €100,000) bear interest at 5%, are unsecured and have no fixed repayment date but is not expected to be settled within a year. The rest of the shareholders’ loans amounting to €864,614 (2024: €864,614) are unsecured, interest free and have no fixed repayment date. The secured bonds are measured at the amount of the net proceeds adjusted for the amortisation of the difference between the net proceeds and the redemption value of the bonds, using effective yield method as follows:
|  | 2025 |  | 2024
|  | € |  | €
Face value of the secured bonds |  | 23,000,000 |  | 30,000,000
Unamortised bond issue cost |  | - |  | 612,706
Amortised cost |  | 23,000,000 |  | 22,387,294
By virtue of the prospectus dated 28 June 2024, the Company issued 230,000 secured bonds with a face value of €100 each. The secured bonds are redeemable at par (€100 for each bond) and are due for redemption on 26 July 2034. The bonds are secured by a first-ranking special hypothec over the Company's property, which comprises the Hal Mann factory, and adjacent land and by property owned by a subsidiary company (notes 13 and 17), pursuant to and subject to the terms and conditions in the prospectus. The bond bear interest rate of 5.35% per annum on the nominal value payable annually in arrears every 26th of July. The secured bonds have been admitted on the Official List of the Malta Stock Exchange on 8 August 2024. The quoted market price as at 31 December 2025 for the secured bonds was €100.01, which in the opinion of the Directors fairly represents the fair value of these financial liabilities and which is considered to be a Level 1 valuation within the fair value hierarchy. The Group The bank overdraft and bank loans bear interest ranging between 2.35% to 5.50% per annum (2024: 2.35% to 8.25%). These facilities are secured by a general hypothec over the Group’s present and future assets, special hypothecs and guarantees over the Group’s immovable properties and by joint and several personal guarantees, by pledge over the Group’s receivables and over insurance policies in the name of the subsidiary covering the equipment and product performance and pledges given by the Directors and their spouses. The bank overdrafts are repayable on demand. Information about the contractual terms of the Group's loans including interest are disclosed in note 34. The amounts due to joint venture and other related undertakings are unsecured, interest-free and payable on demand. Shareholders' loans of €2,117,816 (2024: €2,117,816) and loans due to other parties of €100,000 (2024: €100,000) bear interest at 5%, unsecured and have no fixed repayment date but is not expected to be settled within a year. The remaining portion of shareholders' loans of €1,673,596 (2024: €1,673,596) are interest free, unsecured and payable on demand. The interest rate exposures of borrowings are as follows:
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Total borrowings: |  |  |  |  |  |  |  |
At fixed rates |  | 54,309,978 |  | 55,264,859 |  | 30,095,056 |  | 28,694,572
Effective interest rates: |  |  |  |  |  |  |  |
230,000 (€100 face value) secured bonds 2024 – 2034 |  | 5.35% |  | 5.35% |  | 5.35% |  | 5.35%
Other loan (subrogated) and shareholders’ loans |  | 5.00% |  | 5.00% |  | 5.00% |  | 5.00%
Lease liability |  | 4.41%-4.89% |  | 4.41%-4.89% |  | 4.89% |  | 4.89%
This note provides information about the Company and the Group's borrowings. For more information about the Company and the Group's exposure to interest rate and liquidity risk, see note 34. 17. Investment property
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Valuation |  |  |  |  |  |  |  |
As at 1 January |  | 51,778,837 |  | 54,045,991 |  | 37,875,351 |  | 33,496,098
Additions |  | 4,519,759 |  | 5,035,765 |  | 2,681 |  | 3,613,324
Change in fair value |  | - |  | 1,387,784 |  | - |  | 765,929
Disposals |  | (1,675,000) |  | (8,690,703) |  | (1,675,000) |  | -
As at 31 December |  | 54,623,596 |  | 51,778,837 |  | 36,203,032 |  | 37,875,351
Rental income derived from investment properties |  | 2,618,619 |  | 2,565,856 |  | 916,347 |  | 866,531
Fair value Market valuations are performed by independent professional architects every two years or earlier whenever their fair values differ materially from their carrying amounts. In the year when a market valuation is not performed, an assessment of the fair value is performed to reflect market conditions at the year-end date. An independent valuation of the Group's investment property was performed by independent external valuers having an appropriate recognised professional qualifications and experience in the location and category of the property being valued. Last fair value assessment made by an external valuer was made on 31 December 2024 with the next valuation to take place in 2026 according to the Group policy. The fair value movement were credited to profit or loss and subsequently transferred to other reserves under equity. As at 31 December 2025, management also assessed whether there are any significant changes to the significant inputs of the valuation. The investment properties have been categorised to fall within levels 2 and 3 of the fair value hierarchy. The different levels in the fair value hierarchy have been defined in note 34. The Group policy is to recognise transfers into and out of fair value hierarchy levels as of date of the event of change in circumstances that caused the transfer. There were transfers between levels during the year, some reclassifications occured from level 3 to level 2. For all properties, their current use equates to the highest and best use. Reconciliation of fair value:
| Land | Office properties | Commercial buildings | Residential properties | Hotel properties
Cost | € | € | € | € | €
As at 1 January 2024 | 2,468,073 | 6,100,701 | 31,652,836 | 5,390,881 | 8,433,500
Purchases | 215,000 | 263,027 | 3,485,933 | 858,555 | 213,250
Disposals | - | - | - | (2,890,703) | (5,800,000)
Fair value change recognised in profit or loss | 1,360,000 | (697,774) | 91,877 | 87,245 | 3,250
Reclassification | - | - | 543,186 | - | -
As at 31 December 2024 | 4,043,073 | 5,665,954 | 35,773,832 | 3,445,978 | 2,850,000
Purchases | 66,420 |  | 4,444,322 | 9,017 | -
Disposals | - |  | (1,675,000) | - | -
As at 31 December 2025 | 4,109,493 | 5,665,954 | 38,543,154 | 3,454,995 | 2,850,000
Valuation techniques and inputs The valuation was determined primarily by using the market comparison method for residential properties, and the discounted cash flow (DCF) method for commercial properties. Comparison method: Market prices based on database of valuations and of sales of properties in the relevant area. Discounted cash flow (DCF) method: Using the DCF method, fair value is estimated using assumptions regarding the benefits and liabilities of ownership over the asset’s life including an exit or terminal value. This method involves the projection of a series of cash flows on a real property interest. To this projected cash flow series, a market-derived discount rate is applied to establish the present value of the income stream associated with the asset. The exit yield is normally separately determined and differs from the discount rate. The duration of the cash flows and the specific timing of inflows and outflows are determined by events such as rent reviews, lease renewal and related re-letting, redevelopment, or refurbishment. The appropriate duration is typically driven by market behaviour that is a characteristic of the class of real property. Periodic cash flow is typically estimated as gross income less vacancy, non-recoverable expenses, collection losses, lease incentives, maintenance cost, agent and commission costs and other operating and management expenses. The series of periodic net operating income, along with an estimate of the terminal value anticipated at the end of the projection period, is then discounted. Significant increases (decreases) in estimated rental value and rent growth per annum in isolation would result in a significantly higher (lower) fair value of the properties. Significant increases (decreases) in the long-term vacancy rate and discount rate (and exit yield) in isolation would result in a significantly lower (higher) fair value. Generally, a change in the assumption made for the estimated rental value is accompanied by a directionally similar change in the rent growth per annum and discount rate (and exit yield), and an opposite change in the long-term vacancy rate. Description of valuation techniques used and key inputs to valuation of investment properties:
|  | Valuation technique | Significant inputs | Range (weighted average)
|  |  |  |  |  | 2023
Commercial properties |  | DCF |  | Long-term pre-tax rate |  | 2%-2.5%
|  |  |  | Inflation rate |  | 1.9%
|  |  |  | Risk premium |  | 4%-5%
|  |  |  | DCF |  | 6.5%-8.4%
|  |  |  | Gross profit rate |  | 95%-97.5%
Commercial properties |  | DCF |  | Estimated rental value |  | 7%-7.5%
Office properties |  | DCF |  | Estimated rental value |  | 2.42%-7.5%
Hotel |  | DCF |  | Estimated rental value and extrapolated residual land value |  | 7.50%
For the other types of investment properties, the significant inputs used in the fair value measurement are pricing information provided by the independent valuers based on the property size and outlook, location and communal facilities. 18. Goodwill
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
As at 1 January and 31 December |  | 62,888 |  | 62,888 |  | - |  | -
Goodwill arose from acquisition of Mavina Holiday Complex Ltd. 19. Inventories
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Raw materials |  | 1,916,428 |  | 1,125,848 |  | - |  | -
Finished good |  | 2,708,051 |  | 3,203,537 |  | - |  | -
Containers |  | 6,990 |  | 27,092 |  | - |  | -
|  | 4,631,469 |  | 4,356,477 |  | - |  | -
During 2025, €12,545,999 (2024: €11,287,762) was recognised as an expense during the year and included in cost of sales (note 7). 20. Property held-for-sale
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Cost |  |  |  |  |  |  |  |
As at 1 January |  | 5,200,026 |  | 5,333,753 |  | - |  | -
Additions |  | 2,816,113 |  | 1,328,528 |  | - |  | -
Intercompany re-charges |  | (105,817) |  | - |  |  |  |
Disposals (note 7) |  | (3,586,432) |  | (1,462,255) |  | - |  | -
As at 31 December |  | 4,323,890 |  | 5,200,026 |  | - |  | -
In 2025, the Group sold properties for a total consideration of €4,207,820 (2024: €2,011,000) recognised as part of revenue from contracts with customers in the statement of profit or loss and other comprehensive income (note 6). Net profit amounted to €621,388 (2024: €548,745). The carrying amount of the disposed properties amounting to €3,586,432 (2024: €1,462,255) formed part of cost of sales and services in the statement of profit or loss and other comprehensive income (note 7). 21. Trade and other receivables
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Current |  |  |  |  |  |  |  |
Trade receivables |  | 4,934,777 |  | 9,435,100 |  | 73,488 |  | 194,211
Amounts owed by subsidiary undertakings |  | - |  | - |  | 9,105,760 |  | 6,601,521
Amounts owed by joint ventures |  | 497,091 |  | 17,569 |  | 479,522 |  | -
Amounts owed by related undertakings |  | - |  | 30,725 |  | - |  | -
Other receivables |  | 125,497 |  | 594,244 |  | - |  | 270,180
Other advances |  | 5,315,025 |  | 5,316,106 |  | - |  | -
Accrued rental income |  | 605,885 |  | 513,480 |  | 314,371 |  | 311,785
Indirect taxation |  | 271,002 |  | 557,377 |  | - |  | 512,215
Prepayments |  | 719,883 |  | 150,393 |  | 586,687 |  | 31,501
|  | 12,469,160 |  | 16,614,993 |  | 10,559,828 |  | 7,921,413
Allowance for ECL on (note 34): |  |  |  |  |  |  |  |
Trade receivables |  | (377,359) |  | (478,098) |  | (1,019) |  | (52,821)
Amounts owed by subsidiary undertakings |  | - |  | - |  | (117,437) |  | (102,240)
Accrued rental income |  | - |  | (3,553) |  | - |  | (3,553)
|  | (377,359) |  | (481,651) |  | (118,456) |  | (158,614)
Total current trade and other receivables |  | 12,091,801 |  | 16,133,342 |  | 10,441,372 |  | 7,762,799
Trade and other receivables are non-interest bearing and are generally on terms of 30 to 90 days. The amounts owed by subsidiaries, joint ventures, related and other companies are unsecured, interest free and repayable on demand. Other advances include cumulative costs incurred to date arising from construction contracts. The trading terms and conditions related to the related party receivables are referred to in note 36. Set out below is the movement in the allowance for ECL on trade and other receivables:
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
As at 1 January |  | 481,651 |  | 391,473 |  | 158,614 |  | 114,534
Provision for ECL (note 7) |  | (104,292) |  | 90,178 |  | (40,158) |  | 44,080
As at 31 December |  | 377,359 |  | 481,651 |  | 118,456 |  | 158,614
22. Contract assets
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
As at 1 January |  | 2,295,441 |  | 1,714,057 |  | - |  | -
Movement during the year |  | 2,188,907 |  | 651,664 |  | - |  | -
Allowance for ECL |  | (122,828) |  | (70,280) |  | - |  | -
As at 31 December |  | 4,361,520 |  | 2,295,441 |  | - |  | -
Payment for goods and services rendered is not due from the customer until the services are completed and therefore a contract asset is recognised over the period in which the services are performed to represent the Company’s right to consideration for the services performed to date. Under IFRS 15, revenue prior to the date on which it is invoiced to the customer is recognised as a contract asset. Contract assets arise from construction and finishing works. Set out below is the movement in the allowance for ECL on contract assets:
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
As at 1 January |  | 70,280 |  | 24,173 |  | - |  | -
Provision/(reversal) of ECL (note 7) |  | 331,490 |  | 46,107 |  | - |  | -
As at 31 December |  | 401,770 |  | 70,280 |  | - |  | -
23. Trade and other payables
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Current |  |  |  |  |  |  |  |
Amount received in advance |  | 1,699,780 |  | 2,886,045 |  | 15,550 |  | 14,981
Trade payables |  | 4,386,333 |  | 7,422,441 |  | 447,038 |  | 587,166
Amounts due to subsidiary undertakings |  | 1,720 |  | - |  | 3,347,236 |  | -
Amounts due to joint ventures |  | 1,049 |  | - |  | - |  | -
Other payables |  | 366,817 |  | 348,157 |  | - |  | -
Indirect taxes and social security contributions |  | 1,725,674 |  | 2,574,661 |  | 39,950 |  | 676
Accruals |  | 3,801,938 |  | 3,846,192 |  | 1,309,943 |  | 1,121,144
Deferred rental income |  | 3,714 |  | 3,250 |  | 464 |  | -
Total trade and other payables |  | 11,987,025 |  | 17,080,746 |  | 5,160,181 |  | 1,723,967
Trade payables are non-interest bearing and are normally settled between 60 to 90 days. Amount due to joint ventures are unsecured, interest-free and repayable on demand. The Group's exposure to liquidity risk related to trade and other payables is disclosed in note 34. Government grants have been received for the purchase of certain items of property, plant and equipment. There are no unfulfilled conditions or contingencies attached to these grants. Contract liabilities include short-term advances received under construction contracts. These arise when payments from customers are received in advance for on-going and fragmented construction projects. 24. Leases 24.1 The Group as a lessee The Group has lease contracts for industrial buildings, plant, machinery, offices, showroom exhibits, stores and boutique hotel used in its operations. Leases of plant and machinery generally have lease terms between 3 and 15 years. The industrial buildings used in operations have a lease term of 15 and 65 years. The boutique hotel generally has lease terms of 24 years. The Group’s obligations under its leases are secured by the lessor’s title to the leased assets. Generally, the Group is restricted from assigning and subleasing the leased assets and some contracts require the Group to maintain certain financial ratios. There are several lease contracts that include extension and termination options and variable lease payments, which are further discussed below. The Group also had certain leases of machinery with lease terms of 12 months or less and leases of office equipment with low value. The Group applies the ‘short-term lease’ and ‘lease of low-value assets’ recognition exemptions for these leases. Set out below are the carrying amounts of the Group's right-of-use assets recognised and the movements during the period:
|  | Hotel |  | Industrial buildings |  | Offices |  | Total
|  | € |  | € |  | € |  | €
As at 1 January 2024 |  | 2,395,898 |  | 4,811,346 |  | 26,972 |  | 7,234,216
Depreciation expense (note 7) |  | (173,197) |  | (81,215) |  | (10,116) |  | (264,528)
As at 31 December 2024 |  | 2,222,701 |  | 4,730,131 |  | 16,856 |  | 6,969,688
Depreciation expense (note 7) |  | (173,197) |  | (81,215) |  | (10,115) |  | (264,527)
As at 31 December 2025 |  | 2,049,504 |  | 4,648,916 |  | 6,741 |  | 6,705,161
Set out below are the carrying amounts of lease liabilities included under interest-bearing loans and borrowings (note 16) and the movements during the period:
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
As at 1 January |  | 13,230,642 |  | 13,715,245 |  | 842,228 |  | 840,723
Prior year adjustment |  | (5,108,604) |  | (5,492,031) |  | - |  | -
Additions |  | 44,785 |  | - |  | - |  | -
Accretion of interest (note 10) |  | 318,957 |  | 317,001 |  | 40,962 |  | 41,005
Payments |  | (436,560) |  | (418,177) |  | (39,500) |  | (39,500)
As at 31 December |  | 8,049,220 |  | 8,122,038 |  | 843,690 |  | 842,228
Current |  | 97,221 |  | 21,912 |  | 39,500 |  | 39,500
Non-current |  | 7,951,999 |  | 8,100,126 |  | 804,190 |  | 802,728
The maturity analysis of lease liabilities are disclosed in note 34. The following are the amounts recognised in profit or loss:
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Depreciation expense of right-of-use assets |  | 264,527 |  | 264,528 |  | - |  | -
Interest expense on lease liabilities |  | 318,957 |  | 317,001 |  | 40,962 |  | 41,005
Expense relating to short-term leases and leases of low-value assets (included in cost of sales and administrative expenses) (note 7) |  | 35,423 |  | 8,500 |  | 2,452 |  | 2,452
|  | 618,907 |  | 590,029 |  | 43,414 |  | 43,457
The Group had total cash outflows for leases of €436,560 in 2025 (2024: €418,177). During the year the Group did not have non-cash additions to right-of-use assets and lease liabilities (2024: Nil) and non-cash disposal of lease liabilities amounting to Nil (2024: Nil). 24.2 The Group as a lessor The Group has entered into operating leases on its investment property portfolio consisting of certain office and industrial buildings (see note 17). These leases have terms of between five and 20 years. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. The lessee is also required to provide a residual value guarantee on the properties. Rental income recognised by the Group during the year is €2,618,619 (2024: €2,565,856). Future minimum rentals receivable under non-cancellable operating leases as at 31 December are as follows:
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Within one year |  | 2,132,720 |  | 1,950,500 |  | 843,690 |  | 869,253
After one year but not more than five years |  | 3,143,289 |  | 2,894,924 |  | 3,449,541 |  | 4,372,691
More than five years |  | 854,768 |  | 1,042,794 |  | 789,133 |  | 1,553,363
|  | 6,130,777 |  | 5,888,218 |  | 5,082,364 |  | 6,795,307
25. Deferred taxation Deferred tax liability
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
As at 1 January |  | (7,841,789) |  | (6,825,612) |  | (3,117,327) |  | (2,798,785)
Charge in profit or loss |  | 2,820,165 |  | (1,016,177) |  | 133,061 |  | (318,542)
As at 31 December |  | (5,021,624) |  | (7,841,789) |  | (2,984,266) |  | (3,117,327)
The balance represents:
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Tax effect of temporary differences relating to: |  |  |  |  |  |  |  |
Excess of capital allowances over depreciation |  | (53,394) |  | (30,960) |  | - |  | -
Provision for ECL |  | 6,441 |  | 2,263 |  | - |  | -
Other tax temporary differences |  | (4,659,878) |  | (7,429,926) |  | (2,896,241) |  | (3,030,027)
Leases |  | (314,878) |  | (383,251) |  | (88,025) |  | (87,300)
Change in fair value of equity instruments at FVOCI |  | 85 |  | 85 |  | - |  | -
|  | (5,021,624) |  | (7,841,789) |  | (2,984,266) |  | (3,117,327)
Deferred tax asset
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
As at 1 January |  | 2,982,482 |  | 1,889,290 |  | 799,600 |  | 890,292
Charge in profit or loss |  | (586,537) |  | 1,093,192 |  | 11,839 |  | (90,692)
As at 31 December |  | 2,395,945 |  | 2,982,482 |  | 811,439 |  | 799,600
The balance represents:
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Tax effect of temporary differences relating to: |  |  |  |  |  |  |  |
Excess of capital allowances over depreciation |  | (1,879,350) |  | (929,423) |  | 3,117 |  | -
Unabsorbed capital allowances |  | 377,015 |  | 654,067 |  | - |  | -
Unabsorbed capital lossses |  | 378,956 |  | 378,956 |  | 378,956 |  | 378,956
Unutilised tax losses |  | 337,338 |  | 347,808 |  | 134,074 |  | 125,865
Leases |  | 895,925 |  | 837,463 |  | 295,292 |  | 294,779
Investment tax credit |  | 2,286,061 |  | 1,693,611 |  | - |  | -
|  | 2,395,945 |  | 2,982,482 |  | 811,439 |  | 799,600
Deferred income taxes are calculated on all temporary differences under the liability method and are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled based on tax rates (and tax laws) that have been enacted by the end of the reporting period. The principal tax used is 35% (2024: 35%) with the exception of deferred taxation on the fair valuation of non-depreciable property which is computed on the basis applicable to disposals of immovable property that is tax effect of 5% and 8% (2024: 5% and 8%) of the transfer value. The company did not have unrecognised deferred income tax assets that could be carried forward against future taxable income as at 31 December 2025 and 31 December 2024. 26. Share capital
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Authorised: |  |  |  |  |  |  |
5,000,000 Ordinary shares of €1 each | 5,000,000 |  | 5,000,000 |  | 5,000,000 |  | 5,000,000
Issued and fully paid up: |  |  |  |  |  |  |
4,999,820 Ordinary shares of €1 each | 4,999,820 |  | 4,999,820 |  | 4,999,820 |  | 4,999,820
27. Earnings per share Earnings per share is based on the profit for the year attributable to the owners of the Group divided by the weighted average number of ordinary shares in issue during the year.
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Profit for the year attributable to shareholders: |  |  |  |  |  |  |  |
- Basic profit for year attributable to ordinary equity holders of the parent |  | 3,484,341 |  | 2,294,718 |  | 772,564 |  | 538,167
Weighted average number of ordinary shares in issue (note 26) |  | 4,999,820 |  | 4,999,820 |  | 4,999,820 |  | 4,999,820
Earnings per share (cents) |  |  |  |  |  |  |  |
- Basic profit for year attributable to ordinary equity holders of the parent |  | 0.70 |  | 0.46 |  | 0.15 |  | 0.11
There is no difference between the basic and diluted earnings per share as the Group and Company has no potential dilutive ordinary shares. 28. Revaluation reserve on property, plant and equipment
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
As at 1 January |  | 24,392,854 |  | 24,892,585 |  | - |  | -
Revaluation surplus (note 13) |  | - |  | (543,186) |  | - |  | -
Deferred taxation thereon |  | - |  | 43,455 |  | - |  | -
As at 31 December |  | 24,392,854 |  | 24,392,854 |  | - |  | -
The revaluation reserve comprises the revaluation of property, plant and equipment, net of deferred taxation due to change in fair market value. This reserve is not available for distribution. 29. Revaluation reserve on financial assets
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
As at 1 January |  | 1,453 |  | 65,251 |  | - |  | 63,779
Change in fair value |  | - |  | (63,779) |  | - |  | (63,779)
Share in OCI of joint ventures (note 15) | - |  | (19) |  | - |  | -
As at 31 December |  | 1,453 |  | 1,453 |  | - |  | -
The fair value reserve arises from the change in the fair value of financial assets. This reserve is not available for distribution. 30. Revaluation reserve on investment property
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
As at 1 January |  | 4,310,969 |  | 7,673,906 |  | 17,790,559 |  | 17,374,969
Transfer from retained earnings |  | - |  | (3,362,937) |  | - |  | 415,590
As at 31 December |  | 4,310,969 |  | 4,310,969 |  | 17,790,559 |  | 17,790,559
This reserve represents changes in fair value of investment property, net of deferred tax movements, which are unrealised at the reporting date. These amounts are transferred from retained earnings to this reserve since these gains are not considered by the Directors to be available for distribution. Upon disposal of the respective investment property, realised fair value gains are transferred to the retained earnings. The unrealised gain reserve is a non-distributable reserve. 31. Capital redemption reserve
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
As at 1 January and 31 December |  | 47,852 |  | 47,852 |  | - |  | -
This reserve represents tax benefits related to industrial activities. 32. Incentives and benefits reserves
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
As at 1 January and 31 December |  | 604,060 |  | 604,060 |  | - |  | -
The incentives and benefits reserve represents profits set aside for re-investment in terms of Section 6(1) and 36(2) of the Business Promotion Act. Amounts included in this reserve can only be distributed by way of capitalization of profits. 33. Cash and cash equivalents The cash and cash equivalents comprise the following statement of financial position amount:
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Cash at banks and in hand |  | 3,058,985 |  | 8,220,632 |  | 294,344 |  | 428,862
Allowance for ECL |  | (9,012) |  | (10,549) |  | (33) |  | (110)
Bank overdrafts (note 16) |  | (2,770,823) |  | (5,114,253) |  | (311) |  | (95,554)
Transfer to retained earnings |  | - |  | 562,331 |  | - |  | -
As at 31 December |  | 279,150 |  | 3,658,161 |  | 294,000 |  | 333,198
Set out below is the movement in the allowance for ECL on cash in banks:
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
As at 1 January |  | 10,549 |  | 837 |  | 110 |  | -
Provision for ECL (note 7) |  | (1,537) |  | 9,712 |  | (77) |  | 110
As at 31 December |  | 9,012 |  | 10,549 |  | 33 |  | 110
34. Financial risk management objectives and policies The Group's principal financial assets comprise trade and other receivables, contract assets, loans receivable, cash and cash equivalents and equity instruments at FVTOCI. Its principal financial liabilities comprise trade and other payables, borrowings and financial lease liability. The Group is exposed to market risk, credit risk, liquidity risk, fair value risk and capital risk management. The Board of Directors reviews and agrees policies for managing each of these risks which are summarised below. Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise four types of risk: interest rate risk, currency risk, commodity price risk and other price risk. Financial instruments affected by market risk include borrowings. The Group is only exposed to interest rate risk and other market price risk. a. Interest rate risk Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Except as disclosed in note 16, the Group's borrowings are non-interest bearing. Borrowings issued at fixed rates consist primarily of bank loans, 5% secured bonds, shareholders’ loan and other loans which are carried at amortised cost, and therefore do not expose the Group to cash flow and fair value interest rate risk. Exposure to cashflow interest rate risk arises in respect of interest payments relating to bank loans amounting to €758,905 (2024: €631,940) that is subject to interest at floating rates linked to Euribor (note 10). b. Other market price risk - Equity price risk The Group is exposed to equity price risk, which arises from equity securities measured at FVTOCI held in response to needs for liquidity. The management of the Group monitors the proportion of equity securities in its investment portfolio based on market indices. The Group’s Board of Directors reviews and approves all equity investment decisions. At the reporting date, the exposure to unlisted equity investments at fair value was nil (2024: nil), note 16. Credit risk Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables and contract assets) and from its financing activities including deposits with banks and loans to related undertakings. Customer credit risk is managed by the Group's management subject to the Group's established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on each individual's credit limits. Outstanding customer receivables are regularly monitored. An impairment analysis is performed at the reporting date on an individual basis. The Group exercises a prudent credit control policy, and accordingly, it is not subject to any significant exposure or concentration of credit risk. The Group banks only with local financial institutions with high quality standard or rating. The Group's operations are principally carried out in Malta and most of the Group's revenue originates from clients based in Malta.

Set out below is the information about the credit risk exposure on the Group and Company's financial assets and contract assets subject to ECL under IFRS 9.
31 December 2025 | The Group
| Trade receivables (notes 16 and 21) |  | Lease receivables (notes 21 and 24) | Accrued rental income (notes 16 and 21) | Contract assets (note 22) | Amounts owed by related undertakings (notes 16 and 21) | Loans to joint ventures (note 16) | Cash and cash equivalents (note 33) | Total
Approach in measuring ECL | General | Simplified |  | N/A | General | General | General | General | General |
Probability of default | 0.39% - 2.07% | 2.49% - 40% |  | - | 0.39% - 2.07% | 1.19% - 16.85% | 0.19% - 16.15% | 0.03% | 0 - 0 |
Loss given default | 1 | N/A |  | - | 0.75 | 0.75 - 0.80 | 0.75 | 0.75 | 0.45 |
Estimated gross carrying amount at default | 1,350,616 | 587,104 |  |  | (23,486) | 4,484,348 | - | 19,254 | 2,969,453 | 9,387,289
Allowance for ECL | 84,237 | 293,122 |  | - | 4,520 | 118,308 | - | 4,288 | 9,012 | 513,487
Increase/(decrease) in provision for ECL (note 7) | (74,538) | (26,201) |  | - | 967 | 48,028 | 79,540 | 4,288 | (1,537) | 30,547
31 December 2024 |  |  |  |  |  |  |  |  |  |
| The Group
| Trade receivables (notes 16 and 21) |  | Lease receivables (notes 21 and 24) | Accrued rental income (notes 16 and 21) | Contract assets (note 22) | Amounts owed by related undertakings (notes 16 and 21) | Loans to joint ventures (note 16) | Cash and cash equivalents (note 33) | Total
Approach in measuring ECL | General | Simplified |  | N/A | General | General | General | General | General |
Probability of default | 0.36% - 16.15% | 2.49% - 40% |  | - | 0.36% - 16.15% | 1.19% - 16.85% | 0.19% - 16.15% | 0.03% | 1.34% |
Loss given default | 0.75 - 7.75 | N/A |  | - | 0.75 | 0.75 - 0.80 | 0.75 | 0.75 | 0.45 |
Estimated gross carrying amount at default | 1,470,768 | 5,000,765 |  | (95,479) | 513,480 | 2,354,610 | 4,426,880 | 15,000 | 8,735,619 | 22,421,643
Allowance for ECL | 158,775 | 319,323 |  | - | 3,553 | 70,280 | - | - | 10,549 | 562,480
Increase/(decrease) in provision for ECL (note 7) | 24,456 | 86,475 |  | - | (908) | 46,107 | 59,695 | - | 9,712 | 225,537
31 December 2025 | The Company
| Trade receivables (notes 16 and 21) |  | Lease receivables (notes 21 and 24) | Accrued rental income (note 16) | Contract assets (note 22) | Amounts owed by subsidiary and related undertakings (notes 16 and 21) | Loans to joint ventures (notes 16 and 21) | Cash and cash equivalents (note 33) | Total
Approach in measuring ECL | General | N/A |  | N/A | General | N/A | General | General | General |
Probability of default | 0.39% - 2.07% | - |  | - | 0.39% - 2.07% | - | 2.07% - 29.69% | 0.03% | 0.05% |
Loss given default | 0.75 | - |  | - | 0.75 | - | 0.75 | 0.75 | 0.45 |
Estimated gross carrying amount at default | 73,488 | - |  | - | - | - | 25,869,073 | 19,254 | 249,242 | 26,211,057
Allowance for ECL | 1,019 | - |  | - | - | - | 377,729 | 4,288 | 33 | 383,069
Increase/(decrease) in provision for ECL (note 7) | (51,802) | - |  | - | (3,553) | - | 74,599 | 4,288 | (77) | 23,455
31 December 2024 | The Company
| Trade receivables (notes 16 and 21) |  | Lease receivables (notes 21 and 24) | Accrued rental income (note 16) | Contract assets (note 22) | Amounts owed by subsidiary and related undertakings (notes 16 and 21) | Loans to joint ventures (notes 16 and 21) | Cash and cash equivalents (note 33) | Total
Approach in measuring ECL | General | N/A |  | N/A | General | N/A | General | General | General |
Probability of default | 0.36% - 16.15% | - |  | - | 0.36% - 16.15% | - |  | 0.03% | 0.06% |
Loss given default | 0.75 | - |  | - | 0.75 | - | 0.75 | 0.75 | 0.45 |
Estimated gross carrying amount at default | 194,211 | - |  | - | 311,785 | - | 19,742,192 | 15,000 | 428,862 | 20,692,050
Allowance for ECL | 52,821 | - |  | - | 3,553 | - | 303,130 | - | 110 | 359,614
Increase/(decrease) in provision for ECL (note 7) | (3,565) | - |  | - | (908) | - | (256,262) | - | 110 | (260,625)

Liquidity risk The Group is exposed to liquidity risk in relation to meeting future obligations associated with its financial liabilities. Prudent liquidity risk management includes maintaining sufficient cash and committed credit lines to ensure the availability of an adequate amount of funding to meet the Group's obligations. The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments.
Year ended 31 December 2025
|  | The Group
|  | Less than 1 year |  | 1 to 5 years |  | > 5 years |  | Total
|  | € |  | € |  | € |  | €
Bank overdrafts and loans |  | 8,715,507 |  | 12,327,435 |  | - |  | 21,042,942
Finance lease liabilities |  | 207,890 |  | 863,652 |  | 3,058,617 |  | 4,130,159
5.35% secured bonds and interest |  | 1,230,500 |  | 4,922,000 |  | 27,630,392 |  | 33,782,892
Trade and other payables (note 23) |  | 11,987,025 |  | - |  | - |  | 11,987,025
Shareholders' loans (note 16) |  | 1,673,596 |  | - |  | 2,117,816 |  | 3,791,412
Other financial liabilities (note 16) |  | 252,441 |  | - |  | 8,051,999 |  | 8,304,440
|  | 24,066,959 |  | 18,113,087 |  | 40,858,824 |  | 83,038,870
Year ended 31 December 2024
|  | The Group
|  | Less than 1 year |  | 1 to 5 years |  | > 5 years |  | Total
|  | € |  | € |  | € |  | €
Bank overdrafts and loans |  | 10,203,791 |  | 12,333,920 |  | - |  | 22,537,711
Finance lease liabilities |  | 203,750 |  | 830,800 |  | 3,675,814 |  | 4,710,364
5.35% secured bonds and interest |  | 1,230,500 |  | 4,922,000 |  | 28,947,417 |  | 35,099,917
Trade and other payables (note 23) |  | 17,080,746 |  | - |  | - |  | 17,080,746
Shareholders' loans (note 16) |  | 1,673,596 |  | - |  | 2,117,816 |  | 3,791,412
Other financial liabilities (note 16) |  | 506,145 |  | - |  | 8,200,126 |  | 8,706,271
|  | 30,898,528 |  | 18,086,720 |  | 42,941,173 |  | 91,926,421
Year ended 31 December 2025
|  | The Company |
|  | Less than 1 year |  | 1 to 5 years |  | > 5 years |  | Total |
|  | € |  | € |  | € |  | € |
Finance lease liabilities |  | 39,500 |  | 173,800 |  | 1,540,839 |  | 1,754,139 |
5.35% secured bonds and interest |  | 1,230,500 |  | 4,922,000 |  | 27,630,392 |  | 33,782,892 |
Trade and other payables (note 23) |  | 5,160,181 |  | - |  | - |  | 5,160,181 |
Shareholders' loans (note 16) |  | 864,614 |  | - |  | 2,117,816 |  | 2,982,430 |
Other financial liabilities (note 16) |  | - |  | 100,000 |  | 6,837,818 |  | 6,937,818 |
|  | 7,294,795 |  | 5,195,800 |  | 38,126,865 |  | 50,617,460 |
Year ended 31 December 2024 |  |  |  |  |  |  |  |  |
|  | The Company |
|  | Less than 1 year |  | 1 to 5 years |  | > 5 years |  | Total |
|  | € |  | € |  | € |  | € |
Finance lease liabilities |  | 39,500 |  | 173,800 |  | 1,584,289 |  | 1,797,589 |
5.35% secured bonds and interest |  | 1,230,500 |  | 4,922,000 |  | 28,947,417 |  | 35,099,917 |
Trade and other payables (note 23) |  | 1,723,967 |  | - |  | - |  | 1,723,967 |
Shareholders' loans (note 16) |  | 864,614 |  | - |  | 2,117,816 |  | 2,982,430 |
Other financial liabilities (note 16) |  | - |  | 100,000 |  | 6,036,239 |  | 6,136,239 |
|  | 3,858,581 |  | 5,195,800 |  | 38,685,761 |  | 47,740,142 |
Fair value risk As at 31 December 2025 and 2024, the carrying amounts of trade and other receivables, cash and cash equivalents, trade and other payables and current borrowings reflected in the financial statements are reasonable estimates of fair value in view of the nature of these instruments or the relatively short period of time between the origination of the instruments and their expected realisation. The fair values of loans and receivables and non-current borrowings are not materially different from their carrying amounts in the statement of financial position. The Group used the following hierarchy for determining and disclosing the fair value of investment property. Level 1: quoted(unadjusted) prices in active markets for identical assets or liabilities; Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; and Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
Fair value measurement hierarchy: |  |  |  |  |  |  |  |
|  | The Group
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
|  | € |  | € |  | € |  | €
As at 31 December 2025 |  |  |  |  |  |  |  |
Investment property |  | - |  | 18,445,742 |  | 36,177,854 |  | 54,623,596
Property, plant and equipment |  | - |  | 23,565,936 |  | - |  | 23,565,936
|  | - |  | 42,011,678 |  | 36,177,854 |  | 78,189,532
As at 31 December 2024 |  |  |  |  |  |  |  |
Investment property |  | - |  | 20,111,725 |  | 31,667,112 |  | 51,778,837
Property, plant and equipment |  | - |  | 23,565,936 |  | - |  | 23,565,936
|  | - |  | 43,677,661 |  | 31,667,112 |  | 75,344,773
|  | The Company
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
|  | € |  | € |  | € |  | €
As at 31 December 2025 |  |  |  |  |  |  |  |
Investment property |  | - |  | 36,203,032 |  | - |  | 36,203,032
As at 31 December 2024 |  |  |  |  |  |  |  |
Investment property |  |  |  |  |  |  |  |
Equity instrument at FVOCI |  | - |  | 37,875,351 |  | - |  | 37,875,351
|  | - |  | 37,875,351 |  | - |  | 37,875,351
Capital Risk management Capital includes the equity attributable to the ultimate shareholders of the Group. The primary objective of the Group's capital management is to ensure that it maintains healthy capital ratios in order to support its business and maximise shareholder value. The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to the shareholders, return capital to the shareholders or issue new shares. No changes were made in the objectives, policies or processes for managing capital during the years ended 31 December 2025 and 2024.
|  | The Group |  | The Company
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | € |  | € |  | € |  | €
Interest-bearing loans and other borrowings (note 16) |  | 48,407,895 |  | 49,665,662 |  | 25,217,816 |  | 24,605,110
Trade and other payables (note 23) |  | 11,987,025 |  | 17,080,746 |  | 5,160,181 |  | 1,723,967
Finance lease liability (note 24) |  | 8,049,220 |  | 8,122,038 |  | 843,690 |  | 843,733
Less: cash and cash equivalents (note 33) |  | (3,049,973) |  | (8,772,414) |  | (294,311) |  | (428,752)
Net debt |  | 65,394,167 |  | 66,096,032 |  | 30,927,376 |  | 26,744,058
Equity |  | 57,366,329 |  | 53,881,988 |  | 28,314,679 |  | 27,542,115
Net debt to equity ratio |  | 1.1:1 |  | 1.2:1 |  | 1.1:1 |  | 1:1
No changes were made in the objectives, policies or processes for managing capital during the years ended 31 December 2025 and 2024. 35. Supplemental cash flow information Changes in liabilities arising from financing activities
The Group |  |  |  |  |  |  |  |
|  | 1 January 2025 |  | Cash flows |  | Non-cash changes |  | 31 December 2025
|  | € |  | € |  | € |  | €
Bank overdrafts |  | 5,114,253 |  | 551,802 |  | (2,895,232) |  | 2,770,823
Bank loans |  | 17,423,458 |  | 1,346,190 |  | (497,529) |  | 18,272,119
5.35% secured bonds |  | 221,100 |  | - |  | 22,778,900 |  | 23,000,000
Amount due to joint ventures |  | 297,514 |  | (479,522) |  | 278,198 |  | 96,190
Shareholders' loans |  | 3,791,412 |  | - |  | - |  | 3,791,412
Amount due to related undertakings |  | 208,631 |  | - |  | (52,380) |  | 156,251
Other loan |  | 100,000 |  | - |  | - |  | 100,000
Finance lease liability |  | 8,122,038 |  | (72,818) |  | - |  | 8,049,220
Total liabilities from financing activities |  | 35,278,406 |  | 1,345,652 |  | 19,611,957 |  | 56,236,015
|  | 1 January 2024 |  | Cash flows |  | Non-cash changes |  | 31 December 2024
|  | € |  | € |  | € |  | €
Bank overdrafts |  | 2,854,868 |  | 551,802 |  | 1,707,583 |  | 5,114,253
Bank loans |  | 10,332,027 |  | 3,039,204 |  | 4,052,227 |  | 17,423,458
5.35% secured bonds |  | 343,100 |  | - |  | 22,044,194 |  | 22,387,294
Amount due to joint ventures |  | 289,462 |  | (191,004) |  | 199,056 |  | 297,514
Shareholders' loans |  | 3,791,412 |  | - |  | - |  | 3,791,412
Amount due to related companies |  | 432,094 |  | (414,630) |  | 191,167 |  | 208,631
Other loan |  | 100,000 |  | - |  | - |  | 100,000
Finance lease liability |  | 8,223,214 |  | (418,177) |  | 317,001 |  | 8,122,038
Total liabilities from financing activities |  | 26,366,177 |  | 2,567,195 |  | 28,511,228 |  | 57,444,600
Non-cash changes refer to accumulated amortization of bond issue cost and adjustment made for the termination of leases, rent concessions and accretion of interest (see note 24).
The Company |  | 1 January 2025 |  | Cash flows |  | Non-cash changes |  | 31 December 2025
|  | € |  | € |  | € |  | €
5.35% secured bonds |  | 22,387,294 |  | - |  | 612,706 |  | 23,000,000
Other loans |  | 100,000 |  | - |  | - |  | 100,000
Loans from subsidiaries |  | 467,416 |  | 33,973 |  | - |  | 501,389
Loans from joint ventures |  | 1,407,804 |  | - |  | - |  | 1,407,804
Shareholders' loans |  | 2,982,430 |  | - |  | - |  | 2,982,430
Lease liability (as restated through opening retained earnings |  | 842,228 |  | (39,500) |  | 40,698 |  | 843,690
Total liabilities from financing activities |  | 28,187,172 |  | (5,527) |  | 653,404 |  | 28,835,313
|  | 1 January 2024 |  | Cash flows |  | Non-cash changes |  | 31 December 2024
|  | € |  | € |  | € |  | €
5.35% secured bonds |  | 343,100 |  | - |  | 22,044,194 |  | 22,387,294
Other loans |  | 100,000 |  | - |  | - |  | 100,000
Loans from subsidiaries |  | 433,443 |  | 33,973 |  | - |  | 467,416
Loans from joint ventures |  | 1,407,804 |  | - |  | - |  | 1,407,804
Shareholders' loans |  | 2,982,430 |  | - |  | - |  | 2,982,430
Lease liability (as restated through opening retained earnings |  | 840,723 |  | (39,500) |  | 40,698 |  | 842,228
Total liabilities from financing activities |  | 6,107,500 |  | (5,527) |  | 22,084,892 |  | 28,187,172
36. Related party transactions The Company Related party relationships As at the date of statement of financial position the Company had related party transactions with its shareholders, group and related undertakings. Amounts due from/to shareholders, group and related parties are disclosed in notes 16, 21 and 23. The following companies are related by virtue of being controlled by Hal Mann Vella Group p.l.c.
|  |  |  |  |  |  | Percentage of shares held by Hal Mann Vella Group plc
|  |  |  |  |  |  | 2025 |  | 2024 |
Mavina Holiday Complex Ltd |  |  |  |  |  | 99.93% |  | 99.93% |
Sudvel Limited |  |  |  |  |  |  | 100% |  | 100% |
Hal Mann International Limited |  |  |  |  |  | 100% |  | 100% |
Hal Mann Properties Ltd |  |  |  |  |  |  | 99.99% |  | 99.99% |
Hal Mann (Letting) Ltd |  |  |  |  |  |  | 100% |  | 100% |
Hal Mann Vella Limited |  |  |  |  |  |  | 100% |  | 100% |
Halmann Solar Limited |  |  |  |  |  |  | 100% |  | 100% |
HMK Limited |  |  |  |  |  |  | 100% |  | 100% |
CDK Limited |  |  |  |  |  |  | 100% |  | 100% |
The following companies are related by virtue of being jointly controlled by Hal Mann Vella Group p.l.c. |
|  |  |  |  |  |  | Percentage of shares held by Hal Mann Vella Group plc
|  |  |  |  |  |  | 2025 |  | 2024 |
Hal Mann Holdings Ltd |  |  |  |  |  |  | 50% |  | 50% |
HMK International Ltd. |  |  |  |  |  |  | 50% |  | 50% |
Zokrija Limited |  |  |  |  |  |  | 50% |  | 50% |
The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year.
|  | Rental income | Interest income | Amount owed by related parties | Amount owed to related parties
|  | € | € | € | €
Subsidiaries of the Company: |  |  |  |  |
Mavina Holiday Complex Ltd | 2025 | - | - | - | 6,197,526
| 2024 | - | - | - | 735,415
Sudvel Limited | 2025 | - | 422,506 | 9,261,349 | -
| 2024 | - | 222,236 | 6,744,499 | -
Hal Mann | 2025 | 218,295 | 187,960 | 4,139,049 | -
International Limited | 2024 | 202,770 | 476,946 | 4,634,076 | -
Hal Mann Properties | 2025 | 3,308 | 118,801 | 1,524,363 | -
Ltd | 2024 | 3,072 | 104,014 | 477,913 | -
Halmann Solar | 2025 | - | - | - | 387,851
Limited | 2024 | - | - | - | 399,380
Hal Mann (Letting) Ltd | 2025 | - | 211,106 | 4,088,430 | -
| 2024 | - | 177,352 | 3,803,129 | -
Hal Mann Vella | 2025 | 483,412 | 378,299 | 8,364,710 | 3,347,236
Limited | 2024 | 474,986 | 101,354 | 4,060,887 | 4,489,628
CDK Limited | 2025 | - | - | - | -
| 2024 | - | - | 21,688 | -
CDK Limited was acquired and formed part of the group from 24th October 2024.
Zokrija Limited | 2025 | - | - | 15,000 | -
| 2024 | - | - | 15,000 | -
Hal Mann Holdings Ltd | 2025 | - | - | - | -
| 2024 | - | - | - | 70,000
HMK International Limited | 2025 | - | - | - | 109,964
| 2024 | - | - | - | 109,964
|  | Rental income | Interest income | Amount owed by related parties | Amount owed to related parties
|  | € | € | € | €
Other related undertakings |  |  |  |  |
Shareholders' loans | 2025 | - | - | - | 2,982,430
| 2024 | - | - | - | 2,982,430
Terms and conditions of transactions with related parties The rental income and purchases from/to related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured, interest free except for amounts due from subsidiaries which bear interest at 5.3% annually, and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 December 2025, the Company recorded impairment of receivables relating to amounts owed by related parties disclosed in notes 21 and 34, in compliance with IFRS 9. This assessment will be undertaken each financial year through examining the financial position of the related party and the market in which the related party operates together with other historical data on recovery of amounts due. 37. Ultimate controlling parties Hal Mann Vella Group p.l.c., the parent Company, is a public limited company incorporated in Malta. The ultimate controlling party of the company is Halmann Velsud Holdings Limited who has 100% ownership of the issued share capital.