MIDI p l c : Financial Statements for 2023

MIDI p.l.c.

Annual Report and Consolidated

Financial Statements

31 December 2023

Company Registration Number: C 15836

MIDI p.l.c.

Annual Report and Consolidated Financial Statements - 31 December 2023

Directors' report

The Directors present their annual report and the audited Financial Statements for the year ended 31 December 2023.

Principal activity

The MIDI Group (the "Group") comprises MIDI p.l.c. ("MIDI" or the "Company") and two subsidiaries, Tigné Contracting Limited and T14 Investments Limited. The Company also holds a 50% share in Mid Knight Holdings Limited through its subsidiary T14 Investments Limited.

The principal activity of the Group and the Company is the development of the Manoel Island and the Tigné Point Project.

Amalgamation and merger of Solutions & Infrastructure Services Limited into MIDI p.l.c.

During 2023, the directors of the Company and Solutions & Infrastructure Services Limited ("SIS"), the former fully owned subsidiary, resolved to amalgamate and merge the assets of the former subsidiary into the Company. The merger has been accounted for using the predecessor method of accounting. More information is disclosed in Note 37.

Review of the business

The Group has registered a loss of €1.52 million for the financial year ended 31 December 2023 (2022: loss of €2.28 million).

The performance for the financial year ended 31 December 2023 was impacted by two main factors. Firstly, and primarily, these results reflect the cyclical nature of the Company's property development business. Although MIDI has successfully launched the apartments of its latest residential development at Tigné Point (known as Q3 - Fortress Gardens) in terms of the Company's accounting policies the sale of these residential units will only be recognised once the final deeds of sale are entered into with the respective buyers. In addition, MIDI had no other inventory of residential apartments which it could deliver in 2023. Revenues generated from the sale of property during 2023 amounted to €888k (2022: €229k). Given that the Group's financial results are very dependent on the contribution generated from the sale of property, the lack of revenues generated from this sector invariably impacts negatively on the Group's overall financial performance.

Secondly, the Group has carried out its annual review of the carrying amounts of its investment property and inventory portfolio. Having taken into consideration developments that have taken place over the past twelve months, the Board of Directors has concluded that it would be prudent to write down the carrying amount of inventory by €1.1 million to reflect what it believes to be its estimated recoverable amount. This impairment on the value of inventory has impacted the operating loss on the development and sale of property segment, and accordingly following such charge, the Group is accounting for, an operating loss of €1.67 million (2022: operating loss of €1.13 million) for this segment.

Revenues of the property rental and management segment during 2023 remained in line with those of 2022 (2023: €3.18 million versus 2022: €3.19 million). This segment includes the Group's rental operations of its Pjazza retail outlets and foreshore restaurants, car parking operations, operator concession fees earned from the Manoel Island Yacht Marina and the operating activities which were previously undertaken by SIS and which have now been amalgamated within the Company's operations.

The Group's consolidated and Parent company's financial statements include a net tax income of €538k which principally arises in view of recognition of tax losses upon the amalgamation of the former subsidiary which are expected to be utilised by the Group in the short term.

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MIDI p.l.c.

Annual Report and Consolidated Financial Statements - 31 December 2023

Directors' report - continued

Review of the business - continued

Total assets have increased from €231.85 million as at 31 December 2022 to €254.74 million as at 31 December 2023 while the Net Asset Value has decreased from €101.27 million as at 31 December 2022 to €99.32 million as at 31 December 2023, thus reflecting the loss being registered for the 2023 financial year. Hence the Net Asset Value per share as at year end amounts to €0.464 compared to €0.472 as at 31 December 2022.

The Group's financial results also include its 50% share of the financial results of Mid Knight Holdings Limited ("MKH"), a jointly controlled entity accounted for on the basis of the equity method of accounting. The Group's share of MKH's profits for 2023 amounted to €1.56 million which are less than the €1.98 million registered in 2022. During 2023 MKH sold one floor to a third party for a total value of €13.6 million. This sale has had minimal impact on the overall profits registered by MKH during the financial year ended 31 December 2023, since the attributable profit was recognised as an increase in fair value within the profit or loss when MKH had fair valued 'The Centre' during the financial year ended 31 December 2017.

In January 2023, the Company launched the Q3 - Fortress Gardens apartment block. The market's response has been very positive with more than 70% of the apartments now subject to a promise of sale agreement.

Development works on the Q3 - Fortress Gardens apartment block had commenced in the second quarter of 2022. The civil works are now complete with finishing and mechanical, electrical and plumbing ("MEP") works and the façade works progressing as scheduled. Delivery of these apartments is envisaged for the second half of 2025. As previously explained, at delivery stage, the Company will be able to account for the profits generated from the sale of these apartments.

The development of Manoel Island continues to play a prominent part in the Group's activities. Discussions with Government are ongoing with regards to the specific remedies available in the Deed of Emphyteusis entered into on 15 June 2000 which will help to mitigate, in part, the impact of the reduction of development volumes as a consequence of the discovery of archaeological remains on the Manoel Island site as well as to the extension to the substantial completion date detailed in the Deed for the entire development. The discovery of such remains necessitated a revision to the Manoel Island masterplan which resulted in a reduction of development volumes from 127,000sqm to 95,000sqm.

Following the signing of a non-binding memorandum of understanding with AC Enterprises Limited (C49755) in December 2021 the Company has continued with negotiations and discussions with the party in question with a view to concluding the establishment of a joint venture with regards to the Manoel Island development. Although significant progress has been registered no transaction has been concluded yet.

As previously announced, the Planning Authority ("PA") has approved the Outline Permit for the revised Manoel Island Masterplan on 16 September 2021. This had followed the approval of the Environmental Impact Assessment ("EIA") by the Environmental and Resources Authority ("ERA"). Although the Outline Permit was not subject to appeal, the decision by ERA to approve the EIA was appealed by a third party. On the 10 January 2023, the Environment and Planning Review Tribunal advised that the third party's appeal had been rejected. Following this, the Court of Appeal also rejected the third party's appeal on 10 May 2023. As a result of this decision, the Outline Development Permit is now definitively confirmed and not subject to further appeal.

In parallel to the ongoing separate discussions with Government and AC Enterprises Limited, the detailed design process has continued in earnest and the full development application for the Manoel Island development PA1053/23 was submitted to the PA in December 2022.

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MIDI p.l.c.

Annual Report and Consolidated Financial Statements - 31 December 2023

Directors' report - continued

Review of the business - continued

At the public hearing meeting of 14 March 2024 the Planning Board deferred the hearing of this full development application on the basis that Manoel Island lies within the proposed buffer zone for the Valletta World Heritage Site ("WHS") and it was deemed desirable that a Heritage Impact Assessment ("HIA") is commissioned on the basis of terms of reference subsequently issued by the Superintendence of Cultural Heritage ("SCH").

The Group is confident that the proposed development of Manoel Island does not impact the status of the Valletta WHS as the SCH, after having consulted the National World Heritage Technical Committee ("NWHTC"), had not objected to this full development application as part of the consultation process undertaken by the Planning Authority. A decision on this application is expected during the second half of 2024 post completion and submission of the HIA. In the meantime, site preparatory works are ongoing on the Manoel Island site under the supervision of an archaeological monitor. The Company remains confident that the full development permit will be secured.

The Group is confident that the deferral of the hearing referred to above and the consequential potential delays will not affect the investment plans of the prospective investor as outlined in the memorandum of understanding referred to previously.

Furthermore, the Group continues to be engaged in discussions with the Government in connection with the implications that delays and other developments which are outside the control of the same Group have on the timing and realization of the project, and on the basis of such discussions remains confident that an outcome which will enable the successful completion of the project will be achieved.

The Group is cognisant of the fact that the returns of its main projects i.e. that of the Q3 - Fortress Gardens residential development and the Manoel Island development, are not expected to accrue in the short term. In view of this, the Group continues to adopt a prudent approach in its projected cashflow assessments. Based on these assessments, the Group has sufficient liquidity and financial resources to meet all its obligations and expected outflows after considering arrangements with its bankers in respect of sanctioned bank facilities. Furthermore, on the basis of such assessment, the Board of Directors will be recommending the distribution of a dividend during the forthcoming annual general meeting.

Capital Markets Rule 5.64

Structure of Capital

The Company has an authorised share capital of ninety million euro (€90,000,000) divided into four hundred and fifty million (450,000,000) Ordinary shares having a nominal value of €0.20 each.

The Company's issued share capital is forty-two million eight hundred and thirty-one thousand nine hundred eight four euro (€42,831,984) divided into two hundred and fourteen million one hundred fifty-nine thousand nine hundred and twenty-two (214,159,922) Ordinary shares of €0.20 each fully paid up and forming part of one class of Ordinary Shares.

Any increase in the issued share capital of the Company shall be decided upon by an Ordinary Resolution of the Company: provided that, notwithstanding the foregoing, the Company may by Ordinary Resolution authorise the Directors to issue shares up to the amount specified as the authorised share capital of the Company, which authorisation shall be for a maximum period of five years and is renewable for further periods of five years each.

Since there are currently no different classes of ordinary shares in the Company, all Ordinary Shares have the same rights, voting rights and entitlements in connection with any distribution whether of dividends or capital (on a winding up or otherwise). There are no shares in issue that have any preferred or deferred rights.

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MIDI p.l.c.

Annual Report and Consolidated Financial Statements - 31 December 2023

Directors' report - continued

Capital Markets Rule 5.64 - continued

Structure of Capital- continued

Every Ordinary Share carries the right to participate in any distribution of dividend declared by the Company pari passu with all other Ordinary Shares. Each Ordinary Share shall be entitled to one vote at meetings of Shareholders. Every Ordinary Share carries the right for the holders thereof to participate in any distribution of capital made whether on a winding up or otherwise, pari passu with all other Ordinary Shares. The Ordinary Shares are freely transferable and pursuant to admission to the Official List of the Malta Stock Exchange, the shares are transferable in accordance with the rules and regulations of the Malta Stock Exchange as applicable from time to time.

Subject to the provisions of the Companies Act (Chapter 386 of the Laws of Malta) (the "Companies Act"), the Company may purchase its own shares.

Appointment and Removal of Directors

Article 98 of the Company's Memorandum and Articles of Association states that at each Annual General Meeting of the Company all the Directors shall retire from office. A Director retiring from office shall retain office until the dissolution of such Meeting and a retiring director shall be eligible for re-election or re- appointment.

The Directors of the Company shall be elected as provided in Article 102 of the Company's Memorandum and Articles of Association that is a maximum of eight (8) directors shall be elected at each Annual General Meeting (or at an Extraordinary General Meeting convened for the purpose of electing directors). Voting shall take place on the basis that every member shall have one (1) vote in respect of each ordinary share held by him. A member may use all his votes in favour of one candidate or may split his votes in any manner he chooses amongst any two or more candidates. The Chairman of the Meeting shall declare elected those candidates who obtain the greater number of votes on that basis.

The Directors of the Company may appoint two (2) additional directors to the Board of the Company without the requirement that the appointment of such director or directors be ratified by a members' resolution taken at a General Meeting of the Company. A director so appointed by the Board of the Company shall hold office until the end of the Annual General Meeting following his appointment. The director so appointed may be withdrawn or replaced by the Board at any time.

Powers of Directors

The Directors are empowered to act on behalf of the Company and in this respect have the authority to enter into contracts, sue and be sued in representation of the Company. The business of the Company shall be managed by the Directors, who may exercise all such powers of the Company as are not, by the Companies Act or by the Articles of Association, required to be exercised by the Company in General Meeting, subject, nevertheless, to the provisions of the Articles of Association and of the Companies Act and to such directions, being not inconsistent with any provisions of the Articles of Association and of the Companies Act, as may be given by the Company in General Meeting: provided that no direction given by the Company in General Meeting shall invalidate any prior act of the Directors which would have been valid if such direction had not been given. The general powers conferred upon the Directors by Article 87 of the Articles of Association shall not be deemed to be abridged or restricted by any specific power conferred upon the Directors by any other Article.

Subject to the provisions of the Articles of Association, the Board of Directors may exercise all the powers of the Company to borrow money and to hypothecate or charge its undertaking, property and uncalled capital or any part thereof, and to issue debentures and other securities, whether outright or as security for any debt, liability or obligation of the Company or of any third party.

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MIDI p.l.c.

Annual Report and Consolidated Financial Statements - 31 December 2023

Directors' report - continued

Capital Markets Rule 5.64 - continued

Voting Rights in respect of Ordinary Shares

As outlined previously, each ordinary share shall be entitled to one vote. Subject to any rights or restrictions for the time being attached to any class or classes of shares, on a show of hands every member present in person shall have one (1) vote, and on a poll every member present in person or by proxy shall have one

(1) vote for each share of which he is the holder.

On a poll votes may be given personally or by proxy and a member entitled to more than one vote need not, if he votes, use all his votes or cast all the votes he uses in the same way. No member shall be entitled, in respect of any share in the capital of the Company held by him, to be present or to vote on any question, either in person or by proxy, at any General Meeting, or upon any poll, or to be reckoned in a quorum, or to exercise any other right or privilege conferred by membership in relation to meetings of the Company if any call or other sum presently payable by him to the Company in respect of such share remains unpaid.

No member shall be entitled, in respect of any share in the capital of the Company held by him, to be present or to vote on any question, either in person or by proxy, at any General Meeting, or upon any poll, or to be reckoned in a quorum, or to exercise any other right or privilege conferred by membership in relation to meetings of the Company if any call or other sum presently payable by him to the Company in respect of such share remains unpaid.

Restrictions on Ordinary Shares

During such time as any part of the call or installment together with interests and expenses remains unpaid, the entitlement of the person from whom the sum is due to the rights and advantages conferred by membership of the Company including the right to receive dividends and the right to attend and vote at meetings of the Company, shall be suspended. A person becoming entitled to a share by reason of the death or bankruptcy of the holder shall, upon supplying to the Company such evidence as the Directors may reasonably require to show his title to the share, be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not, before being registered as a member in respect of the share, be entitled in respect of it to exercise any right conferred by membership in relation to Meetings of the Company.

Provided always that the Directors may at any time give notice requiring any such person to elect either be registered himself or to transfer the share, and if the notice is not complied with within ninety (90) days, the Directors may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the share until the requirements of the notice have been complied with.

Transfer of Ordinary Shares

Subject to the provisions of law and of the Company's Articles of Association, the shares of the Company are freely transferable provided that in no case may a part of a share constitute the object of a transfer.

All transfers of shares in the Company, which are listed on the Malta Stock Exchange, shall be regulated by law and accordingly Articles 34 to 36 of the Company's Articles of Association shall be applicable to such transfers only in so far as the said Articles are not inconsistent therewith.

General Meetings

The Company shall in each year hold a General Meeting as its Annual General Meeting in addition to any other meetings in that year, and not more than fifteen (15) months shall elapse between the date of one Annual General Meeting of the Company and that of the next. Furthermore, Article 182(1) of the Companies Act, sets out a period of seven (7) months from the end of the accounting period, within which period, a public Company is to call a general meeting for the approval of the annual accounts for the applicable accounting period.

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MIDI p.l.c.

Annual Report and Consolidated Financial Statements - 31 December 2023

Directors' report - continued

Capital Markets Rule 5.64 - continued

General Meetings- continued

All General Meetings other than Annual General Meetings shall be called Extraordinary General Meetings. The Directors may, whenever they think fit, convene an Extraordinary General Meeting, and Extraordinary General Meetings shall also be convened on such requisition, or, in default, may be convened by such requisitions as provided by the Act. If at any time there are not in Malta sufficient directors capable of acting to form a quorum, the Directors in Malta capable of acting, or if there are no directors capable and willing so to act, any two (2) members 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.

A General Meeting of the Company shall be called by not less than twenty-one (21) 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 is given, and shall specify the place, the day and the hour of meeting, the proposed agenda for the Meeting and, in case of special business, the general nature of the business to be considered as well as other information which is specified in Article 56(2) of the Company's Articles of Association.

Subject to such restrictions for the time being, affecting the right to receive notice to the holders of any class of shares, notice of every General Meeting shall be given in any manner hereinbefore authorised to: - (a) every member except those members who have not supplied to the Company an address for the giving of notices to them; and (b) the Auditor for the time being of the Company; and (c) the Directors for the time being of the Company. No other person shall be entitled to receive notices of General Meetings.

A notice calling an Annual General Meeting shall specify the meeting as such and a notice convening a meeting to pass an Extraordinary Resolution shall specify the intention to propose the resolution as such and the principal purpose thereof. A notice of a General Meeting called to consider extraordinary business shall be accompanied by a statement regarding the effect and scope of any proposed resolution in respect of such extraordinary business.

In every notice calling a meeting, there shall appear with reasonable prominence a statement that a member entitled to attend and vote is entitled to appoint one or more proxies to attend and vote instead of him and that a proxy need not also be a member and such statement shall comply with the provisions of the Act as to informing members of their right to appoint proxies.

Any member or members holding not less than five per cent (5%) in nominal value of all the shares entitled to vote at the meeting may: (a) request the Company to include items on the agenda of the General Meeting, provided that each item is accompanied by a justification or a draft resolution to be adopted at the Annual General Meeting; and (b) table draft resolutions for items included in the agenda of a general meeting.

The request to put items on the agenda of the General Meeting or the tabling of draft resolutions to be adopted at the General Meeting shall be submitted to the Company (in hard copy or in electronic form to an email address provided by the Company for the purpose) at least forty-six (46) days before the date set for the General Meeting to which it relates and shall be authenticated by the person or persons making it. Furthermore, where the right to request items to be put on the agenda of the General Meeting or to table draft resolutions to be adopted at the General Meeting requires a modification of the agenda for the General Meeting that has already been communicated to Shareholders, there shall be made available a revised agenda in the same manner as the previous agenda in advance of the applicable record date or, if no such record date applies, sufficiently in advance of the date of the General Meeting so as to enable other Shareholders to appoint a proxy, or where applicable, to vote by correspondence.

The accidental omission to give notice of a meeting or (in cases where instruments of proxy are sent out with the notice) the accidental omission to send such instrument of proxy to, or the non-receipt of notice of a meeting or such instrument of proxy by, any person entitled to receive notice shall not invalidate the proceedings at that meeting.

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MIDI p.l.c.

Annual Report and Consolidated Financial Statements - 31 December 2023

Directors' report - continued

Capital Markets Rule 5.64 - continued

General Meetings- continued

An "Ordinary Resolution" means a resolution taken at a General Meeting of the Company passed by a member or members having the right to attend and vote at such meeting holding in the aggregate more than fifty per cent (50%) in nominal value of the shares represented and entitled to vote at the meeting. An "Extraordinary Resolution" means a resolution taken at a General Meeting of the Company of which notice specifying the intention to propose the text of the resolution as an extraordinary resolution and the principal purpose thereof has been duly given and passed by a number of members having the right to attend and vote at such meeting holding in the aggregate not less than seventy-five per cent (75%) in nominal value of the shares represented and entitled to vote at the meeting and at least fifty-one per cent (51%) in nominal value of all the shares entitled to vote at the meeting. Provided that, if one of the aforesaid majorities is obtained, but not both, another meeting shall be convened within thirty (30) days in accordance with the provisions for the calling of meetings to take a fresh vote on the proposed resolution. At the second meeting the resolution may be passed by a member or members having the right to attend and vote at the meeting holding in the aggregate not less than seventy-five per cent (75%) in nominal value of the shares represented and entitled to vote at the meeting. However, if more than half in nominal value of all the shares having the right to vote at the meeting is represented at that meeting, a simple majority in nominal value of such shares so represented shall suffice.

Changes to the Company's Memorandum and Articles of Association

The Company may by extraordinary resolution approved by the shareholders in general meeting alter or add to its Memorandum and Articles of Association.

Other matters

The Company has nothing to report in relation to the requirements of Capital Markets Rules 5.64.4, 5.64.5, 5.64.6, 5.64.7 and 5.64.10, since these do not apply to the Company. Information relating to the requirements of Capital Markets Rule 5.64.11 is reflected in the Remuneration Report and Statement on pages 27 to 33.

Information pursuant to Capital Markets Rule 5.70.1

In 2019, the Company entered into a contract with Polidano Brothers Limited in connection with site clearance and demolition works at Manoel Island. Polidano Brothers Limited was awarded the contract following a tender process. Mr. Gordon Polidano, the General Manager of Polidano Brothers Limited was appointed to the Board of the Company on the 17 June 2021 and resigned from the Board of the Company on the 19 June 2023. Works in relation to this contract have now concluded.

Directors' interests in Share Capital of the Company as at 19 April 2024

Dr. Alec A. Mizzi has a beneficial interest in 37,206,701 (2023: 37,206,701) ordinary shares issued by the Company which are held by Alf. Mizzi & Sons Ltd.

In addition, Dr. Alec A. Mizzi, through Alf. Mizzi & Sons Ltd., has a beneficial interest in 2,012,050 (2023: 2,012,050) ordinary shares in the Company which are held by First Gemini p.l.c..

Mr. Joseph A. Gasan has a beneficial interest in 23,741,461 (2023: 23,741,461) ordinary shares in the Company held by Gasan Enterprises Limited.

Mr. Joseph Bonello has a direct interest in 2,405,321 (2023: 2,405,321) ordinary shares in the Company

held in his own name. Mr. Bonello also has a further 288,889 (2023: 288,889) ordinary shares in the Company which are held on his behalf by Finco Treasury Management Limited.

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MIDI p.l.c.

Annual Report and Consolidated Financial Statements - 31 December 2023

Directors' report - continued

Registered Shareholders with 5% or more of the share capital of the Company

Results and dividends

The consolidated income statement is set out on page 38. The Board of Directors resolved to recommend for the approval of the forthcoming annual general meeting the payment of a net final dividend of €1,927,439, equivalent to €0.009 per share.

Directors

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

All the Directors shall retire from office at the Annual General Meeting of the Company in accordance with articles 98, 99 and 102(3) of the Company's Articles of Association and those eligible can be re-elected or re-appointed.

Senior Management, Company Secretary and Internal Audit

As at 31 December 2023, the senior management of the Group was composed as follows:

The Company's Board of Directors engaged the services of EY Malta to provide internal audit related services to the Company.

Directors' statement of responsibilities in relation to the Financial Statements

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

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