Company Registration Number: C 29506
Annual Financial Report and Financial Statements
31 December 2023
Annual Financial Report and Financial Statements - 31 December 2023
Directors’ report 1 - 4
Corporate Governance - Statement of Compliance 5 - 14
Statement of financial position 15
Statement of comprehensive income 16
Statement of changes in equity 17
Statement of cash flows 18
Notes to the financial statements 19 - 33
Independent auditor’s report
Annual Financial Report and Financial Statements - 31 December 2023
Directors’ report
The directors present their report and the audited financial statements for the financial year ended 31
December 2023.
Principal activity
The company’s principal activity, which is unchanged since last year, is to carry on the business of a finance
and investment company in connection with the ownership, development, operation and financing of the
business activities of the companies forming part of the Mizzi Organisation.
Review of the business
By virtue of the Prospectus dated 24 September 2021, the company issued for subscription to the general
public 450,000 bonds with a nominal value of €100 per bond issued at par, for a total amount of
€45,000,000. The bonds are subject to a fixed interest rate of 3.65% per annum, payable annually in
arrears on 15 October of each year. The proceeds from the bond issue amounting to €44,100,000 (net of
bond issue costs) were advanced to the parent company, Mizzi Organisation Limited. This loan is subject
to a fixed interest rate of 4.3% per annum paid annually and the principle amount repayable by not later
than 15 days before the redemption date of the bonds. The resulting finance income for the year amounted
to €1,913,304 (2022: 1,909,267).
Consequently after accounting for interest costs, during the year under review the company earned a net
interest income of €199,912 (2022: 198,214). After deducting administration costs and taxation, net profit
for the year amounted to €43,205 (2022: €38,133).
Financial risk management
The company’s activities expose it to a variety of financial risks, mainly credit risk and liquidity risk. Refer
to Note 2 to these financial statements.
Performance of the Mizzi Organisation for 2023 and outlook for 2024
Consolidated Holdings Limited, GSD Marketing Limited, Mizzi Organisation Limited and The General Soft
Drinks Company Limited are the guarantors for the bond, which together with their subsidiary undertakings
and Mizzi EV Limited constitute the Mizzi Organisation.
Performance during financial year 2023
The guarantors for the bond recorded an improved result versus 2022, with revenues increasing by 24% to
222 million (2022: €179 million), yielding a gross profit of60.8 million (2022: €50.6 million) translating to
an operating profit of €14 million in 2023 (2022: €9.8 million), before considering gains from changes in fair
value of property and impairment charges. In 2023, the Group also recognised gains from changes in the
fair value of investment property amounting to 341k (2022: €6 million). Impairment charge on property,
plant and equipment of a particular operation of the Mizzi Organisation in 2023 amounted to 2 million
(2022: Nil).
Net finance costs increased at €5.9 million (2022: €4.3 million), similarly to investment income and share
of profits of associates, which in aggregate amounted to €1.8 million (2022: €918k).
This resulted in a profit before tax of €8.2 million against a profit of €12.4 million in 2022.
The Group incurred a tax charge including deferred taxation of 2.4 million (2022: €1.1 million) giving a
combined profit for the year for the issuer and its guarantors of5.8 million versus a profit of €11.3 million
in 2022.
Annual Financial Report and Financial Statements - 31 December 2023
Directors’ report - continued
Outlook for financial year ending 2024
Financial performance in 2024
In 2024, Mizzi Organisation is expecting to consolidate further the results obtained by the automotive
division in 2023. In 2024, the automotive sector will continue working on the site known as the ’Hofra’ in
Blata l-Bajda. This is a long-term project that will be partly financed by the proceeds from the bond issue.
Following the refurbishment projects carried out on the Arkadia Commercial Centre and the Portomaso
food store in 2022 and 2023 respectively, as well as the opening of a new food store in Naxxar in 2023,
results in the retail and fashion sectors are expected to improve in 2024.
The engineering division aligns itself to the real estate projects on the island which seem to be at a stable
position. Management is satisfied with the order book which can only grow gradually due to the shortage
of skilled labour this sector is facing.
The Group’s real estate sector kept its positive trends. Following the uptake of two further floors at the new
office block in St Julian’s in 2023, an additional floor was leased out early in 2024, while it is envisaged that
at least a further floor will be rented out during the rest of the year. Management is expected to finalise the
sale of the site of the former GSD factory in Qormi by the end of 2024, following an extension to the promise
of sale signed in 2022, due to delays in the relevant permits being issued.
The projections of the beverage division for 2024 are that business will continue growing further in line with
positive economic indicators and the continued recovery of inbound tourism.
Likewise, business on the books of the hospitality division also indicates that there is a healthy level of
appetite for tourists to visit Malta, which augurs well for the year.
Management teams across the Mizzi Organisation remain cautious vis-à-vis the inflation experienced over
the past 24 month and its affect on the people’s spending power. Interest rates are at their highest levels
in a number of years and are expected to remain at similar levels in 2024.
The Boards of Directors of Mizzi Organisation Finance p.l.c. and its guarantors are very comfortable with
the state and performance of each company forming part of the Group. The refinancing exercises made in
prior years have given the Group a fixed exposure when it comes to borrowing costs. This has created a
hedge which will last for the next five years, thus overcoming the threats of a rising interest rate scenario,
which is currently being experienced both locally and overseas. Mizzi Organisation has over the years
adopted highest levels of corporate governance and financial discipline which adds a layer of comfort on
the Group’s servicing obligations. Over the years, Mizzi Organisation Limited (a related party) has taken a
treasury role within the Group which helps control and monitor the Group’s overall loan exposure. During
the pandemic, the directors adopted an approach of carrying out only essential capital expenditure and
even though the pandemic is over, the Board kept on exercising these cautious principles. The directors
consider the Organisation and all Mizzi Organisation companies to be a going concern. Hence the going
concern assumption in the preparation of these financial statements is considered appropriate and there
are no material uncertainties which may cast significant doubt about the ability of the Organisation and its
companies to continue operating as a going concern.
Results and dividends
The financial results of the company are set out in the statement of comprehensive income. The directors
do not recommend the payment of dividend. The directors propose that the balance of retained earnings
amounting to €61,892 (2022: €18,687) to be carried forward to the next financial year.
Annual Financial Report and Financial Statements - 31 December 2023
Directors’ report - continued
The directors of the company who held office during the year were:
Mr Carmel J. Farrugia
Mr Joseph M. Galea
Mr Brian R. Mizzi
Mr Kenneth C. Mizzi
Mr Maurice F. Mizzi
Prof. Andrew Muscat (appointed on 30 June 2023)
Mr Kevin J. Rapinett
The company’s Articles of Association do not require any directors to retire. The directors will be eligible
for re-appointment on the lapse of the period for which they were appointed in accordance with the
company’s Articles of Association.
Statement of directors’ responsibilities for 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 company as at the end of each reporting period and of
the profit or loss for that period.
In preparing the 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 appropriate accounting policies;
making accounting estimates that are reasonable in the circumstances;
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 the
directors determine is 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 (Cap. 386).
They are also responsible for safeguarding the assets of the company and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
The financial statements of Mizzi Organisation Finance p.l.c. for the year ended 31 December 2023 are
included in the Annual Financial Report 2023, which is made available on the Mizzi Organisation’s website.
The directors are responsible for the maintenance and integrity of the Annual Financial Report on the
website in view of their responsibility for the controls over, and the security of, the website. Access to
information published on the Organisation’s website is available in other countries and jurisdictions, where
legislation governing the preparation and dissemination of financial statements may differ from
requirements or practice in Malta.
The directors confirm that, to the best of their knowledge:
the financial statements give a true and fair view of the financial position of the company as at 31
December 2023, and of its financial performance and its cash flows for the year then ended, in
accordance with International Financial Reporting Standards as adopted by the EU; and
the DirectorsReport includes a fair review of the development and performance of the business and
the position of the company, together with a description of the principal risks and uncertainties that the
company faces.
Annual Financial Report and Financial Statements - 31 December 2023
Directors’ report - continued
Going concern basis
After making due enquiries, the directors have a reasonable expectation, at the time of approving the
financial statements, that the company has adequate resources to continue in operational existence for the
foreseeable future. For this reason, the directors continue to adopt the going concern basis in preparing
the financial statements.
The Directors’ report has been signed on behalf of the Board of Directors on 29 April 2024 by Mr Brian R.
Mizzi (Director) and Mr Kenneth C. Mizzi (Director) as per the Directors' Declaration on ESEF Annual
Financial Report submitted in conjunction with the Annual Financial Report.
Registered office:
Mizzi Organisation Corporate Office
Testaferrata Street
Ta’ Xbiex
Telephone number:
+356 2596 9000
Company secretary:
Dr Malcolm Falzon
Annual Financial Report and Financial Statements - 31 December 2023
Corporate Governance - Statement of Compliance
1. Introduction
Pursuant to the Capital Markets Rules issued by the Malta Financial Services Authority (the Rules), Mizzi
Organisation Finance 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 and on the effective
measures it has taken to ensure compliance throughout the accounting period with the requirements of the
principles set out in the Code which were applicable during the financial year ended 31 December 2023.
The Company acknowledges that the Code does not dictate or prescribe mandatory rules, but recommends
principles of good practice. However, the directors strongly believe that such practices are in the best
interests of the Company, its shareholders, and other stakeholders, primarily because compliance with
principles of good corporate governance is expected by investors of the Company’s securities admitted to
the Official List of the Malta Stock Exchange and also because it evidences the directors' and the
Company's commitment to a high standard of corporate governance.
The directors report that since the Company has only issued debt securities and has not issued equity
securities which are traded in a multilateral trading facility, it is exempt from disclosing the information
prescribed in Rules 5.97.1, 5.97.2, 5.97.3, 5.97.6 and 5.97.8 in this corporate governance statement (the
Statement”) but may do so on a best efforts basis. The Statement is to be construed accordingly.
2. General
The primary responsibility for good corporate governance lies with the Company’s board of directors (the
Board”), which is responsible for the overall determination of the Company’s policies and business
strategies. The Company’s principal activity is to act as a finance company of the Mizzi Organisation
conglomerate of companies (the Mizzi Organisation”). It does not carry out any trading activities of its
own and its sole purpose is that of raising funds in the capital markets for the purposes of on-lending to
companies forming part of the Mizzi Organisation. The core business activities of the Mizzi Organisation
comprise the following sectors: (i) automotive; (ii) beverage; (iii) food and fashion retail; (iv) hospitality,
tourism, and leisure; (v) real estate; and (vi) mechanical and engineering contracting.
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
Company, whilst retaining an element of flexibility essential to allow the Company to react promptly and
efficiently to circumstances arising in respect of its business, taking into account its size and the economic
conditions in which it operates. The directors are of the view that it has employed structures which are most
suitable and complementary for the size, nature and operations of the Company. Accordingly, in general
the directors believe that the company has adopted appropriate structures to achieve an adequate level of
good corporate governance, together with an adequate system of control in line with the company’s
The Board shall keep the principles of the Code under review and shall monitor any developments in the
Company’s business to evaluate the need to introduce new corporate governance structures or
mechanisms, as and when the need arises.
This Statement will now set out the structures and processes in place within the Company and how these
effectively achieve the goals set out in the Code for the financial period under review. For this purpose, this
Statement will make reference to the pertinent principles of the Code and then set out the manners in which
the directors believe that such principles have been adhered to. Where the Company has not complied with
any of the principles of the Code, this Statement will provide an explanation for the non-compliance.
Annual Financial Report and Financial Statements - 31 December 2023
Corporate Governance - Statement of Compliance - continued
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 provisions.
3. Compliance with the Code
Principles One to Five
Principles One to Five of the Code deal fundamentally with the role of the Board and of the directors. The
Directors believe that for the current financial year the Company has generally complied with the
requirements for each of these principles.
Principle One: The Board
The Board is composed of members who are fit and proper to direct the business of the Company with
honesty, integrity, and competence. The Board consists of a mix of executive and non-executive directors
that enables the Board, and particularly the non-executive directors, to have direct information about the
Company's performance and business activities.
Throughout the period under review, the Directors have provided the necessary leadership in the overall
direction of the Company and are fully aware of, and conversant with, the statutory and regulatory
requirements connected to the business of the Company. The Directors hereby report that they have
consistently attended meetings of the Board, have kept themselves updated with statutory and regulatory
requirements and the business of the Company and have performed the responsibilities delegated to them
to ensure the smooth running and better management of the Company.
Principle Two: Chairman and Chief Executive Officer
As at the end of the period under review, the Board has not appointed a Chief Executive Officer (CEO).
Accordingly, the Directors report that Code provision 2.1 is not applicable to the Company.
Andrew Manduca resigned as Chairman of the Board on the 30 of June 2023, whilst Prof. Andrew Muscat
was appointed as Chairman on the same day. The function of the Chairman is to lead the Board and to set
its agenda The Chairman is also responsible to: (i) ensure that the Board receives precise, timely and
objective information in order for the directors to take sound decisions and effectively monitor the
performance of the Company; (ii) ensure that there is effective communication with stakeholders and, (iii)
encourage active engagement by all directors for the discussion of complex and, or contentious issues.
The Board considers the present Chairman to be fit and proper to occupy the role.
The directors believe that the function of the Chairman has been performed in compliance with Code
provision 2.2.
Principle Three: Composition of the Board
The composition of the Board is in line with the requirements of Principle Three of the Code. The Board is
composed of executive and independent non-executive directors. During the period under review, the Board
was chaired by Andrew Manduca and Prof. Andrew Muscat. Both representatives satisfy the independence
criteria required by the Code.
The Board is composed of six directors, three of whom are independent directors in accordance with the
Capital Markets Rules.
The members of the Board for the year under review were Mr Maurice F. Mizzi, Mr Kenneth C. Mizzi, Mr
Brian R. Mizzi (executive directors), and Mr Carmel J. Farrugia, Mr Joseph M. Galea and Mr Kevin Rapinett
(independent non-executive directors).
Annual Financial Report and Financial Statements - 31 December 2023
Corporate Governance - Statement of Compliance - continued
In this respect, the Directors consider that the Company is headed by an effective Board and its members
provide a proficient mix able to add value to the Company. Apart from being conducive to good corporate
governance, this structure provides the added benefits of direct control and management of the Company’s
affairs, together with an effective centralisation of the decision-making process.
Independence of Non-Executive Directors
In line with principle 3 (iii) of the Code, at least one third of the Board consists of non-executive directors.
The non-executive directors play an important role in overseeing executive directors and management,
ensuring a system of checks and balances and contributing to the strategic direction of the Company in an
objective manner. For the purposes of Code Provision 3.2, with respect to three independent non-executive
directors, Mr Carmel J. Farrugia, Mr Joseph M. Galea and Mr Kevin Rapinett, it is hereby reported that
none of them:
a) are or have been employed in any capacity by the Company;
b) have or have had, over the past three years, a significant business relationship with the Company;
c) have received or receives significant additional remuneration from the Company in addition to their
director’s fee;
d) have close family ties with any of the Company’s executive directors or senior employees;
e) have served on the Board for more than twelve consecutive years;
f) have been within the last three years an engagement partner or a member of the audit team or past
external auditor of the Company; and
In compliance with Code Provision 3.4, each of the Directors hereby declares that he undertakes to:
a) 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
independence; and
c) clearly express his opposition in the event that he finds that a decision of the Board may harm the
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 of the Company is entrusted with the overall direction, administration and management of the
Company and meets on a regular basis to discuss and take decisions on matters concerning the strategy,
operational performance, and financial performance of the Company.
Role and Responsibilities of the Board
In fulfilling its mandate, the Board assumes responsibility to:
(a) establish appropriate corporate governance standards;
(b) review, evaluate and approve, on a regular basis, long-term plans for the Company;
(c) review, evaluate and approve the Company’s budgets and forecasts;
(d) review, evaluate and approve major resource allocations and capital investments;
(e) review the financial and operating results of the Company;
(f) ensure appropriate policies and procedures are in place to manage risks and internal control;
(g) review, evaluate and approve the overall corporate organisation structure, the assignment of
management responsibilities and plans for senior management;
(h) review, evaluate and approve compensation to senior management; and
(i) review periodically the Company’s objectives and policies relating to social, health and safety and
environmental responsibilities.