M&Z p.l.c.
(Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements
31 December 2023
M&Z p.l.c. (Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements - 31 December 2023
General information
Directors’ report
Statement by the Directors on compliance by M&Z p.l.c. (the “Company”) with
the Code of principles for Good Corporate Governance
Remuneration Report
Statement of financial position
Statement of comprehensive income
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
M&Z p.l.c. (Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements - 31 December 2023
1
General information
Directors:
Mr. Paul S. Camilleri
Mr. Thomas Agius Vadala
Ms. Greta Camilleri Avallone
Mrs. Erika Pace Bonello
Ms. Emma Pullicino
Mr. Charles J. Farrugia
Mr. Matthew A. Camilleri
Mr. Kevin Rapinett
Mrs. Frances Fenech
Company Secretary:
Ganado Services Limited (C 10785)
171, Old Bakery Street,
Valletta VLT 1455, Malta.
Registered Office:
MMGH Complex,
Industrial Estate,
Marsa MRS 3000
Malta
Company Registration Number:
C 23061
Auditors:
PricewaterhouseCoopers
78, Mill Street
Zone 5, Central Business District
Qormi
Malta
Legal Counsel:
Ganado Advocates
171, Old Bakery Street,
Valletta VLT 1455, Malta.
M&Z p.l.c. (Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements - 31 December 2023
2
Directors’ report
The Directors present their report and the audited financial statements for the year ended 31 December
2023.
Principal activities
M&Z p.l.c is a market-leading Company dealing in importation and distribution of a vast array of renowned
fast-moving consumer goods (‘FMCG’). The M&Z portfolio is comprised of over 100 brands, spread across
10 product categories as follows: ambient, chilled, frozen, fresh, ice-cream, baby and kids, home and
personal care, wines and spirits, pet care and confectionary segments.
Review of the business
During 2023, the sector in which M&Z p.l.c operates has continued to encourage consolidation in the supply
chain and this trend is expected to continue in the months to come. Financial year 2023 has been a year
where the Company has continued to take the necessary steps to diversify its business risk and strengthen
its market presence. During 2023, the Company has further diversified its revenue stream through the
addition of pet care distribution to its portfolio of clients. The Company will remain focused on scaling the
current brand portfolio whilst also being prepared for new opportunities.
Financial position
Trading performance
Company turnover for the year ending 31 December 2023 amounted to €31,317,687 (2022: €28,399,658)
representing growth of 10.3%. The increase in turnover is mainly attributable to the Company’s organic
growth initiatives.
Inflation and cost of living pressures together with increased competition have continued to dominate our
sector in 2023, and we expect these challenges to remain present in the coming months. Moreover, given
that our portfolio is highly dominated by UK heritage brands, the Company has continued to face the ongoing
cost of Brexit where most of our products are subject to tariff charges. Due to market pressures it may not
be possible to pass on all cost increases to the consumer. We will continue in our efforts both with our
suppliers and with the authorities to hopefully begin to minimise the effect that Brexit has had on our costs.
Administrative expenses for 2023 amounted to €3,736,488 (2022: €3,316,672), an increase of
approximately 13% when compared to last year. This is mainly coming from an increase in the loss
allowance in relation to trade receivables attributed to the challenges the FMCG market is presently facing
in Malta. Market saturation, the introduction of heavy discounters in the industry, high operating costs
together with evolving consumer preferences have intensified the financial strain on the sector. In response,
we have applied a percentage uplift to the loss allowance that underscores our commitment to managing
credit risk aligned with our assessment of the financial stability of operations in the face of industry
challenges. These characteristics coupled with higher turnover, resulted in an increase of 9.7% in total
operating expenses for the year ending 31 December 2023 which amounted to €28,457,644. This increase
is predominantly coming from higher costs of purchases. The Company will continue working towards
growing its revenue organically with an efficient cost base to achieve consistent and sustainable growth.
After taking into consideration administrative costs, the Company registered an EBITDA of €3,855,824
(2022: €3,404,234), a 13.3% growth compared to last year.
Net finance costs amounted to €360,067 (2022: 257,061) which represents an increase of 40% when
compared to 2022. The increase is due to higher bank interest and charges during 2023 as a result of
higher interest rates.
M&Z p.l.c. (Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements - 31 December 2023
3
Directors’ report - continued
Despite the challenges faced, the Company’s profit before tax for the year amounted to €2,500,404 (2022:
€2,205,523) an increase of 13.4% over the prior year. Profit after tax increased by approximately 26% to
€1,765,292 (2022: €1,395,723) and earnings per share amounted to €0.04 (2022: €0.03).
Cash flows
Cash flow from operating activities for the full year 2023 amounted to €1,819,779 (2022:495,822), out of
which €635,684 (2022: €1,124,897) was used to pay income tax.
Cash flow from investing activities amounted to -€330,777 (2022: -€1,848,421) pertaining to the continuous
investment in capital expenditure. The higher amount in 2022 is attributable to the acquisition in 2022.
Cash flow from financing activities during 2023 amounted to -€1,993,083 (2022: €1,188,556), which
consisted primarily of dividends paid to shareholders, payments on lease liabilities and movement in the
trade factoring facility.
Equity
Equity increased to €9,650,889 as per 31 December 2023, from €9,168,934 on 31 December 2022 as a
result of the retained profits for the year 2023 netted off with the dividends distributed to shareholders.
Balance Sheet
The Company’s total asset base stands at €19,440,563 (2022: 19,021,077). The non-current assets
comprise intangible assets amounting to €1,297,129 (2022: €1,519,256), which have decreased with
amortisation for the year, right-of-use assets of €1,535,668 (2022: €1,815,008), which have decreased with
amortisation for the year and property, plant and equipment of €923,873 (2022: €1,178,882) which have
decreased with depreciation for the year. At 31 December 2023, the Company’s current assets amounted
to €15,157,868 (2022: €14,287,363) which primarily include trade and other receivables of €8,935,233
(2022: €8,564,980), which have increased in line with the Company’s operations and inventories of
€5,415,965 (2022: €4,688,328) which increased due to a strategic decision by the Company to optimise
procurement pricing management in line with our principles. As at year end, non-current liabilities which
include lease liabilities amounted to €1,367,829 (2022: €1,663,277). The Company’s current liabilities
amounted to €8,421,845 (2022: €8,188,866) which mainly consist of borrowings of €4,635,401 (2022:
€4,643,521), including the new factoring facility, and trade and other payables of €3,167,208 (2022:
€3,262,356).
Risks and uncertainties
Trade credit exposure risk
The Company is exposed to trade credit risk in relation to the non-payment and non-performance of its
customers resulting from the favorable payment terms provided by the Company. Any future financial
market disruptions or tightening of the credit markets could result in some of the Company’s customers
experiencing a significant decline in profits and/or reduced liquidity. A significant adverse change in the
financial position of a customer could require the Company to assume greater credit risk relating to that
customer and could limit the Company’s ability to collect receivables.
M&Z p.l.c. (Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements - 31 December 2023
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Directors’ report - continued
Labour market conditions
The Company is also concerned and is flagging the prevalent, tight labour market conditions that are
weighing on the sector, particularly since the shortage of human resources is especially acute in distribution
to the extent that it is experiencing significant wage inflation and difficulty in servicing demand within regular
time frames.
Hard discounters
As in recent years, this year has seen an increase in foreign and local hard discounters that import and sell
their own products and that are vying for market share with the Company’s retail client base. As a result of
the diversified product offerings and permanently lower-priced products, improved shopping experience,
and the increasingly price-sensitive shopper, the Company expects that the presence of hard discounters
will continue to challenge the sale of the Company’s branded products.
The impact of Brexit
The impact of Brexit continues to cast a significant shadow over our operations, persistently introducing
uncertainty across regulatory frameworks, trade dynamics, and market conditions. This has triggered a
heightened demand for accurate and timely documentation from our suppliers, leading to increased
administrative efforts and subsequent rises in operational costs. Furthermore, the imposition of duty tariffs
on certain products has further compounded our cost pressures. It is important to acknowledge the potential
risks posed by Brexit-induced uncertainty, particularly in terms of price stability. The fluctuating market
conditions driven by Brexit can pose challenges in managing prices effectively, impacting our revenue
streams and profitability.
Tourism
Notwithstanding the recent increase in inbound tourism, the current international geo-political climate may
still affect inbound tourism. This, in turn may have a bearing on the demand for some of the Company’s
product categories, such as ice-creams, wines and spirits.
Further information on the Company’s financial risk management is set out in note 4.4 to the financial
statements.
Sustainability Reporting
In 2023 the Company established an Environmental, Social and Governance (ESG) Steering Committee
made up of Managing Director, Chief Financial Officer and Chief Operating Officer who with support from
sustainability experts and industry leaders are responsible for setting strategic direction and goals related
to environmental, social, and governance issues for the Company. They will also oversee the
implementation of ESG initiatives, monitor progress, and report to the board of directors on a regular basis.
The Audit Committee provides oversight and guidance to the ESG Steering Committee, ensuring that ESG
initiatives are aligned with the Company's overall goals and objectives. By working together, these
committees will help to ensure that the Company remains compliant with all relevant regulations and
standards, while also making best use of the positive impact of its ESG efforts.
M&Z p.l.c. (Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements - 31 December 2023
5
Directors’ report - continued
Outlook for 2024
Looking ahead to the current financial year, despite the prevailing uncertainties, we are projecting a
moderate increase in revenues, driven by strategic market positioning and continued innovation across our
product offering. The Company will continue working hard to enhance cost efficiencies through rigorous
cost-saving initiatives.
M&Z p.l.c. remains focused on driving operational efficiency, enhancing customer satisfaction, and
maximising shareholder value. The Directors expect to continue to pursue a policy of recommending a
strong dividend distribution.
Results and dividends
Results for the year are stated in the Statement of Comprehensive Income. The Directors are
recommending the payment of a final net dividend of €873,840 equivalent to €0.01986 per share. This is
over and above the interim net dividend of €396,000 equivalent to €0.009 per share paid to shareholders in
August 2023. The total dividend amount paid for the year will amount to €1,269,840 or €0.02886 per share
which represents a net dividend yield of 4.01% on the issue price of €0.72 when the shares were listed on
the Malta Stock Exchange in March of 2022.
The Directors have also confirmed the payment of a gross dividend of €45,000 on preference shares for
the year ended 31 December 2023.
Going Concern Basis
After making enquiries the Directors, at the time of approving the financial statements, have determined
that there is reasonable expectation that the Company has adequate resources to continue operating for
the foreseeable future. For this reason, the Directors have adopted the going concern basis in preparing
the financial statements.
Information pursuant to Capital Markets Rule 5.70.1
In terms of Capital Markets Rule 5.70.1 the Company states that on 1 March 2022, after following all
pertinent procedures, it entered into a lease agreement with Mr Thomas Agius Vadala (an executive
director of the Company) and Mr John Agius Vadalafor a commercial store in the Central Business District,
Mriehel (the “Lease Agreement”). The Lease Agreement was entered into for a period of five years at a cost
of €24,000 (plus VAT) per annum and was deemed to be in the best commercial interests of the Company.
The Lease Agreement shall terminate on 28 February 2027 or at any earlier date where the Company gives
written notice of its intention to terminate said lease.
M&Z p.l.c. (Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements - 31 December 2023
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Directors’ report - continued
Additional Information pursuant to Capital Markets Rule 5.64
Details of the company’s share capital are disclosed in note 6 to the financial statements. The Company’s
authorised share capital is €50,000,000, divided into 360,000,000 Ordinary Shares of €0.125 each and
5,000,000 Preference Shares of €1 each. The Company’s issued share capital is €7,000,0000 divided into
44,000,000 Ordinary Shares of €0.125 each and 1,500,000 Preference Shares of €1 each. All shares in the
Company rank pari passu in all respects (save as otherwise provided in the Memorandum and Articles of
Association). The rights attached to the Preference Shares are identical to those attached to the Ordinary
Shares, except for the following:
i.
Voting Rights: the holders of Preference Shares shall not have a vote at general meetings except
on a resolution convened for the purpose of: a) reducing the capital of the Company; or b) winding
up of the Company; or c) a proposal to be submitted to the meeting that directly affects their rights
and privileges; or d) a proposal affecting the dividend on Preference Shares when the dividend on
their Shares is in arrears for more than 6 months
ii.
Dividends: Preference Shares are entitled to a fixed cumulative preferred dividend distribution of
three percent (3%) of its nominal value per annum. The Shares are entitled to receive dividends
when, as and if declared by the Board out of the assets lawfully available for such a purpose. No
dividend shall be paid to the Ordinary Shares in any given year, unless the preferred dividend for
that year and any cumulative preferred dividend from previous years would have been paid to the
holders of the Preference Shares.
iii.
Rights upon liquidation, dissolution or winding-up: each Preference Share shall, on a winding up of
the Company, carry the right to receive the return of the paid-up nominal value of such share
together with any accrued but unpaid cumulative preferred dividends in priority to any amounts of
capital paid to the holders of other classes of shares, but shall not carry any other right to participate
in any surplus assets of the Company following the payment of such amount.
iv.
Redemption Rights Subject to the provisions of the applicable law of Malta, the Board shall have
the right to redeem the Preference Shares, at any time by giving not less than one (1) month notice
of the intention to redeem said shares. The Preference Shares may be redeemed by not later than
31 December 2030 and should any such shares not be redeemed within the same time frame, the
unredeemed shares shall thereafter not be redeemable. The amount payable on the redemption
shall be the nominal value of the Preference Shares being redeemed, together with any accrued
but unpaid cumulative preferred dividends.
The only registered shareholders holding 5% or more of the equity share capital as at 31 December 2023
are as follows:
Shareholder
M&Z Group Limited (C 9208)
Bank Of Valletta plc (C 2833) obo Wealth
Management Discretionary Customers
Rizzo Farrugia & Co (stk) Ltd obo Clients
Additional information in terms of Para 3(e)(ii) of the Sixth Schedule of the Companies Act
Information on the Company’s exposure to credit risk, liquidity risk and cash flow risk is contained in Note
4 of the Financial Statements for the financial year ended 31 December 2023.
M&Z p.l.c. (Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements - 31 December 2023
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Directors’ report - continued
Directors & Company Secretary
The Directors of the Company who held office during the year were:
Mr. Matthew A. Camilleri
Mr. Paul S. Camilleri
Mrs. Erika Pace Bonello
Mr. Thomas Agius Vadala
Ms. Greta Camilleri Avallone
Mr. Charles J. Farrugia
Dr. Emma Pullicino
Mr. Kevin Rapinett
Mrs. Frances Fenech
The Company’s Articles of Association do not require any Directors to retire.
Ganado Services Limited (C 10785) of 171, Old Bakery Street, Valletta VLT 1455, Malta acts as Company
Secretary.
Information on the rules governing the appointment and replacement of Directors is contained in Section A
of the Statement by the Directors on compliance by the Company with the Code of principles for Good
Corporate Governance, whilst information on the amendments of the Memorandum and Articles of
Association and the Powers of Directors is contained in Section E of the Statement by the Directors on
compliance by the Company with the Code of principles for Good Corporate Governance.
M&Z p.l.c. (Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements - 31 December 2023
8
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 (‘IFRSs’) as adopted by the EU;
selecting and applying 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 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 M&Z p.l.c. for the year ended 31 December 2023 are included in the Annual
Report 2023 which is published on the Company’s website (www.mz.com.mt) and available in hard copy
printed form upon request. 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 Capital Markets Rule 5.68
We confirm that to the best of our knowledge:
the financial statements, prepared in accordance with the applicable accounting standards, give a
true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
The Directors’ report includes a fair review of the performance of the business and the position of the
Company, together with a description of the principal risks and uncertainties that it faces.
Auditors
PricewaterhouseCoopers have indicated their willingness to continue in office and a resolution for their re-
appointment will be proposed at the Annual General Meeting.
M&Z p.l.c. (Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements - 31 December 2023
9
Statement by the Directors on the Financial Statements and Other Information included in the
Annual Financial Report
The Directors declare that to the best of their knowledge, the financial statements included in the Annual
Financial Report are prepared in accordance with the requirements of International Financial Reporting
Standards as adopted by the EU and give a true and fair view of the assets, liabilities, financial position and
profit or loss of the Company and that this report includes a fair review of the development and performance
of the business and position of the Company, together with a description of the principal risks and
uncertainties that it faces.
Signed on behalf of the Board of Directors on 25 April 2024 by Charles J. Farrugia (Chairman) and Paul S.
Camilleri (Director) as per the Directors' Declaration on ESEF Annual Financial Report submitted in
conjunction with the Annual Financial Report.
Registered Office:
MMGH Complex,
Industrial Estate,
Marsa MRS 3000
Malta
25 April 2024
M&Z p.l.c. (Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements - 31 December 2023
10
Statement by the Directors on compliance by M&Z p.l.c. (the “Company”) with the
Code of principles for Good Corporate Governance
The Company acknowledges that the Code of Principles of Good Corporate Governance contained in
Appendix 5.1 to Chapter 5 of the Capital Markets Rules (the ‘Code’) does not prescribe mandatory rules
but recommends principles of good practice for the Board of Directors (each a “Director” and collectively
the “Board”) and the Company’s management to pursue in the best interests of the Company and its
shareholders. The Board believes that compliance with the Code and the governance arrangements
proposed thereby is not only expected by stakeholders but evidences the Boards’ and the Company’s
commitment to a high standard of good governance. The Company endorses the Code and is hereby
reporting its compliance with the provisions thereof.
The Board restates its full support of the Corporate Governance Code and undertakes to fully comply with
the Code to the extent that this is considered complementary to its size, nature and operations. As at the
date of this statement, the Board considers the Company to be in compliance with the Corporate
Governance Code, save for three exceptions as explained in Section B below. The Company is hereby
reporting on the extent of its adoption of and compliance with the Code for the period covering financial
year ended 31 December 2023.
A. Compliance with the Corporate Governance Code
Principle 1 – The Board
In terms of Article 116 of the Company’s Memorandum and Articles of Association (“M&As”) administration
and management of the Company shall be vested in the Board. The Board is responsible for devising the
Company’s values, standards and strategy, setting policies and the management of the Company as well
as reviewing internal control procedures, financial performance and the business risks facing the Company.
The Board is composed of individuals who are fit and proper to direct the business of the company with
honesty, competence and integrity and individuals who are diverse in their experience, knowledge, skills
and values, resulting in an optimum Board set-up. Moreover, the Directors have been made fully aware of
statutory and regulatory requirements connected to the business of the Company. The Directors attend the
majority of Board meetings and are provided with the relative information in advance of said meetings in
order to permit them to allocate sufficient time to the performance of their responsibilities.
The Board delegates specific responsibilities to the Audit Committee and the Executive Committee
(collectively theCommittees”), the former operates under its own formal terms of reference approved by
the Board. Further detail on said Committees and the responsibilities of the Board is contained in the below
subsections of this statement entitled “Principle 4” and “Principle 5”.
Appointment and Removal of Directors
The right to appoint a Director to the Board is reserved to the shareholders of the Company, save for where
an appointment is made to fill a vacancy on the Board, where the Director may be appointed by the Board
in terms of Article 130 such Director would then hold office until the next annual general meeting. Any one
or more shareholder holding (individually or in the aggregate) shares carrying the voting rights equal to
11.11% of the total number of shares carrying the right to attend and vote at a general meeting, shall for
every 11.11% so held be entitled to appoint one Director in the Company. The procedures for the election
of Directors shall be established by the Company in general meeting from time to time. The removal of
Directors is governed by Article 133 of the Articles of Association.
M&Z p.l.c. (Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements - 31 December 2023
11
Statement by the Directors on compliance by M&Z p.l.c. (the “Company”) with the
Code of principles for Good Corporate Governance - continued
A. Compliance with the Corporate Governance Code - continued
Principle 2 Chairman and Chief Executive
The clear division of responsibilities at the head of the Company between the running of the Board and the
executive responsibility for the running of the Company’s business is evident in the fact that the Company
has both a Chairman of the Board (Mr. Charles Farrugia) and a Managing Director (Mrs. Greta Camilleri
Avallone). This separation of roles serves to avoid concentration of authority and power in a single individual
and moreover differentiates the leadership on matters of the Board from leadership on matters relating to
the operations of the business of the Company.
The responsibilities of both the Chairman of the Board and the Managing Director are clearly established
and approved by the Board. The responsibilities of the Chairman of the Board reflect those set out in Code
Provision 2.2, while the Managing Director heads the Executive Committee which is responsible for
management decisions in relation to business of the Company.
Principle 3 Composition of the Board
The Board believes that it fully complies with the requirements of Principle 3 and the relative Code
Provisions. The Company is managed by a Board of nine (9) Directors who are responsible for the overall
direction, management and strategy of the Company.
Pursuant to generally accepted practices, as well as the M&As, the appointment of Directors to the Board
is reserved exclusively to the Company’s shareholders, except in so far as an appointment is made to fill a
vacancy on the Board.
The Board is currently composed of the following persons:
Mr Charles Farrugia - Independent Non-Executive Director & Chairman
Mr Kevin J. Rapinett - Independent Non-Executive Director
Mr Matthew Camilleri - Non-Executive Director
Ms Greta Camilleri Avallone - Managing Director
Mr Paul Camilleri - Executive Director
Mr Thomas Agius Vadala’ - Executive Director
Mrs Erika Pace Bonello - Executive Director
Mrs Frances Fenech - Executive Director
Dr Emma Pullicino - Executive Director
The Board comprises a mix of individuals with a diverse array of skills and experience which is appropriate
for the requirements of the business. The Board deems that in its current composition, currently comprising
a third of the Board being non-executive directors, has the required diversity of knowledge, judgement and
experience to complete its tasks.
M&Z p.l.c. (Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements - 31 December 2023
12
Statement by the Directors on compliance by M&Z p.l.c. (the “Company”) with the
Code of principles for Good Corporate Governance continued
A. Compliance with the Corporate Governance Codecontinued
Principle 3 Composition of the Boardcontinued
Mr Charles Farrugia and Mr Kevin J. Rapinett are the Independent Non-Executive Directors which are
deemed to be independent in line with the requirements of Code Provision 3.2. Neither of the independent
non-executive directors:
a. are or have been employed in any capacity by the Company within the last three (3) years;
b. have or had a significant business relationship with the Company;
c. received or receives significant additional remuneration from the Company;
d. have close family ties with any of the executive members of the Board or senior management of
the Company;
e. has served on the board for more than twelve (12) consecutive years; or
f. is or has been within the last three (3) years an engagement partner or a member of the audit team
of the present or former external auditor of the Company.
For the purposes of Code Provision 3.4 each Non-Executive Director has declared in writing to the Board
that he 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
independence; and
c. to clearly express his opposition in the event that he finds that a decision of the board may harm
the company.
(a)
Principle 4 The Responsibilities of the Board
The Board believes that it fully complies with the requirements of this Principle and the relative Code
Provisions. As required by Principle 4 of the Code the foremost responsibility of the Board is to establish
and maintain a system of accountability, monitoring, strategy formulation and policy development for the
Company. The Board Members apply high ethical standards and take into account the interests of all
relevant stakeholders in their discussions and decisions.
The Board also takes upon itself the responsibility to regularly review and evaluate corporate strategy, major
operational and financial plans, risk policy, performance objectives and monitor implementation and
corporate performance within the parameters of all relevant laws, regulations and codes of best business
practice. Furthermore, the Board is responsible for the identification, assessment and management of the
business risks facing the Company, oversight of the Company’s internal control systems and its financial
performance, determination of the Company’s strategy and strategic aims.
In the performance of such functions the Board has delegated certain functions to the Committees as further
detailed below.
Executive Committee
In the later part of 2021 the Company set up the Executive Committee, made up of eight core employees
who are collectively responsible for decision-making on day-to-day issues whilst steering the Company
forward to ensure the maintenance, growth, evolution and prosperity of the business acting on behalf of and
in line with the long-term vision for the Company established by the Board. The Executive Committee is
composed of the Managing Director (who is also the link to the Board) of the Company, the Chief Finance
Officer, the Chief Operations Officer and senior representatives from the following segments within the
Company: finance, operations, cost control, human resources, marketing, brand management and sales
management.
M&Z p.l.c. (Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements - 31 December 2023
13
Statement by the Directors on compliance by M&Z p.l.c. (the “Company”) with the
Code of principles for Good Corporate Governance - continued
A. Compliance with the Corporate Governance Code - continued
Principle 4 The Responsibilities of the Board - continued
Executive Committee - continued
The members of the Committee for the year under review are Ms Greta Camilleri Avallone, Mrs Erika Pace
Bonello, Mrs Frances Fenech, Dr Emma Pullicino, Mr Christian Giordimaina, Mr George Zammit, Ms
Natasha Saliba and Ms Charmaine Sciberras. During the financial year ended 31 December 2023 the
Executive Committee met 4 times.
Audit Committee
The Board has established an Audit Committee to assist it fulfilling its supervisory and monitoring
responsibilities, according to detailed terms of reference that reflect the requirements of the CMRs as well
as current good corporate governance best practices. The terms of reference of the Audit Committee
established by the Board set out its role and function, composition, the parameters of its remit, as well as
the basis for the processes that it is required to comply with.
The Audit Committee, which meets at least four times a year, is a sub-committee of the Board and is directly
responsible and accountable to the Board. During the year under review the Audit Committee met eight
times. The primary purpose of the Audit Committee is to assist the Directors in conducting their role
effectively so that the Company’s decision-making capability and the accuracy of its reporting and financial
results are maintained at a high level at all times.
The members of the Audit Committee for the year under review are: Mr Kevin J. Rapinett (Chairperson of
the Audit Committee) and Mr Charles Farrugia who are independent non-executive Directors (each of whom
satisfies the independence criteria set out in the CMRs) and Mr Matthew Camilleri as non-executive
Director. In accordance with the CMRs, the members of the Audit Committee that are designated as
competent in auditing and/ or accounting are Mr Kevin J. Rapinett and Mr Charles Farrugia.
Principle 5 Board Meetings
The Board believes that it fully complies with the requirements of Principle 5 and the relative Code
Provisions. In line with the nature and demands of the Company’s business the Board endeavours to meet
on a regular basis and at said meetings the Directors are given ample opportunity to discuss and give their
opinion on the various issues placed on the respective Board agendas.
The Chairman is responsible for the preparation of the Board agenda, which seeks to strike a balance
between long-term strategic and shorter-term performance issues, and for the general conduct of the Board
meetings. Minutes of the meetings are taken by the Company secretary (the “Company Secretary”) which
are subsequently circulated to the Board, as soon as practicable after the meeting, for their review prior to
approval at the following Board Meeting.
M&Z p.l.c. (Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements - 31 December 2023
14
Statement by the Directors on compliance by M&Z p.l.c. (the “Company”) with the
Code of principles for Good Corporate Governance - continued
A. Compliance with the Corporate Governance Code - continued
Principle 5 Board Meetings - continued
During the financial year ended 31 December 2023 the Board met eight times, attendance at these meetings
was as follows:
Board Member Meetings Attended
Mr Charles Farrugia 7
Mr Kevin J. Rapinett 8
Mr Matthew Camilleri 8
Ms Greta Camilleri Avallone 8
Mr Paul Camilleri 8
Mr Thomas Agius Vadala’ 8
Mrs Erika Pace Bonello 8
Dr Emma Pullicino 6
Mrs Frances Fenech 7
Principle 6 Information and Professional Development
The Managing Director and the Board are closely involved in the recruitment and selection of any member
of senior management. The Board ensures that that all Directors are supplied with precise, timely and clear
information so that they can effectively contribute to the Board’s decisions.
The Board is also responsible to ensure that adequate training is provided to the Company’s Directors,
management and employees. The Board will organise and/or attend professional development sessions as
required to develop and update the Directors’ knowledge and capabilities.
The Directors have direct access to the advice and services of Ganado Services Limited (C10785), the
Company Secretary, who is responsible for advising the Board, through the Chairman, on all corporate
governance matters. Where and as necessary the Board is also advised by its legal advisors.
Principle 8A Remuneration Committee/Policy
The Company’s Remuneration Policy was approved by the Board on 27 May 2022 and was put to a binding
shareholder vote at the 2022 Annual General Meeting of the Company. The policy determines the basis for
remuneration of all members of the Board. The principles of the Company’s Remuneration Policy for
Directors reflect a sound governance process, regulatory compliance as well as sustained and long-term
value creation for the Company’s shareholders. The Policy defines the principles and guidelines that apply
to both fixed and variable remuneration, including all bonuses and benefits, which can be awarded to
directors and, in the case of variable remuneration, indicates the relative proportion between fixed and
variable components. It is the Company’s overall intention that the implementation of this policy will
constitute an adequate measure to attract and retain suitable people, calculated to provide the Company
with the appropriate skills, technical knowledge experience and expertise both for the determination of
policies and strategies of the Company as well as the supervisory role of the Board.
M&Z p.l.c. (Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements - 31 December 2023
15
Statement by the Directors on compliance by M&Z p.l.c. (the “Company”) with the
Code of principles for Good Corporate Governance - continued
A. Compliance with the Corporate Governance Code - continued
Principles 9 & 10Relations with Shareholders and with the Market, and Institutional Shareholders
The Company recognises the importance of maintaining effective communication with the market and its
stakeholders in order to ensure that all stakeholders can clearly understand the Company’s objectives.
Besides using the general meeting to communicate with its shareholders the Company intends to issue
periodical company announcements for such purpose of communicating with the market, preparation and
presentation of the Annual Financial Report and Financial Statements as well as through publications on
the Company’s website (https://mz.com.mt/
). The latter contains information on the Company and its
business as well as a dedicated “Investors’’ section.
The Chairman of the Board shall ensure that all Directors (including Mr. Kevin Rapinett as Chairman of the
Audit Committee) shall be present at the annual general meeting (“AGM”) to answer any questions which
may be posed thereat.
Principle 11 Conflicts of Interest
The Directors acknowledge that, irrespective of who appointed them to the Board, their primary
responsibility is always to act in the best interest of the Company and its stakeholders and that they are
never to allow their personal interests to take precedence over those of the Company and its stakeholders.
The M&As of the Company require any conflicted Director to declare such a conflict and subsequently:
prohibit said Director from being counted in the quorum for the meeting at which such matter is to be
discussed or participating in the discussion concerning a matter in respect of which he has declared a direct
or indirect interest; and requiring the Director to withdraw from or, if applicable, not attend the Board meeting
at which such matter is discussed. Furthermore, such a conflicted Director is prohibited from voting on any
matter in which he has an interest. Any conflict of interest is to be accurately recorded in the Board minutes.
A Director having a continuing material interest that conflicts with the interests of the Company should take
effective steps to eliminate the grounds of conflict.
The Directors are aware of their obligations when dealing in securities of the Company. The Directors have
declared their beneficial interests in the capital of the Company as at 31 December 2023: Mr Paul Camilleri;
Mr Matthew Camilleri; Ms Greta Camilleri Avallone; Mr Thomas Agius Vadala’; Mrs Erika Pace Bonello, Dr
Emma Pullicino, Mrs Frances Fenech, Mr Charles Farrugia and Mr Kevin Rapinett.
Principle 12 Corporate Social Responsibility
The Board ensures that the Company adheres to accepted principles of corporate social responsibility in all
practices of the Company. The Board believes that adherence to such principle benefits not only the
Company’s stakeholders (including its shareholders, employees and customers) but society at large. The
Company continuously works on adopting and using environmentally friendly technologies in the various
aspects and processes of its business, works ethically, considering human rights as well as the social,
economic and environmental impact of the business of the Company. The Company has initiated efforts
towards Environmental, Social, and Governance (ESG) reporting. Recognizing the importance of
sustainability and responsible business practices, we have commenced work on implementing frameworks
and processes to effectively capture and report our ESG performance.
M&Z p.l.c. (Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements - 31 December 2023
16
Statement by the Directors on compliance by M&Z p.l.c. (the “Company”) with the
Code of principles for Good Corporate Governance - continued
B. Non-Compliance with the Corporate Governance Code
Principle 7 Evaluation of the Board’s Performance:
The Board does not consider it necessary to appoint a committee to carry out a performance evaluation of
its role, as the Board’s performance is evaluated on an ongoing basis by, and is subject to the constant
scrutiny of the Board itself (two of which are independent non-executive Directors), the Company’s
shareholders, the market and all of the rules and regulations which the Company is subject to, as a
company, with its securities listed on a regulated market. In March 2023, the Board carried out an evaluation
of its own performance together with that of the Committees and the Chairman. The Board delegated the
carrying out of the evaluation exercise to the Company Secretary, who circulated to the Board for its review
and completion a comprehensive Board Effectiveness Questionnaire. The results of said questionnaire
were subsequently analysed by the Company Secretary and then discussed by the Board. The review has
not resulted in any material changes in the Company’s internal organisation or in its governance structures.
Principle 8 Committees, Partial Non-Compliance with Code Provisions 8.A.4.2, 8.A.4.7 and 8.A.5
The Board considers that the size and operations of the Company do not warrant the setting up of
remuneration and nomination committees. The Board believes that the size of the Company and the Board
itself does not warrant the setting up of a separate committee to establish the remuneration packages of
individual directors. The Company relies on the constant scrutiny of the Board itself, the Shareholders, the
market and the rules by which the Company is regulated as a listed company.
The Company does not believe it is necessary to establish a nomination committee as appointments to the
Board are determined by the shareholders of the Company in accordance with nomination and appointment
process set out in the M&A. The Company considers that the members of the Board possess the level of
skill, knowledge and experience expected in terms of the Corporate Governance Code. The Board shall
retain these matters under review over the coming years.
Code Provisions 8.A.4.2, 8.A.4.7 and 8.A.5 These Code Provisions refer to disclosures being required to
be made in relation to “senior executives” (being any person reporting directly to the Board). The Company’s
Remuneration Policy does not cover senior executives and consequently no disclosures in this regard were
included in the Remuneration Statement given that the senior executive functions are effectively carried out
by the respective Executive Directors.
Principle 9 Relations with Shareholders and with the Market Code Provisions 9.3 and 9.4
Code Provision 9.3 The M&As do not provide for a mechanism which would trigger arbitration proceedings
in the event of non-resolution of conflicts between minority shareholders and controlling shareholders.
Should any such conflict arise this will be handled by the Board in its meetings with the assistance of the
Company Secretary to liaise with the relevant shareholder(s).
Code Provision 9.4 The Company does not have in place a formal procedure by which a minority
shareholder can present an issue to the Board. The Company however shall endeavour to have in place
an open line of communication between the minority shareholders and the Company.
M&Z p.l.c. (Formerly M&Z (Marketing) Limited)
Annual Report and Financial Statements - 31 December 2023
17
Statement by the Directors on compliance by M&Z p.l.c. (the “Company”) with the
Code of principles for Good Corporate Governance continued
C. Internal Controls
Company Structure
The Board reviews and is ultimately responsible for the Companys system of internal controls and for
reviewing its effectiveness. Such a system is designed to manage rather than eliminate risk to achieve
business objectives, and can provide only reasonable, and not absolute, assurance against normal
business risks or loss. The company operates through the Board and the Audit Committee, supported by
the Executive Committee. The Company has clear reporting lines and delegation of powers.
Control Environment
The Company is committed to the highest standards of business conduct and seeks to maintain these
standards across all its operations. Policies and procedures are in place for reporting and dealing with
improper activities. The Company has an appropriate organizational structure which enables it to plan,
execute, control and monitor business operations in order to reach the company’s objectives.
Risk identification
The Board of Directors, with the assistance of the Executive Committee, is responsible for the identification
and assessment of key risks applicable to the business. The risks are assessed on an ongoing basis, and
may be associated with a variety of internal and external sources.
Information and communication
The Board engages in regular strategic reviews on long-term financial projections, as well as other potential
business opportunities. The Audit Committee meets on a regular basis, and reviews the effectiveness of
the Company’s systems of internal financial controls. The Committee receives report from management
and the external auditors. Regular budgets are prepared and performance against these plans is actively
monitored and reported to the Board.
D. General Meetings
As set out in Article 74 of the M&As, all shareholders of the Company included in the Register of Members
of the Company on the Record Date relative to the AGM are entitled to receive notice of, participate in and
vote at the general meeting, whether in person or by proxy. Each shareholder is entitled to appoint a person
to act as their proxy holder to attend and vote at an AGM.
Voting at the AGM may take place either by a show of hands or by a poll, where such is demanded. Subject
to any rights or restrictions attaching to any class or classes of Shares, on a show of hands each shareholder
is entitled to one vote and in a poll each shareholder is entitled to one vote per share (carrying voting rights)
held. Furthermore, each shareholder has the right to ask questions pertinent and related to agenda items
and has the right to have such questions answered by the Directors or such person which may be delegated
this task.
Adequate notice of the AGM, of at least twenty-one (21) days, is to be provided to all shareholders in terms
of Article 69 of the M&A. The business of AGM includes the consideration of the Company’s Annual Report
and financial statements, the directors’ and auditors’ report for the previous fi