ANNUAL REPORT
AND FINANCIAL STATEMENTS
2021
Contents
Page
Notice of Annual General Meeting ................................................................................................................. 1
Notes to the Notice of the Annual General Meeting ...................................................................................... 2
Officers, Professional Advisors and Bankers ................................................................................................ 6
Statement of the Members of the Board of Directors .................................................................................... 7
Management Report ...................................................................................................................................... 8
Corporate Governance Report .................................................................................................................... 12
Remuneration Report .................................................................................................................................. 18
Directors’ Curricula Vitae ............................................................................................................................. 20
Independent Auditors’ Report ...................................................................................................................... 24
Consolidated Statement of Profit or Loss and Other Comprehensive Income ........................................... 31
Company Statement of Profit or Loss and Other Comprehensive Income ................................................. 32
Consolidated Statement of Financial Position ............................................................................................. 33
Company Statement of Financial Position .................................................................................................. 34
Consolidated Statement of Changes in Equity ............................................................................................ 35
Company Statement of Changes in Equity ................................................................................................. 36
Consolidated Statement of Cash Flows ...................................................................................................... 37
Company Statement of Cash Flows ............................................................................................................ 38
Notes to the Financial Statements ............................................................................................................... 39
ANNUAL REPORT ‘21 | 2
NOTES TO THE NOTICE OF THE ANNUAL GENERAL MEETING
ENTITLEMENT TO PARTICIPATE IN THE ANNUAL GENERAL MEETING
1. Any person appearing as a shareholder in the Register of Members of the Company on the record
date is entitled to participate in the Annual General Meeting. Each ordinary share is entitled to one
vote. The record date for determining the right to vote at the Annual General Meeting is 17 May
2022. Transactions which will be taking place on 16 May 2022 and thereafter will not be considered
in determining the right to vote at the Annual General Meeting.
2. A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy to
attend and vote on his behalf. Shareholders may appoint any person as their proxy. Such proxy
need not be a member of the Company. Shareholders who appoint a proxy to vote on their behalf,
but wish to specify how their votes will be cast, should tick the relevant boxes on the Form of Proxy.
3. The instrument appointing a proxy, which is available on the website of the Company at
www.vassiliko.com (under Investors Relations), must be deposited at the Registered Offices of the
Company (1A, Kyriakos Matsis Avenue, 4
th
Floor, CY-1082 Nicosia, Cyprus, fax +357 24 332 651)
24 hours prior to the commencement of the business of the Annual General Meeting.
4. If such appointor is a company, the Form of Proxy must bear the name of the company, and be
signed by its duly authorised officer/s. In the case of joint shareholders, the Form of Proxy can only
be signed by the person whose name appears first in the Register of Members. Shareholders should
confirm that the form of proxy has been successfully received by the Company by calling +357 24
855 555.
5. Shareholders and/or their proxies who will attend the Annual General Meeting are requested to carry
with them their identity card, or other proof of identification.
6. Any legal entity, which is a shareholder of the Company, may by resolution of its Directors or other
governing body, authorise such person, as it thinks fit to act as its representative at any meeting of
the Company, and the person so authorised shall be entitled to exercise the same powers on behalf
of the corporation which he/she represents, as that corporation could exercise, if it were an individual
member of the Company.
VOTING PROCEDURES AT THE ANNUAL GENERAL MEETING
7. At the Annual General Meeting, a resolution put to the vote of the meeting shall be decided on a
show of hands, unless a poll is (before or on the declaration of the result of the show of hands)
demanded:
a. by the Chairman, or
b. by at least three members present in person or by proxy, or
c. by any member or members present in person or by proxy and representing not less than one-
tenth of the total voting rights of all the members having the right to vote at the meeting, or
d. by a member or members holding shares in the Company conferring a right to vote at the meeting
being shares on which an aggregate sum has been paid up equal to not less than one-tenth of
the total sum paid up on all the shares conferring that right.
8. If a poll is demanded in the manner aforesaid, it shall be taken in such a manner, as the Chairman
shall direct, and the result of the poll shall be deemed to be the resolution of the meeting at which
the poll was demanded. The demand for a poll may be withdrawn.
ANNUAL REPORT ‘21 | 3
NOTES TO THE NOTICE OF THE ANNUAL GENERAL MEETING (continued)
SHAREHOLDERS RIGHTS AT THE ANNUAL GENERAL MEETING
9. Pursuant to article 127B of Cyprus Companies Law, Cap. 113, shareholders of the Company have
the right to put an item on the agenda of the Annual General Meeting, provided that the item is
accompanied by a written explanation justifying the inclusion of the item or the proposed resolution
for approval at the Annual General Meeting provided that:
a. the shareholder or group of shareholders hold at least 5% of the issued share capital of the
Company, representing at least 5% of the voting rights of shareholders entitled to vote at the
meeting for which an item has been added on the agenda, and
b. the shareholders’ request to put an item on the agenda or resolution (as described above) is
received by the Company’s Secretary in hard copy or electronically at the addresses indicated
below at least 42 days prior to the Annual General Meeting.
Vassiliko Cement Works Public Company Limited
1A, Kyriakos Matsis Avenue, 4
th
Floor, CY-1082 Nicosia, Cyprus
or by fax at +357 24 332 651
or by email at investors@vassiliko.com
10. Pursuant to article 128C of the Cyprus Companies Law, Cap. 113, shareholders have a right to ask
questions related to items on the agenda and to have such questions answered by the Board of
Directors of the Company subject to any reasonable measures the Company may take to ensure the
identification of shareholders.
OTHER INFORMATION AND AVAILABLE DOCUMENTS
11. As at 7 April 2022, the issued share capital of the Company is €30.932.457 divided into 71.935.947
ordinary shares of nominal value €0,43 each.
12. The Annual Report and Financial Statements of the Company for 2021 (incorporating the Notice to
and the Agenda of the Annual General Meeting, Explanatory Notes on the Agenda Items, the
Management Report, the Corporate Governance Report, the Remuneration Report, the Auditors’
Report and the Financial Statements), and the Form of Proxy are available in electronic form on the
website of the Company at www.vassiliko.com (Investor Relations) and in hard copy at the
Company’s Registered Offices, at 1A Kyriakos Matsis Avenue, 4
th
Floor, 1082 Nicosia.
ANNUAL REPORT ‘21 | 4
NOTES TO THE NOTICE OF THE ANNUAL GENERAL MEETING (continued)
EXPLANATORY NOTES
The formal Notice of the 2022 Annual General Meeting is set out on page 1. The Notice asks the
shareholders of Vassiliko Cement Works Public Company Limited to approve a number of items of
business. For your information, the explanatory notes below summarise the purpose of each Resolution
to be voted on by the Company’s shareholders at this year’s Annual General Meeting.
RESOLUTION 1: TO CONSIDER THE MANAGEMENT REPORT
The Chairman will present the Management Report for the year 2021.
RESOLUTION 2: TO RECEIVE, CONSIDER AND APPROVE THE ANNUAL FINANCIAL
STATEMENTS AND THE REPORT OF THE AUDITORS
The Chairman will present the Annual Financial Statements and KPMG Limited will present their Audit
Report for the year ended 31 December 2021.
RESOLUTION 3: APPROVE A DIVIDEND PAYMENT
The Directors proposed the payment of a dividend of €0,13 per Ordinary Share out of the profits of 2020
included in Retained Earnings. If approved at the Annual General Meeting, the dividend will be paid to
the entitled shareholders registered as at 1 June 2022 (record date). The shares of the Company will be
traded ex-dividend as of 31 May 2022. Payment of the dividend will be made (effected) till the 28 June
2022.
RESOLUTION 4: RE-ELECTION OF DIRECTORS
In accordance with the articles of association Messrs George Galatariotis, Charalambos Panayiotou,
Antonios Katsifos and Hakan Gürdal, are the Directors who will retire by rotation this year and offer
themselves for re-election in accordance with the Company’s Articles of Association.
Brief details of all Directors appear on pages 20 to 23 of the Annual Report.
RESOLUTION 5: APPROVE THE REMUNERATION REPORT
The Shareholders are asked to approve the remuneration report that appears on pages 18 to 19.
RESOLUTION 6: TO FIX THE REMUNERATION OF THE DIRECTORS
The Shareholders are asked to approve that the remuneration of the Directors for the year 2022 remains
the same as for the previous year, i.e.:
€25.000 for the Chairman,
€20.000 for each of the Directors,
€300 representation allowance per presence in a meeting held.
RESOLUTION 7: APPOINTMENT OF AUDITORS
This resolution relates to the re-appointment of KPMG Limited as the Company’s auditors to hold office
until the next Annual General Meeting of the Company, and to authorise the Directors to set their
remuneration.
ANNUAL REPORT ‘21 | 5
ANNUAL
REPORT &
FIN ANC I AL
ST A TEM E NTS
'21
ANNUAL REPORT ‘21 | 6
OFFICERS, PROFESSIONAL ADVISORS AND BANKERS
Directors: ANTONIOS A. ANTONIOU (Executive Chairman)
GEORGE ST. GALATARIOTIS
COSTAS ST. GALATARIOTIS
STAVROS G. GALATARIOTIS
COSTAS KOUTSOS
CHARALAMBOS PANAYIOTOU
MAURIZIO MANSI MONTENEGRO
ANTONIS MIKELLIDES
ANTONIOS KATSIFOS
STELIOS S. ANASTASIADES
HAKAN GÜRDAL
General Manager: GEORGE S. SAVVA
Financial Manager: MELINA KYRIAKOU
Secretary: MARIA MAVRIDOU
Independent Auditors: KPMG LIMITED
14, ESPERIDON STREET
1087 NICOSIA
CYPRUS
Legal Advisοrs: TASSOS PAPADOPOULOS & ASSOCIATES
CHRYSSES DEMETRIADES & CO. LLC
L. PAPAPHILIPPOU & CO LLC
CHRISTYS & CO LLC
IOANNIDES DEMETRIOU LLC
Bankers: ALPHA BANK LTD
BANK OF CYPRUS PUBLIC COMPANY LTD
EUROBANK EFG CYPRUS LTD
HELLENIC BANK PUBLIC COMPANY LTD
NATIONAL BANK OF GREECE (CYPRUS) LTD
NATIONAL BANK OF GREECE SA
RCB BANK LTD
UBS SWITZERLAND AG
Registered office: 1A, KYRIAKOS MATSIS AVENUE
1082 NICOSIA
CYPRUS
Registered number: HE 1210
Internet website: www.vassiliko.com
ANNUAL REPORT ‘21 | 8
MANAGEMENT REPORT
The Board of Directors of Vassiliko Cement Works Public Company Limited (the “Company”) presents to
the members of the Company its annual report together with the audited consolidated and separate financial
statements of the Company for the year ended 31 December 2021.
FINANCIAL STATEMENTS
The consolidated financial statements for the year 2021 include the results of the holding company, its
subsidiaries and associate companies.
PRINCIPAL ACTIVITIES
The Group's principal activities are the production of clinker and cement, which are distributed in the local
and international markets.
REVIEW OF DEVELOPMENTS, POSITION AND PERFORMANCE OF THE OPERATIONS
The revenue for 2021 reached €101.419 thousand compared to €105.661 thousand for 2020, showing a
decrease of 4%.
Operational costs were affected by higher energy, shipping and carbon emission costs. The cost of solid
fuels also increased, but their impact was moderated through the use of alternative fuels. The Company is
pursuing further its strategy to replace traditional solid fossil fuels with alternative sources, which offer both
financial and environmental benefits to the Company.
FINANCIAL RESULTS
The results of the Group are presented in the consolidated statement of profit or loss and other
comprehensive income. Profit for the year ended 31 December 2021 amounted to €17.441 thousand
compared to €16.681 thousand in 2020.
DIVIDENDS
On 7 October 2021, the Board of Directors approved the payment of an interim dividend of €0,08 per share
of €5.754.875,76.
The Board of Directors recommends the payment of a dividend of €9.351.673 or €0,13 per share from 2020
profits included in Retained Earnings.
MAIN RISKS AND UNCERTAINTIES
Statements made in this report that are not historical facts, including the expectations for future volume and
pricing trends, demand for the products, energy costs and other market developments are forward looking
statements. These statements are not guarantees of future performance and involve risks, uncertainties
and assumptions (“Factors”), which are difficult to predict.
Some of the Factors that could cause actual results to differ materially from those expressed in the forward-
looking statements include, but are not limited to: the cyclical nature of the Company's business; national
and regional economic conditions; currency fluctuations; energy prices; emission rights price fluctuation;
seasonal nature of the Company’s operations; levels of construction spending and, in particular, in
Government infrastructure projects announced; supply/demand structure of the industry; competition from
new or existing competitors; unfavourable weather conditions during peak construction periods; changes in
and implementation of environmental and other governmental regulations. In general, the Company is
subject to the risks and uncertainties of the construction industry. The forward-looking statements are made
as of this date and the Company undertakes no obligation to update them, whether as a result of new
information, future events or otherwise.
ANNUAL REPORT ‘21 | 9
MANAGEMENT REPORT (continued)
Further information for risks and uncertainties to which the Group is exposed, is disclosed in note 34 of the
financial statements.
FUTURE DEVELOPMENTS
The geopolitical situation in Eastern Europe intensified on 24 February 2022, with Russia’s invasion of
Ukraine. The war between the two countries is increasingly affecting economic and global financial markets
and intensifying ongoing economic challenges, including issues such as rising inflation and global supply-
chain disruption.
Although the Group does not have any direct exposure to Ukraine or Russia, the operations are likely to be
affected by the increases on energy prices, rising pressure on inflation rates, fluctuations in foreign
exchange rates and interest rate rises.
The extend of this war and its impact on the Group cannot be predicted with certainty at this stage given
that changes are occurring rapidly and unexpectedly.
EVENTS AFTER THE REPORTING PERIOD
The important events that occurred after the reporting period are disclosed in note 38 of the financial
statements.
SHARE CAPITAL
The issued share capital of the Company comprises 71.935.947 ordinary shares of €0,43 per share. There
were no changes to the share capital of the Company during 2021. The Company’s shares are listed on the
Cyprus Stock Exchange (CSE).
There are no restrictions on the transfer of the Company’s shares other than the requirements of the Market
Abuse Regulation, which relates to transactions by persons in possession of inside information and persons
discharging managerial responsibilities, as well as persons closely associated with them.
The Company does not have any shares in issue which carry special control rights.
AGREEMENTS WHICH ARE EFFECTIVE UPON A CHANGE OF CONTROL OF THE COMPANY
The Company has not contracted any agreement which becomes effective, is amended or ceases to apply
in case of change of control following a public tender offer to the Company’s shareholders or the proposal
of a resolution to the general meeting of the Company for a merger, acquisition or sale of its operations.
There are no agreements with the Executive Directors or employees of the Company providing for
compensation in case of resignation or dismissal without a valid reason or for termination of their
employment due to a public tender offer for the acquisition of the shares of the Company. In case of
termination by the Company of the employment of Executive Directors or employees, prior to their
retirement, the Company has to compensate them according to the provisions of the Law and the
Company’s agreements with the Trade Unions.
DIRECTORS’ INTEREST IN THE SHARE CAPITAL OF THE COMPANY
The beneficial interest in the Company’s shares held by members of the Board of Directors, directly or
indirectly, at 31 December 2021 and 2 April 2022, is set out in note 30 of the Financial Statements.
ANNUAL REPORT ‘21 | 10
MANAGEMENT REPORT (continued)
BRANCHES
During the year, the Group did not operate any branches.
BOARD OF DIRECTORS
The members of the Board of Directors on the date of the report appear on page 6. In accordance with
the Company’s Articles of Association (Article 92), at the next Annual General Meeting, Messrs George
Galatariotis (Non-Executive Director), Charalambos Panayiotou (Non-Executive Director), Antonios
Katsifos (Non-Executive Director) and Hakan Gürdal (Non-Executive Director) retire from office by rotation
and, being eligible, offer themselves for re-election.
The Directors who served during the period from 27 May 2021, the date of the last Annual General
Meeting, till this date were the following:
Antonios A. Antoniou
George St. Galatariotis
Costas St. Galatariotis
Stavros G. Galatariotis
Costas Koutsos
Charalambos Panayiotou
Maurizio Mansi Montenegro
Antonis Mikellides
Antonios Katsifos
Stelios S. Anastasiades
Hakan Gürdal
The responsibilities of the Directors as members of the Board Committees are disclosed in the Corporate
Governance Report.
There were no material changes to the compensation of the Board of Directors.
CORPORATE GOVERNANCE STATEMENT
The Company recognises the importance of implementing corporate governance principles and adopted the
CSE’s Corporate Governance Code and applies its principles. The CSE’s Corporate Governance Code is
available on the CSE website (www.cse.com.cy).
The Company has adopted the 5
th
Revised Edition of the Corporate Governance Code, issued by the Cyprus
Stock Exchange in January 2019, which is applicable for the Corporate Governance Report for the year
ending 31 December 2019 onwards. At the date of this report, the principles of the Corporate Governance
Code are partly implemented, given that the Principle regarding Board Balance, and the Provision B.1.2 of
the Corporate Governance Code, regarding the independence criteria of the members of the Remuneration
Committee, were not fully met.
The Corporate Governance Report of the Company for 2021 is available on the website of the Company
(www.vassiliko.com).
The rules governing the composition and function of the Board of Directors and the appointment and
replacement of its members as well as the composition and function of the Board Committees are set out in
Section B of the Report on Corporate Governance.
Any amendment or addition to the Articles of Association of the Company is only valid if approved by a
special resolution at a shareholders’ meeting.
ANNUAL REPORT ‘21 | 12
CORPORATE GOVERNANCE REPORT
SECTION A
The Company has adopted the 5
th
Revised Edition of the Corporate Governance Code, issued by the
Cyprus Stock Exchange in January 2019, which is applicable for the Corporate Governance Report for
the year ending 31 December 2019 onwards. At the date of this report the principles of the C orporate
Governance Code are partly implemented, given that the Principle regarding Board Balance and the
Provision B.1.2 of the Corporate Governance Code, regarding the independence criteria of the members
of the Remuneration Committee, were not fully met.
SECTION B
THE BOARD
The Company is headed by the Board of Directors, which at 31 December 2021, comprised one Executive
and ten non-Executive Directors and is responsible to the shareholders for the proper management of the
company “Τσιμεντοποιία Βασιλικού Δημόσια Εταιρεία Λίμιτεδ” (English translation “Vassiliko Cement
Works Public Company Limited”) and its subsidiaries. The non-Executive Directors comprised two
independent Directors and eight non-independent Directors. The members of the Board (excluding the
Chairman) comprised two independent non-Executive Directors and eight non-independent Directors, all
of which are non-Executive Directors. The independent non-Executive Directors of the Board were Mr.
Antonis Mikellides and Mr. Stelios S. Anastasiades.
The size and composition of the Board of Directors allow for the effective exercise of its responsibilities
and reflect the Company’s size, activity and ownership status. The Board of Directors is sufficiently
diversified in terms of age, educational and professional background reflecting a sufficiently wide range
of experiences. Regarding the recommendation of the Corporate Governance Code for gender diversity
amongst the board members, the Board of Directors in the appointments process positively considers
nominations which promote gender diversity, without adversely affecting the educational and professional
background diversification of the Board of Directors.
The Board of Directors of the Company, as at the date of this report, comprises the following members:
Antonios Antoniou – Executive Chairman
George Galatariotis – Νon-Executive Director
Costas Galatariotis – Νon-Executive Director
Stavros Galatariotis – Νon-Executive Director
Costas Koutsos – Νon-Executive Director
Charalambos Panayiotou – Νon-Executive Director
Maurizio Mansi Montenegro – Νon-Executive Director
Antonis Mikellides – Independent non-Executive Director
Antonios Katsifos – Νon-Executive Director
Stelios S. Anastasiades – Independent non-Executive Director
Hakan Gürdal – Νon-Executive Director
The Company’s shares are traded in the Alternative Market of the Cyprus Stock Exchange. Corporate
governance provisions regarding Board Balance for Companies listed in the Alternative Market provide
that the majority of the non-Executive Directors, or at least two Directors, have to be independent non-
Executive Directors. The Company complies with the above Board Balance provision, since two members
of the Board are Independent non-Executive Directors. Based on the provisions of the Corporate
Governance Code, and given that the Board of Directors is comprised of two Independent non-Executive
members and nine non-Independent members (executive and non-executive), Board Balance is not met
according to Principle A.2 of the Corporate Governance Code.
ANNUAL REPORT ‘21 | 13
CORPORATE GOVERNANCE REPORT (continued)
Mr. Stelios S. Anastasiades, independent non-Executive Director, was appointed on 30 May 2017 as
Senior Independent Director. The Senior Independent Director of the Company is available to
shareholders if they have concerns that have not been resolved through the normal channels of contact
with the Executive Chairman, or the General Manager or for which such contact is inappropriate. The
Senior Independent Director will attend sufficient meetings of major shareholders and financial analysts
to develop a balanced understanding of the issues and concerns of such shareholders. The Senior
Independent Director can be contacted initially via the Company Secretary at the Registered Office of the
Company.
The Board has six scheduled meetings a year, setting and monitoring the Group’s strategy, reviewing
trading performance, ensuring adequate funding, examining major capital expenditure, formulating policy
on key issues and reporting to shareholders where appropriate. The Board of Directors convened six
times during 2021. In accordance with best practice, the Board has established the Audit Committee, the
Remuneration Committee and the Nominations Committee as per the requirements of the Code. The
Company Secretary is responsible to and appointed by the Board and all Directors have access to her
advice and services. Directors may obtain independent professional advice if necessary, at the
Company’s expense. Formal agendas, papers and reports are supplied to Directors in a timely manner,
prior to Board meetings. Briefings are also provided at other times, for example, through operational visits
and business presentations.
EXECUTIVE CHAIRMAN AND GENERAL MANAGER
The division of responsibility for the management of the Group between the Executive Chairman and the
General Manager of the Company is presented below.
The Executive Chairman of the Company, Mr. Antonios Antoniou has, among others, the following duties
and responsibilities:
• Determines the Agenda of the meeting of the Board of Directors.
• Chairs the Meetings of the Board of Directors and the General Meetings of the Shareholders of the
Company.
• Reviews the information and documents and confirms their relevance in order to be submitted to the
Members of the Board of Directors prior to the Board Meetings.
• Reviews the strategy of the Group with the General Manager of the Company.
• Represents the Company in all its major dealings.
• Meets with the major shareholders of the Company and conveys their suggestions to the Board of
Directors.
• Cooperates with the General Manager of the Company to determine the strategic targets of the Group
according to the developments of the sector within which the Group operates and secures the thorough
appraisal of the Company’s strategic or other development proposals and the presentation thereof to
the Board of Directors for final approval.
• Evaluates and promotes various other proposals of the General Manager.
• Represents together with the General Manager and/or selective members of the Management Team
the Company at various meetings for the promotion of the strategic targets of the Company.
• Develops and maintains effective relationships with the Company’s stakeholders ensuring the
continuity and the sustainable development of the business.
• Supervises the internal control system, secures the proper implementation of the Company’s targets
and updates the Board of Directors on the related progress.
• Holds periodic meetings with the management of the Company to discuss various specific subjects.
ANNUAL REPORT ‘21 | 14
CORPORATE GOVERNANCE REPORT (continued)
The General Manager of the Company, Mr. Georgios Savva, has, among others, the following duties and
responsibilities:
• To manage the Company in line with the strategy and the commercial targets determined by the Board
of Directors and in compliance with all relevant laws, regulations, Corporate Governance codes as
well as internal policies and procedures.
• To ensure the daily smooth operation of the Company in line with the policy, the targets and the
budgets approved by the Board of Directors.
• To ensure timely and effective implementation of the strategic resolutions of the Board of Directors in
agreement with the Executive Chairman.
• In cooperation with the Executive Chairman to manage the business development of the Company’s
activities, its subsidiaries and associates.
• To inform regularly the Executive Chairman regarding all the major issues of the Company, inclu ding
the current status of the operations of the Company.
• To implement procedures to ensure existence of an efficient internal control system.
• To define and introduce appropriate rules, measures and procedures to govern operations at risk.
• To identify the main business risks and approve the relevant action plans to mitigate them.
APPOINTMENTS TO THE BOARD
The Nominations Committee is chaired by Mr. G. Galatariotis (non-Executive Director) and is composed
of two other Directors, Messrs C. Koutsos (non-Executive Director) and A. Katsifos (non-Executive
Director). All the members of the Committee are non-Executive Directors. The Nominations Committee is
responsible for the selection and nomination of any new Director, for the Board’s consideration. The
Committee is responsible to carry out a selection process. Upon the appointment of a new Director,
appropriate training is provided as required. In accordance with the Articles of Association of the Company
and the Corporate Governance Code, at least three out of the eleven Directors of the Company (excluding
the Executive Chairman of the Company) retire by rotation every year (each Director retires every three
years) and, if eligible, may offer themselves for re-election. The Board has set the 75
th
year of age as the
year of retirement.
RELATIONS WITH SHAREHOLDERS
Importance is attached to maintaining a dialogue with the Company’s institutional shareholders. The
Annual General Meeting is used as a forum for communicating with shareholders, providing briefings on
the Company’s performance during the year under review and current business activity. There will be an
opportunity for shareholders to meet with and put questions to the Directors, including the chairmen of
the Audit, Nominations and Remuneration Committees. At Annual General Meetings, separate resolutions
are proposed on each substantially separate issue and the number of proxy votes received for and against
each resolution is announced. Members with voting rights of 5% may place items on the agenda of Annual
General Meetings by submitting such items, either in hard copies or soft copies (electronic), accompanied
with relevant explanations, at least 42 days before the date of the Annual General Meeting. Notices of
Annual General Meetings are sent to the shareholders at least 21 days before the meeting. The Board of
Directors appointed Mr. George Savva as Investor Liaison Officer to facilitate better communication with
shareholders and investors.
FINANCIAL REPORTING
The preparation and presentation of this report and financial statements and other price sensitive public
reports, seek to ensure that reports are prepared in a way that represent a balanced and understandable
assessment of the Group’s position and prospects.
ANNUAL REPORT ‘21 | 15
CORPORATE GOVERNANCE REPORT (continued)
INTERNAL CONTROL
Risk assessment and review is carried out by the executive management with details of significant risks
being documented. Periodic reports relating to significant risks and associated controls are prepared from
this documentation and presented to the Board for its review. The Board has overall responsibility for the
Group’s systems of internal control and for reviewing their effectiveness on an annual basis, as well as of
the procedures which confirm the accuracy, completeness and validity of the information that is provided
to the investors. The review covers all systems of internal control, including financial and operational
systems, as well as compliance systems and systems for the management of risks, which threaten the
attainment of the Company’s objectives. On the basis of the process described above during the year the
Internal Auditors prepare Internal Audit Reports addressed to the Audit Committee which informs the
Board through its Annual Internal Audit Report. According to the Internal Auditors Reports, the systems
of internal control do not present any significant weaknesses. The Board has reviewed the key risks
inherent in the Group, together with the operating, financial and compliance controls that have been
implemented to mitigate those key risks. However, any system of internal control can provide only
reasonable and not absolute assurance against material misstatement or loss. The Board has put in place
an organisation structure with clearly defined lines of accountability and delegated authority. The
principles have been designed to establish clear local operating autonomy within a framework of central
leadership, stated aims and objectives. Procedures were established for business planning, budgeting,
capital expenditure approval and treasury management. The Executive Chairman and the General
Manager regularly review the operating performance of each business and monitor progress against
business plans.
The Board of Directors assures that to the best of its knowledge, there has been no violation of the
Securities and Stock Exchange of Cyprus Law and Regulations.
AUDIT COMMITTEE AND AUDITORS
The Audit Committee comprises of the Independent non-Executive Director, Mr. St. S. Anastasiades,
(Chairman), Mr. C. Galatariotis (non-Executive Director) and Mr. A. Mikellides (Independent non-
Executive Director). The majority of the members of the Audit Committee, including the Chairman, are
Independent non-Executive Directors. The Committee met four times during 2021. The Committee
meetings provide a forum for reporting by the Group’s external and internal auditors who have access to
the Committee for independent discussion, without the presence of Executive Directors.
The Audit Committee reviews a wide range of financial matters including the annual and half-yearly
results, statements and accompanying reports, before their submission to the Board and monitors the
controls which are in force to ensure the integrity of the financial information reported to shareholders,
and also oversees the procedures for the selection of accounting policies and accounting estimates for
the Company’s financial statements and ensures that a mechanism is in place to ensure the Company’s
assets, including the prevention and detection of fraud. The Audit Committee also advises the Board on
the appointment and termination of appointment of external auditors and on their remuneration both for
audit and non-audit work, and is responsible for keeping under continuous review the scope and results
of the audit and its cost-effectiveness and the independence and objectivity of the auditors. The External
Auditors of the Company provide permitted non-audit services to the Company. The provision by the
External Auditors of non-audit services do not impair their independence and objectivity and they comply
with the principles of independence in accordance with the relevant directive. Furthermore, the Audit
Committee proposes to the Board of Directors the appointment and revocation of appointment of the audit
firm assigned with the Internal Audit functions, and ensures its independence.
ANNUAL REPORT ‘21 | 16
CORPORATE GOVERNANCE REPORT (continued)
The Group’s internal audit function is outsourced to PricewaterhouseCoopers Ltd, a professional Auditors
Firm, which monitors the Group’s internal financial control, the internal control systems and risk
management systems and reports to the management and to the Audit Committee.
The Audit Committee considers the above mentioned periodic reports whereas the Management is
responsible for the implementation of the recommendations made by internal audit that carry out post-
implementation reviews. The external auditors carry out independent and objective reviews and tests of
the internal financial control processes, only to the extent that they consider necessary to form their
judgement when expressing their audit opinion on the accounts.
The Audit Committee discusses extensively with the auditors significant audit findings arising during their
audit work, which were resolved or remained unresolved, as well as the auditor’s report which refers to
weaknesses in the internal control system, in particular those concerning the procedures of financial
reporting and the preparation of financial statements.
GOING CONCERN
After making appropriate enquiries, the Directors consider that the Group has adequate resources to
continue in operational existence for the foreseeable future. For this reason, they continue to adopt the
going concern basis in preparing the accounts and state that the Company intends to operate as a going
concern for the next twelve months.
REMUNERATION COMMITTEE
The Remuneration Committee comprises of three non-Executive Directors. The members of the
Remuneration Committee are Messrs Ch. Panayiotou (non-Executive Director), St. Galatariotis (non-
Executive Director) and A. Mikellides (Independent non-Executive Director). The Committee is chaired by
Mr. Ch. Panayiotou who has knowledge and experience in remuneration policy. Even though all the
members of the Remuneration Committee are non-executive Directors, only one director out of the three
members of the Remuneration Committee is independent non-executive director according to the criteria
of independency of a director as these are defined by the provision A.2.3. of the Corporate Governance
Code. The Committee will usually meet at least once a year. The Group Executive Chairman will normally
be invited to attend its meetings in order to make recommendations regarding the remuneration of the
General Manager and the Deputy General Manager. The Committee periodically reviews the Directors ’
remuneration under their capacity as non-Executive Directors and members of the Board’s Committees,
as well as the remuneration policy for Executive Directors, the General Manager and the Deputy General
Manager. Independent external legal and consultancy advice is obtained when necessary. The Group
Executive Chairman is not present when his own remuneration is discussed.
The Remuneration policy of the Directors of the Company is included in the Remuneration Report (page
18).
DIRECTORS SEEKING RE-ELECTION
All the Directors are subject to election by the shareholders at the first Annual General Meeting that follows
their appointment and thereafter retire every three years. According to the Articles of Association, one
third of the ten Company Directors (excluding the Executive Chairman of the Company) retire from the
Board at each Annual General Meeting. The Directors liable to retirement according to the above
provisions are those who served as members of the Board for the longest period since their last election.
ANNUAL REPORT ‘21 | 17
CORPORATE GOVERNANCE REPORT (continued)
In accordance with the Company’s Articles of Association (Article 92), at the next shareholders Annual
General Meeting, Messrs George Galatariotis (Non-Executive Director), Charalambos Panayiotou (Non-
Executive Director), Antonios Katsifos (Non-Executive Director) and Hakan Gürdal (Non-Executive
Director), shall retire from office by rotation. All above mentioned Directors, being eligible, shall offer
themselves for re-election.
LOANS AND GUARANTEES GRANTED TO DIRECTORS
No loans and/or guarantees were granted to the Directors of the Company or to Directors of any subsidiary
or associated company, either by the Company itself or by its subsidiary or associated companies, and
there are also no monies receivable from any company involved with a Director, and/or any person related
to him.
COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE OFFICER
The Board of Directors appointed Mr. George Savva, General Manager of the Company, at the position
of Compliance with the Code of Corporate Governance Officer.
ANNUAL REPORT ‘21 | 18
REMUNERATION REPORT
The Remuneration Report of the Company for the year 2021 has been prepared according to Appendices
1 and 2 of the Corporate Governance Code.
REMUNERATION COMMITTEE
The Remuneration Committee of the Board is responsible for ensuring that the remuneration packages
awarded to Executive Directors are appropriate to individual levels of responsibility and performance, are
consistent with the Company’s remuneration policy, and are in line with the principles of the Corporate
Governance Code.
REMUNERATION POLICY
The Board’s policy is to employ high calibre people for its key positions. It requires a corresponding level
of performance from those people and seeks to reward accordingly. The Group may commission special
reviews from time to time to assess the Directors’ compensation levels. Account is taken of the salary and
total remuneration levels prevailing in comparable jobs both inside and outside the Construction and
Building Materials sector, together with the individual performance and contribution of each Executive
Director.
The remuneration of the Executive Chairman and the General Manager includes variable-pay
components to ensure that the executive remuneration is linked to the Company’s performance. A
maximum limit of the variable-pay component is set. The non-variable component is deemed as sufficient
remuneration, even when a variable remuneration is not granted. The Board considers that packages of
this nature are consistent with prevailing practice and are necessary to attract, retain and reward
executives of the calibre the Group requires. In developing this policy, the Board has given full
consideration to the provisions of the Corporate Governance Code. The annual incentive plan rewards
for the performance of the previous year and is paid in cash. The maximum bonus payment is based on
the evaluation of the performance of the Executive Chairman and the General Manager assessed by the
Remuneration Committee at the year following the performance period. The Remuneration Committee
evaluates the performance of the Executive Chairman and the General Manager considering the
Company’s financial performance, costs containment measures, measures towards the Group’s long -
term viability, as well as non-financial criteria relating to development and creating long term value for the
Group. Bonuses granted in 2021 concern rewards for the financial performance of the Company for two
years, year 2020 and 2021. The Company reserves the right for full or partial recovery of any bonuses
granted on the basis of information which subsequently proves to be inaccurate.
In addition to the base salary and incentive plan participation, the Executive Chairman and the General
Manager enjoy the same benefits as other employees of the Company, which in the case of the General
Manager include the provident fund.
No significant changes were made to the remuneration policy of the Company for year 2021 compared to
the previous year.
The total remuneration of the sole Executive Director under his capacity as Executive for the year 2021
was €362.950.
PENSION SCHEME
All the Employees of the Company, including the General Manager, were members of the Company’s
Provident Fund during 2021, which is a defined contribution scheme. No other additional pension
schemes exist for the Executive Member of the Board.
ANNUAL REPORT ‘21 | 19
REMUNERATION REPORT (continued)
EMPLOYMENT CONTRACTS
Employment of Executive Directors are for indefinite periods, however, notice periods do not exceed one
year as per the requirements of the Corporate Governance Code. In case of termination by the Company
of the employment of Executive Directors, prior to their retirement, the Company has to compensate the
Executive Directors according to the provisions of the Law.
NON-EXECUTIVE DIRECTORS
The remuneration of the Directors, both Executives and non-Executives, for services rendered to the
Company as Directors, is determined by the annual general meeting of the Company on the proposal of
the Board. The non-Executive Directors have letters of appointment for a three-year term. They do not
participate in any profit sharing, share option or other incentive scheme. The remunerations for each of
the Directors for 2021 were €20.000, and €25.000 for the Chairman and €300 per meeting for attendance
in person.
EXECUTIVE AND NON-EXECUTIVE DIRECTORS’ REMUNERATIONS
The remunerations of the Directors, Executives and non-Executives, under their capacity as Directors of
the Company and as members of the Board of Directors’ Committees as well as under their capacity as
Executive Directors for 2021 were as follows:
Directors
Fees as
Members of the
Board and its
Committees
Fees and
emoluments
as executives
Bonuses
(*)
Other
Benefits
Social
Benefits
Provident
Fund
Total
Remuneration
€
€
€
€
€
€
€
Executive Directors
Antonios Antoniou
27.100
216.000
135.000
11.950
-
-
390.050
Non-Executive Directors
George St. Galatariotis
22.400
-
-
-
-
-
22.400
Costas St. Galatariotis
23.000
-
-
-
-
-
23.000
Stavros G. Galatariotis
23.000
-
-
-
-
-
23.000
Costas Koutsos
22.400
-
-
-
-
-
22.400
Charalambos Panayiotou
23.000
-
-
-
-
-
23.000
Maurizio Mansi Montenegro
21.200
-
-
-
-
-
21.200
Antonis Mikellides
23.900
-
-
-
-
-
23.900
Antonios Katsifos
22.100
-
-
-
-
-
22.100
Stelios S. Anastasiades
22.700
-
-
-
-
-
22.700
Hakan Gürdal
21.800
-
-
-
-
-
21.800
252.600
216.000
135.000
11.950
-
-
615.550
* The bonus of €135.000 granted to the Chairman in 2021 concern rewards for the financial performance
of the Company for the year 2020 (€85.000) and 2021 (€50.000).
The Independent Non-Executive Directors, Messrs A. Mikellides and St. S. Anastasiades did not receive
from the Company, during their tenure and the 12 months preceding their appointment to the Board, any
other material compensation, besides their remuneration as members of the Board of Directors of the
Company.
LOANS AND GUARANTEES GRANTED TO DIRECTORS
No loans and/or guarantees were granted to the Directors of the Company or to Directors of any subsidiary
company or to their related parties by the Company and its subsidiary companies.
ANNUAL REPORT ‘21 | 20
DIRECTORS’ CURRICULA VITAE
ANTONIOS ANTONIOU – EXECUTIVE CHAIRMAN
Mr. Antonios Antoniou was born in London. He studied at the University of London where he obtained a
BSc (Hons) degree and a postgraduate diploma.
Mr. Antoniou worked for 5 years as a Biochemist at University College London and for 3 years as a Computer
Systems Analyst at British Gas Headquarters in London. He was a founding partner of AMER World
Research Ltd and Deputy General Manager from 1983 until 1998. From 1998 until December 2006 he
served as Senior Vice President (Operations and Systems) of Nielsen Europe and was a member of the
European Executive Committee.
As from February 2008 he has been the Executive Chairman of Vassiliko Cement Works Public Company
Ltd. From August 2017 until December 2019 he undertook the additional role of the Chief Executive Officer
of the Company.
He is a Member of the Board of Directors of the Cyprus Employers & Industrialists Federation as from July
2011 and Member of its Executive Committee as from December 2013. From January 2019 until December
2020 he was Vice-Chairman and as from January 2021 he is the Chairman of the Cyprus Employers &
Industrialists Federation.
GEORGE ST. GALATARIOTIS
Mr. George St. Galatariotis was born in Limassol in 1947. He studied Business Administration at City
Polytechnic in London.
Mr. George Galatariotis is Executive Chairman of Galatariotis Group of Companies, Executive Chairman of
The Cyprus Cement Public Company Ltd and K&G Complex Public Company Ltd, as well as a Member of
the Board of Directors of Enerco – Energy Recovery Limited. He is also Member of the Board of Directors
of several other private and public companies. He is a Trustee of the Cyprus Conservation Foundation
(Terra Cypria). Mr. George Galatariotis has also served as a member of the Board of Limassol Chamber of
Commerce and Industry and the Cyprus Ports Authority. As from 2017 Mr. Galatariotis is a member of the
Board of Directors of the Cyprus Employers & Industrialists Federation.
COSTAS ST. GALATARIOTIS
Mr. Costas St. Galatariotis was born in Limassol in 1963. He graduated the 5
th
Gymnasium of Limassol and
he studied Economics, Industry and Commerce at the London School of Economics and Political Science.
Mr. Costas Galatariotis is Executive Chairman of the Galatariotis Group of Companies, Executive Chairman
of C.C.C. Tourist Enterprises Public Company Ltd and member of Boards of Directors of several private and
public companies.
Mr. Costas Galatariotis has served as Honorary Consul General of Japan in Cyprus from 2007 until 2012.
He served as President of the Board of the Limassol Chamber of Commerce and Industry from September
2014 until October 2020 and since October 2020 he is Vice President of the Board of the Cyprus Chamber
of Commerce and Industry.
ANNUAL REPORT ‘21 | 21
DIRECTORS’ CURRICULA VITAE (continued)
STAVROS G. GALATARIOTIS
Mr. Stavros Galatariotis was born in Limassol in 1976. In 1999 he graduated from the University of Surrey
with a BSc in Business Economics (First Class). During his studies he was awarded the CIMA award by the
Chartered Institute of Management Accountants. Stavros holds an MBA from the Cyprus International
Institute of Management.
Since 2000, Stavros Galatariotis is an Executive Director of the Galatariotis Group of Companies and a
member of the Board of Directors of several private and public companies. He is a Director of Vassiliko
Cement Works Public Company Limited since 2008.
COSTAS KOUTSOS
Mr. Costas Koutsos is the Executive Chairman of KEO Plc and Member of the Board of Directors of Hellenic
Mining Public Company Ltd. Between 1978 and 2011 he was the Managing Director of BMS Metal Pipes
Industries Group. He is a Financial Consultant, Companies Tax Consultant, Secretary and Member of the
Board of Directors of other private companies. Mr. C. Koutsos is a qualified accountant and he has worked
for twelve years in a senior position in an international audit firm. He has a perennial experience in the
Cyprus Stock Exchange Market. He is an active member of various charitable foundations. He served as
Member of the Board of Directors of Cyprus Metal Industry Association, member of the Cyprus Employers
and Industrialists Federation from 1985 to 2011.
CHARALAMBOS P. PANAYIOTOU
Mr. Charalambos Panayiotou was born on 6 July 1971. He studied Management Sciences (BSc) at the
London School of Economics and Political Science (1993). He joined Coopers & Lybrand as a Chartered
Accountant trainee in the audit and tax department from 1993 to 1996. He is a member of “The Institute of
Chartered Accountants in England and Wales” as well as a Member of “The Institute of Certified Public
Accountants of Cyprus” since 1996. He then joined the Cyprus Popular Bank Ltd. In 2000 he was appointed
Financial Controller of the Holy Bishopric of Paphos, Executive member of the Board of Directors of St.
George Hotel (Management) Ltd as well as of SM Tsada Golf Ltd until September 2010, upon which date
he was appointed as Managing Director of the KEO PLC Group. He is a Member of the Board of Directors
of Hellenic Mining Group Companies. He served as a Member of the Board of the Hellenic Bank Public
Company Ltd from June 2005 to January 2014. During this same period he served as Chairman of the
Hellenic Bank (Investments) Ltd. As from 2017 Mr. Panayiotou is a member of the Board of Directors of the
Cyprus Employers & Industrialists Federation.
MAURIZIO MANSI MONTENEGRO
Mr. Maurizio Mansi Montenegro was born on March 10, 1962. He holds a degree in Statistical Science from
Rome University “La Sapienza” and a post-graduate degree in Strategic and International Marketing from
SDA Bocconi (Milan), after having attended the International Executive Program at “Institut Européen
d'Administration des Affaires” (INSEAD). He started his career in Hewlett Packard as Business Analyst, then
as Strategic Planning Specialist in Agusta – Westland.
In 1990, he joined Italcementi Group as Marketing Analyst Coordinator and, after seven years of experience
in the Group’s Strategic Plan Direction, he has been responsible for Cement Commercial activities in Egypt.
In 2007 he was appointed as Assistant to the C.E.O. of Italcementi S.p.A. and between 2009 and the end
of 2016, he was the Managing Director of Interbulk Trading S.A. Since January 2017 he is General Director
Trading of HC Trading, the trading company of Heidelberg Cement Group. He is also member of the Board
of Directors of Interbulk Trading SA, HC Trading GmbH, HC Trading Malta Ltd and HCT Green Ltd.
ANNUAL REPORT ‘21 | 22
DIRECTORS’ CURRICULA VITAE (continued)
ANTONIS MIKELLIDES
Mr. Antonis Mikellides was born in London in 1978. He studied at the University of Westminster where he
obtained a BA degree in Business Computing and holds a Postgraduate degree in Shipping, Trade and
Finance from City University London as well as a diploma in Terrorism Studies, focusing mainly on Marine
Piracy, from the University of St. Andrews in Scotland.
Mr. Mikellides joined Zela Shipping Co Ltd in London in 2002 as a fleet operator, and in 2006 was in charge
of restructuring the fleet’s management company in Piraeus Greece. As from 2010 he has been a Director,
Chief Financial Officer and Vice-President of Olympia Ocean Carriers Ltd and in 2012 also became a
Director of Sea Trade Holdings. Mr. Mikellides has been elected on the Board of Directors of the Cyprus
Union of Shipowners since 2009.
ANTONIOS KATSIFOS
Mr. Antonios Katsifos was born in Athens in 1955. He studied at the National Technical University of Athens
where he obtained a Degree as Mining and Metallurgy Engineer and he successfully completed the
Accelerated Development program at London Business School.
He worked for 10 years, from 1981 until 1991, as a Mining Engineer in underground operations at Greek
Bauxite of Elikon S.A. at Distomon Viotias and at METVA S.A. at Molaoi Lakonias, Greece. He worked for
HALYPS cement, member of Italcementi group of companies in Greece and now Heidelberg Cement, for
more than 25 years. In 1991, he joined ET BETON, a ready mix concrete production company as Production
Manager in Athens, and in 1995 he became Vice President and Managing Director at DOMIKI BETON at
Heraclion Creta, a position held until 2001.
In 1999 he became General Director of HALYPS QUARRY in Attica and in 2001 Sales and Marketing
Director of HALYPS CEMENT. He served as Sales and Marketing Director in Cement and Aggregates
activity at HALYPS BUILDING MATERIALS S.A. until 2017 having served simultaneously the position of
Sales Director for the concrete activity from 2013 to 2015. He was a member of the Board of Directors of
the Hellenic Cement Industry Association from 2002 until 2017 and a member of the Board of Directors of
the Mining and Quarry Association in Greece, as representative of HALYPS, from 2014 until 2017. Mr.
Katsifos is involved up to November 2021 as Partner in the Consultancy firm ECHMES Ltd, which provides
integrated solutions in the field of Environmental Management and Permitting, of Mining, Metallurgical and
other industrial projects, Touristic projects and building projects, Urban development plans and Strategic
Investments within the framework of sustainable development, and after November 2021 as a senior
Consultant in the above mentioned Consultancy firm ECHMES Ltd.
STELIOS S. ANASTASIADES
Mr. Stelios S. Anastasiades is a Mechanical Engineer, aged 68. He was awarded a First Class Honours
B.Sc. (Eng) degree from the Queen Mary College and a M.Sc. degree and D.I.C from the Imperial College,
University of London.
Mr. Anastasiades is the Managing Director of KONE Elevators Cyprus Ltd, the leading company in Cyprus
in the field of lifts and escalators, with 120 employees and an annual turnover of €17,1 million.
He is the ex-President of the Nicosia Chamber of Commerce and Industry, an honorary member of the
executive committee of the Cyprus Chamber of Commerce and Industry, a member of the Cyprus Technical
Chamber and President of the Board of Directors of the Financial Ombudsman of the Republic of Cyprus.
In the past he served as Vice Chairman of Eurocypria Airlines, member of the Board of Social Insurance,
member of the Board of the Loan Commissioners and member of the board of the Cyprus Organization for
Standards and Quality Control.
ANNUAL REPORT ‘21 | 23
DIRECTORS’ CURRICULA VITAE (continued)
HAKAN GÜRDAL
Mr. Hakan Gürdal studied mechanical engineering at the Yildiz Technical University in Istanbul and holds
an MBA in International Management from the University of Istanbul.
He joined Çanakkale Çimento (today part of Heidelberg Cement’s joint venture Akçansa in Turkey) in 1992,
as investment engineer to build Istanbul port & terminal. Commissioning terminal, he became terminal
manager, and then Vice General Manager in charge of cement & concrete business lines. He held various
management positions at Akçansa, such as Strategy & Business Development Manager (1996–1997), Vice
General Manager Cement Domestic Sales & Exports (1997–2000) and Vice General Manager Ready-mixed
Concrete, Aggregates and Purchasing (2000–2008), before he became General Manager Akçansa (2008–
2014). From 2014 to the end of January 2016 he was President of the Cement Strategic Business Unit of
Sabanci Holding, in charge of Cimsa & Akcansa.
Mr. Hakan Gürdal has been appointed as member of the Managing Board (Vorstand) of Heidelberg Cement
on 1 February 2016. Since 1 April 2016, he is in charge of the Africa & Eastern Mediterranean Basin Group
area. Additionally, from 1 January 2017 until 30 April 2019, he was the Board Level in charge for Group
Purchasing function within Heidelberg Cement. He is chairing Global Alternative Fuel Working Group.
As of 5 April 2019, he is additionally in charge at Board Level for HC Trading.
24
Independent Auditors’ report
to the members of
Vassiliko Cement Works Public Company Ltd
Report on the audit of the consolidated and separate financial statements
Opinion
We have audited the consolidated financial statements of Vassiliko Cement Works
Public Company Ltd and its subsidiaries (the “Group”) and separate financial
statements of Vassiliko Cement Works Public Company Ltd (the “Company”),
which are presented on pages 31 to 73 and comprise the consolidated statement
of financial position of the Group and the statement of financial position of the
Company as at 31 December 2021, and the consolidated statements of profit or
loss and other comprehensive income, changes in equity and cash flows of the
Group, and the statements of profit or loss and other comprehensive income,
changes in equity and cash flows of the Company for the year then ended, and
notes to the consolidated and separate financial statements, including a summary
of significant accounting policies.
In our opinion, the consolidated and separate financial statements give a true and
fair view of the financial position of the Group and the Company, respectively, as
at 31 December 2021, and of their financial performance and cash flows for the
year then ended in accordance with International Financial Reporting Standards as
adopted by the European Union (“IFRS-EU”) and the requirements of the Cyprus
Companies Law, Cap. 113, as amended from time to time (the “Companies Law,
Cap. 113”).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(“ISAs”). Our responsibilities under those standards are further described in the
“Auditors’ responsibilities for the audit of the consolidated and separate financial
statements” section of our report. We remained independent of the Group and
the Company throughout the period of our appointment in accordance with the
International Code of Ethics (including International Independence Standards) for
Professional Accountants of the International Ethics Standards Board for
Accountants (“IESBA Code”) together with the ethical requirements in Cyprus
that are relevant to our audit of the consolidated and separate financial
statements, and we have fulfilled our other ethical responsibilities in accordance
with these requirements and the IESBA Code. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
25
Key audit matters incorporating the most significant risks of material misstatements, including
assessed risk of material misstatements due to fraud
Key audit matters are those matters that, in our professional judgement were of most significance in
our audit of the consolidated and separate financial statements of the current period. These matters
were addressed in the context of our audit of the consolidated and separate financial statements as
a whole, and in forming our opinion thereon and we do not provide a separate opinion on these
matters.
Revenue recognition
Refer to Note 5 of the financial statements.
Key audit matter
How the matter was addressed in our audit
The vast majority of the Group’s and the
Company’s revenue is generated from the sales of
Clinker and Cement.
The Group and the Company generally recognise
revenue when products are delivered to the
customers for the domestic sales, or in
accordance with the terms and conditions of sale
for export sales. Accordingly, the terms and
conditions by customers vary and may affect the
timing of recognition of revenue.
Given the significance of revenue as a major
component in the statement of profit or loss and
other comprehensive income, and since revenue
is one of the key performance indicators of the
Group and the Company and is, therefore, subject
to manipulation, we considered the revenue
recognition as a key area of focus during our audit.
Our audit procedures consist of the following:
• Evaluation and assessment of the operating
effectiveness of the internal controls
relevant to the recognition and
measurement of revenue.
• Performing substantive analytical
procedures, developing an expectation of
the level of domestic sales based on
historical data and macroeconomic factors.
• Evaluation of the appropriateness of
recognition of both revenue and discounts by
reference to the relevant invoices and/or
agreements with customers, in order to
assess whether revenue and discounts have
been recognised in the correct accounting
period.
26
Key audit matters incorporating the most significant risks of material misstatements, including
assessed risk of material misstatements due to fraud (continued)
Valuation of investment properties
Refer to Note 14 of the financial statements.
Key audit matter
How the matter was addressed in our audit
At 31 December 2021, the management has
assessed the fair value of the Group’s and the
Company’s investment properties at €5.533
thousand and €5.318 thousand, respectively.
Given the significance of the above amounts as
well as the inherent subjectivity included in
determining the fair value, as well as, the
judgement involved in this area, the valuation of
investment property has been identified as an
area of focus during our audit.
Our audit procedures consist of the following:
• Assessment of the capability, competence
and independence of the external
professional property valuer.
• Assessment of the methodology used by the
external professional property valuer and the
reasonableness of the comparable data used
in the valuations. Our internal valuation
specialist was used within this process.
• Assessment of the accuracy of the
mathematical calculations.
Other information
The Board of Directors is responsible for the other information. The other information comprises the
management report, the corporate governance report, the remuneration report and the directors’
curricula vitae but does not include the consolidated and separate financial statements and our
auditors’ report thereon.
Our opinion on the consolidated and separate financial statements does not cover the other
information and we do not express any form of assurance conclusion thereon, except as required by
the Companies Law, Cap. 113.
In connection with our audit of the consolidated and separate financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the consolidated and separate financial statements or our knowledge obtained in
the audit or otherwise appears to be materially misstated. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are required to report
that fact.
With regards to the remuneration report and the directors’ curricula vitae we have nothing to report.
With regards to the management report and the corporate governance report, our report in this regard
is presented in the “Report on other legal and regulatory requirements” section.
27
Responsibilities of the Board of Directors and those charged with governance for the
consolidated and separate financial statements
The Board of Directors is responsible for the preparation of consolidated and separate financial
statements that give a true and fair view in accordance with IFRS-EU and the requirements of the
Companies Law, Cap. 113, and for such internal control as the Board of Directors determines is
necessary to enable the preparation of consolidated and separate financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the consolidated and separate financial statements, the Board of Directors is responsible
for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting, unless
there is an intention to either liquidate the Company or to cease the Group’s operations, or there is
no realistic alternative but to do so.
The Board of Directors and those charged with governance are responsible for overseeing the
Group’s and the Company’s financial reporting process.
Auditors’ responsibilities for the audit of the consolidated and separate financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated and separate
financial statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated and separate financial
statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated and separate financial
statements, whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s and the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Board of Directors.
• Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s and the Company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditors’ report to the related disclosures in the consolidated
and separate financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report.
However, future events or conditions may cause the Group and the Company to cease to
continue as a going concern.
28
Auditors’ responsibilities for the audit of the consolidated and separate financial statements
(continued)
• Evaluate the overall presentation, structure and content of the consolidated and separate
financial statements, including the disclosures, and whether the consolidated and separate
financial statements represent the underlying transactions and events in a manner that achieves
true and fair view.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities of the Group and the Company to express an opinion on the consolidated and
separate financial statements. We are responsible for the direction, supervision and performance
of the Group and the Company audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and
where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the consolidated and separate financial statements of
the current period and are therefore the key audit matters. We describe these matters in our auditors’
report.
Report on other regulatory and legal requirements
Other regulatory requirements
Pursuant to the requirements of Article 10(2) of EU Regulation 537/2014 we provide the following
information in our Independent Auditor’s Report, which is required in addition to the requirements of
ISAs.
Date of appointment and period of engagement
We were first appointed auditors of the Company by the General Meeting of the Company’s
members in 1988. Our appointment has been renewed annually by shareholder resolution. Our total
uninterrupted period of engagement is 34 years covering the periods ending 31 December 1987 to
31 December 2021.
Consistency of auditors’ report with the additional report to the Audit Committee
We confirm that our audit opinion is consistent with the additional report presented to the Audit
Committee dated 31 March 2022.
Provision of non-audit services (“NAS”)
We have not provided any prohibited NAS referred to in Article 5 of EU Regulation 537/2014 as applied
by Section 72 of the Auditors Law of 2017, L.53(I)2017, as amended from time to time (“Law
L.53(I)/2017”).
29
Report on other regulatory and legal requirements (continued)
Other legal requirements
Pursuant to the additional requirements of Law L.53(I)2017, and based on the work undertaken in the
course of our audit, we report the following:
• In our opinion, the management report, the preparation of which is the responsibility of the Board
of Directors, has been prepared in accordance with the requirements of the Companies Law,
Cap. 113, and the information given is consistent with the consolidated and separate financial
statements.
• In the light of the knowledge and understanding of the business and the Group’s and the
Company’s environment obtained in the course of the audit, we have not identified material
misstatements in the management report.
• In our opinion, based on the work undertaken in the course of our audit, the information included
in the corporate governance report in accordance with the requirements of subparagraphs (iv)
and (v) of paragraph 2(a) of Article 151 of the Companies Law, Cap. 113, has been prepared in
accordance with the requirements of the Companies Law, Cap. 113, and is consistent with the
consolidated and separate financial statements.
• In light of the knowledge and understanding of the Group and the Company and its environment
obtained in the course of the audit, we are required to report if we have identified material
misstatements in the corporate governance statement in relation to the information disclosed
for items (iv) and (v) of the subparagraph 2(a) of Article 151 of the Companies Law, Cap. 113.
We have not identified any material misstatements in this respect.
• In our opinion, based on the work undertaken in the course of our audit, the corporate
governance statement includes all information referred to in subparagraphs (i), (ii), (iii), (vi) and
(vii) of paragraph 2(a) of Article 151 of the Companies Law, Cap. 113.
European Single Electronic Format
We have examined the digital files of the European Single Electronic Format (“ESEF”) of the
Company for the year ended 31 December 2021 comprising an XHTML file which includes the
consolidated financial statements for the year then ended and XBRL files with the marking up carried
out by the entity of the consolidated statement of financial position as at 31 December 2021, and the
consolidated statements of profit or loss and other comprehensive income, changes in equity and
cash flows for the year then ended, and all disclosures made in the consolidated financial statements
or made by cross-reference therein to other parts of the annual financial report for the year ended 31
December 2021 that correspond to the elements in Table 1 of Annex II of the European Union (“EU”)
Delegated Regulation 2019/815 of 17 December 2018 of the European Commission, as amended
from time to time (the “ESEF Regulation”) (the “digital files”).
The Board of Directors of the Company is responsible for preparing and submitting the consolidated
financial statements for the year ended 31 December 2021 in accordance with the requirements set
out in the ESEF Regulation.
Consolidated statement of profit or loss and other comprehensive income
for the year ended 31 December 2021
Note 2021 2020
€000 €000
Revenue 5
Cost of sales
(73.777 ) (77.192 )
Gross profit 27.642 28.469
Other operating income 6
Distribution expenses
(4.879 ) (5.413 )
Administrative expenses
(4.169 ) (3.899 )
Other operating expenses
(1.442 ) (1.915 )
Operating profit before net financing cost 7 18.509 18.847
Finance income
Finance expenses
(286 ) (115 )
Net finance cost 9 (174 ) (106 )
Net loss from investing activities 10
(45 ) (157 )
Share of profit from equity-accounted investee 18
Profit before tax 19.017 19.231
Taxation 11
(1.576 ) (2.550 )
Profit for the year 17.441 16.681
Other comprehensive income
Items that will not be reclassified to profit or loss
Equity investments at fair value through other comprehensive income - net
change in fair value
19 14 (40 )
Items that are or may be reclassified to profit or loss
Deferred tax on revaluation of properties
11 (389 ) (293 )
Other comprehensive loss for the year
(375 ) (333 )
Total comprehensive income for the year
Profit attributable to:
Equity holders of the parent 17.441 16.681
Non-controlling interest
Total comprehensive income attributable to:
Equity holders of the parent
Non-controlling interest
Basic and diluted earnings per share (cents) 12 24,2 23,2
The notes on pages 39 to 73 form an integral part of these financial statements.
ANNUAL REPORT ‘21 | 31
Company statement of profit or loss and other comprehensive income
for the year ended 31 December 2021
Note 2021 2020
€000 €000
Revenue 5
101.419 105.661
Cost of sales
(73.777) (77.192)
Gross profit 27.642 28.469
Other operating income 6
1.357 1.605
Distribution expenses
(4.879) (5.413)
Administrative expenses
(4.190) (3.897)
Other operating expenses
(1.442) (1.915)
Operating profit before net financing cost 7 18.488 18.849
Finance income
112 9
Finance expenses
(286) (115)
Net finance cost 9 (174) (106)
Net profit from investing activities 10
525 43
Profit before tax 18.839 18.786
Taxation 11
(1.484) (2.461)
Profit for the year 17.355 16.325
Other comprehensive income
Items that will not be reclassified to profit or loss
Equity investments at fair value through other comprehensive income - net
change in fair value
19 14 (40)
Items that are or may be reclassified to profit or loss
Deferred tax on revaluation of properties
11 (389) (293)
Other comprehensive loss for the year
(375) (333)
Total comprehensive income for the year
16.980 15.992
Basic and diluted earnings per share (cents) 12 24,1 22,7
The notes on pages 39 to 73 form an integral part of these financial statements.
ANNUAL REPORT ‘21 | 32
Consolidated statement of financial position
as at 31 December 2021
Note 2021 2020
€000 €000
Assets
Property, plant and equipment
13 221.837 226.107
Intangible assets
15 12.332 12.363
Investment property
14 5.533 5.583
Right-of-use assets
33 1.583 1.700
Investment in equity-accounted investee
18 1.625 1.560
Financial assets at fair value through other comprehensive income
19 232 218
Total non-current assets
Inventories
20 42.078 25.712
Trade and other receivables
21 6.885 7.630
Cash and cash equivalents
22 - 13.782
Total current assets
Total assets
Equity
Share capital
23 30.932 30.932
Reserves
Total equity attributable to equity holders of the parent
Liabilities
Interest-bearing loans and borrowings 24
Lease liabilities 33
Deferred taxation
25 23.910 25.182
Provisions for liabilities and charges
26 300 300
Total non-current liabilities
Bank overdrafts 22
Interest-bearing loans and borrowings 24
Lease liabilities 33
Tax payable
Trade and other payables
27 6.868 7.371
Total current liabilities
Total liabilities
Total equity and liabilities
ANTONIOS ANTONIOU
GEORGE ST. GALATARIOTIS
}
Directors
These financial statements were approved and authorised for issue by the Board of Directors and signed on its
behalf on 7 April 2022 by:
The notes on pages 39 to 73 form an integral part of these financial statements.
ANNUAL REPORT ‘21 | 33
Company statement of financial position
as at 31 December 2021
Note 2021 2020
€000 €000
Assets
Property, plant and equipment
13 221.837 226.107
Intangible assets
15 12.332 12.363
Investment property
14 5.318 5.368
Right-of-use assets
33 1.583 1.700
Investments in subsidiaries
17 - -
Investment in associate
18 500 500
Financial assets at fair value through other comprehensive income
19 232 218
Total non-current assets
241.802 246.256
Inventories
20 42.078 25.712
Trade and other receivables
21 7.428 8.194
Cash and cash equivalents
22 - 13.782
Total current assets
49.506 47.688
Total assets
291.308 293.944
Equity
Share capital
23 30.932 30.932
Reserves
215.859 215.424
Total equity
246.791 246.356
Liabilities
Interest-bearing loans and borrowings 24
3.801 4.760
Lease liabilities 33
1.542 1.605
Deferred taxation
25 23.910 25.182
Provisions for liabilities and charges
26 300 300
Total non-current liabilities
29.553 31.847
Bank overdrafts 22
6.149 -
Interest-bearing loans and borrowings 24
959 8.181
Lease liabilities 33
115 121
Income tax payable
875 70
Trade and other payables
27 6.866 7.369
Total current liabilities
14.964 15.741
Total liabilities
44.517 47.588
Total equity and liabilities
291.308 293.944
ANTONIOS ANTONIOU
GEORGE ST. GALATARIOTIS
}
Directors
These financial statements were approved and authorised for issue by the Board of Directors and signed on its
behalf on 7 April 2022 by:
The notes on pages 39 to 73 form an integral part of these financial statements.
ANNUAL REPORT ‘21 | 34
Consolidated statement of changes in equity
for the year ended 31 December 2021
Share
capital
Share
premium
Revaluation
reserve
Fair value
reserve
Retained
earnings
Total equity
attributable
to equity
holders of
the parent
Non-
controlling
interest
Total
equity
€000 €000 €000 €000 €000 €000 €000 €000
Balance at 1 January 2020 30.932 45.388 36.830 (373 ) 128.011 240.788 - 240.788
Comprehensive income
Profit for the year - - - - 16.681 16.681 - 16.681
Other comprehensive income
Other comprehensive loss for the year
Total comprehensive income for the year
Transactions with owners of the Company
Contributions and distributions
Dividends (note 29) - - - - (10.071 ) (10.071 ) - (10.071 )
Transfer - - (1.034 ) - 1.034 - - -
Balance at 31 December 2020 / 1 January 2021 30.932 45.388 35.503 (413 ) 135.655 247.065 - 247.065
Comprehensive income
Profit for the year
Other comprehensive income
Other comprehensive loss for the year
Total comprehensive income for the year
Transactions with owners of the Company
Contributions and distributions
Dividends (note 29)
Transfer
Balance at 31 December 2021 30.932 45.388 34.160 (399 ) 137.505 247.586 - 247.586
The notes on pages 39 to 73 form an integral part of these financial statements.
ANNUAL REPORT ‘21 | 35
Company statement of changes in equity
for the year ended 31 December 2021
Share
capital
Share
premium
Revaluation
reserve
Fair value
reserve
Retained
earnings
Total
equity
€000 €000 €000 €000 €000 €000
Balance at 1 January 2020 30.932 45.388 36.942 (373) 127.546 240.435
Comprehensive income
Profit for the year - - - - 16.325 16.325
Other comprehensive income
Other comprehensive loss for the year
- - (293) (40) - (333)
Total comprehensive income for the year
- - (293) (40) 16.325 15.992
Transactions with owners of the Company
Contributions and distributions
Dividends (note 29) - - - - (10.071) (10.071)
Transfer - - (1.034) - 1.034 -
Balance at 31 December 2020 / 1 January 2021 30.932 45.388 35.615 (413) 134.834 246.356
Comprehensive income
Profit for the year - - - - 17.355 17.355
Other comprehensive income
Other comprehensive loss for the year
- - (389) 14 - (375)
Total comprehensive income for the year
- - (389) 14 17.355 16.980
Transactions with owners of the Company
Contributions and distributions
Dividends (note 29) - - - - (16.545) (16.545)
Transfer - - (954) - 954 -
Balance at 31 December 2021 30.932 45.388 34.272 (399) 136.598 246.791
Companies, which do not distribute at least 70% of their profits after tax, as defined by the Special Defence Contribution Law of the Republic of Cyprus during the two years after the end of the year
of assessment to which the profits refer, will be deemed to have distributed this amount as dividend on 31 December of the second year. The amount of the deemed dividend distribution is reduced
by any actual dividend already distributed by 31 December of the second year for the year to which the profits refer. Based on the amount of the deemed dividend distribution, the Company pays a
special defence contribution on behalf of the shareholders at a rate of 17% when the entitled shareholders are natural tax residents of Cyprus and have their residence (domicile) in Cyprus. In
addition, effective 1 March 2019 (deemed distribution of dividends for the year 2017), the Company pays a General Health System (GHS) contribution on behalf of the shareholders at a rate of 2,65%
(1,70% for the period between 1 March 2019 to 28 February 2020), when the entitled shareholders are natural tax residents of Cyprus, regardless of their domicile.
The notes on pages 39 to 73 form an integral part of these financial statements.
ANNUAL REPORT ‘21 | 36
Consolidated statement of cash flows
for the year ended 31 December 2021
Note 2021 2020
€000 €000
Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation and amortisation charges
Unrealised exchange (loss)/profit
(112 ) 47
Change in fair value of investment property 14
Interest income 9
Dividend income 10
(5 ) (9 )
Interest expense 9, 33
Share of profit of equity-accounted investee 18
(727 ) (647 )
Loss/(gain) on disposal of property, plant and equipment 71 (16 )
Provision for bad debts
Bad debts recovered and impairment movement
(226 ) (272 )
Income tax expense 11
Operating profit before changes in working capital and provisions
Changes in:
Trade and other receivables
Inventories
(16.366 ) 5.217
Trade and other payables
(502 ) (1.046 )
Cash generated from operating activities 16.762 36.114
Interest paid
(289 ) (144 )
Tax paid
(2.340 ) (1.476 )
Net cash inflow from operating activities 14.133 34.494
Cash flows to investing activities
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of investment property
Interest received
Dividends received
Acquisition of property, plant and equipment 13
(9.925 ) (10.886 )
Acquisition of intangibles 15
Acquisition of investment property 14
Net cash used in investing activities (9.334 ) (10.275 )
Cash flows to financing activities
Proceeds from new loans raised
Repayment of loans
(8.181 ) (8.366 )
Lease payments 33
(115 ) (7 )
Dividends paid 29
(16.545 ) (10.071 )
Net cash used in financing activities (24.841 ) (14.402 )
Effect of exchange rate fluctuations on cash held
Net (decrease)/increase in cash and cash equivalents (19.931 ) 9.776
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December 22 (6.149 ) 13.782
13, 15, 33
The notes on pages 39 to 73 form an integral part of these financial statements.
ANNUAL REPORT ‘21 | 37
Company statement of cash flows
for the year ended 31 December 2021
Note 2021 2020
€000 €000
Cash flows from operating activities
Profit for the year
17.355 16.325
Adjustments for:
Depreciation and amortisation charges
14.258 13.939
Unrealised exchange (loss)/profit
(112) 47
Change in fair value of investment property 14
50 166
Interest income 9
- (9)
Dividend income 10
(575) (209)
Interest expense 9, 33
332 68
Loss/(gain) on disposal of property, plant and equipment 71 (16)
Provision for bad debts
- 102
Bad debts recovered and impairment movement
(226) (272)
Income tax expense 11
1.484 2.461
Operating profit before changes in working capital and provisions
32.637 32.602
Changes in:
Trade and other receivables
993 (660)
Inventories
(16.366) 5.217
Trade and other payables
(502) (1.045)
Cash generated from operations 16.762 36.114
Interest paid (289) (144)
Tax paid (2.340) (1.476)
Net cash inflow from operating activities 14.133 34.494
Cash flows to investing activities
Proceeds from disposal of property, plant and equipment
16 22
Proceeds from disposal of investment property
- 421
Interest received
- 9
Dividends received
575 209
Acquisition of property, plant and equipment 13
(9.925) (10.886)
Acquisition of intangibles 15
- (21)
Acquisition of investment property 14
- (29)
Net cash used in investing activities (9.334) (10.275)
Cash flows to financing activities
Proceeds from new loans raised
- 4.042
Repayment of loans
(8.181) (8.366)
Lease payments 33
(115) (7)
Dividends paid 29
(16.545) (10.071)
Net cash used in financing activities (24.841) (14.402)
Effect of exchange rate fluctuations on cash held
111 (41)
Net (decrease)/increase in cash and cash equivalents (19.931) 9.776
Cash and cash equivalents at 1 January
13.782 4.006
Cash and cash equivalents at 31 December 22 (6.149) 13.782
13, 15, 33
The notes on pages 39 to 73 form an integral part of these financial statements.
ANNUAL REPORT ‘21 | 38
Notes to the financial statements
for the year ended 31 December 2021
1 Reporting entity and principal activities
Principal activities
2 Basis of preparation
Statement of compliance
Basis of measurement
Functional and presentation currency
Use of estimates and judgements
a. Income taxes
"Τσιμεντοποιία Βασιλικού Δημόσια Εταιρεία Λίμιτεδ", translated in English as "Vassiliko Cement Work s Public Compan y Ltd " (the
'Company') is a company domiciled in Cyp rus and is a public compan y in accordance with the requirements of the Cyp rus Companies Law,
The consolidated financial statements for the year ended 31 December 2021 consist of the financial statements of the Company and its
subsidiaries (together referred to as the 'Group') and the Group's interest in associates.
The Group and the Company's financial statements (the "financial statements") were authorised for issue by the Board of Directors on 7
April 2022.
The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the
European Union ("EU"). In addition, the financial statements have been prepared in accordance with the requirements of the Cyprus
Companies Law, Cap. 113, and the Cyprus Stock Exchange Law and Regulations.
Significant judgement is required in determining the provision for income taxes. There are transactions and calculations for which the
ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit
issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the
amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such
determination is made.
The financial statements have been prepared on the historical cost basis, modified to include the revaluation to fair value of land, financial
assets at fair value through other comprehensive income and investment property.
The financial statements as at and for the year ended 31 December 2021 are presented in Euro (€), which is the Company's functional
currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.
The preparation of the financial statements in accordance with IFRS requires from management the exercise of judgement, to make
estimates and assumptions that influence the application of accounting principles and the related amounts of assets and liabilities, income
and expenses. The estimates and underlying assumptions are based on historical experience and various other factors that are deemed to
be reasonable based on knowledge available at that time. Actual results may deviate from such estimates.
The estimates and underlying assumptions are reviewed on a continuous basis. Revisions in accounting estimates are recognised in the
period during which the estimate is revised, if the estimate affects only that period, or in the period of the revision and future periods, if the
revision affects the present as well as future periods.
In particular, information about significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have
the most significant effect on the amount recognised in the financial statements are described below:
ANNUAL REPORT ‘21 | 39
b. Measurement of fair values
c. Provision for bad and doubtful debts
d. Impairment of investments in subsidiaries/associates
e. Impairment of goodwill
A number of the Group's accounting policies and disclosures require the measurement of fair values, for both financial and non-financial
assets and liabilities. The Group has an established control framework with respect to the measurement of fair values.
This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair
values, and reports directly to the Chief Financial Officer. The valuation team regularly reviews significant unobservable inputs and valuation
adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team
assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of IFRS,
including the level in the fair value hierarchy in which such valuations should be classified. Significant valuation issues are reported to the
Group's Audit Committee.
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are
categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
- Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities.
- Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices).
- Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value
measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire
measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has
occurred.
The Group reviews its trade and other receivables for evidence of their recoverability. Such evidence includes the customer's payment
record and the customer's overall financial position. If indications of irrecoverability exist, the recoverable amount is estimated and a
respective provision for bad and doubtful debts is made. The amount of the provision is charged through the profit or loss. The review of
credit risk is continuous and the methodology and assumptions used for estimating the provision are reviewed regularly and adjusted
accordingly.
The Company periodically evaluates the recoverability of investments in subsidiaries/associates whenever indicators of impairment are
present. Indicators of impairment include such items as declines in revenues, earnings or cash flows or material adverse changes in the
economic or political stability of a particular country, which may indicate that the carrying amount of an asset is not recoverable. If facts and
circumstances indicate that investment in subsidiaries/associates may be impaired, the estimated future undiscounted cash flows
associated with these subsidiaries/associates would be compared to their carrying amounts to determine if a write down to fair value is
necessary.
Determining whether goodwill is impaired requires an estimation of the value-in-use of the cash-generating units of the Company on which
the goodwill has been allocated. The value-in-use calculation requires the Company to estimate the future cash flows expected to arise from
the cash-generating units using a suitable discount rate in order to calculate the present value.
ANNUAL REPORT ‘21 | 40
3 Significant accounting policies
New and amended IFRSs and interpretations:
A one-year extension to the optional practical expedient for COVID-19 related rent concessions under IFRS 16 has been published by the
IASB. This amendment is a response to the ongoing economic challenges resulting from the COVID-19 coronavirus pandemic.
Under that practical expedient, a lessee is not required to assess whether eligible rent concessions (such as rent holidays and temporary
rent reductions) are lease modifications, if they are a direct consequence of COVID-19 and meet certain conditions, instead accounting for
them in accordance with other applicable guidance. The amendment does not affect lessors.
The amendments to IFRS 3 relate to an update of a reference to the Conceptual Framework of Financial Reporting without changing the
accounting requirements for business combinations.
As from 1 January 2021, the Group and the Company adopted all changes to IFRSs as adopted by the EU which are relevant to its
operations. This adoption did not have a material effect on the financial statements.
i. New IFRSs, Amendments to IFRSs and Interpretations adopted by the EU
The following accounting policies have been applied consistently to all years presented in these financial statements. The accounting
policies have been applied consistently by all Group entities.
The following New IFRSs, Amendments to IFRSs and Interpretations have been issued by the International Accounting Standards Board
(IASB) but are not yet effective for annual periods beginning on 1 January 2021. Those which may be relevant to the Group and the
Company are set out below. The Group and the Company do not plan to adopt these New IFRSs, Amendments to IFRSs and
Interpretations early.
• IFRS 16 “Leases” (Amendments): COVID-19-Related Rent Concessions beyond 30 June 2021 (effective for annual periods
beginning on or after 1 April 2021)
• IFRS 3 "Business Combinations" (Amendments) (effective for annual periods beginning on or after 1 January 2022)
• IAS 16 "Property, Plant and Equipment" (Amendments) (effective for annual periods beginning on or after 1 January 2022)
The amendments to IAS 16 prohibit a company from deducting, from the cost of property, plant and equipment, amounts received from
selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales
proceeds together with the costs of producing those items in profit or loss.
• IAS 37 "Provisions, Contingent Liabilities and Contingent Assets" (Amendments) (effective for annual periods beginning on or
after 1 January 2022)
The amendments to IAS 37 specify what is included in the costs to fulfil a contract when assessing whether a contract is onerous.
• Annual Improvements of IFRSs 2018-2020 (effective for annual periods beginning on or after 1 January 2022)
Annual Improvements contain minor amendments to IFRS 1 First-time Adoption of IFRS, IFRS 9 Financial Instruments, IAS 41 Agriculture
and the Illustrative Example 13 of IFRS 16 Leases.
• IAS 1 "Presentation of Financial Statements" (Amendments) and IFRS Practice Statement 2 Making Materiality Judgements:
Disclosure of Accounting Policies (effective for annual periods beginning on or after 1 January 2023)
The amendments to IAS 1 and the update to IFRS Practice Statement 2 aim to help companies on the application of materiality to the
disclosure of accounting policies. The key amendments to IAS 1 include: (1) requiring companies to disclose their material accounting
policies rather than their significant accounting policies, (2) clarifying that accounting policies related to immaterial transactions, other events
or conditions are themselves immaterial and as such need not be disclosed, and (3) clarifying that not all accounting policies that relate to
material transactions, other events or conditions are themselves material to a company’s financial statements. The amendments to IFRS
Practice Statement 2 are to include guidance and two additional examples on the application of materiality to accounting policy disclosures.
The amendments are consistent with the refined definition of material i.e. “Accounting policy information is material if, when considered
together with other information included in an entity’s financial statements, it can reasonably be expected to influence decisions that the
primary users of general-purpose financial statements make on the basis of those financial statements”.
ANNUAL REPORT ‘21 | 41
The Board of Directors expects that the adoption of these standards or interpretations in future periods will not have a material effect on the
financial statements.
• IAS 1 "Presentation of Financial Statements" (Amendments): Classification of Liabilities as Current or Non-current (effective for
annual periods beginning on or after 1 January 2023)
ii. IFRSs, Amendments to IFRSs and Interpretations not adopted by the EU
• IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors" (Amendments): Definition of Accounting Estimates
(effective for annual periods beginning on or after 1 January 2023)
The amendments to IAS 8 are issued to clarify how companies should distinguish changes in accounting policies from changes in
accounting estimates, with a primary focus on the definition of and clarifications on accounting estimates. The amendments introduce a new
definition for accounting estimates: clarifying that they are monetary amounts in the financial statements that are subject to measurement
uncertainty. The amendments also clarify the relationship between accounting policies and accounting estimates by specifying that a
company develops an accounting estimate to achieve the objective set out by an accounting policy. Developing an accounting estimate
includes both: (1) selecting a measurement technique (estimation or valuation technique), and (2) choosing the inputs to be used when
applying the chosen measurement technique. The effects of changes in such inputs or measurement techniques are changes in accounting
estimates. The definition of accounting policies remains unchanged.
• IFRS 10 "Consolidated Financial Statements" (Amendments) and IAS 28 "Investments in Associates and Joint Ventures"
(Amendments): Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (effective date postponed
indefinitely; early adoption continues to be permitted)
The amendments address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28, in dealing with the
sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full
gain or loss is recognised when a transaction involves a business (as defined in IFRS 3). A partial gain or loss is recognised when a
transaction involves assets that do not constitute a business. In December 2015, the IASB postponed the effective date of this amendment
indefinitely pending the outcome of its research project on the equity method of accounting.
IASB has amended IAS 1 to promote consistency in application and clarify the requirements on determining if a liability is current or non-
current. Under existing IAS 1 requirements, companies classify a liability as current when they do not have an unconditional right to defer
settlement of the liability for at least twelve months after the end of the reporting period. As part of its amendments, the IASB has removed
the requirement for a right to be unconditional and instead, now requires that a right to defer settlement must have substance and exist at
the end of the reporting period.
• IAS 12 "Income Taxes" (Amendments): Deferred Tax related to Assets and Liabilities arising from a Single Transaction (effective
for annual periods beginning on or after 1 January 2023)
Targeted amendments to IAS 12 clarify how companies should account for deferred tax on certain transactions (e.g. leases and
decommissioning provisions). The amendments narrow the scope of the initial recognition exemption (IRE) so that it does not apply to
transactions that give rise to equal and offsetting temporary differences. As a result, companies will need to recognise a deferred tax asset
and a deferred tax liability for temporary differences arising on initial recognition of a lease and a decommissioning provision.
ANNUAL REPORT ‘21 | 42
Basis of consolidation
i. Business combinations
ii. Acquisitions of non-controlling interests
iii. Subsidiaries
iv. Loss of control
On the loss of control, the Group de-recognises the assets and liabilities of the subsidiary, any non-controlling interests and the other
components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the
Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts generally are
recognised in profit or loss.
• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is
transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its
activities. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable.
Transactions costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a
business combination are expensed as incurred.
Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore no goodwill
is recognised as a result. Adjustments to non-controlling interests arising from transactions that do not involve the loss of control are based
on a proportionate amount of the net assets of the subsidiary.
Subsidiaries are entities controlled by the Group. Control exists where the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee. The financial statements of
subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring them in line with the accounting policies of the
Group.
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interests in the acquiree; plus
• if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree; less
The Group measures goodwill at the acquisition date as:
ANNUAL REPORT ‘21 | 43
v. Investments in associates (equity-accounted investees)
vi. Transactions eliminated on consolidation
Property, plant and equipment
i. Recognition and measurement
Associates are those entities in which the Group has significant influence but no control or joint control, over the financial and operating
policies. Significant influence is the power to participate in the financial and operating policy decisions of the investee. Investments in
associates are initially recognised at cost, which includes transactions costs, and are accounted for using the equity method.
The results and assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method of
accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-
current Assets Held for Sale and Discontinued Operations. Under the equity method, an investment in an associate is initially recognised in
the consolidated statement of financial position at cost and adjusted thereafter to recognise the Group's share of the profit or loss and other
comprehensive income of the associate. When the Group's share of losses of an associate exceeds the Group's interest in that associate
(which includes any long-term interests that, in substance, form part of the Group's net investment in the associate), the Group discontinues
recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive
obligations or made payments on behalf of the associate.
Any excess of the cost of acquisition over the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities
of an associate recognised at the date of acquisition is recognised as goodwill, which is included within the carrying amount of the
investment. Any excess of the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost
of acquisition, after reassessment, is recognised immediately in profit or loss.
The guidance in IAS 28 is applied to determine whether it is necessary to recognise any impairment loss with respect to the Group's
investment in an associate. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in
accordance with IAS 36 Impairment of Assets as a single asset by comparing its recoverable amount (higher of value-in-use and fair value
less costs to sell) with its carrying amount. Any impairment loss recognised forms part of the carrying amount of the investment. Any
reversal of that impairment loss is recognised in accordance with IAS 36 to the extent that the recoverable amount of the investment
subsequently increases.
When a group entity transacts with its associate, profits and losses resulting from the transactions with the associate are recognised in the
Group's consolidated financial statements only to the extent of interests in the associate that are not related to the Group.
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in
preparing the consolidated financial statements. Unrealised gains arising from transactions with equity-accounted investees are eliminated
against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised
gains, but only to the extent that there is no evidence of impairment.
Land is carried at fair value, based on valuations by external independent valuers. Revaluations are carried out with sufficient regularity
such that the carrying amount does not differ materially from that which would be determined using fair value at the reporting date. All other
property, plant and equipment are stated at historical cost less accumulated depreciation and any accumulated impairment losses.
Properties under construction are carried at cost, less any recognised impairment loss. Cost includes professional fees and borrowing costs
capitalised in accordance with the Group's accounting policy. Depreciation of these assets, on the same basis as other property assets,
commences when the assets are ready for their intended use.
Increases in the carrying amount arising on revaluation of land are credited to other comprehensive income. Decreases that offset previous
increases of the same asset are charged against that reserve; all other decreases are charged to profit or loss. Each year the difference
between depreciation based on the revalued carrying amount of the asset (the depreciation charged to profit or loss) and depreciation
based on the asset's original cost is transferred from fair value reserves to retained earnings.
ANNUAL REPORT ‘21 | 44
ii. Reclassification to investment property
iii. Subsequent expenditure
iv. Depreciation
Buildings 20 – 50 years
Vassiliko Port 50 years (term of lease)
Machinery, plant and equipment 4 – 25 years
Photovoltaic Park 20 years
Intangible assets
i. Goodwill
ii. Other intangible assets
iii. Subsequent expenditure
iv. Amortisation
Computer software
3 years
When the use of a property changes from owner-occupied to investment property, the property is remeasured to fair value and reclassified
as investment property. Any gain arising on remeasurement is recognised in profit or loss to the extent that it reverses a previous
impairment loss on the specific property, with any remaining gain recognised in other comprehensive income and presented in the
revaluation reserve in equity. Any loss is recognised immediately in profit or loss.
Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with the expenditure will flow to
the Group. Ongoing repairs and maintenance is expensed as incurred.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component. Land is not
depreciated.
Leased assets are depreciated over the shorter of the lease term and their useful lives, unless it is reasonably certain that the Group will
obtain ownership by the end of the lease term.
Items of the property, plant and equipment are depreciated from the date that they are installed and are ready for use, or in respect of
internally constructed assets, from the date that the assets are completed and are ready for use.
The estimated useful lives are as follows:
Goodwill is measured at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is tested annually
for impairment (note 15). Goodwill on acquisition of associates is included in investments in associates.
Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and
any accumulated impairment losses.
Expenditure on internally generated goodwill and brands is recognised in profit or loss as incurred.
All business combinations are accounted for by applying the acquisition method. Goodwill represents amounts arising on acquisition of
subsidiaries and associates. Goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable
assets of the acquired undertaking at the date of acquisition.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
Subsequent expenditure on intangible assets is capitalised only when it increases the future economic benefits embodied in the specific
asset to which it relates. All other expenditure is expensed as incurred.
Amortisation is charged to profit or loss on a straight-line basis over the estimated useful lives of intangible assets unless such lives are
indefinite. Goodwill and intangible assets with an indefinite useful life are systematically tested for impairment at each reporting date. Other
intangible assets are amortised from the date they are available for use. The estimated useful lives are as follows:
ANNUAL REPORT ‘21 | 45
Investments
Investment properties
Inventories
Cash and cash equivalents
Investment properties are properties which are held either to earn rental income, or for capital appreciation, or for both, but not for sale in
the ordinary course of business, or used for the production or supply of goods or services, or for administrative purposes. Investment
properties are carried at fair value less cost to sell, representing open market value determined annually by external valuers. An external,
independent valuer, having an appropriate recognised professional qualification and recent experience in the location and category of
property being valued, values the portfolio at regular intervals. The fair values are based on market values, being the estimated amount for
which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after
proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.
Any gain or loss arising from a change in fair value is recognised in profit or loss. Rental income from investment property is accounted for
as described in accounting policy for "Revenue".
When an item of property, plant and equipment is transferred to investment property following a change in its use, any differences arising at
the date of transfer between the carrying amount of the item immediately prior to transfer and its fair value is recognised directly in equity, if
it is a gain. Upon disposal of the item the gain is transferred to retained earnings. Any loss arising in this manner is recognised immediately
in profit or loss.
If an investment property becomes owner-occupied, it is reclassified as property, plant and equipment and its fair value at the date of
reclassification becomes its cost for accounting purposes of subsequent recording. When the Group begins to redevelop an existing
investment property for continued future use as investment property, the property remains an investment property, which is measured based
on fair value model, and is not reclassified as property, plant and equipment during the redevelopment.
Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary
course of business, less the estimated costs of completion and selling expenses.
The cost of raw materials, fuels, spare parts and other consumables is based on the average cost and includes expenditure incurred in
acquiring the inventories and bringing them to their existing location and condition. In the case of manufactured inventories and work in
progress, cost includes an appropriate share of production overheads based on normal operating capacity.
Cash and cash equivalents comprise cash in hand and at bank and call deposits. Bank overdrafts that are repayable on demand and form
an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose only of the
consolidated statement of cash flows.
Emission rights owned by the Group are reported under inventories. Emission rights granted free of charge are initially measured at a
nominal value of zero. Emission rights acquired for consideration are initially accounted for at cost and are subsequently valued at the lower
of cost and net realizable value.
ANNUAL REPORT ‘21 | 46
Impairment of non-financial assets
Employee benefits
i. Defined contribution plans
ii. Termination benefits
Provisions
Leases
• the Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
• the Group has the right to direct the use of the asset. The Group has this right when it has the decision-making rights that are most
relevant to changing how and for what purpose the asset is used. In rare cases where the decision about how and for what purpose the
asset is used is predetermined, the Group has the right to direct the use of the asset if either:
- the Group has the right to operate the asset; or
- the Group designed the asset in a way that predetermines how and for what purpose it will be used.
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and has
no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognised as an
employee benefit expense in profit or loss in the periods during which related services are rendered by employees. Prepaid contributions
are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. Contributions to a defined
contribution plan that are due more than 12 months after the end of the period in which the employees render the service are discounted to
their present value.
Termination benefits are recognised as an expense when the Group is demonstrably committed, without realistic possibility of withdrawal, to
a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an
offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the Group
has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated
reliably. If benefits are payable more than 12 months after the reporting date, then they are discounted to their present value.
An impairment loss is recognised if the carrying amount of an asset or cash-generating unit exceeds its recoverable amount. Impairment
losses are recognised in profit or loss.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated
to cash-generating units (group of units) and then, to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata
basis.
• the contract involves the use of an identified asset - this may be specified explicitly or implicitly, and should be physically distinct or
represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is
not identified;
Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past events, it is probable that an
outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. If the effect is material,
provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the
time value of money and, where appropriate, the risks specific to the liability.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the Group assesses whether:
At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to
each lease component on the basis of their relative stand-alone prices. However, for the leases of land and buildings in which it is a lessee,
the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease
component.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset's
carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no
impairment loss had been recognised.
The carrying amounts of the Group’s assets (other than investment property, inventories and deferred tax assets) that have an indefinite
useful life are not subject to amortisation and are reviewed at each reporting date to determine whether there is any indication of
impairment. If any such indication exists, the asset’s recoverable amount is estimated.
For goodwill, assets that have an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is
estimated at each year end date.
ANNUAL REPORT ‘21 | 47
The Group as lessee
Short-term leases and leases of low-value assets
Financial instruments
i. Recognition and initial measurement
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain
adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
• fixed payments, including in substance fixed payments;
• variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
• amounts expected to be payable under a residual value guarantee; and
• the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period
if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is
reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease
payments arising from a change in an index or rate, if there is a change in the Group's estimate of the amount expected to be payable under
a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is
recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted
using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Generally,
the Group uses its incremental borrowing rate as the discount rate.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured
at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date,
plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset
or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of the right-of-use assets are determined on
the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any,
and adjusted for certain remeasurements of the lease liability.
The Group presents its right-of-use assets that do not meet the definition of investment property separately in the statement of financial
position.
The lease liabilities are presented separately in the statement of financial position.
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases and leases of low value assets (i.e. IT
equipment, office equipment etc). The Group recognises the lease payments associated with these leases as an expense on a straight-line
basis over the lease term.
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair
value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or
issue. A trade receivable without a significant financing component is initially measured at the transaction price.
ANNUAL REPORT ‘21 | 48
ii. Classification and subsequent measurement
Financial assets
Financial assets - Subsequent measurement and gains and losses:
Financial assets at amortised cost
Equity investments at FVOCI
Financial liabilities – Classification, subsequent measurement and gains and losses
Interest-bearing loans and borrowings
Trade and other payables
Interest-bearing loans and borrowings are recognised initially at fair value plus any direct attributable transaction costs. Subsequently they
are measured at amortised cost using the effective interest method.
Trade and other payables are stated at their nominal values.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
On initial recognition, a financial asset is classified as measured at: amortised cost; Fair Value through Other Comprehensive income
(FVOCI) debt investment; Fair Value through Other Comprehensive income (FVOCI) equity investment; or FVTPL.
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing
financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in
the business model.
-it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
- its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in
the investment's fair value in OCI. This election is made on an investment by investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all
derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the
requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise.
These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by
impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on
derecognition is recognised in profit or loss.
These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly
represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassified to
profit or loss.
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as
held for trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value
and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently
measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in
profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
The financial liabilities of the Group are measured as follows:
ANNUAL REPORT ‘21 | 49
iii. Impairment
Financial instruments
Credit impaired financial assets
Presentation of allowance for ECL in the statement of financial position
Write off
Measurement of ECLs
ECLs are a probability weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the
difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a
shorter period if the expected life of the instrument is less than 12 months).
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.
-significant financial difficulty of the borrower or issuer;
-a breach of contract such as a default or being more than 90 days past due;
-the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;
-it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
-the disappearance of an active market for a security because of financial difficulties.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. For debt
investments the loss allowance is measured at FVTPL and recognised through profit and loss in other comprehensive income.
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset
in its entirety or a portion thereof. For individual customers, the Group has a policy of writing off the gross carrying amount when the
financial asset is 180 days past due based on historical experience of recoveries of similar assets. For corporate customers, the Group
individually makes an assessment with respect to the timing and amount of write off based on whether there is a reasonable expectation of
recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be
subject to enforcement activities in order to comply with the Group's procedures for recovery of amounts due.
At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt securities at FVOCI are credit
impaired. A financial asset is 'credit impaired' when one or more events that have a detrimental impact on the estimated future cash flows of
the financial asset have occurred.
The Group recognises loss allowances for Expected Credit Loss ("ECL") on financial assets measured at amortised cost.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for bank balances for which credit risk (i.e. the risk of
default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition, which are
measured at 12-month ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs,
the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both
quantitative and qualitative information and analysis, based on the Group's historical experience and informed credit assessment and
including forward looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 180 days past due.
The Group considers a financial asset to be in default when:
- the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising
security (if any is held); or
-the financial asset is more than 365 days past due.
The Group considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of
'investment grade'.
Evidence that a financial asset is credit impaired includes the following observable data:
ANNUAL REPORT ‘21 | 50
Derecognition of financial assets and liabilities
i. Financial assets
ii. Financial liabilities
Offsetting financial instruments
Revenue recognition
Contracts identification
The transaction price
Identification of the performance obligations
Performance obligations and revenue recognition policies
i. Goods sold
Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable,
net of returns, trade discounts and volume rebates.
The Group assesses whether contracts that involve the provision of a range of goods and/or services contain one or more performance
obligations (that is, distinct promises to provide a service) and allocates the transaction price to each performance obligation identified on
the basis of its stand alone selling prices. A good or service that is promised to a customer is distinct if the customer can benefit from the
good or service, either on its own or together with other resources that are readily available to the customer (that is the good or service is
capable of being distinct) and the Group's promise to transfer the good or service to the customer is separately identifiable from other
promises in the contract (that is, the good or service is distinct within the context of the contract).
The Group derecognises a financial asset (or, where applicable a part of a financial asset or part of a Group of similar financial assets)
when:
·the contractual rights to receive cash flows from the asset have expired;
Revenue from the sale of goods is recognised in profit or loss at the point in time when the Company satisfies its performance obligation by
transferring control over the promised goods to the buyer and the buyer has accepted the goods. No revenue is recognised if there are
significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.
· the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material
delay to a third party under a 'pass through' arrangement; or
· the Group transfers the rights to receive the contractual cash flows from the asset and either (a) has transferred substantially all the
risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
When an asset recognised in its statement of financial position, is transferred, but the Group retains either all or substantially all of the risks
and rewards of the transferred assets, the transferred assets are not derecognised.
Revenue represents the amount of consideration to which the Group expects to be entitled in exchange for transferring the promised goods
or services to the customer, excluding amounts collected on behalf of third parties (for example, value added taxes).
The Group does not have any material contracts where the period between the transfer of the promised goods or services to the customer
and payment by the customer exceeds one year. As a consequence, the Group elects to use the practical expedient and does not adjust
any of the transaction prices for the time value of money.
The Group recognises revenue when the parties have approved the contract (in writing, orally or in accordance with other customary
business practices) and are committed to perform their respective obligations, the Group can identify each party's rights and the payment
terms for the goods or services to be transferred, the contract has commercial substance (i.e. the risk, timing or amount of the Group's
future cash flows is expected to change as a result of the contract), it is probable that the Group will collect the consideration to which it will
be entitled in exchange for the goods or services that will be transferred to the customer and when specific criteria have been met for each
of the Group's contracts with customers.
Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position when, and
only when, the Group has a currently enforceable legal right to offset the recognised amounts and it intends to settle them on a net basis, or
to realise the asset and settle the liability simultaneously. This is not generally the case with master netting agreements, and the related
assets and liabilities are presented gross in the consolidated statement of financial position.
Any interest in such derecognised financial assets that is created or retained by the Group is recognised as a separate asset or liability.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.
The Group also derecognises a financial liability when it is replaced by another from the same lender on substantially different terms, or
when the terms of the liability are substantially modified, and the cash flows of the modified liability are substantially different, in which case
a new financial liability based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any
non cash assets transferred or liabilities assumed) is recognised in profit or loss.
ANNUAL REPORT ‘21 | 51
ii. Sale of Electricity
iii. Port income
Revenue from port is generated from services provided to vessels and cargo owners and is recognised in other operating income.
iv. Rental income
v. Finance income
vi. Dividend income
Expenses
i. Financing costs
ii. Foreign currency transactions
Functional currencies
Transactions and balances
Tax
i. Current tax
ii. Deferred tax
Share capital and share premium
Dividends
Related party transactions
Rental income from investment property is recognised in profit or loss on a straight-line basis over the term of the lease.
Finance income includes interest income which is recognised on a time proportion basis using the effective interest method.
Items included in the financial statements of each Group entity are measured using the currency of the primary economic environment in
which each entity operates ('the functional currency').
Foreign currency transactions are translated into respective functional currencies of the Group companies using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation at the reporting date exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional
currency at the exchange rate when the fair value is determined.
Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business
combination, or items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using the tax rates and laws that have been
enacted, or substantially enacted, by the reporting date. Current tax includes any adjustments to tax payable in respect of previous periods
Ordinary share capital is classified as equity. The difference between the fair value of the consideration received by the Company and the
nominal value of the share capital being issued is taken to the share premium account.
Dividend distribution to the Company's shareholders is recognised in the Company's financial statements in the year in which they are
approved by the Company's shareholders.
Dividend income is recognised in profit or loss on the date on which the Group’s right to receive payment is established, which in the case of
quoted securities is usually the ex-dividend date.
Finance costs comprise interest expense on borrowings and bank overdrafts, foreign exchange losses, and bank charges. Interest expense
and other costs on borrowings to finance construction or production of qualifying assets are capitalised, during the period of time that is
required to complete and prepare the asset for its intended use. All other finance costs, excluding bank charges, are recognised to profit or
loss using the effective interest method. Bank charges are recognised in profit or loss in the period which incurred.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable profit, and is accounted for using the statement of financial position liability
method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Revenue from sale of electricity is generated by the Photovoltaic Park at monthly avoidance costs, net of VAT.
A party is considered affiliated if it has the ability to control the other party or to exert significant influence over the other party's financial and
operational decisions. Related party transactions are considered to be transfers of assets or liabilities between related parties, regardless of
whether there is a charge
ANNUAL REPORT ‘21 | 52
Events after the reporting period
Comparatives
4 Operating segments
5 Revenue
Revenue analysis: 2021 2020 2021 2020
€000 €000 €000 €000
Cement products 99.516 104.309 99.516 104.309
Sale of electricity
1.803 1.238 1.803 1.238
Other
100 114 100 114
101.419 105.661 101.419 105.661
6 Other operating income
2021 2020 2021 2020
€000 €000 €000 €000
Income from Vassiliko Port 856 923 856 923
(71) 16 (71) 16
Other
572 666 572 666
1.357 1.605 1.357 1.605
7 Operating profit before financing costs
2021 2020 2021 2020
This is stated after charging: €000 €000 €000 €000
Staff costs (note 8) 12.111 11.730 12.111 11.730
Directors' remuneration as directors
253 252 253 252
Directors' remuneration as executives
364 375 364 375
Depreciation of property, plant and equipment
14.227 13.865 14.227 13.865
Amortisation of intangible assets
31 74 31 74
Independent auditors' remuneration for the statutory audit
63
56
62
55
Independent auditors’ remuneration for tax advice
7 6 7 6
Independent auditors’ remuneration for other non-audit services
1 1 1 1
Group
Group
Company
Company
(Loss)/gain on disposal of property, plant and equipment
Following an assessment to identify operating segments, the Company has identified as main segment that of cement operation. Other
activities that give rise to income and expenses are only incidental to the main operation of the Company or the value of either their assets
or income are below the quantitative thresholds of IFRS 8 to form separate reportable operating segments individually or in their aggregate
value.
When necessary, comparative figures have been adjusted to conform to changes in presentation in the current year.
Group
Company
Assets and liabilities are adjusted for events that occurred after the reporting period up to the date of approval of the financial statements by
the Board of Directors, when these events provide additional information for the valuation of existing events at the reporting date or indicate
that the going concern status is not appropriate.
ANNUAL REPORT ‘21 | 53
8 Staff costs
2021 2020 2021 2020
€000 €000 €000 €000
Wages and salaries 10.167 9.919 10.167 9.919
Social insurance contributions
761 730 761 730
Provident and medical fund contributions (note 32)
805 724 805 724
Other contributions
378 357 378 357
12.111 11.730 12.111 11.730
Average number of employees
230 233 230 233
9 Net finance cost
2021 2020 2021 2020
€000 €000 €000 €000
Interest income - 9 - 9
Net foreign exchange differences
112 - 112 -
Finance income
112 9 112 9
Interest expense
(286) (68) (286) (68)
Net foreign exchange differences
- (47) - (47)
Finance expense
(286) (115) (286) (115)
Net finance cost (174) (106) (174) (106)
10 Net (loss)/profit from investing activities
2021 2020 2021 2020
€000 €000 €000 €000
Dividend income 5 9 575 209
Change in fair value of investment property
(50) (166) (50) (166)
(45) (157) 525 43
Group
Company
Interest income is earned on bank deposits held in current and short-term notice accounts. The interest rate on the above deposits is
variable.
Interest expense relates to loan interest charges as well as interest charges on overdraft accounts.
Group
Company
Group
Company
ANNUAL REPORT ‘21 | 54
11 Taxation
Recognised in profit or loss 2021 2020 2021 2020
€000 €000 €000 €000
Analysis of charge in the year
Income tax on profits of the year 3.190 1.581 3.190 1.581
Special contribution to the defence fund
12 - 12 -
Share of tax from associate
92 89 - -
Deferred tax (note 25) (1.661) 880 (1.661) 880
1.633 2.550 1.541 2.461
Adjustment for prior periods
(57) - (57) -
1.576 2.550 1.484 2.461
Recognised in other comprehensive income
Deferred tax on revaluation of property 389 293 389 293
The Group is subject to income tax at 12,5%.
2021 2020 2021 2020
Reconciliation of tax based on taxable income and
tax based on accounting profits
€000 €000 €000 €000
Accounting profit before tax 19.017 19.231 18.839 18.786
Tax calculated at the applicable tax rates
2.377 2.404 2.355 2.348
Tax effect of expenses not deductible for tax purposes
1.721 1.978 1.743 2.034
Tax effect of allowances and income not subject to tax
(965) (2.801) (965) (2.801)
Special contribution to the defence fund
12 - 12 -
Deferred tax
(1.661) 880 (1.661) 880
Share of tax from associates
92 89 - -
Tax charge for the year 1.576 2.550 1.484 2.461
12 Earnings per share
The calculation of earnings per share in the Company's statement of profit or loss and other comprehensive income was based on the profit
for the year of €17.355 thousand (2020: €16.325 thousand).
The calculation of basic and fully diluted earnings per share was based on the profit attributable to ordinary shareholders of €17.441
thousand (2020: €16.681 thousand) and the weighted average number of ordinary shares outstanding during the year of 71.935.947 (2020:
71.935.947). There are no dilutive potential ordinary shares in issue.
Group
Group
Company
Company
ANNUAL REPORT ‘21 | 55
13 Property, plant and equipment
Group
Land and
Buildings
Vassiliko
port
Plant and
equipment
Photovoltaic
Park
Total
€000 €000 €000 €000 €000
Cost or valuation
Balance at 1 January 2020 93.021 24.135 268.435 - 385.591
Acquisitions 922 229 3.164 6.571 10.886
Disposals - - (265) - (265)
Balance at 31 December 2020 93.943 24.364 271.334 6.571 396.212
Balance at 1 January 2021
93.943 24.364 271.334 6.571 396.212
Acquisitions 7.400 74 2.451 - 9.925
Disposals (76) - (217) - (293)
Balance at 31 December 2021 101.267 24.438 273.568 6.571 405.844
Depreciation
Balance at 1 January 2020 31.179 10.979 114.383 - 156.541
Charge for the year on historical cost 1.573 940 10.996 301 13.810
Disposals - - (246) - (246)
Balance at 31 December 2020 32.752 11.919 125.133 301 170.105
Balance at 1 January 2021
32.752 11.919 125.133 301 170.105
Charge for the year on historical cost 1.757 958 11.065 330 14.110
Disposals - - (208) - (208)
Balance at 31 December 2021 34.509 12.877 135.990 631 184.007
Carrying amounts
At 1 January 2020 61.842 13.156 154.052 - 229.050
At 31 December 2020 61.191 12.445 146.201 6.270 226.107
At 1 January 2021
61.191 12.445 146.201 6.270 226.107
At 31 December 2021 66.758 11.561 137.578 5.940 221.837
ANNUAL REPORT ‘21 | 56
Company
Land and
buildings
Vassiliko
port
Plant and
equipment
Photovoltaic
Park
Total
€000 €000 €000 €000 €000
Cost or valuation
Balance at 1 January 2020 93.021 24.135 268.435 - 385.591
Acquisitions 922 229 3.164 6.571 10.886
Disposals - - (265) - (265)
Balance at 31 December 2020 93.943 24.364 271.334 6.571 396.212
Balance at 1 January 2021
93.943 24.364 271.334 6.571 396.212
Acquisitions
7.400 74 2.451 - 9.925
Disposals
(76) - (217) - (293)
Balance at 31 December 2021
101.267 24.438 273.568 6.571 405.844
Depreciation
Balance at 1 January 2020 31.179 10.979 114.383 - 156.541
Charge for the year on historical cost 1.573 940 10.996 301 13.810
Disposals - - (246) - (246)
Balance at 31 December 2020 32.752 11.919 125.133 301 170.105
Balance at 1 January 2021
32.752 11.919 125.133 301 170.105
Charge for the year on historical cost
1.757 958 11.065 330 14.110
Disposals
- - (208) - (208)
Balance at 31 December 2021
34.509 12.877 135.990 631 184.007
Carrying amounts
At 1 January 2020 61.842 13.156 154.052 - 229.050
At 31 December 2020 61.191 12.445 146.201 6.270 226.107
At 1 January 2021
61.191 12.445 146.201 6.270 226.107
At 31 December 2021
66.758 11.561 137.578 5.940 221.837
Fair value hierarchy
Property, plant and equipment under construction
Land
Valuation technique
Significant Unobservable Inputs
Security
Plant and equipment under construction as at 31 December 2021 was €599 thousand (2020: €12.665 thousand).
The carrying amount of Vassiliko Port consists of the net book value of the capitalised cost of the improvements incurred by the Company
through the years. The Cyprus Ports Authority, which according to the Cyprus Ports Authority Law is the owner of the port, leased it to the
Company for a period of 50 years as from 1 January 1984.
A revaluation exercise for land was performed in relation to 2017 by independent professional valuers.
As at 31 December 2021 the fair value of the land included in land and buildings category was €31.220 thousand (2020: €31.127
thousand).
The fair value measurement for the land has been categorised as a Level 3.
For land, the comparable sales approach was used that reflects observed prices for recent market transactions for similar properties per m
2
and incorporates adjustments for specific factors.
Bank loans of €4.760 thousand (2020: €12.941 thousand) are secured by mortgages on land and buildings of €1 million (2020:€26.5 million)
and fixed charges on plant and machinery of €3.750 thousand (2020: €29.250 thousand).
Sales comparison approach of land takes into consideration the particular characteristics of the subject property such as size, location and
planning/legal status as well as available information from relevant market transactions and the overall market condition as at the valuation
date.
ANNUAL REPORT ‘21 | 57
14 Investment property
2021 2020 2021 2020
€000 €000 €000 €000
Balance at 1 January 5.583 6.030 5.368 5.815
Acquired through group reorganisation - 140 - 140
Change in fair value (50) (166) (50) (166)
Disposals - (421) - (421)
Balance at 31 December
5.533 5.583 5.318 5.368
Fair value hierarchy
Valuation technique
Significant Unobservable Inputs
Property location
Property in Choirokoitia
€6 to €19 (2020: €9 to €11)
Property in Kalavasos
€27 to €47 (2020: €27 to €33)
Property in Mari
€6 to €10 (2020: €6 to €8)
Property in Strovolos
€312 to €571 (2020: €452 to €576)
Property in Drousia
€13 to €30 (2020: €20 to €28)
Property in Pissouri
€9 to €15 (2020: €9 to €11)
Property in Ipsonas
€47 to €68 (2020: €50 to €61)
Property in Pegeia
€5 to €18 (2020: €7 to €10)
Property in Gourri
€1 to €3 (2020: €2 to €3)
Property in Chrisopolitissa
€483 to €980 (2020: €542 to €980)
Property in Ayioi Omologites
€848 to €1056 (2020: €848 to €1296)
The following table shows the significant unobservable inputs used in measuring the fair value of investment property.
Investment property comprises a number of commercial properties that are leased to third parties or land held for capital appreciation.
The fair value measurement for all the investment properties has been categorised as a Level 3 fair value based on the inputs to the
valuation techniques used.
Sales comparison approach of investment properties takes into consideration the location and size of the plot, the building coefficient and
legal framework as well as the market data at the valuation date.
The carrying amount of investment property is the fair value of the property as determined by an independent valuer having an appropriate
recognised professional qualification and recent experience in the location and category of the property being valued. Fair values were
determined having regard to recent market transactions for similar properties in the same location as the Group’s investment property. The
last revaluation of investment property was performed in December 2020.
The estimated fair value would
increase/(decrease) if selling price
per m² was higher/(lower).
Inter-relationship between key
unobservable inputs and fair
value measurement
Significant unobservable
inputs
Selling price per m²:
Group
Company
For investment property the comparable sales approach was used.
ANNUAL REPORT ‘21 | 58
15 Intangible assets
Group Goodwill Software
Total
€000 €000 €000
Cost
Balance at 1 January 2020 12.328 227 12.555
Acquisitions - 21 21
Balance at 31 December 2020 12.328 248 12.576
Balance at 1 January 2021
12.328 248 12.576
Acquisitions - - -
Balance at 31 December 2021 12.328 248 12.576
Amortisation and impairment charge
Balance at 1 January 2020 - 139 139
Amortisation for the year - 74 74
Balance at 31 December 2020 - 213 213
Balance at 1 January 2021
- 213 213
Amortisation for the year - 31 31
Balance at 31 December 2021 - 244 244
Carrying amounts
At 1 January 2020 12.328 88 12.416
At 31 December 2020 12.328 35 12.363
At 1 January 2021
12.328 35 12.363
At 31 December 2021 12.328 4 12.332
Company Goodwill Software
Total
€000 €000 €000
Cost
Balance at 1 January 2020 12.328 227 12.555
Acquisitions - 21 21
Balance at 31 December 2020 12.328 248 12.576
Balance at 1 January 2021
12.328 248 12.576
Acquisitions - - -
Balance at 31 December 2021 12.328 248 12.576
Amortisation and impairment charge
Balance at 1 January 2020 - 139 139
Amortisation for the year - 74 74
Balance at 31 December 2020 - 213 213
Balance at 1 January 2021
- 213 213
Amortisation for the year - 31 31
Balance at 31 December 2021 - 244 244
Carrying amounts
At 1 January 2020 12.328 88 12.416
At 31 December 2020 12.328 35 12.363
At 1 January 2021
12.328 35 12.363
At 31 December 2021 12.328 4 12.332
Impairment testing for cash-generating units
The recoverable amount of goodwill (currently attaching to one cash-generating unit) is based on value-in-use calculations. Those
calculations use post-tax cash flow projections based on past experience, actual operating results and budgeted forecasts for 2022
extrapolated forward for the 10-year period 2022-2031. A post-tax discount rate of 9,86% has been used in discounting the projected cash
flows.
ANNUAL REPORT ‘21 | 59
16 Group entities
Name and country of incorporation Principal Activity 2021 2020
Venus Beton Limited - Cyprus Dormant company 100,0% 100,0%
C.C.C. Aggregates Limited - Cyprus Striken off
- 51,0%
Vassiliko Cement Clean Energy Supply Ltd - Cyprus Dormant company
100,0% -
17 Investments in subsidiaries
2021 2020
€000 €000
Balance at 1 January - -
Balance at 31 December
- -
Venus Beton Limited - Cyprus
- -
C.C.C. Aggregates Limited - Cyprus
- -
Vassiliko Cement Clean Energy Supply Ltd
- -
- -
18 Investment in associate (equity-accounted investee)
Name and country of incorporation Principal Activity 2021 2020
Enerco - Energy Recovery Limited - Cyprus Waste Management
50% 50%
2021 2020
€000 €000
Balance at 1 January
1.560 1.202
Share of profit from equity-accounted investee
727 647
Share of tax from equity-accounted investee
(92) (89)
Dividends from equity-accounted investee
(570) (200)
Balance at 31 December
1.625 1.560
2021 2020
€000 €000
Balance at 1 January
500 500
Balance at 31 December
500 500
Ownership
Ownership
In the Company's statement of financial position, the investment in associate is stated at cost:
On 17 September 2022, the Company incorporated Vassiliko Cement Clean Energy Supply Ltd whose principal operation will be the
purchase and supply of electricity from renewable energy sources.
ANNUAL REPORT ‘21 | 60
Enerco - Energy Recovery Limited
2021 2020
€000 €000
Non-current assets
4.722 4.883
Current assets
1.178 1.030
Non-current liabilities
1.436 1.753
Current liabilities
863 689
Net assets (100%)
3.600 3.471
Group’s share of net assets
1.800 1.736
Revenue
5.574 4.702
Profit from continued operations
1.269 1.294
Other comprehensive income
- -
Total comprehensive income
1.269 1.294
19 Financial assets at fair value through other comprehensive income
2021 2020 2021 2020
€000 €000 €000 €000
At 1 January 218 258 218 258
Change in fair value
14 (40) 14 (40)
At 31 December
232 218 232 218
2021 2020 2021 2020
€000 €000 €000 €000
Non-current investments
Equity securities at fair value through other
comprehensive income
232 218 232 218
232 218 232 218
Equity securities designated as at fair value
Name
31 December
2021
31 December
2020
€000 €000 €000
KEO Plc 5 176 169
Hellenic Bank Public Company Ltd - 55 49
Fair value for the financial assets at fair value through other comprehensive income was determined by reference to published price
quotations in an active market (classified as Level 1 in the fair value hierarchy).
Dividend income recognised
during 2021
Company
Group
Valuation
Valuation
The following table summarises the financial information of the associate as included in its own financial statements adjusted for fair value
adjustments at acquisitions and differences in accounting policies. The table also reconciles the summarised financial information to the
carrying amount of the Group’s interest in the equity-accounted investee for 2021.
The Company designated the investments shown below as equity securities at fair value through other comprehensive income (FVOCI)
because these equity securities represent investments that the Company intends to hold for the long term for strategic purposes.
The details of financial assets at fair value through other comprehensive income are as follows:
ANNUAL REPORT ‘21 | 61
20 Inventories
2021 2020 2021 2020
€000 €000 €000 €000
Raw materials and work in progress 3.646 3.988 3.646 3.988
Finished goods
11.769 4.974 11.769 4.974
Fuel stocks
3.364 1.928 3.364 1.928
Spare parts and consumables
15.867 14.822 15.867 14.822
CO
2
Emission Rights
7.432 - 7.432 -
42.078 25.712 42.078 25.712
21 Trade and other receivables
2021 2020 2021 2020
€000 €000 €000 €000
Trade and other receivables 6.858 8.003 6.858 8.003
Amount owed by subsidiary companies (note 28)
- - 559 580
Amount owed by associate companies (note 28)
259 107 259 107
Other receivables and prepayments
562 639 562 639
7.679 8.749 8.238 9.329
Less provision for impairment
(794) (1.119) (810) (1.135)
6.885 7.630 7.428 8.194
Impairment movement
At 1 January 1.119 1.146 1.135 1.164
Movement during the year
(260) (57) (260) (59)
Accrued discounts
(65) 30 (65) 30
At 31 December
794 1.119 810 1.135
22 Cash and cash equivalents
2021 2020 2021 2020
€000 €000 €000 €000
Cash in hand 36 27 36 27
Cash at bank
1.576 13.808 1.576 13.808
Bank overdraft
(7.761) (53) (7.761) (53)
Cash and cash equivalents
(6.149) 13.782 (6.149) 13.782
Cash and cash equivalents in the statement of cash
flows
(6.149) 13.782 (6.149) 13.782
Group
Company
Group
Group
Company
The Group's historical experience in collection of accounts receivable falls within the recorded allowances. Due to these factors,
management believes that no additional credit risk beyond amounts provided for collections losses is inherent in the Company's trade
receivables.
Company
In 2021 inventories of €73.777 thousand (2020: €77.192 thousand) were recognised as an expense during the year and were included in
cost of sales.
Information about the Group's exposure to credit and market risks for trade and other receivables, is included in note 34.
ANNUAL REPORT ‘21 | 62
23 Capital and reserves
Share capital 2021 2020
No. of shares No. of shares
Authorised:
Ordinary shares of €0,43 each
72.000.000 72.000.000
2021 2020 2021 2020
No. of shares No. of shares €000 €000
Allotted, called up and fully paid:
Ordinary shares of €0,43 each
71.935.947 71.935.947 30.932 30.932
Reserves
Revaluation reserve
Fair value reserve
24 Interest-bearing loans and borrowings
2021 2020 2021 2020
€000 €000 €000 €000
Non-current portion of secured bank loans 3.801 4.760 3.801 4.760
Current portion of secured bank loans
959 8.181 959 8.181
Analysis of maturity of debt:
Within one year or on demand
959 8.181 959 8.181
Between one and two years
985 959 985 959
Between two and five years
2.816 3.037 2.816 3.037
After five years
- 764 - 764
4.760 12.941 4.760 12.941
Weighted average effective interest rate
Group
Company
The bank loans are secured as follows:
Revaluation reserve comprises the cumulative net change in the fair value of land and Vassiliko port. When revalued land is sold, the
portion of the revaluation reserve that relates to that asset, and that is effectively realised, is transferred directly to retained earnings.
The fair value reserve comprises the cumulative net change in the fair value of equity securities designated at fair value through other
comprehensive income.
- By mortgage against immovable property of the Company for €1.000 thousand (2020: €26.500 thousand).
- Fixed charge on the Company's financed plant and machinery for €3.750 thousand (2020: €29.750 thousand).
The rate of interest payable on the loans as at 31 December 2021 was 2,7%. At 31 December 2021 , the prevailing rate of interest for these
loans was 2,7% (2020: 0,9%).
ANNUAL REPORT ‘21 | 63
25 Deferred taxation
2021 2020 2021 2020
€000 €000 €000 €000
Accelerated capital allowances 15.108 16.721 15.108 16.721
Revaluation of properties
8.802 8.461 8.802 8.461
23.910 25.182 23.910 25.182
2021 2020 2021 2020
€000 €000 €000 €000
At 1 January 25.182 24.009 25.182 24.009
Deferred tax charge in statement of comprehensive
income (note 11)
(1.661) 880 (1.661) 880
Transfer to revaluation reserve
389 293 389 293
At 31 December 23.910 25.182 23.910 25.182
26 Provisions for liabilities and charges
2021 2020 2021 2020
€000 €000 €000 €000
Provisions for litigation and claims
300 300 300 300
300 300 300 300
27 Trade and other payables
2021 2020 2021 2020
€000 €000 €000 €000
Current
Trade payables
5.462 5.422 5.460 5.420
Amounts owed to related companies (note 28)
32 38 32 38
Other payables
1.023 1.554 1.023 1.554
Accrued interest
- 3 - 3
Payable dividends
351 354 351 354
6.868 7.371 6.866 7.369
Group
Company
Company
Non-current
Non-current
Group
Company
Group
ANNUAL REPORT ‘21 | 64
28 Related parties
2021 2020 2021 2020
€000 €000 €000 €000
Hellenic Mining Group - 2 138 131
KEO Plc
- - 19 16
The Cyprus Cement Public Company Ltd
- - 120 120
Enerco - Energy Recovery Limited
1.870 1.428 1.838 1.537
1.870 1.430 2.115 1.804
ii. Τransactions with key management personnel
iii. Balances with related parties
2021 2020
€000 €000
Amounts due to related parties
Hellenic Mining Group 11 13
C.C.C. Secretarial Limited 12 12
KEO Plc 9 13
32 38
iv. Balances with equity-accounted investee
2021 2020 2021 2020
€000 €000 €000 €000
Enerco - Energy Recovery Limited (note 21)
259 107 259 107
Sales
Purchases
Group
Group
Company
The above balances relate to trading activities.
The Company has entered into agreements with the following related parties:
- With Hellenic Mining Public Company Limited (common shareholder with the Group) for the provision of office facilities and other related
administrative and technical services on quarrying activities at an annual fee of €24.000. The duration of the agreement is for a two-year
period, commencing on 1 July 2020 and ending on 30 June 2022.
- With C.C.C. Secretarial Limited (common shareholder with the Group) for the provision of civil engineering consultation services at an
annual fee of €120.000 renewed for another twelve months until 31 August 2022.
In addition to salaries, the Group also contributes to the Provident Fund which is a defined contributions plan and to National Health System
(note 32). Key management personnel remuneration, including total employer contributions for 2021, was €1
.063 thousand
(2020:
€1.164 thousand).
The transactions between the Group and the related parties, including the above agreements were as follows:
The balances between the Group and the related parties were as follows:
The above balances relate to trading activities.
i. Transactions with related parties
ANNUAL REPORT ‘21 | 65
v. Balances with Group entities
2021 2020
€000 €000
Balances due from Group entities
Venus Beton Limited 559 557
C.C.C. Aggregates Limited - 23
559 580
Less impairment
(378) (378)
181 202
29 Dividends
2021 2020
€000 €000
Interim dividend of 2021 at €0
,08 (2020: Year 2020 at €0,06) per share
5.755 4.316
Final dividend of 2019 at €0
,15 (2020: Year 2019 at €0,02 & Year 2018 at €0,06) per share
10.790 5.755
16.545 10.071
30 Directors' interest in the share capital of the Company
Directly
Directly &
Indirectly
Directly
Directly &
Indirectly
Antonios Antoniou
0,111% 0,174% 0,111% 0,174%
Costas Koutsos 0,007% 0,014%
0,007% 0,014%
Stavros Galatariotis 0,013% 0,013%
0,013% 0,013%
0,131% 0,201% 0,131% 0,201%
31 Shareholders holding more than 5% of the issued share capital of the Company
Directly
Directly &
Indirectly
Directly
Directly &
Indirectly
Holy Archbishopric of Cyprus
1
19,52% 26,01% 19,52% 26,01%
Heidelbergcement AG
2
- 25,98% - 25,98%
The Cyprus Cement Public Company Ltd 25,30% 25,30% 25,30% 25,30%
Anastasios G. Leventis Foundation 5,34% 5,34% 5,34% 5,34%
50,16% 82,63% 50,16% 82,63%
02 April 2021
31 December 2021
Dividends are subject to defence fund contribution at the rate of 17%, when the beneficiary is a physical person resident of Cyprus.
At 31 December 2021, the Company had no material agreements in which Directors of the Company, or their related parties, had a direct or
indirect interest.
Note 2: The indirect shareholding of Heidelbergcement AG derives from the direct shareholding of 9,71% of Compagnie Financiere et de
Participations S.a.s and 16,27% of Italmed Cement Company Ltd in the issued share capital of the Company.
02 April 2021
31 December 2021
Company
At 31 December 2021 and five days prior to the date of approval of the financial statements, the following shareholders were holding,
directly and indirectly, more than 5% of the nominal value of the issued share capital of the Company:
Note 1: The indirect shareholding of The Holy Archbishopric of Cyprus derives from the direct shareholding of 6,49% of KEO Plc in the
issued share capital of the Company.
The balances between the Company and the Group entities were as follows:
At 31 December 2021, and five days prior to the date of the approval of the financial statements, the percentage of shareholdings in the
share capital of the Company held, directly and indirectly, by the Members of the Board of Directors, their spouses, or/and relatives by blood
up to first degree and companies in which they control directly and indirectly at least 20% of the voting rights were as follows:
ANNUAL REPORT ‘21 | 66
32 Employee contribution schemes
33 Leases
Leases as lessee
i. Right-of-use of assets
2021 2020 2021 2020
€000 €000 €000 €000
Balance at 1 January
1.700 77 1.700 77
Additions
- 1.678 - 1.678
Depreciation charge for the year
(117) (55) (117) (55)
Balance at 31 December
1.583 1.700 1.583 1.700
ii. Lease Liabilities
2021 2020 2021 2020
€000 €000 €000 €000
Non-current portion of lease liabilities 1.542 1.605 1.542 1.605
Current portion of lease liabilities
115 121 115 121
2021 2020 2021 2020
€000 €000 €000 €000
Interest on lease liabilities
46 24 46 24
2021 2020 2021 2020
€000 €000 €000 €000
Total cash outflow for leases
115 7 115 7
The Group contributes to the Vassiliko Cement Works Ltd Employees’ Provident Fund, which is a defined contribution scheme and to the
National Healthcare System. According to these schemes, the employees are entitled to payment of certain benefits upon retirement, prior
termination of service or sickness. The contributions of the Group and the Company for the year were €805 thousand (2020: €724
thousand).
iii. Amounts recognised in statement of cash flows
Group
Company
Company
Group
The Group leases the port facilities for a period of 50 years ending in 2033. The lease provides for rental increases to reflect market rentals
with no contingent rentals.
During 2020, the Group also leased a piece of land close to the factory to be used for storage of materials used in the production process.
Information about leases for which the Group is a lessee is presented below.
ii. Amounts recognised in statement of profit or loss
Group
Company
Company
Group
ANNUAL REPORT ‘21 | 67
34 Financial instruments and risk management
- Market risk
- Interest rate risk
- Currency risk
- Credit risk
- Liquidity risk
- Industry risk
- Operational risk
- Environmental risk
- Compliance risk
- Litigation risk
- Reputation risk
Market risk
Interest rate risk
Sensitivity analysis
The Group is exposed to the following risks from its use of financial instruments:
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for
measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are included throughout these
financial statements.
A reasonably possible increase of 100 basis points in interest rates at the reporting date would have decreased equity and profit or loss by
€48 thousand (2020: €129 thousand). This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
For a decrease of 100 basis points there would be an equal and opposite impact on the profit and other equity.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and
controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in
market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop
a disciplined and constructive control environment in which all employees understand their roles and obligations.
The Group Audit Committee oversees how management monitors compliance with the Group's risk management procedures and reviews
the adequacy of the risk management framework in relation to the risks faced by the Group.
The main monetary financial assets of the Group and the Company are cash and cash equivalents, and the investments in securities and
trade receivables. The main monetary financial liabilities are bank overdrafts, loans and trade payables.
Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices will affect the Group's
income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters while optimising the return.
Interest rate risk results from changes in market interest rates. The Group's management monitors the interest rate fluctuations on a
continuous basis and acts accordingly. The interest rate and repayment terms of the loans are disclosed in note 24.
The Group also has exposure to the following other risks:
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.
ANNUAL REPORT ‘21 | 68
Currency risk
Exposure to currency risk was as follows:
Group
US$000 US$000
31 December 2021 31 December 2020
Trade receivables
48 -
Trade payables
(33) (53)
Net exposure
15 (53)
Company
US$000 US$000
31 December 2021 31 December 2020
Trade receivables
48 -
Trade payables
(33) (53)
Net exposure
15 (53)
The following significant exchange rates were applied during the year:
2021 2020 2021 2020
US$ 1 0,001 0,888 0,001 0,888
Sensitivity analysis
Credit risk
2021 2020 2021 2020
€000 €000 €000 €000
Trade and other receivables
6.858 8.003 6.858 8.003
Amount receivable from related parties
259 107 259 107
Other receivables
1 - 1 -
Financial assets at fair value through other
comprehensive income
232 218 232 218
Cash at bank
1.576 13.808 1.576 13.808
Total credit risk exposure
8.926 22.136 8.926 22.136
The carrying amount of financial assets representing the maximum credit exposure to credit risk at the reporting date was:
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency rate risk
arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the Group’s
measurement currency. The Group is exposed to foreign exchange risk arising from various currency exposures primarily with respect to
the United States Dollar (US$). The Group's management monitors the exchange rate fluctuations and exposure on foreign currency
transactions on a continuous basis and acts accordingly.
A 10% strengthening of the Euro against the United States Dollar at 31 December 2020 would have increased equity and profit or loss by
€1,6 thousand (2020: €4 thousand). This analysis assumes that all other variables, in particular interest rates, remain constant. For a 10%
weakening of the Euro against the United States Dollar, there would be an equal and opposite impact on the profit and other equity.
Credit risk arises when a failure by counter parties to discharge their obligations could reduce the amount of future cash inflows from
financial assets on hand at the statement of financial position date. The Company has no significant concentration of credit risk. The Group
has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history and monitors on
a continuous basis the ageing profile of its receivables. The Group has policies to limit the amount of credit exposure to any financial
institution.
Carrying amount
Average rate
Reporting date spot rate
Group
Company
Carrying amount
ANNUAL REPORT ‘21 | 69
Net carrying
amount
Weighted
average loss
rate
Loss
allowances
Current (not past due) 6.065 0,40% 24,0
1-30 days past due 367 2,70% 10,0
31-60 days past due 30 4,90% 1,0
61-90 days past due - 6,00% -
More than 90 days past due 396 6,70% -
6.858 35
Net carrying
amount
Weighted
average loss
rate
Loss
allowances
Current (not past due) 7.210 0,50% 33,3
1-30 days past due 367 3,10% 11,2
31-60 days past due 30 5,50% 1,7
61-90 days past due - 7,00% -
More than 90 days past due 396 7,90% 0,4
8.003 46,6
The following table provides information about estimated exposure to credit risk and ECL’s for trade receivables and contract assets from
individual customers and for corporate customers as at 31 December 2021 :
Loss rates are based on actual credit loss experience over the past 5 years. These rates are multiplied by scalar factors to reflect
differences between economic conditions during the period over which the historical data has been collected, current conditions and the
Group’s view of economic conditions over the expected lives of the receivables.
The Group has policies to limit the amount of credit exposure to any financial institution. The table below shows an analysis of the
Company's bank deposits by the credit rating of the bank in which they are held:
The following table provides information about estimated exposure to credit risk and ECL’s for trade receivables and contract assets from
individual customers and for corporate customers as at 31 December 2020:
2021 2020 2021 2020
€000 €000 €000 €000
Caa1 - - 2.003 - - 2.003
B3 to B2 4 270 2.573 4 270 2.573
B1 2 441 3.160 2 441 3.160
Aa2 1 865 6.072 1 865 6.072
1.576 13.808 1.576 13.808
No. of
banks
No. of
banks
Bank group based on credit ratings by Moody's
Group
Company
ANNUAL REPORT ‘21 | 70
Liquidity risk
Group
Company
Industry risk
- Increased domestic competition as well as competition from neighbouring countries.
The following are the contractual maturities of financial liabilities, including estimated interest payments:
- National and international economic and geopolitical factors and markets;
- The growth of the construction and real estate sectors;
The activities of the Group are subject to various risks and uncertainties related to the construction industry and the economy in general.
These activities are influenced by a number of factors which include, but are not restricted, to the following:
Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances
profitability, but can also increase the risk of losses. The Group has procedures with the object of minimising such losses such as
maintaining sufficient cash and other highly liquid current assets and by having available an adequate amount of committed credit facilities.
The Group has access to financing facilities of €18.760 thousand, of which €14.000 thousand were unused at the end of the reporting
period. The Group expects to meet its other obligations from operating cash flows and proceeds from maturity of financial assets.
The Group has a secured bank loan that contains a loan covenant. A future breach of covenant may require the Group to repay the loan
earlier than indicated in the above table. Under the agreement, the covenant is monitored on a regular basis by the accounting department
and regularly reported to management to ensure compliance with the agreement.
- The impact of war, terrorist acts, diseases and epidemics which are likely to influence tourists’ arrivals on the island of Cyprus;
- Increases in labour and energy costs;
Non-derivative financial
liabilities
Carrying
amount
Contractual
cash flow
Payable on
demand
and up to 6
months
6 - 12
months
1 - 2 years 2 - 5 years
More than
5 years
€000 €000 €000 €000 €000 €000 €000
31 December 2021
Secured bank loans 4.760 (5.193) (549) (550) (249) (3.297) (548)
Trade and other payables 5.494 (5.494) (5.494) - - - -
10.254 (10.687) (6.043) (550) (249) (3.297) (548)
31 December 2020
Secured bank loans 12.941 (13.629) (4.558) (3.879) (1.098) (3.296) (798)
Trade and other payables 5.460 (5.460) (5.460) - - - -
18.401 (19.089) (10.018) (3.879) (1.098) (3.296) (798)
Non-derivative financial
liabilities
Carrying
amount
Contractual
cash flow
Payable on
demand
and up to 6
months
6 - 12
months
1 - 2 years 2 - 5 years
More than
5 years
€000 €000 €000 €000 €000 €000 €000
31 December 2021
Secured bank loans 4.760 (5.193) (549) (550) (249) (3.297) (548)
Trade and other payables 5.492 (5.492) (5.492) - - - -
10.252 (10.685) (6.041) (550) (249) (3.297) (548)
31 December 2020
Secured bank loans 12.941 (13.629) (4.558) (3.879) (1.098) (3.296) (798)
Trade and other payables 5.458 (5.458) (5.458) - - - -
18.399 (19.087) (10.016) (3.879) (1.098) (3.296) (798)
ANNUAL REPORT ‘21 | 71
Operational risk
Operational environment
Operational risk is the risk that derives from any deficiencies relating to the Group’s information technology, production processes and
control systems as well as the risk of a human error and natural disasters. The Group’s systems are evaluated, maintained, and upgraded
continuously.
The geopolitical situation in Eastern Europe intensified on 24 February 2022, with the war in Ukraine. The war between Russia and Ukraine
continues to evolve as military activity proceeds and additional sanctions are imposed.
The Company does not have direct exposure to the countries involved, however the operations are affected by the overall economic
uncertainty and negative impacts on the global economy and major commodity and financial markets arising from the war.
1. whether any impairment allowances are deemed necessary for the Company's financial assets, non-financial assets (e.g., property, plant
& equipment) by considering the economic situation and outlook at the end of the reporting period.
The economic impact of the war depends on variables that are difficult to predict, including the duration of the war, extent of government
sanctions, general economic environment and the effectiveness of government measures to assist the economy.
The event is reflected in the recognition and measurement of the assets and liabilities in the financial statements as at 31 December 2021.
The Company's management has assessed:
Increased costs of production (e.g. because of increased energy costs or inflation) have implications on the Company’s working capital. The
Company has adequate working capital facilities to continue its operations and has further taken measure to increase the availability of such
facilities to cover against any additional future needs.
2. whether the net realisable value for the Company's inventory exceeds cost.
3. the ability of the Company to continue as a going concern
The financial effect of the current crisis on the global economy and overall business activities cannot be estimated with reasonable certainty
though, due to the pace at which the outbreak expands and the high level of uncertainties arising from the inability to reliably predict the
outcome. Management's current expectations and estimates could differ from actual results.
Management has considered the unique circumstances that had a material impact on the business operations and the risk exposures of the
Company and has concluded that the main impacts on the Company's profitability/liquidity position have arisen from:
Management has assessed and is in the process of reassessing the trading and relevant cash flows using revised assumptions and
incorporating downside scenarios in assessing actual and potential financing needs, taking into consideration the main impacts identified
above.
From the analysis performed no additional liquidity needs/impact on financial covenants have been identified.
Management will continue to monitor the situation closely and assess additional measures as a fall back plan in case the period of
disruption becomes prolonged.
The Company's management believes that it is taking all the necessary measures to maintain the viability of the Company and the
development of its business in the current business and economic environment.
Supply-chain disruptions that were already prevalent during the COVID-19 pandemic have intensified because of the war, including
shortages of materials, higher costs of energy, commodities and freight, and increased transportation delays.
· supply chain disruptions,
· unavailability of personnel,
· reduction in sales due to closure of facilities and stores and search for alternatives,
· delays in planned business expansion
· interruption of production,
ANNUAL REPORT ‘21 | 72
Environmental risk
Compliance risk
Litigation risk
Reputation
Capital management
35 Fair values
36 Contingent Liabilities
37 Commitments
2021 2020 2021 2020
€000 €000 €000 €000
Property, plant and equipment
2.774
3.845
2.774 3.845
38 Events after the reporting period
The Directors proposed the payment of a final dividend of €0,13 per Ordinary Share out of the profits of 2020 included in Retained Earnings.
If approved at the Annual General Meeting, the dividend will be paid to the entitled shareholders registered as at 1 June 2022 (record date).
Capital expenditure contracted for at the reporting date but not yet incurred is as follows:
The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the
advantages and security afforded by a sound capital position.
The fair value of the investments in securities quoted on the Cyprus Stock Exchange is disclosed in note 19. The fair value of investment
property is disclosed in note 14. The fair values of the other monetary assets and liabilities are approximately the same as their book values.
As at 31 December 2021 , the Group had contingent liabilities in respect of bank guarantees arising in the ordinary course of business from
which the Board of Directors is not anticipating that material liability will arise. These guarantees amounted to €546 thousand (2020 : €664
thousand).
Group
Carrying amount
Company
Carrying amount
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future
development of the business. The Board of Directors monitors the return on capital, which the Group defines as the amount of net income
returned as a percentage of total shareholder equity.
Environmental risk is the risk to comply with environmental regulations of the Republic of Cyprus and the EU. The risk is limited through the
monitoring controls applied by the Group. Further the Group is exposed to price fluctuations on emission rights depending on its emission
rights surplus or deficit. The Group's position is therefore constantly monitored to ensure correct risk management.
Compliance risk is the risk of financial loss, including fines and other penalties, which arises from non-compliance with the laws and
regulations of the Republic of Cyprus and the EU. The risk is limited through the monitoring controls applied by the Group.
Litigation risk is the risk of financial loss which arises from the interruption of the Group’s operations or any other undesirable situation that
arises from the possibility of non-execution or violation of legal contracts and consequently from lawsuits. The risk is restricted through the
contracts used by the Group to execute its operations.
The risk of loss of reputation arising from the negative publicity relating to the Group’s operations (whether true or false) may result in a
reduction of its clientele, reduction in revenue and legal cases against the Group. The management is monitoring such developments
through its sustainable development and corporate governance policies and procedures to mitigate such risks.
There were no other material events after the reporting period, until the date of the signing of the financial statements which affect the
financial statements as at 31 December 2021.
ANNUAL REPORT ‘21 | 73