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Titan S.A.

Annual Report Mar 10, 2016

4014_10-k_2016-03-10_7bbc5198-b785-46c8-93db-7753619dd276.pdf

Annual Report

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Annual Financial Statements for the year ended 31 December 2015

of the Group

and Titan Cement Company S.A.

These financial statements have been translated from the original Greek version. In the event that differences exist between this translation and the original Greek language financial statements, the Greek language financial statements will prevail over this document.

Index

Pages

1) Statements of Members of the Board of Directors 1
2) Report of the Board of Directors 2
3) Explanatory Report of the Board of Directors 14
4) Declaration of Corporate Governance 20
5) Independent Auditor's Report 61
6) Primary Financial Statements 63
7) Notes to the Financial Statements 69
8) Appendix I: Reporting regarding Company transactions with affiliated companies in
accordance with article 2, par.4 of Codified Law 3016/2002 150
9) Appendix II: Information according to article 10 of Law 3401/2005 153
10) Summary of Financial Results 154

The Annual Financial Statements presented on pages 1 to 60 and 63 to 154 both for the Group and the Parent Company, have been approved by the Board of Directors on 10 March, 2016.

Chairman of the Board of Directors Chief Executive Officer

ID No AB500997 ID No ΑΚ031353 ANDREAS L. CANELLOPOULOS DIMITRIOS TH. PAPALEXOPOYLOS

Chief Financial Officer Finance Director Greece

Financial Consolidation Senior Manager

MICHAEL H. COLAKIDES GRIGORIOS D. DIKAIOS ATHANASIOS S. DANAS

Passport No Ε152969 ID No ΑΒ291692 ID No ΑΒ006812

STATEMENT OF MEMBERS OF THE BOARD (In accordance with article 4 of Law 3556/2007)

The members of the Board of Directors of TITAN CEMENT COMPANY S.A.:

    1. Andreas Canellopoulos, Chairman,
    1. Dimitrios Papalexopoulos, Managing Director and
    1. Alexandra Papalexopoulou-Benopoulou, Board Member,

having been specifically assigned by the Board of Directors, declare in our above capacity that:

As far as we know:

Α) the enclosed Financial Statements of TITAN CEMENT COMPANY S.A. for the period of 1.1.2015 to 31.12.2015 which have been drawn up in accordance with the applicable accounting standards, reflect in a true manner the assets and liabilities, equity and results of TITAN CEMENT COMPANY S.A. as well as of the businesses included in Group consolidation taken as a whole.

Β) the enclosed Report of the Board of Directors reflects in a true manner the development, performance and financial position of TITAN CEMENT COMPANY S.A. as well as of the businesses included in Group consolidation taken as a whole, including a description of the principal risks and uncertainties faced by them.

Athens, 10 March 2016

Chairman of the Board Managing Director Board Member

ANDREAS L. CANELLOPOULOS DIMITRIOS TH. PAPALEXOPOULOS ALEXANDRA PAPALEXOPOULOU-BENOPOULOU

ANNUAL REPORT OF THE BOARD OF DIRECTORS FOR THE FISCAL YEAR 01.01.2015 - 31.12.2015

FINANCIAL RESULTS – DEVELOPMENT OF ACTIVITIES – SIGNIFICANT EVENTS

Turnover for Τitan Group increased significantly in 2015, mainly due to the dynamic growth recorded in the US market. Consolidated turnover reached €1,398 million, posting a 20.7% increase compared to 2014. Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) increased by 19.2% reaching €216 million. Net profit, after minority interests and the provision for taxes (NOPAT) increased by 9.1% and reached at €34 million, compared to €31 million in 2014.

In 2015 results were benefited by the strengthening - but to a lesser extent than 2014 - of the US\$ versus the Euro but they were negatively affected by higher provisions.

At 31.12.2015 Net Debt stood at €621 million having risen by €81 million compared to 31.12.2014 as a result of the substantial growth in capital expenditure investments in the current year and the acquisition of a minority stake in Titan's Albanian subsidiary Antea. The Group's EBITDA in 2015 was mostly absorbed by €173 million in capital spending which was more than double from last year's levels, in support of the rapid business growth in the US and of Egypt's extensive kiln conversion program. Following the high capital expenditure, the Group generated €64 million Operating Free Cash Flow compared to €90 million last year.

On June 29th 2015, Standard & Poor's confirmed Titan's credit rating as 'BB' and improved its outlook from stable to positive.

The stock price of the Company closed at €17.61 a share on 31.12.2015, declining by 8.1% since 31.12.2014. During the same period, the Athens Stock Exchange (ASE) General Index posted a 23.6% decrease.

Market Overviews

In Greece, the construction sector remains in a protracted, deep recession. Any signs of a hint of improvement which had appeared early in 2015, were abruptly reversed from the summer onwards with the onset of capital controls and the attendant further contraction of building activity which resulted in minimal demand for housing and considerably subdued activity in public works. It is estimated that cement demand in Greece for 2015 stood at 1962 levels, in other words, 65% lower than the average demand levels of the last 50 years. Recent data from Eurostat comes to confirm the dire state of the Greek construction industry pointing to a curtailment of housing investments from 10.8% of GDP in 2007 to 1% in 2014, while the corresponding contraction in the Eurozone is merely from 6% of GDP in 2007 to approximately 5.5% in 2014.

In addressing the domestic market challenges the Group has dynamically turned to exports in recent years and despite aggressive competition has managed to attain a considerable high export sales volume, owing to its plants' top-tier performance. As such, domestic cement sales in 2015 represented just 6.5% of total volumes sold for the Group.

Total turnover for Group region Greece and Western Europe in 2015 stood at €269 million and was 5.6% lower than 2014. EBITDA reached €45 million versus €37 million in 2014, following the amendment of the accounting allocation methodology for certain Head Office corporate overheads to Business Segments, as per the guidance issued by the OECD, which resulted in an €7 million increase in operating expenses.

The recovery of the US market was the main lever of growth for the Group. Florida, where a large part of the Group's operations are located, posted particularly strong growth with the recovery of the residential housing market fueling the demand for building materials. The extensive investment program underway in the US, which for 2014 and 2015 combined amounted to €125 million, also had a favourable effect on results and the and the development of operations, as did the strengthening of the US dollar.

Total turnover in the US for 2015 increased by 45% (a 19% increase in US\$-terms) and stood at €680 million, while EBITDA more than doubled to €101 million versus €46 million in 2014.

In the countries of Southeastern Europe, construction activity did not register a marked change, with demand remaining at relatively low levels.

Group turnover in SEE in 2015 posted a marginal increase of 0.4% and reached €209 million while EBITDA declined by 17.3% owing to intense competition and reached €56 million.

In Egypt, cement demand grew by approximately 5%. Production levels at the Group's plants have once again reached high levels since the summer, following the entry into operation of the one production line at Beni Suef with solid fuels and the securing of sufficient, albeit costly, fuel levels for the rest of the production lines. Nevertheless, the lower prices prevalent in the market in the second half of the year, combined with the increased fuel costs put a pressure on profitability.

Hence, while turnover in Egypt increased by 22.3% reaching €241 million, EBITDA declined to €15 million from €31 million in 2014.

In should be noted that the second line at Beni Suef will begin operation utilizing solid fuels in the course of March 2016, which will allow the Group to benefit more efficiently by the increasing demand of the market employing a much more competitive cost base.

In Turkey, the Adocim joint venture in which Titan Group holds a 50% share, reaped the benefits of an increased demand for both public and private works and recorded positive results.

INVESTMENTS AND DISPOSALS

In February 2015, Αlvacim Ltd, a Titan Group subsidiary, purchased the 20% stake held by the European Bank for Reconstruction and Development (ΕBRD) in ANTEA CEMENT SHA (ΑΝΤΕΑ), a Titan Group subsidiary in Albania. As a result of this purchase, Titan Group holds 80% of ANTEA's share capital, whereas the remaining 20% is held by the International Finance Corporation (IFC).

Group capital expenditure in 2015, excluding acquisitions and intangible assets, stood at €173million, considerably higher than the amounts recorded in previous years and by €91 million higher than last year. The increase is mainly due to investments undertaken to support the growth of operations in the US and to ensure the adequacy of energy resources for Titan's plants in Egypt.

The net book value of fixed assets disposed was €3 million, versus €2 million in the previous year.

The Group's subsidiary, Titan America, decided to suspend the development activities at the site of a proposed cement plant in North Carolina, USA. In reaching this decision, Titan America took into consideration the low rate of demand growth in the market to be served by the proposed plant and the relatively high cost of constructing a new cement plant in the US which has risen considerably in the past few years. Moreover, market risks have increased as a consequence of excess low-cost global production capacity, low ocean freight rates, and the strengthening of the US dollar. As a result of its decision to suspend development activities at the Castle Hayne site, Titan America recorded a provision for an impairment charge of €12.4 million (€8.3 million impact on net profits) in 2015.

PARENT COMPANY FINANCIAL RESULTS

Turnover at Titan Cement S.A. in 2015 grew by 3.5% to €273million while EBITDA stood at €44million versus €31million in 2014. The Company's net profit after the provision for taxes (NPAT) was €60million versus a €92million in 2014. Net profit after taxes (NPAT) in 2015 included €55million of dividends received from international subsidiaries compared to €112million the previous year.

The Annual General Assembly of Shareholders which was held on 19.6.2015 approved the distribution of dividend of a total amount of €12,695 thousand, i.e. €0.15 per share. In addition, it approved the distribution of special reserves from previous financial years, of a total amount of €12,695 thousand i.e. €0.15 per share. Due to the mandatory bank holiday imposed by the legislative Act of June 28th 2015, the payment of the dividend and the distribution of the special reserves which would start on July 1st 2015 was postponed for two weeks and payment commenced on July 15th, 2015 through ΑLPHA BANK CYPRUS LIMITED.

The Board of Directors will propose to the Annual General Assembly of Shareholders, scheduled to take place on 17.6.2016, the distribution of dividend of a total amount of €25,390 thousand, i.e. €0.30 per share. Pursuant to article 16.8(b) of L. 2190/1920, the final amounts to be distributed per share will be increased by the dividend, corresponding to the treasury shares held by the Company.

POST BALANCE SHEET EVENTS

There are no events after the 31st of December 2015 that relate to the Group and the Company and which would significantly affect the consolidated and the Company's financial statements.

PROSPECTS FOR 2016

Prospects for the Group in 2016 appear positive, despite the significant challenges and uncertainties. As circumstances stand now, the power house of the Group, in terms of revenue and operational profitability, is the rapidly recovering US market. In 2015, Group region North America represented 49% of turnover and 47% of EBITDA for the Group.

The recovery of the construction industry in the US should continue, driven by the residential and commercial segments, and to a lesser extent, public works. Based on the growth of the market and its positive outlook, the Group intends to carry out further investments in the US in 2016, aiming at strengthening the Group's position and further improve its competitiveness.

In Egypt, demand for building materials should continue growing which should subsequently also lead to a more sustainable balance between cement supply and demand in the market. The Group continues with its investments which will allow for the utilization of solid and alternative fuels in Egypt, thereby ensuring the plants' energy sufficiency and improve the Group's cost base. It is expected that Beni Suef will run exclusively on solid fuels within March 2016 and the Alexandria plant by the end of 2016.

Construction activity in the countries of Southeastern Europe where the Group is present is expected to remain anemic, possibly at levels even slightly lower than those of the previous year. The region continues to be affected by the economic slowdown of neighbouring Eurozone countries, subsequently posting low growth rates.

In Greece, demand should improve somewhat owing to the realization of certain public works, albeit still remain at extremely low levels. Current conditions do not offer cause for optimism, at least not in the short-term, since any recovery in the sector is directly correlated with economic growth and the attendant increase in household disposable income, the improvement in employment and the availability of bank funding. The Group has undertaken a series of measures to ensure the uninterrupted operation of its plants, whose production is expected once again in 2016, to be routed largely towards exports, under extremely competitive conditions.

At December 31, 2015, the Group's subsidiary, Titan America, had unrecognized deferred tax assets totaling approximately \$101 million arising from its net operating loss and interest expense carry-forwards. The determination of the amount of tax attribute carry-forward to recognize is, in part, subjective and requires management judgment in assessing future profitability and recoverability. While the Titan America experienced a tax loss in 2015 (and cumulatively from 2013 – 2015), the level of loss in 2015 was lower than in the two previous years and the Titan America's operating profitability has improved sequentially during the last two years.

The Group will reassess the amount of unrecognized deferred tax assets in 2016 and, depending on the trend in earnings experienced by Titan America, all or a portion of the previously unrecognized deferred tax asset may be recognized in 2016 with a corresponding benefit to reported tax expense and net income.

(For further details on taxes please refer to Note 8)

CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT

In the light of COP21 in Paris and the adoption of the new framework of Sustainable development Goals, the need to strengthen and expand collaborative action, in order to meet the emerging social and environmental challenges was stressed in 2015 by all,

For TITAN Group, collaborative action is an integral part of its sustainability strategy since 2000. First in Greece and then in all the other countries, TITAN Group made leading steps for the creation of local networks in partnership with stakeholders, thus seeking to promote sustainability and corporate social responsibility.

In 2015 we moved a step further joining our efforts with another 10.000 companies from all European countries to support the European Business Manifesto "Last Call for Action 2020" and the European Pact 4 Youth, two complementary initiatives that fully align with our priorities for 2020. We also continued to focus on the three areas that are the most material for our business and our key stakeholders: health and safety, environment and stakeholder engagement.

On the subject of safety, despite our efforts an overall decline of our performance accompanied by two fatal accidents, one involving our employees and one involving contractors' employees in Egypt, underlined the need for enhanced continuous alertness and consciousness at all levels. In respect to new investments made for the environment, we continued to strengthen our overall capacity to control and lessen our air emissions to the minimum possible, while new steps forward were made in the alternative fuels' utilization Egypt.

Acknowledging the significance of thinking globally but at the same time taking action at a local level, TITAN Group expanded in 2015 its social solidarity actions in Greece in an effort to actively contribute to the management of the refugee crisis and has further enhanced its dialogue efforts with the local stakeholders in Egypt.

BUSINESS MODEL

The corporate strategy of the Group, which forms the basis for the long-term pursuit of Titan's targets and aims, is firmly focused on the following principles and priorities:

  • Geographic diversification
  • Continuous competitive improvement
  • Vertical integration
  • Focus on human capital and Corporate Social Responsibility

Titan's core competence is the production and commercialization of cement, ready-mix concrete, aggregates and related building materials.

The Group operates in 14 countries in Europe, North America and the Eastern Mediterranean and is organized in the following four operating (geographic) segments:

  • Greece and Western Europe
  • North America
  • South East Europe
  • Eastern Mediterranean

Each operating segment is a cluster of countries. The aggregation of countries is based on geographic proximity.

RISKS AND UNCERTAINTIES FOR 2015

FINANCIAL RISKS

The Group, by nature of its business and geographical positioning, is exposed to financial risks. The Group's overall financial risk is managed by Group Finance and Treasury units, aiming to minimize the potential unfavorable impact deriving from the markets' fluctuations on Group's financial performance. The Group does not engage in speculative transactions or transactions which are not related to its commercial, investing or borrowing activities.

Liquidity risk:

The Group, in addition to its operating cash flows, maintains sufficient cash and other liquid assets, as well as extensive credit lines with several international banks to ensure the fulfillment of its financial obligations.

Moreover, Group's solid creditworthiness allows it to make efficient use of international financial markets for financing purposes.

Group Treasury controls Group funding as well as the management of liquid assets.

Interest rate risk:

The ratio of fixed to floating rates of the Group's borrowings is determined by market conditions, Group strategy and financing requirements. Occasionally, interest rate derivatives may be used to minimize the relevant risk and balance the mix of fixed and floating rates of the Group's borrowings.

At December 31 st 2015, the group's ratio of fixed to floating interest rates, taking into account outstanding swaps, stood at 43% / 57% (31.12.2014: 47% / 53%).

(For further analysis on this ratio refer to Note:33).

Interest rate sensitivity:

The Group's interest rate sensitivity analysis has been determined based on the interest rate exposure relating to floating rate liabilities. At December 31st 2015, a ±1 percentage point shift in interest rates, with all other variables held constant, would result in approximately €4.7 million (2014: €3.8 million) of annual additional/lower financial expenses before tax. The Group's sensitivity to interest rates is greater than last year mainly due to higher floating debt in absolute amount.

(For further details on sensitivity analysis refer to Note: 33)

Foreign Currency risk:

Group exposure to exchange rate (FX) risk derives from existing or expected cash flows denominated in currencies other than the Euro (imports/exports) and from international investments.

FX risks are managed using natural hedges, FX derivatives/swaps and FX forwards. Borrowings denominated in the same currency as the assets that are being financed, create a natural hedge for investments in foreign subsidiaries exposed to FX conversion risk. Part of the financing of Group activities in the USA, Egypt and Albania, is in different currencies (euro) than their functional ones. Their refinancing in local currencies is examined at regular intervals.

(For further details on group's FX hedging position refer to Note: 33)

Foreign currency sensitivity:

The Group's sensitivity analysis has been determined based on the Group's exposure that arises on financial assets and liabilities that are denominated in a foreign currency other than the Group's functional currency. The Group's net foreign currency transaction risk mainly arises from USD, EGP, RSD, LEK, GBP and TRY.

At December 31st 2015, a ±5 percentage point shift in foreign currencies, with all other variables held constant, would result in approximately €0.5 million (2014: €1.5 million) of additional/lower net foreign exchange gains/losses.

(For further details on FX sensitivity analysis refer to Note: 33)

Credit risk:

Credit risk arising from financial institutions' inability to meet their obligations towards the Group deriving from placements, investments and derivatives, is mitigated by pre-set limits on the degree of exposure to each individual financial institution. At -31st December 2015, the Group's majority financial assets and derivative financial instruments were held with investment grade financial institutions.

OPERATIONAL RISKS

Risks arising from the climate and natural disasters:

The Group operates in countries and areas such as Greece, Egypt, Turkey and Florida in the USA which are exposed to natural hazards (climate and geological) such as typhoons, sandstorms, earthquakes etc. Among the measures adopted by the Group to mitigate the disastrous effects of these phenomena, is the adoption of stricter designing standards than the ones stipulated in the relevant legislation. In addition, the Group has in place emergency plans to safeguard its industrial infrastructure and protect the lives of the Company's employees.

Political Risks:

The Group operates in regions that at times experience persistent political instability, riots, uprisings and generally various conditions that lead to extreme volatility and pose significant risks over the control, normal operation and return on the Group's investments. The aforementioned risks are managed through ad hoc measures aiming at maximum protection of TITAN's regional investments.

RISKS ARISING FROM THE ENFORCEMENT OF CAPITAL CONTROLS IN GREECE

The Legislative Act dated 28.06.2015 declared a bank holiday in Greece while capital controls were imposed. Banks resumed their operations on 20.07.2015 while capital controls still remain in force.

The aforementioned developments had a negative impact on the overall economic activity in Greece and resulted in a slowdown in construction as well. However, risks stemming out of the Group's exposure in Greece are mitigated.

In terms of liquidity, the Group maintains adequate cash reserves (€122 million at 31.12.2015), deposited with international banks outside Greece. Furthermore the Group has successfully diversified its funding sources with more than 85% of its debt being raised in the international capital and bank markets.

The Group's geographical diversification, achieved through investments of over €3 billion since 2000, has extended the business and strengthened TITAN, effectively delinking the Group from Greek sovereign risk. It is noted that on June 29th 2015, Standard & Poor's confirmed Titan's credit rating as 'BB' and improved its outlook from 'stable' to 'positive'. The Group continuously evaluates the economic environment in Greece in order to assess the risks related to its business and timely take the necessary mitigating actions.

Risks associated with production cost:

The consumption of thermal energy, electricity and raw materials constitutes the most important element of the Group's cost base. The fluctuation in the price of fossil fuels poses a risk which greatly affects the cost of production.

In order to mitigate the effects of such a risk, the Group invests, and will continue to do so, in low energy-requirement equipment and in the replacement of fossil fuels by alternative fuels.

Ensuring access to the required quality and quantity of raw materials is an additional priority, which is taken into account when planning new investments.

With regard to existing units, the Group ensures the adequate supply of raw materials for the duration of the life of its industrial units.

The Group will also continue to invest in the use of alternative raw materials in order to gradually lessen its dependence on natural raw materials. To this end, the Group has set specific quantifiable targets for the substitution of natural raw materials by alternative raw materials, such as natural waste, and is closely monitoring the evolution of this activity.

Risks regarding safety at work:

Safety at work for Titan employees is a top priority.

The systematic effort to improve safety across all of the Group's operations includes among others, the appointment of an adequate number of safety officers to all productive units. Planning includes a variety of training programs aiming at the systematic training and education of employees and the firm application of systems and processes, which are designed and controlled by the Company's Health and Safety Division.

Environmental risks:

Protection of the environment and sustainable development are core priorities for the Group. To that end, the Group will continue its efforts to reduce its carbon footprint with an aim to achieve a total reduction of 22% in 2015 compared to 1990.

Furthermore, in order to limit the possibility of environmental damage, the Group will continue to systematically invest in the Best Available Technologies for the protection of the environment.

Moreover, the Group monitors closely forthcoming changes in the legislation regarding the protection of the environment and takes in advance all necessary measures for their implementation, in order to avoid the risk of non-timely compliance, when the new regulations come into effect.

Corruption Risk:

According to the Corruption Perceptions Index issued by Transparency International, the risk of corruption in many of the countries where the Group operates is increasing.

This index and the relevant reports per country are monitored systematically by both the local management and the Corporate Social Responsibility Committee on a Group level, so that appropriate policies are designed and all necessary measures are taken to effectively address the relevant risk.

The explicit provisions that have been included in the Group's Code of Conduct, the operation of hotlines where employees are encouraged to report cases of corruption that are brought to their attention, the systematic planning of internal audits by the Internal Audit Department in those operations which are more exposed to bribery and corruption, are among the policies implemented to effectively address these risks.

MAJOR TRANSACTIONS BETWEEN COMPANY AND RELATED PARTIES

Transactions between the Company and related entities, as these are defined according to IAS 24 (related companies within the meaning of Article 42e of Codified Law 2190/1920), were undertaken as per ordinary market terms.

The amounts of sales and purchases undertaken in 2015, and the balances of payables and receivables as at 31.12.2015 for the Group and the Company, arising from transactions between related parties are presented in the following tables:

(all amounts in Euro thousands) Amounts
Group Sales to
related
parties
Purchases
from related
parties
Amounts
owed by
related parties
owed to
related
parties
Other related parties - 1,537 - 223
Executives and members of the Board - - 35 -
- 1,537 35 223

(all amounts in Euro thousands)

Company Sales to related
parties
Purchases from
related parties
Amounts owed
by related
parties
Amounts owed
to related
parties
Aeolian Maritime Company 1 - - 257
Albacem S.A. 2 - - 350
Interbeton Construction Materials S.A. 20,222 5,025 7,050 755
Intertitan Trading International S.A. 5,550 - 750 -
Quarries Gournon S.A. 3 - 1 -
Adocim Cimento Beton Sanayi ve Ticaret A.S. 38 - - -
Titan Cement International Trading S.A. 2 - - -
Fintitan S.R.L. 8,425 - 3,681 -
Cementi Crotone S.R.L. 420 - - -
Titan Cement U.K. Ltd 18,015 53 3 -
Usje Cementarnica AD 7,794 - 852 -
Beni Suef Cement Co.S.A.E. 1,869 - 2,758 -
Alexandria Portland Cement Co. S.A.E 1,036 10 1,191 -
Cementara Kosjeric DOO 973 4 312 -
Zlatna Panega Cement AD 1,110 - 1,074 -
Τitan Αmerica LLC 4,621 7 1,506 -
Essex Cement Co. LLC 37,240 57 2,341 -
KTIMET Quarries S.A. - 2 - 2
Antea Cement SHA 1,550 3 284 -
Titan Global Finance PLC - 22,301 - 307,105
SharrCem Sh.P.K 1,327 - 403 -
Other subsidiaries 34 - 126 -
Other related parties - 1,537 - 223
Executives and members of the Board - - 35 -
110,232 28,999 22,367 308,692

Regarding the transactions above, the following clarifications are made:

The revenue presented relates to sales of the company's finished goods to the aforementioned subsidiaries, while purchases relate to purchases of raw materials and services by the company from the said subsidiaries. Company receivables primarily relate to receivables from cement sales to the said subsidiaries.

Company liabilities primarily relate to one outstanding floating rate loan agreement of €96.81 million maturing in 2018 at the Euribor rate plus a 3.80% spread per annum, as well as two outstanding fixed rate loan agreements: a) one of €97 million maturing in 2017 at a fixed rate of 8.80% per annum to maturity and b) one of €110.17 million maturing in 2019 at a fixed rate of 4.30% per annum to maturity. All were concluded with the UK based subsidiary Titan Global Finance Plc.

Company receivables primarily relate to receivables from cement sales to the said subsidiaries.

The remuneration of senior executives and members of the Group's Board of Directors for 2015 stood at €5.8 million versus €4.9 million last year.

TREASURY SHARES

Sale of treasury stock in the framework of Stock Option Plan

In May 2015, the Company carried out an off – exchange sale of 146,958 common treasury shares representing 0.2% of its paid up share capital, to 67 Titan Group executives, at a sale price per share equal to the nominal value of the Company share i.e. euro 4 per share and at a total sale price of euro 587,832.

In November 2015, the Company carried out an off-exchange sale an off – exchange sale of 12,361 common treasury shares representing 0.02% of its paid up share capital, to 5 Titan Group executives at a sale price per share equal to the nominal value of the Company's share i.e. euro 4 per share and at a total sale price of euro 49,444.

GOING CONCERN DISCLOSURE

Under Provision C.1.3 of the UK Corporate Governance Code, as revised in September 2014, with the provisions of which the Company complies, the Directors have taken into account the following:

  • the Company's financial position;
  • the risks facing the Company that could impact on its business model and capital adequacy; and
  • the fact that no material uncertainties are identified to the Company's ability to continue as a going concern in the foreseeable future and in any event over a period of at least twelve months from the date of approval of the Financial Statements

and state that they consider it appropriate for the Company to continue to adopt the going concern basis in preparing its Financial Statements and that no material uncertainties are identified to the Company's ability to continue to adopt the going concern basis in preparing its Financial Statements in the foreseeable future and in any event over a period of at least twelve months from the date of approval of the Financial Statements.

VIABILITY STATEMENT

In accordance with provision C.2.2 of the 2014 revision of the UK Corporate Governance Code, the Directors have assessed the prospects of the Company having regard on its current position and the major risks facing the Company over a period of five years, which was considered as appropriate to draw conclusions. Therefore, the Board has a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment.

ANNUAL REPORT OF THE BOARD OF DIRECTORS AND FINANCIAL ACCOUNTS FOR THE FISCAL YEAR 2015

The Board of Directors considers that the Annual Report and the Financial Accounts for the fiscal year 2015, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, business model and strategy.

EXPLANATORY REPORT OF THE BOARD OF DIRECTORS

(Pursuant to article 4 paragraph 7 of Law 3556/2007)

1. Structure of the Company's share capital

The Company's share capital amounts to Euro 338,530,112, and is divided into 84,632,528 shares with a nominal value of 4 Euro each, of which 77,063,568 are common shares representing 91.057% of the total share capital and 7,568,960 are preferred shares without voting rights, representing approximately 8.943%, of the total share capital.

All shares are registered and listed for trading in the Securities Market of the Athens Exchange (under "Large Cap" classification).

Each share carries all the rights and obligations set out in law and in the Articles of Association of the Company. Ownership of a share automatically signifies acceptance of the Articles of Association of the Company and of the decisions made in accordance with those by the various corporate bodies.

Each common share grants the holder one vote. The preferred shares carry no voting rights.

In accordance with the resolution dated 27.06.90 of the Ordinary General Meeting of Shareholders of the Company, on the basis of which an increase in the share capital of the Company through the issuance of preferred non-voting shares had been decided, the privileges conferred to holders of preferred non-voting shares were as follows:

A. Receipt, in priority to common shares, of a first dividend from the profits of each financial year; in the event of non distribution of dividend or of distribution of a dividend lower than the first dividend, in one or more financial years, holders of preferred shares would be entitled to a preferential payment of this first dividend cumulatively and corresponding to the financial years in question, from the profits of subsequent years. Holders of preferred non-voting shares would be entitled, on equal terms with holders of common shares, to receive any additional dividend which would be distributed in any form. It is worth noting however that pursuant to the amendment made in accordance with article 79 section 8 of Law 3604/2007 of the provisions of section 2 of article 45 of Law 2190/1920 on the distribution of profits of Sociétés Anonymes and the abolishment of the mandatory distribution of a first minimum dividend equal to 6% of the paid up share capital, it is only the mandatory distribution of dividend equal to 35% of the net profits that applies. Consequently, the above privilege of receipt of a first dividend by the holders of preferred non-voting shares has thereafter become redundant.

B. Preferential return of the capital paid up by holders of preferred non-voting shares from the product of the liquidation of Company assets in the event of the Company being dissolved Holders of preferred non-voting shares will share on a pro rata basis the liquidation proceeds with holders of common stock, if the proceeds in question are higher than the total paid-up share capital.

The liability of the shareholders is limited to the nominal value of the shares they hold.

2. Restrictions on transfer of Company shares

The Company shares are freely negotiable in the Athens Stock Exchange and are transferred as provided by law. The Articles of Association of the Company do not include any restrictions on the transfer of shares.

3. Significant direct or indirect holdings in the sense of articles 9 to 11 of Law 3556/2007

On 31.12.2015 the following shareholders held more than 5% of the total voting rights in the Company including voting rights relating to shares which are co-owned by some of them and are held in a joint investment account:

  • "E.D.Y.V.E.M. Hellenic Construction Materials, Industrial, Commercial Transportation Public Company Limited", holding 11.16% of the total voting rights in the Company;
  • Mr. Andreas L. Canellopoulos, holding 10.72% of the total voting rights in the Company;
  • The "Paul and Alexandra Canellopoulos Foundation" holding 9.93% of the total voting rights in the Company; and
  • Mr. Leonidas A. Canellopoulos, holding 6.25% of the total voting rights in the Company.

On 10.3.2016 the shareholders who held more than 5% of the total voting rights in the Company were as above.

4. Shares conferring special control rights

None of the Company shares carry any special rights of control.

5. Restrictions on voting rights

With the exception of the preferred non- voting shares, the Articles of Association of the Company contain no restrictions on voting rights.

6. Agreements between shareholders of the Company, which are known to the Company and contain restrictions on the transfer of shares or on the exercise of voting rights

It is known to the Company that the Statutes of "E.D.Y.V.E.M. Hellenic Construction Materials, Industrial, Commercial Transportation Public Company Limited" of Nicosia - Cyprus, holding in total 8,600,000 common Company shares, which represent 11.16% of the total voting rights in the Company and which have been contributed to it

(E.D.Y.V.E.M.) by the Company Directors Messrs. Andreas Canellopoulos, Dimitri Papalexopoulos, Nellos Canellopoulos, Alexandra Papalexopoulou - Benopoulou, Panagiotis ( Takis) Canellopoulos and other Company shareholders, include restrictions on the transfer of the Company ( Titan S.A.) shares held by it.

7. Rules for the appointment and substitution of Directors and for the amendment of the Articles of Association, which deviate from the provisions of Codified Law 2190/1920

The Company's Articles of Association (article 25), within the powers vested by Codified Law 2190/1920, as amended by Law 3604/2007, provide the following regarding the appointment and substitution of its Directors:

a. The Board of Directors may elect Directors to replace any of its members who have resigned, are deceased or lost their status in any other way, provided that the replacement of the aforementioned Directors is not possible by substitute Directors elected by the General Meeting. The above-mentioned election by the Board of Directors is effected by a decision of at least seven (7) of the remaining Directors and is valid for the remaining term of office of the Director being replaced.

b. The remaining Directors may continue to manage and represent the Company even if the missing Directors are not replaced as per the previous paragraph, provided that they are more than half the number of Directors prior to the occurrence of the abovementioned events.

c. In any case, the remaining Directors, irrespective of their number, may convoke the General Meeting for the sole purpose of electing a new Board of Directors.

The provisions of the Company's Articles of Association regarding the amendment of their own provisions do not deviate from the provisions of Codified Law 2190/1920.

8. Competence of the Board of Directors or of the appointed members thereof for the issuing of new shares or the repurchase of shares/share buy-back of the Company pursuant to article 16 of Codified Law 2190/1920

According to the provisions of article 6 par. 3 of the Company's Articles of Association, the General Meeting may, by a resolution passed by the extraordinary quorum and majority of article 20 of the Articles of Association, delegate to the Board of Directors the power to increase the share capital by a decision of its own, pursuant to the provisions of article 13, par. 1, subparagraph (c) of Codified Law 2190/1920 and without prejudice to par. 4 of the same article.

Also, according to the provisions of article 13, par. 13 of Codified Law 2190/1920, by a resolution of the General Meeting passed under an increased quorum and majority in accordance with the provisions of paragraphs 3 and 4 of article 29 and of paragraph 2 of article 31 of Codified Law 2190/1920, a programme can be established for the offering of shares to the Directors and to the Company's personnel, as well as to personnel of affiliated companies, in the form of stock options, in accordance with the specific terms of such resolution, a summary of which is subject to the publication formalities of article 7b of Codified Law 2190/1920. The par value of the shares offered may not exceed, in total, one tenth (1/10) of the paid-up capital on the date of the resolution of the General Meeting. The Board of Directors issues a decision regarding every other related detail, which is not otherwise regulated by the General Meeting and, depending on the number of security-holders who have exercised their options, the Board of Directors decides on the corresponding increase of the Company's share capital and on the issuing of new shares.

According to the provisions of article 16 of Codified Law 2190/1920, subject to prior approval by the General Meeting, the Company may acquire its own shares, under the responsibility of the Board of Directors, provided that the par value of the shares acquired, including the shares previously acquired and still held by the Company, does not exceed one tenth (1/10) of its paid-up share capital. The resolution of the General Meeting must also determine the terms and conditions of the acquisitions, the maximum number of shares that may be acquired, the duration of the period for which the authorization is given, which may not exceed 24 months, and, in the case of acquisition for value, the maximum and minimum consideration.

In line with the above provisions, the General Meeting of Shareholders by virtue of its decision dated 20.6.2014, has approved the share buy-back of common and preferred treasury shares by the Company in accordance with article 16 paragraph 1 of Law 2190/1920. More specifically, the General Meeting of Shareholders has approved the share buy –back of up to 10% of the Company's paid up share capital, within a 24 month period, namely from 21.6.2014 until 20.6.2016, at a maximum purchase price of €40 per share and at a minimum purchase price equal to the nominal value of the Company share, namely €4 per share, provided that the Board of Directors considers such share buy-back to be more beneficial compared to any other available investment opportunity and provided that the Company has sufficient liquidity.

In implementation of the abovementioned resolution of the General Meeting dated 20.6.2014 there has been no buy back of treasury shares.

The total number of own shares currently held by the Company in implementation of relevant past resolutions of the General Meeting of Shareholders amounts to 2,760,593 common shares and to 5,919 preferred shares without voting rights, representing in total 3.27 %, of the Company's paid up share capital.

9. Significant agreements put in force, amended or terminated in the event of a change in the control of the Company, following a public offer

The Company has no agreements which become effective, are amended or terminated in the event of a change in the control of the Company specifically following a public offer.

It should be noted, though, that there are loan and other agreements in place, which provide, as it is common in such agreements, the right of the counterparty, lending bank or bond holder, to request, under certain conditions, the early repayment of the loan or bond or their exit from the Group companies where they participate, as the case may be, in the event of a change of control in the Company. However, this right is not granted specifically in case the change of control in the Company results from a public offer.

The most significant agreements which include a change of control clause are the following:

  • a) A Multicurrency Revolving Facility Agreement up to the amount of Euro 300 million entered into among the Group's subsidiary Titan Global Finance Plc, a syndicate of lending banks and the Company as Guarantor;
  • b) A Euro Bond issue of a nominal amount of Euro 200 million (on 31.12.2015 Euro 197 million outstanding) issued by the Titan Global Finance Plc and guaranteed by the Company;
  • c) A Euro Bond issue of a nominal amount of Euro 300 million ( on 31.12.2015 Euro 287.17 million outstanding) , issued by the Titan Global Finance Plc and guaranteed by the Company
  • d) A Revolving Facility Agreement up to the amount of USD 50 million entered into among the Group's subsidiary Titan America LLC, HSBC and the Company as Guarantor;
  • e) A Multicurrency Revolving Facility Agreement for an amount up to Egyptian Pounds 670 million entered into among the Group's subsidiary Beni Suef Cement Company S.A., a syndicate of lending banks and the Company as Guarantor;

  • f) A Shareholders' Agreement entered into among Titan Egyptian Investments Limited, Alexandria Development Limited, Titan Cement Company S.A. and International Finance Corporation (IFC) relating to the purchase by the latter of a minority interest in Titan's investments in Egypt and

  • g) A Shareholders' Agreement entered into among Titan Cement Cyprus Limited, Aemos Cement Limited, Titan Cement Company S.A. and International Finance Corporation (IFC) relating to the purchase by the latter of a minority interest in Titan's investments in Serbia, FYROM and Kosovo.

10. Significant agreements with members of the Board of Directors or employees of the Company

The Company has no significant agreements with members of the Board of Directors or its employees with regard to the payment of compensation, especially in the case of resignation or dismissal without good reason or termination of their period of office or employment due to a public offer.

STATEMENT ON CORPORATE GOVERNANCE

I. Reference to the Corporate Governance Code applicable to the Company and the public website where a copy of the Code can be found

TITAN CEMENT COMPANY S.A. (hereinafter "the Company") is a société anonyme whose shares (ordinary and preference) are admitted to trading on the Athens Exchange.

This Corporate Governance Statement constitutes a special part of the Board of Directors' Annual Report pursuant to the provisions of Article 2(2) of Law 3873/2010.

The Company by virtue of its Board of Directors' resolution dated 16.12.2010 has officially adopted the UK Corporate Governance Code (hereinafter "the Code"), as amended in September 2014 . A copy of the Code can be found on the website of the UK Financial Reporting Council (https://www.frc.org.uk/Our-Work/Publications/Corporate-Governance/UK-Corporate-Governance-Code-2014.pdf ). A Greek translation of this document can be found on the company's website (http://www.titan.gr), at the following address: http://www.titan.gr/UserFiles/File/omilos/190118\_Code-company-government.pdf .

The Company has complied throughout 2015 with the provisions of the Code except in the aspects listed in Section VIII herein; for any deviation from a particular provision an explanation is included.

II. Reference to the corporate governance practices implemented by the Company in addition to the statutory mandates and reference to the website where these are published

Further to the provisions stipulated by the Greek legislation, and more specifically by Laws 2190/1920, 3016/2002, 3693/2008, 3884/2010 and 3873/2010, the Company has also adopted the Code. The Company, apart from the mandates set out in the Greek legislation and the Code, has also established additional criteria that must be met by the independent members of the Board in relation to their independence. These requirements are stated in the paragraph titled "Nominating candidates for the Board of Directors" in Section III herein. They can also be found on the Company's website http://www.titan.gr , and at the following address: http://www.titan.gr/en/titan-group/corporate-governance/board-of-directors

III. Reference to the composition and modus operandi of the Board of Directors and of other administrative, management and supervisory bodies or committees of the Company.

BOARD OF DIRECTORS

RESUMES OF THE MEMBERS OF THEBOARD OF DIRECTORS

CHAIRMAN

ANDREAS CANELLOPOULOS

Born in 1940.

Non-executive Director since 01.03.2006.

Member of the Nomination and Corporate Governance Committee.

Chairman of the Company's Board of Directors since 1996. From 1983 until 1996, he served as Managing Director of the Company. He is a member of the Board of Directors since 1971.

He is a member of the Board of Directors of the PAUL AND ALEXANDRA CANELLOPOULOS FOUNDATION and has served as Vice Chairman of the Board of ALPHA BANK (1995 - 2006) and Chairman of the Board of HELLENIC FEDERATION OF ENTERPRISES (SEV) (1994 to 2000).

VICE CHAIRMAN

EFSTRATIOS - GEORGIOS (TAKIS) ARAPOGLOU

Born in 1951.

Independent, non-executive Director since 18.5.2010 (2nd term).

Senior Independent Director.

Member of the Remuneration Committee.

He has held a number of senior positions in international investment banks in London (1977-1991) and has held management positions in Greek banks and subsidiaries of international banks in Greece (1991-2000). He has served as Managing Director and Global Head and Securities Industry of CITIGROUP in London (1999-2004) and Chairman and Managing Director of the National Bank of Greece (2004-2009). He has also been elected to the position of Chairman of the Hellenic Bank Association (2005-2009). He has served as Managing Director of commercial banking and executive member of the Board of Directors of the investment group EFG – HERMES HOLDING (2010-2013).

He is Chairman and a non-executive member of the Board of Directors of TSAKOS ENERGY NAVIGATION (TEN) LIMITED, a company listed on the New York Stock Exchange, a non-executive director of EFG Hermes Holding SAE, listed on the stock exchanges of Cairo and London, a nonexecutive director of Credit Libanais SAL and of Bank Alfalah, representing the International Finance Corporation (IFC) on the Bank's Board. Bank Alfalah is listed on the Stock Exchange of Karachi.

He holds degrees in Mathematics, Naval Architecture and Business Administration from Greek and British universities.

MANAGING DIRECTOR

DIMITRIOS PAPALEXOPOULOS

Born in 1962.

Executive Director since 24.6.1992.

Managing Director since 1996 and an executive officer of the Company since 1989.

He spent his early career as a business consultant of McKinsey & Company Inc. in USA and Germany.

He is Vice-Chairman of the Board of Directors of the HELLENIC FEDERATION OF ENTERPRISES (SEV) and of the SEV Committee for Sustainable Development (SEV VIAN) and a member of the Board of Directors of the FOUNDATION FOR ECONOMIC & INDUSTRIAL RESEARCH (IOBE), the Hellenic Foundation for European and Foreign Policy (ELIAMEP) and of the European Round Table for Industrialists (ERT).

He studied Electrical Engineering (Dip. EL-Ing. ETH, 1985) at the Swiss Federal Institute of Technology Zurich (FTH) and Business Administration (MBA 1987) at HARVARD UNIVERSITY.

MEMBERS

EFTICHIOS VASSILAKIS

Born in 1967.

Independent, Non-Executive Director since 10.5.2007 (3rd term).

Member of the Nomination and Corporate Governance Committee and

of the Remuneration Committee.

He is Managing Director of AUTOHELLAS S.A. (HERTZ), Vice Chairman of AEGEAN AIRLINES S.A. and OLYMPIC Air and a member of the Board of Directors of FOURLIS HOLDINGS S.A. and of PIRAEUS BANK.

He is also Vice-Chairman of the Greek Tourism Confederation (SETE) and a member of the Board of Directors of HELLENIC FEDERATION OF ENTERPRISES (SEV).

He studied at YALE UNIVERSITY and at COLUMBIA BUSINESS SCHOOL of New York (MBA).

EFTHYMIOS VIDALIS

Born in 1954.

Executive Director since 15.06.2011.

Group's consultant on matters of Strategy and Sustainable Development.

From 2004 until 15.06.2011 he served as an Independent Non-Executive director.

He was appointed by the Hellenic Republic as Negotiator to the negotiations in relation to the reset of the Motorway Concessions (2012-2013), which have been successfully completed.

He served as Managing Director (2001-2011) and Chief Operating Officer (COO) (1998-2001) of S&B INDUSTRIAL MINERALS S.A and was a member of the company's Board of Directors for 15 years. He worked for Owens Corning in U.S.A. from 1981 until 1998 and from 1994 to 1998 he served as Chairman of the global activities of Synthetic Materials (Composites) and Insulation Materials consecutively.

He is serving as General Secretary of the Hellenic Federation of Enterprises (SEV) and Chairman of the Hellenic Federation of Enterprises Committee for Sustainable Development. From 2005 to 2009, he served as Chairman of the Greek Mining Enterprises Association (S.M.E.). He is also a member of the Board of Directors of Alpha Bank and of FUTURE PIPE INDUSTRIES in DUBAI.

He studied Political Sciences (BA) and Business Administration (MBA) at HARVARD UNIVERSITY.

VASSILIOS ZARKALIS

Born in 1961.

Executive Director since 14.06.2013.

Head of the Group's U.S. Region.

He was the Chief Financial Officer (CFO) of the Group from 2010 until May 2014 and an Executive Director for Business Development and Strategic Planning from 2008 until 2010.

For 18 years, he held a number of global business leadership positions in USA and Switzerland with the Dow Chemical Co. Among others, he served as Vice President of Dow Automotive, Business Director for Specialty Plastics & Elastomers, Business Director for Synthetic Latex, etc.

He holds a bachelor's degree in Chemical Engineering from the NATIONAL TECHNICAL UNIVERSITY OF ATHENS (1985) and a master's degree (MSc) from the PENNSYLVANIA STATE UNIVERSITY in USA (1987).

NELLOS CANELLOPOULOS

Born in 1964.

Executive Director since 24.6.1992.

He is the External Relations Director of TITAN GROUP since 1996.

He was previously a senior officer in the Sales Division of the Company (1990-1996) and a senior officer at IONIA S.A. (1989 and 1990).

He is Chairman of the Board of Directors of the PAUL AND ALEXANDRA CANELLOPOULOS FOUNDATION and a member of the Board of Directors of the HELLENIC CEMENT INDUSTRY ASSOCIATION.

TAKIS-PANAGIOTIS CANELLOPOULOS

Born in 1968.

Executive Director since 10.5.2007.

Investor Relations Director of TITAN Group since 2001.

From 1995 to 2001, he was a senior officer in the Finance Department of TITAN Group. He had worked previously as a financial analyst in AIG and the Financing Division of EFG EUROBANK.

He is also a member of the Board of Directors of CANELLOPOULOS ADAMANTIADIS INSURANCE Co. (AIG Hellas) and GRIVALIA PROPERTIES REIC and as a member of the UNION OF LISTED COMPANIES (ENEISET).

He studied Economics (BA) at BROWN UNIVERSITY in U.S.A. and Business Administration (MBA) at the NEW YORK UNIVERSITY / STERN SCHOOL OF BUSINESS in U.S.A..

MICHAEL COLAKIDES

Βorn in 1954.

Executive Director since 12.1.2016. Titan Group CFO since 2014 and Senior Strategic Advisor.

He started his career at Citibank Greece as Head of Corporate Finance and Local Corporate Banking (1979 – 1993). In 1993 he was appointed executive Vice Chairman at the National Bank of Greece and Vice Chairman at ETEBA Bank S.A.

From 1994 to 2000, he served as CFO of TITAN Group and was also responsible for a number of acquisitions in S.E. Europe and the U.S.. He also served as an executive director of the Board of the Company ( 1998-2001).

From 2000 to 2007, he served as Vice Chairman and Managing Director of Piraeus Bank S.A. overseeing the domestic Wholesale and Retail Banking business as well as the group's International network and activities. From 2007 to 2013 he was Deputy Chief Executive Officer – Group Risk Executive (2007 – 2013) of EFG Eurobank Ergasias S.A.

He is also a member of the Board of Directors of EUROBANK CYPRUS Ltd.

He has a B.Sc. degree in Economics from the LONDON SCHOOL OF ECONOMICS and an MBA from the LONDON BUSINESS SCHOOL.

DOROS CONSTANTINOU

Born in 1950.

Non-executive Director since 14.06.2013 (1st term).

Chairman of the Audit Committee.

He is a non-executive director and member of the Audit Committee of the Board of Directors of Frigoglass S.A.I.C.

He was appointed Managing Director of Coca-Cola Hellenic Group (2003-2011) and of Frigoglass S.A.I.C. (2001-2003).

He started his career in Price-Waterhouse (1975-1985) and he then joined the management team of Hellenic Bottling Company (3E), where he was appointed Finance Director of the Industrial Division of the Group (1992-1995) and he later became the Deputy Chief Financial Officer of the Group (1995-1996) and Chief Financial Officer (1996-2000).

He studied economics in the UNIVERSITY OF PIRAEUS, from which he graduated in 1974, specializing in Business Administration.

DOMNA MIRASYESI-BERNITSA

Born in 1960.

Independent, Non-Executive Director since 14.06.2013 (1st term).

Chairman of the Nomination and Corporate Governance Committee.

She is a qualified lawyer, member of the Athens Bar Association. She is also a Partner at M&P Bernitsas Law Offices.

She has worked as a legal advisor at the Special Legal Service of the Ministry for Foreign Affairs (1986-1987) and at the Department of Political Science and Public Administration of the University of Athens (1985-1990). She is also a member of the Board of Directors of St. Catherine's British School.

She holds a bachelor's degree from the Law School of the UNIVERSITY OF ATHENS and has obtained a master's degree (LL.M) in European Law from the LONDON SCHOOL OF ECONOMICS.

ALEXANDRA PAPALEXOPOULOU – BENOPOULOU

Born in 1966.

Executive Director since 23.05.1995.

Strategic Planning Director of TITAN Group since 1997.

From 1992 to 1997 she worked as a senior officer in the Group Exports Division. Previously, she had worked for the OECD and the consultancy firm BOOZ, ALLEN & HAMILTON in Paris.

She is a member of the Board of Directors and Treasurer of the PAUL and ALEXANDRA CANELLOPOULOS FOUNDATION, and a member of the Board of Directors of "ALBA College of Business Administration" Association. Since June 2015 she is also a member of the Board of Directors of Coca-Cola HSC AG.

She has served as a member of the Board of Directors of the National Bank of Greece (from 2010 until July 2015), of FRIGOGLASS (from 2003 until February 2015) EMPORIKI BANK (from 2007 until 2009).

She studied Economics at the SWARTHMORE COLLEGE, USA, and Business Administration (MBA) at INSEAD, Fontainebleau, France.

PLOUTARCHOS SAKELLARIS

Born in 1964.

Independent, Non-Executive Director since 14.06.2013 (1st term).

Member of the Audit Committee.

He is a Professor of Economics and Finance at the Athens University of Economics and Business. He was Vice President of the European Investment Bank (2008-2012). Prior to joining the EIB, he held the position of the Chairman of the Council of Economic Advisers at the Greek Ministry of Economy and Finance and was representing Greece in the Economic and Financial Committee of the European Union and acted as Deputy to the Finance Minister at the Eurogroup and ECOFIN Councils, as well as Alternate Governor for Greece at the World Bank. He has also been a member of the Board of Directors of the National Bank of Greece and of the Greek Public Debt Management Agency.

He has taught at the Department of Economics at the University of Maryland, USA and other Universities and he has worked as Economist at the Federal Reserve Board and as Visiting Expert at the European Central Bank (ECB).

He has graduated from BRANDEIS UNIVERSITY, in U.S.A. (B.A.) in Economics and Computer Science. He also holds a Ph.D. in Economics from YALE UNIVERSITY.

PETROS SABATACAKIS

Born in 1964.

Independent, Non-Executive Director since 2010 (2nd term).

Member of the Remuneration Committee.

He is a member of the Board of Directors of National Bank of Greece since 2010. He was Chief Risk Manager for CITIGROUP Inc. (1999-2004) and member of the Management Committee and Director of CITICORP and CITIBANK, N.A. From 1992 to 1997, he was in charge of the financial services subsidiaries of the AMERICAN INTERNATIONAL GROUP, its treasury operations, as well as the market and credit risk activities. He was a member of the executive committee and partner of C.V. STARR. He has also worked at CHEMICAL BANK (now J.P. MORGAN CHASE). He has served as Chairman of PLAN INTERNATIONAL and CHILDREACH (Non-profit Organization), a trustee of the ATHENS COLLEGE in Greece, and a Chairman of the GENNADIUS LIBRARY.

He has earned three degrees from COLUMBIA UNIVERSITY: a bachelor's degree (B.Sc.), a master's degree in Business Administration (M.B.A) and a Ph.D. in Economics.

MICHAEL SIGALAS

Born in 1949.

Executive Director from 28.07.1998 until 12.01.2016.

He has served as Director of the South Eastern Europe and Eastern Mediterranean regions, Head of TITAN Group's International Trade Department and Head of TITAN Group's Exports Department.

He worked in Canada for PRESTCOLD NORTH AMERICA LTD. (1973 to 1979) and he later worked for the HELLENIC AEROSPACE INDUSTRY (1980 to 1985) as commercial director.

He studied Mechanical Engineering at CONCORDIA UNIVERSITY, Canada.

VASSILIOS FOURLIS

Born in 1960.

Independent Non Executive Director since 10.05.2007 (3rd term).

Member of the Audit Committee.

He is chairman of FOURLIS S.A. Holdings. He is also a member of the Board of House Market S.A. (IKEA), of FRIGOGLASS S.A. and of PIRAEUS BANK.

He holds a master's degree from the UNIVERSITY OF CALIFORNIA, BERKELEY (Master's Degree in Economic Development and Regional Planning) and a master's degree from BOSTON UNIVERSITY/BRUSSELS (Master's Degree in International Business).

Company Secretary

ELENI PAPAPANOU

Lawyer

Head Counsel

The Board of Directors' role and competences:

The Board of Directors is the Company's supreme administrative body, which is exclusively responsible for determining the Company's strategy. The Board of Directors has a collective duty to: create long-term value for the Company; defend the interests of shareholders; establish corporate principles and values; create a corporate culture and ethics and ensure that they are embodied in all functions and activities of the Group; ensure the establishment and operation of effective internal control and risk management systems; monitor and resolve any conflicts of interest that may arise for members of the Board of Directors; and senior officers vis-à-vis the interests of the Company; review the performance of the Chairman of the Board of Directors, of the Managing Director and of the senior executives; and ensure that the remuneration policy for executive directors and senior officers of the Company is intended to create long-term value for the Company.

The Board of Directors is exclusively responsible for taking decisions on important issues such as: the approval of the Company's financial statements to be submitted to the General Meeting; the approval of the annual budget; increases in the Company's share capital where required by law or the Company's Articles of Association; the approval of issuing corporate bonds, a power exercisable concurrently with the power of the General Meeting and subject to the provisions of Articles 8 and 9 of Law 3156/2003; convening the General Meeting of Shareholders; making recommendations on items of the agenda at the General Meeting; preparing the Annual Report and the other reports required by the relevant legislation; appointing the company's internal auditors and appointing the Company's legal representatives and special representatives and agents.

Moreover, the Board of Directors is responsible for determining the salary and other remuneration of the Managing Director and other senior officers of the Company and Group, recommending to the General Assembly the approval of stock options schemes for executive directors of the Board and employees of the Company and affiliated companies etc.

The duties of the Chairman of the Board and those of the Managing Director are exercised by different individuals, and the division of their responsibilities is clearly established and expressly set out in the Company's Articles of Association and the Company's Internal Regulation.

Based on the Company's Articles of Association the Board of Directors has the right to issue a resolution delegating and assigning management and representation powers to one or more members of the Board of Directors or to senior officers or executives of the Company under the terms approved, save for the specific powers stated above which are reserved for the exclusive competence of the Board. Moreover, it may also delegate part of its powers to the Executive Committee, whose scope of tasks and responsibilities are stated below.

Following the decision of the General Meeting of Shareholders dated 08.06.2012, the members of the Board of Directors are insured against third party civil liability claims with AIG Europe Limited, duly represented by AIG GREECE S.A..

Composition of Board of Directors:

The current Company Board of Directors consists of 15 members and its term of office expires at the Annual General Meeting in 2016. Fourteen members (14) of the Board have been elected by the Annual General Meeting dated 14.06.2013, whilst one (1) was appointed by the Board of Directors on 12.01.2016 replacing a retired executive director.

Independent board members:

Seven (7) Board members are independent, non-executive members, i.e. persons who have no relationship with the Company or its affiliates and meet all requirements of independence as stipulated in Law 3016/2002, in the Code at point B.1.1. and the additional independence requirement set by the Company, according to which independent non-executive members of the Board of Directors must not hold a larger than 0.1% stake in the share capital of the Company.

This applies to Messrs Efstratios – Georgios (Takis) Arapoglou, Eftychios Vasilakis, Doros Constantinou, Domna Mirasyesi-Bernitsa, Ploutarchos Sakellaris , Petros Sabatacakis and Vasilios Fourlis. These individuals were elected as independent directors by the Annual General Meeting dated 14.06.2013, following the Board of Directors' and the Nomination and Corporate Governance Committee's proposals.

Pursuant to the Greek laws, the Code and the additional requirement posed by the Company, the independent, non-executive members of the Board of Directors must:

  1. Be independent in character and judgement and free from circumstances which are likely to affect their independence.

  2. Not hold directly or indirectly a larger than 0.1% stake in the Company's share capital and have no dependence relationship with the Company or its affiliates.

  3. Not be or have been Chairmen or Chief Executive Officers (CEOs) or executive members of the Board of Directors or officers or employees in the Company or the Group in the last five years.

  4. Not have or had in the last three years any material business or employment relationship, directly or indirectly, with the Company.

  5. Not have received or receive any additional compensation other than their remuneration as members of the Board of Directors.

  6. Not be an immediate family member of any of the aforementioned individuals.

  7. Not be executive members in the Boards of other companies, in which executive directors of the Company are elected as independent members and generally not have significant ties with other members of the Board by virtue of participation in other companies or bodies.

8. Not be representatives of significant shareholders.

9. Not have served for more than nine years as members of the Board of Directors since the date of their first election.

The independent, non-executive directors of the Board do not have executive or managerial duties, however they contribute to the Board and its Committees by: participating in the determination of the Company's strategy; monitoring the suitability and effectiveness of the management, the internal audit and the risk management systems; determining the remuneration of the executive directors of the Board; participating in the selection process of suitable new candidates for the Board; and in the existence of a succession plan.

Independent members of the Board of Directors have the right to meet, without the presence of the executive members or the Chairman, and in any event, whenever they judge that there is such need.

Moreover, they meet, as stated in the Code, once a year under the Senior Independent Director, without the presence of the Chairman and the executive members, in order to evaluate the performance of the Chairman of the Board and once a year under the Chairman, without the presence of the executive members. Meetings with the non-executive directors were held on 18.12.2015 and were led by the Senior Independent Director and the Chairman.

Non-executive Board Members - Executive Board Members

The majority of the members of the Board of Directors of the Company, i.e. eight (8) members out of fifteen (15) consists of non-executive directors.

Non-executive members of the Board of Directors are Messrs Efstratios – Georgios (Takis) Arapoglou, Eftychios Vasilakis, Doros Constantinou, Domna Mirasyesi-Bernitsa, Andreas Canellopoulos, Ploutarchos Sakellaris, Petros Sabatacakis and Vasilios Fourlis.

Non-executive members of the Board of Directors are not involved in the Company's daily management, however their role is to promote all Company goals and help develop proposals on strategy.

The Board of Directors, in accordance with provision B.1.1 of the Code, characterises the following seven (7) out of a total of eight (8) non-executive members as "independent members" of the Board: Messrs Efstratios – Georgios (Takis) Arapoglou, Eftychios Vasilakis, Doros Constantinou, Domna Mirasyesi-Bernitsa, Ploutarchos Sakellaris , Petros Sabatacakis and Vasilios Fourlis. All aforesaid individuals have been elected as independent members of the Board of Directors by virtue of the General Assembly's decision at the meeting of 14.06.2013.

The executive members of the Board of Directors are seven (7): Messrs Eythimios Vidalis, Vassilios Zarkalis, Nellos Canellopoulos, Takis Canellopoulos, Dimitrios Papalexopoulos, Alexandra Papalexopoulou-Benopoulou and Michael Colakides, who was appointed by the Board of Directors on 12.01.2016 replacing the retiring executive director Mr Michael Sigalas until the expiry of the latter's term of office, i.e. the Annual General Meeting in 2016.

Six (6) out of a total of seven (7) executive members of the Board of Directors, including the Chief Executive Officer, Mr Dimitrios Papalexopoulos, come from the shareholding core or senior management and provide their services pursuant to employment agreements with the Company.

The Chairman of the Board

Mr. Andreas Canellopoulos, Chairman of the Board, is one of the Company's main shareholders, and previously served as Managing Director from 1983 to 1996. Since 2006 he has not been involved in the executive management of the Company and is exclusively dedicated to serving as Chairman of the Board. His main task has been to ensure the effective and efficient operation of the Board, facilitate a constructive collaboration between directors of the Board and ensure that decisions taken by the Board reflect the principles and values adopted by the Company.

The Chairman directs the Board's meetings and is responsible for setting the Board's agenda, , arranging for the agenda and related papers and all necessary information to be sent to directors of the Board in good time before the meeting, ensuring that independent and non-executive directors are kept fully updated so that they can effectively perform their monitoring and decision-making role, and facilitating effective communication with shareholders. He is also a member of the Nomination and Corporate Governance Committee established by the Board of Directors.

The Chairman has no other professional commitments and is not a member of the Board of Directors of other companies, other than the Board of the public benefit foundation, the PAVLOS AND ALEXANDRA CANELLOPOULOS FOUNDATION, which is a main shareholder of the Company.

Vice-Chairman of the Board

By virtue of the resolution of the Board of Directors dated 14.06.2013, Mr. Efstratios - Georgios (Takis) Arapoglou, an independent, non-executive member, has been appointed as Vice Chairman of the Board of Directors.

Senior Independent Director

The Board's Vice Chairman, Mr. Efstratios – Georgios (Takis) Arapoglou, has also been appointed by the Board of Directors as the Senior Independent Director pursuant to provision A.4.1 of the Code. In this capacity, Mr Arapoglou has a duty, when required, to assist the Chairman with his tasks and act as mediator of the other members of the Board and be available to resolve shareholder issues, which have not been fully addressed when the shareholders communicate these to the Chairman, the Managing Director or other executive members of the Board of Directors, or when it is not advisable for such problems to be resolved by contacting the aforesaid people.

Company Secretary

The Board of Directors has appointed the Company's in-house counsel, Mrs. Eleni Papapanou, as the Company Secretary, who provides legal support to the Chairman and the members of the Board. The Company Secretary, when acting in such capacity, reports to the Board of Directors and, in hierarchical terms, does not report to any other department of the Company.

Board of Directors meetings

Directors meet as often as required to enable them to discharge their respective duties and responsibilities effectively. The schedule of the Board meetings is confirmed during the last months of the previous year, in order to ensure the highest possible attendance by the directors. Decisions are taken by the Board when more than half of the directors are either present or represented at the meeting and the absolute majority of the directors present or represented at it approve the decision. In any event, there must be at least three directors physically present at the meeting.

Directors of the Board who are absent or unable to attend the meeting for any reason are entitled to appoint as proxy another director of the Board to vote in respect of them.

Each director can be appointed as proxy only for one director and vote in respect of her/him.

Independent members of the Board of Directors can only be represented by other independent members. However, in the event that the Senior Independent Director is unable to attend (a meeting), then she/he can be also represented by the Chairman, who is a non-executive member of the Board of Directors.

Senior officers of the Company or its affiliated companies within the meaning of Article 42e(5) of Codified Law 2190/1920 are entitled to attend meetings of the Board of Directors without voting rights, following an invitation by the Chairman, when issues within their remit are being discussed.

The agenda for the meeting of the Board is prepared by the Chairman and is sent to directors in good time ahead of the meeting, along with any necessary information about the topics to be discussed and the decisions to be taken by the directors.

The minutes of the previous meeting are signed at each subsequent meeting. Those minutes are kept by the Company Secretary and record summaries of the views of members of the Board of Directors, the discussions which took place and any decisions taken.

Nominating candidates for the Board of Directors

The Nomination and Corporate Governance Committee is responsible for the nomination of suitable candidates and the process for gradual renewal of the Board of Directors and the nomination of senior officers in the Company. Another important task for the Committee is to ensure that the Board has the appropriate balance of executive and non-executive directors, and that of skills, experience, and knowledgeto enable them to achieve the highest possible performance. In addition, the Committee should ensure that directors will be able to allocate sufficient time to the company to discharge their responsibilities effectively.

For the selection of the most suitable candidates, the Committee has the right, if it deems it necessary, to use the services of special consultants or to publish the opening.

On joining the Board, directors receive formal induction. Moreover, throughout their term in office, the Chairman ensures that they constantly expand their skills in areas of importance to the Company and their knowledge of the Company its senior officers to enable them to contribute more effectively to the work of the Board of Directors and its various Committees.

Following a relevant recommendation by the Nomination and Corporate Governance Committee the nomination of candidacies and pursuant to the Board of Directors' resolution dated 17.3.2011, the composition of the Board of Directors is governed by the following principles:

A. At least ½ of the members of the Board of Directors, without counting the Chairman, must be independent, non-executive members and must meet the independence criteria laid down in the Greek laws and the Code. In addition, they must not directly or indirectly hold a stake larger than 0.1% in the Company's share capital.

B. Starting from the election of the current Board of Directors, the maximum number of terms for independent members shall be three, i.e. nine years in total of term.

C. The Chairman and at least one of the Vice Chairmen of the Board of Directors must be a nonexecutive member of the Board of Directors and, at least one of them must be an independent, non-executive member.

Obligations of members of the Board of Directors

Members of the Board must attend the scheduled meetings of the Board and its Committees and must be able to allocate the time required to satisfactorily discharge their duties. To that end, before their election they have a duty to inform the Board of Directors about other important professional commitments and whether they serve as directors on the Boards of other companies and to inform the Board of any change in their above professional commitments. The Board of Directors has decided that its executive directors, who offer their services to the Company on the basis of an employment relationship or a contract for the provision of services, cannot serve on the Board of more than two other listed companies.

The members of the Board of Directors must disclose to the Chairman of the Board any factual information that could result in the change of their status as non-executive or independent members of the Board of Directors.

Conflict of interests

All directors must immediately disclose to the Board whether they have any personal interest that conflicts, or possibly may conflict, with the interests of the Company or its affiliates in relation to a transaction or arrangement with the Company or its affiliates . Given their access to privileged information, they must not use such information to directly or indirectly purchase or sell shares in the Company or its affiliates, which are traded on a regulated market, for their own benefit or for members of their family. They must also not disclose that information to other persons or induce third parties to purchase or sell shares in the Company or its affiliate, which are traded on a regulated market, based on the aforesaid privileged information to which they have access.

Furthermore, directors, during their term of office, must not serve as directors on the Boards, or as officers or employees of business entities that are competitors to the Company or the Group's companies, and generally to abstain from any acts that are part of the Company's objects without obtaining prior consent from shareholders, either when acting on their behalf or on behalf of third persons. In the event that they acquire any such status, they need to inform immediately the Chairman of the Board of Directors and resign from the Company's Board of Directors.

BOARD COMMITTEES

The following Committees assist the Board of Directors in its work. They have been set up by the Board and are comprised entirely of independent, non-executive members with the exception of the Nomination and Corporate Governance Committee, to which the Chairman, a non- executive director of the Board, is a member.

The Board of Directors' Committees can also retain the services of specialist technical, financial, legal or other consultants.

Audit Committee

Chairman:

Doros Constantinou, Independent, non-executive Board member

Members:

Ploutarchos Sakellaris, Independent, non-executive Board member,

Vassilios Fourlis, Independent non-executive Board member

Alternate members:

Eftichios Vassilakis , Independent, non-executive Board member,

Petros Sabatacakis , Independent, non-executive Board member

The Audit Committee consists exclusively of independent members of the Board of Directors who have extensive management, accounting and auditing knowledge and experience. The ordinary and alternate members were elected by the General Meeting of Shareholders on 14.06.2013.

The Committee's extensive auditing powers include monitoring the work of the Group Internal Audit Division, which reports directly to the Audit Committee, monitoring the proper and effective implementation of the internal audit system and the risk management system, auditing the financial statements before they are approved by the Board of Directors, nominating external auditors to be recommended by the Board of Directors to shareholders at the General Meeting and monitoring issues relating to the retention of their independence and objectivity, as well as the monitoring of the financial reporting procedures implemented by the Company.

The Committee is also responsible to monitor and review the practical implementation of the confidential reporting procedure; this procedure involves employees reporting any infringement of the Company's Corporate Values or the Company's Code of Conduct to management via the "direct telephone line of communication" (Hotline) which is in operation.

The Audit Committee's duties and competences and its internal regulation have been posted to the Company's website (http://www.titan.gr/en/) at the link: http://www.titan.gr/en/titangroup/corporate-governance/board-of-directors-committees/audit-committee/

The Audit Committee holds at least 4 scheduled meetings per year in order to monitor amongst others the mandatory audit process of the first quarter, half-year, third quarter and annual individual and consolidated financial statements and to monitor the Company's internal audit and risk management systems. It also holds unscheduled meetings whenever that is considered necessary.

In 2015 the Audit Committee held 4 meetings on 13/03, 05/05, 29/07 and 03/11.

At its meetings the Committee addressed all issues within its remit, and in particular it addressed the following topics:

a. the monitoring of the audit process of the Company's financial statements as to their completeness and reliability in terms of the financial information they provide;

b. an audit and evaluation of the Company and Group's risk management systems;

c. safeguarding of the independence of the external auditors and the recommendation on the selection of external auditors to review and audit the 2016 financial statements;

d. monitoring and evaluation of the work of the Internal Audit Division, approval of changes in relation to the recruitment of the internal audit services, and evaluation and recommendations on the annual remuneration for the Group's Internal Audit Director.

In 2015 the Audit Committee held 2 meetings (03/03 and 29/07/2015) with the external auditors of the Company without the presence of the executive officers of the Company. During the aforesaid meetings and at the meetings with the relevant senior officers of the Company, the Audit Committee confirmed the effectiveness of the audit process.

The Audit Committee made a recommendation for the appointment of the external auditor to undertake the audit of the Company and for the financial year 2015. The Board unanimously agreed this recommendation. Therefore, on the recommendation of the Board, the Company's Annual General Meeting dated 19.06.2015 approved the appointment of PwC and the chartered accountants Messrs Marios Psaltis (main auditor) and Dimitrios Sourbis (alternate member) for the audit of the financial statements of the Company and the consolidated financial statements for the financial year 2015, as well as the audit of the Company in relation to the implementation of the tax legislation and the issue of the annual tax certificate pursuant to article 65A of L. 4174/2013 (Code of Tax Procedure).With regard to the remuneration of the aforesaid external auditors for the financial year 2015, the Annual General Meeting dated 19.06.2015 decided the following :

-For the statutory audit of the Company's financial statements, up to the amount of 100,000 euros plus VAT;

-For the statutory audit of consolidated financial statements, up to the amount of 100,000 euros, plus VAT; and

-For the tax audit of the Company, up to the amount of 70,000 euros plus VAT.

PwC undertook also the statutory audit of the Group's 45 subsidiaries, established both in Greece and abroad, for the financial year ending 31 December 2015.

The total costs for the statutory audit of the Company and 45 companies in the Group, established both in Greece and abroad, and the statutory tax audit of the Company and its subsidiaries in Greece for 2015 were 1,220,000 euros compared to 1,179,243 euros in 2014.

Following prior approval by the Audit Committee, PwC provided additional audit-related services, apart from the statutory audit, of a total amount of 156,505 euros, which represents a 12.83% of their total fees for conducting the statutory audit for the Company and the Group's subsidiaries worldwide. These additional services involved tax and accounting services provided to the Company and its subsidiaries for their needs in the financial year 2014, during which the statutory audit of the Company and its subsidiaries was undertaken by Ernst & Young and in the first quarter of the financial year 2015, where it was deemed that for practical reasons PwC should provide them. Since the second quarter of the financial year 2015, these services are undertaken by another service provider. For the financial year ending 31 December 2014, the total amount of fees paid to ERNST & YOUNG for their additional auditing and consulting services was 124,165 euros.

In light of the above, the Audit Committee has decided that the objectivity and independence of the external auditors for the 2015 audit has been fully safeguarded. The independence of the external auditors has been also confirmed in writing by the external auditors themselves in a letter addressed to the Audit Committee.

Remuneration Committee

Chairman: Efstratios –Georgios (Takis) Arapoglou, Independent, non-executive Board member

Members: Eftichios Vassilakis, Independent, non-executive Board member

Petros Sabatacakis, Independent, non-executive Board member

The Remuneration Committee consists exclusively of independent members of the Board of Directors.

The present members of the Committee were appointed by virtue of the Board of Directors' decision dated 14.06.2013.

The Committee's task is to explore and submit proposals for the determination of the directors' fees in accordance with article 24 section 2 of Law 2190/1920, the total amount of annual remuneration received by executive directors of the Board of Directors, and by the senior officers, and to review on a frequent basis the remuneration policy followed by the Company based on the market trends with regard to the pay rates and the human resources management.

Over the course of the year, the Remuneration Committee held a meeting twice, on 14.04.2015 and on 29.09.2015.

A key issue in these meetings was the remuneration policy, the bonuses and the offer of stock option rights for the executive members of the Board of Directors and the other senior officers of the Company for the year 2015, which was later submitted to the Board of Directors for approval.

More specifically, the Remuneration Committee made a recommendation to the Board of Directors in relation to the annual salary and the bonuses for 2015 of the Managing Director and the executive members of the Board, who provide their services to the Company under an employment agreement, as well as the those of the senior officers of the Company (Grade E ) and the Internal Audit Director, based on the assessment of their performance. Moreover, based on the annual assessment of the performance of the aforesaid individuals, the Remuneration Committee made a recommendation to the Board in relation to the stock option rights that each of the aforesaid persons should receive under the 2014 Stock Option Plan and the sums that should be paid by the Company on their behalf in accordance with the Retirement Plans, that the Company voluntarily provides.

The Remuneration Committee also recommended a reasonable increase in the amount of compensation received by the members of the Board of Directors for their participation on the Board and the Board's Committees for the financial year 2015 are not increased. The Board and the Annual General Meeting (pursuant to article 24 para 2 of L. 2190/1920) dated 19.06.2015 agreed this recommendation. Finally, the Remuneration Committee approved the remuneration package for new recruits as senior officers and the amount of compensation that should be paid to the retiring executive director.

The Remuneration Committee's duties and competences and its internal regulation have been posted to the Company's website http://www.titan.gr/en/ at the link: http://www.titan.gr/en/titangroup/corporate-governance/board-of-directors-committees/remuneration-committee/

Nomination and Corporate Governance Committee

Chairman: Domna Mirasyesi-Bernitsa, Independent, non-executive Board member

Members: Eftichios Vassilakis, Independent, non-executive Board member,

Andreas Canellopoulos, non-executive Board member

This Committee consists of three directors of the Board, out of which the two are independent. The Chairman of the Board, who is a non-executive director, is the third member of the Committee. The present members of the Committee were appointed by virtue of the Board of Directors' decision dated 14.06.2013.

All members of the Committee have extensive experience in business administration and corporate governance.

The task of this Committee is to recommend suitable candidates to become members of the Board of Directors, to prepare plans on the succession and continuity of the Company's Management and to provide an opinion on the correct implementation of the Corporate Governance Principles established by the Company and the corporate governance standards stipulated by Greek laws, the Code and the best international practices.

The Committee met once in 2015, on 27.02.2015.

During these meetings the Committee had the following agenda:

a. drew conclusions from the responses of the members of the Board to the questionnaire relating to the evaluation of the function of the Board of Directors and its Committees in 2014 and submitted a relevant report to the Board of Directors;

b. reviewed the contents of the Corporate Governance Statement that was part of the Annual Corporate Governance Report for 2014and the deviations from best practice standards stated in the Code, with which the Company complies ;

c. considered the search and selection process of board candidates in order to propose, in a timely manner, new members for appointment to the Board in accordance with the best practice standards which are part of the Code, as the current term of the Board ends in June 2016 and at least two independent directors cannot be re-elected as they will have served on the board for three terms of three years each from the date of their first election; and

d. reviewed the existing plans for the orderly succession of the Chairman, the Managing Director and the senior officers of the Company.

The Committee presented to the Board the conclusions it drew from the directors' responses to the questionnaire relating to the evaluation of the function of the Board of Directors and its Committees and submitted its recommendations for the improvement of the Board's operation and the performance. The Committee recognised the importance of promoting diversity on the Board in particular in relation to gender and individuals with different backgrounds and encouraged the participation of more women and people with different backgrounds to the new composition of the Board, as it is of the view that diversity and pluralism add value to the Board and therefore promote the Company's interests. However, the Committee's view is that the introduction of quota in order to increase the number of women on the Board should not be regarded as a goal in itself. The Committee considers of pivotal importance in the selection process of board candidates that the candidates have the required skills and knowledge that will allow them to contribute in an effective manner to the Board and add value to the Company.

In order to nominate in a timely manner board candidates for the new composition of the Board, which is to be decided in 2016, the Committee scheduled a number of meetings and contacts in early 2016 and decided the whole process to be followed.

The Nomination and Corporate Governance Committee's duties and competences and its internal regulation have been posted on the Company's website http://www.titan.gr/en/ at the following address: http://www.titan.gr/en/titan-group/corporate-governance/board-of-directorscommittees/nomination-and-corporate-governance-committee/

OTHER COMMITTEES

In addition to the above three Committees of the Board of Directors, the Board has established the following Committees which consist of its executive directors and relevant senior officers of the Company.

Executive Committee

The composition of the Executive Committee in the financial year ending 31 December 2015 was as follows:

CHAIRMAN: Dimitrios Papalexopoulos, Managing Director

MEMBERS: Efthymios Vidalis, Executive Member of the Board

Vassilios Zarkalis, Executive Member of the Board Nellos Canellopoulos, Executive Member of the Board Michael Colakides, Group Chief Financial Officer Sokratis Baltzis, General Manager Greece Region Alexandra Papalexopoulou-Benopoulou, Executive Member of the Board Michail Sigalas, Executive Member of the Board

The Executive Committee is responsible for monitoring the operations of all regions and departments of the Group and coordinating their activities.

Corporate Social Responsibility Committee

The composition of the Executive Committee in the financial year ending 31 December 2015 was as follows:

Chairman: Dimitrios Papalexopoulos, Managing Director

Vice-Chairman: Nellos Canellopoulos, Executive Member of the Board

Members

Maria Alexiou, Group Corporate Social Responsibility Director

Efthymios Vidalis, Executive Member of the Board

Lydia Yiannakopoulou, Group Corporate Communications Senior Manager

Vassilios Zarkalis, Executive Member of the Board

Michael Colakides, Group Chief Financial Officer

Giannis Kollas, Group HR Director

Sokratis Baltzis, General Manager Greece Region

Fokion Tasoulas, Group Technology & Engineering Director

The purpose of this Committee is to provide advice and support to the Company Management in planning strategy and coordinating Group's activities in the Corporate Social Responsibility matters. Its aim is to constantly improve the performance of the Company and its subsidiaries in three core fields: health and safety at work, environmental protection viewed from the perspective of sustainable development and stakeholder engagement. Its activities include adopting Corporate Social Responsibility and Sustainable Development principles and integrating them into the Group's various sectors of activity and operations; providing advice and support to constantly improve Company and Group performance; periodically measuring and assessing the environmental and social impact of the Company's major investments and regularly briefing the Board of Directors; and ensuring active Company participation in Greek and international Corporate Social Responsibilityrelated bodies.

Board and Committee Attendance in 2015

In 2015, the Company's Board of Directors held eight (8) scheduled meetings on ( ( 2/2, 5/3, 5/5, 7/5, 19/6, 30/7, 5/11, and 18/12) and two extra-ordinary meetings ( 30/6, 13/7).

Below is a table showing which members attended these meetings of the Board of Directors and its Committees during 2015:

BOARD AND COMMITTEE MEETINGS – FREQUENCY AND ATTENDANCE

Ten
scheduled
Audit
Committee
Nomination and
Corporate
Governance
Committee
Remuneration
Committee
NAMES Board
meetings
Four meetings One
meeting
Two
meetings
ANDREAS CANELLOPOULOS 10/10 1/1
TAKIS(EFSTRATIOS-GEORGIOS)
ARAPOGLOU
9/10 2/2
DIMITRIOS PAPALEXOPOULOS 10/10
EFTICHIOS VASILAKIS 7/10 1/1 2/2
EFTHYMIOS VIDALIS 10/10
VASSILIOS ZARKALIS 7/10
NELLOS CANELLOPOULOS 10/10
TAKIS-PANAGIOTIS
CANELLOPOULOS
10/10
DOROS CONSTANTINOU 10/10 4/4
DOMNA MIRASYESI-BERNITSA 10/10 1/1
ALEXANDRA
PAPALEXOPOULOU
BENOPOULOU
10/10
PLOUTARCHOS SAKELLARIS 9/10 2/4
PETROS SABATACAKIS 3/10 2/2
MICHAIL SIGALAS 10/10
VASSILIOS FOURLIS 5/10 4/4

Assessment of the Board's activities in 2015

The activities of the Board of Directors, Audit Committee, Remuneration Committee, Nomination and Corporate Governance Committee during 2015 and the individual contribution of each member of the Board of Directors was evaluated by the members of the Board of Directors by filling out a special, detailed questionnaire which had been prepared by the Company Secretary. The questionnaire was divided into 8 sections (Leadership, Composition- Effectiveness, Board operations-, BoD Work, Financial Information – Internal Audit Systems and Risk Management - Communication with Shareholders, Remuneration, Committees' Function, Directors' Attendance at the Board Meetings and the Shareholders Meetings and Directors' Individual Assessment). Each member's contribution to the Board is evaluated with a score, ranging from 1 to 4, corresponding to poor, moderate, great and excellent contribution.

The questionnaires were filled out anonymously and sent to the Company Secretary.

Remuneration of Board members in 2015 – Remuneration Policy

On 19.06.2015 the General Meeting of Shareholders preapproved, in accordance with article 24 section 2 of Law 2190/1920, the payment of compensation for the year 2015 to the members of the Board of Directors and its Committees. The relevant compensations, following the Board's recommendation, have remained the same as for the financial year 2014 and amounted to the total gross amount of 464,000 euros (plus stamp duty). More specifically,

  • a total Gross Amount of Euro 360,000 as compensation for the participation of the Board members in the Board of Directors, i.e. a gross amount of Euro 24,000 for each member;

  • a total Gross Amount of Euro 52,000 for the 3 members of the Audit Committee, i.e. a gross amount of Euro 20,000 for the Chairman and a gross amount of Euro 16,000 for each member;

-a total Gross Amount of Euro 26,000 for the 3 members of the Remuneration Committee, i.e. a gross amount of Euro 10,000 for the Chairman and a gross amount of Euro 8,000 for each member; and

  • a total Gross Amount of Euro 26,000 for the 3 members of the Nomination and Corporate Governance Committee, i.e. a gross amount of Euro 10,000 for the Chairman and a total gross amount of Euro 8,000 for each member.

The General Meeting of Shareholders of 19.06.2015 also preapproved, in accordance with article 24 section 2 of Law 2190/1920, the payment of an additional compensation of a gross amount of Euro 135,000 plus stamp duty to an executive member of the Board of Directors, who does not provide his services under an employment or agency contract with the Board of Directors, as a result of his increased duties mainly in the areas of sustainable development and strategy. Pursuant to article 24 section 2 of Law 2190/1920, the aforementioned compensations will be submitted for final approval to the Annual General Meeting for the financial year 2015.

The annual salaries and all kinds of annual remuneration payable for the financial year 2015 to the Managing Director and the other executive members of the Board of Directors, the Regional Directors, the Group Chief Financial Officer and the Internal Audit Director have been decided by the Board of Directors following the relevant recommendation by the Remuneration Committee, based on their performance and the achievement of specific business targets during the previous financial year.

The annual remuneration of the Chairman of the Board of Directors was also decided by the Board of Directors following the recommendation of the Remuneration Committee and after his performance in delivering his duties had been evaluated by the Board of Directors.

The annual remuneration of the aforementioned individuals, as well as the annual remuneration of the Senior Executive Officers is determined based on the importance of their position in the Group, the nature of their tasks and duties, their performance in relation to pre-determined quantitative and qualitative goals and the amount of remuneration paid by peer companies.

The aforesaid remuneration consists of a fixed part, i.e. the salary, which is determined on the basis of the applicable salaries system and the annual performance assessment, and of a variable part (bonus), which is correlated with the achievement of the individual and corporate goals. The corporate targets are linked with the Company's performance in terms of financial ratios (EBITDA and ROACE) at a Group's level and at Regions' level, as well as with the performance in other areas, such as the safety at work, whilst the personal targets are directly linked with the position that each officer serves.

Annual bonus awards are increased based on the importance of the position of each officer and in event the bonus may not exceed:

A. when the targets set have been fully met, 80% of the fixed annual remuneration (i.e. salary), whereas,

B. if the officer has overperformed on the targets set , the bonus on the fixed annual remuneration may go up to 105% of the fixed annual remuneration (i.e. salary ). The assessment of the performance of the executive directors is carried out by the Managing Director and the assessment of the performance of the Managing Director is carried out by the Board of Directors.

It should be noted that executive directors do not participate in discussions relating to the determination of their individual remuneration.

The Human Resources Department provides on a yearly basis to the Remuneration Committee data from the labour market, so that the remuneration level and/or the plans for variable salaries are adjusted accordingly. The main aim is to attract and keep with TITAN high quality employees who with their knowledge, skills and integrity will add value to the Company.

Senior officers of the Group are also granted long-term incentives through stock option schemes which are based on their performance and which are authorized by the General Assembly of the Company, have a three year maturity period and are subject to vesting requirements , i.e. achievement of certain targets. Senior officers are also eligible to benefit from pension-savings plans and other additional voluntary allowances, which, however, may at any time be recalled or amended at the Company's discretion.

The Company offers to the executive directors, who have an employment relationship with the Company, additional rights under pension and benefit plans based on the applicable practices in the relevant markets where the Company is operating.

In 2015, the salaries and all kinds of gross remuneration and compensations paid to the Chairman and to the 6 executive members of the Board of Directors for offering their services to the Company on the basis of an employment contract the total amount of 3,422,000 euros, whilst in 2014 the total amount was 2,921,360 euros.

For the retirement plans of the six executive directors who provide their services under an employment agreement with the Company, the Company paid the total amount of 520,000 euros.

The following executive directors were released to serve as non-executive director elsewhere and to retain the earnings they received:

Mrs. Alexandra Papalexopoulou-Benopoulou received the gross amount of €22,500 as compensation for serving on the board of the "NATIONAL BANK OF GREECE" ,the gross amount of €2.840,89 for serving on the board of "FRIGOGLASS S.A." and the gross amount of €37,500 for serving on the board of COCA-COLA HBC AG;

Mr. Takis-Panagiotis Canellopoulos received the gross amount of €10,000as compensation for serving on the board of "GRIVALIA PROPERTIES REIC"; and

Mr Eythimios Vidalis received the total gross amount of €42.000 as compensation for serving on the board of ALPHA BANK.

IV. Stock option plans for executive members of the Board of Directors and senior officers of the Company and Group

Aiming to align the long-term personal goals of its senior executives with the interests of the Company and its shareholders, the Company has adopted and implements since 2000 stock option plans. All relevant plans (2000, 2004, 2007, 2010 and 2014 Plans) have been approved by shareholders, had a 3-year maturity period and their beneficiaries were senior officers of the Company and the Group and executive directors of the Board providing their services under an employment agreement with the Company.

It should be noted that non-executive directors are not eligible to participate in these plans.

To date, under the aforesaid Plans 1,169,978 ordinary shares have been acquired by the beneficiaries representing 1.38% of the Company's paid capital. More specifically:

Under the 2000 Plan, 48 beneficiaries exercised their stock option rights and purchased 119,200 ordinary shares at a sale price of € 29.35 per share, as well as 451,900 ordinary shares at a sale price of € 14.68 per share.

Under the 2004 Plan, 63 beneficiaries exercised their stock option rights and purchased 186,000 ordinary shares at a purchase price equal to the nominal price of the share.

Under the 2007 Plan, 103 beneficiaries exercised their stock option rights and purchased 61,804 ordinary shares of the Company were exercised at a price equal to the nominal price of each share, namely four (4) euro per share.

To date, the 2010 and 2014 Plans described below are still running:

The 2010 Plan was approved by shareholders at the General Meeting dated 3.6.2010, and it has a three year term (2010-2012), a three year maturity period and further strict requirements, an expiration date in 2016, a strike price equal to the nominal price of the Company's share and 109 senior executives of the Company and the Group's companies, including 6 executive members of the Board of Directors, as beneficiaries.

Pursuant to the 2010 Plan and during 2010, 2011, 2012 the beneficiaries could purchase in total 945,210 ordinary shares in the Company and until December 2015, the beneficiaries who exercised their stock options purchased 351,074 ordinary shares of the Company. Beneficiaries will be entitled to exercise additionally 147,233 option rights, which unless exercised by the beneficiaries in April and October 2016, they will expire.

Finally, the 2014 Plan was approved by the General Meeting of Shareholders on 20.6.2014 (the 2014 Plan), has a three year term (2014-2016), a three year maturity period, a strike price of ten (10) euros per share and the beneficiaries under the 2014 Plan are 110 senior officers of the Company and the Group's companies, including the executive directors of the Board .

Under the 2014 Plan, 108 beneficiaries were granted in 2014stock option rights and could purchase 250,190 ordinary shares of the Company, whilst in 2015, 113 beneficiaries could purchase 313,080 ordinary shares in the Company. Option rights will be also granted in 2016.

In March 2017, 2018 and 2019 the Board of Directors shall confirm the final number of share option rights that each beneficiary will be entitled to exercise based on the degree of fulfilment of the vesting requirements set out in the Plan. The Beneficiaries shall be entitled to exercise their stock option rights, either in whole or in part, within the first five days of each month, paying the Company the relevant amounts until the expiration date of their stock options, i.e. until December of the third year after these stock options have been vested.

More specifically, according to the Plan, after the three-year maturity period (the relevant option rights will mature in December 2016, 2017 and 2018), the final number of option rights that may be exercised by the beneficiaries will depend upon:

  • A. by 50% on the average three year ROACE compared to the target of each three year period, as this will be determined by the Board of Directors before the relevant option rights are granted. The average ROACE ratio will be the arithmetic average of the annual ROACE ratio from the grant year of the share option rights until and including the year of their maturity. The annual ROACE ratio is calculated as the Earnings Before Interest and Tax (EBIT) / Average Capital Employed (equity plus bank or equivalent financial indebtedness) in the beginning and in the end of each year; and
  • B. and by 50% on the overall performance of the Company's common share compared to the average overall performance of the shares of ten companies within the same sector (Peer Index).

The 2014 Plan provides for six categories of performance, which will result from the comparison of the average three-year ROACE with the relevant target for that period and the comparison of the average of the total performance in the three-year period of the Company's ordinary share with the average total performance of the shares in the Peer Index in the three-year period; after this point, beneficiaries will be allowed to exercise a relevant percentage of the number of share option rights granted.

It should be noted that the current 2010 and 2014 Plans favour the long-term holding of a significant number of Company shares by the Group officers; they also include as a vesting requirement the holding of a minimum number of Company shares depending on the officer's rank; any breach of this requirement will result in a decrease of the number of share option rights for the next grant period.

It should also be noted that the aforementioned Plans have been designed to prevent high-risk behaviours of the beneficiaries, executive directors and senior officers of the Company, as this could lead to a sharp drop of the share price. Therefore, all Plans have an attractive strike price in relation to the exchange price of the Company's share at the time that they are granted.

It should also be noted that all aforementioned share option plans have been designed to discourage beneficiaries, i.e. senior officers and executive directors, from making decisions that involve high risks, which if they occur could lead to the plunge of the Company's share price. As a prerequisite, therefore, shares purchased under these schemes should be offered at a lower price compared to the price of the shares in the stock market.

A detailed description of these Plans is available on the Company's website http://www.titan.gr/ link:

http://ir.titan.gr/titan/app/cms?lang=en&page=programma.paroxis.dikaiomaton.proairesis.metoxo n

V. Description of main features of the Company's internal audit and risk management system in relation to the procedure for preparing the financial statements

Internal Audit

Internal audit is carried out by the Group Internal Audit Division, which is an independent department with its own written regulation, reporting to the Board of Directors' Audit Committee.

Internal audit was performed in 2015 by 18 executives who had the necessary training and experience to duly carry out their work.

Internal Audit's primary role is to evaluate the checks and balances that have been put in place for all Group functions in terms of their adequacy and effectiveness. Internal Audit's functions also include:

  • monitoring implementation and compliance with the Company's Internal Regulation, Code of Conduct, Articles of Association and applicable laws in all jurisdictions in which the Group operates;
  • reporting to the Board of Directors of conflict of interest situations relating to the members of the Board of Directors or the Company's executives towards the Company's interests, as such situations may be identified in the frames of the internal audit;
  • monitoring of the relationship and transactions of the Company with the related parties, as defined in the International Accounting Standard 24 as in force, as well the audit of the Company's dealings with companies in the capital of which participate with more than 10% members of the Board of Directors or shareholders of the Company with more than 10%.

During the year 2015, 37 written reports from the Internal Audit Division relating to all audits of Group functions were submitted to the Audit Committee, and via it to the Board of Directors. From the audits conducted, 22 were scheduled, 2 were special and 13 were recurring.

A three-month progress and an annual report of the work of the Internal Audit Department was submitted to the Audit Committee, which contained an overall reference to the most important audit findings.

During the year 2015 the Audit Committee held regular private meetings with the Group's Internal Audit Director to discuss functional and organisational issues, and all the information requested was provided and briefings were given about the audit systems currently in place, their effectiveness and the progress of audits. Following a report from the Audit Committee the Board of Directors approved the audit schedule for 2016 and specified the functions and points on which internal audit must focus.

Internal Control and Risk Management Systems

The Board of Directors is ultimately responsible for the Company and Group's internal control and risk management.

One of the Board's basic responsibilities is to determine the principal risks that the Company faces and ensure that the Company maintains sound risk management and internal control systems to address such risks.

Another main responsibility of the Audit Committee is to monitor the effective performance of the risk management systems under Greek law (statutory act No 3693/2008).

To this end, the Board allocates regularly sufficient time in relation to this matter and in particular, at least twice a year is supplied by the Group's CFO and the CEO with information about the risk management policies implemented by the Company and the Group vis-à-vis the main financial and operational risks regularly. These meetings also allow the exchange of opinions with regard to the effectiveness of the implemented policies and the present risk management systems, so, if needed, the relevant officers of the Company are called to redesign and amend the implemented policies.

In 2015 the Board thoroughly discussed and carried out a robust assessment of the principal strategic, operational and financial risks facing the Company due to its geographical diversification and which could significantly affect the Group's operations and financial statements.

The Board has clearly determined with its decisions the nature and extent of the principal risks it is willing to take in achieving its strategic objectives.

The principal risks (macroeconomic instability in the countries where the Group operates, political risks, market conditions and prospects, mergers and acquisitions etc.) are closely monitored on a Group level and they are managed and mitigated through rules, procedures and guidelines issued by the Executive Committee, the Finance Department and the four regions where the Group operates (Greece and Western Europe, the USA, Southeastern Europe and the Eastern Mediterranean). Similarly, financial risks are managed and mitigated through policies designed and implemented by the Group's Finance Department.

To date, the Company's risk management policy, which has been consciously decided, involves the implementation of risk management systems on the Company's daily management, the culture of responsibility and accountability far down the hierarchy of the organisation, the clearly defined roles and responsibilities and the Human Resources' activities which aim to ensure, to the maximum extent possible, that the Company's and the Group's principles and values are clearly understood. Moreover, the effectiveness of the implemented systems and policies on a Group level are systematically reviewed (by the relevant departments and Internal Audit), including compliance with relevant legal standards of the Company and the Group and where weaknesses are recognized, corrective measures are taken.

The principal risks facing the Group and the policies managing and mitigating these risks are outlined in the Section Risk and Uncertainties of the Board of Directors' Annual Report. These policies are presented twice a year to the Board of Directors.

The main concern of the Group management is to ensure that by implementing appropriate internal audit and risk management systems the Group overall is able to address effectively and in a timely manner risks as they arise and to take appropriate measures to mitigate their effects to the extent possible.

To that end, the systems implemented by the Group provide for specific procedures to be followed and the implementation of specific policies and standards and delegate responsibility, accountability and powers vis-à-vis risk management to relevant officers in the organisation, at all levels.

The Board of Directors confirms that the Company has internal control systems and risk management policies in place and that it has been informed by the CEO and the competent Group executives about their effectiveness.

It should be noted, though, that the system of internal controls and the risk management provide reasonable, but not absolute security, as they are designed to reduce the probability of occurrence of the relevant risks and to mitigate their impact, but cannot preclude such risks from materialising.

Specifically, the key elements of the system of internal controls utilized in order to avoid errors in the preparation of financial statements and to provide reliable financial information are as follows:

The assurance mechanism regarding the integrity of the Group's financial statements consists of a combination of the embedded risk management processes, the applied financial control activities, the relevant information technology utilized, and the financial information prepared, communicated and monitored.

The Group's management reviews on a monthly basis the consolidated financial statements and the Group's Management Information (MI) – both sets of information being prepared in accordance with IFRS and in a manner that facilitates their understanding.

The monthly monitoring of the financial statements and Group MI and their analysis carried-out by the relevant departments, are key elements of the controlling mechanism regarding the quality and integrity of financial results.

In consolidating the financial results and statements, the Group utilizes specialized consolidation software and specialized software for reconciling intercompany transactions. These tools come with built-in control mechanisms and they have been parameterized in accordance with the Group needs. Finally, the above tools indicate best-practices regarding the consolidation process, which the Group has to a large extent adopted.

The Group's external auditors review the mid-year financial statements of the Company, the Group and its material subsidiaries and audit the full-year financial statements of the aforementioned. In addition, the Group's external auditors inform the Audit Committee about the outcomes of their reviews and audits.

During its quarterly, bi-annual and annual reviews of the financial statements, the Audit Committee is informed about the performance of the Group's working capital and cash-flow, as well as about the Group's financial risk management. Following this, the Audit Committee informs the Board whose members have the right to request additional information or clarifications.

Prior to Board's approval, the Audit Committee reviews the consolidated financial statements. Any additional information or clarifications regarding the financial statements and requested by the Audit Committee is provided by the Company's competent senior officers.

VI. Information required by Article 10(1) of European Parliament and Council Directive 2004/25/EC

The information required by Article 10(1) of European Parliament and Council Directive 2004/25/EC is contained, pursuant to Article 4 (7) of Law 3556/2007, in the Explanatory Report which is part of the Board of Directors' Annual Report and is set out above.

VII. Information about how the General Meeting of Shareholders operates and its main powers, a description of shareholder rights and how they are exercised

General Meeting

The General Meeting's modus operandi – Powers

According to Article 12 of the Company's Articles of Association, the General Meeting of Shareholders is the Company's supreme body and is entitled to decide on all corporate affairs.

The General Meeting is the sole body competent to decide on:

a) Amendments to the Articles of Association, other than those which are decided on by the Board of Directors pursuant to law (Article 11(5), Article 13(2) and (13), and Article 17b(4) of Codified Law 2190/1920).

b) Increases or reductions in the share capital, with the exception of those cases where that power lies with the Board of Directors pursuant to Law or the Articles of Association, and increases or reductions required by the provisions of other laws.

c) The distribution of the annual profits, save for the case referred to in Article 34(2)(f) of Codified Law 2190/1920.

d) The election of members and stand-in members of the Board of Directors, apart from the cases cited in Article 25 of the Articles of Association, relating to the election of members by the Board of Directors to replace members who have resigned, passed away or been removed from their post, for the remainder of the term in office of the members being replaced and provided that said members cannot be replaced by the stand-in members elected by the General Meeting.

e) Approval of the annual accounts (annual financial statements).

f) The issuing of corporate bonds, in parallel with the right of the Board of Directors to issue such bonds in accordance with Article 28 of the Articles of Association.

g) The election of auditors.

h) The extension of the Company's term, merger, split, conversion, revival, or winding up of the Company.

i) The appointment of liquidators.

j) The filing of actions against members of the Board of Directors for acting ultra vires or for infringing the law or the Articles of Association and

k) All other issues relating to the Company for which the General Meeting is granted competence by the law or the Articles of Association.

The General Meeting meets at the seat of the Company or in another municipality within the prefecture where the seat is located or in another municipality bordering the place of its seat at least once every fiscal year and within 6 months at the most from the end of that fiscal year. It may also meet within the boundaries of the municipality where the Athens Exchange has its registered offices.

The notice for the General Meeting must include at least the data defined by article 26 of the Law 2190/1920 and is published as provided in Law 2190/1920. More specifically, the notice for the General Meeting must include place and precise address, date and time of the meeting, the items on the agenda clearly stated, the shareholders entitled to take part, and precise instructions about how shareholders can take part in the meeting and exercise their rights in person or via a representative, including the forms that the Company is utilizing for that purpose.

The minimum information which should be stated in the notice also includes information about the minority rights and the time period in such minority rights can be exercised, the record date with an indication that only shareholders on the record date can attend and vote at the General Meeting, a notice of the place where the full text of documents and drafts of decisions proposed by the Board of Directors for all items on the agenda are available, and a reference to the Company's website where all the above information is available, and the forms which must be used when shareholders vote via a representative.

The notice for the General Meeting must be published in full or in summary format (which must necessarily include an express reference to the website where the full text of the invitation and information required by Article 27(3) of Codified Law 2190/1920 is available) in the publications specified in Article 26(2) of Codified Law 2190/1920, in the Sociétés Anonyme and Limited Liability Companies Bulletin of the Government Gazette and on the ATHEX and Company websites.

The Company arranges for the notice of the Annual General Meeting and related papers to be

sent to shareholders at least 20 working days before the meeting and published pursuant to the provisions above. For other general meetings the notice and related papers are sent and published at least 14 working days in advance.

The full text of the notice must also be published in electronic news services with a national and European reach, in order to effectively disseminate information to investors and to ensure rapid, non-discriminatory access to such information.

Right to attend General Meetings

All shareholders are entitled to take part in the General Meetings.

To take part, holders of shares must have been shareholders at the start of the fifth day before the date of the General Meeting (Record date).

Such persons can demonstrate that they are shareholders by submitting a written certificate from Hellenic Exchanges S.A. or, in the alternative, by the Company connecting online to the files and records of Hellenic Exchanges S.A.

The written or online certificate proving that they are shareholders must be presented to the Company no later than the third day before the date of the General Meeting.

Other than that requirement, exercise of the right to participate in the General Meeting does not require shareholders to block their shares or comply with any other formalities which limit the ability to sell or transfer their shares in the time period between the record date and the date of the General Meeting.

Shareholders or their representatives who have not complied with these formalities may only take part in the General Meeting with its permission.

Shareholders may attend the General Meetings either in person or through one or more representatives, whether shareholders or not. Each shareholder may appoint up to 3 representatives. However, if a shareholder holds shares in the Company which appear in more than one securities account, this limitation does not prevent the shareholder from appointing different representatives for the shares which appear in each securities account.

A representative who acts for more than one shareholder may vote differently on behalf of each shareholder.

Legal entities may participate in the General Meeting by appointing up to 3 natural persons as their representatives.

Shareholder representatives can be appointed and removed in writing, such notice being sent to the Company in the same way, at least 3 days before the date set for the General Meeting.

The Company has made the forms, which must be filled out and sent by shareholders in order to appoint a representative, available on its website. These forms allow shareholders to authorise to their proxies to exercise voting rights at the meeting and direct them for, against or abstain from voting on each item of the agenda. Abstentions do not count in tallying the vote negatively or positively in relation to a decision.

The Company's Articles of Association do not provide for shareholders' participation in the General Meeting and exercise voting rights remotely or by correspondence.

Shareholder representatives are obliged to inform the Company before the General Meeting starts about any information which shareholders should be aware of so that they can determine whether there is a risk of the representative serving interests other than their own interests.

Conflicts of interest may arise in cases where the representative:

a. is a shareholder who controls the Company or is another legal entity or person controlled by that shareholder;

b. is a member of the Board of Directors or of the management team of the Company or a shareholder who controls the Company, or another legal person or entity controlled by a shareholder who controls the Company;

c. is an employee or certified public accountant of the Company or a shareholder who controls the Company, or another legal person or entity controlled by a shareholder who controls the Company;

d. is the spouse or a relative to the first degree of one of the natural persons referred to above.

The Chairman of the Board arranges for all directors to attend and for the chairmen of the Board committees to be available to answer questions at the General Meeting.

Quorum – Majority

According to the law and the Articles of Association, the General Meeting has a quorum and is validly met on the items of the agenda when shareholders representing at least 1/5 of the paid up share capital are present or represented at the meeting.

If that quorum is not achieved at the first meeting, the Meeting will reconvene within 20 days from the date on which it was not possible to hold the meeting, and that meeting has a quorum and is validly met on the items on the initial agenda, irrespective of the percentage of the paid-up share capital represented at that meeting. In all the above cases, decisions of the General Meeting are taken by absolute majority of the votes represented at it.

By way of exception, in the case of decisions relating to a change in the Company's nationality; a change in the business object; an increase in shareholders' obligations; an increase in share capital not provided for by the Articles of Association in line with Article 13(1) and (2) of Codified Law 2190/1920 unless required by law or done by capitalising reserves; a reduction in share capital unless done in accordance with Article 16(6) of Codified Law 2190/1920; a change in the profit

distribution; the merger, split, conversion, revival, extension of term or winding up of the Company; the granting or renewal of powers to the Board of Directors to increase the share capital in accordance with Article 13(1) hereof, and all other cases specified by law, the General Meeting has a quorum and is validly met on the items of the agenda when shareholders representing at least 2/3 of the paid up share capital are present or represented at the meeting. In all the above cases, decisions of the General Meeting are taken by 2/3 majority of the votes represented at it.

If that qualified quorum is not achieved, the General Meeting will be invited to convene and will reconvene within 20 days from the date on which the meeting could not take place, and will have a quorum and be validly met on the items on the initial agenda if at least ½ of the paid-up share capital is represented at it. If that quorum is not achieved, the General Meeting will be called and will convene again within 20 days and will have a quorum and be validly met on the items on the initial agenda when at least 1/5 of the paid-up share capital is represented at it.

In all the above cases, decisions of the General Meeting are taken by 2/3 majority of the votes represented at it.

No other invitation is required if the initial invitation specifies the place and time of any repeat meetings that might be held if a quorum is not achieved at the first meeting, provided that at least 10 days (meaning 10 full days) elapse between the meeting which was cancelled and the repeat meeting.

Shareholder's Rights

Right to attend General Meetings

As explained in detail above, shareholders are entitled to attend General Meetings in person or via representatives who may or may not be shareholders.

Right to vote at General Meetings:

Every share, apart from preferred shares to which no voting rights are attached, comes with a voting right.

Rights of preferred shareholders

According to the decision of the Company's Annual General Meeting of Shareholders of 27.6.1990, which decided to increase the Company's share capital by issuing preferred shares without voting rights, the privileges granted to preferred shares without voting rights were as follows:

A. The right to receive the first dividend from the profits of each year before ordinary shareholders, and in the case where no dividend is distributed or a dividend lower than the first dividend is distributed in one or more years, to receive payment on that first divided on a preferential and cumulative basis for those years from the profits generated in subsequent years. Holders of nonvoting preferred shares are also entitled, on the same terms as holders of ordinary shares, to receive any additional dividend paid in any form.

It should be noted that following amendments to the provisions of Article 45(2) of Codified Law 2190/1920 on the profits of sociétés anonyme to be distributed, in accordance with Article 79(8) of Law 3604/2007, the obligation to distribute 6% of the paid-up share capital as the minimum mandatory first dividend was abolished, and it is now mandatory to distribute 35% of the net profits.

B. Preferential return of capital paid up by holders of non-voting preferred shares from the product of the liquidation of corporate assets in the event of the Company being wound up. Holders of nonvoting preferred shares are entitled, on equal terms with the holders of ordinary shares, to a proportionally greater share in the product of liquidation of assets, if this product is greater than the total paid-up share capital.

Priority rights

In any event of share capital increase, when that increase does not result from a contribution in kind or the issue of bonds with the right of conversion into shares, priority rights are granted on the entire new capital or bond issue to the Shareholders of the Company at the time of issue, proportionate to their holding in the existing share capital.

Where the Company's share capital is increased with shares from only one of the classes of shares the Company has issued, the priority right is granted to shareholders in the other class only after it is not exercised by shareholders in the class to which the new shares belong.

Pursuant to article 13(10) of Law 2190/1920, priority rights may be limited or abolished by decision of the General Meeting of Shareholders, requiring a special increased quorum and majority, pursuant to the provisions of Article 29(3) and (4) and Article 31(2) of Law 2190/1920.

Right to receive a copy of the financial statements and reports of the BoD and Auditors

Ten (10) days prior to the Ordinary General Meeting, each shareholder may request the annual Financial Statements and relevant reports of the Board of Directors and Auditors from the Company.

Minority rights

Following an application submitted by any Shareholder to the Company within at least 5 full days prior to the General Meeting, the Board of Directors shall be obliged to provide the General Meeting with the requested specific information on the Company's affairs, to the extent that it may be useful for the actual assessment of the items on the agenda. The Board of Directors may provide a single response to shareholder requests relating to the same matter. The obligation to provide information does not exist when the information requested is already available on the Company's website, especially in the form of questions and answers. The Board of Directors may refuse to

provide such information on a serious, substantive ground which shall be cited in the minutes. Such ground may, under the circumstances, be representation of the applicant shareholders on the Board of Directors in line with Article 18(3) or (6) of Law 2190/1920.

At the request of Shareholders representing 1/20 of the paid-up share capital:

A. The Board of Directors shall be obliged to convene an extra- ordinary General Meeting within a time period of 45 days from the date of service of the relevant request on the Chairman of the Board of Directors. This application must contain the items on the agenda of the requested Meeting. Where the General Meeting is not convened by the Board of Directors within 20 days from service of the request, it shall be convened by the applicant shareholders at the Company's expense by decision of the Single-Member Court of First Instance at the seat of the Company, which decision shall be issued in line with the injunctive relief procedure. This decision shall state the time and place of the meeting and the items on the agenda.

B. The Board of Directors shall be obliged to enter additional items on the agenda of the General Meeting that has already been convened, provided that it receives the relevant request within at least 15 days prior to the General Meeting. The additional items shall be published or notified by the Board of Directors at least 7 days before the General Meeting. That request to have additional items included in the agenda shall be accompanied by the reasons for such inclusion or a draft decision for approval by the General Meeting and the revised agenda shall be published in the same manner as the previous agenda, 13 days before the date of the General Meeting, and shall also be made available to shareholders on the Company's website, along with the reasoning or draft decision submitted by the shareholders.

C. At least 6 days before the date of the General Meeting the Board of Directors is obliged to provide shareholders with drafts of decisions on the items which have been included in the initial or revised agenda, by uploading the same on the Company's website, if a request to that effect is received by the Board of Directors at least 7 days before the date of the General Meeting.

Board of Directors is not obliged to include items in the agenda or publish or disclose them along with the reasoning and drafts of decisions submitted to shareholders in accordance with the aforementioned two sections if the content thereof is clearly in conflict with the law and morals.

D. The Chairman of the General Meeting shall be obliged – only once – to postpone the making of decisions by the General Meeting, whether ordinary or extraordinary, on all or certain items, setting the date of continuation of the session at that which is stipulated in the relevant application, which cannot however be more than 30 days following the date of postponement. A postponed General Meeting which reconvenes shall be deemed a continuation of the previous one and for this reason no repetition of the publication requirements shall be required, and new shareholders may also participate provided that they comply with the obligations for participation in the General Meeting.

E. The Board of Directors shall be obliged to announce to the Annual General Meeting the amounts that have in the last two-year period been paid to each member of the Board of Directors or to the Company directors, as well as any benefits granted to these persons due to any reason or contract concluded between them and the Company. The Board of Directors may refuse to provide such information on a serious, substantive ground which shall be cited in the minutes. Such ground may, under the circumstances, be representation of the applicant shareholders on the Board of Directors in line with Article 18(3) or (6) of Law 2190/1920. Any doubts about the validity or otherwise of the reasons for refusal to provide information may be decided by the Single-Member Court of First Instance at the company's seat.

F. Decisions on any item on the agenda of the General Meeting shall be taken by a call of names.

G. In addition, shareholders representing 1/20 of the paid-up share capital are entitled to request that the Single-Member Court of First Instance at the Company's seat audit the Company in the manner specified in Article 40 of Codified Law 2190/1920. In any event, the request for an audit must be submitted within 3 years from the approval of the financial statements of the fiscal year in which the contested transactions were effected.

Following an application made by Shareholders representing 1/5 of the paid-up share capital, which shall be submitted to the Company at least 5 full days prior to the General Meeting, the Board of Directors shall be obliged to provide the General Meeting with information on the course of corporate affairs and the state of the Company's assets. The Board of Directors may refuse to provide such information on a serious, substantive ground which shall be cited in the minutes. Such ground may, under the circumstances, be representation of the applicant shareholders on the Board of Directors in line with Article 18(3) or (6) of Law 2190/1920, where the relevant members of the Board of Directors have taken adequate cognisance of these matters. Any doubts about the validity or otherwise of the reasons for refusal to provide information may be decided by the Single-Member Court of First Instance at the Company's seat.

In all the above cases where rights are exercised, the applicant shareholders are obliged to demonstrate that they are in fact shareholders, and the number of shares they hold, when exercising their right. A certificate from Hellenic Exchanges S.A. or confirmation that they are shareholders by means of the online connection between HELEX and the Company constitute evidence for this.

Moreover, shareholders representing 1/5 of the paid-up share capital shall be entitled to request an audit of the Company from the Single-Member Court of First Instance, which has jurisdiction over the area of the Company's registered offices, in case from the overall course of the Company's affairs it may be concluded that the Company is not being administered in accordance with the principles of sound and prudent management laid down in Article 40 of Codified Law 2190/1920.

Right to dividends:

According to the Articles of Association, the minimum mandatory dividend to be distributed each year by the Company is equal to the minimum mandatory dividend specified by law (Article 45 of Codified Law 2190/1920), which according to Article 3 of Development Law 148/1967 is at least 35% of the Company's net profits, after all necessary withholdings to establish the statutory reserve.

Dividends must be paid within 2 months from the date of the Annual General Meeting approving the Company's annual financial statements.

The place and method of payment is announced in notices published in the press, the Daily Price Bulletin and both the ATHEX and Company websites.

Dividends which remain unclaimed for a period of five years from the date on which they become payable may not be claimed and are forfeited to the State.

Right to the product of liquidation:

On completion of the liquidation, the liquidators return the contributions of the Shareholders in accordance with the Articles of Association and distribute to them the balance from the liquidation of the Company's assets in proportion to their share in the paid-up share capital of the Company.

Shareholders' liability:

Shareholders' liability is limited to the nominal value of the shares held.

Exclusive Jurisdiction of the Courts – Applicable Law:

Each Shareholder, regardless of where he or she resides, is – in dealings with the Company – deemed to have the location of the registered offices of the Company as his/her legal place of residence, and is subject to Greek Law. Any dispute between the Company and the Shareholders or any third party is to be resolved by recourse to the Ordinary Courts; legal actions may be brought against the Company only before the Courts of Athens.

Shareholder Information and Services

Shareholder relations and the provision of information to shareholders have been assigned to the following departments:

Investor Relations Department

The Investor Relations Department is responsible for monitoring Company relations with its Shareholders and investors, and for ensuring that information is provided to investors and financial analysts in Greece and abroad on an equal footing in good time and that such information is up-todate. The aim here is to generate long-term relationships with the investment community and retain the high level of trust that investors have in the Group.

The Group Investor Relations Manager is Mr. Takis Canellopoulos, 22a Halkidos St., GR-11143, Athens tel: 0030 210-2591163, fax: 0030 210-2591106, e-mail: [email protected].

Shareholder Services Department

This Department is responsible for providing immediate, at-arms-length information to shareholders and for facilitating them when exercising the rights granted to them by the law and Articles of Association of the Company.

The Shareholder Services Department and the Corporate Announcements Department are run by Ms. Nitsa Kalesi, 22a Halkidos St., GR-11143, Athens, tel: 0030 210-2591257, fax: 0030 210- 2591238, e-mail: [email protected].

Corporate Announcements Department

This Department is responsible for communications between the Company and the Hellenic Capital Market Commission and the Athens Exchange, Company compliance with the obligations set forth in Laws 3340/2005 and 3556/2007, compliance with the relevant decisions of the Hellenic Capital Market Commission and for sending published Company reports to all competent authorities and the media.

The Company's website address is: www.titan-cement.com

Reuters code: TTNr.AT, TTNm.AT

Bloomberg code: TITK GA, TITP GA.

VIII. Reference to derogations from the Corporate Governance Code

In accordance with Article 2 of Law 3873/2010, the Board of Directors declares that the Company complies with the provisions of the UK Code on Corporate Governance, except in the following aspects:

1. Board evaluation by external facilitator (Provision B.6.2 of the Code)

The Board of Directors, to date, has not assigned the evaluation of its performance to external consultants, because it holds the view that the existing procedure for the evaluation of the Board's performance by its members, including the self-assessment of each member's individual performance, has proven to be extremely efficient. More specifically, the Board of Directors believes that the anonymous self-assessment process allows its members to answer more openly and identify without any reservations the weaknesses and malfunctions that they see and to suggest the adoption of measures for the improvement of the performance of the Board of Directors and that of its members. Despite the aforesaid, though, the Board of Directors does not exclude the possibility that it may appoint an external consultant in the future to conduct an evaluation of its performance, in order to compare in practice the efficiency of the two methods.

2. Performance-related remuneration schemes for executive directors do not include provisions that would enable the Company to recover bonuses paid or withhold the payment of any bonus. Share option plans do not include a requirement on executive directors to hold shares for a period after leaving the Company (Provision D.1.1 of the Code)

The Company's designed schemes of performance-related remuneration for executive directors do not include provisions that would enable the Company to recover sums paid or withhold the payment of any sum, or specify the circumstances in which it would be appropriate to do so. The Company's view is this is not necessary, as it pays such sums following the assessment of each executive director's individual performance and such sums cannot exceed the fixed upper limits set in relation to their annual salary as mentioned herein under subsection Remuneration of Board members in 2015 – Remuneration Policy.

Moreover, the share option plans described in Section IV herein require directors and senior officers of the Company to hold a significant number of shares based on their hierarchical level, for as long as they remain in the Company; if they are in breach of this term, then they will receive a smaller amount of option rights in the next grant period. However, the share option plans do not include a requirement to hold shares for a period after leaving the Company. This is because half of the executive directors of the Board are core shareholders in the Company, whilst almost all other directors have served as senior officers in the Group and have worked for many years in the Company. It should also be noted that all relevant plans adopted by the Company grant such rights sparingly and under serious consideration and they include a long maturity period and further strict requirements in relation to their maturity and exercise.

Translation from the original text in Greek

Independent Auditor's Report

To the Shareholders of "Titan Cement Company S.A."

Report on the Audit of the Separate and Consolidated Financial Statements

We have audited the accompanying separate and consolidated financial statements of "Titan Cement Company S.A." which comprise the separate and consolidated statement of financial position as of 31 December 2015 and the separate and consolidated statement of comprehensive income, statement of changes in equity and cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Separate and Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these separate and consolidated financial statements in accordance with International Financial Reporting Standards, as adopted by the European Union, and for such internal control as management determines is necessary to enable the preparation of separate and consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these separate and consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the separate and consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the separate and consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the separate and consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the separate and consolidated financial statements 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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the separate and consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the separate and consolidated financial statements present fairly, in all material respects, the financial position of the "Titan Cement Company S.A." and its subsidiaries as at December 31, 2015, and their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union.

Report on Other Legal and Regulatory Requirements

  • a) Included in the Board of Directors' Report is the corporate governance statement that contains the information that is required by paragraph 3d of article 43a of Codified Law 2190/1920.
  • b) We verified the conformity and consistency of the information given in the Board of Directors' report with the accompanying separate and consolidated financial statements in accordance with the requirements of articles 43a (par.3a), 108 and 37 of Codified Law 2190/1920.

Αthens, 10 March 2016 The Certified Auditor Accountant

Kifissias Av. 268, 153 32 Halandri SOEL Reg. 113

Marios Psaltis SOEL Reg. No 38081

Income Statement

Group Company
(all amounts in Euro thousands) Year ended 31 December Year ended 31 December
Notes 2015 2014 2015 2014
Turnover
3
1,397,818 1,158,414 273,193 263,969
Cost of sales
5
-1,039,425 -863,906 -202,442 -208,026
Gross profit before depreciation, amortization and impairment 358,393 294,508 70,751 55,943
Other income
4
9,508 15,237 16,651 10,463
Administrative expenses
5
-114,169 -100,927 -37,048 -35,372
Selling and marketing expenses
5
-21,236 -18,466 -128 -133
Other expenses
4
-16,074 -8,761 -6,458 -284
Profit before interest, taxes, depreciation, amortization and impairment 216,422 181,591 43,768 30,617
Depreciation and amortization related to cost of sales
11,13,27
-107,442 -98,681 -12,285 -12,161
Depreciation and amortization related to administrative and selling expenses
11,13,27
(Impairment)/reversal of impairment of tangible and intangible assets related
-6,208 -6,768 -1,256 -1,296
to cost of sales
11.13
-17,045 414 - 753
Profit before interest and taxes 85,727 76,556 30,227 17,913
Income from participations and investments 1,565 - 55,246 112,000
Losses from participations and investments -2,805 -1,609 - -5,211
Finance income
6.i
1,767 2,148 52 110
Finance expense
6.ii
-67,360 -66,275 -23,383 -43,365
Gain from foreign exchange differences
6.iii
17,435 31,056 1,477 1,679
Share of profit of associates and joint ventures
15
5,815 4,945 - -
Profit before taxes 42,144 46,821 63,619 83,126
Less: Income tax
8
-6,848 -11,104 -3,477 8,598
Profit after taxes 35,296 35,717 60,142 91,724

Attributable to:

Equity holders of the parent 33,754 30,947
Non-controlling interests 1,542 4,770
35,296 35,717
Basic earnings per share (in €) 9 0.4126 0.3790
Diluted earnings per share (in €) 9 0.4103 0.3767

Statement of Comprehensive Income

Group Company
(all amounts in Euro thousands) Year ended 31 December Year ended 31 December
Notes 2015 2014 2015 2014
Profit for the year 35,296 35,717 60,142 91,724
Other comprehensive income:
Other comprehensive income to be reclassified to profit or
loss in subsequent periods:
Exchange gains on translation of foreign operations 45,298 88,142 - -
Net (losses)/gains on available-for-sale financial assets -79 -171 139 -
Reclassification to income statement 1,468 - - -
Income tax effect -40 - -40 -
1,349 -171 99 -
Cash flow hedges 33 - - - -
Reclassification to income statement 33 - 2,605 - 2,234
Income tax effect 18 - 612 - 612
Net other comprehensive income to be reclassified to profit - 3,217 - 2,846
or loss in subsequent periods: 46,647 91,188 99 2,846
Items not to be reclassified to profit or loss in subsequent
periods:
Asset revaluation surplus 12 - 65 - -
Tax adjustment due to change in income tax rates -253 - -253 -
-253 65 -253 -
Re-measurement gains/(losses) on defined benefit plans 25 2,751 -5,492 1,601 -2,414
Tax adjustment due to change in income tax rates -140 - -140 -
Income tax effect 18 -953 1,531 -464 628
1,658 -3,961 997 -1,786
Net other comprehensive income/(losses) not to be
reclassified to profit or loss in subsequent periods:
1,405 -3,896 744 -1,786
Other comprehensive income for the year net of tax 48,052 87,292 843 1,060
Total comprehensive income for the year net of tax 83,348 123,009 60,985 92,784
Attributable to:
Equity holders of the parent 80,470 111,689
Non-controlling interests 2,878 11,320
83,348 123,009

Statement of Financial Position

(all amounts in Euro thousands) Group Company
Assets Notes 31/12/2015 31/12/2014 31/12/2015 31/12/2014
Property, plant & equipment 11 1,807,709 1,677,282 239,413 236,468
Investment property 12 9,548 9,267 9,461 9,908
Intangible assets and goodwill 13 454,584 441,808 1,854 1,973
Investments in subsidiaries 14 - - 844,762 845,807
Investments in associates and joint ventures 15 82,508 86,533 - -
Available-for-sale financial assets 16 1,209 1,406 172 111
Other non-current assets 17 14,830 16,204 3,063 2,960
Deferred income tax asset 18 806 2,517 - -
Non-current assets 2,371,194 2,235,017 1,098,725 1,097,227
Inventories 19 286,793 275,774 70,682 72,830
Receivables and prepayments 20 167,645 157,449 68,884 53,169
Available-for-sale financial assets 16 2,110 63 2,109 61
Cash and cash equivalents 21 121,733 142,946 8,626 16,971
Current assets 578,281 576,232 150,301 143,031
Total Assets 2,949,475 2,811,249 1,249,026 1,240,258
Equity and Liabilities
Share capital ( 84,632,528 shares of € 4.00) 22 338,530 338,530 338,530 338,530
Share premium 22 22,826 22,826 22,826 22,826
Share options 22 1,807 1,620 1,807 1,620
Treasury shares 22 -79,077 -83,633 -79,077 -83,633
Other reserves 23 1,017,304 939,525 519,750 496,236
Retained earnings 285,504 288,137 56,708 47,722
Equity attributable to equity holders of the parent 1,586,894 1,507,005 860,544 823,301
Non-controlling interests 118,391 120,590 - -
Total equity (a) 1,705,285 1,627,595 860,544 823,301
Long-term borrowings 24 716,766 634,195 300,712 336,694
Derivative financial instruments 34 924 2,438 - -
Deferred income tax liability 18 163,786 184,085 7,518 3,365
Retirement benefit obligations 25 31,018 31,727 13,087 14,029
Provisions 26 21,481 15,922 2,221 2,293
Other non-current liabilities 27 6,803 30,053 4,236 4,446
Non-current liabilities 940,778 898,420 327,774 360,827
Short-term borrowings 24 26,313 49,522 9,324 95
Trade and other payables 28 265,805 220,462 45,701 52,425
Derivative financial instruments 34 - 127 - -
Income tax payable 4,959 10,987 - -
Provisions 26 6,335 4,136 5,683 3,610
Current liabilities 303,412 285,234 60,708 56,130
Total liabilities (b) 1,244,190 1,183,654 388,482 416,957
Total Equity and Liabilities (a+b) 2,949,475 2,811,249 1,249,026 1,240,258

Statement of Changes in Equity

(all amounts in Euro thousands)

Attributable to equity holders of the parent
Group Ordinary
shares
Share
premium
Preferred
shares
Share options Ordinary
treasury
shares
Preferred
treasury shares
Other
reserves (note
23)
Retained
earnings
Total Non
controlling
interests
Total equity
Balance at 1 January 2014 308,254 22,826 30,276 3,971 -87,563 -117 293,299 845,181 1,416,127 122,683 1,538,810
Profit for the year - - - - - - - 30,947 30,947 4,770 35,717
Other comprehensive income - - - - - - 80,742 - 80,742 6,550 87,292
Total comprehensive income for the year - - - - - - 80,742 30,947 111,689 11,320 123,009
Contingency reserve distributed to shareholders (notes 10, 23) - - - - - - -8,463 - -8,463 - -8,463
Dividends distributed to non-controlling interests (note 15.3) - - - - - - - - - -12,023 -12,023
Sale - disposal of treasury shares for option plan (note 22) - - - - 4,047 - - -3,481 566 - 566
Change in subsidiary's ownership (note 14) - - - - - - - -858 -858 858 -
Share based payment transactions (note 22) - - - 746 - - - - 746 - 746
Non-controlling interest's put option recognition & transfer between
reserves (notes 27, 31)
- - - - - - -735 - -735 308 -427
Deferred tax adjustment due to change in income tax rates on revaluation
reserves (note 18)
- - - - - - -12,067 - -12,067 -2,556 -14,623
Transfer between reserves (note 23) - - - -3,097 - - 586,749 -583,652 - - -
Balance at 31 December 2014 308,254 22,826 30,276 1,620 -83,516 -117 939,525 288,137 1,507,005 120,590 1,627,595
Balance at 1 January 2015 308,254 22,826 30,276 1,620 -83,516 -117 939,525 288,137 1,507,005 120,590 1,627,595
Profit for the year - - - - - - - 33,754 33,754 1,542 35,296
Other comprehensive income - - - - - - 46,716 - 46,716 1,336 48,052
Total comprehensive income for the year - - - - - - 46,716 33,754 80,470 2,878 83,348
Dividends distributed to ordinary and preferred shares (note 10) - - - - - - - -12,695 -12,695 - -12,695
Special reserve distributed to shareholders (note 10, 23) - - - - - - -12,695 - -12,695 - -12,695
Dividends distributed to non-controlling interests (note 15.3) - - - - - - - - - -9,156 -9,156
Sale - disposal of treasury shares for option plan (note 22) - - - - 4,556 - - -3,918 638 - 638
Non-controlling interest's participation in establishement of subsidiary - - - - - - - - - 344 344
Share based payment transactions (note 22) - - - 1,010 - - - - 1,010 - 1,010
Non-controlling interest's put option recognition & transfer between
reserves (notes 27, 31)
- - - - - - 4,262 - 4,262 -656 3,606
Acquisition of non-controlling interest - - - - - - 4,422 -3,643 779 551 1,330
Deferred tax adjustment due to change in income tax rates on revaluation
reserves (note 18)
- - - - - - 20,793 -2,673 18,120 3,840 21,960
Transfer between reserves (note 23) - - - -823 - - 14,281 -13,458 - - -
Balance at 31 December 2015 308,254 22,826 30,276 1,807 -78,960 -117 1,017,304 285,504 1,586,894 118,391 1,705,285

Statement of Changes in Equity (continued)

(all amounts in Euro thousands)

Company Ordinary
shares
Share
premium
Preferred
shares
Share options Ordinary
treasury
shares
Preferred
treasury shares
Other reserves
(note 23)
Retained
earnings
Total equity
Balance at 1 January 2014 308,254 22,826 30,276 3,971 -87,563 -117 511,258 -51,237 737,668
Profit for the year - - - - - - - 91,724 91,724
Other comprehensive income - - - - - - 1,060 - 1,060
Total comprehensive income for the year - - - - - - 1,060 91,724 92,784
Contingency reserve distributed to shareholders (notes 10, 23) - - - - - - -8,463 - -8,463
Sale - disposal of treasury shares for option plan (note 22) - - - - 4,047 - - -3,481 566
Share based payment transactions (note 22) - - - 746 - - - - 746
Transfer between reserves - - - -3,097 - - -7,619 10,716 -
Balance at 31 December 2014 308,254 22,826 30,276 1,620 -83,516 -117 496,236 47,722 823,301
Balance at 1 January 2015 308,254 22,826 30,276 1,620 -83,516 -117 496,236 47,722 823,301
Profit for the year - - - - - - - 60,142 60,142
Other comprehensive income - - - - - - 843 - 843
Total comprehensive income for the year - - - - - - 843 60,142 60,985
Dividends distributed to ordinary and preferred shares (note 10) - - - - - - - -12,695 -12,695
Special reserve distributed to shareholders (note 10, 23) - - - - - - -12,695 - -12,695
Sale - disposal of treasury shares for option plan (note 22) - - - - 4,556 - - -3,918 638
Share based payment transactions (note 22) - - - 1,010 - - - - 1,010
Transfer between reserves - - - -823 - - 35,366 -34,543 -
Balance at 31 December 2015 308,254 22,826 30,276 1,807 -78,960 -117 519,750 56,708 860,544

Cash Flow Statement

Group Company
(all amounts in Euro thousands) Year ended 31 December Year ended 31 December
Notes 2015 2014 2015 2014
Cash flows from operating activities
Cash generated from operations
29
237,641 174,278 29,357 27,494
Income tax paid -18,128 -20,946 -798 -180
Net cash generated from operating activities (a)
Cash flows from investing activities
219,513 153,332 28,559 27,314
Purchase of property, plant and equipment
11.12
-172,588 -81,536 -16,543 -13,472
Purchase of intangible assets
13
-888 -566 -101 -335
Proceeds from sale of property, plant and equipment & investment
property
29
1,305 181 356 183
Proceeds from dividends 2,218 1,404 55,012 112,000
Acquisition of subsidiaries, net of cash acquired
30
- -2,741 - -
Investment in associate -400 -71 - -
Share capital decrease in subsidiaries - - 1,180 392,950
Net payments from the acquisition of available-for-sale financial
assets
-1,836 - -1,836 -
Interest received 1,767 2,148 52 110
Net cash flows (used in)/from investing activities (b) -170,422 -81,181 38,120 491,436
Net cash flows after investing activities (a)+(b) 49,091 72,151 66,679 518,750
Cash flows from financing activities
Proceeds from non-controlling interest's participation in
subsidiary's establishment 35 - - -
Proceeds from sale of treasury shares
22
638 566 638 566
Proceeds from government grants 227 891 - -
Interest paid -56,318 -58,732 -22,441 -44,135
Dividends written-off and paid to the Greek State -36 -67 -36 -67
Dividends & reserves paid to shareholders -25,316 -8,438 -25,316 -8,438
Dividends paid to non-controlling interests -5,635 -11,267 - -
Acquisition of non-controlling interests -10,591 - - -
Proceeds from borrowings 396,812 1,057,652 93,421 177,900
Payments of borrowings -370,366 -1,098,747 -121,862 -636,327
Net cash flows used in financing activities (c ) -70,550 -118,142 -75,596 -510,501
Net (decrease)/increase in cash and cash equivalents (a)+(b)+(c) -21,459 -45,991 -8,917 8,249
Cash and cash equivalents at beginning of the year
21
142,946 184,257 16,971 8,780
Effects of exchange rate changes 246 4,680 572 -58
Cash and cash equivalents at end of the year
21
121,733 142,946 8,626 16,971

Contents

Page
1. General information and summary of significant accounting policies 71
1.1 Basis of preparation 71
1.2 Consolidation 75
1.3 Foreign currency translation 78
1.4 Property, plant and equipment 79
1.5 Investment property 80
1.6 Intangible assets 81
1.7 Deferred stripping costs 82
1.8 Impairment of long lived assets other than Goodwill 82
1.9 Leases 83
1.10 Inventories 83
1.11 Trade receivables 84
1.12 Cash and cash equivalents 84
1.13 Share capital 84
1.14 Borrowings 84
1.15 Current and deferred income taxes 85
1.16 Employee benefits 85
1.17 Government grants 87
1.18 CO2 Emission rights 87
1.19 Provisions 87
1.20 Site restoration, quarry rehabilitation and environmental costs 88
1.21 Revenue recognition 88
1.22 Dividend distribution 89
1.23 Segment information 89
1.24 Financial assets 89
1.25 Offsetting financial instruments 90
1.26 Impairment of financial assets 90
1.27 Derivative financial instruments and hedging activities 91
1.28 Derecognition of financial assets and liabilities 93
1.29 Borrowing costs 93
1.30 Trade payables 93
1.31 Exceptional items 94
2. Significant accounting estimates and judgments 94
2.1 Impairment of goodwill and other non-financial assets 94
2.2 Income taxes 94
2.3 Deferred tax assets 95
2.4 Asset lives and residual values 95
2.5 Allowance for net realizable value of inventory 95
2.6 Allowance for doubtful accounts receivable 95
2.7 Provision for environmental rehabilitation 95
2.8 Provision for staff leaving indemnities 95
2.9 Provision for restructuring costs 96
2.10 Contingent liabilities 96
2.11 Business combinations 96
2.12 Valuation of financial instruments 96
2.13 Fair value of share-based payments 96
2.14 Weighted average number of shares 96
2.15 Put option 97
2.16 Sources of estimation uncertainty 97
2.17 Going concern 97

Contents (continued)

Page
3. Operating segment information 98
4. Other income and expenses 101
5. Expenses by nature 101
6. Finance expenses 102
7. Staff costs 102
8. Income tax expense 103
9. Earnings per share 104
10. Distribution of contingency reserves & proposed dividends 104
11. Property, plant and equipment 105
12. Investment property 108
13. Intangible assets and Goodwill 109
14. Principal subsidiaries, associates and joint ventures 112
15. Investments in associates, joint ventures and subsidiaries 115
16. Available-for-sale financial assets 118
17. Other non-current assets 118
18. Deferred income taxes 118
19. Inventories 122
20. Receivables and prepayments 122
21. Cash and cash equivalents 123
22. Share capital and premium 123
23. Other reserves 127
24. Borrowings 129
25. Retirement and termination benefit obligations 131
26. Provisions 134
27. Other-non current liabilities 135
28. Trade and other payables 135
29. Cash generated from operations 136
30. Business combinations and acquisition of non-controlling interest 137
31. Contingencies and commitments 138
32. Related party transactions 140
33. Financial risk management objectives and policies 143
34. Fair value measurement 147
35. Fiscal years unaudited by tax authorities 149
36. Reclassifications 149
37. Events after the reporting period 149

1.General information and summary of significant accounting policies

Titan Cement Co. S.A. (the Company) and, its subsidiaries (collectively the Group) are engaged in the production, trade and distribution of a wide range of construction materials, including cement, concrete, aggregates, cement blocks, dry mortars and fly ash. The Group operates primarily in Greece, the Balkans, Egypt, Turkey and the USA.

Information on the Group's structure is provided in note 14. Information on other related party relationships of the Group and the Company is provided in note 32.

The Company is a limited liability company incorporated and domiciled in Greece at 22A Halkidos Street - 111 43 Athens with the registration number in the General Electronic Commercial Registry: 224301000 (formerly the Register of Sociétés Anonymes Number: 6013/06/Β/86/90) and is listed on the Athens Stock Exchange.

These annual financial statements (the financial statements) were approved for issue by the Board of Directors on March 10, 2016.

Summary of significant accounting policies

The principal accounting policies adopted in the preparation of these financial statements are set out below:

1.1.Basis of preparation

These financial statements comprise the separate financial statement of the Company and the consolidated financial statements of the Group. They have been prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB) and as adopted by the European Union and interpretations issued by the IFRS Interpretations Committee.

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, investment property, and derivative financial instruments that have been measured at fair value.

The preparation of financial statements, in conformity with IFRS, requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Significant Accounting Estimates and Judgments in note 2.

The financial statements have been prepared with the same accounting policies of the prior financial year, except for the adoption of the new or revised standards, amendments and/or interpretations that are mandatory for the periods beginning on or after 1 January 2015.

1.1.1.New standards, amendments to standards and interpretations issued and effective for the current financial year that have no significant impact on the financial statements of the Group and the Company

IFRIC 21 "Levies"

This interpretation sets out the accounting for an obligation to pay a levy imposed by government that is not income tax. The interpretation clarifies that the obligating event that gives rise to a liability to pay a levy (one of the criteria for the recognition of a liability according to IAS 37) is the activity described in the relevant legislation that triggers the payment of the levy. The interpretation could result in recognition of a liability later than today, particularly in connection with levies that are triggered by circumstances on a specific date.

Annual Improvements to IFRSs 2013

The amendments set out below describe the key changes to three IFRSs following the publication of the results of the IASB's 2011-13 cycle of the annual improvements project.

IFRS 3 "Business combinations"

This amendment clarifies that IFRS 3 does not apply to the accounting for the formation of any joint arrangement under IFRS 11 in the financial statements of the joint arrangement itself.

IFRS 13 "Fair value measurement"

The amendment clarifies that the portfolio exception in IFRS 13 applies to all contracts (including non-financial contracts) within the scope of IAS 39/IFRS 9.

IAS 40 "Investment property"

The standard is amended to clarify that IAS 40 and IFRS 3 are not mutually exclusive.

1.1.2. New standards, amendments to standards and interpretations issued but not yet effective nor early adopted by the Group and the Company

IFRS 9 "Financial Instruments" and subsequent amendments to IFRS 9 and IFRS 7 (effective for annual periods beginning on or after 1 January 2018)

IFRS 9 replaces the guidance in IAS 39 which deals with the classification and measurement of financial assets and financial liabilities and it also includes an expected credit losses model that replaces the incurred loss impairment model used today. IFRS 9 establishes a more principles-based approach to hedge accounting and addresses inconsistencies and weaknesses in the current model in IAS 39. The Group is currently investigating the impact of IFRS 9 on its financial statements. The Group cannot currently early adopt IFRS 9 as it has not yet been endorsed by the EU.

IFRS 15 "Revenue from Contracts with Customers" (effective for annual periods beginning on or after 1 January 2018)

IFRS 15 has been issued in May 2014. The objective of the standard is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries, and across capital markets. It contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognised. The underlying principle is that an entity will recognise revenue to depict the transfer of goods or services to customers at an amount that the entity expects

to be entitled to in exchange for those goods or services. The Group is currently investigating the impact of IFRS 15 on its financial statements. The standard has not yet been endorsed by the EU.

IFRS 16 "Leases" (effective for annual periods beginning on or after 1 January 2019)

IFRS 16 has been issued in January 2016 and supersedes IAS 17. The objective of the standard is to ensure the lessees and lessors provide relevant information in a manner that faithfully represents those transactions. IFRS 16 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17. Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently. The Group is currently investigating the impact of IFRS 16 on its financial statements. The standard has not yet been endorsed by the EU.

IAS 19R (Amendment) "Employee Benefits" (effective for annual periods beginning on or after 1 February 2015)

These narrow scope amendments apply to contributions from employees or third parties to defined benefit plans and simplify the accounting for contributions that are independent of the number of years of employee service, for example, employee contributions that are calculated according to a fixed percentage of salary.

IFRS 11 (Amendment) "Joint Arrangements" (effective for annual periods beginning on or after 1 January 2016)

This amendment requires an investor to apply the principles of business combination accounting when it acquires an interest in a joint operation that constitutes a 'business'.

IAS 16 and IAS 38 (Amendments) "Clarification of Acceptable Methods of Depreciation and Amortisation (effective for annual periods beginning on or after 1 January 2016)

This amendment clarifies that the use of revenue-based methods to calculate the depreciation of an asset is not appropriate and it also clarifies that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible asset.

IAS 27 (Amendment) "Separate financial statements" (effective for annual periods beginning on or after 1 January 2016)

This amendment allows entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements and clarifies the definition of separate financial statements.

IAS 1 (Amendments) "Disclosure initiative" (effective for annual periods beginning on or after 1 January 2016)

These amendments clarify guidance in IAS 1 on materiality and aggregation, the presentation of subtotals, the structure of financial statements and the disclosure of accounting policies.

IFRS 10, IFRS 12 and IAS 28 (Amendments) "Investment entities: Applying the consolidation exception" (effective for annual periods beginning on or after 1 January 2016)

These amendments clarify the application of the consolidation exception for investment entities and their subsidiaries. The amendments have not yet been endorsed by the EU.

IAS 12 (Amendments) "Recognition of Deferred Tax Assets for Unrealised Losses" (effective for annual periods beginning on or after 1 January 2017)

These amendments clarify the accounting for deferred tax assets for unrealised losses on debt instruments measured at fair value. The amendments have not yet been endorsed by the EU.

Annual Improvements to IFRSs 2012 (effective for annual periods beginning on or after 1 February 2015)

The amendments set out below describe the key changes to certain IFRSs following the publication of the results of the IASB's 2010-12 cycle of the annual improvements project.

IFRS 2 "Share-based payment"

The amendment clarifies the definition of a 'vesting condition' and separately defines 'performance condition' and 'service condition'.

IFRS 3 "Business combinations"

The amendment clarifies that an obligation to pay contingent consideration which meets the definition of a financial instrument is classified as a financial liability or as equity, on the basis of the definitions in IAS 32 "Financial instruments: Presentation". It also clarifies that all non-equity contingent consideration, both financial and non-financial, is measured at fair value through profit or loss.

IFRS 8 "Operating segments"

The amendment requires disclosure of the judgements made by management in aggregating operating segments.

IFRS 13 "Fair value measurement"

The amendment clarifies that the standard does not remove the ability to measure short-term receivables and payables at invoice amounts in cases where the impact of not discounting is immaterial.

IAS 16 "Property, plant and equipment" and IAS 38 "Intangible assets"

Both standards are amended to clarify how the gross carrying amount and the accumulated depreciation are treated where an entity uses the revaluation model.

IAS 24 "Related party disclosures"

The standard is amended to include, as a related party, an entity that provides key management personnel services to the reporting entity or to the parent of the reporting entity.

Annual Improvements to IFRSs 2014 (effective for annual periods beginning on or after 1 January 2016)

The amendments set out below describe the key changes to four IFRSs.

IFRS 5 "Non-current assets held for sale and discontinued operations"

The amendment clarifies that, when an asset (or disposal group) is reclassified from 'held for sale' to 'held for distribution', or vice versa, this does not constitute a change to a plan of sale or distribution, and does not have to be accounted for as such.

IFRS 7 "Financial instruments: Disclosures"

The amendment adds specific guidance to help management determine whether the terms of an arrangement to service a financial asset which has been transferred constitute continuing involvement and clarifies that the additional disclosure required by the amendments to IFRS 7, 'Disclosure – Offsetting financial assets and financial liabilities' is not specifically required for all interim periods, unless required by IAS 34.

IAS 19 "Employee benefits"

The amendment clarifies that, when determining the discount rate for post-employment benefit obligations, it is the currency that the liabilities are denominated in that is important, and not the country where they arise.

IAS 34 "Interim financial reporting"

The amendment clarifies what is meant by the reference in the standard to 'information disclosed elsewhere in the interim financial report'.

1.2.Consolidation

(a) Subsidiaries

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries. Subsidiaries are all entities (including special purpose entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group uses the full acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest's proportionate share of the acquiree's net assets.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer's previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognized in the income statement.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount recognised for non-controlling interest and the fair value of any other participation previously held in the subsidiary acquired over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the amount recognized for noncontrolling interest and the fair value of any other participation previously held in the subsidiary acquired the gain is recognised in profit or loss (note 1.6).

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.

Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance.

In the Company's separate financial statements, investments in subsidiaries are account for at cost less impairment, if any. Cost is adjusted to reflect changes in consideration arising from contingent consideration amendments.

The subsidiaries' financial statements are prepared as of the same reporting date and using the same accounting policies as the parent company. Intra-group transactions, balances and unrealised gains/losses on transactions between group companies are eliminated.

(b) Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as transactions with the owners in their capacity as owners. The difference between consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

(c) Disposal of subsidiaries

When the Group ceases to have control any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

(d) Joint arrangements

Prior to 1 January 2014, the Group's interests in jointly controlled entities were proportionately consolidated.

The Group has adopted IFRS 11, 'Joint arrangements', on 1 January 2014. This resulted in the Group changing its accounting policy for its interests in joint arrangements..

Under IFRS 11 investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations each investor has rather than the legal structure of the joint arrangement. The Group has assessed the nature of its joint arrangement and determined it to be a joint venture. Joint ventures are consolidated with the equity method of consolidation.

Under the equity method of accounting, interests in joint ventures are initially recognized at cost and adjusted thereafter to recognize the Group's share of the post-acquisition profits or losses and movements in other comprehensive income. When the Group's share of losses in a joint venture equals or exceeds its interests in the joint ventures (which includes any long-term interests that, in substance, form part of the Group's net investment in the joint ventures), the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the joint ventures.

Unrealized gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group's interest in the joint ventures. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of joint ventures have been adjusted where necessary to ensure consistency with the policies adopted by the Group. The financial statements of the joint venture are prepared for the same reporting date with the parent company.

In the Company's stand-alone financial statements, the investment in joint ventures is stated at cost less impairment, if any.

(e)Associates

Associates are entities over which the Group has significant influence but which it does not control and generally has between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. The Group's investment in associates includes goodwill (net of any cumulative impairments losses) identified on acquisition.

Under the equity method the Group's share of the post-acquisition profits or losses is recognised in the income statement and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Group's share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognize further losses, unless the Group has incurred legal or constructive obligations or made payments on behalf of the associates.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amount previously recognized in other comprehensive income is reclassified to profit or loss where appropriate. Upon loss of significant influence over the associate, the Group measures and recognizes any retained investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retained investment and proceeds from disposal is recognized in profit or loss.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of the impairment as the difference between the recoverable amount of the associate ant its carrying value and recognizes the amount adjacent to "share of profit/(loss) of associates and joint ventures" in the income statement.

Profit and losses resulting from upstream and downstream transactions between the Group and its associate are recognized in the Group's financial statements only to the extent of unrelated investor's interests in the associates. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates; unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

The financial statements of the associates are prepared for the same reporting date with the Parent Company.

In the Company's separate financial statements, the investment in associates is stated at cost less impairment, if any.

(f) Commitments to purchase interests held by non-controlling interests

As part of the acquisition process of certain entities, the Group has granted third party shareholders the option to require the Group to purchase their shares subject to predetermined conditions (a "put" option). These shareholders could be either international institutions, or private investors who are essentially financial or industrial investors or former shareholders of the acquired entities (note 27 & 31).

The Group applies the following policy for the recognition of put options:

• Non-controlling interest is still attributed its share of profit and losses (and other changes in equity).

• The non-controlling interest is reclassified as a liability at each reporting date, as if the acquisition took place at that date.

Any difference between the fair value of the liability under the put option at the end of the reporting period and the non-controlling interest reclassified is calculated based on the current policy of the Group for acquisitions of non-controlling interests.

If the put option is ultimately exercised, the amount recognized as the financial liability at that date will be extinguished by the payment of the exercise price. If the put option expires unexercised, the position will be unwound such that the non-controlling interest at that date is reclassified back to equity and the financial liability is derecognized.

1.3.Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each entity in the Group are measured in the functional currency, which is the currency of the primary economic environment in which each Group entity operates. The consolidated financial statements are presented in Euros, which is the functional and presentation currency of the Company and the presentation currency of the Group.

(b)Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates (i.e. spot rates) prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in other comprehensive income as qualifying net investment hedges. When the related investment is disposal of, the cumulative amount is reclassified to profit or loss.

Translation differences on non-monetary financial assets and liabilities, such as equity investments held at fair value are included in the income statement. Translation differences on non-monetary financial assets, such as equities classified as available-for-sale, are included in other comprehensive income.

(c) Group companies

The financial statements of all group entities (none of which operate in a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

-Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet.

-Income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions).

-All exchange differences resulting from the above are recognised in other comprehensive income and subsequently included in "foreign currency translation reserve".

-On the disposal of a foreign operation, the cumulative exchange differences relating to that particular foreign operation, recognized in the "foreign currency translation reserve" within equity, are recognised in the income statement as part of the gain or loss on sale. On the partial disposal of a foreign subsidiary, the proportionate share of the cumulative amount is re-attributed to the non-controlling interest in that operation.

On consolidation, exchange differences arising from the translation of borrowings designated as hedges of investments in foreign entities, are taken to other comprehensive income and included under "currency translation differences on derivative hedging position" in other reserves.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognized in other comprehensive income.

1.4.Property, plant and equipment

Property, plant and equipment is stated at historical cost less accumulated depreciation and impairment losses, except for land (excluding quarries), which is shown at cost less impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the items and any environmental rehabilitation costs to the extent that they have been recognised as a provision (refer to note 1.20). Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the income statement as incurred. Subsequent costs are depreciated over the remaining useful life of the related asset or to the date of the net major subsequent cost whichever is the sooner.

Depreciation, with the exception of quarries and land, is calculated using the straight-line method to allocate the cost of the assets to their residual values over their estimated useful lives as follows:

Buildings Up to 50 years
Plant and machinery Up to 40 years
Motor vehicles 5 to 20 years
Office equipment furniture and fittings (including computer equipment and
software integral to the operation of the hardware)
2 to 10 years
Minor value assets Up to 2 years

Land on which quarries are located is depreciated on a depletion basis. This depletion is recorded as the material extraction process advances based on the unit-of-production method. Other land is not depreciated.

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount (refer to note 1.8).

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in operating profit.

Interest costs on borrowings specifically used to finance the construction of property, plant and equipment are capitalised during the construction period if recognition criteria are met (refer to note 1.29).

1.5.Investment property

Investment property is property held for long-term rental yields or for capital appreciation or both and that is not occupied by any of the subsidiaries of the Group. Owner-occupied properties are held for production and administrative purposes. This distinguishes owner-occupied property from investment property.

Investment property is measured initially at cost, including related transaction costs and where applicable borrowing costs (refer to 1.29).

After initial recognition investment property is carried at fair value. Fair value reflects market conditions at the reporting date and is determined internally on an annual basis by management or external valuators. The best evidence of fair value is provided by current prices in an active market for similar property in the same location and condition and subject to the same lease terms and other conditions (comparable transactions). When such identical conditions are not present, the Group takes account of, and makes allowances for, differences from the comparable properties in location, nature and condition of the property or in contractual terms of leases and other contracts relating to the property.

A gain or loss arising from a change in the fair value of investment property is recognized in the period in which it arises in the income statement within "other income" or "other expense" as appropriate.

Subsequent expenditure is capitalised to the asset's carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised.

The fair value of investment property does not reflect future capital expenditure that will improve or enhance the property and does not reflect the related future benefits from this future expenditure other than those a rational market participant would take into account when determining the value of the property.

Investment properties are derecognised when they have been disposed.

Where the Group disposes of a property at fair value in an arm's length transaction, the carrying value immediately prior to the sale is adjusted to the transaction price, and the adjustment is recorded in the income statement within net gain from fair value adjustment on investment property.

If an investment property becomes owner-occupied, it is reclassified as property, plant and equipment. Its fair value at the date of reclassification becomes its deemed cost for subsequent accounting purposes.

If an item of owner-occupied property becomes an investment property because its use has changed, IAS 16 is applied up to the date of transfer, since investment property is measured at fair value. The property is fair valued at the date of transfer and any revaluation gain or loss, being the difference between fair value and the previous carrying amount, is accounted for as a revaluation surplus or deficit in equity in accordance with IAS 16. Revaluation surplus is recognized directly in equity through other comprehensive income, unless there was an impairment loss recognized for the same property in prior years. In this case, the surplus up to the extent of this impairment loss is recognized in profit or loss and any further increase is recognized directly in equity through other comprehensive income. Any revaluation deficit is recognized in profit or loss.

1.6.Intangible assets

(a) Goodwill

Goodwill arises on the acquisition of subsidiaries and represents the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interest over the net identifiable assets acquired and liabilities assumed is smaller than the fair value of the net assets of the acquired subsidiary, the difference is recognized in the profit or loss. Goodwill represents the future economic benefits arising from assets that are not capable of being individually identified and separately recognized in a business combination.

Goodwill is not amortized. After initial recognition, it is measured at cost less any accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each cash generating unit that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

Impairment reviews are undertaken annually (even if there is no indication of impairment) or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of the value-in-use and the fair value less costs to sell. Any impairment is recognised immediately as an expense and is not subsequently reversed.

Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.

(b) Other intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs (note 1.7), are not capitalised and expenditure is reflected in profit and loss in the period in which the expenditure is incurred.

The Group's intangible assets have a finite useful life

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the income statement as the expense category that is consistent with the function of the intangible assets.

Acquired computer software programmes and licenses are capitalised on the basis of costs incurred to acquire and bring to use the specific software when these are expected to generate economic benefits beyond one year. Costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred.

The amortization methods used for the Group's intangibles are as follows:

Amortization Method Useful Lives
Patents, trademarks and
customer relationships
straight-line basis up to 20 years
Licenses (mining permits) straight-line basis /
depletion method
shorter of: the permit period
and the estimated life of the
underlying quarry
unit-of-production method
Development costs (quarries
under operating leases)
note 1.7 note 1.7
Computer software straight-line basis 3 to 7 years

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the income statement when the asset is derecognised.

1.7.Deferred stripping costs

Stripping costs comprise the removal of overburden and other waste products. Stripping costs incurred in the development of a quarry before production commences are capitalised as follows:

Where such costs are incurred on quarry land that is owned by the Group, these are included within the carrying amount of the related quarry, under Property, plant and equipment and subsequently depreciated over the life of the quarry on a units-of-production basis. Where such costs are incurred on quarries held under an operating lease, these are included under 'Development expenditure' under Intangible assets and amortised over the shorter of the lease term and the useful life of the quarry.

1.8.Impairment of non-financial assets other than Goodwill

Assets that have an indefinite useful life (land not related to quarries) are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised, as an expense immediately, for the amount by which the asset's carrying amount exceeds its recoverable amount. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date. An asset's recoverable amount is the higher of an asset or cash generating units (CGU) fair value less costs of sell and its value-in-use.

1.9.Leases

a) Where a Group entity is the lessee

Leases where substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.

Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the commencement of the lease at the lower of the fair value of the leased property or the present value of the minimum lease payments, each determined at the inception of the lease. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in liabilities. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Property, plant and equipment acquired under finance leases are depreciated over the shorter of the useful life of the asset and the lease term.

Leases are classified as finance leases or operating leases at the inception of the lease.

b) Where a Group entity is the lessor

Leases in which the Group entity does not transfer substantially all the risks and benefits of ownership of an asset are classified as operating leases. Operating leases of property, plant and equipment are recognized according to their nature in the statement of financial position.

Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income.

Contingent rents are recognised as revenue in the period in which they are earned.

1.10.Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average cost method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity) but excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

Appropriate allowance is made for damaged, obsolete and slow moving items. Write-downs to net realisable value and inventory losses are expensed in cost of sales in the period in which the write-downs or losses occur.

1.11.Trade receivables

Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

1.12.Cash and cash equivalents

In the statement of cash flows, cash and cash equivalents comprise cash on hand, deposits held at call with banks, other short-term highly liquid investments, and bank overdrafts, if they exist. Bank overdrafts are included within borrowings in current liabilities in the balance sheet. The components of cash and cash equivalents have a negligible risk of change in value.

1.13.Share capital

  • (a) Ordinary shares and non-redeemable non-voting preferred shares with minimum statutory non-discretionary dividend features are classified as equity. Share capital represents the value of company's shares in issue. Any excess of the fair value of the consideration received over the par value of the shares issued is recognized as "share premium" in shareholders' equity.
  • (b) Incremental external costs directly attributable to the issue of new shares or share options are shown in equity as a deduction, net of tax, from the proceeds.
  • (c) Where the Company or its subsidiaries purchases the Company's own equity share capital (treasury shares), the consideration paid including any attributable incremental external costs net of income taxes is deducted from total shareholders' equity until they are cancelled or sold. Where such shares are subsequently sold or reissued, any consideration received, net of any directly attributed incremental transaction costs and the related income tax effect, is included in shareholders' equity.

1.14.Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. In subsequent periods, borrowings are carried at amortised cost using the effective interest method. Any difference between proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognized as transactions costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are classified as current liabilities unless the Group entity has an unconditional right to defer settlement for at least 12 months after the balance sheet date.

1.15.Current and deferred income taxes

The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Current income tax is calculated on the basis of the tax laws enacted or substantively enacted at the reporting date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognised using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, if the deferred income tax arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit and loss, it is not accounted for.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, joint arrangements and associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted at the reporting date and are expected to apply when the related deferred income tax asset is realised or the related deferred income tax liability is settled.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

1.16.Employee benefits

(a) Pension and other retirement obligations

The Group operates various pension and other retirement schemes, including both defined benefit and defined contribution pension plans in accordance with the local conditions and practices in the countries in which it operates. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. A defined benefit plan is a pension plan that is not a defined contribution plan.

Typically defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.

The liability recognized in the statement of financial position in respect of defined benefit pension or retirement plans is the present value of the defined benefit obligation at the reporting date less the fair value of plan assets.

The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high quality corporate bonds or government bonds which have terms to maturity approximating to the terms of the related pension obligation.

Past service costs are recognized in profit or loss on the earlier of:

  • The date of the plan amendment or curtailment, and
  • The date that the Group recognizes restructuring-related costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Group recognizes the following changes in the net defined benefit obligation:

  • Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements under other operating expenses/income
  • Net interest expense or income under finance expenses

Re-measurements, comprising of the actuarial gains and losses, the effect of the asset ceiling, excluding net interest (not applicable to the Group) and the return on plan assets (excluding net interest), are recognized immediately in the statement of financial position with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.

For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. Once the contributions have been paid, the Group has no further payment obligations. The regular contributions constitute net periodic costs for the year in which they are due and as such are included in staff costs.

(b)Termination benefits

Termination benefits are payable whenever an employee's employment is terminated by the Group, before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits.

The Group recognises termination benefits when it is demonstrably committed to a termination when the entity has a detailed formal plan to terminate the employment of current employees without possibility of withdrawal. The obligating event is the termination and not the service. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.

(c) Profit sharing and bonus plans

A liability for employee benefits in the form of profit sharing and bonus plans is recognised in other provisions when the following conditions are met:

  • there is a formal plan and the amounts to be paid are determined before the time of issuing the financial statements; or

  • past practice has created a valid expectation by employees that they will receive a bonus/ profit sharing and the amount can be determined before the time of issuing the financial statements.

(d)Share-based payments

Share options are granted to certain members of senior management at a discount to the market price of the shares at par value on the respective dates of the grants and are exercisable at those prices. The options must be exercised within twelve months of their respective vesting period. The scheme has a contractual option term of three years.

The fair value of the employee services received in exchange for the grant of the options is recognised as an expense during the vesting period, which is the period over which all of the specific vesting conditions are to be satisfied. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, specified by the date of grant:

Including any market performance conditions (for example, an entity's share price);

Excluding the impact if any service and non-market performance vesting conditions (for example profitability, sales growth targets and remaining an employee of the entity over a specified time period); and

Including the impact of any non-vesting conditions (for example, the requirement for employees to save)

At the end of each reporting date, the Group revises its estimates of the number of options that are expected to vest and recognises the impact of the revision of original estimates, if any, in administrative expenses and cost of goods sold in the income statement, with a corresponding adjustment to equity. When the options are exercised, the Company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium reserve.

1.17.Government grants

Government grants are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions.

Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognized as deferred revenue in the statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

1.18.CO2 Emission rights

Emission rights are accounted for under the net liability method, based on which the Group recognizes a liability for emissions when the emissions are made and are in excess of the allowances allocated. The Group has chosen to measure the net liability on the basis of the period for which the irrevocable right to the cumulative emissions rights have been received. Emission rights purchases in excess of those required to cover its shortages are recognized as intangible asset. Proceeds from the sale of granted emission rights are recorded as a reduction to cost of sales.

1.19.Provisions

Provisions represent liabilities of uncertain timing or amount and are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the Group expects a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presenting in the income statement net of any reimbursement.

Provisions are not recognized for future operating losses. The Group recognises a provision for onerous contracts when the economic benefits to be derived from a contract are less than the unavoidable costs of meeting the obligations under the contract.

Restructuring provisions comprise lease termination penalties and employee termination payments, and are recognised in the period in which the Group becomes legally or constructively committed to payment. Costs related to the ongoing activities of the Group are not provided for in advance.

Where the effect of the time value of money is material, provisions is measured at the present value of the expenditure expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due the passage of time is recognized as a finance expense.

1.20.Site restoration, quarry rehabilitation and environmental costs

Companies within the Group are generally required to restore the land used for quarries and processing sites at the end of their producing lives to a condition acceptable to the relevant authorities and consistent with the Group's environmental policies. Provisions for environmental restoration are recognised when the Group has a present legal or constructive obligation as a result of past events and, it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated.

Provisions associated with environmental damage represent the estimated future cost of remediation. Estimating the future costs of these obligations is complex and requires management to use judgment.

The estimation of these costs is based on an evaluation of currently available facts with respect to each individual site and considers factors such as existing technology, currently enacted laws and regulations and prior experience in remediation of sites. Inherent uncertainties exist in such evaluations primarily due to unknown conditions, changing governmental regulations and legal standards regarding liability, the protracted length of the clean-up periods and evolving technologies. The environmental and remediation liabilities provided for reflect the information available to management at the time of determination of the liability and are adjusted periodically as remediation efforts progress or as additional technical or legal information becomes available.

Estimated costs associated with such rehabilitation activities are measured at the present value of future cash outflows expected to be incurred. When the effect of the passage of time is not significant, the provision is calculated based on discounted cash flows. Where a closure and environmental obligation arises from quarry/mine development activities or relate to the decommissioning property, plant and equipment the provision can be capitalized as part of the cost of the associated asset (intangible or tangible). The capitalized cost is depreciated over the useful life of the asset and any change in the net present value of the expected liability is included in finance costs, unless they arise from changes in accounting estimates of valuation.

1.21.Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for the sale of goods and services stated net of value-added tax, rebates and discounts.

Revenue from the sale of goods is recognised when significant risks and rewards of ownership of the goods are transferred to the buyer (usually upon delivery and customer acceptance) and the realization of the related receivable is reasonably assured.

Revenue arising from services is recognised in the accounting period in which the services are rendered, by reference to stage of completion of the specific transaction and assessed on the basis of the actual service provided as a proportion of the total services to be provided.

Revenue from rental income arising, from operating leases, is accounted for on a straight-line basis over the lease terms.

Interest income is recognised using the effective interest method. If there is an impairment of loans or receivables, their carrying value is reduced to their recoverable amount, which is the present value of the future cash flows discounting with the initial effective interest rate. Afterwards, the interest income is recognised with the same interest rate (the initial effective interest rate) multiplied with the impaired carrying value.

Dividend income is recognised when the right to receive the payment is established.

1.22.Dividend distribution

Dividend to the Company's shareholders is recognized in the financial statements in the period in which the Board of Directors' proposed dividend is ratified at the Shareholders' Annual General Meeting.

1.23.Segment information

Segment information is presented on the same basis as the internal information provided to the chief operating decision maker. The chief operating decision maker is the person (or the group of persons) that allocates resources to and assesses the operating results of the segments.

For management purposes, the Group is structured in four geographic regions: Greece and Western Europe, North America, South East Europe and Eastern Mediterranean. Each region is a set of countries. The aggregation of countries is based on proximity of operations and to an extent in similarity of economic and political conditions. Each region has a regional Chief Executive Officer (CEO) who reports to the Group's CEO. In addition, the Finance Department is organized also by geographic region for effective financial controlling and performance monitoring.

1.24.Financial assets

Classification

The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorized as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as noncurrent.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the end of the reporting period.

Recognition and measurement

Regular purchases and sales of financial assets are recognised on the trade-date. This is the date on which the group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss is initially recognised at fair value, and transaction costs are expensed in the income statement. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest method.

Gains or losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are presented in the income statement within the period in which they arise.

Changes in the fair value of monetary and non-monetary securities classified as available for sale are recognised in other comprehensive income. When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments recognised in equity are included in the income statement.

Dividends on available-for-sale equity instruments are recognised in the income statement when the group's right to receive payments is established.

1.25.Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset recognised amounts, and there is an intention to settle on the net basis the liability or realise the asset and settle the liability simultaneously. The legally enforceable right to offset should not depend on future events but it should apply in the ordinary course of business. However, it should be allowed for the related amounts to be set off in certain circumstances, such as bankruptcy or the termination of a contract.

1.26.Impairment of financial assets

a) Assets carried at amortised cost

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a 'loss event') and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash flows.

For loans and receivables category, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the income statement.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor's credit rating), the reversal of the previously recognised impairment loss is recognised in the income statement.

(b) Assets classified as available-for-sale

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity investments classified as available- for- sale, a significant or prolonged decline in the fair value of the security below its cost is also evidence that the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised in profit or loss. Impairment losses recognised in the consolidated income statement on equity instruments are not reversed through the consolidated income statement. If, in a subsequent period, the fair value of a debt instrument classified as available- for- sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through the consolidated income statement.

1.27.Derivative financial instruments and hedging activities

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently periodically re-measured at their fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss, except for the effective portion of cash flow hedges, which is recognized in other comprehensive income (OCI) and later is reclassified to profit or loss when the hedge item affects profit or loss.

For the purpose of hedge accounting, hedges are classified as:

  • Fair value hedges when hedging the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment
  • Cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a particular risk associated with a recognized asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognized firm commitment
  • Hedges of a net investment in a foreign operation

At the inception of the hedge relationship, Group formally designates and documents the hedge relationship between hedging instruments and hedged items, to which it wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the entity will assess the effectiveness of changes in the hedging instrument's fair value in offsetting the exposure to changes in the hedged item's fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated.

The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining hedged item is more than 12 months and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months.

Hedges that meet the strict criteria for hedge accounting are accounted for, as described below:

Fair value hedges

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The gain or loss relating both to the effective and ineffective portion of interest rate swaps hedging fixed rate borrowings is recognized in the income statement within "Finance income/expense".

Cash flow hedges

The effective portion of gains or losses from measuring cash flow hedging instruments is recognized in OCI and accumulated in reserves, in the account "translation differences on derivate hedging position". The gain or loss relating to the ineffective portion is recognized immediately in the income statement within "Finance income/expenses".

Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss.

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to profit or loss

Net investment hedge

Hedges of net investments in foreign entities are accounted for similarly to cash flow hedges. Where the hedging instrument is a derivative, any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in currency translation differences on derivative hedging position in other reserves. The gain or loss relating to the ineffective portion is recognised immediately in other income/expenses in the income statement. However, where the hedging instrument is not a derivative (for example, a foreign currency borrowing), all foreign exchange gains or losses arising on the translation of a borrowing that hedges such an investment (including any ineffective portion of the hedge) are recognized in equity in "translation differences on derivative hedging position" in "other reserves".

Gains or losses accumulated in equity are included in the income statement when the foreign operation is partially disposed of or sold. The Group's 'other reserves' include gains that have resulted from such hedging activities carried out in the past.

Derivatives that do not qualify for hedge accounting

Certain derivative transactions, , do not qualify for hedge accounting under rules in IFRS. Any gains or losses arising from changes in the fair value of financial instruments that are not part of a hedging relationship are included in finance income/(expenses), or gain/(loss) from foreign exchange differences in the income statement for the period in which they arise.

1.28.Derecognition of financial assets and liabilities

(i) Financial assets: A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognized when:

  • the rights to receive cash flows from the asset have expired;
  • 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 has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the assets, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Where the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the Group's continuing involvement in the asset. A respective liability is also recognized.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

(ii) Financial liabilities: A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the consolidated statement of income.

1.29.Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying which is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets until such as the asset is substantially ready for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. All other borrowing costs are expensed in the profit of loss in the period in which they are occurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

1.30.Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

1.31. Exceptional items

Exceptional items are disclosed separately in the financial statements where it is necessary to do so to provide further understanding of the financial performance of the group. They are material items of income or expense that have been shown separately due to the significance of their nature or amount. Examples of exceptional items include gains/losses on disposal of non-current assets, restructuring costs and other unusual gains or losses.

2.Significant accounting estimates and judgments

The preparation of the financial statements requires management to make estimations and judgments that affect the reported disclosures. On an ongoing basis, management evaluates its estimates, which are presented bellow in paragraphs 2.1 to 2.17.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

These management's estimation and assumptions form the bases for making judgments about the carrying value of assets and liabilities that are not readily available from other sources. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

2.1.Impairment of goodwill and other non-financial assets

Management tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in paragraph 1.6. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. The basic assumptions that are used in the calculations are explained further in note 13. These calculations require the use of estimates which mainly relate to future earnings and discount rates.

Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, in accordance with the accounting policy stated in paragraph 1.8.

2.2.Income taxes

Group entities are subject to income taxes in numerous jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. 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.

2.3.Deferred tax assets

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. Further details on taxes are disclosed in note 8.

2.4.Asset lives and residual values

Property, plant and equipment (PPE) are depreciated over their estimated useful lives. The actual lives of the assets are assessed annually and may vary depending on a number of factors. In reassessing asset lives, factors such as technological innovation, product lifecycles, life-of-mine and maintenance programmes are taken into account.

2.5.Allowance for net realizable value of inventory

The allowance for net realizable value of inventory, in accordance with the accounting policy as stated in paragraph 1.10, represents management's best estimate, based on historic sales trends and its assessment on quality and volume, of the extent to which the stock on hand at the reporting date will be sold below cost.

2.6.Allowance for doubtful accounts receivable

The Group's management periodically reassess the adequately of the allowance for doubtful accounts receivable using parameters such as its credit policy, reports from its legal counsel on recent developments of the cases they are handling, and its judgment/estimate about the impact of other factors affecting the recoverability of the receivables.

2.7.Provision for environmental rehabilitation

The Group recognizes a provision for environmental rehabilitation and, more specifically, a provision for future restoration of land disturbed, as of the reporting date, as a result of past activity and in line with the prevailing environmental legislation of each country in which it operates or the binding group practices. The provision for environmental rehabilitation is re-estimated on an annual basis and it reflects the present value of the expected restoration costs, using estimated cash flows as of the reporting date and is calculated based on the area of the land disturbed at the reporting date and the cost of rehabilitation per metric unit of land at the level of the broader area of interest. Given the complexity of the calculations and the significant assumptions therein. Management provides at the reporting date its best estimate in relation to the present value of the aforementioned liability.

2.8.Provision for staff leaving indemnities

The cost for the staff leaving indemnities is determined based on actuarial valuations. The actuarial valuation requires management making assumptions about future salary increases, discount rates, mortality rates, etc. Management, at each reporting date when the provision is re-examined, tries to give its best estimate regarding the above mentioned parameters.

2.9.Provision for restructuring costs

The Group estimates the level of provision required for restructuring costs based on historical experience as well as other specific relevant factors.

2.10. Contingent liabilities

The existence of contingent liabilities requires from management making assumptions and estimates continuously related to the possibility that future events may or may not occur as well as the effects that those events may have on the activities of the Group.

2.11. Business combinations

On the acquisition of a company or business, a determination of the fair value and the useful lives of tangible and intangible assets acquired is performed, which requires the application of judgement. Future events could cause the assumptions used by the Group to change which could have an impact on the results and net position of the Group. Further information on business combination is given in paragraph 1.2.

2.12. Valuation of financial instruments

The valuation of derivative financial instruments is based on the market position at the reporting date. The value of the derivative instruments fluctuates on a daily basis and the actual amounts realised may differ materially from their value at the reporting date. Further information on financial instruments is given in paragraph 1.27.

2.13. Fair value of share-based payments

Fair values used in calculating the amount to be expensed as a share-based payment is subject to a level of uncertainty. The Group is required to calculate the fair value of the cash-settled instruments granted to employees in terms of the share option schemes, and the share-based payment charges relating to empowerment transactions. These fair values are calculated by applying a valuation model, which is in itself judgmental, and takes into account certain inherently uncertain assumptions. The basic assumptions that are used in the calculations are explained further in note 22. Further information on share based payments is given in paragraph 1.16d.

2.14. Weighted average number of shares

Using the weighted average number of shares during the period reflects the possibility that the amount of shareholders' capital varied during the period as a result of a larger or smaller number of shares being outstanding at any time. Judgment is required to determine the number of shares and the timing when shares are issued. The calculation of the weighted average number of shares impacts the calculation of basic and diluted earnings per share.

2.15. Put options

Put options were granted to the remaining non-controlling shareholders of the Group subsidiary Antea Cement SHA, entitling them to sell their interests in Antea Cement SHA at future contracted dates. The Group has recognized the fair value of the non-controlling interests, being the present value of the future estimated option price, as other current liability in the statement of financial position with a corresponding entry reducing non-controlling interests. The present value and timing of the expected redemptions and amounts need to be determined at each reporting date.

Judgment is used in calculating the expected future redemption values and timing as to when the various noncontrolling shareholders will exercise their options.

2.16. Sources of estimation uncertainty

There are no significant assumptions made concerning the future or other sources of estimation uncertainty that have been identified as giving rise to a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.

Exception of the aforementioned sources of uncertainty is the risk generated from latest developments on Greece.

The Legislative Act dated 28.06.2015 declared a bank holiday in Greece while capital controls were imposed. Banks resumed their operations on 20.07.2015 while capital controls still remain in force.

The aforementioned developments had a negative impact on the overall economic activity in Greece and resulted in a slowdown in construction as well. However, risks stemming out of the Group's exposure in Greece are mitigated.

In terms of liquidity, the Group maintains adequate cash reserves (€122 million at 31.12.2015), deposited with international banks outside Greece. Furthermore the Group has successfully diversified its funding sources with more than 85% of its debt being raised in the international capital and bank markets.

The Group's geographical diversification, achieved through investments of over €3 billion since 2000, has extended the business and strengthened TITAN, effectively delinking the Group from Greek sovereign risk. It is noted that on June 29th 2015, Standard & Poor's confirmed Titan's credit rating as 'BB' and improved its outlook from 'stable' to 'positive'. The Group continuously evaluates the economic environment in Greece in order to assess the risks related to its business and timely take the necessary mitigating actions.

2.17. Going concern

Management have taken into account the following: a) the Company's financial position, b) the risks facing the Company that could impact on its business model and capital adequacy and c) the fact that no material uncertainties are identified to the Company's ability to continue as a going concern in the foreseeable future and in any event over a period of at least twelve months from the date of approval of the Financial Statements and states that it considers it appropriate for the Company to continue to adopt the going concern basis in preparing its Financial Statements and that no material uncertainties are identified to the Company's ability to continue to adopt the going concern basis in preparing its Financial Statements in the foreseeable future and in any event over a period of at least twelve months from the date of approval of the Financial Statements.

3. Operating segment information

For management information purposes, the Group is structured in four operating (geographic) segments: Greece and Western Europe, North America, South Eastern Europe and Eastern Mediterranean. Each operating segment is a set of countries. The aggregation of countries is based on geographic position.

Each region has a regional Chief Executive Officer (CEO) who reports to the Group's CEO. In addition, the Group's finance department is organized by geographic region for effective financial control and performance monitoring.

Management monitors the operating results of its business units separately for the purpose of making decisions, allocating resources and assessing performance. Segment performance is evaluated based on Earnings before Interest, Taxes, Depreciation & Amortization (EBITDA).

Information by operating segment

(all amounts in Euro thousands)

For the year ended 31 December 2015

Greece and Western
Europe
North America South Eastern
Europe
Eastern
Mediterranean
Total
Gross revenue 332,219 679,972 213,899 240,749 1,466,839
Inter-segment revenue -63,385 -222 -5,414 - -69,021
Revenue from external customers
Profit before interest, taxes, depreciation, amortization
268,834 679,750 208,485 240,749 1,397,818
and impairment
Depreciation, amortization and impairment of tangible
44,839 100,842 55,782 14,959 216,422
and intangible assets -22,693 -64,672 -22,091 -21,239 -130,695
Profit/(loss) before interest and taxes 22,146 36,170 33,691 -6,280 85,727
Greece and Western
Europe
North America South Eastern
Europe
Eastern
Mediterranean
Total
ASSETS
Property, plant & equipment 308,218 645,434 311,464 542,593 1,807,709
Intangible assets and goodwill 23,381 213,854 67,878 149,471 454,584
Other non-current assets 13,788 11,353 6,844 76,916 108,901
Current assets 213,548 135,635 109,994 119,104 578,281
Total Assets 558,935 1,006,276 496,180 888,084 2,949,475
LIABILITIES
Non-current liabilities 170,434 442,575 100,185 227,584 940,778
Current liabilities 15,537 83,858 47,287 156,730 303,412
Total Liabilities 185,971 526,433 147,472 384,314 1,244,190
(all amounts in Euro thousands) Greece and Western
Europe
North America South Eastern
Europe
Eastern
Mediterranean
Total
Capital expenditures (note 11,12,13) 17,812 91,819 13,826 50,019 173,476
Impairment of property, plant and equipment (note 11) - 12,548 - 507 13,055
Impairment of Goodwill (note 13)
Allowance/(reversal of allowance) for doubtful debtors
3,990 - - 3,990
(note 20) 176 -89 411 295 793
Investment in associates & joint ventures (note 15) 398 5,047 3,069 73,994 82,508
Defined benefit assets (note 17, 25) - 4,578 - - 4,578

Capital expenditures consist of additions of property, plant and equipment, intangible assets and investment property as well as assets from acquisition of subsidiaries.

Impairment charges are included in the income statement.

Turnover consists of the sale of goods and services. There are sales between geographical segments at arms length. Total assets and capital expenditures are presented in the geographical segment of the company that owns the assets.

The transactions between segments are performed as described in note 32.

|7

3. Operating segment information (continued)

Information by business activities

(all amounts in Euro thousands)

For the year ended 31 December 2015

Ready mix,
aggregates and
Cement blocks Other Total
Turnover 886,198 507,626 3,994 1,397,818

The cement activity includes cement and cementitious materials.

The business activities that are common to all segments of the Group are the production and trade of cement, ready-mix, aggregates and transportation services.

Greece and Western Europe segment is also engaged in the production and trade of dry mortars and the Regulatory Electricity Market. North America segment includes the production and trade of blocks and the processing of fly ash. Finally, South Eastern Europe and Eastern Mediterranean segments are engaged in the processing of alternative fuels.

Other activities include transportation services and the activity of Regulatory Electricity Market in Greece. None of these activities have the prerequisite magnitude to be presented separately.

Within the activity of the Company in the Greek electricity market, the Company has received the No.731/10.13.14 License Electricity from the Regulatory Authority for Energy and in 2015 achieved electricity sales of €238 thousands to the Electricity Market Operator.

The Company sold cement and aggregates, representing in 2015 7.21% (2014: 9.93% ) of the Company's turnover, to its subsidiary Interbeton S.A..

At Group level, turnover is derived from a set of customers none of which separately represents greater than or equal to 10%.

Information by operating segment

(all amounts in Euro thousands)

For the year ended 31 December 2014

Greece and Western South Eastern Eastern
Europe North America Europe Mediterranean Total
Gross revenue 328,106 469,107 217,398 196,840 1,211,451
Inter-segment revenue -43,193 -189 -9,655 - -53,037
Revenue from external customers 284,913 468,918 207,743 196,840 1,158,414
Profit before interest, taxes, depreciation, amortization
and impairment (*)
36,606 46,507 67,446 31,032 181,591
Depreciation, amortization and impairment of tangible
and intangible assets -17,898 -46,694 -22,190 -18,253 -105,035
Profit/(loss) before interest and taxes 18,708 -187 45,256 12,779 76,556
Greece and Western
Europe
North America South Eastern
Europe
Eastern
Mediterranean
Total
ASSETS
Property, plant & equipment 308,700 551,289 315,882 501,411 1,677,282
Intangible assets and goodwill 27,414 192,778 69,806 151,810 441,808
Other non-current assets 15,236 12,222 5,481 82,988 115,927
Current assets 241,705 124,531 100,926 109,070 576,232
Total Assets 593,055 880,820 492,095 845,279 2,811,249
LIABILITIES
Non-current liabilities 205,221 404,358 98,634 190,207 898,420
Current liabilities 32,032 65,935 51,302 135,965 285,234
Total Liabilities 237,253 470,293 149,936 326,172 1,183,654

In 2015, Group amended its accounting allocation methodology and implement the Organization for Economic Co-operation and Development (OECD) guidelines for allocation of certain Head Office corporate expenses to Business Segments. If these changes were recorded in the same period of 2014, then the "profit before interest, taxes, depreciation, amortization and impairment" would have been as follows:

Period from 1/1-31/12/2014 Greece and Western
Europe
North America South Eastern
Europe
Eastern
Mediterranean
Total
Profit before interest, taxes, depreciation, amortization
and impairment - Published (*)
36,606 46,507 67,446 31,032 181,591
Profit before interest, taxes, depreciation, amortization
and impairment - Adjusted
44,548 42,020 65,255 29,768 181,591

(*) Beginning in January 1, 2015, certain holdings companies, which were incorporated in the geographic areas of North America, Southeastern Europe and the Eastern Mediterranean, are now incorporated in the geographical area of Greece and Western Europe as parts of the corporate center for monitoring purposes. As a result, certain amounts of the year ended 31 December 2014 are reclassified among the geographical segments.

3. Operating segment information (continued)

Information by operating segment

(all amounts in Euro thousands) Greece and
Western Europe
North America South Eastern
Europe
Eastern
Mediterranean
Total
Capital expenditures (note 11,12,13) 14,784 36,209 13,799 17,310 82,102
(Reversal of impairment)/impairment of property,
plant and equipment (note 11) -15 339 - - 324
Impairment of intangible assets-excluding goodwill
(note 13) -738 - - - -738
(Reversal of allowance)/allowance for doubtful
debtors (note 20) -921 241 1,473 25 818
Investment in associates & joint ventures (note 15) - 5,377 2,603 78,553 86,533
Defined benefit assets (note 17, 25) - 4,732 - - 4,732

Capital expenditures consist of additions of property, plant and equipment, intangible assets and investment properties as well as assets from acquisition of subsidiaries.

Impairment charges are included in the income statement.

Information by business activities

For the year ended 31 December 2014

(all amounts in Euro thousands) Ready mix,
aggregates and
Cement blocks Other Total
Turnover 776,816 378,515 3,083 1,158,414

Reconciliation of profit

Finance income and costs, and fair value gains and losses on financial assets are not allocated to indicidual segments as the underlying instruments are managed on a Group basis.

Group
(all amounts in Euro thousands) 2015 2014
Profit before interest and taxes 85,727 76,556
Income from participations and investments 1,565 -
Losses from participations and investments -2,805 -1,609
Finance income 1,767 2,148
Finance expense -67,360 -66,275
Gain from foreign exchange differences 17,435 31,056
Share of profit of associates and joint ventures 5,815 4,945
Profit before taxes 42,144 46,821

4. Other income and expenses

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Scrap sales 1,136 935 489 483
Compensation income 398 414 - -
Income from subsidies - - 137 198
Income from services 1,434 5,760 1,615 7,093
Rental income 1,628 1,996 1,213 1,325
Gains on disposal of property, plant and equipment (note 29) - - 140 -
Fair value gain from investment property (note 12) - 125 - 79
Income from administrative services to subsidiaries - - 12,098 -
Exceptional items (*) 3,675 1,735 - -
Other income 1,237 4,272 959 1,285
Other income total 9,508 15,237 16,651 10,463
Provisions -5,659 -1,101 219 506
Losses on disposal of property, plant and equipment (note 29) -2,166 -1,537 - -48
Fair value loss from investment property (note 12) -300 - -286 -
Staff leaving indemnities -1,245 -2,877 -1,296 -595
Restructuring cost (**) -5,068 -1,811 -3,504 -
Other expenses -1,636 -1,435 -1,591 -147
Other expenses total -16,074 -8,761 -6,458 -284

(*) Exceptional items are comprised mainly of insurance proceeds related to the collapse of a concrete silo roof at the Group's cement plant in Pennsuco, Florida USA in 2012.

(**) The restructuring costs include: a) provision of obsolete inventory amounting to €3,504 thousand of an abandoned plant in Greece and b) additional personal allowance amounting to €1,564 thousand from the voluntary retirement program of a Group subsidiary in Southeast Europe.

5. Expenses by nature

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Staff costs and related expenses (note 7) -260,497 -218,273 -50,510 -47,480
Raw materials and consumables used -316,546 -281,337 -48,876 -59,604
Energy cost -271,143 -210,660 -63,031 -61,827
Changes in inventory of finished goods and work in progress -144 10,500 -3,290 -984
Distribution expenses -144,214 -133,558 -43,288 -45,215
Third party fees -114,262 -97,106 -21,986 -19,668
Other expenses -68,024 -52,865 -8,637 -8,753
Total expenses by nature -1,174,830 -983,299 -239,618 -243,531
Included in:
Cost of sales -1,039,425 -863,906 -202,442 -208,026
Administrative expenses -114,169 -100,927 -37,048 -35,372
Selling and marketing expenses -21,236 -18,466 -128 -133
-1,174,830 -983,299 -239,618 -243,531

6. Finance expense

i) Finance income

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Interest income and related income 1,734 2,146 52 110
Other finance income 33 2 - -
Finance income 1,767
2,148
52 110

ii) Finance expenses

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Interest expense and related expenses -65,044 -62,139 -23,105 -40,364
Finance costs of actuarial studies (note 25) -554 -614 -238 -372
Accretion of discount of rehabilitation of quarries provision and
other provisions
-277 -1,018 -40 -478
Finance lease interest -226 -13 - -
Fair value losses on derivatives -1,259 -2,491 - -2,151
Finance expense -67,360 -66,275 -23,383 -43,365

iii) Gain from foreign exchange differences

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Net exchange gains 38,097 52,765 1,477 1,679
Fair value losses on derivatives -20,662 -21,709 - -
Gain from foreign exchange differences 17,435 31,056 1,477 1,679

7. Staff costs

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Wages and salaries 235,263 196,531 41,471 38,327
Social security costs 22,808 20,995 8,519 8,522
Share options granted to directors and employees (note 29) 1,010 747 876 631
Other post retirement and termination benefits - defined benefit
plans (note 4,6,25) 4,779 5,302 1,534 967
Total staff costs 263,860 223,575 52,400 48,447
Group employees are employed on a full-time basis. The Group Company
breakdown by geographical region is as follows: 2015 2014 2015 2014
Greece and Western Europe 1,148 1,150 829 813
North America 1,976 1,849 - -
South Eastern Europe 1,432 1,455 - -
Eastern Mediterranean 769 769 - -
5,325 5,223 829 813

8. Income tax expense

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Current tax 11,635 21,214 - -
Deferred tax (note 18) -5,678 -11,298 3,256 -9,610
Non deductible taxes and differences from tax audit 891 1,188 221 1,012
6,848 11,104 3,477 -8,598

The tax on Group profit differs from the amount that would arise had the Group used the nominal tax rate of the country in which the parent Company is based as follows:

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Profit before tax 42,144 46,821 63,619 83,126
Tax calculated at the statutory tax rate of 29% (2014: 26%) 12,222 12,173 18,450 21,613
Tax adjustments in respect of:
Income not subject to tax -3,372 -2,151 -15,983 -29,120
Expenses not deductible for tax purposes 8,958 4,295 766 126
Dividends tax - 5,898 - -
Provision for tax on tax exempt reserves under special laws (L.4172/2013) - -1,521 - -1,521
Other taxes 891 1,188 221 1,012
Re-measurement of deferred tax - tax rate change in Greece and Egypt -8,547 4,143 92 -
Effect of unrecognized deferred tax asset on tax carry forward losses 1,169 6,793 - -
Tax incentives -5,395 -2,088 - -301
Effect of different tax rates in other countries -3,427 -17,400 - -
Over-provision: prior years 4,984 -200 386 -407
Utilization of prior years unrecognized losses -68 -26 - -
Other -567 - -455 -
Effective tax charge 6,848 11,104 3,477 -8,598

In accordance with the paragraph 11 of article 70 of L.4172/2013, tax exempt reserve formed under the terms of L.2238/1994 can be either offset against tax losses at the rate of 26% or be distributed after paying 19% tax. On 31.1.2015, the Group and the Company offset tax exempt reserves against tax losses.

Deferred tax assets are recognized for the carryforwards of unused tax losses to the extent that it is probable that future taxable profit will be available against which the losses can be utilized. The determination of the amount of tax attribute carry-forward to recognize requires management judgment in assessing future profitability and recoverability (note 2.3).

On December 31, 2015, certain Group entities had tax carry forward losses of about €499.9 mil. (2014: €471.0 mil.). These entities have recognized a deferred tax asset amounting to €74.1 mil. (2014: €78.2 mil.), attributable to losses amounting to €206.1 mil. (2014: €219.3 mil.), as this deferred tax asset will be recoverable using the estimated future taxable income based on approved business plans. For the remaining tax carry forward losses, no deferred tax asset has been recognized, since they did not meet the recognition criteria according to IAS 12 (note 18).

Of the above tax carry forward losses, €159.8 mil. expire in the period 2016-2020, while €340.1 mil. expire at various dates up to the period 2029-2035.

On December 31, 2015, the Company had recognized deferred tax assets amounting to €13.9 mil. (2014: €16.4 mil.) on tax carry forward losses which met the recognition criteria. The tax losses of the Company can be utilized up to (and including) 2018.

9.Earnings per share

Basic earnings per share are calculated by dividing the net profit attributable to shareholders for the year by the weighted average number of ordinary and preference shares in issue during the year, excluding ordinary and preference shares purchased by the Company and held as treasury shares (note 22).

Group Company
(all amounts in Euro thousands unless otherwise stated) 2015 2014 2015 2014
Net profit for the year attributable to Titan S.A. shareholders 33,754 30,947 60,142 91,724
Weighted average number of ordinary shares in issue 74,238,724 74,087,882 74,238,724 74,087,882
Weighted average number of preferred shares in issue 7,563,041 7,563,041 7,563,041 7,563,041
Total weighted average number of shares in issue for basic earnings per
share
81,801,765 81,650,923 81,801,765 81,650,923
Basic earnings per ordinary and preferred share (in € ) 0.4126 0.3790 0.7352 1.1234

The diluted earnings per share are calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has one category of dilutive potential ordinary shares: share options. For the share options a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market price of the Company's shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options. The difference is added to the denominator as an issue of ordinary shares for no consideration. No adjustment is made to net profit (numerator).

Group Company
(all amounts in Euro thousands unless otherwise stated) 2015 2014 2015 2014
Net profit for the year attributable to Titan S.A. shareholders for
diluted earnings per share
33,754 30,947 60,142 91,724
Weighted average number of ordinary shares for diluted earnings per
share
74,238,724 74,087,882 74,238,724 74,087,882
Share options 473,682 501,563 473,682 501,563
Weighted average number of preferred shares in issue 7,563,041 7,563,041 7,563,041 7,563,041
Total weighted average number of shares in issue for diluted earnings
per share
82,275,447 82,152,486 82,275,447 82,152,486
Diluted earnings per ordinary and preferred share (in €) 0.4103 0.3767 0.7310 1.1165

10. Distribution of Contingency Reserves & Proposed Dividends

The Annual General Meeting of Shareholders of the Titan Cement Company S.A., which was held on 19th June 2015, approved:

a) the distribution of dividend from the profits of the financial year 2014 of a total amount of €12,695, amounting to €0.15 per share (ordinary or preference). This amount was proportionally increased by the dividend corresponding to the treasury stock held by the Company and became €0.15509 per share. From this amount the Company withheld on behalf of the Shareholder a 10% tax and, therefore, the net amount paid was €0.13958 per share,

b) the distribution of special reserves from previous financial years of a total amount of €12,695, amounting to €0.15 per share (ordinary or preference). This amount was proportionally increased by the relevant amount corresponding to treasury shares held by the Company and the net amount of €0.15509 per share.

The Board of Directors will propose to the Annual General Assembly of Shareholders, scheduled to take place on 17.6.2016, the distribution of dividend of a total amount of €25,390, i.e. €0.30 per share.

Pursuant to article 16.8(b) of L. 2190/1920, the final amounts to be distributed per share will be increased by the dividend, corresponding to the treasury shares held by the Company.

11. Property, plant and equipment

Group Quarries Land Buildings Plant &
equipment
Motor vehicles Office furniture,
fixtures and
equipment
Assets under
construction
Total
Year ended 31 December 2014
Opening balance 115,871 254,441 201,416 900,651 32,957 11,530 51,273 1,568,139
Additions 3,460 23 516 4,545 479 579 70,336 79,938
Acquisition of subsidiary (note 30) 3,834 929 379 32 12 3 5,189
Disposals (NBV) (note 29) - -757 -323 -255 -312 -32 -39 -1,718
Provisions for dismantling - - 37 98 - 2 - 137
Reclassification of assets from/to other PPE categories 102 1,707 3,792 19,113 6,795 1,041 -32,216 334
Transfers from inventories (note 19) - 1,167 - 565 - - 123 1,855
Transfers from investment properties (note 12) - 523 3,622 - - - 61 4,206
Reclassification of assets from/to intangible assets (note 13) 5 - - - - - -402 -397
Depreciation charge (note 29) -4,931 -2,697 -10,682 -64,380 -9,734 -2,875 - -95,299
Impairment of PPE (note 29) - - - -324 - - - -324
Exchange differences 12,509 24,829 10,661 57,302 1,778 226 5,808 113,113
Ending balance 127,016 283,070 209,968 917,694 31,995 10,483 94,947 1,675,173
Leased assets under finance leases
Opening balance - - - 693 305 - - 998
Additions - - - 334 1,203 - - 1,537
Reclassification of assets to other PPE categories - - - -334 - - - -334
Depreciation charge (note 29) - - - -113 -21 - - -134
Exchange differences - - - 23 19 - - 42
Ending balance - - - 603 1,506 - - 2,109
At 31 December 2014
Cost 179,803 310,467 387,085 1,680,205 199,526 55,517 94,947 2,907,550
Accumulated depreciation -37,017 -26,745 -177,117 -761,075 -166,025 -45,034 - -1,213,013
Accumulated losses of impairment of PPE -15,770 -652 - -833 - - - -17,255
Net book value 127,016 283,070 209,968 918,297 33,501 10,483 94,947 1,677,282

11. Property, plant and equipment (continued)

Group Quarries Land Buildings Plant &
equipment
Motor vehicles Office furniture,
fixtures and
equipment
Assets under
construction
Total
Year ended 31 December 2015
Opening balance 127,016 283,070 209,968 917,694 31,995 10,483 94,947 1,675,173
Additions 2,885 2,465 413 4,266 236 511 149,694 160,470
Disposals (NBV) (note 29) -661 -37 -298 -1,018 -511 -39 -602 -3,166
Reclassification of assets from/to other PPE categories 5,636 6,649 9,173 70,001 20,972 1,572 -111,774 2,229
Transfers from inventories (note 19) 3,164 - - 334 - - - 3,498
Transfers from other non-current assets 723 - - - - - - 723
Reclassification of assets from/to intangible assets (note 13) 107 - - - - - -68 39
Depreciation charge (note 29) -5,664 -3,335 -11,694 -71,741 -9,485 -2,325 - -104,244
Impairment of PPE (note 29) -185 -3,999 - -458 - - -8,413 -13,055
Exchange differences 12,040 16,609 5,531 32,854 2,005 159 5,432 74,630
Ending balance 145,061 301,422 213,093 951,932 45,212 10,361 129,216 1,796,297
Leased assets under finance leases
Opening balance - - - 603 1,506 - - 2,109
Additions - - - - 12,087 - - 12,087
Reclassification of assets to other PPE categories - - - -378 -1,851 - - -2,229
Depreciation charge (note 29) - - - -60 -867 - - -927
Exchange differences - - - 18 354 - - 372
Ending balance - - - 183 11,229 - - 11,412
At 31 December 2015
Cost 187,146 338,441 407,420 1,807,523 233,314 58,702 137,620 3,170,166
Accumulated depreciation -42,085 -33,023 -194,324 -854,587 -176,873 -48,341 - -1,349,233
Accumulated losses of impairment of PPE - -3,996 -3 -821 - - -8,404 -13,224
Net book value 145,061 301,422 213,093 952,115 56,441 10,361 129,216 1,807,709

Titan Cement Company S.A. Notes to the Financial Statements |7

11. Property, plant and equipment (continued)

Plant & Office furniture,
fixtures and
Assets under
Company Quarries Land Buildings equipment Motor vehicles equipment construction Total
Year ended 31 December 2014
Opening balance 920 3,525 51,610 158,897 850 7,404 9,126 232,332
Additions 16 - 388 1,536 70 540 10,922 13,472
Disposals (NBV) (note 29) - - - -185 -10 -36 - -231
Reclassification of assets from/to other PPE categories - - 514 2,464 - 245 -3,223 -
Reclassification of assets to intangible assets (note 13) - - - - - - -197 -197
Provisions for dismantling - - 37 98 - 2 - 137
Transfers from investment properties (note 12) - 523 3,621 - - - - 4,144
Depreciation charge (note 29) -63 - -2,237 -9,795 -160 -949 - -13,204
Reversal of impairment of PPE due to disposal (note 29) - - - 15 - - - 15
Ending balance 873 4,048 53,933 153,030 750 7,206 16,628 236,468
At 31 December 2014
Cost 1,656 4,048 96,710 317,004 3,489 26,348 16,628 465,883
Accumulated depreciation -783 - -42,777 -163,485 -2,739 -19,142 - -228,926
Accumulated losses of impairment of PPE - - - -489 - - - -489
Net book value 873 4,048 53,933 153,030 750 7,206 16,628 236,468
- - -
Year ended 31 December 2015
- - - - -
Opening balance 873 4,048 53,933 153,030 750 7,206 16,628 236,468
Additions - 241 250 2,767 97 393 12,795 16,543
Disposals/write-offs (NBV) (note 29) - - - -6 -36 -13 - -55
Reclassification of assets from/to other PPE categories - - 527 9,418 - - -9,945 -
Reclassification of assets to intangible assets (note 13) - - - - - - -55 -55
Depreciation charge (note 29) -63 - -2,270 -10,041 -155 -959 - -13,488
Reversal of impairment of PPE due to disposal (note 29) - - -3 3 - - - -
Ending balance 810 4,289 52,437 155,171 656 6,627 19,423 239,413
At 31 December 2015
Cost 1,656 4,289 97,487 328,898 3,419 26,693 19,423 481,865
Accumulated depreciation -846 - -45,047 -173,241 -2,763 -20,066 - -241,963
Accumulated losses of impairment of PPE - - -3 -486 - - - -489
Net book value 810 4,289 52,437 155,171 656 6,627 19,423 239,413

Disposal of assets

Group

During 2015, the Group received €1.1 mil. (2014: €0.2 mil.) from the disposal of tangible assets with total net book value of €3.2 mil. (2014: €1.8 mil.). Thus, the Group recognized €2.2 mil. losses (2014: €1.5 mil. losses) on disposal of PPE in the consolidated income statement (note 4).

Company

During 2015, the Company received €356 thousand (2014: €183 thousand) from the disposal of tangible assets with total net book value of €55 thousand (2014: €231 thousand). Thus, the Company recognized €124 thousand gains (2014: €48 thousand losses) on disposal of PPE in the income statement (note 4).

Impairment of property, plant and equipment:

The Group's subsidiary, Titan America LLC, decided to suspend development activities at the site of a proposed cement plant in Eastern North Carolina, USA (the "Castle Hayne" project). In reaching the decision to suspend development activities, the Company took into consideration a number of factors including:

• The evolution of supply and demand balances in the specific regional market to be served by the proposed plant;

• The relatively high cost of constructing and operating a new cement plant in the US environment (which have increased substantially in the past few years); and

• The increased risk profile of the coastal project in the context of excess low-cost global production capacity, low ocean freight rates, and a strengthening US Dollar.

As a result of its decision to suspend development activities at the Castle Hayne site, the Company recorded an impairment provision of €12.4 mil. to bring the asset to its recoverable amount of €1.0 mil. within the December 31, 2015 financial statements. The fair value was obtained through an independent valuator and represents a level 3 in the valuation hierarchy.

Pledge of assets

The assets of the Group and the Company have not been pledged.

12. Investment property

The Group's investment property does not include certain investment properties of the Company, which are leased to Group subsidiaries, and as a result, are included in property, plant and equipment in the Group statement of financial position. Investment property is measured at fair value by external, independent, certified valuators, members of the institute of the certified valuators and certified from the European Group of Valuers' Associations (TEGoVA) & RCIS (Royal Institution of Chartered Surveyors).

(all amounts in Euro thousands)

2015 2014 2015 2014
13,220 9,908 13,973
31 61 - -
-161 - -161 -
-300 125 -286 79
- 65 - -
- -4,206 - -4,144
715 - - -
-4 2 - -
9,548 9,267 9,461 9,908
9,267
Group Company
2015
-
2014 2015 2014
Rental income derived from investment property
Direct operating expenses (including repair and maintenance) that did not
212 200 57 52
generate rental income -24 -8 - -8
Net profit arising from investment properties carried at fair value 188 192 57 44

The fair value measurement of the investment property of the Company has been mainly conducted in accordance with the comparative method or the current market values of similar properties. The main factors that were taken into consideration, are the property location, the surface area, the local urban planning, the bordering road networks, the regional infrastructure, the property maintenance status and merchantability, the technical construction standards in the case of buildings and the impact of environmental issues if any.

13. Intangible assets and Goodwill

(all amounts in Euro thousands)

Group Initial
goodwill
Goodwill
impairment
Total
goodwill
Licences Development
expenditure
Trade
marks
Customer
relation
ships
Other
intangible
assets
Total
Year ended 31 December 2014
Opening balance 329,236 -6,226 323,010 21,331 340 25,462 33,191 6,502 409,836
Additions - - - - 32 - - 534 566
Disposals (NBV) - - - - - - - -70 -70
Additions due to acquisition of joint venture
(note 30)
3,138 - 3,138 - - - - - 3,138
Reclassification of assets to/from property,
plant & equipment (note 11)
- - - - -5 - - 402 397
Reversal of impairment (note 29) - - - - - - - 738 738
Amortization charge (note 29) - - - -449 - -1,591 -5,972 -2,441 -10,453
Exchange differences 31,360 - 31,360 781 1 2,636 2,500 378 37,656
Ending balance 363,734 -6,226 357,508 21,663 368 26,507 29,719 6,043 441,808
Year ended 31 December 2015
Opening balance 363,734 -6,226 357,508 21,663 368 26,507 29,719 6,043 441,808
Additions - - - 152 54 - - 682 888
Disposals (NBV) - - - - - - - -144 -144
Reclassification of assets to/from property,
plant & equipment (note 11)
- - - - -107 - - 68 -39
Impairment (note 29) - -3,990 -3,990 - - - - - -3,990
Amortization charge (note 29) - - - -561 - -1,741 -4,604 -1,867 -8,773
Exchange differences 22,888 - 22,888 185 -1 1,537 416 -191 24,834
Ending balance 386,622 -10,216 376,406 21,439 314 26,303 25,531 4,591 454,584

Other intangible assets include mainly computer software.

Company Trade
marks
Other
intangible
assets
Total
Year ended 31 December 2014
Opening balance 81 1,104 1,185
Additions - 335 335
Disposals (NBV) - -7 -7
Reclassification of assets from property,
plant & equipment (note 11)
- 197 197
Amortization charge (note 29) - -475 -475
Reversal of impairment (note 29) - 738 738
Ending balance 81 1,892 1,973
Year ended 31 December 2015
Opening balance 81 1,892 1,973
Additions - 101 101
Reclassification of assets from property,
plant & equipment (note 11)
- 55 55
Amortization charge (note 29) - -275 -275
Ending balance 81 1,773 1,854

13. Intangible assets and Goodwill (continued)

Impairment testing of goodwill

(all amounts in Euro thousands) Goodwill acquired through business combinations has been allocated to the following cash-generating units ("CGU's") per region of operation.

Carrying amount of goodwill (by geographical segment): 2015 2014
Greece and Western Europe 12,719 16,709
North America 200,896 180,162
South Eastern Europe 56,673 56,621
Eastern Mediterranean 106,118 104,016
376,406 357,508

The provision of goodwill impairment is charged to the income statement.

Key assumptions

The recoverable amount of all CGUs has been determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below.

The calculation of value-in-use for the Group's evaluated CGUs is most sensitive to the following assumptions:

  • Sales volumes;
  • Selling prices;
  • Gross margin;
  • Growth rate used to extrapolate cash flows beyond the specific projection period; and
  • Discount rates

Sales volumes:

Volume assumptions have been provided by local management and reflect its best estimates as derived from sales forecasts for the development of which a combination of factors have been taken into consideration: past performance, local market growth estimates, infrastructure projects in which the company will participate (public investments), etc. In the USA, sales volume growth rates are also based on published industry research and take into account demographic trends including population growth, household formation, and economic output (among other factors) in the states where the Group operates. In addition to demographic trends, long-term growth rates take into account cement/concrete intensity in construction which has historically varied from state to state based on building codes, availability of raw materials, and other factors.

Selling prices:

Price assumptions have been provided by local management and reflect its best estimates. Factors it had taken into consideration involve inflation, brand loyalty, growth rate of the regional economy, competition, production cost increases, etc. Τhe Group has assumed the following compound annual growth rates for sales for the five year period.

Sales Growth 2015 2014
Greece and Western Europe 5,5% - 27,6% 7,2% - 17,3%
North America 6,8% - 12,2% 11,8% - 15,0%
South Eastern Europe 6,5% - 8,9% 0,8% - 7,5%
Eastern Mediterranean 7.8% 11.0%

13. Intangible assets and Goodwill (continued)

Gross margin :

Illustrates all cost of goods sold related factors and incorporates among others, the evolution of energy cost. Τhe Group has assumed the following gross margin compound annual growth rates for the five year period:

Gross margin Growth 2015 2014
Greece and Western Europe 6,2% - 59,6% 8,3% - 18,7%
North America 12,3% - 18,8% 11,5% - 33,9%
South Eastern Europe 11,6% - 24,5% 1,8% - 16,3%
Eastern Mediterranean 28.2% 18.7%

Perpetual growth rates:

Factors that have been taken into consideration are estimates from the local Central Banks in the countries where the Group operates relating to the growth of the local economies over the next years along with the correlation that exists between the growth of the economy and that of the construction sector.

Perpetual Growth rates 2015 2014
Greece and Western Europe 3% 3%
North America 3% - 3,5% 3% - 4%
South Eastern Europe 2% 2%
Eastern Mediterranean 3.5% 3.5%

Discount rates:

Discount rates represent the current market assessment of the risks specific to each CGU, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Group and its operating segments and is derived from its weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Group's investors. The cost of debt is based on the interest bearing borrowings the Group is obliged to service. Country-specific risk is incorporated by applying individual beta factors. The beta factors are evaluated annually based on publicly available market data.

Discount rates 2015 2014
Greece and Western Europe 11.6% 12.4%
North America 7.9% 9.1%
South Eastern Europe 6,4%-15,4% 8,1% - 14,4%
Eastern Mediterranean 16.5% 18.7%

Sensitivity of recoverable amounts

As at December 31, 2015, the Group analyzed the sensitivities of the recoverable amounts to a reasonable possible change of a key assumption (notably to a change of one point in the discount rate or the perpetual growth rate). These analyses did not show a situation in which the carrying value of the main CGUs would exceed their recoverable amount, with the exception of the Greece CGU referred to below.

For the CGU Greece, a significant reduction in demand of construction materials due to the persisting economic recession led to the reduced revenues compared to the last year forecasts. As a result, the Group recorded an impairment loss of €4.0 mil. on the goodwill of the Greek CGU, based on the respective value in use as calculated using a discount rate of 11.6% (12.4% in 2014).

14. Principal subsidiaries, associates and joint ventures

2015 2014
Country of % of investment (*) % of investment (*)
Subsidiary, associate and joint venture name incorporation Nature of business Direct Indirect Direct Indirect
Full consolidation method
Τitan Cement Company S.A Greece Cement producer Parent company Parent company
Aeolian Maritime Company Greece Shipping 100.000 - 100.000 -
Aitolika Quarries S.A. Greece Quarries & aggregates - 63.723 - 63.723
Albacem S.A. Greece Trading company 99.996 0.004 99.996 0.004
Arktias S.A. Greece Quarries & aggregates - 100.000 - 100.000
Interbeton Construction Materials S.A. Greece Ready mix & aggregates 99.892 0.108 99.892 0.108
Intertitan Trading International S.A. Greece Trading company 99.995 0.005 99.995 0.005
KTIMET Quarries S.A. Greece Quarries & aggregates - 100.000 - 100.000
Porfirion S.A. Greece Production and trade of electricity - 100.000 - 100.000
Gournon Quarries S.A. Greece Quarries & aggregates 54.930 45.070 54.930 45.070
Quarries of Tagaradon Community S.A. Greece Quarries & aggregates - 79.928 - 79.928
Vahou Quarries S.A. Greece Quarries & aggregates - 100.000 - 100.000
Sigma Beton S.A. Greece Quarries & aggregates - 100.000 - 100.000
Titan Atlantic Cement Industrial and Commercial S.A. Greece Investment holding company 43.947 56.053 43.947 56.053
Titan Cement International Trading S.A. Greece Trading company 99.960 0.040 99.933 0.067
Transbeton - Domiki S.A. (1) Greece Ready mix - - - 100.000
Double W & Co OOD Bulgaria Port - 99.989 - 99.989
ECO Conception EOOD (2) Bulgaria Alternative fuels - - - 99.989
Granitoid AD Bulgaria Trading company - 99.760 - 99.760
Gravel & Sand PIT AD Bulgaria Quarries & aggregates - 99.989 - 99.989
Trojan Cem EOOD (8) Bulgaria Trading company - 83.599 - 83.599
Zlatna Panega Beton EOOD Bulgaria Ready mix - 99.989 - 99.989
Zlatna Panega Cement AD Bulgaria Cement producer - 99.989 - 99.989
Green Alternative Energy Assets EAD Bulgaria Alternative fuels - 100.000 - 100.000
Cementi ANTEA SRL (3) Italy Trading company - 80.000 - 60.000
Cementi Crotone S.R.L. Italy Import & distribution of Cement - 100.000 - 100.000
Fintitan SRL Italy Import & distribution of cement 100.000 - 100.000 -
Separation Technologies Canada Ltd Canada Processing of fly ash - 100.000 - 100.000
Aemos Cement Ltd Cyprus Investment holding company 100.000 - 100.000 -
Alvacim Ltd Cyprus Investment holding company - 100.000 - 100.000
Gaea Green Alternative Energy Assets Limited Cyprus Investment holding company - 100.000 - 100.000
Balkcem Ltd (8) Cyprus Investment holding company - 88.151 - 88.151
East Cement Trade Ltd Cyprus Investment holding company - 100.000 - 100.000
Feronia Holding Ltd Cyprus Investment holding company - 100.000 - 100.000
Iapetos Ltd Cyprus Investment holding company 100.000 - 100.000 -
KOCEM Limited Cyprus Investment holding company - 100.000 - 100.000
Rea Cement Ltd Cyprus Investment holding company - 100.000 - 100.000
Terret Enterprises Ltd (8) Cyprus Investment holding company - 88.151 - 88.151
Themis Holdings Ltd Cyprus Investment holding company - 100.000 - 100.000
Titan Cement Cyprus Limited (8) Cyprus Investment holding company - 88.151 - 88.151
Tithys Ltd (8) Cyprus Investment holding company - 88.151 - 88.151
Alexandria Portland Cement Co. S.A.E (7) Egypt Cement producer - 82.513 - 82.513
Beni Suef Cement Co.S.A.E. (7) Egypt Cement producer - 82.513 - 82.513
GAEA -Green Alternative Energy Assets (4, 7) Egypt Alternative fuels - 64.825 - -
Titan Beton & Aggregate Egypt LLC (7) Egypt Quarries & aggregates - 83.118 - 83.118
Sharr Beteiligungs GmbH (8) Germany Investment holding company - 88.151 - 88.151

14. Principal subsidiaries, associates and joint ventures (continued)

2015 2014
Country of % of investment (*) % of investment (*)
Subsidiary, associate and joint venture name incorporation Nature of business Direct Indirect Direct Indirect
Full consolidation method
Titan Cement U.K. Ltd U.K. Import & distribution of cement 100.000 - 100.000 -
Titan Global Finance PLC U.K. Financial services 100.000 - 100.000 -
Alexandria Development Co.Ltd (7) U.K. Investment holding company - 82.717 - 82.717
Titan Egyptian Inv. Ltd U.K. Investment holding company - 100.000 - 100.000
Carolinas Cement Company LLC U.S.A. Own/develop real estate - 100.000 - 100.000
Essex Cement Co. LLC U.S.A. Trading company - 100.000 - 100.000
Markfield America LLC U.S.A. Insurance company - 100.000 - 100.000
Massey Sand and Rock Co U.S.A. Quarries & aggregates - 100.000 - 100.000
Mechanicsville Concrete LLC U.S.A. Ready mix - 100.000 - 100.000
Metro Redi-Mix LLC U.S.A. Ready mix - 100.000 - 100.000
Miami Valley Ready Mix of Florida LLC U.S.A. Ready mix - 100.000 - 100.000
Pennsuco Cement Co. LLC U.S.A. Cement producer - 100.000 - 100.000
Roanoke Cement Co. LLC U.S.A. Cement producer - 100.000 - 100.000
S&W Ready Mix Concrete Co. Inc. U.S.A. Ready mix - 100.000 - 100.000
S&W Ready Mix LLC U.S.A. Ready mix - 100.000 - 100.000
Separation Technologies LLC U.S.A. Processing of fly ash
Standard Concrete LLC U.S.A. Trading company - 100.000 - 100.000
ST Mid-Atlantic LLC U.S.A. Processing of fly ash - 100.000 - 100.000
Sales of fly ash processing equipment - 100.000 - 100.000
ST Equipment & Technology LLC U.S.A. - 100.000 - 100.000
ST Equipment & Technology Trading Company LLC (4) U.S.A. Trading company - 100.000 - -
Summit Ready-Mix LLC
Titan Florida LLC
U.S.A.
U.S.A.
Ready mix
Cement producer
- 100.000 - 100.000
Titan Mid-Atlantic Aggregates LLC U.S.A. Quarries & aggregates - 100.000 - 100.000
Titan Virginia Ready Mix LLC U.S.A. Ready mix - 100.000 - 100.000
Τitan Αmerica LLC U.S.A. Investment holding company - 100.000 - 100.000
Trusa Realty LLC U.S.A. Real estate brokerage - 100.000 - 100.000
Tyson Material Transport LLC U.S.A. Transportation - 100.000 - 100.000
Cementara Kosjeric AD (8) Serbia Cement producer - 100.000 - 100.000
Stari Silo Company DOO (8) Serbia Trading company - 88.151 - 88.151
TCK Montenegro DOO (8) Montenegro Trading company - 88.151 - 88.151
GAEA Zelena Alternative Enerjia DOOEL F.Y.R.O.M - 88.151 - 88.151
Alternative fuels
Renting and leasing of machines, equipment
- 100.000 - 100.000
MILLCO-PCM DOOEL (4, 8) F.Y.R.O.M and material goods - 88.151 - -
Rudmak DOOEL (5, 8) F.Y.R.O.M Trading company - 88.151 - 83.599
Usje Cementarnica AD (8) F.Y.R.O.M Cement producer - 83.599 - 83.599
Vesa DOOL F.Y.R.O.M Trading company - 100.000 - 100.000
Cement Plus LTD (6, 8) Kosovo Trading company - 57.297 - 54.339
Kosovo Construction Materials L.L.C. (8) Kosovo Quarries & aggregates - 88.151 - 88.151
Sharrcem SH.P.K. (8) Kosovo Cement producer - 88.151 - 88.151
Alba Cemento Italia, SHPK (3) Albania Trading company - 80.000 - 60.000
Antea Cement SHA (3) Albania Cement producer - 80.000 - 60.000
GAEA Enerjia Alternative e Gjelber Sh.p.k. Albania Alternative fuels - 100.000 - 100.000
Dancem APS Denmark Trading company - 100.000 - 100.000
Aeas Netherlands B.V. (8) Holland Investment holding company - 88.151 - 88.151
Colombus Properties B.V. Holland Investment holding company 100.000 - 100.000 -
Holtitan B.V. (8) Holland Investment holding company - 88.151 - 88.151
Salentijn Properties1 B.V. Holland Investment holding company 100.000 - 100.000 -
Titan Cement Netherlands BV (8) Holland Investment holding company - 88.151 - 88.151

14. Principal subsidiaries, associates and joint ventures (continued)

2015 2014
Country of % of investment (*) % of investment (*)
Subsidiary, associate and joint venture name incorporation Nature of business Direct Indirect Direct Indirect

Equity consolidation method

Ecorecovery SA (4) Greece Engineering design services for solid
and liquid waste facilities
- 40.000 - -
Adocim Cimento Beton Sanayi ve Ticaret A.S. Turkey Cement producer - 50.000 - 50.000
ASH Venture LLC U.S.A. Processing of fly ash - 33.000 - 33.000
Karieri AD Bulgaria Quarries & aggregates - 48.711 - 48.711
Karierni Materiali AD Bulgaria Quarries & aggregates - 48.764 - 48.764
Vris OOD Bulgaria Quarries & aggregates - 48.764 - 48.764

(*) Percentage of investment represents both percentage of shareholding and percentage of control

Significant Group structure changes

Fiscal year 2015

(1) Absorbed subsidiary by Interbeton Construction Materials S.A.

(2) Liquidated subsidiary during the fiscal year 2015

3) Αlvacim Ltd, a Group subsidiary, purchased the 20% stake held by the European Bank for Reconstruction and Development (ΕBRD) in ANTEA CEMENT SHA (ΑΝΤΕΑ), a Titan Group subsidiary in Albania. As a result of this purchase, Titan Group holds 80% of ANTEA's share capital, whereas the remaining 20% is held by the International Finance Corporation (IFC) (note 27)

(4) Formed subsidiaries during the fiscal year 2015

(5) Increase by 4.553 percentage points of the Group share at the subsidiary Rudmak DOOEL due to Group restrusturing

(6) Increase by 2.958 percentage points of the Group share at the subsidiary Cement Plus Ltd due to Group restrusturing

(7) Subsidiaries participating in the consolidated financial statements of the Alexandria Development Co.Ltd (note 15.3)

(8) Subsidiaries participating in the consolidated financial statements of the Titan Cement Cyprus Limited (note 15.3)

The movement of the Company's participation in subsidiaries, is analyzed as follows:

(all amounts in Euro thousands) 2015 2014
Participation in subsidiaries on 1st January 845,807 1,243,829
Share capital (decrease)/increase in subsidiaries -1,180 -392,950
Provision for impairment of investments - -5,211
Other 135 139
Participation in subsidiaries on 31st December 844,762 845,807

15. Investments in associates, joint ventures and subsidiaries

15.1 Investment in associates

The Group financial statements incorporate the following Bulgarian-based companies with the equity method of consolidation: Karieri AD with ownership percentage 48.711% (31.12.2014: 48.711%), Karierni Materiali AD with ownership percentage 48.764% (31.12.2014: 48.764%), Vris OOD with ownership percentage 48.764% (31.12.2014: 48.764%).

All of the aforementioned companies operate in the aggregates business and are not listed on a public exchange market.

In 2014, the Group subsidiary in the USA, Separation Technologies LLC, and the US-corporation Charah, Inc. founded the company ASH Venture LLC, which beneficiates, markets and sells fly ash. Separation Technologies LLC participates in the share capital of ASH Venture LLC with an ownership percentage of 33% (2014: 33%). In the financial statements, the Group incorporates the aforementioned company with the equity method of consolidation.

Finally, the Group subsidiary in Greece, Interbeton Construction Materials S.A. and the Greek company Polyeco S.A. in 21.10.2015 founded the company Ecorecovery S.A. that processing, managing and trading solid waste for the production of alternative fuels. Interbeton Construction Materials S.A. participates in the share capital of Ecorecovery S.A. with an ownership percentage of 40% and the Group incorporates the company with the equity method of consolidation.

Based on their contribution in its profit before taxes, the Group decided that each one of the aforementioned associates is individually immaterial and thus it discloses in aggregate its interests in these associates as follows:

Summarized statement of financial position as at 31
December
Aggregation of associates
2015 2014
Non-current assets 47,699 49,004
Current assets 7,193 6,801
Total assets 54,892 55,805
Non-current liabilities 2,277 2,294
Current liabilities 12,519 15,039
Total liabilities 14,796 17,333
Equity 40,096 38,472
Group's carrying amount of the investment 8,515 7,981
Summarized income statement and statement of
comprehensive income for the year ended 31 December
Turnover 21,913 18,068
Profit after taxes 4,280 3,033
Other comprehensive loss for the year -38 -16
Total comprehensive income for the year net of tax 4,242 3,017
Reconciliation of summarized financial information
Carrying amount of the investment as at 1st of January 7,981 2,429
Profit for the year 1,768 1,228
Other comprehensive loss for the year -16 -8
Investment in associate 400 5,133
Dividends received -2,217 -1,404
Foreign exchange differences 599 603
Carrying amount of the investment as at 31st of December 8,515 7,981

15. Investments in associates, joint ventures and subsidiaries (continued)

15.2 Investment in joint ventures

On 31.12.2015, the Group incorporated in its financial statements with the equity method of consolidation the company Adocim Cimento Beton Sanayi ve Ticaret A.S., based in Turkey, which operates in the production of cement. The company is not listed on a public exchange market. The Group's ownership percentage in the company is 50.0% and it has joint control over the joint venture, therefore applies the equity method.

Until 30 September 2014, the Group incorporated in its financial statements with the equity method of consolidation the joint venture Transbeton-Domiki S.A.. On 1 October 2014, the Group acquired the remaining 50% of the Transbeton-Domiki S.A. and now it is incorporated in consolidated financial statements with the full method of consolidation (note 14).

The following table illustrates the summarized financial information of the Group's investment in the joint ventures Adocim Cimento Beton Sanayi ve Ticaret A.S. until 31 December 2015 and Transbeton-Domiki S.A. until 30 September 2014:

(all amounts in Euro thousands)

Summarized statement of financial position as at 31
December
Adocim Cimento Beton Sanayi
ve Ticaret A.S.
Transbeton
Domiki S.A.
2015 2014 2014
Non-current assets 69,034 78,573 -
Other current assets 41,814 41,633 -
Cash and cash equivalents 198 104 -
Total assets 111,046 120,310 -
Long-term borrowings 15,968 29,510 -
Deferred income tax liability 1,177 1,157 -
Other non-current liabilities 706 541 -
Short-term borrowings 29,301 25,062 -
Other current liabilities 12,347 15,065 -
Total liabilities 59,499 71,335 -
Equity 51,547 48,975 -
Summarized income statement and statement of
comprehensive income
1.1 - 31.12.2015 1.1 - 31.12.2014 1.1 - 30.9.2014
Turnover 87,629 82,725 1,647
Depreciation, amortization and impairments of assets -3,877 -3,228 -73
Finance income 4,135 6,673 1
Finance expense -13,706 -13,439 -177
Income tax -2,066 -2,346 -
Profit/(loss) after taxes 8,026 9,212 -1,846
Other comprehensive loss - - -
Total comprehensive income/(loss) for the year net of tax 8,026 9,212 -1,846
Reconciliation of summarized financial information 2015 2014 2014
Carrying amount of the investment as at 1st of January 78,552 70,540 4,283
Profit/(loss) for the year 4,013 4,606 -923
Change in consolidation method - - -3,360
Intra-group eliminations 34 34 -
Foreign exchange differences -8,606 3,372 -
Carrying amount of the investment as at 31st of December 73,993 78,552 -

On 31.12.2015, Adocim Cimento Beton Sanayi ve Ticaret A.S. had contingent liabilities in the form of bank guarantee letters amounting to €857 thousand (31.12.2014: €928 thousand).

15. Investments in associates, joint ventures and subsidiaries (continued)

15.3 Subsidiaries with significant percentage of non-controlling interests

On 31.12.2015, the non-controlling interest of the Group is €118,391 thousand (31.12.2014: €120,590 thousand), of which €91,710 thousand (31.12.2014: €93,801 thousand) is for Alexandria Development Co.Ltd and its subsidiaries and €26,625 thousand (31.12.2014: €26,098 thousand) is attributed to Titan Cement Cyprus Limited and it subsidiaries. The remaining non-controlling interest is not material.

The following table summarizes the financial information of subsidiaries, in which the non-controlling interests held significant portion (note 14).

Summarized statement of financial position as at 31 December Alexandria Development Co.Ltd
-Consolidated *
Titan Cement Cyprus Limited -
Consolidated *
(all amounts in Euro thousands) 2015 2014 2015 2014
Non-current assets 696,232 650,853 116,270 121,461
Current assets 119,614 112,473 62,934 61,526
Total assets 815,846 763,326 179,204 182,987
Non-current liabilities 227,419 190,614 4,146 3,774
Current liabilities 169,203 143,240 18,305 13,427
Total liabilities 396,622 333,854 22,451 17,201
Equity 419,224 429,472 156,753 165,786
Attributable to:
Equity holders of the parent 327,514 335,671 130,128 139,688
Non-controlling interests 91,710 93,801 26,625 26,098
Summarized income statement and statement of
comprehensive income for the year ended 31 December 2015 2014 2015 2014
(all amounts in Euro thousands)
Turnover 240,749 196,292 127,850 129,010
Profit/(loss) after taxes -16,673 6,538 21,663 31,209
Other comprehensive income for the year 5,951 31,938 -273 -2,166
Total comprehensive income for the year net of tax -10,722 38,476 21,390 29,043
Total comprehensive income attributable to non-controlling interests -1,893 8,165 4,031 4,227
Dividends paid to non-controlling interest 4,481 452 4,675 11,571
Summarized cash flow information for the year ended 31
December
2015 2014 2015 2014
(all amounts in Euro thousands)
Cash flows from operating activities 30,540 5,188 36,064 40,308
Cash flows from investing activities -53,768 -17,928 -5,762 -8,291
Cash flows from financing activities 23,513 17,837 -26,930 -81,206
Net increase/(decrease) in cash and cash equivalents 285 5,097 3,372 -49,189
Cash and cash equivalents at beginning of the year 17,159 9,702 26,139 75,387
Effects of exchange rate changes 352 2,360 44 -59
Cash and cash equivalents at end of the year 17,796 17,159 29,555 26,139

* Consolidated figures before elimination with the broader Group

3,319 1,469 2,281 172

16. Available-for-sale financial assets

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Opening balance 1,469 1,636 172 172
Additions 4,320 - 4,320 -
Disposals -2,350 - -2,350 -
Revaluations -79 -171 139 -
Exchange differences -41 4 - -
Ending balance 3,319 1,469 2,281 172
Analysis of available-for-sale financial assets:
Non-current portion 1,209 1,406 172 111
Current portion 2,110 63 2,109 61

During 2015 the Company acquired Banks' listed securities through the Greek Banks Recapitalization procedure of €4,320 thousands out of which €2,350 thousands have been disposed. Other available-for-sale financial assets include mainly non-listed shares and foreign property funds.

Available-for-sale investments are fair valued annually at the close of business on 31 December (note 34).

17. Other non-current assets

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Utility deposits 3,218 3,468 2,640 2,916
Excess benefit plan assets (note 25) 4,578 4,732 - -
Notes receivable- trade 630 652 - -
Other non-current assets 6,404 7,352 423 44
14,830 16,204 3,063 2,960

18. Deferred income taxes

Deferred income taxes are calculated in full on temporary differences under the liability method using the principal tax rates that apply to the countries in which the companies of the Group operate.

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Deferred tax assets to be recovered:
after more than 12 months -113,371 -106,333 -21,315 -23,873
within 12 months -30,432 -23,984 -8,637 -9,360
Deferred tax liabilities to be recovered:
after more than 12 months 302,524 308,042 34,578 33,854
within 12 months 4,259 3,843 2,892 2,744
Deferred tax liability (net) 162,980 181,568 7,518 3,365

18. Deferred income taxes (continued)

Deferred income taxes are calculated in full on temporary differences under the liability method using the principal tax rates that apply to the countries in which the companies of the Group operate.

(all amounts in Euro thousands)

The movement in the deferred income tax account after set-offs is as follows:

Group Company
2015 2014 2015 2014
Opening balance, net deferred liability 181,568 162,314 3,365 14,215
Income statement charge (note 8) -5,678 -11,298 3,166 -9,610
Tax charged to equity through other comprehensive income 1,386 -2,143 897 -1,240
Deferred tax adjustment due to change in income tax rates -21,960 14,623 90 -
Exchange differences 7,664 18,072 - -
Ending balance, net deferred liability 162,980 181,568 7,518 3,365

Analysis of deferred tax liabilities (before set - offs)

Group Company
2015 2014 2015 2014
Property, plant and equipment 247,646 257,888 35,055 32,421
Intangible assets 48,445 44,914 127 135
Provisions 3,204 3,339 1,800 1,800
Long term borrowings 9,180 5,011 31 -
Receivables and prepayments 2,134 1,575 - 72
Trade and other payables 110 185 416 54
Available for sale financial assets 40 - 40 -
310,759 312,912 37,469 34,482
Analysis of deferred tax assets (before set - offs)
Intangible assets -10,530 -12,698 - -
Investments & other non-current receivables -3,500 -3,551 -2,979 -2,671
Inventories -3,456 -1,001 -2,549 -168
Post-employment and termination benefits -10,168 -9,536 -3,794 -3,647
Receivables and prepayments -8,910 -8,333 -1,144 -769
Tax losses carried forward (note 8) -74,146 -78,211 -13,913 -16,362
Interest expense tax carried forward -13,347 -5,705 -2,094 -5,705
Lease obligation -4,940 - - -
Government grants and other non current liabilities -1,279 -49 -1,186 -1,114
Provisions and accrued expenses -17,493 -12,162 -2,292 -596
Trade and other payables -10 -98 - -85
-147,779 -131,344 -29,951 -31,117
Net deferred tax liability 162,980 181,568 7,518 3,365

18. Deferred income taxes (continued)

The movement in deferred tax assets and liabilities (prior to offsetting balances within the same tax jurisdiction) during the year is as follows:

(all amounts in Euro thousands)
Debit/(Credit) to equity Deferred tax adjustment due
Group January 1, 2015 Debit/(Credit) to net profit through statement OCI to change in income tax rates Exchange differences December 31, 2015
Deferred tax liabilities (before set - offs)
Property, plant and equipment 257,888 -2,294 253 -20,058 11,857 247,646
Intangible assets 44,914 1,680 - -1,902 3,753 48,445
Provisions 3,339 -349 - - 214 3,204
Receivables and prepayments 1,575 411 - - 148 2,134
Trade and other payables 185 -90 - - 15 110
Long term borrowings 5,011 3,595 574 9,180
Available for sale financial assets - - 40 - - 40
312,912 2,953 293 -21,960 16,561 310,759
Deferred tax assets (before set - offs)
Intangible assets -12,698 3,510 - - -1,342 -10,530
Investments & other non-current receivables -3,551 51 - - - -3,500
Inventories -1,001 -2,359 - - -96 -3,456
Post-employment and termination benefits -9,536 -1,196 1,093 - -529 -10,168
Receivables and prepayments -8,333 -110 - - -467 -8,910
Tax losses carried forward (note 8) -78,211 9,475 - - -5,410 -74,146
Interest expense tax carried forward -5,705 -7,642 - - - -13,347
Lease obligation - -4,946 - - 6 -4,940
Government grants and other non current liabilities -49 -1,252 - - 22 -1,279
Provisions and accrued expenses -12,162 -4,243 - - -1,088 -17,493
Trade and other payables -98 81 - - 7 -10
-131,344 -8,631 1,093 - -8,897 -147,779
Net deferred tax liability 181,568 -5,678 1,386 -21,960 7,664 162,980
Debit/(Credit) to equity
Company January 1, 2015 Debit/(Credit) to net profit through statement OCI December 31, 2015
Deferred tax liabilities (before set - offs)
Property, plant and equipment 32,421 2,381 253 35,055
Intangible assets 135 -8 - 127
Receivables and prepayments 72 -72 - -
Provisions 1,800 - - 1,800
Trade and other payables 54 362 - 416
Long term borrowings - 31 - 31
Available for sale financial assets - - 40 40
34,482 2,694 293 37,469
Deferred tax assets (before set - offs)
Investments & other non-current receivables -2,671 -308 - -2,979
Inventories -168 -2,381 - -2,549
Receivables and prepayments -769 -375 - -1,144
Government grants -1,114 -72 - -1,186
Provisions and accrued expenses -596 -1,696 - -2,292
Post-employment and termination benefits -3,647 -751 604 -3,794
Trade and other payables -85 85 - -
Interest expense tax carried forward -5,705 3,611 - -2,094
Tax losses carried forward (note 8) -16,362 2,449 - -13,913
-31,117 562 604 -29,951
Net deferred tax liability 3,365 3,256 897 7,518

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority.

18. Deferred income taxes (continued)

The movement in deferred tax assets and liabilities (prior to offsetting balances within the same tax jurisdiction) during the prior year is as follows:

(all amounts in Euro thousands)

Debit/(Credit) to equity Deferred tax adjustment
due to change in income
Group January 1, 2014 Debit/(Credit) to net profit through statement OCI tax rates Exchange differences December 31, 2014
Deferred tax liabilities (before set - offs)
Property, plant and equipment 223,635 -2,126 - 12,725 23,654 257,888
Intangible assets 38,473 5 - 1,898 4,538 44,914
Provisions 8,591 -5,280 - - 28 3,339
Long term borrowings - 4,942 - - 69 5,011
Receivables and prepayments 1,533 -71 - - 113 1,575
Trade and other payables 89 85 - - 11 185
272,321 -2,445 - 14,623 28,413 312,912
Deferred tax assets (before set - offs)
Intangible assets -13,813 2,652 - - -1,537 -12,698
Investments & other non-current receivables -2,286 -1,265 - - - -3,551
Inventories -1,269 401 - - -133 -1,001
Post-employment and termination benefits -7,205 -374 -1,531 - -426 -9,536
Receivables and prepayments -6,023 -1,933 - - -377 -8,333
Tax losses carried forward (note 8) -67,988 -3,783 - - -6,440 -78,211
Interest expense tax carried forward - -5,705 - - - -5,705
Long term borrowings -1,660 1,860 - - -200 -
Government grants and other non current liabilities -704 495 - - 160 -49
Provisions and accrued expenses -7,994 -2,815 - - -1,353 -12,162
Trade and other payables -36 -62 - - - -98
Financial instruments -1,029 1,676 -612 - -35 -
-110,007 -8,853 -2,143 - -10,341 -131,344
Net deferred tax liability 162,314 -11,298 -2,143 14,623 18,072 181,568
Company January 1, 2014 Debit/(Credit) to net profit Debit/(Credit) to equity
through statement OCI
December 31, 2014

Deferred tax liabilities (before set - offs)

Property, plant and equipment 34,528 -2,107 - 32,421
Intangible assets - 135 - 135
Receivables and prepayments 6 66 - 72
Provisions 6,253 -4,453 - 1,800
Trade and other payables 335 -281 - 54
41,122 -6,640 - 34,482
Deferred tax assets (before set - offs)
Intangible assets -14 14 - -
Investments & other non-current receivables -1,316 -1,355 - -2,671
Inventories -256 88 - -168
Receivables and prepayments -460 -309 - -769
Government grants -1,135 21 - -1,114
Provisions and accrued expenses -457 -139 - -596
Post-employment and termination benefits -2,933 -86 -628 -3,647
Financial instruments -736 1,348 -612 -
Trade and other payables - -85 - -85
Interest expense tax carried forward - -5,705 - -5,705
Tax losses carried forward (note 8) -19,600 3,238 - -16,362
-26,907 -2,970 -1,240 -31,117
Net deferred tax liability 14,215 -9,610 -1,240 3,365

19. Inventories

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Inventories
Raw materials-Maintenance stores 214,446 197,826 62,603 58,104
Provision for obsolete raw materials & maintenance stores -6,261 -2,986 -3,458 -646
Finished goods 86,047 85,293 12,229 15,372
Provision for obsolete finished goods -3,226 -2,504 -692 -
291,006 277,629 70,682 72,830
Transfer to investment property (note 12) -715 - - -
Transfer to/from property, plant and equipment (note 11) -3,498 -1,855 - -
286,793 275,774 70,682 72,830
Analysis of provision for impairment of inventories Group Company
2015 2014 2015 2014
Balance at 1 January 5,490 5,382 646 985
Charge for the year (note 4, 29) 3,943 281 3,504 -
Unused amounts reversed (note 29) - -43 - -
Utilized - -353 - -339
Reclassification from inventory accounts - 17 - -
Exchange differences 54 206 - -
Balance at 31 December 9,487 5,490 4,150 646

The Group and the Company have not pledged their inventories as collateral.

20. Receivables and prepayments

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Trade receivables 119,711 109,170 28,931 16,411
Cheques receivables 9,608 13,073 4,700 5,540
Trade receivables from related parties (note 32) - - 13,776 17,606
Allowance for doubtful debtors -27,363 -26,955 -2,351 -2,700
Total trade receivables 101,956 95,288 45,056 36,857
Creditors advances 7,535 8,074 647 465
Income tax receivables 2,389 2,008 285 158
V.A.T. and other tax receivables 11,308 6,550 6,078 2,202
Prepayments and other receivables 46,909 47,692 10,122 12,571
Other receivables from related parties (note 32) 35 18 8,591 2,682
Allowance for doubtful debtors -2,487 -2,181 -1,895 -1,766
Total other receivables 65,689 62,161 23,828 16,312
167,645 157,449 68,884 53,169

2,487 2,181 1,895 1,766

20. Receivables and prepayments (continued)

As at 31 December, the ageing analysis of trade receivables is as follows:

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Neither past due but not impaired 56,421 59,427 24,770 30,868
Past due nor impaired :
< 30 days 11,061 13,340 3,441 3,444
30-60 days 5,539 6,918 2,537 693
60-90 days 6,196 2,780 4,185 174
90-120 days 3,907 2,209 1,947 146
>120 days 18,832 10,614 8,176 1,532
101,956 95,288 45,056 36,857

Part of the aforementioned trade receivables is secured by guarantees/collaterals, amounting to €27,819 thousand (31.12.2014: €22,743 thousand) for the Group and €10,716 thousand (31.12.2014: €16,638 thousand) for the Company (note 31).

Trade receivables are non-interest bearing and are normally settled on 30-170 days for the Group and the Company.

Allowance for doubtful debtors analysis Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Balance at 1 January 29,136 30,421 4,466 7,165
Charge for the year (note 29) 3,062 3,652 276 403
Unused amounts reversed (note 29) -2,269 -2,834 -284 -843
Utilized -774 -4,047 -212 -2,259
Reclassification from other receivables/payables 71 96 - -
Additions due to acquisitions - 1,251 - -
Exchange differences 624 597 - -
Balance at 31 December 29,850 29,136 4,246 4,466

The individually impaired receivables mainly relate to wholesalers, which are in unexpectedly difficult economic situations. It was assessed that a portion of the receivables is expected to be recovered.

21. Cash and cash equivalents

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Cash at bank and in hand 428 86 281 7
Short-term bank deposits 121,305
142,860
8,345 16,964
121,733 142,946 8,626 16,971

Short-term bank deposits comprise primarily of current accounts and time deposits. The effective interest rates on these short-term bank deposits are based on floating rates and are negotiated on a case by case basis.

22. Share capital and premium

The total number of the authorized ordinary shares is: 2015 2014

(all amounts are shown in Euro thousands unless otherwise stated) Group & Company
The total number of the authorized ordinary shares is: 2015 2014
Ordinary shares of €4.00 each 77,063,568 77,063,568
Preference shares of €4.00 each 7,568,960 7,568,960
84,632,528 84,632,528

22. Share capital and premium (continued)

(all amounts are shown in Euro thousands unless otherwise stated)

Ordinary shares
Preference shares
Total
Shares issued and fully paid Number of
shares
€'000 Number of
shares
€'000 Share premium
€'000
Number of
shares
€'000
Balance at 1 January 2014 77,063,568 308,254 7,568,960 30,276 22,826 84,632,528 361,356
Balance at 31 December 2014 77,063,568 308,254 7,568,960 30,276 22,826 84,632,528 361,356
Balance at 31 December 2015 77,063,568 308,254 7,568,960 30,276 22,826 84,632,528 361,356
Ordinary shares Preference shares Total
Treasury shares Number of
shares
€'000 Number of
shares
€'000 Number of
shares
€'000
Balance at 1 January 2014 3,061,415 87,563 5,919 117 3,067,334 87,680
Treasury shares sold -141,503 -4,047 - - -141,503 -4,047
Balance at 31 December 2014 2,919,912 83,516 5,919 117 2,925,831 83,633
Treasury shares sold -159,319 -4,556 - - -159,319 -4,556
Balance at 31 December 2015 2,760,593 78,960 5,919 117 2,766,512 79,077

For the year 2015, the average stock price of Titan Cement Company S.A. ordinary shares was €20.40 (2014: €21.50) and the closing price of the ordinary shares at December 31, 2015 was €17.61 (2014: €19.17).

Share options

Share options are granted to members of senior management. Movements in the number of share options outstanding are as follows:

2010 scheme 2014 scheme
Balance at 1 January 2014 659,898 -
Granted - 250,190
Exercised -141,503 -
Non vested -118,977 -
Cancelled -14,209 -
Balance at 31 December 2014 385,209 250,190
Granted - 313,080
Exercised -159,319 -
Non vested -61,112 -
Cancelled -17,545 -4,750
Balance at 31 December 2015 147,233 558,520

Share options outstanding at the end of the year have the following terms:

2010 scheme 2014 scheme
Exercise price £ 4.00 £ 10.00
2014 2015 2014 2015
Expiration date
2015 25,629 - - -
2016 359,580 147,233 - -
2020 - - 250,190 247,540
2021 - - - 310,980
385,209 147,233 250,190 558,520

22. Share capital and premium (continued)

2010 Programme

On June 3, 2010 the Company approved the introduction of a new, three-year Stock Option Programme (2010 Programme). In the years 2010, 2011 and 2012, executive members of the Company's Board of Directors and senior executives of the Company and its affiliates in Greece and abroad were granted options, vesting of which is subject to the financial results of the Company and the performance of its ordinary share, to acquire up to 1,000,000 ordinary shares of the Company at a sale price equal to the share's nominal value, that is €4.00 per share.

Under this Programme, the options granted each year have a maturity period of three years and can be exercised within two years after the completion of the three year period. Each option must be exercised within the year following the one in which the final number of options that can be exercised is determined. If the deadline is exceeded, those particular options will irrevocably lapse. All vesting is conditional upon the employees' continued employment throughout the vesting period. The number of options that vest each year will be determined as follows:

1) One-third of options granted vest based on the financial results of the Company.

2) One-third of options granted vest based on Titan Cement's stock performance relative to three Athens Stock Exchange indices during the three year period.

3) One-third of options granted vest based on Titan Cement's stock performance relative to that of ten predefined international cement producing companies during the three year period.

The options granted under the 2010 Programme have been accounted for in terms of the requirements of IFRS 2 "Share based payments".

The number of Share Options that were granted during 2010, 2011 and 2012 was 267,720, 301,200 and 376,290 respectively.

The fair value of the options granted in 2010, determined using the Monte Carlo Simulation valuation model, was €5.36 per option. The significant inputs used in the application of the valuation model were share price at grant date of €15.90, standard deviation of share price of 39.42%, dividend yield of 2.68% and the rate of the three-year fixed EUR swap interest rate of 2.25%.

The fair value of the options granted in 2011 was €6.86 per option, determined using the Monte Carlo Simulation valuation model. The significant inputs used in the application of the valuation model were share price at grant date of €17.88, standard deviation of share price of 43.98%, dividend yield of 2.74% and the rate of the three-year fixed EUR swap interest rate of 1.89%.

The fair value of the options granted in 2012 was €3.05 per option, determined using the Binomial Method and the Monte Carlo Simulation valuation model. The significant inputs used in the aforementioned methodology were the share price at grant date of €14.72, the volatility of the share price estimated at 37.4%, the dividend yield of 0.7% and the yield of the 3 year EU Benchmark (Deutsche Bund) Government bond yield rate of 0.32%.

As of December 31th 2015, the number of the cancelled share options that were granted during 2010, 2011 and 2012 is 13,380, 17,910 and 16,710 respectively whereas the respective number of the share options that were not vested is 190,746, 118,977 and 61,112.

Out of the share options that were granted during 2010, 8,684 vested and cancelled. The remaining 54,910 share options, that represent 0.06% of Company's total shares of the paid up share capital, were exercised (2013: 50,282 / 2014: 4,628) by 75 Group executives, including 5 executive Board members of the Company. Total purchase cost of common treasury shares of the Company amounted €1,898 thousand (2013: €1,766 thousand / 2014: €132 thousand). The sale price of the Company's common treasury shares (over-the-counter-transaction) equaled to the nominal value of each Company share, i.e. € 4.00. The total share price amounted € 220 thousand. The loss caused by this transaction amounted to €1,678 thousand (2013: €1,565 thousands / 2014: €113 thousands) and were attributed to the equity holders of the Company.

Out of the share options that were granted during 2011, 15,494 vested and cancelled. The remaining 148,819 share options, that represent 0.17% of Company's total shares of the paid up share capital, were exercised (2014:136,875 / 2015:11,944) by 87 Group executives, including 6 executive Board members of the Company. Total purchase cost of common treasury shares of the Company amounted €4,257 thousand (2014: €3,915 thousand / 2015: €342 thousand). The sale price of the Company's common treasury shares (over-the-counter-transaction) equaled to the nominal value of each Company share, i.e. € 4.00. The total share price amounted € 595 thousand. The loss caused by this transaction amounted to €3,662 thousand (2014: €3,368 thousands / 2015: €294 thousands) and were attributed to the equity holders of the Company.

Out of the share options that were granted during 2012, 3,860 vested and cancelled and as of December 31th 2015, 147,233 share options remain unexercised. During 2015, the remaining 147,375 share options, that represent 0.17% of Company's total shares of the paid up share capital, were exercised by 69 Group executives, including 1 executive Board member of the Company. Total purchase cost of common treasury shares of the Company amounted €4,214 thousand. The sale price of the Company's common treasury shares (over-the-counter-transaction) equaled to the nominal value of each Company share, i.e. € 4.00. The total share price amounted €590 thousand. The loss caused by this transaction amounted to €3,624 thousand and were attributed to the equity holders of the Company.

22. Share capital and premium (continued)

2014 Programme

On 20 June 2014, the General Meeting approved the introduction of a new, three-year Stock Option Programme. According to this Programme, the Company's Board of Directors can grant option up to 1,000,000 ordinary shares of the Company at a sale price equal to €10.00 per share. Beneficiaries of the Stock Option Plan are the executive members of the Board of Directors of the Company, the managers and the employees who have the same rank in affiliated companies inside and outside Greece and finally a limited number of the other employees who stand out on a continuous basis for their good performance and have a high potential for advancement.

The vesting period of the stock options that were granted in 2014, 2015 and those that will be granted in 2016 shall be three years. Therefore, the relevant option rights shall become mature in December of 2016, 2017 and 2018 respectively, provided that the beneficiaries are still employees of the Group. After the completion of the three-year vesting period, the final option rights number, which the beneficiaries will be entitled to exercise, shall be determined by the Board of Directors, within the first four months of 2017, 2018 and 2019 respectively and shall depend:

a) By 50% on the average three year Return on Average Capital Employed (ROACE) compared to the target of each year period, as this will be determined by the Board of Directors before granting the relevant option rights.

b) By 50% on the overall performance of the Company's common share compared to the average overall performance of the shares of the ten predefined international cement producing companies.

The Beneficiaries shall be entitled to exercise their stock option rights, either in whole or in part, within the first five days of each month, paying the Company the relevant amounts until the expiration date of their stock options, i.e. until December of the third year after these stock options have been vested.

The options granted under the 2014 Programme have been accounted for in terms of the requirements of IFRS 2 "Share based payments".

The number of Share Options that were granted during 2014 and 2015 was 250,190 and 313,080 respectively.

The fair value of the options granted in 2014 was €7.39 per option, determined using the Binomial Method and the Monte Carlo Simulation valuation model. The significant inputs used in the aforementioned methodologies were the share price at grant date of €25.32, the employee forfeiture rate 9.2%, the volatility of the share price estimated at 47.2%, the dividend yield of 0.376% and the yield of the 3 year EU Benchmark (Deutsche Bund) Government bond yield rate of 0.083%.

The fair value of the options granted in 2015 was €4.14 per option, determined using the Binomial Method and the Monte Carlo Simulation valuation model. The significant inputs used in the aforementioned methodologies were the share price at grant date of €19.55, the employee forfeiture rate 9.2%, the volatility of the share price estimated at 40.61%, the dividend yield of 0.59% and the yield of the 1 year EURIOBOR rate of 0.166%.

As of 31th of December 2015 2,650 and 2,100 share options that were granted in 2014 and 2015 respectively have been cancelled.

23. Other reserves

(all amounts in Euro thousands)

Group Legal reserve Special reserve Contingency reserves Tax exempt reserves
under special laws
Revaluation reserve Actuarial differences
reserve
Currency translation
differences on
derivative hedging
position
Foreign currency
translation reserve
Total other reserves
Balance at 1 January 2014 90,826 -6,477 271,892 133,192 43,577 3,304 37,898 -280,913 293,299
Other comprehensive loss - - - - -116 -3,961 3,217 81,602 80,742
Contingency reserve distributed to shareholders
(note 10)
- - -8,463 - - - - - -8,463
Deferred tax adjustment due to change in income
tax rates on revaluation reserves
- - - - -12,067 - - - -12,067
Non-controlling interest's put option recognition &
transfer between reserves
- - - - -735 - - - -735
Partial disposal of subsidiary - - - - - - - - -
Transfer between reserves 1,761 600,000 3,096 -14,317 -4,155 - - 364 586,749
Balance at 31 December 2014 92,587 593,523 266,525 118,875 26,504 -657 41,115 -198,947 939,525
Other comprehensive income - - - - 1,096 1,658 - 43,962 46,716
Special reserve distributed to shareholders (note
10)
- -12,695 - - - - - - -12,695
Deferred tax adjustment due to change in income
tax rates on revaluation reserves
- - - - 20,793 - - - 20,793
Acquisition of non-controlling interest 20 52 - - 5,657 - - -1,307 4,422
Non-controlling interest's put option recognition &
transfer between reserves
- - - - 4,262 - - - 4,262
Transfer between reserves 505 -11,653 34,550 -1,312 -7,926 - - 117 14,281
Balance at 31 December 2015 93,112 569,227 301,075 117,563 50,386 1,001 41,115 -156,175 1,017,304
Company Legal reserve Special reserve Contingency reserves Tax exempt reserves
under special laws
Revaluation reserve Actuarial differences
reserve
Currency translation
differences on
derivative hedging
position
Total other reserves
Balance at 1 January 2014 68,650 16,245 259,998 116,581 2,662 1,621 45,501 511,258
Other comprehensive income - - - - - -1,786 2,846 1,060
Contingency reserve distributed to shareholders
(note 10)
- - -8,463 - - - - -8,463
Transfer between reserves - - 3,097 -10,716 - - - -7,619
Balance at 31 December 2014 68,650 16,245 254,632 105,865 2,662 -165 48,347 496,236
Other comprehensive income - - - - -154 997 - 843
Special reserve distributed to shareholders (note
10)
- -12,695 - - - - - -12,695
Transfer from retained earnings 1,302 - 33,727 198 - - - 35,227
Transfer from share options - - 823 - - - - 823

Transfer between reserves - - - -684 - - - -684 Balance at 31 December 2015 69,952 3,550 289,182 105,379 2,508 832 48,347 519,750

23. Other reserves (continued)

Certain Group companies are obliged according to the applicable commercial law to retain a percentage of their annual net profits as legal reserve. This reserve cannot be distributed during the operational life of the company.

The Contingency Reserves include, among others, reserves formed by the Company and certain Group subsidiaries by applying developmental laws. These reserves have exhausted their tax liability or have been permanently exempted from taxation so there is no additional tax charge for the Group and the Company from their distribution. Based on the decision of the General Meeting of June 19, 2015 the "special & contingency reserves" have increased by €33.7 mil. due to the transfer of the amount from "retained earnings".

The Tax Exempt Reserves under Special Laws, according to the Greek tax legislation, are exempt from income tax, provided that they are not distributed to the shareholders.

The distribution of the remaining aforementioned reserves can be carried out after the approval of the shareholders at the Annual General Meeting and the payment of the applicable tax. The Group has no intention to distribute the remaining amount of these reserves and consequently, has not calculated the income tax that would arise from such distribution.

In 2014, certain subsidiaries of the Group created a special reserve from prior years' retained earnings, which amounted to €600 million, in line with the relevant BoD resolutions. On 19 June 2015, the Annual General Meeting of Shareholders approved the distribution of €12,694,687 from the Special reserves (note 10).

The Revaluation Reserve includes: a) €48.2 mil. (2014: €33.8 mil.) as the fair value of tangible and intangible assets that the Group had in Egypt through its participation in the joint venture Lafarge-Titan Egyptian Investments Ltd, until it fully acquired the joint venture and b) the €1.4 mil. (2014: €8.3 mil.) debit difference between the fair value and the book value arising from the recognition of the put option of the non-controlling interests for the sale of ANTEA Cement SHA's shares.

The Actuarial Differences Reserve records the re-measurement gains and losses (actuarial gains and losses) arising from the actuarial studies performed by the Group's subsidiaries for various benefit, pension or other retirement schemes (note 25).

The Foreign Currency Translation Reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.

The Currency Translation Differences on Derivative Hedging Position Reserve illustrates the exchange differences arising from the translation into euro of loans in foreign currency, which have been designated as net investment hedges for certain Group subsidiaries abroad. It also illustrates the exchange differences arising from the valuation of financial instruments used as cash flow hedges for transactions in foreign currencies.

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Current
Bank borrowings 14,564 49,182 9,324 95
Bank borrowings in non euro currency 9,930 - - -
Finance lease liabilities 1,819 340 - -
26,313 49,522 9,324 95
Non-current
Bank borrowings 35,902 122,262 - -
Bank borrowings in non euro currency 170,443 - - -
Debentures 499,181 510,545 - -
Loans from related parties - - 300,712 336,694
Finance lease liabilities 11,240 1,388 - -
716,766 634,195 300,712 336,694
Total borrowings 743,079 683,717 310,036 336,789

Maturity of non-current borrowings:

24. Borrowings

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Between 1 and 2 years 247,434 20,916 94,388 -
Between 2 and 3 years 90,058 216,410 96,396 97,439
Between 3 and 4 years 296,067 44,097 109,928 117,318
Between 4 and 5 years 33,907 298,486 - 121,937
Over 5 years 38,060 52,898 - -
705,526 632,807 300,712 336,694

Maturity of non-current finance lease liabilities:

Group
(all amounts in Euro thousands) 2015 2014
Between 1 and 2 years - -
Between 2 and 3 years 235 -
Between 3 and 4 years - 357
Between 4 and 5 years - -
Over 5 years 11,005 1,031
11,240 1,388

The Group subsidiary Titan Global Finance PLC (TGF) entered into a €455 mil. multi-currency forward start revolving credit facility with a syndicate of Greek and international banks. The contract was signed on 30 January 2014, in London. The facility, which is guaranteed by Titan Cement S.A., matures in January 2018 and it was used for refinancing credit facilities and financing general corporate purposes. The revolving credit facility's amount was partially cancelled by TGF's request and was reduced to €300 mil. as of December 2014.

On July 10th 2014, TGF issued €300 mil. nominal value notes at par, of a 5-year tenure, with an annual coupon of 4.25%, guaranteed by Titan Cement S.A.. The notes are being traded on the regulated market of the Luxembourg Stock Exchange. The proceeds from the issue were used for refinancing existing credit facilities of Titan Group.

24. Borrowings (continued)

The effective interest rates that affect the Income Statement are as follows:

Group Company
2015 2014 2015 2014
Borrowings (USD) 3.82% 3.44% - -
Borrowings (JPY) 2.70% 2.70% - -
Borrowings (EGP) 11.97% 11.42% - -
Borrowings (BGN) 3.25% 3.56% - -
Borrowings (LEK) 4.78% 4.78% - -
Borrowings (CAD) - 3.22% - -
Borrowings (€) 6.09% 6.25% 5.31% 4.58%
Finance lease liabilities (USD) 3,08-3,55% 3,5-4,9% - -
Finance lease liabilities (CAD) 4.00% 4.00% - -

Bank borrowings in foreign currencies (including finance leases):

Group
Amounts in Euro equivalent
2015
2014
USD 208,111 200,245
JPY - 3,444
EGP 132,368 64,955
BGN 11,586 16,300
LEK 36,093 32,429
CAD 6 10
GBP 135 173

The Group has the following undrawn borrowing facilities:

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Floating rate:
- Expiring within one year 155,710 131,174 89,645 95,765
- Expiring beyond one year 316,730 353,633 87,190 329,223

The present value of the finance lease liabilities may be analyzed as follows:

Group
(all amounts in Euro thousands) 2015 2014
Finance lease liabilities - minimum lease payments
Not later than 1 year 2,184 352
Later than 1 year and not later than 5 years 12,368 1,555
14,552 1,907
Future finance charges on finance leases -1,493 -179
Present value of finance lease liabilities 13,059 1,728

During 2014, Group subsidiary in U.S.A., Titan America LLC, entered into two finance leases agreements for the purchase of motor vehicles in the principal amount of €1.6 mil. with terms between four and six years and an average interest rate of 3.76%. Moreover, during 2015, the same subsidiary entered into eight new finance leases for the same purpose. The total principal amount of these leases is €12.3 mil. with terms of six years and an average interest rate of 3.08%.

25. Retirement and termination benefit obligations

Greece

Greek labor legislation requires that the payment of retirement and termination indemnities is based on the number of years of service to the Company by the employees and on their final remuneration. The Group grants retirement indemnities which exceed the legal requirements. These retirement indemnities are unfunded and the liabilities arising from such obligations are actuarially valued by an independent firm of actuaries. The last actuarial valuation was undertaken in December 2015. The principal actuarial assumptions used were a discount rate of 1.9% (2014: 1.7%), future salary increases of 2% (2014: 3%) and no change in future pensions.

USA

The Group's U.S. subsidiaries operate defined benefit plans and other post-retirement benefit plans. The method of accounting for the latter, as well as the valuation assumptions and the frequency of valuations are similar to those used for defined benefit plans.

All of the Group's U.S. subsidiary's defined benefit pension plans and all but one of its other post-retirement plans have been frozen as to new participants and credited service. One post-retirement benefit plan exists (for certain active and former employees) whereby eligible retirees receive benefits consisting primarily of assistance with medical insurance costs between the dates of early retirement and Medicare eligibility.

On December 31, 2014 the plan assets of the Group's subsidiaries in the US have invested approximately 57% (2014: 56%) in equity instruments quated in US and international stoch markets and 43% (2014: 44%) in fixed investments (US and international bonds). The discount rate that has been adopted for the study of the pension plans of the Group's subsidiaries in the U.S. was 4% (2014: 3.75%).

Multi-employer plan

Certain employees participate in a union sponsored, defined benefit multi-employer pension plan. This plan is not administered by the Group's U.S. subsidiary and contributions are determined in accordance with the provisions of the negotiated labor contract. These contributions are affected by the funded status of the plan.

Excess benefit plan

This plan is intended to constitute an unfunded plan of deferred compensation for a selected group of highly compensated employees under the Employee Income Security Act of 1974 ("ERISA"). For this purpose the Group's U.S. subsidiary created an irrevocable trust to facilitate the payment of deferred compensation to participants under this plan. Under this plan the participants are eligible to defer from 0% to 20% of eligible compensation for the applicable plan year. In 2012, the Group's U.S. subsidiary suspended its matching amounts for all contributions. On December 31, 2015 and 2014, plan assets totaled €4,578 thousand and €4,732 thousands, respectively, and are classified as other non current assets in the accompanying consolidated statement of financial position (note 17). There were no costs for the plan for the year ended December 31, 2015 or 2014.

25. Retirement and termination benefit obligations (continued)

The amounts relating to defined benefit pension plans and other post retirement and termination benefits (defined benefit plans) recognized in the statement of comprehensive income in the account other expenses are as follows:

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Current service cost 3,436 2,049 843 395
Interest cost 996 937 238 372
Return on plan assets -442 -323 - -
3,990 2,663 1,081 767
Additional post retirement and termination benefits paid out,
not provided for 789 2,639 453 200
4,779 5,302 1,534 967
Amounts recognized in profit before interest, taxes,
depreciation, amortization and impairment 4,225 4,688 1,296 595
Amounts recognized in finance cost (note 6) 554 614 238 372
Amounts recognized in the income statement 4,779 5,302 1,534 967
Re-measurement (gains)/losses recognized immediately in οther
comprehensive income/(loss) -2,751 5,485 -1,601 2,414
Amount charged to statement of total comprehensive income 2,028 10,787 -67 3,381
Present value of the liability at the end of the period 46,428 46,581 13,087 14,029
Minus fair value of US plans assets -15,410 -14,854 - -
31,018 31,727 13,087 14,029
Liabilities' movement recognized in the statement of financial
position: Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Opening balance 31,727 23,657 14,029 11,279
Total expense 4,665 5,302 1,534 967
Re-measurement (gains)/losses recognized immediately in οther
comprehensive income/(loss) -2,751 5,485 -1,601 2,414
Other - 108 - -
Exchange differences 1,435 1,216 - -
Benefits paid during the year -4,058 -4,041 -875 -631
Ending balance 31,018 31,727 13,087 14,029
Group
Changes in the fair value of US plan assets
2015 2014
Fair value of plan assets at the beginning of the period 14,854 12,764
Expected return 81 315
Company contributions 596 724
Employee contributions - 159
Administrative expenses -191 -
Benefits paid -1,653 -854
Exchange difference 1,723 1,746

Fair value of plan assets at the end of the period 15,410 14,854

25. Retirement and termination benefit obligations (continued)

A quantitative sensitivity analysis for significant assumptions is shown below:

(all amounts in Euro thousands)

Assumptions Group Company
Year ended 31 December 2015 1.0% increase 1.0% decrease 1.0% increase 1.0% decrease
Impact on the net defined benefit obligation:
Discount rate -3,229 3,853 -1,334 1,588
Salary 1,873 -1,609 1,569 -1,345
Health care costs -152 179 - -
Impact on the current service costs:
Discount rate -12 29 -119 146
Salary 131 -107 150 -124
Healthcare costs 8 -7 - -
Assumptions Group Company
Year ended 31 December 2014 1.0% increase 1.0% decrease 1.0% increase 1.0% decrease
Impact on the net defined benefit obligation:
Discount rate -3,514 4,230 -1,540 1,849
Salary 2,178 -1,857 1,804 -1,536
Health care costs 200 168 - -
Impact on the current service costs:
Discount rate -70 82 -38 43
Salary 465 -144 46 -40
Healthcare costs 6 -5 - -

The sensitivity analyses above have been determined based on a method that extrapolates the impact on net defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

The following payments are expected payments to be made in the future years out of the defined benefit plan obligation:

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Not later than 1 years 2,992 2,994 1,516 1,739
Later than 1 years and not later than 5 years 7,037 5,855 1,585 1,035
Later than 5 years and not later than 10 years 11,217 10,556 4,178 3,891
Beyond 10 years 32,562 35,493 9,263 10,887
Total expected payments 53,808 54,898 16,542 17,552

The components of re-measurement (gains)/losses recognized immediately in the other comprehensive income for the years ended December 31, 2015 and 2014 are as follows:

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Due to experience -231 1,771 316 72
Due to assumptions (financial) -2,710 3,448 -1,917 2,342
Due to assumptions (demographic) -146 169 - -
Re-measurement (gains)/losses on DBO -3,087 5,388 -1,601 2,414
Re-measurement gains on plan assets 336 97 - -
Re-measurement (gains)/losses for the period -2,751 5,485 -1,601 2,414

26. Provisions

(all amounts in Euro thousands)

Group January 1, 2015 Charge for the
year
Unused amounts
reversed
Accretion of
discount
Utilized Exchange
differences
December 31,
2015
Provisions for restoration of quarries a 13,585 3,077 -1,340 274 -97 656 16,155
Provisions for other taxes b 802 2,153 - - -176 51 2,830
Litigation provisions c 917 497 - - -10 17 1,421
Other provisions d 4,754 7,066 -4,376 3 -68 31 7,410
20,058 12,793 -5,716 277 -351 755 27,816
January 1, 2014 Charge for the
year
Unused amounts
reversed
Accretion of
discount
Utilized Exchange
differences
December 31,
2014
Provisions for restoration of quarries a 10,722 2,051 -646 1,016 -162 604 13,585
Provisions for other taxes b 365 437 - - - - 802
Litigation provisions c 828 - - - - 89 917
Other provisions d 2,784 4,080 -2,137 2 -113 138 4,754
14,699 6,568 -2,783 1,018 -275 831 20,058
2015 2014
Non-current provisions 21,481 15,922
Current provisions 6,335 4,136
27,816 20,058
Company January 1, 2015 Charge for the
year
Unused amounts
reversed
Accretion of
discount
Utilized December 31,
2015
Provisions for restoration of quarries a 2,153 73 -87 37 -57 2,119
Other provisions d 3,750 4,800 -12 3 -2,756 5,785
5,903 4,873 -99 40 -2,813 7,904
January 1, 2014 Charge for the
year
Unused amounts
reversed
Accretion of
discount
Utilized December 31,
2014
Provisions for restoration of quarries a 1,754 206 -282 475 - 2,153
Other provisions d 1,771 3,506 -1,635 2 106 3,750
3,525 3,712 -1,917 477 106 5,903
2015 2014
Non-current provisions 2,221 2,293
Current provisions 5,683 3,610
7,904 5,903

a. This provision represents the present value of the estimated costs to rehabilitate quarry sites and other similar post-closure obligations. It is expected that this amount will be used over the next 2 to 50 years.

b. This provision relates to future obligations that may result from tax audits for other taxes. It is expected that this amount will be fully utilized in the next five years.

c. This provision has been established with respect to claims made against certain companies in the Group by third parties, mainly against the subsidiaries in Egypt. These claims concern labour compensations, labour cases for previous years' benefits and dues and claims for shares revaluation. It is expected that this amount will be utilized mainly in the next twelve months.

d. The other provisions are comprised of amounts relating to risks none of which are individually material to the Group. The Company's existing carrying amount includes, among others, the provision for staff bonuses. It is expected that the remaining amounts will be used over the next 2 to 20 years.

27. Other non-current liabilities

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Government grants 5,290 5,357 4,090 4,312
Other non-current liabilities (note 34) 1,513 24,696 146 134
6,803 30,053 4,236 4,446

The Group had granted to non controlling interest shareholders, European Bank for Reconstruction and Development (EBRD) and International Finance Corporation (IFC) the option to sell their shares in ANTEA Cement SHA (Antea) at predetermined conditions. On 31 December 2014 the put option's fair value recorded as a non-current liability of €23.8 mil..

On 5 February 2015, the Group acquired from EBRD the 20% of its share in Antea. Instead, IFC continues to have the aforementioned exercisable option to sell an equivalent percentage. On 31 December 2015, the option's fair value of €8.3 mil. is recognized as a current liability in the statement of financial position (note 31).

Analysis of Government grants:

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Non - current 5,290 5,357 4,090 4,312
5,290 5,357 4,090 4,312
Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Opening balance 5,357 5,064 4,312 4,696
Additions 227 891 - -
Grand settlements - -161 - -162
Amortization (note 29) -294 -437 -222 -222
Ending balance 5,290 5,357 4,090 4,312

Government grants are recognized at fair value when it is certain that the grant will be received and that the Group will comply with the terms and conditions of the grant.

Government grants relating to capital expenses are reflected as long-term liabilities and are amortized on a straight line basis, based on the estimated useful life of the asset for which the grant was received.

Government grants received in respect of expenses are reflected in the income statement when the related expense is incurred so that the expense is matched to the income received.

28. Trade and other payables

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Trade payables 151,077 118,989 23,223 27,941
Amounts due to related parties (note 32) 223 154 7,873 9,239
Other payables 17,747 17,200 4,228 4,547
Accrued expenses 59,745 42,986 4,719 3,956
Social security 3,350 3,430 2,378 2,455
Customer down payments/advances 16,947 25,799 670 2,080
Dividends payable 3,697 276 156 119
Government grants (note 27) - - - -
Other taxes 13,019 11,628 2,454 2,088
265,805 220,462 45,701 52,425

Other payables consists mainly of liabilities relating to transportation for cement and raw materials as well as employee benefit payables.

Terms and conditions of the above financial liabilities:

Trade payables are non-interest bearing and are normally settled in 10-180 days for the Group and the Company.

Other payables are non-interest bearing and have an average term of one month both for the Group and the Company.

29. Cash generated from operations

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Profit after taxes 35,296 35,717 60,142 91,724
Adjustments for:
Taxes (note 8) 6,848 11,104 3,477 -8,598
Depreciation (note 11) 105,171 95,433 13,488 13,204
Amortization of intangibles (note 13) 8,773 10,453 275 475
Amortization of government grants received (note 27) -294 -437 -222 -222
Impairment of assets (note 11,13) 17,045 -414 - -753
Net loss/(profit) on sale of property, plant and equipment (note 4) 2,166 1,537 -140 48
Provision for impairment of debtors charged to income statement (note 20) 793 818 -220 -440
Provision for inventory obsolescence (note 19) 3,943 238 3,504 -
Provision for restoration of quarries (note 26a) 2,011 2,421 -34 399
Provision for litigation (note 26c) 497 - - -
`
Other provisions
5,975 1,945 2,035 1,873
Provision for retirement and termination benefit obligations (note 25) 3,362 2,663 660 767
Decrease/(increase) of investment property (note 12) 300 -125 286 -79
Expenses from participations and investments 2,805 1,609 - 5,211
Income from participations and investments -1,565 - -134 -
Dividend income - - -55,112 -112,000
Finance income (note 6) -1,767 -2,148 -52 -110
Interest expense and related expenses (note 6) 65,270 62,152 23,105 40,364
Net losses on financial instruments (note 6) 21,921 24,200 - 2,151
Gain from foreign exchange differences (note 6) -38,097 -52,765 -628 -1,679
Share stock options (note 7) 1,010 747 876 631
Share in profit of associates and joint ventures (note 15) -5,815 -4,945 - -
Changes in working capital:
Increase in inventories -8,402 -40,540 -1,356 -3,136
(Increase)/decrease in trade and other receivables -5,876 17,894 -15,367 -7,121
(Increase)/decrease in operating long-term receivables and payables -3,128 -4,623 - 81
Increase/(decrease) in trade payables 19,399 11,344 -5,226 4,704
Cash generated from operations 237,641 174,278 29,357 27,494

In the cash flow statement, proceeds from the sale of property, plant and equipment and investment property

Net book amount 3,471 1,718 216 231
Net (loss)/profit on sale of property, plant and equipment (note 4) -2,166 -1,537 140 -48
Proceeds from the sale of property, plant and equipment 1,305 181 356 183

30. Business combinations and acquisition of non-controlling interest

Year ended 31 December 2014

On 1 October 2014, the Group acquired the remaining 50% of the joint venture Transbeton Domiki S.A.. Since the above acquisition date, this company consolidated in the Group's financial statements with the full consolidation method, instead of equity method.

The assets and liabilities of the above mentioned company, as they were preliminary recorded at the date of acquisition, are as follows:

(all amounts in Euro thousands) Fair value recognised
on acquisition
Carrying value on
acquisition
Assets
Non-current assets 5,192 5,192
Inventory 44 44
Receivables and prepayments 675 675
Deferred tax assets - 790
Cash and cash equivalents 109 109
Total assets 6,020 6,810
Liabilities
Long-term borrowings 87 87
Short-term borrowings 3,207 3,207
Deferred tax liabilities 97 97
Other liabilities and taxes payable 1,163 1,163
Total liabilities 4,554 4,554
Total identifiable net assets at fair value 1,466
Goodwill arising on acquisition (note 13) 3,138
Total consideration 4,604
Cash flow on acquisition:
Fair value of previously held stake in joint venture 1,754
Purchase consideration for remaining 50% stake settled in cash 2,850
Net cash acquired with the subsidiaries -109
2,741
Total consideration 4,495

31. Contingencies and commitments

Contingent liabilities Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Guarantees to third parties on behalf of subsidiaries - - 728,819 834,638
Bank guarantee letters 45,077 47,304 4,429 8,195
Other 5,831 7,746 - 2,698
50,908 55,050 733,248 845,531

Litigation matters in Egypt

A. Privatization cases

  1. In 2011, two former employees of Beni Suef Cement Company S.A.E. (BSCC) filed an action before the Administrative Court of Cairo, seeking the annulment of the privatization of BSCC which took place in 1999 through the sale of BSCC's shares to Financiere Lafarge after a public auction. Approximately 99.98% of the share capital of BSCC is held today by Titan Group through Alexandria Portland Cement Company S.A. (APCC), a company listed in the Egyptian Stock Exchange. On 15 February 2014, the Administrative Court of Cairo issued a first instance judgment whereby the claim of the plaintiffs for the annulment of the privatization of BSCC was entirely dismissed. The Court also ordered the re-employment of BSCC's ex-employees who had voluntarily terminated their employment taking advantage of voluntary early retirement programs. Both BSCC and the plaintiffs have appealed the above first instance court judgment and on 19 January 2015 the Supreme Administrative Court issued its judgment whereby the case was suspended until the issuance of a ruling by the Supreme Constitutional Court on lawsuit no. 120 of 36 JY challenging the constitutionality of Law no. 32/2014 (Appeal Procedures on State Contracts Law). The view of BSCC's lawyers is that the plaintiffs' action is devoid of any legal or factual ground.

  2. In June 2013, BSCC was notified of another action which had been filed before the Administrative Court of Cairo seeking as in the above case the annulment of the privatization of BSCC and the cancellation of the sale of the shares of BSCC to Financiere Lafarge. On 25 June 2015, the Administrative Court of Cairo issued a first instance judgment whereby the case was referred to the Investment Circuit no 7, where, until today, no hearing has been scheduled. The view of BSCC's lawyers is that the action is devoid of any legal or factual ground.

  3. In 2012, an former employee of Alexandria Portland Cement Company SA (APCC) filed an action before the Administrative Court of Alexandria against the President of the Republic of Egypt, the Prime Minister, the Minister of Investments, the Minister of Industry, the Governor of Alexandria, the Manager of the Mines and Salinas Project in Alexandria and the Manager of the Mines and Quarries Department in Alexandria seeking the annulment of privatization of APCC which took place in 1999 through the sale of APCC's shares to Blue Circle Cement Group. APCC was not among the defendants of the action. On 31 January 2015, the Administrative Court of Alexandria issued a judgment of first instance whereby the case was suspended until 28.11.2015 provided that until this date the Supreme Constitutional Court will have ruled on lawsuit no.79 of 37 JY challenging the constitutionality of law no. 32/2014 (Appeal Procedures on State Contracts Law). The view of ΑPCC's lawyers is that the action is devoid of any legal and factual ground.

  4. In May 2013, a new similar action was filed before the Administrative Court of Alexandria by 3 former employees of APCC against the Prime Minister, the Minister of Investment, and the Chairman of the Holding Company for Chemical Industries, the President of the Central Auditing Organization, the legal representative of Alexandria Portland Cement Company and the legal representative of Blue Circle seeking as in the above case the annulment of the sale of the shares of APCC to Blue Circle Cement Group. The case has been repeatedly postponed and to date no judgment has been handed down. The view of APCC's lawyers is that the action is devoid of any legal and factual ground.

31. Contingencies and Commitments (continued)

B. Other cases

  1. A resident of the vicinity of the plant of APCC has filed a claim before the Administrative Court of Alexandria against the Governor of Alexandria, the Head of El-Agamy District, the Minister of Trade and Industry, the Minister of Environment, the Head of Alexandria Environmental Affairs Agency, the Head of Industrial Development Authority and APCC. The plaintiff requested the Court to cancel the administrative decision which had granted the operation license of the fifth line of APCC, claiming that the license had been issued in violation of environmental legislation. On 25 May 2014, the Administrative Court of Alexandria court decided to refer this case to the Cairo Administrative Court due to lack of jurisdiction. The case has been repeatedly postponed and on 24.10.2015 it was referred to another Court division for deliberation. To date no judgment has been handed down. The view of APCC's Legal Department is that the plant's operating license has been issued lawfully and in full compliance with the relevant Egyptian laws and regulations.

  2. In 2007, BSCC obtained the license for the construction of a second production line in the company's plant in Beni Suef through a bidding process run by the Egyptian Trading and Industrial Authority. BSCC won the bid by offering the amount of EGP 134.5 million. The Egyptian Industrial Development Authority subsequently raised the value of the license to EGP 251 million. In October 2008 BSCC challenged the said decision of the Industrial Development Authority (IDA) before the Administrative Court and requested to obtain the construction license for the amount of EGP 500 only and alternatively for the amount of EGP 134.5 million which had been offered by BSCC in the bid. In August 2014 the case was referred to the State Commissioners and the Court is expected to schedule a hearing to notify the parties regarding State Commissioners' report. To date no judgment has been handed down. The view of BSCC's lawyers is that the outcome of the case will be positive.

  3. The Nile Agricultural Organization, a non-governmental organization, has raised a court case against BSCC, claiming that BSCC has illegally occupied the plaintiff's land and seeking compensation in the amount of EGP 300 million. BSCC's position is that the disputed land has been tens of years ago legally allocated to it by the New Urban Communities Agency and that since 1988 the company holds licenses for the exploitation of quarries located in the disputed area. The view of BSCC's lawyers is that the case has a high probability of being won.

Put option in Antea

The International Finance Corporation (IFC) is granted with the option to sell its shares in ANTEA Cement SHA (Antea) at predetermined conditions. On 31 December 2015, the option's fair value of €8.3 mil. is recognized as a current liability in the statement of financial position (note 27).

Contingent tax liability

The financial years, referred to in note 35, have not been audited by the tax authorities and therefore the tax obligations of the Company and its subsidiaries for those years have not yet been finalized.

Contingent assets Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Bank guarantee letters for securing trade receivables (note 20) 19,486 20,234 8,569 15,299
Other collaterals against trade receivables (note 20) 8,333 2,509 2,147 1,339
27,819 22,743 10,716 16,638
Collaterals against other receivables 2,348 3,945 2,348 3,945
30,167 26,688 13,064 20,583

31. Contingencies and Commitments (continued)

Commitments

Capital commitments

Capital commitments contracted for at the balance sheet date but not recognized in the financial statements are as follows:

2015
2014
2015
2014
(all amounts in Euro thousands)
Property, plant and equipment
1,616
153
-
Purchase commitments
Group
Energy supply contracts (Gas, electricity, etc.)
2015
2014
(all amounts in Euro thousands)
Not later than 1 years
81,481
79,188
Later than 1 years and not later than 5 years
402,808
395,940
Beyond 5 years
368,486
441,392
852,774
916,519
Group Company
-

The Group's subsidiaries in Egypt have agreements requiring the purchase of certain minimum quantities of gas for the subsequent years.

Also, the Group's US subsidiaries have entered a contract to purchase raw materials and manufacturing supplies as part of their on-going operations in Florida. This includes a contract to buy construction aggregates through a multi-year agreement at prevailing market prices.

Operating lease commitments - where a Group company is the lessee

The Group leases motor vehicles, properties and other equipment under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights.

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Not later than 1 years 11,113 10,858 594 678
Later than 1 years and not later than 5 years 27,959 26,437 1,111 1,102
Beyond 5 years 7,642 8,897 - -
46,714 46,192 1,705 1,780

32. Related party transactions

Titan Cement Company S.A. is the parent company of the Group. The Company and its subsidiaries enter into various transactions with related parties are during the year. The sales to and purchases from related parties are made at normal market prices. Outstanding balances at yearend are unsecured and settlement occurs in cash. Intra-group transactions are eliminated on consolidation. Related party transactions exclusively reflect transactions between the companies of the Group.

The following is a summary of transactions that were carried out with related parties during the year:

Year ended 31 December 2015

(all amounts in Euro thousands)
Group Sales to
related parties
Purchases
from related
parties
Amounts owed
by related
parties
Amounts owed
to related
parties
Other related parties - 1,537 - 223
Executives and members of the Board - - 35 -
- 1,537 35 223

32. Related party transactions (continued)

Year ended 31 December 2015

(all amounts in Euro thousands)

Company Sales to related
parties
Purchases from
related parties
Amounts owed
by related parties
Amounts owed to
related parties
Aeolian Maritime Company 1 - - 257
Albacem S.A. 2 - - 350
Interbeton Construction Materials S.A. 20,222 5,025 7,050 755
Intertitan Trading International S.A. 5,550 - 750 -
Quarries Gournon S.A. 3 - 1 -
Adocim Cimento Beton Sanayi ve Ticaret A.S. 38 - - -
Titan Cement International Trading S.A. 2 - - -
Fintitan S.R.L. 8,425 - 3,681 -
Cementi Crotone S.R.L. 420 - - -
Titan Cement U.K. Ltd 18,015 53 3 -
Usje Cementarnica AD 7,794 - 852 -
Beni Suef Cement Co.S.A.E. 1,869 - 2,758 -
Alexandria Portland Cement Co. S.A.E 1,036 10 1,191 -
Cementara Kosjeric DOO 973 4 312 -
Zlatna Panega Cement AD 1,110 - 1,074 -
Τitan Αmerica LLC 4,621 7 1,506 -
Essex Cement Co. LLC 37,240 57 2,341 -
KTIMET Quarries S.A. - 2 - 2
Antea Cement SHA 1,550 3 284 -
Titan Global Finance PLC - 22,301 - 307,105
SharrCem Sh.P.K 1,327 - 403 -
Other subsidiaries 34 - 126 -
Other related parties - 1,537 - 223
Executives and members of the Board - - 35 -
110,232 28,999 22,367 308,692

Year ended 31 December 2014

Group Sales to related
parties
Purchases from
related parties
Amounts owed
by related parties
Amounts owed to
related parties
Other related parties - 1,069 - 154
Executives and members of the Board - - 18 -
- 1,069 18 154

32. Related party transactions (continued)

Year ended 31 December 2014

(all amounts in Euro thousands)

Sales to related Purchases from Amounts owed Amounts owed
Company parties related parties by related parties to related parties
Aeolian Maritime Company 2 - - 262
Albacem S.A. 2 - - -
Interbeton Construction Materials S.A. 26,719 5,561 10,320 1,341
Intertitan Trading International S.A. 6,441 - 240 -
Transbeton - Domiki S.A. 908 - 1,216 -
Quarries Gournon S.A. 2 - - -
Adocim Cimento Beton Sanayi ve Ticaret A.S. 2,313 - - -
Titan Cement International Trading S.A. 2 - - -
Fintitan S.R.L. 7,407 1 4,076 -
Cementi Crotone S.R.L. 308 - - -
Titan Cement U.K. Ltd 15,072 34 - -
Usje Cementarnica AD 8,089 - 479 -
Beni Suef Cement Co.S.A.E. 4,564 - 1,979 -
Alexandria Portland Cement Co. S.A.E 421 11 165 -
Cementara Kosjeric DOO 93 - 31 -
Zlatna Panega Cement AD 4 15 4 -
Τitan Αmerica LLC 30 1 - 168
Essex Cement Co. LLC 18,677 63 1,491 -
KTIMET Quarries S.A. - 5 - 3
Antea Cement SHA 1,125 23 254 -
Titan Global Finance PLC - 37,475 - 344,214
Quarries of Tanagra S.A. 4 - - -
SharrCem Sh.P.K 26 7 10 -
Other subsidiaries 18 - 5 -
Other related parties - 1,069 - 154
Executives and members of the Board - - 18 -
92,227 44,265 20,288 346,142

Key management compensation

Group Company
2015 2014 2015 2014
Salaries and other short-term employee benefits 5,826 4,948 5,826 4,948

Key management includes executive committee members.

Directors

Executive members on the Board of Directors 7 7 Non-executive members on the Board of Directors 8 8

2015 2014

33. Financial risk management objectives and policies

Financial Risk Factors

The Group, by nature of its business and geographical positioning, is exposed to financial risks. The Group's overall financial risk is managed by Group Finance and Treasury units, aiming to minimize the potential unfavorable impact arising from the markets' fluctuations on Group's financial performance. The Group does not engage in speculative transactions or transactions which are not related to its commercial, investing or borrowing activities.

a) Liquidity risk

The Group, in addition to its operating cash flows, maintains sufficient cash and other liquid assets, as well as extensive credit lines with several international banks to ensure the fulfilment of its financial obligations. Group Treasury controls Group funding as well as the management of liquid assets.

(all amounts in Euro thousands) The table below summarizes the maturity profile of financial liabilities at 31 December 2015 & 2014 based on contractual undiscounted payments.

Group Less than 1 month 1 to 6 months 6 to 12 months 1 to 5 years >5years Total
Year ended 31 December 2015
Borrowings
Derivative financial instruments (non
29,097 5,545 22,100 794,435 20,182 871,359
current) - - - 924 - 924
Other non-current liabilities - - - 1,513 - 1,513
Trade and other payables 163,497 63,844 4,944 - - 232,285
192,594 69,389 27,044 796,872 20,182 1,106,081
Year ended 31 December 2014
Borrowings
Derivative financial instruments (non
26,419 28,465 25,464 750,807 62,083 893,239
current) - - - 2,438 - 2,438
Other non-current liabilities
Derivative financial instruments
- - - 24,696 - 24,696
(current) - - 127 - - 127
Trade and other payables 142,100 45,004 1,982 - - 189,086
168,519 73,469 27,573 777,941 62,083 1,109,586
Company Less than 1 month 1 to 6 months 6 to 12 months 1 to 5 years >5years Total
Year ended 31 December 2015
Borrowings 16,267 1,472 8,355 325,945 - 352,039
Other non-current liabilities - 9 8 129 - 146
Trade and other payables 28,264 6,139 156 - - 34,559
44,531 7,620 8,519 326,074 - 386,744
82% 18%
Year ended 31 December 2014
0%
Borrowings 7,493 1,767 9,165 384,547 - 402,972
Other non-current liabilities - - - 134 - 134
Trade and other payables 30,973 13,579 3,308 - - 47,860
38,466 15,346 12,473 384,681 - 450,966

65% 28% 7% Borrowings include the floating and fixed rate outstanding principal at year-end plus accrued interest up to maturity.

The amounts that are described as "less than 1 month" are on demand short-term uncommitted facilities and interest accruals.

b) Market risk

Market risk comprises three types of risk: currency risk, price risk, such as commodity risk and interest rate risk.

Group exposure to exchange rate (FX) risk derives from existing or expected cash flows denominated in currencies other than the Euro (imports / exports) and from international investments.

FX risks are managed using natural hedges, FX derivatives / swaps and FX forwards. Borrowings denominated in the same currency as the assets that are being financed and these create a natural hedge for investments in foreign subsidiaries exposed to FX conversion risk.

Part of the financing of Group activities in the USA, Egypt and Albania, is in different currencies (Euro) than their functional ones. Their refinancing in local currencies is examined at regular intervals.

33. Financial risk management objectives and policies (continued)

Ιn the first semester of 2012, the Group's subsidiary Titan America LLC had entered into a two and a half year loan (up to December 2014) of €53.5 mil. from Titan Global Finance, while at the same time, it also entered into currency forward contracts with two financial institutions maturing in December 2014, hedging the foreign currency risk (€/\$) associated with the borrowing. At the inception of the hedge transaction, Titan America LLC formally designated the hedge as a cash flow hedge, documented the risk management objective for undertaking the hedge and the hedge was assessed to be highly effective.

On 11 July 2014, Titan America LLC proceeded to an early repayment of the above mentioned loan to Titan Global Finance. Consequently, the aforementioned hedging relationship was terminated resulting in the reclassification adjustment of €370 thousand loss from the other comprehensive income to the income statement.

Simultaneously, the Group closed the open positions of the above currency forward contracts by entering into new reverse positions of currency forward contracts that were initially recognized at fair value on the effective date of the contract, and are being subsequently re-measured at fair value. The valuations of the above positions resulted in an €6 thousand net gain that was included in the account "gain from foreign exchange differences" in the income statement for the year ended 31 December 2014.

TALLC in July 2014 borrowed €177 mil. with five year maturity and fixed interest rate from Titan Global Finance (use of proceeds of the €300 million bond) and entered into cross currency interest rate swap agreements (CCS) with two financial institutions, essentially converting the fixed rate Euro-loan to a US dollar-floating rate based on 6-month LIBOR loan. The transactions were undertaken in order to hedge the foreign currency risk (€/\$) on both the notional amount and the interest payments associated with the Euro denominated borrowing. The terms of the CCS perfectly match the terms of the loan. As at 31 December 2015, the mark to market valuation of the CCS was recorded as a liability of €764 thousand (31.12.2014: €2,438 thousand) in the statement of financial position.

TALLC in August 2015 entered into oil swap agreement, essentially converting the floating prices of the US oil to fixed oil prices on a monthly basis and up to December 2016. This transaction was undertaken in order to hedge the flactuation of oil prices on US diesel payments. As at 31 December 2015, the mark to market valuation of the oil swap was recorded as a liability of €160 thousand in the statement of financial position.

In Egypt, the Yen financing had been hedged up to its maturity, in December 2015, via FX forwards in US dollar/ Yen, that were executed through the Group's subsidiary Iapetos Ltd. In 2015, this transaction has been resulted in a loss of €115 thousand (2014: €173 thousand), which is recorded in the account "gain from foreign exchange differences".

Sensitivity analysis in foreign exchange rate changes

The following table demonstrates the sensitivity of the Group's profit before tax and the Group's equity to reasonable changes in the USΑ Dollar, Serbian Dinar, Egyptian Pound, British Pound, Turkish Lira and Albanian Lek floating exchange rates, with all other variables held constant:

Increase/
Decrease of
(all amounts in Euro thousands) Foreign Foreign Currency Effect on Profit
Currency vs. € Before Tax Effect on equity
USD 5% 1,084 24,633
-5% -981 -22,287
5% 485 1,558
RSD -5% -439 -1,410
5% -1,609 37,263
EGP -5% 1,456 -33,715
Year ended 31 December 2015 5% 97 475
GBP -5% -88 -430
5%
TRY
274 1,357
-5% -248 -1,227
5% 166 2,306
ALL -5% -151 -2,086
USD 5% -775 21,072
-5% 701 -19,065
5% 559 1,614
RSD -5% -506 -1,460
5% 1,366 35,015
EGP -5% -1,236 -31,680
Year ended 31 December 2014 5% 40 375
GBP -5% -36 -339
5% 309 1,289
TRY -5% -280 -1,166
5% -13 2,127
ALL -5% 12 -1,924

Note: Calculation of "Effect on Profit before tax" is based on year average FX rates; calculation of "Effect on Equity" is based on year end FX rate changes.

33. Financial risk management objectives and policies (continued)

The ratio of fixed to floating rates of the Group's net borrowings is determined by market conditions, Group strategy and financing requirements. Occasionally interest rate derivatives may be used to mitigate the relevant risk and balance the mix of fixed and floating rates of the Group's borrowings.

In 2011, Titan Cement Company S.A. borrowed €100 mil. under floating interest rate (one month Euribor) from Titan Global Finance and subsequently entered into floating to fixed interest rate swaps for the same amount at terms matching the terms of the loan. The swap matured in December 2014. At the inception of the hedge transaction, Titan Cement Company S.A. formally designated the hedge as a cash flow hedge, documented the risk management objective and the hedge was assessed to be highly effective. The derivative financial instrument was initially recognized at fair value on the effective date of the contract, and subsequently re-measured at fair value until its maturity. After the expiration of the cash flow hedge, a €2,234 thousand loss was reclassified from the other comprehensive income into finance expenses of the income statement for the period ended on 31 December 2014.

Titan Cement Company S.A. had an interest rate swap amounting to €30 mil. since 2009, matured on November 2014, which was recognized as a fair value hedge. The valuation's result of €11 thousand of the abovementioned derivative was recorded as finance expense in the income statement for the year ended on 31 December 2014.

Αfter the issuance of €300 million notes, which refinanced existing floating rate credit facilities and entering into the cross currency swaps, as of 31 December 2015 the ratio of fixed to floating rates of Group's debt results at 43:57.

The impact of interest rate volatility is limited in the income statement and cash flow from operating activities of the Group, as shown in the sensitivity analysis table below:

Sensitivity analysis of Group's borrowings due to interest rate changes

(all amounts in Euro thousands) Interest rate
variation
(+/-)
Effect on profit
before tax
(-/+)
EUR 1.0% 512
USD 1.0% 2,412
Year ended 31 December 2015 BGN 1.0% 117
EGP 1.0% 1,342
ALL 1.0% 366
EUR 1.0% 489
USD 1.0% 2,223
Year ended 31 December 2014 Restated BGN 1.0% 165
EGP 1.0% 659
ALL 1.0% 329

Note: Table above excludes the positive impact of interest received from deposits.

Interest rate trends and the duration of the Group's financing needs are monitored on a forward looking basis. Consequently, decisions about the duration and the mix between fixed and floating rate debt are taken on an ad-hoc basis.

c) Credit Risk

The Group has no significant concentrations of credit risk. Trade accounts receivable consist mainly of a large, widespread customer base. All Group companies monitor the financial position of their debtors on an on-going basis.

When considered necessary, additional collateral is requested to secure credit. Provisions for impairment losses are made for special credit risks. As at 31st December 2015, there are no outstanding doubtful significant credit risks which are not already covered by a provision for doubtful receivables.

Credit risk arising from financial institutions' inability to meet their obligations towards the Group deriving from placements, investments and derivatives, is mitigated by pre-set limits on the degree of exposure to each individual financial institution. These pre-set limits are set in accordance to the Group Treasury policies. At December 31st 2015, the Group's majority financial assets and derivative financial instruments were held with investment grade financial institutions.

As at 31 December 2015, the Group's cash and cash equivalents were held at time deposits and current accounts. Note 21 includes an analysis on cash & cash equivalents.

33. Financial risk management objectives and policies (continued)

d) Capital management

The primary objective of the Group's capital management is to ensure that it maintains healthy capital ratios in order to support its operations and maximize shareholder value.

The Group manages its capital structure conservatively with the leverage ratio, as this is shown from the relationship between total liabilities and total equity as well as net debt and EBITDA.

Titan's policy is to maintain leverage ratios in line with an investment grade profile.

The Group includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents.

Group Company
(all amounts in Euro thousands) 2015 2014 2015 2014
Long term borrowings (note 24) 716,766 634,195 300,712 336,694
Short term borrowings (note 24) 26,313 49,522 9,324 95
Debt 743,079 683,717 310,036 336,789
Less: cash and cash equivalents (note 21) 121,733 142,946 8,626 16,971
Net Debt 621,346 540,771 301,410 319,818
Profit before interest, taxes, depreciation and amortization (EBITDA) 216,422 181,591 43,768 30,617
Total liabilities 1,244,190 1,183,654 388,482 416,957
Total equity 1,705,285 1,627,595 860,544 823,301

34. Fair value measurement

Set out below is a comparison by category of carrying amounts and fair values of the Group's and the Company's financial instruments, that are carried in the statement of the financial position:

(all amounts in Euro thousands) Group Company
Carrying amount Fair value Carrying amount Fair value
Financial assets 2015 2014 2015 2014 2015 2014 2015 2014
Available-for-sale financial assets (note 16) 3,319 1,469 3,319 1,469 2,281 172 2,281 172
Other non-current assets (note 17) 10,252 11,472 10,252 11,472 3,063 2,960 3,063 2,960
Financial liabilities
Long-term borrowings (note 24) 716,766 634,195 725,075 638,826 300,712 336,694 305,087 339,969
Short-term borrowings (note 24) 26,313 49,522 26,313 49,501 9,324 95 9,324 95
Derivative financial instruments 924 2,565 924 2,565 - - - -
Other non-current liabilities (note 27) 1,513 24,696 1,513 24,696 146 134 146 134
Put option (note 31) 8,315 - 8,315 - - - - -

Note: Derivative financial instruments consist of cross currency interest rate swaps (CCS) and commodity swaps.

The management assessed that the cash and short-term deposits, trade receivables, trade payables, bank overdrafts and other current liabilities (excluding the put option) approximate their carrying amounts largely due to the short-term maturities of these instruments.

Fair value hierarchy

The Group and the Company use the following hierarchy for determining and disclosing the fair value of the assets and liabilities by valuation method:

Level 1: based on quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: based on valuation techniques whereby all inputs having a significant effect on the fair value are observable, either directly or indirectly and includes quoted prices for identical or similar assets or liabilities in markets that are not so much actively traded.

Level 3: based on valuation techniques whereby all inputs having a significant effect on the fair value are not observable market data.

The following table provides the fair value measurement hierarchy of the Group's and the Company's assets and liabilities as at 31 December 2015 and 2014.

(all amounts in Euro thousands) Group Company Fair value hierarchy
Fair value Fair value
Assets 2015 2014 2015 2014
Investment property 9,548 9,267 9,461 9,908 Level 3
Available-for-sale financial assets
Quoted equity shares 2,110 - 2,109 - Level 1
Other available-for-sale financial assets 1,209 1,469 172 172 Level 3
Liabilities
Long-term borrowings 725,075 638,826 305,087 339,969 Level 2
Short-term borrowings 26,313 49,501 9,324 95 Level 2
Derivative financial instruments 924 2,565 - - Level 2
Other non current liabilities - 23,843 - - Level 3
Put option (note 31) 8,315 - - - Level 3

During the reporting period there were no transfers into and out of level 3.

34. Fair value measurement (continued)

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced liquidation or sale. The following methods and assumptions were used to estimate the fair values: The fair value of level 3 investment property is estimated by the Group and the Company by external, independent, certified valuators (note 12).

Level 1

Level 1 available-for-sale financial assets ared Banks' listed securities acquired by the Company through the Greek Banks Recapitalization (note 16).

Level 2

Level 2 long and short term borrowings are evaluated by the Group and the Company based on parameters such as interest rates, specific country risk factors, or price quotations at the reporting date. Especially for long-term borrowings, quoted market prices or dealer quotes for the specific or similar instruments are used.

Level 2 derivative financial instruments comprise cross currency interest rate swaps and oil swaps. Τhe Group and the Company use a variety of methods and make assumptions that are based on market conditions existing at each reporting date. The aforementioned contracts have been fair valued using: a) forward exchange rates that are quoted in the active market, b) forward interest rates extracted from observable yield curves and c) oil prices extracted from observable yield curves, which are quoted in the active market.

Level 3

Level 3 available-for-sale financial assets refer mainly to investments in foreign property funds in which the Group owns an insignificant percentage. Their valuation is made based on their financial statements, which present the assets at fair value (note 16).

Level 3 put option (and the other non-current liabilities of 2014) consists of the put option that the Group has granted to non-controlling interest shareholder of its subsidiary in Albania, ANTEA Cement SHA. The put option is valued using a discounted cash flow model. The valuation requires management to make certain assumptions about unobservable inputs to the model. Certain significant unobservable inputs are disclosed in the table below:

2015 2014
Gross margin growth rate 35.4% 29.4%
Discount rate 10.6% 13.5%

In addition to the above, forecast cash flows for the first five years are a significant unobservable input. The management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value.

An increase in the forecast cash flows or in the gross margin growth rate for cash flows in the subsequent periods would lead to an increase in the fair value of the put option. On the other hand, an increase in the discount rate used to discount the forecast cash flows would lead to a decrease in the fair value of the put option.

The significant unobservable inputs are not interrelated. The fair value of the put option is not significantly sensitive to a reasonable change in the forecast cash flows or the discount rate; however it is sensitive to a reasonable change in the gross margin growth rate, as described in the following table:

Sensitivity analysis of Group's gross margin growth changes:

(all amounts in Euro thousands) Effect on the fair value
Increase by 5 percentage points in the gross margin growth
rate: 69
Decrease by 5 percentage points in the gross margin growth
rate: -63

35. Fiscal years unaudited by the tax authorities

(1) Τitan Cement Company S.A 2010,2014-2015 Colombus Properties B.V. 2010-2015
(2) Aeolian Maritime Company - Holtitan BV 2010-2015
(1) Albacem S.A. 2014-2015 Aeas Netherlands B.V. 2010-2015
(1) Arktias S.A. 2010,2014-2015 (2) Titan Cement U.K. Ltd 2015
(1) Interbeton Construction Materials S.A. 2007-2010,2015 (5) Τitan Αmerica LLC 2011-2015
(1) Intertitan Trading International S.A. 2008-2010,2014-2015 Separation Technologies Canada Ltd 2014-2015
(1) Porfirion S.A. 2010,2014-2015 Stari Silo Copmany DOO 2008-2015
(1) Vahou Quarries S.A. 2010,2014-2015 Cementara Kosjeric DOO 2006-2015
(1) Quarries Gournon S.A. 2010,2014-2015 TCK Montenegro DOO 2007-2015
(1) Quarries of Tagaradon Community S.A. 2010,2014-2015 Double W & Co OOD 2007-2015
(1) Aitolika Quarries S.A. 2014-2015 Granitoid AD 2007-2015
(1) Sigma Beton S.A. 2010,2014-2015 Gravel & Sand PIT AD 2008-2015
(1) Titan Atlantic Cement Industrial and Commercial S.A. 2010,2014-2015 Zlatna Panega Beton EOOD 2008-2015
(1) Titan Cement International Trading S.A. 2014-2015 Zlatna Panega Cement AD 2010-2015
(1) KTIMET Quarries S.A. 2010,2014-2015 Cement Plus LTD 2014-2015
Aemos Cement Ltd 2008-2015 Rudmark DOOEL 2006-2015
Alvacim Ltd 2010-2015 Usje Cementarnica AD 2009-2015
(3) Balkcem Ltd 2008, 2010-2015 Titan Cement Netherlands BV 2010-2015
Iapetos Ltd 2007-2015 Alba Cemento Italia, SHPK 2012-2015
Rea Cement Ltd 2008-2015 Antea Cement SHA 2015
Themis Holdings Ltd 2007-2015 Sharr Beteiligungs GmbH 2011-2015
(4) Tithys Ltd 2006,2008-2015 Kosovo Construction Materials L.L.C. 2011-2015
Feronia Holding Ltd 2007-2015 SharrCem Sh.P.K 2011-2015
Vesa DOOL 2006-2015 (2) Alexandria Development Co.Ltd -
Trojan Cem EOOD 2010-2015 Alexandria Portland Cement Co. S.A.E 2010-2015
Dancem APS 2010-2015 GAEA Green Alternative Energy Assets Ltd 2007-2015
Titan Global Finance PLC 2007-2015 Beni Suef Cement Co.S.A.E. 2009-2015
Terret Enterprises Ltd 2009-2015 East Cement Trade Ltd 2006-2015
Salentijn Properties1 B.V. 2010-2015 Titan Beton & Aggregate Egypt LLC 2010-2015
Titan Cement Cyprus Limited 2007-2015 (2) Titan Egyptian Inv. Ltd -
KOCEM Limited 2007-2015 Green Alternative Energy Assets EAD 2012-2015
(2) Fintitan S.R.L. 2011-2015 GAEA Zelena Alternative Enerjia DOOEL 2013-2015
Cementi Crotone S.R.L. 2011-2015 GAEA Enerjia Alternative e Gjelber Sh.p.k. 2014-2015
Cementi ANTEA SRL 2010-2015

(1) For the fiscal year 2013 the above companies were tax audited by their Certified Auditors Accountants, according to the terms of article 82, par. 5 of the Law 2238/1994. The tax audit for the fiscal year 2014 was conducted by the Certified Auditors Accountants according to the article 65A, par. 1 of L. 4174/2013 that has been accordingly revised by L. 4262/2014.

(2) Under special tax status.

(3) Fiscal year of 2009 has been audited.

(4) Fiscal year of 2007 has been audited.

(5) Companies operating in the U.S.A., are incorporated in the Titan America LLC subgroup (note 14).

36. Reclassifications

Αn amount of €4,272 thousand relating to stripping cost in USA was transferred from "intangible assets and goodwill" to "property, plant and equipment", in the Group's statement of financial position as at 31.12.2014 in order to be comparable with the statement of financial position as at 31.12.2015.

37. Events after the reporting period

There are no events after the 31st of December 2015 that relate to the Group and the Company and which would significantly affect the Group's and the Company's financial statements.

Appendix Ι

Regarding Company transactions with affiliated companies, in accordance to article 2, par. 4 of Codified Law 3016/2002, for 2015

During 2015, Company's transactions with the previously mentioned companies are as listed below:

(all amounts in Euro)
-----------------------
(all amounts in Euro)
I. INFLOWS 1/1 - 31/12/2015
A. Sales
1. Cement & Clinker sales
INTERBETON CONSTRUCTION MATERIALS S.A. 18,702,841
TRANSBETON S.A.
BENI SUEF CEMENT CO.
INTERTITAN S.A. 5,547,675
FINTITAN SRL 8,424,544
CEMENTI CROTONE SRL 420,000
ANTEA CEMENT SHA 50,072
TITAN CEMENT U.K. LTD 17,976,102
ESSEX CEMENT CO LLC 37,203,975
CEMENTARNICA USJE A.D. 1,738,153
CEMENTARA KOSJERIC A.D. 78,587
SHARRCEM SH.P.K. 123,001
90,264,950
2. Aggragates sales
INTERBETON CONSTRUCTION MATERIALS S.A. 969,525
969,525
3. Solid Fuels sales
CEMENTARNICA USJE AD 4,296,611
4,296,611
4. Fixed assetes sales
INTERBETON CONSTRUCTION MATERIALS S.A. 11,234
SHARRCEM SH.P.K. 14,320
TANAGRA QUARRIES S.A.
CEMENTARNICA USJE A.D. 78,000
103,554
5. Spare parts sales
ANTEA CEMENT SHA 448
SHARRCEM SH.P.K. 6,800
ZLATNA PANEGA CEMENT A.D.
CEMENTARNICA USJE AD
5,760
13,008
TOTAL A. 95,647,648
B. Services
1. Provision of computerization and IT services
INTERTITAN S.A. 655
ALBACEM SHA 655
GOURNES QUARRIES S.A. 2,000
PORFYRION S.A. 656
VAHOU QUARRIES S.A. 656
AITOLIKA QUARRIES S.A. 656
ARKTIAS S.A. 656
TITAN CEMENT ATLANTIC S.A. 655
TITAN INTERNATIONAL TRADING S.A. 655
TRANSBETON S.A.
INTERBETON CONSTRUCTION MATERIALS S.A. 313,805

321,049

Titan Cement Company S.A. Appendix Ι

110,231,801

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2. Other income from services
------------------------------- -- -- --
TOTAL B. 14,548,018
14,226,969
AEMOS LTD 7,176
TITAN BETON & AGGREGATES 8,161
CEMENTARNICA USJE AD 1,681,230
SHARRCEM SH.P.K. 1,183,218
ZLATNA PANEGA CEMENT A.D. 1,104,375
IAPETOS 7,176
ANTEA CEMENT SHA 1,499,552
CEMENTARA KOSJERIC A.D. 894,260
AITOLIKA QUARRIES S.A. 4,000
GOURNES QUARRIES S.A. 1,184
TITAN CEMENT ATLANTIC S.A. 1,200
TITAN INTERNATIONAL TRADING S.A. 1,200
ADOCIM CIMENTO BETON SANAYI VE TICARET SA 37,667
INTERBETON CONSTRUCTION MATERIALS S.A. 193,480
INTERTITAN S.A. 1,200
ALBACEM SHA 1,200
ESSEX CEMENT CO LLC
TITAN CEMENT U.K. LTD
36,230
39,040
TITAN AMERICA LLC 4,620,796
ALEXANDRIA PORTLAND CEMENT Co 1,035,855
BENI SUEF CEMENT CO. 1,868,769
INTERBETON CONSTRUCTION MATERIALS S.A. 30,815
AEOLIAN M.C. 592
INTERTITAN S.A. 592
ALBACEM SHA 592
PORFYRION S.A. 592
VAHOU QUARRIES S.A. 592
ARKTIAS S.A. 592
AITOLIKA QUARRIES S.A. 584
TITAN CEMENT ATLANTIC S.A. 592
TITAN INTERNATIONAL TRADING S.A. 592
36,135
TOTAL C. 36,135

II. OUTFLOWS

A. Purchases

1. Aggregates purchases

INTERBETON CONSTRUCTION MATERIALS S.A. 2,709,184
KTIMET SA 1,678
2,710,862
2. Ready-mix concrete purchases
INTERBETON CONSTRUCTION MATERIALS S.A. 144,160
144,160
3.Spare Parts Purchases
CEMENTARA KOSJERIC 4,155
4,155
4.Fix Assets Purchases
INTERBETON CONSTRUCTION MATERIALS S.A. 98,654
98,654
TOTAL A. 2,957,831
B. Services Titan Cement Company S.A.
Appendix Ι
1. Rents and leases
INTERBETON CONSTRUCTION MATERIALS S.A. 35,100
35,100

2. Various payments from services

INTERBETON CONSTRUCTION MATERIALS S.A.
ALEXANDRIA PORTLAND CEMENT Co
2,038,328
9,935
ANTEA CEMENT SHA 2,880
TITAN CEMENT U.K. LTD 53,273
TITAN AMERICA LLC 63,895
24,469,591
TOTAL B. 24,504,691
27,462,522

III. BALANCES

The balances on 31.12.2015 are as follow:

31/12/2015
DEBIT CREDIT
BALANCE BALANCE
CEMENTARNICA USJE AD 851,615
FINTITAN SRL 3,681,384
AITOLIKA QUARRIES S.A. 3,690
ANTEA CEMENT SHA 283,765
INTERBETON CONSTRUCTION MATERIALS S.A. 7,050,193 755,279
SALENTIJN 100,000
TITAN CEMENT U.K. LTD 3,312
GOURNES QUARRIES S.A. 1,354
AEMOS LTD 7,176
ESSEX CEMENT CO LLC 2,341,382
TITAN AMERICA LLC 1,505,566
TITAN BETON & AGGREGATES 8,161
CEMENTARA KOSJERIC A.D. 312,445
SHARRCEM SH.P.K. SH.P.K. 403,008
BENI SUEF CEMENT CO. 2,757,920
ALEXANDRIA PORTLAND CEMENT Co 1,190,862
ZLATNA PANEGA CEMENT A.D. 1,073,536
TITAN GLOBAL FINANCE PLC 307,105,286
AEOLIAN M.C. 256,954
INTERTITAN S.A. 749,625
IAPETOS 7,176
ALBACEM SHA 349,940
KTIMET SA 2,065
22,332,173 308,469,524

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|9

INFORMATION ACCORDING TO ARTICLE 10 OF LAW 3401/2005

The following Announcements/notifications have been sent to the Daily Official List Announcements and are posted to the Athens Exchange website as well as to our Company's website www.titan-cement.com

Purchase of EBRD's stake in Albanian subsidiary ANTEA CEMENT SHA
Analysts' presentation FY2014
Press release FY2014
Financial Calendar 2015
Correct repetition of a paragraph of section "Corporate Social Responsibility and Sustainable Development" in the
Annual Report of the Board of Directors for the business year 2014
Analysts' presentation 1st quarter 2015
Press Release for the 1st quarter 2015
Announcement pursuant to Law 3556/2007
Sale of treasury stock in the framework of Stock Option Plan
Invitation to the Annual General Meeting of Shareholders
Announcement regarding the payment of dividend and special reserves
Announcement pursuant to Law 3556/2007
Notice of Decisions taken by the Annual General Meeting of Shareholders on 19th of June 2015
Announcement conserning payment of the dividend 2014
Semi-annual interest coupon payment in respect of notes due in 2017 and 2019 issued by Titan Global Finance PLC
Announcement regarding the payment of dividend and special reserves
Analysts' presentation for the 1st half 2015
Press Release for Financial Results for the first half 2015
Announcement regarding the payment of the 2014 dividend and the distribution of special reserves also through the
branchneetwork of ALPHA BANK S.A.
Announcement pursuant to Law 3556/2007
Press Release for the 9 months 2015
Analysts' presentation for the 9 months 2015
Announcement pursuant to Law 3556/2007
Sale of treasury stock in the framework of Stock Option Plan
Announcement pursuant to Law 3556/2007
Announcement pursuant to Law 3556/2007
Announcement pursuant to Law 3556/2007
Announcement pursuant to Law 3556/2007
Announcement pursuant to Law 3556/2007
Announcement pursuant to Law 3556/2007
Announcement pursuant to Law 3556/2007
Announcement pursuant to Law 3556/2007
Announcement pursuant to Law 3556/2007
Announcement pursuant to Law 3556/2007

The Company's website is: www.titan-cement.com

31/12/2015 31/12/2014 31/12/2015 31/12/2014

TITAN CEMENT COMPANY S.A.

22A Halkidos Street - 111 43 Athens

Supervising Authority: Ministry of Economy, Development and Tourism (Department for Companies and G.E.MI.) CASH FLOW STATEMENT
www.titan-cement.com
Company's web address:
Andreas Canellopoulos - Chairman, Efstratios-Georgios (Takis) Arapoglou*-Deputy Chairman,
(Amounts in € thousand)
Board of Directors: Dimitrios Papalexopoulos - Chief Executive Officer, GROUP COMPANY
Nellos Canellopoulos, Takis-Panagiotis Canellopoulos, Doros Constantinou, Vassilios Fourlis, 1/1-31/12/2015 1/1-31/12/2014 1/1-31/12/2015 1/1-31/12/2014
Domna Mirasyesi-Bernitsa, Alexandra Papalexopoulou-Benopoulou, Petros Sabatacakis,
Ploutarchos Sakellaris, Michael Colakides, Eftichios Vassilakis,Efthimios Vidalis, Vassilios
Cash flows from operating activities
Profit before taxes
42,144 46,821 63,619 83,126
Zarkalis. Adjustments for:
*Independent non-executive directors Depreciation 113,650 105,449 13,541 13,457
Date of approval of the Financial Statements : 10 March 2016 Impairment of tangible and intangible assets
Provisions
17,045
16,581
-414
8,085
-
5,945
-753
2,599
Name of the auditor: Marios Psaltis (SOEL R.N. 38081) Expenses/(income) from participations and investments 1,240 1,609 -134 5,211
Auditing firm:
Report of the Auditors:
PricewaterhouseCoopers S.A.
Without qualification
Dividend income
Exchange differences
-
-38,097
-
-52,765
-55,112
-628
-112,000
-1,679
Interest (income)/expense 63,503 60,004 23,053 40,254
Other adjustments 19,582 21,414 1,022 2,751
CONDENSED STATEMENT OF FINANCIAL POSITION
(Amounts in € thousand)
Adjusted profit before changes in working capital
Increase in inventories
235,648
-8,402
190,203
-40,540
51,306
-1,356
32,966
-3,136
GROUP COMPANY (Increase)/decrease in trade and other receivables -5,876 17,894 -15,367 -7,121
ASSETS
Tangible assets
31/12/2015
1,807,709
31/12/2014
1,677,282
31/12/2015
239,413
31/12/2014
236,468
(Increase)/decrease in operating long-term receivables/payables
Increase/(decrease) in trade & other payables (excluding banks)
-3,128
19,399
-4,623
11,344
-
-5,226
81
4,704
Investment properties 9,548 9,267 9,461 9,908 Cash generated from operations 237,641 174,278 29,357 27,494
Intangible assets 454,584 441,808 1,854 1,973 Income tax paid -18,128 -20,946 -798 -180
Other non current assets
Inventories
99,353
286,793
106,660
275,774
847,997
70,682
848,878
72,830
Net cash flows from operating activities (a)
Cash flows from investing activities
219,513 153,332 28,559 27,314
Trade receivables 101,955 95,288 45,056 36,856 Purchase of tangible assets -172,588 -81,536 -16,543 -13,472
Other current assets 67,800 62,224 25,937 16,374 Purchase of intangible assets -888 -566 -101 -335
Cash and cash equivalents 121,733 142,946 8,626 16,971 Proceeds from the sale of tangible and investment properties 1,305 181 356 183
TOTAL ASSETS 2,949,475 2,811,249 1,249,026 1,240,258 Proceeds from dividends
Acquisition of subsidiaries, net of cash
2,218
-
1,404
-2,741
55,012
-
112,000
SHΑREHOLDERS EQUITY AND LIABILITIES Investment in associate -400 -71 - -
-
Share Capital (84,632,528 shares of € 4.00) 338,530 338,530 338,530 338,530 Share capital decrease in subsidiaries - - 1,180 392,950
Share Premium
Share stock options
22,826
1,807
22,826
1,620
22,826
1,807
22,826
1,620
Net payments from the acquisition of available-for-sale financial assets
Interest received
-1,836
1,767
-
2,148
-1,836
52
110
Treasury Shares -79,077 -83,633 -79,077 -83,633 Net cash flows (used in)/from investing activities (b) -170,422 -81,181 38,120 491,436
Retained earnings and other reserves 1,302,808 1,227,662 576,458 543,958 Net cash flows after investing activities (a)+(b) 49,091 72,151 66,679 518,750
Total share capital and reserves (a)
Non-controlling interests (b)
1,586,894
118,391
1,507,005
120,590
860,544
-
823,301
-
Cash flows from financing activities
Proceeds from non-controlling interest's participation in subsidiary's establishment
35 - -
Total Equity (c)=(a)+(b) 1,705,285 1,627,595 860,544 823,301 Proceeds from sale of treasury shares 638 566 638 566
Long-term borrowings
Provisions and other long-term liabilities
716,766
224,012
634,195
264,225
300,712
27,062
336,694
24,133
Proceeds from government grants
Interest paid
227
-56,318
891
-58,732
-
-22,441
Short-term borrowings 26,313 49,522 9,324 95 Dividends written-off and paid to the Greek state -36 -67 -36 -44,135
-67
Other short-term liabilities 277,099 235,712 51,384 56,035 Dividends & reserves paid to shareholders -25,316 -8,438 -25,316 -8,438
Total liabilities (d)
TOTAL SHAREHOLDERS EQUITY AND LIABILITIES (c)+(d)
1,244,190
2,949,475
1,183,654
2,811,249
388,482
1,249,026
416,957
1,240,258
Dividends paid to non-controlling interests
Acquisition of non controlling interests
-5,635
-10,591
-11,267
-
-
-
-
-
Proceeds from borrowings 396,812 1,057,652 93,421 177,900
CONDENSED INCOME STATEMENT Payments of borrowings -370,366 -1,098,747 -121,862 -636,327
(Amounts in € thousand) Net cash flows used in financing activities (c)
Net (decrease)/increase in cash and cash equivalents (a)+(b)+(c)
-70,550
-21,459
-118,142
-45,991
-75,596
-8,917
-510,501
8,249
GROUP COMPANY Cash and cash equivalents at beginning of the year 142,946 184,257 16,971 8,780
Revenue 1/1-31/12/2015
1,397,818
1/1-31/12/2014
1,158,414
1/1-31/12/2015
273,193
1/1-31/12/2014
263,969
Effects of exchange rate changes
Cash and cash equivalents at end of the year
246
121,733
4,680
142,946
572
8,626
-58
16,971
Cost of sales -1,039,425 -863,906 -202,442 -208,026
Gross profit before depreciation,amortization and impairment 358,393 294,508 70,751 55,943
Other operating (expenses)/income
Administrative expenses
-6,566
-114,169
6,476
-100,927
10,193
-37,048
10,179
-35,372
NOTES
Selling and marketing expenses -21,236 -18,466 -128 -133 1.
The total number of its treasury shares that the Company holds as at 31.12.2015 is 2,766,512 of total value €79,077 thousand and they have been
Profit before interest, taxes, depreciation, amortization and impairment 216,422 181,591 43,768 30,617 deducted from the Shareholders Equity of the Group and the Company.
Depreciation, amortization and impairment of tangibles/ intangibles assets
Profit before interest and taxes
-130,695
85,727
-105,035
76,556
-13,541
30,227
-12,704
17,913
2.
Certain prior year amounts have been reclassified for presentation purposes with no impact on the prior year equity, turnover and earnings after tax of the
Gains from participations and investments 1,565 - 55,246 112,000 Group and the Company (note 36 of annual financial statements).
Losses from participations and investments -2,805 -1,609 - -5,211
Finance costs
Share on profit of associates and joint ventures
-48,158
5,815
-33,071
4,945
-21,854
-
-41,576
-
3.
The assets of the Group and the Company have not been pledged.
Profit before taxes 42,144 46,821 63,619 83,126 4.
Number of employees at the end of the reporting period: Group 5,325 (2014: 5,223), Company 829 (2014: 813).
(Less)/Plus: Income tax expense -6,848 -11,104 -3,477 8,598
Profit after taxes (a)
Attributable to:
35,296 35,717 60,142 91,724 Capital expenditure excluding acquisitions and intangible assets for the fiscal year of 2015 amounted to: Group €172.6 m (2014: €81.5m), Parent Company
5.
€16.5 m (2014: €13.5 m).
Equity holders of the parent 33,754 30,947 60,142 91,724
Non-controlling interests 1,542 4,770 - - 6.
Transactions during the fiscal year 2015 and balances as of 31 December 2015 with related parties, as defined in IAS 24, are as follows:
Basic earnings per share (in €) 0.41263 0.37902 0.73522 1.12337 Amounts in € thousand
a) Income
Group
-
Company
110,232
Diluted earnings per share (in €) 0.41026 0.37670 0.73098 1.11651 b) Expenses 1,537 28,999
c) Receivables - 22,332
CONDENSED STATEMENT OF COMPREHENSIVE INCOME d) Payables
e) Key management compensations
223
5,826
308,692
5,826
(Amounts in € thousand) f) Receivables from key management 35 35
GROUP
1/1-31/12/2015
1/1-31/12/2014 1/1-31/12/2015 COMPANY
1/1-31/12/2014
7.
Companies included in the consolidated financial statements of fiscal year 2015 are presented in the note 14 of the Group's annual financial statements
Profit after taxes (a) 35,296 35,717 60,142 91,724 including locations, percentage Group ownership and consolidation method.
Other comprehensive income:
Exchange differences on translation of foreign operations
Net gains/(losses) on financial assets available for sale
45,298
1,389
88,142
-171
-
139
-
-
The unaudited by the tax authorities fiscal years for the Company and the Group's subsidiaries are presented in detail in the note 35 of the annual financial
8.
statements. There are no material provisions accounted for the unaudited by the tax authorities fiscal years as well as for litigation issues both for the Group
Cash flow hedges - 2,605 - 2,234 and the Company.
Revaluation of land and buildings - 65 - -
Re-measurement gains/(losses) on defined benefit plans
Income tax relating to components of other comprehensive income
2,751
-1,386
-5,492
2,143
1,601
-897
-2,414
1,240
9.
The balance of other provisions (short and long term) as of 31.12.2015 amounted to €27.8 m for the Group (31.12.2014: €20.1 m.) and €7.9 m. for the
Company (31.12.2014: €5.9 m.). Titan America LLC, a Group subsidiary, decided to suspend the development activities at the site of a proposed cement
Other comprehensive income net of tax (b) 48,052 87,292 843 1,060 plant in Eastern North Carolina, USA. As a result of its decision, the Group's net profit in 2015 were burdened by 8.3 mil. due to an impairment provision.
Total comprehensive income net of tax (a)+(b) 83,348 123,009 60,985 92,784
Total comprehensive income attributable to: In accordance with the Stock Option Plan instituted pursuant to resolution dated 3.6.2010 of the Annual General Meeting of Shareholders, the Company
10.
proceeded in the first half of 2015 to the sale of 159.319 common treasury shares representing 0.2% of its paid up share capital to 72 Titan Group
Shareholders 80,470 111,689 60,985 92,784 executives, at a sale price per share equal to the nominal value of each Company share i.e. €4.00 per share, and a total sale price of €638 thousand.
Non-controlling interests 2,878 11,320 - -
11.
Αlvacim Ltd, a Group subsidiary, purchased the 20% stake held by the European Bank for Reconstruction and Development (ΕBRD) in ANTEA CEMENT
SHA (ΑΝΤΕΑ), a Group subsidiary in Albania. As a result of this purchase, Titan Group holds 80% of ANTEA's share capital, whereas the remaining 20% is
CONDENSED STATEMENT OF CHANGES IN EQUITY held by the International Finance Corporation (IFC).

SUMMARY FINANCIAL RESULTS for the year ended 31 December 2015

(in terms of article 135 of Law 2190, for companies publishing annual financial statements in accordance with IAS/IFRS)

The figures illustrated below provide summary information about the financial position of Titan Cement S.A. and its subsidiaries. We advise the reader who seeks a complete picture of the financial position to visit the Company's web site, where the full year financial statements according to International Financial Reporting Standards together with the auditor's report, are presented.

  1. Equity balance at beginning of the year (1/1/2015 and 1/1/2014 respectively) 1,627,595 1,538,810 823,301 737,668 Total comprehensive income 83,348 123,009 60,985 92,784 As expected, the Group's operations in Greece have been affected by the capital controls imposed. Risks stemming out of the Group's exposure in Greece are mitigated and presented in note 2.16 of the annual financial statements. The Group continuously evaluates the economic environment in Greece in order to assess the risks related to its business and timely take the necessary mitigating actions.
Dividends distributed to ordinary and preferred shares -12,695 - -12,695 - 13.
Special reserve distributed to shareholders -12,695 - -12,695 -
Dividends distributed to non-controlling interests -9,156 -12,023 - -
Contingency reserve distributed to shareholders - -8,463 - -8,463
Sale - disposal of treasury shares for option plan 638 566 638 566
Non-controlling interest's participation in establishement of subsidiary 344 - - -
Share based payment transactions 1,010 746 1,010 746 share.
Non-controlling interest's put option recognition 3,606 -427 - -
Acquisition of non-controlling interest 1,330 - - - 14.
Deferred tax adjustment due to change in income tax rates on revaluation reserves 21,960 -14,623 - - treasury shares.
Equity balance at year end (31/12/2015 and 31/12/2014 respectively) 1,705,285 1,627,595 860,544 823,301
15.
total amount of €25,390 , i.e. €0.30 per share.

(Amounts in € thousand)

GROUP COMPANY

Chairman of the Board of Directors Chief Executive Officer Chief Financial Officer Finance Director Greece Financial Consolidation Senior Manager
ANDREAS L. CANELLOPOULOS DIMITRIOS TH. PAPALEXOPOULOS MICHAEL H. COLAKIDES GRIGORIOS D. DIKAIOS ATHANASIOS S. DANAS
I.D.No ΑΒ500997 I.D.No ΑΚ031353 Passport No K00215552 I.D No ΑΒ291692 I.D.No AB006812

The Annual General Meeting of Shareholders of the Titan Cement Company S.A., which was held on 19th June 2015, approved: a) the distribution of dividend from the profits of the financial year 2014 of a total amount of €12,695, corresponding to €0.15 per share (ordinary or preference). This amount was proportionally increased by the dividend corresponding to the treasury stock held by the Company and became €0.15509 per share. From this amount the Company withheld on behalf of the Shareholder a 10% tax and, therefore, the net amount paid was €0.13958 per share, b) the distribution of special reserves from previous financial years of a total amount of €12,695, corresponding to €0.15 per share (ordinary or preference). This amount was proportionally increased by the relevant amount corresponding to treasury shares held by the Company and the net amount of €0.15509 per

Company's Number in the General Electronic Commercial Registry: 224301000

(former Company's Number in the Register of Societes Anonymes: 6013/06/Β/86/90)

Earnings per share have been calculated on the total weighted average number of common and preference shares, excluding the average number of

The Board of Directors will propose to the Annual General Assembly of Shareholders, scheduled to take place on 17.6.2016, the distribution of dividend of a total amount of €25,390 , i.e. €0.30 per share.

Athens, 10 March 2016

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