SC Cemacon : Cemacon standalone EN fs 2022 final binded cu admin report

CEMACON SA

STANDALONE FINANCIAL STATEMENTS

Prepared in accordance with

Order of the Minister of Public Finance no. 2844/2016 for the approval of the Accounting Regulations in accordance with the

International Financial Reporting Standards,

AT AND FOR THE YEAR ENDED AT

DECEMBER 31, 2022

hesterofPublicFinance

no.2844/2016fortheapprovalofaccountingregulationsinaccordancewith

Notes attached form an integral part of these financial statements.

This is a free translation from the original version in Romanian.

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CONTENT:

Independent auditors report (Raportul auditorului independent) ............................................................................................... 1 - 5

Statement of individual financial position (Situatia individuala a pozitiei financiare) .................................................................. 6 - 7

Statement of individual comprehensive income (Situatia individuala a rezultatului global) ........................................................ 8 - 9

Statement of individual cash - flow (Situatia individuala a fluxurilor de trezorerie) ................................................................. 10 - 11

Statement of individual changes in equity (Situatia individuala a modificarilor capitalurilor proprii) ...................................... 12 - 13

• 1. ACCOUNTING POLICIES OF CEMACON ...................................................................................................................................... 14

• 2. ACCOUNTING ESTIMATES ......................................................................................................................................................... 38

• 3. SALES REVENUES ....................................................................................................................................................................... 40

• 4. OTHER OPERATING REVENUES ................................................................................................................................................. 41

• 5. OTHER OPERATING EXPENSES .................................................................................................................................................. 42

• 6. PERSONNEL EXPENSES .............................................................................................................................................................. 42

• 7. FINANCIAL INCOME AND EXPENSES ......................................................................................................................................... 44

• 8. TAXES ........................................................................................................................................................................................ 45

• 9. EARNINGS PER SHARE ............................................................................................................................................................... 47

• 10. DIVIDENDS ................................................................................................................................................................................ 47

• 11. TANGIBLE ASSETS ...................................................................................................................................................................... 48

• 12. INTANGIBLE ASSETS .................................................................................................................................................................. 54

• 13. GOODWILL AND DEPRECIATION ............................................................................................................................................... 55

• 14. FINANCIAL ASSETS ..................................................................................................................................................................... 55

• 16. TRADE RECEIVABLES AND OTHER RECEIVABLES ....................................................................................................................... 57

• 17. TRADE AND OTHER PAYABLES .................................................................................................................................................. 59

• 18. FINANCIAL INSTRUMENTS ........................................................................................................................................................ 59

• 19. OTHER ASSETS ........................................................................................................................................................................... 60

• 20. LOANS ....................................................................................................................................................................................... 61

• 21. EMPLOYEE'S BENEFITS .............................................................................................................................................................. 61

• 22. PROVISIONS .............................................................................................................................................................................. 62

• 23. INVESTMENT PROPERTY ........................................................................................................................................................... 63

• 24. ISSUED CAPITAL ......................................................................................................................................................................... 63

• 25. RESERVES .................................................................................................................................................................................. 65

• 26. LEASES AND RIGHT-OF-USE ASSETS .......................................................................................................................................... 66

• 27. GRANTS RECEIVED .................................................................................................................................................................... 67

• 28. TRANSACTIONS WITH AFFILIATES ............................................................................................................................................. 68

• 29. WAR IN UKRAINE ....................................................................................................................................................................... 69

• 30. SUBSEQUENT EVENTS ............................................................................................................................................................... 69

• 31. OTHER INFORMATION .............................................................................................................................................................. 69

• 32. CONTINGENTS ........................................................................................................................................................................... 70

Administator's report ............................................................................................................................................................. 1 - 25

Notes attached form an integral part of these financial statements.

This is a free translation from the original version in Romanian.

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Deloitte Audit S.R.L.

Clădirea The Mark Tower, Calea Griviței nr. 82-98, Sector 1, 010735 București, România

Tel: Fax:

[phone] [phone]

www.deloitte.ro

INDEPENDENT AUDITOR'S REPORT

To the Shareholders,

Cemacon S.A.

Report on the Audit of the Standalone Financial Statements

Opinion

• 1. We have audited the standalone financial statements of Cemacon S.A. (the Company), with registered office in Calea Turzii Street, No 178, identified by the unique tax registration code 677858, which comprise the statement of financial position as at December 31, 2022, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, including a summary of significant accounting policies and notes to the financial statements.

• 2. The standalone financial statements as of December 31, 2022 are identified as follows:

  •	Net assets/ Equity	RON 373,996,272
  •	Net profit for the financial year	RON 71,858,135

• 3. In our opinion, the accompanying standalone financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2022, and its financial performance and its cash flows for the year then ended in accordance with Ministry of Public Finance Order no. 2844/2016, with subsequent amendments, for the approval of accounting regulations conforming with International Financial Reporting Standards as adopted by EU.

Basis for Opinion

4.

We conducted our audit in accordance with International Standards on Auditing (ISAs), Regulation (EU) No. 537/2014 of the European Parliament and the Council (forth named The "Regulation") and Law 162/2017 ("the Law"). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code), in accordance with ethical requirements relevant for the audit of the financial statements in Romania including the Regulation and the Law and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

5.

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Numele Deloitte se referă la organizația Deloitte Touche Tohmatsu Limited, o companie cu răspundere limitată din Marea Britanie, la firmele membre ale acesteia, în cadrul căreia fiecare firmă membră este o persoană juridică independentă. Pentru o descriere amănunțită a structurii legale a Deloitte Touche Tohmatsu Limited și a firmelor membre, vă rugăm să accesațiwww.deloitte.com/ro/despre.

KEY AUDIT MATTER	How our audit addressed the key audit matter
Revenue recognition - Bill and Hold Sales
The Company performs a significant amount of Bill-and-hold transactions within its main revenue stream. In this form of sales arrangement, a seller of a good bills a customer for products but does not ship the product until a later date. In order for a customer to have obtained control of a product in a bill-and-hold arrangement, all of the following criteria must be met: (a) the reason for the bill-and-hold arrangement must be substantive (for example, the customer has requested the arrangement); (b) the product must be identified separately as belonging to the customer; (c) the product currently must be ready for physical transfer to the customer; and (d) the entity cannot have the ability to use the product or to direct it to another customer. Given the particularity of this transaction type and the related risk, we identified this stream as a key audit matter in order to ascertain the way in which the Company complies with the completion of the revenue recognition criteria for this type of revenue, and whether the revenue was recognized in the appropriate period. The accounting policies for the revenue recognition of Bill-and-hold sales are set out in Note 3 to the financial statements of the Company.	In order to address this key audit matter, we have taken an approach constructed around testing the design, implementation and operating effectiveness of the internal controls performed concurrently with the tests of details as a single procedure (dual purpose testing) that the Company performs in relation to Bill-and-Hold transactions. We have performed the following audit procedures: − We have tested based on a sample subsequent delivery documents to ascertain transactions have been finalized through a delivery; − We have assisted at the inventory count at year-end, and correlated such inventories, which were physically inspected to the revenue transactions, audited to ascertain that inventories subject to such transactions are readily available for delivery to the clients, and are on hand at the time the revenue is recognized; − We have reviewed based on a sample the supporting documentation whereby the customers agreed to this type of commercial arrangement the buyer, rather than the seller, has requested this type of transaction or alternatively verified the subsequent delivery. Moreover, our analytical procedures revealed that most frequently the buyers are construction companies with limited depositing facilities who prefer to have the inventories delivered to their construction sites on a 'just-in-time' basis. − We have tested that the selected payment terms specified within the agreements are the usual payment terms and the compliance to such terms by the customers through reviewing subsequent encashment.

Other information- Administrator's Report

6.

The administrator is responsible for preparation and presentation of the other information. The other information comprises the Administrator' report and the Remuneration Report, but does not include the separate financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and, unless otherwise explicitly mentioned in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements for the year ended December 31, 2022, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

With respect to the Administrator's report, we read it and report if this has been prepared, in all material respects, in accordance with the provisions of Ministry of Public Finance Order 2844/2016, with subsequent amendments, for the approval of accounting regulations conforming with International Financial Reporting Standards as adopted by EU. With respect to the Remuneration report, we read it and report if this has been prepared, in all material respects, in accordance with the provisions of Law 24/2017, article no. 107.

On the sole basis of the procedures performed within the audit of the financial statements, in our opinion:

• a) the information included in the administrators' report and the Remuneration Report for the financial year for which the financial statements have been prepared is consistent, in all material respects, with these financial statements;

• b) the administrators' report has been prepared, in all material respects, in accordance with the provisions of Ministry of Public Finance Order no. 2844/2016, with subsequent amendments, for the approval of accounting regulations conforming with International Financial Reporting Standards as adopted by EU.

• c) the Remuneration report has been prepared, in all material respects, in accordance with the provisions of Law 24/2017, article no. 107.

Moreover, based on our knowledge and understanding concerning the Company and its environment gained during the audit on the standalone financial statements prepared as at December 31, 2022, we are required to report if we have identified a material misstatement of this Administrator's report and the Remuneration report. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

• 7. Management is responsible for the preparation and fair presentation of the standalone financial statements in accordance with Ministry of Public Finance Order no. 2844/2016, with subsequent amendments, for the approval of accounting regulations conforming with International Financial Reporting Standards as adopted by EU and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

• 8. In preparing the standalone financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

• 9. Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

• 10. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

• 11. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

  • • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

  • • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

  • • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.