ANNUAL REPORT2016 - TCL Group Annual Report 2016.pdf8 TCL GROUP – ANNUAL REPORT 2016 SHARE & PERFORMANCE HIGHLIGHTS TTSE - Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Volume - TCL

ANNUALREPORT2016

BUILDINGA STRONGERREGION

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Corporate Information 2Corporate Social Responsibility 510-year Consolidated Financial Review 6Share & Performance Highlights 8Board of Directors 11Corporate Governance 16Group Chairman’s Review 19Group Executive Committee 23Managing Director’s Report & Management Discussion 2016 28Directors’ Report 39TCL Group Business Units - Principal Officers 41Independent Auditor’s Report 51Consolidated Statement of Financial Position 59Consolidated Statement of Income 60Consolidated Statement of Comprehensive Income 61Consolidated Statement of Changes In Equity 62Consolidated Statement of Cash Flows 63Notes to the Consolidated Financial Statements 64

Design and Layout: Paria Publishing Co. Ltd.Main Photographers: Michael Bonaparte, Peter Lim Choy.Printing: Scrip J

Our Strategic Framework

Building a Brighter Future

Values

Strategic Priorities

Vision

Mission

Customer Centricity

Operational Efficiencies

Health, Safety & Environment

enOTCL

BusinessModel

We leverage on our group’s expertise and footprint to establish best practices and common processes, in order to operate with agility and effectiveness to ultimately create value to all of our stakeholders

Sustainable Returns

Customers Excellence Safety Leadership Integrity

Create sustainable value by providing industry-leading construction products and solutions to satisfy the needs of our customers in the Caribbean

OUR STRATEGIC FRAMEWORKTCL GROUP – ANNUAL REPORT 2016

CONTENTS

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CORPORATE INFORMATIONTCL GROUP – ANNUAL REPORT 2016

Board of Directors of Trinidad Cement LimitedMr. Wilfred Espinet (Chairman) Mr. Francisco Aguilera Mendoza (Deputy Chairman) Mr. José Luis Seijo González (Managing Director) Mr. Alejandro Alberto Ramirez CantuMr. Arun K. Goyal Mr. Ruben McSween Mr. Bryan Ramsumair Mr. Jean Michel AllardMr. Nigel Edwards Ms. Alison Lewis

Company Secretary Ms. Kathryna Baptiste

Managing Director - TCL GroupMr. José Luis Seijo González

Registered OfficeSouthern Main Road Claxton Bay Trinidad & Tobago, W.I.Phone: (868) 225-8254 Fax: (868) 659-0818Website: www.tclgroup.com

Bankers(Local)Republic Bank LimitedHigh Street, San FernandoTrinidad & Tobago, W.I.

First Citizens Bank 38 Southern Main Road Marabella Trinidad & Tobago, W.I.

Bankers(Foreign)CITIBANK N.A.111 Wall StreetNew York, NY 10043U.S.A.

Auditors Ernst & Young5/7 Sweet Briar RoadSt. ClairTrinidad & Tobago, W.I.

Registrar & Transfer Agent Trinidad and Tobago Central Depository Limited10th Floor, Nicholas Tower63-65 Independence SquarePort of SpainTrinidad and Tobago, W.I.

Stock Exchange on which the Company is listed:Trinidad & Tobago Stock Exchange10th Floor, Nicholas Tower63-65 Independence SquarePort of SpainTrinidad & Tobago, W.I.

Attorneys-At-LawGirwar & DeonarineHarris Court, 17-19 Court StreetSan FernandoTrinidad, W.I. M.G. Daly & Partners 115A Abercromby Street Port of Spain Trinidad, W.I.

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Johnson, Camacho & Singh First Floor, Briar Place10 Sweet Briar RoadSt. ClairPort of SpainTrinidad, W.I.

M. Hamel Smith & Co. Eleven AlbionCorner Dere & Albion StreetsPort of SpainTrinidad, W.I.

Pollonais, Blanc, De La Bastide & Jacelon 17-19 Pembroke StreetPort of SpainTrinidad, W.I.

Ravi Hefffes-DoonUpper Floor, Abercromby Court 84 Abercromby Street Port of SpainTrinidad, W.I.

Alvin Fitzpatrick, S.C. 84 Abercromby Street Port of Spain Trinidad, W.I.

Jason K. Mootoo 77 Abercromby StreetPort of Spain Trinidad, W.I.

Gitanjali Gopeesingh Chancery Chambers108 Duke StreetPort of Spain Trinidad, W.I.

Derek Ali36 Gordon Street,Port-of-SpainTrinidad, W.I.

Hylton Powell 11A Oxford RoadKingston 5, Jamaica, W.I.

Clarke, Gittens, FarmerParker House, Wildey Business ParkWildey RoadSt. MichaelBarbados, W.I.

Hughes, Fields & Stoby62 Hadfield & Cross StreetsWerk-en-rustGeorgetownGuyana, South America

Patterson Mair Hamilton 63-67 Knutsford BoulevardKingston 5Jamaica, W.I.

Caribbean Juris Chambers Hannah Waverhouse P.O. Box 801 The Valley Anguilla

Kelsick, Wilkin & Ferdinand P.O. Box 174Fred Kelsick Building Independence Square SouthBasseterre St. Kitts, W.I.

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CSR AT THE TCL GROUP

ARAWAK CEMENT INITIATES SCHOOL PARTNERSHIP

WITH DONATION OF 25 COMPUTERS

Photographed from left: Mr. Stephen Jackman, Principal of the Darryl Jordan Secondary

School; Mr. Manuel Toro, General Manager, Arawak Cement; Mr. Denis Kellman,

Member of Parliament for St. Lucy; Ms. Wilma Gibson, Senior Executive Officer,

Arawak Cement; Ms. Shanice Woodley, School Prefect; Mr. Stephen Whittaker, Head Boy;

Mr. Erwin Jones, Marketing Officer, Arawak Cement and Mr. Ken Layne, Deputy Principal.

Arawak Cement Company launched a multi-faceted,long term

partnership with Darryl Jordan Secondary School witha donation

of 25 computers.

In making the presentation of the computers and announcing

Arawak’s partnership with the neighbouring school, the

General Manager, Manuel Toro, revealed that the company will

be taking a keen interest in the long-term development of the

students. He disclosed that part of this investment in their future

would be Caribbean Vocational Qualification (CVQ) training at

the Arawak Cement plant. This programme will give the students

hands-on experience at the plant to boost their competency levels

for scholastic assessment and certification.

The General Manager also disclosed that another facet of the

partnership would be the replacement of steel pans for the Darryl

Jordan Secondary Steel Orchestra.

During the 3rd and 4th weeks of March, employees from TCL Packaging Limited (TPL),

TCL (Ponsa) Manufacturing Limited (TPM), and Trinidad Cement Limited (TCL) came

together to bring some much needed goodwill to Claxton Bay Resident,

Albertha Morris, just in time for Easter! The volunteers painted her new home, which was

recently built, thanks to the generous donation of cement from TCL!

Prior to this, Ms. Morris lived in a small, dilapidated wooden home.

CSR AT THE TCL GROUP

TPL, TPM & TCL EMPLOYEES PAINT RESIDENT’S HOME!

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We respond to requests from community organisations, such as this contribution of equipment to a children’s ward.

Volunteers from our companies assist needy people in the community with manpower to create a better living environment.

We support youth development.

We partner with NGOs and schools to undertake youth programmes and activities with children in our communities.

CORPORATE SOCIAL RESPONSIBILITY

Our strong commitment to social responsibility under the core pillars of youth and education, shelter and the environment creates sustainable support for organisations that make the Caribbean region a better place to live.From all our locations in the region, we strive to get involved in the communities where we operate, to Build a Stronger Region!

TCL GROUP – ANNUAL REPORT 2016

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10-YEAR CONSOLIDATED FINANCIAL REVIEW

UOM 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Group Third Party Revenue TT$m 1,923.00 2,074.40 1,755.80 1,561.10 1,560.86 1,615.89 1,941.05 2,104.81 2,115.45 1,887.01

Operating Profit TT$m 349.40 307.20 248.10 (1.20) 62.53 (0.76) 271.56 111.08 446.31 224.43

Group Profit before Taxation TT$m 245.70 195.90 84.00 (149.60) (162.05) (351.74) 33.79 (102.47) 487.49 89.63

Group Profit attributable to Shareholders TT$m 187.80 137.40 95.80 (48.50) (167.17) (292.91) 58.20 (214.39) 405.11 36.86

Foreign Exchange Earnings

TT $m 292.30 362.40 327.70 239.30 271.90 279.60 352.00 309.9 298.40 245.70

EPS TT$ 0.77 0.56 0.39 (0.20) (0.68) (1.19) 0.24 (0.87) 1.19 0.10

Ordinary Dividend per Share TT$ 0.07 - - - - - - - - 0.04

Issued Share Capital – Ordinary

TT $m 466.20 466.20 466.20 466.20 466.20 466.20 466.20 466.20 827.73 827.73

Shareholders’ Equity TT$m 1,313.70 1,372.20 1,459.70 1,424.90 781.99 485.72 561.53 276.98 963.29 1,017.13

Group Equity TT$m 1,442.30 1,504.30 1,579.30 1,517.30 810.26 461.07 536.30 245.53 950.97 1,016.91

Total AssetsTT $m 3,621.60 3,994.70 4,034.40 4,120.90 3,506.48 3,452.76 3,399.14 3,010.00 3,033.08 2,922.30

Net Assets per Share TT$ 5.77 6.02 6.32 6.07 3.24 1.85 2.15 0.98 2.54 2.71

Return on Shareholders’ Equity % 14.30 10.00 6.60 (3.40) (21.38) (60.30) 10.36 (77.40) 42.05 3.62

Share Price (Dec 31) TT$ 7.35 4.00 3.85 2.80 1.79 1.49 2.20 2.50 3.99 4.40

No. of Shares Outstanding (Dec 31) ‘000 249,765 249,765 249,765 249,765 249,765 249,765 249,765 249,765

374,647.7 374,647.7

Market Capitalisation (Dec 31) TT$m 1,835.80 999.10 961.60 699.30 447.08 372.15 549.48 624.41 1,494.84 1,648.45

Total Long Term Debt TT$m 1,395.60 1,444.80 1,359.00 1,242.90 1,678.40 2,046.12 1,951.80 1,848.90 1,166.06 968.50

Total Long Term Debt/Equity Ratio % 96.80 96.00 86.10 81.90 207.14 443.78 363.94 753.03 122.62 95.24

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Group Third Party Revenue

(TT$

m)

2012 2013 2014 2015 2016

2012 2013 2014 2015 2016

2012 2013 2014 2015 2016

2012 2013 2014 2015 2016

1,616 1,941 2,105 2,115 1,887

Group Total Assets

(TT$

m)

3,453 3,399 3,010 3,033 2,922

Group Earnings per Share

(TT$

)

Group Profit Attributable to Shareholders

(TT$

m)

405.11

(1.19) 0.24 (0.87) 0.10

1.19

(292.91) 58.20 (214.39) 36.86

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SHARE & PERFORMANCE HIGHLIGHTS

TTSE - www.stockex.co.ttJan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16

Volume - TCL 000 8,861 771,579 189,990 10,777,512 120,329 62,646 Volume - RML 000 - - 1 100 134 - BSE - www.bse.com.bb

Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16Volume - TCL - 1,100 - - 1,222 - JSE - www.jamstockex.com

Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Volume - TCL - - - - - - Volume - CCCL 7,139,030 1,804,510 1,650,635 9,905,211 1,775,161 1,139,868

TTSE - www.stockex.co.ttJul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 TOTAL

Volume - TCL 000 582,266 344,163 902,023 342,824 25,978 832,973 14,961,144 Volume - RML 000 225 260 - - - 7,999 8,719 BSE - www.bse.com.bb

Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 TOTALVolume - TCL 1,100 1,500 100,002 38,361 - - 143,285JSE - www.jamstockex.com

Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 TOTAL Volume - TCL - - - - 19,066 1,306 20,372 Volume - CCCL 1,814,272 4,052,797 2,358,340 633,248 533,067 643,123 33,449,262

January-June 2016

July-December 2016

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3.89 3.90 3.50 3.36 3.50 3.42 3.00 3.05 3.10 3.52 3.25 4.40

Trinidad & Tobago Stock Exchange

TCL

TCL

Shar

e Pr

ice

(TT$

)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

18.79 18.79 17.70 15.05 15.00 14.01 12.25 11.00 11.00 11.00 11.00 10.99

11.63 11.60 11.33 11.25 11.10 11.36 11.53 11.60 11.57 11.73 12.06 12.10

Barbados Stock Exchange

Index/100

Shar

e Pr

ice

(Bds

$)


0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.85 0.85 0.85

6.63 6.63 6.78 6.78 6.80 6.87 6.88 6.56 6.45 6.50 6.52 6.52

Jamaica Stock ExchangeIndex/1000

Shar

e Pr

ice

(Ja$

)


28.59 27.28 26.78 26.48 24.27 22.98 24.31 26.44 30.01 30.85 28.21 34.80

15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 58.50 63.00

CCCL

TCL

160.35 156.70 153.91 150.04 156.56 159.72 159.82 160.39 164.48 166.76 178.66 192.28

Index/100

RML

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Group Performance Highlights 2016 2015 % Change

Income Statement Group Third Party Revenue $m 1,887.01 2,115.45 -10.8%Group Profit/(Loss) attributable to Shareholders $m 36.86 405.11 90.9%Foreign exchange earnings $m 245.74 298.40 -17.6%

Balance SheetTotal Assets $m 2,922.30 3,033.08 -3.7%Shareholders’ Equity $m 1,017.13 963.29 5.6%Net Assets per Share $ 2.71 2.54 6.7%Total Long Term Debt $m 968.50 1166.06 16.9%Total Long Term Debt to Equity Ratio % 95.24 122.62 22.3%

Operational HighlightsTCL Clinker production ‘000 tonnes 596.5 649.4 -8.1%CCCL Clinker production ‘000 tonnes 761.1 804.3 -5.4%ACCL Clinker production ‘000 tonnes 161.1 194.0 -17.0%TPL Paper sack production millions 31.0 28.8 7.6%TPM Sling/Bag production thousands 429.6 262.8 63.5%

Distribution of Shareholding

Category % DistributionSierra Trading 39.50%Individuals 20.10%NIB 11.92%Banks / Pension Funds 10.02%Baleno Holdings 8.21%Insurance Companies 4.98%Unit Trust 2.49%Other Foreign Investors 2.78%


SHARE & PERFORMANCE HIGHLIGHTS (C’TD.)

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BOARD OF DIRECTORS

Wilfred Espinet (Chairman), José Luis Seijo González (Managing Director)


Arun K. Goyal, Alison Lewis, Bryan Ramsumair

Ruben McSween, Nigel Edwards

Alejandro Alberto Ramirez Cantu, Jean Michel Allard, Francisco Aguilera Mendoza

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About Our Board of DirectorsThe Board of Directors is responsible for setting the strategic aims of the organisation, by reviewing and approving corporate strategy, major plans of action, annual budgets and business plans. It has the statutory authority and obligation to act honestly and in good faith, with a view to the best interest of all shareholders as well as the interests of the Company’s employees. Full details of the Board’s responsibilities and duties can be downloaded from this website: http://www.tclgroup.com/about-tcl-group/article/corporate-governance. The Board is comprised of the following directors:

Wilfred Espinet – Non-Executive Director and Chairman of the BoardWilfred Espinet was appointed to the Board in August 2014. He is a businessman with considerable international experience in Manufacturing, Shipping and Retail industries in several countries. He is a former Director of Associated Brands Industries Limited; Managing Director of Consolidated Biscuits Ltd. and Chocolate Products Ltd. in Malta and President Director General of Cheval Blanc S.A. in France. He is a Past President of the Trinidad and Tobago Manufacturers’ Association.Mr. Espinet is also the Chairman of Aeromarine International Logistics Company, which has operations in North America, Central America and the Caribbean, and Mayfair, a Cosmetic Retailer with outlets throughout the Caribbean.

Francisco Aguilera Mendoza – Non-Executive Director Francisco Aguilera Mendoza was appointed to the Board in August 2014. He is the Vice President of CEMEX South, Central America and the Caribbean Region; and Colombia. Mr. Aguilera Mendoza was appointed to this position in October 2016 and prior to this, was responsible for the trading of cement and clinker for CEMEX in the Americas, including the Caribbean Region. Mr. Aguilera Mendoza joined CEMEX in June 1996, and has held positions in various areas throughout CEMEX’s US operations including: Logistics Manager, Sales Administration Director, Aggregate Operations VP, and VP & General Manager for the Concrete Pipe Division, and VP of Trading for Europe, Middle East, Africa and Asia, based in Madrid, Spain. He has extensive experience in the building materials industry, especially in fields such as general management, logistics operations, international commerce and post-merger integrations.Mr. Aguilera Mendoza holds an MBA with a Major in Operations from the Kellogg Graduate School of Management of Northwestern University, and a B.Sc. in Mechanical and Industrial Engineering from the Monterrey Institute of Technology, Mexico.

José Luis Seijo González – Managing Director José Luis Seijo González was appointed Managing Director of the TCL Group effective May 20, 2016. Prior to this, he held the position of Chief Executive Officer of the TCL Group from May 4, 2015. He has had many years of experience in the cement industry, having worked in several key cross postings at CEMEX. The most recent posting, before taking up his


ABOUT OUR BOARD OF DIRECTORS

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appointment at TCL, was that of Head - Strategic and Financial Planning for Spain and the Mediterranean region. Mr. Seijo González joined CEMEX in 1999, initially in the area of production before moving to strategic planning at the company’s operations in Spain. His vast experience incorporates assignments in Mexico in corporate strategic planning, in Israel as Chief Financial Officer, in Bangladesh as Chief Executive Officer and in Latvia, also as Chief Executive Officer. He holds a B.Sc. in Mechanical Engineering with a Master’s Degree in Finance from the University of Bath, United Kingdom.

Alejandro Ramirez Cantu – Non-Executive Director Alejandro Ramirez Cantu was appointed to the Board in October 2012. He is the Country Director of CEMEX, Costa Rica.Mr. Ramirez Cantu joined CEMEX in July 2000 and has held positions in various areas including Strategic Planning Director and Projects Director at CEMEX Central, Planning Vice President of the Philippines and Asia, Country Manager (Thailand), Vice President of Planning (Venezuela), Vice President of Strategic Projects (South America and the Caribbean), Director of Corporate Affairs (Americas) and Country Director of CEMEX Puerto Rico. In August 2014, he was appointed Acting CEO of the TCL Group, a position he held until April 2015.Mr. Ramirez Cantu has extensive experience in the management of business units as well as development and implementation of operating and corporate strategies. He holds an MBA with a Major in Finance from the Wharton School of the University of Pennsylvania and a B.Sc. in Industrial and Systems Engineering from the Monterrey Institute of Technology, Mexico.

Jean Michel Allard – Non-Executive Director Jean Michel Allard was appointed to the Board in March 2012. He is an Independent Expert in the cement industry and a Senior Advisor to the IFC (World Bank). Mr. Allard gained extensive experience during his 42-year tenure with the Vicat Group, an international cement organization. He served as the Deputy Chief Executive Officer for 22 years and as a member of the Board during the period 1983 to 2009. Prior to these appointments, he has held several managerial positions within the company. Mr. Allard’s other ancillary assignments included membership on the Board of Directors of Syndicat Français de l’Industrie Cimentière and Chairman of the National Commission on Safety for the French Cement Profession. In January 2012, Mr. Allard was nominated “Officer of the Legion of Honneur” by the President of the French Republic. Mr. Allard is a member of the Board of Directors of National Cement Cie Limited – DEVKI Group – Kenya.

Nigel Edwards – Non-Executive Director Nigel Edwards was appointed to the Board in August 2014. He is the Vice President – Finance at the Trinidad and Tobago Unit Trust Corporation. Mr. Edwards began his career at the Ministry of Finance in 1993 where he worked on several areas of government policy in relation to financial services. In his early career, he worked on originating global equity transactions from emerging markets for an international merchant bank in London. He later spent over fifteen years working in various areas of the financial services sector of the ANSA McAL

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Group of Companies and has worked in the areas of investment banking, corporate finance, structured lending, investment management as well as accounting and finance before moving on to be the Chief Executive of the ANSA McAL Group’s life insurance subsidiary. He has been involved in several advisory mandates for mergers and acquisitions, corporate restructuring and equity issuance. Mr. Edwards graduated from the University of the West Indies, St. Augustine, with a B.Sc. degree in Management Studies and subsequently attained an M.Sc. in Finance from the London Business School.

Alison Lewis – Non-Executive Director Alison Lewis was appointed to the Board in August 2014. She is a former Public Servant who served for over twenty-nine years in the Ministry of Finance and rose to the position of Permanent Secretary of that Ministry, a position that she held for eleven years. She has served as a member of a number of Boards of Directors including the Boards of the Central Bank of Trinidad and Tobago, the Trinidad and Tobago Securities and Exchange Commission, the Trinidad and Tobago Unit Trust Corporation and the Heritage and Stabilization Fund. Ms. Lewis is on the Board of Republic Bank Limited and is a member of the Economic Development Advisory Board. During the period 2001 to 2003, Ms. Lewis served as advisor to the Executive Director at the World Bank in Washington, D.C. returning home in 2003 shortly before being appointed Permanent Secretary. Ms. Lewis holds a Bachelor of Arts in Economics and Management from the University of the West Indies (UWI), St. Augustine and became a distinguished awardee on the occasion of the UWI Alumni’s 25th anniversary. In addition, Ms. Lewis is the holder of the Public Service Medal of Merit (Gold) for outstanding and meritorious service to Trinidad & Tobago.

Ruben McSween – Non-Executive DirectorRuben McSween was appointed to the Board in July 2015. He has been serving as Founder/President of Eve Financial Services Limited since February 2012. Effective February 1, 2016 Mr. Mc Sween was elected as the Deputy Chairman of the National Insurance Board of Trinidad and Tobago.Mr. McSween has over thirty-four years’ experience in the local and international financial services sector having held senior positions in areas such as investments, operations and business development including the position of Vice President, Customer Service at the Trinidad and Tobago Unit Trust Corporation (“UTC”). He is currently a Director and Executive Committee Member of the Employers’ Consultative Association (“ECA”); Director - Caribbean Employers’ Confederation; Director – UTC; and Alternative Member - Registration and Recognition Board. Mr. McSween has been a past Chairman of the ECA; President - Rotary Club of Central POS, President - United Nations of Trinidad and Tobago and Chairman - Beetham Gardens Organising Committee.


ABOUT OUR BOARD OF DIRECTORS (C’TD.)

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Ruben McSween holds a B.Sc. in Finance (1st Class Honours), B.Sc. in Accounting (2nd Class Honours) from Southeastern University and an MBA from Howard University in Washington, D.C. In 1984, he was one of thirty outstanding students throughout the USA who was granted a one-year scholarship to understudy the American System of Government and Politics.

Bryan Ramsumair – Non-Executive DirectorBryan Ramsumair was appointed to the Board in July, 2015. He began his career with RBTT Merchant Bank and was involved in the origination, structuring and transaction execution for over US$2 billion transactions, involving sovereign debt issues, real estate and energy project financing, corporate bond issues, and equity capital market transactions. Mr. Ramsumair subsequently formed a corporate finance boutique, which was later sold to a large regional Caribbean conglomerate after consummating US$150 million in transactions in its first two years of operation.Mr. Ramsumair was Chief Financial Officer of Trinity Exploration and Production between 2011 and 2015 and was part of a team which took the company public in 2013 on the Alternative Investment Market of the London Stock Exchange, where it was nominated for AIM Deal of the Year 2014. In that time, he also assisted Trinity in raising US$58 million in debt financing and was involved in M&A deals valued over US$110 million. Mr. Ramsumair is currently the Chief Financial Officer of DeNovo Energy Limited, an independent upstream oil and gas company located in Trinidad and Tobago, pursuing opportunities related to the exploitation of stranded oil and gas reserves.Mr. Ramsumair holds an honours degree in Business Administration and an MBA from the Richard Ivey School of Business, Western University.

Arun K. Goyal – Non-Executive DirectorArun K. Goyal was appointed to the Board of Trinidad Cement Limited in December, 2015.A long-standing member of the TCL Group, Mr. Goyal has held several instrumental roles including that of General Manager of Trinidad Cement Limited & Caribbean Cement Company Ltd, Group Manufacturing Development Manager and Director on the Board of Readymix (W.I.) Limited.Prior to his appointment as General Manager in 1995, Mr. Goyal, a Chemical Engineer, also served in the capacity of Operations Manager, Senior Process Engineer and Assistant Operations Manager at TCL; Process Engineer at Guyana Mining Enterprise Ltd, Guyana and Industrial Gases Ltd, Trinidad.Mr. Goyal has been past member of the Board of Directors of APCAC – Association of Cement Manufacturers of Central America, Caribbean and Latin America, FICEM (Federación Interamericana del Cemento), South Trinidad Chamber of Industry & Commerce and Rotary Club of Pointe-a-Pierre. Mr. Goyal is a Fellow of the Association of Professional Engineers of Trinidad and Tobago and recipient of its Career of Excellence Award in 2009.

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The TCL Group recognises that a robust corporate governance system redounds to the overall benefit of the organisation by fostering better performance and by facilitating a lower risk of malfeasance as well as a lower cost of capital. Based on the guiding principles of fairness, transparency and accountability, the Company strives to maintain a high standard of corporate governance through the establishment of a comprehensive and efficient framework of policies, procedures and systems and the promotion of a responsible corporate culture throughout the Group. The TCL Group is committed to adhering to the principles and practices of good corporate governance and the Governance Committee, a sub-committee of the Board, establishes the foundations for compliance.

GOVERNANCE COMMITTEEThe responsibilities of the Governance Committee include, but are not limited to the following:

1. Recommending all remuneration for directors and the Chairperson;2. Recommending and monitoring the level and structure of remuneration for Senior

Management;3. Establishing the policy for determining remuneration;4. Reviewing and evaluating the appropriateness of remuneration plans on an annual

basis;5. Ensuring that the total remuneration and other benefits paid to directors are properly

disclosed.Members: Ms. Alison Lewis (Chair) Mr. Francisco Aguilera Mendoza (Member) Mr. Nigel Edwards (Member) Mr. José Luis Seijo González (Managing Director) Ms. Kathryna Baptiste (Recording Secretary)

The role of the Corporate Governance Committee is reflected on the Company’s Website – www.tclgroup.com

AUDIT COMMITTEEThe Audit Committee is a Sub-committee of the Board charged with the responsibility for:

1. Appointment and ongoing assessment of the External Auditors;2. Reviewing and advising the Board on the integrity of financial statements;3. Oversight of the establishment, implementation and assessment of the Risk

Management Function;4. Ensuring that an effective system of internal controls is established and maintained;5. Assessing compliance with applicable laws and regulations; and 6. Monitoring and assessing the internal audit function.


CORPORATE GOVERNANCE

17

Members: Mr. Nigel Edwards (Chairman) Mr. Jean Michel Allard (Member) Ms. Alison Lewis (Member) Mr. Gewan Armoogam (Recording Secretary)

FINANCE COMMITTEEThe objectives of the Board Finance Committee are two-fold:

1. To enhance the financial strength and shareholder value of the TCL Group by providing guidance and recommendations on issues which have a major financial impact on the TCL Group; and

2. To enhance communication and understanding between TCL Group’s management and the Board on financial matters.

A summary of the unofficial terms of reference of the Finance Committee follows:1. Review all significant issues of a financial nature before they are presented for

consideration to the Board;2. Review the adequacy and sourcing of working capital for the TCL Group;3. Evaluate and recommend proposals for the ongoing long-term financing of the TCL

Group;4. Examine and/or develop proposals for reducing the tax obligation of the TCL Group

and the efficient management of its tax affairs;5. Review annual budgets and five-year plans for the TCL Group before submission

for approval to the Board;6. Examine and/or develop solutions for problems of a financial nature arising from

changes in accounting standards, tax regulations and governmental legislation;7. Develop a set of financial objectives for the TCL Group; and8. Determine the appropriate capital structure for the TCL Group.

Members: Mr. Alejandro Ramirez Cantu (Chairman) Mr. Nigel Edwards (Member) Mr. Luis Gilberto Ali Moya (Group Finance Manager) Mr. Osben Cuffie (Recording Secretary)

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HUMAN RESOURCE COMMITTEEThe members of the Human Resource Committee were appointed at a Board meeting which was held on January 22, 2015. In order to ensure excellence in TCL Group’s human capital and cultural initiatives, the Human Resource Committee’s strategic direction and vision are aligned to the Company’s strategic plan. The following categories of policies are administered by the Human Resource Committee:

• Talent acquisition • Organisation capacity building • Performance management• Executive development• Organisational structure and design • Employee wellness

A summary of the Terms of Reference of the Human Resource Committee follows:1. To formulate policies for the TCL Group’s Human Resource Management function

and to make recommendations to the Board for approval and adoption;2. To review, approve and ensure compliance with existing administrative policies

and recommend to the Board the adoption of proposals for all senior managers and executives across the TCL Group;

3. To ensure that the TCL Group Human Resource function provides efficient services to all Business Units, utilising equitable, transparent and contemporary performance management measures and systems; and

4. To act autonomously and approve on its own account, specific human capital initiatives and recommendations that fall within the overall ambit of pre-existing Board approved policies and systems.

Members: Ms. Alison Lewis (Chair) Mr. Nigel Edwards (Member) Mr. José Luis Seijo González (Managing Director) Ms. Bonnie Alexis (Human Resource Manager/Group Coordinator)


CORPORATE GOVERNANCE (C’TD.)

19

GROUP CHAIRMAN’S REVIEW

CAPITALISING THE OPPORTUNITIES – BUILDING STRENGTH 2016 was for us another year of key achievements in spite of harsh economic realities. Some of the significant factors that characterise the year in review were successful restructuring, capital investments in our people and plants, healthy cash flows, dividends for shareholders after seven years and a takeover offer by CEMEX. Announcement of the latter in December of 2016 and its eventual realisation in the ensuing month was, however, by far the most significant and timely – opening a broad range of opportunities for the Group’s competitiveness, financial strength and sustainability.

CEMEX TAKEOVERCEMEX now owns *69.83% of TCL. On December 5, 2016, Sierra Trading, a wholly owned direct subsidiary of CEMEX Espana, S.A., which in turn is a 99.88% owned indirect subsidiary of CEMEX, S.A.B. de C.V., issued a takeover bid to acquire up to 132,616,942 ordinary shares in Trinidad Cement Limited at a price of TT$4.50 per ordinary share. Later, on December 23, shareholders were advised by the TCL Board to reject the offer based on a Fairness Opinion by Ernst & Young, which stated that the offer was not fair, from a financial point of view, to the shareholders of TCL. On January 9, 2017, CEMEX revised its offer price to TT$5.07 per share with the option for shareholders to be paid in US dollars at US$0.76 per share. Despite another recommendation to reject the offer by a special committee of the TCL Board, again based on an Ernst & Young Fairness Opinion, the revised offer received overwhelming response, taking the CEMEX shareholding in TCL from 39.5% to *69.83%, just short of its initial target of 74.9%.


Wilfred Espinet Chairman

*Subject to final confirmation by the TTSE.

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Already, TCL’s acquisition by its largest and enduring shareholder has begun to deliver wide-ranging improvements in its operations, largely facilitated and advanced by the groundwork achieved through the Technical and Managerial Services Agreement entered into with CEMEX back in 2015. Note: In March of 2017, TCL issued an offer to acquire all of the outstanding minority shares (28.9%) in Readymix (West Indies) Limited at TT$11.00/US$1.62 per share. The offer will close on May 1, 2017.

CORPORATE RESTRUCTURINGOver the last two years, we have been reorganising our operations across the Caribbean for optimisation, by flattening the corporate structure and simplifying the way that business is conducted. Some of these initiatives so far, include:• Delisting of shares from the stock exchanges. In January of 2016, TCL delisted from the

Guyana Stock Exchange. In March of the same year, from the Eastern Caribbean Stock Exchange and more recently, in March of 2017, the Stock Exchanges of Barbados and Jamaica. Minimal volumes and frequency of trades in those jurisdictions also accounted for the move.

• Liquidation of TCL Service Limited and de-registration of TCL Service and TCL Leasing as reporting issuers with the Trinidad and Tobago Stock Exchange.

• Shifting TCL Trading from Anguilla to Barbados by incorporation of TTLI Trading Limited in Barbados.

• Amalgamation of Premix & Precast Concrete Inc. and Arawak Cement Company Limited in Barbados – in progress.

• Amalgamation of Caribbean Cement Company Limited with Jamaica Gypsum and Quarries and CGC – in progress.

FINANCIAL PERFORMANCE Overall, the Group generated TT$1.9 billion of revenue during 2016, an 11% decrease compared to 2015 — a direct consequence of a contracted construction sector exacerbated by the severe economic conditions. The last quarter results were significantly impacted by these factors in the Trinidad and Tobago market, however, increased cement sales in Jamaica provided some buoyancy.Our adjusted EBITDA for 2016 was TT$464.2 million. During the year, the Group absorbed a number of one-time charges amounting to TT$140 million, the outcome of which was an after tax profit of TT$52.4 million, representing TT$0.10 earnings per share. We are encouraged that the Group generated very healthy cash flows of TT$530.8 million from operations during 2016. This allowed (1) scheduled loan payments totalling TT$193 million and a prepayment of TT$67.3 million, reducing the loan balance to TT$968.5 million and resulting in a 27% reduction in net interest expense from TT$151.8 million to TT$110.9 million and (2) capital expenditure investments of TT$200.5 million across our plants in Trinidad and Tobago, Jamaica and Barbados.


GROUP CHAIRMAN’S REVIEW (C’TD.)

21

STRATEGIC PRIORITIES AND OUTLOOKConstruction activity in the region is expected to remain slow throughout 2017 and to be further compounded by increasing competition. We see these as well as all of today’s challenges as tremendous opportunities and are confronting them with immense confidence and a sound strategic approach. The Board remains confident of the Group’s future viability and believes that the restructuring initiatives completed so far position the Group on the right path for the creation of long-term value for all stakeholders. To help ensure this, we have expanded and strengthened collaboration within and throughout the company and raised our corporate culture, maintaining our identity as “TCL” with the strategic priorities of Health, Safety and Environment, customer centricity, the pursuit and growth of new and existing markets, continuous employee development, financial stability, a relentless focus on operational and restructuring programs and sustainable business. All of this will ideally position us to continue shaping the future of the Group and the region’s construction sector against a changing cement/concrete landscape.

BOARD CHANGESJosé Luis Seijo González was appointed to the Board of Directors in May of 2016, replacing Emilio Saenz Arroniz. José Bavaro Vallone and Christopher Dehring also resigned from the Board in 2016 and Wayne Yip Choy in February of 2017. I wish to thank our former Board members for their invaluable contributions and service to the Group.

ACKNOWLEDGEMENTSThanks to my fellow Directors who continue to add value and uphold good corporate governance. I also wish to acknowledge the efforts of the management team ably led by Managing Director, José Luis Seijo González, who continues to embody the Company’s vision with passion and his strong leadership skills. I would also like to acknowledge and congratulate our employee body and representative trade unions for their enthusiasm and commitment. My special gratitude to all loyal distributors, customers and end users, even more so now that you have choices, yet continue to place your confidence in our brands. I am also appreciative of our communities with whom we share good relations. I wish to recognise the wider CEMEX Group and all our shareholders who have invested in this company. You are helping us to create even greater value, and for this, I would like to express my sincerest thanks. As stakeholders in the TCL Group, you have all placed your confidence in the company. We are driven by your support and truly gratified by your individual contributions. Together, we are building a stronger company for many generations to come. i

Wilfred EspinetGroup Chairman

22

23

GROUP EXECUTIVE COMMITTEETCL GROUP – ANNUAL REPORT 2016

Peter Donkersloot Ponce - General Manager, Caribbean Cement Company Limited; Manuel Toro - General Manager, Arawak Cement Company Limited

Kathryna Baptiste - Group Manager Legal/ Company Secretary; Andres Peña - General Manager, Readymix (West Indies) Limited; Jinda Maharaj - General Manager, Trinidad Cement Limited; José Luis Seijo González - Managing Director, TCL Group

Ricardo García Viani - Group Strategic Planning Manager; Luis Gilberto Ali Moya - Group Finance Manager; Miguel Roberto Estrada - Group Operations Manager; Egwin Daniel - General Manager, International Business & Marketing

Juan Carlos Mendoza - Group Procurement Manager; Bonnie Alexis - Human Resource Manager and Group Coordinator, Trinidad Cement Limited; Roger Ramdwar - General Manager, TCL Packaging Limited and TCL Ponsa Manufacturing Limited

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José Luis Seijo González – Managing Director, TCL GroupJosé Luis Seijo González, was appointed Managing Director of the TCL Group effective May 20, 2016. Prior to this, he held the position of Chief Executive Officer of the TCL Group, from May 4, 2015. He has had many years of experience in the cement industry, having worked in several key cross postings at CEMEX. The most recent posting, before taking up his appointment at TCL, was that of Head - Strategic and Financial Planning for Spain and the Mediterranean region. Mr. Seijo González joined CEMEX in 1999, initially in the area of production before moving to strategic planning at the company’s operations in Spain. His vast experience incorporates assignments in Mexico in corporate strategic planning, in Israel as Chief Financial Officer, in Bangladesh as Chief Executive Officer and in Latvia, also as Chief Executive Officer. He holds a B.Sc. in Mechanical Engineering with a Master’s Degree in Finance from the University of Bath, United Kingdom.

Jinda Maharaj - General Manager, Trinidad Cement LimitedJinda Maharaj is the General Manager at Trinidad Cement Limited. He possesses a wealth of knowledge and experience, having been with the TCL Group for over twenty five years. He has held various positions throughout the Group, including Engineering Services Manager, Materials Manager, Production Manager, Operations Manager (all at Trinidad Cement Limited) as well as General Manager and Operations Manager at Arawak Cement Company Limited, Operations Manager at Caribbean Cement Company Limited, Group Energy Optimization Manager and Group Manufacturing and Development Manager.Mr. Maharaj holds a B.Sc. in Mechanical Engineering and an M.Sc. in Production Engineering and Management, both from The University of the West Indies, St. Augustine.

Peter Donkersloot Ponce - General Manager, Caribbean Cement Company Limited Peter Donkersloot Ponce was appointed General Manager of Caribbean Cement Company Limited effective November 7, 2016. Mr. Donkersloot Ponce has over eleven years’ working experience in the Cement Industry, holding key positions in five different countries (Jamaica, Panama, Peru, El Salvador and Guatemala). His experience ranges in Commercial Operations, Logistics, Risk Assessment, Management Strategic Planning and General Management. Mr. Donkersloot Ponce holds a Global Masters of Business Administration (MBA) from the Thunderbird School of Global Management along with professional qualifications in Industrial Engineering from the Monterrey Institute of Technology (ITESM), Mexico. He is fluent in both Spanish and English.

Manuel Toro - General Manager, Arawak Cement Company Limited Prior to joining the TCL Group as General Manager of Arawak Cement Company Limited on January 1, 2016, Manuel Toro held several key positions in CEMEX, including Procurement Director - Central America, South America and the Caribbean; Innovation and Business Development Director and Strategic Planning Director.


ABOUT OUR GROUP EXECUTIVE COMMITTEE

25

Mr. Toro is a Mechanical Engineer with significant experience in the fields of strategy, leadership, sustainability, innovation and negotiation. His academic achievements include a Master of Business Administration (MBA) degree, in which he specialised in finance, innovation and technology. He also holds certification in executive training from Stanford University, INSEAD and Babson College.

Roger Ramdwar - General Manager, TCL Packaging Limited and TCL Ponsa Manufacturing Limited Roger Ramdwar joined the TCL Group in April 2006 in the capacity of Group Internal Auditor. In February 2016, he assumed the position of General Manager of TCL Packaging Limited and TCL Ponsa Manufacturing Limited. Mr. Ramdwar has over twenty years of combined finance, internal and external audit experience, of which eleven years have been at the TCL Group. In January 2013, he graduated with distinction from the Arthur Lok Jack Graduate School of Business with an Executive MBA. He is an FCCA, a Member of the Institute of Internal Auditors and a member of ICATT. Mr. Ramdwar is also a Certified Fraud Examiner.

Andres Peña - General Manager, Readymix (West Indies) LimitedAndres Peña assumed the position of General Manager at Readymix (West Indies) Limited (RML) on May 4, 2015. Prior to that, he was the Group Strategy Implementation Manager of the TCL Group. Before joining the TCL Group, he served as Regional and Export Manager at Corpacero, a leading steel company in Colombia. Mr. Peña has over eighteen years’ experience in sales and business development, twelve of which were spent in the cement industry. During his career, he has developed a passion for capturing new markets and possesses a deep understanding of the Latin American construction industry, attributes which are undoubtedly beneficial to the Group. Mr. Peña holds a Business Administration Degree from the University of Texas at Arlington and a Marketing Graduate Degree from the Universidad del Norte in Barranquilla, Colombia.

Egwin Daniel - General Manager, International Business and Marketing Egwin Daniel joined the Company in October, 2006. He has extensive International Marketing and Financial experience having worked in these fields in Canada, USA and throughout the Caribbean for twenty-one years, seven of which were spent abroad in the French and Spanish Caribbean, working in the private sector providing Senior Management expertise in the International Money Markets and Distribution. Mr. Daniel holds an MBA from the University of Concordia, Canada and a B.Sc. from Mc Gill University, Canada.

Kathryna Baptiste - Group Manager Legal/ Company Secretary Kathryna Baptiste joined the Company in September, 2012. She is an Attorney-at-Law with over twenty years’ experience in various facets, including corporate, commercial and

26

employment Law. Prior to joining the Company, Ms. Baptiste was the Manager Legal/Company Secretary at Trinidad and Tobago National Petroleum Marketing Company Limited from October 2005 to April 2010 and conducted private practice in the areas of corporate and commercial law from June 2010 to August 2012. Ms. Baptiste obtained a Bachelor of Laws (LL.B) (Honours) Degree from the University of the West Indies and a Legal Education Certificate (LEC) from the Hugh Wooding Law School, St. Augustine, Trinidad. She also holds an Executive Masters of Business Administration (Distinction) Degree from the Arthur Lok Jack Graduate School of Business, Trinidad (EMBA Class Valedictorian, 2011). Ms. Baptiste is a member of the Law Association of Trinidad and Tobago, the Association of Caribbean Corporate Counsel and the Caribbean Corporate Governance Institute.

Bonnie Alexis - Human Resource Manager and Group Coordinator, Trinidad Cement Limited Bonnie Alexis joined TCL in January 2014 as the HR Business Partner and was promoted to Industrial Relations Manager in 2015. In August 2016, she was elevated to the position of Human Resource Manager/Group Coordinator. While Ms. Alexis’ human resource background is rooted in industrial relations, she has developed a broad knowledge base that has allowed her to successfully practice as a generalist, accredited to her twenty-five years of professional life. Before joining TCL, she served as an executive member of a prominent trade union in Trinidad and Tobago and has held the position of Industrial Relations Officer/Manager in state and private enterprises. Ms. Alexis is a member of the Human Resource Management Association of Trinidad and Tobago (HRMATT) and graduated from Cipriani College of Labour and Co-operative Studies (Trinidad and Tobago) and the National Labour College (USA). She also holds an advanced Diploma in Labour Laws and obtained a post graduate certification in Change Management (PROSCI).Additionally, Ms. Alexis is professionally trained using different methodologies to conduct job evaluation exercises.

Luis Gilberto Ali Moya - Group Finance Manager Luis Gilberto Ali Moya was appointed as the Group Finance Manager, effective January 1, 2016. Prior to joining the TCL Group, Mr. Ali Moya served in the positions of: Financial and Cost Analyst (CEMEX, Venezuela); Business Process Coordinator (D.H.L, Costa Rica); and most recently, as Business Service Organization Manager (CEMEX, Costa Rica). Mr. Ali Moya earned his Bachelor of Accounting degree from the Universidad Católica “Andres Bello” in Caracas, Venezuela (1997). He then went on to attain a Master of Business Administration degree from the Universidad Latinoamericana de Ciencia y Tecnología in San Jose, Costa Rica (2009).


ABOUT OUR GROUP EXECUTIVE COMMITTEE (C’TD.)

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Miguel Roberto Estrada - Group Operations Manager Miguel Roberto Estrada was appointed as the Group Operations Manager on May 4, 2016. He has spent his entire professional life of twenty-eight years in the cement industry, specifically in the area of plant operations. Before joining the TCL Group, Mr. Estrada was based in Colombia and held the position of Optimisation Director at CEMEX South America providing technical assistance to CEMEX’s plants in the region. Previously, he was Vice President of Operations at CEMEX Philippines, responsible for the two cement plants in the country as well as technical direction for CEMEX Bangladesh and CEMEX Thailand. Mr. Estrada also worked at CEMEX Egypt as Vice President of Operations at the Assiut Cement Plant, the largest production unit of CEMEX worldwide. His career started at CEMEX Colombia. Mr. Estrada graduated from the Universidad Tecnológica de Pereira, Colombia in 1986 as a Mechanical Engineer.

Ricardo García Viani - Group Strategic Planning Manager Ricardo García Viani was appointed TCL Group Strategic Planning Manager with effect from May 4, 2015. He has over twelve years of practical experience in Corporate Strategy, Business Development, Financial Planning and Marketing Strategy. Among his past positions are Corporate Strategic Planning Manager at CEMEX’s corporate offices in Madrid, covering all CEMEX geographies, and Strategic Marketing Manager at CEMEX Venezuela for South and Central America and the Caribbean.Mr. García Viani graduated -Cumlaude- in Industrial Engineering from the Universidad Católica Andrés Bello (Caracas, Venezuela). He was also winner of the ‘Juris Vitol’s Award 2001’ for best curriculum among all University Class. Mr. García Viani holds an MBA from Columbia University (New York, USA) and a Luxury Management Diploma from the IE Business School (Madrid, Spain).

Juan Carlos Mendoza - Group Procurement ManagerJuan Carlos Mendoza was appointed as the TCL Group Procurement Manager on May 4, 2015. He has thirty-four years’ experience in the mining and cement industry, with particular focus on procurement, negotiations and inventories management. His most recent position, prior taking up an appointment at TCL, was as Procurement Manager (CEMEX) in Miami, Florida.Mr. Mendoza joined CEMEX on July 22, 1982. During his tenure, he was involved in Post-Merger Integration (PMI) in Australia and the USA, as well as Due Diligence (DD) in India, Gabon among other countries. He has held several positions at CEMEX including, Supply Planning Manager, Mexam Trade (Texas); Procurement Manager (Texas) and Manager: Purchases and Materials/Stock (Venezuela).Mr. Mendoza’s key areas of expertise include: Customs Law, Shipping Insurance, Material Coding and Classification as well as International Business.

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INTRODUCTIONIn 2016, we made significant strides towards “Building a Brighter Future” for all our stakeholders, as our employees remained focused on the task at hand in advancing our strategic priorities.Health, Safety and Environment remained paramount, as we pursued increased op-erational efficiencies and effectiveness through continued investment in our em-ployee training programmes and plant upgrades at all our manufacturing locations. In addition, we continued to improve and standardise our operational systems and procedures.2016 came with many challenges – in particular, a heightened competitive environ-ment in the region, with several of our traditional markets remaining either ‘flat’ or experiencing negative growth. However, our employees continued to rise to the oc-casion, keeping our customers’ needs and expectations at the forefront.Notwithstanding the headwinds faced, we were able to maintain a profitable financial position in 2016 and significantly strengthened our balance sheet as at the end of the year.

MANAGING DIRECTOR’S REPORT & MANAGEMENT DISCUSSION 2016


José Luis Seijo GonzálezManaging Director

29

1.0 HEALTH, SAFETY AND ENVIRONMENT (HSE) Occupational Safety and HealthIn 2016, the Group recorded a 37.5% reduction in the total number of Lost Time Injuries (LTIs) when compared with the level for 2015. TCL Packaging Limited (TPL), TCL Ponsa Manufac-turing Limited (TPM) and TCL Guyana Inc. (TGI) achieved another consecutive year without an LTI among all categories of workers, with TPM setting a group record of nine consecutive years without an LTI, TGI at approximately nine consecutive years and TPL at eight consecu-tive years. The Group’s thrust in 2016 was on ensuring safe systems and places of work. Projects in-cluded: internal and external refurbishment of buildings and plant structures, clear demar-cation of pedestrian versus vehicular or equipment routes, improvement of enclosed work-ing environments through installation of large industrial fans and effective lighting. Proper housekeeping was emphasised and reported on weekly, to maintain orderly placement and storage of items and materials and a clean and clear working environment. Lock-out Tag-out (LOTO) and other safe systems of work were reviewed and improved. Other improvements were implemented based on a visit to the TCL Group by the CEMEX H&S Advisor.To foster a positive safety culture, all companies held ‘safety talks’, and provided OSH train-ing for all workers onsite. In addition, safety training was extended beyond our companies, as a session on ‘Working Safely with Cement and Concrete’ was held in Grenada for a wide cross-section of users and traders of cement and concrete, inclusive of masons and opera-tors of ready-mix concrete plants.

Environmental ManagementThe ISO 14001:2004 EMS-certified companies – Trinidad Cement Limited (TCL), Caribbean Cement Company Limited (CCCL), Arawak Cement Company Limited (ACCL) and TGI – suc-cessfully completed their respective system audits and were all recommended for continued certification. Companies successfully completed various environmental improvement proj-ects; e.g. ACCL completed the upgrade of one chamber of its Electrostatic Precipitator and it is expected that this will result in significant improvements in stack emissions; TGI completed the installation of a cement return system which will result in reduced fugitive dust. Com-panies are preparing to revise their systems to comply with the 2015 version of ISO 14001.

2.0 FINANCIAL REVIEW AND ANALYSISReview of 2016The Group continued to roll out its restructuring and efficiency initiatives in 2016. We also invested $200.5 million in capital expenditure in our plants across the region during the year. In Q2 2016 we completed a comprehensive review of inventory and wrote down $72 million of overstocked items. In Q3 2016, we undertook extensive work on our plants in Jamaica and Trinidad and Tobago, which resulted in scheduled plant maintenance shutdowns of eight weeks in Jamaica and seven weeks in Trinidad.During 2016, the Group repaid $262.1 million of debt including a prepayment of $67 million. The overall reduction in borrowings during 2015 and 2016 has resulted in a 23% reduction in interest payments to $88.8 million in 2016 (2015: $115.7 million).

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The Group’s total revenue of $1.9 billion represents an 11% reduction when compared to 2015. This reduction was mainly due to the economic slowdown in Trinidad and Tobago and the reduction in clinker exports.

RevenueOur third party revenue of $1.9 billion was negatively impacted by a 24% reduction in rev-enue in Trinidad and Tobago due to the continued slowdown in construction activity which was partially offset by a 14% increase in revenue in Jamaica. In Barbados, there was also a 58% decrease in revenue which represented the full year effect of the competitive environ-ment which had commenced in November of 2015. Additionally, revenue from clinker exports decreased due to the expiration of the clinker sale agreement between Venezuela and Ja-maica under the PetroCaribe Agreement. However, the Group’s cement exports remained stable compared with 2015, despite increased competition in the region.There was a 35% decrease in third party revenue in the ready-mix and aggregates business due to the continued slow-down in construction activity in Trinidad and Tobago.

Operating ResultsThe Operating Profits of the year of $224.4 million was $221.9 million less than the prior year. One-off expenses contributed $140 million to this reduction. The major one-off expenses were:• $44.5 million from manpower restructuring exercises;• $72 million in respect of overstocked spares which exceed the foreseeable operating

requirements of the Group;• $7 million in relation to obsolete inventory items; and• $16.7 million based on a revision of the estimated life of installed refractory material.Operating results including only recurrent expenditure reduced by $124.1 million and depre-ciation increased by $12.4 million.

Net Finance CostsNet finance cost reduced by 18%, a $29.2 million reduction when compared to 2015. This re-duction was largely due to a 27% reduction in net interest and related costs to $110.9 million (2015: $151.8 million). The reduced interest cost reflects the annualised effect of the reduc-tion of total borrowings achieved in the financial restructuring of 2015 and subsequent debt repayments. Interest savings were offset by an 86.6% increase in foreign currency exchange losses due to unrealised losses on translation of US Dollar denominated debt.

Liquidity & Financial PositionWe generated $530.8 million in cash from Operations in 2016 (2015: $633 million). In 2016, we continued to invest in capital expenditure to a level of $200.5 million, a 70% increase over our 2015 level. We also made prepayments of $67.3 million in addition to scheduled repay-ments of $193.8 million on borrowings. As at December 31, 2016, total Group borrowings

MANAGING DIRECTOR’S REPORT & MANAGEMENT DISCUSSION 2016 (C’TD.)


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were reduced to $968.5 million ($1.2 billion as at December 31, 2015). We have therefore reduced total borrowings to almost half (53%) of the $1.8 billion balance as at December 31, 2014.The continuation of our rigorous working capital management programme further enhanced working capital at the end of year by $23.9 million.

SUMMARY FINANCIAL PERFORMANCEThe Group achieved profits of $52.4 million in 2016 (2015: $428.8 million) and an EPS of $0.10 despite heightened challenging market and economic conditions. We have continued to critically analyze our operations and implement appropriate actions to secure the strength and prosperity of all stakeholders of the Group. Some of those decisions necessitated addi-tional one-off expenses of $140 million in 2016 which will serve to make us more competitive in 2017 and beyond.It should also be noted that non-recurrent refinancing gains of $205.8 million in 2015 were recognised in the reported profit for that year.Group revenues for 2016 of $1.9 billion (2015: $2.1 billion) were achieved despite the ad-verse effects of the slowdown in Trinidad and Tobago, the increased competition across the region and the expiration of our clinker agreement in early 2016 with Venezuela. The Group generated a net cash flow of $366.2 million (2015: $469.3 million) from operating activities after payment of interest, tax and pension and post retirement expenses. The Group paid a dividend ($0.04 per share) for the first time since 2007.

3.0 GROUP MARKETINGOur 2016 total cement sales volume experienced a de-crease of 3% when compared to 2015.In Jamaica, CCCL increased its domestic sales vol-ume by 17% over its 2015 level due to growing market demand. Domestic demand was fueled by continued government spending in infrastructural projects, pri-vate developments and retail consumption. Whilst total cement sales increased by 10%, cement export sales were curtailed to 79% of its 2015 export volume as the company had to satisfy the surge of the local demand. Additionally, the Clinker Supply Contract with Venezu-ela came to an end in early 2016.Trinidad and Tobago saw its third consecutive year of negative growth in 2016. Domestic cement demand de-creased by a significant 20% as a consequence of the contraction of the economy and significantly curtailed government spending and increased competition. TCL’s export volume increased by a modest 4% over the 2015 level. However, total cement sales fell by 15%.

Jamaica 41%Trinidad and Tobago 35%Other Countries 22%Barbados 2%

TCL CCCL ACCL

TCL CCCL ACCL

Group 2016 Cement Sales Volume % by Territory

Clinker Production (’000 MT)

Cement Production (’000 MT)

41%

35%

22%

2%

0

200

400

600

800

1000

0

200

400

600

800

1000

20162015

20162015

649597

804761

194161

208206

911808

721840

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In Barbados, ACCL’s domestic volume sales fell by 41% from its 2015 level, largely due to the significant inroads made by the foreign competition and a subdued cement market in 2016. However, ACCL’s export volume increased by 18% as its prime export market in Guyana remained reasonably buoyant and it further satisfied markets in 2016 which were previously supplied from CCCL.In the premixed concrete sector in Trinidad and Tobago, concrete sales volumes by Ready-mix (West Indies) Limited (RML) decreased by 36% from 2015 level as declining activity in the construction sector persisted in 2016. Nonetheless, we were able to maintain our lead-ership position in this sector as RML remained focused on providing its customers with af-fordable high quality concrete solutions and technology together with its reputable level of service. Third party aggregate and pitrun sales remained significant in 2016 despite a 37% decrease from the 2015 volume sold.

4.0 GROUP OPERATIONSClinker / Cement OperationsIn 2016, the main operational focus was the continuation of the improvement measures to bring our cement plants to world class competitive standards. These measures included the following:

Equipment OverhaulsAt CCCL, a major kiln overhaul was undertaken for a duration of 2 months. The cooler was upgraded and a new rotor for the baghouse purchased, as part of the plan to increase the kiln output from 3,000MT/day to 3,500MT/day. The major issue on that plant was blockages in the tower which was also resolved with the installation of over 30 new air blasters and a new high pressure wash system. Civil works for the foundation of the new coal mill have also been completed and mechanical works are in progress to improve the reliability of that circuit.At ACCL, the kiln was also overhauled and the #1 chamber of the precipitator and the cooler were refurbished to improve the kiln performance. Significant work was done to improve the structural integrity of the preheater tower and on the cement mill – a new gear box was installed to improve the reliability of that piece of equipment.Kiln 3 was the major focus at TCL. A major shell change was completed, the kiln re-aligned, the cooler upgraded, the mulita-cyclones refurbished, new instrumentation installed and a new opacity meter installed – thereby allowing this kiln to reliably operate at its name-plate. An overhaul of raw mill 2 in Mayo was also done, to improve slurry production.Significant works were also done at the ports of both ACCL and TCL and are expected to continue on a phased basis. At ACCL, the port structure is at serious risk of failure and remedial works have begun. At TCL, infrastructure works were executed and dredging to the original draft (which had not been done in the last 30 years) has commenced.

At right: Kiln 3 Shell Change at TCL in August 2016



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HousekeepingA clean plant not only works better, but also raises the morale of the people who work in it. The major overhauls executed in 2016 addressed many of the long standing issues in our cement plants that had resulted in poor housekeeping. Those changes, as well as visits to CEMEX plants (which allowed staff to see what the possibilities were) and continued focus, have all brought about steady improvements in housekeeping throughout the Group’s plants. Quarry ManagementSteps for increasing the limestone and gypsum reserves in Jamaica are on stream. Sub-missions have been made with the legal authorities and all approvals are expected to be achieved by May 2017. Datamine was re-introduced to the TCL Group in 2015 and as part of the implementation all TCL Group mining staff were retrained in the new version of the software. The main objectives of the implementation are to improve the usage of the software and create more efficient mine planning systems as well as improving the consistency and reliability of the quality of material from the quarry. This in turn will also lead to improved con-sistency of cement quality. TCL and CCCL have completed the geological mapping of the Limestone Quarry which will be used to create a geological model aimed at increasing the accuracy of the existing block models. All TCL Group mining staff are currently in the process of completing training using Datamine to carry out short term and medium term Mine Plan-ning and preparation of blends.

Materials ManagementConsistent with best practices world-wide, our cement plants have identified the optimal quantity of clinker to be stored on site, thereby avoiding the ageing issues encountered in the past, environmental concerns due to outside storage and consequently reducing the cost for multiple handling of materials. Material balances have also been introduced at the different process stages and tighter process control and instrument calibration implemented. Across the Group, aged clinker inventory was reduced by 20% for 2016.

Cost ManagementCost control has been tightened at all our plants and new reports have been developed and implemented to focus the operational teams on cost from a monthly to a daily basis. Improved planning of maintenance jobs with daily reports as to fuel, electricity, contracts, consumables and human resources usages are now utilised to effectively manage operational costs.

Quality AssuranceLaboratory Proficiency testing with CEMEX has been implemented and will provide additional assurance of the quality of test methods and test results across the Group. The previously implemented MAC tool has been embedded throughout the Group with measurement results being utilised to manage quality performance. Laboratories continue to maintain international certification with TCL and CCCL maintaining ISO 17025 certification whilst ACCL acquired CE Certification in June 2016. Working conditions have been improved through renovated infrastructure, specifically at TCL where the laboratory has undergone a major upgrade of the

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working facilities. At CCCL, improvements to assure blend design before mass stockpiling have been achieved through the placement of an online analyzer on the raw material belt to the storage house.

Mind Set ChangeThere has been continued focus on the people aspect at the cement plants across the Group with the objective of improving employee commitment, loyalty and teamwork. For the past year, visits to plants in other countries have been conducted mostly down to the engineer staff level. In the future, this initiative will be extended to lower worker levels so that these new philosophies and best practices can become well embedded in our cement plants as various staff levels would have witnessed first-hand the operational protocol of world class plants.

Concrete OperationsIn 2016 we achieved some positive results operationally, including trouble free raw mate-rial inputs based on our improved systems of mining, testing and storage. However, during the first half of the year there were challenges with the transverse conveyor at the Guanapo Plant 1, water availability at the Guanapo 2 plant, an adequate dispensing system for BASF admixtures and the loading ramp at Guanapo 2. Those challenges were adequately ad-dressed and rectified during the second part of the year. The further manpower restructuring during the latter part of 2016 required us to face the challenges of working differently and innovatively towards increasing efficiency and effectiveness throughout the operations. At our quarry, we commenced the engineering and acquisition of equipment for the expansion of Plant #1, with an expected completion date by mid 2017.

Packaging OperationsTPL & TPM delivered another year of stellar safety performance, achieving in excess of nine years without a lost time accident. TPL further reduced its selling prices in 2016 to maintain competitiveness in the interna-tional markets. By the end of 2016, the cement plants at CCCL, TCL and ACCL were fully converted to 2ply sacks for the respective local markets, whilst testing is ongoing at TGI for conversion in Q2 2017. Overall improvements were seen in the operational efficiencies of the key pieces of equipment, along with ongoing housekeeping initiatives.TPM saw an increase in sales volumes for both its Jumbo Bags and Slings during 2016. TPM has successfully secured the supply of all CCCL Jumbo Bag requirements and standard-sized one bag type for all cement companies in the group. Slings were successfully tested at CEMEX DR, with an order to be supplied in 2017. A number of productivity initiatives were implemented during the year, resulting in a reduction of the overall cost of production.TPL & TPM are aggressively pursuing supply options in the wider CEMEX Group.



35

5.0 GROUP DEVELOPMENTAL ACTIVITIESThe Group continues to explore and analyze strategic business development opportunities throughout the region to further consolidate and strengthen our value chain propositions and activities: cement, aggregates, ready-mix concrete, precast and retail modes.

Sustainable Road Solutions2016 was a pivotal year for the Group’s concrete road development programme. Significant emphasis has been placed on offering sus-tainable concrete solutions for road construction/rehabilitation to all major stakeholders in the region. The first pilot project was com-pleted successfully in Guyana and served as the launching pad for this new building solution line of business. In Guyana, the first concrete pavement using short slab technology was constructed in the second quarter of 2016 by a local contractor who had received the relevant technical train-ing from CEMEX Panama. Shortly after, the first external project was also completed and the business has gained traction amongst key stakeholders in the road paving construction in Guyana. The next stage is in progress: the strategic and technical support for the govern-ment and contractors in building more durable roads using these sustainable solutions.In Trinidad, a similar strategy was implemented in the last quarter of 2016 using TCL’s internal plant roads as the launching pad with a local contactor for establishing concrete roads. TCL has been working closely with the Ministry of Works and Transport - PURE - to introduce the concrete solutions into its road rehabilitation projects. Officials in the Ministry have been avid observers of the process. Continued partnering and support for alternative designs for roads will be the next step with the Ministry. The aim is to convince the Ministry to include this build-ing solution technology in some portion of its road construction/rehabilitation programme by empirically demonstrating the benefits and durability of these pilot projects. In Barbados, consultation with both the relevant government agency and local entities was the main focal point in 2016. The launching of a pilot concrete road project will follow in 2017.

HousingHousing continues to be a major socio-economic issue for the Caribbean. Most countries have indicated that affordable housing continues to be a challenge, especially to people in the lower income tier. In Trinidad, discussions with the Ministry of Housing have been ongoing with the objective of supporting and filling the gaps in low-cost housing for the country. The TCL Group has been working co-operatively within its business units to provide support in bundled packages for building solutions.The development of RML’s Guanapo housing initiative is at the stage where a proposal is under review.In Guyana, the Minister of Housing has also requested low cost affordable solutions for the lower income families. Discussions have been ongoing primarily with housing contractors who are looking for building solutions and support.

36

Oilwell CementWe cautiously continued market expansion initiatives in Venezuela with additional interested companies. In 2016, our sales volume increased by 41% over the 2015 level.

Regional premixed concrete expansionIn the latter part of 2016, the Group re-established a ready-mix facility in Barbados at its ce-ment plant site in St. Lucy. The requisite skills and resources from both ACCL and RML will be brought to bear on this new operation, earmarked to commence operation during Q1 of 2017.In Guyana, the establishment of a ready-mix facility at TGI’s site in Guyana is in progress and is expected to commence operation in the latter half of 2017. Guyana is currently poised for increased economic and construction activity in the very near future.

6.0 HUMAN CAPITAL / INDUSTRIAL RELATIONSWe remain committed to providing a work environment that fosters the growth and develop-ment of our most valuable asset – our people. In recognition of this, the emphasis continued towards ensuring that our teams were exposed to international and regional training and improvement opportunities. Employees visited various plants in Europe, North and Central America and the Caribbean to have an appreciation for “industry standard” processes and best practices. Practical knowledge from external subject matter experts (SME’s) was also gained while working on projects across the Group’s plants. Among other highlights, the concept of further integration between information technology and HR was explored, which will result in a self-service kiosk to facilitate the tracking of medi-cal claims, pay slips, vacation balances, company policies and certified letters, intended for implementation in 2017. This convenient, technology-driven 24-hour facility will largely improve efficiencies and reduce administrative costs as the company continues to cultivate a superior service-oriented culture by providing benefits to employees that will significantly improve their levels of engagement and promote a sound work/life balance. Restructuring exercises aimed at ensuring improved efficiencies were completed at CCCL (Jamaica), ACCL (Barbados) and RML (Trinidad). A similar focus will continue, where nec-essary, to ensure the Group’s sustainability in the face of economic slowdowns, declining markets and competitive realities that are now evident in our geographic region.

7.0 PUBLIC RELATIONS In our ongoing recognition of the socio economic challenges facing the Caribbean, we re-mained resolute in our duty of building a stronger region. We did this through our many con-tributions to humanitarian causes, offering impactful solutions to key societal issues under the core pillars of youth and education, shelter and the environment. Our business units across the Caribbean from Jamaica in the North to Guyana in the South, were relentless in playing a part in ensuring the well-being of communities. CCCL continued to encourage positive attitudes rather than handouts with its programmes reaching more than 200,000 persons across Jamaica over the last two years. In 2016, its areas of focus



37

included a scholarship program to assist less fortunate students with educational needs and a partnership with the Ministry of Health, training over 100 young people in the prevention and control of the Zika virus. CCCL also assisted in the construction of several infrastructural proj-ects geared towards improving the physical and social environment in various communities and continued to chart the way through its involvement in two main environmental initiatives - International Coastal Cleanup Day and the National Tree Planting Day. ACCL in Barbados maintained healthy relationships with its fence line and national communi-ties and in 2016, adopted the neighbouring Daryll Jordan Secondary School as its main CSR thrust. Under this ongoing partnership, the school and its students have so far benefitted from 25 computers. In Trinidad, TCL continued to support the neighbouring Union Claxton Bay Secondary School, offering afterschool classes tutored by qualified employee volunteers and contribut-ing to infrastructural development at the facility. Readymix (West Indies) Limited offered a similar programme at the Guanapo RC Primary School. Employees of these Trinidad-based companies also came together with TPL and TPM and gave generously to help Haiti after Hurricane Matthew, in a drive that sent non-perishable food, children’s clothing and toiletries to the disaster-stricken island. TCL Guyana Inc. demonstrated its corporate social responsibility by fully equipping the com-puter lab at the nearby St. Stephen’s Primary School and also donated all the cement for rehabilitating the schoolyard, among other donations. Ongoing communication underscored the Group’s commitment to keeping both internal and external stakeholders accurately and timely informed of matters of shareholder interest as well as wide-ranging developments across its business units.

8.0 LOOKING AHEADWe expect that construction activity will remain sluggish during the coming year, particularly in Trinidad and Tobago and Barbados. At the same time, we are seeing increasingly aggres-sive competition in the region and in Trinidad and Tobago in particular. The Group remains confident that we will continue to rise to the challenge as we have already commenced our strategic marketing initiatives throughout the region. We are more competitive due to the ben-efits of our total restructuring programmes which began in mid-2014, as well as our improved and ongoing efficiency programmes.

9.0 CHANGES TO EXECUTIVE MANAGEMENTDuring the year 2016 there were several changes to the TCL Group executive structure and management team.Mr. Manuel Toro was appointed as General Manager, Arawak Cement Company Limited, effective January 1, 2016, replacing Mr. Rupert Greene, who retired effective December 31, 2015.Mr. Luis Gilberto Ali Moya was appointed as Group Finance Manager effective January 4, 2016, replacing Mr. Parasram Heerah, who was previously acting in the position.

38



Mr. Roger Ramdwar was appointed as General Manager, TCL Packaging Limited and TCL Ponsa Manufacturing Limited, effective February 4, 2016, replacing Mr. Derrick Isaac, who resigned effective February 1, 2016.Mr. Gewan Armoogam was appointed as Group Internal Auditor (Ag.), effective February 4, 2016, replacing Mr. Roger Ramdwar upon his appointment to the position of General Man-ager, TCL Packaging Limited and TCL Ponsa Manufacturing Limited. Mr. Armoogam was subsequently confirmed in the position of Group Internal Auditor, effective February 1, 2017.Ms. Bonnie Alexis was appointed to the position of Human Resource Manager/Group Coor-dinator (Ag.) effective July 31, 2016 and was confirmed in the position on December 1, 2016. Ms. Alexis replaced Ms. Sharon Diaz, who resigned on July 31, 2016.Mr. Peter Donkersloot Ponce was appointed to the position of General Manager, Caribbean Cement Company Limited, effective November 7, 2016, replacing Mr. Alejandro Vares Leal, who resigned on November 7, 2016.

10.0 ACKNOWLEDGEMENTSI would like to express my sincere gratitude to our valued shareholders for their continued support in 2016. We have remained steadfast in our mission to build bridges and foster successful relationships with our lenders, shareholders, customers, employees and all our other treasured stakeholders. Heartfelt appreciation is also extended to all the employees of the TCL Group, who with commitment, loyalty, determination and passion have diligently pursued our shared vision of building a brighter future, in the face of change and challeng-ing economic times. Finally, I wish to thank the Group Chairman, Mr. Wilfred Espinet and the other Members of the Board of Directors for their continued support and wise counsel over the past year.

Mr. José Luís Seijo GonzálezManaging Director

39

The directors have pleasure in submitting their Report and the Audited Financial Statements for the year ended December 31, 2016.

Financial Results TT$’000Turnover 1,887,013Net Earnings for the Year 52,422Dividends Paid 15,354

Directors’ Interest (Ordinary Shares of TCL)

Name Position

Direct Holdings at

31-12-16

Indirect Holdings at

31-12-16Wilfred Espinet Chairman 10,285,195 Nil Francisco Aguilera Mendoza Director/Deputy

Chairman Nil Nil José Luis Seijo González Managing Director Nil Nil Alejandro Alberto Ramirez Cantu Director Nil Nil Alison Lewis Director Nil Nil Nigel Edwards Director 16,095 9,332,873Arun K. Goyal Director 336,681 272,798Jean Michel Allard Director Nil Nil Wayne Yip Choy Director 878,556 Nil Bryan Ramsumair Director Nil NilRuben McSween Director Nil 44,671,636

Senior Officers’ Interest (Ordinary Shares of TCL)

Name Position

Direct Holdings at

31-12-16

Indirect Holdings at

31-12-16Jinda Maharaj General Manager, Trinidad Cement

Limited 1,193,107 Nil Egwin Daniel General Manager, International

Business and Marketing 61,609Kathryna Baptiste Group Manager Legal/Company

Secretary 2,172Gewan Armoogam Group Internal Auditor 11,313Roger Ramdwar General Manager, TCL Packaging

and TCL Ponsa Manufacturing 19,693 100,000Peter Donkersloot Ponce General Manager – CCCL Nil Nil Manuel Toro General Manager – ACCL Nil Nil Andres Peña General Manager – RML Nil Nil Luis Gilberto Ali Moya Group Finance Manager Nil Nil Ricardo García Viani Group Strategic Planning Manager Nil NilMiguel Roberto Estrada Group Operations Manager Nil Nil Juan Carlos Mendoza Group Procurement Manager Nil Nil


DIRECTORS’ REPORT

40

DividendsAn interim dividend for the year ended December 31, 2016 of TT$0.04 per share, was paid to shareholders on July 1, 2016.

Substantial Interests

(A substantial interest means a beneficial holding of 5% or more of the issued share capital of the Company).

Holdings at31-12-16

% of Issued Share

Capital at31-12-16

Sierra Trading (CEMEX S.A.B. de C.V.) 147,994,188 39.50%The National Insurance Board of T&T 44,671,636 11.92%Baleno Holdings Inc. 30,750,000 8.21%Republic Bank Limited 25,197,649 6.73%

Service ContractsThere exists a Technical and Managerial Services Agreement dated April 23, 2015 (as amended on October 12, 2015) between CEMEX and TCL, pursuant to which CEMEX provides support to TCL by making available, suitable, qualified and experienced executives to fill key positions, as well as training and technical assistance to support the Group’s trading and shipping departments.

BY ORDER OF THE BOARD

KATHRYNA BAPTISTESecretary


DIRECTORS’ REPORT (C’TD.)

41

Registered OfficeSouthern Main Road, Claxton Bay

Trinidad & Tobago, W.I.Tel: (868) 225-8254

Fax: (868) 659 2540Website: www.tcl.co.tt

Trinidad Cement Limited was incorporated in Trinidad in 1951 and commenced production in 1954. Its primary activity is the manufacture and sale of Portland Pozzolan Cement, Ordinary Portland Cement and Class G High Sulphate Resistant (HSR) Oilwell Cement. The distribution of its shareholding is detailed in the pie chart on page 10.

Company SecretaryMs. Kathryna Baptiste

Principal Officers1. Mr. Jinda Maharaj - General Manager2. Mr. Rodney Cowan - Marketing Manager3. Ms. Lisel Cozier - Procurement Manager4. Mr. Keith Ramjitsingh - Operations Manager 5. Mrs. Sonia Gobin - Finance Manager 6. Mrs. Gloria Jacobs - Planning & Development Manager7. Ms. Bonnie Alexis - Human Resource Manager/ Group Coordinator 8. Lt. Col. (ret’d) Richardo Garcia - Health, Safety, Security & Environment

Manager9. Mr. Taradath Ramdhanie - Engineering Services Manager 10. Mr. Rajeev Chadee - Production Manager (Ag.) 11. Mr. Anthony Wells - Industrial Relations Manager

TRINIDAD CEMENT LIMITED

TCL GROUP BUSINESS UNITS - PRINCIPAL OFFICERS

1. 5.

8.

2.

6.

3. 4.

7. 10. 11.9.

42

Registered OfficeRockfort, Kingston

Jamaica, W.I. Tel: (876) 928-6231-5Fax: (876) 928-7381

Website: www.caribcement.com

CARIBBEAN CEMENT COMPANY LIMITED


Caribbean Cement Company Limited was incorporated in Jamaica in 1947 and commenced production in 1952. Its primary activity is the manufacture and sale of Portland Pozzolan Cement and Ordinary Portland Cement. CCCL has three subsidiaries, namely Jamaica Gypsum & Quarries Limited, which is involved in the mining and sale of gypsum and anhydrite; Caribbean Gypsum Company Limited which has major assets of gypsum/anhydrite quarry lands to enhance the reserve of raw material available to the Company; and Rockfort Mineral Bath Complex Limited, a national heritage site and mineral spa. Board of DirectorsMr. Parris Lyew-Ayee (Chairman)Mr. José Luis Seijo González Mr. Luis Gilberto Ali Moya Mr. Hollis N. HoseinMr. Alejandro Varés Leal

Company SecretaryMr. Craig Neil

TCL Group 74.08%CEMEX - Scancem International (St. Lucia) Ltd 4.96%Financial Institutions 4.92%Pension Plans 0.41%Government 1.58%Other 14.05%


43

1. 5.2. 6.

9. 12.

3. 7.

10. 13.

4.

8. 11. 14.

16. 17.15.

Principal Officers1. Mr. Peter Donkersloot Ponce - General Manager 2. Mr. Sergio Zazueta - Operations Director 3. Mr. Craig Neil - Company Secretary4. Mrs. Jascinth Buchanan-Wint - Finance Manager5. Mr. Marcelo Hernandez - Human Resource Manager 6. Mrs. Sophia Lowe Pinnock - Corporate Communication & Public Affairs Manager 7. Mr. Adrian Spencer - Procurement Manager 8. Mr. Andrew Stephenson - Quality, Raw Material & Environment Manager 9. Mr. Rohan Anderson - Process Manager 10. Mr. Christopher Brown - Production Manager 11. Mr. Wayne Ballen - Security Manager 12. Mr. Glenroy Simpson - Maintenance Manager 13. Mr. Marchel Burrell - Health & Safety Manager 14. Mr. Garen Williams - Distribution Sales Manager 15. Mr. Jose Mongue - Strategic Planning Manager 16. Mr. Jorge Herrera - Supply Chain Manager 17. Ms. Euvine Dare - Sports Club Manager

44

Registered OfficeTumpuna Road, Guanapo, Arima


Fax: (868) 643-3209Website: www.readymix.co.tt

Board of Directors

Company SecretaryMr. Malcolm Sooknanan

Principal Officers1. Mr. Andres Peña – General Manager2. Mr. Malcolm Sooknanan – Finance Manager / Company Secretary3. Mrs. Reshma Gooljar-Singh – Marketing Manager4. Mr. Wayne Benjamin – Technical Services Manager5. Mr. Arneal Sieupresad – Maintenance Manager (Ag.)6. Mr. Thomas Singh – Quarry Manager 7. Ms. Cindy Siewbally – Human Resource Manager8. Mr. Horace Boodoo – Senior Materials Officer9. Mr. Anthony Ferguson – Health, Safety, Security & Environment Coordinator10. Mr. Kevin Douglas – Security Supervisor

READYMIX (WEST INDIES) LIMITED



TCL 71.1%Other Shareholders 28.9%

1. 2. 3.

7.

4. 5.

6. 8. 10.9.

Readymix (West Indies) Limited (“RML”) was incorporated in Trinidad in 1961. Its primary activities are the manufacture and sale of pre-mixed concrete and the mining and sale of sand and gravel. In 1995, Trinidad Cement Limited (TCL) acquired majority ownership of the Company.

Mr. Nigel Edwards (Chairman)Mr. Wayne Yip ChoyMr. José Luis Seijo GonzálezMr. Jinda Maharaj Mr. Luis Gilberto Ali Moya Mr. Michael Glenn Hamel-Smith

45

Registered OfficeChecker Hall, St. Lucy

Barbados, W.I., BB27178Tel: (246) 439-9880

Fax: (246) 439-7976Website: www.arawakcement.com.bb

Arawak Cement Company Limited was incorporated in Barbados in 1981 and was wholly acquired by TCL in 1994. Its primary activity is the manufacture and sale of Portland Limestone Cement.

Board of DirectorsMr. Arun K. Goyal – ChairmanMr. José Luis Seijo González Mr. Miguel Roberto Estrada Mr. Juan Carlos Mendoza Mr. Luis Gilberto Ali Moya

Company SecretaryMs. Michelle Davidson

Principal Officers1. Mr. Manuel Toro - General Manager2. Mr. Deodat Arjune - Finance Manager3. Mrs. Sheryllyn Welch-Payne - Procurement Manager4. Mr. Olvin Collymore - Human Resource Manager (Ag.)5. Mr. Raul Bustamante Perez - Cement Operations6. Mr. Juan David Bedoya Velasquez - Marketing

ARAWAK CEMENT COMPANY LIMITED


1. 5.2. 6.3. 4.

46

Registered OfficeSouthern Main Road, Claxton Bay


Fax: (868) 659-0950

TCL Packaging Limited was incorporated in Trinidad in 1989 and commenced operations in 1991. Its primary activity is the manufacture and sale of papersacks.

Board of DirectorsMr. Arun K. Goyal – ChairmanMr. José Luis Seijo González Mr. Juan Carlos Mendoza Mr. Luis Gilberto Ali Moya Mr. Carlos Martinez (Mondi Group – Parent Company of Dipeco Switzerland)

Company SecretaryMrs. Cheryl Gransaull

Principal Officers1. Mr. Roger Ramdwar - General Manager2. Mr. Hilary Lakhiram - Operations Manager3. Ms. Sursatee Heeralal - Marketing and Logistics Officer

TCL PACKAGING LIMITED


1. 2.


TCL 80%Dipeco (Switzerland) 20%

3.

47

Registered OfficePacific Avenue, Point Lisas Industrial Estate

Point Lisas, Trinidad & Tobago, W.I.Tel: (868) 679-4120

Fax: (868) 636-9627

TCL Ponsa Manufacturing Limited was incorporated in Trinidad in 1995. Its primary activity is the manufacture and sale of single use slings. It is also involved in the sale of jumbo bags, reusable slings, safety harnesses and polypropylene sacks, as well as webbing for use in the furniture industry.

Board of DirectorsMr. Arun K. Goyal - ChairmanMr. José Luis Seijo González Mr. Juan Ponsa (Industrias Ponsa - Spain)Ms. Laura Ponsa (Industrias Ponsa - Spain)Mr. Luis Gilberto Ali MoyaMr. Juan Carlos Mendoza

Company SecretaryMrs. Cheryl Gransaull

Principal Officers1. Mr. Roger Ramdwar - General Manager2. Ms. Sursatee Heeralal - Marketing & Logistics Officer3. Mr. Stephen Ramcharan - Technical Coordinator

TCL PONSA MANUFACTURING LIMITED


1. 2.


TCL 65%Industrias Ponsa S.A. (Spain) 35%

3.

48

Registered OfficeBox 885, Fair Play Complex

The Valley, Anguilla, W.I.Tel: (264)-497-3593

Fax: (264)-497-8501

TCL Trading was incorporated in Anguilla, W.I. on December 12, 1997 and commenced business in April 1998. Its primary activity is trading in cement and related products and it functions as a marketing support unit for the two cement companies, Trinidad Cement Limited and Arawak Cement Company Limited. The company is wholly owned by TCL.

Board of DirectorsMr. José Luis Seijo González Mr. Ricardo García Viani

Company SecretaryMr. Egwin Daniel

Principal OfficerMr. Jaris Liburd – General Manager

TCL TRADING LIMITED


49

Registered OfficeChecker Hall, St. Lucy

BB 27178, BarbadosTel: (246) 271-8854

Fax: (246) 439-7976

TTLI Trading Limited was incorporated in Barbados on November 4, 2016. Its primary activity is trading in cement and cement-related products. The company is fully owned by Trinidad Cement Limited.

Board of DirectorsMr. José Luis Seijo González Mr. Miguel Roberto Estrada Mr. Manuel Toro

Company SecretaryMs. Michelle Davidson

Principal OfficerMr. Jaris Liburd – General Manager

TTLI TRADING LIMITED


50

Registered Office2-9 Lombard Street

GNIC Compound, GeorgetownGuyana, South AmericaTel: 011 (592) 225-7520

Fax: 011 (592) 225-7347

TCL Guyana Inc. was incorporated in the Republic of Guyana on March 17, 2004. Its primary activity is the packaging of bulk cement for sale on the Guyanese market (cement terminal facility).

Board of DirectorsMr. Hollis N. Hosein (Chairman)Mr. José Luis Seijo González Mr. Ricardo García Viani Mr. Ramjeet RamphalMr. Vinode Persaud

Company SecretaryMs. Kathryna Baptiste

Principal OfficerMr. Phillip Yeung - Plant Manager

TCL GUYANA INC.



TCL (Nevis) Limited 80%Anral Investments Limited 10%Toolsie Persaud Limited 10%

51

INDEPENDENT AUDITOR’S REPORT


TO THE SHAREHOLDERS OF TRINIDAD CEMENT LIMITEDReport on the Audit of the Consolidated Financial Statements

OpinionWe have audited the consolidated financial statements of Trinidad Cement Limited and its subsidiaries (“the Group”), which comprise the consolidated statement of financial position as at 31 December 2016, and the consolidated statement of income, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated state-ment of cash flows for the year then ended, and notes to the consolidated financial state-ments, including a summary of significant accounting policies.In our opinion, the accompanying consolidated financial statements present fairly, in all mate-rial respects, the financial position of the Group as at 31 December 2016 and its financial per-formance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (“IFRSs”).

Basis for OpinionWe conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are indepen-dent of the Group in accordance with the International Ethics Standards Board for Accoun-tants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with 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 MattersKey audit matters are those matters that, in our professional judgment, were of most sig-nificance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial state-ments. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated financial statements.

52

INDEPENDENT AUDITOR’S REPORT (CONTINUED)


TO THE SHAREHOLDERS OF TRINIDAD CEMENT LIMITED (continued)

Key Audit Matters (continued)

Key Audit Matter How our audit addressed the key audit matter

Estimation uncertainty involved in im-pairment testing of property, plant and equipmentRefer to related disclosures in note 8 and accounting policy notes 2 (iii) and (xxiv) to the consolidated financial statements. As described in these notes, impairment tests are performed on long lived non-financial assets where indicators of impairment are identified.As required by IAS 36: “Impairment of Assets”, management performed an im-pairment test on the Property, Plant and Equipment and related assets of the Bar-bados subsidiary and the Group recorded an impairment provision of $152.8 million in 2014. Based on the impairment test per-formed during the current financial year, no further impairment provision or reversal was recorded in 2016.Impairment tests on assets as performed by management involve significant estima-tion and the application of a high level of judgment relative to key assumptions such as the applicable discount rate and future cash-flows. In determining future cash-flow projections, management uses assumptions and esti-mates in respect of future market conditions, future economic growth, expected market share and gross margins. The outcome of the impairment testing performed by man-agement is sensitive to these assumptions and estimates, such that changes in these assumptions/estimates may result in differ-ent impairment test conclusions.

Our audit procedures focused on the as-sessment of the key assumptions utilised by management including the cash-flow projections and the discount rate. We also evaluated whether the impairment test was performed by management in accordance with that prescribed by IAS 36. To this end, our procedures included, amongst others, evaluating and testing the assumptions, methodologies, Cash Gener-ating Unit (CGU) determination, discount rate and other key data used by manage-ment. We also assessed management’s assumptions by comparing to historical performance of the entity, local economic conditions and other alternative indepen-dent sources of information. In so doing we evaluated management’s assessment of the sensitivity of the key assumptions to reasonable possible changes which could cause the carrying amount of the CGU to exceed its recoverable amount.We involved an EY valuation specialist to assist with our audit of the impairment test model, including the cash flows, discount rate and long term growth rates. We also assessed the appropriateness of the disclosures in the notes to the consol-idated financial statements, with reference to that prescribed by IFRSs.

53






Estimation of uncertain tax positions and recognition of deferred tax asset

Refer to related disclosures of contingent liabilities in note 18 and accounting policy notes 2 (iii) and 2 (xii) to the consolidated financial statements. As described in ac-counting policy Note 2 (iii), there is a sig-nificant degree of management judgement involved in the determination of these crit-ical accounting estimates and judgements.As described in Note 18 (under the section titled “Contingent Liabilities”), management assessed facts in tax law and circumstanc-es relative to certain material tax disputes in relation to its Parent company and the Guyana subsidiary. No provision has been made in the consolidated financial state-ments for these uncertain tax positions as this possible liability is not considered prob-able.As disclosed in note 2 (iii), uncertainties ex-ist with respect to the interpretation of com-plex tax regulations and therefore manage-ment judgment and estimation is involved in the determination of any tax provisions which should or should not be recorded in respect of these tax contingencies.Note 2 (iii) also explains that estimation and judgment is involved in the determination of the recoverability of deferred tax assets to be recorded in respect of the extent and timing of future taxable profits and conse-quently the future utilisation of tax losses by each entity. Management has recorded a deferred tax asset of $394 million as at 31 December 2016 which represents 13% and 39% respectively of the total consolidated assets and consolidated equity respectively of the Group.

In relation to the uncertain tax positions, our audit procedures included, amongst others, evaluating the correspondence with the rel-evant tax authorities and the related tax and legal advice received by management from external independent professional parties in respect of these matters. We involved an EY tax specialist in our au-dit to assist in our evaluation of the relevant correspondence from the tax authorities and the specialist advice received by man-agement relative to the tax laws related to these matters. In relation to the recorded deferred tax as-set, we assessed the recoverability of the deferred tax assets in all entities with par-ticular focus on the Trinidad (Parent Com-pany) and Jamaica (Caribbean Cement Company Limited) entities. Our assess-ment was performed using management’s approved budget forecasts for the entities and we evaluated these forecasts in the context of local market conditions, the his-torical accuracy of management’s forecast estimates, historical performance of the en-tity and other relevant independent informa-tion and data points.We also assessed the appropriateness of the disclosures in the notes to the consol-idated financial statements, with reference to that prescribed by IFRSs.

54






Existence and collectability of trade re-ceivables and revenue recognitionRefer to relevant disclosures in notes 11 and 24, and accounting policy notes 2 (iii), 2 (xiv) and 2 (xv). Trade receivables (net of provision) amounted to $97.4 million as at 31 December 2016 and revenue recognised and recorded amounted to $1,887 million for the year then ended. These amounts are material to the consolidated financial statements.As presented in note 11 to the consolidated financial statements, a significant percent-age (25% or $24.3 million) of the Group’s trade receivables are aged in excess of 90 days past due and have not been provided for by management.There is an element of management judg-ment in the assessment of the extent of the recoverability of long outstanding trade re-ceivable balances and the determination of provisioning at year end. Furthermore, given the nature of the Group’s business and the high volume of sales transactions, there are factors which may result in the recognition of revenue be-fore the risks and rewards have been trans-ferred to the Group’s customers.

Our audit procedures and those of our com-ponent team auditors included, but were not limited to, internal control testing on the recognition of revenue in accordance with IAS 18: “Revenue”. In addition, we sample tested revenue recognised during the year to supporting documents including invoices and delivery documentation, to evaluate the existence of the recorded revenues and re-lated accounts receivable balances during the accounting period and at year end.Our testing also included comparing trade receivable balances to Customer Confir-mation Letters received from customers, subsequent collections from customers or delivery documentation.We evaluated and tested the Group’s pro-cess and documented policy for accounts receivable provisioning. We also evaluated management’s assumptions and explana-tions in relation to trade receivable provi-sioning through inspection of the aged re-ceivables listing and verification to related documentation. We also tested on a sample basis, sales transactions on either side of the year end date and credit notes issued after year end, to assess whether those transactions were recognised in the correct accounting period.

55






Stockholding provision recorded during the yearAs described in note 10, following a com-prehensive review, the Group recorded an expense of $72 million during the year in respect of the write down of overstocked inventory spares on hand. In accordance with IAS 2: “Inventories”, these spares have been written down to their net realisable value.This expense has been accounted for as a change in accounting estimate consistent with the requirements of IAS 8: “Accounting Policies, Changes in Accounting Estimates and Errors”, based on new developments and circumstances as further disclosed in note 10.The amount recorded is material to the con-solidated financial statements and is sepa-rately presented in the consolidated state-ment of income.

Our audit procedures and those of our com-ponent team auditors included, but were not limited to, evaluating the process and criteria established by management for the determination of the identified overstocked spares items. In so doing we visited the respective spares warehouses on location and through inspection and enquiry we evaluated whether the process and criteria was consistently applied by management. This included obtaining objective audit evi-dence around the existence of the new de-velopments and circumstances. We also evaluated the accounting treatment adopted by management in the context of the accounting guidance and related pre-scribed disclosures contained within IFRSs. Overall, we assessed whether the account-ing treatment, and the related presentation and disclosure was consistent with that re-quired by IFRSs.

56




Other information included in the Group’s 2016 Annual ReportOther information consists of the information included in the Group’s 2016 Annual Report, oth-er than the consolidated financial statements and our auditor’s report thereon. Management is responsible for the other information. The Group’s 2016 Annual Report is expected to be made available to us after the date of this auditor’s report.Our opinion on the consolidated financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, con-sider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially mis-stated.

Responsibilities of Management and the Audit Committee for the Consolidated Finan-cial StatementsManagement is responsible for the preparation and fair presentation of the consolidated fi-nancial statements in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.In preparing the consolidated financial statements, management is responsible for assessing the Group’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 in-tends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.The Audit Committee is responsible for overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial StatementsOur objectives are to obtain reasonable assurance about whether the consolidated 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 consolidated financial statements.

57




Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements (continued)As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: · Identify and assess the risks of material misstatement of the consolidated financial state-

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

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

· Evaluate the appropriateness of accounting policies used and the reasonableness of ac-counting estimates and related disclosures made by management.

· Conclude on the appropriateness of management’s use of the going concern basis of ac-counting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidat-ed financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

· Evaluate the overall presentation, structure and content of the consolidated financial state-ments, including the disclosures, and whether the consolidated financial statements repre-sent the underlying transactions and events in a manner that achieves fair presentation.

· Obtain sufficient appropriate audit evidence regarding the financial information of the en-tities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

58




Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements (continued)We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficien-cies in internal control that we identify during our audit. We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.From the matters communicated with the Audit Committee we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s re-port unless law or regulation precludes public disclosure about the matter or when, in extreme-ly rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. The engagement partner in charge of the audit resulting in this independent auditor’s report is Mr. Sheldon Griffith.

Port of Spain,TRINIDAD:23 February 2017

59

CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 December 2016 (Expressed in Thousands of Trinidad and Tobago dollars, except where otherwise stated)


2016 2015Assets Notes $ $Non-current assetsProperty, plant and equipment 8 1,805,255 1,729,794Pension plan assets 9 37,256 5,390Receivables 11 1,966 4,483Deferred tax assets 6 (d) 394,075 333,828 2,238,552 2,073,495Current assetsInventories 10 362,521 480,924Receivables and prepayments 11 134,683 190,163Cash at bank and on hand 12 186,546 288,500 683,750 959,587Total assets 2,922,302 3,033,082

Equity and liabilities

EquityStated capital 15 (a) 827,732 827,732Unallocated ESOP shares 17 (20,849) (25,299)Other reserves 15 (b) (254,305) (243,485)Retained earnings 464,549 404,345Equity attributable to the parent 1,017,127 963,293Non-controlling interests 22 (221) (12,323)Total equity 1,016,906 950,970Non-current liabilitiesLong term portion of borrowings 14 839,646 976,541Pension plan liabilities 9 24,928 32,025Other post-retirement benefits 9 94,412 68,583Deferred tax liabilities 6 (d) 344,959 295,464 1,303,945 1,372,613Current liabilitiesPayables and accruals 13 472,601 519,978Current portion of borrowings 14 128,850 189,521 601,451 709,499Total equity and liabilities 2,922,302 3,033,082

The accompanying notes form an integral part of these consolidated financial statements.These financial statements were approved by the Board of Directors on 23 February 2017 and signed on their behalf by:

___________________________ Director ______________________ Director

60

CONSOLIDATED STATEMENT OF INCOME For the year ended 31 December 2016 (Expressed in Thousands of Trinidad and Tobago dollars, except where otherwise stated)


2016 2015 Notes $ $Continuing operations

Revenue 24 1,887,013 2,115,446

Earnings before interest, tax, depreciation,loss on disposal of property, plant and equipment, and manpower and stockholding restructuring costs 3 464,226 588,364

Manpower restructuring costs 3 (44,464) (31,099)

Stockholding and restructuring costs 10 (72,026) –

Depreciation 8 (123,148) (110,796)

Loss on disposal of property, plant and equipment (163) (164)

Operating profit 3 224,425 446,305

Finance costs (net) 5 (a) (134,798) (164,630)

Debt refinancing gains (net) 5 (b) – 205,819

Profit before taxation 89,627 487,494

Taxation charge 6 (a) (37,205) (58,714)

Profit for the year 52,422 428,780

Attributable to:Equity holders of the parent 36,859 405,108Non-controlling interests 22 15,563 23,672

52,422 428,780

Basic and diluted earnings per share:(Expressed in $ per share) 7 $0.10 $1.19

The accompanying notes form an integral part of these consolidated financial statements.

61

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2016 (Expressed in Thousands of Trinidad and Tobago dollars, except where otherwise stated)


2016 2015 Notes $ $Profit for the year 52,422 428,780

Other comprehensive income/(loss):

Other comprehensive loss to be reclassified toprofit and loss in subsequent periods:

Exchange differences on translation of foreign operations (12,864) (18,930)

Other comprehensive loss to be reclassifiedto profit or loss in subsequent periods (12,864) (18,930)

Other comprehensive income/(loss) not to bereclassified to profit and loss in subsequent periods:

Re-measurement gains/(losses) on pensionplans and other post-retirement benefits 9 36,194 (87,685)

Income tax effect 6 (c) 2,508 21,752

38,702 (65,933)

Net other comprehensive income/(loss) not to be reclassified to profit or loss in subsequent periods 38,702 (65,933)

Other comprehensive income/(loss) for theyear, net of tax 25,838 (84,863)

Total comprehensive income forthe year, net of tax 78,260 343,917Attributable to:Equity holders of the parent 65,790 324,790Non-controlling interests 12,470 19,127 78,260 343,917


62

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2016 (Expressed in Thousands of Trinidad and Tobago dollars, except where otherwise stated)


Equi

ty a

ttrib

utab

le to

the

Pare

nt

Una

lloca

ted

N

on-

Stat

ed

ESO

P O

ther

R

etai

ned

co

ntro

lling

To

tal

capi

tal

shar

es

rese

rves

ea

rnin

gs

Tota

l in

tere

sts

equi

ty

Not

es

$ $

$ $

$ $

$Ye

ar e

nded

31

Dec

embe

r 201

6Ba

lanc

e at

1 J

anua

ry 2

016

82

7,73

2 (2

5,29

9)

(243

,485

) 40

4,34

5 96

3,29

3 (1

2,32

3)

950,

970

Oth

er c

ompr

ehen

sive

(los

s)/in

com

e 15

(c)

– –

(10,

820)

39

,751

28

,931

(3

,093

) 25

,838

Profi

t for

the

year

–

–

–

36

,859

36

,859

1

5,56

3

52,

422

Tota

l com

preh

ensi

ve (l

oss)

/inco

me

–

– (1

0,82

0)

76,

610

65,7

90

12,4

70

78,2

60Sh

are-

base

d al

loca

tions

17

–

4,4

50

– (1

,420

) 3

,030

–

3,03

0D

ivid

ends

16

–

–

–

(14,

986)

(14,

986)

(36

8)

(15

,354

)Ba

lanc

e at

31

Dec

embe

r 201

6

827,

732

(20,

849)

(2

54,3

05)

464,

549

1,0

17,1

27

(

221)

1,0

16,9

06

Year

end

ed 3

1 D

ecem

ber 2

015

Bala

nce

at 1

Jan

uary

201

5

466,

206

(25,

299)

(2

28,1

87)

64,2

57

276,

977

(31,

450)

24

5,52

7O

ther

com

preh

ensi

ve lo

ss

15 (c

) –

– (1

5,29

8)

(65,

020)

(8

0,31

8)

(4,5

45)

(84,

863)

Profi

t for

the

year

–

–

– 4

05,1

08

405

,108

2

3,67

2 4

28,7

80To

tal c

ompr

ehen

sive

(los

s)/in

com

e

– –

(15,

298)

3

40,0

88

324,

790

19,1

27

343,

917

Issu

e of

sha

res

15 (a

) 36

1,52

6

–

–

–

361

,526

–

361

,526

Bala

nce

at 3

1 D

ecem

ber 2

015

82

7,73

2 (2

5,29

9)

(243

,485

) 4

04,3

45

963

,293

(1

2,32

3)

950

,970

The

acco

mpa

nyin

g no

tes

form

an

inte

gral

par

t of t

hese

con

solid

ated

fina

ncia

l sta

tem

ents

.

63

CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 31 December 2016 (Expressed in Thousands of Trinidad and Tobago dollars, except where otherwise stated)


2016 2015 Notes $ $Cash generated from operations 19 530,804 633,019

Pension contributions paid 9 (a) (10,928) (12,482)Post-retirement benefits paid 9 (b) (2,408) (1,927)Taxation paid (62,385) (33,687)Net interest paid (88,842) (115,663)

Net cash provided by operating activities 366,241 469,260

Investing activitiesAdditions to property, plant and equipment 8 (200,520) (117,517)Proceeds from disposal of property, plant and equipment 713 305

Net cash used in investing activities (199,807) (117,212)

Financing activitiesRepayment of borrowings (261,133) (1,709,364)Proceeds from borrowings – 1,188,830Dividends paid (15,354) (984)Proceeds from issuance of new shares – gross up 15 (a) – 364,552Transaction costs incurred on issuance of new shares 15 (a) – (3,026)

Net cash used in financing activities (276,487) (159,992)

Net (decrease)/increase in cash (110,053) 192,056Net foreign exchange differences 8,099 (145)Net cash – beginning of year 288,500 96,589

Net cash – end of year 186,546 288,500

Represented by:

Cash at bank and on hand 12 186,546 288,500


64

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2016 (Expressed in Thousands of Trinidad and Tobago dollars, except where otherwise stated)


1. Incorporation and activitiesTrinidad Cement Limited (the “Company” or the “parent company”) is resident and incor-porated in the Republic of Trinidad and Tobago and is engaged in the manufacture and sale of cement, concrete and aggregates. The Company is a limited liability company with its registered office located at Southern Main Road, Claxton Bay and is the parent company of various subsidiary companies operating in Trinidad & Tobago and the wider Caribbean region. As at year end the ordinary shares of the Company are publicly traded on the Trinidad and Tobago Stock Exchange (TTSE), Jamaica Stock Exchange (JSE) and Barbados Stock Exchange (BSE). At the date of approval of the consolidated finan-cial statements, the Company had embarked upon a process of delisting from the JSE and BSE exchanges’ and were at various stages of completion in this delisting process.On 24 January 2017 the Company became a subsidiary of Sierra Trading. Consequent to this development, the Group’s ultimate parent company became CEMEX, S.A.B. de C.V., a public stock corporation with variable capital (S.A.B. de C.V.) organised under the laws of the United Mexican States, or Mexico and it shares are publicly traded on the Mexi-can Stock Exchange (“MSE”) as Ordinary Participation Certificates (“CPOs”) under the symbol “CEMEXCPO”. Each CPO represents two series “A” shares and one series “B” share of common stock of CEMEX, S.A.B. de C.V. In addition, CEMEX, S.A.B. de C.V.’s shares are listed on the New York Stock Exchange (“NYSE”) as American Depositary Shares (“ADSs”) under the symbol “CX.” Each ADS represents ten CPOs.A listing of the Group’s subsidiary companies is detailed in Note 21.

2. Significant accounting policies(i) Basis of preparation

The consolidated financial statements of the Group are prepared under the histori-cal cost convention and provide comparative information in respect of the previous period.Statement of complianceThese consolidated financial statements of the Group have been prepared in ac-cordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).Changes in accounting policy and disclosuresThe accounting policies adopted in the preparation of these consolidated financial statements are consistent with those followed in the preparation of the Group’s annual financial statements for the year ended 31 December 2015 except for the standards and interpretations noted below:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) For the year ended 31 December 2016 (Expressed in Thousands of Trinidad and Tobago dollars, except where otherwise stated)


65

2. Significant accounting policies (continued)(i) Basis of preparation (continued)

New and amended standards and interpretations• IFRS 14 Regulatory Deferral Accounts• Amendments to IFRS 11 Joint Arrangements: Accounting for Acquisitions of

Interests• Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of

Depreciation and Amortisation• Amendments to IAS 16 and IAS 41 Agriculture: Bearer Plants• Amendments to IAS 27: Equity Method in Separate Financial Statements• Amendments to IAS 1 Disclosure Initiative• Amendments to IFRS 10, IFRS 12 and IAS 28 Investment Entities: Applying

the Consolidation Exception• Improvements to IFRSs – 2012-2014 cycleThe nature and the impact of each new standard and amendment are described below:IFRS 14 Regulatory Deferral AccountsIFRS 14 is an optional standard that allows an entity, whose activities are subject to rate -regulation, to continue applying most of its existing accounting policies for regulatory deferral account balances upon its first-time adoption of IFRS. Entities that adopt IFRS 14 must present the regulatory deferral accounts as separate line items on the statement of financial position and present movements in these ac-count balances as separate line items in the statement of profit or loss and OCI. The standard requires disclosure of the nature of, and risks associated with, the entity’s rate-regulation and the effects of that rate-regulation on its financial statements. Since the Group is an existing IFRS preparer and is not involved in any rate-regu-lated activities, this standard does not apply.



66


New and amended standards and interpretations (continued)Amendments to IFRS 11 Joint Arrangements: Accounting for Acquisitions of InterestsThe amendments to IFRS 11 require that a joint operator accounting for the acqui-sition of an interest in a joint operation, in which the activity of the joint operation constitutes a business, must apply the relevant IFRS 3 Business Combinations prin-ciples for business combination accounting. The amendments also clarify that a pre-viously held interest in a joint operation is not re-measured on the acquisition of an additional interest in the same joint operation if joint control is retained. In addition, a scope exclusion has been added to IFRS 11 to specify that the amendments do not apply when the parties sharing joint control, including the reporting entity, are under common control of the same ultimate controlling party. The amendments apply to both the acquisition of the initial interest in a joint operation and the acquisition of any additional interests in the same joint operation and are applied prospectively. These amendments do not have any impact on the Group as there has been no interest acquired in a joint operation during the period.Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and AmortisationThe amendments clarify the principle in IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets that revenue reflects a pattern of economic benefits that are generated from operating a business (of which the asset is a part) rather than the economic benefits that are consumed through use of the asset. As a result, a revenue-based method cannot be used to depreciate property, plant and equip-ment and may only be used in very limited circumstances to amortise intangible assets. The amendments are applied prospectively and do not have any impact on the Group, given that it has not used a revenue-based method to depreciate its non-current assets.Amendments to IAS 16 and IAS 41 Agriculture: Bearer PlantsThe amendments change the accounting requirements for biological assets that meet the definition of bearer plants. Under the amendments, biological assets that meet the definition of bearer plants will no longer be within the scope of IAS 41 Agriculture. Instead, IAS 16 will apply. After initial recognition, bearer plants will be measured under IAS 16 at accumulated cost (before maturity) and using either the cost model or revaluation model (after maturity). The amendments also require that produce that grows on bearer plants will remain in the scope of IAS 41 measured at fair value less costs to sell. For government grants related to bearer plants, IAS 20 Accounting for Government Grants and Dis-closure of Government Assistance will apply. The amendments are applied retro-spectively and do not have any impact on the Group as it does not have any bearer plants.



67


New and amended standards and interpretations (continued)Amendments to IAS 27: Equity Method in Separate Financial StatementsThe amendments allow entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements. Entities already applying IFRS and electing to change to the equity method in their separate financial statements have to apply that change retrospectively. These amendments do not have any impact on the Group’s consolidated financial state-ments.Amendments to IAS 1 Disclosure InitiativeThe amendments to IAS 1 clarify, rather than significantly change, existing IAS 1 requirements. The amendments clarify:• The materiality requirements in IAS 1• That specific line items in the statement(s) of profit or loss and OCI and the

statement of financial position may be disaggregated• That entities have flexibility as to the order in which they present the notes to

financial statements• That the share of OCI of associates and joint ventures accounted for using

the equity method must be presented in aggregate as a single line item, and classified between those items that will or will not be subsequently reclassi-fied to profit or loss

Furthermore, the amendments clarify the requirements that apply when additional subtotals are presented in the statement of financial position and the statement(s) of profit or loss and OCI. These amendments do not have any impact on the Group.



68


New and amended standards and interpretations (continued)Amendments to IFRS 10, IFRS 12 and IAS 28 Investment Entities: Applying the Consolidation ExceptionThe amendments address issues that have arisen in applying the investment enti-ties exception under IFRS 10 Consolidated Financial Statements. The amendments to IFRS 10 clarify that the exemption from presenting consolidated financial state-ments applies to a parent entity that is a subsidiary of an investment entity, when the investment entity measures all of its subsidiaries at fair value. Furthermore, the amendments to IFRS 10 clarify that only a subsidiary of an investment entity that is not an investment entity itself and that provides support services to the investment entity is consolidated. All other subsidiaries of an investment entity are measured at fair value. The amendments to IAS 28 Investments in Associates and Joint Ventures allow the investor, when applying the equity method, to retain the fair value mea-surement applied by the investment entity associate or joint venture to its interests in subsidiaries. These amendments are applied retrospectively and do not have any impact on the Group as the Group does not apply the consolidation exception.Annual Improvements 2012-2014 CycleThese improvements are effective from 1 January 2016 and the Group has ap-plied these amendments for the first time in these consolidated financial statements. They include:IFRS 5 Non-current Assets Held for Sale and Discontinued OperationsAssets (or disposal groups) are generally disposed of either through sale or dis-tribution to the owners. The amendment clarifies that changing from one of these disposal methods to the other would not be considered a new plan of disposal, rather it is a continuation of the original plan. There is, therefore, no interruption of the application of the requirements in IFRS 5. This amendment is applied prospec-tively. These amendments have no impact on the consolidated financial statements.IFRS 7 Financial Instruments: Disclosures(i) Servicing contracts

The amendment clarifies that a servicing contract that includes a fee can con-stitute continuing involvement in a financial asset. An entity must assess the nature of the fee and the arrangement against the guidance for continuing involvement in IFRS 7 in order to assess whether the disclosures are required. The assessment of which servicing contracts constitute continuing involve-ment must be done retrospectively. However, the required disclosures need not be provided for any period beginning before the annual period in which the entity first applies the amendments.



69


Annual Improvements 2012-2014 Cycle (continued)(ii) Applicability of the amendments to IFRS 7 to condensed interim financial state-

mentsThe amendment clarifies that the offsetting disclosure requirements do not apply to condensed interim financial statements, unless such disclosures provide a significant update to the information reported in the most recent annual report. This amendment is applied retrospectively. These amendments have no impact on the consolidated financial statements.IAS 19 Employee BenefitsThe amendment clarifies that market depth of high quality corporate bonds is assessed based on the currency in which the obligation is denominated, rather than the country where the obligation is located. When there is no deep market for high quality corporate bonds in that currency, government bond rates must be used. This amendment is applied prospectively. These amendments have no impact on the consolidated financial statements.IAS 34 Interim Financial ReportingThe amendment clarifies that the required interim disclosures must either be in the interim financial statements or incorporated by cross-reference between the interim financial statements and wherever they are included within the interim financial report (e.g., in the management commentary or risk report). The oth-er information within the interim financial report must be available to users on the same terms as the interim financial statements and at the same time. This amendment is applied retrospectively. These amendments do not have any im-pact on the Group.Standards issued but not yet effectiveThe standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group’s consolidated financial statements are disclosed below. The Group intends to adopt these standards, if applicable, when they become effective.• IFRS 2, ‘Classification and Measurement of Share-based Payment

Transactions’ - Amendments to IFRS 2 - Effective for annual periods beginning on or after 1 January 2018

• IFRS 9 Financial Instruments – Effective 1 January 2018• IFRS 15 Revenue from Contracts with Customers – Effective 1 January

2018• IFRS 16, ‘Leases’ – Effective 1 January 2019• Amendments to IAS 7 – Disclosure Initiative – Effective 1 January 2017• Amendments to IAS 12 – Recognition of Deferred Tax Assets for Unreal-

ised Losses – Effective 1 January 2017The Group is currently assessing the potential impact of these new standards and interpretations and will adopt them when they are effective.



70

2. Significant accounting policies (continued)(ii) Basis of consolidation

These consolidated financial statements comprise the financial statements of Trini-dad Cement Limited (“the Parent”) and its subsidiaries (collectively “the Group”) as at 31 December and for the year then ended. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.Specifically, the Group controls an investee if and only if the Group has:• Power over the investee (i.e. existing rights that give it the current ability to

direct the relevant activities of the investee);• Exposure, or rights, to variable returns from its involvement with the invest-

ee; and• The ability to use its power over the investee to affect its returnsWhen the

Group has less than a majority of the voting or similar rights of an invest-ee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

• The contractual arrangement with the other vote holders of the investee• Rights arising from other contractual arrangements• The Group’s voting rights and potential voting rightsThe Group re-assesses whether or not it controls an investee if facts and circum-stances indicate that there are changes to one or more of the three elements of con-trol. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabil-ities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary.Profit or loss and each component of other comprehensive income (OCI) are at-tributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. The financial statements of subsidiaries are prepared for the same reporting period as the parent, using consistent accounting policies. All intra-group assets and lia-bilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.



71

2. Significant accounting policies (continued)(ii) Basis of consolidation (continued)

A change in the ownership interest of a subsidiary, without a loss of control, is ac-counted for as an equity transaction. If the Group loses control over a subsidiary, it:• Derecognises the carrying amount of assets (including goodwill) and liabili-

ties of the subsidiary• Derecognises the carrying amount of any non-controlling interests• Recognises the fair value of the consideration received• Recognises the fair value of any investment retained• Reclassifies to profit or loss or to retained earnings, as appropriate, the

amounts recognised in OCI as would be required if the Group had directly disposed of the related assets or liabilities

• Recognises any resulting difference as a gain or loss in profit or loss attribut-able to the Parent

Non-controlling interests represent the interests not held by the Group, in Readymix (West Indies) Limited, Caribbean Cement Company Limited, TCL Ponsa Manufac-turing Limited, TCL Packaging Limited and TCL Guyana Inc.

(iii) Significant accounting judgements, estimates and assumptionsThe preparation of the consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods. The key judgements, estimates and assumptions concerning the future and other key sources of estimation uncertainty at the consolidated statement of financial position date, 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.Impairment of non-financial assetsAn impairment exists when the carrying value of an asset or cash generating unit (CGU) exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell is determined using an approach that includes the use of market observable data for similar type cash generating units. The value in use calculation is based on a discounted cash flow model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.



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2. Significant accounting policies (continued)(iii) Significant accounting judgements, estimates and assumptions

(continued)TaxesUncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the existence of interna-tional business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the as-sumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective countries in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective Group company’s domicile.Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.Provision for doubtful debtsManagement exercises judgement in determining the adequacy of provisions es-tablished for accounts receivable balances for which collections are considered doubtful. Judgement is used in the assessment of the extent of the recoverability of certain balances. Actual outcomes may be materially different from the provision established by management.Property, plant and equipmentManagement exercises judgement in determining whether costs incurred can ac-crue significant future economic benefits to the Group to enable the value to be treated as a capital expense.Further judgement is applied in the annual review of the useful lives of all categories of property, plant and equipment and the resulting depreciation determined thereon.



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2. Significant accounting policies (continued)(iii) Significant accounting judgements, estimates and assumptions

(continued)Property, plant and equipment (continued)Additionally, management exercises judgement in the determination of the key assumptions utilised in the impairment tests performed on the property, plant and equipment. These assumptions include the use of a suitable discount rate and ap-plicable cash flow forecasts to be used in the analysis. These variables significantly impact the results and conclusions derived from the impairment tests performed.Pension and post-retirement benefitsThe cost of defined benefit pension plans and other post-retirement benefits is de-termined using actuarial valuations. The actuarial valuation involves making judge-ments and assumptions in determining discount rates, expected rates of return on assets, future salary increases and future pension increases. Due to the long term nature of these plans, such assumptions are subject to significant uncertainty. All assumptions are reviewed at each reporting date.

(iv) Business combinations and goodwillBusiness combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, mea-sured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-con-trolling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed and included in administrative expenses.When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the con-tractual terms, economic circumstances and pertinent conditions as at the acquisi-tion date. This includes the separation of embedded derivatives in host contracts by the acquiree.If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the con-tingent consideration which is deemed to be an asset or liability, will be recognised in accordance with IAS 39: “Financial instruments: Recognition and Measurement” either in profit or loss or as a change to other comprehensive income. If the con-tingent consideration is classified as equity, it should not be remeasured until it is finally settled within equity.



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2. Significant accounting policies (continued)(iv) Business combinations and goodwill (continued)

Goodwill is initially measured at cost being the excess of the aggregate of the con-sideration transferred and the amount recognised for non-controlling interest 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 Group reassesses whether it has correctly identified all of the assets acquired and all the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.After initial recognition, goodwill is measured at cost less any accumulated impair-ment losses. For the purpose of impairment testing, goodwill acquired in a busi-ness 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. The Group assesses at each reporting date whether there is an indication that goodwill maybe impaired. If any such indication exists, or when impairment testing for an asset is required, the Group makes an estimate of the assets recoverable amount.Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.

(v) Property, plant and equipmentProperty, plant and equipment are stated at cost less accumulated depreciation and/or accumulated impairment losses, if any. Such cost includes the cost of re-placing part of the property, plant and equipment and borrowing costs for long term construction projects if the recognition criteria are met. All other repairs and mainte-nance are recognised in the consolidated statement of income.Depreciation is provided on the straight line or reducing balance basis at rates esti-mated to write-off the assets over their estimated useful lives. The estimated useful lives of assets are reviewed periodically, taking account of commercial and techno-logical obsolescence as well as normal wear and tear, and the depreciation rates are adjusted if appropriate. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount.



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2. Significant accounting policies (continued)(v) Property, plant and equipment (continued)

Current rates of depreciation are:Buildings - 2% - 4%Plant, machinery and equipment - 3% - 25%Motor vehicles - 10% - 25%Office furniture and equipment - 10% - 33%Leasehold land and improvements are amortised over the shorter of the remaining term of the lease and the useful life of the asset. Freehold land and capital work-in-progress are not depreciated. The limestone reserves contained in the leasehold land at a subsidiary is valued at fair market value determined at the date of acquisi-tion of the subsidiary. A depletion charge is recognised based on units of production from those reserves.All other limestone reserves which are contained in lands owned by the Group are not carried at fair value but the related land is stated at historical cost.An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on the derecognising of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the con-solidated statement of income in the year the asset is derecognised.

(vi) InventoriesPlant spares, raw materials and consumables are valued at the lower of weighted average cost and net realisable value. Work in progress and finished goods are valued at the lower of cost and net realisable value. Cost of inventories includes those expenditures incurred in acquiring or producing inventories including produc-tion overheads and other conversion costs incurred to bring them to their existing location and condition. Net realisable value is the estimate of the selling price less the costs of completion and direct selling expenses.



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2. Significant accounting policies (continued)(vii) Foreign currency translation

The consolidated financial statements are presented in Trinidad and Tobago dol-lars (expressed in thousands), which is the Parent’s functional and presentation currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.Foreign currency transactionsTransactions in foreign currencies are initially recorded by Group entities in their functional currency at the rate ruling at the date of the transaction. Monetary as-sets and liabilities denominated in foreign currencies are translated at the foreign currency spot rate of exchange ruling at the reporting date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Exchange differences on foreign currency transactions are recognised in the con-solidated statement of income.Foreign entitiesOn consolidation, assets and liabilities of foreign entities are translated into Trin-idad and Tobago dollars at the rate of exchange ruling at the financial reporting date and their statements of income are translated at the weighted average ex-change rates for the year. The exchange differences arising on re-translation are recognised in other comprehensive income. On disposal of the foreign operation, the deferred cumulative amount recognised in other comprehensive income is recognised in the consolidated statement of income.

(viii) Deferred expenditureAt 31 December 2015 deferred expenditure included unamortised cost of $19.5 million. The cost of installed refractories, chains and grinding media is amortised to match the estimated period of their economic usefulness. Management per-formed a review of the period of economic usefulness during the year and deter-mined that the full cost of installed refractories, chains and grinding media should be expensed as incurred owing to the uncertainty in the deferred amortisation period. This accounting treatment represents a change in accounting estimate according to IAS 8.32 “Change in Accounting Policies, Change in Estimates and Errors”. The change in estimate has resulted in an estimated increase in raw material and consumables cost of $16.7 million in 2016.



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2. Significant accounting policies (continued)(ix) Segment information

The Group’s operating businesses are organised and managed separately accord-ing to the nature of the products and services provided, with each segment repre-senting a strategic business unit that offers different products and serves different markets.The Group generally accounts for inter-segment sales and transfers as if the sales or transfers were to third parties at current market prices. Revenues are attributable to geographic areas based on the location of the assets producing the revenues.

(x) Financial instrumentsFinancial instruments carried on the consolidated statement of financial position include cash and bank balances including advances/overdrafts, accounts receiv-ables, accounts payables, and borrowings. The particular recognition methods ad-opted are disclosed in the individual policy statements associated with each item.

(xi) LeasesOperating leasesLeases of assets under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the consolidated statement of income on a straight-line basis over the period of the lease.Finance leasesFinance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased assets or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of inter-est on the remaining balance of the liability. Finance charges are charged directly against income. Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.



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2. Significant accounting policies (continued)(xii) Taxation

Current income taxCurrent income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.Deferred income taxA deferred tax charge is provided, using the liability method, on all temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.Deferred tax assets are recognised for all deductible temporary differences and unused tax losses, to the extent that it is probable that future taxable profit will be available against which these deductible temporary differences and unused tax losses can be utilised. The carrying amount of deferred tax assets is reviewed at each statement of financial position date and reduced to the extent that it is no longer probable that sufficient future taxable profit will be available to allow all or part of the deferred tax assets to be utilised.

(xiii) Pension plans and post-retirement medical benefitsDefined benefit pension plans are generally funded by payments from employ-ees and by the relevant Group companies, taking into account of the rules of the pension plans and the recommendations of independent professional actuaries.For defined benefit plans, the pension accounting costs are assessed using the projected unit credit method. Under this method, the cost of providing pensions is calculated based on the advice of independent actuaries who also carry out a full funding valuation of the plans every three years. The pension obligation is measured at the present value of the estimated future cash outflows using inter-est rates of long term government securities.Defined contribution plans are accounted for on the accrual basis, as the Group’s liabilities are limited to its contributions.Certain subsidiaries also provide post-retirement healthcare benefits to their re-tirees. The expected costs of these benefits are measured and recognised in a manner similar to that for defined benefit plans. Valuation of these obligations is carried out by independent professional actuaries using an accounting method-ology similar to that for the defined benefit pension plans.



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2. Significant accounting policies (continued)(xiii) Pension plans and post-retirement medical benefits (continued)

Past service costs are recognised in profit and loss on the earlier of:• The date of the plan amendment or curtailment, and• The date that the Group recognises restructuring-related costs.Net interest is calculated by applying the discount rate to the net defined benefit

liability or asset. The Group recognises the following changes in the net defined benefit obligation under ‘personnel remuneration and benefits’ in the consolidated statement of income:

• Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements

• Net interest expense or income

(xiv) Revenue recognitionRevenue is recognised 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, taking into account discounts, returns, rebates and sales taxes. The Group has concluded that it is the principal in all its revenue arrangements since it is the primary obligor in all of its revenue arrangements, has pricing latitude and is also exposed to inventory and credit risks. The following specific recognition criteria must be met before revenue is recognised:Sales of goodsRevenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods, and the amounts of revenue can be measured reliably.Interest and investment incomeInterest and investment income are recognised as they accrue unless collect-ability is in doubt.

(xv) Trade and other receivablesTrade and other receivables are carried at anticipated realisable value. Provision is made for specific doubtful receivables based on a review of all outstanding amounts at the year-end.



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2. Significant accounting policies (continued)(xvi) Trade and other payables

Liabilities for trade and other payables, which are normally settled on 30-90 day terms are carried at cost, which represents the consideration to be paid in the future for goods and services received whether or not billed to the Group.

(xvii) Interest bearing loans and borrowingsBorrowings are initially recognised at the fair value of the consideration received less directly attributable costs. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective in-terest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the effective interest rate amorti-sation process.Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included as finance costs in the consol-idated statement of income.

(xviii) Borrowing costsBorrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

(xix) ProvisionsProvisions are recorded when the Group has a present or constructive obligation as a result of past events, it is probable that an outflow of resources will be re-quired to settle the obligation and a reliable estimate of the amount can be made.Restructuring provisions are recognised only when the Group has a constructive obligation, which is when a detailed formal plan identifies the business or part of the business concerned, the location and number of employees affected, a detailed estimate of the associated costs, and an appropriate timeline, and the employees affected have been notified of the plan’s main features.When the Group can reliably measure the outflow of economic benefits in rela-tion to a specific matter and considers such outflows to be probable, the Group records a provision against the matter. Given the subjectivity and uncertainty of determining the probability amount of losses, the Group takes into account a number of factors including legal advice, the stage of the matter and historical evidence from similar incidents. Significant judgment is required to conclude on these estimates.



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2. Significant accounting policies (continued)(xx) Earnings per share

Earnings per share is computed by dividing net profit or loss attributable to the shareholders of the Parent for the year by the weighted average number of ordi-nary shares in issue during the year. Diluted earnings or loss per share is com-puted by adjusting the weighted average number of ordinary shares in issue for the assumed conversion of potential dilutive ordinary shares into issued ordinary shares. The Group has no dilutive potential ordinary shares in issue.

(xxi) Cash and cash equivalentsFor the purpose of the consolidated statement of cash flows, cash and cash equivalents include all cash and bank balances and overdraft balances with ma-turities of less than three months from the date of establishment.

(xxii) Equity compensation benefitsThe Group accounts for profit sharing entitlements which are settled in the shares of the Parent Company through an Employee Share Ownership Plan (ESOP) as an expense determined at market value. The cost incurred in administering the Plan is recorded in the statement of income of the Parent Company. The cost of the unallocated shares of the Parent Company, which are treated as treasury shares, is recognised as a separate component within equity.

(xxiii) Equity movementsStated capitalOrdinary stated capital is classified within equity and is recognised at the fair val-ue of the consideration received by the Company. As equity is repurchased, the amount of consideration paid is recognised as a charge to equity and reported in the consolidated statement of financial position as treasury shares.Dividends on ordinary shares are recognised as a liability and deducted from eq-uity when they are approved by the Group’s Board of Directors. Interim dividends are deducted from equity when they are paid. Dividends for the year that are approved after the consolidated statement of financial position date are dealt with as an event after the end of reporting date.



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2. Significant accounting policies (continued)(xxiii) Equity movements (continued)

Treasury sharesOwn equity instruments which are re-acquired (“treasury shares”) are deduct-ed from equity. No gain or loss is recognised in the consolidated statement of income on the purchase, sale, issue or cancellation of the Group’s own equity instruments. Any difference between the carrying amount and the consideration is recognised in other reserves. Such treasury shares are presented separately within equity and are stated at cost.

(xxiv) Impairment of assetsNon-financial assetsThe Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s re-coverable amount. An asset’s recoverable amount is the higher of an asset’s or cash generating unit’s fair value less costs to dispose and its value in use and is determined for an individual asset, unless the asset does not generate cash in-flows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assess-ing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses are separately disclosed in the consolidated statement of income.For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group makes an estimate of recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to de-termine the asset’s recoverable amount since the last impairment loss was rec-ognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment been recognised for the asset in prior years. Such reversal is recognised in the con-solidated statement of income unless the asset is carried at revalued amounts in which case the reversal is treated as a revaluation increase. Impairment losses recognised in relation to goodwill are not reversed for subsequent increases in its recoverable amount.



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2. Significant accounting policies (continued)(xxiv) Impairment of assets (continued)

Financial assetsThe carrying value of all financial assets not carried at fair value through the con-solidated statement of income is reviewed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. The identification of impairment and the determination of recoverable amounts is an inherently uncertain process involving various assumptions and factors, including the financial condition of the counterparty, expected future cash flows, observable market prices and expected net selling prices.

(xxv) Fair value measurementThe Group does not measure any assets or liabilities at fair value in its consoli-dated statement of financial position. The fair values of financial instruments mea-sured at amortised cost are disclosed in Note 20. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measure-ment is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:· In the principal market for the asset or liability, or· In the absence of a principal market, in the most advantageous market for the

asset or liabilityThe principal or the most advantageous market must be accessible to by the Group.The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.



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3. Operating profit 2016 2015 Notes $ $

Revenue 24 1,887,013 2,115,446Less expenses:Personnel remuneration and benefits (See below) 428,642 479,760Fuel and electricity 287,839 310,301Operating expenses 208,750 237,168 Raw materials and consumables 196,107 191,704Equipment hire and haulage 128,296 136,331Repairs and maintenance 123,213 128,544Changes in finished goods and work in progress 52,088 49,378Other income (See below) (2,148) (6,104)Earnings before interest, tax, depreciation, and loss on disposal of property, plant and equipment, and manpower and stockholding restructuring costs 464,226 588,364 Manpower restructuring costs (See below) (44,464) (31,099)Stockholding and inventory restructuring costs 10 (72,026) –Depreciation 8 (123,148) (110,796)Loss on disposal of property, plant and equipment (163) (164)Operating profit 224,425 446,305

Manpower restructuring costs mainly comprise severance costs incurred during imple-mentation of restructuring programme during the year. The objective of the restructuring programs is to improve cost efficiency.As described further in Note 10, the Group recorded an expense of $72 million in 2016 in relation to a stockholding and inventory programme.



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3. Operating profit (continued) 2016 2015 Notes $ $

Personnel remuneration and benefits include:Salaries and wages 321,472 384,853Other benefits 51,952 46,024Statutory contributions 20,525 20,688Pension costs – defined contribution plan 3,262 3,907Termination benefits 673 451Net pension expense – defined benefit plans 9 (a) 30,758 23,837 428,642 479,760Operating profit is stated after deducting directors’ fees of:Directors’ fees 1,589 1,801Other income includes:Delivery and trucking services – (2,643)Miscellaneous income (2,148) (3,461) (2,148) (6,104)



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4. Related party disclosuresThe TCL Group has entered into related party transactions with respect to the purchase and sale of product with CEMEX S.A.B. de C.V. (“CEMEX”). In addition, during 2015, the Company has entered into a management agreement with a subsidiary of CEMEX to provide managerial and technical support to the TCL Group.The following table provides the total amount of transactions and balances at year end that have been entered into with the CEMEX Group for the relevant financial year:

2016 2015 $ $

Sales for the year 23,579 13,526Purchases for the year 49,904 36,159Management fee expenses 24,273 15,306Trade receivables at year end (Note 11) 979 1,466Trade payables at year end (Note 13) 4,156 1,453These related party transactions are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding trade receivables and trade payable balances are unsecured and interest free and no provision has been established at year end for these balances.Key management compensation of the Group

2016 2015 $ $

Short-term employment benefits 28,513 37,376Pension plan and post-retirement benefits 398 701Key management personnel are those persons having authority and responsibili-ty for planning, directing and controlling the activities of the Group.



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5. Finance costs and refinancing gains 2016 2015 $ $

(a) Finance costsInterest expense on borrowings 86,012 140,682Other finance costs 22,974 10,826Bank and related charges 2,404 889Interest income (537) (602) 110,853 151,795Foreign currency exchange loss 23,945 12,835 134,798 164,630

(b) Debt refinancing gains Net refinancing gains – 205,819

In March 2015 the TCL Group negotiated new terms under the Override Agree-ment with Lenders with the restructured debt agreements coming into effect as at 30 March 2015. The main elements of the new terms included, a reduction of the interest rate on the outstanding debt by 2%, forgiveness of the default moratorium interest from 30 September 2015 (2%) and the ability to prepay originally secured and unsecured debt on a discounted basis within 90 days of the effectiveness of the restructuring. In March 2015 the Group recorded net discounts of $6.4 million comprising for-giveness of interest of $27.8 million net of costs and loan balance adjustments of $21.4 million. In May 2015 the TCL Group prepaid the Override debt in full net of prepayment discount of $199.4 million with the proceeds of a successful Rights Issue process, proceeds from short term borrowings and internal cash.

6. Taxation 2016 2015 $ $

(a) Taxation chargeDeferred taxation (Note 6 (c)) (8,405) 14,938Current taxation 45,610 43,776 37,205 58,714



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6. Taxation (continued) 2016 2015 $ $

(b) Reconciliation of applicable tax charge to effective tax charge

Profit before taxation 89,627 487,494Tax charge calculated at 25% 22,407 121,874Net effect of other charges and disallowances (10,601) (3,463)Movement in deferred tax income assets not recognised 11,274 (10,057)Impact of income not subject to tax (9,801) (50,046)Business and green fund levies 8,797 3,055Impact of change in Trinidad and Tobago tax rate 6,754 –Effect of different tax rates outside Trinidad and Tobago 8,375 (2,649)Taxation charge reported in the consolidated statement of income 37,205 58,714

Based on the Budget Presentation on 30 September 2016, the Minister of Finance of the Government of Trinidad and Tobago announced a change in corporation tax rate from 25% to 30% for Companies, on incremental chargeable income in excess of $1 million. The change was enacted by the Parliament of Trinidad and Tobago and was subsequently assented to on 23 December 2016. This change in tax rate is effective from 1 January 2017. The impact to the consolidated financial statements as at 31 December 2016 was an increase in the net deferred tax asset of $3.5 million, a net decrease in the de-ferred tax income reported in the consolidated statement of income of $6.8 million and a net increase in the income tax credit to Other Comprehensive Income of $10.3 million.As at 31 December 2016, a deferred tax asset of $99.34 million (2015: $86.2 mil-lion) in relation to tax losses and capital allowances available for reducing future tax payments was not recognised in the consolidated statement of financial posi-tion given a level of uncertainty regarding their utilisation within a reasonable time.Trinidad Cement Limited has tax losses of $1,226 million (2015: $1,200 million) available for set off against future taxable profits. Caribbean Cement Company Limited and its subsidiaries have tax losses of $175.7 million (2015: $186.6 mil-lion) available for set off against future taxable profits. Arawak Cement Company Limited has tax losses of $267 million (2015: $179.4 million) available for set off against future taxable profits. These tax losses expire over a 6 year period ending in 2024. These losses are subject to agreement with the respective tax authorities.



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6. Taxation (continued) 2016 2015 $ $

(c) Movement in deferred tax net balance:Net balance at 1 January 38,364 31,568Exchange rate and other adjustments (161) (18)Credit/(charge) to earnings 8,405 (14,938)Credit to other comprehensive income 2,508 21,752Net balance at 31 December (Note 6 (d)) 49,116 38,364

(d) Components of the deferred tax assets/(liabilities) are as follows:

Deferred tax assets:Tax losses carry forward 356,276 297,366Interest accrual 2,900 3,758Pension plan liabilities – 8,005Other post-retirement benefits 27,248 16,304Others 7,651 8,395Balance at 31 December 394,075 333,828Deferred tax liabilities:Property, plant and equipment (343,107) (291,953)Pension plan assets (1,035) –Others (817) (3,511)Balance at 31 December (344,959) (295,464)Net deferred tax assets 49,116 38,364



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7. Earnings per share 2016 2015 $ $

The following reflects the income and share data used in the earnings per share computation:Net profit for the year attributable to equity holders of the Parent 36,859 405,108Weighted average number of ordinary shares issued (net of treasury shares) (thousands of units) 371,030 339,675Basic and diluted earnings per share (Expressed in $ per share) $0.10 $1.19

The balance of the TCL Employee Share Ownership Plan relating to the cost of unal-located shares held by the Plan is presented as a separate component in equity. The weighted average number of unallocated shares of 3.618 million (2015: 3.752 million) held by the Plan during the year is deducted in computing the weighted average number of ordinary shares in issue. The Group has no dilutive potential ordinary shares in issue.



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8. Property, plant and equipment Plant, machinery and Office equipment furniture Capital Land and and motor and work in buildings vehicles equipment progress Total $ $ $ $ $At 31 December 2016Cost 444,589 3,352,021 59,433 213,395 4,069,438Accumulated depreciation and impairment (205,695) (2,020,703) (37,646) (139) (2,264,183)Net book amount 238,894 1,331,318 21,787 213,256 1,805,255

Net book amount1 January 2016 241,801 1,355,286 21,136 111,571 1,729,794Exchange rate adjustments 2,137 (2,060) (30) (929) (882)Additions and transfers 7,918 84,872 5,070 102,660 200,520Disposals and adjustments – (937) (46) (46) (1,029)Depreciation charge (12,962) (105,843) (4,343) – (123,148)31 December 2016 238,894 1,331,318 21,787 213,256 1,805,255

At 31 December 2015Cost 433,183 3,265,442 103,833 111,704 3,914,162Accumulated depreciation and impairment (191,382) (1,910,156) (82,697) (133) (2,184,368)Net book amount 241,801 1,355,286 21,136 111,571 1,729,794

Net book amount1 January 2015 250,950 1,405,187 20,798 59,095 1,736,030Exchange rate adjustments (3,169) (7,533) (128) (1,367) (12,197)Additions and transfers 5,612 53,738 4,125 54,042 117,517Disposals and adjustments – (503) (58) (199) (760)Depreciation charge (11,592) (95,603) (3,601) – (110,796)31 December 2015 241,801 1,355,286 21,136 111,571 1,729,794



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8. Property, plant and equipment (continued)In accordance with IAS 36: “Impairment of assets”, management performed an impair-ment test on Property, Plant and Equipment (PPE) and related assets of the Barbados subsidiary (ACCL) and recorded an impairment provision of $152.8 million in 2014. An-other impairment test was performed as at 31 December 2016 and no further provisions were recorded in 2016. The recoverable amount of $198.1 million as at 31 December 2016 was based on value in use and was determined at the level of the PPE and related asset. The pre-tax discount rate used in the impairment test was 16.06%. The terminal growth rate applied was 2% per annum. The determination of recoverable amount based on value in use is sensitive to the key assumptions relative to the discount rate and the determination of future cash flows.

9. Pension plans and other post-retirement benefitsThe Trinidad Cement Limited Employees’ Pension Fund Plan, a defined benefit plan, is sectionalised for funding purposes into three segments to provide retirement pensions to the retirees of Trinidad Cement Limited (“TCL”), TCL Packaging Limited (“TPL”) and Readymix (West Indies) Limited (“RML”). Another pension plan, resident in Barbados, covers the employees of Arawak Cement Company Limited and Premix and Precast Concrete Incorporated. Employees of TCL Ponsa Manufacturing Limited are paid directly by the company, an end of service lump sum payment. The Parent Company’s employees and employees of TCL Packaging Limited and Ready-mix (West Indies) Limited are members of the Trinidad Cement Limited Employees’ Pen-sion Fund Plan. This is a defined benefit Pension Plan which provides pensions related to employees’ length of service and basic earnings at retirement. The Plan’s financial funding position is assessed by means of triennial actuarial valuations carried out by an independent professional actuary. The Actuarial Valuation report as at 31 December 2015 revealed that the Trinidad Cement Limited section was in surplus by $77.1 million but the Readymix (West Indies) Limited and TCL Packaging Limited sections were in deficit by $6.1 million and $2.2 million respectively. The next triennial actuarial valuation is due as at 31 December 2018.The report recommended service contribution rates for TCL, RML and TPL as a percent-age of salaries at 10%, 17.4% and 25.7% respectively.Employees of Arawak Cement Company Limited are members of a defined benefit pen-sion plan, which became effective in September 1994. The Plan is established under an irrevocable trust and its assets are invested through an independently administered seg-regated fund policy. The triennial actuarial valuation was last carried out as at January 2013 and showed a funding surplus of $4.3 million. The actuary has recommended that the company contributes at the rate of 1% of members’ earnings.



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9. Pension plans and other post-retirement benefits (continued)The numbers below are extracted from information supplied by independent actuaries.

2016 2015 $ $

Pension plan assets/(liabilities) and other post-retirement obligations:Pension plan assets 37,256 5,390Pension plan liabilities (24,928) (32,025)Net pension plan assets/(liabilities) 12,328 (26,635)Other post-retirement obligations:Retiree’s medical benefit obligations (91,112) (65,217)Service benefit obligations (3,300) (3,366)Total other post-retirement obligations (94,412) (68,583)



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9. Pension plans and other post-retirement benefits (continued)(a) Changes in the defined benefit obligation and fair value of plan assets

Net Defined Fair value benefit benefit of plan asset/ obligation assets (liability) $ $ $ Balance at 1 January 2016 (990,125) 963,490 (26,635) Pension cost charged to profit or (loss) Current service cost (27,686) (2,137) (29,823) Net interest (49,933) 48,998 (935) Sub-total included in profit or (loss) (77,619) 46,861 (30,758) Re-measurement gains/(losses) in OCI Return on plan assets – (30,682) (30,682) Actuarial changes arising from changes in financial assumptions 63,059 – 63,059 Experience adjustments 26,120 – 26,120 Sub-total included in OCI 89,179 (30,682) 58,497 Other movements Contributions by employee (6,028) 6,028 – Contributions by employer – 10,928 10,928 Benefits paid 44,584 (44,584) – Other movements (1,911) 2,207 296 Sub-total – other movements 36,645 (25,421) 11,224 Balance at 31 December 2016 (941,920) 954,248 12,328

The Group expects to contribute $15.0 million to its defined benefit plan in 2017.The weighted average duration of the defined benefit obligations at 31 December 2016 ranges from 13.7 to 17.7 years (2015: 14.1 to 20.2 years).



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9. Pension plans and other post-retirement benefits (continued)(a) Changes in the defined benefit obligation and fair value of plan assets (continued)

Net Defined Fair value benefit benefit of plan asset/ obligation assets (liability) $ $ $ Balance at 1 January 2015 (945,204) 1,002,389 57,185 Pension cost charged to profit or (loss) Current service cost (27,625) (2,077) (29,702) Past service cost 2,618 – 2,618 Net interest (47,770) 51,017 3,247 Sub-total included in profit or (loss) (72,777) 48,940 (23,837) Re-measurement gains/(losses) in OCI Return on plan assets – (70,873) (70,873) Experience adjustments (1,637) – (1,637) Sub-total included in OCI (1,637) (70,873) (72,510) Other movements Contributions by employee (7,065) 7,065 – Contributions by employer – 12,482 12,482 Benefits paid 35,850 (35,850) – Other movements 708 (663) 45 Sub-total – other movements 29,493 (16,966) 12,527 Balance at 31 December 2015 (990,125) 963,490 (26,635)



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9. Pension plans and other post-retirement benefits (continued)(b) Changes in the other post-retirement benefits

2016 2015 $ $

Balance at 1 January (68,583) (50,800)Pension cost charged to profit or (loss) Current service cost (2,564) (2,042)Net interest (3,370) (2,493)Sub-total included in profit or (loss) (5,934) (4,535)Re-measurement (losses)/gains in other comprehensive income Actuarial changes arising from changes in demographic assumptions (10,591) –Actuarial changes arising from changes in financial assumptions 7,813 –Experience adjustments (19,525) (15,175)Sub-total included in OCI (22,303) (15,175)Other movements Benefits paid 2,408 1,927Sub-total – other movements 2,408 1,927Balance at 31 December (94,412) (68,583)

(c) The major categories of plan assets of the fair value of the total plan assets are, as follows:

2016 2015Cash and cash equivalents 6% 5%Equities 42% 42%Bonds 52% 51%Mortgages 1% 1%Real estate 0% 0%Other 0% 1%

Overseas equities are quoted on actively traded markets. Local equities are quoted on relatively illiquid markets.



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9. Pension plans and other post-retirement benefits (continued)(d) Principal actuarial assumptions used in determining pension plans and

other post-retirement benefits for the Group:Pension plansThe actual return on plan assets for 2016 amounted to $18,335 (2015: $35,499).

2016 2015Discount rate at 31 December: Trinidad Cement Limited Employees’ Pension Fund Plan 5.50% 5.00% Arawak Cement Company Limited Pension Fund Plan 7.75% 7.75%Future salary increases: Trinidad Cement Limited Employees’ Pension Fund Plan 5.00% 5.00% Arawak Cement Company Limited Pension Fund Plan 2.50% 6.75%Post-retirement mortality for pensioners at 60: Male 21.0 21.0 Female 25.1 25.1

A quantitative sensitivity analysis for significant assumptions as at 31 December 2016 is as shown below:

Life Future expectancy

Assumptions Discount salary of pensioners rate increases increase 1% 1% 1% 1% by

Sensitivity level increase decrease increase decrease 1 yearImpact on the defined benefit obligation (114,502) 144,032 45,907 (39,489) 12,829

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.



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9. Pension plans and other post-retirement benefits (continued)(d) Principal actuarial assumptions used in determining pension plans and

other post-retirement benefits for the Group: (continued)Other post-retirement obligations:

2016 2015Discount rate at 31 December 5.5% 5%Future medical claims inflation 5% 5%Post-retirement mortality for pensioners at 60: Male 21.0 21.0 Female 25.1 25.1A quantitative sensitivity analysis for significant assumptions as at 31 December 2016 is as shown below:

Assumptions Discount Future medical Life rate claims inflation expectancy increase 1% 1% 1% 1% bySensitivity level increase decrease increase decrease 1 yearImpact on the defined benefit obligation (13,092) 16,658 16,218 (12,947) 3,240The 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 Group expects to contribute $2.0 million to its other post-retirement benefits in 2017.

10. Inventories 2016 2015 $ $

Plant spares 105,523 153,108Raw materials and work in progress 139,787 155,733Consumables 75,342 122,177Finished goods 41,869 49,906 362,521 480,924

Inventories are shown as net of obsolescence provision of $18.8 million (2015: $13.3 million) in respect of plant spares and consumables.



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10. Inventories (continued)In June 2016, the Group undertook a comprehensive review of its inventory of spares and consumables and has determined the optimal stockholding and reorder levels for the Group. As a result the Group has written down overstocked spares and consumables to their net realisable value in accordance with IAS 2: “Inventories” and recorded an ex-pense of $72 million. This expense has been accounted for as a change in an accounting estimate consistent with IAS 8: “Accounting Policies, Changes in Accounting Estimates and Errors” resulting from new developments in relation to the implementation of a more robust preventative maintenance programme and closer proximity to wider operational and technical capabilities.

11. Receivables and prepayments 2016 2015 $ $

Trade receivables 141,075 173,862Less: provision for doubtful debts (43,669) (38,379)Trade receivables (net) 97,406 135,483Sundry receivables and prepayments 25,517 46,303 Deferred expenditure 1,054 6,641Taxation recoverable 12,672 6,219 136,649 194,646

Included within trade receivables are balances due from the CEMEX Group of $1.0 mil-lion (2015: $1.5 million) (see Note 4).

2016 2015 $ $

Presented in the consolidated statement of financial position as follows:Non-current 1,966 4,483Current 134,683 190,163 136,649 194,646



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11. Receivables and prepayments (continued)Included within trade receivables are balances due from three (3) classes of customers with agreed repayment terms over one year and therefore $2.0 million (2015: $4.5 mil-lion) is presented as a non-current asset. Past due but not impaired Neither past 1-90 91-180 Over Total due nor impaired days days 180 days $ $ $ $ $2016 97,406 49,156 23,998 7,230 17,0222015 135,483 79,786 19,446 12,018 24,233As at 31 December, the impairment provision for trade receivables assessed to be doubt-ful was $43.7 million (2015: $38.4 million). Movements in the provision for impaired re-ceivables were as follows:

2016 2015 $ $

At 1 January 38,379 36,616Charge for the year 10,961 7,964Unused amounts reversed/written off (5,671) (6,201)At 31 December 43,669 38,379

12. Cash at bank and on handCash at bank earns interest at floating rates based on daily bank deposit rates.

13. Payables and accruals 2016 2015 $ $

Sundry payables and accruals 278,188 325,194 Trade payables 178,909 161,798Interest and other finance charges 9,704 12,133Taxation payable 673 10,277Statutory obligations 5,127 10,576 472,601 519,978

Included within trade payables are balances due to the CEMEX Group of $4.2 million (2015: $1.5 million). See Note 4.



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14. Borrowings 2016 2015 $ $

Maturity of borrowings:One year 128,850 189,521Two to five years 839,646 976,541Gross borrowings 968,496 1,166,062Current portion of total borrowings (128,850) (189,521)Borrowings non-current portion 839,646 976,541

Currency denomination of borrowingsUS dollar 728,690 867,206Local currencies 239,806 298,856 968,496 1,166,062

Interest rate profileFixed rates – –Floating rates 968,496 1,166,062 968,496 1,166,062

2016 2015The weighted average effective interest rate for borrowings is: 9.10% 9.60%



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14. Borrowings (continued)On 11 August 2015 the Company negotiated a 5-year term loan agreement (the “Amend-ed and Restated Credit Agreement”). As at 31 December 2016, total borrowings of the Company were to $1.0 billion (2015: $1.2 billion). The key terms of the agreement are: (i) The loan was for an original Principal amount of US$200 million.(ii) The Principal was disbursed in a combination of USD and TTD currencies and

bears interest at a rate of LIBOR + 5.50% (effective 6.32% per annum) on the USD amounts and 3 Month TT Treasury Bill + 5.50% (effective 6.70% per annum) on the TTD amounts, with a floor of 0.75% for LIBOR and the 3 Month TT Treasury Bill.

(iii) Principal and interest payments commenced on 11 November 2015 and are pay-able quarterly thereafter with the last bullet payment of 30% of the debt due on 11 August 2020.

(iv) The loan is secured by a charge on the assets of the TCL Group.(v) Compliance with certain financial covenants for the TCL Group commencing from

30 September 2015 and quarterly thereafter. This includes a consolidated interest coverage ratio (ratio of EBITDA to interest), consolidated total debt leverage ratio (ratio of Total Debt to EBITDA) and consolidated senior debt leverage ratio (ratio of Senior Debt to EBITDA).

(vi) The Group’s annual capital expenditure cannot exceed US$30 million in each of the years of 2016 and 2017 and cannot exceed US$20 million in any other calen-dar year.

(vii) Dividends may be paid by TCL if both before and after the payment of a dividend, Total Debt/EBITDA is less than or equal to 2.75. If Total Debt/EBITDA is greater than 2.75 but less than 3.00 a maximum dividend of US$3 million is permissible in any fiscal year.

At 31 December 2016, the TCL Group was compliant with the terms and covenants of the Amended and Restated Credit Agreement.



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15. Stated capital and other reserves 2016 2015 $ $

(a) Stated capitalAuthorisedAn unlimited number of ordinary and preference shares of no par valueIssued and fully paid374,647,704 (2015: 374,647,704) ordinary shares of no par value 827,732 827,732

On 31 March 2015, the Company issued 124.9 million ordinary shares under a Rights Issue. The net proceeds received from this Rights Issue of ordinary shares was $361.5 million ($364.5 million gross). Transaction costs of $3.0 million were incurred in this transaction and is accounted for net against the proceeds of the rights issue. A reconciliation of the number of shares and dollar amount of issued and paid share capital during 2015 is presented below:

Thousands $ of shares

At 1 January 2015 249,765 466,206Issued on 31 March 2015 124,883 361,526At 31 December 2016 and 2015 374,648 827,732

On 9 February 2015 a special meeting of shareholders of the Company was con-vened and a resolution was passed to remove the restriction in the Articles of Con-tinuance which prohibited any person from holding more than 20% of the issued share capital of the Company or more than 20% of the total voting rights of the Company.

(b) Other reserves 2016 2015 $ $

Year ended 31 December Balance at 1 January (243,485) (228,187)Other comprehensive loss:Currency translation (10,820) (15,298)Balance at 31 December (254,305) (243,485)



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15. Stated capital and other reserves (continued)(b) Other reserves (continued)

Nature and purpose of reservesForeign currency translation accountThis reserve records exchange differences arising from the translation of the finan-cial statements of foreign subsidiaries.

(c) Other comprehensive income net of taxThe disaggregation of changes of other comprehensive income/(loss) by type of reserve is shown below:

Foreign currency translation Retained account earnings Total $ $ $

Year ended 31 December 2016Other comprehensive income/(loss):Currency translation (10,820) – (10,820)Re-measurement gains on pension plans and other post-retirement benefits – 39,751 39,751 (10,820) 39,751 28,931

Year ended 31 December 2015Other comprehensive loss:Currency translation (15,298) – (15,298)Re-measurement losses on pension plans and other post-retirement benefits – (65,020) (65,020) (15,298) (65,020) (80,318)



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16. Dividends 2016 2015 $ $

2016: 4¢ per share (2015: 0¢) 14,986 –

During the year, the Parent Company declared and paid a dividend of $15.0 million (2015: Nil).During the year a subsidiary paid dividends of $0.368 million (2015: $0.984 million) to non-controlling interests.

17. Employee share ownership plan (ESOP) 2016 2015 Thousands of shares

Employee share ownership planNumber of shares held - unallocated (thousands) 2,986 3,752Number of shares held - allocated (thousands) 3,306 4,216 6,292 7,968

2016 2015 $ $

Fair value of shares held - unallocated 13,138 14,970Fair value of shares held - allocated 14,548 16,822 27,686 31,792Cost of unallocated ESOP sharesBalance at 1 January 25,299 25,299Share-based allocations 4,450 –Balance at 31 December 20,849 25,299Charge to earnings for provision of shares allocated to employees 1,425 400

The Parent Company operates an Employee Share Ownership Plan (ESOP) to give effect to a contractual obligation to pay profit sharing bonuses to employees via shares of the Parent Company based on a set formula. Employees may acquire additional com-pany shares to be held in trust by the Trustees but the costs of such purchases are for the employee’s account. All permanent employees of the Parent Company and certain subsidiaries are eligible to participate in the Plan that is directed, including the voting of shares, by a Management Committee comprising management of the Parent Company and the general employee membership. Independent Trustees are engaged to hold in trust all shares in the Plan as well as to carry out the necessary administrative functions.



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17. Employee share ownership plan (ESOP) (continued)Shares acquired by the ESOP are funded by the Parent Company’s contributions. The cost of the shares so acquired and which remain unallocated to employees have been recognised in shareholders’ equity under ‘Unallocated ESOP Shares’. The fair value of shares was derived from the closing market price prevailing on the Trinidad and Tobago Stock Exchange at the year-end.

18. Capital commitments and contingent liabilitiesCapital commitmentsThe Group has contractual capital commitments of $113.1 million as at December 2016 (2015: $17.2 million).

Contingent liabilitiesThe Group operates in a regulatory and legal environment that, by nature, has an ele-ment of litigation risk inherent to its operations. As a result, it is involved in various litiga-tion and regulatory investigations and proceedings both in Trinidad and Tobago and in other jurisdictions, arising in the ordinary course of the Group’s business.There are contingent liabilities amounting to $88 million (2015: $93.3 million) for various claims, assessments, bank guarantees, and bonds against the Group. Included therein, are several pending legal actions and other claims in which the Group is involved. Based on the information provided by the Group’s attorneys at law, owing to the uncertainty of the outcome of these possible liabilities, no provision has been made in these consolidat-ed financial statements in respect of these matters.The Board of Inland Revenue (the “BIR”) has disallowed expenditure claimed by the Parent Company in respect of the following fiscal years:

Fiscal years Disallowed expenditure2007 $102.1 million2008 $284.4 million2009 $260.6 million2010 $247.4 million

This has been objected to as the Parent Company is of the view that its claim is well sup-ported in law and will defend its position in the resolution process. The BIR has confirmed their assessment in respect of the tax years of 2007 and 2008. The Parent Company has filed notices of objections with the Tax Appeal Board and these matters are being heard. No provision has been made in the consolidated financial statements in respect of this matter as the possible liability is not considered probable. Subject to the future resolution of this matter, there may be a reduction in the accumulated tax losses of the Parent Company and/or future tax liabilities in respect of these years.



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18. Capital commitments and contingent liabilities (continued)Contingent liabilities (continued)The subsidiary in Guyana was given a commitment by the Government of Guyana in 2006 to have the corporate tax rate for non-commercial companies of 30 percent made applicable to its operations. Subsequent action by the Guyana Revenue Authority (the GRA) held that the corporate tax rate for commercial companies of 40 percent was ap-plicable. The subsidiary computes its corporation tax liability on the basis of the origi-nal commitment received while it contests through court action the failure to honour the original commitment. During the year the GRA raised assessments of $0.860 million for additional tax payments relative to the years 2012 to 2014. The subsidiary has objected to the assessments and has been granted an Order Nisi in the application directed to the Commissioner General of the GRA to show cause why his decision to maintain the assessment of corporate tax at the commercial rate should not be quashed. No provision has been made in these consolidated financial statements for the higher tax rate as the possible liability is not considered probable.

19. Cash generated from operations Notes 2016 2015 $ $

Profit before taxation 89,627 487,494Adjustments to reconcile profit before taxation to net cash generated by operating activities:Depreciation 8 123,148 110,796Stockholding and restructuring costs 10 72,026 –Finance costs (net) 5 134,798 164,630Debt refinancing gains (net) 5 – (205,819)ESOP share allocation and sale of shares net of dividends 17 3,030 –Pension plan expense 9 (a) 30,758 23,837Other post-retirement benefits expense 9 (b) 5,934 4,535Loss on disposal of property, plant and equipment 3 163 164 459,484 585,637



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19. Cash generated from operations (continued) 2016 2015 $ $

Changes in net current assetsDecrease in inventories 48,958 30,801Decrease in receivables and prepayments 79,501 38,111Decrease in payables and accruals (57,139) (21,530)Cash generated from operations 530,804 633,019

20. Fair valuesThe fair values of cash at bank and on hand, receivables, payables and current portion of borrowings approximate their carrying amounts due to the short-term nature of these instruments. The fair values of these instruments and long term borrowings are present-ed below: Carrying Fair Carrying Fair amount value amount value 2016 2016 2015 2015 $ $ $ $Financial assets: Cash at bank 186,546 186,546 288,500 288,500Trade receivables 97,406 97,406 135,483 135,483Financial liabilities: Borrowings 968,496 968,496 1,166,062 1,166,062Trade payables 178,909 178,909 161,798 161,798Interest and finance charges 9,704 9,704 12,133 12,133

21. Subsidiary undertakingsThe Group’s subsidiaries are as follows:Company Country of Ownership incorporation level 2016 2015Readymix (West Indies) Limited Trinidad and Tobago 71% 71%TCL Packaging Limited Trinidad and Tobago 80% 80%TCL Ponsa Manufacturing Limited Trinidad and Tobago 65% 65%TCL Leasing Limited Trinidad and Tobago 100% 100%Caribbean Cement Company Limited Jamaica 74% 74%Jamaica Gypsum and Quarries Limited Jamaica 74% 74%Rockfort Mineral Bath Complex Limited Jamaica 74% 74%Caribbean Gypsum Company Limited Jamaica 74% 74%Arawak Cement Company Limited Barbados 100% 100%



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21. Subsidiary undertakings (continued)Company Country of Ownership incorporation level 2016 2015Premix & Precast Concrete Incorporated Barbados 42.6% 42.6%TCL Trading Limited Anguilla 100% 100%TCL (Nevis) Limited Nevis 100% 100%TCL Guyana Inc. Guyana 80% 80%Arawak Concrete Solutions Limited Barbados 100% –TTLI Trading Limited Barbados 100% –Effective September 2014, the Board of Directors discontinued the operations of Premix & Precast Concrete Incorporated.Arawak Concrete Solutions Limited and TTLI Trading Limited were incorporated during the year.

22. Material partly-owned subsidiariesThe financial information of subsidiaries that have material non-controlling interests is provided below:Proportion of equity held by non-controlling interests:

Name Country of incorporation and operation 2016 2015Caribbean Cement Company Group Jamaica 26% 26%Readymix (West Indies) Limited Trinidad & Tobago 29% 29%TCL Packaging Limited Trinidad & Tobago 20% 20%TCL Ponsa Manufacturing Limited Trinidad & Tobago 35% 35%TCL Guyana Inc. Guyana 20% 20%



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22. Material partly-owned subsidiaries (continued) Accumulated balances of material non-controlling interests:

2016 2015 $ $

Caribbean Cement Company Limited (47,157) (62,253)Readymix (West Indies) Limited 23,189 26,976TCL Packaging Limited 11,575 11,552TCL Ponsa Manufacturing Limited 3,566 2,890TCL Guyana Inc. 8,606 8,512 (221) (12,323)

Profit/(loss) allocated to material non-controlling interests:Caribbean Cement Company Limited 17,527 21,458Readymix (West Indies) Limited (2,600) 2,671TCL Packaging Limited 57 (636)TCL Ponsa Manufacturing Limited 515 (697)TCL Guyana Inc. 64 876 15,563 23,672

The summarised financial information of these subsidiaries are provided below. This in-formation is based on amounts before inter-company eliminations.Summarised statement of income for 2016: Caribbean Readymix Cement (West TCL TCL Ponsa TCL Company Indies) Packaging Manufacturing Guyana Limited Limited Limited Limited Inc. $ $ $ $ $Revenue 838,432 139,936 57,077 24,059 150,265Operating expenses (765,522) (149,440) (59,416) (22,949) (148,783)Finance costs (net) (2,625) (203) 2,782 362 (542)Profit/(loss) before tax 70,285 (9,707) 443 1,472 940Income tax (2,612) 785 (157) – (621)Total comprehensive income 53,597 (13,035) 110 1,931 2,308Attributable to non-controlling interests 15,096 (3,787) 22 676 462



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22. Material partly - owned subsidiaries (continued)Summarised statement of income for 2015: Caribbean Readymix Cement (West TCL TCL Ponsa TCL Company Indies) Packaging Manufacturing Guyana Limited Limited Limited Limited Inc. $ $ $ $ $Revenue 841,810 216,807 49,386 14,487 92,919Operating expenses (748,204) (203,081) (55,077) (16,678) (85,803)Finance costs (net) (925) (426) 2,615 199 (390)Profit/(loss) before tax 92,681 13,300 (3,076) (1,992) 6,726Income tax (9,833) (3,863) (106) – (2,345)Total comprehensive income 64,532 8,801 (5,746) (2,640) 4,771Attributable to non-controlling interests 17,760 2,486 (1,149) (924) 954

Summarised statement of financial position as at 31 December 2016:Inventories, cash and bank balances and other current assets 194,924 94,767 84,230 17,222 36,644 Property, plant and equipment and other non-current assets 403,145 38,932 105 2,494 40,205 Trade and other payables and other current liabilities (140,945) (48,521) (21,398) (6,227) (31,860)Interest bearing loans, borrowings and deferred tax and other non-current liabilities (27,007) 1,359 (5,062) (3,300) (1,961)Total equity 430,117 86,537 57,875 10,189 43,028Attributable to: Equity holders of parent 477,274 63,348 46,300 6,623 34,422 Non-controlling interests (47,157) 23,189 11,575 3,566 8,606 430,117 86,537 57,875 10,189 43,028



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22. Material partly-owned subsidiaries (continued) Summarided statement of financial position as at 31 December 2015: Caribbean Readymix Cement (West TCL TCL Ponsa TCL Company Indies) Packaging Manufacturing Guyana Limited Limited Limited Limited Inc. $ $ $ $ $Inventories, cash and bank balances and other current assets 294,130 108,600 79,101 15,004 19,374 Property, plant and equipment and other non-current assets 348,806 33,770 (708) 2,110 39,502 Trade and other payables and other current liabilities (237,176) (40,258) (17,769) (5,490) (14,366)Interest bearing loans, borrowings and deferred tax and other non-current liabilities (34,674) (2,540) (2,859) (3,366) (1,949)Total equity 371,086 99,572 57,765 8,258 42,561 Attributable to: Equity holders of parent 433,339 72,596 46,213 5,368 34,049 Non-controlling interests (62,253) 26,976 11,552 2,890 8,512 371,086 99,572 57,765 8,258 42,561

Summarised cash flow information for the year ended 31 December 2016:Operating 91,502 7,739 9,161 (600) 16,720 Investing (90,273) (16,215) (1,840) (593) (2,201)Financing (10,923) – – – (1,841)Net (decrease)/increase in cash and cash equivalents (9,694) (8,476) 7,321 (1,193) 12,678



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22. Material partly - owned subsidiaries (continued)Summarised cash flow information for the year ended 31 December 2015: Caribbean Readymix Cement (West TCL TCL Ponsa TCL Company Indies) Packaging Manufacturing Guyana Limited Limited Limited Limited Inc. $ $ $ $ $Operating 154,853 60,055 5,777 3,822 (1,221)Investing (44,005) (10,692) (2,704) (85) (732)Financing (70,628) (4,778) (3,844) – –Net (decrease)/increase in cash and cash equivalents 40,220 44,585 (771) 3,737 (1,953)

23. Financial risk managementIntroductionThe Group’s activities expose it to a variety of financial risks, including the effects of changes in debt prices, interest rates, market liquidity conditions and foreign currency exchange rates which are accentuated by the Group’s foreign operations, the earnings of which are denominated in foreign currencies. Accordingly, the Group’s financial perfor-mance and position are subject to changes in the financial markets. Overall risk manage-ment measures are focused on minimising the potential adverse effects on the financial performance of the Group of changes in financial markets.

Risk management structureThe Board of Directors is responsible for the overall risk management approach and for approving the risk strategies, principles and policies and procedures. Day to day adherence to risk principles is carried out by the executive management of the Group in compliance with the policies approved by the Board of Directors.

Credit riskCredit risk is the risk that a counter-party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risks from its operating activities (primarily for trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.



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23. Financial risk management (continued)Credit risk (continued)Significant changes in the economy, or in the state of a particular industry segment that represents a concentration in the Group’s portfolio, could result in losses that are dif-ferent from those provided at year end. Management therefore carefully manages its exposure to credit risk.The Group structures the level of credit risk it undertakes by placing limits on the amount of risk accepted in relation to one customer, or group of customers, and to geographical and industry segments. Such risks are monitored on an ongoing basis and limits on the levels of credit risk that the Group can engage in are approved by the Board of Directors.Exposure to credit risk is further managed through regular analysis of the ability of debt-ors and financial institutions to settle outstanding balances, meet capital and interest re-payment obligations and by changing these lending limits when appropriate. The Group does not generally hold collateral as security.The following table shows the maximum exposure to credit risk for the components of the consolidated statement of financial position:

Gross maximum exposure 2016 2015 $ $

Trade receivables 97,406 135,483Cash at bank 186,546 288,500Credit risk exposure 283,952 423,983

Credit risk related to receivablesCustomer credit risk is managed in accordance with the Group’s established policy, pro-cedures and control relating to customer credit risk management. Credit limits are es-tablished for all credit customers based on internal rating criteria. Outstanding customer receivables are regularly monitored. At 31 December 2016, the Group had thirteen (13) customers (2014: twelve (12) customers) that owed the Group more than $2 million each and which accounted for 76% (2015: 61%) of all trade receivables.

Credit risk related to cash at bankCredit risks from balances with banks and financial institutions are managed in accor-dance with Group policy. Investments of surplus funds are made only with approved counterparties and within limits assigned to each counterparty. Counterparty limits are reviewed by the Group’s Board of Directors on an annual basis. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through potential counterparty failure.



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23. Financial risk management (continued)Liquidity riskThe Group monitors its risk to a shortage of funds by considering planned and proba-ble expenditures against projected cash inflows from operations, from the settlement of financial assets such as accounts receivable and levels of cash sales. The Group’s objective is to fund its operations and activities within the framework of the terms of the debt restructuring agreed with lenders. Working credit lines have been withdrawn and access to longer term credit funding has been severely restricted. Accordingly, the Group is dependent on internally generated funds to cover most of its funding needs.The table below summarises the maturity profile of the Group’s financial liabilities at 31 December: On demand 1 year 2 to 5 years > 5 years Total2016 $ $ $ $ $Borrowings – 187,335 1,003,264 – 1,190,599 Interest and finance charges – 9,704 – – 9,704 Trade payables – 178,909 – – 178,909 – 375,948 1,003,264 – 1,379,212

2015Borrowings – 261,050 1,241,228 – 1,502,278Interest and finance charges – 12,182 – – 12,182Trade payables – 161,798 – – 161,798 – 435,030 1,241,228 – 1,676,258

Capital managementThe primary objective of the Group’s capital management is to ensure that it maintains a healthy financial position in order to support its business activities and maximise shareholder value. The Group is required to comply with several financial ratios and other quantitative targets in accordance with loan agreements. The Group is required to achieve Leverage, Debt Service and Net Worth financial ratio targets in accordance with the revised terms of the debt restructuring agreed with lenders. At year end the Group was in compliance with all terms and conditions of the Amended and Restated Credit Agreement.



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23. Financial risk management (continued)Foreign currency riskCurrency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. Such exposure arises from sales or purchases by an operating unit in currencies other than the unit’s functional currency. Management mon-itors its exposure to foreign currency fluctuations and employs appropriate strategies to mitigate any potential losses. Risk management in this area is active to the extent that hedging strategies are available and cost effective.The following table demonstrates the sensitivity to a reasonably possible change in the exchange rates, with all other variables held constant, of profit before tax (due to chang-es in the fair value of monetary assets and liabilities) and the Group’s equity:

Increase/decrease Effect on Effect on in US/Euro rate profit before tax equity $ $2016US dollar +1% (6,033) (4,525) –1% 6,033 4,525

Euro +1% (73) (55) –1% 73 55

2015US dollar +1% (7,047) (5,285) –1% 7,047 5,285

Euro +1% 5 4 –1% (5) (4)

The effect on profit is shown net of US dollar financial assets (2016: $146.1 million; 2015: $207.0 million), and liabilities (2016: $749.3 million; 2015: $911.7 million) and EURO financial assets (2016: $0.5 million; 2015: nil), and net financial liabilities (2016: $7.9 million; 2015: $0.5 million).



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23. Financial risk management (continued)Foreign currency risk (continued)The aggregate value of financial assets and liabilities by reporting currency are as fol-lows: TTD USD JMD BDS Other Total2016 $ $ $ $ $ $ASSETS Cash at bank 16,161 120,443 33,886 13 16,043 186,546Trade receivables 40,859 25,640 20,690 2,081 8,136 97,406 57,020 146,083 54,576 2,094 24,179 283,952LIABILITIES Borrowings 239,805 728,691 – – – 968,496Interest and finance charges 2,206 7,498 – – – 9,704Trade payables 44,419 16,751 99,895 5,691 12,153 178,909 286,430 752,940 99,895 5,691 12,153 1,157,109NET (LIABILITIES)/ASSETS (229,410) (606,857) (45,319) (3,597) 12,026 (873,157)

2015ASSETS Cash at bank 99,623 148,806 32,432 1,654 5,985 288,500Trade receivables 42,019 58,194 27,798 3,266 4,206 135,483 141,642 207,000 60,230 4,920 10,191 423,983LIABILITIES Borrowings 317,460 848,602 – – – 1,166,062Interest and finance charges 2,822 9,311 – – – 12,133Trade payables 32,083 53,823 46,883 24,769 4,240 161,798 352,365 911,736 46,883 24,769 4,240 1,339,993NET (LIABILITIES)/ASSETS (210,723) (704,736) 13,347 (19,849) 5,951 (916,010)

Other currencies include the Euro.



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23. Financial risk management (continued)Interest rate riskInterest rate risk for the Group centers on the risk that debt service cash outflow will increase due to changes in market interest rates. At the statement of financial position date, the Group’s exposure to changes in interest rates relates primarily to bank loans which have a floating interest rate. The Group’s policy is to manage its interest cost using a mix of fixed, variable rate debt and financial derivatives.The interest rate exposure of borrowings is as follows:

2016 2015 $ $

At floating rates 968,496 1,166,062

Interest rate risk tableThe following table shows the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, of the Group’s profit before tax:

Increase/decrease Effect on in basis points profit before tax $

2016 +100 (9,684) –100 9,6842015 +100 (11,661) –100 11,661



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24. Financial information by segmentThe Group is organised and managed on the basis of the main product lines provid-ed which are cement, concrete and packaging. Management records and monitors the operating results of each of the business units separately for the purpose of making decisions about resource allocations and performance assessment. Transfer pricing be-tween operating segments is on an arm’s length basis. 24.1 Operating segment information

Consolidation Cement Concrete Packaging adjustments Total2016 $ $ $ $ $Total revenue 2,019,321 139,936 80,288 – 2,239,545Inter-segment revenue (279,428) – (73,104) – (352,532)Third party revenue 1,739,893 139,936 7,184 – 1,887,013Depreciation 117,982 6,859 2,032 (3,725) 123,148Profit/(loss) before tax 25,623 (9,730) 1,915 71,819 89,627Segment assets 3,556,747 140,617 104,051 (879,113) 2,922,302Segment liabilities 2,602,229 49,788 35,987 (782,608) 1,905,396Capital expenditure 177,804 20,282 2,434 – 200,520Operating cash flows 266,514 7,739 8,561 83,427 366,241Investing cash flows (177,053) (16,215) (2,433) (4,106) (199,807)Financing cash flows (189,084) – – (87,403) (276,487)Net (decrease)/ increase in cash and cash equivalents (99,623) (8,476) 6,128 (8,082) (110,053)



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24. Financial information by segment (continued)24.1 Operating segment information (continued)

Consolidation Cement Concrete Packaging adjustments Total2015 $ $ $ $ $Total revenue 2,202,494 216,716 62,695 – 2,481,905Inter-segment revenue (309,972) – (56,487) – (366,459)Third party revenue 1,892,522 216,716 6,208 – 2,115,446Depreciation 106,561 6,596 1,503 (3,864) 110,796Profit/(loss) before tax 676,731 13,185 (5,068) (197,354) 487,494Segment assets 3,713,276 147,289 96,728 (924,211) 3,033,082Segment liabilities 2,764,719 43,425 30,704 (756,736) 2,082,112Capital expenditure 103,962 10,692 2,863 – 117,517Operating cash flows 446,667 60,055 9,599 (47,061) 469,260Investing cash flows (102,539) (10,692) (2,789) (1,192) (117,212)Financing cash flows (157,961) (4,778) 28,250 (25,503) (159,992)Net increase in cash and cash equivalents 185,937 3,585 2,965 (431) 192,056

24.2 Geographical segment information Additions Additions Non- Non- property property current current plant and plant and Revenue Revenue assets assets equipment equipment 2016 2015 2016 2015 2016 2015 $ $ $ $ $ $Trinidad and Tobago 668,958 878,550 1,244,980 1,257,353 79,330 62,488Jamaica 771,733 679,194 385,418 328,601 90,272 44,235Barbados 39,523 93,059 135,574 108,726 28,716 9,172Other countries 406,799 464,643 41,249 39,597 2,202 1,622Group total 1,887,013 2,115,446 1,807,221 1,734,277 200,520 117,517

The revenue information above represents third party revenue based on the loca-tion of the customers’ operations. Other countries include Guyana, Venezuela, the OECS islands and Brazil. Non-current assets comprise property, plant and equipment and receivables.



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25. Operating LeaseOther operating leases represents the lease commitments of the Group. The accumu-lated future minimum lease payments are as below:

2016 2015 $ $

Within one year 3,485 5,353After one year, but less than five years 4,392 5,620More than five years 5,304 5,858 13,181 16,831

Operating lease expenses amounting to $5.0 million (2015: $5.1 million) are included within the other operating expenses

26. Subsequent eventsOn 24 January 2017 CEMEX, S.A.B. de C.V, through its indirect subsidiary Sierra Trad-ing acquired 113 million of the ordinary shares of Trinidad Cement Limited and on that date increased their shareholding from 39.5% to a majority stake of 69.8% of the total issued ordinary share of Trinidad Cement Limited. As a result of this transaction the TCL group and the Company became a subsidiary of Sierra Trading and as at 24 January 2017, CEMEX, S.A.B. de C.V is the ultimate parent of the TCL group and the Company.

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Documents

ANNUAL REPORT2016 - TCL Group Annual Report 2016.pdf8 TCL GROUP – ANNUAL REPORT 2016 SHARE & PERFORMANCE HIGHLIGHTS TTSE - Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Volume - TCL