Cyprus: New Financial Reporting Provisions Introduced

Last Updated: 8 May 2017
Article by Stella Koukounis


On September 23, 2016 Law 97(I)/2016 – the third amendment to the Companies Law (Cap 113) – took effect. Law 97(I)/2016 substantially amends the information which must be included in a company's financial statement reports. The director's report has effectively been replaced by a broader management report, which aligns with the increased transparency required in financial dealings. Further, the amendment enacts the EU Accounting Directive (2013/34/EC) regarding the submission of a company's:

  • annual financial statements;
  • consolidated financial statements; and
  • relevant financial reports.

Key amendments

The following terms have been amended:

  • The term 'international accounting standards' has been replaced with the term 'international financial reporting standards'.
  • The term 'organised market' has been replaced with the term 'organised or regulated market as defined by Section 2 of the law, which provides for the provision of investment services, exercise of investment activities and the operation of regulated markets'.
  • The term 'entity of public interest' has been introduced.
  • The term 'connected companies' has been introduced, defined as "any two or more companies within one group of companies".

Annual returns
Section 121(a) governing the obligation to file annual returns with the Registrar of Companies has been amended by:

  • the introduction of Sub-clause(a)(ii); and
  • the introduction of Part 13, which includes a requirement to attach to the annual return a consolidated report on payments to governments as per the Regulations on Payments to Governments, which were adopted in 2016.

Company definitions
The new Section 141A provides the following definitions:

  • 'Small-sized companies' are companies that fail to meet at least two of the following criteria:

    • a total balance sheet of €4 million;
    • net revenue of €8 million; and
    • an average of 50 employees.
  • 'Medium-sized companies' are companies other than small-sized companies that fail to meet at least two of the following criteria:

    • a total balance sheet of €20 million;
    • net revenue of €40 million; and
    • an average of 250 employees.
  • 'Large-sized companies' are companies which surpass at least two of the following criteria:

    • a total balance sheet of €20 million;
    • net revenue of €40 million; and
    • an average of 250 employees.

Preparation of consolidated financial statements
The new Section 142A provides exceptions to the preparation of consolidated financial statements, whereas amendments to the existing Section 142 provide the grounds on which consolidated financial statements must be prepared and submitted.

Management report
The new Section 151 outlines the information to be included in the management or consolidated management report. The report is intended to provide sufficient information and transparency regarding a company or group of companies' performance and operations and possible risks that may affect its performance and growth. The information that must be included is particularly relevant to companies whose shares are listed in a regulated market. In such cases, the company or group must attach a corporate governance report to its management report.

The management report must outline expected developments that will affect the company or group's financial reporting. Relevant information that must be provided includes:

  • an outline of the company or group's activities and any foreseeable risks that may affect performance;
  • information regarding research and development;
  • information regarding business that is conducted through branches of the company or group;
  • changes to share capital;
  • adverse events that may affect the company or group's ability to finance its operations, obtain credit and meet its financial obligations;
  • change in the composition of the company or group's board of directors; and
  • explanations and justifications on the distribution of profit or absorption of losses.

For companies whose shares are listed in a regulated market, the new Section 151 requires the management report to refer to the internal compliance and corporate governance procedures followed. Further, there is an obligation to report:

  • any participation (direct or indirect);
  • any voting restrictions; and
  • the regulations regarding the appointment or replacement of board members or changes to the company's articles of association.

A company or group of companies' directors are collectively responsible for ensuring that the management report is compiled and produced in accordance with the Companies Law and the Law on Requirements for Transparency (Securities Negotiated in a Regulated Market). They are also personally liable for failure to comply with the Companies Law. The publication of the management or consolidated management report contrary to the law constitutes a criminal offence and on conviction a fine of €855 will be imposed on the company and each of its officers. Failure to prepare a management report also constitutes a criminal offence and may lead to imprisonment of the company or group's officers and a maximum fine of €17,000.

Financial reports
The new Part 13 includes regulations regarding the information that must be included in the payment reports provided by companies or groups of companies to governments. Such a report must be filed alongside the company or group's annual return to the Registrar of Companies within 28 days from the date on which it is drafted. In accordance with the law, the reporting must concern the financial year starting January 1 2016. Failure to prepare the payment report constitutes a criminal offence and on conviction of the company or group's officers, the Registrar of Companies can impose an administrative fine of up to €8,000.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions