4.1 Consolidation

4.1.1 Subsidiaries

Subsidiaries are all the companies, which the parent has the power to control directly or indirectly

through other subsidiaries. The Company has and exercises control through its ownership of the

majority of the subsidiaries’ voting rights. The companies also considered subsidiaries are those in

which the Company, being their single major shareholder, has the ability to appoint the majority of the

members of their Board of Directors. The existence of potentially dilutive minority interests which are

exercisable during the financial statements preparation is taken into consideration in order to assess

whether the Company controls the subsidiaries.

Subsidiaries are consolidated (full consolidation) under the purchase method from the date of

acquisition, which is the date on which control is transferred to the Group and cease to be consolidated

from the date on which control ceases. The purchase method of accounting is used to account for the

acquisition of subsidiaries. As of the acquisition date, the acquirer shall recognize goodwill arising

from the acquisition that is measured as the excess of:

•

the aggregate of: (i) the consideration transferred measured at fair value (ii) the amount of

any non-controlling interest in the acquired company valued either at their fair value or the

proportionate shareholding of the non-controlling interests, times the net recognizable assets

of the acquired company; and (iii) in a business combination achieved in stages, the

acquisition-date fair value of the acquirer’s previously held equity interest in the acquired

company, less

•

the net value of the acquisition-date amounts of the identifiable assets acquired and the

liabilities assumed.

Goodwill is annually tested for impairment, and the difference between its book and its recoverable

value is recognized as an impairment loss in the period’s results.

Acquisition-related costs are costs (i.e. advisory, legal, accounting, valuation and other professional

or consulting fees) are recognized as expenses, burdening profit and loss for the period when incurred.

The opposite case, which is a business combination in which the net of the acquisition-date amounts

of the identifiable assets acquired and the liabilities assumed, exceeds the consideration-transferred

amount then the transaction is characterized as a bargain purchase. Following all the necessary re-

examinations, the excess amount of the aforementioned difference is recognized as profit in profit or

loss for the period.

Intracompany transactions, balances, and unrealized gains on transactions between group companies

are eliminated. Unrealized losses are also eliminated unless the transaction offers impairment

indications of the asset transferred.

Where necessary, the subsidiaries’ accounting policies have been modified to ensure consistency with

those adopted by the Group. Note 2 provides a full list of the consolidated subsidiaries alongside the

Group’s shareholdings.

Subsidiaries’ financial statements preparation date coincides with the relevant date of the parent

company.

4.1.2 Investments in Subsidiaries (Separate Financial Statements)

The investments of the parent company in its subsidiaries are measured at cost less impairment losses.

Impairment test is performed based on the requirements of IAS 36.