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Annual Financial Statements
appropriate accounting treatment for such acquisitions. The Group will
examine the impact of the above on its Financial Statements, though
it is not expected to have any. The above have not been adopted by
the European Union.
Amendments to IAS 1: « Disclosures Initiative»(effective for
annual periods starting on or after 01/01/2016)
In December 2014, the IASB issued amendments to IAS 1.The afore-
mentioned amendments address settling the issues pertaining to the
effective presentation and disclosure requirements as well as the po-
tential of entities to exercise judgment under the preparation of finan-
cial statements. The Group will examine the impact of the above on
its Financial Statements, though it is not expected to have any . The
above have not been adopted by the European Union.
Amendments to IFRS 10, IFRS 12 and IAS 28: “Investment
Entities: Applying the Consolidated Exception” (effective for
annual periods starting on or after 01/01/2016)
In December 2014, the IASB published narrow scope amendments
to IFRS 10, IFRS 11 and IAS 28. The aforementioned amendments
introduce explanation regarding accounting requirements for invest-
ment entities, while providing exemptions in particular cases, which
decrease the costs related to the implementation of the Standards.
The Group will examine the impact of the above on its Financial State-
ments, though it is not expected to have any. The above have not been
adopted by the European Union.
3.2 Consolidation
Subsidiaries:
All the companies that are managed or controlled,
directly or indirectly, by another company (parent) either through the
majority of voting rights or through its dependence on the know-how
provided from the Group. Therefore, subsidiaries are companies in
which control is exercised by the parent. Mytilineos S.A. acquires and
exercises control through voting rights.
The existence of potential voting rights that are exercisable at the time
the financial statements are prepared, is taken into account in order to
determine whether the parent exercises control over the subsidiaries.
Subsidiaries are consolidated completely (full consolidation) using the
purchase method from the date that control over them is acquired and
cease to be consolidated from the date that control no longer exists.
The acquisition of a subsidiary by the Group is accounted for using
the purchase method. The acquisition cost of a subsidiary is the fair
value of the assets given as consideration, the shares issued and the
liabilities undertaken on the date of the acquisition plus any costs di-
rectly associated with the transaction. The individual assets, liabilities
and contingent liabilities that are acquired during a business combi-
nation are valued during the acquisition at their fair values regardless
of the participation percentage. The acquisition cost over and above
the fair value of the individual assets acquired is booked as goodwill.
If the total cost of the acquisition is lower than the fair value of the in-
dividual assets acquired, the difference is immediately transferred to
the income statement.
Inter-company transactions, balances and
unrealized profits from transactions be-
tween Group companies are eliminated in
consolidation. Unrealized losses are also
eliminated except if the transaction pro-
vides indication of impairment of the trans-
ferred asset. The accounting principles of
the subsidiaries have been amended so as
to be in conformity to the ones adopted by
the Group.
For the accounting of transactions with mi-
nority, the Group applies the accounting
principle based on which such transac-
tions are handled as transactions with third
parties beyond the Group. The sales to-
wards the minority create profit and losses
for the Group, which are booked in the re-
sults. The purchases by the minority create
goodwill, which is the difference between
the price paid and the percentage of the
book value of the equity of the subsidiary
acquired.
Associates:
Associates are companies on
which the Group can exercise significant
influence but not “control” and which do
not fulfill the conditions to be classified
as subsidiaries or joint ventures. The
assumptions used by the group imply that
holding a percentage between 20% and
50% of a company’s voting rights suggests
significant influence on the company.
Investments in associates are initially
recognized at cost and are subsequently
valued using the Equity method. At the
end of each period, the cost of acquisition
is increased by the Group’s share in the
associates’ net assets change and is
decreased by the dividends received from
the associates.
Any goodwill arising from acquiring asso-
ciates is contained in the cost of acquisi-
tion. Whether any impairment of this good-
will occurs, this impairment decreases the
cost of acquisition by equal charge in the
income statement of the period.
After the acquisition, the Group’s share in
the profits or losses of associates is rec-
ognized in the income statement, while the
share of changes in reserves is recognized
in Equity. The cumulated changes affect
the book value of the investments in as-
sociated companies. When the Group’s
share in the losses of an associate is equal
or larger than the carrying amount of the
investment, including any other doubtful debts, the Group does
not recognize any further losses, unless it has guaranteed for
liabilities or made payments on behalf of the associate or those
that emerge from ownership.
Unrealized profits from transactions between the Group and its
associates are eliminated according to the Group’s percentage
ownership in the associates. Unrealized losses are eliminated,
except if the transaction provides indications of impairment of
the transferred asset. The accounting principles of the associ-
ates have been adjusted to be in conformity to the ones adopt-
ed by the Group.
3.3 Segment reporting
MYTILINEOS Group is active in three main operating business
segments: Metallurgy, Constructions and Energy. In identify-
ing its operating segments, management generally follows the
Group’s service lines, which represent the main products and
services provided by the Group. Each of these operating seg-
ments is managed separately as each of these service lines
requires different technologies and other resources as well as
marketing approaches. The adoption of IFRS 8 has not affected
the identified operating segments for the Group compared to
the recent annual financial statement.
3.4 Foreign currency translation
The measurement of the items in the financial statements of
the Group’s companies is based on the currency of the primary
economic environment in which the Group operates (operating
currency). The consolidated financial statements are reported
in euros, which is the operating currency and the reporting cur-
rency of the parent Company and all its subsidiaries.
Transactions in foreign currencies are converted to the operat-
ing currency using the rates in effect at the date of the transac-
tions.
Profits and losses from foreign exchange differences that result
from the settlement of such transactions during the period and
from the conversion of monetary items denominated in foreign
currency using the rate in effect at the balance sheet date are
posted to the results. Foreign exchange differences from non-
monetary items that are valued at their fair value are considered
as part of their fair value and are thus treated similarly to fair
value differences.
The Group’s foreign activities in foreign
currency (which constitute an inseparable
part of the parent’s activities), are con-
verted to the operating currency using the
rates in effect at the date of the transaction,
while the asset and liability items of foreign
activities, including surplus value and fair
value adjustments, that arise during the
consolidation, are converted to euro using
the exchange rates that are in effect as at
the balance sheet date.
The individual financial statements of com-
panies included in the consolidation, which
initially are presented in a currency differ-
ent than the Group’s reporting currency,
have been converted to euros. The asset
and liability items have been converted
to euros using the exchange rate prevail-
ing at the balance sheet date. The income
and expenses have been converted to the
Group’s reporting currency using the aver-
age rates during the aforementioned peri-
od. Any differences that arise from this pro-
cess, have been debited / (credited) to the
Equity under the “Translation Reserves”
account.
3.5 Tangible assets
Fixed assets are reported in the financial
statements at acquisition cost or deemed
cost, as determined based on fair values
as at the transition dates, less accumu-
lated depreciations and any impairment
suffered by the assets. The acquisition
cost includes all the directly attributable
expenses for the acquisition of the assets.
Subsequent expenditure is added to the
carrying value of the tangible fixed assets
or is booked as a separate fixed asset only
if it is probable that future economic bene-
fits will flow to the Group and their cost can
be accurately and reliably measured. The
repair and maintenance cost is booked in
the results when such is realized.
