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Annual Financial Statements
nual periods starting on or after 01/01/2016. Earlier application is permitted, given
that this fact is relatively disclosed in the financial Statements. The Group will
examine the impact of the above on its consolidated/separate Financial State-
ments. The above have not been adopted by the European Union.
Amendments to IFRS 10, IFRS 12 and IAS 28: “Investment Entities: Apply-
ing 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 re-
garding accounting requirements for investment entities, while providing exemp-
tions 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 consoli-
dated/separate Financial Statements. The above have not been adopted by the
European Union.
Amendment to IAS 12 Income Taxes: “ Recognition of Deferred Tax As-
sets for Unrealised Losses” (effective for annual periods starting on or
after 01/01/2017)
In January 2016, the IASB published narrow scope amendments to IAS 12. The
objective of this amendment is to clarify the accounting for deferred tax assets
for unrealised losses on debt instruments measured at fair value. The Group will
examine the impact of the above on its consolidated/separate Financial State-
ments. The above have not been adopted by the European Union.
IFRS 9 “Financial Instruments” (effective for annual periods starting on
or after 01/01/2018)
In July 2014, the IAB issued the final version of IFRS 9. This version brings together
the classification and measurement, impairment and hedge accounting models
and presents a new expected loss impairment model and limited amendments
to classification and measurement for financial assets. The Group will examine
the impact of the above on its consolidated/separate Financial Statements. The
above have not been adopted by the European Union.
IFRS 15 “Revenue from Contracts with Customers” (effective for annual
periods starting on or after 01/01/2018)
In May 2014, the IASB issued a new standard, IFRS 15. The Standard fully con-
verges with the requirements for the recognition of revenue in both IFRS and US
GAAP. The new standard will supersede IAS 11 “Construction Contracts”, IAS
18 “Revenue” and several revenue related interpretations. The Group will exam-
ine the impact of the above on its consolidated/separate Financial Statements.
The above have not been adopted by the European Union.
IFRS 16 “Leases” (effective for annual periods starting on or after
01/01/2019)
In January 2016, the IASB issued a new standard, IFRS 16. The objective of the
project was to develop a new Leases Standard that sets out the principles that
both parties to a contract, ie the customer (‘lessee’) and the supplier (‘lessor’),
apply to provide relevant information about leases in a manner that faithfully rep-
resents those transactions. To meet this objective, a lessee is required to recog-
nise assets and liabilities arising from a lease. The Group will examine the impact
of the above on its consolidated/separate Financial Statements. The above have
not been adopted by the European Union.
3.2 Consolidation
Subsidiaries:
All the companies that are managed or controlled, directly or in-
directly, 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 exer-
cisable at the time the financial statements are pre-
pared, is taken into account in order to determine
whether the parent exercises control over the sub-
sidiaries. 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 ac-
counted for using the purchase method. The acqui-
sition 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 directly associated with
the transaction. The individual assets, liabilities and
contingent liabilities that are acquired during a busi-
ness combination are valued during the acquisition
at their fair values regardless of the participation per-
centage. 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 individual assets ac-
quired, the difference is immediately transferred to
the income statement.
Inter-company transactions, balances and unreal-
ized profits from transactions between Group com-
panies are eliminated in consolidation. Unrealized
losses are also eliminated except if the transaction
provides indication of impairment of the transferred
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 minority,
the Group applies the accounting principle based
on which such transactions are handled as transac-
tions with third parties beyond the Group. The sales
towards the minority create profit and losses for the
Group, which are booked in the results. The pur-
chases by the minority create goodwill, which is the
difference between the price paid and the percent-
age 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 compa-
ny’s voting rights suggests significant influence on
the company. Investments in associates are initially
recognized at cost and are subsequently valued us-
ing 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 as-
sociates.
Any goodwill arising from acquiring associates is
contained in the cost of acquisition. Whether any
impairment of this goodwill 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 as-
sociates is recognized 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 associated 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 doubt-
ful debts, the Group does not recognize any further losses, unless it
has guaranteed for liabilities or made payments on behalf of the as-
sociate or those that emerge from ownership.
Unrealized profits from transactions between the Group and its asso-
ciates are eliminated according to the Group’s percentage ownership
in the associates. Unrealized losses are eliminated, except if the trans-
action provides indications of impairment of the transferred asset. The
accounting principles of the associates have been adjusted to be in
conformity to the ones adopted by the Group.
3.3 Segment reporting
MYTILINEOS Group is active in three main operating business seg-
ments: Metallurgy, Constructions and Energy. In identifying its oper-
ating segments, management generally follows the Group’s service
lines, which represent the main products and services provided by the
Group. Each of these operating segments 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 com-
pared 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 currency of the parent Company
and all its subsidiaries.
Transactions in foreign currencies are converted to the operating cur-
rency using the rates in effect at the date of the transactions.
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 val-
ued 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 converted to the oper-
ating 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 companies included in the con-
solidation, which initially are presented in a currency different 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 prevailing 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 period. Any differences that arise
from this process, 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
accumulated depreciations and any impairment suf-
fered 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 benefits 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.
Depreciation of tangible fixed assets (other than
Land which are not depreciated) is calculated us-
ing the straight line method over their useful life, as
follows:
Buildings
25-35 years
Mechanical equipment
4-30 years
Vehicles
4-10 years
Other equipment
4-7 years
The residual values and useful economic life of
tangible fixed assets are subject to reassessment
at each balance sheet date. When the book value
of tangible fixed assets exceeds their recoverable
amount, the difference (impairment) is immediately
booked as an expense in the income statement.
Upon sale of the tangible fixed assets, any differ-
ence between the proceeds and the book value are
booked as profit or loss to the results. Expenditure
on repairs and maintenance is booked as an ex-
pense in the period they occur.
Self-constructed tangible fixed assets constitute an
addition to the acquisition cost of tangible assets at
a value that includes the direct cost of employee’s
salaries (including the relevant employer’s contribu-
tions), the cost of materials used and other general
costs.
3.6 Intangible assets
The intangible assets include Goodwill, the rights
of use of Property, plant and equipment, software
licenses, licenses for the production, installation and
operation of renewable energy assets and thermal
energy assets, the environment rehabilitation ex-
penditure and borrowing costs.
Goodwill on Acquisition:
is the difference be-
tween the asset’s acquisition cost and fair value and
the net assets of the subsidiary / associate compa-
ny as at the acquisition date. During the acquisition
date, the company recognizes this surplus value,
emerged from acquisition, as an asset and presents
it in cost. This cost is equal to the amount by which
the acquisition cost exceeds the company’s share in
the net assets of the acquired company.
