Annual Financial Report for the period from 1st of January to the 31st of December 2012
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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. Subsid-
iaries 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.
MYTILINEOS S.A. exercises control over, the listed on the ATHENS STOCK EXCHANGE, METKA. Due to the
large dissemination of these stocks, “control” over this Firm can be determined even in cases that the Group
holds stakes lower than 50% of the total voting rights. In such cases, “control” is determined through the rep-
resentation of the majority of the chairs of the BoD.
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 un-
dertaken 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 business combination 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 individual assets acquired, the difference is immediately transferred to the
income statement.
Inter-company transactions, balances and unrealized profits from transactions between Group companies 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 transactions 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 purchases by the minor-
ity 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 sub-
sequently 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 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 state-
ment of the period.
After the acquisition, the Group’s share in the profits or losses of associates is recognized in the income state-
ment, 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 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.
