Download Complete PDF - Informe Anual 2012

The financial statements of subsidiaries are consolidated with those of the Parent Company by applying the full consolidation method.
Consequently, all significant balances and effects of any transactions taking place between them have been eliminated in the consolidation
process.
Stakes held by minority shareholders in the Group’s equity and results are respectively presented in the “Minority interests” item of the
consolidated balance sheet and of the consolidated comprehensive profit and loss statement.
The profit or loss of any subsidiaries acquired or disposed of during the financial year are included in the consolidated comprehensive profit
and loss statement from the effective date of acquisition or until the effective date of disposal, as appropriate.
2.5.2 Associated companies (See Annex II)
Associated companies are considered as any companies in which the Parent Company holds the capacity to exercise significant influence,
though it does not exercise either control or joint control. In general terms, it is assumed that significant influence exists when the percentage
stake (direct or indirect) held by the Group exceeds 20% of the voting rights, as long as it does not exceed 50%.
Capredo Investments GmbH is a vehicle lacking any inherent activity used for making final investments in a series of companies domiciled in
the Dominican Republic in which the Group holds an effective stake of 25%. Hence, this vehicle has been considered an associated company.
Associated companies are valued in the consolidated financial statements by the equity method; in other words, through the fraction of their
net equity value the Group’s stake in their capital represents once any dividends received and other equity retirements have been considered.
2.5.3 Joint ventures (See Annex III)
Joint ventures are considered to be any ventures in which the management of the investee companies is jointly held by the Parent Company
and third parties not related to the Group, without any of them holding a greater degree of control than the others. The financial statements
of joint ventures are consolidated by the proportional consolidation method, so that aggregation of balances and subsequent elimination are
carried out in proportion to the stake held by Group in relation to the capital of these entities.
If necessary, any adjustments required are made to the financial statements of said companies to standardise their accounting policies with
those used by the Group.
2.5.4 Foreign currency translation
The following criteria have been different applied for converting into euros the different items of the consolidated balance sheet and the
consolidated comprehensive profit and loss statement of foreign companies included within the scope of consolidation:
• Assets and liabilities have been converted by applying the effective exchange rate prevailing at year-end.
• Equity has been converted by applying the historical exchange rate. The historical exchange rate existing at 31 December 2003 of any
companies included within the scope of consolidation prior to the transitional date has been considered as the historical exchange rate.
• The consolidated comprehensive profit and loss statement has been converted by applying the average exchange rate of the financial year.
Any difference resulting from the application these criteria have been included in the “Translation differences” item under the “Equity”
heading.
Any adjustments arising from the application of IFRS at the time of acquisition of a foreign company with regard to market value and goodwill
are considered as assets and liabilities of such company and are therefore converted using the exchange rate prevailing at year-end.
2.5.5 Changes in the scope of consolidation
The most significant changes in the scope of consolidation during 2012 and 2011 that affect the comparison between financial years were the
following:
a.1 Changes in the scope of consolidation in 2012
a.1.1 Additions
On 31 January 2012, the company Grupo Sotogrande, S.A. acquired 819 shares in Resco Sotogrande, S.L., representing 50% of the share capital
of this company, for a sum of €240,000. As the result of the above transaction, the Group acquired control of Resco Sotogrande, S.L., which until
this time had been consolidated by the proportional method, being jointly managed by both shareholders, Sotogrande S.A. and the vendor of
the 819 shares, in accordance with the agreements signed between the parties.
The details of the business combination are as follows:
€ Thousand
Book Value Adjustments Fair Value
Non-current assets 3 - 3
Inventories 11,285 (2,098) 9,187
Other current assets 55 - 55
Debts with credit institutions (7,458) - (7,458)
Other liabilities (237) - (237)
Total net assets 3,648 (2,098) 1,550
Cost of the business combination 240
Book value of the previous investment 1,310
Income from the businesses combination -
70 REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS