Report 2010 - Italcementi Group

Subsidiaries
Subsidiaries are companies in which the Group has the power to determine, directly or indirectly,
administrative and management decisions and to obtain the benefits thereof. Generally speaking, control is
assumed to exist when the Group holds, directly or indirectly, more than one half of voting rights, including
potential voting rights deriving from convertible securities.
Subsidiaries are consolidated on a line-by-line basis as from the date at which control is obtained and until
control is transferred out of the Group.
Associates
Associates are companies in which the Group has significant influence over administrative and management
decisions even though it does not hold control. Generally speaking, significant influence is assumed to exist
when the Group holds, directly or indirectly, at least 20% of voting rights or, even if it holds a lower percentage
of voting rights, when it is entitled to take part in financial and management policy decisions by virtue of a
specific juridical status including, but not limited to, participation in voting trusts or other forms of material
exercise of rights of governance. Equity investments in associates are valued with the equity method, whereby
they are recognized initially at cost, and subsequently adjusted to reflect changes in the value of the Group’s
interest in the associate’s equity. The Group’s share of an associate’s net profit or loss is recognized in a
specific income statement line item from the date at which the Group exerts significant influence until it
relinquishes such influence.
Joint ventures
Joint ventures are companies whose business operations are controlled by the Group jointly with one or more
other parties, under contractual arrangements. Joint control presupposes that strategic, financial and
management decisions are taken with the unanimous consent of the parties that control the venture.
Equity investments in joint ventures are consolidated on a proportionate basis, whereby assets, liabilities,
income and expenses are recognized line-by-line proportionately to the Group’s interest.
The balance sheets and income statements of joint ventures are consolidated from the date on which joint
control is assumed and until such control is relinquished.
Transactions eliminated during consolidation
All intragroup balances and transactions, including any unrealized gains in respect of third parties, are
eliminated in full. Unrealized losses in respect of third parties deriving from intragroup transactions are
eliminated, except in cases where it will not subsequently be possible to recover such losses.
Unrealized gains in respect of third parties deriving from transactions with associates are eliminated against
the equity investment carrying amount, while losses are eliminated proportionately to the Group’s interest,
unless it will not subsequently be possible to recover such losses.
Scope of consolidation
A list of the companies consolidated on a line-by-line basis, on a proportionate basis and with the equity
method is provided in the annex to these notes.
1.4. Business combinations
On first-time adoption of the IFRS, as allowed by IFRS 1, the Group elected not to apply IFRS 3 retrospectively
to business combinations that took place before January 1, 2004.
Until December 31, 2009, business combinations were accounted for with the purchase method in IFRS 3.
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