ANNUAL REPORT 2012 - TiGenix

11.5.2.2. Basis of consolidation
The consolidated financial statements
incorporate the financial statements of the
Company and entities controlled by the
Company (its subsidiaries). Entities controlled
by the Group have been fully consolidated.
Control is achieved where the Company
has the power to govern the financial and
operating policies of an entity so as to obtain
benefits from its activities.
Income and expenses of subsidiaries
acquired or disposed of during the year are
included in the consolidated statement of
comprehensive income from the effective
date of acquisition and up to the effective
date of disposal, as appropriate. Total
comprehensive income of subsidiaries is
attributed to the owners of the Company and
to the non-controlling interests.
All significant intra-group transactions,
balances, income and expenses are
eliminated in consolidation.
11.5.2.3. Foreign currency translation
In preparing the financial statements of
each individual group entity, transactions in
currencies other than the entity’s functional
currency (foreign currencies) are recognized
at the rates of exchange prevailing at the
dates of the transactions. At the end of
each reporting period, monetary items
denominated in foreign currencies are
retranslated at the rates prevailing at that
date. Non-monetary items carried at fair
value that are denominated in foreign
currencies are retranslated at the rates
prevailing at the date when the fair value
was determined. Non-monetary items that
are measured in terms of historical cost in a
foreign currency are not retranslated.
Exchange differences arising on the
settlement of monetary items or on translating
monetary items at rates different from those
at which they were translated on initial
recognition during the period or in previous
financial statements shall be recognised in
profit or loss in the period in which they arise.
For the purposes of presenting consolidated
financial statements, the assets and liabilities
of the Group’s foreign operations are
translated into Euro using exchange rates
prevailing at the end of each reporting
period. Income and expense items are
translated at the average exchange rates for
the period. Exchange differences arising, if
any, are recognized in other comprehensive
income and accumulated in equity
(translation reserves).
On the disposal of a foreign operation (i.e.
a disposal of the Group’s entire interest in a
foreign operation), or a disposal involving
loss of control over a subsidiary that includes
a foreign operation, all of the exchange
differences accumulated in equity in respect
of that operation attributable to the owners of
the Company are reclassified to profit or loss.
11.5.2.4. Segment information
The Group’s activities are in one segment,
biopharmaceuticals. There are no other
significant classes of business, either singularly
or in aggregate. Management reviews the
operating results and operating plans and
make resource allocation decisions on a
company-wide basis, therefore TiGenix
operates as one segment.
11.5.2.5. Business combinations
Acquisitions of businesses are accounted
for using the acquisition method. The
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