consolidated financial statements - Lotus Bakeries

--Amendments to IAS 12, ‘Income taxes’ ondeferred tax (effective 1 January 2012);--Amendments to IFRS 1, ‘First-time adoptionof IFRSs’ related to severe hyperinflation andthe removal of fixed dates for first-timeadopters (effective 1 July 2011);--‘Improvements to IFRSs’ (2010).2.3 Consolidation principlesThe consolidated financial statements include thestatutory financial statements of Lotus BakeriesNV and its subsidiaries (collectively referred to asthe ‘Group’) and the Group’s interests inassociated companies. All material balances andtransactions within the Group have beeneliminated.SubsidiariesSubsidiaries are companies in which the Groupdirectly or indirectly holds more than half of thevoting shares or over which the Group directly orindirectly has control in another manner. Controlis understood as directly or indirectly defining thecompany’s financial and operational policy. Thefinancial statements of subsidiaries are includedin the consolidation as from the date when theparent company gains control until the date onwhich the control ends.ASSOCIATED companiesAssociated companies are companies in whichthe Group has significant influence but no control.This is generally the case if the Group holdsbetween 20% to 50% of the voting shares.Associated companies are consolidated using theequity method from the date on which thesignificant influence begins until the date onwhich the significant influence ends.These associated companies are presented in thebalance sheet in the section entitled ‘investmentsin associated companies’. The Group’s share inthe results for the period is reported in theincome statement as ‘share in the result of theenterprises accounted for using the equitymethod’.When the Group’s share in the losses ofcompanies using the equity method exceeds thecarrying amount of these participations, this valueis reduced to zero and future losses are no longeracknowledged, except to the extent of theGroup’s commitments to these associatedcompanies.A list of the Group’s subsidiaries and associatedcompanies is provided in the notes.2.4 Use of estimatesIn order to prepare the annual financial statementsin accordance with IFRS, management hasto make a number of estimates and assumptionswhich have an impact on the amounts declared inthe financial statements and notes.Valuations made on the date of reporting reflectexisting conditions on that date (for example:market prices, interest rates and foreignexchange rates). Though these estimates aremade by management based on maximumknowledge of ongoing business and actions thatthe Group may undertake, the real results mayvary in relation to these estimates.For 2009 no estimates have been made thatcould have a significant impact. The assumptionsmade for valuing the intangible fixed assets,post-employment benefits, financial derivativesand goodwill are given in notes 11, 24, 27 and 30.Acquisition of subsidiaries is accounted foraccording to the acquisition method.The financial statements of the subsidiariesfollow the same financial year as that of theparent company and are prepared according tothe same accounting principles.n o t e s9