Consolidation methods

The acquisition costs of the shareholdings concerned are set off against the pro-rata share in the fair value of the equity capital of the companies concerned as of the date of acquisition according to the purchase method. Assets and liabilities are also included in the consolidated balance sheet at their fair values as of the acquisition date. Any remaining differences are shown as goodwill and generally written off over a period of 15 years.

Intercompany profits and losses, sales, expenses and income and all receivables and payables between consolidated companies are eliminated. Deferred taxation is assessed on consolidation transactions affecting net income.

Joint venture companies are consolidated on a pro-rata basis using the same principles.

The equity values calculated for associated companies are based on the revaluation method. In such cases, adjustments have been made to individual accounts to reflect differences from the valuation methods used in the consolidated financial statements where such adjustments could be determined at reasonable cost. Intercompany profits were insignificant in the case of these companies.

The differences arising from the acquisition of shareholdings in associated companies form part of the book value of the shareholding in the associated company concerned. Such differences are principally written off as goodwill over a period of 15 years. Depreciation of the differences is included in the accumulated equity adjustment.