CM.com N.V. ANNUAL

Business / Consolidation

3. Basis of Consolidation The consolidated financial statements are prepared by consolidating the financial statements of the company and its subsidiaries. Subsidiaries are entities controlled by CM.com. CM.com controls an entity when it has power over the investee, is exposed to or has the right to variable returns from its involvement with that entity, and can influence those returns through its power over the entity. CM.com reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. Control is generally achieved by owning more than 50% of the voting rights. When the company has less than a majority of the voting rights of an investee, it considers that it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The company considers all relevant facts and circumstances in assessing whether or not the company’s voting rights in an investee are sufficient to give it power, including: the size of the company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders; potential voting rights held by the company, other vote holders, or other parties; rights arising from other contractual arrangements; any additional facts and circumstances that indicate that the company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings. The financial statements of subsidiaries are included in the consolidated financial statements from the date control begins until the date control ends. Accounting policies of subsidiaries have been adjusted where necessary to align with the policies adopted by CM.com. Specifically, the results of subsidiaries acquired or disposed of during the year are included in profit or loss from the date CM.com gains control until the date that CM.com ceases to control the subsidiary or foundation. During consolidation, intercompany balances and transactions, cash flows relating to transactions between members of the group and any unrealized gains and losses or income and expenses from intercompany transactions, are eliminated. Unrealized gains from transactions with asso