EXMAR report 2025

5.2 Consolidated financial statements 191 EXMAR has been following the evolution of the warlike operations in the Middle East and taking all measures to make sure that its crew and vessels remain safe. There have been no instructions to bring vessels from the EXMAR fleet into the Arabian/Persian Gulf since the start of the attacks. EXMAR will also avoid taking the risk of trading into the Arabian/Persian Gulf as long as the situation has not improved. F. MATERIAL ACCOUNTING POLICIES a. Basis of consolidation Subsidiaries Subsidiaries are those entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. All intra-Group balances, income and expenses, unrealized gains and losses and dividends resulting from intra-Group transactions are eliminated in full. Loss of control Upon the loss of control, the Group derecognizes the assets and liabilities of the subsidiary, and non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognized in profit and loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date the control is lost. Interests in equity-accounted investees The Group’s interest in equity accounted investees comprises interests in associates and joint ventures. Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. Investments in associates and joint ventures are accounted for using the equity method and are recognised initially at cost. When the share of the Group in the losses exceeds its interest in an equity accounted investee, the carrying amount of that interest is reduced to zero, and the recognition of future losses is discontinued, except to the extent that the Group has an obligation or has made payments on behalf of the investee. In such case the negative investment in equity accounted investees is deducted from other components of the investor’s interest in the equity accounted investee (borrowings to equity accounted investees). If the negative investment in equity accounted investees exceeds the investor’s interest, a liability is recognized for the net amount. b. Foreign currency Functional currency Each entity prepares its individual financial statements in the currency of the primary economic environment in which the entity operates (i.e. the functional currency). Several European and Hong Kong based entities have the USD as functional currency as most of their cash flows are expressed in USD. Transactions and balances In preparing the individual financial statements, transactions in currencies other than the entities’ functional currency are recorded at the exchange rate applicable at the date of the transaction. At the reporting date, monetary assets and liabilities denominated in foreign currencies are translated to the functional currency spot exchange rates at that date. The non-monetary assets and liabilities that are measured in terms of historical cost are translated to the functional currency at the exchange rate at the date of the initial transactions. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date the fair value was determined. Foreign exchange differences arising on translation are recognised in the profit or loss statement, except for qualified cash flow hedges to the extent that the hedges are effective. Upon disposal of the hedge and or net investment, the cumulative amount is reclassified to profit or loss.