3. Basis of consolidation

The consolidated financial statements comprise the financial statements of Royal A-ware and its subsidiaries, including entities that are controlled directly or indirectly by Royal A-ware. This is the case if Royal A-ware obtains power over the potential subsidiaries directly or indirectly from voting rights or similar rights, is exposed or has rights to, positive or negative variable returns from its involvement with the subsidiaries and is able to influence those returns. Specifically, Royal A-ware controls an investee if, and only if, Royal A-ware has:

• Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee)

• Exposure, or rights, to variable returns from its involvement with the investee

• The ability to use its power over the investee to affect its returns

Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when Royal A-ware has less than a majority of the voting or similar rights of an investee, Royal A-ware considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

• The contractual arrangement(s) with the other vote holders of the investee

• Rights arising from other contractual arrangements

• Royal A-ware’s voting rights and potential voting rights

Royal A-ware re-assesses 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. Consolidation of a subsidiary begins when Royal A-ware obtains control over the subsidiary and ceases when Royal A-ware loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date Royal A-ware gains control until the date Royal A-ware ceases to control the subsidiary.

If Royal A-ware loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value.

Intercompany transactions, intercompany profits and mutual receivables and debts between Royal A-ware and other legal entities included in the consolidation are eliminated to the extent that the results have not been realised through transactions with third parties outside Royal A-ware. Unrealised losses on intercompany transactions are also eliminated unless there is an impairment. Accounting policies of group companies and other legal entities included in the consolidation have been changed where necessary for reconciliation with the applicable accounting policies for Royal A-ware.

In the consolidated financial statements of Royal A-ware Food Group B.V. the financial figures of the following entities are included, split per activity:

The recorded percentages mentioned show the interest in capital of the applicable entity.