MRM - 2018 Registration document

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General information on the issuer and its capital

Consolidated financial statements for the financial year ended 31 December 2018

2.3 Key accounting estimates and judgements

Given the estimative nature of such valuations, it is possible that the income from the sale of certain properties may substantially differ from the valuation made, even were a sale to take place within a few months of the reporting date. As such, the valuations of the Group’s portfolio, carried out by an independent appraiser, could vary significantly depending on the sensitivity of the following data: • the market rental value of the Company’s portfolio; • the yield, calculated on the basis of yields used in the property market. Since these data are tied to the market, they may vary significantly in the current context. They may thus have a material upward or downward impact on the fair value measurement of the property portfolio.

When preparing the financial statements, the Group uses estimates and makes judgments, which are regularly updated and are based on historical information and other factors, in particular forecasts regarding future events deemed reasonable in light of the circumstances. The estimates carrying a substantial risk of causing a material adjustment to the carrying amount of assets and liabilities during the subsequent period primarily involve the calculation of the fair value of the property portfolio, which is notably based on the valuation of the portfolio by independent appraisers using the methods described in note 4.4. Financial market instability has resulted in a significant drop in the number of representative transactions. Transactions completed in an economic crisis may not reflect the estimates of the independent appraisers.

Note 3

Scope of consolidation

3.1 Consolidation methods

accounted for under the equity method which consists of recognising: • in the statement of financial position, the value of shares stated at their cost of acquisition including goodwill plus or minus changes in the Group’s share of the net assets of the affiliate net of any necessary consolidation adjustments; • in the statement of comprehensive income, a separate line showing the Group’s share of the profits of affiliates net of consolidation adjustments. The financial statements of affiliates are recognised in the consolidated financial statements from the date significant influence begins until it is lost. As of 31 December 2018, the Group had no affiliates.

3.1.1 Subsidiaries Subsidiaries are companies controlled by the Group. A subsidiary is controlled where the Group has the power to directly or indirectly manage the financial and operating policies of the entity so as to obtain benefits from its activities. In general, subsidiaries are deemed to be controlled when M.R.M. directly or indirectly holds more than 50% of the voting rights. The financial statements of subsidiaries are fully consolidated from the date control is obtained and are no longer consolidated when control is transferred outside the Group. The consolidated financial statements include all of the subsidiary’s assets, liabilities, income and expenses. Equity distinguishes between Group share and minority shares. As of 31 December 2018, all entities within the scope of consolidation were wholly controlled by the Group and were therefore fully consolidated. 3.1.2 Affiliates Affiliates are companies in which the Group exercises significant influence in terms of operating and financial policy without having control of the entity. In general, significant influence is obtained when the Group owns at least 20% of the voting rights. The Group’s investments in affiliates are

3.1.3 Transactions eliminated from the

consolidated financial statements (intra- group transactions)

Items in the statement of financial position, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated when preparing the consolidated financial statements. Gains resulting from transactions with affiliates are eliminated via investments in affiliates in proportion to the Group’s interest in the company in question. Unrealised losses are eliminated in the same way as unrealised gains but only insofar as they reflect an impairment loss.

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M.R.M. 2018 REGISTRATION DOCUMENT