F1. Subsidiaries

AP Accounting principles

Subsidiaries

The companies over which Essity has control are consolidated as subsidiaries. Control means that Essity has sufficient influence to control the activities of the subsidiary, has the right to its returns and has control over its exposure, and is able to impact the return of the company through its influence. Most of the Group’s subsidiaries are wholly owned, which means that Essity has control over the companies. Essity owns 52% of Vinda, 50% of Familia, 49% of Sancella and 49% of Unicharm Mölnlycke; Essity also has control of these companies, despite the fact that there are significant non-controlling interests in the companies. The acquisition of BSN medical, refer to Note F6 Acquisitions and divestments, included a minor subsidiary in Venezuela that was divested in December 2017. Because there was no possibility to exercise control, the company was not consolidated during the holding period.

Non-controlling interests

Non-controlling interests are recognized as a separate item in the Group’s equity. Profit or loss and every component of other comprehensive income are attributable to the owners of the Parent and to non-controlling interests. Losses attributable to non-controlling interests are recognized even if this results in a negative balance for the non-controlling interest. In connection with acquisitions of less than 100% when a controlling influence is achieved, non-controlling interests are determined either as a proportional share of the fair value of identifiable net assets excluding goodwill or at fair value. Subsequent acquisitions up to 100% and divestments of participations in a subsidiary that do not lead to a loss of controlling influence are recognized as an equity transaction.

List of major subsidiaries

The Group’s participations in major subsidiaries at December 31, 2017. The following selection of wholly owned subsidiaries and subsidiaries with significant non-controlling interests includes companies with external sales in excess of SEK 500m in 2017. The process of renaming the companies from SCA to Essity will continue in 2018.