How do I map a consolidated group structure from the notes?

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AcadiFi · Accepted Answer

Start with the 'subsidiaries' note listing each entity with its jurisdiction, ownership percentage, and principal activity. Build a tree with the parent at the top, then first-tier subsidiaries, then second-tier. The diagram below illustrates a typical mapping for Verdigris: ```mermaid flowchart TD P[Verdigris Holdings
Parent] --> A[Verdigris UK
100% Owned] P --> B[Verdigris SG
80% Owned] P --> C[Verdigris BR
60% Owned] A --> D[Tier-2 UK
100%] B --> E[Tier-2 SG
75%] C --> F[NCI Partner
40% Minority] ``` Three analytical questions: (1) Where is the cash? Map dividend flows — if Verdigris BR holds 45% of group cash but Brazil has capital controls, the parent's effective liquidity is overstated. (2) Where are the losses? Loss-making subsidiaries may be structured to shield income; check intercompany loan notes. (3) Where is the goodwill? Goodwill allocated to cash-generating units reveals which acquisitions are still performing. Also scrutinize ownership below 100% — non-controlling interests (NCI) on the balance sheet equal the minority's share of net assets, but on the income statement, net income attributable to parent is what EPS uses. A 60% subsidiary contributes 100% of revenue to consolidation but only 60% of net income to parent equity. Finally, look for structured entities outside the tree — unconsolidated SPEs may hide off-balance-sheet debt.

How do I map a consolidated group structure from the notes?

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