1. 7 EGR consolidation process
ESTP Training on EGR
6-7 September 2016

2. EGR - Consolidation process
All the data from the different data providers have to be combined to create groups
This process is called consolidation and includes priorities and rules
Steps of the consolidation process
Consolidation of legal units
Consolidation of relationships
Consolidation of cluster of control
Consolidation of groups and enterprises

3. Data in processing Source area Transformation area
Data as received from the data providers
Transformation area
Data after transformation
Redundant information from one source removed
Consolidation process
Consolidation area
Final picture on the entities for a reference year

4. Authentic store rules (1)
The authentic store principal means that in EGR 2.0 the NSI business register sources are categorised as exclusive or non-exclusive sources for information on specific entities
The authentic store setting in EGR 2.0 can be
full - being a full authentic store implies that there are no other possible sources permitted
partial - the partial authentic store implies that additional sources are permitted, however data of the partial authentic store have always preference over the additionally defined sources

5. Authentic store rules (2)
Authentic store is applicable for various EGR IS and EGR CORE units
some of them are set by default
some others can be set by action
In EGR IS NSI register can become authentic store for resident legal units (set by an action)
28 NSI are authentic store
No CDP legal units can be added for them
Legal units of CDPs are only linked to NSI data, their data are only accepted (e.g. their relationships) if linking was successful

6. Authentic store settings (1)
In EGR CORE an NSI register can become authentic store for the following units/items:
Resident legal units
Resident relationships (between two resident legal units)
Cross-border relationships (between a resident legal unit and a foreign legal unit)
Resident enterprises
Default settings in EGR for 2015 cycle:
All NSIs are partially authentic store for cross-border relationships
All NSIs are authentic store for resident ENTs

7. Authentic store settings (2)
Settings are defined by action in EGR CORE for 2014 cycle for:
Resident legal units
Resident relationships (between two resident legal units)

8. Authentic store settings (3)
EGR IS and EGR CORE combinations on resident legal units:
EGR IS partial / EGR CORE partial: sources other than NSA can provide information for that country
EGR IS full / EGR CORE partial: sources other than NSA can provide information for that country in EGR CORE (subject that the LEU is provided by NSA in EGR IS)
EGR IS full / EGR CORE full: only NSA data will be acceptable in EGR
EGR IS partial / EGR CORE full: sources other than NSA can provide information for that country in EGR IS

9. Authentic store settings (4)
EGR relationships between two resident legal units
Authentic store for resident RELs
CDP relationships cannot be added to EGR between two resident legal units
Only NSA data can be the source of domestic relationships
Partially authentic store for the resident RELs
CDP relationships can be added to EGR between two resident legal units
Both the NSA and the CDP relationship data will be used in EGR for domestic relationships
In conflicting cases preference will be given to NSA data

10. Further reading EGR wiki
Details on the EGR methodology / Authentic store principle in EGR 2.0

11. Processing of data
The authentic store settings and the predefined order of data sources and will define in EGR 2.0 how groups will be created from the received pairwise relationships of NSIs and CDPs
Priority order of data sources
EGR
NSI of the subsidiary
NSI of the parent
BvD
DnB
NSI other than 2 and 3

12. Information to EGR from one NSI
LEU
BE222
AT REL data
LEU
AT111
ENT
ATENT111
AT ENT data
AT LEU data
AT LEL data

13. Information to EGR from multiple sources
BE REL data
LEU
BE222
ENT
BEENT222
BvD REL data
BE LEU data
BE ENT data
BvD LEU data
BE LEL data
BE REL data
AT REL data
LEU
AT111
ENT
ATENT111
BvD REL data
AT LEU data
AT ENT data
BvD LEU data
AT LEL data
DnB REL data

14. Consolidation of legal units
Source
Transformed
Consolidated
NSA(3) LEID X
NSA(3)
LEID X
NSA(1) LEID X
NSA(2) LEID X
DnB(1) LEID X
BvD(2) LEID X
BvD(1) LEID X
WITHIN ONE FRAME YEAR
Priority
NSA
BvD
DnB
Prioritize
Update

15. Consolidation of relationships (1)
Process started from scratch per subsidiary
Collect all direct RELs on the same subsidiary
Determine highest percentage per parent
Create direct relationships in order of priority
Check for no violation (for example, no more than 100% in total)
Collect indirect RELs on the same subsidiary
Discard superfluous indirect (if there is direct control)
Discard lower priority (if more than 1 parent)
Establish indirect relationship

16. Consolidation of relationships (2)
LEU
BE2
LEU
NL3
NSI_AT AT1-BE2 A C D 89%
NSI_AT AT1-NL3 A C D 11%
BvD AT1-BE2 A C D 50%
BvD AT1-NL3 A C D 50%
NSI_NL AT1-NL3 A C D 51%
LEU
AT1
NSI_AT AT1-BE2 A C D 89%
BvD AT1-BE2 A C D 50%
NSI_AT AT1-NL3 A C D 11%
NSI_NL AT1-NL3 A C D 51%
BvD AT1-NL3 A C D 50%
Priority
EGR
NSI of the subsidiary
NSI of the parent
BvD
DnB
NSI other than 2 and 3

17. Consolidation of cluster of control
The cluster of control defines legal units that are involved in (control) relationships with each other, ultimately all being under control of the defined topmost legal unit (the head of the group)
A legal unit can have control with a single relationship in two cases:
Type of ownership = I (indirect) or
Type of ownership = D (direct) and voting power >50%
Combine clusters with cumulative direct control >50%!

18. Creation of control clusters
In the consolidation process EGR is looking for:
Direct control - A legal unit directly owns more than 50 % of the voting rights of another legal unit
Consolidated control - A legal unit fully consolidates the accounts of another legal unit (through accounts)
Indirect control - A legal unit indirectly owns more than 50 % of the voting rights of another legal unit, through subsidiaries
One control cluster can include
One to many legal units
From one or more countries

19. From % values…

20. …to control clusters

21. Consolidation of groups
From clusters to enterprise groups
Each new cluster is a new group
For already existing groups (data of previous EGR cycle) the identification (continuity) of the enterprise groups is determined
By looking at the overlapping enterprises and the number of persons employed of them
Where overlap is found on enterprises and employment, the group ID is kept, continuity of groups exists

22. Processing of data
The authentic store settings and the predefined order of data sources and will define in EGR 2.0 how groups will be created from the received pairwise relationships of NSIs and CDPs
Priority order of data sources
EGR
NSI of the subsidiary
NSI of the parent
BvD
DnB
NSI other than 2 and 3

23. Processing of data - Examples (1)
Complementary REL data of NSI and CDP
NSI SK LEU1 (SK) – LEU2 (LU) – cross border relationship
CDP LEU2 (LU) – LEU3 (LU) – resident relationship
As LU is PA for resident REL: CDP data accepted, cluster will be: LEU1(SK) – LEU2 (LU) – LEU3 (LU)
NSI SK LEU1 (SK) – LEU2 (DK) – cross border relationship
CDP LEU2 (DK) – LEU3 (DK) – resident relationship
As DK is A for resident REL: CDP data not accepted, cluster will be: LEU1(SK) – LEU2 (DK)

24. Processing of data - Examples (2)
Complementary REL data of NSI and CDP
NSI SK LEU1 (SK) – LEU2 (DK) – cross border relationship
CDP LEU2 (DK) – LEU3 (US) – cross border relationship
Complementary CDP data always accepted for cross-border REL, cluster will be: LEU1(SK) – LEU2 (DK) – LEU3 (US)

25. Processing of data - Examples (3)
Conflicting cases of NSI and CDP REL data
NSI SK LEU1 (SK) – LEU2 (LU) – cross border relationship
CDP LEU1 (SK) – LEU3 (CZ) – cross border relationship
NSI is stronger than CDP, cluster will be: LEU1(SK) – LEU2 (LU)
NSI SK LEU 1 (SK) – LEU 2 (LU) – cross border relationship
NSI CZ LEU1 (SK) – LEU 3 (CZ) – cross border relationship
Two NSI sources, bottom-up REL is stronger than top-down, cluster will be: LEU 1 (SK) – LEU 2 (LU)

26. Processing of data - Examples (4)
Conflicting cases of NSI and CDP REL data
CDP1 LEU1 (SK) – LEU2 (CZ) – cross border relationship
CDP2 LEU1 (SK) – LEU3 (GI) – cross border relationship
Two CDP sources, CDP1 is stronger, cluster will be: LEU1 (SK) – LEU2 (CZ)

27. Processing of data - Examples (5)
Complex case of NSI and CDP REL data
NSI SK LEU1 (SK) – LEU2 (LU) – cross border relationship
NSI CZ LEU1 (SK) – LEU3 (CZ) – cross border relationship
CDP1 LEU2 (LU) – LEU4 (LU) – resident relationship
CDP2 LEU2 (LU) – LEU5 (IE) – cross border relationship
CDP2 LEU5 (IE) – LEU6 (IE) – resident relationship

28. Processing of data - Examples (6)
LEU 6 IE
NSI SK: LEU1(SK)–LEU2(LU)
NSI CZ: LEU1(SK)–LEU3(CZ)
CDP1: LEU2(LU)–LEU4(LU)
CDP2: LEU2(LU)–LEU5(IE)
CDP2: LEU5(IE)–LEU6(IE)
CDP2 data
LEU 4 LU
LEU 5 IE
CDP1 data
CDP2 data
Priority
EGR
NSI of the subsidiary
NSI of the parent
BvD
DnB
NSI other than 2 and 3
LEU 2 LU
LEU 3 CZ
SK data
LEU 1 SK
CZ data

29. Processing of data - Examples (7)
Complex case of NSI and CDP REL data
Bottom-up REL is stronger than top-down: NSI SK data accepted, NSI CZ data not accepted
As LU is PA for resident REL: CDP1 data accepted
CDP2 data on LEU2 not accepted, CDP1 data are stronger
As IE is PA for resident REL: CDP2 data for LEU5 resident REL accepted
Clusters will be:
LEU1(SK) – LEU2 (LU) – LEU4 (LU)
LEU5 (IE) – LEU6 (IE) (domestic group, will be excluded from the EGR frame)

30. Identification numbers in EGR 2.0
EGR IS
LEUs are identified with LEID numbers
EGR CORE input files
ENTs: ENT_NSA_ID, groups: GEG_EGR_ID
EGR CORE system and output
LEUs are identified with LEU_EGR_ID
No continuity of EGR 1.0 identifiers (EU_LEU_ID, GLOBAL_EG_ID)

31. Further reading
EGR wiki
Details on the EGR methodology

32. Notes