[4] Basis of consolidation

KION GROUP AG’s equity investments include subsidiaries, joint ventures, associates and financial investments.

In addition to KION GROUP AG, the consolidated financial statements of the KION Group include, using the acquisition method, all material subsidiaries in which KION GROUP AG holds a majority of the voting rights, either directly or indirectly, or in which it exercises control i.e. has the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. Subsidiaries acquired in the course of the financial year are consolidated from the date at which control is transferred, i.e. the date from which it is possible to govern their financial and operating policies such that benefit is obtained. Companies sold in the course of the financial year are deconsolidated from the date on which control is lost.

A joint venture is an equity interest in which the entity is jointly managed by companies in the KION Group and one or more partners on the basis of a contractual agreement.

Associates are entities in which companies in the KION Group are able to exercise significant influence, either directly or indirectly, over the financial and operating policies of the entity concerned. Significant influence is assumed when KION GROUP AG holds between 20 per cent and 50 per cent of the voting rights.

All other equity interests over which KION GROUP AG is unable to exercise control or a significant influence, or that are not jointly controlled by KION GROUP AG, are classified as financial investments and are not consolidated.

The following table shows the number of equity investments broken down by category: >> Table 039

A total of 22 German and 77 foreign subsidiaries were fully consolidated in addition to KION GROUP AG as at 31 December 2013.

On 11 June 2013, Superlift Holding S.à r.l., Luxembourg, made a non-cash capital contribution – including all of the shares in Superlift Funding S.à r.l., Luxembourg – to KION GROUP AG as part of a capital increase. Superlift Funding S.à r.l. was therefore consolidated as part of the KION Group for the first time in June 2013.

In July 2013, the KION Group also acquired the remaining shares (45.7 per cent) in the French dealer Bretagne Manutention S.A. for a purchase consideration of €16.2 million. As a result, as at 31 December 2013, KION GROUP AG indirectly held all the capital and voting shares in Bretagne Manutention S.A., Pacé, France, via Fenwick-Linde S.à r.l., Elancourt. The shortfall of €13.0 million between the amount of the non-controlling interest and the fair value of the consideration paid is recognised in retained earnings.

Furthermore, in September 2013, the KION Group acquired the remaining shares (49.9 per cent) in the French dealer MANUSOM SAS for a purchase consideration of €0.4 million. As a result, as at 31 December 2013, KION GROUP AG indirectly held all the capital and voting shares in MANUSOM SAS, Rivery, via STILL SAS, Marne la Vallée, France.

Five insignificant subsidiaries were deconsolidated in 2013. In 2012, the KION Group sold and deconsolidated its controlling interest of 70 per cent in Linde Hydraulics GmbH & Co. KG, Aschaffenburg (referred to below as Linde Hydraulics), to Weichai Power Co., Ltd., Weifang, China (referred to below as Weichai Power). Linde Material Handling GmbH (referred to below as LMH GmbH) continues to hold the remaining 30 per cent. Linde Hydraulics is included in the scope of consolidation as an associate accounted for using the equity method.

Eight joint ventures and associates were accounted for under the equity method as at 31 December 2013 (31 December 2012: ten). Two insignificant equity investments are no longer accounted for using the equity method. In each case, measurement under the equity method was performed on the basis of the last available annual financial statements.

53 (2012: 39) companies with minimal business volumes or no business operations were not included in the consolidation. The unconsolidated subsidiaries and the associates not accounted for using the equity method are of minor importance to the presentation of the financial position and financial performance of the KION Group, both individually and as a whole.

Where other requirements are met, the following fully consolidated companies are exempt from the requirement to prepare annual financial statements and management reports in accordance with sections 264 (3) and 264b HGB on account of their inclusion in the consolidated financial statements: >> Table 040

A detailed overview of all the direct and indirect shareholdings of KION GROUP AG is shown in the list of shareholdings in note [45].