General information on the Company
At the Shareholders’ Meeting on 25 April 2013, it was decided to transform KION Holding 1 GmbH, whose registered office is at Abraham-Lincoln-Strasse 21, 65189 Wiesbaden, Germany, into a public stock corporation with the name KION GROUP AG. The transformation became legally effective when KION GROUP AG was entered in the commercial register at the Wiesbaden local court under reference HRB 27060 on 4 June 2013. KION GROUP AG is the parent company of the KION Group in Germany. Superlift Holding S.à r.l., Luxembourg, is the parent company of KION GROUP AG.
The condensed consolidated interim financial statements were prepared by the Executive Board of KION GROUP AG on 7 August 2013.
Basis of preparation
The condensed consolidated interim financial statements of the KION Group for the six months ended 30 June 2013 have been prepared in line with International Accounting Standard (IAS) 34 “Interim Financial Reporting” and other International Financial Reporting Standards (IFRSs) as adopted by the European Union in accordance with Regulation (EC) No. 1606 / 2002 of the European Parliament and of the Council concerning the application of international accounting standards for interim financial statements. A condensed scope of interim reporting has been prepared in accordance with IAS 34.
All of the IFRSs and the related interpretations (IFRICs / SICs) of the IFRS Interpretations Committee (IFRS IC) that had been issued by the reporting date and that were required to be applied for financial years commencing on or after 1 January 2013 have been applied in preparing these condensed consolidated interim financial statements. These condensed consolidated interim financial statements do not contain all the information and disclosures required of a set of consolidated annual financial statements and should therefore be read in conjunction with the consolidated financial statements prepared for the year ended 31 December 2012. With the exception of the new IFRS standards and interpretations described below, the accounting policies used to prepare these condensed consolidated interim financial statements were the same as those used to prepare the consolidated financial statements for the year ended 31 December 2012.
Financial reporting standards to be adopted for the first time in the current financial year
The following financial reporting standards were adopted for the first time in the condensed consolidated interim financial statements for the six months ended 30 June 2013:
- Amendments to IFRS 1 “First-time Adoption of International Financial Reporting Standards”: amendments relating to fixed transition dates and severe hyperinflation
- Amendments to IFRS 1 “First-time Adoption of International Financial Reporting Standards”: amendments relating to government loans with a below-market rate of interest
- Amendments to IFRS 7 “Financial Instruments: Disclosures”: offsetting of financial assets and financial liabilities
- IFRS 13 “Fair Value Measurement”
- Amendments to IAS 1 “Presentation of Financial Statements”: amendments relating to the presentation of items of other comprehensive income
- Amendments to IAS 12 “Income Taxes”: limited amendment to IAS 12 relating to the recovery of underlying assets
- Amendments to IAS 19 “Employee Benefits”: elimination of the use of the “corridor” approach and amendments relating to the presentation of items of pension expense
- IFRIC 20 “Stripping Costs in the Production Phase of a Surface Mine”
- Improvements to IFRSs (2009—2011).
Apart from the changes described below, the first-time adoption of these standards and interpretations has had no significant effect on the financial position or financial performance of the KION Group or on the disclosures in the notes to its financial statements:
- The amended IAS 1 results in a revised presentation of the statement of comprehensive income. Following the amendment to the standard, the items of other comprehensive income and loss must be split into items that will never be reclassified to profit or loss and items that might be reclassified to profit or loss in future periods.
- The publication of IFRS 13 “Fair Value Measurement” introduces a separate standard containing general rules on the measurement of fair value. The KION Group is applying these rules for the first time in the 2013 financial year. The main impact of this is enhanced disclosures in the notes to the financial statements.
- The effects of the amendments to IAS 19 are described in the section “Accounting policies”.
Financial reporting standards released but not yet adopted
In its condensed consolidated interim financial statements for the six months ended 30 June 2013, the KION Group has not applied—besides the standards and interpretations that it did not apply as at 31 December 2012—the following standards and interpretations, which have been issued by the IASB but are not yet required to be applied in 2013:
- Amendments to IAS 36 “Impairment of Assets”: clarification of recoverable amount disclosures required for non-financial assets
- Amendments to IAS 39 “Financial Instruments: Recognition and Measurement”: amendments relating to the novation of derivatives and continuation of hedge accounting
- IFRIC 21 “Levies”.
These standards and interpretations will only be applied by the companies included in the KION Group from the date on which they must be adopted for the first time. Their effects on the financial position and financial performance of the KION Group are expected to be insignificant.
The reporting currency is the euro. All amounts are disclosed in millions of euros (€ million) unless stated otherwise. The addition of the totals presented may result in rounding differences of + / - € 0.1 million. The percentages shown are calculated on the basis of the respective amounts, rounded to the nearest thousand euros.
Basis of consolidation
A total of 19 German and 80 foreign subsidiaries were fully consolidated in addition to KION GROUP AG as at 30 June 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 addition, ten joint ventures and associates were consolidated and accounted for using the equity method as at 30 June 2013, which was the same number as at 31 December 2012; 40 (31 December 2012: 39) companies with minimal business volumes or no business operations were not included in the consolidation.
The accounting policies applied in these condensed consolidated interim financial statements are fundamentally the same as those used for the year ended 31 December 2012. These condensed consolidated interim financial statements are based on the interim financial statements of the parent company and its consolidated subsidiaries prepared in accordance with the standard accounting policies applicable throughout the KION Group.
The amendments in IAS 19R “Employee Benefits” are required to be applied on a retrospective basis to financial statements for financial years commencing on or after 1 January 2013. In the KION Group, actuarial gains and losses, including deferred taxes, were already recognised in other comprehensive income (loss).
First-time adoption of the revised IAS 19 in the KION Group for the 2013 financial year has led to an overall decrease in retained earnings /net income of € 3.3 million with effect from 1 January 2012. Firstly, this is the result of the revised definition of termination benefits, according to which partial retirement bonus payments must be accumulated as other long-term benefits for employees on a pro-rata basis over the vesting period. This has led to an increase in retained earnings / net income of € 1.8 million with effect from 1 January 2012. Secondly, because the amendment to IAS 19R requires the past service cost to be recognised immediately, retained earnings / net income declined by € 0.8 million. Furthermore, alignment of the expected return on plan assets with the discount rate caused retained earnings / net income to fall by € 4.3 million with effect from 1 January 2012, while there was an equivalent rise in gains / losses on employee benefits recognised in other comprehensive income (loss).
Net income for the 2012 financial year has also increased retrospectively by € 1.0 million, while other comprehensive income (after deferred taxes) has gone down by € 1.0 million owing to the alignment of the expected return on plan assets with the discount rate. The change in the accounting treatment of provisions for partial retirement obligations has resulted in a decrease in net income (after income taxes) of € 0.8 million for the 2012 financial year. The consequences of the above effects for the first half of 2012 were a rise of € 0.1 million in net income (after income taxes) and a decline of € 0.5 million in other comprehensive income (loss).
Assumptions and estimates
The preparation of these condensed IFRS consolidated interim financial statements requires the use of assumptions and estimates for certain line items that affect recognition and measurement in the statement of financial position and the income statement. The actual amounts realised may differ from estimates. Assumptions and estimates are applied in particular:
- in assessing the need for and the amount of impairment losses on intangible assets, property, plant and equipment, and inventories;
- in determining the useful life of non-current assets;
- in classifying leases;
- to the recognition and measurement of defined benefit pension obligations, provisions for tax, and other provisions; and
- in assessing the recoverability of deferred tax assets.
The estimates may be affected, for example, by deteriorating global economic conditions or by changes in exchange rates, interest rates or commodity prices. Production errors, the loss of key customers and changes in financing can also impact on the Company’s performance going forward. Changes are recognised in profit or loss when they become known and assumptions are adjusted accordingly.