[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 over which KION GROUP AG exercises control. KION GROUP AG controls a subsidiary if it has decision-making power over the main activities of the entity and can use this power to affect the amount of the variable returns to which it is exposed as a result of the equity investment. Subsidiaries acquired in the course of the financial year are consolidated from the date on which control 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, and these parties have rights to the net assets of the joint venture.

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. Financial investments are not consolidated.

The number of equity investments broken down by category is shown in > TABLE 039

A total of 21 German (2013: 22) and 75 foreign (2013: 77) subsidiaries were fully consolidated in addition to KION GROUP AG as at 31 December 2014.

Three subsidiaries were deconsolidated in 2014. Information on the disposal of one subsidiary can be found in note [5].

Nine joint ventures and associates were accounted for under the equity method as at 31 December 2014 (31 December 2013: eight). Two equity investments have been accounted for using the equity method since 1 January 2014 owing to their increased financial significance. One insignificant equity investment is now accounted for at cost rather than using the equity method. In each case, measurement under the equity method was performed on the basis of the last available annual financial statements.

52 (2013: 53) companies with minimal business volumes or no business operations were not included in the consolidation. The unconsolidated subsidiaries and the joint ventures and 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 (note [45]).