[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.

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.

The number of equity investments broken down by category is shown in > TABLE 041.

A total of 22 German (2014: 21) and 80 foreign (2014: 75) subsidiaries were fully consolidated in addition to KION GROUP AG as at 31 December 2015. The acquisition of the logistics automation division involved the acquisition of Egemin NV, Zwijndrecht, Belgium, plus its eight subsidiaries (see note [5]). Three insignificant subsidiaries were deconsolidated in October 2015 and will be accounted for at cost in future.

As had been the case a year earlier, nine joint ventures and associates were accounted for under the equity method as at 31 December 2015. In each case, measurement under the equity method was performed on the basis of the last available annual financial statements.

55 (2014: 52) companies with minimal business volumes or no business operations were not included in the consolidation. In February 2015, the KION Group acquired a 10.0 per cent stake in robotics specialist Balyo SA, Moissy-Cramayel, France. This equity investment is carried at cost. In October 2015, 100.0 per cent of the shares in the dealer Moden Diesel S.p.A. (formerly MODEN DIESEL S.R.L.), Modena, Italy, were acquired and carried at fair value. At the end of October 2015, 100.0 per cent of the shares in LR Intralogistik GmbH, Wörth an der Isar, Germany, a specialist in intralogistics concepts that eschew forklift trucks in favour of tugger trains, were acquired and carried at fair value. The non-consolidated subsidiaries and other equity investments (joint ventures and associates that are not accounted for using the equity method, plus financial investments) 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 042

A detailed overview of all the direct and indirect shareholdings of KION GROUP AG is shown in the list of shareholdings (note [47]).