[4] Basis of consolidation

KION GROUP AG’s equity investments consist of 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.

Associates are equity investments whose financial and operating policies may be significantly influenced, either directly or indirectly, by companies in the KION Group. Significant influence is assumed when companies in the KION Group hold between 20 per cent and 50 per cent of the voting rights.

Joint ventures are equity investments that are jointly managed by companies in the KION Group together with one or more partners, and these parties have rights to the net assets of the joint venture.

Equity investments over which KION Group companies are unable to exercise control or a significant influence, or that are not jointly controlled by them, are classified as financial investments.

The number of equity investments broken down by category is shown in > TABLE 043.

A total of 26 (2018: 26) German and 107 (2018: 108) foreign subsidiaries were fully consolidated in addition to KION GROUP AG as at 31 December 2019.

In addition, seven associates and two joint ventures were consolidated and accounted for using the equity method as at 31 December 2019, which was the same number as at 31 December 2018. In each case, the last available annual financial statements were used as the basis for measurement.

In 2019, 53 (2018: 58) companies of minor importance were recognised at amortised cost or at fair value through other comprehensive income. 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 fully consolidated companies listed in > TABLE 044 are exempt from the obligation to disclose annual financial statements and to prepare notes to the financial statements and management reports in accordance with sections 264 (3) and 264b of the German Commercial Code (HGB) on account of their inclusion in the consolidated financial statements. In the case of STILL Financial Services GmbH, it has been decided solely not to disclose the annual financial statements.

For 2019, the UK subsidiaries listed in > TABLE 045 exercised the exemption in section 479A of the UK Companies Act 2006, which releases them from the obligation to have their separate financial statements audited. These subsidiaries are all held indirectly by KION GROUP AG.

A detailed overview of all the direct and indirect shareholdings of KION GROUP AG is shown in the list of shareholdings (see note [48]).