[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 authority over the main activities of the entity and can use this authority 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 percent and 50 percent 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 following table shows the number of equity investments broken down by category:

A total of 26 (2019: 26) German and 110 (2019: 107) foreign subsidiaries were fully consolidated in addition to KION GROUP AG as at December 31, 2020.

In addition, eight associates (December 31, 2019: seven) and two joint ventures (December 31, 2019: two) were consolidated and accounted for using the equity method as at December 31, 2020. In each case, the last available annual financial statements were used as the basis for measurement.

As at December 31, 2020, 51 (December 31, 2019: 53) companies were recognized at amortized cost or at fair value through other comprehensive income. The non-consolidated subsidiaries recognized at amortized cost and the joint ventures and associates that are not accounted for using the equity method were 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 were met, the following fully consolidated companies were exempt from the obligation to disclose annual financial statements and to prepare notes to the (consolidated) financial statements and (group) management reports in accordance with sections 264 (3), 264b and 291 (2) 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 2020, the following UK subsidiaries 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 were 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 [49]).