The consolidated financial statements include the financial statements of Wacker Chemie AG and its subsidiaries, as well as joint operations, joint ventures and associates.

Subsidiaries are defined as companies in which Wacker Chemie AG has existing rights that give it the current ability to direct the relevant activities. Thus, control only exists when Wacker Chemie AG is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Usually, the possibility of control depends on Wacker Chemie AG directly or indirectly holding a voting majority. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

Structured entities are also consolidated if the economic substance of the relationship indicates the existence of control. A structured entity serves a specific business purpose. Structured entities have been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when the relevant activities are directed by means of contractual arrangements that cover a narrow and well-defined objective.

Joint operations and joint ventures are based on joint arrangements. A joint arrangement exists if Wacker Chemie AG contractually agrees to share control with a third party to jointly direct activities. Joint control exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to its attributable assets and liabilities from its obligations. The assets, liabilities, income and expenses from joint operations are included in the consolidated financial statements on a pro rata basis in accordance with Wacker Chemie AG’s rights and obligations. In the case of joint ventures, the parties that have joint control of the joint arrangement have rights to the net assets of the arrangement. Joint ventures are accounted for using the equity method.

Currently, no joint operations are accounted for in the consolidated financial statements.

Associates in which Wacker Chemie AG generally exercises significant influence due to ownership of 20–50 percent are likewise accounted for using the equity method.

If joint ventures and associated companies have their own subsidiaries, these are not included in the table below.

Companies in which Wacker Chemie AG has a shareholding of less than 20 percent or does not exercise significant influence are shown as other investments under noncurrent financial assets.

There were two acquisitions in 2014. Compared with December 31, 2013, the scope of consolidation changed as follows.

Change in the Scope of Consolidation

Through its acquisition of the majority of the shares in Siltronic Samsung Wafer Pte. Ltd., Singapore, WACKER gained control of that company on January 24, 2014. For reasons of immateriality, the assets and debts as of January 1, 2014 were used for the first-time consolidation and no interim financial statements were prepared as of January 24, 2014.

The effect of changes in the scope of consolidation on the Group’s earnings, net assets and financial position is presented in the Acquisitions and Majority Takeovers in Fiscal 2014 section of the Notes.

A total of 15 domestic and 40 foreign companies were included in the consolidated financial statements.

As it had no substantial impact on the Group’s earnings, net assets or financial position, the W.E.L.T. Reisebüro GmbH subsidiary was not consolidated. In 2013, both its sales and its total assets were below € 0.4 million. This subsidiary, in which WACKER holds a 51-percent stake, is valued at cost under noncurrent financial assets.

Apart from directly or indirectly controlled companies, WACKER consolidates one structured entity where its influence amounts to control as defined in IFRS 10. This is a special fund into which Wacker Chemie AG has paid investment funds. This trust fund was established exclusively for WACKER, and all shares in the fund are held by WACKER. Due to the contractual stipulations, the trust represents a structured entity as defined in IFRS 10.

Legal, contractual or regulatory restrictions and protective rights concerning non-controlling interests can limit the Group in its ability to retain access to assets, transfer these to or from other companies unhindered within the Group and to settle Group debts. The distribution of dividends can be limited by the prioritization of retirement of shareholder loans. On the reporting date, no significant non-controlling interests are included in the Group financial statements. As a result, no significant limitations exist due to protective rights that benefit these shareholders.

In certain countries, regulatory requirements or local corporate-law stipulations can limit the Group’s ability to transfer assets to or from other companies within the Group. Cash and cash equivalents are subject to local foreign-exchange restrictions in some Asian and South American countries. There, the export of capital from the specific country is only possible via capital measures (dividends, capital reductions) following prior approval from national authorities. There are no other significant limitations concerning the utility of assets within the Group.