The consolidated financial statements include the financial statements of Wacker Chemie AG and all companies over which Wacker Chemie AG has direct or indirect control as defined in IFRS 10, or can exercise common control as defined in IFRS 11. Depending on their structure, companies over which Wacker Chemie AG can exercise common control are included in the consolidated financial statements either proportionately (line-by-line) or accounted for using the equity method. In the absence of other limiting contractual agreements, holding a majority of the voting rights usually leads to control. Common control generally exists when voting rights are equally balanced, except if other (contractual) rights result in control by one shareholder. Currently, no companies are included in the consolidated financial statements on a proportionate basis.

Associated companies in which Wacker Chemie AG can exercise significant influence as defined in IAS 28 are likewise accounted for using the equity method. Significant influence is presumed if Wacker Chemie AG directly or indirectly holds 20 percent of the voting rights in the investment, unless it can be clearly demonstrated that this is not the case.

Structured entities are also consolidated in the manner described in IFRS 10 if the economic substance of the relationship indicates the existence of control. WACKER includes one structured entity in its consolidated financial statements. This is a special trust to which Wacker Chemie AG has contributed funds. This trust fund was established exclusively for WACKER, and all shares in the fund are held by WACKER. Contractual provisions of this fund qualify it as a structured entity as defined in IFRS 10.

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.

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 2015, both its sales and its total assets were below €0.5 million.

A detailed list of the companies included in the consolidated financial statements and of Wacker Chemie AG’s entire shareholdings is shown in the Breakdown of Shareholdings in accordance with Sections 285 and 313 of the German Commercial Code.

Composition of the Group

A total of 60 companies were included in the consolidated financial statements as of December 31, 2016 (Dec. 31, 2015: 57 companies). Compared with December 31, 2015, the scope of consolidation changed as follows:

Change in the Scope of Consolidation

WACKER Biosolutions León S. L. U., León, Spain acquired large-scale fermentation lines from Antibioticos de León by means of an asset deal in December 2016. The purchase price for the facilities amounted to a low double-digit million euro figure, which was capitalized in property, plant and equipment.

On October 1, 2016, WACKER took control of Wacker Asahikasei Silicone Co. Ltd., Tokyo, Japan by contractually agreeing a purchase option to acquire an additional stake in the company. Due to the vested purchase option, exercisable at any time, WACKER has the right to increase its share from 50 percent to 51 percent. Previously accounted for using the equity method, WACKER now recognizes this joint venture as a subsidiary in accordance with IFRS 10. The effect of the change 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 2016 section of the Notes.

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. At the reporting date, there were no significant restrictions due to protective rights to the benefit of non-controlling interests. For more information, please refer to the Notes (Equity / Non-Controlling Interests / Capital Structure Management).

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. Capital may be exported from such countries only with prior approval from government authorities and by means of capital measures (dividends, capital reductions). There are no other significant limitations on assets utility within the Group.