Audi 2015 Annual Report Download - page 229

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
GENERAL INFORMATION
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The risk provisioning takes account of the accountabilities as
clarified within the Volkswagen Group. In connection with the
four-cylinder TDI engine issue, Volkswagen AG has confirmed
to AUDI AG that, on the basis of existing agreements, AUDI AG
has a corresponding entitlement to compensation and that
Volkswagen AG will release AUDI AG in particular from the
direct and indirect expenses arising in this connection, includ-
ing those for legal risks. In addition, AUDI AG has concluded
an agreement with Volkswagen AG on the V6 3.0 TDI engine
issue in the event that the U.S. authorities, U.S. courts and
potential out-of-court settlements do not differentiate between
the four-cylinder TDI engine issue for which Volkswagen AG is
accountable and the V6 3.0 TDI engine issue of AUDI AG, and
that joint and several liability thus arises. In that eventuality,
costs for legal risks will be passed on to AUDI AG according to
a causation-based cost allocation. In view of this arrangement
with Volkswagen AG and the relatively low costs of the tech-
nical measures planned by AUDI AG to rectify the AECD issue for
the V6 3.0 TDI, in all probability the share of costs allocable to
AUDI AG will have no material effect on the present and future
net worth, financial position and financial performance of the
Audi Group.
Nor are any facts currently known to the incumbent Board of
Management which would imply that the Consolidated Finan-
cial Statements for 2014 were materially incorrect if individual
Board of Management members responsible for them pos-
sessed knowledge of the matter earlier, or that the compara-
tive figures for 2014 would correspondingly need to be
changed. However if, in the course of further investigations,
new findings should come to light that indicate that individual
members of the Board of Management at that time were
aware of the diesel issue earlier, this could potentially have an
effect on the Consolidated Financial Statements for the 2015
fiscal year and the comparative figures for 2014.
/NOTES ON THE AIRBAG RECALL
Audi, along with other automotive manufacturers, has been
informed by the U.S. National Highway Traffic Safety Admin-
istration (NHTSA) that certain front airbags (driver’s side) made
by the Japanese airbag manufacturer Takata might be faulty.
On the advice of NHTSA, the Audi Group will recall 170,000
vehicles of the model years 2005 to 2013 as a precaution.
A provision was created for this in the 2015 fiscal year.
/CONSOLIDATED COMPANIES
In addition to AUDI AG, all of the material domestic and foreign
subsidiaries are included in the Consolidated Financial Statements
in cases where AUDI AG has direct or indirect decision-making
power over the relevant activities, thereby influencing its own
variable returns. The inclusion in the group of consolidated
companies begins or ends on the date on which the control is
acquired or lost.
Special securities funds are also included in the Audi Group’s
Consolidated Financial Statements. These structured entities
pursuant to IFRS 12 do not present any special risks or result
in any particular obligations for Audi.
Companies in which AUDI AG does not hold any interests,
either directly or indirectly, are included in the Consolidated
Financial Statements. As a result of contractual agreements,
however, AUDI AG exerts control. Non-controlling interests in
equity and in profit are allocated to the following companies
on a 100 percent basis in each case.
Company Non-controlling interests
Audi Canada Inc., Ajax (Canada) Volkswagen Group Canada, Inc.,
Ajax (Canada)
Audi of America, LLC, Herndon (USA) VOLKSWAGEN GROUP OF
AMERICA, INC., Herndon (USA)
Automobili Lamborghini America,
LLC, Herndon (USA)
VOLKSWAGEN GROUP OF
AMERICA, INC., Herndon (USA)
Further information on non-controlling interests is provided in
Note 25.
Subsidiaries with limited business operations that are of sub-
ordinate importance, both individually and in total, with regard
to providing a true and fair view of the net worth, financial
position and financial performance and cash flow are not con-
solidated. Before consolidation, these subsidiaries account for
0.6 (0.8) percent of consolidated equity, 0.4 (0.4) percent of
profit after tax, and 0.5 (0.6) percent of the Audi Group’s total
assets. Associated companies and joint ventures with only
limited business operations are also not consolidated using
the equity method for reasons of materiality.
Subsidiaries, associated companies and joint ventures that are
not fully consolidated or consolidated using the equity method,
as well as financial participations, are as a general rule reported
at amortized cost. Where there is evidence that the fair value
is lower, this fair value is recognized.
The group of consolidated companies was extended on Decem-
ber 31, 2014 to include the established Audi Luxembourg S.A.
(Luxembourg). Also during the fiscal year, A-K Projekt Éplog Kft.,
Győr (Hungary), Audi Akademie Hungaria Kft., Győr (Hungary),
and Audi Real Estate S.L., El Prat de Llobregat (Spain), were
merged into the Group. These integrated companies are imma-
terial subsidiaries.
The Audi Group does not wholly own PSW automotive engi-
neering GmbH, Gaimersheim. However, given that in business
terms Audi also bears the risks and has access to the economic