D. Acquisitions and other additions to the scope of consolidated financial statements

The following entities were included in the consolidated financial statements for the first time during the business year 2013/14:

Additions to the scope of consolidated financial statements of fully consolidated entities include five acquisitions, four newly established subsidiaries, and the consolidation of four entities not previously included in the scope of the consolidated financial statements.

In accordance with IFRS 3, the acquired companies are included in the consolidated financial statements at the fair value carried forward of the acquired assets, liabilities, and contingent liabilities determined as of the acquisition date, including depreciation and amortization as appropriate. The carrying amount of the non-controlling interests is determined based on the fair values carried forward for the assets and liabilities acquired. In accordance with IFRS 3, property, plant and equipment, intangible assets, inventories as well as provisions, and consequently the item goodwill, shall be considered provisional due to uncertainties in their valuation.

The increase of majority interests is treated as a transaction between owners. The difference between the costs of acquisition for the additional shares and the pro-rated carrying value of the non-controlling interests is recognized directly in equity. During the reporting period, EUR 6.2 million (2012/13: EUR 14.9 million) was paid for the acquisition of non-controlling interests or provisions were formed for the payment thereof. Non-controlling interests amounting to EUR 4.1 million (2012/13: EUR 7.7 million) were derecognized, and the remaining amount of EUR 2.1 million (2012/13: EUR 7.2 million) was charged directly in equity.

Put options granted to non-controlling shareholders in exchange for their shares in Group companies are recorded in the statement of financial position as liabilities stated at fair value. If the risks and rewards associated with ownership of a non-controlling interest have already been transferred at the time the majority interest was acquired, an acquisition of 100% of the entity is assumed. If, however, the risks and rewards have not been transferred, the non-controlling interest continues to be shown in equity. The liability is covered by a direct transfer from retained earnings with no effect on profit or loss (double credit approach).

Open put options, which are charged against equity, had a fair value of EUR 5.7 million (March 31, 2013: EUR 10.0 million) as of March 31, 2014. Due to possible changes in the shareholder structure, in one case, the multiplicator method and/or the discounted cash flow method applied in the previous year were replaced by valuation using the pro rata carrying amount of equity. In another case, the discounted cash flow method was applied in accordance with the contractual maximum limits. Input factors in the discounted cash flow method include but are not limited to the medium-term business plan and the discount rate.

The Steel Division has increased its share in the VA OMV Personalholding GmbH from 50% to 100% as a result of the discontinuation of a common basis for doing business. After recording an upward revaluation of the former shares amounting to EUR 0.8 million in financial income, negative goodwill amounting to EUR 0.8 million was recognized in EBIT within the scope of first-time consolidation.

The Metal Engineering Division acquired the Italian company Trafilerie di Cittadella S.p.A. in the first quarter of the business year 2013/14. voestalpine Böhler Welding Group GmbH (CGU Welding Consumables) thus holds 90% of the shares of this company that specializes in the manufacture of high-quality seamless flux cored wire, which is especially suited for welding high-strength, cryogenic, and high-temperature steels, whose product characteristics are the result of the unique production process. Trafilerie di Cittadella S.p.A., which has 60 employees, generated annual revenue of EUR 13.7 million in 2012. The acquisition enhances the expertise of the CGU Welding Consumables with regard to flux cored wire. In December 2013, the CGU Welding Consumables of the Metal Engineering Division acquired the Indian company Maruti Weld Pvt Ltd, which is headquartered in Delhi. The 180-employee-strong company, which specializes in manufacturing welding electrodes, generated annual revenue of EUR 6.7 million in 2012 and is among the top ten companies on the Indian welding technology market. For voestalpine, this acquisition represents yet another expansion of its product portfolio in the welding technology segment and provides an outstanding, regional production base for the penetration of the Indian growth market. These are the main reasons for the goodwill paid.

The strategically important acquisition of Eifeler France S.a.r.l. was completed in December 2013 by the Special Steel Division; this is part of the acquisition of a total of nine companies of the Eifeler Group in Germany, Switzerland, and the USA in March 2013. Eifeler France S.a.r.l., which has 15 employees, reports annual revenue of EUR 1.6 million. With the expertise available in the companies acquired from the Eifeler Group, the position of the Special Steel Division as worldwide market and technology leader in tool steel can be enhanced even further. The second acquisition during business year 2013/14 by the Special Steel Division involved Rieckermann Steeltech Ltd. (Shanghai) and P.M. Technology Ltd. (Shenzhen). The division acquired these production and service sites in China, which employ a total of around 100 employees, as part of an asset deal. These acquisitions have expanded the distribution network in China and strengthened the division’s local presence in the field of sophisticated special materials for oil and gas production, the energy and fuel sectors as well as the aviation industry.

These acquisitions had the following effects on the consolidated financial statements:

Since their initial consolidation, these acquisitions have contributed revenue of EUR 21.8 million to consolidated revenue. Their share of the Group’s profit for the period was EUR –0.8 million for the same period. The consolidated revenue would have been EUR 9.8 million higher and the Group’s profit for the period would have been EUR 0.6 million higher if the acquisitions had been consolidated as of April 1, 2013.

Fair values were applied for trade receivables in the amount of EUR 2.9 million and other receivables in the amount of EUR 0.3 million as part of the acquisition of Trafilerie di Cittadella S.p.A. For Eifeler France S.a.r.l., trade receivables in the amount of EUR 0.2 million were acquired. The acquisition of Maruti Weld Pvt Ltd transferred trade receivables in the amount of EUR 0.6 million and other receivables in the amount of EUR 0.1 million. Trade receivables in the amount of EUR 4.3 million and other receivables in the amount of EUR 0.5 million of newly consolidated vaps Personalservice GmbH were consolidated for the first time. Any receivables associated with all the acquisitions that are likely to be uncollectible are considered immaterial and negligible.

Acquisition-related costs of EUR 0.5 million were recognized under other operating expenses and EUR 0.1 million under cost of sales for these acquisitions.

With regard to the aforementioned acquisitions, it is not expected that portions of the recognized goodwill are deductible for corporate income tax purposes.