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 2014/15:

Additions to the scope of consolidated financial statements of fully consolidated entities include one acquisition, seven newly established subsidiaries, and one spin-off. voestalpine Tubulars GmbH and voestalpine Tubulars GmbH & Co KG were proportionately consolidated up to March 31, 2014, and, beginning with the business year 2014/15, the equity method is being applied.

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. Because of time constraints and the fact that not all valuations have been completed, in accordance with IFRS 3, property, plant and equipment, intangible assets, inventories, and provisions—and consequently goodwill as well— should be considered provisional.

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 9.9 million (2013/14: EUR 6.2 million) was paid for the acquisition of non-controlling interests or provisions were formed for the payment thereof. Non-controlling interests amounting to EUR 7.6 million (2013/14: EUR 4.1 million) were derecognized, and the remaining amount of EUR 2.3 million (2013/14: EUR 2.1 million) was recognized 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).

Outstanding put options, which are offset against equity, had a fair value of EUR 0.6 million (March 31, 2014: EUR 5.7 million) as of March 31, 2015. For the purposes of the valuation, the discounted cash flow method was applied, taking the contractual maximum limits into account. Input factors in the discounted cash flow method include but are not limited to the medium-term business plan and the discount rate.

voestalpine Wire Technology GmbH, a company in the Metal Engineering Division of the voestalpine Group, has acquired 100% of Italian company Trafilerie Industriali S.p.A., a specialist in the production of drawn wire. It has a staff of around 80 employees and generated annual revenue of EUR 43.8 million in 2013. In acquiring Trafilerie Industriali S.p.A., voestalpine Wire Technology GmbH is gaining a leading Italian manufacturer of wire that produces around 50,000 tons annually. voestalpine Wire Technology GmbH is thereby extending its own portfolio of drawn and blank wire, further investing in the value creation chain of premium quality merchandise for the automobile industry, while at the same time bolstering its market position in Italy. The company now operates under the name voestalpine Trafilerie Industriali S.p.A.

As part of an asset deal, the Metal Engineering Division acquired the corresponding production facilities at the Königsborn location, and integrated them into the newly established voestalpine Rail Center Königsborn GmbH. As part of the transaction, 25 employees were taken over. Through this asset deal, the rail service offerings of the division in Germany have been further built up.

In the fourth quarter of the business year, the takeover of the Australian company Bathurst Rail Fabrication Centre (BRFC) was completed, through which the business segment Turnout Systems was able to further build up its leading market position in Australia. This specialist in high quality welded rails, switches, and track components employs approximately 47 persons, and most recently achieved annual sales of approximately EUR 34 million. With its switch and track welding facility, BRFC is the central railroad expertise center for Sydney Trains, which in turn operates a large part of the railway network of the Australian state of New South Wales. Through the acquisition of BRFC, one of the five largest railway system providers in Australia, the business segment Turnout Systems has expanded its product and customer portfolio in the direction of passenger and commuter transportation as well toward the heavy-haul sector, which is important there.

These three acquisitions had the following effect on the consolidated financial statements:

The goodwill of EUR 7.3 million includes EUR 7.1 million from the acquisition of Trafilerie Industriali S.p.A. This is due to the profit potential of the company, which is not a capitalizable cost according to IFRS, including specifically the extensive technical expertise and the outstanding sales expertise of the employees. This goodwill is assigned to “Wire Technology,” the unit which carries the goodwill. It is not expected that any parts of the acquired goodwill will be eligible for corporate tax deductions.

Since their initial consolidation, this acquisition has contributed revenue of EUR 14.8 million to consolidated revenue. Its share of the Group’s profit for the period was EUR 0.6 million for the same period. The consolidated revenue would have been EUR 81.2 million higher and the Group’s profit for the period would have been EUR 5.0 million higher if the acquisitions had been consolidated as of April 1, 2014.

Fair values were applied for trade receivables in the amount of EUR 14.0 million and other receivables in the amount of EUR 0.1 million as part of the acquisition of Trafilerie Industriali S.p.A. 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 for this acquisition.

With regard to the aforementioned acquisitions, it can be assumed that tax deductions can be claimed for portions of the recognized goodwill insofar as they are deductible for corporate income tax purposes under current law. This has not yet been determined. However, the amounts are immaterial and negligible for the voestalpine consolidated financial statements.