25. Related party disclosures

Business transactions between the Group and non-consolidated subsidiaries and associates or their subsidiaries as well as joint ventures are carried out at arm’s length and are included in the following items of the consolidated financial statements:

Receivables and liabilities with associates and joint ventures as well as with non-consolidated subsidiaries comprise both direct and indirect relationships.

In addition, there are business transactions with core shareholders that have a significant influence due to consolidation of the voestalpine shares using the equity method. Business transactions are carried out at arm’s length and can be depicted as follows:

The non-inclusion of non-consolidated entities in the consolidated financial statements has no significant impact on the Group’s net assets, financial position, or results of operations.

Management Board

The fixed compensation of the Management Board is determined by the General Committee of the Supervisory Board pursuant to the Austrian legal situation and is reviewed periodically.

The award of a bonus is subject to a target agreement to be concluded with the General Committee of the Supervisory Board and consisting of quantitative and qualitative targets. The maximum bonus is limited to 200% of the annual gross salary for members of the Management Board and to 250% of the annual gross salary for the Chairman of the Management Board. If the agreed target values for quantitative targets are achieved exactly, 60% of the maximum bonus applies; if the agreed target values for qualitative targets are achieved, 20% of the maximum bonus applies. The over-achievement of the targets is taken into consideration proportionately until the maximum bonus is reached. The target amounts for the quantitative targets are EBIT and the return on capital employed (ROCE). Specific target amounts are determined periodically (for a period of three years) by the General Committee of the Supervisory Board in consultation with the Management Board. Its basis of calculation is independent of the respective budget and the medium-term business plan, i.e., budget compliance does not mean achieving a bonus. The qualitative targets for the business year 2015/16 were first of all the presentation of a long-term voestalpine Group strategy for China and, secondly, the update of the voestalpine Group’s “Strategy 2020,” which was adopted in 2012.

The amount of the contractually approved company pension depends on the length of service for members of the Management Board Dr. Eder, Mag. Dipl.-Ing. Ottel, and Dipl.-Ing. Eibensteiner. The amount of the annual pension equals 1.2% of the last annual gross salary for each year of service. The pension benefit cannot exceed 40% of the last annual gross salary (without variable compensation). A defined contribution arrangement was made with the members of the Management Board Dipl.-Ing. Rotter, Dipl.-Ing. Dr. Kainersdorfer, and Dipl.-Ing. Dr. Schwab; whereby 15% of their annual gross salary (without bonuses) is paid by the Company into the pension fund.

The members of the Management Board receive severance benefits at the time of termination of their employment by way of analogous application of the Salaried Employees Act (Angestelltengesetz).

For the members of the Management Board (as well as for executives) and for the members of the Supervisory Board there is a D&O insurance, the costs of which amounting to EUR 0.1 million (2014/15: EUR 0.1 million) are borne by the entity.

The compensation paid to the members of the Management Board of voestalpine AG is comprised as follows for the business year 2015/16:

In addition to the remuneration in accordance with the above table, the following service costs (personnel expenses) are recognized in the consolidated financial statements for members of the Management Board with defined benefit pension agreements: Dr. Eder EUR 0.00 million (2014/15: EUR 0.00 million), Mag. Dipl.-Ing. Ottel EUR 0.35 million (2014/15: EUR 0.19 million), and Dipl.-Ing. Eibensteiner EUR 0.31 million (2014/15: EUR 0.17 million). The following additional pension costs are recognized in the consolidated financial statements for members of the Management Board with defined contribution pension agreements: Dipl.-Ing. Rotter EUR 0.11 million (2014/15: EUR 0.11 million), Dipl.-Ing. Dr. Kainersdorfer EUR 0.11 million (2014/15: EUR 0.11 million), and Dipl.-Ing. Dr. Schwab EUR 0.09 million (2014/15: EUR 0.03 million; as of October 1, 2014 member of the Management Board). Pension payments amounting to EUR 0.93 million (2014/15: EUR 0.74 million) were paid by the pension fund for former members of the Management Board with defined benefit pension agreements.

At the reporting date, the outstanding balance of the variable compensation was EUR 4.92 million (2014/15: EUR 4.91 million). No advances or loans were granted to the members of the Management Board of voestalpine AG.

Directors’ dealings notices of the members of the Management Board are published on the website of the Austrian Financial Market Authority at www.fma.gv.at.

Supervisory Board

Under Sec. 15 of the Articles of Incorporation, the members of the Supervisory Board of voestalpine AG receive 0.1% of the profit after tax reported in the approved consolidated financial statements as compensation. The total amount is distributed in accordance with an allocation key as follows: 100% for the Chairman, 75% for the Vice-Chairman, and 50% for all other members, with a minimum compensation of EUR 20,000 for the Chairman, EUR 15,000 for the Vice-Chairman, and EUR 10,000 for all other members of the Supervisory Board. Compensation is limited to a multiple of four times the stated amounts. Additionally, members of the Supervisory Board receive an attendance honorarium amounting to EUR 500 per Supervisory Board meeting. There is no separate compensation for meetings of the committees of the Supervisory Board, but they receive an attendance honorarium of EUR 500 per meeting.

According to this regulation, the shareholders’ representatives on the Supervisory Board received the following compensation for the business year 2015/16: Dr. Joachim Lemppenau (Chairman): EUR 80,000 (2014/15: EUR 80,000); Dr. Heinrich Schaller (Vice-Chairman): EUR 60,000 (2014/15: EUR 60,000); Dr. Josef Krenner (member until July 2, 2014): EUR 0 (2014/15: EUR 10,000), Univ.-Prof. (em) Dr. Helga Nowotny (member as of July 2, 2014): EUR 40,000 (2014/15: EUR 30,000); all other shareholders’ representatives: EUR 40,000 (2014/15: EUR 40,000). The members of the Supervisory Board nominated by the Works Council do not receive any compensation.

The annual compensation of members of the Supervisory Board and the mode of calculation have been definitively regulated by the Articles of Incorporation since the 2006 Annual General Meeting and do not require a separate resolution by the Annual General Meeting every year.

The compensation of the Supervisory Board (incl. attendance honorarium) totaled EUR 0.4 million (2014/15: EUR 0.4 million) in the business year 2015/16. Payment of the compensation of the Supervisory Board for the business year 2015/16 is carried out at the latest 14 days after the Annual General Meeting on July 6, 2016. No advances or loans were granted to members of the Supervisory Board of voestalpine AG.

Directors’ dealings notices of the members of the Supervisory Board are published on the website of the Austrian Financial Market Authority at www.fma.gv.at.

As legal counsel to voestalpine AG and its subsidiaries, the law firm Binder Grösswang Rechtsanwälte GmbH, of which Dr. Michael Kutschera (member of the Supervisory Board) is a partner, provided legal advisory services relative to matters concerning corporate law issues in the reporting period 2015/16. Fees for these matters were invoiced at the general hourly rates of the law firm of Binder Grösswang Rechtsanwälte GmbH applicable at the time. For the business year 2015/16, total net fees of EUR 36,994.00 (2014/15: EUR 55,480.00) were incurred for services provided by the law firm of Binder Grösswang Rechtsanwälte GmbH.