25. Related party disclosures

Business transactions between the Group and non-consolidated subsidiaries and entities consolidated according to the equity method or their subsidiaries as well as proportionately consolidated entities are carried out at arm’s length terms and are included in the following items of the consolidated financial statements:

The receivables and liabilities with entities consolidated according to the equity method and 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 terms and are presented as follows:

In the business year 2012/13, 828 temporary employees (2011/12: 873) from a company reported under other investments were employed to cover short-term personnel shortages.

The non-inclusion of non-consolidated entities in the consolidated financial statements has no significant impact on the Group’s net assets, financial position, and 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 three-year medium-term business plan, i.e., budget compliance does not mean achieving a bonus. In addition to submitting the strategy concept “voestalpine 2020” (including recommendations for the concrete strategic further development of the four divisions), an explicit, precisely quantified reduction of the gearing ratio was agreed in the business year 2012/13 as the qualitative target.

The amount of the contractually approved company pension depends on the length of service for members of the Management Board Dr. Eder, Dipl.-Ing. Mag. 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 and Dipl.-Ing. Dr. Kainersdorfer; 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 (2011/12: EUR 0.2 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 reporting period:

The 2011/12 comparative period includes compensation payments in the amount of EUR 7.3 million for three members of the Management Board who retired as well as one-time payments from a five-year stock option program in the amount of EUR 5.2 million. Currently there is no further stock option program.

Defined benefit (current service costs) and defined contribution pension expense for members of the Management Board amounted to EUR 0.3 million (2011/12: EUR 0.3 million) in the reporting period. Pension benefits were paid in the amount of EUR 0.4 million (2011/12: EUR 0.1 million) for retired members of the Management Board from the pension fund.

At the reporting date, the outstanding balance of the variable compensation was EUR 3.5 million (2011/12: EUR 2.9 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 for the period reported in the approved consolidated financial statements as compensation. The total amount is divided in proportion to the assigned fractions of 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.

According to this regulation, the shareholders’ representatives in the Supervisory Board received the following compensation for the business year 2012/13: Dr. Joachim Lemppenau (Chairman): EUR 80,000 (2011/12: EUR 80,000); Dr. Ludwig Scharinger (Vice-Chairman until July 4, 2012): EUR 15,000 (2011/12: EUR 60,000); Dr. Heinrich Schaller (Vice-Chairman as of July 5, 2012): EUR 45,000; all other shareholders’ representatives: EUR 40,000 (2011/12: 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 are conclusively regulated by the Articles of Incorporation since the 2006 Annual General Meeting and do not require a separate resolution of the Annual General Meeting every year.

The compensation of the Supervisory Board (incl. attendance honorarium) totaled EUR 0.4 million (2011/12: EUR 0.4 million) in the business year 2012/13. Payment of the compensation of the Supervisory Board for the business year 2012/13 is carried out at the latest 14 days after the Annual General Meeting on July 3, 2013. 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, the law firm Binder Grösswang Rechtsanwälte GmbH, of which Dr. Michael Kutschera (member of the Supervisory Board) is partner, provided legal advisory services relative to the minority shareholder squeeze-out procedure related to BÖHLER-UDDEHOLM Aktiengesellschaft in the reporting period 2012/13. Fees for this matter are invoiced at the general hourly rates of the law firm of Binder Grösswang Rechtsanwälte GmbH applicable at the time. For the business year 2012/13, total net fees of EUR 35,420.83 (2011/12: EUR 89,791.00) were incurred for services provided by the law firm of Binder Grösswang Rechtsanwälte GmbH.