Scope of consolidated financial statements/acquisitions

The changes made in the scope of consolidated financial statements during the reporting period were as follows:

The following entities were deconsolidated during the first three quarters of the business year 2013/14:

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

Additions to the scope of consolidated financial statements of fully consolidated entities include three acquisitions, four newly established subsidiaries, and the consolidation of three previously non-consolidated entities, including a fund of funds (additions resulting from the change in the consolidation method) that was fully consolidated as of April 1, 2013. The effect on the interim consolidated financial statements can be considered immaterial and negligible.

In accordance with IFRS 3, the acquired companies are included in the interim consolidated financial statements at the fair value 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, and provisions shall be considered provisional due to valuation uncertainties.

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 first three quarters of the business year 2013/14, 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 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 0.6 million (March 31, 2013: EUR 10.0 million) as of December 31, 2013.

In the first quarter of the current business year, the Metal Engineering Division acquired the Italian company Trafilerie di Cittadella S.p.A. voestalpine Böhler Welding Group GmbH (Welding Technology business segment) 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 Welding Technology business segment’s expertise with regard to flux cored wire. In December 2013, the Welding Technology business segment 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 10 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.

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 this business year 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 regional 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 interim consolidated financial statements:

Since their initial consolidation, these acquisitions have contributed revenue of EUR 13.3 million to consolidated revenue. Their 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 7.7 million higher and the Group’s profit for the period would have been EUR 0.3 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 0.3 million and other 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 1.4 million and other receivables in the amount of EUR 0.1 million. Any receivables associated with all the acquisitions that are likely to be uncollectible are considered immaterial and negligible.

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 interim consolidated financial statements.