Annual Report 2003

REPORT BY THE BOARD OF DIRECTORS ANNUAL REPORT Ž E L E Z I A R N E P O D B R E Z O V Á 2 0 0 3 29 After Železiarne Podbrezová acquired capital of this company in 2002, the financial standing of ŽĎAS a. s. has dramatically been improved, especially in the area of sales financing and of investment projects. Financial revitalization was the core strategy accomplished relatively early due to a joined effort of all involved. By means of a division-like organization and of distribution of responsibilities and section management, the necessary inter-link has been achieved in all activities. The organization's six specialized departments: finance, sales, techniques, logistics, production, and human resources. Production activities of ŽĎAS are organized under five production sections: production of forming machines, rolling mills, metallurgy, tool production, and external assembly. 2003 was a revitalizing, stabilizing and generally successful one for ŽĎAS a.s. It laid the basis for its further enhancement and incorporation within the European industrial structures. The company has produced income from the sale of merchandise, products and services totalling 2 347 606 thousand CZK (2 969 722 thousand SKK). Of this, 36 % was earned by export. After the loss of 2002, last year saw the after tax profit of 87 843 thousand CZK (111 121 thousand SKK). Yet, the expected level has not been met, due mostly to an increase in the price of raw materials. The company has share capital of 1 395 303 thousand CZK (1 765 058 thousand SKK) with total assets of 2 607 035 thousand CZK (3 297 899 thousand SKK), a loan representing 39,4 % of total liabilities. In 2003, the company employed 2945 people, this being 3,2 % less when compared with 2002. The company was founded in 2000 and is currently structured insix independently organized units providing services in the area of travelling, tourism, sports and leisure activities in the Low Tatras National Park region. The company runs a golf course with an 18-hole golf course, Gray Bear, which was in its first year of operation in 2003. Another area is a ski resort with ski lifts and slopes maintenance in the winter season. The company runs hotels Stupka and Golf, and the motel Tále. It also incorporates a travel agency providing air tickets and arranging trips. Due to economic reasons impacting the potential of customers, last year proved to be quite difficult for this type of business. Despite all discouraging factors however, attendance grew in the sporting resorts, both in summer and in winter. In 2003, the company sold goods and services totalling 119 505 thousand SKK, an increase by 15,5 % when compared with 2002. Such an increase was not enough for the company to produce a profit, due to the increase in energy costs. The company therefore produced a loss of 10 223 thousand SKK. Bearing in mind the above-mentioned, the board of directors considers this result acceptable. The company has undergone changes in its capital structure and in ownership and ended the year with share capital of 340 000 thousand SKK and with total assets 445 866 thousand SKK, the loan representing 19,8 % of total liabilities. In 2003, 135 people were employed in Tale a.s., 6,9 % less than in 2002. ŽĎAS, a. s. Tále, a. s.