Annual Report 2004

ANNUAL REPORT 2004 Ž E L E Z I A R N E P O D B R E Z O V Á 23 REPORT BY THE BOARD OF DIRECTORS Financial management An issuance of EUR 15 million of Company's bonds in December 2002 laid the basis for a new financial strategy stretching to 2007. Long term and medium term financing has been stabilized at the level of 61% of these sources compared to the total volume of bank borrowings and bond financing. In order to equalize all creditors, pledges on Company's property has been thoroughly removed. The average interest rate in 2004 topped at 4.15%. Financing in Euro represents 80% to 90% of the total volume of bank facilities drawn and bonds outstanding, and corresponds with the currency structure of income from sales of products, including hedging operations. In the situation of continuously strengthened SKK/EUR rate, we entered into financial derivates contracts in the amount of SKK 55 million to meet an expected exchange rate of 41 SKK/EUR. The average exchange rate from these operations reached 41.40 SKK/EUR and total invested amount of SKK 72 million had positive impact on the financial results of the Company. The Company has met in full and on time its obligations towards financial institutions and towards the state. Main figures from the Balance Sheet in thousand SKK LIABILITIES AND EQUITY as at 31.12.2004 as at 31.12.2003 Total equity and liabilities 5 713 916 5 373 574 Equity 3 000 015 2 778 682 Share capital 2 384 135 2 384 135 Capital funds 22515 -99 Funds created from profit 87 502 78 607 Net profit/loss of previous years 283 540 227 083 Net profit/loss for the accounting period 222 323 88 956 Liabilities 2 707 022 2 584 956 Provisions 103 644 90 131 Non-current liabilities 663 607 722 723 - bonds issued 581 940 617 415 Current liabilities 934 344 639 500 - trade liabilities 763 280 497 626 Bank loans and financial assistance 1 005 427 1 132 602 - long-term bank loans 384 911 582 601 - current bank loans 620 516 550 001 Accruals/deferrals 6 879 9 936