Annual Report 2004

Ž E L E Z I A R N E P O D B R E Z O V Á ANNUAL REPORT 2004 24 REPORT BY THE BOARD OF DIRECTORS Net profit for 2004 of SKK 222,323 thousand represents the difference between total income of SKK 7,889,393 thousand and total expenses of SKK 7,667,070 thousand. The structure of income has not substantially changed since 2003. Income from operations represented 96.6% of the total, and is derived mostly from revenue from the sale of own products and services and from own work capitalized. Income from financial activities represented 3.4%. The structure of expenses has changed significantly mainly due to consumption of materials. In 2003 the prices of electricity and gas increased significantly and in 2004, the increase of expenses was caused by increased prices of consumed steel iron, ferro-alloys and raw iron. Consumed raw materials increased its share of total expenses from 51.8% in 2003 to the current 59.7%. Expenses for services represented 6.3%, personnel expenses 18.0%, depreciation 3.4% and other operating expenses 9.8%. The portion of financial expenses on total expenses was 6.3% in 2003, but decreased to 2% in 2004, which had a positive impact on the result from financial activities. Profit after tax of SKK 222,323 thousand, significantly exceeded the objective set in the business plan. In the annual report presented, financial data corresponds with data from individual financial statements of Železiarne Podbrezová a.s., which have been prepared as ordinary financial statements in accordance with Article 17 (6) and audited by an auditor in accordance with Article 19 (1) of Slovak Act No. 431/2002 Coll. on Accounting for the accounting period from 1 January 2004 to 31 December 2004. Expenses, income and profit of 2004