Annual Report 2005

In this connection, it is important to once again stress the correctness of the strategic decision of Tále management to build a professional golf course, which now attracts solvent clientele to our region. This fact already became evident in the structure of the company’s sales, as during summer months there is a noticeable increase in sales attributable to the golf course. During 2005, the company sold goods and provided services totalling SKK 128 million, which is a 2.5% increase compared to 2004. The increase enabled the company to generate profit for the second time and their 2005 profit after taxation amounted to SKK 632 thousand. In 2005, the closing balance of the company’s registered capital amounted to SKK 340 million, with assets totalling SKK 452 million and 20.6 % leverage ratio. In 2005, the company had 120 employees on average, which meant a level of employment the same as the previous year. ŽP EKO QELET a.s. During 2005, based on their prior strategic decision, Železiarne Podbrezová a.s. acquired an ownership interest in EKO QELET a.s. (“EKO QELET”). The company underwent gradual changes in both their ownership interests and trade name. EKO QELET operates on the steel scrap market; they trade in steel scrap and processing. Through this transaction we aimed to gain better control over the steel scrap market, which is the key raw material for Železiarne Podbrezová a.s. The correctness of this step was confirmed by stabilised deliveries of metal scrap with regards to physical quantities, quality and, of course, price. In 2005 the company’s sales from sold goods and own products and services totalled SKK 861 million After the above mentioned changes, closing balance of EKO QELET’s registered capital amounted to SKK 156 million, and profit after taxation was SKK 20 million. ŽP Tažírny trub Svinov, spol. s r.o. The company produces steel precision cold drawn tubes and tube elbows. Their product range is complementary to the production plan of the parent. During 2005, the company produced and sold products and services totalling CZK 246 million (SKK 322 million). The company’s registered capital amounts to CZK 50 million (SKK 65 million) and their 2005 profit after taxation amounted to CZK 8 million (SKK 10 million). In 2005, the company employed on average 180 people. PIPEX International AG In 2005, similar to previous years, PIPEX International AG was the most important sales and distribution channel through which Železiarne Podbrezová a.s. sold their products on European and global markets. Their share in total sales was 21.2%. During 2005, the company generated total sales of CHF 75 million (SKK 1 819 million) by selling products made by Železiarne Podbrezová a.s. Their registered capital is CHF 1 million (SKK 24 million), and their 2005 profit after taxation amounted to CHF 1.3 million (SKK 31 million). REPORT BY THE BOARD OF DIRECTORS Report by the Board of Directors Annual Report 2005 Železiarne Podbrezová 29