Annual_report_2006

Ž E L E Z I A R N E P O D B R E Z O V Á 2 0 0 6 A N N U A L R E P O R T 31 REPORT BY THE BOARD OF DIRECTORS In the future, Tále, a.s., plans to further develop the third pillar of the ŽP Group busi- ness, i.e. tourism. By means of cooperation with ŽP-Invest, the reconstruction of the Krpáčovo Hotel has been underway. Simultaneously, a new golf course, Brezinky, is planned. During the previous year, the Company sold goods and provided services totalling SKK 138 million, which is an 8.3% increase com- pared to 2005. Accordingly, the Company managed to generate profit for the third con- secutive year. Tále, a.s., closed 2006 with profit after taxation of SKK 4 399 thousand. The Company’s registered capital amounted to SKK 340 million, with total assets of SKK 436 million and 16.7% leverage ratio. Last year, the Company had 116 employees on average, which meant a decrease of 3.3% compared to the previous year. ŽP EKO QELET a.s. In 2005, by means of the entry into joint- stock company ŽP EKO QELET, Železiarne Podbrezová a.s. managed to provide for high-quality deliveries of key input raw mate- rial – steel scrap. In 2006, ŽP EKO QELET a.s. strengthened its position on the market geo- graphically, particularly in Central and Western Slovakia. Simultaneously, the prepa- ration of a considerable investment of SKK 430 million was started, i.e. the construction of a new plant for processing of car wrecks and steel scrap treatment, with total annual production capacity of 92 thousand tons at the Hliník nad Hronom industrial park. The planned costs for the technological part of the plant will amount to SKK 140 million of total costs. The construction has already been in progress at the time of the prepara- tion of the Annual Report. In 2006, the Company’s revenues from sales of goods and own products and services totalled SKK 1 591 million. In the previous year, the Company delivered for Železiarne Podbrezová a.s. a total of 164 thousand tons of steel scrap, which represented 52.9% of the total purchase of this raw material. In 2006, in connection with the aforementioned investment, the registered capital further increased. Accordingly, the closing balance of the Company’s registered capital amount- ed to SKK 230 million, and profit after taxation of almost SKK 42 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 Železiarne Podbrezová a.s. In 2006, the Company produced and sold products and services totalling CZK 315.3 million (SKK 396 million). The Company’s registered capi- tal amounts to CZK 50 million (SKK 62.8 mil- lion) and the closing balance of profit after taxation amounted to CZK 14.1 million (SKK 17.7 million). In 2006, the Company employed 181 employees on average. ŽP PRAKO s.r.o. Železiarne Podbrezová a.s. entered into ŽP PRAKO in 2005. The Company manufac- tures precision forgings for the car industry, and flanges used mainly in the power industry. In 2006, when ŽĎAS a.s. became the supplier of new forging lines, a radical modernization process of technological equipment started. This step aimed at improving the capacity of forging production during the period of the rapid expansion of the car industry in Slovakia. A significant fact in 2006 was represented by the resolution of the Ministry of Economy of the SR on granting state aid in various forms, totalling SKK 115 million. State aid has been linked to the realization of the project “Expansion of the existing production of precision drop forgings for the car industry at the existing premises in Prakovce”, with capital expenditure totalling SKK 376.5 mil- lion. In 2006, the Company’s revenues from sales of goods and own products and services totalled almost SKK 187 million. The 2006 closing balance of the Company’s registered capital was SKK 63 million, and profit after taxation amounted to SKK 3 951 thousand. Last year’s kick-off of production on new forging lines was not in line with the projections of the majority owner. Therefore, a new revitalization program focusing on a complex corporate recovery was adopted in 2007.