Annual report 2012

ŽELEZIARNE PODBREZOVÁ A.S. 22 FinancialManagement Since 2005, Železiarne Podbrezová a.s. has made efficient use of the “club financing” provided by four banking institutions (Citibank Europe plc, a branch of a foreign bank; Credit Agricole CIB S.A., a branch of a foreign bank; HSBC Bank plc, a branch of a foreign bank; and Tatra banka a.s.) to finance the development of its business activities. Club financing has helped to maintain financial stability, unify terms for the provision thereof, and streamline loan management. Under the integrated documentation, the Company has the ability to drawvariable amounts fromthe financial funds provided in the formof long-term loans, fixed tranches, or operative financing through overdraft facilities. Given the complicated situation in the banking sector, after the termination of the business activities of two branches of foreign banks in Slovakia, two creditors were changed during 2012 and replaced by new club members after collective negotiations: Slovenská sporiteľňa a.s. andKomerční banka a.s., a branchof a foreignbank. The Company's club financing is payable in July 2013; however, the Board of Directors of ŽP a.s. communicated actively during 2012 with potential creditors suitable for its refinancing. In 2012, the portfolio of financing banks was expanded to six financing banks. Thanks to advantageous terms, we expanded credit relationships with Eximbanka SR to fund the Company's investment development with a total credit line of EUR 13.7 million, whichwill bedrawngradually until 2014. The average drawing of credit facilities during 2012 amounted to EUR 44.5 million. The weighted average interest rate on loans amounted to 2.32% p. a., which corresponds with the absolute amount of paid interest of EUR1.033million. The credit facilities are secured by a pledge over tangible, intangible and financial assets of the Company. The value of the assets pledged in favour of a bank is proportionally equal to theCompany's credit exposurewith saidbank In order to ensure financial stability, the Company received a borrowing from its major shareholder, CPA, s.r.o., amounting to EUR 10.5 million in October 2012, with a fixed interest rate andmaturity in2015 andwith a possibleextension. The adoption of the euro in Slovakia in 2009 largely contributed to the elimination of the Company's FX rate exposure. The surplus balance of foreign currencies has only been identified in relation to sales channels in the Czech Republic and Poland. Through a gradual increase in billing in euros to these territories, the need to use currency derivative instruments to hedge sales has been reduced. In 2012, the Company didnot conclude any currency financial derivatives. ASSETS NON-CURRENT ASSETS Property, plant and equipment Intangible assets Investments in subsidiaries, joint-ventures and associates Available-for-sale investments Other assets Total non-current assets 92 889 244 95 184 122 1 456 189 896 31 Dec 2012 31 Dec 2011 92 039 95 95 008 125 1 683 188 950 DATA FROM SEPARATE IFRS STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2012 (EUR '000) ANNUAL REPORT 2 012 REPORT BY THE BOARD OF DIRECTORS ON THE BUSINESS ACTIVITIES, ASSETS, AND FINANCIAL PERFORMANCE IN 2012 AND INFORMATION ON THE BUSINESS PLAN