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 16 REPORT BY THE BOARD OF DIRECTORS in 2004 were SKK 21.6 million. Precision welded tubes are a high demanded material for the production of components in the automotive industry, having currently a stable place in Central Europe. In 2004, we re-constructed a walking beam furnace in the seamless tubes mill worth of SKK 25.1 million. We expect this will lead to savings of 25% in energy consumption by using the most modern technology of gas combustion - recovery burner systems. We have changed the information network to Gigabyte Ethernet and we have installed the operating system, Linux, on our database server. We have continued with the project of uniting the information systems used by Železiarne Podbrezová and ŽĎAS. The total repair and maintenance costs of machines, equipment, buildings and constructions amounted to SKK 683 million (including secondary costs) representing almost the same amount compared to previous year. The major repairs were on the rotary hearth furnace in the seamless tubes mill (SKK 14.7 million) and on the splitting pad in the oxygen centre (SKK 5.2 million). The general repair of buildings construction was worth of SKK 25 million. ENVIRONMENTAL POLICY Certified System of Environmental management under the European standard ISO 14 001, applied in 2000, is one of the tools used in Železiarne Podbrezová for the protection of the environment and for the creation of a positive environmental profile. The functionality of the system has been confirmed by two audits in compliance with the standard ISO 14 001: 1996 performed in 2004. In order to comply with European Union legislation upon entrance of Slovakia to the European Union, we have implemented regulations governing the requirements and duties of individual areas of environmental activities. Such activities are directed towards improvements in quality of air, water and recycling management. They are also designed towards reducing the risk of ecological disasters. In 2004, we were primarily focused on meeting requirements of greenhouse gas CO2 producers for trading emission quotas and on the processing of applications for the issuance of integrated licenses in accordance with the Act on the integrated prevention and control of environment pollution. In order to fulfill the environmental tasks, in 2004 Železiarne Podbrezová modernized the phosphate management and the demulsification station. The Company also renewed the isolation areas in the warehouses for storing materials harmful to water. Research and development Activities in research and development in 2004 were focused on the research of new materials and on optimizing technological parameters of steel and tube production. Also issues relating to thermal tube processing and to preliminary stages of the environmental tasks were addressed. Actual costs on research and development amounted to SKK 3 million. In 2005 projects totalling SKK 5.9 million are planned.