Annual Report 2005

ASSETS AND FINANCIAL MANAGEMENT Assets and Funds As of 31 December 2005, total assets of the Company amounted to SKK 6 711.0 million. The Company’s assets increased by SKK 997.1 million, a rise of 17.5% compared to the prior year. Non-current assets increased by SKK 425.5 million, while the change in the amount of tangible and intangible assets is immaterial. Such increase resulted from the movement in long-term financial assets by SKK 430.7 million, in particular: ° Purchase of shares of ŽÏAS, a.s., with the aim to exceed a 90% ownership interest of the registered capital as a prerequisite for a pre-emption right for 100% of shares of this company; ° Purchase of shares of Tále, a.s., from foreign investor; ° Purchase of ownership interest in ŽP PRAKO, s.r.o., and shares of ŽP EKO QELET, a.s.; ° Sale of 19% of shares of SLAVIA CAPITAL Group, a.s. Current assets increased by SKK 635.8 million, i.e., by 27.1%, in receivables, inventory, and in bank accounts, as a result of the increased need for working capital due to the annual 23.5% growth of turnover. Prepaid expenses dropped significantly by SKK 64.2 million as a result of reduced leasing liabilities. Within equity and liabilities, in 2005 own financing increased by SKK 770.9 million and their share increased from 52.5% to 56.2% as a result of profit generation. Liabilities also increased by SKK 198.9 million due to the Company’s current financing needs incurred upon the completion of another financial restructuring phase when, at the end of 2005, the Company together with a bank syndicate realized a premature repayment of bonds issued in 2002. Movements in liabilities over the two-year period: 54% Non-current assets 44% Current assets 2% Accruals/deferrals 1% 56% 43% 56% Equity 43% Liabilities 1% Accruals/deferrals 2% 54% 44% Provisions Non-current liabilities Current liabilities thereof: trade liabilities Bank loans and financial assistance + SKK 65 293 thousand - SKK 584 646 thousand - SKK 48 122 thousand - SKK 183 969 thousand + SKK 766 406 thousand + 63% - 88% - 5% - 24% + 76% Asset structure as at 31.12.2005 Equity and liabilities as at 31.12.2005 REPORT BY THE BOARD OF DIRECTORS Report by the Board of Directors Annual Report 2005 Železiarne Podbrezová 21