Annual Report 2005

Dear Shareholders, In the course of the year, the Supervisory Board supervised the scope of activities performed by the Board of Directors and business activities performed by the Company. Information on the most important plans of the Company’s business management for future periods, as well as the expected development of its assets, funds and revenues, were provided by the Board of Directors on a regular basis. Additionally, each month the Supervisory Board received from the Board of Directors a report on business activities and the balance of assets compared to expected development. The supervisory activity of the Supervisory Board was focused so as to gain a relevant picture whether the Company’s activities reflected the interest of all shareholders and that the Company’s progress was provided for. All business activities were carried out in compliance with the Company’s Articles of Association and applicable legislation. In this respect, the Supervisory Board did not discover any serious breach of obligations. After reviewing the individual and consolidated financial statements prepared as at 31 December 2005, the Supervisory Board concluded that the basis of accounting applied in the Company was in accordance with the existing legislation. The audit of the individual financial statements was performed by the auditors of BDR, spol. s r.o., and the audit of the consolidated financial statements by auditors of Deloitte Audit s.r.o., from the Deloitte Touche Tohmatsu. No significant matters that could prevent the annual financial statements from being approved are known. The Supervisory Board reviewed the proposal of the Board of Directors for profit distribution. The Supervisory Board recommended the General Meeting to approve the individual financial statements, the consolidated financial statements and the proposal of the Board of Directors for profit distribution. Members of the Supervisory Board, elected by employees, actively participated in the Supervisory Board’s work. The Supervisory Board evaluates 2005 as the best year in the Company’s history, taking into consideration both the achieved results of operations, and the fact that in the course of the year substantial measures were adopted which will provide for the growth of the Company’s prosperity in the future. In Podbrezová, 16 May 2006 Ing. Ján Banas Chairman of the Supervisory Board REPORT ON THE ACTIVITY OF THE SUPERVISORY BOARD Report on the activity of the Supervisory Board Annual Report 2005 Železiarne Podbrezová 41