Annual_report_2006

REPORT BY THE BOARD OF DIRECTORS 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 23 As of 31 December 2006, total assets of the Company amounted to SKK 7 364.6 million, which represents a rise of 9.1% compared to the prior year. Non-current assets increased by SKK 417.0 million, while non-current tangi- ble and intangible assets rose by only SKK 35.2 million. As of 31 December 2006, cost of non-current tangible assets represented a total of SKK 7 855.3 million, thereof build- ings and structures represented SKK 2 979.0 million, machines and equipment SKK 4 867.7 million, and assets under construction SKK 8.6 million. As of 31 December 2006, the Company recorded no assets under lien to cover bank loans. Entire assets were insured against all risks with Allianz – Slovenská poisťovňa a.s.Additions to non-current finan- cial assets worth SKK 168.1 million represent- ed changes in investments in subsidiary and associate undertakings and joint ventures –the most significant referring to the pur- chase of a 9.9% ownership interest in ŽĎAS, a.s., for SKK 105.7 million fromminority share- holders (the so-called squeeze out), whereby Železiarne Podbrezová a.s. became a 100% shareholder. Further investments included the acquisition of a 51% ownership interest in GAMO, a.s., for SKK 13.1 million, and an increase in the registered capital of ŽP EKO QELET a.s. by SKK 24 million.Additions to other financial assets by SKK 210.9 million represented financial derivative instruments acquired by the Company based on con- tracts with banking institutions in order to cover the risk of foreign exchange rate fluctu- ation, as well as specific transactions. Železiarne Podbrezová a.s. concluded these contracts in the previous year mainly for the purposes of managing risk resulting from the ordinary course of business and loans received in foreign currency.An increase in the balance of current assets by SKK 199.4 million in total mainly resulted from the increased balance of receivables at the end of 2006 by SKK 408.2 million, where there was a decrease in the balance of cash by SKK 181.5 million. The increased balance of receivables resulted from the higher realisa- tion of products in December 2006, which mainly resulted from the Company’s favourable sales situation. The balance of inventory remained unchanged compared to the prior year. In 2006, the liabilities structure showed an increase in own capital by SKK 785.7 million, whereby the share increased from 57.1% to 63.0%. This mainly resulted from profits generated in 2006. However, total liabilities decreased by SKK 169.3 mil- lion, whilst the most significant change referred to the decrease in the balance of bank loans by SKK 303.5 million with a moderate increase in trade liabilities. REPORT BY THE BOARD OF DIRECTORS ON ASSETS AND FUNDS AND FINANCIAL MANAGEMENT Interest-bearing loans and borrowings Other non-current liabilities Other current liabilities Equity 63% 21% 4% 12% Financial assets Receivables Inventories Other assets Property, plant and equipment 35% 23% 23% 18% 1% 100 % 100 % Structure of assets as at 31 December 2006 Structure of liabilities as at 31 December 2006 Assets and Funds