Annual Report 2008

REPORT BY THE BOARD OF DIRECTORS ŽELEZIARNE PODBREZOVÁ SIGNIFICANT EVENTS THAT OCCURRED AFTER THE END OF THE REPORTING PERIOD In line with Act of the National Council of the Slovak Republic no. 659/2007 Coli. on the lntroduction of the Euro Currency in the Slovak Republic, the Company's Board of Directors decided to convert the nominal value of the Company's shares and registered capital !rom Slovak crowns to euros using the method of rounding up the nominal value per share to the nearest euro at the conversion exchange rate of SKK/EUR 30.1260 as follows - The nominal value per share in the amount of SKK 1 OOO after conversion amounts to EUR 34. - The Company's registered capital in the amount of SKK 2 384 135 OOO after the conversion of its nominal value amounts to EUR 81 060 590. In connection with this change in the nominal value of the shares and registered capital !rom Slovak crowns to euros, the Company's Board of Directors also decided to amend the Company's Articles of Association. All the shareholders were notified of this change by a written notice. In February 2009, the Company's Board of Directors decided to discontinue the production of precision tubes and tube elbows in ŽP Tažírny trub Svinov, spol. s r.o. (with effect !rom 1 May 2009) due to insufficient customer contracts. Technological equipment was conserved, with a possibility to resume the production when the market recovers. A metallurgical material warehouse for retail and regular customers !rom Moravia and Poland will be established at the Company's premises. All customer demands for precision tubes manufactured by ŽP Tažírny trub Svinov, spol. s r. will be fulfilled by Železiarne Podbrezová products. In Apríl 2009, the Company's Board of Directors decided to discontinue the production in ŽP PRAKO s.r.o. with effect !rom 1June 2009. The entity reported high losses in the past two years. Despite ŽP PRAKO s.r.o.'s turnover and the adopted efficiency and technological measures aimed to increase production quality and process management, more customers were lost during the economic crisis. The decision to discontinue production in ŽP PRAKO s.r.o. is final and the pian! site, including the technological equipment, was offered for sale. In March 2009, the legal form of ŽP-lnvest s.r.o. changed !rom a limited liability company to a joint stock company. In the past two years, ŽP-lnvest s.r.o. practically performed no activities. All ŽP-lnvest s.r.o.'s were offered for sale.