Annual Report 2009

Ž E L E Z I A R N E P O D B R E Z O V Á REPORT BY THE BOARD OF DIRECTORS CONCLUSION Although the Company generated a loss and failed to meet the objectives of its business plan in 2009, the Board of Directors considers the results to be positive. The global economic crisis affected our customers from all production sectors and in all sales territories and the sale of our products dropped year-on-year by 55%. We had to make considerable headcount reduction and cut the costs of all types. We implemented cost-cutting measures by order throughout Železiarne Podbrezová Group. Neither extensive experience of the personnel nor efficient and advanced crisis management could prevent the reported accounting losses. The operating results for 2009 was a loss of EUR 6 313 648 reported in the individual financial statements. The loss per share represented EUR 2.65. The subsidiaries and associated undertakings also actively contributed to the results for Železiarne Podbrezová a.s. The consolidated group generated intercompany revenues of EUR 329 594 394. The loss of EUR 10 442 415 was assigned to the Company as a consolidating reporting enterprise. Although the Company’s business was considerably reduced in 2009, it still guaranteed the survival of SMEs from the region that continued cooperating with the Company. The headcount reduction by almost 23% that took place between October 2008 and May 2009 significantly reduced the income of people living in the region. Nevertheless, Železiarne Podbrezová a.s. remains the most important employer and guarantor of social security in the district of Brezno. With regard to the overall assessment of last year we can state today that the global crisis and subsequently reported losses did not considerably weaken the Company. Only a slight drop was recorded in Železiarne Podbrezová a.s.’s and the entire group’s own funds and the Company’s financial stability was not substantially undermined. We can learn a lesson from such experience. Thanks to great flexibility, Železiarne Podbrezová a.s. is prepared to react dynamically to new business opportunities. The Board of Directors of Železiarne Podbrezová a.s. wishes to express their gratitude and appreciation to all colleagues, as without their contribution the results could not have been achieved. Additionally, we would like to extend our thanks to our suppliers, customers, banks and financial institutions, and to all our business partners for their cooperation. We wish to further promote our good trade relations in future periods. Thank you for your confidence. Approved by the decision of the Board of Directors on 11 May 2010 37