Annual Report 2010

2010 ANNUAL REPORT REPORT BY THE BOARD OF DIRECTORS Despite the continuing crisis, FY 2010 in TS Plzeň was very successful. The company did not have to reduce production or the number of employees. The company successfully implemented a series of challenging projects and won new considerable references with customers. In the long term,the business policy is focused on three core production segments: hydraulic presses, vulcanisation presses, and rolling mills, which in 2010 were supplemented by cooperation contracts to utilise idle production capacities. In 201 O, !he company's total sales were EUR 21 ,402 thousand (CZK 536.4 million). The proportion of exports in total sales was 19%. In 201 O, the company reported aprofit in the amountof EUR 900 thousand (CZK22.5 million). The company has signed a sufficient number of contracts far 2011 to enable ii to meet the goals defined in !he business pian. The most significant long-term contract is !he supply of 17 vulcanisation presses far Mitas Tyres Co. , which is constructing a new factory in the USA. The supply of21VL100 vulcanisation presses forthe largest European tyre producer- OAO Belšina in Belarus– is also significant. VL 100 vulcanisation presses are some of the largest presses in the tyre production process. They enable vulcanising tyres with the diameter of 2.4 mused mainly far large construction machines. The technology base modernisation from previous years provides abasis to realistically expect positive results in camparison to their competition. Considering !he shortage of contracts on the market,the competition is escalating,which results in apartial decrease in contract profitability. Tále, a.s. Tále, a.s. is an integral part of the business of Železiarne Podbrezová a.s. in terms of tourism. lt operates a sports resort, which comprises a ski centre and the Gray Bear 18-hole championship golf course. The resort includes two hotels, which, apart from standard services, also provide congress tourism and golf vacation packages.The economic crisis severely affected the occupancy of hotel facilities throughout Slovakia,including in the Nízke Tatry region.The interes! in corporate golftournaments atthe Gray Bear golf course decreased and in terms of sales the 2009/201 O ski season was the weakest in the pas! few years. Even though the company increased its total sales by 23%to EUR 4,295 thousand,!he company reported a loss in !he amount of EUR 32 thousand. As al 31 December 201 O, the company'stotal assets amounted to EUR 15,932 thousand,with external debl accounting far 10.4% only.The company undertook additional measures in orderto guarantee profit in the future . ŽP EKO QELET a.s. The company's main activity comprises purchasing and selling scrap metal and processing metal waste. The company has a dominant position on the scrap steel market in !he west and central Slovakia region. lt is a leader in processing metal waste in Slovakia.The company is the main supplier of scrap steel far Železiarne Podbrezová a.s. The company is continuously strengthening its position by establishing new ecological operation and collection sites.The sites are established in compliance with legislation governing environmental protection. An example of increasing economic production while minimising the negatíve impacts and influences on the environment is the construction of an ecological facility far recycling old vehicles, wrecked vehicles and metal waste in the industria! zone in Hliník nad Hronom. The ecological facility is equipped with state-of-the-art European technology, which contributes to the most effective means of processing and upgrading metal waste in Slovakia. The company is one of the major collectors and processors of old and wrecked vehicles in Slovakia,which is reflected in the number of old vehicles collected and processed using the SEDA and SHREDER technologies, which currently represent the most ecological and efficient form of processing old and wrecked vehicles. The ecological facility and the whole company also contribute by creating new jobs and increasing employment in !he given reg ion. The company faces risks and uncertainties in the form of fluctuations in the scrap steel prices, which occur on regional as well as global markets.Same risk comprises !he economic development and stability of strategic customers far scrap steel. In 201 O, the company reported revenues from the sales of merchandise, own products and services in the amount of EUR 49,496 thousand,which in comparison to 2009 represents an increase of 53%and is positively reflected in !he economic results. In 201 O, the company reported profit in the amount of EUR 3,092 thousand, which stabilised the company's financial operations. The company continued to oplimise the operations of!he ecological facility far processing metal waste and old vehicles in Hlíník nad Hronom, which in 2010 processed and ecologically disposed of 6 700 wrecked vehicles. The company supplied Železiarne Podbrezová a.s.,with 169.8 thousand tonnes of scrap steel, which represents 64.7%of scrap purchased by Železiarne Podbrezová a.s. Since Apríl 2010, ŽP EKO QELET a.s.'s management structure has been completely reorganised . This change and a quality technology base provide optimistic outlooks regarding future operations. 1