Annual Report 2010

2010 ANNUAL REPORT r REPORT BY THE BOARD OF DIRECTORS KBZs.r.o. The company is the second largest supplier of scrap steel to Železiarne Podbrezová a.s. In 201 O, ii reported revenues from the sales of merchandise and own products in the total amount of EUR 22,978 thousand,which is a79% increase compared to the prior year. In 201 O, KBZ s.r.o. supplied the parent companywith atotal of 79.3 thousand tonnes of scrap steel,which is 30.2% of the total amount of scrap steel purchased by Železiarne Podbrezová a.s. for producing steel. In 201 O, the revival in the metallurgical production and consumption of input raw materials resulted in reporting profit in the amount of EUR 691 thousand,which balanced the loss reported in the prior year. ŽIAROMAT a.s. ŽIAROMATa.s. is atraditional producerofheat-resistant materials. lts core production range includes fire-clay materials, refractory castables, and other heat resistant materials. In 201 O, the fire-clay building material and refractory castables represented 41.2% and 49.2% of total sales for 201 O, respectively. In comparison with 2009,total revenues from sales increased by 34% and reached the amountof EUR 8,269 thousand, ofwhich 53.6% represented exports.The company has registered capital in the amount of EUR 4,813 thousand and reported profit in the amount of EUR 253.9 thousand. In the future, the company will broaden its production range mainly in the area of magnesite building materials. ŽPTažírnytrub Svinov, spol. sr.o. ,in liquidation The company's production was focused on precision drawn steel tubes and its product range supplemented Železiarne Podbrezová a.s.'s production programme. Owing to the sales crisis, in 01 2009 the company discontinued its production and entered into liquidation in 2010. II was decided that the company's real estate as awhole would be sold for the most favourable price. Movable assets were sold individually and were first offered to companies within the Železiarne Podbrezová a.s.'s group. Unusable technological equipment was scrapped.The company estimated that the liquidation will end by May 2011 and ii expects that the salvage value will exceed the carrying amount of Železiarne Podbrezová a.s.'s contribution into ŽP Tažírny trub Svinov, spol. sr.o. by 30%. PIPEX (lnternational)AG In 201 O, PIPEX lnternational AG was the second major trading and distribution channel in terms of sales amounts. The company's share in the total sales of Železiarne Podbrezová a.s.'s products represented 17.2%. In the prior year, the company reported revenues from the sales of Železiarne Podbrezová a.s.'s products in the total amount of EUR 46 063 thousand (CHF 57,597 thousand). The company has registered capital in the amount of EUR 800 thousand (CHF 1,000 thousand) and as al the year-end it reported profit in the amountof EUR 122.6 thousand (CHF 153 thousand). PIPEX ITALIAS.p.A. and TS STEEL PIPE & FITTINGS S.r.I. In 201 O, PIPEX ITALIA S.p.A. was the third major trading and distribution channel for the products of Železiarne Podbrezová a.s„ with a 15.4% share in total sales. In 2010,the company reported sales in the amount of EUR 46, 137 thousand. The company has registered capital in the amount of EUR 258 thousand and as al the year-end ii reported profit in the amount of EUR 304 thousand. SLOVRUR Sp. zo.o. In 2010, SLOVRUR Sp. z o. o. was the fourth major distribution channel. The company provided for the sales of products of Železiarne Podbrezová a.s. on the Polish market with a share of 11.2% of total sales of Železiarne Podbrezová a.s.'s products. In 201 O, the Company reported revenues from sales in the total amount of EUR 27,130 thousand (PLN 107.8 million). The company has registered capital in the amount of EUR 25 thousand (PLN 100 thousand) and as al the year-end it reported profit after taxation in the amountof EUR 1,054 thousand (PLN 4,192 thousand). 1