Annual Report 2011

ŽIAROMAT a.s. Pipex (International) AG PIPEX ITALIA S.p.A. a TS STEEL PIPE&FITTINGS S.r.l SLOVRUR Sp. z o.o. ZANINONI SLOVAKIA, s.r.o. nd . Žiaromat a.s. is a traditional producer of heat-resistant materials. Its core production range includes fire-clay materials, refractory castables, and other heat-resistant materials. After successful tests of magnesia-carbonaceous building materials, production and regular supplies of these materials to PodbrezováandŽďárnadSázavouwerelaunchedin2011.Despiteagradualdeclineintheconsumptionofheat-resistantmaterialsintheproductionof steel and non-ferrous metals, the company gained a permanent place in the market. The fire-clay building materials and refractory castables represented 46.3% and 40.6%of the total 2011 revenues, respectively. Last year, the company's revenues from the sale of merchandise, own products and services totalled EUR 9,566 thousand, of which as much as 53.1% was represented by export. In 2011, the company reported a profit of EUR 278 thousand. In2011,Pipex(International)AGwasthefourthmajortradinganddistributionchannelintermsofthevolumeofsales.Thecompany'sshareinthetotal sales of Železiarne Podbrezová a.s.'s products represented 13.4%, down 3.8 percentage points on 2010. Last year, the company's revenues totalled EUR 41,958 thousand (CHF 51,004 thousand).The company has registered capital in the amount of EUR 823 thousand (CHF 1,000 thousand) and, as at the year-end,reportedaprofitaftertaxintheamountofEUR206thousand(CHF250thousand). In 2011, PIPEX ITALIA S.p.A. was themajor trading and distribution channel for the products of Železiarne Podbrezová a.s., with an 18.6% share in total sales, which was an increase of 3.2 percentage points compared to the preceding year. In 2011, the company reported revenues from sales in the amount of EUR 67,416 thousand, up 46% on 2010. The company has registered capital in the amount of EUR 258 thousand and, as at the year-end, reportedaprofitaftertaxintheamountofEUR546thousand. The company's subsidiary, TS STEEL PIPE & FITTINGS S.r.l., sold merchandise from its warehouse in the Bergamo industrial area in the amount of EUR 8,954thousand(a35.3%increasecomparedto2010)andreportedaprofitintheamountofEUR84thousand. In 2011, this company was the third major distribution channel. The company provided for the sales of products of Železiarne Podbrezová a.s. on the Polishmarket. Its share in the total sales of its parent company's products amounted to 13.5%, which is an increase by 2.3 percentage points compared to the preceding period. In 2011, the company reported revenues in the total amount of EUR 38,636 thousand (PLN 172.2 million). Compared to the previous year, sales rose by 59.7%.The company has registered capital in the amount of EUR 22 thousand (PLN 100 thousand) and, as at the year-end, reportedaprofitaftertaxintheamountofEUR1,141thousand(PLN5,087thousand). The company's core business is the provision of forwarding services for the transportation of Železiarne Podbrezová a.s.'s products to all markets. In 2011, the company carried out 7,273 transports, which, compared to 2010, represents an increase of 4.0%. Last year, the company provided its services in the total amount of EUR 12,466 thousand.The company has registered capital in the amount of EUR 33 thousand and, as at the year-end, reported a profitaftertaxintheamountofEUR682thousand. Ž E L E Z I A R N E P O D B R E Z O V Á A . S . 28 REPORT BY THE BOARD OF DIRECTORS ON THE BUSINESS ACTIVITIES, ASSETS, AND FINANCIAL PERFORMANCE IN 2011 AND INFORMATION ON THE BUSINESS PLAN