Annual Report 2011

Ž E L E Z I A R N E P O D B R E Z O V Á A . S . 31 With regard to the sales in the amount of EUR 272.2 million, the Board of Directors of Železiarne Podbrezová a.s. set a goal for 2012 to generate a net profit after tax in the amount of EUR 8.8 million.This amount will also include revenues from financial investments.The dividends to be received from subsidiariesin2012areestimatedatEUR4.0million.Weplantogenerateaprofitinallsubsidiariesin2012. The second pillar of our business plan includes heavy-engineering and metallurgical products. ŽĎAS, a.s. in Žďár nad Sázavou and TS Plzeň a.s. have formed a duo that ranks among the top heavy-engineering andmetallurgical companies in the Czech Republic and have won worldwide recognition. This significant cooperation will allow the further use of the synergic effects resulting from the dominant position in the shaping machine supplies sector. Both companies have sufficient work contracts for 2012 to meet their business plans and to contribute to improving the consolidated results of ŽeleziarnePodbrezováa.s. Thebusinessactivitiesintourism,whichisthethirdpillarofourbusinessactivities,arenowfullyintegratedinthesubsidiary,Tálea.s.Weplantoinvest further in developing this segment. By enhancing the technical standards of the sports resort and its efficient operations, we aim to improve still further the services rendered and to strengthen our reputation among a wide range of customers. In 2012, we aim to prepare a development project relatedtotheconstructionofasmall9-holegolfcourse,creatingnewopportunitiesforyoutheducationaswellasforcommercialuse. The scope of Železiarne Podbrezová a.s.'s business activities is also supported by the activities of other subsidiaries and associated undertakings, which contribute to the consolidated economic results. Upon meeting the planned revenues from the sale of merchandise, products and services at the consolidated group level in the amount of EUR 14,408.9million, we expect to generate a consolidated profit attributable to Železiarne Podbrezová a.s. intheamountofEUR12.9million. TheBoardofDirectorsconsidersthereportedresultsfor2011tobeverypositive.Wehaveusedtheopportunitiesarisingfromtherevivalofthemarket. Theindicatorsofbusinessprofitabilityandlabourproductivityreachedagoodlevel,nearlymatchingthepre-crisisfigures.Greaterdemandenabledus to expand our workforce and to increase salaries. In 2011, the average salary of the company's employees was 13%higher compared to the 2008 pre- crisisyear.Theworkperformedbyseniormanagementandourworkforcewithmanyyearsofexperienceprovedtobecompetentandefficient. In 2011, the Company reported a profit of EUR 14,408,876. Earnings per share amounted to EUR 6.04. Although we have decided to invest in the modernisation of technological equipment in the coming years to increase the Company's competitiveness, we propose that the General Meeting distributeaportionofthereportedprofitforthepaymentofdividendstoshareholders. The subsidiaries and associated undertakings also actively contributed to Železiarne Podbrezová a.s.'s results. The consolidated group generated intercompany revenues of EUR 483,774 thousand. The profit of EUR 19,118 thousand was attributable to the Company as a consolidating reporting entity. Even though the Company's 2011 results have not reached pre-crisis levels yet, the Company is a guarantee for co-operating SMEs in the region. The market revival enabled us to increase employment and therefore also the income of people living in the region. Again, Železiarne Podbrezová a.s. strengthened its position as the most important employer and guarantor of social security in the district of Brezno and the entire Banská Bystrica region. With regard to the overall assessment of 2011, we can state today that the global economic and financial crisis of the preceding years did not considerably weaken the Company, but rather strengthened it.We can learn a lesson from such experience.The approved cost-cutting measures will continuetobeareconomicbenefits. Thankstoitsgreatflexibility,ŽeleziarnePodbrezováa.s.isconstantlypreparedtoreactdynamicallytonewbusinessopportunities. The Board of Directors of Železiarne Podbrezová a.s. wishes to express its gratitude and appreciation to all colleagues, as without their contribution these results could not have been achieved. Additionally, we would like to extend our thanks to our suppliers, customers, banks and financial institutions,andtoallourbusinesspartnersfortheircooperation.Wewishtocontinueinpromotingourgoodbusinessrelationsinfuture. We would like to express our special thanks to everyone who, to any extent, helped to eliminate the aftermath of the fire in the rolling mill producing seamlesstubesandthushelpedtominimisethedamageandproductionoutageinMarchandApril2011. Weappreciateyourconfidence. ApprovedbytheBoardofDirectors'decisionon4May2012 CONCLUSION REPORT BY THE BOARD OF DIRECTORS ON THE BUSINESS ACTIVITIES, ASSETS, AND FINANCIAL PERFORMANCE IN 2011 AND INFORMATION ON THE BUSINESS PLAN