Annual report 2012

ŽELEZIARNE PODBREZOVÁ A.S. 20 Care for a safe working environment, appropriate protective equipment in line with the approved regulations and constant communicationwith employee representatives and employees is necessary for maintaining and improving the working environment. Continuous promotion of occupational health and safety, cooperation and regular communication with the employee representatives responsible for the work safety monitoring focused mainly on injury prevention and avoidance are a natural part of our HR management policy. A total of 80 employee representatives from different units monitor the situation continuously and sendmonthly reports –– a total of 611 were received in 2012, of which 566 included inspiring suggestions and requests. In 2012, we recorded 48 registered occupational injuries, which is a decrease by two cases compared to the previous year; however, the number of non-worked calendar days increased, and the average treatment time grew from52 to66 calendar days compared to2011. Železiarne Podbrezová's Private Secondary Apprentice School of Metallurgy is a source of a qualifiedworkforce thanks to the high- quality general and specialist education of its students – future employees: metallurgists, electricians andmechanics who gained work habits required to commence employment seamlessly. In 2012, 51 graduates commenced their employment in the Company after the completionof their studies. We have had long-term cooperation with universities - mainly with the Faculty of Metallurgy of the Technical University in Košice, with which we organise open-doors days at our school and directly at the Faculty, where we present the possibilities for study and future employment of graduates with us. Our Company offers university scholarships to selected talented secondary school students of our private schools. We cooperate with Matej Bel University, especially with the IT Department, in connection with grammar school IT classes and our subsidiary, ŽP Informatika, s.r.o., but also with other departments as practically necessary. The cooperation with universities is targeted, with an offer of possible scholarships, professional internships, and graduation theses focused to attract qualified futureemployees prepared forwork in theCompany. In 2012, the number of employees was gradually adjusted in direct connection with the number of contracts and the full-time equivalent as at the end of the year amounted to 3 342 employees, which is a decreaseof 75 employees compared to the previous year. However, this situation was affected significantly by the departure of 94 security service employees to the new company ŽPBezpečnostné služby, s.r.o. inOctober 2011. In 2012, we implemented a new classification of jobs according to the new statistical job classification SK ISCO 08. Last year, we again streamlined thewholemanagement structure and all systemised work positions in theCompany, separately for eachunit. The average monthly income in 2012 amounted to EUR 948.48 per employee, which is an increase by 2.5% compared to the previous year. The added value work productivity amounted to EUR 19 772 per employee compared to EUR 20 788 per employee in 2011. We achieve an income level more than 10% higher than the average income for employees in Slovak industry. It is important to point out for Železiarne Podbrezová a.s. that, as amajor employer, its subsidiaries and affiliates employed another 3 935 employees in 2012 (in addition to ŽP a.s.), of which 894 employees in Slovakia in production and services, and 67 employees in private schools of ŽP. Subsidiaries in the Czech Republic employed 2 780 employees in 2012 and other companies abroad employed 194 employees. In total, the ŽPGROUPemployed7277employees in2012. Our newspaper, Podbrezovan, is the oldest company newspaper in Slovakia and has been published for 69 years. It is distributed to both present and former, retired employees, who receive information about life in the Company on a continuous basis. The newspaper is an irreplaceable medium for informing company employees and the general public in the region about theoperations in theparent company and its subsidiaries. REPORT ON ASSETS AND FINANCIAL MANAGEMENT Assets andFunds The Company's total assets recognised as at 31 December 2012 in accordance with International Financial Reporting Standards (IFRS) amounted to EUR 277 443 thousand, a year-on-year increase of EUR 4 173 thousand, i.e. 1.53%. The increase resulted from an increase in current assets by EUR 3 227 thousand, especially an increase in inventories by EUR 6 924 thousand with a decrease in receivables by EUR 4 659 thousand. The higher balance of inventories results from gradual increases in inventories of blocks due to the prepared downtime of the steel mill in September 2013 during the reconstruction of continuous casting facility and exhausting of the electric arc furnace. Thanks to conservative investment policy, non-current assets grew by only EUR946 thousand. On the liabilities side, the asset coverage funding adequately increased, with liabilities increasing by EUR 6 691 thousand, of which current liabilities increased by 22 551 thousand and non- current liabilities decreased by EUR 15 861 thousand. As at 31 December 2012 equity decreased by EUR 2 518 thousand because the dividends paid to shareholders in 2012 exceeded the net profit. The equity-to-total assets ratio amounted to 67.5%. The Company's gearing amounted to 19.2% as at the end of 2012. ANNUAL REPORT 2 012 REPORT BY THE BOARD OF DIRECTORS ON THE BUSINESS ACTIVITIES, ASSETS, AND FINANCIAL PERFORMANCE IN 2012 AND INFORMATION ON THE BUSINESS PLAN