The content of the Annual Report for 2010

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The content of the Annual Report for 2010

1

INTRODUCTION................................................................................................................................3 1.1 1.2 1.3 1.4

2

PRODUCTION – BASIC FACTS.......................................................................................................8 2.1 2.2 2.3 2.4

3

Introductory Word by the Company´s Managing Director..................................................... 3 Identification – Basic Facts of VÍTKOVICE CYLINDERS a.s. .............................................. 4 Position in the Group............................................................................................................. 5 Management of VÍTKOVICE CYLINDERS a.s ..................................................................... 7

Investments and Modernisation ............................................................................................ 8 Technology and Reasearch .................................................................................................. 8 Environment .......................................................................................................................... 9 Employees ............................................................................................................................ 9

SALES - BASIC FACTS ..................................................................................................................10 3.1 3.2 3.3

Steel Cylinders .................................................................................................................... 10 Grinding Balls and Bars ...................................................................................................... 10 Engineering ......................................................................................................................... 11

4

FINANCIAL STATEMENTS of the Company as of 31.12.2010 ...................................................12

5

AUDITOR’S REPORT as of 31.12.2010 on the Audit of the Financial Statements, Related Parties Report and the Annual Report for 2010 ..........................................................................19

6

RELATED PARTIES REPORT for 2010 ........................................................................................22

7

REPORT OF THE BOARD OF DIRECTORS on the Entrepreneurial Activities of VÍTKOVICE CYLINDERS a.s. and on Its Assets in 2010 .................................................................................31

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1 Introduction

1 INTRODUCTION 1.1 Introductory Word by the Company´s Managing Director Dear shareholders, ladies and gentlemen, If I was to describe the year of 2010 and its impact on our Company VÍTKOVICE CYLINDERS a.s., I would have to conclude that, this year once again, we were not spared the consequences of the negative economic developments in the world markets. It was not until the second half of 2010 that we experienced a stronger recovery of demand for steel cylinders. On the other hand, however, we had to face a difficult situation caused by a major increase in the prices for input raw materials, for extruded cylinders. 2010 was marked by our continued efforts to maintain the trend of optimizing our production and our product prices in order to maximize the Company’s financial performance. We worked very intensively to ensure a continuous increase in the capacities of the existing production aggregates and lines; we enhanced our production technology with innovations and continued in permanent improvement. In the new steel cylinder plant, we were able to achieve the so-far maximum production volume since the very start of the line, with an increase in the sold quantity of steel cylinders of as much as 84% over 2009. We achieved very positive results in the sale of grinding balls where our sales revenue jumped up by 11% compared to 2009, amounting to nearly CZK 416 million and in the sale of highpressure accumulators where we sold 41% more than in 2009. The total sale volume of steel cylinders at the level of 425,722 pieces represented a 23% increase over 2009. We successfully obtained an ISO/TS 16 949 certificate, which we consider a very significant step forward; this is also related to the launch of our cooperation with a German car manufacturer where we became a supplier of CNG-1 high-pressure steel cylinders designed for the automotive industry. In our opinion, CNG-1 car cylinders constitute a very important market segment; the increase of supplies recorded in this industry in 2010 is a major success for our Company, whether it involves cylinders intended for OEM customers (Original Equipment Manufacturer – car maker) or for car conversions. The fact that our cylinders have built up a leading position both in the Czech and the world markets is not only pleasing but, at the same time, also binding. We cooperate and communicate with other modern steel works and metallurgical plants to secure further development of our Company as well as of the entire industry. We rely on the skills of our employees, on our organization and the technical facilities, as well as on the important support from VÍTKOVICE MACHINERY GROUP. Our success builds on the high-quality team work delivered by all staff in our Company. In 2011 we want to face new challenges, particularly in the automotive field, and we are convinced that we will be able to fully seize all opportunities and to strengthen our position, reputation and good relationships with our business partners. Our goal is also to continue in the dynamic development of the project concerning the transition of car drive systems from conventional fuels to the alternative compressed natural gas (CNG) drive.

Ing. Jaroslav Šarovský, MBA Company Managing Director

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1 Introduction

1.2 Identification – Basic Facts of VÍTKOVICE CYLINDERS a.s. Business name:

VÍTKOVICE CYLINDERS a.s.

Legal form: Headquarters: ID no.: VAT no.:

Joint stock company Ruská 24/83, 706 00 Ostrava – Vítkovice 25849026 CZ25849026

Date of Entry in the Register: Registering Court: Entry in the Register:

1st January 2000 Regional Court in Ostrava Section B, File 2260

Telephone: Fax: E-mail: URL:

+420 596 664 666 +420 596 664 616 [email protected] www.vitkovicecylinders.cz

Registered capital:

500 000 000,- CZK

Core activity:

Installation, repair, reconstruction, inspection and tests of reserved pressure facilities and periodical tests of gas vessels

Shareholders:

VTK CYLINDERS s.r.o. Ruská 2887/101 706 02 Ostrava - Vítkovice ID 26875756

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1 Introduction

1.3 Position in the Group Des.

Business name

Headquarters

VÍTKOVICE HOLDING, a.s.

Ostrava, Vítkovice, Ruská 2887/101, PSČ 706 02

1

VTK CYLINDERS s.r.o.


1.1


Ostrava-Vítkovice, Ruská 24/83, PSČ 706 00

1.1.1

VÍTKOVICE Kordt und Rosch GmbH

58840 Plettenberg, Německo

1.1.2

LAHVARNA BROD d.o.o.

Vladimira Filakovca 3, 35000 Slavonski Brod, Croatia

1.2

VÍTKOVICE MILMET S.A.

Sosnowiec 41-200, ul. Gen. Grota-Roweckiego 130, Polsko

1.2.1

VÍTKOVICE HTB a.s.


1.2.1.1

KZWM OGNIOCHRON S.A.

Andrychów 34-120, ul. Krakowska 83 C, Polsko

1.2.2



1.2.2.1

Silesian Gaz w Siemianowicach sp. z o.o.

Siemianowice Slaskie 41-103, ul. Žeromskiego 21, Polsko

1.3

SAINVER S.A.

Sarmiento 846, 7 piso, dpto A, Capital Federal, Argentina

1.4

CIDEGAS S.A.

Av. San Martin 6445, (1419) Capital, Buenos Aires, Argentina

1.4.1

SAINVER S.A.


1.5

VÍTKOVICE, a.s.


2

VÍTKOVICE, a.s.


3

VÍTKOVICE REVMONT a.s.


4

VTK SECURITIES s.r.o.


4.1

VÍTKOVICE, a.s.


4.1.1

VÍTKOVICE HEAVY MACHINERY a.s.

Ostrava - Vítkovice, Ruská 2887/101, PSČ 706 02

4.1.1.1

Hutní montáže, a.s.


4.1.1.1.1

HMO Stahlbau und Montage GmbH

Hammerstrasse 88, 085 23 Plauen, Německo

4.1.1.1.2

CHEMONT, a.s.

Brno, Vídeňská 119, okres Brno-město, PSČ 619 00

4.1.1.1.3

Ti kran servis s.r.o.

Sviadnov, Nádražní 448, PSČ 739 25

4.1.1.1.4

Mostárna Hustopeče, a.s.

Hustopeče u Brna, Nádražní 43, PSČ 693 84

4.1.1.1.5

INTERMONTÁŽ - servis, s.r.o.

ul. M. Stelmacha 3, Kyjev - 40, Ukrajina

4.1.1.1.6

PRIS - Hutní montáže Ostrava

Nusupbekova st. 32, 480016 Almaty, Kazachstán

4.1.1.1.7

GEO - CZ Construction Engineering, spol s r.o.

ul. Mazniašvili 4, 380002 Tbilisi, okres Čugureti, Gruzie

4.1.2

VÍTKOVICE Lisovna, spol. s r.o. "v likvidaci" VÍTKOVICE ITS a.s. do 26. 11. 2010 VÍTKOVICE RP Slovakia s r.o. do 1. 1. 2010 VÍTKOVICE SLOVAKIA a.s. (do 1. 1. 2010 HBS Invest, a.s.) VÍTKOVICE ÚAM a.s.

Ostrava-Vítkovice, Ruská 101

4.1.3 4.1.4 4.1.5 4.1.6

Ostrava, Vítkovice, Ruská 60, PSČ 706 02 Vstupný areál U. S. Steel, Košice 044 54, Slovensko Zámočnícká 8, Bratislava, PSČ 811 03, Slovensko Ostrava, Vítkovice, Ruská 2887/101, PSČ 706 02

4.1.7

VÍTKOVICE TESTING CENTER s. r. o.

Ostrava - Hulváky, Pohraniční 584/142, PSČ 709 00

4.1.8

VÍTKOVICE MECHANIKA a.s.

Ostrava, Vítkovice, Ruská 2929/101A, PSČ 706 02

4.1.9

VÍTKOVICE GEARWORKS a.s.

Ostrava - Vítkovice, Ruská č.p. 83/24, PSČ 706 02

4.1.9.1

VÍTKOVICE MKV s.r.o.

Plzeň 1, Lochotínská 407/13, okres Plzeň-město, PSČ 301 66

4.1.10

VÍTKOVICE Doprava, a.s.

Ostrava, Moravská Ostrava, ulice 1. máje 3302/102 A, PSČ 703 00

4.1.11

VÍTKOVICE POWER ENGINEERING a.s.


4.1.12

VÍTKOVICE HARD POLSKA sp. z o.o.


4.1.13

VÍTKOVICE REALITY DEVELOPMENTS s.r.o


4.1.13.1

VTK SERVICE s.r.o.


4.1.14

AIRCRAFT RENT a.s.


4.1.15

VÍTKOVICE NP a.s.


4.1.16

PRVNÍ VÍTKOVICKÁ PERSONÁLNÍ s.r.o.


4.1.17 4.1.17.1

VTK SPECIAL a.s. PA SPECIAL, a.s. od 22. 9. 2010

Praha 1, Nové Město, Václavské náměstí 773/4, PSČ 110 00 Praha 1, Nové Město, Václavské náměstí 773/4, PSČ 110 00

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1 Introduction

Des. 4.1.18 4.1.19 4.1.20 4.1.21 4.1.21.1 4.1.21.2 4.1.21.3 4.1.21.3.1 4.1.21.3.2 4.1.21.3.3 4.1.22 4.1.23

Business name VÍTKOVICE HAMMERING a.s. VL Servis s.r.o. od 24. 5. 2010 VÍTKOVICE GREEN TECHNOLOGY a.s. VÍTKOVICE IT SOLUTIONS .a.s. (do 4. 11. 2010 VÍTKOVICE CTM a.s.) VÍTKOVICE ITS a.s. od 26. 11. 2010 NETPROSYS, s.r.o. od 26. 11. 2010 MEDIUM SOFT a.s. od 26. 11. 2010 TAXNET, s.r.o. od 26. 11. 2010 MEDIUM SOFT Slovakia, a.s. od 26. 11. 2010 MEDIUM SOFT - Polska SP. z o. o. od 26. 11. 2010 VÍTKOVICE RECYCLING a.s.

Headquarters Ostrava, Vítkovice, Ruská 2887/101, PSČ 706 02 Ostrava-Vítkovice, Ruská 24/83, PSČ 706 02 Ostrava, Vítkovice, Ruská 2887/101, PSČ 706 02 Ostrava, Vítkovice, Ruská 2887/101, PSČ 706 02 Ostrava, Vítkovice, Ruská 60, PSČ 706 02 Brno, Zábrdovice, Cejl 62, PSČ 602 00 Ostrava, Moravská Ostrava, Cihelní 14, PSČ 702 00 Moravská Ostrava, Cihelní 14, PSČ 702 00 Miletičova 23, Bratislava 821 09, Slovensko Poznaň 60-573, ul. Lindego 6, Polsko Ostrava, Vítkovice, Ruská 2927, PSČ 706 02 Praha 10, Srbínská 4/867, PSČ 100 00

4.1.26

Spojené slévárny, spol. s r.o. NETPROSYS, s.r.o. do 26. 11. 2010 MEDIUM SOFT a.s. do 26. 11. 2010 TAXNET, s.r.o. do 26. 11. 2010 MEDIUM SOFT Slovakia, a.s. do 26. 11. 2010 MEDIUM SOFT - Polska SP. z o. o. do 26. 11. 2010 VÍTKOVICE SCHREIER s.r.o.

4.1.27

ARS VÍTKOVICE s.r.o.


4.1.28

VÍTKOVICE - IOS s.r.o. Langfang Panwei Enviromental Engineering Co. LTD. Przedsiebiorstwo Budownictwa, Eksportu i Uslug Techniczno-Handlowych "BUDEH" sp.z o o. iDTAX Česká republika, s.r.o. od 16. 11. 2010 VITKOVICE INDIA POWER PRIVATE LIMITED od 30. 7. 2010 VÍTKOVICE ACCOUNTING a.s.

Kadaň, Tušimice 13, okres Chomutov, PSČ 432 01

4.1.24 4.1.25 4.1.25.1 4.1.25.2 4.1.25.3

4.1.29 4.1.30 4.1.31 4.1.32 5

Brno, Zábrdovice, Cejl 62, PSČ 602 00 Ostrava, Moravská Ostrava, Cihelní 14, PSČ 702 00 Moravská Ostrava, Cihelní 14, PSČ 702 00 Miletičova 23, Bratislava 821 09, Slovensko Poznaň 60-573, ul. Lindego 6, Polsko Ostrava, Vítkovice, Kotkova 431/4A, PSČ 706 02

provincie Hebei, okres Guan, Lirangdian, ul. Kangli č. 8, Čína Sosnowiec 41-200, ul. Gen. St. Grota-Roweckiego 130, Polsko Ostrava, Moravská Ostrava, Cihelní 1575/14, PSČ 702 00 Ground Floor, Block F, International Trade Tower, Nehru Place, New Delhi - 110019, Delhi, INDIA Ostrava, Vítkovice, Ruská 2887/101, PSČ 706 02

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1 Introduction

1.4 Management of VÍTKOVICE CYLINDERS a.s Ing. Jaroslav Šarovský, MBA Office:

Managing Director

He graduated from the Mining University (VŠB - TU Ostrava), Faculty of Metallurgy and Materials Engineering. He has working in the company since 2010. 2nd January 2010 he was appointed CEO.

Ing. Marcel Ujfaluši Office:

Commercial Director

He graduated from the University of Economics in Prague, faculty of International Business. In the business department in the company he has working since 2006. Since 2007 he was a Head of Grinding balls and Trade and since 1 July 2010 he became a Commercial Director.

Ing. Alena Zezulková Office:

Financial Director

She graduated from the Mining University (VŠB - TU Ostrava), faculty of Economy, major subject The Economy of Industry. She has working for the company as a Financial Director since 20 August 2010.

Ing. Pavel Pawlas Office:

Technical Director

He graduated from the Mining University (VŠB - TU Ostrava), Faculty of Metallurgy, major subject the Foundry Industry. He has working in the company since 1997. Since 1 July 2009 he was on position of Production Director and since 1 July 2010 he became a Technical Director.

Ing. David Otruba Office:

Production Director

He graduated from the Mining University (VŠB - TU Ostrava), Faculty of Metallurgy and Materials Engineering, major subject the Metal Forming. He has working in the company since 1 March 2010, when he was appointed a Production Director.

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2 Production – Basic facts

2 PRODUCTION – BASIC FACTS 2.1 Investments and Modernisation An amount of CZK 12,270 th. was allocated for acquisition of capital assets in 2010. The most important investment project was the acquisition of a machine tool center for CZK 7,000 th. Another major project implemented this year involved the renewal of CNG transport technology for an amount of CZK 1,085 th. The total volume of capitalized assets was CZK 8,085 th. in 2010. The investment plan for 2011 envisages total expenses of CZK 44,900 th., with the acquisition of a LEIFELD steel cylinder capping machine being the most important project in the 2011 investment plant.

2.2 Technology and Reasearch In 2010, the product and product technology development focused on homologation of additional types of CNG-1 cylinders used in the automotive industry, which are produced by applying reverse extruding. We successfully implemented new production technology for cylinders with the outside diameters of 204 mm, 222 mm and 320 mm. The main emphasis was placed on the development of cylinders, in which it was possible to reach the weight / inner volume ratio coefficient of 0.9. A quality management system according to EN ISO/TS 16949 has been successfully implemented and certified as part of the supplies of CNG-1 cylinders for the automotive industry. In the next year, we also plan to extend the homologation for cylinders, which are and will be required by the Asian market. 2010 was marked by the increasingly stricter and ever more demanding requirements of our customers for the quality and fixed-date deliveries of our products. Our Company faced these requirements with determination and started to build a production planning system primarily based on respecting the agreed deadlines for our deliveries in the form of campaign schedules for the particular batches, i.e. product groups, in order to not only ensure timely deliveries, but also to minimize the costs associated with frequent technological idle times of the individual machinery aggregates. The timely delivery indicator has become the primary objective of production planning and has also been integrated in the incentives programme for our staff. Minimization of technological idle times has a clearly favourable effect of reducing incompatible products coming from the individual aggregates. Very intensive efforts were made in 2010 to increase production on our most advanced production line in Plant 3. The new line produced 134.7% more steel cylinders compared to 2009, and this trend will continue in 2011 as well. In engineering applications, development activities were directed towards mobile and stationary storage systems for trailers, home filling stations and container filling stations. In 2010, the development was focused mainly on trailers for an Asian customer. It concerned trailers with a total capacity of 8,480 litres of transported natural gas. As for occupational safety and health protection, the year of 2010 was successful in terms of increasing occupational safety at the workstations. We achieved a significant reduction in the number of work accidents by 60% compared to 2009.

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2 Production – Basic facts 2.3 Environment VÍTKOVICE CYLINDERS a.s. pays continuous attention to environmental protection improvement. The analysis of graphite lubricant consumption in the Acheson moulding tool per moulded product area implies that the lubricant consumption in the Plant 3 extrusion shop decreased by 10.81% compared to 2009. This contributed significantly to the reduction of polluted waste water volume and the reduction in quantity of dangerous waste 05 01 06 – Oil slurry. The occurrence of the O waste was also substantially reduced in 2010.

2.4 Employees Staff and wagess The average relative headcount in 2010: Plan Fact

430 397

The wage policy was performed in accordance with the agreed remuneration principles based on the collective agreement. The Company reached an agreement with the trade union and concluded a single 2010 – 2012 Collective Agreement of VÍTKOVICE MACHINERY GROUP, which was signed, in total, by 11 VMG companies. The signing of this collective agreement entails a substantial harmonization of rules and commitments taken in the field of employment, remuneration, working conditions, occupational safety, social and legal security. The average wage increased by 3.8% on a year-to-year basis against the actual 2009 figure, amounting to CZK 24,027. Motivation system The company has preferred, on a long-term basis, a motivation system which emphasises the specific contribution of employees to increasing work productivity, while achieving the required quality of products and services. A motivation system, which has been applied for a production employee, regulated the variable portion of wages – bonus depending on the meeting and exceeding of defined shift performances. Administrative employees in the production technical unit receive monthly bonuses if they meet defined criteria (meeting the sale plan and meeting the planned volume indicators for individual productions). Administrative employees of the commercial section receive bonuses according to their assurance of job orders in their business groups for the given month and the proportion of overdue receivables in total receivables. Indicator Employees, total Of this: workers Administrative

Average relative head count in 2010 397 315 82

Actual as of 1.1.2010 384 309 75

31.12.2010 409 323 86

< 20

21-30

31-40

41-50

51-60

> 60

5 5 0

97 78 19

120 95 25

91 73 18

91 69 22

5 3 2

Employees by age, as of 31.12.2010 Employees, total Of this: workers Administrative

Average age 40,1 39,7 41,5

Employees by education, as of 31.12.2010 Employees, total Of this: workers Administrative

Primary

Vocational

Secondary

University

21 20 1

240 234 6

107 67 40

41 2 39

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3 Sales – Basic facts

3 SALES - BASIC FACTS The company’s sales are divided into three sales groups – Steel Cylinders, Engineering and Grinding Equipment. All of these sales groups perform their own sales policy and strategy, because they are quite different.

3.1 Steel Cylinders Steel pressure cylinders are a strategic product for our Company; their sale accounted for 70.5% of the total turnover generated by the Company in 2010. After more than a decade of continuous growth, the sale of these products recorded a strong decline in 2009, both in the total quantity sold and in financial terms. During 2010, the market climate related to the global economic slowdown has been changing and the demand has gradually recovered. We were able to return to a growth path, particularly as a result of the strong sale in the third and fourth quarter, thus achieving that 2010 was more successful than 2009 both overall as well as in most particular aspects. The highest year-on-year increases were achieved in the sale of extruded cylinders with a diameter of 204 – 229 mm and accumulators. In most segments, however, the increase in quantity was significantly stronger than the increase in sales revenue, which proves the year-to-year decrease of unit prices and, in particular, the increased share of smaller volume cylinders in the total sales. There was a significant excess of supply over demand on the market throughout the year, both on the European continent and globally. For most cylinder types, there was a continued trend for the market being increasingly occupied by Asian producers with products of lower quality, but also lower price. On contrary, the special product range comprising cylinders with an operating pressure above 300 bar, with a capacity of more than 100 litres, with multiple threading or more corrosion-resistant coating does not have to face such a fierce price competition. We achieved a major breakthrough in the segment of cylinders for the automotive industry. In 2010, the sale volume of these cylinders was 16 times higher than in the previous year. Serial deliveries take place with both European and Asian car manufacturers as destination, while the obtained ISO TS certificates open the doors for us in additional car factories. In the product range of seamless pressure steel cylinders, the customer portfolio experienced further broadening, particularly as a result of the production expansion in the most advanced line of Plant 3. We have won a number of new clients, especially for cylinders with a water capacity above 140 litres. In 2010, our vessels continued to be exported all around the world, including Latin America, Middle and Far East. Traditionally, our most important customers are still in our closer vicinity, with more than half of the production being intended for EU customers.

3.2 Grinding Balls and Bars We were able to generate sufficient sales for favourable prices among our customers throughout 2010. In the first half of the year, the market for grinding balls showed good price stability at the level of end 2009. As a result of the sharp price increase of input materials, we were forced to adapt our price policy during the second quarter of the year. Most customers accepted the changes; in some segments, however, there was a short-term loss of our position of the main supplier. Also this commodity is finding its position on the global markets, but the portfolio of traditional customers is anchored in Europe even more strongly than with vessels. The changes in the national political conditions in several post-Soviet republics were negatively reflected in the ownership structures of a number of mining companies and, consequently, in the distortion of the developed - 10 -

3 Sales – Basic facts distribution networks. On contrary, price changes at the global level allowed the first larger deliveries of grinding balls to the Latin America as well as our return to the African markets. Overall, the year of 2010 in this commodity was the most successful in the Company’s history, and all fundamental indicators were met as planned.

3.3 Engineering In 2010 we continued to develop our customer portfolio both at the domestic and foreign markets. Thanks to our partners, we are gaining access to the largest players in CNG and LNG segments. We achieved significant progress in the supplies of CNG filling stations, particularly in the Central European territory. We successfully performed several deliveries of bundles for manufacturers of CNG and LCNG filling stations and gas (CNG a CBG) transport containers.

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4 Financial Statements of the Company as of 31.12.2010

4 FINANCIAL STATEMENTS of the Company as of 31.12.2010 Balance Sheet - Assets

.

.

- 12 -


.

- 13 -


Balance Sheet - Liabilities . .

- 14 -


.

- 15 -


.

Profit and Loss Account .

- 16 -


.

- 17 -


Cash Flow Statement .

The balance sheet day was not followed by any facts that would have a significant influence on the data specified in the annual report. The company VÍTKOVICE CYLINDERS a.s. does not have any organizational department abroad. The annex to the financial statement of the company VÍTKOVICE CYLINDERS a.s. for the year 2010 is stored in the seat of the company. - 18 -

5 Auditor's Report on Financial Statements as of 31.12.2010

5 AUDITOR’S REPORT as of 31.12.2010 on the Audit of the Financial Statements, Related Parties Report and the Annual Report for 2010 .

- 19 -


.

- 20 -


.

- 21 -

6 Related Parties Report for 2010

6 RELATED PARTIES REPORT for 2010 VÍTKOVICE CYLINDERS a.s. is part of the business concern VÍTKOVICE HOLDING, a.s. Its sphere of business covers essentially the production of pressure devices, their assembly, repairs, reconstruction, revisions and testing. The present report describes its relationships with other entities in the VÍTKOVICE HOLDING, a.s. Group. Table No. 1 includes a list of companies controlled by VÍTKOVICE HOLDING, a.s. All of the companies mentioned in this Schedule were examined, for the 2010 accounting period or, to be more precise, as at 31 December 2010, in relation to the accounting entity as regards - Any concluded contracts; - Performances and counter-performances. Tables No. 2 and 3 provide an overview of the number of contracts signed in 2010 in relation to both purchasing and sales transactions. All of these contracts were concluded at the arm’s length principle, i.e. under standard commercial terms and conditions. Table No. 4 includes the 2010 turnovers for both purchasing and sales, as well as the balance of receivables and liabilities as at 31 December 2010 in relation to the companies that also belong to VÍTKOVICE HOLDING, a.s. VÍTKOVICE CYLINDERS a.s. provided performance (sale – e.g. of products and services) to related parties and received financial counter-performance, or provided financial counter-performance (purchase) to related parties in return for their performance in the form of deliveries, such as services, materials, goods, etc. The Company suffered no loss as a result of the contracts concluded with the related parties or as a result of other measures with these related parties.

- 22 -


List of companies controlled by VÍTKOVICE HOLDING, as in the period from 1.1.12010 to 31.12.2010

.

TABLE No. 1 Order No.

Company name

Registered office

ID No.



258 16 039

1



268 75 756

1.1



258 49 026

1.1.1


58840 Plettenberg, Německo

1.1.2


Vladimira Filakovca 3, 35000 Slavonski Brod, Croatia

1.2



272019626

1.2.1

VÍTKOVICE HTB a.s.


451 92 219

1.2.1.1



1.2.2



1.2.2.1


Siemianowice Slaskie 41-103, ul. Žeromskiego 21, Polsko

1.3

SAINVER S.A.


1.4

CIDEGAS S.A.

Av. San Martin 6445, (1419) Capital, Buenos Aires, Argentina

1.4.1

SAINVER S.A.


1.5

VÍTKOVICE, a.s.


451 93 070

2

VÍTKOVICE, a.s.


451 93 070

3



258 28 258

4



268 75 951

4.1

VÍTKOVICE, a.s.


451 93 070

4.1.1


Ostrava - Vítkovice, Ruská 2887/101, PSČ 706 02

258 77 950

4.1.1.1



155 04 140

4.1.1.1.1 HMO Stahlbau und Montage GmbH

Hammerstrasse 88, 085 23 Plauen, Německo

4.1.1.1.2 CHEMONT, a.s.

Brno, Vídeňská 119, okres Brno-město, PSČ 619 00

463 45 841

4.1.1.1.3 Ti kran servis s.r.o.

Sviadnov, Nádražní 448, PSČ 739 25

640 84 892

4.1.1.1.4 Mostárna Hustopeče, a.s.

Hustopeče u Brna, Nádražní 43, PSČ 693 84

499 68 360

4.1.1.1.5 INTERMONTÁŽ - servis, s.r.o.

ul. M. Stelmacha 3, Kyjev - 40, Ukrajina

4.1.1.1.6 PRIS - Hutní montáže Ostrava

Nusupbekova st. 32, 480016 Almaty, Kazachstán

4.1.1.1.7 GEO-CZ Construction Engineering, spol s r.o. ul. Mazniašvili 4, 380002 Tbilisi, okres Čugureti, Gruzie 4.1.2

VÍTKOVICE Lisovna, spol. s r.o. "v likvidaci"

Ostrava-Vítkovice, Ruská 101

623 05 492

4.1.3

VÍTKOVICE ITS a.s.

Ostrava, Vítkovice, Ruská 60, PSČ 706 02

619 72 576

4.1.4

VÍTKOVICE RP Slovakia s r.o. do 1. 1. 2010 Vstupný areál U. S. Steel, Košice 044 54, Slovensko

31 692 389

4.1.5

VÍTKOVICE SLOVAKIA a.s. do 1. 1. 2010 HBS Invest, a.s.)

Zámočnícká 8, Bratislava, PSČ 811 03, Slovensko

35 744 618

4.1.6

VÍTKOVICE ÚAM a.s.


285 94 771

4.1.7


Ostrava - Hulváky, Pohraniční 584/142, PSČ 709 00

258 70 556

4.1.8



258 71 587

4.1.9


Ostrava - Vítkovice, Ruská č.p. 83/24, PSČ 706 02

258 77 933

4.1.9.1


Plzeň 1, Lochotínská 407/13, okres Plzeň-město, PSČ 301 66

263 25 985

4.1.10


Ostrava, Moravská Ostrava, ulice 1. máje 3302/102 A, PSČ 703 00

259 09 339

4.1.11



268 23 357

do 26. 11. 2010

- 23 -


.

Order No.

Company name

Registered office

ID No.

4.1.12


4.1.13

VÍTKOVICE REALITY DEVELOPMENTS s.r.o Ostrava, Vítkovice, Ruská 2887/101, PSČ 706 02

4.1.13.1

VTK SERVICE s.r.o.


285 90 953

4.1.14

AIRCRAFT RENT a.s.


278 00 458

4.1.15

VÍTKOVICE NP a.s.


278 45 206

4.1.16



483 92 758

4.1.17

VTK SPECIAL a.s.

Praha 1, Nové Město, Václavské náměstí 773/4, PSČ 110 00 289 82 495

Sosnowiec 41-200, ul. Gen. Grota-Roweckiego 130, Polsko 277 86 749

4.1.17.1

PA SPECIAL, a.s.

4.1.18

VÍTKOVICE HAMMERING a.s.

4.1.19

VL Servis s.r.o.

4.1.20

VÍTKOVICE GREEN TECHNOLOGY a.s.


286 06 540

4.1.21

VÍTKOVICE IT SOLUTIONS .a.s. (do 4. 11. 2010 VÍTKOVICE CTM a.s.)


286 06 582

4.1.21.1

VÍTKOVICE ITS a.s.

do 26. 11. 2010 Ostrava, Vítkovice, Ruská 60, PSČ 706 02

619 72 576

4.1.21.2

NETPROSYS, s.r.o.

od 26. 11. 2010 Brno, Zábrdovice, Cejl 62, PSČ 602 00

253 44 536

4.1.21.3

MEDIUM SOFT a.s.

od 26. 11. 2010 Ostrava, Moravská Ostrava, Cihelní 14, PSČ 702 00

253 77 132

od 26. 11. 2010 Moravská Ostrava, Cihelní 14, PSČ 702 00

253 59 924

4.1.21.3.1 TAXNET, s.r.o.

od 22. 9. 2010 Praha 1, Nové Město, Václavské náměstí 773/4, PSČ 110 00 284 20 161 Ostrava, Vítkovice, Ruská 2887/101, PSČ 706 02 od 24. 5. 2010 Ostrava-Vítkovice, Ruská 24/83, PSČ 706 02

4.1.21.3.2 MEDIUM SOFT Slovakia, a.s. od 26. 11. 2010

Miletičova 23, Bratislava 821 09, Slovensko

4.1.21.3.3

MEDIUM SOFT - Polska SP. z o. o. od 26. 11. 2010

Poznaň 60-573, ul. Lindego 6, Polsko

4.1.22

VÍTKOVICE RECYCLING a.s.

Ostrava, Vítkovice, Ruská 2927, PSČ 706 02

278 07 088 258 53 627

35 910 518

277 81 291

4.1.23

Spojené slévárny, spol. s r.o.

Praha 10, Srbínská 4/867, PSČ 100 00

602 02 505

4.1.24

NETPROSYS, s.r.o.

do 26. 11. 2010 Brno, Zábrdovice, Cejl 62, PSČ 602 00

253 44 536

4.1.25

MEDIUM SOFT a.s.

do 26. 11. 2010 Ostrava, Moravská Ostrava, Cihelní 14, PSČ 702 00

253 77 132

4.1.25.1

TAXNET, s.r.o.

do 26. 11. 2010 Moravská Ostrava, Cihelní 14, PSČ 702 00

253 59 924

4.1.25.2

MEDIUM SOFT Slovakia, a.s. do 26. 11. 2010 Miletičova 23, Bratislava 821 09, Slovensko

35 910 518

4.1.25.3

MEDIUM SOFT - Polska SP. z o. o. do 26. 11. 2010

Poznaň 60-573, ul. Lindego 6, Polsko

4.1.26

VÍTKOVICE SCHREIER s.r.o.

Ostrava, Vítkovice, Kotkova 431/4A, PSČ 706 02

476 69 454

4.1.27



253 65 401

4.1.28

VÍTKOVICE - IOS s.r.o.

Kadaň, Tušimice 13, okres Chomutov, PSČ 432 01

473 06 891

4.1.29

Langfang Panwei Enviromental Engineering Co. LTD.

provincie Hebei, okres Guan, Lirangdian, ul. Kangli č. 8, Čína

4.1.30

Przedsiebiorstwo Budownictwa, Eksportu i Sosnowiec 41-200, ul. Gen. St. Grota-Roweckiego 130, Uslug Techniczno-Handlowych "BUDEH" 850017212 Polsko sp.z o o.

4.1.31

iDTAX Česká republika, s.r.o. od 16. 11. 2010 Ostrava, Moravská Ostrava, Cihelní 1575/14, PSČ 702 00

4.1.32

VITKOVICE INDIA POWER PRIVATE Ground Floor, Block F, International Trade Tower, Nehru LIMITED od 30. 7. 2010 Place, New Delhi - 110019, Delhi, INDIA

5

VÍTKOVICE ACCOUNTING a.s.


Poznámky: As at 1 January 2010, the merger by acquisition of VÍTKOVICE RP Slovakia s.r.o. and HBS Invest, a.s. as the successor was registered in the Commercial Register of the entities concerned. VÍTKOVICE RP Slovakia s.r.o. as the company being acquired was wound up and dissolved without liquidation, with a legal successor. At the same time, the successor HBS Invest, a.s. changed its trade name and the registered office of the company as follows: VÍTKOVICE SLOVAKIA a.s., Zámočnícka 13, Bratislava, postcode 811 03, Comp. reg. No. 35 744 618, registered in the Commercial Register kept by the District Court in Bratislava, Section Sa, file No. 1711/B.

- 24 -

285 88 487

278 21 323


.

LIST OF CONTRACTS CONCLUDED (FROM AUTHOR) VÍTKOVICE CYLINDERS a. s. WITH RELATED PARTIES IN THE PERIOD FROM 01.01.2010 - 31.12.2010


Company name

ID No.

Closed Sale Contracts


258 16 039

1


268 75 756

1.1


258 49 026

1.1.1


92

1.1.2


73

1.2


272019626

81

1.2.1

VÍTKOVICE HTB a.s.

451 92 219

87

1.2.1.1

KZWM OGNIOCHRON S.A

1.2.2


1.2.2.1


1.3

SAINVER S.A.

1.4

CIDEGAS S.A.

1.4.1

SAINVER S.A.

1.5

VÍTKOVICE, a.s.

451 93 070

2

VÍTKOVICE, a.s.

451 93 070

3


258 28 258

0

4


268 75 951

0

4.1

VÍTKOVICE, a.s.

451 93 070

0

4.1.1


258 77 950

4

4.1.1.1


155 04 140

4.1.1.1.1


4.1.1.1.2

CHEMONT, a.s.

463 45 841

4.1.1.1.3


640 84 892

4.1.1.1.4


499 68 360

4.1.1.1.5


4.1.1.1.6


4.1.1.1.7


4.1.2


623 05 492

4.1.3

VÍTKOVICE ITS a.s.

619 72 576

4.1.4

VÍTKOVICE RP Slovakia s r.o.

4.1.5

VÍTKOVICE SLOVAKIA a.s. (do 1. 1. 2010 HBS Invest, a.s.)

35 744 618

4.1.6


285 94 771

4.1.7


258 70 556

4.1.8


258 71 587

do 26. 11. 2010

- 25 -

31 692 389 1

5


. Order No.

Company name

ID No.

4.1.9


258 77 933

4.1.9.1


263 25 985

Closed Sale Contracts 1

4.1.10


259 09 339

10

4.1.11


268 23 357

0

4.1.12


4.1.13


277 86 749

4.1.13.1

VTK SERVICE s.r.o.

285 90 953

4.1.14

AIRCRAFT RENT a.s.

278 00 458

4.1.15

VÍTKOVICE NP a.s.

278 45 206

4.1.16


483 92 758

4.1.17

VTK SPECIAL a.s.

289 82 495

4.1.17.1

PA SPECIAL, a.s.

4.1.18


4.1.19

VL Servis s.r.o.

4.1.20


286 06 540

4.1.21


286 06 582

4.1.21.1

VÍTKOVICE ITS a.s.

od 26. 11. 2010

619 72 576

4.1.21.2

NETPROSYS, s.r.o.

od 26. 11. 2010

253 44 536

4.1.21.3

MEDIUM SOFT a.s.

od 26. 11. 2010

253 77 132

4.1.21.3.1

TAXNET, s.r.o.

od 26. 11. 2010

253 59 924

4.1.21.3.2

MEDIUM SOFT Slovakia, a.s.

od 26. 11. 2010

35 910 518

4.1.21.3.3

MEDIUM SOFT-Polska SP. z o. o.

od 26. 11. 2010

4.1.22


4.1.23


4.1.24

NETPROSYS, s.r.o.

do 26. 11. 2010

253 44 536

4.1.25

MEDIUM SOFT a.s.

do 26. 11. 2010

253 77 132

od 22. 9. 2010

284 20 161 278 07 088

od 24. 5. 2010

258 53 627

277 81 291

10

0

602 02 505

4.1.25.1

TAXNET, s.r.o.

do 26. 11. 2010

253 59 924

4.1.25.2


do 26. 11. 2010

35 910 518

4.1.25.3


do 26. 11. 2010

4.1.26


476 69 454

4.1.27


253 65 401

4.1.28


473 06 891

4.1.29


4.1.30

Przedsiebiorstwo Budownictwa, Eksportu i Uslug Techniczno-Handlowych "BUDEH" sp.z o o.

850017212

4.1.31

iDTAX Česká republika, s.r.o.

285 88 487

4.1.32

VITKOVICE INDIA PRIVATE LIMITED

5


od 16. 11. 2010

POWER od 30. 7. 2010 278 21 323

- 26 -

2


. LIST OF CONTRACTS CONCLUDED (FROM AUTHOR) VÍTKOVICE CYLINDERS a. s. WITH RELATED PARTIES IN THE PERIOD FROM 01.01.2010 - 31.12.2010


Company name

ID No.

Closed Purchase Contracts


258 16 039

1


268 75 756

1.1


258 49 026

1.1.1


1.1.2


1.2


272019626

257

1.2.1

VÍTKOVICE HTB a.s.

451 92 219

22

1.2.1.1


1.2.2


1.2.2.1


1.3

SAINVER S.A.

1.4

CIDEGAS S.A.

1.4.1

SAINVER S.A.

1.5

VÍTKOVICE, a.s.

451 93 070

2

VÍTKOVICE, a.s.

451 93 070

3


258 28 258

4


268 75 951

4.1

VÍTKOVICE, a.s.

451 93 070

0

4.1.1


258 77 950

4

4.1.1.1


155 04 140

4.1.1.1.1


4.1.1.1.2

CHEMONT, a.s.

463 45 841

4.1.1.1.3


640 84 892

4.1.1.1.4


499 68 360

4.1.1.1.5


4.1.1.1.6


4.1.1.1.7


4.1.2


623 05 492

4.1.3

VÍTKOVICE ITS a.s.

do 26. 11. 2010

619 72 576

4.1.4


do 1. 1. 2010

31 692 389

4.1.5

VÍTKOVICE SLOVAKIA a.s (do 1. 1. 2010 HBS Invest, a.s.)

35 744 618

4.1.6


285 94 771

4.1.7


258 70 556

7

- 27 -

22

60

9


. Order No.

Company name

ID No.

Closed Purchase Contracts

4.1.8


258 71 587

4.1.9


258 77 933

4.1.9.1


263 25 985

4.1.10


259 09 339

8

4.1.11


268 23 357

6

4.1.12


4.1.13


277 86 749

4.1.13.1

VTK SERVICE s.r.o.

285 90 953

4.1.14

AIRCRAFT RENT a.s.

278 00 458

4.1.15

VÍTKOVICE NP a.s.

278 45 206

4.1.16


483 92 758

4.1.17

VTK SPECIAL a.s.

289 82 495

4.1.17.1

PA SPECIAL, a.s.

4.1.18


4.1.19

VL Servis s.r.o.

4.1.20


286 06 540

4.1.21


286 06 582

4.1.21.1

VÍTKOVICE ITS a.s.

od 26. 11. 2010

619 72 576

4.1.21.2

NETPROSYS, s.r.o.

od 26. 11. 2010

253 44 536

4.1.21.3

MEDIUM SOFT a.s.

od 26. 11. 2010

253 77 132

4.1.21.3.1

TAXNET, s.r.o.

od 26. 11. 2010

253 59 924

4.1.21.3.2


od 26. 11. 2010

35 910 518

4.1.21.3.3


od 26. 11. 2010

4.1.22


277 81 291

4.1.23


602 02 505

4.1.24

NETPROSYS, s.r.o.

do 26. 11. 2010

253 44 536

4.1.25

MEDIUM SOFT a.s.

do 26. 11. 2010

253 77 132

4.1.25.1

TAXNET, s.r.o.

do 26. 11. 2010

253 59 924

4.1.25.2


do 26. 11. 2010

35 910 518

4.1.25.3


do 26. 11. 2010

4.1.26


476 69 454

4.1.27


253 65 401

4.1.28

VÍTKOVICE - IOS s.r.o. Langfang Panwei Enviromental Engineering Co. LTD.

473 06 891

4.1.29

od 22. 9. 2010

36

1

284 20 161 278 07 088

od 24. 5. 2010

258 53 627

4.1.30

Przedsiebiorstwo Budownictwa, Eksportu i Uslug Techniczno-Handlowych "BUDEH" sp.z o o.

850017212

4.1.31


285 88 487

4.1.32

VITKOVICE INDIA POWER PRIVATE LIMITED

5


od 16. 11. 2010

64

3

1

od 30. 7. 2010 278 21 323

- 28 -

1


.

SUMMARY OF TURNOVERS, RECEIVABLES, PAYABLES (FROM AUTHOR) VÍTKOVICE CYLINDERS a. s. WITH RELATED PARTIES IN THE PERIOD FROM 01.01.2010 - 31.12.2010


Company name

ID No.

Turnover from sales

Turnover from purchases

Receivables as of 31.12.2010

269

48 156

46

53 973

10 235

6 305

Payables as of 31.12.2010


258 16 039

1


268 75 756

1.1


258 49 026

1.1.1


1.1.2


1 644

128

2 501

0

1.2


272019626

115 722

129 733

9 145

25 522

1.2.1

VÍTKOVICE HTB a.s.

451 92 219

7 154

5 619

958

0

1.2.1.1


1.2.2


1.2.2.1


1.3

SAINVER S.A.

1.4

CIDEGAS S.A.

38 911

0

1.4.1

SAINVER S.A.

1.5

VÍTKOVICE, a.s.

451 93 070

2

VÍTKOVICE, a.s.

451 93 070

5 776

141 108

67

122 328

3


258 28 258

59

39 384

29

25 889

4


268 75 951

4.1

VÍTKOVICE, a.s.

451 93 070

4.1.1


258 77 950

32 643

1 180

4 640

55

4.1.1.1


155 04 140

2

1

0

4.1.1.1.1


4.1.1.1.2

CHEMONT, a.s.

463 45 841

4.1.1.1.3


640 84 892

4.1.1.1.4


499 68 360

4.1.1.1.5


4.1.1.1.6


4.1.1.1.7


4.1.2


4.1.3

VÍTKOVICE ITS a.s.

4.1.4


do 1. 1. 2010 31 692 389

4.1.5

VÍTKOVICE SLOVAKIA a.s. (do 1. 1. 2010 HBS Invest, a.s.)

35 744 618

4.1.6


285 94 771

4.1.7


258 70 556

4.1.8


258 71 587

28 932

0

7 839

0

623 05 492

do 26. 11. 2010 619 72 576

- 29 -

7 695 12 001

6 833

2 285 13 464

3 211


. Order No.

Company name

ID No.

Turnover from sales

Turnover from purchases

Receivables as of 31.12.2010

Payables as of 31.12.2010

13

687

0

183

4.1.9


258 77 933

4.1.9.1


263 25 985

4.1.10


259 09 339

277

3 701

1

701

4.1.11


268 23 357

121

106

70

0

4.1.12


4.1.13


277 86 749

1

344

4.1.13.1

VTK SERVICE s.r.o.

285 90 953

4.1.14

AIRCRAFT RENT a.s.

278 00 458

4.1.15

VÍTKOVICE NP a.s.

278 45 206

4.1.16


483 92 758

4.1.17

VTK SPECIAL a.s.

289 82 495

4.1.17.1

PA SPECIAL, a.s.

4.1.18


4.1.19

VL Servis s.r.o.

13 868

85 577

5 476

22 058

4.1.20


286 06 540

4.1.21


286 06 582

4.1.21.1

VÍTKOVICE ITS a.s.

od 26. 11. 2010 619 72 576

1

2 257

1

1 188

4.1.21.2

NETPROSYS, s.r.o.

od 26. 11. 2010 253 44 536

4.1.21.3

MEDIUM SOFT a.s.

od 26. 11. 2010 253 77 132

4.1.21.3.1

TAXNET, s.r.o.

od 26. 11. 2010 253 59 924

4.1.21.3.2


od 26. 11. 2010 35 910 518

4.1.21.3.3

MEDIUM SOFT - Polska SP. z o. o.

od 26. 11. 2010

4.1.22


4.1.23


4.1.24

NETPROSYS, s.r.o.

od 26. 11. 2010 253 44 536

4.1.25

MEDIUM SOFT a.s.

od 26. 11. 2010 253 77 132

4.1.25.1

TAXNET, s.r.o.

od 26. 11. 2010 253 59 924

4.1.25.2


od 26. 11. 2010 35 910 518

4.1.25.3

MEDIUM SOFT - Polska SP. z o. o.

od 26. 11. 2010

4.1.26


476 69 454

4.1.27


253 65 401

4.1.28


473 06 891

4.1.29


4.1.30

Przedsiebiorstwo Budownictwa, Eksportu i Uslug 850017212 Techniczno-Handlowych "BUDEH" sp.z o o.

4.1.31


4.1.32

VITKOVICE INDIA POWER PRIVATE LIMITED od 30. 7. 2010

5


36

od 22. 9. 2010 284 20 161 278 07 088 od 24. 5. 2010 258 53 627

277 81 291

40

1 007

602 02 505

48

36 304

12

od 16. 11. 2010 285 88 487

278 21 323

Note: The amounts are exclusive of VAT.

- 30 -

322

3 772

52

741

7 Report of the Board of Directors on the Entrepreneurial Activities of VÍTKOVICE CYLINDERS a.s. and on Its Assets in 2010

7 REPORT OF THE BOARD OF DIRECTORS on the Entrepreneurial Activities of VÍTKOVICE CYLINDERS a.s. and on Its Assets in 2010 Incorporation; Ownership; Payment of Registered Capital VÍTKOVICE CYLINDERS a.s. ID No. 25 84 90 26 (hereafter referred to as „the company“), is a joint stock company registered at the Commercial Register at the Regional Court of Ostrava, the Czech Republic. It was incorporated through the transformation of VÍTKOVICE lahvárna spol. s r.o. and was entered in the Commercial Register on 01/01/2000 under the new business name of VÍTKOVICE Lahvárna a.s. On 17/08/2005 the business name was changed to VÍTKOVICE CYLINDERS a.s. The company´s headquarters are at Ostrava – Vítkovice, Ruská 24/83, 706 00 Ostrava. The company´s core activities are the production, installation and repair of reserved pressure facilities and forges. The company´s 100% owner as of 31/12/2009 was VTK CYLINDRES s.r.o. The company´s registered capital is CZK 500 000 000. It is fully paid and divided into shares. Net Profits; Income Tax For the period of 1 January 2010 to 31 December 2010, the Company recorded a loss of CZK 15,769 thousand. This economic result was caused by the significant increase in prices for the input raw materials, primarily billets and blocks, supplied by our strategic supplier Moravia Steel, a.s. History of Tangible and Intangible Fixed Assets The company duly administered its assets in 2010. Tangible and intangible fixed assets totalling CZK 32,551 th. were acquired. The most important items include the machine tool center for CZK 7,000 th. and the new line inventory with an acquisition price of CZK 16,716 th. An advance payment for the acquisition of Leifeld EN 600/400 CNC was provided at the end of 2010. The total of tangible and intangible fixed assets was CZK 1,240,155 th. net as of 31/12/2010. The assets are duly depreciated following the relevant depreciation plan. In 2010, the Company created no provisions for the repair of tangible fixed assets. For the repairs of assets the company outlaid in 2010 the amount of CZK 88,170 th., of which part was covered by reserves for repairs of assets created in the past period. Inventory The company´s inventory totalling CZK 386,581 th. net relates especially to materials, products, merchandise and work in progress. The increase in inventory balance compared to 31 December 2009 results primarily from the higher production volume, increased prices of input materials and the work-in-progress at the end of the year. Adjustments in the amount of CZK 11,528 th. were created for the inventory of work-in-progress, consisting mainly in unfinished steel cylinders, the realization price of which is lower than their accounting valuation. Receivables Receivables are stated at their nominal amount. The total receivables as of 31/12/2010 amounted to CZK 463,832 th., of which CZK 19,164 th. relate to long term receivables payable to 01/2012 and CZK 444,668 th. to short term receivables payable during 2011.

- 31 -

7 Report of the Board of Directors on the Entrepreneurial Activities of VÍTKOVICE CYLINDERS a.s. and on Its Assets in 2010 Receivables from purchasers were CZK 367,256 th. and the company created adjustments to receivables from purchasers totalling CZK 6,283 th. Receivables from purchasers past due are CZK 12,210 th. (more than 180 days past due) and CZK 92,692 th. (less than 180 days past due). History of Financial Investments The company´s short term financial assets amounted to CZK 36,632 th. as of 31/12/2010. The financial assets are in bank accounts and term deposits with Komercni banka, a.s., Raiffeisenbank a.s., Ceska sporitelna, a.s., HSBC Bank plc., UniCredit Bank Czech Republic, a.s. and Citibank a.s. The company is able to fulfil all of its financial obligations in due time.

- 32 -

- 33 -

The content of the Annual Report for 2010

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