ANNUAL REPORT 2021

31 the purchase of a new shear, the construction of a collection point and the purchase of land. The company has 53 collection points and one processing facility. As at 31 December 2021, it employed 231 employees. In 2021, the company processed and disposed of 9 583 automobile wrecks (+21% y/y) at its ecological plant for processing metal waste and old vehicles using SHREDER processing technology at Hliník nad Hronom. As a result, the limit for processing old vehicles, set for 2021 as a condition for obtaining a subsidy from the Recycling Fund, was exceeded more than twofold. In 2021, the company sold 7 559 tonnes of non- ferrous metals, a 27% increase compared to the previous year. The average prices of non-ferrous metals increased sharply by 38% compared to 2020, and scrap steel prices increased even more. The company shipped 264 thousand tonnes of scrap steel and non-ferrous metals in 2021, a y/y increase of 55 thousand tonnes (+27%). Scrap supplies to the parent company increased by 64 thousand tonnes (+41%). The share of sales on the Slovak market increased to almost 96% of total volume. The remaining 4% of sales of scrap steel were primarily exported to the Czech Republic, Poland and Italy, where approx. 11 thousand tonnes of production were exported last year. To ensure balanced financing of its working capital, the Company used overdraft facilities from two banking institutions in 2021. The purchase, production and supply of scrap steel were stable and relatively even throughout the year, with the usual fluctuations in the summer months and at the year end, depending on the production volume of the suppliers and customers. In 2021, the company spent EUR 3 614 thousand on new investments, in particular to purchase transport and handling equipment, containers and land, and to build new collection points. The costs of repairs of technological and transport equipment totalled EUR 2 014 thousand. In 2021, the company posted revenues of EUR 104 234 thousand, an increase of almost 115% compared to 2020. The significant increase in revenues was primarily due to an increase in prices of all scrap metals and non-ferrous metals throughout 2021, and a significant increase in sales volumes. As a result, the company reported a net profit of EUR 2 820 thousand in 2021, an increase in profitability by 567% compared to 2020. The key expense items were the purchase of merchandise and consumed raw materials and energy, which accounted for almost 81% of expenses. The company’s equity as at 31 December 2021 amounted to EUR 21 647 thousand, which is approx. 46% of the asset coverage. Ensuring regular scrap metal supplies of the required quantity and quality for the parent company, Železiarne Podbrezová, remains the main task of ŽP EKO QELET a.s. In 2022, the company will focus on the efficient use of technical, technological and personnel capacities as regards the production of scrap steel and non-ferrous metals. Therefore, the company will continue to expand its network of steel scrap collection points at production sector locations to stabilise its purchases and so it is able to provide processed scrap to other strategic customers. KBZ s.r.o. KBZ s.r.o. was the second-largest supplier of scrap steel to Železiarne Podbrezová a.s. in 2021. In 2021, the company posted revenues from the sale of merchandise and own outputs amounting to EUR 37 543 thousand, a 129% increase compared to the previous year. In 2021, the company supplied 100 thousand tonnes of metal waste to its customers, of which 76 thousand tonnes of scrap steel were supplied to the parent company. For Železiarne Podbrezová a.s., this amounted to over 24% of total purchases of scrap steel for steel production. The company’s equity as at 31 December 2021 amounted to EUR 3 976 thousand, which is approx. 33% of the overall asset coverage. Due to the increase in selling scrap metal prices and the resulting significant revenue growth, the company made effective use of its capacity and posted a profit of EUR 1 626 thousand for 2021. REPORT BY THE BOARD OF DIRECTORS ON BUSINESS ACTIVITIES, ASSETS AND FINANCIAL PERFORMANCE IN 2021 AND INFORMATION ON THE BUSINESS PLAN